CHAPTER V –
The Extortion of High Prices for Land
Joseph Hyder: The Case for Land Nationalisation
The effect of monopoly is to give the power of levying an amount of taxation on the public for individual benefit which will not make the public forego the use of the commodity.
John Stuart Mill.
The new State valuation must be the basis for all plans of communal purchase. On this basis municipalities ought to buy the land which is essential for the development of their towns. And the State could also buy up land necessary to the policy of re-creating rural life in Britain.
Mr. Lloyd George in the Nation, October 30, 1909.
WHEN the House of Lords threw out the historic Finance Bill of 1909-10, by an act, which was the beginning of the end of their absolute veto and the precursor of the ultimate democratisation of the Second Chamber, it is a matter of common knowledge that hatred of its land clauses was their main actuating motive. And the part of those clauses, which most enraged them was the provision for a national valuation of all land. Lord Londonderry denounced it as being designed to lead (horror of horrors!) to the nationalisation of land. And Lord Lansdowne quoted the passage from an article by Mr. Lloyd George, which is cited above. “My Lords,” he said, “that seems to me to open up a most disconcerting prospect. … These taxes are only justifiable if you believe that land is national property, and that it should be the business of Parliament to nationalise the land of the United Kingdom.” Any one who knows (and who does not?) the extortionate prices which landlords charge when land is needed for public or semi-public purposes, can quite appreciate the fact that Lord Lansdowne should regard the establishment of a general valuation as “a most disconcerting prospect.” But, in proportion as it is disconcerting to landlords, it must be full of hope for the payers of rates and taxes, who are steadily victimised by having to pay for the land that they may need for public developments, far more than it is really worth.
Where there is competition the free play of the laws of supply and demand may be trusted to prevent unfair bargains. If the buyer can take it or leave it, which is the necessary condition of all free contracts, and if, failing to get what he requires from one man, he can go to another with some chance of success, he will never be called upon to pay more than the true value. But the law has long recognised that, between the owner of land and the one who needs it for use, the ordinary laws of competition and the essential conditions of free contract do not apply. As well might we talk of a free contract between a man who is drowning and a man in a boat with power to save him. All that a man hath will he give for his life. And so the State provides that, where contracts are made under stress, they have no binding force and may be revised. The captain of a ship in distress is willing to agree to any terms that may be demanded for the towing of his ship to harbour, but the contract cannot be enforced. It may be re-opened, and only that is payable, which the court may determine to be fair.
Dependent upon the cultivation of land for a living, and having no other means of life, the Irish peasants and farmers were driven to starvation, desperation, and crime by the cruel exactions of hard-hearted men, often of an alien race and religion, and resident in another country. The State at length stepped in to protect them, and Fair Rent Courts were established. The same protection was afterwards granted to the crofters in the Highland Counties of Scotland, and the same principle has since been extended by the Scottish Small Landholders Act to the whole of Scotland.
Regarding the land as their own property, and unwisely permitted by the law to do so, landlords have naturally endeavoured to get the most they can for it – the highest possible rent if they let it, and the highest possible price if they sell it. In doing this they have merely acted on ordinary business principles, and, so far as motives are concerned, they are no different from the owners of other property. A manufacturer or a shopkeeper does the same, but the competition of other manufacturers and shopkeepers acts as a constant check upon unfair prices, and if an attempt were made by any one of them to demand unreasonable prices he would be soon brought to his senses by the loss of custom which could easily be transferred to other producers or retailers. No such easy way out of the difficulty presents itself in the case of land. It is true that even here there is some measure of competition where its ownership happens to be shared by a number of freeholders. But the great bulk of the land is not so distributed, and, in any case, it often happens that particular sites have a special value for certain purposes, and the owners of those sites are not slow to take advantage of their monopoly.
When the State wants a new naval base, as at Rosyth, or a new military training ground, as on Salisbury Plain, or an artillery range, as at Shoeburyness, or a fort or a lighthouse, the owners of the lands so needed have evidently a monopoly. The State wants the land in a particular place, and the price demanded proves that the landlord is quite aware of the State’s necessities and limitations in such cases.
When a municipality wants land to widen a narrow street, or to clear a district of slums, or to make a bridge or an embankment, or to construct a reservoir, or to make a park, or to establish or extend a drainage system, it is confined within narrow limits as to the land it must acquire. Only that land will answer its purpose, and consequently the owners of it are in the position of monopolists.
And similarly, when a railway company wants to construct a new line, or to widen an existing one, or when a canal company wants to open a new waterway, it is obvious that the laws of monopoly strictly apply. The land must be along a certain definite course, which is determined by the present or future distribution of the population, and by a consideration of the need to minimise the engineering difficulties, which will have to be overcome.
In all these cases it has been proved, by a long and painful experience, that the owners of land are unsparing in exercising to the fullest possible extent the fortunate and privileged position in which they find themselves, and they invariably demand, and almost invariably succeed in getting, much more than the ordinary market value of the land. A few facts in proof of this statement will therefore not be out of place here. Little comment is needed. The figures speak for themselves.
The Naval Base
at RosythWhen the Government came to the conclusion that a new naval base was needed on the East Coast they decided that it should be formed on the north shore of the Firth of Forth, The land they chose was ordinary agricultural land belonging to Lord Hopetoun (afterwards created Marquis of Linlithgow). They were called upon to pay eighty years’ purchase of the rent, the gross rent, which was about four times its true value; and when the present President of the Land Union, Mr. Pretyman, M.P., defended the transaction as a member of the Government, the best argument he could advance in support of it was that it would have cost more to have put the Military Lands Act into operation. In that case so much the worse for that Act.
The Netheravon Estate
Fourteen years ago the Government bought the Netheravon Estate, in Wiltshire, from the then Chancellor of the Exchequer, Sir Michael Hicks-Beach. The War Office Return showed that the gross rent was £2,531, and the net rent was £1,720, without any deductions for repairs, land-tax, insurance, and management or property tax. The price awarded was £93,411. And yet a neighbouring estate belonging to Lord Ashburton, which was greater by over 2,000 acres, and the gross rental of which was much more than twice as great, fetched only £98,000 in the open market just before the Netheravon Estate was acquired by the War Office.
For the purpose of the death duties Sir Michael Hicks-Beach was himself chiefly responsible for making a bargain with Sir William Harcourt, when the Finance Act of 1894 was being discussed in the House of Commons.
The bargain was this – that in the case of agricultural land, and that land alone, it should not be taxed according to its value in the market at the time of death, but taxed on a special scale, which consisted in taking it at not more than twenty-five times its net rental.
If this rule had been applied in finding out the purchase price of Netheravon, the taxpayers would have paid £50,000 less than they actually had to pay. But of course taxation is one thing, and purchase is quite another.
Maplin Sands
These sands, lying on the East Coast, near the mouth of the Thames, formed part of the manors of Great and Little Wakering. The whole rights of the two manors had been bought about 1880 for the sum of £9,100, Yet, when the sands were taken for the Shoeburyness artillery range, one of the experts valued them for the vendors at £192,000, and another for £141,606. Bearing in mind the price paid for the whole of the manorial rights thirteen years before, the valuer for the Government, Sir Whittaker Ellis, put the value down as £10,000, and this seems a very liberal amount. The arbitrator awarded £32,500, and of course the whole of the landlord’s costs were added.
About the same time the Earl of Dalhousie’s trustees demanded £^8,500 for the Barry Links, near Carnoustie, but the War Office got off by paying a little less than half that sum.
The Thorney Estate
When the Duke of Bedford, in 1910, decided to sell the Thorney Estate (which was part of the spoils of the monasteries) the Board of Agriculture opened negotiations to buy it for small holdings. The Duke had published a book showing that the rents were so low that they hardly covered the outgoings. But the price demanded for this unremunerative estate was £750,000 and the negotiations fell through, as the Board would have had to incur the odium of raising the rents in order to make the purchase profitable. This case shows that for many years this estate had been rated for local purposes at a value far beneath its true value.
The Fort at Kilcreggan
Fifty-two acres of land, partly foreshore, were bought by the War Office for a fort at Kilcreggan on the Clyde. They were previously rated at £60 per annum. The taxpayers were forced to pay £14,500 for them, or 240 years’ purchase.
A Torpedo Range
In 1908 the Admiralty purchased a site near Greenock of about 10 acres of land, with a foreshore, as a site for a Torpedo Depot in connection with a new Torpedo Range. The value assigned to that site for rating was £11 2s. a year, but the Admiralty had to pay £27,225 for it, or 2,452 years’ purchase of that annual value for rating.
Lighthouses
In 1883 the Northern Lights Commissioners bought five acres of land on Ailsa Craig for a lighthouse. The chief value of the island was for quarrying purposes, and its entire rateable value was only £30. And, as this amount has not been reduced, it may be inferred that the previous rateable value of the five acres was nil. But the Commissioners had to pay for that small site the sum of £1,550, or more than fifty times the rateable value of the whole island.
The Commissioners acquired in 1900 a small site on the Bass Rock. The rateable value of the whole Rock was not reduced by the severance, and presumably it had no separate value before the lighthouse was built. But the landlord receives £40 per annum in feu duty for his leave for the lighthouse to make navigation safer.
Hysgeir is the largest of a cluster of rocks on the West Coast of Scotland. It was uninhabited and contained no water. In summer it is covered with short grass and the sea pink. Its rateable value was nil. When the Commissioners bought it for a lighthouse, in 1902, they failed to get it by voluntary arrangement and had to use their compulsory powers. And the blackmail (strictly legalised) paid to the landlord was over £600.
How Local Authorities are Handicapped
For one purpose or another local authorities are constantly needing to acquire land. They ought to be able to tell the value by simply turning over the leaves of the rale book. At present much of it does not appear in the rate book at all, and the whole of it is rated on the rents received instead of on its real worth. Consequently, although they have powers to compel its sale, subject to restrictions and limitations that ought to be removed, they must come to terms with the landlord or incur the heavy expenses of an Arbitration Court, with its highly paid counsel and expert witnesses, whose estimates are always coloured according to the side by which they are engaged.
Leeds
In 1903 the City Council of Leeds bought 395 acres of agricultural land near Swindon Castle for water works. The Corporation valuers assessed the value at £27,000, which was a very liberal capitalisation of the rateable value. The landlord asked £196,000, and, of course, found experts ready enough to swear to that figure. The arbitrator struck off nearly £150,000 from his claim, and awarded £46,489. If the landlord were rated on the value he put on his land he would soon be brought to reason, and such preposterous claims could never be made.
Leicester
Leicester bought 225 acres of Lord Lanesborough’s land for a reservoir. He asked £61,300, but the arbitrator struck nearly £34,000 from his claim.
Liverpool
Liverpool paid to Lord Sefton £250,000 for the land for Sefton Park. Mr. Shelmerdine, the City Surveyor, told a Parliamentary Committee that its agricultural value was £1,350 per annum, and that Lord Sefton had only paid rates on that amount.
Carlisle
In the beginning of 1910 the Carlisle Town Council found that the cost of their Feltsdale Water Scheme had exceeded the amount authorised by £34,110, and Sir Benjamin Scott referred to the purchase of land at the Feltsdale Springs from the Earl of Carlisle. The extreme value put on this piece of moorland by the valuers was £3,000. What was the Committee’s surprise, therefore, when they found that the demand made by the owner was £33,000! This one item alone was almost enough to account for the difference between the estimated and the actual cost of the whole scheme.
Horsham
The education authorities at Horsham decided to build a school. The site selected was part of the old common. A hundred years ago the inhabitants had free access to it, and customary if not proprietary rights upon it. It was then waste land. But the price asked for it when the school was needed was £1,000 an acre.
Carnarvon
The Carnarvon Town Council decided to build some working-class houses. The land they selected was rated at £1 12s. 6d. per acre. But the price demanded was £600 per acre.
Land was also wanted for a cemetery. It was rated at £2 an acre. Twenty-five years’ purchase of that amount is £50, which is a fair price if it is fairly rated. But the landlord’s price was £847 an acre.
Chesterfield
The Chesterfield Gas and Water Board bought a piece of land at Brampton in 1908. The owners’ lawyers contended that although it was only worth £779 for ordinary purposes it had a special value as being suitable for a reservoir. This special value was £1,615, and Mr. Justice Bray held that the larger amount must be paid.
Glamorganshire
The Glamorganshire County Council published a number of cases showing that it has had to pay from £400 to £1,000 an acre for school sites for land worth £60 to £200 per acre. And the effect of these transactions is sometimes seen in increased demands made when land is required by individuals. The owner, for instance, of a large and increasing works, affording employment to several hundred men in West Wales, says, “Before I began to develop my works, land in the immediate district could be obtained on fairly reasonable terms for house-building. The time came when I wished to extend my works, and I was promptly asked £500 an acre. That land could not be used for building houses; it was suitable only for industrial purposes. I protested, but the landlord said the price was quite fair, for £500 an acre had been paid for the site of the new school.”
Harrogate
Harrogate had to pay £i,200 an acre for a cemetery which was only rated at 5s. per acre; 4,800 years’ purchase.
Frome
Frome, in Somerset, widened a dangerous corner where several accidents had occurred. The improvement was delayed for years because of the high price demanded. The tiny piece of land cost £87 10s., and besides this the Council had to pay £6 13s., the cost of the valuation, £10 for the conveyance and solicitor’s costs, and of course had to rebuild the wall upon the vendor’s land.
West Malling
The West Mailing Council, in Kent, carried through a drainage scheme, and the price demanded as way-leave for a sewer half a mile long was £15,000. The arbitrator thought that was £13,200 too much. The pumping site cost £100, and the law costs of its purchase were over £50. The scheme had been delayed for five years because of the difficulties to be overcome, difficulties such as are almost always put in the way of public improvements when landlords see their chance of making a good thing for themselves out of the needs of the community.
Steeple Morden
The Parish Council of Steeple Morden, in Cambridgeshire, decided to have a village playground. Unsuitable land, rated 19s. an acre, and adjacent to land which had been recently sold for £30 an acre, was offered to them. After nearly six years’ negotiations they got the power to buy four acres of land for £287, worth according to recent auction prices of adjoining land no more than £160. The inquiry costs and arbitrators’ fee brought the cost well over £300, and it was eight years from the time they commenced negotiations before they entered into possession and were able to make the recreation ground.
Glasgow
In 1908 the Cathcart School Board purchased rather less than an acre and a half as the site for a school near Cathcart Bridge. The value assigned to it for rating was £3 l0s. l0d. a year, but the School Board had to pay £3,270 10s. for it, or more than 920 years’ purchase of that annual value for rating.
The Glasgow Corporation required for an improvement sixty yards of ground. £700 was asked for it, and £122 was awarded by the arbiters. The expenses of the purchase, however, paid by the Corporation, amounted to £1,052 – £407 for the claimant, £365 for the arbiters, and £280 expenses incurred by the Corporation. There was another case in which £1,000 was claimed, and £279 was granted; while the expenses amounted to £460.
Steeple Ashton
Steeple Ashton, in Wiltshire, was in sore need of a proper water supply, so the Rural District Council decided to buy an acre of land for the necessary works. The land there is worth about £60 or £70 an acre, but the price asked by the owner was £970 an acre, and, in certain circumstances, a royalty on the water in addition.
Bury
At Bury a couple of cottages were bought for widening a roadway, at a cost of £115, and the arbitration expenses reached £43 14s. 4d. Then in the case of the Water Board there were eight arbitrations, and it was agreed that only one arbitrator should sit; no counsel or solicitors were employed, and only one witness in each case was called. Yet the cost of buying land to the value of £10,525 reached £836. In another case a farm was bought for £1,670, and the cost of the purchase amounted to £288. A small country public house was valued at £1,780, and the arbitration expenses amounted to £608. However absurd the claims of the owner might be, the Corporation had always to pay the cost.
Plymouth
In 1892 Plymouth bought the Beaumont House and Grounds for a park, in area about nine and a third acres. The property was rated on an annual value of £160; but the Corporation had to pay 162 years’ purchase of this, or £26,000.
Devonport
Some of the worst evils of landlordism are present in Lord St. Levan’s leasehold town of Devonport. The following is an extract from a speech by the then member of the Borough on February 10, 1899, in the House of Commons. He said:
“In the middle of my constituency, between the municipality of Devonport and the township of Stonehouse, which is added to the municipality of Devonport for Parliamentary purposes, there is a very narrow arm of the sea, which is about three-quarters of a mile long, or perhaps a little less than that. However, that arm of the sea separates Stonehouse and Devonport, and it also separates Devonport and Plymouth, and over it there is a bridge. Now, the whole land of Devonport was owned by one landlord, and the whole land of Stonehouse was owned by another landlord, and the ancestors of these two landlords, about 100 years ago – in 179S – got Parliament to pass an Act which provided for the building of a bridge, at their expense, over that arm of the sea; and by this Act of Parliament a toll was to be charged for passage over that bridge, and, in addition to that, no one was to be allowed to use any other means of communication, either for one side or the other, except by that bridge. I will undertake to say this, that the whole cost of the building of that bridge and of the approaches thereto could not have amounted to more than £5,000. Since I have been a candidate for Devonport, and that is now eight years, these two successors to the two landlords who constructed that bridge have refused £120,000 to free it. There, sir, is a case in which we have got an absolute blackmailing of the industry of that place by the means of an artificial barrier put up between the two halves of one town which I have the honour to represent.” If the landlords had to pay rates upon their own assessment of the bridge they would probably put the figure considerably lower than £120,000, and the community could then acquire it at a fair price, and carry out a much-needed improvement.
The Thames Embankment
The people of London were taxed to convert a muddy foreshore into the beautiful Thames Embankment, which enhanced enormously the value of all the Thames frontages. The land on which the London School Board Offices were built was sold for £8,000 a few years before the Embankment was made. The School Board had to pay £26,000 for it. The ratepayers paid for the making of this Embankment, and one owner took advantage of that fact to charge them a profit of £18,000 for that single site.
Not only in the prices charged but in the conditions imposed, the ratepayers are often “in a cleft stick.” The St. Albans School Board, after some trouble, secured a site from Earl Verulam, and this was one of the conditions:
“The Board shall not be entitled to any right of light or air which would restrict or interfere with the free use of the adjoining land of the Earl of Verulam, or other purposes, and the conveyance to the Board shall be framed so as expressly to exclude the grant of any such right.”
A Northumberland School
The Duke of Northumberland is one of the stoutest defenders of the rights of property, and this is how he interprets them. About three-quarters of an acre of land in East Denton was acquired from him in 1909, by the Northumberland County Council. It had no residential value, and, when it was severed from the farm, the rent was reduced by 30s. per annum. Apparently, therefore, £45 was the very outside agricultural value. The price asked was £1,089. The arbitrator knocked off nearly £400 of this as an untenable claim. And the Duke got £698 15s. 6d. for the site which was only worth £45 as farm land. And then comes the little bill of costs to be settled by the ratepayers. Here it is, and it is only typical of all such cases:
| £ | s. | d. | |
| Arbitrator’s fee | 15 | 15 | 0 |
| Arbitrator’s solicitor’s fee | 5 | 5 | 0 |
| Vendor’s solicitor’s charges | 19 | 14 | 4 |
| Purchaser’s solicitor’s charges | 19 | 5 | 0 |
| Stamp duty | 3 | 10 | 0 |
| Outlay, etc, . | 1 | 16 | 6 |
No wonder that public authorities are often willing to pay more than the proper price, in order to avoid the expenses and uncertainties of arbitrations. For arbitration under the Lands Clauses Act of 1845, says the Spectator, means that two gentlemen are usually named arbitrators, one for each side, are paid about fifty guineas for valuing the property, and, of course, they disagree on the amount. These two then appoint an umpire, who, on a day foreordained, sits to hear the cause. Learned counsel, two on each side, separated by a long table, address him and examine witnesses at a fee of fifty guineas each per day on the average. Expert witnesses fill up the table, and receive, for viewing the locus in quo and giving their opinions as evidence, about £40 each. The expenses, too, of solicitors, surveyors, ordinary witnesses, and others, mount up gaily each day, so that very few important arbitrations arc completed at a cost of less than £1,000, and many cost very much more.
When all the speeches are finished, when every witness for the seller has sworn that the property is nothing less than a gold mine, and when every witness for the buyer has asserted that it is almost unsalable, then the umpire gives his award in writing. And in nearly every case the whole of the ruinous costs are ordered to be paid by the public authority which has had the temerity to fail to agree to the landlord’s own terms.
The whole thing is stupidly expensive and unbusiness-like, and yet it may be avoided by the very simple expedient of taking the value of land as accepted for taxation to be the purchase price whenever it is bought by a public authority, subject, of course, to additions for such things as special damage caused by severance.
Railways
We have seen that the central Government and local authorities are treated as “fair game” by landlords, and we shall also see that railway companies are treated in the same way. A recent Government Return has shown that of the total nominal capital of these companies nearly £200,000,000 represents watered stock, as distinguished from paid-up capital. And, of the paid-up capital, a very large amount represents the inflated prices, which the companies have had to pay for the land they have acquired for the carrying on of their undertaking.
The late Mr. Samuel Laing, M.P., once said that the companies had had to pay at least £50,000,000 above the market value of the land. In the course of the extensions, which have taken place during the thirty years which have since elapsed, that amount must have been considerably increased.
So great were the complaints at the beginning of the railway era that a Select Committee of the House of Lords was appointed in 1845 to inquire into “the practicability and expediency of establishing some principle of compensation to be made to the owners of real property whose lands, etc., may be compulsorily taken for the construction of Public Railways; and also further to take into consideration the question of severance and that of injury to residences.” One of the great landlords, Earl Fitzwilliam, was appointed chairman, and it was like a committee of very successful foxes considering whether foxes as a general rule were or were not robbing too many hen-roosts or seizing too many geese.
Not much good could be expected to come from such a Committee, but its report is, at any rate, illuminating and instructive. For instance, they gave it as their opinion “that a very high percentage, amounting to not less than 50 per cent. upon the original value, ought to be given in compensation for the compulsion only to which the seller is bound to submit.” And they said, “There are many cases in which it is necessary to consider the land not merely as a source of income, but as the subject of expensive embellishment, and subservient to the enjoyment and recreation of the proprietor.” Then they go on to say: “Public advantage may require all these private considerations to be sacrificed, but, as it is the only ground upon which a man can justly be deprived of his property and enjoyments, so, in the case of Railways, though the public may be considered ultimately the gainers, the immediate motive to their construction is the interest of the speculators, who have no right to complain of being obliged to purchase, at a somewhat high rate, the means of carrying on their speculation. It is also to be observed that the price of the land purchased, and the compensation for that which is injured, form together but a small proportion of the sum required for the construction of a railway, so that no apprehension need be entertained of discouraging their formation by calling upon the speculators to pay largely for the righst which they acquire over the property of others.”
We thus see that this House of Lords Committee actually justified high prices because the makers of railways, like the initiators of most other enterprises, expect to make a profit out of them, and because, as the further expenses of construction and working are necessarily heavy, they considered that an addition to the ordinary market price of the land would not be an appreciable hardship. Although such considerations govern landlords’ expectations and demands as quite a general thing, it is none the less interesting to have them set down in black and white for them to be pondered over and understood.
Let us now turn to some of the evidence given by witnesses for the companies. Mr. Parker, law agent to the London and Birmingham Railway, said, “We always pay a great deal more than market value. That is conceded on all hands.”
Mr. Duncan, solicitor to the Eastern Counties Railway, said that it was the custom to make agreements to give great land proprietors more than the value by way of getting their assent to the Bill. It was done by every railway company, more or less. “There is no doubt,” he said, “that influential parties by opposing Bills, and by railway companies settling with them in order to rid them of their opposition, do sometimes receive much larger compensations than they are entitled to, or would otherwise receive.” He said that the compensation depended on the weight of the landowner’s opposition and influence. “If we have any fear that he is likely to defeat the Bill, I think we look at that as a special case for a settlement, and in settling we are not very nice about the price that we pay; we give way to what is asked rather than continue to stem opposition with the chance of defeat.” The small landlords never petitioned singly against Railway Bills, and very seldom at all, so their opposition had not to be bought off with fancy prices.
The Eastern Counties Railway Company bought off the opposition of one “considerable proprietor ” by paying him £5,000 on account for some land, which they expected they would need. The deposit was as much as they would have paid under a jury verdict. Then they altered their plans, and their line did not go within forty miles of the said land. But the landlord kept the £5,000.
Mr. John Clutton, agent to the South Eastern Railway, paid Lord A., on the Dover line, £11,025, or £400 an acre, for twenty-seven acres of arable and meadow land. The costs, all paid by the company, amounted to £2,425. “It is only parties who have some influence in opposing railway companies, or some means of giving trouble in Committee, that are settled with before the passing of the Bill.”
As valuer to the company he always put a high value on the land required, then he added 25 per cent. for a forced sale, and another 50 per cent. for severance. And he stated that the formation of the company had increased the value of all the farm-land in the Weald of Kent by at least two years’ purchase.
Mr. Edward Driver said that the Brighton Company paid large sums for the right to tunnel, even though the tunnels did not deteriorate the value of the land. “A man who has been quiet because he has no money to go to Parliament, does not get so much for his land as a neighbour who has money and has been able to oppose. There were many instances of the company paying to stave off opposition.” “The Directors sit down with my valuation in their hands, and they add to it what it will cost them to go to a jury with those proprietors, and if they will accept that sum they give it them, beyond the value of the land.” The agent’s method was to multiply the rent by 33 to begin with, to multiply it by 8¼ for compulsion, and by 16½ for severance. The estimated costs of arbitration were then added to the total thus obtained. He also said that the costs of surveyors and the legal expenses frequently came to 10 per cent. of the value of the land. The average price paid between Shoreham and Chichester was £220 to £230 per acre, but the average agricultural value was less than £60 per acre.
Mr. Driver also said he bought the Great Western Railway land from London to Maidenhead, and for about sixty miles on the main line. If the rent were 35s. an acre he would call it forty and multiply by 33, 8¼, and 16½ , as in the case of the Brighton line. Nine people got £136,000, which was ten times the value.
Nearly fifty years later, in 1892, the late Sir Edward Watkin, chairman of the Metropolitan Railway, told the shareholders that some of the agricultural land bought for the extension to Aylesbury cost about £300 per acre, and he said that only twice in his long and varied experience as a promoter of railways had he known instances in which the owner did not exact the utmost possible price for land taken for railway purposes. In one of these the great Sir Robert Peel was concerned. A company which was now absorbed in the London and North Western system offered the great statesman £100 an acre for some land near Tam worth. “I think,” he replied, “that I ought to pay you for improving the value of my estate.” The company was only able to get him to accept £50 an acre. All honour to Sir Robert, rara avisindeed!
In 1899 Lord Portman claimed £400,000 for the part of his estate required for the Marylebone terminus of the Great Central Railway. The arbitrator thought £260,000 was enough, and we may be sure it was.
Another way in which the railway companies have been handicapped is this. They have found it desirable to conciliate the great landed interest by offering directorships to landlords who had no qualifications at all except their titles, their position in Parliament, and their landed property. And so we find Sir R. W. Perks, legal adviser to several great companies and a very shrewd railway authority, saying, “As a rule the average English railway director knows very little about the details of his line. … Directors are chosen because of their Parliamentary or territorial influence, and even now some of the directorates of the English railways arc crowded with titled directors who know little of business life, still less of the democratic requirements and rewards of the present day.”
There are widespread complaints among traders as to railway rates being too high, and growing discontent among some hundreds of thousands of railway employees that wages are too low. The companies say that they cannot reduce the rates, or raise wages, and, in connection with the latter, there are already signs of a labour unrest that may paralyse the industries of the country, bring everything to a standstill, and produce a crisis the like of which the country has never experienced. It is as well to know that a very great part of the difficulty is caused by the exactions of landlords in the past, the payments made to them under stress figuring today as if it were genuine capital. There is absolutely nothing to show for it, and yet interest has to be earned on it at the expense of traders, passengers, and employees alike. All tills is but part of the price that has to be paid to-day for the folly and weakness of our ancestors and ourselves in allowing land to be treated as the property of private interests.