1. _Contribution to Imperial Exchequer_ on basis of
1/15th of Imperial Expenditure, viz.:
(1) Debt Charge . . . . . . . . £1,466,000
(2) Army and Navy . . . . . . . 1,666,000
(3) Civil Charges . . . . . . . 110,000
--------- £3,242,000
2. _Sinking Fund_ on 1/15th of
Capital of Debt . . . . . . . . . . . . . 360,000
3. _Charge for Constabulary_[14] . . . . . . . 1,000,000
4. _Local Civil Charges_
other than Constabulary . . . . . . . . . 2,510,000
5. _Collection of Revenue_:
(1) Imperial Taxes . . . . . . £170,000
(2) Local Taxes . . . . . . . . 60,000
(3) Non-Tax Revenue . . . . . . 604,000
------- 834,000
6. _Balance_ or Surplus . . . . . . . . . . . . 404,000
--------
£8,350,000
The Imperial contribution payable by Ireland to Great Britain cannot be
increased for thirty years, though it may be diminished if the charges
for the army and navy and Imperial civil expenditure for any year be
less than fifteen times the contribution paid by Ireland, in which case
1/15th of the diminution will be deducted from the annual Imperial
contribution. Apart from the Imperial charges there are other charges
strictly Irish, for the security of the payment of which the Bill
provides. This it does by imposing an obligation on the Irish
legislative body to enact sufficient taxes to meet such charges, and by
directing them to be paid by the Imperial Receiver-General, who is
required to keep an imperial and an Irish account, carrying the customs
and excise duties, in the first instance, to the imperial account, and
the local taxes to the Irish account, transferring to the Irish account
the surplus remaining after paying the imperial charges on the imperial
account. On this Irish account are charged debts due from the Government
of Ireland, pensions, and other sums due to the civil servants, and the
salaries of the judges of the supreme courts in Ireland.
Some provisions of importance remain to be noticed. Judges of the
superior and county courts in Ireland are to be removable from office
only on address to the Crown, presented by both orders of the
Legislative body voting separately. Existing Civil servants are retained
in their offices at their existing salaries; if the Irish Government
desire their retirement, they will be entitled to pensions; on the other
hand, if at the end of two years the officers themselves wish to retire,
they can do so, and will be entitled to the same pensions as if their
office had been abolished. The pensions are payable by the
Receiver-General out of the Irish account above mentioned.
The supremacy of the Imperial Parliament over all parts of the Empire is
an inherent quality of which Parliament cannot divest itself, inasmuch
as it cannot bind its successors or prevent them from repealing any
prior Act. In order, however, to prevent any misapprehension on this
point clause 37 was inserted, the efficacy of which, owing in great
measure to a misprint, has been doubted. It is enough to state here that
it was intended by express legislation to reserve all powers to the
Imperial Parliament, and had the Bill gone into Committee the question
would have been placed beyond the reach of cavil by a slight alteration
in the wording of the clause. This summary may be concluded by the
statement that the appellate jurisdiction of the House of Lords over
actions and suits arising in Ireland (except in respect of
constitutional questions reserved for the determination of the Judicial
Committee of the Privy Council as explained above), and with respect to
claims for Irish Peerages, is preserved intact.
The object of the Land Bill was a political one: to promote the
contentment of the people, and the cause of good government in Ireland,
by settling once and for ever the vexed question relating to land. To do
this effectually it was necessary to devise a system under which the
tenants, as a class, should become interested in the maintenance of
social order, and be furnished with substantial inducements to rally
round the institutions of their country. On the other hand, it was just
and right that the landlords should participate in the benefits of any
measure proposed for remedying the evils attendant upon the tenure of
land in Ireland; and should be enabled to rid themselves, on fair terms,
of their estates in cases where, from apprehension of impending changes,
or for pecuniary reasons, they were desirous of relieving themselves
from the responsibilities of ownership. Further, it was felt by the
framers of the Bill that a moral obligation rested on the Imperial
Government to remove, if possible, "the fearful exasperations attending
the agrarian relations in Ireland," rather than leave a question so
fraught with danger, and so involved in difficulty, to be determined by
the Irish Government on its first entry on official existence. Such were
the governing motives for bringing in the Land Bill.
To understand an Irish Land Bill it is necessary to dismiss at once all
ideas of the ordinary relations between landlord and tenant in England,
and to grasp a true conception of the condition of an Irish tenanted
estate. In England the relation between the landlord and tenant of a
farm resembles, with a difference in the subject-matter, the relation
between the landlord and tenant of a furnished house. In the case of the
house, the landlord keeps it in a state fit for habitation, and the
tenant pays rent for the privilege of living in another man's house. In
the case of the farm, the landlord provides the farm with house,
farm-buildings, gates, and other permanent improvements required to fit
it for cultivation by the tenant, and the tenant pays rent for the
privilege of cultivating the farm, receiving the proceeds of that
cultivation. The characters of owner and tenant, however long the
connection between them may subsist, are quite distinct. The tenant does
no acts of ownership, and never regards the land as belonging to
himself, quitting it without hesitation if he can make more money by
taking another farm. In Ireland the whole situation is different:
instead of a farm of some one hundred or two hundred acres, the tenant
has a holding varying, say, from five to fifty acres, for which he pays
an annual rent-charge to the landlord. He, or his ancestors have, in the
opinion of the tenant, acquired a quasi-ownership in the land by making
all the improvements, and he is only removable on non-payment of the
fixed rent, or non-fulfilment of certain specified conditions. In short,
in Ireland the ownership is dual: the landlord is merely the lord of a
quasi-copyhold manor, consisting of numerous small tenements held by
quasi-copyholders who, so long as they pay what may be called the
manorial rents, and fulfil the manorial conditions, regard themselves as
independent owners of their holdings. An Irish Land Bill, then, dealing
with tenanted estates, is, in fact, merely a Bill for converting the
small holders of tenements held at a fixed rent into fee-simple owners
by redemption of the rent due to the landlord and a transfer of the land
to the holders. Every scheme, therefore, for settling the Land question
in Ireland resolves itself into an inquiry as to the best mode of paying
off the rent-charges due to the landlord. The tenant cannot, of course,
raise the capital sufficient for paying off the redemption money; some
State authority must, therefore, intervene and advance the whole or the
greater part of that money, and recoup itself for the advance by the
creation in its own favour of an annual charge on the holding sufficient
to repay in a certain number of years both the principal and interest
due in respect of the advance.
The first problem, then, in an Irish Land Bill, is to settle the
conditions of this annuity in such a manner as to satisfy the landlord
and tenant; the first, as to the price of his estate; the second, as to
the amount of the annuity to be paid by him, at the same time to provide
the State authority with adequate security for the repayment of the
advance, or, in other words, for the punctual payments of the annuity
which is to discharge the advance. Next in importance to the financial
question of the adjustment of the annuity comes the administrative
difficulty of investigating the title, and thus securing to the tenant
the possession of the fee simple, and to the State authority the
position of a mortgagee. Under ordinary circumstances the investigation
of the title to an estate involves the examination of every document
relating thereto for a period of forty years, and the distribution of
the purchase-money amongst the head renters, mortgagees, and other
encumbrancers, who, in addition to the landlord, are found to be
interested in the ownership of almost every Irish estate. Such a
process is costly, even in the case of large estates, and involves an
expense almost, and, indeed, speaking generally, absolutely prohibitory
in the case of small properties. Some mode, then, must be devised for
reducing this expense within manageable limits, or any scheme for
dealing with Irish land, however well devised from a financial point of
view, will sink under the burden imposed by the expense attending the
transfer of the land to the new proprietors. Having thus stated the two
principal difficulties attending the Land question in Ireland, it may be
well before entering on the details of the Sale and Purchase of Land
(Ireland) Bill, to mention the efforts which have been made during the
last fifteen years to surmount those difficulties. The Acts having this
object in view are the Land Acts of 1870, 1872, and 1881, brought in by
Mr. Gladstone, and the Land Purchase Act of 1885, brought in by the
Conservative Lord Chancellor of Ireland (Lord Ashbourne). The Act of
1870, as amended by the Act of 1872, provided that the State authority
might advance two-thirds of the purchase-money. An attempt was made to
get over the difficulties of title by providing that the Landed Estates
Court or Board of Works shall undertake the investigation of the title
and the transfer and distribution of the purchase-money at a fixed
price. The Act of 1881 increased the advance to three-quarters, leaving
the same machinery to deal with the title. Both under the Acts of 1870
and 1881 the advance was secured by an annuity of 5 per cent., payable
for the period of thirty-five years, and based on the loan of the money
by the English Exchequer at 3-1/2 per cent. interest. These Acts
produced very little effect. The expense of dealing with the titles in
the Landed Estates Court proved overwhelming, and neither the Board of
Works, under the Act of 1872, nor the Land Commission, under the Act of
1881, found themselves equal to the task of completing inexpensively the
transfer of the land; further, the tenants had no means of providing
even the quarter of the purchase-money required by the Act of 1881. In
1885 Lord Ashbourne determined to remove all obstacles at the expense of
the English Exchequer. By the Land Act of that year he authorized the
whole of the purchase-money to be advanced by the State, with a
guarantee by the landlord, to be carried into effect by his allowing
one-fifth of the purchase-money to remain in the hands of the agents of
the State Authority until one-fifth of the purchase-money had been
repaid by the annual payments of the tenants. The principal was to be
recouped by an annuity of 4 per cent., extending over a period of
forty-nine years, instead of an annuity of 5 per cent. extending over a
period of thirty-five years. The English Exchequer was to advance the
money on the basis of interest at 3-1/8 per cent., instead of at 3-1/2
per cent. Though sufficient time has not yet elapsed to show whether the
great bribe offered by the Act of 1885, at the expense of the British
taxpayer, will succeed in overcoming the apathy of the tenants, it
cannot escape notice that if the Act of 1885 succeeds better than the
previous Acts, it will owe that success solely to the greater amount of
risk which it imposes on the English Exchequer, and not to any
improvement in the scheme in respect of securing greater certainty of
sale to the Irish landlord, or of diminishing the danger of loss to the
English taxpayer.
Such being the state of legislation, and such the circumstances of the
land question in Ireland in the year 1886, the Irish Government Bill
afforded Mr. Gladstone the means and the opportunity of bringing in a
Land Bill which would secure to the Irish landlord the certainty of
selling his land at a fair price, without imposing any practical
liability on the English Exchequer, and would, at the same time,
diminish the annual sums payable by the tenant; while it also conferred
a benefit on the Irish Exchequer. These advantages were, as will be
seen, gained, firstly, by the pledge of English credit on good security,
instead of advancing money on a mere mortgage on Irish holdings, made
directly to the English Government; and, secondly, by the interposition
of the Irish Government, as the immediate creditor of the Irish tenant.
The scheme of the Land Purchase Bill is as follows:--The landlord of an
agricultural estate occupied by tenants may apply to a department of the
new Irish Government to purchase his estate. The tenants need not be
consulted, as the purchase, if completed, will necessarily better their
condition, and thus at the very outset the difficulty of procuring the
assent of the tenants, which has hitherto proved so formidable an
obstacle to all Irish land schemes, disappears. The landlord may require
the department to which he applies (called in the Bill the State
Authority) to pay him the statutory price of his estate, not in cash,
but in consols valued at par. This price, except in certain unusual
cases of great goodness or of great badness of the land, is twenty
years' purchase of the _net_ rental. The _net_ rental is the _gross_
rental after deducting from that rent tithe rent-charge, the average
percentage for expenses in respect of bad debts, any rates paid by the
landlord, and any like outgoings. The _gross_ rental of an estate is the
gross rent of all the holdings on the estate, payable in the year ending
in November, 1885. Where a judicial rent has been fixed, it is the
judicial rent; where no judicial rent has been fixed, it is the rent to
be determined in the manner provided by the Bill.
To state this shortly, the Bill provides that an Irish landlord may
require the State Authority to pay him for his estate, in consols valued
at par, a capital sum equal to twenty times the amount of the annual sum
which he has actually put into his pocket out of the proceeds of the
estate. The determination of the statutory price is, so far as the
landlord is concerned, the cardinal point of the Bill, and in order
that no injustice may be done the landlord, an Imperial
Commission--called the Land Commission--is appointed by the Bill, whose
duty it is to fix the statutory price, and, where there is no judicial
rent, to determine the amount of rent which, in the character of gross
rental, is to form the basis of the statutory price. The Commission also
pay the purchase-money to the landlord, or distribute it amongst the
parties entitled, and generally the Commission act as intermediaries
between the landlord and the Irish State Authority, which has no power
of varying the terms to which the landlord is entitled under the Bill,
or of judging of the conditions which affect the statutory price. If the
landlord thinks the price fixed by the Land Commission, as the statutory
price inequitable, he may reject their offer and keep his estate.
Supposing, however, the landlord to be satisfied with the statutory
price offered by the Land Commission, the sale is concluded, and the
Land Commission make an order carrying the required sum of consols
(which is for convenience hereinafter called the purchase-money,
although it consists of stock and not of cash) to the account of the
estate in their books after deducting 1 per cent. for the cost of
investigation of title and distribution of the purchase-money, and upon
the purchase-money being thus credited to the estate, the landlord
ceases to have any interest in the estate, and the tenants, by virtue of
the order of the Land Commission, become owners in fee simple of their
holdings, subject to the payment to the Irish State Authority of an
annuity. The amount of the annuity is stated in the Bill. It is a sum
equal to £4 per cent. on a capital sum equal to twenty times the amount
of the gross rental of the holding. The illustration given by Mr.
Gladstone in his speech will at once explain these apparently intricate
matters of finance. A landlord is entitled to the Hendon estate,
producing £1200 a year gross rental; to find the net rental, the Land
Commission deduct from this gross rental outgoings estimated at about 20
per cent., or £240 a year. This makes the net rental £960 a year, and
the price payable to the landlord is £19,200 (twenty years' purchase of
£960, or £960 multiplied by 20), which, as above stated, will be paid in
consols. The tenants will pay, as the maximum amount for their holdings,
£4 per cent. for forty-nine years on the capitalized value of twenty
years' purchase of the gross rent. This will amount to £960 instead of
£1,200, which they have hitherto paid; a saving of £240 a year will thus
be effected, from which, however, must be deducted the half rates to
which they will become liable, formerly paid by the landlord. This £4
per cent. charge payable by the tenants will continue for forty-nine
years, but at the end of that time each tenant will become a free owner
of his estate without any annual payment. Next, as to the position of
the State Authority. The State Authority receives £960 from the tenants;
it pays out of that sum £4 per cent., not upon the gross rental, but
upon the net rental capitalized, that is to say, £768 to the Imperial
Exchequer. The State Authority, therefore, receives,£960, and assuming
that the charge of collecting the rental is 2 per cent., that is to say,
£19 4_s._, the State Authority will, out of £960, have to disburse only
£787 4_s._, leaving it a gainer of £172 16_s._, or nearly 18 per cent.
The result then between the several parties is, the landlord receives
£19,200; the tenantry pay £240 a year less than they have hitherto paid,
and at the end of forty-nine years are exempt altogether from payment;
the gain of Irish State Authority is £172 16_s._ a year. Another mode of
putting the case shortly is as follows: The English Exchequer lends the
money to the Irish State Authority at 3-1/8 per cent. and an annuity of
4 per cent. paid during forty-nine years will, as has been stated above,
repay both principal and interest for every £100 lent at 3-1/8 per
cent. On the sale of an estate under the Bill, the landlord receives
twenty years' purchase; the tenant pays £4 per cent. on twenty years'
purchase of the gross rental; the Irish State Authority receives £4 per
cent. on the gross rental; the English Exchequer receives 4 per cent. on
the net rental only. The repayment of the interest due by the Irish
Authority to the English Exchequer is in no wise dependent on the
punctual payment of their annuities by the Irish tenants, nor does the
English Government in any way figure as the landlord or creditor of the
Irish tenants. The annuities payable by the tenants are due to the Irish
Government, and collected by them, while the interest due to the English
Government is a charge on the whole of the Irish Government funds; and
further, these funds themselves are paid into the hands of the Imperial
officer, whose duty it is to liquidate the debt due to his master, the
Imperial Exchequer, before a sixpence can be touched by the Irish
Government. It is not, then, any exaggeration to say that the Land
Purchase Bill of 1886 provides for the settlement of the Irish Land
question without any appreciable risk to the English Exchequer, and with
the advantage of securing a fair price for the landlord, a diminution of
annual payments to the tenant with the ultimate acquisition of the fee
simple, also a gain of no inconsiderable sum to the Irish Exchequer. In
order to obviate the difficulties attending the investigation of title
and transfer of the property, the Bill provides, as stated above, that
on the completion of the agreement for the sale between the landlord and
the Commission, the holding shall vest at once in the tenants: it then
proceeds to declare that the claims of all persons interested in the
land shall attach to the purchase-money in the same manner as though it
were land. The duty of ascertaining these claims and distributing the
purchase-money is vested in the Land Commission, who undertake the task
in exchange for the 1 per cent. which they have, as above stated,
deducted from the purchase-money as the cost of conducting the complete
transfer of the estate from the landlord to the tenants. The difficulty
of the process of dealing with the purchase-money depends, of course, on
the intricacy of the title. If the vendor is the sole unencumbered
owner, he is put in immediate possession of the stock constituting the
price of the estate. If there are encumbrances, as is usually the case,
they are paid off by the Land Commission. Capital sums are paid in full;
jointures and other life charges are valued according to the usual
tables. Drainage and other temporary charges are estimated at their
present value, permanent rent-charges are valued by agreement, or in
case of disagreement, by the Land Commission; a certain minimum number
of years' purchase being assigned by the Bill to any permanent
rent-charge which amounts only to one-fifth part of the rental of the
estate on which it is charged, this provision being made to prevent
injustice being done to the holders of rent-charges which are amply
secured.
It remains to notice certain other points of some importance. The
landlord entitled to require the State to purchase his property is the
immediate landlord, that is to say, the person entitled to the receipt
of the rent of the estate; no encumbrancer can avail himself of the
privilege, the reason being that the Bill is intended to assist solvent
landlords, and not to create a new Encumbered Estates Court. The
landlord may sell this privilege, and possibly by means of this power of
sale may be able to put pressure on his encumbrancers to reduce their
claims in order to obtain immediate payment. The Land Commission, in
their character of quasi-arbitrators between the landlord and the Irish
State Authority, have ample powers given to enable them to do justice.
If the statutory price, as settled according to the Act, is too low,
they may raise it to twenty-two years' purchase instead of twenty years'
purchase. If it is too high, they may refuse to buy unless the landlord
will reduce it to a proper price. In the congested districts scheduled
in the Bill the land, on a sale, passes to the Irish State Authority, as
landlords, and not to the tenants; the reason being that it is
considered that the tenants would be worsened, rather than bettered, by
having their small plots vested in them in fee simple. For the same
cause it is provided that in any part of Ireland tenants of holdings
under £4 a year may object to become the owners of their holdings, which
will thereupon vest, on a sale, in the Irish State Authority. Lastly,
the opportunity is taken of establishing a registry of title in respect
of all property dealt with under the Bill. The result of such a registry
would be that any property entered therein would ever thereafter be
capable of being transferred with the same facility, and at as little
expense, as stock in the public funds.