The attempt to introduce a system which should give effect to the principle underlying the economic theory of Henry George in New Zealand was not hastily made, nor was it attempted on a scale that could be fairly open to the charge of being revolutionary in its incidence. The first step taken by the legislature was in the direction of so dealing with the public estate of the country as to encourage settlers to lease rather than to purchase the freehold. With this in view a system of leases in perpetuity was established, and areas of the best and most accessible of the land still unsold were set apart to be dealt with under the new plan. Any person, not already the holder of land in freehold, which, together with the land applied for under perpetual lease, would make an area of more than six hundred and forty acres, or one square mile, could apply for a lease of not more than three hundred and forty acres on perpetual lease. Five dollars per acre was fixed as the price of the land, such being the average price of first-class freehold land unimproved in the country, and the applicant was entitled to a lease for 999 years of the land applied for, subject to the conditions that he resided upon the land during the first ten years of the tenancy; that he improved it to the extent of thirty per cent of its upset value within six years; and that he paid as annual rental interest at the rate of five per cent on the price or value of the land. Each lease contained clauses rendering the land subject to revaluation at the end of each period of twenty-one years, on which the rental would be calculated. If the new valuation, which it was provided should rigidly exclude all improvements on the land, was assented to by the tenant, the matter was settled for another twenty-one years; but if he objected to the new valuation as excessive, it was provided that he could demand that it should be offered by public auction (subject to payment of the value of his improvements), and that the amount bid for it either by himself or by anybody else at the sale should be esteemed the value on which the rental was to be calculated during the twenty-one years next following the sale. In case the present holder of the lease was the highest bidder, this was the only result of the sale; but in case he was outbid he was bound to transfer the lease to the best bidder, on receiving from the government the amount at which his improvements had been valued. This payment might be made in government bonds, bearing interest at four per cent, at the option of the government, and the new holder of the lease was charged as rent the interest on the value of the land as bid by himself and also interest at five per cent upon the former leaseholder's improvements. By this means it was proposed to retain for the community at large the increased value of the lands of the country which was not due to the improvements made from time to time by the leaseholder.