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Defending Property Rights

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Defending Property Rights

To the Editor:

Democracy and freedom require free markets. But the current Supreme Court decision on eminent domain does not fully reflect that fact. Their decision gives big business and government the upper hand instead of free markets.

Note Webster’s definition of “communism,” “a system or social organization in which all economic activity is controlled by the state.” Just knowing these facts it is easy to see how this issue has united conservatives, liberals, independents, and libertarians, who understand the importance of property rights as one of the foundations of American society.

Consider this true story. In the early 1970s McDonald Hamburgers had approximately 1,500 stores. And one of their many management surveys showed that 80 percent of their profit was coming from the 15 percent of the company stores that they owned and operated. They also knew to operate company stores in a profitable manner required having them located in a large metropolitan area such as Chicago, Atlanta, Columbus, Boston, etc.

McDonald’s was looking into Houston as a new area for development of company owned stores. But, they found out that a small mom and pop hamburger stand owned by Sam McDonald (no relation to the original McDonald brothers in California) already had licensed the “McDonalds” name in the country in which Houston was located.

Ray Kroc, chairman of McDonald’s Corporation, sent Fred Turner to Houston to buy the rights to the McDonalds name from Sam McDonald. Mr Turner offered something like $2 million to Mr McDonald who refused and said that he wanted $5 million. Turner thought this was entirely unreasonable for a store that was only worth some $100,000 and would not negotiate further, thus he went home empty handed. Years later the McDonald’s Corporation paid Sam McDonald approximately $15 million for the same rights.

But our personal property rights and our ability to use free markets to determine the value of our property have been greatly diminished by Supreme Court Justices who apparently do not value the importance of our personal property rights.

The caviler action just paved the way for any big company to go to the government and say look at how much more taxes we will generate than the small guy. Take the property away from the small guy and give it to us because we will make more money for you. This Supreme Court ruling also pits government against the small guy. The founders of this country must be turning over in disgust. We as voting citizens need to use the voting booth to protect our rights from further erosion by voting out of office anyone who tramples our property rights.

Daniel Kormanik

224 Brushy Hill Road, Newtown                                    July 15, 2005

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