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This question was closely investigated by the Land Enquiry Committee
appointed by Mr. Lloyd George in 1913. They were unanimous in condemning
the existing system and in regarding the one which I have just described
as the ideal. They were, however, met by great difficulties in its
immediate practical application, because, owing to the long prevalence
of the wrong system, an immediate and total change would bring about
rather startling alterations in the value of existing properties. The
Committee closely considered these objections, and a number of
alternative methods of bringing the change into operation gradually and
without these drastic changes in value were put forward. The one which
immediately suggested itself as the simplest, and from many points of
view the most desirable, was to leave the rates and taxes of existing
properties on their present basis, to impose them at their present rate
on the annual value of all unoccupied land, but to exempt from rates and
taxes all future buildings and improvements of every kind.

To illustrate the way in which this would work, let us revert to the
case of a block of slum property. As long as it remained in its present
condition the existing valuation based upon the annual rent obtainable
for it would apply, but any parts of it which now are or may hereafter
become unoccupied, would, instead of escaping as they do now from all
rates and taxes, contribute on the basis of the value of their sites,
which would be assessed at an annual rent for the purpose of comparison
with the existing valuations, at least until the capital values of the
whole rating area could be ascertained. If any improvements were carried
out the assessments would not be raised on that account, as they would
be under present conditions, and if a whole area were pulled down,
replanned and rebuilt, the assessment instead of being based, as it
would be to-day, on the annual value of the reconstructed property,
would be based upon the site value alone. Gradually in this way site
value would become the prevalent basis of assessment. "It is obvious,"
as the Committee said in 1913, "that unrating of future improvements is
from the economic point of view of far more importance than the unrating
of existing improvements; if we want to encourage new buildings and new
improvements, what is really important is to ensure that new
improvements (not old ones) shall be exempt from the burden of rates."
The Committee were, however, compelled to reject this suggestion at that
time on the ground that "it would cause an unfair differentiation
between the man who had already put up buildings or improvements, and
the man who put up buildings or improvements after the passing of the
Act." But as between buildings and improvements which existed before the
war and those which come into existence under post-war conditions no
such unfairness could operate, because the increase in the cost of
building even to-day is greater than the benefit which would accrue from
the unrating of improvements. The present is therefore the unique
opportunity for bringing into force this much-needed reform in the most
effective way, free from the difficulties which had to be met in 1913.
If it had been carried out immediately after the Armistice it would, in
my opinion, have done more than anything else to solve the housing
problem, and even now it is not too late. In fact, in view of the
present unemployment it would be most opportune. Incidentally it would
soon render unnecessary the renewal of the Rent Restriction Act. I
understand that something on these lines has been introduced in New York
to meet a similar problem.

A RATE AND A TAX UPON SITE VALUES

The Committee of 1913 were obliged to turn their attention to other
suggestions. They proposed:

(_a_) That all future increases in the expenditure of each Local
Authority which had to be met out of rates should be met by a rate upon
site values instead of upon the existing assessments; and

(_b_) That existing expenditure should be met to a small extent
compulsorily, and to a larger extent at the option of the Local
Authority, in the same manner.

There is no reason why these proposals should not be brought into force
simultaneously with that relating to new buildings and improvements.
They made these proposals conditional upon a substantial increase in the
grants in aid to Local Authorities, especially in necessitous areas,
from the Imperial Exchequer; and they suggested, although they did not
definitely recommend, that a part at least of this increased grant might
be raised by means of an additional tax upon site values. This, I think,
should certainly be done, and such a tax might be wholly or partially
substituted for the present Land Tax and Income-Tax Schedule A, which
are assessed on the wrong basis.

These proposals would, of course, involve the revival and revision of
the National Land Valuation established by the Finance Act, 1909-10,
which should be made the basis of all taxation and rating relating to
real property. This would be both a reform and an economy, because there
are at present several overlapping systems of valuation by Central and
Local Authorities, none of which are really satisfactory even on the
present unsatisfactory basis of assessment. The existence of such a
valuation frequently revised and kept up to date, and independent of
local influences, would be invaluable not only for purposes of rating
and taxation, but also in arriving at a fair price for the acquisition
of land for public purposes, and for the levying of special charges upon
the increased value due to particular public improvements, such as
railway extensions, with which I have already dealt.

I am not one of those who claim for these reforms that they would cure
all the evils from which the community is at present suffering, but I do
believe that there is no other and no better way of removing the
unfairness and the restrictions of our present methods of rating and
taxation or of setting free and stimulating the energies of our people
in the development of the resources of our country.

AGRICULTURAL QUESTIONS

BY RT. HON. F.D. ACLAND

P.C.; M.P. (L.) North-West Cornwall; Financial Secretary, War Office,
1908-10; Under-Secretary of State for Foreign Affairs, 1911-15;
Financial Secretary to Treasury, Feb.-June, 1915; Secretary to the Board
of Agriculture, 1915-16; a Forestry Commissioner. Chairman of the
Agricultural Organisation Society.

Mr. Acland said:--I begin by laying down in a didactic form five points
which one would like to see firmly established in our rural life: (i)
intensive production; (ii) plenty of employment at good wages; (iii)
easy access to land, and a good chance of rising upon the land; (iv)
real independence in rural life; (v) co-operative association for many
purposes.

Intensive production is most important. It is so easy to say the farmer
_can_ get more out of the land, and the farmer _should_ get more out of
the land, that we are tempted to continue and say that the farmer _must
be made_ to get more out of the land. But it isn't so easy. It has been
tried and failed, and when any subject in our British political life has
been brought up to the boiling-point, and yet nothing effective has been
done, it is extremely difficult to bring it to the boil a second time.

It is worth while tracing out what has actually happened. The
Government's Agriculture Act of 1921 contained four great
principles:--(i) that we must have more food produced in this country
(_a_) as an insurance against risk of war, (_b_) so as to meet our
post-war conditions as a debtor nation by importing less of our food
supplies; (ii) that as the most productive farming is arable farming,
and as by maintaining a proper proportion of arable we can on emergency
make ourselves independent for our food supplies for an indefinite time,
farmers should be guaranteed against loss on their arable rotations;
(iii) that if farmers are to be required to produce more they must have
clear legal rights to farm their land in the most productive way, a
greater compensation for disturbance; (iv) that as the first three
principles give security to the nation and to the farmer, it is
desirable also to give security to the worker by permanently continuing
the war-time system of Agricultural Wages Boards.

These principles were duly embodied in the Bill as it left the House of
Commons:--

(i) The Ministry of Agriculture, acting through the County Agricultural
Committees, was given powers to insist on a certain standard of arable
cultivation, as well as in minor matters, such as control of weeds and
of rabbits;

(ii) The difference between the ascertained market price and the
estimated cost of production on his wheat and oat acreage was guaranteed
to the farmer, the guarantee not to be altered except after four years'
notice;

(iii) The landlord had to forfeit a year's rent if a tenant was
disturbed except for bad farming, or four years' rent if the disturbance
was capricious;

(iv) The existing Wages Board system was continued.

THE DESTRUCTION OF A POLICY

The gradual destruction of this policy began in the House of Lords. They
allowed themselves to be swept away by the popular cry against
Government interference with industry, and cut out the power of control
of cultivation. The Prime Minister had said that this was an absolutely
essential part of the Bill, and of the Government's policy, but the
Government quietly and characteristically accepted the Lords' amendment
and the Bill was passed.

Then troubles began. Other industries began to ask why the Government
satisfied agriculture and not them, and as the Government could not
plead their control of agriculture in justification, no real reply was
possible. Also the cold fit came on as regards national expenditure. The
Bill for the corn subsidies threatened to be very high. Though Europe
was starving, it could not buy, so cheap American grain flooded our
markets; but cost of production here was still at its peak, and, for
oats especially, the amount to be paid to the farmer threatened to be
large. It was realised that it might cost 25-30 millions to implement
the guarantees for the first year, and perhaps 10-12 millions a year
later. In short, the guarantees had to go. Instead of four years' notice
of any change, a Bill to repeal the great Act was introduced five months
after it had been passed. And it was unfortunately part of the bargain
with the farmers who received for the single season perhaps six or
eight millions less than they might have been entitled to under the Act,
that the Wages Boards should be abolished--and they were. There remained
of the original structure only the depreciation of the value of all
agricultural landowners' property by about one-twentieth, owing to the
extra compensation for disturbance.

Every one felt that they had been had, and they had been. The industry
which had lately been talked up and made much of was dumped into the
dustbin. The farmers had lost their guarantees on the strength of which,
in many cases, they had bought their farms dear or planned their
rotations. The labourers, who particularly needed the protection of
Wages Boards during a time of fall in cost of living and unemployment,
had lost all legal protection. The landlords, willing enough to give
what was asked of them if any national purpose was to be served, found
that their loss brought no corresponding national gain. Agriculture
retired as far as it could from any contact with perfidious Governments,
to lick its wounds.

That is not a good basis upon which to build intensive cultivation or
any other active policy. There being now no legal or patriotic call to
intensive production, we are driven back to ask, "Does intensive
production pay?" and the broad answer is that at a time of low prices it
does not. There is no doubt that slowly and steadily education will
gradually improve farming, and that farmers will learn to find out what
parts of their business pay best and to concentrate upon them. There is
also no doubt that even at low prices there is plenty of scope for
better farming, and that better manuring, particularly of grass land,
will pay. But the farmer is faced with an economic principle--the law of
diminishing returns. It may be stated thus: beyond a certain point which
rises and falls directly with the value of the product, extra doses of
labour and manure do not give a corresponding return. It is this
principle which accounts for what we see everywhere--that farmers are
tending to economise as much as they can on their labour and to let
arable land go back to grass.

And if this is clear to farmers who are thinking of intensive arable
farming, still more is it true in comparing arable with grass. If you
take the same sort of quantity of arable and grass farms, farmed by men
of the same skill and diligence, over a range of seasons under low world
prices for farm produce, you will, I believe, find something like this:
grass land needs half the capital and one-third of the labour of arable;
it produces three-quarters the receipts with half the payments, and
yields double the profit per acre and four times the profit on capital.
The moral of all this is clear. Unless the nation is willing to go back
to protection for agriculture, which I am glad to believe in the general
interest unthinkable, and unless it is willing to guarantee the farmer
against loss from that method of agriculture which means most production
and most employment, we must let the farmer set the tune and farm in the
way it best suits him to farm. We must try, in fact, not to talk too
much nonsense about intensive production as the cure for agricultural
depression. It is useful to remember that all countries overseas which
combine high wages with agricultural prosperity have a very low output
per acre judged by our standards.

EMPLOYMENT AND WAGES

It follows directly from what I have just said that a time of high costs
and low prices like the present, like the time of lower costs but still
lower prices of the late '80's and early '90's, is not a favourable time
for expecting employment to be brisk or wages high. And reasons other
than those which we have yet considered make the farmer feel his labour
to be specially burdensome at present. He finds that the prices he gets
on the average are one and one-third times what they were before the
war: what he has to buy costing from one and a half to one and
two-thirds what it cost before the war; and he is expected in very many
counties in England and Wales to pay his workers about double what he
paid before the war. This is a strong point for him. But the labourers'
position is just as strong. "I was not sufficiently well paid before the
war. If this is to be recognised in any way at all, I must at the
present cost of living (185) have double my pre-war wages." It is
certainly beyond all question that 30/- a week, which is the present
wage over a large part of England, is not, even with only 3/- a week
rent for house and garden, enough to keep a man and his wife and family
in a state of real efficiency. Yet I know from personal experience that
this fact is not properly recognised in practice. If one tries to pay
more one is regarded as a very rich man, and an extremely stupid one--an
idea erroneous as to one's wealth and possibly exaggerated as to one's
mentality.

How have the two conflicting views of farmer and labourer been
reconciled in practice. I can only say that so far as my own knowledge
extends--bearing in mind that the farmer has not the business man's
habit of cheerfully setting off a bad year against a good (for the
business man knows that trade must improve some time, and then he will
make profits, while the farmer has no certainty that things will
improve)--things might well have been worse. There has been a good deal
of mutual consideration and desire to make the best of difficult
circumstances. I have, however, little doubt that it would have been
better had the Wages Boards, which had controlled the rise in wages
during the rise in the cost of living, regulated the fall in wages
during its fall--relaxing control perhaps later when things became more
stable.

The reason why I think that things might have been worse is that the
District Wages Committee left a good legacy to the voluntary
Conciliation Committees which followed them--the men serving on the
latter were those who under the Wages Board system had learned to
negotiate with and to know and respect the workers--generally some of
the best farmers in their districts--and they genuinely tried not to let
the workers down with too much of a bump; on the other hand, they knew
that the only value their recommendations could have was that they
should be voluntarily observed, and therefore they took care not to
recommend rates higher than those which the least favourably situated
farmers in the district could manage to pay--which meant rates lower
than many might have been willing to give. This means that any general
rate agreed to voluntarily will be rather on the low side. But I would
rather have a rate which is generally observed, even if it is rather
low, than that every farmer should be a law unto himself. If there is no
recognised standard, and one man with impunity pays a lower rate than
his neighbours, other rates also tend to come down, and then the process
begins over again.

Looking to the future, the only thing that I can say with any certainty
about the wages question is that it needs very careful watching. Let us
be sure first of our principle, that the first charge on land, as on any
other industry, should be a reasonable standard of living for the
workers. Then let us be sure of the fact that there is over a very large
part of England and Wales no certain prospect of an improvement in the
condition of the labourer compared with conditions ten years ago. The
dangers to be feared are that in the present lamentable weakness of the
men's unions large sections of farmers may break away from the
recommendations of their leaders; and that if depression continues and
war savings become depleted farmers will tend to push wages down in
self-preservation. These things must be watched. If the general
condition of agriculture improves without a corresponding improvement in
the workers' condition, or if conditions get worse and the brunt of the
burden is transferred to the labourer, we ought to be prepared to
advocate a return to the old Wages Boards or the adoption of a Trade
Board system. It must, I think, be a cardinal point of our Liberal faith
that though it is better to leave industrial questions to be adjusted as
much as possible by the parties concerned in the industry, the State
must be ready to step in in any case in which the workers have not
developed the power by their own combination to secure reasonable
conditions and prospects. It is to the prospects that I now turn.

ACCESS TO THE LAND

I mean by this that there should be as many chances as possible for men
and women who have an inclination for country pursuits to take up
cultivation of the soil; the freest opportunity for experiment in making
a living out of the land; and good chances for those who have started on
the land ladder to rise to the top of it.

The three things which stand in the way are:--

(i) The cost of building and equipment;

(ii) The practice under which the cultivator provides all the movable
capital;

(iii) The handicap on free use of land imposed upon its owners by the
compensation clauses of the Agriculture Act.

These obstacles do real harm, in the first place, because a very large
proportion of farms in this country are the wrong size: too large for a
man to work with his hands, and too much for him to work with his head,
as Sir Thomas Middleton has well said. Figures show quite conclusively
that whether you take production per acre or production per man, the
farm of from 100 to 150 acres is economically the worst-sized unit.
Probably more than half of our farms lie between 70 and 100 acres. We
should get far more out of the land if all were either below 80--so that
a man and his family could manage them--or above 180, so that there
would be a chance of applying to production the most scientific methods
and up-to-date machinery.

But movement, either towards breaking up existing holdings or throwing
them together, will be extremely slow. The one process means building
new houses and buildings, which is prohibitive in price; and the other,
also fresh building and the abandonment of hearths and homes, which is
prohibited both by price and by sentiment. Any change in either
direction is almost prohibitive to the new poor landowner class, because
if one makes any change, except when a tenant dies or moves of his own
accord, one forfeits a year's rent.

I have not yet mentioned the difficulty about capital. Under our British
method, if a man wants a farm he must have capital--about L10 per arable
acre and about L5 for grass. This is a great bar to freedom of
experiment and the greatest bar on the way up the agricultural ladder.
There ought to be free access to our farms by town brains, which can
often strike out new and profitable lines if given a chance. It is not
good for agriculture, and it does not promote that sympathy and contact
and interchange which should exist between town and country, that a
start in farming should need a heavy supply of capital. If our
landlords were better off they might well try some of the continental
systems, under which the landlord provides not only the farm and
buildings, but the stock and equipment, and receives in addition to a
fair rent for the land half the profits of the farm. But it is vain to
hope for this under present conditions, and, for good or ill, the newly
rich does not buy land. He knows too much, and he can get what he wants
without it. He may lease a house, he does take shooting, but he won't
buy an estate.

When thinking of the importance of freedom of experiment and of a ladder
with no missing rungs, I have my mind on the possibility of the owner of
one estate of from 5,000 to 10,000 acres throwing all the farms and many
of the fields together and making his best tenants fellow-directors with
him of a joint enterprise, one doing the buying and selling, one looking
after the power and the tractors and implements, one planning the
agricultural processes, one directing the labour and so on. This gives a
prospect of the greatest production and the greatest profit, and it
gives a really good labourer a chance which at present he has not got.
At present, unless he leaves the land, in nine cases out of ten once a
labourer always a labourer. My vision would give him a chance to become,
first, foreman, then assistant manager, manager, director, and
managing-director. It ought to be tried--but how one's tenants would
loathe it, and quite natural too! At present if things go wrong, if it's
not the fault of the Government or the weather, it's the farmer's own
fault. On my joint-stock estate every director and manager would feel
that all his colleagues were letting him down and destroying his
profits. It is hard to make people accept at all readily, in practice,
the teaching that they are their brothers' keeper.

The scheme could hardly be started with men accustomed to the present
methods, and the cost of obtaining vacant possession of land would make
it difficult to try with new men. I am sure, however, that something of
the sort is a good and hopeful idea, and the best way of making the
ladder complete. And I am emboldened to think that something of the sort
will be tried gradually in some places, when I see the number of
landlords' sons who are in this and other universities taking the best
courses they can get in the science and economics of agriculture. They
know this is the only way to retain a remnant of the old acres. It is
quite new since the war--and a most hopeful sign.

INDEPENDENCE

I need not urge the importance in our villages of real independence of
life. It was the absence of independence combined with long working
hours and little occupation for the hours of leisure, which, more than
low wages, caused the pre-war exodus from the country. Should the
prospects of industry improve, but agriculture remain depressed, there
will be another exodus from the country-side of the best of the young
men who have come back to it after the war. It is of first-class
importance, both from the national and from the agricultural point of
view, that they should stay, for there was a real danger before the war
that agriculture might become a residual industry, carried on mainly by
them, too lethargic in mind and body to do anything else.

In a preface which he wrote to Volume I of the Land Report, as chairman
of Lloyd George's Land Inquiry Committee (it seems a long time ago now
that Lloyd George was a keen land reformer), my father sketched out the
idea of setting up commissions to report parish by parish in each
county, in the same way that commissions have reported on the parochial
charities. They would record how the land was distributed, whether the
influence of the landowners told for freedom or against it, whether
there was a chance for the labourer to get on to the land and to mount
the ladder. Whether there was an efficient village institute, whether
there were enough allotments conveniently situated, whether the
cottagers were allowed to keep pigs and poultry, and what the health and
housing were like.

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