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5.
In the first place all land in this Colony, with a number of exceptions which persist from the last century is held on short term leases, mostly for 75 years or 75 years renewable for a further 75 years. This arrangement has been found as a result of long experience to be the most suitable method of alienating land as it permits of revision of crown rent from time to time in conformity with market values and the value of money, and the annual receipts from crown rent form an important part of the Colony's revenue. It enables government in case of necessity to resume land more easily and at a more economical price than would be the case if it were necessary to buy back the fee simple and on the termination of the leases to obtain possession without compensation if it so desires.
It also permits the imposition and facilitates enforcement of conditions as to user, maintenance etc. under penalty of re-entry. The fact that there are leases for 999 years in existence has already been found to be an embarrassment in connection with the replanning of the Colony's urban areas.
6.
It is customary when granting land on lease by private treaty to impose certain restrictions on user and particularly on subsequent sale by the lessee. While it is contemplated under the draft Consular Convention that local law and regulations would be enforcible against Consular property, I am advised that re-entry, the chief sanction against breach of conditions, would not be possible in regard to land held in fee simple. Furthermore the Crown Lands Resumption Ordinance would not be applicable to freehold land. Possibly this ordinance could be amended in order to make it applicable and existing legislation regarding building and town planning requirements could be extended to apply to freehold property but so far as I am aware it is not possible to grant land in fee simple while at the same time imposing a restriction against subsequent sale.
7.
I have no reason to apprehend that the United States Government contemplates selling at a later date the property they now wish to acquire, or that they would not develop and maintain the site in a proper manner. I must however point out that circumstances might arise in the future which would cause them to wish to sell. They have already acquired certain leaseholds here by private purchase and if the particular site under discussion is granted to them in fee simple ab initio, or at a later date under the terms of the Consular Convention, they may well ask for these leaseholds also to be converted into fee simple ownership. They have already requested that the crown rents be commuted to a down payment. If later on such properties were to be sold it would mean that transactions in freehold on the open market would commence. I should also point out that while it may be unobjectionable to grant freeholds in particular cases, such as to the United States Government, it would be hard to resist similar requests from other governments and, as always, once a few exceptions have been made, it would become increasingly difficult to avoid further special cases, until the present system of tenure would become seriously prejudiced.
8.
If, after consideration of the above points, it is felt that provision for tenure of land in fee simple covering this Colony must nevertheless be included in the proposed Consular Convention a clause on the lines of the
/attached draft
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