The case for resisting all attempts at impairing the Union between Great Britain and Ireland can be made unimpeachable without reference to the Irish Land Question. It would be our duty to defend the Union as a bulwark of national safety, an instalment of Imperial consolidation, and a protection to the freedom of minorities in Ireland, even if it could be shown that agriculture, the chief industry of Ireland, had little to gain under the Union and nothing to lose under Home Rule. Fortunately, this cannot be alleged except by those who shut their eyes to the results of State-aided Land Purchase in Ireland, and refuse to consider the consequences of tampering with the mainspring of that beneficent operation: I mean the credit of a joint exchequer under one Parliament for both countries. "England's Case against Home Rule" coincides with Ireland's need for retaining the prosperity that has come to her, after long waiting, under, and because of, the Union. It is, therefore, fitting that a place should be found in this book for a brief account of what Irish agriculture may hope from the Union and must fear from Home Rule.
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 £4 a year for every £100 advanced over a period of forty-nine years. The instalment comprised £3 for interest, 2s. 6d. for expenses, and 17s. 6d. 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 £10,000,000. The largest number of applications for purchase in any one year was 6,195 for £2,271,569 in 1887, and the average price for all the holdings bought under these Acts was £396.
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 £4, which was, ultimately, divided into £1 5s. for sinking fund and £2 15s. for interest. This large sinking fund, £1 5s. instead of 17s. 6d., 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 £4 and the later purchasers only £3 15s. for each £100 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 £4 per £100, and extinguished his debt in 42-1/2 years. If he availed himself of them he paid £3 8s. 7d. per £100 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 £4 to £3 11s. 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 £100, became at one moment worth as much as £114; (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 £13,000,000. 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.