LAND AND LABOUR.

Lyttelton Times, Volume CXXII, Issue 15714, 6 September 1911, Page 5

LAND AND LABOUR.

OUR RAILWAY PROBLEM SOLVED. " A DANIEL COME TO JUDGMENT." fHE EDITOR OF THE " HERALD " IN THE BOX. (This column, weekly set aside for tho discussion of land and labour problems, Is edited by Mr Arthur Withy, general secretary of tho New Zealand Land Values League, with whom alone rets responsibility for the opinions expressed therein.) Our special cross-examiner: You are tho editor of tho "New Zealand Herald," published in Auckland, are you not? Tho editor of tho " Herald " : I a m - Our cross-examiner: In your leading article of August 24 last you strongly advocated that the Taupo-Totara Timber Company should bo allowed to extend its "fifty miles private railway a further sixtoon x miles from Makai to Taupo, thus bringing Taupo within nine miles of Auckland? The editor: I did. I am of opinion that tho company's proposal is ''extremely advantageous to tho public, and particularly desirable for both the province and tho dominion." Our cross-examinor: Yes; you saidas much in tho article referred to. You said, also, the company's " private line already exists from Putaruru to Mokai, and the company asks nothing more nor less than permission to extend this to Taupo, and to be permitted to acquire from Nativo owners 200,000 acres of land, conditionally upon its being subdivided and opened for settlement upon the terms set forth in the Native Land Act A ' profit' will be made on tho land, of course, but it will be a 'profit' created by the access ensured by the railway, and will not ; be a charge summarily • imposed without equally valuable consideration. _ That, I take it, is your reasoned opinion P Tho editor: It is. THE BETTERMENT PRINCIPLE. Our cross-examiner: So far as those 200,000 acres are concerned, we might call it, I suppose, an application of the betterment principle? Tho editor: Yes; it is really the betterment principle. Our cross-examiner: Tha* is to say, the land enhanced in value by the railway—at all events those 200,000 acres —would pay, in part at least, the cost of constructing the railway? The editor: Yes; that is what it amounts to. Our cross-examiner: And you consider that a sound principle? The editor:. I should not advocate it if I did not consider it sound. Our cross-examiner: I trust not, indeed. In effect, therefore, you contend that it is only right and proper that the increased land valuo due to the construction of tho railway—tho "profit " created by the access ensured by the railway "—should be charged with the cost of constructing the line? The editor: I do. Our cross-examiner: And yon hold that a charge made on that principle " will not be a charge summarily imposed without equally valuable confederation ?" The editor: Yes; those are my very words. Our cross-examiner: And what, in the case in question, would the " equally valuable consideration" be? The editor: Why, the increased value given to tho land by the railway, of course. PAYMENT MADE FOR BENEFITS RECEIVED. Our cross-examiner: Yes; that is it, of course. I just wanted to be quite suro that we understood one another. You mean, in short, that a_ charge made in this betterment principle, not being imposed without an equally valucblo consideration, is simply in tho nature of a payment made for benefits received? The editor: Yes; it is a "profit' honestly earned. Our cross-examiner : Honestly earned by—l take therefore, rightly, justly and properly belonging to those who have constructed the railway ? The editor: That is so. Our cross-examiner: Sir, you are " a Daniel come to judgment—a very Daniel." This principle you advocate in the case of this proposed Mokai to Taupo private railway is, of course, a sound principle capable of general application ? The editor: Ye-e-e-c-s. Our cross-examiner: It must be equally sound and just in the case of a Government railway as in that of a private railway? The editor : Well—er . Our cross-examiner: Come now! come now! Tho editor: Ye-e-e-e-s; of course, it must Our cress-examiner: Then why bo so despairing, as you were in your leading article, about the Government construction of railways? Why say, in regard to railways " most, urgently needed"—not only in tho North Island, but in the Sou:* Island as wellrailways " any one of which will repay in due course the cost of its construction," that " it is quite impossible for the Government to contract all these lines immediately?" Why say " they aro simply hopeless for a longer or Bhorter period?" Why say that " it would bo imbecility, for example, to anticipate that under existing conditions a (Government) railway can reach Tauoo for years?" The editor: "Well, they are hopeless. Jt is imbecility to anticipate any such thine. Our cross-examiner: But jvlit are they hopeless? If the Mokni-Tauno line tvculd pay a private company, why will it not pay the Government? The editor: Well—er—you know. CHARGE COST OF CONSTRUCTION AGAINST LAND VALUES. Our oross-oxaminer: If it would be right for the private company whose proposals you support to charge tiie cost of construction against the enhanced value of that 200,000 acres, against tho " ' profit' created by the access ensured by the railway." why would it not bo equally right for tho Government to charge the cost of construction against the enhanced value, not enly of the 200,000 acres, but of all the other land served by the railwav? Why, indeed, would it not be equally right to charge the cost of construction of all the railways we need against tho enhanced values of tho land tliej serve? The editor: Well, you know Our crcss-examkier: Cojt.o now! come now! If the pFinciple i.T sound in tho case you advocate, it must be

sound in these cases too. Must it not? The editor: Ye-c-e-es; I am bound to admit that it must. Our oross-examiner: Then, why not proceed at once with tho < 20 MILLION RAILWAY LOAN suggested by Mr Seymour Thome George, put vigorously in hand all tho railway projects you despaired of, and those needed in the South Island as well and charge interest and sinking fund against the increased land values produced by tho railway—against tho " ' profit'. created by the access ensured by the railway?" The editor: Well—er—it's far too large and ambitious an idea anyhow. Our cross-examiner: Not if you examine it in detail. Some croakers said the very same thing about tho great Assouan Dam across the Nile. _ It was far too big and ambitious a project. It cost three millions sterling. But in a fow year 3 it raised tho value of the land it served by upwards of 27_ millions sterling. Enough to pay for itself. nine times over, if the Government had only charged its cost of construction against the increased value. The editor: That is so. Our cross-examiner: Why, for example, should the Government hesitate to make an immediate start with tho line through tho Poncaroa country, which the Hon R. M'Kenzic state 3 would "servo a million acres" at a cost of " a little over half-a-inilhon sterling," while it would "put a couple of millions more" on to tho unimproved value of the 629,000 acres held by the "forty-two people who would be tho main gainers by jthe construction of the line? ' Takinw into account the whole jo* the "1,160,000 acres to be served" by the line, it would probably increase unimproved values by at least three millions sterling, while costing to construct only half a million. You, surely, cannot deny that it is good business, VERY GOOD BUSINESS,

to spend half a million to produco three millions sterling? The editor: No, I cannot deny that. Our cross-examiner: And it is manifest, is it not, that a State-charge on the land eaual to one-sixth of the annual valuo* of the three millions of "profit" to tho landholders "created by tho access ensured by tho railway " would meet the interest and sinking fund charges on the half-mil-lion loan raised to build the line?

Tho editor: Yes; assuming your figures to be correct, that is so. Our cress-examiner: And it is clear also, is it not, that such a State-charge on the land would " not be a charge summarily imposed without equally valuable consideration? The editor: Y-e-e-e-e-s. Our cross-examiner: As a matter of fact, the " consideration " in this case would be worth six times the amount of tho State-charge, would it not? Tho editor: Y-c-e-e-s, that is so.

Our cros.'.'-cxaminer: Then why not apply this betterment principle to all our railways, built and to .be built? You cannot deny that this principle you have advocated is a just principle ? The editor: N-n-n-o. Our cross-examiner: You cannot deny that all our railways have put into the pockets of the landholders " a ' profit' created by tho accere ensured by the railways"—a "profit" the annus! value of which would far more' than pay all interest and sinking fund charges on our railway loans—a " profit" that has accrued to town and city lands quite as much as to country lands ? The editor: N-n-n-n-o. I cannot deny it.

Our cross-examiner: Then why should not these interest and sinking fund charges be met by a State-charge on land values both in town and country? Why should not the property that reaps the betterment be charged with the cost of constructing the railways that have created the betterment? Can you bring any sound argument against that? The editor: No, I must confess I cannot.

MUCH TO THE ADVANTAGE OF FARMERS.

Our cross-examiner: This would allow, would it not, of a very considerable reduction in freight rates and in passenger rates, much to the advantage oi farmers and others? Tho editor: Yes, I must admit that it would.

Our cross-oxamiiier: And this Statecharge on land values would " not be a charge summarily imposed without equally valuable consideration," would it, now?

Tho editor: No; I must confess it would not.

Our cross-oxarniner: And Mr Massey would bo quite wrong if he were to stigmatise "such a State-charge as " oither robbery or insanity?"

The editor: Quite wrong. Our cross-examiner: it is payment for benefits received? The editor: Yes, payment for benefits received. Our crc«s-examiner : Thar,!: you. You may stand down. But first let mo congratulats you on your advocacy of the betterment principle. That principle is the solution of the railway problem, and of many another problem. During the poet twenty years our State debt, mainly spent on public works s,nd public services, bar. increased by some 43 millions sterling. Knt the increase in land valuer,—in short, "the 'profit' created by" tho benefits secured by those public works nnd public services—has been no loss than 100 millions sterling. If we apply your betterment principle to that, Mr Editor, the

UELIEF TO THF OENERAL TAXPAYER

will bo enormous; while, even then, the landholders will still retain for their own private benefit more, than one-half I

of the bettermont or increased value, duo to public loan expenditure on public works and on public services. They would, in fact, be charged less than half the value of the "consideration," or benefit received. Thank you, onca more. You may stand down. ARTHUR WITHY.