As regards the necessity for humanitarian legislation, reference can be made to the evidence given before a Royal Commission in 1891. The Commissioners were unanimous in reporting that, in many factories and workshops which they had visited, the sanitary conditions were very bad, the ventilation was improperly attended to, and little or no attempt had been made to guard the machinery. They were agreed as to the need of further legislation, but, while some were of opinion that the wider powers should be exercised by inspectors under the local authorities, others were in favour of the appointment of a special class of male and female inspectors. They also found that children of the ages of ten, eleven, and twelve years were employed in factories, and that the hours of labour in many retail shops were very long, adding that medical evidence was conclusive that the excessive hours were more injurious to health in Queensland than they would be in a colder climate; but they were unable to concur as to the advisability of legislative interference. A Factory Act, though not of a very stringent character, was passed by the Government towards the end of the session of 1896.
The attention of the Government during the last few years has been directed mainly towards the restoration of the credit of the country and the development of its industries. Queensland reached its lowest ebb in 1889, when, in spite of the recent loan of ten millions, the deficit amounted to£484,000. Since that time matters have rapidly improved, and in 1895 and 1896 the revenue was considerably in excess of the expenditure. This result has been achieved by economical administration, and the direct encouragement of enterprise which has been effected by a large extension of the sphere of State action. The principles involved appear to have been threefold.
First, that the State should facilitate the occupation of outlying districts by the construction of public works, provided they may be expected to return a fair interest upon the expenditure. The proposals put forward some fifteen years ago, that the three Western lines should be connected with the Gulf of Carpentaria by a series of Land Grant Railways, were condemned by the sense of the community, which preferred to postpone their construction until it could be undertaken by the State. In pursuance of this policy all the railways are owned and managed by the State, which has recently protected itself against the danger of the construction of unprofitable lines under political pressure by an Act of Parliament under which, upon any fresh proposal, the local authorities affected may be required to give a guarantee that they will, for a period of years, should the earnings fail to reach a certain standard, make good half of the deficiency out of the rates. In the Western portions of the Colony, in which occupation has been retarded by the scarcity of water, the Government have alsoincurred considerable expenditure in the successful provision of artesian water and in general works of conservation.
Secondly, that the State may assist producers to dispose advantageously of their produce. Reference has been made to the contracts which the Government have entered into with the British India Company for the carriage of farm and dairy produce. They are now considering the advisability of assisting cattle-owners, whose resources are severely strained by the low prices which they obtain in London for their frozen meat. The principal cause of the low prices and the attitude of the Premier can be gathered from the following extract from the financial statement which he delivered in 1896:—
"Our meat I believe to be as good as any in the world, and the cost at which it can be delivered at a profit at the ports of the Colony will compare favourably with any other country that I am aware of; and yet the prices lately obtainable in London are such as barely cover the charges for freezing, freight, insurance, &c. Something will have to be done if the industry is to be preserved. The only suggestion I have received as yet is that the Colony, either individually or in conjunction with the other Colonies, should take the business of distribution into its own hands, as it is believed that, whilst the consumers give good value for our meat, a great part of that value is absorbed by various graduations of middlemen, leaving, as I have said, a margin for theproducer altogether disproportionate to the real value of the product. To effect this a large amount of capital will be required, respecting which I have no proposal to submit, as the matter is really one for private enterprise to undertake, but I mention the matter as one requiring speedy and most serious attention, because, if private enterprise should not be forthcoming to cope with the difficulty, it may devolve upon Parliament to adopt such measures as may appear practicable to conserve an important industry which we can ill afford to lose."
Subsequently, I understand (I was not in Queensland at the time), a Parliamentary Committee was instructed to consider the question, and reported in favour of the establishment at London and in the provinces of depôts for the receipt and distribution of frozen meat.
On another occasion, referring to the injury done to the harbour of Brisbane by excessive towage rates, the Premier said that if private enterprise could not do it for a less sum, it would be a very simple thing for the Government to take the matter in hand.
Thirdly, that the State may use its credit, after strict investigation of the circumstances and upon conviction of the validity of the security, to enable prospective producers to borrow money at a low rate of interest. The Sugar Works Guarantee Act, of which I have quoted the provisions, has led other producers to ask for similar concessions. Thefarmers want flour mills and cheap money; the pastoralists and graziers complain of the tax levied upon them under the Meat and Dairy Produce Encouragement Acts. Why, they ask, should the sugar industry be exceptionally favoured? Again, if the Government are to establish distributing agencies for frozen meat, why not also for other produce?
The Socialists describe these various measures as a spurious form of socialism calculated to increase the profits of a single class of the community; but the Government do not trouble themselves about abstract terms. They have steadily pursued a settled policy, and have successively assisted the sugar, pastoral, and agricultural interests; they are prepared, if necessary, to give substantial help to cattle-owners in the disposal of their produce, and they intend to propose amendments of the mining laws which will promote the further development of the industry. Nor have the producers alone been benefited; the working classes, who are the first to suffer in times of depression, are sharing in the renewed prosperity of the country, and have been able to take advantage of the increased demand for their services.
[1] Quoted, by permission of the author, from an article contributed to theAustralasian Review of Reviewsby Mr. J. V. Chataway, one of the members for Mackay.
[2] See footnote p. 66.
[3] Financial statement 1896, p. 14.
Differences of conditions between Australia and New Zealand—The Public Works policy—Taxation on land—The Land Act of 1892—The Land for Settlements Acts—The Government Advances to Settlers Acts—The encouragement of settlement—The co-operative construction of Public Works—The unemployed—Continuity of policy.
The Constitution of 1852, under which New Zealand obtained responsible government, differed from those granted to the Australian Provinces in the creation of Provincial as well as Central Authorities. Owing to the mountainous character of many parts of both islands, and in the absence of railways and other facilities for internal transit, communication had been carried on principally by sea, and settlement, instead of radiating from one point, as in New South Wales, Victoria, and South Australia, had been diffused at Auckland, Wellington, Christchurch, Dunedin, and other places of secondary importance. Under these circumstances, while it was deemed advisable to create a Central Government at Auckland, which was transferred to Wellington in 1865, six electiveProvincial Councils were established, which, though their legislative and executive powers were confined within specified limits, promoted the continuance of the separate development of the several portions of the Colony. In 1876 the Provincial Legislatures, which had in the meanwhile been increased by a division of territories to ten, were abolished by the Central Government, principally because they impeded the execution of the national policy of the construction of public works. The effects of the system, however, are still seen, especially in the demands made in the House of Representatives that the different districts shall share in the benefits of any proposed expenditure of public funds.
Another feature which served to differentiate New Zealand from Australia was the existence of a warlike native race in the North Island, which opposed the colonisation of the early settlers. From the outset, ignorance of each other's language and habits of thought led to misunderstandings in regard to the disposal of land, which was complicated by the communal tenure of the Maoris. The appreciation of this difficulty led to the insertion in the Treaty of 1840, in which the chiefs purported to cede the sovereignty of New Zealand, of a provision which reserved to the Crown the right of pre-emption over all native lands. But the dissatisfaction was not allayed; the natives, conscious of the steady advances of thesettlers and urged to sell by agents of the Crown, feared that they would gradually be dispossessed of their territory. A conflict which arose in regard to some land, and led to fatal results, increased the state of tension, which culminated, after a struggle in the extreme north, in the prolonged conflicts of 1860 to 1870. After the pacification the reciprocal relations began to improve, and are now excellent. The Maoris are universally respected, have four members in the House of Representatives, and two in the Legislative Council, and are represented in the Executive Council by a Minister, who is himself a half-caste. Numerous attempts have also been made to settle the land question, notably by the resumption of the right of pre-emption, which had been waived for a time, and by the constitution, by an Act of 1893, of a Validation Court for the purpose of considering and finally settling the titles to lands obtained by Europeans from the natives. In view of their pre-emptive right, the Government have been bound, in justice to the Maoris, to make provision for the purchase of such lands as may be offered to them, though they have not herein initiated a new policy. From the establishment of Imperial sovereignty to 1870, successive Governments acquired six million acres in the North Island, the whole of the Middle Island, with the exception of reserves for the original owners who were few in number, and Stewart Island. From that date until 1895, another sixmillion acres had been acquired at an outlay of a million and a half pounds, and subsequent purchases, from a large area still under negotiation, amount to about 550,000 acres. New Zealand has thus disbursed, and is still disbursing, large sums of money in the purchase of native lands, while Australia and Tasmania recognised no right of possession on the part of the few degraded aboriginals; and New Zealand alone is burdened with the payment of interest upon loans raised to cover the charges of prolonged military campaigns.
During the wars, settlement was necessarily checked in the North Island, but proceeded in the Middle Island without intermission. At their conclusion, in 1870, Mr. (now Sir Julius) Vogel, the Colonial Treasurer, placed before Parliament a comprehensive scheme of public works, which aimed at the general improvement of means of communication, a matter of particular importance in the North Island as being likely to hasten its final pacification. "The leading features of the policy were: to raise a loan of ten millions, and to spend it over a course of years in systematic immigration, in the construction of a main trunk railway throughout the length of each island, in the employment of immigrants on the railway work, and in their ultimate settlement within large blocks of land reserved near the lines of railway, in the construction of main roads, in the purchase ofnative lands in the North Island, in the supply of water-power on the goldfields, and in the extension of the telegraph. The plan, with some modifications, was authorised by the Legislature. These modifications mostly related to the amount to be borrowed and to its expenditure; but there was one alteration which crippled the whole policy. The reservation of large tracts of Crown land through which the railways were intended to be made, with a view to the use of that land for settlement thereon, and as the means of recouping to the Colony a great part of the railway expenditure, was withdrawn by the Government from fear of losing the whole scheme. That fear was not unfounded, inasmuch as provincial opposition to the reservation in question, combined with the opposition of those who disliked the whole scheme, would have seriously endangered its existence."[1] The provincial opposition was due to the fact that, though the disposal of the Crown lands and the appropriation of the Land Fund were vested by the Constitution Act in the Central Legislature, each province had in practice been allowed to frame the regulations for the alienation of land within its district, and had received the proceeds of sale for its own use. But the omission of the proposed reservation "has necessitated the frequent recurrence of borrowing large sums in order to continue work which had been begun and was useless whileit was unfinished, instead of making, as would have been the case under a proper system of land reservation, the work itself to a great extent, if not altogether, self-supporting and self-extending; and that deplorable omission has also frustrated the anticipated conduct of progressive colonisation concurrently with the progress of the railways. The result of not insisting on this fundamental condition has been what should have been foreseen and obviated. The Provincial Governments sold land in the vicinity of the intended railways, and expended the proceeds for provincial purposes; and, as a rule, speculative capitalists absorbed the land and the profits which should have been devoted to colonisation and to the railway fund."[2] As the proposed railways would pass through private as well as Crown lands, Sir Julius Vogel also sought the power to levy a special rate, in certain circumstances, upon the persons in the vicinity of the railways who would be benefited by their construction. He believed that he would thereby prevent "indiscriminate scrambling for railways," but was equally unable to induce Parliament to accept his views. The aggregation of large estates was promoted by the low price, 10s. or even 5s. an acre, at which the land was for many years sold. 262 freeholders, including companies, owned in 1891, 7,840,000 acres of land in estates of 10,000 acres and upwards. The Province has, since itsfoundation, sold or finally disposed of more than 21 million acres, and has at present nearly three million acres open for selection. The remaining lands, exclusive of those in the hands of the Maoris, amount to 16-½ million acres, but comprise large tracts of barren mountainous country in the Middle Island, and of valueless pumice sand in the North Island. In most directions, according to the Premier, settlement is already in advance of the roading operations.
The policy initiated by Sir Julius Vogel in 1870 was carried on by successive Ministers until 1888, during which time more than 27 millions were borrowed and devoted, for the most part, to the construction of railways and other public undertakings. Subsequently, Sir Harry Atkinson and his successor, Mr. John Ballance, realised the danger of constant reliance upon loans, and greatly reduced the expenditure, which had become extravagant in the abundance of borrowed money. Mr. Ballance also reformed the system of direct taxation and gave an impetus to legislation dealing with the settlement of the land and the protection of workmen in industrial pursuits.
The existing property tax, at the rate of one penny in the £ on all property, subject to an exemption of £500, was replaced by a graduated tax on incomes and land values, the principle of graduation having already been recognised in the case of succession duty. The former impost was naturally upheld bylarge owners of property and by all classes of professional men who had escaped taxation upon their incomes; while it was distasteful to shopkeepers, who might be taxed on unsaleable merchandise, and to cultivators of the soil, who found that their taxes rose in proportion to the improvements which they effected upon their estates. The Government had little difficulty in passing their measure, which, subject to slight modifications, is in force at the present time. Incomes below £300 are not taxed; between £300 and £1,300 they pay 6d. in the £, above £1,300 a shilling; but the sum of £300 is deducted from the total income in the assessment of the tax. For instance, an income of £2,000 pays £60, at the rate of £25 upon £1,000, and £35 upon £700. The ordinary land-tax is a penny in the £ on all freehold properties of which the unimproved value exceeds £500; between £500 and £1,500 exemption is allowed on £500; between £1,500 and £2,500 the exemption decreases by £1 for every £2 of increased value, being extinguished at the latter amount. Should the value exceed £5,000, a graduated land-tax is also levied, which rises progressively from half a farthing, until it reaches twopence upon estates of the unimproved value of £210,000 and upwards. All improvements are excluded from the assessment of the taxable amount: they are defined to include "houses and buildings, fencing, planting, draining of land, clearing from timber, scrub or fern, laying down in grass orpasture, and any other improvement whatsoever, the benefit of which is unexhausted at the time of valuation." Under this provision rural owners have every encouragement to improve their properties, as the more they do so, the smaller becomes the proportion of the total value of their estates on which they are liable for taxation. Owners are allowed, for the purposes of the ordinary, but not of the graduated land-tax, to deduct from the unimproved value of their land the amount of registered mortgages secured upon it; and mortgagees pay one penny in the £ upon the sum total of their mortgages, but are not subject to the graduated tax. A return, published under the assessment of 1891, shows, however, that rural owners are obtaining less benefit from the exemption of improvements than the owners of urban lands. The figures are as follows:—
Actual Value, Valueincluding of Unimprovedimprovements. improvements. value.Counties ... 85,818,167 27,922,735 57,880,233Boroughs ... 36,406,862 18,442,562 17,907,662Total ... £122,225,029 £46,365,297 £75,787,895
It thus appears that land is taxed, on an average, at 49 per cent. of its actual value inclusive of improvements in boroughs, and at 67-½ per cent. in counties;but it must be remembered that, as the urban population is not concentrated in one centre, land values have not been inflated to any great extent, and that much of the rural land has either recently been settled or is held in large blocks in a comparatively unimproved condition. The improvement or sale of such properties would, the Government believed, be promoted by the imposition of the tax. The Minister of Labour (the Hon. W. P. Reeves) expressed this view in the clearest terms: "The graduated tax is a finger of warning held up to remind them that the Colony does not want these large estates. I think that, whether partly or almost entirely unimproved, they are a social pest, an industrial obstacle, and a bar to progress." Similar feelings are, apparently, entertained towards the absentee owner, who, if he has been absent from or resident out of the Province for at least three years prior to the passing of the annual Act imposing the tax, is required to pay an additional 20 per cent. upon the amount of graduated land-tax to which he would otherwise be liable. The income and land taxes produce a revenue about equal to that formerly derived from the property tax, and are collected from far fewer taxpayers, the respective numbers being 15,808 and 26,327 in a population of some 700,000 persons. The benefits have been felt principally by tradesmen, miners, mechanics, labourers, and small farmers. Of 91,500 owners of land, 76,400 escape payment of the land-tax. Itmay be noted, incidentally, that a permissive Act of 1896 authorises such local bodies as adopt it to levy rates on the basis of the unimproved value of land. Much anxiety has been felt by large landowners and owners of urban property throughout Australasia at the successive adoption of a tax on unimproved values by South Australia, New Zealand, and New South Wales. They fear that it is the first step towards the national absorption of land values advocated by Henry George, but forget that the Governments of New South Wales and New Zealand, in respect of exemptions, and of New Zealand and South Australia, in respect of graduation, have introduced features in their systems of taxation which cause them to be fundamentally distinct from his proposals. The Bill passed through the Victorian Assembly in 1894, but rejected by the Council, also provided for exemptions.
But how, it may be asked, has an equitable assessment of the land been secured for the purposes of the tax? Any owner who is not satisfied with the value placed upon his land on the assessment roll, may require the Commissioner to reduce the assessment to the amount specified on the owner's return, or to purchase the land at the sum mentioned on the owner's return of its actual value inclusive of improvements. The Commissioner is bound to make the reduction unless the Government approve of the acquisition of the land. A reasonable balance is thus struck: the Government are unwilling tohave a large amount of land thrown on their hands, while the owner does not take the risk of the resumption of the land at an inadequate valuation. Disputes between the Commissioner and owners have, in most cases, been adjusted satisfactorily; but the Government decided to buy the Cheviot Estate of 85,000 acres, which lies close to the sea in the Middle Island. Upon its purchase they at first let the pastoral lands temporarily at the rate of £8,862 a year, while their surveyors laid out the country and supervised the construction of roads. The results of the transaction were, in 1896, eminently satisfactory; the capital value of the estate then stood at £271,700, and the annual rental at £14,300; and the few inhabitants engaged in pastoral pursuits had been replaced by 216 settlers and their families, who were reported to be of a good class and to have done a large amount of work in the improvement of their lands.
The principal Act dealing with the alienation of Crown Lands is that of 1892, which consolidates and amends former legislation. Crown Lands are divided into urban, suburban, and village lands, which are sold by auction at an upset price, and rural lands, which are again subdivided according to their adaptability for cultivation or pasturage. When townships are being laid out on Crown Lands, one-tenth of the superficial area is to be reserved for purposes of recreation, and a similar extent as a nucleus of municipal property, to bevested subsequently as an endowment in the local authority in addition to the reserves necessary for all public purposes. At the option of the applicant, lands may be purchased for cash, or be selected for occupation with the right of purchase, or on lease in perpetuity. Selectors are limited to 640 acres of first-class land, or 2,000 acres of second-class land, the maximum being inclusive of any lands which they may already hold. The object of this provision is to prevent existing landowners from aggregating large estates by the purchase of Crown Lands. Cash sales are effected at a price of not less than 20s. and 5s. per acre, respectively, for first-class and second-class land, and entitle the selector to a free-hold title upon the expenditure of a prescribed amount on improvements. Land selected under occupation with the right of purchase is subject to a rental of 5 per cent. upon the cash price, under lease in perpetuity, which is for 999 years, to a rental of 4 per cent.; and strict conditions of residence and improvement are, in both cases, attached and rigidly enforced. At the expiration of ten years, a licensee under the former tenure may, upon payment of the upset price, acquire the freehold or may change the license for a lease in perpetuity. The latter is the perpetual lease of the previous Acts, denuded of the option of purchase and of the periodical revaluation of the rent, and is, in the latter respect, reactionary, as the State gives up its right to take advantage of any unearned increment.Subsidies amounting to one-third of the rent of land taken up under any of the above tenures and one-fourth of the rent of small grazing-runs are paid to local authorities for the construction of roads, but must be expended for the benefit of the selectors from whose lands such moneys are derived. The Act of 1892 also authorises the Governor to reserve blocks of country, as special settlements or village settlements, for persons who may desire to take up adjacent lands. The Village Settlements have been successful when they have been formed in localities in which there was a demand for labour; the Special Settlements comparative failures, because many of the members of the associations had neither the requisite means nor knowledge of rural pursuits. Pastoral land is let by auction in areas capable of carrying not more than 20,000 sheep or 4,000 head of cattle; or in small grazing-runs not exceeding, according to the quality of the soil, 5,000 or 20,000 acres in area. The dominant feature in the Act, in its application to pastoral as well as agricultural land, is the strict limitation of the area which may be held by any one person; rightly or wrongly, the Government are determined that the Crown Lands shall not pass into the hands of large holders. The principal transactions of the last three years are thus summarised, the figures for 1894 covering the period from April, 1893, to March, 1894, and so for the other years:
1894. 1895. 1896.No. AREA. No. AREA. No. AREA.Acres. Acres. Acres.Cash ... ... 500 34,999 415 38,710 492 26,584Occupation,with right topurchase ... 471 108,499 428 75,500 434 84,970Lease inperpetuity 1,228 255,348 1,032 166,037 1,461 199,093Pastoral runs 227 899,945 123 568,293 188 2,156,378
In regard to the numerical superiority of leases in perpetuity, it must be pointed out that, not only the special blocks, but the improved farms and lands offered under the Land for Settlements Acts, to which I shall have occasion to refer, are disposed of solely under that tenure; but it appears to be attractive in itself: as most of the Crown Lands require considerable outlay before they become productive, a selector can expend any capital that he may possess more advantageously upon the development of the capabilities of the soil than upon the acquisition of the freehold. The Government also are benefited by a policy which renders the land revenue a permanent asset in the finances. The receipts for the financial year 1895-6 amounted to nearly £300,000.
In 1892 an attempt was also made to deal with the problem of the scarcity of available land in settled districts which was caused by the prevalenceof large estates. It was thought that the labourers employed upon them, and the sons of farmers who might wish to settle near their parents, should have an opportunity of acquiring land. The Government, accordingly, passed the first of a series of Land for Settlements Acts, which authorised the repurchase or exchange of lands and their subdivision for purposes of close settlement. Upon the recommendation of a Board of Land Purchase Commissioners, some of whom represent local interests, that a certain estate is suitable for settlement, and should be purchased at a certain price, the Government may enter into negotiations with the owner with a view to a voluntary transaction, and, upon his refusal, take the land compulsorily at a valuation fixed by a Compensation Court. Owners are so far safeguarded that they cannot be dispossessed of estates of less than 640 acres of first-class, or 2,000 acres of second-class land, that they can claim to retain the above area, and that they can require the Government to take the whole of their estates. The maximum annual expenditure was limited at first to £50,000, but has been raised to £250,000. At the end of March of last year twenty-eight estates, containing 87,000 acres, had been acquired, in one case compulsorily, and made available for settlement by surveys and the construction of roads at a total expenditure of nearly £390,000. Nineteen of these had already been subdivided into farms of various sizes, and were bringing in rentals amounting to4.76 per cent. upon the outlay which they had involved. The Land Purchase Inspector was able to report that the lands, which had been the object of eager competition, had, in most cases, been greatly improved and were in good condition, and he is likely to find even better results in the future, as the Amending Act of 1896 provided that applications for land should not be entertained unless the applicants were able to prove their ability properly to cultivate the soil and to fulfil the stipulations of the leases. This provision is of great importance, as much of the land has been cultivated by its former owners, and would deteriorate rapidly under incapable management. The Governments of South Australia, Queensland, and Western Australia have legislated in a similar direction, and that of New South Wales introduced a Bill which failed to become law. As far as New Zealand is concerned, which has conducted its operations on the largest scale, the system has not been sufficiently long in existence to enable an estimate to be formed of its probable financial results.
A similar uncertainty prevails in regard to the more recent attempts to place cheap money within the reach of settlers. The first step in that direction was taken in 1886, when regulations were made for the establishment of Village Settlements, the members of which might receive loans for the construction of their houses and for other purposes. These settlements were not, as in some of theAustralian Provinces, formed on a co-operative or a semi-communistic basis. The success of this experiment doubtless encouraged the Government to widen the scope of the advances. In 1895, 4,560 persons, divided among 144 settlements, had occupied 33,800 acres of land; they had received £25,800 in advances, had paid £17,600 in rent and interest, and had carried out improvements of the value of £92,800. These improvements, consequently, form an ample security for the repayment of the loans. The necessity of a general scheme of advances was based upon the difficulty experienced by small settlers, however good might be the security, in obtaining loans except at prohibitive rates. Authority was, accordingly, obtained through the Government Advances to Settlers Acts of 1894-6 to borrow three millions with a view to loans ranging from £25 to £3,000, upon first mortgages, to owners of freehold land and occupiers of Crown Lands, the advances not to exceed three-fifths of the value of the former and one-half of the value of the lessee's interest in the latter. Advances may not be made on town lands, nor on suburban lands which are held for residential or manufacturing purposes. The valuation of every security is to be carried out by or on behalf of a superintendent appointedad hoc., and is to be submitted for the consideration of a General Board consisting of the Colonial Treasurer, the Superintendent, the Public Trustee, the Commissioner of Taxes, and a nominee of theGovernor in Council. The advances on freehold land may be either for a fixed period at 5 per cent., or for 36-½ years at 6 per cent., of which 5 per cent. is reckoned as interest and 1 per cent. towards the gradual repayment of the principal; on leasehold lands, in the latter form alone. As the loan of a million and a half raised as the source of advances was floated at 3 per cent., and realised nearly £1,400,000, the margin between the percentage due by the Government and that received from the settlers should be sufficient to enable one-tenth of the interest to be paid, as provided, into an Assurance Fund against possible losses, and a residue to be available which will cover the general expenses of administration. But it is obvious that the result of the experiment will depend greatly upon the prevalent rate of interest and the price of produce. Hitherto, two-thirds of the advances have been used by settlers to enable them to rid themselves of former and less advantageous mortgages; in some cases, mortgagees, in order to retain their mortgages, have voluntarily lowered the rate of interest to 5 per cent. The tabular statement on the following page of the financial position is the latest that has been issued, and does not purport to be more than approximately correct. Advances may also be made towards the construction of dwelling-houses to those who have obtained selections under the Land for Settlements Acts; but they may not exceed twenty pounds nor theamount already spent by the applicant upon his holding.
INCOME.The advances authorised and acceptedamount to £735,967, and yield an annualincome of 5 per cent. . . . . . . . . . . . £36,798The temporary investment of £603,444 inGovernment securities yields an annualincome at the rate of 3.42 per cent. . . . . 20,747The balance of £51,805 on current accountwith the Bank, may be estimated to yield2 per cent. . . . . . . . . . . . . . . . . 1,036--------Estimated total income on June 15, 1896 . . . £58,581--------EXPENDITURE.Annual charge for interest at 3 per cent. on£1,500,000 . . . . . . . . . . . . . . . . . £43,000Salaries for the year . . . . . . . . . . . . 3,700Other expenses . . . . . . . . . . . . . . . . 2,800Mortgage Tax, estimated . . . . . . . . . . . 1,800--------Estimated total expenditure . . . . . . . . . £53,300Balance of income over expenditure . . . . . . 5,281--------£58,581========
Another measure which may affect the well-being of settlers is the Family Home Protection Act, 1895. Any owner of land may settle as a family home the land, not exceeding, with all improvements, £1,500 in value, on which he resides and has his home, provided that at the time the land is unencumbered and he is able to pay all his debts without the land in question. As a precaution against theconcealment of liabilities, he is obliged to make an application to a District Land Registrar, who must thereupon give public notice of the intended registration. Should any creditor put in a claim within twelve months, the case is to be tried before a Judge of the Supreme Court, and if the owner of the land is vindicated, the Registrar is to issue a certificate which will exempt the family home from seizure under ordinary processes of law, but not in one or two contingencies, of which the principal is the failure to meet current liabilities in respect of rates or taxes. The registration is to continue until the death of the owner or the majority or death under the age of twenty-one of all his children, and is not to precede the last of these events. Upon its cessation it may be renewed at the option of the persons then holding the estate, who must be relations of the deceased. Little effect has been given to the Act owing, probably, to the unavoidable publicity of the proceedings. It appears to have been based upon a South Australian Act of 1891, which enables holders of workmen's blocks, by the endorsement of their leases, to secure for their properties somewhat similar exemptions from seizure. Their failure to avail themselves, to any considerable extent, of this privilege is attributed to the unwillingness of working men to take any trouble in a matter of which the advantages are merely contingent.
So far I have discussed the legislation of New Zealand which affects freeholders and those whoare, or desire to become, tenants of the Crown; but before proceeding to deal with matters of common import to most settlers, I must point out that tenants holding from private landlords have also engaged the paternal attention of the Government. The Minister of Lands introduced last session, but failed to pass, a Fair Rent Bill, which would have established a system of Land Courts under the presidency of Stipendiary Magistrates. Landlords and tenants would have had an equal right to apply for the determination of the fair rent which, upon the decision of the Court, whether it were higher or lower than the reserved rent, would have been deemed, until a further revision, to be the rent payable under the lease. The Government displayed great inconsistency in the introduction of the measure; having shown, in the system of lease in perpetuity, that they objected to the periodical revaluation of the rents payable upon Crown Lands, they proposed, through the Fair Rent Bill, to enable the Crown, as landlord, to take steps to increase the rents of its tenants.
As regards the general interests of producers, the Government have, through reductions amounting to £50,000 a year in railway rates, made a concession to them at the expense of the general taxpayer, as the railways, after payment of working expenses, return only 2.8 per cent., a sum insufficient to meet the interest upon their cost of construction. Again, they have appointed experts in butter-making,fruit-growing, &c., who travel about the country and give technical instruction by means of lectures; and they distribute, among farmers and others, pamphlets containing practical advice upon various aspects of cultivation. But, except that butter is received, graded and frozen free of charge, they have not followed the example of Victoria and South Australia in the direct encouragement of exports. Finally, while the State acts as landlord, banker, and carrier, it also carries on a department of life insurance and annuities, accepts the position of trustee under wills, and, if the programme of the Government is accepted by Parliament, will undertake the business of fire insurance and grant a small allowance to all who are aged and indigent and have resided for a long term of years in the Colony. The development of the resources of the country, under the assistance of the State, has also proceeded in other directions. More than £500,000 had been spent up to March, 1896, in the construction of water-races on goldfields for the benefit of alluvial miners and public companies; and in that year the Premier, in view of the large amount of foreign and native capital that was flowing into the industry, obtained the authorisation of Parliament to the expenditure of a further sum of £200,000 in the conservation of water by means of large reservoirs, the construction of water-races, the extension of prospecting throughout the Colony, and the construction of roads and tracks for the generaldevelopment of the goldfields. The physical attractions and health resorts of the country, many of which are reached with difficulty, are also being opened up by the expenditure of public funds.
The general question of settlement has, during the last few years, been connected closely with that of the unemployed. In New Zealand, as in several of the Australian Provinces, the construction of the main lines of railway attracted into the country immigrants who, upon their completion, were left without other resources. At the same time the fall in prices rendered many settlers unable to fulfil their obligations, and, upon the loss of their properties, drove them into the towns, where they swelled the ranks of the unemployed. It also forced those who remained solvent to cut down their general expenses, and especially their labour bill, to the lowest possible point. The Government were compelled to face the problem and attempted to give former settlers a fresh chance and gradually to accustom artisans to rural pursuits which, in the case of uncleared land, are at first of a simple character. But the facilities offered under the Land Act were of little use unless it could be arranged that the men, being without capital, should have outside employment upon which they could depend until their lands had been cleared and brought into cultivation. It had already been realised that the construction of roads was an indispensable sequel to that of railways, and large annual appropriationshad been made from the Public Works Fund; but it was then decided that settlement should be encouraged systematically in those districts in which it was proposed to proceed with the construction of roads. This policy has, accordingly, been carried out energetically during the last few years from loans and current revenue upon the co-operative system, which was inaugurated in 1891 by the Hon. R. J. Seddon, then Minister of Public Works and now Premier of the Colony. As this system, which was first tried as an experiment upon the railways, is now employed in connection with most public works, its object and operation may be illustrated by a series of quotations: "The contract system had many disadvantages. It gave rise to a class of middle men, in the shape of contractors, who often made large profits out of their undertakings, and at times behaved with less liberality to their workmen than might have been expected under the circumstances. Even in New Zealand, where the labour problem is less acute than in older countries, strikes have occurred in connection with public works contracts, with the result that valuable time has been lost in the prosecution of the works, much capital has been wasted by works being kept at a standstill and valuable plant lying idle, and large numbers of men being for some time unemployed; and considerable bitterness of feeling has often been engendered. The contract system also gave rise to sub-contracting, which is worse again; for not onlyis it subject to all the drawbacks of the parent system, but by relegating the conduct of the works to contractors of inferior standing, with little or no capital, the evil of "sweating" was admitted. Very often, too, the business people who supplied stores and materials were unable to obtain payment for them, and not seldom the workmen also failed to receive the full amount of their wages. The result in some cases was that, instead of the expenditure proving a great boon to the district in which the works were situated, as would have been the case if the contract had been well managed and properly carried out, such contracts frequently brought disaster in their train. The anomaly of the principal contractor making a large profit, his sub-contractor being ruined and his workmen left unpaid, also occasionally presented itself, and thus the taxpayer who provided the money had the mortification of seeing one man made rich (who would perhaps take his riches to Europe or America to enjoy them) and a number of others reduced to poverty, or in some instances cast upon public charity.... The co-operative system was designed to overcome these evils, and to enable the work to be let direct to the workmen, so that they should be able, not only to earn a fair day's wage for a fair day's work, but also to secure for themselves the profits which a contractor would have otherwise made on the undertaking.... The work is valued by the engineer appointed to have charge of itbefore it is commenced, and his valuations are submitted to the Engineer-in-Chief of the Colony for approval. When approved, they constitute the contract price for the work; but they are not absolutely unchangeable as in the case of a binding, strictly legal contract. It frequently happens under an ordinary contract that work turns out to be more easy of execution than was anticipated, and the State has to see its contractors making inordinate profits. Sometimes, on the other hand, works cost more than was expected; but in most cases of this kind the contractor either becomes a bankrupt, so that the State has, after all, to pay full value for the work, or, if the contractor happens to be a moneyed man, he will probably find some means of getting relieved of a contract, or of obtaining special consideration for his losses on completion of his work. Under the co-operative system, if it is found that the workmen are earning unusually high rates their contracts can be determined, and be re-let at lower rates, either to the same party of men or to others, as may be necessary. Similarly, if it is shown, after a fair trial of any work, that capable workmen are not able to earn reasonable rates upon it, the prices paid can, with the approval of the Engineer-in-chief, be increased, so long as the department is satisfied that the work is not costing more than it would have cost if let by contract at ordinary fair paying prices.... Another great advantage ofco-operation is that it gives the Government complete control over its expenditure. Under the old plan, when large contracts were entered into, the expenditure thereunder was bound to go on, even though, through sudden depression or other unlooked-for shrinking of the revenue, the Government would gladly have avoided or postponed the outlay.... Not only has the Government complete control over the expenditure, but in the matter of the time within which works are to be completed the control is much superior to that possessed when the works are in the hands of a contractor. When once a given time is allowed to a contractor in which to complete a work, any request to finish it in less time would at once provoke a demand for extra payment; but under the co-operative system the Government reserves the right to increase the numbers employed in any party to any extent considered desirable, so that if any sudden emergency arises, or an unusually rapid development in any district takes place, it is quite easy to arrange for the maximum number possible of men being employed on the works in hand, with no more loss of time than is required to get the men together."[3]
It was at first proposed that the men should work in gangs of about fifty, who should have an equal interest in the contract and make an equal division of the wages and profits; but experience showed that large gangs did not work together harmoniouslyowing to differences, not only in the temperament of the men, but also in their abilities as workmen. The labourers solved this difficulty by forming themselves into small parties composed of men of about equal ability, with the result that, while some gangs earn higher wages than others, the weak are not excluded altogether from employment. The co-operative works have, on the whole, been successful; but it is clear, from the reports of the surveyors, that constant supervision is necessary, and that there is considerable dissatisfaction, among unskilled workmen, with the low rate of their earnings, and, generally, with the intermittent character of the employment. For the Government have decided, in order that work may be given to as many as possible and that settlement may be promoted, that no labourers shall be employed more than four days in the week. During the remainder of the time, if they have taken up land in the neighbourhood, they devote themselves to it; otherwise they are likely to be demoralised by enforced idleness. The Minister of Public Works attempted to prove that works had been carried out more economically under the co-operative system, but was unable to cite cases that were exactly analogous. He showed that the average number of employés had risen from 788 in 1891-2 to 2,336 in 1895-6, but that, whereas in the former years workmen under the Public Works Department were twice as numerous as those under the LandsDepartment, in the latter the proportion had been more than reversed. This change must be regarded as satisfactory, as employés under the Lands Department are, in a large majority of cases, settlers.
In 1894 the Government passed an Act which was intended to meet the special requirements of the unemployed. Any number of men composing an association may, by agreement with the Minister of Lands, settle upon Crown Lands for the purpose of clearing or otherwise improving them, and will, subject to the authorisation of Parliament, receive from the Colonial Treasurer payment for their work. They are entitled thereupon to take up holdings at a rental based on the combined value of the land in an unimproved condition and of the improvements. This system, which is known as that of Improved Farm Settlements, has been worked largely in connection with co-operative works. In March of last year 39 settlements had been initiated which covered 63,600 acres and carried 679 residents. They have "had the effect of removing from the towns a considerable number of people who otherwise would have been found in the ranks of the unemployed, and an opportunity has been given to all who are really desirous of becomingbonâ-fidesettlers to make homes for themselves, and become producers rather than a burden on the State. Many who have taken up land on this system brought no experience withthem to aid in the operations of the pioneer work of settlement, and this had to be gained at some cost to themselves and the State. So long as the Government continues monetary aid by way of assisting in clearing, grassing, and house-building, all will go well; by the time this comes to an end, sufficient experience should have been gained, and the farms ought to be stocked. This latter is at present a difficulty with many of the settlers, for it is obvious that many of them can at first do little more than support themselves out of the moneys advanced for clearing, without sparing anything for stock."[4] The success of these settlements, it is pointed out, depends upon the simultaneous occupation by men with capital of the adjoining Crown Lands in larger holdings on which there will be a demand for the labour of the settlers; otherwise they will be in difficulties when the roads are completed, as their blocks of a hundred acres or so will not alone suffice to secure to them a livelihood. This principle has been borne in view, as far as possible, in the location of the settlements.
Labourers for the co-operative works, I should have stated, are recommended by the local agencies of the Labour Department, and are selected on the principle that applicants not previously employed have priority of claim over those who have recently had employment; that men resident in the neighbourhood of the works have priority overnon-residents, and that married men have priority over single men; while the qualifications of the men as workmen and their personal characters are naturally taken into consideration. During the five years of its existence, the Labour Department has found employment for nearly 16,000 men; of the 2,781 men assisted during the year ending March, 1896, 2,163 were sent to Government works. Under the control of the Labour Department is a State Farm, in the province of Wellington, at which unemployed are received for a few weeks or months, and, having saved a few pounds, are enabled to seek work elsewhere. The farm is specially adapted for young, able-bodied men who have been brought up as clerks and shop assistants, but, owing to the stress of competition, have been thrown out of employment. Many of them would be prepared to undertake manual labour, but lack the necessary experience. At the farm they would be able to obtain in a short time sufficient knowledge to render them capable of accepting work for private employment. The Secretary of the Department of Labour, Mr. Tregear, maintains that the farm has proved its usefulness and should be supplemented by similar institutions in the other provinces. Since the last annual report, I understand, the Government have decided, as the land has been improved to a point which renders it impossible to employ any considerable number upon it profitably, to dispose of it, and to remove the workmento fresh areas of uncleared land. They hope to recoup themselves for their whole expenditure, but will not necessarily be convicted of failure should they fail to do so, as the undertaking was started on a charitable, and not on a commercial, basis. It aimed at the assistance of the genuine unemployed, and was not intended to become a refuge for confirmed loafers. On this point Mr. Tregear writes, and his views are those of the working men of New Zealand: "I am more and more impressed with the necessity that exists of establishing farms which shall be used as places of restriction for the incurably vagrant atoms of the population. The State Farm does not and should not fulfil this purpose; it is for the disposal and help of worthy persons, unsuccessful for the time, or failing through advance in years. What is required is a place of detention and discipline. There exists in every town a certain number of men whose position vibrates between that of the loafer and the criminal: these should altogether be removed from cities. The spieler, the bookmaker, the habitual drunkard, the loafer on his wife's earnings, the man who has no honest occupation, he whose condition of 'unemployed' has become chronic and insoluble—all these persons are evil examples and possible dangers. Such an one should be liable, on conviction before a stipendiary magistrate, to be removed for one or two years to a farm, where simple food and clothes would be found for himin return for his enforced labour. The surroundings would be more healthy, and open-air life and regular occupation would induce more wholesome habits and principles than the hours formerly spent in the beer-shop and at the street-corner, while the removal from bad companionship would liberate from the pressure of old associations. He would, on his discharge, probably value more highly his liberty to work as a free man for the future, and, as the State would have been to no cost for his maintenance, it would be a gainer by his temporary removal from crowded centres. There need be no more trouble than before in regard to the sustentation of the restricted person's family, as such a vagrant is of no use to his family, but only an added burden. While for the honest workman, temporarily 'unemployed,' every sympathy should be shown and assistance to work given, for the other class, the 'unemployable,' there should be compulsory labour, even if under regulations of severity such as obtain in prisons."[5] New Zealand has a justification for penal colonies lacking in older countries in the fact that the genuine unemployed can obtain assistance from the Government to enable them to settle on the land, either through the Co-operative Works or the Improved Farm Settlements.
The special efforts of the Government to settle impecunious persons on the land are still in theinitial stage and have not served to neutralise the effects of the lowness of prices and consequent scarcity of employment. The total expenditure under the heading of Charitable Aid was £106,500 in the year ended March, 1896, being an increase of £20,000 upon that of the previous twelve months. A sum of £18,000 was also spent on relief works. The administration is vested in the local authorities, who obtain the necessary funds from rates, voluntary contributions and subsidies on a fixed scale from the National Exchequer. They expend one-fifth of the amount on the maintenance of destitute children and the greater portion of the remainder on outdoor relief. No information is available as to the number of persons relieved, their average ages, the form of relief or the conditions under which it is given; but it is evident from reports of the Inspector of Charitable Institutions that the administration is exceedingly lax and tends to intensify the evil which it should strive to alleviate. It would seem that, on the one hand, the Government are inculcating habits of independence, on the other, conniving at the encouragement of pauperism.
The results of recent legislation will depend, partly, on the price of produce, principally, on the methods of administration. This matter is one on which it is difficult to form an adequate opinion, as all statements are tinged more or less with the prejudice of partisanship. It is thereforebest to confine oneself to Acts of Parliament and official documents while realising that the more a State extends its sphere of action, the more are its Ministers subject to political pressure and tempted to maintain themselves in office by a misuse of the possibilities of patronage. The disposal of Crown Lands is vested in Local Land Boards, which consist of the Commissioners of Crown Lands for the district, and of not less than two nor more than four members appointed for two years, but removable from time to time by warrant under the hand of the Governor. These Boards receive all applications for Crown Lands and dispose of them in accordance with the provisions of the Land Acts. They are constituted the sole judges of the fulfilment of the conditions attached to leases and may cancel them, after inquiry, subject to the right of appeal to a judge of the Supreme Court. If any lessee make default in the payment of interest, his lease is liable to absolute forfeiture, subject to a similar right of appeal, without any compensation for his improvements. This question is one of great delicacy: it is manifestly unfair to confiscate a man's improvements if he has a fair prospect of being able to meet his obligations within a definite period; on the other hand, if such latitude be allowed, possibilities of favouritism are at once admitted. Again, are all applicants for land to be treated alike, irrespective of the probability that they will be good tenants of the Crown? TheLand Boards are vested with a discretionary power to refuse applications, but must state the grounds of their refusal. The best constitution for these Boards has been much discussed; but if, as has been proposed, nomination by the local authorities or election by the electors of local authorities were substituted for nomination of the Government, the pressure might be not only greater, but more immediate. Statistics, moreover, show that the administration of the Land Laws has not erred on the side of leniency. In March, 1896, the arrears of rent throughout the Province were only £15,700, a decrease of £22,000 upon the amount reported for the previous twelve months; and forfeitures had been numerous for failure to carry out the conditions of tenure. Under exceptional circumstances Parliament is prepared to make special arrangements. In view of the losses incurred by pastoralists during the severe winter of 1895, it passed a Pastoral Tenants' Relief Act, which empowered the Land Boards after inquiry into the facts of each case to grant remissions of rent or extensions of leases at reduced rentals. The Advances to Settlers Act also appears to be administered prudently, on the principle that the value of the property which may be offered as a security for a loan, and the risk of any loss from granting an advance, must determine the result of the consideration of every application. It is a necessary limitation of the Act that many of those who mostrequire assistance, having borrowed at high rates of interest, are unable to obtain the advances which would enable them to clear off their mortgages on account of the depreciation in value of the security. Of 2,196 applications received to March of last year, 730 had been refused, and 397 had lapsed through the refusal of the department to offer amounts equal to the expectations of the applicant.
The Acts providing for the purchase of private and native land and for advances to settlers have necessitated a large increase in the indebtedness of the Colony, and a consequent divergence from the principles laid down by Sir Harry Atkinson and Mr. Ballance. The present Premier, Mr. Seddon, who succeeded Mr. Ballance in 1893, admits that his Government borrowed £3,800,000 in three years, but contends that the whole of the amount with the exception of £210,000 is being expended in such a manner as to be remunerative. The sum mentioned is exclusive of a loan for a million authorised last session, which is to be expended upon the construction of railways and roads, the purchase of native lands, and the development of the goldfields and hot springs. Have these loans been in the best interests of the Colony? A stranger can but look at the matter broadly and will be inclined to think that they follow, in natural sequence, upon the policy of Sir Julius Vogel. The State then decided that it would use its credit to accelerate the construction of railways and roads and open upoutlying districts. Such works were valueless—in fact ruinous to the Province—unless they were followed by a strenuous and successful encouragement of settlement and cultivation. The latter task has been the principal work of the Seddon Government, which has attempted, not only to settle people on the land, but to settle them in suitable localities and under conditions that will give them a reasonable prospect of an independent and comfortable livelihood.