Other formats

    Adobe Portable Document Format file (facsimile images)   TEI XML file   ePub eBook file  


    mail icontwitter iconBlogspot iconrss icon

The Pamphlet Collection of Sir Robert Stout: Volume 77

Evidence given to Land Commission, sitting at Stratford, 1905

Front Cover

page break


Hawera, N.Z. C. O. Ekdahl, Caxton Printing Works, Fringes Street. 1905

page break

Evidence for the Land Commission.

leftContrary to opinions held by some I consider that members of Land Boards should be appointed, as at present by the Government solely, as the land policy is the Government's, and it is responsible for the administration. Members of Land Boards should be broad minded men with a good and sympathetic knowledge of all the conditions under which settlers have to work and live, and having intimate acquaintance with the Crown lands of their districts and their requirements.

In my opinion Land Boards should be carefully constituted, should be given large discretionary powers, enabling them to deal with various cases on their merits, even to the extent of rent reduction, and subject to the consent of the Minister of Lands only. I have long observed that the arbitary enforcement all round of the Land Acts provisions has a most unequal and crushing effect on the prosperous settlement in certain places, due solely to the unequal primary conditions of such things as climate, land configuration, location, personal circumstances, etc., and I see no way of adequately dealing with the matter except by giving the Land Boards greater and more extended powers.

left I consider that existing land tenures could stand considerable alteration in the interests of the individual and the State alike. The following are my suggestions:—

(A) That the lease in perpetuity tenure, except under the Land for Settlement Act should be amended so as to give tenants the same privilege to exchange tenures as that held under the occupation with right of purchase tenure (Sub. 3, Clause 152, Land Act, 1892) on the condition that the occupier under the former tenure pay the 1% difference between the two rates of interest as rent from the date of the original occupation of the land. Owing to the conditions disassociable from leasehold in perpetuity, such as the perpetual over lordship of the proprietor even in the matter of the willing of the tenants interests, as well as the small borrowing power of the tenure, together with a sense of insecurity caused by the agitations of so called land reformers, in such proposals as the Fair Rents Bill, there is very great discontent and unrest among settlers under this tenure. The latter have found the tenure other page 4 than what they were originally led to believe, and in the case of these unimproved lands, their interests exceed so hugely in value those of the proprietor (i.e. the State) that the position is anomalous and deserving of rectification in the manner I have suggested. I uphold the terms I have indicated for rectification in distinct opposition to those who contend that the tenant so treated would be given an unearned increment. In my opinion there is no such thing in the case of the settler on the bush and swamp land under Act 1892. He has had to pay rent on the unrperoductive areas of the land from the date of occupation, has suffered large losses in the way of bad burns, the destruction of fences and grass by fire and landslips, stock lost or killed by accident, never to speak of the deprivations from the social and educative point of view, as well as his loss of participation in the benefits of state institutions to which as a colonist he contributes, and which remoteness bars to a man and his family.

These and many other things I earnestly contend if taken proper count of would leave the State in financial and moral debt to the pioneer settler, and that he under the L.I.P. tenure should be permitted, if he chooses, to enjoy the same privileges and benefits for the same price as his fellow settler of the O.R.P. tenure, who, better advised and perhaps wealthier, started by providing for the right to purchase freehold.

With tenants under the Land for Settlement Act the case is entirely different, there the interests of the proprietors are and will always be in large excess of those of the tenant, the land has been purchased for cash and is leased in a state of high improvement usually capable of immediate returns to the tenant, mostly through the dairy industry, all the advantages of civilised life are usually at hand, and the worst disabilities of losses of the pioneer life conspicuous by their absence. Besides, lands under this Act are generally acquired under pressure of the local public and do not require the same incentive for occupation as the remote and unimproved lands of the Crown.

(B) That under the O.R.P. tenure provision should be made whereby the occupier may surrender his tenancy if he desires the same as under the L.I.P. tenure.

(C) That in the case of the lands disposed of for cash, a proportionate amount, equivalent to the thirds of land fund in the case of leasehold, should be expended on the roads giving access to the land from which the money is derived.

(E) That as regards the reintroduction of the homestead privileges it may be found advisable under certain conditions of quality and location to place some lands under this tenure.

(E) In my opinion that optional system in the Land Act of 1892 should apply to all bush swamp and uncultivated page 5 Crown lands, and that in the case of mineral areas provision for resumption by the State on equitable terms could be made.

(F) That no transfer of interest in any lease should be granted inside three years from the date of original occupation.

left I consider the residential conditions of the Land Act of 1892 not in the interest of the State or occupier. In my opinion residence should in no case be compulsory until there is a fair summer cart road to the section.

In some instances from various causes and at the discretion of the Land Board, it should be dispensed with altogether, in the case of rough lands having no adequate homestead sites, etc., etc., double improvements on the said rough lands and the residence of an employee there, should be sufficient for the tenants exemption from residence, subject to area limits. It is desireable to have all classes represented in land settlement, the richer providing very acceptable employment for the poorer, and there are many rough lands capable of being made productive in the above manner which it would be madness in a poor man to occucy. In all these matters in the interests of prosperous settlement land boards should have large powers.

left While acknowledging the many disadvantages of the present system I consider there is absolutely no better substitute for it, and that the remedy is to be found rather in improving it. This can be done by the examination of intending applicants on the part of the land board, as in the case of those under the Lands for Settlement Act, when the purely speculative and otherwise unsuitable class would be detained from monopolising the ballot. I am of opinion that the present system cannot well be improved on with the exception of the modification that applicants who have never held Crown lands should have preference over others, and more especially over those who have sold their interest in Crown lands formerly held by them. I am aware that in this there is a modification of views recently held by me, but I think it after all a necessary change, and granted discretionary powers to land boards there should be little difficulty under examination of determining who ought to be eligible for the ballot and who ought not.

left I am unable to give the information sought which no doubt is available from the records of the Roads department, but in a great many instances the loading has been quite inadequate from the nature of the country to provide roads, and has been spent in making and keeping open six feet tracks, which rapidly degenerate into narrower and more dangerous ones. Failing then a grant from Government, page 6 the settlers have to find interest for a loan with which to form a summer cart road, thus complaining with some degree of truth that no roads to their holdings have been provided, though the land was loaded for same.

The whole question of roading Crown lands is perhaps one of the most vital in the interests of successful settlement, and requires early and most careful revision.

left Latterly the operations of the Advances to Settlers Office seem to have been largely curtailed, it is alleged through lack of funds. This has had the effect of throwing the impecunious class of Crown tenants into the hands of the money lenders at high rates of interest. Especially is this with tenants under the L.I.P. tenure, who from the nature of their security fare worse in the matter of high interest on a restricted advance, having usually also to mortgage their stock. It is a matter of common report that in many cases the rate of interest on these loans is 8 to 10%, which has an absolutely ruinous result. With regard to valuation of lease in perpetuity holdings, for Advances to Settlers purposes, I consider the recognition of more than merely the lessee improvements should be made. Surely the goodwill of a 999 years lease is worth something. In my opinion a valuation on the basis of selling value of the lessee's improvements together with his goodwill in his lease should be made, and an advance up to three-fifths of that amount granted. At present advances do not represent more than one-half the value of improvements and often not that, which makes the Advances to Settlers Office of little use to L.I.P. holders.

left Speaking for the Taranaki land district I consider there is wide variation of the above. In some instances where the occupier has been possessed of adequate capital and sufficent experience, progress has been steady and satisfactory and with the revival of the sheep industry, in which this class mostly engage, the prospect is hopeful where the land is good and there is reasonable access.

On the other hand there are large numbers of small tenants on Crown lands who have an extremely hard struggle to make ends meet, they are mostly engaged in dairying to a certain extent, and the grazing of a few young cattle, the revenues from which at present are restricted owing to lower prices and the roughness and remoteness of their holdings. When the nature and condition of the Taranaki back country are considered, the necessity for giving every possible help and encouragement to its struggling settlers will be only too page 7 apparent, and every case of misfortune or undue hardships should have the careful consideration of a land board, endowed with a large remedial power.

left In doing this I consider the first operation to be the laying off of the best road line obtainable as near the centre of the block as practicable. Then in rough covntry the survey of the sections should be proceeded with, boundaries being only on road lines, ridges, and rivers where the latter are good enough to fence in cattle. On surveyed road lines where practicable an average width in all of 5 chains of bush should be felled, burnt, and grassed, allowing wind and sun to reach the track and keep it dry, the bridging of streams should then proceed with the formation of the bridle track 6 feet wide in the solid. This would leave some grass frontage to each section giving a place to build a hut and keep a horse and cow, besides allowing intending settlers a better view of the land to be allotted.

At present the selection of land is more or less a leap in the dark. The cost of the foregoing work would of course be added to the price of the section. The formation of cart roads should be done after allotment, giving an opportunity to those settlers who desire work to get it, residence on the land not being compulsory before these cart roads are formed and in any case not earlier than four years. I am quite aware that up till now circumstances have made it impossible for a policy of this kind to be carried out, but at the earliest possible moment it should be begun and persevered with and I feel convinced that its results would be satisfactory.

left In the course of things which has led to the appointment of this Royal Commission, there have been many references, chiefly by townspeople, to what has been called the unearned increment in rural land values, and a strong disposition exists on the part of urban dwellers to secure from the settler, for state revenue, part, if not the whole, of what they term increment unearned. It has often struck me as curious that so few settlers trouble to adequately present their side of the case to the public, and, allowing for the usual apathy of the rural classes to politics and political economy, I can only account for their silence by their contempt for the hollow arguments of their opponents and their conviction that the community as a whole takes too sensible a view of things to be long misled by casuistry. But the opportunity for the ventilation of these matters being now created, it it well to set forth the bearings of the so-called unearned increment question. If such a thing exists at all, I am of opinion it is to be found almost exclusively in urban centres. Business enterprises and property values in towns are directly page 8 created by increase of population, not only of the towns them-selves, but of the country as well, and the more prosperous the country settler, the greater the benefit to commercial concerns and, as a consequence, to urban property. Then there are the people who retire to the neighbourhood of towns, some of them farmers who have acquired small settled incomes, who go to swell urban populations and values. This can hardly be said to apply to rural districts, their values having an origin entirely different, being affected almost exclusively by demand for land due to what can be made from the land and in this colony by markets over-sea for our wool, mutton, beef, dairy produce, etc., so that if anyone is due a share in the sale value of New Zealand rural land it is the rural population of Great Britain, whom our success as producers has almost ruined. If there have been fabulous prices paid for rural land in most instances these will be found due to temporary inflations, traceable in some instances to the swelling success of some industry, or to speculative mania and the financial manipulations of the numerous horde of land agents, originating, again let me remark, from the towns. But apart from this there are in Taranaki for instance sound reasons for much of the enhanced land value, running frequently from three to four hundred per cent, over original values. The growth of the dairy industry, due to over-sea demand, the adaptability of the lands and climate along the coast and round Mount Egmont, the energy of the large population of mostly small freeholders and the metalling of roads everywhere—a requirement .of the industry—for which these settlers have become responsible through the "Loans to Local Bodies Act," all these things added to the possibility of a regular monthly income and the utilization of family labour have raised values to fairly well what they are, and I fail to see where the credit for enhanced values can be claimed by any others than those engaged in the industry. As I have stated, metalled roads alone have indisputably contributed to higher values and I may instance that even such an arterial road as the one between Eltham and Opunake was metalled by loans raised by the settlers, though the road is used enormously by the travelling public, among whom no doubt are many of our would be land reformers who view the farms from the pleasant comfort of their hired buggies and estimate the farmers' supposed unearned increment, forgetting the toil, the sweat, the hope deferred, the financial worry, the hard living and poor housing that have been gone through to make those farms and roads what they are to-day.

Then turning to the swamp lands and the rough bush lands of the back country, suitable for sheep and young cattle only, one has merely to engage in the breaking in of it to know how hardly earned everything that is got out of it is. A settler on one of those blocks, under the Land Act of 1892, page 9 which is the system mostly in force here, has to pay rent on the total area of such from the date of occupation; he can only bring in a certain portion of the land each year and has to suffer large losses through bad burns, destruction of fences and grass by fires and landslips, embracing re-sowing, then the long list of stock lost, and killed by accident, never to speak of lost time and the tear and wear to man and beast and gear through the rough condition of the country and its roads or tracks rather. The hope of things improving alone encourages him to hold on and persevere through the years of what his town friends call his exile in the bush, years in which though a citizen of the country and a subject of the King, he shares in no social benefits nor participates in the advantages of the many public institutions which are at hand for others. Surely his lot is worthy of consideration and his grit and energy of any backing up a Government can give them in the way of the option of freehold at original values level with right of purchase ones around him, better roads if possible, and the great-amount of freedom from official restrictions consistent with conserving the State's relatively small interest in their lands when improved, for these settlers are often all coming valuable producers adding their quota to the colony's prosperity and, were need to arise, would be the first looked to for its defence. The fact is in those rough bush and swamp lands no market value yet reached has even compensated for the outlay properly reckoned, and in my humble opinion, with few exceptions, the State is left a financial as well as a moral debtor to the pioneer settler. Could our city land reforming agitator be only induced to take up a section and become one of that class, his agitation would be turned in the direction of obtaining a bonus for bringing in the waste lands of the Crown, and yet at the present moment one of the Labour League platform planks is periodical revaluation of all Crown lands held on lease, this not to apply to existing leases until the death of the present leaseholder or the transfer of the lease to another as the case may be. Now this means that the 999 years lease is only for a man's life time, which might end at any moment, when his family's interest would also die just perhaps as by their combined efforts they were getting on a safe footing so that receiving value (an uncertain thing and not cost) for their improvements, possibly mortgaged, they would be turned out of their home to face revaluation, or I suppose the congenial prospect of another lease of unimproved land under the same conditions. I consider no more scandalous proposal was ever submitted in a professedly moral community.

Of course it is obvious that in some instances, such as the expenditure of State money on the construction of railways, there is an enhanced value of adjacent lands in which at first sight it might be claimed the community at large should directly share. But I question the wisdom of even making page 10 such a distinction as ordinary land taxation deals effectively with this. Railways in this colony are laid down in arbitrary routes to suit our national developement, and are not wholly indispensible in a well roaded stock raising district, so that in my opinion the community's share should be in their earning power which should justify their existence and we would have to turn our eyes to our large cities and towns for direct benefit to their land values, in numberless cases greatly exceeding three or four hundred per cent., by the ostensibly indispensible expenditure of State funds,—a betterment in which, if anywhere, the Colony's public has a direct claim. Why then should the ultimately successful leasehold settler be deprived of part of his increased yet modest wealth by a special State claim while even his freehold neighbour is exempt? Let everyone in the country pay a fair share of taxation according to his wealth, but let there be no special class taxation especially of those who are taking up the rough broken Crown lands which are useless until brought into production at the expense and hardship of the settler of which the town dweller takes little thought and has no conception. The fact is that of recent years it has been the fashion with a certain section of politicians to single out the settler and Crown tenant as a fit subject for fresh taxation, for in reality this is what the talk of "unearned increment" in rural lands means. Population in Great Britain has increased continually and land in cities risen to enormously enhanced values while the value of rural lands has largely decreased. If this should come to pass in the Colony, would our land agitators agree to the State making good to owners and occupiers the decrease in the value of farming lands?

left I am entirely in favour of all Crown tenants having the option of freehold, except land under "The Land for Settlement Act," at the value of the land at date of original occupation provided the difference of one per cent, in back rents as against the O.R.P. tenure is made good by the purchaser. When the unimproved value of a Crown leasehold in which there is no right of purchase, exceeds the original value, the tenant under present law becomes liable for land tax on the increased value, thus admitting that the increase belongs to the tenant, or else he is being taxed unjustly. It also shows that the interest of the State remains at the original value on which it receives four per cent, on 999 years as rent, unless there is a change in legislation as proposed in such measures as the Fair Rent Bill which our city land reformers have in view, one of whom advocated that the Old Age Pensions ought to be provided for by an increased tax on lands. As these city land reformers are increasing in numbers and probably will increase still more, as city population increases more rapidly than that of page 11 the country, their power in Parliament will increase accordingly, and in this lies the danger to the Crown tenant in the uncertainty of the value of his 999 years lease, a danger so apparent as to be the cause of much of the dissatisfaction and unrest now existing.

For other reasons the lease in perpetuity has been found unsatisfactory such as in financing, when even the Government Advances to Settlers Office recognises and proclaims the inferiority of this tenure as security by its restricted advances. If land is placed on the market now, under the optional system, no one with his wits about him ever thinks of adopting the L.I.P. tenure, under which on unimproved land, with so many drawbacks, his improvements would so soon overwhelm in value the relatively small interest of the State in the land. Considering everything I strongly urge that L.I.P. tenants be allowed the same privilege of exchange (by paying the one per cent, difference in rent from date of occupation) as the O.R.P. tenants have under Sub. 3, Clause 152, Land Act, 1892.

By granting this the State would be a gainer not only to the extent of the one per cent, but when the freehold is obtained the full unimproved value would become liable for land tax, so that the State would receive the value of the land and retain the right to tax the same. It would have the effect of giving a feeling of greater security and contentment to the struggling settlers, and an incentive to first class and lasting improvements on their holdings.

The argument that the granting of the option of freehold would throw L.I.P. tenants into the hands of money lenders, I consider beside the question. As it is these tenants are obliged to deal with money lenders, and under a penalty by reason of the nature of their tenure that does not obtain in the case of their fellow settlers with O.R.P. tenure. And if there is a certain amount of sentiment in the settlers' desire for freehold, I would respect it; it would be a poor world without sentiment and if the option of freehold will make the settlers more contented with their lot, and industrious in founding their homes on the lands and bringing the latter into productiveness I would have no hesitation in granting it.

left I strongly advocate the O.R P. tenure as being indefinitely in advance of deferred payment or any other, and in granting the option of freehold to the Crown L.I.P. tenants, I can think of no better method than the exchange, under the conditions stated above, to the O.R.P. tenure, and accepting as fulfilled for the latter tenure all the observed conditions of the former, with the exception of the one per cent, in back rent to be met. In my opinion this would be infinitely better for the State, the tenant, and the money market, than granting freehold at once on application or under the deferred payment system, where money has to be page 12 found at once without going into self-evident detail. I think the great advantages of the O.R.P. tenure over any other should be apparent to everyone.

left In the case of rough broken bush lands where it is not practicable to make a fair valuation of the unimproved value, I would advocate that a temporary value within certain limits be placed on the land, liable to readjustment within five years. In many cases it has been found that too high a value has been placed on the land which has turned out much more rough than was anticipated, and vice versa, in such cases revaluation when the bush is down would readjust matters. In this rough gorgy country it is almost impossible to see what the country really is until the bush is cleared, as it is very deceptive in many instances, concealing gorges and gullies which make this rough country so very expensive owing to the loss of stock in them and in the heavy landslips that occur on their sides.


John Heslop

C. O. Ekdahl, Caxton Printing Works, Princes Street. Hawera.