The Limits to Land Reform: The Land Acts in Ireland, 1870-1909
Author(s): Timothy W. Guinnane and Ronald I. Miller
Source: Economic Development and Cultural Change, Vol. 45, No. 3 (Apr., 1997), pp. 591-612
Published by: The University of Chicago Press
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The Limits to Land Reform: The Land Acts
in Ireland,1870-1909"
TimothyW. Guinnane
Yale University
RonaldI. Miller
ColumbiaUniversity
Irelandexperiencedtwo greatwaves of landreformduringthe late nineteenthand early twentiethcenturies.Landreformwas a centraldemand
of Irishpoliticalfactionsof the time andby accedingto this demandsuccessive Britishgovernmentshoped to pacify Ireland.This articlereconsiders the economic significanceof the several Irish land-reformmeasures by examining them in the context of economic theory and by
comparingthem to other land-reformepisodes in currentlydeveloping
countriesand in Europeanhistory.The Irishreformscontainedlittle that
could betterthe allocationof resourcesand so had little impacton economic efficiency,even thoughthe end resultwas the creationof a class
of peasantproprietorsoperatingin a free market.The analysis focuses
on the structureof the laws and their relationto Irish institutions,although we also discuss the aggregateevidence on the evolution of agriculturalefficiency following the reforms.Moreover,the Irish legislation missed an importantopportunityto improvesmallholders'access to
credit.Some facets of the landlegislation,interactingwith some unusual
institutionalfeaturesof land tenure in Ireland,made credit conditions
worse. Land reformin Irelandwas much more a wealth-redistribution
programfinancedby Britainthan a serious effort to improve the efficiency of agriculture.
Landtenureandlandreformoccupycentralroles in boththe history
and historiographyof the politicalstrugglesthatculminatedin the partition of Irelandin the 1920s. Successivewaves of Irishpoliticianssought
to harnessessentiallynationalistambitionsto the moremundanedissatisfactionsof the Irishfarmer,convincingthe latterthateconomicprosperity requiredalterationsto or complete abolitionof an agrariansystem
? 1997 by The Universityof Chicago.All rightsreserved.
0013-0079/97/4503-0001$01.00
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EconomicDevelopmentand CulturalChange
wherebytenantspaid rentsto landlords.While Ireland'shistorianshave
closely analyzed the political dynamics of agrariandiscontentbefore,
during,and afterthe LandWar of 1879-82, scholarshave paid little attentionto the economiccontentof the LandActs per se. The exceptions,
such as B. Solow's work,have devotedtheireffortsto the firstwave of
those reforms.1By analyzingthe actualimplicationsof the Irishlandreform more generally,in a broadertheoreticaland comparativelight, we
supplementthe politicalhistorians'conclusionsthatthe LandActs were
intendedless as economic policy than as efforts to compromisewith
Irishpoliticaldemands.
Recentstudiesof landtenurein developingcountriesprovidea useful context for the Irishcase. Comparisonof nineteenth-century
Ireland
to developingcountriestodayis neithernovel nor far-fetched.R. D. Collison Black noted in a neglectedpaperthat economic policy in Ireland
duringthe periodof Westminsterrule closely resembled,at least in intent, much developmentpolicy today in that it was an effort to secure
peace and quiet throughimprovingeconomic conditionsfor the populace.2Alterationsto propertyrightsin land are a centralfeatureof developmentpolicy today.TimothyBesley providesa useful classificationof
the implicationsof propertyrightsin land underthe threeheadingsthat
follow.3 (1) Security:occupierswho lack securityof tenurein theirholdings will not expend effort in investments,the fruits of which can be
seized by another.An insecuretenantmay not take any interestin the
long-termproductivityof a farmif he fears being ejected withoutcompensationafterthe currentseason. (2) Land as collateral:pledgingland
as collateralcan dramaticallyreducethe costs of loans, since mortgage
lendersare less likely to demandexpensiverisk premiumsor to engage
in costly information-gathering
activities.Yet such mortgageloans presuppose a lender's ability to seize the land in the case of default. (3)
Commoditization:some forms of tenureimpede the buying and selling
of land and so result in a suboptimaldistributionof land. The more
nearlyland is like any othercommodity,the more likely it is to be allocatedto its highest-valueuser.As will be discussedbelow, the Irishland
reformsmay have had some positiveeffect on securityin the earlystages
of reformbut they creatednew problemsfor both collateraland commoditization.
In Section I we review land tenureand the LandActs in Ireland.In
Section II we analyze the economic effects of these reformsas anticipatedby simple economic theory,and in Section III we discuss the implicationsof land tenureand its reformsfor ruralcredit.
I. Land Tenure and Its Reform
Priorto the LandActs a majorityof all Irishfarmerswere tenants,and
most of themwere eitheryearlytenantsor tenantsat will, lackingformal
593
TimothyW. Guinnaneand RonaldI. Miller
TABLE 1
TENANCIES AT WILL AND THE SIZE DISTRIBUTIONOF HOLDINGS
THE PROVINCESOF IRELAND
VALUATION
CATEGORY
Tenanciesat will as a percentage of all holdings
in a given valuation
category:
<?15
?15-30
?30-50
?50-100
>?100
Holdingsof each size as a
percentageof total
holdingsfor all sizes:
<?15
?15-30
?30-50
?50-100
>?100
IRELAND
Ulster
Munster
Leinster
Connaught
86.35
72.85
62.65
50.28
31.86
72.35
56.36
46.75
36.85
21.79
81.28
67.99
54.77
39.33
22.31
90.06
72.18
57.06
41.53
28.84
83.76
67.12
54.83
41.16
24.40
77.48
14.76
4.80
2.25
.81
65.86
17.54
8.49
5.84
2.27
65.25
16.45
7.97
6.08
4.26
89.53
5.98
2.03
1.52
.94
75.06
13.79
5.65
3.64
1.86
SOURCE.-Houseof Commons, "Returns Showing the Number of Agricultural
Holdingsin Irelandand the Tenancyby WhichThey Are Held by the Occupier,"c. 32
(1870), tables 1-6.
NOTE.-J. Mokyr(WhyIrelandStarved:A Quantitativeand AnalyticalHistoryof
the Irish Economy,1800-1850 [London:Allen & Unwin, 1985]) shows thattenanciesat
will had become more commonafterthe famine,so that the distributionhere may have
been ratherdifferentin earlierperiods.
leases. Table 1 summarizesthe results of the first national statistical
study of tenancyfrom 1870. Tenancyat will was most common in the
northernandwesternprovincesof UlsterandConnaughtandon holdings
valuedat less than?15, but tenancyat will and yearlytenancyaccounted
for the majorityof farmerseverywherein Ireland.4Table 1 also suggests
an importantpoint to which we returnlater:a substantialmajorityof the
more extensivefarmsin Irelandwere not tenanciesat will.
A tenantat will had no legal guaranteeof continuingoccupation;
his landlordcould, in theory,eject him any year. This supposedinsecurity lies at the heartof what J. Mokyrcalls the "LandTenureHypothesis" of Irishpoverty.Withoutleases landlordscould always raise rents
or eject a sitting tenant,giving tenantsno incentive to invest in their
holdings,as the landlordcould appropriatethe value of any investment
the tenantmight make.5Nor did tenantshave any incentive to protect
theirlandlord'sinvestmentsin the holding.Thus,the argumentgoes, neitherpartymadethe long-terminvestmentsnecessaryto increaseagriculturalproductivity.As RaymondCrottynotes, this alleged inabilityto recover the value of improvementsformed a central feature of the
argumentfor tenantright,discussedbelow.6 The idea of insecuretenancy
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Economic Development and Cultural Change
informs much of the older historical research on Ireland. For example,
K. H. Connell's account of demographic patterns prior to the Famine is
based on the notion that peasants wanted to invest in people rather than
land. Any evidence of increased prosperity, Connell claims, would be
immediately soaked up by a landlord (or middleman) in the form of a
rent increase. This behavior, if it actually occurred, seems unlikely to
have been in the long-term interest of landlords, who would have benefited from a more cooperative solution. Nonetheless, according to Connell, "elastic rent" deterred even effort devoted to the currentyear's output; "If a man worked harder he was more likely to enrich his landlord
than himself."7
Tenancies at will notwithstanding, Irish farmers occupied their
holdings for surprisingly long times. Long occupation without a lease often reflected the landlord's recognition of tenant right, or the "Ulster
Custom." This practice has vexed Ireland's historians for generations,
and there is no consensus on how or why it emerged. Although most
common in Ulster, the institution was widespread throughout Ireland.
Three central features of the Ulster Custom, sometimes referred to as the
"three F's," were "fixity of tenure" or the right to remain on a holding
so long as rent was paid; the right to pay a "fair" rent; and the right to
"free sale" of the tenant's interest or tenant right when a tenancy
changed hands. Fixity of tenure amounted to an informal, perpetual
lease. Fair rent meant to Irish peasants a rent less than the "rack" rent:
the rent at which a holding would let should the landlord solicit bids on
an open market. Solow and W. E. Vaughan interpretthe rack rent as the
Ricardian rent.8 With rent below the Ricardian rent, the sitting tenant
could find incoming tenants willing to pay a lump sum for the right to
rent the land at the "fair rent"; this sum, or the practice of paying it,
constituted much of tenant right.9 As contemporaries noted, tenant right
implied an awkward coproprietorship in land. For tenant right to have
any meaning, the landlord had to concede certain rights-such as setting
rents at competitive levels-normally associated with the ownership of
land.
Reform of Tenancy
Parliament regulated tenancy in several major steps. The Land Act of
1870 required compensation for improvements to all outgoing tenants as
well as compensation for disturbance to any tenants who were ejected.
In a more confusing set of clauses, the Act of 1870 also legalized the
Ulster Custom where it had existed before. Legalization of the Ulster
Custom had ambiguous implications, since the act never defined the Ulster Custom nor did the act prevent the rent increases that would reduce
the value of the tenant's interest. In 1881 Parliament altered the basis of
landlord-tenantrelations more fundamentally. The 1881 act extended the
three F's to all of Ireland and established a system to determine and en-
TimothyW. Guinnaneand RonaldI. Miller
595
TABLE2
SUMMARY OF THE IMPACTOF THE LAND LAW ACTS ON RENT IN IRELAND
JUDICIAL TERM
MEASURE
FirstTerm
Numberof holdingswhererent was fixed
382,813
Acreageof holdingswhererent was fixed 11,385,375
20.7
Averagepercentagereductionin rent
SecondTerm ThirdTerm
144,009
4,434,640
19.3
5,887
191,105
9.2
SOURCE.-Houseof Commons, "Reportof the Irish Land Commissioners,"Sessional Papers 1920, vol. 20, app. tables 52-54.
NoTE.-Table covers all judicial rents throughMarch 31, 1919. Rent reductions
measuredagainstpreviousterm;thus third-termreductionsare decrementsfromthe second-termrent.
force fair rents.Landcourtshad the authorityto fix judicialrentsfor 15year terms. Rent regulationin effect guaranteedthe value of tenant
right.10The 1881 FairRent Act gave a statutorybasis to what amounted
in Irishagriculturalland:landlordshad the rightto
to a coproprietorship
drawan income fromland,but tenantshad limitedpropertyrightsin the
same land.
Table 2 shows the impactof the rent regulationon tenancyin Ireland up through1919. The 1911 census of Irelandestimatesthe areaof
agriculturalland in Irelandat nearly 19 million acres;by this estimate,
about60% of the agriculturalland of Irelandwas let at a rate fixed by a
firstjudicialtenancy.Firstand secondjudicialtermsimpliedrentreductions on the order of 20%, while the comparativelyrare thirdjudicial
termsimplied much smallerreductions.For a farmerpaying ?20 annually in rent, a rent reductionof 20% implied an increasein tenantright
of some ?130." The trueimpactof rentreductionon tenant-rightvalues
was at least somewhatless; with price declines in the 1880s and 1890s,
Ricardianrentsalso fell.
TenantPurchase
Tenantownershipof the land had been a demandof some Irishparties
from the start,althoughonly a few leaders(such as MichaelDavitt)advocated outright nationalization.Several late nineteenth-centuryland
acts concernedprimarilywith the regulationof tenancyhadalso included
provisionsaimed at encouraginglandlordsto sell tenantstheirholdings.
These early provisionshad relatively modest effects, as the terms on
which land was to be sold were not terriblyattractiveto landlordor to
tenant. Organized somewhat differently was the Congested Districts
Board, which had been establishedin 1891 with the goal of creating
holdings sufficientto supportfamilies in the poorestareasof the northwest and west of Ireland,and so engagedin considerableamalgamation
of holdings.12
The boardacquiredthe powerto compel
and restructuring
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Economic Development and Cultural Change
landlords to sell their land in 1909 but, before that, had succeeded in
acquiring and selling a large number of holdings.
The Wyndham Act of 1903 produced a large increase in the number
of tenant purchases, not least because it established much better terms
for tenants and gave hefty bonuses to landlords who sold their estates.
Under this act landlords and tenants negotiated a sale price. Once the
sale was arranged, the government paid the landlord in cash and advanced the tenant the cost of the land with repayment in the form of an
annuity at 3.25% interest. Landlords received both a cash bonus on completion of the sale and the right to sell their own demesne to the state
and purchase it back under the same terms as their tenants purchased
farms. This second provision permitted many landlords to exchange
costly mortgages for low cost state annuities.13The immediate effect of
this arrangement was salutary for most tenants: the purchase price was
legally required to be such as to make the annuity payments between
10% and 30% below rents fixed in the second judicial term. The 1909
Birrell Act revised land purchase to contend with the initiative's unexpected popularity, replacing cash payments to landlords with stock paying 3%. This made land sale less popular as landlords were unreceptive
toward the securities and tenants were required to pay a slightly higher
interest rate.14
Tenant purchase was well under way when the outbreak of World
War I led the government to stop making the advances required for the
The importance of the 1903 and 1909 acts can be
program to work."15
seen in the relative proportions of tenancies purchased under them, as
opposed to the earlier acts. By early 1913 about 250,000 holdings comprising 8 million acres had been sold.'6 Of these, only about one-third of
the transactions had taken place under provisions prior to the 1903 act.
By March 1919 the Congested Districts Board had resold some 23,000
holdings (of some 585,000 acres) in its area of operation, and together
with the Land Commissioners and Estates Commissioners had sold
285,000 holdings totaling 9.3 million acres.17This amounted to about
half of the agricultural land in Ireland. After the partition of Ireland,
landlords were eventually compelled to sell out in both parts of Ireland;
by the Second World War, landlords in Ireland were a memory.
II. Land Reform and Economic Efficiency
Revisionist interpretations of Irish tenancy and land reform agree that
earlier accounts exaggerated the inefficiency of prereform land-tenure
practices and by implication argue that little should have been expected
of the two land reforms. Land purchase itself has received so little attention that historians seem to have viewed it as an afterthought. Were the
economic changes implicit in the land legislation so meager? We first
consider the impact of land reform on security of tenure (leaving its implications for collateral and commoditization to the next section) and
TimothyW. Guinnaneand RonaldI. Miller
597
then outline the Land Acts' effects on distributionof both land and
wealth.
Security
If prereformtenantshad been as insecurein their holdingsas the older
historiographyhad argued,then the fixity of tenure provisions of the
1870 and 1881 LandActs would have improvedthe incentivesto invest
in and to care for the land. Connellis not alone amongan older generation of Irish historiansin acceptingthat pre-1870 tenurewas generally
precarious.The insecurity hypothesis is, however, incompatiblewith
several importantfeaturesof what we now know about Irish tenancy.
First,as table 1 shows, by 1870 most of the largestfarmsin Ireland(and
most of the land) were held on leases. The insecurityhypothesiscould
only explain underinvestmenton the smaller holdings, and these accounted for relatively little agriculturalland. Second, tenants without
leases were not necessarilyinsecurein their holdings. Both Solow and
Mokyrhave emphasizedthat many formaltenantsat will remainedon
theirholdingsfor life andthat,when asked,tenantsat will were not very
enthusiasticaboutleases. Some of these tenantsappearedto have tenant
right,but some did not. Irishtenantfarmersengagedin severalpractices
that made sense only if the participantsthoughta holding was secure.
For example,tenantsoften wrote wills thatbequeatheda farm to a son
on the condition that he make some settlementwith siblings.18Third,
Vaughanhas shownthatrentwas not so "elastic" as Connellandothers
thought.From 1850 to the mid-1870s, a period of great prosperityin
Irish agriculture,the value of outputincreasedmuch more rapidlythan
the value of rent.19Most of these Irish farmerskept the fruits of their
labors.
This discussionsuggests that there was no economicreasonto advocate tenantpurchase.Whateverinsecuritymight have existed was almost entirelyextinguishedby the 1870 and 1881 acts. Even Connellacknowledges that late nineteenth-centuryIrish tenants were, "in
essentials," owners.20A land purchaseprogramthat convertedinsecure
tenantsto ownerscould be expectedto improveincentivesto makelongterm investmentsin the land. From this viewpoint,however, Ireland's
purchaseprogramwas superfluousas Ireland's tenants were already
quitesecurein theirholdings.In some othercontextsone of the principal
gains of landreformis the eliminationof inefficientland-tenurearrangements.Sharecropping,
for example,has been criticizedfor not giving occupiers the right incentives to work their land since the sharecropper
retains only a fractionof the marginalproductof his labor.21But as
CormacO Grfidahas pointedout, Irish tenantshad always been the residualclaimantsof output:in termsof incentives,securetenantshave all
the virtuesof owners.22
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Economic Development and Cultural Change
The Allocation of Land
Many land reforms, historical and modern, have involved considerable
reorganization of the units of agricultural production. Neither phase of
Ireland's reform had significant implications for the productive distribution of land, in contrast to the English enclosures of the late eighteenth
century, which were, among other things, a land-reform effort that resulted in the amalgamation of holdings.23Neither the regulation of tenancy nor the Land Purchase Acts altered the distribution of land to any
great extent. Most rents fixed under the 1881 act pertained to farms that
had been in the same hands for years, while most tenant purchasers
bought a holding they or their families had been operating for an equally
long time. (The only exceptions were some provisions of the purchase
acts designed to break up untenanted grasslands and distribute them as
new farms to those lacking any holding. These redistribution provisions
accounted for few of the total tenant purchases.)24For most new proprietors, tenant purchase meant neither the break up of large farms into
holdings run by families for the first time, nor the amalgamation of tiny
plots into larger, more viable holdings. Further, in contrast with many
Continental reforms, the Irish land reform did not dispossess any
smallholders. Irish land purchase was mostly a redefinition of property
rights for those already occupying the land.25
In Ireland's reforms, the combination of rental agreements rather
than share tenancy, prior to reform, with the lack of substantial changes
in the distributionof land make it somewhatunusual.Land reformin
formercoloniallandssuch as LatinAmericahave typicallyinvolvedmajor changesin the distributionof land as large latifundiaare brokenup
with the aim of creatinga new class of peasantproprietors.Suchredistribution necessarily leads to importantchanges in agriculturalpractice
whether for good or ill. Historic reforms in continentalEurope also
changed the distribution of land. Revolutionary France confiscated
Church and emigre lands, selling them to the highest bidders, while under the Stein-Hardenburgreorganization of Prussian tenures in the early
nineteenth century, nearly 2.5 million acres of land were transferredfrom
small peasant to large estate owners in East Elbia alone, eventually creating a large class of landless peasants.26Most Asian reforms have begun
from land-tenure systems largely based on share tenancies as in India
and Taiwan. The Japanese postwar reform is one case with both rental
contracts before reform accompanied by limited changes in agricultural
structureand the allocation of land and, thus, is similar to the reforms in
Ireland.27As in the case of Ireland, the primary goal of reform was the
pacification of rural areas, with anticommunism as the key objective in
Japan.28
What Did Land Reform Accomplish?
How did the measured efficiency of agriculture evolve following the
Land Acts? In the absence of detailed microeconomic data from the pe-
TimothyW. Guinnaneand RonaldI. Miller
599
riod before land purchasebecame general,comparingthe performance
of owner-occupiedfarms with those that were still tenanted,no certain
answeris possible. Nonetheless,given the generalityof the reforms,if
therewere any importanteffects on agriculturalefficiencyone would expect a significantupwardshift in the trend of aggregateproductivity.
There is no evidence of such a shift. Real agriculturaloutputper acre
was stagnantover the period in question:it increasedby less than 7%
from the 1870s to the 1910s.29If insecurityof tenurehad been the cause
of low rates of investmentbefore the reforms,then capital formation
shouldhave acceleratedafterward.Instead,the capitalstock grew more
slowly in the 1890s thanduringthe 1850s-1870s. However,laborinput
fell quiterapidlyover the postreformperiodso thatoutputper capitaand
total factorproductivityrose sharply.In GreatBritaintherewas no comparablerise in outputper memberof the agriculturalworkforce.30But
this rise was alreadywell underway at the time of the landreforms,with
the rate of increase in output per worker greaterin 1851-81 than in
1881-1911.31 Thereis nothingin the aggregateevidence to suggest that
the Land Acts had any positive effect on agriculturalefficiency:if anything the data indicatea small negativeeffect.
The empiricalevidence is consistent with our argumentthat the
Irish Land Acts had little effect on the distributionof productiveresources,and so at most minoreffects on agriculturalefficiency. Yet the
land-reformprogram was certainly not insignificant:it redistributed
wealth among landlords,tenants,and Britishtaxpayers.The distinction
between redistributingwealth and reallocatingresources has caused
some confusionin the Irish historiography.One historian,for example,
claims thatby reducingrentsthe 1881 act loweredthe priceof landrelative to other inputs,therebyinducingfarmersto shift from labor-intensive tillage to the more land-intensivegrazing.32
JohnP. Huttman'sanalysis is flawed;a reductionin the rentpaid to the landlordwouldbe fully
capitalizedin the tenantright and so have no effect whatsoeveron the
opportunitycost of using land. Any new tenantwould pay for the reduced rent paid to the landlordin the form of an increasedtenant-right
paymentto the currenttenant.Nor did the purchaseacts improve resource allocation.The United Kingdom's taxpayerssimply subsidized
the transformation
of the landlord'srightto receive a rentinto a terminable annuity.
Revisionist analysis of Ireland'sland reformshas, then, correctly
arguedthatthese initiativeshad little directimpacton incentivesto work
and to invest. Accordingto this view, Parliamentcould have achieved
taxes that made landthe same ends by a programof nondistortionary
lords poorerand theirtenantswealthier.Yet the revisionistshave failed
to appreciatethat changingthe distributionof wealthby itself can have
importanteconomic effects. There are two channels through which
changesin wealthbroughtaboutby a land reformmight affect production.
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Economic Development and Cultural Change
Standardeconomic theory shows that a lump-sum increase in
wealth will decreaselabor supply so long as leisure is a normalgood.
Tenants whose rent is reduced (or whose rents are convertedto the
smallerpurchaseannuitypayments)would be less inclined to take on
additionalwork off their own farms, as had been the widespreadpractice. This effect may actuallyreduce agriculturaloutput,thoughit will
necessarilyleave the farmerbetteroff. The reductionin the laborsupply
of formertenantswill increasethe demandfor farm labor from others,
and so increaseagriculturalwages.33Less likely, the increasein farmers'
wealthmay improvenutritionalintakeandthusthe qualityof farmlabor.
Models of this effect of landreformhave been presentedby ParthaDasguptaand DebrajRay and by KarlOve Moene.34While some were certainly very poor, few Irishtenantswere likely to have been chronically
malnourishedby 1881; changesin nutritioncould not have been important in Ireland's land reform.35
Changingthe distributionof wealth can also affect investmentif
creditmarketsare less thanperfect.Wealthierfarmershave less need of
creditsourcesand are betterborrowersunderconditionsof imperfectinformation.Efforts to improve rural credit were a staple of late ninereformlegislationin muchof continentalEurope.We turn
teenth-century
to this aspectof Ireland'sland reformnext.
III. Tenancy Reform, Land Purchase, and Rural Credit
The availabilityof creditfor farmers,particularlysmallholders,was an
importantconcernof reformersin much of westernEuropeduringthe
nineteenthcentury.In Irelandthat concernled HoracePlunkettand his
Irish AgriculturalOrganizationSociety (IAOS) to introduceGermanstyle creditcooperativesin 1894. Ruralcreditbecame an especiallyimportantconcernin Irelandwhen difficultieswith the IAOS and concerns
aboutthe capitalizationof tenantpurchasersled to a full-scale critique
of ruralcreditfacilitiesin 1914.36Yet, paradoxically,land reformin Irelanddid not take some ratherobvioussteps to improveruralcreditfacilities. The questionis, Why not?
Tenancy and Credit
As we have seen, few farm operatorsowned their land in nineteenthcenturyIreland,and many smallholdershad no guaranteesof continued
occupationbeforethe LandActs of the 1870s and 1880s. Yet these tenants frequentlyborrowedmoney on the "security"of the land they did
not own, a fact bothpuzzlingand irritatingto observers.Beforethe famine, the Devon Commissionheard many complaintsthat tenant right
robbedincomingtenantsof capital.Severalof the Poor Law inspectors
remarkedin their 1870 reportthat debts associatedwith the acquisition
of tenant right sometimes proved burdensome for the new occupier.37
One landlord,a later,bitteropponentof tenantrightpracticesaid, "The
TimothyW. Guinnaneand RonaldI. Miller
601
fatal objectionto the Ulster tenantright is that it absorbs,in buying it,
all or a greatpartof whatevercapitalan incomingtenanthas, and leaves
him often withoutthe meansof farmingwell." 38Even landlordswho toleratedtenantright sometimestriedto regulatethe amountspaid to prevent the incomingtenantfrombeing burdenedwith largedebts.39Tenant
rightcould be extremelyexpensive. Contemporaries
figuredtenantright
values in "years purchase,"or the numberof years of the rent paid to
the landlordthat would equal the purchaseprice; informantstestifying
before the Devon Commissionstatedthattenantrightof 4-6-years purchase was ordinary,a substantialsum for a poor family. Between 1850
and the mid-1870s large increases in agriculturalprices were not
matchedby rentincreases,leadingto substantialincreasesin tenant-right
values. Systematicsurveys do not exist, but it was not unknownfor a
farmto sell for 10-20 years of the rent.
How did purchasersof tenantrightacquirethese large sums?Many
simply inheritedfromparentsor otherrelatives.An Irishtenantwho inheritedhis father'sfarm was inheriting,in fact, the farm's tenantright.
Other accountsmention village usurersand other informalsources of
cash for tenantright. More surprisingly,tenantsvery clearly could and
did borrowusing tenantright as collateral.Several of the Devon Commission's informantsstatedthat tenantsraised what amountedto mortgages on their tenant right, and the commission itself concludedthat
"debts are contractedon the securityof the tenantright."40K. O'Neill
refersto the same practicein CountyCavan.41
Tenantright also expandedthe possibilityof implicit loans from a
landlord.We argue elsewhere that landlordstoleratedtenantright because they had firstclaim againstarrearson paymentreceivedby an outgoing tenant.42Moreover,tenantright gave tenantsbetterincentivesto
pay their rent as they knew that any arrearswould eventuallybe deductedfrom the tenantright.Tenantright also made landlordsless concernedaboutsmall arrears,and so more willing to extend small loans in
the form of overdue rent.43Tenant purchaserslost this implicit credit
channel.W. F. Bailey, an official of the LandCommission,undertooka
brief study of the conditionsof tenantswho had purchasedholdingsunder the acts priorto 1903. He reportsthat "here and there a purchaser
complainedthathe must pay on the moment,and had to sell cattle at an
inconvenientperiod;that under the landlordsystem the tenantswould
have got time.""44
While it is truethatthe lower annuitypaymentswould
have reducedthe need to go into arrears,it is difficult to believe that
many purchasersdid not regretat one time or anotherthe passing of a
landlordwho would acceptthe rent a few monthslate.
Mortgage Credit and Land Purchase
Bailey identifiedlack of access to credit as one of the most important
problemsfor tenantpurchasers:"On a largenumberof estateswe found
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Economic Development and Cultural Change
thatthe purchasersare greatlyhamperedby the absenceof workingcapital, and that they are frequentlypreventedfrom making desirableimprovementsfromthis cause."45Bailey wenton to worrythatif some provision were not madeto meet these needs, new purchaserswouldturnto
informalcredit sources such as usurers.Althoughwe have little direct
evidence concerningthe uses to which loans were put, in testimonybefore the 1914 DepartmentalCommitteeone advocateof an agricultural
bank wantedto provide loans for purchaseof land, machinery,implements, seed, and fertilizer, among other purposes.46 The Departmental
Committeealso found that loans from banks and other formal sources
were expensivefor Irish smallholders.47
One way to improvecredit facilities would have been to emulate
the severalcontinentalcountriesthathad establishedland banksto provide long-termfinancingto farmerson the security of their holdings.
landreformshave includedexpansionsof ruralcreditfacilMost modemrn
ities with varyingdegreesof success.To the contrary,the LandPurchase
Acts containedclauses thatrestrictedthe abilityof formertenantsto obtain crediton the securityof landthey now owned.The 1903 act limited
mortgagedebtto 10 times the annualLandCommissionpaymenton any
holdingboughtwith stateaid.48While the statuteis somewhatunclearas
to whetherdebt to the stateis to be consideredwithinthe limit, it is evident from the DepartmentalCommitteereportof 1914 that it applies
only to second mortgages.49For some tenant purchasersthis limit reduced the availabilityof credit. Before land purchasethe tenanteffectively owned a fairly large portionof the land's value via tenantright
and was able to raise loans on this portionof the land withoutlegal restriction.Afterpurchase,the farmercould borrowonly 10 times the annual annuitypayment,or approximatelyone-thirdof the purchaseprice.
But this was the purchaseprice of the remainingvalue of the land, the
part not alreadyowned by the farmerthroughtenantright. This meant
thatso long as the value of tenantrightwas greaterthanone-thirdof the
land purchaseprice, the farmercould borrowless money afterpurchasing his holdingthanhe could before.Thatis, tenantrighthadestablished
a coproprietorship
in land, and beforepurchasetenantscould borrowon
the securityof the partof the land they owned. The rules of tenantpurchase, however,forbadthem to take full advantageof these older property rights.
Considerthe hypotheticalexample,presentedin table 3, of a farm
that would rentfor ?10 in an unregulatedmarket.If the farmwas under
a second-termjudicial rent, and if both the first and second terms reduced the rentby 21%, then the rentpaid in 1900 would be ?6.40. The
value of the tenantrightwould be about?111, assuming3.25%interest
and thatthe Ricardianrentwould still be ?10. As we have seen, the tenant could borrowagainstsome, perhapsall, of the ?111 in tenant-right
value. If the tenantpurchasedthe holdingfrom the landlordat 20 times
TimothyW. Guinnaneand RonaldI. Miller
603
TABLE3
RESTRICTIONS
ACT MORTGAGE
EFFECTOFLAND PURCHASE
ON HYPOTHETICAL
FARM
Amountin ?
Mortgaging tenant right:
Ricardian rent
Judicial rent (assuming two 15% reductions)
Value of tenant right
Mortgage permitted for same farm purchased under land act:
Purchase price (assuming price 20 times annual rent)
Annual payments to Land Commission
Maximum total mortgage on the holding
10
6.4
111
128
4.7
47
NOTE.-Assumes tenant right capitalized at 3.25%, the interest rate charged
by the Land Commission.
the annualrent,paying?128, fully financedby an advancefromthe Land
Commission,his annuitypaymentswouldbe about?4.7 so thatthe maximum he could borrowwould be ?47. The largerthe proportionof the
farm'stotal value thatthe occupierowned beforepurchase-that is, the
largerhis tenantrightrelativeto the renthe paid the landlord-the more
severethis restrictionon mortgaging.The unusualinstitutionalfeatureof
tenantright, and the ability to borrowagainst it, meant that mortgage
restrictionthatmighthave been neutralundera more standardtenurearrangementcould actuallyreducethe availabilityof ruralcredit.
The mortgagingrestrictionwas not absolute. A tenant purchaser
could apply to the Land Commissionfor permissionto exceed the debt
limit. Few did so, however, and of those who did between 1904 and
1913 about 20% were refused and many that were grantedpermission
were allowed to mortgageless than the amountrequested.50
While the
low numberof applicationsmight seem to indicatethatthe restrictionon
mortgagingwas not binding,the DepartmentalCommitteestatesthatthe
constrainton borrowingwas bindingand thatindeedit shouldbe, otherwise therewould be "overmortgaging.''"51
More likely purchasers,when
faced with the choice of an applicationto the LandCommissionor raising fundsin some otherfashion,chose to deal with a bankor some other
nonmortgagelender.A later legal decision also provideda loophole by
decidingthat so-calledjudgmentmortgageswere outsidethe purviewof
the 1903 act. In the case of a judgmentmortgage,if an unsatisfiedcreditor could show that his debtorowned an interestin land, the creditor
could petition a court to give him, effectively, ownershipof that land
subjectto satisfactionof the debt.52
The questionis, Why did the governmentadopt a policy intended
to restrictaccess to capital?In part,it was the action of a paternalistic
governmentthat simply did not trustpeasantproprietorsnot to overburden their holdings with debt, leading either to their own ruin or to the
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EconomicDevelopmentand CulturalChange
ruinof theirheirs. Two objectionsto this argumentreceivedlittle attention. First, the reasonableconclusion to draw from the evidence presented to the DepartmentalCommitteeor the Royal Commissionon
Congestionin Irelandwould be that those seeking credit would find it
one way or another.The real choice, from the government'sviewpoint,
was betweena peasantrywith debtssecuredon landanda peasantrywith
debts securedin some otherway. Since nonmortgagedebts were, by all
accounts, likely to be more expensive, one would think the mortgage
debts would be preferable.A second objectionis more obvious: Why
should the governmentcare more about excess indebtednessamong
peasantsthanamongany othersocial class?
Another motive for the mortgagerestrictionswas perhapsmore
transparent:the governmentwanted to maintainthe seniority of its
claims on purchasers.Bailey admitsas much in rationalizingcontinued
state supervisionof land purchasers:"For its own securityso long as
the purchasersare liable for the repaymentof their State annuities,the
Governmentis boundto see thatnothingis done thatwill endangerthat
security. .
.
. If land purchase is to be largely extended it is advisable
thatfurtherconditionsbe providedthat will limit the power of charging
and mortgagingholdings in a mannerthat is injuriousto the occupier
and to the generalcommunity."53
In other words,if mortgagingendanthe
to
gers
purchaser'sability repaythe state, then the state shouldprevent the practice.Nowheredoes Bailey considerthe possible economic
benefits of mortgaging.54
In the event, very few tenantpurchasersdefaultedpriorto the partitionof Ireland.In its reportfor 1920, the Land
Commissionnoted thatonly 0.23%of purchasers(owing 0.23%of payments) were in arrearsthatyear.55
Problemswith Title to Land
The DepartmentalCommitteearguedthat anotherobstacle to securing
debtson Irishlandwas a poor systemof title registration.The committee
claimed that Continentalsmallholderswere better-servedby mortgage
credit because of more effective title-registrationsystems, althoughno
such system was in place in England.56
This commenthighlightsa second missed opportunity;ruralcredit facilities would have been greatly
aided by a methodof registeringboth titles and mortgagesthatenabled
potentialborrowersto establishclearly and with little cost what prior
claims existed on a given holding.Irelandhad no system of compulsory
title registration,althoughpurchasersreceiving governmentassistance
were requiredto registertheirnew property.Even registryof title in Ireland was problematic,since it requiredthe discharge of "equities,"
claims by emigrantrelatives and otherswith a potentialinterestin the
An individualwho contemplatedmakinga mortgageloan hadfirst
land.57"'
to make sure that the borrowerhad clear title to the land and, then, had
to establishwhat priorliens had been placed on the holding. The latter
TimothyW. Guinnaneand RonaldI. Miller
605
was virtuallyimpossibleif the borrowersought to conceal priorloans;
registrationof mortgageobligationswas possible but not required(except for mortgageson land purchasedwith state aid underthe 1903 act),
and the method of registrationrequiredcostly searches throughmany
volumes.Muchmore efficientmodels were alreadyin place in continental Europe.Bavariapresentsa typical case; there, each locale kept one
set of recordsrecordingpropertyrightsin land (the Grundbuchor Kataster), and anotherrecordingmortgagesand other encumbrancessuch as
Both were up-to-datepublic
family charges (the Hypothekenbiicher).
documents,based on contractsdeposited in public archives, and each
was organizedby holding.To establishpriorclaims on a holding, a potentiallenderhad only to inspectthese documents.Complaintsaboutthe
availabilityof ruralcredit were common in Bavariaat the end of the
nineteenthcentury,but it is also clear thatindividualswere able to raise
mortgageson very small properties-in some cases consisting of little
more thana gardenplot.58
Irish Joint-StockBanksand MortgageLoans
Parliamentcan be faultedfor the creditlimitationsin the tenantpurchase
rules or for failing to establishcompulsoryregistrationof title and mortgages. Anotherlimitationon mortgagingcame from a differentsource:
ruralsocial normsthatpreventedbanksfromplayinga role in mortgage
credit. The second half of the nineteenthcentury witnessed a great
expansionof joint-stockbanksin Ireland.By 1900 most smalltownshad
a branchbank open for at least partof each week, yet these banksdid
not providemortgageloans to Irishfarmers.59The banksthemselvestold
the DepartmentalCommitteethatit was not theirpolicy to lend on mortgage security.The inabilityto use this well-developedfinancialstructure
to finance agriculturalinvestmentwould seem a majorloss. The banks
arguedthat they were constrainedby feelings towardland and forced
sales: since neighborswould not buy land sold at distressedsales, it was
not valuableas collateral.6This view was statedby T. W. Delaney,representativeof the CountyLongfordCommitteeof Agriculture:"I consider the difficulty which banks .
. .
have on a forced realisation of their
security,makes it practicallyimpossibleto borrowa sixpence on land
security... the timidityof the people... aboutinterferingin a forced
sale, naturallypreventsbanksor othersfrom advancingmoney."61Delaney did not foreseemortgagebankinguntilpeopleviewed debtsto banks
as like any otherobligation.62
The problem did not disappearwith partition;the 1926 Banking
Commission,which took a generally critical attitudetoward bankers,
blamedthe lack of mortgagefacilities on the people: "It will never be
possible for any countryor its inhabitantsto borrowfreely, unless there
be full recognitionof the justice of the debt so incurred,and full readiness to have the creditortake possession of the propertyand convertit
606
EconomicDevelopmentand CulturalChange
to his own use..,. in the event that the debtorfinds himself unwilling
or unableto meet the termsof his agreement."63
The banks'unwillingness to extendmortgagecreditrobbedIrishtenantpurchasersof one of
the majorbenefitsof ownership,the abilityto use land as collateralfor
loans. Yet here the culpritwas not Parliament,which could not legislate
ruralattitudes;the problemlay in the banks'perceptionsof what would
happenshouldthey have to sell out a failed borrower.To the extentthat
these perceptionswere accurate-and a profit-makingbankhad no reason to abstainfrom a particularline of businesswithoutgood reasonthenruralnormsformedone importantlimit to the abilityof landreform
to improveagriculturalefficiencyin Ireland.
MortgageCreditand the Commoditization
of Land
Another possible benefit to be had from the redefinitionof property
rightsin landmay come frommakinglandmorelike any othercommodity-relatively simpleto purchaseandto sell. If landcan easily be traded
in open markets,then the usual marketmechanismensuresthat land is
allocatedto its highest-valueuse. Ireland'slandreformhad mixed implicationsfor the commoditizationof land.Criticsof the prereformtenancy
system often complained,bitterly, that landlordswould make tenants
competefor the rightto rent farms,thus increasingrents.To the extent
this practicewas general-and more recent researchshows that it was
not-tenants were simplycomplainingthatsuch competitionraisedrents
by allocatingland to its highest-valueuse.64
We will now considerhow tenantright, whetherin its customary
formor in the formestablishedby the 1870 and 1881 LandActs, altered
the ability to buy and to sell land. Legally it did not do so at all; there
were no provisionsagainstselling a holdingthathad a judicialrentfixed,
andthe rentremainedwith the holding,so a new tenantcouldbe guaranteed of the judicialrent.The reformof tenancymight have actuallyimproved the land marketbecause it removed all uncertaintyabout compensationfor improvementsand the futurecourseof rents.Previously,a
purchaserwouldhave to satisfyhimself as to the landlord'spracticesand
intentionsbefore purchasinga holding.With regulation,however, individuallandlordpracticesbecamenearlysuperfluous.
Crottyhas arguedthatthe tenantpurchaseprogramwas a step backward in this respect,in that "it substantiallydestroyedthe competitive
marketfor land."65He creditsthe land purchaseacts with saddlingIreland with a large numberof small, uneconomicholdings.Crottyclaims
that once a reducedannuitypaymenthad replacedrent payments,Irish
farmersbecameless sensitiveto the truecost of owning and using their
land; "as an owner-occupier,a farmerneed not worrylest anotherman,
by his willingnessto invest more capitalat a lower rateof return,might
be able to pay a higherrent and cause his own eviction."'66This posits
eithera remarkabledegreeof irrationalityon the partof the new owners
TimothyW. Guinnaneand RonaldI. Miller
607
or simplya preferencefor land ownership.An owner-occupiercould sell
his land at a profitto anyonewho believedthathe could more efficiently
farm it. If the owner chose not to do so because of a strongdesire to
hold land then this would indeedcause productionto be lower thanotherwise. But it would not affect economic efficiency per se since the
owner would gain utility from simply owning the land:land would remain in the handsof those to whom it had the most value.
While the acts had little direct impact on the commoditizationof
land, theirindirecteffects throughthe limitationof mortgagecreditmay
have createdimportantobstacles to the consolidationof holdings. The
acts' direct effect on the patternof landholdingwas close to neutral.
While the acts containedprovisionsthatlimited subdivisionand subletting, no seriousattemptforciblyto amalgamatesmallholdingswas made
in the reforms,apartfromthe somewhatlimitedeffortsof the Congested
DistrictsBoard.But the limitationson mortgagingdiscussedabove created majordifficultiesin raising sufficientmoney to purchaseholdings.
As was reportedto the DepartmentalCommittee,the purchaseof holdings that had been obtainedthroughtenantpurchasewas made signifiSome land
cantlymore difficultthroughthe limitationson mortgaging.67
transactionsthat could have improvedthe efficiency of land use would
not have been possiblebecauseof the inabilityto borrowfundssufficient
for purchase.This meantthatonly those in possessionof sufficientindependentresourcescould actively engage in consolidatingholdings and
employingland in its highest value use.
IV. The Limits to Land Reform
Agitationover such issues as tenantright and tenantpurchasewere a
centralfeatureof the several nationalistmovementsof late nineteenthcenturyIreland.Yet interestin land and land reformwas, as historians
now appreciate,less a matterof genuine concernover ruralconditions
than an attemptto use a popular,bread-and-butter
issue to advancethe
nationalistcause. Parnell himself, probablythe most successful nineteenth-centuryIrishpoliticianoutsideof O'Connell,rode to prominence
largely by harnessingagrariandistress;"It was the land issue that supplied, in 1879, the politically mobilizing factor that made Parnell."68
Gladstone'sinterestin Irishland stemmednot from any interestin economic developmentbut from his desire to pacify Ireland.Earliereconomic historiansacceptedthe critiqueof land tenurein Irelandas promoting inefficiency,and with that view also acceptedthe idea that the
Land Acts must have promotedincreasedefficiency. Revisionist economic historians,startingwith Solow, effectively challengedthe view
thatthe LandActs were a cure for any disease the Irishwere really suffering.This articleprovidesfurtheranalysisto strengthenthe revisionist
position.
Yet this is not to say thatlandreformin Irelandcould not have been
608
Economic Development and Cultural Change
a helpful step toward agricultural efficiency. Rural credit in Ireland was
problematic and formed an impediment to efficiency; and several Continental countries offered models that might have been profitably imitated.
Yet when Parliament regulated, and then abolished, Irish landlordism, it
did so in a way that did little to improve agricultural conditions, and
missed a major opportunity to place rural credit on a more secure footing. The limitations to mortgaging imposed by the acts may have even
reduced rural credit availability by eliminating the ability to borrow
against tenant right and thus have helped to lock in a pattern of inefficiently small holdings.
This is not to say that land reform in Ireland was a mistake: "To
show that [the Land Act of 1881] was widely realized on economic
grounds to be either wrong or irrelevant is to miss the whole point."69
The same can be said for the land purchase program. The Land Acts in
Ireland reflect the outcome of a political struggle, a struggle between
landlords and tenants, between tenants and their creditors, and between
Irish Parliamentaryrepresentatives and English political parties. Land reform in Ireland accomplished what the people of the day in fact wanted.
Nonetheless, it should be kept in mind that, within the bounds of its political objectives, a land reform can still be effective economic policy:
the Irish reforms missed important opportunities to create real economic
benefits.
Notes
* We thankTimothyJ. Besley, WilliamEnglish,and ChristinaPaxsonfor
commentson an earlierdraft.
1. B. Solow, TheLandQuestionand the IrishEconomy,1870-1903 (Cambridge,Mass., 1971).
2. D. CollisonBlack, "The IrishExperiencein Relationto the Theoryand
Policy of EconomicDevelopment,"in EconomicDevelopmentin the LongRun,
ed. A. J. Youngson(London:Allen & Unwin, 1972).
3. TimothyBesley, "PropertyRights and InvestmentIncentives:Theory
and EvidencefromGhana,"Journalof Political Economy103 (1995): 909-37.
4. Evidencefromearlierin the centuryis moresketchybut shows the same
patternof a predominanceof tenancy at will among smallerfarmers.Strictly
speaking,tenancyat will and yearlytenancywere different(see Solow for discussion).Yet the distinctionis usuallynot maintainedin the Irishhistoriography,
and the term "tenancyat will" is used throughoutthis article.
5. J. Mokyr, WhyIrelandStarved:A Quantitativeand AnalyticalHistory
of the Irish Economy,1800-1850 (London,1985), chap. 4.
6. RaymondCrotty,Irish AgriculturalProduction:Its Volumeand Structure (Cork:CorkUniversityPress, 1966), p. 51.
7. K. H. Connell,"PeasantMarriagein Ireland:Its StructureandDevelopment since the Famine,"EconomicHistoryReview,2d ser., 14, no. 3 (1962):
502-23, quote on 521. Connell'sview of pre-LandAct tenuresechoes a long
line of Irish economic historians,the most notable of which was George
O'Brien,whose TheEconomicHistoryof Irelandfrom the Unionto the Famine
(London:Longman,Green, 1921) was quite influential."Elastic rent" and its
Timothy W. Guinnane and Ronald I. Miller
609
deterrentto propertyaccumulationwerethe centerpieceof Connell's explanation
of prefaminepopulationgrowth.
8. Solow; W. E. Vaughan,Landlordsand Tenantsin Mid-VictorianIreland, (Oxford:ClarendonPress, 1994).
9. Solow; and Vaughan,Landlordsand Tenantsin Mid-VictorianIreland
discuss the basic institution.In our "Bonds withoutBondsmen:Tenant-Rightin
NineteenthCenturyIreland,"Journal of EconomicHistory 56, no. 1 (1996):
113-42, we arguethattenantrightwas, from the landlord'sviewpoint,a workable alternativeto securitydeposits,thushelpingto explainwhy some landlords
were willing to toleratethe practice.Historianshave rightly insisted that the
three F's do not exhaustthe significanceof tenantright. See, W. E. Vaughan,
Landlordsand Tenantsin Ireland, 1848-1904 (Dublin:Economic and Social
History Society of Ireland,1984), p. 20, and Landlordsand Tenantsin MidVictorianIreland.
10. In "Bonds withoutBondsmen,"we arguethatit would generallynot
be in the landlord'sinterestto raise rentsto the Ricardianlevel even in the absence of rentcontrol.The judicialrentsmay have been lower thanwas optimal
from the landlord'sviewpoint,however.
11. Thatis, ?4 capitalizedat 3% is ?133.
12. Of the 588,000 acresof landresoldby the CongestedDistrictsBoardas
of 1919, approximatelyhalf had been eitherimproved,enlarged,or reorganized
significantlyby the board.This is a relativelysmall fractionof the total land
affectedby the acts (Houseof Commons,"Twenty-SeventhReportof the Congested DistrictsBoardfor Ireland,"Cmd. 759 [1920], p. 61).
13. E. R. Hooker,Readjustments
of AgriculturalTenurein Ireland(Chapel
Hill: Univeristyof NorthCarolinaPress, 1938), p. 80.
14. The 1903 act requiredtenantsto pay at 3.25%;the 1909 act raisedthe
interestrate to 3.5% (ibid., p. 90).
15. Ibid., p. 92.
16. These figuresexclude sales to tenantsof the Churchof Ireland,which
were relativelyfew and did not come underthe legal definitionsof the Land
Acts. The data are from House of Commons,"Irish Land PurchaseActs: Return," Cmd. 6930 (1913).
17. House of Commons,"Reportof the Irish Land Commission,"Cmd.
572 (1920), p. vi, and "Report of the Estates Commissioners,"Cmd. 577
(1920), p. iv.
18. House of Commons,"ReportsfromPoorLaw Inspectorsin Irelandas
to the ExistingRelationsbetweenLandlordand Tenantin Respectof Improvements on Farms,"Cmd. 31 (1870).
19. Vaughan,Landlordsand Tenantsin Ireland,1848-1904 (n. 9 above),
p. 22, and Landlordsand Tenantsin Mid-VictorianIreland(n. 8 above).
20. Connell (n. 7 above), p. 522.
21. AlfredMarshall,Principlesof Economics,8th ed. (New York:Macmillan, 1979), pp. 535-36, outlinesthe basic objectionto sharecropping.Marshall
exaggeratedsharecropping'sundesirableeffects; for a morerecentdiscussionof
the institution,see JosephE. Stiglitz, "EconomicOrganization,Information,and
Development,"in Handbookof DevelopmentEconomics,ed. H. Cheneryand
T. N. Srinivasan(New York:NorthHolland,1988), 1:93-160, andthe literature
he discusses.
22. CormacO Grida, "IrishAgriculturalHistory:Recent Research,"AgriculturalHistoryReview38, no. 2 (1990): 165-73, esp. 165.
23. In Irelandthe Land PurchaseActs forbadthe subdivisionof holdings
boughtwith stateaid. But, given thatthe tendencyafterthe faminehad been for
the averagefarmto become larger,it seems unlikelythat these provisionshad
610
Economic Development and Cultural Change
much effect on the distributionof land. Some Irish tenantsdid lose common
rights,such as access to turf,as partof the land purchasearrangements.
24. Underthe provisionsof the 1903 act some untenantedlands were sold
by directpurchase;in value these amountedto aboutone-halfof 1%of the land
sold by directpurchasethroughthe EstatesCommissioners.After the 1909 act
untenantedlandhad to be purchasedinitiallyby the EstatesCommissioners,repackagedand resold. As of 1919 this amountedto less than 200,000 acres, of
which some fractionwas accountedfor by wastes, mountains,and turbarylands
(House of Commons,"Reportof the EstatesCommissioners,"p. xi).
25. An older Irishhistoriographysometimesclaimedthatthe regulationof
tenancydiscouragedsubdivisionbecauseonly withthe threeF's did Irishtenants
careenoughabouta holdingto resist subdivision.This view is centralConnell's
explanationof postfaminechangesin marriagepractices,e.g.
26. On the confiscationof land in revolutionaryFrance,see JeromeBlum,
The End of the Old Order in Europe (Princeton, N.J.: Princeton University Press,
1978), p. 394. Regardingthe reorganizationof Prussiantenures,see RobertA.
Dickler, "Organizationand Changein Productivityin EasternPrussia,"in European Peasants and Their Markets, ed. W. N. Parker and E. L. Jones
(Princeton,N.J.: PrincetonUniversityPress, 1975), pp. 269-92, esp. p. 277.
27. See Russell King, Land Reform: A World Survey (London: Westview,
1977) for one descriptionof the Japanesereforms.
28. GeneralMcArthurhimself wrote in 1964 that the main thrustof the
reformwas anticommunism(as cited in JamesPutzel, CaptiveLand:ThePolitics ofAgrarian Reform in the Philippines [London: Catholic Institute for Inter-
nationalRelations,1992], p. 237).
29. The productivitynumbers are derived from table 5.4 in Michael
Turner,After the Famine: Irish Agriculture, 1859-1914 (Cambridge: Cambridge
UniversityPress, 1996), basedon the "nonstandard,"changingweight,agricultural price index. The capital growth figures that follow are from the second
panel of the same table.
30. The sourceis ibid., table 5.2.
31. Fromcalculationbased on ibid., table 5.3, panel B, col. 2.
32. John P. Huttman,"The Impactof Land Reformon AgriculturalProductionin Ireland,"AgriculturalHistory46 (1972): 353-68, esp. 355.
33. This mechanismis describedin MarkGersovitz,"LandReform:Some
Theoretical Considerations," Journal of Development Studies 13, no. 1 (1976):
79-91; and MarkR. Rosenzweig, "RuralWages, LaborSupply,and LandReform:A Theoreticaland EmpiricalAnalysis," AmericanEconomicReview68,
no. 5 (1978): 847-61. In the more generalmodel presentedby Rosenzweigthe
effect of land reformon the ruralwage is indeterminate;but a negativeeffect
would requirethat landlordsbe insufficientlycompensatedfor the land and for
landlordsor theirfamilies to supplysignificantamountsof farmlabor,circumstancesthat do not apply to the Irish case. Of course, changes in labor supply
have nothingto do with agriculturalefficiency.
34. ParthaDasguptaandDebrajRay, "Inequalityas a Determinantof Malnutritionand Unemployment:Policy," EconomicJournal97 (1987): 177-88;
KarlOve Moene, "Povertyand Landownership,"AmericanEconomicReview
82, no. 1 (1992): 52-64.
35. Periodicharvestshortfallsdid occurthroughoutthe late nineteenthcenturybut arenot strictlyrelevantto the mechanismwe arediscussing.If the Land
Acts did improvenutritionin economicallymeaningfulways, the improvements
would have been concentratedamongthe very poor landholdersof the Atlantic
fringe.
36. TimothyW. Guinnane,"A FailedInstitutionalTransplant:
Raiffeisen's
Timothy W. Guinnane and Ronald I. Miller
611
Credit Cooperatives in Ireland, 1894-1914," Explorations in Economic History
31, no. 1 (1994): 38-61, argues that althoughthe Raiffeisen system of credit
cooperativesdid not workwell in Ireland,the collapseof the creditcooperatives
does not suggest that loans were not needed.The DepartmentalCommitteereport on agriculturalcredit (House of Commons, "Reportof the Departmental
Committeeon AgriculturalCredit in Ireland," Cd. 7375 [1914], Q9152) is
surely a polemicaldocument,but many of the faults they point to in Ireland's
of the banksandcommonto other
systemwereboth admittedby representatives
Europeancountries.
37. House of Commons,"ReportsfromPoor Law Inspectorsin Irelandas
to the ExistingRelationsbetweenLandlordand Tenantin Respectof Improvements on Farms" (n. 18 above).
38. W. Bence Jones, The Life's Work in Ireland of a Landlord Who Tried
to Do His Duty (London:MacMillan,1880), p. 182.
39. M. A. Maguire, The Downshire Estates in Ireland, 1801-1845: The
Management of Irish Landed Estates in the Early Nineteenth Century (Oxford:
Clarendon,1972), p. 145, gives this concernas one reasonwhy LordDownshire,
who accededto tenantrighton his northernestates,triednonethelessto regulate
the practice.
40. Devon Commission, Digest of Evidence Taken Before Her Majesty's
Commissioners of Inquiry into the State of the Law and Practice in Respect to
the Occupation of Land in Ireland, 2 vols. (Dublin: Thom, 1847), p. 290. For
additionaldiscussion of tenant right mortgages,see Maguire;or K. O'Neill,
Family and Farm in Pre-Famine Ireland: The Parish of Killashanda (Madison:
Universityof WisconsinPress, 1984).
41. O'Neill, p. 67.
42. Guinnaneand Miller (n. 9 above).
43. The landlordwould not make large loans to the tenantbecause that
would eliminatethe incentiveeffects that were the motivationfor tenantright.
44. House of Commons, "Reportby Mr. W. F. Bailey, Legal Assistant
Commissioner,of an Inquiryinto the PresentConditionsof TenantPurchasers
under the Land Purchase Acts," Sessional Papers, 1903, Land Purchase (Ireland) Acts, March 25, 1903, vol. 57, p. 19.
45. Ibid., p. 24.
46. House of Commons,"Reportof the DepartmentalCommitteeon AgriculturalCreditin Ireland"(n. 36 above).
47. The Royal Commission on Congestion heard similar evidence and
came to similarconclusions.LiamKennedy,"A ScepticalView on the Reincarnation of the Irish 'Gombeenman,'" Economic and Social Review 8, no. 3
(1977): 213-22, sharestheir view of ruralcredit conditionsat the turnof the
century.
48. House of Commons,"Bill to Amendthe Law Relatingto the Occupation andQwnershipof Landin Irelandandfor OtherPurposesRelatingThereto,
and to Amend the Labourers(Ireland)Acts," Sessional Papers, 1903, Irish
Land,July 8, 1903, para.54.3, p. 157.
49. Note, however,thatHooker(n. 13 above) interpretsthe rule as including the statedebt (p. 80), in which case no mortgageat all could be raiseduntil
many years aftertenantpurchase.
50. House of Commons,"Reportof the DepartmentalCommitteeon AgriculturalCreditin Ireland,"app. 17.
51. Ibid., sec. 822.
52. Ibid., sec. 825.
53. House of Commons,"Reportof an Inquiryinto the PresentConditions
of TenantPurchasersunderthe LandPurchaseActs," p. 23.
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Economic Development and Cultural Change
54. Bailey's concernaboutexcessive borrowingis difficultto squarewith
his generalimpressionthatlandpurchasehad led farmersto take a greaterinterest in theirholdings.He even claims thattenantpurchaserswere more likely to
be responsibleaboutdebt. (ibid., p. 10).
55. House of Commons,"Reportof the IrishLandCommissioners,"pp.
viii-ix.
56. House of Commons,"Reportof the DepartmentalCommitteeon AgriculturalCreditin Ireland"(n. 46 above), sec. 782.
57. Ibid., secs. 782-93.
58. J~iger,Hypothekenbuch und Grundbuch: Lehrbriefe fiir den mittleren
Archivdienst,Nr. 10 (Munich, 1975), describesboth the land recordsand the
mortgageregistry.On this pamphlet,see TimothyGuinnane,"Notes on Archival Sourcesfor Creditand Land-Holdingin Bavaria,1807-1914," workingpaper (Yale University,New Haven,Conn., 1995).
59. House of Commons,"Reportof the DepartmentalCommitteeon AgriculturalCreditin Ireland,"app. 3.
60. Althoughwe do not have any accountsof violence at particulardistressedsales, fearof violence againstthose biddingwas likely partlyresponsible
for the difficultyof such sales.
61. House of Commons,"Reportof the DepartmentalCommitteeon AgriculturalCreditin Ireland,"Q12403.
62. Ibid., Q12409.
63. Banking Commission,(Irish Free State), Banking Commission:2nd,
3rd, and 4th InterimReports(Dublin:StationaryOffice, 1926), pp. 20-23.
64. Competitiverents are, in fact, incompatiblewith tenant right. See
Vaughan, Landlords and Tenants in Mid-Victorian Ireland (n. 8 above), for a
discussionof rent-settingpractices.
65. Crotty(n. 6 above), p. 88.
66. Ibid.,p. 90.
67. House of Commons,"Reportof the DepartmentalCommitteeon AgriculturalCreditin Ireland"(n. 46 above), p. 356.
68. R. A. Foster,ModemIreland,1600-1972 (New York:VikingPenguin,
1989), p. 402.
69. Solow (n. 1 above), p. 155.