under a Property Tax
which fell on land, improvements, and live stock as well. Since
1891, therefore, progression or graduation has been in New Zealand a
cardinal principle of direct taxation.

Land pays no Income Tax, and landowners who have less than L500 worth
of bare land value pay no Land Tax. This complete exemption of the
very small land owners forms an almost insuperable barrier to the
progress of singletaxers. On all land over L500 value 1d. in the L is
paid. The mortgaged farmer deducts the amount of his mortgage from the
value of his farm and pays only on the remainder. The money-lender
pays 1d. in the L on the mortgage, which for this purpose is treated
as land. An additional graduated tax begins on holdings worth, L5,000.
At that stage it is an eighth of a penny. By progressive steps it
rises until, on estates assessed at L210,000, it is 2d. Thus under the
graduated and simple Land Tax together, the holders of the largest
areas pay 3d. in the L, whilst the peasant farmers whose acres are
worth less than L500 pay nothing. The owner who pays graduated tax
pays upon the whole land value of his estate with no deduction for
mortgage. The Graduated Tax brings in about L80,000 a year; the 1d.
Land Tax about L200,000; the Income Tax about L70,000. The assessment
and collection cause no difficulty. South Australia had a Land Tax
before New Zealand; New South Wales has imposed one since. Both differ
from New Zealand's.

Income earners pay on nothing up to L300 a year. Between L300 and
L1,300 the tax is 6d. all round; over L1,300 it rises to a shilling.
Joint-stock companies pay a shilling on all income.

Another law authorizes local governing bodies to levy their rates on
bare land values. Three times the Bill passed the Lower House, only to
be rejected in the Upper. It became law in 1896. The adoption of the
principle permitted by it is hedged about by various restrictions but
some fourteen local bodies have voted in favour thereof.

The unexampled and, till 1895, continuous fall of prices in the
European markets made it hard for colonial producers to make both ends
meet. The cultivator found his land depreciated because, though he
grew more than before, he got less for it. As the volume of produce
swelled, so the return for it sank as by some fatal compensation. To
pay the old rates of interest is for the mortgaged farmer, therefore,
an impossibility. Various schemes for using the credit of the State to
reduc