The Evening Star SATURDAY, OCTOBER 3, 1925. LAND AND BORROWING.

Evening Star, Issue 19062, 3 October 1925, Page 6

The Evening Star SATURDAY, OCTOBER 3, 1925. LAND AND BORROWING.

The Government Party’s manifesto follows hard on the heels of that issued by the National Party. Writing yesterday on the latter, we said that if the Liberals wished to attack the Government in earnest their best-plan would be to concentrate their fire on the Government’s weak spot—its neglect of yet closer settlement of the land. However, Mr Coates now announces that this is to be remedied. He admits that recently there has been a lull. To quote the manifestot “Pronounced activity in land settlement exr tension has been hampered in recent years owing to the fact that the primary industries have been slowly recovering from the unexampled depression of 192 L” That is only a partial explanation of the inactivity; but the vital point is that the Government proposes to bestir itself and make land available for those who wish to become producers on their own account. Mr Coates now says that the Government expects a demand which will justify it in the continuous purchase of lands suitable for subdivision. But the eggs ore not all being placed in one basket. The purchase of estates under the compulsory sections of the Land for Settlements Act is neither a rapid nor always an economical process. Our reading of the manifesto is that, in respect of land already in occupation and improved to a degree that will permit of closer settlement likely to go ahead without too long a preparatory interval, the Government will first seek to induce private subdivision. No taxing the largo landowner oat of existence by a steepening of the graduated land tax is mentioned, but reliance is first to be placed on Government assistance to private owners in the reading and opening np of the properties they propose to subdivide. This may not convey a great deal to those town-dwellers who are not aware of the expenditure incidental to subdivision, but those acquainted with such matters will readily realise how much State assistance of this nature in the opening up of the land may mean. In this connection one paragraph from the recent report of the chairman of the Dominion Revaluation Board which reappraised the soldiers' farms may be quoted: “ Regarding the larger properties acquired, it can bo definitely stated that, as going concerns, they were well and carefully bought; but the trouble, arose upon subdivision. Under subdivision It must

bo apparent that capital charges are increased by the provision of extra homestead buildings, etc., and it/is recognised that this extra loading is the chief obstacle in the acquisition of lands for subdivision for closer settlement.” Should there not be an adequate response to these overtures for voluntary subdivision, the Prime Minister binds himself to exercise his powers of compulsion. As to land not alienated from the Crown, the Government proposes a general attempt to make it fit for profitable production and get it populated by settlers. There is to bo a general survey of all the unoccupied lands of New Zealand; experiments are to be made with the pumice lands; and there is to be a searching inquiry into the results of the swamp drainage, which has long boon in hand, to see if they will justify a big extension of this form of reclamation for close settlement. South Islanders" perhaps fail to realise what the Government is doing in this lino in various parts of the North Island—at Kaitaia, Hikurangi, Bangitaiki,, Waihi, and Hauraki Plains. The lastnamed enterprise, now in its seventeenth year, may be gauged from the fact that last season the dairy produce from the district within this drainage area comprised 4,189,5201 b of butter and 2,849,7601 bof cheese. Similarly last season two factories in the Bangitaiki drainage area paid their suppliers £90,500 and £24,000 respectively. Nevertheless, the finance of those swamp drainage schemes is burdensome, and this year a commission investigated, inter alia, the capacity of the Bangitaiki lauds to hoar the charges leviable against them, by what methods and to what extent the settlers’ indebtedness to the Crown could bo alleviated, and whether the Government should proceed with the further development of tlio scheme by expenditure out of capital. What has been demonstrated by these reclamations is that there is no land in the country capable of greater production after drainage operations and the gradual feeding of stock have prepared the way for the plough. What the Government is now committed to ascertain is whether swamp reclamation can stand on its own bottom from the £ s. d. standpoint. Of as great importance to the dominion as tho promised revival of the land settlement policy is tho borrowing policy. Mr Coatos probably has better inside information than ho has divulged as to the future possibilities of tbe London market for overseas dominion loans. A good many people doubtless thought that tho hint given when Now Zealand was recently on the London market was chiefly for what may be termed “ display ” purposes—in other words, that a borrower able to offer good security was gently but publicly admonished in order to choke off other Empire borrowers not able to offer quite as good a security. But the fact that our Prime Minister now proposes to reduce external borrowing and rely increasingly on local loans and budget surpluses for funds for developmental expenditure suggests that, in tho immediate future, at least, the London market will not be available to colonial borrowers because of a fundamental reason—curtailment of monetary supplies. In Britain the trade depression is not lifting. Her adverse trade balance confirms tho idea that at length she is trenching on reserves of capital to moot current expenditure. And British interim Treasury returns point to the likelihood that Mr Churchill’s budget is not going to balance on March 81, 1926. Therefore New Zealand must face the alternatives of going to New York for funds or of seeking them from her own people. It is with pleasure that we observe the latter course being not only advocated, but followed. A message from Wellington states that preliminaries are approaching completion for the raising of a £5,000,000 loan in the dominion, the currency being ten years, the rate of interest being 5J per cent., and the issue being at par.