HOUSING: 
 
 'he Growth of State Interest and Control 
 and what it may lead to. 
 
 ^Being a Lecture delivered before the Royal Philosophical 
 Society of Glasgow, on 1st December, 1920.) 
 
 BY 
 
 W. E. WHYTE, 
 
 SOLICITOR, HAMILTON, 
 Clerk to the District Committee of the Middle Ward of Lanarkshire. 
 
 EDINBURGH AND GLASGOW : 
 
 WILLIAM HODGE & COMPANY, LIMITED, 
 
 PRICE ONE SHILLING NET. 
 
HOUSING: 
 
 The Growth of State Interest and Control 
 and what it may lead to. 
 
 (Being a Lecture delivered before the Royal Philosophical 
 Society of Glasgow, on 1st December, 1920.) 
 
 BY 
 
 W. E. WHYTE, 
 
 SOLICITOR, HAMILTON. 
 Clerk to the District Committee of the Middle Ward of Lanarkshire. 
 
 EDINBURGH AND GLASGOW : 
 
 WILLIAM HODGE & COMPANY, LIMITED, 
 
HOUSING : 
 
 The Growth of State Interest and Control 
 and what it may lead to. 
 
 THE housing question or, to be more explicit, the prob- 
 lems connected with the housing of the people are not of 
 recent origin. They have engaged the attention of phil- 
 anthropists, statesmen, and Parliaments for generations. 
 Complexity and difficulty have increased as time has gone 
 on, and while the State has toyed with the question of 
 direct public control of the housing of the people, an out- 
 standingly important step was taken last year when the 
 duty was unequivocally placed upon local authorities to 
 take adequate measures from time to time, and as often as 
 occasion requires, by way of providing suitable and sufficient 
 houses for the working classes. 
 
 Prior to the middle of the nineteenth century the housing 
 problem, as we now understand it, did not exist. Insani- 
 tary conditions were, of course, woefully common and wide- 
 spread, but, having regard to the different standards which 
 prevailed, and to the general distribution of the popula- 
 tion throughout the urban and rural districts of Scotland, 
 it is not surprising that in the earlier decades of the century 
 the dangers of insanitary modes of living were not so obvious 
 as to compel recognition and to demand the application of 
 remedial measures. It was only when the effects of that 
 group of economic forces collectively known as the industrial 
 revolution had penetrated into the lowlands of Scotland that 
 public attention was arrested by the invasion of the towns 
 and villages by increasing masses of regularly and casually 
 employed workers, compelled to reside as- near to their 
 work as possible, and in most cases unable to afford the 
 
expense of any but the most humble homes. Even under 
 modern conditions, and with the powers and funds now at 
 their disposal, the resources and ingenuity of local authori- 
 ties would have been taxed to their utmost in the attempt 
 to regulate the housing of so large a proportion of the popu- 
 lation. The undeveloped authorities of the time, so far 
 from adequately coping with the situation, totally failed 
 in most instances to appreciate ' its significance, not 
 only to those immediately concerned, but to the com- 
 munity at large; and in some cases even contributed to 
 accentuate the overcrowding and overhousing by acquir- 
 ing for the erection of public buildings sites which were 
 urgently needed for workers' dwellings. By the united 
 operation of these causes, combined with the rapid increase 
 in numbers of the lowest strata of the population, there was 
 produced by 1840 that serious menace to the public health 
 and general well-being of the country for which a complete 
 remedy has not yet been provided. 
 
 A study of the earlier laws relating to the housing of the 
 people is both interesting and informative, as showing the 
 views taken by the Legislature at various periods, and the 
 provisions which were conceived to be appropriate for deal- 
 ing with this all-important social question. 
 
 The first housing enactment of note was passed in 1846 as 
 one of the fruits of the agitation of the small band of phil- 
 anthropists, headed by the Earl of Shaftesbury, to whose 
 unremitting efforts were due so many humanitarian pro- 
 visions which were added to the statute book about this time 
 in the teeth of opposition of the supporters of the laissez- 
 faire doctrine. This statute was the Nuisances Removal 
 and Contagious Diseases Act, 9 & 10 Viet. o. 96, and it 
 provided that if two medical men certified to a burgh 
 authority that any dwelling-house or other building was in 
 " a filthy and unwholesome condition," the burgh authority 
 might apply to the Sheriff for an order calling upon the 
 owner to remove the nuisance. 
 
 Unfortunately this enactment proved a dead letter, and 
 two years later there was passed an amending Act, namely, 
 the Nuisances and Contagious Diseases Act, 1848, 11 & 12 
 Viet, c. 123. 
 
Such evidence as is available points to the view that resort 
 was rarely had to the powers provided by these statutes, 
 and that negligible results were achieved. 
 
 Meantime the housing problem began to take a strong 
 hold upon the public imagination, and the important dis- 
 covery was made that the application of measures designed 
 merely to improve existing property, much less the piece- 
 meal removal of only the most flagrant plague spots, would 
 never cure the malady unless definite action was taken 
 simultaneously with a view to providing additional accom- 
 modation of a suitable character. The Earl of Shaftes- 
 bury won general acceptance for this view and for the State's 
 corporate responsibility in relation thereto, by carrying into 
 law the Labouring Classes' Lodging-Houses Act of 1851, 14 
 & 15 Viet. c. 34, which empowered local authorities to 
 provide and maintain " lodging-houses " for the artisan 
 labouring classes; but it was on private enterprise rather 
 than on State intervention that public opinion relied for 
 the provision of the necessary housing accommodation. In 
 1847 operations were commenced by the Metropolitan Asso- 
 ciation for Improving the Dwellings of the Industrial Classes, 
 one of the first of the semi -philanthropic associations whose 
 efforts both in London and throughout the country have done 
 so much to provide sanitary and convenient dwellings on 
 sites previously occupied by slums of the worst character. 
 Unfortunately Scotland had no George Peabody to take the 
 lead in financial undertakings of this nature, but sufficient 
 reliance was placed in private enterprise to justify the passing 
 into law in 1855 of the Dwelling-Houses (Scotland) Act, 18 
 & 19 Viet. c. 88, a somewhat singular enactment (which 
 did not apply in counties) designed to encourage and 
 regularise the formation of associations for the erection or 
 improvement of dwelling-houses for the working classes. 
 
 In the following year (1856) a definite advance in " im- 
 provement " legislation was made by the third Nuisances 
 Removal Act, 19 & 20 Viet. c. 103, which proceeded upon 
 the recital that the earlier Acts of 1846 and 1848 had failed 
 to attain their object. 
 
 In this Act we find for the first time the expression which 
 
8 
 
 has since become so common, " unfit for human habita- 
 tion. 3 ^ 
 
 In view of the difficulty of obtaining money for such* volun- 
 tary associations as it was the object of the Dwelling-Houses 
 (Scotland) Act of 1855 to encourage, another Act was passed 
 intituled " An Act to enable the Public Works Loan Com- 
 missioners to make advances towards the erection of dwell- 
 ings for the labouring classes." This Act was known as 
 " The Labouring Classes' Dwelling-Houses Act, 1866," 29 & 
 30 Viet. c. 28, and was deemed to be incorporated with, 
 and was to be taken as part of the Labouring Classes' 
 Lodging-Houses Act, 1851, which had applied only to 
 England. 
 
 The Act of 1866 marks the first admission on the part 
 of the Government of a. duty, however limited, to lend 
 financial assistance in the provision of housing. 
 
 Simultaneously with the problem of additional housing, 
 the question of the improvement of existing accommodation 
 and the demolition of houses unfit for human habitation had 
 been under careful consideration, and in the Public Health 
 (Scotland) Act, 1867, 30 & 31 Viet. c. 101, special atten- 
 tion was given to the eradication of nuisances, while a special 
 section was devoted to an attack upon " underground dwell- 
 ings." 
 
 The 1867 Act was a comprehensive measure and dealt 
 with many aspects of public health, including sanitation, 
 hospital provision, the appointment of medical officers and 
 sanitary inspectors and the like. 
 
 The next Act which followed was limited in its applica- 
 tion to burghs and police burghs. It was intituled " An 
 Act to provide better dwellings for artisans and labourers," 
 and was known as " The Artisans' and Labourers' Dwellings 
 Act, 1868," 31 & 32 Viet. c. 130. Under this Act certain 
 powers were conferred on local authorities as regards houses 
 occupied by the working classes which were unfit for human 
 habitation. 
 
 The Artisans' and Labourers' Dwellings Improvement 
 (Scotland) Act, 1875, 38 & 39 Viet, c, 49, was an Act " for 
 facilitating the improvement of the dwellings of the work- 
 
9 
 
 ing classes in large towns in Scotland," and introduced a 
 new feature, as it authorised local authorities to deal with 
 unhealthy areas by means of an improvement scheme. It 
 applied only to Royal and Parliamentary burghs in Scot- 
 land containing, according to the last published census for 
 the time being, a population of 25,000 and upwards. 
 
 The Act of 1875 was followed by the Public Works Loans 
 Act, 1879, 42 & 43 Viet. c. 77, which was "An Act to amend 
 the Acts relating to the Public Works Loan Commissioners " 
 and for other purposes, and made provision for advances 
 being made by the Public Works Loan Commissioners. 
 
 The next Act was the Artisans' Dwellings Act, 1882, 45 & 
 46 Viet. c. 54, which was intituled " An Act to amend the 
 Artisans' and Labourers' Dwellings Act." 
 
 All the sections of Part I. applied only to England. 
 
 Part II., however, which applied to Scotland, provided 
 that if in any place to which the Artisans' and Labourers* 
 Dwellings Act of 1868 applied it was found that any build- 
 ing was an " obstructive building" and impeded ventilation, 
 steps could be taken in terms of the Act to have it pulled 
 down. 
 
 It is interesting to note that under sub-section (8) of section 
 8 of this Act. what is now popularly known as the principle 
 of betterment was recognised. 
 
 Prior to the Act of 1890, which was a consolidating Act, 
 the last of the housing statutes was intituled "An Act to 
 amend the law relating to dwellings of the working classes, 
 and was known as the Housing of the Working Classes Act, 
 1885," 48 & 49 Viet, c. 72. The Act of 1885, though of 
 comparatively recent date, is now only of historical interest, 
 and is merely a link in the chain connecting the earlier 
 legislation with that of the present day. 
 
 The Housing of the Working Classes Act, 1890, consoli- 
 dated the provisions (so far as retained) of the repealed Acts, 
 and introduced considerable amendments. While the original 
 provisions of this Act have since been in many respects super- 
 seded, and in other important respects extended and enlarged 
 by subsequent legislation, it is still referred to as " the 
 principal Act." 
 
10 
 
 Part I. of the Act dealt with " unhealthy areas," and 
 applied to burghs only. The local authority, if satisfied of 
 the unhealthiness of a district, are empowered to make a 
 scheme for its improvement. 
 
 Part II. of the Act deals with " unhealthy dwellings," i.e., 
 houses unfit for human habitation, and now applies to 
 both burghs and rural areas. Provision is made for a 
 closing order where necessary and the demolition of such 
 houses. In areas where houses have been closed under a 
 closing order the local authority is empowered to proceed 
 with reconstruction schemes. 
 
 Obstructive buildings also come within the purview of this 
 part of the Act, and, if necessary for the remedying of 
 evils arising therefrom, such buildings can be pulled down. 
 
 Part III. of the Act, which was adoptive, contained the 
 substantive provisions empowering local authorities to acquire 
 land and erect buildings suitable for lodging-houses for the 
 working classes. 
 
 It may be of interest to refer briefly here to the extent to 
 which those powers have been exercised by local authorities, 
 and this can best be done by quoting the following extract 
 from the Minority Report of the Royal Commission on the 
 Housing of the Industrial Population of Scotland, afterwards 
 referred to. 
 
 From a table contained in the report it is found ' ' that all 
 the housing already provided by local authorities throughout 
 the whole of Scotland was only sufficient to accommodate 
 3484 families out of a total of separate families (as given in 
 the census of 1911) of 1,949,147, or in the cities dealt with, 
 of 346,387. In four only of these burghs (G-lasgow, 
 GreenO'ek, Perth, and Oban) do the houses provided equal 
 1 per cent, of the whole, and in these it may be said that 
 the Town Council has made an appreciable contribution to 
 the housing of the burgh. Indeed, Glasgow has rehoused 
 approximately the same number of persons (and nearly the 
 same percentage of the population of the city before the last 
 extension) as have been rehoused in the much more celebrated 
 Liverpool housing schemes." 
 
 The Local Government Board has issued a return which 
 
11 
 
 seems to bear out the contention that local authorities have 
 not shown any great eagnerness in the past to provide houses. 
 It gives the number of schemes either initiated or contem- 
 plated by local authorities and approved by the Board up 
 to March, 1915. 
 
 These are grouped under the following six headings : 
 
 (a) Schemes approved by the Board since 1913, - 8 
 
 (6) Schemes being considered by the Board, - 14 
 
 (c) Schemes on point of submission to the Board, - 1 
 
 (d) Schemes under preparation, 11 
 
 (e) Local authorities considering schemes, - 16 
 (/) Local authorities with whom the Board are in 
 
 communication, - - 10 
 
 A further return also supplied by the Local Government 
 Board gives the extent of such operations promoted by local 
 authorities during the year 1913, and in the twenty- third 
 year after the passing of the 1890 Act, which shows that 
 for the whole of Scotland, for that year, the financial obliga- 
 tions undertaken by local authorities for housing amounted 
 to rather less than 21,000. 
 
 The Burgh Police (Scotland) Act, 1892, was a statute of 
 far-reaching importance, and contained many excellent pro- 
 visions relating to the housing of the people. 
 
 The Public Health (Scotland) Act, 1897 (a very important 
 measure), did not essentially deal with the housing of the 
 working classes, although it introduced far-reaching pro- 
 visions relating to the construction of houses in county areas. 
 
 The Housing of the Working Classes Act of 1903, which 
 mainly dealt with certain minor amendments, did not until 
 1909 apply to Scotland. 
 
 One of its most important provisions was to the effect that 
 Part III. of the Act of 1890, dealing with the provision 
 of houses for the working classes, was to extend to, and take 
 effect in, every burgh and district in Scotland for which it 
 had not been adopted, as if it had been so adopted. 
 
 The next important phase in the housing question in 
 Scotland was the appointment of a Royal Commission in 
 1912. The duty entrusted to the Commissioners by the Royal 
 
12 
 
 Warrant, dated 30th October, 1912, was "to inquire into 
 the housing of the industrial population of Scotland, rural 
 and urban (with special reference in the rural districts to the 
 housing of miners and agricultural labourers), and to report 
 what legislative or administrative action is, in their opinion, 
 desirable to remedy existing defects." 
 
 The Commissioners examined numerous witnesses, made 
 various visits of inspection, obtained returns from local 
 authorities, and supplemented the information thus gained by 
 instructing special investigation by technical officials. 
 
 Startling figures are given as to the housing conditions 
 in Scotland. 
 
 The Commission found that in 1911 45.1 per cent, of the 
 population were living more than two in a room, 21.9 per 
 cent, more than three in a room, and 8.6 more than four in 
 a room. In 1911 there were 129,731 single-apartment houses 
 in Scotland, equal to 12.8 per cent, of the total number of 
 houses. In the <same year there were 409,355 two-apartment 
 houses in Scotland, equal to 40.4 per cent, of the total 
 number of houses. Of the population in Scotland, 8.4 per 
 cent, (about 400,000 people) live in single-apartment houses, 
 and 39.5 per cent., or about 1,881,529 people, live in two- 
 apartment houses, as against 1.3 per cent, and 5.8 per cent, 
 respectively in England and Wales. 
 
 The Commission Report was presented in 1917, and the 
 statute which followed its submission was the Housing, Town 
 Planning, &c. (Scotland), Act, 1919. 
 
 The Act of 1919 probably provides the greatest advance 
 in housing legislation. 
 
 There is now introduced for the first time in connection 
 with the housing of the people a direct, comprehensive, and 
 effective code to secure (a) that there shall be a sufficiency 
 of housing accommodation at all times in every district, and 
 (b) that necessary schemes of improvement of unhealthy areas 
 shall be satisfactorily and expeditiously carried out. 
 
 Should any approved scheme under Part III. or any re- 
 housing scheme under Part I. or Part II. of the principal Act, 
 or any scheme for the provision of houses for their employees 
 by a County Council result in a loss, the Board of Health 
 
13 
 
 must, if the scheme is carried out within the period specified 
 by the Board, pay to the local authority or the County 
 Council, as the case may be, such part of the loss as may be 
 determined to be payable by regulations made by the Board. 
 
 Far-reaching provisions are included in the Act for 
 encouraging the provision of houses by public utility societies 
 and housing trusts. Local authorities are empowered to 
 promote and assist a public utility society whose objects 
 include the erection, improvement, or management of houses 
 for the working classes. The Treasury may also contribute 
 towards the cost of carrying out schemes by public utility 
 societies and housing trusts. 
 
 Local authorities may lend to the owner of a house or 
 building the whole or any part of such sum as may be 
 necessary to defray the cost of works of reconstruction, en- 
 largement, or improvement of the house or building to make 
 the same fit for habitation as a house or houses for the work- 
 ing classes. 
 
 It is provided that it shall not be lawful for any person, 
 without the consent of the local authority, to erect any 
 house intended for human habitation with less accommoda- 
 tion than three apartments. 
 
 There are many other minor provisions in the Act as well 
 as amendments of the Housing Acts and the Small Dwellings 
 Acquisition Act, 1899. Under the latter Act, as amended 
 by the Housing, Town Planning, &c. (Scotland), Act, 1919, 
 the amount which can now be advanced by a local authority 
 for the purchase of small houses is 85 per cent, of the market 
 value of the ownership, and the value of the house on which 
 the advance may be made is extended to .800. 
 
 Taken altogether, the measure is a fairly comprehensive 
 one, and gives effect to a number of the recommendations 
 urged by the Housing. Commission. It essentially secures, 
 as already mentioned, that there shall be a duty upon all 
 local authorities to see to it that at all times there is adequate 
 housing accommodation in their district for the working 
 classes, and it seeks to raise appreciably the whole standard 
 of housing in Scotland for the future. 
 
 The Housing (Additional Powers) Act, 1919, a supple- 
 
14 
 
 mentary measure designed to meet the deficiencies disclosed 
 by a few months' practical experience of the Act passed 
 earlier in the year, received the Royal assent so recently as 
 23rd December, 1919. Its leading sections had for their 
 object the encouragement of private enterprise in the build- 
 ing of dwelling-houses by means of the payment of subsi- 
 dies (ranging up to 260 per house), while the Act also con- 
 tains provisions for regulating the erection of buildings 
 other than dwelling-houses, and for preventing the demoli- 
 tion of dwelling-houses, or their conversion to other pur- 
 poses. 
 
 Having dealt with the course of legislation in the sphere 
 of housing, it will be of interest to show the liability that 
 has now been undertaken by local authorities and the State 
 in the matter of providing as a first discharge of the duty 
 now placed upon them by statute the houses necessary to 
 meet the needs of the working classes throughout the 
 country. 
 
 It is estimated that the following numbers of houses are 
 
 required, and that local authorities have either propounded 
 
 or will propound schemes dealing with those numbers : 
 
 England and Wales, - 500,000 
 
 Scotland, J 236,000 
 
 736,000 
 
 The cost per house has, of course, varied, and will vary 
 according to the time of erection and the locality in which 
 it is to be built. But it may be said that an average price 
 of 1000 per house is well within the mark. 736,000 
 houses at 1000 per house means 736 millions of money. 
 Local authorities are to be responsible for meeting any de- 
 ficit between the rentals obtained and the outgoings on the 
 scheme to the extent, in England of Id. per , and in 
 Scotland 4-5ths of Id. per , on the rateable valuation. 
 It is impossible at this stage of development of the country's 
 housing programme to give with any accuracy an estimate 
 of the deficiency that will accrue on housing schemes and the 
 amount of the annual charge that will fall to be borne by 
 the State and by the local authorities of the country. A 
 
15 
 
 rough computation of the position, however, may be 
 attempted. The following statement shows the annual 
 expenditure referable to a house costing 1000, with interest 
 based at 5 per cent, and 6 per cent, respectively: 
 
 5 per cent. 6 per cent. 
 Repayment of principal and 
 
 interest (annuity method 
 
 60 years), - - 52 16 61 13 
 
 Feu-duty, 100 100 
 
 Rates, &c., 28 6 8 32 16 8 
 
 Repairs, 1 10 1 10 
 
 Insurance, 0150 0150 
 
 Supervision and management, 0150 0150 
 
 Requiring the exaction 
 on economic grounds of 
 a rental of, say, - 85 98 10 
 
 If we assume that an average rental of 30 will be ob- 
 tained (and that is assuming a fairly generous figure for 
 Scotland at all events), we find that the deficit per house 
 per annum is, say, 60. On 736,000 houses that reaches 
 the staggering total of over 44 millions (30 millions for 
 England and 14 millions for Scotland) to be met each year 
 by the local authorities to the extent of the produce of Id. 
 per on their valuation in England, and to the extent of the 
 produce of 4-5ths of Id. per on their valuation in Scot- 
 land. The total valuation of Scotland is about 
 35,510,205, and 4-5ths of Id. on same yields 118,368. 
 That leaves to be found by the State each year, so far as 
 Scotland is concerned, 13,881,632. These figures are, of 
 course, very broad and general. The whole valuation of 
 Scotland will not be concerned, as certain communities will 
 not be building. Again, valuation figures will alter from 
 year to year, and rentals will also change periodically. This 
 current year valuations have been increased to the extent 
 permitted by the Rent Restriction Act in the case, of houses 
 occupied by tenant occupiers, and in the case of houses 
 occupied by owners in varying degrees from 15 per cent, to 
 25 per cent. The rateable value of public works has also 
 
16 
 
 been substantially raised. The valuation of Scotland must 
 in consequence ha,ve been increased by several million 
 pounds. But the figures may at all events convey a general 
 indication of the liabilities which a full scheme of housing 
 provision may entail upon the State and upon the local 
 authorities of the country. It may further be premised, 
 as afterwards explained, that the large total of houses men- 
 tioned is not likely to be provided under the present State- 
 aided arrangements, but, on the other hand, there will fall 
 to be added to the financial commitments the State-aid or 
 subsidy to be afforded to (1) schemes of reconstruction; (2) 
 public utility societies; (3) private builders; and (4) local 
 authority employees' housing. And the expenditure on 
 housing will not stop with the provision of the new houses. 
 As a consequence of their provision, the whole standard of 
 housing will be raised. It may, I think, be taken for 
 granted that immediately a, fair number of houses are erected 
 a crusade will start for securing a raising of the standard 
 of existing dwellings. In many cases owners will not be 
 able out of their resources to conform to the new standard, 
 and their houses will be closed. Local authorities will, con- 
 sequently, be obliged to build additional houses. The point 
 of this will be appreciated. It is obvious that when new 
 houses are available at moderate' rentals the tenants of old 
 houses will not be content to remain satisfied with their 
 living conditions. Furthermore, until the improved standard 
 is reached, the tendency, as additional houses are provided, 
 will be to depreciate the rentals of the inferior houses by 
 reason of their comparison with the new houses. Recon- 
 struction schemes will inevitably be forced on at enormous 
 expense. 
 
 It is, of course, manifestly impossible to contemplate the 
 exaction of a rental of 80 or 90 for the houses, and the 
 State scheme of subsidy, therefore, at once finds its justifica- 
 tion and vindication. So long as wages and living condi- 
 tions are in the realm of present figures, an .economic rental 
 for the houses could not possibly be demanded. 
 
 The situation and the conditions which had to be dealt with 
 could only have been considered as wholly exceptional and 
 
17 
 
 emergency in their character. There can be no other good 
 reason for asking the State or the local authority to sub- 
 sidise house rents or to make grants to persons building 
 houses. The principle of subsidy, while undesirable and 
 economically unsound, had of necessity to be applied in 
 many directions during and as a result of the war; in other 
 words, State assistance and control were inevitable so long 
 as emergency and unsettled conditions prevailed to the 
 serious extent that they did prevail. But the demand on 
 all hands now is for decontrol and for the cesser of subsi- 
 dies in order that trade and industry may re-establish them- 
 selves on the ordinary lines and according to ordinary 
 economic and commercial principles in short, the cry is 
 that the law of supply and demand should again operate and 
 that State intervention should cease. In that view there 
 may be general agreement. But it is quite impossible to 
 apply it under present conditions in the case of the building 
 of houses. If the houses are to be built privately, the 
 builders must obtain a sufficient return for their expendi- 
 ture; in other words, a full economic rent must be charged 
 and be chargeable for the houses. But it is manifestly 
 impossible to obtain such a rent. The only alternative 
 would be to raise wages so as to enable the working classes 
 to pay an economic rent; but that process again would 
 create difficulties of such a complex and serious nature that 
 it cannot be considered feasible. It would mean that 
 industry and commerce would be seriously handicapped; 
 it would introduce sterious inequalities as between those 
 members of the working classes who occupy existing houses 
 and those who are to occupy the new houses, and generally 
 would be quite unworkable. Accordingly, the bringing in 
 of the State and the local authorities to write off as an 
 emergency liability the deficit that is to accrue between a 
 normal rent and the outgoings is probably the one and only 
 method of solving the situation with which the country is 
 faced. But what may be the effect of such a policy? 
 
 It is argued that as a result of the new duties placed upon 
 local authorities by the Housing Act of 1919, and in view of 
 the enormous house building programme which they are to 
 
18 
 
 carry out, and having regard also to the fact that the State 
 lias now committed itself to a policy of financial assistance, 
 private enterprise in the matter of providing houses for the 
 working classes* can never be resuscitated, and probably such 
 a statement of the position is fairly near to the truth. Private 
 builders can only build if they are to have a profit. Without 
 State assistance it would not be possible for them to build 
 and let, or to build and sell houses which cannot command 
 a full economic return by way of rental. The only alternative 
 to the situation is, as already mentioned, to have the earn- 
 ings of the working classes brought up to such an amount 
 that they can pay their way for all the necessaries of life 
 without assistance from any one. However desirable such a 
 state of matters might be, it does not seem to be a feasible 
 or practicable solution under present-day conditions. 
 
 The provision of houses by local authorities is not neces- 
 sarily to be confined to their immediate house building 
 schemes. The statute of 1919 not only makes no qualifica- 
 tion as regards time in this connection, but requires local 
 authorities after the preparation of their initial scheme deal- 
 ing with the needs of their area, to prepare a scheme for the 
 provision of houses for the working classes as often as 
 occasion requires. The financial provisions of the statute, 
 however, limit the State assistance to be given to local 
 authorities to cases where approved schemes have been car- 
 ried out within such period after the passing of the Act 
 (August, 1919) as may under regulations be specified by the 
 Board of Health with the consent of the Treasury. The 
 period allowed under the regulations (which have been made 
 in terms of the statute) within which the approved schemes 
 must be carried out in order to earn the State assistance is 
 three years after the passing of the Act, but it is provided 
 that this period may be extended if local or general circum- 
 stances render it, in the opinion of the Board, necessary 
 that an extension of time should be granted. In view of the 
 lamentably slow progress that has been made with building 
 
 *The term "working classes" is not limited to those popularly 
 known as working men. It now receives a liberal interpretation vide 
 the Scottish Board of Health. 
 
19 
 
 during the first year of this period, it is inconceivable that 
 even a substantial number of the houses required can be 
 provided within the prescribed term, and consequently there 
 will be good reason for granting an extension of the three 
 years' period. But the three years may be taken as an 
 indication that the Government do not favour the granting 
 of State aid for schemes that may be spread over the next 
 ten, twenty, or thirty years. Accordingly, one may assume 
 that the State do not contemplate that they will be called 
 upon to render financial assistance for the enormous number 
 of new houses which are required for the country as a whole 
 as already referred to, and which cannot be provided for 
 perhaps a considerable number of years. As afterwards 
 mentioned, the Government have it in mind that economic 
 conditions in the matter of the financing of houses should be 
 in contemplation after 1927. If that view were to be realised 
 the houses erected by local authorities after that date would 
 not consequently receive any financial assistance from the 
 State. 
 
 But the State's indebtedness colossal as it is will prob- 
 ably be reduced as time goes on. The recent Increase of 
 Rents Act, which authorised a substantial increase in rentals, 
 will mean that the rents of local authorities' houses will be 
 computed on a higher basis. Further increases in 
 rental may also come. The Government regulations 
 aim at something more nearly approaching an economic 
 rental after 1927, and while serious doubts may be expressed 
 as to the likelihood of such a condition maturing, it may be 
 said that rentals more commensurate with the cost of build- 
 ing will be fixed in future years, although this cannot be 
 predicted with any certainty. Again, the increasing valua- 
 tion of property will, as already mentioned, tend to the 
 reduction of the deficit. But if the present system of rating 
 is continued, a heavy and increasing liability will attach to 
 house property, which may in turn have its effect in deter- 
 mining rental. It is well a.nd prudent, however, that such 
 increases of rental should come gradually. By such means 
 the public will gradually realise that fair and reasonable 
 house rents should be paid. The cry for cheap rents is 
 
20 
 
 often a fallacious cry. It is not in the interests of the 
 working classes that they should not pay a fair and proper 
 rental for their houses. If the State or some one else 
 subsidises house rents the workers' claims in the matter of 
 wages (which should in normal circumstances suffice for 
 meeting the needs of life) are at once prejudiced. 
 
 The liability of the local authorities, of course, will never 
 be reduced throughout the whole period of borrowing of their 
 State-aided scheme, although the amount of their contribu- 
 tions will vary according to their assessable valuation. 
 
 One might mention in passing here that an excellent 
 opportunity will be afl'orded in the new order of things for the 
 introduction of a simplified system of transfer of houses.* 
 Such a scheme operated on reasonable financial conditions 
 and under suitable safeguards would be of inestimable worth. 
 The purchase of the houses by the tenants would add to the 
 stability of the country. It would enable a substantial 
 reduction to be made in the national and local indebtedness, 
 thereby reducing taxation, and generally would be a brake 
 upon the more dangerous elements that might emerge under 
 the immense Government-local authority house-owning 
 scheme with which we are now confronted. 
 
 The Increase of Rents Acts have been adversely criticised, 
 but it may be said that the regulation and control of house 
 rentals in some form was in the circumstances an absolute 
 necessity. The alarming shortage of dwellings throughout 
 the country rendered the situation one of extreme danger, 
 and, while one is disposed to think that the provisions of the 
 earlier measure were to some extent inequitable, a much- 
 improved and fairer method has now been recognised, 
 namely, to permit certain specified increases of rentals 
 consistent presumably with present-day conditions (as far 
 as that is possible) and under suitable safeguards as regards 
 habitability of the dwellings and otherwise. Control and 
 regulation of rentals will require to be exercised for a number 
 of years, but a variation of rentals should be provided for 
 according to changing circumstances and conditions. To 
 this one feels sure no serious objection can be urged. 
 
 * See Supplementary Note. 
 
21 
 
 Let us look more closely at these broad facts and con- 
 siderations and see what they lead to 
 
 1. Confining our attention to Scotland alone, we find that 
 236,000 new houses are advised as being required. The law 
 requires that local authorities must provide adequate housing 
 accommodation for the needs of their area. Houses are cost- 
 ing 1000 each, and an economic return would not be less 
 than, say, 90. A larger rental than 25-30 can hardly 
 be expected, and accordingly the private builder as a house 
 provider that is, providing houses for the purpose of letting 
 cannot be considered as a factor in the solution of the 
 matter. There may always, of course, be a limited number 
 of small houses provided by the private builder for sale. 
 If present economic conditions continue, or approximately 
 continue, for the next twenty years, no other agency there- 
 fore than the local authority, assisted by the State, can pro- 
 vide the houses. If conditions were to moderate so that 
 houses could be built and a commercial return obtained, 
 private enterprise would no doubt resume. We were told 
 that one of the most potent causes for private enterprise 
 going out of house building was the legislation enacted in 
 1909-10. The increment duty under the land values clauses 
 of the Finance Act of that year requiring payment to the 
 State of 20 per cent, on any profit on the sale of a house, 
 coupled with the judicial decisions (the Lumsden judgment), 
 was said to have given the death-blow to the building of 
 houses by the speculative builder. The land values provisions 
 of 1909 have been repealed in the current year's Finance 
 Act, and to that extent the situation, from the private 
 builder's point of view, is consequently improved. But one 
 fears that this alteration will not of itself induce the specula- 
 tive builder to look favourably on a resumption of his calling. 
 There were other causes which contributed to the elimination 
 of the speculative builder such as over building (which showed 
 itself a few years before the war in the number of empty 
 houses) and the difficulty of getting financial assistance from 
 sources formerly relied on to finance builders in view of the 
 large number of houses that were unlet; and, in any case, 
 the wholesale interposition of the local authority as a house 
 
22 
 
 provider and the restraining influence which must in conse- 
 quence be experienced, will, of itself, deter any serious 
 return to the building industry by the speculative builder. 
 It is dangerous to attempt prophecy as regards the economic 
 affairs of our country, and one can hardly contemplate, even 
 with every desire to be optimistic, that there will be such a 
 fall in the prices of materials and in labour within the next 
 "decade or two to place the building of houses upon a com- 
 mercial self-supporting basis. The figures already stated 
 showing the return that would be required at once rule out 
 the possibility of rentals in the realm of 80 or 90 being 
 obtained. Wages would require to be raised enormously 
 to permit of such rentals being paid, and this clearly is not 
 a feasible proposition. 
 
 2. The next consideration is this Assume that the State 
 and the local authorities provide 236,000 houses in Scotland 
 (and this represents provision for about a million and a 
 quarter people), what will be the effect on, or relationship 
 of, such ownership to the working-class houses owned by 
 private persons. In justice to all interests, the rentals 
 of privately owned houses and State-aided houses 
 must approximate. It it were not so, an impossible 
 situation would be created. Local authorities, un- 
 controlled in their dealings could, if they desired, as owners 
 of such a large number of houses and the authorised providers 
 of any additional houses that might be required, ruin private 
 interests in housing. They could fix such low rents as would 
 make the holding of property worthless. But the safe- 
 guard has been introduced that in respect of the State con- 
 tribution towards the loss on local authority schemes, all 
 schemes must be approved by the State, and all rentals must 
 also be approved by them, or, at all events, fixed by an in- 
 dependent tribunal. This condition, of course, will only 
 last so long as the State contribution continues, and, as 
 already mentioned, the State evidently contemplates a limited 
 building period over which their direct interest and assistance 
 should extend. Certain rules have been laid down by the 
 .State which are to apply in the determination of rents for 
 
23 
 
 schemes that are State-aided, and, as these are of great 
 interest and importance, they may be stated 
 
 ******** 
 
 (1) The local authority, in first fixing the rents under an 
 assisted scheme, shall have regard to 
 
 (a) The rents obtained in the locality for houses for the 
 working classes; 
 
 (&) Any increase of ront in the houses for the working 
 classes, authorised under the Increase of Rent 
 and Mortgage Interest (War Restrictions) Act, 
 1915, and any Acts amending or extending that 
 Act: 
 
 (c) Any superiority in tiie condition or amenity of the 
 
 houses to be let by them under the assisted 
 scheme, or in the accommodation provided 
 therein; and 
 
 (d) The classes of tenant in the district for whom the 
 
 houses are provided. 
 
 (2) The rent to be charged after the 15th day of May, 
 1927, shall, if reasonably possible, having regard to the con- 
 ditions then prevailing and to the classes of tenant in the 
 district for whom the houses were provided, be sufficient to 
 cover (in addition to the expenses of maintenance and manage- 
 ment of the houses and a suitable allowance for depreciation) 
 the interest which would have been payable on the capital 
 cost of building the houses if they had been built after that 
 date. 
 
 (3) If it is not found possible after the 15th day of May, 
 1927, to obtain the rent prescribed by rule 2, the rent shall 
 be the best rent which can reasonably be obtained from the 
 classes of tenant in the district for whom the houses were 
 provided, regard being had to any superiority of such houses 
 in accommodation, construction, or amenities, as compared 
 with houses previously built in the district. 
 
 ******** 
 
 3. It will therefore be apparent that in respect of the 
 Government control of State-aided houses, if that control is 
 properly exercised, privately owned houses may quite well 
 
24 
 
 exist alongside the State-aided houses. The question arises, 
 however, as to whether State approval of rents of all local 
 authority houses should be required whether the houses are 
 aided from Imperial funds or not. If privately owned houses 
 are to exist alongside local authority houses, it would almost 
 seem to be necessary that a neutral controlling agency as 
 regards rentals should be introduced. If local authorities 
 were left a free hand to fix rentals, inequalities would be 
 rampant : one local authority might fix higher rentals than 
 another, and the greatest possible confusion and injustice 
 would ensue. 
 
 4. In the circumstances and under the conditions existing 
 in the country, it would hardly be possible pending the 
 provision of a sufficient number of houses for the Govern- 
 ment to relax a measure of control as regards the rentals 
 of privately owned houses. But such control, in justice to 
 the owners of the houses and as a criterion or standard for 
 the State-aided houses, should have regard to periodical 
 review and revision according to the changing circumstances 
 and conditions of the country. Under such a scheme of 
 working a fair balance might quite well be maintained as 
 between privately owned houses and State-aided houses. 
 
 5. The alternative to what has been mentioned would be 
 for the State to acquire all privately owned houses for the 
 working classes, and place the local authorities- in full posses- 
 sion and control of the Hying conditions of the people. The 
 advantages that might be claimed from such an arrange- 
 ment would probably include these 
 
 The public health interests would be thoroughly 
 secured : litigation with offending or neglectful 
 house owners would disappear : the allocation of 
 houses more suitable to the requirements of 
 tenants would be possible : under such a 
 monopoly an economical system of supervision 
 and control might be introduced : an opportunity 
 would be afforded of fixing rentals throughout 
 the country as a whole upon a more equitable 
 or appropriate basis : in other words, excessive 
 profits would be ruled out. 
 
25 
 
 What would be the disadvantages? Such an 
 arrangement would be a form of nationalisa- 
 tion and bureaucracy to the introduction of 
 which many are opposed on the broad 
 grounds that it strikes at the fundamental 
 economic principles which have hitherto been con- 
 sidered as making for success in our country. 
 If the principle were introduced 'as regards 
 houses, why should it stop there : why should it 
 not be extended to the feeding of the people, 
 which is probably as important a matter as the 
 housing of the people? It would enable the State 
 and the local authorities at any time to reduce 
 rentals and place large deficits on the Imperial 
 and local resources; in other words, to subsidise 
 house rents and also to subsidise particular classes 
 or individuals. But, apart from these considera- 
 tions, the cost of acquiring private houses would 
 be enormous. It would involve the acquisition 
 of all classes of houses, including inferior dwell- 
 ings, and the mere threat would probably stop all 
 enterprise. Again, heritable property contributes 
 an enormous sum by way of property tax, not to 
 speak of local rates. The burden would, it is 
 feared, be too onerous in every sense to contem- 
 plate as a practical proposal. 
 
 Having regard to all that has been said, does the situation 
 not lead us to consider whether the safer course to contem- 
 plate in this- matter is to leave the privately owned working- 
 class houses in the hands of the private owners and let 
 matters operate in this way : 
 
 (a) The local authorities to provide houses for their 
 areas at any time these may be required, and, 
 where no other agency is prepared to provide 
 them. This is obviously right and proper in the 
 general interest of the public health of the 
 country. 
 
 (6) The State to periodically review and revise rentals 
 of privately owned houses until the emergency 
 
26 
 
 period has passed; in other words, until the 
 present acute shortage has been fairly overcome. 
 The State interest and control can in this way 
 be used as an excellent restraining force to 
 the inflation of house rents, and, although it 
 may be urged that the law of supply and demand 
 should operate, there are probably special circum- 
 stances which mark out the housing of the people 
 from the ordinary run of commercial principles. 
 The control of rentals of privately owned houses 
 is certainly not free from objection in respect 
 that it has a bad effect in the matter of heritable 
 securities. It will tend to prevent owners securing 
 loans over their properties. Under the recent 
 restrictions holders of thes-e securities have already 
 suffered loss where it was necessary to realise 
 them. The amount of trust and other funds lent 
 on heritable security is very large indeed, and 
 the effect of such restrictions in the matter of 
 rental would no doubt be harmful. But so long 
 as there is such an alarming shortage of houses 
 the danger of no control is equally, or even more 
 serious, and it is very much a matter of deter- 
 mining which method is the least objectionable. 
 (c) The State to control and approve the schemes pro- 
 posed by local authorities, and the rentals to be 
 exacted for all local authority houses. If cir- 
 cumstances warrant it and rentals of privately 
 owned houses go up, the rentals of State-aided 
 houses will follow, and the State liability where 
 that has been incurred will be reduced. In this 
 connection, provision should be made for the 
 more frequent revision of the estimates of local 
 authorities under the Government financial regu- 
 lations. These are to be prepared every ten 
 years, but house rentals and other items con- 
 nected with the upkeep of houses should be re- 
 vised every three or five years. The interest 
 rate on loans may also vary considerably in the 
 
27 
 
 future. Accordingly, if such favourable condi- 
 tions should arise that the State liability is sub- 
 stantially reduced in the future, consideration 
 should equally be given to the reduction of the 
 local liability and tnus hasten the end of subsi- 
 dies for houses. The probable deficit, however, 
 between outgoings and rental each year is so 
 enormous that there is little likelihood of the 
 difference being so materially bridged during the 
 period of loans on the schemes that this aspect 
 of the case need be unduly pressed. A con- 
 sideration that must not be overlooked is that 
 the erection of a huge number of new houses will 
 mean a very large additional revenue both to the 
 State and to local authorities by way of taxa- 
 tion. 
 
 Another feature of the relationship of local authority 
 houses to private houses as regards the future (i.e., after 
 the State-aided period has passed) should perhaps be men- 
 tioned. If the rentals of privately owned houses were to 
 go up in the future, and the rentals of local authority houses 
 followed, the latter might be making a profit. But local 
 authorities are not permitted to earn profits in any of their 
 undertakings. The profits would naturally go to the im- 
 provement of the houses or the lowering of the rentals, and 
 anomalies would probably arise in consequence as between 
 tho two sets of houses. There is probably no ground for 
 apprehension so far as the subsidised period is concerned. 
 It is after that period has passed, and the field is open to 
 all, that the difficulty might arise. But, again, the rents 
 of . privately owned houses could only go up if either the 
 economic conditions demanded an increase or there was a 
 shortage of dwellings, and, as already mentioned, the local 
 authority can always control the situation in the latter 
 respect. 
 
 One other feature of the State-aided housing schemes 
 might be referred to. In order to assist in the raising of 
 the necessary money for financing the schemes, the whole 
 rates of the local area, including all the property and assets 
 
28 
 
 of the local authority, are pledged in security. Formerly 
 the security was limited to the public health assessments of 
 the area. As a consequence of this change the security 
 as regards money loaned for purposes other than housing is 
 decidedly weakened. 
 
 In surveying the situation, it will be appreciated that the 
 housing of the people of this country is now in a totally 
 different position from what it has ever been. The State 
 interest and the interest of local authorities which was never 
 too definite and specific is now emphatic and direct. Local 
 authorities must ensure that there is adequate and suitable 
 housing provision in their area ; if they fail to act, the State 
 may act in their place and charge the cost to the local 
 authority. In this way the housing of the working classes 
 for the future is in great measure taken out of the ordinary 
 commercial laws and principles. There is, in short, a con- 
 trolling factor for the future in the matter of the rentals 
 that may be charged for dwelling-houses. The introduc- 
 tion of this compulsitor upon local authorities to see to the 
 adequate provision of houses for the working classes in their 
 districts at all time raises tremendous possibilities, and the 
 carrying through by them of such a programme of house- 
 building a.s was outlined by the Housing Commission will 
 mean that a factor of enormous importance will be available 
 which might, if uncontrolled, raise issue of the most serious 
 import. The situation, however, may be fairly safe- 
 guarded by a prudent exercise of the powers of the new 
 Act, coupled with the controlling conditions hereinbefore 
 indicated. If some such conditions are provided, we need 
 not, I think, be unduly concerned that any economic prin- 
 ciple is being seriously invaded. Rather, we should con- 
 sider the temporary subsidising of house property as a 
 provision that had to be devised in order to meet an alto- 
 gether exceptional state of affairs. Looked at critically, the 
 essential interest and concern of the State and the local 
 authority is not to build houses but to ensure that there is 
 at all times a, sufficiency of houses. In the interests of the 
 health of the people there will always be hereafter a duty 
 placed upon the local health authority to see to it that there 
 
29 
 
 is adequate and suitable dwelling accommodation in every 
 district. That is as it should be. Coupled with the other 
 extensive powers which are now in the hands of looal 
 authorities to secure improved sanitation, amenity, lav-out, 
 and good environment, the new legislation may go for if 
 properly exercised in securing an improved standard of living 
 conditions conducing to better health and greater happiness 
 among the people of our country. If these desirable 
 things are brought about, even the enormous cost with 
 which the country is faced may prove to have been money 
 well spent. 
 
 It has always to be kept in view that the tendency of the 
 present economic changes is this, that in improving the 
 living conditions of the working classes as ordinarily under- 
 stood, the condition of the non-manual workers wage- 
 earners in shops, warehouses, offices, &c. is adversely 
 affected. The latter class are ill able to bear the increased 
 cost of living, as their earnings have not increased, rela- 
 tively speaking, in the same way as the tradesman's wages. 
 In other words, the levelling-up process is accompanied by 
 a lowering of the status of the other class at all events, so 
 far as their living conditions are concerned. Accordingly, 
 it is difficult to see how local authorities can avoid allocat- 
 ing a certain proportion of the subsidised houses to that 
 class, that is to say, if they are to get houses at all. There 
 is little chance of those people getting houses otherwise, as 
 private enterprise will only provid-e houses for those who 
 can afford to buy them. The inevitable result will be that 
 class distinctions as a basis for founding a claim to a sub- 
 sidised house will pass away and the determining factor 
 will be income. The only justification of a right to occupy 
 a house let at an uneconomic rent should be founded on in- 
 ability to pay a higher rent regardless of the fact whether a 
 man earns his livelihood with a pick or a pen. In calcu- 
 lating income, consideration should be given to the total 
 income coming into a house, whether earned by a man or 
 members of his family residing with him. It is 
 well known that many a highly paid tradesman has sons 
 and daughters living in family with him, all earning 
 good wages, the cumulo amount of which consider- 
 
30 
 
 ably exceeds the income ta.x limit, and yet they pay no 
 income tax, and are quite able to pay a house rent in excess of 
 what is charged for the subsidised house. Are such people to 
 receive preferential treatment over a, man possibly in the same 
 trade but with a young family who are not able to contribute 
 towards the common support? Or, on the other hand, 
 should a married man with a young family who is engaged 
 in a clerical occupation be penalised simply because he is 
 not a working man as that term is. popularly understood? 
 The Scottish Board of Health have so far appreciated the 
 situation that they have agreed that a liberal interpretation 
 should be given to the term " working classes/' and local 
 authorities can now exercise a great measure of discretion 
 in the matter of the letting of their houses. 
 
 If there is differentiation in the treatment of people there 
 is more likelihood of discontent than if there is equality 
 of treatment, and it seems to me that the best way to meet 
 the cry for State control of all house property is to make no 
 distinctions as between classes in the matter of the letting of 
 the new houses. 
 
 Let me mention one other thought : if State subsidised 
 houses can be occupied by the salaried section of the middle 
 classes as well as the working classes, a combination of in- 
 terest will result. This may make for good or ill. Their 
 interests will be common as regards getting the houses as 
 cheaply as possible, and in this way the force in that direction 
 will be the more formidable. On the other hand, the leaven- 
 ing of one class by the introduction of the other may have a 
 modulating and tempering effect. Who can say? This, 
 however, we may say, The immense house building scheme 
 which has now been entered upon at the instance of local 
 authorities carries with it many factors and possibilities 
 other than the direct project of providing habitations for 
 the people, and it behoves that a very careful watch should 
 be exercised on the trend and movement which may result 
 from such a radical change in the social, economic, and living 
 condition of hundreds of thousands of the people of this 
 country. No one can foresee the effects. 
 

 SUPPLEMENTARY NOTE. 
 
 THE PURCHASE OF STATE-AIDED HOUSES BY TENANTS. 
 
 SINCE the foregoing paper was prepared an important step 
 has been taken by the Legislature in the matter of facilities 
 being afforded to tenants to purchase their houses. 
 
 It was suggested (at page 20 of the paper) that it would be 
 very desirable that a simple system of transfer of the houses 
 to tenants should be introduced which would not only make 
 for stability in the country, but would ease the monetary 
 indebtedness of the State. In the Housing (Scotland) Act, 
 1920, which has just been passed into law, the following 
 provisions occur : 
 
 ' ' The power conferred on local authorities by paragraph 
 (d) of sub-section (1) of section 14 of the Housing, 
 Town Planning, &c. (Scotland), Act, 1919, of 
 selling houses shall include power with consent 
 of the Board upon any such sale to agree to the 
 price being paid by instalments or to payment 
 of part of the price being secured by bond and 
 disposition in security or otherwise upon the sub- 
 jects sold." 
 
 The two main considerations involved are 
 
 (1) The question of the price to be paid for the houses, 
 
 and 
 
 (2) The method by which the proposal that the tenant 
 
 should acquire his house is to be earned out. 
 
 As regards the price to be paid for the house, this, of 
 course, would vary according to the accommodation and also 
 according to the market and other conditions prevailing 
 at the date of the acquisition. It could not presumably be 
 
32 
 
 expected, however, that under present conditions the local 
 authority would be able to sell the house at or near the cost 
 of its erection. It is suggested that a fair basis upon which 
 the price might be fixed would be to allow at least as a 
 deduction in the first instance an amount equivalent to 
 the Government subsidy which would have been payable 
 under the provisions of the Housing (Additional Powers) Act, 
 1919, had the house been erected by a private builder, 
 and to make certain further concessions as hereinafter men- 
 tioned. This arrangement might apply for a period of, say, 
 five years after the houses are erected. 
 
 As regards the manner in which a sale to the tenant 
 would be carried out, the section above referred to provides 
 for two methods, both of which have certain advantages. 
 These are 
 
 (a) A sale -subject to an arrangement that the price 
 is to be paid by instalments ; and 
 
 (6) A sale subject to a bond and disposition in security 
 or other security being granted in favour of the 
 local authority for part of the price. 
 
 Under an arrangement for a sale upon the instalment 
 principle, the following considerations emerge : 
 
 (a) The instalments to be paid would require under 
 ordinary circumstances to be moderate, and so fixed that the 
 acquiring tenant would, without difficulty, be able to meet the 
 payments as they fell due. In fixing the amount of the in- 
 stalments, regard, of course, should be had to the fact that 
 the houses were provided for the working classes. It is 
 perhaps here that the main difficulty will arise. Assume that 
 a house costs 1000; deduct therefrom a subsidy of, say, 
 250, leaving 750 to be met as a probable purchase price. 
 The repayment of this sum by an equal annual instalment of 
 principal and interest at 5 per cent, over a period of thirty 
 years (and there would be difficulty in suggesting a longer 
 period) would mean 48 15s. 9d. per annum. It would 
 only be a very limited number of the working classes who 
 could undertake such an obligation, and it is for considera- 
 tion, therefore, if within a limited period of, say, five years 
 
33 
 
 the Government should not, in view of the great advantages 
 which will accrue to the State by the disposal of a number 
 of the houses, agree to write off a further portion of the 
 capital cost. Having regard to what the State obligations 
 would be if the houses remained the property of the local 
 authority it is estimated there will be an annual deficit per 
 house of from 40 to 60 over a period of sixty years the 
 Government could, it is suggested, readily agree to make such 
 a concession. 
 
 The title to the subjects would remain in the name 
 of the local authority until the price had been fully paid, 
 or, alternatively, until such a substantial part had been paid 
 as to warrant parties entering into an arrangement for a 
 transfer of the property to the acquiring tenant, subject to a 
 bond and disposition in security in favour of the local 
 authority. The local authority would, of course, require 
 either to grant an acknowledgment to the acquiring tenant 
 that the house had been sold to him subject to payment of the 
 instalments agreed upon and performance of other reason- 
 able conditions, or an agreement might be entered into by 
 both parties setting forth the arrangement. Very little 
 expense would be involved in such a transaction, and it could 
 readily be provided that if the acquiring tenant, for business 
 or other reasons, was compelled to leave the district and 
 to give up his house, he could transfer his rights under the 
 arrangement to a third party by a simple form of assignation 
 Avith the approval of the local authority, which approval 
 would, of course, not be unreasonably withheld. The instal- 
 ments paid by the acquiring tenant might be endorsed upon 
 the acknowledgment or agreement, and equally the assigna- 
 tion might similarly be so endorsed. As regards the con- 
 ditions which would apply to such an arrangement, the 
 statutory conditions applicable to advances by local authori- 
 ties under the Small Dwellings Acquisition Act, 1899, might, 
 with such modifications as were considered necessary, be 
 adopted. These are 
 
 (a) Every sum for the time being due in respect of 
 
34: 
 
 principal or of interest of the advance shall be 
 punctually paid; 
 
 (&) The proprietor of the house shall reside in the 
 house ; 
 
 (c) The house shall be kept insured against fire to the 
 
 satisfaction of the local authority, and the receipts 
 for the premiums produced when required by 
 them; 
 
 (d) The house shall be kept in good sanitary condition 
 
 and good repair ; 
 
 (e) The house shall not be used for the sale of intoxicat- 
 
 ing liquors, or in such a manner as to be a 
 nuisance to adjacent houses ; 
 
 (/) The local authority shall have power to enter the 
 house by any person, authorised by them in 
 writing for the purpose, a.t all reasonable times 
 for the purpose of ascertaining whether the statu- 
 tory conditions are complied with. 
 
 The acknowledgment or agreement would also, of course, 
 provide for the local authority entering into possession of 
 the house if any of the conditions imposed on the tenant 
 were not reasonably complied with. The provisions of the 
 Small Dwellings Acquisition Act as regards the preparation 
 of titles, &c., by the local authority might also be suitably 
 applied to the scheme. 
 
 (b) Under the arrangement whereby the property would be 
 transferred to the acquiring tenant subject to a bond being 
 granted in favour of the local authority for part of the price 
 the same considerations would apply as" regards the fixing of 
 the price. It would appear that there would be no difficulty 
 in applying the provisions of the Small Dwellings Acquisition 
 Acts to such an arrangement. Under these Acts, as amended 
 by the Housing, Town Planning, &c. (Scotland), Act, 1919, 
 the local authority is entitled to advance money to a resident 
 within their area for the purpose of enabling him to acquire 
 the ownership of his house, provided that the advance does 
 not exceed 85 per cent, of the value of the house, and the 
 total value of the house does not exceed ,800. The provi- 
 
sions of the Small Dwellings Acts were framed with the view 
 of providing an inexpensive and simple method by which such 
 advances might be secured and dealt with. The same statu- 
 tory conditions before referred to would, subject to any 
 suitable amendments, apply to a sale subject to a bond and 
 disposition in security as to the instalment arrangement. 
 The local authority would, of course, have power to enter into 
 possession if the conditions were not observed by the acquiring 
 tenant. 
 
 Having in view the powers now granted to local authorities 
 in the matter, there does not appear to be any serious 
 obstacle to tenants generally entering into arrangements with 
 the local authority for the acquisition of their houses, and it 
 would be readily possible to devise such simple methods of 
 transfer, &c. , as would obviate difficulties and tend to create 
 confidence on the part of the tenants in entering into such 
 arrangements. 
 
THIS BOOK IS DUE ON THE LAST DATE 
 STAMPED BELOW 
 
 AN INITIAL FINE OF 25 CENTS 
 
 WILL BE ASSESSED FOR FAILURE TO RETURN 
 THIS"B*OOK ON THE DATE DUE. THE PENALTY 
 WILL INCREASE TO SO CENTS ON THE FOURTH 
 DAY AND TO $1.OO ON THE SEVENTH DAY 
 OVERDUE. 
 
 SEP 27 1945 
 
 _^v 
 
 LD 21-100m-12, '43 (8796s) 
 
Syracuse, N. V. 
 PAT. JAN. 21. 1908 
 
 449334 
 
 UN1 VERS1TY OF CALIFORNIA UB*