A LAND AND LOAN POLICY.

Otago Witness, Issue 2087, 22 February 1894, Page 15

A LAND AND LOAN POLICY.

An Open Letter. To tho Hon. Richard John Seddon, Prime Minister of New Zealand. (Per favour of tJu Otago Daily Times )

Sir, — In a recent issue of the Ofcago Daily Times there appeared a temperate and effective leading article, of which the following is the keynote : —

"There is no subject on which we have more earnestly desired to find ourselves in accord with popular aspirations than thab of the proper distribution of the agricultural lands of this province among the proper class of people, yet we confess we have as yet, in common with others, failed to point out any satisfactory and equitable mode of effecting this." And, again, alter expressing approval of the principle of the resumption of private estates for settlement, the article continues thus : "We have declared ourselves unhesitatingly in favour of the principle that the State may and should acquire lands for settlement, under proper conditions, yet wo have, aa yet seen no feasible scheme proposed." I believe I can propose a feasible scheme, and in this letter will shortly formulate it. Now, as this most vital question of access to the laud by the people is one that has occupied my attention for many years, and as both a,n administrator and a journalist I am familiar wibh the history of land alienation iv these colonies and the abuses that have sprung therefrom, I may fairly premise that I write with some knowledge and experienca of my subject. fio far the tendency of all our land legislation (I Bpeak from the Australasian standpoint) has, until recently in New Zealand, been to stimulate the acquisition of large estates that are, more or less, held out cf use for speculative purposes, or for the growth of the unearned increment. The time has now come when theso lands, as from time to time required, should pass, for fair aud equitaVle values, to those who are waiting for opportunity to use them. In the last Parliament the Minister for Lands introduced, and passed in the Assembly, a bill, subsequently rejected by the Upper House, under which the Government of the day took power to resume up?n appraisement such private estates aa the Government of the day might consider to be required for occupation and close setblemenb. The existing system, which I understand it is the intention of your Government to perpetuate, is, th&t when the Crown purchases an estate for this purpose, as largely iv the case of Cheviot., to let tho lauds on lease in perpetuity, with conditions of occupation aud improvement, at a rental equal to 5 per cent, upon tho capitalised value of the laud. The strongest objections to the system as it j is are that the leaso in perpetuity, being really ; equal to a freehold, the uoearned iucremeut tails wholly to the tenant, instead of iv part ut least to tue State, and that :t is a potential peril to good government and the democraoy that any Goverument should wield the enormous political power that would flow to it as landlord under such conditions. But leaving the present for a little, what of the near future ? You purpose, I understand, that the Land for Settlements Bill, with certain amendments that I may touch upon later on, ■ shall become law so soon as possible after the meeting ot the new Parliament. Thab is well, and the democracy will sustain yomr Government in its intent ; but given the power to acquire the estates, where are you going to find the money ? Here we reach the crux of the question, and it is in large part to propose a solution to this question that I address to you, and through you the community, this letter. If the Minister of Lands could for fair value resume to-day the estates most suitable for this purpose, he could not provide tho necessary capital without disturbing the finance of the country, and provoking justly adverse criticism. Much as good land easily accessible to market is in request by competent eettlers who would turn it to account, thty are not in a position to purchase right cub. Cheviot has proved this, but it has ateo proved tha l ; there aro plenty of good men ready and willing to become tenants at a rental of 5 per cent .per annum ou values. A loan for such a purpose would not meet with the gentral approval of the couutry, for any iucrease of the consolidated debt would correspondingly decrease the credit; of the couutry in tho financial world, and tho manipulation by any Government of the immense sums that will be annually required for this purpose, would be just cause for apprehension by every prudent member of the community. It thus follows that to devise an adequate scheme, money mu^t be borrowed iv a way that will notadd to the public debt, and these moneys must be so invcttted, and the administration and account so absolutely safe-guarded against possible inteiferenco by the Government of the day, as to bring a sense of seourity to the mo*t timid investor or exacting opponent for tho greater the safeguards the cheaper the money, and this is the surest index of security. How to do these things ? These are the means, I respectfully submit for your consideration, to be made exact by statutory enactment. Lot a London trust, which we will carl "The Supreme Trust" (I owe the term to a leading fiuancier who has approved my scheme), be created in London, which shall have the entire control of the account. It will be essential to success from the beginning that these trustees should be men of the highest standing ia the financial world, and the magnitude of the transactions that would speedily arise make it reasonable to suppoee that the Governor of the Bink of England and a Rothschild might be fairly expected to become members of such a national trubt; and, as advisory trustee for the colony, the Agent-general shou'd have a seat at the board. The trusi should be solely represented iv Naw Zea'and by its paid officer, who would necessarily be a man of the most tried capacity aud known integrity. The object of tke trust buing to acquire estates, including Native lands, in the colony for subdivision and eettlement to meet immediate requirements, the Government would submit to the local representative of tho trust proposals for purchase, with valuation, estimated co&t of roading, &c , and evidences of the public domand lor tho land. Theso he would examine, and employ such means as he might think fib to check and determine. The Governnaf-nt officials and the agent being agreed, the latter would cable his approval to the Supreme Trust in London, who would, in course of post, have all the essential facts already before them. Upon the cabled approval, the tenders would be iuvited for the necessary securities, which would cover cost of roading, &c, and the purchase completed.

Now, whab would bo the nature of the securities cftVred for the advances ? They should be, first, a mortgage upon the land purchased, and after, the collateral security of the State guarantee ; and this, I contend, would be a form of investment that would secure ample capital at 3£ per cent., and in a little time become second only in public favour to English consols.

And here let me point out that these borrowings could not by the most hostile critic be construed into an addition to the public debt, for

the land with the added value of immediate development would be ample coyer, and the application of the money could in no wise be influenced or diverted by any Government, no matter what its needs, how great its power, or how unscrupulous its purpose.

The laud acquired, the Lands department, as now, would subdivide it, with the concurrence of the trustees' representative, into such areas as the needs of intending occupants and the character of the laud demanded. The areas ehould be let, not on lease in ■perpetuity as at present, but on perpetual lease, with conditions of improvement, and tenant right, with periodical appraisement of value 3. By this means a fair proportion of the " unearned increment " would be taken by the general community before the purchase money became extinguished and the land reverted absolutely to the State.

And this brings me to the larger issue underlying my scheme of land and loan reform. The rent to be paid should be as now — 5 per cent, upon capitalised value. Of this sum, 3£ per cent, would go to the bondholder, £ per' cent, should cover costs and charges of administration by the Supreme Trust and its representatives, and the remaining 1 per cent, should be applied to the creation of a sinking fund for the redemption of the debt and the ultimate nationalisation of the land. And then would come the most attractive goal of all, for with the reversion to the State of every landed estate of sufficient value could follow an equivalent remission of customs taxation, beginning with the necessaries of life.

This, I submit, is a scheme that is within the region of immediate practical politics ; for the more it is examined — and I can here only set out an outline — the more will it commend itself to ,all classes of the community : It will bring into the country a large and continuous supply of money, that will be of more value than if directly borrowed by the State, for it will be cheaper money and turned to the most reproductive possible purpose ; it will bo approved by the mortgagees, who need their advances for the more urgent demands of legitimate business investments ; it will add to the real value of land by its development and a rapidly growing population ; it will be applauded by the now harassed mortgagor as a sure path of escape from what now seems, in many cases, impending ruin ; and it will have the full voice of the Democracy, since it devises means that are just and eqnitable to those who have and those who are to take, and above all, for a supreme and certain consummation, the nationalisation of tho land. — 1 am, &c, February 16. Grksley Luiun.