FARMING IN NEW ZEALAND

New Zealand Journal of Agriculture, Volume 71, Issue 3, 15 September 1945, Page 255

FARMING IN NEW ZEALAND

By

F. R. BRAY,

Field Economist, Wellington.

Land Legislation

/"OPPORTUNITY to acquire land was one of the main attractions which brought the early settlers to New Zealand. From that day to this the acquisition, disposal, and development of land have remained a profoundly important subject, and the Legislature has dealt voluminously with the relevant problems. This article attempts to analyse the economic consequences of the land legislation of the Dominion and to describe the evolution of the tenures under which the land is now held. -

Throughout the 100 years of J, settlement economic and political tendencies and aspirations have acted and reacted to form more or less clearly-defined periods of legislative activity. The problem in the early days of settlement involved attracting immigrants with the offer of land at prices sufficiently low to enable these early colonists to realise a standard of living more satisfying in all its aspects than that obtainable elsewhere, and yet at prices not so.low that the patrimony of the country was recklessly given away at the expense of posterity. With the extension of the boundaries of settlement and with the shrinkage of the public domain, this problem inevitably gave way to others; to the problems arising from the demand for closer settlement and the development of inferior lands. Often what had been inferior lands in the undeveloped state proved highly productive once this development had been undertaken. Such changes are reflected in the course of legislation. Contrast the Waste Land Regulations of 1853 offering land at ss. per acre with the Land for Settlements Act, 1894, authorising the compulsory repurchase of private estates, or both with the Land Laws Amendment Act, 1929, empowering the Crown to develop land and undertake farming operations pursuant to the disposal of properties as an economic unit, and this change in emphasis is readily seen. Compare also the offer of pastoral licences over waste Crown lands in 1851 with the provisions of

the Soil Conservation and Rivers Control Act, 1941, the one extending the area of settlement and the other attempting to meet some of the consequences arising from unrestricted settlement. The land legislation of the Dominion might be divided into periods based on either political or economic considerations, and both factors have been taken into, account in the classification given below:— 1. 1840-1855. Initial settlement and experimentation. 2. 1856-1876. Rapid expansion of extensive pastoral farming. 3. 1877-1891. Depression. Increased attention to grain and meat. 4. 1892-1911. Refrigeration and improved transport resulting in closer settlement. 5. 1912-1935. The expansion of dairy and meat farming; the mechanisation of farming. " 6. 1936-1945. The search for security. The first period is overshadowed by the operations of the New Zealand Land Company. The second period

concerns the land legislation of theProvincial Governments, while' 1877 marks the return of land legislation to the Central Government. The fourth period, 1892-1911, embraces the Liberal Party’s land legislation policies. In many cases tendencies dominating in one period continue into those that follow. The division into periods merely means that the centre of interest has shifted. Some problems continue throughout all periods. The land legislation of the Dominion cannot be ; properly understood without reference to the rapid development of the country entailing ever-increasing land, values as overseas markets were made accessible. As a result it has been increasingly difficult for potential farmers to obtain land. The keystoneto the structure of land legislationlies in the efforts of successive Governments to make land available to settlers on terms sufficiently attractiveto promote and enable settlement. It still continues to be. But before proceeding to a discussion of land settlement a brief review of the Native land question is necessary.

The colonisation of New Zealand! began in earnest with the simultaneous arrival of the first party of immigrants sent out by the New Zealand Land Company and the proclamation of British sovereignty as a result , of the signing of the Treaty of Waitangi in 1840. Prior to this traders and settlers had bargained directly with the Maori tribes for the possession of land, to such good purpose that these claims when they later came to be investigated were found to amount to more than the entire estimated area of the Colony. Most of these claims were the result of land speculation by adventurers in the years 1837-o9 in anticipation of early settlement. The designs of the speculators were, however, frustrated by the Treaty of Waitangi, which guaranteed the chiefs and tribes of New Zealand the undisturbed possession of such land as they desired to retain and reserved to? the Crown “the exclu-

sive right of pre-emption over such

lands as the proprietors thereof may be disposed to alienate, at such prices as may be agreed between the respective proprietors and the persons appointed by her Majesty to treat with them in that behalf.” Crown grants issued to individuals and the New Zealand Land Company in respect of these old land claims totalled less than 600,000 acres.

By 1860 the Crown had acquired the whole of the South Island, with the exception of some Native reserves, but the acquisition of Native land in the North Island presented. many difficulties and resulted in wars and land confiscations. It is beyond the scope of this article to deal with the chequered history of Native land acquisition complicated by the Crown’s waiver of pre-emption in 1862. ' That would ■ involve description of the communal ownership of land and of the measures taken to individualise Native titles. It would tell how this individualisation of titles nearly resulted in - the pauperisation of the whole Maori people, but it would also tell of the later measures to effect redress of grievances and to protect the interests of existing Native owners.

Of the 28J million acres of the North Island the Crown has purchased 16 million acres. Native holdings approximate 4 million acres, leaving, a balance of 8| million acres purchased by private persons, more than half of this between 1870 and 1892; but whereas the sum paid for the South Island was measured only in thousands of pounds, that for the North Island was at least measured in millions.

INITIAL SETTLEMENT AND EXPERIMENTATION: 1840—1855.

The first years of this period were dominated by the New Zealand Land Company and its affiliated associations. The high hopes of Wakefield and his associates were not fully realised, and by 1853 the last of these settlements had failed. The Treaty of Waitangi, in conjunction with the Land Claims Ordinance of 1841, which provided for the appointment of a commissioner to review all . existing claims before a Crown grant would be issued, had together invalidated the company’s claim to 20,000,000 acres. The 283,000 acres ultimately granted the company greatly reduced the original scope of the plan. The overhead expenses of administration, buildings, and survey proved too great in view of the slow sales of land in England. The attempt to reproduce the pattern of English rural life by selling land at a price sufficiently high to prevent the aggregation of land into large holdings and to ensure that only persons of substance would be in a position to acquire land, and the attempt to combine the - rural. way of life with the

military and cultural advantages of close settlement by selling in one lot both town and country sections were doomed to failure from the start in a land so isolated at this time from the markets of the world.

The Waste Land Regulations of 1853, which reduced the price of waste Crown lands from £ 1 to 5/per acre in an endeavour to attract

immigrants and provide land for settlers who lacked capital, was but the final blow which crippled the Canterbury Association, the last surviving offspring of the New Zealand Land Company, for already the licensed practice of squatting on waste Crown lands had opened up a way of life with far greater possibilities than that provided by the subsistence farming of the company settlers. The Waste Land Regulations of 1853 merely hastened the inevitable failure of . the company’s operations. In addition they directly encouraged that land aggregation which Wakefield, as a result of his experience in Australia, had so

strenuously attempted to avoid. The

licensing of Crown lands for pastoral purposes dates from 1849. Previously pastoralists such as Weld, later to become Premier of New Zealand, had taken the law into their own hands and by arrangement with the Maori owners had turned their sheep to graze on the unimproved unfenced pastures of the open tussock grasslands of the Wairarapa, Marlborough, Canterbury, and Otago. Crown Lands Ordinances of 1849 and 1851 offered pastoral licences tenable for 14 years, provided the land were not required for settlement or did not become included within the boundaries of any hundred (administrative area).. An annual licence fee, based on the stocking capacity of the run, of £5 for- the first 5,000 sheep and £ 1 for every additional 1,000 sheep and an annual assessment of Id. per head of sheep and 6d. per head of cattle were required from the initial applicants. Runholders who were officially limited to a run of 50,000 acres (i) were to be given every facility for buying a homestead area of 80 acres. Homestead rights were later to become the subject of much heated controversy and were used ■as a means of hindering settlement.

By 1855, the first stage in the development of the wool trade, the occupation of the land had made considerable progress. Over three million acres of the most accessible land in the country, but particularly in the South Island, had gone into freehold, while pastoral licences had been taken out over all the remaining area of Canterbury up to and including the first range of foothills. In the next few years the process was repeated in Otago, and all that remained to be done was stocking, which legislation attempted to encourage by making the tenure of licences conditional upon satisfactory progress in increase of stock. In 1856 there were still less than one million sheep in the whole Colony.

THE RAPID EXPANSION OF EXTENSIVE PASTORAL FARMING: 1856—1876.

Difficulties of communication rendered it necessary to decentralise administration by the establishment of provincial Governments. Consequently for the 20 years covering the rapid development of extensive pastoral farming the virtual control of land legislation and disposal passed into the hands of the 10 Provincial Councils, subject only to certain limitations and confirmation by the Governor of the Colony. An amazing variety of legislative enactments and provisions resulted. Nevertheless sufficient similarity exists to permit of a cursory summary of this legislation.

r | 'HE form of the initial settlement of New Zealand was largely the result of the ideas and efforts of Edward Gibbon Wakefield. He was instrumental in bringing to life the New Zealand Land Company, which founded settlements at Wellington, Wanganui, New Plymouth, Nelson, and, in conjunction with ecclesiastical associations, Canter-

bury and Otago. Wakefield aimed at recreating the most worthy aspects of English rural life. Careful choice of immigrants, which resulted in a fine type of settler, and prices for land that would prevent land aggregation were part of this scheme. Marx labelled him the foremost political economist of the age.

QIR Frederick Aloysius Weld was an outstanding pioneer among the squatters who themselves pioneered the land development of New Zealand. In association with Clifford and at the same time as Bidwill, he drove the first sheep into the plains of the W air arap a and

later crossed. over Cook Strait to Marlborough. He wrote an authoritative book on sheep farming. Descended from the Saxon kings of England, Weld in after life became a member of the Executive Council. Premier of New Zealand, and Governor in turn of Western Australia, Tasmania, and the Straits Settlements.

There was a general tendency on the part of the provinces to raise the reserve price of lands from the 5/- to 10/- per acre set by the Waste Land Regulations of 1853, and therefore some departure from Grey’s cheap land policy, though even the £2 per acre asked in Canterbury was little enough when in some years farmers made as much as £5 per acre from a single wheat crop. In general, therefore, the gold discoveries of the sixties and the rapid pastoral development carried the South Island along without any radical alteration in methods of land disposal, except that the former precipitated an agricultural- lease for small areas giving rights to purchase by a form of instalment buying.

The attention of the Councils in the South Island was centred upon the improvement of the conditions of tenure for the holders of pastoral licences. The runholders of Nelson, Marlborough, and Southland not only succeeded, in common with the pastoralists of other provinces, in obtaining greater security of tenure than the pastoral licences originally extended, but also were successful in obtaining more favourable rates for

the purchase of pastoral land. In some cases because of difficulties in accurate assessment the basis of rentals was changed from stock to acreage, but even so rentals were still made to conform with the progress of stocking by periodic increase in the rate per acre. The immediate objective of the runholders was to ensure that the land they held would be reserved for their own use. In Canterbury the law was so interpreted that the granting of pre-emptive rights over the homestead area and improved parts of the run was often equivalent to a grant of the freehold, and when, because of abuses, these* rights were abolished and the sale of. crops prohibited, “spotting” and “grid-ironing,” processes involving the actual purchase of isolated strips 'of land, were used to the same end. By such means agricultural land was locked up for the benefit of the pastoralists. The question of the renewal of existing licences on expiry was met in two different ways. Some provinces, notably Canterbury, offered to renew the licence for a further term of 14 years on similar conditions but at advanced rentals, while Otago, Nelson, and Marlborough introduced pastoral leases varying in terms from 10 to 14 years and renewable for a further term, in the cases of Nelson . and Marlborough at double the original rental. These leases gave greater security of tenure, so that lessees of pastoral land could not be sold out of their runs. In cases of dispossession compensation for improvements was payable.

While the Provincial Councils in the South Island were mainly concerned with legislation favouring the large runholders, the Councils of the North Island found it necessary to offer especially attractive terms to encourage immigrants and military settlers. Thus Auckland, besides making provision for special settlements of immigrants, brought out by contract with companies or individuals, authorised free grants of land to immigrants paying their own passage. Military and naval settlers also were entitled to free grants varying with rank, and participants in the Maori Wars were rewarded by the Central Government with land confiscated from the Maoris in the Waikato. Credit lands, a combination of lease and deferred payment tenure, and the deferred payment tenure proper first made their appearance in this period. Auckland introduced the former and Wellington the latter. The purchase price varied from £1 to £2 per acre, the payment of this capital value in five equal annual instalments being no more onerous than the 34|-year term of today. Three years after the abolition of credit lands in 1867 Auckland substituted the homestead system, offering a

free grant from the public domain to persons who would reside on and improve their selections. Each household was limited to 250 acres of firstclass land. Leases for various special purposes made an appearance in this period. Mineral leases associated with the gold and coal mining industry are featured in the legislation of Auckland, Otago, and Nelson (including Westland). Taranaki was making an energetic attempt. to develop her iron sand deposits, while Otago offered free grants of land to selectors who would plant forest trees. Land was also set aside for recreational and educational purposes. ’ 1 • ■ . > The period ended with a land boom in Canterbury, which, as gold production declined, had become the economic centre of New Zealand on account of the suitability of Canterbury land for arable and extensive pastoral farming. From 1872 to 1878 over two million acres were sold at £2 per acre in this province alone. This land boom was bound up with the rapid extension of public works, of which the most important were railways, and with the introduction of assisted immigrants. It . was accompanied by a rapidly increased overseas public debt and by an equally rapid increase in private debt mortgaged on the land. When prices fell after the bursting of the boom in 1878 the burden of debt

in conjunction with labour difficulties was more than the land' could carry and forced disposals of large estates led to closer, settlement in later periods.

YEARS OF DEPRESSION, 1877—1891.

The year 1877 is taken as the beginning of the depression period, because that is the year when control of the disposal of the waste , lands of the Crown reverted to the General , Assembly, the Provincial Councils having been abolished in 1876.

The Land Act, 1877, consolidated into one Act the provisions of the Provincial Councils in so far as sales of freehold lands were concerned. Existing pastoral licences and leases were to be auctioned on expiry, the rents advertised, and the highest bidder declared the purchaser. The licence gave rights of pasturage only and held good for 10 years, later lengthened to 21 years, and then to 35 years, but was determinable if the land was required for sale as agricultural or pastoral land. i The licensee might purchase only the homestead area. In the eighties attempts were made to encourage closer settlement by limiting the area that any one person, might hold and by introducing the Small Grazing Run Lease in 1885. This lease gave all rights of pasturage together with any crops that might be taken off the land and provided, on account of the security it gave for improvements, - a useful instrument for development of the better-class pastoral lands. Pastoral lands were offered on this tenure at an upset rental of 2 J per cent, on the capital value of the land as determined by the District Land Board for a 21-year term with right of renewal and revaluation on expiry. Land Boards for each of the 10 districts corresponding to the 10 provinces were continued by the Land Act, 1877. In the first place a limit of 5000 acres was stipulated, but this limit was later increased, provided that the land was suitable only, for holding in a larger area. The new limit was 20,000 acres. Residence and improvements were required. Rapid closer settlement had to wait until refrigeration made possible the development of the dairy and meat export trade, a closer settlement assisted in turn by rising prices and advances in farm management practices.

In conjunction with these alterations in the methods of disposal of pastoral lands three other developments took place in these years. First of all the Land Act of 1877 extended the deferred payment tenure which had been previously introduced in one or two North Island provinces. The terms for rural and pastoral lands were 10 and 15 years respectively payable in half-yearly instalments. Alternatively purchase might be effected as soon as the necessary improvements had been

executed. For a while minimum cash prices of £2 for rural land and £1 for pastoral land were set, but this gave way to a system whereby deferred payment land was offered at 125 per cent, of the price of cash lands. The tenure was designed to ' assist capitallacking farmers to take up land. To the end ; that no one should hold more than one licence Land Boards were directed to draw up an alphabetical list of selectors,. and further, any owner of 640 acres or of a pre-emptive

TWICE Governor of New Zealand for long terms, Sir George Grey was recalled to New Zealand to deal with the second Maori Wars 1860-70. He inaugurated the cheap land policy

in New Zealand by his Waste Land Regulations of 1853, hoping by this means to promote settlement. Pastoral licences also were first issued during ■ his initial tenure of office.

right thereto was debarred from selecting. The maximum area of a rural allotment of first-class land was 320 acres, which was thought sufficient for intensive pastoral and arable farming. With the depression lasting through the eighties it was found necessary to extend this limit to 640 acres.

The second important development was the offer of a lease ovei’ Crown lands to those selectors who preferred this form of tenure. This Perpetual Lease introduced in 1882 was used for developing pastoral farming in the North Island. Up to 1891 only insignificant areas were taken up on this tenure in the South Island. The upset rental of the lease was 5 per cent, of the capital value of the land, which was

subject to revaluation on renewal of the lease. In common with the deferred payment licence the lease entailed personal residence for 6 years and improvements within the same period to the extent of £1 per acre, in addition to cultivation (in sown grasses) of one-fifth of the area within 4 years. On fulfilment of those conditions lessees were permitted, prior to the expiry of the twelfth year of the lease, to acquire the freehold of their properties. No one was entitled to become a lessee who thereby owned or occupied more than 640 acres in the Colony. The lease provided an appropriate tenure for clearing and logging the more fertile areas of the North Island, in preparation for sowing in cultivated grasses and clovers. It was made necessary by the increased land values due to the progress of communications and settlement. In this respect it had a similar purpose to the deferred payment licence.

The last development of the period is an interesting one and concerned the extended provision of facilities for special settlement associations to take up blocks of land at the rate of not more than 150 acres per person on Perpetual Lease and 100 acres pei’ person on deferred payments. These projects, which opened up small areas in the North Island, may have drawn inspiration from the successful special settlements of the Wellington, Hawke’s Bay, and Auckland districts in the provincial period and recall the plans of Wakefield. Small farm allotments of 50 acres and village allotments of one acre, designed to provide part-time employment for seasonal farm workers or artisans, were part of these schemes, taking shape under the energetic administration of John Ballance, to relieve some of the distress prevalent in the eighties. Advances for the building of a home and for clearing the land were also made available.

The outstanding feature of the legislation of this period was the apparent desire to assist people on to the land in the face of economic depression and without uprooting those who had already become established. This in the end proved an impossible task, and compulsory repurchase of . private estates had to be 'resorted to. Nevertheless, in attempting to grapple with the problem effective measures were taken, and, besides those mentioned above, the ballot system of choice of applicant replaced auction in 1888. Rural Crown land was thereafter offered at stated prices to applicants who were permitted to decide upon which tenure they would take up. land. Minimum prices per acre of £1 for first-class and 10s. for second-class land were set.

While the years just covered are as a whole years of stagnation and distress, the development of the land

made definite progress. A considerable expansion of the freehold area occurred, especially in the years following the land boom, while, with the assistance of the Perpetual Lease and Small Grazing Run, a not inconsiderable leasehold of If million acres, in addition to the 12J million acres still held on Pastoral Licence, was taken up. By 1891 the occupied area had exceeded 30 million acres, representing three-quarters of the area occupied today. But one-half of this occupied area and the best land in the country was held in freehold, and the large estates in which much of it was held proved a resistant barrier to that closer settlement which was to be made possible by the application of refrigeration to the transportation of meat and dairy produce.

THE Hon. William Rolleston was Minister of Lands in 1879-84. As the very able Provincial Superintendent of Canterbury for a number of years, Rolleston met the great influx of immigrants into Canterbury in the years 1874-75 by inaugurating the village settle-

ment system, offering temporary licences over small areas so that the immigrants might support themselves until placed in a permanent occupation. Later as Minister of Lands he introduced the first rural land Crown Lease in 1882.

THE Right Hon. John Ballance was Minister of Lands in 1884-87. Responsible for placing many small farmers on the land through his village and special settlements during the years of depression 1884-87, Ballance also introduced the Small Grazing Run Lease for pastoral lands which could be cropped at the time (1885) when bonanza wheat farming on the virgin soil had reached its climax. The lease was used as an instrument for the subdivision of the Pastoral Licence runs in the South Island

and to a limited extent for breaking in timbered hill-country land in the North Island, where, on account of Provincial Land policies encouraging pastoralists to buy the freehold, the densely-timbered land, and direct purchases from the Maori, freehold was the main tenure, corresponding to the Pastoral Licence in the South Island, used for breaking in new frontiers. Later in 1891 Ballance as Premier introduced a graduated land tax in an attempt to help break up the large estates earlier acquired.

CLOSER SETTLEMENT: THE RESULT OF REFRIGERATION AND IMPROVED TRANSPORT: 18921911.

In the situation just described the Liberal Government, headed at first by John Ballance and on his death by Richard John Seddon, with John McKenzie as the extremely able Minister of Lands, embarked on a policy of State repurchase in order to break the deadlock that had arisen, but before doing this they took steps to see that further aggregation in the matter of remaining ‘ Crown lands was in no way encouraged. To this end the Land Act of 1892 offered the Lease in Perpetuity. This lease gave no right to the freehold; it was for a term of 999 years and the yearly rental was 4 per, cent, on the cash price of the land with no provision at all for revaluation. The leases were to be administered so that no transfers in the interest of land aggregation would be sanctioned. Later when the Renewable Lease in 1907 replaced the Lease in Perpetuity the . opportunity was taken to enact that nd one might acquire any interst in lands alienated from the Crown, which, together with other land held, exceeded 5000 acres of third-class, 2,000 acres of secondclass, or 6663 acres of first-class lands or their equivalent. Lessees in Perpetuity were at this time given a somewhat ambiguous right to purchase the freehold as a result of public agitation and possibly in order to create a revolving fund for the repurchase of private estates. The term of this Renewable Lease was fixed at 66 years, and like the Perpetual Lease it gave right of perpetual renewal. .The rental was 4 per cent, on the cash price of the land. On renewal of the lease the capital value was subject to revaluation by an appraiser appointed by the Land Board, or, failing the tenant’s agreement to such valuation, by arbitration. Lessee’s improvements were to be deducted in arriving at this value. The lease permitted selectors to pay off up to 90 per cent, of the capital , value of the land, the rent being proportionately reduced. This meant that farmers were able to capitalise the returns from good years and consequently reduce the burden of fixed charges, but the lease at this time gave no right to the freehold. Land not immediately . productive might be let rent free for periods up to 10 years.

McKenzie in 1892 also replaced the deferred payment • licence with a licence to occupy with right of purchase. This licence gave right of occupation for 25 years at a 5 per cent, rental, and it was not until the selector had been in occupation for at least 10 years that he was given ' the opportunity of acquiring the fee simple. Alternatively he might exchange to a Lease in Perpetuity. The tenure did

away with the necessity of heavy overhead expenses immediately on taking up the land followed by possible mortgage or forfeiture, which the deferred payment tenure often involved. It was an ingenious attempt to prevent land passing to mortgagees. Owing to the continued fall in export prices and in the volume of public works, unemployment in the early nineties still constituted an intransigent problem. The Improved Farm Settlement Act of . 1894 attempted to alleviate the distrfess by setting aside land for clearing and set-

tlement. Selectors who took up virgin land were advanced the cost of converting forest into grass land or alternatively the land might be first cleared at Government expense and then ballotted for among the applicants. Another Act of some interest passed in those years was the Bush and Swamp Lands Act, 1903, which gave relief from rates and rents to persons who took up bush and swamp lands. With only inaccessible and poorer lands now remaining, it was necessary to afford some measure of financial assistance to enable selectors to bring these lands into production. But the problem of finding land or settlers was met not only by facilitating settlement in the backblocks; it was met in addition by the compulsory repurchase of freehold estates (i). The first move in this connection was the Lands for Settlement Act, 1892, but it was not until 1894 that the Government assumed the right of compulsory repurchase, paying compensation to the owners at a rate assessed by the Compensation Court. Land might be taken from any holding exceeding a statutory maximum area. After 1909 this maximum 'was 400 acres of firstclass land, 1,000 acres of second-class, and 2,500 acres of third-class land. Near the main centres these limits were considerably reduced. Until 1907 the lands so acquired were disposed of on Lease in Perpetuity at an annual rental of 5 per cent, on the capital costs of acquisition, development, and subdivision, or in the case of pastoral lands on the Small Grazing Run Lease, but after 1907 the Renewable Lease with terms of 33 years and a maximum rental of 4J per cent, per annum was substituted for both. . Preference at ballots was to be given to landless applicants, and, excepting pastoral lands, no allotment was to exceed 320 acres and only one such might be held.

The efforts of what was now the Seddon Ministry to assist settlers did not end with the operations of the Land for Settlement Acts. In 1894 the Advances to Settlers Act offered loans of from £25 to £2,500 to farmers by way of mortgage on land and bill of sale over chattels from a State lending agency. This was the start of the State Advances Corporation. The costs of improving pastures and maintaining soil fertility in addition to acquiring land and livestock could no longer be met without capital assistance.

, But in order to establish an independent class of small farmers on the land, both New Zealand and overseas experience in new countries stresses

the importance of preventing or hindering land speculation and of placing hindrances in the way of the speculator. This undercurrent runs through much of the legislation of this period. Accordingly improvement conditions were applied to all Crown lands, including those sold for cash. Cash lands had to be improved to the extent of £1 per acre for first-class lands and 10s. per acre for second-class lands within 7 years. Residence for periods up to 10 years was required on Crown leases and continuous residence in the case of Settlement lands. Gradually it became a condition attached to leases that those who disposed of

SIR JOHN McKenzie was Minister of Lands in 1891-1900. “Son of a tenant farmer, born and educated in a part of Scotland from which he saw cotters and small farmers cleared out of their homes to provide deer-forests and grouse-moors for wealthy strangers, he brought to New Zealand a hatred of the selfishness of the large landowner, which he never forgot.” Although the Provincial legislation regulating the disposal of rural lands by auction had been finally replaced in 1888 by a system of classified disposal by ballot at stated prices, McKenzie with his Land Act, 1892, gave New Zealand for the first

time an Act under which all the Crown lands of the colony would be uniformly administered. He attempted to conserve Crown lands with a lease giving no right to the freehold. However, this Lease in Perpetuity was the result of a compromise with opposition interests. Originally he had wished to introduce a lease providing for periodic revaluation. He initiated the programme of closer settlement, but when, as a result of the severe winter of 1895, he found that the highcountry pastoralists were in genuine distress, he also extended to them a helping hand. State advances to settlers also date from his administration.

their holdings were not eligible to reapply for a Crown lease until after the expiry of a time limit increased in stages to 10 years.

Two other features stand out from the legislation of the years 1891 to 1911: the increasing awareness of the necessity for providing adequate \ public reservations and protecting scenic beauties and the increasing importance of the coal mining industry as indicated in the introduction of two mining districts leases, the one, the Mining Districts Land Occupation Lease providing for small areas of up to 100 acres suitable for agricultural and horticultural leases, the other, the Pastoral Lease in Mining Districts offering

leases of up to 1,000 acres for pastoral purposes at low minimum rentals. By 1911, due to an expansion of four million acres on freehold and over four and a-half million acres of State leasehold, including Pastoral Licence, the occupied area of the Dominion was much as it is today. The expansion of the freehold area occurred almost entirely in the North Island, where it has always been the most important tenure. From this time on the interest passes from the extension of the boundaries of settlement to the more intensive working of those areas already in occupation, associated with the rapid expansion of the dairy and meat trade.

THE EXPANSION OF THE MEAT AND DAIRY INDUSTRIES AND THE MECHANISATION OF FARM-

ING: 1912-1935.

After 1900 world prices and .therefore the export prices of New Zealand primary produce began to rise. Under these favourable circumstances, with the burden of overhead charges lightened and with rising outputs and an increase in net returns, those small farmers who had become established on Crown and Settlement Lands were soon agitating for the right to acquire the freehold of their properties, for this meant that they would not only be able to find an outlet for the investment of part ,of their incomes, with added security for themselves and their families in the shape of an equity in the. farm, but, perhaps even more important, that they would be able to reap the benefits of rising land values due to the improved conditions and also to improving transport facilities. In deference to these wishes the Governments of W. F. Massey and J. G. Coates extended the right of freehold to all those Crown and Settlement land lessees who did not already have this right, and on very liberal terms. In the standard case, first of all the difference between the original capital value and the present capital value less improvements was computed. This difference was treated as though payable on the expiry of the lease, and to obtain the present value it was discounted at 5 per cent, interest for whatever number of years remained to the lease, and then “the amount ascertained by such actuarial computation to be added to the original capital value and the result to be the price.” Further, that tenure, the Occupation with Right of Purchase which led up to the ultimate acquisition of the freehold, was replaced in 1926 by a deferred payment licence with payments in half-yearly instalments in table form varying up to terms of 34| years, and licensees were given the right of paying off at any time. Interest was made payable on the unpaid balance of purchase money at 5| per cent.

Though the State still continued to conduct operations under the Land for Settlements Act, and indeed raised the annual sum that could be used for the purposes of the Act from £600,000 in-1913 to £750,000 in 1925, the new Government showed a preference for voluntary subdivision, and in 1912 offered advances repayable from the proceeds of sale to owners who wished to subdivide. On the buyers’ side in 1928 facilities were given to group applicants so that they might require Land Boards to purchase land for them . after an approved agreement had been effected with the owner. The land might thereupon be taken up by the applicants either for cash or on deferred payments. Then in 1932 an Amending Act authorised loans out of the Land for Settlements account to assist the private acquisition of freehold land. Up to 90 per cent, of the purchase price of the land might be so advanced on first mortgage, whereas, through the Long-term Mortgage Branch of the Bank of New Zealand established in 1926, the bank was limited to advances on first mortgage to two-thirds only of the value of landed security.

Many special problems called for attention during this unsettled period. First the settlement of returned soldiers from the last war exercised the attention of the Administration, and vast sums were spent for the purpose of establishing many on the land. . By the end of the period nearly lj million acres of Crown and Settlement lands had been proclaimed for the purpose, but, except for the offer of individual loans of up to £2,500 at 5 per cent, interest for the. purchase of land and £750 for improvements, the conditions of tenure were much the same as for other selectors. Up to 1933-34 advances to farmers on current account and for the purchase of farms amounted to £ 14.7 millions. Much of the particular land involved in soldier settlement was of poor quality; it was bought at high prices and, as many of the soldier farmers were inexperienced, numbers were soon in difficulties with the collapse of the post-war boom. Therefore in 1923 Revaluation Committees were appointed to go into the financial conditions pertaining to these leases, and capital concessions to discharged servicemen, including reduction of capital values of land and mortgages, remission or postponement of rent, interest, and principal, exceeded in all £4.5 millions (i).

In chronological order the next specific problem calling for legislative attention was the question of inferior and deteriorated lands. Inferior lands were offered rent free to applicants in 1919 and might be granted in fee simple without further payment on fulfilment of improvement and resi-

dence conditions. The State would provide access, the costs to be borne by applicants, and might further make advances for the development of the land. Inferior land in large areas but not exceeding 5,000 acres without special Parliamentary authority and in no case exceeding 50,000 acres could also be offered on deferred payment to companies and persons who would develop it. This last was under the authority of the Land Laws Amendment Act, 1930. But not only was there little but inferior land' now available for disposal; much of the surface-sown hill land in high-rainfall . areas was also deteriorating through the invasion of secondary growth. The Deteriorated Lands Act, 1925, dealt with, this problem as it affected certain hill areas in the North Island. Over-capitalisation of goodwill in

leases, shortage of capital, and insufficient land were some of the causes held responsible for the difficulties of the settlers. Revaluation Committees were appointed to reduce principal and interest of Crown mortgages, remit or postpone instalments .of interest on purchase money, or to remit arrears of rent. Boundaries might, be altered, the holdings enlarged, the land reclassified, and advances made for fencing and the purchase of manures and other requisites.

A further development in land legislation was precipitated by the 1929-

1935 depression. Just as the special village settlements of the eighties and the Improved Farm Settlements of the nineties had met depression by special provision for the settlement of the unemployed, so the Unemployment Act, 1932, and the Small Farms Act, 1932-33, attempted to alleviate some of the phenomenal unemployment of these years. . In the first place efforts were concentrated on small rural holdings of from 5 to 10 acres as a means of supplementing incomes by the production of fruit, eggs, and poultry. Share milking agreements in which the State undertook .to erect cottage, milking shed, and other improvements which the owner contracted to purchase on a table mortgage, were also encouraged. But with the establishment of the Small Farms Board in 1933 the scope of the system was widened to include, in addition to the actual settlement of farmers on the land, provision for as many more as possible in the work of development. To this extent the scheme was made into an attempt to generate increased employment and business activity. For the purposes of the Small Farms Act the Minister of Lands had power to purchase stock, chattels, implements, and manures, and to carry out any expenditure incidental to general farming. With the drying up of the private sources of risk-bearing and to some extent of working capital, the State had to make these available. As the problem confronting the Legislature was not land aggregation, it is not surprising to find that a new criterion guiding ■ repurchase activities was adopted. For the purposes of the Act land might be taken if it were considered that it was not being adequately used. Originally the lands, mostly dairy holdings, were to be let for a 10-year term at a rental of not less than 5 per cent, on the unimproved or less than 2| per cent, on the improved value of the land, and for the first 4 years rent might be naid out of the Unemployment Fund. Rights of acquiring the freehold were given, and in 1935 rights of exchanging to a Renewable Lease with 33-year terms.

Another problem upon which attention is focused in the period under review concerns the provision of capital for farming. The contrast between the present day, with only improved farms of high capital value or unimproved lands requiring much development available, and the days when vast tracts of land were available for the extensive grazing of sheep is too vivid to need any emphasis. For a while deferred payment tenures, instalment purchase of building's in the case of Settlement lands, and Crown leases, met the problem, but today lands become available almost solely through reoffering or only after extensive development. With the decline in State repurchase activities after 1914, little

MINISTER of Lands in 1906-08, the Hon. Robert McNab was the author of the modern Renewable Lease, which replaced the Lease in Perpetuity and which, unlike the latter, allowed for

revaluation, thus securing to the Crown future unearned increment. This lease permitted farmers to acquire an equity in their lease, but originally gave no right of outright purchase.

WHILE Minister of Lands in 1908-12, Sir Joseph Ward attempted to set aside a permanent endowment of Crown lands inalienable by way of sale, the

proceeds from which were to be used for old age pensions and education, but this scheme was thrown overboard by succeeding Governments.

Crown land development

land became available from that source, during the period under review. Thus the need for capital had. increased with only poorer lands remaining, and here too the State has helped to fill the breach. In the previous period much had already been accomplished in this connection. Land drainage schemes date from 1893, the improvements carried out by the local Land Drainage Boards being secured on the local rating capacity. The reservation of a portion of the rent from Crown leases for reading purposes dates from an even earlier period. But assistance for the development of individual farms reached a new stage with the. Land Laws Amendment Act, 1929, which appointed a Lands Development Board to develop and stock Crown lands prior to sale and to make advances to tenants secured by way of mortgage over the land for the erection of buildings and other improvements and for the purchase of livestock.

The State gave other special capital concessions following the. collapse of the post-war boom in 1921-22. From that time on there is increasing reference to provisions for the extension of terms of leases and licences, as for example the deferred payment licence, and for the remission or postponement of rent, instalments, or interest on purchase money, and for the revaluation of leases. All this led up to that mortgage relief legislation of the early thirties forcibly., reducing the burden of farm mortgage indebtedness, which had grown very rapidly after the last war. If the first mortgage relief legislation of 1931 was merely designed to tide farmers over a difficult period by the reduction of interest rates, remission of arrears of rent, and postponement of due date for the payment of interest and principal, it soon became apparent that, as world prices failed to give any indications of returning to previous levels, some more permanent solution on the basis of readjusted productive values would have to be found. ■ The Rural Mortgagees Final Adjustment Act, 1934-35, therefore empowered Adjustment Commissions to effect, if possible, an agreement between mortgagors and mortgagees for the reduction of liabilities in excess of the productive value of the land. Otherwise the Commissions might put into operation a stay order for 5 years, during which the farmer was to be put on a budget, and after which, and provided the farmer satisfied the authorities that he should remain in possession, the productive capacity, on the basis of the annual average income capitalised at a basic rate of interest, was to be assessed and the liabilities reduced to this value. However, the final Act in the drama was left to the newlyelected Labour Government. The Mortgagors and Lessees Rehabilitation Act. 1936, aimed at the immediate re-

duction of mortgage indebtedness in excess of the basic value of the land. The basic value was determined by reference to the productive value of the land increased or decreased by such amount as was necessary to make it a fair value for the adjustment of liabilities. There were 15,621 applications for relief and 11,071 orders made. Relief was authorised to the extent of £8,533,437. An interesting feature of the land settlement of the years 1912-1935 is the continued tendency toyards closer set-

tlement, which is revealed in the following figures:

No. of Holdings over 1 acre in Extent. Occupied Area.

1891 .. 43,777 - 31,867,505 .1910-11 C .. 73,8*6 ( 40,238,126 1935 ' .. 84,867 43,104,559

Thus, despite the fact that the area in occupation rose by less than three million acres, the number of holdings increased by nearly one-sixth after 1911.? The greatest increase in numbers was of holdings in the group 50 to 200 acres. . This was obviously due to the marked expansion of the dairy industry. The interesting fact is that this closer

settlement continued despite a decline in State repurchase and subdivision. THE SEARCH FOR SECURITY: 1936-1945. Such powerful reactions were set in motion by the depression that from 1936 on constitutes a new period marked by the desire for security of employment and money income. The chief legislation has been the introduction of the guaranteed price for dairy produce, the Soldier Settlement and Land Sales Act, the Soil Conservation and Rivers Control Act, as well as the Mortgagors and Lessees Rehabilitation Act, 1936, already described.

Another outstanding feature of the land legislation of the last few years is the continued desire of the State to bridge the gap already referred to between the capital required for taking up a farm and that usually possessed by the young applicant for one. The Small Farms Amendment Act, 1939, besides making it possible to bring Settlement land under the principal Act, provided that Small Farm lands might be offered to persons suitable for rural employment who are not in regular work and who have not sufficient capital to take up lands under the other Crown or Settlement tenures.

The reference to suitability, possibly as a result of the soldier settlement after the last war, dates from 1929 and provided that preference at ballots was to be given to applicants possessing experience or who lived near the land for disposal. The holdings are made available on Renewable Lease with terms of 33 years at a rental of 4J per cent, on the unimproved value of the land as determined for each term of the lease. Improvements on the land are to be regarded as having been advanced to the lessee and may be secured and made repayable in such manner as the Land Settlement Board decides.

Development provisions were also made more comprehensive. The Minister of. Lands was given power to construct waterworks supplying farm and domestic requirements and to levy water rates to cover capital costs and running and maintenance expenses, while a Rural Housing Act of 1939 empowered County Councils to make advances on the security of farm lands and to provide housing accomffiodation either for the farmer’s own use or for persons employed by him. But the most important development along these lines is the Soil Conservation and Rivers Control Act. While through all legislation there has been implicit in the Acts, Ordinances, and Regulations of the Colony (and after 1907 the Dominion) the assumption that certain types of land have specialised uses, ploughable or unploughable, pastoral or agricultural, there has been too little attention paid to the place of the forest and native tussock

in land utilisation and drainage, or of maintaining a good sward when the removal of the forest is in-order. The Soil Conservation and Rivers Control Act, 1941, represents the first comprehensive attempt partially to restore the balance of nature and to. control land utilisation. The Soil Conservation and Rivers Control Council set up by the Act has power to proclaim Soil Conservation Districts in which the lighting of fires, the destruction of plants, or any change in the use of the land may be prohibited. The use of land for agricultural or pastoral purposes may be regulated or restricted. Lands may also be set aside as Soil Conservation Reserves and private lands acquired for this purpose on terms assessed by the Compensation Court. . These reserves are to be managed in the interests of soil conservation, and the lighting of fires or the

trespass of animals is prohibited. The council has power to repair or divert any watercourse or to plant trees and shrubs or sow grasses and may enter any property in the execution of this work, though owners may claim for any damage. The local administration of the Act is in the hands of Catchment Boards and the Soil Conservation Committees, a majority of the former being elected at the local body elections, while the latter are appointed by the council. The boards are to regulate and control the flow of water into watercourses and maintain hydrological records. The boards have power on land acquired by them, or subject to the consent of the owners, to plant, sow, and maintain trees, shrubs, or grasses, and may make grants for the destruction of animals destroying protected vegetation. The committees are appointed to adminis-

ter regulations pertaining to the Soil Conservation Districts and have power to regulate fire lighting, stocking, ploughing, or cultivation of the soil; they may require occupiers to plant or sow shrubs or grasses or to take all reasonable steps to destroy rabbits, deer, wild pigs, and wild goats. The real testing time for the effectiveness of the administration will come now that the war is over, but the success of the attempt to deal with this greatest of problems will ultimately depend quite as much ,on the co-operation of the farmer as on the ability and energy of the persons operating the machinery of the Act and the financial grants they receive. Since the outbreak of war much attention has again been paid to the settlement of discharged servicemen on the land. By a 1940 amendment to the Small Farms Act discharged servicemen are to have preference at ballots. In reference to this an amendment to the Land Laws brought down in 1944 provided that any Crown or Settlement land previously offered for sale or lease by auction might now be offered by public application for sale or lease at a fixed price or rental and granted without competition to a discharged serviceman. ' • r. .

Two important developments took place in 1943. By the Statute Amendments of that year for any discharged serviceman who is or becomes a lessee under the Small Farms Act the rental for the first year will be 2 per cent, of the unimproved value of the land, increasing by stages to 4 per cent, commencing with the third year unless otherwise determined. Previously it had been decided that improvements on lands acquired for rehabilitation were to be secured by way of table mortgage repayable in half-yearly instalments. The rate of interest on such was 2J per cent., rising to 4| per cent, commencing with the third year. The Government consented to make provision for ex-servicemen to acquire the fee simple of these lands, and this they may do at such price and on such terms as the Land Settlement Board, which administers all matters pertaining to Settlement and Small Farm lands, thinks fit. The Land Settlement Board also has power to make advances for the purchase of stock and chattels.

The other important development was the passing of the Servicemen’s Settlement and Land Sales Act, 1943. This very important Act deals with two distinct though related problems, the acquisition of land for the settlement of demobilised personnel and the control of land sales. The background to this Act is provided by the present accumulation of purchasing power. Cash held by the public and demand deposits at the trading banks alone increased nearly threefold in the years 1938-44 and unexercised oyer-

draft authorities by over one-half. Savings banks deposits have doubled during the war. With the demand for land for servicemen settlement, . with the superabundance •of purchasing power and the restricted markets in many commodities due to rationing and price control preventing the absorption of this additional money, and with the notorious sensitivity of land values to either an expectation or realisation of rising prices due largely to the war and/or to inflationary finance, it is readily appreciated that the situation in regard to land values was a highly unstable one, particularly in view of the ease with which land is transferred in New . Zealand. The Torrens system of land transfer by registration in the books of the Land Transfer Office, in conjunction with careful stipulation as to survey and definition of boundaries, plans of which have to be approved by the District Chief Surveyor, gives a “practically indefeasible” title to a clearly-defined area of land and enables land to be conveyed with great ease and economy. Had inflationary speculation in land values taken place, the whole structure of the guaranteed price system would have been jeopardised, since land speculation would have increased the overhead cost in farming, necessitating a guaranteed price at least always as high as overseas prices and sometimes higher, or once more revision of capital charges.

Discharged servicemen, within the meaning of the Act, are persons normally resident in New Zealand who have at any time during the present war served outside New Zealand or on continuous service within New Zealand or on any British ship not a home trade ship. For them any land 'may be taken which is capable of subdivision into two or more “economic” holdings, though Native land or land belonging to personnel serving overseas is exempt. This marks the ultimate phase in compulsory repurchase provisions. But so far nearly all properties have been acquired by voluntary negotiation. The amount of compensation is assessed at the value of the claimant’s estate or interest therein, which value is computed on the basic value of the land with additional compensation for. any special loss arising from . compulsory repurchase. The basic value of the land is determined by its productive value, which is the net annual income that can be derived from the land by the “average efficient” farmer capitalised at 4| ' per cent, interest, with special allowance for any improvements greater or less than those normally required, as for example in homestead amenities, or for any special value the land may have on account of locality. The net annual income is derived from the gross annual income calculated on the basis of prices for farm products Pilling in December, 1942, by deduct-

ing all expenses other than capital expenditure required in the production of such income. On land so acquired the Minister of Lands is empowered to authorise all works necessary for settlement.

The Act also controls the sale and transfer of all freehold estate and interest .or leasehold estate or interest, other than Crown lands, with at least three years to run. In considering whether or not to grant a request for transfer the Land Sales Committee or the Court appointed by the Act is required to have regard to the desirability of the land fop the purpose of settlement by ex-servicemen and the desirability also of preventing, undue increase in the price of land or undue land aggregation through which potential farmers are denied the opportunity of obtaining land. With reference to the desirability of preventing the use of land for speculative or “uneconomic” purposes the committees are directed to have particular regard to the relation of the amount of purchase money to that paid in any previous transactions, and no application will be entertained if the consideration exceeds the basic value or basic rent of the land as determined by the committee. The suitability of the purchaser or lessee having regard to the proposed use of the land is taken into consideration; then, if the committee decides that any lands under transaction are suitable for the placement of discharged servicemen, it may make an order determining the basic value of such land, . and the Minister by notice’within one month in the Gazette may declare the land taken for the settlement of discharged servicemen. The Act became operative in October, 1943, and exo ires 5 years after the termination of the war.

Conclusion

The following is the present position in regard to lands disposal in the Dominion. 1944 (acres) Area granted or sold and held on freehold .. .. .. 22,174 813 Reserved for public purposes .. 16,473,398 Crown lands leased exclusive of reserves .. .. .. .. 16,136,777 Area of Crown lands available for disposal .. .. .. ... 1,975,136* Native land .. .. 4,492,161 f Unfit for settlement .. .. 5,138,372 66,390,657 *Mostly unfit for settlement. flncludes certain areas alienated by sale to Europeans. Of the occupied area of approximately 43 million acres approximately one half is freehold and the other leasehold of various kinds: 1942 (acres) Freehold .. .. 21,689,218 Leasehold ... .. 21,308,182 42,997,400

Crown leases, more than half pastoral leases and licences, represent between 75 and 80 per cent, of the total leasehold area. The proportion of the leasehold to freehold is naturally highest in sheep-farming areas, where the Pastoral Licence and Small Grazing Run Lease are very important, and, though many farms are mixed leasehold and freehold, the proportion of freehold'to leasehold generally increases as the farming becomes more intensive and the outlay for land as a proportion of total capital required declines. This is so even though sheep-farming lands are generally of poorer quality. But the high proportion of leasehold in sheep-farming areas may . be partly due to the attractive terms on which Pastoral Licences have been offered, in comparison with the terms upon which the land could be bought as freehold.

Of the 43 million acres in occupation approximately 20 million acres are improved; of this improved area 90 per cent, is in the form of sown grasses, and approximately 23 million acres are unimproved. The great bulk of this improved land is undoubtedly freehold land.

The relative importance of the main Crown leases still held is shown below as at March 31, 1942: —

Yearly Rent Selec- and Instal- + rtt*Q fifPQ frYIPHtG Deferred payment .. 3.554 614,497 £102,616 Lease in Perpetuity 6,937 1,432,066 £160,400 (replaced by the Renewable Lease 1907) Renewable Lease .. 9,492 2,665,761 £357,864 Small grazing runs.. 757 2,450 203 £87,977 Pastoral runs .. 593 8.112,322 £77,830

In the immediate future the main activities in land settlement will undoubtedly be devoted to the rehabilitation of returned servicemen. When this work is over, given the success of policies designed to maintain and extend living standards at home and overseas and approximately present levels of relative prices, there will still be scope for settlement, both through the subdivision of existing holdings on the more fertile areas, and by the development of the somewhat limited areas of the remaining Crown lands suitable for dairying and other types of intensive grassland farming, though areas associated with soil depletion or danger of flooding may have to be abandoned.

' | 'HE Right Hon. George William Forbes was Minister of Lands in the Ward Ministry in 1928-30, and brought in several important amendments, the most outstanding of which was the provision of the Land Laws Amendment Act, 1929, which gave the Crown power

to develop and stock undisposed Crown lands prior to sale. Land now of good carrying capacity and held by prosperous farmers was in this way broken in. This development was all the more important because high prices had severely restricted repurchase of land by the State.

MAIZE FOR FEED.

In view of the need for home-grown feed crops, maize is of vital importance. Full cultural details are given in Bulletin No. 236, “Maize,” which is obtainable free from offices of the Department of Agriculture.

(i) 25,000 sheep at. 2 acres to the sheep.

(i) In addition Ballance introduced a graduated land tax in 1891 and, except for the years 1931-36, graduated taxation of unimproved values has remained a feature of the fiscal system ever since. The present basic rate is Id. in the £, rising by l-8000th d. for every £1 in excess of £5030, with a maximum of 6d. in the £. There is some exemption for properties valued under £2,500.

(i) D. 0. Williams in “Agricultural Organisation in N.Z.,” p. 132.