The New Irish Constitution Part 13

(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 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 Land Act of 1881.

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.

Differences between the English and the Irish Land Systems.

To understand the agrarian situation in Ireland it is necessary to keep in mind the fundamental difference 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 compet.i.tion 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 t.i.tle. 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 compet.i.tion 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 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.

Irish Land Purchase and the extent to which it has been carried on by State aid.

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 princ.i.p.al Acts under which advances of public money to enable tenants to become proprietors of their holdings were made are:

The Irish Church Act, 1869.

The Landlord and Tenant (Ireland) Act, 1870.

The Land Law (Ireland) Act, 1881.

The Purchase of Land (Ireland) Act, 1885.

The Purchase of Land (Ireland) Act, 1891 and 1896.

The Irish Land Act, 1903 and 1907.

The Evicted Tenant Act, 1907.

The Irish Land Act, 1909.

Irish Church Act, 1869.

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.

Landlord and Tenant (Ireland) Act, 1870.

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 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.

The Act of 1881 (the "Gladstone Act").

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.

The Purchase of Land (Ireland) Act, 1885 (the "Ashbourne Act").

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 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.

Purchase of Land Acts, 1891 and 1896 (the "Balfour Acts").

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- per cent. per annum, and cannot be redeemed until the expiration of thirty years from the date of the pa.s.sing of the Act of 1891. The dividends and sinking fund payments 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, 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- 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- per cent. being for interest, and 1- 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 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).

Irish Land Act, 1903 (the "Wyndham Act").

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 pa.s.sed 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.