8.—5.

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That is not clone ? —No. The practice of borrowing in London is increasing the producers' difficulties ? —Yes. It just depends how the balance of trade, is. lam not posing as an expert. lam an interested student in these matters, and I am pleased to eliscuss them with you. There: is one thing I should like to mention, though it may be outside; the: scope of this inquiry. I shoulel like you to get expert evidence: on this matter. I refer to the question of reducing the value of our sovereign. In 1816, after the Napoleonic wars, when we had a period eif inflation, that proposal was adopted. They reduced the value of the sovereign. The Chairman.] I am afraid that is outside the scope' of the Commission. Witness : That would get over a lot eif elifficulties. James Carr, Farmer, Methven, Chairman of Methven Branch of the Farmers' Union, examined. 1 have been asked to state that the opinion of the farmers in our district is that our taxation is rather unjust and heavy, with reference especially to the, land-tax on mortgages. We feel that when we have no incemie we should not be called upon to pay taxation, which has been the case with many of us. 1 can quote a case: here that is typical of many in our district. It is a farm that was bought in 1912 at £20.an acre, without improvements except fences. Improvements were: adeied which are now valued at £1,260. The: capital value has increased considerably, The: value of the farm in 1912 was £14 10s. per acre, taking tho average, anel now the, capital value; is £22 an acre. Sei the: taxation has increased considerably. The owner of this farm, on the unimproved value to-day, has only an equity of £1,120 in it. Mr. Hunt.] On the unimproved value ?—On the, unimproved value. Of course, on the improved value he has £2,380. Yet in the last four years he has been callcel upon to pay in land-tax the sum of £355 2s. 7d. When he took possession his first lanel-tax payment amounted to £1 10s. That was in 1.913. In 1914 it rose to £5 18s. 6d., and in successive years it went to these figures :£8 17s. 9d. ; then £70 13s. 3d. for three years. In 1920 it went up to £100 Bs. ;in 1921 it was £92 12s. 7el. ;in 1922, £84 18s. 2d. ; and last year it was £77 3s. lOel. —making a total of £599 6s. Id. paid in the eleven years. Yet that man only possesses an oepuity eif £2,380 on the latest valuation, Mr. Shirtcliffe.] What is the size, eif that farm ?—595 acres. The Chairman.] What form eif taxation for the fanner do you suggest ?—lf the lanel-tax is retained the farmer shoulel get concessions for his mortgages. He shoulel pay on his equity only in the property, or have an income-tax without the land-tax. The, income-tax has two good points, to my mind. The farmer only jays when he makes an income, anel it is an education to him. It makes him keep books that he: would not otherwise keep, and it thus shows him his position. But it has a defect —two defects, to my mind. Many farmers have not hail sufficient education to enable them tei keep books, and they find it very difficult indeed to compile an income-tax return, or even to give proper figures to an accountant to enable him to compile the return. Take, a man who is milking cows, for instance, as lam doing. We have to be up at 5 o'e;lock in the morning, and we do neit finish until 7at night. One does not feel disposed then to go in and write up many eif tho figures eif yeiur transactions. No man feels disposed to work out complicated figures. Many eif them are: not kept. I know that farmers have a great fear erf Mr. Clark and his accountants who come down anel visit them, because, thejy cannot put a proper set eif figures in front of the officials. Anel then there comes another difficulty. A man may make a fair profit, of, say, £1,000 this year, anel he may loeise £1,000 in two siuicessivo yemrs. He pays the income-tax em the £1,000, but he gets no redress for the two years' loss on farming. Mr. Weston : He will under the new system. Mr. Clark : You can carry forward the losses now. Witness : I elo not think the, farmers are aware of that. lam not. Mr. Clark : It is only coming into operation this year. Witness: If we: could be assured that we could ge;t some adjustment eif that kind, 1 think the majority eif the farmers would prefer the income-tax to the present land-tax. I may state another case that was given to me yesterday, that of a young man who hael a farm befeire the: war. He: served for five; years, and ho came back and bought one at £41 an acre. He put the £5,000 that he hael into that. In twelve months, 1 think, his equity in that farm was gone altogether. He has not a penny of it. His mortgage still remains, and he is called upon to pay, I think, something like £130 in land-tax every year. He is simply working to pay interest, and he has no equity in the farm. Mr. Shirtcliffe.] What is the man paying now in land-tax in. the, first instance you quoted ? — £77 3s. lOd. I may say for Mr. Clark's benefit that that man's income-tax was not more than £25 in the good years. His best year was an income of £600-odd. During the war ? —Since tho war. So you can see: that that man is paying more than he ought to pay for the government of the: country. Another thing with respect to the land-tax : the man with a large family who pays indirect taxation gets no redress whatever. Two of my neighbours are men with large, families, having eleven children under eighteen years of age. You can imagine what their taxation is indirectly, and yet the:y have to pay land-tax just the same. Under the income-tax they had some reelress,.but they have not under the lanel-tax. Another form of taxatiem, though I do not know whether you are empowered to deal with it, is the tax that we pay through local bodies to the Hospital and Charitable Aid Board. The Chairman.] No ; that is outside the oreier of reference. Witness : That is all I have, to say.