The Framework of Home Rule Part 23
(2) The tenant's annuity is raised from 31/4 to 31/2 per cent.
(3) The period of redemption is reduced from sixty-eight and a half years to sixty-five and a half years. (4) The landlord's bonus is allocated on a graduated scale, under which the higher the price the land is sold at, the less is the bonus conferred. These changes, though no doubt somewhat prejudicial to the prospects of Land Purchase, were absolutely necessary, owing to a cause beyond human control--the condition of the money-market.
(b) In regard to pending purchase agreements arrived at under the old Act, no alteration is made in the terms of the bargains already concluded between landlord and tenant; but changes are made in the method of financing these agreed sales. Briefly, parties can obtain priority in treatment among the enormous ma.s.s of cases awaiting the decision of the Land Commission by agreeing to accept 2-3/4 per cent.
stock at a price not lower than 92 per cent, (which means, at present prices, that the loss on flotation is split between the landlord and the State), or, by waiting their turn, they can obtain half the price in stock at 92, and half in cash. Payments elected to be made wholly in cash come last of all. Bonus to be paid in cash as before.
Losses caused by the flotation of stock at a discount no longer fall upon the Irish rates. Any loss not capable of being borne by the Ireland Development Grant is to be borne by the Imperial Exchequer.
Other important clauses gave compulsory powers of purchase to the Congested Districts Board, and, in the case of "congested estates" and untenanted land outside the jurisdiction of the Board, to the Estates Commissioners. Otherwise Purchase and Sale remained voluntary.
So much for the history of Land Purchase. How exactly do we stand at the present moment?
In round numbers, nearly 24 millions have actually been advanced under the old Acts prior to 1903, and up to March of this year (1911) a further sum of 421/4 millions had actually been advanced under the Wyndham Act of 1903 and the Birrell Act of 1909.[158]
That makes a total of 661/2 millions actually advanced to 165,133 tenants up to March of 1911, covering the purchase of nearly 6 million acres of land, or nearly a third of the total agricultural area of Ireland. The tenants of the land are now quasi-freeholders, and will eventually be complete freeholders. In addition, agreements for the purchase of properties by 150,490 tenants, under the Wyndham and Birrell Acts, at a total price of 461/2 millions, for 41/2 million acres, were pending in March, 1911, though the sale and vesting were not yet completed. The properties represented by these agreements will be duly transferred in the course of the next few years, though the congestion of business is very great.
That will make a total of 113 millions advanced to 315,623 tenants for the purchase of 11 million acres under all Acts up to and including that of 1909. Now, how much more will be required? We have only one recent official estimate--that made by the Land Commission in 1908 for the Treasury Committee which sat to consider the crisis in Land Purchase. It did not pretend to give an accurate forecast, but only to estimate the maximum amount which would be needed, on the a.s.sumption that all unsold land would eventually be sold at the average price reached under the Act of 1903.[159] It is certain that the amount so calculated, covering as it does all cla.s.ses and descriptions of agricultural land, and including land farmed by the landlord himself, as well as short-term pasture tenancies,[160] will considerably exceed the actual requirements. Some of the unsold land, especially of the pasture land, will never need to be sold; nor is the average purchase price likely to remain permanently as high as that obtained under the Act of 1903.
Still, this speculative estimate gives us an outside figure which is useful. The conclusion from it is that 95 millions may be required to finance all future sales initiated under the Act of 1909.
But if we want to know how much cash may be wanted, dating from March, 1911, onwards, to finance Land Purchase, we must add the 461/2 millions needed for sales now agreed upon, and waiting to be carried through, but not yet completed. That brings the total to 1411/2 millions.
For the reasons given above, I think we might very well strike off 20 from the 95 millions of future sales, and so reduce the total to 1211/2 millions.
Two further questions remain to be considered: (1) Can we a.s.sume that in the future purchase will proceed smoothly? (2) Who pays for the machinery of Land Purchase, and what is the security for the money advanced?
1. The Act of 1909 is still young. At the end of March, 1911, applications had been lodged for the direct sale of 5,477 holdings at a price of 1,623,526, representing an average of 20-8 years' purchase, and negotiations were in progress for the purchase by the Congested Districts Board of estates worth another 11/2 millions. Total, a little over 3 millions--a substantial amount of business in view of the artificial acceleration caused by events in 1907 and 1908, the subsequent reaction, and the enormous arrears of business still remaining to be cleared up.
We should naturally expect a slight check to purchase under the Act of 1909, since the inducement both to landlord and tenant is less. The tenant would be inclined to hold out for a lower price because his annuity is higher (though signs of this check are not yet apparent), and the landlord is paid in a stock whose market price seems to be slowly but steadily falling. It is now (November, 1911) at 861/4. On the other hand, the wise change in the allocation of the bonus places a much-needed premium on sales of poor land at low prices, and reverses the process by which a wealthy landlord of good land sometimes obtained the largest reward for submission to sale.[161] Moreover, there is constant pressure towards purchase owing to the better financial position of the purchasing tenant over the non-purchasing or judicial tenant, while the fear in the landlord's mind of further periodical reductions in the judicial rents tends to induce him to meet this pressure halfway.
Still, there is a point beyond which such pressure might not be strong enough to carry on voluntary Purchase, especially if the 3 per cent, stock continued to fall. Wide powers of compulsion,[162] covering considerably more than a third of Ireland, and including the poorest areas, where purchase is most needed, already exist under the Act of 1909. Some think that general compulsion will be needed. Other well-informed men count with confidence on completing all the necessary part of the purchase of Irish land in from twelve to fifteen years under the existing system. On the other hand, it is necessary to contemplate the possible need for universal compulsion.
2. Cost of the working of Land Purchase, and security for the money advanced. It is just as well to make these points perfectly clear, in view of the legends which obtain circulation about the "giving" of British money for the purchase of Irish land.
The cost of the Land Purchase machinery falls at present on the taxpayers of the whole United Kingdom, including, of course, those of Ireland. It amounted in 1909-10, as I showed in the last chapter, to 414,500, and for 1911 the estimate is 544,395. This sum includes the administrative cost of the Land Commission and Estates Commissioners, the temporary losses on flotation caused in financing, under the Act of 1909, the balance of agreements made under the Act of 1903, and the bonus to landlords.
The Treasury, in their returns estimating the revenue and expenditure of various parts of the United Kingdom, debit the whole of this sum against Ireland, and, moral responsibility apart, I regard it as necessary that, under Home Rule, Ireland should a.s.sume both the cost and the management of Purchase.
Apart from the annual vote I have mentioned, Land Purchase pays for itself. The security for the individual holders of the Guaranteed Land Stock by means of which the purchase money is raised is the Consolidated Fund of the United Kingdom, but the Consolidated Fund has never been called upon for a penny, either for interest or capital, and never will be.
At present the initial security of the Government which controls the Consolidated Fund--in other words, the initial security of the United Kingdom taxpayers--is the Irish rates; for the grants in aid of Irish local taxation still form a guarantee fund chargeable with the unpaid annuities of defaulting tenants, though they have escaped the liability for losses on the notation of stock at a discount. The ultimate security is the purchased land itself; for, in the last resort, a defaulting tenant who, it must be remembered, is a State tenant, can be sold up.
But the really important security is the tenant himself. The Irish tenants, treated properly, pay their debts as honestly and punctually as any other cla.s.s of men in the world. Annuities in arrear are negligible.
The last Report of the Land Commission shows that out of two million pounds of annuities due from 165,133 purchasing tenants, and close upon another two millions of interest (in lieu of rent) upon holdings agreed to be purchased by 150,490 tenants--a total of nearly four million pounds--only 28,084 were uncollected on March 31 last. The cases of hopeless default, leading to a sale of the land, were only fifty-four.
Not a penny has actually been lost.
The State, then, or, if we choose so to put it, the United Kingdom taxpayers, are safe from loss, and make a good investment. There has never been the faintest symptom of a strike against annuities, and the only cause which could conceivably ever suggest such a strike would be the irritation provoked by a persistent refusal to grant Home Rule. Even that possibility I regard as out of the question, because there is a sanct.i.ty attaching to annuities which it would be hard to impair. Still, to speak broadly, it is true that Home Rule will improve a security already good, and that Home Rule, with financial independence, will make it absolutely impregnable.
Let me sum up.
More than half the agricultural land of Ireland is sold to the tenants, or agreed to be sold. Eleven million acres out of 183/4 million acres have changed hands, or will soon change hands; 315,623 out of 554,060 occupiers now pay annuities or interest in lieu of rent, to the amount of nearly 4 million pounds. In regard to value, out of a total value of 208 millions for the whole agricultural land of Ireland, 661/2 millions have actually been advanced for purchase, 461/2 millions are due to be advanced under signed agreements; and, on the extreme estimate of the Land Commission, based on the supposition that all the remaining land will ultimately be sold, 95 millions more will have to be advanced.
Total future liability on the extreme estimate, 1411/2 millions; or, if we take the more moderate and reasonable figure I suggested, 1211/2 millions.
Now, two conditions must be laid down--
1. Purchase ought to continue.
2. Cheap Imperial credit is necessary for it.
These conditions ought not to entail, beyond a strictly limited point, the continued control of Purchase by the Imperial Government. That step, as I suggested at p. 221, might involve Imperial control over (1) the Congested Districts Board; (2) the whole work of the Land Commission, outside Purchase, and all Irish land legislation; (3) the Irish police; because the power of distraint for annuities, the last resource of the creditor Government, rests, of course, with the arm of the law.
Any one of these consequences, as I have urged, would be inconsistent with responsible government in Ireland.
What are the objections to Irish control over Purchase, with its corollary, Irish payment of the running costs of Purchase? Two distinct interests have to be considered: (1) That of the British taxpayer; (2) that of the landlord.
1. If we carry out the plan I have advocated, the British taxpayer, as soon as he ceases to contribute to the diminishing subsidy suggested at p. 284 in order to meet the initial deficit in the national Irish balance-sheet, will cease to contribute anything towards the running costs, landlord's bonus, and flotation losses of a Purchase operation for the necessity of which Great Britain, in the past, was in reality responsible. Great Britain is under a moral obligation to continue to support Land Purchase with her national credit, which is indispensable.
She is also ent.i.tled to demand whatever reasonable conditions she thinks fit, for example, a share in the nomination of Land and Estates Commissioners; while any new legislation will, in the ordinary course, need her a.s.sent. The security, as I said above, will be impregnable. The purchasing tenant would become the tenant of the Irish State. The Irish Government, as a whole, instead of the individual annuitants, would, of course, be responsible to the Imperial Government, would collect the annuities itself, and bear any contingent loss by their non-payment. To repudiate a public obligation of that sort would be as ruinous to Ireland as the repudiation of a public debt is to any State in the world.
In point of fact, the Irish Government would find it good policy to popularize Irish Land Stock in Ireland. At present prices the 3 per cent, stock is among the cheapest and safest in the world, and would return to the farmer thrice as much interest as the average bank deposit which he now favours.
Mercifully, there is no exact historical precedent for such a case as Ireland, though, on a small scale, Prince Edward Island is an instructive parallel.[163] But if precedents, in the shape of guaranteed loans to self-governing Colonies, are needed, they exist. The most relevant and recent is the Imperial guaranteed loan of 35 millions made to the Transvaal by Mr. Balfour's Government in 1903 after the great war. Why it should be a heresy to do for Ireland what we did for the Transvaal, I am at a loss to conceive. The loan became, of course, an obligation of the Colony when it received Home Rule, and in 1907 a further guaranteed loan of 5 millions was authorized, of which 4 millions has been issued. Like Irish Land Stock, these loans are secured on the Consolidated Fund; but I do not think a fear is now suggested that the Consolidated Fund is in danger on that account. Prophecies of that sort were common enough in the mouths of those who opposed Transvaal Home Rule, but they did not long survive its enactment.
Another precedent is a guaranteed railway loan to Canada in 1873 of 3,600,000, which is just now becoming redeemable, while the Crown Colony of Mauritius received a guaranteed loan of 600,000 in 1892. The British and Irish taxpayers have also made themselves responsible for 9,424,000 on account of Egypt; 6,023,700 on account of Greece; and 5,000,000 on account of Turkey. The total nominal amount of the guaranteed loans to countries, colonial or foreign, outside the United Kingdom is 63,647,700. The total amount outstanding on March 31, 1911, was 59,474,200, and the Government holds securities only to the value of 4,800,556 against these liabilities, leaving the net liability of the taxpayer at 54,673,644.
The net liability of the taxpayer at the same date on account of Irish Guaranteed Land Stocks of all descriptions was 65,764,054.[164] Ireland has a claim to Imperial credit far superior to any of the Colonies, dependencies, or foreign Powers mentioned, and the credit should not entail control, or the representation of Ireland at Westminster.
Incidentally, it goes without saying that Ireland, in common with the Colonies, should receive the very valuable privilege of having independent loans raised by herself inscribed at the Bank of England, and made trustee securities.
2. It may be argued that the Congested Districts Board and the Land Commission, and through them Irish statesmen, may be subjected to local pressure hostile to the landlord's interests, and that the Irish Government would feel itself more free for social and other reforms if the land question were placed legally outside their purview. My answer is, in the first place, that Great Britain would cease to lend if her conditions were unfulfilled; in the second place, that in this, as in all matters, we are bound to place faith in the self-respect and sense of justice of a free Ireland--in its common prudence, too; for it would be a disaster whose magnitude is universally recognized in Ireland if any course were to be taken which prevented the landlord cla.s.s from joining in the great work of making a new Ireland. Fair treatment of the landlords by a free Ireland, as distinguished from fair treatment at the hands of an external authority, would do more than anything else to bring about a reconciliation. That is human nature all the world over.
II. MINOR LOANS TO IRELAND.
It remains only to refer briefly to two other cases where Ireland benefits from Imperial credit.
(1) The Labourers (Ireland) Act of 1906 sanctioned the advance of money through the Land Commission to Rural Councils for building labourers'
cottages--a cla.s.s of loans previously made by the Public Works Commissioners of Ireland. 3,111,816 had been advanced under this head on March 31, 1911, and 1,138,184 had been applied for. The money is raised by guaranteed 23/4 per cent, stock in the same way as the money for Land Purchase.
(2) In addition, there are the loans granted by the Irish Commissioners of Public Works. In their capacity as lenders, which is only one of a mult.i.tude of capacities, the Commissioners are really a subordinate branch of the Treasury, and fulfil the same function as the Public Works Loans Commissioners in Great Britain. They lend princ.i.p.ally to local authorities for all manner of public works and public health requirements, also to private individuals, mainly for the improvement of land, and, to a small extent, to Arterial Drainage Boards and to railways. They get their money from the National Debt Commissioners, and in 1909-10 issued loans to the amount of 293,233--a figure which shows a considerable reduction on that of the previous two years.[165] The total amount of 35,000 outstanding loans on March 31, 1910, was 9,608,110, of which between two-thirds and three-quarters were due from local authorities. The interest varies, as in Great Britain, from 23/4 to 5 per cent., according to the nature of the security, and in 1909-10 averaged 3 10s. 6d. Most of the loans are secured on local rates, where the interest payable is either 31/2 or 33/4 per cent., according to the period of the loan; others on undertakings such as harbours; and others on the land for the improvement of which the money is borrowed.
Here, then, are two small and secondary problems. Under Home Rule Ireland will have no claim to further Imperial credit for loans of either of the above cla.s.ses. On the other hand, there is no reason why the Treasury, if it pleases, and on its own terms, should not lend as before, though not directly, as it virtually does now, but indirectly, by loan to the Irish Government. The security will be just as good, and probably better. If a negligent Local Government Board under Irish control sanctions reckless loans by local authorities, and a negligent Irish Government advances for such loans money borrowed from Great Britain, the Irish Treasury will suffer. Such eventualities need not seriously be considered. The a.n.a.logy with the Transvaal and Canada loans, which were mainly for public works, is very close.
FOOTNOTES:
[152] Parts of this chapter have appeared in a paper by the Author in "Home Rule Problems."
[153] Agricultural Statistics of Ireland, 1909.