I.—sa.

Tf. \V. FLANAIiAN.

8

lation in this country having been for some years past to put the whole burden of taxation and rating on land, the time will come when land-values will go down. I think that is inevitable. 23. Do you think it has nearly reached that stage now? —I believe it has in some parts of the Dominion. There are some localities which in my opinion will not stand much increase on present values. 24. Have you any personal knowledge of this Hetana property at New Lynn? —No personal knowledge. 25. You have not seen it? —No. 26. You simply received your instructions from the Lands Department to have a valuation made in accordance with the provisions of the Valuation Act?— Yes. 27. You are of opinion that the valuations made in accordance with the Valuation Act would be higher from the point of view of the State than valuations made in accordance with the provisions of the Land .Act?— There is no doubt about it. 28. lion. Mr. Buddo.] In considering your evidence for to-day's meeting, did you note what prices had been given in the sales of property approximately as near Auckland as the New Lynn property?— The District Valuer has given careful consideration to the sales that have taken place at New Lynn and suburbs of Auckland. 29. In making a comparison there, would you consider that (he valuations you have given to the Committee to-day were approximately on the same basis as prices paid for land, or would there be a deduction for fluctuations in value?— We value on the safe side. All values are subject to constant fluctuation. The District Valuer is familiar with the whole district. He knows of the sales that have taken place. The Department is supplied with information from the Deeds Office and other sources as to what lias taken place and the terms on which the sales have taken place. The District Valuer having this information estimates what are the fair selling-values. The District Valuer's estimate is on the safe side, because to him I entrust the return of values of properties offered as securities to the State Advances Office. 30. Is the allowance- made in this connection much? Does the allowance make it in this case much lower than the actual values ruling in the district?—No, not much, if at all, lower than what might be considered the fair selling-value. Of course, there is a great difference between securities —first-class securities would not ho discounted perceptibly. All estimates of value are, however, hypothetical. But we do not take any risks. 31. Mr. Codtet.] Do the Valuation Department always make these valuations? Do the Lands Department ever make them?— The Valuation Department makes all valuations for State tax, rating, and mortgage purposes, and for nil Departments except Crown Lands, Land for Settlements, and Railways. The Crown Lands Rangers generally make valuations of Crown lands to be opened for settlement. 32. Do they ever make valuations themselves ? Are these valuations accepted by the Valuation Department?—No, they are not accepted without our verification. 33. The Valuation Department always make their own valuations?— Yes. The Valuation Department acts quite independently. Its function is to return fair uniform values. Complications arise sometimes between the Valuation Departmeni and the Lands Department. The District Valuer in the course of his revaluation of a district recently settled lias to revalue land that lias been disposed of by the Land Board .-it a certain juice. On several occasions it has happened that the District Valuer's estimate of the unimproved value of that land is less than the value on which the rental is based. In such instances the lessees are paying more than the market rental of the land, Mid consequently their interests in the leases are reduced by amounts which represent the differences between the existing rentals and the market rentals capitalized at 5 per cent., and these amounts are credited to Crown's interest. This explains why lessees cannot get the benefit of the f'lll value of their improvements when they apply for loans from tho Advances Office. 34. There are therefore two separate Departments?— Yes. 35. You do not accept their values at all?— No. 36. In the cases before us they would be your values ! Yes. 37. Mr. Anderson.] You were dealing with a section which is valued at present at £120, and you went on to say that the" present purchase price is £49 19s. 2d. Then you went on to deal with the whole estate, which you said was purchased at £4,000-odd, and that the present price was £6,000? —£6,165 represents the present value of twenty-four allotments of the Hetana property, which constitutes only a portion of the property. • 38. I did not really follow you there. Then you went on to say that the difference of something belonged to the tenant. What did you mean there? —If you will permit me I will recapitulate what I said. I said, firs! of all, that the Government paid £4,599 for the estate, containing 451 acres, in 1902. Recently we have revalued twenty-four allotments. The average value returned for those allotments is £42 10s. an acre —£6,165. The area covered by the twenty-four allotments is only 145 acres. There .ire therefore 306 acres not yei revalued, and on the assumption that this area is worth the same price per acre —£42 10s.—as the twenty-four allotments, the value of Ihe whole estate to-day is £19,187, an increase of £14,288 on the price paid for it in 1902. 39. Mr. Mac Donald.] The difference between what belongs to the State and the tenant's interest? —There are two interests, the Crown's and the lessee's. All the Crown is entitled to is the present value of the net rental for the unexpired term of the lease—3oJ years—plus the present value of the reversion. 40. Mr. Anderson.] And all the rest belongs to the tenant?— Yes. 41. Take, for instance, a section of 1 acre, in which the State's interest is £42. If a man can sell that outside at £100, he is entitled to the balance as bring his interest in the lease?— Yes. He is entitled to all he can obtain in excess of the State's interest. In the case I have already quoted life original capital value on which the rental is based is £30. The present rental value "is £120.