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Such being the state of legislation, and such the circumstances of the land question in Ireland in the year 1886, the Irish Government Bill afforded Mr. Gladstone the means and the opportunity of bringing in a Land Bill which would secure to the Irish landlord the certainty of selling his land at a fair price, without imposing any practical liability on the English Exchequer, and would, at the same time, diminish the annual sums payable by the tenant; while it also conferred a benefit on the Irish Exchequer. These advantages were, as will be seen, gained, firstly, by the pledge of English credit on good security, instead of advancing money on a mere mortgage on Irish holdings, made directly to the English Government; and, secondly, by the interposition of the Irish Government, as the immediate creditor of the Irish tenant. The scheme of the Land Purchase Bill is as follows:–The landlord of an agricultural estate occupied by tenants may apply to a department of the new Irish Government to purchase his estate. The tenants need not be consulted, as the purchase, if completed, will necessarily better their condition, and thus at the very outset the difficulty of procuring the assent of the tenants, which has hitherto proved so formidable an obstacle to all Irish land schemes, disappears. The landlord may require the department to which he applies (called in the Bill the State Authority) to pay him the statutory price of his estate, not in cash, but in consols valued at par. This price, except in certain unusual cases of great goodness or of great badness of the land, is twenty years’ purchase of the net rental. The net rental is the gross rental after deducting from that rent tithe rent-charge, the average percentage for expenses in respect of bad debts, any rates paid by the landlord, and any like outgoings. The gross rental of an estate is the gross rent of all the holdings on the estate, payable in the year ending in November, 1885. Where a judicial rent has been fixed, it is the judicial rent; where no judicial rent has been fixed, it is the rent to be determined in the manner provided by the Bill.

To state this shortly, the Bill provides that an Irish landlord may require the State Authority to pay him for his estate, in consols valued at par, a capital sum equal to twenty times the amount of the annual sum which he has actually put into his pocket out of the proceeds of the estate. The determination of the statutory price is, so far as the landlord is concerned, the cardinal point of the Bill, and in order that no injustice may be done the landlord, an Imperial Commission–called the Land Commission–is appointed by the Bill, whose duty it is to fix the statutory price, and, where there is no judicial rent, to determine the amount of rent which, in the character of gross rental, is to form the basis of the statutory price. The Commission also pay the purchase-money to the landlord, or distribute it amongst the parties entitled, and generally the Commission act as intermediaries between the landlord and the Irish State Authority, which has no power of varying the terms to which the landlord is entitled under the Bill, or of judging of the conditions which affect the statutory price. If the landlord thinks the price fixed by the Land Commission, as the statutory price inequitable, he may reject their offer and keep his estate.

Supposing, however, the landlord to be satisfied with the statutory price offered by the Land Commission, the sale is concluded, and the Land Commission make an order carrying the required sum of consols (which is for convenience hereinafter called the purchase-money, although it consists of stock and not of cash) to the account of the estate in their books after deducting 1 per cent. for the cost of investigation of title and distribution of the purchase-money, and upon the purchase-money being thus credited to the estate, the landlord ceases to have any interest in the estate, and the tenants, by virtue of the order of the Land Commission, become owners in fee simple of their holdings, subject to the payment to the Irish State Authority of an annuity. The amount of the annuity is stated in the Bill. It is a sum equal to L4 per cent. on a capital sum equal to twenty times the amount of the gross rental of the holding. The illustration given by Mr. Gladstone in his speech will at once explain these apparently intricate matters of finance. A landlord is entitled to the Hendon estate, producing L1200 a year gross rental; to find the net rental, the Land Commission deduct from this gross rental outgoings estimated at about 20 per cent., or L240 a year. This makes the net rental L960 a year, and the price payable to the landlord is L19,200 (twenty years’ purchase of L960, or L960 multiplied by 20), which, as above stated, will be paid in consols. The tenants will pay, as the maximum amount for their holdings, L4 per cent. for forty-nine years on the capitalized value of twenty years’ purchase of the gross rent. This will amount to L960 instead of L1,200, which they have hitherto paid; a saving of L240 a year will thus be effected, from which, however, must be deducted the half rates to which they will become liable, formerly paid by the landlord. This L4 per cent. charge payable by the tenants will continue for forty-nine years, but at the end of that time each tenant will become a free owner of his estate without any annual payment. Next, as to the position of the State Authority. The State Authority receives L960 from the tenants; it pays out of that sum L4 per cent., not upon the gross rental, but upon the net rental capitalized, that is to say, L768 to the Imperial Exchequer. The State Authority, therefore, receives,L960, and assuming that the charge of collecting the rental is 2 per cent., that is to say, L19 4 s., the State Authority will, out of L960, have to disburse only L787 4 s., leaving it a gainer of L172 16 s., or nearly 18 per cent. The result then between the several parties is, the landlord receives L19,200; the tenantry pay L240 a year less than they have hitherto paid, and at the end of forty-nine years are exempt altogether from payment; the gain of Irish State Authority is L172 16 s. a year. Another mode of putting the case shortly is as follows: The English Exchequer lends the money to the Irish State Authority at 3-1/8 per cent. and an annuity of 4 per cent. paid during forty-nine years will, as has been stated above, repay both principal and interest for every L100 lent at 3-1/8 per cent. On the sale of an estate under the Bill, the landlord receives twenty years’ purchase; the tenant pays L4 per cent. on twenty years’ purchase of the gross rental; the Irish State Authority receives L4 per cent. on the gross rental; the English Exchequer receives 4 per cent. on the net rental only. The repayment of the interest due by the Irish Authority to the English Exchequer is in no wise dependent on the punctual payment of their annuities by the Irish tenants, nor does the English Government in any way figure as the landlord or creditor of the Irish tenants. The annuities payable by the tenants are due to the Irish Government, and collected by them, while the interest due to the English Government is a charge on the whole of the Irish Government funds; and further, these funds themselves are paid into the hands of the Imperial officer, whose duty it is to liquidate the debt due to his master, the Imperial Exchequer, before a sixpence can be touched by the Irish Government. It is not, then, any exaggeration to say that the Land Purchase Bill of 1886 provides for the settlement of the Irish Land question without any appreciable risk to the English Exchequer, and with the advantage of securing a fair price for the landlord, a diminution of annual payments to the tenant with the ultimate acquisition of the fee simple, also a gain of no inconsiderable sum to the Irish Exchequer. In order to obviate the difficulties attending the investigation of title and transfer of the property, the Bill provides, as stated above, that
on the completion of the agreement for the sale between the landlord and the Commission, the holding shall vest at once in the tenants: it then proceeds to declare that the claims of all persons interested in the land shall attach to the purchase-money in the same manner as though it were land. The duty of ascertaining these claims and distributing the purchase-money is vested in the Land Commission, who undertake the task in exchange for the 1 per cent. which they have, as above stated, deducted from the purchase-money as the cost of conducting the complete transfer of the estate from the landlord to the tenants. The difficulty of the process of dealing with the purchase-money depends, of course, on the intricacy of the title. If the vendor is the sole unencumbered owner, he is put in immediate possession of the stock constituting the price of the estate. If there are encumbrances, as is usually the case, they are paid off by the Land Commission. Capital sums are paid in full; jointures and other life charges are valued according to the usual tables. Drainage and other temporary charges are estimated at their present value, permanent rent-charges are valued by agreement, or in case of disagreement, by the Land Commission; a certain minimum number of years’ purchase being assigned by the Bill to any permanent rent-charge which amounts only to one-fifth part of the rental of the estate on which it is charged, this provision being made to prevent injustice being done to the holders of rent-charges which are amply secured.