should be administered by the same
officials, with a proviso that all valuations
 should be made on a proper
hasis, such as that at present adopted
for the Commonwealth duty. In order
to avoid any question of State rights
or the suggestion that State functions
are being absorbed by the Commonwealth,
 the States might take over
from the Commonwealth the administration
 of this capital tax if the Commonwealth
 takes over from the States
the administration of income tax. In
this matter we recall the recommendation,
 in a similar sense, of the Royal
Commission on Taxation in 1922.
8. Land Taxr.—Land tax is paid on
freehold land (as distinguished from
leasehold) and is graduated. We are
unable to see that this is equitable.
The principles which govern such a

C

1. We have interviewed the head
office representatives of the Trading
Banks and the Commonwealth Bank,
some of their principal branch
managers and the officials of the State
Savings Banks, the Government Rural
and Agricultural Banks, and Invest
ment and Trading Companies who
make advances similar to those of the
banks, and discussed with them the
zeneral position of banking in
Australia. The trading banks have
very thoroughly learned the lesson of
the year 1893, and there has been no
suggestion of any financial difficulty in
Australia, so far as banking is conrerned,
 since that crisis. They had no
lifficulties even in war years. The
stability of the trading banks may
perhaps be fairly illustrated by a comparison
 given to us between the ratio
of capital and reserve to outside
‘abilities of the three New South
Wales trading banks; these are
1s. 6d., 8s. 10d., and 3s. 5d. in the £
respectively. The criticism, if any,
hat is levelled against the banks is
that they are too tight with their
money, and too conservative.
2. The high rate of interest paid by
the Savings Banks, and the investment
 of a large proportion of their
funds in Government Joans and

ax are entirely different from those
which govern an income tax, which,
'y graduation, equitably assumes a
treater capacity to pay to be attached
‘0 a larger income. Land tax is preumed
 to be charged by relation to the
ralue of the land, and to apply the
rinciple of graduation to it is unound;
 the thousandth acre is no more
raluable than the first acre, and should
ear no higher rate of tax. We direct
tention in another memorandum to
‘he necessity for using land so as to
woduce the maximum wealth, and in
ur judgment it seriously militates
tgainst such user of the land to charge
wn increasing rate of tax on an in-“reasing
 quantity of land. We re-:ommend
 that if land tax continues to
ve imposed it should be chargeable at
31 even rate on all land values.

BANKING.

similar long-term securities, tends to
restrict the money which is available
‘or ordinary trade purposes, and this
luid capital is also diminished by the
practice, which is common to the
ranks in Australia, of making adrances
 against real estate (*‘ broad
wres My, including pastoral and agriultural
 lands. It must be borne in
mind, however, that without the facilides
 thus afforded hy the banks, it
night reasonably be claimed that the
evelopment of the country would have
‘een far less rapid than has been the
‘ase; nevertheless, such advances
render less fluid the financial resources
of the banks for the purposes of
rdinary trade advances.
3. Borrowing is checked by the
vanks by means of rationing the
wiount of fresh advances to clients
ather than by raising the rates of
nterest, the Australian temperament
eing such that the latter course
vould probably not be effective, paricularly
 in view of the probability of
mn increment in the value of land pur-*hased
 with borrowed money. On the
vhole, the farmer is a desirable and
safe client for the bank, and little, if
any, losses have heen made on the
advances on tha security of ¢ hroud
ores?