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Against Home Rule (1912) by Various

V >> Various >> Against Home Rule (1912)




The history of Irish Agriculture until recent years differed from the
history of English Agriculture at many points, and always to the marked
disadvantage of Ireland. Dynastic and religious controversies which--if
we except the suppression of monasteries and the exile of a few
Jacobites--left English countrysides untouched, in Ireland carried with
them the confiscation of vast territories and the desolating Influence
of Penal Laws. Changes in economic theory contributed even more sharply
to the decay of Irish enterprise. When England favoured Protection Irish
industry was handicapped out of manufactures. When England adopted Free
Trade Irish agriculture, on which the hopes of Ireland had perforce been
fixed, suffered in a greater degree. The doctrine of _laisser faire_
wrought little but wrong when applied by absentee buyers of bankrupt
estates to tracts hardly susceptible of development by capital, amid a
peasantry wedded to continuity of tenure, and justified in that
tradition by the fact that they and their forbears had executed nearly
all the improvements on their holdings. Most of the nation were
restricted to agriculture under conditions that spelt failure, and
imposed exile as the penalty for failure, since other avenues to
competence were closed. The climax of misfortune was reached a
generation after the triumph of Free Trade. Ireland, being almost wholly
an agricultural country, suffered as a whole, whereas England, an
industrial country, suffered only in districts, from the collapse of
agricultural prices in 1879. That catastrophe in rural life precipitated
Mr. Gladstone's Land Law Act (Ireland), 1881. Being precluded by his
political tenets from protecting Irish agriculture against foreign
competition, or assisting it with the resources of the State, Mr.
Gladstone aimed at alleviating the distress due to the decadence of a
national industry by defining with meticulous nicety the respective
shares which the two parties engaged in agriculture--landlord and
tenant--were to derive from its dwindling returns. He believed that the
proportion of diminishing profits due to the landlord, because of the
inherent capabilities of his property, and to the tenant, because of his
own and his predecessors' exertions, could be roughly determined by a
few leading cases in the Land Court; and, further, that landlords and
tenants throughout Ireland would conform to such guidance as these
decisions might afford. In this anticipation he ignored the vital
function of agriculture in Irish life, and the effect which the growing
stringency of agricultural conditions would have on a population that
loved the land and rejoiced in litigation. He created dual-ownership
throughout Ireland, and this led, as Lord Dufferin and other far-seeing
statesmen had foretold, to the land being starved of both capital and
industry. Irish agriculture was brought to the brink of ruin. The misery
of those involved in that pass was exploited to engineer an attack on
the fabric of social order, and the lawlessness so engendered was
adduced as an argument for dissolving the Union under which such
tragedies could occur.

The leaders of the Conservative Party, when confronted with this
situation, determined that their duty, in accordance with the spirit of
the Act of Union, demanded some use of the resources of a joint
exchequer for ministration to the peculiar needs of Ireland. They
decided that the credit of the State should be employed to effect the
abolition of dual-ownership by converting the occupiers of Irish farms
into owners of the soil. Let it be granted that this policy had been
advocated by John Bright and enshrined in the Land Law Acts of 1870 and
1881. It must be added that these pious intentions remained a "dead
letter" until adequate machinery for giving them effect was provided by
the Land Purchase Acts, commonly called the Ashbourne Acts, of 1885 and
1889. The method pursued was as follows. Any individual landlord could
agree with any individual tenant on the price which he would accept for
the extinction of his interest in that tenant's holding. The State
facilitated the transaction by advancing that amount to the landlord in
_cash_ whenever the holding offered sufficient security, and accepting
from the tenant an undertaking to pay an instalment of L4 a year for
every L100 advanced over a period of forty-nine years. The instalment
comprised L3 for interest, 2_s._ 6_d._ for expenses, and 17_s._ 6_d._
for sinking fund. The loan from the exchequer was secured against
individual failures to pay by the realisable value of the holdings.

The salient features in this procedure were that the landlord received
cash and that the tenant paid interest at the then existing rate on
Consols, viz. 3 per cent. Both these features are important. A payment
in cash, or its equivalent, is preferable for such transactions to a
payment in stock, with a fluctuating value, because, if the stock
appreciates the landlord gets more than he bargained for, and this, by
arousing the suspicions of other would-be tenant-purchasers, produces a
disinclination on their part to buy. Again, if the stock depreciates,
the landlord cannot carry out contemplated redemptions of mortgages on
his property, and this produces a disinclination on the part of other
landlords to sell. In the second place it is difficult to persuade Irish
tenants that the State is assisting them if they, the poor, are asked to
pay higher interest for the State's credit than the State pays for the
credit of the rich. The chief defect in this procedure lay in its
restriction to separate bargains in respect of single holdings. It made
a patchwork, whereas the untoward results of the historic and economic
causes on which I have touched demanded the wholesale treatment of
convenient areas.

Under these Acts, in the course of six years, more than 27,000 tenants
became owners by virtue of advances which amounted to over L10,000,000.
The largest number of applications for purchase in any one year was
6,195 for L2,271,569 in 1887, and the average price for all the holdings
bought under these Acts was L396.

When the sums provided by the Ashbourne Acts were exhausted, Mr. Arthur
Balfour carried the Act of 1891, subsequently amended by the Act of
1896. Under these Acts the landlord was paid in stock instead of cash.
The tenant still paid an instalment of L4, which was, ultimately,
divided into L1 5_s._ for sinking fund and L2 15_s._ for interest. This
large sinking fund, L1 5_s._ instead of 17_s._ 6_d._, was retained after
interest had been reduced to the rate on Consols, 2-3/4 per cent.,
chiefly to avoid a discrepancy in the total of annual instalments as
between purchasers under the Act of 1891 and purchasers under the
Ashbourne Acts. Difficulties were feared if the earlier purchasers were
to pay L4 and the later purchasers only L3 15_s._ for each L100
advanced, so the spare five shillings was put in the sinking fund. This
speculative difficulty was afterwards discounted in order to deal with
one of a more practical character. Under Mr. Gladstone's Land Law Act of
1881, which dealt with rent-fixing, statutory rents were revised every
fifteen years, and the second term rents, beginning in 1896, seemed
certain to reveal considerable reductions on the rents payable during
the first period. It was felt that the security for the earlier advances
would be endangered if rents throughout Ireland fell below the level of
the purchase-instalments, and that purchase would be retarded if the
purchaser did not obtain immediate relief by agreeing to buy. To meet
this practical difficulty Mr. Gerald Balfour, in 1896, permitted the
purchaser to write off the amount repaid by sinking fund during the
first and two successive periods of ten years. These "decadal
reductions" were optional. If the purchaser forewent them he paid L4 per
L100, and extinguished his debt in 42-1/2 years. If he availed himself
of them he paid L3 8_s. 7d._ per L100 after the first ten years, and
continued to pay, with two further reductions in prospect, till the debt
was extinguished in a period undefined, but estimated at about 72-1/2
years. But this privilege was made retrospective, so that purchasers
under the Ashbourne Acts could also reduce their instalments of L4 to L3
11_s. 10d._

The salient features in the procedure of the Acts of 1891 and 1896 were
that, (1) the landlord was paid in stock instead of cash. But owing to
the rise in the value of gilt-edged securities, Irish Land Stock, with a
face value of L100, became at one moment worth as much as L114; (2) the
purchaser's interest was at 2-3/4 per cent. _i.e._ the existing rate on
Consols; but (3) his instalment, prospectively fined down by decadal
reductions, enabled him to offer an acceptable price and yet pay far
less to the State, by way of instalment, after purchase than was due to
his landlord, by way of rent, before purchase. The operation of purchase
was still confined, almost wholly, to single bargains. But in Mr. Arthur
Balfour's Act of 1891 a new departure was authorised which, after
development in Mr. Gerald Balfour's Act of 1896, has led to important
and far-reaching consequences. The Congested Districts Board was
established to deal with scheduled areas in the West of Ireland that
comprised a large number of holdings at once too limited in area, and
too poor in soil, for any one of them to support a family by farming or
to afford security to the State, under existing facilities for purchase,
in the event of the occupier wishing to become the owner. A select
committee of the House of Commons, so long ago as in 1878 (No. 249, pp.
4 and 5), when Disraeli was Prime Minister, had recommended that a
properly constituted body should be empowered to purchase, not single
farms, but whole estates, and to re-sell them after amalgamating,
enlarging, and re-distributing what are now called "uneconomic"
holdings. Provisions to this end had been inserted in earlier Acts, but,
in the absence of administrative machinery and financial resources, they
remained abortive. It had for long been evident that the small,
impoverished holdings, which had supported a dense population before the
famine, stood in need of fundamental remodelling if they were to support
even a largely reduced population. The efforts made by wealthy Irish
landlords in this direction were arrested by the Land Law Act of 1870
and rendered impossible by the Land Law Act of 1881. With the Purchase
Acts of 1891 and 1896 a beginning was made.

Another feature must be noted. In addition to the value of any one
holding, as a security against individual failure, a further security
was provided against the risk of a combined refusal to repay. The
Exchequer was empowered to retain grants due for various purposes in
Ireland and to recoup itself in proportion to the defalcation in any
county. It should be added that individual failures have been rare to
the point of insignificance, and that no combined refusal has been
attempted, or advocated, even during periods of agricultural unrest.

Under the Acts of 1891 and 1896 in the course of just over twelve years
more than 44,000 tenants became owners by virtue of advances which
amounted to over L13,000,000. Here we must note that the success of
these Acts coincided with, and depended on, a rise in the price of
gilt-edged securities. The number of applications rose from 1503 in the
year ending March 31, 1896, to 6911 in the year ending March 31, 1900.
But, with the fall in the price of stock, land purchase showed signs of
coming to a standstill. By 1902 it was evident that new legislation was
needed, and in the next year the Irish Land Act of 1903 was carried.

The Irish Land Act of 1903 was not, as some suggest, a short cut to the
millennium, evolved on the spur of the moment, and translated into
fantastic finance. It had two bases, the one practical, the other moral.
In the first place, it was founded on the ripe experience garnered
during eighteen years from the operation of preceding purchase Acts. In
the second place, it was founded on the historic agreement spontaneously
arrived at in 1902 by accredited representatives of Irish landlords and
tenants. They resolved that dual ownership ought to be abolished
throughout Ireland, and that this primary policy should be accompanied
by effective remedies for the uneconomic conditions prevalent in the
West, but existing elsewhere, though sporadically, to a limited extent.
This agreement, in itself unprecedented, was rendered the more
remarkable by the fact that the signatories assumed the responsibility
of telling the Government how the first object could be achieved. They
advised that landlords could not be expected to sell, as a class, unless
the price paid to them in cash would yield from sound securities 90 per
cent. of their income in terms of a rent that had been twice revised
under the Land Law Act of 1881; and that tenants could not be expected
to buy, as a class, unless their instalments due to the Treasury after
purchase were from 15 per cent. to 25 per cent. less than such rents so
revised. They invited the Government to give effect to that agreement.
The Government accepted and, in the Act of 1903, tendered the costly
but, under the circumstances, not extravagant _imprimatur_ of the
Treasury on a political treaty thenceforward to be binding on all three
contracting parties: landlords, tenants, and the State. The Nationalist
members, as spokesmen for the tenants, and the representatives of the
landlords, subscribed to the provisions offered, and the reports of the
Estates Commissioners prove that these have been fulfilled so exactly
that, in the case of second term rents, landlords and tenants have
obtained average incomes and reductions that differ only by a decimal
from the mean advocated at the Conference.

The objects of the Irish Land Act were, in conformity with the
conclusions of the Conference, to abolish dual ownership rapidly and, at
the same time, to deal systematically with "agricultural slums." Its
salient features fall under four heads.

A. _State assistance to voluntary bargaining._ For this purpose it was
provided that (1) cash payments should be resumed to the landlords; (2)
that the tenants' instalments should be L3 5_s._ for each L100 advanced,
divided into L2 15_s._ (2-3/4 per cent.) for interest and 10_s._ for
sinking fund. This was not, as the able and well-informed special
correspondent of the _Times_ suggests (February 9, 1912) a sudden
departure from an instalment of L4. "Decadal reductions" under the Act
of 1896 had, as I have said, diminished the instalments of purchasers
under the Act of 1891 to L3 8_s. 7d._ after ten years with further
prospective diminutions, and subjected the instalments of purchasers
under earlier Acts to a similar process. A wholesale expansion of
purchase was impossible unless would-be purchasers were offered terms
comparable to those accorded to their predecessors. For this reason the
tenantry of Ireland were offered repayment at L3 5_s._ per L100 for a
period of about 62 years, in lieu, under the Act of 1896, of repayment
at L3 8_s. 9d._, with further reductions, for about 72-1/2 years, and
their representatives accepted the offer. They would certainly have
refused, and rightly, the offer substituted by Mr. Birrell in the Act of
1909, viz. an instalment of L3 10_s._ with the same sinking
fund--10_s._--and interest increased to L3. The third feature to be
noted under this head is, that the terms agreed to by representatives of
landlords and tenants at the conference could not be ratified unless
the State added some help by way of cash to the assistance of its
credit. It was agreed by all parties that L12,000,000 should be
available to bridge the gap, at the rate of 12 per cent. on the amount
advanced, with the right to revise that rate after five years, but _only
for the purpose of extending the bonus_--as it was called--_to all
future transactions_. It was an integral part of a solemn covenant that
the bonus should not be diverted to any object other than the abolition
of dual ownership and the remedy of "congestion."

B. _The substitution of speedy purchase for dilatory litigation._ To all
members of the Conference of 1902 and of the House of Commons in 1903,
with, I believe, the exception of Mr. Dillon, who was away in America
while the Conference sat, it was evident that, if dual ownership was to
be abolished, our choice was confined to two courses. We could, on the
one hand, pursue, under the guise of purchase, the metaphysical and
costly distinctions between landlord-right and tenant-right, which Mr.
Gladstone had established under the guise of rent-fixing; or else, as
the only alternative, we had "to cut the cackle" and get to business.
Under this head the House of Commons--Mr. Dillon ingeminating
dissent--decided in so far as landlords and tenants were concerned, two
things: (1) It was agreed that where the tenant-purchaser's instalment,
after purchase, was substantially less than his statutory rent revised
at great cost--L140,000 a year for Land Courts--then, in those cases the
State needed not to inquire at further cost and delay into either its
own security in the holding, or the metaphysical distinction between
value due to the landlord's ownership of the soil and value due to the
tenant's improvement of the soil. This close approximation to unanimity
will not surprise those who grasp that every landlord and tenant was to
make a voluntary bargain on precisely those terms which the
representatives of their classes had combined to obtain from the State.
The alternative method of delay and litigation had been further
discounted, for everybody except Mr. Dillon, by the fact that in the
classic case--_Adams_ v. _Dunseath_--tried out in accordance with Mr.
Gladstone's panacea, Adams, after repeated lawsuits, improved his
financial position by an infinitesimal sum per annum without becoming an
owner of his farm. It was also agreed that the Estates Commissioners
appointed to administer the Act, should be administrative officials
under the Government, and not amateur judges. This was essential, not
only to substitute cheap speed for costly delay, but also to ensure that
the benefits offered by the State should not be absorbed, say, in the
rich province of Leinster to the detriment of the poorer province of
Connaught, or--for who knows what may happen in Ireland?--absorbed in
the Home Rule province of Connaught to the detriment of the Unionist
province of Ulster.

C. _Dealing with Estates as a whole instead of with single holdings._
This process, till then applied tentatively in the congested districts
of the West, became the general method throughout Ireland, and was
assisted by the provision of working capital for carrying out necessary
amalgamations and improvements before resale.

D. _Increase in the 'borrowing power and funds of the Congested
Districts Board,_ for the purpose of dealing systematically with
"agricultural slums."

The features of the Irish Land Act (1903), founded, as they were, on
experience and the consent of all parties concerned, became widely
popular in Ireland. But, by Mr. Birrell's Act of 1909, they were all
distorted or destroyed. A solemn treaty, framed in the interest of
Ireland, was torn up to deck with its tatters the triumph of Mr.
Dillon's unholy alliance with the British Treasury. The effect of this
betrayal on the prospects of Irish agriculture will appear from a
recital of the changes made by Mr. Birrell's Act, followed by a
comparison of the results obtained under the two Acts. From that
comparison I shall proceed to an examination of the reasons alleged for
the breach of faith, and a statement of the Unionist party's pledge to
continue their policy of 1903. I shall then conclude by inviting all
who care for Ireland to weigh the prospects of Irish Agriculture under
the Union against its prospects under Home Rule.

_Changes made by the Act of _1909.--(1) Instead of cash payments
landlords are to receive stock at three per cent. issued on a falling
market, and this stock cannot appreciate because, owing to the
embarrassment of Irish estates, about half of each issue must be thrown
back on the market for the redemption of mortgages; a result fatal to
land purchase and detrimental to the credit of the State. (2) Instead of
paying L3 5_s._ per L100, tenants are to pay L3 10_s._ without any
reduction in the period of repayment. The sinking fund remains at 10_s._
and the interest L3 is, for the first time since land purchase was
attempted, placed at a higher rate than in the preceding Purchase Act,
whilst the whole instalment of L3 10_s._ is raised, not only above the
rate of the Act of 1903, but also above the rates, diminished by decadal
reductions, of purchasers under still earlier Acts. This again, in view
of these reductions and of periodic revisions of _rent_ under the Land
Law Act of 1881, is fatal to purchase. (3) The bonus of L12,000,000--on
the application of which all parties agreed in 1903--was diverted from
the unanimous policy of that year and brought in aid of Mr. Dillon's
hobby, which all parties then rejected. Mr. Dillon is at liberty to
rejoice over the ruin of one landlord more than over the salvation of
99,000 tenants. The laws of lunacy do not, and ought not to, touch him.
But there is no reason why taxpayers should minister to his peculiar
pleasure, with the result of postponing indefinitely any settlement of
the Irish land question. (4) By reverting to inspection for security
delay is substituted for speed, and speed is necessary in the conclusion
of bargains that are themselves the result of prolonged negotiations;
the more so when, as now, owing to the substitution of stock for cash,
the seller cannot know what his bargain will turn out to be; and the
buyer, owing to the block in agreements under the Act of 1903, cannot
know when his bargain will take effect. In most cases it will not do so
for from six to eight years, which must be added to the period of
repayment, although his instalment has been increased. (5) The reversion
to attempts at defining the metaphysical rights of the landlords and
tenants revives the social poison of litigation of which, in 1903, every
one but Mr. Dillon was weary. (6) The revival of litigation in respect
of single holdings defeats the policy of dealing with convenient areas.
(7) By transforming the Estates Commissioners, much I imagine to their
disgust, from administrative officers into amateur judges, a further
premium is put on litigation and delay, whilst the interests of one
province as against the interests of another, are left without
protection from the State. (8) Although more than half the holdings of
Ireland are valued at less than L10 a year, a presumption is created
that all holdings below that value are to be deemed "uneconomic." The
whole of Connaught with the counties of Donegal and Kerry and part of
County Cork are branded as "congested," and the Board, charged with
conducting purchase in that area, is swollen to unmanageable size,
whilst three commissioners are held sufficient for the rest of Ireland,
which is twice as large.

To these eight changes, all inimical, and, as I believe, fatal to the
abolition of dual ownership, two have been added of a more insidious
effect. Compulsion has been adopted. This of itself checks voluntary
purchase. It kills it when, as under this Act, compulsory purchases are
to be paid for in cash and voluntary purchases in depreciated stock.
Finally, the Act contemplates diverting the resources, applied under the
treaty of 1903 to the abolition of dual ownership and the remedy of
congestion, to a new purpose, for which Ireland can make no special
claim. I mean the creation, over all Ireland, of new tenancies, to be
sold to new men, who have never suffered from dual ownership or
uneconomic conditions, and may be presumed to be ignorant of farming.
This new policy amounts to a repeal of the policy sanctioned by all,
viz. of giving special State aid to meet the peculiar needs of Ireland.

_A comparison of the results obtained under the Acts of_ 1903 _and_
1909.--In order to gauge the respective efficacy of these two Acts for
the purpose of abolishing dual ownership, it is necessary to distinguish
between applications for purchase, and advances actually made in respect
of completed transactions. The applications exhibit the comparative
popularity and convenience of the two Acts. The advances exhibit only
the readiness of the Government to proceed with purchase. They pertain
to the financial, rather than the political, aspect of the problem, and
may be examined later together with the reasons alleged for the delay of
its solution. The fact of the delay appears from the following
figures:--

Under the Irish Land Act (1903) the number of purchase agreements lodged
in respect of direct sales by landlords to tenants was 217,299 in the
course of less than six years from November 1, 1903, to September 15,
1909. To these should be added proposed purchasers in other categories,
viz. in respect of estates sold to the Land Commission for subsequent
re-sale, or to the Congested Districts Board, or in the Court of the
Land Judge, or in respect of offers to evicted tenants. These bring the
total of potential purchasers up to 248,109. Under the Act of 1909, in
two years from December 3, 1909, to December 1, 1911, the number of
applications in respect of direct sales stands at 8,992. In the other
categories the number of potential purchasers amounted to 373 up to
March 31, 1911. Since then tentative negotiations have been essayed,
under the threat of compulsion and the menace of Home Rule, which
suggest a far larger figure. But these transactions--to which I shall
return--are of an eminently dubious character. We are on safe ground if
we compare the number of tenants who were ready under the two Acts to
acquire their holdings. After discounting whatever may be claimed on the
score that the operation of the Act of 1903 was expedited by the fear of
its destruction, a comparision of 217,299 would-be purchasers in six
years with 8,992 in two years demonstrates that the abolition of dual
ownership has been thrown back to the conditions which called for the
Treaty of 1903. Furthermore, it is proper to discount, in turn, even the
meagre total of 8,992. For it includes the remainders of estates, other
parts of which had been sold under the Act of 1903 and the spurt of
applications expedited, in this case, by the revolution of last August.
To the over-sanguine and the over-timid this seemed to foreshadow the
rapid passage of Home Rule, and, bad as are the terms of the Act of
1909, they are estimated to be better than any obtainable after the
Union has been thrown on the scrap-heap of the Constitution. One other
comparison may be noted. It was part of the Treaty of 1903 that
landlords should be encouraged to remain in their native land by
assistance in the repurchase of their demesnes--that is, homes--after
selling their properties. Under the Act of 1903 the advances on resale
to owners sanctioned by the Land Commission numbered 205. Under the Act
of 1909 they number two.

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