Inspections—initiallybyrandomsamplingandlateroftheaffectedpopulationintotal—conductedforatwo-yearperioduptoJune1951revealedotherformsofpensatingpayments:forty-twocasesinwhichlandownerschargeddepositmoneywithnorefund,forty-sevencasesinwhichthelandownershadcollectedrentonfarmhousesoverandabovetheoriginalstipula-tions,and537casesofblack-marketrentpayments.Amorefrequentcauseofrentaldisputes(6,328cases)wasrecordedinanitemcalled"harvestloss,"whichresultedmainlyfromdisagreementbetweenthecontractingpartiesonthe"actual"harvestyield.NearlyallthesecasesweresettledbytheProvincialLandBureau.[8]
TenureRearrangements
Leasecancellationsbylandownersconstitutedthemostseriousproblemconfrontingthereformofficials.InthewordsofChengChen:
Afterthereductionoftherentalpercentage…aminorityoflandowners…threatenedthetenantswithleasecancellation.…Usuallywithcash,goods,orpartofthecultivatedland,thelandownersbribedthetenantstovoluntarilyterminatethelease.Thisbribemoneyisknownasthe"feeforleaseright."Thetenants,infearoftheowners'power,wereobligedtoacquiesce.Aftertherepossessionsofland,thelandownersseldomcultivatedthelandsthemselves.Theyusuallyleasedthematblack-marketrates,soldthem,orhiredfarmhandstodothetilling,soastoprotecttheirillegalunscrupulousprofits.[9]
Inthetwo-yearperioduptoJune1951,disputesarisingfromleasecancellations(dismissals)amountedto16,349cases,ofwhich8,877casesinvolvedactualleasedismissal.[10]Theofficialsettlementsofleasecancellationsweretroublesome,sinceaccordingtothelawthelandownerswereallowedtocancelleasesuponcontractualterminationandforownercultivation.Theresultwasthat1,971leasecancellationswereofficiallygranted,andtheremainingleaseswererestoredtothetenants.[11]Theareaoflandassociatedwiththesegrantedcasesamountedto1,376chias,orabout0.04percentofthetotalareaoflandundertenancybeforethesharerestriction.[12]
Duringthesameperiod(June1949toJune1951),theareaoffarmlandpurchasedbytenantfarmersfromlandownersamountedtoonly2.2percentofthetotalareaoflandundertenancy.[13]Thisformoftransferwasallowedbyreformauthoritiesintheexpectationthatitwouldleadtomoreequaldistributionofland.Itisnoteasytounderstandwhyoutrighttransfersoflandowner-shipstotenantsweresofew.Theanswertothisseemstolieinthedrasticfalloflandprices.From1948to1951,landpricesmeasuredinriceforvariouslandgradesfellbyarangeof46to62percent[14]—proportionaldecreasesgreaterthantherentalsharereduction.Thismeansthattherentalinetothelandownerunderthesharerestriction,evenintheabsenceofpensatingpaymentorresourcereallocation,wouldbehigherthantheinterestreturnfromsellingoutright.Thedrasticfallinlandpricesmaybepartlyexplainedbythespecializationinriskbearingormanagementassociatedwithalternativetenurearrangements.Itmayhavebeenduealsotoafallinthespeculativedemandtoholdland,generatedbytheexpectationofotherreformmeasuresforthing.
Conclusions
Theevidenceofpensatingpaymentsandtenurerearrangementspresentedinthissectionillustratestheoffsettingcontrac-tualrearrangementsderivedinsectionA.Thesearerevisionsthroughwhichtheinitialequilibriumofaleasecontractmayberestoredundertherentalsharereduction.Inspiteofalltheclaimsthattheserearrangements(mostlyillegal)were"alarming,"availablesourcesindicatethattheyoccurredinnomorethan10percentofthetenantcontractsaffectedbytherentalrestriction,andthegreaterpartoftheseillegalpracticeswassuppressedandcorrectedaccordingtolaw.Inviewofthefactthatthenumberoffarmleasesaffectedbytherentalsharerestrictiontotaled380,473,andconsideringthattherentalpercentagewasreducedfromanestimatedmeanof56.8percentoftheannualyieldto37.5percent,onewonderswhypensatingpaymentsandtenurerearrangementsweresofew.Effectiveenforcementoflawisoneexplanation,butithardlyseemssufficient.Indeed,theenforcementofthesharerestrictionin1949wasregardedbythelawmakeras"incrediblysmooth."[15]Why?Supposeweaskaseeminglyunrelatedquestion:Ifpensatingpaymentsandtenurerearrangementsdonottakeplacetotheextentofrestoringtheinitialresourceuse,whatadjustmentswillweobserveinresourceallocation?Asitturnsout,theanswertothishelps,inpart,toexplainwhytheillegalpracticeswereinfrequent:thelandownercouldprotecthisrentalinefromlandafterthepercentagereduction,withoutviolatingthelaw,throughadjustingfarmingintensity.
[1].SeeChengChen,RecordsofTaiwanLandReform(Taipei:ChungHwaBookCo.,1961),chap.2.
[2].Sino-AmericanJointCommissiononRuralReconstruction,"JCRRAnnualReportsonLandReformintheRepublicofChina,"Compositevolume,mimeographed(Taipei:Farmer'sServiceDivision,1965),p.9.
[3].Ibid.,chap2.
[4].SeeChen,Records,chap.2;JCRR,"AnnualReports,"chap.2;andTaiwanProvincialLandBureau,"Implementationofthe37.5percentFarmRentLimitationProgram,"mimeographed(Taipei:JCRRTranslation,1950).
[5].JCRR,"AnnualReports,"p.9.
[6].Ibid.,p.10
[7].TPLB,"Implementation,''pp.24-25,table5.