FREEHOLD OF CHEVIOT.

Lyttelton Times, Volume CXXIII, Issue 15862, 27 February 1912, Page 3

FREEHOLD OF CHEVIOT.

to ths MDvr.m. Sir,,—ln your issue of February 8 you attempt to show that, if Choyiou were sold at the original value, Tho State would suffer a loss of £I6OO per vear. loss tho rebates of between £3OO and £4OO. I wish 1 could run my business on tho same lines as your calculations, for you have made no allowances for expanses or losses, and consequently are bound to show a good profit. You say the annual rental is £6424 less a rebate. The actual amount received, however (and there are no arrears) last year was £5837. You estimate tho average price paid for money by the dominion at 3§ per cent, or £4818; this leaves a deficiency of only £lOl9. But if this land were freehold, the land tax would be collected as the values have increased, and [with all exemptions a number of tenants arc already paying a small tax. It clearly shows that the bulk of the State’s present interest would be taxable. Some would be paving graduated tax. If £70,000 only were paying ordinary tax, it would amount to over £290 per year, and when we consider that the bulk of Cheviot has changed hands, some of it several times, a very moderate sum to allow for loss of stamp duty would be £IOO per year. . This reduces the amount of profit to the State to £629,. But against this I we have to reckon the cost of administra.tion and inspection. This is difficult to estimate, and it is not fair to take Cheviot alone. AA 7 e must take the whole of the L.I.P. lands. There have been no losses on Cheviot, and consequently it. is always taken as an object-lesson. Tho difference between the rate of interest we pay on our 999 years’ leases and the amount wo charge the tenants is quite 1 per cent. Yet when surron-. ders, 'loss of rent and nil'charges are paid, there is very little profit oh the whole account; hut- if we only charge J per cent against Cheviot, our surplus is converted into a debit balance of £l3. With this amount you propose to* build the Culverden-A\ T aia.u railway. Patient AA 7 aiau.

There is a further point. We must not base our calculations on the price wo paid for previous loans, but on present prices, and financial experts generally agree that the’ last five million loan cost fully 4 per cent. If we could pursue a more self-reliant policy, a.nd encourage small holders to become their own landlords, their money and other nrivate sources would relieve the State from going so frequently to the London market. This would improve our credit, and an improvement of only i per cent on renewals, conversions and new loans to a dominion with over eighty millions of debt would be a very great relief to the taxpayers.—l am. etc.. DAYTI> JONES. P.S.—Many Cheviot settlers own land in addition to their Cheviot properties; consequently they would paygraduated tax on the whole amount, including mortgages, and the land tax would probably bo much in excess of what I havo estimated. —D.J.