BIG FREEHOLDS STATE SHOULD SUBDIVIDE

Evening Post, Volume LXXXIV, Issue 72, 21 September 1912, Page 9

BIG FREEHOLDS STATE SHOULD SUBDIVIDE

FAIR TERMS FOR OWNERS ! SYNDICATES' EXACTIONS UPON SETTLERS. _____ Hitherto the efforts of the State to satisfy the earth-hunger have proceeded along three main lines— (l) the settlement of Crown lands, (2) the compulsory purchase of private lands, and (3) the graduated taxation of private lands, with 25 per cent, super-tax. By the passage of time, the first two of these processes have become subject to easily foreseen handicaps, in that there are limits, now very obvious, to the supply of Crown lands suitable for close settlement and of [ State money for resumption purposes. ! Every day the Crown estate becomes harder to find and the private land I harder to buy, regard being had to current financial conditions. Moreover, all these methods, including the graduated tax, have been the subjects of political differences. It is only lately that some members of the present ruling party have forgotten to' call compulsory purchase and the super-tax " confiscatory," and the leasehold ( v. freehold controversy abides and will abide. But there is a fourth methodj which has the advantage of being free from party strife — both sides of the House being, indeed, apparently committed io the principle of it — and which, being highly adaptable to the special conditions that prevail in New Zealand, is ' capable of effecting a great deal to advance settlement. It may be referred to briefiy; as the system of resumption and subdivision of estates on deferred payment, Governmentguaranteed. Two outstanding advantages are that it ( does not depend either on that diminishing factor, the Crown estate, nor on an appeal to an unfavourable money market. It constitutes the Government, instead of the profitexacting syndicate, the medium by which a large freeholder sells to small freeholders. The tenure question does not enter at all. Such a system is a necessary development of the fact that, in -order to put , settlers on accessible, productive, and generally suitable areas, we must now look less and less to Crown lands and more and more to large freehold estates. Recently the Prime Minister stated that the Government had been offered half a million acres. But, asked Sir Joseph Ward, where would the Government find the money for such an area at, say, £12 an acre — a total of £6,000,000. Mr. Massey's reply was an affirmation of the principle of State sub-division now under review; a proposal to "settle large areas without any cost to the Government " and with "little or no increase of indebtedness in connection therewith." SUBDIVIDE — ALSO SETTLE. For many years the larger estates have been disappearing, but what is wanted is an acceleration of subdrviirion, and not only of subdivision but of effective settlement. According to figures as to area of freeholds quoted [ lately in Parliament by the Minister of Finance (the Hon. James Allen), there were in 1892 ten estates of 100,000 acres or more, and there is not one to-day. In 1892 there were six of an area between 75,000 and 100,000 acres, and there are only two to-da-y. Talcing the value basis, there are only three estates of over £200,000, and these are owned by companies. Under the new graduated taxation (with super-tax) such an estate would, according to Mr Allen, pay over £6000 a year in taxation; and, he asks, "how can they hold on?" Possibly they will not hold on, but their disappearance 'from next year's Parliamentary return, though it would be quoted as establishing the bursting-up power of the new tax, would not necessarily be proof of any great promotion of close settlement. If a £200,000 estate break* up into two, or three, or four, pieces, the number of settlers need hardly be increased. Even if its fractions come inside tho new supertax limit (£30,000), the resultant addition to the populace of the area may still be negligible. This is said nob by way of criticism of the new land tax scheme_ but to emphasise the fact that subdivisipn is not necessarily settlement. If it were, then the figures adduced by Mr. E. Newman (M.P. for Rangitikei) bearing on estates subdivided in the Hawkes Bay provincial district during the last five years would certainly be impressive. It is represented in. Mr. Newman's table that, out of 28 estate*, which aggregated 306,862 acres in 1907, an area of 218,036 acres has been sold or subdivided, leaving 88,826 acres as the balance held in 1912 by the original owners. But how many new settlers have been introduced by the vending cf the 218,036 acres is not shown, yet that is the only real test. Mere family subdivisions are sufficient to remove estates from the costly upper gradations of the graduated scale, but they do not noticeably advance settlement. In fact, a "subdivided" estate may continue to be worked practically as a whole, even though parts of it appear in separate books. SMALL SETTLER'S TARDY GROWTH. A better test of tho movement in land ownership during the past five or ten years is to consider not merely the limited number of large estates "that have stepped down from the higher gradations in the taxing scheme, but the total number pi rural freeholders. Taking a.

period of four years, and comparing 1906 with 1910, we find that the number of rural freeholders in New Zealand owning from 5 to 40 acres increased by 960 (from 11,485 to 12,445) but the number owning from 40 to 80 acres decreased by 166 (from 6983 in 1906 to 6817 in 1910). Above that, the grades up to 3000 acres show increases. Owners with acreages of from 80 to 100 increased in number by 73 ; 100 to 500 acres, increase 359 ; 500 to 1000 acres, increase 296; 1000 to 3000 acres, increase 269. But taking the total figures showing rural freeholders in 1910— and these are the latest available — it is found that there are in New Zealand 46,922 owners of holdings of 5 acres and over, and the total acreage so held is 19,575,281 ; and out of that number 477 people own 5,622,552 acres, or well over one quarter of the whole ; which is utterly disproportionate, even allowing for the fact that a large portion of the bigger estates is second or third class pastoral country. If the statistics of occupied land (including Crown leases as well as freeholds) were examined, it would be found that the number of holdings of from 1 to 10 acres fell from 21,927 in 1908-0§ to 18,075 in 1910-11. But the freehold figures in themselves are sufficient to prove that close settlement is not proceeding rapidly enough. In Hawkes Bay county alone the estates of over 5000 acres total over' 300,000 acres. Allowing each settler 400 acres, this area > should carry over 750 settlers and their families and dependents. From a perusal of the various Government publications we are safe in saying that the number of owners now is not more than 30. What is. needed is subdivision so carried out or supervised by the Government that it will mean real settlement in living areas. A partition to escape taxation is not really subdivision at all, and where an effective cutting-up is made by a subdividing syndicate the latter naturally extracts all the ransom it can, and the settler starts heavily loaded. Mr. Newman has instanced an estate that the Government would not buy at £25 au acre, and that was later auctioned at £32 an acre. In another case which he quotes, an estate was bought at £23,000 Rafter being refused by the Government at. that figure), was resold to a syndicate for £40,ti00, and the syndicate sold again at an advance of £16,000. ELEMENT OF COMPULSION NEEDED. The State as Subdivider formed the subject of a Bill introduced in 1911 by Sir Joseph Ward, the main principle of which Mr. Massey says he has adopted with modifications. In fixing the functions of the estate owner, the Government, and the prospective settlers, Sir Joseph Ward proposed that the fee simple of the estate should be vested in the Government, which should pay the owner in 4 per cent, debentures payable eleven years after the date of purchase, and which should sell (by public auction or tender) freehold sections to settlers on the following basis of deferred payment : 5 per cent, of price of. section as deposit, and thereafter a yearly fee equal to 10 per" cent, of the price, with' interest at the rate of 4 per cent, on the balance due. Thus the settlers should pay up in ten years, and the owner should be paid off in eleven years. The Bill directs the Government to deduct from the payments by the 'settlers the cost of " subdivision and i per cent, of the total payments for administration expenses, when the transaction is complete, if the settlers' total payments exceed the price that was to be paid to the owner, such excess (with 4 per cent, interest per annum for ten years from the date the Government took possession) shall be paid to the owner (instead of being appropriated, as now, by subdividing syndicates) ; but if the total payments are less than the price, the owner shall pay to the Government the deficiency, with interest on the same basis as above. So the owner receives the profit, or pays the deficit, on a scientific subdivision based on fair selling yalues-^-that is, 6ale of freehold by public auction. Sir Joseph Ward's Bill made this process voluntary, and it fixed the price on the following basis : — Where the Government and an owner are unable to agree as to the price, the owner "may" notify the Government that he is willing to accept the price offered by the Government on the deferred payment conditions set out above, and the Government "may" agree to do so. , Bat it is certain that in order to make the Bill eff&ctive it must include the compulsory resumption conditions as provided under the existing Land for Settlements Act.