THE RURAL PROBLEM 51 



beneficial effects. It would tend to decrease the value of 

 land by more than the amount of the mortgage. From the 

 point of view of sentiment land would, in the circum- 

 sl inces, become a less desirable object. There would be a 

 gradual decay of sentimental values. This is desirable. The 

 price of land, an article of necessity, should not be enhanced 

 by a 40 per cent, load of sentiment. 



(iii) The State, by accepting a mortgage instead of a capital 

 sum, would be temporarily a loser. This also would be de- 

 sirable. There was always some ground in the objection 

 raised in connection with large Death Duties that they were 

 taking capital for annual expenditure. The irredeemable 

 mortgage would not be open to this charge. It would also 

 have the additional advantage of compelling the State to 

 resort to a larger income tax. 



(iv) But perhaps the greatest advantage of the proposal 

 lies in the fact that it leads gradually to Nationalisation. It 

 gives the State an interest, and a rapidly increasing interest, 

 in the land. In any particular case the State might acquire 

 an interest equal to, say, 12 per cent, of the selling value, and 

 considerably more than this percentage of economic value, 

 which will, when sentiment is dead, represent the ultimate 

 value. As the mortgage is irredeemable, and as the rate of 

 duty depends on the value of real and personal estate to- 

 gether, the State would, in a comparatively short time, 

 possess a major interest in the land. By this time the senti- 

 mental value would have disappeared, and the selling and 

 economic value be the same. It would then become a 

 question whether the State, possessing so large an interest, 

 should not on terms acquire the whole. This proposal of an 

 irredeemable mortgage would represent a policy of gradually 

 buying out the landowners with their own money. 



E2 



