When Lady Denman announced the name of the new capital in 1913, the assembled dignitaries had already put in place a radical social experiment for the city. Nobody would own any land in Canberra. It would all be owned by the Commonwealth, and leased to those who wanted to use it.
The reason why lies in the writings of an American social philosopher of the late 19th century, Henry George. Today almost completely unknown, he was likened at the time to Plato and Aristotle for his breadth of vision.
New housing in Canberra, 1926.
His central idea was that as a country develops, the value of land goes up - but not necessarily because of the efforts of the landholder to develop it. Land in a growing city appreciates simply because the city is growing, which creates more demand for land.
Why, he asked, should the increase in value belong to the landholder who in most cases has done nothing to cause that increase? Why should it not belong to the whole community, as it is really a result of their collective efforts?
Australians of all political persuasions were captivated. In particular, they saw a way the nation could build its new capital city without spending taxpayers' money - indeed, could build it at a profit.
The plan was that the Commonwealth would "sell" Crown leases in Canberra to those who wanted to build houses or shops on them. The sale price would not be high. Every year, the landholder would pay rent to the Commonwealth, based on the value of the land. As the city grew, the land value would rise, and the rent would increase. Soon the rising rents would provide the money needed to develop the national capital, including its great public buildings.
By the time of Lady Denman's announcement in 1913, the legal machinery was in place to begin implementing this scheme. But enthusiasm was already on the wane. By 1920 only one federal MP remained a public supporter of Henry George.
Yet nobody told the Federal Capital Commission to change tack. The machinery for the great experiment continued unchanged. During World War I, most of the freehold land in the ACT was compulsorily acquired by the Commonwealth. By 1924 the Commonwealth was ready to issue Crown leases for the new suburbs, as intended when Canberra had been christened by Lady Denman barely a decade earlier.
The scheme failed almost immediately. Two things were necessary for its success. First, to keep out the speculators, you could not trade a Crown lease if you hadn't built on it. Second, the value of the land had to be reassessed every few years so that rents could increase in line with the increasing value.
Neither of these things happened.
In 1925 the Federal Capital Commission allowed people to trade vacant Crown leases rather than insisting on the return of the lease. The speculators were back in business.
And there were no regular valuations. Rents were fixed according to 1920s values for at least 20 years, so that revenue did not rise as the value of land increased.
As well, the grateful citizenry were less grateful than expected. In a country where home ownership was a universal aspiration, Canberrans were missing out on the wealth and security that came from owning their own home. Canberra residents moving interstate had little capital to buy a house in a freehold city like Sydney.
So what happened to land rents for householders? In 1970 the Gorton government sensed that the coalition had a chance of winning the by-election for the federal seat of Canberra. It abolished land rent for residential leases. (The electors of Canberra were not impressed: the coalition lost the byelection.)
From that date we have been a freehold city in all but name. We pay freehold prices to "buy" our block of land: it just so happens that we're buying a 99-year lease rather than a freehold title. We pay rates, not rent.
So why does the leasehold system remain? Inertia is a partial explanation, but there is another.
Leases turned out to be useful to regulate the planning of Canberra. In each Crown lease there is a "purpose clause" which sets out what can be built on a block and what it can be used for.
For most of us, the purpose is simple: to build a dwelling. But in commercial and industrial areas in particular, there are detailed restrictions on the size of a building, how much of it can be used for a shop and how much for a warehouse, and so on: micromanagement on a metropolitan scale.
In the glory days of the National Capital Development Commission in the '60s and '70s, the purpose clause was the way the planning system was enforced, block by block. There was no Territory Plan, and no Territory Planning Act.
On self government, the Commonwealth required the ACT to establish a planning authority and develop a Territory Plan. We were moving away from purpose clauses as the means to regulate town planning.
In 1995 a major inquiry concluded that Crown leases should not be abolished because purpose clauses were still an important means of planning the city.
That conclusion was questionable then: it's arguably wrong today. In 2013, Canberra has a detailed Territory Plan, with land zoned for all kinds of uses. The plan's requirements are directly enforced through one of the biggest pieces of territory legislation. A purpose clause that stands in the way of what the plan permits can usually be changed, perhaps with a change-of-use charge. This happens regularly and routinely.
So 100 years on, we still have a leasehold system that never achieved its purpose and which arguably has little to justify its continuation. But what might Canberra have been like if the experiment had been properly implemented?
Mobility from Canberra to other cities would be difficult. If you lived for 20 years in Canberra, you would not have much of an asset to sell to pay for a house in Sydney or to move down the coast. We would be a city of rich consumers with little property to show for our wealth.
By contrast, mobility into Canberra would be very easy. The cost of "buying" a lease would be relatively low. Affordability of housing would be measured more by the amount of rent paid each year than by the purchase price.
An ageing population would have brought problems. Many houses in the inner suburbs are occupied by retirees who are famously asset rich and income poor. But since land rent would be assessed on land value and paid annually, many retirees would find living in the family home prohibitively expensive without help.
For the government, the revenue base would be predictable and reliable, unlike today, where dependence on stamp duty and land sales puts government budgets at the mercy of the property market. But as with income tax, there would be an incentive for governments to keep land rents down. To make up for it they might release more land to encourage more people to rent. Households would thus be smaller, and there might be less incentive to encourage higher-density living in inner areas.
Land speculators and developers would be virtually non-existent. Before the cheers die down, we should remember that the public policy aim of most development has been to increase density and improve public transport. How would an ACT government redevelop Northbourne Avenue into a high-density corridor, for example, if it relied on land rents? Canberra might sprawl on a much greater scale than it does today, which is not desirable.
But because land rents would have amply paid for the development of the city, we could at least admire our impressive public buildings. The Supreme Court would be sitting in a majestic building that was actually big enough for its needs. The Legislative Assembly would be meeting in a Parliament as impressive as its counterpart in Darwin. Might we see a great civic library; a beautiful concert hall; an elegant Conservatorium of Music; a football Coliseum; a cricket ground to rival the SCG?
These are dreams: we have inherited a different city. In a few years from now, the oldest of our 99-year Crown leases will expire. The expectation is that the government will automatically replace old leases with new ones. But now is a good time to ask: is there any point in keeping the leasehold system? It is the product of an abandoned radical social experiment. Is it time to start a debate on whether it should continue for the next 99 years?
Christopher Erskine is a barrister in Canberra with an interest in the history of the city.