TIMBER ROYALTIES.

Hauraki Plains Gazette, Volume XXXII, Issue 4359, 23 December 1921, Page 4

TIMBER ROYALTIES.

LANDS COMMITTEE EVIDENCE. THAMES, OHINEMURI, AND . COROMANDEL COUNTIES. The following is a summary of the evidence given before the Parliamentary Lands Committee, on the application of the abovementioned county councils for half the proceeds on the sale of timber by the Crown in the three counties since 1913.. The summary was received by the Ohinemuri County Council on Wednesday, from the Thames County Council: In presenting the evidence the Act of 1905 was referred to and reference to Hansard was made to show from the speeches made by the members of the House that the intention of the Legislature was clearly to pay to local bodies a share of the revenue from the sale of! timber and flax from Crown lands. It was stated that, as evidence of the intention of the Legislature, the Thames County Council received by way of “halves” on timber sold from the Coromandel Penin-* sular during the following years the undermentioned amounts:

1906, £1421 6s 6'd; 1907, £1232 Ils 9d; 1908, £1195 12s 4d; 1909, £231 10s Id ; 1910, £lOOO ; 1911, £2261 Ils 8d ; 1912, £2615 7s 4d ; 1913, nil; 1914, £703 2s 6d ; 1915, £5l Bs. In 1915 the payments ceased altogether, and since that year the Council has not received one shilling from “timber halves.” Therefore the intention of the Act was flully borne out by the payment to the Council up to the year 1912 of £9957 19s Bd, whilst the payments of 1914 and 1915 were in all probability the proceeds of tim her sold prior to the year, 1913, when the method of selling the timber by public auction was adopted. Clause 5. section 319, of “The Land Act,” enacts that one half of the revenue received in respect of royalty under any license for cutting timber, etc., shall be payable to the local authority. This section and section 320 are merely re-enactments of “The Timber and Flax Royalties Act, 1905.” The license issued in section 319 means any license issued under section 307 of! the Act, which is the only section giving authority for the disposal of timber on Crown lands.) It is immaterial that the moneys payable by the licensee are made pay-i able in one or more fixed lump sums, and not by instalments regulated by the amount of timber cut. Tn using the word royalty in section 319 the Legislature clearly meant to include purchase money in whatever way it was made payable. It must be admitted that if a license is issued for the cutting' of timber;, etc., as prescribed by section 319 of the Land Act, one half of ( the proceeds received must be paid to the local body within

whose district the timber was cut. In other words, if a license is issued, notwithstanding the method of sale, the proceeds automatically become a royalty under section 319 of the Land Act. In the Long Title of the Act of 1905 a very wide interpretation of the intention of the statute is given, because it enacts that it is an - Act to provide for the payment tp local authorities of a portion of the revenue received from the sale of timber and flax on Crown ‘lands. Section 319 and 320 of the Land Act, being merely re • enactments of the 1905 Act, it must follow that, the terms sale and royalty have exactly the same meaning as regards the disposal of the timber and consequently the payment of half the proceeds to the local body. If. then, the timber is sold to the biggest biddei* instead of to any applicant, the purpose of the sale is not altered because of the essential stipulation “that the purchaser must take out and pay for a timber cutting license,”

'This ,then, is the license referred to in Section 319 of the Land Act, and by its issue the proceeds become royalty. If it were not so, why. should the purchaser under public auction require to take out a license at all. To contend that there is any difference between a sale under license for a lump sum and a disposal under license for a royalty is merely a quibble quite opposed to the spirit and intention of the Act. Forest regulations under “The Lancl Act, 1908,” published in the New Zealand Gazette of April 15, 1909, deals with the disposal of timber, and the sale of timber by auction is subject in all cases .to estimation and appraisement. The appraisement is based on tne classification under the., schedule rates of royalty, as is clearly shown by the footnote to the said schedule. See also section 6, which states* inter alia, that timber . . . may be disposed of “either by auction at per 100 ft, or by appraisement, or license to fell.” Section, 37 uses the word royalty, and provides, inter alia, that “the royalties . . . may be at the rates fixed by auction for the original lif cense.” Section 46 provides that royalty may, at the option of the Minister, it paid partly in cash and partly stalments. Section 63 provides that a forest ranger shall first report on the estimated quantity, quality, and general position and value of such timber. Section 63 provides for the sale of all-kauri timber by public auction .r tender.

These regulations bear out the contention that notwithstanding the mode of sale the timber is first appraised on the basis of royalty under the schedule. The sale by tender is dei signed to take advantage o F business competition between timber millers and to obtain thereby the benefit of any excess willing to be paid over and above the appraisement on royalty. In other words, the upset price is the “royalty,” and the auction is held for the purpose of securing a premium, as obviously the timber cannot be sold for less than the upset price, or “royalty.” The whole of the amounts received by the Council were expended on the roads and tracks across the peninsular. The purpose of the payment to the local bodies was undoubtedly to compensate for the damage done to roads and tracks by the removal of the timber. Not only that, but the Council has to face the future maintenance of those roads and tracks after the timber is removed. The timber standing on these ranges represents the natural and only asset to them, and the most of the land being precipitous is of little use for agriculture or pastoral purposes. It is quite a different matter where timi her is removed from flat country that becomes rich dairying or sheep country, but in this case this does nos apply, so that the Council is faced with future maintenance, and the ability of the land to bear taxation is almost nil. The deforestation of these hills creates serious sources of damage to the low-lying lands at the base of the hills.

Mr E. F. Adams, the wellr known mining and civil engineer, of Thames, deals with the damage caused to creeks- and roads, in the low-lying portion of 1 the foothills in a manner that proves beyond doubt that workedrput bush country is a source of great danger and loss to the the land adjacent thereto. The rainfall is diminished, and after every spell of rain floods occur. The flood of 1917 ip and about the Thames district resulted in damage to roads, bridges, and tracks in the Thames County to an incalculable amount.. As a matter of fact, practically thei whole of the

roads made and maintained out of tne timber halves received during the years 1906 -12 were destroyed by this flood carrying with it the heads of trees and broken timber left lying on the old timber, workings, scouring along tracks, blocking streams, etc. The Council is, therefore, faced with the task of reinstating these roads and tracks, rebuilding bridges damaged, and protecting by ramps the banks of streams from further erosion. The Council is totally unable to clo this unless the amount of timber halves accrued and rightly payable to the Council is received. We can quote many recent cases of considerable damage where the Count cil has had to expend .large amounts of its ordinary funds for the purpose of clearing slips and washouts as the result of the denuding of the forests adjacent, and there is one very marked and potent example, and that is the Coast Road from Thames to Coromandel. As a result of the clearing of the bush and the removal of the forest from the upper portion of the watershed the whole of the face of the country along which the road is made is subject to slips, and during the last three years the Council has spent several thousand pounds on the removal of the slips, and can see no to the work for the reason that the trouble becomes more acute each year. The Solicitor-General has ruled that a sale by public auction ,is not a disposal under royalty. There is a wide difference of opinion as to the meaning of the wprd royalty, and it is generally termed payment for mineral on the natural product of the soil in its virgin state. Tn its present application it represents the payment per unit or multiple of units of a quantity having no definite extent or limit. A sale or purchase re presents the payment per unit or multiple of uni.ts of a quantity having a definite or stated extent or limit. The upset price of any quantity is assessed on the value of the article or goods at per unit or multiple of units. The question, however, is what bearing can the mode of sale or exchange of goods for cash have on the ultimate disposal of the cash so obtained or derived. The conclusions to be deducted from the foregoing evidence then shows: —

That the intention of the Act was to provide the payment of half the proceeds from the sale of the-timber to the local bodies. That the intention is borne out by the actual payment to them of “halves” on all sales up to 1913. That the reflus.al to continue the payments to local bodies was the result of a very fine technical interpretation of .the language of the Statute, and it must be particularly noted that the Solicitor-General did not rely on the intention of the Legislature, bui merely on its language as interpreted by him. That the timber cutting operations have been detrimental to the lands in the Thames County. That the value of land has been seriously affected by the deforestation of the ranges. That the liability of flooding has been created and becomes more acute as the vegetation lessens.. That the Thames County Council cannot provide the funds required to maintain or reinstate the tracks and roads in this district. And, therefore, the Thames County Council respectfully submits that one half the proceeds received from the sale of timber under the Land Act within its area from the year 1913 to the present date should be paid to it for the purpose of forming apd maintaining the roads, tracks, and bridges in the area from which the timber was obtained and over which it was transported.