IS IT CONFISCATION?

Otago Witness, Issue 3114, 19 November 1913, Page 80

IS IT CONFISCATION?

AN OP LX LETTER TO THE FRIMI MINISTER.

(Per favour of the Otago Witness.)

Dear Mr Massey,—ln a recent letter I took the liberty of submitting to you a few remarks on the pohey of using graduated taxation as an explosive for bursting up large estates, and I ventured to suggest that it is unjust and therefore unwise and dangerous to use taxation for such a purpose. In now reverting to the subject, -t am going to try to establish my contention.

As you will no doubt remember, in the sessions of 1895 and 18S4, when the -Mackenzie scheme of expropriation for lands-for-settlernents purposes was before the country and Parliament, the cry of ” confiscation ’ was raised, and the answer was made that under English law there is no such thing as absolute property in land, and that the scheme involved nothing more than a slight extension of the principle that even trochoid land is subject to resumption for public purposes. But in the light of experience it is impossible to shut our eyes to the fact that the “slight extension ” involved an entirely new departure of t-lie utmost importance —namely, depriving onu man of his property for the express purpose of dividing it up among a number of other men. It was, of course, thought that the payment to the owner of the value of his land by way of compensation was a complete answer to this complaint; but, looking hack over the period of nearly 20 years that has elapsed since the passing of the Act, a period during which much of the land taken has more than doubled in value, and imagining one’s self in the position of those who were then compelled to sacrifice themselves for the benefit of others, one cannot help feeling that this policy has caused great hardship in many eases. As to the hardship there can bo no doubt. Is it clear that the sufferers arc not justified in accusing the State of confiscation and injustice? If so, it must be admitted that the charge is a very grave one, for justice is the very foundation of a State. Can it be seriously contended that for land taken forcibly from the owner in 1896 the payment of £8 per acre was “ full compensation,” when, as we now know, he could have got, say, £2O, or perhaps even more, for it, if he had been allowed to continue farming it for a few years longer? Docs it not make all the difference in the world that the expropriation was not made for some such public purpose aa the construction of a road or a railway, but in order that the land might be distributed at cost price among a number of other men, to save them from those troubles and trials which the owner had gone through in the hope of making provision for his family by securing for them the benefit of the rise in value which he was helping to create? Can a policy bo described as other than unjust and unwise which treats as if he were a wrongdoer and a “ social post ” a man who had come to the dominion and taken up land at the invitation of the State, and in the supposed interest of the community? Is it tg be supposed that the pioneer settlers would have been induced to serve the State in this way if they had had any reason to suppose that, when they had rendered the land desirable in the eyes of others, it might be taken from them in order that strangers might reap the benefit which they intended as a provision for their families after them?

As you are aware, efforts have been made from time to time to “ improve ” the system. With what object? Was it in order to mitigate the hardship and injustice incidental to such a policy? As land increased in value it became more and more difficult for “ Liberal ” politicians to satisfy the demands of their supporters, and the policy threatened to break down. What was to bo done? Abandon a policy merely because it was becoming impracticable to pay "full compensation”? Apparently no politician could be expected to suggest such an idea. Some other way must bo found, and in 1907 the Ward Government got the law so altered as to enable it to take land at the value on which the owner submitted to taxation and rating, plus a percentage of 10 per cent. What was the purpose of this alteration? To mitigate the hardship and injustice of the system? Obviously not, but to facilitate the carrying out of the expropriation policy by placing Land-owners in such a position that they must, cither submit to excessive taxation or run the risk of having their land taken at a lower price than that at which they wore willing to sell it. There is reason to believe that this scheme was largely supported by “ Liberal” land-owners, who considered themselves safe from all risk of expropriation, and hoped by means of it to 'obtain farms for their sons and daughters and sons-in-law. The attitude of such Liberals is similar to that of those “ Liberal ” merchant-princes, manufacturers, and bankers who support the Lloyd George taxation policy. The probabilities are that it is only a question of time when, in both cases, the Socialists and Radicals, whose schemes they are aiding and abetting for their own ends, will turn upon them and rend them—and serve them right 1 I believe this nefarious enactment is still on tho Statute Book, and I have boon wondering whether you are not going to repeal it, for it means the use of taxation and rating for tho purpose of extorting a ransom —confiscation to tho amount of tho ransom.

This device evidently proved unsatisfactory, for, ns you will no doubt recollect, a very remarkable Bill was introduced, designed to render it easier for tho Government to give effect to the will of their supporters, by whittling tho land-owner’s right to compensation. The judges had decided that land-owners were entitled, not merely to the value of the land taken, but also to compensation for consequential loss. This right was to ho taken away, and the courts wore to bo inhibited from making anv allowance for such losses! Furthermore, the Government was to have the right, in case of its being dissatisfied with the award of the court, to decide not to take the land after the owner had been put to tho expense of defending his rights against an adversary with whom “ expense waa no object ” ; and whatever tho amount of tho expense to which tho land-owner had been put, the court waa to be forbidden to allow him more than a fixed maximum!

By Mr M'Nab's Bill of 1907 an entirely new’ departure was proposed tho principle of which was to foroo all land-owners to subdivide and sell within a fixed period all land owned by them in excess of a fixed maximum area It was, I think, in tho debate on tho second reading of this Bill that you suggested the use of graduated

taxation as preferable to Mr M’Nab’s scheme. Owners were to be allowed a period of 10 years’ grace, and I ventured to express the opinion at the time that Mr M'Nab’s scheme was “ more in consonance with justice than that of progressive taxation.” Sir Joseph Ward dropped Mr M'Nab’s proposal and in the next session seized upon your suggestion. Mr Allen had backed up your idea, but when as Minister of Finance he found himself constrained by the exigencies of the case to increase the rate of progression, he recoiled in horror from the spectre of confiscation presented to him by ihe demands of the Socialists and the msatiable Canterbury Radicals, for a tax equal to 15 per cent, per annum of the value of the land. Possibly Mr Allen may now bo prepared to admit the justice of my contention that the use of progressive taxation, not for the purpose of securing .equality of sacrifice, but ns an explosive for bursting up large estates, is essentially confiscatory. If a tax equal to 15 per cent, would mean confiscation, so does a tax of 10 per cent.; and, indeed, every fraction of a penny of taxation imposed for such a purpose amounts pro tan to to confiscation. It is that very fact that constitutes its chief recommendation in the eyes of Socialists, Single-taxists, Radicals, “ Liberals ” ot hoc genus omne. It would be difficult to imagine a better illustration of the truth and wisdom of Montesquieu’s maxim, “ Let no man who begins an innovation in the State expect that he shall stop it at his pleasure, or regulate it according to his intention.” Your answer to all this would probably be that you and Mr Allen are practical politicians, who have to give effect to- the will of the people; and whilst recognising the force of such a reply, I deny that a vote of a majority of the people (or of nil the people for that matter) can render just that which is essentially unjust. If the will of the people cannot be carried into effect without injustice, then it ought not to bo done. The function and the duty of the statesman in such circumstances, one would think, are, if possible, to devise some other means of attaining the desired object; and it may be that, you have succeeded in doing this in the provisions on the subject contained in your Land Bill. I venture to suggest, however that the time proposed to be allowed to land-owners for subdividing and selling their land, is too short. The State has allowed the evil it now seeks to remedy to go on growing for 50 years, and it should allow a reasonable time so that land-owners shall not be compelled to sell at a sacrifice'. If, however, they should simply lay themselves out to devise ways and means of rendering those provisions futile, they will deserve to be delivered over to the tender mercies of their adversaries, the revolutionary Socialists, the ruthless Radicals, the Single-tax fanatics, and other “Progressives.” From this sketch of the history of our policy of expropriation, it would seem to be clear that, if there be a right way of carrying out. such a policy, we have not hit upon it; and the reason seems equally obvious—that wrong or injustice in the body politic is like poison in the blood—there can be no cure until the last soupcon of it is eliminated, for it cannot,, be suppressed. I intended to discuss in this letter the attitude of latter-day Liberalism on the subject of private property and its confiscation, but the letter is already too long.— Yours truly, J. MacGregor. Dunedin. October 26, 1913.