CORRESPONDENCE.
THE ECONOMIC POSITION OF THE AGRI- CULTURAL LANDOWNER AND NATURAL OR SITE VALUE.
[To THE EDITOR OE THE "SPECTATOR."] SIB, —I am an agricultural landowner, living on and managing my own estate. The estate is free of encumbrances. The books are carefully kept, and checked every three months by an independent accountant, and a balance-sheet is drawn up each year. All accounts are paid monthly under discount. I undertake no improvements or alterations that are not absolutely necessary for the decent housing of the people and the stock and for the profitable cultivation of the land. No alterations or improvements are carried out without consulta- tion with the tenants and experienced estate workmen, and we only carry out work that is essential to keep the estate in working order. The land is naturally rich and fertile, and the farming of the estate is well up to, if not above, the average. Tap water is laid on to every farmhouse and cottage, with suitable drainage. There is every gradation of farm from three hundred acres to fifty acres. In order to give the farm labourers a chance of improving their position, there is a fair proportion of small grass holdings, varying in size from four to fifteen acres. The roads are good, and we are three miles from Market Drayton, an excellent inland market, which taps the potteries, Manchester, Liverpool, and Birmingham. The farming is mixed, cereal and root growing, grass and hay, but the chief industries are the fattening of stock and dairy farming, principally cheese-making. Two-thirds of the estate is rich grass land, provided the grass is treated with skill and one-third is fertile arable land. The rents are about the average ruling in the counties of Cheshire, Shropshire, and North Staffordshire. I make these statements in order to show that this is a favoured district for experienced, hard- working tenants.
Now what do the results show ? The results show that if all the money that has been spent by the landowners of this estate on farm houses, outbuildings, cottages, repairs and improvements, roads, water supply, drainage, and fencing were invested at 4 per cent, it would cover the rent of this estate. In other words, the tenants are paying 4 per cent, on the actual hard cash laid out by the landowners on the agricultural portion of the estate, and are paying nothing for the land that they are farming. An experienced agricul- tural writer in the Times lately stated that the average over the country only worked out at 3 per cent. On the probable selling value of the estate, if placed in the market, the net return on that sum would not exceed 2 per cent., so that if I were to sell the estate at its present selling value and invest the sum obtained in securities bearing 4 per cent., I should, I think, nearly double my present income. Out of every £100
in rent that I receive I pay away about £45 in income tax, tithe, local taxes, fire insurance, and the necessary repairs and improvements. The remaining £55 is spent in dealings with the local tradesmen and in the payment of a small staff of private servants.
I understand the natural or site value of land to be the value of land after all improvements due to the expendi- ture of capital and labour have been deducted. I am prepared to prove by facts and figures that if all these deductions are made agricultural land has no natural or site value. The President of the Surveyors' Institution, a well-known practical agriculturist, who has kept accounts for the last twelve years over an area of three thousand acres, stated last year in his presidential address : "So far as agricultural land is concerned, it is well known to moat of us that if a fair and just estimate were made of the expenditure by owners on the improvement of the land, and this were allowed as a deduction in arriving at the unimproved value, there would be few cases where any value would remain upon which to assess taxation." I further understand that the site taxers propose to take local rates off all buildings and improvements, and place them on the site or natural value of the land. But if agricultural land has no site value, where is the money to come from to meet the local requirements of the district ? I conclude that the site taxers would say" from urban districts," but are investors in urban districts to be singled out for special taxation in order to relieve this estate of its local rates ? Is that a just proposition P Is that practical politics ?
I have stated that agricultural land has no natural or site value after all improvements due to the expenditure of capital and labour have been deducted. I always enjoy (wherever possible) bringing theories, especially theories concerning country life and work, to the test of practical experience. In proportion to the size of the estate there is too large an area under wood, so I am clearing thirty acres of its trees, the stumps being still left in the ground. The land is naturally rich fertile soil. It is derived from the New Red Sandstone rock, a soil rich in mineral plant food and rich in humus, the humus haying accumulated from the leaves that have fallen from the trees for a great number of years. I would let this land at a mere acknowledgment rent, say 5s. per acre for a lease of twenty-one years, the terms of the lease to be as follows : (I) Thirty acres of rich laud, clear of trees, but the stumps in the ground, for a twenty-one years' lease, at 5s. per acre.
(2) At the end of the lease, if the Estate decide to take the place over, full compensation to be given for all improvements.
(3) If the lessee before the end of twenty-one years is desirous of getting rid of the lease he can do so, provided be can find a respectable and responsible man to take the place over.
(4) For the settler to live and work on the spot. All accounts to be carefully kept and checked by an independent accountant, and published each year in any newspapers that I may select.
(5) The final terms of the lease to be settled by the Small- holding Commissioner for the district or an official appointed by the Board of Agriculture.
I would let the land on the terms I have stated, because it would afford me and my tenants and neighbours the deepest interest to watch the fine old tussle necessary to bring an area of unimproved land into such a state of cultivation that it would yield a living, after paying, say, 4 per cent, on the cost of the necessary house and buildings, fencing, drainage, clearing, and cultivation. The distance from the nearest market is five miles. With the exception of one short bit of road across a grass field, the roads are good. The estate water main runs close to the site, so that a connexion could be carried out at a small cost.
I am informed that sums of money are being subscribed to the cause by the wealthier site taxers. Why should not a little of this money be laid out in bringing their theories to the test of practical experience ? If the experiment succeeds it would do more for the cause than all the theoretical inexperienced talkers, writers, and orators put together. All applications for the land on the terms I propose, which are addressed to me, c:o Spectator, will be forwarded, and I promise on my part that there shall be no delay in settling
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