The point I wish to raise to-day is the question of the insecurity of life and property of British subjects in Southern Persia, and I ask the Secretary of State what the Government is going to do to protect them. We have seen for a considerable time our Consuls attacked and our officers murdered, and not one arrest has been made. We have seen our British and Indian merchants robbed time after time and practically ruined, and there must now be claims for some hundreds of thousands of pounds' worth of property carried off and no redress has been given, and not a penny has yet been paid in compensatian. We see the telegraph line constantly destroyed, the in- sulators shot at and broken, miles of wire and posts carried off, the British and Persian officials engaged in the protection of the line robbed and beaten, and the line interrupted day after day. I would like to emphasise the importance of this telegraph line. It is the Indo-European telegraph line managed by the Government of India, and it is the main communication between England and India. Therefore we are specially responsible for the maintenance of that line and for the keeping of communication intact between East and West. That is why the question is so important at the present day. I have here a list of the outrages committed last year against British subjects in Southern Persia, and I very much doubt whether hon. Members are aware of the extent and seriousness of these outrages. I will mention a few of them which were published in the "Financier" on the 31st of December last:—

"(1) Near Kazerun, Mr. Consul Smart wounded and six sowars killed and eleven wounded.

(2) Contingent of 39th C.I. Horse attacked south of Dehbeed when en route from Shiraz to Ispahan. An officer and some sowars were said to have been wounded.

(3) Mr. Fenn, of the Indo-European Telegraph Department, en route from Teheran to Yazd, on duty, stripped of everything and badly mauled.

(4) Mr. Vice-Consul Moir robbed of everything and badly used.

(5) Mr. Brookes, travelling with Mr. Moir, met with the same treatment.

(6) Colonel Williams, robbed of everything and badly used.

(7) Mr. Donald Carr, carried off into the mountains, kept without food, stripped practically of everything and knocked about.

(8) Mr. Lemon, Inspector of Indo-European Telegraphs, literally stripped of everything and left naked in the desert (all his camp equipment, the property of the Indian Government, was carried off with the transport animals).

(9) Mr. Assistant-Superintendent Meriton, of the Indo-European Telegraph Department, carried off prisoner, bag and baggage, and robbed of everything and badly used.

(10) Lieutenant Bulloch, shot at and wounded and robbed of everything.

(11) Captain Eckford, killed near Shiraz, and some sowars wounded. This incident is said to be of a serious nature."

The report goes on:—

"Immense damage is constantly being done to the telegraph lines—insulators in thousands are destroyed, and in many cases poles are smashed and the wire carried away. Scarcely a day passes on which communication is not interrupted—in some cases the interruption lasts fur days owing to the presence of bands of marauding savage tribesmen along the line of route. Times out of count the line riders have been literally stripped of everything, their horses and tools taken, and themselves kept prisoners for days and ill-treated. The telephone stations have been frequently raided."

I only mention these cases because I wish the House to know the terrible state of insecurity and destruction of British property which is going on there. In Northern Persia order is kept by means of some 13,000 Russian troops, but what have we done in the South. We have sent one regiment of some 400 men of an unfortunate Indian Cavalry regiment to Shiraz. These men are shut up in Shiraz, prisoners in the caravanserai they are quartered in. A Persian caravanserai is a large quadrangular building, as a rule, with stables all round inside the walls. The officers going in and out have all been shot at. The men are not allowed to retaliate, and we have here an example of absolute impotence on the part of the British Government, while the spirit of the Indian soldier is being absolutely destroyed. Do you think the Russians or any other Power would allow their soldiers to be thus insulted with impunity? Would they permit this exhibition of Russian soldiers compelled to sit still and be shot at with impunity in their quarters and not permitted to avenge the insult? Is that the way to maintain the honour and prestige of the Indian Army, an Army which is second to none in the world? Persia herself is absolutely powerless to alter things. We all wish to maintain the power and the independence of Persia, and I say deliberately that it is only England and Russia who are at present doing it. If England and Russia were not in Persia, Persia would be eaten up to-morrow by Afghanistan on the east and by Turkey on the west, and Persia as an independent Power would absolutely cease to exist. Persia has absolutely no army and no power of defence either against Afghanistan on the east, Turkey on the west, the Turkomans on the north, or the Arabs on the south. England and Russia are at present the only defence of Persia, and, were that defence withdrawn, every one of these four would advance and Persia would be done for. I remember years ago sitting by the camp fire one night on the Afghan side of the border and the Afghans detailing to me some acts of arrogance on the part of the Persian border officials. No official can be more arrogant than the Persian, as all who know him can say, so long as his own skin is not in danger, and no one can be more craven when it is. The Afghan said: "If it were not for you and the Russians we would take the whole place to-morrow." And they could do it, too. In fact, as we all know, Urumia, in Western Persia would be in the possession of Turkey to-day had it not been for the Russian troops, and for anyone to talk of Persia being able to maintain her independence without help is to talk absolute nonsense. I noticed in yesterday's papers a long telegram from India reporting a resolution passed by the All-Indian Moslem League at their conference at Lucknow. I have the resolution here, and I will read the last sentence or two to the House:—

"The League, in view of the unsettled condition of Persia and the intensity of Moslem feeling in India caused by the atrocities committed by Russian troops, urges upon the British Government the immediate necessity of using its good offices to persuade Russia to evacuate Northern Persia and to leave the Persians to work out their own salvation without foreign intervention."

I hope that All-Indian Moslem League men will look at things in Persia from the point of view of practical statesmen. All my sympathies are with the Indian Mahomedans, but we must remember in the first place that it is the very unsettled condition of Persia which they talk about which has brought Russian troops into Persia, and that if they were withdrawn there is nothing to put in their place, and the immediate consequence would be that Northern Persia would also relapse into the same state of anarchy as there is now in Southern Persia. The result would be the practical break-up of the Persian Kingdom. I say to the members of the All-Indian Moslem League, that if they could visit Persia themselves they would realise the facts of the situation and not pass resolutions such as this. I would ask those. Indian Mahomedans to refer to that letter from an Indian Mussulman to the "Indian Pioneer" in June last describing the way in which Indian Mahomedans are treated by their Persian co-religionists. He began his letter:—

"I am an Indian Mussulman—"

and he goes on to describe how he had been up to Shiraz on business, and how on his way back he was robbed of everything he possessed and threatened with death. He said:—

"I was robbed because I was an Indian, and though I repeated the Fathiha and the Kalima, and showed I was a good Mussulman, yet they said I was an enemy, and a subject of the enemy, and took all I possessed. When I said I was a British subject, and threatened them that I would appeal to the Consul Sahib, they laughed in my beard and said that the British did not dare do anything to protect either the lives or the property of their subjects. The day I arrived in Bushire there arrived from Shiraz three Pathans and another Indian Mussulman, who had also been robbed at another place of every anna they possessed."

He described very fully what he had gone through, and for the All-Indian Mahomedan League, who want to preserve the kingdom of Persia just as we do, to suppose that the Persians under the present circumstances can work out their own salvation, as they say in their resolution, without foreign help and support is to imagine an absolute impossibility. Let them put themselves in the place of the writer of that letter, and they will see what it is to be an Indian Mahomedan in Persia. We have had an excellent example lately of what Persia really is in a series of brilliant letters contributed to the "Times" by their Teheran correspondent, who has given us the latest and most trustworthy account that we have yet had. I think the personality of that writer ought to be a testimony to the trustworthiness of the account he has given us. He commenced in the early days of the Persian Revolution as an advocate of the so-called Nationalist party, and he has gone through the mill from the beginning to the end, and is entitled to speak with a knowledge that few possess. I would ask hon. Members to look at his letter published in the "Times" of 7th March, little more than a month ago, and read his description of the Persian aristocracy and the Persian officials. I will only quote five lines:—

"Intrigue was their only art and lying their most cultivated talent. Their sole inspiring motive was greed, and the embezzlement from a stricken treasury was their principal pursuit."

He goes on to describe the peasantry, and, talking of the warriors of Persia, he says:—

"I am inclined to think that the tribesman is an overrated warrior whose prowess lies in terrorising helpless villagers."

I think that is a very good description of the people. This correspondent has shown us that the Persian Government and the Persian officials are utterly corrupt and untrustworthy, and he has shown us that there is no spirit of nationality or patriotism in the country, and that the so-called warriors are mere robbers, with no stomach for a real fight.

indicated dissent.

There is a religious fanaticism which is not to be confused with patriotism. I cannot understand the hon. Member reading those letters in any other manner. "Persia," as I read in an excellent article by Mr. Stainton, an ex-telegraph officer in Persia, in the "Financier" of 20th March, "is being killed by sentiment—the sentiment which forbids interference with the internal affairs of another nation in difficulties." If Persia is to be saved, there must be interference. Persia, in the first place, requires a strong and reliable financial administration. This cannot be secured under Persian administration, and the present temporary arrangements appear to me to be very unsatisfactory. England and Russia are the two Powers who are advancing money to Persia, and they are the two Powers concerned in seeing that money so advanced by them is rightly administered. India shares equally with England in advancing this money, and I can think of no better arrangement than that Russian, English, and Indian representatives should form a financial board for the financial administration of Persia.

As to Southern Persia, in the correspondence connected with the Russian Convention of 1907, mention was made of the special interests possessed by Great Britain in the Persian Gulf, and it especially takes note of the fact that the Russian Government had explicitly acknowledged these interests. These interests are there defined as the preservation of the status quo in the Persian Gulf and the maintenance of British trade. British trade can only be maintained by securing the safety of the trade routes into the interior, and British interests may be said to rest on the security of the Gulf ports and the trade routes leading up from those ports to the commercial marts, such as Shiraz, Ispahan, Yezd, and other centres of trade in Southern Persia. The whole of our special interests in the Gulf depend on those trade routes, and those trade routes are now closed to us. Not only is the caravan mercantile traffic held up, but the unfortunate Britishers shut up in Shiraz are unable to get down to the ports or to leave the country, and the Secretary of State informed us only the other day that it is proposed to withdraw the Indian Cavalry now at Shiraz, and by this means to provide an escort down to the coast for the British subjects now in Shiraz who desire to get away. A telegram from Teheran, in yesterday's paper, states that the Indian Cavalry are to leave Shiraz on 6th April. If their place has been taken by the newly formed Swedish gendarmerie, well and good, but we have no news yet as to how those gendarmerie have progressed on their march south from Teheran. No one more than myself congratulates the Swedish officers on what they have done. They have worked manfully against all odds, and have shown what real good stuff they are made of. I do them all honour, and I hope they may succeed. The Secretary of State has determined to give them a final trial. Be it so. But if the experiment fails, if this final trial fails, we shall be faced with greater difficulties than ever. I do not know whether the Secretary of State has had his attention called to the letters written from Shiraz by the correspondent of the Indian "Pioneer." He is a man on the spot. By the last mail there is a letter of 8th February, calling special attention to the failure of the Swedish gendarmerie and to the necessity of having British officers who have had experience of raising levies on the Indian frontiers to undertake this work of guarding the trade routes.

That is what I have advocated all through. We are withdrawing our troops and trusting to the Swedish gendarmerie. Failing that gendarmerie the only plan I can see is to lend to Persia a sufficient number of British and Indian Mahomedan officers and non-commissioned officers to enable the Persian Government to raise a Persian force of at least 5,000 levies to guard those trade routes and to maintain the security of the country. I have already worked out and sent to the Secretary of State a scheme for the raising of such a force, and with a picked body of British officers and good complement of Indian Mahomedan officers and non-commissioned officers to train, stiffen, and discipline the force, I see no reason why it should not be possible to turn the Persians into good soldiers, just as we have turned the Egyptians into good soldiers. The Persians are an unpromising material, I acknowledge, as the experience of the Swedish officers have already shown. The only time the gendarmerie went out they were ignominiously beaten back and lost everything they had, and we have the fact staring us in the face at the present moment, that the fresh supply of arms waiting for them at Bushire cannot be taken up country for fear of being captured by the tribes when on the road. The gendarmerie, therefore, are on their final trial. If they succeed, well and good. If they do not succeed, I trust that the Secretary of State will see that to sit still and do nothing will inevitably lead to trouble, and that he will be prepared to take up the scheme for Persian levies that I have suggested without the least delay. If the Swedish gendarmerie fail, the only alternative I can see is to raise those Persian levies under British officers. If they fail to get up the arms from Bushire, or fail to maintain the trade routes and to secure order, I hope the Secretary of State will take some practical steps to put British officers in charge.

I want, before I deal with the points which have been raised by the hon. and gallant Gentleman, to make a further statement to the House than has yet been made on Balkan affairs. I do not propose to enter upon any general review of European affairs or of the European situation. I will leave that where it was left by the Prime Minister at the opening of Parliament; but I want to supplement the statement which he made by stating to the House some further progress which has been made of a favourable nature in Balkan affairs since Parliament opened. It is due to the House that when it is possible for the Government to say anything with regard to Balkan affairs or to give any information, it should be given as soon as we can; and that feeling and the fact that, of course, partial disclosures do appear in the Press from time to time of what is going on between the Powers about Balkan affairs, makes it, I think, not unjustifiable, but necessary and fair to the House, that I should say what I propose to say this afternoon. I would ask the House to bear in mind that the Balkan difficulties, the Balkan question, falls under two heads, and that hitherto the most urgent and important, so far as the Great Powers have been concerned, has not been the war between Turkey and the Allies, important as that is, but it has been the discussion of the most important and urgent task to them, the securing of agreement between the Great Powers themselves on points that might cause, if not settled, serious divisions between the Great Powers.

4.0 P.M.

In other words, important and serious as the war between Turkey and the Allies is, the most urgent thing for the Great Powers has been to secure that the war should be localised, and should not spread, and should not involve any of the Great Powers in disagreement between themselves that might lead to a breach of the peace between themselves. The first heading which I have mentioned has concerned the diplomacy of the Great Powers during the last few weeks. If anybody recalls how in years past there were great apprehensions of what would arise whenever a catastrophe in the Near East did come, or recalls what has been a commonplace in European diplomacy for years past, I think it will be realised that, now that the task has come, it is creditable to the diplomacy of the Great Powers that they have weathered the storm up to the present time, and that they have, I think, now reached the point when there is every prospect that the storm will be weathered altogether. The Powers started with an assumption which was a great asset on the side of peace. They started with the assumption, which was accepted and acted upon by them all, that none of the Great Powers would make use of the situation to acquire territory for themselves either on the Continent or amongst the islands. That, at any rate, was one asset, with which to start. That being assumed, the greatest point of difficulty and danger was the question of Albania and its delimitation. Before Christmas some progress had been made with that. In the first place, an agreement had been cone to between the Powers that there was to be an autonomous Albania. That in itself, was important, for it was important to have gained an agreement upon that principle. Also before Christmas the Great Powers came to an agreement about the littoral; that is to say, the Adriatic coast. That was another point gained, and another danger removed. There remained to be discussed the inland frontiers of Albania, a matter of great importance, because if Albania were to be too small it could not have a separate existence in future; if, on the other hand, it were to be too large, it would encroach unfairly on the legitimate aspirations and aims of Montenegro, Servia or Greece.

The Great Powers have not hitherto dealt with the Southern frontier of Albania. I would ask the House to distinguish carefully between the South and South-East frontier and the North and North-East frontier, because, though no agreement has yet been reached as regards the Southern frontier, and though there may be differences of opinion on some points which may be troublesome to settle in connection with that, we do not feel—I do not think any of the Great Powers feel—whatever differences of opinion may arise, or whatever trouble there may be in settling the different points on the South or South-East frontier, that there is any question connected with that part of the frontier which is likely to be so much a cause of difference between the Great Powers as to be a source of danger and anxiety. But on the North and North-Eastern frontier of Albania the matter is different. The difference is that if that had not been settled, undoubtedly questions might have arisen between the Great Powers which would have been a cause not only of anxiety but of danger. The differences were concerned especially with Scutari on the North, and certain other towns on the North or North-East. One by one the Powers virtually came to an agreement on those points, but so long as any one point was outstanding it was understood that any agreement which might have been reached on any of the others was conditional upon an agreement upon the whole. For some time past we have been in this position: that we have seen within sight an agreement between the Powers on the whole of the geographical line of the North and North-East frontier of Albania, provided the one remaining outstanding point could be settled. At the end of last week an agreement was come to on the one outstanding point of the North and North-East frontier. I cannot give the details to the House as to what the geographical line actually is, because it is for the Powers themselves to communicate it in detail in the first place to Servia and Montenegro, who are especially concerned. Until they actually make that communication, and make it public, I cannot go into details, but I think the fact that the last outstanding point which stood in the way of a complete agreement as regards the geographical territorial frontier line of the North and North-East of Albania having been reached at the end of last week is so important, that it ought to be known to the public that the Powers are agreed as to what the line of the North and North-East frontier of Albania is to be.

There are, of course, many other points to be discussed in connection with the question which are points of detail. For instance, it would be essential that there should be some guarantees for the protection of Albanian, Mussulman and Catholic minorities in the territory ceded to Servia and Montenegro. The races, creeds and populations are so intermixed in certain parts of the territory that there ought to be some guarantee of that kind, but the important thing is that there is no longer territorial disagreement between the Powers as to what the geographical line of the frontier should be. One wishes to be very cautions in making forecasts. We have been confronted continually for weeks past with unforeseen contingencies, and no doubt the appearance of something unforeseen may upset calculations. There remain to be considered those questions connected with the debt, questions connected with commercial considerations, questions connected with the Ægean Isles, but in none of those questions ought there to be found the same anxiety as regards the preservation of peace which did exist until agreement had been come to about the littoral of Albania and the North and North-East Frontier. After the weeks of labour and anxiety that the Powers of Europe have gone through, I think they may well have reached this point that they may be positively grateful that the questions, however troublesome they are, do not involve anxiety. That should be, and I believe must be, one consequence of the progress which has been made. Another consequence which ought to follow is this, that once an announcement has been made to Servia and Montenegro that the Powers have come to an agreement and of their decision, there ought to be a cessation of hostilities in what is in future to be Albania. There ought to be a withdrawal, as soon as possible, from points in that territory which have been occupied by Servia, or Montenegro, and in particular there ought to be a cessation from the attacks upon Scutari itself, because, if the destiny of this place is not to be decided by things like the siege of Scutari, to persist in them means useless slaughter and really amounts to criminal folly. If the siege of Scutari is persisted in when the Powers have decided to take into their own hands what its destiny should be and if the bloodshed which accompanies that siege were to go on—if the place is taken greater bloodshed will follow—the taking of that place would involve a useless, purposeless and criminal amount of suffering, which I am sure would alienate all sympathy in this country.

That is one of the reasons why it is desirable that the fact that the Powers have come to an agreement should be known as soon as possible. If the decision of the Powers is not respected, then I trust that those who dispute it will be confronted not with any separate action on the part of one Power, which may divide the Powers, but with the united pressure of all the Powers. Having come to an agreement, the first step is for the Powers to take collective diplomatic action at Belgrade and Cettinje to announce the decision to which they have come, and to bring about a cessation of hostilities in the territory to be allotted to Albania. I trust that step is going to be taken without delay, for until it is taken there is a greater risk of untoward incidents, or unsettling or disturbing elements, than I think there will be after the Powers have taken the collective diplomatic step of announcing what their decision is and their agreement. So much with regard to the first head. With regard to the second head, the war between Turkey and the Allies, as has appeared in the Press, the Powers have offered their mediation, and have formulated certain conditions as being in their opinion a reasonable basis of peace. The most important of them is the frontier line. The line which they have suggested is a line from Enos to Midia, a line which I trust will be accepted, because that line, if accepted, will avoid the raising of any questions connected with Constantinople and the Straits, and, of course, connected with Asia Minor. The second point of importance is that the Ægean Islands, the situation of which, or the destiny of some of which at any rate, is a matter of interest to more than one Power, should be left to the decision of the Powers. That, of course, does not apply to Crete, from which Turkey, according to these terms of peace, will unconditionally withdraw all interest.

This is only a mediation of the Powers. I do not mean to say that the Powers have made up their minds to enforce a compulsory arbitration or to impose terms. It is mediation, but what I want to point out is this, that the Powers, having suggested a frontier line in Thrace, have at present, shown every disposition to leave everything west of that line to the decision of the Allies themselves, if Turkey sees fit, with the exception, of course, of Albania, of which I have spoken. The Balkan Allies, if these terms are accepted by Turkey, are assured of an arrangement of the terms of peace—exclusive of such particular questions as Albania—amongthemselves, without the intervention of the Great Powers. But if these terms are not accepted, and if a frontier line is pressed for which raises questions connected with Constantinople and the Straits, or if the war were prolonged until questions were raised in connection with Asia Minor, then it would be certain that in the settlement of the terms of peace one or more of the Powers would be concerned, not as disinterested mediators, but as interested parties. That is why I urge, without using any language of a threatening character, that it is in the interests, I believe, of both the belligerent parties that the terms of peace which have been put forward as reasonable by the Powers should be accepted as a basis upon which peace should be concluded. After peace is concluded, what we hope for is that Turkey will be left in a position to consolidate and strengthen her possessions in Asia Minor, to develop the country, and to establish good order and good government. If she sets herself to that task, it is one in which I believe she will receive the support and goodwill of all the Powers, and ought to receive it; but if she is to have any chance of success in that task, then it is essential that there should not be imposed upon her in the terms of peace financial burdens which will make it impossible for her to address herself to the task of strengthening her position and developing and establishing order in Asia Minor and the territory left to her, but will, on the contrary, make her task after the war is over a struggle with bankruptcy.

That is not to the interest of the Powers, especially those interested in Asia Minor. They must feel that if, under the terms of peace, financial burdens are imposed upon Turkey for the future which will leave her face to face, after the war is over, with a struggle with bankruptcy, it will be a settlement which, not only will be against the interests of Turkey, but against the interests of those Powers who wish, whatever the result of the war, that Turkey shall, at any rate, be able to make a fresh start when it is over on fair terms. I would say the same in regard to the Balkan States. If they maintain union and friendship between themselves and set to work to organise and develop the territory they acquire after the war is over, then, again, they will need the support and goodwill of Europe, especially financial support—I do not mean the financial support of Governments, but the financial support which Europe can give, and which, undoubtedly, Europe would not give unless the Governments are well disposed. They will need that to develop their territories and to realise the great future they have before them. In both cases, whether it be for Turkey or the Balkan States, I am sure that the shortest and most certain way to secure in the future the support and goodwill of Europe is to make peace as soon as possible and to make it on the terms which have been suggested as reasonable terms.

I say nothing on another point of importance, the differences between Roumania, and Bulgaria, except that it is a very great relief that these two countries, if unable to settle them by direct negotiation between themselves, should have chosen the course of resort to mediation which is far preferable to the resort to force, and as that mediation is proceeding I make no comment, nor, I think, is it necessary that I should make any comment, on the actual question involved. This much I should like to say, that we all feel in the Government that the House has treated the Government with great confidence through the Balkan crisis. It, of course, makes the sense of responsibility even greater than usual. The fact that through the meeting of Ambassadors London has been made the central point of negotiation between the Great Powers, and the special position in which I have stood with regard to the meetings of Ambassadors, has made reticence on my part essential as far as public statements were concerned. But I hope the House will feel that, in questions of the Balkan crisis so far, we have not abused its confidence by pursuing, in the absence of criticism, any policy of which the House would have disapproved, or sacrificing, as far as things have yet gone, British interests which might have been preserved. British trade, of course, has suffered in the disturbed area where the war is going on, as the trade of every country has suffered, and what diplomatic representations could do to prevent the imposition of double duties and other things of that kind during the progress of the war we have done. Of course you cannot, in the case of a war, prevent altogether disturbance of trade and the loss involved without intervention and departure from the policy of neutrality, which instead of limiting the extent of the war might increase it. Within those limits we have done what we could to minimise disturbance to British trade, but as regards our general policy we have pursued a policy of peace, and we can say, truthfully and without any qualification whatever, that there has been no difficulty inherent to this crisis, which has been increased by our action. There is none that, so far as we could exercise influence, we have not used in order to make things smooth, and we have worked continuously, consistently and single-mindedly to promote agreement between the Great Powers. I do not think for a moment that the largest share of the credit of any results which have been reached hitherto, or of future results which may be reached, is going to be claimed for the British Government. The chief credit will, of course, be due to those Powers more directly interested than ourselves and whose public opinion therefore has been much more sensitive and suspicious than our own has been. It will be to the moderation, the forbearance, and the patience of the Governments of those particular Powers who are most directly interested and whose public opinion is more sensitive, that the chief credit for any settlement come to must be due. Our policy, as far as our past has gone, has been to make all that task easier and to work for general agreement and peace. If that has the approval of the House, the House will no doubt feel that the forbearance and confidence which it has shown towards the Government have been justified as far as things have yet gone, and I can certainly say that the attitude of the House, and I may add, of the Press and of public opinion in this country generally, has been a great support and help to the Government in pursuing that policy.

I would now deal with the question of Persia, an entirely different matter, and one, I admit, of great importance and also of great difficulty. There is no denying the facts which the hon. and gallant Gentleman opposite alleged—the insecurity of life and property in Southern Persia—and he read out a most imposing list of outrages. I wish I had a more satisfactory statement to make than I can make. With regard to the regiment at Shiraz, I think the position of that regiment has been so difficult and so trying that the time has come when it is really a primary consideration to give it relief by withdrawal as soon as possible, and that withdrawal is going to be carried out. That is a thing which stands by itself as something which is due to the regiment. I see no object in its being retained at Shiraz under present circumstances. If we are to have a force in Southern Persia which is really to affect the conditions and be effective for any purpose, it ought to be a much larger force. It is not considerate to keep in Southern Persia a force which cannot really affect the situation and which is kept there in a very trying position.

Can the right hon. Gentleman say how many men there are?

A few hundred. The withdrawal starts early next month. With regard to the actual damage to trade, of course there has been great damage to trade, but according to the Customs Returns from Southern ports, it is really surprising, when you look into them, how much trade has been going on in one way or another in the South of Persia in spite of the damage which has been done in notorious instances to caravans. The Returns of the Southern Customs ports are much greater than one would have expected to be possible, considering the accounts we have had of disturbance and barefaced robbery on the road. There they are. With regard to Northern Persia, where the hon. and gallant Gentleman said the Russians were keeping order, I think he said with 16,000 troops, it would be an erroneous conclusion to assume that 16,000 troops have preserved order in the whole of Northern Persia. Two roads have been kept open to trade in the North of Persia by the Russian troops, but the other roads in Northern Persia, I believe, have been as disturbed and as unsafe as the Southern roads. Of course, it is open to us, after the list of outrages the hon. and gallant Gentleman has read out, if we like, to make out a case for saying that we at any rate must ourselves take in hand the preservation of order on the Southern roads in the interests of our trade. But I do not think the Russian experience in the North, considering that only two trade routes have been kept open, is altogether a good precedent for us to follow in the South. It clearly means that if you are going to do any good by your own separate individual action in Southern Persia, it is a very large undertaking, which, in however small a way it begins, is certain to lead to very large and undesirable responsibilities. That is why, in spite of all the provocation and disturbance there has been, we have not committed ourselves, and will not commit ourselves now to embark on a policy which may mean the beginning of an occupation of Southern Persia and a partition of Persia. I fully admit all the drawbacks that the hon. and gallant Gentleman has urged to seeing the restoration of order attempted by other means, but formidable as the facts which the hon. and gallant Gentleman put forward were, and unpleasant as they sounded when one listened to them, they are, after all, in my opinion, even when you take them altogether, a far less evil than the unknown, the unforeseen, and the unlimited consequences of sending a large British force into Persia.

So we have pursued, and shall as long as there is the least prospect of its success, the policy which we are pursuing at present. There is in Persia at the present time, as far as personnel is concerned, I believe the best Persian Government that it is possible to obtain. We wish—and the Russian Government has shown its disposition to adopt the same course—to assist that Government with a small advance sufficient, we hope, to enable it to make progress with the restoration of order in the country, to improve its prospects, and give it a chance of raising a larger loan subsequently when the conditions in Persia have improved, not from the Governments or under a Government guarantee, but from independent financiers. We propose to advance £200,000 and the Russians will also advance £200,000 to the present Persian Government for that purpose. The control of M. Mornard I believe to be quite sufficient for dealing with a sum of that amount, advanced not in connection with any great scheme of reorganisation, but in order to deal with administrative arrears and immediate administrative necessities; but I think, when it comes to a large loan, and financiers are approached in connection with a large loan to Persia, undoubtedly they will want to make their own conditions as to the control over the expenditure of the loan and the purposes to which it is to be applied, and I think that ought to be supported if the securing of that condition will induce them to make a loan of a considerable amount to Persia later on. Besides that, we ourselves wish to advance £100,000 specially to Persia to strengthen the gendarmerie and a force to protect the trade routes in the South. That will be administered by the Swedish officers in close consultation with British representatives. The Swedish officers have a very difficult task, and I am very glad the hon. and gallant Gentleman spoke of them in the terms which he did. They have shown great courage and great patience and persistence, and they have made some progress with the gendarmerie—as much progress as we could have expected considering all the difficulties they have had to contend with. It is because we believe they have done their best and we believe they have done well, that we give this support to them as the best means of proving to them that they have the support, the encouragement and goodwill of the British Government in their task.

If all this fails, we must then consider what must be done. The hon. and gallant Gentleman made his suggestion. I do not wish for a moment to say that the prospects are such that it is premature to consider what we might do, but I think it is quite premature to come to any decision, and still more premature to come to announcing a decision as to what we shall do if this fails. We wish to give that scheme or policy a chance of success, and we do not improve that chance by announcing that we have already something in reserve. We want to give it the best chance we can, and until it fails I do not think we ought to come to any decision as to what is to be done. If the situation becomes worse in Persia, no doubt it will become a matter of anxious consideration as to what can or must be done, but at present our object is to preserve the separate existence of Persia, to preserve it through the Persian Government, to do all we can to secure for the Government in Persia, which I believe is being done at the present moment, the best possible personnel, and to get for it the best possible outside assistance and advice, as, for instance, in the case of the Swedish officers. I deprecate the suggestion that this is going absolutely to fail. We intend to exercise unlimited patience, and to devote all our efforts to promote and encourage its success as long as there is a reasonable prospect that in that way success will be assured.

I referred on the opening day of the Session to the position in Persia, for, like everyone else in the House, I was more or less familiar with the facts which my hon. Friend behind me brought to the notice of the right hon. Gentleman, and I shall not say anything on that subject now. I am sure that we all realise, not only the conditions which prevail there, but the difficulties with which the Government are faced. We realise the difficulties, and I think we have shown that we are not prepared to do anything to make these difficulties greater. The position really is, as indeed the speech of the right hon. Gentleman himself shows, extremely unsatisfactory. I think everyone feels that, and I can say for myself, and I think I can speak for the party to which I belong, that we should look with as much distaste as the right hon. Gentleman himself on the necessity of facing anything like the partition of Persia. Our commitments are quite large enough, and if there is any other method, and as long as there is any hope of a settlement in another direction, then I am sure the Government are right in trying to carry out another policy rather than that of partition. I am sure that is the view of the great majority of my hon. Friends on this side of the House, but as the right hon. Gentleman himself feels there must be a limit to the patience which is shown. Like him I hope that the measures he has taken will be successful, but of course, he and this country must be prepared, in the last resort, not for, I hope, such a drastic step as I have referred to, but for seeing that those outrages are not continued on British traders engaged in legitimate trade in Southern Persia.

The sole reason why I rose is that I thought it necessary to say something in regard to the statement made by the right hon. Gentleman about the situation in the Balkans. I am sure that the House is pleased that he has been able to say so much, and while we are sorry that it is not possible to go further, we are not only gratified by what he has announced, but I think we can congratulate him and the representatives of all the Great Powers that so large a step in the direction of peace has already been made. I quite agree with the division he made as to the two sides of the Balkan question. For us by far the most important question from the point of view of our national interests, was that the Great Powers should not be involved in the difficulties which had arisen in the Near East. That was very difficult, but as the right hon. Gentleman has pointed out, while we can afford to be disinterested—for our interests are scarcely touched at all—the questions which have already arisen do touch interests which for generations have affected the ambitions of at least two of the Great Powers of Europe. It says much for the desire for peace on the part of the Great Powers, and it is a happy augury for the termination of this dispute, that, so far, they have worked in harmony, and so far as we can judge, with the one desire of localising this war, and preventing any general joining in of the Great Powers. It is, I think, a great thing that so much of the delimitation of Albania, as the right hon. Gentleman referred to, has already been arranged—a great thing because that, as we all know, is one of the subjects in which one at least of the Great Powers was keenly interested. I am sure it is something that we have reason to be pleased with that this step has been taken. Of course, the other difficulty to which the right hon. Gentleman referred is as to what might happen in or near Constantinople, which equally affects the Great Powers, and we can only hope and pray that the war will soon terminate, and terminate in such a way that none of the vast interests which would be involved if these questions were raised shall be brought into the light of day. I hope it will not be long before the right hon. Gentleman will be able to give us this further information, not only that the Great Powers have agreed on the terms in connection with this matter, but that the Allies have accepted these terms. The right hon. Gentleman stated to-day, what I said on the first day of the Session, that this war seemed in many aspects to be especially deplorable, because, as he said, on one side it cannot affect the terms of peace. We all trust, therefore, that it will soon terminate. I am sure the right hon. Gentleman is right in saying that it is in the interest of everyone that Turkey, when the war ends, if it is to have an existence at all—and it must have an existence—should have an existence which is compatible with reasonable strength and reasonable credit, and that it is equally essential that all the Allies should endeavour in peace, as they have in war, to work together, and sink whatever differences there may be among them, and to realise that the great prospect of industrial development—a prospect which I think is immense under peaceful conditions—is only possible if there is good government in all those countries, and that it can only be secured if they act towards each other in a reasonable spirit.

I have listened, as I am sure all the House have listened, with very great satisfaction and gratification to what the right hon. Gentleman has just said, and I repeat, with perfect sincerity, as stated by my right hon. Friend and colleague a few moments ago, that the Government feel that throughout these very troubled and anxious times, which have now extended for some months, it has been of enormous advantage to the influence of this country, and, therefore, I hope one may say, without undue self-complacency, that in the general settlement of the question the Government have had behind them the united support of the House of Commons and of opinion in this country. I do not think there has ever been a chapter in our foreign policy where there have been so few discordant notes, or where the Government have had to acknowledge so fully and gratefully, as I do to-day, the patriotic support which the Opposition has given to us. I wish to emphasise, if I may, two points which were made by the right hon. Gentleman. The first is that as regards the questions that have arisen between the Great Powers, while no one will be more disposed than I am to acknowledge the invaluable service which has been rendered, and which I believe is recognised by them all, by my right hon. Friend in presiding over the reunion of the Ambassadors, yet the gratitude of Europe at the assured prospect, for I think it is now assured, that, as between the Great Powers, no serious difficulty is likely to arise, is due to the admirable spirit of forbearance, patience, and self-sacrifice which has been shown by those who are more immediately interested in the issues than we are ourselves. If it had not been for that, if there had not been this loyal spirit of give-and-take on the part of the Great Powers directly concerned, and in immediate contiguity to the local difficulties and problems, I do not suppose that the most skilful and the best conducted diplomacy in the world could have steered the ship, which carries with it really all the fortunes of Europe, through the shoals and rocks it has had to encounter. I am glad the right hon. Gentleman has emphasised this, because it will go forth as a message which has the united authority of all parties in this country, and we feel that to all those Powers an enormous and unspeakable debt of gratitude is due.

The other point, which it is perhaps not less important to emphasise at this moment, is—the right hon. Gentleman made it, and I am only really re-enforcing what he said—that, the conditions being what they are, the further continuance of the war between the combatant Powers is an absolutely purposeless thing. Neither on one side nor the other is there anything to be gained by the prolongation of useless slaughter, and both parties, Turkey on the one side and the allied States on the other, ought to see, and I hope and believe they do see, that they have nothing whatever to gain by the continuance of the strife. Absolute impartiality and equity will characterise whatever decisions the Great Powers may come to in regard to the questions which they have reserved to themselves, and it is equally in the interest of both of the combatant parties that a settlement should be arrived at promptly, that the useless expenditure of blood and money should cease, and that they should realise on the one hand, in the case of Turkey, that she may still have before her a great future, in which she may, with the possession of the territory to the east of the line which the Great Powers suggest, secure the possession of Constantinople and the adjacent territory there, and, in Asia Minor, the infinite development of good government and material prosperity; and that, on the other hand, the Allies, secured as they will be, subject, as my right hon. Friend has said, to the Constitution of an autonomous Albania, and the decision of the Powers with regard to the Ægean Islands, will have, in the territory west of that line, an enormous addition both to their material and moral resources, and possibilities in the future to which it is not easy to assign any real limit. Under these circumstances, I hope it may go forth to all parties concerned as the considered judgment of the House of Commons, speaking with full authority as the representative of a united British people, that the time, in our opinion, has arrived when this terrible war, with all its catastrophe and devastation and waste, should come to an end.

The right hon. Gentleman the Foreign Secretary said that the object of the Government had all along been, and still was, to maintain the separate existence of Persia and to maintain it under a Persian Government. In my opinion and in that of men who know Persia intimately the policy pursued by the two Great Powers alluded to, Russia and England, during the last four or five years has been calculated, I do not say intended, to destroy the separate existence of Persia and to paralyse the Persian Government. This Debate to-day was inaugurated by the hon. and gallant Gentleman (Colonel Yate), who gave us a recital of a number of outrages and drew a terrible picture of the state of disorder in Southern Persia. I say deliberately that the condition of disorder that now exists in Persia is due directly to the policy of the Russian Government and the British Government, which have, during the last five years, persistently paralysed the Persian Government. There is no Government in Persia to-day, and there is no Government because Russia, backed up by England, has destroyed the Government. Then you turn round on this unhappy people and seek to destroy its reputation by reciting in this House a long catalogue of disorder and crime, which are the direct and inevitable result of the policy which has been pursued by this country towards the Persian Government. Before proceeding to make a few comments upon the extraordinary means by which this Debate was opened, I wish to say a few words upon the withdrawal of the Indian regiment from Shiraz. I asked the right hon. Gentleman to tell me the number of that regiment. He was unable to give me the exact number, but I think I recollect it being stated once as 400. I would seriously ask the right hon. Gentleman what steps he has taken to assure us that the march of these Indian troops through Southern Persia will be a safe proceeding and will not lead to further disorder?

If Southern Persia be in the position which is described by the hon. and gallant Gentleman, the withdrawal of the Indian troops, 400 men, would be a very serious matter. Suppose, in addition to the murder already recorded of one of the officers of this regiment, you have attacks made on this regiment, and other officers and men are killed, will not that be directly due to the condition of things which the right hon. Gentleman referred to, when the British expedition was sent to Shiraz? If it was sent to Shiraz, why is it now being withdrawn? Is the condition of things in Southern Persia so improved that the Indian regiment is no longer required there? As far as I can hear from different sources of information at my disposal, the condition of things in Southern Persia is worse to-day than it was when the Indian regiment was sent there. If the Indian regiment was necessary in Shiraz a year ago, why is it necessary to withdraw it now? I do most urgently press the Government to give the House some information as to what steps they have taken to satisfy themselves that the withdrawal of the Indian regiment from Shiraz would be a peaceable and safe operation. Southern Persia has always been somewhat disorderly, and the roads were never safe. The condition of things now existing is worse than anything that existed for fifty years until Russia and England signed the agreement guaranteeing the independence of Persia. From the date of that agreement things have gone from bad to worse. That condition of things is due in my judgment to the fact that these two guaranteeing Powers have adopted a policy which has com- pletely paralysed the Persian Government. The Government in Persia, such as it is, consists of the Russian Government, and has no prestige whatever to control its own people. The hon. and gallant Gentleman says in urging upon the Government the policy of British occupation of Southern Persia and the partition of that country—

I did not say that. I proposed to lend Persia British officers to help her to maintain order.

The last British officer you lent her was shot. I presume you intend to take some means to secure their lives and to protect them, and we all know what that means. It may not be specifically said in words, but the whole point of the right hon. Gentleman was clear and unmistakeable, namely, British occupation of Southern Persia and a partition of that country, and I say that the whole policy of the Government is drifting irresistibly in that direction. The right hon. Gentleman at the conclusion of his speech indicated clearly that that was in his own mind. He said that the time had not come to arrive at a final decision, and that he still had hopes that things would mend. I have listened to that speech every year for the last four or five years; but he said that however unwilling the British Government may be, and I quite agree that they are extremely unwilling to occupy Southern Persia, of course in the last resort some strong measure must be taken to put a stop to the present disorders. What prospect is there of any cessation of the present disorders? You have destroyed the Government of Persia, and you are pursuing exactly the same policy which for four years, in spite of the continuous hopes expressed by the Foreign Secretary, have progressively brought Persia from a condition of disorder and chaos to a still lower condition. What hope is there for a change for the better, so long as no change lakes place in the condition of the country? The hon. and gallant Gentleman says, "Look at Northern Persia. There order is maintained by 16,000 Russian troops." I do not see the point of that observation, unless it is to show that there ought to be 16,000 British troops in Southern Persia. It is said that order is maintained in Northern Persia by these Russian troops. I deny that.

I remember the time when the Foreign Secretary seemed to give the countenance of his great authority to the theory that order was maintained by the Russian troops in Northern Persia, but now he says that the only result is to maintain two roads only, and by English travellers who have recently returned from Northern Persia I am told—and I believe it to be true—that so far from maintaining order in Persia, the Russians have maintained and promoted disorder, apparently in pursuance of the policy of turning Northern Persia into a Russian province. What has been their record? Have we not heard details of the horrors of Tabriz, and if you go off these two main roads you will find that Northern Persia is in a state of disorder just as bad as Southern Persia. That is not all. Take one instance of the policy pursued in Russia by Northern Persia which has been brought under the notice of the House during the last few weeks. The younger brother of the ex-Shah, who has been in rebellion for more than a year, has been within the last six weeks at the dictation of Russia appointed, by the Government against which he has been in rebellion, Governor of one of the most important provinces of the whole of Northern Persia lying on the Caspian Sea, the very province in which his brother, the ex-Shah, would land if he returned, as we all believe he is about to return, to resume the throne of Persia.

What can be said of the Government who deliberately take a rebel in arms against the Persian Government and require that Government under threats to appoint him governor of one of the chief provinces, although the people of that province have threatened to revolt in case he is sent to govern them? The hon. Member when asked the other day what attitude the British Government took towards that policy, replied that they had information that the people of the province were very discontented and might rise in revolt in case this man were sent to govern them, but that the British Government would not interfere in the whole transaction. It is by a continual system of which this is an example that the Russian Government, by the policy of the last four years, have promoted anarchy and disturbance, not only in Northern Persia, but throughout Persia, by paralysing the Persian Government and by rendering any decent government of that country impossible. The hon. and gallant Gentleman alluded to letters which have appeared recently in the "Times" from its Teheran correspondent. I agree entirely that that gentleman is a most competent observer who is thoroughly acquainted with the conditions in Persia. These letters were extremely interesting, and I have studied them very carefully, but curiously enough I drew a wholly different conclusion from them from that which has been apparently drawn by the hon. and gallant Member. He alluded to the description given by Mr. Moore in these letters of the corruption and dishonesty of the Persian aristocracy and officials.

5.0 P.M.

That is quite true, and I have not the slightest doubt that the account is accurate. It is entirely borne out in the book of Mr. Schuster; in fact, you might put the two descriptions side by side and they tally exactly. But what was the Persian national movement which this Government and the Russian Government have crushed? It was the rising of the Persian people against the corruption of the officials and the aristocracy of Persia, who are, I fully admit, degraded and corrupt, and the people of Persia had risen against that corruption and were making a very gallant effort, naturally in the circumstances, of course, an effort beset with many failings, for every democracy in the history of the world, even in Europe, has had to pass through many failures before it succeeded in establishing a pure Government. The Persian democracy had risen against that system, and these two Powers stepped in and crushed that democracy, and they are endeavouring now to fasten on the necks of the people of Persia that very corrupt system which is condemned by the letters of Mr. Moore. And why? Because these Persian officials and a remnant of the old gang, who surrounded the throne of the ex-Shah, are subservient to Russia and are easily purchased by Foreign Powers. That is the great iniquity of this whole policy that has been practised by this Government, and it is useless for the right hon. Gentleman to talk of the desire of England to maintain an independent Persia when the whole policy of the last five years has been one continuous endeavour to destroy the effort of the Persian people to emancipate themselves from this long and great tyranny. I remember very well that some of us, two or three years ago, spoke in favour of this national movement in Persia. The hon. and gallant Gentleman treated us with great scorn because we thought that any Eastern people could carry out a revolution and get rid of old corruptions. I regard as rather absurd the high and lofty tone which is adopted by some hon. Gentlemen in regard to these questions. We in Europe did not bring about democratic government in a day; we did not bring it about in one generation; it took many revolutions, many mistakes, and much bloodshed to build up most of the democratic governments of Europe; and all I have ever pleaded for is, whether in the East or the West, wherever it may be, if there is any symptom of a desire on the part of any nation to improve its government, the Great Powers of Europe ought not selfishly to intervene in pursuance of their own interests and their own domination over a people in order to prevent their rising against the corruption of the Government of their country. The hon. and gallant Gentleman said that what we wanted for Persia was a strong and honest financial administration and a loan. This Persian democracy, which has been so sneered at and scoffed at in this House, the moment they got the power recognised—and I think it highly to their credit—that in consequence of their past history they were unable to set up a strong and reliable financial administration. And they did an extraordinary thing—they sent across the Atlantic to America and asked for a loan of an American Official to reorganise their finances. Anybody who takes the trouble to read Mr. Schuster's book will see that it is a most remarkable work on an attempt to revive and improve the government of a country. I am convinced that if Mr. Schuster had been left to carry out his work the Persian Government would have been restored to power, efficiency, and financial soundness.

We find from those carefully edited Blue Books furnished to the House that it was the British Government which suggested to Russia to drive Mr. Schuster out of Persia. Instead of strongly opposing such a policy, it actually turned out that our own Foreign Secretary suggested to the Russian Government that the British Government would have no objection if Mr. Schuster were sent out of Persia. Mr. Schuster was driven out of Persia, and since then, under the agreement between the Russian Government and the British Government, there has been nothing but paralysis and disorder in Persia. There is no force in Persia which can produce the results which the Foreign Secretary still professes to hope for. He and his friends, as they are now, the Russian Government, have destroyed all power in Persia to produce order and good government. For my part, I cannot understand why the right hon. Gentleman does not honestly face the situation and admit that this policy has but one inevitable goal, to which it is rapidly drifting, and that is the occupation of Southern Persia by England and the division of that country between England and Russia. This question is one to which great attention has been given in the House of Commons for the last few years. In my opinion, if it is rightly considered, it is a far more important question, so far as British interests are concerned, than that of the Balkans. Of course the Balkan question, with its attendant danger to European countries, has driven the Persian question out of the minds of the people of this country for the moment, but immediately European countries are relieved from the danger of European war then the question of Persia will again come into prominence. I submit that there was never a more immoral transaction than the policy of Great Britain and Russia with regard to Persia during the last five years. I wonder whether the people of Great Britain have realised what this partition of Persia means. As surely as you allow Persia to be partitioned, so surely must you set up conscription in this country immediately, because it would be absolutely necessary to double, or certainly to enormously increase the Army of occupation in India.

The moment you have partitioned Persia, the moment you have this railway, which, according to the statement made by Lord Morley in the House of Lords, the English Government are now contemplating as a probable contingency in the near future, the party now clamouring for conscription in this country will have an irresistible claim, and you will have conscription adopted here. It is perfectly ridiculous to go on the assumption that because at this particular moment the people of this country are all enthusiastic for an alliance with Russia—into which I wish most sincerely we had never entered—it will always continue. I look back over the last thirty years in this House and remember that it is only about seven or eight years ago when the feeling against Russia in this country was quite as impassioned as the feeling against another country has recently been. We were continually comparing notes about our Army with the Army schemes and the fleets of Russia. It is not much more than five years' ago when we were within a few hours of a possible outbreak of war with Russia, and no man can contemplate that our present relations with that country are going to continue for ever. Once you destroy the state of Persia you bring about the Russian occupation of Northern Persia, which indeed is already an accomplished fact. I recollect that for two or three years I put questions to the Foreign Secretary about Persia, in order to ascertain when Russia was going to carry out her pledges and withdraw her troops from Northern Persia. We were told at first that it would be a matter of months, and that they would be withdrawn immediately order was restored. Month after month the Secretary for Foreign Affairs said he had good grounds for believing and hoping that in the near future the Russian troops would be with-drawn. Of course, the Russian troops never have been withdrawn, and it was never intended that they should be withdrawn; on the contrary, their number is being increased, and great camps of Russian troops exist in Northern Persia, and those great routes which are kept open by the Russian occupation are maintained by permanent camps from which Russia has no intention of withdrawing her troops. When you consent to the occupation of Northern Persia, which is by far the most important, the richest, and most valuable part of Persia, you make of that country a Russian dependency, while Southern Persia is brought within the sphere of British influence.

The moment that is done, you will bring this country into a condition which it has never occupied since the Middle Ages, that of being coterminous with a great European military Power, the greatest probably in the whole world, and, the moment you do that, your whole policy of free military service disappears, and you will be obliged to have conscription in this country. What astonishes me in these matters is that the House of Commons allows all the preliminary steps to be taken, and listens to all the statements of the Minister for Foreign Affairs year after year, while it is perfectly manifest that by reason of what is taking place, we are rapidly drifting to a state of matters which will inevitably involve conscription. Supposing, say, in about a fortnight, the Indian troops, when being withdrawn, are set upon and a considerable number killed, what then? Why on earth were they sent there unless there vas some policy in the mind of the Government? The Russian Government has a very clear policy; the only policy the British Government, so far as we have been able to ascertain in the House of Commons, is to say ditto to the Russian Government, or sometimes make a feeble remonstrance and then back down. Some day, and that very soon, the House of Commons will be faced with a situation in which everybody will be obliged to reluctantly admit that a British expedition to Southern Persia is necessary. If that had been put fairly and frankly as a policy to the House of Commons, I do not think it would have obtained thirty supporters in the whole assembly. But it will be forced upon us as an inevitable consequence of the policy in which the House of Commons has acquiesced. What makes it the more tragic and more dishonest is that the policy has its root in the famous Anglo-Russian Agreement, of which we have heard so much, and the first article of which is that the two Governments mutually contract to defend the integrity and independence of Persia. They have not been maintained, and it is admitted by everybody, that from the day the Anglo-Russian Agreement was signed, the two Governments have never ceased to assail and destroy that independence.

I should like to take this opportunity, in the first place, to congratulate my right hon. Friend on the most welcome statement he has made with regard to the state of affairs in the Balkans. In every quarter of the House that statement was listened to with intense interest. And, in the second place, I would like to make a few remarks upon the question of Persia. I, myself, admit that the situation of Persia just now is a particularly black one. We are all agreed as to that. At the same time I am indeed glad to know that the Secretary of State is not going to listen to the demands which are continually being made upon him, both from that side of the House and in the public Press, that we should at once give up the policy which we have been pursuing to preserve and support as far as we can the existing Government in Persia, and proceed to occupy Southern Persia. I believe a policy of that kind to be utterly disastrous and a mistake. Though I agree with my hon. Friend opposite that the situation looks black at present, I still am one of those who hope, and indeed expect, that my right hon. Friend will be able to carry into effect substantially the policy which he laid down eighteen months ago in this House, and which to some extent has been carried out. I must say that, in spite of all he has told us to-day, there are still grave grounds for misgiving on some points on which he has not spoken at all. I would like, not in any very critical spirit but simply as one who watches most carefully the affairs of Persia, to ask for some further information on some of the events which have been going on there in the last few months. In the first place, I want to know does he still adhere and does the Government adhere to what they have told us with regard to the ex-Shah? No one can be blind to the fact that all through Persia there are rumours and there are signs of an attempt to get the ex-Shah back, an attempt which, if it succeeded, would mean fresh disorder and fresh bloodshed, and ultimately would probably lead to the occupation of the country and the partition, and finally the destruction, of Persia as a nation.

We were told the other day, in answer to a question, that the Russian Government would deprecate any attempt to get the ex-Shah back. The Russian Government said some time ago they would deprecate any attempt on the part of the ex-Shah to return to Persia, and yet, as we know, he did return under the very eyes of the Russian officials, and was only expelled with great difficulty and with great cost to Persia by the existing Persian Government. Therefore, I do not set much store on the deprecations of the Russian Government, and I would like to know whether the policy of the British Government is still as it was stated in the House of Lords by Lord Morley, and I think also very clearly here by my right hon. Friend the Foreign Secretary, namely, that their position is that under no circumstances will they recognise the ex-Shah as Ruler of Persia. I think those are the very words used by Lord Morley in another place. There is another point which has also been referred to by my hon. Friend opposite, and that is the question of Salar-ed-Dowleh. The position, I understand, of my right hon. Friend the Secretary of State, is that he desires in every way to support the existing Persian Government, and I would like to know if that is so, whether he has yet made any remonstrance to Russia with regard to the action they have taken in this matter of Salar-ed-Dowleh. Here is a man, the brother of the ex-Shah, who only a short time ago was actually in rebellion against the existing Persian Government, and who yet now is being sent against the protests of Persia, as I understand by the Russian Government, to be Governor of one of the principal provinces in Persia. Surely that is an outrageous proceeding if we are to attempt to preserve the authority of the existing Persian Government. I do think it lies with my right hon. Friend to show us that he has made some protest, at any rate, with regard to this action of Russia.

The only other matter to which I wish to refer is the question of a loan. We are told there is to be a loan of £400,000, being £200,000 each from the Russian and British Governments, and that there is to be an additional £100,000 to be lent by the British Government for separate purposes in Southern Persia. I am very glad that even this small amount is fast going to be carried out. I would like to have some further statement as to whether it is really going to be carried out within a reasonable time, because we have had so many assurances with regard to this question of a loan that one naturally becomes secptical. In the summer of 1911 my right hon. Friend stated in this House that it would be the policy of both the British and Russian Governments to see not merely that there should be a small loan, but that there should be an adequate loan to enable the Persian Government to restore order. That is still being deferred, and we have only these small amounts dribbled out from time to time to the Persian Government for immediate purposes. Lastly, I would like to know is there any prospect of the Constitution being restored? I know people think it almost absurd in the Present condition of Persia to speak of the restoration of the Constitution. I am confident, if my right hon. Friend's policy of preserving the integrity of Persia is to be made good, and if we are to have the checking of corruption, which everyone admits prevails, then it is essential, that in course of time the Constitution should be restored and the Medjliss again summoned. That is the only check we have on the corruption that is now destroying Persia, and it is the only sort of security we have that the Persian Government will to some extent rest on the will of the people. As things are no Persian Government will have real authority with the Persian people until they are able to hold a popular Assembly. Therefore, I do hope we shall have an assurance that the right hon. Gentleman has this in mind, and that he hopes to be able in time to see that the Constitution is restored. We on this side, and I think everybody who knows the danger to India, support as far as we can the policy which he has laid down to-day, and we are glad to know that he is not going to listen to the demands, the foolish demands, that have been made for the occupation of Southern Persia, but I must say that recent events and the recent action of the Persian Government on the two points I have mentioned have given rise to great anxiety.

I would not have taken part in this Debate at all were it not for the remarks of the last hon. Member and the hon. Member who preceded him, and I would like to say at once, and I think I can also speak for my hon. and gallant Friend (Colonel Yate) that no such desire for the effective occupation of Persia has ever been expressed by any responsible Member of the Opposition. Some of us may not be quite so hopeful as to the possibilities of the future as the hon. Gentleman who has just spoken, but no one suggests for a moment that at the present time the effective occupation of Persia by British troops would be either desirable or in any way expedient. I am glad that the Foreign Secretary recognises that the present position of affairs is extremely unsatisfactory. We have had British officers and British Consuls and British Vice-Consuls put in positions of the greatest indignity, and British traders have been harassed and the Southern routes closed in some instances for many months. That is obviously a state of affairs which cannot permanently go on. What are you to do? There are three courses to take. May I say that I think the speech of the hon. Member for East Mayo (Mr. J. Dillon) was not very helpful. The whole of that speech, as far as I understood it, was devoted to an attack on the Anglo-Russian agreement. That agreement, whatever some of us may have thought of it at the time, is un fait accompli, and you have got to deal with facts as they are. There are only three possible courses. You can either have an effective occupation of Southern Persia, which nobody wants, or you can have an effective reorganisation of the gendarmerie and the maintenance of order by the Persian Government with British help, or you can leave things simply to drift and trust to the establishment of some form of Government in Persia which may be able to exercise effective control. As far as I gathered, that is what the hon. Member for East Mayo would like to see done. That is not a policy which this House or the Government or this country could possibly consent to. You cannot indulge in a policy of laisser faire unless you take British traders away from Persia, and unless you are going to ask all the Consuls and traders to clear out.

Therefore, I think the only line, unless you are going to be driven into occupation, which at present is unthinkable, and the only hope lies in the effective reorganisation of the gendarmerie. It is extremely desirable that constant and unremitting attention should be given to this subject by the British Government, and that they should lose no opportunity of impressing upon the Persian Government the necessity for making the gendarmerie effective. I have not the slightest thing to say in derogation or in disrespect as to either of the distinguished Swedish officers who are at the head of the reorganisation of the gendarmerie. I believe they are both excellent and admirable officers, and I believe they are accomplishing excellent and admirable work, but, all the same, I cannot help agreeing with my hon. and gallant Friend that the assistance of men who have had practical experience in dealing with Asiatic troops would be a very desirable thing. I do not want the Government to lose sight of that possibility or absolutely to close the door to the lending of British officers or of British non-commissioned officers for the further reorganisation of this force. I hope that the Under-Secretary may be able to give us some further information as to the present difficulty in Bunder Abbas, and whether the recent disturbances of a week ago have been completely got over. It will be remembered that a British survey party was chased into Bunder Abbas, and there was a raid on them. The "Pelorus" landed some men there, and a state of considerable disquiet prevailed in the town. The hon. Gentleman promised when he got further information he would convey it to us, and perhaps it would be convenient for him to do so now. The only other point is as to the loan, which, I understand, is not by the two Governments, but by the British Government. I think £100,000 of that loan is being ear-marked particularly for administrative reforms along the trade routes?

Yes, on the trade routes.

I am very glad to hear it. I can only hope that anticipations will be justified. If they are not, we shall be face to face with a very serious position, and I think those hopes are more likely to be justified if the right hon. Gentleman lends an ear to the suggestion that he should not entirely close the door to the employment of British officers in the work of the reorganisation of the gendarmerie, which at present is being carried on by the two Swedish officers.

In reference to the remarks of the hon. Member opposite (Mr. Mitchell-Thomson), I think it would be exceedingly unfortunate at the present time to introduce British officers into South Persia with the idea that they should help with the gendarmerie. All that it could possibly lead to would be great rivalry and jealousy between the Swedish and the British officers, and the greatest trouble would inevitably result. I am very sorry indeed to disagree entirely with the hon. Member for Mayo (Mr Dillon) for whom, both for his head and for his heart, I have the greatest respect; but I am convinced that throughout his argument he is quite wrong about Persia, and also about what has been the result of the Anglo-Russian Convention. In my own mind I am sure that that instrument, and that that instrument alone, has preserved the independence of Persia. For 800 miles the Persian Frontier is dominated by Russia. At any moment Russia can close in on either side almost like a pair of scissors. Persia is entirely at Russia's mercy. Russia has not put that pressure on Persia which she might possibly have done in other circumstances, especially, I believe, because she has bound herself by this Treaty not to do so. The advantage which this Treaty has given us during the last few years is, I think, a small triumph of diplomacy. I quite agree with the hon. and gallant Member who opened the Debate as to what would happen if Russia withdrew from the North and we withdrew from the South, and Persia were left to her own devices. You would at once have an invasion such as he suggested, and on the South Frontier you would probably have an invasion, perhaps not at present, but very shortly, of Turks. One of the results of the Balkan War will no doubt be greatly to increase the Turks' power and ambition, which, no longer finding scope in Europe, will be developed in Asia. You may be quite certain that the Persian Frontier will be in a very dangerous position indeed. That is perhaps the most important point to consider.

I do not agree in the least with the hon. Member in reference to the Medjliss. The Medjliss was quite premature. That is all I say about it. The nation was not prepared for it. It could not be. Look at India. After all these years would we give India a representative institution in any way resembling the Medjliss which was established in Persia? We know that we could not. How can one possibly believe that an institution such as the Medjliss was designed to be could possibly at once take root in a country like Persia? Persia is a very mixed country. The idea that it is one people who claim to be represented is entirely foreign to the fact. In race the Turkish and the Arab portion and the real Persian portion are quite distinct, and they must be treated as such. In the South, for instance, we know that there are practically robber tribes, such as the Bactiari, and so on. How could they possibly be represented effectually, and, at the same time, how could the poor Persian people themselves possibly be protected against them? We know from his book that one of the great difficulties that Mr. Schuster had when the Bactiari came up to help him to send away the ex-Shah was to prevent them from looting the Treasury. Mr. Schuster was a most remarkable man, and he obtained his great power by absolutely unconstitutional methods. He at once put himself in opposition to the Ministers, and relied entirely upon the Medjliss, which had no effective power at all. He himself practically destroyed the authority of the Persian Government. Nevertheless, Mr. Schuster would have done most excellent work if only he could have got the 12,000 gendarmerie that he wanted. He was rapidly approaching the position of a splendid Eastern autocrat. If you trace his career you see that his extraordinary independence, his determination, and his power of accepting responsibility were just those characteristics which we associate with despotic power. From his book alone we know exactly what happened. We know also that at the end it was not Russia that actually discharged Mr. Schuster; it was the Medjliss itself. More than that, his own soldiers, the men who won all his victories for him, deserted him at the last moment.

Was there no pressure from Russia?

Suppose I say "No." Or suppose I say "Yes." It is of equal value. We do not know. We know what the feeling of the Russians was. They were certainly very hostile to Mr. Schuster, and we know that Mr. Schuster himself excited that hostility. He never even called on any of the Embassies for three months. He detached himself from everything connected with the government of Persia.

Does not the hon. Member remember that the Russian Government delivered an ultimatum?

I must point out that we are supposed to be criticising what the British Government have done.

I admit that I have been led away. I wished to refer especially to the position at Shiraz. I am very much afraid that at Shiraz the experiences that we have had of sending troops into a distant country will be repeated. We have done it many times. Two deadly massacres in Afghanistan do not deter us in the very least. Again we have sent a regiment into South Persia and allowed it to detach itself far from the coast. We hope now, and I think reasonably, that it is not too late to get it away safely. The whole of the gendarmerie are to go down to help it. Our consistency in wrong-doing in certain directions is a very serious matter. At the present moment there are people who want to send a similar force up into Tibet, where it might, at any time, be in a position of very great danger. This is the question I want to ask. It is all very well for our officers or our Consuls to be shot at and wounded, but what is going to happen if a German is shot at and wounded or possibly killed? Who is going to be responsible for that? How are we going to maintain our position if such a catastrophe occurs? That is really the danger we run in South Persia. We are maintaining a position with Russia, and I do not see how under certain circumstances we can hold to that position. There is very great danger indeed. There is one other question which perhaps concerns the bona fides of our Government more than anything else. It is in reference to the position of Salar-ed-Dowleh in the province of Ghilan. It is openly stated that he has been put there entirely by Russian pressure. What is the authority for that? What we know is that a very great friend of his and also of the ex-Shah has been brought back to a responsible office at Teheran, and the obvious inference is that this is the person responsible for putting Salar-ed-Dowleh, this old rebel prince, in this powerful position. I believe that the appointment has been protested against, and I hope that it will not be maintained. I will say nothing further on the important and interesting question of the Anglo-Russian Convention, except to repeat that I am convinced that it is solely because of that Convention that Persia has been able to maintain her independence. The question is, Will that be sufficient to enable Persia to be independent in the days to come, or will the Convention require to be modified?

As there are other questions to be raised this evening, I hope the House will allow me to give quite brief answers to the questions which have been asked. First of all, with regard to Bunder Abbas. It is a fact, as I have already indicated, that we have no further information. In this case no news is good news, and I think we have grounds for believing that the improvement in the condition to which I previously referred has been maintained, and that the danger has now ceased. I think when the hon. Member referred to more danger he connected the question of disorder there with the question of whether a regiment should be brought down to Bushire. Bushire is 400 miles away; therefore the two questions are not connected. As to the loan, it is a fact that a separate sum of £100,000, apart altogether from the joint £400,000, is to be advanced for the purpose of protecting the trade routes and for the administration of those routes. We believe that the arrangements, both for that loan and for the £400,000, are practically complete, and that the loan is really on the point of being issued. At any rate, we know of nothing which ought to delay the completion of the arrangements for the loan for anything more than a few days at the most. I do not want on this occasion to add anything to what has been said with regard either to the ex-Shah or to Salar-ed-Dowleh. Statements have been made, and I do not think it necessary to amplify them. As to the Medjliss, our position is that we have matters of greater urgency in Persia than the summoning of the Medjliss. If the Government show a desire again to summon the Medjliss to assist them in their task of restoring order and establishing a Constitution, they will not receive any sort of discouragement from us in that desire. The leading point in the matter is, as I stated six weeks ago, that, unless you have order, your task will not be helped by the summoning of the Medjliss, and that when you have order established the Medjliss no doubt will be of great assistance in fully establishing constitutional government. As to the policy of withdrawing the regiment from Shiraz, it was definitely stated to us at the time the regiment was sent that there was actual danger to the life of British subjects in the town and suburbs. The regiment was sent in response to representations to that effect; that position being no longer in existence, all our advisers unite in telling us, first of all, that there is not that definite danger to life which existed at the time the regiment was sent, and, secondly, that there is a reasonable prospect that the regiment can be safely withdrawn. Under these circumstances, the necessity for which the regiment was sent no longer existing, and the prospect of its safe withdrawal appearing to be quite favourable—and the position of the regiment at Shiraz having, as already stated, been rather uncomfortable—it seemed to us that the only thing to do was to withdraw the regiment as soon as possible. This accordingly will be done.

From Persia to the affairs of the Inland Revenue Department seems a rather long cry, but I make no apology for raising the question, because I have reason to think that there are in this country a very considerable number of electors who are extremely perturbed by the proceedings of the Inland Revenue Department, and particularly by the proceedings of that sub-Department which deals with the valuation of land. In calling the attention of the House to the Land Valuation Office especially, A.A. (page 49 of the Estimates of the Revenue Departments), Vote 2, Class II., I desire particularly to direct attention to matters of administration which were briefly, and, as I think, quite inadequately, dealt with during the two Debates which have taken place—and which will be within the recollection of the House—on 29th January and on the 11th of this month. The House will remember that attention was concentrated in those Debates on what is now the notorious Lumsden case. I do not propose to trouble the House by traversing the whole history of that case and the morals which are deducible from it, but in view of the, to us, extremely unsatisfactory reply of the Financial Secretary of the Treasury to an explicit series of questions which were addressed to him by my hon. Friend the Member for the Sleaford Division, I think it desirable to refer again, not to the facts of that case, but to the reply which I venture to say was not an answer, for the purpose of emphasising the fact that it is of very great importance to the building community of this country that we should have a much more definite answer on the question than we have succeeded in obtaining from the Government. We have no quarrel on this occasion with either the Finance Act or with the judgment of the learned judge in the case. We assume, at any rate to-night, that the Finance Act is perfect, and that the judgment is perfect law. We are not questioning either; but we are questioning and challenging the action of the Government, and particularly of the Inland Revenue Department, in the series of events of which that action is the sequel.

What we were led to believe, those of us who were inside the House of Commons, and those of us—and I was one—who at the time of the passage of the People's Budget were outside the House of Commons, by a perusal of the debates and the speeches made outside the House, was that under no circumstances was Increment Duty to be raised on anything except the increment in the value of land. It was most expressly laid down by speaker after speaker, official and unofficial, that what the Government of the day were after with their Budget taxation was the taxation of what was then called the unearned increment. To deputations and to individuals the Chancellor of Exchequer by speech and in writing repeatedly and explicitly pledged himself that there should be no taxation of the brains and skill of individuals, but that the taxation should be directed to the increment of value which was unearned. Now, for the first time, the country is made aware of the fact that the Budget permits, what is was not anticipated it would permit, the taxation not only of the unearned increment of land, but of fortuitous windfalls and of monoply value. I would call the attention of the House to the fact that whereas the case as laid before the learned judge in the Lumsden case was that this was a peculiar case of windfall, the official defence put forward was that it was a case of monopoly value, and as such was subject to taxation—a rather curious commentary! But whether the defence be that this was a case of windfall or whether the defence be that this was a case of monopoly value, it is not for us on this occasion to discuss the broad general principles whether either monopoly value or windfalls are proper or improper subjects for taxation. This, however, I desire to point out to the House—because it has not been said, I think, here before—that under the present administration of the law both monopolies and windfalls are subject to taxation, quite apart, and outside, and beyond this new land taxation. As everybody knows, the biggest case of practical monopolies is the case of a monopoly or partial monopoly in the sale of alcohol, and this is subject to very severe taxation in the form of Licence Duties. The case of the taxation of windfalls is more remarkable, and less known. It is not, I think, generally known that astute collectors of taxes and departmental officials are always on the watch for cases of sales and resales of land and houses where profits are sometimes made, and whenever they can establish a case of a profit being made by the sale of land and houses, they treat it as in the nature of a windfall, and they try, and generally succeed, in obtaining from the person who makes that profit a contribution towards the National Exchequer in the form of Income Tax, Schedule D, I think. So that those particular forms of unearned increment, windfalls in particular, are already taxed, and taxed heavily.

I want to know, and I hope to-day that we shall have some information on the matter, whether it is the practice of the Inland Revenue Department to tax windfalls which arise, not out of the purchase and sale of land and houses, but windfalls which arise out of the sale of stocks and shares? I am particularly anxious to know that, and I hope we shall have a definite and clear answer to that question. My grievance against the administration of the Inland Revenue Department is not as regards the series of proceedings, for example, which led up to this Lumsden case, but I also want to emphasise the current series of grievances which are day by day brought to the notice of Members of Parliament in the administration of the Act, and particularly the recent cases of the rushing tactics of the Inland Revenue Department in attempting to gather in the Undeveloped Land Duty, without, in many cases, the valuation having been made or served, and without, in other cases, the valuations have been settled. It is a remarkable thing that in order to keep, or to get, within the four corners of the last Finance Act a frantic endeavour is being made to collect no less than four years' arrears of Undeveloped Land Duty. Unless apparently the notices are served by the end of this month the first of these four years will be lost to the nation. I do not blame the Department for doing their best to collect their taxes, but I do blame the Department for the methods, I think unconstitutional, which they are using in order to make that collection secure. In the rush and hurry of their proceedings they are most deliberately neglecting the features of the Act which refer to the rebates and allowances, which are explicity set out. They apparently are absolutely ignoring these, and leaving it to the unfortunate landowner himself either to suffer the loss or to put in a claim, if he has time to make it. There are a whole series of allowances which may be claimed if only the unfortunate landowner is alive for the claims to be made. In particular it is known to few, not to everybody, as to the claims which can be made in respect of land which was in agricultural occupation where the notice of termination of tenancy could not be given in a certain time.

6.0 P.M.

I would also refer to the very important provision which has been made, and advisedly made, in the Act as regards the development of such property, as the House will remember, that for each £100 spent in certain forms of development one acre of land is freed from Undeveloped Land Duty. But the House may not be aware, although some individuals in it are unfortunately aware, that it is apparently the practice of some of the officials of the Inland Revenue Department not to allow, first of all the area of land occupied by the roads which are necessary for development, and, secondly, not to allow for the value of land occupied by the roads. This is no trivial matter in the case of suburban land or land which is going to be covered very closely with houses. A simple calculation will show that no less than one-fifth of the area of the land may be taken up by roads. Accordingly, if one-fifth of the area is occupied by roads, it seems to me a very great hardship, in view of the Act, that one-fifth should not be allowed to the landowner who gives the roads, develops them, and leaves them as open spaces for the benefit of the public. Secondly—and this, I think, is a grosser case still—the Department is attempting to levy Undeveloped Land Duty on the area occupied by the roads as well as on the land which adjoins them. I have cases here which I shall be delighted to hand over to the officials if any of them doubt my statements. They happen to be cases in which I am personally interested, and therefore I know the matter at first hand. The gravest and worst feature of these rushing tactics of the Department is that in order to lodge these claims before the end of this month—of course many owners are very neglectful—they have deliberately omitted to call the owner's attention to the fact that these allowances are made, and can be claimed. Many owners will be, and are perhaps already, out of court because within the limit of time for making objections they have failed to lodge claims. Therefore, in the administration of the law, as regards Undeveloped Land Duties the Department is acting, I think, in a most griping and grasping manner, and without consideration of public morality and public fairness. I want to say a word or two with regard to the general position of the young gentlemen who are engaged as valuers by the Department. I am not going to say a word against their ability or politeness or integrity, but I do say a word, from intimate knowledge, against their employment as valuers to settle delicate and difficult questions of valuation in districts to which, in most cases, they are absolute strangers. These young men are sent down into districts which, until they came into them as the official valuers of the Government, they probably had never seen, and they are asked to make valuations which are retrospective for not less than four years. Let the House picture to itself a valuer sent down to a remote district, to which he is a total stranger, where he has to imagine the condition of things as regards a piece of land, not as it is now, but as it was four years ago. Of course, he must suppose a valuation, without any knowledge whatever of the local conditions, in order to make any valuation which is worth the paper it is written on. As an instance which came to my knowledge only this week, I might relate the case of a valuer who was sent down to the Isle of Wight to make a provisional valuation at a country place called Snowdon. He made the valuation, and brought out the site value of a certain piece of leasehold property at a provisional value of £62.

I ask the House to remember that he put the provisional value of the site, on which the house was, at £62. The owner objected, not to the £62, but to the total value, and other figures of the valuation, and then the valuer, with a very laudable desire to please, immediately altered that value from £62 to £152, without giving any reason at all or without any claim being made. Now a valuer who, just in order to please the gentleman with whom he has to settle the valuation, jumps from £62 to £152, is surely a valuer of whom one ought to be aware, rather than a valuer whom one ought to trust. In this instance, and it is only one of many that have come to my knowledge, you have the extraordinary discrepancies, between the first valuation and the amended valuation, when the valuer's errors have been brought to his knowledge. All I say is, that if the Government imagine that they are getting the true valuation of the land, as was over and over again promised, they are mistaken, and they will find that out to their cost. And I ought to say, and it is very important that it should be said that throughout the country, from my own experience, as a practical man, there is a growing feeling of dissatisfaction and unrest in the building trade with regard to this question of valuation. I do not hold any brief for the builders, but I am sure every practical man in this House and outside will bear me out in the very moderate statement of the case which I am going to make. What has happened, and is happening to-day all over the country in consequence of these valuations is this:

In the first instance, the speculative builder, who used to be willing to take up land and speculate in building in advance of the times, is no longer able or willing to do so. His particular business, as a speculative builder, has been brought practically to a standstill, and for two reasons: The first, as the Lumsden case shows, is that his profit may be taken away from him; and, secondly, because of the difficulties of obtaining borrowed money, which is absolutely essential to his business. People who have money to lend, and were formerly willing to lend it on mortgage for speculative building, have now, in many cases, withdrawn these loans, and are now refusing to lend builders money upon any terms whatever, and the result is the builder cannot borrow money except at a very extravagant rate of interest and with very great difficulty for the purposes of speculative building. Moreover, if he has got money of his own sufficient to enable him to launch out in a small way, and to buy land and develop it, he is afraid to trust his money in such risky speculation, because he does not know how legislation is going to affect him in the future. The House has the evidence of the Master Builders' Association, of the Chambers of Commerce, of the various societies and organisations, such as the Auctioneers' Institute and the Surveyors' Institute, who are non-political bodies, and who have all pronounced against the fear and the absolute danger that underlies this legislation in the mind of the builders, and I say the time has arrived when a much fairer administration of the Act should be the order of the day of this Government, or else that the Act itself—I am not allowed to go into that matter now—should be drastically amended, and a fair-measured justice should be meted out to all those directly or indirectly concerned in the management of land.

I want to pursue this subject a little further than my hon. Friend has taken it, and to address myself almost entirely to the agricultural land aspect of this question and to the methods which are now employed for making valuations upon agricultural land. The other night, on the Debate on the Address, we asked the Government if they would introduce fresh legislation, because we thought that the Budget legislation of 1909–10 was not being carried out according to the intention of the House when it was passed. We did not get very much satisfaction out of that, and so now I propose, as the only way in which we are in order in discussing this question to-night, to criticise the Government because of their administration of the Act and the methods they are adopting in valuing agricultural land. I should like to urge upon the Government, in the first place, to desist from the methods they are employing in administering this Act of Parliament by spending thousands of pounds of the taxpayers' money in an absolutely valueless and fruitless manner. They are not only spending this money uselessly, but they are inflicting upon the owners of certain classes of property thousands of pounds more expenditure in appeals against the way in which the valuation is being carried out. I know it is a very common practice for people to think that all the owners of agricultural land are not only owners of large quantities, but are very rich men into the bargain, and that consequently there is really no excuse whatever in asking Parliament to help them to defend their cause in any way whatever. Really that is not the case, and when we are discussing this question of the burdens upon agricultural land we must admit that there are small owners as well as large owners, and that there are an enormous number of people in this country, whose means are invested in, and derived from agricultural land. A Return which was given by the Commissioners of Inland Revenue for the year ending March, 1912, as to the ownership of land and houses shows this, that of the property of persons in the United Kingdom dying worth between £500 and £1,000, nearly 40 per cent. consisted of house property and land, whereas of persons dying worth between £50,000 and £70,000, only about 16 per cent. of their estates consisted of land or house property. If to the small estates were added the sums invested in provident, friendly, insurance, and building societies, it would probably be found to be up to 50 per cent., or one-half of their fortunes were directly or indirectly in land and houses, and all these are directly interested in the cost of the valuation of agricultural land, and the liability, which we now find, of Increment Duty being charged upon agricultural land.

There are really two points worth considering: First of all, the methods of valuation; and, secondly, that since the White Paper instruction, we find that agricultural land is now, though it was supposed not to be before, liable to charges of Increment Value Duty on the occasion of sale. The other night, when a short reference was made to the agricultural land part of this question, the Secretary to the Treasury made some rather extraordinary remarks. I am sorry, as I had also to say on that occasion, that we have not the Chancellor of the Exchequer with us this afternoon. Whenever this question is raised the Chancellor of the Exchequer is never here. I fully recognise that the Secretary to the Treasury is a very apt disciple of the Chancellor of the Exchequer, and sits at his feet, and very often follows the methods he employs in his utterances in this House. But still, I should like, for another reason, that the Chancellor of the Exchequer was here, because not only when he introduced the Budget, but in many statements he has made since, he over and over again declared that Increment Duty is only to be charged upon the bare value of the land, and he has never denied that. On the other hand, the Secretary to the Treasury speaks with a different voice, and has denied that that was ever the intention of the Act, when passed into law, or is the method by which Increment Duty is charged at the present time. When there was a discussion on the 20th June last year on the question of the appointment of an Expert Committee to inquire into the methods of valuation the Chancellor of the Exchequer, in answer to my hon. Friend the Member for Sleaford, who asked that the terms of reference should include an inquiry into all the methods of valuation and all the valuations that had taken place, the Chancellor of the Exchequer said:—

"I suggest as terms of reference to inquire into the working of the valuation prescribed by Section 26, Subsection (1), Part I. of the Finance Act, 1910, and report whether any modifications of machinery for carrying out the valuation are necessary, and if so, what modifications?"

In reply to my right hon. Friend the Member for East Worcestershire (Mr. Austen Chamberlain) the right hon. Gentleman said:—

"I think the right hon. Gentleman will find that covers pretty well all the points he raised. I framed the reference with a view to meeting his demands and I think he will find it will do it. They can consider all cases such as those mentioned by the hon. Member and other cases which had been mentioned from time to time by the hon. Member and others."

That implies that this Committee might inquire into all these methods of valuation. Later in the same debate the Secretary to the Treasury comes along and says:—

"I do not know how we can refer to such a Committee, the question whether deductions in agricultural land laid down in Clause 25 should continue to be different from the deductions in the case of urban land. That is a question of policy and a question which has been decided by the Act."

That is directly contrary to the Chancellor of the Exchequer's statement when he promised the terms of reference of this Committee should include an investigation into all these methods of valuation. When we were discussing this question the other night I made some reference to the injustice that would be done to the agricultural interests by the methods which were being employed, and I said that we really had no notion as to what this valuation was taking place for or what was its object. I said that no doubt there were certain Members of this House who wished to use it for other purposes than those defined in the Finance Act of 1909, and the Secretary to the Treasury said if you want to do that it will be quite easy to alter the methods of valuation. The right hon. Gentleman said:—

"The Increment Tax does not tax agricultural land, and the Undeveloped Land Tax does not tax agricultural land. When my hon. Friend (Mr. Wedgwood) says we want the valuation for another purpose, there is no difficulty at all, so soon as the House has made up its mind what purpose it wants it for, in adjusting the valuation for that purpose."

That requires legislation.

I do not deny that. I was only endeavouring to point out that the Secretary to the Treasury seems to think we can employ all sorts of methods for arriving at the valuation of land according to what purpose we want to use it for when we have arrived at it. The Chancellor of the Exchequer has always adhered, at least he has not contradicted it, to his original statement that Increment Duty should only be charged on the increased value, the bare value of land; therefore we were under the impression that in the valuation of agricultural land the thing to be arrived at was the bare value of the land, or, in other words, the site value of that agricultural land. The Secretary for the Treasury, in the Debate the other night, said:—

"We are finding the real site value."

And then he went on to say:—

"We are making no deductions,"

Surely in order to arrive at the site value it must be necessary to make some deductions, and to take into consideration the improvements that have been made on that land, so as to arrive at the bare value of the land, or, in other words, what we understood when the Finance Act was passed the site value would be. Under the Instructions which have been issued by the Treasury you cannot any longer maintain that agricultural land is not liable to Increment Duty. Recently the Central Chamber of Agriculture, and I believe very nearly every chamber of agriculture throughout the country, has passed a resolution protesting not only against the methods which are being employed for the valuation of agricultural land, but also protesting that now Increment Duty can be charged on agricultural land. The Central Chamber of Agriculture, in their report on the method of ascertaining site value of agricultural land under the Finance Act, made the following statement:—

"An attempt has been made in the Act to exempt purely agricultural land from this duty, and Section 7 provides 'Increment Value Duty shall not be charged in respect of agricultural land while that land has no higher value than its market value at the time for agricultural purposes only.' These words to a layman appear to be quite definite, and to fully protect purely agricultural land from Increment Value Duty; but under the White Paper instructions issued by the Inland Revenue Commissioners, and laid before the House of Commons, the plain meaning has been nullified, because these instructions state that if the land is sold for more than it is worth, Increment Value Duly is payable, and, further, such Increment Value Duty is charged, having regard to the datum line of the assessable site value as on the 30th April, 1909, and as fixed by the provisional valuation made under Section 25. If the White Paper instructions are upheld by the Courts the effect on purely agricultural land will be that if it is sold for more than its worth Increment Value Duty will be payable on the rise in purely agricultural value, and thus the plain words of Section 7 will not have the effect they appear to have to the lay mind."

That is not understood generally in this country, but it is the direct effect of the instructions on the White Papers which have been issued by the Treasury, and which are in direct conflict with the intention of the Act of Parliament when it passed through this House. I quite agree with what the Secretary to the Treasury said the other day, namely, that agricultural land as agricultural land at this moment is not liable to Increment Duty being charged upon it, but the moment it exceeds its agricultural value as agricultural land it is liable to Increment Duty, and there at once comes in the question of the methods employed in valuing that agricultural land, because you arrive at an absolutely untrue site value of that agricultural land, and when Increment Duty does become payable, if it arrives at a value above its agricultural value then, of course, the value put on it under these methods comes into operation. This really is a very serious question. Agricultural land has suffered under a long period of depression from which in recent years only has it emerged. It is at the present time an improving industry and is doing fairly well. People are being attracted to it, and therefore this is the worst time of all to hinder that progress by legislation, administration, or any other methods which would create any want of confidence in that industry. Naturally, I shall be told by hon. Gentlemen opposite and by others that there is no lack of demand for land, and that it is very readily sold. It is quite true that since the Finance Act was passed a large amount of agricultural land has come into the market, and large estates have been split up, and the tenants on those estates have readily purchased their farms. That is quite true, but the tenants have not purchased those farms because they wanted to buy the land, but they have done so to safeguard themselves for fear the land might be disturbed by anybody else purchasing that land, so that it is not really a ready purchase on the part of the tenants. In criticising the methods of valuation, which are now being adopted by the Treasury, I should like to quote one case to show the absurdity of the amount of money which is being wasted on this process. There was a case the other day of a farm in Lincolnshire at a place called Wrangle. The valuation of this farm was brought before the Referee. In the course of cross-examination the gentleman who had been sent to value this farm for the Government made this statement. He was asked:—

"Did you not make a valuation when going round the farm?"

and he replied:—

"I was in possession of the rent as a whole. I knew the rent was £280, and with that knowledge I applied twenty-six years' purchase to the net rental."

The method employed by this valuer according to his own admission before the inquiry held by the Referee was that in arriving at the site value of this farm in Lincolnshire, all he had to do was just to ask the rent of the farm, and knowing what the rent was he put twenty-six years' purchase upon that, and that constituted the total value of this farm. I shall probably be told that the Referee agreed to this system of valuation. It is quite true that he did, but if that is a satisfactory arrangement to arrive either at the total or the site value of a farm, what is the good of appointing hundreds of valuers at enormous salaries and spending £600,000 a year of the taxpayers' money when you could get the same result by going to the rate-book to obtain the assessable value of the farm, and, after obtaining the rent, put twenty-six years' purchase upon it, and there you have all you want. Yet the agricultural industry is put to this enormous expense in appealing against these valuations, and the taxpayers are put to the enormous expense of supplying the salaries of these paid officials to go up and down the country. I do think we ought to have some much more definite statement with regard to the methods which are now being employed for the valuation of agricultural land and as to whether under this White Paper instruction agricultural land is not now liable to Increment Value Duty which it was not considered to be before. If we can get some definite statement on those points from the Financial Secretary to the Treasury, in the absence of the Chancellor of the Exchequer which we so much deplore, we shall have done something at any rate to convince agriculturists who are getting very uneasy with regard to these questions that things are not so bad as they thought.

All taxation should be certain, and I know nothing more uncertain than the result of this Increment Value Duty. There are any number of lessees who have received valuations, and I defy them to say what is really the value of their interest in their lease. Nor can they say at what price they would be able to sell. I do not think the freehold agricultural holders have had much to complain of. This tax was introduced on the dictum of John Stuart Mill, but he never suggested or thought that agricultural land should be left out. I never suggested that a man who had bought an estate at a larger price than the value worked out in 1909, nor would it be right that he should pay Increment Duty if hereafter he sold it at a less price; but during the last ten years or so there are many men throughout the country who bought land, say at £10,000 and have been able to sell it at £20,000. [HON. MEMBERS: "Not agricultural land."] Yes, agricultural land; I know one estate which was bought by a man who sold it for double the price he paid for it. If agricultural land rises in value and it is sold hereafter at double the price a man has paid for it, or at double the value he put upon it when he inherited it, I see no reason why it should not pay Increment Value Duty. There is one case in which agricultural land is injured. We will assume a man in 1909 had 100 acres which were valued as agricultural land at £30 an acre, or £3,000 altogether. He sells it for agricultural purposes to B at £50 an acre, or £5,000 altogether. Hereafter B sells it to C, for building purposes, for £100,000. What happens? B has to pay increment, not from £50 an acre, but from £30 an acre; but when A sold it to B he paid no Increment Duty, because it was for agricultural purposes. When B sells it to C for £100,000 he has to pay Increment Duty from the datum line. If that be so—and I contend it is so according to the Act—I say it is wrong and cannot be justified.

With regard to urban land, when the Valuation Bill was brought in for Scotland by Lord Shaw he said that all it required was another column in the return; and before the Select Committee in 1906 Mr. Harper, who is always cited to us as a very great authority, undertook to value the whole of London for £25,000. Instead of that we have got an extraordinary system of valuation, going into all sorts of questions. I have seen surveyors' returns with about forty columns reaching about a yard, and all sorts of things valued, such as trees and shrubs, goodwill, and things quite unnecessary to have been valued at all. It comes simply to this: A valuer makes a number of calculations, and he sends in a value. I am speaking from personal experience. I have gone to the valuer in every case and have got him practically to admit that his figures are wrong, and he has accepted my figures. The other day a man wrote to me from the North of London. He said, "I am not known to you, but I see you have taken some interest in this question, and I would like to tell you what the valuer said to me about some property which I bought. I bought twelve cottages and paid £225 each for them, subject to a mortgage of £150. I sold one last year for £235. The valuer valued them at £170. I wrote to him protesting, and said they ought to be £225. He said no, but he would not mind stretching it to £190, and he put them at £190." I referred this owner to the Act, under which he could go back as having bought within three years. Three months afterwards he wrote to me that it was all right. This valuer did not seem to inquire. Why did he not know when the man bought? The moment the mortgagees saw the valuation they said, "£170! That is no security for our £150; we will call in our mortgage." That happens constantly.

This valuation, as a matter of fact, is based on a fetish, and the fetish is a site value. What does it mean? It means, so far as I can make out, that it is introduced as a sort of sop to the single taxers. They have a notion that somehow or other you ought to relieve buildings from all taxation and only tax the land on which the house is built. Therefore, the whole of this Section is put forward with these very intricate calculations. It is, as I described it before, an algebraical equation. The site value, so far as urban property is concerned, has really no existence apart from the building. What is a site value? It is the value of a piece of land which can be acquired for a building, and the governing factor is the rent which the building put upon that site will produce. A man wants to buy a site in a city for a speculation or investment. His valuer would say, "Here is a piece of land, what sort of building can I put upon it? I can put a building so many storeys. There is a local demand for rents at so much a room. How much rent will the whole fetch? So much. What would it cost to build? So much. Interest on that? So much. I can therefore afford to give so much for the site." The building which is capable of being put upon a particular site dominates the site value, and you cannot get away from it.

In urban property the building, whatever it may possibly be, dominates the site value, and therefore this attempt to eliminate the buildings altogether and to get at this extraordinary thing which is called an original assessable site value is costing the country millions. Mr. Harper said it would only cost a few thousands, and it need not have cost more than a few thousands. Why should you not have said to every man, "Send us particulars of your property and tell us at what you value it? We will not undertake to accept it; we will check it, just as we do the valuations sent for probate purposes, and we will reserve to ourselves the right to challenge it." It has come to that now; that is what they are doing. After all their calculations a man, if he knows what he is about, simply goes and says, "That is wrong," and he shows why it is wrong. There are not many appeals because they have practically given in to the demands of these people who understand it to have them put at a proper valuation. The Scotch valuers have gone strictly and literally on Sections 25 and 26; they have worked out that problem algebraically and have come to a great number of minus quantities. The Scotch Courts, however, have decided that a minus quantity is a figment and that you cannot have anything to work less than nothing. What has my right hon. Friend done in England? There are no minus quantities in England. What they do is this: Take the case of a ninety-nine years' leasehold with a ground rent of £15. The ground landlord could sell that at say twenty-two and a half years' purchase = £337 10s. To the lessee however the valuers may value the ground rent in the return as only £250, so that if the lessee sells the lease for anything larger than the gross value in the valuation, they assume at once that it is the ground value that has risen. Although it has risen, it may not have risen up to the point of the real value which they have assessed against the ground landlord. Still you have to pay on the rise because the value of the site has risen in the meantime, only it has not risen to the amount which he is annually paying. I say that is wrong.

Would the hon. Gentleman mind trying to make his point a little clearer to us? I am sure he will recognise that I do not intend anything discourteous. What he was saying interested me very much, but I do not think I have grasped the particular case he has made, and I would ask him to be good enough to explain it a little more.

I admit it is a little technical.

I have always understood that the valuation is not made separately upon the leaseholder or freeholder, but must be made under the Act as the value of the fee simple in possession of the owner. That is one difference. Will the hon. Gentleman tell us how a separate valuation can be served upon the leaseholder and another upon the owner? That seems to me to be extraordinary.

What I do say is this. Say you have got a man paying £10 ground rent. They assume in the valuation that the man ought not to be paying £10 ground rent, because the adjacent property, if he now took it, could be got for £5; therefore, that the value of that ground is £5 per annum instead of £10. That man is paying £10. It is worth £10 to him for ninety years, and surely if a man has got to pay £10 for a piece of ground for ninety years, it is impossible to say that that piece of ground is not worth £10 a year. Instead of that, they say it is only worth £5. That is exactly what has happened in Scotland. They said, therefore, that there was a minus £5. The Scotch Courts said "No; if it is not worth more than £10 to the lessee, you must take that at £10 and nothing less." Instead of that the valuers say £5, and they bring out a minus quantity. They say that the ground rent is worth so much less. Therefore if a man sells a leasehold for a little more money than they value the whole at now, they say, "That is an increase on the ground value," although the ground value has not come up to the price winch the man has paid, and has been paying for it up to that time. That is the position. With regard to these minus quantities, one can only hope that the Treasury will see their way to instruct their valuers to treat all ground values on leases at the value which the man pays, and has to pay, especially if the period goes for thirty or forty years. Everyone knows that a reversion at the end of seventy years is worthless.

Another thing which I wish to mention relates to Undeveloped Land Duty. Section 16 of the Act provides that where a man has expended so much on a road or sewers—say, £100 per acre—that that land to that extent is free from Undeveloped Land Duty. There is a case which I have in my mind. Under a scheme of a local authority a man, instead of building on a 30 ft. road, agrees with the council to give up so much more land to them, and to widen the road by 20 ft. to 50 ft. One would naturally think that that would be treated as expenditure on the road. A man makes a road or gives the land which is of that value to widen the road. So far as he is concerned, it need not necessarily be widened, but there is that expenditure of £100 per acre. They say, "It is not the same thing at all, and therefore we do not relieve you from Undeveloped Land Duty, notwithstanding the fact that you give £240 on two acres, which is £120 per acre." They allow you nothing for that. I think that is against the spirit of the Act. What I object to is that, whatever the Inland Revenue people may say, they are deliberately trying to value the land so that it shall be certain to attract duty. I have been forced to that conviction that they are deliberately trying to attract duty by undervaluing. I will give the House another case dealing with the element of cost, the absurd cost that this valuation is implying. It was a case, in which I was acting myself, of an improved ground rent. They were certain clients of mine. They had about fifteen houses, and each one of them had an improved value. That is to say, the ground rent was £25, and their improved ground rent was £25. The tenant had bought the house for several thousand pounds subject to a ground rent of £50. My client had to fill up the forms or I had to do it for him and charge him. What earthly increment can there be on an improved ground rent? He receives £25 extra every year until the lease is out, and when the lease is out he has nothing more to do with it. I can understand the value of that going down, but in no conceivable circumstances can there possibly be an increment.

They charge it upon the buildings.

No, he gets £25, and under no conceivable circumstances can he ever get any more.

Increment has been charged upon the value of the building, and that would cover it.

There cannot be an increase upon it. The building has nothing whatever to do with it. It is the assessable ground value. All these intermediary lessees throughout the country; there are thousands of them; if you take Regent Street you will find three or four sub-lessees to many of the houses; all these men have gone to a surveyor and agent and have been put to the expense of being joined in the valuation. I myself communicated with the surveyor and I said to him, "Can you see any circumstances in which there can possibly be an increment to my client?" He said, "I admit I do not see it at all." I said to him, "What on earth is the use of putting us to all this trouble in the filling up of this form?" As a matter of fact the whole thing was perfectly simple. We could have had the valuation, and it would not have cost one-tenth of the money. It could have been done by now, and we would have known what was going to take place. I think that the Government ought to set about remedying this irksomeness, which has been felt throughout the country, on this particular subject. It is quite true there is more building going on just now, but that is in the heart of towns. There is no more building, there is ever so much less building, of small property. No man will be such a fool as to put down a penny-piece upon houses and land in the suburbs. When you remember that there are 80 per cent. of the people living in hired houses, you have got to find people who will put forward money for building houses. That is the difficulty. There is more building going on in London, but it is among the big banks; it is not workmen's dwellings or the poor class of property at £30, £40, or £50 a year rental. There is very little building of that kind, and you cannot blame a man for not doing it. If you are going to say to a speculative builder, "You are not going to make a sufficient profit on the land at all; you will have to look for your profit on the building," he will say, "Then I will have nothing to do with it." Fancy a man relying upon a wasting subject for his profit! He would be a foolish man to do it. He would not do it. He must rely upon making some profit upon the land by buying it wholesale and selling it by retail. If you do not allow that, if you worry him with this Undeveloped Land Duty, so that he does not know whether he is or is not likely to make a profit, there will be no investment in that security. That is the kind of security which is very necessary for extension of building operations, not only for the working classes, but for people above the working classes, who never have yet, and never will I believe to any large extent, invest any money in the houses they occupy. There are 80 per cent. of them now. If the houses that men occupy were their own, it would be a simple matter. The whole of this Act has gone upon the principle that the houses are their own. They have forgotten the man who buys wholesale and sells by retail, and until it can be shown that this business means a profit no more of it will go on.

The great increase and the alarming proportions of this Vote require that we should examine it in this House. The expenditure last year was something like £530,000, and the Estimate for the coming year is in round figures £620,000, about £100,000 more than last year. It will be interesting to see how this increase is made up. I find that in respect to salaries, wages, and allowances £553,000 are estimated to be expended this year, and last year the expenditure was £477,000. This year £76,000 more will be spent on salaries, wages, and allowances. With regard to travelling and subsistence allowances, last year £30,000 was paid and this year £47,000 is estimated, an increase of £17,000. In such a detail as the cleaning and taking care of offices the expenditure is to be £1,870 more. In miscellaneous expenses £3,500 more will be expended. The Estimate for the coming year is £630,086, or a total increase of £99,000. I do not find any item for rent or office expenses, other than the cleaning and taking care of offices, and an allowance for use of private rooms for official purposes. I should like the Financial Secretary to tell us the amount likely to be expended in rent and offices, and on what Vote that is provided for. If it is to cost the State £630,000 in one year for officials to make these valuations, it is costing individuals at least double that amount. I estimate that at least £1,250,000 to £1,500,000 must be expended by private individuals in private costs. I believe the House was told on the passing of the celebrated Budget that as objection was raised to the expense the Government would make the valuation. The Government are making the valuation, and I anticipate that the expenses are very much more than its promoters anticipated. It is interesting to notice the number of extra clerks that are to be taken on. I find that some 200 junior clerks and 120 other clerks are estimated for as being necessary in the coming year. I do not know whether that is with regard to the speeding up which hon. Members below the Gangway opposite advocate, but it is a considerable accession of strength for speeding-up purposes. I should imagine that for the 320 young gentlemen who are to be engaged it is a little god-send, because in the ordinary offices their services were not required, owing to the effect of this Act on dealings in property. If it had not been for this gratuitous windfall, these 320 young gentlemen might have had to go to Canada.

From business connections I take a warm interest in these young gentlemen, and I wish them well. I have nothing derogatory to say as to their capacity for undertaking these duties, neither have I anything derogatory to say about the staff generally, but the last speaker referred to the chief valuer, Mr. Harper. He also referred to the evidence Mr. Harper gave before the Royal Commission on Local Taxation in 1901. The Commissioners stated in their Report that when he was examined on the first occasion he stated, on an estimate made on the spur of the moment, that he expected the ascertainment of site value in the given quinquennial epoch, once taken and started, would cost less than £25,000, but he subsequently wrote to the Commission saying that he thought an assessment of each separate site value in the county of London, if carried out by expert valuers, not necessarily of the most eminent rank, would probably cost £40,000, if it had to be done under conditions similar to those governing the present quinquennial assessment. He added that that was exclusive of any cost of litigation which might arise out of the valuation. On the occasion of his second examination, he stated that he had no hesitation whatever in saying that it would be possible to get valuations of the 590,000 hereditaments in London at rather less than 1s. a piece. Perhaps in his reply the Financial Secretary will be able to tell us the number of hereditaments in London now, because it has materially increased since 1901. Whatever the figures are, from an administrative point of view they must be very careful in assuming that Mr. Harper, eminent as he is, is entirely to be relied upon. In another part of the evidence Mr. Harper gave before the Royal Commission, he said it was very easy to arrive at site value; that he had walked over the area of the intended Strand improvement in one day, and had arrived at the general idea of what the value of the land to be taken was, and in a few hours on another occasion he was able to confirm his figures. Most Members will know how very slow the progress of the Strand improvement has been. One wonders what would be the Bill against the London County Council for Undeveloped Land Duty.

To show the difficulties which Mr. Harper might have foreseen, and which have actually happened in that area, I will cite the ease of the Gaiety Restaurant. It is a handsome pile of buildings of monumental character. It was originally leased to the Gaiety Restaurant Company, it is understood, at the very low ground rent of £6,500, in consideration of their being removed from another site. The building was put up at a cost of £120,000, and the Gaiety Restaurant having failed, the London County Council, as ground landlords, found themselves a short time ago with this beautiful building on their hands. They put it into the market, and it was put up for sale. The Official Receiver gave it back without qualification or condition to the London County Council as ground landlords, and now all they have been able to do is to let that beautiful site and that beautiful building to the Marconi Company for £6,500 a year. That is an indication of the difficulty of arriving at site value. In view of the very optimistic evidence which Mr. Harper, the chief valuer, has given on so many occasions, I would warn the Government not to be led away altogether by his suggestions, and not to place too great dependence upon his administrative ability, great though his experience of these valuations may be. I am not attacking Mr. Harper in his official capacity, but I am citing these cases as an indication of the practical impossibility of valuing site value as defined by the Act. The valuers are merely arriving at hypothetical opinions as to what is the value of land.

I am desirous that there should be at least one Member from this side of the House, who, having some experience of the administration of the Land Taxes in this country, is able to speak favourably of that administration. One understands hon. Gentlemen opposite, after spending long months in opposing the Budget, and then losing one or two elections upon it, feeling very sore about it. They say they do not like the administration because it has failed. If the administration had succeeded, and if their clients—for a large number of hon. Gentlemen who speak from the other side are land agents or agents for property owners—were satisfied, they would probably find a far stronger case for criticism. Therefore, I do not think we need worry very much because they say it is bad. [HON. MEMBERS: "Hear, hear."] You want to find some reason for abusing it, and that rather detracts from the value of your criticism. We know the underlying reasons for it. The hon. Member for the Now Forest Division (Mr. Perkins) spoke of the administration of the Act, and complained bitterly of what he called the "young valuers"—young men who are going to strange parts of the country and trying to value land. I suppose he meant to imply that all the information, not to say prejudice, was possessed by the old land agent, who had lived fifty or sixty years in the district and who knew all the local landowners, for whom he has acted and by whom he has been paid. I should like to know why a valuer is a worse valuer because he is young?

What about experience?

Do you call a man who is forty-two young? The last speaker referred to "young gentlemen." As a rule we use that phrase of schoolboys. It is hardly usual to apply the term to responsible men who have passed excellent examinations, been employed in most responsible posts, and been selected by the Government for these particular posts, which they are filling most efficiently. I have had in a small way connection with a firm which does a certain amount of land speculation, and I happen to have had the opportunity of meeting a great many of the land valuation officials during the last year or two in the South of England. I have not found them the sort of persons who would alter their valuations, as was suggested from the other side, from £50 to £150, or who would urge upon the owners of land that they should value very low, as was suggested by my hon. Friend (Mr. J. M. Henderson).

I did not say that they were asking the owners to value low. I said they did value low.

I understood the hon. Member to say the great object of the land valuers at present was to so value that there should be duty payable, and he went on to say their great object was to value low. That is all I intended to say. If I said anything else, I withdraw it. In regard to that statement, we can all only speak from our personal experience. I have had some hundreds of transactions in the last two or three years with land valuation officials in various parts of the South of England, and I have never noticed the slightest desire on the part of the officials to make the valuation low. I have noticed on all occasions that they have most carefully gone into the precise situation, frontages, and so on, in great detail, and as the result of perfectly friendly conversation, as a rule we have in nearly every case, been able to agree on a valuation. I most strongly insist that in all the transactions I have had with them, their conduct has not only been fair on the part of a person acting for the Government, but it has been fair in regard to the transaction with which they have been dealing. They have not been trying to push me or the person for whom I might be acting, and they have not been anxious to try to rush a decision, but have been perfectly willing to listen to all the facts which were put before them, and when they have heard the facts, they have all been willing to come to a perfectly fair decision. I am at a loss to understand where hon. Members who have criticised these gentlemen so harshly have got the information on which they base these extraordinary attacks on Government officials. They ought to communicate it to those who are responsible for them. We ought to have the names of persons who will put on a valuation of £50 and raise it, at the request of the owner, to £150. If these persons are so incapable the information ought not to be used by hon. Gentleman blowing off steam here or some where else in the country, but the actual facts ought to be put in black and white, and they ought to communicate with those who can call these officials to order or put others in their place. There is no reason to run the administration down for purely party purposes. I do not suggest that hon. Members opposite are doing so, though it is difficult to resist that feeling after listening to them.

Then an hon. Member opposite complained of a White Paper instruction, which, he said, was practically striking out the law of the land in regard to the agricultural value of land. He quoted the Act, and said that in regard to agricultural value land is not to pay Increment Duty, but that under the White Paper instruction which has been given to valuers duty is payable on agricultural land. He entirely failed to prove that contention. If agricultural land is sold at a price greater than its value for agricultural purposes, and the land is used for other purposes, of course Increment Duty is payable. It is not payable on the land as agricultural land, but it is payable on the land for the industrial purpose to which it is going to be put. That is in accordance with the Act, and I am quite unable to understand how the hon. Member found in that White Paper instruction anything to alter the law as contained in the Finance Act. Then, having shed the orthodox tear about agricultural land, and said that everyone has been suffering for years, he went on, far more honestly than most hon. Gentlemen opposite do, to admit that agricultural land had been going up in value and that landowners were doing much better. We must be thankful for his informing us of that, but, of course, we all know it to be a fact, that it cannot be proved that the Budget has reduced the value of agricultural land. No such contention could be upheld by any evidence which can be obtained in any quarter. In regard to other land, I am bound to say, as one who has bought and sold a large number of plots of land in the last two or three years in various towns in the South of England, I have not been able to find any evidence of this tax having affected the price of land, but I admit that there are among owners of land an extraordinary number of very stupid people who are fond of listening to speakers sent out by the Land Union and bodies of that kind, who frighten them out of their wits. No person is more easy to frighten than one who has a little land or a little money, who does not know a great deal of politics, and who suddenly comes rather late in life to have a little leisure. During the last three years he has been foolish enough to spend some of that leisure in listening to these Gentlemen who have been telling us about the wickedness of the Land Taxes, how awful the administration is, and what dreadful things will happen to all the people who own land. That sort of person is a little nervous to start with, and by the time he has heard a Land Union speaker for half an hour he does not know whether he will find his house or garden at home when he gets there.

I have listened to the hon. Gentleman (Mr. Pretyman), and have often been unable to conceal the tears which have been gathering in my eyes as I have heard him discussing the position of the landowner in this country, the awful condition to which he has come, the stagnation of the building trade, and all the rest of it. This crabbing of the Land Taxes—the same sort of thing that we have had in regard to the Territorial Force—this continual abuse of all those who are administering it and are responsible for it, is bound to have an effect with a certain number of owners of property and has had a very real effect, and to a large extent it has had an effect on those who have lent money in the past, some of them to builders, and a certain proportion of them have been frightened. When I am told there is no building going on in the country I must ask hon. Members to turn to the Board of Trade Returns in regard to employment in the building trade. If they do they will find there is less unemployment in the building trade than there has been for many years past, and it seems extraordinary that there can be no building and no unemployment in the building trade. That is one of the extraordinary statements which we wish to have explained to us by those who say the Land Taxes have ruined the building trade. I know a large number of speculative builders who are building houses, and I know of persons who are lending money to build houses with, and I have no reason to suppose at all that these builders are ruined or are about to be ruined, and I have no reason to suppose that the persons who lend money to those builders are not going to get their money back. It is true that in certain parts of the country building has not gone forward in the way it was going a few years ago, but that is not owing to the administration of the Land Taxes. It is owing to the fact that we have fashions in regard to towns. We have an immense going to and fro of the working-class population. Whereas you have an immense amount of building in one town for a few years, fashion or business or some other cause turns the population in some other direction, and we have the building going on there, and it is quite possible, if an hon. Member happens to know one part of the country only, to remember large building going on there a few years ago while now there is very little. If he can find such a place I would find him another town where building had been going on for five years, and was still going on, and towns where the people are still marking out plots and making roads and acting in every way as persons who had no belief at all in the administration of the Land Taxes injuring the property owner. I could show a town in this country at any moment where building is going on, large numbers of estates are being cut up and developed and the builders building on them, though I do not think the speculative builder is yet born who will say he is making more than he wants or that he is unduly prosperous. When hon. Members see builders steadily building year after year, and when they die or disappear others building on the same place, it is a little strong to say that the speculative building trade is dead, that no man would think of entering into it, and that no lender will lend money in regard to it. I know lenders who do lend and I know builders who build, and I think the hon. Member was speaking for localities which I know nothing about, but he certainly was not speaking for the localities which I do know something about.

What about the London suburbs?

London suburbs are by no means fair examples. An extraordinary change has come over London in the way of locomotion in recent years—tube railways and so forth—and these changes have made an enormous difference to building in various parts of London. It is far fairer to take ordinary towns which have not been affected in that way, and where the communication between the centre of the town and outside has not been altered, and if the hon. Member takes such towns, taking England as a whole, there is no ground for the contention which has been made that building has ceased and that no one will lend money for it.

Before the Debate goes any further I must really point out that it is getting rather off the proper lines. It is not competent in this discussion to discuss the effect of the Land Taxes. The Act has been passed and is the law of the land, and the only question really open is whether the Government, through their officials, are properly administering the Act.

I cannot congratulate the Government on the defence we have just heard of their administration. The hon. Member seems to think we are crabbing and criticising the Land Taxes and their administration purely for party purposes, and that we are animated by that motive alone in saying the administration is bad. Does that apply to the hon. Member (Mr. J. M. Henderson)? Is he acting for party purposes? The hon. Baronet (Sir A. Markham), time after time, has taken precisely the same line. I am sure he is not acting for party purposes. He has been trying to do what we are trying to do, to show where the administration is bad and is having bad effects. The hon. Member opposite, following the example of the Chancellor of the Exchequer, tried to prove that the building trade had not suffered by this legislation, because, he said, the number of men unemployed in the unions was less now than a few years ago. Is he not aware that there has been an enormous decrease in the membership of the unions? The Chancellor of the Exchequer used precisely the same argument in introducing the Budget in 1911, but he forgot that in 1908 twelve of the principal unions had a membership of 154,000, while in 1910 the same unions had only a membership of 135,000. That shows that the actual percentage of employed in the unions was less, and that the number of men unemployed was infinitely greater, and, of course, it shows that the building trade had suffered, and that they employed far fewer people. You cannot get away from that argument. The hon. Member opposite spoke about the valuation, and seemed to think that it was very competently done. Whether it was done by old or young valuers I could not make out from his statement. I have had some experience in this matter, and let me say that I have heard nothing but condemnation of the general manner in which the valuation has been done. I cannot think what earthly use the valuation will be when you get it. We were told that it was to be a sort of Doomsday Book, and that every local authority—

Is this in order, and shall we be allowed to reply?

I think that in so far as the hon. Member is referring to an Act which was passed some years ago he is not in order. I would say that it is not enough merely to mention the word "administration" in order to bring oneself within the limits of order.

I will not merely mention the word administration, but I will point out how the Act has been administered. We were told that this valuation was to be a sort of Doomsday Book, or register, so that local authorities and others might know precisely the value of houses and buildings, and that they might use that value. If it had been properly done, that might have been the case, but is it properly done? Let me give an example. The London County Council has been acquiring some slum property. It was understood that this Government valuation, which might have been properly arrived at, would have been of the greatest use in ascertaining the value of slum property. So much was that the case that hon. Members opposite when discussing the Bill upstairs proposed that the Government valuation should be taken as the value which should be paid in all cases where slum property was compulsorily acquired. What is the use of the Government valuation? As a matter of fact, in the particular slum property I am referring to the London County Council has been able to buy large parcels of land at considerably less than the Government valuation time after time. That shows that if the Government valuation had been used for the purpose for which hon. Members opposite wished to have it used, the London County Council would have been very largely mulcted. [An HON. MEMBER: "It was valued too low."] The hon Member says it was valued too low. Bare land is valued low, but where there are buildings upon it it is put high. Bare land is put high, and the buildings put low—in this case it is land and buildings. I wish to point out that the Government valuation has been so badly done that it is perfectly useless for the purpose for which we were told it was intended.

I wish to bring before the House one of the worst effects of the present administration of the law. It is making the housing difficulty, whether in town or country, infinitely greater than it was before. You have practically destroyed the speculative building trade as regards workmen's houses. Of course, it is quite true that if you go to this town or that town, it can be shown that building is going on, but it is not the building of workmen's houses. One of the reasons why we have this terrible house famine in many country districts—we have a house famine also in many large towns now, and we are going to have a house famine in London—is on account of the administration of the Act, and because of the way in which the Government in the Lumsden case and others are taxing the profits of builders. Let me show how that is operating. I have here an extract from a statement by Mr. Bernard Alderson, a well-known land agent in Birmingham, where there is at present a house famine. He says:—

"I am an estate agent, whose business it is—in normal times—to build modern houses for artisans. … In Birmingham we are faced with a house famine. The people have nowhere to live. … I have 400 small houses on my books, rents from 4s. 6d. to 8s. 6d., but not one to let. … The ordinary man cannot understand this state of affairs. He is perplexed, because when there is a good demand an adequate supply usually follows The housing question, however, has been so heavily dealt with by our politicians that builders and investors have lost confidence, and now no one has the courage to build … and those who own property or build houses are living in daily dread of further penalties. The Government, having studied Henry George, have taxed land, and what has been the result? They have spent many thousands of the taxpayers' money on officials, but the revenue has been most disappointing and must have destroyed their cherished hopes. They have depreciated property so that by some means they may claim increment front their victims—usually small owners and builders. So frightened have thrifty people become that they will not buy property, and if investors will not buy builders cannot build."

That seems to me to deal with a matter for legislation. It arises out of the Budget of four years ago.

It arises out of the Budget in the first instance, but it is a matter relating to the administration of the law whereby builders' profits have been taxed instead of the bare value of the land. I do not know whether I can go into the case which was dealt with by the House a few days ago. The fact is, as has been stated in this House over and over again by the Chancellor of the Exchequer, that the Government only intended to levy Increment Duty where there had been an increase in the bare value of the land. But what the Government are doing is what they did in the Lumsden case, which was lately decided in the Courts. They are levying Increment Duty where there has been no increase in the value of sites, and where adjoining sites can be brought for—

On a point of Order. May I ask whether the hon. Gentleman suggests that in the administration of the law the officials are doing something which is not legal under the Act? If so, I should say that that is a legitimate subject for controversy. But if they are carrying out what is the legal interpretation of the Act, I say that is not a legitimate subject for discussion.

The question of the actual legality does not arise. What we are complaining of is that the administration of the Act, whatever the law may turn out to be, is in direct contrast with the pledges which were given to the House of Commons as to what the administration would be. Ministers gave direct statements as to how they intended to administer the Act, and as to what the meaning of Increment. Duty was. We are not now discussing what will be the interpretation put on the Statute by the Courts of Law. Our complaint is that the administration is contrary to the pledges which were given as to how the law was to be administered. I submit that that is absolutely germane to the question.

It seems to me that this is what was debated on the Address. It was in order then, no doubt, because it was merely a claim for an amendment of the law. What was said by Ministers previous to the passing of the Act has no necessary connection with the administration of the Act. It must be pointed out or claimed that some administration under the Act is contrary to the interpretation given by the Courts in order that it may be made the basis of a complaint now. On the Consolidated Fund Bill the same rule applies that applies in Committee of Supply.

May I submit that that is the exact point, namely, whether there has been a direct act of administration which is now held by the Law Courts to be right, although contrary to the pledges given by the Government? A White Paper of instructions was issued in which it was definitely claimed that Increment Value Duty shall be payable when property is sold for more than it is worth. By the judgment of Mr. Justice Horridge that act of administration has been upheld, and his judgment stands that it is now law. We are now discussing the administration and the White Paper instructions, which have been held to be legal.

Then the hon. Gentleman is not claiming that there is any departure from the law of the land?

Yes, Sir, we are.

The Court has at present held that it is law. It is that act that you are complaining of. It is purely a case for an alteration of the law, and not one for complaining of the wrong administration of the law.

May we not discuss the interpretation which, in virtue of the discretionary power which for the moment is admittedly legal, the Commissioners of Inland Revenue have placed on their powers under the Act, and in pursuance of which they have placed on their subordinates certain instructions.

I think hon. Members must show some wrongdoing on the part of the Government or their officials to bring themselves in order in Committee of Supply.

What I was trying to point out was that all this had been in consequence of the instructions issued by the Government. The Government need not have issued these instructions. If they had not issued the instructions, the officials would not have proceeded to endeavour to levy Increment Duty in those cases, and if they had not done this, the matter could nevr have arisen in the Courts or elsewhere.

Perhaps the hon. Member will show in what way these instructions were inconsistent with the law.

I do not say that they are. I think that the matter is really sub judice. One case has been tried, and I believe other cases will come forward, but what I object to is that the Government has issued instructions which have greatly prejudiced the building trade and done a great deal of harm in the country. If I am not in order in pursuing that topic, I do think that we are entitled to bring before the House the effect of the administration of the law by the Government. I claim that in this matter in particular they have made many of us on this side, and some on the other side, feel that the question of the housing of the working classes has been made infinitely more difficult in town and country. What I wish to ask is that the administration of the law, which undoubtedly is capable of a great deal of latitude, may be carried out in such a way that those evil effects will not follow. The matter is one of supreme importance in connection with the housing question. We are constantly told that it is a question of land. It is a question of land to a very small degree. It is a question of building. [An HON. MEMBER: "Capital."] My hon. Friend says "Capital"—that is the same thing. If you cannot get capital into the building trade there will not be building. The result of the law is that capital has been withdrawn from building. The administration of the law as regards building makes all the difference in the supply of houses for the working classes. The London County Council has been developing certain estates in the neighbourhood of London for the working classes. I need hardly say that land in the neighbourhood of London is much more expensive than in country districts. In the case of one of these estates the average rent per room per week is 2s. 6d., and of that only 1¾d. represents the cost of the land. All the rest is the building. The great difficulty in providing the working class with dwellings is not the matter of the land, which is a very small item. It is the question of buildings.

Surely the hon. Member will admit that rents are much dearer in London than elsewhere, for the reason that the value of land in London is much higher than elsewhere.

The cost of building is a great deal higher in London, and it has been infinitely increased by the administration of the Government under this Act. I quite agree that laud enters into the cost of the house, but my point is that the amount of rent represented by the cost of land is infinitely small compared with the amount of rent represented by the cost of building and other expenses. The Government, by the action taken under the Finance Act, have enormously increased the cost of buildings, and therefore the rents which the working classes have to pay. By starving the building trade, by taxing builders' profits, by creating general insecurity by their administraton, they have greatly aggravated this evil. But inasmuch as if I wander further into this question I shall be out of order, I merely conclude by saying that whatever the hon. Member who spoke last may say, I, for my part, do not criticise this administration in any party spirit, but because I believe that it has done a vast amount of harm to the question of housing.

I find it a little difficult to accept the statement of the hon. Member who has just sat down, desirous as I should be of accepting literally anything which he tells the House, when he says that these criticisms on the part of the Opposition are entirely free from any party spirit. From the time I entered Parliament I have been very much interested in the operations of the Land Taxes and particularly the Increment Value Tax as they have worked out in practice. Some years ago I expressed from these benches a feeling of apprehension as to what would result from the administration of these Increment Taxes in affecting the operation of the building trades of this country. My own Constituency in Northampton enjoys the distinction, I believe, of having a larger percentage of its population individual freehold owners of their own houses than can be claimed by any other town in the country. Certainly, one of the operations of the Land Taxes and the increment Value Tax, as to which I myself felt considerable apprehension as to how it would work out in practice, was its effect upon the sale or transfer of a small freehold property which represents the investment, say, of one of my own electors. We have in Northampton two very large and flourishing building societies. I believe, though I am not sure on the point as I have not inquired, that one of them in name allies itself with the party which sits upon those benches, and the other society in name allies itself with the party which sits on these benches. But beyond the fact that one building society uses the word Conservative as part of its title and the other makes a similar use of the word Liberal, I imagine that politics very properly have had nothing to do with the operations of those building societies.

Each society, year by year, creates a considerable number of fresh freehold owners of house and land property in the borough of Northampton. Some years ago I seized the opportunity extended to me by those two building societies to go down to Northampton and attend a conference of the societies to discuss the operation of the Increment Tax and the Undeveloped Land Tax imposed by the Chancellor's Budget. My apprehension as to what might happen in the actual administration of these taxes were well known to my Constituents. I went down and asked the secretary, who is a very respected leader of the political party which sits opposite, to furnish me as soon as possible with any instance of hardship arising under the Act in its actual administration. That gentleman is a member of the legal profession, and allied in politics with the party sitting on the opposite benches, and I must say candidly that I have been surprised that from that date to this no such actual instance has yet been forthcoming, although my request received the fullest publicity in the Press. That is one reason why I somewhat doubt the genuineness of these complaints that are made about the operation of the Increment Tax and the Undeveloped Land Duty—it is so extremely difficult to find a concrete and tangible case of injustice which we can consider. There is another reason why I cannot now attach so much importance to these criticisms as I did at one time.

I have now been a Member of this House for some three years, and certainly on three occasions, and I am not sure if it was not on four occasions; when the Finance Act for the year was being brought up, and any injustice in administration or interpretation of any kind could be made the subject of remedy by an appropriate Amendment being put on the Paper and discussed in Committee. This has not been done. It is some two years ago since we heard the hon. Gentleman opposite refer in very eloquent terms to what was alleged to be a gross example of maladministration, the Richmond case in Yorkshire. If there could be a striking example, I should have thought that that was one, because that is the case in which there was every element to touch the compassion of the sympathetic heart, and it was useful as a platform case in the country. It was the case of two orphan ladies whose sole means of support was a piece of property which their father purchased for £500, and on which he spent another £100. He then sold it for £500, showing a loss of £100 on the transaction, and then the valuers, whether properly or not, put in a claim for £20 or £25 duty. That, on the face of it, seems to be entirely indefensible. What the defence was I do not know from that day to this, but this I do know, that for three years the hon. Gentleman opposite, in the House and out of the House, has been telling the people of the country—the investing classes, the financial classes, the builders—that by reason of these land taxes and their cruelly oppressive administration, the building trade has been hampered and small property owners were being oppressed, and yet during the whole of these three years we have not put on the Paper of this House a single proposal for the Amendment—

It is usual to be allowed to contradict a definite statement of this kind. With all respect to the hon. Member—

It is not completed yet. They have not, to the best of my recollection—and I have just been into the Library to refresh my memory—put down a single Amendment destined to alleviate the lot of the speculative builder whose profits were alleged to be threatened by the administrative injustice of the valuers, when they come in the first place to value the property, and when they come in the second place to assess the increment. I would suggest to the hon. Gentleman, because neither of us would willingly say what is incorrect, that before he contradicts that statement he should verify his authority. Let me tell him what did happen. I have every reason for remembering it. Two years ago, after many speeches had been made by him and others on those benches as to the iniquity of the increment and its administration in the country, I put down some half-dozen Amendments upon the Paper designed for the purpose, from my point of view, of preventing any possible injustice either to the builder or to the small owner. I say without serious contradiction that no Gentleman upon those benches, either front or back, had any Amendment that was designed in any way to meet that evil.

We have got the statement complete now, and I may be allowed to point out to the hon. Member that the Amendment which was moved for the last two years deals with what was being done in all these cases. It urges in simple terms that the time for objecting to the entire site value should be extended from sixty days from the service of the original valuation to sixty days from the date of the first occasion. That Amendment would have avoided a great part of the hardship both to builders of small houses, and it has been pressed on both sides and has been refused.

Hon. Members should confine themselves to matters of administration and not refer to questions which would require legislation to deal with them. I would again ask hon. Members to apply their minds to administration.

Perhaps I may be permitted to say in one word that I have not overlooked that Amendment, but it seems to me very far from anything of the nature of an Amendment going to the root of these injustices of which we hear so much in the House of Commons and on the platform. When the opportunity arose, then by one of those agreements between the Leader of the Opposition and the Members of this Front Bench, we were informed that two nights would be sufficient to discuss the whole question of these Land Taxes, involving all these grave injustices to the building trade, and any proper or sober discussion of the sixty pages of Amendments, mostly dealing with agricultural land became impossible, and any reasonable opportunity passed away. Although we continually have had vague charges as to the valuation being too high, and as to improper administration of the Act, on the other hand we never seem to be able to get, either on the floor of the House or elsewhere, any really definite cases of supposed hardship or injustice which we can consider and go into, and in my private inquiries I have not been more fortunate. A much more suitable opportunity for redressing any real grievance is by legislation, because it is not by discussing administration that we can remove injustices as they exist. It is because that opportunity has never been taken by the other side, that I venture to submit to this House that this depreciation of the Land Taxes which has undoubtedly had a very injurious effect both upon the building trade and the estates business of this country, is one which rests upon no very solid or satisfactory basis, and which seems to be mixed up with purely party purposes to a greater extent than the hon. Member who has just sat down is prepared to concede.

The hon. Gentleman, in the latter part of his speech, negatived what he said in the former portion. He not only said in one part that there were no Amendments, but in the other part he spoke of some sixty Amendments.

Not on this matter, but on agricultural land and on liquor licences.

I can assure the hon. Member I put down any number of amendments, and the reason they were not proceeded with was partly that the Finance Bill of the year was brought in by the Government so late that there was not adequate time for proper discussion. It is to be hoped that the result of the recent case in the Courts will be that we shall have adequate opportunity of discussing these matters on the Finance Bill of the year. The hon. Member also told us that he had experienced no difficulty so far as concerned building societies in Northampton. His experience is not that of the Building Federation of the country, who have entered the most vigorous and strongest protest against the way in which these taxes have been administered, and I prefer the experience of the whole Building Federation of the country to the experience of the hon. Member. The hon. Gentleman asked us for cases of hardship. I will give him a new one to-night, and I hope that the Secretary for the Treasury will deal with it. It is the case of Mrs. Catherine Walker. Mr. John Walker, the owner of the small property, died on the 10th January, 1911. The property was in Dalry, in Scotland. It had a frontage of 154 feet on New Street; the lower storey was used as a draper's shop, and the upper part was occupied by Mr. James Brown Walker, the brother of the deceased. The rent was only £38; it was quite a small property, valued at £400, that is to say, the land and building were valued at £400; the land alone, the site value, was £20; that would leave the buildings at £380. That property was sold in June, 1911, for £650. Everybody in the case, the referee and the judges and everybody else, assumed that there had been absolutely no change in the value of the buildings or land, and the whole case proceeded on that assumption. What did the Crown do? They tried to make this woman liable for Increment Duty in respect of the difference between £270 (that is, £650, less £380) and the original site value of £20; that is to say, the difference between the original site value of £20 and £270–a difference of £250, and it was sought to make her liable for the duty on that. The amount of the duty would have been £50 on what had originally been valued at £20, though there had been no change whatever in the value of this small property.

Let me mention this, to show the way in which the Act is being administered. The referee gave it as his opinion that the original valuation was an under-valuation to the extent that he put the original value of the land at £70 instead of £20. So that you have to start with this, that the woman has got to pay Increment Duty to begin with on that mistake, notwithstanding that the property had been valued at less than a third of what the referee found it was worth. The case came to be tried. I do not know whether the hon. Member considers that a case of hardship or not; I submit that it is a case in which there has been a gross miscarriage of all that is to be considered fair and equitable. Moreover, that was not sufficient for the Crown. They tried to make this woman pay duty on the assumption—though everybody admitted that there was no change in the value—that the property was worth eleven and a half times as much as it was in April—April, 1909, to June, 1911. They proceeded on the assumption that in April, 1909, to June, 1911, though the property had not changed in value, it was worth eleven and a half times as much as it was before.

Who made the valuation?

The valuation was made by the district valuer in 1911, as from the date of the 30th April, 1909. The district valuer put the valuation at £20, and the referee put it at £70, though there was no change whatever in the value of the property. The Government claimed Increment Duty—it is true they did not succeed in the case—on the assumption that the land was worth £250. The facts are contained in the judgment. The Crown tried to get their Increment Duty, but so far as their assumption was concerned, the Court decided that £180 would have to be deducted from the £250, because the purchaser had paid more for the property than it was really worth by reason of the fact that he did not wish to be turned out of it. It was worth more to him to remain there. For that reason, according to the finding of two of the judges, £180 too much was paid for this property, and it may have been purely sentimentality which caused the purchaser to be willing to pay more. The judges decided to deduct the £180 from the £250 in respect of which the Crown sought the payment of Increment Duties. How is that case going to be reconciled with the Lumsden case? It seems to me an extraordinary case. In the Lumsden case it was a question of the windfall which increased the value of the property, but in the case which I have cited the Court decided that £180 too much had been paid—it had been paid either on the ground of sentimentality or because the purchaser wished to remain in possession of the property—and they deducted £180 from the £250.

I submit, in the first place, that the fact that the property was originally valued at £20, and was found by the Referee to be worth £70, though everybody admitted that there had been no change in the value, discloses a gross discrepancy which requires some explanation. I say that the action of the Government, in taking this woman to a Court and trying to exact duty on the basis that the property was worth 11½ times what it was originally valued at, is absolutely unintelligible. I should like to recite one passage from the judgment by one of the judges—Lord Johnston:—

"The declared object of the Act was to tax what was popularly described as the unearned increment of land, the increase in the value of bare land, occasioned by circumstances beyond the owner's control and to which he had not contributed. The conception of that object imports the taxation of the difference between real value at two different times. In construing and applying a Statute, we cannot rely upon the declared object of its promoters, however much it may be common knowledge. But it is a consideration that cannot be ignored, that the general scope of this Act is in accordance with its declared object. And I do not think that there is much doubt that the intention and expectation of the legislature was so also. On the other hand the Crown maintain that whatever the object of the Act, the result of provisions are to tax the difference between a real value, and a more Statutory conception or fictitious value. It may be so, fur the provisions of the Act are wrapped up in such a cloud of words, that it is quite possible that they may, if literally read, achieve a result not dreamed of by those who framed the Statute."

I should like a reply to this case, and I should like an explanation, first of all, as to how this property came to be so increased in value when no change whatever, as everybody admitted, had taken place in its value? In the second place, I should like to ask the right hon. Gentleman how the Crown, notwithstanding the valuation had been fixed at £20, came to put forward a claim for duty on the basis that it was worth £250? I submit that is a matter which does require, from the point of view of the Administration, the fullest answer. I should also like an explanation, suppose in future you find out that a man has given, owing to sentimental motives because he desires to live in a place, too much for a property, and, as no duty is payable in a case of that kind, will the Government issue instructions to valuers that they are to make those distinctions and separate the part of the value which is due to sentiment and that part which is due to some consideration personal to the purchases, in the sense that he desires to remain in the place? If it is right to charge a windfall under other circumstances, why should it not be equally right in this case? It seems to me that we are led into an absolutely hopeless morass in the way in which these duties are being administered owing to the instructions which are given. I used to think this Act capable of amendment and that the policy was to amend it, but I can only say, from the way in which it is being administered, and owing to the difficulties which that administration has led to, the hopes of being able to amend it seem to me to be vanishing away. What we are entitled to do, I think, when the opportunity comes when we can suggest amendments, is that the Act should be administered in a way not to give rise to such gross cases of hardship such as that which I have cited on the invitation of the hon. Member for Northampton.

I am sorry to have to speak on a subject like this at a time, the dinner hour, when there is no one in the House, but there appears to be no alternative, and the same applies to the right hon. Gentleman opposite who kindly gave way to me a few nights ago, and I am returning the compliment to-night. I should like to say a word, in the first place, in reply to the only defence which has hitherto been made on the other side. May I say, in passing, I think it is pretty notable, so far as the criticism of the administration of the Act is concerned, which has been pretty frequent and severe, both in the Press and in this House latterly, so far as the question of taxing profits is concerned, and treating profits as increment, that there has been no defence attempted either by hon. Gentlemen opposite or by the Liberal Press, or, so far as I am aware, by any single individual other than the right hon. Gentleman sitting opposite, who, of course, so long as the Act continues to exist, is bound to find some defence for it. Although we realise that his defence was very difficult to make, and that he made the best of a very hopeless case, yet he must admit that he is standing on very weak ground indeed when that defence is confined to the official whose duty it is to defend, and when it receives no support either in the Press or from any Member of Parliament behind him, but that on the contrary some hon. Members like the hon. Member for Mansfield (Sir A. Markham) spoke most strongly against the administration of the Act, and that even such a vehement supporter of the land taxation principle as the hon. Member for Newcastle-under-Lyme (Mr. Wedgwood) gets up and attacks the administration of the Act. I desire to refer to the only part of the speech of the Member for Thornbury (Mr. Rendall) which requires to be answered. The hon. Member said that it was the Land Union which had frightened people, and that it was not the Act itself. I do not know whether the Land Union was responsible for the facts of the Richmond case. It is not what the Land Union have said that has frightened the people, but the actual facts which have come before them as to the administration of the Act. The Richmond case is pretty familiar, and I do not propose to repeat the details to-night. It was the facts of that case which had a great effect on public opinion and on the building trade, and the facts of the Lumsden case have had a similar effect.

Many cases have been brought forward, and I will now bring forward another which has recently occurred, the Linsell case. The hon. Member for Northampton (Mr. M'Curdy) said that we did not bring forward instances enough. I am sure he will bear in mind that these cases do not arise on the valuation; they arise on the occasion. There may be tens of thousands of undervaluations of house property, and the owners of that property are wholly unaware of the dangers which they run. What occurs at present is that the owner receives a yellow paper which puts down a certain mystical figure which he does not understand or profess to understand, and which he probably loses, and to which he pays no more attention. It is only when he sells his house that his attention is called to the fact that he is liable for Increment Value Duty. I have no doubt there are tens of thousands of Linsells who will suffer some day a rude awakening if the Act is not altered. The Linsell case was that of a man who put his whole savings into the purchase of a house, and he paid for that house on a piece of land, £290. Mr. Linsell is a working man, and he purchased the house through a building society six years' ago, putting into it his life savings. Two years ago he fell out of work through no fault of his own, and he sold the house at a loss of £40. He is now a road sweeper, I believe, with the London County Council. The house was let on lease, he being the leaseholder, and he lived in the house. The Commissioners assessed the site value at £80 on the provisional valuation, and on the occasion they estimated that it had increased to £115. They sent a demand note to Mr. Linsell, whose life savings had been lost on the sale of the house, and who was working for 24s. per week, and bad not a golden sovereign to pay it with, for a sum of £4 15s. 1d. Increment Value Duty. Mr. Linsell was unable to pay the duty. He did not understand how he could be charged £4 15s. 1d. for Increment Value Duty when he had made a loss on the house. He protested, and the answer he received was:—

"I am directed by the Commissioners of Inland Revenue to refer to their letter of the 28th ultimo, and to state that unless the duty charged in the above-mentioned letter is paid to the Accountant Controller-General (cashier) at this office within seven days, the Commissioners will have no alternative but to instruct their solicitors to take measures for the recovery of the amount outstanding."

So that all he gets for his protest is an intimation that proceedings will be taken against him unless the duty is immediately paid. Was that on the instigation of the Land Union? It was not until he got that letter that Mr. Linsell came to the Land Union. The Land Union went into the case, and found that Mr. Linsell had returned Form IV., on which he stated that he was actually residing in the house. The Commissioners were aware of this fact, and they ought to have known perfectly well that this poor man, having resided in the house for twelve months prior to the date of the occasion, would be exempted from the payment of Increment Value Duty. The Land Union, on this man's behalf, has demanded from the Valuation Department that this wholly illegal claim shall be at once withdrawn. All the reply that they have so far received is an acknowledgment of their letter. Surely the hon. Member for Northampton will admit that that is a case, at any rate, of very unfortunate administration. I am most anxious that this question should not be confined to builders, because, as the hon. Member for the Mansfield Division pointed out, there are all over the country many thousands of small owners of house property, and the effect upon them is just the same as upon builders. In each ease the whole of their savings or investments is in the form of house property combining land and bricks and mortar. A value is put upon this property, and owing to certain juggling with figures under the Act they suddenly find themselves faced with a heavy claim for Increment Value Duty, which they do not understand, which they cannot anticipate, and which either puts them to heavy legal expense in fighting the claim or involves the payment of a duty which certainly, as far as I understand, was never intended by this House.

What would have been the position if, when this Budget was being introduced, the Chancellor of the Exchequer had told us that he intended so to administer the Act that a man who had sold his house at a loss of £40 could be charged £4 15s. 1d. for Increment Value Duty? I do not believe that the Budget would have succeeded in passing. It is cases of this kind which have aroused public opinion in regard to the administration of the Act—not statements of the Land Union. I referred the other day to Mr. Smithers, the President of the Builders' Association. He was a strong Liberal; he was not at all moved by the representations and anticipations of the Land Union; he was, on the contrary, very much persuaded by the statements of the Chancellor of the Exchequer, and on the character of those statements he issued a circular of a soothing syrup character to the builders of the country assuring them that they were not likely to suffer. It was not until the facts in the Lumsden case became public that Mr. Smithers found that the Land Union were right and that the Chancellor of the Exchequer was wrong. He is now throwing himself into the fight against the Land Taxes and their administration. We are told that these representations are made on political grounds. The hon. Member for the Mansfield Division has not attacked them on political grounds; he is not a Land Union speaker. Nor is the hon. Member for West Aberdeenshire a member of the Land Union. It is only a few days since a very strongly-worded memorandum was issued by the Auctioneers and Estate Agents' Institute. Are they a political body? Did they attack these Land Taxes on political grounds? A challenge across the floor of the House that a Government proposal is being attacked on party grounds has really no weight. It is the duty of the Opposition to oppose. The question is not whether we are politically opposed to the Government, but whether the charges which we make are sound and justifiable. I do not think that supporters of the Government will strengthen their case by attributing motives to us. Whatever our motives may be is our own affair. They have to disprove the charges that we make, and the best way of proving that our motives are wrong is to prove that our charges are wrong. So far no proof of that kind has been advanced. Here is a letter which has been sent to Members of Parliament, certainly not with any political motive. It is from a very strong Radical, a small agent of house property, with no connection of any kind with the Land Union, who has started an agitation of his own against the Land Taxes on account of his own personal experience in connection with small allotments, market gardens, and house property. This is what he says:—

"We can show that much harm is being done to the thrifty classes of the community, that developed land producing choice food for the people is being treated and taxed as undeveloped, that the so-called exemptions of the small owner are illusory, that Increment Duty is being claimed when no increase in site value is admitted, that improvements are taxed, and generally speaking that the Act in working is doing immense harm to the very class it was supposed to benefit."

I do not think it is at all difficult to disprove the suggestion that the Land Union frightened the people and that these charges are only made with a political object. I should like to refer to the question of the administration of the Act as regards agricultural land, and particularly in reference to Undeveloped Land Duty. When I speak of agricultural land I mean land which is being used for agricultural purposes. One of the features of this Act is that words are so used that it is necessary to say what they mean. "Agricultural land" in two or three parts of the Act has totally different meanings; therefore when one uses the simple term it is necessary to explain what he means by it. Land which is being used for agricultural purposes includes a great deal of land which is being charged Undeveloped Land Duty, not because it is wanted for building to-day, but because it may have some prospective value for building purposes which may or may not some day be realised. A very large proportion, indeed, of this land has either not been valued at all or no value has been agreed upon. No valuation stands or exists for an immense area of this land; but before valuations are settled—I believe in some cases—I have statements made in writing by agents that these claims are being made where there has been no provisional valuation served. I have no proof of such actual case, and I do not want to put forward a case of which I have no actual proof. But there are certainly thousands of cases where demand notices for Undeveloped Land Duty are being served with the provisional valuations and before these valuations have been agreed or settled in any sense. Is that a reasonable method of administration? Does the right hon. Gentleman realise what that means, and how the law is being nullified? Does he realise that by this Statute, as passed by this House, anybody who has a provisional valuation served upon him is entitled to sixty days within which he may object to it. Does he know—no doubt he does know—that when a notice for Undeveloped Land Duty is served, the owner upon whom it is served has only thirty days instead of sixty, and not only has he only thirty days instead of sixty, but he has no right of objection at all; and his only mode of procedure to contest this levy when he believes it to be illegal is to give notice of appeal under the Act, an expensive process which has to be done in duplicate.

He has to give notice of appeal to the Commissioners and he has to give notice of appeal to the Revenue Department. Consider the position of the ordinary owner of a piece of land who now receives simultaneously a provisional valuation and a notice demanding Undeveloped Land Duty based upon that provisional valuation—which in many cases is wholly inaccurate—such is the haste and hurry with which these notices are actually issued and the conditions under which they are served! They are being taken out of the hands of the district valuers—there is no time for them to serve them—and they are being sent direct from headquarters in London, who really have no knowledge of the particulars. In one case—I have no doubt in many cases—these valuations have been so carelessly served that the areas to which the figures apply are wholly incorrect. When this has been pointed out, the suggestion is made: "You can alter the areas, and you had better leave the figures as they are, and then it will be all right." Is that the way to administer an Act of this kind? Private individuals will now have to appeal, or the Act will be taken advantage of. I suppose that action will have to be taken to decide what is legal. I do not know whether the right hon. Gentleman will tell us when he replies of how many appeals notice has already been given to the Referee's Court. I hope he will give us the number. I believe there are many thousands. But the ground upon which I most strongly protest is that while all these cases are sub judice and have to be decided, this valuation is still being pressed on wholly indeterminate lines. I do not suppose the right hon. Gentleman suggests that all the points claimed by the Valuation Committee are necessarily going to be upheld by the Courts. His answer to me across the floor of the House was that where the final decision is given by the Court on a point which affects the other valuations that they will be amended, even if they have already been settled and agreed in an opposite sense prior to the delivery of the judgment.

But take such a case as the Deptford case in which is a most important point affecting hundreds of thousands of valuations. It is a simple case where the land that has been given up for roads is to be taken into consideration in making the deductions on the site value. The Commissioners refused to make that allowance, and the case has been brought before the Referee, and the Referee has decided against the Crown. This claim is still being refused. There are hundreds of thousands of valuations of small house property throughout the country where that alteration would have to be made if the superior Courts support the Referee's decision. Therefore, what is the use of coming to this House and pretending that it is otherwise! I know perfectly well what will happen. When the Budget is introduced we shall have the Chancellor of the Exchequer coming down here, producing long columns of figures, and telling us that so many millions of valuations have been completed. I venture to say that he will not be able to say for certain that one valuation has been completed—because there is not a single valuation made, so far as I know. Well, there may be a few, but the number must be very small, which will not be affected by some of these decisions, and which will not require material revision after the law has been decided.

This especially applies to agricultural land. The Act permits certain deductions to be made in regard to agricultural land to arrive at the site value. We had a very interesting admission from the right hon. Gentleman in debate the other night. He admitted that what purported to be the site value of agricultural land, as now being ascertained by the Department, was not its site value at all in the sense of the site value of building land. He admitted, he said, that these deductions necessary for the ascertainment of site value could be subsequently obtained at very little expense. The position is without precedent. It is absolutely unparalleled, and if only the country really realised we should see what would happen. Certainly one of the difficulties of this Act is the impenetrable shroud of gibberish with which it is surrounded; it is nothing else. The public mind and the public eye has not penetrated through that shroud. It is beginning to get through it. When it does get through it will make short work of the right hon. Gentleman and the whole proceedings. Here you have a figure which purports to be the site value of agricultural land. Tens of thousands of pounds are involved. What amounts to an immense sum of money is now being spent, and has got to be spent, to decide what that figure is legally. Does the House realise that? Does it realise that private individuals and the taxpayers of this country are fighting, and that something like a dozen separate lawsuits will be gone into at great expense for the Courts to decide by what method the figure called the site value of agricultural land is to be arrived at under this Act? The right hon. Gentleman tells us that the way that figure is arrived at means nothing at all. He says it is not site value, but simply x. I will take that even further. I will say that the whole expression "site value" in this Act is now proved to be absolutely meaningless, and is now being admitted, not only to be meaningless, but that it is not being used in reality. It is pretended to be used. It is used to blind the public. It is not used for the purposes of the Act in any shape or form. There is no use being made now of the site value which is being obtained by these laborious and expensive processes under this Act which could not be equally well fulfilled by the algebraical symbol x—not one of them!

Here you have the site value, or what you call the site value, of a piece of land or house. You call that the original site value. I will call it x. You have your figure, which I will put at anything you like, say £50. That figure you fix after days of debate in this House and a lawsuit and immense expenditure. You get your figure, and you are very proud of it. Supposing this is a piece of agricultural land, you take so many years' rental, say, twenty-six years' purchase of the rental, and there you get your total value. You take £50 as the site value, but I take this symbol x. The property is sold, say, for twenty-six years' purchase of the rental. Let us put the figure at £100, then you have a total value of £2,600. You have a site value, say, of £1,000, which you have arrived at after many lawsuits, but which I arrive at by taking the symbol x. It that property is sold, not for £2,600, but for £3,600, you simply add £1,000 to the other £1,000, and you say the site value, instead of £1,000, is £2,000, and there is £1,000 for Increment Value Duty. I will take the general case, not of agricultural land, because that is in dispute: it is in dispute whether a tax may be levied upon agricultural land. Let me, therefore, take the same figure, but suppose that it is a building in a town on a piece of land; £2,600 is the total value; you call the site value £1,000, but I call it x. It is sold for £3,600, which is £1,000 increase, which you add to the site value, and then you say the site value is £2,000, but you admit that the value of the site has not altered. I take x, which has the same effect, and I add £1,000 to x, and deduct it again, and I get exactly the same Increment Value Duty that you do. The whole elaborate system by which you arrive at site value, so far as the present administration of the Act is concerned, is not used. I should like the right hon. Gentleman to explain whether under the White Paper instruction the duty is to be charged upon anything the property is sold for more than it is worth? What has that to do with site value? Can the right hon. Gentleman suggest any connection between site value and the White Paper instruction? The White Paper instruction is when property is sold for more than it is worth, but that is the total value for which it is sold in the market more than the figure fixed by the Commissioners. I say the symbol x would do perfectly well, but why bring in site value at all?

If the hon. Gentleman will pardon me, I do not see, in making his case, where he gets his datum line if he puts x as a purely imaginative point.

I want to make this point quite clear. The White Paper says Increment Value Duty is levyable upon property as sold for more than it is worth at the time. Does the right hon. Gentleman accept that? The White Paper instruction says that Increment Value Duty can be levied when the property is sold for more than it is worth at the time, which is a comparison of total value, not of site value. Nobody ever sells the site value; it does not exist. You can only sell the market value, and the total value purports to represent market value. The words are "unit of valuation," and when the unit of valuation which is a composite subject is sold for more than it is worth at the time. That is a comparison of the total value, and has nothing to do with the site value whatever. Take the Richmond case. The symbol x would have done perfectly well for site value. In the Richmond case the symbol x is the difference between the total value—it was sold for £500 and valued at £380, and the site value was fixed at £50, or something of that sort. You have there a concrete case and you have the site value at £50.

May I ask one other question? Supposing the total value and the price coincides, which is the normal condition in ninety-nine cases out of one hundred, how would you measure the increment?

When they coincide there is no increment.

Not if the total value when sold in the open markets coincides?

I am speaking of the way in which the Act is being administered. If the Act was being administered differently, and if either value was going to be the measure of increment not the actual value in the site, it would be a totally different proposition. What we are dealing with now is the Act as administered under the White Paper instruction. It is true if the Act was administered as the House was led to suppose you would have site value which was the value of the site, but we have the direct statement made in evidence that site value is not the value of the site—that was definitely stated in the Lumsden case—but is a Statutory conception, and these are the actual words of counsel for the Crown. He said site value was not the value of the site, but was a Statutory conception. That is my complaint. I say you are continuing to act upon a Statutory conception and not upon the value of the site, and that x would do just as well as the figure arrived at after a long, expensive process of litigation. The right hon. Gentleman's interruption makes the point much better than I could make it. It is perfectly true, and he must see it, that if you are going to claim to tax property when it is sold for more than it is worth at the time—that is the very thing we are dealing with—the total value and the price must differ.

Supposing it is sold for what it is worth at the time?

Then the White Paper instruction does not apply. If the total value and the price coincide it is not sold for more than it is worth at the time and the White Paper instruction does not apply. My criticism does not deal with that point; my criticism is that the expression "site value" used in the White Paper instruction is a mere blind, for the tax has nothing to do with site value, and the symbol x would just be as useful to the Department in carrying out the White Paper instruction as the figure they have arrived at after so much pain and calculation. I defy the right hon. Gentleman to disprove that statement. So far as the element is concerned of the selling of property for more than it is worth at the time, the site value has no connection with it in any shape or form, and the only use it is is to fog the issue. This question is so complicated and difficult, that it is not easy to make even one point clear. There is another case of administration which I want to raise, and it is the refusal of the Department to allow the amendment of obvious errors. That particularly applies in the case of Increment Value Duty on minerals, and the way it is being treated. I know a case where, in July, 1910, just after the time this Act was passed, a colliery company were actually negotiating for the purchase of some land comprising 224 acres near Dover. The owner was actually in negotiation with the company for the sale of his minerals, when he received Form IV. As hon. Members are aware, the early issue of that form was pronounced to be ultra vires, and a good many people put it in the fire, and if this man had put his Form IV. in the fire, nothing would have happened to him.

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Instead of doing this, however, he returned the form, and the particular space reserved for entering the value of minerals he left blank, because he did not consider it was necessary under the circumstances to fill it in. He returned the form, but did not state there was no value of minerals, and he did not state that there was any value of minerals. The negotiations with the company were completed, and when the lease was entered into, a claim was made for Increment Value Duty, and it is claimed that the total value of the minerals is liable to Increment Value Duty, because leaving the space in Form IV. blank is treated by the Department as a nil return. The trustees have demanded the right to amend this return in order to show that the value of the minerals, for which they were actually negotiating, was the same on the 30th April, 1909, as they are now. The Department do not deny that fact, but instead of accepting that fact, and allowing the duty to be levied upon any real increase of the value of the minerals, they take advantage of the fact that the owner did not fill up this space, and they are demanding Increment Value Duty upon the whole value. Is that a reasonable adminstration of the Act? Is that what the House intended? Was it intended to fine a man hundreds of pounds, and in some cases probably thousands of pounds, because he did not understand the filling up of a blank form? Of course, the matter will have to be taken to the Courts, if it is persisted in. All these cases will be taken to the Courts, and the only way people in this position can meet the charges levied upon them is either to pay what they believe to be illegal, or go to the enormous expense of fighting the case in Court. I am sure the right hon. Gentleman cannot defend claiming Increment Value Duty on a very large sum of money, simply because Form IV. was returned not filled up in a particular column. I cannot believe that such a claim is legal, but whether it be legal or not why should it be made? Another important matter is the appalling delays occurring in connection with this valuation in the settlement of Estate Duty claims. The Estate Duty is levied upon principal value, and this valuation, as such, has got nothing to do with it. A kind of system of blackmail is being followed, and there are actual cases dating from 1909 which are not settled, and the Commissioners of Inland Revenue are refusing to settle the value of estates, including real property for probate, until the valuations are complete. They are putting pressure upon trustees and executors and those who have to administer estates by refusing to agree to the clearance of the estate, even where the figures are agreed upon, and there is no real difference of opinion as to the value of the estate for probate. Because the provisional valuations affecting the land in question are not settled they are refusing to clear the estate, and will not let it be distributed simply because the provisional valuations have not yet been agreed to. I am sure that is a most indefensible procedure. There are cases four years old which are not yet settled, and on that ground I hope the right hon. Gentleman will look into this question.

Very similar action is being taken in the case of putting the Increment Value Duty stamp on particulars delivered. There is a typical case occurring in this way: The owner of some land has leased sites to a builder, and that is the occasion, and we have been told that on these occasions where there may be still any outstanding question, the sale of the property on the completion of the lease need not be delayed, because the stamp can be immediately fixed to the particulars delivered. What is now happening is that the Inland Revenue Department are refusing to affix the stamp to particulars delivered until the owner gives them the information, which I believe they have no sort of right to claim. They want the information from the owner as to what sum of money the lessor, who is taking the lease, is spending or is going to spend upon the buildings which he is going to erect. The owner has no means of ascertaining that, if the builder refuses to give him those particulars. The lessor is put in this position: He cannot deal with his property because he cannot get a good title until the Increment Value Duty is stamped, and the Inland Revenue Department refuse to affix the stamp until the owner gives them that information. Surely it is monstrous this kind of indirect pressure should be exercised.

The Department seem to forget that they are a public Department who have got to administer the Act in a fair spirit. The way in which this Act is being administered seems to be this: "Here we are out with a sort of roaming commission to get revenue where we can, honestly if possible, but in any case to get it." That is the kind of principle upon which it seems to me this Act is being administered from headquarters. I do not desire to make any attack upon the local valuers. Great pressure is being put upon them from headquarters to complete these valuations in an impossible period with the object of making a great show in this House of the number of valuations which have somehow or other been rushed through. None of these valuations, however, can be regarded as really settled or decided. The moment there is an objection that matter is put aside and nothing is settled, and fresh valuations are served on other people in the hope that they will not object, so that as many valuations as possible may be stated to have been completed. All this is hurting the little man much more than the big man. The big man has good advice and can protect himself. He certainly will pay nothing and do nothing until all these numerous cases in the Courts of Law have been decided. I do not know what the position of the small owner would be if it were not for the Land Union. What would Mr. Linsell have done or what would have happened in the Richmond case? The right hon. Gentleman with regard to the Lumsden case said it was the only case. It is rather odd to speak of a test case as the only case. The Lumsden case was a test case, and it is obvious, if the decision is given finally in favour of the Crown, that particular procedure will be followed in every case hereafter. There was the Aylesbury case. It was almost exactly similar. The right hon. Gentleman I am sure had forgotten the Aylesbury case when he stated that not a single farthing had ever been claimed from another builder. I confess I thought at the time that was rather a sweeping statement to have made.

We are told that there are no concrete cases. Let us take another one. Let us take a church site in the Kennington Road. That site before the passing of the Act was allocated for a church and was restricted to the purpose of building a church. The church has not yet been built for the simple reason that sufficient money has not up to the present been raised for building it. A claim has now been sent in to the Rochester Diocesan Trust, in whom this land is vested, for £24 odd for Undeveloped Land Duty on the ground that the land has a certain selling value, about £50, on which three years' Undeveloped Land Duty is claimed. It is perfectly obvious that as the land at the time of the passing of the Act was under the restriction that it could only be used for the purpose of the erection of a church that demand is actually illegal, though I suppose it is technically right. How could the Rochester Diocesan Trustees appreciate the very recondite fact that that restriction might have been claimed as a deduction? The Chancellor of the Exchequer told us in the House at the time that the Commissioners of Inland Revenue and the valuers would give every assistance to owners and do all they could to administer the Act fairly and to make the proper deductions at the proper time. They not only not make the deductions at the proper time and do not inform owners that these deductions should be made, but in face of the fact that this restriction must have rendered the land wholly valueless for any building purpose they claim Undeveloped Land Duty. It could only have been used for a church, and that restriction obviously cleared it from Undeveloped Land Duty. I myself raised the matter once or twice at Question Time, but no redress whatever has been given. I do not believe the money has been paid, and I hope it will not be paid, because I believe the claim to be strictly illegal, but it is still being pressed. These cases can be multiplied to any extent. I have got sheaves of them here. I hope the hon. Member for Northampton will take it that I have quoted some cases to-night. I hope he will believe there are any number of such cases all over the country.

The administration of this Act is now causing the gravest dissatisfaction all over the country. It being the duty of an Opposition to oppose, whatever Act is introduced meets with criticism, but, if that Act is a good one, it becomes accepted, and the opposition to it gradually settles down and very little more is heard about it. That is one of the best tests which can be applied to any legislation. It is quite true there was most vehement opposition to this Act. There has been plenty of time for it to die down, but instead of it dying down it is now increasing daily throughout the country. The right hon. Gentleman pays a very high compliment to the Land Union if he is going to endorse the suggestion which has just been made that the opposition which now exists and which is growing is manufactured by that Union. Could a private organisation of that character maintain an agitation against an Act against public opinion for something like four years? If the public who are experiencing the actual effects of this Act are satisfied with it, it is paying the Land Union a great compliment to suppose that a mere politically manufactured agitation can rouse public opinion as public opinion is being roused to-day. I claim no such credit for the Land Union, and, as far as I am concerned, if I thought there were any elements of fairness in this Act or that the principles of it were sound, I should accept it, endeavour to discover what particular points of hardship existed, and bring Amendments before the House and ask the House to accept them, to reduce or remove those hardships without altering the principles of the Act. I felt, however, from the very moment this Act was first introduced that the whole basis of it was impossible and impracticable. I am of that opinion still, and I hold it more strongly every day that passes. I am perfectly certain right hon. Gentlemen opposite know it too. They know this Act cannot go on as at present, and in the administration of it they are incurring a most grave responsibility. We have had even the hon. Member for the Newcastle Division (Mr. Wedgwood) condemn it the other day. He said the Increment Value Duty ought to be abolished. I must say I sympathise with the right hon. Gentleman opposite and the Chancellor of the Exchequer, because they were pushed into this by the land tax group and now that group turns against them. I am afraid that the land tax group now think that the Increment Duty is indefensible.

They never advocated it.

Does the hon. Member say that the land tax group never advocated the Increment Value Duty in the Budget?

I am afraid the hon. and gallant Gentleman is not keeping to the point.

I have almost done, and I apologise. If what the hon. Gentleman says is true, I will at once withdraw what I said. They voted for it.

That is a different thing.

The statement which the hon. Gentleman is making is that this policy was forced upon the Chancellor of the Exchequer by the land tax people. That is untrue.

The hon. Gentleman went on to say that they were opposed to the Increment Value Duty?

I did not.

Some hon. Gentleman did.

I said they never advocated it.

They never advocated it, but, they voted for it. I will withdraw the statement that they approved or endorsed it, and I will simply say that they voted for it. I will only conclude by saying that right hon. Gentlemen opposite must know that they are incurring a most serious responsibility in putting private individuals and the country to this enormous expense, endless trouble, and heavy burden. The burdens we have to bear are already enough. Some of them are gigantic. We have many necessary heavy burdens. There is great expense thrown upon the country by this Act which is wholly unworkable, and has got to come to an end. It is quite impossible to go on administering the Act upon that system. The country will not stand it.

The country is not worrying at all.

They are beginning to worry. I think he will find the country is going to worry.

You never hear about it at by-elections at all.

I think the hon. Member is mistaken.

I have an hon. Gentleman beside me who knows.

He has got his information, no doubt—

I was there also.

I am glad to see that the hon. Gentleman is one who knows. He is very familiar to us. I think that "one who knows" is not always very accurate.

I have followed him at several by-elections.

As I have said, it is a very grave responsibility, and it is only a question of time when this Act will be altered and its administration will have to be altered. The right hon. Gentleman must recognise that the sooner it is done the sooner will there be a saving of the enormous expense and burden which is imposed upon the country to bolster up legislation which was hasty and ill-considered and the administration of which is rapidly becoming a public scandal.

I must thank the hon. and gallant Gentleman for the courtesy extended to me in allowing me to give a general reply, and I hope he will acquit me of discourtesy on my part if I venture to say that his speech, forcible though it was, suffered from the necessary unreality of the conditions of this Debate. You, Sir, and your predecessor in the Chair, have been endeavouring to keep hon. and right hon. Gentlemen on both sides of the House to the subject which we are discussing, but it is the last thing in general that they want to discuss. Only occasionally in one or two parts of his speech did the hon. and gallant Gentleman opposite ever get into touch with the only legitimate subject which is under discussion—the administration of the law as it stands by the officers of the Inland Revenue. It is not a question of how the law ought to be amended. The hon. and gallant Gentleman, in an eloquent peroration, declared that the Act was futile and hopeless, and that he always knew that it was; that it would have to be amended and that public opinion was rising in a stormy tide against it, in Houghton-le-Spring and elsewhere; and that we knew that in our hearts. That is interesting to listen to, and very eloquent, but it is utterly irrelevant to the question which is before us. The subject is the administration of the Act—whether as a matter of fact the officers of the Inland Revenue are carrying out the law as it stands, and whether in carrying out that law they are indulging in unusual hardships or unusual oppression of the subject of taxation; or whether the valuation is being made as, under Clause 26, the valuation should be made, and whether as a result of that valuation the Increment Tax is being collected as it should be collected under the conditions of the Clauses of the Budget which still hold good. The hon. and gallant Gentleman must confess that in no part of his speech did he deal with the question of administration on that basis. With all the willingness in the world to obtain some subject upon which I could remonstrate with the officers of the Inland Revenue, I was unable to find any in the cases which he offered. Again and again in his speech, after some complaint of hardship, he announced that our course was technically legal, and apparently because there were hardships he thought the officers were not to enforce the law. But we possess no general dispensing power of taxation, either with regard to Land Taxes or ordinary taxes, or the levying of the duties on tea and sugar, and if a thing is technically right the hon. and gallant Gentleman should know that his function is not to impeach the officers of the Inland Revenue with such fervour as he has done, but to suggest on a proper occasion what should be the legislation to make these technicalities less burdensome.

I said the exact opposite. I said that in the Linsell case the claim was illegal and yet was being made.

Take the case of the Kennington Church. The hon. and gallant Gentleman admitted that the Inland Revenue were probably technically right, because the claim for exemption had not been made, and apparently therefore they were, what he called technically right, which is legally right.

We must have this point clear. They are technically within their right, because they have a power under the Act not to reopen it; not to allow an amendment to be made. If they allow it to be made, they are also within their right, but they refuse. It is a power of administration, whether they allow it or not. In that particular case they have a right to amend the valuation, and also in the mineral rights case they have the right to amend the original valuation. The question is whether it is to be reopened. That is purely administrative. They are acting within their rights in refusing, but they have an administrative right to allow it.

That, I agree, is a perfectly fair point. The hon. and gallant Gentleman has made it considerably clearer by his interposition, and if he can show me any case in which, though they are technically right within the law, the officers of the Inland Revenue are acting harshly, I will guarantee to inquire, and, if I think they are acting harshly, I will try to see that it is put right. That, however, is not the gravamen of the charge which the hon. and gallant Gentleman has made. Take the Lumsden case, which has been the subject of ninny Debates. There we were not only technically right in exercising our powers, but the High Court stated that we had no alternative but to exercise those powers in that fashion under the Act as it stands. There is no dispensing power either with the officers or with myself, and I do suggest that instead of coming forward with legislative proposals for the removal of hardships the hon. and gallant Gentleman has turned his attention to making a general attack upon the officers of the Inland Revenue. I utterly repudiate his statement as to what he conceived to be instructions issued, either by the Chancellor of the Exchequer or myself, or by the central head quarters of the Inland Revenue, to those who are engaged in the administration of the Act throughout the country. He said the sole demand upon them had been to get revenue if they could—to get it honestly if they could, and, if not, to get it otherwise. That is an extraordinarily grave charge to levy. I do not think that the hon. and gallant Gentleman knew what a grave charge he was bringing, or whether he was bringing it against us, as representing the Department in Parliament, or whether, as he seems to suggest, he was levying it against the officials at headquarters, whom he seemed to think, in order to please the Chancellor of the Exchequer or a Liberal majority in this House, were endeavouring to get revenue dishonestly if they could not get it honestly. Not only had they had no instructions to get revenue dishonestly if they could not get it honestly, but they have had no instructions to get revenue, if they could, anyhow. The sole instruction they have had is to get revenue where they are legally bound to get revenue, and only under conditions where it can be properly collected. Anyone who knows will endorse the statement made by the hon. Member for the Thornbury Division of Gloucester (Mr. Rendall) and endorsed by the hon. Member for Northampton (Mr. M'Curdy), that in every case where the subject becomes a matter for negotiation, in so far as the officers are legally able to do it, they are only too willing and anxious to meet the demands of the subject on the question and to carry out the tradition of the Inland Revenue in other matters that, if there is any doubt, the subjects should have the consideration rather than that the law should be unduly pressed against them. I could bring 40,000 cases where in such negotiations it might have been possible that the statements made originally either by the valuers or by the Inland Revenue could have been maintained against the subject, yet on the remonstrance of the subject, so far from wishing to drag everyone into Court, with all the expense incumbent upon it, those statements of the subjects have been accepted, and the conditions have been adjusted in accordance with those state- ments. Not only so, but the hon. Member for West Aberdeen (Mr. J. M. Henderson), who for four years has been the doughty opponent in this House, not of this special administration, but of the Act as a whole—

No; I was the first man who proposed the Increment Tax.

Who for four years has been engaged in active warfare upon the Land Taxes under the guise of criticisms of this Act—

No, no.

The hon. Member himself acknowledged that the most satisfactory method would be the method of self-valuation which was ordinarily adopted, which was recommended when the Act was originally introduced, and which was withdrawn in deference to the very strong protests made by practically the whole Opposition. [An HON. MEMBER: "On your side, too."] It was said, "What is the good of spending so much money; why not accept a declaration of the subject if he wishes to have the valuations altered?" How can you reconcile those statements? First, as to the anxiety of the valuers at Somerset House to accept the valuations which the subjects themselves believe are the valuations, and, on the other hand, the spectacle outlined by the hon. and gallant Gentleman of an iron bureaucracy coming down, quite apart from any question of what the subject thinks right, and imposing its will, even to the ruin of the person on whom that will is imposed. There is no kind of reconciliation or justification in the suggestion made by the hon. and gallant Member. The hon. Member for the New Forest Division (Mr. Perkins), who opened this Debate in a very moderate speech, said he was not challenging the law or the judgments by which the law had been declared in the High Court. In these circumstances I listened with very great attention to see what he was challenging in the administration. I found the same figures, the same assertions, the same shifting of the challenge from the administration to legislation in his speech, as I found when we last debated this subject. But I found a specific impeachment of the valuation. Once more I would appeal to the hon. Gentlemen opposite on this point. They hate the Increment Value Duty and they have never concealed their hatred of that duty. They fought it on what the hon. and gallant Member calls an ill-considered Bill, which lasted, I think, longer than any Bill has ever lasted in this House, and which was discussed for something like seven months. They fought it here, and afterwards they fought it at two elections, in neither of which did they receive any public sympathy. [HON. MEMBERS: "We won a hundred seats."]

There was an English majority against the Bill.

May I correct one injustice which I am sure the hon. and gallant Gentleman did not intend? In opposition to this Increment Duty as a duty, the Opposition were entirely allied to the group in this House the hon. Gentleman calls "the land taxers." Increment Duty as a duty is not and never was part of the programme of the advocates of the taxation of land values.

That is why I proposed it.

I am unable to connect these remarks with the power of administration.

I gladly bow to your ruling, Sir, but I think you will agree that I was merely taking up a subject which has formed a considerable part of the controversy in the Debate. Let me turn from the Increment Value Duty to the valuation, of which the hon. Member for the New Forest Division made a special subject. They fought valuation as strongly as they fought the duty, and they objected to the valuation even more than to the duty. I asked them to come from the objection to land valuation in general, and site valuation in particular, to the question on which they wished to impeach the valuations as at present made. I would appeal to anyone who has been present during the four or five hours of discussion to find anything specific in the matter. Against any such suggestion I have two very strong points to urge, which I think fair-minded Gentlemen opposite will agree are points which give me some justification for my advocacy of what have been somewhat contemptuously called the "young men" valuers of the Inland Revenue. The first point is this: Specific cases, very few in number, as the hon. Member for Northampton said, but occasional specific cases, have been brought up in this House, partly in debate, and partly in question and answer, in which there appears to have been a discrepancy between the valuation as originally suggested by one of our valuers in regard to a particular house, field, or plot of land, and the valuation as finally decided. There was a suggestion made last July in the House by the hon. Member for Sleaford (Mr. Royds), that not only were there specific inaccuracies in the valuation, but that the valuation was being conducted on totally different methods in different parts of the country, and that, therefore, a man in Lincolnshire, under the methods adopted by the Inland Revenue, might find himself subject to a totally different method of assessing the value of his property, and consequently having to submit to a totally different method of estimating the taxes from, say, a man in Worcestershire or Cornwall.

What was our reply to that suggestion? It was immediately to offer to hon. Gentlemen opposite an expert Committee which should thoroughly go into the whole subject of the methods of valuation under Section 26. Of course, it is impossible to get anyone to serve on an expert Committee to go through and repeat the work done by the valuers in every town and country in the United Kingdom. It is also impossible to ask an expert Committee to criticise the actual declarations of valuation required by an Act of Parliament, but what we offered was this: "You say there are gross inaccuracies in valuations. You say there are differences in the methods adopted in one county and another. We will appoint an expert Committee, we will agree as to the names of that Committee with hon. Gentlemen opposite, and we will allow that expert Committee to study in the closest possible fashion the methods of valuation adopted by the valuers of the Inland Revenue, and to declare whether, as a matter of fact, those are not the methods which would be adopted by the best skilled expert advisers if they were asked to produce a similar valuation, and whether the methods are not, as a matter of fact, the same in one town as in another—the same in Lincolnshire as in Cornwall." For what reason I know not, though we have repeatedly made the offer to the hon. Gentleman and his Friends, they have never accepted it, and the offer remains as clearly to day as it was made last July. If hon. Members opposite desire this to test the administration of the Act, apart from legislation and the creation of the Valuation Department, and the instructions issued from the Valuation Department in order to obtain accurate valuations, as defined by Section 26 of the Act, as soon as they can make up their mind that they want that Committee we will agree with them on the names and have the Committee appointed.

We cannot agree on the reference.

Why? Because you do not want an investigation into the methods of valuation.

You will not allow them to say whether the value is a true value.

I want the Committee to say whether, given the values as laid down by this House, the methods are being carried out equally between one subject and the other.

The whole point is, as the Debate shows, the extraordinary difficulty of disentangling criticism of the Act from criticism of its administration. The word "interpretation" was barred, and as no one knows what the interpretation is, and where it begins, and where administration ends, it was practically impossible to carry on the Committee under the reference proposed.

If it is impossible, the hon. Member and his Friends ought not to have made the impeachment they made on the Second Reading of the Consolidated Fund Bill, because we give the widest reference as far as administration is concerned, and it is administration that you are supposed to be impeaching to-day, and if you try and impeach administration in this general fashion, as I think very unfairly to the valuers who are carrying out the work, and at the same time refuse a Committee which will declare whether the administration is or is not right, it seems to me that the ground is cut from under you when you go into such a controversy as that. If you wish to impeach the Act as it stands, and the legislation dealing with it, that is a totally different question, and on that we are prepared to meet the hon. Gentleman on any possible occasion which is open to him. That is the first point. They have never accepted that condition, and I believe if they honestly thought valuations in Lincolnshire were being conducted on different conditions from valuations in Cornwall they would press for that Committee; but because they realise that, as a matter of of fact, the instructions given by the Inland Revenue are the instructions which would be given by any outside firm of valuers doing similar work, and that there is no special pressure on the subject, and no inequality in different parts of the country, when we offered the Committee they stated that they had no desire for it.

We never said anything of the kind.

Again and again we have offered it and you have never accepted it, and I think the hon. Baronet said it was useless, which is practically a refusal.

So it is, unless they can say whether the value is a true value.

I leave it at that. That is the whole point. They make certain statements, and ask for an investigation into them, and when we offer it they say it would be quite useless. The second reason why I believe this general impeachment of the administration is erroneous is because I do not find this general attitude which the hon. Gentleman says exists outside, as a matter of fact to exist in connection with the valuation. I find far more the attitude adopted by the hon. Member (Mr. M'Curdy)—some suggestion of legislative reform, which we shall certainly be only too glad to listen to, but, on the whole, no statement that either the valuation or the Act ought immediately to be swept away before the rising fury of the people of the country. That is also borne out by the actual statement of the facts as they are submitted to the Inland Revenue. The hon. Gentleman may make as much play as he likes with what he calls the ignorance of the landed proprietors of this country, and, if he likes, he can say that the small men in this country know nothing whatever about either what the valuation is made for or what the Act was intended for. It is not only the small owners. Men, with every expert advice which can be given and with money enough to spend as much as they like on expert advice, the owners of large landed estates, men to whom money is no object at all—[HON. MEMBERS: "Where are they?"] I see many hon. Gentlemen opposite. Men of that sort are equally subjected, as far as I heir real property is concerned, to this valuation, and if they were feeling a grave sense of injustice at the valuation which was served on them of course the great majority of them would be appealing at present, either first for a revision or afterwards to the Referees, who are purely impartial persons appointed by people altogether outside the Government. What are the actual facts of the case? The number of hereditaments valued up 28th February, 1913, was 3,770,000. The number of hereditaments the provisional value of which is the subject of appeal to the Referee is 4,466. The percentage of hereditaments subject to appeal to the total hereditaments valued was 118 per cent—that is, one in every 884. [An HON. MEMBER "Test cases."] I have nothing to do with test cases at all. I am dealing with the facts of the valuations and with the impeachment of the original valuations. It has nothing to do with the collection of Increment Duty at all, because the amount fixed by the Inland Revenue as the value of the land or the building, or both together, was different from that which the hon. Gentleman thought it ought to be.

Is that the total number or the number that happened to be under appeal at the moment?

I think it is the total number.

Otherwise the calculation is wholly erroneous.

The appeals against provisional valuations heard by the Referee have been twenty-one cases heard; withdrawn or disposed of, 188; total disposed of, 209. The whole number dealt with and now being considered is 473. That makes up a total of 682. Of the twenty cases which have come before the Referee on valuation—cases actually where the valuation was supposed to be erroneous—twelve were decided in favour of our valuers, five were decided what I might roughly call half and half—something between our valuers' decision and the suggestion of the subject—and three only were decided wholly in favour of the subject and against the Government Department. Under those circumstances, with that tiny percentage of disagreement, and with the further tiny percentage of disagreement in those cases not settled in conjunction with the subject, and in cases brought before the Referees with such an enormous percentage decided by those impartial persons in favour of the Government contention, surely it is monstrous to say that this great valuation is being conducted in such a manner as to cause general indignation in those subjected to it, or to say that the figures established in that valuation bears no kind of relationship to the actual value which people imagine it to be themselves. The whole charge, so far as the valuation is concerned, disappears upon examination. I have no hesitation in saying that if the hon. and gallant Gentleman were standing where I am now, and if—I agree that it is a very great assumption to ask him to accept—he were to accept the Act as it stands, and wished to criticise the action of the Inland Revenue in deciding what Parliament intended the valuation should be, he would have no kind of criticism to make. But his criticism is not against the Inland Revenue, but against the work of Parliament in setting up this valuation at all.

The next question raised was that brought forward in a very moderate speech by the hon. Member for Northamptonshire (Mr. FitzRoy) in connection with the valuation of agricultural land and the Increment Duty being charged on that land. He seems to think that in some fashion the decision in the Lumsden case has overridden the clear directions of Section 7 of the Act as to the exemption of agricultural land from the Increment Value Tax. I can assure him that he is wrong in that deduction, for Section 7 remains as distinct as it was before the Lumsden judgment was given. Section 7 is that under which the Inland Revenue has worked, and no increment value is charged upon agricultural land, whatever the price that agricultural land may be sold at, while that land has no higher value than the value for agricultural purposes only. That was the condition laid down after a very long discussion in this House. The final position of differentiation in building land, on the one hand, from agricultural land, on the other, is the question whether the land had a higher value than its value for agricultural purposes. In the Lumsden case the price was greater than the total value of the composite subject, and therefore Increment Duty was levied on the price apart from the agricultural value. Section 7 does exempt agricultural land, whatever the price may be, so long as there is no higher value than the value for agricultural purposes.

Does the right hon. Gentleman remember the case in which agricultural land was valued at a higher price?

I am not aware of the case, but I shall be glad to inquire into the matter.

It is a very important case, and perhaps the right hon. Gentleman might deal with the question.

I am quite sure that I am accurate in laying down the general principle, and if the hon. Gentleman opposite knows of any case in which, as he suggests, the Inland Revenue departed from the principle, I shall be glad if he will inform me.

There was such a case.

If the hon. Member will give me particulars of it, I shall be glad to inquire into it. The hon. Member for West, Aberdeenshire (Mr. J. M. Henderson) dealt very largely, I must confess, with subjects which were outside the scope of this Debate, and which require legislation if his wishes are to be fully met. The question, for instance, whether we ought to have maintained our first principle that self-valuation should be the method by which the work should be carried on, and that the valuation should afterwards be criticised by Government valuers, is not a question appropriate to to-night's discussion. The question was very fully discussed in this House in 1909, for better or for worse, and it was largely owing to representations from hon. Gentlemen opposite that the scope of the Bill was changed, and that the Government valuation, which has been so much criticised, was adopted. I agree it may be much more costly, but that, for better or worse, remains until legislation alters it. The hon. Member said that it was hopeless to search for site values. As a matter of fact, I might remind him that what he calls the fetish of site value has been sought for and found in the majority of the progressive countries of the world, and that that most distinguished body of men who, in 1901, signed the Minority Report of the Commission that inquired into Local Taxation not only stated that site values could be found, but recommended that special rates should be levied upon them. Then the hon. Gentleman criticised the question of minus value. There he raised a subject and made a criticism which, I believe, is entirely without foundation, so far as I have been able to inquire since he raised it. He said that minus values were now solely the product of his own native land, and that the method adopted in England is quite different to that which is adopted in Scotland. There are not only many minus values registered in England as well as Scotland, but the method of valuation is precisely the same in the two countries, whatever the ultimate effect of the entities there registered as minus values may be. I cannot go into that, for it is sub judice at present in the House of Lords. The ultimate effect will be exactly the same in the two countries. I do not think I need point out to the hon. Member that the mere fact that these values in one particular column of the valuation book are registered as minus values does not in the least affect the validity and accuracy of the general valuation. There is no suggestion in the valuation book, or in any statement made by any Minister, that any of the land of England is of minus value apart from the charges on the land. What occurs is that you have a charge on the land and buildings, and where the capitalised value of the charge on the composite subject is greater than the capital value of the land as a bare site, you may have an entry in the valuation book of the assessable value being of minus value. There is not the slightest difficulty in interpreting these values.

The Scotch judges have had difficulty.

No, Sir. What I mean to say is that you can register minus value, and you can, if you like, by an alteration of the law, if the House deems it expedient, where there is a fixed charge on the land and the buildings, levy the duty in the case of the original land without subtracting the fixed charge, and making it plus value without any further valuation. But a re-valuation should certainly be made if the House of Lords decides that minus values are not dealt with in the sense I have stated. In that case we shall propose immediately, in a very short clause, what would be only really an alteration which will make these minus values into plus values. It is quite easy, especially when you add the two things together or subtract two things. When the hon. Gentleman states that if this appeal goes against the Government the result will be to ruin the work of the Valuation Department, and that hundreds of thousands of properties, lands and houses will have to be revalued he is entirely remote from the facts altogether. All the subjects that are required in order that these minus values shall be represented as plus values are in the columns of the valuation book at present. It is merely a matter of adjustment. Here is another case with which the hon. Gentleman made considerable play. He said what is the good of the Inland Revenue valuing site value at all, spending hundreds of thousands of pounds on it, when, as he said, the whole House knows that under the Lumsden judgment site value is not wanted at all, and we might just as well by some imaginary x which he suggested put in any quantity whatever. That is also a statement which is utterly remote from the facts of the case, and which I should have thought that the hon. Gentleman who is as a rule a very accurate critic must have known to be so, because under certain circumstances—I must say they are very rare—where the price is different from the total value the Increment Duty is collected on the difference between the price and the total value, and therefore, says the hon. Gentleman, all you need know is the price and the total value. But in ninety-nine cases out of a hundred the price and total value coincide. In every case where property is sold in the open market the price and the total value do coincide, where property is sold by a willing seller to a willing buyer.

10.0 P.M.

In all those cases if the value has gone up, the total value and the site value, or if the site value alone has gone up, if you take the site value as from the datum line, the measure of the value, which is subject to payment, is the difference between site value deduced from total value, the price—say it is sold in 1914–in 1914, and the site value on the datum line as it was on the 30th April, 1909. So far from the hon. Gentleman being correct in his statement that the only thing we need is the difference between the price and the site value in order to obtain the Increment Duty, I say, without hesitation, that in ninety-nine cases out of a hundred in which Increment Duty is obtained or in which increment is found to be existing, it is a comparson with the site value of 1909 which gives you the whole subject of increment. What on earth either he or anyone would do with his imaginary x under those conditions altogether passes my comprehension. Then he states that in several cases the Department refused to allow amendment of obvious errors. I have no evidence of any such action of the Depart- ment. He complains of one case, and says that where an owner fails to specify the nature of the minerals and to give his estimate of the capital value that value shall be treated as nil. I suppose that no Clause of the Bill was more fully discussed than that when passing through the House of Commons. The Clause in the Act as it stands at present is that unless the claim is made the value shall be treated as nil. I remember that there was a very long debate on this point, but where the Board are given reasonable grounds for believing that the minerals claimed were of value to the owner at the time he made his return, and that he knew they had a value which by error or inadvertence was not inserted, the policy of the Board is to allow it, despite the fact that he has no right to claim it. I do not believe that the hon. Gentleman can bring before me any such case as he refers to—

I will send you the particulars.

If I receive the particulars I will examine them, but they may be like the great majority of the hon. Gentleman's particulars, which vanish when one comes to a close examination of them.

I challenge the right hon. Gentleman to give me one such case.

I will give one case. Last July or August he impeached the Inland Revenue for what he said was "making law" in laying down certain conditions as to where Increment Value should be levied. He said that in the case of a builder called Lumsden the Act was quite clearly in favour of Lumsden, but that the Inland Revenue "made the law" and insisted on Increment Tax when they had no right to insist on it, and he displayed great indignation in the House against officials of the Inland Revenue making laws which were contrary to the Act of Parliament. The matter went to the Court, and the Court said that the regulations of the Inland Revenue were in accordance with the Act of Parliament, and the Inland Revenue had no choice but to carry out the intentions of the Act of Parliament. That is what I mean when I say that these charges which are made prove on examination to be altogether without foundation.

My excuse for that statement is that I accepted the statement of the Chancellor of the Exchequer.

It is a very serious impeachment of the Inland Revenue officials, quite apart from the Chancellor of the Exchequer. Statements have been made as to statements of the Chancellor of the Exchequer in a most unfair, and in some cases almost scandalous, manner, and I may perhaps give one example with which I will conclude the speech that has occupied the House too long. The hon. Gentleman and all his Friends in the last Debate on this subject quoted a specific statement made by the Chancellor of the Exchequer which I could not trace at the moment. The statement was this:—

"Unless the bare value of the land as land, and apart from anything done to it in the meantime, has risen while the house was being constructed, it could not be taxed at all."

That, he said, is a very definite and specific statement made on the authority of the Chancellor of the Exchequer that under no circumstances shall any house or any land at whatever price it is sold be subject to Increment Value Duties unless the bare value of the land has risen. I have now found the original of this statement. It is a letter addressed to the "Times" of 29th October, 1909. It is taking up a definite case put before him by my hon. Friend the Member for Tottenham, with definite figures as to actual money spent, actual interest involved, and actual value that had been created. He says in Mr. Evans' case, so far as he can judge, no such thing would happen. On the contrary, the difference in charge in a case like this is fully provided for in the Bill. He says the value in that particular case has been created by the builder, and therefore the builder would not be taxed. He ends up:—

"I think I have made it quite clear that in a case such as this there is no reason for the apprehension expressed in the pamphlet that the builder would be taxed upon any value created entirely by his own enterprise and expenditure to an amount equal to or greater than the whole of his net profit upon the transaction. On the contrary unless the bare value of the land as land, apart from anything done to it, has increased while the house was being constructed, he would not be taxed at all."

With all respect to the hon. Gentleman I ask, Is there a more scandalous case in his memory of a, statement like that—of a statement like that referring to definite, specific figures put before him that certain values have been created, and builders are apprehensive that those values have been taxed? The Chancellor of the Exchequer has, on the figures given, stated that unless the value of the estate had been raised they would not be taxed, and that statement has been treated as a general one, covering all the decisions, and that the Chancellor of the Exchequer is breaking down the Act of Parliament. I speak with some heat on the matter, and I feel some heat upon it, because I have examples in which attempts have been made to state that the Chancellor of the Exchequer had laid down general propositions incompatible with the Act or with the decisions of the Courts of Law, and I have found that the cases have always been cases in which material facts, material facts in the letters themselves, have been omitted when brought by the hon. and gallant Gentleman before this House. In ninety-nine cases out of a hundred his statements have been actually and entirely irrelevant.

May I very respectfully suggest to the hon. Gentleman opposite that a different method of procedure might be adopted? We do not intend, we never have intended, and we never intended to tax builders' profits, and builders' profits are not being taxed now under the Increment Tax. If it is necessary, in view of the agitation which the hon. and gallant Gentleman suggests exists on account of wide misrepresentations and misstatements on this subject, more definitely and specifically to reassure builders in this country by terms stated in the Act, then we are quite ready to listen to any suggestion that may be made on the subject. That is not the attitude of the hon. Gentleman. He is not controverting any particular item; he is not controverting any matter that ought to be altered in the interests of the subjects; he is not really controverting the administration of the Act. He is engaged in trying to fan a general agitation against the tax, and more especially, in company with certain of his Friends, against the carrying out of the valuation. He has tried to destroy the valuation—not that he could possibly do it or get people to repent of having passed a law in favour of valuation—by continually nagging at the administration of the valuation, and by continual statements of isolated cases which he thinks he can make good, cases where error may have crept into the valuation. I say without any hesitation that the valuation has been carried out both in law and spirit, and is being carried out to-day in conformity with the desire of Parliament. Hon. Gentlemen opposite, in connection with agricultural land, say, "Oh, valuation will not form a proper subject as far as agricultural land is concerned in any future scheme of general taxation of land values." That may be so. That has nothing to do with valuation as it is at present being carried on.

As soon as this House has decided what kind of deduction it considers would be desirable to make for agricultural land in connection with any scheme of general taxation of site values there will be no difficulty at all in making those deductions under the Valuation Roll as it is being at present established. But to say that we are not to obtain the real site value because we do not make deductions from that real site value of improvements which have been made is really quite contrary to the knowledge of hon. Gentlemen on both sides of the House. It is perfectly easy to add another column to the Valuation Roll, giving not only the real site value of a field at the present time, but the value of that field when you have deducted from that real site value anything that you may attribute to improvements. You may deduct improvements made in ten years, twenty years, a generation, or a century; but it would be idle to ask the administrators of Inland Revenue to add that extra column in the Valuation Roll, and arbitrarily to decide among themselves to what extent they should deduct agricultural improvements, when, on the one hand, that deduction is not required for the purpose of taxation, and when, on the other hand, there are no instructions, either from the Government or the House, as to what figures will be required in accordance with any future scheme. When the figures are clear there will be no difficulty at all in the matter. I submit that I have been able, without any difficulty at all, to reply to such part of the case of hon. Gentlemen opposite as is relevant to the present Debate. No one would have greater pleasure than myself and my right hon. Friend, and indeed most Members on this side of the House, when the opportunity comes, if the hon. and gallant Gentleman and his Friends once more raise the whole question of valuation and Land Taxes, upon which I submit the country has made up its mind, and we shall be only too glad that the controversy should be carried on.

I should like to turn to another question, and ask the Government what they pro- pose to do with respect to the evidence that was given before the Committee on Irish Finance. The Home Rule Bill has been forced through a gagged House of Commons, and it is going to be passed into law under the Parliament Act without the public in the least knowing what was the opinion of those expert gentlemen who gave evidence before that Committee. I submit that that is an unconstitutional and an undesirable position. What really is the secret of this mystery and concealment? Are the Government merely afraid to publish this evidence? Are they afraid that this evidence, if it were published, would be damaging to their Home Bill. If it is damaging to the Home Rule Bill, it is all the more important that the public should have the chance of studying it before the Bill is passed into law. If it is not damaging to the Home Rule Bill, if it justifies the provisions of the Bill, surely the Government ought to welcome it and expedite its publication as soon as possible. I do hope that the Vice-President of the Board of Agriculture (Ireland) will really be able to give some reason for not publishing the evidence when he comes to reply. The Government have not only been suspiciously secretive about this evidence, but they have broken a definite pledge given to hon. Members of this House. On the 29th April last, in answer to a request for publication of that portion of the evidence in respect of which no pledge of secrecy was given, or was still insisted upon, the Chancellor of the Exchequer said:—

"If there is really any desire on the part of any body of Members of this House for the publication of the evidence in question, I will consider whether so much of it, as can he published, without disregard to the wishes of the witnesses, can be printed as issued."

The right hon. Gentleman the Chancellor of the Exchequer was then asked how he proposed to gauge the desire of hon. Members of this House, and he replied:—

"Through the usual channels there are methods by which hon. Members can communicate their views to the Government on a subject of this kind."

Then in reply to the Noble Lord the Member for Horsham, who asked him whether he would make inquiries as to how many witnesses would allow their evidence to be published, he said:—

"I think the first step would be a communication from hon. Members of this House expressing a desire of that kind. If there is such a desire—"

Let the House remember it was the desire of a large body of Members—

"I agree with the Noble Lord that the next step would undoubtedly he to communicate with the witnesses."

There is evidence of a direct invitation on the part of the Leader of the House, in the absence of the Prime Minister, for a Memorial to be prepared. What happened? After that absolutely clear and definite promise had been made, no less than 344 hon. Members of this House have signed a Memorial asking the Prime Minister to publish the evidence—that is to say a majority, not merely of hon. Members in ordinary attendance, but of the whole number of Members of this House, have rightly expressed the wish to the Prime Minister that this evidence should be produced and given to the public. The Chancellor of the Exchequer did not ask for a majority of Members. He pledged himself that he would immediately take action if "any body" of Members desired it. Practically the whole of the Opposition, the largest body of Members in the House, have signed the Memorial, as well as a very large number of hon. Members opposite belonging to the Liberal party, and nearly a score of Members belonging to the Labour party. It is not really fair to take the whole 670 into account. Members of the Government should be left out of the computation altogether, as, necessarily, one could not approach them in a case of this kind. I believe there are about forty Members of the Government, and, omitting those, that leaves 630 Members, so that 344 out of a possible 630 signatories have signed this Memorial, and that, to my mind, is a substantial majority whichever way you look at it. In spite of all this the Prime Minister has absolutely and deliberately disregarded the pledge made by the most important Member of his Cabinet, who was leading the House on that occasion in his absence, and he persists in refusing to give this House or the public any clue whatsoever to the real opinion of the experts who gave evidence on this all-important question. After all, the taxpayers' money has been spent on it to the tune of several thousands, and it is a public question of an urgent and very serious character. I have reason to know that various official and non-official witnesses have not the slightest objection to the evidence being published. Moreover, the Report which purports to be founded upon this evidence has been published, and is in direct conflict with the provisions of the Home Rule Bill. It is, it seems to me, in the interests of everybody that this evidence should be publicly sifted and weighed before the Bill passes into law.

I therefore submit that the Government, in withholding this evidence, in suppressing this all important information, are either withholding it out of sheer stupidity, which, of course, is unthinkable, because I think the present Government is one of the least stupid of Governments, or because, as I believe, they are anxious not to reveal what they very well know would be extremely damaging to the provisions of their Home Rule Bill. I only wish the Prime Minister were here, but I have no doubt the right hon. Gentleman the Vice-President of the Department has read the evidence, and will he deny that for instance the evidence of Sir Henry Robinson and of Sir Steyning Edgerley and of Lord MacDonnell and of Mr. Ennis is in direct conflict with the provisions of their Home Rule Bill. We know perfectly well from Lord MacDonnell's speech at the Economic Congress in January of last year, that in his opinion the true Irish revenue is undiscoverable without preliminary machinery which the Government have absolutely refused to set up, and that therefore a large proportion of the financial calculations made by the Government are mere guesswork, and probably out by hundreds of thousands of pounds. We know from the same speech that Lord MacDonnell, whose authority in this matter is second to none, considers that financial revision at stated intervals is indispensable; but the Government in their scheme have thrown over the principle altogether. We know also from the same speech that Lord MacDonnell considers that a contribution from Ireland to Imperial expenditure is obligatory upon them, but under the Bill no contribution is to be made. We also know from an article by Lord MacDonnell in the "Nineteenth Century" last year that in his opinion dual finance will prove disastrous, and that one uniform financial system in Ireland and Great Britain is absolutely essential—the very opposite policy to the one adopted in the Home Rule Bill. Surely the public ought to have Lord MacDonnell's evidence on the whole of this question, whatever shock it might give to the financial reputation of the present Government. We also know from a report of the General Council of County Councils in Ireland, signed by Mr. Ennis, another witness before the Committee, that in his opinion Ireland would be in a position to pay her way under Home Rule, and in addition to give a contribution towards Imperial expenditure. Surely Mr. Ennis' evidence would be most valuable to the public, who are asked under the Home Rule Bill to find about £2,000,000 every year to wipe out the Irish deficit. [An HON. MEMBER: "No."] Anyhow, a very considerable sum. Would it not be fairer to Ulster also that the evidence, for instance, of Mr. Milne Barbour, President of the Belfast Chamber of Commerce, and a recognised great authority, should see the light of day? To my mind the resistance of Ulster will be largely justified by the burking of this evidence, which the people of Ulster have every right to see. The Government have been asked several times for statistical information about Ulster, but they have always quibbled and fenced with the inquiry. The Secretary to the Treasury was asked on the 29th February last—

"whether he could give any estimate of the average amount of true revenue contributed by the province of Ulster in respect of Income Tax and Death Duties for the last three years for which the information was available, and the proportion which it bore to the whole true revenue of Ireland from similar sources."

His reply was that he regretted that "sufficient data was not available" on which to form an estimate. That is to say, although the right hon. Gentleman is able to give the whole true revenue of Ireland—an utterly undiscoverable quantity, according to the Committee itself—he is not able to give even an estimate of the true revenue from Ulster. He was asked again on the 6th March

"whether he could give in respect of any item whatsoever of Irish revenue an estimate of Ulster's proportion,"

but he again replied that

"any estimate of that kind would be untrustworthy."

Why should it be more untrustworthy than his other estimates of Irish revenue? I submit, although I want to be moderate in tone, that all this is mere shuffling. Was there no evidence given before the Committee on the question of the revenue derivable from Ulster? To my mind, Ulster has a right to know that before she accedes to the provisions contained in the Home Rule Bill. What about the Post Office? According to a letter written by Sir John Lamb, late Secretary to the Post Office in London, whose experience is second to none:—

"The Post Office provisions of the Home Rule Bill as they now stand are a danger to the defences of the United Kingdom in case of war."

Sir John Lamb also says:—

"It was my lot for many years not only to have the general management of the telegraphs of the country, but also to be closely associated with the naval and military authorities in arrangements for utilising these means of communication to control fleets and armies in manœuvres and in war. I feel myself entitled to warn my fellow countrymen of the three Kingdoms that the plan set out in the Home Rule Bill will weaken the defences of the Empire and injuriously affect the efficiency of the means of communciation of which our traders and merchants avail themselves in their relations between Great Britain and Ireland."

Mr. King, who was Comptroller and Accountant-General of the Post Office, gave evidence before the Government Committee. Surely this House, and the Committee, are entitled to know what evidence he gave? In the Debate on the Post Office clause I asked the Attorney-General whether this matter had been placed before the Committee of Imperial Defence: he gave no answer to the question. Therefore, it does seem to me doubly important that we should know here the opinion of the Post Office expert who was examined on this particular subject.

There is just one other consideration which strengthens the case for the publication of this evidence. Although the Government have suppressed the evidence they have published the Report of the Committee in which the evidence is referred to over and over again. On page 6 of the Report, for instance, the evidence of Mr. King is referred to in a very curious way. He is alleged to have given the Committee to understand that the extra postal machinery had been extended to Ireland, although the circumstances of Ireland did not justify the extension. Are we to understand that this public servant, Mr. King, committed himself to the statement that certain services had been extended to Ireland, not on account of her needs, but merely because of the political pressure that the Nationalist party were able to bring to bear on this House? Again, on page 7 of the Report, the evidence of several witnesses respecting the classification followed in the White Paper was referred to, and it is stated—

"that the members of the Committee disagreed with the evidence given by these officials."

Surely it is only right in these circumstances that we should see that criticism, seeing that the whole of the financial structure of the Home Rule Bill is based on these very White Papers! I think the general importance of this evidence is shown by the conclusion of the Committee, which is quoted on page 3 of the Report, and which is:—

"In consequence, the Paper (i.e., the Annual White Paper, however useful it may be for giving an approximate idea of the true revenues of Great Britain and Ireland respectively, could not serve as a sufficiently firm basis on which to found a permanent arrangement of the financial relations between the two countries, if 'true' revenue were to be taken as the determining factor in the settlement."

This being so, any official criticism by Gentlemen in the Treasury is of the utmost importance, and ought to be given to the public. Again, Sir Steyning Edgerley's evidence is referred to twice on page 19 of the Report, and is described by the Committee as "interesting." I really do feel that, although this may be rather a wearisome subject, I am justified in raising it, because about eighty Members of the Liberal party and twenty Members of the Labour party in the House asked for the publication of the evidence. In the case of the Indian Provincial Settlements—I am referring now to Sir S. Edgerley's evidence—they are officially described by the Government of India as representing—

"an attempt to solve a problem which arises wherever there exists a local Government in complete or partial subordination to a central authority."

Well, according, I imagine, to several sections of Home Rule opinion, that distinction is peculiarly applicable to the case of the present Home Rule Bill, and although there may be differences, and of course there are differences between India and the United Kingdom, the Committee, referring to the evidence given by Sir Steyning Edgerley and to the experience to which he referred them, say—

"Yet even so the experience of India is instructive."

Well, where is the evidence and where is the experience? I feel very strongly that the public and this House are entitled to have that evidence and experience placed before them. The Committee have seen the evidence and the Government have seen the evidence, and to my mind there cannot be anything so confidential that it could not be produced to the Members of this House. On page 21 the evidence given by Mr. Soward and Mr. Atterbury, of the Inland Revenue Department, are referred to; on page 23 the evidence on Income Tax given by several witnesses is referred to; on page 25 the evidence of Dr. Falkiner, Superintendent of Statistics, is referred to; on page 26 the evidence of Mr. Baird and Mr. Lewis, of the Irish Land Commission, is referred to; on page 27 the evidence of Mr. Bailey, Estates Commissioner, and Sir John Barton, Commissioner of Valuation, is referred to; on page 28 the evidence on the Irish Church Fund is referred to. In fact, the evidence of at least a dozen witnesses is referred to in the Report presented by the Government, although we are left completely in the dark as to what the real gist of the evidence was. I submit the Government have absolutely no right, seeing the evidence was referred to in a published report which cost public money, and seeing it is referred to—and this is a strong point—in order to influence the public mind one way or another, to withhold it from public inspection. I hope the Government will not continue to be obdurate in this matter. I tried very hard last year to get the information from the Government, and I have not given up hopes yet.

I think I know what the reply of the Vice-President will be. He will say the witnesses gave evidence on the understanding that the evidence would not be published. To my mind that is no argument at all. In the first place, the Government has no right to receive evidence on such an understanding. The matter was a public matter, and the country ought to know what it is being let in for in the Home Rule Bill, and in the second place the signatories to the memorial to the Prime Minister only asked for the evidence of those witnesses who did not object to their evidence being published. I do not believe that 5 per cent. of the witnesses, if they were asked, would have the slightest objection to their evidence being published unless the Government deliberately engineered refusal in order to prevent publication, which might damage the Home Rule Bill. At any rate, let them make the attempt, and it is all the easier to make the attempt because out of the twenty-eight witnesses who gave evidence twenty-two were official witnesses and members of the Civil Service, and it is the Government alone, as anybody knows, who can relieve them from any blame which might attach to the publication of the evidence they gave. And as for the remainder of the witnesses, it is most unlikely they would refuse permission if asked. I must apologise for detaining the House again upon this question, but it seems to me to come to this, that if the Home Rule Bill is a bad Bill, it is enormously important that the House and the electorate should see the evidence, and if the Home Rule Bill is as hon. Members opposite think it is, a very good Bill, then it will be to the Government's gain and prestige to produce the evidence and let the country see what it is.

I am very glad that we have the presence of a Cabinet Minister on the Government Bench. It is true that that right hon. Gentleman is more connected with the administration of the Army than with the administration of Ireland, but as he is here, and as I observed a short time ago that he placed his hand on his heart, I am under the impression that he is going to tell us, with his hand on his heart, that there is no concealed plot in the refusal of the Government to withhold this information, but that it is withheld in the true interests of the country. I think my hon. Friend has made a most convincing speech in support of his proposal that this evidence should be published. What are the facts? There was no obligation upon the Government to have a Committee, and they appointed it of their own free will. If they had desired a Committee consisting of the hon. Member for East Mayo (Mr. Dillon) and the hon. and learned Member for Waterford (Mr. John Redmond) to advise them, there would have been nothing to prevent them appointing those hon. Members. Possibly the information which those two hon. Members have in their possession and their great gifts would have been placed unreservedly at the disposal of the Government, and then the taxpayers might have been saved the expense which has been incurrd by this Committee. Had the Committee I have suggested been appointed as far as the House of Commons and the public are concerned the result would have been just the same. The only result of the inquiry which has taken place seems to be that the evidence given at the public expense is concealed from the public and the Members of this House. If the evidence was not considered satisfactory front the point of view of the Government, and they thought it would put a different interpretation upon their actions, then they might have said nothing about it. They might have said, "This Committee has issued a Report which is confidential, and we do not wish to say anything about it." The Government, however, publish the Report and leave out the evidence. What is the value of a Report unless you can read the evidence upon which it is founded? I now fall back upon the Secretary of State for War, and neither of us is a lawyer.

Yes, I am.

I am glad the right hon. Gentleman combines in his person the joint occupation of Secretary of War and adviser to the Government on legal matters when there is nobody else present. I put it to the right hon. and learned Member, what would he say if he were appearing in a Court of Law and evidence was given as to a certain report, and he said, "My lord, I should like to know on what evidence that report was founded," and the opposing counsel said, "Oh! we put in the report, but we do not propose to put in the evidence." Why, I am sure he would make a reply which would ensure him being made Lord Chancellor as soon as a vacancy occurred. It is apparent that it would be quite impossible for any learned counsel to put in a report when the evidence on which it was founded was withheld. The hon. Member for Stockton-on-Tees (Mr. J. Samuel) interrupted my hon. Friend when he said that this was a question which vitally concerned the taxpayers of the United Kingdom.

No. The hon. Member opposite stated that the deficit was £2,000,000, and I said it was only £1,500,000.

I think it is £2,000,000, but we will not quarrel about half-a-million. The sum of £2,000,000 is a large sum which the taxpayers have to pay for what is in my opinion a boon which will prove a very great evil to them. Taking it at £1,500,000, he ought to know why he should pay it, and whether it would not be possible upon the evidence upon which this report is founded so to frame the financial provisions of the Bill that instead of paying £1,500,000 he would have to pay nothing or possibly receive something. Why should we not receive a little from hon. Member's below the Gangway? We have in the past always been putting our hands into our pockets and handing the result over to hon. Members below the Gangway. Let us have a little the other way about. Let us see the hon. Member for Mayo (Mr. Dillon) put his hands in his pockets and hand the result on to my Constituents. I am sure that on their behalf I should be very glad to receive it.

The hon. Member will understand that there is no discourtesy on the part of my right hon. Friend the Chief Secretary who is unable to be present. I think there is a good deal being made in this short Debate out of a very simple matter. The Govern- ment appointed a Committee to inquire into certain matters regarding the finance of Ireland. It was stated at the outset that it was a confidential Committee to procure information for the guidance of the Government, and that it had no power to decide any question at all. All its members were informed that they were serving on a confidential Committee. That was the Prime Minister's reply to a question in the House on 26th October, 1911. It was also stated—and this is the important matter which hon. Members opposite are forgetting—that all the witnesses that were to be called had been assured that the evidence which they were to give would be confidential. It strikes me that fact makes all the difference in discussing this question.

Why was that done?

It was done, and I can see very substantial reasons for it being done. There were officials giving evidence, and it is not always such an easy thing giving evidence about Irish affairs. [HON. MEMBERS: "Why?"] These officials evidently did not feel perfectly free unless they had the guarantee that their evidence would be confidential. Now hon. Members cry out, "Why is not this evidence published? You have published the Report; why do not you publish the evidence?" What would have been said if we had published the evidence after giving a guarantee to the witnesses that it would be confidential.

Will the right hon. Gentleman deal with the pledge of the Chancellor of the Exchequer?

Yes, I have it here.

Read it.

I am going to read it. The Prime Minister said on the 19th February, 1912:—

"The Committee was appointed by the Government to undertake a purely confidential inquiry with a view to laying the foundation of legislation, and I think it would be entirely contrary to precedent to produce its Report before the legislation either founded upon it or ignoring it has been presented to Parliament."—[OFFICIAL REPORT, 19th February, 1912, col. 297,Vol. XXXIV.]

The Report was presented after the Bill was introduced. Its recommendations were not accepted by the Government in framing their Bill. If it had been accepted there would have been stronger grounds for the demands which have been made, and since repeated, that the evidence upon which the Report is made should be published.

The Chancellor of the Exchequer said on the 25th April, 1912, that it would be impossible to publish the evidence of those who had given it, on the understanding that it was confidential, but that the Government would consider the question of publishing the evidence of those who were willing to consent to their evidence appearing if there was any real demand made. The Prime Minister, on the 7th November, 1912, said—

The right hon. Gentleman is not reading the words of the Chancellor of the Exchequer's pledge of the 29th April.

The Prime Minister on the 7th November, 1912, made the following statement in reply to a question by the hon. Member for Aberdeen (Mr. Pirie):

"This was evidence given confidentially which the Government are not in the least degree obliged to publish, and which they could not publish without the consent of the witnesses. I said that if a general desire on the part of the House was expressed, I would see whether that seal could not be removed. Such a general desire has not been expressed."—[OFFICIAL REPORT, 7th November, 1912, col. 1438, Vol. XLIII.]

These are the words of the Prime Minister, and that seal in certain cases, I am personally aware, has not been removed, and cannot be removed. That is the whole question, and after all it is a question of twenty-two witnesses, many of them high officials in Ireland, and they were called upon to give evidence affecting in many cases themselves and their future and a great many issues, and they were assured that their evidence would not be published; that it would be treated confidentially. The Report was published at the request of hon. Gentlemen opposite, but I think it would be a scandalous thing if, after having induced witnesses to give evidence on the ground that it would be confidential, the Government now at the bidding of anybody who tried to make it public—

The Chancellor of the Exchequer gave a promise.

The Chancellor of the Exchequer could not promise to violate a pledge of the Government without the permission of these men.

With the witnesses' consent.

I have personal knowledge that there are witnesses who refused.

What about those who consented?

He could not publish evidence in pieces like that.

Why not?

Because we do not think we ought to do it. We do not think it would be right. Men cannot be treated in that way. There is another reason why we should not do it. I have heard something about "back numbers." Surely this is a "back number" now. The Finance of the Home Rule Bill has been incorporated in the Bill which has passed through this House, and has gone to the other House. Surely there were abundant opportunities of discussing the whole question.

No, no!

I have been about as long in the House as the hon. Baronet, and I have said publicly, and I should like to say again, that I have heard many Bills discussed, but I have never heard a Bill discussed so fully in all its points, and so arranged to be discussed, since I came into Parliament. I am perfectly certain the finance of the Bill has been fully discussed and the judgment of the House has been taken upon it, and I fail to see that there is the least necessity for breaking a pledge now, because the whole thing is practically settled.

That is all the more reason for publishing it.

That is a matter of opinion. The hon. Member for Salisbury (Mr. G. Locker-Lampson) has raised the question first about the Report, which he got, and now about the evidence, which I am afraid he cannot possibly get. It is not through any discourtesy to him, but really it cannot be done; it would be impossible for him to get the evidence in any such way as he asks.

I was surprised at the interruption of the hon. Baronet (Sir F. Banbury) with regard to the alleged deficit under the Home Rule Bill. It is a general practice for hon. Members opposite to charge Members on this side, and especially the Irish Members, with putting their hands into the pockets of the British taxpayers for this deficit of £1,500,000. If any hon. Member of this House is respon- sible for that deficit it is the hon. Baronet himself. Anyone who has studied the White Paper showing the revenue as between Ireland and England under Home Rule and the Report to which reference has been made, or the articles written by Lord MacDonnell, must know that had it not been for two items the revenue of Ireland would balance the expenditure. The two items which make up the deficit of £1,500,000 are due entirely to the policy of the late Government, of which the hon. Baronet was a very pronounced advocate and supporter. The first item is the Local Government Act, 1898. I was a Member of the House at that time. So was the hon. Baronet, who supported the Government in regard to that Act.

I am afraid that is beyond the scope of the present Bill.

I am trying to show h this deficit is made up.

The only matter open to criticism is some action of the present Government.

I understood that an hon. Member opposite was allowed to discuss the deficit. I want to show that the deficit is entirely made up of two items, one under the Local Government Act, 1898, of £730,000, and the other under the Land Purchase Act, 1903, of £760,000.

May I tell the hon. Member that I voted against the Second Reading of the Land Purchase Act, 1903, and also against the Third Reading.

I believe the hon. Baronet was a strong supporter of the Government which passed the Local Government Act, 1898, which is responsible for £730,000.

It is quite enough to criticise one Government at a time.

It is only right when the charge is made that we are putting our hands into the pockets of the taxpayers to make up this deficit, that the taxpayers should know how that deficit is made up. I remember quite well when these matters were under discussion, espcially the Irish Local Government Act of 1898, that the hon. Member (Mr. Dillon) himself strongly protested against Ireland being charged with this sum of £730,000, which has become a charge against the Imperial Exchequer since then. If it had not been for these two factors the Land Act of 1898 and the Land Purchase Act of 1903, I believe Ireland would have been able to pay its way to-day without any deficit at all, and it is only right that when hon. Members make this charge against the Government of placing this deficit under the Home Rule Bill against Great Britain, these facts should be made known so that we should have a clear understanding that it is not the Irish Members who are responsible for it, nor the present Government, but the Opposition when they were in power.