I.—3a,

5

unimproved value of the land increases, but the rent remains stationery over the first term of the lease —namely, twenty-one years. As far as the East Coast Commissioner was concerned, he was in 1920 faced with the invidious position of having, after providing for land-tax, the munificent sum of £690 out of which he bad lei meed, administration expenses, and the interest em the mortgage, and the overdraft in the bank. For'any trustee to try to manage: a trust estate handicapped as Mangatu No. 1 is by the heavy land-tax is a task which is hopeless from the outset, more especially with the prospeot that any future valuation will again increase the value; of this valuable block of Native land, and bring about a resultant increase in the: abnormally heavy tax it is called upon to pay. Another example eif how oppressive? is the graduated tax is furnished by taking the case of the Greymouth Township, which includes an area eif a little eiver 500 acres of Native land, which is administered by the Native; Trustee, who collects the rents from the: various tenants. The following figures show the position from the year 19.14- onwards : — Yit . Rent collected. Tax paid. , 1914 .. 3,540 .. 237 1.915 .. 4,257 .. 236 1916 .. 3,761 .. 238 1917 .. 4.207 .. 1,623 1918 .. 4,223 .. 1,623 1919 .. 4,591 .. 1.623 1920 .. 5,134 .. 1.623 1921 .. 4,335 .. 2,118 So that if in 1921 that portion of the' township which is Native land was in European ownership it would be: called upon to pay tax amounting lei £4,236 out of a. revenue of £4,335. These' figures show how the operation of the graduated tax under the: Act of 1917 has compelled leased Native hinds to carry a burden out of all proportion to the benefit the; owners arc entitled to receive. The legislation laying down flu; law with regard to the' management eif trust lands by the Native: Trustee' requires to be taken into consideration on any question concerning the land-tax. The all-important point to be considered in flu; renewal of a h'ase: is the amount of annual rental which is to be paid for the: renewed term. The procedure for fixing this, briefly, is that the lessor (the Native Trustee) offers the lessee a renewal at a rent which is 5 pel' cent,, on the latest Government unimproved value. If the lessee: does not elect te) pay this amount -and this is quite the usual thing then if is necessary to have: the rental assessed by arbitration. The lessor appoints his arbitrator and the lessee nominates his, and in practically e:ve'ry case both arbitrators are residents of the locality in which the: land is situated, and generally they are also lessees from the Trustee. They can fix any rental they like, anel the lessor is bound to accept, their decision, even although it is well below the 5 per cent, margin. In the case.; of flu; East Coast blocks the rents for the renewed term are fixed by arbitration only. This system is open to serious thought as to whether Natives have under it any chance of receiving what they arc justly entitled to—i.e., a fair rental for their land. This appears to be borne: out in the case of Greymouth Township, as the total unimproved value is £1.14,360, and the present annual rental is a sum of £4,335 6s. 6d., or £3 16s. (id. per cent. In the year 1874 the total annual rental collected in Greymouth was £3,697, and in 1921 it has risen to £4,146, so that the increase in rent over a, pe'riexl of forty-seven years was only the sum of £449, although the; unimproved value: has grown to the; present large amount. Again, it is quite competent for arbitrators to fix the rental at a lesser amount than what was paid during the previous period, or to fix no increase at all. That such possibilities can exist is evidenced by the following cases : Sections 26 and 27 of Block I The Chairman : Is that at Greymouth ? Mr. King : Yes. In 1866 the annual rental was £37 10s. ; in 1871 it was the same amount.; and in 1901 it had droppeel to £21. 1.55. per annum. Section 13, Block II :In 1903 the annual rental was exactly the same as in 1868 —viz., a sum of £31 10s. Recently the first term of the leases in Mangatu No. I Block expired, and it was necessary for tho rentals for the renewed term to be fixed by the arbitrators ; and, as they entered upon their arbitration during the; slump period, the result was shown in their assessments ; but even if times had been normal the same thing would have applied. The Commissioner naturally expected that, as the land had been leased for twenty-one years at a very low rental, he would during the renewed term receive a rental more in common with the increased value of the land, and thus put him in a better financial position to manage his trust in the future ; and it is not very difficult to imagine his feelings when he ascertained that, the arbitrators had assessed .the rentals at amounts which would not be half of what he expected to receive, anel these rents must stand for the next twenty-one years, no matter to what amount the: Government valuation increase's. One cannot very well blame the arbitrators for what they have: done, unless perhaps for the; pessimism which led them to believe that this bright and buoyant Dominion would not, for the: next, twenty-one years, lift itself out of the trough of the slump waves which we're breaking over everything at that particular time. The increasing value of land in this Dominion is showing more and more how grossly unfair is the system of fixing a rental by arbitration ; but, the lessees have their rights given them by the statute law of the country, and, while the rent is fixed by this inequitable system, the tax is based upon an entirely different valuation —viz., the Government valuation. I should like to quote a, portion of a letter from the Hon. Mr. Myers, Acting Minister of Finance, to the Hon. the Minister in charge of the Public Trust Office, in regarel to a petition from some of the owners of the Ngatitu grant, in flu; West. Coast Settlement Reserves in. Taranaki. Tho letter is dated 10th July, 1919, and it reads — " . . . An investigation of the figures of the assessments of the lessees of the grant mentioned in the petition of the Ngatitu Grant 3799 discloses what appears to me; to be a most extraordinary position. The district in which, the lands comprised in this grant are situated was revised in 1913-14.