RATING ON UNIMPROVED LAND VALUES

Waikato Argus, Volume XVI, Issue 2627, 30 April 1904, Page 2

RATING ON UNIMPROVED LAND VALUES

Mb Geokgk Fowlds, H.H.R., delivered an address on tnii subject in St feters Schoolroom, Hamilton, list evening, There was a good attendance, and iu the absence of His Worship the Mayor, Mr J. S. Bond occupied the chair. Mr Fowlds, on coming forward, was received with applause. He said he could hardly think it possible it was necessary for him to be talking to an intelligent uudienoe in favour of rating on unimproved values. He wondered now any of them would feel if asked to address a gathering composed of those who had had college training, had spent three years at a university and graduated with honours, as to why 2 and 2 are 4. Three years ago they hail had wisdom euough to adopt a system of rating * hien was gradually and increasingly receiving the assent of the civilised peoples throughout the world. It was simply incredible the suggestion that the people of Hamilton after trying the new and better system should desire, or even consider the advisability of going back to, the old. They had achieved by the action ot those who had petitioned the Council to revert to the old system the position of being the first towu in New Zealand that had considered the quest on ot going back to it again. Nowhere in New Zealand had there yet been a mov. meut to take a poll on the question. Tne benefits and superiority of the system now iu force in Hamilton had been recognised everywhere, without any attempt to revert, ant' he felt certain that when the ratepayers calmly thought the matter over there would be no two opinions as to what the result would be when the voting had takeu place, and a reversal could only come acout by a strange misrepresentation of facts in connection with the s>stetn. Instead ol lecturing in tavour ot rating on uuimpioved values, he would have liked to have attended to hear some of the arguments of its opponents, and answer them, as the onus ot showing that it was desirable to revert to the old system should be on those who pioposed i.. The only arguments that had been adduced against it had been those contained in a letter which appeared in Tun Wmkato Arqos, signed • Ratepayer.' Iu adopting; the oystem they haa done they were perfectly in line with the best democratic thought of the world. Polls had beeu takeu in something over 60 places in New Zealand, and In only nine instances had a majority voted against the pro posal, while Che total votes had been almost two to one in favour of rating on unimproved value. The first place where it had beeu adoptod was Falmerstou North, and Feilding, a few miles away, had carefully watched it in operation, almerston North at that time was iu a state of stagnation. New buildings at ouce began to spring up, and ibis stimulated trade and other industries, and in a very shore time the town was as brisk as ever. Had this not been experienced in Hamilton ? Feilding then by an almost unanimous vote adopted the system. Then Westport and West Harbour both carried polls by substan ial majorities. A poll was to be taken in Duneain, and Uhristchurch had adopted it, and Auckland svould shortly have the unenviable repuutatiou of being; the only city which raised its rates un the o.d system. The Town Clerk of Wellington had approved of the idea, and stated that dmiug the first year of its adoption 100 per cent, more building permits had been issued than during the previous year. It had the effect of fairly apportioning the rate, and making a more uniform a»seasmeut. Speaking of its etiects on the wages of the workers, Mr i'owlds said that nowhere else in the colony but Wellington were employers of carpenters paying 2d or 3d an hour over the wages fixed by the Conciliation and Arbitration Court. This had led to recriminations at a meeting ot the Master Builders' Association, the ir.emtiers blaming each other for stealing away men. The shortage of biicks in Wellington and the high wages pud was the direct outcome o; rating on unimproved values. The owuers of ramshackle buildings on valuable allotments had demolished them and proceeded to erect handsome structures iu their places The same might be said of Uhrisiohuroii, although he had not had the same opportunity of collecting data as ho bad with reference to Wellington. He referred to the favour into which the system was rabidly coming iu the Old Country, uDd said every important municipality throughout Great Britain was joining with Glasgow in petitioning the Huuse ol Commons to pass such a Bill as would enable them to adopt the same system that they had in Hamilton. They realised that every municipal improvement was putting money into the pockets of the landlords, and now asked for power to tax on ground tent. A Bill in this direction had pa«sed its second reading in the House of Commons in 1903 by a majority of 67- the same conditions applied in New York, where they dei sired to have power to make a separate rate on lands and improvements. Taking that city of five boroughs, includiug the larger city ot New York, ihe valuation of laud apart Irom improvements is 3,697,000,000 dollars, and the total value ot improvements, including the skysorapers up to thirty storeys, was 1,110,000,0U0 dollars. It was almost impo>sib e to grasp the immensity of those figures. Supposing the value ot agricultural land was put at £lO an acre —a fair average price—the value of the city of New York would represent -x streak ot suzh land a mile wide four times round the earth. It was a uatural law tint where people congregate most together the land values grow up for the very purpose of providing revenue tor the additional cost of Government. When an attempt was made to bring in the system in Auckland they found that the only properties in yuoen-street that would pay less taxation than at present were the Strand Arcade and Milne und Choyeo's block ; but they were high up the street, and had they been at the bottom instead of the top they would have paid more than under the old system. Not one man in a thou» sand would believe that in the city of New York where there were enormous buildings that the value of the land exceeded that of the buildings. In the Mauhattau Borough, which contained the largest aud most expensive building iu New York, the value of the land was 2,937,000,000 dollars, while the improvement were valued at 575,000,000 dollars. In this borough the number of evictions in 1903 was 6463, while Ireland had never com • within l-20th ot that in one year. The questiou was ; la the system just and should stick by it at all costs—there could be no possible doubt as to the justice of the method of raising local rates. The services rendered by the municipality were found registered io ib/f land values, and did not add one penny to the value of auy building. If they burnt the building they would 6nd that the increased value remained in the site when ihe building was gone. New Zealand w as rapidly coming to the conclusion that it was just as absurd to tax a building as it was to tax the contents of a building, und that by rating on unirn proved values each person pays a proper snare for services rendered by the muuix cipality. The manilesto issued by the committee in Hamilton he Characterised as a tplendid presentation of the case, and said if he spoke for three days bo could not put things in a clearer light thau it did. The only presentation from the other side was the letter by ' Ratepayer,' which had six or seven references to sin,?letaxers. It was au extraordinary thing how much consolation that old woman got out of that blessed word, ' Mesopotamia,' and the opponents of the system apptared to get similar consolation from the word singletaxer. The speaker theu dealt with the letter at great length, dissecting it sentence by sentence. Want of space prevents our giving extracts from the letter, so we must therefore icfer to, the salient points ot Mr Fowlds' replies and then pass ou to other matters which have perhaps a more important bearing ou the question at issue. The epeiker continued : -Tho thing narrowed itsell down to this : Is tho principle an advantage, aud had it worked out satisfactorily in Hamilton ? As to the statement re garding those who had a ' statutory and unrestricted right to live on their neigh boure,' Mr Fow ds said the man who owned land and was pocketiDg the rent without giving anything iu return was the ue who had for three years or more been living on his unfortunate telluws. (Applause.) As to population, he said no census had beeu taken sinco 1901. Hud it not inc-ea ed ? And land \alues kept increasing faster than the population If the population had not increased what had all the new houses teen built for ? Tho value of improvements hud more than trebled since the system catne into operation. As to the ' btvgqy ' trotted out by 'Ratepayer,' speaker said it reminded hica of Mr Samusl

Vai e's p ediction pnor to the adoption of I he th it it was; going to he worst than chaos. He quoted fom a letter written by that gentleman whichapp-ared in The WaIKATo Akgus on August 2lat, 1901, in which he said the rates had been raised from 21 to 31 on the unimproved value, and if in another four years it »at not raised to 41, the people would be lucky. But what was the result ? One psnny in the £ on the unimproved value gave £770 19i 4d, while the last general rate at 3d iu the £ only produced £734 6s 6o". (Applause). Instead of the 4d or 5d rate predicted by Mr Vaile, Id would give them the same revenue, if they were satisfied with that. (Applause). Why, he asked, had Dot ' Ratepayer ' given some evidence that the ' single tax,' as he called it, had been hurtful to the place and also as to its unfairness 2 Regarding the statement that butter-fat was responsible for the advance of the district, Mr Fowlds aske 1 if they had not had fat in the Waikato long before the adven* of unimproved values, and the price wat ' very nearly as high then as now. As to the ' parity of reasoning,' etc., Mr Fowlds said Auckland, as compared with Wellington, was at stagnation point, and there had never been a time during the last three years when carpenters had been paid 2d or 3d an hour more than the wages awarded by the Court. There had certainly beeo something of a scarcity of bricks, but he had not heirdof any buildings having t stand over on that account. Io reply to ' Ratepayer's ' question. ' If you do not tax industry, what have you left to tax,' etc., Mr Fowlds said there was privilege left to tax. They had been taxing laziness during the last two or three years and also the man who had a section lying idle, while the industrious man had (zone free. If they continued this system they would have lewer Izy men in the town than there are now. (Applause). If • Ratepayer's' statement that 'the acacia-covered acre brought iu almost as much in the way of rates under the old system as under ti.e new,' were correct there was something wrong, and it was quite evident that in th* past the owner must have been charged too much. ' Ratepayer ' admitted that the section referred to had been sold for more under the new .'ystem than could have been obtained for it under the old. Let him tell that to Mr Vaile. Ratepayer says, ' that it is quite sufficient to know what has been suffered iu (he past, and that which necessarily happens under a rotten system ouce is only too likely to happen again.' He (the speaker) agreed with that; what had happened during the last three years would happen again. The ceo us .akin in 1896 gave the population as 1248, and for the period 1901 1253. The absence ot increased population was rtflacted in land values, but the last three years had witne>*ed an enormous increase in land values. A 9 to the necessity for cutting un our fine domain is order to bolster up the ' threatened financial failure,' it was a p ain fact that a race of a penny in the £ would bring in more revenue than 2d under the old system. Where then was the necessity to cut up the public domain. It was only by such misleading statements that such a system could be bolstered up. The letter had bean wri ten without knowledge in the same manner as Mr

Vaile had done when he spoke about rates of 4d or 5d As to the valuation the results ij Ham.il on bad been jusc the same as in Falmerston North, Padding, Wellington and Uhnstchurch. A stimulus ha I been given to industrial enterprise. Rating on improvements w&a a det*rient ; but it a man kuowa that by putting up a valuable building he paid no mure than for a vacant allotment, the incentive to build was a. strong one. Ami.ngst the remarks in ' Ratepayer's ' 'etter Mr Fowlds pointed out tha ■ he was wriin i in aaying that special rates or rates fur loans could not be struck on the unimproved value. In such cases the system worked tut just as well. Such statements shciw.d that he did no: know what he was wriiing about. A new valuation had lately been made; he could not say it was exactly correct, as the totals given for the new rolls might be reduced by the Assessment Court. It showed the gross value of the property in the borough to be £284,752 au increase over last valuatlou of £147,463. (Applause). This was the result of three years" progress under this rotten Bystem. (Applause). Tne. unimproved value had now totalled £155,C32, giving an increase of £126.286. (Applause). If they told Mr Vaile that he woul i have a tit. (Laughter). The value of imp'ovemeots was assessed at £997,720, or an increase for ihe three years of £'21,177. The total amount of the last general rate at 3d in the £ was £734 6d~6d, while the rite at Id on the unimproved value would giv<r £770 19j 4d—a difference of over £4O. The maximum rate that could be levied on the n<-w valuation was 2£d in the £, the amount being fixed ny the amount which could be raised on the old system as applied to the present valuation They could not strike a higher rate than what could be char.ed und-r the maximum of the old rite. IfSJjiwere levied it would bring in £1779 14s, while the amount of the last general ».te at 3d in the £ was £734 6- 6d. Some people contended that under the prraeuc system th«-y could not get at the Gas Company. It was as open queetion as to wtirther it was legal to charge taxation on mains, but the difference apart from that was that the Gas Company would pay £3 18s 9d more under the old system than under the new, and where would their values be if the gaawoiks were taken aw y ? Under the Act the Company could not pay more than 10 per cent, and when the profits amounted to more than that, apart from improvements, they were compelled to lower the price of gas. Jn Auckland they were allowed 20 per cent, but the pressure o'-' public opinion prevented them from ever reaching that stage or municipal gas works would go up and wipe them out. TiVy might put the whole of the rates and taxes of the city of Auckland upon the gas works and it would make no difference. I'hey had the matter in their own hands, and would stilt pay as high a dividend aa at the present time. Continuing Mr Fjwlda said he understood that the greatest opposition to unimproved rating came from the East side of the river. He. would quote figures to show which side of the river would derive most benefit. The greatest values were always centred in the main street, and the greatest amount of taxation must ha paid ty that street, as the land ivbb more v.lualtla than the builrinys thereto. Ihe capital valuf for the "West si'.-j 0 f the river was £-'27,976, and the. Unimproved value £151,871 If a. peony wire col ected on ihat amount it woul.i yield £632 15s lldl Tiie cauital value 0 n the East side was £56,776, and the unimproved value £33.161 At, a penny this would only yield £I3S 3s sd, „„ against £632 15s lid tor the West. At ?Jd the West side would pay £1423 15s 10d, and the Ea-t £3lO 17s BJ. Supposing they wished to raise the same amount of revenue under the system, the East side would pay £334 12s. 'the explanation was that in Hamilton Em the amount of improvements was greater in proportion to the hud values, hs in Quren-street and the. Manhattan Borouth. The unimprovwt value on the West side was 66 6of ihe total land value, and the value of improvements 33/4, while in the East it was 58'4 per Otnt. on the total valuation of unimproved land values, and 41-6 on the value of improvements. Theiefore the value of the improvements was greater to the total. Under the old system the East side would pay a greater proportion of the total thaa under the Dew The man who was most strongly opposed to unimproved values was the farmer, and yet there was no other class of men who stood to gain so much by the adoption of the system. The figures he had quoted were supplied by the Town Clerk, and were quite authentic. Ho hoped that those rateoayers who were going to pay a little more under the new ratiDg would support it on account of the benefit to the, place generally, as it was founded on truth and justice, and the people who were supporting this reform were working from altrinstic motives and from ascertained facts. Why sbou.d they penalise a man for putting up an important building which would tend to, improve the place. The system was io harmony with the Divine law itself, £is if the Hamilton people stuck to it. tjKr would be an ornament to the would. If they did not they would be tho laughing stock of sound ads-anced economists the world over. An adverse ,-ote would be a calamity to the town, sind a hindrance to the work of reform throughout the world. The speaker resumed his seat amidst continued applause. Mr. J. A. Young said that under th-e----old, system the acacia covered allotment containing a trontage ot 154 feet was valued at £3O a y-ar. He owoed 30ft of that section which was, cow valued at £7o' per year,

Mr J S Bond sttii every mr.n whose name »ppratOil on the committee would pay more under the n--w nysierr 'h>n the old one ; but they weio looking at it from the point of the teuo al uefare of ih.' town, whiehwaa of greater conßequtuce than a few pounds to him or any one ot them. Mr R. Parr said the speaker had removed a good deal of misapprehension which had existed on the matter. From half to three-fourths of those who hud ligned the petition asking for a reversion to the old system b-.longed to Hamilton East, and they must be labouring under the mistake tfm by making tbi3 ttep they wero going to derive some benefit from it. He expressed a hope that they would adhere to tho present system. Mr Whyto suggested the pissing of legislation to make unimproved rating compulsory, aud tho extension of the municipal franchise. Mr S'owlds in reply said he was in favour of extending the franchise to even manhood suffrage, as that was the only true basis. As to making unimproved rating compulsory, he said the questiou of adopting it provided a lot of education which would cirry them on a little bit further some day (Laughter.) The principlo was sound, and there was no need to make it compulsory.

The customary compliment to the chair closed the ______