THE OTAGO WITNESS. Dunedin, Saturday, December 11, 1858. THE PRICE OF LAND.

Otago Witness, Issue 367, 11 December 1858, Page 4

THE OTAGO WITNESS. Dunedin, Saturday, December 11, 1858. THE PRICE OF LAND.

The price of any commodity is in ordinary circumstances regulated by the relation in which the supply of that commodity bears to the demand for it ; or, in other words, the law of supply and demand. If there be an abundant supply of any article, and at the sametime a small demand for it, the price falls very low ; but if the supply becomes very small, or the demand large, the price advances. This law, though sometimes restricted in its operations by circumstances, is a universal one, and, when there are no monopolies, a beneficial one also — as its direct tendency is, when an article is scarce, to stimulate the production by the prospect of an increased price and to check consumption, and when the article is plentiful to encourage consumption by cheapness, and to discourage production by leaving no profit on the cost of production. Land, when in the hands of private persons, not monopolists, is subject to this same salutary law of supply and demand, but, when in the hands either of private monopolists or of the Government, other elements come into play in determining the price, In the hands of private monopolists a fictitious high price is created by the monopolist limiting the marketable supply and fixing the price, against which there is no remedy — for land cannot like other

commodities be produced or manufactured. When the principal supply of marketable land is in the hands of the Government, the great inconvenience and feeling of insecurity to intending purchasers, if it be allowed constantly to fluctuate in price according to the demand existing for the time being, is a good reason for the ordinary law of supply and demand not being allowed to have its full operation. The objections to selling land by auction appear so serious to many (though we confess to be unable to appreciate them), that this method of obtaining for the public revenue the fair market price of land seems to bo impracticable in this Province, except with regard to Town land. This Province has therefore, in common with the other Provinces of New Zealand, adopted the system of a fixed price, at which the first applicant obtains the land. Upwards of ten years ago, when the settlement of Otago was first founded, the price of land was fixed nominally at £2 per acre for Rural and £3 for Suburban, but in reality the price of the land was 10s., the balance being for advantages of various sorts supposed to be obtained by purchasers. In 1856, the price was nominally reduced for Rural and Suburban land to 10s. per acre, but in reality it was only these supposed advantages and their attendant price that were lopped off, the real price of the land remaining as before. This apparent reduction of the price of land in 1856, which was a real lessening of the necessary expenditure of the purchaser, was a wise and judicious policy— the fruits of which the Province at large is now every day reaping in its increased prosperity and progress, and which the Government and the Province will to a still greater degree reap, if we now cease to play the extravagant part of throwing away our land for less than its real market value. Ifc must, at the very first mention of the facts, occur to our readers that surely land is more valuable now than it was ten years ago, notwithstanding the extended supply, by the expansion of the Settlement into the Province. It will also occur to our readers that if 10s. was a fair average price for land in 1856, it must be a low price now, seeing that the supply is so much diminished and the demand so much increased. If, indeed, 10s. were the market value of our best lands in 1856, it might be that the average value of our now remaining lands is not greater. But facts prove that such is not the case. The price in 1856 was a cheap price. Like the new merchant striving for a share of public patronage, who sells sugar or some such article lower than his neighbours — even at less than cost price — in order to draw customers to his store, and who, so soon as he obtains standing and trade, gradually raises his price to that of other merchants, this Province, which in 1856 held only a fifth or sixthrate position in public estimation, was compelled to adopt some measure to make head against the older and more influential Provinces. We took to "cheap land," and by that measure, in conjunction with, or rather as the basis of, other measures, our Province has been brought into notice and obtained a position ; and we can now well trust to its own real substantial merits — without the adventitious aid of cheap land — not only to maintain the position gained, hut also to secure that higher place to which it is justly entitled among the Provinces of New Zealand. To prove that the market value of land is really much higher than 10s. per acre, we need only point to the facts, that lands purchased at that price from the Government are constantly being re-sold at a much higher price ; that lands of inferior description and far from market are being rapidly bought at that price ; and that large quantities of land are being purchased, not for immediate use, but on speculation, or to secure them from speculators. Now it seems to us but a reasonable demand, that the public, and not private individuals, should have the benefit of the increased value of the public lands. We see no reason why we should be in such haste to get quit of that alone on which depends our available revenue for carrying out public works and the development of the resources of the Province. By raising the price of land to £1 per acre, one-half the land sold would produce an equal revenue • and it would at the same time raise our credit, by increasing the security to our Provincial creditors. Nor need we fear that by raising the price, any serious check would be given to the sale of land. Iti the neighbouring Province of Canterbury —where land is £2 per acre, with far fewer natural advantages than Otago possesses — the sale of land produces a much larger revenue than in this Province ; while, in the other Provinces, where land

is nominally at 10s., they have really no land for sale at all fit to be compared with ours. For the protection, too, otbonajide intending occupants against large monopolists, we would urge a rise in the price of land. There are indications of that voracious genus so much dreaded a year or two ago — the land monopolist — making a descent amongst us, now quite unscared by the scare-crow restrictions ; and although we have no such horror for his presence as some short-sighted individuals have, so long as the public receive fair market value for the land sold, yet we would much prefer that the now increased value of the public lands should pour into the Government Treasury, and thence be poured out on public works, than that it should pour into the already plethoric purses of these monopolising speculators. Let the working classes especially, who hope some day to elevate themselves into the position of landowners, consider this — whether it would not be better for them to | pay a fair, though somewhat higher than 10s., price for land to the Government, than to find themselves, when desirous of purchasing, compelled to submit to the tender mercies of private monopolists, whose demand of price will just rise in proportion to the anxiety to obtain the land exhibited by the purchaser.

In a very few words, let us state the conclusion at which we have arrived upon a serious consideration of this subject, and on which we would invite the expression of public opinion. We hold that the price of land ought to be raised in this Province to a price equivalent to the market value of our best unsold lands ; and that, if we have the power, the expenditure conditions, so useful in the first instance, but now mere bugbears to the timid, should be swept away.

Bt the " Thomas and Henry" we have received a few Sydney papers, from which we learn that the Columbian, with the September mail, arrived in Melbourne on the 17th ult., and the Sydney portion in the latter place on the 18th, but we have been unable to obtain the papers containing September news. The following are the latest markets : —

Sydney, Nov. 20.— Fine flour £20, Wheat 7s. to 7s 6tf , Bran 25., Potatoes £7 to £8. A quantity of New Zealand Oat.i was sold by auction during the week at 3s. lid per bushel. Teas are firmer, and it is exppeted that fine congou will be up to £9 9s. to £10 10s. per chest, as good counter teas are scarce. Sugars in brisk demand, and prices fully sustained. Patna Rice is firm at £25. Shipments of Candles heavy. Fine and good conditioned Wools have advanced from \d. to Id. per lb., the current rates being from Is. 6d. to 2s. 3d. The news by the R.M.S. Columbian telegraphed an advance of 2d. per Ib. This is upon the July series over May prices ; not a further rise in the market, as some have read it.

Melbourne, Nov. 18.— Fine flour £19, Wheat 7s. 6d. to Ss. per bushel, Bran 2s. 2d., Colonial Oats 6s. 3d. to 6s. 6d. The only effects of the English mail upon our markets are, that spirits and flour are duller, and butter and oats firmer.