The Daily News. WEDNESDAY, JULY. 10, 1012. HOTEL LICENSES.

Taranaki Daily News, Volume LIV, Issue 321, 10 July 1912, Page 4

The Daily News. WEDNESDAY, JULY. 10, 1012. HOTEL LICENSES.

We have a good deal of sympathy with Councillor Clarke's suggestion that the licensing fees for hotels should be very materially increased, for it is mattlr of common knowledge that 'the money earned in the hotel business throughout the Dominion is quite out of proportion to the amount that these establishments contribute to the genera} revenue. We do not for one moment suggest that this money all goei into the pockets, of the licensees, fo« these individuals are really only the chopping block for' orfe of the biggest and most objectionable trusts in the country. It is -well known that three or four firms in the Dominioft control practically three-fourtlis of the hofel i business, and that the licensees tfte merely figureheads, having more ov legi of a financial interest in the premises they occupy.' This, of course, results in the creation of a gigantic monopoly, and has been the means of evolving the wide prevalence of tied' houses and the resultant undue inflating of the goodwill," which is the most striking illustration of the unearned increment to be found in the country. We have in mfhd, as an illustration among many, a hotel, the freehold of'which is valued at £BOOO. With a license, the premises on the open market are worth £IG,OOO. Briefly put, this gives the owner an improvement upon property valued ordinarily at £BOOO of a further £BOOO, for the payment <jf an annual license fee of £4O. This increase is due to the spread of the Prohibition movement in New Zealand and the consequent limitation of licensed houses. The drink bill of the country shows no resultant reduction, and what is really being done is to concentrate the trade in tha hands of the few at the expense of the many. But this abnormal rise -in values is surely a fair subject for taxation in the interests of the general community. The increase is mainly due to the iniquitous imposition of an extravagant charge for goodwill, the bulk of which goes, of course, not to the licensee of hotel property but to the seller. If a tax of 5 per cent, were charged upon goodwill the property we mention would contribute a sum of £4OO annually to the municipal revenue. It is as little as the community should receive. Naturally, the revenue would not be n long-recur-ring one, for the tax would serve to break down the objectionable monopoly that exists, and to reduce the iniquitous charge that is marie for goodwill. This would be an extremely desirable end. At present, with the limited number of licenses available, the supply will not nearly meet the demand, and this results in the payment of nil sorts of fancy prices for hotel property by those who are anxious to participate in the trade. Unfortunately it is the public that suffers. Anxious to recoup himself for his impossible contribution to the maw

resort to nil .sorts of expedients to get back "a bit of liis own" at the expense of the public pocket. We say, with an absolute knowledge that the statement is correct, that in a large majority of the hotels in tlie country the customer at the bar does not get what lie asks for. Cheaper brands of spirits are placed in "case" bottles, and unless the customer happens to be an expert he buys four pennyworth of liquor and twopennyworth of label. Cutting, too, has to be resorted to in other directions, and :so it comes about that patrons of the i average hotel pay a tax that is legiti- ' mately the responsibility of the licensee, but which he in turn has to pass on to the idle monopolist to whom his house is tied. The abolition of the infamous "reduction" issue from the licensing poll has stayed this discreditable state of affairs to some small extent, but it still remains quite o'ut of all proportion. The system of Government inspection which at one time existed, but was allowed to lapse t ( lirougha peculiarly inept administration, should be revived, and at the same time a substantial tax- should" be placed on that vague and uncertain quantity known as "the goodwill." To prevent this charge-beirlg added to the rent a Fair Rent Bill should be passed coinci-

dently. There are people in the country ; who have amassed fortunes simply by ' taking, hotel after hotel and turning them over at a handsome goodwill profit 1 as opportunity offered. Of this unearned ! increment the qominunijy reaps ;practi- ! cally nothing. Did it exist in any other ! business there would be. a howl from one

; end' of the country to the ■ other. The • whole' subject is one that might very ; well he ventilated in Parliament, and it ■ is the strongest possible argument for a ■ system "of State control. In the meantime the public cheerfully allows itself ; to bebled for the purpose of upholding a monopoly, that is as glaring, as it is ' undasirable. ■/ ,