The second recommendation is to insert a new sub-section before sub-section (5) of Section 4. The new sub-section is set out on the Order Paper. Section 14 of the Land Act, 1923, provided that where land, which is subject to a purchase annuity has been acquired by the Land Commission under that Act, then in such case the annuity for the repayment of the original advance shall be regarded and dealt with as a claim attaching to the purchase money of the land advanced under the Act of 1923. This meant that the purchase annuity set up under the earlier Acts had to be redeemed by means of a payment in land bonds. With land bonds fluctuating in value it would have been practically impossible to fix with any accuracy the amount of land bonds required to redeem the annuity. It was consequently provided in Section 1 of the Land Act, 1923, that regulations to be made by the Minister for Finance for the drawing of land bonds should provide for the immediate redemption of bonds transferred by order of the judicial commissioner in satisfaction of death duties or in redemption of land purchase annuities. The amount of bonds transferred in satisfaction of the death duties was very large, and the sinking fund portion of the Act was quite insufficient to provide redemption money for these bonds. The result was that considerable draws had to be made on the Guarantee Fund and the grants had to be withheld from the local authorities. Section 3 of the Land Act of 1931 provided that bonds transferred in satisfaction of death duties were no longer to be drawn for immediate redemption. This provision was made possible by the fact that the land bonds were then over par and were not likely to fall below par, and that consequently there was likely to be no loss of revenue. There is no necessity for providing for the further redemption of land bonds tendered for death duties, but there remains the problem of purchase annuities that may be charged upon the land acquired under the new Land Bill, and it is proposed in that case where payment is made under this Act of 1923, that there shall be immediate redemption as in the case of former land bonds. In the case of the redemption of purchase annuities any serious draws on the Guarantee Fund are unlikely.
