I am sure, Sir, that I shall not ask in vain for the patience and indulgence of the Committee. I stand in great need of both, for the Committee are aware that the task imposed upon me to-day is one of no ordinary difficulty. My first duty is to state to the Committee the financial condition of the country during the year which has just concluded. The Committee are well acquainted with the adverse circumstances which beset that year. The rise in commercial and general prosperity which, beginning in 1886, culminated in 1890, has been followed by a gradual fall, accelerated in its velocity, till we may hope that it reached its nadir in 1893. That unfortunate year has laboured under accumulated misfortune—the financial difficulties in America, financial embarrassments in Australia, the disturbance of trade in India, the labour disputes at home, the general depression of agriculture, aggravated by the special circumstances of the drought, affecting crops in the South of England; each and all of these might in themselves have been causes which would adversely have affected the Revenue, but which, in their combined effect, might have been expected to produce the most unhappy of consequences and a collapse of the public finance, such as that which we have witnessed in several foreign States in the present year. England, from her universal trade, is more susceptible than any other State to external disturbances of this character. In spite of these adverse circumstances, the Committee are already aware that the condition of the public balance-sheet is by no means so deplorable as a few months ago most people anticipated and believed. On the contrary, taking into account the whole situation, that balance-sheet will show, I think, in a striking manner, the soundness of your finance and the unbroken solidity of the resources of the nation. The first six months of the year were apparently disastrous; but the law of average has prevailed, and the second half has redressed the balance, as the summer drought has been succeeded by the winter rains. My first business is to lay before you the yield of the Revenue in the year just concluded, as compared with the Budget Estimate and with the yield of the preceding year. In doing this, I am afraid I shall trespass much on the patience of the Committee, although I will endeavour to do so as little as possible. The first head is that of Customs. The Budget Estimate was £19,650,000. The amount paid into the Exchequer in the year 1893–94 was £19,707,000, or exceeding the Estimate by £57,000. I venture to think that this is a pretty close and satisfactory calculation. What is more material to observe in all these cases is the net receipt, which is the true comparison of the yield of Revenue belonging to the several years. The net receipt on the Customs had been, for 1893–94, £19,712,000, as compared with £19,619,000 for the year 1892–93— that is, yielding an increase in 1893–94 of £93,000. Under the circumstances, I think I may say that is an astonishing figure. The principal items which deserve observation are — first, foreign spirits. In these there is an excess of £39,000 on the whole; a large diminution on rum; but still larger increase on other spirits. Rum seems to be a very fluctuating quantity. The consumption of it prevailed largely in former years. Next, as to tea. Here there has been an excess of £101,000 over the receipt in the preceding year, and an increase of 6,000,0001b., or 3 per cent. on the whole consumption. Coffee, including cocoa, shows a decrease of £15,000. Coffee is always a diminishing quantity, even with increase of population. Tobacco shows an increase of £2,000. It has been a stagnant quantity, and a good deal below the estimate. In dried fruits there is an increase of £20,000. On wines there is a decrease of £58,000. The consumption of wine has been constantly and rapidly diminishing. In 1876 the total quantity consumed was 18,600,000 gallons. In 1893 it was 14,150,000 gallons, or a diminution of 4,450,000 gallons. Strong wines— i.e., port, sherry, &c.—have fallen from 11,000,000 gallons, in 1876, to 4,700,000 gallons in 1893—a decrease of 6,300,000 gallons, showing the great change of taste for these stronger wines. Light wines, including sparkling wines, on the contrary, have increased from 7,600,000 gallons, in 1876, to 9,500,000 gallons in 1893, or an increase of 1,900,000 gallons. These lighter wines come in at a lower duty, and the yield to the Revenue has fallen from £1,750,000, in 1876, to £1,200,000 in 1893, or a loss of £550,000, equivalent to one-third of the whole duty, since 1876. The loss this year has again been far beyond the estimate. If \re leave out of account wines, which are an article of consumption of the wealthier classes, the total produce of the Customs for the year 1893–94 would be £152,000 in excess of the preceding year, on what may be called the staple articles of consumption of the mass of the people. I venture to think that this is not only financially, but socially, a most satisfactory return. It shows that on the main taxable articles, which constitute the comforts of the people, there is no evidence of pinching, no sign of diminished resources or consuming powers in the mass of the nation; but that, even in this trying year, there has been a substantial increase. I now turn to Excise. The estimated yield for the year 1893–94 was £25,100,000. The amount paid into the Exchequer was £25,200,000, or £100,000 more than the estimate. The net receipts have been £25,247,000, as compared with the net receipts of £25,283,000 in the preceding year. That is a net decrease of £36,000, which is insignificant on such a total as £25,000,000. Pursuing the remarks I have made on the Customs, I may say that it is upon Excise, perhaps, that falls, first and most heavily, the weight of unprosperous times, of diminished wages, and lessened consuming power in the people. A decrease of £36,000 on a Revenue of over £25,000,000 does not indicate any falling off of consuming power. The particulars of this head are deserving of notice. As to spirits, the Spirit Duty receipts were £15,190,000, or £50,000 more than the estimate. Up to the middle of August, 1893, the duty had fallen off by £340,000. But by the end of the year the decline, as compared with the former year, was only £94,000 I am bound to say that this is possibly and even probably due in part to those nervous anticipations of the Budget which overtake some members of the trade in the last days of the financial year. Very often, just before the Budget, larger quantities of spirits are taken out than properly belong to the consumption of the year. It is remarkable that the loss on spirits has been compensated by the gain upon beer. On beer the net receipts have been £9,537,000, or £132,000 more than the estimate, and £91,000 more than the receipts of the previous year. The consumption is the highest on record, exceeding any former year by £80,000. I believe that this has something to do with the drought. I am told that when the weather is hot there is more beer and less spirits drunk, and that when the weather is cold there is more spirits and less beer drunk. At any rate, we find that the decrease in the consumption of spirits is almost exactly compensated by the increased revenue from beer. The Laud Tax and House Duty was estimated at £2,460,000, and the amount paid into the Exchequer was exactly the same. Post Office and Telegraphs were estimated at £13,080,000, and the actual receipts have been £13,010,000. The Post Office receipts have been £130,000 less than the estimate, and the Telegraph receipts have been £60,000 more than the estimate. Miscellaneous receipts were estimated at £1,950,000, and the actual receipts were £2,058,000. I next turn to the important and critical head of the Income Tax. There has probably been no year more adverse in its circumstances to the yield of that impost than the year 1893. The estimated produce was £15,150,000. The amount paid into the Exchequer was £15,200,000, or £50,000 beyond the estimate. It is said that that is due to measures taken to get in the Income Tax. But that is not so. We have not in the past year, because it was a year of deficit, pressed in the last penny we could get. Had we done so we should have avoided a deficit altogether. It was rather tempting when I had the money in hand; but we have not sought to deplete, nor have we depleted, the Income Tax receipts of this year to make up a deficiency in last. Now, if you add together the heads of revenue which I have enumerated, and also Crown Lands and interest, you will find they represent receipts amounting to £78,273,000, and the variation from the estimate upon this vast sum amounts to only £233,000, and that is in excess of the estimated receipts on those heads. We may say, therefore, that on more than three-fourths of the whole Revenue the outcome has fairly exceeded the estimate. There remains practically only the Stamp Revenue to be taken into consideration, upon which alone there appears a serious falling-off. The Stamp Revenue was estimated to yield £13,600,000, as against the net receipt for 1892–93 of £13,788,000. The net receipts in 1893–94 under this head have been £ 12,799,000, showing a falling-off of £989,000 as compared with the previous year's yield, and £800,000 below the estimate. Stamps are divided into two principal heads—first, what may be called business stamps; and, secondly, the Death Duty stamps, which form the far larger portion of the whole. The figures for the business stamps are as follows:— Estimated receipts, £5,500,000; net receipts, £5,222,000. That is, less than the estimate by £278,000; and the falling-off in the net receipts as compared with 1892–93 was £215,000. The stagnation on the Stock Exchange and the Money Market and the wise indisposition to embark on new enterprises at home and abroad fully account for this decrease. The yield of the Death Duties requires special notice. The net receipts on Probate and Estate Duty are £60,000 less than the preceding year. This is not a material reduction on a total of nearly £4,000,000, it being merely a decrease of about 1¾ per cent. Shrinkage of values in so many securities shows there must have been large increase of wealth and savings in other directions. On Legacy and Succession Duty there is a very heavy falling-off in net receipts— £714,000 as compared with 1892–93, and £316,000 as compared with the estimate. The produce of these duties, however, depends so much upon consanguinity—a large property going to a child producing comparatively little, while a property of similar value going to a stranger produces a considerable sum—that it is difficult to make an estimate of its yield. The yield of these duties during the year 1892–93 compares not unfavourably with that of 1891–92. The right hon. Gentleman opposite and hon. Members generally know what an extraordinary rise there was in these duties in the year 1891–92, which is called the "influenza year," when the increase in consequence of the great number of deaths amounted to nearly £1,000,000, and therefore in estimating the produce of these duties we must not judge by the standard of that year. Taking the whole into account, the total Revenue paid into the Exchequer in the year was £91,133,000, as compared with the Estimate of £91,640,000, showing a deficiency of Revenue of £507,000, a variation from the Estimate of about ½ per cent. only. Before we leave the Revenue Accounts I should like to make the remark that the fact that, after a period of disturbance and depression like that through which we have passed, we should have realised the Estimate within ½ per cent. on a total of over £91,000,000 (or, if we add the revenue paid to Local Authorities, on a total of over £98,000,000) is, I think, a marvellous accomplishment. It is a striking testimony, first, to the solidity of your financial system and resources; and, secondly, to the great sagacity and experience of the able permanent staff upon whom its administration mainly depends. Those who have watched this matter with a knowledge of the vicissitudes which put at hazard such calculations in the most serene times may well applaud the skill of those who, in the exceptional difficulties of the last year, have achieved so successful a forecast, and I am sure I may invite for them the merited approbation of the Committee. Besides this evidence from the Revenue Receipts, the indications of the Savings Banks are equally satisfactory. The net receipts on the Post Office and Trustee Savings Banks, which were in 1888–89 £966,000, in 1892–93 £2,200,000, were in 1893–94 £3,400,000. There has been an increase of £1,000,000 since the Savings Bank Act of last Session came into operation. The most recent figures since the date of the enlarged limits of deposit are very remarkable and encouraging. The net cash deposits from December 21, 1892, to March 31, 1893, were £2,147,000, and from December 21,1893, to March 24, 1894, which was one week less, they were £3,220,000, or an excess in three months of over £1,000,000. Leaving this question of the Revenue, a general review of the condition of the people, derived from these different sources, is not unsatisfactory. In the first place, there is no sign of any diminution in the resources or consuming power of the wage-earning class. Secondly, the Savings Banks Return proves that they have the power and the desire to lay by their economies. Thirdly, as regards the wealthier classes, though, as we are well aware, there have been serious diminutions of income from agricultural depression and shrinkage of dividends, the stability of the Income Tax and the Probate Duty shows that their losses have been to a great extent recouped by a growth of wealth and savings in other directions. I will ask the Committee to pause for a moment at this outcome of what may truly be called an ill-starred year. I ask you in no invidious spirit to consider how the British system of finance, currency, and commerce has stood the storm and weathered the gale. Compare it with the results in other States who have relied upon different principles of commercial, financial, and monetary policy. You will find, I think, nothing which should encourage you to adopt inflationist doctrines or protectionist practice under the severe experience through which we have passed comparatively unscathed. It is a practical warning not to allow ourselves under the occasional pressure of distress to listen to the counsels of empirics and shake the solid foundations upon which British credit stands. I now have to set against this history of the Revenue of 1893–94 that of the Expenditure defrayed within the year. The Budget Estimate for 1893–94 was £91,464,000, and the amount issued to meet expenditure was £91,303,000, or £161,000 less than the Budget Estimate. There were Supplementary Estimates as follows:—For the Army £195,000, for Education £224,000, for South Africa £89,000, and for sundries £84,000, making a total of £592,000. If there had been no Supplementary Estimates there would have been a good surplus: but I do not complain, because the Supplementary Estimates amount to about £125,000 less than the average of the previous five years. On the other hand, the savings from issues of the previous year and on the year amounted to the sum of £743,000. This shows a difference of £161,000, and that on the right side, on an estimated expenditure of £91,500,000, which is pretty close. As I have already said, if I had chosen to press the collection of Revenue abnormally, and especially the Income Tax, I could easily have transformed this deficit into a moderate surplus. But I did not regard this as sound finance. As it is, I may incidentally mention that the Revenue of the year has been, in fact, more than sufficient to meet the true Expenditure properly belonging to the year, for there was under the head of Expenditure a sum of £290,000 issued to the Naval Defence Account, which belongs to the Naval Defence Debt Fund, and not to the proper Expenditure of the year. I shall have occasion to refer to this item later on. With regard to the balances in the Exchequer, we commenced the year 1893–4 with a balance of £5,083,000. We closed the year with a balance of £5,977,000. There was outstanding on March 31, 1894, and since repaid, £750,000 in the form of advances on Ways and Means, making the true balance £5,227,000, or £144,000 better than last year. I will now state the figures relating to the National Debt. The Funded Debt in the course of the year has been reduced by £1,902,000, the capital value of the Terminable Annuities by £3,629,000, the Savings Banks deficiency by £385,000, and the other liabilities by £158,000, making a total reduction of £6,074,000. On the other hand, there were additions under the Barracks Act £673,000, and under the Telegraph Act£164,000, making a total of £837,000; so that the gross liabilities were reduced by £5,237,000. After deducting a small diminution of assets, £264,000, the net reduction will be £4,973,000. In addition to this, there is available the greater part of the New Sinking Fund, £1,601,000, on which I shall have something to say presently. So that we may consider that the sum available for reduction in the year will be £6,574,000. I have always been desirous that the amount of the Unfunded Debt, so far as it may be considered a Floating Debt in the hands of the public, should be reduced. This has been effected in the present year by close upon£3,000,000, which have passed from the hands of the public into those of the National Debt Commissioners, though the amount of the Unfunded Debt has actually been decreased by an inconsiderable sum only. The Unfunded Debt in the hands of the public is now only £11,600,000, and it is expected during the course of the present year it will be further reduced by £750,000. This completes the Statement relating to the year which has just concluded. I now turn to the more interesting prospects of the coming year. I wish I could promise they would prove equally satisfactory. The Committee are familiar with the estimated Expenditure for which I have to provide. The total for which I have to provide, being £95,458,000, is larger than the amount I had to provide a year ago—namely, £91,464,000—by the sum of £3,994,000. The only head under which there is any material decrease is under Consolidated Fund Services, mainly owing to the cesser of the annuity, £200,000, set up to repay debt created for purchase of Suez Canal shares, and now discharged. Of the total increased provision that has to be made, the demands of the Admiralty account for £3,126,000. The increased pro vision for the Civil Service is £558,000, of which the main item is £470,000 for Education. My right hon. Friend the Vice President of the Council has his quiver full, and I do not grudge him that increased sum for the better education of the country. The remainder of the increase, £88,000, is for Public Works. There is an increased provision of £300,000 to be made for the Postal Services, balanced, I am sorry to say, by an estimated increase in revenue of only £180,000. But this great total of £95,458,000 does not represent the entire amount which the Chancellor of the Exchequer has to provide. He has, in addition, to find about £7,250,000 for local expenditure—that is, for expenditure met out of revenue which is handed over to the Local Authorities; so that the real total which he has to raise for the service of the year has now amounted to about £102,700,000. It is not my business to discuss the Estimates or Expenditure. What I have to do is to find the money. I should, however, like to call the attention of the Committee to the growth of Expenditure in this country. If you take the Return of my right hon. Friend the present Secretary of State for India, and compare the Expenditure in 1875–6 with the estimated Expenditure for 1894–5, I find that the increase in the total annual Expenditure in those 20 years is £23,823,000. Of this the in- crease on the Army and Navy amounts to £12,000,000, the increase on Education is £6,200,000, and the increase in grants to Local Authorities is £6,500,000. These represent the main items. There is only one head of reduction, and that not a very satisfactory item of economy. I refer to the diminution for the liquidation of the National Debt, amounting to £1,739,000. I ask the Committee to observe these figures. Your Expenditure has increased far more rapidly than your Revenue, and, in these conditions, you must expect the consequences. You are not in a position to remit, but you are under the obligation to impose, taxation. That is the rate at which you are living. Under such conditions relief of taxation is impracticable; your Expenditure grows faster than your Revenue. What are the resources with which we have to meet this Expenditure? I now come to the Estimate of Revenue for the current year. There is a popular impression that, looking at the results of last quarter, we could anticipate this year a considerable increase of Revenue. I am sorry to say that is not the case. In some items, yes; but not upon all. Customs for the current year we take at £19,850,000, an increase of about £140,000 above the Exchequer receipts of last year. Excise we take at £25,060,000, or £140,000 less than the Exchequer receipts of last year. This is due to accelerated payments at the close of the last financial year. Stamps we put at £13,080,000, or more than the Exchequer receipts of last year by £220,000. We count upon some recovery on this head. We estimate the duties from Land Tax and House Duty at £2,470,000, or £10,000 more than the Exchequer receipts of last year. Income Tax we take at £15,200,000. This is the same as the Exchequer receipts of last year. The arrears at the 7d. rate are set off against the expected decrease in the yield owing to the substitution of a bad year (1893) for a good year (1890) in the assessment on trade profits. Each penny we estimate will yield £2,130,000. I take the Revenue from the Post Office and Telegraph Services at £13,190,000, that is an increase over last year of £180,000— £100,000 on Post Office and £80,000 on Telegraphs. Crown Lands I put at the same figure as last year—namely, £420,000. In regard to interest on loans, &c, this head of Revenue rarely varies; but this year it will be £82,000 less than usual, owing to the cessation of payment by Egypt in respect of the Suez Canal shares. Miscellaneous Revenue we cannot put higher than £1,550,000, about £500,000 less than the receipts of last year. The decrease is mainly due to our not having again such windfalls as we had in 1893–94 in the shape of— (1) a payment from the Treasury Chest Fund, £300,000; and (2) arrears of the previous year, nearly £200,000. This is the main item in the decreased Estimate of Revenue for the current year. The total estimated Revenue will, therefore, be taken at £90,956,000, or less by £177,000 than the Exchequer receipts of last year—namely, £91,133,000. But, if we leave out of account the decreases under the head of Interest and Miscellaneous Revenue, amounting to £590,000, the yield of the taxes and Post Office combined is taken at an increase of £413,000 over last year—not so large an increase as has been generally supposed, but as large as, under the circumstances, I feel justified in making. I will now give the balance-sheet for the year 1894–95, on the basis of the existing taxes as they stand. The total Revenue is £90,956,000; the total Expenditure is £95,458,000; and the deficit to be met will thus be seen to be £4,502,000—a very formidable sum to deal with. How is this vast deficit to be met? I answer, first, and emphatically, not by borrowing. Not by abandoning the fixed and permanent provisions for the liquidation of the Debt. This Expenditure does not partake in any sense of a permanent character. It relates to things which perish in the using, which perish still more in the fashion. The period of a battleship is as fickle as that of a lady's bonnet. Next season we shall be told that all we have done and are doing is superseded, and the amateurs, like the ladies, will tell us we have nothing to wear. We do not, therefore, propose to break up the fixed charge or permanent fund set apart for the reduction of the Debt. To take such a course in time of peace in order to meet expenditure which we regard as indispensable, not exceptionally, but as a part of the regular demands for the defence of the country, would be a fatal and a cowardly error, unworthy of a great nation. I pray the Committee to consider the vital consequences, alike in peace and in war, of this great, perhaps the greatest of all national reserves—a reserve not less valuable, even more valuable, than the Naval and Military Reserves. In peace time our financial credit depends upon the confidence which is felt that the nation is ready and willing to make all the sacrifices necessary to meet its needs and obligations; that its policy is not to increase, but to diminish, the Public Debt. The stability of your currency and your commercial prosperity is very greatly sustained by the constancy and fortitude with which this principle is maintained. I will invite anyone who doubts this to regard the effect upon their finance in other States where great military expenditure is promoted in peace time by borrowed money. In time of war this fund becomes a priceless resource—a resource not less powerful than ships, or guns, or men. Indeed, it is the source from which all these are provided and maintained. What is indispensable is that at the commencement of the war you should be in a position to expend at once, and instantly, vast sums, which are necessary under the conditions of modern warfare, for a sudden and vital struggle. The Permanent Debt Fund provides you with this reserve. A fund of £6,000,000 or £7,000,000 will enable you, even without raising taxation, to command an immense sum. The Debt Fund represents the interest of, say, £200,000,000 of money. You could not do a more unwise or spendthrift act than to dissipate in peace this great reserve. It is your "war chest." Let nothing induce you to shirk this primary obligation. If you desire to impress on foreign nations a conviction of your strength and your resolution to maintain your Empire, do not by a culpable weakness give any room for the belief that you are wanting in the resolution to make the sacrifices which are necessary. The opinion of strength is as potent as the means to exert it. Let us sustain by our conduct the might of this opinion. These are present demands to meet present needs. We have no right to shuffle them off our own shoulders and foist them on our successors. Think of the sacrifices which your fathers made in respect of taxation for that which they deemed necessary for the good of their country, with not one-half the population, with not one-tenth of your wealth. What was the taxation they consented to endure? The burden of the interest of the Debt, in their days, was a great deal more than half the Revenue; today it is not one-fifth part. We have no proposals to make which will have the effect of diverting from the discharge of Debt any part of the Permanent Fund which is now applicable to its liquidation. With us that is fundamental. But there are debts and debts. There is the old debt bequeathed to us by past generations. There is, unfortunately, a new debt, transmitted to us by the last Parliament. They are both debts which we are equally bound to discharge. I will speak now of the most recent debt. It consists of various sums which have been borrowed under the Imperial Defence Act and the Naval Defence Act; which were borrowed for works now completed, and which have no application to any existing expenditure. They constitute a mortgage on our present Revenue. Their amount is:— Under the Imperial Defence Act, £2,600,000; under the Naval Defence Act, £3,146,000—total, £5,746,000. In order to defray these new debts a charge has been created on what would otherwise be the Revenue of the present year. I ventured at the time to protest against this proceeding, as throwing on future years a burden which they ought not to bear, and which, as has proved to be the case, they might be less able to bear than the years in which the debt was incurred. This plan of proceeding can never have been adopted except under the belief that the programme of the Imperial and Naval Defence Acts would have so abundantly equipped our naval and military establishments that upon their completion there would arise an opportunity for reduction rather than an increase of Expenditure. This was the view taken in 1887 and 1888 by the late Government, when large reductions were made in the Naval Estimates on the ground of the great additions made under the Northbrook programme. Except upon this hypothesis the whole proceeding would have been utterly unjustifiable. I desire to make my acknowledgment to the right hon. Gentleman opposite, the author of that plan, for the statement he made in the House of Commons on Thursday last—a statement which was extremely candid and extremely honourable to him. I will remind those who were not present of what my right hon. Friend said—

"I will be quite frank with the Committee. The Secretary to the Admiralty has said that he is sure that, if I had known that our naval defence programme was not to be an exceptional effort, I should not have taken the particular financial step I did take. I think he is right. I admit that we did consider it to be an exceptional effort; we were wrong. At that time no one thought that it would be necessary to make additional proposals, like those now made, and I make a present to my political opponents of this statement, that if we had foreseen the final result we should not have taken the particular financial steps which we did take."

I think that is a most candid and honourable statement, and I hope I shall not, therefore, be regarded as acting in any manner as hostile to his policy when I suggest to the Committee a method for dealing with that debt. I hope even to have the assent in the manner of dealing with it of the right hon. Gentleman himself. This is a debt in the plainest sense of the word, and it must be cleared off. Indeed, a new debt is worse than an old debt, because it is the mark of an active deterioration and decay. It is a new encumbrance, which must be liquidated either before or concurrently with the old debt. The least we can ask is that, when we are called upon to cope with the immense charges we have to meet, the existing revenue of the year should he relieved of these extraordinary burdens before we are called upon to impose new taxes. This new debt so contracted must be wiped out as part of the general debt charge out of the fixed fund appropriated for that purpose. Let me remind the House of what are the constituent parts of the present fixed fund for the liquidation of debt. In round figures they are—(1) Annuities (about) £4,800,000, (2) new Sinking Fund £1,800,000, making £6,600,000. The old Sinking Fund is unfortunately at present a minus quantity. As regards the Terminable Annuities, I see the greatest objection to meddling with them. They ought not, except under the greatest extremity, to be disturbed at all. I held that view in 1886, and I do not propose to disturb the Terminable Annuities at all. There remains the new Sinking Fund, which I propose to appropriate to the discharge of this new debt until it is liquidated. The new Sinking Fund for the past year amounted to £1,827,000, of which £226,000 has been already appropriated to the payment off of the 3½ per cent. Annuities, so that the balance was £1,601,000, which has been held back in the hands of the National Debt Commissioners. The new Sinking Fund of the current year will amount, at a moderate estimate, to £1,850,000. I shall have this year from the two Sinking Funds a sum of £3,451,000, which will go in part discharge of this debt. At the close of the present financial year the Imperial and Naval Defence Loans (£5,746,000) should be reduced to about £2,300,000, which will nearly be cleared off by the new Sinking Fund in 1895–96. In this way the Revenue of the present and future years will be relieved from this encumbrance, and there will be the additional advantage that the public accounts will be freed from the confusion in which they are now involved by these enactments. Provisions will be inserted in the Budget Bill to enable these transactions to be carried out. As a consequence of the liquidation of the debt the Revenue will be relieved of these charges to the extent I have stated. They will also enable the Revenue to receive sums of money of which it has been deprived by the plan of the Imperial Defence Act. The interest on the Suez Canal shares is mortgaged for four years to come to the extent of £600,000 a year. If the capital sum so borrowed is discharged the Revenue derived from these dividends will be available for the Exchequer, and for the present year they will amount to £260,000. We shall have further relief from the discharge of this debt in regard to the interest on the debt which is now charged upon the Army and Navy Votes. Those Votes bear a charge of £145,000. There is also a sum of £289,000, which belongs to the Naval Defence Account. It is money which has been paid over to the Naval Defence Account in excess of the authorised expenditure of £10,000,000. This sum under the existing law would be applied to repay the loan under the Naval Defence Act, but, the loan being liquidated by the Sinking Fund, this sum may be properly restored to the Exchequer. I will just sum up what will be the effect upon the Revenue of the present year. The annuity now charged upon the Consolidated Fund and the Naval Defence Act is £1,429,000; interest on the Army and Navy Votes is £145,000, making £1,574,000. That will reduce the estimated Expenditure from £95,458,000 to £93,884,000. Besides that, we shall get in increased Revenue £260,000 from the Suez Canal, from the Naval Defence Fund £289,000, or £549,000 in all, and that will increase the Revenue from £90,956,000 to £91,505,000, the result of the whole of these transactions being that if they are carried out they will reduce the deficit with which we have to deal to an amount of £2,379,000. If we had been free from the incubus of this new debt, and if the naval expenditure had stood at the figure of last year, we should have had £747,000 available for the reduction of taxation. As it is, we have to put on additional taxation to meet a deficit, which, having been reduced in the manner I have proposed, amounts to £2,379,000. Now, Sir, I am coming to a more serious matter. I am afraid I have to inflict upon the Committee a dull half-hour, but I have to deal with a difficult and complicated subject. In order to grapple with a subject of that magnitude it will be necessary to have recourse to the great staple branches of the Revenue. It is no use peddling with small taxes which irritate and embarrass small trades without producing any considerable revenue. The Committee will anticipate that the first subject to which I shall refer is the Death Duties. Even without the pressure of immediate necessity, it would be a mere act of financial justice to redress inequalities which have too long existed. It is difficult to understand how the intolerable injustice of the relations between the taxation of various kinds of property under the Death Duties has been so long endured. We are bound to undertake the solution of this question by the pledge given in the important Resolution moved by the right hon. Member for Midlothian on the Second Reading of the Budget Bill in 1888. I will remind the Committee of that Resolution. It was—

"That, in the opinion of this House, after Parliament shall have made the appropria- tions it may deem just in the relief of local rates, the duties accruing upon death shall be so fixed as to equalise the charge upon real and personal property respectively."

I have not time to enter on a lengthened disquisition on the history of those duties and their anomalous incidence. In a general way they are familiar to most people. A sort of defence has been set up that there was a compensation to he found in the heavier burden to which particular kinds of property were subject tinder other taxes. But these sorts of compensation are unsound in principle and mischievous in practice. It is far better to place both taxes on a fair and equal basis than to attempt to counterbalance one inequality by the creation of another. The whole subject is admittedly difficult and complicated. The Death Duties have grown up piecemeal, and bear traces of their fragmentary origin. They have never been established upon any general principles, and they present an extraordinary specimen of tessellated legislation. Various endeavours have been made at different times to redress some of their inequalities. Here a patch and there a patch, but each successive modification has only left confusion worse confounded. In the fraction of time which I can devote to this subject I can only present to the Committee a very faint outline. There exist at present five duties—the Probate Duty, the Account Duty, the Estate Duty (which, however, was only imposed for seven years and expires in 1896), the Legacy Duty, and the Succession Duty. The Probate, Account, and the Legacy Duties affect personalty; the Estate and Succession Duties affect both personalty and realty. But there is a more important distinction—namely, the point of view from which these duties are levied. The difference may be illustrated by the examples of the Probate and the Legacy Duties. Probate is a duty imposed on the whole corpus of the personal property which passes to a man's executor or administrator at his death. The Account Duty and the Estate Duty are similar to it in that they deal with the corpus of the estates to which they apply and that the duty is charged on the amount of the capital passing, irrespective of its destination. For shortness, I will call these the A duty class. The principle of this A duty is to look solely at the amount of property passing, without regard to its subsequent destination or distribution. I now turn to what I will call the B class of duty. Of this the Legacy Duty is an example. The B class of duty is an additional tax imposed on the interest which a man derives from property left to him or devolving upon him. This duty regards not the amount of the estate which the deceased leaves, but the amount of interest which the successor takes, and the rate of it is determined by his relationship to the man from whom he takes it—a distinction which is not made in the case of the A duty. This is the general character of the Legacy and Succession Duties. The point of view of the A duty class is the amount of property left. The point of view of the B duty class is the interest of the individual successor and his relationship to the predecessors. It is obvious that, accepting these principles, these duties should severally be applied with equality to all classes of property. But it is not so. The A duty is imposed, in the shape of Probate Duty, on personalty passing by will or intestacy, and, in the shape of Account Duty, on personalty included in voluntary settlements and some other things, but it is not imposed on personalty included in other forms of settlement, or on any form of realty, settled or unsettled. In the case of the B duty, the principle is not equally applied. There is an unfair distinction between personalty and realty. In the case of personalty the duty is in all cases charged according to the interest of the beneficiary—that is, if he takes a life interest, he pays on the value of that interest; whereas, if he takes an absolute interest, he pays on the principal value of what he takes. But, in the case of realty, the beneficiary pays in all cases only on his life interest, even when he takes an absolute interest—fee-simple—in property. These inequalities are not denied. The right hon. Gentleman the Member for St. George's, Hanover Square, attempted in some degree to redress them. He somewhat raised the B duty on realty, in order to compensate its exemption from duty A. He imposed also an Estate Duty, the object of which he thus described—

"The new duty will be charged similarly on both realty and personalty—that is to say, on the capital value, when the property passes absolutely."

I entirely accept this principle, and what we desire is to carry it out to its legitimate conclusion. I have not time now to discuss the right hon. Gentleman's plans in detail; but they have failed of their avowed intention—they have not redressed the inequality, either in respect of settled property or of realty. Realty is not taxed upon the principal value; it is taxed on the value of the life interest of the successor. The basis of calculation is, not the principal value of the land, but the annual rental. It is, in effect, a tax upon rent, which is a wholly different thing. I have here a table which will illustrate this matter by concrete instances better than any elaborate statement. I will take the case of a property of the market value of £15,000. If it is what is called free personal property, or anything else not settled, that property will pay 3 per cent. Probate Duty, £450; and Estate Duty, 1 per cent., £150, making £600. Supposing the same property is under settlement, it will pay Succession Duty, £225; Estate Duty, £150, or a total of £375, instead of £600. If it were divided into two properties it would only pay £225 instead of £600. Now, let us take the case of land, or real property, of the market value of £15,000. I take the age of the successor at 35. The net rental at 4½ per cent. is £675; the Succession Duty would be £139 10s., the Estate Duty £130 10s., or a total of £270, as against £600, or about one-half. If there were two successors and no personalty there would be no Estate Duty, and the charge would be only £139 10s., instead of £600. I do not go into the figures, but upon collaterals generally the charge in the case of realty will not be much more than half that on free personalty, and, when there are two successors to realty alone, less than one - half. There is a great distinction between leasehold and freehold property. The one—that is the leasehold—is taxed for the purpose of probate as personal property, and the other — the freehold—is exempted from probate as realty. Leaseholds are always diminishing in value; but freeholds, on the other hand, are generally increasing in value. [ Opposition cries of "Oh!" and "Hear "] I am afraid that there are some freeholds that are not increasing in value, but there are a good many that are. I should think if you took some of the ground-rent proprietors in London they would not tell you that their receipts were decreasing. Now, I will suppose a person—A—who owns two sets of trade premises, each worth £200 per annum net annual value, the one, a leasehold, having, say, 60 years to run, and the other, a freehold. The properties are rated equally for local purposes, but mark the difference of their contribution under the Death Duties to Imperial taxation. A, the father, leaves the leasehold to his son B, who pays probate at 3 per cent. on £3,000, which is 15 years' purchase. The amount of probate he will pay is £90. He leaves the freehold to another son, C. The freehold at 20 years' purchase is worth £4,000, but the tax in this case being under the Succession Duty is only valued on the life interest. Assuming C to be 44 (the average age of successors) his life interest in the property, of £200 net annual value, would be £2,800, and on that he would pay 1½ per cent., or £42. Therefore the leasehold, which is really worth £3,000, pays £90, while the freehold, which is worth £4,000, only pays £42. It ought at equal rates to pay £120. That is to say, the leasehold pays nearly three times as much as the freehold. Now, is it possible to justify a system of taxation of that kind? I beg leave to call the attention of people interested in urban populations to this question of the position of the leaseholder and the freeholder. I have received a Memorial from the Associated Chambers of Commerce of the United Kingdom urging a reform of the Death Duties, and they give the following illustration of the inequalities of taxation according to the different character of the property. The figures they gave were not absolutely correct, but I have had them corrected by the Inland Revenue authorities. They suppose the case of a testator leaving a nephew, aged 35, a property of £100,000, yielding a net income of £5,000. They show that if the property were a freehold mill with fixed machinery the Succession Duty would be £3,543. If the same property were directed to be sold and the proceeds paid to the nephew, though he elected to take the property unconverted, the duty would be £4,500. If the same property were leasehold the Probate and Succession Duty would be £4,662, and if the testator directed the property to be sold as before the duty would be £6,000. I have given these examples in order to convince the Committee that the present state of the law is unjustifiable and intolerable. The object of the proposal the Government have to make is to effect completely what the right hon. Gentleman opposite (Mr. Goschen) avowed to be his object—to make as complete an assimilation of the charges on all kinds of property in respect of the Death Duties as the nature of the case permits. The proposal of the Government, therefore, is this. We propose to clear the ground by abolishing or merging the present Probate Duty, the Account Duty, the Estate Duty, and the addition made by the right hon. Gentleman opposite to the Succession Duty and to start afresh. We constitute in their place a single duty of the A class, of which probate is the type, which we propose to call the Estate Duty. We borrow the right hon. Gentleman's principle, and we borrow his name. We carry out his principle, however, to its legitimate conclusion. The Estate Duty will be charged according to the principal value of all property, whether real or personal, settled or unsettled, which passes on the death of any person, whether by the disposition of the deceased or by a settlement made by others. That is the broad and general principle. In this duty regard will only be had to the sum total of the property passing, and not at all to the persons to whom or the shares in which it passes. The governing principle is this. Upon the devolution of property of all descriptions the State takes its share first—before any of the successors in title or beneficiaries. The reason on which this is founded is plain. The title of the State to a share in the accumulated property of the deceased is an anterior title to that of the interest to be taken by those who are to share it. The State has the first title upon the estate, and those who take afterwards have a subsequent and subordinate title. Nature gives a man no power over his earthly goods beyond the term of his life. What power he possesses to prolong his will after his death—the right of a dead hand to dispose of property—is a pure creation of the law, and the State has the right to prescribe the conditions and limitations under which that power shall be exercised. The right to make wills or settlements or successions is the creation of positive law. In case of default of disposition by intestacy, the State settles the destination of the property under the Statute of Distribution. It is most important to keep that clearly in view. The objection is often taken that taxes of this kind are so hard upon this person or that person, but a duty like the Probate Duty, where property is bequeathed by will, knows nothing of distinctions of persons who are to be benefited by the will. We deduct the share of the State, and then the persons interested take according to their several shares. Suppose a man leaves property amounting to £100,000, the Probate Duty, which will now be the Estate Duty, is deducted before anyone gets anything. The deduction may be £4,000. What really belongs to the beneficiaries is not £100,000 but £96,000, and they never had aright to anything more. [ Opposition laughter. ] That is the principle of the new Estate Duty. Those who laugh cannot have read the most elementary books on political economy and finance. The State is to take its share from the corpus of the whole property passing on the death of the deceased, of whatever kind or description that property may be. That principle is so simple and so just— [ Opposition laughter. ] I never supposed till this moment that that was a principle which anyone disputed. It is a principle which has been laid down in this House for a very long time, and it had been laid down in every work that has ever professed to deal with political economy. Therefore I was not prepared to argue it. I have taken it as an axiom of finance. The real difficulty arises in the application of the principle. The difficulty arises from the complication of the Law of Settlement, and the Law of Real Property, and likewise from the nature of real property. As to free personalty, you have to deal only with the executors, but in the case of settlements, you must have recourse to trustees, and you may often have to deal with the dispositions of persons, other than the deceased. Real property passes immediately to the devisee or heir, and, when settled, presents the same difficulties as those to which I have referred in the case of settled property. That consti- tutes, no doubt, a difficulty in regard to collection. The evils from which we suffer, not only in this respect, but in all dispositions of property, exist to a degree which makes the United Kingdom the most lawyer-ridden country in the world. These complications are the work of the astute and ingenious professors of the law. They are the result of the accumulated subtleties of conveyancing. They are expensive and unintelligible to everyone who is not well paid to understand them. It is a difficult business to unravel and break through all their cobwebs, but in principle there is no reason why settled property should be favoured in comparison with unsettled property. Settlements may be good things in some cases, but they are certainly very bad things in others, and there is assuredly no reason why they should be favoured by any fiscal exemptions. You cannot by fiscal enactments alter the Law of Settlement, but you may provide that settlements shall not be unduly favoured in respect of taxation. To show again what a faithful disciple I am of the right hon. Gentleman opposite, I should like to read a sentence upon the subject of settlements from his Budget Speech of 1889. He said—

"The whole theory of the Death Duties is that the State claims a share in all property passing on death. If I may use a phrase of legitimate exaggeration, a portion of the Death Duties is practically evaded by settlement. From my point of view, every settlement if not a fraud upon the Death Duties, at all events, makes a serious inroad on what I may term the rights of the Chancellor of the Exchequer."

I beg attention to what follows—

"I do not feel sure that equity and analogy do not require that a higher duty should be put upon settlements to compensate for the heavy loss to the Death Duties which they bring about."

As regards real property, there is no reason why it should be charged at a different rate from other property, why the duty on it should be charged on a life interest when the real interest taken is the fee-simple, why it should be estimated on an annuity, which in the case of the best classes of property, such as ground rents, produces a sum far below the principal value on which other property is valued. This is one of the few countries in the world where such a principle is adopted. I find in The Statistical Society's Journal, Part 85, this statement—

"Coming next to the question of this modification or mode of estimating the value of real property, and the substitution of the actual realisable value for the fictitious value obtained by multiplying the income by a given quantity, we find there are only two countries besides France in which the assessment of Succession Duties on real estate is based on the fictitious, and not the real, value. Those countries are England and Belgium. In determining the value of real estate in all other countries, the duty is levied on the realisable value of the property."

I have forgotten to mention that, in taking principal value as the basis of the tax, we reform a glaring injustice of exempting property which has a high selling value, though yielding little or no annual rent. There is the well-known Lord Sefton's case, where there was property yielding no rent at all, on the banks of the Mersey. Well, he paid no Succession Duty upon that, and very shortly afterwards he sold the property for a very large sum. The Inland Revenue claimed Succession Duty upon what he had received, but the land had no annual value, and it therefore paid nothing. This applies to the question of ground-rents and ground values. You may have a ground value which is very small, and yet you may sell that property tomorrow for an immense sum of money. There is no more difficulty in estimating the principal value of real property than that of jewels or pictures. The real test is what experienced persons estimate would be the fair market value at the time and under the circumstances. That real estate should not be treated on a more favourable footing than other property was laid down by Mr. Pitt in 1795.

"In a war for the protection of property it was just and equitable that property should bear the burden, and as it was in the nature of things that landed property was the most permanent it was fit that it should contribute accordingly."

That principle was rejected then by the House of Commons of those days, but I venture to say that it will not be rejected by the House of Commons of to-day. But, to take a later example, the right hon. Gentleman (Mr. Goschen), in his able Report of 1871, stated that—

"Out of the total Imperial taxation, land in England paid, in 1868, 5·28 per cent.; in. France, 18·43 per cent.; in Prussia, 11·39 per cent.; in Belgium, 20·72 per cent.; in Russia, 11·21 per cent.; in Austria, 17·54 per cent.; in Hungary, 32·30 per cent.; and" (he added) "from these figures it is apparent to what a small extent the taxation of land has been available for Imperial purposes in the United Kingdom as compared with the whole of the Continent."

If it is urged, as is unfortunately true, that the value of laud has greatly fallen in this country, it will be remembered that the charge will be the less in proportion to the fall in value, and that land will, like other properties, only be taxed on what it is worth and what it will fetch. One difficulty we have to meet is one which would have been remedied if the House of Lords had not rejected the Land Transfer Bill introduced by the late Government in 1889, by which land would have passed, like personal property, to the lands of the executors. There may be more difficulty in realising at once the tax on real property, and regard should be had to this consideration, so long as in the end the same amount is realised on real property as that which is levied in other cases. The situation of settled property will also require special treatment, but the charge in the end should be the same. All these are questions of the manner of collection, which will have to be dealt with at a later date, and their difficulty, no doubt, is great; but I have not time to enlarge on them now. We have done our best to solve them; and I have no doubt that, with the assistance of the Committee, we shall be able to arrive at some reasonable conclusion. So long as the equal contribution of all classes of property is kept intact we have a very open mind as to the method of effecting it. It is very desirable and very important to interfere as little as possible with the existing system of administering the law, round which has grown up a great mass of established decisions and practice. I have said that, whilst making an equal charge on all kinds of property under the Estate Duty, we accommodate the method of collection and payment to the different conditions of various kinds of property. It would, obviously, be impossible to realise at once the capital value of landed property in like manner as in the case of Stocks or other personalty. We continue, therefore, the existing system of payment by instalments; but, in order that the ultimate payment may be the same as on other property, we charge interest on the money remaining due until the whole is discharged. These instalments will be a charge on the estate, and will not lapse with the death of the person primarily liable to pay them. In the case of settlement, when property is now settled by will, probate is charged once on the corpus of the property, and this payment covers all the limitations of the settlement. It is felt that it would not be fair to require a full payment on each devolution within the scope of the settlement when the beneficiary takes only limited interest, and thus treat a man with only a life interest on the same footing as one who had the absolute disposal of the estate. We now, therefore, propose to assimilate the treatment of property under all kinds of settlements to that now in force respecting settlements made by will. But, as the single payment in respect of the whole settlement may result in a diminished total produce of the tax, we propose to levy an additional 1 per cent on all property under settlement to recoup this loss. I have, in fact, adopted the right hon. Gentleman's policy. I have sat at his feet for some years, and have learned something from him. In this manner we levy the same amount from the estate as if it were left absolutely, but each beneficiary will contribute according to the extent of his interest by the reduction of his income resulting from the original diminution of the capital. In the case of realty, where the duty will be payable in the first instance by the life tenant, he will have the power to charge the amount of it on the property. I do not propose, at the present moment, to argue this question in detail. The proper time for that will be when the Resolution relating to the Death Duties comes separately under discussion. I have not found it necessary to go into any elaborate calculations, such as those which were discussed in the Debate of 1888, as to the relative amount of various kinds of property and the charges upon them. Our plan does not require any such calculation, because it is proposed to place exactly the same charge on every sort of property, of whatever kind it may be.

Will the right hon. Gentleman state the percentage?

I am coming to that directly. I now come to a point in this matter which is of still greater importance. Hitherto I have discussed the propriety of bringing all kinds of property under the same tax—a tax in the nature of the present Probate Duty. This we have sought to accomplish. When we have collected all the different heads of property passing at a man's death, and aggregated them in one sum, the question arises, shall the property be taxed at the same rate, whether it be great or small? Shall a property of £100,000 not contribute on a higher scale than a property of £1,000; a property of £500,000 more than £100,000; and £1,000,000 more than £500,000? This raises in its simplest form the vital question of graduated taxation. To my mind, the principle if applied with fairness and justice is a most equitable and politic principle. Every writer on political economy and finance has laid down the doctrine that taxation should be proportionate to the ability to bear it of those on whom it is imposed. The right hon. Gentleman (Mr. Goschen) admitted, and indeed proclaimed, these principles when he established the Estate Duty. He stated—

"On the whole, I think it will be generally-recognised that it is the men whose fortunes are considerable who pay least in proportion to their aggregate income and property."

He proceeded to act to a limited extent on this principle by imposing the Estate Duty on estates amounting to £10,000, and excepting all estates below that sum. I pointed out at the time that this fact, and the principle upon which it was pro pounded, contained the germ of graduation. It was, in fact, the first rung of the ladder, and we propose to ascend the scale. I read last week a very able article in The Economist on this subject, which pointed out how this principle might be applied even on a small scale. Mr. Pitt suggested that a man who could afford to keep two carriages should be taxed on each a higher rate than his neighbour who could only afford to keep one. This system of graduation is in force in many of our colonies. In Victoria an estate of £10,000 to £20,000 pays 4 per cent., rising by steps to estates of £100,000, above which 10 per cent. is paid. We propose a much more moderate graduation, rising to 8 per cent. at £1,000,000, or double the existing maximum. I now propose to tell the Committee how I intend to fix the graduation. On estates exceeding £100 and not exceeding £500 the rate will be 1 per cent.; exceeding £500 and not exceeding £1,000, 2 per cent., including in both cases Legacy and Succession Duty; exceeding £1,000 and not exceeding £10,000, 3 per cent.; exceeding £10,000 and not exceeding £25,000, 4 per cent.; exceeding £25,000 and not exceeding £50,000,4½ per cent.; exceeding £50,000 and not exceeding £75,000, 5 per cent.; exceeding £75,000 and not exceeding £100,000, 5½ per cent.; exceeding £100,000, and not exceeding £150,000, 6 per cent.; exceeding £150,000 and not exceeding £250,000, 6½ per cent.; exceeding £250,000 and not exceeding £500,000, 7 per cent.; exceeding £500,000 and not exceeding £1,000,000, 7½ per cent.; over £1,000,000, 8 per cent. Properties below £500 will pay 1 per cent. instead of a minimum of 2 per cent. on personalty and of 1½ per cent. on realty as at present, but they will be relieved from Legacy and Succession Duty, which, under the consanguinity scale, may now render such properties subject to a much higher charge. Properties between £500 and £1,000 will pay 2 per cent., but they will be similarly relieved from Legacy and Succession Duty. The 30s. payment below £300 gross will cease. Properties of capital value between £1,000 and £25,000 in free personalty will pay as they now do. It is above £25,000 that the new graduation will commence. There is one more point I must mention, and that is the existing mortgage to the Local Authorities of half the Probate Duties. I always strongly objected to that proceeding as hampering the Chancellor of the Exchequer and embarrassing the Imperial finance. These objections are emphasised by the actual situation. As the Probate Duty will be merged in the new Estate Duty, it is, of course, impossible to maintain this particular form of assignment. I cannot here undertake to reform the system, as I think it ought to be reformed altogether; but I propose, for the present, to continue it by an equivalent, which is calculated to bring about similar pecuniary results, through an arrangement which will secure to the Local Authorities out of the new Estate Duty the same contribution to which, under the law as it at present stands, they are now entitled. I will not go now into the details, which will be better understood when the Bill is presented. I have hitherto dealt only with the A class of duty, the class of which Probate Duty is the type, and which is charged on the corpus of estates, regardless of the interests of the beneficiaries, or their relationship to the deceased owner. I have yet to mention the changes which I propose to make in the B class of duty, the duty which falls upon the interest of the individual beneficiary, and is graduated according to the degree of his relationship to the person from whom he derives his interest. There are two duties of the B class—Legacy and Succession Duty. They always used to be —and now that the additional 1½ per cent. Succession Duty is to be swept away and the Succession Duty on lineals is merged in Estate Duty they once more will be—identical in respect of the rates of duty. The "consanguinity scale," as it is called, will be the same in either case. But, in order to make them identical, it is necessary to remove—and I propose to remove—the anomaly by which Succession Duty is in all cases, even where the successor takes an absolute interest, charged only on his life interest, and the further anomaly that Succession Duty is payable by instalments free of interest, whereas Legacy Duty is payable in one lump sum. In both these respects we propose to place Succession Duty on exactly the same footing as Legacy Duty. It will in future be charged upon the capital value of the property where the successor takes absolutely. Though still payable in instalments, these instalments will be charged with interest, thus rendering them really equivalent to the lump sum paid at once under Legacy Duty. With these changes Legacy and Succession Duties—though kept up nominally as separate duties for the sake of administrative convenience and on account of the body of law and legal decisions, which has grown up around them—will be identical in their incidence. There will, in fact, be only one B duty, equal in its incidence on all kinds of property, real and personal, settled and unsettled, just as there will be one A duty, the Estate Duty, instead of three, and that one duty likewise equal in its incidence all round. There will be two duties instead of five duties, and two equal duties in the place of the chaotic inequality of incidence which now prevails. I come now to the question of what the change is expected to bring in. The Estate Duty will take the place of the present Probate, Account, and Estate Duties, of the additional ½ and 1½ per cent. Succession Duty, and of the Succes- sion Duty on lineals, diminishing the yield of Succession Duty by more than one-half. The portion which will remain will be to some extent augmented by the proposal to charge the duty on capital value and to charge interest where it is paid by instalments. As against this, however, there will be the loss of the Succession Duty on properties under £1,000, and there will be a small loss of Legacy Duty on the same account. It is difficult to ascertain the exact balance, but the result of the whole is that we estimate an ultimate increase upon the Death Duties of between £3,500,000 and £4,000,000. They will then amount to about £14,000,000, of which £2,500,000 goes to the local taxation account. What we shall gain will be about double the yield of Probate and Estate Duty to Imperial Revenue. The experience of the Succession Duty, which so largely disappointed the expectations formed of it, and which has not yet realised three-fourths of what was expected 40 years ago, teaches a lesson of caution and diffidence in prediction of the results of so great a change in which we have so little experience to guide us. Nevertheless, on the best calculations we can get, I estimate that we shall not in the long run fall short of an annual increase of £3,500,000. But only a small part of this increase will accrue to the benefit of the Exchequer in the present financial year. Supposing this Bill to become law by June 1, several months must elapse before the estates of persons dying after that date will be brought in for payment of duty. Thus we shall only hare, say, seven months of the present year under the new system. During the first five months we shall be taking the existing duties. But even during those seven months we shall only be receiving the new duty on personalty. Realty being allowed to pay by instalments, the full increase under that head will take several years to realise. Taking all this into consideration, I cannot count for 1894–95 upon more than a net gain of £1,000,000 from the substitution of the new Estate Duty for the duties which it replaces. The yield may be somewhat greater, but it would not be safe to reckon on it. Up to this point I have only succeeded in providing £1,000,000 out of the additional £2,379,000 of which I am in need. The Committee will have anticipated that the aid of the Income Tax must he invoked. In the great naval and military scare some 35 years ago, when it was necessary to raise £5,000,000 within the year, the Income Tax was at once raised to 4d. in the £1—from 5d. to 9d.—and the whole was to be collected within six mouths. Do not let the Committee be too much alarmed. I have no such heroic proposal in store for them. The addition to the Income Tax I shall ask them to make is 1d. in the £1, from 7d. to 8d., which would yield in the present year £1,780,000. We must in any event have brought the Income Tax under review, because, as I stated last year, it is obviously just that if real property is to be assimilated in burden to personalty under the Death Duties it has a claim, which cannot be neglected, to be relieved from the exceptional charge which in most cases it bears under its assessment to the Income Tax. The fact that real estate is, as a general rule, in Great Britain, assessed upon its gross and not upon its net income, has long been a ground of complaint. It has been recognised by those who have considered the subject that the inequalities in the position of real estate must be dealt with together. We propose, therefore, that in future an allowance shall be made on the gross income as assessed under Schedule A. The question of what allowance shall be deducted from the gross income is one of considerable difficulty. We have taken the best means in our power to arrive at a fair conclusion on this matter. We cannot be guided by "rateable value," because not only do the deductions made from gross value, to arrive at "rateable," vary in different parts of the country, but the gross value as estimated for local purposes itself varies so much that, while in certain places it is the same as the Income Tax assessments, in other places it is much below it. But, at the same time, the deductions made to arrive at "rateable value" in these parts of the country, where local valuations are most careful and systematic, are some guide to us in determining what allowance should be made from the Schedule A assessment. Now, from a comparison of a number of such valuations, it appears that the allowance made on agricultural land, in respect of landlord's expenses, is generally 1–12th, in a few cases 1–10th. Mr. Hubbard's Committee of 1861 pro- posed those figures which have been adopted for the county rate in Lancashire, the West Riding, and Northamptonshire. We propose to take the more liberal view, and to allow, not 1–12th but 1–10th. In the case of houses where the burden of repairs falls on the landlord the allowance is commonly 15 per cent. or 16⅔ per cent., which is 1–6th, and it is this figure, 1–6th, which we propose to take. This allowance, based on these principles, will have to be deducted from the produce of the additional 1d. on the Income Tax. If 1–10th and 1–6th be taken, it will cost nearly £100,000 per penny in a full year. Therefore, the loss with an 8d. tax will be little short of £800,000. But this will not be fully felt in the first year. I may point out that this will constitute an immediate and annual relief to real property both in land and houses, and that it will be enjoyed before any additional burdens from the increased charges on the Death Duties are suffered. I am not sorry that in the present condition of the landed interest we should be able in this manner to afford them an immediate and sensible relief. It will be a boon to the living owner; the Death Duty will be a tax on his successor. This is the first large deduction which I have to make in reforming the Income Tax upon a more equitable footing. Now I come to a still more important matter from my point of view; and I shall be able to give the hon. Member for North Islington the information for which I have asked him to wait. But I have always felt—and I think it is a universal sentiment—that if the Income Tax is to be maintained at a high figure —and the present rate of your expenditure holds out little hope of its reduction —that we should make some attempt to adjust its pressure so as to make it less intolerable to those who are least able to bear it. Everybody must agree that the pressure of the Income Tax is most severe upon the class of men of small and very moderate incomes. At present the limit of total exemption is £150, which just fails to clear the man who. earns £3 a week. Above that figure at present an abatement is allowed of £120 on incomes up to £400 a year. It has often been urged with absolute justice that it is the class with incomes under £400 or £500 who most deserve consideration and require relief. They are a large and most deserving class, mostly emerging into an independence they have earned for themselves, and rising by their own industry from the stratum of exemption to that of Income Tax-paying means. In raising the Income Tax to 8d. we are desirous that the extra burden shall not fall upon this class. This may be accomplished in a simple and easy manner by extending the principle of abatement. We propose that the abatement shall be £160 instead of £120 on incomes under £400, which will, of course, make the lower limit of exemption £160 instead of £150. We propose, further, to relieve incomes between £400 and £500 a year by an abatement of £100. This is a class which has hitherto borne the full burden of the tax. It may seem at first sight that this is a trifling measure of relief, but it affects a vast number of the Income Tax payers—over 500,000. The Committee will appreciate how great the relief is when I say that the extension of the abatement to £160 under £400 will cost £640,000, and the new abatement between £400 and £500 will cost £200,000 per annum, or £840,000 on a full year. The loss on these two deductions—namely, on Schedule A and abatements on incomes below £500—will amount to £1,450,000 in the current year, which will reduce the yield of the additional 1d. to £330,000. I should like to show the House exactly how this abatement will operate on the humbler classes. I have a table here which will show the exact character of the relief which it affords, and that the results of this change will be that no one with an income under £500 a year will pay more (but that, in fact, he will pay somewhat less) on an 8d. Income Tax than he does now when the Income Tax is at 7d. Incomes of £200 a year, with an 8d. tax (and an abatement of £160), will pay at the rate of 1 3–5d. in the £1, as against the rate of 2 4–5d. in the £1 paid last year, with a 7d. tax, and an abatement of £120. Incomes of £250 will pay at the rate of 2 4–5d. instead of 3 3–5d. in the £1; incomes of £300 will pay at the rate of 3 2–3d. instead of 4 1–5d. in the £1; incomes of £350 will pay at the rate of 4 1–3d. instead of 4 3–5d. in the £1; incomes of £400 will pay at the rate of 4 4–5d. instead of 4 9–10d. in the £1; incomes of £450 (with an abatement of £100) will pay at the rate of 6 2–9d. instead of 7d. in the £1; and incomes of £500 (with an abatement of £100) will pay at the rate of 6 2–5d. instead of 7d. in the £1. Therefore, on this graduated scale each man up to £500 pays less than he did last year with a 7d. Income Tax. I shall be asked the question, "If you graduate the Income Tax down on the lower scale, why not graduate it up on the larger incomes?" In principle there is nothing to be said against such a system; indeed, there is every argument in its favour. The difficulties which lie in the way are of an administrative and a practical nature, which, as yet, I have not been able to find means to overcome. The reason why it has been found possible to collect so vast a sum of money with such comparative facility has been that you collect the bulk of the Income Tax at its source, and from persons on whom the burden does not ultimately fall. The real Income Tax payer, like the landlord, is charged indirectly and by deduction. In the greater part of the collection (about three-fourths of the whole) it is simply automatic. There is no inquisitorial prying into the ways and means of each individual. You do not demand a sight of his cash-book and his pass-book, but the tax is deducted, in the majority of cases, from his income before it reaches him. Many people are in a happy ignorance of the Income Tax which they pay. I wish there were more of them. Even in the case of trades and professions where you require a declaration of a man's profits you do not attempt an investigation of the income the individual derives from other sources. I have made a careful investigation of this matter in consultation with the authorities of the Inland Revenue, and they are strongly of opinion that the measures of penal discovery and irritating inquisition which would be involved in any plan which required the determination of every man's income from all sources would render the collection of the Income Tax so odious as to imperil its existence, and in all probability make it impossible to maintain the tax. The graduated Estate Duty may be, in fact, reckoned in terms of an annual charge upon the estate; and in that shape may be regarded as a graduated Income Tax which is levied only upon realised property, and does not fall upon what are called "precarious" incomes. So that, in point of fact, you do arrive at the result which is aimed at in the demand for a graduated Income Tax falling upon what are called "spontaneous," as distinguished from "industrial," incomes. The proposals I have hitherto made are estimated to yield £1,330,000, but I have still upwards of £1,000,000 to provide. I propose to find the balance from an addition to the duties on spirits and beer— 6d. a gallon upon spirits and 6d. a barrel upon beer. These are duties to which this House has always had recourse when it was necessary largely to increase the Revenue, and that not upon moral or social considerations, but upon purely fiscal grounds, which are those upon which alone a Chancellor of the Exchequer is entitled to proceed. Many years ago Mr. Gladstone stated that

"The principle upon which the House of Commons has, I think, uniformly proceeded with respect to spirits has been not that we ought to lower the duties upon them as much as we can consistently with the interests of the Revenue, but that we ought to raise the duties upon them as much as we can consistently with the policy and necessity of preventing the growth of a contraband trade."

The right hon. Gentleman opposite acted on this principle in 1889 when he required an additional revenue for Imperial Defence purposes, and continued it as a substitute for the Wheel and Van Tax. The right hon. Gentleman then had no hesitation or difficulty in resorting to an increased duty on beer and spirits. The necessity under which we now find ourselves is of a far higher and more urgent character. I have taken much pains to inquire whether the trade in beer and spirits is capable of bearing increased burdens without oppression. I find that, while prices to the individual consumer have remained almost constant, the cost of materials, and therefore presumably of manufacture, has greatly and rapidly decreased. I have also means at my disposal for convincing myself of the great profits of these trades, both wholesale and retail, and their ability to bear additional burdens. I can, if I am challenged —which I do not expect to be—lay before the Committee some figures on this head which will surprise both them and the country. It is a tax which, as the right hon. Gentleman opposite pointed out, can hardly fall upon the individual consumer of a glass of spirits or a pot of beer. The right hon. Gentleman opposite, in the course of his Budget Speech in 1889, referring to his proposal to increase the duty upon beer, said—

"In doing so I shall obtain the £300,000 which I want, while adding something perfectly imperceptible to the cost of a barrel of beer. The duty on beer is at present 2d. per gallon, and the addition proposed, if it could be thrown on the consumer, would only increase the cost of beer, on the average, by about l-14th part of a penny per gallon. The fact is, the addition is so extremely small it will be felt in no quarter whatever. I beg the Committee to observe, therefore, that I am obtaining my revenue by an addition to the tax which cannot be felt by the consumer."

In respect of beer, the duty of 6d. a. barrel could hardly be levied upon the quart pot, which would represent the 24th part of a penny. I hope, therefore, that we shall not be told that this is a proposal to "rob a poor man of his beer." It is, in fact, a tax on large and growing profits. It is notorious that this trade is falling more and more into fewer hands, with greater capital, and improved methods of economical manufacture, which leave a larger margin of profit than was attainable formerly by the smaller brewers. The case of spirits stands on very much the same footing. A gallon represents six reputed quart bottles of proof spirit, but, in point of fact, at the strength below proof at which spirits are usually sold it would represent eight bottles. If the spirits wore equal to proof the additional tax would amount to 1d. a bottle. The real incidence of the tax will not be above 1d. per bottle. I find that, when the right hon. Gentleman opposite a few years ago imposed a similar addition, 1d. per bottle was imposed by some classes of vendors, but some of the greatest traders never altered their prices at all. It seems obvious that if the consumer had to pay 1d. per bottle more it would be impossible to charge the fraction of the 1d. upon those who invest only in the glass or the quartern. In this matter enlightenment and advice have come to me from an unexpected quarter. I find from The Morning Advertiser of April 7 of the present year that the third annual dinner of the Winchester and District Licensed Victuallers' Society was held at the George Hotel. All the proper people were there. There was the Mayor, Alderman T. Stopher, who presided, and the Member for the city was present, and Mr. Riach, the agent of "The National Trade Defence Fund," and members of the trade from various places within the Society's district. Mr. Riach was good enough to make a Budget for the Chancellor of the Exchequer. That gentleman said that, as to the Budget proposals, if the Chancellor of the Exchequer raised the tax on beer only from 6s. 3d. to 7s. it would produce £1,100,000, which must come out of the pockets of brewers; a tax of 1s. on spirits he did not think, on the whole, would be undesirable, as it might be got back from the customer with very fair profit, but that would produce an additional revenue of £1,475,000, the two impositions providing rather more than half of the anticipated deficit. Thus did Daniel come to judgment. I am more moderate than the agent of the National Trade Fund. My estimated yield of this increased duty is—on spirits, £760,000, and, on beer, £580,000, making a total during the present year of £1,340,000, including Customs and Excise, and allowing for a certain falling-off in consumption. This added to the former figures will make up an estimated increase of Revenue of £2,670,000 from taxation. I have now nearly completed my task, but before I conclude I should like to place before the Committee a general review of the bearings and results of our proposals as a whole. Let me now finally review the proposals as a whole. I had to meet a deficit of £4,502,000. I have reduced this deficit by clearing the Revenue of the year from the charges arising out of recently contracted debts by £2,123,000, leaving a sum of £2,379,000 to be met by additional taxation. The additional taxation is thus distributed:—Estimated additional yield of the new Death Duties during the present year will be £1,000,000, the additional Beer and Spirit Duty will produce £1,340,000, and the additional 1d. on Income Tax will yield £1,780,000, making a total additional Revenue of £4,120,000. From these there has to be deducted, under the proposed abatements and allowances under Schedule A, a total of £1,450,000, giving a net additional Revenue of £2,670,000. Setting this against the deficit of £2,379,000, we have a surplus of £291,000 for the present year. The final balance sheet for the present year will, therefore, now stand as follows:—

Let me now attempt briefly to review as a whole the plan I have endeavoured to lay before the Committee. I have been invited to introduce a partisan Budget. That is not my view of the duty of a Finance Minister in this country. The responsibility for the finances of an Empire like this is no light matter. The Minister is the trustee for every class and for every interest in the community. He has not the right to employ those powers to serve sectional or Party purposes. Where it is his happy fortune to relieve the burdens of the people, he is bound to distribute that relief with an impartial hand. Where it is his harder fate—as it is mine—to call upon the community for great sacrifices to support great national interests, it is his business to distribute the increased burden upon just principles, so that its weight may be endured by those who are best able to bear it. The guiding principle of taxation is that the liability should be imposed where it shall be least heavily felt. In that consists the whole science of equitable finance. Let me invite a candid examination by the Committee of the proposals of the Government, regarded from this point of view. We find ourselves called upon to raise £2,379,000 by extra taxation for the defence of the Empire. How is it to be raised, and how is the burden to be distributed? I will first regard the operation of our scheme upon the wage-earning class who, it will be admitted, have the smallest margin beyond that which is required for the necessities of life. No one will dispute that it is upon them the lightest part of the burden should weigh. I would point out that in our proposal, upon men earning less than £160 a year, or £3 a week, no additional taxation will be imposed except possibly 1d. upon a bottle of spirits. That is not a large contribution to ask of them for the national defence, and it is, at all events, a voluntary subscription. Upon a glass of spirits, or pot of beer, as I have pointed out, there will be no increase in price; it might be 1½d. on a nine-gallon cask of beer. That is the extent of the burden imposed upon the means of the great mass of the people who earn their livelihood by the sweat of their brow. Ascending now to the next stratum—namely, the classes with incomes between £160 and £500 a year—I have already shown under the head of the Income Tax that the additional 1d. that we impose will not involve any increased burden upon them, but that, on the contrary, the augmentation of the allowance will place the numerous class between £160 and £500 a-year — a most deserving class, whose margin is very narrow — in a more favourable position than they now occupy with the Income Tax at 7d. Incomes above £500 a year will be called upon to pay an additional 1d. for national defence. The man with £1,000 will contribute £4 3s. 4d. more than he does now; the man of £5,000 a year will contribute a little more than £20; the man of £10,000 a year £40; and the man of £50,000 something above £200. So much for the Income Tax. As to Death Duties. Properties below £1,000 will, as I have already shown, pay less than they now do. Properties of the capital value of £25,000 in free personalty will pay upon no higher rate than they do at present—namely, 4 per cent. Realty and settled property will be placed upon an equal footing with unsettled personalty. They will lose, it is true, the advantage of the exemptions they now enjoy. That is a just and equitable provision which must have been made quite apart from the exigencies of increased taxation. As regards realty, it will have the compensation that the disadvantage which it suffers under Schedule A will be removed. That is an immediate and present gain to a distressed interest. The additional weight on realty from the estate duty belongs to the future. No increased taxation from this source will occur during the present year. It will accrue gradually and at intervals of time, and will always be proportionate to the actual value of the estate. You may take it generally that the period of a Death Duty extends over a generation of 30 years over which the burden is distributed. I venture to claim for this plan that it is a fair plan, conceived with a due regard to the interests of all and to the capacity of each class of the community to bear. You have to consider not only the objections to this plan and the taxes we propose, but you have to tell us what you are prepared to put in their place if you reject this plan. It is not a pleasant task for any Government to be called upon in any shape to add to the burdens of the people. No form of taxation can be otherwise than distasteful and unpopular to those on whom it must fall. You have voted your vast Estimates from a conviction that the expenditure was necessary and politic. If you have performed your duty in that respect you will not fail in the obligation to meet that charge. The House of Commons will never, I am persuaded, shrink from or refuse any effort which is necessary to sustain the honour and provide for the safety of the country.

Motion made, and Question proposed,

Tea.

"That the Duties of Customs now chargeable upon Tea shall continue to be levied and charged on and after the first day of August, one thousand eight hundred and ninety-four, until the first day of August, one thousand eight hundred and ninety-fire, on the importation thereof into Great Britain or Ireland (that is to say):— Tea … the pound . . Four Pence.— ( The Chancellor of the Exchequer. )

Following the example of the right hon. Gentleman the Member for Midlothian, and other ex Chancellors of the Exchequer, I do not propose to review the long and interesting and very clear statement of the Chancellor of the Exchequer this evening. The right hon. Gentleman the Member for Midlothian has often suggested that when large proposals are placed before this House there is much disadvantage in discussing them on the First Reading; and, therefore, so far as I am myself concerned at all events, I do not propose to review the speech of the right hon. Gentleman now. If I were disposed to do so I think I should have some title, considering that about a quarter of the speech of the right hon. Gentleman seemed to be made up of quotations from my own speeches. I regret, if I may say so, that the right hon. Gentleman accentuated so much the views of any single Member of this House, because the questions we have to discuss are far too large to allow of their developing into any kind of personal controversy between the right hon. Gentleman and myself. I hope that not only to-night but on future occasions I may be able to give to a great extent the go-by both to his ironical compliments and to his veiled attacks. There are two points to which I wish to call the attention of the House. The first is the remark- able contrast, the descent from the sublime heights that took place when the right hon. Gentleman, having spoken of the duty of the Committee as being not to borrow or to suspend the Sinking Fund but to pay their way, proceeded to suspend the new Sinking Fund, and to apply it to the payment of new debts instead of old debts. I do not object to the proceeding, but I think there was some surprise felt in the House even amongst his own supporters when the sublime appeal to virtue ended with such a plan as he has suggested. The other point to which I wish to call attention is this. What prospect does the right hon. Gentleman think there will be of passing this highly complicated and to a great extent controversial Budget during the time which he suggested himself? He made his Estimates as if the Act might be passed by June 1. Let me remind him that the right hon. Member for Midlothian always held that the regulation of the Death Duties would absorb an entire Session. These are the words which the right hon. Gentleman used in 1881 with reference to the Death Duties:—

"I am quite convinced that when such a plan" (that is, a complete plan, dealing with the Death Duties) "is proposed, it ought to be proposed by a Government to a Parliament which has plenty of what I may call elbow-room—plenty of free, unoccupied available space for its discussions."

I hope we shall find that there is plenty of elbow-room, plenty of time at our disposal for this discussion. And why? The right hon. Member for Midlothian said—

"Its application is such, the diversity and largeness of the interests are such, that it would never be got through except with a liberal allowance of the time of Parliament for its discussion."

Now we shall be invited to a discussion of the Death Duties, and we shall also be invited to a consideration and rearrangement of some of the most important clauses of the Income Tax Act. I think we may promise that we will devote ourselves with industry to these tasks, but we trust the right hon. Gentleman will say that ample time will be given for the discussion of as complicated measures as have ever been submitted to Parliament. I should not like to sit down without echoing the compliments which the right hon. Gentleman has paid to the authorities of the Inland Revenue and of the Customs for the extreme precision of their Estimates in such a year as this. I also echo everything that was said by the right hon. Gentleman with regard to the proof of the solidity of the finance of this country and of its prosperity, which has been furnished by the figures which he has put before us. I am sure the House will feel that the right hon. Gentleman placed a very difficult Budget before us with great lucidity, and, on the whole, as much as was possible for him, with his love of controversy, in an uncontroversial spirit. He did not entirely discard controversy, and his speech was marked by more attacks upon his predecessors than is usual on such occasions. [ Cries of "No, no!"] I think so. I am sure hon. Members will feel that I am treating the matter with the utmost good humour. Every Member was not perhaps aware of the insidious and veiled attacks which the right hon. Gentleman was making upon me. But we shall cross swords with regard to these points on another occasion. There may be questions and discussion on minor points, but I think it would be premature to raise at this moment a discussion upon the larger proposals of the Budget.

suggested that with reference to the Death Duties the course should be taken which was taken on the Succession Duties in 1853—namely, that there should be a separate discussion on that Resolution. With reference to the other Resolution, he hoped they would be allowed to be taken to-night. The course he indicated was taken in 1881 and 1885.

said, he had looked to the precedent to which the right hon. Member alluded. In those years the Death Duty was the only great change in the Budget, but on this occasion the Budget contained more controversial matters— for instance, there was the proposal as to dealing with the whole of the Income Tax. What he would suggest was that the discussion on the Death Duties should take place separately on the Resolution with regard to the Death Duties, and then that the other matters should be discussed on the Resolutions which referred to them. For instance, the Resolution connected with the Income Tax would form the subject of a separate discussion. He did not think they could consent to take the Resolution relating to the increase of the Income Tax to-night, nor was there any occasion to do so. That would be in accord with precedent. What the right hon. Gentleman might fairly expect was that the Resolution for the increase of taxation on Spirits and Beer should be taken, and then that the Resolution relating to the Death Duties should be made, as far as possible, a separate Resolution.

observed, that certain of the Resolutions it was necessary should be taken, such as those relating to the duties on tea and spirits.

Does the right hon. Gentleman propose to take the Resolution with regard to the Sinking Fund tonight? I cannot see that any advantage would be gained by it. There can be no haste.

did not know that there was any particular haste. In postponing the Resolution as to the Death Duties, he was really departing from the ordinary precedent of the year 1881. In the year 1885, when Mr. Childers introduced a very elaborate Budget which dealt with Succession Duties, Beer Duties, and Spirit Duties, there was a whole list of Resolutions which were passed together, the right hon. Gentleman opposite urging on that occasion that it was very important the House should see the Bill.

said, in his experience the Budget Resolutions were ordinarily postponed, only such being proceeded with as were necessary for the collection of the Revenue. In 1885 Mr. Childers circulated a Paper showing the effect of the collection of the Revenue before the Budget Bill was brought in, and showing the effects of the general changes which were made. He asked the Chancellor of the Exchequer whether he would furnish them with a statement which would put hon. Members in possession of the various changes, and of their financial effect. The statement made by the right hon. Gentleman was most clear. Still, if the figures were precisely put upon paper, hon. Members would be able to follow them more readily. In 1881 there were no changes in the Budget, except the Death Duties, and on that occasion only the formal Resolutions were taken. If the Resolution increasing the Income Tax were taken, it would not, he thought, be in accordance with precedence. He urged that they should have more time.

thought that in late years the practice had been to pass the first Resolution, and the first only, and to defer the others till a later day. That, no doubt, was a departure from the practice which prevailed formerly, when all the Resolutions were passed; but the experience of recent years was so strong that he doubted if the right hon. Gentleman would be able to withstand following the more recent rather than the more ancient practice. He did not rise at all for the purpose of entering into a discussion of the policy or to deal with the particular proposals involved in the Budget which had been introduced by the right hon. Gentleman. It was always indiscreet to enter into such discussion immediately after a Budget speech, and it would be especially indiscreet on an occasion like this, with a Budget so complex, so intricate, and involving such far-reaching issues. The Chancellor of the Exchequer had made an admiral speech, but he (Mr. Courtney) desired to ask one or two questions in order to elucidate certain points upon which he, at all events, had some doubt. With respect to the first part of the speech of the right hon. Gentleman, he was very much possessed with admiration for the noble and lofty maxims which he enunciated with regard to the provision adopted for the redemption of the Debt. There had been some suggestions as to suspending these payments; and when the right hon. Gentleman, indulging in language of a very lofty strain, refused to entertain any suggestion for interfering with the redemption of the Debt, he was delighted with that sentiment, because he entirely sympathised and admired it; and if the right hon. Gentleman had carried out that determination to the end, he should have heartily approved of it. But instead of refusing to suspend the payment of the Debt, especially the old Debt, he had diverted from the old Debt £2,000,000, which were presently to be devoted to redemption. Would the right hon. Gentleman provide that that should be an absolutely temporary diversion of the New Sinking Fund for the purpose of the redemption of the balance in respect of the Naval Defence Act? The other point he was in doubt about referred to the Death Duties. As he understood it, the right hon. Gentleman proposed to establish in lieu of the Estate Duty, Probate Duty, and Account Duty, a single duty which was to be called the Estate Duty, which was to be levied upon the corpus of the estate devolved. Was it devised to one or more persons or was it devised in strict settlement? He wanted to know was this the meaning intended: Suppose a person devised an estate of considerable value— say, £500,000—in strict settlement, there would, upon his death and upon the first succession to the estate, be levied a contribution amounting to 7 per cent. upon the value of the estate, which would be paid by the person who succeeded as life tenant. Would the 7 per cent. on the £500,000 never be levied again until all the interests under the settlement were exhausted? The first person who paid the 7 per cent. as a capital sum would be entitled to charge it upon his successors, and it would pass on to the several persons who succeeded, but, as he understood it, there would be no levy again of a second duty until the whole of the interests under the settlement were exhausted. It was intended there should be one levy upon the commencement of the settlement, and until all the interests arising out of such settlement were exhausted there was not to be a removal of the charge.

There would be the additional 1 per cent.

said, that would come as the next point. Did he understand correctly that that would come in lieu of the present Succession Duty upon lineals? What he wished to know was whether the tenant for life who paid the 7 per cent. on the £500,000 would also pay 1 per cent.? He understood not. But, suppose that the person died without issue, and the property devolved to a nephew, in which case the rate would not be the same, the consanguinity being different, did the capital charge of 7 per cent. absorb all the interests or prevent a person coming in under the settlement of a different degree of relationship? He did not understand how the A duty was to work with the B duty, or how far the B duty survived the A duty levied in the circumstances he had suggested. He understood that the A duty absorbed all the duties to be paid by the lineal successors; but did it absorb all the duties to be paid by the collateral successors who came in under the settlement? This point was left obscure, and it would be useful if the right hon. Gentleman would make a statement which would remove a doubt on the subject. He did not in the least propose to enter into an examination of the policy of the proposals of his right hon. Friend. He would simply remark that they saw that the persons who were living, and who were voters, would gain relief, while the persons who were to succeed hereafter, and who might not be voters, would not get relief. He could not but admire the ingenuity of such an arrangement.

^* said, if the right hon. Gentleman would allow him to do so, he would offer his tribute of admiration also to the extraordinarily clear manner in which he had presented matters which were somewhat complicated. But he regarded it as remarkable that one who had always prided himself as being a financial puritan should, in this electioneering Budget, as it might fairly be called, have violated one of those canons which he himself used for electioneering purposes when he was in Opposition. The right hon. Gentleman the Member for St. George's, Hanover Square, described the proposal of the right hon. Gentleman as being a diversion of the New Sinking Fund in order to extinguish an old debt, but the right hon. Gentleman seemed to have appropriated £1,600,000 in order to pay off liabilities amounting to £1,400,000. The Committee must have heard with great satisfaction what the right hon. Gentleman said as to the accumulations in the Post Office Savings Bank as the result of the Act passed last year. So far as he knew, that increased deposit by the artizan classes had not been attracted by the Post Office by any diminution of deposits in the great joint-stock and private banks of investment throughout the country. It was clear that the classes who put their money in the Post Office Savings Bank were not the classes who deposited their money with the joint-stock and private banks, and it was satisfactory to see that the legislation of last year had not interfered with the legitimate banking operations of the country, but had probably attracted to the citadel of the Post Office Savings Bank money which might have been placed in much less secure positions. He asked the right hon. Gentleman to give the assurance that the New Sinking Fund would be applied to no purpose other than that mentioned in the Statement which he had circulated—namely, to the Naval Defence Fund; that was to say, the sum of £1,429,000.

said, in common with all the hon. Members who had spoken, he felt thoroughly impressed with the greatness of the Budget. The one thing in it which he admired more than anything else was the establishment of the principle of graduated taxation, and he believed the Budget would mark an era. He also tendered thanks to the right hon. Gentleman for the marvellous lucidity with which this great and difficult subject had been expounded. His proposals would be welcomed by all financial and social reformers throughout the country. So high did he estimate the powers of the Chancellor of the Exchequer that he had thought he might be capable of swallowing not only the deficit on the year, but the relinquishment of the Tea Duty in addition, so that the people might have had a free breakfast table, and that might have been done by still further increasing the Death Duty scale. So wrong did he regard it for anyone to leave £1,000,000 behind him that he thought he might be taxed at 50 per cent. He had no desire, however, to quarrel with the principle, because he thought it would turn out to be a valuable one. The principle of graduated taxation might be applied hereafter in various other directions, and, if so, he did not think they had to look forward very far to the time when the same Chancellor of the Exchequer would be able by means of this new principle to provide ample means of carrying on the Government while the poor people's breakfast table was set entirely free.

said, he had no wish to criticise the statements of the right hon. Gentleman, but he desired to ask for an explanation upon one matter—whether, in the event of a man leaving an estate consisting of £100,000 in value, of which £50,000 was settled land and £50,000 personalty, he would pay half the duty on settled land and half on personalty? The right hon. Gentleman would see the point, for he bad himself said it would make a considerable difference. To what extent would the £4,000,000 which he expected to get from these new Estate Duties fall upon land? If the charge would not necessarily fall upon land the position would be altered.

^* said, the Chancellor of the Exchequer had paid a just tribute to the heads of the Treasury for the care and accuracy with which these Estimates were prepared. Perhaps he might specially mention Sir R. Welby, the permanent head of the Treasury, who, he believed, was on that very day retiring from the Service. The Chancellor of the Exchequer congratulated himself on the large increase in the Savings Banks deposits. He wished he could think that this might be taken as evidence of increased prosperity on the part of the working classes, but he feared it was to a great extent due to the fact that the rate of interest allowed was higher than usual in relation to that obtainable at present elsewhere. He was glad to hear that the right hon. Gentleman was able to reduce the amount of the Unfunded Debt—a wise and prudent course —and it was to be hoped he would be able to still further reduce the amount in the coming year. He greatly regretted that the Chancellor of the Exchequer proposed to find £2,000,000 of his deficiency by diminishing the amount applicable to the reduction of Debt. In Opposition the right hon. Gentleman continually attacked the right hon. Gentleman the Member for St. George's for having diverted £2,000,000 of the Sinking Fund, and yet he was now doing the same thing himself. As regarded the Death Duties, he would not now discuss the proposals of graduation, but some explanation would be advisable, as several hon. Gentlemen near him did not understand how the Legacy Duties would stand. He understood that no change was made, but perhaps the Chancellor would give some explanation on this point. With respect to the Income Tax, he referred to the hardship with which it bore on industrial incomes. At present incomes were assessed on the average of three years, and if the income fell the tax was still levied on the same amount, though it had never been received, Formerly rebate was allowed, and he thought it would be only just to revert to the old system. He proposed to put down an Amendment to this effect when the Bill got into Committee. He was surprised to hear the Chancellor of the Exchequer say that the profits of brewing were in fewer hands than formerly. The very reverse was the case. Many of the great brewing firms throughout the country had been turned into Joint Stock Companies, and the shares, instead of being divided among a few partners as was the case a few years ago, were now parcelled out among an immense number of small holders, who thus derived the profits from brewing. There was always a considerable amount of public feeling against the Income Tax, which made it difficult to defend and maintain. A national feeling existed that its incidence was unjust, and he would urge again upon the Chancellor of the Exchequer the desirability of considering in Committee the points he had raised.

said, whatever might be the views of the House as to the Chancellor of the Exchequer's proposals—and to express them would be premature—nobody could fail to admire the ability and lucidity of his statement. It must be apparent to everyone that the difficulties the right hon. Gentlemen had to contend with were owing principally to the expenditure that had been undertaken in connection with the national defence. The nation, however, would not begrudge him the money necessary for this purpose, because it was recognised as really an insurance payment for the protection of the trade and prosperity of the nation. With respect to the excise on spirits, he might direct the attention of the Committee to a fact worth noting. There could be little doubt that the extent of the consumption of alcohol was an indication of the state of trade in the country, and the official statistics showed there had been a considerable increase in the consumption of alcoholic liquors. He agreed with the criticism that had been passed on the action of the Chancellor of the Exchequer in availing himself of the Sinking Fund in order to meet the demands upon him. He certainly understood that the right hon. Gentleman had protested loudly against any such course, but his practice was quite the contrary. As to the Trustee Savings Banks, the right hon. Gentleman did not say whether they were also favourably affected in regard to the enlargement of the limit of deposits.

To a certain extent.

was glad to hear it, because, although there had been some cases of criticism in connection with those banks, he was happy to state that he believed they were generally sound. The country owed a great obligation to the voluntary trustees for the interest they had taken in the welfare of the banks, which had undoubtedly done much to encourage thrift among the poorer classes. He could not agree with the criticism of the right hon. Baronet opposite, that these institutions ministered to a class for which they were not intended, and interfered with the interests of the private banks. They heard that sort of criticism frequently applied to Free Libraries and other such institutions which he was satisfied were doing real service to the working classes. He was glad to hear the admission from one of his hon. Friends who preceded him in the discussion that the Post Office banks, so far from conflicting with the interest of private banks, really increased the resources of those banks by in time, through the thrift they encouraged, transforming the small trader into the large trader. He was satisfied that the private banks of the country could not minister, at least in their early stages, to the class of small accumulators who used the Post Office Savings Banks. He believed the banks were a great benefit to the people, and he was glad that the increase in the deposits allowed had led to good results. In the Act there was an automatic provision for the investment of savings and interest in Stock; but it was not used so generally as one would wish. He thought the funds of the country were a reservoir into which the savings of the poor might be largely diverted, with the result that they would have, as in France, a larger class having a distinct interest in the welfare of the country and closely identified with its institutions. He hoped that that provision would be extended. The existing machinery was not the best for the purpose; it was too complicated; it was not understood even by the managers of the banks, much less by the poor investors, and the Chancellor of the Exchequer would undoubtedly do an additional service if he increased the facilities for this investment. There was one provision in the Act of 1890 with which he did not agree. That was the provision with regard to surplus investments, which he thought complicated and restricted. He wished that those who invested largely in local securities of the best character should have further facilities for that purpose. With regard to the remission of Death Duties, he would only remark that the lawyers in this lawyer-ridden country, to use the Chancellor of the Exchequer's words—if no other class be—would be greatly gratified by the removal of anomalies and the simplification and abolition of some of the complexities in relation to the Death Duties. He thought also some of the readjustments commended themselves, whilst as to the system of graduation it had been his duty to sign the Memorial to the Chancellor of the Exchequer presented by the Chamber of Commerce, which consisted largely of the capitalist class; but yet the sense was almost universal that some system of gradation was to be recommended. He believed, therefore, that this was a move in the right direction, and, assuming the principle to be conceded, the scale appeared to be moderate, though perhaps it was considered too moderate in some quarters of the House. The deductions under Schedule A, though not great, were inevitable upon logical and just principles, and he was glad they had been made, especially as they affected the incomes of a class on whom the Income Tax pressed very heavily. He thought the statement of the Chancellor of the Exchequer was very clear and able, and that the right hon. Gentleman was to be heartily congratulated upon it.

said, that the right hon. Member for Bodmin had asked a question as to the working out of the principle expounded by the Chancellor of the Exchequer in the case of a property settled on the father for life, which afterwards passed over to the son, and was then diverted to a nephew. He would assume that the right hon. Gentleman was dealing with a case where the settlement was made by the father or by some ancestor. In that case, on the death of the father, the first tenant for life, this Estate Duty would become payable, and would be graduated according to the amount of the property comprised in the settlement. That would be the only time upon which a distinct duty would be charged upon the property so long as it remained in settlement. On the successive deaths there was no new charge of the Estate Duty beyond the additional 1 per cent. which was imposed upon settled property. In the case suggested, the Succession Duty being payable by the lineal descendant, it would be merged in the Estate Duty. Supposing the property afterwards passed to a nephew, he would be the last partaker under the settlement, and upon his death they would start again and charge the Estate Duty. With reference to him, as he came in under the settlement, there would be no new Estate Duty chargeable; but the Succession Duty would be chargeable in full; that was to say, the same Succession Duty as was now payable, the difference being that if he succeeded to the estate in fee simple he would be charged according to the principal value of the property. The Member for Guildford also asked a question as to whether, in the case of a property of £100,000, one-half composed of personalty and the other of realty, the one-half of the Estate Duty that was to be charged on the realty would fall upon the personalty exclusively, or was it to be charged upon realty. As he understood it, one-half certainly fell on realty.

said, he would like to ask a question on a point which was not clear. Take the case of a settlor who was dead long before the passing of this Act; a tenant for life was in possession of that property under the settlement, and he died. Would any Estate Duty be paid upon the death of that tenant for life?

said, the principle covered that case also. Upon the death of the tenant for life there was a devolution or passing of the property, and upon that devolution Estate Duty became payable.

said, he did not intend on that occasion to refer to all the new proposals of the Chancellor of the Exchequer, but there was one proposal at least to which he, as an Irish Nationalist Representative, desired to draw attention at the earliest possible moment for the purpose of condemning it. No doubt the Chancellor of the Exchequer had a very difficult task in striving to provide for a very large deficit in the Budget of the year; but he thought that on several grounds the very last expedient to which the right hon. Gentleman ought to have resorted for the purpose of making up the deficit was to further increase the inequality of taxation between Ireland and Great Britain. The Chancellor of the Exchequer might have covered the deficit by not allowing the abatements in the Income Tax, or by not making such fine gradations between the different classes of income to be affected by the Death Duties. But the right hon. Gentleman had resorted to the one expedient always resorted to by British Ministers when they found themselves in a financial difficulty—he had resorted to the Whiskey Duty. This course began in the year 1852, when the effect of the increase on the Spirit Duties was to increase the taxation of Ireland by 52 per cent., whereas the increase in the taxation of Great Britain during the same period was only about 18 per cent. The process was continued in several years subsequently, and at last, in 1885, a proposal to further increase the Spirit Duty by 2d. in the gallon led to the ejection of the Liberal Government of the day from Office by the Irish vote. The proposal now was to increase the duty not by 2d., but by 6d. It was said that they did not treat Ireland unjustly when they taxed spirits in Great Britain and Ireland at the same rate. The Irish Representatives had over and over again pointed out the fallacy of that argument. The National beverage—he did not like the phrase, but used it for want of a better one—was whiskey in Ireland and beer in Great Britain; and, therefore, although they put the same tax on whiskey throughout the Kingdom, it fell heavily on Ireland, because more whiskey was consumed there in proportion to the population than was drunk in England. That was the foundation of the complaints which the Irish Members had made from time to time as to the injustice of this financial burden imposed on Ireland. For a long time it had been contended that there, was no injustice to Ireland at all in this continual increase in the Whiskey Duty. In 1852 and for several years subsequently the right hon. Gentleman the Member for Midlothian had steadily defended this increase. However, in 1886, and again last year, the right hon. Gentleman had admitted that Ireland during all those years had suffered great financial injustice—in fact, he believed the right hon. Gentleman had said "shameful financial injustice "—and he could not have based that criticism on any other ground but on the continual increase of the Whiskey Duty. It was, therefore, extraordinary, after those admissions of the right hon. Gentleman the Member for Midlothian, to find the Chancellor of the Exchequer actually proposing not to reduce but to further increase the financial burden of Ireland. The time, too, was very unfortunate. Last year the Government, through the right hon. Gentleman the Member for Midlothian, consented to the appointment of a Royal Commission to inquire into the financial relations between Ireland and Great Britain. The assumption was that there was an Irish financial grievance to be redressed; and yet, before a single investigation by that Commission had taken place, they had the Chancellor of the Exchequer prejudging the question by actually adding to the burden of the taxation of Ireland. He looked upon the proposal to add 6d. a gallon to the duty on whiskey, and only 6d. a barrel to the duty on beer, as a further piece of plunder applied to Ireland, and he therefore could never give his consent to it.

I am sure the hon. Member knows perfectly well that the consumption of alcoholic liquors in England per head of the population is higher than that of Ireland, and higher in Scotland than in England. The figures, roughly speaking, are these:—16s. per head in England; 19s. per head in Scotland; and 13s. per head in Ireland. In fixing the duties as I have done I had in view the complaints made two years ago as to the unfairness, as between different parts of the country, of putting a duty of 6d. on whiskey and only 3d. on beer, and to that extent I redressed the inequality which exists as between the Spirit Duty and the Beer Duty. I was quite prepared, however, to hear there would be complaints on this matter, and I must endeavour to deal with them at the proper time. With regard to coinage, about which I have been asked a question by an hon. Gentleman opposite, I have to say that the original estimate of light gold was £43,000,000. There is already received at the Mint £23,400,000, of which £5,400,000 was received in the year 1893–94. The total deficiency of weight, up to the present time, has cost £382,000, of which £83,500 is due to the year 1893–94. The total number of sovereigns sent in from the commencement of the operation has been 14,000,000, and the value of half-sovereigns £9,500,000. The loss, per 1,000 sovereigns, has been £11. The loss, per £1,000 worth of half-sovereigns, has been £24·1. The withdrawals are proceeding at a much slower rate. In 1893–94 the average weekly withdrawals were less than a third of those in 1892– 93. The average loss on each piece is also considerably less since the beginning of the year 1894, especially on the half-sovereign. Loss on whole period:— 2·651d. on sovereigns; 2·891d. on half sovereigns. Loss in early months of 1894:—2·605d. on sovereigns; 2·548d.on half-sovereigns. There is a balance still left of the original fund of £53,500 available for the year 1894–95.

said, the Chancellor of the Exchequer had told them that the Permanent Debt Fund was a great resource and a great reserve; that it was our war chest, and that no diversion from it would be made to meet the deficit. And yet after that statement the right hon. Gentleman laid his hands on over £2,000,000 which would otherwise have gone to the reduction of the Permanent Debt.

was understood to dissent from this statement.

^* said, it was plain that the Chancellor of the Exchequer had diminished by £2,000,000 the amount that would have gone to pay the Debt, old or new. The right hon. Gentleman would have had to find £2,000,000 from Revenue had he not laid hands on £2,000,000 which he ought to have applied to the reduction of the Debt. He confessed that after that proposal he heard with astonishment the right hon. Gentleman's talk about the sacrifices which our fathers had made. The sacrifice which our fathers made was to impose taxation upon themselves. The sacrifice which their son, in the person of the Chancellor of the Exchequer, made was to take money intended for the reduction of the Debt and use it for the payment of expenses. That was not a good way to follow the example of our fathers. With regard to the Death Duties, he understood the right hon. Gentleman to say that the Legacy and Succession Duties were to remain at the same rates as at present, and to be collected in the same way, but in addition to the Estate Duty. From what the Solicitor General said, however, it seemed that these were not to be in addition to the Estate Duty. The most marked feature of the Budget was that it was a Budget for taxing the rich in order to relieve the poor. How was that justified? The right hon. Gentleman the Chancellor of the Exchequer had told them that the rich were getting poorer and the poor were getting richer. He said that trade showed a progressive decline, and if there was a progressive decline in trade the trader must be a sufferer.

denied that he had stated that there was a progressive decline in trade.

said, he had taken down the right hon. Gentleman's words, and he would appeal to to-morrow morning's papers to prove the accuracy of his note. In the meantime, if the right hon. Gentleman denied the accuracy of his quotation, he would withdraw it. The right hon. Gentleman had said that the articles of consumption by the wealthier classes, such as wine, were decreasing, and that seemed to show that the wealthy classes were getting less wealthy. For instance, the tobacco revenue was decreasing, as also was the Stamp Revenue for business stamps. Then the right hon. Gentleman told them that there was no sign of diminution in the power of the wage-earning class to buy the commodities they needed, and no sign even of pinching. That made good the assumption that the rich were getting poorer and the poor richer. Nevertheless, what did the right hon. Gentleman do? He put the whole of the new taxation on the rich. Not only did he refrain from putting a halfpenny of new taxes, directly or indirectly, upon the poor, but, of malice prepense, he increased the Income Tax of the relatively rich, not because he meant to keep it or wanted it for revenue, but in order to relieve the relatively poor. The right hon. Gentleman might have put the 1d. on the Income Tax in the usual way, squaring up the account in a handsome, simple, and comprehensible manner; but he put it on in one quarter so as to relieve the lower order of Income Taxpayers. He might have left the Income Tax alone, seeing that there was no gain to the Exchequer by the operation. The right hon. Gentleman was simply endeavouring to frame a popular Budget. He (Mr. Bowles) did not wish to see a large burden put upon the poor, but he agreed with the excellent moral apothegm of the Chancellor of the Exchequer that—

"A good system of taxation was that the burden should be imposed where it would be least felt."

Where it would be least felt just now, according to the right Gentleman, would be amongst the poorer classes, whilst amongst the richer classes—who, as they all knew, had fallen away from the Government— it would be most felt. With regard to the Death Duties, no doubt justice required that when a man became possessed of an estate in fee he should pay duty on the capital value of it as a man who became the possessor of a similar sum in cash; but there was this difficulty, which had always hitherto been recognised, that in the case of £1,000 left to a man, if the State wished to take £10 per cent. of it, it could take £100, leaving the owner £900; but in the case of 1,000 acres of land left to a man the State did not take 100 acres, but required him to raise a mortgage (which was a difficult thing to do) and to pay in golden sovereigns. He maintained that the right hon. Gentleman was adopting not an equal treatment, but a differential treatment as to land. He had only risen to show how little he understood the Budget, and to ask for an explanation which would be useful to himself and to other hon. Members.

said, that so little time had passed since they heard the Budget proposals made that they were hardly able to go into details as yet, or even to discuss the principles laid before them. But some points had struck him, and he should like to make some remarks on a few of them. He did not altogether approve of the way the Chancellor of the Exchequer proposed to pay for the naval debt. He did not want to say anything about the Death Duties. It was not a subject which concerned the class of people he represented there, but had relation to those who were interested in real property rather than those who represented a purely business community. With regard to the Income Tax, although he naturally objected to the extra penny, he supposed it could not be avoided. If it was necessary to increase that tax it was satisfactory to know that most of the money that would be raised would come back to the class of people of small incomes, who needed every indulgence that could be extended to them by the Chancellor of the Exchequer. The working classes did not pay any Income Tax, but there was a large class of clerks and professional men, and the poorer class of the clergy, whose income, although nominally above that of the working man, had so many calls upon it that, strictly speaking, he believed they were actually poorer than working-men; and anything that could be done to lighten the burden upon them was a step entirely in the right direction. The next way in which the Chancellor of the Exchequer proposed to raise money was by increasing the duty on spirits and beer. The duty which was to be levied on Irish spirits was a matter which certainly concerned him as much as the hon. Member for North Dublin. The Chancellor of the Exchequer had explained to them that the duty was so small that it could not touch the consumer. The manufacture of whisky was one of the few manufactures that still flourished in Ireland, and any extra taxation would tend to interfere with and diminish the industry. The consumption in Ireland, too, was one of whisky and not beer, but apart from that he considered that Ireland already paid its fair share of taxation. It was certain that the tax would act adversely on the trade in Ireland. But even in that case, if it was absolutely necessary that taxation of the kind should be imposed, it must of course be borne. Why, if it was necessary to raise revenue by imposing this fresh tax, why was it not imposed in the case of foreign spirits also?

That is the case. A Resolution to that effect will be proposed.

I did not take it to be so from the speech of the right hon. Gentleman the Chancellor of the Exchequer.

Yes, a Resolution will be proposed for the imposition of a similar tax on foreign spirits.

said, he was glad to hear this, because it had seemed to him a strange thing that foreign spirits should be exempted. If that were the case, no doubt a considerable revenue would be produced, and possibly the duty on Scotch and Irish whisky might hereafter be reduced.

said, there were so many points of the Budget with which he sympathised that it was with considerable regret that he had to offer some criticisms upon the provision for increased taxation of beer. He hoped, before this Resolution was passed, they would have some information as to whether it was intended to make this increased tax permanent. He knew nothing about spirits, but he did want to get at this information in reference to beer. He assumed that but for the considerable expenditure on the Navy, no increased tax on spirits or beer or any increase of the Income Tax would have been necessary. What he would like to hear was whether they were to regard this tax on beer as a temporary tax for a year or as a permanent measure? He should like an answer to that question, and he was bound to say it would materially influence the view he should take upon it. The Chancellor of the Exchequer spoke of the profits of brewers as being of a very extraordinary nature, and indicated that he could if he would divulge some figures that would astonish the House. He ventured to say there was nothing extraordinary about the profits of brewers. It happened that the greater part of the brewing trade was carried on by Public Companies. Their operations were the subject of annual balance-sheets which were made public, and it was perfectly well-known that the ordinary profits of the brewing trade were very moderate. He did not know whether any of those gentlemen who represented more particularly the barley growers of this country would have a word to say about this imposition of practically 2s. a quarter on barley. The Chancellor of the Exchequer might say this was a very small impost, which would not diminish the price of barley. But it might as well be said that if you did away with beer-drinking altogether you would not diminish the price of barley. He thought the impost was one which must be very unwelcome to the barley growers of this country. They were told that the working man would not be hurt by this tax. He ventured to think that the working men would take a very different view—namely, that if there were no tax they would get more or better beer for their money. He noticed with regret that, while in this extremely ingenious Budget spirits were taxed and a considerable increased duty laid upon beer, which was the beverage of the poor man, wine, which was the luxury of the rich, was left untouched.

said, he would not detain the Committee upon the particulars of the Budget except so far as it affected the brewing trade, of which he had the honour to be a member, because he was aware they would have an opportunity later on of discussing these questions. He must say he listened with some apprehension to the words used by the right hon. Gentleman the Chancellor of the Exchequer. He understood from them that the interest of their trade was not of much importance to him, and it was therefore with some sense of satisfaction that he found the right hon. Gentleman, when in want of help, turning first of all to their particular trade to get out of his difficulty. The trade was being bled to death for the benefit of the country; but he saw at least a short renewal of their lease of life in the fact that the Chancellor of the Exchequer considered the trade to be of financial use to the country. The point to which he wished to call attention was the proposition that this tax of 6d. a barrel should fall upon the manufacturers. Their view was that the time had gone by when it was possible for the manufacturers to pay increased taxation—which must in the end fall upon the consumer. When, in 1880, the right hon. Gentleman the Member for Midlothian repealed what was then known as the Malt Tax, but which was in reality a tax upon barley, he explained that although he was only repealing one tax and imposing an equivalent tax, he expected to get a small sum for the Exchequer out of the difference in the rate of exchange. It was pointed out to him that the new tax would place upon them an additional duty of no less than 2s. a quarter over the old tax—a duty equivalent to 24s. of the old Malt Tax. They must now add the 3d. a barrel extra imposed in 1889 and retained in 1890, which made an additional 3s. to what was paid under the old Malt Tax, together with the present addition of 2s. per quarter—making in all 5s. more than they used to pay. He contended that when in 1885 Mr. Childers brought his Budget before the House it was shown to him most clearly that the increase of taxation already made had fallen most heavily upon the agricultural interest of the country; and they maintained that if this new tax was imposed, it must in the end fall upon the producer and the consumer in the shape of increased price or an inferior article. He hoped the Committee would Jake the view adopted in 1885, and refuse to increase taxation,, which must eventually fall upon the producer or consumer.

said, he wished to ask a question or two of the right hon. Gentleman the Chancellor of the Exchequer. He was bound to say, with regard to the interesting speech they had just heard, that he must congratulate the hon. Member on his maiden effort; but he must point out that the only way in which the difficulty could be got over and this tax got rid of was to stop drinking beer altogether. No spirits or beer were required by anyone. There was not a doctor who would not tell them that a man was better without it. Still, if they wanted to levy an extra tax it was better to put it on the luxuries of life than the necessaries. Some people denied that, but they could not prove that spirits and beer were a necessity. All the doctors would tell them they did not require them. So far as he was concerned, he objected to this Navy business altogether, because undoubtedly the scare was got up by the Conservative Party for the purpose of taking attention away from reforms, and especially from Home Rule. [ Laughter. ] Hon. Gentleman might laugh, but they knew it was a scare which had been tried before, and which was too often successful. He was sorry that the Government and the majority of the Liberal Party had given way to that scare. The consequence was, that they had now to find this large sum of money, and no doubt they would have another scare next year, because, of course, as a result of what we were doing, France and Russia would go on building more ships. Instead of building ships, he should like to see a Liberal Government proposing arbitration with a view of settling difficulties and keeping peace. He thought he might congratulate the Chancellor of the Exchequer, not only upon the clear statement he had made, but also upon the fact that he had introduced a Budget which went a fair way to putting the Death Duties upon an equitable basis. He admitted he should like to have seen the Chancellor go further in the way of graduating the Income Tax, while admitting what he had said as to the difficulty of carrying it out; but they were, at any rate, right in thanking him for what he had done, because his proposals would relieve those with small and precarious incomes who had a difficulty in making both ends meet. An hon. Gentleman said just now that the working man would object to this tax on beer, and the hon. Member for Belfast said that the working man did not pay Income Tax. So far as the calculations of experts had gone, they went to show conclusively that the working man paid a very large share of the Imperial taxes—a larger share than any other class of people in this country. [Sir W. HARCOURT: Hear, hear!] He was glad to see that the Chancellor of the Exchequer acknowledged that. It was wrong to suppose that working men did not pay Income Tax, or contribute a fair share towards the Imperial taxation of the country. With regard to the working man suffering by the tax on beer, it had been said that he would have to put up with an inferior article. He was sorry the Government had not brought in an Adulteration Bill. It had been told him by experts that a good and effective Adulteration Bill would close half the public-houses in the country.

said, that convictions for watering beer could be had, and the Inland Revenue was constantly inquiring into complaints made.

was very sorry to say that the existing Act was not very effective. It was a delusion and a snare, and prevented the Local Authorities from making use of their own powers against adulteration. Beer was already adulterated, and an hon. Gentleman had told them that, in consequence of this new tax, it was to be further adulterated.

What I said was, that the working man might get inferior beer.

said, he should agree with his hon. Friend if more water was to be put into the beer. According to his view, it would be all the better beer on that account. But he understood that what was meant by inferior beer was adulterated beer. He wanted now to ask the Chancellor of the Exchequer two questions. The first was with reference to the importation of methylated spirits. He was told that this seriously interfered with the makers of methylated spirits in this country, because they could get no drawback. His second question had reference to the assessment of the Property Tax and House Duty. He was glad to know that the Chancellor of the Exchequer had dealt with one portion of the question —that was to say, he was going to make an allowance so far as the Property Tax was concerned. Was he going to make an allowance in regard to the House Duty also? It had always been held that the gross value was an unfair value, and the Chancellor of the Exchequer had said that in future he would levy the charge upon the rateable value. If it was fair to make the allowance upon the Property Tax, it must be fair to make it also in regard to the House Duty. He understood his right hon. Friend did not mean to take it off the House Duty this year, and so they would have something more to ask for next year. So far as the Property Tax was concerned, they might thank him for having done justice in that direction. They had been told by the Chancellor of the Exchequer that the additional 6d. per gallon upon spirits would not make any difference to the retail buyer. That might be correct, but the retail buyers would find more water in their whiskey. The result of that would be that a whiskey drinker, finding his spirit watered, would have to buy two glasses where he only bought one now. No doubt the Chancellor of the Exchequer would profit by that, but he was not sure it was a safe way to obtain increased revenue. On the whole, he thought they might congratulate the Government upon what would undoubtedly be a popular Budget, and one which was fair towards all classes in the country. It might take some trouble to get it through the House, but the Government and the Chancellor of the Exchequer might rely upon being backed up outside the House.

said, with reference to the adulteration of beer spoken of so much by the hon. Gentleman who had just sat down, he must say he did not believe in it. The hon. Gentleman who had spoken of inferior beer did not mean that it was adulterated, but that more water was likely to find its way into it. He (Mr. Usborne) affirmed that this duty was the old Malt Duty, and would be more disadvantageous to the English farmer than the former duty. It was a tax upon barley according to yield. The alteration which was made some time since was a serious blow to the English farmer. What he wanted to press upon the House was, that this was not a duty of 6s. 3d. per barrel on beer, but a tax of 6s. 3d. on each two bushels of barley yielded. He spoke as representing an agricultural constituency, and asked the Chancellor to do what he could to help the farmer. He could not ask the Government to do much to relieve the grievances of the farmers, because be believed himself that protection was a political impossibility and bimetallism an absolute one. At the same time, while he could not seek for help in this direction, he could, at all events, ask the Chancellor of the Exchequer not to do the farmers more harm by proposals of this kind. He now came to the point who was to pay the tax. It had always been held by hon. Gentlemen opposite that the consumer paid, but the right hon. Gentleman the Chancellor of the Exchequer now said, "I have raised the tax so slightly that it will not be felt on the glass of beer." He (Mr. Usborne) felt that chat was the case. Competition compelled the brewers to use the pump as little as possible, but, undoubtedly, if the brewers were to make the profits they had made in times gone by, something would have to be done. If hon. Members would glance at the balance sheets of the Brewing Companies it would be found that the profits made were not very large. He knew this was so in his own case, and believed that that state of things was general. There was not a large rate of interest made on the capital sunk. They were told in some quarters that the more water put into the beer the better; but the working men whom he knew — hardy agricultural labourers— liked to have as much malt as they could get in their beer for the money. The person who would suffer most by even the slight additional tax was, in his opinion, the farmer. At the present moment the tax of 6s. 3d. per barrel, or per two bushels of barley, was equal to the value of the barley growing in the field. It was a tax of 100 per cent. on the product, and, at any rate, so far as his constituents were concerned, barley was the only crop left out of which the farmers could make a decent profit. Hon. Members opposite did not profess to be great friends of the landowners or tenant-farmers, but they did profess to be the friends of the agricultural labourers, and he would therefore remind those hon. Members that the imposition of this extra taxation, however slight, tending as it would to injure the trade from which the labourers derived their wages, would tend to injure the labourers themselves.

(whose observations were almost inaudible in the Reporters' Gallery) was understood to say that he was glad to hear a speech from the hon. Member who had just sat down, who was so well acquainted with the brewing trade. The hon. Member spoke not only as an agricultural Representative, but as having an interest in brewing. Ever since he (Sir W. Harcourt) entered Parliament the Malt Tax had been a grievance of the agricultural class, and when that was repealed the Beer Tax was objected to. He found that the profits on a glass of gin, rum, or brandy ranged from 100 to 260 per cent. The hon. Member repudiated the idea of the adulteration of beer, but he would suggest to him that instead of watering his beer he should follow the example of the gentleman on 'Change and "water his Stock." If the hon. Member and his friends would water the profit and keep the beer what it was, everybody, except, perhaps, the hon. Member, would be pleased. Of course, all taxes were more or less odious, but under the circumstances he did not see that any indirect tax that could be suggested was open to less objection than the one now proposed. In the time of Sir Robert Peel the amount of indirect taxation as compared with direct taxation shocked one's nerves to consider. At the present moment the indirect taxation of the country was greater than the direct taxation. He admitted that great progress had been made in improving the balance between the two—first, under the auspices of Sir Robert Peel, and then under the auspices of his right hon. Friend the Member for Midlothian (Mr. W. E. Gladstone), and the tendency had been to bring direct taxation, through the Income Tax, the Death Duties, and other direct sources of taxation, more into play, and to throw less of the burdens upon the poor. That had been the policy during the last 50 years, during which there had been an enormous increase in the wealth and contentment of the people, and that was the path which he invited the House to continue to tread. The balance between direct and indirect taxation had not yet been equalised; but he had always thought it was not a fair thing to make a Budget deal exclusively either with direct or indirect taxation. He felt, however, that when financial proposals were made, the greater weight ought to fall upon direct taxation and not upon indirect taxation. As to methylated spirits, they were dealt with, like other spirits, according to a certain scale. He might mention that one. of the things that had led to the enormous profits made on British spirits was that, whereas in old days foreign spirits, which were largely used as the basis of British manufactured spirits, cost a great deal, during the present year raw German spirit had been imported at 7s. 6d. a gallon. Hon. Members could conceive what profits were made by a manufacturer whose raw material could be obtained at that price.

said, he proposed to refer briefly to that portion of the Chancellor of the Exchequer's statement which referred to agricultural land. It was, of course, impossible for him to appreciate at present the exact extent to which the right hon. Gentleman's proposals would operate. As far, however, as he was able to comprehend them, it seemed that the ultimate object of the Chancellor of the Exchequer was to place land in an exactly similar position to that occupied by personal property. It was only last Friday that a discussion took place on the present deplorable position of the agricultural interest, and the Chancellor of the Exchequer spoke of it in the most sympathetic terms. Yet the declaration the right hon. Gentleman had made in his Budget speech seemed to imply that, so far from appreciating what the position of the landed interest really was, he had determined to place it in an infinitely worse position in the future than it occupied now. The right hon. Gentleman the Member for Midlothian (Mr. W. E. Gladstone) had often in his great financial speeches referred to the fact that one of the difficulties under which the owners of land laboured at present, and one for which they were in no degree themselves responsible, was that in many instances their properties were charged with mortgages. Such mortgages had been incurred in bygone times, not necessarily to meet the extravagances of the tenants for life, but frequently for providing for younger children, and for other very proper objects. During the last 25 years a tendency had been shown by existing owners to endeavour to prevent the recurrence of this state of things in the future. He was bound to say that they had been assisted in this endeavour by the circumstances of the times, because many landed estates now had practically no value at all, and therefore could not be mortgaged. Happily, the development of the system of life insurance had enabled many existing tenants for life not merely to make provision for their young children, but also to relieve their successors of the obligations they would otherwise have to incur on succeeding to the estate. If he understood the Chancellor of the Exchequer's proposals aright, one practical effect of them would be to force upon successors to landed estates in the future the obligation of mortgaging such estates, whether they liked it or not. He observed that the Chancellor of the Exchequer shook his head, and he was very glad he did so, because he could not help hoping that he had misapprehended the full import of the proposals which had been made to the Committee. As far, however, as he was able to see, on the death of an existing owner, his own or other successor would be called upon to pay a lump sum based upon the capitalised value of the property, and spread, as Succession Duty now was, over a period of four years, the only difference being that, whereas at present the payments held over were not liable to interest, they would in future be charged with interest. How was the limited owner of property in agricultural land to get the money which the State would demand of him on succession to his property unless he raised it on mortgage? The man who succeeded to Consols, or Railway Stock, or other securities, could always obtain the sum demanded of him by the State, either by selling a part at once or by raising money on the securities until the market was favourable. The man who succeeded to agricultural land was, whether he was an owner in fee or a limited owner, in a totally different position, because in most cases he would be unable to sell, and in many cases would have the greatest possible difficulty in getting anyone to take his land for nothing. [ Ministerial laughter. ] Hon. Members might jeer at that remark, but he was confident that they would not be content in the oases he had in his mind to pay the rates and taxes, to provide money for keeping up the farmhouses and cottages, and to bear the other expenses, even if they got the land practically for nothing. There were thousands of acres of land which were at that moment out of cultivation, which nobody would buy, and which could be put to no purpose even if they were bought. It seemed to him that the only course that would be open to a man who succeeded to a landed estate and had to meet the demands of the Inland Revenue Department would be to raise a mortgage, or, in other words, to do the very thing which the present generation of landowners had been trying to make impossible in the future. He would not now attempt to discuss the ownership of land on its merits, although he thought that there was a very good case to be made out for the landowners. He was not ashamed to confess that he represented agricultural owners and farmers as well as agricultural labourers, and he thought that those who claimed to represent the labourers only would do well to remember that if they impoverished the owners they would injure the labourers as much as they would the owners. The burdens that fell on agricultural land at present were very heavy, notwithstanding the fact that the late Chancellor of the Exchequer (Mr. Goschen) did a good deal to help them by increasing the contributions that had been made to local taxation, and he only wished that the present Chancellor of the Exchequer had seen his way to further increase the sum from £7,000,000 to £10,000,000. It would then have been felt that the right hon. Gentleman had tried to help the agricultural interest with one hand, though he had felt compelled to punish it with the other. He did not think there would be any difficulty in showing that, whether it were regarded from the point of view of the taxes or from the point of view of the rates, agricultural land bore a very severely undue proportion of the burden it ought to bear. Although he fully understood that the Chancellor of the Exchequer had made this proposal because he believed that land had hitherto enjoyed certain advantages with regard to the Death Duties, the result of the proposal would, he believed, be to place land in a still more advantageous position than it had hitherto occupied, and to place on the owners of the future burdens which they would have the greatest possible difficulty in meeting. If that were the result of the proposal made that evening, it would have been a bad day's work for the country, because it would make the position of the agricultural owners harder than it was now and would throw more difficulties in the way of the various classes who depended upon the land for a livelihood. He raised the question not from any desire to take a factious view of it, but simply because he thought it necessary to protest on behalf of those who were in a minority in the country, but who had hitherto done their best and, in his opinion, had nothing to be ashamed of, against a proposal which appeared likely to inflict a serious injury upon them.

We on this side of the House are always treated as if we were the natural enemies of the landed interest. I disclaim that position on my own behalf. I have lived in the country nearly all my life, and am quite as much interested in the welfare of the landed proprietors, and have quite as much knowledge of them, as any Member of the House. I should be extremely averse to doing consciously any injustice to a class for whom I have a great regard. Nothing I have proposed is, in my belief, unjustly adverse to their interests. The hon. Member said that land was now the last thing that anybody would buy. I will tell you what the Chancellor of the Exchequer is going to do with land that nobody will buy. He is not going to tax it. Land is to be taxed upon its marketable value. Anybody who knows country life knows very well that it is the surveyor and the agent who tells everybody exactly what they are worth. I put a question the other day to a dealer as to the principle of valuing works of art, and the answer was that he valued them at what he knew he could sell them at, allowing a profit of 10 per cent. At all events, that is not an unfair way. It is not the practice of the Inland Revenue Department to take the extreme pound of flesh. If land has fallen in value and it is worth nothing, it will pay nothing. The question is as to the actual market value at the time the land is sold. It is the great ground rent property which will be touched by the Government proposal.

said, the Chancellor of the Exchequer had not answered the point raised by his hon. Friend. The real fact was that the duties were to be increased, and the right hon. Gentleman intended to get a certain number of additional millions from that increase; and those additional millions must be paid by the landowners, who said that they would have to raise the money either by mortgage or by insurance.

The right hon. Gentleman uses the word "landowners." If he substitutes the words "real estate," I will agree with him.

said, then the right hon. Gentleman did not expect to get more out of the landowners. But he could not escape from the proposition that if the rates were increased the land- owner would have to make more provision by insurance than he made now. The right hon. Gentleman did not appreciate the very small margin that there was for this provision among landowners who were supposed to be wealthy' because nominally their rent roll was high. On many estates the charges were large and the outgoings great, and the provision to be made for those large sums would be very much increased. It was because the right hon. Gentleman had not appreciated the point of his hon. Friend that he had intervened.

^* asked the Chancellor of the Exchequer on what basis he estimated that the extra charge of 6d. a barrel on beer would produce £580,000?

said, that in that matter he relied upon the authorities, who informed him that that was the sum which the duty would yield. It was taken upon an assumption of the diminished consumption, owing to the increase in the duty, which he was not at all sure would take place.

^* said that, as far as he could make out, 7½d. a barrel would produce £1,000,000, and that he could not see why, if it was only desired to raise an additional £580,000, it was necessary to impose an extra duty of 6d. per barrel.

said, he would make inquiry.

said, he regretted that the Chancellor of the Exchequer should have thought it necessary to increase the Death Duties on land, because he had always understood that it was difficult to find the money to pay them. The Chancellor of the Exchequer had told them that a man could insure his life to pay the Death Duty, but a great many-would not do so, because their successors were just as well off as they were. He understood that the Death Duties on land were lower than the Death Duties on. personal property because of the extra charges that had to be incurred by the owners of land in raising the money to pay the duties. He was very glad to hear that estates which returned very little would have to pay very little. As to estates valued by surveyors and others, who made it their business, he contended that if the Chancellor of the Exchequer valued land at the price put upon it by them it was a false value; and in order to raise the vast sums of money to pay the Death Duties, it would make it unequal with personal property. Hon. Members knew that the sale of personal property cost very little, but every £1,000 obtained by the sale of land cost a great deal. It had, therefore, always been considered up to this time a very fair thing that the Death Duties upon land should be lower than the Death Duties upon personal property. He would like to put this case to the right hon. Gentleman: For a large estate the sum of £750,000 had been offered. He did not say that the estate was worth it, but it was peculiarly situated, and a rich man was found to make the offer. The owner of the estate had lately died, and he wanted to know whether the Chancellor of the Exchequer meant to say that his successor would have to pay Death Duties upon that valuation? Was he prepared to tax the land to such an enormous extent, simply because one man had offered this large sum of money for an estate which was not intrinsically worth it?

said, the hon. Member could not expect him to say what he would get out of the Death Duties for an estate which had just fallen into Chancery. Several gentlemen had got up and made complaints of his conduct towards the agricultural interest, but he had arrived at an age when no man expected gratitude. Experience of life showed that it was a quality not to be found on the terrestrial globe. One country gentleman after another had got up in that House, and not one of them had made any acknowledgment of the abatement he had proposed under Schedule A of the £800,000 given to real estate out of Income Tax. The Government had been persecuted into getting rid of the Malt Duty, and now the repeal of the Malt Duty was a great crime against agriculture. He was going to make an allowance to-night under Schedule A, and to-morrow he would be told that it was a great evil to the landed interest. He had done what he had done not for the purpose of gaining support, but thinking that it was only a fair thing to do. These were not encouragements to a Chancellor of the Exchequer to operate in this direction.

^* said, that as he understood the proposition of the Government, it was at the present moment to raise more revenue by the sale of beer and spirits. They did not propose to diminish the consumption of beer and spirits, and they were going to increase the taxation, and to allow the Revenue to rely more and more upon what was commonly known as the drink traffic. Was that action consistent with the action of the same Government in bringing in a measure of local option, which had for its object the diminution of the consumption of beer and spirits? It appeared to him that the Government were adopting two modes of legislation proceeding on entirely different principles. The more they sought to raise the Revenue by means of the drink traffic, without increasing the price to the consumer, the less title they had to claim to do that which so many hon. Members opposite desired—the getting rid, as far as possible, of the drink trade.

said, he believed nothing was clearer than the fact that it was not the working classes of this country who were anxious to increase the Navy. That cry had come from the classes, and the right hon. Gentleman the Member for St. George's, Hanover Square (Mr. Goschen), was fairly entitled to the honour of being regarded as the King of the Jingoes, for it was he more than any other man in his position who had fostered the scare about the Navy. He listened to the right hon. Gentleman when he was Chancellor of the Exchequer, and raised the enormous sum necessary for the increase of our Navy, and the right hon. Gentleman then said that it would be necessary in the near future to contemplate a further increase. But the right hon. Gentleman was now obliged to admit that the charges imposed on that occasion were insufficient—[Mr. GOSCHEN indicated dissent]—and to that extent, therefore, it was an unstatesman-like proceeding, and it had left to the present Government the task of not only meeting the present severe demand, but of paying off the right hon. Gentleman's debt. They would hear a great deal more probably, both here and elsewhere, upon this question, for there was no possibility of our increasing our Navy without stimulating other nations to correspond- ing increase. He hoped the Government would soon make some effort, by way of appeal to the Governments of Europe, to check the stupendous folly which was hurrying the nations to a catastrophe which no human being could contemplate without horror and dismay. He thought the Chancellor of the Exchequer was deserving of the highest praise on the part of the masses of the country for the courageous way in which he had dealt with the question of taxation. They were now engaged in the righteous crusade of undoing the wrongs of the past, and his right hon. Friend bad not reached the limit of the change which he had introduced for properly adjusting the burdens of taxation. He would ask hon. Gentlemen opposite what sort of figures they presented to-day? They had urged on the Chancellor of the Exchequer an increase in the Navy, and directly it was sought to make provision for such increase they appealed to the right hon. Gentleman for exceptional treatment. He had been in the House for a quarter of a century, and whenever during that period an increase of taxation was made he had heard the same appeal from hon. and right hon. Gentlemen opposite on behalf of the agricultural classes. The hon. Member for Liverpool asked for some abatement for the owners of large landed properties, because they would have a difficulty in raising taxation. But he (Mr. Illingworth) came from a part of the country where there were large properties which were not landed—large industrial undertakings, and many of these were heavily mortgaged. Well, the proprietors of these undertakings did not plead for exceptional treatment. The plea came from the idle class, and from those who had done nothing to earn their properties, but had had them left to them. They it was who asked to be relieved at the expense of the industrial classes. He ventured to think, however, that this onslaught on the Chancellor of the Exchequer would be entirely unsuccessful, and he wished to warn the Representatives of the landed classes that they were not going to strengthen their position in the country by putting forward such pleas as they had advanced to-night. He thought the task of his right hon. Friend the Chancellor of the Exchequer would be easy in respect to increasing the Beer Duty. There was no class which had had such a return for the capital employed and, in the midst of the prevailing depression, had been accumulating so much money as the brewers, who had been employing a power for mischief in this country that ought to be checked.

I have listened with interest to the specimen of old Radicalism which we have just heard. The hon. Member with perfect consistency objects to the increase in the expenditure on the Navy proposed by Her Majesty's Government. Well, why did not he and others who agree with him express their sentiments the other night? He attributes to hon. Gentlemen on the Opposition side of the House the responsibility for the large increase of expenditure on the Navy. Sir, we accept that responsibility willingly, for we believe that the constituencies of the country, including that of the hon. Member himself, approve our action. But the Government have distinctly denied that we have any responsibility in the matter. They have taken the responsibility on their own shoulders of their own will, and without any pressure from us. [ Cries of "Oh!"] That is what the Government themselves say, and do not hon. Members opposite believe their own Leaders? They insist that this increase of the Navy is made absolutely on their own motion, and that we have had absolutely nothing to do with it. But I do not care to question from which side of the House this proposal for an increase of expenditure comes; it is necessary, and the Opposition, whether they are responsible for it or not, are ready to support the Government in the course they have taken. While the hon. Member for Bradford goes on—as he has done for years in this House—comparing the burdens of the landlords with the burdens of other classes of the country, I confess I cannot help thinking that the hon. Gentleman is talking of a matter he does not quite understand. I could not wish anything worse for the hon. Member than that he should be a landlord with property in the South of England at the present moment. Sir, I should like to make a few observations to the Committee on that part of the Budget which the right hon. Gentleman has just proposed, which especially bears on this subject. The Chancellor of the Exchequer has found fault with the Opposition for not acknowledging the boon which he has conferred upon owners of land and real property by allowing deductions in calculating the Income Tax under Schedule A from the net instead of the gross value. I should be very sorry not to acknowledge that that is a boon, and I feel sure that hon. Members on this side of the House who represent agricultural constituencies will take the same view of it. But I would remind the right hon. Gentleman that in the deductions which he has proposed of 10 per cent. in the case of farms and 16 2–3 per cent. in that of houses he has not quite met the necessities of the case. Many years ago the right hon. Gentleman the Member for Midlothian stated that in his opinion a 7d. Income Tax upon Schedule A was practically equal to a 9d. Income Tax on account of the extra burdens. If the right hon. Gentleman had made deductions that would be equivalent to that amount, I think we might have felt-obliged to him, but he has fallen much short of this.

We can withdraw the proposal.

I do not think he will withdraw it, because his Budget would be so unfair if he did not give this slight boon. I would ask him not merely to look at the authorities he quoted in his Budget, but also to have regard to the inquiry of the Select Committee—of which I was a Member— which was presided over by Mr. Ward Hunt, in 1867, on the Valuation Bill, which was proposed by the Government of that day. I think he will find that the Committee arrived at a practically unanimous conclusion as to the deductions that might be made throughout the country in calculating the net value of the rateable property from the gross value for purposes of rates, and if he would adopt the conclusion at which the Committee arrived I think it would be very much fairer to real property than what he has proposed. But, Sir, after all, what has the right hon. Gentleman proposed? It is not a boon to the landowner. It is a small matter so far as the landowners are concerned as compared with the owners of house property. I do not think that when the right hon. Gentleman suggested across the Table that he would possibly withdraw this, that he really had considered the full application of his proposal. I am sorry that in dealing with the Death Duties the right hon. Gentleman has not seen his way to make a clean sweep and to deal with the matter as a whole. I find there are five Death Duties—the Probate Duty, the Account Duty, the Legacy Duty, the Succession Duty, and the Estate Duty of my right hon. Friend the Member for St. George's, Hanover Square. The right hon. Gentleman does practically nothing but fuse the Probate and Estate Duties. The Account Duty, after all, is merely a guard to the Probate Duty, as the right hon. Gentleman well knows. It is to prevent the evasion of it. It produces practically nothing to the Revenue of the country. In any way the right hon. Gentleman may propose to carry out that part of his Budget there must be some small guard to the new Estate Duty which he proposes to enact. Previous Chancellors of the Exchequer in dealing with this duty have invariably found that the produce of those duties has been less than their estimate. The right hon. Gentleman calculated that in the first year, assuming the Bill becomes law on June 1—which is very unlikely—the duty will produce £1,000,000. I myself do not believe anything of the sort, nor do I believe that in future years we shall get anything like £3,000,000 or £4,000,000 the right hon. Gentleman anticipates from the duty, because if the duties are increased and levied in the way he proposes they will be largely evaded. It is all very well to talk, as the hon. Member for Leicester talked, about the iniquity of anyone leaving property of a million in value. It may be right or wrong—I do not want to deal with that question. It is right from the point of view of the Chancellor of the Exchequer. But I suspect that people who own millions will have the advice of skilled lawyers, who will take care that comparatively little of their wealth comes under the graduated scale of the Chancellor of the Exchequer. That is a point that I have no doubt the right hon. Gentleman has considered. But now I want to put to him one or two points with regard to the difference between real and personal property. The right hon. Gentleman proposes, in the first place, in return for the boon which he ' gives to real property, by calculating it under Schedule A, at its net rather than its gross value, to abolish the present system under which real property is calculated for Succession Duty at the life interest only, and not at the capital value. To that I have only to say that it is a very important change, the system of calculating life interest only being adopted by the right hon. Gentleman the Member for Midlothian in 1853 on very sound and valid grounds, which the right hon. Gentleman may find out if he cares to refer to the remarkable speech that the right hon. Gentleman the Member for Midlothian delivered in introducing his Budget in that year. The right hon. Gentleman pointed out that it was a matter of simple fairness to real property that it should have this allowance as against personal property in calculating Succession Duty, and he proposed a Succession Duty on that basis on which it has remained. I do not now wish to argue the matter. I merely wish to assert that it is a very important change as against real property. Besides this great change, the Chancellor of the Exchequer proposes, with regard to Succession Duty, to maintain the existing system of payment by instalments which, for obvious reasons, is only fair. He proposes to insist upon a 3 per cent. interest being paid on these instalments, which has never hitherto been done. The right hon. Gentleman goes further, and adds the Probate Duty which real property has never hitherto paid. I will not go into the details or merits of these questions now. What I would say is: The right hon. Gentleman intends as he says—and I believe he intends it—to tax real and personal property equally to the Death Duties, and he proposes to tax them both to this new Estate Duty on their fair market value. Now, it is very easy, as a rule, to ascertain the fair market value of personal property, for the prices of railway shares, bank shares, brewery shares, and so on are quoted, but when we come to land it is a different matter. The right hon. Gentleman followed the common practice of the House when generalising with regard to land. He said that freehold property was constantly increasing in value, but whilst that may be the case in the towns and the neighbourhood of towns, in many parts of the rural districts the value of land has greatly depreciated. Now, what is the basis on which the right hon. Gentleman proposes to estimate this new Death Duty? He proposes to estimate it on the fair market value of the property. How are you to find out the fair market value of agricultural land? I know estate after estate in the South of England which have no present market value at all, and which are unsaleable.

They will pay nothing.

Will the right hon. Gentleman put a clause into his Bill to provide that under such circumstances they shall pay nothing. I wish it had been possible for the right hon. Gentleman to put before the Committee the precise proposals he intends to make. I do not blame him for not doing it. He says the proposals will be embodied in the Bill, but we shall have to discuss these matters before we come to the Bill. We shall have to discuss them on the Resolution, and I would suggest to the Government that in common fairness to their proposals we ought to have placed before us in the shape of a Paper that could be laid on the Table of the House the precise proposals they intend to embody in the Bill, the effect of these proposals, and the way in which they will be interpreted by the officers of the Inland Revenue in calculating the fair market value. I would go further. Assuming that the market value in regard to estates such as I have suggested is calculated on a really fair basis, that basis will be that they are unsaleable, and that at the present moment the outgoings practically come up to the receipts from the properties. I am speaking of what I know, and many hon. Members on this side can confirm what I say. What is the value of the succession to such a property as that? Under the present law with regard to Succession Duty you have a system under which all the necessary outgoings are deducted before you arrive at the net annual rental, and then the net annual rental is capitalised in order to arrive at the capital value. Does the right hon. Gentleman propose any system of the kind in connection with the new Estate Duty, which will be of a very large amount in some cases? I do not think we have had any statement from him on that matter at the present moment. In calculating the value, is any allowance to be made for all these necessary outgoings? There is something more than this. I do not quite understand whether in calculating this new duty the real estate is to be subject to the Succession Duty as well as to the new Estate Duty. I gathered from the Solicitor General that in cases of lineal descent the new Estate Duty will cover the Succession Duty, but where estates do not descend lineally Succession Duty will be exacted plus the Estate Duty. That will impose an enormous additional burden upon estates of the kind I allude to. It is no sufficient answer to say that these estates will only be calculated on their fair marketable value. When you have property in the country reduced to such a point as I have described any additional burden is infinitely more killing than it is on property of larger value. It will simply ruin the holders of that property. Why has not the right hon. Gentleman attempted to deal with some of the grosser anomalies connected with the Death Duties? Legacy Duty, for example, is a matter of domicile; a person domiciled abroad does not pay Legacy Duty on personalty in England. A foreigner may be left Consols, railway shares, and other personal property in this country, and not one penny of Legacy Duty will he have to pay, but an Englishman domiciled here has to pay Legacy Duty on personal property not only in this country, but very often abroad as well. Not only has he to pay the duty here, but often he is also made to pay where the property is situated. If the right hon. Gentleman wants to deal with the Death Duties let him set that anomaly right, because I cannot conceive anything more grossly unfair to the Englishman as against the foreigner. Let me give another instance. There is what is called the cumulative Legacy Duty, when a property left for life to three persons in succession, and finally to a fourth, has to pay the duty four times, though it may pass direct from the first holder to the last, not coming into the hands of the second and third at all. Will the right hon. Gentleman remedy these injustices? I cannot suppose that he intends to continue such an unfair system in regard to his new Estate Duty. I regret to have detained the Committee so long, but I was anxious to say a few words on this important subject, and while I thank the Chancellor of the Exchequer for the boon he has conferred upon possessors of real property by the alteration under Schedule A of the Income Tax, I must say that the right hon. Gentleman has made too much of that boon if he puts against it the enormous increase with regard to the Death Duties. In my opinion, that increase of the Death Duties ought not to be made. In the circumstances of the moment it will be grossly unfair upon the owners of agricultural land. Let the right hon. Gentleman, if he thinks right, invent means of taxing the increased value of landed property in the neighbourhood of towns. In an endeavour of that kind I will support the right hon. Gentleman as readily as anyone, because I think it would be fair. I know there is a great deal of the value of land in towns which at present escapes taxation of every sort, and I think if it be possible—I know it would be administratively very difficult—it would be desirable to remedy that injustice. But I do protest strenuously against the imposition of fresh burdens upon the agricultural interest, burdens which will be felt not only by the landowner, but also by the farmer and the labourer. I say Her Majesty's Government have no right to impose it upon them.

said, the Chancellor of the Exchequer had congratulated the Committee upon his having paid off £3,000,000 of Floating Debt. Well, no one was more opposed to a large Floating Debt than he (Mr. Hoare) was, but before they congratulated themselves upon having paid off £3,000,000 it would be advisable to inquire how he had done it.

I transferred it to the National Debt Commissioners.

said, that was exactly his point. The right hon. Gentleman had transferred it to the National Debt Commissioners. He had paid off money borrowed for a year at 1¾ per cent., and he had taken it from the Commissioners at three days' notice at 2½. This was a proceeding which was neither lucrative nor safe. If the right hon. Gentleman had to borrow money above the market rate at three days' notice he ought to make some provision for paying it off.

I think the Chancellor of the Exchequer ought to have as little as possible to do with the Money Market. I know it has been a tradition that he ought to go there with a view of getting money a little cheaper than he can get it from the National Debt Commissioners. I constantly see articles saying that the Chancellor of the Exchequer ought to support the Money Market, and that he ought or ought not to pay off Treasury bills. I hold that the Chancellor of the Exchequer ought to have nothing at all to do with the Money Market; it is not his business either to support or to depress the market; it is his business to look to the finances of the country. In my opinion, the existence of a large floating debt, in connection with which the Chancellor of the Exchequer goes into the market, is not a good system. I do not wish to abolish Treasury bills altogether; they may be useful, and I like to keep a small quantity of them; but as regards a Floating Debt generally, an Unfunded Debt, it is an evil which ought to be got rid of. Two years ago it was £36,000,000; to-day it is £11,000,000. I do not consider it the business of the Chancellor of the Exchequer to go into the market; he ought as far as possible to be independent of the market; and the market ought not to look to him for any action which should affect their proceedings. The Chancellor of the Exchequer holds a political and statesmanlike position, and ought not to be an agent or operator in the Money Market at all.

said, he wished to emphasise the suggestion that the Chancellor of the Exchequer should issue a Paper showing the intentions of the Government with regard to property valuation, and would further suggest that he should issue rules to guide valuators in ascertaining the true value of property. It was absolutely impossible at this time of day to say what property was really worth. He ventured to remind the right hon. Gentleman that a valuation roll or a rent roll was often no indication of value, as the expenses of keeping up an estate varied from 12 to 20 per cent. of the nominal income. He thought, therefore, that some guidance should be given to the valuer; otherwise the owners of some mortgaged estates would have absolutely to pay more in Death Duties than the property was actually worth.

I would appeal to the Committee to allow the Resolutions to be taken at once, in order that the rest of the evening may be devoted to the Mutiny Bill.

Will the right hon. Gentleman say whether he will circulate a statement explaining in detail his proposals affecting the Death Duties?

I will consider the suggestion, and let the right hon. Gentleman know subsequently.

On what day will the discussion on the Resolutions be resumed?

wished to say that he entirely agreed with the Chancellor of the Exchequer that he ought to be independent of the Money Market, but, being a creditor for £126,000,000 at three days' notice, the right hon. Gentleman could not be independent of the Money Market unless he made provision for paying it off.

I propose to take the discussion on the Resolutions one day next week; I cannot say which at present.

I would remind the right hon. Gentleman that when Mr. Childers proposed a much smaller alteration in the Death Duties in 1885 he circulated a statement on the subject. The right hon. Gentleman made this evening as full and complete a statement as could be made, but there are innumerable points which it was absolutely impossible to include, and therefore, before the present discussion is resumed, it is highly important that a similar statement to that issued in 1885 should be in the hands of Members.

All the proposals of the Government on the subject will be found in our Bill, and any statement short of the Bill will be incomplete. But so far as we can lay a statement on the Table we will do so.

The right hon. Gentleman said that the discussion would be resumed some day next week. Surely the right hon. Gentleman will desire that there shall be adequate time given to adequately consider the enormous interests involved.

Question put, and agreed to.

Tea.

1. Resolved, That the Duties of Customs now chargeable upon tea shall continue to be levied and charged on and after the first day of August, one thousand eight hundred and ninety four, until the first day of August, one thousand eight hundred and ninety-five, on the importation thereof into Great Britain or Ireland (that is to say):

Tea . . the pound . Four Pence.— ( The Chancellor of the Exchequer. )

Customs Duty on Beer.

2. Resolved, That in lieu of the Duty of Customs now payable on Beer of the descriptions called or similar to Mum, Spruce, Black Beer, or Berlin White Beer, there shall be charged and paid the Duties following (that is to say):—

And so in proportion for any difference in gravity. — ( The Chancellor of the Exchequer. )

Excise Duty on Beer.

3. Resolved, That in addition to the Duty of Excise now payable in respect of Beer brewed in the United Kingdom there shall be charged and paid—

For every thirty-six gallons of worts of a specific gravity of one thousand and fifty-five degrees the Duty of Six Pence,

And so in proportion for any difference in quantity or gravity.—( The Chancellor of the Exchequer. )

Customs Duty on Spirits.

4. Resolved, That, in addition to the Duties of Customs now payable on Spirits, there shall be charged and paid the Duties following (that is to say):—

And the Duties of Customs on the articles hereinafter mentioned, being articles of which Spirits are a part or ingredient, shall be proportionately increased, and shall be as follows:—

—( The Chancellor of the Exchequer )

Excise Duty on Spirits.

5. Resolved, That in addition to the Duty of Excise now payable for every gallon computed at proof of Spirits distilled in the United Kingdom there shall be charged and paid the Duty of Six Pence, and so in proportion for any less quantity.—( The Chancellor of the Exchequer. )

Resolutions to be reported To-morrow; Committee to sit again upon Wednesday.

"Subject to the appointment of a Judge Advocate General responsible to Parliament."

The object of the Amendment was to secure the appointment of a Judge Advocate General, who should be responsible to Parliament, and whose duty it should be to go carefully through all the proceedings of Courts Martial held under the Bill. The powers over soldiers given by the Bill were very extensive; and it was most necessary that there should be a Judge Advocate General, sitting in Parliament, to see that these powers were not abused. Hitherto the Government of the day had appointed as Judge Advocate General one of their own Ministers, who sat in the House, who was responsible to Parliament, and in whose responsibility all the Members of the Government had shared. But they had entirely changed that system. They had no longer got a Judge Advocate General who sat in Parliament and was responsible to Parliament. At present the office was held by Sir F. Jeune, one of the Judges of the Court of Probate, who was appointed by the Crown, whose salary was paid out of the Consolidated

Amendment proposed, in page 2, line 23, after the word "shall" to insert the words "subject to the appointment of a Judge Advocate General."—( Mr. Hanbury. )

Question proposed, "That those words be there inserted."

I must complain that this Amendment has been sprung without notice upon the Committee, and that, though opportunity has been afforded by frequent adjournments of the Bill, it has not been placed by the hon. Member on the Paper. But I am perfectly prepared to give the hon. Gentleman an answer. The hon. Gentleman desires that there should be a Judge Advocate General present in this House and responsible to this House. The first condition attaching to the presence of a Judge Advocate General in the House of Commons, and responsible to it, is that he should be a paid officer. I am no believer in the responsibility of an officer to Parliament who is not paid for the duties he has to discharge, and I should have no great confidence in the ability of the kind of Judge Advocate General who would be likely to take the office in the circumstances of receiving no pay. If, however, my memory does not deceive me, the hon. Member was, if not the head of the pack, at all events a somewhat noisy member of the pack, who ran down the unfortunate Judge Advocate General as an appointment. [Mr. HANBURY dissented.] I may be mistaken as to the hon. Member, but certainly year after year the House was told by certain active Members that the office of Judge Advocate General was a sinecure. The appointment was examined into by the Army Estimates Committee, and the conclusion which was come to, and which I think was pressed on the Treasury by that Committee, was that there should be no payment of the £1,000 a year which was then given to the Judge Advocate General. Speaking candidly, for myself, I have never taken that view personally. I have always maintained that there ought to be a Judge Advocate General, who ought to be adequately paid, not on account of the actual amount of work performed in the course of a week or a year, but because it is desirable to secure for the office a competent person and a lawyer of authority. I would remind the Committee that Sir William Marriott undertook the duties of the office for nothing, and so great had been the zeal of that gentleman that the whole of the allowances available for fees had been absorbed within the first two or three months of the year, leaving nothing for his successors. Taking into account, therefore, the fact that the Committee have adopted a view against the Office, and that the Treasury are unwilling to sanction a sufficient salary for the post, I did the best I could by asking Sir Francis Jeune to undertake the duties connected with the Office, while at present there is in the Office of the Deputy Judge Advocate General Mr. O'Dowd, who is acquainted with all the duties. I cannot imagine that, short of having a paid official of high standing and authority in the House, the position would be bettered. As I said, I have always expressed my personal opinion in favour of such an official, but I do not think it would be easy to induce the House of Commons to reverse the decision which was given formerly, and therefore I am disposed at present to leave the matter as it now stands.

^* said, the right hon. Gentleman had conclusively proved that there ought to be a Judge Advocate General, and yet he was going to oppose the appointment. What were the reasons which the right hon. Gentleman gave against the appointment? First of all, there was a difficulty about the salary. The Army Estimates Committee had recommended that there should be a Judge Advocate General, but that instead of being paid by salary he should be paid by fees, and the right hon. Gentleman sheltered himself behind that decision. Then the right hon. Gentleman said that there was an able Assistant Judge Advocate General in the person of Mr. O'Dowd. If that were so—and he fully agreed with the right hon. Gentleman—Mr. O'Dowd ought to be made Judge Advocate General, in order that he might have a proper standing to enable him to deal with the Courts Martial. This was a most important matter, which affected 250,000 of Her Majesty's subjects, who were necessarily deprived of their civil rights, who had no recourse to the Courts and no protector except a Judge Advocate General, whom the Government would not appoint in such a way as that he would be responsible to the House. His belief was that everybody who had any knowledge of this office was fully alive to the necessity of it, and there was no one more so than the Secretary of State for War, though the right hon. Gentleman asked the House not to agree to the appointment.

Question put, and negatived.

every year, and which affected the liberties of so many of Her Majesty's subjects, was a controversial measure, and it became especially so when the Government introduced into it important Amendments affecting the question of the punishment of soldiers. If the commencement of the operation of the measure were postponed for a month or so then Ministers would not be driven to rush it through at these unusual hours, when it was impossible that the interests of the soldiers, which were so vitally affected by this Bill, could be properly considered. They had no right to assume it was a Bill to be hurried through in this way. The questions of the flogging of native troops in India, the imprisonment of soldiers for military offences in civil prisons, and the right of soldiers to have the evidence against them taken on oath, were all matters which ought to be fully discussed, but which, owing to the early date at which the Bill had to pass into law, it was impossible for them adequately to discuss. These were the main reasons for his proposing the present Amendment.

Amendment proposed, in page 2, line 28, to leave out the word "April," and insert the word "May."—( Mr. Hanbury. )

Question proposed, "That the word ' April ' stand part of the Clause."

vide for a disciplinary power over the Army; and, in the second place, to afford the Executive Government an opportunity of making any comparatively small amendments as to their experience proved to be necessary in the administration of the law. The hon. Member said that this was a controversial measure, and that a good deal of time was required to discuss it. Would the Committee believe that although the hon. Member was a Member of this House through the whole of the last Parliament, this Bill never occupied any time in the discussions, year after year, during the whole of that time? He would not say absolutely that there never was a single word uttered about it, because on one occasion the late Sir John Pope Hennessey did raise some question connected with the Marines; but if he said that in the course of the last Parliament there were only from 10 to 20 sentences uttered in the House on the subject of military discipline and law he should be well within the mark. But during this Parliament things had changed, and this being a Bill which it was necessary the Government should get through in order to maintain discipline in the Army, the hon. Member and his hon. Friend near him (Mr. Gibson Bowles) seized this as a glorious opportunity for occupying a little of the time of the Government. The hon. Member had protested against any sudden action in the matter, in order that opportunity should be afforded for Amendments to be put down. What was the result? Half-a-dozen Amendments coming from the hon. Member and his hon. Friend.

said, there was an Amendment down from the right hon. Gentleman's side of the House.

said, yes, it was a fortunate circumstance, and just sufficient to break the monotony that a single Amendment had been put down from the Ministerial side, béaring upon a matter not concerned at all with the discipline of the Army. The point the hon. Member now raised was that, in order to give opportunity for the fullest discussion of the whole system of military discipline and law every year—a thing certainly not conducive to the best interests of the Army —that the Bill should be postponed coming into operation till the end of May. Up to 1879 there were a good many dates in the different countries over which the British Army was scattered, but these different dates were ultimately simplified, and those now in the Bill were adopted. For his part, he failed to see any reason why they should be changed. If the date for bringing the measure into operation were postponed, as the hon. Member desired, it was likely that in some distant parts of the Empire there would be a danger of a period interposing itself when it would be doubtful whether the last or the new Act prevailed. It should be borne in mind that some little time must elapse before the Bill could arrive in India and other possessions far away. In his opinion, there was no reason why more time should be afforded for the discussion of the measure.

desired to say a word in reference to what had fallen from the Secretary for War as regarded the proceedings on the Army (Annual) Act in this and the last as compared with previous Sessions. The secret of the Bill having been so little discussed during the last Parliament was that no changes of any importance were introduced into it by the Executive. Last year, not only were several important changes introduced, but he thought the right hon. Gentleman himself could hardly have appreciated their importance before he came down to defend them in Committee. The result was that they were kept up all night and many points still remained unexplained, whilst, if he recollected aright, the House of Lords put in one important Amendment which was accepted by the Government. It could not, therefore, be said that the efforts of his hon. Friends behind him on that occasion were futile. In consequence of the discussions the Army Act had been reprinted, and at the time to which he referred it was such a mass of Amendments that neither the Secretary for War nor his legal advisers were able to find the points on which they based their defence.

said, the right hon. Gentleman had alluded to the fact that Sir John Pope Hennessey had raised a matter under the Army (Annual) Act. He remembered the instance to which the right hon. Gentleman alluded, and a very important question was raised then, and a pledge was given to comply with the point raised. That pledge the Government had not yet carried out. These same pledges had been repeated to him within the present Parliament—

The hon. Member is not speaking to the Amendment.

said, he was merely referring to the example quoted by the Secretary for War, because he wished to have some explanation on the point. What he wished to know was, whether hon. Members had a right to discuss important points on this Bill, or whether it was out of Order to do so?

The hon. Gentleman is not speaking to the Amendment, which is to leave out "April" and insert "May."

did not desire to support the Amendment, but he should like to know whether the remarks made by the Secretary for War were to be a guide to him in this matter or not? He did not desire to prolong the Debate, but he should be glad to know if he should be going outside the limits of the Debate if he were to dwell upon an important point raised by the reference of the right hon. Gentleman, because unless they discussed it now no opportunity would arise hereafter. If he was out of Order in discussing what had been said he would wait until some other Amendment came on upon which it would be in Order to make the observations he intended to make.

observed that, in his opinion, it was not very important whether the date was fixed for the 30th April or 30th of May. He did not altogether follow the strictures passed on hon. Members that even- ing by the Secretary of State for War, and for his part he reserved his right to ask a few questions when this Amendment was got rid of.

Question put, and agreed to.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

said, he desired to ask the right hon. Gentleman a question arising on Sub-section ( c ) of this same clause. The point was one that had often been brought to his notice by many officers who had had long service in India, and referred to the length of the sentences that were passed on the troops serving in India. These were generally similar in length to those passed on the troops in England, which was unjust, because he was told that one month's imprisonment in India was practically an equivalent punishment to a sentence of six months in this country on account of the different character of the prisons, the heat and climate, and considerations of that kind. He was informed that the condition of some of the Indian prisons was such that British troops ought not to be imprisoned in them under any circumstances. Imprisonment in Indian gaols was a very serious matter, and twice or three times as severe as the punishment of imprisonment in English gaols. He had evidence before him that the rate of mortality in Indian prisons ranged from 75 to 150 per 1,000, and he certainly did not think that English soldiers should be subject to imprisonment in gaols in which so high a death-rate prevailed—a death-rate unheard of in English prisons. He believed that Indian prisons were not fit to be occupied by Europeans; the water and the sanitary arrangements were both bad, and the warders were too often criminals themselves. He did not want to press his Amendment unnecessarily, but he thought his argument was sufficient to convince the Committee that sentences of imprisonment in Indian gaols should not be on the same scale as the sentences to English prisons, and he hoped the Secretary for War would undertake to look into the matter.

The Amendment is not strictly regular, because it would have the effect, if passed, of removing the Indian Army from the operation of the Army (Annual) Act, and leaving it outside the Discipline Act—a very undesirable result. But he would undertake to make inquiry into the points raised by the hon. Member. He was surrounded by officers who had a most thorough knowledge of India, and he had no doubt that they were as well informed on the subject as the correspondent of the hon. Gentleman. He would make a point of asking them whether anything could be done in this matter.

said, he agreed that it did not matter whether the main Act was passed in 1881 or at any other date, because he held that whenever passed it was open to reform if opportunity should offer. Years ago private soldiers were treated worse than horses, but now things were different. Last year undoubtedly the consideration of this Army (Annual) Bill was hurried, because it was thought desirable to get through the business before Good Friday. He had one question to put to the Secretary of State for War, and that was how it was that hon. Members were unable to see a copy of this Act of Parliament. He had applied in the Library and had been unable to get a copy. All he had been shown was the Bill passed in 1881, and it certainly was unreasonable for any hon. Member to be expected to find out for himself all the amendments which had been made to the Bill since 1881. This further he wanted to know, whether soldiers received a copy of the Army Act. [ A laugh. ] It was all very well for hon. Members to laugh when he suggested that soldiers should have a copy; but they ought to remember that by this Act they were taking away the civil liberties, and in many cases the lives, of 250,000 of our fellow-citizens, and it was the duty of hon. Members to protect the interests of those citizens, and to see that they were treated in as decent and respectable a manner as a human being ought to be. The Secretary for War had complained that only two or three hon. Members had put down Amendments to this Bill, but the explanation of that fact was to be found in the difficulty of getting copies of the measure. He hoped the right hon. Member would vouchsafe him an answer to these questions, because not only him- self but many other hon. Members desired to study these matters in order to do justice to all classes of Her Majesty's subjects.

said, when he was in the Army the practice was for the officer commanding a company to read out sections of the Act every Saturday afternoon, thus enabling the men to understand its provisions. He thought this was a most excellent practice, and he would like to ask if copies were still sent to regiments to enable the officers to do this?

said, that considerable amendment was made in the Act last year, and in consequence of that he gave orders that it should be reprinted at once. But the Statute Law Revision Committee and the Stationery Office both declined to consent to put their imprimatur on the Act, if then printed, because it might be further amended that year. As a matter of fact, it was further amended later in the Session. There was consequently considerable delay in bringing out the Act, but he gave directions immediately it was printed that a number of copies should be sent to the Library of the House of Commons, and the Act was also circulated to every regiment in the Service, so that there was no difficulty in the way of commanding officers making the men acquainted with its provisions.

said, he could not concur with the hon. Member for Preston in his complaint as to the condition of the Indian prisons. He served several years in India, both in the Bombay and Bengal Presidencies, and he could only say that the cells in which the soldiers were confined were large, roomy and airy. He thought that the Indian Government were most careful of the healths of the prisoners, at any rate during the period of his service in India, and he never heard a soldier make a single complaint either as to the cell in which he was confined or as to his treatment. The warders in most cases were garrison-warders.

said, no doubt the hon. and gallant Gentleman was speaking from his own experience, but he did not think that that experience was very recent. He must be aware, if he had studied the Army Act with regard to the committal of prisoners, that it was possible to commit military prisoners to civil prisons. He was not complaining of the military prisons in any way, for both in India and in England they were very conveniently arranged, but he was complaining of the committal to civil prisons in India of prisoners for military offences, because these Indian civil prisons were exactly of the description he had given.

said that, in regard to the prisons in which soldiers were confined, they were of two kinds. First, there were the cells to which his hon. and gallant Friend had alluded, and which were attached to most barracks. They, of course, were everything that was desirable. His hon. Friend the Member for Preston had, however, alluded to the civil prisons, which were certainly not suited for the incarceration of Europeans. They were all very well for the natives, but they certainly could not be considered to be desirable places for Europeans. He would suggest that, if it were necessary to commit military prisoners to these Indian civil prisons, special rooms should be set apart for them. It was not so much a matter of insanitation as it was the disadvantageous and depressing influence of the Indian climate on Europeans that had to be considered.

said, that he had had some experience of Indian gaols, and he had frequently asked European prisoners incarcerated in them if they had any complaint. The chief complaint he had received was that of the sameness of the food, and that was a very trifling matter. He did not think there was any ground of complaint on the score of work. Europeans were only put to tasks which the weakest natives could undertake, and it was a perfect farce to call it hard labour.

complained that the Secretary for War had given no reply to his questions as to whether the private soldiers were allowed to have a copy.

said, he thought he had answered that question when he stated that he directed a copy to be sent to every regiment. He understood that when the Act reached the commanding officers there were ample means in the power of every private to see it.

^* asked if it was not the fact that the last copy which was printed only came into the possession of the regiments just at the time it was about to expire. Was that an exceptional circumstance?

said, it was an exceptional circumstance, as the Session lasted the whole year through, and he had already explained that it was impossible to get it printed until the close of the Session.

said, the right hon. Gentleman had told them he directed copies of the Act to be sent to the Library, but would he direct that every Member of the House should receive a copy?

said, he had no power to interfere with the Government arrangements for the distribution of Parliamentary Papers.

said, he thought his demand that every Member of the House should have a copy was only a fair one.

thought it was more important to secure that soldiers were made acquainted with the provisions of the Act, which contained something like 190 clauses. The point was whether the mere reading out on parade was sufficient. It was too much to call on a private soldier to pay 1s. 6d. for a copy of the Act, and therefore steps should be taken to see that every soldier had a right of access to it, either in the Regimental Library or in the canteens. Every soldier ought to know under what law he served.

said, he had had reprinted the Act as amended down to the end of last Session, and had had it circulated throughout the Service. He did not think it was at all necessary to send a copy to every Member of the House, but he would see that the hon. Member had one.

That is not quite good enough for me—

^* : Order, order! A certain amount of latitude has been necessarily allowed to the hon. Member because this clause applies the Army Act, but he is not entitled to pursue the subject any further.

said, he noticed that Sub-section 3 fixed the number of the regular forces "exclusive of the Marine force." Why were the figures set out in one case and not in the other? Was there no limit to the Marine force that might be employed in the United Kingdom? Practically that constituted part of the Standing Army; the men served on land and came under the Army Discipline Act, and he would like to know the reason for the distinction thus made?

Apparently the number is not stated in the Act, but, of course, the Vote of Parliament controls it.

Why is it not stated?

I cannot tell.

Question put, and agreed to.

Clause 3.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

^* said, this clause provided that certain prices for billeting mentioned in the Schedule of the Army Act, 1881, should be paid to licensed victuallers. These prices referred to the allowances for both horses and men, and were fixed from time to time by Parliament, while with regard to horses and vehicles impressed for military service, power was given to the Justices of the Peace to increase the amount fixed in the Schedule by not more than one-third, should that be deemed to be just. Now in places near to military centres, from and towards which the troops were constantly moving, the publicans were in these days, when the prices of forage were high, put to considerable expense, and the tax placed upon them was heavier than Parliament ever intended. He happened to be a member of a deputation from various parts of England, which waited on the Secretary for War to point out the hard- ship thus inflicted, and he now ventured to move the omission of the clause, in order to give the right hon. Gentleman an opportunity of saying what he was prepared to do in this matter. It could not be suggested that 1½d. left much of a margin of profit on a breakfast for a. healthy soldier; while as to the horses, it often occurred that an innkeeper who had no stables of his own lost from 10d. to 1s. a night each horse by having to put it out at livery. Could not something be done to increase the Schedule prices in these cases?

I think I satisfied, or at least endeavoured to satisfy, the deputation, when they came to see me at the War Office, that there was no such injustice in these prices as they seemed to think. I have looked carefully into the matter, and having gone over a large number of years I find that, taking the variations which there have been in the prices within these years, the charges allowed for billets have been fairly justified. It must be remembered, with regard to the charge of 1½d. for breakfast, that that is an allowance for breakfast which took the place of an allowance of nothing at all for breakfast. It should also be remembered by the Committee that we do not pretend to give the soldier a breakfast. This sum of l½d. furnishes him merely with the basis or rudiments of a breakfast, say a piece of bread and a cup of tea, upon which he may build up a breakfast out of his own resources. It was almost a work of supererogation to have granted it at all, and in any case it must not be taken as meaning the full value of the full breakfast of a healthy, hungry soldier. There is, no doubt, a considerable amount of hardship inflicted because of the unequal distribution of billets. In the districts where there are frequent movements of great bodies of troops there is an unusual amount of billeting imposed upon the publicans. I am not sure that that is very much to complain of. I remember my predecessor, speaking in the House upon this matter, said the only complaint he had received was from a man whose grievance it was that troops were not billeted upon him oftener. I am endeavouring, however, with the help of military advice, to find some plan by which extreme cases can be modified—whether we can in some places in the districts where the movements of troops are frequent acquire ground in the immediate neighbourhood where the marches take place in the summer for camps of rest. I hope we shall be able to do that. No one can be more interested in the matter or be more capable of bringing it to a reasonable and successful conclusion than my gallant Friend Sir Evelyn Wood, in whose province, as Quartermaster General, this matter lies. There is one point to which my hon. Friend alluded—namely, the price of forage. Undoubtedly this last year the prices of forage ran very high, but looking back over several years and taking the average for 10 years I find that the average price per ration of forage is 1s. 9d. The average at which we have been able to provide that same ration of forage during the last 10 years is 1s. 2½d. I think the Committee must see that there is a margin here which would, at all events, protect the publican's pocket from loss. It must always be remembered—and I want to lay this down very positively—that this duty of billeting is laid upon those who bear the burden by the conditions of their licence. And let me say also that it is nothing like the burden it was 20 or 30 years ago, when movements of troops by road were very much more general than they are now.

said, he was very glad the right hon. Gentleman proposed to take some steps for the assistance of those places wherein troops were being constantly billeted. With regard to the forage question, the right hon. Gentleman had pointed out the distinction in the price of forage as paid to publicans and as bought for the Army, but he did not mention that the publican had often to pay for the hire of stables out of his allowance for forage. They had often to pay 6d. or 9d. out of the money allowed for stabling accommodation. If the right hon. Gentleman would carry out these proposals, great satisfaction would be given to the locality he (Mr. Brodrick) represented. He must remind the right hon. Gentleman that he was hardly correct in saying that taking a period of years the amount allowed for soldiers' food was sufficient, because a few years ago it was found necessary, not only to add l½d.for breakfast, but the whole amount was raised from 1s. 4d. to 1s. 9d. The soldier could not obtain things at a public-house at the same price as he could at his own canteen.

said, he had felt very strongly upon this matter for a long time, and a number of licensed victuallers felt strongly upon it also. Because it was an ancient injustice it did not become more tolerable because of its antiquity. He said it was the duty of the War Office to look into this matter fairly. To his mind, it was a monstrous injustice to ask a licensed victualler to put up a man and to lose money upon it. A soldier was allowed 4d. for his bed, which was the price that a tramp paid at a common lodging-house. As to the sum allowed for a soldier's food, it was nothing more or less than confiscation of the licensed victualler's property. It seemed to him that the authorities in fixing this unjust responsibility on licensed victuallers knew that they could not pay themselves, and that they had to look to be recouped out of the amount that the men spent in drink. This proceeding on the part of a party of temperance was a monstrous contradiction of the principles they professed. The whole matter wanted looking into in a businesslike manner. He could never see any reason why soldiers should be billeted on licensed victuallers. The practice fell unjustly and inequitably upon places mostly in the South of England. He held very strongly that the licensed victuallers ought not be called upon to pay money out of pocket to accommodate the defenders of the country. If any men engaged in the Public Service had to be moved from one part of the country to another the State ought to pay the cost. He was at a loss to understand why ancient authorities put this burden on the licensed victuallers. He could never see any connection between beds and beer, unless it was supposed that the men must first get drunk in the public-houses and then go to bed. It would be better for the morale of the soldier, and of the publican, too, if the practice were abolished. He was radical enough to wish for reform, but the proceeding of the right hon. Gentleman the Secretary for War was conservative in maintaining this monstrous anomaly because it was ancient.

said, he could not help thinking that the explanation which had been given of the charge for breakfast accentuated the injustice of the thing. The right hon. Gentleman the Secretary for War said that l½d. was the price of the rudiments of a breakfast. They placed the innkeeper under a statutory obligation to provide a breakfast.

No—to provide so much breakfast as that will pay for.

said, it was admitted that that was not the price of a breakfast, but a mere gratuity. It was grossly unjust, and he ventured to say that thing would be easily remedied by letting the soldier have his allowance as in barracks.

said, it was no satisfaction to the publicans to be told by the Secretary for War that the price paid for fodder averaged well. He should like to know whether the right hon. Gentleman expected the publicans to provide for officers at 1s. 9d.? He himself (the Secretary for War) allowed officers 2s. 1d. for the same amount of fodder on account of the increased cost.