moved an Amendment to reduce the rate of duty on estates between £500 and £1,000 value from £2 to 30s., the Amendment being the first of a series designed, he said, to ease off the heavy jumps which occurred, particularly at the bottom of the scale. A person whose life was insured for £500 was a comparatively poor person, and if a sum exceeding £500 were to pay so heavy a tax as £10 instead of 50s., life insurance would be discouraged and persons would be tempted to insure for lower amounts in order to avoid the heavy Estate Duty. The people who could leave a provision of no more than from £500 to £1,000 were the class who deserved consideration, certainly as com- pared with those who left from £1,000 to £10,000; and he therefore moved that the duty should be reduced from £2 to 30s. per cent.

Amendment proposed, in page 10, line 25, to leave out the words "two pounds," and insert the words "thirty shillings."—( Mr. Bartley .)

Question proposed, "That the words 'two pounds' stand part of the Clause."

said, it might be inferred from the hon. Member's speech that the Government were raising the duties, whereas they were reducing them on £1,000, and still more on £500. He should be glad if the Exchequer could dispense with any tax at all under £1,000, but it could not afford to do so. He had very carefully considered whether he could go further than he had done. He believed that people who could leave only £500 or under were the people who most deserved consideration, and that was the reason why only 1 per cent. was charged under £500 and 2 per cent. between £500 and £1,000—in both cases a very sensible reduction.

said, it must be remembered that the scale was effectively made much higher by bringing a much larger amount of property under duty; realty and settled personalty were both brought within the scope of Estate Duty.

There is not much aggregation under £1,000.

hoped there would be in future, because the tendency of legislation was to split up realty. This high duty would hit poor people and would discourage small holdings in land. These now escaped duty under probate, and for the first time would be taxed for Estate Duty.

^* felt obliged to take the Chancellor of the Exchequer under his protection as to this Amendment, which, in the interests of the Exchequer, was not one he could accept; but he would point out that there was already in the Bill a remarkable reduction on £1,000 to a stranger, who now paid £125, and under the Bill would pay £20, thus escaping £105 of taxes, while an English widow taking the same amount in foreign property would pay £20 more than at present.

Question put.

The Committee divided:—Ayes 169; Noes 104.—(Division List, No. 120.)

said, his further Amendments were on the same lines. If the Government would not give way it was no use to waste time.

On Motion of Sir W. HARCOURT, the following Amendment was agreed to:—Page 10, line 37, leave out from "per cent." to end of line 38.

said, he would move, after the word "over" in the Amendment, to insert the words, "ten pounds or."

Amendment proposed, after the word "over," to insert the words "ten pounds or."—( Mr. Gibson Bowles .)

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

said, he preferred the words as they stood.

Then, in the interest of accuracy, I shall divide upon it.

It seems to me that these words are necessary.

Rather than have a Division I will agree to the Amendment.

Question put, and agreed to.

Amendment, as amended, agreed to.

said, he desired to move to add to the clause the following:—

"Where by reason of another death a second Estate Duty shall become payable upon the same property within four years, it shall be levied and paid in respect of such property at one-half of the rate payable upon the principal value of the estate in which it is included."

It had been estimated that every estate on an average should fall in for Estate Duty once in 30 years. But there might be many cases in which the succession might be much quicker, and in which the burden of the duty would be so heavy as to materially diminish, if not destroy, the property altogether. A personal friend of his who took an interest in this subject had informed him a few days ago that in his own family not far back three successions had taken place within a space of 14 months. Though such a thing did not often occur, at any rate it was a matter which they should provide for. Take the case of quick succession between brothers or husband and wife, or persons of the same age—or a case where in an accident husband and wife or brothers perished practically at the same time, though, in the eyes of the law, wish an interval sufficient to give succession, should full Estate Duty be paid a second time? It was with a view of meeting cases of this kind, which he considered were cases of real hardship—though they would not often occur—that he had put down his Amendment, He would ask the Committee to bear in mind that the Amendment did not touch the principle of aggregation or graduation, and did not in any shape favour real property. He was quite certain that if the Amendment were not accepted in the cases he referred to, the duty would be paid with a sense of injustice, and hardship, and robbery.

Amendment proposed, in page 10, line 38, at the end of the Clause, to add the words—

"Where by reason of another death a second Estate Duty shall become payable upon the same property within four years, it shall be levied and paid in respect of such property at one-half of the rate payable upon the principal value of the estate in which it is included."—( Mr. Heywood Johnstone .)

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

said, he quite understood the feelings which had inspired this Amendment. He quite agreed that in some cases where the successions followed rapidly the imposition of the Estate Duty would constitute a considerable hardship. They must all know of such cases. The difficulty he had in providing against this was that so far he had been unable to get at what would be a fair average period to allow for successions taking place, and he considered that the fault of the Amendment was that it did not deal in a practical way with the case. It seemed to him that it proposed simply to deprive the Revenue of all that it wished the estate to gain, while at the same time it offered the Revenue no corresponding advantage to make up for what it was to lose. They might have intervals of 60 or 70 years between successions. The Revenue was obliged, like the individual, to take the rough with the smooth. Probably somewhere about 30 years would be a fair average to reckon that successions would occur, but at the same time there were many cases on record where an estate had hot changed hands for nearly twice that period. The Revenue in that case could not provide beforehand that an extra rate of duty should be paid, and therefore they should not be asked to accept less in those cases than the present Amendment wished to shield. While he was fully aware that there was much to be said in favour of the point raised by his hon. Friend, he regretted that he could not see his way to accept his Amendment because it would not, in his opinion, really meet the case.

said, the right hon. Gentleman admitted the hardship which in certain cases must arise, but he understood the right hon. Gentleman to say that he would not deal with it because of the difficulty which would occur in the case of good lives. He (Mr. Chaplin) admitted that, so far as good lives were concerned, they could not deal with the case because this was a measure providing for Death Duties, and even the right hon. Gentleman the Chancellor of the Exchequer did not propose bringing lives to a termination before their natural end. Nevertheless, the hardship complained of was so apparent that he hoped the right hon. Gentleman would see his way either to accept the Amendment or, at any rate, to provide some remedy to prevent the injustice that he admitted might in certain cases be done by the imposition of the tax. If the principle of the Amendment was sound—and, for his part, he thought it was—the proposal did not go quite far enough. He thought that the period of 30 years was not sufficiently long for an average. On the other hand, cases had been known where there had been three or even four successions to the same property within the period of half-a-dozen years. Suppose the property were worth £1,000,000, the rate of duty that would have to be paid would in some cases be as high as 18 per cent. So that, assuming there were three successions in six years, if the 18 per cent. were multiplied three times, nearly half the property would have been in that short time paid away.

They would be three strangers.

said, he did not care who they were. A tax that in six years could swallow up half a man's property was surely nothing more or less than confiscation. No doubt the case he had taken was an extreme one, but it only showed that a great hardship might arise, and therefore it was clearly the duty of the Committee to provide against it. He believed that the Committee were most willing to prevent the possibility of such an injustice, and it Would be prevented if the right hon. Gentleman would sanction the proposal. He hoped that the right hon. Gentleman would see his way to meet their wishes and would agree to allow a more liberal reduction even than that asked for by the hon. Member who had moved the Amendment.

said, he would remind the right hon. Gentleman opposite, who imputed to him (Sir W. Harcourt) the desire to take three 18 per cents. from an estate that under the present law three 14 per cents. were taken, that this was in the case of succession by strangers. He should have no objection himself to inherit property on the terms provided in the Bill. He considered that a man who was fortunate enough to inherit a million of money from a stranger should not mind having to pay the Exchequer handsomely for the right to enjoy it.

said, he hoped that the right hon. Gentleman would make a concession in this case. No doubt a fair average period of succession was the idea they would like to arrive at. There was no justice in the argument put forward by the Chancellor of the Exchequer that because the estate of the man who lived for many years paid too little, therefore they had a right to make the estate of the man who enjoyed the property only a few years pay too much. The effect of making these heavy charges on estates in cases where there was rapid succession would be to deprive the owners of estates of the power of doing their duty by their property. If three mem- bers of a family—one succeeding the other—perished in a railway or other accident, and the previous holder had died a short time before, they would have in the course of a few months or, it might be weeks, an enormous burden thrown on the property. The result would most likely be that for many years after the accident there would be a nonresident owner of the property, and all the evils that they knew to flow from absenteeism would ensue.

Does it not occur now?

said, that in connection with the Death Duties it would always be the case to some extent; but the complaint was that, owing to the enormous extent to which the duties were increased by the right hon. Gentleman the Chancellor of the Exchequer, it would be more difficult for owners who lived on their property to do their duty by their cottagers and tenants. The idea that it was a good system for owners to live upon their property was an idea with which the right hon. Gentleman himself would agree. It was only in extreme cases that the duty would be diminished under the Amendment. The answer to the Amendment seemed to be that justice must be done to the Exchequer. Well, what they wanted was that justice should be done to the individual and to the property, and that the Exchequer should stand in the second or third place.

said, he should like to point out how hardly the tax which would be imposed by the Bill might fall upon a family three or four brothers of which might happen to be serving Her Majesty in a campaign at the same time. He knew a case in which two or three brothers had served in the Crimea at the same time. It was possible that all those lives might have been lost within a short period of each other, and the result might have been disastrous to the family property. The right hon. Gentleman the Chancellor of the Exchequer was no doubt bound, in defiance of his natural feelings as custodian of the Public Purse, to stand by his original proposition. If the Exchequer would lose rather than gain by the proposed alteration, the fact would weigh with the right hon. Gentleman, but it could not be too distinctly im- pressed on the minds of hon. Gentlemen opposite, who did not understand these things themselves, that the direct result of this rapid transference of estates from one owner to another, coupled with piling up of burdens on property, was disastrous not only to the individuals who succeeded, but also to all the people connected with the property, and to all the residents and all the rural life of the district. If they were able to strike a balance between the national loss and national advantage regarding this subject, they would find that the national loss would be greater than the advantage from the heaping up of burdens on estates and that national benefit would be derived from the acceptance of a moderate proposal such as that now before the Committee. If in this matter they could find a crevice in the right hon. Gentleman's armour through which they could reach his sense and justice, and could induce him to make this concession, it would tend to the advancement of the right hon. Gentleman's own reputation both as a financier and as a sympathiser with national needs.

said, the Amendment dealt with the case in which the Estate Duty became payable for the second time on the same property within four years. If the average succession was at the end of 30 years, it was clear that when it occurred at the end of four years the Revenue got a windfall. All that the supporters of the Amendment asked was that the wind which brought the Chancellor of the Exchequer that windfall should be tempered to the shorn lamb who succeeded to the property. His hon. Friend was so moderate that he only proposed that the second Estate Duty should be levied at half the rate of the first. The Chancellor of the Exchequer met that by pleading for justice to the Revenue, but the right hon. Gentleman had a majority at his back and acted as judge in his own cause. The right hon. Gentleman was sure to have justice, but those he (Mr. Lawson) represented had only one vote for one constituency—or would only have one vote when certain reforms were carried out. Instances had been quoted in which, unless this section were amended in the manner proposed, or some such manner, the Estate Duty would swallow up the whole income of an estate. The noble Viscount had pointed out that in certain cases where three persons succeeded each other in rapid succession the Exchequer would get half the estate, but there would be cases in which the Exchequer would take the whole of the estate, at any rate, for eight years. For instance, he was told of a case the other day, within the personal knowledge of an hon. Member, in which in connection with a small property of £10,000 there were three successions in eight years. The father died and left the property to his illegitimate son. The son died and left it to his cousin in blood, who was, of course, a stranger in law. The second successor had to pay £365 a year out of a net income of £300. That was what was called in Roman law a damnosa hereditas . It was recognised that landed property only paid 3 per cent., which was putting it rather high.

Then you take the value of land at 33 years' purchase.

said, that more than 3 per cent. could not be got from landed property. He was making a liberal estimate when he mentioned 3 per cent. If three instalments of duty were running together there would be little or nothing left for the proprietor to live upon. Amongst lineals it was not easy to find cases where 3 per cent. would swallow up the whole property—except where a million of money was left. Between £100,000 and £150,000 the increment would be one-eighth of 6 per cent., and if three duties were running at a time the proprietor would have three-fourths per cent. left to live on. When you get amongst brothers you soon get a case in which the whole interest on the property is swallowed up by three sets of instalments running together. Between £1,000 and £10,000 the instalment would be one-eighth of 6 per cent., and if three of these were running together the proprietor would have three-fourths per cent. left to live on. Between £10,000 and £25,000 the instalments would be one-eighth of 7 per cent., or seven-eighths on the value of the property; and if three were running together it would mean twenty-one-eighths, which would leave three-eighths to the proprietor to live on. From £50,000 to £75,000 the instalments would be one-eighth of 8 per cent., or 1 per cent., and three instalments running together would absorb 3 per cent., or the whole value of the estate. He might add as following favourite propositions in Euclid "Q.E.D."

was much obliged to the hon. and learned Gentleman for favouring him from time to time with arithmetical acrostics, but he would point out that in the case to which the hon. Gentleman referred it appeared, to be assumed that all the instalments were always running together, but that could only be the case if all three persons died at the same instant of time—a thing which could never be considered as likely to happen. In the case of two persons dying at sea the presumption of Roman law was that the eldest would live the longest.

said, the right hon. Gentleman had referred to his acrostic, but had not attempted to give them the least solution of it. He had put the case if the three instalments overlapped. While the overlapping went on the proprietor of the estate would be practically dispossessed. He thought the Chancellor of the Exchequer ought to endeavour to avoid possible injustice.

^* said, the Chancellor of the Exchequer had not answered the case mentioned by the Leader of the Opposition a few nights ago, which was an absolute case. At this moment there were four instalments running upon that estate, which was of some £10,000 value. The succession devolved upon one of three old ladies in 1890. In April, 1893, that old lady died, who left it to another who died in August, 1893, and left it to a third who died on the 11th of April of the present year. If the charge upon each death were £75 the amount payable would be £300 on the whole income of the estate. Hon. Members would ask why the owners did not sell the property? As a matter of fact, they were willing to sell it for half its value, but could not get a bid for it. They were, therefore, bound to keep the property, and pay the rates, whilst under the present Bill they would be forced to pay the whole of the income of the property—namely, £300, to the Chancellor of the Exchequer. The right hon. Gentleman must see that the facts of this kind were sufficient to make out a primâ facie case for considering the Amendment. If the clause remained in its present form the result would be to substitute a gambling for a business transaction as far as the Exchequer was concerned, inasmuch as it was probable that what would be lost upon one estate would be gained upon another. It was obvious that people who saw that the whole of their income would go to the Exchequer would make provision to prevent this happening, and there would be unlimited evasion of the Bill. He would ask the Chancellor of the Exchequer whether, before the Report stage, he could not consider what would be the financial effect of the adoption of the Amendment? Surely it would be within the right hon. Gentleman's power, even if he did not accept the limit of four years, to agree to a limit which would not rob the Exchequer, but which would prevent the occurrences of the extremely hard cases that were likely to occur if the clause were passed in its present form.

said, he had heard of a case in which three old ladies, sisters, aged respectively 81, 83, and 90, died in one week. Under this clause such a case would be a very hard one, and he thought provision ought to be made to meet it.

said, this was really a very important question, and he should like to add his appeal to those which had been made to the Chancellor of the Exchequer. Several cases of very great hardship had been mentioned. The Chancellor of the Exchequer did not deny the hardship, but admitted it, and his only answer was to point out hardships which existed under the present law. No doubt hardships did exist under the present law; but when a Chancellor of the Exchequer took in hand the reform of the whole system of Death Duties, surely his object should be to remove hardships. Instead of removing hardships the right hon. Gentleman was increasing them. The right hon. Gentleman said that if an attempt were made to remove a particular class of hardship the result would be that the State would lose. He (Mr. Balfour) must point out to the right hon. Gentleman that there were occasions on which it was better that the State should lose than that individuals should lose. It was better that the estate should lose than that property should pay the Estate Duty three or four times over within a very short period. The Chancellor of the Exchequer said that, on the whole, he was doing rough justice. This reminded him of the story of a certain cynical Judge, who was reported to have said that rough justice was done by the Courts because, although it was perfectly true that a certain number of guilty persons were found not guilty a certain number of innocent people were convicted.

My hon. Friend says that we ought to consider this question from the point of view of the advantage of individuals rather than from that of the advantage of the State. But he must observe that in the case of rapid successions by death there are several individuals who profit, whereas if there is a long interval between successions there is only one who profits during that period. Those who succeed rapidly get more than they have a right to expect. They are made happy under circumstances which they had no right to look forward to. I think, therefore, my hon. Friend should accept the arrangement as one of the greatest happiness to the greatest number.

said, the reply to the extraordinary argument of the Chancellor of the Exchequer was that if a couple of deaths occurred within a very short period the successor who survived for only a short time could not be said to rejoice to any extent. In the case of real estate it would be the estate itself which would suffer.

No, no.

said, he was perfectly aware that the hon. Gentleman opposite (Mr. Brunner) always pooh-poohed that argument, but he did not think that the hon. Gentleman could have had much experience of real estate. He imagined that the greater part of the hon. Gentleman's property was in personalty. Those who were acquainted with estates in the country knew how great an evil it was if such an estate was so burdened that the proprietor was not able to do justice to it.

said, there were gentlemen on the Government side of the House who talked ometimes about real property, and one hon. Gentleman said the other night that he would support every line of the Bill because he did not happen to own a single acre. When statements of this kind were put forward he (Mr. Wingfield-Digby) thought that some words ought to be spoken to show the hardship that would fall upon others besides the actual successors to property unless some Amendment of this kind were adopted. All the agricultural labourers who were employed on the property and all the farmers who were connected with it would necessarily suffer. The tradesmen in small towns, the village carpenter and the small builder who got work to do in connection with improvements and repairs on the estate would also suffer.

^* said, that the cases dealt with in this Amendment would frequently occur, and in such cases an injurious effect would be produced upon the property. As the hon. Gentleman opposite (Mr. Wingfield-Digby) had pointed out, it was necessary to consider the interests of the locality. If there were two successors within a year who had to pay 7 per cent., a total of 14 per cent., the Estate Duty, with the Legacy Duty, would bring the payment up to, say 20 per cent. This payment by the Bill was spread over eight years, and would absorb the whole income. The practical result would be that during those years the State would be the beneficial owner and would obtain all the beneficial interest. He asked, was the State prepared to perform the duties of the landlord? Of course, hon. Members knew it was not. That being so, it was clear that unless some such Amendment as this were adopted great disadvantage would result to all the persons living on this property, and it was in their interest that he pressed the Chancellor of the Exchequer to grant some alleviation in such cases.

I am ever ready to meet arguments brought forward with reference to this taxation, as it directly affects individuals, but I must also say a word upon its indirect action, because not only in this House but out of it I hear an argument which I cannot give any assent to—namely, that particular classes of the community are to be exempted from taxation in a manner in which other classes are not exempted, in order that they may be generous and munificent. That is a view to which I will never assent. I am glad that people should be munificent and generous; that they should keep great houses and should open them to their neighbours; but I am not willing that such munificence and generosity should be founded upon the fact that the money used for the purpose is an exemption from taxation to which other people are liable.

^* : That argument has never been used outside this House nor in it. It has not been demanded that people should be exempt from taxation because they are munificent or generous. The demand put forward has been that the Chancellor of the Exchequer should consider the effect of the new taxation he seeks to impose. The custom of this country has been that persons who possess landed property do not spend all the proceeds of it upon themselves. They spend a portion upon the community around them. They spend a proportion of the money they receive in the employment of labour and the employment of tradesmen, and in a manner which does not affect the person who spends it so much as it does those who receive it. I know one estate with which I have had to deal officially where there is, of course, a non-resident owner—the Duchy of Cornwall. Even there, there are charges on that estate which have become as certain charges as if they were the indebtedness caused by mortgages—the endowing and repairing of churches and schools, and the maintenance of persons in the locality. The charges for these and other purposes have now become fixed charges on that estate, and they make a very substantial difference between the gross and the net income. Those who say that these are expenses incurred through generosity only must recollect that if you take away the means of meeting such expenditure you injure not so much the person who makes the payment as the person who receives it. If the Chancellor of the Exchequer says, "I am careless whether these payments are made or not, and I am going to cripple the person who has made them," he will injure not the person he is aiming at, but the person who has hitherto benefited by these payments. That is the argument which has been used in this House. The Chancellor of the Exchequer has misrepresented that argument, but he has never answered it. I think he ought to answer it. If he prevents these benefits being continued from what source are they to come? If they are discontinued will he tell the Committee who will suffer: will it be the person who does not continue them, or the persons who do not receive them? The Chancellor of the Exchequer twice in my hearing has said this is an attempt of a class to obtain exemption from taxation.

SO it is.

Let those who say "so it is," in a way that conveys no argument, meet us in fair argument. If by this taxation you take away the means of those who have spent money for the benefit of a community, where is the vast expenditure to come from? If they gave us some information upon that point, they would support the Chancellor of the Exchequer much better than by saying "so it is," which conveys no argument whatever. I would appeal to him to be good enough to say how the case that has been put to him is to be met?

I think I can answer my right hon. Friend by this illustration: A man keeps a certain number of horses; he employs a certain number of servants, a certain number of gardeners, and so forth; you might enable him to keep more servants and more horses, and more gardeners, if you relieved him from all taxation, and you may, by any taxation you put upon him, make it more difficult for him to keep so many horses, and so many servants, and so many gardeners. But if it does not apply to the Estate Duty only, why do you not relieve him from the Income Tax, or when you are increasing the duty say it shall not be increased upon them, because if you do they may keep half-a-dozen less horses, half a dozen less grooms, gardeners, and so forth. It is because of this very argument—that would go to the extent of relieving this particular class, because they employ, it is said, on their estates a certain number of people, and therefore should be furnished with the means of doing so by an exceptional proposal of taxation—that we cannot accept that principle.

^* : That is not the principle we have asked my right hon. Friend to accept; he has not met the point at all; I am not asking for ex- emption where money is being spent on the employment of horses or servants, or anything in the nature of personal luxury, but where money is spent upon subjects which are fixed charges of occupation. Take the case of open pleasure grounds—and I know of one that is visited by half a million of people free of charge during every year, but which grounds will have to be closed if this taxation is imposed. All this is a benefit to the public, and it is no answer of the Chancellor of the Exchequer to say you have so many servants, so many grooms, or so many horses. I said nothing about them, and the Chancellor of the Exchequer has entirely changed the issue by putting forward a case that is not suggested; he has not answered the case that has been put to him, and he seems to think when arguments are used outside this House it is fair to those who use them to change them to a new form of issue. I say that no answer has been given.

said, it was most extraordinary to him that the Chancellor of the Exchequer and some, if not all, of his supporters continually met their assertion by saying that they on their side of the House had asked for exemption from taxation. They were doing nothing of the kind, but in this instance they asked that where a particular tax under certain circumstances inflicted hardship and injustice that it might be modified. He trusted that even yet the Government might accept this reasonable Amendment proposed by his hon. Friend the Member for Sussex (Mr. Heywood Johnstone). If they were to go to a Division let there be no mistake as to what the issue was. If the right hon. Gentleman wished to inflict an additional blow upon an industry that was already very heavily burdened let him say so boldly. The effect of accepting this Amendment upon the Revenue would be very small, as it could not arise in a great number of cases; but it would not be small in the particular cases put forward by his hon. Friend, because it would not only affect the case of the estate, but all those who were dependent upon the estate, therefore to them it was a very great question, whilst to the Revenue it was very small. What they had to decide was whether they were going, with their eyes open, to vote for a thing that must be the means of inflicting great hardships upon many persons?

^* said, the case alluded to by the right hon. and learned Gentleman was very different to what the Chancellor of the Exchequer represented, and if the Committee would allow him he would tell them an instance which he knew to be a fact, an instance which was occurring at the present moment. It was the case of a property the owners of which let the house and the shooting, consequently there was no question of keeping servants, grooms, gardeners, and so forth; but yet it cost the owners £1,500 a year in wages to agricultural labourers, estate carpenters, and others who dwelt in the village connected with the estate. During the last five years, whilst the expenses had been £1,500 a year, the net income was only £150 a year. The owners had determined to go on with this expense for the sake of those dependent on the estate for employment, but if the Government were going to inflict these duties upon them it would be absolutely impossible for their successors to continue this expenditure of £1,500 a year.

^* : The argument used by my right hon. and learned Friend the Member for Bury (Sir H. James) amounts to this: that if you pay a certain proportion of income for laudable purposes it is not fair to tax the capital on which that income arises, and he introduced the element of charities, saying that sums of money are given—and I admit most wisely and properly given—for the support of churches and educational purposes, and that that was expenditure that entitled the money to be exempted from taxation. But is liberality confined to the owners of land? Are there not large sums of money given by those whose property consists entirely of personalty? The right hon. Gentleman the Member for Bury has entirely changed the issue. The case shown is one of hardship with reference to duties recurring too frequently, whereas the argument of the right hon. Member for Bury is an argument against taxing large properties altogether, but the Committee has de- cided that, and it cannot be reopened. A case was put by the hon. Member for Peebles (Mr. Thorburn), which, he said, had recently arisen, the case of three ladies dying within a week where the property was taxed three times. Suppose that property, instead of being land, was Consols—£10,000 of Consols—there is no addition to the duty payable under the present Bill, but the existing law would require on the second and third death the same duty to be paid as on one; the Probate Duty would be paid, and if it was not a case of transmitting property from father to child, Legacy Duty would have to be paid in addition; therefore there is no new principle introduced into the law as to personal property. Take real property. Suppose the interest was one of a tenant for life, if he died pending the payment of the duty with no instalment paid, the estate would not be called on to pay the unpaid instalments; but supposing he was absolutely entitled, or was a tenant for life with a power of appointment on his own death, that privilege would not apply, and he would, or his estate after him would, be liable to pay the whole unpaid instalments. But the Government have met that very liberally. On large landed estates they provide that only one duty shall be paid under one settlement, no matter how many lives take an interest in that settlement.

I gave an unsettled case.

^* : I know; but the great bulk of landed estates in this country are settled, and where, these rapid transmissions take place from brother to brother—for, after all, that is the real case that is put, suppose that one brother dies in the service of the Queen, in warfare, and he is succeeded by another brother—no further money is paid; 1 per cent. covers all the transmission from one to the other. Why should a person absolutely entitled to landed property be put in a different position, with reference to the payment of the duty, to persons absolutely entitled to personal property?

In the case I mentioned he neither receives income nor can he dispose of the principal.

^* : Does the hon. Member think there is no other property on which there is no income? During the last few years there has been an enormous amount of personal property in this country that has not brought in any income. Does he suppose there is not a very large amount invested in trade that brings in a very small income? The argument of the hon. Gentleman opposite is that if you compel an owner to close his place or cease keeping up his estate you are putting a large number of persons out of employment. So you are where the cotton millowner is obliged to close his mills. I do not know what hon. Members behind me will say as to the cotton trade, but in the iron trade the profits have not been of late years 3 per cent, upon the capital employed in it. In assessing taxes you cannot go into the question of what is the productive character of that in which this capital is invested. You take it on the value of the invested capital at the time, whether it is cotton mills, ironworks, Consols, or lauded estates, and I am sure the Amendment to the clause introduced into the Bill by the right hon. Gentleman the Leader of the Opposition has very fully guarded the community against any excessive taxation with regard to property under special depreciation arising from the causes to which hon. Members have alluded. There is no desire to inflict any injustice upon any class at all, though one would suppose, according to hon. Members, that the Government have some vindictive purpose in introducing this measure, and, desire to make the tax as onerous as possible. The Chancellor of the Exchequer laid down that the principle of wise taxation is to collect the tax with as little friction as possible, and he has shown, by the large number of Amendments he has accepted, his readiness to meet the views of hon. Members on that point. The hon. Member opposite put a possible case. I will not say such a case has not happened, but he puts a case and asks the Government to introduce a principle that would strike at the root not only of this Bill, but of the Probate Duty. I know where settled estates have not been disturbed for 60 years, and where, under the proposal of the Government, no additional duty would be payable. The same applies to large owners of personal property—if they have a long life you might say the State loses; if they have a short life the State gains, and yet I am sure the hon. Member would be astonished if the Government proposed that every estate should pay at a certain fixed period. That is not the principle on which we have gone, and, without going into the general question which the right hon. Gentleman the Member for Bury (Sir H. James) raised—

^* : No, no; the Chancellor of the Exchequer raised it.

My right hon. Friend is incorrect; the question was raised by the right hon. Gentleman the Member for the University of London, and I was replying to him.

^* : The Chancellor of the Exchequer said, "I am replying to speeches made out of this House and in," and I was replying to those observations.

By whom?

You know.

^* : Now let me recall the Committee to the Amendment before it, which is whether there is to be exceptional legislation in the case of estates which, from exceptional causes, change hands at a more rapid rate than in the normal state of affairs. Unless you are prepared to take both sides of the question and cleat with estates which do not change hands so rapidly, it is impossible to accept the principle of this Amendment.

^* : I wish just to say a word by way of explanation. The Chancellor of the Exchequer followed me in Debate, but he has not answered me. I said nothing whatever about munificence; I was talking about the repairs to farm-buildings and expenses of that kind, and my argument was that for several years the State would be the real owner, but would do nothing to keep up the property.

^* did not think that anyone, on that side of the House would find fault with the rebuke administered to his colleague by the right hon. Gentleman the Secretary of State for India. At the time the right hon. Gentleman rose he (Mr. Cohen) was trying to catch the Chairman's eye, in order to do what the right hon. Gentleman did—namely, to bring the Chancellor of the Exchequer back again to the Amendment they had been discussing up to that time. The Chancellor of the Exchequer would be the last to say that after he had, no doubt unintentionally, altogether misrepresented the argument, which he did not condescend to answer, that the right hon. Gentleman the Member for Bury (Sir H. James) was wrong in endeavouring to reply to the remarks which the Chancellor of the Exchequer so irrelevantly introduced. The Committee would see, as the Secretary, of State for India pointed out, the question before them at this moment was the question to which the Secretary of State for India, in the latter part of his speech, addressed himself, whether the Chancellor of the Exchequer should give exceptional treatment to estates under exceptional circumstances, and he did not think it was a good argument to adduce that no case was made out for exceptional treatment because under a different condition of affairs this exceptional treatment was not necessary. It was because the duty was now proposed to be seriously increased, to an extent which under certain circumstances became absolutely oppressive, that they thought a case had been made out, not in the interests of any particular class, but in the interests of the Exchequer and the Chancellor of the Exchequer himself. He would not cite cases of a million, as be thought the case was strengthened by referring to those that arose week by week and day by day, and if brothers succeeded to an estate of £40,000 or £50,000, surely not a very large amount, within a short interval they were eating up those estates and destroying them within a period of 20 or 30 years. And what did the Exchequer do? They were not spending their money on reproductive work, in maintaining and increasing the value of their estate, but as it passed from successor to successor they ate it up and destroyed it until in time there was absolutely no backbone and no reserve in this country. It was in the interest of the Exchequer of this country that the strength of the country, which consisted in its wealth, should be preserved, and the Amendment had been proposed in that view and, he thought, ought to be accepted.

I wish to say one word about this very important case. The Government, through the mouth of the Secretary of State for India, stated the special provisions of this Bill, against which this Amendment is directed, are not intended for the defence of any class. I accept that, and it is not in defence of a class that I wish to offer a defence of this Amendment. The Chancellor of the Exchequer tells us this scheme works out "fairly, upon the average"; but what does his "fairly, upon the average" mean? It means, in the mind of the Chancellor of the Exchequer, that he will not get out of the property on the whole more than he ought to get out of it, but by the particular method in which this taxation is levied it will be inequitable. There will be a large number of individuals at one end of the scale who will be clearly ill-used, and at the other end of the scale there are others who will not pay what they ought to pay. By what canon of justice do you get rid of an inequality by simply throwing an unfair share of burden upon the owners of those estates on which there happens to be a larger number of deaths in a comparatively small space of time? That is the broad issue, and I do not wish to dwell upon it, as it has been before the Committee at sufficient length. But there is one thing that has not been put before the Committee to which I wish to call attention. The Secretary of State for India pointed out truthfully that one method was provided under this Bill by which the grosser forms of this inequality could be avoided by the owners of property, and that was the method of putting your estates into settlement. If you do that, no doubt, however many deaths occur, no special taxation is thrown on the capital value of the property, but is it part of the deliberate policy of the Government to compel everyone to put their property in settlement? I have always understood that while settlement was a procedure tolerated by the various Governments of this country, it was not one generally approved by any, and not at all by hon. Gentlemen opposite. I thought it was one of the canons of their policy that settlement should be discouraged; but if you are going to provide settlement as the only way in which gross injustice to individuals is to be avoided, then everyone who anticipates such a disaster will, of course, feel driven to settle their property, however they would be glad to leave it in some other way. This is an argument it is worth while the Committee bearing in mind, and it affords me an additional reason for supporting the Amendment.

said, it was not until the concluding sentence of the speech of the right hon. Gentleman the Secretary of State for India that he had any idea the right bon. Gentleman had ever read the Amendment. The right hon. Gentleman said that the Amendment asked the Committee, to introduce a new principle into the taxation suggested by this measure. There he thought the right hon. Gentleman had fallen into exactly the same error which, with all due respect to him, the Chancellor of the Exchequer had fallen into in imagining that the certain injury to the individual was to be in any degree outweighed by loss of profit to the State. Was it a loss of profit, after all? because, on the hypothesis of the Chancellor of the Exchequer himself, it should be regarded rather as a windfall. The Chancellor of the Exchequer did not lose a certain amount of money which would otherwise come to him, but he was put into the fortunate position of receiving, within a rapid interval, what might be spread over a considerable number of years. He asked hon. Members to read this Amendment before they voted upon it and to remember that it did not interfere with graduation and with aggregation, and it raised no difference whatever between the treatment of real property and personal property. It did not attempt, in any way whatever, to favour realty at the expense of personalty, and he asked the Committee to adopt the Amendment.

said, that as so many references had been made to the small amount which the Exchequer would lose under this proposal he would ask the Chancellor of the Exchequer if he had made any estimate as to such loss?

was understood to reply in the negative.

said, there seemed to be a general consensus of opinion that if the system of Death Duties as proposed by the Chancellor of the Exchequer was to take effect and this Amendment were not accepted, the result must be the withdrawal of a large sum of money now annually spent, and upon which the agricultural community of the country depended. If that were so, what was the use of hon. Gentlemen opposite going about the country and professing to say they wanted to keep the agricultural labourer upon the land, when the result of this clause must be to withdraw the expenditure on which the agricultural labourer depended? The Government by their action would be withdrawing the inducement for, or the possibility of, the agricultural labourers remaining in the country; therefore let it he clear that when hon. Gentlemen opposite acknowledged they withdrew the money on which the labourers lived, the effect of that withdrawal must he to drive the agricultural labourers from the villages into the towns. The Government were taking up this line upon this Amendment, and he dared them to go to the country afterwards. [ Ministerial cheers .] He wished they were as ready to take up his challenge as they were to cheer. After taking up this attitude he would challenge the Government to go to the country and tell the agricultural labourers they were advocating their cause and were desirous of keeping them in their homes, when, as a matter of fact, they were adopting legislation which would have the effect of driving them out of their homes.

Amendment proposed, in page 10, line 38, at the end of the Clause, to add the words—

"Where by reason of another death a second Estate Duty shall become payable upon the same property within four years, it shall be levied and paid in respect of such property at one-half of the rate payable upon the principal value of the estate in which it is included."—( Mr. Heywood-Johnstone .)

Question put, "That those words be there added."

The Committee divided:—Ayes 160; Noes 199.—(Division List, No. 121.)

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

^* said, that this clause raised for the first time to any extent the suggestion of progressive, graduated taxation. He would not stop to inquire whether they had been right or wrong in the principles which in this country they had hitherto held—the principles of encouraging individual exertion and protecting the individual in the enjoyment of the fruits that he had won by his labour. The graduation of taxation took an entirely different view of the matter. The view now put before them was, that, in the case of a man who exercised frugality, thrift, and diligence, and who by those qualities won a great prize, the State was to step in and take a large share of it away. The greater the frugality, thrift, and diligence, and the greater the prize won, the larger was the amount taken away from him as a penalty for having been so successful and industrious. It had been said of the rich man, of the successful man, "he heapeth up riches and cannot tell who shall gather them," but he could tell now. It was the Chancellor of the Exchequer who would gather them. He should like to know what kind of encouragement this new principle in its application would be to the industrious man starting in life conscious of ability and capable of making great exertions? Would it not be a discouragement to him to know that if he succeeded greatly he would be despoiled greatly? If he acquired a large fortune, instead of leaving it to his children, a much larger portion of it would by this progressive or graduated principle be taken from his children than if he had been less successful in the race of life. If it be the real object, as it was with some, to reduce them all to one level, he thought the principle of graduation should be applied a little earlier—namely, to the earnings of a man rather than to the property he left. They should have an all round 8s. per day, for Solicitor Generals and all—even Chancellors of the Exchequer. That was the true application of the principle; but when they left a man free to earn any wage by any means, then, having left him free all his life, to come in at the end of life and say they were going to take away the prize was a kind of public policy calculated to stunt the growth of this country and to degrade the individual in it to something much lower than anything he had ever been known to be. But if they were going to apply this progressive principle, at any rate let them apply it rationally. The Chancellor of the Exchequer and the Secretary of State for India had said they should apply it in such a way as to produce equality of sacrifice and to equalise taxation. Yet how did they apply it in the clause as it stood? Under this clause, the millionaire who inherited £1,000 from a butler paid £20, but the butler who inherited £1,000 from a millionaire paid £80. That sounded like a comic invention, but it was in the Bill. If they were going to apply graduation that was not the way to apply it. But graduation in any shape inflicted a very grave disability and serious difficulty upon the tax-collector, and he, for one, had never been able to shake himself free from those principles of tax collection he imbibed during the five or six years he spent in the Legacy Office. The difficulty in connection with graduation was that if they levied a greatly increased tax upon the larger estates they would render the sum payable for duty so large that every kind of ingenuity would be exercised in order to prevent the State from getting it. There were two ways by which the State might be prevented getting the tax—one was evasion and the other avoidance.

I must point out to the hon. Member that the principle of graduation of the Estate Duty is not open to discussion. The only question open is the scale. You must take the clause as it is.

I presume I am not out of Order in discussing graduation.

It would be out of Order to discuss anything else but the scale.

said, that inasmuch as the scale was founded on graduation, he understood he might refer to it, though not at great length. He had been curious to know where this progressive graduation principle was borrowed from. He at first thought that the Chancellor of the Exchequer had invented it; but when he came to reflect on the usual genesis of things, he came to the conclusion that he should find it in the French Revolution. There accordingly, having searched, he did find the original inventor of progressive taxation, and the name of that original inventor was Tom Paine—English outlaw, French law-maker, member of the French Convention, atheist, and revolutionary. The Chancellor of the Exchequer was a degenerate descendant of the great atheist, for he had not applied the principle properly, and Tom Paine was much cleverer than the right hon. Gentleman. In his Rights of Man , written in 1792, Paine said this—

"Admitting that any annual sum, say, for instance, one thousand pounds, is necessary or sufficient for the support of a family, consequently the second thousand is of the nature of a luxury, the third still more so, and by proceeding on, we shall at last arrive at a sum that may not improperly be called a prohibitable luxury. It would not be politic to set bounds to property acquired by industry, and therefore it is right to place the prohibition beyond the probable acquisition to which industry can extend; but there ought to be a limit to property or the accumulation of it by bequest. It should pass in some other line. The richest in every nation have poor relations, and those often very near in consanguinity. The following table of progressive taxation is constructed on the above principles, and as a substitute for the commutation tax. It will reach the point of prohibition by a regular operation and thereby supersede the aristocratical law of primogeniture."

That was exactly the same, object as, the Chancellor of the Exchequer's, but the way in which Tom Paine's scale was carried out was a scientific way. It proceeded thus: On the first £1,000, 1 per cent.; on the second £1,000, 2 per cent., and not when there were £2,000 to put the whole extra charge on the whole £2,000, but only on the second thousand, whereas the Chancellor of the Exchequer put the extra charge on the whole. Under Paine's system the charge at this rate on the £2,000 would b9 30 per cent., whereas under the Chancellor of the Exchequer's system it would be 40 per cent. On the other hand, as they rose higher on, the scale increased, and Tom Paine's scale would catch up to the Chancellor of the Exchequer's, and the larger properties would give him a higher duty than he even now asked for. He therefore sincerely regretted that among all the studies of Adam Smith and other great men the right hon. Gentleman had kept aloof from the sympathetic pages of Tom Paine, and that, consequently, instead of presenting to them a scientific scale going on a proper curve and acting on a comprehensible principle he had presented to them a scale, which, he ventured to say, was a very bad scale indeed. In Victoria exactly the same mistake had been made, and he quoted Victoria because, like Adam Smith and Tom Paine, Victoria was one of the authorities the Chancellor of the Exchequer believed in. In Victoria, as he had said, exactly the same mistake was made in proposing progressive taxation that the Chancellor of the Exchequer was making at this moment. When first proposed in 1870, the whole range of properties from £1,000 to £100,000 was put into five categories. But it was found that the jumps, not merely in the limits of the property, but also in the rate of tax, were so great that hardship was inflicted in some cases, and the Estate Duty was evaded or avoided in others. The result was, that in 1890 an amending Act was passed in which the five categories of properties were increased to nine, and two years ago a still further amending Act was passed, by which the categories of property which originally stood at five were increased to 37. Consequently, we should be exposed in this country to the same inconvenience to which people of Victoria were exposed before they made the Amendment. Before long the Chancellor of the Exchequer would find it necessary to do what had been done in Victoria—;namely, to make the period shorter, and make the steps in the variations of duty shorter, and consequently bring his scale more into accordance with the facts of life. But the scale applied as well to property outside as within the United Kingdom, and the Chancellor of the Exchequer had more than once admitted that he could not get the duty upon property outside. Take the case of the hon. Member for the Carnarvon Boroughs, who might be assumed to be a millionaire, and who said he had half his property invested abroad. Upon that £500,000 the Chancellor of the Exchequer could not get the duty. Aggregating that sum with the other £500,000 in this country it would he chargeable with 8 per cent.; but since the duty could only, as was now admitted, be got out of the property here, the property here would therefore be charged at the rate of 16 per cent.; an extra tax upon property in this Kingdom, of a very remarkable kind. Not only that, but by the fact of the aggregation the property pays more than it should. Supposing an individual has £500,000 of property abroad out of a million, it would be liable to 8 per cent., and the £500,000 here would pay therefore £80,000 duty, while a property of an equal amount here—namely, £500,000, if all here would only pay £35,000. This was the result of the Chancellor of the Exchequer's scale, and he would hardly mend it by setting up reciprocity, which apparently meant that duty levied on property in Victoria might be deducted from the amount of duty on that property payable here, if the duty levied on property here were deducted from the amount of duty on that property payable in Victoria. But there was no such duty as that payable in Victoria.

pointed out that the Committee was not now discussing general principles.

^* said, he would not, of course, dispute the Chairman's ruling, but he was addressing himself to the proposed scale. The Chancellor of the Exchequer had gone to a considerable length in framing this scale. Two different systems were proposed; one for the Colonies, and the other for foreign countries. But he had always hitherto in Customs Duties repudiated that system of differentiation. It seemed that the system which was renounced at the Custom House was to be set up and worshipped at Somerset House. He could show that this scale of duty when put into operation would yield to the Chancellor of the Exchequer less money than he collected under the present system, quoting from the Returns of 1891–2. No tax varied so much as the Death Duties. That was one of the objections to them. They came in an unequal manner, but, broadly speaking, they came to 4½ per cent. all round. There was a very important matter in regard to the reductions on small estates. Estates under £50,000 formed 99 1/10 per cent. in number, and in value they constituted 60 per cent. of the whole. Under this scale, broadly speaking, there was no increase on properties under £50,000, but, on the contrary, a decrease on the tax levied upon the smaller estates. This Estate Duty, which was going to give the Chancellor of the Exchequer such an enormous result, from £3,500,000 to £4,000,000, must therefore arise from other properties beyond those of smaller value to the extent of 60 per cent.

asked from what the hon. Member was quoting?

said, he was quoting from the statistical abstracts issued by the Board of Trade.

pointed out that the hon. Member was dealing with settled property, and, leaving out real estate, was only taking personal property.

^* said, he was taking all property, real and personal, which was subject to Death Duties, and for the purposes of the proportion the figures he was giving were sufficient. At all events, the Chancellor of the Exchequer was wrong in fact when he said that real estate was left out. On only 40 per cent. in value would the duty be increased—in some cases considerably, but on the whole to an extent much less than the Chancellor thought, for the reason he would give. It was extremely dangerous greatly to increase the scale only in the case of the large estates, because they would thereby greatly increase the temptation to both evasion and avoidance. So hardly would this scale press upon people that they would try to a much greater extent than at present to avoid the payment of Estate Duty by making gifts to eldest sons and others during their lives. In itself that would no doubt be a good thing, but it would be bad for the Exchequer. Something would be gained by the Chancellor of the Exchequer on settlements and something on real estates, but it would be very little, probably not above ½ per cent. He would also gain something by charging on the capital value of real estate instead of upon the annual value of life interests. In introducing his Budget the Chancellor of the Exchequer represented that that would be something enormous; but he had since admitted that the whole result upon the equalisation of realty with personalty by charging upon capital value instead of life interests would only bring in £100,000, which was exactly 1–140th of the entire duty he expected to get. He had told the Chancellor of the Exchequer at the beginning that the results of this great alteration would be very small. The only really large increase arose from property out of the United Kingdom, and that being now given up the basis for the anticipated increase from this Finance Bill was gone. In a large number of cases of real estate there would be an absolute diminution of chargeable value. What with giving up property out of the United Kingdom, what with the exemptions of property under the £300 scale, the £500 scale, and the £1,000 scale, with evasion and actual avoidance of duty, instead of getting more money under this system the Chancellor of the Exchequer would get less than at present. He expected, instead of £10,000,000, to get £14,000,000. If he got £9,000,000 he would be very lucky. A better argument might have been put forward, against this scheme if the right hon. Gentleman had given the figures necessary; but he had not done so, and his opponents had to do the best they could. For this small, this negative result, was it worth while to abandon the old paths, to leave the old system of levying duties, and to upheave the whole of society? [ Laughter .] Yes, it amounted to that. Was it worth while for so small a result? When posterity came to examine this Budget, the Chancellor of the Exchequer would not be praised by some and blamed by the others as the inventor of a great democratic Budget, but he would be universally ridiculed as the man who had propounded a system which was equally impracticable and nonsensical.

^* said, that in carrying out this extensive alteration in the Death Duties everything possible should have been done to remove the hardship and injustice upon the persons who had to pay them. The Chancellor of the Exchequer had answered the statement that this Bill created anomalies by saying that there were other anomalies in taxation—Income Tax and otherwise; but the existence of other anomalies, which were the cause of great irritation, was surely no reason for creating fresh ones, to the extent that this scale would create them. The Government were establishing a scale which would cause immense friction. Whenever an estate was near the mark, there would be a feeling of injustice. Although the Chancellor of the Exchequer would probably not accept his Amendment, perhaps he would accept some of the changes indicated in the second scale. The changes he referred to were for levying the duty on the minimum scale. Supposing an estate amounted to £15,000; the lower duty should be levied on the property up to £10,000 and then between £10,000 and £15,000, the higher duty should be chargeable; or if it was an estate worth £120,000, the lower rate on £100,000 and the higher on £20,000, if that scale had been adopted by the Chancellor of the Exchequer it would have saved all the natural irritations which would arise, and its adoption would have had a tendency to recoup any loss, by the fact that no inducement would have been given for evasion. If even one large estate was kept below the margin line, it must be remembered that the loss would be considerable on an estate kept just under £1,000,000; the loss would be £5,000. In the case of large estates, the whole property could not be valued absolutely to a shilling, but much of it would be a matter of estimated value; and if his scale had been adopted, much fairer valuations would be obtained than under the proposed system. The Chancellor of the Exchequer was, however, determined to carry out his system, but it would lead to great discontent and disappointment. People would feel that the higher scales were too high and too grasping, and they would manage to evade them. He heard the other day from the son of a rich man of a case in point. The son was of opinion that this was "the best Budget that had ever been produced." Asked why, he replied: "At the present time my father is handing over to me the property and estates without waiting for his death." That was what was being done by a very strong supporter of the Government; and no doubt those blessed with property running into seven figures would so arrange the disposition of their property as to defeat the Chancellor of the Exchequer's demands.

said, that in every scale proceeding by classifications or jumps there must be inequalities; but the Government scale, rising only by one-half per cent., was a moderate proposal, and he did not fear producing results anticipated by the hon. Member. There had been many ingenious plans devised for reconciling the interests of the father and son in these matters, and one of which he had heard particularly recommended itself to his sense of justice. The proposal was that a law should be passed compelling the father at a certain age to retire on the allowance which, up to that time, he had made to his son. That would induce fathers to make their sons a handsome allowance. He could only congratulate the eldest son in the case mentioned by the hon. Member who had last spoken to whom his father had already commenced assigning his property. There was one thing which hon. Gentlemen opposite must have heard with satisfaction. The one infallible authority on the subject—the hon. Member for Lynn Regis—had assured the country gentlemen that land would pay less under the Budget than it did now.

I did not say that; I said in some instances. The large estates, of course, will pay more.

said, he understood the statement to be that under this Budget less money would be collected than at present, including the large estates.

^* said, he really could not allow himself to be both contradicted and misrepresented. His prediction was that the whole return of Death Duty would be less under this scheme than now, not in the case of land alone, though many estates would pay much less than at present.

said, that the country gentlemen were not concerned for the large estates; it was, of course, merely the small estates that they cared for. The hon. Member said that less money would be paid by the landed interest than formerly, and on that ground he invited the support of hon. Gentlemen opposite.

^* could not submit to be so misrepresented. He must repeat that, in his belief, the whole returns for the Death Duties would be less than they were now—not the returns from land alone. A good many landed estates would pay less than they do now, but the large estates would, no doubt, pay a great deal more.

pointed out that if the Chancellor of the Exchequer had accepted either of the scales proposed on the previous day, this desirable result would have been achieved—that those who provided for the payment of the Estate Duty by the purchase of an annuity or by saving money would have had that money taxed on the lowest scale. The hon. Member for Bodmin had proposed that annuities should escape aggregation, because he argued, fairly enough, that a man might buy an annuity with the object of creating sufficient funds to pay the tax; but the Chancellor of the Exchequer had objected that it would be absurd and unreasonable to free that particular form of providing for the tax, and that there would be just as much claim to relief where a man had saved sufficient to pay his Estate Duty. His object in referring to the matter was to point out that where a person had either by purchase of an annuity or by saving money collected enough to pay the Estate Duty, on his death, that sum, although not completely escaping taxation, should be taxed on the lower scale. People should be encouraged to make provision of that kind during their lifetime by allowing the money to pass, if not free of taxation, at all events with as little charge as possible. By that means a feature of justice would be introduced into this Bill, and it was worth the careful consideration of the Committee whether even later on some modification might not be made for that purpose.

said, that the question involved was not the question of graduation, but the method by which that principle was to be applied. The scale proposed by the Chancellor of the Exchequer was open to grave objection on grounds of expediency and justice, and he hoped his hon. Friends would divide, taking the view of the scale proposed by the right hon. Gentleman.

Question put.

The Committee divided:—Ayes 192; Noes 145.—(Division List, No. 122.)

Clause 15.

moved, in page 11, line 5, after the words "principal value," to insert the words "ascertainable in manner before mentioned." The object of the Amendment was to secure that the amount of Succession Duty was arrived at by the same mode of valuation as was provided for Estate Duty by the new clause moved by the Leader of the Opposition last week, and accepted by the Government.

Amendment proposed, in page 11, line 5, after the words "principal value," to insert the words "ascertainable in manner before mentioned."—( Mr. Brodrick .)

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

said, that since the Amendment introduced by the Leader of the Opposition with reference to the mode of valuing agricultural land, it was obvious that the principle ought also to be applied to Clause 15, dealing with Succession Duty, because that duty was to be levied on the principal value, and it would not be fair, under the circumstances, to deal with it in the way provided by Statute. But neither the Amendment of the hon. Gentleman nor the Amendment of the hon. and learned Member for York, lower down on the Paper, was near the mark of what he would like. What he would suggest was the insertion of the following words as a new sub-section:—

"The principal value of real property for the purpose of Succession Duty shall be ascertained in the same manner as it would be ascertained under the provisions of this Act for the purposes of Estate Duty."

^* contended that the interpretation of "principal value," if inserted in the manner suggested by the Solicitor General, would apply only to cases where the successor was competent to dispose of the property. How, then, if the successor took only a life interest, would that interest be reckoned? Would it not be according to the mode in which a life interest was at present reckoned under the Succession Duty Act? Therefore, would there not be different modes of reckoning the value of the estate in the case of succession to the full estate and in the case of succession to a life interest? He thought the mode of arriving at the value of the property for the purpose of Succession Duty should be the same in both cases; and he doubted whether that would be provided under the words suggested by the Solicitor General.

said, it was perfectly true that where a successor was not competent to dispose of the property the mode of valuation under the Succession Duty Act applied. The only case in which there would be a change in the valuation was when the successor was competent to dispose of the property.

said, he wished to explain what he meant. The point, no doubt, was complicated, but it was a very important point. Under the Succession Duty Act a successor who merely took a life interest would, if the clause passed in its present shape, only pay on the value of his life interest—namely, on a certain number of years calculated on the term of life at which he had arrived. Where the successor took the full estate he would pay the duty on the full estate. But whether he paid on his life interest or on the full value of the estate, surely the mode of calculating what the value of the estate was ought to be precisely the same in both cases. If they allowed the law to stand as it was at the present moment, they would have under the Succession Duty Act a special and most complicated form of arriving at the value of the life interest in the case of realty. For instance, the mode in which timber was valued was extremely complicated; and was by no means, as he was personally aware, either satisfactory to the Inland Revenue authorities or to the person succeeding. Real estate was only liable to pay on the value of the timber on the estate, according as the timber was cut and realised for sale, and the liability might continue through sixty years if the life was as long, so that the owner never escaped from the liability to the duty for the whole of his life. That was a complicated way of levying duty, and the result, he believed, was that a great deal of duty was never paid. Now, what was the proposal which the Government had adopted in order to arrive at the principal value of agricultural property on the Motion of his right hon. Friend the Leader of the Opposition? It was this: that, subject to the governing principle of the market value, the principal value of agricultural property should be based on the assessment of Schedule (A) of the Income Tax Returns. That got rid of all those difficulties and complications that were inherent in the present system of the Succession Duty Act. It would be fair to the taxpayer, and infinitely less troublesome to the Inland Revenue. His point, therefore, was that where payment of Succession Duty was made on the life interest, as it would be in all cases of settled property, and where it was made on the full value of the estate, as it would be in future when the property was not settled, in either case the same rule of valuation should be acted on in calculating the amount of the duty that was to be paid. He was sure that if the Solicitor General considered the matter further and consulted with the Inland Revenue authorities, he would find that in that way only could they arrive at a satisfactory solution of the question.

^* was understood to say that the Government only intended to apply the change of the valuation to cases in which the successor was entitled to dispose of the property.

said, the result of the Amendment of the Leader of the Opposition would be to give, in estimating the principal value for the purpose of Estate Duty, better terms than were now given in the case of estimating the annual value for the purpose of Succession Duty. But the precise reasons that induced the Government to give the better terms in one instance were strong enough to have induced them to give those terms in the other case. That was the point to which he wished to direct the attention of the Government, and nothing that had been said in reply ought to dispose the Government to continue in their unfavourable attitude.

promised to consult with the Inland Revenue authorities on the subject. His belief was that the Amendment he intended to move at the end of the clause would not carry out the effect the right hon. Gentleman desired, but it was better to insert that Amendment.

^* said, he desired to point out that the succession created by this clause, under certain circumstances, would be a succession that did not exist under the Succession Duty Act; and therefore there was a strong case for the Amendment.

said, that under the circumstances, he would not press his Amendment.

Amendment, by leave, withdrawn.

said, it would be more convenient for him to move his Amendment at the end of the clause.

moved, in page 11, line 5, after the second word "property," to insert the words—

"After deducting the Estate Duty payable thereon and the expenses of raising and paying the same and vesting the property in the succession."

His objects were to secure that the amount for which Succession Duty would be payable, in the ease of £100,000 for instance, was £100,000 less the Estate Duty, and that was £94,000; that the expenses of raising and paying the Estate Duty, and the expenses of vesting the property in the succession should be allowed.

Amendment proposed, in page 11, line 5, after the second word—"property," to insert the words—

"After deducting the Estate Duty payable thereon and the expenses of raising and paying the same and vesting the property in the succession."

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

said, there was one part of the Amendment of the hon. Gentleman to which he assented. He agreed that in the case of Succession Duty payable there ought to be a deduction in respect to Estate Duty, because the property to which a man succeeded would be less the Estate Duty. He also agreed to allow the expenses of raising and paying the Estate Duty; but he could not allow the expenses of vesting the property in the succession. That might mean the expenses of a great Chancery suit, for instance. He, therefore, would suggest as an alternative Amendment, to insert after the second word "property," line 5, the words—

"In respect thereof, on the said death, and the expenses, if any, properly incurred in raising and paying the same."

said, he could not gather that there was any strong object tion on the part of the Solicitor General to the concluding words of his Amendment. However, he would withdraw his Amendment, and accept the words of the hon. and learned Gentleman, hoping that the hon. and learned Gentleman would consider before the Report stage whether or not it was possible for him to go a step further.

Amendment, by leave, withdrawn.

Amendment proposed, in page 11, line 5, after the second "property," to insert the words—

"In respect thereof, on the said death, and the expenses, if any, properly incurred in raising and paying the same."—( Mr. R. T. Reid .)

Question, "That those words be there inserted," put, and agreed to.

On Motion of Mr. R. T. REID, the following Amendment was agreed to:—

Page 11, line 6, after "payable," insert "by the same instalments as are authorised by this Act for Estate Duty on real property."

said, he had been asked by his hon. and learned Friend the Member for the Isle of Wight to move the following Amendment:—Page 11, line 9, at end, to add the words,

"Where Succession Duty is chargeable on the principal value of real property, the provisions of Section 14 of 'The Succession Duty Act, 1853,' shall apply in the same manner as if that section were herein enacted and extended to a succession to real property as well as to personal property."

The object was simply to put realty in the same position as personalty with regard to the provisions of Section 14 of "The Succession Duty Act of 1853," which provided with regard to personalty that only one duty was payable in the case of two predecessors.

Amendment proposed, in page 11, line 9, at end, to add the words—

"Where Succession Duty is chargeable on the principal value of real property, the provisions of Section 14 of 'The Succession Duty Act, 1853,' shall apply in the same manner as if that section were herein enacted and extended to a succession to real property as well as to personal property."—( Mr. Byrne .)

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

said, he had consulted with the hon. and learned Member for the Isle of Wight on this motion, and had suggested to him that the same purpose would be effected by making the end of the clause to run as follows:—

"And shall be payable with interest at the rate of three per cent per annum from the expiration of 12 months after the date on which he becomes entitled to the possession of the succession or is in receipt of the profits thereof."

said, that if the hon. and learned Member was sure that his words would extend the benefit of Section 14 of the Succession Duty Act to real estate he would accept them and withdraw his Amendment.

said, the matter was complicated. His object was to prevent escape from the payment of Succession Duty in any case where Succession Duty was payable now.

said, he was not sure that the Amendment of the Solicitor General would effect the object they aimed at.

pointed out that if this Amendment were adopted now the matter could not be properly dealt with afterwards. By the addition of the words—

"On which he became entitled to the possession or was in receipt of the profits thereof,"

the point raised by the hon. Member for the Isle of Wight would be met, unless he had changed his previous opinion.

said, he had received no intimation to that effect.

said, that no doubt anything found to be necessary could be inserted afterwards.

said, after the Solicitor General's statement the Amendment must, of course, be withdrawn.

^* urged that the Amendment should be withdrawn, and the words of the Solicitor General adopted.

Amendment, by leave, withdrawn.

On Motion of Mr. R. T. REID, the following Amendment was agreed to:—After the words "arising on the death," insert—

"On which he became entitled to the succession or was in receipt of the profits thereof."

moved to add the words—

"The principal value of real property for the purpose of Succession Duty shall be ascertained in the same manner as it would be ascertained under this Act for the purpose of Estate Duty."

Question proposed, "That those words be added."

^* said, the more he looked at these words the more he was convinced that the clause would not carry out the original intentions of the Government. He would not detain the Committee by repeating what he had already said on the subject if the right hon. Gentleman understood the point he desired to raise.

said, the legal authorities whom he had consulted were satisfied that the words would carry out the intention of the clause—namely, that on agricultural property the valuation should be made on the saleable value.

^* admitted that that would be the result where the successor was competent to dispose of the property; but it would not be so in the case of a life interest. The words proposed by the learned Solicitor General would not carry that intention into effect where only a life interest, accrued. He felt quite certain that the right hon. Gentleman would admit that to be so on a careful re-perusal of the clause. The intention was that the value of the property should be ascertained in the same way whether the succession was to the life interest only or to the possession of the estate, where the possessor would be competent to dispose of the property.

reminded the right hon. Gentleman that in this case they were dealing only with the question where property passed in fee-simple, where the successor was competent to dispose of the property, and there the Government said that the valuation ought to be upon the principal value. In this clause they did not touch life interest coining under the Succession Duties.

^* said, his point was that the annual value for the purpose of arriving at the life interest should be calculated in the same way, and that the same deductions should be made as were allowed in calculating the principal value. Under the clause as amended by his right hon. Friend the principal value of agricultural property was not to exceed 25 years' purchase of the annual value. Obviously where the successor took a life interest he should not have to pay at a higher rate than the successor who was competent to dispose of the estate.

again pointed out that in the case of life interests Succession Duty was payable, and that in the case of fee-simples the principal value was the question. That must be borne in mind in measuring the value in the two cases.

did not wish to interfere in the discussion if there was a probability of agreement, but he would submit that the Government ought to deal with life interest exactly as they dealt with complete interests. His hon. Friend had stated the case quite accurately in one point of view though not in another. Capital value was not ascertained from annual value, but was based on the selling value at the time of the death of the deceased. That was the basis of calculation for purposes of Estate Duty, though not in the case of Succession Duty where the estate passed to the heir. He did not agree with the Chancellor of the Exchequer that they were dealing merely with the life interest. Exactly the same rule should be applied. Take in illustration the case of a man coming into an estate of £10,000 a year arising from high rents with great probability of a large fall and the possibility of foreign competition in produce. It would be very likely that he would not have £10,000 a year during the currency of his life interest, and he ought to be charged at a smaller rate. The true way to arrive at that would be in the way suggested, and not as though he were owner of a property of that particular capital value. That was clearly the logical and ethical aspect of the matter, and whether it was the proposal of the Government or of his right hon. Friend in that way the scheme would be carried out on a logical basis. The Chancellor of the Exchequer and the Solicitor General would see that this placed the question in an altogether new light from that in which it had been presented by other speakers, and he thought the matter deserved the serious consideration of the Government.

was more inclined to favour the view of the right hon. Gentleman the Member for Bristol than the view of the Leader of the Opposition.

^* felt quite satisfied that the argument of his right hon. Friend was perfectly logical and fair, but he was not surprised at the reluctance of the Chancellor of the Exchequer to accept it in dealing with this matter.

pointed out that the exemption would not go so far as was supposed. If the property was valued for a period of years the principal value could be ascertained. All that his right hon. Friend advocated was that the annual value of life interests in all properties should be calculated by the method now adopted in calculating the annual valise of property of a fluctuating character.

understood the right hon. Gentleman's suggestion to be that in order to get the true value of limited interests they should be calculated in precisely the same way as the value of entire interests, by first of all taking the whole value of the property and then ascertaining what the value was on that basis.

Question put, and agreed to.

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

^* said, he objected to the clause for three reasons. In the first place, the Government had thought it right to deal in the present portion of the Bill with one anomaly only of the Succession Duty. He thought they might have gone a little further, and those who had listened to the Debate for the last half hour would admit that this part of the Bill was a most incomplete one as it stood. He did not think the Government themselves would maintain that this was a satisfactory way of disposing of the great questions dealt with. His second reason for objecting to the clause was that it involved another burden on real property. It was of no use going further into that argument. The single answer of the Government to complaints of that kind was, "We are establishing equality of taxation," but they persistently shut their eyes to all inequality of taxation except that within the narrow purview of the Death Duties. He did not think there would be in the country, at all events, much difficulty in pointing out that, however equal Death Duties might be on real and personal property, there would remain great anomalies in the way real and personal property was taxed for other purposes. Although the Government had made certain concessions—which he readily admitted—in the method of valuing real property and exemption from Income Tax, and though the Government agreed to continue the present contribution to local taxation, he thought they ought clearly to understand that the Opposition did not think those concessions sufficient. He must support the view of other agricultural Members, that when they were throwing much larger burdens for the sake of equality on real property in one direction, they might, on the other hand, have done something to alleviate the injustice and inequality of local taxation as regarded the same class of property. Of course, gentlemen who represented the monied rather than the landed interest were well content with this so-called equality of taxation. They were, no doubt, content that land should pay an equal share of the Death Duties, while personal property did not pay its equal share of local taxation. He feared it was useless to press the argument further, but he felt bound to raise it before this clause was finally passed. But he had a third and distinct reason for objecting to the clause, and it was that it was one of the many provisions in the Bill which tended to encourage the settlement of real property. He knew the Chancellor of the Exchequer thought he was giving no fiscal advantage to one class of property; but he ventured to say that in the future every prudent man who possessed landed property would consider whether lie ought not, in justice to the pecuniary interests of his family, to at once make a settlement. Personally, he had always held strong views on the question, but he must say his views had been considerably modified by proposed changes in the law, settled estate receiving advantages, and the preference that now existed in favour of an absolute disposal being about to be removed. This Bill would be from start to finish a great benefit to the family lawyer. He was the person who, next to the Chancellor of the Exchequer, would most profit by the Bill, and he (Mr. Hobhouse) was sorry that that should be the case. Many hon. Members who opposed the Bill believed much more than he did in the benefits of settlement; but he would appeal to hon. Members who supported the Bill not to lessen the inducements to people not to tie up landed property. The striking out of this clause would not effect a substantial loss in the present year's Revenue. It stood apart from the rest of the Bill; therefore, he would ask the Committee not to pass it without considering before it was incorporated in the general law whether it ought not to be rejected because it was incomplete and unjust, and not beneficial in its operation.

^* (whose observations were almost inaudible in the Gallery) was understood to say that the hon. Member had said that the family lawyers were the people who would derive most benefit under the Bill. If that were so, he was sorry to say that family lawyers were a most ungrateful class, for a class who more sedulously worked against; the Bill lie did not know. The hon. and learned Member seemed to have misapprehended what his own views were in regard to the settling of property. He had never desired to promote in any way settlements of landed estates. Indeed, he had wished to impose upon settled property an extra duty in order to countervail the advantages that that class of property at present enjoyed. Taking the case of a freehold estate of the value of £10,000 with a net rental of £400 a year, a person entering into possession of that estate would at present, if one year old, pay duty upon £7,569; if 21 years old he would pay duty upon £6,879; if 40 years old upon £5,950; if 50 years old upon £4,971; if 70 years old upon £2,709, and if 90 years old upon £533 only. If the same land were leasehold instead of freehold the person to whom it was left would pay Probate Duty and Succession Duty also if he was liable to a higher rate of Succession Duty than 1 per cent. In face of such an anomalous exemption in the case of freehold property, how was it possible for the Government, in revising the Death Duties, to leave this grossest of all inequalities uncorrected? Unless hon. Members opposite were prepared to say that freehold land, because it was freehold, should pay only about half as much as if it were leasehold property, there was no hardship involved in the proposal of the Government.

said, before the Chairman left the Chair for the usual interval, he had risen to put a question to the Chancellor of the Exchequer as to the figures that right hon. Gentleman had quoted. He had been astonished at some of the results brought out by those figures with regard to land, and had wished to ask the right hon. Gentleman to repeat his figures. As, however, the right hon. Gentleman was not present, he (Sir R. Temple) must make the best case he could. The hon. Member for Somersetshire (Mr. H. Hob-house) had said with great truth that this clause, together with other clauses, sinned in respect of the inequalities between real and personal property. It was argued on behalf of the Bill that the Death Duties would be equalised with regard to real and personal property, but it seemed to be forgotten that in other kinds of taxation there was an utter inequality between the two. He was surprised that the Chancellor of the Exchequer had not condescended to reply to the very forcible and impressive speech of the hon. Member for Somersetshire on the subject. Did the Government, or did they not, admit that there was a great inequality between personalty and realty in respect of local taxation? If they did admit if, what became of the argument respecting the justice of their present proposal? If the inequality in regard to local taxation were to be permitted to continue, why should not the inequality with reference to the Death Duties be permitted to continue also? Why was the inequality to be remedied as against land on the Death Duties, and the inequality against land on local taxation to be allowed to remain? Of course, the Chancellor of the Exchequer knew that it was of no good to attempt the impossible task of answering the argument of the hon. Member for Somersetshire, who was one of the best informed men in the House on the subject, and he had therefore left it alone. The Chancellor of the Exchequer had read some very interesting quotations from a publication by the Under Secretary for the Colonies (Mr. S. Buxton), and then had turned round triumphantly towards the hon. Member for Somersetshire, and said, "Does it come to this: that land is for the purpose of the Death Duties to be taxed only half as much as personalty, because it is land?" There were two very strong reasons why land should be taxed at a lower rate than personalty. The first of these was that it was subjected to an unfair amount of local taxation, and the second had reference to the matter of valuation. Unless his ears had deceived him, the Chancellor of the Exchequer had read some figures which stated that £10,000 worth of land would yield an income of £400 a year. Such a statement was all moonshine, and he could not understand what the Chancellor of the Exchequer meant by reading to the Committee so absurd a calculation. If these were the kind of calculations on which the taxation proposals of the Government were framed, then Heaven help them! The system of valuation on which land was taxed was worth nothing at all. Value meant what a thing was worth—

What it will sell for.