THE PROBLEM OF CLOSER SETTLEMENT IN VICTORIA

THE PROBLEM OF CLOSER SETTLEMENT IN VICTORIA

I. 11.

IIX. IV.

Pre-War Closer Settlement under the Acts of 1904 and 1909. Post-War Developments-( a) Soldier Settlement; (b) Closer

Reconstruction-The Act of 1932. Liquidation-The Work of the Closer Settlement Commission.

I Closer Settlement policy in Victoria, as a matter of Govern-

ment concern, originated in the late 'nineties. It aimed a t correcting the drift of population not merely from the land in Victoria but from the colony itself.

But it is really with the Act of 1904 that pre-war Closer Settlement begins. A Lands Purchase and Management Board was set up-a part-time Board. Its functions were merely to fh the values of estates, to allot re-purchased land and to receive payment for it. The initiative and ultimate power remained in the hands of the Minister, a feature which has persisted until recent times, and has been one of the main weaknesses of the Act. The expenditure of €500,000 a year was proposed.

The land repurchased W R S to be subdivided into (a) farm allotments of a maximum value of €1,500, or (b) agricultural labourers' allotments to consist of not more than €200 worth of land, or (c) workmen's home allotments of €100 in value. Up to an amount of €50 was made available on a € for E basis against improvements put on the land of agricultural labourers, but this was the only provision for farm advances in the Act. The period of payment for blocks purchased from the Board was fixed a t 368 years and interest a t not less than y per cent. was charged. The conational purchase leases made residence for eight months of the year compulsory and provided for certain improvements being completed within the first six years. The Crown Grant was not to issue for twelve years. Clause 3 of this original Closer Settlement Bill specifically excepted the Mallee from its operation and Murray, resisting an attempt to have the clause struck out in committee, emphatically declared that the Mallee was unsuitable for closer settlement'.

The net result of the measure was to place the Minister for Lands in charge of Closer Settlement operations with a part- time Board limited in scope under him.

It has been remarked that there was no provision in the Act of 1904 for advances to holders of farm allotments. I t was not

Settlement.

57

58 THE ECONOMIC RECORD JUNE

long before assistance was forthcoming. An amending Act of 1906 provided for the erection of dwelling houses and the making of improvements by the Board on farm allotments up to an amount of 5230. Twenty years were allowed for the repayment of the amounts expended in this way by the Government. I n the course of introducing a further amendment in the next year the Minister for Lands (J. E. &lackey) said that it had been found that some of the best tenants spent all their own money on improvements and stock. It was proposed to make advances to such settlers on a 60 per cent. basis against their improvements. These advances were to be used for carrying on farming, grazing or horticultural pursuits on the land and adding to improvements. They would bear interest a t 5 per cent. per annum and be repayable by equal half-yearly instalments spread over not longer than 16 years. Until paid the advance was to be a charge upon the land and the lessee’s interest therein.

Under the Act of 1904 and its amendments from September 25, 1904, to June 30, 1909, some 680 estates were offered and considered by the Government, but only 40 had been purchased and just on S1,500,000 expecded by that date. The lessees numbered 1,645, owed €1,344,395 for land and had received E45,565 in advances of which less than one-sixth represented advances t o farm lessees under the Act of 1907.

The JIurray Government, which controlled Victoria’s destinies in 1909, mas not satisfied with the extremely slow rate of settlement under the Act of 1904. The Premier admitted in the House that the policy of Closer Settlement had been, to a great extent, a failure. His Minister for Lands (Hugh McKenzie) found in Elwood Nead (Chairman of the State Rivers and Water Supply Commission) an energetic advocate of irrigated closer settlement. It was the thesis of Mead that only by means of closer settlement in the irrigated areas could the expen- sive water provision schemes be put upon a payable basis. It is fair t o add that all he wished the Government to do was to demonstrate the possibilities-not to burden itself with a perma- nent scheme of closer settlement in these areas.

The Government also resolved upon a policy of making advances to settlers going upon the land more in line with the system practised by other States. Victoria, it was felt, must make her conditions of settlement a t least equally attractive. A full-time Board was provided for in the Bill introduced by XcKenzie in July, 1909. Like its predecessor it was placed under the control of the Jfinister, who, however, indicated that the intention of the Government was that the Board should

1936 CLOSER SETTLEMENT IN VICTORIA 59

control the advances without any interference on the part of the Minister. Large scale activity was contemplated by the Government-a definite " forward " policy. Assistance to the man going on the land in the initial stages was held to be essential. This was to be given on a 60 per cent. basis up to €500, fifteen years being fked for the repayment of advances which were limited to an amount of €200,000 in any one year. The change in values since 1904 was met by providing that the Board should give lessees farm allotments of €2,500 worth of land in place of €1,500 worth. Straight-out compulsory purchase by Gazette notification and submission of the landowner's claim to a Supreme Court Judge sitting as a Compensation Court was a feature of the Bill.*

The fact was recognized by some members outside the Government2 that in putting practically penniless men upon the land, and aiding them with State advances, Victoria was taking a considerable risk of losses. The question was whether the estent of settlement achieved would make up for the burden placed on the taxpayers of the State. Everything depended upon, the land being suitable and the settlers energetic and adaptable in order to minimize the probable losses involved. The view of the Government was that Closer Settlement had now passed beyond the expqrimental stage and that it was necessary to " liberalize " the Act in order to accelerate settlement. I n the Council the Attorney-General (Hon. J. D. Brown) scouted any chance of political influence being brought t o bear upon the management of this work

The Board, in addition to administering Closer Settlement, had to take over the badly broken-down Small Improved Hold- ings scheme, certain parts of the Land Act in relations to advances to lessees and licencees, and wire netting advances formerly under the Vermin Destruction Act. Great activity in irrigated closer settlement succeeded the passing of this measure but the Board and the State Rivers and Water Supply Commission did not see eye to eye in its administration. This divergence of view brought about another amending Act in 1912 which transferred the control of settlers in the irrigated areas from the Board to the Commission for the first six years of their leases (that is, their improvement period). It also extended the period of payment for the land from 363 years t o 41. An attempt was again made to pass drastic compulsory provisions but once again the Council stood in the path.

1. The Council rejected them c l a w . 2. See upeach of J. E. (the late Sir John) Mackey, 1909 Victorian Parliamsntaw

Debate., p. 1.126 to p. 1.131.


During this period, from 1909 to 1914, the total amount of land purchased increased to 453,413 acres in the dry areas and 110,801 acres in the irrigable areas, costing altogether E4,20P,235,3 the number of lessees being 2,579, and the advances t o Closer Settlement lessees totalling B65,457. The arrears on Closer Settlement land and advances amounted as a t June 30, 1914, to over 2219,000. There were in addition 535 holders of agricultural labourers’ allotments, advances to whom are included in the total given. €516,269 had been repaid on account of principal.

A Royal Commission was appointed by the Watt Govern- ment on March 30, 1914, after it had been alleged in Parliament that the Government’s Closer Settlement policy had broken down. Every phase of Closer Settlement was considered by the Commission, which mas forced to the conclusion that in the dry areas there had been an almost fatal breakdown of the policy while in the irrigable areas it had fallen fa r short of the promises made by the State Rivers and Kater Supply Commission (i.v., Mead).

The main causes of the breakdown were espressed by the Commission to be threefold. Unsuitable land had been purchased, areas which were far less than living areas had been allotted to settlers, especially in the dry areas and, finally, men without adequate means had been placed on the blocks. Heavy arrears had been allowed t o accumulate. The Board, which had been administering Closer settlement since >larch 1, 1910, came in for such severe condemnation by the Commission that the Government hastily replaced it by a departmental board (during Sugust, 1915). The Commission announced that i t was forced to the conclusion that the increased settlement under the Acts of 1904 and 1909 did not justify the expenditure which had been incurred. As it was put in the Legislative Council on August 7, 1918,’ “ closer settlement had been a costly failure from beginning to end.”

I1 (a) Soldier Settlement

During the war period closer settlement may be described as being in a state of suspended animation, though the prospects for it daily improved as a result of the European food shortage.

3. The total amount of land parchased an at 30 /6 /09 w u 236.829 acr- at a c w t of €1.839.766 and the advances to C.S. lasea. who numbered in a11 1.616. btaUed 46.566 (of which only E6,026 WM to farm lessees).

4. By the Hon. J. D. Brown. when he warned the Government against repeating the miataka of their Closer S e t t l e e n t policy in their Discharged Suldier Settlement Iepislation.


When the armistice released shipping in some measure for food transportation an immediate '' boom " in primary products fol- lowed. The repatriation of soldiers was a Federal matter, but the placing of them upon the land became one for the States. While, in view of the concessions and privileges granted to the soldier settler under the Discharged Soldier Settlement Acts of 1917 and 1918, it was impossible to treat the scheme as one to be carried out on strict business lines, it was for a considerable time apparently believed that only a minimum of loss need be incurred.

The main legislation under which Discharged Soldier Settle- ment was deevloped mas the Act of 1917 supported by an additional measure in 1918. It was estimated that the number of returned soldiers who would take up land in Victoria would not exceed 6,000.' Power was taken to purchase land for the returned men as well as to make Crown lands specially available. Provision was made for advances up to f500 to every soldier settler. There mere two special features in connection with such advances. Interest commenced a t the low rate of 33 per cent. for the first year, increasing 4 per cent. per annum until the ruling rate of interest was reached. The loss due to this concession was borne equally by the Commonn-ealth and State Governments. Furthermore, instead of being limited to 60 per cent. of improvements as in the case of closer settlers, the advance was to the full value of improvements, a t a time, be it remembered, when the cost of all materials was abnormally high. Share farmers were granted advances of €250 for the purchase of stock and implements. Local committees were appointed to assist in the purchase of land, a policy which created considerable delays and possibly did not result in only the best land being purchased. For the first three years no instalment of purchase money, interest or rent was payable by a returned soldier. This was to give him a chance of getting upon his feet before being required to make payments. Compulsory purchase was provided for and power taken to increase Victorian Government Stock by €2,250,000 over a period of 3 years.

The returned soldier had to go before a Qualification Com- mittee, which mas supposed to satisfy itself that the men were likely to succeed.6 Under, the Act provision was made for training the intending settlers, to the cost of which the Com- monwealth agreed to contribute one-half. In the rush of selec-

6. The actual number of returned soldiers rho applied for Qudiflcation Certffl-

6. Note the high proportion of cert i6uta granted: 16.650 out OK 21.087 caten

applications.

21.087, of rhlch 16.660 had them prmted.


tion after the cessation of hostilities in Europe and Palestine this attempt to secure trained farmers could not be sustained.

The Act was passed mainly because the Government wanted to stimulate recruiting. No new machinery was created under the Act to administer it. The Lands Purchase and Management Board existing under the Closer Settlement Act mas utilized, and in irrigable areas the State Rivers and Water Supply Com- mission as under the Closer Settlement Act of 1912.

A t the end of the year 1918 a further Discharged Soldier Settlement Act of a liberalizing character was passed. The advance of €500 was estended to soldiers having their own land or entering into agreements to purchase land. The advance of 2250 to sharefarmers was extended to leaseholders. Some attempt was made to meet the loss occasioned by concessions by providing for an annual appropriation of $50,000 (later increased to €75,000) to be paid into a Discharged Soldiers’ Concession Fund. Advances up to €1,000 were provided for, after six years occupation of holdings, on the 60 per cent. basis of the Closer Settlement Act, and the amount to be borrowed mas increased to f4,000,000.

The mistakes of pre-war Closer Settlement could not have been more faithfully repeated. Areas which were barely large enough in view of current inflated prices for primary products were given to the returned men with the consequence that they soon ceased to be anything like living areas. A Royal Commis-

has placed on record that the prices paid for the land were not too high. They may not have been in view of current land values but Mr. Justice Pike has not indicated the proportion of suitable land purchased, which must have been very low. Most of the land was bought a t the (‘ peak ” period of values and finally the men were inexperienced and, in most instances, without means (for which an advance of €500 could not compensate). At first, too, the Board was induced to buy single properties for returned men wherever they might desire to settle. This was found, as under a similar provision of the Closer Settlement Act 1904,* to work very badly and from 1920 a policy of buying large estates was adopted.

For the first year or so p r i m for primary products were maintained but returned soldier settlers were not required to make any payments, the State carrying the burden of interest payments for the first three years. This was demoralizing and gave an undesirable sense of freedom from obligation to the

I. Mr. Justice Pike, in 1929. Sce Economic Record, Nov.. 1929. UP. 337339. 8. Which bad been condemned by the Royal Commission of 1915-17.


settlers. Then, when prices had fallen and difficulties began t o beset the scheme there was a marked distaste upon the part of politicians to face the position. The returned men were granted further concessions without discrimination as to which were likely to succeed or not as, for example, under the amending Act of 1922 which extended the advance limit to €1,000, and in suspending payments by soldier settlers in 1923. The total arrears on Soldier Settlement as at June 30,1923, were €2,083,625 which speedily increasedlin two years to €4,227,064." At that date just over E13,000,000 had been spent on!and, an average price of E7/11/- an acre having been paid for 1,730,580 acres and €5,342,000 had been advanced to soldier settlers. There were 8,141 farms settled, of which the average area was 267 acres and the average capital value €1,637.

At this stage, it would have been well, it is clear now, to have had a stock-taking and considered what should be done with those soldier settlers who were not paying their way, or at all events making a reasonable effort to do so. But it was recognized that, in the majority of cases, it was not the fault of the settler that he was in arrears but the result of the system. Instead of grappling boldly with the problem successive Govern- ments adopted a policy of making further concessions, of capitalizing the arrears and extending the period of payment of purchase money and repayment of advances as in the case of the postponement of payments under the amending Act of 1925.1° This did not relieve the situation very materially, and had a bad effect on the better class of settler, who saw his less- worthy neighbour receiving concessions which he knew to be undeserved. The policy had an unfortunate effect upon the development of the whole scheme since laziness and extravagance seemed to be better rewarded than hard and economical working of one's holding.

(b) Closer 8ettZement Even at the stage of these unfavourable tendencies, when

arrears were accumulating a t an alarming rate, we find the Victorian Government ready to enter into Migration Agreements. So the margin of settlement was extended t o the new Mallee and the mountainous districts of Gippsland. I n the case of the former it was a great gamble with the rainfall and with the price of wheat. I n the case of the latter it depended upon a settler being able to find enough good land in a geologically interesting holding to eke out an existence. It is no wonder that Victoria

9. AU at ~I/IZ/IQZ~. 10. Seetiona 12 and 13.


found herself unable to settle the 10,000 persons optimistically referred to in the speech of H. S. W. Lawson (Premier) in the Assembly on July 31, 1923, and that the 2,000 settlers contemplated fell away to some two or three hundred, most of whom were so dissatisfied with their prospects and so misled, inten- tionally or otherwise, by the State’s representatives, that they had to be compensated and repatriated.

The legislation under which post-war civilian settlement was carried out was the Closer Settlement Act 1918. The Act of 1918 changed the name of the Board (appointed August 14, 1917) administering closer settlement to The Closer Settlement Board, ” extended the borrowing powers, introduced compulsory purchase by executive act (which has seldom been invoked), modified in several wars the residence conditions and gave the Minister the power to control advances instead of the Governor- in-Council as under the Act of 1909. Twenty years mas made the general period for repayment of advances. A further provision was to the effect that where the whole or part of an advance had been repaid the Board might make another advance u p to €500, or €1,000 in the case of grantees. The old Section 79, which had been a bone of contention for many years, restricting the right of the grantee to transfer his holding, was repealed. I t was claimed by the Lawson Government which passed this Act that it put into effect the recommendations of the recent Royal Commission, so far as this was considered wise and practi- cable in legislation, while other recommendations had been given effect by administrative act. The Board system of administration, which had been condemned by the Royal Commission, was preserved. Out of the 69 recommendations of the Commission, 53, said the Minister for Lands (the Hon. Frank Clarke), had been adopted by administrative act or were embodied in the measure. The total writings off under prewar closer settlement were just undPr €200,000, and the post-war period of higher values enabled the Board to dispose of much of the land previously left on its hands, either to Discharged Soldier Settlement or to civilian settlers. The writings ob mere, to a great extent, met by the Board’s saving €10,000 a year out of the margin between interest charged and interest paid plus administrative expenses. From 1904 to June 30, 1918, just over €4,200,000 had been spent on acquisition of land and advances made totalled €977,884, while axrears of land and advances stood a t the high figure of S531,913.

The fact that soldier settlers received advances to the full value of their improvements was judged a justification for


increasing the extent of advances to closer settlers from 60 per cent. to 80 per cent., and other concessions made to soldier settlers had t o be made to civilian settlers (as, for example, in the area of grazing land that might be held, to €3,500 worth). Closer settlement arrears a t June 30, 1923, stood' a t €515,000, notwithstanding a period since 1915 of relatively high prices for agricultural and horticultural produce.

The present Federal Attorney-General (Hon. R. G. Menzies) seems to have put the position quite frankly and fairly in his speech in the Victorian Legislative Council on July 24, 1929, when he referred to the financial laxity of Victorian land settlement administration. Susceptibility to political influence has undoubtedly played a leading part in intensifying the difEculties of State-aided land settlement. It has led to a persistent refusal to we the true position when &airs began to get into bad trim. It has been behind the policy of making further concessions to good and bad settlers indiscriminately." But at the same time, it must be recognized that the mistakes indicated as highly damaging to pre-mar closer settlemen-buying of unsuitable land, splitting up of the land into less than living areas and attempting to make farmers of men with insuEcient means or no meanohave been repeated in the cases both of soldier settlement and post-war closer settlement.

Up to June 30, 1932, the number of returned soldiers who received assistance inclucling lessees, sharefarmers and settlers who merely received advances, was 11,410. The number who had repaid their obligations in full was 545 (of which 381 were sharefarmers). The number whose leases were cancelled was 4,583, while 628 were transferred or surrendered. The number of soldier settlers receiving assistance at that date was 5,654 (4,528 on dry areas and 1,126 on irrigable areas). 1,763,238 acre9 of private land had been purchased at a cost of €13,361,211 for soldier settlement. The original principal liability of soldier settlers for land, advances and consolidated debts (i.e., arrears of interest and principal) was €25,683,471, of which €889,846 had been written off and 55,784,444 had been repaid, leaving balance outstanding €19,039,181.

From the inception of closer settlement in 1904 to June 30, 1932, the number of closer settlers who had received assistance was 16,529. Of these 4,066 had repaid their obligations in full, 4,021 had had their leases cancelled, 303 had transferred or surrendered. At that date 8,139 were receiving assistance (5,979 on dry areas and 2,160 on irrigable areas). At a cost of E6,069,675

11. The Board itself in I t . Report for 198041 nude a Mated protmt.

E


819,340 acres had been purchased from private owners. The original principal liability for land, advances and consolidated debt was €14,841,051, of which €267,824 had been written off and €4,401,756 repaid, leaving the balance outstanding a t €10,178,471. The total outstanding on both accounts was €29,217,652.12 The cost and concessions made up to June 30,1932, in connection with soldier settlement amounted to €8,550,253 of which the Com- monwealth Government, under various agreements, concluded between it and the Victorian Government, had contributed f3,932,153, so that the State had to find €4,618,100. The loss on writings off, and reductions of value, depreciation and administration of closer settlement to the same date was €764,416. In addition repayments on account of principal had been applied to payment of interest and administration expenses-in the case of soldier settlement to the extent of €4,259,069-in the case of closer settlement to an amount of €1,088,077. The arrears (notwithstanding frequent extensions of the periods for payment) stood, on the same date, a t : Soldier settlemept, €3,645,420; closer settlement, €2,676,601. The era of low prices for primary products had intensified the drift.

I11 The Closer Settlement Act of 1932 did away with the system

of a Board under Ministerial control and substituted a t this late stage of the day an independent Commission, which has been for the past three years endeavouring to find a way out of the financial labyrinth into which both soldier settlement and closer settlement had' drifted during the past six o r seven years. The Commission has, by virtue of the Act, a four-fold task:-

(1) To grant further areas of land, even in excess of the mwimum value prescribed by the Act to make up living areas.

(2) To substitute a new annual liability in respect of land and advances for existing liabilitiea in the case of lessees under the Acts (as consolidated in 1928) and

12. Made up aa follows:- DISCHARGED SOLDIER

SETTLEMENT Land . . . . . . . . . . . . €10,884.830 Advsnccs . . . . . . . . . . 3.754.240 Coadidated Debt . . . . . . 4.390.111

E 19,039,181

CLOSER SETTLEMENT Land . . . . . . . . . . . . €6,562,397 Advmnas . . . . . . . . . . 3.612.607 Consolidated Debt . . . . . . 5.467

E 10,178,471


Land Act lessees and licencees who have received advances under the Acts, all instalments being suspended and the lessee or licencee being required to pay half-yearly at the rate of 14 per cent. per annum in reduction of principal together with interest at 5 per cent.13

(3) To adjust annually the liabilities of settlers for a period of five years from July 1,1932. In making such adjustment the Commission is bound by the Act to have regard to-

(a) ruling prices of farm products; (b) seasonal conditions ; (c) requirements for the maintenance of such

(d) the means and ability of the settler to make

(e) the efforts made by such settler to meet his

( f ) any othei factors which the Commission may

Where the amount as adjusted is less than the settler would otherwise have to pay the difference is to be written off.

(4) At the end of the five years of annual adjustments, that is to say, on June 30, 1937, or as soon thereafter as may be, the Commission has the task of having each settler’s land and improvements (other than those made with his own moneys) valued, and if the value is less than the capital value a t which the land was disposed of under the Act, the amount of advances and the arrears of interest in respect of such land and improvements, the d8erence shall be mitten off and the settler’s liability reduced accordingly. But it is provided that if the Commission is satided that the value of the land and improvements has been adversely affected by the failure of the lessee or licencee to work the land or maintain the improvements in a proper manner it may reduce the amount to be so written off.

The amount to which the settler’s liability has been thus reduced shall then be reviewed and, if the Com- mission thinks fit, further reduced and more writing-

settler and his family;

any adjusted payment;

liabilities ;

think proper to be considered.

18. Reduced to 4% per e n + by the Government Advanea (Reduction of Intercat) Act 1984.


off may take place. The Commission in reviewing the reduced liability is to have regard to-

( a ) Any amounts previously written off; (b) efforts made by the settler to meet his liabili-

(c ) requirements for the maintenance of the settler

(d) any other factors which, in the opinion of the

The amount to which the settler’s liability has then been reduced is to be further reduced by the total amount of principal which such settler has paid in respect of land and advances and this h a 1 amount shall be deemed t o be the liability of the settler in respect of the land and improvements.

Provision is also made for a review of the outstanding liability for advances under the Closer Settlement Acts or Cultivation Advances Acts or Wire Netting Acts (both of which last-mentioned pieces of legislation are placed under the Com- mission’s administration by this Act of 1932) and they may also be reduced: and mi t ten down if the Commission thinks fit. The settler may then have issued to him a Crown Grant subject to a mortgage to the Commission equal to the amount of the finally determined liability of the settler to the Commission in regard to land and/or advances and subject to such conditions and restric- tions as the Governor-in-Council may think fit.

ties ;

and his family;

Commission are proper t o be considered.

I V The Commission has now been in charge of closer settlement

for some three years. Its policy is defhitely in the direction of lessening the overgrown liabilities of the settlers. This might be expected to win it popularity throughout the country. Bu t it is doing more than that. It is eliminating the inefficient farmers and the unsuitable land and is encouraging the e5cient and industrious farmer.

The Commission commenced its work of annual adjustment on March 1, 1933. The e!€ect of the legislation of 1932 was, as the Commission itself remarked in its first Annual Report, to transfer the risk of seasons and prices from the settler to the Government and, in the last resort of course, to the taxpayer. The Commission had short time to prepare for the first year’s adjustment but it tackled its job with great energy and deter- mination and for the year ended June 30, 1933, set aside to cover the loss on adjusted instalments the huge sum of €1,180,000.


For the year 1933-34 a similar amount was carried to Suspense Account to meet the adjustment of instalments, but the total amount charged to Revenue Account in respect of the adjustments made was €804,605, though the previous year the whole amount of €1,180,000 was charged. For 1934-35 €1,100,000 was carried to Suspense Account to meet the adjustments, but the amount charged to Revenue Account was €995,290, bringing the total amounts written off in respect of adjusted instalments to June 30, 1935, to €2,979,895. For the year 1935-36 the amount carried to Suspense Account was €1,130,000. These figures reveal that the Commission is grappling boldly with the problem. The number of settlers who have had their leases cancelled, transferred or surrendered has gone up from 9,535 as a t June 30, 1932, to 11,505 as at June 30, 1935, a sure sign that the Com- mission has done something in the way of weeding out those who could never hope to succeed.

Included in the 2,565 blocks vacated up to the Report dated May 27, 1935, were 340 Mallee blocks.

An amending Act of 1933 extended the Commission’s power to review and reduce the liability to the case of purchasers at auction or under contract of sale, who might also have their excess liability written off. In cases where the lease was cancelled through breach of conditions not arising from ine5ciency o r neglect on the part of the settler it provided f o r the payment to the settler or his widow or child of a sum not exceeding €100 -as a kind of solatium. Preferable liens were also extended in their operation.

The great feature of the Commission is that it has practically unlimited discretion. The Chairman’s tact and diplomacy have won over many who were at first opposed to an “ autocratic ” Commission. There seems to be little doubt that when the final writings off come in 1937 many additional million-possibly as many as 15-will have to be written off. The Commission is at present paying interest on a loan liability of over f35,000,000 (€35,370,248) but can show assets valued at €38,022,982, taking the land and improvements at what would be at the present time absurdly high figures. The total loss on Revenue Account so f a r is €11,062,459, made up of soldier settlement B,965,657, and closer settlement €2,105,802-that is, to June 30, 1935.

The strain of the closer and soldier settlement activities upon the Victorian Budget has been very considerable. For the year ending June 30, 1931, for example, the Treasurer had to announce a deficit of €2,154,198, of which the deficiency on soldier and closer settlement represented €1,035,000. The Budget

70 THE ECONOMIC RECORD JUNE 1936

for the previous year had revealed a deficit of €1,172,870-the year’s losses on account of soldier and closer settlement being €607,000. Though the general financial position of Victoria has improved since those years the burden of land settlement on the Budgetary position is still very considerable, and the position is not improved by the fact that there are over €5,000,000 of repayments which were used from time to time in payment of current interest and administration expenses, but on which interest has still to be paid to bond and debenture holders.

GORDON TAYLOR. Canberra University College.

THE PROBLEM OF CLOSER SETTLEMENT IN VICTORIA

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