B.—4a

827. We are of opinion that if the Discharged Soldiers Settlement mortgage work is transferred to the State Advances Office, as recommended later, it will no longer be necessary to maintain two district offices in the Gity of Auckland. 828. We accordingly recommend that the districts be again combined. This should result in a considerable saving of overhead expenses and a reduction in staff. We estimate the saving at at least £5,000. 829. The position in connection with Napier and Gisborne offices is similar to that in Auckland. Originally the Gisborne Land District was included with Hawke's Bay, with a central office at Napier. The subdivision of the district does not appear to have been necessary at the time, and we see no good reason why these two districts should not now be combined, more particularly as there will be a reduction in the volume of work following the transfer of the mortgage work to the State Advances Office. 830. A saving of £2,500 per annum should result from the closing of the Gisborne office. 831. In connection with the Marlborough and Nelson Land Districts, the volume of work in each of the district offices is relatively small, and the Blenheim office should be closed and the district administered from Nelson. 832. We point out that in the Public Works Department the District Engineer's office is situated in Nelson, and he has control of a large portion of the Blenheim Land District as well. 833. We accordingly recommend the closing of the Blenheim office, and estimate this should result in a saving of £2,700. 834. In regard to the amalgamation of offices, we recognize that there may be some temporary difficulties in the matter of accommodation, but it would obviously be to the advantage of the Government to make fresh arrangements for accommodation in view of the considerable savings which can otherwise be effected by amalgamation. 835. In regard to the return derived by way of rents from Crown land, there are many kinds of tenures in force, the principal being — Cash : Deposit of 5 per cent, of price, balance payable in thirty days. Deferred payments : License to occupy for period of thirty-four and a half years. Renewable lease : Lease for sixty-six years, perpetually renewable. (In the case of settlement land the periods are thirty-three years.) Small grazing-run : Lease for term of twenty-one years, with perpetual right of renewal in case land is not suitable for subdivision. Pastoral license : Lease for term not exceeding thirty-five years, with perpetual right of renewal in case land not suitable for subdivision. Education reserve lease : Term usually twenty-one years, with or without right of renewal. 836. Generally speaking, the rentals are assessed as laid down by the Land Act, 1924, and the basis of calculation is insufficient to provide a reasonable return on the value of the land. This is evident from the table given previously, wherein it is shown that, after charging interest at 4 per cent, on the value of the land, there is a debit balance of £55,799 on the year's working. Many of the old leases which are not shown on the above table provide a net rental return of less than 2| per cent, on the capital value of the land. Indeed, up to 1929 the gross rental on some tenures was fixed at 4 per cent., and the net return was as shown hereunder : —• £ s. d. Gross rental return .. .. •• •• ..400 Less rebate .. .. •• •• ..080 3 12 0 Less local bodies' " thirds " for first fifteen years of lease (say) .. 16 8 £2 5 4 837. No remedy is possible in connection with current leases, and were this adverse position confined to ordinary lands of the Crown which have not specifically been acquired by purchase, the position would not be so bad. It is quite evident, however, that under present conditions where the Crown is acquiring land from loan-money, on which interest in excess of 5 per cent, has to be paid, the placing of land on the market, at rentals considerably less than the interest which must be found on the public debt, is difficult to justify. We shall, however, deal with this aspect more fully when considering the operations of the Department under the Land for Settlements Act, 1925, but it should be recognized that if rentals are to be increased in respect of settlement lands acquired by the Crown, there must be a similar increase in respect of Crown lands on the expiration of current leases, except where there is a contractual right of renewal, and this we recommend. 838. We have already drawn attention to the tendency in times of depression for application to be made for revaluation of Crown leases. Indeed, a study of the Land Act will disclose that Crown tenants are provided with ample opportunities even under normal conditions of applying for revaluation, and there is no branch of State enterprise where greater liberality is shown than in connection with land-settlement, and while it is recognized that some_ relief in times of acute depression or natural disaster may be required by Crown tenants, the practice of giving indiscriminate relief in normal times has grown beyond what is reasonably necessary. 839. Provision is made in the Land for Settlements Act for the development of waste lands of the Crown, but this aspect will be dealt with more fully later in this report.

86