1914 hardly did more than make up for the disappearance, owing to economic causes, of small holdings elsewhere. We do not think all parts of the country are suited for small holders, and there are certainly areas in which they find it difficult to maintain themselves. We have no wish to set up small holdings indiscriminately, or without reasonable regard to market facilities, but we find that there are districts in which the new small, holders created by the State, and the small holders who have independently established themselves, are reasonably prosperous; and we believe that such areas are larger than is often supposed.

112. We do not anticipate that it will be possible for some time to come to settle suitable men on the land without any cost to the State, but in our opinion the outlay involved in the resumption of the State's small holding policy need not be of a character which should deter immediate action. Under the Small Holdings and Allotments Act, 1908, local authorities had no power to acquire land for small holdings unless they were satisfied that the rents to be obtained from the small holders would cover the loan charges and other outgoings. These holdings were not, however, quite self-supporting, for the National Exchequer paid annually to each local authority half the cost of ascertaining the demand for small holdings, the legal costs of acquisition of land and half the loss, if any, which the County Council incurred, provided that such loss was reasonable. The actual cost falling on the Exchequer under these provisions was £394,000 for the whole of the period 1908-14, and over 14,000 new holdings werecreated in England and Wales. After the war, however, the settlement of ex-service men became urgent, and the Land Settlement (Facilities) Act was passd in 1919. It removed the limitation on the acquisition of land contained in the Act of 1908, and enabled Councils to acquire land after obtaining the approval of the Ministry for a small holdings scheme, even if the scheme could only be carried out at a substantial loss. The whole loss on schemes under the Act of 1919 falls on the Exchequer and none of it on the rates. The cost of settling exservice men has been very heavy, but the scheme comes to an end in 1926, when a valuation is to be made of the interest of each Council in the land acquired.

113. In considering, however, a scheme for settling civilians which could now be put into operation, it must be remembered that to-day the cost of agricultural land has returned to nearly the level of 1914, while the cost of the necessary stock, horses, cattle, pigs and poultry is gradually falling to pre-war level. Buildings and machinery are still substantially higher; but if the subsidy which is given towards housing is credited to the housing policy of small holdings, the additional expenditure which should fall upon the State should not be serious, and would be justified. It is desirable from the financial point of view that the buildings should be of the simplest character; and with the development of the new methods of outdoor stock-keeping, the charges for

equipment can in many districts be kept down. We do not consider, however, that the financial provisions of the Act of 1908 are quite adequate.

114. In one matter at least we consider that the financial policy hitherto pursued should be modified. In England it has been the practice, not only to charge the small holder with interest on the capital expended and allowance for depreciation on the property, but also to call upon him, by means of a sinking fund, to pay for the whole cost of the land; although, at the end of the period, the holding becomes, not the property of the small holder, but of the County Council. Even though the charge involved amounts on an average only to some two or three shillings per acre, it should not in justice be charged against the small holder; and the relief of two or three pounds annually is a substantial amount in his narrow budget. The cases of existing tenants under the Act of 1908 should be equitably reconsidered from this point of view.

115. The system of purchase and ownership by the County Councils of the land and of the leasing of it to small-holders seems to combine largely the advantages of ownership without its disadvantages; and the gradual extension of this experiment in public ownership of the land is in itself desirable. At the same time, attention should be directed to the alternative method of the public authority renting land by agreement or, if necessary, by arbitration, for the purpose of small holdings. If it is considered desirable to avoid the investment of public, money in the purchase of land, this method might be adopted. We consider, however, that, on the whole, the system of public ownership is preferable.

116. In recent decades forms of tenure has been created, both in Germany and in Denmark which give the small holder the main advantages of ownership, while not depriving the rest of the community, represented by the State, of any possible increment of value which may arise from changing environment apart from the occupier's own labour and capital.

117. We are of opinion that, when the State takes up anew the task of promoting small holdings, a considerable change may advantageously be made in the machinery which it employs for the purpose.

118. The Division in the Ministry of Agriculture now charged with the official business arising from small holdings should be transformed into a much more substantial Land Settlement Department. We do not propose that it should take the main work of actual settlement out of the hands of the County Agricultural Authorities, but we think it should act not only as a supervising or stimulating body, but also as the supreme small holdings authority of the country responsible for seeing that throughout the suitable districts of England and Wales adequate provision is made for satisfying the demands of good applicants.

119. Under the Act of 1908 it was enacted that if Councils do not provide small holdings where necessary, their powers can be transferred to Small Holdings Commissioners, who are officers of the Ministry of Agriculture, in order that the Commissioners may themselves acquire land and sell or let it in small holdings. For administrative reasons it is extremely difficult for the Commissioners to exercise this power, and the Act of 1919 enabled the Minister of Agriculture for a period of three years after the passing of the Act to exercise powers of acquiring land for small holdings concurrently with the Councils. This power expired in 1922, but we think it is desirable that it should be revived and that the Ministry should have these concurrent powers, under carefully defined conditions, and this for two reasons. In the first place, only a central body, responsible for the whole country can survey the needs and capabilities of the country as a whole. In the second place, the county authorities very naturally regard themselves as responsible only for the people actually residing within their own areas. They do not welcome applications from outside the county borders, even if the applicants come from an area similar in character or applications from their own people who have gone to live elsewhere. This is particularly marked in the case of county boroughs, who naturally have considerable difficulty in acquiring land for small holdings. It often happens that a man who has been in the country and has gone to live in one of the large towns, finds it extremely difficult to obtain a holding, although he may have some capital and in other respects may be a very desirable candidate.

B.-Tariffs.

120. When Western Europe was confronted by the danger to its agriculture which was occasioned in the last quarter of the 19th Century by the arrival of the cheap grain of the new world and of Russia, each of the great nations, with the exception of Britain, reverted to measures of tariff protection. It becomes necessary to give some account of the legislation by which this was effected.

121. Of the smaller nations, Belgium adopted a limited tariff, while Denmark and Holland remained practically free trade. The reasons for the policy of Denmark and Holland are not far to seek. The area of Denmark, as we have already observed, was less largely devoted to cereals and the Danish farmers had for some time been turning to arable dairy farming, so that they did not feel to any great extent the competition of the cheap wheat from the new lands. Likewise in Holland, 56 per cent. of the cultivated area was under grass; and of the area under crops, only 27 per cent. or about 11 per cent. of the total cultivated area, was under corn.

122. It would create a misleading impression to treat the general movement for agricultural protection as if it stood by itself. By its side was going on an equally widespread movement

for the protection of national manufactures. And both movements--though they were naturally furthered by the immediate interests of agricultural and industrial producers, received the support of statesmen and political thinkers as embodiments of one great principle: the principle of nationality.

123. In the previous quarter of a century (1850-1875), the principle of freedom of trade reached almost unlimited expression in the tariff policies of the great countries. That principle was cosmopolitan in its outlook, even though it was conceived to be in the interest of each several country. It assumed that in every country there was some particular direction or directions to which it could most economically devote its productive energies and resources. It assumed that the test of this economic advantage was to be found in price. And the practical conclusion was that each country should import everything which it could thereby, at the time, obtain more cheaply than if made at home. It was held that, by this international division of labour, the world's wealth as a whole, and the wealth of each particular country, would reach its maximum.

124. Circumstances now brought this optimistic view into conflict with national sentiment. On the side of industry it became clear that directions of activity on which the nation had already entered with success, or for which it seemed to possess the necessary natural resources, could be cut off or blocked by manufacturers in other countries who were earlier in the field of large scale production. On the other side, the rural side of national life, it became clear that the national agriculture could not stand up against the competition of cheap foreign grain, and that to leave it unprotected would mean catastrophe to the peasantry, who still owned and cultivated by far the larger part of the soil. It is not necessary at this point to attempt any judgment between these opposing points of view that which would allow international division of labour and national specialism to be pushed just as far as the competitive forces of the moment might drive; and that which entertained a conception of national life which looked upon a wide agricultural basis and a diversity of industry as objects justifying state intervention. All that is necessary here is to recognise the actual clash of ideals.

125. Confining now our consideration to agriculture, it will be recognised that with human nature as it is, and with national policies democratically determined, it made it immensely easier for agriculturists to obtain protection when industrialists were also seeking and obtaining tariff defence. Whatever may be the value of a theory of "all-round protection," its apparent fairness naturally appeals to the average man. And this explains the "solidarity" of industrial and agrarian interests in a certain stage of development. It is the stage when industry, like agriculture, is mainly concerned with keeping the home market. When industry feels its home market secure, and sets out to obtain foreign markets, some of its representatives will commonly be ready to

abandon the alliance with agricultural interests. They will begin to be moved by the consideration that cheaper imported food will render possible lower wages to industrial workpeople, and thereby strengthen their competitive position in the outside world. And this explains the later weakening of the alliance of industry and agriculture, or even the division within protectionist forces, which has shown itself in various European countries in the present century. The multiplication, in consequence of the War, of national tariff barriers, putting fresh obstacles in the way of international trade, may be expected to counteract once more this diverging tendency, and to renew the feeling of national solidarity.

126. Germany in 1879 reverted to protection after a brief interval of almost complete free trade. On the agricultural side this was due not only to the growing danger of competition in the home market from other lands, but also to the loss of their European markets for grain by the great landowners of the Eastern provinces, who had hitherto found free trade to harmonise with their pecuniary interests. As the main bread corn of the German people was rye, and the acreage under rye was some three times as great as the acreage under wheat, Russian rye was felt to be even more a danger than American wheat. The duties, however, imposed in 1879 were quite low. It was not till 1885, after the fall in grain prices owing to imports had become more alarming, that they were made substantial. They were again raised in 1887; and remained on that level till February 1892. The particulars, so far as grain is concerned, were as follows:

Duty per Metric Ton: in marks.

The equivalents in shillings per quarter, in the case of wheat,

Under the tariff of 1906 the duty was increased to an equivalent of 118. 10d.

127. That these duties served as a defence to German farmers there can be no doubt. But it would be a mistake to suppose that they kept German prices on the old level and prevented any cheapening of food to the industrial worker. In fact a considerable fall in prices did take place. If the eight years up to 1875-6 be compared with the eight years up to 1891-2, the fall in the price of