would be put on the market provided, as is true, there is a possibility of producing more coal than can be consumed. So on Spindletop unrestricted competition crowded an area of less than 200 acres with derricks drilling holes as thick as they could be set and caused an expenditure of over $15,000,000, where a million should have been ample.
Customs, such as that of paying royalty only on the coal mined, may favor wastefulness. If the royalty were per acre foot, it would pay to mine more closely, as I have said in my report on coal. Thus it is for the state's interest that coal royalties should be per ton on coal in the ground, not per ton of coal hoisted. This is practicable and done in some coal fields. In the case of iron ore, too much property has changed hands on the basis of the ore in the ground, as shown by drilling.
In the same way in Indiana it has been found necessary to pass laws restricting the waste of gas or oil, because in so many cases it was cheaper for the individual to save the one and waste the other, regardless of the effect upon the resources of the state or his neighbor's wells. It would seem, therefore, that in relying upon competition as a cure for the ills of the body politic or in attempting taxation of the 'unearned increment' we should not fail to consider carefully the effect of these remedies upon the development or conservation of those natural resources of the state which, once squandered, no financial or political legerdemain can restore.
I know that the questions here raised are difficult ones and I know no panacea for all the wastes of the body politic. I might, indeed, suggest that it seems to me that municipal or state ownership is too often treated as synonymous with municipal and state operation and exploration. The Boston subway is a good illustration of public ownership and private operation, which apparently works better than would any other plan just now. I may perhaps remind you, too, that in Mexico all mining is under a system of state leases, and in Canada lumbering. State control under a system of wise leases, preventing waste, would seem to be wise, when complete state ownership was not. In the United States the policy has in general been for the state to divest itself of the title to its lands with the resources, even though they could be sold only for a song, and were mainly useful to be cut up into lots to be given away with 'free chickens.' Would not, in many cases, a lease for fifty years or longer have been exactly as well? It is a fair question, how far it is wise for a community to let its wealth go permanently out of its own hands, and in particular into the hands of non-residents. Non-resident property holders have been a source of friction ever since the days of the nobleman who let out his vineyard to husband-men and went into a far country. Harvard University years ago, instead of selling Boston real estate outright, had a policy of letting it on a 99-year lease. And of late every now and then a piece of prop-
