56
3
or
take a very large part of the value in the form of "premium" 11 "purchase price" whatever one liked to call it. Accordingly, it was not contemplated that the lease of an area in the City of Victoria would be renewed merely on an increase of the Crown rent to the current $1,000 an acre per annum (which was the standard rate for the whole City of Victoria), because that sum did not represent anything like the value of the land. If no premium were charged, $1,000 for Crown rent would be a ridiculous figure in respect of land selling for $50 a foot.
When the later announcement of policy was male in 1925, there was no departure from the principle that the increased value of the land would have to be paid for on renewal of the lease, but it was then for the first time proposed to take part of that value in the form of a fine or premium, representing the balance of the value after the Crown rent had been increased to the current standard level.
In some ways it was a matter of indifference to the Government whether the renewal value was taken in increased rent or in premium. In 1898, when the Secretary of State's Instruction was promulgated, it was apparently contemplated that the whole of the renewal value would be taken in increased rent. In 1925, it was contemplated that there would be only a small increase in the rent and that the remainder of the value would be taken in premium.
Speaking for himself, he did not see why the Government should not take the whole of the renewal value in Crown rent. The under- lying reason for that (if a reason were wanted) was that, in 1898, or just before that date, the Colony paid a fixei military
contribution and not a percentage. Crown rents were afterwards included in the revenue for the purpose of assessment of military contribution and therefore successive Colonial Treasurers saw that it was to their advantage to take a small Crown rent and large premiums, because the latter were not assessable to military contribution. Now that the Colony had gone back to a fixed contribution, it did not matter which way renewal payments on leases were arranged.
The Hon. Mr. Caine went on to say that the Instructions issued in 1898 were intended to cover the terms upon which renewals should in due course be granted under the 75 plus 75 year leases which were then being introduced as the standard form. The Land Officer had always regarded those Instructions as having no re- lation to the terms of renewal of leases then existing, for 75 years only.
Sir Vandeleur Grayburn asked what was regarded as a reasonable increase of Crown rent.
The Hon. Mr. Caine: That depends on the property and the erea in which it is situated.
The Chairman said it struck the Committee as method of defining the areas when one paid just as much for rent a very curious in Nathan Road, Kowloon (a main thoroughfare) as in Canton Road, Kowloon (a poor neighbourhood).
The Hon. Mr. Caine: You do not in fact pay the same. You ray your Crown rent and then you pay a premium of $10 or $50 a foot Eccording to the real value of the land. It is in that way that differences in value are adjusted. Crown rents are fixed well below the true value of the land.
Mr. Richardson (in reply to the Hon. Mr. Caine) said that in the United Kingdom ground rents were considered to be well secured at one-fifth of the full rental value. If a house was