THE PRICE OF LAND.

Putaruru Press, Volume VII, Issue 303, 29 August 1929, Page 4

THE PRICE OF LAND.

IT is doubtful if many people will agree with Captain Rushworth’s contention that the high price of land had nothing to do with the stagnation in land settlement. Nor l ' will many find the arguments on Which' he based his conclusions convincing. It is an economic axiom that money in itself is of no. value. It only acquires value as a medium of exchange. Land in itself is of no value. It is only through the use of it that a value is created. Therefore it may be set out that the value of land is governed by its products, in the determination of which population, location, climate and other things are to be considered as well as. the industry of the occupier. But passing from premises to practical issues the price pf land must be an important essential. It is the capital investment 'of the farmer. He cannot claim to, have made a profit from his farming operations until he has allowed for interest at the current rate on the amount of cash invested in his farm. The lower the price the less capital and the reduction of overhead charges through the smaller amount of interest. If the price of land is above what is considered it is reasonably possible to make it pay, then automatically the demand will cease. It is said that at the present time the reluctance of capital to invest in broad acres is due to the opinion that land is too high in price, unless the covering margin is very substantial. The high price of land originated partly through the high returns from produce in the war boom times. It was caused not so much through the profits made as from the speculative frenzy of “ getting rich quick.” Speculators were camouflaged as farmers: To assert “ that when the price of land was on the up grade ,it was known the industry was prospering,” is to promulgate a dangerous doctrine; one which heeds not the law of. averages nor the force of adverse conditions. The fact that variation of the price of land has not been in accordance with or in ratio to the fluctuations of the purchasing power of the. sovereign is, rather in support of the viewpoint that land values are generally too high, 'and that the Cnuntrv has not yet cpme back to normal from the inflated values of boom times.—Morrinsyille Star.