The Act was enormously popular.  The landlord, in view of the manifold insecurities of land tenure in Ireland, made an excellent bargain, and the tenant, tempted by the immediate transformation of his rent into an annuity of reduced amount, ignored the extension by twenty years of the period of redemption, and was willing to agree at high prices for the purchase of his land.  The average price of land sold rose from the seventeen and a half years’ purchase under the old Acts to over twenty years’ purchase, and the soil of Ireland rapidly began to change hands.  But the Act broke down on finance, as adapted to what were then estimated as the requirements of the purchase operation.  The estimate for the total sum required was one hundred millions, and the purchase money was to be raised by successive issues of 2-3/4 per cent.  Guaranteed Land Stock.  Sums needed from time to time for payment of the landlord’s bonus were also raised by stock, and were placed to an account known as the Land Purchase Aid Fund.

Now, any loss on flotation, due to stock being issued at a discount, was to be borne, in the first instance, by the Ireland Development Grant,[155] and, if and when that was exhausted, by the ratepayers of Ireland through deduction from the grants in aid of Local Taxation.[156] The stock, like all Government stocks at that period, fell heavily from the first, and in 1908 the point was reached when further issues would have entailed a heavy loss payable out of Irish rates, growing ultimately, as it was calculated, to an annual charge of more than half a million.  The infliction of such a burden upon the ratepayers of Ireland was felt to be inequitable.  Ireland was not responsible for the evils which necessitated purchase, and even if she were, the ratepayers were not the right persons to be mulcted.  Meanwhile, purchase was at a complete standstill.

4.  This serious situation led to Mr. Birrell’s Land Act of 1909, which was based upon the Report of a Treasury Committee which sat in the previous year.[157] The problem was twofold:  (a) how to deal with future agreements to purchase, between landlord and tenant;(6) how to deal with agreements to purchase pending under the Act of 1903, but as yet uncompleted.

(a) With regard to future agreements, there are four main points:(1) The old policy of payment in stock, instead of in cash, is reverted to, and the stock is a 3 per cent. stock.

(2) The tenant’s annuity is raised from 31/4 to 31/2 per cent.

(3) The period of redemption is reduced from sixty-eight and a half years to sixty-five and a half years. (4) The landlord’s bonus is allocated on a graduated scale, under which the higher the price the land is sold at, the less is the bonus conferred.  These changes, though no doubt somewhat prejudicial to the prospects of Land Purchase, were absolutely necessary, owing to a cause beyond human control—­the condition of the money-market.