J. D. HALL. !

103

8.—5

But it would be fair to take' in all other factors that have contributed to the increased cost, and they might prove to have hael a greater effect upon the increased cost than the income-tax hael. Have you studied the rate' of interest that is current in Australia, as compared with thai, in New Zealand ? Dei you mean the bank rate, no. I only know what 1 have: to pay to-day. I belie;vo lam quite right in saying that it is quite as high or higher than in Australia ?—I understand that the banks in Australia, anel New Zealand are so nearly related that they work in sympathy with one another. We are dependent on Australia's finance to a certain extent. When Australia, is OUt to get a, £19,000,000 loan and Mr. Massey goes out to get a, £5,000,000 loan, the demand for money must affect us. But they have a lower rate eif taxation on companies there, and you would almost think that the rate of interest would be lower also ? But they have the same banks. Well, our New Zealand banks elei not eiperate to any great extent in Australia,, in the way of advances and so forth, except to a small extent. They are purely New Zealand concerns as regards their operations except for exchange purposes. You would imagine the interest rate would be higher here, if your argument is e:orrect, than it is in Australia ? —What is it ? 1 am inclined to think that the; rate, in Australia is slightly higher than it is here. 1 only ask this question in order to try to suggest to you that this statement of youi's requires a good deal of qualification ?— The main statement was not mine ; it was in the' form erf a resolution. Well, I think that requires a gooel deal of qualification. There are: many other factors that require consielcration in regard to the increased cost of production ? —We are approaching a porioel, as far as concerns the, financial affairs of farmers, which is an extremely critical one. We have the moratorium ending at the, enei of the year, and then the farmers will have to rearrange their finance. If the value of their land has gone down they will be: asked to make substantial reductions in their first mortgages, and that will be' impossible in a great many cases. Do you think your suggested alteration in the land-tax will afford them anything like sufficient relief ?—I do not think you can appreciate what a eiifference a reduction of £40 or £50 will mean to a man on the land. Unfortunately, I am interested in a farm, and so I can ? —But you are not on the farm, and you do not know anything of the anxiety of the man on the farm. That is why I say it reflects on their energy. lam sure that any farmer who is intimately acquainted with this question will tell you the same thing. You cannot realize the farmer's anxiety. You probably see farmers in your office occasionally, but you do not realize what their feelings are. If a man on the land has not a certain amount of confidence in his prospects it makes a great deal of difference to the amount of energy he puts into his work. But is the change in taxation going to be sufficient to relieve him of that anxiety ? —lt is certainly going to help him. Mr. Begg.] You believe, that farmers' inceimes should be assessed at a conventional rate ? —I have never heard of that expression : I said "an arbitrary rate." Mr. Clark would have some power to deal with the assessments. But you believe that the Commissioner could not arrive, with reasonable accuracy at a farmer's income ?—lf Mr. Clark is able to get all the returns he could. But do you believe it is possible to get accurate returns ?—I am rather inclined to think it is, but it will take some time. The Chairman : But Mr. Clark is satisfied that it can be done. Witness : But Mr. Clark is getting returns from only 2 or 3 per cent, of the farmers. Mr. Clark : More than that. Witness : But I mean a good businesslike return. But lam inclined to admit, that if Mr. Clark e:an get good businesslike returns from farmers it will be unnecessary to insist on the: arbitrary assessment of incomes. Mr. Begg.] You are of opinion that if wheat was at 7s. per bushel and large quantities were being grown by farmers, Mr. Clark would know that the farmers were: making good incomes ?—I mentioned that. Do you consider that the sale erf wheat at that price would represent; a profit, taking into consideration the possible expenditure: and the actual cost of ploughing ?—No. Is it possible to ascertain how much of that is profit and how much is capital ? —T do not know. I was twenty-five years in an office running trust accounts, and we all had different ways of running the, accounts. Ido not know how it is generally done. Have you known farms ruined by cropping ? —Yes. You know that there are large areas in the world abandoned after being cropped for many years ? -That is so. Would not all the, returns from those farms that were abandoned figure as income ? —Well, there would be a sort of diminishing scale. But it would be assessed as income until the farm was abandoned. Would it not be capital anil not income, and cannot the reverse process be carried out ?—You cannot go on increasing - Yes, you can go on increasing. You can bury your income in the land and it could not be ascertained ?—Yes, that is so ; it is geiing on to-day. Then one cannot quite exhaust the whole fertility of the land. If a man's returns diminish to the point of his expenditure, while; another man buries his profit, elei you still consider it possible: for the Commissioner to get at the incomes from farms ?—Yes ; it is done: in England. Would it not be, safer to say that; if has been attempted in England, rather than it has been done ?- -1 know it has been attempted. 1 weiuld not like to say what has been elono. Mr. Weston.] On the question of the wheat-farmer, the position of the wheat-grower in North Canterbury is not peculiar to him ? •— The wheat-growing area of New Zealand is North Canterbury plus a small portion of North Otago.