# The Irish Land Acts/Land Purchase Acts up to 1896

SECTION X.
Early Stages of Land Purchase.
Under the Irish Church Act of 1869 for the first time State funds were given to help tenants to purchase their holdings, but this was not a Land Purchase Act, and its benefits were confined to a limited class.
Under this Act the Church Temporalities Commissioners were empowered to sell to tenants of Church Lands their holdings at prices to be fixed by the Commissioners themselves. If the tenants refused to buy on the terms offered to them, the Commissioners could sell to the public. The sale of each holding was for cash, or if one-fourth was paid in cash, the balance of the purchase money might be secured on a mortgage of the holding, to be paid off in thirty-two years by sixty-four half-yearly instalments.
The Commissioners sold in all to 6,057 tenants, at an average price of twenty-two and two-thirds years' purchase of the rents, and the total amount of the money given on loan was £1,674,841. The Commissioners of Public Works were the lending authority.
The terms of repayment and the rate of interest charged on loans were afterwards altered and reduced under the Purchase of Land Act of 1885, section 23.
The creation of a peasant proprietary in Ireland by State aid was tentatively commenced by the "Bright Clauses" of the Act of 1870. It was helped on by the Act of 1881, but the first real attempt to settle the Land Question on such lines was the "Ashbourne Act" of 1885, which enabled the entire purchase money of a holding to be advanced by the State. Mr. Balfour's Act of 1891, however, placed land purchase by State aid on a new and ingenious basis. That, as extended by Mr. Wyndham's Act of 1903, laid the foundations for the complete abolition of landlordism in Ireland.
The following pages give a short account of the Land Purchase provisions of these and the various Amending Acts.
Landlord and tenant (Ireland) Act, 1870.
Under what are known as the "Bright Clauses" of this Act, the landlords and tenants of agricultural or pastoral holdings could arrange for a sale of their holdings with State aid to be carried out in the Landed Estates Court. Upwards of two-thirds of the price agreed upon could be advanced by the Board ​of Works, to be repaid in thirty-five years by an annuity, at the rate of five per cent, on the loan. Under this Act, 877 tenants purchased their holdings, and the amount of loans issued was £514,536. The total purchase money paid by the tenant purchasers for their holdings was £859,522, being at the rate of twenty-three one-third years' purchase of the rent.
The Act of 1881 (the "Gladstone Act").
Under this Act the Land Commission established under the Act was empowered to make advances to tenants for the purchase of their holdings, and was enabled to purchase estates for re-sale to the tenants. The limit of advance was extended from two-thirds of the purchase money (as in the Act of 1870) to three-quarters. The terms of repayment were the same—an annuity of five per cent, for thirty-five years.
Upwards of 731 tenants purchased under this Act, and the advances made amounted to £240,801. These included advances to 405 tenants on seven estates bought under the Act (section 26) by the Land Commission in the Landed Estates Court.
The Purchase of Land (Ireland) Act, 1885 (the "Ashbourne Act").
Under this Act—commonly known as the "Ashbourne Act"—a sum of £5,000,000 was authorised to be advanced to the Land Commission to enable sales to be carried out between landlords and tenants by agreement, and to enable the Land Commission to purchase estates in the Landed Estates Court for the purpose of re-selling them to the tenants. The Land Commission was empowered to advance the entire purchase money subject to the retention of one-fifth by way of guarantee deposit for a period of about seventeen and a-half years, by which time an equivalent amount of the capital advanced had been repaid by means of the sinking fund. The deposit could be utilised if the tenant purchaser made default in his repayment, and if the landlord vendor was made a guarantor for the repayment of the annuity by the tenant purchaser. (Section 3).
The advances made under this Act were to be repaid by annual instalments (which included interest and sinking fund), extending over a period of forty-nine years.
In 1888, the £5,000,000 given under the Act of 1883 being practically exhausted, an additional sum of £5,000,000 was advanced to the Land Commission for the purposes of land purchase (51 and 52 Vic, c. 49). Under the "Ashbourne" Acts, 25,367 tenants (on 1,355 estates) became purchasers of their holdings, and the loans made amounted to £9,992,536. The rate of sale was seventeen years' purchase of the rent. (Report of the Irish Land Commission, 1902, p. 89). Under these Acts 101 estates were purchased in the Landed Estates Court for re-sale to tenants, and loans were issued to 2,039 tenants, amounting to £531,277.
Purchase of Land Acts, 1891 and 1896 (the "Balfour Acts").
The funds advanced to the Irish Land Commission for the purposes of land purchase having again become exhausted, Mr. Balfour, in 1891, introduced a new system, under which the landlord or vendor was paid in a specially created Guaranteed Land Stock (exchangeable for Consols at the option of the vendor), equal in nominal amount to the purchase money. This stock bears interest at the rate of two three-quarters per cent, per annum, and cannot be redeemed until the expiration of thirty years from the date of the passing of the Act of 1891. The dividends and sinking fund payments required for this stock are paid out of a "Land Purchase Account," established by the Land Commission (section 4), to which all moneys received on account of any purchase annuity for the discharge of an advance are paid. If this Land Purchase account is at any time insufficient to meet the dividends and sinking fund payments (owing, for instance, to default in the repayment of instalments), the deficiency is to be a charge on a "Guarantee Fund," established for the purposes of the Act (section 5). This fund consists of a cash portion and a contingent portion. The cash portion is mainly made up of the Irish Probate Duty (now Estate Duty) Grant and an Exchequer contribution, and the contingent portion consists of the Irish share of the local taxation (Customs and Excise) duties and certain local grants (section 6). Any deficiency in the Land Purchase Account is to be paid out of this Guarantee Fund. This financial expedient, of course, throws the securing of the repayment of the advances for land purchase on the ratepayers of the country, as any default will be recouped by deductions from the various payments and contributions in aid of rates that make up the Guarantee Fund. The amount of stock that would be issued for each county for purposes of Land Purchase was limited to twenty-five times the share of the county in the Guarantee Funds by the Act of 1891 (section 9). This limit having been reached in the case of County Wexford, it was provided that the limit be extended to fifty times the share of such county in the Guarantee Fund by Mr Wyndham's Purchase of Land (Ireland) Act, 1901 (1 Edward VII c. 3). By the Act of 1903 (section 46) the limit for each county was further raised to thirty times its share in the Guarantee Fund, which limit might be further raised to sixty times where the Treasury, on the certificate of the Lord Lieutenant, were of opinion that such increase in advances could be made without any risk of loss to the Exchequer.
Calculating on the basis of the financial rear 1913-1914, the Guarantee Fund for all counties of Ireland amounted to £2,870,473. The capitalised value of the Guarantee Fund on the thirty times basis is at present £86,114,190, but owing to increases beyond this thirty times limit which have been sanctioned by the Treasury in certain counties the present capitalised value of the Fund stands at £127,810,390. ​The total charge on the Fund to 31st March, 1916, was about 85½ million pounds in respect of advances made on the security of the Fund, and taking pending applications for advances into account, the approximate charges amounted at that date to about 116 millions.
The Act of 1891 was amended in various respects by Mr. Gerald Balfour's Act of 1896, which introduced, among other changes, a method of reducing every decade (up to thirty years after the advance was made), the annuity to be paid by the tenant purchaser. As under the "Ashbourne Act" of 1885, this annuity was calculated at £4 per cent. on the purchase money, two and three-quarters per cent. being for interest, and one and a quarter per cent. being sinking fund. Under Mr. Gerald Balfour's system, during the first decade after the purchase, the annuity is calculated on the original advance, and during the second and third decades on the portion of the advance which is ascertained to be unpaid at the end of the previous decade. At the end of the third decade the annuity is calculated on the amount of the advance then outstanding, and runs until the entire debt is paid off. The Act of 1896 also permitted the Land Commission to dispense with the whole or any part of the guarantee deposit required under the Act of 1885 if the security for the repayment of the advance was considered to be sufficient without it (section 29).
The number of loans issued under these Acts of 1891 and 1896 to tenant purchasers up to 31st March, 1916, was 46,834, amounting to £13,146,892, being 17·7 years' purchase of the rents (Land Commission Report).