WHAT ARE ROYALTIES?

Evening Post, Volume CVI, Issue 23, 27 July 1923, Page 10

WHAT ARE ROYALTIES?

QUESTION FOR THE TIM-

BER COMMISSION

CLAIMS OF COUNTY COUNCILS

Mr. J. Strauchon, in the capcity of a Royal Commission, sat at the Magistrate's Court, Wellington, yesterday, to hear the claims of a number of county councils in different parts of the Dominion to half the revenue derived from timber royalties within their respective areas. Edward Phillipps-Turner, Secretary, State Forestry, read a statement prepared by the Director of Forestry, Mr. L. M'lntosh Ellis, prior to his leaving on an official visit to America. The value of systematic forestry was strongly emphasised. Mr. Phillipps-Turner then read a statement prepared by himself in answer to the claims of the local bodies. He said in part: "After the passing of section 34 of the War Legislation and Statute Law Amendment Act, 1918, and the Forests Act, 1921-22, very large areas of Crown land and national endowment land were under the prot visions of these Acts proclaimed State forests or provisional State forests; and from neither of these may any of the revenue received be paid to local bodies. The local bodies, however, claim that the proclamation of these lands as State or provisional Stats forests has deprived them of revenues which, they say, would have come to them through sawmilling rights, which will be granted over these lands. The State Forest Service does not admit this claim for the following reasons:—(a) By far the greater part of the areas referred to were under the control of the Lands Department, and that Department had at the time decided on the abandonment of the system of disposing of timber by charging a royalty on the sawn output. Even before 1918 it was only in a few less important localities that the Lands Department disposed ... of timber on the, royalty on output system, (b) As the Lands Department had decided on tha abandonment of the wasteful royalty-on-aawn output system and had decided to dispose of timber by either public auction or by tender, there would have been no contributions to local bodies from future disposals of timber, as moneys reoeived from sales by public auction or tender are not royalties. (c) Prior to 1918 four separate Royal Commissions had recommended that the wardens (who are not required to have a knowledge of forestry and who have no technicallyI trained staff to manage forests) should be deprived of. their powers to grant timber-cutting rights in mining districts, and also that the forests in mining districts should be under the sole control and administration of the Commissioners of Crown Lands (who were then exofScio Conservators of Forests). There are the strongest reasons for believing that' Government would have acted on this advice, and had this been done ] (for the reasons given under b), future disposals of timber would have been by public auction or tender, and from the revenues received from such disposals there would, consequently, have been no | contribution to local bodies.

"The forests are the property of the whole State, and should bo administered for the benefit of the whole State. Those parts of the State which have no forests would suffer an injustice if those parts which have forests were subsidised by., grants from forests revenues. It. has recently been stated that' the County of Westland expected to receive about £12.000 per annum from the timber revenues of Westland. Would this be fair, when local bodies in most other parts of the Dominion would be receiving no assistance from timber royalties?"

Mr. A. W. Blair, who appeared for seventeen counties, said that a serious error had crept into the official statement made-by Mr. Phillipps-Turner— an error arising through a misapprehension of the legal position. Mr. Phillipps-Turner said . that , Sir John Salmond, when Solicitor-General, gave a legal opinion that timber sold fov a lump sum or by tender was not payment of a royalty. Mr. Blair ventured to say that if Sir John Salmond had had the form of the timber license granted by local bodieß submitted to him, he could not have given that opinion. Mr. Blair added that he and other counsel were of opin ion that the Department had taken" an erroneous view of the law.

Mr. Phillipps-Turner then read the legal opinion furnished by Sir John Salmond when. Solicitor-General.

Mr. Blair said the question before the Commission arose out of* section 319 of the Land Act, 1908, which provided that onejialf of the revenue received in respect of royalty shall be payable to the local authority of the district in which the timber was cut; and the local authority received the amount in trust to expend exclusively in the construction, repair, and maintenance of roads. It was abundantly clear that where timber was cut by virtue of this license— that was. what was meant by the use of the word royalty under section 319 of the Land Act. They sold timber without giving royalties, and local bodies were thus deprived of those moneys by a mere departmental alteration supposed to be successful—for the purpose of taking the sale of timber out of the category of royalties. Mr. Blair maintained that it did nothing of th« kind. Mr. l>-air quoted legal opinions in support of his contention. The first stew the Lommissttn should take was to' have this legal point determined by a judicial decision. He maintained that the method adopted by the Department was defeating the purpose of the Legislature. -me Commissioner will now proceed to draw up his report.