The method pursued was as follows. Any individual landlord could
agree with any individual tenant on the price which he would accept for
the extinction of his interest in that tenant's holding. The State
facilitated the transaction by advancing that amount to the landlord in
_cash_ whenever the holding offered sufficient security, and accepting
from the tenant an undertaking to pay an instalment of L4 a year for
every L100 advanced over a period of forty-nine years. The instalment
comprised L3 for interest, 2_s._ 6_d._ for expenses, and 17_s._ 6_d._
for sinking fund. The loan from the exchequer was secured against
individual failures to pay by the realisable value of the holdings.
The salient features in this procedure were that the landlord received
cash and that the tenant paid interest at the then existing rate on
Consols, viz. 3 per cent. Both these features are important. A payment
in cash, or its equivalent, is preferable for such transactions to a
payment in stock, with a fluctuating value, because, if the stock
appreciates the landlord gets more than he bargained for, and this, by
arousing the suspicions of other would-be tenant-purchasers, produces a
disinclination on their part to buy.
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