Canberra in crisis; a history of land tenure and leasehold administration. 9780909906030, 0909906033

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CANBERRA IN CRISIS A HISTORY OF LAND TENURE AND LEASEHOLD ADMINISTRATION

by

FRANK BRENNAN

DALTON PUBLISHING COMPANY

COPYRIGHT 1971

FRANK BRENNAN

This book is copyright. Any reproduction by mechanical or electronic means except for review purposes is prohibited.

WHOLLY SET-UP AND PRINTED BY Professional Rerographic Services Pty. Ltd. 53 Kembla Street, Fyshwick. A.C.T. 2609

NATIONAL LIBRARY OF AUSTRALIA SBN No. 909906 03 3

FIRST PUBLISHED 1971 BY DALTON PUBLISHING COMPANY GAREMA PLACE CANBERRA CITY. 2601.

ACKNOWLEDGEMENTS

I recall and acknowledge with gratitude the assistance given to me in the early stages of this work by the late A. E. Edwards, former Chief Clerk, Lands Department, Federal Capital Commission and the late J. R. Fraser, M.P. for the A.C.T. 1951-1970. My thanks go to His Honour Mr. Justice Hardie of the Supreme Court of New South Wales for his encouragement, Professor L. F. Crisp of the A.N.U. for his interest and to Professor G. Sawer of the A.N.U. for some stimulating scepticism. I thank Mrs. H. Hillery, Mrs. B. Carton, Miss C. Nicholas and others for typing my manuscripts and also those officers of the National Library of Australia who assisted me. Stephen Brown I thank for his very helpful comments and suggestions and for proof reading. My thanks are due to G. C. Daley, a long term resident of Canberra, for his encouragement and valuable advice. I owe a special debt of gratitude to Rolland O'Regan, a City Councillor from Wellington (N.Z.) and a notable authority on municipal and lands administration, for his faith in my work, his active support and his constructive criticism of all my drafts. Without the understanding of my wife Mary and my children Frank, Tom and Mary this book might never have been completed. They suffered the deprivation of much of my "spare time" over the last couple of years. Needless to say the persons mentioned above hold no responsibility for the views expressed in this work. All expressions of opinion in this book are mine. They do not represent, nor do they necessarily accord with, official opinion, more particularly that of any Government or Department especially the Commonwealth Department of which I happen to be a serving member. FRANK BRENNAN, Canberra, January, 1971.

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FOREWORD Canberra, among the cities of the world, is in many ways unique. The story of its beginnings is told in this book. Most cities have their origins in the needs of trade, defence or communication. Canberra is an offspring of politics and a social ideal. The politics were those of Federation, nation making and the slow conquest of a hostile continent. The idea was one of social and economic freedom. This was to be a city unmarred and undistorted by. expolitation of man by man. It would be a city like Ebenezer Howard's garden cities where all land would be publically owned and used for the public good. It would be a city of beauty, without slums and ugliness and not a breeding ground for vice and crime. In large measure this ideal has been achieved —so far. But Canberra today is still a young city. Of course Canberra has had enormous advantages. It has been planned from its beginning and it has been planned in the post-automobile age, It is not an industrial city and has not the terrible problems of air pollution, industrial wastes and environmental degradation. It has no racial problem to poison and embitter its social and political life. At this present state of its development - and it is still very much a village compared with its total potential - its chief drawback is its immaturity and newness. There is about it an air of artificiality. There is the sameness of the rather mediocre domestic architecture and the self-conscious splendour of its public buildings. One finds its inadequate, make do, homely Parliament House rather a relief. Everywhere is the ordered, measured efficiency of the public service. The atmosphere is one of job security with superannuation to housing adequacy, sans paupers, sans criminals, sans unemployed, sans vitality and sans colour. But these are merely the disadvantages of youth. Canberra will be a splendid city, a model for the world, an example to mankind. Rightly this book presents Canberra in the setting of Australian history and the story begins at the beginning. Canberra can only be explained and understood in the light of history and its lessons must be grasped more especially by those who guide the destiny, and plan the future of the Australian Capital Territory. There is an enormous social crisis centred on the modern city. World population is expanding rapidly and nearly all the millions added each year to the total must live in urban areas. There is a crisis in housing and public transport. There is air pollution, noise, ugliness and squalor. Slums spread faster than urban renewal can eliminate them. Desperate efforts at rehousing produce concentrations of high-rise hives, like the tenements of Hong' Kong, where sub-human living is inevitable. The situation is aggravated by three dangerous delusions. The first is that the developer, whose prime motive is profit and not the good of city or citizen, has any but a subsidiary part to play in the building of a city. This delusion has frustrated or destroyed many splendid and imaginative efforts at revitalising American cities. It is a delusion from which Canberra until

recently has been almost immune. The second harmful delusion is that houses, buildings and other improvements are proper subjects for local taxation. .. Australia has demonstrated to the world the very great advantages cities enjoy when local taxes are concentrated on land values and improvements are tax exempt. In the United States of America where local taxes are so heavy - they support police and education as well as the usual municipal services - taxation on improvements, in effect, subsidises slums and penalises development so as to be a major obstacle to urban growth and renewal. The third and strongest delusion of all which perpetuates the urban problem is that any great modern city can be built and its development controlled for the public good without the land of the city being publically owned. A dynamic city must respond to changing needs, to new transport patterns, to population growth and obsolescence. It cannot do this under a freehold system because it is caught in the strait jacket of land costs. It must pay to even breathe, let alone move! This freehold delusion dies hard but dying it is. Nowhere have greater efforts been made to meet the urban challenge of our times than in England. There the thirty New Towns - providing for a million inhabitants - have been made possible only by the public acquisition of the land and the establishment of a leasehold system of land tenure. Herein lies Canberra's importance. It is a type and model of the city of the future - the city the modern world so desperately needs. The leasehold system of land tenure is the centre and the heart of it and this system is today in danger of being weakened or even permanently destroyed. Mr. Brennan's book is extremely relevant to a crisis situation with fortuitously has matured even as he wrote. Rolland O'Regan Wellington, New Zealand.

A

Page CHAPTER 1 The Historical Background 1788-1900 CHAPTER 2 The Road to Canberra CHAPTER 3 The Years of Delay

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CHAPTER 4 The Sulman Committee 1921-1925

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CHAPTER 5 The Federal Capithi Commission 1925-1930 CHAPTER 6 The City of Discontent

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CHAPTER 7 The Years of Depression and War 1929-1945 CHAPTER 8 The Years of Crisis 1950-1970 CHAPTER 9 The Law and the Leases CHAPTER 10 Today and Tomorrow CHAPTER 11 Postscript Appendices Index

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18 37 57 77 100 131

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Vii

CHAPTER 1

THE HISTORICAL BACKGROUND 1788-1900

The Canberra leasehold system is a natural child, of the history of Australian land settlement. Its root causes lie deep in that history and owe little to the socialistic or leasehold implications contained within the Biblical injunction-:

The land shall not be sold in perpetuity; for the land is mine, and you are but strangers who have become my tenants. Leviticus., CH.25, V.23. The first principle of English land law is that all the land of a British possession belongs to the Crown, and no one, except the Crown, can have absolute ownership of land. When Captain Arthur Philip R. N. arrived in Sydney Cove in 1788 to establish a penal colony, all the land of the new colony therefore belonged to the Crown (i.e. the Brhish Government), its ownership stemming from discovery and occupation. The country was sparsely populated by scattered and primitive aboriginal tribes and any concept they may have had of land ownership or possession was of no interest. Thus there were no land laws to amend or repeal. The story of land settlement in early Australia divides itself into three approximate periods: Crown Grants (1788.1830), Land Sales and Pastoral Licence (1831-1861) and Selection before Survey (1861-1894). The Crown Grant Period (1788-1830)

Governor Phillip had initial instructions to make grants of land to convicts who had served their sentence (emancipists) but additional instructions directed him to make grants to free immigrants (if there were any) and to marines who cared to stay in the colony. The maximum grant to emancipists was to be 30 acres, with an additional 20 acres if married and 10 acres per each child. The marines fared better.

to every non-commission officer one hundred acres, and to every private man fifty acres over and above the quantity directed .. to be given to such convicts as may hereafter be emancipated or discharged from their servitude. Free immigrants were to receive the same grant as non-commissioned officers. All grants were free of taxes, fees and quit rents for the initial period of 10 years but thereafter an annual quit rent of one shilling for every ten acres was payable. 2

4

New South Wales had its origin in the desire of the British Government to relieve England of her unwanted criminals and land grants wer6 regarded purely as a means by which the settlement could be advanced to some measure of self-sufficiency. The emphasis therefore was on the use being made of the land. Phillip insisted that land grants were to depend on actual use and occupation, and that they were only available to bona fide settlers. However, Major Grose, the senior officer of the New South Wales Corps who administered the settlement after Phillip's departure in 1792, made land grants unconditionally to officers of his Corps and to certain officials and allowed them to traffic in it. Grose's practice was not illegal. New regulations which arrived after Phillip's departure amounted to an authoritative recognition of land speculation. 3 The officers of the New South Wales Corps are notorious in Australian history for the trade monopoly they secured, and in particular for their rum 4 trading and their rebellion against Governor Bligh in 1808. Many of them were deliberate, unscrupulous exploiters, using trade and commerce as a long range means towards the realisation of their ambitions to become great landed proprietors. They laid the foundation of many of Sydney's largest and most respectable fortunes of later years by obtaining the ownership of lands upon which the suburbs of Sydney were later to be built. The seizure of mortgaged properties and the purchase of land from uninterested grantees extended the officers' area of holding. 5 The early Governors of New South Wales and some of the colonial officials in London saw the evils of speculation in, land, and of the granting of land to persons who might sell it at a profit without having done anything towards its improvement or cultivation. They attempted to control this by conditions of residence and conditions requiring improvements to be made and restrictions against alienation. But controls which are not enforced hardly induce respect. By 1828 less than ten per cent of nearly 3,000,000 acres granted was cleared, and the cultivated lands were less than two and one half per cent of the total. In 1828 Chief Justice Forbes of New South Wales criticised the abandonment of quit rents in Crown Grants and the failure to collect them. He regarded such rents as a means of controlling land use as well as a continuing source of revenue. 6 New South Wales had by 1820 proved itself to be a valuable wool producing region. The profitability of sheep farming had been demonstrated and the British Government was beginning to view the colony as more than a mere dumping ground for convicts. The future appeared to rest with capitalist farmers owning large areas of land and employing gangs of convict labourers. The original land grant system had satisfied the modest requirements of a penal settlement but to accommodate the new policy it had to be revised. Henceforth land was to be used as an inducement to attract migrants with money who would settle in New South Wales, develop the land, contribute to local revenue and increase the colony's trade. Governor Brisbane (1821-1825) was directed to abolish land grants to emancipists but to make grants of up to four 2

—_-a

square miles to free settlers, the size of the grants to be determined by reference to either the amount of money the settler was prepared to spend on his grant or the number of convict labourers he was willing to employ. The new policy intensified local criticism of the land grant system. It was alleged to involve favouritism and corruption. The British Government's response was to introduce land sales in 1826 as an alternative method of land disposal. However, as grants were still available, the result was inevitable. Little, if any, land was sold. The resulting lack of revenue caused concern to the practical men who constituted or controlled the Government in London. Since the earliest days of the British Empire colonies have been called upon to satisfy the varying needs of the mother country and their resources have regularly been exploited in the pursuit of British wealth, power and ambitions. Sentimental attachments and loyalties are a one way traffic from colonies to mother country. The Land Sales and Pastoral Licence Period (1831-1861)

The Ripon or Goderich8 Regulatioiis of 1831 authorised the sale of Crown land at public auction at an upset (reserve) price of five shillings an acre. Henceforth, this was to be the sole method of land disposal. The day of the Crown Grant had finished. In a dispatch to Governor Darling (1826-1831) Viscount Goderich, the Secretary of State, explained the new policy and advanced two main reasons in support: the need to prevent dispersion of settlement and the need for an adequate labour supply. The money obtained from land sales was to be devoted to a real and essential service, the emigration of unemployed English labourers to relieve the economic distress in England. As the intention was to get as much revenue as possible, the five shillings an acre was not to be accepted until upon proper notice it shall apeear that no one is prepared to offer more. Credit purchases were finished. It was now to be cash before possession with no limit on the area one might acquire. 9 The adoption of the new land policy is usually explained by reference to the influence of Edward Gibbon Wakefield's theory of colonisation. Wakefield, who had never been in Australia, worked at his theory in Newgate where he was imprisoned for the abduction of a girl heiress. In his LETTER FROM SYDNEY (1829) Wakefield complained that as the refinements of English life could not exist in New South Wales it was no place for a gentleman. A leisured class must have servants to do the work and of free servants (for convicts were to be shunned) there were none. A labourer might work for you during the first year or two after his arrival but he was sure to save money and buy land with it - for land, said the letter, was much too easily obtained in New South Wales - and then the refined master would find himself without a servant, and must spend his leisure in working for his own living. These conditions pro-

duced a new kind of society, and not a good kind. A really valuable colony would be one in which the state of society in England was faithfully reproduced. How was this to be done? The letter had its remedy cut and dried. All the enumerated evils arose from the cheapness of the land - make land dear. Then the labourer could not afford to buy it and set up for himself and thus he would remain a labourer, happy and contented, earning his master's living as well as his own, and the master would have time to read and converse on intellectual matters with his equally leisured neighbours. Therefore, sell land at a sufficient price, use the money thus obtained in bringing out emigrant labourers, and take care only to bring just as many as would actually be wanted to cultivate the land sold. So everybody would be happy - the rich would hold all the land and the poor would never lack employment. The whole arrangement went like clockwork - in theory. It should be stressed, however, that Wakefield was not advocating a static society, one in which the labourer would forever remain a labourer. To Wakefield, sufficient price meant a price sufficiently high to produce a continuing fund to pay the costs of bringing out emigrants and to prevent free emigrants from becoming independent land owners too easily and too soon. Wakefield's theories met with1the approval of his well-to-do contemporaries in nineteenth century England and together they successfully urged its adoption. The theory was in a limited sense put to the test in South Australia and failed. . . . the colony (S.A.) had been founded in part to prove the great Protestant assumption that riches belonged to men of understanding, men who found favour in God's eyes. Almost immediately upon arrival unseemly arguments broke out between the worldly wise and the God fearing. The righteous and the upright clashed with the drunkards, the fornicators and the liars.. . speculation in land began. 10 The rich landholders, who ought by theory to have been living on their land and employing the poorer immigrants to cultivate it, were clustered together in Adelaide engaged not in elegant conversation but speculating in town lots. The Wakefield theory and the new land sales policy were identified in contemporary thought. The effect of the land sales policy was dramatic and far reaching. All the evils which flowed from it were thus attributed to the Wakefield theory. In any event the effects of the new policy determined the economic development of Australia and settled the political and social life of Australians for generations. It ensured that the Australians of the future would be predominately an urban dwelling people. Those sheep owners who had hitherto used land under licence within the permitted area of settlement in New South Wales began to buy up their runs if they could afford to and hardly any pasture land was left for newcomers. Those who could not or chose not to buy simply moved with the newcomers and ex-convicts outside the settled districts onto the Western and North-Western plains and ran their sheep over

4

unlimited areas without the payment of a penny. Governor Bourke (18311838), who was forever trying to reconcile his legal duties with common sense, responded with an Act declaring these squatters to be trespassers on Crown lands. But it was impossible to police such an Act and the mere naming of these men as trespassers achieved nothing and hurt nobody. Bourke thereupon procured another Act authorising him to licence them as occupiers on the payment of a small fee. But the squatters were not the only result of the new policy. Land was being sold and the Treasury obtained £300,000 from land sales in the 1833-1836 period. In New South Wales land became, from the first sales in 1831, a profitable source of speculation and the honest purchaser had to withstand the competition and intrigues of the unscrupulous land jobbers who include amongst their number some of the more wealthy and respectable citizens of Sydney. The honest applicant is a prey and victim to the land jobbing sharks who prowl about the market place and pounce upon the unfortunate purchaser with a shorter purse and then offer him what may be considered his own land at a reasonable advance - measuring the reasonableness of the price by their own rapacity. 1 1 In administering the land revenue Governor Bourke adopted that part of the Wakefield proposals which applied to bringing out immigrants. In 1832, for instance, £6,400 was set aside from the Land Fund to defray the expense of bringing out female farm servants. About £50,000 of the amount obtained from land sales in the four years (1833-1836) was spent on immigration. By 1840 free immigrants were coming into New South Wales at the rate of 10,000 A year and about another 5,000 to South Australia. Of the New South Wales contingent about two thirds were in some way assisted from public funds. From Hobart the Colonial Times deplored the policy of selling the Crown lands of these colonies for the purpose of ridding the mother country of her 'diers and vagabonds. 12 The mania for land speculation however reached its most frenzied proportions in the Port Phillip district. In June, 1837 the first land sales in Melbourne, then still a part of New South Wales, yielded an average ofC31.15.0 per allotment for town blocks. Many of these were to change hands during the next three years at prices ranging up to £4,250. The minimum upset price was raised to 12/- per acre in 1839 and to £1 per acre in 1840. Land sales receipts for that year were £341,000 - more than all the rest of the colony's revenues. Eighty nine (89) blocks sold in Melbourne in 1839 for an average price ofC 122 per lot were subsequently resold for sums between £404 and £1,266 and 45 lots which in 1840 averaged £366 changed hands in the next four months for prices between £625 and £1,672. Such a land boom could not last. The crisis came in the 1841-1843 period accompanied by a severe drought. Land revenues dropped to a mere £15,000 in 1842. No one had the money to buy land or to employ the labour arriving as a result of the revenue previously obtained. Australia had its first experience of mass un-

employment. In the very year of the crash 27,000 immigrants arrived 1,000 people went bankrupt, two banks failed and unemployment was widespread. Such were the results of unlimited land sales and land speculation generated without the condition of bona fide settlement and without any restrictionon transfer.' So far as the squatters were concerned Governor Gipps (1838-1846) converted ,Bourke's licence to trespass into a licence fee of £5 for each run. But Gipps was alarmed. He was aware of the dangers inherent in the continuance of squatting and the need. . . to declare to the people of this colony

that Her Majesty '.s Government will maintain its rights to dispose of the Crown lands and not suffer them to be kept in perpetuity and at a merely nominal rent by those who might be first to seize them. 14 But in Governor Fitzroy's term (1846-1855) the British Government was persuaded to give the squatters even better, terms. Orders in Council in 1847 allowed them to lease the land for 14 years with first option to purchase any portion of their run at £1 an acre. These provisions meant that the squatter had obtained official recognition and approval of his occupancy and, in the final analysis, he had obtained it in a manner which hastened the permanent alienation to him of the land he had' grabbed. Most of the land then held by a few hundred individuals was never retrieved. In Australia, where the water supply is of paramount importance, the squatter cum licensee cum leaseholder by buying atC1 an acre the comparatively small area on which water was to be found became the de facto freeholder of a very large holding. The squatter was said to be picking the eyes of the country or peacocking the area. In one case 258,000 acres were secured as a single sheep station by the purchase of seven hundred 40 acre blocks in different parts of it.

in a colony with a population of over 200,000 the British Government proposed to grant some 18 million acres of land to 1,800 individuals and to do so in return for the payment of a mere pittance when it continued to demand £1 for the fee simple of every acre of barren and rocky scrub. The interests of the majority had been sacrificed to the aggrandisement of a small minority, thousands of colonists and future settlers would be shut out of their rightful patrimony. A privileged class had been created with a vested interest in the maintenance of a high minimum price. The seeds of discord had been sown ... '

5

The surrender to the squatters did not go unnoticed by some news-

papers, . . . it is not rhetorical flourish, no figure of speech, protested the Launceston Examiner but a literal fact to say the interests of the Australian colonies were sacrificed at the shrine of Gibbon Wakefield's fanciful theory of colonisation.' 6 The public outcry against the 1847 Order in Council was so strong in South Australia that it was never put into force, and later regulations sub6

,

stituted a six months lease tenure thus keeping the land for agriculture if and when it might be needed. The Selection Before Survey Period (1861-1894) The whole question of land disposal and of the use of the resultant revenue was a constant source of dissension and agitation throughout the 18301850 period. It became an argument to support increasing demands for selfgovernment. Emancipists complained that the sales system favoured the new arrival with capital whilst the new arrivals complained that it fostered land jobbers and speculation. The residents of the Port Phillip district complained that the money obtained from land sales in their district was being used to further the interests of the wealthier and more influential section of Sydney's population. They began to clamour for separation from Sydney. The 1840's were, as were the earlier years, a time when land legislation was enacted by, or by the permission of, the British Government. This often meant the authorities in London legislated on general principles which should have been modified before application to the Australian colonies or on information given them by interested parties who happened to have influence with Ministers. The British Government therefore bequeathed to the colonies more particularly New South Wales and Victoria - a well established legacy of land problems when self-government was granted in 1856. The problem was a local one and it was now to be dealt with locally. But the squatters and others who had benefited from the lack of any sensible land policy had little need for concern. The Australiandeinocrats of the time were presented with or actually demanded constitutional barriers against democracy.

a people so careless from sheer selfish indolence about their political rights deserved to have the worst evils of despotism inflicted on them. 1 7 The Legislative Assemblies were elected bodies. However, as men of property might vote several times at an Assembly election, once by virtue of adult age and residence and again in every electoral district where they had property to the prescribed value, the Assemblies were greatly influenced, if not controlled by the squatters. In addition, powers of veto were vested in so called Houses of Review, in the colonies designated Legislative Councils. The property qualification for membership of these Councils and the very restricted electoral franchise ensured that they would remain very much squatter controlled. This was particularly so in Victoria. But in the end it was not only the House of Review device for thwarting the expression of the popular will which caused the collapse of attempts at land reform. Faulty legislation, poor administration and human greed all contributed to the failure. As few squatters had the money to purchase all the choice, well-watered areas on their runs, the idea was conceived that if these could be taken up by free settlers the grip of the squatter on his huge tracts could be broken or at least the extension of his empire limited. This was using the peacocking tech-

7

nique by which so much land had been amassed into enormous runs to break the squatter's power. So was born the policy of free selection before survey and conditional purchase, a scheme whereby any man could settle at a moment's notice on a fertile patch of a squatter's leasehold,-get its exact boundaries surveyed later, and claim it as his own by simply residing there, making small improvements and paying off the £1 an acre purchase money by small instalments. The scheme commenced in Tasmania but in 1861 when the first 14 years lease period ended in New South Wales the Premier John Robertson was ready with an Act to implement the policy in his colony. Henceforth, a man might select blocks of between 40 and 320 acres of Crown land. The twin ideas of free selection before survey and conditional purchase were to become the panacea for the land problem. The Robertson Land Act of 1861 became the pattern for land legislation in all Australian colonies. The squatters sought to obtain the eyes of the land they had grabbed. They appealed to the Banks for money to protect themselves against those selectors who might easily ruin station property by taking the choice patches, not with any intention of farming them, but to demand the squatters buy them out. Since a great deal of the money spent on the land in the late thirties had been borrowed from England, a new class of landowner sprang up - the absentee living in London on the profits of his ownership or the interest on his mortgage. Bank finance soon dried up and the squatters resorted to dummying i.e. arranging that blocks they needed should be selected by a person who would transfer the blocks to them as soon as possible. This led to peijury on a large scale because every selector was required to solemnly swear that he was not acting in any other person's interest. The judgement of history is that the Robertson Land Act of 1861 was ill-conceived and most carelessly administered, that it was so full of loop holes that it could not possibly have achieved its purpose. Robertson stubbornly resisted efforts to make worthwhile amendments. By 1884 selectors had occupied over 23,000,000 acres of Crown lands in New South Wales but nearly all this had passed into the hands of the squatters. Only one man in nine among the selectors actually remained on his land and farmed it. Robertson's law had tried to give land to the people but its main effect was said to have been to give ownership of land to the squatters. the reckless waste of territory was not less pronounced than the moral deterioration. This disgraceful spoliation went on with the full approval of the Department and of the Parliament.. . a chaos of waste and a record of pilfering that must pile disgrace on every Parliament from 1861.18 The operation of the Robertson Land Act was described in the words of a Royal Commission (New South Wales 1883) as. . . tarnishing the personal virtues of veracity and honest dealing by the daily habit of intrigue, by the practice ofevading the law and declaration universally made in defiance of fact. Self interest had created a laxity of conscience in all matters connected with the land laws and the stain attached to many. Here was an instance

where. . . idealism had to encounter the traits of human nature and, while a land law should not be framed for rogues it should at least take them into account. In Victoria, the Duffy Land Act of 1862 was also designed to break up the large land holdings but once again the hopeful expectations were never fully realised. In 1871, Charles Gavan Duffy (a condemned Irish rebel of 1848 and later Premier of Victoria) complained bitterly that, his Act had failed through the iniquitious conspiracies of the squatters while the very class for whom I legislated sold its inheritance for a paltry bribe. The squatters even went so far as to obtain paupers from old men's asylums to dummy on their behalf 2° By degrees the public began to realise that its land was being handed over to a few men who had grown wealthy from the wool industry and the free selection quarrels between squatters and genuine selectors only intensified the bitterness. These feelings against the squatters were to last for generations. This deep social cleavage in Australia, this passionate sentiment festering around the question of land alienation explains why even in what passed as conservative circles there was a radical attitude towards the ownership of land. Australia had attracted free settlers who had personal knowledge of the clearance of the Scottish highlands of men to make room for sheep and deer, by men who had known the cruel savagery of landlordism in Ireland and its stubborn tyranny in England. Australia had seen in a few generations a whole continent monopolised by a few and all the poverty, insecurity and squalor of the old world reproduced in the new land. Between 1861 and 1894 50,000,000 acres of land had been alienated in large holdings and there had been an immense actual and relative increase in urban population.2 '

The period 1870-1900 was for the most part years of grave and deep economic depression in Australia. Wool was practically the only exportable earner of overseas exchange, gold production had slumped and the dairy and meat trade was not a practical proposition until refrigeration was developed. They were years of large scale unemployment, of sweated labour in the urban areas and of itinerant labourers on the rural scene and of the swagman humping his swag from station to station looking for work. These were the bitter years when the land aggregation of the squatters was shaping Australia's social and political future. Thus it was that with the birth during this period of the industrial movement, with all its flamboyant militancy, an element of bitterness not to say savagery was introduced into Australian social and political life. These influences in the Australian society in its formative and' plastic phase, in the years when it was enduring the industrial anguish which flowed from the land monopoly were significant influences on the future. The general question of land reform was not exclusively an Australian question. It

4

was a world wide problem out of which was springing the Marxist answer of Communism and the many forms of radical thought which found expression in Europe such as syndicalism, anarchism and various forms of socialism. The relationship of man to property was seen to be at the heart of the social question and many of the influential social thinkers of the day were at one in tracing a multitude of social evils to the private ownership of land. The Reform Proposals The material setting of the Australian colonies changed rapidly in the 1850's with the discovery of gold. Between December 1851 and December 1861 the total population increased from 438,000 to over 1,170,000. In Victoria alone the population increased from 97,000 to over 539,000 within those years. The increased Victorian population was significant as the squatters in that colony had been most successful in the big land grab. The earliest demands to unlock the land in Victoria came from a few successful diggers and business men seeking channels of speculative investment in the certainty that land values would rise. By 1854 however the position had changed. Alluvial mining was beginning to peter out and the catch-cry unlock the land was as popular amongst the diggers as the call abolish the licence fee which culminated in the Eureka rebellion (1854). In New South Wales the feeling against the squatter was strong, but in Victoria it was bitter. The complaints of the squatters that they were the injured pioneers of Australian civilisation, the hypocritical professions that their aim was to serve the public good, their assertion of social superiority over the urban mob and their exaggerated claims for compensation immeasurably embittered the crisis. The Melbourne Argus began a campaign as early as 1854 demanding that the Government unlock the land and impose a land tax. The remarkable Englishwoman, Caroline Chisholm, whose place in Australian colonial history as the Immigrants Friend has been rediscovered within the last couple of decades, was a strong supporter. Mrs. Chisholm wrote in 1854: the land must

be unlocked! I never could - I never would recommend this country to any man, if I did not think this possible and that it would soon be done 22 In 1857 Mrs. Chisholm was condemning the crushing monopolising and withering land system that now exists and in describing the needs of colonial life she did not advocate or wish that every man should become a farmer but children ought to take precedence over sheep. As for compensation for squatters they should compensate the colony for the frightful and deinoralising effect of such a system as the one we now have working. 23 These early campaigns to unlock the land inspired the legislation which raised such high hopes. But the disappointments and frustrations which followed produced another climate of opinion - one in which more specific and fundamental land tenure proposals began to flourish. By 1870 there had developed under the general label of land reform two main proposals - perpetual government ownership of all land (sheep run and suburban block alike) with 10

Crown leases to be made available or continued private ownership with a progressively heavy land tax. The proposals were of course exciting more interest outside the colonial Parliaments than inside. Probably the earliest of the organised land tenure reform movements, but typical of them, was William H. Gresham's Land Tenure Reform League which campaigned actively in Melbourne from 1870. The League, which survived only a few years, had a manifesto consisting of quotations from Emerson, Carlyle, Spencer, Dumas and John Stuart Mill. Its objects were:-

(1)

The immediate cessation of the sale of all Crown lands.

(2)

The fee simple of the public domain to vest in perpetuity in the state, that is, in the people in their corporate capacity.

(3)

Occupancy, with fixity of tenure, subject to rental for revenue purposes.

(4)

Land alienated to be repurchased. No re-sales to individuals but the transfer of rights to be permitted.

(5)

The gradual abolition of all indirect taxes whatsoever, the revenue of the state to be derived solely from the rental of land. 24

The most remarkable feature of the League's objects is the resemblance to the later policy of Henry George. Gresham's programme of reform has been

described as one to the contents of which thirty years of Georgian propaganda have added little new in ideas.25 Gresham, who called the League's policy one of applied Christianity, hinted at the many social reforms which could be financed by its adoption. The mounting evidence of concentration in land ownership inspired the Victorian reformers to accelerate their campaign. Parliament continued to debate legislation designed to obtain a wider distribution of ownership. But the legislation permitted by the House of Review was either partly or wholly ineffective. It did not impress the reformers. Their remedy was more fundamental and using popular magazines periodicals and even daily newspapers they spread their doctrine of land nationalisation. The message was taken into Parliament. In 1876 James Mirams campaigning on a policy of land nationalisation was elected by a record majority as member for Collingwood The argument for land nationalisation as presented by these reformers may be summarised: 26 the possession of land is the foundation of all wealth and no government has any moral right to sell it and deprive future generations of what is rightfully their property as much as it is the property of the present generation. By leasing the land in lieu of selling it or giving it away the government would be in receipt of a perpetual and ever increasing revenue more certain, than the fluctuating revenue obtained from the sale of lands or from the receipt of customs duties. In all well regulated communities land naturally increases in value without any effort or expenditure beyond first cost. This increase is due to the progress of society in population and in wealth and 11

should be saved for the public to yield an ample revenue for all purposes of government. The alienation of land by the State is the most wasteful of all modes of raising a revenue. The construction of railways at public expense has doubled the value of land neat the lines without the expenditure of one cent by the owners of this land. It is a glaring injustice for such owners to enjoy for themselves and transmit to their posterity this unearned increment. But the Government was not heeding these arguments. It needed money and it continued to sell the land not grabbed earlier by the squatters in their hey-day. The fact that land values are created by the community was however gaining recognition and there was increasing agreement with the contention that land increased in value in a manner disproportionate to the rise in value of any other commodity and altogether different from the aggregate increase of other wealth. Financial institutions were beginning to consider land values as good security to the lender which could be relied upon in the long run. 27 Land nationalisation died as an attractive proposition in the Australian colonies during the 1880's. Property values and rents fell and expropriation lost its appeal. Many reformers who had lost faith in land nationalisation turned to land value taxation as a remedy and re-entered the arena to engage in a complicated rivalry with land natioflalisers. Again the proposals did not originate with or become confined to urban radicals. Land nationalisation may have elements of socialism in it but some thought a land value tax just another tax. Or is it? At least one writer in 1872 thought otherwise. After quoting Adam Smith and McCulloch on the virtues of unfettered industry he condemned a proposed land tax as. . . introducing a large installment of French Communism amongst us. 28 But the times were changing and no Victorian Government, however conservative, was averse to obtaining revenue even if this meant an installment of French Communism. The land taxers excused their move away from the more fundamental land nationalisers and argued that: whatever may be said in favour of the leasing system in theory, practical observations show that a man will go, even at some inconvenience and disadvantage to himself, where he can obtain a freehold, rather than remain where he cannot. What is to be done then to obtain for the State the increment of the unimproved value of the land - if leasing cannot be adopted? The answer is obvious - taxation ! 29

The land tax introduced in Victoria in 1877, claimed to have been most imperfect and not properly understood by anyone, was aimed at all holdings of more than 640 acres. It was explained by the historian, Rusden.: the law had afforded facilities in Victoria for acquiring land under false pretences and plundering the State. . . and it was contended that the only way to meet out justice was to a progressive land tax starting at a high 12

point and rising by leaps and bounds, in a manner which would make lucrative tenure of large estates impossible. The adopted phase was that it was tiecessary to burst up large estates. 30 The opponents of land nationalisation and land value taxation enthusiastically embraced economic laws as affording justification for their success in the big land grab. What, they asked, distinguishes and therefore singles out for confiscation the unearned increment of land rather than increases in the value of other forms of property? Has the State earned the increment any more than the owner? Arguments that a land tax would be unjust and economically injurious were regularly voiced in the 1860-1900 period. This opinion may have owed much to self interest for inspiration but very often it was based on an interpretation of classical economic theory - particularly the writings of Adam Smith. The gospel of economic science had arrived and it was being preached in and out of the colonial Parliaments to sustain many political beliefs, particulary free trade. Tariffs were denounced as opposed to the sound principles of political economy. Australian land reformers in the 1870-1880 period were very largely influenced by the writing of the eminent nineteenth century scientist, Alfred Russell Wallace, who was also the President of the Land Nationalisation Society of England, and John Stuart Milk The discovery by Mill of the unearned increment and his development of ideas favourable to their cause made his writings influential with land reformers. Mill would appear to have been a convert to the principle of land reform. In 1857 he wrote to a resident of Melbourne that although in principle he was quite in favour of considering all land as the property of the State and its rent as a fund for defraying the public expenses, the antipathy of Anglo-Saxon immigrants towards a leasing system and the high administrative cost of land taxation should dissuade any colonial government from attempting to capture land rent. 3 '

This reliance on English writers was however to , change dramatically with the publication in 1879 of Henry George's Progress and Poverty. George's book, which was to capture the attention of the world, soon became essential reading among Australian land reformers. Henry George, who was a printer by trade, migrated from his native Philadelphia to California in 1859 when he was 20 years old. Ten years later he visited New York and was appalled by the dramatic contrast of tremendous wealth and festering poverty in that great city. Why, asked George, is poverty an inevitable accompaniment of material progress and why are almshousEs and prisons as surely the marks of progress as costly dwellings, rich warehouses and magnificient churches? What, he asked, would be the social conditions in San Fransico when the population increased, the railroad had crossed the prairie, industries established and wealth multiplied? In the following years as if in a laboratory he saw this social evolution occur. This he observed as he studied critically all the accepted - political economists from Adam Smith to Mill. Hisconclusion was that the fundamental evil which perverted and dis13

torted the free enterprise economy was the private ownership of land - and land meant all natural resources. Private property in land he called a bold bare enormous wrong. It acted like a wedge driven into the social fabric elevating all above, depressing all beneath, enriching the few and improverishing the many. . .. the monopoly of land by the few is the root cause of inequalities in wealth which mean that so many must live the life of a slave and die the death of a pauper. In contrast to the dull economic texts of the day Henry George's writings were colourful and persuasive. George claimed that: . . . political economy as currently taught is hopeless and despairing. But this is because she has been degraded and shackled, her truths dislocated her harmonies ignored and the word she would utter gagged in her mouth and her protest against wrong turned into an indorsement of injustice. George maintained that political economy had failed to see the answer to the riddle of poverty, although it was clearly laid out before her eyes, and that with his remedy not only would the root cause of poverty be abolished but a host of other social benefits would follow its adoption. in every essential land differs from those things which being the product of human labour are rightfully private property. It is the creation of God, they are produced by man. It isflxed in quantity, they may be increased illimitably. It exists though generations come and go; they in a little while decay and pass again into the elements. What more preposterous than that one tenant for one day of this rolling sphere should collect rent for it from his co-tenants, or sell to them for a price what was here ages before him and will be here ages after him. 32 The influence of Henry George's writings spread quickly. Progress and Poverty was translated into all European languages. Its impact on world political thought was tremendous. Henry George did not advocate land nationalisation. He steered away from any direct means of destroying private property in land, because alternatives such as land nationalisation would, he believed, require para-revolutionary social action and would put excessive, and possibly. dangerous, power into the hands of the State. Further it would be administratively clumsy and impractical and would destroy the flexibility and adaptability of the free enterprise system, in which each man, while pursuing his maximum economic advantage, would incidentally, as if led by Adam Smith's hidden hand achieve the greatest good for society. To destroy private property in land it was not, said George, necessary to confiscate land but merely to confiscate rent and at the same time remove taxation from the earnings of capital and labour. (Rent in this context means a sum paid annually for the use of land but not of improvements - what some call raw land. This sum capitalised is the market value of the bare land, called in Australia the unimproved capital value of land.) Revenue from this source, 14

George claimed, would be sufficient' for the ordinary needs of Government and could even leave a surplus to be used for the common good. He claimed that this taxation would be the only taxation necessary. His followers were therefore called Single Taxers. It is important to note that in Australia, land nationalisers and single taxers were at one in advocating that the selling of Crown Land should cease and that such land should remain state owned available to private persons only under a leasehold tenure. During the 1880's the question of tenure and land value taxation became the topic of the day and discussions of the problems even penetrated the universities. In Adelaide in 1885 questions about the unearned increment were placed on the examination papers. In Sydney the Bulletin, the bushman's bible and a weekly newspaper of immense influence among the early unionists, was urging its readers to study Henry George and Christ as proper guides to the mellenium. The existing land tenure was identified as the only barrier to the reign of true Christiantity on earth.33 Yet George's influence in Australia probably remained rather restricted until after his tour in 1889-1890. The organised land tenure reform movement became essentially a single tax movement from that time. Single tax leagues sprang up everywhere. Farmers, city workers, businessmen and pofessional people - they all became enthusiastic about confiscating the unearned increment. George's doctrine swept excitedly through Australia. The linking of his name with social and economic reform gave assurance that he would be sympathetically received by the emerging Labor Party. Although he had an abiding influence 14 on members and supporters, the Party as a whole did not endorse the single tax theory. It acknowledged that unearned income from land belonged to the State and it championed the idea of a land tax but it never saw this land tax as a single tax. The majority of the Labor Party being protectionist demanded high customs duties no matter what other taxation was imposed while the minority was not so strongly free trade as to favour obtaining the whole Government revenue from land. 35 However, for many decades Progress and Poverty ranked with another American work, Edward Bellamy's Looking Backward, as essential preliminary reading in Labor circles. The Free Trade Party was charmed with the idea of revenue from land in lieu of customs but as many of its leading members were also large land holders the Party found the single tax theory a little too difficult to accept. The Protectionist Party, on the other hand, condemned the theory from the outset. Party leaders were reluctantly willing to consider the need for a land tax but they could never accept such atax as a single tax. Henry George was not a socialist.3 6 It seems absurd today that anyone who had read his published writings could have so regarded him. But in the history of political ideas what people think a man or group stands for is often a more potent influence on the course of events than the sober truth. It is not 15

necessary for present purposes to decide whether Henry George's single tax theory was an origin al- theory, it is not necessary to decide whethr he was one of that exalted class of men of whom the world was not worthy or whether he was in fact a Yankee bounder. . . an apostle of plunder. . a preacher of unrighteousness. 3 ' What is essential is an awareness that Henry George aroused

an interest in political and economic questions more intense than the world had ever seen before. By his colourful writings, persuasive oratory and magnetic personality Henry George focussed world attention on the question of land value and land ownership. The importance of George in Australia was that he stirred a new and deeper interest in the questions of land tenure and land disposal and in so doing gained many prominent and influential converts to the principles of the taxation of land values and reinspired the faith of those already converted. His particular significance for present purposes is that his influence and the popularity of his teachings in Australia reached its zenith in the very decade of the federal movement. This then is a brief outline of the history of early land settlement in the two most populous Australian colonies. The story in the-other colonies was similar. The whole chapter is a dispiriting story of the lack of foresight, faulty legislation, poor administration, political corruption, dishonest practices, moral cowardice and human greed. The purpose is to remind the reader that land laws, land administration and disposal were lively political issues from 1820 until about 1920. Public and Parliamentary interest then waned. The method, or lack of method, of land disposal in the early half of the nineteenth century inspired in the later half a climate of public opinion receptive of the ideas of land tenure reform. The existence of this social atmosphere must be acknowledged, its background of thwarted reform measures must be appreciated to obtain the fullest understanding of why there developed, parallel with the movement of the Australian colonies towards federation, an almost universal demand that land within the area to be chosen for the federal capital should be owned by and forever remain the property of the nation. NOTES ON CHAPTER 1 1. 2.

3. 4. 5. 6. 7.

Manning Clark, C.H., Select Documents in Australian History. 1788-1850,p.218. Sydney, Angus and Robertson, 1950. Quit rent was a feudal term denoting rent due usually from the tenants of manors in lieu and in discharge of the services for which they were otherwise liable. Upon payment the tenant was said to go quit and free of all other services. See O'Brien, Ens., The Foundation of Australia, pp.220-230. Sydney, Angus and Robertson, 1950 (2nd Edition) Rum was the name used for all spirits at the time. O'Brien, E., Op. cit. Else Mitchell, R., Justice of New South Wales Supreme Court in a paper delivered to Australian Planning Institute, Sydney, November, 1966. Burroughs, Peter., Britain and Australia 1831-1855. A Study in Imperial Relations and Crown Lands Administration. Oxford, Clarendon Press, 1967.

16

CHAPTER 2

THE ROAD TO CANBERRA The Commonwealth of Australia Constitution Act, a statute of the United Kingdom Parliament, united the six previously separate colonies of New South Wales, Victoria, Queensland, South Australia, Western Australia and Tasmania into one indissoluble Federal Commonwealth under the Crown of the United Kingdom and provided the Commonwealth with its Constitution. The Act, which was brought into operation by proclamation in Sydney on 1 January, 1901 named Melbourne as the initial meeting place for the new Parliament. Section 125 of the Act provided:

125. The seat of Government of the Commonwealth shall be determined by the Parliament, and shall be within territory which shall have been granted to or acquired by the Commonwealth, and shall be vested in and belong to the Commonwealth, and shall be in the State of New South Wales, and be distant not less than one hundred miles from Sydney. Such territory shall contain an area of not less than one hundred square miles, and such portion thereof as shall consist of Crown Lands shall be granted to the Commonwealth without any payment therefor. The Parliament shall sit at Melbourne until it meet at the seat of Government. The section was fashioned in the form set out above only after a series of amendments at the Federal Conventions which drafted the Constitution and after agreement had been reached at a conference of colonial Premiers. The wording of the section inspired a popular belief that as land within the federal territory was to be vested in and belong to the Commonwealth no land within the territory could ever be owned by any private person or cor poration without a constitutional amendment.' The belief is still current' even though over 66 years ago a legal explanation of the provision was given:

• . . the Commonwealth acquires under this section territorial rights only, and not proprietary rights . • . landowners or Crown Lessees within the territory chosen for the seat of Government will not be dispossessed unless the Federal Parliament chooses to dispossess them.' A Cabinet of Ministers under the leadership of Edmund Barton was sworn in immediately after the proclamation of the Commonwealth. The office of Prime Minister having no legal existence at the time Barton was called Prime Minister by courtesy and convention. 4 The caretaker Government busied 18

itself with preparations for the first federal election, choosing 29 and 30 March, 1901 as polling dates. The Prime Minister opened the campaign for the Government in the Maitland (N.S.W.) Town Hall on 17 January, 1901. On the platform with him were his senior Ministers Alfred Deakin (Vic.), Charles Cameron Kingston (S.A.) and William Lyne (N.S.W.). Barton explained in some detail the legislative and administrative programme which his Government proposed to carry out, and, speaking of the territory to be chosen for the seat of Government he said So far as the law of the land allows land within the federal area will not be sold. Its ownership will be retained in the Commonwealth. The land will be let for considerable terms but with periodical reappraisement so that the revenues thus obtained will assist the cost of creating the Commonwealth Capital. More than that we shall take care to put no fancy prices on land. We shall not play into the hands of the speculators. We will give fair value for the acquisition of land. We shall give just terms. We shall fix a date which is independent of any artificial heaping up of value - such a date as the passing of the Constitution. Such dates were before the speculator began to operate. You see then we shall be able to get the land on fair terms, lease it on fair terms and still make a profit for the Commonwealth. I put, that to you not as a land nationaliser. We began in this country with land alienation and as regards that it is possible and probable that it is impossible to depart from that system now but in the federal area we shall have a free hand. We shall have a new departure and as a matter of business we shall see that we do not pay unfair and speculative values for land and that the people get the benefit of the prices we pay for it, and nevertheless there shall be a considerable profit that will help to take the load of the cost of the creation of the Commonwealth off the backs of the people of Australia.' ...

This declaration of federal territory land policy by Barton was particularly important. He was the leader of the Protectionist Party which was the least influenced of all parties by the ideas of Henry George which were having such a profound influence in Australian politics. It was generally believed that a Protectionist Government was the least likely to concern itself with land tenure in the federal area. Barton's use of the earliest possible opportunity to state his Government's land policy therefore settled the matter. Henceforth there was less reason to doubt that one day a Commonwealth Government would obtain the ownership of all land in the federal area and establish a system of leasehold tenure. A few years earlier B.R. Wise (N.S.W) and P. McMahon Glynn (S.A.) had urged the Federal Constitution Conventions to insert in the draft constitution a clause prescribing leasehold tenure within the territory. Wise argued that if the Constitution was to be commended it should indicate in the clearest possible manner that those principles which the electors had most at heart were conserved. 6 In South Australia, the House of Assembly was convinced that the federal area presented a golden opportunity 19

to retain land rent for the benefit of the community. It refused to accept the rejection of Wise's amendment and agreed unanimously that the Convention should again be requested to establish a principle of leasehold which would give to posterity the advantages, of the increased land values which would

necessarily result from enormous Government expenditure in the territory. 7 At the 1898 Melbourne Convention McMahon Glynn therefore moved to Insert in the draft constitution a clause providing: that no federal territory should be alienated in fee simple - nor leased except in perpetuity at its fair annual rent, subject to periodic appraisement at intervals of not more than 14 years in a manner to be determined by Parliament. 8 McMahon Glynn's amendment was rejected but the Convention debates on this and on Wise's earlier amendment are a clear indication of the strength of Henry George's influence. The most significant factor however was the support given to these amendments by delegates who were to become Ministers in Barton's Government. But it was the opposition of Barton himself which was probably decisive in securing the defeat of the amendments. His view was that the whole question of land tenure within the territory for the seat of Government should be left to the Federal Parliament rather than prescribed in the Constitution. Barton could be described as a political moderate although the leading part he played in forging the constitutional straitjacket which imprisons Australia must qualify the description. In any event his policy speech was the first authoritative statement on the land tenure to be applied in the then unselected federal territory. The absence in the Maitland address of any reference to the benefit Commonwealth land ownership would be to future planning and constructional authorities in the new capital city must be considered in the light of public knowledge and interest of the times. The concept of town planning was almost unknown and, even to the knowledgeable, not necessarily desirable. The Maitland audience was, like most Australians of the time, without any enthusiasm for the idea of spending public money on the erection of a new capital city. A homily on the wisdom of town planning would have been greeted with stony silence, but an assurance that the proposed capital city could itself be a source of income was most comforting and brought forth

loud and sustained cheers. The Prime Minister and his colleagues had come into the federal arena which they had created from proud and excessively parochial colonies - now States, the leaders of which saw a threat to their hitherto unchallenged preeminence. They suspected every legislative and administrative proposal by the new Commonwealth. For them the writing was on the wall - if they cared to read it. The special correspondent of the London Morning Post had written': 20

As the power of the purse in Great Britain established by degrees the authority of the Commons, it will ultimately establish in Australia the authority of the Commonwealth. The rights of self-government of the States have been fondly supposed to be safeguarded by the Constitution. It left them legally free, but financially bound to the chariot wheels of the central government. Their need will be its opportunity. The less populous will first succumb; those smitten by drought or similar misfortunes will follow; and finally even the greatest and most prosperous will, however reluctantly, be brought to heel. Our Constitution may remain unaltered but a vital change will have taken place in the relations between States and the Commonwealth. 9 The special correspondent was Alfred Deakin, Attorney-General and later Prime Minister of the new Commonwealth. If this had been known at the time it could only have intensified suspicion. But the State politicians were not going to surrender without a struggle. They eagerly embraced a Court created doctrine of reserved State power to bolster their hopes and beliefs that sufficient implied prohibitions could be read into the Constitution to preserve State rights and restrain the activities of the Commonwealth. They actually believed the States were sovereign entities, or at least they told the electors so. Few could have visualised the States going into pawn to the Commonwealth" and fewer still would have welcomed the possibility. In those early years Deakin's vision would have been dismissed as the wishful thinking of one of the few unificationists. The federation of the Australian colonies did not bring any lessening in the widespread anti-federal feeling. Federation merely spurred it in new directions and gave it new objectives. The need to have any federal capital city at all, its location and the cost of erecting such a city were subjects of confused argument and bitter division for generations. Undoubtedly the cost argument was very often a cloak to conceal anti-federalism but it is equally true that many ardent federalists were divided on most questions relating to the proposed capital.' 2 G.H. Reid for the Free Trade Party did not concern himself with land tenure within the federal territory when he opened his Party's election campaign at Sydney on 4 February 1901. He stated a case for free trade and warned of the dangers of any but very limited customs.' The Labor leaders McGowen, Watson and Hughes opened their campaigns on another note. 14 Labor was the most recent of the three political persuasions, the Party being only a few years old. Its attitude to federation had veered between luke warm support and outright opposition. It had not been involved as a Party in influencing or settling the draft constitution and was therefore generally suspicious of the constitutional structure forged by its political-adversaries. In particular the party believed that no Labor candidate would ever be elected to the Senate. It suspected that chamber of being designed as a last ditch conservative stand to thwart any progressive measures 21

4

proposed by the House of Representatives. The granting of equal representation in the Senate to the smaller and more conservative States was denounced as a negation of the principle of manhood suffrage. Labor leaders of this period did not explain the existence of a second chamber as a judgment of history, or seek to excuse it by reference to the Committee work it could do. Rather they spent the election campaign ridiculing the idea of the Senate as a States House and calling for its abolition. But such pure idealism could not survive. It does not belong to the political world of mere men. The election result proved that Labor candidates could be elected to the Senate. Labor won eight of the thirty six Senate seats and this played havoc with the ideal. Inside Parliament the spirit was willing but the flesh was weak. Outside Parliament Labor's democratic and radical ideals evaporated before the very edifice erected by the Party's political enemies. Within a few months the Party confirmed the establishment of its own supreme policy making and governing body on the same federal basis as. the Senate and so died democratic radicalism in Australian politics! The first Commonwealth Parliament met in Melbourne in May, 1901. The election produced a three party situation. In the House of Representatives Barton's Protectionists won 32 seats, the Free Traders 27 and the Labor 16. The Barton Government continied in office with Labor support for the term of the Parliament. However, on questions such as the location and size of the area for the new capital city party allegiances were forgotten. No one Party as such had any clear cut policy on these or any other matter affecting the territory for the seat of Government. The constitutional provision that the territory for the Seat of Government should contain an area of not less than 100 square miles i.e. 64,000 acres, disturbed many members and Senators in the first Parliament. In true Georgian style they each sought the unbounded savannah. The Federal Conventions had adopted the 100 square miles minimum after considering the United States experience where Congress had been given power to accept a District not exceeding ten miles square as the seat of Government. Such a small area was of course only adequate for a city area and as Convention delegates preferred the idea of a self-contained district comprising its own rural areas, water supply and other incidental surroundings the 100 square miles minimum was inserted in the Constitution. 15 Within a few hours of the opening of Parliament, Senator Staniforth Smith, one of the most persistent advocates in either House of a system of leasehold tenure within the federal territory, moved for the early selection of a site in order that the great practical experiment in land nationalisation could be made. 1 6 The supporting speech by Senator Smith, a moderately conservative Free Trader from Western Australia merits attention.' 7 It is doubtful if many ofthe speeches during the first decade add much more to our understanding of the motives and hopeful expectations of the period. Smith said 22

-

If we pick a site where there is a large and flourishing town, as in the cases of Orange and Queanbeyan, the expense of buying out the property owners would be so enormous that millions of pounds would have to be expended before we could start building the Capital. I presume we would have to buy out the owners and cart away the whole of the existing town as rubbish. The references to Orange and Queanbeyan may not have been flattering but they do illustrate some of the factors which had to be considered when choosing a site for a well planned capital city. The Senator continued:

If we have an area of 10 miles square directly we decide upon the site of the federal capital there will be a perfect eruption of land grabbers syndicates and speculators who will rush over to buy up the land all around with the idea of forming suburbs for the people to dwell in. The consequences will be that the people of the Capital instead of living within the Federal Territory, will reside in suburbs belonging to private people and the imntense revenue the Commonwealth should receive as ground landlord will go into the pockets of the speculators. Senator Smith was a strong advocate of the selection of a very large area for the territory for the seat of Government and an equally strong believer in the Commonwealth ownership of all the land within that area. He argued that: • . • if we select a large area, not only will we draw an enormous revenue, increasing every year, from the Crown Lands of the federal territory - and I hope it will be put on record that not one inch of that

territory shall ever be alienated from the Crown in freehold - but we shall have the opportunity and advantage of having a federal territory in which to put to practical test many of the social problems exercising the greatest brains of the world for many years past - the federal territory will .fulfill very much the same functions as a model farm fills in regard to an agricultural area. We can there test these various social problems —and if we find they are successful they can be planted out in the Commonwealth. Such questions as land nationalisation and the nationalisation of the liquor traffic can be tried in the capital and if it is proved that they are successful we have very good warrant for assuming that they will apply equally well throughout Australia. To attribute influence is a hazardous and speculative business - it depends on all sorts of assumptions for accuracy - and yet it may be permissible to attempt to locate the inspiration for this concept of the federal territory as a social laboratory, a trend setter for legislation and for administrative practices. The idea was occasionally expressed during the Convention' 8 years but in the first decade of federation it was a regular theme of Parliamentary debates. Probably the strongest influence was Joseph Chamberlain's 23

programme of municipal socialism in Birmingham during the early 1870's. Chamberlain's reforms were, in their day, considered radiàal, even revolutionary. They attracted world wide attention for decades. Ebenezer Howard's Garden Cities of Tomorrow (1898) which was published after this concept was first expressed could perhaps have been an added influence in the early Parliaments. The debate on Smith's motion did not reveal opposition to the establishment within the federal area of a leasehold system of land tenure but it did disclose that there were many who had doubts about its success. The main point seemed to be that people would be quite willing at first to accept leasehold but having acquired it they would clamour for freehold and returning members pledged to grant it they would force Parliament to give it to them. Richard O'Connor, Government leader in the Senate, expressed sympathy with the desire to have a large area included in the federal territory but he emphasised the final decision would depend on circumstances beyond the Government's control. If the area was Crown Land ceded to the Commonwealth by the State of New South Wales without any payment the Government would not be particular how large the area. If on the other hand the territory was such that the Commonwealth %had to pay for it, then however desirable it might be to have an immense area the choice would more or less be restricted by considerations of cost." The size of the area to be selected for the federal territory was made an issue in the House of Representatives on 19 July, 1901 when King O'Malley (Labor. Tas) moved:

That in the opinion of this House, it is desirable in the interests of human progress that the Government secure an area of not less than 1,000 square miles of land (i.e. 640,000 acres) in a good healthy and fertile situation, the ground only to be let on building or other leases to utilizers, all buildings to be erected under strictGovernment Regulations, with due regard to public health and architectural beauty. 21 O'Malley had been assisted in the preparation of the motion by Austin Chapman (Protectionist: Eden Monaro: N.S.W.) but it was seconded by Hume Cook, a moderate conservative from Victoria and an advocate of a brand of municipal socialism which would present to the world a spectacle the world has not previously seen - an entire city, and all connected with the city owned and managed for the people of Australia.2 2 The idea of a planned city and positive covenants in leases are evident in the motion but in the debate which followed speakers were almost entirely concerned with the unearned increment in land values which would be created by the expenditure of public money. Prime Minister Barton however considered the motion should be reworded and he moved as an amendment: 24

That in the opinion of this House it is desirable in the interest of human progress that the Government secure an area well watered, healthily situated and large enough to meet all possible requirements and secure to the Commonwealth the benefits to accrue from the position of the capital, such area when secured, to remain forever the property of the Commonwealth; the ground only to be let to utilizers, all buildings to be erected under strict regulations with due regard to public health and architecturalbeauty. 23 Barton informed the House that it was the firm intention of the Government to see that there would be no room for the land speculator in the federal area. Wherever else he may have free play I think his claws should be off the site of the federal capital, 24 The motion as amended was passed without division. The size of the proposed federal territory became a matter of the utmost importance in the minds of these experimenters in land nationalisation. To some a very large area was essential if the experiment was to be effectively tested. To others the experiment should be made in a small area to minimise interference with vested rights. This question was not settled in the year 1901 or the following year but it was Edmund Barton who expressed what was probably the majority view on the proposed capital city. The Prime Minister appeared to find the constant description of his Government's land policy as an experiment in land nationalisation unattractive and in one of his last speeches in the House he set out what he regarded as the fundamental reasons for a leasehold tenure in the yet to be selected territory for the seat of Government. The contents of this speech merit quotation at length. Barton said: I desire to say that Jam definitely of the opinion that the Commonwealth should resume all private lands within any area that is selected, not necessarily for the purpose of driving out those who have acquired the titles of those lands, but for the purpose of bringing them more entirely under the control of the Commonwealth, and of adopting within that area such a land system as may commend itself to Federal Parliament, so that should it prefer a system of leasing to any system of alienation it may be perfectly free to give effect to that policy. I say again - as I announced a little more than two years ago in a speech at Maitland, of which I have sometimes heard - that Jam definitely of the opinion that, within the area that is chosen, the Commonwealth should be the landlord or the proprietor of every square inch of private land, no matter how generous and how fair it may be, and I have every confidence in its disposition towards the occupants of that land. As the expense of going further in the erection of the capital increases, as it may largely increase, there will be a progressive settlement which will tend to swell the revenue derivable from the land 25

within the federal area, and thus provide a fund, not only for meeting interest, but also for the extinction of debt. It does not follow that because the resumption of land will cost money it will be an extravagance. No doubt as time goes on, if Parliament does not see fit in the interests of the various component States to vote sufficient sums of money to carry out all public works out of revenue, it would be a proper thing to take into consideration whether we should not establish some system which will be continuously productive of revenue to meet the possible interest of any loan. I believe that if that were done anything that we might propose in that behalf for the purpose of completing this capital in course of time would be received by the public, creditor with perfect favour simply because he would have a gilt edged investment. I prefer, not for every purpose, but as a business proposal for this purpose, the system of leasing, with periodical reappraisement, on fairly long leases the terms upon which you will propose to erect your capital will need an increasing revenue of a certain kind and at the same time the assurance of the continued tenure of land in the hands of the Crown, so that fund may never be disturbed. Taking these matters into consideration, I think as a mere business proposal a system of leases with periodical reappraisement will be about the best manner in which we can set about the meeting of any expense which we may incur in connection with this project. The emphasis on the revenue to be obtained from land ownership in the federal territory had become more of a political necessity than ever. A majority of those who had even bothered to vote in the referendum had voted in favour of a rigid Constitution which necessitated the selection and at least some development of a territory for the seat of Government. But on second thoughts no one was willing to pay for it. What better escape from the dilemma was there than to generate a belief, to make a claim that the as yet unknown residents of the as yet unselected territory would meet part or even all of the expenditure involved. This Untapped source of riches was now being described as a handsome endowment for all time. 26 But the Press was not enthusiastic. To newspaper editors the subject of land tenure within the federal area had lost importance. All around Australia they began or accelerated a campaign of pouring scorn on the idea of what they termed a bush capital, of criticising the expenditure of any public money, however obtained, on such a ridiculous project !27 The newspaper onslaught on the proposed federal capital city found very little support in the first Parliament. The Representatives and Senators alike were fascinated by the possibilities of the 'experiment in land nationalisation. The ardent advocacy of William McMillan, Deputy Leader of the Free Trade Party and a member chiefly distinguished by his conservatism deprived the question of all party significance. He felt it necessary however to warn the Government against any half measures - every square inch of land OTR

within the federal area must be acquired and a system of leasehold tenure operate to the complete exclusion of all other tenures. 28 The choice of a site for the new capital was the subject of many, resolutions, visits of inspection, a Royal Commission 29 and finally the 1903 Seat of Government Bill. The House of Representatives chose Tumut and the Senate chose Bomb ala. Some English newspapers ridiculed the idea of a federal capital called Tumut. 30 The name was said to be too quaintly modest for a capital city. Neither House would give way and the Government quietly dropped the Bill. The intention of the Government as expressed in the 1903 Bill was that an area of about 1,000 square miles was to be the federal territory. Edward Braddon, a conservative member and former Premier of Tasmania aligned himself with those who dreaded the expenditure of public money which could be involved in the erection of a federal capital. Although he urged extreme caution and expenditure only on absolute essentials Braddon was not without hope for the future. In his view, if the federal territory was properly administered:

that is to say, if not one rood of it be alienated but all of it let on lease, renewable from time to tine upon, say decennial assessments the rentals derived will prove ample to defray all the expenses connected with the establishment of the federal city.3 1 The approval given to a leasehold system-within the federal area in these early years was of a general nature. No speaker seemed prepared to go beyond open endorsement and put forward ideas as to what particular provisions should be included in the legislation establishing the system. G.B. Edwards, moderately conservative Free Trade member for South Sydney, was a partial exception to this reluctance to be committed on details In 1903 numerous public meetings were held in Sydney to discuss possible amendments to the Constitution to provide for the establishment of the federal capital in that City. Edwards condemned the meetings and denounced the appeal to taxpayers on the ground of economy as foolhardiness indulged in by people who had not even bothered to consider the economics of the matter. Pointing, out that the cost of the land on which to erect the necessary federal buildings in Sydney or in Melbourne would be at least 20 times greater than the cost of the land in any of the localities being proposed for the federal capital, Edwards maintained that the land in the proposed localities could be obtained at its prairie value - something between £2 and £5 an acre. He considered that with the rapidly increasing value of the land:,

we could naturally expect under. a leasing system - to get a rental sufficient to pay all the interest on any sum which I have known anybody extravagant enough to advocate as necessary for erecting the requisite buildings. 32 27

Edwards maintained that after the capital had been in existence 25 years and £5 million had been spent on it the city would be financially selfsupporting and not cost one penny of taxation. He foresaw a city of 50,000 people in 25 years, 100 miles of streets and 12,000 houses with one million feet of street frontages at an annual average value of £4 per foot. Reckoning that value at 20 years purchase or at 5 per cent he confidently predicted an income of £200,000 p.a. The claim by Edwards that 5 per cent for the unimproved value of the land was necessary as an annual land rent was probably the first mention of the percentage value rental. In any event 5 per cent was accepted without discussion and any lesser percentage *as soon dismissed as an inadequate return allowing for the costs of a Lands Department. 3 3 But as the year 1903 drew to a close the whole concept of a Government owned federal territory of about 1,000 square miles parcelled out to lessees was losing favour with a small and more conservative group of Free Trade Senators from New South Wales. The territory was being ridiculed as a thousand square mile Bellamy

Utopia. 34 The Seat of Government Act 1904 provided that the seat of Government for the federation should be within 17 miles of Dalgety in the south eastern area of New South Wales, contain an area not less than 900 square miles and the compensation for land payable by the Commonwealth should be the valuation of the land on 1 October 1904. The Act represents the confirmation of the agreement which had developed between the three political parties that the federal territory should be considerably larger in area than the 100 square miles minimum mentioned in section 125 of the Constitution. The first Commonwealth Labor Government was particularly disturbed about the £25,000 rental being paid by the Commonwealth annually to private individuals and corporations in Melbourne for office accommodation. Gregor McGregor, (S.A.) Government leader in the Senate, where the Bill was first introduced, considered that this expenditure necessitated a degree of urgency in selecting a territory and although he remained loyal to the decision to have a 900 square mile territory he expressed his personal belief that it would be more advisable for the Commonwealth to acquire an area of 5,000 square miles. Confident of the revenue to be obtained from the Commonwealth ownership of land within the territory McGregor forecast a time when the capital city would contain one of the greatest seats of learning in Australia maintained by endowments of land or by revenue derived from the rent of land. 3 Such glowing predictions of future revenue received a mixed reception. The debate on the Bill and on the amendment to insert 5,000 square miles in lieu of the 900 square miles indicated growing doubts about the benefits to be obtained from the establishment of a system of leasehold tenure within the territory. The Seat of Government Bill was introduced in the Representatives on 20 July, 1904 by E.L. Batchelor, (S.A.) Home Affairs Minister. 3 6 Referring 28

to the experiment in land nationalisation Batchelor reminded the House that it was not specifically a Labor Party proposal and that in the first Parliament practically every member was in favour of it. The Minister was addressing the second Parliament, membership of which differed from that of the first. Edmund Barton, the ardent advocate of a leasehold system of land tenure in

the yet to be selected federal territory not as a wild socialistic experiment but. purely as a business proposal had left Parliament and gone to the High Court to interpret the Constitution he had done so much to draft. William McMillan, the conservative Free Trade deputy leader who had urged the nationalisation of every square inch of land within the federal territory had retired. Perhaps the Minister felt the necessity to reopen the question and reassure supporters of the intentions of his Government and to strengthen the faith of waverers by an appeal to the memory of the big names of the first Parliament. But land tenure was not the issue agitating members and enlivening the debates. The issue was the immediate cost of erecting any new capital city. The Minister referred to the many members who wanted to transfer the temporary meeting place of Parliament to Sydney and thus remove any need for the vast expenditure - to hold the erection of a permanent capital city over until the population had expanded and resources developed. In addition, numerous members from Sydney were uihappy with Dalgety as the site for the capital. The effect of the constitutional provision requiring the seat of Government of the Commonwealth to be within territory granted to or acquired by the Commonwealth was clear but it was ignored. Which State Government would be willing to cede jurisdiction over an area of at least 100 square miles within the boundaries of its own capital, the economic centre of its domain? The answer was obvious as was the force of the argument used by G.B. Edwards in 1903 that the establishment of the new capital in any existing State Capital would not reduce expenditure but would necessarily increase it. But such considerations received little attention in the heat of debate and the unclear thinking of many of the leading men of the day. The Seat of Government Act 1904 was one of the few legislative successes of J.C. Watson's Labor Government and if it had been carried into effect an area around Dalgety would today be the capital of the Commonwealth. But this was not to be. The area was considered by the Sydney press to be too close to the Victorian border. The New South Wales Government and Parliament took exception to the Act each asserting that it was for the Parliament of New South Wales first to offer a site to the Commonwealth and that as Dalgety had never been offered by the PirI1merit of New South Wales it could not be the capital. To ensure the message was received loud and clear Premier Carruthers travelled the State threatening secession from the Commonwealth if the selection of Dalgety 'as maintained. He withdrew the Gazetted Notices of 2 July, 1904 which reserved from sale or lease any Crown Lands in the vicinity of Dalgety., The Notice had been Gazetted by

29

former Premier John See who, as Premier, had offered the Dalgety site to the Commonwealth. The effect of the withdrawal of these Noticei was a rapidly diminishing area of unalienated Crown Land which under the Constitution the Commonwealth would obtain without any payment. This spelt the beginning of the end for Dalgety as the site for the federal capital. Most of that which is written as the story of the abandonment of Dalgety and the selection of the Yass-Canberra site can be disregarded as superficial. To understand the change it is necessary to resist putting any emphasis on the events and incidents of the year 1908. The Sydney press selected Canberra in 1905 and declared its choice in such vigorous, if not threatening, terms that thereafter the issue was never in doubt. 31 It remained only for certain leading politicians to announce their inevitable conversion. This they did in 1908. The years of enthusiasm for the experiment in land nationalisation had faded by 1905. The whole idea of a capital city was under critical review. Prime Minister Deakin believed that in choosing a site for the capital members should not consider themselves or succeeding generations as it had to be recognised that the seat of Government would certainly not be more than a mere township for many years. Deakin doubted whether it would ever be a great city no matter where it was situated. He rejected the objections that a capital city would be too costly. In My opinion, said Deakin, the cost should be small and need only be small - it seems preposterous to contemplate the erection of palatial buildings in any capital that we may choose. We ought not to be above accepting the simplest accommodation - without descending to the modes(y of the wattle and the daub, anything that will shelter honourable members from the inclemency of the weather ought to be good enough for us, and anything which will shelter our public servants during the 3 or 4 months of the year which they will be in the federal capital ought to be sufficient for them. 38 The preoccupation with costs during the early years of federation is not difficult to understand. The Federal Government did not enter the personal income tax field until 1915. Upon Federation it was assumed that Federal Government revenue would come from the returns of its Departments, particularly the Post Office, and through indirect taxation in the form of customs and excise and from its ownership of land within the area to be chosen as the territory for the seat of Government. As late as the financial year 1909-1910 of the £15,500,000 revenue collected by the Federal Government all but about £200,000 was obtained from customs, excise and the Postmaster-General's Department. In 1910 however a fresh source of income was opened by means of a Land Tax Act. This was a tax on the capital unimproved value of land. It was putting into practice the method advocated by Henry George of securing the rent of land for public purposes and at the same time destroying or weakening the system of private land ownership. George's aim was to convert freehold tenure into a kind of rent paying leasehold. 30

The Land Tax Act 1910 thus gave expression to political ideas on land tenure currently popular. In Deakin's view the new Act was unconstittitional. Its advocates claimed that it would make it unprofitable to hold big estates and would foster closer settlement. These were popular objectives but there is no doubt it was also designed to be a new source of much needed revenue for the Federal Government.

The Labor Party had come into power determined to establish old-age and invalid pensions, maternity allowances, an Australian Navy, the trans-continental railway and Northern Territory development - this would mean nearly £5 million p.a. Customs and Excise which were until 1910 the only source of federal tax revenue were inadequate. One or two million pounds from the big hated landowners would therefore be useful. 39 The Seat of Government Act 1908 repealed the Seat of Government Act 1904 and provided that the seat of Government was to be in the YassCanberra district. The territory to be granted to or acquired by the Commonwealth was to contain an area of not less than 900 square miles and have access to the sea. The amount of compensation to be paid by the Commonwealth for land was not to exceed the value of the land on 8 October 1908. The 1908 Act should have been th1e end o what is euphemistically described as the battle of the sites. But it was not. The substitution of YassCanberra in lieu of Dalgety as the territory for the seat of Government was, with diminishing intensity, a source of dissension, a cause of much bitterness for decades. The Fisher Government (Labor) embittered its relations with its supporters for its part in the selection. 4° The denunciations came from all around Australia and from people of all political persuasions. Particularly strong opposition to the substitution came from Queensland. One Senator castigated New South Welshmen for their ma-statishness and denounced New South Wales as a slippery customer with an unparalleled record of absolute turpitude in the selection of the capital. 4 ' Sydney commercial interests were seen as the real instigators of the substitution. Another questioned whether New South Wales should not be put out of the federation. A particular point of criticism was the stratagem employed to secure a combination of votes. Yass-Canberra was joined as one site with the result that the very site which received only one vote at every ballot is that on which the federal capital is to be established. 42 While the 1908 Mt finally decided the general district within which the seat of Government was to be situated it yet remained to determine the actual territory within that district and to provide the machinery for the acquisition by the Commonwealth. Home Affairs Minister, Hugh Mahon (Labor. W.A.) issued instructions to C.R. Scrivener, District Surveyor, to make a thorough topographical investigation of the Yass-Canberra district in order to place such facts before the Minister as would enable Parliament to decide on the most suitable territory for the purposes of the seat of Government within that district. 31

In February, 1909 Scrivener reported that he had made an examination of the area and submitted reports upon possible sites. The Minister thereupon appointed a Board comprising: Colonel D. Miller, Secretary Home Affairs Department, Lt. Colonel P. Owen Director-General Public Works, Colonel W. Vernon, Government Architect New South Wales, and C. R. Scrivener, to consider the reports and advise the Minister generally with respect thereto. The Bpard concurred with Scrivener in his selection of the federal territory and recommended its adoption. The Board also made some other recommendations one of which was that a preliminary investigation be made of practical routes for a railway between the City site and a port. The Board's recommendations were carried out and a report was made to the Minister advising that an area of about 1,015 square miles around Canberra should be acquired, together with an area of about 2,300 acres at Jervis Bay for the purposes of a Commonwealth port. The Board's recommendations were adopted by the Commonwealth Government and on 20 July, 1909 Prime Minister Deakin forwarded particulars of the proposed territory to the Premier of New South Wales and invited him to take steps under the Constitution to pass a State Act for the surrender to the Commonwealth of sovereign rights over the territory. Section 111 of the Constitution provides:

111. The Parliament of a State may surrender any part of the State to the Commonwealth and upon such surrender and the acceptance thereof by the Commonwealth such part of the State shall become subject to the exclusive jurisdiction of the Commonwealth. The Premier of New South Wales submitted a proposal for the transfer to the Commonwealth of an area comprising 900 square miles differing from the Commonwealth's proposal in that the towns of Queanbeyan and Captain's Flat were excluded from the area to be surrendered. On 18 October, 1909 the Prime Minister of the Commonwealth and the Premier of New South Wales subject to the approval of their respective Parliaments, agreed to the surrender by the State and the acceptance by the Commonwealth of the territory as proposed by the Premier. The Seat of Government Surrender Act 1909 (N.S.W.) and the Seat of Government Acceptance Act 1909 (Commonwealth) ratified and confirmed the Agreement between the Prime Minister and the 'Premier whereby the state agreed to surrender and the Commonwealth agreed to accept the 900 square miles in the Canberra district as the territory for the seat of Government of the Commonwealth. The territory was described in the Schedule to the Acts and the Governor-General was authorised to declare by proclamation

that on and from a date to be proclaimed the territory as described was accepted as a Territory of the Commonwealth. The Seat of Government Acceptance Act 1909 provided that all laws in force in the Territory immediately before the day it was to be proclaimed a territory of the Commonwealth were, so far as applicable, to continue in force until other provision was made. The second Fisher Government which assumed office after the 1910 election had reasons to make other provision promptly. No Labor Government could afford even indirect responsibility for the operation in its territory of certain New South Wales legislation relating to industrial disputes. The Seat of Government (Administration) Bill, introduced into the Representatives on 9 November, 1910 declared the offending N.S.W. legislation inoperative in the Territory and made provision for general administration. Home Affairs Minister King O'Malley spoke of the Commonwealth at last coming into its own kingdom after many years of waiting, of the Crown Land in the area to be ceded to the Commonwealth by the State without any payment and of the Government's intention to acquire privately owned land in the Territory. He continued: • the intention is that the Territory shall be governed entirely by the Commonwealth. Bruce Smith (Cons. N.S.W.) By Star Oamber procedure? Dr. Carty Salmon (Protectionist Vic.) Will the effect of the Bill not be that the Minister for HOme Affairs will really govern the territory? O'Malley: Ido not know of any other man better qualified for the work. If I have that pleasure for a while the honourable member will see a new Eden there. When I viewed the site from where the Military College will be placed it seemed to me that Moses, thousands of years ago, as he gazed down on the promised land saw no more panoramic view than I did... But the Minister's imagery did not pass unchallenged. One of the strongest objections to the selection of Canberra was its alleged lack of water supply, and the Minister's vision on this occasion was contrasted with his earlier views when he declared a cow would be in danger of dying from thirst if it visited Canberra district without carrying a water brg with it. The Minister was reminded that although, he may desire to pose as a second Moses, looking over the promised land he has not the power to strike the rock and cause water to gush out. Undaunted by such irrelevancies the Minister proceeded to declare the Government's land policy in the Territory. The importance of this policy is that it has been followed by successive Governments to the present day. O'Malley announced that as there was no immediate need to expend large sums of money in purchasing privately owned land the Government had decided on a limited land acquisition programme. Only those lands contained 33

within the area surveyed for the city site and such other portions as would be required for some special purpose in the foreseeable future were to be acquired. The shortsightedness of and ultimate injustice which was inevitable with such a policy are clear today. But in 1910 it seemed reasonable that unless the Commonwealth had some immediate or not too distant need for privately owned land it should reduce its expenditure by leaving the owners undisturbed. The continuance of this shortsighted policy for over 50 years explains the continuance of some freehold land in the Territory even today. The Bill contained a clause providing that until the Parliament makes other provision for the establishment of a local legislature for the Territory the Governor-General may make Ordinances having the force of law in the Territory. G.B. Edwards objected to the clause. The wording was said to presuppose the necessity for the establishment of a local legislature which was not even contemplated by the Constitution. In Edward's view the great city

which might grow upon this site is not going to be governed by the residents of the city but by the people of the whole Commonwealth. O'Malley declared that he had always been of the same opinion and accepted an amendment that the words establishment of a local legislature be deleted and the word government be inserted in lieu thereof. The Government leader in the Se'nate, Gregor McGregor, had referred to this question of territorial government the previous day. When introducing the Northern Territory (Administration) Bill McGregor said:

• . . there are two kinds of territories for which provision is made in the Constitution. They are distinct from each other and have varying possibilities. One class of territory has to be ceded to the Commonwealth for the purposes of the federal capital. • . that is a class of territory which can never become a state of the Commonwealth. In other words, it can never receive anything more than the powers of municipal government. But on 9 November, 1910 it was not only the question of territorial government which was disturbing the moderately conservative Edwards, at that time the member for North Sydney. He complained that the Minister had failed to adequately state the Government's land policy. Our difficulty he said, is to find out what this policy is.

I wish to know whether it is intended to resume all the alienated land in the Territory. The clauses should be more definite. . . it has been the almost unanimous opinion of this Parliament that there should be no alienation of Crown Lands. Why is it not in this Bill? The Commonwealth will spend some millions of pounds in the Territory and should profit by the increase which that will give to the land. We should buy out all existing owners irrespective of contracts.. . The several Ministerial assurances that there would be no alienation of Crown Land in the Territory were apparently not considered adequate. The 34

Bill was recommitted and the opening words of section 9 of the Seat of Government (Administration) Act 1910 were inserted:

No Crown Lands in the Territory shall be disposed of for freehold...

tvfl'

estate of

Here then is the linch pin of the leasehold system which operates in the Territory. Section 9 does not establish that system - that is done by later Ordinances - but as the Commonwealth (Crown) now owns about 87% of territory lands the section ensures the continuance of some form of leasehold tenure if not the present form. The repeal of section 9 need not necessarily mean the end of the Territory leasehold system but the step to its abandonment would be a short one. No one Government, no one political party, no one man can claim the Canberra leasehold tenure which results from the above prohibition, as its or his own particular contribution to Australian social or political development. The tenure must be seen in its historical perspective. The Australian yearning to designate some public figure or figures as the father of institutions or programmes must be ignored when considering the origin of the Territory leasehold system. To indulge the weakness on this occasion would involve an even greater degree of historical suppression s and distortion than is usually the case. Justice demands an acknowledgement of the simple truth that before and during the early years of Federation there was a widespread belief in the need for Government ownership of all the land within the proposed federal territory. The demand that this ownership should be obtained was probably more universal than any public demand in Australia has ever been. There were a few who questioned whether a leasehold system could operate successfully but their sceptism never amounted to outright opposition.

NOTES ON CHAPTER 2. 1.

Commonwealth Parliamentary Debates (PD.) 3:2809; 9 3:5 239

2.

Report on Australian Capital Territory Freehold Lands Inquiry

3.

Quick and Garran, The AnnotatedConstitution of the Commonwealth of Australia, p. 982. Sydney, Angus and Robertson; Melbourne. Melville and Mullen.

4.

Sawer, G., Australian Federal Politics and Law 1901-1929, p.4 Melbourne, M.U.P., 1956.

5.

Sydney Morning Herald, 18 January, 1901. Official Report of National Australasian Convention Debates, Adelaide, 20 April, 1897.

6. 7. 8. 9.

by the Parliamentary Joint Committee on the Australian Capital Territory, 1968.

South Australian Parliamentary Debates, 27 August, 1897. 8 February, 1898. La Nauze, J.A.; (ed), Federated Australia: Selections from letters to the Morning Post 1900-1910 by Alfred Deakin, Melbourne, M.U.P., 1968.

35

10.

Bolte, H. Premier of Victoria, quoted in The Canberra Times 19 September, 1968.

11.

P.D., 19:1515

12.

PD., 19:1967 Sydney Morning Herald, 5 and 13 January, 1901. Sydney Morning Herald, 19 and 26 February and 11 March, 1901. Garran, R.,Prosperthe Commonwealth, p.263 Sydney, 1958.

13. 14. 15. 16. 17. 18.

PD., 1:774 PD., 2. 1785 See speech by Dr. J. Cockburn, National Australasian Convention Debates,

Op. cit., 20 April, 1897. 19.

RD. 2:1790

20. 21.

PD. 2:1788

22.

RD. 3:2807 P. D. 3:2810

23.

PD. 3:2815

24.

PD. 3:2817

25.

PD. 17:5278

26.

PD. 17:5411

27.

P.D. 3:2822; 19:1469

28. 29.

RD. 17:5283 Parliamentary Papers 1903, 2:211

30.

RD, 17:6065

31.

RD. 17:5688

32.

RD. 17:5719

33. 34. 35.

RD. 17:6159 RD. 17:6056 P.D. 19:1468

36.

RD. 20:3404

37.

Sydney Mail, 28 October, 1905.

38.

P.D. 30:7412-3 Heaton, H., Quarterly Journalof Economics. 1924-1925.

39. 40. 41. 42.

The Argus, 20 September, 1910. RD. 48:2809

4

P.D. 59:5970

36

CHAPTER 3

THE YEARS OF DELAY

The Territory for the Seat of Government which was vested in the Commonwealth as from 1 January, 1911 consisted of an area of 576,000 acres', approximately 250,350 acres being Crown lands which were, in accor dance with Section 125 of the Constitution Act, granted to the Commonwealth without any payment. The Commonwealth therefore commenced its jurisdiction in the territory as the absolute owner of over 44 per cent of the land. The rest of the territory was made up of freehold estates or one or other of the varied assortment of tenures which originated with the Crown Lands legislation of nineteenth century New South Wales. The most frequent of these tenures in the territory was undoubtedly the Conditional Purchase, a form of instalment purchase from the Crown for which a fee simple title issues after all conditions, including payment of purchase money, have been fulfilled. The rights which had accrued and would accrue to these Purchasers were acknowledged in the legislation relating to the acceptance and administration of the territory. Section 7 of the Seat of Government Acceptance Act 1909 provides: 7 All estates and interests in any land in the Territory which are held by any person from the State immediately before the proclaimed day shall, subject to any law of the Commonwealth, continue to be held from the Commonwealth on the same terms and conditions as they were held from the State. Section 9 of the Seat of Government (Administration) Act 1910 provides: 9. No Crown lands in the territory shall be sold or disposed of for any estate of freehold, except in pursuance of some contract entered into before the commencement of this Act. The proclamation vesting the territory in the Commonwealth as from • 1 January, 1911 has perhaps more legal than historical significance. The fact is that Commonwealth officers had actually been working in the area some months earlier. From January to June, 1910 all officers engaged within the territory lived and worked in calico tents. Office accommodation in the shape of a malthoid and wooden building was then provided, it being necessary as shelter in which work on the contour maps could proceed. But it was not until January, 1912 that the first house was available and Quarters for the officers were not completed until later in that year. These Quarters, which were by the 1920's known as the Bachelor Quarters, later became known as Acton Guest House and later still they became the temporary location of John XXIII University College. 37

The Seat of Government Acceptance Act 1909 provided that all laws in force in the territory immediately before the proclaimed day would, so far as applicable, continue in force until other provision was made and the Seat of Government (Administration) Act 1910 laid down the method of law making in the territory. Section 12 provided: 12(1) Until the Parliament makes other provision for the Government of the Territory, the Governor-General may make Ordinances having the force of law in the Territory. The administration of these Ordinances and of Regulations made thereunder and of the two Acts last mentioned and the Seat of Government Act 1908 was the responsibility of the Minister of State for Home Affairs. Other Ministers were later to become responsible for the operation of certain Ordinances but in the beginning the Minister for Home Affairs was the sole authority. In 1916 the Ministry's title was changed to Home and Territories and the Department of Works and Railways was created to assume responsibility for all matters connected with construction. This joint administration continued until the end of 1924. The actual management of the Territory was the responsibility of Colonel David Miller as Secretary, Home Affairs Department until August, 1912 when the Minister appointed him Administrator of the Territory.' The Government's intention before the territory was vested in the Commonwealth was that the capital city should certainly be constructed and probably designed by the officers of the Home Affairs Department. In April, 1911 however the Government, on Secretary Miller's recommendation invited competitive designs for laying out the city. One Hundred and thirty seven designs were received and the first prize of £1750 was awarded to -Walter Burley Griffin of Chicago, U.S.A. King O'Malley, Minister for Home Affairs, appointed a Board of officers to investigate and report as to the suitability of the designs for adoption for the purpose of the lay-out of the City. This Board, which became known as the Departmental Board, consisted of: Colonel David Miller, Secretary, Department of Home Affairs, Colonel Perty T. Owen, Director-General of Works, Charles Robert Scrivener, Director of Commonwealth Lands and Survey, Geo. J. Oakeshott, Works Director, New South Wales, J. S. Murdoch, Architect, Department of Home Affairs and Thomas Hill, Works Director, Victoria. The Board reported on 25 November, 1912 that it was unable to recommend the adoption of any of the designs submitted and advised that a plan prepared by the Board itself should be approved. The Minister reluctantly accepted this advice, mostly it seems because of the Board's reports on the great and prohibitive cost of carrying Griffin's design into effect. The Board's plan was said to be one concocted on the combination salad principle containing a bit of attraction for everyone, even including those who begrudged 38

Canberra an existence. The plan differed radically from Griffin's particularly in respect of residential areas, the ornamental lake and the positioh of the Central Railway Station. The plan was published and Griffin wrote from Chicago to the Minister suggesting that he should visit Australia to be on the

ground in consultation with your Board about the revised plan4

.

The Board Chairman, Colonel Miller, advised O'Malley strongly against

any such consultation. The responsible officers of the Department are seized of all the facts. , ... they are thoroughly competent to carry out the scheme.. it would be most unwise to interfere with them. 5 The Government accepted the advice.' It is interesting to speculate that if the Labor Government had been returned at the elections held on 31 May, 1913 Canberra would have been erected or developed in accordance with the plan prepared by the Departmental Board and Walter Burley Griffin's association with the construction of the capital city would not have even commenced. But this belongs to the limitless world of what might have been but wasn't. The Labor Party lost the elections by a narrow margin and the Fusion Party under the leadership of Joseph Cook took office. The Fusion Party was so called because it was a fusion of Freetraders and Protectionists. The unexpected growth and electoral success of the Labor Party made this unidn of opposites inevitable. By 1913 the title Liberal Party was coming into use to describe the Fusion but as the party underwent numerous changes of name it will be safer to refer to it as the non-Labor Party and to its members, in the absence of any special circumstances, as non-Labor members. The Cook Government was sworn in on 24 June, 1913. The Prime Minister was also Minister for Home Affairs but the Assistant Minister, William H. Kelly handled the federal territory. Meanwhile the Board's plan for the lay-out of the capital city was being greeted with derision. In London, Patrick Abercrombie, a leading English

Town Planner, said of it: The new plan is evidently the product of a Department whose personnel is utterly untrained in the elements of architectural composition, whose mind is a turmoil of confusion.. . Indeed,, the whole lay out is entirely outside the pale of serious criticism. . . (and) reminds us of a third-rate Luna Park. From Sydney the plan was denounced as the work of an amateur who had yet to learn the elemnen tary principles of laying out a town.8 Engineers and architects around Australia began to petition for a Royal Commission to examine the Board's plan, but Kelly, who maintained that such an event would give objectors to the federal capital an excellent opportunity to delay the progress of work at Canberra, advised Prime Minister Cook in a minute dated 10 July, 1913 against the granting of the petition. 9 Kelly expressed his high admiration for the officers who had been dealing with Canberra but he insisted that as the new science of town planning was not 39

4

their speciality it was essential that the services of Griffin, a specialist in the field, should be obtained.' 0 The Departmental Board's objections to the Government decision to invite Griffin to Australia Were over-ruled and Board members were informed by Kelly that he expected absolute loyalty in carrying out the decision. But the expectations were never realised. Loyalty was not forthcoming and Kelly disbanded the Board on 18 October, 1913 and appointed Walter Burley Griffin as Director of Federal Capital Design for a three year term on an annual salary of £1050. The Assistant Minister's enthusiasm about the appointment was evident when he informed the House that: . . . since we have seen Mr. Griffin we have realised that in him we have an authority in town planning such as we certainly have never seen before in Australia.' 1 This Ministerial faith in Griffin was naturally not shared by the Departmental officers who had rejected his plan and objected to his appointment. It is possible that all may have gone well for Griffin and his plan had Kelly remained at Home Affairs. But this is only possible. There is plenty of evidence that Griffin was being ignored and frustrated even in Kelly's time as Assistant Minister. Griffin found that P. T. Owen, as Director-General of Works, considered construction work going on at the Federal Capital was none of Griffin's business. In addition, Owen informed Griffin and the Minister that Griffin's city plan violated essential principles. The Cook Government considered the appointment of a Commission as a way of overcoming the difficulties which had arisen and in March, 1914 Kelly asked Administrator Miller to submit proposals. Miller suggested that Canberra and the Federal Territory generally be financed wholly by revenue from its land, the Government to pay rent at the same rates as would be charged to individuals. Thus the Government would no longer need to face charges of extravagance in voting public funds for Canberra. Miller also recommended establishment of a Commission possessing almost absolute powers, with himself as Chief Commissioner, Owen and T. Hill, Victoria's Director of Works, as fellow-Commissioners, and Griffin merely as consultant.' 2 The Government had not finally decided what to do when it faced the electors. The result of the election held on 5 September, 1914 was that the Cook Government was defeated and Andrew Fisher formed his third Labor Government. William Oliver Archibald (S.A.) became Minister for Home Affairs. Archibald, who regarded Griffin's appointment as a grave mistake and referred to him as the yankee bounder declared himself to be suspicious of Jack of all trades who took up time with grand theorising, moonshine and dreaming. The continuing trouble at Canberra between Burley Griffin and the Departmental officers caused the appointment of a Royal Commission in 1915. The Commission examined a battlefield strewn with wounded pride, pettiness, convenient lapses of memory, Ministerial prejudice, false reports and charges. The Commission found that Griffin's powers were usurped by certain officers, that necessary information and assistance were withheld from

4

him, that his office was ignored, that his rights and duties under his contract were denied, that false charges of default were made against him, that the Minister and members of the former Board endeavoured to set aside his design and that in the Department there was a combination (including the Minister) hostile to Griffin and to his design for the capital city. The Commission concluded that the Minister should have either cancelled Griffin's contract or allowed him to carry it Out. 1 " Andrew Fisher resigned as Prime Minister on 27 October, 1915 and a new Labor Ministry under the leadership of W. M. Hughes was sworn in. O'Malley was back at Home Affairs and he immediately reinstated Griffin in a position of authority. Departmental officers were instructed to obtain Griffin's advice before initiating any operation or matters in connection with the proposed federal city and to be readily responsive to instructions issued by Griffin. Thus for the next four years Griffin was in control of construction but in those years he was allowed only £8,744 for permanent work. King O'Malley, one of the more colourful of the early federal politicians, often maintained that it was only the fact of his birth 40 yards inside the Canadian border which prevented him from being President of the United States of America. O'Malley however made the original mistake of referring the designs to laymen for examination. He lost and never regained his earlier popularity with Departmental officers when he sided with Griffin in the dispute which followed. Often referred to as the Yankee, O'Malley excused his creation of and deference to the Departmental Board with a claim that any invitation by him to Griffin, another Yankee, to come to Australia to lay-out the Federal Capital City would have been further fuel for the anti-Canberra brigade and likely to be the cause of a public outcry. But Sydney born W H. Kelly's invitation to and contract with Griffin settled the matter and O'Malley began to express his real feelings. He considered town planning a comparatively recent innovation which architects were inclined to confuse with planning construction. He criticised Archibald for having sought the advice of a railway engineer on Griffin's proposal to construct a railway line to near the centre of the city site, a very able engineer, whom I appointed, but he knows as much about town planning as a bandicoot knows about the crucifixion. 15 The proposed railway station in or near the vicinity of the present Lonsdale Street was one of the many points of dispute. The Departmental officers considered it unnecessary, the railway engineer advised against it but Griffin, in one of his brief hours of authority, purchased the materials for its construction. He was still being criticised years later for having done so. 16 A permanent railway line was never built but for some years a narrow gauge service line was in existence and use. The members of the Departmental Board had believed, and not without sound reasons, that they and they alone would design the capital city. The

41

appointment of an outsider to perform the immense task and thus obtain the prestige and enduring fame which it would bring shattered theii hopes.' 7 The usual charges were made against Griffin - he had a chip on the shoulder, he was impractical, disloyal etc. The simple fact is that Griffin's personality or whether or not he had more saintly or endearing qualities than were recognised by his accusers is very largely immaterial. Walter Burley Griffin was an outsider and the reaction was inevitable.' 8 Assistant Minister Kelly was well aware of the emotions aroused I do not know of anything that has happened in any Department that has given rise to more friction or personal feeling than the rejection of the plan of the Departmental Board. 19 The Department's Chief Architect J. S. Murdoch's evidence before the Royal Commission is an indication of the intensity of the feeling against Burley Griffin and his plan. Murdoch said in evidence that he never had any desire to assist in building Canberra and would like to see the Federal Capital strangled for a hundred years. The building of a city in virgin country necessitates the completion of initial works such as the supply of water and sewerage before the erection of permanent buildings could begin. 4n area of about 12 square miles was set apart for the purpose of the City site. Henceforth the term the City Area comes into use. A few years later the term obtains a legal meaning and the area is clearly defined. But in the early years it was a reference to the undefined area of land whereon the federal capital city was to be erected. Plans were made to acquire all the privately owned land within a radius of 7 miles from the centre. In addition, other properties upon which constructional works such as bridges, reservoirs, weirs, pipe lines and a temporary railway from Queanbeyan were to be erected were also listed for acquisition. The expenditure of £350,000 to effect the above works programme was grudgingly approved by Parliament. The expenditure was denounced as being almost sinful, a thing to be resisted by all with the true interests of Australia of heart .2 U The bitter feelings stirred by the abandonment of Dalgety and by the methods used to select Canberra had not abated by 1911. They were always evident, one member declaring Canberra to be this miserable Capital site, which was never wanted and never will be.2 1 William Lyne (Non-Lab. N.S.W.) described Canberra as an absolute abortion. . . on a muddy stream. . . selected only because of pressure by a Sydney clique. 22 (The Canberra suburb of Lyneham derives its name from William Lyne, opponent of Federation and one time Premier of New South Wales). Years later the story was told of how the two Houses of the Federal Parliament were eventually brought to agree on the site (then known as the Yass-Canberra district) for the capital city.2 3 The change in the Senate was said to have been brought about by a Senator who had been a wheat farmer. He changed his vote from Dalgety because he thought wheat would grow better at Canberra! 42

The attempts to picture Canberra as a second Washington having no resources, yielding no revenue and certain to be constant financial drain on the States were rebutted by a reminder that the real trouble in Washington was that they never owned the land, we shall. 24 There was however in addition to the do nothing or abandon Canberra groups yet another group - the men of caution. They warned the Government to hasten slowly and not make Canberra a great burden on the taxpayers by acquiring land which was not immediately required.2 5 The Loan Act 1911 authorised the Commonwealth Treasurer to borrow up to £600,000 to pay for land in the federal territory. Prime Minister Fisher informed Parliament that £600,000 would pay for nearly all the privately owned land it being the policy of the Government to acquire all such lands. 26 The Fisher Government was a Labor Government but on the question of the Commonwealth ownership of land in the federal territory that has not the slightest significance. Certainly some Labor members were more optimistic than some non-Labor members about the benefits to be obtained from the experiment in land nationalisation . 21 And certainly there were some nonLabor members who deplored what seemed to them to be a rapid advance towards socialism. 28 But the general policy that the Commonwealth should own every square inch of land in the federal territory was not in dispute. It was universally accepted as necessary and desirable and almost as universally demanded as the only satisfactory policy. 29 In the words of one non-Labor

member there were not two opinions on the question. 30 But unfortunately for Canberra there were many opinions as to whether a capital city was really necessary. Canberra had few friends in either party. Labor members were often in a quandary. Speaking on the Loan Bill of 1911 one such member congratulated the Government for its declared policy of acquiring all privately owned land in the territory and then announced his intention of voting against the Bill because of his opposition to spending public money on any federal capital, particularly Canberra.3 1 A few short years later the member, F. W. Bamford, was Minister for Home and Territories in the Hughes non-Labor Government. The reception given the Loan Bill in the Senate was more favourable. The emphasis was on the revenue to be obtained. Opposition Leader Millen had urged the Government to adopt a bold policy of land acquisition and avail itself of the revenue which would assist in the cost of building the Capital city. 32 Government leader McGregor commended the expenditure of £600,000 as a reproductive investment in the interests of the people, the Commonwealth receiving in return the benefits from the continually increasing land values within its territory. 3 The Governor-General, Lord Denman, in his address at the commencement ceremony held at Canberra on 12 March, 1913 apparently considered that he should not ignore the fact that the building of a Capital City was, and 43

had been for years, a subject of bitter controversy. Once again Commonwealth ownership of the land within the territory was advanced as an ahswer to the critics. Lord Denman said: • . . people say that this federal capital is too costly an undertaking. It is certainly not nearly so costly as it would have been to excise even a few acres for federal territory out of one of the great cities of Australia And I believe that the Ministers contend not without some force, that owing to the improvement of land values in the federal territory this is not likely to prove such a costly undertaking, 34 The first Commonwealth acquisition of land in the territory was effected on 25 February, 1911 when the 2018 acres known as the Acton Estate was taken over for administrative purposes. The area acquired in each year to 1920 was: Year

Area Acquired (in acres)

1911 1912 1913 1914 1915 1916 1917 1918 1919 1920

2,018 86,625 11,227 12,514 67,994 24,414 6,595 Nil Nil 1,040

The basic land problem facing the Government in the earliest years of Commonwealth jurisdiction in the territory was one of valuation and compensation. 3 What amount should be paid by way of compensation to each dispossessed land owner? The provision in the Seat of Government Act that the amount of compensation to be paid was not to exceed the value of the land on 8 October, 1908 could not resolve disputes. But it could and did create disputes as to what was the value of the land in 1908. By 1912 the land owners in the Territory had set up a Vigilance Committee to negotiate with the Government on compensation. O'Malley denounced the Committee, accusing it of attempting to take over the Government's task and settle compensation at its own figures. He insisted that no Government could become a philanthropic institution ready and willing to pay whatever amount the Committee determined. 36 The Estates, Homesteads, and Stations known as Acton, Glebe, Duntroon and Yarralumla plus a small portion of Sullivan's lands were all situated within what was the undefined city area from the earliest days. Glebe was

44

4

only a small area around St. John the Baptist Church but a good building erected thereon, the Rectory, gave the land extra value and it was purchased for £27.9.0 per acre. (The Rectory was soon being rented at about £56 per annum this being a five per cent return on cost price). The very much larger Duntroon Estate and Yarralumla Homestead were purchased for £4. 16.0 and £3.14.0 an acre respectively. The smaller Acton Estate was acquired for £5.9.0 an acre. By 1920 the Commonwealth had acquired over 200,000 acres of freehold at an average price of £3.15.0 per acre. O'Malley's handling of the land acquisition programme (or indeed of any programme) did not escape criticism. In this instance the most regular critic was Austin Chapman (Non-Labor) whose electorate of Eden Monaro adjoined the Territory. Chapman opposed the selection of Canberra as the site for the capital city. But once the selection was made he became one of the few members who consistently advocated development works in and occupation of the territory. On the question of land valuation Chapman accused O'Malley of being aregular czarwho shackled his officers, deprived them of any real power and determined valuations himself. 37 The Minister responded that as he had as much experience with land valuations as most men he was not going to be a rubber stamp and pay whatever price was asked. The prices which were being paid were seen by the Minister as likely to govern all future transactions in the territory. 38 He advised land owners to agree to the Departmental valuation or go on appeal to the High Court, the cheapest Court in the world. Chapman objected. He maintained that men of money could fight the Minister's valuations but the poor man could not. In his view to advise a poor man to go to the High Court was to invite him to ruin himself financially. Chapman never let up on the valuation problem. In 1915 he appealed to the then Minister Archibald to have a little backbone on the question of land valuation and provide a Land Act with some simple method of arbitration." He related the instance of how three small landowners were forced into ruinous litigation in connection with the acquisition of their land. But Archibald was not impressed. He assured the House that conferences between land owners and Departmental officers were held frequently and recourse to law only occurred when compensation claims were considered unreasonable in the light of all the information which the Department had gathered as to land values in the area. The Minister referred to an appeal where the High Court awarded a land owner as many hundreds of pounds compensation as he claimed thousands. 40 The land owners naturally enough did not share the Government's faith that all was well - that justice was being done without favour. Their feelings on the valuation question and on the acquisition of their land are recorded: the price paid to landowners at the time may be said to have been decided by the well-being and benevolence felt by one man following a good meal in congenial company. The one law for the big man and another for the small man now operated. Frederick Campbell, by threat45

ening legal action, did force the Government to raise its price, but the small man could not challenge the Governmen tin this manner. Thus it was that Springvale was sold for £1 an acre less than had been offered in 1908, when the rabbit plague was at its height and before improvements such as netting, dam sinking and scrub had been completed. The resumption of their land by the Federal Government came as a profound shock to the older farmers. That they could stay on as tenants made no difference to their way of thinking From the day of selection they had been free men on their own holding. With their own hands they had cleared and ploughed the virgin soil, built their houses, dug dams and in general moulded the selection to their heart's desire. Here they married, experienced joy and sorrow in raising their family and to have their own "vine and fig tree" was no empty phrase. Now all this was changed! They would be under the control of an outsider. They couldn't even cut down a tree without permission - they whose whole life had been a battle against the scrub! They viewed the situation in the way the old Boers viewed the coming of the British to Cape Colony, and like the Boers they trekked.4 1 The trials and tribulations of those whose land had been acquired attracted little attention (Chapman excepted) in a Parliament where it was being argued that nearly every public work in the Commonwealth ought to have precedence over the work at that Spot. 42 A delay of 50 years in the building of the capital city was spoken of as a mere nothing as we shall all be dead fifty years hence. 13 The widespread belief that the financial returns to be obtained by the Commonwealth from its land ownership would provide the whole or a substantial part of the money needed to build the capitalcity 44 very naturally inspired a further belief that all privately owned land should be acquired as quickly as possible so that the values which accrue to the land. . shall as soon as possible become public property. 45 A complete and prompt land acquisition programme was indeed the original intention Owners of land within the Territory were prevented from selling their land to speculators for the purpose of working up big prices against the Commonwealth But Governmental intentions are no more static than is legislation. The Seat of Government (Administration) Act 1910 amended the Seat of Government Acceptance Act 1909 to allow for payment for improvements on the land. The 1910 Act provided that in determining the compensation to which the owner was entitled the value was to be taken not to exceed the unimproved value of the land on 8 October, 1908 together with the value of the owner's interest in the improvements on the land at the date of the acquisition of the land. No time limit was put on the Government in effecting the acquisitions simply because none was considered necessary. . 46

. 47

It has never been assumed that the Government are going to leave the freeholds in the hands of the present owners for the next half century and 46

then resume them. The idea is the Government will acquire them as quickly as possible. 48 But the constant question in Parliament was When is the Government going to acquire all the land in the Territory? Fears were expressed that owners might be left in a prolonged state of uncertainty. The evasive reply that the Government would acquire all of the land at its 1908 value in due course was unsatisfactory to most questioners. It was argued in support of immediate acquisition that if land which was valued in 1908 was not acquired until say 1920 the cash compensation paid then would very likely be worth only half of what it would have been worth in 1908. This was said to pose a question as to whether the Government, by reserving to itself the right to acquire land whenever it pleased at its 1908 valuation, was under a moral obligation to the land owner to make a final assessment of value. And give them the unearned increment? interjected Minister Hugh Mahon. 49 Undoubtedly this was the majority Labor opinion on the subject. But Opposition Leader Cook urged the Government to acquire all the land in the Territory at the earliest possible moment and obtain the unearned increment itself. Cook warned the Government that Canberra would prove a veritable sink for Commonwealth money if all the land was not acquired and put to the best possible uses under the control of someone responsible for seeing that it gave an adequate return.5 0 The first Ordinance made by the Governor-General was the Provisional Government Ordinance, 1911 a machinery provision soon followed by the Rates Ordinance, 1911 the first of the revenue producing enactments. The Rates Ordinance defined the owner in relation to land as including the occupier, lessee, tenant or holder of the land. All land in the territory was declared rateable excepting land belonging to any occupied by or on behalf of the Commonwealth. Rates were and are payable apart from land rent. Also of interest was the declaration in the Ordinance that the unimproved value of the Crown land held under lease was deemed to be a sum equal to 20 times the yearly rent payable to the Crown under the lease or licence at the time 'when the assessment was made. The five per cent return was gaining legislative recognition. By 1912 the Government had spent £84,000 on the capital site and in return was receiving £4,800 a year in rents, rates and licences. O'Malley in- . vited members to tot up their figures and note that the Commonwealth was earning five per cent on its investment.' 1 But not all members were comforted with this information. Austin Chapman was one of them. He had begun his ten year campaign for the appointment of a three man Commission as in Washington to develop and control the capital city. He objected to the remote control of the Territory from Melbourne and called for Home Rule in Canberra. 52 But the very connotation of Home Rule was anathema in the Australia of those years. Chapman charged the Government with messing about in Canberra, with having no definite land policy. To him it was essential 47

that it should be made known to those holding land whether they were to have perpetual leases, 99 year leases or 21 year leases and whether there was to be any periodical valuation of the land.' He attacked what he considered the lack of any proper system of land administration and referred to the many complaints of mal-administration in particular those caused by the grant of leases to officers of the Lands Branch in Canberra and to their relatives. And then he told the story of the unfortunate mailman who asked for permission to pitch a tent for shelter when he went into the Territory on his run and of O'Malley's curt reply that no such temporary occupation would be allowed. He decried as an act of sacrilege the resumption of an old fashioned Church with God's acre surrounding and warned against any further desecration such as a disturbance of the Churchyard graves. Once again O'Malley's handling of the land valuation problem came under critical review. Chapman threatened to move a Parliamentary censure motion against O'Malley if the Minister went ahead with his proposal that the federal capital city be named Captain Cook or Shakespeare. In reply O'Malley rejected criticism of his administration. Claiming to be a keen business man 54 the Minister insisted he was not going to have any rooster dictating land values to him. He did agree however to allow the mailman to pitch his tent provided he signed an agreement to shift when required and to claim no vested interests. 5 On the Church acquisition O'Malley said: . . . we have resumed the Church, not that we are going to do anything with it, but so that in the natural order of things it will be on the same basis as everything else in the Territory. We will not interfere with the Church in any way, we shall let her operate in the future as she has in the past until perhaps, centuries hence, something else may happen. 56 The Labor Government obtained approval for the expenditure of £137,260 in the territory during the financial year 1912-1913. The amount became somewhat inflated during the 1913 election, Fusion candidates in South Australia campaigning on the gross extravagance of the Labor Party in spending millions on the capital.site. 57 The years 1912-1913 were years of many anti-Canberra motions. All around Australia Women's Leagues and City Councils, Shire Councils and Borough Councils passed motions condemning the Labor Government for spending £137,000 on Canberra. The worthy local government bodies wherein there is said to be no place for party politics remained silent when a non-Labor Government seized its first opportunity to almost double the expenditure 1 5 8 The Fusion Party won the 1913 election and the Government sought and obtained parliamentary approval for the expenditure of £285,000 for the 1913-1914 financial year. Such is politics! Parliament was not unanimous in approving the expenditure. The Government was criticised for expenditure on a bush capital which could never be made a paying proposition. But once again the Commonwealth ownership of land was seen as the answer. Reference was made to the land in Pennsylvania Avenue, 48

i- '-

Washington. Locked up in private hands for a hundred years it was said to have increased in value by hundreds of millions of dollars through the unearned increment. The House was informed of the words of a Yankee financier who was present at the opening ceremony at Canberra: Lord, if we had only kept the ground at Washington. 5 9 Some members saw sufficient annual income from land rent within 15 or 20 years to pay interest on the cost of the construction of the federal capital city. Others were much more optimistic. They considered that the taking of the unearned increment for the people would make the capital city a payable proposition within a few years of its commencement. Most members found comfort in the simple belief that the great bulk of Commonwealth expenditure in the Territory could be financed by land rent." One member believed but urged caution. He predicted that the passing of 60 years would be the time when the income from land rent would almost certainly overtake the expenditure. 61 By 1913, 650 men were employed in the territory on basic construction works and certainly hundreds and most probably thousands more men were walking the countryside looking for work. The Government was being called upon to employ some of these men to build a Canberra-Yass railway .62 But the Government had no money. In any event Governmental responsibility for employment or for an economy which fostered full employment was a revolutionary dream of the future. The economy was controlled by private banking institutions and on the best economic advice a pool of unemployed was considered healthy economics. The Government's decision in 1914 to set aside £40,000 for land purchase in the territory met with strong criticism. Cook chided Prime Minister Fisher for the apparent change of policy and pointed out that only about 60 percent of the amount voted for that purpose in 1913 had actually been spent. Fisher denied any policy change. He claimed that whilst the eventual acquisition of all land in the territory was a desirable thing the Government did not consider there was any urgency on the matter. The whole concept of a national capital city now diminished in importance, and in public interest. 63 Australia was at war and although land acquisitions did not come to an abrupt halt 1916 was the last year of large scale acquisition. By 1918 the programme had ceased, the war held supremacy over everything else in Government expenditure and in order to exercise economy no more land purchases were being authorised or effected .64 The end of hostilities did not suddenly revive public or Government interest in the proposed capital city. The Australian people were then being regaled with the claim that their country had emerged from the 1914-1918 conflict as a nation. The idea was heady enough to ensure that most people actually believed it. Thus a national capital city was seen as an unnecessary expense, as something superfluous. Australia was already a nation - her leaders had told her so and a nationhood born on the battlefield is more solidly established than one which relies upon the erection of some specially planned capital city, a bush 49

capital, to prove its existence. In addition, the Government was calling for absolute economy to pay war debts, the monetary cost of Australia's alleged new status. Most of this money was owed to the British Government, which had, by arrangement, paid Australian soldiers serving overseas. The time for repayment had arrived.

The demand that all the land in the territory should be acquired, that the promise made years earlier should be redeemed,did not cease during the 1914-1918 war. From time to time members and even Ministers lamented the lack of effort in building the capital city and the difficulties of acquiring all privately owned land. The estimated cost of the unacquired land in 1917 was £328,000 but the Government did not have the money. It had by that time already spent about £760,000 on land acquisition in the territory and no more money was available. The demands became stronger after the War ended but even when they were being made by ex-Ministers, Ministers and future Ministers who claimed the promise was becoming more costly to redeem with every day's delay they attracted scant attention. 61 War debts had priority. The Seat of Government Act 1908 provided that the amount of the compensation to be paid by the Commonwealth for any land acquired within the Territory was not to exceed the value of the land on the 8th day of October, 1908. But the Seat of Government (Administratioi) Act 1910 made provision forimprovements on the land. The landowner was to be paid the 1908 value of the land plus the value of his interest in the improvements on the land at the date of the acquisition of the land. The claim being made before and during and after 1920 that any delay in acquiring the land would increase the eventual cost to the Commonwealth may have been based on the increased compensation which would be payable for improvements. On the other hand it may have been a realisation that one day the pegged or fixed 1908 price would be ignored or forgotten and compensation paid at what were considered at the time of the acquisition to be prevailing market values for freehold. In any event it became the established practice to ignore the statutory limit on compensation years before its repeal in 1955. But there is no evidence that the pegged price was being ignored as early as 1920. The practice seems to have developed some years later. The territory for which the Commonwealth assumed control in 1911 was for the most part a rabbit infested area. As it was obvious that much of the land being acquired in the early years was land the immediate possession of which was not required by the Commonwealth the Government decided to make it available on short term leases to rabbiters. In announcing the decision the Minister stated there would be no long term leases in these areas and warned that lease conditions would be rigidly enforced. 66 These early leases were disposed of by public tender to the highest bidder. The result was that the rentals for these early leases ranged from 3 pence to 9 pence per acre. The leases were for one year and each contained a clause prohibiting the erection of any permanent building on the land.

50

By December, 1914 the Government had acquired 112,384 acres, of which 43,940 acres were let on short term leases. In a few cases the term was for 10 years. The Commonwealth power to grant these leases was found in the Lands Acquisition Act 1906.67 Section 63 of the Act was an enabling provision only. It empowered the Crown to grant leases but did not specify terms or any other detail. It may be assumed however that each lease contained covenants by the lessee relating to fencing and the extermination of rabbits and noxious weeds. The Leases Ordinance 1918, the first territory legislation dealing specifically with the use of Commonwealth owned land, was an understandable development. The Government had been granting leases for some years and it was obviously desirable to have legislation to regulate the practice and achieve some uniformity. To this extent the 1918 Ordinance was inevitable. Other influences however cannot be ignored in considering the intention of the Ordinance. It is not without significance that the first permanent subdivisions were made soon after. The colonial tradition in Australian society was very strong. In addition Australia's strongest economic ties were with Britain. The early generations still thought and spoke of themselves as colonists and habitually thought of and spoke of the British Isles as home. The growth of a sense of national identity was slow. It hampered acceptance of the concept of Federation and it prolonged the birth pangs of the Federal Capital Territory. To the Australian of 1914 Britain was the motherland. Federated Australia had inherited the colonial tradition that its external relations were automatically regulated by the decisions of the British Government. When Britain declared war on Germany in August, 1914 the Australian response was inevitable and immediate. The 1914-1918 war had a profound and long lasting effect on Australian social and political thought. It conditioned the policies and actions of Governments for decades after the war had finished. The Labor Party division over the 1916 proposal to conscript men into the army for war service should not obscure the central fact that both political parties as such supported Australia's involvement in the 1914-1918 war. Future Australian historians may question this involvement and dismiss the supporting reasons as unconvincing. This may happen years hence but nearly all Australian politicians and the great majority of Australians in 1914-1918 had no doubts. Both political parties supported the recruitment campaigns and both were pledged to redeem the promises made to induce enlistment when appeals to duty failed to enthuse. Preference in obtaining employment and preference in any promotion once employment was obtained. The Commonwealth Public Service was to be a closed shop - only those who had been on war service were to obtain entry. The assistance was to be by way of housing loans and assistance to settle on the land. When the time to redeem these promises had arrived the Commonwealth Government had no excuses for inaction as far as its own Territory was con-

51

cerned. There were no State Governments, local governing bodies or property franchise elected Houses of Review to frustrate Commonwealth plans. In short, the Commonwealth Government's jurisdiction in its own territory was supreme. The Leases Ordinance 1918 may not have been the first of that Commonwealth and State legislation which, in conformity with public opinion, bestowed on those men who did not go to the War the status of second class citizens. Nevertheless the provision in the Ordinance authorising the Minister to make regulations prescribing the persons to whom leases could be granted was an opening the significance of which became obvious the following year. In this year it became established policy that rural leases would in practice be restricted to returned soldiers. The Leases Ordinance 1918 provided for leases of up to 25 years subject to such conditions as to rent and otherwise as prescribed. The Ordinance itself was brief. It left much unanswered. But the Leases Regulations 1919 made under the Ordinance provided a more comprehensive coverage. Under the Regulations the Minister was empowered to lease any land in the territory the immediate possession of which was not, in his opinion, required by the Commonwealth. The land available for leasing was to be notified in the Gazette and applications invited in such form as the Minister directed. The purposes for which leases were to 'be granted were grazing, horticultural, agricultural, residential or business purposes or any other purpose approved by the Minister. Annual rent was to be equal to 5 per cent of the assessed value of the land, including improvements owned by the Commonwealth, plus the amount of the rates per annum. No person was to hold under lease land of a greater assessed value than £6,000 (exclusive of the value of buildings and fences). The Minister was authorised to grant leases (without inviting applications) to persons who had previously owned the land being leased, to former lessees and to returned soldiers. Returned soldier was defined as a person who was or had been a member of the Australian Naval or Military Forces and who had returned from naval or military service outside Australia. The Commonwealth was in the business of obtaining the maximum revenue possible from its land ownership. The practice of inviting applications for leases in the form of tenders was retained. The tenderer was to state the amount of the rental being offered. This way there was always a possibility that a rental higher than 5 per cent of the assessed value of the land would be obtained. If no application at the upset rental was received the Minister was empowered to lease the land at such rental as he deemed reasonable. Upset Rental was defined as such annual rent as was equal to 5 per cent of the assessed value of the land, including improvements, after making allowance for improvements to be made by the lessee under the lease, plus the amount of rates payable per annum in respect of the land. Subletting, assignment or parting with possession of a lease was not permitted without the previous consent of the Minister in writing. 52

The Regulations empowered the Minister to restrict his invitations to apply fora lease to returned soldiers only but they did not oblige him to grant a lease to anyone. After making any enquiries he considered advisable the Minister could then decide whether an applicant was eligible to become a lessee having regard to the following considerations:(a)

the ability of the applicant to carry out the conditions of the lease;

(b)

other lands owned, leased or managed by the applicant;

(c)

whether the applicant resided or intended to reside in the territory; and

(d)

whether the applicant was a returned soldier.

Whilst these provisions as to eligibility were not restrictive their application was. Whether or not an applicant for a lease was a returned soldier became the only consideration. The Government felt it had a special duty to the soldier being discharged from the army into civilian life. The federal territory where land was readily available seemed ideally adapted to a scheme of Soldier Settlement. Those whose short term rural leases expired did not, except in some special cases, obtain renewals. Rural land in the territory was to be available to returned soldiers only. The Government's policy that all land in the territory would be made available only to returned soldiers had changed by 1920. The difficulty of establishing and administering a system of leasehold whereby residential and business leases in the city area would be granted solely to returned soldiers was apparent. But rural land was different. Thus it was that with the completion of the subdivisions of 1919-1920 the Minister announced the grant of over 40,000 acres on lease to returned soldiers for periods varying from one year to 25 years. The Territory for the Seat of Government now achieved (even if for only one day) the seemingly impossible it became a very interesting experiment 68 to one of its most vociferous newspaper denigrators. The Leases Ordinance provided for leases for up to 25 years but in practice such long term leases were seldom granted. The majority were short term leases. In general the nearer the property was to the city area the shorter the term of the lease. 69 S

The Leases Regulations 1919 reserved to the Commonwealth a right to resume any leased land whichwas required for any public purposes of the Commonwealth. In this event compensation was payable to the lessee for improvements he had made on the land but no other compensation was payable. The practice of rendering a receipts and expenditure account for the territory was established in 1912 but in 1917 Home and Territories Minister McMahonGlynn warned that a good return from the territory could not be expected until the capital city was built and population settled there. The inability of the Government to acquire the balance of the privately owned land was lamented but the Minister considered a fair return was being obtained on 53

the Government outlay for land purchased to date, the average return being almost 5 per cent." The annual return of C4,800 in 1912 had by 1918 increased to £42,310, the revenue coming from rents, inspection fees, sale of plans, general rates (C735) and the sale of material purchased elsewhere and not needed. The total expenditure for 1918 was £90,367.' The Parliamentary warrant for restarting any work at all at Canberra after the War was obtained when support came from some South Australian members in return for a promised Adelaide-Darwin Railway. 72 The necessity for economy to pay the war debt was the reply given to the many Federal Capital Leagues formed, particularly in New South Wales, to advocate support for the construction of Canberra as the Federal capital city and to urge an early transfer of Parliament. 73 The Queanbeyan Federal Capital League President, George Fitzpatrick, proposed the formation of syndicates to erect the whole of the public buildings at Canberra and present them to the Commonwealth Government free of cost providing a lease of adjoining lands was given. 74 But the Government had enough critics on its efforts or its lack of efforts at Canberra without inviting the storm of protest any acceptance of this proposal would have attracted. Fitzpatrick's proposal was turned down. The call for action now shifted to Parliament where the Government was being urged to do the sane and proper thing and sell the freehold of its land in the territory and thus obtain all the money required to construct the Capital City. 75 But the appeal was too late. The matter had been settled ten or twenty years earlier and few were disposed to re-open it. Nor was much attention given to the call for an immediate transfer to Canberra to avoid the payment of high rents for the buildings the Commonwealth occupied in Melbourne. And yet this particular call was so insistentit could not be ignored indefinitely. Nor could the increasing questioning and criticism of the Government for its failure to make leases in the city area of the territory available for residential and business purposes. On the other hand the agitation against any construction work had not ceased or even diminished !76 Undeterred by the outcry which it knew any renewed Commonwealth interest in or activity at Canberra would bring the Government decided to act. It announced the appointment of a specially selected Committee to investigate the whole question of construction and advise the Government on the work which would be necessary to allow an early transfer to Canberra.

NOTES ON CHAPTER 3 1.

Seat of Government Acceptance Act 1922 but see also Report On Australian Capital Territory Freehold Lands Inquiry by the Parliamentary Joint Committee on the Australian Capital Territory 1968.

54

-4

2.

P.D.71:2096

3.

Wigmore, L., The Long View, Melbourne, Cheshire, 1963

4.

Parliamentary Papers: Documents Necessary to Complete Parliamentary Paper 153 of Session 1914-1915-1916, p. 7 . Ibid. p.7

S. 6. 7. 8.

P.D. 77:4366 Town Planning Review, London, 1913 Building, 12 June, 1913; see aicr by W. Vernon, New South Wales Government

13.

Architect. Parliamentary Paper 153 of Session 1914-1915-1916, Op. cit. P.D.71:2124 P.D. 71:2124 Wigmore, L., Op. cit. p.74-5 see Royal Commission on Issues Relating to Mr. Griffin 1916-1917

14.

Ibid

9. 10. 11.

12.

15.

P.D. 77:4366

16.

P.D. 82:1393.4

17. 18. 19. 20.

FD. P.D. P.D. P.D.

23.

Sydney Morning Herald, 9 May, 1927; see report of speech by Senator George

24.

P.O. 61:2266; 71:2118

25. 26. 27. 28. 29. 30. 31. 32.

P.D. 61:2111 P.D. 62:4506 P.D. 48:1896 P.D. 63:4518 P.D. 63:4509 P.D. 63:4509 P.D. 63:4517 P.D. 61:2406 P. D. 63:4558 see Sydney Morning Herald, 13 March, 1913 P.D. 77:4017 P.D. 69:6963 P.D. 69:6964 P.D. 61:2261

77:3991 79:7695 77:4364 63:4518 21. P.D. 61:2283 22.1 P.D. 63:4526 Pearce.

33.

34. 35. 36. 37. 38.

55

39.

P.D. 77:4055

40. 41.

P.D. 76:3211

42.

P.D. 65:1692 P.D. 76:2266 P.D. 71:2699

43. 44.

Schumack, Samuel., An Autobiography or Tales & Legends of Canberra Pioneers p.165-6 Canberra, A.N.U. 1967.

45. P.D. 59:6296; 75:1430 46, P.D. 62:4507 47.

P.D. 59:5824

48.

P.D. 59:5824

49.

P.D. 75:1430

50. 51.

Ibid P. D. 65:1938

52.

P.D. 71:2191

53.

P.D. 69:6961

54.

P.D. 69:6963; 71:2217; 81:11096

55.

P. D. 69:6964

56. 57.

P.D. 69:6680 P.D. 71:1985

58.

P.D. 71:2202

59.

P.D. 71:2118; 71:2190; 71:2123

60.

P.D. 71:2699

61.

Ibid

62. 63.

P.D. 77:4055

64.

P.D. 86:7055

65.

P.D. 93:5243

66.

The Argus, Melbourne iS March, 1913

67.

P.D. 75:1244

68.

The Argus, 16 November, 1920 P.D. 85:5775

69. 70. -

P.D. 76:2888

P.D. 86:7055

71. P.D. 87:8732 72. 73.

Sydney Morning Herald, 3 May, 1927 see reported address by Charles Man. M.P. P.D. 86:7055

74.

The Daily Telegraph, Sydney, 4 August, 1919 P.D. 92:3167

75. 76.

The Argus, 20 September, 1920.

56

CHAPTER 4

THE SULMAN COMMITTEE 1921-1925

On 22 January, 1921 the Federal Capital Advisory Committee was appointed to inquire into and advise upon a scheme for the progressive construction of the City with a view to enabling the Federal Parliament to meet and the Central Administration of the Commonwealth Government to be carried on as early as practicable at Canberra (and on the basis of the acceptance of the plan of lay-out of the Federal Capital City by Mr. W B. Griffin). The Committee members were:John Sulman, Consulting Architect and Town Planner, Chairman, E.M. de Burgh, Chief Engineer, Department of Works (N.S.W.), Herbert E. Ross, Architect and Consulting Engineer, P.T. Owen, Director-General Commonwealth Department Works and Railways, J.T. Goodwin, Commonwealth Surveydr-General and Officer in Charge Administration Federal Capital Territory, Secretary: C.S. Daley. The appointment of the Federal Capital Advisory Committee (often referred to as the Sulman Committee) was a most important milestone in the history of Canberra. The Committee was fully aware that if its recommendations were too costly to implement the whole project of Canberra's development as a functioning capital would be deferred indefinitely. Its reports therefore again emphasised the revenue to be obtained from land rent and it recommended a provisional Parliament House and that the Yass railway be abandoned.' It should be remembered that the Committee was appointed at a time of continuing post war economic slump. The war debt loomed large in public discussion and the Minister for Home and Territories was constantly urging the Committee to realise the absolute necessity of observing the strictest economy consistent with achieving the main purpose of an early transfer to Canberra. In short, the duty of the Sulman Committee was to advise the Commonwealth Government on how to get to Canberra "on the cheap". The Committee's First General Report dated 18 July, 1921 contained a review of the works at Canberra which had been completed and commenced and an outline scheme, with estimates of cost, for transferring the Seat of Government within a period of 3 years. The Committee suggested Canberra should be developed in 3 stages but the realisation of the Committee's first stage programme became an impossibility. The main proposals were approved but the money to carry them out was not forthcoming. 57

The Sulman Committee was not primarily concerned with land policy which was a matter of administration rather than construction. But the question affected city development and the Committee advised that before city area lands could be leased it would be necessary to have inforce building regulations specially drafted to suit the peculiar conditions under which the Federal Capital would develop and which would be quite different from those affecting ordinary cities or towns. The leasing of city lands was therefore:a step which the Committee advises should be deferred until the construction of the first stage is well advanced, the exception being sites for ecclesiastical buildings. It is thought that under such circumstances there would be a more definite prospect of inducing the public to lease at good rentals than if leases were granted whilst there might remain in the public mind any uncertainty as to how and when the City would be occupied by the Government. 2 The Report was undoubtedly an expert assessment of the minimum requirements before the transfer was commenced. The recommendations for temporary buildings, such as Parliament House, are understandable in view of the Minister's instructions to the Committee to observe the strictest economy in its proposals. But any succes the Sulman Committee did have or may have had in its task of finding a cheap road to Canberra could not and did not win widespread approval. The anti-Canberra, anti-federal, anti-any capital city campaigns which had been a feature of Australian public life for years had not diminished in intensity Petitions were still being presented, meetings were still being called, motions were still being moved and speeches were still being made - all demanding either the abandonment of Canberra as the capital city site and "a return to 'Dalgety" or a suspension of work at Canberra for 50 or even 100 years or a dropping of the whole concept of a federal capital city. All around Australia Canberra continued to get the full treatment from the press. It was a handy stand-in when news was a little scarce - "a crying shame, a waste of public money, a future rest home for public servants, a bush capital" etc. And as if to prove their case the critics found the revenue the Commonwealth obtained from its land grossly inadequate. 3 By : 1921 total Commonwealth expenditure since 1901 on the territory for the Seat of Government was estimated at £2,000,000 and in that very year land rent amounted to £35,000 or a IM percent return on total out-lay. And all of this at a time when the Commonwealth was paying 6 per cent on loan money! Tasmania, having paid its share towards the construction of a transcontinental railway which did not even earn enough to pay for axle grease was depicted as groaning beneath Federal oppression and was mostapprehensive about any further capital expenditure at Canberra.' In Western Australia, Taxpayers Associations were most active. 5 Canberra was always seen as an unnecessary and unwarranted expenditure of public money which should

58

have been and should be devoted to shipbuilding, unification of railway gauges etc. The acceptance of the Sulman Committee recommendation to delay making land in the city area available angered some and pleased others. Those angered charged the Government with crucifying Canberra and they asked whether the real reason for the delay was a desire to convert Canberra leasehold into freehold.' Those pleased welcomed any postponement of the celestial city 7 and they wanted more. Late in 1920 a delegation of non-Labor politicians from all States, convinced that any expenditure at all at Canberra was harmful and wasteful, converged on Melbourne and sought an interview with the Prime Minister, W.M. Hughes. They urged him to postpone all work indefinitely. Hughes w as non-committal and soon scattered these campaigners by announcing the grant of rural leases in the territory to returned soldiers. 8 The pro-Canberra campaign was never as active as the anti campaign. Of course it did not have a sympathetic press. The Melbourne dailies, The Age and The Argus and the Sydney Bulletin never ceased to ridicule the bush capital. And yet time was on the side of those who urged greater constructional work at Canberra. Someday somewhere some Commonwealth Government would have to erect a federal 'capital city. Canberra had been chosen and there was no turning back. The only questions to be answered were when construction activity should commence and how much money should be spent on the task. For years demands had been made that the Government make residential and business sites at Canberra available to private enterprise. This it was felt would operate to accelerate Commonwealth activity. In Parliament during 1921 the Minister for Home and Territories, Alexander Pôynton, was either promising early action or giving assurances that a Lands Ordinance would be, was being or had been prepared to deal with land tenure in the Territory. The Ordinance was said to be one which could be converted into an Act if so desired. 9 This assurance was probably considered necessary because members were not only unfamiliar with Ordinances, they distrusted them. One prominent member in an earlier Parliament had criticised the use of Ordinances and called upon the Government to administer Territory land under the law.' 0 In any event, the City Leases Ordinance 1921 duly appeared. Under the Seat of Government (Administration) Act 1910 the GovernorGeneral was empowered to make Ordinances having the force of law in the Territory. The Ordinances were deemed to have commenced on the date of gazetting or such other date as specified in the Ordinance. They were to be laid before both Houses of Parliament within 30 days of the making thereof, or, if Parliament was not then sitting, within 30 days after the next meeting of Parliament. If either House passed a resolution disallowing an Ordinance it would thereupon cease to have effect.

59

Territory Ordinances are obviously too limited in theirapplication to be of extensive political interest. The only people really concerned with their , operation are Territory residents. There is no political advantage to be obtained from them outside the Territory. Not surprisingly therefore the Commonwealth Parliament as such has shown very little interest in Territory legislation. As motions for the disallowance of Ordinances were the exception rather than the rule Parliamentary debate on most Territory legislation has been limited and mostly non-existentn-existent. Before the introduction of the early Ordinances relating to city area leases Parliamentary discussion of land tenure in the federal territory was chiefly of a general nature. No speaker ever spelt out the advantages the Commonwealth land ownership in its territory would give to the town planner in the form of effective land use controls. But this is understandable. Town planning, said to be in its infancy in 1911, was really only a toddler a decade later and the public ignorance of and uninterest in it was well reflected in Parliament. In addition, the anti campaigns ensured that the emphasis should be on the revenue to be obtained from leasehold. There were of course some important exceptions. For instance, the unanimous opinion of every Parliament had been that land in the city area (or indeed anywhere in the Territory) should only be made available to land users. The vacant suburban block was to be non-existent and the land speculator was to be refused entry into the Commonwealth domain. Other notable exceptions were the insistence by one member in 1904 that land values should only be re-appraised at 20 year intervals' 1 and the proposal by another member in 1903 that there should be an annual rent of 5 per cent of the unimproved value of the land.1 2 The anti-Canberra members of Parliament in 1921 were united in their opposition to Canberra being the federal capital but their unity ceased at that point excepting where land tenure was concerned. Political opinion in 1921 in Australia on- the land tenure which ought to be established in the federal territory (wherever it might be) remained as it had been in 1901. But the apparent unanimity of 1901 was gone. However, the occasional dissident of 1921 was not anti-Canberra. In fact, he was usually the very opposite. He saw in the money which could be obtained from the sale of Commonwealth owned land as freehold the answer to the Government's inability to finance the erection of the City. 1 But all the political parties as such were committed to a policy of Commonwealth ownership of all land in the federal territory and to the establishment of some form of leasehold. No political party would have countenanced the sale of the land as-freehold. The long debate in Australian politics on land tenure had centred on the tenure of rural land. This was a battle the squatter had won. Vast areas of rural land had been permanently alienated in fee simple. In popular thinking freehold land title was tainted with fraud, corruption and jobbery and this wholesale alienation was regarded as a betrayal of the common interest. Public ownership and leasehold tenure remained a popular ideal but the passing of the tenure battle was long spent and could only be feebly related to the birth of 60

a new capital city remote from any centre of population. However the fire was only smouldering and any suggestion of alienating Canberra land in fee simple blew upon the still burning embers and caused them to flame anew. Still time had bought some change. By 1920 the successor to the hated squatter of the 19th century had become accepted in society. In fact, he was Society. The Picnic Race Meetings, replete with wide brimmed hats, were a regular feature of the social pages of the larger metropolitan newspapers and the new squatter had risen in social standing and prestige. Not a few of them made their way into Parliament under the banner of the newly born Country Party. The popular feeling against the squatter had previously been so intense that few sought and even fewer gained election to any Parliament elected on an adult franchise. Nevertheless, the squatters had found a political influence far beyond their number by their entry into the various State "Houses of Review", the members of which were appointed or elected by voters holding a property qualification. The most notable omission in 1921 and in the years which followed was that no political party had any declared policy on the contents of the legislation which would be necessary to launch this unique form of urban land tenure. It was all very well to favour leasehold tenure but its practical implementation was another thing. Yet on this the political parties were silent. It followed therefore that the Minister for Home and Territories and his advisers - Departmental, legal and the Sulman Committee - were more or less alone in deciding the form and content of the legislation which launched the leasehold system in the city area. Parliament as a whole was uninterested but the lone voice of John Grant (Labor, N.S.W.) crying in this wilderness of indifference was much more effective than his record of lapsed (unseconded) motions would indicate. Grant was elected to the Senate in 1914, defeated in 1919 and reelected a Senator in 1922. He served in that capacity until his death in 1928. Unlike'most Labor politicians Grant unashamedly declared himself to be a disciple of Henry George and called for the government of the federal territory

according to the principles of Henry George as set out in his Progress and Poverty. 14 The first principle of George's teaching was that all land should be publicly owned.. Leasehold tenure was in perfect harmony with this principle but it was not advocated by Henry George whose plan was to achieve all the fruits of public ownership by concentrating taxes in one single tax on land so as to constitute a rent. Thus would be secured a de facto leasehold tenure within the legal framework of the fee simple.

Nearly 20 years after the publication of Progress and Poverty there are men who profess its principles, without in the least comprehending them, and who therefore advocate measures in the name of Henry George, in direct opposition to his teachings, while, on the other hand there are those who can hardly mention the man's name without foaming at the mouth, who 61

H

without knowing it are in fact striving their utmost to accomplish the very reforms which Henry George aimed at. 1 S The City Leases Ordinance 1921 empowered the Minister to grant leases of land within the city area for periods not exceeding 90 years. The leases were to be granted for business or residential purposes and were to be subject to such conditions as to rent and otherwise as the Minister determined. Lessees were required to erect or contribute to the erection of such fences on the boundaries of the land as the Minister considered necessary and upon any failures to comply the Minister could determine the lease. The area of land which was from the earliest days loosely described as the city area and the area eventually specified by notice in the Gazette as the City Area was never merely a few acres of land • surrounding what is today known as Civic Centre. In 1911 the area included over 7,000 acres, and the area first specified was considerably larger. Today the City Area as specified embraces all Canberra suburbs - from the most southern in the Woden Valley to Fyshwick and to the most northern point of Belconnen. The City Area will thus expand with each new suburb. The City Leases Regulations 1921 spelt out in detail the basic provisions which were to govern city area leases. Amannual rent (exclusive of rates and payable quarterly in advance) at not less than 5 per cent of the unimproved value of the land as -assessed by the Minister was prescribed. The unimproved value of the land was to be re-appraised at the expiration of 20 years and. thereafter every 10 years. The erection of a building, suitable for the purposes for which the lease was granted, and according to plans and specifications approved by the Minister, was to be commenced within one year and completed within two years after the granting of the lease. An extension of time for the completion of the building was available if in the Minister's opinion there was good reason for the delay but upon any failure to complete the building within the specified or extended time the Minister was empowered to cancel the lease. The building was to be maintained on the land during the currency of the lease and kept at all times in a state of repair satisfactory to the Minister and upon any failure for a period of 2 years by the lessee to maintain a building on the land the Minsiter could cancel the lease. The lessee could, with the consent of the Minister, mortgage his lease to obtain money to commence or complete the erection of the building but, otherwise, until the completion of the building, the lease could not be assigned or mortgaged. The City Leases Ordinance 1921 and the Regulations made thereunder are interesting as an indication of the extent and nature of the control the Commonwealth was seeking to exercise over the use of the land it would lease. Nevertheless, the legislation fell far short of what would be required. In particular, it failed to prescribe how leases would be granted. Merely empowering the Minister to grant leases in the City Area left many questions .62

-4

unanswered. Was the Minister to invite applications or call for tenders, and, if so, what was to be the deciding factor in choosing between rival ajplicants or tenderers? Was the Minister to offer the leases at auction or to allot them by ballot? But an answer was not immediately necessary. The Sulman Committee about this time advised against the granting of leases in the City Area and the Government accepted the advice. No leases were therefore ever granted under the 1921 Ordinance. But before passing on it is of interest to note that the Ordinance empowered the Minister to determine the lease in certain events whereas under the Regulations the Minister was said to cancel the lease. The result is the same - the lease is brought to an abrupt end but in later legislation the legal terminology took over and leases were said to be determined. There was an additional reason why no leases were granted under this 1921 Ordinance. It was clear that legislation relating to the erection of buildings, water supply, sewerage and electricity was first necessary. The Sulman Committee had noted this and recommended that the services of a specialist be obtained to review the existing law and prepare suitable regulations. The Committee regarded this as all important because of the necessity to maintain proper standards in the new city, bearing in mind the difficulties that had arisen in large capital cities in which committees of experts had the subject constantly under review with the object of evolving a comprehensive and suitable set of regulations. But the Public Service Board was not impressed. It refused to approve the appointment of an expert but offered to detail a clerk in the Department of Works and Railways to undertake the task! In its Second General Report (dated 31 July, 1922) the Sdlman Committee lamented the reduction in the first year's estimated expenditure of £417,000 for water supply and sewerage. The completion of these services was considered' a basic necessity before the official and civil occupation of the City. The Committee insisted that as large an expenditure as possible, consistent with the general development of other essential works, should be allotted to them. The Committee's recommendations did not originate the policy of servicing blocks in Canberra before offering them for sale, but undoubtedly they ensured its continuance. That policy was initiated by the Fisher Government and confirmed by the Cook Government. O'Malley and Kelly, the first two Ministers responsible for Canberra's development, insisted that each block would have to be serviced before being made available. They silenced critics who wanted immediate building by asking how: any building could be commenced until a water and sewerage system had been Nobody queried this policy. The costly installed for the residents! experience in Melbourne of putting in a sewerage system after the city had been built was convincing evidence of its ultimate benefit. O'Malley claimed that 40 per cent of the construction costs in Melbourne miglithave been saved if the system had been put in first. 1 6

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The Sulman Committee had the unhappy experience of seeing the amount of money it recommended for expenditure - on the sewerage service reduced while the amount allocated to road construction in the Committee's recommendations was raised considerably to meet the Government's desire to find additional employment for unemployed returned soldiers. The influence of returned soldiers on Australian political life after the 1914-1918 war was immediate and important. They had formed themselves into a League (RSL) which was overwhelmingly conservative and somewhat authoritarian.' The widespread unemployment which followed the 1914-1918 war and which ended only with the 1939-1945 war served to increase the disappointments and frustrations of these men. The complaints by the RSL of the inability of many returned men to obtain employment led to clashes with trade unions. What were alleged by returned soldiers to be insults by unionists to the Union Jack and to the Empire led to many nasty scenes. In Queensland, returned soldiers, spurred on by the press i had worked as strike breakers and during the early 1920's Ministers were denying that a body of returned soldiers was being sent to Canberra as strike breakers. 18 The Government had dropped the earlier policy decision that City Area leases would be available only to returned soldiers. Nevertheless it was determined that opportunities for employment in the Territory would as far as possible be restricted to returned soldiers. But it was on the question of leasing city lands that the Committee found some reason for comfort. The Government had accepted its advice to delay making city lands available. In its Second Report the Committee acknowledged its awareness of the growing representations being made in Parliament and in the press that the Government should forthwith throw open land in the Civic Centre for the erection of business and other premises by private enterprise. In the Committee's view however these lands constituted one of the principal assets of the Commonwealth at Canberra - an asset which would not be realisable to the best advantage until prospective purchasers felt assured beyond any doubt that Canberra would very soon be occupied as the Seat of Government. The Committee reported: The only real assurance to the public in this respect will be the further commitment of the Government in its expenditure upon municipal services and construction for official purposes. The extension of works, such as water mains, sewerage reticulation, electric supply, tree planting in roads and parks - all of which should be undertaken within a year or more - will greatly enhance the value of the lands. The Committee maintained that if leases were granted in 1922 the demand would not be great unless rents were on a much lower basis than would be obtainable with the completion of the works mentioned and the consequent large influx of subsidiary population and private enterprise. This was a period of varying opinions as to the scope of private enterprise in the territory. Many believed that the Commonwealth and the Commonwealth alone should erect all buildings at Canberra. The belief was certainly not 64

confined to those of any one political persuasion but perhaps it was a little stronger among some Labor politicans although no party as such had any declared policy on this or indeed on any other question concerning Canberra. And yet one of the many difficulties facing the Commonwealth at the time was finding some reasonable and accurate basis for land valuation. To claim that the Commonwealth would receive a 5 per cent return on Canberra land was pleasing but it left unanswered the all important question - 5 per cent of what? Of the purchase price? This was unsatisfactory if only for the reason that few public statements ever agreed on the average price paid per acre. The figures £3.15.0 and £5 per acre were the most popular quotes but £4 and £4. 10.0 per acre get an occasional mention. Assuming that each parcel of land being offered for lease was one quarter of an acre in size and assuming that the purchase price per acre averaged £5.0.0 the 5 per cent return would have been a mere thirteen pence. To claim that the 5 per cent annual return was to be 5 per cent of the unimproved value of the land only raised another question - what is the unimproved value? On what basis could it be determined? It must be remembered that there was no market guide. The Sulman Committee may not have found a sound basis for land valuation but it never entertained the slightest doubt that the servicing of blocks i.e. the provision of sewerage and water services would result in a higher land value and thus higher land rent. The strange argument of later years that the existence of these services is not reflected in the value of the land and thus in the land rent had no audience in days of yore. It would certainly have been greeted with derision. Committee members took every opportunity to stress the correlation between services and land-values. This they did to obtain money to ensure completion of the services before land was made available. Works Director P.T. Owen explained it to a 1923 Public Accounts Committee enquiry on Canberra housing:-

Everything we do - planting of trees, construction of roads and kerbs, installation of electric light, building of cottages, every £1 that we spend will affect the leasing value of the land - I really believe that in 6 months time the value of the property will be double what it is at present. The Sulman Committee in 1921 had tentatively agreed that £30 would be a fair valuation for residential blocks but Committee member J.T. Goodwin recommended the estimated value be £100. The Minister accepted the recommendation. Goodwin, who was also Surveyor-General and Territory Administrator, admitted that the £100 was an arbitrary assessment with absolutely no data upon which to base it but, he argued, as nowhere

else could the convenience of electricity, sewerage and water supply be obtained at the cost of £5 per year the valuation was reasonable.2° The valuation problem was not settled easily. Llewelyn Atkinson, Vice President of the Executive Council, used it in 1923 to explain and excuse the Government's continuing refusal to release land in the city area. In reply to a question he said: 65

the conditions upon which residential and business sites will be made available will be announced as soon as the construction of the first stage of the federal capital is sufficiently advanced to permit a determination of a reasonably accurate basis of valuation for the leasing of city lands.2 1 The Minister's statement implies that by 1923 the Government had decided that no leases would be granted under the City Leases Ordinance 1921. Of greater interest is the clear admission by the Minister that. an acceptable basis for valuation had not then been found. But help was coming. John Grant dismissed the discussion on whether the Commonwealth alone should erect buildings at Canberra as a waste of time, as a matter of no consequence. What was important in his view was that the Commonwealth should be collecting land rent. The progress of the city, he claimed, was being retarded because no one had been permitted to engage in building operations. If Government. officials had been compelled to live under the same conditions as apply to the workmen, building sites would have been available years ago. 22 It was obvious to Grant that immediate action to unlock the land was essential if his wishes were to be realised. He accordingly moved a motion that in the opinion of the Senate a section o the residential and business sites at Canberra should be made available to private enterprise Without further delay. The motion lapsed for want of a seconder but the importance of this episode lies in Grant's supporting speech. The Senator took the opportunity to critically review the City Leases Ordinance 1921. He denounced the 20 year lapse before first re-appraisement as being too lengthy a period and rejected as absurd the whole idea of the land rent being based on the Minister's assessment of the unimproved value of the land. In Grant's view the public were the best judges of Canberra land values. He contended that leases for 99 years - not 90 years - each containing a clause specifying the purpose for which the land may be used should be widely advertised and sold at auction with the annual land rent assessed on the unimproved value as bid by the pruchaser. By this method the Commonwealth would, he considered, obtain the full rental value and no more of each block. In other words, it would be fair to the Commonwealth and to the purchaser of the lease. The City Leases Ordinance 1924 was gazetted a few weeks after Grant's speech. It amended the City Leases Ordinance 1921 by empowering the Minister to offer 99 year leases for sale, the bidding at auction to be by capital sum representing the unimproved value of the land. The annual land rent was to be paid at such periods as prescribed and was to be 5 per cent of the unimproved value of the land as bid by the purchaser. The Ordinance provided that the unimproved value of the land was to be re-appraised at the end of 20 years from the commencement of the lease and every 10 years thereafter. Provision was made for appeals against re-appraisement - an Appeals Board consisting of three Ministerial appointees was to hear and 66

determine them. Land was to be leased in perpetuity for church purposes, rental to be at one per cent upon the unimproved value as determined bf the Minister, such value not to be subject to re-appraisement. Grant responded with a motion to disallow the Ordinance. 23 He denied that anyone anywhere was capable of estimating what the value of Canberra land would be 5 years hence let alone 20 years. The amount bid at auction could be too high or it could be too low and a 5 year period between reappraisals was essential in fairness to the lessee and the Commonwealth. In addition, it would remove anomalies between adjoining blocks and ensure an early re-adjustment if in the first place it was fixed too high. Grant maintained that early re-adjustments would also operate as a further barrier or safeguard against the hated land speculator. But one interjector informed him that this was unnecessary as the laws obtaining in the Territory already contained such safeguards as were almost certain to keep the speculator out, particularly the provision for the cancellation of the lease if it was not built upon within the prescribed time. The Minister for Home and Territories (G.F. Pearce) complained that the City Leases Ordinance 1924 had been drafted in conformity with Grant's earlier views and was deserving of the Senator's support. The Minister was substantially correct, but only sub stantiall'. Grant had always condemned the 20 years lapse before first re-appraisement and he had called for the insertion in each lease of a clause specifying the purpose for which the land may be used. But the Minister defended the amended Ordinance. He reminded the Senate that one of the main objections urged against the principle of leasehold was insecurity of tenure and that everybody seemed to prefer freehold because of the security of tenure it gave. The principle of reappraisement, Pearce argued, undoubtedly introduced an element of insecurity since if in a lease for 99 years there is a condition that it will be subject to reappraisement in 20 years time the rent may be so raised as the result of reappraisements that the land may cease to be profitable to the lessee. To Grant's interjection that this could never happen where the Government was the owner of the land Pearce insisted that it could. The Minister referred the Senate to the experience in South Australia where, notwithstanding very liberal lease conditions, working men, afraid of the re-appraisement, had agitated and campaigned until they got the freehold. Pearce was convinced that if the Commonwealth was to attract capital to Canberra to ensure a good class of building the leasehold conditions had to be made as attractive as possible. He contended that unattractive lease conditions - and re-appraisement at short intervals was unattractive - would prevent the competition which would be necessary to guarantee the payment of a fair economic rent for the land. In the Minister's opinion, the only value of Canberra leases in the first few years would be use value They would have no speculative value as

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£heilflegoUabilLLy wsu iiliei!icy the knowledge th4st there will be a large area of other land equally valuable remaining in the handsof the Government and which the Government will seek to make available as soon as possible 24 The Minister was well aware of Grant's attachment to the principles of Henry George and perhaps he had this in mind when he appealed for the Senate's approval of the Government decision that the first re-appraisement of land value should be at the end of 20 years:as we are building a city on leasehold land for the first time in Australia let us not in our desire to follow the - pathway of theory load these leaseholds with conditions that will make them so unattractive that the people 25 will not settle there. The motion to disallow the Ordinance was defeated. The opposition to the 20 year re-appraisement by Grant • was not the only occasion members of the Parliament elected in 1922 had shown interest in the matter. J.T. Goodwin was questioned on re-appraisement by the 1923 Public Accounts Committee on Canberra housing:-

448. By Mr. Fenton - There will be no re-appraisement for twenty years. Supposing within that period there was a marvellous development? - Supposing, on the other hand there was an enormous slump. Is not twenty years too long a period? - That was decided by Cabinet. It is now law. But the law can be repealed? - The scheme has never been given a fair trial. 455. By Mr. Makin. Were the decisions of Cabinet made on your recommendations? My original recommendation was ten years. Cabinet decided that twenty, years would not be too long, and I agreed with their decision. I have consulted a good many business people on this question and most of them think that twenty years without reappriasement is not too long. The belief that a person who was willing to invest in Canberra should be encouraged and entitled to do so by knowing that he would not have to spend more than a certain amount for a certain period thus won the day. It rationalised the 20 year re-appraisement and guaranteed its survival. The events of later years however were to cause Grant to present his argument against the 20 year re-appraisal with renewed vigour.

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The City Leases Regulations 1924 amended the 1921 Regulations by extending by 1 year the time in which the commencement and completion of the erection of the building on the land had to be effected. The building was now to be commenced within 2 years from the date of the grant of the lease, or such further time as was approved by the Minister in writing, and completed within 3 years. The amendment was explained, on the evidence. 68

rather unconvincingly, as being necessary because of possible building material shortages. Most likely the amendment was motivated by the desire to make leases as attractive as possible. In any event, Grant's reaction was inevitable. He had repeatedly urged the Government to insert in each lease a purpose clause and insisted that every block leased at Canberra should be promptly put to the use for which it was intended. On this occasion he condemned the Government for hampering progress at Canberra by its long refusal to make land available but he insisted that any change in this policy could not justify building sites being made available unless they were promptly built on.

Until the blocks have been put up to auction no one can say what the rent will be but I have no doubts that it will be fairly substantial. The mere collection of rent is not however the object to be aimed at. The sites are presumably to be made available for the purpose of having buildings erected upon them, and any regulation which will allow them to be acquired without that stipulation must act detrimentally to the progress of Canberra.26 The earlier Parliaments which had been so enthusiastic about leasehold land tenure in the territory for the seat of Government, and which had recommitted a Bill to guarantee its establishment, had never been particularly interested in the finer details of the legislation which would be necessary to launch the experiment. But the Parliament Grant was addressing was bored with the whole subject. His motion to disallow the amendment lapsed for want of a seconder and the claim he made that leased land would lie idle for 2 years was dramatically confirmed by subsequent events. The first sale of leases for residential and business sites in the City Area of the Territory was set down for 25 October, 1924. The sale, by public auction, was to be held at Canberra. The Government's object, Pearce said, was to keep the land speculator out of the Territory and to allow anyone desirous of obtaining residential or business blocks to have equal rights at the auction. The Minister promised that sub-divisional plans and full information regarding the conditions of sale would be made available in all States.2 6 But the Australian people, whether of a second, third or even convict generation, were and remained at heart expatriate Englishmen and Pearce promised to cable full particulars of the sale home for the information of prospective purchasers.' 8 To understand the history of City Area leases in the years which followed the first sale in 1924 it is also necessary to understand the means by which the Government sought to achieve its twin objectives of no land speculators and equal rights. The person who purchased a lease, completed the building covenant and then sold his interest in the lease was not regarded as a land speculator. But the person who purchased a lease, held it in its unimproved state until values increased and then sold it, still unimproved, at an inflated price - or for that matter at any price - was a land speculator. This individual was to be forever barred from the Territory. His banishment was felt to be guaranteed 69

firstly by the covenant, in the lease requiring a building to be erected on the land within a specified time and secondly and more decisively by the legislation prohibiting any transfer or assignment of an estate or interest in a lease until an approved building had been erected thereon. The Territory Administrator, J.T. Goodwin, who on the evidence seems to have drafted the City Leases Ordinance 1921 and Regulations thereunder, was convinced that the no building - no transfer provision would operate as the death knell of the land speculator. The Government agreed even though it did not agree with the whole of the 1921 legislation. Parliament, in so far as it was interested, also agreed. The method of ensuring that each person at the auction had equal rights seems to have been inserted in the legislation at Grant's insistence. But the idea was much older. As far back as 1904 it was being advanced by none other than the 1924 Home and Territories Minister Pearce. In the course of a speech on the Seat of Government Bill in 1904 Pearce said:

the want of capital is an additional reason for having a leasehold system, under which all capital may be devoted to the business and need not, half of it, be devoted to buying out private landlords at fancy prices. 29 The practice of paying premiumsi for leases has been so long established that it may not be easy for many present day Canberra residents to conceive a system of land disposal in Canberra without them. But the principal attraction of leasehold in the early years was that it involved no capital outlay. At auction the purchaser paid the first year's land rent plus a survey fee fixed by the Minister. There is no evidence that the Minister did in fact ever fix any survey fee. The only payment made therefore was 5 per cent of the purchaser's successful bid. The original intention was that the first sale would be held on 1 October, 1924 but an unexpected delay in the preparation of necessary plans had caused a postponement. By August, 1924 a warning was given that lack of accommodation at Canberra would probably compel an abandonment of the arrangements for the 25 October sale. The section of the government hostel I which was to be used to accommodate prospective purchasers was not complete. The Minister duly announced a new date for the sale. It was to be on 12 December, 1924. The Government's plans for the sale were interesting. It would not accept any responsibility for transport to Canberra for the sale and although it promised to ensure that accommodation was available at .government hostels it announced that it would take no responsibility for the comfort of visitors whilst they were there! The delay in holding the first sale afforded the Government an opportunity to review the legislation. The result was the City Area Leases Ordinance 1924. The first City Area leases for residential and business purposes were therefore granted under this Ordinance. 70

The City Area Leases Ordinance 1924 applied to land the property of the Commonwealth within an area specified at any time by the Minister by notice in the Gazette as the az' Area. Under the Ordinance the Minister was authorised to grant, in the name of the Commonwealth, leases of land for business and/or residential purposes. The leases were to be for a period not exceeding 99 years and subject to such terms and conditions as to rent and otherwise as the Minister determined. A lease granted for business and residential purposes could specify the particular class or classes of business for which the leased land could be used and no land was to be used for any purpose other than the purpose specified in the lease. Here was the legislative birth of the purpose clause. The Sulman Committee had considered the question of land use in 1921 and advised that in the initial stages of Canberra development strict control should be exercised not only over the class of business but also over the number of businesses sought tobe established. The Committee recommended that business sites be granted subject to the condition that a building of an approved design be erected within a limited time and used only for a specific business for the first five years. These recommendations seem to have been ignored. At all events the purpose clause was not included in any of the legislation until this Ordinance on the eve of thi first sale. Over the years John Grant, the Senator without a seconder, had striven to convince the Government that every lease should contain a purpose clause. Seldom have speeches supporting motions, many of which were to lapse for want of a seconder, been more influential than those delivered by this self-proclaimed disciple of Henry George. The Sulman Committee had recommended in 1921 that the erection of buildings of a nondescript character be absolutely prohibited in the Territory. To achieve this object and to establish proper standards for building and associated works, the Canberra Building Regulations, the Canberra Electric Supply Regulations and the Canberra Sewerage and Water Supply Regulations soon followed. Henceforth it was necessary for architects, builders, electricians and plumbers to be licensed in order to carry out their work in the Territory. The Canberra Building Regulations contained the rather steadying provision that no builder could commence the erection of any building without a written permit which was obtainable only after the plans and specifications for the building had been approved by the proper authority. The Regulations defined the proper authority as the person or persons for the time being appointed by the Minister. With all of this legislation, containing as it did so many restrictions, the Commonwealth Government approached the first sale of city leases confident in the belief that on its home ground it could ensure a high standard of building, give equal land rights to all citizens of the Commonwealth, obtain a good and ever increasing income fromthe leasehold system and prevent the operation of any land speculator. But the land speculator was an ubiquitous character. 71

In 1923, hundreds of acres of freehold land were being advertised for sale in London under the heading Canberra Freeholds. The advetisements implied that the land was the only freehold in the vicinity of Parliament House. The very natural claim was made that an immense future value for this land was assured. The land, which actually lay in New South Wales across the border about 10 miles from Parliament House along the Cooma Road, had been subdivided into residential blocks. The soothing title of Environa was bestowed on the area by the enterprising land agent H.F. Halloran. Australia House, London was alerted. Halloran actually had an office in the building. The advertisement was amended to read Nearest Freehold to Canberra. The line between misrepresentation and puffing is often a little cloudy but as it was considered that the advertisement involved no false representation of fact no further action was taken. Those in Australia and in London who purchased blocks at Environa - and many did - were left to repent at leisure. The land remains today what it was in 1923 - grazing country. The expanded growth of Queanbeyan along the railway line to Cooma could however change this. The belief or hope that the Commonwealth would receive an ever growing revenue from its land ownership in the Territory was emphasised to the point where very few politicans considered the immense advantages such ownership would be to the town planner. Grant was one exception in so far as he insisted that every lease should contain a clause specifying the purpose for which the land could be used. In spite of his disagreement over the reappraise ment provision in the legislation Grant was convinced of happy days ahead for the Commonwealth. Almost on the eve of the first sale he informed the Senate: The future progress of Canberra will be such that instead of the £40,000 now received in rents we shall derive a large revenue from leased land that will enable us not only. to pay off the money now being advanced but also to afford considerable assistance to the finances of the Common wealth. 3° This optimism did not belong to Grant alone. The Government shared it. Ministers P.G. Stewart (Vic) and Littleton Groom (Qid) expressed it.3 1 Perhaps the emphasis on land revenue remained as much a political necessity as ever. The concept of a federal capital city had many oponents and land revenue was held forth as an answer to the costs charge. 2 In addition, Littleton Groom, who was one of the earliest and most persistent advocates of development work at Canberra, stressed the great saving in office rental an early transfer to Canberra would bring. The Commonwealth Government in 1924 was still very much the poor relation, the near destitute offspring of the States. The reversal of roles was a thing of the future hidden behind years of economic misery and war. The Commonwealth wanted money and it believed Canberra lands would supply it. But it had been obvious to many people for years that before the land revenue could be made to flow the Commonwealth would have to find the money 72

necessary to ensure that developmental work at Canberra proceeded smoothly and evenly and that it was a continuing job. The assumption of office of the Bruce Government in 1923 was another important landmark in Canberra history. The inclusion in the Ministry of Chapman, Groom, Stewart and Pearce was equivalent to a public announcement that Canberra was about to leave the drawing board. Within days Prime Minister Bruce announced that the task of building the capital city was to be placed in the hands of a three man commission. The newspapers around Australia, most with resignation and regret, noted the ultimate triumph of Austin Chapman. The Seat of Government (Administration) Act 1924 provided that a Commission of three members be appointed to control the Territory and assume direct responsibility for its administration and for the construction of the Federal Capital. The Commission was not appointed, however, until 3 November, 1924 and did not assume its responsibilities officially until 1. January, 1925. In the meantime the preparations were made for the first sale to be held on 12 December, 1924. This sale was therefore held in preCommission days but as its consequences were all felt after the Commission assumed control it is better examined with the story of the Federal Capital Commission. The history of Australian land settlei*nent may be viewed as a series of attempts to reconcile aggressive individualism with the necessity to protect society from its frequent excesses. The battle had been fought and lost by about 1860 although the skirmishes until the end of the century hardened popular belief in the justice of the cause. To some extent therefore the Canberra system of leasehold tenure had a philosophical basis. But to invest the system with lofty origins can obscure its more politically mundane birth.

many support this expenditure (Canberra) for no other reason than that they believe that this system of taking the unearned increment for the people will make the capital a payable proposition within a few years of its inauguration. The rise in (land) rental values will be such that it will finance the great bulk of our undertakings... we can establish our capital without borrowing a single penny for the purpose and under a system (of land tenure) which will provide us with a rent producing city for all time... These professions of faith and those previously noted should not obscure the presence of the occasional sceptic. As far back as 1904 Parliament was warned against deluding itself into believing that the establishment of a leasehold system of land tenure would necessarily mean that sufficient money would be obtained to pay even the interest on the enormous capital outlay required to develop the federal territory. 35 But such doubts were unusual. Later the same day Parliament was being urged to acquire a 5000 square mile territory and demonstrate to the world that it was possible to carry on the Government of the Commonwealth of Australia and meet its entire expenditure out of revenues derived from land rent in the federal area. 36 73

The member was anxious to see the federal city made a model city free from the mistakes and imperfections of other cities. He wanted it to demonstrate to the people of the world the advantages of collective ownership of land and industry as against private ownership. But this was too much. Land nationalisation, yes: industry nationalisation, no, was the immediate reaction amidst charges that this was an attempt to establish a communistic state in the federal area. Nearly 20 years later the Sulman Committee was to recommend that during the first stage of its developmental programme reliance should be placed on a co-operative system of supply and distribution of commodities, private enterprise being restricted to those spheres not sufficiently covered by co-operative undertakings. The Committee was seeking to deter needless multiplication of trading and distributing concerns. The strongest accusation made against • the Committee would seem to be that it was trying to change human nature.3 ' But it all came to nothing. Co-operative enterprises there were in the early years in Canberra but they appear to have lacked popular support and appeal. The fate of the co-operative ownership of land was different. The leasehold system of urban land tenure survived in spite of the concentrated opposition it encountered in its early years which coincided with the reign of the Federal Capital Commission. The Sulman Committee Reports 'and John Grant's speeches during this period are indications of the emergence of a comparatively new appreciation of the Canberra leasehold system. These Reports and speeches evidence a growing awareness that land use control was vital to a planned city. Grant was emphasising this aspect when, speaking to one of his many unseconded motionshe declared::

I would not support a proposal to give any person. . . the lease of a block unless he utilized it for the purpose for which it was intended. 38 The Minister for Works and Railways, P.G. Stewart, was aware what this control really meant. He informed Parliament:the whole of the cities of the world have, like Topsy, 'just growed' in a haphazard fashion . . . Canberra. is the only city in the world that will be built from the start to a definite plan which embodies all the most modern requirements of town planning. 39 Walter Burley Griffin, the Town Planner, had of course mentioned all of this a decade or more earlier but over the years the continual stressing of the revenue a leasehold tenure would bring to the Commonwealth tended to obscure the other benefits obtainable from strict land use control. The relationship of Canberra's leasehold tenure to city planning and development was to be highlighted in the next period of the city's history. This was the period of the Federal Capital Commission set up by the Bruce Government in 1924.

74

NOTES ON CHAPTER 4 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27 28. 29. 30. 31. 32. 33.

The Public Works Committee 1924 directed or endorsed this. Construction of Canberra. First General Report of the Federal Capital Adivsory Committee. P.D. 96:9340 P.D. 102:144; 104:1334 The Argus, Melbourne, 1 February, 1922, P.D. 95:7538; 108:4094 P.D. 108:3189 The Argus 7 August, 1920; 16 November, 1920. P. D. 94:7383; 95:7538; 97:11581 RD. 69:6961 P.D. 19:1516 P.D. 17:5718 P.D. 92:3167 P.D. 116:198 E.W. Foxall, Australian Economist, Vol.3, l9Ol-p.l 3. P.D. 71:2218 See Dissent, Autumn 1968 article by D. Rawson The Age 25 April, 1922. The Argus 25 and 26 April, 1922. Construction of Canberra: Second General Report of the Federal Capita Advisory Committee (Sulman Committee), 1922 p.'?, para.44. Joint Committee of Public Accounts: Report on Canberra Housing, 1923. P.D. 104:1312 RD. 106:664 P.D. 106:1308 P.D. 106:1314-5 Ibid RD. 107:1798 See The Argus 26 July, 1924 The Sydney Morning Herald, 26 July, 1924. See The Argus 13 and 14 August, 1924; see also P.D. 108:3023. P.D. 19:1493 P.D. 109:4461 P.D. 106:306 O'Collins G. Patrick McMahon GlynMelbourne M.U.P., 1965. P.D. 71:2699

75

34.

P.D. 71:2249

35.

P.D. 19:1515

36.

P.D. 19:1968

37.

See The Sydney Morning Herald, 11 December, 1924.

38.

P.D. 106:663

39.

F.D. 106:309

76

CHAPTER 5

THE FEDERAL CAPITAL COMMISSION 1925-1930

The Federal Capital Commission began operations on 1 January, 1925 and from that date until 1 May, 1930 when the Commission was abolished the history of Canberra and of its leases is essentially a story of the Commission. The members of the Commission were:John Henry Butters: John Harrison Clarence H. Gorman) Secretary:

Chairman Part time members Charles S. Daley

Butters, who dominated the activities of the Commission, was formerly Chief Engineer and General Manager of the Tasmanian Hydro-Electric Department. The Act establishing the Federal Capital Commission provided that it should be a body corporate with perpetual succession and a common seal, able to acquire, hold and dispose of real and personal property and capable of suing and being sued. In short, the Federal Capital Commission was a statutory corporation. The policies or attitudes of Australian political parties towards statutory or public corporations (the terms are synonymous) reflect the changing world assessments of their value. At different times in different countries these corporations have been denounced as the instruments of socialism or as devices of political reaction. On the other hand they have been hailed as possessing a greater managerial efficiency than a public service department can ever attain and as the only satisfactory method of getting a big job completed. In Australia, the Labor Party in Government under John Curtin, and more particularly J.B. Chifley, came to regard statutory corporations as not merely useful methods of carrying out some large public undertaking but as the only satisfactory or worthwhile method. But this attitude was years ahead and in 1924 Opposition Leader Matthew Chariton led the Labor attack on the Bill establishing the Commission.' The arguments used were that the Sulman Committee, a body composed of able and competent men had given satisfaction at a low cost and that the great progress which had been made in the 1921-1924 period removed any justification for a Commission. The administrative blunders and financial scandals associated with the War Service Homes Commission in the early 1920's were used to support the claim that it was 77

wrong in principle for Parliament to delegate its authority. Another complaint against the proposed Commission was its freedom from Public Servide Board control in recruiting staff. In introducing the legislation establishing the Commission the Minister assured the House that the Commission would be required to make the best use of the revenue and resources of the Territory. Land was the only significant resource in the Territory and over the years Parliament had repeatedly expressed its belief that the revenue to be obtained from leasing this land would be a handsome endowment. The Commission was thus given the task of reaping a harvest for a Parliament whidh was in no mood to pay the cost of cultivation and for a public increasingly indifferent to the concept of leasehold. The land struggles of the nineteenth century had receded into history and Australians of the Commission era, reared with the idea of freehold land, had come to regard it as a birthright. Land ownership signified social status. It was the hallmark of success. A man's worth was assessed by his land and bullocks and whether he was a returned soldier. If the right of property ownership was an unconditional right, and it was so regarded, any reference to its obligations was dismissed as nonsense. For -whether the obligations were fulfilled or neglected the right continued unchallenged and indefeasible. Urban leasehold land tenure with its multiple restrictions on ownership was an unwelcome if not frightening -deviation from the norms of the free enterprise freehold society. It was a restriction on that basic liberty which entitled the economically strong to lawfully maim the weak in a civilised society. Yet in 1924-1925 there were no civil right sit-ins or demonstrations and no organised opposition to the Canberra experiment in land nationalisation. The feeling against leasehold was a strong undercurrent which manifested itself in 1927 and the succeeding years. One interesting example of the Government's and Parliament's attitude to Canberra can be seen in the fact that the Commission was made to commence its operations very much in debt, it being charged with the total Commonwealth expenditure on the Territory for the Seat of Government right back to 1901. The interest payable on this amount was fixed at 2 1h per cent per annum for expenditure before the Commission was appointed and 51h per cent for expenditure thereafter. The actual amount of this commencing indebtedness was long in doubt, the Commission not being advised until 1928 that the Auditor-General certified the -amount to be £3,900,000. Perhaps the imposition of this financial burden on the Commission arose from a desire to continually remind it that it was obliged to conduct the Territory on a business basis and make the whole thing pay. Or perhaps it was the result of a lingering belief that the Commission, as the custodian of Territory lands, was necessarily going to make a large amount of money and ought to be loaded with this original debt. The Commonwealth had, by June, 1924, erected 88 permanent brick houses in the Territory and was continuing to make use of the former Molonglo. Internment Camp (in the area known today as Fyshwick) 78

as temporary accommodation for married men. In addition, late in 1924, 51 of what were styled portable cottages were erected at Westlake. It was clear that if Parliament was to meet in Canberra in mid 1926 rapid progress in constructional work at Canberra was essential.' The Federal Capital Commission was therefore vested with wide powers and duties. The task allotted to the Commission meant in effect that it was destined to become something of a building, planning and constructional authority, completing such buildings and works as had been commenced and planning and constructing such new buildings and works as would be required to meet the Government's intention. And yet the Commission was much more. It was the delegate of the Minister, the municipal Government of the Territory recommending laws for and administering everything in the Territory from the maternity home to the cemetery. The Federal Capital Commission was therefore much more than a Lands Board although that was one of its functions. It was given complete control of all Crown Lands in the Territory and by a 1926 amendment to the Seat of Government (Administration) Act title to all such land (other than the sites allotted for the provisional Parliament House and the GovernorGeneral's residence) was vested in the Commission. The Act provided that the Commission was not to dispose of the freehold title to any of this land. The commencement of the Federal Capital Commission more or less coincided with the; leasing of business and residentialsites within the City Area, the first sale of leases having been held on 12 December, 1924. The Commission was however acutely aware that it inheritedthe policy of leasehold land tenure and it saw its task as being one of carrying on the administrative work involved in giving effect to existing legislative provisions. This indeed may have been the Commission's role in its initial months but thereafter it moulded those legislative provisions in its own fashion. Messrs. Richardson and Wrench Limited of Sydney acting in conjunction with Messrs. Woodgers and Calthorpe of Queanbeyan conducted the first sale. The auctioneer was Mr. C.H. Crammond of Sydney. At subsequent sales the Queanbeyan firm acted alone and for years those who questioned its exclusive engagement were curtly reminded that the members of the firm were returned soldiers. The first sale of City Area- leases was held on the slopes of Capital Hill with about 300 people in attendance. The sale received a surprisingly wide press coverage, most newspapers stressing its historical significance. From Melbourne, The Argus of 13 December, 1924 carried a story from its Special

Reporter: On a sun scorched hillside overlooking the partly erected provisional Parliament House six leasehold subdivisions in the city area of the Federal Capital were offered for sale by auction today. The sale was of historic importance, but the comparatively small assemblage of buyers suggested that the significance of the occasio n was not fully recognised. With the exception of a handful of businessmen from Melbourne and Sydney the 79

attendance consisted chiefly of residents of the district, who were the principal purchasers of the leaseholds. It required a strong imagination to picture the Canberra of the future with graceful edifices where now there are only grassy slopes intersected by very dusty roads. Before inviting bids the auctioneer described the sale as being worthy of a place in Australian history. He expressed the hope that the first contracts for business and residential leases would be made out in triplicate and that one copy of each contract, together with the mallet, inkstand and gold pens used at the sale would be preserved. Where were these mementoes of the sale to be housed? Some reports have the auctioneer saying they should be kept at the National Library, others said the National Gallery, but'The Argus, perhaps sensing the stormy battles yet to come, said it was the National War Memorial. But historical relics were not auctioneer Crammond's only concern. A few days earlier, 10 December, 1924, the Sydney Morning Herald had featured an article headed Canberra : An Asset or a Liability, in which harsh judgments were passed on Canberra generally and in particular on the leases about to be auctioned. Crammond pointed out many errors and described the article as unfair, untrue and un-British. None the less the article is interesting as evidence of some of the conceptions and misconceptions about Canberra leases which prevailed at the timç. A total of 290 residential and 194 business sites situated in six different parts of the city were offered at the auction, the idea being that the city should be developed concurrently at these points. First sub-division to be offered was Eastlake (later known as Kingston) containing 12 business and 68 residential sites. Manuka, planned for a retail shopping centre was next and then followed residential sites in Blandfordia and Red Hill, described by the auctioneer as the Darling Point of Canberra. (Blandfordia became known as Forrest some years later). Business sites in Civic Centre and business and residential sites in Ainslie were also offered. The first block put up, a business site in Eastlake, brought an immediate bid of £650 which was the upset price. The bidding ran rapidly up by £50 rises to £1,750 when H.F. Halloran, of Sydney and Environa fame, who had been competing with J. Colman of Messrs. J.B. Young Ltd., storekeepers, of Queanbeyan for the honour of first purchase jumped to £2,000. Colman bid another £50 and the first lease was knocked down to the Queanbeyan firm amid applause. Halloran however gained the distinction of purchasing the first residential site, the upset price of which was £200, with his bid of £400. (For particulars of purchases and prices at the first sale see Appendix "A"). The newspaper reports of the first sale were all careful to remind their readers that the prices bid merely fixed the capital values and that all the purchaser paid at auction was the first years land rent, which amounted to 5 per cent of the capital value. From Sydney, The Daily Telegraph of 13 December, 1924 after referring to the sparsity of attendance at the sale declared that 150 leases were sold at the total capital value of £60,000 which 80

will bring the Commonwealth a yearly revenue of £3,000. It was a rood beginning and the day will go down as an event in Commonwealth history. The Federal Capital Commission disposed of an additional 67 blocks of city area leases subsequent to the sale and the following schedule sets out the number of blocks sold in the various centres to 30 June, 1925:

Subdivision Ainslie Blandfordia Civic Centre Eastlake Manuka Red Hill

Residential

Business

37 16

6 20 12 23

68 32 153

61

Capital Value £15,414 6,635 14,700 26,150 10,282 11,302 £84,483

The Commission, convinced that commercial dealings in land would be facilitated and placed on an assured basis only after the establishment of some known and acceptable form of land title registration, promptly decided to register leases under the Torrens system. Th6 Real Property Ordinance under which the system was to operate came into force on 19 May, 1925. The meaning and method of operation of the Torrens system will be examined in a later , chapter it being sufficient at this stage to acknowledge that its use should have made Canberra leases more attractive as security. The problem was however much more fundamental than a mere question of land title registration. Leasehold interests were known in country districts - particularly in Queensland - but the prescription of an exclusive leasehold tenure in an urban area was unknown. Investors and their legal advisers read into the legislation establishing this tenure all sorts of frightening possibilities. Articles such as that which appeared in the Sydney Morning Herald on 10 December, 1924 almost on the eve of the first sale, only fed the suspicion.

The stringent conditions of the leases will make our State banking institutions shy of assisting a client to build. Whether the Commonwealth Bank will step into the breach and accept these leases as security for reasonable advances remains to be seen. The power given to the Minister to include in a lease what additional covenants he 'may think advisable' is too far reaching for the ordinary mortgagee to feel safe under while the ever possible determination of a lease through failure to carry on the allowed business would necessitate close investigation beyond the security in the strongroom. Any instrument of title which cannot be hypothecated readily loses its value. Canberra leases cannot be other than a drug in the market unless the Government evolves some method of financing leases. The Commonwealth is the landlord, the lessees will be improving its property and advances to a fixed limit of improvements could not go wrong. Besides the greater the improvements the greater will be enhanced the value of surrounding vacant lots. 81

The Commission soon opened negotiations with the Comnonwealth Bank to interest the Bank in lending money on Canberra leases for building purposes. After some delay the Commonwealth Bank Board advised that it was not interested in the proposal. Chief Commissioner Butters arranged a conference with the Bank Board and although he claimed to have left this conference somewhat hopeful he was apparently taking nothing for granted. He took the matter up with Home and Territories Minister Pearce and requested that either the Prime Minister (S.M. Bruce) or the Treasurer (Dr. E.C. Page) or both of them advise the Bank Board that it was the Government's wish that the Commission's request be granted. Pearce agreed. Whether the Bank Board ever received this advice is not clear but what is known is that after a long delay the Commission received advice from the Bank Board that the Commonwealth Bank would not be lending any money on Canberra leases. The delay was occasioned by the Board's sending the Commission's proposals to its legal advisers for an opinion on the value of Canberra leases as security. The Chief Commissioner's prompt reaction to the Bank's refusal illustrates his ineligibility for membership of the league of indecisive and vacillating administrators. He issued instructions that an Ordinance be immediately drafted the effect of which would have been to give the Federal Capital Commission power to establish a Bank for receiving deposits and advancing money to persons desiring to build. The draft Ordinance which was soon prepared provided that the Commission was to conduct ordinary banking business and pay depositors four per cent on their money and loan it at 6 per cent or 634 per cent, the difference being considered sufficient to pay expenses. Butters declared the proposed legislation had been prepared to let the Commonwealth Bank authorities know that if the refusal to accept Canberra leases as good security was continued the Commission was ready, willing and able to move into the banking field in the Federal Territory and presumably drive the Bank out. Not surprisingly the Government acted quickly. When Pearce received the draft Ordinance in Melbourne the telegraph wires ran hot. Butters was instructed to go to Sydney immediately and there, in company with the Prime Minister and the Treasurer, he was closeted in conference with the Commonwealth Bank authorities once again. The confrontation could not have been a happy get-together. Prime Minister Bruce was genuinely interested in Parliament meeting in Canberra at an early date and no doubt a reasonable amount of arm-twisting by him hastened the solution. The Bank surrendered. It would accept Canberra leases as security for money advanced to lessees.' The Commonwealth Bank attitude in 1925 was undoubtedly at variance with the remarks on Canberra leases alleged by one member in the Representatives in 1924 to have been made to him by the foundation Governor • of the Bank before the Governor's death. The Governor (Denison Miller) was alleged to have said:-

82

Let the Government give me the Canberra Territory for 20 years and I will build them a Parliament House costing £2 million, put up all the houses they require, present them with all the necessary administrative offices, and at the same time I will make a very good dividend for the Bank and will hand the Territory back to the Commonwealth in 20 years time. 4 To have achieved this something more substantial than mere weekly or fortnightly tenancies of houses would have been necessary. Perhaps the late Governor was less impressed than his successors by legal opinions on the mortgage value of leasehold tenure. Or perhaps he considered the quality of advice he could receive from a Legal Department as so suspect that he never even bothered to create one. But whatever the reason the Commonwealth Bank was not alone as a reluctant mortgagee in the Territory. No private Bank ever sought this class of business although as the years passed some of them accommodated special clients particularly those offering additional security outside the Territory. The small Queensland National Bank, maybe because of its wider experience with leasehold tenure, had fewer inhibitions about accepting Canberra leases as good security. In a letter to the Commission

dated 7 May, 1928 the Bankwrote: the present leasehold tenure has not in any way prevented us from granting advances against the security of property in Canberra. The Queensland National Bank had the distinction of being the first Bank mortgagee in Canberra but the policies and activities of a small Bank could not lessen the suspicion and remove the fears of the larger Banks. Nor could it satisfy much of the demand for money to build. The better known Insurance Companies were more resolute in their rejection of Canberra's leasehold tenure. Unlike the Banks, these Companies did not seek to create a public impression that a mortgage over a Canberra lease was an acceptable security and then require additional security before making any advances. For many years the A.M.P. Society refused to lend money on Canberra leases. It dismissed. them as worthless securities. The opposition to the Canberra leasehold tenure may have been very largely a fear of the unknown. Its novelty alone excited fear - no money lender likes to stray from the worn path - and yet there were specific objections some of which have since been legislated out of existence whilst most of them have been forgotten. Time has shown them to be groundless. The following quotation from the Sydney Morning Herald article is a fair illustration of the groundless fear or prevailing misconceptions or illinformed comment:

If a lessee starts out in business as say, a chemist, sub-clause (f) fixes that particular block as a chemist's shop for the periodof his lease, 99 years. Woe betide him if he tires of the smell of castor oil and hankers after the life a tobacconist. He, or his widow, or his descendants, or his assigns must carry on the trade in pills to the bitter end for clause 3(a) says - If after completion of a building as aforesaid the land is at any time not used for a period of two , years for the main purpose for which this lease is granted the Commonwealth may determine the lease. 83

The misinterpretation should have been obvious even to those who were looking for a stick with which to beat the Canberra leases. The lease granted for business purposes only could in fact be used for any activity provided the activity fell within the broad meaning of the term business. The class, of business commenced on a business purposes only lease did not permanently fix the class of business for which the land could be used. The practice of denoting the particular class of business which could be conducted on a lease began with the leases granted in 1924 but the Commission was extremely sparing in the use of this power. The Commonwealth power to determine a lease was exaggerated out of recognition, it being forgotten that to determine a lease the Commonwealth must show cause. The power given to the Minister to include in any lease such additional covenants and conditions as he considered necessary or advisable brought strong objections. Even the most unimaginative feared its possibilities. With changing Governments and the urge of utopian ideas, what might not be considered necessary and advisable? In practice, the Minister has not only not abused this power, he has in fact hardly ever used it. The only exception has been a penalty rate for late payment of land rent and prescriptions relating to the building to be erected. But who amongst those who regarded the leasehold tenure as a hybrid creation would have been willing to concede that this was the most likely event? Other objections raised were that the lessee had no tenant right in improvements and that a transfer of the lease was barred until the building had been erected. But above all else the particular provision in the Territory leasehold legislation which excited the greatest suspicion of money lending institutions was the re-appraisement provision. In the financial world of the time a leasehold estate upon which land rent could be increased was incurably defective as a security. It is clear that section 16 of the City Area Leases Ordinance 1924 (which in effect barred transfer or assignment of a lease before the building was erected complete) was and was meant to be a barrier through which no land speculator could pass. The section was not without defects. Upon the death of a lessee before the building was completed the lessee's beneficiary was entitled to sell the unimproved land. In permitting this exception to the no building - no transfer provision, Parliament had allowed emotion influence its judgment. A reasonable argument could be made out that the widow beneficiary - and there was one widow of a lessee in 1925 - was entitled to a refund of rents paid. But was it correct to permit her to sell the unimproved land? Would it not have been more sensible to grant the widow some exgratia payment rather than permit a re-sale of unimproved land and thus distort or disturb the valuation pattern? This very minute avenue through which speculation in unimproved land was possible would of course have had little if any effect had not the 1925 Ordinance turned the avenue into a many lane highway.

84

Section 16 was repealed by the 1925 Ordinance and a new section 16 was inserted. The new section adopted the repealed sub-sections, substituting the Federal Capital Commission for the Minister, but it included a new subsection which provided: (3) The Federal Capital Commission may consent to a legal or an equitable transfer or assignment of a lease or an interest in a lease before completion of a building in accordance with a building plan or design prepared or approved by the Federal Capital Commission for the building to be erected on the leased land where it is satisfied that a building in accordance with that building plan or design is either about to be erected or about to be completed on the leased land.. The City Area Leases Ordinance 1925 was gazetted on 5 November, 1925 and section 16 was expressed as being deemed to have commenced on the date of the commencement of the City Area Leases Ordinance 1925. The Commission explained sub-section (3) as being necessary to enable transfers of leases prior to the erection of a building in cases where for financial and other reasons the existing procedure proved embarrassing. 6 The ultimate effect or operation of this amendment was so obvious, so certain and so inevitable that here is one of those occasions in history when the benefit of hindsight can be disclaimed. It was as 'though every page in the history of Australian land settlement was ripped to shreds or airily dismissed with this one reckless amendment. Over 130 years previously, Governor Phillip, guided by his innate commonsense insisted that land was to be made available only to land utilisers. Time and time again the evils which flow from a relaxation of this policy were spelled out in the story of Australian land settlement. The very, leasehold system the Commission was being called upon to administer was largely inspired by desire to prevent those evils. Yet in 1925, the Federal Capital Commission, completely unaware or unappreciative of the lessons of history, sought legislative sanction for land speculation. And Parliament gave that sanction! The door was open for the land speculators and they entered with glee. They were at home again and they operated at leisure. The mistakes made by the Federal Capital Commission were certainly much fewer than those alleged against it but all the Commission's mistakes real or alleged - fade into insignificance when compared with the removal of a restriction which was considered almost certain to keep the land speculator out. From this mistake flowed many of the biggest problems which were to beset the Commission. The Public Works Committee in 1926 conducted one of its innumerable enquiries into Canberra. (Between 1914-1928 the Public Works Committee conducted 24 enquiries on Canberra). In evidence before the Committee Butters pointed out that although leases which had been sold in Canberra contained certain building covenants the Commission had the power under the Ordinance to approve the transfer of a lease providing it was satisfied the building covenant would be carried out. The Chief Commissioner's conclusion

85

that this was permissible under the law and could not be prevented by the Commission means that the Commission believed section 16(3) was a direction rather than a discretionary power. In later evidence Butters was even more emphatic. He declared that there was nothing in the Territory law which said the land must be built upon before a transfer could be made and that the Commission had no real power to refuse transfers. Butters informed the Committee that there was really little opportunity for land speculation at Canberra although he conceded that quite a number of leases had been transferred before building operations commenced. He suggested that in tions or that they bought for sentimental reasons. These absurd claims were to be repeated for decades. No one chose to disturb them by asking whether the 1924 purchasers bought on chance that they might actually build in Canberra or whether they bought on chance that an opportunity would arise to transfer the lease at considerable profit without their having done anything but pay the first year rental. Perhaps the question did not really matter. The sentimental purchasers had both chances. The Chief Commissioner informed the Works Committee that it may be true that in several cases lessees have been asking premiums on the prices they paid ranging from £200 to £1,500. They may be looking for "mugs ". In a number of cases we have agreed to transfers under which the original lessees have made a profit. We cannot very well prevent it. The first auction held by the Federal Capital Commission was that on 10 February, 1926 when the lease of a site for the erection of a picture theatre at Manuka was sold at a price representing a capital value of £7,000. The Commission however had been selling by private negotiation leases passed in at the 1924 auction. But what is referred to as the second sale was held on 29 May, 1926 when 18 business and 80 residential sites were offered, and a further 20 residential sites were sold within a month. (For particulars see Appendix B). The interesting thing about the second sale was the marked increase in prices bid for Civic Centre business sites. The number of leases granted under the City Area Leases Ordinance 1924-1926 to 30 June, 1926 was 354 representing a capital value of X166,311. The blocks represented in these leases were situated as follows:Subdivision Ainslie (Residential) Ainslie (Minor Industrial) Blandfordia (Residential) Blandfordia No. 4 (Residential) Blandfordia/ No. 5 (Residential) Civic Centre Section 48 (Business) Civic Centre Section 1 (Business) Eastlake (Residential)

No. of Sites Leased 74 20 28 6 6 30 18 68 86

Capital Value £ 11,797

18,500 11,275 2,775 2,495 20,400 39,100 12,070

-.4

Eastlake (Business) Manuka Centre (Business) Red Hill (Residential) South Ainslie (Residential) Telopea Park (Residential) TOTAL

12 24 42 20 7

14,080 11,582 14,252

354

£166,311

5,505 2,560

The construction works completed at Canberra in pre-Commission days were mostly of the major engineering or servicing variety i.e. water dams, electricity generating power house, sewerage trunk lines, brickworks etc. By 1 January, 1925 only 88 permanent brick houses had been erected. The coming of the Federal Capital Commission spelt the end of what some condemned as the Government's half hearted approach to Canberra. The works programme initiated by the Commission soon began to give Canberra a look of permanence. Each of the Commission's accomplishments made the policy of an early transfer to Canberra more certain to be carried out. Undoubtedly all of this had some effect on Canberra land values. No longer was the pur chaser in doubt about the future of Canberra. Parliament would soon meet there, the territory would become the Territory for the Seat of Government in fact and in law, Departments would be trnsferred and Canberra's future population growth and investment prospects assured. Some people sought comfort in the belief that the steeply increased land prices of 1926-1927 were solely a reflection of the Commission's building and constructional activities. And perhaps a few found the comfort they were seeking. But on the evidence such a conclusion was only a delusion; It ignored the attraction section 16(3) was giving to Canberra land sales. The Federal Capital Commission believed (or was it advised?) that the subsection actually obliged the Commission to consent to all transfers and it acted accordingly. As Butters said to the Public Works Committee in 1926:-

the Commission could not reasonably refuse a transfer within 1 year and 11 months - we have no real power to refuse. . . I cannot see how we can reasonably prevent the sale at higher prices than those at which they were originally obtained. .. It may have been the intention of Parliament to prevent land speculation but machinery has not been provided us to prevent it entirely. . . there is nothing in the law which says the land must be built upon before a transfer is made. . . we cannot pay any regard to the profit which may be made. . . notwithstanding the intention of Parliament land speculation still exists to a limited extent at Canberra. The shifting of responsibility for land speculation to Parliament was justified in the sense that Parliament had allowed the single exception to the no building - no transfer provision of the 1924 Ordinance to be widened. But then it cannot be forgotten that the Federal Capital Commission itself requested the addition of section 16(3) - and that the Commission could -

87

with equal success have requested its removal. Yet nobody in Parliament or outside seemed to notice that if the door with the engraved invitation to the speculator was closed many of the problems which beset the Federal Capital Commission would never have arisen. It was not that no One noticed the effect the speculator was having on land values. Many did notice this but no one seemed to notice how he or she came in and how he or she could be put out. In later years when asked the total number of these (no building) transfers various Ministers would renly about 30. The number was in fact much higher, probably reaching closer to 130 by the end of 1929. This number may appear small but it must be viewed against the total number of leases granted. By the end of 1929, 485 leases had been granted under the City Area Leases Ordinance and of this number 186 had been surrendered. Most of these transfers (certainly all the big profit ones) occurred in the years 1926-1927. A list has been prepared (Appendix "C") which is neither a complete list of all the transfers which were effected in these years nor a selective list in the sense that only the high profit ones are included. The ten cents or one shilling (1/-) and the one dollar or ten shilling (10!-) premiums are listed along with the £1,000 ($2,000) and the £3,000 ($6,000) ones. The amounts are not really impostant: the principle involved was the same whether the amount paid was big or small. The original lessee was receiving money for the leased land without his having turned one sod, removed one stone or disturbed one blade of grass and in some instances without his having even seen the land. This disgraceful state of affairs must heap shame on the Tenth Parliament of the Commonwealth of Australia for its failure to recognise the cause of and cure for this unjust enrichment. The first commandment of the federal territory leasehold system enunciated by its early sponsors Thou shalt build on the land was allowed to be overgrown with the poisonous weeds of land speculation. Parliament after Parliament had been the scene of speeches insisting that land in the Territory should be made available to land users only: Keep your claws off our Territory' was Barton's 1903 warning to the land speculator. Come one - come all was the invitation issued by the Federal Capital Commission in 1925 with the full approval of the Tenth Parliament.

whilst I should not blame any man who would speculate in federal territory lands if he got the opportunity I should very severely blame members of this Senate who are here to conserve the public interests if they did not try to prevent him doing so... The words of Senator Arthur Rae (Lab. N.S.W.) spoken on 17 November, 1910 echoed the general sentiment of the time but in 1926 the Parliamentary attitude to land speculation in the Territory was one of almost complete indifference. Those who saw and disapproved forfeited their opportunity to influence events when they failed to prescribe the simple but only effective remedy. Indeed, they even failed to identify which door had been opened to permit the speculation. 88

The position of the Federal Capital Commission was different. The Commission was established to build a city in the wilderness and to do go in a hurry. Its charter was wide but the central core was build, build and build again. It was charged with the administration of the Territory and required to make the best possible use of the revenue and resources of the Territory. Land was the only significant resource and increased land values meant increased revenue. The belief that the Commonwealth's ownership of land in the Territory would bring substantial revenue had not lost its appeal. 8 As late as 1928 the anticipated revenue was being spoken of as a fund that will assist to wipe out the national debt. 9 Within its administrative structure the Commission included the office of Registrar of Land Titles and it may be assumed the Commission was well aware of how the land speculators got in, the extent of their operation and the effect these operations were having on land values. It must therefore be asked: did the Commission consciously obtain the 1925 amendment to force land values upwards? There is certainly more convincing evidence to suggest that this was the Commission's motive than there is to support alternate explanations. Butters informed the Parliamentary Public Accounts Committee (1928) that not more than a moment's thought was needed to realise that if nothing better than the 1924 sales returns were obtained Canberra would be hopelessly uncommercial. I very quickly realised by observation and a little mental arithmetic that the residential blocks in 1924 were really a substantial gift by the Commonwealth Government to the purchasers. The Federal Capital Commission, claimed the Chief Commissioner, interpreted its responsibilities as involving a trusteeship for the people of Australia as well as for the people of Canberra and could not be unmindful of the fact that it had to pay interest and sinking fund on all expenditure. Surely, said Butters, the Commission should expect that no land sold should involve it in a loss. The Commission was entitled, he continued, to expect that the land within any individual subdivision should show some reasonable profit to the Commonwealth after expenses were met. The Chief Commissioner's statement must be read within the context of that time. The Commission was under constant attack in Parliament and around Australia generally for not making an immediate profit. His statement therefore was not a broad dissertation of the principles of the leasehold scheme but sufficient unto the day for particular attacks. The idea was being put about by some critics that federal capital expenditure was supposed to be self-regeneratingby immediate recoupment to the Commonwealth. To achieve anything like this the Commission needed land values to be as high as possible. Of course the whole idea of immediate capital return was as mistaken then as it is now. It fails to realise one simple but basic distinctive mark of the Canberra leasehold tenure .. . the land upon which the money is spent is leasehold granted for a term certain (99 years) and thereafter for an indeterminate term. In time, the lessees and their successors pay annual

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rentals which constitute unfailing dividends of at least 5% per year on the Commonwealth capital expenditure. That increased revenue was the Commission's motive in permitting land speculation seems clear when rural (farming) leases are considered. Many rural lessees transferred their leases at considerable profit. These transfers were made with Commission's consent, and, as new leases were granted, or existing ones came up for renewal, the rent was increased having regard to the substantial profits being made by those who bought and sold rural leases. It was though the Commission was pumping the market to give itself a justification for increasing land rentals. The position inside and outside the City Area was the same . . without the speculators, land values would have been static, with them land values became artificially high. Alternate explanations for the relaxation or practical removal of the no building - no transfer provision includes (a) the desire to get land out of the hands of people who had neither the intent nor the financial resources to build and into the hands of people who could and would build, and (b) a disinclination for a mass determination ofleases. These are less convincing than the desire for increased revenue. The timing of the speculator's passport, section 16(3) of the City Area Leases Ordinance 1925, is not without interest. The Ordinance was gazetted on 5 November, 1925 in the midst of an election campaign. This gazettal meant in effect that the Ordinance became law on 5 November, 1925. It was of course open to Parliament to move for its disallowance within 15 sitting days after the day the Ordinance was laid on the table. But the next sitting day was at least two months away. In short, the City Area Leases Ordinance 1925 was in operation at least 3 months before Parliament had a chance to notice it or ignore it. The Tenth Parliament which met in- February, 1926 ignored it. The Tenth Parliament was elected on 14 November, 1925. The election • was a sweeping victory for the Bruce-Page Government Parties. Labor suffered badly at this election by the charge that it was being infiltrated and influenced by Communists. The Government parties won 50 seats in the Representatives to Labor's 22 and 2 Independents. In the Senate, Labor was left with 7 members as against 29 members of the Government parties. The election result may be of interest as background to the Tenth Parliament but in the context of Canberra leases the result has no significance. The simple fact is that if the Labor Party had any policy on the operation of Canberra's leasehold system during this Parliament the policy was neither published nor. discussed. Labor was against the Federal Capital Commission and any views the vast majority of Labor members may have had on Canberra were restricted to and coloured by this opposition. 1° Senator H.E. Elliott (Vic. Non Lab.)a persistent opponent of leasehold, visited Canberra in 1926 after the second sale in search of a site in Civic 90

Centre upon which he proposed to build and open a branch of his legal business. He met the Chief Commissioner and was informed that there was no land for sale and that it was uncertain when there would be another sale. But enquiries from the local estate agents, who were of course also the Commissidn's agents, revealed that there were a great number of Civic sites which previous purchasers were willing to sell. Elliott considered the prices so high that he declined to purchase any of the sites offered. The agent then referred him to 4 adjoining Civic Centre business sites which had been offered but passed in at the 1924 sale. These 4 blocks which formed part of the proposed Sydney Buildings block, Section 48 City, each had a 20 foot Northbourne Avenue frontage. They had been sold some months previously at the upset price of £400 per block. The purchasers, Mrs. Winifred Appleton and Mrs. Anne Courtnay journeyed from Sydney to complete their purchase by paying to the Cornmission the first years land rent of X20 per block. Maybe the Sydney women (they were sisters) did see the land before paying their £80 at the Commission offices. But there is no doubt that they saw the need for a united front when Elliott made his request that any one of the four blocks be sold to him. All or nothing at all was the response. The Senator took all 4 blocks paying a premium of £1,100.' 1 The £1,100 return on an £80 investment may appear good business but in the high noon of land speculation at Canberra it was neither the highest nor the lowest percentage return. The lease of corner Block 3 Section 48 City waz. sold for the reserve price of £1,200. The only payment required from or made by the purchaser was the first years land rent of £60 (Annual Rent. A.R.). The lease was soon resold by the original lessee for a £1,600 profit or premium and then resold again for £2,000 without any improvements at all having been made on the land. The building on this block nowadays is the one presently occupied by Fletcher Jones & Staff Pty. Ltd. The 20 foot frontage Block 20 Section 48 City lease was granted (A.R. £20) 21 December, 1926 and resold by the lessee on 30 May, 1927 for £425. The 20 foot frontage Block 17 lease in the same Section was granted on 11 December, 1926 (A.R. £20) and sold by the original lessee for £350 on 7 January, 1927 and then resold on 15 June, 1927 for £183.12.9. The 20 foot frontage Block 22 lease granted 21 November, 1926 (A.R. £20) was sold by the lessee some months later to Kodak (Australasia) Pty. Ltd. for £3,000. The sales on the 'opposite subdivision Section 1 were somewhat similar. The Block 6 lease purchased on 29 May, 1926 (A.R. £90) was sold by the lessee to the Government Savings Bank of New South Wales for £650 whilst the Block 20 lease purchased at the same sale (A.R. £150) was sold by the lessee for £600 to the Queensland National Bank. But the Banks were at both ends of this speculation. The Argus of 28 October, 1926, carried the following Canberra report: -

The Queensland National Bank is to have the distinction of being the first bank to be established in permanent premises in Canberra. It is lease No. 20 91

facing the City Circuit - which was bought at auction by Dr. C. Finlay of Eastlake at a capital value of £3000 - after the sale Dr. Finlay disposed of hi's lease (A.R. £150) to the Bank (premium £600) which has also obtained a residential site in South Ainslie. One of the most interesting recent developments has been the sale of two leases on No.] subdivision of the Civic Centre by two Banks. The Government Savings Bank ofNew South Wales sold lease No.6 (A.R. X35: premium £250) while the Commercial Bank of Australia Limited has sold lease No. 5 (A.R. £35 premium £275): Both of these Banks had previously acquired sites on No.2 subdivision of the Civic Centre and they took the opportunity of selling at a profit the leases held in the subdivision. The Canberra Times, which commenced publication in 1926, reported an excellent market for business sites particularly at Civic Centre where several Blocks sold at the recent sales have changed hands at substantial increases. 12 But not all the speculation in business sites occurred at the Civic Centre subdivisions. At least 13 of the 23 Manuka business sites sold at the 1924 sale changed hands. At the Eastlake subdivision the position was only a little different. Large scale building operations commenced at Eastlake much sooner than they did at the other subdivisions. Yet about 5 of the 12 business sites there were transferred without any sign of building activity on the land. How was this orgy of land speculation regarded around Australia? The majority of Australians were undoubtedly either ignorant of it or indifferent. What happened at that far away and artificial but developing city of Canberra, the construction of which most Australians opposed anyway, was of no interest to a people grown indifferent to land laws and administration. How was this land speculation regarded locally? In a lengthy editorial entitled Hail the Speculator The Canberra Times of 28 October, 1926 declared enthusiastic support. As always with editorials and newspaper articles it is difficult to decide whether the opinions expressed are any more than the often inexpert and biased personal opinion of the writer. In any event, Canberra master builder Ernest Spendelove held contrary views and claimed for them a wide acceptance. Spendelove, in evidence before the Parliamentary Public Works Committee (1929-1930) said:When I came here (1926) practically every block of building land for residential purposes was in the hands of investors - call them speculators if you like. Any one wanting a block of land had to go to one of these investors, and pay a premium on it. Practically all those blocks have now been surrend ered to the Commission, or have been sold. I think the fact this land was held by speculators had something to do with preventing people from building here. They would not pay the premium, and quite rightly so. They could not see why they should not be able to go to the Commission and buy a block of land over the counter.

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John Stewart Weatherston, Parliamentary Reporter and witness before the 1928 Parliamentary Public Accounts Committee, referred to land rent collected by the Commission from unsuccessful speculative purchasers as being regarded by the latter as a good bet gone astray. Another witness before the Committee, Henry Stanley Richards, Clerk, Department of Treasury spoke of how one gentleman told me he had 8 blocks and if he could make a "tenner" on them he would transfer them but he did not see any hope of doing so. The Sydney press was for the most part scornful of Commonwealth activity at Canberra. Twenty years previously the influence of these newspapers was decisive in gaining the selection of Canberra as the site for the federal capital city but they had never forgotten that Canberra was only a second choice. To them Sydney should have been the Capital of Australia. The Melbourne press generally was equally scornful, equally critical of Commonwealth action and expenditure at Canberra. The Argus however endeavoured to carry informative reports on Canberra land problems. But The Argus of these years was espousing the land policy which it had condemned in the nineteenth century. During the 1850's The Argus lampooned squatters who demanded monetary compensation for the land their early arrival allowed them to grab and in the 1860-1880 period it waA highly critical of selectors who selected some choice part of an existing run and then sought to sell their selection. In those far off years such squatters and selectors were denounced as highway robbers and loathsome creatures who ought to be ostracised by any right minded society. In the 1920's in the context of Canberra leases the person who purchased a lease (i.e. paid first years land rent) and then, without having built anything at all on the land, sold the lease for a profit was an astute business man rightly reaping the reward of his early faith in Canberra's. future! The results of the 1924 sale did not go unnoticed in Parliament. John. Grant was enthusiastic on 26 June, 1925. He calculated that the Commonwealth would receive in land rental an average of £613 per acre for land it had purchased for about £4 per acre. In Grant's view the Commonwealth was not doing too badly but he urged that the 20 year re-appraisement period should be shortened and that greater areas of land be made available. 1 The Minister Pearce in reply declared that the Commonwealth Government had no intention of depreciating the rightful values of land in Canberra by throwing the whole lot on the market at once. Pearce maintained that the fact that all the blocks offered at the first sale had not been purchased proved that ample land had been made available. But to those many members who still dreamed of the day when Canberra land rents would form a substantial part of Commonwealth revenue - some spoke of 40 years hence" - the future looked bright. Canberra city leases had been 'granted and the days when Territory revenue consisted almost entirely of the dribbling amounts received from rural leases were finished. To the many doubters the proposed transfer to Canberra was beginning to look a sound move financially. The increased population 93

would mean increased demand for leases and thus increased revenue. In addition, the payment of rent for office accommodation in Melbourne would cease. The Commonwealth would move to its own buildings in its own territory and pay rent no more. These office rent payments had been a constant source of irritation to most members since the first Parliament in 1901. In the early years these payments were often advanced as something which demanded the early election of a federal territory. Later they were pointed to as something making an early transfer to Canberra imperative. How could these members have foreseen the real position 40 years after the transfer to Canberra? Today (1970) the Commonwealth pays as rent for government offices in Canberra every cent it receives as land rent. How could these members have foreseen that 40 years hence, whilst the land nationalisation programme would continue, the benefits of the unearned increment which they loved to quote would be all poured down the drain to private enterprise no-risk investors to pay for Commonwealth office accommodation. They could not. They were not prophets, they were politicians. They had no crystal balls, they had elections coming and visions of the future were not their business. And in this year of 1925 the immediate future for Canberra looked bright. But the promising picture of 1925 shad changed dramatically by 1926. The land speculators had taken over in Canberra. John Grant was incensed that people who had not laid one brick or even dug out for the foundations for a building should obtain many hundreds of pounds fora lease which cost them a few pounds. He was incensed at Parliament for standing behind the shrewdies who got in first and then demanded a premium of upwards of £1,500 before they would permit one brick to be laid on their allotments. He was incensed that the Federal Capital Commission should fix an upset price on the blocks made available. 1 He contended that hundreds of blocks of land were being deliberately held out of use, the holders of the leases waiting for a rise in values. He described these lessees as belonging to the great nursing brigade and maintained that if the Federal Capital Commission had the right to re-appraise the blocks in Civic Centre every 12 months the nurses holding for a rise in value would have to build on them or dispose of the leases.' 6 The argument that if the rent were too high no one would buy the leases was countered with the claim that no one would purchase the lease of an annually re-appraised block in the first instance unless he intended to build on it. Grant admitted that the adoption of his proposals would cause an immediate drop in land value but maintained that those who were prepared to build on them would be able to do so at a cheap price. Whilst he did favour and in fact often advocate the release of more blocks his most consistent demand was for a more frequent re-appraisal of land values. The proposal never found favour with the Government. Home and Territories Minister Willianil Glasgow (1926-1927) expressed the Government's view thus: -

I can conceive of nothing that would do more to hamper development by discouraging people from building in Canberra than a proposal of that 94

nature because the lessees would not know from one year to the next what would be the valuation of their leases. But Grant was not convinced. He reminded the Minister that every municipality in Australia followed that practice in its annually levied rates. Senator Elliott's demand was more fundamental. He advocated the abandonment of the leasehold system but interspersed between his calls for freehold was an insistence that more leases should be made available and that the Federal Capital Commission should be sacked. Elliott claimed that many buyers at Canberra land sales were men without capital who could not build and who never purchased with any intention of building. He argued that if freehold were being sold and these buyers had to find the cash instead of a mere £20 per annum land rent their speculation would be halted. Wakefield's theory of the sufficient price had not lost its appeal! 18 Elliott contended that the prices realised at auction were not a true indication of the value of the land. He charged the Federal Capital Cornmission with offering about 3 blocks at auction when 10 were wanted. By this policy the Commission was, in Elliott's view, collecting a rack rent. He charged the Commission with fixing upset pricel representing many thousands of pounds per acre for land which cost the Commonwealth about £4 an acre. He conceded that he would have raised no objections had some private land speculator adopted a similar policy but he deplored the Commission playing the role of a land monopolist. . . . it is profiteering on a scale which I have never previously known. Such prices could not be secured had not the Commission adopted the policy of doling out land in quantities insufficient to satisfy the demand . . . in the Federal Capital a good-for-nothing useless out of date Commission backed up by an equally useless Minister is determined that only a limited number of blocks should be made available. 19 The Commission adopted a policy of not permitting a second transfer of leases until the buildings had been erected. The policy was not rigidly applied but as Elliott, who was anxious to re-sell 3 of his 4 blocks, neither sought nor received the benefit of its flexible application he remained a bitter critic of the Commission until its abolition. There seems little doubt that had Elliott sought permission for a re-sale of 3 of his 4 blocks it would have been granted. 2° In any event, Elliott's Company, Lariston Pty. Ltd., completed a building covering the 4 blocks. The claim that the Commission was deliberately forcing land prices to rise by restricting the amount of land made available was not confined to Parliament. Local interests had been agitating on this and related/questions, during the latter months of 1926 and the earlier months of 1927./ The Cornmission's (and the Government's) answer to the charge was to point to the number of blocks unsold at auction and to the fact that much shop and office space was unoccupied. As Butters said:95

4

to open up one further subdivision would have involved several thousand pounds of expenditure in preparation and services and not one single new business would have been attracted to Canberra as a result.2 1 The Commission reviewed the whole question in 1927 and informed the Government of its firm conviction that further business sites were not required. The Commission however compromised its opinion by the addition of a statement that there seemed no objection to testing the situation by holding another sale. The result was the sale held on 9 April, 1927 at which 57 residential sites, 12 business sites, 4 minor industrial and 3 boarding house sites and a site at Eastlake for the erection of a garage were offered. The total capital value of the leases sold was £69,825 or £35,000 more than the total upset prices. All the business sites offered were sold at prices two or three times the upset fixed by the Commission and of the residential sites offered 38 were sold. (Appendix .D). The highlight of the third sale was undoubtedly the disposal of the garage or motor service station site at Eastlake. The upset price for the site was £2,000 but rapid bidding quickly sent the (capital value) price to £11,300 when it was knocked down to H. Brodie of Bredbo. Echoes of the applause and loud cheering which greeted the purchase had hardly filtered away before the purchaser began requesting and later demanding that the capital value and thus land rent (.C565 per annum) should be reduced. Whether the purchaser ever obtained any relief and to what extent is not clear. But what is known is that with the exception of this garage site every lease sold at the third sale had been surrendered within 12 months! The fact that the surrenders occurred within the 12 months is of course not without significance. The leases granted under the City Area Leases Ordinance 1924 had contained covenants by the lessee that a commencement would be made in the erection of a building on the land within 2 years after the granting of the lease. But the Commission found the 2 year period unnecessarily long and all leases granted under and subsequent to the City Area Leases Ordinance 1925 provided for shorter periods before the building had to be commenced. Sometimes the commencing period was stipulated to be as short as 7 months but the commencing period for most leases granted at the third sale was 12 months. The sensational distorts historical perspective. The strong impression made by the mass surrender of leases granted at the third sale was no exception. Local opinion became fixed on the event and many are the tales told of how this one or that one had his or her fingers burnt when they joined the ranks of • the speculators. The fact is that Australia was experiencing an economic slump and the purchasers could not find any mugs to relieve them of their obligations. They simply cut their losses and surrendered the leases. The popular concentration on their predicament almost completely obscured the much less dramatic but none the less rewarding speculation spree which had operated earlier. 96

Butters described the result of the third sale as ridiculous and the Cornmission began to consider seeking authority to adopt a method by which any sum bid at auction higher than a certain percentage above the upset price should be paid for in cash.2 2 On the other hand Elliott explained the mass' as surrender of leases as a realisation of the crushing rack rent on the bare ground and not a lack of demand for the land.2 3 The first question to be asked in any review of this period is whether or not those who purchased unimproved leases from the original lessees were really mugs (as the Chief Commissioner described them.) Elliott maintained they were not. 24 He pointed out that the 4 blocks for which he paid the £1,100 premium had been purchased by the original lessees at the upset price of £400 per block i.e. a total annual land rent of X80 was payable on these 4 blocks. The 4 similarly placed blocks over the road on the Melbourne Building site were sold at the following sale for capital values of £2,300, £2,600, £2,700 and £2,900 respectively i.e. a total annual land rent of £525 was payable in respect of these 4 blocks. A not unusual argument against those who demanded that more land be made available was that they ignored the contempt for and opposition to Canberra which had been fostered over the years. What would be the position if 1,000 blocks were made available and only 300 people wanted them? There would be an immediate slump in land values with the result that statements that Canberra was a failure would be broadcast throughout Australia.25 The charge that the Commission had a settled policy of deliberately under-estimating the demand for land with a view to forcing up prices and thus enabling it to make a good showing against expenditure was a' much favoured one by Commission critics. The supporting evidence is however confused by the picture of leases passed in at sales and of empty shops and offices, surrenders, undeveloped leases and the Parliamentary injunction to the Commission to pay its own way. In addition, it completely ignores the effect the land speculation spree was having on land values. The charge finds little support when residential leases are considered. At each of the two land sales held during the Commission's term of office only about 60 per cent of the leases offered were sold and by 1928 the Commission had commenced 'a sale over the counter technique for residential leases. The unpleasant truth about these residential leases being offered over the counter at this time is that some of them were originally held by speculators, who, unable to sell them, had surrendered them. The business purpose lease was a different proposition. Here was the speculator's main playground but the existence of the many empty shops and offices around Manuka and Civic Centre is certainly not supporting evidence of a shortage in the supply of such sites.

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The Commission's charter was to build a city in the wilderness and there seems no reason to doubt that it accurately gauged the demand for residential purpose leases having regard to the expected population' growth and to the very definite hostility to leasehold. A similar attitude seems to have influenced its supply of business purpose leases. An unlimited supply of business purpose leases in Canberra could not have bought one new business to the infant city in the uncertain economic climate of the Commission's term. Almost all historical reviews of the Federal Capital Commission peridd in Canberra's development stress the failure of the Commission to win the hearts and minds of the Canberra people. Whilst this is undoubtedly true no writer seems to notice that a very large amount of this discontent and dissension arose directly or indirectly from the novel form of urban land tenure the Commission was called upon to launch. When considering the Commission and its land administration it ought to be remembered there is nothing more difficult to take in hand, more perilous to conduct or more uncertain in its success than to take the lead in the introduction of a new order of things. The innovator has for his enemies all those who have done (or hope to do) well under the old conditions and only lukewarm supporters in those who may do well under the new. These copsiderations were particularly important in the days of the Commission. The new order was an unpopular form of land tenure designed to give to the State many of the benefits which had previously gone to individuals. Consequently supporters were more non-existent than lukewarm. And yet the Commission failed badly. Whilst it is true that the Commission was an innovator, that it was ushering in a novel and unpopular form of urban land tenure with few if any precedents to guide it, and whilst it is also true the Commission took almost every course which might be expected from prudent men,it is equally true that the Commission failed to take the one course which should have been taken. And that course was a blanket refusal to permit the transfer of unimproved leases. Another most disappointing omission in the Commission period was the lack of any extensive Parliamentary interest, in the operation of the novel urban tenure. It was all very well to favour the establishment of a leasehold tenure but its practical implementation was another matter. Freehold is simple, understandable and profitable for a few who' will always warmly advocate it. It offers glittering prizes. Its evils are monstrous but condoned. The early parliamentarians had talked so long and so often about and against these evils. They had legislated to debar them from the Territory and if the Parliamentarians of the Commission era had concerned themselves more with the operation of the leasehold system, and less with sniping at the Commission on minor administrative matters, the Commission's land administration blunder might possibly have been noticed. But Australian history had now entered a new phase. Whereas previous generations had been acutely aware of the absence of sensible land policies and legislation the Commission

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generation had lost all interest in the subject. This loophole for land speculation continued to operate until 1959. And in Darwin where a truncated system of leasehold struggles to survive the loophole is still available to and enjoyed by the land speculators.

NOTES ON CHAPTER 5 1. 2. 3. 4.

5. 6. 7.

8. 9. 10. 11. 12. 13. 14. 15. 16. 17.

18. 19. 20. 21.

22. 23. 24. 25.

P.D. 106:529 P.D. 103:1061 Parliamentary Standing Committee - on Public Works: Erection of a Hostel (No. 4) at Canberra, 1925. P.D. 106:529 See evidence by Chief Commissioner Butters: Joint Committee of Public Accounts. Report on Housing and Building Costs Generally in the Federal Capital Territory, 1928, p.197. See SecondAnnual Report of the Federal Capital Commission, 1926. P.D. 3:2817 See speech by Butters reported in The Argus, 30 September, 1926 and by Charles Marr M.P. reported in Sydney Morning Herald 23 August, 1927. See evidence by Dr. J.F. Watson to Joint Committee of Public Accounts: Report, 1928. Op. Cit. RD. 114:4381 P.D. 114:4385 3 September, 1926. RD. 110:491 and see also remarks by Pearce in P.D. 6 September, 1926. RD. 110:492 RD. 114:4385 RD. 115:834 RD. 115:812 See evidence by H.E. Elliott to Joint Committee of Public Accounts: Report, 1928, Op. Cit. P.D. 115:819 See evidence by Butters to Joint Committee of Public Accounts Report, 1928, Op. Cit. IbkL Ibid p.211. See also Fifth Annual Report of the Federal Capital Commission p.14. RD. 115:812 Joint Committee of Public Accounts Report, 1928, Op. Cit. P.D. 114:4392

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CHAPTER 6 THE CITY OF DISCONTENT

The Federal Capital Commission officially assumed its responsibilities on 1 January, 1925. Apart from a comparatively few public servants on loan the staff of the Commission was recruited from all over Australia by public advertisement. The Commission staff reached its highest number - 408 - in June, 1929. The Commission was of course a statutory corporation and as such it was not part of the Public Service.i It is important to remember this when considering the attacks on the Commission by public servants shanghaid to Canberra. In the many Parliamentary attacks on the Commission the Public Service Board was often contrasted with the Commission and saluted as a body of dedicated geniuses whose expertise in the recruitment, use and control of staff had established new world standards. Sich a heady dose had its effect - the Public Service Board actually began to believe it - and whilst there is no evidence that any public servant ever suffered because of his outspoken opposition to the Commission it is most probable that some owed their promotion or preferential treatment within the service to that opposition. The population of the Territory on 1 January, 1925 was estimated as being about 2,900 of whom 1350 were in Commonwealth employment as building tradesmen, builders labourers, brickmakers, sewer miners and labourers. During the peak of the Commission's activities the number of men so engaged was approximately 3,500 whilst probably another 500 were employed by private contractors. The laws in the Territory on. 1 January, 1925 consisted of certain Commonwealth Statutes and Ordinances and Regulations made thereunder and where no other provision had been made - New South Wales laws; which were in force prior to 1 January, 1911. The Commission soon made arrangements to have an officer of the Attorney-General's Department attached to the Commission and rapid progress was made providing Ordinances to supersede existing New South Wales -laws which were in many respects unsuitable in their application to the territory. The Commission's immediate task was to plan and carry out the greatly accelerated works programme necessary to fulfill the early transfer to Canberra objective. The services of experienced tradesmen had not only to be obtained, but most importantly, they had to be retained. This meant additional married accommodation was essential and the Commission promptly had 125 of what were styled portable cottages erected at Causeway. Other timber houses for 100

married men were erected at Acton, Ainslie, Westridge (later Yarralumla) Eastlake (hereinafter called Kingston) and Civic Centre. The story of the reign of the Federal Capital Commission is essentially a story of John Henry Butters, the Chief Commissioner for the active part of the Commission's life. Butters, who had been Chief Engineer and General Manager of the Tasmanian Hydro-Electric Department for the 10 years before his appointment to Canberra, dominated the Canberra scene during the 19251929 period. Whilst the years 1912-1920 in Canberra were, in a very limited sense, the years of the American Walter Burley Griffin, the years 1925-1929 were in a very real sense the years of the Englishman, John Henry Butters. Griffin, the Town Planner cum Director of Federal Capital Design, harassed by Ministerial and Departmental jealousies and intrigues coupled with a paralysing diversity of public opinion as to whether Australia really needed a Federal capital city was completely frustrated in his efforts to put his plans into effect. Butters, the Engineer cum Chief Administrator, freed from Departmental control and endowed with a strong personality successfully carried out his urgent mission of construction. But whereas Griffin dealt with plans and designs and peeved public servants and a prejudiced Minister Butters was dealing with a construction programme and very un4appy people - exiles from Melbourne.' And of all the Chief Commissioner's virtues public relations was not the strongest. His attitude topoliticians, irrespective of their party alignments, was one of thinly disguised disdain. The Labor Party, however, contained his most vocal antagonists. William Maloney (Vic) the little doctor of Labor history was one of The most useful act said Dr. Maloney that the Chief Commissioner does will be to leave Canberra. The words "thank God" will then echo in many homes in Canberra and the people are now offering prayers of thanks giving because the dictator's reign has about finished. 2 Prime Minister Bruce promptly rejected this assessment and maintained that when the history of Canberra came to be written it would not be condemnatory of Butters' work but rather it would commend him for the success with which he carried out a difficult task during the early days of establishing the federal capital. them.

The harsh judgements which many of Butters' contemporaries passed on him may, as Bruce implied, be calmly revised by history. This may happen one day and if it does the view expressed by one time Labor man Mathew Reid will be assessed. . . . the Commission was working against the clock. Had a jelly-fish type been Chief Commissioner the large amount of work done at Canberra would never had been done.' One of the most interesting features about the Commission was that whilst it was under constant attack by the Parliamentary Labor Party it enjoyed close and good relations with trade unions.' Butters acknowledged that the Sydney Trades Hall had given considerable assistance to the Commission. It has played the game and enabled us to get on with the job in a way exceeding

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ouranticipations. I might state that the men who pass through Sydney Trades Hall are not angels.6 The population of the Territory had increased to near 5,000 by 1926 the increase was due mostly to the influx of construction workers. The population was further increased by the transfer of 646 public servants from Melbourne early in 1927 and a further 223 in 1929. The buildings being erected by private enterprise were all subject to regulations under the Building and Services Ordinance 1924 which provided that building work carried on by private enterprise could only be performed by registered contractors and in accordance with plans which were signed by registered architects and approved by the Commission .7 In addition, electricians and plumbers had to be licensed by the Commission to carry on their work. These restrictions were soon another complaint being made against the Commissioner, the claim being that as all buildings had to pass the Commission's inspectors any man should be entitled to build. 8 The Commission was not impressed - it retained the registration restriction protesting its determination that no half finished or faulty buildings would become part of the Canberra skyline. The Building and Services Ordinane 1924 and the regulations made thereunder operated alongside and filled in the details left out of the City Area Leases Ordinance which was basically an Ordinance relating to tenure. I

The year 1927 was an important one' for Canberra - Parliament House was due to be opened on 9 May. Here was an event for the historically minded and a date of great importance for the first-night brigade. But more was at stake. The Duke of York, then second in line of succession to the British Throne and later King George VI was to open the Parliament. The suggestion that an invitation to visit Canberra on this historic occasion should be extended to General Pershing, United States Army Commander in France (1917-1918) was greeted with stunned silence and disbelief. 9 Australians had not forgotten and for decades did not forget that the United States of America did not enter the 1914-1918 conflict until 1917. This was and remained the first thing which came to the mind of Australians when America was mentioned. Other thoughts were of how champion boxer Les Darcy and racehorse Phar Lap died in the United States. Australians of this period had a deep yet simple faith in national myths the inferiority of other races, the fighting qualities of the Digger, the establishment of a society in Australia where the principles of equality for all and a radical and unvarnished democracy flourished. They revelled in the knowledge that their forefathers had ridiculed and rejected a proposal that what was dubbed a bunyip aristocracy should be established in Australia. They sensed no inconsistency in their eager acceptance of feudal decorations and lower titles of dignity. The period was one of immense loyalty to the 'British throne. The accusing finger of the advertiser pointed out from the newspaper to declare and enquire The King's Christmas Pudding was made of Empire products - was yours?" The Prince of Wales, later to' be

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King Edward Vilifora few hectic months in 1936 and thereafter to be known as the Duke of Windsor,was well exposed. He had already visited Australia amid hysteria. But a visit by the King's second son was differentt and Canberra on 9 May, 1927 became an absolute must in the social calendar. The number of visitors expected was nearly 30,000. This of course raised one big accommodation problem. Thus it was that the temporary settlement of port able cottages at the Causeway tasted its brief but exciting hour of national eminence. The social and the titled jostled each other to obtain the private accommodation being offered there at £3 per night. In other areas of the embryonic city the tariff was higher but Canberra householders proudly announced there was no dearth of takers.' Whether it was because of the invasion of the Causeway by the socially minded or whether it was just something which would have happened anway is not clear but following close upon the re treat from the Causeway it was being condemned as a national disgrace, a blot Ion Canberra and an eyesore. Henceforth Ministers began to promise that the Causeway would be or was about to be removed. The Ministers are all gone now but the Causeway remains - oblivious of the days it was invaded by those who delighted in their acceptance and recognition as the high society of Australia. Some criticism of the Commission's land administration policies was being voiced by 1926 but by 1927 the criticism was assuming loud and clear proportions. The Commission had of course by that year become the favourite butt and whipping boy for every discontented person in Canberra - and the city was full of discontents. Valuation

One half of the discontent in Canberra has been occasioned by the high price of land said John Thomas Goodwin, retired Surveyor-General, in evidence to the Public Works Committee 1929-1930. Few would have denied a connection between Canberra discontent and rising land values which meant increased land rent and rates. But many would have allocated the causes of discontent more evenly between land values, a bitter disinclination on the part of the exiles from Melbourne to settle happily in Canberra, the real or alleged administrative blunders of the Federal Capital Commission and the leasehold system of land tenure itself. In any event, Goodwin summed up the land problem admirably when he said:-

The Commonwealth endeavoured to make cheap land available but owing to speculation the values were increased. J. T. Goodwin, member of the former Sulman Committee and one time Territory Administrator,was not a critic of the Federal Capital Commission. The many locals who were critics however constantly attacked the Commission for the rising land values which flowed from the orgy of land speculation unleashed when authority was given for the transfer of unimproved leases. Yet not one of those critics ever attacked the unleashing. The abandonment of

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one of the most basic principles of the experiment in land nationalisation as originally conceived - land would be made available to land utilisers and to land utilisers alone - passed completely unnoticed. In short, many saw and attacked the Commission for the natural effects of its action but no none attacked the action itself. There were two valuations on each block. Firstly, there was the valuation for land rent purposes. This valuation was either the upset price fixed by the Commission or the higher amount bid by the purchaser. No land could be sold below the upset price, and this valuation, whether it was the upset price or a higher amount was to be reappraised 20 years from the date of the grant of the lease and thereafter in each tenth year. Secondly, there was an annual valuation for rating purposes. To appreciate why land valuations became one of the major seeds of discontent it should be noted that the public servant tenants of Government owned houses as well as lessees under the City Area Leases Ordinance both paid land rent and rates. The public servant tenants made these payments in addition to and separately from the house rental, or, as it is for some unknown reason more often described, cottage rental. The public servant tenant's concern with land valuation was thus as great if not greater than the 99 year lessee's. The 99 year lessee had chosen to purchase a lease and expected to be charged land rent and rates. The public servant tenants had chosen nothing, least of all their new life in Canberra. The Federal Capital Commission set aside several hundred blocks for the erection of houses for public servants. The unimproved capital value of these blocks was fixed at a figure around £400 and land rent was to be payable by these tenants at 5% p.a. as though they had purchased a lease. In evidence before the 1926 Public Works Committee Chief Commissioner Butters stated that he could not say how the £400 reserve on public service blocks was arrived at but he claimed that the 1926 land sales had given to the Commission some indication of the reserve value it should obtain. Butters denied the Commission was fixing land values on the re-sales of unimproved leases which were taking place. He expressed the hope of the Commission to arrive at a fair value because it knows that an unduly inflated value would be suicidal. John Stewart Weatherston, Parliamentary Reporter, who appeared before the Joint Committee of Public Accounts (1928) in his capacity as representative of the Parliamentary officers on the Public Service (Canberra) Welfare Committee, was mostly concerned with the land valuation question. Weatherston said:I think I am voicing the belief of every transferred officer when I say that the values placed on blocks on which houses have been erected for public servants are altogether too high. It means that while they reside in the Federal Capital they will pay an annual rental for the land alone which is much more than they expected, and indeed, ought to pay.

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Weatherston considered that whilst the house rentals were higher than expected they could be justified by the Commission on a strictly business basis by reference to building costs. But in his view this argument could not be applied to the values fixed on the land on which the houses were erected. The witness continued:I understand that these (land) values were originally fixed on what is universally accepted as the only true system of ascertaining land values, sale by public auction. When blocks brought a certain price at the earlier Canberra auctions corresponding prices were fixed on neighbouring blocks reserved for occupation by public servants. The theory was solid enough but was wrongly applied, inasmuch as the blocks offered for sale were few and scattered; many of them were acquired by speculators, and others were purchased for sentimental reasons, cost being a secondary consideration. Henry Stanley Richards, Clerk, Department of Treasury, stressed the liability of the tenant for land rent. Richards told the Public Accounts Committee:In Melbourne the rent of a house includes the rental of the land on which it is erected and rates payable thereon. In Canberra many additions are made to the rent of the building itself Land rent, rates and cost of out-houses are charged as extras; £25 is added for footpaths, £20 for contingencies and £5 for planting a front hedge. Richards informed the Committee how the Commission fixed rental on its houses, observing the Commission has adopted a fine comb method by which nothing is missed. The witness complained of the difficulties of finding from official statements just how the market value - the only reasonable basis of valuation according to the Commission - was asCertained. He concluded that a general impression existed that land valuations were fixed from the result of the 1926 auction sales when prices quite unrepresentative of the true market values were obtained. Once again the claim was made that the increases in price from the 1st sale (1924) to the 3rd sale (1927) was due topequlators who purchased blocks in the hope of a quick turnover. From Melbourne, The Argus, which continued to give publicity to Canberra leases' 2 reminded its readers that bids at Canberra land auctions were based on the assumed freehold value of the blocks without improvements. The £3,000 reserve value placed on some superior residential land (Mugga Way) - the land failed to find a bidder - was seen as greater than was required in any part of Melbourne for residential land but the article on 12 April, 1927 continued: It must be remembered however that the purchaser of Melbourne freehold has to pay the stipulated capital price for the land but the Canberra leassee is responsible only for ground rent. . . it is this immunity from responsibility to pay the freehold value that, has frequently led to high bids at 105

auctions of leasehold land. This occurred when the Wonthaggi township sites were offered at auction some years ago. In that case some of the highest bidders afterwards made strong efforts to get their security converted into absolute freeholds. The Argus reference to the experience at Wonthaggi may possibly have been incomplete. Was there behind it a story similar to that at Yallourn where the miners, finding it impossible to borrow money on leasehold estates, begged for the freehold? Was this another case of financial institutions considering it absolutely absurd to advance money on leaseholds?' The effect had by the no capital outlay procedure which operated in respect to all leases granted in the days of the Federal Capital Commission on the amount bid at auction cannot be denied or ignored. Here was the golden opportunity for the person of limited means to devote all of his capital (excepting the first year's land rent) to the erection of a building on the land. And yet on the evidence the 1925 amendment to the City Area Leases Ordinance which opened the door to the removal of restrictions on the transfer of unimproved leases was much more decisive in causing the steep rise in land values - particularly with business purpose leases. For example, Block 16 of the Sydney Building site at the Civic Centre was sold, when the possibilities in land speculation were not so obvious, at the upset price of £400. A few months later when the speculation possibilities were more obvious the corresponding Block of the Melbourne Building site on the opposite side of the road (Northbourne Avenue) was sold at auction for £2,100. One of the most consistent of the valuation attacks on the Commission was that it was fixing an inflated upset price on blocks offered for sale. This is a most difficult question. In establishing a new city on broad acres it was no easy task to determine values until some sales had occurred. The Commission was able to claim that in fixing the upset values for the second sale it took figures which were much below the known resale prices of blocks of land purchased at the first sale, and yet in all cases the upset price was greatly exceeded. The purchasers carried the blocks offered from a reserve of £500 up to £5,600. From this sale the Commission obtained its justification to set an upset price of X1,000 on similar blocks. Butters requested the 1928 Public Accounts Committee to:-

consider for one moment whether it would have been quite fair to the people who bought at the 2nd sale if the upset prices at the 3rd sale had been so low. . . that purchasers at the 3rd sale could have bought exactly similar blocks at a much lower price. We would have been kicked from the opposite direction and such a practice would be an encouragement to the public to hang off every sale in the hope of easier conditions in the next... Rates The valuation problem assumed new dimensions with the Gazettal of the Rates Ordinance 1926. This Ordinance which provided for the levying of 106

rates based on the unimproved capital value of all land in the Territory repealed all previous Rates Ordinances. The unimproved capital value of land was defined in the Ordinance as the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require assuming that the improvements (if any) thereon or appertaining thereto had not been made. An equally important definition was that of owner in relation to land as including the occupier lessee tenant or holder of the land. Many of these provisions were only a continuation of what had been provided in earlier Rates Ordinances but the importance was that many hundreds of public servant tenants would now be effected. The Commission in 1927 struck a General Rate of 3d. in the £1 on the unimproved capital value of land within the City Area. The Ordinance empowered a levy of a General Rate not exceeding Sd. in the £1 in respect of lands within the City Area and not exceeding 3d. in the Cl in regard to those lands outside the City Area, on the unimproved capital value of the land. For the year 1928 the Commission struck a General Rate of 4d. in the £1 on the unimproved capital value within the City Area, and 2d. in the £1 as a Lighting Rate on land within the City Areawhere street lighting was provided. Prior to 1928 no charges had been levied in respect to water supply and sewerage but in that year the Commission levied a charge for water at the rate of 31hd. in the £1 and for sewerage at the rate of 2 1/2d. in the Cl. Theonly land affected was within the City Area and the amount payable calculated on the unimproved capital value in the same way as was adopted in regard to General and Lighting rates. The Commission's power to make charges in respect of water and sewerage was contained in Regulations made under the Building and Services Ordinance 1924-1928. The total rate being levied in 1928 was 1/- in the £1 of the unimproved capital value. A similar rate was imposed for 1929. The Federal Capital Commission was under constant and growing criticismby those who considered that the Commission was overvaluing lands both for land rent and rating purposes. The Commission's reply on the rating values was that it interpreted its mandate from Parliament as meaning that it was expected to see that a fair thing was done between the Commonwealth taxpayer resident in Canberra and the rest of the Commonwealth taxpayers. Or as Commission Secretary C. S. Daley put it:-

the rates had not been made with the object of meeting the interest and fixed charges on the capital expenditure which had necessarily been incurred to provide services ultimately for a much larger population. In striking rates the Commission had had regard to the capacity of the lessee to pay and the amounts which they would be required to pay in other towns of a similar size. 14

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The agitation was continuing regardless of its explanations and the Commission submitted its rating valuation figures to New South Wales ValuerGeneral Legge for review and comment. The Valuer-General found the Commission's figures to be too low. Such a finding only intensified the agitation and the Commission appointed a Board of Review consisting of three of the leading land valuers in Australia to report on Canberra land valuations for rating purposes and on land value matters generally.. The Board consisted of Messrs. E. J. Sievers, Ex Valuer-General of New South Wales, C. H. Crammond, Managing Director of Richardson & Wrench, Ltd., Sydney, and E. P. Arnold of Sydney Arnold, Best & Co., Melbourne. The Board met in Canberra during Odtober, 1928 and newspapers carried the reports of the evidence of some witnesses. Chairman of the Public Service (Canberra) Welfare Committee F. K. Gell maintained that for rating purposes values were placed on residential blocks as if the city was fully developed. He cited the great disparity of values between the blocks in Mugga Way and those in Forrest and Griffith - the Mugga Way values being lower. All land values in Canberra were, according to the witness, purely artificial and could not be supported by any comparable value. He referred to the land sales where speculators had bought many blocks with no intention of building and had since sold at a premium (profit) or were ho'ding them waiting for a purchaser to pay a premium. R. Welsh, a lessee from Vancouver Street, Red Hill, said that his block was valued in the original subdivision at £300. He had taken up at that price but last year the valuation had been increased by the Commission by £50 and his rates had been doubled although every other block in the same street had been forfeited or surrendered. He was one .of the unfortunate individuals who had invested money in the place. He knew at the time he did so it was a bad risk, but he did not know it was as rotten as it was.' The Board delivered its report on 8 November, 1928 when it advised that in its judgement the principles and practices generally followed with rating valuation evidenced an attempt to do substantial justice. The Board expressed a strong preference for freehold tenure in lieu of the leasehold system. It recommended a rental re-appraisal.every 50 years and remarked on the evidence of unrest, discontent and dissatisfaction in Canberra which it attributed to the unsettlement due to the change of environment and the opportunity given in such a community as .Canberra for the discussion of grievances. The Board's rating valuations amounted to £350,245 as against the Commission's £356,125 or a 1.65 reduction. It was hoped, said Chief Commissioner Butters that the public of Canberra would accept the decision. Needless to say they did not. One particular point of agitation was that the only appeal available from Commission valuations was to the Commission. The Commission therefore sought and obtained legislation establishing a Land Valuation Appeal Court able to hear and determine all rating appeals. The Chief Commissioner ex108

pressed the optimistic hope that with the hearing of the first appeals by the Land Valuation Court this troublesome question of land values may be setiled definitely. The legislation under which the Commission functioned included no guide as to the rates to be levied. It merely provided that the Commission was tobe debited with interest on all expenditure with a sinking fund to redeem the expenditure on and costs appertaining to municipal services. The Board of Review (1928) considered the question why any rates at all were imposed in Canberra and reported:We are aware that the customary practice of local governing bodies is to strike a rate commensurate with their annual requirements or commitments and if the valuations are low the rate is probably increased accordingly, but as we understand your policy, the Commission is governed in the rate struck, not by the interest bill upon capital expenditure, or upon the sum required for annual maintenance, but in the aggregate such a sum as a taxpayer, occupying property of similar value, would pay in a municipality that might be deemed comparable with the Federal Capital. In short, the sole justification for and principle behind rates in Canberra was that rates were payable in other parts of Australia and therefore they should be paid in Canberra. If the rest of Australia had Friesians and ducks the model farm would have Friesians and ducks! The Minister for Home Affairs, C. L. Abbott, came out in defence of the Commission's position in a press conference.' 6 No sensible individual said Abbott, expects to be able to live anywhere without paying forhis home rates and general municipal services and it may be accepted as a fact that the charges that have been made by the Commission are fair and reasonable not only to Australia as a whole but quite definitely to the Canberra residents, in particular. In any event, the machinery will be available for ensuring that a dissatisfied tenant can appeal to an independent authority and receive just treatment. I notice, said Abbott, that it is suggested that there has been nothing shown to the satisfaction of the community that the assessments which have been made are equitable, that they are in fact fictitious, and the result of arbitrary decision by the administrative body. As a matter of fact the basis of the assessments was approved by the Board of Review on Land Valuation consisting of three leading experts. It is also suggested that one ground of protest is that the Board of Review expressed disapproval of the procedure of the owner requiring the tenant to pay rates in contradistinction to the ordinary practice. The Board of Review did nothing of the sort. It is true that the Board said 'It is not the custom of the private owner to levy rates directly upon the tenants' and that in concluding its comment the Board made the statement 'We think it would be found simpler and less costly in administration to im-

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pose a rent covering all charges. This has been the experience of private landlords the world over in short tenancy occupations': The Commission however is in effect carrying out this recommendation, said the Minister, and will in future send a fortnightly account to its tenants. The account will include a charge for ground rental, a charge for house rental and a fortnightly charge for rates. The Land Valuation Court which opened on 24th September, 1929 to hear appeals against rating valuations assessed in 1927 and continuing in 1929 was obviously dealing with a different set of circumstances than Valuer-General Legge and the Board of Review considered. Land values throughout Australia were crashing to an all time low. The new Court, with Mr. Justice Pike of the New South Wales Land Valuation Court on the Bench, incidentally was the first Court of any kind to sit in the Territory. Prior to 1929 when offences against the law occurred in the Territory the cases were heard in Queanbeyan and any fines imposed were paid to the New South Wales Government. One member in 1928 lamented that we cannot even make a profit out of our criminals. 17 The building which was used as the Court House was originally Acton House erected in 1840 or earlier. The Conmission had spent £750 remodelling the building which was intended to serve as a Police Court for the following 5 years. Mr. G. A. Pitt who appeared as Counsel for the near 500 appellants opened by referring to the three shopping centres in Canberra - Kingston, Manuka and Civic Centre. Manuka was practically moribund. Its existence was a tragedy. The operations of speculators during the early days of Cornmission control had given land fictitious values. Numerous leaseholders had forfeited their rights rather than build and those investors who had built in the shopping areas had found it impossible to let their shops. Only two shops were at present occupied in the large Manuka Arcade and at Civic Centre over 60 per cent of the shops were vacant. The owners were willing to take any rents for their shops but tenants could not be found. The layout of Canberra was not conducive to business. The suburbs were scattered, the distances to be travelled were too great and the means of transport were too meagre. In view of these facts it was an extraordinary thing that the total rates citizens were called upon to pay were higher than in any other capital city. The Chief Lands Officer of the Commission, J. E. Brackenreg, in evidence before the Court stated that his work included land valuation and although he had no city experience in this regard prior to the fixation of the 1927 land valuations he had obtained advice on the subject from five town clerks and had based, his valuations on the information received. Since a revision of the land values in 1927 there had been no revaluation. Mr. Justice Pike pointed out that the decrease in land values since 1927 had not therefore been given effect in the rates since that date. 110

The Chief Lands Officer informed the Court that he had valued the land at Mariuka, which was being considered as a test case, at £1,000. The remaining leases in the subdivision had been valued in proportion. In reply to a question Brackenreg said he had arrived at the valuation of £1,000 by calculation. Pitt. But how did you fix it? Brackenreg. Ijust thought £1 ,000 was afair figure. It was a natter of opinion. Pitt. Then it was just a guess. Brackenreg said he could not make it any clearer how he had arrived at the decision. Questioned further he said he took into consideration the sale of 18 blocks of land sold in 1926. He could not remember whether he had originally valued the land at £1,700 and not £1,000. The Court resumed on 26 September, 1929 and during a discussion on forfeiture and surrender of leases Pitt offered his opinion that speculators in land could not lose much under the covenants and conditions of leases as they were only called upon to pay 5 per cent of the purchase price and could then wait for 12 months before being called upon to build. Mr. Justice Pike said it appeared to himthat under the covenants and conditions the lessees who forfeited were liable for the rent of their leases in perpetuity. During a general survey of the leases of residential sites it was pointed out by counsel that the general average of rates paid in Canberra was £121713 whereas the average in country towns such as Cowra, Orange, Goulbum, Katoomba and Tamworth was only £71 1 316. Mr. Justice Pike handed down his decision on 3 October, 1929 in which he substantially reduced the rating values in Canberra business centres. The reduction was from 15 to 40 per cent and in one case 80 per cent. In comparison the reductions on residential purpose leases were small. Kerbing and Guttering The year 1927 was one of extensive public servant transfers from Melbourne and the acceleration of complaints about the high cost of living in Canberra and its relationship to the leasehold tenure. In that year the first indications are given of a notable dispute between lessees and the Commission. Home Affairs Minister Marr in reply to a question informed the House that:the kerbing and guttering, for which lessees have been charged is that in front of their properties. In all cities it is the custom to charge directly or indirectly - the occupiers of land for the cost of road making services. It is difficult to perceive therefore what justification there could be for acceding to the request that the cost of kerbing and guttering should be borne by the nation instead of the lessee. ' 8

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The kerbing and guttering dispute which raged for the next two years seemed for a while to hinge on whether the Auctioneer at the first sale had made a statement that kerbing and guttering costs were included in the unimproved capital value.' The Building and Services Ordinance 1924-1924 which came into force on 10 October, 1924 empowered the Commission to make provision for the supply of water, electricity and other services and also to make regulations to prescribe the charge to be made for services supplied in pursuance of the Ordinance. Regulations were made from time to time as the services became chargeable. The regulations relating to kerbing, guttering and footpaths, the Roads and Footpaths Regulations, were gazetted on 10 November, 1927 and took effect on and from that date. Minister Howse explained the proposed charges for kerbing and guttering thus:There is no proper analogy between city area leaseholders in the Territory and leaseholders in other states. To avoid confusion the conditions in regard to services affecting City leases in the Federal Capital Territory must be compared with those relating to freehold in other States. No good purpose is therefore served by examining the question of the liability of lessees in other States of the Commonwealth for contribution to the costs of kerbing and guttering. 2° Rumours or reports began circulating around Canberra early in 1928 that the Commission did not intend to proceed with the kerbing and guttering levy from lessees. Butters flatly denied the rumours. Of course we intend to impose a levy he said. There is no reason why we should not do so. Why should the public of Australia be asked to pay for the guttering of the streets of Canberra? The roadways are being measured by the surveyors and a schedule of accounts prepared which will shortly be forwarded to the lessees.2 1 Meanwhile back in Parliament Canberra was getting the full treatment. So much so that -Minister Pearce was moved to express his regret that too much time of this Parliament has already been taken up with Canberra affairs. In fact there is a danger that the National Parliamen t may degenerate into a Parliament for Canberra22 The issue was the charge for kerbing and guttering. As Pearce saw the matter if a person purchased land anywhere in Australia he did so on the assumption that if the municipality in which the land was situated provided a footpath he would be called upon to pay his share of the cost of providing it. Why should we feed the lawyers? asked Pearce when questioned whether the Government would compensate lessees if their appeal to the High Court was unsuccessful. The general taxpayer of Australia has to pay for the kerbing and and guttering and footpaths. Having paid for them is he now to be coiled upon to pay taxes to provide kerbing and guttering for the residents of Canberra? To the interjection that the general taxpayer of Australia had freehold tenure Pearce retorted with the question Is not the tenure in Canberra equivalent to 112

freehold? The argument that a 99 year lease in the Territory was equivalent to freehold was one much favoured by Pearce. But others saw the whole kerbing and gutteting dispute in a different light. They argued that if a municipal council provided kerbing and guttering in front of their freehold property and charged them with the costs they were in the happy position that the kerbing and guttering added to the value of their prope rty and they reaped the benefit of that increased value. The position in Canberra was seen as different. The value added to the land by the provision of kerbing and guttering did not go to the lessee because as soon as a new valuation is made the lessee who has borne the costs of the work is compelled to pay an increased rental. As these opponents of the charge saw it the Commission was seeking to compel the residents of Canberra to expend money that would ultimately compel them to pay more rent.2 3 In despair, Pearce asked: Are we to make the residents of Canberra a privileged class at the expense of the rest of the Commonwealth? He informed the Senate that the Government would not undertake not to introduce legislation re-imposing liability in the event of a successful appeal to the High Court by lessees. On the contrary he said the Government will take any steps which further consideration may show to be desirable in order to prevent the true intention of the Ordinance being defeated by an argument based upon a verbal technicality. It was however a legal technicality which defeated the Government's and the Commission's intention to make this charge. (Federal Capital Commission vi Laristan Building & Investment Co. Pty. Ltd. 42. C.L.R. p.582). No more was heard of the charge until the Scullin Government took office. But in 1928 it was the Chief Commissioner who had the final word. In a press statement he deplored the constant agitations to obtain for Canberra residents free kerb and guttering, a moratorium on rents and taxes, reduced pastoral rents, free cutting of noxious weeds, reduced city rents, lower boardinghouse rates and cheaper recreation. They are giving to Canberra the name of a place where residents are always wanting something for nothing. 24 The Acre value versus Block value

The 1926 Public Works Committee which conducted an enquiry into the proposed erection of houses at Canberra was informed that the cost of the land being made available for the public service averaged about £4 or £5 an acre. George S. Knowles, Assistant Secretary, Attorney-General's Department, emphasised this point. Knowles, who gave evidence in his capacity as Chair man of the Public Service (Canberra) Committee, a body formed to watch the interests of public servants in connection with all matters relating to their transfer to and residence in Canberra, maintained that the average rent payment per acre by the public service for residential purpose leases would be about £1,200 for land that cost the Commonwealth £4. He referred to, the sale of half an acre at Manuka as a site for ja moving picture theatre which, although he estimated it only represented an expenditure by the Commonwealth of £2, apart from the public money spent in providing different services, brought a capital value of £7,000 at auction. (This meant in effect that 113

from rent at 5 per cent per annum of that capital value the Commonwealth would receive £7,000 as land rent over a period of 20 years, or, £350 per annum) Chief Commissioner Butters rejected this criticism and reminded the Public Works Committee that the many millions of pounds spent by the Commonwealth in Canberra justified a great deal of difference between the thousand acre value and the foot frontage value. The question of the thousand acre value and the foot frontage value was not however so easily settled. It continued to attract attention throughout the life of the Commission and for decades afterwards. The question was raised in Parliament in 1926 and in 1927. In reply to a question Prime Minister Bruce said:Five pounds peracre does not represent the cost of the land to the Commonwealth. In addition to the cost of the acquisition much expenditure has been incurred in connection with the subdivision of the land, the construction of the roads and the provision of services such as water supply and sewerage. 25 William Glasgow, Minister for Home and Territories, saw it thus: the lessee does not pay the capital sum but only 5-per cent on the unimproved capital value of the land. His is thus left with more capital to spend on his building and the ground rent of 5 per cent is lower than that at which he could obtain money from any source at the present time. .. the cost per acre was for land unimproved whilst the present values are for land with all services provided and values of land in towns of similar size are equally high even though they are much behind Canberra so far as services go. 26 The anti-Leasehold Campaigns The most publicised opponent to the experiment in land nationalisation during the Commission's term was Harold Edward Elliott from Victoria. Elliott of course had a ready made platform. He was a member of the Senate. But Elliott was not, however, the only opponent although his many motions or calls in the Senate for an abandonment of the leasehold system attracted the widest attention. A motion moved by Senator Elliott in 1927 that all future residential sites be sold on a freehold basis afforded William Glasgow, then Minister for Defence, an opportunity to review the whole concept of the leasehold tenure in Canberra. 27 Elliott argued that Section 9 of the Seat of Government (Administration) Act 1910 which prohibited the alienation in freehold of any Crown Land in the Territory was a provision which was introduced without debate and without any reference to the difficulties which might arise from the attempted application of this principle to modem conditions. He saw the leasehold tenure which followed on from Section 9 as a denial of a birthright, as unfair, as an infringement of liberty. In his view, the whole of the framework of the law regarding land tenure went by the board when Section 9 was passed - that the lessee had parted with his liberty, and become a slave, unable to leave his home unless he sacrificed all he had put into it. 114

Defence Minister Glasgow saw it all differently. His speech on Elliott's motion ranks in importance with those delivered by Staniforth Smith and Edmund Barton in 1901 and 1903 respectively. 28 But whereas Smith and Barton were proposing a system of leasehold tenure Glasgow was defending and justifying a system actually in being. One particular point of interest in Glasgow's speech is that whilst the revenue aspect of the leasehold system is not forgotten the town planning benefits which flow from it were receiving a new emphasis. Elliott had been strongly critical of the Commission for its refusal to grant to him a business purpose lease on the Duntroon Road. The Minister referred to this criticism and said:the adoption of a definite plan for a city, involving a zoning system as is advocated by all modem authorities upon town planning, both for practical and aesthetic reasons must necessitate restrictions on the actions of those actuated by purely commercial motives. The restrictions however are imposed in the public interest. Not surprisingly the Georgian Labor man John Grant quickly lined up in support of the non-Labor Minister. Grant said:we are told an Englishman's home is his castle, but a more mischievous statement was never made. . . Englishmen are allowed to remainin the country only if they pay their rent regularly.., where ever the freehold principle has been applied it has either driven the people off the land or forced them to pay heavy rents to the landowners. The founders of Canberra did not contemplate that land speculators would carry on their nefarious operations here. It was believed that the increment in value would belong to the people. The anti-leasehold campaigns were a vital part of Canberra history of the time but they should not be read as dominating the whole scene. For instance, in addition to the land and housing problems facing the Commission there were as 1928 opened problems of internal transport, accommodation and financial restrictions which caused the dismissal of staff and the suspension of the construction of the road to Mt. Ainslie. On the internal transport question the Commission had called tenders for a private bus service but the successful tenderer failed to perform her obligations. The Commission, with its 4 buses built to order, 29 sought to run a half hour service but almost immediately the complaints about the bus service began and soon it was being spoken of as a matter causing grave discon ten t. 3° On the accommodation problem the fact is that shortage of accommodation in Canberra dates back to 1928 and probably earlier; Home Affairs Minister Marr in reply to a question denied there was any need to cancel any regulation before a lessee could take in a boarder. 3 1 And Defence Minister Glasgow denied that there was anything in the Terriroty law which prevented

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householders from taking in boarders. On the contrary said Glasgow, the Commission was hoping some leaseholders would take boarders and thus relieve the strain on hotels and boarding houses. In the Minister's view the meaning of residential in City Area leases was very wide indeed. 32 From Melbourne The Argus reported the growth in Canberra of opposition, to the principle of leasehold. In a report dated 28 January, 1928 The Argus announced the formation of a Committee with the object of obtaining a reversion to the freehold system. The Committee appointed a deputation to put its views to the Minister for Home and Territories. The report continued:The deputation will make a request to Mr. Marr that a Select Committee of the Commonwealth Parliament be appointed to enquire into a proposal that Section 9 of the Seat of Government, (Administration) Act 1910 be amended to provide that lessees of the City Area leases who have complied with the covenants and erected buildings thereon have the right if they so elect to the freehold of the land and that in all future sales the title of land in the City Area be freehold. Business men concerned in the development of Canberra contend that there is now definite evidence that the leasehold principle is not favoured in financial circles. In many cases investors would be prepared to buy freehold for their children and develop the land with the idea that the unearned increment would go to their children at a later date. These views it is stated were expressed three years ago by the A.M.P. Society which refused to advance money on first mortgage in the Territory and has still refused to do so. One of the most interesting features about this deputation is that Chief Commissioner Butters consented to lead it to the Minister. Later this was changed to introduceit but whatever the correct term it gave to the Chief Commissioner's many Labor opponents in Parliament a new ground for attack. Butters was condemned for his colossal impudence in introducing to a Minister of the Crown a deputation which asked that freehold be granted. 33 The agitation which had begun in the Territory (then known as the Federal Capital Territory) against the leasehold tenure was soon brought to the notice of the Prime Minister. Mr. Bruce said he had no comment to make beyond saying that, at present, the Ministry did not have in contemplation any change in the system of land tenure in the Territory. 34 On 27 February, 1928 the newspapers reported that Bert Hinkler had completed his solo flight from London to his home town of Bundaberg, Queensland. They also carried reports of a large meeting of Canberra leaseholders at Civic Centre at which a deputation of 8 members were appointed

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U

to wait upon the Minister and request an abandonment of leasehold systeI The disabilities said to be caused by it -were explained to the new Ministeror Home and Territories (Neville Howse V.C.) when he received the deputation. Chief Commissioner Butters introduced the deputation 36 John Deans, Chairman of the deputation, informed the Minister that it was desired that the operation of the present leasehold system of land tenure in the Territory should be referred to a Select Committee of the Federal Parliament to allow it to determine whether the system should be varied and if so to what extent. This action would be taken in view of the present depression in Canberra, the absence of private capital for investment in leaseholds or other private enterprise, the failure of residents to purchase houses, land or buildings, the lack of voluntary influx of citizens, the approaching forfeiture of a large number of leases and the high cost of living. The Minister was quick to remind the deputation that he did not think that it had any right to say what action he should take. Howse maintained that it was for him to say whether a Select Committee should be appointed but he would nevertheless be pleased to hear any views the deputation had to place before him on the question of land tenure. Deans took the rebuke and continued:it was felt that the lack of support for Canberra from outside the Territory was due largely to the present system of land tenure and to the large decrease in population caused by the reduction of funds by the Minister. -. Civil servants and others were deterred from building homes at Canberra because of the difficulty of disposing of their property should they have to move. The Parliamentary Joint Committee of Public Accounts opened an inquiry on 23 March, 1928 into housing and building costs generally' in the Territory. As land, its costs and tenure, is a prime consideration in any building programme it was not unnatural the whole question of Canberra leases should have been examined on the occasion. Moreover the large amount of the Committee's time taken on this aspect of their more comprehensive enquiry is only an indication of the strong feelings aroused. H. S. Richards, in evidence before the Committee, questioned whether in view of the special circumstances due to leasehold tenure in the Territory, New South. Wales officers were sufficiently experienced to give satisfactory advice. The next witness, Cyril Walter Davies, a member of the legal firm of Davies and Francis practicing in Canberra in 1928 had some more fundamental, or, as he termed it, radical proposals to make. The leasehold system must be phased out. After stating that he could not understand why the time limit in regard to the completion of the building on the lease was imposed Davies claimed that the most objectionable feature of the City Area Leases Ordinance was, 117

in his opinion, that which allowed for any restriction at all on the transfer èf a lease:-

• . . if through a sale of a lease a man makes a little profit that surely is the concern of nobody but himself The Official Representative of the Public Service (Canberra) Welfare Committee, Albert Rinder Townsend, was the principal witness from the public service. Townsend opened by assuring the Committee that the public service was not as a body hostile to the spirit and purpose of Canberra or to Canberra as a national institution. He added, however, that whilst the institution and ideal of Canberra are unreservedly accepted, the administration of the

Federal Capital Commission is an entirely different matter and is by no means sacrosanct. This bought a spirited reply by the Chief Commissioner in which he mentioned that it is one of the favourite amusements ofpeople who have never had to get work done to dilate upon the bad results which are secured by those who have and an equally spirited retort Townsend in which he referred to the Commission's autocratic tendencies that suggest that the Australian psychology is not understood. Townsend began his evidence by dissobiating himself and public servants generally from the purely personal view expressed. . . by Mr. Weatherston . . . that the leasehold system should be given a fair trial of 30 to 40 years. The witness argued that the leasehold principle was so unpopular, even abhorrent to 99 per cent of Australians that it seemed certain to remain a very great deterrent indeed to the settlement in Canberra of persons other than public servants and shopkeepers.

The overwhelming,majority of the public servants, said Townsend, feel that the inherited tendencies of countless generations in favour of freehold will combine to impede the future progress of Canberra under leasehold beyond the barest advance arising from those who simply must remain in Canberra to make a living. It might not be a disadvantage if the whole of Australia were under leasehold, but the difference in tenure is against Canberra. The next witness at this 1928 enquiry was one who was to play a leading role in Canberra public life during the succeeding year or so. He was James Frederick William Watson, graduate in medicine, former editor of the Historical Records of Australia, lessee of land at Gungahlin and one of the Commission's most severe critics.

As Watson saw it the funds of the Commission were derived from five principal sources:(1) rates, (2) charges for services, (3) rents from land leased, (4) fines for breaches of by-laws and (5) moneys borrowed for general purposes. It is evident said Dr. Watson that the redemption of the capital in118

debtedness of the Commission must come from rates and rents practically, that is to say any useless expenditure will fall on the land. It was however the letter Dr. Watson read to the 1928 Public Accounts Committee which was important for it contained a proposal which amounted to an abandonment of yet another of the basic principles of Canberra's leasehold system as originally conceived. Nevertheless it won immediate endorsement (and eventual acceptance) as a remedy for a state of affairs which owed its existence almost wholly to the Commission having abandoned the first basic principle - land to land utilisers only. The letter was one Dr. Watson had sent to the Editor of the Canberra Times on 6 April, 1927. The letter was unpublished, most likely because it was only a few days before the third lease auction. The letter in part read:During the past twelve months there has been a boom in land value at Canberra, and this has been fostered by the Commission in raising the upset prices, which have been increased by 150 per cent at Civic Centre. At auction the allotments in the past have brought invariably a higher price than the upset price, and the ground rental is thereby increased. The folly of the momen tin bidding a high price is converted intoa liability for twenty years in an increased ground rental. The Federal Capital Commission are virtually in the position of trustees for the people ofAustralia. As such it should take care of the assets committed to its care but at the same time it should protect the beneficiaries,so to speak, from their own folly, and not take advantage of their weakness. And now comes the proposal— a solution to the apparently insoluble which contained an open invitation to the introduction of some of the very evils which early federal politicians sought to exclude by the establishment of a leasehold system within the Territory for the Seat of Government. Dr. Watson wrote:The remedy is simple. The principle of the City Area Leases Ordinance should be altered. The Commission should obtain expert valuations of all land to be leased. On these valuations an unalterable ground rent for twenty years on a 5 per cent basis should be detennined. The allotments could then be sold at auction for a cash premium. No one in those far off days could have realised that this proposal, when adopted, would play such an important part in the administration of the leasehold system. Not all who appeared before the 1928 Committee were however enthusiastic about Watson's proposal. John Henry Butters, Chief Commissioner of the Federal Capital Commission was one who viewed the proposal without enthusiasm. He reminded the Committee that one of the intended conditions of the leasehold system was to enable the man with limited capital to establish himself on an equal footing with the man having unlimited capital. 119

But the Chief Commissioner did not persist and he informed the Committee that the Commission was convinced that a new sales method was 6ssential. The Commission was soon advocating the cash premiums method. The word premium soon caught on and has been used ever since to describe the amount paid to obtain the grant of a lease. The word itself is not defined nor even mentioned in any legislation relating to Canberra leases. The demands of politics seem the most probable explanation for the contradiction between Dr. Watson's 1928 views on the leasehold tenure and those he expressed in 1929. In the latter year as a candidate for public office he proposed an abandonment of the leasehold system but in 1928 he declared his support for its retention. He suggested to the Committee that there should be two re-appraisals only of Canberra leases - at 33 years and 66 years. In reply to a question as to why he favoured leasehold Watson said.. . I believe that posterity will bless the present generation if it maintains the 99 years' lease, because the development of Canberra will create a fund that will assist to wipe out the national debt. A statement such as the reply given seems almost incredible when it is remembered that by that time it had become abundantly clear that the revenue from Canberra leases was not and would never become other than a steady but comparatively small income. I However, Dr. Watson had other reasons for supporting the leasehold system and in reply to further questioning he maintained that freehold would alter the whole principle upon which Canberra had been developed. It would be very difficult to impose building and maintenance restrictions on freehold property. A freeholder would resent periodical inspection of his house by an outside official, whereas under the leasehold system the improvemen t conditions are well recognised... But it was these very improvement conditions and covenants of the lease which angered the next witness, Harold Edward Elliott, the Senator who never lost an opportunity to proclaim the alleged need for freehold in Canberra and the alleged failings of the Federal Capital Commission. Much. of Elliott's evidence to this Committee was an incorporation of Hansard reports of his Senate debates with Defence Minister Glasgow and John Grant on the question of land tenure generally and Commission administration, or mal-administration,as the Senator would have called it. Elliott was, in addition to being a Senator, solicitor for the Melbourne City Council. After mentioning that he was constantly advising the Council on different matters he emphasised that the conditions in Canberra were quite unique in Australia. Nonetheless he voiced the opinion that the Commission valuers lacked experience and were unable to give any rational explanation of the basis upon which the valuations were made. To illustrate the extraordinary nature of the position I may mention I have just received a rates assessment which, notwithstanding the fact that the buildings erected by me in the Civic Centre have been idle since Christmas and 120

that there appears to be no reasonable prospect of letting them) show an advance 100 per cent on the unimproved value. When you ask what is the justification for the increase you are told that sales have since taken place at the increased prices. They disregard the fact that the people who bought at those sales have in many instances since forfeited their leases. One of the principle arguments used by Elliott against the Commission was that by its not making sufficient land available to meet the demand it was using its monopolistic land powers like agetrich quick Wallingford and engaging in a policy which was worthy of the most experienced land boomers anywhere in the world. But it was on the subject of land tenure itself that Senator Elliott was most emphatic. In his opinion no reasonable progress could be expected in Canberra until the leasehold system was abolished and a freehold system instituted in its place. He saw leasehold as likely to bring Canberra to a complete standstill. Elliott's opinion on this question was, of course, widely shared The cage for the Federal Capital Commission was put to the Committee by the Chief Commissioner. Butters mentioned what he termed the continuoUs series of references to the work of the Commission in Parliament, in the press, and in evidence before the Committee which to lay the least, have filled me with feelings of utter amazement. I have seen a continuous series of statements that owing to the Commission's inepitude, autocracy, chicanery and callousness every conceivable kind of iniquity has been perpetrated at Canberrd, large sums of money have been wasted, inefficiency has been the order of the day for' the last three and a half years, that we have done everything which we ought not to have done and have left undone all those things which we ought to have done. -. Butters reminded the Committee that in January, 1925 there was very little above ground in Canberra and that in 1928 there was a city actually in being and functioning as the Seat of Government of Australia. He claimed that the completion of the task involved the Commission in a concentration of effort and a volume of work which had probably not been equalled in the history of Australia and pointed out that in less than 2 1h years from the date of the Commission's appointment, Parliament was opened and in less than 3 years the last of 800 public servants was brought to Canberra and established in home and office. He offered the opinion that not a single member of the Committee had inspected the work which had been completed but he invited them to have a look around and try to visualise what had really been achieved since January, 1925 and make some attempt to understand that all they saw did not merely just happen. He requested the Committee members to make these inspections and then apply the resulting impression to evidence that some one had to wait for a few days for the payment of an account, that some one bought a cistern from the Commission's store which had to be replaced subsequently, or that a building should have had Marseilles tiles instead of Cordova tiles.

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Summarised, the Chief Commissioner's evidence on the land question amounted to this (a)

The Commission had carried out the law with regard to land sales and in its administration it had adopted standard practices.

(b)

The Commission was pressed on all sides to throw more land on the market although it continually maintained that further blocks were not justified and would eventually be a drug on the market.

(c)

When the Commission did make additional blocks available it placed on them upset values very considerably below the prices realised at the previous sale and those upsets were exceeded by from two or three and a half times.

(d)

The Commission having studied the whole situation had determined to advise. a change in method in connection with future sales of business blocks which would to some extent protect irresponsible members of the general public against themselves.

At the time of the Public Accounts Committee enquiry in 1928 there were over 500 public servants living in Commission built houses as monthly tenants. Only 10 public servants had availed themselves of the Commission's rental purchase scheme and a further 11 public servants had taken up residential leases, built on them and were residing there. Butters was aware of this great reluctance to settle in Canberra when he denied the Commission was responsible for the atmosphere of depression and discontent in Canberra. The atmosphere, Butters contended, was an artificial one,created by the agitations which had developed - agitation against leasehold tenure, agitation for reduced house rents and reduced land rents by public servants and others, press and parliamentary exaggeration of minor detail and perhaps most of all agitation against the Commission itself. In the House of Representatives Texas Green (Lab. W.A.) was condemning the exaggeratedly high upset prices placed on land in Canberra, maintaining that speculators had boosted land values with the idea of making large profits out of the re-sale of unimproved leases,, 3 whilst Dr. Maloney was applauding the cash premium payment as the proper solution to land values. 38 Meanwhile John Grant had died and in the Senate H. E. Elliott was continuing his attack on leasehold contending that the high prices paid for land and consequent high rentals are killing business in Canberra.39 Elliott's motion on this occasion would have vested power in the Commission to grant freehold titles. It did not obtain wide support but the idea of the cash premium payment as a means of establishing Canberra land values was hailed as the real answer, most speakers claiming that solid values for land would be established if cash was demanded. Matthew Reid (Qld. Non-Lab.) condemned the premium idea and criticised the Commission for taking it up:122

the Commission does not understand the leasehold system... it is trying to superimpose upon it conditions which properly relate only to the freehold system. This is the cause of much alarm and discontent among the resident& I have always maintained that land values in Canberra are too high In connection with the disposal of land in Canberra I favour a system under which a value is being placed on each block and all applications for it go to a ballot... Thomas: And let the man who was successful in the ballot dispose of land at profit! Reid: No. Build or else! 40 But Reid was too late. The damage had been done and the Canberra leasehold system was due for a fundamental change. The Federal Capital Commission is a landmark in Australian history. Few can study the Commission and the social, political and economic concepts of its time without realising that the transfer to Canberra in 1927 was its true claim to fame. Without the Commission the transfer would most certainly have been delayed, probably until about 1950. And yet the Commission's greatest failing was on the matter of land administration. In the long series of faulty , enactments and administrative blunders recorded in the annals of Australian land history to that time none was more foolish than the Commission's opening of the gate to land speculators. It ignored the experiences of previous generations. But was the Commission alone to blame? A Parliament which loaded the Commission with past debts, expected it to erect a city and continually sniped at it and spoke as though it should show an immediate favourable balance sheet must surely share the blame. Miscellaneous agitations One feature of life in Canberra during the term of the Federal Capital Commission was the multitude of Committees, Leagues and Associations which flourished. The objectives of these bodies were often somewhat similar and almost all of themwere likely to change theirnames or disappear overnight. The Australian Natives Association Representation League was continually mounting a vigorous campaign to achieve the rights of representation for the Territory residents and League President C. Francis began to talk of the need to refuse to pay taxes.4 1 The League's aim was to obtain direct representation on the Federal Capital Commission as well as Parliamentary representation. Another League, the Federal Capital Licence League, was campaigning hard for a referendum on the liquor sales prohibition and making great use of the information that 76,000 doz'en empties representing a few months consumption of beer and spirits were collected in Canberra in 1926 .42 King O'Malley, Minister for Home Affairs in the early construction camp period, considered the slow progress being made in building the capital was_ 123

due to the effects of stagger juice. He therefore secured an Ordinance prohibiting the sale of liquor in the Territory. But the Licence League had opposition . . . a No-Licence League had been formed to promote the case for keeping the Territory a place where intoxicating liquor could not be sold. This latter League was charged with sponsorship by publicans in the nearby New South Wales town of Queanbeyan. The opposition to the referendum proposal was not, however, confined to Canberra. The Canberra Times on 14 October, 1926 reported a prominent temperance leader as saying the experiment of no liquor sales in Canberra should be continued but if a referendum is ever sought it should be by the people of Australia and not merely by those who lived in Canberra. And yet another League was busy . . . The Federal Capital Citizens League. This one was calling for a moratorium on all charges on city leases for one year. 43 The Federal Capital Commission from 1927 onwards was being condemned for allocating suburbs to various public servants according to salary and status. Let us put an end to the creation of class distinctions at Canberra, pleaded William Maloney (Lab. Vic.). 44 The time is not far distant when in Canberra there will be in operation a caste system worse than that of India, protested former Labor man Matthew Reid .45 The Sydney Morning Herald of 8 February, 1928 carried a report that Victorian Minister of Forests W. Beckett had declared that the Federal Capital was a hideous waste of public money, a hotbed of class consciousness and snobbery and had been planned in a nightmare. Prime Minister Bruce delcared this statement to be so unbalanced he was not prepared to take any notice of it. But others did notice and years later similar judgements were still being made on the alleged snobbishness or aloofness of Canberra people. 46 A gathering of self opinionated snobs was a fairly common conclusion. Sociologists considered the middle class pretensions and career and social aspirations of public servants would ensure the continuance of snobbery and the absence of any genuine radicalism in local political action or thinking. When considering the hostility to Canberra it should always be noted that it came from all around Australia. Chief Commissioner Butters lamented what he described a let us curse Canberra general feeling throughout Australia. 4 7 Whilst Dr. Maloney from Melbourne was calling on Parliament to abandon Canberra as a mistake and move to Albury, or even to Sydney, V.C. Thompson from the New England area of New South Wales was urging the Government to suspend all expenditure at this federal city. . . this sink for people's money. 48 The eighth day of August, 1928 was a red letter day in the story of Canberra. On that day it was announced that the Commonwealth Government,. which had listened to arguments that it should hasten the transfer of Parliament to Canberra, establish the seat of Government in fact as well as in law, and thus save office rentals in Melbourne, announced that it proposed 124

taking a sub-lease of large areas of office space in Canberra for Departmental Stabilising conditions are coming to Canberra declared the Sydney Morning Herald without apparently noting the contradiction and the birth of a practice which must now rank as a national scandal. staff.

Self Government The Seat of Government (Administration) Act 1928 was the beginning of the end for the Federal Capital Commission. The Government sought to extend the life of the Commission for 5 years but the feeling amongst members of the House of Representatives of all parties had grown so strongly antiCommission that the Government was forced to abandon the attempt and the Act as passed limited its life to 1 year with the term of office of all Commissioners to end in November, 1929. In addition, provision was made for the election of one Commissioner for the remaining year of the Commission's life. Voting rights were to be confined to ratepaying lessees. The provision in the Act for the election of the Third Commissioner was some measure of success for those Territory residents who had long been protesting against their disenfranchisement and agitating for a form of local government. In 1928, the one elected Commissioner was about as far as Parliament was willing to go to meet these àemands. Perhaps the general attitude of members was expressed by John G. Duncan-Hughes (Non-Lab. S.A.) when he said:Canberra will be the National Capital for all time - we cannot entrust the building of such a city to a municipal council elected from amongst the comparatively few residents who happen to be here at the present moment. As an interim measure Home and Territories Minister Abbott announced the formation of a Consultative Committee made up of himself, the Chief Commissioner and Home and Territories Department Secretary P. E. Deane to hear and deal with complaints concerning affairs at Canberra. This Committee seems to have faded away in February, 1929 without having been more than a place for the many agitating Associations, Leagues and Committees to take their complaints. The City Area Lessees Association which had become moribund sometime in 1928 reformed itself and sent a deputation to the Consultative Committee to present a case on rates and rents. In addition, a well attended protest meeting of the Public Service Welfare Committee appointed a deputation comprising Messrs. Smalihom, Weatherston and Wilkinson to protest to the Committee about rates. 5 0 Rates had been struck at the end of 1928 and residents were given 90 days to pay while rates for 1929 had been added to fortnightly rentals thus making the two imposts payable together. Meanwhile the Sydney Morning Herald of 21 January, 1929 was reDr. Watson, a candidate for the office of Third Commissioner, favoured leasehold only for such time as may be necessary to prevent speculation. When that time porting firework. in the election campaign along the Molonglo.

125

arrives he is in favour of the lessees being granted the right to convert into freehold with all future sales to be made on a freehold basis. In this campaign Dr. Watson criticised Prime Minister Bruce, firstly for appointing the Commission, and secondly for having given charge of the Territory to 4 Ministers in 6 years. Dr. Watson promised that if elected he would oppose all Commissioners but his principal object was to abolish the Commission and secure the appointment of a Legislative Council with two nominee members to represent the interest of Australian taxpayers, two executive officers to carry out the will of the council and three representatives to represent the interests of the local residents. Canberra carrier and businessman J. S. Crapp campaigned on a programme of better housing for workmen and a promise to have the Molonglo settlement abolished while practicing physician R. M. Alcorn waged a campaign on the so called administration of the Commission. The former SurveyorGeneral, J. T. Goodwin, who had earlier been in charge of construction work at Canberra handicapped his candidature by explaining to an unbelieving electorate that he was not antagonistic to the Commission. The Argus reported a general disinclination among Canberra ratepayers to take this election seriously because, before November, the system of administration had to be reviewed and it was considered unlikely tiat the Commission would be retained in its present form, or, for that matter, in any form. The newspaper report was however not exactly borne out by the number who voted at the election held on 2 February. 1929 - 960 voters out of 1096 or an 87 per cent poll. The result of the primary count was:Alcorn 324. Watson 268 Crapp 195 164 Goodwin and the result after distribution of preferences was: Watson Alcorn

507 444

Dr. Watson was therefore declared elected as Third Commissioner to hold office until 2 November, 1929 when the term of appointment of the other Commissioners was to expire. Meanwhile Cnberra was receiving other publicity. A special correspondent of the Sydney Morning Herald wrote on 6 February, 1929:The atmosphere of Canberra is insidious. It eats into the determined hatred of its opponents and at every corner one stumbles upon people in the throes of a touching reunion. Brothers in exile! If one paused to eavesdrop no doubt one would hear them saying to one another the very same thing that 126

Crusoe said when he met his man Friday. No ship wrecked sailor ever felt worse for having a companion in distress. Newcomers to the capital gaze, wondering at the sights and the fewness them and listen credulously to the oldest inhabitants discourse on the of prodigality, waste and extravagance of the Commission and the futility of all forms of Government save a dictatorship by the oldest inhabitant. And after Parliament was opened the persistent advocate of freehold, Senator Elliott, returned to his argument that a different system of land tenure was absolutely essential to foster any progress at Canberra, the developmental works then being very largely at a standstill. On this occasion Elliott did receive some encouragement. Senator H. S. Foil, Government Whip in the Senate, expressed the view that when the developmental stage has been passed land tenure in Canberra would be changed from leasehold to freehold. The Whip's views were undoubtedly personal as there is nothing in the statements of Prime Minister Bruce or any of his Ministers during or after their term of office to support a belief that they or any one of them ever considered Canberra's leasehold tenure was other than a permanent programme. Outside Parliament trouble was brewing. The trouble was the nature and extent of the powers of the elected Commissioners, Dr. Watson. Jam not seeking additional power said Watson who challenged Bruce to decide whether the claim in the Prime Minister's policy speech that the residents of the Federal Capital Territory had been given representation is to be defeated by the actions of his appointee, Butters. 4 Watson claimed that former Home and Territories Minister Howse had promised thatthe elected Commissioner would be given access to all papers but the Chief Commissioner had decided that all information must pass through him and the fact that I must state in my application for information whether Jam prepared to treat it confidentially implies he won't give it tome without such undertaking. The meetings of the Federal Capital Commission were now being described as heated and The Argus of 13 March, 1929 was moved to question whether: The Ministry may have to consider whether it has not made a mistake in trying to mix incongruous elements . . . it is damaging to the Federal Capital Commission prestige both among citizens and its own employees for its proceedings to be marked by unnecessary quarrels between its members in public. The heated meeting gave way to the stormy meeting and at a particularly stormy one on 19 March, 1929 Dr. Watson resigned. Minister Abbott spoke of revolution only to be informed by Watson that only an advocate of stagnation would regard my action as revolutionary. 127

The candidates to fill the vacancy soon declared themselves: Dr. Watson had lodged his protest and decided to try again. Other candidates were Dr. R. M. Alcorn, Mr. J. T. Goodwin and yet another medical man, Dr. L. W. Nott. The'Chief Commissioner offered the free use of the Albert Hall to all 4 candidates. Dr. Watson objected and forwarded a cheque for £1.1.0. Butters returned the cheque to Watson with a curt note that when he owed the Commission money he would send him a bill. A day or so before the election Dr. Watson inserted an advertisement in a newspaper attacking Dr. Nott as a Government nominee. Minister Abbott issued a denial and promised to refer this childish nonsense to the Attorney-

General. The result of the primary count at this election held on 18 March, 1929 was Watson Alcorn Nott Goodwin

395 291 165 104

After preferences were distributed the figures were Alcorn 479 Watson 476 Dr. Alcom's victory did not spell the end of the local hostility to the Commission. In fact a Melbourne newspaper said of Alcorn that his publicly expressed animosity towards Chief Commissioner Butters leaves the tirades of Dr. Watson limping in the rear.5 1 In any event his campaign was a call for total war on the Commission. At the poll declaration he declared his policy

to be one of no surrender to the autocratic and undemocratic methods of Government in this place. . . not 5 per cent of the population are satisfied with the present system. My purpose is to strive for proper civic status for Canberra and for rights of the people to have that effective voice in their own affairs which they have been denied in the past. The story of Dr. Alcorn and the Commission is only a repeat of the Dr. Watson experience but this time the resignation was not accepted. Speaking on the experiences of this period Opposition Leader Latham said.. . we tried

to give local residents a say but it seems they wanted all the say. It is difficult to say what they wanted. Canberra is a national city and it cannot be entirely governed by its residents. .12 Alcorn remained with the Commission until its abolition early in 1930. Chief Commissioner Butters had resigned in September, 1929. The anti-Canberra campaign around Australia livened up again in 1929. Prime Minister Bruce refused to spend more money on Canberra, most probably because he had none. A deputation of Canberra people had waited 128

on him on 30 August, 1929. In Hobart, the Chamber of Commerce called upon the Government to close Canberra for 100 years at the end of which period the Commonwealth might be able to maintain such a capital and the administration necessary for it.' The Bruce-Page Government was defeated at the elections held on 12 October, 1929 and a Labor Government took office. The Commission's term was drawing to a close. NOTES ON CHAPTER 6 1.

Sydney Morning Herald 17 April, 1930 - statement by Bishop Bergmann.

2.

P.D. 121:889

3.

The Argus 26 April, 1928 - statement by J. McCallum Smith M.L.A. (W.A.)

4.

P.D. 119:6974

5.

Public Accounts Committee 1928

- evidence by J. A. McDowell, Industrial

Officer Federal Capital Commission. 6.

Public Works Committee 1926 - evidence by Butters.

7.

The Argus, 13 December, 1924.

8.

Sydney Morning Herald, 16 April, 1926.

9.

The Argus, 17 February, 1926.

10.

The Canberra Times, 31 December, 1926.

11.

Sydney Morning Herald, 3 May, .1927.

12.

The Argus, 9 August, 28 October, 1926. 11 April, 12 April, 28 January, 2 February, 1 March and 29 March, 1928.

13.

P.D. 116:500

14.

Sydney Morning Herald, 1 October, 1928.

15.

The Argus, 5 November, 1928.

16.

Sydney Morning Herald, 4 January, 1929.

17.

P.D. 119:6702

18.

P.D. 117:2157

19.

P.D. 118:3981

20.

P.D. 118:4123

21.

The Argus, 23 February, 1928.

22.

P.D. 119:6340

23.

P.D. 119:6581

24.

The Argus, 8 August,. 19 28.

25.

P.D. 115:256

26.

P.D. 117:1839

27.

P.D. 116:496; 117:1839 .

.

129

28.

P.D. 2:1785; 17:5281

29.

The Argus, 13 January, 1928.

30.

Op cit, 28 March, 1928.

31.

P.D. 116:544

32.

P.D. 115:257

33. 34.

P.D. 119:6938 The Argus, 2 February, 1928.

35. 36.

Op cit. 27 February, 1928. Op cit. 1 March, 1928.

37.

P.D. 119:6904

38, 39.

P.D. 119:6907

40. 41.

P.D. 119:6976 Sydney MorningHerald, 29 May, 1928.

42.

Op cit. 6 August, 1928.

P.D. 119:6970

43.

Op cit. 16 July, 1928.

44.

P.D. 115:622

45.

P.D. 115:819 The Canberra Times, 15 May, 1936.

46. 47.

The Argus, 27 February, 1928.

48.

P.D. 122:209

49.

P.D. 120:121

50.

TheArgus, 25 January, 1929. Wigmore, L., The Long View, Melbourne, Cheshire, 1963.

51.

52. 53.

P.D. 122:169 TheArgus, 19 September, 1929.

CHAPTER 8 THE YEARS OF CRISIS 1950-1970

The administration of public lands in a new country was, in Lord Durham's words, an operation of Government which has a paramount influence over the happiness of individuals and the progress of society towards wealth and greatness . . . upon the manner in which this business is conducted, it may be said that everything else depends. The Territory for the Seat of Government of the Commonwealth of Australia is an excellent illustration of the accuracy and practical working of this observation. The Commonwealth owns all ?he land within the City Area and a large percentage of the land outside the area. Hence it is that the Government has exercised and can exercise a very profound influence over almost every aspect of the economic, and social development of the Territory. This was envisaged by the early Parliaments. Many members spoke of or hinted at a connection or relationship between the experiment in land nationalisation which was being proposed for the federal territory and the quality of life within that area. The far sighted Labor Leader Gregor McGregor (S.A.) granted this relationship but he visualised other possibilities. To McGregor the central pivot of the whole leasehold system was administration. In his view, competent administration would point the way to further beneficial reforms. In 1902, when urging Parliament to obtain as large an area as possible for the federal territory he said:Only fancy what could be done in a federal territory if we had the right men representing the Commonwealth. Look at the lessons which could be taught in connection with land tenure... 2 McGregor's school of Departmental administrators never materialised. He died in 1914. Indeed, his whole vision of lands administration in the federal area stands in stark contrast to the notices presently issued inviting applications for appointment to relatively senior positions within the Lands Administration Branch of the Department of the Interior. These Gazette notices invariably list experience in investigation, analysis and report writing as essential qualifications, and then, as if in an unimportant afterthought, they add some knowledge of A. C T land tenure an advantage or, if the, position is one in which the applicant will be required to recommend amendments to 149

the legislation they add knowledge of relevant legislation desirable. Interior's many land administration critics seize upon these notices, some contending the day may yet dawn when the Canberra Hospital invites applications for appointment as the Hospital Surgeon and adds that some knowledge of medicine is desirable or would be an advantage! The basic theme of this Chapter is not surprisingly one of a crisis in lands administration. The Federal Capital Commission in its comparatively short span of active building operations had erected about 1000 houses for rental and during the period 1930-1945 a further 1400 houses for rental were built by the Government. Of course private enterprise was never completely absent but by 1950 at least 80 per cent of the houses in Canberra were Government built houses. The refusal of the established financial institutions, eg banks, insurance companies etc., to accept Canberra leases as security continued more or less over the years but as the Commonwealth had instituted its own housing loan scheme this was not the only nor the most important explanation of why private enterprise would not build houses for sale. The simple fact is that in the pre-war years it hardly occurred to the average family man in Canberra to build or buy a house for himself any more than (say) a British officer serving in the Indian Army would have thought of building a family residence in India. Most did not feel that they had come to the place to really settle and to rent a Government (or service) dwelling seemed the only thing to do. The immediate post-war years brought with them a change in the whole concept of government in Australia. In the pre-war years the Government, then known as the Federal Government, was viewed by the Australian public as something remote and no more important to them than their respective State Governments. In fact, they probably regarded it as being much less important. The war years undermined this attitude. The mobilisation for war, the Australia-wide war organisation of industry, manpower controls, rationing and the uniform tax legislation all operated to bring the Government, now known as the Commonwealth Government, much closer to the Australian public and its new or expanded activities in almost all fields of social acitvity kept it there in the post-war years. The Commonwealth Government had now assumed a new and ever increasing importance in the minds of the Australian people. The States and the State Governments remain - Australia has a surplus of the flotsam of constitutional history - and although occasionally they are given to preening themselves as sovereign entities, they are in reality reduced to pleading with the Commonwealth Government for hand-outs to perform the vital social functions that men long since in their graves decreed they should perform. The increased role being played by the Commonwealth Government brought with it a changing public attitude to the concept of Canberra. No longer was it being condemned as a white elephant or proclaimed a mistake or a failure. No longer were motions being moved calling for its abandonment. 150

This wider acceptance of Canberra was not of course accompanied by any demand for increased expenditure on its development. Nonetheless an awareness or a recognition of the permanence of Canberra was emerging. Those who came to Canberra in the post-war years did so with a completely different outlook from the earlier generation of pioneers. To begin with they most probably associated the word Dalgety with a firm of wool brokers but above all else they did not conceive of their life in Canberra as a banishment from civilisation. They came with a feeling that they would be settling and the idea of buying or building a house situated on leased land therefore seemed much less unreal to them than to the earlier generation. Throughout the 1939-1945 war there was a critical shortage of accommodation of every description in Canberra. Private building had been stopped and the Government was only able to build a few hundred houses to meet pressing needs. The Department of Interior had adopted a waiting list and allocated houses, as they became vacant in order of registration, modified by a priority system. The Territory population at the 1938 census was 11,652 and at the 1947 census 16,905. The number on the housing list in 1941 was 401 and in 1947 it was 1445. The years 1946-1948 saw a marked increase in housing construction in Canberra. Plans were being made for the transfer of more Departments and work began on providing housing and accommodation for the building and allied trades work force already engaged or expected to be engaged in the accelerated building programme. Workmen's hostels, monocrete type houses and houses of a steel-framed, partially prefabricated type known as c/Cmounrables were erected during this period. In addition, two storied timber buildings resembling woolsheds were erected at Barton as temporary Departmental offices. To what extent some of these 1948 plans actually went beyond mere proposals may be debatable but in any event no Departments were transferred to Canberra at that time. The shortage of skilled tradesmen and building materials in the more immediate post-war years is part of the explanation for the failure, although no doubt Government priorities and the lack of any unified direction among the Departments concerned with Canberra's construction also contributed. Whilst the most obvious lesson to be learned from the 1948 failure was that a stop-go approach to house building in Canberra would neither attract nor hold the tradesmen necessary for any big building programme, the learning was somewhat tardy. Ten years after the 1948 failure the stop-go approach was still causing bitter local criticism. The Australian Capital Territory Representation Acts 1948 and 1949 provided for the election to the House of Representatives of a representative of the Territory, the member to have voting rights only on motions to disallow Ordinances of the Capital Territory. This absurd restriction on voting rights was an adoption of that part of the Northern Territory Representation Act 1922 which dealt with the voting rights of the member for that Territory. The first member for the ACT., Dr. L.W. Nott (Ind.). 151

who won the seat at the 1949 elections, was defeated at the 1951 elections. The successful candidate, J.R. Fraser (Labor), held the seat until his death in 1970. The growth of Commonwealth Government activities in the 1940-1960 period and the gradual centralisation of the public service in Canberra meant an increasing population and an increasing housing demand. The Government's failure to satisfy that demand either in quantity or quality was the cause of a new but slow development in the story of Canberra leases. Those suffering from the housing shortage - the waiting list for Government built houses for rental was usually at least 2 years - and those who considered for one reason or another that Government built houses were insufficient for them began to buy blocks of land in spite of the leasehold tenure and engage building contractors to build. Additionally, speculative building, contractors began to buy blocks and build houses confident in the knowledge that a ready market was available. This development, which was well established by 1960, was gradual and yet obvious. Unfortunately for the Canberra leasehold system the historical and most importantly the administrative significance of this development was passing unnoticed. It was of course too forced an event to be called a conversion to the principles of leasehold tenure but nonetheless it was a real acceptance. Whereas tht earlier generation had viewed the leasehold system firstly with distaste and hostility and then, without accepting it, with indifference, the post-war population in Canberra saw it differently. The new generation, certainly more affluent and probably younger than the earlier one, began accepting leasehold without question. Henceforth the demands for freehold which over the years had grown progressively weaker gave way to loud and clear demands that the leasehold system should be administered with more foresight and less attention to immediate cash return. Between August, 1937 and March, 1950 the Commonwealth offered 550 residential purpose leases by inviting applications from the public at large. The Minister fixed and advertised a reserve value for each block, the only and yet important significance of which was that the land rent of 5 per cent per annum was payable on this reserve. The successful applicant who offered an amount over and above the reserve was required to pay this extra or premium in cash before the lease was granted. The measure of demand for and supply of residential leases in those years is well illustrated by the total premiums paid: Nil 1935 - 1945 1946 $204 1947 $142 $ 80 1948 1949 $1279 1950 $346 The strong protests about premiums which began later may be better understood if it be emphasised at this stage that the vast majority of residential 152

leases-granted up to 1950 were granted at the Minister's reserve value. This meant in effect that the only payment made by the lessee at the time of tile grant was the first year's land rent and a $4 survey fee. Those who offered or paid amounts over and beyond the Minister's reserve were regarded by many as being a trifle eccentric. The offering or payment of these premiums was not of course the public event that the premiums bid at later auctions became. Many therefore would not have even been aware that premiums were being paid. During the 1937-1950 period the number of applications actually received in response to public advertisements was very small indeed. Leases for which no application was received were not withdrawn from offer but rather they became available for selection over the counter. These were the golden years of the Canberra leasehold system - the supply of leases exceeded the demand for them. Those who proclaimed the leasehold system hailed the no capital outlay aspect as being the prime virtue or most admirable feature of the system so far as the ordinary or average citizen was concerned. The continued existence of this characteristic was of course no longer guaranteed but during the 1937-1950 period (and sometimes even later) the system operated as though it was. Nonetheless the no capital outlay feature was finished, its apparent and occasional survival depending to a very large degree on supply and demand. When the demand completely outstripped the supply this aspect of the Canberra leasehold sytem was soon buried in the administrative confusion which followed. The growing demand for residential leases would probably have finished the over-the-counter method of lease disposal sooner or later. But the public complaints hastened its phasing out. In the Advisory Council complaints were being voiced at the alleged practice of reserving blocks for people who had left Canberra secure in the knowledge that a block of their choosing was available for them if and when they chose to return. The Advisory Council at its meeting in February, 1950 recommended to the Minister that in the future all residential blocks should be submitted for sale at public auction. Soon after his election to Parliament as the member for the Territory, Dr. Nott began to urge the Minister to substitute a system of auctions in lieu of the present system of rendering "key money "above the upset value of properties. 3 This 1950 campaign met with more approval than the earlier campaigns concerning various aspects of the leasehold system and what became known as the 4th auction was held on 14 July, 1951 when 51 particularly choice sites were offered for sale. The public auction method of allocating leases had begun again. To understand the first and subsequent auctions held during the 1950'sand the general operation or administration of the Canberra leasehold system in that decade several practices should be noted. Firstly, bidding at auction during the 1950s commenced at the Minister's reserve value e.g., if the Minister fixed a $1000 reserve value for a particular block the lowest first bid accepted for that block was $1000. The purchaser however only paid the difference (if any) between the Minister's reserve and 153

his successful bid. This difference or premium could be only , $1 but the newspaper reports of these sales could very well be read by the unknowledgeable reader to mean that the purchaser paid his $1001 bid. The real position of course was that the purchaser paid at auction the $1 premium, the survey fee and the first year's land rent e.g. $50 or 5% of the Minister's reserve value. It should be borne in mind that since 1935 the Minister's reserve value has been the amount payable over a period of 20 years by the lessee to the Commonwealth as land rent. This value is re-appraised in the 20th year and in each subsequent 20th year of the 99 year lease. In 1962 the above bidding or sale practice was changed. The Minister's reserve value was advertised before sale (as it had been previously) but bidding at auction now commenced at zero or $1, or, as it was in that year, 10/(ten shillings). Not unnaturally sales reports emphasised the amount of the successful bid. For residential purpose leases the actual amount of this bid or premium has been and will be largely dictated by supply and demand. However, at almost every other auction in the later 1960s a lease or two has been obtained for a nominal premium in spite of the demand exceeding the supply - sometimes with a premium as low as $1. This event may happen late on a day of a 2 or 3 day auction by which time those who consider their demand urgent have happily or otherwise paid a $4000 or higher premium for ,a lease and gone. Or it may happen at a time many prospective purchasers, noticing the high premiums being paid, realise the inadequacy of their financial resources and retire in disgust and disillusionment. Or it may result from some real or alleged defective feature in the block which would increase building costs. To identify the reasons for this departure from the normal is not always easy. It is however quite easy to predict the reaction to the appearance of the black sheep. Outside Canberra anguished outcries about land being given away for nothing come through loud and clear - inside Canberra confused embarrassment takes over and administrative explanations about what has really happened are almost a public confession of failure. The original concept of the Canberra leasehold system - no capital outlay to obtain a lease - is either ignored or unknown, probably the latter. The torch has passed into other hands. The 1962 bidding method change did not of course alter the relative position of purchasers who purchased blocks carrying the same reserve value. Assuming two blocks carried a reserve value of $1000 the pre-1962 purchaser who obtained a lease over one block with a $1001 bid was in exactly the same position as the post-1962 purchaser whO obtained a lease over the other block with a $1 bid. At auction both of these purchasers would have paid the survey fee, the $1 premium and the same amount as the first year's land rent. The 1962 change came about, according to most critics, because the Commonwealth decided that its payment of the auctioneer's commission on 154

the amount bid was unwarranted. This had in effect meant that commission was actually being paid on the reserve value e.g. the figure at which bidding commenced. The official or Departmental explanation was that the change was necessary to rationalise the system and avoid confusion. Another administrative practice, particularly during the 1940s and early 1950s, must be noted. The lessee's covenant to build was not during those years enforced rigorously, if at all. This was not due to administrative laxity. Rather it must be seen in the background of those years. The war and the acute shortage in building materials for some years after the war plus the difficulty of obtaining the services of skilled tradesmen contributed to and caused this failure to enforce compliance with the lessee's covenant to build. From about 1955 onwards however this state of affairs ended - lessees were warned to build or suffer the determination of their leases. (The phrase determine the lease is a legal term meaning the lease is brought to an end.) Another factor which warrants mention at this stage is the official attitude to land speculation. The speculator's charter or entree card section 16 (3) of the City Area Leases Ordinance 1925 - has continued in one form of words or another in all subsequent Ordinances. However, in the years when the supply of leases exceeded the demand the speculator's lot was a lonely one. There were no mugs available to buy from him. When the demand began to exceed supply in the 1950s the situation changed. But it was not until 1959 that a decision was made that consent to the transfer of unimproved leases would no longer be given. This decision was accompanied by an amendment to the Ordinance providing for the refund in certain cases of the premium paid for a lease which was surrendered. The decision and amendment were of course 34 years overdue. Land speculators e.g. buyers and sellers of unimproved leases did operate in Canberra during the 1950s but it is not proposed to deal with their activity at any length. The rising land values in that decade were not the result of their rather limited activities. The 51 choice residential sites and the 18 business sites offered at the 1951 sale were all sold. In later years bitter complaints were made about the alleged abuse of the term choice sites, the charge being made that it was Departmental jargon used to describe almost every other block for which a high premium was being paid. The 18 business sites - the shopping centres at O'Connor, Griffith and Ainslie - sold for a total premium of £57,700 whilst for the 125 residential purpose leases granted in 1951 an average premium of $304 was paid. During the years 1951-1958 the Commonwealth granted 1290 residential purpose leases at an average premium of $232. The emergence of the premium payment as an essential pre-requisite for a lease under the City Area Leases Ordinance • should not obscure or be confused with the land rent revenue the Commonwealth was receiving. The total land rent and premium revenue received in the financial years 195 1-1958 in respect of leases granted under the City Area Leases Ordinance and other Ordinances was as follows':155

YEAR

1951 1952 1953 1954 1955 1956 1957 1958

TOTAL PREMIUM Residential Leases Business Leases

LAND RENT

$

$

ci

37,940

28,850

27,134 32,200 17,300 24,200 43,760 112,730

104,860 6,140 65,595 75,800 14,200

106,429 155,664 182,076 220,162 176,302 231,940 293,501 448,633

The number of leases under other Ordinances - mostly rural leases under the Leases Ordinance - are continually diminishing proportionately to the number held under the City Area Leases Ordinance. The lessened land rent in the 1954-1955 financial year - the land rent figures being for the financial years - may possibly have been the result of a withdrawal of some land leased under the Leases Ordinance prior to its allocation under the City Area Leases Ordinance. In any event, lands rent was very clearly the main land revenue in the years under consideration, premium payments being rather uncertain. This position however was to change dramatically within a year or so. Before noting that change and identifying its causes the raison d'etre of the premium must be examined or re-examined. To begin with, it will be recalled that the Canberra leasehold system as originally conceived and launched provided for no capital outlay in respect of the grant of a lease. The land rent was paid on the amount bid at auction, the lowest first bid acceptable being the Minister's upset price. The purchaser was said to be establishing the value. In a somewhat misleading publication on Canberra leases recently issued by the Department of the Interior the statement is made that the premium payment was instituted because some bidders tended to take little account of the continuing land rent and consequently offered high prices. Such a conclusion is not entirely without support. Many considered the premium payment system would dampen some of the unthinking enthusiasm which so often prevails at auction and consequently reduce bids. Others saw the provision that land rent should be paid on the Minister's upset price and not on the amount bid as a way to remove accusations that the Government was accepting rent on fictitious land values far above the Government's own value. And yet the Interior statement on its own misleads more than it informs. It ignores the influence speculation with business leases had on the amount bid and it ignores the fact that very few (if any) of the residential leases offered in the 1920s were the subject of excess bidding. The simple truth is that when the door was opened for the speculators the prices bid for 156

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business purpose leases rose rapidly. Higher bids meant higher land rents and the higher the land rent the fewer people willing to buy from the speculator. Dr. J.F. Watson who advocated land rent on the Minister's upset price and the institution of a system of cash premium payment saw this. Watson informed the Public Accounts Committee 1928 that under such a system an improvident purchaser would be able to realise on his purchase subject to a ground rental determined by experts instead of possessing an unsaleable lease subject to a heavy ground rental determined by the accidents of the auction room. The 1928 Committee adopted Dr. Watson's contention and recommended that future legislation should provide that the upset price, and not the price bid, should form the basis of land rent and rates, and that where land was sold at a price in excess of the upset price, the excess or premium should be paid in cash by the successful bidder. The Committee reported that by this means speculators would be discouraged and the payment of rent and rates on fictitious values avoided. It is therefore rather futile to argue that premiums on Canberra leases were never meant to be high or that premium payments generally were never intended to feature as a significant item of land revenue. The fact is that the premium payment was recommended as a cure for a state of affairs which arose very largely from the invitation to speculators to operate in Canberra. The legislation introducing premium payments did not eventuate until 1935, when the supply of leases far exceeded the demand, and for the next 15 years premium payments were practically unknown. Consequently, no Minister or administrator of the period would have needed to give premium payments a moment's thought let alone spend time considering the highest possible amounts which might or should be bid as premiums. The Territory population growth was slow but steady during the 1940s. (This population of course includes the small number resident at Jervis Bay and those in the rural areas but the number so resident was continually declining as a percentage of the number resident within the Canberra City Area. By 1970, at least 97 per cent of Territory residents live in the Canberra City Area.) The quickened population growth in the 1950s and the rapid growth of the 1960s should be considered in conjunction with the increased private demand for leases and the increased premium payments. These increases caused the introduction in 1959 of group auctions, a system whereby leases were offered not only singly but also in groups. It was hoped by this means to satisfy the demand by project builders and thus reduce the premiums being bid for single blocks. Then in 1962 came the restricted auctions, so called because eligibility to purchase was restricted to those who had not or whose spouse had not held a lease or an interest in a lease for a specified number of years. The average premium bids at restricted auctions are invariably lower than at unrestricted auctions. It is however rather fatuous to refer to these restricted auction sales as being available for 157

4

young people or people of limited means. There is no age limit or means test applied to restricted auction purchasers, a grandmother anl a multimillionaire could be eligible for such a lease. The premiums are lower simply because there are fewer bidders, many thousands of older Canberra residents having lost their eligibility when they became tenant-purchasers of Government built houses. Most of them had purchased before restricted auctions were introduced. The growth of the premium payment and the population increase can be seen from the following table RESIDENTIAL LEASES 1951 - 1969

YEAR POPULATION UNRESTRICTED RESTRICTED GROUP No. of Average No.of Average No.of Average Blocks Premium Blocks Premium Blocks Premium $

1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969

25,400

30,712 34,418 39,061 43,973 50,237 56,848 63,821 70,775 77,644 85,690 96,013 117,200 129,000

125 98 184 167 98 214 404 568 679 629 569 440 525 470 458 442 538 619

35 226 176 104 245 204 280 622 665 530 2055 3315 3575 1905 2160 2160 3015 3126

179 324 436 472 448 440 555 619

100 50 1130 138 1675 348 1635 336 504 960 444 670 730 593 935 688 1071 812

$

365 510 1790 2280 1880 1020 505 980 1905 1965

The Australian Governments throughout the 1950s and the early 1960s were Menzies Governments in more than the political, conventional or legal sense. Prime Minister Robert Gordon Menzies was very much the First Minister in his Governments and his strong desire to see Canberra develop in size and stature was no secret. These facts were a warning that Canberra would grow rapidly. They presented a challenge to Canberra's land admini158

strators to have land available to meet the greatly expanded demand which could be expected. The challenge was not accepted. According to most critics of Interior it was not accepted because it was not even perceived. The Department of the Interior was until 1957 responsible for the planning and development of Canberra and the Department of Works, With its head office comfortably settled in Melbourne,was responsible for construction. These early 1950s were in a sense the calm before the storm. Canberra was going to grow and grow rapidly. Most of the criticism of Interior during that period was that it was ignoring the impending growth, making no preparations for it. The role played by the Department of Works also came in for criticism. Most explanations given by Works of the apparent slowness to commence and even more apparent slowness to complete the construction of houses and offices and the servicing of blocks were dismissed as absurd. It seemed as though almost every other Canberra resident of those years knew as a fact that the senior and not so senior officers in the head office of the Department of Works in Melbourne were hostile to Canberra. To these Canberra residents the real explanation of the inactivity of the Department of Works lay in the fear amongst its officers that if houses were constructed or if an abundance of serviced land was made available for leasing their Department would soon be transferred to Canberra. On the other hand the Departmental explanation for the lack of an abundance of serviced land in Canberra was that it was not good policy to have serviced land unused because that would represent capital lying idle. The Department seemed to overlook that the raw land awaiting servicing also represented capital lying idle. The position of the Department of the Treasury during the early 1950s was not the subject of criticism. Most senior officers of that Department during the period insist that had money for building houses or servicing land been requested by those responsible the money would have been available. But no special requests were ever made. Interior was by the middle 1950s openly described as the Cinderella department. The general public service growth had passed this Department by. Perhaps the Government sensed certain limitations when it appointed a Senate Select Committee in 1955 to examine the whole question of Canberra's development. The most important outcome of this Committee's recommendations was the establishment of the National Capital Development Commission (N.C.D.C.) in 1957 as a statutory authoiity responsible for the planning, development and construction of the City of Canberra as the National Capital of Australia. Administration was left with Interior. The Advisory Council attempts to obtain special representation with or on the N.C.D.C. were unsuccessful. By the late 1950s the critics were turning on the Department of the Treasury which, it was alleged, had little knowledge of the difference between a freehold and leasehold and less interest in the difference, preferring to regard them both as being equal sources of revenue without distinction. In 159

the opinion of these critics, the Department of the Treasury was suffering from a mistaken conception of its purely auditing and accounting fuiiction in the general scheme of public administration. It was claimed to have developed grand illusions of itself as being a pre-eminent policy making Department and was standing over other Departments, was exerting undue influence to establish and maintain policies and practices designed to guarantee that the highest possible immediate revenue was obtained from the leasehold system, regardless of the fact that these policies inevitably lead to the very inflationary land prices which the leasehold system was meant to prevent. The N.C.D.C., from its establishment in 1957, tended to receive the criticism formerly directed at the Department of the Interior. The charge was made against the N,C.D.C. that its hopelessly confused thinking on the leasehold system was evidenced by its boasting about how much revenue was being obtained by cash premium payments for the grant of residential blocks, and by implication its explanation of these payments as being necessary to recoup the cost of installing services on a block. The strongest, most consistent, and it would seem the most important criticism directed against the Commonwealth Government or its Departments and instrumentalities in regard to the operation and administration of the Canberra leasehold system during these years related to the qwintity of residential blocks made available. Almost all other points of criticism stemmed from this question of supply. In any event, the charge was soon being made that either the Government or the Department of the Treasury or both of them deliberately restricted the funds available for the servicing of residential blocks to guarantee that the short supply of blocks made available (in view of the urgent demand) resulted in the payment of high cash premiums. Among the principal points of criticism relating to the demand for residential blocks were charges that:(a)

there had been a deliberate restriction of the funds made available for the building of Commonwealth houses for rental to force would-be tenants to join the already existing demand for residential blocks. Or alternatively, to compel these would-be tenants to purchase a spec built house for a price inflated by the premium the builder had already paid for the residential block. In support of this charge it was claimed that in 1956 83% of the residential blocks made available were provided for Government housing for rental whereas by 1964 only 34% of the blocks made available were so provided and that by 1970 this percentage had fallen even further.

(b)

this deliberate restriction of funds for the building of houses for rental caused the relevant authorities to spread their building expenditure and build smaller and less attractive houses. As a result of this, dissatisfied tenants, finding the houses allotted to them to be too small or certain to become too small, were forced to join the demand for residential blocks. 160

(c) that arrangements were made for the transfer to Canberra of sections of Departments without any appreciation that such an increase in population would naturally bring a growth in the private business sector and in complete disregard of the need for extra residential blocks. Another charge made against the Government, or against the Department of the Treasury, was that it encouraged or dictated the growth of ideas and beliefs in the N.C.D.C. which might have some justification with freehold land but which are objectionable to the Canberra leasehold system as originally established and operated. Such ideas and beliefs were said to include those that:(a)

premium payments for residential blocks are indications of the enhanced value of land in Canberra, or are signs of progress or are very desirable things, whereas, according to the critics, premium payments in most cases at restricted auction were desperation bids by shot gun purchasers at an auction where dog eats dog in the mad panic scramble to obtain any one of the relatively few residential leases made available by the absolute land monopolist in Canberra - the Commonwealth. In the opinion of most of these critics, the Commonwealth's monopoly of the supply of residential blocks and its alleged connivance in or apparent blessing of policies and practices which they claimed were deliberately designed to create and maintain an urgent demand for residential blocks made the Commonwealth Government a party to the greatest land racket ever witnessed in the history of Australia. The term land shark was often used by critics to describe and denounce the alleged Government action or inaction.

(b)

if the (the N.C.D.C.) wished to be assured of a yearly provision of funds to complete its programmes it was obliged to obtain the highest possible revenue from the sale of residential blocks.

The official explanation of premium payments for residential blocks was that premium payments were not sought, they were fortuitous windfalls, the size of which was determined by purchasers bidding in competition for the blocks being offered at a particular public auction. As there is no official determination on what the premium payment (if any) should be made for any particular residential block offered at auction there would be no official concern if premium payments decreased to a very low level or even disappeared. The amount of premium payments was the personal decision of purchasers bidding to obtain their preferred block and was a measure of the desirability of a particular block. The official explanation was denounced and rejected by most critics as being either demonstrably false, deceptive or hypocritical. The attack by the critics cannot be adequately summarised. It read as several attacks. Some pointed to the obligation upon the tenant-purchaser of a Government house to pay, in addition to the purchase price of the house, an amount representing 161

the amount he would have paid as a premium if he had purchased the residential lease at auction when it was unimproved. This practice wag seen as positive proof that premium payments were sought as a source of revenue and were not fortuitous windfalls resulting from competitive biddings at a public auction. Others referred to the practice of the Department of the Treasury of including in its estimates of receipts from the A.C.T. premium payments for residential blocks expected to be made during the next financial year as evidence which completely exploded as humbug the official explanation that premium payments were unsought - mere fortuitous windfalls the decrease of which would cause no official concern. In the opinion of these critics, these unsought fortuitous windfalls were awaited with joyous anticipation and a certainty that could only come from the complete control of supply and near complete control of demand. In this context, critics pointed to the gloom which they alleged descended upon the officers of the Department of the Interior directly concerned with the sale of leases after a low premium public auction. Those officers were said to go away from such an auction as though they had suffered some great and personal tragedy, blissfully ignorant that the cumulative effect of successive high premium sales on re-appraised unimproved values would, in the not too distant future, cause extreme financial hardship on an increasing number of leaseholders, probably including themselves, and price many residents out of Cartberra. In the opinion of most of these critics premium paynents for residential blocks were self-explanatory. According to them the policies and practices pursued by the Government and its instrumentalities during those years were designed to restrict to the minimum level the supply of residential blocks made available and to keep the demand as buoyant and vigorous as possible. The result was a foregone conclusion - premium payments. The greatest determinant in the size of premium payments in the vast majority of cases was the supply of residential blocks made available and the demand for them. The Commonwealth completely controlled the supply and very largely determined the demand. The emergence of the premium as the main item of land revenue can be seen from the following table': YEAR TOTAL PREMIUM ON LEASES LAND RENT Residential $

1959 1960 1961 1962 1963 1964 1965 1966 1967

390,280 450,660 347,900 1,619,460 2,794,174 3,223,256 1,979,824 1,517,921 1,881,571

Business $

106,776 1,958,410 163,400 229,500 701,630 2,706,400 3,105,900 2,846,250 1,194,900 162

Industrial $

78,000 -

47,000 29,700 113,300 412,400 228,000 134,000 48,000

$

319,105 429,840 519,971 556,158 673,135 793,230 1,210,440 1,575,731 1,852,680

The 1955 Senate Select Committee on the development of Canberra and the Parliamentary Joint Committee (A.C.T.) on supply of residential land (1965 Land Enquiry Report) concerned themselves with almost all of the criticisms mentioned. The findings of these Committees were very largely an acceptance of the criticism and their recommendations included much which had been advocated by the critics. And yet the deliberations and findings of Parliamentary Committees on Canberra matters - particularly in relation to land - are seldom regarded locally with respect. Perhaps this is not hard to understand. As one Advisory Councillor who gave evidence before the 1965 Lands Enquiry said:-

the fact in the enquiry which disturbed me was the apparent lack of knowledge among our Federal Parliamentarians of our local problems. They were abysmally ignorant of what land system we have here - if anything the enquiry's best results might be in educating some of our politicians from out of town.' The land critics of the 1950-1970 period differed from the critics of the Federal Capital Commission era. The Commission critics were attacking the whole concept of leasehold, calling for its abandonment,whilst the more modern day ones were attacking the administration or operation of the system. The 20 year re-appraisal which will be dealt with in a later chapter featured largely in the criticism of the period under review. The absence of any published works elucidating basic principles of the Canberra leasehold system has always been notable. This feature has not disappeared with the belated but most pronounced growth of the Department of the Interior since 1960. Consequently as the years have passed the land administrator's knowledge or appreciation of the historical origins and development of Canberra's leasehold system have lessened. A river is at its purest closest to its source. NOTES ON CHAPTER 8 1. 2. 3. 4.

5. A.

C.P. Lucas (ed.), Lord Durham's Report on the Affairs of British North America 1839 (Oxford, 1912), ii, p.203. P.D. 12:16491 P.D. 207:1846 P.D. 13 September, 1968. p. 1062. Ibid. R.P. Greenish, Advisory Council Debates, December, 1965.

163

CHAPTER 9

•THELAW AND THE LEASES

The Commonwealth of Australia Constitution Act prescribed that some part (unspecified) of the State of New South Wales was to be allocated to the Commonwealth as the territory for the establishment of the Seat of Government of the Commonwealth. Section 125 of the Constitution provides: -

125. The seat of Government of the Commonwealth shall be determined by Parliament and shall be within the territory which shall have been granted to or acquired by the Commonwealth and shall be in the State ofNew South Wales and be distant not less than one hundred miles from Sydney. Such territory shall contain an area of not less than one hundred square miles and such portion thereof as shall consist of Crown lands shall be granted to the Commonwealth without any payment therefor. The Parliament shall sit at Melbourne until it meet at the seat of Government. Before any area or site for the Seat of Government was chosen, Quick and Garran in their monumental work of 1901 gave an opinion of the import of section 125 which has prevailed undisputed ever since. The learned authors wrote:Land owners or Crown Lessees within the Territory chosen for the seat of Government will not be dispossessed unless the Federal Parliament chooses to dispossess them. The result of the transfer of territory will be that instead of holding from the Crown as represented by the Government ofNew South Wales, they will hold from the Crown as represented by the Government of the Commonwealth; and the Commonwealth, in the exercise of its exclusive jurisdiction over the territory, will be free to resume so much of the privately owned land as it requires, in accordance with laws passed under the power of "eminent domain" (Sec. 51-xxxi), - and subject, of course, to the constitutional requirement of just compensation.' 164

4

The site of the Territory for the Seat of Government having been determined it was legislatively transferred from New South Wales to the Commonwealth by a series of Commonwealth and New South Wales Parliamentary enactments. The successive Acts were the Seat of Government Act 1908 (Commonwealth), the Seat of Government Surrender Act 1909 (New South Wales), and the Seat of Government Acceptance Act 1909 (Commonwealth) - the latter two complementing one another in ratifying the Agreement as to conditions of transfer, the surveyed metes and bounds of the Territory and providing for a date of transfer to be proclaimed. The date was duly proclaimed as 1 January, 1911. Before the transfer was effected, the Commonwealth Government took steps to establish the machinery whereby laws for the 1government of the Territory could be made, and whereby those laws would be administered, by the Executive Government of the Commonwealth - the Governor-General and his Ministers. The result was the Seat of Government (Administration) Act 1910. From the lands administration point of view, the two most important provisions of the Seat of Government (Administration) Act 1910 were sections 9 and 12. Section 9 provided:-

9. No Crown lands in the Territory shall be disposed of for any estate of freehold except in pursuance of some contract entered into before the commencement of this Act. and Section 12 provided:-

12. (1). Until the Parliament makes other provision for the government of the Territory, the Governor-General may make Ordinances having the force of law in the Territory. One of the conditions imposed by the Seat of Government Acceptance Act 1909 (section 6) was that - all laws in force in the Territory immediately before the proclaimed day (1 January, 1911) shall, so far as applicable, continue in force until other provision is made. The Seat of Government (Administration) Act 1910 therefore enabled other provisions to be made by Ordinances progressively as they became necessary for the various different aspects of administration. Regulations are of course made under Ordinances. The intention of the early Federal Parliaments that every square inch of privately owned lands in the Territory eventually chosen as the site for the seat of Government should be acquired has never been carried fully into effect. Nevertheless, the Crown in right of the Commonwealth is today the absolute owner of all land within the City Area and of most Territory land outside that area. (The City Area is defined in the City Area Leases Ordinance as being the area in the Territory specified as such by the Minister from time to time. The boundaries of this area expand with the construction of new suburbs. As at present specified the City Area includes Fyshwick, Watson, Belconnen, the Woden Valley and all suburbs between). The 165

4

practical effect of this land ownership by the Commonwealth and of section 9 of the Seat of Government (Administration) Act is that Crown lands in the territory are disposed of for estates of leasehold. Since the land tenure in the Territory was to be essentially different from what it had been when the area was part of New South Wales leasehold instead of predominantly freehold - the Commonwealth needed new laws (Ordinances) to provide the mode of granting leases, rights and obligations of lessees, building controls and the like. In fact, a new code of land tenure needed to be set up for the Territory - a code which is not entirely radical and yet certainly not traditional either. The four leasing Ordinances under which the new code has developed, are, in their order of importance:City Area Leases Ordinance 1936-1969;. Leases Ordinance 1918-1958; Leases (Special Purposes) Ordinance 1925-1943; Church Lands Leases Ordinance 1924-1932.

Before examining some of the many provisions which distinguish leases granted under the various Ordinances it may be of assistance to note the fewer points of similarity. To begin with, whilst each of these four Ordinances . applies within the City Area the Leases Ordinance also applies outside the City Area. (The Leases Ordinance is therefore a Territory-wide Ordinance in the fullest sense of the term). The Minister referred to in each Ordinance is the Minister of State for the Interior and all leases granted by the Minister are granted in the name of the Commonwealth. Another point of similarity is that all leases granted under these Ordinances (excepting most of those granted in the City Area under the Leases Ordinance) are subject to related legislation, in particular, the Building and Services Ordinance 1924-1942, the Building Ordinance 1962, the Buildings (Design and Siting) Ordinance 1964 and the Real Property Ordinance 1925-1969. The importance of this building legislation in Canberra is that it operates to govern or regulate the lessee's covenant to build. An extensive knowledge of the legislation is not however a prerequisite to an understanding of the basic principles of the leasehold tenure operating in Canberra. Indeed, for present purposes it is sufficient that the mere existence of the legislation be known. The title registration practices and procedures prescribed by the Real Property Ordinance are however issues which are more central to the existence of any land settlement. They will therefore be briefly considered later. The leasing Ordinances will be dealt with in the ascending order of importance. 166

Church Lands Leases Ordinance 1924-1932 The distinguishing feature of leases granted under this Ordinance is that they are of course granted only to Churches, that they are granted in perpetuity, that no rates or taxes are levied upon the land and that the land rent is 10 cents per annum payable if and when demanded by the Minister. All leases granted under the Church Lands Leases Ordinance are granted subject to such covenants and conditions as the Minister determines. In practice, this Ministerial power has been used mostly to prescribe the style and minimum cost of the edifice to be erected on the leased land and the conditions upon which the lease may be determined. The Ordinance provides that the land in respect of which any lease is granted is to be used solely for Church purposes and that land is not deemed to be so used unless it is used solely as a site for a Church. The Ordinance concludes, however, by relaxing this restriction to permit residences for clergy or a school where religious instruction only is given to be also erected on the land. The Church Lands Leases Ordinance makes no provision for an application by the lessee for a variation of the purpose for which the land leased may be used. It would seem therefore that the only method by which a lessee of land leased under this Ordinance could have the Church purposes only restriction removed would be to surrender the lease and obtain a re-grant of lease under some other Ordinance for some other purpose. This course of action would of course presuppose Commonwealth approval. Upon determination of a lease granted under this Ordinance the Commonwealth is under no obligation to hold the land for Church purposes. It would revert to Crown land that could perhaps be leased under other Ordinances for other purposes, or to some other Church under this Ordinance, or be left vacant or be used for some Commonwealth purpose. As no one denomination is entitled to more than one lease under this Ordinance there are few Church Lands leases in existence—about twenty, each the principal site of the relevant Church in Canberra. They are of course all within the City Area as the Ordinance only applies within that area. Leases (Special Purposes) Ordinance 1925-1943 Under this Ordinance the Minister is empowered to grant leases of land within the City Area for any purposes other than business or residential purposes. The leases can be for periods up to but not exceeding 99 years and subject to such covenants and conditions as to rent and otherwise as the Minister determines or as are prescribed. A lessee's covenant to build is invariably included in each of these leases. 167

With one exception special purpose leases may provide for reappraisement of the unimproved value of the leased land during each twentieth year thereafter. The exception is that land leased under the Ordinance for use solely as a site for a Church, a residence for clergy or a school where religious instruction only is given is not subject to reappraisement. The earliest granted leases under this Ordinance seldom if ever contained any provision for re-appraisement but those granted in more recent years almost invariably contain such a provision. The land rent charged varies, in some cases being one per cent and in others up to two and a half per cent per annum of the unimproved value of the leased land. Rates are not payable in respect of land leased under this Ordinance which is occupied by or used in connection with any certified school. Leases may be granted under this Ordinance to approved associations for the purposes of the association. Approved Association is defined as any society association or other body which is not carried on for profit or gain to the individual members and which the Minister declares to be an approved association for the purposes of the Ordinance. The Leases (Special Purposes) Ordinance 1925-1927 was amended in 1929 to give the Minister power to grant to the Government of any country or to any accredited agent of that Government a lease of land for any diplomatic, consular or official purpose of that Government or for the purpose of an official residence for any accredited agent of that Government or for all or any number of those purposes. This amendment plus the acknowledgement a couple of years later that leases could be granted under the Ordinance for residences for clergy are the only exceptions Parliament has chosen to make to the restriction that leases are only to be granted under this Ordinance for purposes other than business or residential. The test to be applied when considering an application for a special purpose lease is therefore whether or not the purpose for which the leased land will be used is a business or residential purpose. If the purpose is either or both the application must fail. If the purpose is neither business nor residential other matters matters such as whether or not the applicant is an approved association can be considered. Most special purpose leases - there are about 180 of them - are used for club buildings, diplomatic residences and offices, Churches, Church schools or residences for clergy. The restriction on the purposes for which land could be leased under this Ordinance was considered over 30 years ago. There were and are obviously some occasions when the activities of a special purpose applicant such as a charitable organisation - would or could involve using the land for both. Under this Ordinance such an applicant is simply not, eligible for a lease, the charitable nature of the applicant's activities being completely irrelevant. The acid test was, and has always been: is the purpose for which the land will be used business or residential? If it is either business or residential, no lease is available under the Leases (Special Purposes) Ordinance. The 168

business and/or residential purpose leases under the City Area Leases Ordinance have however always been available to charitable and other organisations but the problem was that leases granted under that Ordinance are subject to more onerous covenants and conditions as to rent rates etc. than leases granted under the Leases (Special Purposes) Ordinance. The solution adopted was not to relax the restriction on the purposes for which leases could be granted under the Leases (Special Purposes) Ordinance but to amend the City Area Leases Ordinance to empower the Minister to approve a reduction of rent and to grant relief from lease covenants and conditions in the case of approved associations. All leases granted under the Leases (Special Purposes) Ordinance contain a provision entitling the Commonwealth to determine the lease in certain events. The lessee has statutory tenant right in improvements effected by him and provision is made for the conversion of a special purpose lease into a business purpose lease under the City Area Leases Ordinance when the special purpose for which the lease has been granted is not being fulfilled or has been accomplished or where the fulfilment of the special purpose is no longer possible.

Leases Ordinance 1918-1958 The Leases Ordinance is the oldest of the four Territory leasing Ordinances and the only one of them to apply throughout the whole Territory. Undoubtedly this Ordinance was originally designed to provide for the many hundreds of rural leases which were to be granted after its enactment but it has operated to support the granting of more than rural leases. The original Ordinance was short and terse and subsequent amendments have not changed that. However, the Regulations made under the Ordinance do now and have always provided more comprehensive conditions. Regulation 5 provides that leases may be granted for grazing, fruit growing, horticultural, agricultural, residential or business purposes or any other purpose approved by the Minister. It is clear therefore there is no statutory restriction on the purpose for which a lease may be granted under this Ordinance. In this chapter we are mainly concerned with the operation of the Leases Ordinance within the City Area. In the City Area no less than 10,000 people hold fortnightly tenancies of Commonwealth erected houses or flats by virtue of leases granted under the Leases Ordinance and outside the City Area the Commonwealth has granted several hundred rural, mostly 50 year, farming leases, and some few long term (25 years) residential leases. The much wider application of the Leases Ordinance and the large number of people affected by its operation gives to it a greater importance than either of the two earlier mentioned Ordinances. A clear understanding of this Ordinance and of the various leases granted thereunder is therefore necessary. This understanding, however, is not always obtained. For one reason or another the leases granted under the Leases Ordinance are very often the least understood of all Territory leases. 169

To begin with, the word lease. It is essential to any understanding of the law governing Territory leases generally, and particularly the vast majority of those granted in the City Area under the Leases Ordinance, that the legal meaning of this word be known and fully appreciated. I agree that in ordinary parlance and conventional language it may fairly be said that a distinction is constantly made between a tenancy and a lease - but I am unable to say that I can introduce this same loose parlance in the rule. (Re Negus (1895) 1 Ch. p.73 per Chitty J. The word lease in the wider legal sense includes all types of periodic tenancies, whether they be yearly, quarterly, monthly, fortnightly or weekly. It follows therefore that the 10,000 fortnightly tenants of Commonwealth owned houses and flats in the City Area are just as much lessees from the Commonwealth as are the holders of what are known by popular description as rural leases. The lease in each instance is in the discretion of the Minister to grant pursuant to the Leases Ordinance and Regulations made thereunder. Under Regulation 16, the Minister is empowered to grant a lease to any person upon a weekly, fortnightly, mQnthly or quarterly tenancy. In practice, with Government built houses, the Minister grants these leases upon fortnightly tenancies. The fortnightly lessees are each required to execute a document entitled Acknowledgement of Tenancy before entry into possession of the rented premises. The use of the work Tenancy in this document seems to cause unwarranted confusion about the relationship created. The simple facts are that a tenant is a lessee and this Acknowledgement of Tenancy form lis as much a lease document and evidence of the existence of a lease as any other document evidencing a lease under this or any other Ordinance. The fortnightly lessee-tenant technically enjoys no more than a right of possession (domestic use and enjoyment) of the premises in fortnightly rests in consideration of the agreed rent being paid fortnightly in advance and other covenants in the lease being observed. There is no doubt that these fortnightly leases are the most insecure form of tenure the Commonwealth offers in the City Area. The Minister can at the end of a fortnightly term terminate any one or each of them. The Landlord and Tenant Ordinance has no application to the Commonwealth and the Recovery of Lands Ordinance 1929-1938 enables the Minister to obtain a Court ejectment order in any case where a tenant duly served with a notice to quit, or a notice of determination, as the case may be, fails to vacate (notwithstanding some vociferous but sadly misconceived allegations that this last mentioned Ordinance is invalid).. In practice the Minister is never given to disturbing any fortnightly tenant except for persistent default of rental payments or failure to observe lease covenants, such as wilful abuse of the premises, rowdy behaviour or 170

parting with possession of the premises. It is quite normal for these fQrtnightly tenants (or their sons, daughters etc.) to remain in continuou occupation of the same Government owned house or flat for several decades. The position of these fortnightly tenancies within the Territory is simple enough but often misunderstood. The reader who not only perceives that these tenancies are in fact leases but also appreciates their inception and conclusion, the law governing them in between and how they as leases fit into the leasing pattern has advanced towards a fuller understanding of the Territory leasehold system. The point is, they constitute one of the kinds of lease prescribed by Ordinance, not mere common law leases, as between the ordinary proprietor and his tenant. There are within the City Area a small number of other leases granted under the Leases Ordinance. The Federal Capital Commission erected and managed several hotels some of which were subsequently leased out to private enterprise management under the Leases Ordinance. In addition, there have probably been some few other Commonwealth erected buildings in the City Area held at different times on leases granted pursuant to the Leases Ordinance and it may be that one or other unimproved blocks of the land in the City Area has been leased under this Ordinance to some organisation for some particular purpose, e.g. a provisional sports area, showgrounds, storage yard or the like. At any rate, this type of grant is possible under the Leases Ordinance. The number of these leases within the City Area would certainly not be large - probably no more than 10 or 15 concurrently at any time and whilst the (ostensibly) longer term of some of them might appear to confer a greater security of tenure than the fortnightly lessee has, it must not be forgotten that the distinctive mark of all leases granted under the Leases Ordinance is the lack of any real security of tenure. Land leased under the Leases Ordinance, whether on fortnightly ten-s ancy or long term lease within the City Area, or on long term rural or residential lease outside the City Area, may be withdrawn at any time by the Minister when the land is required for any public purpose of the Commonwealth. This is tantamount to saying all leases granted under the Leases Ordinance are determinable without cause. In stark contrast, as will next appear, no lease granted under the City Area Leases Ordinance can ever be determined without cause. The process of compulsory acquisition of land is commonly called resumption. The relevant statute for a normal Commonwealth acquisition anywhere throughout Australia is the Lands Acquisition Act 1955-1966. The resumption of land granted under the Leases Ordinance is - however not a normal acquisition. No competent administrator would seek to effect such a resumption under the Lands Acquisition Act. The simple truth is that the lessee under the Leases Ordinance, whether the land be situated in or outside the City Area or whether the lease be a 50 year rural lease or a lease for any 171

other term or any other purpose, holds the lease subject to the Minister's power to withdraw the whole or part of the land for any public purpose at any time. The lease is determined by notice in writing signed by the Minister and the lessee's interest in the land is converted solely into a right to receive compensation merely for any lessee purchased or effected improvements on the land in respect of which he had expressly in that lease been accorded tenant right of compensation. The Recovery of Lands Ordinance stands behind the resumption or withdrawal process should the lessee refuse to deliver up possession of the land. City Area Leases Ordinance 1936-1969 The City Area Leases Ordinance is the most important of the Territory leasing Ordinances. Over 23,000 leases have been granted under it. As indicated by its title the Ordinance applies only within the City Area of the Territory. In fact, it is in this Ordinance that the words City Area are defined. Under the City Area Leases Ordinance the Minister is empowered to grant leases of land for business purposes or for residential purposes or for both business and residential purposes. A lease granted for business purposes or for both business and residential purposes may specify the class or particular classes of business for which the land included in the lease may be used. The lessee covenants not to use the land for any other purpose. There is provision for application in course of time by the lessee for a variation of the purpose for which the leased land may be used, and the application may be approved or rejected. The Ordinance provides for the leases to be for such period not exceeding 99 years and subject to such covenants and conditions as to rent and otherwise as the Minister may determine or as may be prescribed. In practice, almost all leases granted under the City Area Leases Ordinance are for a 99 year term and almost all lease covenants and conditions are prescribed by the Ordinance. Of no less importance than the purpose covenant is the covenant to build. Virtually every City Area parcel of land made available at auction for leasing is a bare site conditioned by The imperative requirement that the lessee shall forthwith set about erecting thereon a building, dweffingshop, offices as the particular case may be. The periods within which construction must be commenced and completed, the materials of construction (brick, timber etc.) and the minimum cost of the building to be erected are all prescribed and stipulated in the lessee's covenant to build. The covenant also stipulates that the lessee shall submit building plans and specifications to the Minister for approval (of design and siting) and not commence construction prior to the approval of those plans. The usual periods stipulated are 6 months for commencement of construction and 12 months for. completion, or such extension thereof as the Minister may in writing approve. 172

Another basic covenant by the lessee is the covenant to pay land rent at the prescribed rate of five (5) per cent per annum of the amount that the Minister has notified as the unimproved value of the lanl. This unimproved value of the land is re-appraised by the Minister thiring the twentieth year of the lease and during each twentieth year thereafter. Provision is made for an appeal against the re-appraisement. Unimproved value is defined in the Ordinance as:-

the capital sum which the lease, subject to the terms and conditions upon which it is held or is to be held, might be expected to realise if offered for sale on reasonable terms assuming that the improvements (if any) on the land had not been made and that the lease had an unexpired term of 99 years at the time of the sale, and leaving out of consideration any rent payable in respect of the lease other than prospective increments or decrements of rent after re-appraisement. The importance of the covenant to build and the purpose and land rent covenants cannot be over-emphasised. It is as though written across the Canberra leasehold sky are the three most important commandments:Thou shalt not use leased land for any purpose other than the purpose for which it is granted. Thou shalt pay land rent. Thou shalt briskly design and erect a building as approved on the land. The Minister's power or right to determine a lease granted under the City Area Leases Ordinance has always hinged on or been exercisable if, and only if, the lessee fails to comply with any one of these three lease covenants. The determination of one of these leases therefore can never result from some capricious whim on the part of the Minister or his advisers. The only occasions when the power to determine a lease can be exercised are clearly set out in the covenant of the lease which provides:3. It is mutually convenan ted and agreed as follows:(a) That if(i)

(ii)

(iii)

any rent payable under this lease shall remain unpaid for twelvecalendar months next after the date appointed for payment thereof (whether such rent shall have been formally demanded or not); or a building in accordance with sub-clause (c) of clause 1 of this lease is not commenced and completed within the periods specified in the said sub-clause; or after completion of a building as aforesaid the land is at any time not used for a period of two years for the main purpose for which this lease is granted,

the Commonwealth may determine this lease but without pre-. 173.

judice to any claim which the Commonwealth may have against: the lessee in respect of any breach of the covenants on the part; of the lessee to be observed or performed. The covenant to pay rent is bolstered by an additional covenant wherein the lessee covenants to pay to the Minister as additional rent a sum at the rate of 8 per cent per annum accruing from day to day on any amount of land rent payable under the lease which remains unpaid one calendar month after the day appointed for payment. Not being specifically provided for in the Ordinance, this particular covenant rests on the Minister's power to grant leases subject to such tetms and conditions as he determines. No one should, however, be unaware of this 8 per cent covenant or, indeed, any other covenant. The covenant to build must always be considered in conjunction with the building legislation. The covenant to build, and the additional covenants' not to erect any building on the land without the previous approval in writing of the Minister, and to maintain, repair and keep in repair all buildings and erections on the land to the satisfaction of the Minister compel adherence to the Building Regulations. The covenant by the lessee to use the lend only for a specified purpose must be the dream come true of all Town Planners. In the City Area of the Territory, the Commonwealth owns all the land and its Town Planners allocate parcels of land for leasing and also pre-dictate the particular purposes (restriction of use) respectively imposed on each parcel. Leases are granted in dormitory suburbs for residential or for business purposes, with the business purpose ones grouped together as a suburban shopping centre and apart from the residential purpose leases. The corner or' mid street suburban shop therefore is non-existent. In other main business centres leases are granted exclusively for commercial business purposes only, or in industrial areas for industrial purposes only, as the case may be. Thus the benefits of zoning are obtained at the outset (without any zoning legislation) and retained at all times by the existence of the purpose covenant in each and every lease. Any breach of the purpose covenant is also made a prosecutable offence, punishable by a fine plus a penalty of twenty dollars ($20) per day for each day of persistence in the breach. Under the City Area Leases Ordinance, the Minister is empowered to offer sites for industrial, business and/or residential leases for grant (sale) by auction, or he may invite applications, or he may grant leases without auction or applications. Auction is the usual method employed. At auction, the successful bidder pays to the Commonwealth the amount of the bid that made him or her the successful bidder, a survey fee and first year's land rent in advance. The amount of the successful bid is colloquially described as a premium but this word is not mentioned in any legislation relating to leases in the Territory. Upon auction purchase, or upon a successful application, the purchaser or the applicant, as the case may be, obtains 174

a right to the grant of a lease. There are, before the lease is actually granted, certain formalities to be completed such as the engrossing of the lease document (or Deed as some loosely call it). The term commences, however, on the day of the auction or the day of the successful application, as the case may be. The failure of a person entitled to the grant of a lease to accept, sign and seal the lease document within a prescribed period empowers the Minister to determine the right to the grant. There are by virtue of the City Area Leases Ordinance certain conditions of tenure attaching to leases granted under the Ordinance which operate as initial restriction on transfers, mortgages etc. The most important restriction in the sense that it applies to all leases of unimproved land granted under this Ordinance arises from the covenant to build. Until the completion of a building on the land in accordance with a building plan or design approved by the Proper Authority the lease or any interest in the lease cannot be transferred, sub-let or mortgaged without the consent of the Minister. (The Proper Authority is defined to mean the Proper Authority appointed under the Canberra Building Regulations made under the Building and Services Ordinance 1924 or under that Ordinance as subsequeitly amended). In practice, Consent to a mortgage is usually readily given where the Minister is satisfied that the money to be advanced under the mortgage is bona fide required by the lessee for the purpose of erecting or completing the building. In practice, consent to the transfer of a lease before the building is completed is not given but the Ordinance does provide in cases of extreme fortuitous hardship for a refund of the premium paid for the grant of a lease which has subsequently been surrendered or determined. Nothing in the Ordinance however should be read to obscure the fact that one of the prime commandments of the whole statutory leasing system established by the City Area Leases Ordinance is Thou shalt build. The commandment is not idle until the building has been completed nor in practice is the threat to determine the lease for failure to build. The auction at which leases are offered may be a restricted auction, i.e. an auction at which the right to bid is restricted to a specified class of persons. The specified class is invariably those who have not or whose spouse has not at any time within a specified number of years held any lease or any interest in a lease granted under the Ordinance. The purchaser at these auctions obtains a lease which is subject to a further restriction on the right to transfer, mortgage sub-lease etc. Section 28B of the Ordinance which prescribes these restrictions contains certain exceptions, exemptions and distinctions but by and large it may be said that a restricted auction lessee is, for the period of the first 5 years after the commencement of the lease, unable to transfer, mortgage or sub-lease his lease without the consent of the Minister. After that first 5 year period he can do as he likes, transfer, mortgage, sub-let, but not sub-divide. The fortnightly lessees under the Leases Ordinance may during their tenancy make an application to purchase the rented dwelling. In this event, if 175

the purchase is effected, the Commonwealth will grant to the tenant purchaser a 99 year residential purpose only lease under the City Area Leases Ordinance. The Commonwealth has mortgage facilities available to assist the tenant purchaser, but, whether these are made use of or not, the t'pe of lease will be the same, and a 5 year restriction on the lessee's right to transfer or agree to transfer his interest in the land will apply. The no-transfer provision in these tenant purchase, or section 28A leases as they are more often known, is removed if at any time the lessee has made an offer to surrender the lease to the Minister in consideration of the payment to the lessee of an amount agreed upon between the parties, or in default of agreement, determined by arbitration and the Minister has declined to purchase it. Obviously these section 28A leases will not include a covenant to build but otherwise the lessee will hold the lease on the same terms and conditions as other residential lessees under the City Area Leases Ordinance. As mentioned earlier, the Minister fixes or notifies the unimproved value of the land before making it available for leasing and this value is re-appraised by the prescribed authority during the twentieth year of the term of the lease and during each twentieth year thereafter. Provision is made for appeals against re-appraisement to be made to an Appeals Board consisting of 3 persons appointed by the Minister. The uniriproved value of land included in a lease in respect of which there has been a variation of the purpose for which the land may be used is re-appraised by the prescribed authority on the day next following the day upon which the order effecting the variation takes effect. The leases granted under this Ordinance each contain a covenant wherein the Commonwealth covenants and agrees that if at the expiration of the lease the Minister shall have decided not to sub-divide the land and that it is not required for any Commonwealth purpose the lessee shall be entitled to a further lease of the land for such further term and subject to such conditions as may then be provided or permitted by Statute Ordinance or Regulation. Under the City Area Leases Regulations the Minister is authorised to enter without payment of compensation upon the land included in any lease and construct and maintain, sewers, drains, connections thereto, etc. This reservation is often mistaken for an easement. It should however be appreciated that there are specific methods of creating easements and that easements simply do not come to life because an over anxious administrator chooses to describe something as an easement or a proposed easement. The lessee under the City Area Leases Ordinance has statutory tenant right to be compensated for the value in situ of completed improvements, and for 'this purpose improvements are defined to include buildings and erections but not improvements effected at the cost of the Commonwealth unless the Commonwealth has received or is entitled to receive payment for the improvements. The tenant right in improvements is of course not only' available at the expiration of the term of the 99 year lease. The Commonwealth is equally liable to pay the value of lessee effected and completed improve176

ments, e.g. a duly completed dwelling, upon the prior determination or surrender of a lease. The real property lawyer will have recognised many pages back that the leases granted under the City Area Leases Ordinance are a quite different category from Common Law leases which arise as a result of arrangement between parties. Not only is the beginning and the end of these Canberra leases provided for by statute but so complete is the legislative coverage of essential incidents throughout that there is hardly any scope at all for common law implications. It is therefore imperative that the person seeking a detailed knowledge of leases granted under this Ordinance should cultivate the habit of looking into the Ordinances and Regulations for the statutory terms, conditions and provisions of the lease and Common Law should be turned to as a last resort if, and only if, some incident is not compassed in the legislation. The need for this was well illustrated in Owendale Pty. Limited v. Anthony (1967) 41 A.L.J.R. p.89. In that High Court case a lease granted under the City Area Leases Ordinance contained a covenant by the lessee company that it would within one year after the commencement of the term or any such further time as might be approved, commence to erect a building in accordance with plans and specifications prepared by th lessee and approved by the Commonwealth. The lease also contained ,a provision that the acceptance of rent during or after the periods referred to in the building covenants should not prevent or impede the exercise by the Commonwealth of the powers conferred on it to determine the lease. The lessee did not commence building, nor did it submit plans and specifications within a year from the commencement of the term. On the day before the end of the year the lessee wrote a letter to the Commonwealth in which it said that the planning of the proposed structure had reached an advanced state and the Commonwealth replied intimating the necessity to apply for an extension of time. Thereafter for a period of nearly two years correspondence passed between the Commonwealth and the lessee, the Commonwealth asking for explanations and assurances, and the lessee giving reasons for its delays. The Commonwealth gave notice to the lessee of intention to determine the lease and subsequently on three occasions gave notice in writing pursuant to section 22(5) (a) of the Ordinance to comply with the conditions of the lease within the time specified in the notice and after the lapse of time specified in the last notice gave formal notice of determination. The Court upheld the appeal by the lessee company against the determination of the lease. To use a legal expression j it is impossible to find any ratio decidendi in the Court's decision. As this case was only the second time in 40 years the High Court had been called upon to consider leases granted under the City Area Leases Ordinance the Court was very clearly in a strange field and it must be said, with respect, that the Court erred in regarding a lease granted under the City Area Leases Ordinance as a common law lease. The various members of the Court in their tentative approaches to the legislation laboured to import the very common law implications which the legislation was designed to exclude.

177

Counsel for the lessee (Plaintiff/Appellant) who had the running of the case skilfully employed the tactic of proffering precepts developed at common law for regulating unspecific leasing arrangements between over-bearing landlords and subservient tenants, thus obscuring the fact that Crown leases in Canberra are all cast in a rigid mould created by legislative enactment. Counsel for the Commonwealth was' unsuccessful in exposing this mould to the Court's gaze, though he did spend much erudition in attempts to adopt to the case each red herring introduced by the lessee. It seems from their separate judgments that each member of the Bench caught a wrong bus, unaware of the Canberra Leasehold Special Bus meticulously equipped and routed by legislative enactment for their expedition. The Owendale case is one of those judicial exercises best forgotten and a future Court should have no difficulty in distinguishing (ignoring) it and applying the specific provisions of the Ordinances. The decision, if followed in future cases, would mean in effect that the Commonwealth's right to determine leases for non-compliance with lease covenants was practically nonexistent and the administration of leases granted under the City Area Leases Ordinance would soon become a chaotic nightmare. The lesson to be learned, because of and not from this case, is simle but all important. Just as a statute can ordain the mode of birth of a lease, so also can it ordain the mode of its burial or any exigency throughout its life span. The lessees power to sub-let is one of many examples of this legislative mould. The power can be found in section 29(a) of the City Area Leases Ordinance and there can be little doubt that this sub-section provides a complete code covering the sub-leasing power of lessees. The opening words of the sub-section, which make the power to sub-lease subject to the remainder of the Ordinanc;appear to completely oust any residual or concurrent common law power. It follow therefore that any sub-letting of a lease granted under the City Area Leases Ordinance, whether it be a weekly, quarterly or yearly tenancy amounts to an exercise of the statutory power to sub-lease. The importance of the legislation for an exact knowledge of Canberra's leasehold system cannot be over emphasised, and if the person seeking that knowledge is to avoid absurd interpretations he or she should at least become familiar with the Acts Interpretation Act, leavened with, a fair degree of common sense. In addition, it is important to remember that every provision in the leasing Ordinances should always be readin its context and in the broader context of the whole of the legislation and without forgetting the inter-relation of other Ordinances. Before moving on to the question of land title registration it may be noted that the ancient rule of caveat' empror (let the buyer beware) is not ousted because the land being offered for sale by the Commonwealth happens to be leasehold land. The purchaser takes that which he sees, or which,, 178

as a prudent and diligent purchaser, he ought to have seen, and is not entitled to anything better. The Commonwealth is under no resporsibility to indicate any features in relation to the land but rather the responsibility lies on the purchaser to examine the land and make his own judgments. If inlaying the foundations for the building or in anything else the purchaser's estimate of costs is exceeded, the purchaser cannot then be heard to complain that the Commonwealth should pay the excess. Real Property Ordinance 1925-1969 A knowledge of land title registration in Canberra is essential for a full understanding of the leasehold system in operation. To obtain this it is necessary to know the Torrens system of title registration and appreciate its operation and administration as prescribed by the Real Property Ordinance. The Torrens system of land title registration is an Australian reform taking its name from Robert Torrens, one time Collector of Customs in South Australia and later Premier of that State, or Province, as it was then known. The system was established in South Australia in 1861 and subsequently in other Australian jurisdictions. The main object of the legislation behind it is to remove the disadvantages of the Common law system of title by deed. Under the Common Law system, usually referred to as the old system, a deed is necessary in the transfer of the ownership of an estate or interest inland, or in any dealing with the land such as a mortgage, sub-lease etc. Each one of these deeds must be stockpiled as an essential part of the chain of title. It is obvious that any flaw in the chain, mislaying a deed, etc. will be difficult or perhaps even impossible to remedy but in any event it will be expensive. The advantages claimed for the system invented by Torrens are simplicity, cheapness and certainty. The main feature or distinguishing mark of the Torrens system is the introduction of the Certificate of Title, a document of prescribed uniform format in which is entered in the most succinct yet comprehensive fashion exact particulars of the land parcel, usually by reference to a survey Deposited Plan of the neighbourhood, of the person or persons to whom the land is granted and for what legal estate or interest, all reservations, restrictions, conditions and qualifications pertaining thereto and specifying all encumbrances (easements, mortgages) appurtenant thereto. This single document in the office of the Registrar of Land Titles (counterpart held by the registered proprietor of the land) takes the place of the collection of deeds which go to make up the chain of title under the old system. The Certificate of Title makes lengthy retrospective examination of title quite unnecessary thus giving simplicity, cheapness, and certainty. The Certificate of Title is a certification by the State of the Title of the person named in the certificate. In other words, it is a State guaranteed title. The Torrens system of land title registration has been adopted in all Australian States and New Zealand and in some countries in the northern hemisphere but vested and conservative interests such as the legal profession 179

or land title guarantee corporations have ensured that in no jurisdiction (save perhaps South Australia and New Zealand) is it the exclusive form of title. The City Area of the Territory for the Seat of Government is however a Torrens title only area. The most important concept of the Torrens system is the Register Book. • . . it is the key to the whole working of the system. The Register Book consists of duplicates of all Crown Grants and Certificates of Title, each one constituting a separate folium of the book, on which the Registrar-General records the particularsof all instruments, dealings and other matters required to be registered affecting the title to the land included in the grant or certificate. 2 The adoption of the Torrens system in an exclusive leasehold area such as the City Area in the Territory has presented no insurmountable difficulties. The original lessee under the City Area Leases Ordinance, the Church Lands Leases Ordinance, the Leases (Special Purposes) Ordinance and most of the longer term leases granted in and out of the City Area under the Leases Ordinance are issued a single registered document called a Crown Lease (counterpart bound in the Register Book at the Registrar's Office). This Crown Lease, which contains the terms, conditions and covenants of the leas;must not be thought of as in any way inferio to a Certificate of Title. They both perform the same function and attract the same protections and benefits. These Crown Leases, bound in the Register Book, are all public documents available to be searched upon the payment of a nominal fee. These are the main facts of the leasehold system of land tenure in the Australian Capital Territory. In general and in particular they must be fully grasped to understand the administration of land in the area. NOTES ON CHAPTER 9 1. 2.

Quick and Garran, The Annotated Constitution of the Australian Commonwealth 1901, p.9 82. Helmore, B.A., The Law of Real Property (N.S. W.) p.322. Sydney, 1961. Law Book Co.

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CHAPTER 10 TODAY AND TOMORROW

Dark clouds are gathering over Australia's experiment in land nationalisation. The rosy dawn predicted by its sponsors is beginning to look suspiciously like a sunset. The leasehold system of land tenure has not failed in itself but its operation is being obstructed and destroyed by indifferent administration. It is therefore no mere desire of change for change's sake which provokes this call for reform. Rather it is a firm conviction that if leasehold tenure in Canberra is to survive sweeping changes are imperative. The Purpose Clause

Canberra is a planner's paradise. Nowhere else has the planner the power to control land use as he has in Canberra through the purpose clause of the lease. Nowhere else is there less-provision made for any effective modification of the town plan. The purpose clause can restrict the use to which a piece of land may be put, down to minute particulars e.g. not only may retail sales alone be permitted on a site but the exact sort of goods which may be sold may be specified in the purpose clause. Such detail and such arbitrariness is quite unnecessary. The purpose clause should merely indicate the purpose for which the leased land may be used without too much particularity. It is not unreasonable for the purpose clause to divide residential leases into types ranging from single houses to high rise flats. But if the purpose clause permits a site to be used for retail shopping that is sufficient and it should not specify the nature of the business to be carried on. There is a great danger inherent in the purpose clause in thisfield. For example in a suburban shopping centre the planners may so arrange the purpose clauses that in effect only one butcher, one, greengrocer, or more particularly, one food store is permissible. The result is of course that competition is thereby abolished, a monopoly is given and the quality and cost of service given must be affected. This is not town planning. It is asystem of licensing of business and when the site of such a business is sold what is in effect being sold is not the lease but a monopoly trading right. Such tremendous powers as the planner has through the purpose clause should be used with great restraint or beyond doubt they will in time be curtailed or even abolished. 181

F

F

The same criticism can be made. of the power of the planners when an application is made for a change in the purpose clause. If opposed by the planners that is the absolute end of it - no Court can grant such a change or hear such an application, prerogative writs notwithstanding. This is coming close to tyranny! When the planners of the N.C.D.C. do not oppose the application for a change of purpose the application is heard in the Supreme Court. The applicants and the objectors (of whom there are seldom any) and the planners are all heard, very often with an imposing array of counsel. The Supreme Court is not a town planning authority, Judges are almost certain to be on a par with King O'Malley's railway engineer where town planning is concerned.' The fact is the question to be decided is not a legal question at all and the whole procedure borders on the farcical. If the planners of the N.C.D.C. oppose the application no hearing can take place. The planners should have no such absolute power. They should submit evidence and defend their views in the same way as the applicants and objectors do. There is no need for a Supreme Court hearing. Town planning matters should be heard by a Town Planning Appeal Board. Such a Board might be a body made up of say 5 members - two members chosen for theii special knowledge of land administration and town planning and a Chairman with some knowledge of procedural mattrs as well. The other two members could well be elected members of the Advisory Council appointed by the Council. Democracy must come to Canberra some time. It is time for the town planners to come down from their ivory tower and speak to the man in the streetas well as the Chamber of Commerce. Valuation Problems There are several special difficulties in the valuation of land in Canberra. Firstly, in the case of residential blocks the Commonwealth directly controls the number available for purchase. It can therefore make them relatively scarce or plentiful. This variation in the supply must cause fluctuations in market values - if residential blocks are scarce prices will rise. The level of premiums offered at unrestricted auctions provides some indication of how well the supply is meeting the demand. This is not the only factor influencing premiums but it is a significant one. The Commonwealth can to some degree also affect demand by transferring persons to and from the city. Secondly, the authority who is valuing the land is also the land owner and the receiver of rents and rates based on this valuation. This is, to say the very least, an anomalousi situation. Thirdly, there is no land market in the same sense as there is in a freehold area. Fourthly, nowherej else are land values so markedly affected by town planning decisions. 182

The failure to find a firm value for land valuation has dogged Canberra from the beginning and an air of unreality has always hung around the concept of unimproved value in the Territory. This is evident in the fact that there are two different unimproved values - one for the calculation of land rent and one for rates. This is absurd. There should be one valuation authority independent of all other Commonwealth agencies, answerable to no one except Parliament. There should be a Canberra Valuation Office headed by a Valuer-General and to this office should automatically go information on all land dealings in the Territory whether between private citizens or between the Commonwealth and its lessess. In the final analysis the only basis for valuation is market values and although the Canberra land market is different from that in a freehold area it does nevertheless provide suitable data for valuation. The special circumstances which operate in Canberra such as the vagaries of the purpose clause, the market fluctuation of the supply of land or guarantees by Commonwealth will add to the difficulties of fair valuation. By guarantees are meant such arrangements as the developers of a Civic Centre site knowing in advance that the Commonwealth will sub-lease all the office accommodation in a prospective building thus removing all the risks of investment and partial occupancy. Because of these potent, capricious and sometimes ephemeral factors there., should be proper provision made for appeals against particular valuatioris. This should take the form of an Appeal Board quite independent of Commonwealth influence ) or possibly a Land Valuation Court. It should be written into the definition of unimproved value that it in.cludes such value, added to a block by survey, subdivision and servicing as may be. It is almost incredible that the writing in of this self-evident truth should be thought necessary but the confusion of thought surrounding the administration of the Canberra leasehold system is itself incredible. Rates in Canberra Rates levied on the unimproved value of land are in the words of the late Lord Goshen a rent charge in favour of the community. They are essentiallyno different from the land rent paid for a Crown lease. It could be argued and justly argued therefore that in Canberra if the whole of the annual land value of a block was taken by rent rates would be both qpjustified and unnecessary. In a progressive community and a growing city land values have a constant tendency to rise - the rent however is fixed for n period of time and annually increasing rates could be regarded as a supplementary rent to enable the Commonwealth to collect the full rent in each year. This is of course not tje concept of rates popularly held. They are re garded as a payment for 'municipal services and they are justified on the ground that municipal services add to the value of the land. In Canberra, 183

municipal services to the citizen and the Commonwealth are inextricably entangled. It is not even known what are the costs of the services of which the common citizen is the recipient and it is not known what charges the lessees should pay for those services. It is probably better to abandon entirely the concept of rates which obtains elsewhere and it would clarify thinking on the matter even to abandon the term. If the word rates is retained in Canberra it will inevitably invite comparison with rates in other municipalities where it means something quite different. It is better that the payment for. rates should be linked with and in some way incorporated with land rent. Theoretically and practically it is undesirable to make 2 levies, namely land rent and rates, on the same corpus, i.e. the unimproved value. It is better that the rent should be this one levy. Every lease in the popular mind carries with it the obligation to pay rent and in the popular mind rates are merely a charge for municipal services. The abolition of rent and the retention of rates would seriously weaken and ultimately destroy the whole Canberra leasehold system except as a legal fiction. It would do this the more readily in a community like Canberra where the concept of leasehold is still imperfectly understood - even amongst its administrators.

In Canberra, where theoretically at least the annual rental value of unimproved land should be entirely absorbed by rent, rates are in fact an absurdity. They are also an absurdity in practice. Commonwealth and municipal expenses are so inextricably mixed that it is impossible to separate them without making a series of assumptions which are no more than guesses quite indefensible by any acceptable norms of accountancy. It being impossible to calculate the annual municipal needs, on what basis is the level of rates to be estimated? How much should the citizen pay? In other municipalities the city fathers must face their ratepayers at intervals on the hustings and give account of their stewardship of the ratepayers money. Who is going to face the electors in Canberra? There is only one reason why there are rates in Canberra and that is the tyranny of custom on administrative minds incapable of appreciating the fact that in an exclusively leasehold City the financial methods suitable to freehold areas like Wagga Wagga, Ballarat and Gundagai are totally inapplicable.

Before leaving this question of rates it must be noted that by inteniational standards Australian rating levels are modest to say the very least. They are probably the lowest in the world and Canberra's rates are probably the lowest in Australia. The following table was compiled in New Zealand from data supplied by the American Embassy and the High Commissions of Canada, Australia and the United Kingdom and the New Zealand Statistics Department. The figures are for the year 1963 but there is no reason to suppose the relative position had changed since then. 184

________

Local Taxes on Property as % of all Taxes

Local Taxes on Property as % of G.N.P.

Local Taxes on Property per head of Population

U.S.A.

14.8

3.3

36.6 £ N.Z.

Cnada

16.9

3.7

28.5 £N.Z.

linitedKingdom

12.2

3.5

17.5 £N.Z.

New Zealand

7.8

2.2

12.5 £N.Z.

Australia

6.3

1.4

8.1 £ N.Z.

It will be noted that rates in Australia are the lowest in the English speaking world. That Canberra rates are amongst the lowest in Australia is evidenced by the table showing them in relation to neighbouring towns to other cities of similar size. The following table shows the comparable position in 1969. General Rate General Rate Plus per head of Water Rate per head Population Of Population Hobart

-

$67

Geelong

$36

$61 (est.)

WaggaWagga

$35

$45

Yass

$25

$46

Goulbum

$24

$37

Queanbeyan

$23.50

$47

Canberra

$6.60

$20.60

The reader outside Canberra will conclude from the above table that Canberra rates are absurdly low and that Canberra residents are being handsomely subsidised, by other Australians. The Canberra reader however will point out that land rent is not included in the Canberra total. But why should it be included? Land rent is based on the Commonwealth ownership of land and as presently imposed has no relationship at all to municipal costs. However, even if land rent is added the total payment per head in leasehold Canberra is still only a little more than half the amount paid in rates alone in freehold Hobart and Geelong, both cities of comparable size. The land rent and rates collected in Canberra are about half of what would be collected in rates alone in a comparable urban community.' In other words, Canberra residents are the lucky people within the lucky country. The Canberra resident will protest that retail prices in Canberra are 185

higher than in any other Australian capital city. That is not disputed but it has little if anything to do with rates. These increased prices are verr often the result of an unwise or over-enthusiastic use of the purpose clause to restrict the use of leased land. This has created monopolies or semi-monopolies where none should exist and competition in the market place has been inhibited. Rates however are another matter and few Canberra residents would deny that municipal services are better in Canberra than in nearby Queanbeyan where rates are over twice as high and where about 50% of the City's rating revenue goes in interest payments on previous borrowings. The Premium Premium payments have one great disadvantage - they are a departure from the once accepted principle that no capital outlay was required for a. poor man to become the holder of a Canberra lease and that all the capital he possessed could be put into his building, whether home or workshop. The premium payment has few real advantages. It possibly acts to restrain thoughtless and extravagant bidding. But very often it has been a direct result of a deliberately engineered short supply of building blocks at a time when the demand for them is strongest. Sometimes the short supply is the outcome of administrative bungling çr carelessness - a regular event where separate Governmental agencies are conce'rned with one project. The 20 Year Re-Appraisements The legislation establishing the leasehold system of land tenure in Canberra provoked some discussion as to what the length of the period should be between re-appraisements of unimproved value. It was argued that in a dynamic and growing society where land values tend to rise and the income earning capacity of land to steadily increase frequent re-appraisements were necessary for the Commonwealth to receive a fair and reasonable return. The fact was recognised that if the Commonwealth did not get a fair and equitable return the benefit of increasing land value would go to the lessee and this would lead to trafficking and speculation in leases. In days past it was necessary to make the lease as attractive as possible by leaving the rent at a modest and unaltered level for a long period. Twenty (20) years was fixed upon instead of the 5 years advocated by John Grant in 1924 and the annual re-appraisements he was advocating in 1926-27. It is doubtful if the same justification exists today for such a long period between re-appraisements. This is particularly so in view of the steady depreciation in the value of money which is likely to continue in the foreseeable future. Rents set in 1952 may have been reasonable, but they were low by 1957, cheap by 1962 and peppercorn in 1970; The Commonwealth has been getting a progressively diminishing rent and in effect the lessee is gaining what the Commonwealth is losing. A further reason against the long period between re-appraisements is that there is no mechanism for adjusting the rent in a downward direction if a grave economic depression such as was experienced in 1929-39 should ever 186

occur. Land rent should be much more responsive to economic change, for better or for worse, than it is. In a growing city where land values rise rapidly the increases in rent after a 20 year re-appraisement will always be so tremendous as to constitute a severe strain on the resources of individuals and firms. This will not unnaturally provoke a severe political reaction. Perhaps this does not matter so much in the case of commercial premises or the multi-storey building of-a large corporation like an insurance company. Corporations never die and they are administered by men whose business is largely financial. They know and understand and expect the inevitable large increase in land rent. They budget for it over a time and as the Commonwealth is almost certain to have a sublease of the building its rent as sub-lessee will be increased to cover any increase in land rent or rates it imposes as head lessor. In many cases the men controlling these corporations will be quite familiar with comparable costs in other towns and cities. All of .these factors are modified with residential leases. The rise in land rent would not be so high because the supply and demand for residential leases keep more in harmony. Residential areas can be expanded much more readily to adjust to a rising population and supply and demand can equate more readily than is possible in a commercial, industrial or office area. The constant pressure of monetary inflation however will still operate and rent increases at 20 years intervals can and do cause hardship. The home owner will have to meet this increase from his income whereas the semi-monopolistic situation in the business and industrial area permits some if not all of the rent being passed into the prices of goods and services. These land rent increases, especially if the proof or justification of their size is doubtful and difficult to justify under close scrutiny, will provoke resistance and even in a semi-democratic community such as Canberra they are not politically practicable. Reform Proposals Ideally the land rent should be adjusted annually and it is with this object in view that the following proposals are set out. There is no reason why these proposals could not apply equally well for all leases. Rates in Canberra should be abolished and the land rent remain as the sole payment to the Commonwealth for all leased land. It may be necessary to retain the. water rates at least as an interim measure The object however should be to supply without charge that quantity of water tiecessary for an average household and retain metering and charging only for the type of premises which consume water in excess of that amount. The very existence of a pure water supply instantly available to all blocks adds materially to land value and this should be reflected in the land rent. Other charges, such as the notorious lavatory tax, which surely will take its place in history with King Charles' window tax, should be abolished, although it would be some 187

advantage to keep this one as an enduring monument to administrative ineptitude. The land rent however must be a true and equitable rent taking for the Commonwealth the full rental value of the land. No rent remaining unchanged over a period of 20 years without re-appraisement can possibly do this. There are two principal factors which make this statement true. Firstly there is inflation and secondly the steady rise in the value of land due to the growth of a great city in a young and vigorous nation. It is necessary to consider what are the rights of the lessor and what are the rights of the lessee and what exactly is the lessee entitled to when he fulfills the terms of his lease and pays his annual rent. It should be laid down as a principle that the lessee is entitled to the undisputed occupancy of the leased land and to its exclusive use during the currency of the lease. He is entitled to nothing more or nothing less and in particular he is not entitled to increments in the value of the land accruing over the term of the lease. Presuming that the land steadily increases in value it is therefore essential to protect the just rights or claims of the Commonwealth lessor that the rent should increase at the same proportion and at the same rate. If there is a re-appraisementiafter a long period of years and there has been a steady increment in land value with no corresponding adjustment in rent there will be a large increase in rent when the lease comes up for reappraisement. (This fact in itself is a recognition of the principle that increments in land value are the property of the lessor.) The increased rent will by resented by the lessee to a degree proportional to the amount of the increase. It will be represented as an injustice to the lessee but in reality.it is an injustice to the Commonwealth lessor which has been receiving over the period since last re-appraisement less rent than that to which the value of the land leased entitled it. This injustice is all the more apparent when one considers the factors causing this increase in value (1) the fact of inflation and (2) the factor of real growth in land value. This latter factor is due to increases in population, increases in Commonwealth expenditure in Canberra, increases in community wealth, and, with commercial land, increases in its income earning capacity. It is necessary therefore that the rent should be increased annually by the payment of an Annual Rent Supplement in addition to the annual rent payable throughout the currency of the leases. In the case of the inflation factor this Annual Rent Supplement is necessary merely to keep the real value of the rent paid constant and to prevent an annual fall in the value of rent paid. An official recognition of the depreciation of the value of money is made very unwillingly by Governments which are largely responsible for it. Creeping inflation hasbeen practically universal throughout the Western world during the last 25 years or more and there is no indication that it is likely to cease. Indeed, it is not too much to say that it is a deliberate feature of 188

4

fiscal policy in most countries and is based on the idea that without it full employment would not be possible. This inflation factor has come to be recognised though silently in most contracts extending over a period of years. If it is not recognised and allowed for in leasing contracts it will gravely hamper the equitable operation of any leasehold land system. The inflation factor cannot and must not be ignored in the terms of Canberra leases. If it is ignored it will surely cripple the whole system and make a monkey out of the leasehold tenure. Obviously the longer the term between re-appraisement of rental value the most urgent the necessity that this matter be considered. Money has for years been depreciating at the rate of 3 to 4 per cent per year and the effect has been and must be a reduction in rent paid. In the 5 years 1965-1969 the value of the Australian dollar fell 21170 The only satisfactory way to deal with this situation is by the payment of an Annual Rent Supplement to cover the amount of the depreciation. This is not however the only factor causing the value of the lease to increase from year to year. The. second Vilue increase is due to growth. Canberra is a young city in its early years and one does not need to be a prophet to say with confidence that the population will increase and that trade, business, commerce or wealth will grow in the coming years. Land will become increasingly valuable quite apart from the value addediby depreciation of money. This means that the price of land will reflect 2 factors - inflation and giwth and the increase due to both causes should accrue to the lessor i.e. to the Commonwealth. The principle should be laid down and adhered to in practice in the Australian Capital Territory that the lessee is entitled to undisturbed occupancy and exclusive use but he is not entitled to increments in land value. The only way that this latter right can be secured to the Commonwealth is by an Annual Rent Supplement based upon actual increases in land value. The question ishow can a fair and reasonable assessment be made of what this annual supplement should be? This should be one of the principal functions of the Valuer-General's Office. It is visualised that every transaction in land in the Territory will be automatinally recorded in that office and all particulars of auctions and premiums likewise recorded. This valuation data is all that the land market in Canberra can produce. From this data there should be no particular difficulty in estimating the increases in land value. annually (if any) for every block in Canberra. That there will be increases will be inevitable in any year where depreciation of money occurs. The de preciation factor in the increase could be calculated quite readily from any official Commonwealth economic index— the Consumer Price Index probably being as good as any. Theoretically the rent supplement added year by year should make periodic re-appraisements unnecessary but there would be no harm in retaining the 20 year re-appraisements as a periodic check on the justice of the rent. It cannot be over-emphasised that if the inflation factor continues to be 189

ignored the Canberra leasehold system may survive but it will do so as a legal fiction only. Administration The most important period of Canberra's development as this story has shown was in the days of the Federal Capital Commission. Whatever its defects or limitations - and it had many - it was a vigorous administration with a fine record of accomplishment. Its deficiencies should not be repeated but an attempt should be made to regain to a large degree its one great advantage. It was an all purpose unitary administration and that is what Canberra needs today. It is proposed therefore that the administration of Canberra should be entrusted to a Canberra Corporation to control and administer everything in the Territory excepting housing, education and perhaps police and electricity. It is further proposed that title to all lands within the Territory should be vested in the Corporation. Within the Corporation it is proposed that there should be 3 major divisions, namely:1. Lands and Administration Dhision 2. Development and Works Division 3. Municipal Services Division Lands and Administrative Division The functions proposed for this Division would be to:(a) arrange and conduct the sale of leases, the auctioneer being an employee of the Corporation; (b) receive all land rent and premiums, including land rent paid ; (b) receive all land rent and premiums, including land rent paid by the Territory housing authority on behalf of Commonwealth owned houses and land rent paid by statutory authorities; (c) prepare estimates on which the Annual A.C.T. Vote to finance Commonwealth capital works is based; (d) receive, administer and disburse the Annual Vote; (e) decide on the. purpose clauses to be inserted in leases and engross all leases, urban and rural; (I) administer rural leases and all stock and agricultural functions; (g) administer the staffing and control the finances of the Corporation; (h) receive water rates as long as they exist; 190

(i)

prepare and draft legislation 'for the Territory.

On the legislation aspect the ideal would be for the Corporation to obtain the appointment of experienced draftsmen on its own staff. This however may be somewhat difficult to achieve - tradition dies hard —and as an alternative a sub-office of -the drafting authority should be established within the general framework, of the Corporatibn. Anything less than that would be most unsatisfactory. It is not proposed that the Corporation should have a legislative research branch. The capacity of such branches for spectacular expansion and growth is usually much more obvious than their accomplishments or their success in finding any really necessary function to perform. Development and Works Division The Division, it is proposed, should undertake works for and at the direction of the Commonwealth and carry out certain municipal works. It is suggested that its functions should be:(a)

town planning;

(b)

to advise on purpose clauses in urban leases;

(c)

police the building covenants, purpose clauses and administer the building regulations;

(d)

to carry out all construction works entrusted to the Corporation by the Commonwealth Government;

(e)

to construct roads, footpaths, bridges etc. and service all blocks;

(f)

to carry out municipal works for the city such as (1)

street maintenance and cleaning;

(2)

parks and gardens;

(3)

water works, sewerage, drainage and refuse disposal.

It is quite obvious that as town planning would feature very largely in the activities of this proposed division it would be mostly formed by the present National Capital Development Commission (N.C.D.C.). It is not however recommended that the proposed Corporation should take over or be in any way involved in any Commonwealth housing activity in the Territory excepting of course that it will supply the housing authorities with serviced blocks upon which the houses for rental are to be erected. It is however proposed that all other Territory functions at present carried out by the Department of Works will be taken over by the Corporation - mostly if not entirely by the Development and Works Division. The finances of this Division should come from Corporation revenues and where appropriate from the Annual Vote. 191

Municipal Division The establishment of this Division is not a matter of such urgency norof such immediate necessity as the two divisions discussed above. It is visualised that the functions of this Division would very largely be those at present carried out by the Departments of Health and Interior. They would include the following:(a)

local libraries;

(b)

local health;

(c)

motor registration;

(d)

transport;

(e)

cemeteries;

(f)

baths;

(g)

rubbish collection;

(h)

possibly police but certainly the rest of the multiple functions of local government from dog control to the issuing of sundry licences.

It is proposed that this Division would pay all its receipts into and receive all its finances from Corporation funds. There is no reason why this Division in the fullness of time might not be administrated and controlled by an elected body. This would be an unusual arrangement but then Canberra is an unusual city. It offers a possible solution to aproblem which has hitherto been insoluble in other Federal Capital Cities, such as Washington. D.C. The Territory is bound by Commonwealth wide laws and administrative policies and practices. The proposed Corporation would not change that. But it would mean that the Departments of the Treasury, Works, Interior and Health would have no particular Territory function to perform. The proposed Corporation must be an independent body, completely free of Public Service Board and Departmental control, answerable to Parliament alone,preferably through the Prime Minister but not the Prime Minister's Department. The proposed Canberra Corporation will accomplish many things not being done under present arrangements: 1.

It will give one unitary administration to the Australian Capital Territory (without inter-departmental jealousies) by men giving their total attention and expertise to Canberra and nothing else.

2.

It will enable Canberra's finances to be more efficiently and realistically presented.

3.

It offers a solution to popular participation in local government without intruding on proper Commonwealth interests. 192

-

-4

If the Canberra Corporation proposal were accepted the first and most important question would be the selection of the Chairman. On this selection the success or failure of the Corporation would very largely depend. One of the factors which over the years must have contributed to the Department of the Interior's indifferent land administration was that the Secretary of that Department, the Minister's chief adviser, was not selected because of his knowledge or appreciation of Canberra's unique urban land tenure, or because of his expertise in land law or administration. In fact, he almost certainly had none of these qualifications. The Canberra Corporation would be no improvement at all unless the right man was selected as Chairman and the right man would mean a man with a sound knowledge of land tenure and of land laws generally and of Canberra's leasehold system. A sound background in land administration elsewhere would be a good qualification, particularly if it involved leasehold tenure. Under the proposed Corporation Canberra's administrative costs would come increasingly from land revenue and it is essential that the Chairman have a background in land laws or lands administration. The Canberra leasehold system is governed by legislation much more complex than say a simple statute like the Commonwealth Electoral Act.

The Valuer General's Office There is one function of immense importance in the administration of any comprehensive system of land tenure and that is land valuation. The peculiar difficulty of land valuation in a completely leasehold area has already been referred to. The inherent difficulty in the lessor being his own valuer was brought to notice in a dramatic way by the High Court of Australia in a recent judgement on the re-appraisement of unimproved value. This case - Esmonds Motors Pty. Ltd. v. Nixon - underlines the necessity for completely new procedures in the method of re-appraisements. The Court held that it was contrary to law for the Minister to nominate himself as the prescribed authority to re-appraise the land value during the 20th year of a lease and to then delegate his authority to an officer of the Commonwealth. This legal obstacle could be readily removed by at most a minor amendment to the City Area Leases Ordinance. But that is just not good enough. It is contrary to natural justice that the lessor should have such overriding authority in arriving at a new basis for the re-appraisement of value. It is suggested therefore that the office of a Canberra Valuer-General should be established and although he must of necessity be appointed by the Commonwealth his office must be completely divorced from the administrative structure of the proposed Corporation. He must be, in relation to the citizen and the Commonwealth, in a position of separateness, similar to that of members of the judiciary. He must be answerable to no one except Parliament, in the same way as the Auditor-General. The duties proposed for 193

the Valuer-General would be to carry out all the valuations necessary for the Commonwealth and for the Corporation or such other bodies as statute may direct or permit. As mentioned previously there should be machinery for appeals against valuation to an Appeals Board or to a Valuation Court. Advisory Council

A further problem of administration in Canberra which must be tackled with resolution and some originality is the part to be played by the citizens of Canberra in their own government and the administration of those affairs which affect their lives intimately. No people who speak the English tongue can long remain content under an administration in which they play no effective part and no administration can govern such a people unless the arrangements are such as to make them sensitive to and responsive to their needs and opinions. No men of ability would wish to sit on a body which has no authority, prestige, function or power.. The Advisory Council, although an earnest attempt to fulfill the need for citizen participation, has not been a conspicuous success. To many Canberra citizens the Advisory Council is and has always been a joke. There are however a number of ways in which the problem might be attacked. It has been suggested above that the Municipal Division of the Corporation might be administered and controlled by an elective body. There are citizens in Canberra of distinction and ability who could undoubtedly be members of such a body. The creation of the Division, its staffing, organisation and accommodation could be a challenge to the community but there is no absolute reason why it could not be done and why it could not be done successfully. An alternative might be for a reconstituted Council known simply as the Canberra Council, or perhaps the Canberra Citizen's Council, to be elected,nd for the Council to appoint members to attend, with rights of speech and voting where such are appropriate, meetings of the Division Boards or even the Corporation itself. If the new Advisory Council or whatever name it may be called - and a change of name is strongly recommended - becomes a useful, respected and necessary component of the administration its Chairman would be the natural spokesman and representative of the citizens of Canberra on public and official occasions. He could perhaps receive the title of Mayor and could be elected either by the C.oundil itself or preferably by a direct vote of the people. Whatever reforms are carried out in the administration of Canberra it is still two things - a federal capital and a home for over 130,000 Australians. The City has been created by the Commonwealth and its destiny will always be intimately effected by Commonwealth policies. To call into being a great 194 .

national capital in what was practically a wilderness has been a unique and stupendous task. The Sub-leasing Scandal Among the administrative policies followed to promote development in the central city area has been that of encouraging large financial corporations to obtain leases and erect multi-storey office buildings by the inducement that these buildings would be leased by the Commonwealth for Commonwealth purposes viz, office accommodation for Departments. The corporations involved are mostly the same ones which once rejected Canberra leases as having no security value. One effect of the removal of the commercial risk in these investments has of course been high premiums for Civic Centre blocks which in turn results in inflated land values generally within and without the Civic Centre area. These higher land values may be thought to be to the Commonwealth's benefit but in this instance the benefits are not obvious unless it is to obtain more money with which to pay the increased office rentals which also follow.

The fact is that today more Commonwealth money is dissipated in paying for accommodation in Canberra thanis collected in land rent from the this of whole of the Territory. As new suburbs are opened the Commonwealth grants business purpose leases for a handsome premium and then proceeds to take a sub-lease over one of the buildings erected thereon in order to establish a Post Office. The whole policy or practice is of course quite absurd. It will be recalled that one of the great arguments for the transfer of the Seat of Government from Melbourne was the enormous saving in office rental which would result from the Commonwealth building, owning and occupying its own offices. It is high time that a policy designed to realise this end was vigorously instituted. The quick action solution would be for the Commonwealth to compulsorally purchase all the high rise office accommodation it holds on sub-lease in Civic Centre and commence building its own Post Offices. This would be the simplest solution. An alternative solution would be for the Commonwealth Government to plan a building programme which would transfer its Departments into its own offices. If this was done quickly Civic Centre would almost certainly resemble a deserted village or a ghost town. It may therefore be argued that Commonwealth should do this at a pace calculated so that the vacated premises could be taken up by private enterprise. Some may claim that the erection of one Commonwealth Office Block per annum would achieve the transfer objective within a few years. Of course such a building programme would be a very real stimulus to Canberra's growth. It would generate more land rent for the Canberra Corporation and it would be a sound investment for the Commonwealth Government. It would be an historical objective achieved. 195

In Canberra's early days when population was smaller many considered it to be a defensible policy to rent office accommodation for government Departments. It primed the pump. It caused buildings to be' erected in Civic Centre. It made Canberra grow. But the pump needs no priming now. Canberra is moving. It is a growing city and the practice of feather bedding wealthy investors and corporations is nothing short of a national scandal. It must be a primary objective of Commonwealth policy to put an end to this dissipation of public moneys. As noted previously the Commonwealth and its instrumentalities pay more for office rental accommodation in Canberra than the Commonwealth receives by way of land rent from the whole of the Territory. It is most probable that more Commonwealth money has been spent in Canberra since 1928 for office accommodation than the Commonwealth has received as land rent - right back to the first lease in 19 11 ! This disgraceful state of affairs must be finished quickly. It is not recommended that the proposed Canberra Corporation should be involved in or concerned with these sub-leasing arrangements. The Development and Works Division would of course be directly concerned if a decision was made that the Commonwealth should move into its own office buildings. This Division would then be charged with the responsibility of planning and constructing these Offices. Urban Re-development The first point to be made on this question, and it must be made most emphatically, is that the town planners should be years ahead of the private developers in ideas on re-development. The initiative in redevelopment must be taken by the town planners and not left to the whim of private developers. It is proposed therefore that the town planning authorities with the Corporation should designate on the town plan areas of re-development or urban renewal wherein re-development is likely to be necessary within 20 years. These areas should be clearly indicated on the town plan. They should be more than architect's models or dreams of what the area will be in the future. The plans should be readily available for inspection by the public. They should -be displayed in a public place and all lessees within these areas should be notified that they are within an area of urban renewal. At the expiration of leases within this area it is proposed that they should not be renewed and it is further proposed that the Canberra Corporation should have the right of pre-emption over all leases within any urban renewal area. The Commonwealth's power of compulsory acquisition should be used in these areas if, and only if, the re-development to be undertaken is re-development by or on behalf of the Commonwealth. Upon the exercise of the right of pre-emption by the Corporation it is proposed that the Corporation should re-service the land, clear it and offer it for lease. 196

The Territory

The Territory for the Seat of Government is too small. Its boundaries should be re-drawn so as to include Queanbeyan. But that alone is not enough. The Shire of Yarrowlumla (which includes Captains Flat, Bungendore and Michelago) Lake George, Jeir, Gundaroo, Gunning, Murrumbateman, Tarago and Collector must also lie within its boundaries. The area proposed to be added to the 900 square mile Territory would be about 400 square miles. One of the most grevious of the many grievous mistakes and examples of shortsightedness associated with the Australian Capital Territory was the exclusion of Queanbeyan from within its boundaries. As noted in an earlier Chapter Queanbeyan and Captain's Flat were within the federal area recommended to the Commonwealth Government following District Surveyor C. R. Scrivener's report. They were not however within the area the New South Wales Premier of 1909 agreed to surrender. The Commonwealth anxiety to obtain a territory of its own and its disinclination to continue fighting with the New South Wales Government and Parliament over the size and location of that territory probably explains their exclusion. Time has shown the exclusion of Queanbeyan to have been a major blunder and this blunder must be remedied immediately. Canberra has spilled over the Territory borders. The Commonwealth is now actually renting office space in Queanbeyan to accommodate one of its Canberra based Departments. The growth of Queànbeyan has been and will continue to be rapid. Real estate values largely if not entirely influenced by Commonwealth expenditure in nearby Canberra are rising rapidly. Thousands of Canberra employees - private and government reside in Queanbeyan. The years have shown the fears expressed in 1901 to the First Parliament by Senator Staniforth Smith to have been very real. The words he used when warning against a small federal territory are rather Appropriate today. He said: land grabbers, syndicates and speculators - will rush over to buy all the land around with the idea of form ing suburbs for people to dwell in. The consequence will be that the people of the Capital instead of living within the Federal Territory, will live in suburbs belonging to private people and' the immense revenue the Commonwealth should receive as ground landlord will go into the pockets of the speculators. 4 Let no one of this generation who would accuse any politicians of an earlier generation of being shortsighted or obstructive when they excluded Queanbeyan from the federal territory do so without demanding immediate remedial action from the new breed. The satellite cities for Canberra planned by the National Capital Development Commission will in some instances involve building close to the Territory borders and the possibility of urban development by others immediately outside the Territory in the Goodradigbee, Gunning and 197

Yarrowlumla Shires is very real. It is therefore imperative that the additional areas mentioned above should be incorporated within the Territory. When this is done the Territory residents may be saved the unedifying experience of reading in Canberra newspapers of plans for gracious living blocks near the Territory borders to accommodate Canberra's public servant gentleman farmers looking for a way to dodge taxation. Or of how land developen were all busily engaged obtaining the ownership of freehold land in the vicinity of the border. Among the many motives implied is that these purchases are a prelude to subdivision and an ultimate lucrative turnover. The Territory is in the process of being surrounded by Environas. Future generations will have cause to curse the memory of the Commonwealth Parliament unless it acts resolutely to protect the larger public interest. The law must bridle the corroding appetite for unjust enrichment. The late J. R. FraserM.P. warned of these developments. He saw it thus:-

I hope the Federal Government will realise the danger that will continue if the boundaries of the Territory are not protected. Land developers are astute. They can be utterly ruthless and overpowering in their questfor quick millions.' It is proposed that all the land in the enlarged Territory should be acquired by the Commonwealth forthwith and that the 95,000 acres freehold remaining in the existing Territory should also be acquired immediately. The cost for the 95,000 acres will probably amount to $20 million. Had this land been acquired with that acquired in the 1912-1920 period it would have been obtained for about £300,000. Let not the same injustice be perpetrated in the enlarged Territory. To acquire all the land in the areas mentioned would probably cost the Commonwealth in the vicinity of $300 million. This land should be acquired as soon as the additional Territory is surrendered by New South Wales. A special grant to the State - call it a severance grant - would possibly hasten the State's agreement to surrender. Conclusions

Canberra is ayoung but decadent city proclaimed J. E. Ogden (Tas. Non Lab.) to the Senate on 20 September, 1928 but, he added it will never be anything under leasehold. The place is dead. Time has belied the prophecy. Canberra is alive and growing and its planned growth stands as proof of what could have been done in other Australian cities had a system of leasehold tenure operated there. But it did not operate elsewhere and the result has been that the prohibitive costs involved in compensation for land have ensured that most of the planners'l dreams in other cities have never even left the drawing board or ever will. The Territory for the Seat of Government has not however been the laboratory for social progress, the incubator for radical political thought and legislation which many dreamed it would become. The scope for radical re198

4

form is great, the need for it is even greater, but the demand for it, alas, is feeble. The experiment in land nationalisation is Canberra's sole distinctive radical innovation. Today even that is threatened with extinction. The Canberra leasehold system has not failed. Its own inherrent strength and wisdom and justice has carried it through years of political neglect and indifferent administration but wisdom and justice alone are not enough. The basic or fundamental principles of leasehold - moral, political, social, economic, legal and administrative - must be restated, or for that matter, in the Canberra context, they must be stated for the first time. The Canberra leasehold system must not be a victim of administrative ineptitude and political indifference. It can survive if, but only if, sweeping reforms are implemented.

im

NOTES ON CHAPTER 10 I.

See page 4l.

2.

See Second article Does Canberra Pay Its Way by Peter Harrison, A.N.U. Urban Research Unit, Research School of Social Sciences, in The Canberra Times, 17 September, 1970.

3.

International Financial Statistics, August, 1970. Published by the (I.M.F.) International Monetary Fund.

4

P.D. 2:1785.

5.

Extract from Keeping in Touch Telecast 23 May, 1969.

199

CHAPTER 7

THE YEARS OF DEPRESSION AND WAR 1929-1945

The result of the election held on 12 October, 1929 was a landslide to Labor. Five Ministers of the outgoing Government lost their seats, including the Prime Minister, Bruce. Labor won 46 of the 75 seats. Since there was no* Senate election the party line-up in the Chamber created ostensibly to protect State interests, but designed also to stifle the expression of the popular will, remained the same las at the end of the 11th Parliament - non-Labor 29, Labor 7. Few Australian Governments have assumed office with such widespread public support and acclaim as the Labor Government led by James Henry Scullin which was sworn in on 22 October, 1929 and fewer Australian Governments have lost that support so rapidly and so completely. The Government's failure was its lack of political courage. Faced with a strong and hostile Senate majority it ignored the warning that it should choose an issue early in 1930 and go to the country on a double dissolution' or more to the point it failed to take immediate action to abolish the Senate. It chose instead to stay in office and accommodate itself to accepting the mangled versions of its policy salvaged from the conservative attack in the Senate. In a period when Australia was suffering the miseries of the world wide economic depression such a Government could not survive long and it broke into factional dissarray some time before the electors swept it into history at the end of 1931. The Labor victory hastened the execution of the changes proposed in Canberra by the outgoing Government. With the suspension of expenditure of new developmental works at Canberra 2 the Commission's prime role as a construction authority was finished and Bruce had informed Parliament of Butters' resignation and of the arrangements being made to continue the Commission for a further 12 months during which consideration could be given to a more permanent form of control. 3 Bruce was moving slowly towards the abolition of the Commission and a return to Departmental control. The Commission had sought and obtained the services of A.J. Christie from 131

the Post-Master General's Department to supervise the winding up which had begun in July 1929, with a sweeping retrenchment of architects, accountants and engineers. 4 Bruce informed Parliament of his Government's intention to appoint Christie as Chief Commissioner for the 12 month period and J.S. Murdoch, Director General of Works, as Commissioner in place of retiring Commissioner B. Crosbie Gould. The changes and appointments were not effected before the Government was defeated but Labor's Minister for Home Affairs, Arthur Blakeley, promptly declared his Government's intention of abolishing the Commission in 6 months and re-establishing Departmental control. He also announced the appointment of Messrs. Christie and Murdoch for the 6 months term beginning on 2 November, 1929. The most immediate effect Labor's victory had in Canberra was undoubtedly the pronounced interest in the party itself which soon became evident. All efforts to form a branch of the A.L.P. during the previous years had failed for want of a quorum. But now the attitude changed. About 300 men attended the inaugural meeting held in November, 1929. Such a sudden mass conversion or display of interest not unnaturally provoked suspicions, it being reported before the meeting that precautions would be taken to prevent men from joining the Branch to see what they could get out of it. Particular attention will be paid to the bona fides of persons desirous of being elected to the executive. The after-meeting report does not describe the precautions taken or the degree of success claimed or the degree actually attained. Like many new Ministers Blakeley seems to have commenced with the open door approach. In the first 6 or 7 months of his Ministry he received innumerable deputations from local interests. The City Area Lessees Association sent a deputation to complain about the rating of leaseholds on a freehold basis and the Rural Lessees Association sent a deputation, including J.T. Goodwin, to request an Advisory Board to cover rural lease problems. Goodwin insisted that the duties of this Board should include and cover every facet of rural land administration. Blakeley told the deputations that all the lessees in the Territory could expect sympathetic treatment from the Ministry and he promised to put their views before the Cabinet.' The next deputation was from the Federal Territory Citizens League, a body claiming to be representative of many interests in the Territory. It was led by League President J.S. Crapp. The deputation submitted a resolution calling for a local government authority consisting of 2 executive officers, two members appointed by the Government and three elected members one of whom was to be elected by residents outside the City Area. 7 The deputation suggested to the Minister that in addition to the powers properly vested in local governing bodies the local government authority in the Territory should have full power to promulgate its own Ordinances and control those services usually entrusted to the State Government instrumentalities, and control the valuation and rating of lands, promotion and super132

vision of services and the revenue therefrom. The claim was that the debt incurred up to May, 1927 and the accumulated interest thereon plus any expenditure subsequent to that time not represented by tangible assets necessary to meet the existing needs of the citizens should not be the responsibility of the local governing authority. The suggestions embodied in the resolution were explained by C. Francis who contended that there should be a line of demarcation between those matters which were purely local and those which were of a national character and of the expenditure upon them. The National Parliament should not be burdened with the discussion of local matters. Citizens felt that they had the right to a local governing authority in which all proposed Ordinances could be debated in the same way as Bills were debated in Parliament. Blakeley promised a local governing body truly representative of the residents of Canberra but he did not think the time had yet come when the whole control of the Territory should be handed over to such a body. The Minister is not reported as having specifically mentioned an Advisory Council on this occasion although an advisory body of one sort or another was being canvassed from 1928 onwards, the year non-Labor members generally grew tired of the Federal Capital Commission. A deputation from the City Area Lessees Association was back with the Minister in February, 1930 this time requesting that the 20 year reappraisement be extended to 50 years. 9 This, it was contended, would encourage business solidity and assist the leaseholders in obtaining financial help. The deputation claimed that legal opinion had been given that under the existing law not only the land but all improvements and buildings erected thereon would revert to the Crown at the end of 99 years. This, it was stated, had never been intended and the Minister was asked to have the law amended so that at the end of the 99 years the tenant should have rights over buildings and improvements and the option of a renewal of the lease. The Minister was also asked to take all steps possible to make leasehold property in the Territory authorised security for the investment of trust funds. In regard to the determination of the fair rateable value of leasehold property in the Territory the deputation condemned the then operating system of assessing leasehold on the unimproved freehold value and expressed the opinion that the fair rateable value of land in the City Area on a leasehold basis was 50 per cent of the freehold value as determined from time to time. It was suggested, however, as a reasonable compromise,that the assessed value of the leasehold property should be the value on a freehold basis, less 40 per cent. Blakeley undertook to place the Association's views before Cabinet and a few days later he announced the Government did not approve the 50 year re-appraisement period or assessment on a freehold basis less 40 per cent for rating purposes. The Government had decided, however, to grant tenant 133

H

right in improvements at the end of 99 years and to provide, subject to there being no legal obstacle, for leases to be made authorised trustee investments. No legislation came forward during the time of the Scullin Government to implement the tenant right policy but the Government did however amend the Rates Ordinance in 1931, along the general lines advocated by the Association. Henceforth, if in determining land value for rating purposes the freehold value of any land outside the Territory was taken into account, regard was to be had to the difference of tenure. Meanwhile, the Third Commissioner, Dr. Alcorn, who had resigned his office as a protest against the decision to validate the kerb and guttering charges by legislation,' 0 - Blakeley refused to accept the resignation' ' was demanding that Parliament House be rated to make up the rates deficiency in Canberra.' 2 (The legislation validating the kerb and guttering charges never eventuated). The Doctor then turned to the advocacy of an art union - on the style of the Queensland Golden Casket - to get money to meet the Capital City debts.

Iquite recognise said Alcorn that objection will be raised on the grounds that an art union is merely a gamble but I do not think that that is a real objection in view of the fact that since its inception Canberra has been a gamble of the worst possible kind, and has paid no dividends to its shareholders. 13 Blakeley rejected the idea. The absence or indisposition of Dr. Alcorn in January, 1930 called for an. acting Third Commissioner. C.W. Davies filled the role and took the opportunity to criticise the Commission for its failure to appoint the Appeals Board provided for in the City Area Leases Ordinance. (The Board could not of course have had any appeals to hear until 1944, the year the first reappraisements were due). Davies spoke of the many surrendered leases and of the high rentals in Civic Centre paid by lessees,the slaves of the Commission. A few days later he issued a statement protesting against the proposed conversion of the Hotel Acton into office accommodation for Patents and Statistics. Davies maintained that close contact between Departments should be preserved as far as possible and that available office space at Civic Centre should be used before going further afield. He pointed out that the previous Government had taken over buildings from Civic Centre lessees who could not find tenants for their expensive premises and this policy, he thought, should be continued to relieve

owners of the buildings from the plight into which they were forced by the Federal Capital Commission. 14 When the Commission offered Civic Centre leases for auction in 1926 it required the successful bidders to begin building within seven months and lessees were hurried into erecting elaborate buildings only to find in many cases that there was no possibility of finding tenants. Some of the buildings erected had been wholly or partly vacant for 2 or 3 years. 134

L_

The opposition by the acting Third Commissioner to the leasehold tenure and his problem in understanding why lessees were required to commence building within a specified time were well known. His statement on this occasion was of course too tendentious to be taken seriously. The elaborate buildings at Civic Centre were designed before the Commission was even appointed and each lessee had covenanted to commence building within a specified time and to build in accordance with the design. The Commission's failings may have been many or few but they certainly fell short of causing the grave and deep economic slump which was sweeping Australia, together with the rest of the world, wreaking its vengeance on the prudent and imprudent investor alike. Whether the Scullin Government actually agreed with the specious argument advanced by Davies in support of renting additional private premises as Departmental offices is not known. But what is known is that the practice was condemned in 1930 by D.C. McGrath, then the Labor member for Ballaarat. McGrath urged the Minister to remove Government offices out Cancel the lease of rented buildings into vacant Government buildings.' he demanded only to be met with Blakeley's reply that the lease could not be terminated until 1933. The principal beneficiary (if not the only beneficiary in 1930) of the policy of using-rented buildings for Departmental offices was none other than the arch opponent of Canberra's leasehold tenure, Senator H.E. Elliott. The Commonwealth was paying 13000 per annum for the rental of Elliott's Lariston Chambers building in Civic Centre and using it to accommodate a Post Office and the Superannuation Board. The arranging of this office accommodation was declared to be a function of the Department of Works and the Commission played no part in it.' 6 The £5000 ($10,000) paid to Elliott's private company in 1930 as office rental was almost certainly equal to the total land rent collected by the Commonwealth in that year from City Area and rural lessees combined. The year was one of surrenders and of determinations. Blakeley determined numerous rural leases for non-payment of rent, the lessees having failed to respond to repeated opportunities and invitations to submit proposals for the liquidation of their indebtedness.' . All of this was happening as the Commonwealth was being invited to rent more buildings from private enterprise for office accommodation and leave its own buildings vacant. The whole concept of the Capital City as originally envisaged and of its land tenure was thus being thwarted almost from its inception, On 21 January, 1930 Blakeley announced that the Government had decided to amend the City Area Leases Ordinance to provide that the successful bidder or applicant for a lease would pay in cash a sum representing the difference between the reserve value and the unimproved capital value of the land as offered by the successful bidder or placed on it by the successful applicant. A draft Ordinancç giving effect to the Government's decision was said to be in course of preparation. (This amendment, which would have initiated the premium, did not eventuate until much later). On the same day it was announced from the recently established Registry of Births, Deaths and

135

Marriages that Mr. and Mrs. Arthur Bowtell of Bombala were the first couple to have their marriage registered in the Territory for the Seat of Government and that the first birth registered had been that of Isobel Joyce Hollins of Forrest who was born on 2 January, 1930. The Seat of Government (Administration) Act 1930 abolished the Federal Capital Commission as from 1 May, 1930 and Canberra returned to Departmental control. Henceforth public servants who had found the Commission fair game to be taken on, criticised and attacked at will and at whim lapsed into silence. The Advisory Council Ordinance 1930 provided for a Council to advise the Minister in relation to any matter affecting the Territory including the making of new Ordinances or the repeal or the amendment of existing Ordinances. The Council Was to be made up of 4 senior public servants occupying designated offices and 3 residents of the Territory elected for a period of 12 months on an adult franchise with the Territory voting as one electorate. Not all people welcomed the Advisory Council. As soon as it was mooted Senator Pearce announced his intention to move a motion to disallow the Ordinance. To him the Council was a mere nothing, it had no executive power and it was not self-government. When the Ordinance came up for discussion many Senators agreed with Pearce but they also agreed with the view that an Advisory Council was at least an improvement on the form of government by Commission under which Canberra had been labouring and suffering for many years. 18 But it was Government leader, J.J. Daly, who persuaded Pearce to withdraw his motion. Daly invited Pearce to regard the Advisory Council as a transitional measure only, created with the hope that at the end of 12 months greater civic responsibility could be granted to the people. Perhaps in withdrawing his motion Pearce took notice of developments in Canberra. The local groups opposed to the establishment of a mere advisory body booked the Albert Hall for a mammoth public protest meeting. The publicity given to this meeting was extensive and preparations were made for a large gathering. But only 19 people bothered to attend.' 9 Canberra had lost interest in self-government, and according to many cynics the loss was permanent. The first Advisory Council election was held on 19 May, 1930 when 13 candidates offered themselves for election. The results of the primary count were: Bray, A. J. Deans, John Evan, G. Gell, F. Goodwin, J.T. Hammond, W.P. 136

29 78 155 763 203 393

Henderson, G. E. (Mrs.) 244 Johnston, Henry 213 Marriott, L. Rowe, Roy 609 488 Shakespeare, T. M. Sharkey, Daniel 365 Woodger, W. G. 593 On the final count Messrs. Shakespeare, Gel! and Rowe were declared elected. Shakespeare was the Editor-Proprietor of The Canberra Times, Gell had been prominent in the Public Service (Canberra) Welfare Association which seems to have become moribund by 1930 and Roy Rowe was the returned soldiers candidate. The recently formed A.L.P. Branch fielded 3 candidates, Messrs. Hammond, Marriott and Sharkey amid loud protestations that there was no place for party politics in local government. Commenting on the election result The Canberra Times reported—a feature of the election was the repudia-

tion by Canberra people of the attempt to introduce party politics by the Canberra Branch of theA.L.F. Mr. Commissioner B. Crosbie Gould spoke of Canberra on the occasion of his retirement. He saw it as likely to be practically self-supporting in 25 years and contended that in 1928 there had been a 214 per cent return on the money expended on development work at Canberra. The retiring Commissioner also referred to the many suggestions being made as to the future government of Canberra. Words such as these may have brought comfort to some people inside Canberra, but outside the chilly winds of economic depression were being felt and the campaigns to abandon Canberra, to scrap it as a failure grew stronger and stronger. 20 Let national economy begin at Canberra became a rallying call. From Hobart the Australian Women's National League issued a call to scrap the city. The climate was said to be atrocious and the League contended that the great joy and happiness in trains coming away from Canberra proved that nobody liked to be there, But Scullin met a deputation of Canberra residents in February, 1931 and assured them his Government was not scrapping anything but that it must overcome other troubles first.' 1 The other troubles were those arising from the economic depression sweeping the world. In Australia, with a total population of 6 million, many hundreds of thousands or, about 30 per cent of the work force were unemployed and a similar number were on reduced wages,restricted hours of employment and threatened with unemployment. Here was one of those periods in the history of mankind when a feeling of helplessness took over even the most optimistic spirit flickered like a flame without air. Some Governments turned to the bankers and economists of the period for advice. The Scullin Government in Australia was one example. It sought to ease the 137

effects of the depression by applying the anti-cure measures advocated by orthodox economists. It was as though a slow poison was being administered to the patient. No other discipline (if indeed economic theories merit such a description) has ever caused and prolonged such widespread human misery as did the orthodox economic advice at that period. In Australia recovery was made in spite of the bankers and economists, but it was a slow and painful process,far from complete when war broke out in 1939. The central theme of the message of salvation preached by the economists during most of this period was that all Government expenditure should be reduced and no additional activities which necessitated new expenditure should be commenced. The call was for a stringent national economy campaign to stave off inflation! Not unexpectedly the Australian public demanded that the economy campaign should begin at Canberra. And begin at Canberra it did! The last year of the Bruce-Page Government had seen large scale developmental or constructional work at Canberra grinding to a halt, and the almost complete stop came in the first year of the Scullin Government. For the next 20 years large scale developmental or constructional work at Canberra remained mostly a dream of the future. During the 19 30's labour and materials were in abundance but the Government, acting on the advice of the economists, refused to take advantage of them. Today it is widely accepted that any drastic reduction in private employment should be followed closely by increased Governmental activity to take up the unemployed and the demands for goods and services thus created will recharge private industry. The idea in the 1930's was the exact opposite. As private industry contracted so did Government activity - public servants dismissed and all salaries reduced. All of this was to stave off inflation! There were some notable exceptions to Government inactivity at Canberra during this period. The Federal Highway from Goulburn to Canberra and a good road to Yass were completed and stood as an indication of what could have been done. Another exception was the Manuka Swimming Pool. Probably the only building work of any magnitude undertaken at Canberra by the Scullin Government, 'the Manuka Baths, as they were dubbed, provoked a hostile reaction which today makes amusing yet tragic reading. All around Australia the Manuka baths were denounced as an extravaganza22 , as an example of the Government's waste and ineptitude. Financial editors and economists generally emphasised the need to close every avenue of Government expenditure to avert the possibility of inflation! The editorial writers claimed such works as the Manuka Baths were undertaken for the sake of winning popularity by creating artificial employment. The Government was not unmoved by the press campaign. The pool, originally planned to be of Olympic size, was to be reduced in size and then a further reduction was under consideration. But Arthur Blakeley, Union Secretary-cum-Minister had had 138

enough and the pool was constructed 100 feet length 40 feet width. There is little doubt that but for Blakeley's intervention the Manuka pool would have finished up about the size of a bathtub. The Manuka pool was opened on 26 January, 1931. Civic Administrator C.S. Daley reminded the gathering that it was to the public spirit of the Minister that the people of Canberra owed the construction of the baths. Blakeley, who had taken up residence in Canberra some time before becoming Minister, deplored the crusade of hate against Canberra, the scrap Canberra campaigns being worked up around Australia and reminded his audience that if we go to Sydney or Melbourne we would have to pay. The charges against the Scullin Government that it would wreck the entire economic framework of Australia if it persisted with the construction of a swimming pool at Canberra were mild in comparison with the attacks which followed the leakage of information from London that Scullin, who had gone there, was advising the King on the appointment of a new Governor-General in terms which permitted the King no choice. Chief Justice Isaac Isaacs, an Australian, was Scullin's choice and Scullin insisted on his appointment, a circumstance which was reported to have greatly displeased George V. The protests from Australia's true blue imperialists were intense .2 3 A gesture which is more suited to Irish irreconcilables than to Australian statesmen snorted The Argus 24 whilst The Sydney Morning Herald thundered against an Australian being appointed as Governor-General; . . our sentiment for and ties to Britain are too strong. 2S Isaac Isaacs was appointed. The finding of solutions to Canberra's problems was a favourite playground for letter writers. Sell the freehold, institute a Town Council elected by ratepayers and let the Government wipe their hands of the white elephant declared one writer who maintained that Canberra should. be left to private enterprise and the money gained from the sale of freehold would in time return to the taxpayers the £12 million invested. 26 Meanwhile in the Advisory Council elected members T.M. Shakespeare and F.K. Gell had persuaded the Council to agree to a recommendation appointing a sub-committee to consider and report on the details of land valuation in the Territory. 27 Shakespeare and Gell both condemned the existing high valuations as being one of the main factors retarding the Territoiy. The public now took a hand. At a meeting attended by between 300 and 400 residents strong protests were voiced against the failure of the Government to complete the transfer of Departments to Canberra. 2 8 It was claimed that one result of the decision not to transfer the Patents Office was that many houses that had been erected for the accommodation of.departmental officers would remain empty instead of being let and producing revenue. E. Arbuckle declared that if the Government would not carry out the undertakings it had given it should come to the assistance of business people of Canberra nine tenths of whom were losing money and facing ruin. 139

Other residents sought the granting of additional funds for relief work and the honouring of the promises given at the land sales in 1924 by granting residents relief from the payment of ground rents. The promises alleged to have been given at that sale in 1924 seem inexhaustible! Advisory Councillor Shakespeare continued the criticism of the Government for its failure to transfer Departments .29 On the question of rates and rents he told the Council: matters could not remain as they are and the people of Canberra were almost driven to desperation - civil disobedience is beginning to break out - it will come and when it comes it will come in an ugly form. Shakespeare's strong language excited considerable attention and he apparently thought fit to water it down a bit at the following Council meeting. He explained his words civil disobedience as being meant as a warning that a state of affairs was possible in Canberra alien to the strictly legal sense of civil disobedience but which might also be expressed by the words legal resistance. Shakespeare assured the Council that what he advocated had nothing in common with any brand of civil disobedience. At the last Advisory Council meeting for 1930 Shakespeare moved a motion urging a review of the conditioNs of minor industrial leases. 3° He contended that owing to the restrictions imposed on lessees, confining one industry to one block, the compulsory building clause and the restriction of the number of employees to 25, people were unwilling to invest in Canberra. As a result Public Servants suffered a grave injustice because there was no prospect of employment for their children. Another result was that the business people of Canberra got most of their supplies from Sydney. He knew a number of people willing to start industries in the Territory if the restrictions were removed. If we can get a fair go he added, I can guarantee that new industries will be established, giving employment to 100 people. Rowe, who seconded the motion, said that if private enterprise was to be encouraged, the Government must be prepared to make the conditions of the leases less stringent. C.S. Daley the Civic Administrator explained that the lease conditions were framed in conformity with the planning of the city. Any relaxing of the provisions would result in overcrowding which would subvert the general principles laid down by the planners. Gougard: Have not conditions changed since the city was planned? Daley:

I do not think there should be any compromise on questions of principle. According to the plan an industrial area is provided as distinct from the 'minor industrial area' and if it is desired to establish large industries there would be little difficulty.

At the end of 1930 there were 1494 houses in the Territory, 1154 of which were Government built and owned. Of the total houses, 1300 140

were in the City Area and 194 in the rural area. The Territory populatiofl at this time was approximately 5200. Population figures were considered uncertain because each time the Government announced relief work for Canberra's growing unemployed hundreds of unemployed from other parts would converge on Canberra. In the result, Christmas 1930 was a time of great distress in the National Capital as indeed it was in all parts of Australia. The publicity given by Sydney and Melbourne newspapers to the proceedings at Advisory Council meetings during 1930-31 is interesting. Perhaps news material was scarce and Advisory Council proceedings usually contained what was considered to be a story. If Signor Mussolini desired a consulate in the Federal Capital let him ask the Italian community around Innisfail to meet the cost said Shakespeare in opposition to elected Councillor Rowe's motion that land be offered for the building of consulates. 3 1 Rowe saw this as a method of encouraging growth in Canberra. To Shakespeare the vision was different. . . . many residents of Canberra would object to seeing a fag they had last seen on the other side of 'No Man's Land' floating over Canberra as a special concession to foreign nations. . . . The cold fact that no foreign country was in the least interested in having any establishment whatever in Canberra in those days was apparently immaterial! But the establishment of the Advisory Council had not silenced all demands for self-government. Dr. Alcorn, the Third Commissioner, had written a caustic letter to Blakeley in reply to the Government's expression of appreciation of his services. In his letter Alcorn wrote I am grateful that the serious inconvenience to my professional work, the mental strain, and the financial loss associated with the holding of the office has been recognised. I must, however, take the opportunity of expressing my sense of failure and my deep regret that the conduct of my office has not engendered in the minds of the members of the Government sufficient confidence in the integrity and mental ability of the residents of the Federal Territory to justify the extension to them of a civil and constitutional status consistent with the dignity of the Australian people. 32 On 25 November, 1930 Canberra witnessed the first sitting of the Territory Court of Petty Sessions. In the same month rumours abounded that a secret society pledged to taking action to obtain the speedy abolition of the Advisory Council and the attainment of real self-government was flourishing in the infant city.3 3 The Advisory Council's life had been extended a further 12 months by the Advisory Council Ordinance 1931. The society, which was dubbed secret because it claimed that it would keep the names of its office bearers and members secret (at least temporarily) to avert possible public service victimisation, was actually made up of young men resident at the Bachelor's Quarters. The society members considered the Advisory Council a joke and an absurdity. They planned to field such a large number of candidates at the 1931 Council election as would make the ballot difficult if not 141.

impossible to conduct. When the 1931 election day dawned however, only 6 or 7 society members were candidates. No doubt a journalist informing his readers of this episode would report that wiser counsel had prevailed and that only the hotheads had persisted with the agreed plan. Such platitudes maybe appropriate sometimes but in this instance the more probable explanation is that the secret society contained within its ranks an unusually high percentage of backsliders who chose to remain secret. In any event the society candidates received little (if any) public support. The election results were Adams, George 153 Dethridge, Charles 83 Douglas,J.J. 3 Gell, F.R. 535 Gerrard, Elsie 27 Goodwin,J.J. 1013 Gourlay, W.D. 6 Hammond,W.P. 136 Henry,J.D. 1 Irving, J.A. 29 McDonald, Warren 331 McFadyen,C.H. 635 Rowe, Roy 403 Shakespeare, T.M. 501 Walsh, J. Westcott, George Wingfield, Alan 3 On the final count Messrs. Goodwin, Gell and Shakespeare were declared elected. The Commonwealth financial losses during 1931 in Canberra were severe. The maintenance of the Government hotels and hostels was considered to be the heaviest item of expenditure which the Government had to bear. It was estimated that in less than 5 years the loss on the Government hotels had been about £300,000 whilst the original cost of construction was a little more than £500,000. In 1931 the Hotel Ainslie was closed and the £150,000 Hotel Canberra, which in 1930 was operating on a £2.5.0 per day tariff or a £7.10.0 per week single room shakedown for visitors, was without a single guest for January. The Hotel Acton was closed to guests to make room for Branches of Departments which might be moved to Canberra. Guests complained at their compulsory transfer to the inferior accommodation at the Hotel Kurrajong. The Federal election held on 19 December, 1931 was a landslide victory for the non-Labor parties, the main one being the United Australia Party (U.A.P.) led by J.A. Lyons. The economic crisis which helped to wreck the Scullin Government did not suddenly vanish with the coming to power of the Lyons Government. In fact, it worsened with the sterner application of 142

the remedies advised by the orthodox economists. But by 1935 it was beginning to improve and unemployment having declined to about 14 per cent of the work force the economists began to talk of an unhealthy boom and proclaim the need for restrictive measures. The employment position in Canberra was bad and remained so for years. The Lyons Government established a camp for the itinerant unemployed run on a -walk in-walk out basis. The thousands who trudged to Canberra looking for work were not considered the responsibility of the Federal Government and the order to keep moving was given after a maximum 14 days rest period. Out of a total Territory population of about 8,500 in 1934 there were over 800 Canberra residents unemployed and as late as October, 1939 relief work - often a sweeping of the streets or footpaths or hoeing of weeds - remained a regular feature of the Canberra scene. The high percentage of leases granted under the City Area Leases Ordinance and surrendered or determined is a reflection of the depression years and of the gradual improvement. This factor is best illustrated by figures showing the position on the dates indicated.

As at

Total Leases Granted

Total which had been surrendered or determined

30.6.30 30.6.33 '30.6.35 30.6.37 30.6.38 30.6.39

495 506 542 575 604 636

192 212 239 244 249 260

On 12 April, 1932 the Departments of Works and of Home Affairs were abolished and the Department of Interior established. These changes were welcomed as they meant a £20,000 saving effected by a reduction of staff salaries! The demands for freehold were growing weaker by 1933 and it is doubtful if the private - individuals who occasionally approached Ministers seeking a change of tenure really represented any extensive public demand. The simple truth is that Canberra was at a standstill. If there was any public opinion on land tenure, or indeed on any other question, it was most likely so enervated by apathy and indifference that any talk about freehold being, a civil right or an essential civil liberty would have aroused nothing but derision. A revised City Area Leases Ordinance 1935 contained the most important amendments which had been made to the Canberra leasehold system to that date, as well as some amendments of more immediate practical effect. In conformity with reduction of interest generally, which was a consequence of the -financial crisis, land rent was reduced to 4 per cent of the unimproved 143

_________

capital value. This reduction was deemed to have commenced yn 31 July, 1931 and was expressed to continue until a date to be fixed by the Minister by notice in the Gazette. The. 4 per cent land rent (20 per cent discount) actually remained in operation until 31 March, 1952. Another amendment in the 1935 Ordinance of immediate but limited effect was the authority bestowed on the Minister to reduce the unimproved capital value of any land leased under the Ordinance for a 5 year period from 1 January, 1933. The first of the more fundamental amendments made in 1935 was that relating to re-appraisement of land value. Until this enactment the unimproved value of land leased under the Ordinance was due to be re-appraised by the prescribed authority during the twentieth year of the term of the lease and during each tenth year thereafter. The Ordinance as amended now provided that the re-appraisements subsequent to the first were to be during each twentieth year thereafter. The extension of the second re-appraisement period does not appear to have been openly discussed. Perhaps the best explanation of it is that it was in conformity with a general belief, and even a demand, that re-appraisements should be few and far between. Fifty year periods between re-appraisements had been openly advocated for some years. In 1929 the Commission had recommended a lengthening of the period before the first re-appraisement. The most important of the 1935 fundamental amendments was undoubtedly that which related to the offering of leases by the Commonwealth. Thenceforth the successful bidder or applicant for a block would pay in cash the difference (if any) between the-Minister's reserve and the amount of his successful bid or application as the case may be. Here was the legislative birth of the cash premium payment. The word premium did not appear in the legislation but the payment envisaged has, in popular usage, become so known, although at times the confusing term key money is used. The provision for a cash payment was of course a renunciation of one of the basic principles of the Canberra leasehold system. This principle had operated as the most popular defence of the system. With this amendment no longer could it be claimed that the system necessarily: (a) (b) (c)

involved no capital out-lay in respect of the land; gave equal rights to all Australians; left a purchaser free to devote all his money to building on the land.

In 1935 and the years which followed the detrimental possibilities of this amendment would not have been obvious. The abundant supply of blocks and the small demand for them ensured that the amendment operated in a way which left the popular defences of the leasehold system seemingly intact. It was however the prevailing economic circumstances of those years and not a legal barrier which shielded from view the possible results of this amendment. One generation cannot always anticipate the problems it bequeathes to its successor. It has to do the best in the circumstances confronting it, and in 1935 the ultimate effect of this amendment on a

144

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future generation, when the demand for blocks would completely outstrip the supply, would have been inconceivable even to the most farsighted. Ahd a generation which condemned land speculators, held them to be loathsome creatures, legislated to allow them operate and then wailed about their presence, was, as a generation, hardly likely to be gifted with foresight! The immediate reason for this amendment in 1935 seems to have been the intention to sell the sites upon which the Kingston and Civic Hotels were to be erected. The sites were duly sold in 1937 and the Commonwealth received its first premium payment —£1625 ($3250). The City Area Leases Ordinance 1936 was a consolidation. It swept up and collected and re-enacted in one Ordinance the existing enactments on the City Area leases. The opportunity was taken to amend or repeal some existing provisions and to insert new ones. The first amendment to this consolidated Ordinance came within a few months when provision was made to enable application by any lessee to seek a variation of the .purpose for which his leasehold parcel could be used. His application seeking a change in the purpose covenant of the lease would be made to the Supreme Court. This provision did not mean any abdication of control by the town planners and land ue controllers. The Ordinance as amended provided that no variation would be made if the Minister filed a certificate stating that in his opinion the variation sought would be repugnant to the principles for the time being governing the construction and development of the City of Canberra. The introduction of the Supreme Court into a question which was basically one of town planning was explained as necessary to give an impartial forum and hearing to all others who might desire to object to a change of the purpose for which that land could be used. The City Area Leases Ordinance was again amended in 1938 to provide for the granting of one of the major demands of the earlier years - tenant rights in improvements. The phrase tenant right in improvements is itself capable of several meanings but in this context of City Area leases its particular meaning was spelled out. Under the new provision, each lessee was statutorily accorded an equity in all completed improvements e.g., buildings etc., erected by the lessee at his own expense or purchased by him i.e. where he purchased a Government built house. On the reversion of that lease to the Commonwealth, whether by expiration, prior determination, or surrender the Commonwealth would be obliged to pay the lessee in cash the residual value at that time of those improvements less anything the lessee might still owe under the lease for purchase, mortgage or the like. The major amendments to the Ordinance in the 1930s - the cash premium payment, the possibility of variation of purpose clauses and tenant right in improvements - were all recommended in the 1920s by the Federal Capital Commission. It is evident that the drafting of amending Ordinances was no less slow in those years than many claim it is today. 145

Another amendment in 1938 is of interest. The Seat of Government Acceptance Act was amended to provide that the Territory should be known as the Australian Capital Territory. The attacks in Parliament on Canberra's leasehold system were becoming less frequent with the passage of time. Archie Cameron (S.A. Conservative) raised the issue in 1939 when he complained of the shortage of accommodation in Canberra. The real trouble said Cameron is that no one is able to obtain a

freehold building block with the result that the development of Canberra is being absolutely retarded. So long as the ridiculous position in regard to leasehold tenure is kept in force there will be no such thing as investment by private enterprise in home building. Perhaps the Parliamentarians realised that private enterprise had very largely moved out of the housing for rental field even in freehold areas thus giving rise to the various State Housing Commissions. In any event, Cameron's remarks excited neither support nor opposition. On 17 May, 1939 the Department of the Interior announced that £32,099 had been spent on the Royal Canberra Golf Links to that date and as the depression years gave way to the war years the pattern of growth at Canberra remained as it had been -- restricted activity by government and private enterprise. When compared with the large volume of work undertaken and completed within the 4 active years of the Federal Capital Commission the building or developmental works of the 1929-1949 period were quite limited. And yet during the second decade of that period far reaching circumstances were emerging, the consequences of which were to have a tremendous impact on the whole concept of Canberra as a national capital city, on its growth, on its leasehold system and indeed on everything and anything related to Canberra. The most dramatic change, which came with the war years, and from which so many changes have flowed, was the Commonwealth move into the income tax field to the total exclusion of the States. Henceforth, as the States sank in power and prestige the trend towards centralism which Deakin had foretold was at hand. The Commonwealth had come into its own and the idea of Canberra as the federal capital city gained wider if not universal acceptance. Still, the scrap Canberra campaigns were not completely finished. In 1944, Dr. Gaha (Lab. Tas.) claiming that he at least was a man with the courage to declare his feelings described Canberra as a good sheep station spoilt. He urged its abandonment. But in the new world Dr. Gaha envisaged, he insisted on the retention of a second Chamber of Parliament to restrain a disturbing

democratic element in society. 35 The demands of war, themselves, would have caused a shift of power to and a concentration of attention on the central government but that, plus the new role the Commonwealth was assuming as the keeper of the public purse, necessitated or caused a greatly expanded Commonwealth Public Service. During the War new Departments and agencies were established in the States 146

and many of Canberra's pre-war public servants were transferred from, Canberra to occupy senior positions in this expanded public service. Many never returned. But along with this exodus from Canberra there was an even larger number coming to Canberra, mostly younger people and with this increasing population the housing shortage grew more acute than ever.

NOTES ON CHAPTER 7 Li

Denning, W. Caucus Crisis: The Rise and Fall of the Scullin Government. Parramatta,Cumberland Argus, 1937.

2.

The Argus, Melbourne, 30 August, 1929.

3.

P. D.

4.

The Argus, 26 July, 1929.

121:826

5.

Op. Cit., 11 November, 1929.

6.

Op Cit., 20 November. 14 December, 1929 and 26 February, 1930.

7.

The Sydney Morning Herald, 23 January, 1930.

8.

Op. Cit., 6 July, 1929.

9.

Op. Cit., 4 February, 1930.

10.

The Canberra Times 25 November, 1929.

11.

Op. Cit., 26 November, 1929.

12.

The Argus, 4 February, 1930.

13.

The Sydney Morning Herald, 18 March, 1930.

14.

The Argus, 7 January, 1930, 11 January, 1930.

15.

P.D.

16.

P.D.

17.

P.D.

18.

P.D.

19.

The Sydney Morning Herald, 26 April, 1930.

20.

The Sydney Morning Herald, 26 September. 1930: 13, 14 and 23 January, 1931: TheAge. 20 May, 1930; TheArgus, 19 September, 1929, 3 and 10 July, 1930.13

21. 22. 23.

24. 25. 26. 27. 28. 29.

124:4925; 124:5030 126:5412 125:4235 123:1400

January, 1931 and see alsoP.D. 127:395. The Argus and The Sydney Morning Herald, 4 February. 1931. The Argus, 27 January, 1931. PD. 127:1073 28 March, 1930. 24 April, 1930. The Sydne.v Morning Herald, 26 September, 1930. Op. Cit., 11 June, 1930. Op. Cit., 17 September, 1930. Op. Cit., 14 October, 1930.

147

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CHAPTER 11

POSTSCRIPT

The Administrative Debacle As this was being written the 19th Australian Prime Minister, John Grey Gorton, desperately anxious to harvest a few votes in a by-election, prematurely announced a fundamental change in the Canberra leasehold system. As far as can be gathered from the limited information made available to the Australian public, who are the owners of Canberra, the broad outline of the proposals are as follows:(1)

the payment of land rent should cease and as a consequence the 20 year re-appraisal of land values for rental purposes should cease.

(2)

the income lost in consequence of the abolition of land rent should be made up by increased rates.

It is innocently claimed by the Minister for the Interior that this proposal will in no way weaken the leasehold system because:(a)

the power to control town planning through the purpose clause of the lease will still remain;

(b)

as the Commonwealth will still own the undeveloped land the power to control the course of development in new areas will be unaltered; and

(c)

the power to require that the land be built upon will remain unchanged.

What the Minister did not add was that these three elements are not in any way peculiar to a system of leasehold land tenure. There are other ways to control planning and development. In completely freehold areas, specially in a young city - and Canberra is a young city - they can be completely controlled by town planning legislation. Legislation compatable with freehold could also control the use, misuse or underuse of land - at a price. The characteristic of any leasehold system of land tenure is that the lessee of land occupies it for a certain period or succession of periods and that he pays a rent related to value. The abolition of rent or the institution of a pepper corn rental is in effect the abolition of leasehold and whether the last step to freehold is taken is very largely immaterial. There is only a skeleton leasehold left and its ultimate funeral, though assured, is a matter of little consequence. 200

4

The proposals signal the complete breakdown of the administration of Canberra's leasehold system. They are a public indictment of that administration, proving beyond all doubt its utter incompetence to meet the-challenges put forward by this daring and imaginative social experiment. Labor leader Gregor McGregor was correct when in 1902 he visualised that the success or otherwise of the experiment in land nationalisation would depend very largely on its administration. Departmental minds, small minds, freehold minds and confused minds have proved inadequate to implement this grand undertaking. Radical reforms for the administration of the Australian Capital Territory were outlined in the previous Chapter and these proposals put forward by the Prime Minister are a complete justification of the need for sweeping administrative reform. All land has a rental value and if the Commonwealth does not get this value the lessees will and the rent will be capitalised into land prices. Hence-. forth all Canberra leases will sell at exactly the same price as freehold. Every square foot of Canberra which is presently leased to private persons will be given to those persons in fact if not in legal fiction. The most valuable lands in the Civic Centre will in the main be presented to some of the richest financial corporations in Australia. What savage irony it is that these same corporations which once scorned and denotinced the Canberra leasehold system are now to be given land within the centre of the city! These Banks and Insurance Companies may well become advocates of a leasehold system of land tenure - Canberra style! The claim is made that the total income for Canberra will not diminish when the land rent is abolished because the $2½ million land rent collected annually will be made up by increased rates. There is certainly plenty of room for an increase in rates. Canberra's rates are amongst the lowest rates in Australia. It is most probable that they are in fact the lowest in Australia and there is no doubt that Australian rates are the lowest in the English speaking world. The land rent and rates together return about $3½ million annually which is roughly half the sum produced by rates alone in many cities of comparable size. But what of the future? Every decade the land rent should be increasing substantially and in one life time if the leasehold system were properly administered and land rent collected in the manner suggested in the previous Chapter Canberra could be one of the richest cities in the world. It would be unique in that it would have no municipal rates and far from being a drain on Commonwealth finances it could begin repaying to the Commonwealth the capital expenditure of past years. This was the vision of its founders and it is still possible of realisation. But such has been the limited vision and ineptitude of its administration that the 19th Australian Prime Minister has been reduced to making the pitiful proposals outlined above. The proposals envisage that the premiums paid at auction for leases by future purchasers shall be sufficient to pay the cost of kerbing, guttering, draining, water supply, sewers etc. This means in effect that the raw land is 201

given away for the cost of necessary services and thereafter the land, apart from town planning requirements, is completely at the disposal of the so-called lessee. Inevitably land prices will rise and rise steeply. Here.is a gift to the first 23,000 lessees in Canberra! But what of the next 23,000 lessees? Whereas the first 23,000 lessees were 46 years coming to Canberra the second 23,000 will come within 6 years. They will have to pay their rates which need not and should not exist and they will have to pay for their homes, shops and offices against the ever rising barrier of high land costs. In short, instead of paying land rent to the Commonwealth they will be paying high interest rates to the mortgagee companies for money to build. Should the Commonwealth ever require to resume leased land for public purposes it will have to buy back at enormous cost that which has been so lightly given away. Most of the voices which will be raised in favour of this proposal will be those who will benefit most financially from it and some others who delude themselves in thinking that attractive horizons will open with the abolition of land rent. Most of Canberra's residents come from or will come from elsewhere e.g. Melbourne and Sydney where the kind of money paid in rates is pretty modest. They will regard necessary rates in Canberra as exhorbitant, forgetful of remitted land rent. This absurd policy will not make lasting friends - any made will be lost in a decade or less. The extremely high cost of living which must follow as night follows day will see to that. The Australian public at large will be silent because they are scarcely aware, if at all, of the significance of the Prime Minister's proposals. A tremendous responsibility rests upon their Parliamentary representatives, irrespective of their political party, to see that this betrayal of their interests and their children's interest does not take place. There is no doubt that these proposals were announced prematurely. They have been advocated for some years by large commercial interests and according to press reports senior officers of the Department of the Interior have been studying them for a long time. Over the years this same Department has had the responsibility of Territory administration. It has not been equal to its responsibility. It was the commencement in 1964 of the 2nd 20 year re-appraisals which first shook its nerves and it has been in a state of panic ever since at the vision of the increasing number of leases falling due for re-appraisement. Sweeping reforms in Canberra are absolutely essential - reforms in administrative structure, reforms in valuation procedure, reforms in the wording and administration of the purpose clause, reform in rental increments and reforms in Territory government so as to involve the citizen in administration. These are matters which have been discussed in the previous Chapter. The Prime Minister's proposals reform nothing. They are destructive and not constructive. Let no one fondly imagine that the implementation of these proposals will solve the problem of valuation. The amount of the rate in the dollar will, if it is the same all over Canberra, make Civic Centre rates absurdly low. If different levels are used in different areas the rates in the dollar will be arbitrary, capricious, based on no principle and be at the whim 202

of Departmental officers of proven incompetence where Canberra's leasehold tenure is concerned. The plain fact is that there is not, nor has there even been, nor can there ever be, any real basis in Canberra upon which to decide the amount of rates which ought to be collected, or the rate in the dollar which ought to be charged. This is so because there has never been, nor can there ever be, any true municipal accounts. Assumptions, guesses, exemptions and exceptions are no basis for municipal accounts. The real truth is that there is not, nor has there ever been, any need for rates in Canberra, as in Sydney or Melbourne, because in Canberra the Commonwealth is legally and morally entitled to the full economic rent of the land. To replace land rent, this handsome endowment for all time,' this soundly based fund or income by an arbitrary rate or tax which must, in the popular mind, be identified with similar rates elsewhere is completely unsound. Ethically and administratively it is nonsense. If the proposals are implemented the rates will at the beginning appear enormous, the land rent component swelling them. They will of course be justified by reference to some quite fanciful figures said to represent munióipal costs. The arguments about what is municipal andwhat is national will be revitalised and popular pressures must foke the rates down to a level where the discarded land rent is forgotten. How can it be otherwise? There is no clear principle or yard stick for an increase over the years and no one answerable politically for the rates level! Inevitably these rates will fall far behind the true rent level-and land values must soar and the cost of living in Canberra with them. The capital 'gains at Australia's expense which will accrue to the rich corporations and other commercial interests presently holding leases in Canberra will be enormous. Dr. M. Neutze, head of the A.N.U. Urban Research Unit, Research School of Social Sciences, discussed these proposals and concluded that it

seems that only a lack of understanding can explain the fact that State politicians, who claim they are short of resources to service their own urban areas, are not protesting a proposal to hand over an equity worth over $100 million to the lessees of Canberra. Increased levels of property rates on the unimproved value of sites will not adequately replace land rents, as a rate is usually 'struck' to cover the cost of community services. We seem to have forgotten what the rents are for - a strange situation when we consider the attention it was given in the early years of the Commonwealth Parliament. The Commonwealth as ground landlord and as land developer seems to be entitled to expect that the value of its equity will rise in proportion to the market value of the sites it owns, which has nothing to do with the cost of municipal-type services. 2 203.

The Canberra leasehold system may survive as a fiction, but it will be meaningless. There would be no difficulty in devising legislation which converted this fictional leasehold into freehold and retaining all the useful planning controls. Future generations will demand the freehold - they will certainly have paid for it - but whether they get it or not is really of little consequence. For they will already have freehold in fact, if not in law. Under these proposals the Government surrenders, forfeits, abandons and gives away its right and duty to secure for the Commonwealth the growing and permanent source of revenue from the State earned increment in the value of land which comes silently from the mere accretion of population and from the exercise of the power of government. Let it be acknowledged, emphasised and realised that the words quoted are not the words of some socialist, some radical agitator, but rather that they are the words of the militant non-Labor conservative, B. R. Wise, spoken at the Federal Convention held at Adelaide in 1897. These were the years when the words unearned increment were basic to any discussion of leasehold tenure in the proposed federal territory. As King O'Malley (Lab. Tas.) saw it: every dollar spent by the people bf Australia in the erection of that (federal) capital will create an unearned increment in the property for miles around. . . The question now is, are the people of Australia prepared to spend thousands and thousands, yea, millions and then lose the benefit of their expenditure? I say the unearned increment created by the expenditure of the people's money belongs to the people. . ...

Or as flume Cook, a conservative non-Labor member from Victoria, put I hope not only the land on which the (federal) city is built will belong to the people of Australia. . . all rents and profits from the ground itself ought to flow into the national treasury. The unearned increment which must necessarily arise in connection with a city of this kind will go not to persons, companies and syndicates, but to those who have a legitimate right to it - the people. 4 Or as G. B. Edwards, the moderately conservative non-Labor member for North Sydney who insisted on the insertion of section 9 in the Seat of Government (Administration) Act 1910 said:the Commonwealth will spend some millions of pounds in the Territory and should profit by the increase which that will give to the land values. . . Why, today, is the concept of the unearned increment almost certain to be ignored in debates on the Canberra leasehold system? Has public imagination been so gripped by the town planning possibilities of a leasehold system that all else is obscured? Is political thinking in Australia bogged down in 204

sterile conservation and barren opportunism? Is the alleged Left with its intolerant elitism actually poverty striken in ideals and ideas on social analyses and structural radicalism? Is the Right so bankrupt in ideals and ideas, so immersed in some modern form of materialism, conservatism or opportunism that what was once universally regarded as a basic or fundamental principle has lost all meaning and importance? The Department of the Interior, at all events, has found an immediate cause for the abandonment of land rent, for tossing away what was formerly the central objective of Canberra's leasehold system. The land administrators have complained to Parliament that the academic argument for land rents accruing to the Commonwealth are overwhelmed by the real difficulties in making the system work. 6 Life itself is not without real difficulties - for some more than others but few are overwhelmed by them. Indeed, the new system will itself have its share of real difficulties. Will they, too, overwhelm? Let the Departmental admission of inadequacy for its task, the abject confession of administrative incompetence, be contrasted with the future envisaged by Senate Labor leader Gregor McGregor nearly 70 years ago only fancy what could be done in a federal territory if we had the right men representing the Commonwealth. Look at the lessons which could be taught in connection with land tenure.. . The Commonwealth Parliament today is unfortunately not always well advised on the question of Canberra leasehold. As an example, the Joint Committee on the Australian Capital Territory in 1965 held an enquiry into the supply of residential blocks in Canberra. The Committee reported that it received information concerning the original objectives of the policy of leasehold tenure and of how the originators of the scheme never contended that the Commonwealth must show a profit from the venture and of much divergence of opinion.., and confusion of ideas as to rental percentages etc. History is the propaganda of the victor - according to the sceptical. But this information is not history. It is arrant nonsense. Not one word in the public records of Australia will be found to support it. In fact, it is the complete opposite of the original objectives of the policy of leasehold tenure. The Joint Committee was wrongly advised in this respect, and, as a consequence, imaginary history found its way into the Committee's Report. The result has been that this nonsense, innocently received and recorded by a Parliamentary Committee, was actually quoted in Parliament to support a naive claim that the ingredients of Canberra's leasehold problems had been identified.' It is fitting indeed that a Senator should become worked up about Canberra leases. It is however even more desirable to be clued up before speaking or voting on this or any other subject. 205

The proposals to abolish land rent involve changes so fundamental that the whole future of the Australian Capital Territory will be effected. They should be the subject of the most exhaustive public, enquiry. Nothing less than a Royal Commission on every aspect of the administration of the Australian Capital Territory and its future will meet the present need. A Parliamentary Select Committee is just not good enough. An interim Ordinance has been passed and all is in train to implement the new policy. No complete details about the new system have yet been announced. The Departmental approach of having secret consultation with selected interest groups is hardly conducive to a satisfactory public understanding of the issues involved. In fact, this secrecy is incredibly irresponsible and shows an extraordinary contempt for public opinion and the public good. Canberra is the realisation of a dream of three generations of the Australian people. As this book has shown its origins lie deep in Australian history. It is not and must not be just another city reproducing in the course of time all the nearly insoluble problems of the modern city largely bred of freehold land tenure.

NOTES ON CHAPTER 11 I.

P.D. 17:5411 Charles Cameron Kingston

2.

Quoted in The Canberra Times 27 October, 1970.

3.

P.D. 3:2808

4.

P.D. 3:2811

5.

P.D. 9th November, 1910

6.

P.D. 26 October, 1970 p.1481

7.

P.D. 12:16491

8.

P.D. 26 October, 1970 p.1488

9.

Ibid p.1490

206

APPENDIX "A" CANBERRA LEASES: FIRST SALE: 12 December, 1924 See Queanbeyan Age 16 December, 1924. "Note: Figures in parenthesis denote the upset price. Upon purchase the purchaser paid the first years land rent or 5 per cent of the capital value fixed by his bid. Thus in Lot 1 Section 21 Eastlake below the purchaser paid £102.10. 0. Business and Residential purpose leases. Appended is a full list of the leases and the purchasers. EASTLAKE

Section 21. Lot 1: J.B. Young Ltd., Queanbeyan, £2050 (650) Lot 2: P.J. Collett, Queanbeyan, £1050 (C600) Lot 3: A.H. Collett, Queanbeyan, £1050 (625) Lot 4: W.B. Freebody, Queanbeyan, £950 (C500) Lot 5: J.A. McInnes, Leeton, £1050 (.C500) Lot 6: C. Edlington, Queanbeyan, £1050 (.C500) Lot 7: F.W. Hyles, Queanbeyan, £110 (C590) Lot 8: J.I. Harris, Melbourne, £1050 (5 25) Lot 9: J. C. Foy, Sydney, £1050 (.C525) Lot 10: J.C. Foy, Sydney, £1 100 (.C525) Lot 11: S.J.Goulston, Sydney, £1400 (C590) Lot 12: C. Crossley, Tasmania, Li 100 (L500) Section 25. Lot 1: W.F. Clutton, Queanbeyan, £200 (L175) Lot 2: J.A. Mclnnes, £200 (4200) Lot 3: Samuel McGill, Roseville, £200 (C200) Lot 4: Joseph Daniels, Orange, £220 (.C200) Lot 5: H.F. Halloran, Sydney, £400 (C220) Lot 6: Joseph Daniels, £250 (C230) Lot 7: Joseph Daniels, £200 (L200) Lot 7: Joseph Daniels £200 (C200) Section 24. Lot 1: John Keenan, £200 (C200) Lot 2: J.B. Young Ltd., £240 (C240) Lot 3: J.B. Young Ltd., £240 (C240) Lot 4: Henry Willis, Sydney, £220 (.C220) Lot 5: E.T. Hatch, Bungendore, £215 (C200) Lot 6: J. Esmond, Queanbeyan, £200 (C200) Lot 7: Mrs. E. Walsh, Queanbeyan, £200 (C200) Lot 8: Mrs. L. Martin, £230 (L230) Lots 9 and 10 passed. Lot 11: H.C.A. Reid, Queanbeyan, £220 (C220) Lot 12: G.R. Adams, C175 (L175)

207

Section 22. Lot 1 Helen J. Brackenreg, Canberra, £230 Lot 2: Helen J. Brackenreg, £175 Lot 3: Helen J. Brackenreg, £175 Lot 4: Helen J. Brackenreg, £175 Lot 5: Helen J. Brackenreg, £175 Lot 6: Helen J. Brackenreg, £230 Lot 7: John Deans, Sydney,C 150 Lot 8: John Deans,C180 Lot 9: Mrs. Walsh, £180 Lot 10: J.A. Mclnnes,C150 Lot 13: A.F. Turnley, Victoria, £150 Lot 14: A. F. Turn1ey,J180 Lot 15: John Deans, .C180 Lot 16: John Deans, £150 Lot 17: John Deans, £150 Lot 18: John Deans, .C150 Lot 19: John Deans, Sydney £150 Lot 20: John Deans, £150 All at upset prices. Section 19. Lot 1: H.F. Halloran, £200 Lots 2,3,4,5, John Deans, £136 each; 6. £120; 7 £180; 8. £140; 9. £180; 21. £180; 22. £150; 23. £126; 24. £126; 25. .Cl 26, John Deans. Lot 10: E.T. Hatch Cl8O Lot 11: Frank Hatch, C150 Lot 19: A.H. Collett, £150 Lot 26: H.F. Sackett, £126 Lot 27: H.F. Sackett,,C126 Lot 28: H.C.A. Reid, £126 All at upset prices. Lots 12, 13, 14, 15, 16, 17 and 18 passed. BLANDFORDIA

Section 2A Lot 1: Dr. Blackall, £470 Lot 2: A.E. Wright, £405 (C400) Lot 3: J.H. Calthorpe,C410 Lot 4: F.W. Hyles,C420 Lot 6: S.H. Ramsden,.C400 Lot 7: S.H. Ramsden,C420 (C400) Lot 8: Joseph Daniels, X470 Lot 9: Passed Section 2. Lot 8: Samuel McGill £400 Lots 1 to 7 and 9, passed. Section 1. Lot 7: Walter Kingsmill £350 Lots I to 6, 8 and 9 passed.

208'

RED HILL

Section 2. Lot 2: D.J. McMurtrie, £275 Lot 3: J.C. Tickner,C402 (C350) Lot 4: Wm. McWalker, Sydney, £250 Lot 5: P. Hardy, £250 Lots 1,6,7, 8,9 passed. Section 3. Lot 1: J.C. Foy, £200 Lot 3: Joseph Daniels, £350 Lot 4: JosephDaniels,C350 Lot 8: J.C. Foy, £300 Lots 2, 5, 6, 7, passed. Section 4. Lots 1 to 9 passed. Section 5. Lot 1: A.B.Srnith,J.360(C350) Lot 2: R.D. Ross, Walgett, £350 Lot 3: Dr. Christie, Queanbeyan, £410, (C375) Lot 4: W.G. Woodger, Queanbeyan,C425 (C375) Lot 5: Frank W. Gifford, £430 (C400) Lot 6: T.H. Tyson,C400 Lot 7: A. Shakespeare,C500 Lot 8: Joseph Daniels, £500 Lot 9: D.M. Thompson,C550 (C500) Lot 10: J.A. Edmonds, BOO Lots 11, 12, 13 passed. Section 1 Lot 1: Joseph Daniels, £300 Lot 2: E.P. Eggleston, Westridge, £250 Lot 3: J.A. Lea, £250 Lot 4: Sam McGill, Roseville, £250 Lot 5: A.N. Harrison, £600 (C275) Lot 6: R. Shelton, £300 Lot 7: J.C. Foy, X275 Lot 8 passed. MANUKA CENTRE SECTION 1

Lot 1: J.A. McInnes—0570 (C550) Lot 2: G.W. Booth, Melbourne, £205 (Cl 25) Lot 3: Ernest Murray, £490 (C375). Lot 4: S. Richriiond,C377 (C375) Lot 5: A. L. Turnley,C625 (550) Lot 6: A.L. Turnley, £650 (550) Lot 7: S.H. Ramsden, £375 Lot 8: J. Murray & Sons £375 Lot 9: W.H. Mason £225 (C125) Lot 10: J.W. Keegan,C710 (C560) 209

Lot 11: S.H. RamsdenC660 (400) Lot 12: C.T. Campbell,C220 (1:150) Lot 13: R.J. Dunne, X600 (1:450) Lot 14: J.W. Keegan, Yass,1:410 (1:350) Lot 15: Harding and Lindbeck, £350 Lot 16: Sam McGill, £360 (1:350) Lot 17: S.J. Goulston,1:875 (1:600) Lot 18: J. G. Harris, Queanbeyan,C350 (1:350) Lot 19: J. G. Harris, Queanbeyan, £325 (1:325) Lot 20: S.J. Cusack, Yass, £275 (1:275) Lot 21: M. Lahiff, Melbourne, £325 C275) Lot 22: S.H. Ramsden, Melbourne, £250 (1:100) Lot 23: S.H. Rarnsden, Melbourne, £680 (1:350) CIVIC CENTRE —Business purpose only Section 48

Lot 7: Commercial Banking Co. of Sydney X2050 (1:875) Lot 8: Bank of Australasia, £1550 (1:875) Lot 23: J.T. Tambakis.C400 (1:400) Lot 24: R.J. Dunne £400 (1:400) Lot 27: F.H. Boland, £600 (500) Lot 28: Woodgers and Caithorpe, £700 (1:500) 22 other lots passed. AINSLIE

Section 25. Lot 10: R. Shelton, 1:80(1:76) Lot 15: Joseph Daniels, £76 Lot 11: D.A. Longley, £76 Lot 14: J. Daniels, £76 Section 24. Lot 5: T.M. Shakespeare, C120 Lot 10: R. Warren, £78 (1:76) Section 35. Lot 1: Country Press Co-op. Co. of Australia Ltd. £1350 (1:1100) Lot 2: John Murray and Sons 1:1000 Lot 3: John Murray and Sons, £800 Lot 4: E.J. Sheedy, Yass.C600. Section 28. Lot 9: Federal Motor Garage £1100 .4

Section 26. Lot 1: Dr. Blackall, £550 SUBSEQUENT PRIVATE SALES Eastlake Section 24, Lot 10, T.M. Woods, 1:220 Section 19, Lot 18, F.W. Hyles, £140 Section 19, Lot 17, M. Woods 1:200

210.

Blandfordia Section 1, Lots 5 and 6 A.E. Wright, £400 andC450 Section 2a, Lot 6, S.H. Ramsden, Victoria, .C4(') Section 2, Lot 1, E.C. Bondfield,C440 Civic Centre Lot 3: Norman Moses, Queensland £1200 Ainslie Section 19, Lot 9 A.J. McDonald, Bathurst, ,C550 Section 19, Lot 1 Francis R. Campbell, Rockleigh, £550 Section 29, Lot 9 S.H. Ramsden, Victoria, £110 Note - Figures in parenthesis denote the upsetprice. CANBERRA UNSOLD BLOCKS AVAILABLE Woodgers and Caithorpe have asked us to announce that they are acting with Richardson and Wrench of Sydney as Sole Agents for the Government in connection with the sale of unsold Canberra Blocks left over from the Sale on Friday last. They are prepared to show buyers over these and for the time being are in a position to make immediate sales at the upset prices. There is a possibility that the prices will increase and buyers would be well advised to act promptly. Plans showing the unsold lots particularss etc. can be had at Woodgers and Calthorpe's Offices, Monaro Street, Queanbeyan."

APPENDIX "B" CANBERRA LEASES: SECOND SALE: 29 May, 1926 Se Queanbeyan Age 1 June, 1926. Civic Centre Business Blocks Lease No. 4. (upset value £875)McGillC1 400 Lease No. 5. (C500) Oakley and Parkes architects £1300 Lease No. 6. (.C1800) John Deans, £1800 Lease No. 7. (C500) C. O'Keefe, £1400 Lease No. 8. (C500) G. Adams, £1300 Lease No. 9. (C500) Hutchinson Bros., £1300 Lease No. 10. (C500) Pringle, £1450 Lease No. 11. (C500) Pringle,.C1250 Lease No. 12. (C500) Morris,C1300 Lease No. 13. (CS 00) F.R. Hayes, £1300 Lease No. 14. (C500) Royal Insurance Co. Ltd. £1800 Lease No. 15. (C500) John Deans, £2100 Lease No. 16. (C2400) Commonwealth BankC5600 Lease No. 17. (.C700) Australian Provincial Assurance Association Ltd. £2300 Lease No.18. (L1225) Australian Provincial Assurance Association Ltd. £2600 Lease No. 19. (C1225) Commercial Bank of Australia Ltd., X2700 Lease No. 20. (.000) Dr. Finlay, £3000 Lease No. 21. (C2100) Bank of New South Wales,.C5200

211

SOUTH AINSUE

Sec. 13 Sec. 17 Sec. 17 Sec. 18 Sec. 24 Sec. 36 Sec. 38

Residential Lot 4 Patterson £350 Lot 4 Perry.C275 Lot 9 R.D. Ross £370 Lot 6 Holdsworth.C325 Lot 2 John Murray L160 Lot 13 Stewart £300 Lot 16 LeetchC300

Sec. 14 Sec. 14 Sec. 14 Sec. 24 Sec. 26 Sec. 26 Sec. 28

Lot 6 Lot 12 Lot 14 Lot 6 Lot 9 Lot 14 Lot 11

Sec. 8 Sec. IA Sec. 37 Sec. 37 Sec. 38

Lot 1 Lot 1 Lot 4 Lot 6 Lot 8

TELOPEA PARK

W. MasonC550 Mclnnes.C360 Hill .C330 MildenhalhC610 John Deans £250 CoyC256 John DeansC280

BLANDFORDIA

Dr. Alcorn.C490 O'Neill £375 Fleetwood L440 R. HenthaC450 Mrs. TuckerC470

UNSOLD RESIDENTIAL BLOCKS AVAILABLE

There are some good residential blocks in South Ainslie and Blandfordia available at upset prices and the auctioneers, Messrs. Woodgers and Caithorpe, will be glad to give inspections to anyone interested. These unsold blocks are only available until Saturday, 12th June, after which they will be withdrawn.

APPENDIX "C" RESALE OF CANBERRA LEASES

District

Section

Red Hill Red Hill

1 2

Red Hill

5

Block 5

3 51

3

Re-Sale Price

£30. 0.0 £20. 2.0 £12.10.0 £20. 0.0

£100. 0.0 £100. 0.0 £ 35.17.11 £100. 0.0 £100. 0.0 £ 60. 0.0 £ 50. 0.0 £120. 0.0 £110. 0.0 £ 50. 0.0 £ 50. 0.0 £ 45. 0.0

5

£25.10.0

6 9 12 13

£20. 0.0 £27.10.0 £20. 0.0 £18.15.0 £20. 0.0 £22.10.0 £22. 0.0

Blandfordia

1

5

Blandfordia

2

6 1

212

Annual Rent Purchase Price

.. 77

*Tp 2A

1 2

£

7

03-10--0 £20 50 £21 00 £2000

£10 00 60166 £7000

4

00

Blandfordia

3

9

£25 00

£125

Manuka Centre

1

1 3

£28.10.0 £24.10.0

£ 72.15.0

4

£18.17.0 C31. 5.0 £32.10.0

6 10 11 12 15 16 17

£33. 0.0 £11. 0.0 £17.10.0 £18. 0.0 £34.15.0

20

£13.15.0

£100. 0.0 and resold months later forCl3.18.0. £ 50. 0.0 £ 31. 5.0 £ 50. 0.0 £100. 0.0 £ 53. 2.6 £ 80. 0.0 £100. 0.0 £ 46.15.0 £ 9. 0.0 fees and shares in Canberra Shops. Ltd. £ 75. 0.0

5

£35.10.0

South Ainslie (Residential)

18

11

£12.10.0

£104.17.9

Ainslie (Minor Industrial)

12

1

£22.10.0

£450. 0.0

Ainslie (Residential)

23

3

£ 7. 0.0 £ 7. 0.0

C. 17. 6.7

£ 5.10.0

£ 36. 8.6

5

-

£ 17. 6.7

Ainslie (Residential)

24

3

South Ainslie

31

7

£15. 0.0 1.0 (granted 15.1.27) (sold 23. 3. 27)'

Ainslie

20

7

£47.10.0 (minor industrial)

£149. 0.0

Ainslie (Residential)

26

14

£ 3.16.0

£215. 0.0

Ainslie (Minor Industrial)

29

9

Ainslie (Minor Industrial)

35

3

.C40. 0.0

£100. 0.0

Ainslie Industrial Residential

41

1

£10. 5.0

£ 37.10.0

Ainslie Residential

47

13

£10. 5.0

£ 20. 0.0

£52. 0.0 £100. 0.0 (granted 16.l2.25) (sold 19.226) to Canberra Steam Laundry)

£350. 0.0

Ainslie

28

4

£50. 0.0 (minorindustrial)

Eastlake All Residential

19

12 13 14 15 16 19 20 27 28

£ 7.10.0

2 5 8 10 12

£52.io.o £52.lo.0 £52.10.0 £55. 0.0 £55. 0.0

£100. 0.0 £650. 0.0 £400. 0.0 10.0 £197. 0.0

£10. 0.0 £ 7.10.0 £ 7.10.0 £ 7.10.0 £ 7.10.0 £ 9.10.0 £ 6.10.0 £ 6.10.0

£ £ £ £ £ £ £ £ £

16. 0.0 22. 0.0 84.11.9 56.16.0 25. 0.0 20. 4.0 61. 2.8

41.15.6 20.14.7

Eastlake Business

21

Eastlake Residential

22

6 7 14

£11.10.0 £ 7.10.0 £ 9. 0.0

£ 13.10.0 £ 51.17.11 £ 9. 0.0

Eastlake Residential

24

8 9

£11.10.0 £11. 0.0

£ 20. 0.0 £ 50.19.7

Eastlake Residential

25

3

£10. 0.0 £20. 0.0

£253.10.0 £ 64. 7.0

5 NOTE: Civic Centre Business Site

48

Block 5 Section 25 Eastlake was the first residential lease sold at the first sale 12.12.24. 3 4 6 9 10 11 12 13 16 '17 20 21 22 27 28

214

£1600. 0.0 and then resold forC2000. £250. 0.0 £60. 0.0 £250 0.0 £35. 0.0 £20. 0.0) £20. 0.0) 1100. 0.0 £20. 0.0) £20. 0.0) £280. ao £20. 0.0 £140. 0.0 £20. 0.0 £350. 0.0 £20. 0.0 and then resold for £183.12.9. £425. 0.0 £20. 0.0 £300. 0.0 £20. 0.0 £3100. 0.0 £20. 0.0 £300. 0.0 £30. 0.0 £ 7-5.0 £35. 0.0 and shares in Canberra Shops Ltd.

£60. 0.0

---4

Civic Centre.

6 8 12 13

1

£90. 0.0 £65. 0.0 £65. 0.0 £65. 0.0

£65,0. 0.0 £335. 0.0 £300. 0.0 £267. 0.0 and then resold for £287. 19.3. £150. 0.0 £600. 0.0

20

APPENDIX "D" CANBERRA LEASES: THIRD SALE: 9 April, 1927 See

Canberra Times

13 April, 1927.

Ainslie Industrial Sites Section 20 Block 5 C.W. Davies, Solicitor, Canberra £1800 (upset price £1000) 4 J. Burchain Clamp, Architect Sydney £1900 (C 1000) £2000 (,C1000) 3 W. Perry £2200 (C1000) .. 2 Bruce Smith Ainslie Boarding House Sites £1100 (upset price £1000)

Section 57 Block ii. Burcham Clamp Eastlake

£1100 (upset price £1000) £1100 (J1000)

Section 18 Block 1 A.E. Wright 11. Carghill 19 "

-

North Ainslie Canberra Avenue Subdivision

Ltd. £320 (upset price £160) Section 6 Block 6. Canberra Building & Investment Co. " " " " (1:1 60) £340 12 ' ' '' (,C1 60) £360 13 £450 (C160) 14 E. Greville (160) 15 Canberra Building & Investment Co. Ltd. £160 ' ' ' (C160) £160 16 (.C165) £455 19 E. Greville ',

,C460 J25

(.c225) (.C225)

Section 10 Block 14 H.L. Dawson

£500

(C250)

Section 11 Block 9 H.L. Dawson

£4-SO

(C200)

Section 13 Block 1 H.L. Dawson

£450

(C325)

£380 £350

(.C375) (.C380)

'Section 9 Block 12 E. Greville 13 H.L. Däwson

Section 16 Blocks 7, 12, 15 passed in. Section 12 Block 6 H.L. Dawson 12 H.L. Dawson l3 passed in. 5 and 30 withdrawn from sale.

215

-

4

Eastlake circle Motor Service Station Section 25 Block 1 H. Brodie, Bredbo

£1140(upset price £2000)

Civic Centre Section 1 Block 22Federal Mutual Insurance Co. Ltd. 23 L.H. Rudd Architect Canberra 24 Canberra Shops Ltd. 25 Canberra Shops Ltd. 26 Canberra Building & Investment Co. 27 Canberra Building & Investment Co. 28 Canberra Shops Ltd. 29 Canberra Shops Ltd. 30 D.E. Limburg I Dr. Duffield 2D.E.Limburg 3 Canberra Shops Ltd. Average Price per foot £113. South Ainslie (Residential) Section 15 Block 5 passed in. 7 Tambakis 16 " " 17 " 10 Government Savings Bank of NSW 20 " l2 Mrs. Ryan Dodd's Hotel Couma 36 " 18 Passed in. 8 J. Sweetnam " 38 " " 38 " 12 Upset 230 passed in.

£3500 (upset price £1000) £2800 (,C1000) £2500 C1000) £2400 £2300 £2600 £2700 £2900 £5100 £2500 £3200

C1 000) (C100 0) C1000) (C1000) (ci 000) (C3000) (C1000) (C1000)

£300 (upset price £250) £360 (.C250) £410 (C350) £225 (upset price) £230 (C230)

Blandfordia (Residential) Section 3 Block 6 Withdrawn from sale. Blocks 14 and 16 (upset £150) passed in. Section 1 Block 2 A.M. Sweetnam 14 upsetC275 passed in.

£275

(C275)

Section 2 Block 2 upsetC325 and 18, upsetC350 passed in. Section 18 Blocks 5 and 37 withdrawn from sale. I Canberra Building & Investment Co. Ltd. 4 " " " " " " 6 " " " " " " 7 " " " " " " 8

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10 ii 12 13 14 15

16 17 18 19

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216

£400 (upset price 400) £325 (C325) £275 (C275) (C275) £275 £295

(C275)

£250 £220 £200 £200 £200 £150 £150 £250 £250 ,C270

(C250) (C220) (C200) (C200) (C200) C150) (C150) (C250) (C250) C250)

Section 18 Blocks 20 Canberra Building & Investment Co. Ltd. £270 " " £310 26 " " " " " " £330 28 " " " " Telopea Park Section 14 Block 9 A.T. Barnes £340 (upset price £300)

217

C250) (C250) (C250)

INDEX Abbott, C. L. - 109, 127. Abercrombie, P. - 39. Acre Value - 113-114. Adams, G. - 142. Advisory Council - 133, 136, 140-1, 153, 194. Agitations - Miscellaneous - 123. Albert Hail— 136. Alcorn, Dr. R. M. - 126, 128, 134, 141. A.M.P. Society - 83, 116. Appleton, W. - 91. Arbuckle, E. - 139. Archibald, W. 0. - 40, 41, 45. Arnold, E. P. - 108. Atkinson, L. - 65. Bamford, F. W. - 43. Barton, Edmund— 18-20, 22, 24-26, 29, 88,115. Batchelor, E. L. - 28-29. Beckett, W. - 124. Bellamy, Edward - 15, 28. Blakeley, A. - 132, 133, 135, 138-9, 141 Bligh, Gov. - 2. Bombala - 27. Bourke, Gov. - 5, 6. Bowtell, A. - 136. Brackenreg, J. E. - 110-111. Braddon, Edward - 27. Bray, A. J. - 136. Brisbane, Gov. - 2. Brodie, H. - 96. Bruce, S. M. - 73, 74, 82, 90,101, 114, 116, 127, 129,131. Burgh, E. M. de - 57. Butters, J. H., Chief Commissioner - 77, 82;97, 101, 106, 112-122, 127-128. Cameron, A. - 146. Campbell, F. - 45. Carruthers, J. - 29. Causeway - 100, 103. Chamberlain, J. - 23, 24. Chapman, Austin - 24, 45, 46, 47, 48, 73 Charlton, M. - 77. Chifley, J. B. - 77. Chisholm, Caroline - 11. Church Lands Leases Ordinance 19241932--- 166, 167. Christie, A. J. - 131-132. City Area Leases Ordinance 1936-1969 166, 172. Colman, J. B. - 80. Commercial Bank of Australia Limited 92. Commonwealth Bank - 81-83. Cook, Hume - 24, 204. Cook J. - 39, 40, 47, 49, 63. 218

Courtnay, A. - 91. Crammond, C. H. - 79, 80, 108. Crapp, J. S. - 126, 132. Curtin, John - 77. Daley, C. S. - 57, 77, 107, 139, 140.Dalgety - 28, 29, 30, 31, 42, 58. Daly, J. J. - 136. Darcy, Les —102. Darling, Gov. - 3. Davies, C. W. - 117, 134. Deane, P. E. - 125. Deans, John - 117, 136. Deakin, Alfred - . 19, 21, 30, 32. Denman, Lord - 43. Departmental Board - 38, 39, 40, 41, 42. Dethridge, C. - 142. Douglas, J. J. - 142. Durham, Lord - 149. Duffy, Charles Gavan - 9. Edwards, G. B. - 27-29, 34, 204. Elliott, H. E. - 90, 95, 97, 114-115, 121122. 127. 135. Environa - 72, 80, 198. Evan. G. - 136. Eureka - 10. Federal Capital Commission v Lariston Building & Investment Co. Pty. Ltd. - 113. Fenton, J. E. - 68. Finlay, Dr. C. - 92. Fisher, A. - 31-32, 40-41, 43, 49, 63. Fitzpatrick, George - 54. Fitzroy, Gov. - 6. Five per cent (5%) - 28, 47, 52, 54, 60, 62, 65-66, 152-153. Fletcher Jones & Staff Pty. Ltd. - 91. Foil, H. S. - 127. Forbes, Chief Justice Francis - 2. Francis, C. - 123, 133. Fraser, J. R. - 152, 198. Geil, F. K. - 108, 136, 139, 142. Gaha, Dr. J. - 146. George, Henry - 11, 13-16, 19, 22, 30, 61 9 68. George V, King - 139. George VI, King - 102. Gerrard, E. - 142. Gipps, Gov. - 6. Glasgow, W. —94,95,114-116. Glynn, McMahon, P. - 19, 20. Goderich, Viscount - 3. Goodwin, J. T. - 57, 65, 68, 70,103, 126, 128, 132, 136, 142. Gorman, C. H. - 77. Gorton, J. G. - 200. Gougard. J. - 140.

Gourlay, W. D. - 142. Gould B. C. - 132, 133, 137. Grant, John - 61, 65-69, 74, 93-95, 115, 122, 186. Green, T. - 122. Gresham, W. H. - 11. Griffin, W. B. - 38-42, 57, 74, 101. Groom, L. - 72-73. Grose, Major J. - 2. Halloran, H. F. - 72, 80. Hamm'nd,W. P. - 136, 142. Harrison, John - 77 Henderson, G. E. - 137. Henry, J. D. - 142. Hollins, I. J. - 136. Hill, T. - 38, 40. Hinkler, B. - 116. Home Rule - 47. Howard, E. - 24. Howse, N. - 112, 117, 127. Hughes, W. M. - 21, 59. Hughes-Duncan, J. G. - 125. Kelly, W. H. - 39, 40, 41, 63. Irving, J. A. - 142. Isaacs, I. - 139. , Johnston, H. - 137. Kerbing& Guttering— 111;113. Kingston, C. C. - 18. Kingston Hotel - 145. Knowles, G. S. —113. Land Tax Act 1910 - 30-31. Land Tenure Reform League - 11. Latham, J. 128. Leases (Special Purposes) Ordinance 1925-1943 - 166;167. Leases Ordinance 1918-1958 - 166, 169. Lyne, W. - 19, 42. Lyons, J. A. - 142. Lariston Chambers - 135. Mahon, Hugh —31, 47. Majtland - 18, 19, 20, 25. Makin, N. - 68. Maloney, Dr. W. - 101, 1222 124. Manuka baths - 138. Marr, C. - lii, 115-116, Marriott, L. - 137. Marx, Karl - 10'. McDonald, Warren - 142. McFadyen, C. H. - 142. McGowen, J. - 21. McGrath, D. C. - 135. McGregor.,Gregor - 28, 34, 43, 149, 201, 205. Neutze, Dr. M. - 203. McMillan, W. - 26 9 29. Menzies, R. G. - 158. Mill, J. S. - 11, 13. Mullen, E. - 43. Miller, David - 32, 38, 39, 40. Miller, Denison - 8283. Mirarns, 3.— 11. Murdoch, J. S. - 38, 42, 132.

Mussoline, B. - 141. Nott, L. W. - 128, 151, 153. National Capital Development Cornmission (N.C.D.C.) - 159. Oakeshott,G. J. —'38. O'Connor, Richard - 24. O'Malley, King - 24, 33, 34, 38, 39, 41, 44, 45,47, 48, 63, 123, 182, 204. Ogden, J. E. - 198. Owendale Pty. Limited v Anthony - 177. Oven, P. - 32, 38, 40, 57, 65. Page, Dr. E. C. - 82, 128, 129. Pearce, G. W. - 67, 69-70, 73, 82, 93, 112-113,136. Pershing, General J. - 102. Philip, Gov. - 1, 2, 85. Pike, Mr. Justice - 110-111. Pitt, G. A. - 110-111. Poynton, A. - 59. Public Seryice Board - 63, 78, 100. Purpose Clause - - 145, 181. Queensland National Bank - 83, 91, 92. Rae, A. - 88, 89. Rates - 47, 106-111, 183-186. Real Property Ordinance 1925-1969 179. Re-appriasement —60, 62, 68-70 9 93, 949 108, 1209 133, 144, 186-187. Reform Proposals - 187-199. Reid, M. —101, 122-123, 124. Reid, G. H. - 21. Phar Lap - 102. Richards, H. S. - 929 93, 105, 117. Richardson & Wrench - 79. Ripon Regulations - 3. Robertson, John - 8. Ross, HE— 57. Rowe, Roy - 137, 140, 142. R.S.L. - 64, 78. Salmon, Dr. Carty - 33. Scrivener, C. R. - 31, 32, 38. Scullin, J. H. - 113, 131, 134, 137, 138, 139, 142. See, John - 29. Self-government - 125. Shakespeare, T. M. - 137, 139, 140, 142. Sharkey, Daniel - 137. Sievers, E. J. - 108. Single Tax - 15, 16. Smallhorñ, W. L. - 125. Smith, Adam - 12, 13, 14. Smith, Bruce - 33. Smith, Staniforth - 22;24,' l 15, 197. Snobbery - 124. SpeIideloye.E —92. Stewart, P.G. - 72, 74 Subleasing Scandal - 195-196. Sulman, J. - 57. Sydney Trades Hall - 101. Torrens Title - 81, 179. Townsend, A. R. - 118. Tumut - 27.

219

'4

Urban re-development - 196-197. Valuation - 103-106,182. Valuer General's Office - 189, 193. Vernon, W. - 32. Vigilance Committee - 44. Wakefield, E. G. - 3-6, 95. Wales, Prince of - 102. Wallace, A.R.-13. Walsh, J. - 142. Watson, J. C. - 21, 29. Watson, J.F. - 118-119, 125, 127, 128, 157. Weatherston; J. S. 92, 93, 104, 118, 125. Welsh, R. - 108. Westcott, G. - 142. Willinson, A. G. 125. Windsor, Duke of - 103. wingriesa, Alan Wise, B. R. - 19, 20, 204. Woodgers, W. G. - 137. Woodgers &Calthorpe— 79. Young, J. B. Ltd. - 80.

220