FMENDS AND ENEMIES OF THE FREEHOLD.

Press, Volume LXIII, Issue 12933, 12 October 1907, Page 8

FMENDS AND ENEMIES OF THE FREEHOLD.

Tho division on Massey'a amendment to clause 19 of the Land Laws Amendment Bill wilt have had at least tho sffec* vt eliowing who are the friends of the freehold tenure and who are its enemies. Aa wo hare shown boforo tiie power given in the Bill as drafted to convert a Crown lease-in-perpetuity into the freehold is aa admission of the principle of conTeraion tin theory «nd a denial of it in practice. So long as prices of produce re-

main anything near the present level no Crown tenant will c*re to bay the freehold on the terms prescribed by the Government, nenwly, "at a price "«qtial to the capiUl value of the eajd "land at the time of the purchase." Mr Maesey proposed an amendment to the effect that the lessee might purchase the laud by paying the capital value upon which the rental of 4 per cent, per annum "was computed, also an additional sum equal to tho difference between 4 per cent, and 5 per cent, per annum on such value. It will be remembered that a man who takoi up landon.occupation with right of purchase pays 5 per cent, per annum rental, and Mr Massey's proposal, if carried, would have placed both classes of lessees on exactly tho same footing. This Geema to ua a perfectly reasonable and fair proposition. Tho Prime Minister objected to it, stating that it meant that a tenant who ten years ago was lucky enough to draw a lease of land worth £1000 could now acquire the freehold for £1100 "irrespective of the "extent to which the value of " land had been enhanced by tho "efforts not only of himself but by the " people as a whole." In tho first place, Sir Joseph Ward's arithmetic is not quite correct, since wo imagine that interest on tho accrued annual instalments of 1 per cent, would have to be paid in addition to the instalments fhemselves. But the great fallacy in Sir Joseph's argument is that ho assumes that tho goodwill of the property, or the "unearned increment,'' or whatover you like to term it, still belongs to the State, and not to the leaseholder. The State, when it gi anted the lease, parted with any increase in value which might accrue to the property for 099 years. That the goodwill belongs to the tenant is shown by the fact, «s Mr Fraser pointed out, that even the State allows him to horrow money upon it, and in many cases fhe original lessees have sold their goodwill for hard cash. There are still •erne thick-headed people who have not yet been able to grasp the fact that what the Government have to sell is not an unencumbered freehold, but a freehold encumbered with a 999 years' leaee. Wβ cannot believe, however, that Sir Joseph Ward is not able to appreciate tho distinction. What would Government interest in a lease-in-per-petuity fetch if it were put up to auction at the present dayP If the leaseholder himself were debarred from purchasing, we do not believe the Government would even oHlain the capital value on which the rental was originally computed, since a private investor would not be content with a 4 per cent, return on money locked up in land ot which be could not feet possession for 099 years. 6ir Joseph W*rd, referring to Mr Meese/e proposal, eaid ho could not conceive the possibility of any private landholder consenting to euch an arrangement. For our part we think tihat if. say ten yeara ego, any private landowner let a P>«*> of land for 9 " years on a four per «ent, basic, and the lessee now offered to pay him the priginal capital sum together with an extra one per cent, per annum added, the landowner would ,iump at the ehanoe of getting out of such a bad bargain on such favourable terms. On the other hand tho arrangement would suit the leaseholder very well if he was anxious to eecapo from the covenante of «. leae© and felt a sentimental regard for the freehold. The antifreehold party in the House of Representativea have evidently made up their minds to make thifl a country I of leaseholders if it can possibly be managed. The battle of the freehold, will have again to bo fought at the next election. Meanwhile tho electors will do well to study carefully the division lista on the Land , Bills of the Government.