New Guinea

Land-Holding Anomalies In

Plea For Early Re-appraisement and Encouragement of New Settlers

Written specially for “Pacific Islands Monthly” by “Investor,”

I HAVE just returned from a visit to the Mandated Territory, where I had been instructed to seek suitable land for de velopment. My experiences have been in teresting to a degree, and I have be come entirely convinced that, whilst on the one hand there is an exceptional op portunity for profitable investment in primary products in the Territory, on the other, drastic alterations in the present system of land holding are badly needed.

The richness of the land in the Terri tory from an agricultural standpoint is obvious. With this richness, accompanied by abundant rainfall and moderately effi cient native labour, there is ample scope for investment.

But much of the most desirable free hold land is held by men with little or no capital or as dummies for vested inter ests. On approaching the present holders —they will never become owners—one is met with a rabid desire to sell at exorbit ant prices.

The conditions governing the sale of properties are set out in the Treaty of Peace Regulations (46-59) which state that the Custodian of Expropriated Pro perties (in whom all lands under the Mandates are vested) shall not sell to any purchaser other than to: (1) A person who is an Australian soldier or who is a natural-born British subject. (2) A Company registered in Australia, in which at least two-thirds of the shares, issued by the Company, are held by natural-born British sub jects. (3) A Company registered in any part of the Empire in which at least two-thirds of the shares issued are held by natural-born British sub jects.

The properties were sold by tender and duly allotted. The terms of purchase to Returned Soldiers were extremely liberal; 5 per cent, on deposit, 10 per cent, in one month after acceptance of tender, the balance spread over 80 quarterly pay ments. The terms to Companies were 5 per cent, deposit, 10 per cent, on accept ance, 15 per cent, before possession was given, and the balance spread over 10 years with interest at the rate of 6½ per cent, on balance.

So far, so good. As far as can be as certained, little or no enquiry as to the purchaser’s ability to pay were made and the position to-day is not satisfactory.

Of the developed properties, about 98 per cent, were coconut plantations, and, as copra was then bringing from £25 to £35 per ton, with cost of production ranging from £6 to £16 per ton, everybody had money to burn; and many of the “or

iginals” did burn it. Pianos, which rusted in six months; radios, which blasted the ears with static; motor cars with petrol at 3/9 per gallon and a 40 per cent, freight rate from Sydney. Beer at 35/per case and spirits at 15/- per bottle, accounted for much of the profit which should have been set aside against the purchaser’s commitments.

With the depression, hard times came; copra dropped, with other primary pro ducts, to £10-£12 per ton, and less. The settlers obtained a Moratorium of pay ments to the Custodian, but have had to pay interest to the “firms” on monies ad vanced. The majority of the planters are well in debt to the “firms,” who are now practically in possession, with liens on the properties which will never be lifted if prices do not come back and stay back.

Many of these properties are huge do mains, with a fringe of coconut trees, the vast majority of which the Germans planted before the occupation. An en quiry from official sources as to the num ber of acres planted since the occupa tion disclosed a pitiful fraction of the whole. The extent of some of the areas held covers thousands of acres and, in some cases, not a single improvement has been effected.

I have the particulars of one property offered and will quote from the figures given, which were checked, and show a lively desire to make a “pot” and get out with “an unearned increment,” which our single-tax friends so often refer us to: Area tendered for in 1920 —13,000 hect ares (Ha equals 2½ acres).

Actual area by measurement, 22,000 Ha.

Planted on possession, 4000 Ha.

Number Ha. now planted (after eight years) 4127—that is, only 300 acres im provement in eight years.

Purchase price, 2/6 per hectare.

The holder has sold 6,000 hectares at £1 per hectare, all of which was paid to one of the firms “off the loan.” This man has to sell all his copra to the “firm,” purchase all his goods from the “firm,” and, in effect, is a tied man without the capacity, the ability, the desire or the hope of ever doing anything to bring the balance of the land into development of any kind. He is holding (without pay ment during the Moratorium) 10,010 hect ares or 20,525 acres of rich land which should be available for other people who have the desire, the capital, and the ability to develop the area.

This case is typical of many—so many that surely the time has come for the appointment of a Court of re-appraise ment consisting, say, of an experienced administration official, a member of the Planters’ Association, and a representa tive of the Federal Government, who would have all the facts placed before them and the holder should be called on to show cause why the original contract should not be varied. The facts would be (say), “You have 10,000 hectares of land, 1000 under cultivation; you have in eight years planted 10 hectares in coco nuts. You have taken off so many tons of copra. You owe £3,000, which you have borrowed on the security of the coconut trees on the property you have not paid for. The purchase price of the property was £3,000; you have £150.

The Court wants to know: “1. What are your intentions as to de veloping the 9,000 virgin hectares un touched for the eight years you have been on the place?

“2. What resources have you to carry out the development?

“3. Why have you only planted 17 hect ares in eight years?”

In many cases such as this the answers to 1 and 2 would be that he would like to do a lot of things, but has not the money.

In reply to 3 he would probably blame (a) the price of copra, (b) the prices charged by the firms for his goods (high, of course, but carrying the risk of the unsecured creditor), (c) the Government, (d) the lazy native. But he would be silenced if his personal spendings were set out.

The court should then give: (a) full credit for the monies paid: (b) full credit for the improvements made; a reasonable area of virgin land for development in

conformity with the holder’s ability to pay for, take a first mortgage over the place and give the firm a second mortgage as security for their loans; the balance open for sale to new purchasers on easy terms and include the same provision in the contract which was contained in some of the grants made by the German Government, that unless the property was properly taken in hand, cultivated, and properly used, the property would revert to the Crown.

Under this scheme, the settler would be relieved of huge amounts of interest on capital which he will never be able to pay, notwithstanding the tolerant attitude of the Custodian and the Federal Government. He would have a virgin area within his means, and would be freed from the domination of any “firm” and, in many cases, would be able to borrow from the Bank to develop on the security of the mortgage. The firms would have a regularised registerable second mortgage where now they have nothing more than a lien which unofficially the Custodian recognises, but which on test would not be enforceable and would probably be frowned on by the

Government of Australia as against public policy. As it is now the Banks, naturally, will not advance on virgin country oh which no title exists.

The Government and the people of Aus tralia would be advantaged tremendously, as undoubtedly the residues of virgin land would be eagerly taken up by land hungry young men in Australia who ballot on every Crown Land sale and never get a chance; and populating the Islands with new blood would give the Territory the boost it badly needs.

A judicious policy of advances for de velopment in coffee, cocoa, ginger, rice and other tropical products would give a greater return in national wealth than subsidising with relief work, and the dole, young men whose morale is being weak ened day by day instead of being made self-reliant pioneers, who, with ordinary application, would be comfortably off in a few years.

The dummy would be exposed and the real holders, would be forced to develop or surrender. Every settler, planter and official can tell who the dummies are, but nothing is done to shake this incubus off.

The policy of the Government has been that no more land shall be freehold, but held on leases. The Ordinances regard ing leases are very vague especially in respect to re-appraisement. From en quiries made, it is evident that a trap exists for the unwary leaseholders. Jones and Smith, taking up separate leasehold ings can get very different treatment, if Jones puts his back into it and spends money in development, he will be faced with re-appraisement on a vastly dif ferent basis than Smith, who just slouches along and makes a living. There is no equity in making the producer pay heavily and letting the loafer off easily.

It is not to be inferred that the Ad ministration have done this; but there is no protection visible to prevent it being done. In other words, the position in this

respect needs clarifying, as does the free hold position. There should be, in brief, security of holding where there is de velopment and none where there is not.

The position in respect to land tenure is intimately connected with the freight position. The freights and charges are a source of permanent grousing by all who seek to do business in the Territory; but with many thousands locked up in “ad vances” to planters, the firms must pro tect themselves. They are aware that they have an unregisterable mortgage, and, if the Custodian came down on the settler or planter, their “equity” would be value less and the protection is shown in the freight rates.

The vexed question of “native rights” has been largely settled by the common sense and resolute action of the present minister, Major Marr, and to him, the new Council, and the Administration thesq suggestions, outlined herein, are commended. The Territory offers wonder ful possibilities for the establishment of primary production, and every effort should be made to encourage this de velopment, not by harshly treating those who took their courage in their hands in the early days after the war, but by re viewing the position with justice and equity to all concerned. Development is lagging and must be quickened, else we will have no right to hold what we rightly took and what represents probably ail that Australia won, in a material sense, from the war.