118 ANNUAL VALUE 



tion by a number of holders. The total out- 

 put of the estate will be very largely increased 

 and the profits in ratio. Many occupiers con- 

 centrating their capital and energy on a few 

 acres apiece can pay a larger annual sum in 

 reduction of debt than a single occupier of the 

 farm engaged in extensive farming. If the 

 large tenant farmer can afford 4 per cent, on 

 the value of his holding to provide the annual 

 instalment for sinking fund and interest, the 

 small owners can without difficulty pay 5 per 

 cent, on the cost of their land. The difference 

 is the value bought wholesale and the value 

 sold retail. The mortgages at Maulden bear 

 interest at 3 per cent., but the State at the 

 present time could not lend money at a lower 

 rate than 3j per cent. Calculating the annual 

 instalments for interest and sinking fund on a 

 5 per cent, basis, a purchaser would acquire 

 the absolute freehold of his property in thirty- 

 five* years, representing 3 J per cent, for in- 



* To be acceptable the yearly payments for sinking fund 

 and interest, both in the case of a tenant farmer and of a 

 small owner, must not exceed the fair annual value of the 

 land. This determines the period of loan. Thus the 

 instalment per annum on a holding worth twenty years' 

 purchase of the annual value amounts to 5 per cent, on the 



