Survey of London: Volume 36, Covent Garden. Originally published by London County Council, London, 1970.
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The Sale of the Estate
The eleventh Duke of Bedford, Herbrand Arthur, who succeeded his brother in 1893 and held the title until 1940, was a countryman, with a passionate feeling for his estates. His active concern in the practical application of scientific methods of farming led to the establishment of research stations in forestry and arboriculture, and in 1908 his work was recognized by his election to a Fellowship of the Royal Society. He was chairman of Bedfordshire County Council from 1895 to 1928, and president of the Zoological Society for an even longer period, for zoology was his greatest personal interest, and he was closely involved in the creation of the zoological park at Whipsnade in Bedfordshire. His long dukedom coincided with the rise of modern democratic society and the eclipse of the ancient landed aristocracy, to the challenge of which the Duke responded by the sale of more than half the family estates.
Before the sales began, however, the eastern end of the Covent Garden estate was greatly improved by the formation of Aldwych and Kingsway by the London County Council, and by the redevelopment of most of the narrow and insanitary courts on the Bedford estate in the vicinity of Drury Lane Theatre. These two improvements proceeded contemporaneously, the Aldwych-Kingsway scheme being first proposed in 1893, (fn. 2) authorized by Parliament in 1899 and largely completed in 1905. (fn. 3) The Duke's principal contribution to the regeneration of the neighbourhood was the formation of a new street from York Street to Drury Lane, an improvement which involved the purchase of land not in the Duke's possession, (fn. 4) and the closure of Russell Court, Vinegar Yard, Marquis Court, Cross Court and Red Lion Court in 1899. The new street was at first called York Street but since 1937 has formed part of Tavistock Street. Most of the ground on the north side of the street was sold by the Duke in 1900 to the London County Council for rehousing purposes—Stirling and Siddons Buildings now occupy this site—while the ground on the south side was let by the Duke for the erection of the Strand Theatre, the Waldorf Hotel and the Aldwych Theatre. On their south side these three buildings enjoyed valuable frontages to the Aldwych, which here occupied the site of White Hart Street and Eagle Court, both now entirely swept away. (fn. 5)
To the north of Drury Lane Theatre and Russell Street, Duke's Court and part of Martlett Court were closed in 1899, the latter being subsequently re-aligned and extended east to Drury Lane. Cross Court was extended south to Crown Court, and renamed as part of Crown Court. Here too the Duke had to purchase certain properties to achieve this improvement, and in 1900 he sold land to the London County Council for rehousing purposes; Sheridan, Beaumont and Fletcher Buildings now stand upon this site. (fn. 6)
Elsewhere on the estate between 1890 and 1914 rebuilding continued as existing leases expired, (fn. 7) and the area devoted to the market was also enlarged. All these improvements very greatly increased the value of the estate. In 1890 the revenue of Covent Garden estate and market had been nearly £53,760, consisting of £30,855 in rents from the estate and £22,905 in net receipts from the market. (fn. 8) By 1912 the combined revenue had risen to £103,807, of which £59,043 were rents and £44,764 net receipts from the market. Thus within twenty-two years the revenue from the estate and the market had almost doubled, and when a property company submitted an offer to buy part of the site of Russell Court the Duke's London steward, A. R. O. Stutfield, advised strongly against acceptance. 'I am fully persuaded', he wrote, 'that the wisest policy is (as far as possible) to avoid selling any part of the Covent Garden Estate, which I regard as the choicest and most valuable portion of all His Grace's property. I would even go further and urge that when opportunity offers, this part of the Estate should be added to, especially on the South side. During the time that I have been engaged in business in London (now over 30 years) I have witnessed a rise in the value of property in Central London, especially near the Strand, that is little short of miraculous. Even during the time that I have been at Bedford Office [since 1889] there has been an appreciation of considerable amount in the Covent Garden Estate, and I do not see any reason why the rise in value should not be continued.' (fn. 9)
This was written in 1897, when the upward surge in the value of the estate was in full flood, yet within little more than a decade the Duke was negotiating for the sale of the entire Covent Garden property, including the market, and was also in process of selling half of his enormous agricultural estates. (fn. 10) He was in fact inaugurating a complete reversal of the policy pursued by the generations of his ancestors who had steadily enlarged the family's landed property, both rural and urban, throughout the previous four centuries.
During the quarter-century before 1914 financial and political factors were indeed undermining the traditional power of many landed aristocrats, and the retreat conducted by the Duke of Bedford was far from unique. The prolonged agricultural depression which had commenced in the 1870's had greatly reduced the incomes of many landowners, particularly those dependent primarily on arable estates, but until the partial recovery in the early years of the twentieth century the low price of land had postponed extensive sales. Landlords had therefore been prevented from diversifying their assets by investment in company securities, and when the demand for land revived—tenant farmers and the new commercial and industrial nobility of the Edwardian years being the principal purchasers—the incipient withdrawal of the old aristocracy from the land was greatly accelerated by fear of the radical legislation introduced by the Liberal Government. During the five years before the outbreak of war in 1914 estates extending over some 800,000 acres were said to have been dispersed. (fn. 11)
In 1913 The Times described the Duke of Bedford as 'one of the pioneers in the process known as the "breaking up of estates"'. (fn. 12) As early as 1897 he had published a defence of the administration of his estates at Thorney and in Bedfordshire and Buckinghamshire, in which he had pointed out that between 1815 and 1895 he and his predecessors had spent nearly £4,250,000 on farm buildings, cottages, fences, drainage, water-supply and roads. (fn. 13) In 1895 these estates had shown a substantial deficit, yet under the death duty clauses of Sir William Harcourt's Finance Act of 1894 his successor would have to pay duties of £65,000 on the Thorney and Bedfordshire estates alone, exclusive of his property elsewhere. (fn. 14) It was probably the need to tackle this predicament which prompted the Duke in 1898 to appoint an outstandingly able man as his agentin-chief—Rowland Prothero, later Lord Ernle and President of the Board of Agriculture from 1916 to 1919. Many years later Lord Ernle, too, defended the record of the Dukes of Bedford as agricultural landlords, and stated that during the worst years of the agricultural depression, from 1879 to 1898, they had remitted £278,000 of rent to tenants and had distributed over £152,000 in voluntary payments to churches and schools, or in pensions and charitable donations. (fn. 15)
The Duke's position was, in fact, becoming untenable and Lord Ernle summarized it as follows: 'Public opinion was setting strongly against the accumulation of large landed properties in the hands of individuals. The ownership of land had lost its political importance; financial legislation had already made its tenure more unprofitable; further legislation in similar directions was threatened. The proverbial danger of carrying all the eggs in one basket was now increased by the possibility that the bottom of the basket might fall out. Experience of a quarter of a century of adversity had shown the precarious nature of an income derived entirely or mainly from an agricultural estate. Meanwhile, the gradual return of prosperity was restoring the selling value of land, and the opportunity of transfer to other investments was favourable.' (fn. 16)
In 1909 the Duke of Bedford sold the Thorney estate to his tenants. (fn. 17) In Bedfordshire and Devonshire the policy was adopted of concentrating the estates around the Duke's houses at Woburn and Endsleigh, and of selling the outlying portions, wherever possible to the tenants. In Dorset too there were sales, but the Duke retained what was thought to be the original family home. (fn. 18)
Thus when Lloyd George introduced his famous budget on 30 April 1909 the sale of large parts of the agricultural estates was already under way, but no decision had yet been taken about Covent Garden. In the apologia which he had published in 1897 the Duke had confined himself to the defence of his country properties and had not mentioned his London estates at all, perhaps because the very large revenues from the latter were being used in effect to offset his losses on the agricultural properties. In the menacing political climate which prevailed during the great constitutional crisis of 1909–11, when the peerage as a whole was under fierce attack, defence of any great landed property was, indeed, becoming increasingly difficult. At an election meeting held in 1911 at Dunstable, not far from Woburn itself, the Duke was accused of possessing 'vast slums' in London, 'where tenants live under conditions of misery and of squalor'. He responded in a dignified letter of rebuttal to The Times, but, as he clearly realized, such attacks 'made on landowners by Radical orators and journalists, for their own political purposes, without inquiry or regard for facts' were an ominous portent for the future. (fn. 19) The Duke's principal adviser at the Bedford Estate Office confessed to 'profound misgivings as to the future of real property, especially in towns, and a market is, perhaps, the most dangerous possession of all'. (fn. 20) In 1913 the Duke finally decided to sell the whole of his Covent Garden estate.
The land duties were the most controversial part of Lloyd George's budget, which was finally enacted in 1910. There were three separate taxes: firstly, the increment duty, which would 'tax the increment in land, excluding everything arising from the outlay of energy or money by the owner or past owners'; secondly, there was to be a tax on undeveloped land, which scarcely affected the Bedford estates in London, and thirdly there was to be a reversion duty which was to be payable on any enhanced value which came to a lessor at the end of a lease. What, it was claimed, 'could be fairer than to tax the pure rise in the value of land, unattributable to anything but the growth and pressure of the population and in no way representing a tax upon the owner's business capacities, or expenditure in improving the land?' (fn. 21)
The effect of the duties proved, however, to be quite different from either the intentions of the Government or the forebodings of the Duke. Government valuers were at once appointed to compile assessments of property all over the country, while the Duke engaged an expert to negotiate the 1,700 separate valuations which would be required for his London estates. In 1912–13 the official valuers turned their attention to Covent Garden market, but by this time the administration of the immensely complicated provisions of the Act had encountered widespread legal difficulties. The valuation figures which were eventually agreed upon were made available to the intending purchasers of the estate, and it is probable that they actually enhanced rather than diminished the price which the Duke finally received at the sale. By 1917 the Bedford estate had not had to pay a penny in increment duty, and the Duke's own valuation expert could state that there was 'strong prima facie evidence' that the sums obtained by sale had in many cases been 'materially increased' by the valuations previously made by the Government's agents. (fn. 22) Lloyd George had certainly not intended that his land value duties should produce results of this kind, and in 1920 the Government of which he was Prime Minister abolished them. In announcing this decision the Chancellor of the Exchequer (Austen Chamberlain) stated that the duties 'in their present form are unworkable. They have produced hardly any revenue', and they could 'only be revived, if at all, by proposing legislation of a highly technical character'. (fn. 23) Despite this formidable difficulty the taxation of enhanced land values by some means or other has continued to challenge the ingenuity of several more recent reforming administrations.
None of these unexpected events were apparent or foreseeable in the autumn of 1913, when the Duke's advisers, after making discreet private enquiries, received an offer of £2,000,000 for the purchase of the whole of the Covent Garden estate and the market. The prospective purchaser was Mr. (later Sir) Harry MallabyDeeley, Unionist M.P. for Harrow and 'a well known land speculator' who had already been involved in the purchase of the Piccadilly Hotel and St. James's Court, Buckingham Gate. His offer was based, in round figures, on sixteen years' purchase of the net product of the market tolls and on twenty-two years' purchase of the net rental of the surrounding property. One third of the purchase price was to be paid in four instalments by 25 March 1917, and the other two thirds were to remain on mortgage to the Duke for up to twelve years at interest of 4½ per cent. These terms would diminish the Duke's own income by £10,000 per annum, but the market was 'a dangerous property' for him to hold, and his advisers were therefore unanimous in recommending acceptance. They warned him, however, that 'he must be prepared to hear that the purchasers have some scheme, through a Company or otherwise, for dealing with the property which will leave them with a very considerable profit'. On 24 November 1913 the Duke and his trustees agreed to these outline terms, and a provisional agreement was initialled on the following day. (fn. 24)
When the agreement (but not the price) was publicly announced a few days later the news was regarded as the 'most sensational estate transaction on record', (fn. 25) and The Property Market Review could not recall 'any topic which ever more effectually excluded every other in street, tram, train and club, to say nothing of the Press itself, than did the question of how much Mr. Mallaby-Deeley was to pay the Duke of Bedford'. (fn. 26) Publicity of this kind was most distasteful to the Duke, and he was still more upset when he found that owing to a misunderstanding his private boxes at Drury Lane and Covent Garden Theatres had not been excluded from the sale agreement of 25 November. Mallaby-Deeley refused the Duke's request to sell them back again, and soon other difficulties arose. In May 1914 he instituted legal proceedings against the Duke for nonperformance of the agreement. (fn. 27)
By this time, however, Mallaby-Deeley was receiving offers for the resale of the property at 'considerably enhanced prices'. (fn. 28) In June 1914 he agreed to sell his option to purchase for £250,000 (fn. 29) to Sir Joseph Beecham, and on 6 July the latter signed an agreement with the Duke of Bedford to purchase the whole estate. (fn. 30)
Sir Joseph Beecham, baronet, manufacturer and philanthropist, was the immensely wealthy owner of the famous pill-making business of St. Helens, Lancashire, and was perhaps equally well known as the father of Sir Thomas Beecham, the conductor. In his autobiography, published many years later, Sir Thomas relates that his father had been persuaded to buy the estate by James White, 'generally known as Jimmy White, one of that group of financial wizards who appeared and vanished like comets in the sky of the business world during the period 1910–1930'. In association with Alexander L. Ormrod, a member of a well-known firm of Manchester stockbrokers, it was then intended 'to float a public company to deal with the estate as a commercial proposition, when my father would receive back the considerable sum he had paid as deposit money together with a bonus for his services as financier'. (fn. 31)
Under the terms of his agreement of 6 July 1914 with the Duke of Bedford, Sir Joseph Beecham contracted to buy the estate and market for £2,000,000. He paid a deposit of £200,000 and covenanted to pay the balance on 11 November. The boxes at Drury Lane and Covent Garden Theatres were included in the sale, but it was agreed that they should be let to the Duke. Two properties were excluded—No. 26 James Street, which the Duke had only purchased very recently, and St. Paul's Institute in Floral Street, which was omitted by mistake. (fn. 32)
But within a month war broke out and Treasury restrictions on the use of capital prevented the completion of the contract. (fn. 33) The estate and market continued to be managed by the Duke's staff, (fn. 34) but in October 1916 the situation was further complicated by the death of Sir Joseph Beecham. Shortly afterwards a Chancery suit was instituted for the purpose of unravelling his affairs, and eventually it was agreed by all parties, and confirmed by a court order, that a private company (the Covent Garden Estate Company) should be formed, in which Sir Joseph's sons, Sir Thomas and Henry, should be directors, and that they should complete the contract made between their father and the Duke. On 30 July 1918 the Duke and his trustees conveyed the estate, which then consisted of 231 properties, five victuallers' licences, three fee-farm rents and the whole complex of market rights, to the Covent Garden Estate Company, subject to a mortgage of £1,250,000—this being the unpaid balance of the purchase price then still due to the Duke. (fn. 35)
Sir Thomas and Henry Beecham now had to sell enough of the estate to discharge this mortgage. Henry Beecham was, however, mainly concerned in the management of the family business at St. Helens, (fn. 36) while Sir Thomas was immersed in his musical activities. For some months after the end of the war no progress was therefore made, but in the latter part of 1919 a receiving order was issued against Sir Thomas, (fn. 37) who thereupon decided 'to withdraw from public life until the final determination of my complicated business tangle'. (fn. 38) He had never been satisfied that the most was being made of the potentialities of the estate, and under the guidance of Louis Nicholas, a brilliant Liverpool accountant who was the secretary of Covent Garden Estate Company and the Beecham family's financial adviser, he now set about resolving all the many outstanding problems. (fn. 39) For over three years Sir Thomas attended daily at the company's Covent Garden offices and with Nicholas 'completed satisfactorily the labour we had undertaken by selling over a million pounds of property and appreciably increasing the revenue of the balance'. (fn. 40) Some of the sales were by public auction and others by private treaty, and they included such famous properties as Bow Street Magistrates' Court and Police Station and Drury Lane Theatre. (fn. 41) The market itself was retained, and several thousand pounds were spent on the renovation of the Flower Market building. (fn. 42) Sir Thomas later remarked that 'the moment was not inauspicious' for such sales, 'for ground values were rising and the leading marketeers, having all done extremely well in the war, had money to invest'. (fn. 36)
By 1922 enough money had been raised to pay off the outstanding debt to the Duke of Bedford, and on 7 September the mortgage was redeemed. (fn. 43) (fn. 1) In the following spring the Official Receiver's claims against Sir Thomas were also settled, and the flotation of a public company to exploit the unsold remainder of the estate now became possible. (fn. 36) This was done in May 1924, when the Covent Garden property and the pillmaking business at St. Helens were united in one company, Beecham Estates and Pills Limited. The nominal capital was £1,850,000, of which Sir Thomas had a substantial share; he was also a director for a short while. Other directors included Louis Nicholas and Philip Hill, the latter of whom subsequently played an important part in the history of the Royal Opera House. (fn. 45)
In 1928 Beecham Estates and Pills Limited sold its interest in the pill business and changed its name to Covent Garden Properties Company Limited. This new company dealt in real estate and was soon buying property in several other parts of London. (fn. 46) In addition to the market the properties which the Company still retained in Covent Garden in 1936 included the Royal Opera House, Russell and Bedford Chambers, Nos. 9–10 Floral Street, Piazza Chambers, Nos. 1–15 (odd) Mart Street, Nos. 1–9 (consec.), 27, 31 James Street, Nos. 1 and 2 Bow Street, Nos. 8, 9 and 16–21 (consec.) Russell Street, and Nos. 33, 35, 41 and 49 Wellington Street. (fn. 47) All these properties were near the market and were kept to facilitate its future enlargement. (fn. 48)
Covent Garden Properties Company Limited or one of its associated companies (fn. 49) continued to own this property until 1962, when the bulk of it, including the whole of the market, was purchased by the newly established Covent Garden Market Authority for the sum of £3,925,000. The company still owns the freehold of the Royal Opera House.
The eleventh Duke did not entirely sever his family's connexion with Covent Garden after the sale. St. Paul's Institute was sold in 1919, (fn. 50) but the Duke retained his patronage of the living of the parish church until 1938 (fn. 51) and did not relinquish the leases of his boxes at Drury Lane Theatre and the Royal Opera House until March 1940, shortly before his death. (fn. 44) The last remaining property, No. 26 James Street, was sold by the Duke's son, the twelfth Duke, in 1945. (fn. 52) Pensions to the families of market staff who had retired before the sale of the estate continued to be paid for many years and one is still being paid at the present time (1968).