1

laws relative to the rights and duties of the owner and hirer of land tend to follow an invariable order of change; the parties are permitted to make their own bargains; land may be dealt with as any other commodity." When this order of change has been perfected, we may assume that the owner of land can do with the land as he pleases, and let it, if he likes, on any terms that conform to the ordinary rules of lawful contract. Recently, however, in the United Kingdom, of all places, before the old fetters have been altogether removed, new fetters have been imposed. In other words, a reversion has been made towards the ancient confusion of ownership and tenure, and part of the rights of the owner have been transferred to the tenant. Some account of the principles involved will be given in the next chapter.

1 Richey, op. cit., p. 8.

CHAPTER IX.

CONTRACTS FOR THE HIRE OF LAND.

§ 1. Free Trade in the Hire of Land. In his excellent work on the Irish Land Laws,1 Dr. Richey, with the object apparently of illustrating his subject by the light of contrast, gives, by way of introduction, an account of the French law as laid down in the Code Napoleon.2 The principles of this law were in the main those developed by the great Roman jurists, who were altogether free from feudal influences. Briefly described, the French law is "the most complete and equitable application of the rules of free trade to the case of the letting and hiring of land." According to this system, the same rules are applied to land as to any other commodity; the relative rights and obligations of landlord and tenant depend entirely on contract; any kind of agreement may be made, not showing signs of force or fraud or other flaw that would vitiate any contract; and it is only in so far as the agreement is silent that the law steps in to secure an equitable division in case of dispute. The same principles are applied with the utmost impartiality to landlord and tenant. It is certainly remarkable that in the country to which we are most often referred for examples of small cultivation, the principles of the law should be so strictly unbiassed. The subject may be considered with reference to three topics: rent, compensation for improvements, duration of tenancy.

§ 2. Rent under the Free Trade System. The same principle is applied as in the case of the sale of anything. 1 Irish Land Laws, Chs. III.-V. 2 Ch. V., p. 33.

The use of the land is considered as sold for a term of years, with payment by instalments. Now, in ordinary sales, the court would only interfere if the price seemed so ridiculously high (or low) as to imply misrepresentation on one side or the other. It is assumed, then, that the landlord must have covenanted that the annual produce should at any rate exceed the rent. Accordingly, if the crop fails he must share in the loss. In practice some rule is necessary, and liability to share in the loss only arises if the crop is less than half an average, and in cases of a term of years the tenant must show that, taking good years with bad, he has lost more than half the crop. Thus the law does not attempt to determine "fair" rents; it leaves abundant scope for enterprise and speculative bargains; it only steps in when the implied condition, namely, that the landlord lets a valuable subject (possession utile) is not fulfilled, the practical test being this rule of half the crop.1

§ 3. Fair or Judicial Rents. In Ireland generally, and in Scotland partially, the law in recent years has been extended much farther, and in many quarters a still greater extension is demanded. Government has undertaken to fix fair rents for a term of years, not by the application of any broad principles, but by precise valuation in every particular case. It is interesting to notice the grounds upon which this remarkable inroad has been made into the "fair field" of contract. I pass over, of course, the politi cal exigencies that cannot be regarded as economic. For the present purposes it is enough to consider whether judicial rents are in any cases economically justifiable.

It is alleged that in contracts for the hire of land, landlord and tenant are not on an equal footing, that there may be land-hunger on the one side and monopoly on the other. It may be at once granted that the old cottier rack-rents of Ireland - greater than ever could be paidwere unjustifiable even on the free trade principles of the 1 Cf. Tenant's Gain, p. 97.

French law. And we may go farther and admit that, with land-hunger and agrarian pauperism of this kind, freedom of contract was a vain name; the tenants had neither the means nor the audacity to appeal to the courts, even if there had been laws in their favour; and, accordingly, the direct intervention of government was desirable. But it must be carefully noted that, so far, the real grounds of the intervention were, first, the right of the state to control monopolies, and secondly, the duty of the state to alleviate pauperism, and these two grounds are in their nature essentially distinct. It may be questioned if the fundamental evil in land-hunger is ever rack-renting. Nothing can be more certain than that where minute subdivision of the soil exists, the fair rent (judged by the capacity of the tenant to pay) is something below zero; and it may be doubted, when the holdings are sufficiently large, if rack-renting in itself has ever been such as to justify governmental interference. In the case of real agrarian pauperism, judicial rent is simply a mode of outdoor relief;1 and the relief is generally too small to alleviate distress, and in reality tends to perpetuate the evil by taking away another inducement to emigration.

It is worth observing that the arguments I have been examining may be applied to the lowest forms of labour generally. It may be said that capital and labour are not on an equal footing, e.g., as in the case of a master-sweater and his victims, and that the house-rents of the poor are governed by monopoly. But the attempts under the old poor laws to determine fair wages, and to provide houseroom at fair rents, are the reverse of encouraging.2

It is plain, however, that if the cultivators are not paupers and the land-owners are not monopolists, judicial rents, if advocated, must be supported on other grounds. The ordinary British farmer fortunately neither suffers from land-hunger nor from landlord tyranny. At present,

1 It is like the allowance for house-rent, described in the Poor Law Report (1834). 2 Cf. infra, Ch. XI., § 7.

indeed, the hunger is not for the land but for the tenant, and the land-owner in many cases has to bribe his tenants to stay. In these circumstances it is not easy to give the appearance of plausibility to the demand for judicial rents.

It is true that it is extremely difficult1 to forecast for a term of years the rent which a piece of land can really afford to pay; to pass over particulars, there is the uncertainty of seasons and the uncertainty of prices. But to suppose that governments can foresee what is hidden from those most interested is worse than rural simplicity. The best answer, however, to the proposal for governmental interference, on the ground of superior knowledge, is that the information, if it exists, should be published; at present, in reality, forecasts of judicial rents would probably not be so reliable as those of meteorology.

The fatal objection to judicial rents ex post facto, that is to say, on behalf of tenants in present occupation is, that the competition of more efficient tenants is excluded. The practical result is to hand over to the present tenants part of the rights of ownership. It must also be observed that, if the state is to come in to adjust reductions on the ground of unexpected losses, equitably, it should also come to the aid of the land-owners in the contrary case of unexpected profits.

There is one other reason sometimes advanced in support of governmental interference in exceptional cases: when a large number of tenants are in danger of insolvency, if their rents are exacted, it is maintained that agriculture is an industry of such magnitude, and the capital and skill required in it take so long a time to build up, that anything approaching the ruin of the present tenants would be a national disaster. In the first place, however, it must be borne in mind that agriculture has steadily progressed in spite of a series of prophecies of impending ruin during several centuries, especially the present; and secondly, that it would be for the interest of the landlords, in the 1 See infra, Bk. II., Ch. XIV., Appendix.