Changes in Landownership in England
I
A GREAT change is taking place in the ownership of English land, mainly as the result of heavy taxation. During the war, while the incomes of many classes were rising rapidly, landowners were debarred by legislation from raising their rents, though their taxes and all their expenses were increasing. Simultaneously, most farmers were able to make very large profits, owing to the increased prices of agricultural produce. Thus, when the war ended, large numbers of owners of land, suffering from or threatened by serious poverty, eagerly jumped at the chance of selling many of the farms they owned to the tenant farmers. The tenants, with large balances at; their banks as the result of war-profits, were temporarily bitten with the idea of becoming freeholders, and often paid high prices, which many of them have since repented. In addition, many people who had made money as manufacturers or merchants during the war were fired with the desire to establish themselves and their families as landed gentry, and sometimes bought whole estates when they were offered for sale; or, alternatively, bought the mansion house and pleasure-grounds, leaving the tenant farmer to buy the purely agricultural land.
The landowners who sold at this period did extremely well for themselves from a pecuniary point of view. More recently, owing to the depression of trade and the fall in agricultural prices, there have been fewer willing buyers of land, and sales have been more difficult to effect.
Nevertheless, a good many properties were sold even in the year 1921, because the owners found that it was impossible for them to meet the heavy 1axes imposed upon landed property after paying the increased charges necessary for the upkeep of their estates.
Some idea of the extent to which changes in landownership have been taking place may be gathered from the fact that, in the last five years, one firm of auctioneers and land-agents has effected sales aggregating nearly two million acres; the total area of England and Wales and Scotland is fifty-six million acres. Thus, this one firm alone has, within the brief period of five years, dealt with changes of ownership covering roughly four per cent of the total area of Great Britain.
Before considering what effect these extensive changes in landownership are likely to have upon the face of England, it is worth while to give one or two figures to indicate the financial position of English landowners.
In the first place the figures published by the Inland Revenue Department emphasize very forcibly the statement just made that, while the incomes of most classes in the community were greatly increased during the war, those of landowners remained stationary.
GROSS INCOME BROUGHT UNDER REVIEW IN THE UNITED KINGDOM FOR INCOME-TAX ASSESSMENT
Schedule A
Total Lands
1918—14. £1,107,000,000 £52,284,000
1918-19. 2,446,000,000 51,980,000
Thus, while the total gross income of persons liable to income tax was more than doubled in five years, the portion of that total derived from the ownership of land was slightly reduced.
The figures, it will be noticed, relate to the whole of the United Kingdom; but Irish landowners do not play an important. part in the picture. During the past thirty or forty years the Government of the United Kingdom has persistently encouraged and assisted Irish farmers to become the owners of the land they cultivate. This has been done partly by lending money out of the public Treasury at a low rate of interest ; partly by an actual subsidy in cash to induce the Irish landowner to sell, and the Irish tenant to buy. In effect, Irish tenants have received the freehold of their farms in return for a terminable annuity considerably less in amount than the rent they were previously paying; Irish landowners have at the same time received a much better price than they could possibly have obtained in a free market. The cost of this transaction has been met out of the exchequer of the United Kingdom, and has fallen in the main upon English taxpayers. Whether any readjustment will be made, now that the Irish Free State has been set up, is more than doubtful. From the point of view of this article, the matter is of importance only because the cost of Irish land-purchase represents one of the many additional burdens that have been placed in recent years on the shoulders of English taxpayers, quite apart from the terrific burden of war taxation.
And it is on landed property that taxation falls most heavily. This is the result partly of old traditions, partly of modern politics. In past centuries, when land was the principal as well as the most visible source of wealth, it was natural that the rulers of the country should treat land as the main basis for taxation. Even when attempts were made to tax movable as well as fixed property, they were not very successful, because of the greater facilities for evasion. The history of taxation in England is full of examples of acts of Parliament establishing the general taxation of all property, and even specifying that land should be taxed only after other forms of property; but in practice the burden remained upon the land, because the land could not be moved and could not escape observation. It is only when we reach the nineteenth century that the enormous growth of industrial wealth, and the concurrent improvement in administrative methods, rendered possible the raising of a large revenue from incomes other than those derived from landownership.
But the landowner still continues to pay on the average more than his fair share, because it is less easy for him to conceal his income. For the purpose of income tax, the annual value of the land is officially assessed on the approximate basis of the rent paid, and the tenant is required to pay the tax and deduct the amount from his next payment of rent to his landlord. Thus the landowner cannot escape payment of the full amount. On the other hand, the revenue authorities, in making assessments of incomes derived from business profits or professional earnings, are to a considerable extent at the mercy of the taxpayer who — if he is dishonest — can often successfully represent his income as being much less than it really is.
The effect of these considerations has been intensified by the political campaign of recent years against landownership in particular and capitalism in general. As a result of this campaign, — inspired partly by land nationalizes, partly by Socialists, — there has been a constant tendency to increase the relative burden of taxation falling on large properties. Up to a point this movement may have been justified. The primary principle of taxation, that men should be taxed according to their ability to pay, requires that the rich man should pay at a relatively higher rate than the poor man. Unfortunately, in England the principle has been carried so far that, while the majority of voters pay no income tax at all, a small minority of rich persons are taxed at a rate which is both unjust to them and injurious to the nation. In the case of persons engaged in industry or commerce, the present enormous scale of taxation in England handicaps industrial development by preventing the accumulation of the necessary capital; in the case of the owners of land, the high taxes are one of the main causes of that break-up of estates with which we are here concerned.
It should be added that the burden of taxation does not end with the national income tax and super-tax. Local taxation has risen almost as rapidly as national taxation, and falls with special weight upon the owners of real property.
II
To see how these cumulative burdens affect the financial position of the landowner, it is desirable to examine a few actual figures. Interesting particulars were published in the London Times of August 4, 1921, of one of the typical great. English estates — the Duke of Bedford’s, of 16,000 acres, situated in the counties of Bedfordshire and Buckinghamshire. The year dealt with is 1920. In that year the owner received a gross rental of £23,437. Out of t hat, he had to pay for the upkeep of the estate no less than £18,648. This figure includes, not merely management charges and necessary repairs and renewals, but also such expenditure upon improvements as every conscientious landow ner feels bound to make, in order to keep his estate up to date. In addition, there was a sum of £3684 which had to be paid, mainly for local taxes. The residue left to the owner was only £1105. Yet the income tax on land is so assessed that, though this was all t hat w as left to the owner to spend on himself, when he had done his duty by his estate, he was called upon to pay no less than £3623 for income tax and super-tax. In addition, social custom and local traditions required him to pay various sums, amounting to over £2000, in the shape of pensions to employees and donations to the clergy and to local institutions. The final result, as certified by the duke’s accountants, is that this agricultural estate cost him in the year 1920 a net sum of £5190, which he had to meet out of his other sources of income, for example, his London house-property.
But there are many owners of agricultural estates in England who have no other sources of income, and for them the present burden of taxation is absolutely crushing. Some of them try to stave off the calamity , of absolute collapse by cutting down their expenditure on the upkeep of their estates. Thus, on a number of estates brought under review by an organization of Scottish landowners, it is noticeable that the cost of upkeep in 1920-21 was, in some cases, actually less than it was ten years previously. When it is remembered that the price of labor and of all materials had risen enormously in that period of ten years, it will be seen that the reduction in expense can only mean a lower standard of upkeep. The money that would have been voluntarily spent by the owner for the maintenance and improvement of his estate was forcibly taken from him by the Government, partly to meet the cost of the war, but partly also to pay for an enormously expensive civil administration.
Particulars of one large estate in Scotland were given by Mr. Prctyman, a well-known English landowner, in a debate in the House of Commons on June 16, 1921. The actual income of the property in 1920 was £42,490. Nearly half that sum was spent on the upkeep of the estate; and the word ‘estate’ here, as in the previous cases quoted, refers only to the agricultural portion of the property, not to the owner’s private mansion and park. Nearly all the rest of the gross income was absorbed by local taxes and other compulsory local charges, and by the national charge for income tax and super-tax, leaving the owner for his private use the sum of £467. These figures were admitted by the Chancellor of the Exchequer, himself a Scotchman, in the course of the same debate, to be entirely accurate. To quote his words: —
‘With these figures and property I am perfectly well acquainted, and I know that there is no exaggeration in the statement made concerning what appears to be a rent-roll of endless dimensions; but when the whole thing is boiled down to its ultimate result, this landed proprietor, who is regarded as the child of smiling fortune, receives £467 in the year.’
The above case may be an extreme one, but it is beyond question that English and also Scotch landowners, though some of them may still possess apparently enormous rent-rolls, are in reality in a condition of real poverty, unless they have some other source of revenue than the land. Observers from outside see the stately mansion; they learn that the broad acres in the surrounding country all belong to the occupant of the mansion; and they assume that he must be a ‘child of smiling fortune.’ They forget the enormous burdens which social custom and an hereditary sense of duty impose upon the landowner. Not only must he keep in good repair all the farm-buildings on his estate, and provide the capital for improvements, but he is also expected to subscribe largely to all local charities and to be ready with money when any local need arises.
Custom also requires the landowner to provide cottages for the people employed on his estate; and the rents charged for the cottages represent a very inadequate return upon the capital expended. Often, indeed, when the cost of keeping the cottage in repair has been met, anti the local tax levied upon it has been paid, there is nothing left for the owner; there may even be an appreciable loss.
Thus a very large portion of the income that a rural landowner nominally receives from his estate goes back to the estate again. Even the portion that remains for his private use he cannot expend cut irely as he will. He is expected to keep up the amenities of his mansion and park, and to maintain generous traditions of hospitality. In practice, also, most rural landowners, from an hereditary sense of duty, give a great deal of their time, without remuneration, to local administrative services of one type or another. In a word, the ownership of land in rural England involves obligations which place the landowner in a much worse position financially than that of a man drawing a corresponding income from stocks and shares. He cannot, therefore, face the same rate of taxation; yet, in practice, as above indicated, he is more heavily taxed. The inevitable consequence is that many landowners can no longer maintain their position. They are compelled to abandon their responsibilities in order to live.
In not a few cases the owner of the estate, unwilling to leave the locality endeared to him by long family traditions, takes refuge in one of the smaller houses or cottages on the property, where he can just afford to live on the narrow income remaining to him. A well-known land-agent recently gave to the present writer a description of such a removal witnessed by himself. He had gone down to a country estate, to arrange with the owner for the sale of his property. As he arrived at the mansion, he found the owner, an old man of seventy-eight, at that very moment engaged in leaving his ancestral home, to take up his quarters in a little cottage on the estate. Ilis wife, almost as old as himself, had collected some of her specially beloved possessions in a little hand-barrow, which she was herself wheeling to the new home.
III
Such a picture may leave unmoved the political demagogue, who has won his posit ion by appealing to the passion of envy; but from the human point of view, it. is a personal tragedy, and from the social point of view, it probably involves a serious injury to t he community. Doubtless many English landowners have lived more or less idle lives, and have devoted more of their time to hunting and shooting than to giving service to the community. Nevertheless, taken as a body, they have been one of the most valuable elements in the nation. The very conditions under which they have lived have given them qualities which are of the highest national value — a sense of duty, the spirit of sportsmanship, the spirit of comradeship. The squire and his family, until quite recent years, were the hereditary leaders of village life; there was a personal as well as a pecuniary relationship, and this personal relationship between squire and cottager has been reproduced in t he relationship between officer and private in the supreme test of the battlefield. This relationship, which may best be described as personal friendliness combined with mutual recognition of difference of rank, is, of course, altogether distasteful to the modern democrat, who objects to any social inequalities, whether real or artificial, because he has filled his mind with the false belief that there are no inequalities in nature. Doubtless, also, in many cases inequality of social position does produce unjust ifiable arrogance on the one side and a lack of independence on the other. Whether we shall ever be able to escape entirely from these admitted evils of inequality is perhaps doubtful; but it is quite certain that, if we attempt to remove these evils by trying to abolish all inequalities, our loss will be greater than our gain. The pursuit of the false ideal of universal equality can, in the long run, result, only in universal degradation.
This consideration carries us beyond the question of English landownership, but it affects that question intimately. The ruin of the rural landowner only brings him down, at worst, to the standard of comfort that the laborers on his estate have long been compelled to accept. From the point of view of universal social equality, no injustice is done; but from the point of view of the amenities of life in rural England, the harm is immense. It cannot be too strongly emphasized that, the land of England to-day owes its value, not to its inherent natural qualities, but to the work done upon it by man. The thing called a farm, with its buildings, its roads and fences and drains, is the product of human labor and enterprise. It represents a capital investment made by generations of landowners, who, instead of spending on themselves all the rents they received, or might have exacted, have progressively added to the value of the land by continuous expenditure upon improvements. The disappearance of the hereditary landowner will mean the loss of this convenient method for securing land-improvement.
No doubt, the tenant farmers who have become the owners of their farms will have an equally keen interest in improving the property they have acquired; but they will not as a rule have the necessary funds. A tenant farmer’s capital is generally all required for the current working of his farm. Many farmers have depleted their capital by buying their farms at high prices; and in the present state of dropping prices for agricultural produce, they will not as a rule be likely to obtain very lavish advances from their bankers. Therefore rarely will they be able to spend money on those improvements which the landowner used to finance.
The landowner, it must be added, seldom expected to obtain much direct return for the money he spent on improvements; often he was content if, by thus laying out part of his revenue, he retained a good tenant. On the other hand, the tenant farmer has always expected to secure a high rate of interest for his capital, as part payment for his manual and mental labor. In this respect, the farmer’s attitude will not be altered now that he has become an owner. He will still expect that any money he spends shall bring him a large return; otherwise he will not spend it. Therefore it is fairly certain that a good deal less will be spent on improvements.
Moreover, the improvements which the farmer will undertake will be purely of a utilitarian character. In part icular, the trees arc likely to suffer. Many farmers regard trees with dislike, purely for agricultural reasons. ‘We puts the muck on the land, and they sucks the muck from the grass.’ Beyond that is the consideration of the price which the farmer can get from the sale of the timber. Together, these two factors will certainly lead to a very extensive destruction of those broad spreading oaks and lofty elms which are such a marked feature of many parts of rural England. The farmer, intent — and excusably so — on securing the best return he can on t he money he has invested in the purchase of his farm, will seldom pause to consider for a moment what effect his operations may have on the beauty of the countryside.
Yet, from the wider national outlook, the beauty of the English countryside is one of the most precious possessions of England. Even in France, with a civilization older than that of England, this peculiar charm is rarely to be found. No doubt it is possible in many parts of England to increase the yield of the soil without destroying the beauty of the land. Indeed, in some cases, purely utilitarian improvements, such as better drainage and the judicious trimming of woods, now left untouched as a breeding-ground for game, would actually increase the amenities of the country. But, on the whole, the withdrawal of the influence and of the wealth of hereditary landowners is not likely to contribute to the improvement of English land, either in productive yield or in beauty of feature.
One special problem has already arisen in acute form. So many landowners are selling their homes, as well as their estates, that there are not enough purchasers for these country mansions. In some cases it has been possible to convert these private houses into public, or semi-public, institutions. For example, a few have been turned into convalescent hospitals, some into boarding-schools, and some into holiday resorts for town workers. Possibly more may still be done in these directions, but the prospect is not altogether hopeful; and in any event, the change involves partial destruction. In order to fit the house for its new use, it is generally desirable — or at any rate profitable — to strip off many of its most typical beauties. In advertisements of country houses for conversion to institutional uses, it is frequently stated that there is much valuable carving and paneling that can be removed before the house is converted.
Worse still occurs when no occupant at all can be found for the house. In that event, all that can be done is to pull it down and sell t he material for what it will fetch. Already this is happening. In the case of a house of historic interest or architectural dignity, this is a tragedy strictly analogous to the disappearance of the hereditary landowner. A distinctive feature of the countryside disappears entirely.
One asks also, with anxiety, what will happen to the park that is generally attached to the mansion. The parks of England are part of her pride. When they are owned by an old family, they are generally left entirely open for the enjoyment of residents in the neighborhood and of visitors. All that the owner does is to keep the park in good order; and he probably gets less actual enjoyment out of it than many of his neighbors, who walk in it as freely as if it were their own. Act, if the owner cannot afford to keep his mansion, he cannot afford to keep his park. Some newly rich man may purchase it, and to emphasize his pride of possession, may wall it round and treat it as a private close.
Worse still, it may be sold in bits, to be added to the adjoining farms or cut up for laborers’ allotments. Those who are familiar with such glorious parks as Arundel in Sussex and Penshurst in Kent will tremble to think of the loss that England and all her visitors may suffer, if these beautiful pleasuregrounds, which the hereditary landowning class has so long maintained, should presently be converted into potato fields. Yet, if the landowning class is destroyed by unbearable taxation, the rural treasures which it has created or preserved may easily perish with it. Seldom is it possible to retain the benefits of any institution while destroying the institution itself.
These are the dangers which threaten the English countryside to-day. They are partly the result of the enormous price that England had to pay in the Great War for the defense of her life and of the liberty of Europe. Even more are they due to the enormous increase in civil expenditure, which is directly traceable to the Socialist delusion that, by robbing a limited number of Peters, it is possible to find money enough to pay an unlimited number of Pauls.