§ Order of the Day for the House to be put into Committee, read.
§ THE LORD PRIVY SEAL AND SECRETARY OF STATE FOR THE COLONIES (THE EARL OF CREWE)My Lords, before I move that the House resolve itself into Committee, I desire to make one or two general observations which I think may be for the convenience of the House, with regard to some of the Amendments on the Paper. Your Lordships will have observed that no small number of Amend- 715 ments, some of them of a very drastic character, have been placed on the Paper with reference to the financial provisions of the Bill, and I think it is incumbent on the House, having regard to its own dignity and to its customary procedure, to consider what course ought to be taken with regard to these Amendments. Speaking generally of these Amendments, though not exhaustively, it may be said that several of them propose to place a further charge, in some cases of a large amount—although that is not a strictly relevant consideration—upon the finances of the country; and according to the custom which prevails between the two Houses we may, I think, take it as certain that any such Amendments sent down from here to another place would by the authorities there be regarded as a breach of the privileges of that House. I might further point out that a great many of these Amendments would not only constitute a breach of privilege so far as we are concerned, but they go beyond anything which could be done in another place, because, as your Lordships very well know, provisions of that kind cannot be moved in another place except by the Government of the day. Consequently, in attempting to enforce such provisions we should be going, not only outside our own usual customs, but we should be arrogating to ourselves powers not exercised by members of the House of Commons. In those circumstances we have to consider what is the best course for us to take. In his speech towards the close of the debate on the Second Reading the noble Lord, whom I do not see in his place, Lord Curzon, drew attention to the fact that a great part of my speech in moving the Second Reading was devoted to this financial question. My Lords, that was purposely done in consideration of the facts which I have just been stating to your Lordships. It seems to me to be not entirely unreasonable that the financial bearing of the Bill should be discussed in general terms at such length as your Lordships may desire. I should have been glad if the debate on the Second Reading had been protracted with the view of that general discussion; but when it comes to moving Amendments, we are, I think, as your Lordships will admit, in a somewhat different position. Personally, and speaking for myself, I have no objection to discussing once more, if it should be once more, or afresh, if it should be afresh, any financial points that may arise in connection with the particular Amendments moved by noble 716 Lords, but speaking not as a member of the Government but as a member of your Lordships' House I do think that it would be unfortunate if Amendments of the kind I have mentioned were sent down to another place. What I have said does not apply to all the Amendments dealing with Part I. There is, for instance, an Amendment in the name of the noble Lord opposite, Lord Langford, dealing with priority, a great part of which appears to me to be outside what I have said. That is a legitimate subject for discussion, although I think there is one subsection of his Amendment which would without doubt have the effect of increasing the charge on the Exchequer. But, speaking generally, the effect of the Amendments is as I have stated, and I have thought it right therefore to call the attention of your Lordships to the matter.
§ Moved, That the House do now resolve itself into Committee.—(The Earl of Crewe.)
§ THE MARQUESS OF LANSDOWNEMy Lords, I am glad to hear the noble Earl the Leader of the House announce that he is quite ready to discuss questions which will arise on some of the Amendments to be moved by my noble friends on this side of the House, and to which he took exception, on account of their supposed encroachment on the privilege of the House of Commons. To my mind such a discussion would be most desirable. The financial provisions of this Bill really are of vital importance, and must to some extent affect our deliberations with regard to the remaining clauses. It seems to be quite evident, for example, that some of the proposals of the Government are likely to operate most prejudicially to the progress of purchase in Ireland. But there is another aspect of the case upon which I wish to touch. A great many of these suggestions were not debated at all in the House of Commons owing to the application of the guillotine, and it seems to me, therefore, quite clear that those who have given attention to this particular aspect of the case are well within their rights when they desire to avail themselves of the wider opportunities afforded in this House in order to secure an adequate consideration of that which they desire to submit to Parliament. I may also say this, that some of the Amendments which will be proposed from this side are Amendments which have been promoted entirely with the object of making helpful suggestions to His Majesty's Government—suggestions which, although we might not be in a position to impose them 717 upon the Government, are yet at least entitled to the most open-minded examination at their hands. I hope, therefore, we shall debate these Amendments. Whether the noble Lords who have put them down will think it desirable to press them to a Division is another matter, but what I do respectfully ask for them is that they shall be fully and freely discussed.
§ LORD CASTLETOWNI would like to ask the noble Earl a question of which I have given him private notice, Is it the intention of His Majesty's Government to give any priority to vendors to whom the subclauses of Clause 3 apply over those dealt with by subsection (2) of the same clause, or are future vendors under subsection (3) to wait until those vendors who have pending purchase agreements are disposed of? There is some doubt among many of us who come from Ireland as to what will be the procedure under these circumstances. If future vendors are to wait there is really no use in their coming to terms with their tenants, as according to the time which will be required for the pending purchase agreements to be disposed of they may have to wait for from seven to ten years for payment. There is very little difficulty in carrying through ordinary sales, whereas in some of the pending purchases there may be a great deal of difficulty about title, possible complications, arrangements to be come to; and although the agreements have been completed with the tenants there may be a number of legal difficulties in the way of the purchase, and consequently their completion may be postponed for a number of years. Under these circumstances, I think it is rather hard on a future vendor who has voluntarily deprived himself of his estate and tries to live on the interest in lieu of rent paid by the Land Commission, if he has to wait while the pending purchases are completed.
LORD MAC DONNELL OF SWINFORDBefore the noble Earl the Leader of the House answers that question, I beg respectfully to say that I think he would find it easier to answer it if he would do so when the debate on Lord Langford's Amendment after Clause 3 is closed, because I think the debate on that clause will throw light on the point which my noble friend has raised.
§ THE EARL OF CREWEI am willing to take either course, although perhaps it 718 would be the simplest to reply generally now to the noble Lord, and, of course, any further light which debate on the Amendment of the noble Lord opposite may throw upon it may lead to some further observations from me. What the noble Lord asks is whether future vendors who come in under Clause 3, subsection (3), can hope to have their cases dealt with at all until all pending agreements have been disposed of. As the law stands at present, it is clear that they could not; they would have to wait their turn. But the House will remember what I said at the time of the Second Reading with regard to the arrangements proposed for the Estates Commissioners. Supposing that five millions in cash and five millions only, are available, which we are bound to assume so long as stock is at its present price, one million of that cash would be required for the purpose of sales through the Congested Districts Board and the Estates Commissioners, two millions would be devoted to those who will take cash and cash only, and the remaining two millions to those who were willing to take half cash and half stock; and it was hoped that a further two millions might be dealt with for those who were prepared to take stock only. That would make nine millions; but it is hoped that the Estates Commissioners would be able to deal with advances to the amount of ten millions, and if that hope is realised that would enable somewhere about one million of these future agreements, paid in three per cent. stock or cash at the discretion of the Treasury under the subsection mentioned by the noble Lord, to be dealt with in any given year. The noble Lord, I think, somewhat overstated the time when he said that future vendors and purchasers may have to wait, even at the worst, from seven to ten years. We should hope that the pending agreements would be cleared off before that time, and in the circumstances I have named we hope it may be possible for a certain proportion of the future agreements to be dealt with almost from the first.
THE EARL OF DONOUGHMOREMy Lords, I do not wish to prolong the debate, but I desire to point out that the noble Earl the Leader of the House has made about the most important announcement that has been made since this Bill has been in print. We now understand that future agreements are in some cases to receive 719 what practically amounts to priority over agreements which have been waiting for three or four or five years. If the members of this House had been made acquainted with that arrangement or that part of the scheme before the Bill was read a second time, my noble friend Lord Dun-raven would have had much more support against the Second Reading than he got last week.
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [THE EARL OF ONSLOW in the Chair.]
§ Clause 1:
§ 1.—(1) In the case of advances made in pursuance of future purchase agreements, three pounds ten shillings shall be substituted for three pounds five shillings as the rate of the purchase annuity under section forty-five of the Irish Land Act, 1903 (in this Act referred to as the Act of 1903).
§ (2) So far as respects advances made for future purchase agreements, the rate of interest to be paid by the Land Commission to the National Debt Commissioners under section thirty-six, and by the Congested Districts Board to the Land Commission under seventy-two of the Act of 1903, shall be three per cent. per annum, instead of two-and-three-quarters per cent. per annum.
§ (3) The National Debt Commissioners shall, in the accounts kept by them of the Irish Land Purchase Fund, distinguish between advances made in pursuance of pending purchase agreements and advances made in pursuance of future purchase agreements.
§ LORD ORANMORE AND BROWNE moved an Amendment providing that, if the landlord and tenant so agree, these proposed alterations shall not have effect, and that "in lieu thereof the rate of interest comprised in the annuity of £3 5s. referred to in Section 45 of the Irish Land Act, 1903 (in this Act referred to as the Act of 1903), shall be such rate, not exceeding three per cent., as the Treasury may prescribe from time to time, and every such change in the rate of interest shall be published by the Treasury in the Dublin Gazette." He said that this Amendment was put down for consideration in another place, but owing to the use of the closure it was impossible to move it. He was glad that the Amendment which stood first on the Notice Paper in their Lordships' House should be one which did not directly interest landlords, but which did to a very large extent benefit tenants. That fact might, perhaps, tend to make those who criticised the action of their Lordships' House, and who thought that their Lord 720 ships were too much influenced by selfish motives, realise that in this Bill, at any rate, they were not approaching this subject in their own interests, but were trying to put the Bill into such a shape that it would be a benefit to the people of Ireland as a whole. It might be objected by the noble Earl the Leader of the House that this was one of the Amendments which dealt with the question of privilege. But he thought he had better deal with the Amendment first, and then try to argue that privilege did not enter into this case. As the Bill stood at present, the sinking fund remained the same as it had been in the past—namely, one half per cent., while the rate of interest was to be ra[...]ed from two and three quarters to three per cent. The Amendment which he moved proposed for the present at any rate to retain the rate of interest as fixed in the Bill, but to vary the sinking fund and to make it less. He was told that the effect of this would be that whereas under the scheme of the Bill the total loan would be repaid in sixty-eight years, if the Amendment was adopted all they had to do was to reverse the figures and put eighty-six years instead of sixty-eight. There was no doubt that this suggestion would be extremely popular amongst tenants in Ireland. They cared extremely little whether their remote descendants seventy years hence might have to pay annuity a few years longer, but they did care very much what they had to pay at the present time, particularly when they knew that their neighbours who had purchased under the provisions of former Acts were paying at that rate. In proof of this he mentioned that in the Act of 1885 annuities were prolonged, and out of 22,247 purchasers under that Act, no fewer than 21,236 took advantage of the change which enabled them to pay a lesser annuity and extend the period. Out of 897 purchasers under the Act of 1891, no fewer than 878 took advantage of this provision. As to the question of the security of the State, he did not think that this matter of extending the repayments would be of any great importance when they remembered that at present the annuities under the Act of 1885 were extended to seventy-nine years. There was a provision in his Amendment which might make the time for the total repayments rather shorter, because if under some other Government, within the next fifty years, it might be possible to borrow money on more advantageous terms than 721 at present, the Treasury was authorised to vary the rate of interest. The consequence would be that the sinking fund would be larger, and the total amount would be repaid in a shorter time. As to the question of privilege, he submitted that this was not a question of taxation at all. This was a loan from the State which had to be repaid. He did not propose to vary the interest except with the consent of the Treasury, and all he suggested was that instead of a fixed sinking fund it should be a variable one. Their Lordships might remember that the suggestion to change the tenants' annuity and raise it met with very much opposition in another place, and it was only carried by a majority of thirty-two. He thought that if it had been possible to discuss this matter his Amendment might perhaps have been carried in another place. If the noble Earl the Leader of the House allowed that this Amendment was not a question of privilege and if it should come back from another place objected to after consideration, he did not think this was an Amendment upon which their Lordships could insist. But it would be a great thing if it could be submitted for consideration there. If, however, the noble Earl refused to consider it, he should begin to think that the noble Earl was afraid that the Chief Secretary might again fall a victim to the blandishments of the Irish Party, and that the noble Earl was anxious to save him from that temptation.
§
Amendment moved—
In page 1, line 18, after the word 'annum' to insert the words 'provided always that, if the landlord and tenant so agree, the foregoing provisions of this section shall not have effect, and in lieu thereof the rate of interest comprised in the annuity of three pounds five shillings referred to in section forty-five of the Irish Land Act, 1903 (in this Act referred to as the Act of 1903), shall be such rate, not exceeding three per cent., as the Treasury may prescribe from time to time, and every such change in the rate of interest shall be published by the Treasury in the Dublin Gazette.'"—(Lord Oranmore and Browne.)
§ THE EARL OF CREWEI am afraid His Majesty's Government cannot accept the Amendment, but before I discuss it I should like to say one word in reply to the noble Lord and the noble Marquess opposite, with regard to the absence of discussion in another place on this or other Amendments. Without attempting to discuss either the merits or the demerits of the system known as the guillotine, it is undoubtedly a fact obvious to everybody who read the debates which took place on this matter in another 722 place that the line which was taken by the Opposition—and it was quite within their right to take it if they pleased—was, instead of dealing with a particular Amendment such as this, to engage on each day in a general discussion. That was the line which was taken, and the result was that in the course of nine days in Committee very few individual Amendments were dealt with. It is not for me to say whether this Amendment constitutes a breach of the privilege of the House of Commons or not. In my view it undoubtedly does, but the noble Lord does not think so, and he must take the course as regards that which he thinks best. But on the merits of the Amendment I ought to say one word. The noble Lord lightly dismissed the reversal of the figures from sixty-eight and a-half years purchase to eighty-six and a-half. I do not know what he would say if someone owed him £100 and only offered him 001 for his £100. There are thus cases when a reversal of the figures may have very serious results. At the very best, the time of purchase would be extended to seventy-six years—that is to say, if interest were fixed at two and seven-eighths; but I am given to understand that the Treasury entirely decline to contemplate a longer period than sixty-eight and a-half years. That, as I think I said before, they consider too long, and it must be remembered that when we began first to talk about land purchase in Ireland forty-nine years was considered the reasonable and proper period. Stress has been laid on the undesirability of different tenants holding in the immediate neighbourhood at what are practically different rents from each other. I admit there is an objection to that, but it is one which may easily be overstated. In the first place, it exists to a large extent at present. There are no small number who purchased under the former Acts who are paying at a higher rate, and the same thing, of course, applies in the case of judicial rents. Under those circumstances, although we admit a certain degree of objection, we are not prepared to alter the provisions as they stand in the Bill.
§ *VISCOUNT MILNER said that as this Amendment proposed by Lord Oranmore was not receiving much support from the leaders of the Opposition, it probably would not be carried to a Division. He ventured to think, however, that there was much to be said for it. With regard to the argument of the noble Earl the 723 Leader of the House that the Treasury altogether declined to contemplate repayment in eighty-six years, the noble Earl seemed to think that that disposed of the matter. As an old Treasury man he (Viscount Milner) fully appreciated the view of the Treasury. They naturally would prefer to be repaid in sixty-eight years rather than in eighty-six years, but he could not admit that that very natural and proper feeling on their part entirely settled the question for the Legislature. Looking at it in a common-sense way, he did not think that the extension of the period, though undoubtedly a drawback, was a drawback at all commensurate with the very great advantage which would arise from the fact that by the extension of time future purchasers would be put in exactly the same position as those who had already purchased in respect of the amount of their instalments. Personally he thought the Amendment was a very defensible one, and if it were possible to induce the other House to reconsider its decision on the subject great service would be rendered to the cause of the smooth working of land purchase in Ireland. He desired to make one other observation by way of caveat, and it was on the question of privilege. The noble Lord who moved this Amendment did not think the Amendment was an invasion of the privilege of the Commons, and he agreed with him. On the other hand, the noble Earl the Leader of the House said he was clearly of opinion that it was. Well, this question of privilege was one which he had done his best to study, and he was bound to say that the authorities were so extremely conflicting that it was, perhaps, rash to speak with any great definiteness on the subject. But since the subject was once more going to play an important part in the politics of this country he wished to be allowed to say at this stage that he could not admit that, where there was no question of directly increasing the charge and burden borne by the taxpayers the House of Lords was precluded from taking any action which might in some indirect way affect the Exchequer or the financial position of the country. It seemed to him that, if they were going to allow the doctrine of privilege to be pushed to this point and to admit that they had no right even in the discussion of Bills which were not Money Bills, to suggest Amendments, they would be excluding themselves from profitably discussing a vast number of measures which they had always 724 been in the habit of discussing. That objection might be raised on almost any important clause of a very large number of Bills—such as had been before their Lordships' House quite recently. As an independent member of their Lordships' House he felt rather alarmed at the tone already adopted on the Government Bench on this question of privilege, and must reserve to himself the right of protesting again if it was pushed to what he believed to be an unreasonable point.
§ THE EARL OF MEATH said that as an Irishman who desired that this Bill, if it was to become law, should pass with the greatest possible case, and that its operations should be such as would be supported by the Irish population as a whole, he did hope that His Majesty's Government would think seriously as to whether they could not do something to meet the Amendment of the noble Lord. There was no doubt that an Irish tenant if he saw a neighbour paying a different sum from himself was very apt to think there was some injustice, and if they desired peace in Ireland every effort should be made that no one man should be able to say that he was paying more than another for the same amount of land and of the same value, but that the whole nation should feel that this Act was one which was for their benefit. He also agreed with the remark made by Lord Oranmore that the average tenant would be very pleased indeed to feel that the length of tenure was to be eighty-six years rather than sixty-eight. He did not believe there was one man in Ireland who wanted it to be sixty-eight rather than eighty-six.
§ THE EARL OF CREWEI have no desire to enter into a general discussion on the subject raised by the noble Viscount who spoke from the Cross Benches. I have had occasion before now to state my views on the question of privilege. It is not our business as the Government of the day to guard the privileges of the House of Commons. Those privileges are in the keeping of that Chamber, and when any measure or any Amendment reaches them from here which they consider conflicts with those privileges, it is not the Government but Mr. Speaker and the officers of the House who call attention to the fact. My only object in mentioning the matter at all was that it did not seem right that we on these Benches should, so to speak, encourage your Lordships to send down to another place Amendments which may be there regarded as breaches of privilege. Having said this 725 once, I have no desire to even call attention on any particular Amendment as to whether it constitutes in my opinion a breach of privilege or not. Noble Lords opposite are quite as competent as I am to form their own judgment on that point, and they must deal with each in the way they think best. I merely called attention to the fact, and I am able after that, I think, to wash my hands of the whole business. I have only one more observation to make, and that is with regard to the merits of this Amendment. We are told that it is a most unfortunate thing that in any circumstances tenants should be paying different annuities or rents under the same conditions. It may be a long time to look ahead, and the tenants of the moment, as the noble Earl, Lord Meath, said, would jump at the proposition, but how about the time when one set of freeholders are paying nothing, and the others are paying this annuity during the intervening period between sixty-eight and eighty-six years? When that time comes you will have in an extremely acute form the difficulty of different tenants in the same circumstances not only paying different rents, but one set paying annuity and the others nothing at all.
§ THE MARQUESS OF LANSDOWNEI desire to make one observation with regard to the question of privilege which we have been discussing this afternoon. The noble Earl the Leader of the House has told us, and I think we have heard something of the same kind before, that it is not for him and his colleagues to defend the privileges of the House of Commons, that they rested entirely, I think he said, with Mr. Speaker and the officers of the House, and that if Mr. Speaker and the officers of the House decide that there has been a breach of the privilege of the House of Commons there is an end of the matter. Now, my Lords, I do not think that is exactly how things happen. What does happen, unless I am very much misinformed, is this. The Speaker advises the House that there has been a breach of the privileges of the House of Commons, and it is then a question for the House to decide whether it will insist upon its privilege or not. When that event happens the House is apt to be guided by the advice of the Government of the day, and what has happened more than once has been that the House has been advised by the colleagues of the noble Earl opposite to insist on its privilege, even when in this House noble Lords opposite 726 have been obliged to admit that the Amendment which had been inserted here was really one which improved the measure before the House. I do not think it is quite fair to place the whole of the responsibility upon the Speaker and officers of the House, because that responsibility to a very great extent belongs to the noble Earl opposite and to his colleagues.
§ THE MARQUESS OF LONDONDERRY desired to say one word of a practical character, and to give a concrete case, which, he said, very often carried more weight than a theoretical one. Their Lordships would probably remember that in 1891 Mr. Balfour, who was then Chief Secretary for Ireland, introduced a Land Purchase Bill into Parliament. There were considerable alterations to be made in the Bill in their Lordships' House, and he (Lord Londonderry) was instructed that if he moved Amendments to the financial part of that Bill those Amendments would be accepted in another place. Those Amendments were inserted and were accepted in another place. Why? Because the Government of the day were anxious to have those Amendments, and they had that moral force which if exercised to-day would go a long way towards meeting these financial questions, which had to be raised in their Lordships' House for the simple reason that they had not been discussed in another place.
§ LORD ORANMORE AND BROWNE said the noble Earl opposite had told them that tenants might not object to paying their small annuities, but that their descendants would object. He desired to point out with regard to that, that the whole of the new proprietors were not created the same year, and those who were created under the Bill of 1903 would become by degree freeholders in the same way that the men created under the new Bill would become freeholders. Therefore there would not be that friction arising from the difference in time of repayment. The noble Earl had said that forty-nine years had previously been fixed as the time of repayment and that the Treasury did not like to extend that period, but he called the noble Earl's attention to the fact that that had been increased to seventy-nine years. In the circumstances, however, he did not intend to press his Amendment to a Division.
§ Amendment, by leave, withdrawn.
727§ On the Question that Clause 1 stand part of the Bill—
§ *THE EARL OF MAYO moved that the clause be deleted from the Bill. He said that he would take advantage of the very courteous words of the Leader of the House who said he did not think there was any reason why they should not discuss in general terms the financial aspects of this Bill. His reasons for proposing to delete the clause was that in the 1903 Act the tenant paid an annuity of £3 5s. for each £100 advanced. Under this Bill he would have to pay £3 10s. per £100 advanced. Five shillings might sound a very small sum, but to some tenants it was a very serious question, and this alteration in the annuity was likely to obstruct land purchase in Ireland. He was not going to talk about privilege. They were getting to the real cause of this change in the annuity. They were told that the tenant and the landowner must come forward and help the Treasury, in consequence of the state of the money market, by foregoing some of the provisions of the 1903 Act, and to enable land purchase to go on in Ireland. They were asked to help the Treasury to pay the loss on flotation of loans, and in the same breath they were told, with much emphasis, that land purchase must go on in Ireland. That had been often said both in the House of Commons and in their Lordships' House. This was the policy of the present Government. He thought that they in Ireland were really as good judges of the question of land purchase going on as the Treasury, and also as Mr. Birrell, and likewise his financial advisers. He noticed that Mr. Healy, with his usual habit of going straight to the point on a matter, said that he wondered whether the same set of liars were advising Mr. Birrell as formerly did. He did not wish to say anything rude, but it struck him that when one began to talk about the Treasury in that way, one began to make a joke of a very serious character. He did not wish to make a joke, but he mentioned that that was the way it was taken up by one of the Irish members in the House of Commons.
§ They were also told that the English taxpayer had pledged his credit to finance Irish land purchase. They had heard a great deal about the English taxpayer, but the Irish taxpayer paid exactly the same taxes as the individual English taxpayer. Class for class 728 he was taxed exactly the same. Ireland for the purposes of taxation was not treated as a separate entity. He was very sorry not to see Lord St. Davids in his place, or he would have commended that remark to his notice. This was the first time for forty years that any Government had proposed to increase the rate of the tenant's annuity. The uniform course in each Purchase Act had been to attempt to reduce the tenant's annuity. Under the Acts of 1885, 1888, and 1891 that annuity was reduced; in the Act of 1896 it was reduced from four per cent., and the Act of 1903 restored it to three and a quarter, the lowest figure so far reached. By reduction of the annuity two good things were secured—(1) it was made easier for landlord and tenant to come together; and (2) the security for the State was made better. In the House of Commons Mr. Redmond moved to omit this clause. That was debated up to the point when the guillotine fell. They had heard a great deal about the "will of the people." The "will of the people" was expressed by the representatives of Ireland, and in a House of 333 members the Government could only get a majority of thirty-five. He did not know whether that would influence their Lordships, but that was a fact they could not get over. The noble Earl in charge of the Bill knew as well as he did that if the tenant's annuity was increased it would increase the difficulties of carrying on land purchase; there were other provisions of the Bill that made it very difficult too. There would be the difficulty of bringing the landlord and the tenant together to make a bargain. The real truth would be that the tenant would have to pay more, and the landowner would have to ask more in order to cover this. They were not dealing with land purchase for the first time in their lives. They were well able to arrange these bargains between themselves, but then the Government stepped in and said, "The English taxpayer must not find so much money. You are to help him. But land purchase must go on."
§ He submitted that that proviso would not help land purchase to go on. He admitted that, in the present condition of the money market, if loans were floated there would be a tremendous loss; but what they wanted in this matter was patience, and not to be hurried on and told that they must sell their land, that the tenant must pay a larger annuity, and that 729 the landlord must sell and receive half stock and half cash, or cash 'or stock whether he liked it or not. The noble Earl the Leader of the House had divided the four millions into two parts. He said that two millions was to go for cash payments, and the other two millions for stock payments and partly cash. He had pointed out that they had not got that in the Bill, but the noble Earl hoped that the Estates Commissioners would see their way to carry that out. He used the word "hoped" over and over again. Well, they all hoped for the best, and they had been hoping for the best for a very long time, but they wished that the Government would put these things in the Bill and not indulge in hopes. Then they would have something tangible to go upon. He hoped the noble Earl would take that remark in good part. He did not believe the question of privilege came in when he moved to delete this clause from the Bill. He believed they had a right to delete a clause of this kind, but not to amend it. But he was not going into that, as the question of privilege had been well discussed by those much abler than himself. The feeling in Ireland as expressed by its representatives in the House of Commons was against this clause, and the feeling of noble Lords from Ireland was also against it.
§
Amendment moved—
To leave out Clause 1."—(The Earl of Mayo)
§ THE EARL OF SHAFTESBURY said it might be thought that an increase of a quarter per cent. on a purchase annuity of a tenure only amounted to five shillings, which did not seem on the face of it to be very much; but the fact remained that if they took a quarter per cent. on the amount of money which was still to be advanced, taking the Poor Law valuation of the land yet to be sold, and multiplied that by the number of years in which that amount of money had to be repaid, it meant that the Treasury would take another £20,000,000 out of Ireland, if, of course, the price of the land to be sold remained the same as it was to-day.
§ THE EARL OF CREWEThe noble Earl, Lord Mayo, in moving this Amendment, somewhat departed from it and entered into the question of priority. In doing so he made an observation which he hoped I would take in good part. I am sure I always take in that spirit any observations of the noble Earl, but it would be more convenient to discuss the whole question on the 730 Amendment of Lord Langford, and perhaps he will allow me to postpone until then any observations to be made upon it. The effect, of course, of the Amendment of the noble Earl—
§ THE EARL OF CREWEOh yes, it is an Amendment to leave out a clause. The effect of the Amendment would be to leave the rate of annuity at three and a-quarter instead of making it three and a-half as we propose. We assume, of course, that Clause 6, which transfers the burden from the Irish ratepayer to the Treasury, will be carried, and the effect of that would be, assuming that the loss on excess stock would amount to something like twenty-five millions, that the extra charge to the Treasury would be £800,000 a year; and allowing for the Development Grant would leave a charge of £640,000 a year. Well, the way the noble Earl puts that is that it is taking so much Irish money. Considering what the Exchequer is advancing, I confess that seems to me hardly a fair way to put it, and I am afraid, therefore, that there is no chance of our being able to accept the noble Earl's Amendment. Of course, we should have preferred, had it been financially possible, to leave the rate at three and a-quarter, but it is not financially possible, and therefore we cannot undertake it.
§ *THE EARL OF MAYO said that the noble Earl seemed to take a very pessimistic view of the future. He admitted it would be very difficult, no matter what financial provision they made, to carry on land purchase in Ireland except at very great loss, but he did not think that that enormous loss would continue for ever. If it did the prospect was indeed very black. He trusted that things would be a little better than they were to-day, considering the present price of Consols. He would not press his Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 1 agreed to.
§ Clause 2 agreed to.
§ Clause 3:
§ 3.—(1) Notwithstanding anything in section twenty-seven of the Act of 1903, advances for the purposes of the Land Purchase Acts may, subject to the provisions of this section, be made in whole or in part by means of stock in the manner and under the circumstances for which provision is made by this section.
731§ (2) For the purpose of carrying into effect pending purchase agreements advances may, if the vendor agrees, be made by means of the issue to the prescribed persons, in the prescribed manner, and subject to the prescribed conditions, of such an amount of guaranteed two-and-three-quarters per cent. stock, as, at the market price of the day of issue (as certified in the prescribed manner) is equivalent to the sum to be advanced if that price is not below ninety-two pounds (ex-dividend) for an amount of stock of the nominal value of a hundred pounds, or if the stock is below that price by the issue of such an amount of stock as would be equivalent to the sum to be advanced if the stock were at that price.
§ (3) For the purpose of carrying into effect future purchase agreements advances may, if the Treasury think fit so to direct, be made by means of the issue of an amount of guaranteed three per cent. stock equal in nominal amount to the sum to be advanced and carrying dividends as from the date of the advance.
§ (4) Stock issued in pursuance of this section as the equivalent of an advance shall, as between the vendor and the purchaser, be accepted by the vendor as the equivalent of the corresponding amount of purchase money, and a vendor, although he is not an absolute owner, may agree to advances being made by stock under this section for the purpose of carrying out any pending purchase agreements, and any person having power to sell under the Land Purchase Acts, although he is not an absolute holder, may enter into any future purchase agreement, notwithstanding that the purchase money may be payable in stock in pursuance of this section instead of in cash.
§ *THE EARL OF MAYO moved to amend the provision in the clause which provided that advances might be made by the issue of such an amount of guaranteed two and three-quarters per cent. stock as at the market price was equivalent to the sum to be advanced, if that price was not below £92 for stock of nominal value of £100, or, if the stock was below that price, by the issue of such an amount as would be equivalent to the sum to be advanced if the stock were at that price. He proposed to substitute the figure "£88" for "£92." He said that this was one of the most important clauses in the Bill, which affected not only the agreements already arrived at between the landowner and the tenant and which were in course of completion, but also future purchase agreements. This clause practically meant the repeal of Section 27 of the Land Act of 1903. Under that Act all vendors were to receive the purchase money for their estates in cash, and were able to make their bargains with their tenants on a cash basis.
§
He would pass to the effect of the figure £92. In respect to purchase agreements, Clause 3, subsection (2), of the
732
Bill purported to give an option to a vendor to receive his purchase money in two and three-quarters per cent. stock, but if he did not like to exercise his option he was to be compelled to take, instead of every £100 cash, an amount of stock as would be equivalent in value to £100, if the market value of the stock was not below £92; but if the market price was below £92 the vendor, notwithstanding this, must accept stock as if it was at ninety-two, although, in fact, it might be only at eighty-five. The price of guaranteed two and three-quarters per cent. stock was eighty-five and a fraction to-day. Through the kindness of the Irish Office he had a table which showed the different prices that a vendor would lose on every £100 of purchase money. Supposing the price was eighty-four, he would lose 8.7; if it was eighty-five, he would lose 7.6, and so on. That omitted the cost of brokerage. But though the vendor lost if the stock was under ninety-two, he did not get the benefit if it was over that price. If His Majesty's Government put the figure at eighty-eight, the position would be a great deal better with regard to this issue of stock. The Chief Secretary, speaking generally with regard to this Bill on the third day of the Committee stage, said—
But you cannot ask us to throw all considerations of pounds shillings and pence to the winds. You cannot ask us to repeat in the future the mistakes that have been made in the past. We are quite prepared when the time comes to consider any rational proposal that may be made on this subject, and not in any heated or angry spirit but with a desire to carry out this great system of land purchase in the best possible way.
The right hon. gentleman might not have been speaking on this particular thing, but presumably those words showed the feeling in his mind, at any rate, with regard to the vendors, and he (Lord Mayo) did not see anything to contradict in that. He did not wish to treat this matter in any spirit of contradiction, but they would undoubtedly suffer very much from this fixed figure of £92. He warned noble Lords from Ireland that behind all this was compulsion, and they must bear in mind when the suggestions were put forward in a very nice manner by the Chief Secretary, and no doubt by the Government, that behind all and overshadowing all existed compulsion.
§
Amendment moved—
In page 2, line 33, to leave out 'ninety-two,' and to insert 'eighty-eight.'"—(The Earl of Mayo.)
§ *THE EARL OF DONOUGHMORE asked the noble Earl the Leader of the House to tell them definitely in the course of his reply why this figure of ninety-two had been fixed upon and put into the Bill. He knew the reason given in the Runciman Report, which was that evidence was placed before them to the effect that landlords would be likely to hold stock at ninety-two because it gave them three per cent. They had been cudgelling their minds a great deal to know who it was who knew so little of Ireland as to give such evidence. Every one in Ireland knew, and it was stated to the Dudley Commission, that trustees' securities invested at their prices at the time the evidence was given yielded £3 11s and even £3 12s. per cent. When everybody in Ireland knew that, how could anybody think that landlords were likely to willingly accept a three per cent. investment when under a tustees' investment, the strictest investment they could go in for, they could get from £3 11s. to £3 12s. He hoped they would have some justification from the Government of the figure ninety-two when the noble Earl replied.
§ THE EARL OF CREWEAs your Lordships all know, this provision is inserted in the Bill in respect of the block which has taken place, and its object is to hold out an inducement to vendors to take either stock or part cash and part stock in consideration of receiving a priority before the Estates Commissioners. But it is important to bear in mind that there is no compulsion put upon anybody to take stock at all. If any man thinks he cannot afford to hold a three per cent. investment, well, he must wait until he is entitled to be paid in cash.
§ THE EARL OF CREWEI am speaking, of course, of the pending agreements, and in those circumstances it is not reasonable to assume, as the noble Earl seemed to assume—I am sure he did not mean to—that some sort of pressure is being placed upon the vendors. I cannot pretend to know from my own knowledge how far the noble Earl who has just sat down is right, and whether it is the case that even where it is a question of taking half cash and half stock, nobody in Ireland could be found to hold on to a three per cent. investment. I think the noble Earl took a somewhat liberal view of what could be obtained in 734 large amounts by trustees; it is important, I think, to bear that in mind, because I have no doubt we could all mention particular cases where three and a half per cent. can be obtained. But when you come to very large sums which might be desired to be invested at a given time, I think the noble Earl was a little sanguine in the idea that it would be possible to obtain £3 11s. for the whole of the money. The figure 92 was undoubtedly fixed as representing a three per cent. investment, and supposing it to be realised, taking the stock at 86—which is about the figure one might venture to take it at—a vendor would stand, supposing he were to realise at once, a loss of £6 10s. That is to say, he would receive £108 14s. of this stock, which would be worth in the market about £93 10s. That is how it works out. If the noble Earl's Amendment were taken, supposing land stock to be sold at 86, the vendor would merely stand to lose just under £2; on the other hand, the Treasury in that case would have to stand a loss on excess stock to the amount of £12 10s. Again we should have been glad if it had been possible to lower the figure, but in the circumstances, and being more sanguine than noble Lords opposite that a fair number of people will be prepared to come forward and in consideration of this acceleration to accept certainly part in stock, and some we trust all in stock, we are not able to alter the figure.
§ THE EARL OF MAYO said that though the vendor lost if the stock was under whatever the figure was, he did not get the benefit of it if it was over that price. That seemed to him a rather hard-and-fast rule for the Treasury.
§ THE EARL OF CREWEThat is so, no doubt.
§ Amendment, by leave, withdrawn.
§ Clause 3 agreed to.
§ *LORD LANGFORD moved to insert a new clause to follow Clause 3. He said that where a vendor agreed to accept payment in stock, the estate should be dealt with in the priority in which it appeared on the stock payments register, so long as there were funds for dealing with estates of vendors who had not agreed to accept payment in stock. He felt rather a difficulty at the moment in proposing his Amendment owing to the questions that 735 had been raised in the House about the figures. He hoped that the Government, represented by the noble Earl and the Lord Chancellor, would give them the figures. He did not think that the figures given before were the same as the noble Earl had given that night.
§ THE EARL OF CREWEIs the noble Lord speaking with regard to the figures I gave?
§ THE EARL OF CREWEThe two millions of stock?
§ THE EARL OF CREWEThe figures are the same that I gave before.
§ *LORD LANGFORD said he wanted to put this from the tenants' point of view. They had fifty millions worth of land which they had hoped would have been sold. Many of the tenants were paying from three-and-a-half to four per cent, while waiting. Only on the previous night a noble Lord had told him that he had been kept waiting four years for his purchase money. His tenants had therefore been paying a larger annuity than they would have done if they had been vested—namely, three-and-a-quarter per cent, in their own holdings. This was not only a landlords' but a tenants' relief Bill. Noble Lords were not there only representing themselves, but a great body of men who had signed agreements under the Act of 1903, and whom they were bound to consider as far as they could. He was much taken with the answer which the noble Earl had given to Lord Castletown, but it appeared to him that matters were not as clear as they should be with regard to those who entered into agreements in 1903. The pending agreements had been increasing enormously up to the 15th of September. The clause that the noble Earl, Lord Mayo, had dealt with just now gave no idea—and there was no instruction anywhere in the Bill—as to how this money was to be dealt with. In dealing with the payments to the three respective parties under this Bill they wanted to deal with them in priority, and, he hoped, with, patience and without compulsion. He 736 believed the Government were going to give them five millions in cash. Out of that they would take one million for future sales in congested districts. There would, therefore, be only four millions a year in cash towards clearing off the fifty millions. But they were told that in every year there would be an additional eight millions paid off. What did that mean? That out of those eight millions, four millions would have to be accepted by vendors in stock whether they liked it or not. It did not bear that construction. It would be given, and they would have to accept. If they did not like it, others could be brought in. Under subsections (1) and (2) of his Amendment he proposed to have a register of priority. Having read to the Committee subsections (3) and (4) of his proposed new clause the noble Lord said unless they had priority with regard to land purchase in Ireland, he thought there might be injustice. He was sure the Government only wanted justice, but it was absolutely necessary to have the rule of priority in these matters with regard to the payments which the Government were about to sanction. Subsection (5) of the Amendment was very important. He tried as well as he could by that section to keep everything in its proper place, to see that there was no injustice and to give priority to those who came first. As to subsection (6), they were bound to have a fair and impartial rule for dealing with these cases. This was a Government measure, and they asked the Government to meet them in this case and allow them to amend the Bill so that they would not have to wait for their payments. Subsection (8) of his proposed new clause was entirely a tenants' clause. He had read to their Lordships the whole of the Amendment and he would point out what appeared to them the necessity for having stock registers. The object of the registers was to prevent the later class of cases being given priority. There appeared to be a very great danger that those who signed agreements in 1903 and who wanted cash were likely to be swept out of sight by men coming in and taking stock. He hoped the Government would look into the danger of the stock being allowed to swamp those who wanted cash payments, and the danger of the cash payments being indefinitely postponed, not only to the disadvantage and the detriment of the landowner but to the injustice of the tenants.
737
§
Amendment moved—
To insert the following new clause:
'4.—(1) With respect to all advances in respect of estates, or for the purchase of estates, whether under pending or future purchase agreements, the following provisions shall have effect—
(2) A general register shall be kept by the Land Commission of all proposed sales of estates under the Land Purchase Acts, whether directly to the tenants, or to the Land Commission, or otherwise.
(3) Every proposed sale shall be entered in the general register in its proper priority, such priority on the register to be determined in manner hereinafter provided, that is to say—
(4) The Estates Commissioners shall sanction and make advances in the order of priority in which the estates appear on the general register, unless the Judicial Commissioner for good and sufficient grounds shall direct that any particular estate shall not be taken in the priority appearing on the register.
(5) If a vendor agrees to accept payment in stock, either wholly or partially, the estate shall be transferred to a stock payments register in the order in which his agreement shall be received, and shall be dealt with in the priority appearing on that register, provided that no such vendor shall be permitted under any circumstances to obtain a priority, either as to the whole or any part or the estate which his case would not possess if it remained on the general register, so long as there are funds at the disposal of the Land Commission for the current financial year for dealing with estates of vendors who have not agreed to accept payment in stock.
(6) At the beginning of every financial year the Treasury shall inform the Land Commission of the amount of cash intended to be provided during that year, and shall, as required, supply the Land Commission with cash to the amount aforesaid, and the Land Commission, so far as such amount of cash aforesaid shall extend shall in that year deal with estates the advances for which are to be made in cash before dealing with any estates the vendors in which have agreed to accept payment, wholly or partially, in stock.
(7) A vendor who has agreed to accept payment, wholly or partially, in stock, may at any time before the date on which his Final Schedule or Allocation Schedule shall have been settled by the Examiner, elect to have his estate restored to the General Register in the order of priority, as nearly as may be, in which it originally stood in such register.
(8) Where a vendor, with the view to carrying into effect pending purchase agreements, has agreed to accept payment partly in stock, and such stock
738
has been issued to the prescribed persons under the provisions of section three of this Act, the estate shall be forthwith vested in the tenants, but the purchase annuity payable by the tenants under section forty-five of the Act of 1903 shall not begin to run until the remaining portion of the purchase money of the estate has been advanced, and in the meantime the tenant shall pay to the Land Commission interest on his purchase money at the rate of three pounds five shillings per centum per annum, and out of such interest when received the Land Commission shall pay to the National Debt Commissioners interest at two and three-quarters per centum per annum, on the amount of the stock so issued in respect of the sale of the estate and shall pay over the residue of such interest to the vendor of the estate.'"—(Lord Langford.)
§ LORD MACDONNELL OF SWINFORD said the Amendment which the noble Lord had placed on the Paper dealt with an extremely intricate and technical matter, and he proposed to say a few words in explanation. There was a good deal in the noble Lord's Amendment which he thought might with advantage be accepted by the Government; on the other hand there was a great deal in it which if accepted would throw the whole work of the Estates Commissioners office out of gear. At present a general register was kept in the Estates Commissioners office in which all applications and deposits of agreements were entered in the order of presentation. They were dealt with, so far as he knew, in that order unless there were very special reasons given for dealing with the estate out of its order of priority. With this Bill, if it passed into law, an entirely new state of things would come into existence. Instead of having to deal with one class of estates the purchase money of which was to be paid in cash, they would have to deal with three classes—one, the purchase money of which must be paid in cash; the second, in which the price must be paid in cash and stock, according to the option of the vendor; the third being purchases in which payment would be in stock alone. The ordinary procedure would be to enter upon a register which now existed all applications to sell whether coming under the Act or not, and then to create three subsidiary registers under that general register—namely, a register for all payments in cash, a register of payments partly in cash and partly in stock, and a register, in which the payments were to be made in stock. Those several registers would be compiled from the general register, and the compilations would be in the order 739 of priority. For instance, a person who claimed to be paid in cash would have his name entered in the cash register. Then would come a vendor who desired to be paid in cash and stock. His name would be entered in the cash and stock register, and vendors desirous of being paid in stock alone would be entered in the stock register. All those applications would naturally have priority in the order in which they were entered in their particular registers. For instance, a person entered in the cash register would have his case dealt with in the order of his priority in that register. In like manner a person in the cash and stock register would have his case dealt with in the order of priority of entry in the part-cash-part-stock register. No disadvantage would accrue to any one from this registration in separate registers because his case would be dealt with in its own priority, and he would get his payment out of a separate allotment of money.
§ He thought the noble Lord's object could be secured if their Lordships accepted subsections (1) and (2) of his proposed new clause, and then for subsection (3) accepted a provision running thus— "Every proposed sale shall be entered in the general register in the order of time at which the agreements were lodged or at which the request under Section 6 of the Act was deposited; or the particulars and documents required under Section 7 were supplied." Subsidiary to such general register there should be three registers, provided for by a subsection which should run, "There shall be three supplementary registers according as the vendor desires payment to be made to him in cash or part in cash and part in stock or wholly in stock." The entries of estates in each such subsidiary register should be made according to their priority as indicated above, but thereafter priority of treatment should be that of the supplemental register in which the estate appears. Then subsection (4) should read something like this: "In the case of estates entered in each supplemental register the priority should be as follows:" incorporating paragraphs (a), (b), and (c) of subsection (3) of the noble Lord's proposed new clause, which he thought had introduced an excellent improvement on the existing practice. The noble Lord said that payment should be given not only in the order of time of entry, but that it should also be determined by the date on which the duties imposed by the law on vendors were 740 discharged. Not only should the Estates Commissioners have regard to the time the papers were deposited, but also to the time when all the legal formalities had been concluded. It often happened that a vendor deposited his papers, say on the first of January, and then did not trouble himself any further for some time. Perhaps his solicitor was careless and allowed several months or perhaps a year to elapse, and no action was taken. On the other hand, the vendor who deposited his papers, say, on the first of February, and took care that his solicitor did his work, might have, all the duties imposed by the law concluded in six months time and then ask to have his case passed through. It would be a monstrous hardship that the latter vendor should be kept waiting for his money because the other vendor was negligent. If they did not place a premium upon the speedy and accurate discharge of duties in the matter they would have a block, and the result would be complaints against the Estates Commissioners Office. Fresh demands might probably be made for additional establishment charges, whereas, the real cause of the delays lay in the carelessness of the applicants themselves. Therefore he thought that the noble Lord had made a most valuable suggestion, and one that should be adopted.
§ With regard to subsection (6) of the Amendment he suggested that it should read, "At the beginning of every financial year the Treasury shall inform the Land Commission of the amount of cash intended to be provided during that year, and shall apportion that amount between advances to be made entirely in cash and advances to be made partly in cash and advances to be made on account of the Congested Districts Board." That procedure would, if adopted, introduce a simple organisation in the, Estates Commissioners Office, and no vendor would be treated out of his proper order, and the order in which he would be treated would largely depend upon his own punctuality in discharging obligations which the law imposed upon him. The noble Lord in subsection (7) of his Amendment provided that if at some time after the procedure had advanced a vendor became dissatisfied with what had been done, he might if he so desired have his estate taken out of the subsidiary register and restored to the general register. If that were allowed, great confusion would result, for the general 741 register would, as an indication of priority, have been superseded by the subsidiary registers; and steps might have been taken accordingly which could not be recalled. The proposal in subsection (8) of the Amendment was also impracticable. What it meant was that a vendor should make his application to be paid partly in stock and partly in cash, and when the proceedings in his case had gone sufficiently far to enable the Judicial Commissioner to proceed to a distribution, he should get by way of advance the stock which was due to him while the cash would remain unpaid perhaps from three to five years until the Treasury were in funds, he in the meantime receiving three and three-quarter per cent. interest on it instead of the three and a-half per cent. which the law allowed. On the other hand the tenant would no doubt have his annuity reduced to three and a-quarter, but he would be kept out of his vesting order and the time for the commencement of his annuity. So far from being in the interests of the Irish tenants he thought this proposal would more be in the interests of the Irish landlords who having got their stock, might dispose of it and invest the proceeds at say four per cent., and at the same time get three and a-quarter per cent. interest on the remainder. He hoped the noble Lord would not press this part of his Amendment, but if he did press it, he for one, while he greatly approved of a considerable portion of his Amendment, would be compelled to oppose him.
§ THE EARL OF CREWEThe noble Lord who introduced this Amendment dealt with this exceedingly complicated matter, if he will allow me to say so, in a very clear and distinct way. The noble Lord behind me, Lord MacDonnell, as is his invariable custom, also dealt with the matter in a most lucid manner; but at the same time I think he would have assisted the deliberations of your Lordships' House as a whole if he had placed on paper his suggestions on the manner in which he thought the noble Lord's Amendment might be improved.
LORD MAC DONNELL OF SWINFORDI intended to say that if permission were given to me I would bring up a clause on Report.
§ THE EARL OF CREWEIt undoubtedly 742 does make discussion of the matter more difficult when we have not before us, in settled terms, the very important modifications which Lord MacDonnell proposes to make in the Amendment. As a matter of fact, the noble Lord behind me proposes to alter the Amendment in some most important particulars. What Lord Langford proposes to do is to revert to the practice which obtained in the time of the late Government, when all applications were entered and proposed to be dealt with in the order in which the applications were made. Under the regulations which were issued in July, 1905, in the time of the Viceroyalty of Lord Dudley, vendors of land were not to be placed at a disadvantage as compared with vendors under previous Acts. The noble Lord proposes to have three registers, one dealing with direct sales, the other dealing with those under paragraph (b) of subsection (3), and the other with the sales of the Land Commission under paragraph (c), and he proposes, I understand, that all those shall be dealt with in the order of simple priority, without any reference to the one or the other. In the first place, the noble Lord proposes that the Estates Commissioners and the Congested Districts Board should have no power of dealing separately, and even pari passu, with their own transactions in priority to the direct agreements. The position of the Estates Commissioners and the Congested Districts Board, if the noble Lord's Amendment were carried, would be one of real inconvenience, and I do not think that it is difficult to show that their position does differ from that of ordinary direct transactions between landlord and tenant. They buy an estate for the purpose of improving it. They redistribute some of the holdings and they create new holdings, and surely it is of real importance that they should be able to get to work at this particular business as soon as possible, and not have an estate lying on their hands—as might be the case under the Amendment of the noble Lord—for five years or even more. If advances had to be made in all cases of direct sales which had priority in time over some transactions with which the Estates Commissioners were concerned, that, of course, would be the case. There is a block as we all know of fifty millions in this matter of the direct sales, and the delay caused to the transactions of the Estates Commissioners would be very great indeed.
LORD LANGFORDBut the fifty millions have nothing to do with the sales of the Congested Districts Board and the Estates Commissioners. These are direct sales between landlord and tenant.
§ THE EARL OF CREWEYes; but I understand the noble Lord desires that all those direct sales which may have priority of time over sales of the Estates Commissioners should be dealt with before they can deal with those referred to in subsection (4). That subsection says—
The Estates Commissioners shall sanction and make advances in the order of priority in which the estates appear on the general register, unless the Judicial Commissioner, for good and sufficient grounds, shall direct that any particular estate shall not be taken in the priority appearing on the register.I think if the noble Lord examines those words he will see that in their literal meaning they would mean a complete stoppage of the work of the Estates Commissioners. Supposing an application had been lodged and had to be postponed for some purpose, some difficulty of title, some question of turf or some matter of the kind. As the words stand, it would literally mean that all subsequent agreements would have to be hung up until this one was dealt with, even though there might be some hitch which would force it to stand over for some months or even longer. Then there is strong objection to subsection (4) of the Amendment. The noble Lord proposes that the Judicial Commissioner shall direct that any particular estate shall be taken out of its turn. Under the Act of 1903 all the administrative duties of the Land Commissioners under that Act have to be performed by the Estates Commissioners. The Judicial Commissioner has been sedulously kept clear of everything of that kind, and therefore his judicial position, the value of which I know is fully admitted by noble Lords opposite, has been maintained, but if you drag him into questions of priority and administration of this kind we fear you may seriously compromise his position in that respect. When we come to subsections (5), (6), and (7) I think your Lordships will see that their effect is altogether to do away with the provisions which we propose with regard to the issue of stock. The noble Lord stated that there was a real danger that those who desired to be paid in cash 744 would be crowded out—"flooded out" I think was his expression, by the rush of those anxious to take stock. On the Last Amendment we were told that nobody was going to take stock, and I hope we may hear what the settled opinion of noble Lords opposite is. We hope and believe that there will be a settled demand in the different classes, the half and half class, and the whole stock class. Certainly we do not share the fears of noble Lords that so many applications will come forward to be paid in stock that it will be found impossible to deal with the cases of those who desire to be paid in cash. The effect of this subsection is that it would take away any advantage which might be assumed to accrue to the vendor who is willing to take part or the whole in stock. He gains nothing. He apparently comes up exactly at the same time at which he would have come up if he was to be paid in cash, and that being so, it would be useless, I think, to continue the provision for paying anybody in stock under the Act. We all admit that from the financial point of view, although he gains in time, the man who takes in stock has to lose something. If he is not to gain in time, he will have to be paid in cash, and we shall have to go on with the melancholy process of paying five millions a year in cash, and not issuing any stock at all. I think that on reconsideration, and after looking again at subsection (5), the noble Lord will see that the man who comes forward for stock has no advantage whatever over the man who we may describe as the cash man pure and simple. In fact, I am not sure that under subsection (6) of the Amendment he would not be under a disadvantage, because as long as there are any vendors unsatisfied they are to be paid in cash, but the unhappy man who wants stock is not to be dealt with, and he would be in a worse position than if he had stood out for cash instead of stock. Lord MacDonnell dealt with the complicated questions raised in subsection (8) of the noble Lord's Amendment. Subsection (8) contemplates a payment at two different times. That is to say, the stock portion of the payment is to be paid at once, and the cash portion is to be paid at some future time, possibly a number of years later. We have never contemplated that. We have always contemplated that the two payments would be made at the same time and the whole transaction closed, and the man who takes 745 half stock would get his transaction finished a little earlier than if he had stood out for cash.
§ THE EARL OF CREWEOh yes, the transaction is to be a single one. He receives both at the same moment.
LORD LANGFORDThe noble Earl said something about the delay in stock and then he rather dropped his voice. He said the cash payment would not be delayed, and we are very glad to hear that on this side of the House. But I did not hear what he said about stock payments being delayed.
§ THE EARL OF CREWEAll I said was that he would be the gainer; he would be paid rather sooner; he would be paid with less delay than if he had stood out for cash and for cash only. Perhaps I may assume that these transactions in two stages which the noble Lord proposes in subsection (8) will not be pressed by him. Lord MacDonnell pointed out very truly—and I could give some figures on the subject if the Committee desired—that by such a plan it would be quite possible and conceivable that a landlord might receive during this interval considerably more than he had been receiving from the tenants in the form of rent. I will not trouble the Committee with the figures unless they are desired. Lord MacDonnell said he would bring the matter up again on Report, and I should not like to give a definite opinion upon it before I have seen it in print. It was not our suggestion to include this in the Bill at all, for the simple reason that similar provisions had been placed in the form of regulations, and our intention was to issue them in the form of regulations, which no doubt could be placed at the disposal of Parliament before any long time has elapsed. Noble Lords will remember that the regulations which were issued in February, 1906, just after we came into office contained this provision with regard to priority, "The Estates Commissioners shall so regulate their business for advances in respect to holdings that holdings proposed to be sold under Sections 1 to 5 of the Act shall be as far as possible 746 in the priority in which the agreements were deposited in the office and the other duties imposed on vendors and tenant purchasers by law have been discharged." Those, I think, are practically the same words as the noble Lord has got in his Amendment. Under Heading B. there was established the order of priority, giving power to the Estates Commissioners to accelerate the advance of purchase money. We know the history of those regulations, and it has been our intention—to which we should be disposed to adhere unless there is some strong reason shown to the contrary—to proceed again by regulation in this case, instead of placing the provisions in the Bill. There would, I think, be greater convenience in proceeding by regulations in a case of this kind than by absolutely stereotyping the sums—no, not the sums, I suppose Lord MacDonnell does not propose to mention any sum of money?
§ THE EARL OF CREWEYes, because, of course, it would be clearly impossible for the Treasury to be bound by an Act of Parliament to make an issue of cash in a particular year. But, as I say, subject to anything that may be said in the course of the debate we propose to issue these in the form of regulations.
§ *LORD ASHBOURNE said this question had attracted a great deal of attention, and it was of very high importance. He did not for a moment suggest that the Government were not anxious to arrive at a perfectly fair solution of the matter, but it was obvious that this question of preserving a fair statement of priorities was one of high importance, not only as a, matter of sentiment but as a matter of substance. There was a belief that in some way or other priority had not worked out in such a way as to give those who had applied first their payments reasonably early, and that many people had had to give way to those who came in much later, particularly if those who came in later had purchased through the Congested Districts Board or the Estates Commissioners. His noble friend Lord Langford had done a valuable service to the cause of land purchase administration in Ireland in raising this discussion. Whether every syllable or subsection in this Amendment 747 was the most proper way of meeting the difficulty might be another question. He would like before saying that it could all be accepted to read side by side with it the clauses suggested by Lord MacDonnell, who obviously spoke with knowledge, and also to be able to collate with it what the noble Earl had just said. Then it might be that when they came to report they would be in a condition to arrive at a section which would be reasonable, free from objection, and workable. When the late Government were in office, and Mr. Walter Long was in Ireland, during the Viceroyalty of Lord Dudley, there were regulations made. Some of them might be in operation still, and some had been replaced by others. But the noble Earl said he was not sure that this question could not be worked better by regulations than by the hard words of a Statute. There was something in that argument, if they knew what the regulations were to be and how and to what extent they were to be applied. He always felt the force of an argument that there was reason to leave some room for elasticity and to make necessary changes in administering large codes. He would not go into the details of the Amendment. The question bristled with complications and technicalities. There were three or four sets of owners, all with claims, and the thing was to adjust those claims in such a way that they would harmonise in administration with each other, recognising each claim put forward, and not allowing the first and earlier claims, which might be strong and urgent and unanswerable, to be postponed without very clear reason. A case had been established for providing a solution which would satisfy or seek to satisfy the heart-burning that existed on this question, and they should try to do something which would be regarded as a fair and reasonable effort to settle this question.
§ *VISCOUNT MILNER said their Lordships would be all agreed by this time that it was not possible to arrive at any final decision on the very important points under discussion until they had had the benefit of seeing Lord MacDonnell's Amendment. But there was one point which he would like to ask the noble Earl, because it appeared to him likely that the difficulty which he felt himself might be felt; by other noble Lords who were trying to understand the position in this somewhat complicated matter. It was 748 with the view of eliciting information which might assist them in future debates that he asked this question. If he had misapprehended the noble Earl he hoped he would forgive him. He understood the noble Earl on the Second Reading and again this evening to say that it was the intention of the Government as far as possible to distribute five millions every year, and of this amount one million was to be available for sales to the Estates Commissioners and the remaining four millions were to be divided equally between those who insisted on having all their payment in cash and those who were willing to take half cash and half stock. It seemed a reasonable distribution, and he thought they must agree with the noble Earl that unless there were some arrangement of this kind the scheme would fail altogether. But was it intended that this distribution of the available funds should be laid down in any sort of definite and binding manner, or was it to rest absolutely with the Government of the day to vary it as much as they pleased? The noble Earl said that the intention of the Government was to make the distribution he had referred to, and no doubt when he said that on behalf of the present Government they could rely upon it that that was the course which they now meant to pursue. But for how long? Was this a matter which it was intended to leave entirely to the discretion of the Government of the day? Was it the wish of their Lordships that it should be so left? The noble Earl had pointed out that this question of priority in the past had been left to be decided by regulations. That, no doubt, was a most convenient method, but he pointed out that far more important issues were now going to depend upon the question of priority than had depended upon such regulations in the past. He thought it was fair that there should be a reasonable division of the available cash between those who wanted all in cash and those who were prepared to take part in stock. But, supposing, unfortunately, the stock was to have a very considerable fall. The effect of that undoubtedly would be that there would be less disposition to take stock. It seemed to him that in that case there would be a temptation to the Government of the day to put the screw on people to accept stock, in spite of the fall, by assigning a smaller, possibly a much smaller, proportion of the available money to those who still 749 desired to be paid entirely in cash. Would that be entirely a fair thing to do? Was it a thing which they ought to leave entirely to the discretion of the Executive of the day? He did not pretend to decide the question, but it was a matter of greater importance than had been decided by the regulations in the past. He would like, therefore, to receive from the noble Earl some further information on this point.
§ THE EARL OF CREWEI will endeavour to answer the question which the noble Viscount has clearly set before us. I confess it does seem to me to be exceedingly difficult to put down in black and white exactly what the Estates Commissioners are to do in respect to the sums of money at their disposal. I fear that would be an impossible thing to do.
§ VISCOUNT MILNERI quite understand that. It was a question of proportion that I was asking the noble Earl.
§ THE EARL OF CREWEOn the question of proportion, you can hardly venture to bind yourselves until you know what is going to happen. For instance, we have heard the most deplorable foreboding from some noble Lords that nobody will take half stock and half cash. If they contend that so much cash ought to be available in a given year, I suppose for solely cash payments, it seems very difficult to ear-mark a particular sum for a particular purpose. I do not think the possibility suggested by the noble Viscount is a likely one because, after all, everybody's object must be to accelerate these transactions as far as possible, and there is no means of forcing everybody to take half stock and half cash because at the back of everything remains the fact that if a man asks for cash at a given moment he is entitled to have it; and, therefore, there must always be people on the list who are entitled to be paid in cash. To say that no payments shall be made except half in cash and half in stock would be a compulsion upon vendors to take stock, and it does not seem to me possible to do that under the Act as it stands. I will consider that point, and will further consider the point as to how far it is possible, or how soon it would be possible, to place the regulations before your Lordships. We will not lose sight of the point mentioned by the noble Viscount, though I am not very confident it would be possible to find any form 750 of words which could be included in a Statute.
§ LORD COURTNEY OF PENWITH said the question raised by the noble Viscount might be solved in the following manner, and he only suggested it now so that it might be considered by the Government. Supposing it were suggested that £5,000,000 was available and £1,000,000 was placed at the disposal of the Estates Commissioners; the other £4,000,000 could be apportioned, provided at least half of the amount was applied in cash payments and the other half was applied to those who took half in cash and half in stock, with the proviso that if the people with half stock and half cash did not exhaust the remaining £2,000,000 the balance should go to augment the sum of those who took all cash.
§ THE EARL OF MAYO said he understood the noble Earl had stated that he could not accept the Amendment, and that the procedure was to be entirely by regulations.
§ THE EARL OF CREWEI thought it was agreed that the whole matter was going to stand over for Report until we saw what Lord MacDonnell proposed.
§ *THE EARL OF MAYO said that if the matter was to stand over he had not heard the noble Lord who moved the Amendment say so. The noble Earl the Leader of the House said he preferred to proceed by regulations instead of putting it in the Bill. That gave a latitude to the Estates Commissioners, which in this Bill resolved itself into one man, and he could quite understand it might be the wish of the present Government to proceed by regulations. What he and his noble friends were asking for was a register, and not regulations which might be varied by any Government which happened to be in power. If the matter was to come up on Report, of course that was another question altogether; but they rather took exception to regulations dealing with an entirely new state of affairs under this Bill.
§ THE MARQUESS OF LANSDOWNEI venture to suggest that the most convenient course was that suggested by the noble Earl the Leader of the House a moment ago—namely, that we should allow the further consideration of this matter to 751 stand over until the Report stage. Meanwhile my noble friend behind me is to be congratulated on having raised a very interesting and important discussion. It is undoubtedly the case that there has been a great deal of uneasiness in regard to this question of priority. I do not say whether suspicions were well or ill-founded, but there was a suspicion that priority was not always observed exactly as it might have been. I have no doubt that in many cases there was a quite sufficient explanation of the reason for which an estate was taken out of its turn, but what my noble friend desires in future is that the matter should be put upon a perfectly clear and intelligible basis. The intricacy of the problem has been a little increased by the intervention of the noble Lord, Lord MacDonnell, who made what seemed to be a very instructive contribution to the debate, but one which we can scarcely appreciate until we have had an opportunity of considering his words. I hope we shall have an opportunity of considering not only the scheme of my noble friend behind me, and also the scheme of the noble Lord, Lord MacDonnell, but that we shall also be furnished with a distinct statement as to the manner in which the Government desire to deal with this question, because as to that there is apparently much uncertainty.
§ Amendment, by leave, withdrawn.
§
*THE EARL OF DONOUGHMORE moved to insert the following new clause—
4. Where a vendor, under either pending or future purchase agreements, receives payment in stock instead of in cash, all charges, duties, incumbrances, and redemption prices of quitrents, tithe rentcharge or other superior interests payable out of the purchase money to the Crown, the Land Commission, the Commissioners of Public Works, or any public department, shall be received and paid in stock upon the like terms as payment in stock was received by the vendor, and it shall be lawful for the Land Judge, and the Judges of the Chancery Division, and for any trustees, in respect of any sums payable out of the purchase money into court or to such trustees, to accept payment in stock on the like terms as payment was received by the vendor.
The noble Earl said that this clause raised a very important point. Its object was to enable the vendor who accepted stock to redeem his superior interests in stock. Their Lordships were probably aware that in the case of almost every estate in Ireland—he knew of none in
752
which it was not the case—the owner was able to sell under the Purchase Acts subject to superior interests, and he fancied estates were held in Ireland subject to superior interests to a very much greater extent than they were so held in England, Scotland and Wales. The superior interests, roughly, corresponded to what were known in London as ground rents, although of course in Ireland these superior interests were found in agricultural property, and not merely in town property. These superior interests existed to a very large extent indeed. He had made some inquiries from one or two friends who were large land agents, and he was told it was by no means out of the common to find estates where the payment of superior interests exceeded as much as 25 per cent. of the rents which were collected. That was absolutely ignoring any mortgages and absolutely ignoring any family charges. They desired that when a vendor accepted stock he should have the power of redeeming these superior interests, all of which, of course, had to be redeemed when a sale took place, in stock at the price at which he received it. There was a direct precedent in the Purchase Acts themselves for such a provision as he asked their Lordships to insert. Section 17 of the Act of 1891 said that—
In the course of any sale proceedings, if it shall appear to the Land Commission that any tithe rent charge or head rent payable to them is redeemable out of the purchase money, and may be redeemed without injury to, and without waiting to ascertain the priority of any other charge, the Land Commission may, on the application of the landlord, order the redemption of the said tithe rent charge or head rent, by transferring to the Land Commission on account of the Irish Church Temporalities Fund, guaranteed Land Stock to the nominal amount payable in respect of such redemption.
That was a redemption in stock. In that case the redemption in stock was made at the price at which the vendor received the stock, and he was asking their Lordships' to follow that precedent absolutely. Section 15 of the same Act bore on the second part of his Amendment. It allowed trustees to accept this stock in satisfaction of their claims. Their Lordships would not forget the position. Vendors were to be offered by the Government stock at 92, no matter what its value was below 92. Was it unfair to say that the Government should take stock back at the same price in redemption of claims against them.
§ There was one other point he would like to urge upon their Lordships. It referred only to future bargains, but it was a very important one when viewed in this light. Landlords making bargains hitherto had known, of course, that it was necessary for them to redeem their superior interests, and they had been able to calculate exactly how much purchase money they were going to get as the result of sale, because they knew they were going to get cash. They were therefore able to calculate exactly how much they would be able to spend in redeeming through superior interests, because everybody knew the prices at which superior interests under the Act of 1903 had to be redeemed; therefore, they knew how much would remain for them for subsequent investment after the sale. Now in future that certainty would very largely disappear, because a landlord would not know for certain—could not possibly guess, in fact—at what price the stock he was going to receive 6 or 7 years hence would stand. Therefore, if this Amendment were not adopted it would be quite impossible for him to calculate how much stock it would be necessary for him to realise in cash in order to redeem his superior interests if he had to redeem them in cash, and consequently he would be in absolute ignorance as to what would remain to him after he had redeemed those superior interests. The effect was bound to be that every landlord would be tempted to ask for a slightly higher price as an insurance against the stock being lower in price when he looked forward to getting his money five or six years hence, and the effect of forcing the landlord to make that insurance, and to ask a slightly higher price was bound to check land purchase. That, he thought, was not the desire of anybody who was interested in this Bill. He trusted, therefore, that their Lordships would accept this Amendment.
§
Amendment moved—
To insert the following new clause:
'4. Where a vendor, under either pending or future purchase agreements, receives payment in stock instead of in cash, all charges, duties, incumbrances, and redemption prices of quit rents, tithe rentcharge, or other superior interests payable out of the purchase money to the Crown, the Land Commission, the Commissioners of Public Works, or any public department, shall be received and paid in stock upon the like terms as payment in stock was received by the vendor, and it shall be lawful for the Land Judge, and the Judges of the Chancery Division, and for any trustees, in respect
754
of any sums payable out of the purchase money into court or to such trustees, to accept payment in stock on the like terms as payment was received by the vendor.'"—(The Earl of Donoughmore.)
§ LORD ATKINSON desired to say a few words in support of his noble friend's proposed new clause, and to point out a matter that had not yet been considered. It was obviously desirable if this block was to be relieved that a great many vendors must take stock. According to the present Stock Exchange figures the stock was at eighty-five and a fraction, and it was to be given to them at the nominal value of ninety-two. The vendor lost something between six and a-half and seven per cent. on that transaction, assuming that he could turn his stock into cash to-morrow. Now in Ireland, on the whole, landlords' interests were encumbered up to about half their value, and under the provisions of these Acts the landlord could not touch one penny of his purchase money, or anything that represented the purchase money, until all the encumbrances were discharged. The result of that would be that before any estate could be wound up the vendor would be forced to put upon the market half the purchase price. In other words, assuming that they gave £2,000,000 a year, which the landlord took in stock, the result was that them must be £1,000,000 in that year put upon the market if the estate was to be wound up. That was a forced glut, and would invariably run down the price of the stock far below eighty-five, so that he would lose in fact a great deal more than six per cent. upon his purchase money. That had always appeared to him to be a reason why, if it were at all possible, the vendors should not be asked to take the entire purchase money in stock, but so much of it in cash as would enable them to deal satisfactorily with most of their encumbrances. He feared very much that unless such relief were given as was indicated in the Amendment of his noble friend, unless the vendors were enabled to pay some of the money in stock instead of in cash—and there did not seem much unfairness in paying people back in their own coin, even though they were the State—it would inflict a grievous loss upon those who had made contracts with their tenants.
§ THE EARL OF CREWEThis is one of the Amendments which point out the advantage your Lordships enjoy over 755 another place, because I do not think there is any question that this Amendment would have been ruled out of order if anybody had moved it in the House of Commons.
§ VISCOUNT MILNERWhy?
§ THE EARL OF CREWEBecause it would increase the public charge. The fact, of course, is that quit rents and other charges of the kind where they are payable to the Crown are to be liquidated by stock at a discount. Now, my Lords, the noble Earl dwelt upon Section 17 of the Act of 1891, but his proposition goes considerably further than that provision. Under Section 17 of that Act it will be found that only tithe rent charges and perpetuity rents belonging to the Church Fund can be liquidated in this way. Charges payable to lay impropriators, for instance, do not come under that particular section. And, as a matter of fact, when sales took place under that Act and vendors were paid in stock, as they often were paid, in stock at par, stock was sold to redeem all those superior interests with the single exception of these Church rents and tithes mentioned in the section. Now, what the noble Earl proposes by his Amendment is that the Crown—that is to say the Woods and Forests Department, and, for all I know, the Inland Revenue Department—which had to accept this stock, because I do not quite know what is meant by the word "duties" in the Amendment. It might apparently cover the claim of the Inland Revenue for unpaid succession duty. Then, again, the noble Earl apparently intends that all payments due to the Local Loans Fund and under the various Improvement Acts should be paid in the same way. The noble and learned Lord, Lord Atkinson, said that it was reasonable to pay people in their own coin, even although they were a Public Department; but surely there is this important difference. The argument might be a sound one if anybody was obliged to take stock.
§ THE EARL OF CREWEYes, but so far as all binding agreements are concerned at any rate, that argument does not apply.
§ LORD ATKINSONNot legally obliged, of course; but financially obliged, unless he is prepared to wait for twenty years.
§ THE EARL OF CREWEI am not prepared to admit that. The option for cash is open to everybody, and it may suit certain individuals to wait, I do not think as long as twenty years—at least I trust not—but a certain number of years in order to be paid entirely in cash. I will grant this much to the noble Lord, that if there were such a case as that of a man who has to pay a quit rent of 25 per cent., and, in addition, has the remainder heavily mortgaged, he might be in a position where he would have to wait and receive cash; but I think it is also important to remember that so far as quit rents are concerned they are not in the strict sense the property of the landlord at all. Assuming the property bought, what was paid in respect of the purchase was the value less this permanent charge. I think, therefore, it is not reasonable to treat it as though it in any sense formed a part of the landlord's property. These departments who would have to pay are quite irrelevantly introduced into the matter. There is no reason in logic that I can see why they should be mulcted in this manner any more than all other superior interests which, I understand, the noble Earl does not intend to attack. I am afraid that for the reasons I have given we can hold out no hope of being able to accept the Amendment.
§ VISCOUNT MIDLETON confessed that the last speech of the noble Earl had been one of the most depressing he had ever heard, having regard to the prospects of this Bill. This was not a question of relieving landlords, but of making the Bill work in an effective fashion. He knew perfectly well that if the Government insisted upon it this Amendment must be regarded from the point of view of privilege, and must be ruled out, but, still, the Government had at issue their own Bill, and before the Report stage he hoped they would consider these few facts. What was the position? They had stock in such a position at present that anybody hesitated to issue fresh stock. By the provision in the Bill for allowing landlords to take stock they were going to offer the strongest inducement to the Treasury not to face the enormous loss which they must face with further issues under existing conditions. Therefore, they started without any pledge that they would issue cash, while they had always in their hands the power of issuing stock. Who would accept that? Not the 757 poorer landlords and not those whom it was most desirable to relieve, but anybody who could afford to take stock and was anxious to be quit of his property at the earliest possible moment. In the case of every other man who took stock the Government made it absolutely certain that he must throw it upon the market at the earliest possible moment, and every £200,000 of stock which was so thrown upon the market would make a further issue by the Government possible only on ruinous terms. It was, therefore, not in the interests of the landlord, but in the interests of the working of the Bill, which must otherwise come almost to a halt, that he urged the Government to reconsider what seemed to him to be a very unwise proposal from the point of view of the authors of the Bill, and a most inequitable one from the point of view of those who were affected by Government and other charges. It was quite clear to all who knew the circumstances of a large number of these landlords that the Government would have to go a long way before they would urge landlords who could afford to wait to sell at a loss. He knew it was impossible to carry the Amendment unless it came from the Government themselves, and he would therefore urge the noble Earl before the Report stage to consider whether, without any unfair loss to a Public Department, he could not find something which would enable the issue of stock to be made a little more palatable, to grease the wheels of the Bill, and prevent what he feared would cause without doubt practically a stoppage in the operations of the Land Commissioners in a year or two from the present time.
§ THE LORD CHANCELLOR (LORD LOREBURN)I should like to say one word with regard to this, because, although the form of the Amendment is to provide that Government Departments holding superior interests shall be paid in stock, the substance of the Amendment—I am not putting now the point of privilege—is to reduce the figure of 92, at which the stock is to be taken, to a lower figure, thereby to the prejudice of the Treasury. The proposition is that when a landlord agrees to accept part of the purchase money in stock he shall be able to impose without option upon Government Departments the duty of taking stock on the same terms—it may be at a depreciation. It is one thing to say that a man may agree to 758 take stock as part of the purchase money, allowing him the option of refusing, but quite a different thing to say that another person, without being allowed the option, shall be obliged to take the stock. The only effect would be that the Government would be a greater loser than under the scheme of the Bill, because they would be obliged to have all their superior interests redeemed in a depreciated security. The real point of the Amendment before the Committee is that it does seek to vary the terms upon which the Treasury think they can afford to carry out the scheme.
§ *VISCOUNT MILNER ventured to doubt whether the financial effect would be quite what the noble and learned Lord foresaw. The Government had a great interest in maintaining the price of the stock, and one of the main objects of the Amendment was to prevent a great quantity of the stock being thrown on the market. The landlord must put his stock on the market, but the Government could afford to wait. Even if the Government were compelled to take a certain amount of stock against their will rather than that the landlords should be compelled to sell, it might well be to the ultimate advantage of the Government, as tending to prevent the continuous fall of a stock, which the Government were obliged to keep on issuing. Everyone acquainted with the financial side of the matter knew that at that moment even a comparatively small amount of stock being forced on the market would have a very serious effect on the price, and it might be that the Government would be the gainer in the long run if they were obliged to hold a certain amount of the stock.
§ THE LORD CHANCELLORIt may be that it would be to the interest of the Government to accept stock, I do not know. But this Amendment proposes to make them do so.
§ *VISCOUNT ST. ALDWYN confessed to feeling very great difficulty with regard to the Amendment, because he entirely agreed with what had been said by the noble Earl in charge of the Bill and by his noble friend behind him that if it was an Amendment proposed in the House of Commons it could only be proposed by a Minister of the Crown and could only be proposed in Com- 759 mittee of the House. It was not for him to pronounce on their Lordships' powers, but he could not imagine that this Amendment could properly be inserted in a Bill in their Lordships' House. He was much in agreement with the argument addressed to their Lordships by the noble and learned Lord the Lord Chancellor. He did feel that it was one thing for a landlord to accept payment voluntarily in stock but another thing for that form of payment to be forced on the Government or any other person concerned. It might be advisable, for the reasons stated by the noble Viscount on the Cross Benches, that the Government should allow landlords to make those payments in stock instead of cash, but he did not imagine without some legal provision to that effect that it would be possible for them to do so. He would venture to ask whether it might not be possible to insert a provision in the Bill in another place giving power to the Government, if they chose, to accept payment in stock, so as to prevent the difficulty which had been stated to their Lordships by the noble Lord, Lord Atkinson, as affecting the landlords, and also to assist in what, of course, the Government would desire to do—to keep up the price of the stock.
§ THE EARL OF DUNRAVEN pointed out that the Amendment dealt not only with pending agreements but with future agreements, and all the arguments of the noble Earl and of the noble and learned Lord the Lord Chancellor had been directed to the Bill as if it affected pending agreements only. A very obvious difference had been shown between giving the landlord the option of taking the stock and compelling Government Departments to take stock in payment of superior interests. As he had pointed out, the Amendment also dealt with future agreements, and they had not heard a word from the Lord Chancellor as to that part of it.
§ *THE EARL OF DONOUGHMORE said that after what they had heard as to the financial aspect of the case he did not wish to press his Amendment at that stage. But he did strongly associate himself with what the noble Viscount, Lord St. Aldwyn, had said, and he asked His Majesty's Government whether they would not take very seriously into consideration the suggestion he had made. He felt that something must be done in the interests of 760 the smooth working of the Bill. If nothing was done they would be in this position, that the Government were going to offer landlords stock at a price at which they were going to refuse to take it themselves. That being so, could they expect that anybody would take stock?
§ Amendment, by leave, withdrawn.
§
THE EARL OF KENMARE, in moving the insertion of the new clause standing in his name, asked leave to withdraw the first four lines of his Amendment. The first four lines ran—
In any case where an originating application has been lodged it shall be the duty of the Commissioners to declare, within a reasonable tints, whether the estate may be regarded as a separate estate for the purposes of the Act.
§
Amendment moved—
To insert the following new clause:
'In the case of an estate so declared the following provisions shall apply—
§ THE EARL OF CREWEI understand the noble Earl does not press the former part of his Amendment which would have placed compulsion on the Estates Commissioners, or at least possible compulsion on them, to act without having any regard to the amount of cash which maybe placed at their disposal by the Treasury. But the noble Earl proposes, in the case of any estate to which the zone provision applies, that the estate may be divided up into sections, some holdings on which should be dealt with at once while other holdings would stand over, possibly for a considerable time. I speak with deference, and I should like to hear some further opinion on this subject from noble Lords from Ireland, but I should certainly have supposed that the idea of selling some holdings here and some there on a property, leaving the others in their present condition, would, even from the landlord's point of view, have been inconvenient if not in some cases impracticable. But from the point of view of 761 the Estates Commissioners I would say, without hesitation, that the proposal is not a practicable one. The present practice always has been to deal with the estate as a whole and to vest the holdings in the purchasers all at the same time, and the purchase money is then, of course, distributed pro rata. Take, for instance, the further case of the allocation of those charges which we were speaking about in reference to the quit rents. The burden thrown on the Estates Commissioners to allocate in respect of a particular holding in a case of that kind would be an extremely heavy one, and unless some noble Lord is able to combat what I have just said, we must maintain the opinion that the result of accepting this Amendment would throw the proceedings of the Estates Commissioners into such general confusion that we cannot venture to look at it. I think I see what the idea of the noble Earl was in moving it, but as a matter of machinery I think the new clause is an altogether impossible and impracticable one.
§ LORD ATKINSON thought there was a grievance, but he agreed it was not very easy to see a way of remedying it. It might possibly be that there were some tenants on an estate to whom the landlord had agreed to sell for a certain sum and as to whose holdings everything was completed and ready, and there might be other tenants in whose cases, on account of boundary questions and things of that kind, there might be delay, and it did seem unreasonable to hold up the entire thing until the last man had been settled with. They might have a case of 100 holdings on an estate where the landlord and tenants in ninety-nine cases had agreed and nothing remained but to vest the property in the tenants, and it seemed rather hard that the balance of the purchase money should not be paid over to the landlord but should be held up for four or five or six months until some particular holding about which there was some difficulty had been ultimately settled.
§ LORD MAC DONNELL OF SWINFORD was of opinion that the proposal of the noble Earl would restore the state of things which existed before the Act of 1903. The principle of the Act of 1903 was the sale of whole estates, whereas before that Act the practice was the sale of individual holdings. He asked whether it was really proposed to abandon the in globo sales under the Act of 762 1903 and revert to the old and condemned and obsolete custom which prevailed before that Act was introduced.
§ THE EARL OF KENMARE said that was not his intention. In eighty per cent. of the cases the thing went through practically automatically, and he thought it might be possible that the portion of the estate with regard to which there was no difficulty might be dealt with speedily while the remaining portion could wait until everything was cleared up.
§ LORD ATKINSON did not think there was any suggestion in the Amendment to the effect that the old practice should be reverted to. The landlord sold his estate to each individual tenant, and the Estates Commissioners came in and said that the block which he had sold to all those tenants was an estate. That definition was purely for the purpose of paying the bonus. There was no desire to abandon that position. What was desired was that when everything was ready with regard to nineteen-twentieths of the estate the transactions between landlord and tenants should not be hung up until the last tenant had been settled with. It was not a reversion to any previous practice at all, but simply a provision to facilitate and accelerate payment in cases where there was no difficulty.
§ THE MARQUESS OF LANSDOWNEThere is one question that I should like to ask, and I think it is a pertinent one. Is it not the case that the Estates Commissioners already have power to do something of the kind which my noble friend proposes, and that they do do it? As far as I have become aware of the practice of the Commissioners, in a case such as that spoken of by my noble and learned friend where nineteen-twentieths of the tenancies on an estate were all in order and the transaction with regard to those nineteen-twentieths was one which could properly be allowed to go through, I am under the impression that the Commissioners do sanction the advance and treat those nineteen-twentieths as a separate estate, reserving the one-twentieth, where there is a hitch owing to some complication, for future treatment. If that can be done under the present law, and if that continues to be the policy of the Land Commissioners, the necessity for compelling them by Statute to do what my noble friend desires seems to me to be considerably diminished. I should like to be 763 set right if as a matter of fact I am wrong in thinking that what my noble friend desires can already be done.
§ LORD MACDONNELL OF SWINFORD thought there was some misapprehension on the point. There was a provision in the Act of 1903 by which the Estates Commissioners could, in certain circumstances, take the consent of three-fourths of the tenants of an estate as binding the other tenants, but in no case did the Estates Commissioners deal with an individual holding without previously declaring that holding to be an estate. It was necessary, before the money could be advanced, for the holding to be declared an estate and in that way brought within the words of the Act of 1903. That Act provided in the case of a sale of an estate that when application was made for an advance under the Land Purchase Acts of the whole of the purchase money of the holding and the Land Commission were satisfied of certain things they should then sanction the advance, but before doing that it was necessary that they should declare the holding to be an estate. No advances and no payments could be made for individual holdings as holdings, and if each holding was declared an estate it would mean a reversion to the old state of things and a destruction of what was introduced by the Act of 1903.
§ THE LORD CHANCELLORI am not able to say whether or not in the case of nineteen out of twenty tenants agreeing and being ready to complete the Commissioners may dispense with the conformity, so to speak, of the twentieth. Indeed I may say that this particular branch of practice is not within my ken, because the House of Lords is always forbidden from dealing with the Irish land system or the Land Act. But the proviso proposed by the noble Earl is none the less, to my mind, open to the gravest objection whichever view be taken of the existing practice, because here is a requirement that as soon as the provisions have been complied with "the Lands Commissioners shall forthwith sanction the advance and vest the holding in the purchaser,"—that might apply to ten or twenty out of 100 holdings—"and such part of the estate shall for all purposes of the Act be treated as if it had been declared a separate estate." In other words, you split up an estate previously composed of 100 holdings into ten or twenty or thirty separate estates, or, if necessary as many 764 separate estates as there are holdings upon it. That is what the noble Lord, Lord MacDonnell, referred to when he said it would be going back to the old practice. If I may conclude with an illustration, supposing there are 100 tenants and twenty of them have already got through in the month of October you would then have to proceed at once to hand over in respect of those twenty the aliquot portion, that is twenty-hundredths, of the money paid, and next month there might be five or ten more ready. All that would increase the business difficulties; and if it so happened that the estate was mortgaged for half its value, as I suppose estates in Ireland often are, the difficulties would be increased and you would have to pay off the encumbrances by driblets.
§ LORD ATKINSON pointed out that that was provided for at present by the very useful provision that they might pay off the prior encumbrances although they might not have enough money to pay off the subsequent ones.
§ THE LORD CHANCELLORAt any rate considerable difficulties might arise. All the money might be arrested in the first instance for the payment of encumbrances. However, I think that there are practical difficulties, and I have already indicated them to your Lordships.
§ Amendment, by leave, withdrawn.
§ Clause 4 agreed to.
§
Clause 5:
5.—(1) The percentage payable under section forty-eight of the Act of 1903 shall be calculated at the rates specified in the First Schedule to this Act, and for the purposes of that section the percentage at the rates so specified shall be deemed to be the percentage under this section:
Provided that the percentage payable on the purchase money of an estate, which consists of or includes lands in respect of which there are purchase agreements entered into or deemed in pursuance of this section to have been entered into on or before the twenty-fourth day of November nineteen hundred and eight shall (so far as the percentage is payable in respect of the purchase of those lands) be calculated at the rate of twelve per cent. instead of being calculated under this section.
(2) An agreement for the purchase of any estate or land, though not entered into on or before the twenty-fourth day of November nineteen hundred and eight, shall be deemed, for the purposes of this section, to be a purchase agreement entered into on or before that date, where on or before that date—
765
(3) So much of section forty-seven of the Act of 1903 as limits the total of the sums payable to the Land Purchase Aid Fund to twelve million pounds shall cease to have effect.
§ *THE EARL OF MAYO said he did not think Clause 5 should be passed without some remark with regard to the bonus, which was now arranged in quite a different manner from what it was under the Act of 1903. When introducing the Bill in 1908 Mr. Birrell said that the bonus was intended to supply a cash medium to bridge over the possible inability of a landlord to accept the fair value of his estate. That was not quite a fair statement with regard to the description and object of the bonus. In the great majority of cases, when the costs, expenses, and losses incidental to a sale had been provided for, the balance of the purchase money and bonus, when prudently invested, produced very often an income considerably below the net income which the owner had previously derived from his estate. They were often told that with the bonus and the price the tenants gave, the landlord got out with a very great deal more than he was entitled to. He thought he ought to say something with regard to the Parliamentary history of the bonus. In the original Bill as introduced by Mr. Wyndham, it was for the purpose of aiding the sales of estates under the Act and making contributions towards the expenses incidental to the redemption of superior and intervening interests, the investigation of title, the distribution of purchase money, and for other matters. As the Bill was introduced, the bonus was referred to in those terms. Then there was a graduated scale put forward. On 766 that graduated scale being introduced Mr. Redmond commented on the scheme and said the effect of it would be to keep large estates out of the market because in such cases, as far as the bonus was concerned, there would absolutely cease to be any inducement to sell at all, and he went on to say that public opinion in Ireland had taken a very decided course in the matter; and he alluded to the National Convention, the Landlords Convention, and the Land Conference, and urged the desirability of making the bonus fifteen per cent. It was agreed that the bonus should be twelve per cent. That was passed without comment when the Bill of 1903 got to the Report stage. The bonus was now relegated to a sliding scale. Mr. Wyndham having adopted the twelve per cent. bonus, the money was allocated for that purpose and all parties agreed to the twelve per cent. The chief advantages in the bonus were, first, in so far as it was invested in capital it recouped the vendor for the costs and expenses of sale, which usually amounted to one year's purchase of the rental and in smaller properties a larger amount. Secondly, it assisted the vendor to wipe out arrears of rent if any existed. That fact was entirely in favour of the tenant. Thirdly, where the estate was encumbered it enabled him to recoup himself or to borrow money to pay for the loss of income which he must face for several years owing to having to continue to pay the full rate of interest on his encumbrances while receiving a lower income from his tenants. He ought to pay his encumbrances off at four or five per cent., and he was receiving three and a-half per cent. and in very few cases four per cent. from his tenants. The sliding scale had been much debated before. It was held that the bonus of twelve per cent. was improperly paid, so to speak, in the case of the Duke of Leinster's estate. That was a large estate, and it was always held that the Duke of Leinster had received a bonus of £80,000 by selling it. It was not the Duke of Leinster who was selling the estate, it was the trustees. That estate was in his county, and he assured their Lordships that that was not a fair argument at all, although it was always thrown in their teeth, because any noble Lord who was a trustee would naturally deal with the estate in that way. He did not think it was fair that that should be quoted in the way it had been. The sliding scale which had been adopted meant, of course, that the bonus was very 767 much smaller, and he did not think that Clause 5 should be passed without some protest being made from their side with regard to it. He knew perfectly well what it was put in for; it was inserted to save the Treasury. As he had said before, this was a Treasury Bill with compulsion tacked on to it. It was all very well to say that they took the bonus and got large prices. The bonus enabled them to meet the arrears of the tenants and to pay for the expenses incurred. They felt that the sliding scale which had been adopted in the present Bill was not calculated to further the carrying out of land purchase in Ireland.
§ LORD ATKINSON said there was another objection to the sliding scale which was of more importance, and that was that the Act practically gave a large portion of the bonus to the tenant and not to the landlord. That worked out in an extraordinary way. Take, for instance, a tenancy of £100 a year rent; if the landlord sold at twenty-four years purchase the bonus was at four per cent. and he pocketed £2,496. If he sold at twenty-three years purchase he got six per cent. and he pocketed £2,438. The difference between the twenty-three years purchase and the twenty-four years purchase was only £58 to the landlord, but it was £100 to the tenant. The result of that in operation would be that the tenant would say to the landlord, "Take twenty-three years purchase from me; you will only lose £58 by it, whereas I will gain £100." Take another example. If the landlord sold at twenty-one years purchase he got ten per cent., and would pocket, where the rent was £100, £2,310. If he sold at twenty years purchase he got twelve per cent. and pocketed £2,240. He only lost £70 and the tenant gained £100. It was the same through all the scale; so that practically the landlord, owing to the scale of bonus, was put in the position that the tenant would press upon him in every case to take twenty-three years purchase instead of twenty-four, saying, "You will only lose £50 or £60, and I will gain £100." So far from the bonus being an inducement and a help to the landlord to sell, it would have a contrary effect owing to the sliding scale as they had fixed it. The tenant gained more by a lower number of years purchase than the landlord lost, and there would, therefore,, be a direct inducement to him to press the landlord to take a lower number of years purchase.
768§ LORD MONTEAGLE OF BRANDON said it appeared to him there was another objection to the way in which the bonus was to be paid in the Bill. Under the Act of 1903 the bonus went to the tenant for life. There seemed to be a great difference of opinion on that point at the time, and Lord Macnaghten moved an Amendment to bring it into the corpus of the property and to the interest of the reversioner. He got a considerable amount of support, and the argument seemed to be a very strong one in that case in 1903 that the vendor was being bribed to sell the reversion. If that was so under the 1903 Act, it was infinitely more so under this Bill, because under the sliding scale the less the number of years purchase the vendor sold for the greater the bonus he placed into his own pocket. Therefore, it was a direct inducement to him to reduce the amount of purchase money, and to get the larger bonus himself. He called attention to that because it seemed to him that some protest ought to be raised on the matter. He had not ventured to put down any Amendment, but he would like to hear what His Majesty's Government had to say on the point. He thought something should be done upon it when they got to the Report stage.
§ THE EARL OF CREWEYour Lordships, I know, will not expect me to reply at any length. With regard to what the noble and learned Lord, Lord Atkinson, said, it is no doubt the fact that there are disadvantages and anomalies which are incidental to any and every sliding scale, but in our opinion they do not outweigh the advantage which comes from making the bonus higher as the number of years purchase is fewer. I confess I see no reason for doing what the noble Lord suggested as an alternative—making the amount of the bonus depend on the amount of the total sum involved; because it seems to me where a large estate is sold on good and easy terms by the landlord that that landlord should get as large a proportion of bonus as a smaller proprietor who exacts the uttermost farthing he can get. With regard to the point raised by my noble friend on the Cross Benches, the question to which he drew attention is one no doubt of some real substance. There is an objection to doing what he desired to do—namely, that in cases where the number of years purchase is small and the bonus is proportionately large it, or some 769 part of it, should not be at the disposal of the tenant for life but should go into the corpus of the estate. The objection to that proposition I always understood to be that it would discourage tenants for life and so reduce the probability of sales, which we desire to encourage. But I do not deny that there is considerable force in what my noble friend said.
§ Clauses 5 to 10 agreed to.
§ [The sitting was suspended at eight o'clock and resumed at a quarter past nine.]
§
Clause 11:
11.—(1) Where by reason of the death of the purchaser or the transmission of the purchaser's interest in a holding, or in pursuance of a declaration of the Land Commission under section fifteen of the Act of 1903 with respect to a sub-tenancy or a sub-divided holding, a fresh purchase agreement is entered into in substitution for an original purchase agreement previously made, any such fresh agreement shall, for the purposes of this Part of this Act, be deemed to be substituted for the original agreement, and, whenever lodged with the Land Commission, to have been lodged with the Land Commission at the date on which the original agreement was so lodged.
(2) Where a vendor at the request of the Land Commission enters into an agreement with the Land Commission or the Congested Districts Board for the sale to them of an estate consisting of or including lands, which he has proposed to sell to persons other than that Commission or Board and in respect of which purchase agreements have been lodged with the Land Commission on or before the twenty-fourth day of November nineteen hundred and eight, the percentage payable on the purchase money of the estate, or on that portion thereof which represents the purchase money of those lands (in the case of an estate comprising other lands) shall so far as the purchase money or the portion of the purchase money is not in excess of the aggregate of the purchase money fixed by the original agreements be calculated in the like manner and the purchase annuities payable on the re-sale of those lands shall be payable at the like rate as if the agreement for the sale of the estate had been entered into on or before the twenty-fourth day of November nineteen hundred and eight.
§ LORD DUNBOYNE moved to omit from subsection (1) the words "by reason of the death of the purchaser or the transmission of the purchaser's interest in a holding, or in pursuance of a declaration of the Land Commission under Section 15 of the Act of 1903 with respect to a sub-tenancy or a sub-divided holding." He said the clause was no doubt very useful so far as it went, as it allowed a fresh agreement entered into in certain cases to be dealt with by the Land Commissioners in the same way as the original agreement would be. It would, therefore, have the advantages 770 which attached to the original agreement. Three cases were mentioned in the section to which it was applicable—by reason of the death of the purchaser, or the transmission of the purchaser's interest in a holding, or in pursuance of a declaration of the Land Commission under Section 15 of the Act of 1903 with respect to a sub-tenancy or a sub-divided holding. Why should these benefits be limited to these three classes of cases mentioned in the clause? Might there not be other cases where it would be equally applicable? For instance, there might be agreements for the interchange, enlargement, or rearrangement of holdings, or the alteration of purchase price, or where land had been taken compulsorily after the original agreement had been lodged. There might be other cases also which he could not think of for the moment which might be equally entitled to the benefit of this clause. There would also be the danger, if these three classes of cases were to be provided for, that unreasonable pressure might be put upon the vendors by the Commissioners threatening to make new purchase agreements in those cases which were not provided for by the clause, unless the vendors agreed to sell to the Commissioners themselves. They knew that pressure of this kind had been brought to bear upon vendors by the exercise of the Treasury power of stopping sales by refusing to declare the lands in a state in respect of which agreements within the Purchase Acts had been lodged, thus compelling the vendors to sell to the Commissioners instead of direct to the tenants. It was to obviate a hardship of that kind that he desired by his Amendment to make the clause generally applicable to all substituted agreements, and not merely to three classes of agreement to which it was at present restricted.
§
Amendment moved—
In page 6, line 22, to leave out from 'Where' to 'holding,' in line 26."—(Lord Dunboyne.)
§ THE EARL OF CREWEMy Lords, this clause was carefully considered, and His Majesty's Government are not prepared to agree to the extension which the noble Lord proposes. He proposes that in any and every case in which an agreement is substituted without any regard at all to the particular circumstances, the old term should apply. That, of course, must bring in a very large 771 number of cases to which the old bonus rate and the former purchase annuity would apply. I notice that the next Amendment of the noble Lord, which is, of course, an alternative Amendment, is drawn in considerably narrower terms. I do not know whether the noble Lord would desire to say anything on that. We cannot accept his first Amendment, and, as regards his second Amendment, I would say at once that I will consider before the Report stage whether it would be possible to accept that or something like it. But I cannot, as the noble Lord will understand, make any promise on the subject.
§ LORD ASHBOURNE said that the noble Earl's promise that he would consider the matter and weigh the arguments addressed to him was quite reasonable and fair. The point made by his noble friend Lord Dunboyne was that it looked as if they were excluding some classes which were just as much entitled to attention as those in the clause. The noble Earl had not given the least indication of the kind of cases that would be open to objection. If there were a bona fide substituted agreement, why in the name of commonsense limit the clause to three cases? Why drag in three things, and say if the change was made in one of them it was to be regarded as correct and proper? Of what was the noble Earl afraid? He (Lord Ashbourne) was all against fraud and impropriety, but supposing the agreement were perfectly bona fide, open, and frank, published under the village cross and all the neighbours talking about it, which they would in any event, he could not see the objection of the Government on this point. The noble Earl said he would consider it. Well, there was a great deal to consider. He did not think there was any defence for keeping the drafting of the clause on the present narrow basis, but possibly his noble friend would be satisfied with the statement that the noble Earl would consider the point before Report.
§ THE LORD CHANCELLORI would point out that under the Amendment you would substitute a new agreement on more onerous terms—a longer number of years purchase, and then insist on the old terms provided in the former Act.
§ LORD DUNBOYNE said he rather thought no fresh agreement could be substituted for an original one without the 772 sanction of the Land Commissioners, and that would safeguard any case such as that suggested by the Lord Chancellor. He had been rather puzzling his brains about what class of cases could be in the mind of the noble Earl the Leader of the House or of the noble and learned Lord, the Lord Chancellor, which they thought he was apparently dealing with. He had only mentioned a few cases that occurred to him. Other cases might arise, and it was a pity to restrict them, because they would be safeguarded to a very great extent by the fact, as he believed it to be, that all substituted agreements would have to be lodged with the consent of the Commissioners. He would like to get his original Amendment if the noble Earl would consider it.
§ THE EARL OF CREWEI must point out that a further objection to the original Amendment—it might apply to some extent to the second, but it certainly applies to the first—is that it would definitely increase the charge.
§ LORD MACDONNELL OF SWINFORD suggested that the difficulty would be overcome after the word "Where" in the Amendment the words "with the approval or sanction of the Estates Commissioners" were inserted.
§ LORD DUNBOYNE said he would withdraw his Amendment at present.
§ Amendment, by leave, withdrawn.
§ LORD DUNBOYNE said that his second Amendment was to insert, after the word "holding," the words "or in consequence of any direction of the Land Commissioners or of the Estates Commissioners." He understood the noble Earl would consider this Amendment as well, and he would, therefore, not move it.
§ Clauses 11, 12 and 13 agreed to.
§
Clause 14:
14.—(1) Where after the passing of this Act application is made under subsection (1) of section one of the Act of 1903 for an advance of the whole purchase money of any holding, if the Land Commission are satisfied that circumstances exist which, in their opinion, necessitate inquiry as to the security for the advance or the equity of the price, they may by order declare that the provisions of the said subsection shall not apply, and may deal with the application accordingly in like manner as if those provisions had not been complied with.
773
(2) The Judicial Commissioner and the Estates Commissioners may make rules under section twenty-three of the Act of 1903 providing for the furnishing of such particulars with respect to rent and arrears and of such information with regard to the estate as may appear necessary for the purposes of this section and for the verification of the particulars and information in such manner as they think fit.
§ LORD ATKINSON moved an Amendment to subsection (1) to leave out all the words after "satisfied" and to insert "that a sum exceeding one year's rent of the holding has been added to the purchase money thereof, in respect of rent due thereout, may refuse to sanction the advance, unless the parties to the agreement of purchase and sale consent that the purchase money shall be reduced by the amount of such excess over one year's rent. On such consent being given the said agreement shall be varied accordingly, and the application dealt with under the aforesaid subsection in its proper order as if the reduced sum had been the whole of the purchase money, and the application had been originally made in respect of that sum. The refusal to make the advance on the ground aforesaid must be concurred in by the Judicial Commissioner."
§ He moved the Amendment with two objects. The first was to protect the zone system from the insidious and destructive attacks which had been made upon it by the provisions of this Bill. The second object was to provide a means of curing or removing the only blot which had been discovered in the operations of the zone system. He was afraid that his noble and learned friend the Lord Chancellor and he would astonish each other, because his noble and learned friend had said he would be astonished if anybody contended that this Bill abolished the zones. That was exactly what he was going to contend, and he was astonished that any one should think it did not abolish the zones. However, as he knew the Lord Chancellor always maintained an open mind he did not despair even of convincing him that it did destroy the most valuable and distinctive features of the zone system. He (Lord Atkinson) ought to know something about the zones. He superintended the drafting of the clause which created them, and explained and defended them in the House of Commons. As the zones were, he thought, to many persons almost as unknown land as the Arctic Circle, where apparently two 774 travellers might arrive at the same destination without ever meeting, he thought it would be better that he should explain the zones from the beginning, their object, their operation, and their effect. In every sale under the Land Purchase Acts there were necessarily three parties interested. There was the vendor who sold, the purchaser who bought, and the State that lent the money. The great advantage of the zone system was that it established an automatic machinery which gave adequate security to the State and protection for the parties in remainder.
§ He thought the case was best illustrated by figures. He would take the case of a tenant who held in the year 1880 at £100 a year. On the first revision his rent was reduced to £80 or less. On the second revision it was reduced to £64. Under the zone system in the case of such a rent—second term rent as it was called, that was, one which had been revised twice—the reduction was not to be less than ten per cent. and must not be more than thirty per cent. In point of fact the average reduction of rent upon those sales was 27.9, as was found in the last Report of the Commissioners, and the average number of years purchase 29.5. For illustration he would take the sale at a price which was the mean between the two extremes. It represented twenty per cent. reduction— that was, instead of the rent being £64 a year, henceforth the purchasing annuity was to be £51 10s. That was what the tenant had to pay for having acquired the interest of the landlord. As the interest of the tenant in many parts of Ireland was as great as the interest of the landlord, and as the interest of both was pledged to the State, it was perhaps preposterous to say that in such a case the State was not secured by a payment of £51 10s. The reduction of twenty per cent. meant almost twenty four and a-half years purchase of the land. That was a fair price, and therefore the remainder was secured.
§ That was the position in figures, and he would now take the position in law. The State in law had an additional protection—namely, that the tenant must be a real tenant and the transaction must be a real and honest bargain. If the tenant were merely created for the purpose of a purchase, that was outside the whole business. If the transaction were not a genuine transaction there was no need to carry it through. So much for the State. What was the legal 775 protection to the tenant? It was that by the tenth section of the Act of 1885 the jurisdiction of the Court of Chancery was vested in the Estates Commissioners. It was a roundabout business, but the net result, coupled with the provision of the Act of 1887, was that if the tenant had been defrauded or coerced or the landlord had been defrauded or coerced into a bargain which he desired to escape from, he had only to ask relief—and he laid stress upon the word "ask" having regard to this provision—in order to get the same relief that would be administered in the Court of Chancery. The agreement which he had been induced to enter into by fraud or coercion could be rescinded and set aside. There were many unfounded statements, but there could be none more unfounded than that either the State was betrayed into financing an unreal transaction or that the tenant was coerced into entering into a bargain which he did not wish to make. From first to last—from 1869 until the present hour—the landlord and tenant were always treated as persons who were capable of entering into bargains and protecting their own interests, neither party being treated as idiots, lunatics, or infants. The distinction of having treated them as idiots, lunatics, and infants entirely belonged to the present Government, because, according to this provision, though the tenant might desire that the contract should be carried out, though he had not asked to be relieved, though the State was amply secured, the omniscient Commissioners might step in and declare that the purchase price was too high, this intervention being disguised under the term "approval of the equity of the price"—an expression, by the way, which had a peculiar history.
§ As far as the phrase was concerned, it introduced a new element which had never been a test before in these transactions. He should have thought that any person who had any knowledge of Irish agrarian legislation would have hesitated before tearing up contracts. He was one of those —he was afraid he did not share the opinions of some of his noble friends on that side of the House—who approved of the objects of the Act of 1881 so far as preventing the increase of rent for improvements, and so far as it prevented arbitrary eviction; but he said, with a knowledge of thousands of cases, that the worst machinery that ever was invented 776 by mortal man for these worthy objects was the machinery of the Act of 1881, because in the place of doing what was done in every other case and saying that an unjust contract should not be carried out and putting a penalty on a man who made an unjust contract, it endeavoured to tear up all contracts and allow a herd of sub-commissioners to treat the relations of landlord and tenant without principle, without guide, without consistency, knowledge, or training, arriving at most preposterous results. If he wanted a witness to that he should refer to the evidence of Mr. Commissioner Bailey, who, at page 106 of Vol. V. of the Evidence before the Estates Commissioners gave a description as to how these men acted by rule of thumb; and wound up with the aphorism, "Where men are not sure of themselves they are, always moderate." That was an axiom to guide judicial investigation. He had never heard it before but once, and that was in the case of an action with respect to a promissory note for£100. The offence was forgery. Some of the jury were inclined to think, but were not sure, that the document was forged. Others thought the document was genuine, but were not sure, so, adopting Mr. Commissioner Bailey's principle, not being sure of themselves, they were moderate and brought in a verdict for £50. He should have thought that before the Government enabled anybody to tear up contracts made with men who were prima facie capable of making them, they should, at all events; remember that the destruction of contracts between landlord and tenant had in Ireland brought about such an intolerable position that the State was asked to spend £180,000,000 to drag the parties out of it Therefore, he said that this power which was given to the Estates Commissioners of saying that a price which landlord and tenant agreed to was not to be carried out, though the State must be secured, was an absolute destruction of the main feature of the zone system. That feature was that so long as the State was secured and the persons in remainder protected an advance must be made.
§ The provision in this Bill was not that if they discovered the price was unfair or if they discovered the price was inequitable they might prevent the zones operating—not at all. If they thought there were circumstances which they ought to inquire into they could dispense with the zones 777 irrespective altogether of the result of the inquiry. It was a jump in legislation, So that on April 1 they could order an inquiry, and by April 30 it could be discovered that the thing was all straight and the State secured, and yet the zones had gone a month before. This provision altogether destroyed the zones, because the two main features of the zone system were that it automatically secured the interests of the State and the interests of the remainder men, and then made it obligatory upon the Commissioners to make an advance. That had gone. He thought it was a lamentable thing. No human being was more anxious than he was that the great social and agrarian revolution which was taking place in Ireland should be conducted to its legitimate fulfilment upon wise and honest lines, and the measure of his anxiety was the measure of his detestation and disgust that some of the provisions of this Bill had been introduced to thwart, to oppose, and to blast the hopes that had been raised for the termination of this miserable and desolating strife. Nothing in the Act of 1903 so conducted to the success of sale as the provision that once the parties came within the terms of the zones their contract must go through. All that they had to do was to contract on such terms that their contract came within the zones. This provision, however, left all to uncertainty.
§
He did not think any person who had the slightest practical acquaintance with the conduct of the conversion of peasant tenants into proprietors—the handing over, as Lord Dunraven said, of the whole real property of the country from one class to another—could contest for an instant that one of the main helps to that result was the zone system, Now it was assailed on four grounds. He would like to deal with them seriatim. Two of them were frivolous. One of them was most serious, and his noble and learned friend would not misunderstand him when he said that his speech was more likely than anything he had ever heard to shake the confidence in the relations of landlord and tenant in Ireland. He would tell his noble and learned friend why. They did not hear much of erosion. That was the Chief Secretary's discovery. That anybody could stand up in his (the Chief Secretary's) important position and say that holdings bought under these Acts were rendered less valuable and of less security to the
778
State by the progress of erosion was trifling with a serious subject. If it were a joke it was a poor joke. If it were meant to be a serious assertion, there was no foundation for it. He challenged the noble Earl to point to a single instance where a case came up on second revision where there was ever a penny abatement asked for on the ground that the holding had been diminished by erosion. Another cause of deterioration was said to be a land-slip. He did not know whether the noble Earl would confine himself to a land-slip or take refuge in a bog-slide. A bog-slide was really a work of imagination. They knew that the noble Earl at one part of his life was a poet, and, in the words of Shakespeare—
As imagination bodies forth
The forms of things unknown, the poet's pen
Turns them to shapes and gives to airy nothing
A local habitation and a name.
A bog-slide was an effort of poetic genius. Although prima facie it was not a thing to excite poetic fancy, yet it threw a glow about the meanest object. But there was no such thing. It had never occurred. He challenged the noble Earl to produce out of the 230,000 cases—it was nearly 300,000 he believed—in which rents had been fixed in Ireland, one single case where a reduction of rent was asked for on account of either a bog-slide, and, still more absurdly, a land-slip.
§ What was the next ground? It was that some rents were fixed not by the decision of the Court but by agreement between the parties. Well, that was the strangest objection of all. He thought Lord Ashbourne would bear him out in saying that if there was one thing more than another on which Mr. Gladstone insisted in the Act of 1881 it was that there would be no litigation at all. It was as correct as most of his prophecies about Ireland. There would be no litigation at all, it was said, the moment the h adlines were set by the cases that were brought into Court; there would be universal agreement. Mr. Gladstone encouraged it and belauded it, and pointed it out as the real and wise course to follow. And now twenty-five years afterwards the men who took the advice were told that the rents which they agreed to had not that sacredness which belonged to the rents fixed by the Estates Commissioners. That shook the foundation of every rent fixed by 779 agreement in Ireland, and a most lamentable and unfortunate objection it was. But what was still stranger was the Dunraven conference. At that conference were Mr. Redmond, Mr. Wm. O'Brien, Mr. Haddington, and that friend of consistency, Mr. T. W. Russell. The basis of that national treaty was that second-term rents were to be the basis on which landlords were to be bought out. He spoke in the recollection of the noble Earl. Why was not a distinction made then between rents fixed by agreement and rents fixed by decision of the court? If there were any real distinctions hitherto these Nationalist members whom he gave credit for having keenly at heart the interests of the tenancy of Ireland were false to their trust, because they made no distinction between rents that were fixed by agreement and rents fixed by judicial instrument. Why did they not? Because there was no real and solid distinction. If there had been they would have been the very first to have insisted that a difference should be made. They knew there was no difference and they were right.
§ What were the figures? On first-term rents there were fixed by litigation 202,411 cases and the average reduction was 20.3 per cent., while 140,846 cases were settled by agreement, and the reduction was 17.6 per cent. That was, a tenant whose rent was £100 a year got £3 14s. less by agreement than he got in Court, but it was a better bargain for him to agree because he lost twice as much in litigation. But the number of cases in Ireland where rents were over £100 a year was comparatively few. In the whole of Ireland there were 490,000 holdings of which only 15,000 had a Poor Law valuation of £100 and only 25,000 a Poor Law valuation of £50. Taking the Poor Law valuation as two-thirds of the rent it would give about 34,000 tenants whose farms were over £50. That was, it would make a difference to them of £1 17s. The agreements which put £1 17s. more rent upon them were to be considered so iniquitous and unjust that they were not to be a basis on which the zones should operate. A more preposterous or unfortunate contention could not be urged. Therefore, he said that the case against the zones on account of the rent having been fixed by agreement was as flimsy as the erosion.
§ What was the last ground? He was 780 anxious by his Amendment to preserve the zones, and he had framed the Amendment so as to remove the only blot which had been discovered in the zone system. He was anxious to preserve the Act of 1903 because, as he had said, the more it was preserved the more certain would be the steady and wise progress to the legitimate fulfilment of that social revolution of which it had laid down the lines. He was anxious that any semblance of a blot which had been pointed out in the operation of the zones should be removed, and he had, therefore, put down the second part of his Amendment. He had observed in reading the discussion in another place that whenever the Chief Secretary for Ireland alluded to Weir's case —the fraud of Weir's case, the iniquity of Weir's case—the right hon. gentleman nearly wept. To think that any human being should be guilty of the depravity that had been revealed in Weir's case appeared to the right hon. gentleman to be something humiliating.
§ What was Weir's case? It was this. A man whose tenants were in arrear for ten or eleven years made an arrangement with them that they should pay half a year's rent, that half a year's rent should be forgiven, and that two or three years rent should be added to the purchase money. Under the 35th section of the Act of 1896, in order that the tenant might start fair, it was provided that all arrears should be abolished and the tenant was to be able to enter into his new freehold free from all encumbrances. It was very difficult in the case of a tenant in arrear to prevent the landlord to whom the arrears were due saying: "If you will give me twenty-three years purchase I will forgive all arrears." What did the unfortunate Weir do? He said, "I will give you two or three years more purchase." He did not know that other noble Lords would agree with him, but he himself thought that was a mistake. It was quite clear it was intended that one year's arrears should be included in the purchase money, because Section 24 of the Act of 1903 stated that it would be legitimate to pay to the tenant for life one year's arrears out of the purchase money. He concluded that meant that a sum in respect of one year's arrears was in the purchase money, otherwise it would be very unfair to take it out. His Amendment restricting them to one year's arrears did 781 little more, therefore, than provide expressly for what was provided impliedly by Section 24 of the Act of 1903.
§ He was not at all indifferent to the fever that the principle of privilege had recently excited in another place. It appeared that if anything noble Lords did increase in any way the burden of the subject, no matter how indirectly, it was to be construed as a breach of privilege. He quite agreed that if the direct object was to increase the burden it was a breach of privilege, but as matters stood now it seemed to him that everything was looked upon as a breach of privilege that indirectly increased the burden of the subject. If one of their Lordships brought in a Bill and thereby increased the expenditure on printing, or spoke at the length he had done and in that way increased the gas bill, he supposed it might be regarded as adding to the burden of the subject, and therefore a breach of privilege. If it was thought that his Amendment fell under that ban he should be quite willing to withdraw it and bring it up as a new clause and let it take its chance, and to support his noble friend Lord Midleton in the proposal he had put on the Paper to strike out Clause 14.
§ He only wished to say one thing in conclusion. He knew it would be said—This only gives power to the Commissioners to do this thing, and of course the Commissioners in any event would do everything that is right; the Government intends this thing and the Government intends that thing; and the Commissioners wish this thing and the Commissioners wish that thing. It had always struck him, however, that of all the futile operations in which human beings could indulge none was more futile than discussing what the Government intended in a Bill that they brought in, except the object were to persuade or coerce the Government into using language that exactly expressed their intentions and nothing more. Therefore when the Government said they did not intend to give this power to the Commissioners his answer was that their intention did not matter but what mattered was what the Bill did. The Statute gave absolute power to the Commissioners to apply the zones or not whenever they had a suspicion that the security was insufficient, or that the price was too high. 782 The whole value of the system would be defeated if the Amendment were not carried. He ought to have said that in the case of second-term rents, the figures were quite as remarkable. The decisions by agreement were 78,880 and the average reduction 20.4. The second-term rents fixed by agreement were 49,529 and the average reduction about 17.5.
§ He would like to know what any person could say against it if two litigant parties —the landlords on one side and the tenants on the other—instead of going into Court, employing persons to represent them and getting expert witnesses to prove the value of different improvements, should come to an arrangement and say, "Very well, we will agree. We are moderate men. We will divide the difference and select the figure that fixes the rent, instead of running all the risks of litigants." He submitted that he had proved his point that this proposal of the Government did destroy the substantial and beneficial features of the zones. Without doubt it overturned the zone system, and in doing that it caused a grave and serious injury to the progress of the agrarian revolution in Ireland.
§
Amendment moved—
In page 8, line 17, to leave out from the word 'satisfied' to the end of subsection (1), and to insert the words 'that a sum exceeding one year's rent of the holding has been added to the purchase money thereof, in respect of arrears of rent due thereout, may refuse to sanction the advance, unless the parties to the agreement of purchase and sale consent that the purchase money shall be reduced by the amount of such excess over one year's rent. On such consent being given the said agreement shall be varied accordingly, and the application dealt with under the aforesaid subsection in its proper order as if the reduced sum had been the whole of the purchase money, and the application had been originally made in respect of that sum. The refusal to make the advance on the ground aforesaid must be concurred in by the Judicial Commissioner.'"—(Lord Atkinson.)
§ *LORD MAC DONNELL OF SWINFORD said that as his Amendment which came afterwards included as one of its component parts the proposal which the noble and learned Lord made in his Amendment perhaps their Lordships would allow him at that point of time to make the remarks which he should make later on. He did not yield one inch to the noble and learned Lord in his respect for the zones. He knew more about the zones than did the noble and 783 learned Lord. He was present when the idea of the zones was first elaborated and when that idea was reduced into official language, and it was after that was done, and when the idea and conception of the zones had assumed pretty nearly the form they now held, that they were submitted to the noble and learned Lord for his consideration. He agreed with the noble and learned Lord in thinking that the zones were the foundation of the Land Act of 1903, and he would be the last person to support any proposal which would attempt in the least degree to interfere with the real meaning of the zones. When the Act of 1903 was brought into operation it came to pass that efforts were made to circumvent the zones. The first occasion on which the Land Commission saw that the zones might be circumvented was in the well-known Kinvara case. The circumstances of that case were these. Under the former Land Acts, before the Act of 1903 was brought into operation, an effort was made to effect a sale of that estate to the tenants. Under the old practice it was essential that that arrangement should be subjected to the consideration and inspection of the Land Commission, and that the terms agreed upon between the parties should be verified by a report of an inspector from the Land Commission. The inspector went down, saw the land, and reported.
§ He did not carry in his mind the exact figures, but the following was a correct representation of the facts. The parties agreed to sell and purchase for, say, £5,000, but the inspector of the Land Commission reported that the estate was security for no more than £4,000, Then the sale proceedings stopped. When the Act of 1903 came into operation the parties agreed to sell and buy within the zones. On the basis of judicial agreements out of court, and relying on the zones as fettering the discretion of the Estates Commissioners, an application was made for an advance of, say, £8,000. Here was a case in which after a legal inspection it was declared that no more than £4,000 could be advanced with security to the State, but taking advantage of the zones an application was made for £8,000. The Estates Commissioners were told, as the noble and learned Lord had told their Lordships that night, that they had no discretion but must under the law advance the money within the zones. The Estates Commissioners in the interests of the public taxpayers endeavoured to see 784 some way out of the difficulty; some way of avoiding such a gross sacrifice of the taxpayers' money. It was then they invented the plan of not declaring the property an estate, of withholding their declaration of the property as an estate until they had made a full investigation. On investigation the transaction appeared in its true light. But now it has been I ruled by the highest Court of Appeal in Ireland that the Estates Commissioners acted illegally, and if the law on the point is not changed such attacks on the Public Treasury will be repeated.
§ The noble and learned Lord said that the zones were the foundation of the Act of 1903, and it was like touching the Ark of the Covenant to lay hands on them. He (Lord MacDonnell) said too that the zones were the foundation of the Act of 1903, but he also said that wherever there was an appearance or a possibility of turning a proper and correct law into a perversion of justice and into a fraud on the public revenue it was the duty of public officers to see that such a thing should not be carried through. Moreover it was the duty of the Legislature to see that the evils brought into notice in that way should be corrected, and that was what was proposed to be done on the present occasion. The noble and learned Lord stated that there were four reasons brought forward for this proposal, and he argued that they were futile and fatuous. One of those reasons was what the noble and learned Lord himself had admitted—namely, that if the price agreed upon included more than one year's rent there was a sufficient and adequate ground for making an inquiry. The second reason was that the holding was a congested holding within the meaning of this Bill. That was nothing more than embodying in this Bill what already existed in a certain form in the Act of 1903. The first section excluded congested estates in certain conditions from the zone system, and the endeavour was now being made to see that in this respect there should be no evasion of the Act in the future.
§ The noble and learned Lord also objected that rent fixed by agreement or consent should not in any case be departed from. He (Lord MacDonnell) had endeavoured to explain the frauds against which precautions should be taken, and the present proposal was an attempt to embody in the 785 law these precautions. The noble and learned Lord made light of deterioration arising in holdings owing to bog-slides and things of that description. There had been instances recently in the West of Ireland of considerable tracts of country being completely destroyed by bog-slides. But bog-slides were not the only physical causes which occasioned deterioration in holdings. Inudation in the centre of Ireland had largely caused injury to holdings, and that was a matter which naturally ought to be taken into consideration before the State advanced considerable sums of money for the purchase of land.
§ LORD ATKINSONSurely all that was considered when the rents were fixed.
§ *LORD MAC DONNELL OF SWINFORD said these points seemed to him to justify the conclusion that on such a revision of the Land Act as was now being made the question whether the conception of the zones should be maintained in the original shape or should be subjected to modification was one for the consideration of their Lordships. When the conception of the zones was first introduced it was a novel conception, and he was willing to confess that any rents agreed to by consent before the Act of 1903 came into operation should be excluded. But since the Act of 1903 came into operation efforts had been made—and having been made in the past would probably be made in the future—to escape the restriction of the zones and to obtain advances upon estates for which the estates themselves were not really security. He thought they were bound in the public interest, in the interest of the general taxpayer, to take such reasonable precautions as they could to see that public money was not advanced on inadequate security. That was entirely in accordance with the conception of the zones, and he thought the precautions now proposed to be taken were within the original idea of the Act of 1903.
§ *THE EARL OF MAYO said the noble Lord opposite, Lord MacDonnell, designated the Kinvara case as a fraud, and also stated that he knew more about the zones than the noble and learned Lord, Lord Atkinson. The Kinvara case was not a fraud, and the parties were acting quite within legal limits. The way in which the judicial rents came about was that the parties had settled 786 out of Court, and that was a system well known in Ireland. The noble Lord opposite not only said that he knew all about the zones, but that practically he had settled them.
§ *THE EARL OF MAYO begged the noble Lord's pardon. At all events, the noble Lord said the Kinvara case was a fraud. How on earth could that case be a fraud when it was within the purview of the Act of 1903, with the framing of which the noble Lord opposite had as much to do as a great many noble Lords. When the noble Lord got up and stated that the case was a fraud, he knew as well as possible that the tenants settled their differences out of Court. That was the very point made by the noble and learned Lord, Lord Atkinson, who said the reason why a great peace had come over Ireland was that the system had led to the settling of differences out of Court. He did not follow the object of the noble Lord, Lord Mac-Donnell, at all. He thought it could only be to throw grit into the mill and to cause dissension in their Lordships' arguments for no reason whatever.
§ THE EARL OF DUNRAVEN did not suppose that anybody was a stronger champion of the zones than himself. He could not imagine that the 1903 Act or any other Act could possibly work with ordinary speed without some kind of zone system within which it must be assumed the bargain was fair and should be carried out. He did not wish particularly to argue that point, because as he endeavoured to explain on the Second Reading he was so firmly convinced that nothing their Lordships' House could do would make this into a workable Bill that he did not take much interest in any Amendments which could be moved. All he had risen to say was that he thought the noble and learned Lord, Lord Atkinson, was quite correct in the allusions he made to the Land Conference, of which he (Lord Dunraven) had the honour to be chairman. The noble and learned Lord had alluded to the four gentlemen who represented the tenants at that conference, but as those gentlemen could not, of course, say anything in their Lordships' House he would like to be very guarded in what he said on the matter. He could not remember the exact words of the recommendation on 787 the Land Conference, but the noble and learned Lord, Lord Atkinson, was quite correct in saying that they took second term rents as being the proper basis of income. He thought the exact words they used were "Second-term rents or their fair equivalent." The noble and learned Lord, Lord Atkinson, had shown that judicial rents fixed by agreement were the fair equivalent of rents fixed in Court, but at the same time he (Lord Dunraven) would not like to let that pass without saying that that was not stated in the Land Conference report. All they said was, "Second-term rents or their fair equivalent," their idea being that a fair equivalent would be first-term rents graded to second term rents—first-term rents fixed after 1896—and non-judicial rents, of course, graded also. Whether rents fixed out of Court were to be considered a fair equivalent was a matter he did not wish to go into. They were not absolutely said to be a fair equivalent by the Land Conference, although probably that was the case.
§ THE EARL OF CREWEI confess I am somewhat surprised at the degree of opposition which this harmless proposal, as it seems to us, embodied in Clause 14 has given rise to. More particularly I am surprised at the speech of the noble and learned Lord, who I think has left the House, exhausted by the effort of a lifet me. My surprise is due to the line which the noble and learned Lord took in treating this as a matter of the very first importance. The noble and learned Lord, as we know, can make a most able speech on any subject, but I confess that this very simple and prosaic clause hardly seemed to me to demand the treatment which it has received from him in an oration at any rate adequate in length and delivered almost in the manner of Shiel or Grattan. I ascribe the fire which the noble and learned Lord introduced into his speech to two reasons. In the first place, he is convinced, I think, that we have some deadly design against the zones as an institution. He founds that, I suppose, on the fact that some Parliamentary representatives in Ireland are well known to dislike the zone system. Why he should assume that we who have continually stated the contrary, and have shown by the manner in which this clause is framed that we do not intend to depart from the zone system, share that extreme view I confess I am altogether at a loss to understand. The second reason is the profound, and, as I think, most unrea- 788 sonable mistrust which the noble and learned Lord has shown, not only in this debate, but in many previous debates, of the Estates Commissioners.
The noble and learned Lord accuses us of leaving a discretion to the Estates Commissioners. We are charged with believing that the Estates Commissioners will act like reasonable and sensible men. The noble and learned Lord desires to see the Estates Commissioners fettered and handcuffed by every conceivable restriction which can be placed in an Act of Parliament because of that mistrust which has become an absolute obsession with him, and which I am certain it is hopeless to attempt to remove by argument. The noble and learned Lord dwelt at some length on the fact that the interest of the State was in all cases secured under the zones and I suppose he would say in almost any agreement, by the fact that the subject that is parted with by the sale is only the landlord's interest and that the tenants' interest always remains available in the background. I do not think that is an argument which can be generally used. In relation to a single case you may use that argument, but you cannot venture to use it as regards a class of cases simply because the State cannot in practice sell up any number of tenants, and if the cases became frequent where the security provided by the landlord's interest as represented by the purchase annuity became inadequate the State could not as a matter of practice really recoup itself by putting the tenant's interest into the market. The noble and learned Lord, with a purpose which I could not entirely follow, devoted no small part of his speech to a criticism of the operations of the Land Act of 1881. He spoke of the preposterous results arrived at by the judicial fixing of the rents. Yet those preposterous results, if you please, are the precise basis on which the zone system is founded. The zone system, to which noble Lords attach, and I think rightly attach, great importance, is founded on the fact that judicial rents were fixed. I may remind noble Lords opposite that when there is a talk about the monstrosity of the system of dual ownership and the fixing of rents they should remember that without that system of the fixing of rents no conceivable zone system of land purchase could have been introduced in Ireland.
§ THE EARL OF CREWEI think the noble Earl's recollection does not go back to the bad times in Ireland, and that he is fortunate enough not to remember them. The noble Earl would be quite content if no legislation had taken place at all in 1881, and if the then land system in Ireland had been carried on in all its glory. In that he differs from the noble and learned Lord who, though he dislikes the operation of the Act of 1881, yet admits that some such measure was necessary.
THE EARL OF DONOUGHMOREThe noble Earl the Leader of the House is attributing a certain opinion to me which I do not hold. I entirely agree with the noble and learned Lord, Lord Atkinson, that legislation was necessary in 1881, but that the legislation which was passed was extremely bad.
§ THE EARL OF CREWEThe noble Earl can develop that argument at any length he pleases on a future occasion. My noble friend behind me has relieved me from a considerable part of my task, because he stated very clearly and fully what are the reasons which made him think there were other cases besides the cases of one year's arrears which ought to be considered by the Estates Commissioners. What has happened under the zone system? The zone system is, as all will agree, of the greatest value, and I am prepared to go so far as to say that by its ease and labour-saving qualities it may be regarded as the basis, the groundwork, of the operations of the Act of 1903. But as always happens in such cases people look out for loopholes, and try to evade. It is precisely the same kind of thing as occurs when it is a question of charging a duty, whether it be a death duty or a duty on some commodity. People look round to see if they can avoid it. There have been some cases quite open and above board to which I do not desire to attach harsh terms, because they have been carried out within the law of the land. But they have constituted evasions of that law, and as such in our opinion ought to be prevented. It is believed by those who ought to know that those cases are considerably more frequent than any published results enable us to say. I think it stands to reason it must be so, because when it is found out that, for instance, by going through the simple process of handing over a sum of money to the tenants you can increase the sum you receive in the way of 790 bonus and it occurs to somebody to do that it is likely subsequently to occur to a great many other people to follow that example.
§ THE MARQUESS OF LONDONDERRY said that stress was laid on that point in a previous debate, and he then asked if they could be given some specific cases. Perhaps the noble Earl could give them some instances now.
§ THE EARL OF CREWEThere is the case of Crosbie's estate. In that case the owner agreed to sell to the tenants for a certain price. This was an open and above-board transaction, because the owner himself said he had done it. It was arranged between him and his tenants that some further sums should be added to the aggregate price, still remaining, of course, within the zone limits. The total was then treated as the purchase money. As soon as the sale was completed the owner was to pay to the tenant the additional sums. Those sums certainly did not form part of the real purchase money in the strict sense, but the owner got his twelve per cent. bonus on those additional sums and the tenants received in addition to an advance of the actual purchase money a sum in cash. There was no concealment about the case. It was a perfectly legal transaction, and may have been carried out in a great number of other cases. But I think all your Lordships will agree that it is a case which somehow or other ought to be stopped, because an advance of public money ought not to be made on those terms and in that manner. I repeat once more that the sole object of this provision as it stands in the Bill is to close these loopholes. Certainly the Estates Commissioners have no desire, although the: noble and learned Lord will not believe it, to stop the working of the zone system. We thought it safe and reasonable to leave a discretion to the Estates Commissioners, on that subject. My noble friend behind me has adopted a different course, and attempts in his Amendment, to which, perhaps by leave of the Committee, I may allude, to deal with the matter on other lines. He has mentioned various cases in which inquiry is necessary. I am not sure he covers the whole ground, because I fancy there might be cases in which there were considerable arrears which would demand investigation by the Estates Commissioners, but yet would not fall within my noble friend's list. There might be 791 cases where the arrears were so large that even though they did not enter into the actual purchase scheme, they might show that the tenant was not the kind of person to whom an advance of public money ought to be made. That is a case which hardly seems to me to be covered by my noble friend's Amendment. Then there is the further point which was alluded to after most of your Lordships had left the House before we adjourned. I refer to the case in which under the sliding scale for the provision of the bonus a tenant for life would accept a too low number of years purchase in order to pocket the bonus on the larger scale. That is just the case where—supposing it to be impossible or undesirable to prevent that by saying that the bonus on the low scale ought to be added to the corpus of the estate and invested for the benefit of the remainder man—the Estates Commissioners might interfere with advantage. I think I need not dwell any longer on this clause. I notice that the noble Marquess, Lord Londonderry, has put down a somewhat different Amendment from that proposed by the noble and learned Lord opposite. I do not know whether the noble Marquess proposes to move it or not, but in any event perhaps I had better defer any further observation until I see what course he takes.
§ VISCOUNT MIDLETON did not know that the speech which the Leader of the House had just addressed to their Lordships had entirely emancipated them from the difficulties in which they stood. They had heard a most able and convincing speech from the noble and learned Lord, Lord Atkinson, which had made it perfectly clear that he for one conceived that the whole benefit of the Act of 1903 would be lost if the zone system were to be done away with. The noble and learned Lord gave them admirable reasons why, in the majority of instances, the cases which might be admitted under the clause as the Government had presented it should certainly not be admitted. In the closing part of his speech the noble and learned Lord made the suggestion which was embodied in the Amendment he had laid before the House, that they might, by limiting the matter to one year's arrears, stop one of the objections which had been raised to the zone system. There, again, they were, faced, as they had been faced ever since they began discussing this Bill, 792 with the possibility that an Amendment which was perfectly legitimate and bona fide would be ruled out in the other House on the ground of privilege. Their Lordships would realise that to say the price should include one year's arrears might be held in the other House of Parliament to be an appropriation of funds to a purpose not contemplated in the Bill as it came before their Lordships. That was a very serious matter. To put it perfectly plainly, if they should embody the Amendment of his noble and learned friend in the Bill and that view should be taken, the Bill would be returned to their Lordships' House as it stood and their Lordships, so far as he knew, would have no further power of considering and altering the clause. He thought it would be not merely a great blemish in the present Bill, but would be practically abrogating one of the two main principles on which the Act of 1903 was based, and on which it had achieved the phenomenal success which they were discussing that night. They were faced on the other hand with the counsels of those who assured them they were in favour of the zone system. Perhaps he might be allowed first of all to allude to the speech, and the Amendment which had been put on the Paper, by the noble Lord opposite, Lord MacDonnell. He would wish to say on behalf of those Irish landlords and others who were in favour of the Act of 1903 that he thought they owed a deep debt of gratitude to Lord MacDonnell who, he believed, was in theory in favour of the principle of zones, for having put his views and the method by which he made good that theory on the Paper of their Lordships' House.
§ What was the principle of zones? It was, as the noble and learned Lord had explained, the withdrawal from the purview of the Commissioners of the main agreements between landlord and tenant based on decisions of Land Courts, which were held binding upon the landlord so long as it was a question of rent, but which some people did not wish to hold binding upon him when it was a question of purchase. It was also protective of those voluntary agreements between landlord and tenant which were the main object of the promoters of the Act of 1881, and of no one more so than Mr. Gladstone himself. After hearing him cheer the sentiments of Mr. Gladstone to the echo time after time, he regretted to hear the Lord Chancellor 793 deliver himself a few nights ago in direct opposition to the views of his former leader. He said that in no spirit of disrespect, but merely to show what effect the passing of time had upon the minds of men. These transactions were withdrawn from the Courts not from any desire to benefit one party or the other, but simply to avoid litigation and that ill-feeling which had characterised so many of their dealings in land in Ireland. How did the noble Lord the late Under-Secretary propose to deal with these matters? First of all, he proposed that they were to be within the purview of the Court again for fresh settlement. He proposed that when application was made for an advance of the whole purchase money of any holding the Land Commission might make inquiry if they were satisfied that the judicial rent was fixed by agreement or consent and not after judicial inquiry in Court. The Chief Secretary to the Lord Lieutenant told the House of Commons a few weeks ago that the number of judicial rents fixed by agreement and without inquiry by the Court amounted to one-third of the whole rents of Ireland. Therefore at one fell swoop the noble Lord proposed to bring within the purview of the Court again one-third of the whole rents in value which were left to be settled in Ireland.
§ LORD MAC DONNELL OF SWINFORD said he should like to add, after the word "consent" in his Amendment, the words "after the passing of the Act of 1903."
§ VISCOUNT MIDLETON pointed out that the Act of 1903 did not appear in the noble Lord's Amendment.
§ LORD MAC DONNELL OF SWINFORD said he would like to add it.
§ VISCOUNT MIDLETON was very glad to hear the noble Lord say that. As the Amendment stood, however, one-third of the whole rents in Ireland fixed by agreement and consent were to be brought within the purview of the Estates Commissioners, who were especially, under the Act of 1903 and the zone system, not to have regard to those agreements and consents. If they looked at subsection (c) in the noble Lord's Amendment their Lordships would see that the Land Commission might make inquiry if the holding was a congested holding "within the 794 meaning of this Act." Under the Bill nearly one-third of the whole land of Ireland was to be added to the congested districts. Therefore, as regarded one-third of the whole area of Ireland the-land was to be taken away from the zone system and was to be added to the system which was to come under the purview of the Estates Commissioners. Under subsection (b) of Lord MacDonnell's Amendment on the Paper it was laid down that the Land Commission should come in if the price agreed upon included more than one year's arrears of rent. He distrusted altogether these reservations made as regarded one year's arrears of rent. How were they going to tell what was rent and what was arrears? Everybody who had had to deal with Irish tenants knew there were many cases where the tenant would gladly give additional years' purchase if told that it was to wipe off his arrears. He did not know how it would be possible for a judicial body to decide whether a sum of years' purchase which came within that zone which was regarded as exempted from criticism by the Act of 1903 was made up of years' purchase, or of arrears added to a minimum number of years' purchase together making up a sum which left the tenant with something like twenty-five per cent, less to pay than he had to pay before.
§ Then in Lord MacDonnell's Amendment there was subsection (d) which empowered the Land Commission to interfere if since the judicial rent was fixed the holding had permanently deteriorated owing to physical causes beyond the control of the tenant. He believed there had been certain cases of land slides, but the objection he had to the words was that they might force the Estates Commissioners to consider themselves bound to make a complete inspection of each holding to see whether such physical deterioration had taken place. The noble Lord might be one of the advocates of the zone system, but he had certainly in the. Amendment he had put before the House dissembled his love for that system to such an extent that his proposals would unquestionably bring within the purview of the Commissioners half or three-quarters of all the estates which might hereafter be submitted to them.
§ Noble Lords had heard arguments in the other House as to the effect of the zone system on the tenants, but he did not 795 think they need trouble themselves very much about them. Mr. Dillon had told them that most of the rents had been 40 per cent. higher than they ought to have been for purposes of purchase. He spoke with all respect of the opinions of those who guided the counsels of the national directory, but he could not help remembering that the national directory on September 1, 1908, by a unanimous vote denounced the zone system as fatal to the interests of the tenant. That was at a meeting in Dublin, and it was published before all their eyes as showing the necessity for a complete change, in the new Bill, from the Act of 1903. During the months of September and October, 1908, after that unanimous denunciation by the national directory, 46,500 applications were put in, involving £13,500,000, to buy under the zone system. Those applications amounted in all to nearly two-thirds of the whole applications to purchase made during thirty-eight years under the previous Purchase Acts. That was within two months after the severe pressure of the leaders of the Irish party to try and prove to Parliament that the zone system was a betrayal of the rights of the tenants.
§ From the point of view of the British taxpayer there, again, he could not help feeling that the Lord Chancellor insufficiently voiced the feelings of his colleagues in the persuasive speech he made to their Lordships a few nights ago. He thought the noble and learned Lord went far beyond justice or expediency in the view which he expressed. In alluding to the attitude of the Lord Chancellor and that of his colleagues he was thinking of the days when Mr. Gladstone and the leaders of that Party tied themselves to a proposition that a Land Court in Ireland would lead to the settlement of a number of these cases, and that after that the vast majority of agreements would be made without recourse to a Land Court and by the voluntary system of which the Liberal Party had always been the exponents. But the Lord Chancellor spoke with sorrow of the agreements made by consent, which had not been made the subject of judicial inquiry, and which, he urged on behalf of the taxpayer, should be made the subject of judicial inquiry before they become the subject of purchase.
§ THE LORD CHANCELLOR said he thought the voluntary system was abso- 796 lutely essential to the working of the Act of 1903, and he had never said a word to the contrary. What he said was this, "The zone system is admirable, but if you have rents fixed by agreement which have not been the subject of judicial supervision then it does not necessarily follow that they will give the security which you would have under a zone system if there had been judicial supervision"; and he also said, "In a few cases it may be necessary to re-open the inquiry." That was all he said.
§ VISCOUNT MIDLETON rejoined that in other words what that really meant was, "You can touch the decision of the Land Courts, but you cannot touch the voluntary agreement between landlord and tenant." But that did not represent the view of the Chief Secretary. The view of the right hon. gentleman was that granted they had been to the Court, because they still had an opportunity of going into the Court every fifteen years, they could not be certain they had reached the bedrock at which the nation would be wise to purchase. The Chief Secretary used words which were unfortunate, and for one in his position unwise. The Chief Secretary said that by a scheme in Ireland by which rents were reduced every few years the second-term rents would not be fixed rents. He (Viscount Midleton) objected to the words "were reduced" every few years. They were "revised" every few years. The Chief Secretary had no right to say that the scheme of any Bill in Ireland was to prevent rents being reduced every few years, and that they could not take the present rent as being a fair margin on which to purchase. The right hon. gentleman also said very strongly that one-third of the judicial rents was fixed out of Court by agreement, and he urged that as a reason for the present Bill. What he (Viscount Midleton) would urge upon their Lordships was not to accept the view that everything that was done must necessarily be done under the sanction of a Court or else it could not possibly have proper validity for a permanent settlement. They had had a good many measures lately which proposed to bring all the relations between man and man in this country under the purview of a Government official. The old doctrine of the Liberal Party was that individual freedom and liberty was the maxim on which the Constitution of this country was 797 founded. That was being completely changed. It used to be said of a distinguished President of the Board of Trade who had brought in a great Act of Bankruptcy that his idea was that the greatest happiness that could come to his fellow citizens was to become bankrupt under his Bill. In the same way it seemed to be the view of many heads of Departments in the present Government that the greatest happiness of their fellow citizens was not voluntary agreement between man and man as to property, hours of labour, or the conditions of their service, but official sanction. It would be a bad day for Ireland if they went back on the Act of 1903. He believed this clause would bring them back to the necessity for the interposition of the already overworked Estates Commissioners.
§ Speaking from the point of view of the British taxpayer, he urged on the attention of their Lordships the following facts. The first was that whether there were arrears added to the rent or not, so long as they had the protection of the zones they knew that between twenty to forty per cent. of the rent, the rent already reduced by thirty-five per cent. all over Ireland, would be reduced in the case of the new rents or annuities which went as security to the State. The second point was that they had believed that the immense interest of the tenant, an interest which in the course of the last year, as a number of statistics would show, had been sold in the case of those who had already become purchasers for sums varying from five to thirty years purchase. That was an additional security to the State; and beyond that, again, there was the fact that under the existing rents, reduced as they had been since 1881, the farmers of Ireland had found themselves able to raise their contributions in the Savings Banks by nearly 250 per cent. That at least proved that the existing rents, now to be further reduced on purchase by twenty-five per cent., had not, on the whole, been felt oppressively by the tenantry. If there had been hard cases such as had been alluded to by the noble Lord, Lord MacDonnell, he thought the matter for astonishment was that there had been so few in such a great number of transactions. He did not deny that they might find here and there a case in which the landowner and tenant had together 798 agreed to put aside a certain number of years' purchase of arrears which probably, if they were submitted to that House, would not pass muster. If such extreme cases required to be provided against he did not think members on that side of the House would in any way make difficulties if it were held that the Estates Commissioners should state a case for the Supreme Court where they believed there was fraud or some undue action. Words to that effect would require to be carefully considered, but what he urged upon their Lordships was not to break down the zone system by what seemed to be a very small change but which might result in completely paralysing that which had gone so far to carry through the most difficult negotiations with success and satisfaction to both parties. He did not believe that he was arguing this case on behalf of the landlords. He believed that the zone system had become a sort of bedrock for both parties in Ireland. It had saved delays and expense and also litigation and bad feeling, and if they replaced it by the old system they must also denude the, new system of that which had gone so far to render the Act of 1903 the most successful piece of legislation which they had seen in their time in Ireland.
§ THE LORD CHANCELLOR said it was of the utmost importance in debates, especially in Committee, to appreciate what was the controversy between them. This discussion had ranged over the Act of 1881 and all the old, unhappy controversies that were passed. What they were discussing was an Amendment to a clause relating to the zone system. Why should they multiply controversies, so far, at all events, as intention was concerned? When noble Lords on the Opposition side of the House Said they wished to maintain the zone system, they, on the Government side said, and had always said, that they also wished to maintain the zone system. Noble Lords might say that their words did not provide for that, but let them show that it was so. But what was the use, if he might respectfully say so, of denouncing an opinion which they repudiated and which they had all along said they took no part or lot in? As far as his speech of the other evening was concerned, what he said about the zone system was contained in three minutes of a speech covering the whole ground.
§ What he said was this, that the zone system 799 was a system under which they prevented the necessity for re-opening valuations by accepting as a proper basis for a purchase price the judicial rents that had been fixed, provided the number of years' purchase was within certain limits. He believed that he had accurately represented what the zone system was. He then said that he wished to maintain it, but that when there were cases in which it was necessary to re-open the question they should not be bound by the purchase prices being within the zone, because in the circumstances they were not a fair security for the Government advancing the money. No one wanted to tear up agreements. It was not a question of tearing up agreements. The landlord and the tenant made their agreement and if they liked to carry it out themselves they could do so; but when they came to a third party, the State, and asked to have a certain sum of money advanced, it was reasonable that the State should have an opportunity of saying whether they thought the security was enough. That was the whole proposition. While they were perfectly willing and entirely agreed that within the zones the purchase price agreed by the parties might in the ordinary course in the great multitude of cases, be accepted and acted upon as it had been in the past, experience had shown that there ought to be in some given circumstances an opportunity for the State to investigate whether, in that particular case, the bargain was a sufficient security for the State. That was all they had said; they had said nothing more of any kind. That was not tearing up agreements.
§ The curious thing was that all those who had been most severe in their criticism were themselves in favour of re-opening the zone in some circumstances. The very Amendment they were considering proposed to re-open the zone. His noble and learned friend who initiated the discussion proposed that it should be re-opened if the purchase money included more than a year's arrears. Therefore he did not object to re-opening the zone system in some circumstances. The noble Lord, Viscount Midleton, had said that if there were such things as had been referred to they ought to be included in the case stated for the opinion of the superior Courts. But it was only questions of law that could ever be stated in that way. Questions of fact were never stated for the opinion of a superior Court. The point was that if 800 cases of fraud or of duress, or reasonable suspicions otherwise should come to the knowledge of the Commissioners they should be at liberty to make inquiry into the circumstances which now they could not do, and if they thought the circumstances justified then they might refuse to make the advance in the interests of the State and in the interests of security.
§ He had stated the controversy between them. There was no controversy between them as to maintaining the zone and none upon the point that in some circumstances the zone ought to be re-opened. But there was a difference between them as to the nature of the circumstances under which the zones might be re-opened. The Amendment of the noble and learned Lord proposed that it should be so if the purchase price included more than a year's arrears. They did not think that sufficient. It would not deal with the particular case given by the noble Earl the Leader of the House, a case in which there was an agreement between landlord and tenant for a particular price; they then agreed to add a year or two years purchase, and then, after the money had been advanced, the two years was to be handed over to the tenant and yet the landlord was to keep the twelve per cent. bonus upon that whole sum. Surely every man who wanted fair and honest dealing and proper and reasonable protection for the State would say that that case ought to be open to consideration and inquiry and ought to be checked. But the noble and learned Lord's Amendment would not allow them to go into a case of that kind.
§
It was not the case that his noble friend behind him (Lord MacDonnell) proposed to re-open all rents which had not been the subject of judicial investigation. The noble Viscount was entirely mistaken about that. There was a power to do so if the Commissioners were satisfied that those questions existed. Let them understand the proposition. Was it to be said that these zones were never to be re-opened at all, or would they not be better occupied in inquiring under what circumstances they ought to be re-opened? Their proposal was put in general terms. It left it to the discretion of the Commissioners as, indeed, many things in the Irish Land Act of 1903 were left to the Commissioners—men every one of whom was appointed by the present Government's political opponents, and who,
801
he believed, possessed the confidence of the community. At all events if noble Lords did not like these words let them suggest some better. The words were—
If the Land Commission are satisfied that circumstances exist which, in their opinion, necessitate inquiring as to the security for the advance or the equity of the price.
§ He ventured to think that was a modest proposal on the part of those who had to advance the money. It was a modest proposal that they should be at liberty to inquire in regard to the security for the money they were asked to advance when special circumstances were brought to their attention pointing to the necessity for making an inquiry. He deliberately refrained from expressing any opinion as to the previous Acts or as to the general success of the last Act. He did not grudge any of its authors its success; but he respectfully suggested that they ought, in a businesslike way, to look at what the Amendment meant and what the clause was to which it was an Amendment, instead of placing rather a heavy censure upon the Government for intentions which they really did not harbour and had not the least intention of carrying into effect either by Act of Parliament or otherwise.
§ LORD ATKINSON did not think the Lord Chancellor did justice to the Amendment. So far as he could follow him, he had justified an Amendment enabling the Commissioners to inquire as to the security of the State and had said nothing to justify their inquiring as to the equity of price.
§ THE LORD CHANCELLOR said the criticism was perfectly just. The whole debate had proceeded upon re-opening the zones, and re-opening the zones with a view to security. That must be his excuse. He would say only one word about the other side. This clause contained a proposal authorising the re-opening if the Land Commissioners were satisfied that circumstances existed which, in their opinion, necessitated inquiry as to the security for the advance or the equity of price. He had dealt with the security for the advance. As regarded equity of price, it might apply in two ways. The words were taken from Mr. Wyndham's Act of 1903. It included two things. In the first place under this Bill or any system in which the bonus went to the credit entirely of the tenant for life and 802 did not become part of the purchase money there was a danger that he might sacrifice the ultimate interest, that of the remainder man, to his own interest. If, for example, he were an old man who would not live very long he might be tempted to sell at a price which was unfair to the remainder man because he would get twelve per cent., or whatever the percentage was, into his own pocket upon the purchase price. That was one thing which ought to be the subject of protection. There was another thing—where there was unfairness or duress; for example, unfairness as between the landlord and the tenant. Where there was such unfairness the State ought to say, "We will not sanction a transaction which it based upon oppression of the tenant by the landlord." It was held by the Irish Courts that the language used by Mr. Wyndham's Act about equity of price only related to the first of those kind of things that it did enable the Court to protect the remainder man against the tenant for life but did not entitle the Court to protect the tenant against oppression by the landlord. It was their intention that if there were circumstances showing unfairness, fraud, or duress in either of those relations, in those cases the zone might be re-opened.
§ LORD ATKINSON said he was very glad to have given his noble and learned friend the opportunity of supplementing his argument. The noble and learned Lord now said that they were to inquire into prices because the price might be too small and hit the remainder man. His answer was that that was provided for by the scale of the zones; it could never occur within the zones. The words "equity of price" were not used in the Act of 1903 with regard to any case within the zones at all. The words were properly used in order to protect the interest of the remainder man in cases falling without the zones, and for the obvious reason that the scale in the zones protected the remainder man. The words "equity of price" had never been interpreted to mean that the landlord and tenant might not contract. The tenant was already protected against fraud or duress by Section 10 of the Act of 1903. The difference in that Act was that the tenant himself must complain of the fraud or duress, whilst in this Bill where the tenant made no complaint and was perfectly willing to carry out the agreement the Estates Commissioners were to step in and say, "No, we disapprove of the 803 price." That was illustrated by the very first case in which the Commissioners endeavoured to raise the question of what was the meaning of the words "equity of price"—namely, the King-Harman case which arose under Section 5. The Estates Commissioners sought to extend the words "equity to all parties concerned" to include the fixing of rent, or rather the determination whether the price was adequate. It was decided the words did not mean that, but referred to equity as regarded the remainder man. He said the State had no right, when legislation had left the way open to any tenant who complained of duress or fraud, to step in. The particular case to which he referred was a most remarkable case. The tenant and the landlord came into Court and both asked the Commissioners to validate the agreement. The power the Commissioners claimed was, in defiance of the tenant and the landlord, to say whether or not the price was equitable. That was what he (Lord Atkinson) protested against. He said they had no right, where the landlord and tenant agreed, to come in and stand between them. They might have the right to say the State would not protect them, but they had no right to say that they were lunatics or idiots. As regarded the noble Earl who led the House, he did not expect that the noble Earl would have risen so soon, or he could assure him he would not have denied himself the treat of listening to him.
§ THE EARL OF CREWEI quite understand.
§ LORD ATKINSON said the only thing he would ask of Lord Crewe was an apology to the memory of Shiel and Grattan, to whom he understood the noble Earl had made reference in connection with his (Lord Atkinson's) speech. He accepted with the greatest humility, of course, the censure thus mildly conveyed from such a master as the noble Earl. He understood also that the noble Earl had said he thought he (Lord Atkinson) had exhausted himself in his speech. He could assure Lord Crewe that that was not so, and he would endeavour during the progress of the Committee to prove that it was not so.
§ *THE EARL OF MAYO said that the Crosbie case had been mentioned. He could give the House the history of the 804 Crosbie case. The sum involved was £40, which was included in the purchase money for arrears. That was the custom and was allowed to be included under former Acts. It was a mistake on Mr. Crosbie's part. Mr. Crosbie gained no advantage out of it and got no bonus. He asked their Lordships if that was an instance in which they should be asked to re-open the zones—a wretched little case like that where the landlord made a mistake. Was that fair?
§ THE EARL OF DUNRAVEN said he felt in some difficulty about the clause. There were four Amendments which they were obliged to discuss, more or less, at the same time. The noble and learned Lord had one Amendment, his noble friend Lord Londonderry had another, his noble friend opposite had a third, and his noble friend Lord Midleton wished to leave out the clause altogether. None of these propositions seemed satisfactory. The noble and learned Lord, the Lord Chancellor, had admitted that perhaps the wording of the clause in the Bill might be considered a little too general, and rather pressed noble Lords on the Opposition side of the House to suggest other words. He (Lord Dunraven) suggested that if the Government thought the wording of the clause rather too general, it lay with them to suggest better words. The noble and learned Lord, Lord Atkinson, had told them the tenant was amply protected aleady against intimidation or duress, because it was always open to him to complain. He did not see how, if pressure was put upon the tenant he could, in the circumstances, possibly complain. He did not know whether such a thing had occurred, but it was conceivable that a body of tenants or a tenant head over ears in arrears—perhaps five, six, seven or eight years—might be told that the only escape from that disagreeable situation was to agree to give a larger number of years purchase for the land than they knew the land would be worth. How was it possible for them to complaint? The only result would be that they would be put back into a still worse position, and remain as tenants owing all these arrears. That was the kind of case he imagined the Government wished to guard against. They wished to put words into the Bill that would guard against cases of that kind without leaving everything, as was now done, to the discretion of the Estates Commissioners. If they put in words embodying that, he would support them.
805§ THE MARQUESS OF LANSDOWNEWe on this side of the House are ready to accept, without reservation, the assurances that are offered to us from the Benches opposite that noble Lords on those Benches have no desire to get rid of the zones. But we do submit that the clause, as it now stands, or as it was drawn, virtually deprives us of the protection which the zones now afford. I think there is a rather simple way of testing that proposition. As my noble friend Lord Midleton has told the House, there are people in Ireland who have persistently endeavoured to undermine the zones. They have constantly denounced the zones, they have made it their object to get rid of them altogether, and this clause has been acclaimed by them because it is regarded by them as calculated to effect their purpose. What does the noble and learned Lord say? He has no wish to destroy the zones, but—I forget whether the expression was his or Lord Crewe's—it is said that under the present law there are loopholes through which people can pass who desire to bring about improper transactions. What are these so-called loopholes, these opportunities for evasion? There is the question of arrears. My noble and learned friend Lord Atkinson has put a clause on the Paper dealing with arrears in what I should have thought was a very sufficient manner. But if it is the case that there are other instances of the improper addition of arrears to the purchase money, I, for one, am quite ready to consider words that may be designed to meet these cases. Then there is another category, one to which I attach great importance. The noble and learned Lord referred again to-night to the case of agreements entered into by the parties out of Court. I referred to the actual expression he used the other evening, because there was some doubt as to that. The noble and learned Lord described these agreements as being judicial only in form. I do not think, if I may venture to say so, that that was an entirely appropriate description of those agreements. They are very numerous, and they are agreements entirely creditable to the parties who have entered into them. Many of these parties are weary of litigation. They have watched and they have seen what kind of reductions of rent are insisted upon by the Land Commissioners, and having, as they thought, arrived at the standard prevalent in the particular locality to which they belonged they have said "We will agree without going into Court, and we will fix 806 rents on the level which prevails in the neighbourhood." I think it would be a monstrous thing that parties who have entered into these agreements should be penalised, and, as it were, singled out by this clause for differential treatment as against parties who have gone into Court. If you desire to have a special exception in favour of holdings that have suffered from physical causes such as erosion and land slides, we will welcome an exception of that kind without any controversy. There remains one other category, the category of cases in which there has been fraud, duress, or, I think it was suggested, collusion between the parties. I want to ask whether it is not the case that the Courts have already held that the Commissioners not only have the right, but that it is their duty to inquire into the validity of all contracts of tenancy and of all purchase agreements entered into by the parties, and whether the Courts have not also held that it is the duty of the Commissioners to refuse their sanction where any coercion has been suspected. I believe I can refer your Lordships to passages in the magnum opus of Mr. Cherry, one of the Law Officers of the Crown, in which the propositions I have thus stated are clearly set out. There is, I am told, at this moment a Regulation—I believe it is Regulation No. 143—in which it is laid down by the Commissioners that fair rent agreements may be set aside on the ground of fraud or surprise. That, again, is to be found, upon page 143, of the great work of Mr. Cherry.
§ THE LORD CHANCELLORDoes the noble Marquess mean that either party can have the agreement set aside on the ground of fraud or duress.
§ THE MARQUESS OF LANSDOWNEI do not know whether the parties have to move the Commissioners, but I take it the parties have access to the Commissioners. My point is that all those so-called loopholes are either stopped up, or could easily be stopped up. In order to stop them up it is not necessary to give the vague, wide, undefined powers conferred by this clause as it now stands; and therefore, as an earnest of our desire to begin the process of stopping up loopholes I shall be delighted to vote with my noble and learned friend who moved this Amendment. If noble Lords opposite desire to stop up other loopholes, I, and I am sure a great many noble Lords on this side 807 of the House, will be found ready to support them. But to the clause as it now stands we are bound to offer opposition.
§ On Question, Whether the words pro-
§ Amendment agreed to accordingly.
§ THE CHAIRMAN OF COMMITTEES then called upon Lord MacDonnell, who
808§ posed to be left out stand part of the clause?
§ Their Lordships divided: Contents, 26; Not-contents, 136.
807| CONTENTS. | ||
| Loreburn, L. (L. Chancellor.) | Allendale, L. | Hemphill, L. |
| Crewe, E. (L. Privy Seal.) | Blyth, L. | Lucas, L. |
| Boston, L. | Marchamley, L. | |
| Beauchamp, E. (L. Steward.) | Colebrooke, L. [Teller.] | O'Hagan, L. |
| Carrington, E. | Denman, L. [Teller.] | Pentland, L. |
| Chesterfield, E. | Eversley, L. | Sandhurst, L. |
| Chichester, E. | Glantawe, L. | Saye and Sele, L |
| Liverpool, E. | Granard, L. (E. Granard.) | Weardale, L. |
| Haversham, L. | Welby, L. | |
| Airedale, L. |
| NOT-CONTENTS. | ||
| Devonshire, D. | Waldegrave, E. [Teller.] | Ellenborough, L. |
| Northumberland, D. | Wicklow, E. | Faber, L. |
| Somerset, D. | Fairlie, L. (E. Glasgow.) | |
| Wellington, D. | Churchill, V. [Teller.] | Farnham, L. |
| Colville of Culross, V. | Fermanagh, L. (E. Erne.) | |
| Abercorn, M. (D. Abercorn.) | Cross, V. | Fingall, L. (E. Fingall.) |
| Ailesbury, M. | De Vesci, V. | Forester. L. |
| Bath, M. | Falmouth, V. | Grenfell, L. |
| Camden, M. | Goschen, V. | Hindlip, L. |
| Cholmondeley, M. | Halifax, V. | Hylton, L. |
| Lansdowne, M. | Hill, V. | Inchiquin, L. |
| Zetland, M. | Hutchinson, V. (E. Donoughmore.) | Kenlis, L. (M. Headfort.) |
| Kenmare, L. (E. Kenmare.) | ||
| Abingdon, E. | Iveagh, V. | Kenyon, L. |
| Bandon, E. | Milner, V. | Kintore, L. (E. Kintore.) |
| Cadogan, E. | Langford, L. | |
| Camperdown, E. | Abinger, L. | Lawrence, L. |
| Cawdor, E. | Ampthill, L. | Leconfield, L. |
| Clarendon, E. | Ardilaun, L. | Macnaghten, L. |
| Dartmouth, E. | Ashbourne, L. | Massey, L. |
| Dartrey, E. | Ashtown, L. | Minster, L. (M. Conyngham.) |
| Denbigh, E. | Atkinson, L. | Monck, L. (V. Monck.) |
| Derby, E. | Barrymore, L. | Monckton, L. (V. Galway ) |
| Devon, E. | Belper, L. | Monteagle of Brandon, L. |
| Eldon, E. | Boyle, L. (E. Cork and Orrery.) | Newton, L. |
| Essex, E. | Brancepeth, L. (V. Boyne.) | North, L. |
| Harrowby, E. | Brodrick, L. (V. Midleton) | Northcote, L. |
| Huntingdon, E. | Carew, L. | Oriel, L. (V. Massereene.) |
| Ilchester, E. | Castlemaine, L. | Oranmore and Browne, L. |
| Kilmorey, E. | Castletown, L. | Ormonde, L. (M. Ormonde.) |
| Lichfield, E. | Chaworth, L. (E. Meath.) | Penrhyn, L. |
| Lindsey, E. | Clanwilliam, L. (E. Clanwilliam.) | Ponsonby, L. (E. Bessborough.) |
| Londesborough, E. | Clements, L. (E. Leitrim.) | Ranfurly, L. (E. Ranfurly.) |
| Lucan, E. | Clinton, L. | Rathdonnell, L. |
| Lytton, E. | Clonbrock, L. | Ritchie of Dundee, L. |
| Malmesbury, E. | Cloncurry, L. | St. Levan, L. |
| Mayo, E. | Collins, L. | Sanderson, L. |
| Morley, E. | Cottesloe, L. | Sandys, L. |
| Northbrook, E. | Dawnay, L. (V. Downe.) | Shute, L. (V. Barrington.) |
| Onslow, E. | De Freyne, L. | Silchester, L. (E. Longford.) |
| Powis, E. | Deramore, L. | Somerhill, L. (M. Clanricarde.) |
| Rosslyn, E. | Desart, L. | Stanmore, L. |
| Shaftesbury, E. | Digby, L. | Templemore, L. |
| Shrewsbury, E. | Dunalley, L. | Trevor, L. |
| Stanhope, E. | Dunboyne, L. | Tyrone, L. (M. Waterford.) |
| Stradbroke, E. | Dunleath, L. | Ventry, L. |
| Vane, E. (M. Londonderry.) | Egerton, L. | Waleran, L. |
§
had upon the Paper an Amendment to the clause in the following terms:—
Page 8, lines 14 to 22, leave out subsection (1) and insert the following new subsection—
809
'(1) When application is made under subsection (1) of the Act of nineteen hundred and three for an advance of the whole purchase money of any holding, the Land Commission, if they are satisfied that one or more of the following circumstances exist, namely—
He asked if Lord MacDonnell desired to move the whole of the subsection as amended.
§ LORD MAC DONNELL OF SWINFORD said that as he understood that the Committee had just accepted the suggestion in paragraph (b) of his Amendment, he wished to withdraw that paragraph and to move the remainder of his Amendment.
THE CHAIRMAN OF COMMITTEESThe noble Lord's Amendment might come as an addition, but I do not think he could move to leave out subsection (1) of Clause 14. He might move his proposed Amendment as a new subsection without paragraph (b).
§ LORD MAC DONNELL OF SWINFORD said the noble Marquess opposite had stated that he was willing to consider proposals to prevent the occurrence of other difficulties in the zone system, and he (Lord MacDonnell) desired to propose the Amendment on the Paper, with the exception mentioned. He had endeavoured in his previous remarks to explain to their Lordships how the difficulties and abuses had occurred in reference to agreements fixed out of Court—agreements that had not been subjected to the process of judicial examination. He had explained to their Lordships, or endeavoured to explain, how this difficulty was met by the adoption by the Estates Commissioners of the plan of refusing to declare the property an estate until they were satisfied that the difficulties they were endeavouring to remedy did not exist. Under that plan, which the Commissioners adopted, the Act of 1903 had had the phenomenal success to which noble Lords had alluded in the course of the debate. Under a recent judicial decision the Estates Com- 810 missioners were now declared to be not competent to adopt the procedure which they had adopted during the last five years and under which proceedings had been conducted without friction and with great success. As the Commissioners were now prevented from adopting that line, he proposed that where the judicial rent had been fixed by agreement or consent after the promulgation of the Act of 1903 the Estates Commissioners should be qualified, when they saw sufficient reason, to make inquiry with a view to seeing whether the property was security for the advance which was called for. He made no proposal that they should inquire into the equity of the bargain or the equity of the contract between the vendor and the tenant. He dealt with that in a subsequent Amendment which he proposed to Section 20. In regard to the first part of his Amendment, it was only concerned with judicial rents fixed by agreement or contract after the passing of the Act of 1903. Before the passing of that Act there was obviously no inducement to the parties to enter into any arrangements which were calculated to injure the public revenue. There was no question of zones then, no question of advances; consequently there was no object in going behind the date of 1903. He therefore wished to limit it in paragraph (a) of his Amendment to transactions which had taken place since the year 1903. The next point he proposed was that the Estates Commissioners should be entitled to inquire whether the estate contained congested holdings. Congested holdings did not come within the zones. By the Act of 1903 they were excluded from the zones and it seemed to him the fact of that exclusion was sufficient reason why an inquiry should be made. His last reason was connected with the physical causes of deterioration, which the noble Marquess opposite seemed to think might form reasonable ground for inquiry.
§
Amendment moved—
In page 8, lines 14 to 22, to leave out subsection (1) and to insert the following new subsection—
'(1) When the application is made under subsection (1) of the Act of nineteen hundred and three for an advance of the whole purchase money of any holding, the Land Commission, if they are satisfied that one or more of the following circumstances exist, namely
THE CHAIRMAN OF COMMITTEESI think the beginning of the new subsection proposed by the noble Lord is rather repeating what has been already passed. The words from "when" to "namely," or nearly the same words, have been adopted in connection with the Amendment of Lord Atkinson. Probably the object of the noble Lord would be served if he introduced his alternative cases at the end of Lord Atkinson's, preceding them with the words "or if they are satisfied."
§ LORD MACDONNELL OF SWINFORD accepted the Lord Chairman's suggestion and deleted from his Amendment the words "When application is made," &c., down to "namely." He also deleted paragraph (b), and inserted before paragraph (a) the words "Or if they are satisfied."
812§ On Question, Amendment negatived.
§ VISCOUNT MIDLETON said that if the Amendment of the clause was ruled by the House of Commons to be a breach of privilege the original clause would' stand, and so far as he knew their Lordships would have no further power to deal with it. The clause without amendment seemed to him so dangerous that he moved its omission.
§
Amendment moved—
To leave out Clause 14."—(Viscount Midleton.)
§ On Question, Amendment agreed to.
§ House resumed, and to be again in Committee to-morrow.