THE New Zealand Herald AND DAILY SOUTHERN CROSS. SATURDAY, AUGUST 21, 1926. NEW LAND PURCHASE PLAN.

New Zealand Herald, Volume LXIII, Issue 19412, 21 August 1926, Page 10

THE New Zealand Herald AND DAILY SOUTHERN CROSS. SATURDAY, AUGUST 21, 1926. NEW LAND PURCHASE PLAN.

The Land Laws Amendment Bill now before Parliament contains many interesting features, but none is more important or significant than the wide extension of land purchase from the Crown by the deferred payment system. The proposals touching the national endowment may catch attention earlier because they bear on a subject crammed with controversy - but as a vital "amendment to the land laws of the Dominion, the other side of the bill deserves far more consideration. Last-year when the Hutt Valley Lands Settlement Bill was being debated, the Minister of Lands said it embodied a new form of tenure, which he had hoped to give much wider application. He had hoped that all Crown tenants could be granted similar privileges, those of buying the freehold by the amortisation system of payment. Feeling that certain safeguards would be necessary to prevent abuses, he had had to postpone action. The measure he has just produced gives effect to the desire Mr. McLeod then expressed. Briefly it places the occupier who is purchasing the freehold in the same position as the mortgagor who is repaying to the State Advances' Department a loaD granted for the 364-year term.. The same process of meeting interest and paying part of the principal—in the new case the purchase price of' land acquired instead of an advance secured by mortgage —by a series of equal half-yearly payments is provided. It is a definite advance by the State, of the system of instalment payment of land liabilities. The special, advantages to rural industry of long-term table mortgages have been much emphasised of laie. This new development in the disposal of Crown lands, though not based precisely upon a mortgage deed, amounts in effect to a use of the same process. • .

• The bill proposes to abolish -the. old ' tenure known for many , years as the O.R.P.—occupation with right of'purchase. A selector taking up •land under it was given a licence to,; occupy, with a Currency of 25 years.' He paid as , rent five per cent, annually of the cash-price of the land. After six years occupation he could, if he wished, elect.to buy the freehold. In that event, He was . required- to pay- ,the .price in cash, and ■ the Crown completed alienation of the property. The option to purchase could be exercised s at any time after six years up to expiry of the license, '25 years. If no advantage had been taken of it by then, the licenceholder .was given the option of accenting a renewable lease over the. land. This tenure, or, more, accurately, system of purchase has played a useful part in land settle-' ment and the development of the Dominion. At the same time there can -be no question that the demand for cash on completion of purchase has had its 'difficulties, more, especially of recent years, when money has been scarce,, and rural lands as security for investment have not been greatly in demand. The bill proposes to, do rin one transaction ,whpt might otherwise have been achieved if the purchaser obtained a , loan from the State Advances /Department, Only, in that event, the State would be lending a man money to pay his debt to itself. The procedure of the. bill simplifies the i process, bringing buyer and the (srown directly into relation as parties to a transfer of land. It defers , the time- when a man will see his name on the title deed, but assures him in possession as long as he keeps his payments up to date. His deposit of three per cent, reduces the 36| years of' the Advances mortgage to 34| years. The old ■ purchase at auction on deferred payment is brought into line. Under it the deposit was five per -cent., the term of repayment 19 years, the interest five per cent. Now only three per cent, deposit will.be asked, the term will be 34& years and the interest 5§ per cent. Those desiring to convert the lease in perpetuity and other tenures into freehold are given the same terms and conditions of payment by instalments, while present licence-holders under the O.R.Pi system are , included within the scope of the new amortisation system.

"These being the substance of the amendments in established methods of land purchase from the Crown, iiisvitably- the question must be asked, what will be the probable effects? This easing of terms over a : long period of years should turn renewed attention to . undeveloped Crown land. If accompanying it there is renewed energy in offering areas for selection, the, effect should be wholly beneficial to the Dominion. Once land is taken up, there is a motive to remain on it from the outset, for the original payment gives tHe selector a stake in his holding, increased by every subsequent halfyearly instalment/ , If prosperity comes his way. he can complete the purchase at. any time. It should not be an encouragement to' speculation. The residential and other safeguarding clauses are as sound precautionary measures as can be devised. In addition,. if a transfer is Bought when improvements are in

arrear, the. State can. demand. in cash one-quarter. of thej; purchase price, not of the equity whichpasses, but of the land. THis places a vsty definite obstacle in the way Tof taking up a piece of land, and holding it without improving, on the Chance of making a sale. The prospect of doing this to advantage would not. be encouraging. In regarding the amendment proposed, the main cleavage of opinion will be on old-established lines. Those who do not believe in the freehold system will • see in this measure a* device to facilitate further the granting of that which they disapprove. By the same degree the convinced freeholder, who is now far in tho majority, will welcome' it. He will see in it, quite rightly, a means of furthering the ideal of a Dominion filled with small holders, each working the land which he owns or is on the way toward owning.