A "BOOM" GOVERNMENT.

Dominion, Volume 1, Issue 237, 30 June 1908, Page 8

A "BOOM" GOVERNMENT.

FORCING UP LAND VALUES. To the Editor. . Sir, —Some forty years ago a distinguished writer on a visit to New Zealand drew attention to the prevailing tendency in the now proverbial words, " Don't blow." Recognising the justice of the reproach, people accepted it with good humour, but evidently they have not altered, and if one may judge by tho Premier's reply to Bishop Julius's recent sermons, big talk has beconic so habitual that it is now tho unconscious usago. It would otherwise be difficult to understand tho quotation introduced by the Premier on the occasion as to the reputed public and private wealth of the colony, which he told them at Grcytown amounts to £317,433,000. In supplying'- similar, data the RegistrarGeneral 'cautions tho readers of tho Year Book that tho estimate " is only a rough approximation," and it is evident that such , a calculation must always be largely speculative. The Japanese, in - their estimate of wealth, capitalise half the value of the ten years' yield of .their fisheries. Clearly tho country whoso Minister has tho most vivid imagination has a marked advantage in what is apt to largely become a gamo of brag. But bo that as it may, such a calculation is seldom indulged in outside of "borrowing " countries, and it must remain of doubtful valuo, even after being officially used by a Minister and a banker: ' While personal wealth and several interests are conjectural, the official assessment of real property, being on record, is somo test as to the value of land, and also as a 'sidelight on tho value of tho Premier's statement. By the published official statistics the unimprovod value of ali, lands in New Zealand in 1891 was £75,832,405, and in 1907 £149,682,689 —an increase of £73,850,224. Tho increase by improvements is separately shown as £40,569,283. Now, this doubling of tho unimproved value of the lands of the colony is worthy, of examination, since it may fairly be asked: To what sufficient cause is this extreme advance attributable? Is it justified? Or is it merely ephemeral wealth, alike an illusion and a danger? The dato chosen for this comparison is fairly that of tho advent of the present, our long-lived Ministry. In 1891, although 'the refrigerating process had been somo years in operation, its full advantage, as affecting land values, may liot then have been realised. Prices of wool," tho country's staple, have also risen to exceptional rates in the interim, but tho value of land does not fblloiv every fluctuation of produce, and wool prices are again normal. Again, therefore: what then has caused this doubling of values in tho assessment- of land? It is an axiom that prices in the long run aro regulated by supply and demand. Speculators may force prices bv cornering the market, and pricps rise on any extraneous demand; and here, beyond tho boom in values caused by thc_ expenditure of loan and of private capital, Ministers appear to have deliberately set themselves to force up prices. In the first place, through obstructions and by faddy legislation, Ministers all these years have prevented the opening up of Native lands, and so kept them off the market. By their influence on the Assets Board ihey delayed tho realisation of its-lands and Other properties, valued at £2.700,000, as also of other large estates, notably/ in the Thames district. Whilo so restricting the supply they became large land buyers under various Acts and systems, but more especially under the Lands for Settlement Acts, under which five millions have been spent to date. Then this desire to enhanco the/value of land has been largely assisted by the purchase of suburban land at very full prices. This was ostensibly done to provide sites for working men's homes. Although occasionally unsuitably selected, yet tho effect of such a Government purchase has been to stamp an undue value on a wholo neighbourhood. Capital, at tho same time has been provided for loans on land, and to tho extent of £5,714,620 at rates of interest below the market rate. By so restricting the supply of land, by so buying and assisting buyers, it was impossible that any result could follow but that all land should advance to prices far beyond its productive and legitimate value. . Still, while land was booming and rising to prices hitherto unheard of, tho advance was not equal to the urgent desire of the late Premier, who publicly complained and upbraided valuators for slackness. By a.later amendment of the Act he succeeded in basing assessments upon every extreme and exceptional sale. Responding to such influences, the unimproved price of our country lands now generally rule, and are assessed at. quite 20 per cent, above their legitimate worth. I may refer to tho Nai Nai. purchase, to which the Premier in the same speech lends tho weight of his position in a statement that it could be sold at a profit. This block, with drainage, has probably cost the Government £150 per aero; yet it would be well sold and at its full value if the Government could get £25. Some time ago I visited.a few acres of rich loamy land 'bought by a friend in Staffordshire, and on which he was building; this-land is situated miles outside of a large English Midland town, and he had only paid £40 an acre for it. How absurd, then it is, if it_ is not _ wicked,

to run up inferior land like this at Nai Nai, distant eleven miles from town, to such a figure. Ministers doing the like have no right to complain of tho prohibitory price of suburban lands for workmen's homes, or of oppressive rents, when they themselves have 011 every hand led tho wav in forcing'prices. Our buoyant Premier will not, however, bo moved by such considerations, and tho. contemplation of theso seventy-three millions of imaginary added wealth will probably continue to afford him pleasure, while giving him no hint of tho attendant sufFerinj! caused by tho crushing scale of rents which' over dog an oxccss price of land, and which has hero been so created.—l am. etc..JNO. DTJTHIE. Wellington, June 29.

Tho amateur who places a coach on tho road must bo prepared to meet very heavy oxpenses, for it is almost impossible to mako a conch pay which is run on what may he called approved modem principles.—"Field." The " Whito Peril " is as threatening to tho East as tho "Yellow Danger" is to the West. China and Japan should agree to stop tho Europeans and tho Americans from cornering tho whole of tho industrial and commercial markets in Uio Far East.— Taj jo,"- Tokia,