[w. LEE.

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to me that they pay land-tax. I understood that there was no land-tax whatever paid on Crown lands. However, I know that I would rather be, a Crown tenant than a freeholder. . I think that is about the only thing I wished to say, speaking as an average working-farmer. I know that the big landowner woulel prefer the income-tax. lam speaking now of the man who owns large tracts of country. The average farmer and his wife, if they make an income, work equally for it, but he cannot make any deduction for his wife's services. The other man —the large landowner—can sit on his farm and his wife can have a good time, and he undoubtedly would prefer the income-tax, as he does not expend very much energy in the production of his income. * Mr. Shirtcliffe.] But why would he prefer the income-tax to the land-tax ? —That is a point regarding which, we incidentally took a vote in our Farmers' Union, It was not taken in earnest, but I counted heads. I noticed that every large sheep-farmer voted for the income-tax, and every working-farmer voted for the land-tax. The men in a large .way voted for the income-tax in place of the land-tax ?—Yes. If it was a question of having one tax, the working-farmer would have the land-tax. On the large landowner, is it not a fact that the land-tax works out at less than the income-tax ? — That is a thing I could not say, because, unfortunately, I have not had a large, landowner's experience. I just go by what I know to be his natural inclination. Mr. Begg.] Were these large farmers leaseholders or freeholders ? —Some of them I know were freeholders. That is not a Farmers' Union matter. It was not an earnest vote, but informal ; and we do not speak for the Farmers' Union at all. We do not come from the Farmers' Union. The Chairman.] You are expressing the views of yourselves and other farmers ? —Take a case in point, that of two farmers living side by side. They both have a farm of the same value. One man sets out to make the most he can. Under the income-tax the harder that man works, the heavier he is taxed. Mr. Shirtcliffe.] That applies to every one ? —The other man can sit back and have an easy time and he can escapie taxation. He does not make anything ? —He does not make anything ; but I think it is better for the country that he should be making something —a great deal better. You agree, do you not, that every one in the country who puts his back into his job, whatever it may be, and endeavours to make a success of it has got to pay tax ? —Yes. Unfortunately, the farmer cannot pass on his tax. He and the salaried man to-day are the only two men in the country who cannot pass it on. Mr. Weston.] Here is what a town -man says on that very point of passing on —a town man who carries on'the business of selling goods : " Whilst on this subject we would like to point to the fallacy that we can pass on taxation to the consumer. This cannot be done, because prices are regulated by competition." And then he goes on to mention how the one-property business, especially if it is a leasehold, is competing with them and, of course, can undersell them ? —I think there is a certain fallacy in that statement. I understand that if the manufacturer in the city finds that imported goods are coming into direct competition and he cannot make a do of it he goes to the Government and he can induce them to put on a little more eiuty to protect him. That is not the case ? —I understand that a duty is put on with a view to protecting the manufacturer. Mr. Shirtcliffe.] But why do you contend that the trader can pass on the taxation ? Is it only an assumption or have you any particular reason for saying that ?—He must do it. Why ? —He can pass it on in this way : The farmer can pass nothing on, because he is the only man in the country in whose case there is no relation between the cost of production and the price he gets for his goods. The business man counts up his wages. He takes his overhead charges. He allows for his own time and his profit, and that is the price to the consumer. With the farmer it eloes not matter if it has cost twice as much to produce, the market conditions may be such when he has got to sell that he gets less than he has paid for the production of his goods. But would you not say that the trader buys and sells to the best advantage ? —I have no doubt. He makes all the profit he can irrespective altogether of taxation, and then at the end of the year when he arrives at his profit he knows that he has to divide that in certain proportions with the Government ? —Yes. He cannot add his taxation on to his costs and increase his selling-price accordingly by reason of the competition. Did you take that view ? —I can see your point, but I can see that a man might arrange that he is protected from competition by an import duty. I do not think you are right in saying that people can always go to the Government and get an increased duty ? —There, is not much, combination among the farmers. The farmer cannot fix the price of his goods. There is no doubt the merchant can fix it by combination. He can fix the price of his goods. Even in professional circles men fix their price. The lawyer tells us what we have got to piay. The doctor tells us. There is no argument about it with them. We have got to pay it. But in the case of the farmer, in the end he has got to take the market rates. He and the salaried man are the only two who cannot " pass it on." The business man, if he has set his mind on a certain profit, can take good care that his profit will be that, subject to the income-tax. You say that the farmers never combine to fix a price :is that strictly correct ? Take dairyproduce —butter and cheese : is there no combination among the co-operative dairy companies and among the farmers to fix the local prices ?—None whatever. There might be among the dairy companies in the cities, but as far as the great majority of the dairy companies are concerned there is no adhesion among them at all as far as the local market is concerned, and there is absolutely none so far as the London market is concerned, I think the farmer is the only man that cannot fix prices. It is impossible for him, With regard to tho dairy companies, Ido not wish to infer that these men

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