I stated on First Reading that the price of a tenancy on which a judicial rent of £100 had been fixed prior to 1911, was to be approximately fifteen years' purchase, and that the tenant purchaser's annuity was to be £65, a reduction of 35 per cent. It will obviate misunderstandings if we consider the general principles of the Bill in their application to such a tenant. His case is the key to the position. The figures which apply to it can be adjusted and made to apply to the very small number of judicial tenancies on which rents were fixed after 1911. This 35 per cent. reduction gives the tenant on the average 10 per cent. better terms than tenants who have purchased under the 1903 Act, and between 8 per cent. and 10 per cent. better terms than tenants who have purchased under the 1909 Act. Consider what that means. Annuity is interest and sinking fund on money lent by the State and borrowed by the tenant to pay for his holding. The rates of interest between 1903 and the outbreak of the European war were 2¾ and 3 per cent. The rate now is 4½ per cent. Notwithstanding this increase, we were faced with the problem of evolving a scheme which would leave the tenant's interest and sinking fund not merely the same, but actually lower, than pre-war figures. Land Purchase is essentially a stock exchange transaction, and we were under the necessity of carrying it through as if the European war with its tremendous reactions on prices and credits had never occurred; as if the rebellion of the last twelve months had not cost us about three times the price of land purchase; as if, in fact, the trend of things was entirely the other way. We have tried to do it, and as I have said, the terms offered give to tenant purchasers under this Bill annuities between 8 per cent and 10 per cent. lower than the annuities of pre-war tenant purchasers. The term over which the tenant-purchaser will pay annuity, will vary, of course, with the price of the stock on the market, but the maximum will be between 68 and 69 years, that is to say, the same term as tenant purchasers under the 1903 Act.
The price is approximately fifteen years' purchase. I explained on first reading that even at the price of 3 per cent. land stock between 1909 and 1914, there would be no difficulty in borrowing between £1,500 and £1,600 on terms which would leave the tenant's interest and sinking fund £65. Now, with interest at 4½ per cent., £65 will only provide interest and sinking fund for £1,368, and we are forced, therefore, if we are to achieve our double purpose of being just to the landlords and generous to the tenants, to add 10 per cent. as a State contribution, making the price within a few decimal points of £1,505. I hope we are not going to be involved in a futile argument as to whether this 10 per cent. is a bonus or a contribution to the price. It does not matter what we call it. Everyone to his taste. The important thing is to realise exactly what it means, what purpose it achieves, and if we are clear about that, then we need not waste time in arguing about its name.
Is £1,505 a fair price in all the circumstances? I will content myself with indicating the considerations which the Government had in mind when fixing it. We were acquiring property compulsorily for the first time in the history of the Free State, and whatever the principles, or if anyone prefers the word, the expediencies, of the case may be, I take it we can all agree that the issues raised are manifold, and are entitled to something more than casual decisions. First, the transaction cannot be looked at as an ordinary case of bargain and sale where the price is fixed entirely by reference to market value. Market value is a variable quantity. It fluctuates according to the point of view of the vendor, and according to the point of view of the purchaser. It may have been one thing last year; another thing this year, and it may be something quite different next year. What I will call the value of the property as a security is much more stable. Fee-simple property is, and always has been, a recognised security, and in fact, Irish rents are quite a common security both in Ireland and England. We are dealing, therefore, not only with the vendor, but with the people who receive his head rents, with his mortgagees and his encumbrancers. These include different people and different institutions; middle-class people who wanted a reliable 5 or 6 per cent. for their money, stock-brokers, charitable institutions, banks, insurance companies, and so on. When they are lending their money as an investment, they take care to make allowances for fluctuations in the market value. Irish lands, in view of the fact that rents have been regulated by law since 1881, are, as a business matter, a recognised investment, and in view of the fact that they have escaped the general inflation during the war, are mortgageable, that is to say, are worth, from the point of view of a banking institution, a high percentage of their current value. We realise that we cannot afford—to put it for the moment on no higher grounds—to fix a price on these lands which would adversely affect their value as a security. In other words, we cannot afford to give notice to people here or elsewhere who have money to invest that Ireland is no place in which to invest it. That is the first consideration; it is the business aspect of the question, and from that point of view, it is the primary consideration for the State. There are others. There is the tenant's point of view, that at present agriculture is not flourishing, and we have to put that fact against its condition in the immediate past and its prospects in the immediate future; and there is the landlord's point of view, that a large number of the estates with which we are left to deal are mortgaged to individuals, to banks, and to other institutions, and encumbered with family charges and head rents up to their full security value. We have endeavoured to fix the price in the light of all these considerations of financial credit, and in addition to keep in mind the necessity for fair dealing. We realise that when applied to the heavily encumbered estates, it will entail hardships, and we have tried to provide for this and for the fact that the purchase money is being paid, not in cash, but in bonds, by arranging that the redemption price of mortgages, encumbrances and head rents shall also be paid in bonds.
With regard to tenancies on which judicial rents have been fixed after 1911, the annuity and price are, when the extra reduction which these tenants received has been taken into account, slightly more favourable to the tenant. The price of non-judicial holdings on which the rents vary very widely must be fixed by the Land Commission, who will take all the circumstances into consideration. A 10 per cent. contribution to the price will be made by the State in the case of all tenancies. Untenanted land will be acquired by the Land Commission at a price which, in default of agreement, will be such an amount as may be fixed by the Land Commission other than the Judicial Commissioner, or by the Judicial Commissioner on appeal from the Land Commission, and in fixing such amount, regard shall be had to the fair value of the land to the Land Commission and the owner respectively. There will be no contribution to purchase money in the case of untenanted land.
I do not think I need labour this question of price any further. I claim, and I think I may say that it is admitted by the tenants themselves, that the terms provided have, so far as it is possible to do so, succeeded in reconciling the conflicting questions of price and annuity within the equities of the case.
I have explained the terms with regard to arrears on first reading. The arrears now due are not in the same case as the arrears, say, in 1881, which were dealt with by the 1881 Act. The strike against rents which took place during the last two or three years was only indirectly a strike for a reduction in rents. It was primarily a strike against the relationship of landlord and tenant, a protest by the existing tenants against the fact of their not having purchased. This differentiates the problem from all previous problems of the same nature. So far as it was a protest against the fact of non-purchase we have met the case; we are introducing this Land Purchase Bill. We are now faced with the problem of making an arrangement which will obviate, as far as possible, the hardships that must ensue as a result of the necessity which the tenants are under of paying rents which accrued due over a period of two or three years, within a much shorter period. There are 70,000 tenancies, with a rental of about £800,000, that is to say, an average rent of about £12 per annum. We all realise that the payment of £12 per annum over a period of two years is a different proposition from a payment of £24 down. That is the difficulty from the tenant's point of view.
On the other hand, the landlord is under the necessity of paying his head rents and interest charges in respect of those years during which arrears of rent have accumulated. Further, he must pay them in full without any abatement. This will be his position until he receives his purchase money and is in a position to redeem his charges. The owner of a heavily encumbered estate will not be able to pay his full rent and interest charges out of the income from his purchase money. The purchase money is £1,505. The income is £67.72. This £67.72 is the interest at 4½ per cent. on the purchase money. On the other hand, the interest on his charges may be, and probably is, at the rate of 5 per cent or 6 per cent. He can overcome this difficulty, that is, the difficulty due to the fact that whereas he is only receiving an income of £4 10s. 0d. on every £100 of his purchase money, he may be under the necessity of paying out £5 or £6 for every £100 of his purchase money which represents the redemption price of a mortgage or charge by redeeming his rents and other charges in bonds at once, but he cannot do this until he receives his purchase money, and hence we cannot in equity allow the same abatement in regard to arrears and payment in lieu of rent, that is to say, in regard to the period during which the landlord must pay his full charges without any abatement, as we have allowed in respect of annuity. We have taken these facts into consideration, and in addition the fact that before the landlord receives his compounded arrears or payment in lieu of rent, costs of collection must be deducted, and in the light of these facts we have fixed the reduction in regard to arrears and payment in lieu of rent at 25 per cent. All arrears up to the first gale day in 1920 and all hanging gales are written off. The arrears collectable are the arrears due from the first gale day, in 1920, to the first gale day in the present year, 1923. One year's arrears, less 25 per cent., is to be paid on the passing of the Act, and the balance —where there is a balance, is to be paid in cash in accordance with regulations to be made by the Land Commission, who will take all the circumstances into account.
I referred shortly to the scope of the Bill on first reading. It is defined in Section 21. The relevant portion reads:
"Subject to the provisions of this Act, and notwithstanding anything contained in any other enactment, all tenanted land wherever situated, and all untenanted land situated in any congested districts county, and such untenanted land situated elsewhere as the Land Commission shall, before the appointed day, declare to be required for the purpose of relieving congestion, or of facilitating the resale of tenanted land, shall by virtue of this Act, vest in the Land Commission on the appointed day."
Sub-section 2 of the same Section provides that the foregoing Section shall not apply to land which has been purchased previously under the Land Purchase Acts, land which is not substantially agricultural or pastoral, demesne land, home farms building sites, or land held by the State.
Then sub-section 3 provides that, where it is required for the purpose of relieving congestion, the foregoing lands excluded by sub-section 1, except land held by the State, may be acquired compulsorily by the Land Commission. That, I think, for all practical purposes, justifies my statement on first reading, that for the relief of congestion, the Land Commission has power to acquire any land of any kind anywhere.
Section 28 specifies the persons to whom advances may be made by the Land Commission for the purchase of parcels of land. They are: congests, tenants who enter into an agreement to exchange their holdings, evicted tenants who have been evicted within a period of twenty-five years before the passing of the Land Act of 1903, labourers who have been deprived of their employment by reason of the sale of any lands, and any other suitable persons. Congests have the first claim, and any land available after congests have been dealt with may be sold to these persons. It is specifically provided by sub-section (2) of Section 28 that when choosing landless men to whom advances are to be made, the Land Commission shall be satisfied as to their competence to work the land, their intention to do so and not to sell, let or assign it.
The problem of congestion is a huge one and it bristles with difficulties. There are congests on practically every estate, and wherever there are congests the Land Commission will acquire the estates, deal with the congests and resell the balance to landless men. Outside the congested districts, which are roughly the Province of Connaught, the Counties of Donegal and Kerry and parts of the Counties of Clare and Cork, though untenanted land will be bought, in the first instance for congests, nevertheless the major portion will be available for landless men. In the congested districts, however, the case is different. There are thousands of wretched holdings huddled together along or near the sea coasts, all under £10 valuation and with very little untenanted land of any kind in the neighbourhood to provide for them. As far as possible these tenants must be migrated, and as far as possible the bigger tenants must be migrated. Bigger tenants, as a rule better educated, are more suitable for migration. But after everything has been done there will be a residue, and I am afraid a big residue of congests undealt with. I do not want to dilate too much on the difficulties; most people understand the difficulties of getting tenants to migrate, difficulties which arise from the point of view of the tenants themselves and from the point of view of the tenants and landless men on the estates to which they are going. We can only do our best, and I claim that we have done our best when we provide that any land of any kind may be taken for the relief of congestion. We have not preserved the old definition of a congested tenant. The Congested Districts Board had a hard and fast rule that no tenant of a holding of £10 Valuation or over could be regarded as a congest. We have not drawn any definite line. There are tenants whose holdings are over £10 valuation and who are nevertheless congests. It is only right that the Land Commission, where possible, should be able to deal with them as such. Owing to the special conditions in the congested districts, Section 21, which I have quoted already, specifies that all untenanted land in the congested districts shall be taken up not only compulsorily but in fact automatically; and it should be remembered that land will be required outside the congested districts not only for the purposes already specified, but for migrating tenants from the congested districts.
Section 27 deals with the limitation on advances and provides that the Land Commission may advance up to £3,000 to any tenant for the purchase of his holding, and further gives the Land Commission a discretion to advance more in any case where, in the opinion of the Land Commission, who will take all the circumstances of the case into account, it is expedient to advance more. This limitation will mean that the Land Commission will retain on hands considerable areas of large tenancies and these will be used for the same purposes as untenanted land. Where they are not required for the relief of congestion they will be sold to landless men.
Section 33 empowers the Land Commission to acquire compulsorily any bog, even bog which has been sold under some of the previous Acts to tenant purchasers. Under the previous Acts in certain cases all available bog has been sold to tenants, with the result that these tenants have more than enough, while there is no turbary available for future tenant purchasers. This Section enables us to deal with that difficulty, I hope, equitably.
Section 36 gives ample power to the Land Commission to make regulations with respect to turbary on any bog and to make such regulations as may be necessary for conferring or defining rights of access to or through the bog.
Sporting rights and fishing rights are dealt with in Section 38. They vest in the Land Commission. This need not frighten anybody. In practice there are no sporting rights of any monetary value on tenanted land. There are, however very valuable sporting rights on untenanted land, such as large areas of bog and mountain. These can be developed and can be made to yield an income that will be by no means negligible. There are extremely valuable fishing rights out of which a very large number of fishermen make their living, especially on the bigger rivers, and there is no reason why they should be vested in the tenant who happens to own the adjoining land. If anybody has a first claim to them it is the fishermen who have been making their living out of them up to date. The Land Commission will acquire these rights and let them at reasonable prices. These are the main provisions of the Land Purchase section of the Bill.
We have endeavoured to make what I will call the machinery of the Bill as simple as possible. As from the date of the passing of the Act the relationship of landlord and tenant shall no longer exist. The State will take over the management of the estates as a going concern, will collect the compounded arrears of rent up to the first gale day of this year and will collect payment in lieu of rent from the first gale day of this year until the appointed day. The appointed day, as I have said before, will vary for different counties and perhaps for different sections of counties, and on the appointed day the landlords' interest in the holdings of the tenants for whom the day has been appointed shall vest in the Land Commission. Before that appointed day can be named it will be necessary to find out accurately the name of the tenant, the area of his holding, the amount of his rent, whether he is a present or future tenant, and if judicial, whether he is a first, second or third term tenant, and other particulars of that sort. When these facts are ascertained the appointed day is named, the holdings vest in the Land Commission and the tenant begins to pay a sum which is equivalent to his annuity, that is to say, a sum which, in the case we have been considering, is a 35 per cent. reduction on his existing rent. When the estate is completely re-arranged and all titles in connection with it made to the satisfaction of the Land Commission, the holdings on the estate which up to then are vested in the Land Commission will be vested in the purchasers and the bonds for the purchase money allocated to the vendor and to his encumbrancers. Sub-section 2 of Section 25 deals with this matter and provides as follows:
"There shall be payable by the tenant to the Land Commission an annual sum equivalent to the standard purchase annuity for the holding, from the appointed day until the gale day next after the holding is vested in the tenant."
Sub-section 4 of the same Section specifies that all payments made by the tenant after the appointed day on foot of the annual sum payable by him to the Land Commission shall, from and after the vesting of the holding in him, be treated for all purposes as if they had been payments in respect of purchase annuity. It will be noted that in effect the tenant begins to redeem his purchase money as from the appointed day, though as a matter of book-keeping the payments will not be appropriated to this purpose until after the holding is vested in him. The reason for this distinction is as follows:—Certain holdings will be retained, say, for the relief of congestion, and certain holdings will not be sold in their entirety to the owners, and it is necessary to make it quite clear that though the tenant is paying a sum which is equivalent to his purchase annuity as from the appointed day, nevertheless his payments will not be appropriated to the payment of the sinking fund until the Land Commission is in a position to say whether they are going to vest the holding in him or resume it or part of it for other purposes. It is necessary to make it quite clear that the occupier is not the owner until the Land Commission is in a position to say whether they require the whole or any part of the holding. In 75 per cent. of cases tenants will be left in occupation of their old holdings, or will get additions to their old holdings, but it will take some time before the Land Commission can say who are the particular tenants who will come within the other 25 per cent. category. It would be going back to the old slow procedure to hold up the appointed day and to defer the commencement of payment of sinking fund in redemption of the purchase money until that is decided, that is to say, until the estates are re-arranged. The difficulty is got over by the provisions in the Act which provide that a sum equivalent to the annuity shall be paid as from the appointed day by all tenants, and that this payment shall not be appropriated towards annuity until the holding is vested in the tenant. This arrangement gets over definitely the grievance which tenants had under the old Acts by reason of the fact that they were paying interest in lieu of rent, none of which went in redemption of the price, for six or seven or ten years before the holding was vested in them. Every payment made under this Act after the appointed day will count as contribution towards redemption of the advance, and this alone makes the procedure just about five or six times more expeditious than the procedure under the 1903 and 1909 Acts. I beg to move the Second Reading of the Bill.