The Press. FRIDAY, MAY 18, 1906. MR DUNCAN ON THE LAND BOOM.

Press, Volume LXII, Issue 12505, 18 May 1906, Page 4

The Press. FRIDAY, MAY 18, 1906. MR DUNCAN ON THE LAND BOOM.

Tho Hon Thomas Duncan, Minister for Lands, has uttered a timely word of warning in reference to the land boom now making itself apparent in many parts of tho colony. Inasmuch as we have ourselves on several occasions strongly urged its dangers, we need hardly say that wo cordially agree with tho Minister's remarks. Speculation in residential sites, especially in and around Wellington, has attained the dimensions of a positive mania, but as Mr Duncan pointed out, the prices ruling for rural land in many parts of tho colony aro far too high. Tho Minister quoted a case of a farmer, a friend of his, who had let his farm for £2 an acre, or about double its real value, and he especially referred to the high prices paid in Taranaki for dairying land—prices which barely enable a farmer to make a living, even with the cheap labour obtained by working his family to the verge of slavery. It would seem that there aro some people who forget everything and learn nothing. Severe as was tho lesson taught to New Zealand farmers some years ago when, tempted by the high price of wheat, they pledged their credit to tho utmost to buy wheat-growing land at an inflated price, it seems already to have been forgotten. Tho desire to "get on the land" is a vory healthy sign in any community, and ought to bo encouraged. It cannot too often be impressed on would-be settlers, ' however, that land can be purchased at too dear a rate. The purchaser ought, to baso his valuation strictly on what can bo got out of the land, and in making his calculations ho ought to base them not on the value of the produce when it happc::.. to be at on unusually high price, hut on its averago price calculated over a series of

years. As for the speculation in land in and around Wellington, it is gambling pure and simple. History affords many examples of the same species of folly. Mr Duncan referred to tlve land boom in Melbourne in 1&93, and tho terrible relapse which followed—a very apposite illustration conveying a warning which Wellington people would do well to heed. But, as a matter of fact, the Wellington land mania is merely the South Sea Bubble, tlio Joint Stock

mania, and other like infatuations, making a roappoarnnoe in modern times in a slightly different form. The statement recently published in our columns to the effect that tho land transactions in and around the "Empire City" represent the transfer of residential sites sufficient for half a million people shows tho unsound naturo of the movement. Tlie sections aro being 6old over and over again on paper, very little cash passing, and in fact aro merely being u.-ed as counters in a huge gambling game. No doubt the high prices, largely brought about by the heavy borrowing of the Government, have had a good deal to do with tho bcom in land. Mr Walter Bagehot, in one of his most striking chapters on economic questions, has sketched the usual course of a mania of this kind. He points out that as

rar as prosperity is- based on a greater quantity of production, and that of tho right articles, its basis is good. Human industry is more efficient, and therefore there is more to be divided among mankind. But. in so far as that prosperity is based on » general ri«* of prices, it is only imaginary. A general rise of prices is a rico only in

name; whatever anyone gains on the article which ho has to sell, ho loses on j the articles which he hns to buy, and so Ihe is just where lie was. Nevertheless, I he points out that most people are liapi pifT for it; they think they are getting richer, though they aro not. This is tho time when joint-stock gambling flourishes and land booms tako their iise. It is also, as the same acuto observer reminds us, a time which engenders fraud. "All people are most "credulous when they are happy; and "when much money has just been made, "when some people are really making it, "when most people think they are mak"ing it, thore is a happy opportunity for "ingenious mendacity." It does not need much perception to see that there is unhealthy speculation going on just now in other things besides land. Mr Duncan wishes something could be done with land-booming syndicates, and seoms to hint at legislation. We ourselves have no faith in legislation in such a case. Far better than adding another law to our already orer-laden statute book would it be if tho Government were to reduce- their extravagant borrowing to reasonable limits, raising only sufficient mone3' to carry out really necessary reproductive works. That in itself, wo believo, would apply a much-needed check and bring the public to their senses. In tho meantime it behoves the banks and building societies and

financial companies of every kind to be cautious in their advances, especially where there is reason to believe the money is being used for speculative purposes. Wo agree with Mr Duncan that the Government ought to bo very guarded as to the price it pays for land for settlement. If tho gambling tendency is checked now, no very great harm will bo dono, seeing that thore is a substratum of real prosperity to fall back upon. If it is allowed to proceed to its natural conclusion the result may be widespread loss.