said, he had a Motion upon the Paper to recommit this Bill, but he understood the Motion was out of Order.

Yes, that is the case.

said, he rose to move a new clause. He had placed two clauses on the Paper when the House was in Committee, but, owing to the general desire expressed that the Committee stage should be concluded on Monday last, he did not trouble the House with either, although he thought they related to a very important question. Her Majesty's Government had admitted with regard to Estate Duty in the second sub-section of Clause 5 that

"in the case of settled property, where the interest of any person under the settlement fails or determines by reason of his death before it becomes an interest in possession, and subsequent limitations under the settlement continue to subsist, the property shall not be deemed to pass on his death."

That contained the principle which he desired to give further extension to in the first clause he had placed on the Paper. It contained this principle, which he thought was a sound one, and one which should command the assent of the House irrespective of Party—that no Death Duty whether in the nature of a duty on the corpus of the estate, such as the Estate Duty was, or whether a Succession Duty or Legacy Duty payable by the successor or legatee, should be paid on an interest in expectancy which did not come into possession. Probably the hon. and learned Gentleman the Solicitor General would contend, in answer to the clause he had placed on the Paper with regard to the Estate Duty, that although an interest in expectancy might not fall into possession during the life of the person beneficially entitled thereto, yet that the interest might nevertheless be a valuable interest and might be sold in some cases, no doubt, for a very considerable sum. But if it were so sold, of course the money received and left by the person who had sold it would become part of his estate, and would pay Estate Duty with the rest of his estate. His (Sir M. Hicks-Beach's) contention was that an interest which that person did not sell, from which he received no pecuniary benefit whatever or any advantage of any kind, ought not to be charged with the rest of the estate with Estate Duty. No benefit whatever would be received because the man did not come into possession. Practically his interest ceased at his death. Therefore, it was difficult to see—having regard to Subsection 2 of Clause 5—on what principle the Government, who had admitted in the clause that under a settlement the life interest could not be charged to Estate Duty when the life interest did not actually come into possession, could charge the interest in expectancy with Estate Duty when that interest did not come into possession. The second part of the clause related to Sub-section 4 of Clause 7, which said—

"Where an estate includes an interest in expectancy, Estate Duty in respect of that interest shall be paid at the option of the person accountable for the duty, either with the duty on the rest of the estate or when the interest falls into possession."

If his clause were accepted by the Government it would be possible, assuming the Bill to stand in this respect as it did, that the duty might be paid with the duty on the rest of the estate on this interest in expectancy before it came into possession, and it might never come into possession. He, therefore, provided in the latter part of the clause that if duty had been paid under Sub-section 4 of Clause 7,

"the Commissioners shall repay such duty (together with the interest thereon at the rate of three pounds per centum per annum from the date of the payment thereof) to the person who paid such duty."

New Clause—

(No Estate Duty shall be paid on interest in expectancy before it falls into possession.)

"No Estate Duty shall be payable in respect of any interest in expectancy unless such interest falls into possession during the life of the person beneficially entitled thereto, and if there shall have been paid with the duty on the rest of the estate any duty which by reason of the death of the person beneficially entitled to the said interest before it falls into possession shall not be payable, the Commissioners shall repay such duty (together with the interest thereon at the rate of three pounds per centum per annum from the date of the payment thereof) to the person who paid such duty."—( Sir M. Hicks-Beach .)

Clause brought up, and read the first time.

Motion made, and Question proposed, "That the Clause be read a second time."

said, the clause would involve a most serious infringement of the policy of the Bill with regard to the taxation of property passing at the death of the deceased. Part of the property passing at the death might consist of an interest in expectancy, and an interest in expectancy might be of an extreme marketable value—might be worth hundreds of thousands of pounds. Indulgences of two kinds had undoubtedly been shown to interests in expectancy in the matter of taxation for Estate Duty. In the first place, it was optional to the person who was entitled to the interest in expectancy either to pay upon the present value or to wait until the time came when the interest became an interest in possession. That was a very important exception made with regard to the interests in expectancy, because of their character and because it might be difficult at the moment to get the money for the purpose of paying duty upon the expectancy. Another indulgence was shown to interests in expectancy which were the subjects of settlement. But the right hon. Baronet had asked for further benefits for interests in expectancy. An illustration was better than an argument to deal with the position which the right hon. Baronet took up. Suppose a person died leaving £100,000 in cash, and also leaving an expectancy worth £100,000. They would say, for the sake of argument, that that expectancy was £200,000 on the death of the deceased. He left three sons, and the property went in the first place to the eldest son, who died and left it to the second son, who also died and left it to the third. What would be the effect upon these two classes of property? Under the proposed new clause the effect would be that Estate Duty would be payable three times in respect of the £100,000 cash, but not in respect of interest of expectancy until the widow died. But each were worth the same; they were both of them property in every sense of the word; they were property in law, and might be turned into enjoyment at once, and he must say that he could not see why, merely because the one was in the eye of the law not in actual possession, duty should not be payable on the actual value. He thought he had treated the proposal quite fairly, and trusted hon. Members would see that he had drawn an accurate comparison.

said, he must submit that what the learned Solicitor General had urged conceded the principle of his right hon. Friend's Amendment, but offered no remedy. He would like to point out that his learned Friend had only dealt with the case of a man who chose to sell and reduce into possession the reversion or expectancy, and he suggested that if the person who would become entitled to £200,000 on the death of the widow should choose to turn it into money, he could do so, and ought to pay. If that was the real case which Her Majesty's Government desired to meet, it could be met at once by an Amendment to the clause, suggesting that if an expectancy was reduced into possession by sale or otherwise, if it was turned into money, then the Estate Duty was to be payable on the value realised. He would point out to the Chancellor of the Exchequer that the Opposition in several Amendments of a kindred character which were moved in Committee admitted that principle. What they ventured to submit was this: that supposing the individual did not turn the expectancy into money, and never got any benefit from it at all, why should he pay the Estate Duty? He would like to add a little corollary to the case the learned Solicitor General had supposed. He accepted the position, and would not argue whether it was just or not, but let them suppose that the unfortunate sons who died had never attempted to deal with the expectancy, the £200,000 which was only to fall in on the death of the widow, that they had not got a single penny-piece. Yet each of their estates was to pay not only on the £100,000 value, but on the increased value, because they would be worth more when the eldest son and the second son died, by virtue of the fact that there would be more years left of the widow's life. He wanted to know where was the equity and justice of causing the three sons, who had never received one penny of benefit from the property, who had not reduced it into possession, to pay three estate duties? That brought out in strong relief the injustice of putting in the same category property which was in possession and property which was not reduced into possession. He must respectfully protest against the suggestion that there had been inserted in the Bill, with regard to the two classes of exception referred to by his right hon. Friend, anything in the nature of a favour. The word "favour" applied to these particular provisions was a misnomer altogether. He did not think the Government had gone far enough; certainly, they had not done more than was just. The Government had no right to show favour; they should hold an equal hand. The provisions alluded to were not inserted as a matter of favour, but because Her Majesty's Government could not deny the justice of the case. They were entitled to say upon this Amendment that exactly the same injustice would be perpetrated if the Government caused people who did not get a penny-piece from the expectancy to pay as if they had turned the property into money. He submitted that the Solicitor General had in no way answered the argument of his right hon. Friend who moved the Amendment, and he hoped the House would support the new clause.

said, the hon. and learned Gentleman who had just sat down had said very truly that the Government had no right to favour anyone. He himself would ask, why should expectants be favoured rather than anybody else? There were certain difficulties, no doubt, inherent in the nature of expectancies for which provisions ought to be made, and those provisions had been made. For instance, they postponed payment for their convenience, and, in the case where the expectancy was not a real vested interest, they had provided by the clause already referred to that if it failed the individual would be let off altogether. The case was, however, not the same as the one that his hon. Friend had put before them. Where the individual had the power to bring his expectancy into possession, but did not do so, he, for all that, received a benefit from it as forming at will a convertible asset, and passing on his death to other members of his family. It could not be said to differ for the present purpose from property in possession, or, if it arose out of real estate, was indistinguishable from a vested interest. It must always be remembered that an expectancy could not arise except the property it related to was bound in some way or other. In other words, if there was an expectancy there must be some document that created it. They had affirmed the principle before; they had not allowed it to be said that they taxed real estate upon the present actual income derived from it, for they took into consideration all the expectant value that it might have. They had discussed this matter over and over again, and he did not think there was anything new in it. They charged a man who was the owner of real estate whether the value or the greater part of the value of the property was a value in expectancy or not. It was strictly analogous to this case, and if they were to give up this point they would be entirely running counter to what they had done. If a man had a bag of gold he would be able to dispose of it in favour of other members of his family. He could not see the difference between the expectant value under discussion and a bag of gold which a man did not spend. That bag of gold would go to his descendants, but he might have had the money at any moment of his life. It would be an anomaly altogether to allow this freedom from duty simply because the property, though of great present marketable value, was allowed to ripen to its full value until it fell into possession.

said, there was another difficulty not yet met by the Government. The interests in expectancies, which were, in point of fact, contingent interests, might never come into possession at all. There were a large number of interests of this description which were at present of comparatively small value, but which might be of more value as years went on, and might tnrn out to be of no benefit at all to the person to whom they were originally given. Some of those interests were absolutely unsaleable, and could not be mortgaged; it therefore appeared to be unjust that a man should be taxed on a contingent interest independent, not upon the happening of a death, but of some future event which might or might not take place. In nine cases out of ten that was practically an unsaleable thing, and a thing upon which money could not be raised. He submitted that this was a sufficient reason for a part of the argument of his right hon. Friend who had moved the clause.

was understood to say that the speech of the hon. and learned Member was practically an admission of the argument of the Government against the Amendment. If the interest were not saleable there would not be any charge upon it at all, as they only charged upon saleable value. That would meet the substance of the Amendment. The proposed clause raised a new principle, because those expectancies were now practically charged under probate. If they were to open this door everything that was not taken at its full present value, such as building land, would be let out. If a thing was saleable it ought to be charged. A man might not sell it any more than he might sell his diamonds; but any realisable value which a man possessed ought to be charged against the estate under the Estate Duty. He did not think that the right hon. Gentleman had fully appreciated the enormous loss to the Revenue which would result from the adoption of a principle of this kind, not only with reference to the Estate Duty, but with reference to the Probate Duty.

said, he thought the right hon. Gentleman, in the illustration he had given, was rather leading the House astray, and it seemed to him that his argument was very unfair. The possessor of a bag of gold or of diamonds could make use of those commodities at once, but the possessor of a contingent expectancy would be driven into making a ruinous bargain, perhaps with usurers, in order to dispose of it at the ordinary fair marketable value. The right hon. Gentleman knew perfectly well that the purchase of a reversion of this kind was a class of business which was to a large extent in the hands of persons who did not bear the best of reputes. The new clause seemed to him extremely fair, because it did not interfere with the principle that every person was to pay on what he inherited. He hoped the House would support his right hon. Friend.

said, he wished to call attention to the contradictory positions of the Attorney General and the Chancellor of the Exchequer. The former told them that an expectancy could only possibly arise under a settlement, whereas the latter told them that Probate Duty was payable on expectancies. Now, as no Probate Duty was payable under settlements, and only under wills, he did not see how these two statements could be reconciled.

Is not the hon. Member aware that settlements are made by wills as well?

said, he was aware of that, but apparently the Attorney General was not. All this trouble arose from the fact that the Government had departed from the old principle embodied in the Succession Duty Act. The Government might just as well, in imposing a tax on apple trees, tax the pip when it was put into the ground because some day it would grow into an apple tree. The Chancellor of the Exchequer had cited the case of Toxteth Park, and had said that no duty was charged upon it, although it sold for a large sum of money; but the right hon. Gentleman had refrained from telling the House that it was admitted by the Department at the time the duty was first claimed that the land itself had no value, and therefore it was perfectly right that no duty was charged.

said, it was not Toxteth Park, but the foreshore of the Mersey. It was admitted that it did not pay income, though the foreshore was of immense value.

said, it was admitted that the estate had no value. He must refer the right hon. Gentleman to the report of the case. He really thought they were entitled to complain of the way they were called upon to discuss these new clauses which were put down—

Order, order!

said, he would, then, only say that they were called upon to discuss them under disadvantageous circumstances, because of the purposely-adopted action of the Government.

said, the Chancellor of the Exchequer and the Solicitor General objected to the proposed clause because they said that these reversionary interests could be sold or money borrowed upon them. That might be true; but when he ventured to bring forward a similar Amendment in Committee, providing that in the case of a reversionary interest being sold or money borrowed upon it, then duty should be payable, it was objected to because it was said the duty must always be paid, as the reversion had some sort of secret value which might some day be realised. If they made the taxation of these reversionary interests so high as was proposed by the Bill it would become impossible for anybody but rich men to hold them. Take this case: the reversion of a house worth £20,000. It was held on £5 a year ground rent, and the reversion, at the present time, having 40 years to run, was worth £5,000. As it happened the house he had in his mind was the property of a millionaire, so that the Estate Duty would be 8 per cent. There would be a duty of £400 payable on that house when the present owner dropped, and yet for 40 or 50 years he would only enjoy £5 a year from it. It was obvious that if the house were held by anybody but a rich man he could not possibly enjoy that reversion, but would be obliged to sell it, because he could not afford to pay the sum of £400, or nearly 100 years' purchase, on account of the reversionary value. Every law which tended to the concentration of these properties into few hands was most detrimental, and the only possible result of this Bill, as regarded reversionary interests, must be that they must either be sold to insurance or other companies or must be held by rich people. It was a monstrous thing to make it impossible for people, unless they were rich, to hold these properties, and to make it compulsory that these properties should be sold to Insurance Companies and rich people. He supported this new clause, because he thought it was only equitable, and although they were going to tax all these properties on their gross value, surely they might fairly lay down the rule that only those properties which were really of tangible value to people should pay this duty. It certainly never was contemplated that the taxation should fall upon people who were only, as it were, a sort of pipe through which the property went to those who inherited it. If they were going to make these people pay heavy duties for property from which they derived no benefit, simply because some generations hence their descendants would inherit it, they would inflict a great injury and wrong upon them.

said, that the Chancellor of the Exchequer had compared these unrealised interests in expectancy to the possession of diamonds or pictures which brought in no income. They did resemble them in that respect but they differed from diamonds and pictures in the fact that there was no present enjoyment from the unrealised reversions. That was a fundamental distinction which went to the very root of the Amendment. He felt a doubt with regard to the bearing of Sub-section 4 of Clause 7 of the Bill on the question raised by his right hon. Friend. His right hon. Friend desired to stop what he could not help but regard as a breach of fundamental equity in this Bill—namely, the provision by which a man was taxed upon that which he never enjoyed. He understood that Subsection 4 of Clause 7 was intended in part, at all events, to meet that particular case. It stated that—

"Where an estate includes an interest in expectancy, Estate Duty in respect to that interest shall be paid at the option of the person accountable either with the duty on the rest of the estate or when the interest falls into possession."

So far the words seemed quite clear. He wanted to know whether they carried with them the corollary that upon every interest in expectancy which did not fall into possession during the life of the person who succeeded the original testator or settlor, the duty would be paid at all, supposing his option was to defer the payment until the expectancy did fall into possession. If the true interpretation of Clause 7, Sub-section 4, was that where a man elected to defer the payment of the tax on an expectancy until the expectancy was realised, and if they were to take that statement as carrying with it the conclusion that if it never fell into possession during his lifetime he would not be called upon to pay at all, then he thought his right hon. Friend's case would be entirely met, and it would not be necessary to press the clause to a Division, his object being carried out by Clause 7, Sub-section 4, as so interpreted. But he might be wrong in thinking that was the interpretation, and the interpretation of the Government, might be that the duty thus remaining unpaid was to be charged on the estate, going on through any number of lives, however many lives there might be falling in before the expectancy was realised. If that were the interpretation by the Government of their own clause he thought that obviously there was a great inequity in the Bill which they hoped to remedy, and he hoped his right hon. Friend would divide. If, on the other hand, the Government could assure them that the man who never enjoyed an expectancy was not to be asked to pay on that expectancy, and his estate charged as if he enjoyed it, then all they desired would be carried out, and it would not be necessary to trouble the House to divide upon it.

Undoubtedly a man may die before the expectancy is realised, but that does not get rid of the responsibility. He may not be made personally to pay because he is dead; but his estate will be liable, and his expectancy will be liable, and the duty will be payable whether he lives or dies.

^* : May I ask, as a corollary to that question, will not the result be this: If a man dies before he has enjoyed the interest in expectancy, having opted to pay that duty when that interest falls in, then the unpaid duty will remain a charge upon that estate, and will have to be paid perhaps with two or three other duties by some subsequent person who will eventually come into the interest, so that the duty will be paid several times over because of the several interests into which the estate is split up?

It will be like any other property or any other estate.

Question put.

The House divided:—Ayes 130; Noes 189.—(Division List, No. 152.)

moved the following new clause:—

(Legacy and Succession Duties on interests in expectancy in certain cases.)

"Where an interest in expectancy in any real or personal property to which any person shall become entitled on any death shall, before such interest falls into possession, have passed by reason of death to any other person or persons, then one Legacy or Succession Duty only shall be paid in respect of such interest, and shall be due from the person who shall first become entitled to such property in possession, but such duty shall be at the highest rate which, if every such person had been subject to duty, would have been payable by any one of them.

He said, this clause did not relate at all to the Estate Duty, and therefore stood on quite a different footing to the clause which the House had just negatived. It dealt with the same subject—namely, the payment of cumulative duties in cases where the interest had not come into possession, but it was based on a very much stronger argument than that of the previous clause, because the Government, with regard to the Estate Duty, had contended all along that that was a duty chargeable on the corpus of the estate of the deceased and not upon the interest taken by the successor or legatee. The Succession and Legacy Duties were duties charged upon the interest taken by the successor or legatee, and therefore, although the Government might contend that it was right and necessary that the Estate Duties should be cumulative where an interest in expectancy had not come into possession, he did not think it was possible for them to contend that the Succession or Legacy Duty ought in any fairness to be cumulative under similar circumstances. Of course, neither the successor nor the legatee took anything but the interest to which he succeeded by his succession or legacy. It made not the smallest difference to him whether the succession or the legacy had nominally, though not actually, passed through half-a-dozen people before him or not. What he took was the particular thing to which he succeeded or which was left to him, and therefore he ought not, in common fairness, to pay duty more than once on that to which he succeeded. As his hon. Friend the Member for King's Lynn had already pointed out, that principle was completely recognised in the Succession Duty Act of 1853. Under that Act and the existing law a single duty only was payable in respect to any succession which before it fell into possession devolved to a new successor. This was effected in the case of personalty by a special clause in the Succession Duty Act, which he had practically copied in the clause he now proposed, and, with respect to realty, by the nature of the provisions of the Succession Duty Act itself. Of course, the House was aware that under the provisions of the Succession Duty Act, as it stood at the present moment, the succession to real property could only be a succession to a life interest; that the value of the succession was calculated on the capitalisation of so many years' purchase of the annual value of that life interest, and therefore until the interest in any realty which was liable to Succession Duty came into possession it was impossible that any Succession Duty could be chargeable. In the first place, he was advised that so far as regarded realty which was liable to the Succession Duty, the liability to cumulative duties would be imposed, though, he thought, not intentionally imposed by the provision in this Bill, which stated that where a person was competent to dispose of an estate he was to be charged Succession Duty on the principal value, and not on his life interest. He knew that certain words had been inserted in the clause on the suggestion of the hon. and learned Member for the Isle of Wight to meet that point, but he would venture to submit to the Government that as Clause 18 now stood that point was not met. The clause stated—

"The value for the purpose of the Succession Duty shall, where the successor is competent to dispose of the property, be the principal value of the property, and duty shall be charged thereon."

And then the clause went on to say that the duty should be payable with interest from the expiration of 12 months after the date upon which the successor became entitled to possession on succession. He fancied it would be contended that those words, limiting the payment of interest to the date from the expiration of 12 months after the date on which the successor became entitled in succession to possession, would also prevent the Succession Duty being charged in a case where the successor never became entitled in succession to possession. But he would venture to submit that these latter words solely related to the payment of the instalments and to the date from which interest had become payable, and that the duty was charged by the first few lines of the clause which stated that the value,

"Where the successor is competent to dispose of the property, shall be the principal value of the property,"

and therefore if the Government did not accept this clause it would be necessary on Clause 18 to insert some additional words to make it perfectly clear that the Succession Duty when charged on the principal value, as provided by the first few lines of the clause, should not be charged until the interest came into possession. That was what he proposed with regard to the Succession Duty, simply to leave the law as regarded cumulative payments of duty on its present footing and to secure that there should be no Succession Duty charged where the interest did not actually come into possession either on realty or on personalty. He came to the other and more important portion of his clause which dealt with the Legacy Duty. He ventured to submit to the House that there was nothing—and he did not think there ever had been—more anomalous or more unfair in their present system of Death Duties than the way in which cumulative duties were charged with regard to the Legacy Duty, although they were not charged with regard to the Succession Duty. He was not now contending for land as against other property, or for realty as against personalty. He was only asking that the Chancellor of the Exchequer, when he put realty and personalty on an equal footing with regard to the Death Duties, should place them on an equal footing with regard to the non-payment of cumulative duties in the case of Legacy and Succession Duty. He need not dwell on the administrative difficulties that had resulted from the present state of the law. It might often happen that a life interest in a legacy would exist for 60 or more years, and that the original legatees, when that life interest had ceased, and the time came for the payment of the duty, might be dead, and it might be impossible to trace their executors and heirs. Consequently, there had been enormous difficulties in the administration of the Legacy Duty owing to the cumulative system. But he would like to quote one example well known to lawyers which showed the extreme unfairness to the legatee of the present system. He referred to the decided case of "The Attorney General v . Maxwell." These were the circumstances: A person, whom he would call A, settled £16,000 on himself and wife (whom he would call B) successively for life, and then for younger children in equal shares, and in the event (which happened) of all such children dying before they reached the age of 21, on himself absolutely. He died intestate, leaving a wife, B, and three children, C, D, and E, surviving him. The three children were the sole next-of-kin, the wife being barred by settlement. But all three children died while under age and intestate, and last of all the wife died leaving another person, whom he would call F, as universal legatee and executor, in whom the settled fund became vested in possession. F thereupon had to pay Legacy Duty—first, on the devolution of the entire fund from A to the three children; secondly, on the devolution of the share of C, who died next, to B, D, and E; thirdly, on the devolution of the share of D, who died next, to B and E; fourthly, on the devolution of the share of E, who died next, to B; and, fifthly, on the whole fund as passing under the mother's will to the executor and legatee. The property passing under each of the first four devolutions was solely an interest in expectancy which never came into possession, and yet the legatee had to make no fewer than five payments of Legacy Duty. Nothing could more strongly prove the extreme unfairness of the law. It had always been asserted that one of the principal objects of this Budget was to do away with anomalies such as these, and to place realty and personalty on an equal footing as regarded the payment of Death Duties. But the right hon. Gentleman had not placed them on an equal footing with respect to the payment of cumulative duties, nor could there be anything like equality so long as this gross injustice on personalty was allowed. He ventured to submit that in common fairness to future legatees, in order to place them on an equal footing with successors to realty, the Chancellor of the Exchequer ought to do away with the iniquitous proceeding by which as many as five, or even ten, cumulative Legacy Duties might be charged upon the unfortunate legatee who would ultimately benefit by the legacy simply because that legacy had come to him through half-a-dozen or more persons who never enjoyed it at all. This was a very complicated matter, and not being by profession a lawyer he had felt somewhat diffident in bringing it forward; but he was so much struck with the injustice during the short time he was connected with the Treasury as Chancellor of the Exchequer, that he made up his mind to bring it forward whenever opportunity offered.

New Clause—

(Legacy and Succession Duties on interests in expectancy in certain cases.)

"Where an interest in expectancy in any real or personal property to which any person shall become entitled on any death shall, before such interest falls into possession, have passed by reason of death to any other person or persons, then one Legacy or Succession Duty only shall be paid in respect of such interest, and shall be due from the person who shall first become entitled to such property in possession, but such duty shall be at the highest rate which, if every such person had been subject to duty, would have been payable by any one of them."—( Sir M. Hicks-Beach .)

Clause brought up, and read the first time.

Motion made, and Question proposed, "That the Clause be read a second time."

said, a great deal was heard about the unfortunate people who had to pay these duties; they ought rather to be considered fortunate people who had any property on which to pay them. The unfortunate legatee who could not by possibility have got his legacy, but for the testamentary dispositions of A, B, C, and D, was set up as a sort of financial martyr, because he had secured the goodwill of each one of those persons in succession.

That is not so.

said, if it were not so, he did not understand the case. Did the right hon. Gentleman wish there should be only one Legacy Duty paid, although the property passed under the wills of A, B, C, and D successively?

^* : In the case cited there was no will at all. The money was settled; but as it was left in equal shares for life to the children, it had to be traced through them.

said, he had often heard it remarked—and with truth—that no one was so technical as a layman. This was a pure technicality. It was a well-understood rule in law that intestacy was a statutory will. Hon. Members surely could not suppose he had forgotten all his law. The legatee came into this property through the wills—not necessarily the written wills—of A, B, C, and D, any one of whom might have deprived him of it.

How?

By giving it to someone else. This was another illustration of the method in which right hon. and hon. Members supported the Amendments they brought forward. They took a general rule, and then selected hard cases arising under it. There would always be hard cases under general rules. It was conceivable that half-a-dozen owners with fee simple in succession might die within a week, but if they were to make exceptions in all such cases they would have to make hundreds of thousands of exceptions; they would be discussing the Bill for years, and eventually they would produce a measure perfectly unworkable. For 100 years past the rule of which the right hon. Gentleman complained with regard to Legacy Duty had existed. Probate Duty and Administration Duty had always been payable, however frequent the devolution might be because there was no principle they could seize upon to relieve them. They must take the average cases, although undoubtedly there might be individual instances of what hon. Gentlemen opposite called hardship on the ultimate receiver. This was not a Bill to alter the Legacy Duty Act, and, even if it was, the proposal in the Amendment did not point the direction in which they should alter it at all. The Amendment involved the fallacy of supposing that because the pro- perty could not be got at in specie it could not be enjoyed at all.

said, the hon. and learned Attorney General was no doubt correct when he told them that intestacies must rank in the same category as wills, but he had failed to deal with the case put by the right hon. Gentleman the Member for West Bristol, in which a number of remaindermen had died one after the other without ever coming into the inheritance. He had told them that the person who eventually succeeded had derived advantages from the good will and benevolent intentions of those who had died just as much as if they had made him their heir by written will. He told them that each one of these persons had conferred an advantage on the eventual legatee, but how?

By dying.

said, the Chancellor of the Exchequer had supplied the link which was entirely wanting in the argument of the Attorney General. Although they were told that hard cases might occur, he would affirm that if any so hard as that put by the Attorney General, of several successors dying in a week, really did occur, and if Succession Duty were known to be levied on each death, the public conscience would rebel against such an iniquity. The present Chancellor of the Exchequer, and indeed any Chancellor of the Exchequer, would not allow it to be paid; and if such a case were brought to the knowledge of Parliament, that would prevent the duty being paid, or, if it had been paid, would lead to its being refunded. A case of hardship which had already occurred had been mentioned, and in view of the possible recurrence of such cases, he trusted the House, despite the statement of the Attorney General that he was not prepared to meet them, would deal with the matter in a practical and equitable spirit.

said, the right hon. Gentleman had supplied an answer to his own argument by assuming that if an extreme case really occurred Parliament would not be indisposed to grant a remedy.

I was, of course, referring not to the case quoted by the right hon. Gentleman the Member for West Bristol, but to that put forward by the Attorney General of different persons succeeding to a property dying within a week. I said the public conscience would revolt at that.

said, the law to which the right hon. Gentleman the Member for Bristol referred had been in force for more than 100 years, and if any cases of practical hardship had occurred a remedy would have been demanded long ago. The fact was, these extreme cases were very exceptional, and they could not be legislated for. What it practically came to was that the last survivor had to pay for the benefit which he received by the extinction of intermediate interests upon which Legacy Duty was properly payable. That had been the principle of the Legacy Duty which had stood fire for 100 years, and he was not prepared to alter that principle now; and, therefore, he could not accept the proposed Amendment.

said, the speech of the Chancellor of the Exchequer was brief and intelligible, and the only criticism he would make upon it was that the right hon. Gentleman had contented himself simply by stating that the law had been in existence 100 years. He had not dealt with one of the arguments advanced by the right hon. Gentleman the Member for West Bristol. The other speech from the Treasury Bench was a much more elaborate one, and he found it very difficult to criticise it, because the Attorney General seemed unconsciously to involve himself in the technicalities he affected to avoid, and wrapped up his argument in phrases which were nothing if not technical, and from which his meaning had no chance of emerging into the light of day. He claimed to be the one untechnical man in a technical House of laymen. It reminded him of the question sometimes raised by men of unsound mind as to whether they were not sane and the world generally mad. The conflicting parties in the controversy had never been able to settle the dispute to each other's satisfaction, and so in like manner the question of the Attorney General's untechnicality would remain undecided. If it were right to do as we now did under the present Succession Duty—namely, not to charge for every intermediate life which had not enjoyed the property—then it could not be right to charge Legacy Duty in every such case. If it were right to charge Legacy Duty, then Succession Duty ought to be charged. To make a man who succeeded to a property pay Estate Duty upon a series of intermediate lives, not one of which had enjoyed a sixpence, was not only inconsistent with the Succession Duty, but was inconsistent with obvious justice. The principle had not stood the fire of criticism for 100 years, because it had long been recognised that our whole system of Death Duties was anomalous, and no one had thought it worth while to criticise them in detail except for Party purposes. Those who had had to deal with our finance had wisely thought it prudent not to touch these duties until they could be dealt with broadly, and at last we had a heaven-born Chancellor of the Exchequer who essayed to do it. Certainly he told them that the Legacy Duty did not happen to be a subject which his great scheme was to deal with, and that he meant to leave it in the anomalous position it had always occupied. He would point out that, anomalous as the duty was in its existing incidence, it would be ten times more anomalous and burdensome under the changes introduced by the Government. It was monstrous that in such a case as that mentioned by his right hon. Friend payment should be made on the lives of four people who never enjoyed the property at all; but, at all events, the beneficiaries in that case only paid on the life interest of these four people. What were the Government doing? As he was advised, they were altering the law so that in future in such a case as that the payments would have to be made not on the life interest, but on the capital value in all the four cases in regard to each of the individuals. He said this on the authority of his hon. and learned Friend (Sir R. Webster), who, no doubt, would defend his view. His hon. and learned Friend's opinion was that not only would they leave this gross anomaly and injustice uncorrected if they refused to accept the Amendment, but that they would add to them a new injustice in that the duty would be charged not on the life interest of the various persons who never enjoyed the property, but on the capital value, supposed by a technicality to pass on each separate occasion through a whole series of those persons who died under age. How was this to be justified? The Attorney General had told them that the whole scheme was analogous to the Estate Duty. All through their arguments the Government had said, however, that the Estate Duty was to be paid on one principle and the Legacy and Succession Duty on another; therefore, it was absurd to bring forward in defence of the Legacy Duty these points as to the Estate Duty. He thought their theory as to the Estate Duty was unjust and absurd; but that was not the point. The point was whether it should be transferred to the Legacy and Succession Duty from which the Government had always distinguished it. The Opposition were of opinion that they had here anomalies which it was possible to deal with. Their case was that hardships would be produced, and that the Government did not deny it. The Opposition proposed a remedy against which no argument had been advanced, and they asked in the interests of unification of the law, in the interests of common justice, and in the interests of a plain interpretation of the equities of the case which, he thought, in spite of the Attorney General, they ought to aim at, that the Amendment of his right hon. Friend should be accepted or some other Amendment which would have the effect of preventing cases as grossly unjust as that his right hon. Friend had brought before the House over and over again. He hoped that the Government, if they meant to accept this Amendment, would at all events condescend to argue the case. Do not let them put hon. Members off either with the cloudy technicalities of the senior law officer, or with the brief, though he admitted concise, appeal to precedent of the right hon. Gentleman the Chancellor of the Exchequer. Let the Government argue—as he was sure they could if they chose—in favour of their own proposal, and show that it was in accordance not merely with the practice of the past 100 years, but with the principles of equity by which they professed to have been animated in reconstructing the whole system of Death Duties.

was understood to say that he was not confident of being able to explain this matter to the satisfaction of the right hon. Gentleman, seeing that his colleagues, who were far more competent than himself, had failed. However, he would endeavour to answer the right hon. Gentleman. The right hon. Gentleman asked if it was true, as his right hon. Friend had stated, that the rule as to Succession was distinct from the rule as to Legacy Duty. It was true that there was a distinction, and that in certain cases a series of Legacy Duties had to be paid. This rule in regard to legacies, to his mind, was fair and just. He failed to see the hardship in the case of a man standing, say, fifth in succession coming in, through the death of four other people, to £100,000 being asked to pay the duty on the four lives. If he stood fifth in succession he should think his chance of enjoying the money very small, and if, from the position of having an expectancy worth practically nothing, he came into possession of £100,000, he should be perfectly willing to pay the Legacy Duty in regard to lives of predecessors who, unfortunately for themselves, had not lived long enough to enjoy the money they came into. He thought it quite fair, there being three legacies passing from A to B and from B to C and from C to D, that the Legacy Duty should be paid by the ultimate successor in respect of each life. It was a case that would not often arise, and the man would be exceedingly fortunate in coming into the property. The right hon. Gentleman opposite did not seem to think that precedent was an argument in favour of this, but yet this had been done without a sense of hardship or grievance for 100 years in the case of Succession Duty. If the Government had endeavoured to remedy every dissimilarity that existed on various kinds of property within the compass of one Bill, the time that would have been required to pass the measure would have been enormous.

said, the Chancellor of the Exchequer had suggested that this was an old tax and an old system, but he thought the argument by which the right hon. Gentleman and the Solicitor General had defended it was a new argument, and that was, that they were to tax a man according to his luck. They were going to tax the last man all that the others would have had to pay simply because the others had rendered him the service not of leaving him the money, but of having died. The position of the Government seemed to be that it was fair to tax the last man because he had been so lucky. They seemed to say that he should not look a gift horse in the mouth, but should be glad to pay the duty in respect of all the intermediate persons. He should be grateful to them for the services rendered to him. He (Mr. Goschen) could not admit that it was fair to tax the intermediate persons who never received any enjoyment whatever—who, in fact, might never have been aware that the property was coming to them at all. This was an extraordinary proposition, and one that they could not agree to. No doubt the anomaly had existed when he was Chancellor of the Exchequer, but the Bill added another anomaly to the list that taxation already presented, and he submitted that no more important duty attached to the office of Chancellor of the Exchequer than that of removing, whenever possible, instead of perpetuating, anomalies and hardships in our system of taxation.

said, he was extremely glad the House had an opportunity once more of expressing an opinion on this point. He himself had raised it in Committee, and he was extremely glad that the right hon. Member for Bristol had put the clause down again. He must remind the Solicitor General that the answer he had just given was, as he understood it, a very different one to that he had given in Committee. The new clause dealt with two matters, Succession Duty and Legacy Duty, and it was necessary that these two things should be kept entirely distinct. He would, in the first place, deal with the Succession Duty, as to which he had not heard the whole of the arguments of the Attorney General, but he had heard the answer of the Solicitor General. With regard to the Succession Duty, he understood that the only difference that had been made by the Government was that the duty should be calculated on the capital value instead of on the life interest. The Leader of the Opposition had pointed out that the Bill would accentuate the hardship of the method in which the tax was at present being levied. Under the old system it was thought advisable to insert Section 14 in the Succession Duty Act of 1853. The clause now proposed was a repetition in connection with the new Succession Duty of the provision of that 14th section of the Act of 1853, and he did not hesitate to say that if it was necessary in the former Act it was all the more necessary in the present Bill. It was stated that the protection they required was already given in the Bill. That could only refer to Clause 18, and he (Sir R. Webster) had been asked whether he thought the words which had been inserted in that clause were sufficient to meet his point. The best opinion they could get was to the effect that they were not sufficient. They did not render the Bill clear on the point in question. It looked very much as though the right hon. Gentleman the Chancellor of the Exchequer were leaving himself a door open for the future. He did not tell them whether he approved of the Legacy Duty Law or the Succession Duty Law. He said he was satisfied with the Legacy Duty Law as it had existed 100 years, and, therefore, he did not propose to disturb it; but here they were face to face with the question in connection with the new Succession Duty. Did they intend the old Succession Duty Law to apply or not?

^* : I do not alter it. What the Amendment proposes is to alter the Legacy Duty Law.

said, that showed the point of his observation that the two things should be kept distinct. With regard to the succession, the clause as it now stood would render it possible for a future Government to hold that the old Legacy Duty Law applied under this Bill in cases of simple succession. The Government ought not to be content to leave the Legacy Duty in the same anomalous condition as it was in before this Bill passed into law. They should either substitute some other duty for it, or else assimilate it to the new law. No one asked the Government to reform the whole of the Death Duties—to go into every hole and corner and rake out every grievance, But the same rule should apply in the case of succession legacies as were intended should apply to Succession Duty. The Government had stated that they intended to make no alteration in the application of the law as now laid down in Section 14 of the Succession Act of 1883. The Solicitor General had said that it was not necessary to repeat that section here, and he (Sir R. Webster) was bound to accept the hon. and learned Member's dictum.

Question put.

The House divided:—Ayes 193; Noes 231.—(Division List, No. 153.)

said, he wished to propose a new clause enabling land to be taken in lieu of duty in certain cases. It would be remembered, he said, that he raised that suggestion in the course of the Debate on the Second Reading of the Bill. It was his intention to have moved an Amendment giving effect to it in Committee, but it so happened that a general and wider Amendment which preceded his was held to include that branch of the subject with which he proposed to deal, and he was consequently prevented by the Forms of the House from carrying out his intention. In the first place—now he had the opportunity on the Report stage—he would endeavour to explain as briefly as possible what would be the effect of his proposal. In the first place, it related solely and exclusively to agricultural land, and the definition of such land was that given in the Small Holdings Act of 1892. In the case of such land, where an owner found himself, by reason of circumstances connected with a particular estate, in such a position that he had no means whatever of paying the duty with which he was charged, except by a forced sale of the land, be proposed to allow him to require the Commissioners to make a valuation of any specified part or parts of any such land separately; the Commissioners thereupon to make such separate valuation, and give particulars thereof to the owner of the land, who might call upon the Commissioners to accept, in lieu of the duty, the transfer of so much of the land as was equivalent to the duty which he would otherwise have to pay. The next stage was that the Comptroller of Inland Revenue was to be the trustee of the land, and the title to it should be registered at the expense of the Commissioners of Inland Revenue. Of course, if it were found that the title was not good the arrangement would fall through, and the Commissioners would still have full power to recover any duty that might be due. That was, briefly, the effect of the proposed new clause. He was perfectly well aware that he was advocating a novel principle in our legislation in this country, though it was not novel, he believed, in our colonies and in other countries. The reason why the clause related almost exclusively to agricultural land was because land at the present time was in a wholly exceptional position, and owing to the great depression from which agriculture had been suffering for a great number of years it differed from almost every other kind of property. A very large proportion of the landed estates in this country were encumbered with mortgages and other charges; and, though in many cases there was a margin left, it was often wholly inadequate to enable the owner to raise upon the security of that margin the sum which might be necessary to pay the Estate Duty. While, at the same time, it was impossible to borrow for that purpose, land was practically unsaleable, and the owner would be forced to sell at a time when practically there was little or no market for land of this description, and the owner might be compelled to take a nominal sum for his estates. In fact, he was apprehensive that this tax would become what was foretold by the right hon. Member for Midlothian—nothing but an engine for the dispossession of the owners of property. The right hon. Gentleman the Member for Midlothian had pointed out that taxation of this kind on the capital value of the land would be unjust, unwise, offensive, and odious in the extreme; and he had never heard any attempt on the part of any Minister on the Treasury Bench to meet that statement. It might be said, in reply to his remarks, that if there were no market for the sale of the land no duty would be imposed. But that theory, which the Chancellor of the Exchequer was perpetually putting before the House, was wholly unsatisfactory, because it was left to the Commissioners of Inland Revenue to decide what the valuation should be, and he was persuaded that if there were any margin at all—no matter whether it was useless for the purpose of raising money to pay the duty or not—the Commissioners would never consent to the estate being held as of no value. That raised another question which supplied a most admirable argument in support of the proposition he was making to the House. Any valuation, under the circumstances, must be a matter of the greatest delicacy and difficulty; and the greatest hardships were not only possible, but extremely probable. For arriving at a fair valuation to both sides, could any better plan be devised than that which his Amendment suggested? The Commissioners would naturally not put too low a value on the land; and they would be debarred from putting too high a value on it by the liability to take the land at their own valuation. It might be said in answer to his proposals that they would bring about the very thing he objected to—namely, the dispossession of the owner of property. He admitted that to some extent, even under this Amendment, the dispossession of the owner of land would be inevitable, but that was not his fault, it was the fault of the Bill; and while under the Government's proposal the owner would probably be dispossessed of the whole estate, under the Amendment, if it were accepted by the House, he would only be dispossessed of a part. The right hon. Member for Midlothian, in introducing his Budget, recognised enormous difficulties in dealing with real property, and used very conciliatory language on the point. He said—

"As long as the equal contribution of all kinds of property was kept intact, we have a very open mind as to the method of giving effect to the principle."

He asked the Chancellor of the Exchequer to keep that open mind now, and to give effect to it in this particular case. His Budget was likely to give rise to most serious and cruel cases of hardship, aye, and even of gross injustice. Could he not, in order to meet such cases, accept the Amendment, or frame some plan which would meet such cases? The right hon. Gentleman had taken the great principle of graduation from the example of the Australian Colonies. Why not take another principle from them? He would explain what that principle was. He had in his hand the Land Tax and Income Tax Assessment Acts, 1891 and 1892, of New Zealand, and the House would find that not only were they very interesting, but that they bore on the point he had been laying before the House. These two Acts, which were amalgamated, laid down a procedure to be followed in cases where there was a difference between the landowner and the Commissioner as to the value of the land to be taxed. If the Commissioner were dissatisfied with the owner's return, if he thought it too low, he could make an assessment; and if the owner did not assent to that, the Commissioner could recommend the Governor within 30 days to acquire the land at that assessment. If the owner accepted the notice well and good, the valuation was made in the manner prescribed in the Act, and there the matter ended; but if, on the other hand, he did not consent, then the Governor might, within a reasonable time, declare, by Order in Council, that the land was vested in Her Majesty. But the owner had these safeguards. He could appeal to a resident Magistrate to determine the fair actual value of the land; or he could give notice to the Commissioner that he required him, in the event of his refusing to reduce the assessment of the amount specified in the Return, to acquire the land at the assessment which the Commissioner had made upon it. Thus an automatic system was set up which was calculated to ensure the fairest valuation as between the two parties. He ventured, therefore, to suggest to the right hon. Gentleman, as he had taken one principle for the Australian Colonies, he should follow their example in another respect, because such a system, if adopted in the Bill, would give the greatest possible safeguard to the owners of the land for fair treatment; and no one could deny that under the Bill as it stood they would be liable to much hardship and injustice. After all, this was but the merest act of justice, and it would relieve owners from an intolerable difficulty which he was sure that Parliament would not willingly inflict upon them. For the necessity of such a proposal as that which he made the Government were responsible. The Government had apparently chosen to ignore the statements made over and over again by the great master of finance in this country, the right hon. Gentleman the Member for Midlothian, as to the insuperable objections to taxation being levied on the capital value of land; and, therefore, they could not be surprised that the landed interest should take every legitimate opportunity of making proposals for their relief from the heavy burden placed on them. His proposal would have this advantage: that it would give the Commissioners of Inland Revenue some measure of practical insight into the great difficulties of the agricultural situation, which he did not think they half realised at the present time. There was another matter to which he wanted to call the attention of the House. It was an object for which he had provided expressly in the Amendment he was about to propose, but he understood from the Chair that it would not be proper for him to move the last clause of his Amendment. That, in his opinion, made very little matter. The object he had in view was to call upon the Commissioners of Inland Revenue, when they had acquired land, to give notice to the Local Authorities that it would be at their disposal in order to facilitate the distribution of land amongst a greater number of people, and for the provision of allotments or small holdings. Whether that was included in the Bill or not really did not matter, because the Government would have the same opportunity of offering the land for these purposes to the Local Authorities. He hoped most earnestly they would use their power, because if this Amendment was accepted—and he was sanguine enough to hope it would be, judging from the reception it met with from gentlemen sitting on the other side of the House, and from the fact that there seemed to be a general feeling of sympathy with it—one of the effects would be that land would be coming into the market in all parts of the country, which in all probability would be specially adopted for the purposes of allotments, in quantities which would, no doubt, largely facilitate the distribution of land. And although he had advocated this proposal chiefly on the ground that it did but bare justice to the owner of land, and to enable him to escape from the position of intolerable hardship in which he was placed under the Bill, yet he could not shut his eyes to the fact that it would bring with it the other advantages he had enumerated, and under all the circumstances he commended the Amendment with confidence and hope to the consideration of the House.

New Clause—

(Land to be taken in lieu of payment in certain cases.)

"Where any part of the estate consists of land used for the purposes of agriculture, or cultivation within the meaning of "The Small Holdings Act, 1892," and the owner of the land is able to show to the satisfaction of the Commissioners, or to the High Court upon appeal, that he is unable to pay the Estate Duty in respect of such land otherwise than by a forced sale of the same, or of part thereof, he may require the Commissioners to make a valuation of any specified part or parts of such land separately; and the Commissioners shall thereupon make such separate valuation, and shall give particulars thereof to the said owner of the land.

Such owner may at any time within twenty-eight days after the said particulars have been received by him give notice in writing to the Commissioners that he requiries them to accept, in lieu of the duty or of any part thereof payable in respect of any land of the description in this section mentioned, a transfer of such portion or portions of the land to which the said particulars relate as will, taken at the value placed thereon by the Commissioners, be an equivalent to the said duty.

The Comptroller of Inland Revenue for the time being shall, by virtue of his appointment, be 'the Inland Revenue Trustee,' and such trustee shall, for the purpose of taking, holding, conveying, and transferring any land which shall become vested in him in pursuance of this section, be a corporation sole by the name of 'the Inland Revenue Trustee.' and shall have perpetual succession.

The Commissioners shall, upon receiving the notice in this section mentioned, be deemed to have contracted to acquire the land specified in the notice for the sum stated in the said particulars to be the value thereof, and the owner of the land shall forthwith apply, under 'The Land Transfer Act, 1875,' or any Act amending the same, that the Inland Revenue trustee may be registered as proprietor of such land with an absolute title, and shall do, or cause to be done, all acts, matters, and things requisite or proper for effecting such registration.

If such registration is effected all costs, charges, and expenses properly incurred by such owner in effecting the same shall be recoverable by him from the Commissioners, and may be deducted out of any sum payable by him for Estate Duty in respect of any property passing upon the same death.

If the said application to register fails, then the Commissioners shall have the same right to recover Estate Duty in respect of the said land as if the notice mentioned in this section had not been given.

Whenever land shall be registered in the name of the Inland Revenue Trustee as proprietor with an absolute title in pursuance of this section, such land shall be accepted by the Commissioners, so far as its value as specified in the said particulars shall extend, in lieu and in satisfaction of the Estate Duty payable in respect of any land of the description in this section mentioned forming part of the estate, and the provisions of this Act shall apply with the necessary modifications as if the said duty had been paid in money.

Where land has become vested in the Inland Revenue Trustee in pursuance of this section, it shall be the duty of the Commissioners to give notice to the Council of every parish, district, and county in which such land is situate that applications may be made to the Commissioners for the acquisition of such land, or any part thereof, for the purposes of allotments or small holdings, and such Councils may proceed for the acquisition of such land for the purposes aforesaid under the powers conferred on them respectively by the Allotments Acts 1887 and 1890, 'The Small Holdings Act, 1892,' and 'The Local Government Act, 1894,' or any of them."—( Mr. Chaplin .)

Clause brought up, and read first time.

Motion made, and Question proposed, "That the Clause be read a second time."

I am perfectly convinced of the entire sincerity of the right hon. Gentleman when he says that he bases the proposal of this Amendment exclusively in the interest of agricultural land.

I said I advocated it mainly, not exclusively, in order to relieve the owners of land from the intolerable injustice and hardship that would inevitably be inflicted upon them in the future.

Why are the owners of land alone to be relieved of this intolerable hardship? The right hon. Gentleman never thinks that hardship occurs to anybody in the world but the owners of land.

None like these!

The right hon. Gentleman says "None like these." But suppose a man is the owner of a number of shares which he finds a difficulty in selling, the principle of this Amendment and every word of it applies equally to him. Is he to go to the Inland Revenue Commissioners and say "I can't sell my shares, and therefore you may value them and take them and keep them"? Take the case of ironworks. Very often they do not pay any more than agricultural land. But it never enters into the minds of hon. Gentlemen opposite that any class in this community has any difficulties except the owners of agricultural land. I want to know, in the case of a mill-owner who cannot pay Death Duty except by a forced sale of the mill, why he is not to go to the Inland Revenue authorities and say, "Take my mill; keep it, or sell it if you like." It is difficult to argue such a question seriously. The real truth is, there are other classes in this community that have suffered quite as seriously and quite as long as the owners of agricultural land. Why is a debt to the State to be put on a lower footing than a debt to anybody else? Are you going to ask your butcher and your baker to take a piece of your land in liquidation of your debt? I will put an illustration that will appeal to the right hon. Gentleman. Are you going to say to Mr. Tattersall or Mr. Webb, "I cannot pay my bill at this moment for the engagements of my horses. Take a piece of my land in discharge of my debt to you."

I should be responsible for the engagements of my horses. But in this case the Government is making my engagements for me.

Therefore, a debt to the Government is to be repudiated in this form, and you are going to give to the Government this security which you will not give to an ordinary debtor. In my opinion, a debt to the State is quite as high as, if not higher than, any contract debt. Are you going to put a debt to the State in this position only in the case of agricultural land? The state of mind of gentlemen who seriously make propositions of that kind is to me wholly unintelligible. They really seem as if they were the inhabitants of a different planet altogether, and expected to be placed under different conditions to everybody else. What is the Inland Revenue to do with this land when they get it? The right hon. Gentleman says it may be sold to Local Authorities. But if the Inland Revenue can sell it, why cannot the owner sell it? Does the right hon. Gentleman seriously in the House of Commons make the proposal that the Inland Revenue authorities are to take this land all over the country? I have the highest respect for the Commissioners of Inland Revenue, but this is about the last work I should be disposed to ask them to engage in. When the right hon. Gentleman says the land is to be valued, I suppose he means it is to be valued at its selling price. But why cannot the owner sell it himself? If it is to be taken by the Inland Revenue authorities at its selling price, it is on the assumption that the owner can sell it at quite as much as the Inland Revenue. This subject was discussed in Com- mittee, and there was really no attempt to support the proposal. We cannot agree to put agricultural land on a different footing to any other property which there is a difficulty in realising. We cannot put a debt to the State on at lower footing than a debt to any other creditor. For both these reasons it is absolutely impossible that we can entertain this Amendment.

said, the Chancellor of the Exchequer asked why the land should be put upon a different footing to any other security. Why it should be put upon a different footing with regard to payment of the Death Duty was that land was not a marketable security.

Nor are ironworks.

, continuing, said, that while land had always a certain value, it was not a marketable security. In that respect it differed from other descriptions of property, and they therefore were entitled to ask that the Government in levying the Death Duties should apportion the estate, and take a portion of it which they might realise when they could. His right hon. Friend had pointed out that a similar condition to that which he proposed was carried out in the colonies, and he could see no reason why it should not be adopted in this country. In fact, seeing the eagerness which hon. Gentlemen opposite had shown to secure land for allotments for the agricultural classes, and the difficulty they alleged there was in obtaining it, he was surprised that the Chancellor of the Exchequer had not gladly taken advantage of the proposal. It would afford him an easy way of obtaining land, and the desire for allotments would afford him an easy way of disposing of it. There was not an acre of land in the country which did not pay taxation under Schedule A of the Income Tax; therefore, all land had a value, though it could not be realised for the moment. But the case was altogether different in this respect with regard to shares and such-like property, and the two classes of property could not be put in comparison. He thought the proposal made in the new clause was a very reasonable and practicable one, and hoped the House would adopt it.

said, he seldom remained in the House to listen to the speeches of hon. Members opposite because it seemed to him they always said the same thing. They did not understand what the connection of land and value was. He did not know whether the hon. Gentleman who had just sat down owned any land, but if he did he was prepared to give him the coin he had in his pocket for it. What hon. Gentlemen opposite meant by land being unsaleable was that they could not get what they wanted for it. Hon. Gentlemen on the other side appeared to be under the impression that it was the business of the country to maintain estates from generation to generation in the same hands. His own opinion was that it was a matter of absolute indifference to the State whether an estate remained in the same family or passed on to others. He was one of those who thought it was desirable that estates should be handed over occasionally to others. He would do as a French Judge did on one occasion during the Revolution, who had two persons come before him in a dispute about the ownership of an estate. One of the litigants said, "This estate has been in my family for ten generations." The Judge replied, "Say no more. Your family have had their turn of it. Turn the estate over to the other side." [ Laughter .] He did not go so far as that, for he was not one of those persons who believed that the land should be handed over to other people, but hon. Gentlemen opposite seemed to go to the extreme in the other direction. If the proposal of the right hon. Gentleman was adopted with regard to land they would have to carry it a great deal further. We should have the tea merchant handing over his tea because the market for it was not good. Let them take the case of newspaper proprietors. They would be very glad if the Chancellor of the Exchequer would introduce a clause enabling them to pay their Death Duties and Income Tax in copies of their newspapers, old copies that would not sell by preference, but which had a value as waste paper. The whole argument on the part of hon. Members opposite was nonsense, and proceeded upon an altogether erroneous basis. The landed interest had for generation after generation managed to arrange matters in regard to taxation for their own benefit. The Chancellor of the Exchequer had brought in a good, sound, democratic Budget, and he was very glad that the right hon. Gentleman was going to make the landowners pay like the unfortunate owners of newspapers and such-like unhappy people. Amendments were put forward day after day based on the idea that some concession ought to be made to landowners simply because they were landowners. He had no desire to do them injustice, but surely they were not entitled to exceptional treatment.

The hon. Gentleman has made an excellent speech; but I think he must have mistaken his audience. The hon. Gentleman must have been rehearsing some performance subsequently to be placed before his friends at Northampton. For a Northampton audience, or for the hustings, it might be an appropriate performance; but as a speech or argument made in a serious spirit to a serious Amendment it was a singularly poor contribution to this Debate. The hon. Gentleman, like the Chancellor of the Exchequer, has endeavoured to drag in, as he always does, some ancient controversy about the landed interest in this country, and he endeavours to hide under a cloud of words based on these old controversies his own want of real knowledge of the subject. I shall not follow him in that respect. I am not going to deal with this subject on any claims of the land to exceptional treatment, nor shall I argue a point which has been argued before, and may be argued again, as to whether land has received in the past specially favourable treatment in the matter of taxation. The hon. Gentleman has said that landowners have had the management of taxation in their own hands for many generations. The result is, that they have had far too heavy burdens, and the time has come for inequalities to be redressed. The hon. Gentleman has left out of account some heavy local burdens attaching to it, such, for example, as that of education, which has nothing to do with the land. When the hon. Gentleman can show that newspapers have made a similarly heavy contribution to the education of the country—when he can show that the back numbers of Truth have made the immense contribu- tion to the education of the people that the landowners have done, then he will be able to say that newspapers ought to be put on the same footing as landed estates. But I do not for a moment think that this general discussion about the burdens of land, or the distinction between personalty and realty, is at all relevant to the Amendment, nor were the arguments which were advanced to the House by the Chancellor of the Exchequer. The right hon. Gentleman appeared to think that there was something intrinsically ludicrous in the proposal of my right hon. Friend. That was a very delicate compliment to the democracy of New Zealand. I do not say that I approve of all the proposals for taxation which are adopted in the colonies, but I have never treated with insult and contumely the financial arrangements made in the colonies, nor do I think it consistent with the dignity of this House to do so. The right hon. Gentleman has asked what is the difference between land and such property as shares, or mills, or ships for the purposes of taxation. I will tell him. I do not attach much value to the argument that landed estates, as a whole, are unsaleable; because, if they are unsaleable, then, under this Bill as it stands, the Chancellor of the Exchequer would not have the right to levy a single sixpence of duty upon them. If the Inland Revenue authorities really carry out the provisions of this Bill, as of course they intend to do, and as the Courts of Law will compel them to do, then in every case in which it can be shown that a landed estate is unsaleable, that estate, on the death of the deceased, will not have to pay one sixpence to the State. So far I grant there is no particular hardship. But observe that in many cases under this Bill an estate will have to pay on the value arising out of it as a whole, though fragments of it might be wholly unsaleable. In the case of an estate which was subject to taxation under this Bill, a farm upon it might be wholly unsaleable. A similar state of things will not prevail with regard to other forms of property. There may, of course, be individual cases, such as that in which a great owner possesses, say, large ironworks; but such cases are rare. Great commercial concerns are nowadays mostly held by limited companies in shares, and those shares are saleable without any interference with the rest of the property, whilst the saleable value of the various fractions of the shares will be a measure of the saleable value of the property. In other words, if the capital value of certain ironworks is £100,000 and the duty on that is £6,000, the owner would be able to sell £6,000 worth of shares so as to pay the duty. It will be admitted that what is true of mills is also largely true of ships. Ships are constantly held in shares, so that it is possible to sell a fragment of a share without destroying the whole property. What, however, are you going to do with property which has a value as a whole but of which the fragments are unsaleable, and which, because there is a first and perhaps even a second mortgage upon it, you cannot raise another sixpence upon? That is a case which has to be met, and it is undeniable that it is a case of hardship. Of course, if there are cases in which large ironworks, or other works are held by individuals and not in shares, the hardship will be as great in such cases as in the case of a large estate, and if you can find a method of meeting such cases I will vote for it. As a matter of fact, however, we all know that day by day the number of great concerns that remain in the hands of private individuals is growing less and less. Great banks, great ironworks, cotton mills, and other commercial concerns are more and more being turned into Joint Stock Companies, and, as a consequence, their value is divisible in shares saleable separately in the market. I venture to think—only this is a parenthesis in my general argument—that landowners would do well to consider whether it would not be worth while to turn their estates into Joint Stock Companies. That is a plan which I think would have a great many advantages, and which would probably redound to the benefit of every class of the community and of everybody except the Chancellor of the Exchequer. I, doubt whether he would gain by the change, but I think it is one which landowners ought very seriously to consider, But, in the meanwhile, this plan has never yet been carried out, and you have this immense class of property which is not held in shares and cannot be cut up for the purpose of paying this duty. I quite admit that there would be no hardship in the case of a landowner as compared with the owner of any other property if he could sell, say, a tenth part of his property for a tenth part of the total value of the property; but that would not be the common case. The common case would be that a man would not be able to sell a portion of his estate to pay the duty on the whole of the estate, and in that case he would be subject to what everybody, except the hon. Member for. Northampton (Mr. Labouchere), will admit is a great hardship—namely, the sale of his property as a whole or else he would have to raise money upon it. I am told it would be extremely difficult to raise money if the land was already mortgaged, and the proportionate interest that would have to be paid would be very great. Where, therefore, is your equality of treatment between different kinds of property? You always utter a shriek of despair if real property is compared with personal property. Take, then, the case of a man who has got a mortgaged estate, the whole value of which for the purposes of duty depends on the amenity of the estate, and which would be destroyed if a portion of it were sold; and then take another estate consisting of building land, a small portion of which can easily be sold by the owner. The one man would either raise money on his building estate without difficulty or would sell his quarter acre or whatever the amount may be and pay the duty. The other man would be placed in the cruel position of having to part with the whole of his land in order to pay the 5 per cent. duty which the Government exact from him. To tell me that these two men are treated equally is to abuse my intelligence and to ask me to accept a position which every man here knows to be false. Now, I have made out that there is a real case of hardship for this particular kind of landed property, and no man in this House will have the courage to say that I have not done so. Whether my right hon. Friend's method of dealing with the case is the best one I will not say, but it is one that has been tried, which has worked practically, and which really meets the difficulty we have to deal with. For this reason, if my right hon. Friend goes to a Division, I shall certainly support his clause.

^* : I can hardly regard the speech of the right hon. Gentleman as a serious argument in support of a serious Amendment. He asked us at the end of his remarks to reply to his declaration that he has made out a case of real hardship, although he practically guarded himself against expressing approval of this particular mode of meeting that case. The only serious argument I could observe in the right hon. Gentleman's speech was the novel, the interesting, and perhaps fruitful suggestion that the landed estates of this country should be turned into Joint Stock Companies. That suggestion was given as an illustration of the contrast between landed property and such property as cotton mills and ironworks. I think the right hon. Gentleman is misinformed with regard to the latter class of property. I think that a large proportion of the great commercial enterprises of this country are at the present time in the hands of private owners. It is, of course, a question of opinion, but with some means of knowledge I certainly express that opinion. The right hon. Gentleman said that there was no alternative in the case of landed estates but the sale of the property in order to meet this charge. The Government by this Bill, however, have met that difficulty. They have put landed property in an exceptional position to all other property, by giving the owners of land eight years in which to meet the charge. The owner of personal property, such as shares or pictures, has not eight years in which to pay the amount, and, admitting that there is a possibility in specific cases of hardship on account of the sale of the estate for the purpose of paying duty, I think the eight years' system remedies that to a great extent. Well now, what does the right hon. Gentleman the Member for Sleaford (Mr. Chaplin) propose? He wants to prevent a forced sale. A mortgagee is not compelled to fall back on the property on which he has lent his money until he has had the advantage of a forced sale. The right hon. Gentleman says the Crown is not to receive payment of its debts if a forced sale is the only means of obtaining payment. Let me take the case of the mortgaged property to which the Leader of the Opposition (Mr. A. J. Balfour) has alluded. He says there will be a difficulty in raising money on the property in order to pay the duty. I will point out that there will be no duty payable except on the margin of the property after all the mortgagees are paid, and if the property be heavily mortgaged there will not be much duty to pay, while the owner will have eight years in which to make the payment. The right hon. Gentleman did not, after all, touch the question why the ownership of this specific class of property should be treated differently from the ownership of other property. There are difficulties of realisation whatever your property may be. The right hon. Gentleman appeared to express some doubt with reference to ironworks. I can tell him that within the last three weeks one of the most memorable ironworks in Staffordshire, and one which was subject some years ago to a well-known litigation—a property that cost hundreds of thousands of pounds, possessing a large amount of plant and machinery—was put up for auction, and not a man would make a bid for it. I believe the same thing would happen if a great many of the other ironworks in Staffordshire were offered for sale, and it is well known that waves of depression go over properties of this kind from time to time. I can tell the right hon. Gentleman that in the case of other property besides land it is much more difficult to sell part of it than to sell the whole. I do not, however, think it is so difficult to sell a portion of a landed estate. The estates that have been cleared off the register during the last three months, irrespective of the sales by auction, have been those that have been sold in small quantities which the tenants could buy. The difficulty is in selling the large estates and not in selling the small holdings. This Amendment would practically amount to enacting in other words that where a landowner does not choose to pay the Estate Duty no Estate Duty shall be payable. You might just as well ask the State to free from duty every other description of property which is liable to pay it. Even if you are not content to admit the force of this reasoning, you still have to show why the landowner is to be dealt with differently from other owners. The landowner has means out of the income of his property to pay in eight years the instalments of the duty. I am astonished at the right hon. Gentleman the Leader of the Opposition (Mr. A. J. Balfour) lending his great weight to the fallacy which underlies this Amendment. If it be wrong to impose duty on landed property at all, the wrong will not be evaded by proposals of this kind. If it be wrong, say so at once, and let us settle the question. If, however, you once admit it is a right and just thing to tax all descriptions of property, I do not see why you are to interpose insuperable difficulties in the way of recovering the payment of the tax.

said, that as one who had something to do with small allotments, he wished to say a few words. The Chancellor of the Exchequer had asked why this Amendment should be proposed with regard to the particular land it dealt with. Surely the wording of the Amendment snpplied the answer to that question. The Amendment applied to land that was held in small holdings under the Act of 1892. This was land with which the Legislature for special reasons of high policy which were acceptable to Members opposite undertook to interfere, and the very reason which justified the policy of 1892 justified the policy of this Amendment. The Chancellor of the Exchequer had asked what the effect of the Amendment would be upon the Inland Revenue Commissioners. The effect would be that they would be very careful to put a just and proper valuation upon land, because they would know that if they put an unfair value upon it they would be hoist with their own petard, and would have to take the land themselves. The fact was that landowners did not now have, and were not likely to get, a fair and proper valuation of their land. The hon. Member for Hampshire had referred to estates which nobody would buy, but there was no doubt that the Inland Revenue Commissioners put some value upon those estates. The hon. Member for Northampton (Mr. Labouchere), arguing that land was not unsaleable, said he would give the coin in his pocket for the price of the land. That was exactly what the Opposition said—namely, that land could only be sold, if at all, for a song. The hon. Member for Northampton had spoken of land being sold for the Death Duties. To hear the hon. Member speak one would suppose the hon. Member would not care if the entire estate was sold to pay the Death Duty. But what else would that be but confiscation? The policy of the Small Holdings Act of 1892 and of this Amendment were both designed for the purpose of facilitating the distribution of the land among the population. He believed that without an Amendment of this kind a very severe blow would be inflicted on the system of small holdings. When they went to their constituents hon. Members on that (the Opposition) side of the House would point out to the agricultural community that when they introduced a reasonable Amendment like this to protect the small landowner and ensure the distribution of the land amongst the people, it was the Liberal Government that opposed it.

said that the right hon. Gentleman the Member for Sleaford had admittedly brought forward a case of hardship. But the right hon. Gentleman the Secretary of State for India had objected to that case of hardship being met because, as he said, there was another case of even greater hardship. Suppose it were so, what argument was that against the case presented by the Member for Sleaford? No doubt there was great force in what had been said by the Secretary for India, but surely that was a reason for meeting the case he had brought forward and not for declining to meet the case brought forward by the right hon. Gentleman opposite. The case of creditors had been referred to. What happened when a man had the misfortune to become bankrupt. Why the value of the securities was called for and the creditor had the option of taking them over for the price at which he valued them. That system might be adopted in this case. If the Government valued the land at a particular sum why should they not take it over at that sum? They asked what was the difference between the owners' holding and the Commissioners' holding? Why, the difference was that the Commissioners could hold it as long as they liked and sell it at the most convenient time, whereas the owner would be obliged to sell to pay the duty. There was another reason in favour of the Amendment which had not yet been alluded to—namely, the facility it would afford for arriving at something like the true value of the land. If the Commissioners valued the land at a certain price and the owner did not choose to hand it over, that would be evidence that the Commissioners had not over-valued it. On the other hand, if the owner did not accept it, it would be evidence that the Commissioners had put a fair price on it. In his opinion, one of the greatest difficulties would be that of determining a fair price. It was in that that land differed so much from Stocks and shares. No doubt there were many Stocks and shares not saleable at all, but so far as the great majority were concerned their approximate value could be ascertained by looking at the Stock Exchange list. But they had absolutely no such facility for arriving at the value in the case of land. He believed that some such provision as that suggested by the right hon. Gentleman opposite would be of great advantage in arriving at a satisfactory value of land as between the owner and Commissioners, and if the Amendment went to a Division he should give it his support.

said, there was one other little practical point that seemed to have escaped those officially connected with the Bill—namely, that the main difficulty when they carried the Bill into, law would be to provide a market for land. The Government had been unable to see how directly the Amendment bore on the question of providing a market for the land. If land could be used for the payment of Death Duties they would multiply by ten the ease by which land could be bought and sold. If a man knew that he could buy a piece of land, and that when the proper time came it could be sold away from his estate he would be much more eager and willing to buy than he was at present. As the Bill stood, if a man bought land he would subject it to all the iniquities and hardships of the Government proposal; but if he knew that it would be broken off from his estate at his death and be made to pay the Death Duty, there would be more buying and selling of land than obtained at present, or would obtain after the passing of the Bill as at present drawn. Therefore, putting on one side the flippant nonsense talked by the hon. Member for Northampton, he submitted that by this Amendment they would be rendering land more liquid, so to speak—more easily bought and sold. They would be producing an effect which they wanted to produce, and doing that which was good instead of that which was evil.

Question put.

The House divided:—Ayes 147; Noes 187.—(Division List, No. 154.)

moved to insert the following Clause, after Clause 4:—

(Provision for Estate Duty by Life Insurance.)

"When the deceased has, during his own life, expressly provided for payment of the Estate Duty on any property passing at his death, or for any part of such Estate Duty, by insuring his life for that purpose, such sums of money as shall be payable to his estate under such insurance policy shall not be aggregated with any other property for the purpose of determining the rate of Estate Duty, and no Estate Duty shall be payable thereon."

His object was to except an insurance policy, taken out for the express purpose of paying Death Duties, from aggregation and graduation, providing that the premiums were properly paid during the life of the deceased. He thought it would be very hard indeed if, when a person had had the foresight and thrift to provide payment of the Estate Duty, that money should be brought into the property and aggregated in order to increase the scale of valuation. A person having a property might think it desirable to relieve the younger children from Estate Duty, and would not desire to impose the burden upon his residuary legatee or the person who inherited the property in land, and he therefore provided in this Amendment that the insurance, whether for the Death Duties of the whole of the property, or for a portion only, should not form part of the property passing at the death of the deceased. He thought it was a cruel thing to ask a person not only to pay the Estate Duty by instalments during his life, but also to ask him to pay a second and increased duty when they aggregated this property; therefore, in justice and fairness any money provided by insurance for the payment of Death Duties ought to be exempted from being added to the estate for purposes of Estate Duty. The answer given by his hon. and learned Friend the Solicitor General, during the course of the Committee, showed what he thought was the equity of the case, because according to his answer he thought it was not included under the Bill, therefore he (Mr. Heneage) would ask the Chancellor of the Exchequer whether he did not think it would be better to omit these policies, earmarked for the purpose, from the process of aggregation? From a Treasury point of view he thought it would not be a bad precedent, for by inducing people to be thrifty they would prevent a great deal of what had been contemplated as likely to take place under this Bill. It had been said that houses might be shut up, labourers thrown out of employment, and thus the revenue from the Income Tax would be reduced. He hoped the right hon. Gentleman would favourably consider what he could not help thinking was a perfectly fair Amendment. It would induce the keeping together of capital both in landed estates and in commercial undertakings which would in itself be a means of increasing the Revenue, as that would increase the amount payable by way of Income Tax. It would also have the advantage of encouraging thrift amongst owners of property, and for all these reasons he hoped the right hon. Gentleman would see his way to accept the Amendment.

New Clause—

After Clause 4, to insert the following Clause:—

(Provision for Estate Duty by life insurance.)

"When the deceased has, during his own life, expressly provided for payment of the Estate Duty on any property passing at his death, or for any part of such Estate Duty, by insuring his life for that purpose, such sums of money as shall be payable to his estate under such insurance policy shall not be aggregated with any other property for the purpose of determining the rate of Estate Duty, and no Estate Duty shall be payable thereon."—( Mr. Heneage .)

Clause brought up, and read the first time.

Motion made, and Question proposed, "That the Clause be read a second time."

, who was very imperfectly heard in the Gallery, was understood to say that the difficulty about this Amendment was the same difficulty that they had often stated before in respect of the dealings with insurances on a different footing from that of any other provision. There were some people who were able to insure, and when they could do so it was a good thing, but there were other people who were not able to insure. As he had pointed out before, there were a good many people who might be compelled to employ their money by putting it into their businesses, and therefore why should they give this preference to this particular method of making a provision? If a man had property, clearly that property was available for the payment of duties. It might be more convenient for a man to save the money to pay those duties by other means than by insurance, and they ought not to put those other forms of saving at a disadvantage as compared with insurance. Therefore, for the same reason they were not able to accept previous Amendments, they could not accept the proposal of the right hon. Gentleman.

^* said, he was very sorry the Chancellor of the Exchequer was unable to give some favourable consideration to the proposal, though he agreed with him in thinking that there was something to be said against making a special exception in favour of insurance, as distinguished from other kinds of saving. Still, as had been pointed out in the course of the Debates on this Bill, insurance would be the best and proper way of making provisiou for the payment of the largely-increased duties which were sanctioned by the Bill. It was also the easiest way, always provided that the person was in a position of health and at a time of life to insure upon reasonable terms. There was this difference between this and other kinds of provision—if a man insured, he was practically bound to continue the payments till his death; but, if he merely put by a sum annually, he was tempted to utilise the money in some other way. But he would take the argument from the Chancellor of the Exchequer's own point of view. He contended that any sum put by, whether by insurance or savings, alienated for the purpose of paying Death Duties, ought not to be aggregated with the rest of the property and ought to be free from the payment of duty. As the Chancellor of the Exchequer had shown himself so fond of precedent to-night he would venture to offer the precedent of the Legacy Duty. He believed he was right in asserting that a fund allocated for the purpose of Legacy Duty was not itself liable to Legacy Duty, and he believed that under the existing law the same principle would apply to Succession Duty. Then why could not the Chancellor of the Exchequer take that precedent when it was favourable to the tax payer and apply it to the Estate Duty as he was ready to apply precedents not favourable to the taxpayer, but which the right hon. Gentleman considered favourable to the Exchequer? He hoped even now it might be possible for the right hon. Gentleman so far to reconsider this matter as to promise to make some proposition in the Bill, before this stage was finally concluded. He hoped the Government would consider with favour what he thought was the very reasonable principle laid down by his right hon. Friend, the only objection to which that had been raised was that it did not go far enough.

said, perhaps he might be allowed to say, by way of explanation, that he would favourably consider any scheme that could be provided, before the Bill left the House, by which a fund could be set apart for the express purpose of paying Death Duties, and which should be inalienable. He hoped the right hon. Gentleman the Member for Grimsby (Mr. Heneage) would be satisfied with that.

said, the statement of the right hon. Gentleman the Chancellor of the Exchequer was important, and it was well they should know what it amounted to. He did not wish to show any distrust of the right hon. Gentleman, but they did not hear very clearly what it was the right hon. Gentleman said. As he understood the right hon. Gentleman, he was favourable to any scheme which exempted from taxation for Estate Duty a fund expressly provided for the payment of Death Duties.

Yes, a fund that is so absolutely secured as to be inalienable.

said, he understood the right hon. Gentleman that if a fund were provided for the express purpose of paying Death Duties, the right hon. Gentleman would look upon that proposal with favour, and see if he could not exempt it from Estate Duty. He thought his right hon. Friend the Member for Grimsby (Mr. Heneage) would do well to accept that proposition.

was understood to say that the Motion must be withdrawn.

said, that if they went to a Division it might be held that a provision of that sort had been negatived by the House, and he wished the mind of the Chancellor of the Exchequer to be kept perfectly open; therefore he thought his right hon. Friend would act wisely in accepting the suggestion, and withdrawing the Motion, rather than pressing it to a Division.

said, he was quite prepared, under the circumstances, to withdraw the Motion.

said, he felt so strongly the desirability of obtaining some concession from the Government that he joined his right hon. Friend in urging the withdrawal of the Amendment. He sincerely hoped the right hon. Gentleman would not put them in the position of having the question excluded from all consideration at a future stage. He thought they were all agreed as to the condition that the money should be inalienable so far as the sum that was required for the Estate Duty. Any amount above that required for the Death Duties the State would consider as property belonging to the other property to be aggregated. For his part, he would be glad to see the exemptions extended to all forms of savings, and further to see that that part set apart for the payment of Death Duties should not be available for disposition by the owner for any other purpose whatever, and that the residue should be available for aggregation. Like other hon. Members, he felt that in many cases the burden of making this provision would be a very heavy one, and fall in many cases upon men who had lived a considerable part of their lives already, and had come to a time when they could only make this provision with very great difficulty, and it seemed a great hardship not merely to call on them, in some degree, far in excess of Self-denial, but also to cast on his successors additional taxation. He hoped that during the report stage the Chancellor of the Exchequer would either suggest himself some method or accept some suggestion which would relieve money which was distinctly earmarked as money provided for the payment of Death Duties from aggregation, and thereby lighten the burden which would fall upon those who could only provide this money by acts of self-denial.

^* ventured to ask the Chancellor of the Exchequer to consider this proposal favourably before the further clauses of the Bill were reached. The proposal would, he believed, materially assist in meeting a difficulty that would certainly arise in districts such as he knew in Lancashire where a large proportion of leasehold cottage property is owned by the working classes, and in other districts small farms were held by the same class. No form of investment was more popular among the working classes of Lancashire than this cottage property, and it would be found that in Lancashire Town the larger portion of cottage property was owned by this class. From experience he had had he was convinced that considerable difficulty would arise among this class and to the Inland Revenue when on death taking place money had to be raised to meet the Death Duties. These small owners being exceedingly thrifty would, he felt sure, avail themselves of such a provision as was proposed by the Amendment; he believed the great bulk of these would insure their lives specially earmarking the policy as providing for the payment of Death Duties. A few years ago a considerable amount of cottage property came into his possession, and this he privately sold to men in his employ. In every instance the men paid about half the purchase-money, borrowing the remainder from Building Societies in the town. It would be perfectly impossible for these men within a short period to raise a further amount, to effect a further mortgage for the purpose of paying the duties payable on death. But in such a case, if this proposal were adopted—and such cases would often arise, for when this class of property was offered for sale it was usually purchased by working men—a provision such as this would be largely availed of, and no difficulty would arise. He admitted there ought to be a stringent provision for earmarking the policy so that it could not be alienated; and no doubt the right hon. Gentleman (Mr. Heneage) would concur in that. He hoped that before the consideration of the Bill closed the Chancellor of the Exchequer would see his way to meet the desire he was sure was felt on both sides for some such a proposal as this.

considered it would be of great advantage to persons who were trying to make a start in life and to become the owners of a little property if this provision were adopted. Speaking for the class who were just a little above those who bought cottage property—namely, the purchasers of their own farms, he would point out that they did not pay the whole sum, but left a heavy mortgage on a large portion of the purchase-money, and to expect them to pay Death Duties would be not only an impossibility but almost an absurdity. The adoption of some such proposal as that suggested would really put more money into the pocket of the Chancellor of the Exchequer than almost any other way which was provided in the Bill. There would be great interest taken in this question throughout the country, and especially by the smaller proprietors. They would immediately insure their lives or their sons' lives, and in that way would not try to evade the Bill when it became an Act, as large numbers would do if a proposal like this were not accepted. He trusted, therefore, that before the Bill left the Report stage the Chancellor of the Exchequer would carry out what they believed he had foreshadowed in his remarks as being willing to do. He was satisfied that it would be the best thing he could do in the interests of the Exchequer, and would make the Bill more popular than it otherwise would be.

expressed a hope that the Chancellor of the Exchequer would realise that it was not large properties only which were affected by this proposal, but that it touched just as much yeomen farmers who had bought their own farms and the operatives in Lancashire towns who had purchased houses or cottages. They, above all others, would be the class who would benefit if a clause such as had been suggested were adopted, because they had probably got no money beyond the amount they had invested in the purchase of cottage or small farming property. He believed that in certain cases, such as those to which he alluded, there were exemptions from the Succession Duty, and if that were so the Chancellor of the Exchequer would not be creating new exemptions but only following the rule with regard to the Legacy and Succession Duty.

observed that under a proposal such as this the money would be applicable for the payment of the Death Duties before anything went to the executor at all, so that it would be ear-marked from the first, and the Inland Revenue authorities would get their money paid straight away.

remarked that a proposal of this kind would meet cases of great difficulty. He suggested the omission of the words from the proposed clause, "by insuring his life for that purpose," and also the words" under such insurance policy." The clause would then read—

"When the deceased has, during his own life expressly provided for payment of the Estate Duty on any property passing at his death, or for any part of such Estate Duty, such sums of money as shall be payable to his estate shall not be aggregated with any other property for the purpose of determining the rate of Estate Duty, and no Estate Duty shall be payable thereon."

Then some proviso could follow to this effect: "Provided that the fund so provided shall be in the joint names of the Commissioners and the deceased." The money which had been so specially provided would not then be aggregated, which was possibly the worst part of the offence, because it was very hard that a man who had been thrifty and had carefully provided for the payment of the Death Duties should thereby be put just over the margin and compelled to pay at a higher rate than he would otherwise have had to pay.

hoped that the Chancellor of the Exchequer, before expressing himself in favour of this proposal, would seriously consider that this would be establishing a new precedent which would tend to carry the principle much further than at the moment was anticipated. All who had engaged in business were aware that business men were obliged to pay Income Tax on Income Tax, or, in other words, they were not allowed to deduct Income Tax paid as part of the expenses of carrying on business. Now, he conceived that if this principle were established in connection with these duties, business men would be perfectly justified in demanding that Income Tax should be treated as an expense incident to carrying on business, and that in future the payment of Income Tax on Income Tax should cease. Again, he called the attention of the House to another point concerning the way in which this principle, if adopted, would work. Men of business who purchase a concession extending over a certain number of years usually set aside year by year a sum as payment of the amount originally laid out in acquiring the concession, and they had felt it to be a very great grievance that each year Income Tax had to be paid on this sum thus set aside. Now would not every argument in support of the principle on which the Amendment was founded equally hold good in respect to repayment in the case mentioned or to repay the cost of a lease? It certainly appeared to him that the acceptance of the principle would open up a very wide field of operation in the direction he had indicated, and he hoped the Chancellor of the Exchequer would very seriously consider the principle involved before accepting the suggestion of the right hon. Member for Grimsby.

said that, after what had fallen from the Chancellor of the Exchequer, he should withdraw the clause, but he desired to explain that the reason he thought such a difference ought to be made between insurance and other modes of making provision for the payment of the duty was because a person who insured his life really paid the whole of the Estate Duty during his lifetime.

Motion and Clause, by leave, withdrawn.

moved the following clause:—

(Exemption of estates of £5,000 of persons killed in discharge of public duty.)

"Estate Duty shall not be payable on an estate the principal value of which does not exceed five thousand pounds, in the case of any person killed directly or indirectly in the performance of his duty, either in the Army or the Navy, or who loses his life in the performance of an heroic act of saving, or attempting to save, another person from danger, disease, or accident."

The question of the exemption of men in the Army and Navy from Estate Duty in the case of death on active service was debated to a certain extent on the Committee stage of the Bill. The objection that was then raised to the proposal was that inasmuch as some of the men in the Army and Navy were rich persons whose estate could well afford to pay duty it was not desirable to exempt them from the payment of duty, even though they lost their lives in the performance of their duties. He did not agree at all with that argument. It seemed to him that when a man was killed in the service of his country the relative amount of his means was a question of insignificance compared with the loss to his family of his life, and should be no bar to the exemption proposed in the new clause. But what he desired to protect from the new duties was the properties of men in the Army and Navy who were not rich men. He felt that the one great evil of the Bill was that it seemed to treat the rich man as if he were a criminal by reason of his wealth. He thought that was a mistake; but not being himself in the category of rich men he had, of course, more sympathy with the smaller men. He thought his clause removed the objections that were raised to the exemptions in Committee; for he limited the action of the exemption to estates that did not exceed £5,000, which could not be considered a large estate. The present rate of interest on money left for widows and children could not be taken to be much above 3 per cent., so that the clause would give exemption from Estate Duty only to the properties of those who, dying in the discharge of their duty to their country, or in the performance of some heroic deed, left their widows and children something under £150 a year. It was said during the Debate on the question in Committee that the men in the Army and Navy were paid to be killed. It was true that for the sake of protecting us, of protecting the interests of their Queen and country, those men were paid for running the risk of being killed; but it should not be forgotten that they were not paid much, and that because of their profession they paid more for the provisions they made for their wives and children by life assurance than civilians. The fact that the men of the Army and Navy were paid was no reason why the nation should not be grateful for their deeds of self-sacrifice and bravery, and make the lives of their widows and children as easy as possible. Therefore, it was not in any way unreasonable that they should exempt from the Estate Duties the properties of those men of the Army and Navy who died in the performance of their duty, and left their widows and orphans £100 or £150 a year. Take the case of the disaster to H.M.S. Victoria . Surely they ought to consider the lives of the men who went down with that ship as sacrificed for the good of the country, and therefore that it was not right or just that whatever provision the humble officers of the ship might have made for their widows and children should be taxed. The Bill continued in operation the provision by which the properties of private soldiers and able-bodied seamen, whether they died in active service or not, were exempt from duty; and he saw no reason why the properties of officers whose financial position was often but little better than the financial position of the men should not have the same privilege. His clause, however, went a little further. It was not limited to the Army and Navy. Some might think that that was a mistake; but he did not think so, because the history of the country was full of the records of heroic deeds; and many more deeds equally heroic were not recorded at all. The clause was not limited in its scope to the Army and Navy, but was intended to include acts of heroism in connection with explosions in mines, lifeboat rescues, acts of valour by firemen, and saving from drowning. Was it reasonable in those cases where men met their deaths in the performance of such acts and left small sums to widows and orphans that this paltry duty should be claimed, especially as the clause only suggested exemption if very little was left? In the case of an explosion in a mine amongst the first to volunteer for the work of exploration and rescue were such men as sub-managers—men who had saved a little money and had insured their lives. It was useless for ordinary miners to go without someone to lead them, and the leaders as a rule were men who had risen from the ranks. Why should not these men be assured, when volunteering for this dangerous duty, that the little provision they had been able to make for their wives and children would not be reduced by calls from the Exchequer in the event of their losing their lives? Surely it was not wise, under such circumstances, to tax the money left behind by these people. The class of persons affected by the clause would be comparatively young men, belonging to the best of the lower middle classes. Elderly men would not be sufficiently active or physically strong enough. The lives lost would be those of young men who in their short careers had not been able to make much provision for those who were to come after them. These acts of heroism should not be allowed to become a source of gain to the Exchequer. The families of men like Braidwood—a man who had brought the Metropolitan Fire Brigade to such a high state of efficiency, and who lost his life in the execution of his duty at the great Tooley Street fire—should not be made to pay a tax in consequence of the heroism of the parents they had lost. He did not, of course, imagine that the carrying of the clause would stimulate to the performance of heroic deeds. Thank God, in this country acts of heroism would always be forthcoming, however deficient the State might be in recognising them! It would be an insult to our brave countrymen to suppose for a moment that they would be influenced in their action by the thought of how they or their families were likely to be treated. Still, they ought not to have it in their minds that, if they lost their lives through acts of heroism the State would come down on the property they left behind them, and make a claim for a share of it—a claim which it could not make if these men did not render themselves martyrs to their duty. The Exchequer, in a sense, was the nation. What would the nation lose by granting the exemption for which he pleaded? In the event of this country being engaged in a war the exemptions might amount to a little, but the expenditure on war was so enormous that this loss would be a mere bagatelle when considered in relation to it. Ordinarily, there would not be more than 100 people in the course of a year who would come under the clause, and suppose the average amount they left behind was £2,000, at 3 per cent. the loss to the State would not amount to more than £6,000, a sum too paltry to discuss. The Chancellor of the Exche- quer might say that he was short of money, but the nation was not so short that it should avail itself of this insignificant way of raising it. The working classes of the country were always disposed to act with generosity to those who sacrificed themselves in the manner he had indicated. He was confident the public would willingly pay a small extra sum in order to admit of these exemptions being made. He did not wish to bind himself to the wording of the clause so long as its principle was accepted. If the Chancellor of the Exchequer or the Solicitor General thought that the wording was not sufficiently precise he would agree to an alteration of it. But he maintained that the nation would only be too glad to assent to the principle of the clause.

New Clause—

(Exemption of estates of £5,000 of persons killed in discharge of public duty.)

"Estate Duty shall not be payable on an estate the principal value of which does not exceed five thousand pounds, in the case of any person killed directly or indirectly in the performance of his duty, either in the Army or the Navy, or who loses his life in the performance of an heroic act of saving, or attempting to save, another person from danger, disease, or accident."—( Mr. Bartley. )

Clause brought up, and read the first time.

Motion made, and Question proposed, "That the Clause be now read a second time."

said, that it would be very agreeable to everybody if it were practicable to adjust taxation according to the personal merits or demerits of the person who had to pay it; but the hon. Member would agree that this clause was only the thin end of the wedge and could only be justified on the basis that they ought in these matters to have regard for the characteristics of the individuals. He was aware that there was on the Statute Book an exemption in favour of soldiers and seamen slain in action, but he could not see a precedent in that statute for claiming exemption in the case of estates up to £5,000 for persons who had distinguished themselves by heroic conduct. If men behaved with that gallantry which often distinguished people in all the ranks of life, they could be repaid in no better way than by the esteem and admiration of their fellow men. Whatever might be his personal sympathies—and if it were possible he would like to see all persons with small incomes and all widows and children exempted from taxation—they were there for the purpose of discharging business duties, and the Amendment, though honourable to the hon. Gentleman who proposed it, could not be accepted.

said, he sympathised sincerely with the Solicitor General in the very disagreeable duty that he had had to discharge. They knew very well that he could not accept the clause, because the authority who was able to accept it was not present, and had left his instructions behind him.

Will you allow me to say that I most cordially agree in the impossibility of accepting it?

said, that he had not said that the hon. and learned Gentleman did not agree in that opinion; but, before the arguments of the hon. Mover of the clause were heard, it had been decided that it could not be accepted. He (Sir J. Gorst) should not have risen at all if the refusal to accept the clause had not been based upon the idea that they should not graduate taxation according to the merits of the person by whom it was to be paid. That was a pure invention on the part of the Solicitor General himself. No such argument as that had appeared in the speech of the mover of the clause. What the hon. Member had put before the House, and what he (Sir J. Gorst) should like to put before it—and what, no doubt, the Secretary to the Treasury would like to put before it—was, this was not a question of the character of the people who paid the tax, but of the character of the Exchequer which received it. The Exchequer—a Government Department—as well as an individual, had a character for honour and honesty to maintain, and the proposition before the House was that when a man sacrificed his life in the public interest it was a mean thing for the Exchequer to take advantage of that death to exact the Death Duty from the widow and children of the deceased. That was the position. It was not a question of the merits of the person who died, but that the public ought not, in honour and honesty, to take advantage of a death caused under these circumstances to put a sum of money into its pocket. That was the simple position, and he was quite certain that if the mass of the people of this country, who were very generous, could be brought to understand a question of this kind, and brought to vote, ay or no, on it, they would by an overwhelming majority declare against exacting Death Duty in the case of a person whose death was caused by his devotion to the public interest.

said, the House could not but have felt how cruel was the contest going on between the official and the man as the Solicitor General was speaking. The hon. and learned Gentleman, he supposed, was bound by the trammels of officialism to give them the answer he did. He (Colonel Kenyon-Slaney) was sure that if the right hon. Gentleman had felt himself free he would have given a very different reply. What was asked was that in the case of a man who sacrificed his life in the public interest those he left behind him should not be fined for that sacrifice. One of the conditions of the Public Service was that, if necessary, life should be sacrificed in the performance of duty. But the fact of a man so sacrificing his life brought him under the fine of this Bill, He hoped and trusted that, later on, he would have a chance of elaborating still further the claims of the Army and Navy to consideration in this respect. But others were to be considered besides the soldier and sailor. Take the case of the fireman who, to save the lives of others, sacrificed his own. If he had saved up a competency the measure would fine his wife and children for his having done an heroic act. If he had not done that act of gallantry, humanly speaking, he would have had many years of life in which to increase his savings. Surely the wife and family, who might be deprived of so much, had a right to the consideration which the Amendment would extend to them. Again, take the case of the volunteer who volunteered for rescue work in a fiery mine. Probably no more heroic act could be performed than that, or one that enlisted more thoroughly the sympathy of the public. Yet it was extraordinary that when it was proposed that in relation to such acts as this an exemption should be made from Death Duties—an exemption that 99 per cent. of the people would be willing to grant—they should be met with this official non possumus . If the laws of this country were to be framed and administered so as to meet the wishes of the majority of the people, the Amendment ought to be accepted. Look at the influence for good or for evil the acceptance or rejection of the clause would have on the characteristics of men in the country! He did not mean to say that men would consider such inducements as the Amendment offered in the performance of acts of heroism, but surely the fact that a life lost in such circumstances was recognised by the State would be some encouragement to that conduct on which so much, at times, depended. The Government would be shortsighted to reject the Amendment. He urged them to reconsider a decision which did not, in his opinion, redound to their credit or find an echo in the hearts of the people.

said, the question divided itself into two parts. The last part of the clause introduced a new precedent, but surely it was a good one. All the hon. Member asked was, that if a man performed an act of heroism and lost his life the State should not take advantage of that fact to mulct his relatives in Death Duties. That was a reasonable ground to take up. But in regard to the first part of the clause there was precedent for it all through, and that went further than the hon. Member suggested. An Act of George III. exempted from Stamp Duty soldiers, sailors, and marines who lost their lives in the service of the State. He presumed that this Act was not repealed.

No.

said, that Act went further than anything suggested. It affected not only the soldier who died on the battle-field, but the soldier who died in the service of the Crown in time of peace. He held that existing exemptions ought to be maintained. They were told that the exemption from Stamp Duty allowed to the common soldier or marine, whether in time of peace or of war, was to be continued, and he would ask the right hon. Gentleman whether he could not allow exemption from Probate Duty in the case of officers dying on service. This was not a very large matter after all. At present exemption was allowed in the cases of officers and soldiers dying on service where the surplus estate did not exceed £100, and preferential charges such as those for illness and military debts, servants' wages, were allowed, although such deductions were not permissible in the case of a civilian. Why could not this exemption be continued in the case of the Estate Duty? These exemptions were not confined to the Naval and Military Services, for until last year they extended to ordinary civil servants whose arrears of pay amounted to not more than £100. Last year, however, a change was made, and the exemption now only applied to civil servants connected with the Admiralty. Of course, that was an anomalous state of things, but altogether he maintained that his hon. Friends had good precedents for the claim he was making. Indeed, he did not think he had gone far enough. The claim ought not to be limited to the cases of men dying in the Naval and Military Service of the Crown it ought to apply also to the Civil Service generally. Possibly he had gone a little too far in fixing the limit so high as £5,000, but the principle he was advocating was a good one, and had been embodied in our legislation in the past.

I would suggest that this matter would be more properly discussed on Clause 8, and I may say that we think that that clause maintains existing practices as to exemptions.

^* said, that if the right hon. Gentleman had been present throughout the discussion he would not have supposed that all they desired was that existing exemptions should be continued. Of course, they could not expect him to be always present in the House, but he would like to remind him of what the right hon. Gentleman the Member for Cambridge University had well said—namely, that the people of this country like to be generous in such matters as this. He did not believe personally that there would be any objection on the part of the public to some reasonable extension of the existing exemptions, provided always they could find a good stopping point. His hon. Friend now proposed that the exemption already enjoyed by seamen and marines should be extended to all persons, whether officers or private soldiers, or sailors, who served in the Army and Navy. Now, he thought that that was a very reasonable proposal indeed. In Committee he ventured to point out the injustice of depriving officers and non-commissioned officers of the benefits of the exemption enjoyed by common soldiers and sailors. But his hon. Friend also argued that there was a much larger class of persons who lost their lives through some voluntary and heroic action in saving the lives of others, and who equally deserved to share in the exemption of the Estate Duty. He doubted whether exemption would be given in such cases, for it would be very hard to draw the line. Men in the Civil Service and in private life often lost their lives in doing their duty; doctors especially did many heroic acts, which would not come within the words of his hon. Friend. But he ventured to suggest to the Chancellor of the Exchequer that before Clause 8 was reached the Government should consider whether they could not merely re-enact the existing exemptions with regard to soldiers and sailors, but so alter the law as to make it applicable to all persons engaged in the Services, with a limitation, of course, as to the amount of property left by any one person to whom the exemption might apply.

Question put.

The House divided:—Ayes 83; Noes 140.—(Division List, No. 155.)

then moved a new clause providing that when Estate Duty had been paid in respect of any property, and within eight years after the decease of the person upon whose death the duty became payable, any person to whom any part of such property passed died, then, in respect of so much of the said property, whether real or personal, which so passed to the second person as should have been maintained unchanged by him and passed at his death, one-half only of the Estate Duty otherwise authorised by this Act should be leviable. He said that this proposal differed materially from the one which had been comprehensively discussed. The Attorney General had spoken of the tendency of laymen to indulge in technicalities, but on this question they need not consider any technicalities at all; they had to examine in order to understand these things properly what was the basis of the proposed Estate Doty, because he put this clause before the House not as a plea for an allowance in a case of hardship, or as an application for mercy, or alleviation in special instances, but as a working out of the principles the Chancellor of the Exchequer had himself advocated. The Chancellor of the Exchequer had said that the Estate Duty was the equivalent of the real unpaid taxes, and if that were so it followed that the House would be going beyond the proper limit of the tax if it imposed the tax in the ease of quickly recurring deaths. The proposal he made was simply that in cases where Estate Duty had been paid in respect of any property, real or personal, and the duty again became payable on the same property on any part of the property, within eight years, the amount of duty imposed should be only half that levied in the first case, and in passing he would remind the Committee that by a clerical error in the last line of his Amendment, as it appeared on the Paper, "five" was substituted for "eight." His point could most forcibly be illustrated by taking the case of a son dying by accident or otherwise shortly after his father, on whose death the Estate Duty had been paid. It would be obviously unjust that the full duty should be again levied on the decease of the son, who might possibly have enjoyed the property left him for a few weeks or days only. Other cases of the kind, involving equal injustice, might arise. The clause he had moved might not be the best way, but at any rate it was a reasonable and practicable way of redressing what would otherwise, under the Bill, be a great injustice. If any hesitation was felt about applying the clause to personal property on the ground that personalty was much more difficult to follow than realty, he would point out that in these days persons invested their money in many forms of personal property which had a character of permanence as well as realty—railway shares, for example. The Chancellor of the Exchequer had laid down a principle which necessarily involved the application of many injustices, and he (Mr. Courtney) suggested that he should remedy the injustice in respect of one considerable class. His right hon. Friend had already approved of the underlying principle of the clause, because he had introduced into the Bill a provision in respect of settlements which, although going in the direction of his clause, was of a very injurious and impolitic character, encouraging as it would the perpetuation of settlements. Why had the Chancellor of the Exchequer introduced this clause? Mainly, he thought, because he felt that to tax to the full extent property passing rapidly in succession would be to perpetrate an injustice which he could not defend. This new clause was really an attempt to apply the same principle which was involved in the case of settled property to unsettled property—that was to say, if it remained intact, and could prove its claim, there should be the same diminished pressure of taxation on subsequent devolutions, when they came in a short time, as in the case of settled property under the scheme of the Chancellor of the Exchequer. There was no particular magic in the figures which he had used, but he thought the period of eight years was a reasonable one, and that a diminution of the duty to one-half would be also reasonable. He would put the clause to the judgment of the House, because he thought that upon its merits it claimed that the principle involved in it should be considered.

New Clause—

(If estate becomes again leviable within eight years half duty only to be charged.)

"When Estate Duty has been paid in respect of any property, and within eight years after the decease of the person upon whose death the duty became payable, any person to whom any part of such property passed shall die, then, in respect of so much of the said property whether real or personal which so passed to the second person as shall have been maintained unchanged by him and passes at his death, one-half only of the Estate Duty otherwise authorised by this Act shall be leviable; and this provision shall apply in respect of all successive deaths occurring within five years from the decease of the person first named in this section."—( Mr. Courtney. )

Clause brought up, and read the first time.

Motion made, and Question proposed, "That the Clause be read a second time."

said, the right hon. Gentleman had founded himself upon what was already in the Bill with regard to settlements, but had omitted all mention of the circumstance that 1 per cent. more would have to be paid in respect of that property than would have to be paid in respect of unsettled property.

I have reduced the amount by one-half and taken off the 1 per cent. altogether.

, continuing, said, that in inserting the provision alluded to by the right hon. Gentleman the Member for Bodmin, the Government had no desire or intention of encouraging settlements. He quite understood the point of view from which his right hon. Friend approached this subject. He had said his plan was a rough-and-ready way of dealing with the matter, and that it could not be dealt with with methodical accuracy. That rough-and-ready way of taking one thing with another no doubt brought out an average, but his right hon. Friend dealt with only one view of the subject. In striking, in his rough-and-ready way, an average period of devolution, he had omitted to take into consideration the amount that the Revenue would lose in cases where a man lived to 80 years of age in consequence of the property not being devolved during that period. It would be impossible for the Inland Revenue Department to trace back property during a long period in order to find out whether there had been a change of the character of the investment.

said, the Chancellor of the Exchequer objected to this Amendment on the ground of the analogy of the further Estate Duty. He said that in that case 1 per cent. extra was charged, and that in the present Amendment his right hon. Friend (Mr. Courtney) was making no proposal for any such compensation to the Revenue. That was true, but his right hon. Friend did not propose a reduction of the whole duty in the case of unsettled property, but only of one-half. That was more than the allowance made in the other case. The right hon. Gentleman complained that his right hon. Friend only dealt with the cases which were in favour of and not th4fce which would tell against the Chancellor of the Exchequer. He understood that his right hon. Friend spoke of cases where the deaths might follow in the same generation. The case of a man who lived until he was 80 years of age was met by the consideration that upon the doctrine of averages it was quite certain that the next heir would succeed and die sooner, so that things upon the whole would be balanced.

Supposing he is succeeded by his great-grandson?

said, that a man must have married very young if he died at 80 and was succeeded by his great-grandson. At any rate, such cases were so rare that for the Chancellor of the Exchequer to advance that as an argument went strongly in favour of the Amendment. As to the second argument of the Chancellor of the Exchequer—where claims were made, the onus probandi would of course rest with the persons who made them in order to show that the property was unchanged. He thought the House would see that there was no more in the second than in the first. Then, as to the valuations leading to litigation, it should not lie in the mouth of the Chancellor of the Exchequer to bring forward that argument. Of course the difficulty arose as to the time at which the valuations should be made, and no doubt that might lead to litigation, but the argument as applied to this clause was weaker than the other two.

said, he thought they were familiar, and almost too familiar, with a certain class of argument addressed to them by the Chancellor of the Exchequer. When he could find no other reason for rejecting an Amendment, he rejected it on the ground that Somerset House was too foolish to work it. He thought the officials there were competent to do their business, and perfectly well able to discover whether property had been maintained unchanged or not. What his right hon. Friend who moved the Amendment desired to procure was that in case of personal property, where there had been no tampering with the capital value, and where it had not been expended for the use of the person on whose death the tax was claimed, there should be this remission. Surely the proposal of his hon. Friend was not beyond the comprehension of that important Department of which the right hon. Gentleman was the head and on which he seemed to throw discredit. The right hon. Gentleman should remember that he had not to deal with the average which went into the Exchequer; he had to deal with the equities as they touched the individual. They were told the other day of the story of Mr. Scarlett, afterwards Lord Abinger. [Sir W. HARCOURT: I told it.] Then he should not repeat it. They had here an injustice which ought to be remedied, and his hon. Friend only proposed that if the duty became leviable within eight years an allowance should be made. He did not believe that that would make much difference to the Exchequer, while it would prevent an individual hardship. If the Exchequer would suffer by the acceptance of the Amendment, it was because the case it sought to meet was a very common case. Conceive proposing a tax of which a large element consisted in making a number of exactions on the capital value of a property in intervals of less than eight years! The thing was a scandal and an outrage. He was convinced that the Chancellor of the Exchequer, if he considered the matter, would feel that the interval of eight years was so much less than the average on which he expected to exact Death Duties that he might well grant the principle of justice contained in the Amendment without damaging the financial interests of which he was the guardian. He could not help thinking that, if the right hon. Gentleman was not entirely lost to any sense of justice, except that which might be described as Treasury justice—which looked upon mankind as an insurance office, looked at them and treated them upon tables of averages and not of individuals—he would feel that one of the main duties of every Government in the taxation of the community was to see that justice was done, not only as between class and class, but as between every class and the Exchequer, and that no individual, so far as they could prevent it, should be compelled to contribute more than his fair share to the cost of the government of the community. Unless the Government adopted that system, they likened themselves to those who levied blackmail upon people who were incapable of defending themselves, and who did not attempt to institute any broad and simple principle by which all members of society should contribute, according to their means, towards the cost of carrying on the business in which society was concerned. He greatly regretted that the Chancellor of the Exchequer had not seen his way either to accept the Amendment or to modify it; and he hoped that, if they had an opportunity of bringing forward the question again, the right hon. Gentleman would treat with a more favourable spirit the main object which the right hon. Member for Bodmin had in view.

Question put.

The House divided:—Ayes 127; Noes 165.—(Division List, No. 156.)

moved the following new clause:—

(Remission of Estate Duty on property passing to wife or husband.)

"If the Estate Duty payable in respect of property passing on the death of the deceased to his or her wife or husband for his or her own use or benefit shall not exceed the Estate Duty payable in respect of one-third of the property passing on such death, the whole of such duty, or, if such duty shall exceed the Estate Duty payable in respect of such one-third, the amount of the excess, shall be remitted or repaid by the Commissioners to such wife or husband."

He said, he had understood the Chancellor of the Exchequer, in the course of the discussions on the Bill, to express his intention of viewing favourably any proposition dealing with the cases of husbands or wives. There was a great deal to be said about family provisions, but the case of the widow of a poor professional man who had had to work hard all his life, or of a tradesman who had saved his £5,000, must appeal to everybody, she would under this Bill have to pay comparatively heavy duties which might be a severe burden to her. It was recognised in the Succession Duty Act and the Legacy Duty Act that property passing between husband and wife ought not to be heavily taxed, and the principle had also been recognised to a certain extent in this Bill. He did not want to deal with the case of the millionaire, but he thought that in cases of estates of £10,000 to £15,000, and still more in cases of estates of £5,000 or £6,000, it was a very hard thing if a widow who succeeded to one-third of her husband's savings had to pay the full Estate Duty. Undoubtedly in recent years, for a great number of purposes, the Legislature had more and more regarded the husband and wife as separate persons, but Parliament had never yet reversed that theory of married life which had endured ever since anything like civilisation had been known in the world—namely, that it was the duty of the husband to provide for the wife. The State had recognised that it was good not only for the family, but for the State itself, that men should be encouraged in every way to make proper provision for their wives. The same principle did not apply to such a degree to the case of property passing from the wife to the husband, but the legislation of all civilised nations regarded the lives of husband and wife as if they were one life. Regarded from the point of view of averages, their lives were not like two ordinary lives. Sometimes people married persons much younger than themselves, but that was not the usual state of things, and as a rule the two lives together were very near the average of one ordinary good life. He hoped that the House would perform the act of justice proposed in his clause.

New Clause—

(Remission of Estate Duty on property passing to wife or husband.)

"If the Estate Duty payable in respect of property passing on the death of the deceased to his or her wife or husband for his or her own use or benefit shall not exceed the Estate Duty payable in respect of one-third of the property passing on such death, the whole of such duty or, if such duty shall exceed the Estate Duty payable in respect of such one-third, the amount of the excess shall be remitted or repaid by the Commissioners to such wife or husband."—( Mr. Byrne. )

Clause brought up, and read the first time."

Motion made, and Question proposed, "That the Clause be read a second time."

The fallacy, if I may say so without offence, on which this clause is founded is that the Estate Duty is paid by those who succeed to the property. I am almost ashamed to repeat over and over again that it is a deduction from the property itself and is totally irrespective of the person to whom it passes. This clause carries us back again to the attempt that was made on the other side of the House to introduce a totally different principle and to regard the matter from the point of view of the benefit derived by the individual. That is the point of view on which the Legacy Duty and the Succession Duty are based, but we have endeavoured from the very first to show that the Estate Duty is founded on the principle on which the Probate Duty is founded—namely, that of taking the payment from the estate itself regardless of the person to whom it passes. This Amendment affects not only the Estate Duty, but the payment of the Probate Duty to an enormous extent. The proposal of this Amendment is one that affects hundreds of thousands of pounds. It is one of the most serious Amendments as regards its effect upon the Revenue that have been moved, and if it were carried it would be absolutely necessary to alter the system of graduation in order to make up for the harm done by it. All the hardship to which the hon. Member has referred exists at present. There is under the Probate Duty no exemption of property passing from husband to wife or from wife to husband. That is now the law, and would have continued to be the law if this Bill had never been proposed. I am not aware myself that there ever has been a proposal to alter the Probate Duty in this respect. When we are asked to abandon any additional Revenue that might be obtained by the Estate Duty, we are asked to abandon an enormous amount of the Revenue that will be derived from the increased taxation. That is not a proposal that is reasonable at a time when we are called upon to raise a large additional sum of money, especially when it is accompanied by a proposal actually to cut down the existing Revenue. The right hon. Gentleman opposite just now attacked me for regarding simply the results to the Exchequer. I am obliged to regard the results to the Exchequer. The House of Commons ordered me to find between £4,000,000 and £5,000,000 more money, and therefore I am obliged to resist proposals the effect of which would be to cut down the existing sources of revenue. It is said that hardship is done in this case. The hon. Member, however, does not appear to observe what great exemptions and benefits are now actually given to the very class of persons we are speaking of. The Estate Duty altogether clears the Succession Duty and the Lecacy Duty in regard to these persons, and that is an immense boon. I am bound to tell the House that this proposal is not consistent with the interests of the Revenue and with the raising of the sum of money we are called upon to obtain. It would invade and break down even the existing sources of the Revenue, and it would be inconsistent with the principle of the Bill, which is to raise the money out of the property regardless of individuals. I must, therefore, oppose the clause.

said, the right hon. Gentleman had stated that the Estate Duty had no regard to the individuals to whom the property passed. This was about the most encouraging remark that had proceeded from the right hon. Gentleman during these long Debates, and he thought the House must welcome the state of mind at which the right hon. Gentleman confessed he had at last arrived. After his confession, it was to be hoped that the right hon. Gentleman would eventually arrive at such a state of humiliation at the iniquity of some of his proposals that he would see his way to accept Amendments. The right hon. Gentleman could not expect the House to accept as an argument why a widow should be unjustly taxed the fact that the right hon. Gentleman was called upon to find £5,000,000. Were the widows to find the deficit? He almost thought that the Opposition could, if the occasion had been opportune, have found more reasonable sources to which to apply for the millions required by the right hon. Gentleman. The right hon. Gentleman said that the Estate Duty cleared Succession Duty and Legacy Duty, but he could not expect the House to be grateful to him for taking off 2 or 3 per cent. and putting on 7 or 8 per cent. The right hon. Gentleman ought either to accept the clause or to give the House some more valid reasons for rejecting it.

^* said, the right hon. Gentleman had attempted to justify his refusal of the Amendment by reasons with which the House had now become familiar. But by being the more familiar they did not become more acceptable. On the contrary, he should be disposed to say that the more familiar they became with the Chancellor of the Exchequer's reasons the less they liked them. What were the right hon. Gentleman's reasons? The first was a play upon words. They were told that the Estate Duty was not Estate Duty, but a deduction from the property. What consolation was it to a widow to be told this Estate Duty was not regarded so much as a tax paid by her as a deduction from the property passing to her? That was no more consolation to the widow than it would be when she called for bread to give her a stone.

It is done now.

^* said, that was the right hon. Gentleman's second argument. As to the argument that the Bill made no change in the incidence of existing taxation, what did it come to? Because there were anomalies now, therefore they were to be continued and continued in an aggravated form. They were told "The widow has to pay under the existing Probate Duty. It may be wrong and an injustice, but we justify our imposition of the Estate Duty on the existence of the present anomaly." When the Chancellor of the Exchequer was remodelling the Death Duties he ought to endeavour to remove anomalies which pressed hardly upon widows and children instead of increasing them. Might he appeal to the right hon. Gentleman to have regard to the colonial analogy? The colonies were in advance of us in this matter. In New Zealand no duty was payable on property passing from husband to wife or wife to husband. In Victoria such persons paid only one-half what others paid. In South Australia by the Act of 1893, the latest and most stringent of all the colonial Acts, there was a very large exemption for widows and children. Was it an unfair thing to ask the Chancellor of the Exchequer even at the risk of some small loss to the Exchequer to signalise the advent of this great democratic Budget by the removal of some of the anomalies which had hitherto disgraced the financial legislation of the country.

said, the Chancellor of the Exchequer based his opposition to the Amendment on the effect it would have on the Revenue, but had not told the House what that effect would be. In fact, the House had been placed in a very disadvantageous position by the way in which the right hon. Gentleman had lumped together the whole of the Revenue which would be derived from the changes under the Bill, and it was impossible to realise what effect any particular change would produce, either with regard to the Estate Duty, the Probate Duty, or from the graduation that was to be carried out. They had been given large figures, but not any details. They were not told how much the Chancellor of the Exchequer expected this year and how much next. What he continually said was, "You must grant me this money or I shall not be able to pay my way," but he did not say how much he would require next year, so that all his appeals lost their effect. The right hon. Gentleman might fairly appeal to those of them who had held responsible positions, and might say, "You will make me insolvent unless you grant me this duty." But he did not say that. This statement was repeated until it began to lose its effect. This was not one of the questions which affected the millionaire; it was one of the questions which affected the smaller and the professional man. Hon. Gentlemen opposite were always taxing the Opposition with their partiality for the landed interest. They could not do so, however, on the present occasion, when his hon. Friends and himself were supporting the cause of the widows of the professional men. They had here a case which would appeal to the general sense of the House. The Chancellor of the Exchequer said that the adoption of the Amendment would cause an enormous loss to the Revenue; but he had given them no idea of the sum to which the loss would amount. Would it be a matter of £200,000 or £250,000? They were entirely in the dark, and had been in the dark during the whole of these Debates. Supposing there was a slight loss this year, how far would that loss extend in future years? Let them remember that they were not legislating, unfortunately, for the present year; they were changing the Death Duties for a whole series of years, and they should, therefore, consider whether what they were sanctioning now would be right and equitable in future years. As one who had been responsible for the expenditure of the country in times past he did not think too much weight ought to be attached to the right hon. Gentleman's argument that if this particular Amendment was passed a deficit would result. They must get over that as best they could, but in order to be able to square the expenditure of this year they must not pass any legislation which would be undesirable and inex- pediment in future years. The argument of the Chancellor of the Exchequer that the proposal which had been made would affect the finances of this year was, to his mind, not sufficient to meet the arguments which had been urged from his side of the House.

said, he could not remember during the whole course of his experience in this House a Bill which had been so little listened to by its supporters, or one in support of which so few arguments had been adduced. Here they had had a most important argument brought forward upon an Amendment which went to the root of our social life and affected entirely new principles in our social legislation, and yet there was not a single supporter of the Government who said a word. They all knew, however, that if they went to a Division those gentlemen would all vote as one man against the Amendment. He had observed upon all the Amendments they had brought forward when the Chancellor of the Exchequer had nothing whatever to say against them he fell back upon the statement that they were opposed to the principles of the Bill. Of course they were, but the question was whether they were opposed to justice and right. The right hon. Gentleman said that the Bill did not take money from the widow but from the estate. What consolation was that to the widow? Could anybody get up and explain how it was they were not taking this amount from the widow? It was ridiculous to say so. The Chancellor of the Exchequer said it had nothing to do with the benefit to the heir. That was a fallacy—he might say it was a mockery to make a statement of that kind. They were dealing with the heir, and could not help doing so, whatever was said to the contrary. It was not a question of benefit of the heir but of injury to the widow. If one took it from the estate one took it from the widow. That was proved by the statement of the Chancellor of the Exchequer that this Amendment would affect the Revenue to the extent of hundreds of thousands of pounds. The statement was very surprising, but if the proposals in the Bill were unjust that only showed how great the injustice was. The Chancellor of the Exchequer had told them over and over again that he had got to find the money. But the duty of the Government was not only to find the funds, but to find them justly. How did the Chancellor of the Exchequer treat the cases of husband and wife? When it suited him to do so he treated them as two persons, when he could get more out of them the other way he said they were one. The right hon. Gentleman ought to make up his mind on the subject, as both positions could not be right. The proposal to treat widows like other legatees was opposed to our previous legislation, and, indeed, to that of almost all other countries. He supposed the supporters of the Government would all vote against the clause, however, because he had noticed that throughout the whole discussion on the Bill they had never troubled themselves to listen to any of the arguments that had been urged in the cause of justice from the other side of the House. In fact, in his experience no important Bill had ever been brought in by any Government which they seemed so unable or so unwilling to support by any kind of argument at all. In this case undoubtedly a great injustice would be done to widows. There was one remark which the Chancellor of the Exchequer had made, however, which he fully agreed with—it was that the Bill had been framed regardless of the interests of the individual. [ Cries of "Oh!"]

I never made any such statement. [ Opposition cries of "Oh, oh!" and "Question!"] I remember the time when a gentleman who rose in this House of Commons to correct a misstatement was always listened to in silence and his correction accepted. I am sorry that a new practice seems to have arisen. What I said was that this Estate Duty was founded upon the same principle as the Probate Duty, which paid no regard to the person who inherited, but only took cognisance of the estate out of which the duty was to be paid. That is a very different thing to saying that this Bill is framed regardless of the interests of the individual.

said, that had he not been interrupted he had intended to say that such a statement was no argument against the present Amendment. He understood the right hon. Gentleman to have used the words he had quoted, but of course if his right hon. Friend said that he had misunderstood him he did not wish to press the point any further.

said, the reason why those on his side of the House had not considered it their duty to enter more fully into the discussion on this Bill was because the matter had been abundantly explained by the Chancellor of the Exchequer and the law officers. The reason why he liked the Budget and did not think widows would be treated unjustly was because it was proposed to defer the taxation of the property until it fell in, and then, as the Chancellor of the Exchequer had explained, it would bear the share of taxation which was due from the estate. It had been pointed out again and again that it was not the successor who paid the Estate Duty. He succeeded to whatever property the deceased left after his debts had been paid by his executors to the State as well as to private individuals. Nearly all the Amendments they had been discussing ad nauseam were Amendments the principle of which had been determined in previous Debates. He protested against the suggestion that the supporters of the Government were afraid to defend the Bill, and that they were merely mechanical voters because they refused to provide fresh fuel with which the Opposition could keep up this perpetual obstruction. If the principles contained in the Bill had not been abundantly debated then he would ask what hope was there for any Government ever getting any legislation passed. He submitted that, considering the business before the country, the House could not afford more time for the discussion of principles of this Bill, and it was only with the view of saving time—which was not observed by hon. Members opposite—that he and his friends had abstained from further wearying the House.

Question put.

The House divided:(—Ayes 149; Noes 179.—(Division List, No. 157.)

moved the following clause:—

(Friendly Societies (exemption).)

"(1) Estate Duty shall not be payable on the death of the deceased in respect of any capital sum not exceeding two hundred pounds, or any annuity the principal value of which does not exceed two hundred pounds provided by the deceased in his lifetime under the rules of any friendly, provident, or industrial society of which the deceased was a member, and payable on his death by the trustees of such society, and for the purpose of this section the Customs Annuity and Benevolent Fund shall be deemed to be a friendly society.

(2) The duty mentioned in the second paragraph of the First Schedule to this Act shall not be payable in respect of any property which would but for this section be chargeable with Estate Duty."

It was, he said, hardly necessary for him to say one word in favour of Friendly Societies in general, but he felt that the Chancellor of the Exchequer, for the sake of the widows and orphans and relatives of the poor persons of the class who belonged to Friendly Societies, should allow this small exemption from the Estate Duty. He had often heard it said that the Government did not want to give encouragement to any special class of providence or insurance; but this was a case in which they might make a special exception. He felt sure the concession he asked for would involve a small loss to the Exchequer, but the social gain would be far greater than any loss which might be incurred. The reason he had chosen the sum of £200 was because that was the limit of the amount a man could insure for in the Friendly Societies. This clause was really to a great extent the corollary of the one which was carried at the instigation of the Chancellor of the Exchequer for the purpose of exempting annuities of not more than £25 a year. If they exempted an annuity of that small amount was there any reason why they should not exempt the capital sum of £200, which was somewhat less than the capital value of £25 a year. If they exempted one they ought to exempt the other. Among the Societies which would receive the benefit of this clause was the Customs Annuity and Benevolent Fund, started more than half a century ago for the purpose of enabling the poorer class of Customs and Revenue officers to make provision for their wives and families. The sums assured were very often the only sums available for the benefit of the wife and children of these people, and for those sums not exceeding £200 it was not unreasonable to say they should be free from the clutches of the Inland Revenue as regarded Estate Duty. Might he make an appeal to the Chancellor of the Exchequer and ask him not to act the part of Pharaoh towards this class and not to harden his heart on this occasion, but allow these people to go without exacting this Estate Duty from them? It was not unreasonable to ask that thrift and providence in the shape of Friendly Societies should be encouraged by giving what was, after all, but a small concession.

New Clause—

(Friendly Societies (Exemption).)

"(1) Estate Duty shall not be payable on the death of the deceased in respect of any capital sum not exceeding two hundred pounds, or any annuity the principal value of which does not exceed two hundred pounds provided by the deceased in his lifetime under the rules of any friendly, provident, or industrial society of which the deceased was a member, and payable on his death by the trustees of such society, and for the purpose of this section the Customs Annuity and Benevolent Fund shall be deemed to be a friendly society.

(2) The duty mentioned in the second paragraph of the First Schedule to this Act shall not be payable in respect of any property which would but for this section be chargeable with Estate Duty."—( Mr. Butcher. )

Clause brought up, and read the first time."

Motion made, and Question proposed, "That the Clause be read a second time."

thought the heart of Pharaoh must not have been very hard upon these small estates. Let them see what the Bill already did. Estates under £100 paid no duty at all; estates over £100, but not exceeding £300, paid 30s.; and an estate of £500 paid 50s. Those were the provisions of the Bill. Could it be said, therefore, that the Bill was hard on small properties? There never had been a Bill in which the allowance of exemptions had been so liberal, and that was a feature of this Bill. Having made the charge upon £200 only 30s., the hon. and learned Member proposed to superadd to that by making a special exemption in regard to Friendly Societies. There was nobody—and he believed the Friendly Societies would bear him witness in that respect—who had taken a more active part in promoting the interests of Friendly Societies than he, but he could not say, with reference to Friendly Societies, any more than he had said with reference to Insurance Companies, that they ought to give them a special and distinguishing advantage over every other kind of investment. It might be that a man might have a small business and it would answer him better to put his £200 into his shop than into a Friendly Society. It might be that he desired to put his £200 into the Savings Bank or into investments which were now permitted through the Savings Bank; or he might put it into his own house, than which there was no better investment for a poor man, and yet they were asked to charge him for the £200 in his own house, and to exempt the particular investment in the Friendly Societies. There was no reason for that, and it was not good finance. They were not putting any excessive burden upon these men. The man for whom the hon. and learned Member asked this exemption was already charged 30s. for the whole and it cleared him, and he could not help appealing to responsible financiers opposite whether they thought it was a wise and proper thing to make this exemption, not with respect to property of a particular figure, but in respect of property invested in a particular manner, and that not by any means the only good manner, for there were investments equally as good, and even better, which they left without any exemption. He did not think it would be a sound principle upon which to go, and therefore he could not accept the Amendment.

was not surprised at the Chancellor of the Exchequer, because it would be very difficult to be surprised at any view the right hon. Gentleman took upon these matters. But the matter was not one which ought to be looked upon in this way. The question was were they not in every possible way to do all they could to promote thrift, habits of saving, and the extension of Friendly Societies throughout the county? That had been the policy for a good many years, and although he admitted that the payment of 30s. on £200 was not a large sum, still they must have regard to the people who had to pay it. Many of the persons would regard the tax as a considerable tax, and one which would prevent them joining Friendly Societies and providing for the future. Was it wise to put this little and annoying tax upon the people just when they had trained them into the habit of joining and interesting themselves in these Friendly Societies? There were many instances in which by small beginnings people had bought their own houses, and by putting a small sum in the Friendly Societies in the Savings Bank, and in other small ways, made provision for the future, and might thus have £00 or £500 to leave to their wives and children. When such was the case the property would at once come in for aggregation, and instead of having to pay 30s. if the sum was over £500, the amount chargeable for Estate Duty would be £10.

That is not touched by this Amendment.

thought it was, because, as he read the Amendment, the Estate Duty was not to be payable to the Friendly Society up to £200. When that amount was saved it would not be aggregated, but would be a special fund by itself, and would be exempt from the Estate Duty, therefore these considerations were clearly pertinent to the present new clause. He was very anxious that they should do whatever they could by every possible means to make people provide for themselves. He believed that was the best way of replenishing the Exchequer. It was infinitely wiser to promote habits of thrift than to grab these small sums by way of duty. If they taxed small sums in Friendly Societies although logically it might be right and fair so to tax them, the practical result would be that people would avoid these means of saving, and the indirect harm which would be done in that way would be infinitely greater than any small financial benefit which the Exchequer might receive.

^* desired to say one word in reply to the argument of the Chancellor of the Exchequer that the Amendment was inadequate in not protecting other forms of investment. That was a well-founded observation; but the answer was that they could reach larger classes of people through Friendly Societies, whereas they could not practically deal with other forms of investment of a very much more limited character. That principle was enforced by the legislation which had taken place in favour of Friendly Societies, which were exempt from Income Tax and other forms of taxation simply because they could thus deal with whole classes of people and accomplish what they could not in other smaller directions. The hon. and learned Gentleman who moved the clause spoke of the social gain to the State. He did not put it merely on social grounds. He believed that the State gained most materially by the foundation of institutions of this character and the more they could encourage them the more did they contribute to that real material gain which accrued to the State. The Chancellor of the Exchequer said that many forms of small investment were already covered by the Bill, that small businesses below £100 were exempt and there were reductions of duty up to £500. All these cases touched, most rightly, what he should speak of as perhaps the lower middle class, not the working class. In this particular case of the Friendly Societies they were supported chiefly by the artizan and working classes, and under these exemptions they received practically no benefit at all.

They will be all included. The money in the £200 will be included in these exemptions.

said, yes; but in dealing with the Friendly Societies they were dealing with much more inconsiderable sums than those of £200, £300, £400, and £500. In Societies of that kind artizans invested small earnings; their all was practically invested in this small form of property, and, inasmuch as they did undoubtedly give advantages to the middle class by the exemptions in the Bill—which he welcomed, and which relieved tradesmen, clerks, and others to a considerable extent—he thought they ought to pursue that saving principle further for the sake of the working classes, who were chiefly interested in the Friendly Societies.

considered that the mass of property invested in Friendly Societies represented a very important interest, worthy of encouragement by the Legislature, inasmuch as the corporations of which they were made up composed a vast agency for organising thrift. He, therefore, supported the clause.

considered this was emphatically a case in which the House might grant this small concession to Friendly Societies, which were productive of such a vast amount of good.

said, the Chancellor of the Exchequer said that £200 only paid 30s., and the argument of the right hon. Gentleman appeared to be that it was undesirable and unfair that the special class represented by the Friendly Societies should be selected for special benefit. He would ask the right hon. Gentleman whether he was not prepared to extend the principle of the Amendment to other forms of thrift as well, because if it was really true that it did not pay at all to collect 30s. from fortunes of £200, what was the use of exacting this tax, which must be in its nature irritating, if it brought in nothing to the Exchequer? He would, therefore, ask the right hon. Gentleman whether he could not extend the principle of the Amendment, inasmuch as it appeared that by doing so the Exchequer would not lose, whilst those to whom the fortunes were left would certainly gain?

The House divided:—Ayes 132; Noes 163.—(Division List, No. 158.)

Further Proceedings on Consideration, as amended, deferred till To-morrow.

^* said, that some misapprehension as to the nature of the Bill existed. It merely provided that where there was a change of ownership there need not be a re-examination of the master or mate as pilot. But as the Bill was not an Unopposed Bill, and could not be expected to be taken as such after midnight, he moved that the Order be discharged and the Bill withdrawn.

Motion made, and Question proposed, "That the Order be discharged and Bill withdrawn."—( Sir A. Rollit. )

Question put, and agreed to.

WATER ORDERS CONFIRMATION BILL [Lord].—(No. 283.)

Read the third time, and passed, with an Amendment.

Message from the Lords

That they have agreed to,—

Bishopric of Bristol Act (1884) Amendment Bill.

Notice of Accidents Bill.

Outdoor Relief (Friendly Societies) Bill.

Wild Birds Protection Act (1880) Amendment Bill.

That they have passed a Bill, intituled "An Act to make further provision for the establishment of. Prize Courts; and for other purposes connected therewith." [Prize Courts Bill [ Lords ].]

Parochial Electors (Registration Acceleration) Bill (No. 282)

As amended, considered; to be read the third time to-morrow.

Supply-Report

Resolutions [6th July] reported.

Army Estimates, 1891–5

1. "That a sum, not exceeding £832,600, be granted to Her Majesty, to defray the Charge for the Royal Engineer Superintending Staff, and Expenditure for Royal Engineer Works, Buildings, and Repairs, at Home and Abroad (including Purchases), which will come in course of payment during the year ending on the 31st day of March, 1895."

2. "That a sum, not exceeding £114,500, be granted to Her Majesty to defray the Charge for Establishments for Military Education, which will come in course of payment during the year ending on the 31st day of March, 1895."

3. "That a sum, not exceeding £130,600, be granted to Her Majesty, to defray the Charge for Sundry Miscellaneous Effective Services, which will come in course of payment during the year ending on the 31st day of March, 1895."

Resolutions agreed to.

Zanzibar Indemnity

Resolution reported.

"That it is expedient to authorise the Treasury to indemnify the Bank of England with respect to the Transfer of Consolidated Bank Annuities standing in the name of the late Sultan of Zanzibar, and to authorise the payment, out of the Consolidated Fund of the United Kingdom, of any money payable in pursuance of such Indemnity."

Resolution agreed to.

Bill ordered to be brought in by Mr. Mellor, Sir John Hibbert, The Chancellor of the Exchequer, and Sir Edward Grey.

Bill presented, and read first time. [Bill 308.]

Education (Scotland)

Copy presented,—of Minute of the Committee of Council on Education in Scotland, dated 9th July, 1894, amending the terms of Paragraph 13 of the Minute of 1st May, 1893, providing for the distribution of the Sum available for Secondary Education under The Education and Local Taxation Account (Scotland) Act, 1892 [by Command]; to lie upon the Table.

Universities (Scotland) Act,

Copy presented,—of Ordinance relating to Pensions to Principals and Professors (Ordinance, No. 53, St. Andrew's, No. 8) [by Act]; to lie upon the Table, and to be printed. [No. 207.]

Public Health (Scotland) Act, 1867

Copy presented,—of Order by the Secretary for Scotland continuing for a further period of six mouths the Order putting in force Part III. of The Public Health (Scotland) Act, 1867 [by Act]; to lie upon the Table.

Railway Accidents

Copy presented,—of Returns of Accidents and Casualties as reported to the Board of Trade by the several Railway Companies in the United Kingdom during the three months ending 31st March, 1894, &c. [by Command]; to lie upon the Table.

Irish Land Commission (Proceedings)

Copy presented,—of Return of Proceedings during the month of May, 1894 [by Command]; to lie upon the Table.

asked whether the Government would put down the Crofters Bill before 12 o'clock, so that the House might have the opportunity of discussing it?

asked that the question might be put to the Chancellor of the Exchequer.

House adjourned at a quarter after Twelve o'clock.