32 /. E. Le Rossignol and IV. D. Stewart 



crease rent, but, on the contrary, as the tax becomes heavier, it 

 tends to bring into beneficial occupation land not put to its best 

 use and so reduces rent, the improvements being entirely free 

 from all rates and taxes. In some cases where land suitable for 

 building sites is limited high rents have been maintained, notwith- 

 standing the tendency of the system. 



"Vacant Sites: The effect has been to cause vacant sites being 

 put to their best use by expenditure on improvements. On vacant 

 sites the rates and taxes are increased and continue to increase as 

 the adjacent sites which have been improved increase in value. 

 It thus becomes unprofitable to continue to hold land unimproved. 



"Incidence of Taxation: The taxation, on building property, 

 where the improvements exceed the unimproved value, is de- 

 creased ; where the unimproved value exceeds the improvements 

 the taxation is increased. 



"Land Speculation: The tendency is to discourage speculation 

 as the tax partially or wholly discounts the rise in value, but land 

 speculation has not ceased in some districts where the system has 

 been adopted, because : 



"(i) The tax has not been sufficient to render speculation un- 

 profitable in the large cities, though it has been a factor to be 

 reckoned with. 



"(2) The rapid increase in values has caused speculation in 

 spite of the tax. 



"In my opinion the exemption of all improvements (in con- 

 junction with the Lands for Settlement and Advances to Settlers 

 policy of the government) has to a large extent contributed to 

 the solid prosperity of the Colony." 



Before the government's report was accessible the present 

 writers made a similar investigation by means of a series of ques- 

 tions sent, in December, 1906, to the clerks of all the local bodies, 

 69 in number, that had adopted the Act. Forty replies were re- 

 ceived, of which 35 gave fairly satisfactory answers. The ques- 

 tions and a summary of the replies are here given : 



1. Has the system had any marked effect in discouraging the 

 holding of land for speculative purposes? Yes, 12; no, 19; in- 

 definite, 4. 



280 





