CO129-484 - Governor Sir Stubbs - 1924 [1-7] — Page 169

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HONGKONG LEGISLATIVE COUNCIL

connection. I think some of them have heard of an operation known as "selling forward for March." Well, this operation is something of the same nature. A syndicate of well-known business men in January, 1923, bought a local property for $350,000, subject to a five years' lease. In January, 1924, they paid $200,000 more to be released from that five years' lease. I am not putting forward the figures as absolutely accurate, but, roughly, for the purposes of argument. They paid $550,000 for immediate possession of the land for which they had paid $350,000 subject to possession in five years. That is a pro- portion of seven to eleven. Now, we will take Murray barracks on the same prin- ciple. The sum awarded by Sir John Oakley is $22 a foot. Take off 40 per cent. and, I think, at least that might come off-for roads, the value works out at $34.50 a foot. Well, if we sell that land in four years' time, the value we must get is $57.50 a foot for it when prepared for building. Or, I will take some figures of actual sales which were put before Sir John Oakley. In 1919 the Government bought Beaconsfield Arcade and the buildings upon it for $20.50 a foot. In 1920 the site where the Club Lusitano now stands was bought for $24.97 a foot. At the end of 1921 the old Post Office site was sold for $36.09 a foot, that is exclusive of roads. In April, 1923, Wiseman's site. was sold for $49 a foot.

Take the old Post Office site, at $36.09 a foot. Now the present value, at 7 per cent., if it was to be sold at that rate after five years, would be $25.75 a foot. The present value of the old Post Office site, if it is to be realised in ten years, would be $18.34 a foot. Take Murray Parade ground on the same principle. $22 a foot is the price given. After allowing for roads, the value, as I have said, is $34.50 a foot. Take off the half dollar to allow for Crown rent, which will be reimposed upon the land, that leaves a value of $34 a foot. If we are out of our money for five years we must get $47.69 a foot for it. If we are out of our money for ten years we must get $66.91 a foot for this area.

Our $17.000,000 will not, of course, be spent at once. It will be distributed, as I have shown, over a considerable period of years, but at the same time it must necessarily take us a very long period

to get back that money which we put out. In the 20 years 1901-1920 inclusive, we got altogether five and a half million dollars from land sales. How long will it take us to get back $17,000.000 from the sales of these military lands, apart from the ordinary land sales of the Colony I will read extracts from a statement of the Government's case which was put before the arbitrator.

"Evidence has been called as to the probable period which must elapse be- fore the whole of the land surrendered can be disposed of by sale or otherwise. It has been shown that in the years 1901- 1920 inclusive there were no great fluctua- tions in the sums received from land sales, which totalled in the twenty years ap- proximately $5,500,000. It has been shown that in the years 1921 and 1922 and the first nine months of 1923 the re- ceipts from land sales approximated to a total of $7,000,000. The Government submits that, when the demand of the present boom is satisfied, there is no ground for supposing that receipts from land sales during the following twenty years will be appreciably greater than the receipts during the years 1901-1920.

"Sales during the years after the Mili- tary lands are ready for the market will not be confined to those lands, but will, as heretofore, be spread over areas in all parts of the Colony. A proportion only of the proceeds, namely that part of the money which is received from the sale of the Military lands, will be avail- able for re-imbursing the Colony in re- spect of the cash paid out for Military reprovisioning.

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If, when the land is ready for sale, the Government places any large quantity upon the market at such rates as it will fetch, there will, conditions being normal, be a general slump in land values which will upset all calculations based upon the past records of land sales; which records could not therefore form any criterion as to the values which would be received for the lands in the circumstances sug- gested. If, on the other hand, the Mili tary lands are offered at the prices then prevailing in respect of similar property, the Government contends that all past experience goes to prove that the land will be taken up very slowly and that very many years must elapse before it can possibly recover from sales of the