Introductory
The following chapter contains an account of the change which has been wrought by legislation in the position of the Irish tenant farmer and labourer during the last forty years. The change is large—the benefit and improvement equally great. The task is, however, not much more than half completed. The holdings purchased, or agreed to be purchased, by tenants under the Purchase Acts amount to about 378,000. There remain to be purchased about 227,000. The Congested Districts Board have done good work in the congested districts, but what has been done has hardly gone beyond the experimental stage. The experiments have, to a large extent, succeeded, but their very success enlarges the vista of work to be done in the future. The work of the District Councils in providing better dwellings for agricultural labourers is perhaps more nearly completed. Nevertheless, much still remains to be done.
Under the second section of the proposed Bill “to amend the provision for the Government of Ireland,” the “general subject matter of the Acts relating to Land [pg 167] Purchase in Ireland” is reserved. This would seem to include the Land Purchase work of the Congested Districts Board, but it is doubtful if it would include any part of the Labourers' Acts. Taken in conjunction with the whole scheme of the Bill, and especially with its financial provisions, the wisdom of this reservation is evident. That work which has gone so far and has been so beneficial in its operation should be stopped, or even hampered, in its development, would be an injury which, even the undoubted benefits a Home Government will bring with it would scarcely out-weigh. No doubt Ireland, if thrown altogether on her own resources, could, after a few years' time, continue the work of land purchase and could finally complete it, but the interregnum would be most mischievous. All those who had not purchased would be dissatisfied, and the Irish Government would be subjected to a pressure which they would find it hard to resist. The danger would be two-fold. On the one hand the Government might attempt to raise money at an excessive rate of interest and would thereby embarrass themselves financially; on the other hand an attempt might be made to force the Government to pass a “Compulsory Purchase Act” and to fix the price of purchase at a much lower figure than could be obtained under a system of free agreement. The Imperial Government itself runs no risk in reserving Land Purchase; on the contrary, it will run less risk under Home Rule than it does now. At the present moment, there is due to the Treasury a sum of about £71,000,000, money advanced for the purchase of land. The amount of the annual instalments payable on this sum is about £2,226,785, and on the 31st of March, 1912, there was due for arrears the sum of £44,156.120 The purchase [pg 168] annuitants have up to the present discharged their obligations in a most faithful and honest manner. There is not the slightest reason to think that they will act differently in the future, but if, as some political prophets seem to consider possible, they do, in the future, strike against the payment of the instalments they themselves will be the principal sufferers, for under the proposed Bill the Treasury may, out of the sum to be transferred to the Irish Government, before making the transfer, deduct each year the amount then due on account of purchase annuities. This, if it happened to any large extent, would render fresh taxation necessary—a contingency which would certainly not be desired by the Irish Government. The proposed Bill does not contain any specific provision giving power to the Irish administration, in the case of local repudiation, to make the counties in which repudiation had taken place repay to the Irish Treasury such sums as they had been forced to pay to the Imperial Treasury. If such a provision were inserted, it would make the position of the Treasury extremely secure.
When Mr. Gladstone introduced his first Home Rule Bill in 1886, the land war was at its height. The country was, on the one hand, full of intense and unreasoning bitterness and resentment, and, on the other hand, of unreasoning terror of the consequences of the change of administration. There are many persons, to-day convinced believers in the policy of Home Rule, who do not regret that the Bill of 1886 failed to pass. Things were not very much better in 1893, although, owing to the Land Act of 1881, the land war was slowly losing its fierceness. Since then a slow, but no less deep and far-reaching, change has passed over the tenant farmers of Ireland. The bitterness and discontent which rightly possessed them [pg 169] during the whole of the last century have at last given way to more kindly and contented feelings. This is due in a great measure to the large remedial measures passed first by Mr. Gladstone's Government of 1880 to 1895, and afterwards by the Conservative Administration between 1896 and 1905; but it is perhaps even more due to the feeling which has slowly grown up among the agricultural population that, at last, they are being listened to, and that their wants are being attended to, imperfectly, no doubt, but still with sympathy and with a desire to do what can be done to meet them. Whatever dangers may attend the granting of Home Rule now, they will not be the dangers which terrified and controlled public opinion in 1886 and 1893. Almost all the confusion, trouble, and crime of last century was due to the vicious absurdity of the Irish land code and to the miserable condition of the Irish tenant farmers produced thereby. That is now changed and Ireland has become a quiet and comparatively crimeless country. The danger which many foresee under a Home Government is of a different kind. It is rather that the overwhelming peasant vote may render the administration unduly parsimonious and so unwilling to place any additional burden on the owners of land that a kind of political stagnation may arise therefrom. Ireland cannot, of course, be kept permanently out of the great movements of European thought, but, for the moment, it may be safely alleged that in no part of Europe is property safer.
[pg 170]The occupiers of Irish agricultural holdings are of two classes—those whose farms are economic, and those whose farms are uneconomic. By an economic holding is meant one of sufficient productive capacity to support a family at a reasonable standard of comfort without help from outside sources. One class holds land of a fertility, quantity, and situation that enables the occupier to live at a reasonable standard of comfort out of the produce, and pay a rent. The other class also lives on and partly out of land, but land of a character, quantity, or situation that will not support a family at a proper standard of living without extraneous help. In the case of the first class, the fairness of the rent is the most important consideration; in the case of the second, the land and rent are often minor elements in the struggle for existence. The land is either so limited in amount or of so unproductive a character that, without outside help such as the wages of labour, or help from friends and relations, the income of this class would sink below the line necessary for subsistence, and actual starvation would ensue. It has often been pointed out that agricultural rent is in many cases paid in Ireland for farms out of which [pg 171] no true economic rent is earned. This means, as every economist knows, that, were the ordinary and necessary cost of production, including the remuneration of labour, deducted from the returns from the cultivation of land, no surplus would remain for the payment of rent. Consequently, the rent paid for such land is not true agricultural rent. It is more of the nature of house-rent paid by working men in towns, who, out of the wages that they earn in their various employments, spend certain portions in food, clothing, and shelter. But the Irish peasant, who tries to support his family on an insufficient farm, has not the advantage of having a demand for his labour at hand. He has either to emigrate, to migrate, or to live below the proper standard of decency and comfort. Consequently, he is neither in the position of the farmer nor of the labourer. He is the occupier of a piece of land on which he builds his cabin, and pays a rent which is supposed to be agricultural, but which is really not earned out of the land, but is paid out of whatever other supplementary income he is able to obtain by working for wages in other countries; or by contributions from outside sources. The Irish Fair Rent Acts are supposed to deal only with agricultural holdings. The rents fixed under them are intended to be agricultural and economic rents. It is evident to anyone who has examined the circumstances of the small holdings of the West of Ireland, that the rents assessed on them under the Land Acts in many cases are not agricultural rents, but are payments more of the nature of site rents, or the rents of non-agricultural holdings, which were not supposed to be subject to the provisions of the Irish Fair Rent Acts at all. Were the Land Acts strictly administered, unquestionably the greater portion of the small holdings on the western seaboard and other [pg 172] parts of Ireland would have been excluded, and applications to fix agricultural rents on them would have been dismissed.
The importance of the view here put forward lies mainly in the fact that until the passing of the Act of 1891, under which the Congested Districts Board was created, no attempt was made to distinguish between the two classes of occupiers of Irish land. The occupiers of economic and uneconomic farms were subject to the same laws, and were treated in the same manner. No attempt was ever made to distinguish between the man who could make his rent out of his land and the man who could not. Both were included in the Fair Rent provisions of the Act of 1881, as it was administered, and a rent was assessed on what was practically the site for a cabin as if it were a farm. This confusion of treatment of two different problems renders it necessary to trace the evolution of the Irish Land Acts if we are to understand intelligently the problem that presents itself in dealing with congestion in Ireland, and it is accordingly proposed to sketch shortly the steps by which Irish land legislation has advanced, and how it at present deals with the various classes of holdings that have to be taken into consideration.
Special treatment for the congested districts was not thought of in the earlier remedial Land Acts. The Act of 1881, if strictly administered, as we have seen, would have excluded most of the holdings in such districts. After twenty years' experience of this Act it was found that its provisions, even though amended [pg 173] repeatedly, did not meet the special difficulties. The Congested Districts were not withdrawn from the operations of the various Land Acts—merely additional powers were given for ameliorating the condition of the people in the defined localities.
The Land Act of 1881 is naturally regarded in Ireland as the sheet-anchor of the peasant—as the Magna Charta of his rights. On the other hand, it has been looked on by many land-owners as an unjustifiable invasion of their rights, and it has often been blamed for results which it recorded rather than caused. To justify that Act of 1881, we must understand the preceding conditions that governed the tenure of land in Ireland.
Complaints against Irish rents are not confined to recent years or to the last century. A continuous stream of emigration of Protestant dissenters from Ulster went on during the early part of the eighteenth century, and the Irish Government of the day was much concerned at losing so many of their most loyal citizens. In 1729 the Lord-Lieutenant forwarded a report on the subject to the King, which states:
Complaint was also made of the uncertain tenures, the short leases, and “the usual method of late when lands are out of lease,” which was “to invite and encourage all persons to make proposals and set them to the highest bidder without regard to the tenants in possession.”
The relation of landlord and tenant in Ireland was, down to the year 1860, based on tenure, not on contract. The old feudal tenures imported from England were, during the last two or three centuries, modified and altered by the existing Irish customs. The result was that a period of much doubt and confusion arose, and an extraordinary collection of Acts dealing with land was placed on the Irish Statute Book. In the reign of George III. upwards of sixty of these Acts were passed for Ireland, while six sufficed for England. The following reigns were equally productive in agrarian legislation, and the condition of the occupiers became more and more unsettled and unsatisfactory, and “wild doctrines,” to quote the words of the eminent authors of a standard work on Irish Land Tenure, published in 1851, were agitated, including “extravagant demands for fixity of tenure and compulsory valuation of rents.”
The relation of landlord and tenant, based on tenure that prevailed down to the year 1860, gave no security of occupation to the tenant, and did not protect his improvements, but the cost of ejectment and the legal difficulties of proof that accompanied it exercised a powerful restraining influence in preventing capricious eviction.
During the eighteenth and early part of the nineteenth centuries, while many Irish tenants held under leases or written contracts the great majority were tenants from year to year. Under the Common Law both in England and Ireland, the right of the landlord to recover possession of the land in the case of a lease [pg 175] or written contract depended on the covenants and conditions in the contract, and no ejectment could take place unless for “a condition broken.”
In the case of tenancies not created by writing—tenancies from year to year—there was no power of eviction for non-payment of rent under the Common Law. The tenant of such a tenancy could only be ejected by a notice to quit, which notice must expire with the termination of the year of his tenancy. This system caused much difficulty to the landlord, as the onus lay on him of proving the commencement of the tenancy, and, frequently, even where the tenant had failed to pay the rent, eighteen months passed before possession could be obtained.
The Common Law of England and the tribunals that administered it discouraged the forfeiture of tenants' interests, and the landlord was held strictly to the technical proofs required by law.
In Ireland a different course was followed. The Irish “Ejectment Code,” which originated in the reign of Queen Anne, had for its object, to quote an eminent Irish lawyer, the expediting and facilitating the eviction of the tenant. It got rid of every formality by which the old Common Law delayed and obstructed the forfeiture of the tenant's estate. Statute after Statute was passed for this purpose. The whole principle of the Common Law was reversed. Chief Justice Pennefather judicially declared that it was a code of law made solely for the benefit of the landlord, and against the interest of the tenant, and that it was upon this principle that judges must administer and interpret it.
The landlord who sought to evict a tenant holding under lease was, down to the year 1816, obliged to proceed in one of the Superior Courts of law, a practice which caused much expense and delay. When the European peace came in 1815, after the Battle of Waterloo, the fall in agricultural prices rendered it difficult, if not impossible, for tenants to pay the high rents which had been fixed while war prices ruled. An Act was immediately passed (56 George III., c. 88) which enabled an ejectment to be obtained in the County Courts at a small cost, and without delay. In this respect Ireland was forty years ahead of England, as a similar jurisdiction was not given to the English County Courts until 1856.
The Irish Ejectment Code applied only to tenants holding under leases or written contracts. As the country advanced, landlords gradually ceased to give leases, and the great majority of small tenants held from year to year. To meet this state of things the Civil Bill Court Act of 1851 extended the ejectment for non-payment of rent to tenancies from year to year. Under the English statutes no similar power was given, and the English landlord was obliged in the case of non-payment of rent to first serve the tenant with a Notice to Quit, and then proceed to evict him by the slow and costly process of an action in the Superior Courts.
From this sketch it will be seen that the law governing the relations of landlord and tenant in Ireland became more and more favourable to the owner. This [pg 177] tendency culminated in 1860, when, by “Deasy's Act” (23 & 24 Vic., c. 154)—which was passed through Parliament without amendment—the relation between landlord and tenant was defined as founded on contract and not upon tenure. The Act proceeded on the assumption that the land is the exclusive property of the landlord, and that the tenant's interest is nothing more than that of a person who has agreed to pay a certain remuneration for the use of the soil for a limited period. It simplified and increased the remedies of the landlord for recovering possession of the land, and rendered efficient the law of ejectment for non-payment of rent and on notice to quit. Thus a default in payment of one year's rent entitled a landlord to evict the tenant and get possession of the land, with all improvements on it, even where such improvements many times exceeded in value the amount due. So also, by serving a Notice to Quit, the landlord could similarly get rid of the tenant without cause, and take possession of the holding and all its improvements, no matter how valuable these might be, and without having to pay any compensation. The governing principle of the Act was that whatever attached to the freehold became part of the freehold.
During the ten years after the passing of “Deasy's Act” the position of the Irish tenant reached its nadir. He had no right of any kind, except such as the contract under which he held gave him. Almost all the improvements which rendered the land capable of being worked were made by him. He had built the houses, erected the fences, made the roads, drained and manured the [pg 178] land, reclaimed it from bog or mountain—generally at a cost out of all proportion to the return—and yet he could be turned out without compensation at the will of the owner, either by the service of a Notice to Quit or by ejectment for non-payment of one year's rent. That the tenants in Ireland made the improvements was universally admitted. The Devon Commission (presided over by a leading Irish landlord) in the year 1844, reported:
In the early part of the last century the landlords, for political as well as commercial reasons, encouraged the increase of the tenantry. The political system that prevailed gave the landlord who had a large number of tenants considerable power. The economic conditions of the time made small tillage farming productive, and the demand caused by an ever-growing [pg 179] agricultural population increased the competition for land, and enabled the rents to be raised. About the middle of the century all these conditions altered. The combined influence of the Famine and of the introduction of Free Trade made it the interest of most landlords to get rid of their small tenants as expeditiously and as completely as possible. Now came the era of pasture and larger farms. Although the population rapidly decreased, the consolidation of farms kept up the competition for land, and rents rose rapidly. The clearances so common from the Famine to 1870 were made in many cases quite irrespective of the non-payment of rent.
This state of things led to outrage and constant agrarian disturbance. Various suggestions for reform of the Land Laws were made, but such proposals were usually denounced as confiscatory. Mr. Butt's proposal in 1866 that sixty-three years' leases, with power to the landlord of varying the rent, when any accidental circumstances increased the value of the land, should be given by every landlord to his tenants, was described by Lord Dufferin as “communistic” and “as subversive of the rights of property.” Mr. John Stuart Mill, speaking on a Land Bill introduced by Mr. Chichester Fortescue (May 17th, 1865), denounced the policy of clearing away the small tenants to make room for capitalist farmers. “You cannot,” he said, “evict a whole nation.” Various attempts to alter the law were defeated, until at length, in 1870, Mr. Gladstone took the matter in hand, and passed his Landlord and Tenant Act—the beginning of a new Land Code.
The justification for the Act of 1870 was the same [pg 180] as for the Act of 1881, which followed it. The tenant had made all the improvements on the land, and yet had no legal property in them. He was liable to capricious eviction from a holding, the value of which was often mainly due to his labour, and he was subject to arbitrary increases of rent.
The Act of 1870 did three things: (1) It gave compensation for disturbance; (2) it gave compensation for improvements; and (3) it legalised the Ulster Tenant Right Custom.
Compensation for Disturbance.
I.—Compensation for disturbance was strictly limited to such loss as “the Court shall find” to have been sustained by the tenant. The loss was often held to be the less the higher the rent. The amount of compensation could in no case exceed £250, and was limited to tenancies created after the passing of the Act. No compensation was to be given to tenants who had sublet or subdivided their holdings without the consent in writing of the landlord, or to any tenant under a lease for thirty-one years or upwards, and the landlord had a right of deduction from the amount awarded, for deterioration, &c.
Compensation for Improvements.
II.—The right to compensation for his improvements to be awarded to a tenant when quitting his holding was subject to so large a variety of exceptions as to greatly limit the number of tenants able to take advantage of the provision.
Even when compensation was awarded, the landlord could deduct from the amount any arrears due for rates and taxes and for the loss due to the non-observance of express or implied covenants or [pg 181] agreements, and the Court in awarding compensation was required in reduction of the claim of the tenant to take into consideration the time during which the tenant had enjoyed the advantages of such improvements, and also any other benefits he had had.
Ulster Custom.
III.—The legalization of the Ulster Custom did not prevent the landlord from increasing the rent from time to time so as almost to destroy the tenant's interest. The Act did not define the custom, and the onus lay on the tenant of establishing that the particular usage under which he held was within it.
The three great reforms introduced by the Act of 1870, namely: (1) The right to compensation for disturbance; (2) to compensation for improvements; and (3) the legalization of the Ulster Custom—could only be brought into operation by proceedings before the County Court Judges, who were thus entrusted with the administration of the Act.
The Act of 1870 failed in its object mainly for three reasons:
(1) The great variety and complexity of the exceptions from the benefits of the Act.
(2) The principle of administration which, as a rule, tended to reduce the compensation to as low a figure as possible.
(3) The insecurity of tenure of the tenant, and the right the landlord still had of raising the rent at his pleasure. Thus the legalization of the Ulster Custom was of little use, as the landlord could practically destroy all the tenant's interest under [pg 182] it by raising the rent. The only remedy was to surrender the holding and go before the County Court Judge for compensation, which was usually much less than the tenant-right would fetch if sold in the open market.
To protect the interest and property of the tenant in his holding and in his improvements, both of which had now legal recognition—it was necessary to give him: (1) Security of tenure at a fair rent; and (2) a special and expert tribunal to decide on the amount of the rent at which he was to hold.
The Act of 1881 effected these reforms. It gave the tenant the right to sell his interest in his holding—subject to the landlord's right of pre-emption—it gave fixity of tenure at a fair rent—subject to a fifteen years' re-valuation—and it established a special tribunal to fix the rents.
The principles of the present Irish Land Code—which comprises a large number of statutes—are contained in the Acts of 1870 and 1881. The Act of 1870 recognised for the first time that the Irish tenant had a right of occupation and a property in his improvements. But the Act failed because it recognised these rights grudgingly, and left untouched the power of the landlord to fix what rent he pleased. The Land Act of 1881 for the first time safeguarded the property of the tenant, and reversed the policy of the Act of 1860 (Deasy's Act) by removing the Irish Land system from the domain of contract, and, in a manner, bringing it back to tenure.
To understand the agrarian situation in Ireland it is necessary to keep in mind the fundamental difference [pg 183] between the English and the Irish systems, which was pointed out in the Report of the Devon Commission. In England, speaking generally, agricultural farms are let by the owners fully equipped with buildings, fences, farm roads, and other improvements necessary for the proper working of the holding. The tenant contracts to pay a rent for the farm so equipped, and, if he finds that the particular holding does not suit him, he gives it up at the end of his contract term, and goes elsewhere. Under this system, what Adam Smith termed “the higgling of the market!” is the easiest test of land value, as it is of all other commodities with regard to which competition is free. In Ireland, on the other hand, the landlord, speaking generally, owns only the soil. The equipment of each farm is the property of or has been effected by the tenant, who is practically a hereditary occupier. The houses, fences, drainage, reclamation, farm roads, and other such necessary improvements have been made by the tenant or his predecessors in title. The landlord owns the soil, and the tenant the necessary agricultural equipment. Consequently, the tenant is not free. He cannot walk out at the end of his term and leave behind him his houses, roads, fences, and drains. Besides, if he goes out, he has nowhere else to settle.
The pressure of competition is so great—as is natural in a country in the greater part of which there is no other employment or industry than that of agriculture—that, very large sums, often far in excess of the value of the land, measured by any standard of productive capacity are paid for the mere right to occupy. Again, the nature of the land, in large parts of Ireland, is such as to prevent owners from working it on the English system of equipped farms. In the poorer parts of the country the land can only be made to yield a profit to [pg 184] the owner by being worked by small occupying tenants, who, without any economic return, are willing to expend their labour and that of their families. Were such land to be handed back to the owners to be worked by them without the intervention of tenants no profit could be obtained, and the land would go out of cultivation, being below the margin of economic profit.
Here we have the explanation and the justification of the series of Land Acts from 1870 to 1896. They were an attempt to adjust the law of landlord and tenant to the facts of the case. Before 1870 the law regarded the landlord as the sole owner of the farm, while, in fact, the tenant was the co-owner. The Act of 1870 recognised, to a limited extent, the co-ownership, but gave insufficient relief. The Act of 1881 gave a more complete recognition and relief, and various amendments and extensions were introduced by subsequent Statutes.
Side by side with the legal recognition of dual ownership in Ireland there proceeded a system for the creation of a peasant proprietary by the aid of State loans, when both parties were agreed. The principal Acts under which advances of public money to enable tenants to become proprietors of their holdings were made are:
Under this Act the Church Temporalities Commissioners were empowered to sell to tenants of Church Lands their holdings at prices to be fixed by the Commissioners themselves. If the tenants refused to buy on the terms offered to them, the Commissioners could sell to the public. The Church Temporalities Commissioners were empowered, if they thought well, to take payment, as to one-fourth only, in cash and to leave the other three-fourths outstanding as a legal charge on the holding, to be paid off in thirty-two years by sixty-four half-yearly instalments.
The Commissioners sold in all to 6,057 tenants at an average price of twenty-two and two-thirds years' purchase of the rents, and the total amount of the money advanced on loan was £1,674,841, which was issued by the Commissioners of Public Works.
The terms of repayment and the rate of interest charged on loans were afterwards altered and reduced under the Purchase of Land Act of 1885, Section 23.
Under what are known as the “Bright Clauses” of this Act, the landlords and tenants of agricultural or pastoral holdings could arrange for a sale of their holdings with State aid to be carried out in the Landed Estates Court. Upwards of two-thirds of the price agreed upon could be advanced by the Board of Works, to be repaid in thirty-five years by an annuity, at the rate of five per cent. on the loan. Under this Act 877 tenants purchased their holdings, and the amount [pg 186] of loans issued was £514,536. The total purchase money paid by the tenant purchasers for their holdings was £859,000, being at the rate of twenty-three and one-third years' purchase of the rents.
Under this Act the Land Commission thereby established was empowered to make advances to tenants for the purchase of their holdings, and was enabled to purchase estates for re-sale to the tenants. The limit of advance was extended from two-thirds of the purchase-money (as in the Act of 1870) to three-quarters. The terms of repayment were the same—an annuity of five per cent. for thirty-five years.
Upwards of 731 tenants purchased under this Act, and the advances made amounted to £240,801. These included advances to 405 tenants on seven estates bought under the Act (Section 26) by the Land Commission in the Landed Estates Court.
Under this Act—commonly known as the “Ashbourne Act”—a sum of £5,000,000 was authorised to be advanced to the Land Commission to enable sales to be carried out between landlords and tenants by agreement, and to enable the Land Commission to purchase estates in the Landed Estates Court for the purpose of re-selling them to the tenants. The Land Commission was empowered to advance the entire of the purchase-money subject to the retention of one-fifth by way of guarantee deposit for a period of about seventeen and a half years, by which time an equivalent amount of the capital advanced had been repaid by means of the sinking fund. This deposit [pg 187] could be utilised if the tenant purchaser made default in his repayment, and if the amount in default could not otherwise be recovered. Thus the landlord vendor was made a guarantor for the repayment of the annuity by the tenant purchaser. (Section 3.)
The advances made under this Act were to be repaid by annual instalments (which included interest and sinking fund), extending over a period of forty-nine years.
In 1888, the £5,000,000 given under the Act of 1883 being practically exhausted, an additional sum of £5,000,000 was advanced to the Land Commission for the purposes of land purchase (51 and 52 Vic., c. 49). Under the “Ashbourne” Acts 25,367 tenants (on 1,355 estates) became purchasers of their holdings, and the loans made amounted to £9,992,536. The rate of sale was seventeen years' purchase of the rents. (Report of the Irish Land Commission, 1902, p. 89.) Under these Acts 101 estates were purchased in the Landed Estates Court for re-sale to tenants, and loans were issued to 2,029 tenants, amounting to £531,277.
The funds advanced to the Irish Land Commission for the purposes of land purchase having again become exhausted, Mr. Balfour, in 1891, introduced a new system under which the landlord or vendor was paid in a specially created guaranteed Land Stock (exchangeable for Consols at the option of the vendor), equal in nominal amount to the purchase money. This stock bears interest at the rate of 2-¾ per cent. per annum, and cannot be redeemed until the expiration of thirty years from the date of the passing of the Act of 1891. The dividends and sinking fund payments [pg 188] required for this stock are paid out of a “Land Purchase Account,” established by the Land Commission (Section 4), to which all moneys received on account of any purchase annuity for the discharge of an advance are paid. If this Land Purchase Account is at any time insufficient to meet the dividends and sinking fund payments (owing, for instance, to default in the repayment of instalments), the deficiency is to be a charge on a “Guarantee Fund,” established for the purposes of the Act (Section 5). This fund consists of a cash portion and a contingent portion. The cash portion is mainly made up of the Irish Probate Duty (now Estate Duty) grant, and an Exchequer contribution, and the contingent portion consists of the Irish share of the local taxation (Customs and Excise) duties and certain local grants (Section 5). Any deficiency in the Land Purchase account is to be paid out of this Guarantee Fund. This financial expedient, of course, throws the securing of the repayment of the advances for land purchase on the ratepayers of the county, as any default will be recouped by deductions from the various payments and contributions in aid of rates that make up the Guarantee Fund. The amount of stock that could be issued for each county for purposes of Land Purchase was limited to twenty-five times the share of the county in the guarantee fund by the Act of 1891 (Section 9). This limit, having been reached in the case of Co. Wexford, by Mr. Wyndham's Purchase of Land (Ireland) Act, 1901 (1 Edw. VII., c. 3) the limit was extended to fifty times the share of that county in the guarantee fund. By the Act of 1903 (Section 46) the limit for each county was raised to thirty times its share in the guarantee fund, which limit might be further raised to sixty times where the Treasury, on the certificate of the Lord-Lieutenant, [pg 189] were of opinion that such increase in advances could be made without any risk of loss to the Exchequer.
Taken on the basis of the financial year 1909-10 the Guarantee Fund for all counties of Ireland amounted to £2,797,126. On the above figures the capitalized value of the Guarantee Fund on the thirty times basis is at present £83,913,780, but owing to increases beyond this thirty times limit which have been sanctioned by the Treasury, in certain counties the present capitalized value of the fund stands at £89,323,685.
The total charge on the fund up to March 31st, 1910, was about 48-¾ million pounds in respect of advances made on the security of the fund, and, taking pending applications for advances into account, the approximate charges amounted at that date to about 105 millions.
The Act of 1891 was amended in various respects by Mr. Gerald Balfour's Act of 1896, which introduced, among other changes, a method of reducing every decade (up to thirty years after the advance was made), the annuity to be paid by the tenant purchaser. As under the “Ashbourne Act” of 1885, this annuity was calculated at £4 per cent. on the purchase money, 2-¾ per cent. being for interest, and 1-¼ per cent. being for sinking fund. Under Mr. Gerald Balfour's system, during the first decade after the purchase the annuity is calculated on the original advance, and during the second and third decades on the portion of the advance which is ascertained to be unpaid at the end of the previous decade. At the end of the third decade the annuity is calculated on the amount of the advance then outstanding and runs until the entire debt is paid off. The Act of 1896 also permitted the Land Commission to dispense with the whole or any part of the guarantee deposit required under the Act of 1885 if [pg 190] the security for the repayment of the advance was considered to be sufficient without it (Section 29).
The number of loans issued under these Acts of 1891 and 1896 to tenant purchasers up to March 31st, 1910, was 46,828, amounting in all to £13,145,762, and being at the rate of 17.7 years' purchase of the rents (Land Commission Report, 1910, p. 110).
I have traced the history of the Irish Land Acts down to 1896. Some short Acts were added to the code during the following years to clear away certain difficulties, and in 1903 Mr. Wyndham brought in and passed his Irish Land Act, which may be said to have opened a new era in Irish agrarian legislation. Under it a new body known as Estates Commissioners was formed, and included in the Land Commission to administer land purchase in Ireland.
Sales under previous Purchase Acts were carried out by holdings. A landlord could agree with one or more of his tenants to sell them their farms, and if the Land Commission, after examination, found that the particular holding was security for the advance asked for by the tenant, such advance was made irrespective of any other sales on the estate. The Act of 1903 introduced the system of sales by “Estates.” A landlord, to obtain the benefit of the Act, is obliged to sell his entire estate, or such portion of it as the Land Commission considers fit to be regarded as a separate estate for the purposes of the Act. The Commissioners, before defining any lands to be an estate, have to consider all the circumstances of the district and of the property. Once the estate is “declared,” the holdings comprised in it are dealt with in accordance with the provisions of the Act. Those of them that are subject to judicial [pg 191] rents and are within certain “zones” laid down in the Act are freed from the liability to inspection as to security or equity of price. The Act presumes that a holding subject to a judicial rent which is sold at a price the annuity on which is from 10 to 30 per cent. less than the judicial rent, where that rent was fixed since the passing of the Act of 1896, or from 20 to 40 per cent. less where the rent was fixed before that date, is good security for the payment of the annuity, and that the agreed price is equitable. Holdings not subject to the “zone” provisions are liable in inspection as to security and as to equity of price.
The Act also introduced the system of sales of estates to the Commissioners under Section 6 (the direct sales to tenants by landlords being under Section 1). When a landlord is willing to sell in this manner, the Commissioners, after due enquiry as to the price that should be paid by each tenant for his holding, may offer to purchase the estate for the purpose of re-selling to the occupiers, provided that at least three-fourths of the tenants agree to purchase their holdings from the Commissioners at the estimated price.
To encourage sales of estates, and to enable owners to get such a sum as would give them their net income out of the purchase money, when reinvested in suitable securities, the Act provided that a bonus of 12 per cent. on the purchase money should be paid to the owner on the completion of the sale. At the same time the tenant was enabled to borrow the purchase money of his holding on easier terms. As we have seen, under the former Purchase Acts, the annuity rate was fixed at 4 per cent., of which 2-¾ per cent. was for interest and 1-¼ per cent. for a sinking fund, the accumulation of which, with compound interest, would repay the sum advanced in about forty-three years. Under the Act of 1903 the [pg 192] annuity rate which the tenant had to repay was reduced to 3-¼ per cent., of which 2-¾ per cent. is for interest and a ½ per cent. for sinking fund. This reduction in the sinking fund lengthens the period over which the repayment will extend to sixty-eight and a half years, and, of course, renders it practically impossible to continue the system of giving decadal reductions in the annuities. The decadal reductions, which were abolished by the Act of 1903, worked out at about 15 per cent. reduction in the annuity every ten years.
The Act of 1903 also enabled owners to sell their demesnes and untenanted lands to the Commissioners, and to repurchase them, or so much of them as the Commissioners approved, with the aid of advances made to them in the same manner and under the same conditions as to tenant purchasers.
The Act also gave considerable powers to the Commissioners of dealing with poor and uneconomic holdings. It enabled (Section 2) parcels of untenanted lands on the sale of an estate to be sold to the following persons:
(a) A person being the tenant of a holding on the estate;
(b) A person being the son of a tenant of a holding on the estate;
(c) A person being the tenant or proprietor of a holding not exceeding five pounds in rateable value, situate in the neighbourhood of the estate; and,
(d) A person who within twenty-five years before the passing of this Act was the tenant of a holding to which the Land Law Acts apply, and who is not at the date of the purchase the tenant or proprietor of that holding: Provided that in the case of the death of a person to whom [pg 193] an advance under this paragraph might otherwise have been made, the advance may be made to a person nominated by the Land Commission as the personal representative of the deceased person.
This last class (d) was intended to provide for the reinstatement of tenants evicted from their holdings within the prescribed time.
It also gives power to the Commissioners to purchase untenanted lands for the purpose of enlarging holdings and of creating new holdings, and to enable this work to be carried out satisfactorily, the Land Commission is given all the powers conferred on the Congested Districts Board by their Act of 1901 for facilitating re-sales of land.
A large number of evicted tenants had been reinstated in their holdings under the Act of 1903 or had been provided with new holdings where their former holdings were not available. Large sums of money (drawn from the Reserve Fund established under the Act of 1891, which was made available by Section 43 of the Act of 1903) were expended in equipping these holdings and in financing reinstated tenants where in the opinion of the Estates Commissioners this was necessary. The provisions of the Act of 1903 were, however, found to be insufficient to carry out the intentions of the legislature, and in 1907 Mr. Birrell passed an Evicted Tenants Act which enabled the Estates Commissioners to acquire untenanted land compulsorily for the purpose of providing holdings for tenants who, or whose predecessors, had been evicted from their holdings since the year 1878, and who had applied to the Commissioners before May 1st, 1907. Up to March 31st, 1911, as many as 12,398 persons had applied for holdings [pg 194] as Evicted Tenants. Of these 6,276 were rejected by the Commissioners after enquiry; 2,631 did not apply within the prescribed time; 2,830 were actually reinstated in holdings; and 661 were still under consideration by the Commissioners.
After six years' experience of the Act of 1903 it became evident that further legislation was required if Land Purchase was to go on. In two important matters Mr. Wyndham's Act needed amendment. Under the financial provisions of the Act the money required for advances to enable tenants to purchase their holdings was provided by the issue of a Stock bearing interest at 2-¾ per cent. But it turned out that at no time after the passing of the Act could the money be raised on these terms, except at a large discount averaging over 12 per cent. The Act provided that a fund known as the Irish Development Grant should bear any loss due to the issue of Stock at a discount. This Fund made available a sum of £160,000 a year. The first issue of Stock under the Wyndham Act was made at 87, or a discount of 13 per cent. Thus, to provide £100 in cash over £113 of Stock had to be issued. The interest on this “excess Stock” was not paid by the tenant purchasers, and was to be provided for out of the Development Grant so long as that Fund was available, and afterwards would fall on the Guarantee Fund, which meant the Irish Ratepayers. In the year 1909 it, however, appeared that the charge for “excess Stock” necessitated by the continual flotation of Stock at a large discount had so eaten into the Development Grant that that Fund had become exhausted, and consequently all subsequent issues of Stock for Land Purchase purposes would have to be [pg 195] made at the expense of the Ratepayer. Agreements amounting to 56 millions of Purchase Money were pending. To finance these Agreements a sum of about £250,000 a year for the period of sixty-eight and a half years would have to be provided by Irish Ratepayers, and were all the agricultural land in Ireland to be sold the charge on the ratepayers would amount to an annual sum of £877,000.
It became evident that the Irish Ratepayers would not tolerate Land Purchase on these terms. Mr. Birrell, accordingly, by his Land Act passed in December, 1909, provided that the charge for excess Stock to finance all pending Purchase Agreements should be provided by the Treasury instead of the Ratepayers, thus relieving the latter of a capital sum that might exceed over £7,000,000. As regarded future Purchase Agreements, the Act provided that the Vendors should be paid in 3 per cent. Stock, and that Purchasers should pay an Annuity of 3-½ per cent. instead of 3-¼ per cent.
The other matter in which the Act of 1903 required amendment was as regards the provision of the Bonus. A sum of 12 millions was provided by Mr. Wyndham for the purpose of encouraging landlords to sell. On the assumption that £100,000,000 would be sufficient to complete Land Purchase, this Bonus Fund was distributed at the rate of 12 per cent. on the Purchase Money advanced. This rate was to be continued for a period of five years. On the expiration of that period (November 1st, 1908) it was found that proceedings for sale of Estates had been instituted to an amount of between 70 and 80 millions, and that the amount remaining to be sold would probably approximate to another 80 millions. The Treasury accordingly, in accordance with powers given them in the 1903 Act, [pg 196] reduced the percentage from 12 to 3 per cent. at which rate it would remain for at least five years were a new Act not passed. Mr. Birrell's Act, however, removed the 12 million limit, and provided for the payment of a graduated Bonus at rates ranging from 3 to 18 per cent., according to the number of years' purchase of the rent at which the landlords sell. The old rate of Bonus tempted landlords to stand out for a high price: the new graduated rate offers an inducement to them to sell at a low price. It was calculated that under the new provisions the capital sum for Bonus would amount to at least 15 millions, which is likely to cost over 17 millions, owing to the necessity for excess Stock.
As before stated, Agreements representing 56 millions of purchase money were awaiting completion through the Land Commission in 1909. In 1903 it had been calculated that the annual output of the Land Commission would be five millions, and at that rate it would take more than eleven years to complete these agreements. The block was due partly to the difficulty of raising more than a limited amount of money in each year; partly to the impossibility of any department dealing with more than a limited number of sales in a year; and partly to the great rush of applications in 1908 when the bonus revision was impending. The Act of 1909, in order to relieve the block, gave Vendors under pending agreements an option to take 2-¾ per cent. Stock at 92 (3 per cent. investment) in whole or part liquidation of their Purchase Money. By virtue of certain statutory regulations, all Vendors who exercise this option will be paid in a special priority sometimes years sooner than if they elected to be paid entirely in Cash. Cash Sales, Stock Sales, and Future Agreements are dealt with pari passu, each class claiming on a separate fund.
[pg 197]Land Purchase under the voluntary system operated least of all in places where its operation would have been most beneficial, and the congested districts derived comparatively little benefit from the Act of 1903.
The following table gives a summary of the number of tenant purchasers and the amount of advances issued under the various Acts from 1869 to March 31st, 1912:
Table I
| Act. | No. of Purchasers. | Amount of Advances. |
| I—Irish Church Act, 1869 | 6,057 | 1,674,841 |
| II—Landlord and Tenant Act, 1870 | 877 | 514,536 |
| III—Land Law (Ireland) Act, 1881 | 731 | 240,801 |
| IV—Land Purchase Acts, 1885, 1887, 1888, and 1889 | 25,367 | 9,992,536 |
| V—Land Purchase Acts, 1891, 1896 | 46,810 | 13,633,665 |
| VI—Irish Land Act, 1903 | 144,630 | 48,824,884 |
| VII—Evicted Tenants Act, 1907 | 641 | 356,487 |
| VIII—Irish Land Act, 1909 | 5,062 | 1,435,175 |
| Total | 230,175 | 76,672,925 |
The following represent the Number of Purchasers and Advances—comprised in cases at present pending under the 1903 and 1909 Acts, (i.e., on March 31st, 1912).
Table II
| Purchasers. | Advances applied for. | |
| Act of 1903 | 118,360 | 35,794,157 |
| Act of 1909 | 40,733 | 7,094,725 |
(Includes lands of an estimated value of £4-½ millions for the purchase of which the Congested Districts Board are in negotiation.)
[pg 198]Table III
Table giving (1) the Number of Holdings; (2) Area; (3) Poor Law Valuation; and (4) the Purchase Money of (a) Lands Sold and Vested; (b) agreed to be Sold but not yet Vested; and (c) in respect of which proceedings for sale had not been instituted up to March 2nd, 1912:
| (a) Lands sold and vested in purchasing tenants, or in the Estates Commissioners or Congested Districts Board, for resale to Tenants. | b) Lands agreed to be sold but not yet vested in purchasing tenants (including lands comprised in Estates for the sale of which to the Estates Commissioners and Congested Districts Board proceedings have been instituted. | (c) Lands in respect of which proceedings for sale have not been instituted under the Land Purchase Acts (the estimated Purchase Money of same being calculated on basis of Purchase-Price of Poor Law Valuation of lands sold to March 31st, 1910, under the Act of 1903). | ||
| Acts 1870-1896. | ||||
| Number of Holdings | 73,812 | 73,812 | ||
| Area | 2,508,938 | 2,508,938 | ||
| Poor Law Valuation | £1,399,188 | £1,399,188 | ||
| Purchase Money | £24,779,176 | £24,779,176 | ||
| Acts 1903-1909. | ||||
| Number of Holdings | 143,618 | 167,319 | ||
| Area | 4,637,183 | 4,291,725 | 7,301,798 | 16,230,706 |
| Poor Law Valuation | £2,418,136 | £2,250,372 | £3,993,971 | £8,662,479 |
| Purchase Money | £49,202,298 | £45,536,851 | £82,263,747 | £177,002,896 |
| Gross Totals. | ||||
| Number of Holdings | 217,430 | 167,319 | ||
| Area | 7,146,121 | 4,291,725 | 7,301,798 | 18,739,644 |
| Poor Law Valuation | £3,817,324 | £2,250,372 | £3,993,971 | £10,061,667 |
| Purchase Money | £73,981,474 | £45,536,851 | £82,263,747 | £201,782,072 |
Note.—This Table is based on the assumption that all the land in Ireland valued as agricultural land will come under the operations of the Land Purchase Acts.
[pg 199]Table IV
Table giving Rates of Annuity (distinguishing amounts for Interest and Sinking Fund) and number of years payable under the various Land Purchase Acts:
| Purchase Act. | Rate of Annuity. | Rate of Interest comprised in Annuity. | Rate of Sinking Fund comprised in Annuity. | Number of years payable. |
| 1881 | 5 | 3-½ | 1-½ | 35 |
| 1885 | 4 | 3-1/8 | 7/8 | 49 |
| 1891 | 4 | 2-¾ | 1-¼ | 49 |
| 1896 | As in Act of 1891, subject to decadal reduction. | 73 | ||
| 1903 | 3-¼ | 2-¾ | ½ | 68-½ |
| 1909 | 3-½ | 3 | ½ | 65-½ |