The Daily News TUESDAY, SEPTEMBER 10. INFLATED VALUES AND TARANAKI'S FUTURE.
A problem which is a source of serious consideration lor the political economist , is that which relates to the efforts of t the people who are striving to make a 1 profit out of their labor on the land. 1 There is one phase of the problem that is now forcing itself into prominence, ' particularly in Taranaki, and that is • as to whether the price of land that now : rules is justified by the land's producing < capacity. There is far more in this than is apparent to a casual observer. It is practically the starting point of the various data- on which the permanent prosperity of the farming community is based. Nothing is easier than to point to high prices of land as nil indication of the prosperity of a district. It seems such a reasonable argument to put forth that one may almost fear to strip off the outer shell and lay bare the canker hidden from the view of those who only look on the surface of things. Sometimes it is wise to go beneath the gilding and discover the solidity or otherwise of the main structure. Nor need the process be regarded with alarm. Whatever unsoundness may be discovered it is not likely to be beyond remedy, unless allowed to spread to such a degree that dire results will ensue. It is better to prevent than to cure.
We' yield to none in having an unbounded confidence in the future of Taranaki. Taking the prudent middle course between the optimist and pessimist it is not difficult to discover that the chief danger to be guarded against is the undue inllation of land values. Of the settlers themselves the district may well be proud, for they proved their ability Siot only to fight against and overcome obstacles to progress that would have daunted any but the stout-hearteu, but have also ill every department of life's work shown all the qualities that are inherent to the making of a great and prosperous country. Land is worth only what it will produce for the purposes for which it is used. Hence there is necessarily considerable difference in value according to productivity and environment. The disturbing element is what is termed "land hunger." In a new country like New Zealand it is only natural that settlement on the land should be the chief factor in its success. So long as there is a sufficient quantity to go round and supply the desire of the population, well and good. Taken up at prairie value the output will entirely depend on the capital, labor, and skill expended in improvements, plus the quality of the soil.
The success of dairying in Taranaki has now become known everywhere. It has consequently attracted" settlers from within and without the Dominion. Y'ear by year the land in districts served by good roads has changed hands at ever increasing prices—on paper —the advance at times being by leaps and bounds. So long as the present high values of dairy produce and its adjuncts are maintained things will go on booming and land prices mount up. No one of course can lift the veil screening the future, but it does not require the powers of second sight to predict what would happen in case of prices of butter and cheese receding a few pence. Taranaki has had its fair share of bitter experiences. These arc mostly forgotten or become dim memories. Possibly the lessons which these past misfortunes should have conveyed to the community have also been relegated to history. We trust not, for they are pregnant with intense importance, especially in the case where all the eggs are in one basket. There may be no danger of a catastrophe, yet it is as well to remember that the unexpected frequently happens.
The future prosperity of Taranaki depends quite as much on the price of land being confined to its productive value as on the skill and energy of the settlers. The pernicious system of "paper" sales bids fair to create a sorry day of reckoning. Farms change hands continually with but little money passing. This method of acquiring land lends itself to undue inllation of price and practically does away with the means of accurately valuing the actual commercial worth of the land. It affords a fruitful harvest for certain classes of the community, while depriving the purchaser (?) of all interest in his possession except that of having all the hard work that others may benefit thereby, lie is nominally a freeholder, but really a rack-rented occupier, for it almost invariably happens that he has a mortgage, hanging like a millstone round his neck, besides a lien on his cattle and implements. The temptation to give an excessive price when very little lugncy is required to be paid over is very potent, though quite unjustifiable. There is, of course, some laud that in comparison with another is cheap at, say, £3O an acre, while it is equally true that a fairly large quantity of laud now in the market at from £7 to £lO per acre is dear at £5.
Tlib (Jovernmont valuers are not altogether free from blame in connection with unjustified high prices. No doubt they have acted according to cither actual or implied instructions in putting up valuer to the present height, for no sane person would ever imagine that a valuer in arriving at the figure of his assessment takes as basis the nature and producing capacity of the soil. Ilather is the sum fixed to accord with j any recent sale in the district. It is j far easier to do this than adopt any other means, as no expert knowledge is j required, and it saves the time and j trouble which would otherwise have to 1 be spent in carefully examining and appraising every portion of a holding. Occasionally proceedings in the Law ' Courts disclose deliberate aiid not very J creditable means adopted to inilate the ' J va,lue of land merely for the purpose of obtaining a far larger advance on mortgage than the true value would justify. .Frequently this matter of "raising the wind" plays a serious part in over* valuing. As a consequence holders and actual purchasers of adjacent property jtuTcr. The evil is one that should be dealt with ere it undermines the structure on which our prosperity and wellbeing rests. The old saying that a thing is worth exactly whit it fetches is very misleading; as many have found to their cost. We repeat emphatically that the true value of land can only be guagod by its power to respond to' the demands made upon it by the skilled agriculturist or dairy farmer,and should not be based upon the absurd prices Jb.it a man with little or no money and few brains undertakes to give. Just as towns arid suburbs may suffer for many years owing to the fizzled out booms of speculators, so may our rural lands suffer from inilated values and the accumulation of financial plaisters which drain the life blood of the community.
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Taranaki Daily News, Volume L, Issue 60, 10 September 1907, Page 2
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1,190The Daily News TUESDAY, SEPTEMBER 10. INFLATED VALUES AND TARANAKI'S FUTURE. Taranaki Daily News, Volume L, Issue 60, 10 September 1907, Page 2
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