It has also been suggested that the rating of owners in respect of site values would secure a contribution from them towards payment of increased rates, old or new which could not have been foreseen at the time of the making of contracts.

The evidence given upon this point before the Royal Commission on Local Taxation was conflicting.

The late Mr. Costelloe expressed a very strong view that the tenants enter into a "blind bargain," it being impossible for them to take the question of rates into consideration.

Where the "pull of the market" is against the landlord, and where the amount of the rates is practically a settled and well-known charge, he concedes that on the contract for a single tenancy, the amount of the rates must be considered as diminishing the rent which the landlord would be able to get. But the "pull of the market," he said, is, as a rule, against the tenant, and it is impossible to forecast what future rates will be. He expressed the opinion that no ordinary tenant in London when negotiating even for a three years' agreement, can tell, with any approach to correctness, what his aggregate payments in the way of rates are likely to be, owing to the number of Authorities upon whose expenditure the charge depends, the variations in the amounts of their payments from year to year, and their progressive increase, which, he said, not even the expert officials of the Authorities concerned have been able to forecast. In these circumstances Mr. Costelloe's opinion was that the practical effect is that the tenant, so far as he attempts to estimate the rates at all, usually under-estimates even the present charge, and probably fails to allow for the probabilities of increase. He said: "The ultimate result of it is, to my mind, that even the cleverest business man cannot successfully tell to-day what the aggregate burden of his rates on a particular house, or warehouse, or shop, will turn out to be five years hence. I believe that in practice he does not seriously estimate it at all. In any case, I am quite confident that these continual increases of charge, by reason either of increased efficiency and cost of administration, or of specific new services discharged by public Authority, or of great structural improvements, such as streets, embankments, bridges and drains, do, in fact, come out of the pockets of the occupiers, and out of their living, and that they cannot be fairly considered as being borne in any intelligible sense by the receivers of rent."

Costelloe,

19.923-5. 20,035-5. 20,252-60, 20,433-8, and Vol. II. of Min. of Ev,, App.No.XI., pars. 48, 49.

On the other hand, all the witnesses who had professional knowledge of dealings in property, stated, with some confidence, that all existing rates and, to a considerable extent, future ones, are taken into consideration by lessees, including building lessees, and they argued that to impose a rate on site values, ignoring existing contracts, would be equivalent to rating the owners of them twice over. Where rates increase, or new ones are imposed, which are not taken into account by the lessee, it is admitted that such are borne by the lessee during the term of the contract, though he gets the full benefit of the expenditure during the lease. On its termination, however, the increased burdens fall on the landlord, who also then derives any corresponding advantages.

Mr. F. W. Hunt, Agent to Lord Portman's Marylebone Estate, stated that a reduced rent is accepted by the owner in consideration of the tenant contracting to pay the taxes, and in cases where arrangements have been made for the owner to pay the taxes, the proportionate addition has been made to the rent.

In the case of a tenant bargaining for the lease of a house, Mr. Hunt stated that if he names the amount of the future rent, the reply he invariably receives is, "What are the rates and taxes?" Again, in the case of the lease of a building site to a builder he said that a similar inquiry is made. He stated that the builder goes through his figures with him to show the various items of expenditure, and what return he may hope to get from the property when built, and what the rates and taxes are, and how they will affect his return. Shortly, he said, the calculations made are as follows: - "What will be my expenditure, what will be my return, what rent can I hope to get, and what are the rates and taxes forming part of my expenditure?"

F. W. Hunt, 22,527-41, and Vol. IV. of Min. of Ev., App. No. VIII., pars.

3-8;

Wainwright, 21,863. Harper, 22,349-52.

On being pressed as to whether in the case of a long lease, as between the ground landlord and his immediate lessee, the latter can adequately foresee the burdens that will be put upon his interest during the course of the contract, he replied that "the builder in taking the land, I think, usually allows with me that the rates are an increasing commodity." He added that in giving this answer he had in his mind the possibility of the imposition of new rates.

Mr. W. H. Warner, of the firm of Messrs. Lofts and Warner, Estate Agents and Surveyors, London, also stated that occupiers take into consideration the present and prospective burden of rates when agreeing to pay the rent. On being questioned how far they allow for an unforeseen increase of rates, he replied, "That is a risk you cannot help, and you take it. You run the same risk when you go and instruct your broker to buy you railway stock." The same conditions, he stated, apply in the case of the contract between the owner of the site and the building lessee, and to the following question he replied in the affirmative: "I understand you to put to us that in a case like that, the builder takes these things so carefully into calculation that the ground landlord gets less in the place where the rates are at the moment higher, or likely in the builder's opinion to become higher in the near future, than is the case with the ground landlord where the rates are not so high."