[Gi As LM'WIN.

H.—42.

70

its full value. I know of one instance in the previous year where we had competition, but there there was that subtle influence due to a licensed house upon the premises. That was a special case, and to show that it is not general in. these records there is the case of another licensed house sold at auction without competition at the upset. Taking the forty-nine cases of renewals extending over the years 1915 and 1916, we find the total cost of renewals, including valuations, advertising, auctioneers' commissions, and legal expenses, amounts to £1,260, or an average of £25 14s; in respect of each lease. The lowest figure is £8 10s. and the highest £62 4s. These figures include solicitors' fees for preparation of new leases. The aggregate, £1,260, is the total cost to both sides. £706 of that falls on the Corporation and £554 on the lessee. We pay all expenses incidental to the auction —that is, auctioneers' fees, advertising, &o. —as we only get the benefit of the auction. £14 Bs. is the average cost to the lessor and £11 6s. to the lessee. Eliminating the shillings and pence the £1,260 is made up as follows: Advertising, £63; auctioneers' commissions and other kindred expenses, £259; valuations, £765; and law-costs incidental to preparation of new leases, £171. Stamp duty is included. Out of that £1,260 the sum of ,-£936 for valuations and law-costs would have to be paid under any system. Then on a percentage basis the cases dealt; with represent a yearly rental of £4,378, or an aggregate rental for the term of twenty-one years of £92,000. The total cost of renewal to both parties was therefore 1,36 per cent, of the aggregate rental, divided between them in the proportion of 076 per cent, to the lessor and o'6o per cent, to the lessee; or, in other words, the cost to the lessor was practically 15s. per annum and to the lessee 12s. per annum in respect of each £100 of yearly rental. Present rental, £363; cost to the Corporation, £29 195.; cost to the lessee, £20 2s. 6d., which, spread over a term of twenty-one years, is a little less than £1 per annum. In another case: Present rental, £123; cost to Corporation, £14 135.; cost to lessee, £10 16s. Another case: Present rental, £207 19s. 2d.; cost to Corporation, £33 145.; cost to lessee, £28 10s. Another case: Present rental, £240; cost to Corporation, £24 3s. 6d.; cost to lessee, £17 9s. 6d. Then there was a small one where the rental was £14 10s.; cost to Corporation, £5 6s. lid.; and to the lessee, £7 3s. 1 have not heard any adverse criticism of the auction system on the ground that a man may- lose the goodwill in a business he had built up, but there lias been a certain amount of contention on the part of the lessees of residential sites that they run the risk' of losing the sentiment, attaching to their homes, but there has been no actual representation made to the Council at all. The buildings on our leases in the business area are substantial brick buildings, up to date, and quite in keeping with buildings erected on freehold property in the vicinity. 1 would quote the Colonial Mutual property' as an example. Then on the residential sites there are some of the very best residences. From indirect knowledge I have I should judge that money is freely lent on these leases. All mortgages have to receive the consent of the Council, and we have been putting through a good many. We have put through some lately at 5_ per cent, interest. Taking it all round the Corporation is satisfied with the existing method. I can hardly speak definitely for the tenants, but I can saythere has been no serious agitation against the system. One hears little simmers occasionally, when the lease is to be renewed, about having to submit to auction, but nothing serious. It seems to me the Corporation has power to grant a lease without submitting it to auction. It would depend upon the policy adopted the Council. 2. To Mr. Milne.] I do not think we have power to pay compensation on the surrender of a lease, but the Council has fairly wide powers. There is power to reduce rent on a special Order. With regard to auction, the whole idea seems to be to give publicity, so that no one may get a bargain at the expense of the public. 3. To the Chairman.] The Corporation does not lay down any basis of valuation which its valuers must adopt in any particular instances. It simply instructs the valuer to proceed under the Aot, and there is nothing more until there is a notification that the award is made. I have never looked into the question of what percentage of rent we get on the capital value. I am sure we do not get 5 per cent. 4. To Mr. Milne.] I do not think we get 4 per cent. 1 could not say definitely whether we get more than 2| per cent. We work our own valuations on the annual value. Of course, there are the Government valuations, which are often very old. 5. To the Chairman.] I can hardly say why a number of the detailed covenants appear in our lease. The covenant to prohibit assignment without consent is no doubt to our advantage : it enables us to know to whom accounts should be rendered. If the tenant were bound to give notice to the landlord of assignment it might be sufficient. I know of no instance of enforcing the covenant to repair. I did not think there was a repairs clause in the lease. We do not worry about insurance. There is no provision for rebuilding in case of fire. Of course, if there is a building on the land there is greater security for the rent. 6. To Mr. Thomas.] The system of rating in Dunedin is on the annual value, including improvements. There is no way that 1 know of in which to test the ratio of rent to capital value. As a pure matter- of opinion it seems to me that 5 per cent, of land which is fixed for leasing purposes is a fail' return. Thai seems to be the standard people set out to get. , 7. To the Chairman.] On the subject of the tribunal my opinion is that Aye are far' better off with three expert valuers than with any tribunal that relies on mere evidence. It seems ■to me to be a very difficult thing to assess valuations upon evidence, as valuation is not an exact science. Ido not favour reference to a Judge in default of an agreement. . ':.$. T° Mr, Milne.] In the aggregate the rents have always been increased at the periods of rest. The increase represents 52 per cent, in twenty-one years. Of course, the increase in some cases is very slight. There was a period in the history of the city when rents were reduced. In the case of an. hotel-site which originally returned £50 a year, on revaluation it comes to £240. In the case of residential sites the increase is not nearly so large. There are increases from £4