NATIONAL ENDOWMENT.

New Zealand Herald, Volume LXIII, Issue 19416, 26 August 1926, Page 12

NATIONAL ENDOWMENT.

THE FREEHOLD PROPOSALS.

EASIER TERMS OF PAYMENT.

DEBATE ON THE MEASURE,

MINISTER OUTLINES POLICY. [BY TELEGRAPH. —PRESS ASSOCIATION.] WELLINGTON. Wednesday. In the House this afternoon the Minister of Lands, Hon. A. D. McLeod, moved the second reading of the Land Laws Amendment Bill. He said the bill was a simple bill but contained an extension of the very important principle of the freehold. It had been decided by the Government that, subject to certain restrictions a? to area and value, the right of tho freehold should be granted to the tenants of national endowment lands. The area of these lands amounted to 8,985,000 acres, the great bulk of it being field in pretty large areas. Of that acreage 6,740,000 acres had been leased by the Crown and 90 per cent, was in the South Island. A total of 2,609,000 acres was held in 189 pastoral leases, or ah average of 17,000 acres a run. These figures indicated that the great bulk of the land was of third-class quality. He bad gone carefully into the position of pastoral runs and had concluded that there would be very few of those holdings converted into "the freehold as the land did not admit of very much more improvement.

An Insistent Demand. The cry for the freehold had come mostly from the settler who was improving his land. 4 Over 50 per cent, of the pastoral run country was above the snow line and was not suitable for sale and division would bo a risky scheme to undertake. The number of settlers affected by the bill was 1379 with an average holding of 448 acres. That was the particular section of Crown tenants who were holding lands which were being greatly improved by the hard work of the settlers. Their areas cquld not .be termed large holdings. The demand for the freehold had been insistent ever since the national endowment 'scheme was ' launched and he believed it would bo very much better for the country as a whole, as well as the individual settlers, if the freehold was granted to them. A "total of 2,200,000 acres of, national endowment was not occupied. Some was in the South Island, but most of it was in the North Island, where it was set aside as State forest. .

The Minister next referred to the amortisation principle, which applied to the free,holding of national endowment lands, and said the principle was sotmd. Investment o! Funds. Mr. M. J. Savage (Auckland West) said the Minister had anticipated the criticism which would meet the bill. He regretted to see that the old question of granting the freehold of national endowment lands was again looming so large. With such a quantity of lajid bringing in such large revenue for education or old age pensions they could not but feel apprehensive when there was a proposal to dispose of those lands. He would like the? Minister to say how he proposed to apply tho funds derived from these sales. The Minuter said they would be invested as provided for by the present Act". Continuing, Mr. Savage expressed the opinion it would be better for the State to hold on. to virgin lands, for if it was a good investment for tho individual it should be equally good for the community, under the proposal of the Government he could see no alternative but that the. education and old age pension schemes must stand to lose.

Sir John Luke (Wellington North) said he would support the bill although he at one time opposed it. He was now satisfied the freehold was the better tenure. Sir Joseph Ward's Criticism. , Sir Joseph Ward ' (InVercargill) contended that the question freehold versus leasehold was not involved in this bill and when the national endowment was set aside it was not done on the basis of leasehold v. freehold. These lauds were set aside for specific purposes and it was a question of preserving "them for that purpose. Ho could not see how it was going to benefit New Zealand to change these la fids from leasehold to freehold. Men who had done wpll on the land were men who" had held* leasehold land and who had not burdened themselves with tho responsibility of acquiring the freehold. Personally he had always believed in deferred payment with the right of pur-, chase. Continuing the debate after the dinner adjournment, Sir Joseph said he did not believe sijttlers on national endowment lands wanted "the freehold: Revenue from fhpsse lands "had in a iow years gone'up fro(n £40,000 to £150,000 per annum, aha this system Which had been going on with great success was all going to be changed. He did not question the right of the Government to do so, but he predicted that it would not be long before those who acquired the freehold would lose their lands and ,in all probability their money, too.

A Better Investment. The Hon. 0. J. Hawken said many of thp endowments were not returning 2£ per cent, on the unimproved value, and all the Government had in view was to find a better investment for the money. It was proposed to establish a better endowment and it was not true that the Government contemplated destroying city endowments. As a matter of fact,, if the money was invested in 6 per cent, debentures, "the return would be nearly 50 per cent, better than the return from endowment lands at present. Much of the endowment land was not being cared for as it should be, and its capital value was being reduced. "If a tenant had the right' to acquire the freehold, however, it would bo to his interest to preserve its capital value. Under leasehold the State lost every time, but where one saw a neat, well-cared-for farm, it could be taken for granted the occupier was a freeholder. The freehold was a great help to good farming. He favoured investing the money received from the sale of endowment lands in forestry. I! put into trees the capital Avould double itself in 30 year's. Mr. H. E. Holland, Leader of the Opposition, said the bill proposed to change the national endowment from rural to town arid city lands, into which tjie speculative arid gambling spirit entered much more than in the case of rural lands. It was claimed that the proceeds from the sales of rural lands would be invested in the cities. He would like to know how much of, this revenue had been so invested. He doubted if very much had been invested. " The Minister : About £20,000. Mr. Holland asked what guarantee there was that this Government''which had been attacking the national endowment ever since it came into office, would not set out to destroy the city endowments as soon as they, had destroyed the rural endowments. He proceeded to trace the history of the land legislation of the Dominion with a view to showing the value of the leasehold policy in laying the foun-

dations of New Zealand's prosperity. The policy of parting with national endowments- endangered our old age pension system which, with all its faults, was worth preserving. Rural lands were a better investment than city lands because it was on rural lands that we should spread our population. He protested against the passage of such a bill. "Death Knell" to Leaseholds. The Hon. W. Downie Stewart said the death knell of the leasehold system was that just so soon as there were sufficient State tenants to become a political power they demanded the freehold and that demand could not be resisted. That fact had been proved both here and in Australia. The trouble with leasehold of rural lands was the difficulty of satisfying the farmers that they were getting full value for their improvements on revaluation, no matter how carefully these improvements were recorded. In the cities improvements were not so complicated and there was less in assessing their true value. He denied that old age pensions would be prejudiced by this change. In times of trouble the freeholder was the man to whom the State would look but the leaseholder was the man who would look to the State and that just about expressed the merits of the two systems.

Mr. G. W. Forbes, Leader of the National Party, said the freehold cry had a great deal to do with the success of the present Government at the polls and this bill was in part fulfilment of their election pledges. The man who held a leasehold was in an extremely favourable position with regard to farming his land and that was realised when Cheviot was cut up. The leasehold tenure proved much more attractive. In fact all over the country the , leasehold had proved a most valuable stepping stone to men with limited means. Permanency of Occupation. The Hon. A. D. McLeod declared that if a policy was found detrimental to the community a government had a perfect right to alter it. Leaving the settler out of' account the change was better .for the community. There had been greater permanency of occupation in connection with freehold lands (than leaseholds, which were continually changing hands in bpom times. Continuing, Mr. McLeod said his experience' as a Minister ■ was that a much larger number of transfers occurred among leaseholders than among freeholders. As an instance of circumstances leading to a desire for the freehold the Minister mentioned a block of land in North Canterbury which had deteriorated through bad burns and the inroads of rabbits. This had been tackled by a man who faced the task with the pfosnecfi of securing the freehold and had done good work in .reclaiming the land. It was onlv fair that men who engaged in the development of leasehold lands that had deteriorated should receive some recompense for their work and the expenditure of capital. The second reading was then carried on the voices.