§ Order of the Day for the Third Beading, read.
§ Moved, "That the Bill be now read 3a"—(The Lord President.)
§ The Queen's consent, and the consent of His Royal Highness the Prince of Wales in right of his Duchy of Cornwall signified.
§ EARL FORTESCUEMy Lords, I have tried more than once to address you on this Bill, but would not persist to the inconvenience of your Lordships. 557 Now, however, before it leaves this House I must entreat your indulgence for a few minutes, and a very few minutes only. I have been for some time of opinion, and have publicly said so during the last 12 months at several Agricultural Chamber and Farmers' Club meetings, that some legislation on the subject was desirable; in order, while maintaining freedom of contract, to alter the legal presumption all over England to what it is in those parts, where an enlightened custom of the country has gradually obtained recognition in the Law Courts. I therefore think the Government was right in bringing forward a measure on the subject. But though this Bill has been much improved in its passage through this House, I still object altogether to its plan; I object to much of its wording; and I object to some of the grounds alleged by the noble Duke, its author, for its introduction. I object to the plan of the Bill because it begins by laying down a general principle in the most sweeping terms in one clause, while materially restricting its legal operation by subsequent clauses. I can conceive nothing more unwise or impolitic in the case of a question which has excited a great deal of popular feeling, and where a certain number of just and reasonable demands are mixed up with other unjust and unreasonable ones, than first to make an apparent surrender of almost everything with the one hand, while afterwards quietly taking back the greater part with the other hand. Such a plan of legislation hero I think most undesirable, not to say dangerous, from the landlords' point of view. Now, from the tenants' point of view, I think that, after you have limited, as I believe rightly, the tenant's compensation for any improvement to a sum not exceeding at most what he has expended upon it, it is most unjust to the tenant that you should further limit his claim for compensation to the case where the improvement has been successful; however honestly the work may have been carried out in accordance with the notice and description given of it to the landlord, and however complete may have been the landlord's consent and approval. Indeed, I felt this injustice so strongly that I had intended moving an Amendment about it; and was only deterred by the hopelessness of carrying it, and by 558 observing that the point had been noticed by others in the course of the discussion. Then in the interest of both landlords and tenants, I object to the general scheme of the Bill; so great a part of which is taken up with elaborate provisions about valuations and arbitrations, that its whole working seems to turn upon them. I therefore confidently anticipate that it will prove far less profitable to either land-occupiers or landowners than to surveyors and solicitors. Now with regard to these two highly respectable and useful professions, it should be remembered that their work is classed by political economists under the head of verificatory processes as distinguished from those of production or distribution: and that when the work of verification is artificially stimulated and increased by special legislation, an undue proportion of the wealth of the country will be un-profitably diverted into this channel; and either the cost of production thus needlessly enhanced, or its profits needlessly diminished. I object, therefore, to the expensive and complicated machinery of the Bill. I object further to some of its wording, and especially to the term "unexhausted" improvements as applied not merely to manures, which may not unreasonably be described as exhausted by one or at most a few crops; but also to buildings and bridges, to wells and watercourses, to roads and orchards; as if the buildings and bridges must fall down, the wells and water-courses choke up, the roads be stopped up, or the apple trees be blown down in the course of 20 years at most. The legal operation of this expression is indeed limited by other clauses; but the word itself is most unfortunate and misleading, and must tend to create grievous discontent with the measure. Lastly I object to one of the grounds prominently assigned by the noble Duke (the Duke of Richmond) for the introduction of the Bill—namely, increasing the production of food for the people. Time was, indeed, when that reason would have had just weight, in the days of the absurd sliding scale of the old Corn Laws, which we Liberals always denounced and the noble Duke so strenuously defended. For Protection did seriously restrict the supply of food to the people. But since its happy abolition immense quantities of food have been annually imported from abroad. And there is no 559 argument of the noble Duke's about corn which does not apply more strongly to coal. Coal is even more essential to our manufacturing and commercial prosperity; for fuel means force. Coal is some 20 times as heavy in proportion to its value as corn, and therefore cannot near as easily be supplied from abroad. Coal is not reproduced, and therefore our coalfields are in slow course of exhaustion; unlike our cornfields, which under skilful cultivation can go on yielding corn for an indefinite period. Lastly, there is no extravagant waste or folly known in the production of corn, which has not been, and is not, ten times surpassed in the getting and using of coal. But the real fact is, that when a Tory Government determines under popular pressure to legislate in a popular sense, it is very apt, as we have seen before, to take a leap in the dark; to use clap-trap arguments and announce sweeping principles, quite unconscious of the inferences and consequences logically deducible from the premisses, which it has so rashly laid down.
§ Motion agreed to; Bill read 3a accordingly.
§ LORD PENZANCEmoved to add at end of Clause 4 (Interpretation) the following definition of "letting value:"—
The letting value means the value at which the holding could he or could have been let if the improvement had not been executed.
§ Motion agreed to; Words added.
§ LORD CARLINGFORDsaid, he was anxious at this stage of the Bill to give the House an opportunity of re-considering this one question—namely, what was the most proper measure of the value of the compensation to be awarded under this Bill. They had been told that the improvement should add to "the letting value" was a condition vital to the Bill. He confessed he did not understand that way of putting the matter. He was perfectly ready to agree that the improvement for which compensation was to be claimed should be such as would add to the value of the holding. But it was a practical question how the value and the improvement for which compensation was to be given under the Bill could best be measured. He ventured to doubt whether the measure adopted by the Bill was the best 560 from a practical point of view, and whether it was likely to be understood by persons hitherto employed in determining questions of this kind. He was not aware that those gentlemen had ever heard of the condition of "increased letting value." He had carefully looked into the provisions of the Bill brought into the other House by the late Mr. Pusey, and also into the evidence taken by the Committee over which Mr. Pusey presided, and he had not been able to discover the phrase "increased letting value." Many of the improvements to be executed under this Bill would not add to the letting value. It was the large improvements which would have an obvious and palpable effect on the rent of the farm, and which could be proved in a Court of Justice by the valuer or the tenant when he made the claim. But would that remark apply to the minor improvements under this Act—which would be far more numerous? It would be very difficult in those numerous cases of minor improvements, however valuable the improvements might be to the occupiers, for the tenant to give evidence to the satisfaction of a valuer or a Judge that they would necessarily add to the letting value of the farm at the moment as measured by the increased rent that would be obtained. He doubted further whether this condition was consistent with the other provisions of the Bill. In conclusion, he begged to move, in Clause 5, line 23, to leave out ("adding to the letting value thereof,") and insert (" the benefit of which is unexhausted at the time of his quitting his holding.")
§ VISCOUNT PORTMANsaid, he had not interfered in the discussion of the Bill, because he had felt it did not apply, except in cases of the disability of the owner of land to give security to the occupier against the pressure of the successor to the estate; in fact, he had felt the force of "suave mari magno &c." principle; but now he yielded to the wish expressed to him to address the House. He had, in years long past, been in the habit, as a member of the Royal Agricultural Society, of visiting all parts of England, and holding intimate and friendly intercourse with farmers of all grades in all parts of the country, and he found that a real grievance existed, and was felt by them to need a remedy. He brought in a Bill in 1841 and again 561 in 1843, which was supported by the present Lord Privy Seal, with some few other Peers yet alive, and was referred to a Select Committee, where it was amended and left for the country to consider. It was a Bill to give power to persons under disability to grant leases, and to make agreements for specified improvements on a fixed value, to be exhausted by yearly enjoyment, or to be paid for as the term of enjoyment was or was not completed. This House afterwards preferred to allow the subject to be considered in the House of Commons before taking any further step. Mr. Pusey, after conference with him (Viscount Portman), undertook the work, and although his Bill passed the House of Commons, it did not find acceptance in this House. Parts of it only were enacted in the Act called "the Emblement Act," wherein was a clause giving the tenant a remedy against the landlord, for the value of buildings he might have erected. The subject then dropped; because a system of loan was established which owners under disability were able to obtain a charge on their land to be payable by instalments by themselves and their heirs, really much better for all parties than expenditure of the money of the tenant; but in these more recent times an agitation of a larger kind had been created, and under its pressure it seemed that the Ministers of the Crown had decided to propose this Bill. In his (Viscount Port-man's) opinion the great body of the occupiers of the land were indifferent to the subject, except so far as regarded the giving power to bind the successors of owners under disability. The chief agitators were the implement makers, the manure merchants, the lenders of money, and the borrowers of money. All those men wanted to get the security of the land for their money, and as soon as that was obtained, then to press on to abolish the law of distress for rent. There were, however, to be added some good farmers, who intended to quit their farms, who, in their last two years, by the aid of stimulants, could secure the utmost crop, and by the use of cake could improve the condition of the sheep and cattle to be sold off, and in addition to the gain from the artificial manure wished to get all they could persuade valuers to give them to add to their gain, rather than to secure themselves against 562 loss, for if they were so to be paid the probable loss would fall on the incoming tenant. Again, some farmers of capital desired to spend their money to avoid the payment of interest on money borrowed by the landlord, whereby such men could obtain double interest on their money by saving payment and by reaping the increased profit on the outlay. Improvement of a farm was made by continuous and steadily-continued good farming for a series of years, not by any sudden process; and although in some parts of the country larger crops might be obtained than could be grown by bad farmers, yet to talk of double crops was absurd, unless it was where none were grown, and all that was obtained thereon was of course double. Too much stimulant did not augment the profit of grain crops, but often lessened it, for it caused a mass of weak straw to grow, which fell as the grain became heavy, and the crop was often not worth half what it would have been with "good" farming as contrasted with what was called "high" farming. The tenant ought to have some advantage in his future lease for his improvements of the farm. His view had always been that increase of rent depended on extraneous causes to which the landlord had a fair claim, on the improvements made and paid for by the landlord, and on the improvements made by the tenant which should be allowed to him in the new rent. He had always been of opinion that the relations of landlord and tenant should be governed by contract—either by agreement or lease or other written contract—and he had let all his estates on written contracts for various terms of years, so he might say he was quite impartial as to the clauses of the Bill. He thought the great advantage of this measure was, that it would induce the generality of landlords and tenants to make agreements and define their engagements strictly. The words which Mr. Pusey deemed the best adapted for the purpose they were now discussing were—"The actual value of the improvement remaining after the termination of the tenancy," by which words he meant what remained to be paid of the sums previously fixed by agreement, in all cases, a necessary preliminary. His noble Friend (Lord Carlingford) proposed to use the word "benefit;" but 563 he (Viscount Portman) preferred the present wording of the Bill. The Government had taken the right words, and had guarded them properly by the definition of his noble and learned Friend (Lord Penzance). In his opinion, if the present Amendment were agreed to, a great injury would be inflicted on the Bill and on the people of this country. Benefit implied an opinion formed by the valuer, while letting value meant rent which would be a fact established. To the three classes of improvement the words "letting value" were not equally applicable. To the first and second classes it was the best test; to the third class it was less applicable, because the so-called improvement was fugitive. It was, in fact, merely the use of stimulants to obtain a crop, and often was exhausted in one crop, or, in case of a dry season, was useless for any future crop. It was, in fact, the mode wherein a farmer was able to exhaust to the utmost the productive power of the soil, and yet it was capable of estimate in the increased letting value, by helping to maintain the land in a productive state, so that the rent was augmented by the continuous good farming of the occupier continued to the end of his term. He regarded this measure as one of very great value in one way. It would lead landlords to consider that Parliament thought it right that they should make their agreements in a particular direction, and it provided a remedy when the owner of the land was under disability to bind his successor. He trusted, however, that their Lordships would firmly adhere to this being a permissive and not a compulsory measure, and that they would take care to maintain the great principle of freedom of contract, which was the best for the landlords, the tenants, and the labourers who would derive benefit from their legislation.
THE EARL OF KIMBERLEYthought the most convenient way of estimating the value of an improvement was practically that which had been proposed by his noble Friend behind him. He wished to point out that while this clause professed to give to the tenant a capital sum, representing the unexhausted value of his improvement, as calculated by the increased letting value, that sum was, under Clause 7, subject to a proportionate deduction for each year of the tenancy, whatever might be the increased 564 letting value. This was sure to excite a letting of injustice, as the two principles of valuation conflicted.
THE EARL OF AIRLIEpreferred the words in the clause, which he thought were clearer than the proposed Amendment.
§ THE DUKE OF RICHMONDsaid, the noble Lord who moved the Amendment (Lord Carlingford) had failed to convince him that it ought to be accepted by their Lordships. The definition given by the Bill of an improvement was "an improvement which adds to the letting value." The Bill declared that compensation should be given for that which added to the letting value, and one of the clauses set out in detail the manner in which that compensation was to be determined. The noble Lord said that valuers generally throughout the country would be employed—and he had no doubt they would be—on such occasions, but that they would not be competent to deal with the letting value of a farm. He could not conceive any body of men who would be more competent than men whose whole lives were passed in valuing property.
§ LORD CARLINGFORDsaid, he would not press his Amendment.
§ On Question that the Bill do pass,
THE DUKE OF ARGYLLMy Lords, as we have now arrived at the conclusion of our labours on this Bill, I trust the House will allow me to say a very few words on its general effect before it passes to the other House of Parliament. I am not sure that I recollect in my experience any similar case of a measure so important, so novel in principle, affecting such important interests, and having such extensive alterations made in it, and which, notwithstanding, has passed through all its stages without giving rise to a single division. I am sure that Her Majesty's Government will admit that we on this side of the House, while we have discussed it fairly, have shown no inclination to damage the Bill—and, on the other hand, we on this side quite admit that in conducting this Bill through the House my noble Friend opposite has shown that he was quite willing to receive suggestions from this side of the House made to improve its provisions. As the Bill now stands, though we may entertain different opi- 565 nions—and I entertain my own upon it—it will leave this House with the general assent and consent of your Lordships. I think, my Lords, this measure will have considerable effect upon the relations between landlord and tenants in England, and I will explain in a very few words what I think the effect will be. What is the state of things now, and what is it that it is supposed to require redress? I do not know that I can better illustrate the case than by telling the House a story that was told to me not many years ago by a very distinguished Member of your Lordships' House. I need not mention his name. My noble Friend told me that he had in a distant county in England an outlying estate, held by a very substantial tenant. It happened that he had never seen his property for some 12 or 15 years. On one occasion, however, he was hunting in the county, and visited a friend in the neighbourhood of this farm. Riding over to see it, he came to the place at which he imagined it to be. He looked round about him, and saw a large and substantial farm-house, which he had never seen before, and a very handsome windmill. He came to the conclusion that he must have gone to the wrong place, and that neither the farm-house nor the windmill could be upon his property. He therefore asked a labourer whom he saw where such and such a farm was; whereupon the labourer said—"There it is, straight before you." My noble Friend found that his tenant had actually, without his knowledge or sanction, laid out a very large sum of money, not only upon the farm, but upon the farm-buildings. On asking whether there was any custom under which a tenant might have done so, he was told certainly not, but he was simply holding the land at will under the ordinary law of England, at six months' notice. The story made a great impression upon my mind. No Scotchman certainly would have done such a thing without having some security for it—my noble Friend opposite knows that very well. It is a splendid illustration of the confidence between landlord and tenant in England and of the moral atmosphere which could bring about such a state of things. At the same time, if I am asked whether it is a satisfactory state of matters, I say, as the French officers said of the Bala- 566 clava charge—"It is magnificent, but is it not war;" so I say of this—it is magnificent, but it is not business—it is an illustration of a state of things which calls for legislation such as the present, and I cannot help coming to the conclusion that in future there will be under this Bill clear written agreements for the letting and holding of land, and will induce landlords to insert in their leases some provisions giving compensation to tenants who might be obliged to leave their farms or who had expended their capital on the improvement of their holdings without opportunity of recovering that capital by any adequate length of possession. I cannot doubt that a feeling exists among many landlords in England which will still lead to discourage the letting of land on leases. As an instance of this feeling, I may mention that not many years ago a noble Lord a Member of this House possessed an estate in Scotland contiguous to my own and had lived upon it for a great number of years. One day I happened to meet him in this House, and he said to me, "I am about to sell my Scotch estate." "What for?" I asked him. "You seemed to be very fond of it, and to enjoy it very much." "Oh," he said, "I have been persuaded by an agent to adopt that abominable system of a 19 years' lease, and since then I have ceased to feel any interest in the estate, and intend to sell it." That was a speech that let a good deal of light on my mind as to the feeling which might exist in England between landlord and tenant. The objection on the part of some landlords to granting leases shows a state of things calculated to lead to the stagnation of agricultural industry. In the present day, if farming is to be successful and under the new conditions, landlords must learn to give up somewhat of the ancient feudal power which they formerly held over their property, and the tenants must have security for money expended under the new and costly system of farming which has come to be the custom in modern times. We must give them security for their tenures or assure to them a fixed term of years; if we do not give them leases we must give them some other security, that if they let on from year to year and laying out money on the improvement of the land they shall not be turned out of their farms 567 without compensation. With regard to the proposal that has been made to render the measure compulsory, I can only say that if it had been adopted every English landlord would have been compelled at once to re-value his farms, for the reason that tenants cannot be compensated in two different forms—they cannot have the advantage of low rentals, as is the case with a permissive system, and, at the same time, receive compensation for improvements either at the termination of their leases or after a certain lapse of time. Although I think that, as a general rule, low rentals are connected with bad and lazy farming, I cannot avoid the conclusion that a general revaluation will have most mischievous effects. This measure cannot be made compulsory without involving a State valuation of rentals, for, without such a valuation, landlords will recoup themselves for the compensation they may be called upon to pay by an addition of £1 or £2 an acre to the rent of the land; and in that way tenants will be deprived of all the advantage the Bill is intended to confer upon them. We cannot, under a system of open competition, secure advantages to tenants unless we proceed the whole length of a State valuation; and are we to have regulation and over-regulation prices for farms? Such a state of things will not stand. So long as the Bill is permissive, it may have the effect of introducing voluntary agreements all over England; but any attempt to make it compulsory will be attended with infinite mischief. It is to the honour of the House that all parties have concurred in passing a Bill which is not an empty sham—which we have not passed because we think it will have no effect at all—but a Bill which we believe to be based on sound principles, and which will place landlords under strong and powerful motives to adopt agreements consistent with those principles. The Bill will have three great results—it will confer important powers on limited owners—which have long been enjoyed in Scotland under special Acts—it will make necessary written agreements all over the country, and it will allow compensation to go on as it does now in the form of low rents without necessitating—as a compulsory Bill would unquestionably do— 568 a simultaneous and universal re-valuation of farms.
§ THE EARL OF MALMESBURYsaid, that the discussion on the Bill showed how everyone was disposed to look at the question from the standpoint of how it would affect himself, or how it would affect the interests of the community with which he was himself most intimately connected; and this was the case with the noble Duke (the Duke of Argyll), for the relations between landlord and tenant in Scotland were far more businesslike than they were in England. But then the diversities were so great that the customs of the South of England could scarcely be understood in Scotland. There the farms were principally carried on by men with large capital, while in England a man might have no more capital than he had borrowed. Till very lately not one among 30 or 40 tenants had a signed agreement. When he himself succeeded to his property, he did not find a single properly written agreement in existence between the tenants and his father—all they had to rely upon were memoranda of verbal promises and detached portions of letters. In the enthusiasm of youth, he wished to change all that and give leases; but he found his tenants would not accept leases. In the case of one tenant at £1,000 a-year of a farm which had been in the family for more than a century a lease was accepted; but when it lapsed nothing could induce the tenant to renew it; and he preferred a yearly tenure. Tenants insisted upon going on from year to year, and they would not have leases because they thought they were more independent without them. Now under this Bill landlords and tenants would be obliged, in their own interests, to have written agreements. If the Bill had been a compulsory measure nothing would have induced him to assist in carrying it. Nothing could be more disadvantageous to farmers than a compulsory law. It would be humiliating to them as suggesting that they could not take care of themselves, and humiliating to landlords as implying that they could not be trusted to make fair agreements with their tenants. Whatever changes might be made in the Bill in the other House, at all events he trusted no attempt would be made to tamper or trifle with the great principle of freedom of contract.
§ THE EARL OF FEVERSHAMthought he might infer from the speech of the noble Duke (the Duke of Argyll) that discussion had changed his opinion of the Bill and had caused him to regard it with more approval than he did at first. For himself, believing it to be founded upon principles of justice between landlords and tenants, he saw no reason why-it should not come into operation. The call for compensation for unexhausted improvements was not owing to any real want of confidence in the great bulk of the landed proprietors; but, no doubt, among the smaller landowners injustice had been committed in various cases, and tenants had often grievances to complain of, that in parting with the land they had received no compensation for improvements they had made. He hoped the effect of this measure would not be the introduction of leases as in Scotland, for in this country tenants had full security for their holdings—he had tenants on his own property who had held the same farm, father and sons, for generations. But this measure would be useful to the agricultural interest by laying down the principle on which compensation should be afforded; and if it was sound in principle, he saw no reason why it should not be generally adopted. He could not allow the Bill to pass without expressing his acknowledgments to the Government for having brought forward such a measure, believing that it would be of great use to the agricultural interest.
§ THE DUKE OF RICHMOND, in reply, said, he wished to say one word in consequence of what had been said by a noble Lord (Viscount Portman) with regard to that part of the Bill which related to freedom of contract. He stated most emphatically that the Government adhered to that principle enunciated throughout the discussion on the Bill—namely, that it was not their intention to interfere with freedom of contract, and that any interference with freedom of contract they should consider as tantamount to the defeat of the measure altogether. The Government fully appreciated the conduct of noble Lords on the other side; they were grateful to them for the very considerate attention they had given to the measure and for the many valuable suggestions they had made; and he must add that the opposition to the Bill had been conducted in 570 a manner that was most gratifying and satisfactory to Her Majesty's Government.
§ Bill passed, and sent to the Commons.