Sitting of 4 May 1892

Preamble
Mr. SPEAKERwas in his place soon after Twelve o'clock, but not until half-past Twelve o'clock, and after attention had been called to the number of Members present, was a quorum formed.

SELECTION (STANDING COMMITTEES).
Sir JOHN MOWBRAYreported from the Committee of Selection; That they had added Mr. Webster to the Standing Committee on Trade (including Agriculture and Fishing), Shipping, and Manufactures.
Sir JOHN MOWBRAYfurther reported from the Committee; That they had discharged Mr. Thomas Ellis from the Standing Committee on Trade (including Agriculture and Fishing), Shipping, and Manufacture, and had appointed in substitution Mr. Randell.
Sir JOHN MOWBRAYfurther reported from the Committee; That they had discharged Mr. Samuel Hoare from the Standing Committee on Law, and Courts of Justice, and Legal Procedure, and had appointed in substitution Mr. Sydney Gedge.
Sir JOHN MOWBRAYfurther reported from the Committee; That they had added to the Standing Committee on Law, and Courts of Justice, and Legal Procedure, the following fifteen Members in respect of the Clergy Discipline (Immorality) Bill [Lords], viz.: Mr. Albert Bright, Viscount Cranborne, Mr. Henry H. Fowler, Mr. W. E. Gladstone, Mr. Howell, Sir John Kennaway, Mr. Stanley Leighton, Mr. Lloyd-George, Mr. Philipps, Sir George Stokes, Mr. Talbot, Mr. David Thomas, Mr. Waddy, Sir Richard Webster, and Mr. Wharton.
Reports to lie upon the Table.

STANDING COMMITTEES (CHAIRMEN'S PANEL) (LAW, &c.)
MR. CAMPBELL-BANNERMANreported from the Chairmen's Panel; That they had appointed Mr. Campbell-Bannerman
66
to act as Chairman of the Standing Committee for the consideration of Bills relating to Law, And Courts of Justice, and Legal Procedure.
Report to lie upon the Table.

EASTBOURNE IMPROVEMENT ACT (1885) AMENDMENT BILL.
Reported from the Select Committee.
Minutes of Proceedings to be printed. [No. 169.]
Report to lie upon the Table, and to be printed.

MESSAGE FROM THE LORDS.
That they do propose that the Joint Committee on Statute Law Revision do meet in Committee Room B, on Wednesday the 11th May, at Twelve o'clock.
Lords Message considered.
Ordered, That the Select Committee appointed by this House to join with a Committee of the Lords on Statute Law Revision, do meet in Committee Room B, on Wednesday the 11th May, at Twelve o'clock, as proposed by The Lords.—(Mr. Whitmore.)
Message to The Lords to acquaint them herewith.

ORDERS OF THE DAY.
  LOCAL AUTHORITIES (PURCHASE OF LAND) BILL.—(No. 33.)

    SECOND READING.
    Order for Second Reading read.
    MR. HALDANE: I think the House will agree that, having regard to the shortness of the time at the disposal of private Members, speeches on a Wednesday should not be longer than necessary. Therefore, I will proceed without preface to lay before the House the somewhat complicated provisions of the measure for Land Law reform I have to present. The Bill aims at the accomplishment of two purposes. In the first place, it seeks to provide Councils for counties and boroughs, now thoroughly representative bodies, with powers for the compulsory acquisition of such land as is necessary in the interest of the population they represent.

    67
    In the second place, the Bill seeks to deal with the problem of unearned increment, a problem which has interested many statesmen and economists for years gone by. Land in this country stands in a different position from any other form of property. In the whole of it society is interested; in some of it, that which is in the occupation of those congested portions of our population which are drawn into our towns and cities, society is deeply and vitally interested. This land, called for brevity urban land, is essential for the existence and life of the urban community, and it is in view of this that we feel some change must be made in the existing condition of the law. You have created these Local Bodies, you have made them representative of the inhabitants of the locality, yet you have not provided them with the power which of all powers is the most important to them—the power of acquiring and controlling the land which is necessary for the existence of the inhabitants whom they represent. Well, Sir, as things stand at present, a whole city may be at the mercy of a single individual. Land is, after all, a monopoly; it is something which cannot be provided but in a definite and specific form. It is not like money or any other form of property, one portion of which may do as well as another. This particular portion of land, and no other, is essential for the purpose of the people to be benefited. Under this condition of things, it seems to some of us right that you should provide the Local Authority with such power as will enable it to acquire and control land which is necessary for the health of the people whom it represents. Now that, of course, involves compulsory purchase, or, in other words, it involves the expropriation of the present landlord. But that is no new procedure; it is one with which we are extremely familiar nowadays. We have extended it to Railway Companies in the public interest for half a century. We have had it extended by a Conservative Government for the building of artizans' dwellings under the Act of 1875. Only a year ago the right hon. Gentleman who represents the Local Government Board in this House and who has attended to the question of the housing of the working classes in so fair and so keen a spirit, that
    68
    right hon. Gentleman brought forward a Bill consolidating and amplifying that power of expropriation given to the Local Authority. But even probably more familiar than that, though I doubt whether Members realise the extent to which the House has gone in the direction of expropriation—is the instance of 1882, when a Conservative ex-Lord Chancellor of immense ability, the late Lord Cairns, brought forward a Bill, which passed through Parliament, for amending the law relating to settled land. That Bill, promoted and enacted in the public interest, provided that where a man had only a subordinate and life interest in property he, for the public interest, should be enabled to turn that property, including the interest of the remainder-man, into money. This involved the principle that in the public interest the expropriation of the remainder-man may be made; that even where a person has a limited interest in it, he may be empowered to change that property into money subject only to the restriction that no portion of the value shall be taken from the person so affected. That is the principle of the Bill we propose to the House, and that is our case to be debated. We propose to give to the owners of the land which it is necessary to take in the interest of the public the pecuniary value of that land—the full pecuniary value. We say that under the provisions of this Bill, if it passes into law, there will be taken from the landowner not a single penny to which he has any legal or moral right. So much for the first purpose of the Bill. Now, as regards the second purpose, connected with unearned increment, urban land stands in a peculiar position. In the case of the land upon which the town is built, and which lies immediately around the town, there is a special increment of value which is absolutely diverse from anything else in the nature of property. It is not like the increase in value of Railway Stock, which rises and falls with the market; it is unlike the increase in value of any form of movable property; it is not even like the increase in value which takes place in land generally owing to agricultural reasons and the greater demand for land on the part of the population generally. It is a specific increase arising from this, and solely from this, that a certain piece of

    69
    land is vitally necessary in the interest of a particular community, and that a particular landowner who has the monopoly of the land has the power to dictate his own terms, and who says, "You shall not have the land except at my own price." That is the present state of things which differentiates the unearned increment in the case of urban land from the increase in any other form of property, and it is with that exceptional form of unearned increment, and that alone, we propose to deal in this Bill. It is instructive to look at the way this works. There is land around London which the people of London could, 40 years ago, purchase at the rate of £300 an acre, but the price now is from £5,000 to £10,000 an acre. What has been the cause of this increase? Certainly nothing that has been done by the owner, certainly nothing proceeding from any cause of a general nature. This growth—this enormous growth—is due to this, and this alone—the necessities of the population; and that those who represent the people have, on their behalf, to pay the owner what he chooses to ask and what it is right to give him, for the law allows him to make the demand. We cannot go back on past transactions; we cannot take the value which has accrued to the owner and which the law allows him, but we may alter the law for the future and prevent those scandals, for I can call them nothing else, which have occurred in the past from being repeated in the future. This Bill, then, is of a prospective nature altogether; it proposes nothing in the way of confiscation of increment, the title to which has already accrued. There is another view of the question. In London, in the course of the 21 years since 1870, annual ground values have increased, as distinguished from the buildings and erections on the land, by the sum of seven millions. If the people of London, so lately as 1870, had purchased the land on which their city stands, that city would be now in receipt of this enormous annual income of seven millions, which would go a great way towards the furtherance of public purposes, and certainly would have put them in a very much better position than they are in at present. When I take the period between 1870 and 1891, I do not mean the annual amount
    70
    each year—I mean the total amount. We say it has been a great error and mistake in the legislation of the past—that a Municipality such as that which represents London should not have had the power to take land and to divert into the pockets of the persons who created it, the value which has hitherto gone into the pockets of the owner. That is the aim and object of this Bill. It proposes to deal with the future, and I regret that it cannot deal with the past. I will now say a few words as to the reasons which induced us to bring it forward at the present time. Nothing is more striking than the way in which the extension of the franchise in 1885 has educated the public mind, and I might also say the minds of Members of this House, on this question. We no longer come to this House to represent individuals, however numerous and important they may be. We come here to represent the large mass of the people, and the consequence has been that the mind of the Legislature has been directed much more than formerly, to what I may call the collective, rather than the individual, interests and grievances of the people. The question about which we are now concerned is not that which relates to the diffusion of ownership, and to the breaking up of estates; but as to how the public may most effectually maintain and preserve their interests in the land. An illustration of the present position of affairs was provided in the controversy which took place the other day on the Small Holdings Bill and other Debates which took place last year, especially on the Leasehold Enfranchisement Bill. We felt that the Leasehold Enfranchisement Bill was brought forward not in the interest of society in general, but of a body of individuals, and that the effect of it would be to transfer the annual increment from one class of owners to another class who had no better right to it. We considered that, while leaseholders had grievances which ought to be redressed, that redress should come from some public body through a measure which should not give uncontrolled power to individual leaseholders.
    MR. LAWSON: I would put in Clauses of Control.
    *MR. HALDANE: My hon. Friend says he would put in Clauses of Control,

    71
    but we feel that the time has come when a measure of land control should be brought forward on a wider basis. I will pass now to the machinery of this Bill. In order to accomplish its objects, which I have attempted to describe, Local Authorities should be enabled to purchase land in the interest of the community, and to deal with it in a perfectly free manner. Now, it has been said, in quarters of this House from which I should hardly have expected it to come, that a proposal to give compulsory powers as to land to Municipalities is objectionable, as tending to lead to jobbery. It has been our business of late years to enlarge the number of these local Representative Bodies, and to extend their powers, and I think it comes with bad grace from some hon. Members to say that they distrust the power of dealing with land which has been given to Municipalities on account of the risk of jobbery which it might involve. If there is anything which characterises the Democracy of this country it is this—that it hates and detests anything like corruption; and I think we may safely trust to the Democracy, when it comes to the election of these Local Bodies, to see that they are elected on a basis which will preclude any danger of that kind. The awakening which came to London in connection with the abolition of the late Metropolitan Board of Works, and the zeal which has been shown in the Metropolis in regard to the County Council Election, has produced a body of members for the Council as pure and free from any suspicion of jobbery as it would be possible to find throughout the length and breadth of the country, and I have no doubt that the same may be said with regard to the Municipality of Birmingham. It is unworthy, therefore, of those who believe in these Local Bodies to suggest a suspicion of jobbery in this case. They may rest assured that the people who elect these bodies will take care that the risk is very small. Now, there is nobody in this House who has more closely associated himself with, municipal life than the right hon. Gentleman the Member for West Birmingham, and I confess I should have been glad if I could have seen him sitting in his place during the discussion of this question. He has been one of the
    72
    pioneers in the movement for increasing the powers of our Local Bodies, but it sometimes happens that he finds himself unable to give us that support which we should like to receive from him in regard to these matters. I trust, however, that in the Division we shall have the support of hon. Members who have been associated with municipal life in the past, and who are in a position to render yeoman service in the future. I would like to point out, with regard to the machinery of this Bill, that it proposes to enable the Municipal Authority to purchase the land in the first place, and to use it in the manner it thinks best. It maybe stated that injustice may arise in the case of individual owners of land, but I think that the Bill will put an effectual and thoroughgoing check on any abuses of their powers which may be contemplated by Local Authorities. Before there can be valuation of land and compulsory purchase, the authority of the Local Government Board must be obtained, for the Local Government Board must have notice and hold an inquiry, and say whether in its opinion what is being done is for the benefit of the inhabitants. If the Local Government Board sees that there is any real ground for suspicion in the case it will not sanction the proceeding. Then, again, public notice must be given of what is proposed to be done, and it will be in the power of the inhabitants concerned to draw the attention of the Department to the position of affairs. The Bill has been carefully drawn to prevent any such objections with regard to compulsory purchase. I now come to the question of unearned increment. Many propositions have been brought forward for the purpose of getting at the unearned increment. It was once proposed by Mr. Mill that there should be a general valuation of the land in the country, and that the subsequent unearned increment should be obtained by means of taxation. We do not look forward to the carrying out of any such far-reaching proposition. On the other hand, we think that a mere rating power is insufficient. I would point out that a rate for such a purpose is either a rate, or it is something more. If it is a mere rate, then it only gets a fraction of unearned increment; whilst if the whole is to be taken, then it is not a rate,

    73
    and you will be doing a very great injustice, because you draw no distinction between accrued increment and that which is to accrue after the passing of your reform. We propose in this Bill to deal only with the unearned increment which is created in the future, after the alteration of the law, and after notice has been given. We propose the adoption of what we consider is the only remedy—the remedy of purchase. By enabling the Local Authority to purchase the land you put them into the position of getting unearned increment. But it may be said that the Local Authority, such as the County Council in London, has not sufficient funds to enable it to purchase the land it requires for the purpose, and which it believes is likely to be the subject of greatly increasing value. Accordingly we provide powers of compulsory valuation. Suppose there are 100 acres of land on the confines of London which will probably go up in value, and that the County Council wishes to purchase it and to divert the stream of population in that direction. Suppose that the County Council further thinks it expedient to put the provisions of this Bill into operation. The result would be that it would have a valuation of the land, and that valuation can only take place with the consent of the Local Government Board. The valuation would take place, and it would be the duty of the arbitrator or umpire to give the owner of the land its actual value—that is, the sum that a willing buyer would give to a willing seller. The first valuation would take place on the basis of giving the owner the full market value of the land. The County Council may at any time within twenty years afterwards come forward and say—"We now require this land, and we will pay you the actual value at the time of purchase, minus only so much as is ascertained, upon the basis of the first valuation, to be due to the movement of population in the meantime." The result of my inquiries has been that the problem of the valuation is much simpler than many solved in the provisions of the Lands Clauses Consolidation Act, and that men of skill would quickly make rules which would enable them to determine this matter without the slightest difficulty. They would sit as jurymen and come to a kind of approximate estimate such as pertains
    74
    to the purchase of railways, and even more difficult elements than we have to deal with on this occasion. Having arrived at that value, the County Council would be able to purchase at the capital price of the time being, minus so much as represented this special unearned increment accrued since the first valuation. The owner of the land would get everything he had expended in the way of improvement. For instance, he might have desired to lay out the land as building land in order to attract people there; and it would be perfectly safe immediately after the first valuation to erect his buildings, lay out the land, and bring tenants there, and so increase the value of the estate in that way, because the value of all that he had put there would be secured under the provisions of this Bill. I wish now to deal with one or two objections which will be raised. It will be said that this Bill would depreciate the value of the land. Let me first say that as regards future owners it is, of course, absurd to say that they would buy without notice that the change had been made in the law under which this special unearned increment was no longer to be appropriated by private parties. Therefore we may dismiss the case of future owners. In the case of existing owners I agree there would to some extent, but not to the whole extentalleged, be depreciation of the value of the land. It is part of my case that it ought to be so. The matter stands in this way. Anybody owning the land would be paid for it at the full market value at the time of the purchase; but assuming there was a valuation with a view to subsequent purchase, then it would be paid when the time came on the basis of what I have described as the value at the time of purchase, minus special unearned increment accrued in the meantime. Of course, in the minds of purchasers who were speculating in the land, that would affect the value of the land, and to that extent they would not be in a position to give as much as if the Bill had not been passed, and the law left in the same unaltered condition. But such a purchaser would get the actual capitalised value of his income to begin with, and all actual value which had accrued up to the date of the first valuation and had entered into the market value. He would get everything which would be

    75
    his as the law stood, apart from the passing of the provisions of this Bill, as at the date of the first valuation; and he would be in a position to realise that value and to sell the land, because the purchaser of the land would know that the County Council could not then take it for less. There might be a general drop all-round, because of the existence of powers of compulsory purchase, but that is what you have to face, in kind at least, in all instances of giving powers of compulsory purchase. Take the case of a man who sells during the period within which the second valuation and purchase can take place, that is, 20 years, and it is the only case which distinguishes what I am describing from what occurs under any scheme of compulsory purchase. The seller may go into the market and say—"Here is my land valued at so much; the County Council cannot take it for less, and accordingly you may take it with this certainty—you buy it knowing you get that much for it. You can develop it and lay out money upon it, and you get the value of your improvement, and you get the income in the meantime which may be largely in excess of what you would get in the shape of ordinary interest on your money. You take it with the certainty that the County Council cannot take it for less than the capitalised value of the income, and with the chance that the County Council may not purchase it for some time." What this Bill proposes to do is to give everybody who owns this kind of land exactly the same price he would have if it were ordinary land. It proposes to secure that. It is only in the case of speculative purchasers that the price could be affected. In all the other cases, in the case of people buying for occupation and objects of that kind, matters under this Bill would stand as at present. And, therefore, while I admit that the effect of the passage of this Bill must be to bring about a certain depreciation in the value of land in the hands of some existing owners, I also say that what would be affected would be merely the speculative value, and not the legitimate and ordinary value of the land, treated as upon the same footing as the other land in the country. There is another objection made to this Bill. It is said that if you are going to take the
    76
    unearned increment you ought also to compensate for what was described the other day in a Debate in this House by the hon. Member for the Stamford Division (Mr. Cust) as the undeserved decrement. It is said—"If the land goes up in value you are going to take this increment, you ought, by another provision, to pay the man if it drops in the meantime." That is founded upon a complete fallacy and misapprehension. What you do is to value the land, and in that valuation you get at the market value, and it is open to the owner of the land to sell it at the amount of the valuation. He can get his money and pocket it. If he desires to continue the ownership, he only does so because he hopes for, and takes his chance of, an increase in his income and in the value of the land, and with it the risk of drop which attends that chance. The effect of this Bill is merely to give notice that you are not going to allow this form of increment to be appropriated in the future as it has been in the past. Involved in that there is no correlative obligation to make allowance at the public expense for the diminished value. That is due to the ordinary incidents of which speculators take the risk; and if a man does not choose to realise at once, and a worse time comes to him, that is his fault and misfortune. Certainly, the population of the town or its representatives, the Local Authorities, cannot be blamed. It seems to me that is an answer to the two objections—the only two real objections—which can be made to this measure. It seems to us that this measure is one which does not involve the confiscation of a single penny to which any man has a legal or moral title. We know the law may be altered, and the only change as regards the landowner is that the law has been altered. The objections brought forward to this Bill are objections which in kind may be brought forward in precisely the same way to every Bill giving powers for compulsory purchase. Does the right hon. Gentleman opposite (Mr. Ritchie) imagine that in his Bill giving enlarged power to Local Authorities to acquire land for the purpose of artizans' dwellings he did not thereby affect the value of the land which was likely to be so taken? I venture to say that he brought about a great change in the value of certain urban properties in

    77
    London, and I will go further and say that the change is one of the best things which the right hon. Gentleman has accomplished in his administration.
    MR. RITCHIE: Compulsion in regard to unsanitary dwellings.
    *MR. HALDANE; In the machinery which you had established by successive Acts of Parliament you had created the theory of these unsanitary conditions, and then you gave compulsory powers to take the land to which they apply, and now you say there as a distinction between that sort of thing and what we contemplate. But we are laying our hands upon an unsanitary spot in the administration of these affairs by urban authorities, and we want to deal with it on the same principle and in the same way the right hon. Gentleman did in the case of the Housing of the Working Classes Bill. All measures for compulsory purchase must affect the value of land, but it is time we ceased to recognise that as a valid objection. I remember how in 1886, in that January Debate which has been so often referred to, the right hon. Gentleman the Minister for Agriculture denounced my hon. Friend the Member for the Bordesley Division (Mr. J. Collings) and the right hon. Member for West Birmingham (Mr. J. Chamberlain) for their proposition of compulsion at that time. He said those were the proposals of a class with predatory instincts represented by the two hon. Members. Well, there came a time when the Minister for Agriculture was working in harmony with those two Members, calling them his friends, and agreeing with them as to the principles of a measure they were bringing forward in common, and which, only the other day, they were all supporting. It seems to me that experience is not unlikely to be repeated. I dare say we shall have a speech from the Minister for Agriculture denouncing this Bill as confiscation and robbery, and I shall attach as much importance to that speech as I attached to the speech on that January afternoon in 1886. Years will pass, perhaps it will take two or three or more, but the time will come when this Bill, which I am now bringing forward, will, in principle at all events, be advocated from the Benches opposite. Do you think as the franchise is still further extended,
    78
    and as the people begin to feel more and more the power you put into their hands, that they will tolerate a state of things under which value, properly theirs, and which ought therefore to go into their pockets, is to go into the pockets of a few monopolist landlords who have no more right to it than I have? It appears to me that the Bill we are introducing from this side of the House is a Bill of really Conservative policy—it is a Bill which seeks to give effect to the tendencies of our time, and to recognise the new views of Land Law reform which have been forced upon us as a result of the wider franchise which now obtains. We who sit here are, after all, the people's men of business, and it is our duty to be responsive to their opinions. There was, a few years ago, great agitation on the subject of the land. There came to this country a gentleman of great oratorical ability, who went through the land rather in the character of a preacher than in any other guise, and he preached the doctrine of the iniquity of private ownership of land, and the doctrine of expropriation without compensation. I bring forward this Bill, not because I agree with Mr. Henry George, but because I disagree with him. If you are to stop the agitation which then began, and which, it seems, has been acquiring force ever since, something must be done. The mind of the people is awakened on this subject; and I think in this connection we owe something to Mr. George instead of having a grudge against him. He has made the people see that the time has come when something must be done; and what we seek in this Bill is to do that something, not in the unjust form he proposed, but in a just form. And we feel that in the proposition we are laying before the House we are taking that step. I do not say that this Bill deals with the whole land question, or even with more than a small part, but I do say that it seeks to grapple with a real grievance, perhaps the most important the people have. In seeking to deal with that grievance, we seek to deal with it by altered law for the future, avoiding those doctrines of confiscation which have been talked about so much and denounced so often, but the true significance of which has not, I think, been understood. Our business is to disengage the nature of the real diffi-

    79
    culty, and to find a remedy for it. It is not in any revolutionary spirit that I bring forward this Bill. It is with a desire to grapple with a grievance, a most real and substantial one, in a way which is consistent with justice, and it is in that spirit that I venture to commend this Bill to the favour of the House.
    Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. Haldane.)
    MR. BAUMANN: I shall move, Sir, that this Bill be read a second time this day six months, and in doing so I must say that if this Bill had been moved by anybody but my hon. and learned Friend the Member for Haddington (Mr. Haldane), and if it were not to be seconded, as I understand it is, by the hon. and learned Member for Fife (Mr. Asquith), I should have regarded the Bill as an elaborate joke, not a very good joke, but as a Wednesday frolic. The characters of the hon. and learned Members, however, preclude such a suspicion. These two hon. and learned Gentlemen have professional reputations to lose, they are both looking for office in the next Radical Government, and we are obliged, therefore, to regard this Bill, this ugly and sinister Bill, as the serious conception of the rising lawyers of the Radical Party. The Select Committee on Town Holdings recommended that in the case of large industrial populations in permanent employment living close to their work, and where the people were able and willing to buy the freehold of their houses, the Local Authorities of such places—places, for instance, like Woolwich, and such communities as are to be found in the neighbourhood of slate quarries or coal mines—should be armed with the powers of compulsory purchase. In that recommendation I heartily concur; but, Sir, this Bill proposes something very different from that. This Bill says that "where it appears to any County Council that it is for the interest of the inhabitants of any district within the county that any lands shall be purchased … … the Council may purchase those lands." No public object stated; simply for the interest of the inhabitants. Sir, I say it never can be for the interest of any of
    80
    the inhabitants in any county in England that any lands should be bought under the terms and conditions of this Bill, because it is for the interest of all the inhabitants of all the counties in England that security of property should be maintained, and I am old-fashioned enough to believe that what is wrong in morals cannot be innocent in politics. In these modern days, with the extended franchise, there are many limitations imposed on the rights of property, as the hon. and learned Gentleman (Mr. Haldane) has reminded us. I know a man cannot do what he likes with his own if, by so doing, he injures his neighbours. I respect the maxim, sic utere tuo ut rempublicam non lœdas. But, Sir, I ask this House if the hon. and learned Gentleman has produced a single argument to show that the present ownership and distribution of landed property in England inflicts on the community evils half so serious and grave as those that would flow from the shock to security which would be given by this Bill, and from the open war on property which he proposes to wage? When you make war on property, as Burke says, you make war on human nature. But, Mr. Speaker, the proposals in this Bill for the immediate purchase of land, though monstrous enough, and unjustified by any public object, are mild, innocuous, and even laudable when compared with the provisions in the Bill for valuation with a view to subsequent purchase. It appears from Clauses 4, 5, and 6 of this Bill, that if the County Council should cast its covetous, and regal eye upon the vineyard of any Naboth in the country or out of the country, and if the envious monarch should not feel inclined to force a sale at that particular moment, either from scarcity of funds or because the market is brisk, then the vineyard in question is to be tied up for 20 years to await the royal pleasure of the County Council, under a valuation which is pleasantly described as a charge on the land, and which is to be registered under the Registration Act of 1888. And if at any period within the 20 years the County Council think they see a favourable moment for buying, down comes their hand upon the property. And, Sir, the price to be paid for it is to be the price which is described as—

    81
    "The fair market value of the lands at the time of the purchase thereof, after deducting the proportion of any increase of that value over and above the value of the lands as the same was ascertained when the lands were previously valued under the provisions of this Act, which may be ascertained to be the special increment due to the increase or movement of the population in, or to the industrial or other development of any town or other populous place in the neighbourhood of such lands."
    Now, Sir, that is not easy to realise at first. It requires an effort of the imagination to gauge even approximately the bottomless injustice of this proposal. It is, again, a case of "Heads I win, tails you lose." If the land rises in value the owner is not to receive the increment, if it can be traced to any of those causes which usually produce a rise in the value of landed property. If, on the other hand, the property falls in value, the owner, after having been prevented from dealing with his own property for 20 years, will then have it left on his hands damaged and depreciated by the County Council, because the House will observe there is no power in the Bill to force the County Council to buy the land which they have locked up for 20 years under the blight and padlock of their valuation. In other phraseology, Sir, the County Council is to have the call of any land it likes to put its finger upon; it is to have an option of purchase extending over 20 years, and for that option not a single farthing is to be paid! Mr. Speaker, that is a proposal which most business men will regard as the fantastic scheme of young lawyers who dream nightmares, because, Sir, I do not think any man will deny that the effect of this clause will be to make any lands subject to the County Council valuation absolutely unsaleable. What man would be such an ass as to buy lands from which he would be liable to be expropriated at any moment by the County Council, particularly as he would not be allowed to make the ordinary profit that might attach to a judicious investment? Now, Sir, I am bound to say, with all due deference to my hon. and learned Friend, that of all the blundering and plundering fallacies propagated by modern Radicalism, this so-called doctrine of unearned increment is the most shallow and sinister. The hon. Gentleman very conveniently proposes to confine this
    82
    doctrine to landed property in the neighbourhood of towns; but I entirely refuse to accept that limitation from the hon. and learned Gentleman. He will find, as the franchise is extended, that what is sauce for the landlord is also sauce for the commercial millionaire. I want to know with what object any man buys property of any kind? Is it not in the hope and belief that the property will rise in value? And every man expects to be allowed to enjoy every chance, whether from accident or his own exertions, to augment any part of the value of his property. Why does a man buy shares in a mine or a bank? Why does he buy Government securities? Not only to get interest for his money, but in the hope and belief that his investment will improve in value. I buy Consols at 90, and they go up to 95. I have done nothing, except as an ordinary citizen who shaves, and pays his debts and says his prayers. I have done nothing to increase their value and yet they rise. If ever there was a case of unearned increment, it is that of the increased value of industrial undertakings; and I will venture to say that most, if not nearly all, of the hon. Gentlemen opposite who are going to vote to-day for the confiscation of the unearned increment in land have made their fortunes and to-day draw their incomes from the increased value of industrial undertakings in different parts of the world, and to which they have never contributed one moment's thought or exertion. I will go further, and say that the fruits of the earth contain as large an element of unearned increment as the earth from which they are derived. The farmer gives his care to the cultivation of the soil, but his labour and anxiety differ not at all from the labour of managing an estate, and the prices which the farmer gets for his produce—the value of his corn and beef—depend almost entirely upon facilities of transport, the railways and canals in his neighbourhood, and the proximity of markets. The farmer has done nothing to make the railway and very little to increase the population that consume his produce. But since the railroad was made the farmers' profits have doubled. Is the County Council coming down upon that farmer for his unearned increment? Because it seems to me that with pre-

    83
    cisely the same logic as they propose to come down upon the landlord they might come down upon his tenant. Mr. Speaker, the real issue raised by this Bill—although it is not avowed—is whether private ownership in land is to continue to be recognised by the Legislature of this country. If it is not to be recognised, let us say so plainly, honestly, and openly, and let us say to the Local Authorities, "Buy up existing landlords," but do not let us pretend to recognise the principle of private property in land, and then destroy that property piecemeal by depriving the owners of the rights and profits and advantages of possession. I may be told by the hon. and learned Gentleman opposite that property is only an idea: that it has been created by law, and that it can be destroyed by law. I agree with that to some extent. But do hon. and learned Gentlemen opposite, whose profession has battened and fattened upon property, who are the children and who should be the champions of property—do they really wish to destroy the idea of private property in land in this country? What is that idea of private property? It is that established expectation—that certainty of power—based upon the law of the country, which prompts a man to enclose a field, and to give himself to its cultivation in the distant hope of the harvest. Destroy that expectation, diminish that certainty, and your complex society tumbles to pieces like a house of cards. Sir, this legislation may appear to some to be progressive and enlightened. It strikes me as a remarkable piece of political atavism. To the principle of private property in land we owe what is admitted to be the most marvellous achievement of modern times—namely, the cultivation mainly of that modern Continent of North America. But the legislation embodied in this Bill strikes me as a curiously applied determination to employ the machinery of the 19th century to introduce into this country the barbarous economy of Russia or a Hindoo village community. Not very long ago, Mr. Speaker, Sir Charles Dilke recommended the rising generation of Radicals to read their Bentham. There is no man better qualified to guide the rising Radicals than he, and I wish they would take his advice. I do so, and I
    84
    will give the hon. Gentleman opposite a concluding quotation from Bentham's Principles of the Civil Code. He says—
    "With respect to property, security consists in no shock or derangement being given to the expectation, which has been founded on the laws, of enjoying a certain portion of good. The legislator owes the greatest respect to these expectations to which he has given birth. When he does not interfere with them, he does all that is essential to the happiness of society; when he injures them, he always produces a proportionate sum of evil."
    Mr. Speaker, I trust that this House will reject, as it has always rejected, these proposals to legalise confiscation. I hope this House will, by an overwhelming and decisive majority, reject the proposals of this Bill, which is really one of the coolest and most impudent attacks upon the security of property which I think has ever been submitted to the Legislature of a civilised country. I now beg to move that this Bill be read a second time this day six months.
    MR. RENTOUL: I rise to second the Motion of the hon. Member for Peckham (Mr. Baumann) that this Bill be read a second time this day six months. The hon. Member said that he should have regarded the Bill as a joke had it been brought forward by any other gentlemen than the hon. and learned Member for Haddington (Mr. Haldane) and the hon. and learned Member for East Fife (Mr. Asquith); but I regard it as a joke, and chiefly because these hon. Members have brought it forward. The ability, eloquence, and power of the two hon. and learned Members are admitted, but they themselves know that they are not regarded generally as having much power of joking; and therefore, I think, they wished to prove by this Bill that they had as much ability in the direction of joking as in any other direction. The matter of compulsory sale has many advocates in Ireland; but even the most advanced advocate of that theory in Ireland whom I have ever met has never had the audacity to advocate that a law should be made compelling landlords to sell in cases where the tenants wished to buy, unless the same law compelled the tenants to buy where the landlords wished to sell; yet this Bill compels the landlords to sell, and leaves the County Council perfectly free, to buy or not as it may wish. Indeed, the principle is that the County Council ought not to buy

    85
    where there is any risk; they shall buy only where the gain to them is immediate and certain, and the loss to the landlords or owners equally certain. I thought that some parts of Ireland led the way in the desire to rob landlords; but here is a Bill that goes beyond anything that any Irish land reformer has ever dreamed of, and beyond anything of which any man has ever dreamed; and really, in certain respects, this Bill goes further than the wildest theories of Mr. Henry George. But my hon. Friend who moved the rejection of this Bill said that it never could be for the advantage of the inhabitants to apply its proposals, because security of property was for the general good. I think my hon. Friend is partly right and partly wrong—right if he looks away into the future, and to the general unsettlement and insecurity which would arise; but wrong if he looks merely at the near present, because, if there are in a given area thirty thousand people, and if thirty of those are the ground landlords, it will, undoubtedly, be a present advantage to the twenty-nine thousand nine hundred and seventy that the thirty shall be robbed, and the proceeds distributed among the others; therefore, robbery is present gain to those who share the plunder, but future loss to the whole community by unsettling the rights of property, and of all kinds of property, should the principle of this Bill be fully extended. The hon. and learned Member for Haddington had the greatest difficulty in keeping from laughing while he was moving this Bill, and his Radical friends around him certainly seemed to be greatly amused. The audacity of the proposal was so boundless that no one could really treat it seriously. The Mover of the Bill said that land stood on a different footing from other property, but that I entirely fail to see. Where is the real difference between what may be called unearned increment in the case of land and in the case of a newspaper, a bank, the goodwill of a business and especially of the business of a solicitor or a doctor, and, indeed, of almost all kinds of business adventure which grow with the growth of a locality? Take the case of a newspaper. A man purchases some land with or without houses on it, in a growing town, and, at the same time, and for exactly the same amount, he purchases a newspaper
    86
    in that town. Well, in 20 years the town has doubled in population and in prosperity, and at the end of the 20 years the purchaser wishes to sell both the land and the newspaper. He will in all probability have a larger profit on the sale of the newspaper than on the sale of the land. All the time, during the 20 years, he has lain out of both the capital which he invested in the land and the capital he invested in the newspaper. He has, during the whole time, paid the outgoings of both—namely, the rent and taxes and other expenses regarding the land, and he has taken the profits, whatever they may have been; and in like manner he has paid the running expenses of the newspaper, which he has employed others to work for him, and has taken the annual profits therefrom. He has expended neither time nor personal labour, to any great extent, on either the land or the newspaper, and, in proportion to the capital expended, and the current expenses, his profits during the 20 years have been as great, or greater, from the newspaper than from the land. I want to know, in what single particular the two cases differ? The increase in value of the land and the increase in value of the newspaper have arisen from exactly the same cause—namely, the growth and improvement of the town or district. Does not exactly the same thing apply to a solicitor's practice? Two solicitors of equal ability start in two towns. The one town progresses, and so does the solicitor's practice. The other town goes back, and so does the solicitor's practice. There is no business I can imagine in which there is not what I may call unearned increment; that is to say, an increase in the value of the business which is solely dependent on the growth and improvement of the locality in which that business happens to be situated. It may be said that the people cannot live without land, but equally little can they live in this age without many of the businesses that grow with the growth of towns. But, if this Bill passes, who will purchase land, especially in towns? Will any man put one penny of capital into land when if it falls in value he loses, and if it increases in value he makes no profit whatever? Nay, more—his land will not be taken even at the price he paid for it. He may buy land at a certain price, and five years later it falls

    87
    one-third in value. Then the County Council gets it valued when its value is at its lowest; then fifteen years later the land may be worth double the price paid for it, and then the County Council takes it, not at cost price, but actually at the lowest figure it reached in twenty years. That this would be so is clear; for a County Council must do its duty in a business-like manner, and it would not be business-like to value the land at the date when the owner buys it, except where there was an absolute certainty of constant increase in value—and that occurs in very few places. The County Council must be prudent. It must be business-like; it must wait for the lowest moment to value, otherwise it will not be doing its best for its electors. It is difficult to argue seriously about this Bill. It surely must be a joke. If it is good in principle, the principle must apply to all businesses in which an unearned increment is possible, and that I have shown is possible in any business I can imagine, as so much depends on the good fortune of placing the business in a growing locality. If this Bill undertook in any way, however slight, to compensate for loss, then I could see some reason in it. If it valued the property, and then gave the owner the option of forcing the County Council to take it in case it fell in value, there would be some shadow of reason for the Bill; but, as the Bill stands, no legislation like it has been attempted in the civilised world. But I think this Bill has a political tendency. Its promoter several times spoke of the electors, and of the extension of the franchise. Therefore, his idea seems to be that his Bill, looking like an attempt to rob the great landowners for the good of the people, will be so popular with the middle and lower classes. But in this respect it will fail if the facts are put before the people, for this Bill applies to the property of small owners as well as of large owners' and I find that while the gross rental of the large owners in the United Kingdom, who own each above one thousand acres, is 37 millions sterling, the gross rental of those owners, whose property is less than 20 acres, is 43 millions sterling. Thus it is the small owners who will be hit hardest by this Bill, firstly because they own a greater quantity of the land of this country than
    88
    the large owners do; and, secondly, because, in the case of large owners, probably only a portion of the property of any given owner will be taken; whereas in the case of the small owners, if the property of any man is taken, it will probably be his whole property that will be taken. But let me show how entirely it would stop enterprise if the principle of this Bill were applied generally to all property, as I hold it must be if it is applied to land; let me take the case of a tramway in a new district. The County Councils say that at some future time they may probably take over all tramways; therefore a tramway is an appropriate illustration. A company makes a tramway towards a new suburb. At first the tramway will pay very little, but the Company makes it, knowing that as the district is growing, the tramway will pay well in the future. But suppose the County Council have power to value the tramway in the first year of its existence, with a view to taking it over at that valuation if it became a really paying concern, what Compare will, under such a state of the law, ever make a tramway in a new suburb? Therefore in its earlier stages a new district will be deprived of any chance of having a tramway. Why, the more this Bill is looked at the more foolish it appears. But the hon. and learned Gentleman made a long speech, and he did not spend five minutes of it in dealing with the Bill. He only dealt with general principles. He was afraid to face his own Bill. The Bill appears to give to the Local Government Board a right, if it thinks fit, to refuse to consent to the County Council valuing any given land—but really the Local Government Board cannot withhold its consent, for the Bill, says the Board is only to withhold its consent where it appears that taking the land or having it valued would not be for the good of the inhabitants; and such a thing would never appear. How can it ever be for my disadvantage to have-another man's land valued and power given to me to take that land if it rises in value, and to leave it alone if it does not so rise? In fact, I think it would be possible, if this Bill were passed, that the inhabitants of a district could mandamus a County Council to compel it to value all the land in the county and register the same with

    89
    a view to its being taken in future in case it increased in value. But the hon. and learned Gentleman tries to put a gloss on the really terrible part of the Bill—namely, the part allowing a County Council to value land and then, at some future time to take the land, not at the market value at the time of taking, but at the market value at the time of valuation. He says, "Oh no; my Bill says, take the land at the market value at the time of taking, minus the unearned increment accruing since the date of valuation." Where is the difference between this and taking the land at the value at the time of valuation? It is exactly the same thing, but the hon. and learned Gentleman shies at boldly saying, "Land shall be purchased compulsorily at a price perhaps only half the market value." This is what his Bill says really, though he does not venture to say so much. But this Bill, though brought in by two Scotch Members, says that it shall not apply to Scotland or Ireland.
    MR. HALDANE: There is another Bill before the House to apply the provisions to Scotland, but it was decided that the two countries should not be included in one Bill because the machinery was necessarily different in the two cases. Substantially, however, the Bills are the same.
    MR. RENTOUL: Oh, very well. I wonder how the Scotch people will like it! But this Bill does not apply to Ireland. Is this another injustice to Ireland? But it is needless to say more. It is difficult to discuss the Bill seriously. It is only backed by one English Member. (Cries of "Three.") Well, it is the production, the sole production, of two Scotch Members. They may deal with Scotland as they like, but better leave English Members to begin this new scheme in England. I am sure the Bill will be rejected by a great majority.
    Amendment proposed, to leave out the word "now," and at the end of the Question to add the words "upon this day six months."—(Mr. Baumann.)
    Question proposed, "That the word 'now' stand part of the Question."
    MR. SYDNEY BUXTON: I regret that my hon. Friends who oppose this Bill are not present, as I should like to have made some remarks on their speeches.
    90
    They dealt with the Bill as a good joke, and, apparently, thought it better to treat it as a joke rather than to bring any serious arguments against it. They did not advance any very serious arguments against the proposal of my hon. Friend. There is no doubt that proposal is a very considerable new departure in regard to land legislation, but the reason for that is, that there is a growing feeling that the true mode of dealing with land legislation is to municipalise it rather than to increase the number of proprietors. The reason why this matter has made greater progress of late is twofold. First, that the present system accentuates year by year the injustice that the community should sow and the individual reap; and, secondly, we have in existence powerful representative Local Bodies into whose hands we can safely put these questions. The whole argument of the hon. Member for Peckham (Mr. Baumann) was, as far as I can judge, a question of property; he based the whole matter on the question of security of property, and said that the Bill would break down the whole fabric of society. It struck me that what the hon. Member was really more afraid of was the giving of further powers to the London County Council. The hon. Member never speaks in this House without taking the opportunity of saying something harsh, and in most cases, I think, unjust, about that great body, and I think that hon. Members on that side of the House seem to think that these public authorities being created, the powers which were originally given them ought to remain with them, that they ought to attend to, and deal with, our drains, and do nothing further; but I am glad to think that they have created what they themselves think is somewhat a monster, and that monster I hope will swallow up a great many of the duties which are at present performed by this House. The two hon. Members used very strong words and somewhat poor jokes in reference to this Bill. If the Bill be as bad as they represented it to be, it appears to me that their speeches in reply were singularly weak. Their great argument so far as I can judge was this—that if we deal with land in this direction and under these circumstances, we ought also to deal with all other forms of property. I have myself no

    91
    particular objection to dealing with other forms of property as well; if the hon. Members will show us the way in which that legislation can be carried out. But I think my hon. Friend the mover of this Bill pointed out the very essential difference between dealing with land and dealing with other forms of property; because, as he pointed out, the land is limited in extent, it is at the bottom of all productions in this country, and it is really a monopoly which no other form of property can possibly be, and further—and I think this is an important point—while it is quite within the competency of our Local Authorities to deal with the question of the land, it is not by any means within their power to acquire great businesses and to carry them on for the benefit of the community. As regards the general question put forward by the two hon. Members who have spoken, as I understood the hon. Member for Peckham—who I am glad to see has returned to his place—he did not seem to understand this question of the unearned increment at all. So far as I can see, he said nothing in regard to what, after all, is the pith and marrow of the Bill of my hon. Friend, in regard to what we consider the injustice of the present situation. He made a few jokes—I am bound to say a few excellent jokes—but he did not deal with what we believe to be the present position in regard to the question of the unearned increment. It is a difficult thing to define the unearned increment. Every one can define it in a way. For myself my definition of it is this: that it is the value of the land, apart from its ordinary agricultural productive process, and apart from any capital, outlay or enterprise that may have been put into it by its owner; the value which is created by the existence, by the presence, by the outlay, the enterprise and the energy of the community at large. That is the portion and the value of the land which we desire, if possible, to obtain for the community, and which, at present, is confiscated by certain individuals throughout the country. I desire especially, in speaking in this Debate, to deal with it from a London point of view. I think the London point of view is, after all, the strongest case we have, because the number of owners in London is probably
    92
    more limited than in any other town. They have a greater monopoly under the leasehold system over land of that kind, the rents are higher, and this unearned increment grows at a greater proportionate rate than probably anywhere else throughout the country. I suppose I may say that probably the agricultural value of the land is something like, or would be about £250,000, whereas the actual value of the land, apart from the value of the buildings, it has been estimated by many competent persons, at the lowest estimate out of a total rateable value of £40,000,000, is something like £15,000,000. That is what we may consider to be the unearned increment in regard to London itself. Everyone knows that it would be superfluous to-discuss the question at any length. Everyone knows that the very large increasing annual value of the land of London is due in no sense to the energy or outlay of the owners of that land. It is due partly to the expenditure of the tenants, and partly to the buildings. Hon. Members will remember with regard to the evidence given before the Strand Committee on the betterment question, that there were cases mentioned in which it appeared that the sites had been advertised, with this additional attraction in the advertisement, that the Local Authority were going to make improvements; and that the result of that would be that it would greatly increase the value of the sites. And I suppose that no one will deny that the bulk of this expenditure goes practically into the pockets of the owners; the community at large is what we may call rack-rented for the benefit of those who happen to own the land. My hon. Friend below me when my hon. Friend the Member for Haddington (Mr. Haldane) was speaking, seemed to imply that the best way of arriving at the value of the unearned increment for the benefit of the community would be by some form of taxation. In that I very much agree; and this proposal of my hon. Friend is in no sense of the word antagonistic to any pro position to get at this unearned increment by means of taxation. As regards-the question of betterment, I may say that the right hon. Gentleman the President of the Local Government

    93
    Board in his place the other day practically admitted the principle that is contended for by my right hon. Friend, and by hon. Members on this side of the House. He admitted the principle of betterment. The principle of betterment is this, that, where it can be shown that an individual is benefited at the expense of the community, that individual ought to pay a sort of ransom to the community for the benefit which is done him. That is the principle of betterment, as that is the principle which underlies the Bill of my hon. Friend. We were told by hon. Member opposite that there would be great injustice done in regard to this Bill; but as my hon. Friend pointed out there is no proposal in this Bill to take anything from anybody to which he has a just right, and to which he can show a just claim, and I must say that the object of the Bill seems to be one which ought to commend itself to the Liberty and Property Defence League, because it is really in the interests of property that this Bill will be carried through. Then we were told—I think the hon. Member who seconded the Amendment specially dwelt upon this—that, it would discourage enterprise, and the development of estates in London. How would that affect the question of the vacant land? Is there any enterprise or development in regard to these vacant spaces? The whole of their value is the result of the expenditure of the neighbouring inhabitants and out of the rates, and there is no doubt, as regards them, that the effect of the Bill would not affect in any way the question of dealing with them. As regards the owners themselves, as was pointed out by my hon. Friend opposite, the bulk of the improvements in London are not done by the owners, but by the builders, the leaseholders, and the occupiers, and where they are done by the owner they are done, not with the view of unearned increment, but with the view of immediate profit for any outlay they may have undertaken; and practically the bulk of the improvements are done under the leasehold system by builders and by the occupiers, and surely, theoretically, if one were asked, what system would be the most likely to encourage enterprise, and development under any system of land tenure, one would have thought that the leasehold system, which
    94
    prevails in London, would certainly do that. It is under the leasehold system that, practically, the additional expenditure of the occupier is absorbed by higher rents and higher rate, first by the owner and secondly by the community. But no one would have thought that this would be the greatest possible discouragement to the development of enterprise, seeing that London has developed under it in the most extraordinary way. As regards the question of insecurity, I am bound to say this, that, so far as regards this Bill, we look at the matter more as a question of principle than as a question of detail; and if it were thought that the period of twenty years was too long—and I am inclined myself to think it is somewhat too long—I am quite sure that when the matter was considered, there would be no objection to reduce that length of time. And in regard to the question also of the interference of the Local Government Board as a check over the proceedings of the Local Body, there, again, I am sure, if it can be shown that a further check is necessary, there would be no objection to put in any fair proposal in that respect that might be made. But as regards the general principle of the Bill, we say that where an increase of value is due to the action of the community, there the community ought to be able to intercept that profit. It is mainly where the question of compulsion comes in, that this Bill—the novel portion of it, is in reference to the land valuation and the ultimate purchase of the unearned increment. My hon. Friend the Member for Peckham (Mr. Baumann) said if you give what he called "the call for land" to the County Councils for public improvements, you ought to give it also in reference to tramways. That is exactly what exists under the present system, because in London, only the other day, a case occurred in which the tramway had been built; and in the very Act which enabled the company to build the tramway there was a provision that 20 years afterwards the local authority, if necessary, could buy, not with, but without the unearned increment. So that that is not an argument against, but a very useful precedent in regard to this Bill. The hon. Member for Peckham said if you give these powers

    95
    to the County Councils, they will certainly deal with them in an unjust way; and it will probably lead to jobbery and to corruption.
    MR. BAUMANN: I did not say anything of the kind.
    MR. SYDNEY BUXTON: Then I am very glad, and it is not necessary for me to argue that point. There is this further to be said, that as I said just now, I think it very reasonable that a check in the interests of the public should be placed on the action of the Local Body in the use of these powers, and if any hon. Member can show, that further powers ought to be given to some public body to prevent any abuse of these powers we should be content to accept them. But we believe that our great Local Authorities are now so representative and efficient that these extra-additional checks on their proceedings are no longer necessary. The machinery proposed in this Bill is of a very simple and efficient character. The valuation will be done under the ordinary rules of valuation. As my hon. Friend pointed out, there will be no more difficulty in regard to the valuation of these properties than there is in regard to valuation for railways or for any other purpose. All that is required is that, if the Local Authorities desire to buy, a second valuation will be necessary in order to show what outlay has been expended on the land by the owner, and that, plus the first valuation, will be the price the Local Authority will pay to him. We believe that this is, to a certain extent, a middle course between the existing state of things, which is confiscation of the property of the community by a few individuals, and between what goes by the name of nationalisation of land, which is confiscation of the property and outlay of the landlords without compensation. One great advantage of this proposal is that it will not complicate in any sense the questions of contracts, or of individual interests in a particular property, or of the past. It will only apply to the question of the future, and will, to that extent, be very much simpler than any of the proposals with regard to ground rents. We believe it is right that the community at large should be able to intercept the increase of value which belongs to themselves; and while we do not say that this is a very perfect
    96
    or far-reaching plan, we believe that it is the first and the best step towards the municipalisation of the land in the interests of the community, and that it will be in the interest not only of the community at large, but also of the property owners themselves.
    MR. LAWSON: I join with the hon. and learned Gentleman the Member for Peckham (Mr. Baumann) in characterising this Bill as one of the most fantastic and irrational proposals that were ever made to Parliament, although I do this from a somewhat different point of view. I claim to be a strong advocate of land law reform; but I believe this Bill to be reactionary, and to be calculated to arrest the development of our towns, and to put a stop altogether to the improvement of agricultural holdings. I fully accept the doctrine laid down by Mill that the ownership of the land should be subordinate to the general policy of the State, and I differ from hon. Gentlemen opposite who deny that land is essentially different from other kinds of property. I believe myself that from the nature of things, as is admitted by all thinkers and economists, there is a fundamental difference between land and all other kinds of property about which it is not necessary to debate; and I go further and say that I know from my own experience, municipal and Parliamentary, that there is a large unearned increment due to the growth of the community. I do not think it goes to the extent pointed out by the hon. Member for Poplar (Mr. Sydney Buxton). All increment is not unearned, as he seems to imagine. A great deal is earned by the energy and industry of the small tenants and householders who have spent their lives in creating a value which has nothing whatever to do with the movement of population, and by the work of many who have themselves attracted the population, the movement of which is made one of the elements of valuation under this Bill. But with the unearned increment the Bill will not deal. The Bill engages Municipal Bodies in some isolated gambling transactions in land. It does not enable them to take the increased value of the property from time to time. It plunges them in the gambling of Tokenhouse Yard in competition with land com-

    97
    panies and with individuals. Sometimes they may make a good shot; more often, as experience points out, they will probably make a bad one. We know that the hon. and learned Member (Mr. Haldane), who introduced this Bill, is a very bold and uncompromising legislator. The House will recollect, from its recent experience, that the last measure which came from him was one to render women eligible for the office of Commander-in-Chief. This Bill which he introduces to-day will make it impossible for any person to occupy his home, to carry on his business, or to earn his livelihood without the leave or licence of the Local Authority, the County Council, or the Municipality. From all I have been able to learn, this Bill has a somewhat different origin from that supposed by hon. Gentlemen opposite. It comes, I believe, from a well-known body of "Possibilists," or Progressive Socialists, the Fabian Society, of which I think my hon. and learned Friend (Mr. Haldane) is one of the chief priests. (Mr. HALDANE: NO.) I only know that this Bill is adopted by them, and that they oppose it to the measure of leasehold enfranchisement. My hon. and learned Friend very wisely and skilfully glided over the effective provisions of this Bill, and I wish to draw the attention of the House to the distinction between the objects stated by the hon. Member and the means as interpreted by the clauses. He told us that the land was to be taken, if required, in the interests of the population. There is not a word in the Bill about the community in that sense. He said it was partly done now for public purposes, and I am fully aware that land is taken for public purposes under Private Bills. (An hon. MEMBER: And by Provisional Orders.) He said it was done in the interests of public health, and I know there are several Public Health Acts, including two for London. Under one of these, the Housing of the Working Classes Act, which contains the best terms ever yet accorded to a Public Body when it is a question of public health, the Local Authority may take land and refuse to pay the owner for the additional value which he derives from keeping it in an insanitary condition, thus trading on the misery of the tenants; and the other Act empowers the Local Authority to put houses into a
    98
    sanitary condition at the cost of the owner. This Bill absolutely destroys all security of tenure. I should like to know how any person would spend anything on his home, when at any moment for a period of 20 years the County Council may send their officers to purchase and take possession? My hon. and learned Friend knows that the copyholder at one time "could not eat, drink, and sleep securely," and that is the condition to which he seeks to reduce every inhabitant of a corporate town, whose only resort in such a case would be to arbitration for compensation. There is a great deal, after all, in the sentiment of property, but there will be no compensation for the sentiment of "home," and I doubt whether there would be any compensation for the loss of that trade and goodwill which a person may have done a good deal to make, and which has increased the prosperity of the neighbourhood. There is a provision giving compensation for disturbance, but will that cover the case of the tradesman who has not yet reaped the full meed of all his efforts, and whose business may be in a more or less transient condition, although he may have expended large sums with the view to future business? Then I deal further with this question of valuation, and I ask any hon. Member who has had experience of municipal government whether he believes that in fixing the rateable value the Committee that goes round, assisted by experts, is in the habit of defining how much exactly of the rateable value is due to the movement of population. The building is valued as a whole. I admit that some surveyors said in evidence that in their own minds they did separate the land from the buildings, but I never heard any of them say that they attempted to define how much of it was the unearned increment, and how much the increment earned by the efforts of the tenant But of course that is a practical difficulty which the hon. Member may think he may be able to get rid of by a re-assessment of the whole country. But then let me deal with the absolute improvement. What is the improvement of a house? It may add considerably to its value in the eyes of the owner, but it is very often doubtful whether it adds to its letting value. An

    99
    artist adds to his house a large studio; he receives notice from the County Council that he will be turned out. Will he get any compensation for that? Will they allow him the expense to which he has been put for light, and all the purposes of his calling. They cannot do it under the Bill, and I venture to say that that artist would not receive much satisfaction from the thought that the Municipal Body would receive the reward if they were able to let the house at an enhanced rent to another would-be tenant. It is an adage in law that a man's house is his safest retreat. Under this Bill no man could be safe in the occupation of his house; and I oppose this Bill most strongly, because I think it should be the aim of all land law reformers to increase security of tenure more and more to identify occupancy with ownership. This Bill does all it is possible to do to render occupancy and tenancy as unstable and as transitory and as uncomfortable as they could be made. The hon. Member objects to our talking of the possibility of jobbery arising under the Bill. I do not wish to use the word "jobbery." But unfortunately in London we do not think ourselves free from the suspicion of jobbery. The London County Council takes every means of avoiding suspicion. This Bill will plunge County Councils in a Serbonian bog of land speculation. It is a question whether land speculation in this country has been profitable. I ask the hon. Member to take the case of the great Land Companies working in and around London. They purchased in the open market land which they felt sure from the conditions of the neighbourhood was likely to considerably rise in value within a short period of time. Some of these companies are in liquidation; others pay dividends of one or two per cent. Does the hon. Gentleman think it would be to the advantage of Municipal Bodies to embark in such a speculation? They could not buy under such advantageous conditions as the land companies, because they are forced to buy compulsorily under the Lands Clauses Act. The right hon. Gentleman the Member for West Birmingham (Mr. J. Chamberlain), giving evidence before the Housing of the Poor Commission said that Birmingham paid thirty-three per cent. over the market value for land, taken for
    100
    the purpose of municipal improvement. I But I daresay the hon. Member would I like to hear something of the experience of our own Council in London which has gone in for land speculation in the past, and which has taken a great deal of land abutting on new thoroughfares and likely to increase enormously in value on account of public improvements. I quite admit that the hon. Member for Poplar (Mr. Sydney Buxton) was absolutely right when he said there has been a great increment of value on the frontages on account of public expenditure, and therefore it is the more striking to point out that in every case but one there has been an actual loss incurred by the method of recoupment over and above the cost of the work. I have a paper that was handed in to the Strand Betterment Committee, and from it I take the case of Charing Cross Road. Charing Cross Road was a thoroughfare pierced through the slums, and there were new lines on either side which you would have thought would have attracted a different class of buildings and led to the expenditure of capital in building fine houses, and, of course, it made an immense difference to our municipal revenue. As actually carried out the amount of compensation paid was £691,000; the amount realised by sale of surplus, £180,000; the net cost being £510,000. If only the property actually required to form the street had been taken the amount of compensation would have been £478,000; the amount realised by the sale of surplus, £55,000; and the net cost £423,000—or a loss of £80,000 by pursuing the method of recoupment and compulsory purchase by the Corporation. In the case of Shaftesbury Avenue, though the figures were not quite so significant, the result was the same. The only case in which the London authorities have reaped any benefit by buying land for the purpose of recoupment when they have made public improvements is the notorious case of Northumberland Avenue, where, the gardens of the Duke of Northumberland being uncovered, there was no compensation to be paid to the multiplication of interests that always arises in the case of buildings. In that case there was a surplus of £130,000. That is the net result that can be set against, the 25 great schemes carried out in

    101
    London by the method of recoupment. The advice of Mr. Charles Harrison, the Chairman of the Finance Committee of the London County Council, is very important from our point of view. He was asked, before the Strand Betterment Committee, whether this had been his experience, and he said—
    "A very curious set of results is shown by the table presented. I was alluding to the artizans' dwellings scheme first. There was a statement of the artizans' dwellings scheme under the Cross Acts. They give the list there—the amount paid for compensation in the whole of these schemes was one and a half millions in round figures. The other payments were £330,000, so that the gross cost was £1,850,000. The value of the land obtained was £365,000, and the net cost £1,483,000, and the recoupment is given in. The Chairman: Q. I am asking you upon the broad principle of recoupment—do you say that there is no necessity for recoupment because, in the case of land purchased for artizans' dwellings, which is in no sense a public improvement of thoroughfare, which is simply displacing workmen's houses and putting other houses upon that site, and which other houses will have a letting value, of course, which is not mentioned here—do you say the principle of recoupment should be abandoned where a street improvement is carried out? A. My own opinion is decidedly that it should. You find the recoupments, as far as we have been able to ascertain them, have invariably brought back a comparatively small sum of money in most of the cases compared with the outlay, and that it has not resulted in a profit. The net result is that the more land you take the more you lose."
    The experience of Liverpool affords another instance of the failure of municipalities to make a satisfactory profit out of their estates. I maintain that the difficulties surrounding Municipal Corporations as landowners are many and insuperable, and I do not wish to see our authorities "jobbing" in land. I think it would be a disastrous failure, even from the financial point of view. If there is unearned increment to be intercepted, let us fall back upon the methods of taxation, upon the division of rates and upon a municipal Death Duty, for example, which will give the locality a certain share in the unearned increment as real estate passes from possessor to possessor. This was Mill's principle. The Bill is really not a Bill to enable Municipalities to obtain any large portion of the unearned increment. It is a cumbrous and fantastic way of dealing with the subject; it is an attack upon the whole principle of private property in
    102
    land. I, for one, think it should be the object of all land reformers to put it within the grasp of every class in the community to secure possession of the great immovable land. It is because I feel that this Bill is vicious in principle, and absolutely unworkable, especially with the governmental restrictions inserted by my hon. Friend, that I intend to vote against it this afternoon.
    MR. ASQUITH: The three hon. Members who have addressed the House in opposition to the Second Reading of this Bill commenced their observations by stating that they looked upon it as a joke; and, under those circumstances, I think they ought to be congratulated on having succeeded, without apparent difficulty, in treating it so seriously and at such great length. It has been refreshing to some of us to hear this afternoon, in these days of Democratic Toryism, from the hon. Member for Peckham and the hon. Member for St. Pancras, the old story about the rights of property, about the dangers and risks of invading them, and about the indefeasible sanctity of any law which happens to exist, even though it places the community at the mercy of individuals, and even though it may be proved to demonstration that the community at large is suffering grievously from what those individuals have done. The hon. Member for Peckham told us that property consisted in an established expectation. An established expectation of what? Apparently, according to the bon. Member, an established expectation that the law will never be changed. But this House has been engaged during the last fifty years in disappointing established expectations of that kind and in doing what the hon. Member and his predecessors, both leaders and rank and file, call legalising confiscation. There has not been a single great measure, from the time of the abolition of the Corn Laws down to the Irish land legislation of the right hon. Gentleman the Member for Midlothian, that has not been denounced in exactly the same terms and ridiculed with exactly the same unction as this Bill has been denounced and ridiculed this afternoon. I do not think that some hon. Members have quite realised the scope of this measure. The framers of it have two objects in

    103
    view, which are perfectly distinct, although they may be combined. The first object is to enlarge the powers of Local Authorities to purchase land in the interest of the people they represent; to restrict the compensation payable to the vendor to such sum as will, at the moment of purchase, represent its market value as between a willing buyer and a willing seller; and to give him, in addition, a complete indemnity against all damage that he can show he has actually sustained. The second object is to enable the community to appropriate for its own purpose, and for the relief of public burdens, that share, and that share only, of the value of land which, after the passing of this Bill, can be shown to accrue, not from the efforts or the exertions of the owner or occupier, but from the growth of the community or from other social causes, and of which at the present time the owner, and the owner alone, reaps the exclusive benefit. Now, let me deal briefly with these two points. In the first place, I say that the object of the Bill is to enlarge the powers of Local Authorities to take land. In every respect I differ from the arguments of the hon. Member for St. Pancras in regard to this part of the case. The Bill, although it takes a step in advance, involves nothing in the nature of a new legislative departure. The President of the Local Government Board knows very well, and most hon. Members must know, that every Urban Sanitary Authority in England has at present the power of acquiring land compulsorily for sewerage and drainage works, for street improvement, for parks and pleasure grounds, for the erection of markets, the construction of baths and washhouses, and a multitude of other subordinate purposes of local interest; and also where a Local Authority has obtained powers from Parliament to supply gas or water, or to construct tramways, for the purposes incidental to such undertakings. Therefore we are not asking the House to initiate a new experiment, but to proceed upon lines which have been established during the last fifty years, and which—differing here, again, from the hon. Member for St. Pancras—I venture to think have been abundantly justified by their success. I challenge contradiction, on evidence supported by instances, to this
    104
    broad and general proposition which I do not hesitate to assert—that the Municipal Authorities of this country, working as they do in the light of day, responsible to their constituents, subject to searching and sleepless criticism from public opinion, have amply justified the confidence with which the power of acquiring and dealing with land has been entrusted to them; and there is no ground for fear or apprehension that if these powers are enlarged, and the area of operation is extended, they will show themselves more indifferent to the public interest or more susceptible to corrupt influences in the future than in the past. Now, it is perfectly true that this Bill does make a change, for whereas, under the present state of the law, land can only be acquired by Public Authorities for certain specified statutory purposes, this Bill proposes to give to the Local Authority a general power of acquiring land wherever it is necessary in the interest of the people it represents. In our judgment that is a change not only in harmony with past legislation, but it is necessitated by the growing and shifting economic and social conditions of our large towns. Let me give an illustration showing how a Local Authority, if this Bill were passed, could deal with a matter of great urgency with which it cannot now deal. The case I will take is that of a comparatively small but increasing town, which has become the seat of an industry, or has been resorted to for the purposes of pleasure and recreation. The land of the town and its immediate environments belongs, to a single person. That person, from good or bad otives, does not wish the town to extend, either because he desires to preserve the amenities of his property, or for other reasons. He says—"I will not let you have the land; or, if I do, it shall be only on my own terms," which may be unreasonable or exorbitant. Instances of this kind have been stated in the House. Now, is the House, with the experience we have had of Municipal Government, to allow private property in land to be carried to such a length that the whole growing life and development of a community is to rest upon the discretion of a single person, who may be wise, but who may be foolish; who may be public-spirited, but who may be altogether unfitted for the discharge of

    105
    the responsibilities of the position in which he is? There is also another case in which the hon. Member for St. Pancras is interested—the short leasehold system which has done so much injury to London. I did not vote for the Leasehold Enfranchisement Bill which the hon. Member introduced, because I saw no advantage in substituting for a small body of large landowners, who from the fewness of their numbers and the weakness of their position are more or less amenable to public opinion—in substituting for them a large body of small landowners who could deal with the land as they pleased, and who were absolutely unrestrained by any public authority. Now, this Bill will enable the Local Authority to get rid of the system of leasehold tenure in towns where it is injurious. It will enable it to re-sell the land, or let it, or feu it out on reasonable terms, with adequate security of tenure, and subject to proper restrictions. There is one other point I will refer to, and that is the question of compensation. Those who read the Bill will see that the compensation which it gives to the vendor whose land is taken is everything he is entitled to. A part from the valuation provisions, with which I will deal later, whenever the land is purchased he will get the market value of it at the time of purchase; and he will get, in addition, compensation for disturbance. Further compensation will also be paid for severance. Will then anyone say that the provisions of the Bill do not give everything which the owner is entitled to expect? We all know that Public Authorities are in the habit of purchasing land at extravagant prices. My right hon. Friend the Member for West Birmingham has been quoted as having put the excess of purchase money in transactions with which he has been connected in his public capacity at something like thirty or thirty-three per cent. over a fair value. That is a monstrous tax upon the community. It is due to two things. In the first place to the fact that the machinery of compensation is defective, seeing that you have to come to Parliament for a special Act, or even, under the Public Health Act, after the Local Government Board has given its sanction for a Provisional Order. Under this Bill you would do neither. Further, the
    106
    cost to the community of making these advantageous works of public improvement has been enormously enhanced by the excessive prices you have had to pay in the form of compensation for compulsory purchase to the owner from whom the land has been obtained. Where it is to the interest of the community that the Local Authority should obtain the land, we say that if the Local Authority is prepared to pay the full value with indemnity for loss sustained, that is going quite as far as justice requires. I pass from that to say one or two words as to the other branch of the Bill—the provisions dealing with the unearned increment. The hon. Gentleman the Member for Peckham (Mr. Baumann) denied the existence of the unearned increment, or at any rate, if he did not deny its existence, suggested that it existed in exactly the same degree and kind in the case of all other forms of property.
    MR. BAUMANN: Hear, hear!
    *MR. ASQUITH: I do not know whether my hon. Friend the Member for St. Pancras says likewise?
    MR. LAWSON: I do not.
    *MR. ASQUITH: He does not; but since the argument has been advanced, and since it appears to be supported by a considerable amount of opinion on the other side of the House, it may be worth while pointing out its fallacy. The hon. Member for Peckham referred to Consols. He took the case of a person who had bought Consols at 80 or 90, and had seen them rise to 100, which, I suppose, he regards as unearned increment due to the progress of society. ("Hear, hear!") I thought so. What is the difference? The person who buys Consols at 80 has the right to receive the sum of £3 per year, and when they have risen to 100 he has still the right to receive £3 per year, but not one penny more. The only difference that has taken place is this—that an annual return of £3 is worth so many more years' purchase after Consols have risen than before. Yes, but what is the case in relation to land? Why, that not only does the capital value of the landowner's land rise in the number of years' purchase, but that the annual income itself rises. He is able to let his land not for £3, but, say, for £30 per year, and even after he has got that he is able to sell

    107
    that annual income of £30 at an increased number of years' purchase. Therefore, I say that the suggestion of the hon. Gentleman is not to the point. Then, take the case of industrial companies. The hon. Member says that we are all, as shareholders or as deriving profit in some form, participators in the unearned increment. To some small and indefinable extent, that may be so. But there, again, the hon. Gentleman mistakes, or fails to observe, the fundamental difference between the two cases with which he is dealing. Land differs from every other kind of property, and the owner differs from every other owner in this respect—that land is strictly limited in amount; that the owner possesses a monopoly; that there is no effective competition between him and other vendors of the same commodity, and that, therefore, he is able to demand what is practically a monopoly price. I am speaking of urban land. The case is not similar, I admit, with regard to agricultural land; because, owing to the abolition of protection and the devolopment of the means of communication, we have, practically, a number of alternative sources of supply in relation to food. But when you are dealing with land as a site for human habitation and residence—and particularly land in and about great towns—it remains true, and will always remain true, that the owner of land enjoys a strict monopoly; that there is no alternative supply from which the demand can be met. The more population increases, the greater is the gravitation towards these centres of industry; and he, without raising a finger by way of effort or exertion, without even observing the virtue of abstinence, of which we read in books of political economy, while doing nothing, is exacting from the community that which, in the form of increased value, is neither more nor less than a toll on the progress of the country, and—

    SUSPENSION OF MR. CUNINGHAME GRAHAM.
    MR. CUNINGHAME GRAHAM[Interrupting]: Perhaps the hon. Member will explain how shareholders in swindling companies— ("Order!") Oh, I am not going to be put down. ("Order!" and "Name!")
    108
    It is a matter of no importance to me whether I am named or not.
    *MR. SPEAKER: Order, order!
    MR. CUNINGHAME GRAHAM: What I want to know is, how do swindling shareholders in a company derive their funds? ("Order!" and "Name!")
    *MR. SPEAKER; Order, order! The conduct of the hon. Gentleman is such that I must name him to the House. I name you Mr. Cuninghame Graham.
    MR. CUNINGHAME GRAHAM:: All right! I am simply named for standing up for Socialism in this House in the face of a swindling speech endeavouring to draw ridiculous distinctions. That is why I am named.
    THE SECRETARY OF STATE FOR THE HOME DEPARTMENT (Mr. MATTHEWS,): I beg to move, in the terms of the Standing Order, that the hon. Member be suspended from the service of the House.
    MR. CUNINGHAME GRAHAM: Suspend away! (To Sir J. Lubbock, London University, who had spoken to the hon. Member): Oh, leave me alone; I do not care a damn. ("Order!")
    *MR. SPEAKER: The Question is, "That the hon. Member be suspended from the service of the House."
    Question put, and agreed to.
    Resolved, That Mr. Cuninghame Graham be suspended from the service of the House.—(Mr. Matthews.)
    Mr. SPEAKER then directed Mr. Cuninghame Graham to withdraw.
    MR. CUNINGHAME GRAHAM: Mr. Speaker, in withdrawing I wish, to apologise for the discourtesy to you; but I wish also to say that I consider I am suspended for standing up for Socialism. I shall be glad to argue that question in the Park with 100,000 men; but this House is a swindle on them.
    The hon. Member then withdrew.
    Debate resumed.
    *MR. ASQUITH: I was endeavouring, when the hon. Member intervened, to point out that there was a substantial distinction between the unearned increment in the case of land and of other forms of property. The increase in value of rateable

    109
    property in London cannot be accounted for in any other way than by the increase of population. The gross rateable value of property in the Metropolis has risen, in twenty years, from £22,000,000 to nearly £40,000,000 a year; and although it may be true that during the time of that increase many buildings have been erected and street improvements made, nothing which has been done in that way can account for the enormous enhancement in the value of property in the Metropolis. To account for it we have to look to the ever-increasing aggregation of population, which has enabled the landlord to appropriate to himself the increased value he has done little or nothing to create. That being so, the question is, whether the unearned increment is or is not to become the property of the community? We say that it should; hon. Members opposite say that it should not. There a clear issue is raised, and it is upon that issue that the Division upon the Second Reading of this Bill will take place. I will now say one or two words as to the machinery of this Bill, to which so much criticism has been directed. I do not at all agree with my hon. Friend the Member for St. Pancras that the power of valuation given by the Bill, coupled with the power to purchase during the 20 years succeeding the valuation, will create a state of insecurity under which neither owner nor occupier of property will be able to make such use of it as he ought to be able to make in his own interest. My hon. Friend has failed to ob-observe, or, if he has observed, has failed to give weight to the fact, that for everything which is done during the interval elapsing between the period of the valuation and the ultimate purchase, either in the way of improvement or in the way of judicious management, full compensation is to be made. The only thing for which compensation is not to be received is that part of the added value which is due to the progress and the growth of the community. Therefore, it is absurd to say that a man whose land has been valued will be in the least degree prevented from making use of it and developing it by getting tenants to occupy. He will be in exactly as good a position as if a Railway Company were to purchase his land, subject only to a
    110
    difference in the measure of compensation which this Bill introduces. The fears that are founded upon the uses of that machinery appear, when carefully examined, to be altogether groundless. My hon. Friend has spoken as if the effect of this measure would be to plunge the Local Authorities of the country into land speculation. It will do nothing of the kind. He referred to the experience of the land companies in and about London, which paid very small dividends, and then went into liquidation. Those land societies, so far as I know anything of their operations, are companies which not only speculate in land as a thing to be bought and sold, but lay out and develop the land for their purposes, and sink a considerable amount of capital in these preliminary works, which, if they have mistaken the market, or if the site is unfortunate for the operations, result often in failure and disaster. It will not be in the power of any Local Authority under this Bill to indulge in operations of that kind. All it can do is to purchase land as required for public purposes, to value other land—a value to be confirmed by the Local Government Board—indicating thereby that the land so valued is likely to be required in the interests of the community, and that, therefore, the additional value which will arise in the interval from the growth of the community will belong, not to the owner, but to the community. Those are the proposals of the Bill. They do not in the least degree militate against any other plan which maybe proposed for what I may call tapping the unearned increment; but they will have the effect of securing to the community that which is part of its own patrimony, that which is now diverted into other hands and to other purposes, that which the community creates, but of which it reaps none of the fruit.
    MR. AMBROSE: I always understood that the object of a Government was to protect individuals in the enjoyment of their property. For my own part, I am not, like my hon. and learned Friend the Member for East Fife (Mr. Asquith), able to distinguish between individuals and companies, because in my view the happiness and welfare of the community are best maintained by securing the rights and

    111
    welfare of the individual members of both. My hon. Friend suggests that there is a difference between unearned increment on land and on other property. He took the case of Consols, and attempted to point out the difference. I propose to deal with that portion of his argument. He says the difference in Consols is, that if Consols bought at 80 rose to 100, the holder would only get the £3 per year—that there would be no difference in the income. But where do you get the £100 for that which has cost £80? He has admitted that the cause is the increase in capital value. He says, too, that you get an increase in the value of the land. Why? Because the capital value of the land has increased. Therefore in both cases the increment arises from an increase in the capital value. The same point arises with reference to industrial undertakings. In each case the increment depends upon circumstances which are altogether beyond the control of the owner. The truth is that money is the representative of all kinds of property, whether it be land or anything else, and that contention can have no better test than the ease with which money can be converted into land and land into money. This Bill has been discussed as if it were a mere question affecting the owners of the land, but it is not so at all. One of its principal points has reference to the ratepayers, because it empowers the County Councils to take any land they may think proper. Under this Bill the County Council would have power to take any property they wished. But where are they to get the money from? I know of no powers under the Local Government Act of 1888 for raising money for such purposes as this, either from borrowing, or from the rates. But I do not lay much stress on that point, because the Bill might be amended in that respect in Committee. What about the ratepayers? Are we to allow County Councils, by dabbling in land speculation, to increase the rates that had to be paid by those who elect them? Surely the people of this country are taxed enough now, and it is not right that they should be exposed to the risk of increased taxation to enable County Councils to indulge in fantastic schemes such as are suggested by this Bill. The
    112
    Councils will have to pay the full market value of the land, and they may have to bear the expense of assessing the value, which will largely add to the price. And suppose the County Council make a mistake; if, instead of improving in value the land deteriorated, who is to bear the loss? I suppose it is to fall on the ratepayers. Mr. Speaker, it is no part of the duty of Government to make speculations of profit and loss, with a possible loss that may fall on the ratepayers. A ratepayer pays his rates to maintain the necessary authority for doing the work of the parish or district, and there is no obligation upon him to find money to enable the County Council or any other Local Authority to indulge in schemes of this kind. I contend that the principle of this Bill is entirely new, and that no analogous case has been quoted as a precedent. If anyone could make out a case for the Bill, I am sure the hon. Member for Fife (Mr. Asquith) could, but he has been unable to do so. The hon. Member for Haddington (Mr. Haldane) started with the case of Lord Cairns' Bill for the amendment of the law relating to settled land, but under that Bill the rights of the remainder-man had to be preserved, either in money or land. The other case quoted by my hon. Friend is that of railways. But in the case of railways, the necessity for the land proposed to be acquired compulsorily has to be proved before a Committee of the House of Commons. A specific case has to be made out, and upon that the House gives the necessary authority. Again, in taking powers for the construction of artizans' dwellings, proof has to be given of a distinct neglect of duty on the part of the property owner; and in all cases where land is taken for drainage and other purposes, under the Sanitary Laws, application has to to be made to Parliament for a Provisional Order. I contend, therefore, that my hon. Friend is in error when he says there is a precedent for the principle contained in this Bill. But the worst part of the Bill seems to be that which deals with the question of the land-charge. Let hon. Members consider for a moment what will be the effect of having a land-charge registered against any particular property, under any circumstances. Why, Sir, it will be putting a dead hand upon the property, and

    113
    sacrificing it, at all events, for 20 years. How could the owner deal with it? If he wanted to sell it he might get less—certainly not more—than the price fixed upon it by the County Council, and in addition to that his power of borrowing money on it would be greatly reduced. Supposing the owner wished to develop the property, and incurred considerable expense in making streets and laying down drains, and erecting houses. What then? "Oh," say my hon. and learned Friends, "he is to be paid for all that. That is to be taken into account when the County Council acts"! But, Mr. Speaker, it may happen that the owner may lay out a great deal of money, and that there may be no unearned increment arising from it. Instead of being successful, the development may be an entire failure. He may lay out the streets and fail to sell the land on either side, or he may erect houses and not be able to let them. In that case the Council may leave the property on his own hands; but if there should be an increase in the value of the land, the Council might come in and claim the result of his improvements as unearned increment. Mr. Speaker, there is a fallacy underlying the whole of this talk about unearned increment. The prospective value—or unearned increment, as it is called—really constitutes a part of the present value, and this is a point well known to every person accustomed to the valuation of land. You never can assess and arrive at the real value of a property unless, and until you take into consideration the possible future of that property, which is the unearned increment some hon. Members opposite have been discussing. Take a foal for example, which has a pedigree, and concerning which great expectations may arise when it shall have grown to maturity. Are you to fix the value of that foal by its capacity as a foal? No one in his senses would think of doing so. You consider what it may do in the future, and in that way the prospective value is taken into account. It is the same in the case of land. Well, if there is one thing we may congratulate ourselves upon, I think it is this: We have heard the hon. Member for West St. Pancras (Mr. Lawson), who is great on leasehold enfranchisement, and we have heard the hon. Member for Haddington
    114
    (Mr. Haldane), who is opposed to leasehold enfranchisement. The Mover of this Bill condemns the scheme of the hon. Member for St. Pancras, and the hon. Member for St. Pancras condemns the scheme of the hon. Member for Haddington. Well, I think we shall agree that both the hon. Members are right in condemning each the scheme of the other. With these remarks, Mr. Speaker, I shall have great pleasure in supporting the Motion of the hon. Member for Peckham (Mr. Baumann).
    MR. C. S. PARKER: I rise to support the Second Reading of this Bill upon the grounds which were eloquently and very discreetly stated by the hon. Member for Fife (Mr. Asquith). He so well submitted to the House the strong arguments in favour of the first part of the Bill that I shall not waste time in going over that ground again. But I should be unable to support the Bill if I had not this opportunity of saying that I am opposed to the three or four clauses dealing with unearned increment. As some hon. Members whose names are on the back of this Bill have still to speak, I hope they will give us a satisfactory reply as to whether they are not under a grievous fallacy in regard to the operation of those clauses. I understood the Mover and others to say that, however averse they might be to unearned increment, they are not prepared to meddle with the past. But my point is that they do meddle with the past, because, as the hon. Member who has just sat down has argued, there can be no doubt that in fixing the present value of land an expert valuer takes into consideration its prospective value. The County Council asks what is the value of certain lands. The valuer replies, naming a market price which includes the prospective value; but the County Council then has the option of purchasing immediately, or at the end of five, ten, or 20 years. Well, Sir, for argument's sake I will take a simple case, that of land in the City of London, where, as has been shown, it is rapidly rising in value. For simplicity I will assume that the owner makes no outlay in the meantime. Very well, the land may be valued at the present time at, say, £10,000, and in the course of 20 years it may be worth double that sum. Surely the owner has a just claim to sell at the present valua-

    115
    tion. But if the County Council, instead of taking the land as valued or leaving it, can hang it up for 20 years, and the owner goes into the open market to dispose of it, I say he can no longer get £10,000 for it, because it has been deprived of part of its prospective, and, therefore, of its present value. I think that is an inconsistency in the Bill, and I challenge hon. Members supporting it to say whether they do or do not intend it to interfere with unearned increment already accrued. My hon. Friend the Member for Poplar says there is no proposal in the Bill to take anything from anybody to which he has a just claim. Well, I contend that if the County Council wishes to buy land, the owner has a just claim to the increment already accrued, yet these clauses would take it from him. I distinguish, however, broadly between unearned increment and betterment. I do not know how far the right hon. Gentleman opposite has committed himself to that principle, but I think it is a fair one if properly defined. If Public Bodies expend public funds on improvements, which will be greatly for the good of private persons, I think it should be arranged so that a portion of the cost falls, say, by way of a special rate, upon those who are thus benefited. But that is altogether a different case from that of unearned increment. I will not detain the House longer, but I hope that hon. Members who are supporting this Bill, will explain whether they do, or do not, propose to interfere with the increment already accrued.
    SIR G. RUSSELL: The hon. Member who has just sat down was apparently prepared to support the outside of the Bill but not the inside, but as the inside is virtually the whole of the Bill I really do not see how he can support any part of it. Not a few hon. Members have been disposed to treat this Bill as a joke, and I am not surprised at that; but I must say that it appears to me not only to be a joke, but a very bad joke, and I should almost be disposed to consider it a practical joke if there were anything practical in the Bill at all. The hon. Member for Peckham told me last night for the first time of the existence of this Bill, and when he told me what were its provisions, I was
    116
    unwilling to believe that he had arrived at a correct estimate of them. I have now, however, satisfied myself that he was correct, and having done so, I looked to see who were the Gentlemen who were interested in this extraordinary Measure. I find that they consist of three Scotch Members, two philosophers, and one English County Member. As regards the three Scotch Members, I would remark that the only sensible clause in the whole Bill provides that it shall not extend to Scotland. As regards the two philosophers, I will content myself with saying that England never has been, and I am perfectly confident never will be, led by philosophers. With respect to Sir Edward Grey, I have the greatest respect for him as bearing a name honoured in this House and in this country, and I can only imagine that being the Member for Berwick, which is so near Scotland, he believed, when he put his name at the back of this Bill, that he was a Scotch Member. We have heard a great deal this afternoon with respect to the operation of this Bill in urban districts, and I, as a County Member, should like to say something with respect to its effect in the counties. As a matter of fact, under this Bill the whole of England could be scheduled, and if land were hung up in the manner that is suggested, no landlord would expend a shilling on the property so hung up, no tenant would dream of renting such land, and anything more disastrous to the productivity of the land of this country, if this measure became operative, I cannot imagine or conceive. There is one portion of this Bill which hon. Members seem disposed to glide over as if they do not like it. The hon. Member for Fife (Mr. Asquith) gave a sort of veneering aspect of seriousness to this preposterous and ridiculous measure; but I should like to ask him, as a practical question, how he would like some Society, like the Incorporated Law Society, to have power to-morrow to value his practice with a view to purchasing it, at that price, at anytime within the next twenty years. How would he like to have his income fixed at its present rate by Act of Parliament for the next twenty years? I expect he would not like it at all. And we do not like it, and on that ground we intend to fight against

    117
    this measure. The great inducement which is held out to hon. Members on the other side to support this measure is that it introduces their pet and favourite principle of compulsion. Nothing will go down now with them but compulsion. They will not let me be sober of my own free will and choice; I am to be sober by Act of Parliament. They will not let me sell my land of my own free will and choice; I must sell it by Act of Parliament. They will not let me work as many hours in the day as I please; must have my hours limited by Act of Parliament. In the whole range of public questions I only know of one on which the new fashioned Radical has adhered to the old principles of liberty and freedom, and that is the one single question in which compulsion ought to be applied—the vaccination question. I will give them the credit that they do remain free traders in small pox. But with that one isolated exception they introduce compulsion into everything, and it has found its way into this ridiculous measure which has been introduced today. It has been said that this measure is a joke. I should like to hear the right hon. Member for Derby (Sir W. Harcourt) in his most jocular spirit dealing with this measure. It would be a real treat. He would make it a hundred thousand times more ridiculous than I can make it appear, and he would possibly make it appear even more ridiculous than it is. I hope it will be rejected by a large majority, for it is a measure which deserves to be kicked out with ignominy and contempt.
    SIR E. GREY: I am perfectly willing to admit that it is a failing on the part of any person who is unable to see a joke where one exists, and I honestly admit that I do not see a joke in this case. But I think there is one thing worse than failing to see a joke, and that is seeing a joke in a serious matter. Opposition has come to this Bill from several quarters. It has been complained that my hon. and learned Friend who introduced the Bill (Mr. Haldane) dealt too much with general principles. I am glad he did, because it has brought out clearly the fact that the great difference between us and hon. Members on the other side of the House is on general principles. They maintain that the land is to be treated
    118
    just like any other commodity, and they maintain that the unearned increment is to go into the pockets of private individuals. I think that is not an unfair construction to put on the argument of the hon. Gentleman who moved the rejection of the measure. At a time like this, when the great question which is agitating the popular mind is that of the condition and profits of the ownership of land and the general distribution of wealth, it is impossible that the question of the land can do otherwise than receive its full share of attention. It is as important as capital, and is discussed enough in connection with the profits arising from it. It is as necessary to industry, and it is fixed, and thus offers facilities for treatment in a way that capital does not. It is limited in quantity, and comes under a category which this House has always considered worthy of special treatment. The Member for East Down (Mr. Rentoul) seems to think that land is like goods in a shop window, which can be increased at pleasure. If the hon. Member has not got beyond that point of view, it is not possible for him to understand the reasons that have induced us to bring forward this Bill.
    MR. RENTOUL: The hon. Member says I referred to the goods in a shop window. I said nothing of the kind. I referred to a newspaper, or to the practice of a solicitor or a doctor in a growing town.
    SIR E. GREY: I will take the case as the hon. Member puts it now, and speak of a newspaper in a growing town. In a town where land is rising in value, and a newspaper is rising in value, the increase in value does not necessarily arise from the same cause. The land may have been lying idle for years. It may be a rubbish heap, and no money have been spent on it, and yet, because of surrounding conditions, the land may have increased in money value. But the newspaper if it has risen in value, however greatly the population of the town has increased, must have had expended on it industry and ability, and that is the difference between the two cases. The hon. Member asked also where was the demand for this Bill. I believe he is in the habit of addressing popular audiences, and I cannot understand how it can have escaped his atten-

    119
    tion that nothing excites more interest with popular audiences than the question of land reform. There is a great desire for it, and it is as wide-spread as any feeling can be. Many schemes of land reform are brought forward, and it is not enough for us to content ourselves with criticising schemes for land nationalisation, and with saying that many of these schemes are crude, unworkable, and unjust. It is our business to bring forward better considered, more matured, and more equitable measures. The business of Members of Parliament is not to wait till a popular demand has arisen for some particular Bill, but to recognise the difficulty which the public mind feels in dealing with such measures, to elucidate and elaborate the details, and put them into practical and workable form. That is why this Bill has been brought before the House. The second principle contained in this Bill is that we wish to extend the public ownership of land. I quite admit that private ownership of land has served many useful purposes. But the most useful purpose is that it develops energy and enterprise in the cultivation of the soil perhaps better than public ownership can do. But the land has ceased to be wanted solely for agricultural purposes, and it is when it is wanted for purposes other than agriculture that this Bill will come into operation. The hon. Member for St. Pancras (Mr. Lawson) seems to regard Public Bodies as in some way hostile to the community at large, and intimated his belief that they were the worst owners of land that could exist.
    MR. LAWSON: I did not say so.
    SIR E. GREY: I understood him to say that public ownership of land, so far as it had been tried, was unfortunate, and I read somewhere the other day a remark of his that Corporations were about the worst owners of land it is possible to find. I think we ought not to be guided entirely by the experience of the past. Local Authorities are developing in life and energy every day, and public opinion is developing and paying more and more attention to the action of the Local Authorities and founding greater hopes and expectations on the work of the Local Authorities. I do not mean the public feeling of the moment, but that steady and con-
    120
    tenuous feeling which is turning more in the direction of the Local Authorities. Look, for instance, at the election for the London County Council the other day, when a large Progressive majority was returned. What did that mean? We are told that many persons who are by affinity and for Party purposes Conservatives, and who are prepared to vote for Conservative Members at a Parliamentary election, had yet voted for Progressive members of the County Council. That means that they have overcome their natural affinity, because they are interested in the scope of their own Local Authority, and that that Local Authority has attracted to itself men of enterprise and ability, who possess the confidence of the community. Surely this is the time when we ought to give Local Authorities more power, and I maintain that this Bill will place in their hands a power which will stimulate public interest in their work; and it also provides an opportunity the best calculated to draw out the interest, the energy, and the ability of the members of those bodies. And there is no other way. We cannot progress in any other way except through the Local Authorities. There are people, of whom I think the hon. Member for Peckham is one, who say that the unearned increment should go into the pockets of private owners. The hon. Member has used such strong language in denouncing this Bill that I do not know how he will be able to denounce any future Bill which may be introduced for taking not only the future, but the present, property of persons without compensation. The point of view of the hon. Member, as I understand it, is that a certain favoured class is to be entitled not only to what they have earned, but to a great deal that they have not earned by their own exertions or capital, and land is to be maintained at monopoly prices. We are also opposed on the ground that the unearned increment of land is not different to that of other commodities in which it is difficult to distinguish it from other increased value. Even if we admitted that, I should contend that the unearned increment of land can, to some extent, be distinguished, and the fact that we cannot get all unearned increment is no reason why we should not get that which can be so distinguished. Some hon.

    121
    Members oppose this Bill because they have plans of their own which they prefer for dealing with land reform. The hon. Member for St. Pancras (Mr. Lawson) has a Leasehold Enfranchisement Bill which he prefers, but I utterly fail to understand his position. He said he was in favour of acquiring the unearned increment of land; but surely there is opposition enough to that principle, without the hon. Member proposing to increase manyfold the number of persons resisting our efforts to get the unearned increment for the State. The Bill before us is not perfect or complete, as it will only acquire the unearned increment of the land which the Local Authority has had valued, so that one owner may be valued and have to pay, and be side by side with another who is not valued and is getting the increment; but the good fortune of the one man is no reason why justice should not be done in the case of the other. To meet the case we might invoke the powers of the Bill of the hon. Member for St. Pancras for special rating. This Bill is put forward as an instalment. I wish to deal with the alleged injustice in the Bill. The hon. Member for Perth (Mr. C. S. Parker) put the case very dearly when he said that the Bill might lower the speculative value of land, as in valuing for the purposes of the Local Authority the prospective value will not be taken into account, and the Local Authority will be able to purchase at a price which does not include the prospective value of the land. I think the Bill will have a tendency to lower the speculative value of land, but will not touch its agricultural value or the increased value due to the expenditure of capital and labour upon it. The answer to the charge that injustice will be done in that respect is that the value which will be lowered is purely speculative, always has been, and will always remain, open to risk. There have been many schemes for obtaining this unearned increment; the principle of betterment is one; John Stuart Mill proposed another; and from that time everybody has been bound to run the risk of Parliament adopting one of the numerous plans, and thus interfering with the speculative value of land. We believe that in giving the Local Authorities power to value the unearned increment we are asserting the right of
    122
    the community to that which is its own, which it has always been entitled to, but which it has, for want of knowledge of its powers, or from laziness, not claimed hitherto. As to the argument that the unearned increment will be taken from the owners, and the undeserved detriment fall entirely on them, I believe that future buyers will buy land with their eyes open to the risks they run, and they will take account of them in the price they pay. When we consider how vast the unearned increment has been, and what a difference it would have made if the public had acquired it years ago in relieving the pressure of rates and in the amount of money available for public purposes, I am inclined to defend the generosity of the Bill in being so little retrospective rather than to defend it from the charge of injustice. We contend that land is a monopoly, and that the State has a right to limit the conditions under which it is held. In the case of a Railway Company, the profits are affected by the limits placed on the rates which the company can charge; but if the company fails through a change by depopulation in the character of the district through which it runs, the country does nothing to compensate it. If profits are made in trade the income is taxed; but if there is no profit in consequence of bad trade, the State pays no compensation for the loss. I claim for the Bill that it is one advisable in the public interest, and that it has proper regard for private interests. It is an experimental Bill, which will enable the Local Authorities to advance on right lines—the lines of experience. They will be called upon to run no risks, nor will they be called upon to buy land until it is rising in value. Yes; I am using that argument against the hon. Member for St. Pancras, who has spoken of the risk the Local Authorities would be called upon to run if the Bill were passed. The Bill has a third merit — it is capable of progressive application. It can be extended from town districts to county districts; in fact, there is nothing in it to prevent its immediate application to country districts. The President of the Board of Agriculture complains of the hardship of men wanting allotments having to pay three or four times the price paid by a neighbour who has a larger holding; he might

    123
    find some method of extending the Bill to remedy that injustice. Hon. Gentlemen opposite may admit some of our arguments, but I do not expect they will admit the conclusions we draw from them. We who consider ourselves the guardians of the Public Purse are bound either to accept this Bill, as it is, to improve it, or to reject it in favour of a more complete measure, which is not at present forthcoming. It is said that public opinion does not call for it. It is our business to rouse public opinion to a proper sense of its own rights. When hon. Members talk about justice in connection with this Bill, what they call justice does not deserve the name, because they look at it from the point of view of the individual and monopolist. In talking about justice between man and man, you must take the view of both, and draw the line fairly between the two. So in this Bill you are bound to occupy the position of both the individual and the State which is interested in the rising value of land. Hon. Members opposite only look at the question from the point of view of the owners of land, and it is not possible for them to decide equitably where the line of justice lies. The Bill takes a larger and fairer point of view; it proceeds on principles, sound and just, which will, sooner or later, commend themselves to the larger body of people in the country, and on these grounds I have endeavoured to defend and justify it; and I hope to see it, or some measure of the same kind, passed in the not very remote future.
    THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. RITCHIE,): The hon. Baronet has made a very able speech in favour of this Bill, but I was very much astonished at one of the reasons he gave for considering that it was a fair and generous Bill. He pointed out, in answering another objection to the Bill, what a commendable feature it was that it did not compel County Councils to buy laud until it is increasing in value. That may be very generous from the County Council point of view, but it is hardly generous to the landowner. I will deal with one or two others of the hon. Baronet's arguments later on. I would like to say, first, that there is hardly a Member who has
    124
    supported the Bill in its entirety. Some hon. Members have supported one portion and condemned another; some have endeavoured to pin the House to the question of principle and have asked it to altogether disregard the question of details. One hon. Gentleman said that the Division to-day will not be on the question of the details of the Bill, but on the question of whether or not the community is to obtain a share of the unearned increment of land. I can very well understand, looking at the details of the Bill, that hon. Gentlemen who desire to support the Bill are extremely anxious to pin the House to its principle rather than to its details. But I would suggest for the consideration of the House whether, when it is proposed in a Bill to alter so fundamentally the existing law of the land, it ought not to be shown by the authors of the Measure how it can be done, and that it can be done without manifest injustice. That is the great difference between a Resolution and a Bill. One of the many objections taken to a Resolution is that it commits the House to the assertion of a principle which it may be impossible to carry out in detail. But if you ask the House to insert in a Bill a novel principle, you ought to show how it is to be carried out. I shall have to allude to some of the details of the Bill which I do not think are defended in their entirety by any hon. Member. The hon. Member for Poplar (Mr. Sydney Buxton), who is as thorough-going a supporter of land reform legislation as anybody, asked the House to confine itself to the principle, and said he did not care much about the details, but was prepared to amend or cut them about in any way the House thought fit. The Bill consists of two parts—one part gives compulsory powers to Local Authorities to purchase land and facilitate its purchase; and the other part deals with what is understood by the term unearned increment in the value of land. In regard to the first part of the Bill, the hon. and learned Gentleman who brought forward the Bill spoke of the difficulties Local Authorities have in obtaining the land they require in consequence of the existing state of the law. He spoke in an extremely general way, and gave no illustration of the kind of

    125
    difficulty in which Local Authorities found themselves. So far as I am concerned, having some knowledge of the subject, I say without hesitation that no difficulty of any moment exists at the present time in enabling Local Authorities to obtain land for all the various purposes for which they have statutory powers. The hon. and learned Member for Fife, I think it was, completely answered the hon. and learned Gentleman who proposed this Bill with regard to that. The hon. and learned Member enumerated a large number of Acts of Parliament connected with the public health, and many other matters in respect to which the Local Authorities have full powers to acquire land. The only cases in which, so far as I remember, the hon. and learned Gentleman said they were restricted were one or two particular ones—he did not specify them—in which some greedy landlord possessed the land outside a town, and thereby interfered largely with the development of the town. That was the only instance he alluded to, and he gave no particulars with regard to it. I have no doubt there may be one or two cases of that kind; but what I venture to say is this—if this Bill were passed it would add enormously to the difficulties of the development of towns, because it is perfectly clear that the landowners who have land in the neighbourhood of a town would be prevented—and effectually prevented—from dealing with their estates in such a way as to relieve the pressure on the town. But there is this further difference between what the hon. and learned Gentleman proposes by this Bill and the existing law with regard to the acquisition of land by Local Authorities. Parliament has laid it down that Local Authorities should only acquire land for the purpose of carrying out the duties which devolve upon them by Statute, and the proposal of the hon. and learned Gentleman is that they should acquire land—
    "Where it appears to any County Council that it is for the interest of the inhabitants of any district within the county"
    to acquire land. My own view is that this is entirely a novel, and, I think, quite an unjustifiable extension of the powers of Local Authorities. One of the reasons, I take it, why it is that Parliament has restricted Local
    126
    Authorities in acquiring land to the acquisition of such land as may be required for the purposes of the duties which devolve upon them is to secure that the ratepayers' money should be safeguarded, and that the Local Authority should not embark in land speculation or any other speculation which might be foreign to the powers and the duties that devolve upon them. But I think the proper course to pursue, if the hon. and learned Gentleman believes that there are any duties which ought to be devolved upon Local Authorities which they do not now possess, is to let Parliament consider what these duties should be. I do not pretend to say that Parliament has clothed Local Authorities with all the powers and duties which ought to devolve upon them; but I say that Parliament ought to consider very carefully what additional powers should be conferred upon them, and ought to decide for what purposes the land is to be acquired before it gives to County Councils or Local Authorities such a roving dispensation as that proposed by the hon. and learned Gentleman. I say it is not for the interest of the community, and certainly it is not for the interest of the ratepayer, that any further powers should be conferred on Local Authorities for embarking in an undertaking which might be foreign to their duties, and might involve speculative enterprises such as, I think, ought not to be encouraged. But there is the further question which has been alluded to by subsequent speakers, by the hon. Baronet who has just sat down, and, I think, by the hon. and learned Member for Fife—namely, that certain conditions which are now imposed on the action of Local Authorities in regard to the compulsory acquisition of land ought to be removed, and that instead of coming to Parliament with the cost attendant upon it, the Local Government Board ought to issue an Order which should not be provisional, as it is now, but an Order that should require no Parliamentary sanction. Well, that is a proposal which requires, and which ought to receive, very careful consideration. The first point to be considered is whether or not the existing conditions are such as entail great expense and a great grievance. I deny that they do. It will be, perhaps, a matter of

    127
    surprise to hon. Gentlemen who complain about the difficulties which Local Authorities now have to acquire land compulsorily for the purpose of their duties, to know that out of 2,130 Provisional Orders granted by the Local Government Board and their predecessors up to 1890, not more than 105 were petitioned against and referred to Select Committees; and that of those 105, no less than 88 were afterwards confirmed by Parliament. With regard to the inquiries held upon the applications of Local Authorities, the interference of the Local Government Board is very largely regarded as an assistance by such authorities. When works are undertaken with regard to drainage, or water supply, or gas, or matters of that kind, an experienced and professional expert is sent down from the Local Government Board, and he assists very largely by his advice and by his suggestions Local Authorities in dealing with the questions which come before them at that time; and, further than that, the way in which an Inspector is often able to reconcile the various conflicting interests leads to a harmonious settlement of the question hitherto in dispute, and no appeal to Parliament is required. It may be said, "Why not, then, abolish the right of recourse to Parliament?" But I do not think that is a good argument, because the Local Government Board, in dealing with these questions, knows that it has behind it an appeal to Parliament, if it should be considered necessary, and the Local Authorities know also that an appeal to Parliament may be taken; and I think that in all probability this inquiry and negotiation with regard to the acquisition of land by Local Authorities would not be half as well done, would not be half as successful, and would not behalf as sound, if Parliamentary interference were done away with. Besides, it is a very strong order to say that we should take away the right of ultimate appeal from a man who might wish to exercise such a right. I do not think that any grievance worthy of the name has been suggested with regard to the existing mode of dealing with applications for the acquisition of land by Local Authorities. I am perfectly ready to admit, however, that several improvements could, perhaps, be introduced in the
    128
    provisional Order system; and if we were discussing that I should be quite willing to admit that much delay might be saved in connection with these matters by some proposals, or suggestions, or recommendations I should make. But we are not discussing that. Nor is this by any means the most important part of the Bill. There are some hon. Members supporting this Bill who are going to ride off upon this particular part, and ignore, if not condemn, the very much more serious proposals made in the other part. With regard to the other portion of the Bill, so far as I understand, the proposal contained in this Measure has never been approved of by any competent authority upon political economy, nor by any responsible statesman.
    MR. J. MORLEY: Mill.
    *MR. RITCHIE: I beg the right hon. Gentleman's pardon—Mill never proposed any such extreme mode of dealing with land as that proposed by the hon. Member in this Bill. What John Stuart Mill proposed was some rearrangement of taxation and rating.
    MR. HALDANE: By taxation for the purpose of acquisition.
    *MR. RITCHIE: I thoroughly under stand. I well know that several proposals have been made with regard to attacking the unearned increment by means of taxation, and I well understand what John Stuart Mill specially proposed; but never has there been such a monstrous proposal made with regard to this matter as has been placed in this Bill. Certainly, I think the right hon. Gentleman the Member for Derby (Sir W. Harcourt), who I am sorry to see has left the House, would never have made any such proposal. I should be glad to ask him, if he was here, whether he adheres to the opinion he expressed on this subject in 1874? Unfortunately the right hon. Gentleman sometimes has a habit of not being present when awkward points are likely to be raised. Perhaps it is only by accident. At any rate, the opinion which he expressed in 1874 was so sound that I do not like to deprive the House of the opportunity of hearing it. He said in Oxford in 1874:—
    "I shall not discuss with you the unearned increment of land. That is an idea so illogical so unreasonable, so perfectly unjust, so abso-

    129
    lutely philosophical, that it does not require a refutation. Neither shall I inquire into the nature and origin of property in land. I am content to assume that a man's right to his land depends on the same principle as your right to the coat on your back—namely, that you have paid for it."
    I should be very glad to know whether the right hon. Gentleman adheres to that very sound doctrine, which he enunciated in 1874; or whether, with regard to that, as with regard to some other matters, he has changed the coat to which he refers in the speech which he then made? Now, the hon. Member for Poplar, when I was out of the House, I understand, alluded to some remarks I made the other day on the subject of betterment, and asked whether or not, from what I had then said, I had not admitted the principle of this Bill?
    MR. SYDNEY BUXTON: What I said was, I understood that the right hon. Gentleman practically, the other day in Debate, accepted the principle of betterment; and I stated that, in my opinion, the principle in this Bill went no further than the principle of betterment on the same lines, and that this proposal only carried out the same principle for a public purpose.
    *MR. RITCHIE: I do not think it has anything to do with the principle of betterment. The principle which I said the other day was not an unjust one was this: that where it can be shown that a particular house or particular houses have been specially raised in value by a public improvement I saw no reason why the owners should not pay specially for that improvement. And that is the principle that is recognised by the existing law. But I made it very plain that, with regard to the proposal then before the House, I myself was unable to see how that principle could be so generally and widely applied with justice. But what is there in the betterment principle analogous to the proposal contained in this Bill? The real betterment principle is this: that if you can show that a particular property has been benefited, then let that property be taxed on that increment; but you are not going to benefit any property. What you are going to do is to worsen, and not to better, property. It has been said that this proposal is confined to land and houses, and is not one which is properly
    130
    applicable to other matters. For my part, I agree with the right hon. Gentleman the Member for Derby, and I cannot myself see how to dissociate land from any other kind of property. The hon. Baronet the Member for Northumberland (Sir E. Grey) said he was prepared to see this principle extended to other property; and he said, because it was not extended to other property why should we not take advantage of the Bill as it stands? He did not see any difference between this and any other property.
    SIR E. GREY: I beg the right hon. Gentleman's pardon. What I said was, adopting, for the time being, the contention of the other side of the House, there was no difference.
    *MR. RITCHIE: The hon. Baronet adopted it for the purpose of argument, and said take this as the first step, and then afterwards apply it to other property. The hon. Baronet gave an illustration. He said take a piece of property, divide it into two parts; if you deal with only half the property, that is no reason why you should not deal with the other half.
    SIR E. GREY: I said because you could not prove your title to the other part of the rateable property—it was not possible.
    *MR. RITCHIE: I do not wish to push the matter any further; but the principle of this Bill is, that where property has been increased, not by any action of the owner of the property, but by the development of the town, and the development of enterprise, the increased value of that property should be the property of the community. I have heard no satisfactory answer given to my hon. Friends who have contended that this principle affects other property, such as Consols, railway shares, and shares in all industrial undertakings; and I say there is no reason why it should not be applied to banks in towns, or shopkeepers in towns. It is quite true that a share of the increased value of a shop or a bank may be attributed to the energy or enterprise of those who have conducted the business; but it is perfectly obvious that a very large share of the increased value, at any rate, may be attributable to improvements made in the town, and to

    131
    the growth of the population of the town. Why, in that case, should there not be the same means of assessing what increased value is owing to this movement of the population, what increased value is owing to the industry and development of the town, and allow the town to take its share of it? Let us see for a moment what are some of the unjust details of this proposal? The property may be valued for purchase; let us see at what cost that is to be done to the landowner. We have first of all a Local Government Board inquiry. Then we have a valuation by an arbitrator, and both of these items of expense have to be incurred by the landowner, and the land does not benefit at all.
    MR. HALDANE: The right hon. Gentleman will see that the Bill specially provides that the expense shall be borne by the County Council.
    *MR. RITCHIE: I am sure the hon. and learned Gentleman will know as well as any Member of this House, that the costs which are likely to be dealt with in the way he suggests are probably the smallest portion of the costs, which would be involved in the transaction which he proposes. And then again, if ultimately the land is to be purchased there is another appeal to arbitration with regard to the value, so that after depriving the landowner of the power of taking the increased value of the land at the time the purchase is made, you undoubtedly, by these operations, subject him to a very large and serious expenditure. And what is more, so far as I understand the Bill, there is nothing to prevent it being done once every 20 years. There is no reason why, at the end of 20 years, the County Council should not say, "Oh, this land has not risen in value sufficiently for our purpose! We will go on repeating the experiment for the next 20 years." So that they would be able absolutely to put the owner to a very considerable expense every 20 years, and for that time completely paralyse the operations of the landlord, and the action of the landlord with regard to his own property, and there is no part of the community, I venture to say, which would be likely to suffer more from that paralysis than those whom the hon. Member desires to benefit by the operation of his Bill. Let
    132
    us see for a moment what the result to the owner would be during the 20 years, with regard to which he is under an obligation to sell. Something has been said by hon. Members in supporting this Bill to the effect that the only injustice—they acknowledge there would be an injustice done—but they say that if there is an injustice, the only injustice that will be done to the landowner is that perhaps it will not be worth the while of the speculator to come in and buy the land. Why should the landowner be debarred from selling his land to the speculator? Why should he be debarred from the opportunity of selling his land in the best market? Let me tell the hon. Member that perhaps the very best thing for the town and neighbourhood may be that the land should be sold to the speculator, who would provide outside the town those houses which, perhaps, it is impossible to provide within the area of the town. Therefore, I cannot acknowledge that the fact of the speculator being shut out as a possible buyer is not also a gross injustice to the owner of the land, and very possibly it may be a great injustice to the town. Suppose during the first 20 years the owner thinks a favourable opportunity in the land market has arisen for him to dispose of his land? Prices are high, probably higher than they may remain, and he desires to sell his land. But he cannot do it, with that charge upon it no one will buy it. And then at the end of 20 years the County Council may turn round upon the owner and say, "We are very much obliged to you for the offer of your land, but we don't think that the time is favourable, and we won't buy the land." Then the owner is put in this position. For twenty years he has been debarred from dealing with his land—it may be 40 or 60 years, but I am taking the shortest term—and he has been debarred from selling at a time favourable to himself. Then it is thrown upon his hands at the end of twenty years by the County Council at a time when, probably, it has been greatly depreciated in value. Then, again, this Bill says that no added value is to be given to the landowner unless that added value is owing to some expenditure of his own. Suppose a Railway Company goes through his

    133
    land. That surely has nothing to do with any expenditure incurred by the town; yet, the owner of the land is not to profit by a development which has been caused, not by the action of a Public Authority but by the action of a private company. The County Council has no disability of that kind, and I understand that it may take the whole or any part of the land. Then what may they do? They may go and take the land where the railway has come, and where the value has enormously increased—an increased value for which the owner will receive not one penny—and they may throw on the hands of the owner the other portion which they have scheduled, but which may have depreciated in value. Could anybody conceive anything more grossly unjust than that? I doubt whether the hon. and learned Member himself would be prepared to say otherwise than that such a proceeding would be a gross and monstrous injustice—a spoliation and a robbery.
    MR. HALDANE: The Bill gives the Local Government Board power to stop such an attempt.
    *MR. RITCHIE: The Local Government Board! I may be wrong, and if so, the hon. and learned Gentleman will correct me, but as I understand the Bill, the Local Government Board does not act in regard to this question except in the matter of scheduling for valuation.
    MR. HALDANE: And purchase.
    *MR. RITCHIE: Oh, very well. We will assume that the Local Government Board is to step in to prevent this manifest injustice. But what have the Local Government Board to consider? That it is "for the interests of the inhabitants of the locality." If it cannot be shown that it is not to the interests of the inhabitants of the locality the Local Government Board has no option. Clearly it is very much to the interests of the inhabitants of a locality, if a railway has come on to the land and enormously increased its value, that the land should be obtained by the Local Authority, and what would prevent the Local Government Board doing anything else but giving their assent to the proposal? It would not be for them to say whether the thing was just or unjust, but only whether or not it was
    134
    in the interests of the inhabitants of the locality, and that being shown, I declare on my responsibility, that no President of the Local Government Board could withhold his assent to such a transaction, which is a possibility quite within the four corners of the Bill. Such a proposal only requires to be stated to show its gross injustice. It is true the concession is made that if any expenditure is incurred in improvement by the owner during the twenty years, such expenditure will be valued. I am surprised that the hon. and learned Member did not put a clause in the Bill that no improvement should be made without the consent of the County Council. It would have been perfectly logical to say that, as they had got to pay for the improvement, no improvement should be made on the land for twenty years without the consent of the County Council. Then it has been said that there is no corresponding obligation on the County Council where the land may decrease in value, and that while the unfortunate owner is compelled to sell the land which increases in value he cannot compel the Council to buy if it decreases, although he is debarred of a market by the operation of the Bill. I believe the hon. and learned Member (Mr. Haldane) would be bound to insert in the Bill a clause compelling purchase in such a case. I think I have shown that the Bill proposes a grossly unjust and inequitable way of dealing with a principle which has never yet been recognised by Parliamentary law, and, so far as I am concerned, although I agree with hon. Gentlemen who have said that the operation of this Bill might possibly be to the present advantage of some particular locality, I do not believe that anything which is founded upon a gross and manifest injustice such as the proposals of this Bill are, can ever be for the permanent benefit of the community.
    MR. CREMER: It is very difficult in the few moments which remain to deal adequately with such an important question, and I shall not attempt to follow the right hon. Gentleman in the extraordinary speech which he has just delivered. I could not help reflecting during that speech that the supporters

    135
    of this principle of intercepting the unearned increment for the benefit of the community were getting hon. The right hon. Gentleman was pleased to twit the right hon. Gentleman the Member for Derby (Sir W. Harcourt) with his inconsistency on this subject. Whether the rigbt hon. Member for Derby was right in the opinions which he expressed years ago, or in those he entertains to day, does not matter much to us who have been for years pegging away for the realisation of this vital principle. The President of the Local Government Board says he cannot distinguish between property in a coat which is the product of human industry and property in land which is the gift of Nature. I am sorry that the right hon. Gentleman has not got further in learning his lessons. To us and to a daily-increasing number there is a vast distinction to be drawn. I sat at the feet of John Stuart Mill and heard this doctrine of the unearned increment formulated by that great philosopher. "An ounce of fact is worth a ton of theory"; and the results which have followed the construction of the Thames Embankment supply one of the strongest arguments which can be reduced in support of the principle affirmed in this Bill. Had that principle been accepted twenty-five or thirty years ago the ratepayers of London to-day would not be saddled with a legacy of debt incurred by the late Metropolitan Board of Works, for the cost of the Embankment would have been liquidated by the increase of from thirty to sixty per cent. which has taken place in the value of the adjacent land and property—an increase mainly due to the expenditure of £800,000 which the ratepayers of London incurred in the construction of the embankment, but which increase has gone into the pockets of the ground landlords of the locality. I should like to have given other practical proofs which could be found in the Metropolis in favour of the principle which this Bill affirms, but I have no desire to stand between the House and a Division, and I can only congratulate myself and those who supported John Stuart Mill twenty-five years ago that a principle which was then scouted as a monstrous idea has to-day been seriously discussed by the House of Commons.
    (5.30.) Question put.
    The House divided:—Ayes 148; Noes 223.—(Div. List, No. 104.)
    Words added.
    Main Question, as amended, put, and agreed to.
    Second Reading put off for six months.

  RECREATION GROUNDS BILL. (No. 201.)

    SECOND READING.
    Order for Second Reading read.
    MR. LLEWELLYN: I ask the House to give this Bill a Second Reading. It is a short Bill, and does not need, I think, a long explanation. Its object is simply to allow recreation grounds to be provided in rural parishes, and for this purpose parishes may combine.
    Objection taken.
    Second Reading deferred till to-morrow.

    ORDNANCE SURVEY.
    MR. ROBY: In moving that the Order of 11th February for appointing a Committee on the Ordnance Survey be discharged, I may, perhaps, say a few words explaining why I do so. I was fortunate enough to obtain the Order for the Committee very early in the Session, and the President of the Board of Agriculture, who was not at the time present, afterwards communicated with me, and said he thought that a Departmental Committee would be more likely to make a speedy and successful inquiry, and he was good enough to consult me as to the terms of Reference. I had great pleasure in acceding to his wish, and I hope the inquiry will lead to a satisfactory result.
    Motion made, and Question proposed,
    "That the Order [11th February], That a Select Committee on the Ordnance Survey be appointed, be read, and discharged."—(Mr. Roby.)
    MR. BUCHANAN: I think my hon. Friend must allow that the proposal he has accepted is a considerable variation from the Order of the House at the beginning of the Session. That Order was to appoint a Committee to inquire into the

    137
    present management of the Ordnance Survey, and the best mode of accelerating the production of maps and to report thereon, but the reference to the Departmental Committee is of a much more limited character, only dealing with certain specific arrangements for the publication of maps. It may be invidious to decline to allow the hon. Member to withdraw the Order, but I think if he would postpone his present Motion until to-morrow, he might get an assurance from the right hon. Gentleman the President of the Board of Agriculture (Mr. Chaplin) that the evidence given before the Departmental Committee and also its Report shall be made public, at any rate that we should not suffer in that degree by the substitution of a Departmental Committee.
    Debate adjourned till to-morrow.

    RAILWAY RATES AND CHARGES PROVISIONAL ORDER [CAMBRIAN, &C.] BILL.—(No. 10.)
    As amended, considered; read the third time, and passed.
    RAILWAY RATES AND CHARGES PROVISIONAL ORDER [CLEATOR AND WORKINGTON JUNCTION, &c.] BILL.—(No. 14.)
    As amended, considered; lead the third time, and passed.
    RAILWAY RATES AND CHARGES PROVISIONAL ORDER [ISLE OF WIGHT, &C.] BILL.—(No. 15.)
    As amended, considered; read the third time, and passed.
    SUNDERLAND'S CHARITY BILL. (No. 296.)
    Considered in Committee, and reported, without Amendment; read the third time, and passed.
    TOWN HOLDINGS COMMITTEE.
    Ordered, That Mr. Heath be added to the Select Committee on Town Holdings.—(Mr. Akers-Douglas.)
    PUBLIC PETITIONS COMMITTEE.
    Eighth Report brought up, and read; to lie upon the Table, and to be printed.

    NATIONAL EDUCATION (IRELAND).
    Copy ordered—
    "Of Return of the number of pupils on the roll of each ordinary National School in Ireland in the year 1890, distinguishing the pupils who were not in attendance during the year from those who were in attendance, and distinguishing also those whose attendance did not begin until after the beginning of the year and those whose attendance ceased before the year closed:
    The Return to be arranged by counties."—[And other Returns, set forth in tabulated form (see Votes, 4th May.]—(Mr. Sexton.)

  MOTIONS.

    LOCAL GOVERNMENT (IRELAND) PROVISIONAL ORDER (NO. 7) BILL.
    On Motion of The Attorney General for Ireland, Bill to confirm a Provisional Order made by the Local Government Board for Ireland, under "The Public Health (Ireland) Act, 1878," relating to the Rural Sanitary District of Fermoy, ordered to be brought in by The Attorney General for Ireland and Mr. Jackson.
    Bill presented, and read first time. [Bill 319.]

    TENURE OF WORKMEN'S HOUSES BILL.
    On Motion of Mr. Donald Crawford, Bill to make provision with respect to the Tenure of Workmen's Houses in certain employments, ordered to be brought in by Mr. Donald Crawford. Mr. Arthur Acland, and Mr. Philipps.
    Bill presented, and read first time. [Bill 320.]

    ADJOURNMENT.
    Motion made, and Question proposed, "That this House do now adjourn."—(Mr. Akers-Douglas.)
    MR. BRYCE: I take this opportunity of putting a question to the First Lord of the Treasury which can be answered in a few moments. Before Easter a Resolution was passed by the House, the Government agreeing, setting forth that legislation was needed to provide for public access to mountains and moorlands, especially in Scotland; and upon the acceptance of this Resolution by the Government a Bill was immediately brought in to give effect to it, in exactly the same terms as Bills which had been before the House in two preceding Sessions. My hon. Friend the Member for West Aberdeen (Dr. Farquharson) and myself have repeatedly moved the

    139
    Second Reading of this Bill after the time for taking Opposed Business, and have always been blocked by an objection from the other side of the House, and sometimes from a Member of the Government. This is a most unsatisfactory position, that the Government should accept a Resolution, and then refuse us any facilities, or even to exercise any influence on their supporters to enable us to bring forward a Bill founded on the Resolution. I wish to ask the right hon. Gentleman what is the attitude of the Government towards the Bill; whether they are willing to afford any opportunity for the discussion of the proposals to carry out the spirit of the Resolution; and whether they will state their objections to our proposals, and indicate any form which may be accepted by us, so that the Bill may go through?
    MR. TOMLINSON: As I have several times stopped the Bill, perhaps I may be allowed to say that I have done so because the Bill is not in accordance with the Resolution.
    MR. BRYCE: My question was not addressed to the hon. Gentleman.
    THE FIRST LORD OF THE TREASURY (Mr. A. J. BALFOUR,): I know nothing about the course taken by my hon. Friend, a course which he has every right to take, and which is frequently adopted by hon. Members opposite towards Bills my Friend desires to promote. As to the attitude of the Government towards this particular Bill mentioned, while we undoubtedly did accept the proposition that something should be done to deal with this subject, we have never given assent to this Bill by speech or vote, nor do we think that in its present shape it is a Bill which the House ought to accept. The hon. Gentleman asks me to give the reasons why the Government object to the Bill; but the few minutes now at my disposal will not admit of that, even if this were the opportunity for doing so. I do not think that any Bill on the subject could pass the House without discussion, and time for that discussion we have not to give. If the hon. Gentleman will confer with my right hon. and learned Friend near me (the Lord Advocate), possibly we might come to an understanding as to what kind of Bill would be acceptable.
    MR. ANGUS SUTHERLAND: Does not the right hon. Gentleman think that the Government are under an obligation to bring forward a proposal of their own if they refuse this Bill? Does the right hon. Gentleman definitely decline to do so?
    MR. A. J. BALFOUR: I will consider that.
    MR. MACARTNEY: I wish to ask the right hon. Gentleman a question with reference to the business on Friday evening next. Can the right hon. Gentleman give us any information as to whether the Motion which stands on the Order Book in the name of the hon. Member for South Armagh (Mr. Blane) is withdrawn; and, if so, what other business is to be proceeded with?
    MR. A. J. BALFOUR: I have heard a rumour to that effect; but I have no official knowledge. Of course, it is in the power of hon. Gentlemen to put down Notices of Motion for Fridays, when they will be discussed in their order of precedence.
    DR. TANNER: In reference to the course of business, may I ask the right hon. Gentleman whether he persists in his proposal to make the discussion of the Irish Education Bill contingent upon the passing of the Irish Local Government Bill; and whether he intends to so arrange matters that the smaller Bills shall take precedence, and the important Education Bill be contingent on the passing of these?
    MR. A. J. BALFOUR: No; the hon. Gentleman is mistaken if he supposes anything of the kind.
    DR. FARQUHARSON: I wish to express my strong dissent from the line taken by the Government towards the Access to Mountains Bill after accepting the Resolution. I trust that facilities may be given for the discussion of that Bill, or that the Government will carry out their expressed intention by bringing forward proposals of their own.
    It being Six of the clock, Mr. Speaker adjourned the House without Question put till To-morrow.