F.—No. 1.

The same circumstances prevent a comparison being made as to the rate of rent charged. The committee of leaseholders, in their letter of 15th January, ] 872, mention the " heavy ground rent," and further state " that after the payment of insurance premiums, taxes, and ground rent, very little profit in the best instances, and no profit at all in most instances, is realised by the owner." I think the " heavy ground rent" mentioned must be that paid by the derivative tenants. I made personal enquiry amongst a considerable number of the tenants as to the working of the leases, and found that the matters chiefly complained of were : — 1. The expense of assignments; the "Land Transfer Act, 1870," being looked upon as being unavailable, but of desirable operation. 2. The short terms of lease. 3. The unnecessary stringency of the provisions of the leases in respect to assignment and bankruptcy. The ease of Mr. W. S. Smith does not appear to bear out the statement of the committee to the effect that very little or no profit is realised by the holders of leases. Mr. Smith's was not the only case in which a considerable profit appeared to accrue. Reasons for selling the reserve : — (a) Incentive to improvement of building. (b) Diminished cost of insurance. (c) Increased facility of realising and raising money on household property. (d) Diminished rentals. (c) Abolition of objectionable clauses in leases if) Transitory nature of present income. Reasons against selling : — (g) Difficulty of mitigating the pressure on sub-tena (X) Low rate offered for fee simple, (i) Objection of natives to the sale. (_/) Difficulty of re-investment. (k) Prosperity of district probably permanent. (a) All the buildings in Greymouth are of wood, or of wooden frame, and galvanized iron covering. It is very desirable that brick or stone should replace this material, both on sanitary grounds and for greater security against fire. It is not probable that brick or stone houses will be built on the short terms of the present leases. On all gold fields there is a great amount of social hurry, and the absence of a lasting tenure to land must tend to increase this. Nothing that could be done by the Government would conduce more to the benefit of the Town of Greymouth than the judicious conversion of the existing leases into absolute conveyances. (6) From the statements of Messrs. Perkins and Greenwood, it appears that the rates of insurance against fire in the town are : — For Detached Houses ... ... . ... ... ... ... 2-§- per cent, „ Houses on Mawhera Quay... ... ... ... ... ... 7f ~ ~ Hotel Property ... ... ... ... ... ... ... 10 ~ Mr. Greenwood states that the losses by fire amounted, in 1869, to £30,000, and, again, in 1870, to £5,000. Scarcely any of this loss of £35,000 was covered by insurance. Persons best qualified to form a reliable opinion state that there is no probability of any restrictions being placed against building with wood within the town whilst the tenures are merely leasehold. (c) Legal men state that much greater facility would exist for the mortgage and sale of household property if the land were actually owned by the inhabitants. (d) The committee of leaseholders appointed to confer with me were of opinion that the sale of the lar.d to the original tenants might result in a lowering of rent to the derivative tenant. I may state that only in one instance have 1 heard of a complaint of excessive first charge. The rates paid by the derivative tenants are, however, very high. The following case was not apparently considered an extreme one:— Mr. W. S. Smith rents from the Native Trust the sections 213, 214, 214 a, comprising 4a. ok. 32p. at an annual rental of £20, He occupies with his own villa residence the whole of 213 and a portion of 214 ; he sub-lets about one-third of the whole, at an aggregate rental of £80, and has still a piece of vacant ground. It is proper to mention, however, that Mr. Smith has laid out a considerable amount in the improvement of the roads about the property. I may here mention that the amount offered by Mr. Smith for the fee-simple of these three sections is £85, or about one year's income from his sub-lessees for the part let to them. (c) The committee of leaseholders brought under notice the covenant, in the leases, not to assign or sub-let without permission, and the proviso by which the right of re-entry is given in the event of the bankruptcy of the original tenant. They were of opinion that these were unnecessary and injurious to the property. Several others of the leaseholders drew my attention to these clauses stating that they cause the properties to be difficult to mortgage or sell. ; I asked the opinions of the gentlemen named in the margin on the practical effect of these clauses. The written answers of Mr. Davy and Messrs. Hill & Son, I append ; both are of opinion that the ' provisoes are unusually stringent and depreciatory to the value of the property. Mr. Perkins, conveyancer of Greymouth, was of the same opinion. s, Mr. Mackay states that inasmuch as the clauses give the lessor power to re-enter but do not say - that he shall do so, or that the lease shall necessarily be void so the clauses are not of a nature to be complained of —so I read his meaning—and further that the provisoes were only intended to operate \ against persons acting in opposition to the interests of the Trust. Mr. Greenwood, collector of rents, states that no case has occurred of re-entry on these provisoes, and only one case of re-entry for non-payment of rent.

See page 11.

Mr. Davy, District Registrar of Land, Auckland; Messrs, Hill & Son, Conveyancers, Aucklands; Mr. Perkins Conveyancer, Greymouth ; Mr. John Greenwood, Collector of Rents, Greymouth.

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HISTORY OE THE RESERVE.