I do not intend to proceed with the motion for the rejection of this Bill which stands on the Paper in my name. The object of some of the clauses of the Bill was to take a very large quantity of water from the Thames, and allow it to be passed into the mains of one of the London Water Companies without the consent either of this House, or of the Conservators of the River Thames. The company promoting the Bill were informed that Parliament was not at all likely to consent to such a measure, and they have agreed to withdraw all the contentious clauses from the Bill, and also to repeal all the clauses in their old Act which gave them power to sell water in bulk, either inside or outside their constituency. Under these circumstances I hope the House will be satisfied, and will give the Bill a Second Reading.

I also had a motion down, but I have been before the Chairman of Ways and Means to-day, and the promoters having made concessions I shall not press my opposition.

I understand that the promoters have agreed to the insertion in the Bill of clauses protecting the rights of Limerick and other places, and therefore I withdraw my motion in opposition.

I beg to ask the First Lord of the Admiralty whether the "Herzog," which was detained on the high seas by Her Majesty's Ship "Thetis," on suspicion of carrying contraband of war, and was brought into Durban on 6th January, 1900, then came under the authority of the Prize Court; whether Her Majesty's Government telegraphed on 7th January to Sir F. Lascelles at Berlin that the Prize Court would adjudicate on the "Herzog"; whether the Prize Court exercised its authority by ordering the release of the Portuguese Governor of Zambesi and of eight Portuguese officers found on board the "Herzog"; whether the Commander-in-Chief, Cape of Good Hope Station, reported to the Admiralty on 6th January that the Senior Naval Officer at Durban had telegraphed that the "Herzog" had on board large quantities of provisions consigned to enemy's agents, which there was reasonable ground for suspecting were intended for the enemy; why did the Admiralty, on 7th January, 1900, telegraph to Rear Admiral Harris a peremptory order to direct the immediate release of the "Herzog," and thus prevent inquiry into and adjudication upon the character and destination of the cargo; on what ground did the Admiralty thus direct the "Herzog" to be taken from out of the authority of the Prize Court, and thus render impossible any complete examination of the cargo and the papers that might have been ordered by that court, and any adjudication upon the whole case by the court; and does the Admiralty assume to exercise such authority over Prize Courts in general as is involved in the removal from their authority of vessels lawfully and properly detained and brought in for adjudication by such courts; and, if not, to what extent does the Admiralty claim a right of interference with such courts.

My right hon. friend has asked me to reply to this for him. The group of questions put by the hon. Member are for the most part based on a very natural misconception of the facts of the case. He is justified in assuming from the published correspondence that the "Herzog" had been placed in the Prize Court. This was implied by the telegram of 6th January from the senior naval officer at Durban, and appears to have been accepted generally at the time; as a matter of fact it transpired subsequently that the "Herzog" had never been handed over to the Prize Court, and therefore the senior naval officer was clearly under a misapprehension at the date of his telegram. There is thus no question of the Admiralty assuming to exercise authority over Prize Courts. The answer to question four is in the affirmative. With reference to question five, in consequence of the German mail steamer "Bundesrath" being at the time in arrest under a similar suspicion, the Commander-in-Chief was directed on the 1st January not to arrest the "Herzog" nor any other German mail steamer until it become obvious that the "Bundesrath" was carrying contraband. Before the instructions could reach the cruisers off Delagoa Bay, the "Herzog" had been seized and taken to Durban as reported in Commander-in-Chiefs telegram of 6th January. On receipt of this telegram on the following day, January 7th, Sunday, the Commander-in-Chief was directed to order the immediate release of the "Herzog." This was simply a confirmation of the general order given on the 1st January, and was rendered the more necessary because nothing contraband up to that time had been found on board the "Bundesrath." I may add that the senior naval officer's telegram of the 6th January, which laid stress upon probable hostile destination of cargo, had not then been received.

Is the right hon. Gentleman aware that no search whatever had been made of the cargo?

I believe that it is the case that only a very cursory search was made, but the Admiralty had an undertaking given in Berlin that the vessel was not carrying any contraband, and that one of the company's ships, which on the outbreak of war had on board what might be considered contraband of war, had discharged at Port Said.

Is it not the fact that three days after release had been ordered by the Admiralty—

Order, order The hon. Member is now going too far. He is carrying on a debate. The question has been answered.

But, Sir, I received an answer to the second paragraph, which is misleading.

Order, order!

I beg to ask Mr. Chancellor of the Exchequer if he can state the number and total amount of the subscriptions for the war loan; what sums have been offered from Abroad and from the United Kingdom respectively; what applications were between £100 and £1,000, between £1,000 and £100,000, and between £100,000 and £1,000,000; and what was the amount of the maximum application; and on what system, if any, the allotments will be issued, discriminating between small and large applications.

I will give the hon. Member the best answer I can to this question; but, of course, the House will see that there may have been more than one application from one applicant in certain cases, and, on the other hand, that there may have been several applicants included in one application—from a broker, for example. The number of applications was about 39,800. The total amount applied for was £335,500,000. It is impossible to say how much of this total was applied for from abroad. The number of applications from £100 to £1,000, both inclusive, was 30,800; the number of applications from £1,100 to £100,000, both inclusive, was 8,630; the number of applications from £100,100 to £1,000,000, both inclusive, was 344. The largest application was £10,000,000. The system of allotment will be that large applicants (i.e., for £10,000 and upwards) will receive 6 per cent.; applicants for sums below that amount will receive allotments varying from 6 per cent. to an allotment in full for as many of the smallest as can be arranged.

When will the allotment be made?

As soon as possible, but I cannot say definitely.

I beg to ask the Secretary of State for the Colonies whether, on 3rd January, 1900, he telegraphed to the Governor of Natal as to the "Bundesrath," detained on suspicion of carrying contraband of war, then presumably in custody of the Prize Court, that the capturing officer of Her Majesty's ship "Magicienne" should apply to the court to release at once the mails on board the captured ship; was this instruction to the naval officer in question sent at the request and with the concurrence of the Admiralty; and if not, by virtue of what authority was it sent.

I telegraphed to the Governor of Natal on January 3rd, in the sense mentioned by my hon. friend, and an application having accordingly been made to the court, the mails were released. The telegraphic instruction was sent with the concurrence of the First Lord of the Admiralty.

I beg to ask the Under Secretary of State for Foreign Affairs whether the British steamship "Mashona" which, while on a passage from New York to South African ports last December, was seized by one of Her Majesty's warships and taken from Algoa Bay to Capetown as a prize, has been released by a judgment of the Court at Capetown; whether Her Majesty's Government has, through the United States Ambassador, undertaken to meet any claims for loss or damage sustained by American subjects interested in the cargo in consequence of the delay in delivery of their goods; and whether claims of British subjects similarly interested will be dealt with on the same footing.

The answer to the first paragraph is in the affirmative. Her Majesty's Government have not admitted liability in respect of any claims of the nature indicated, but they have offered to purchase the flour on board owned by United States citizens. Claims for redress for the non-delivery of the cargo appear to be matter for settlement between such claimants and the ship which undertook to deliver. British subjects who owned goods on board, having no right to trade with the enemy, are not in the same position as foreign owners. The latter are not guilty of any offence in trading with the enemy from a neutral country unless the goods are contraband and are found on board of a ship in British territorial waters or on the high seas, and are destined for the enemy countries.

I beg to ask the Under Secretary of State for War whether his attention has been called to a circular issued by the Vice-Chancellor of Cambridge inviting candidates for commissions in the Army to come forward from among the students, in which the following words occur: "The Vice-Chancellor will require to be satisfied that the means of candidates are sufficient to enable them to hold a commission in the branch of the service for which they apply"; whether this notice was issued with the knowledge and approval of the War Office; and whether he is aware that owing to this notice and requirement, a considerable, number of men otherwise anxious to give their services to the country at this crisis, have been deterred from applying for commissions.

The War Office was not consulted in regard to this notice, which seems to have been perfectly within the competence of the Vice-Chancellor. The applications made to the Vice-Chancellor have been so numerous as to suggest that it had no deterrent effect.

I beg to ask the Under Secretary of State for War, if he could explain why the vacancy which occurred in November last in the rank of Veterinary Lieutenant Colonel has not been filled up; and whether it is usual to keep open appointments in the higher ranks of the Army Veterinary Department for so long a period.

There is no officer at present qualified under the regulations.

I beg to ask the Under Secretary of State for War whether a Volunteer 16-pounder battery coming up with one-half its men for training for a fortnight will receive pay and allowances although one-half of the whole garrison brigade to which it belongs does not do so; and whether Volunteer batteries coming up for training will be given horses or sufficient allowance to enable them to provide horses for themselves.

The whole scheme of training Volunteer batteries is still under consideration. All those who come up for the special training will be provided with the means of hiring horses.

I beg to ask the Under Secretary of State for War whether, in view of the invitation given by the Government to the auxiliary forces and to the employers of labour, they would themselves show an example by giving special facilities to Volunteers serving in Government Departments to attend the proposed camps in the ensuing summer.

Special facilities will be offered to Volunteers this summer to attend camps.

I beg to ask the Under Secretary of State for War whether it would be possible for the War Office to reconsider their decision to remove headquarters from Enniskillen, taking into account the military feeling pervading the country, and also the conduct of the Inniskilling Fusiliers at the front, 90 per cent. of whose men are recruited in the district; also taking into account the increased accommodation pointed out to the War Office, and the unanimous resolutions of the Fermanagh Grand Jury and Enniskillen Town Commissioners on the subject.

The decision to remove the headquarters from Enniskillen has been made after a very careful consideration of all circumstances and must be maintained.

I beg to ask the Secretary of State for the Colonies, whether the proceedings of the West Indian Agricultural Conferences will in due course be printed and issued as a Parliamentary Paper.

The Imperial Commissioner of Agriculture for the West Indies issues a journal entitled "The West Indian Bulletin," containing reports of these conferences. In view of the fact that a report by the Commissioner dealing generally with the work of his department in the West Indies is intended to be presented to Parliament annually, I do not propose to issue these reports as a Parliamentary Paper.

I beg to ask the Under Secretary of State for Foreign Affairs, whether he is aware that British owned steamers specially built to trade under the agreement with the Chinese Government, which authorised British ships to carry British goods to every riverside town and station, are being taken off the West River in consequence of not being allowed to load or discharge cargo at places between treaty ports; and whether Her Majesty's Government will insist on the carrying out of the agreement as to navigation on inland waterways in its entirety.

We have not heard of any British steamers having been taken off the West River in the circumstances referred to. The agreement with the Chinese Government permitted foreigners to trade in steamers where native boats had been permitted. This did not include every riverside town and station. The hon. Member will find further information on this subject in the papers which are shortly to be presented.

I beg to ask the Under Secretary of State for Foreign Affairs whether pirates have attacked with firearms the steam cutter of Her Majesty's ship "Tweed" on the West River, and whether the "Tweed," only steaming two knots against the current, is suitable for the work in which she is engaged; and, if not, whether this gunboat will be replaced by one better adapted to carry out an effective patrol; and whether the commanders of Her Majesty's gunboats stationed on the West River have now been authorised to take whatever steps may be necessary to repress piracy in that district.

On the 6th January the steam cutter of Her Majesty's ship "Tweed" chased a Chinese launch, which had been seized by pirates, up one of the creeks of the West River, and after an exchange of shots succeeded in rescuing the launch. Two British vessels of higher speed than the "Tweed," one being a torpedo boat, are engaged in the West River. The Commander-in-Chief on the China station is taking steps for the repression of piracy, and in co-operation with the new Viceroy, Li-Hung-Chang.

I beg to ask the Under Secretary of State for Foreign Affairs whether he is aware that British owned cargo steamers will be placed on the Upper Yangtsze next month, and whether the gunboats sent to patrol that portion of the river are unsuitable for the purpose both as regards steaming power and construction, and, if so, whether he will state to the House what steps Her Majesty's Government propose to take in fulfilment of their pledge to provide for the protection of British trade.

We have heard that one British steamer will be placed on the Upper Yangtzse in April or May next. It is not the fact that the gunboats placed on the river have been found unsuitable. An attempt is to be made next month by two of them to make the passage of the rapids between I chang and Chungking, and the experience then gained will doubtless prove of much value in deciding on the best class of vessels for the navigation of the river.

I beg to ask the Under Secretary of State for Foreign Affairs, whether he will state whether, in consequence of representations from the American Minister at Pekin, the United States Government have decided to send a war ship from Manilla to the nearest port in China, and whether representations have also been addressed to the British Minister at Pekin, pointing out that rebellion and anarchy are apprehended in China in consequence of the attitude of the Dowager Empress to the further extension of the policy of the "open door"; and whether the Government have taken the necessary steps to protect British interests in China, in view of such an outbreak taking place.

The answer to the first question is in the negative. Her Majesty's Government have taken and will continue to take all necessary steps, to protect British interests in China.

I beg to ask the Civil Lord of the Admiralty what has been the naval expenditure on the naval depot at Wei-hai-Wei up to the present time, as compared with the Estimates laid before Parliament, and excluding expenditure from Army Votes on engineer and garrison services.

The expenditure on the naval depot at Wei-hai-Wei for the year 1898–99, in round figures, was. £25,500, of which rather more than £7,000 was spent on dredging, £15,000 on the purchase of land, and the balance on a rifle range, repairs, and various small miscellaneous services. As regards the present year, I am unable to add anything to the information which I gave in the debate on the Naval Estimates on March 2nd last.

I beg to ask the Secretary of State for India whether he can now state whether many important petitions have been presented to the Punjab authorities from loyal Sirdars of the Cis Sutlej territory of the Punjab, praying for relief from uncertainty and for recognition by Government of the rule of primogeniture in the succession to their respective estates, and whether there has been any delay or want of uniformity on the part of local officials in reporting on and dealing with such petitions; and whether he can now grant a Return giving copies of the petitions and correspondence in respect of which, on the 11th May last, he was pleased to state that he would make a reference to the Government of India.

I made a reference to the Government of India on the subject referred to in my hon. friend's question, and learn from them that no petitions of the nature referred to in it have reached the Punjab Government. The correspondence on the subject does not appear to be of such public importance as to be suitable for being laid before the House, and is, moreover, incomplete. I shall, however, be glad to communicate it to my hon. friend if he desires to see it.

I beg to ask the Chancellor of the Exchequer whether he proposes to make any change in that part of the Finance Bill which referred to the stamps on brokers' bills.

As my hon. friend is aware, I have received several deputations on this subject, and they undoubtedly have brought before me matters with which I was not previously acquainted. I do not think it would be right, in view of the considerations which have been laid before me, to press the clause in its present form. I shall further consider the matter before Committee in order that I may, if necessary, place another clause on the Paper, and that, of course, would require a preliminary Resolution. The clause as it stands will not be proceeded with.

I beg to ask Mr. Chancellor of the Exchequer, with reference to his statement that the practice in the past had been to exclude from the exemption of estate duty, conferred under Section 8 (1), Finance Act, 1894, the property of non-commissioned officers above the rank of corporal, if he will state whether such exclusion is specified by any distinct law or legal enactment, or has become a practice in consequence of the decision of the Treasury; and whether it is within the power of the Executive to extend the act of clemency, which they had exercised in the case of the property of the Emperor of Russia, to the property of non-commissioned officers who have died in Her Majesty's service during the present war.

No record exists of the origin of the practice, but it has been prevailed since the beginning of the century. Section 8 (1) of the Finance Act, 1894, gave by its terms the force of law to this practice in respect of estate duty. I do not think that the Executive could properly take the course suggested in the second paragraph of the question. There are grave objections to initiating remissions of taxation in a fresh class of cases without the distinct authority of Parliament.

I beg to ask the Secretary to the Treasury whether, under Rule II. of Treasury Circular, No. 17341, issued in December last, a staff officer in the Civil Service in receipt of a salary of £400 per annum, who has become a staff officer by promotion from the Second Division, would, on promotion to a clerkship in the First Division, carrying a scale of £200 to £500 per annum, either (1) be put on the minimum of the scale of his new post, namely, £200, or, if he preferred, (2) on the salary which he would have reached if he had remained in the Second Division, which salary might be considerably less, but could not be greater than £350 per annum; whether the Order of Her Majesty in Council, dated 15th August, 1890, which applies to all permanent officers in the Civil Service on scales of salary in excess of the Second Division, and therefore includes within its scope the staff officer in question, provides that no person promoted to a higher post shall in any case suffer immediote pecuniary loss by such promotion; and whether, in the circumstances, the Rule referred to is competent; and, if so, from what statutory or other authority the power of the Treasury to make a Rule superseding provision in an Order of Her Majesty in Council is derived.

The statements in the first paragraph are correct. Appointments to staff posts are the prizes of the Second Division, and are not intended to form stepping stones to the First Division. The salaries of such posts are therefore fixed on an exceptionally liberal scale. It would be obviously improper to allow the holder of such a post to be advanced to the First Division with a commencing salary higher than that of his colleague of equal service who had entered the Division after an open competition of a much higher class. Clause 4 of the Order in Council of 15th August, 1890, to which the hon. Member refers, increases the official attendance throughout the service from six to seven hours, and provides that any person then serving, who might thereafter be promoted, should give seven hours attendance without addition to the rate of salary attached to the office. As, however, such person might at the date of the promotion be in actual receipt of a personal allowance for a seven hours attendance, the proviso was introduced to ensure him against actual loss by the cessation of his allowance, if the salary of his new post was less than his previous salary and allowance combined. Beyond this the proviso has no general application. The Rule II. of the Treasury Circular of December last does not therefore conflict with the provisions of any Order in Council.

I beg to ask the Secretary to the Treasury, as representing the Postmaster General, whether it is the practice to count the absence of Post Office officials, when due to an outbreak of infectious disease in their homes, as sick leave; whether this course will have a prejudicial effect upon the official career of an officer in the way of retarding promotion or causing superannuation owing to such absences; and whether, in view of the importance of preventing the spread of infectious diseases, and the tendency of the new regulations to deter an officer from informing the Department of an outbreak, the Postmaster General will consider the advisability of withdrawing the new regulation.

Compulsory absence owing to the presence of infectious disease at home carries full pay for a limited period, as sick leave does. Such absence does not affect an officer's prospects of promotion or his superannuation. These regulations are so favourable as to offer no inducement to officers to mislead the Department. Should the absence exceed six months the Treasury would be prepared to consider an application for a reasonable lodging allowance.

I beg to ask the President of the Board of Trade whether he is aware that the automatic railway couplings of an inventor, whose models were in the House of Commons last session, have been worked on railway wagons with success, substituting automatic coupling for manual coupling on the spot; and whether any arrangement can be made to enable Members of this House to inspect them on railway wagons during this session, so that they may see for themselves how automatic coupling can be adopted on railways throughout the United Kingdom without interference with trade or the necessary operations of any railway company, and give complete safety to railway servants.

If any arrangement such as is suggested in the question is made, will care be taken not to give preferential treatment to any one inventor, and to give Members of the House an opportunity of seeing all the best inventions?

May I ask whether the Royal Commissioners were not aware of the invention referred to, and reported that no invention had been submitted which they could recommend?

I am afraid I could not make any arrangement such as that suggested until Parliament has considered the legislative proposals which the Government are putting before them. If Parliament approves of these proposals I have no doubt it can be arranged that hon. Members shall see the various inventions. Of course the railway companies could of their own free will give the facilities which the hon. Member suggests in the case of one inventor, but they would have to consider the claims of other inventors. With regard to the other question, I have no doubt that the Royal Commission had this particular question before them, and they did make a report, as has been suggested. I do not think the Royal Commission wished it to be inferred that they had exhaustively considered any of the inventions put forward.

Is the right hon. Gentleman aware that automatic couplings are in general use in America and other countries?

Oh, yes, I am thoroughly well aware of that fact.

I beg to ask the President of the Board of Trade whether any decision has been arrived at to remove the Buckland Collection from the South Kensington Museum, having in view the desirability of utilising it for giving national instruction in fisheries and pisciculture.

No, Sir.

Is there any intention to remove it?

That is rather a matter for the Lord President of the Council.

I beg to ask the President of the Local Government Board when an answer will be sent to the district council of Friern Barnet as to the result of the inquiry as to the supply of water to the district.

The Friern Barnet Urban District Council have applied to the Local Government Board to give notice to the Barnet Valley Water Company to discontinue their neglect in providing a constant supply of water to a portion of the district. The company contend that they are not in default, on the ground that one fifth of the houses in the portion of the district in question are not furnished with the prescribed fittings. The Board are now awaiting a reply to a communication which they addressed to the company on the 24th February last, and on receiving the reply they will communicate further with the District Council on the matter.

I beg to ask the Vice-President of the Committee of Council on Education, whether he is aware that inconvenience is arising from the delay in publishing a list of schools certified under the Elementary Education (Defective and Epileptic Children) Act, 1899, and that children are in some instances being kept in unsuitable homes in receipt of outdoor relief from the guardians, as the district councils cannot obtain the names of schools to which they can be sent; and whether, under the circumstances, the schools at Chalfont St. Peter could be provisionally certified.

No schools can be certified under the Act until the Minute laid upon the Table on February 28th has become valid on March 28th.

I beg to ask the hon. Member for the Hallam Division of Sheffield, as representing the Ecclesiastical Commissioners, whether the Ecclesiastical Commissioners in the year 1882 made over a portion of ground to the Mathry Parish Council, to be used by them as a burial ground; and whether the Ecclesiastical Commissioners have since then vested this same piece of land in the incumbent of Mathry, although the Parish Council had spent £60 in enclosing it; if so, will he state whether be proposes any action in this matter.

In the year 1881 the Ecclesiastical Commissioners on the application of the vicar offered to sell for £50 to the parish certain land as a site for an additional burial ground. The parish authorities, however, did not pay over to the Commissioners the consideration money, or take any steps to complete the purchase. The existence of a burial board was not at that time referred to in the correspondence with the Ecclesiastical Commissioners. In view of doubts whether any burial board had ever been duly constituted, and of the act that (unknown to the Commissioners) interments had actually taken place, the Ecclesiastical Commissioners decided in 1896 to make a free gift of the land, which was conveyed under the provisions of the Church Building Acts, and by virtue of the 8 and 9 Vict., c. 70, sec. 13, the freehold upon consecration vests in the incumbent of Mathry for the time being. The Ecclesiastical Commissioners do not propose to take any further steps in the matter.

I beg to ask the First Lord of the Treasury, whether, having regard to the representations made to Her Majesty's Government through the President of the Local Government Board, he can state if the Government will this session undertake legislation relieving hospitals in Great Britain from local rates.

I have already, as the hon. Member is no doubt aware, expressed sympathy with the object which my hon. friend has in view. The question is surrounded with considerable difficulty; and the best plan, I think, would be to have a Committee of the House to deal with the subject.

I beg to ask the First Lord of the Treasury, whether, in view of the importance to this country of there being a supply of smokeless coal always available for the use of the Navy, the Government can see their way to causing an inquiry to be instituted by a committee of experts into the present extent and probable duration at the present rate of consumption of the Welsh anthracite coal measures, with a view to prevent undue depletion of the same before it is too late to avert such a national misfortune.

I understand that a fresh survey of the Welsh coal measures is now being carried on by the Geological Survey of Great Britain. If the hon. Member asks for my own private opinion, it is that long before the coalfield approaches exhaustion we shall have learnt enough about the combustion of coal to prevent our fleets from being necessarily dependent upon it.

I beg to ask the First Lord of the Treasury whether, inasmuch as the Official Returns show that in 1898 522 railway servants were killed and 12,826 were injured in the performance of their duty, that the recent Royal Commission on Accidents to Railway Servants has declared that lives that could be saved are lost, and men are injured unnecessarily, and has unanimously made recommendations with a view to remedy this state of things, he can now state when the Bill which has been introduced by the President of the Board of Trade to give effect to these recommendations will be effectually proceeded with.

I am afraid I can give no pledges in regard to this Bill in the present state of public business.

asked whether the right hon. Gentleman could give an assurance that the Bill would be taken at all this session.

Is there any doubt in the right hon. Gentleman's mind that the Bill will be taken this session?

It has been taken.

I mean the Second Reading.

I beg to ask the Lord Advocate whether the attention of the Government has been directed to the migration during last week of the whole of the inhabitants of the fishing village of Old Slaines, in Aberdeenshire, to the neighbourhood of Aberdeen, owing to the failure of the fishing caused by excessive trawling and want of harbour accommodation; and whether they are prepared to take any steps to prevent further depletion of the country population and the loss caused to these people by the abandonment of their homes.

I regret to learn from the hon. Member of the wholesale migration referred to, from whatever cause arising; but I think there may be causes at work other than those mentioned in the question. It is not practicable to intervene in a special case, but the Government has always kept in view the general interests of line fishermen.

I beg to ask the First Commissioner of Works when it is intended to begin the building of the new post office at Aberdeen; a portion of the sum to be expended in the erection of which, although a small sum, appears in the Estimates for the coming financial year.

I am afraid it will not be possible to begin the erection of the Aberdeen post office building until late in the year. To my regret, I find myself unable to provide in the Estimates more than would enable me to commence the work. The right hon. Gentleman may rely upon me to see that it shall be taken in hand as early in the autumn as possible.

I beg to ask the Secretary to the Treasury, as representing the Postmaster General, whether the Tweedmouth Committee recommended the abolition of classification in the postal telegraph service, what is the maximum of the scale attached to the class of clerks at Armagh, how many men at Armagh belong to the clerkship class, their length of service and present salary, what is the number of sorting clerks and telegraphists at Armagh, the maximum of the scale for men of this class, how many men have obtained the maximum, how long have they been in that position, what is their length of service, and what is their future prospect.

Lord Tweedmouth's Committee recommended the amalgamation into one of the first and second classes of telegraphists, and this recommendation was duly carried out. It did not affect the Armagh office at which there was no first class. There is only one officer of the rank of clerk at Armagh. He performs supervising duties and the maximum of his scale is £170 a year which he attained in October, 1898, after a service of seventeen years. There are nine sorting clerks and telegraphists. The maximum of their scale is 40s. a week, which has been reached by two men only (in 1897). The service of one dates from December, 1882, and of the other from May, 1873, but the latter was transferred to Armagh from another office in 1892. Their future prospect, so far as the Armagh office is concerned, depends upon their qualifications for promotion and on the occurrence of vacancies in superior positions, but, of course, it is always open to these officers to apply for transfer to more important offices possessing higher scales. The maximum of the scale for sorting clerks and telegraphists at Armagh was raised from 38s. to 40s. a week in accordance with the recommendations of the Tweedmouth Committee.

I beg to ask Mr. Attorney General for Ireland whether he is aware that Thomas Brady, Ballinaglera, County Leitrim, was convicted on 5th July, 1898, for firing at the person and placed under a rule of bail, was again convicted on 12th July, 1899, for threatening and placed again under a rule of bail, and on 26th December, 1899, was a third time convicted for assaulting the police; did the Government on any occasion estreat his recognisances; and do they still license the convict to carry firearms.

On the 21st February and 15th June, 1899,^* my right hon. friend the Chief Secretary replied very fully to questions addressed to him by the hon. Gentleman in reference to the case of this man, Thomas Brady, and his conviction in July, 1898. In July, 1899, he was ordered to find bail to be of good behaviour for using threatening language, and in December he was fined for drunkenness and for assaulting a constable. The answer to the second and third paragraphs is in the negative. Brady's licence to carry firearms was revoked in January, 1891.

Is it not a breach of good behaviour to assault the police?

Yes, Sir.

I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland whether he is aware that, although an Act was passed abolishing religious tests in Trinity College, Dublin, in the examinations for sizarship, for which it is alleged Roman Catholics may enter, the Irish professor, who is a member of and in receipt of income as professor from a society founded to induce Roman Catholics to change their religion, instead of examining in Irish literature, sets students the doctrinal parts of the Protestant version of the Scriptures; and will the Government consider whether any steps should be taken to prevent such practices which may constitute an evasion of the statute.

I have referred this question to the Vice-Provost of Trinity College, Dublin, who has informed me that the Irish Society, to which allusion is made, was established in 1818 for providing the Scriptural education and religions instruction of the Irish speaking population chiefly through the medium of their own language. In or about 1843 this society raised by subscription a fund for founding and endowing a professorship of Irish in Trinity College. The amount subscribed, which was invested in Government securities, produced only £70 a year. The Board of Trinity College undertook to increase the endowment to £100 a year, it being made a condition that the professor should be subject to the jurisdiction of the Board in the same manner as all other professors, and the power of appointment to the professorship was vested in trustees who are independent of the society. The Vice-Provost states there is no foundation for the assertion that the professor "instead of examining in Irish literature sets students the doctrinal parts of the Protestant version of the Scriptures," as a reference to the examination papers, which are published each year, will show. The copy of the Scriptures used is the same, I understand, as that used at examinations of the Royal University by the Rev. E. Hogan, S.J., and passages set for translation are very often taken from the works of the Rev. G. Keating, another Roman Catholic Divine.

I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland what is the cause of the delay in the sale of the Skeritt estate in county Clare to the tenant.

The request of the Land Judge for an inspection and valuation of this estate under the 40th Section of the Land Act, 1896, was received by the Land Commissioners in December last. The inspector to whom the matter has been referred will shortly visit the estate.

I beg to ask Mr. Attorney General for Ireland whether he will state by whose orders, on the night of the 5th instant, when darkness had set in, a body of police was drafted into the town of Portaferry, across Strangford Lough, and, after patrolling the village for some hours, retired as they came; and upon what information this movement was ordered, and had it any relation to the attacks recently committed on the Presbyterian National School in Partaferry.

The hon. Member seems to have been entirely misinformed. The incident referred to is imaginary. No police were brought across Strangford Lough, as alleged.

I beg to ask Mr. Attorney General for Ireland whether, at the Portadown Petty Sessions on Monday last, a number of persons were charged with throwing stones at the police and with breaking windows in the houses of several inhabitants of the town; and were the accused indentified by police witnesses as being in the mobs by whom the damage was done; if so, what punishment did they receive.

By the evidence produced before the magistrates it was proved that the several persons charged were in the crowd from which the stones were thrown, but it was not established that any of them participated in the stone-throwing. On these grounds the magistrates, while most severely condemning the disturbances which took place, felt themselves unable to convict any of the accused. No punishment was, therefore, inflicted.

I beg to ask Mr. Attorney General for Ireland whether he is aware that the late Judge William O'Brien willed his library to the Jesuit Fathers in Dublin, and that the bequest was not carried into effect because of the legal disabilities affecting Roman Catholics still on the statute book; and whether he proposes to take any step for the removal of these disabilities.

I am not aware that any case dealing with the construction of the late judge's will has come before any court of justice. It is quite competent for testators by adopting well-known forms of bequest to secure to members of these bodies the practical enjoyment of property. Whether the late learned judge adopted one of these forms or not I do not know. The reply to the last paragraph is in the negative.

I beg to ask Mr. Attorney General for Ireland, as representing the Chief Secretary to the Lord Lieutenant of Ireland, whether his attention has been drawn to the case of a prison warder named Edward Flynn, who, after nearly thirteen years in the service of the Prisons Board and seven years in the Army, having served through the Afghanistan War under Lord Roberts, was dismissed from Waterford Prison for alleged insubordination, and will he explain why his request for a sworn inquiry to be held was refused; will he explain why, when charges involving dismissal are made against prison warders, the person charged is not allowed, as in the case of the Royal Irish Constabulary, to have the assistance of a solicitor at the inquiry; also, why Flynn's request to be allowed to have legal assistance at the inquiry held concerning his case by Inspector Harol was denied; and whether, in consideration of the distinguished services and good character of Flynn, he will order a sworn inquiry into this case, and allow Flynn to have the help of his solicitor.

Edward Flynn served as prison warder for a period of twelve and a half years. He was dismissed from the service in February of last year for insubordination, persistent disobedience of orders, breach of prison rules, and conduct contrary to good order and discipline. Prior to his appointment as warder he had been in the Army, but I have no information as to whether he did, or did not, servo through the Afghanistan War under Lord Roberts. His character as awarder was not good. Flynn did not ask for a sworn inquiry into the charges on which he was dismissed. These charges he admitted. His request for an inquiry was made partly in respect of a very trivial charge which did not involve dismissal, and partly with the object of preferring charges against the governor of the prison, which he refused to specify beforehand in writing in the ordinary way. When sworn inquiries are held into charges against prison warders the persons charged are generally allowed to have the assistance of a solicitor. In the present case, as I have stated, no such inquiry was held. Having admitted the charges on which he was dismissed it was not necessary to hold an inquiry to investigate their truth, nor is it intended now to reconsider the case.

I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland whether his attention has been called to the fact that Dr. Courtenay, one of the Irish Inspectors of Lunacy, recently held an inquiry in the Mullingar District Lunatic Asylum touching the death, through alleged ill-treatment or negligence on the part of some of the attendants, of a patient named Reilly in that institution; and that the inspector declined to admit any representative of the press to the said inquiry; will he explain why no answer has been given to a resolution passed by the committee of management expressing regret at this exclusion, and requesting an explanation from the inspectors; and whether he will give instructions to the inspectors to have all such similar inquiries in future open to the press, so that the public, the friends of patients, the ratepayers who are taxed for the maintenance of the institution, and the electors who control the committee, should have an opportunity of getting independent information as to the proceedings which, though relating to matters of discipline, affect the lives of people unable to look after themselves.

The facts are correctly stated in the first paragraph. A resolution was received by the inspectors expressing the regret of the committee of management that the press had been excluded from the inquiry, but no request for an explanation has been received by the inspectors. With regard to the third paragraph, the inspector, influenced by a regard for the feelings and interests of the insane and their friends, in the exercise of the discretion vested in him by Statute, excluded the press from the inquiry held in the present instance. The evidence taken at such inquiries is always forwarded by the inspectors, together with their own report thereon to the committee of management, and if the committee, regardless of the pain which the publication of the names, delusions and other weaknesses of the patients must, in many cases, inflict upon their friends and relatives, take upon themselves the responsibility of publishing the evidence, they are of course at liberty to do so. It has always been the practice to exclude the press from such inquiries in Ireland, and, so far as I am aware, a similar method is followed in England also.

I beg to ask Mr. Attorney General for Ireland whether powers are given in the Local Government (Ireland) Act to rural district councils to purchase or lease the rights of collecting tolls for markets and fairs held by certain landlords, and to change the dates for existing fairs and markets, and to establish new ones; and whether the powers go to the extent of compelling a landlord to sell.

The reply to both paragraphs of the question is in the negative.

I beg to ask the President of the Board of Agriculture whether he intends to rescind the Dog Muzzling Order in the county Dublin.

This matter is now under consideration, and I hope it may be found possible to withdraw the muzzling order from the county Dublin in the near future.

I beg to ask the First Lord of the Treasury if he will sanction a Return showing the comparative outlay in England, Scotland, and Ireland respectively on foot of Government stores and supplies purchased since the beginning of the current finan- cial year, 1st April, 1899, to present time, in view of the importance of this information in its bearing on the question of the Financial Relations between Great Britain and Ireland, which is down for discussion on an early date.

I cannot give the information which the hon. Gentleman asks for, in detail, as I think he is already aware, but I hope that to-morrow or Thursday I may be able to give him in the rough some of the information he desires.

Inasmuch as there is a debate bearing on this question on Thursday, will the right hon. Gentleman endeavour to give me the figures to-morrow or Wednesday?

I am quite aware for what purposes the figures are asked for, and I shall be glad to give them to-morrow if I can get them from the War Office. But as the House knows, that office is extremely hard worked just now, and I cannot be sure whether I can get them by then.

Will the right hon. Gentleman state what will be the first Order to-morrow, and on Thursday and Friday?

The first Order to-morrow will be the next stage of the Consolidated Fund Bill. After that it is impossible for me to make a definite promise, because I cannot foresee what course the House will desire to take to-night with regard to the Finance Bill. I have ground for hoping, after what took place on Friday last, that there will not be any difficulty in getting through the Second Reading stage at a comparatively early hour to-night. If I am disappointed in that prospect I may have to take it to-morrow. On Thursday an opportunity is to be given to hon. Members from Ireland to discuss the financial relations between Great Britain and Ireland. I cannot absolutely say in what form or on what motion that discussion will take place, but I am bound to give hon. Members a full opportunity to carry out that discussion. On Friday the Speaker will be moved out of the Chair on the Civil Service Estimates, and I understand the hon. Member desires to raise the ques- tion of university education in Ireland for Roman Catholics.

I wish to ask the First Lord of the Treasury whether he intends to proceed with the Second Reading of the Finance Bill after ten o'clock to-night, and whether in view of the far reaching nature of some of the proposals he does not think that further time should be granted for its consideration.

No, Sir.

I do not think the right hon. Gentleman caught my point. I wish to know whether he intends to insist on getting the Second Reading at ten o'clock if the debate is not then concluded.

Order, order! That is not a proper question. It is not right to ask a Minister if he intends to insist on taking a division at a particular hour. He cannot insist.

Yes; because the First Lord said on Friday night—

I heard what the right hon. Gentleman said. I repeat that the hon. Gentleman's question is quite irregular.

Is it intended to take Order No. 10 to-night, and if so, will it be brought on at a time which will enable a full discussion to be taken?

There is no chance of taking it to-night.

I think the House should consider the speed with which this Bill is being rushed through, and I confess I do not see the slightest reason why the Budget should have been taken out of its usual time. The War Loan Bill could have been immediately disposed of, and would have met all the immediate necessities of the war, and the Government might have waited until the usual time before the Budget was introduced or the Finance Bill brought forward. The pretext is, of course, the necessities for the war in South Africa, but events are happening so quickly there that those necessities may be modified, that it would have been wiser to have waited until the actual requirements of the country were ascertained. I also regret the attitude which has been assumed on this side of the House with reference to the Budget. It is the most oppressive Budget that has been introduced for fifty years, and yet there is hardly a disposition shown on the Liberal side, or, indeed, in any part of the House, to criticise a single provision of the Bill. What is the reason? The reason is that the Liberal Leaders and other members of the Opposition desire that the Government shall not be obstructed in finding the money for the prosecution of the war. But surely that desire does not make it necessary for my hon. friends to acquiesce in proposals of any kind which may be brought before them. I think that the haste with which the House is accepting this sweeping Budget is all the more to be deplored because these annual occasions are the only opportunity the House has of considering the financial system of the country. At least once a year we should examine the principles on which that financial system is founded. It appears to be thought that the principles of free trade demand that taxes should be levied on five or six commodities used by the people. They have been invested with a sort of sacredness by Chancellors of the Exchequer, who keep on ringing the changes on these commodities, and no one has done more in that direction than the present Chancellor of the Exchequer. But there is nothing particularly sacred about these articles. If money is wanted, and it is decided to raise it by indirect taxation, the time has come to consider whether some new subject of taxation ought not to be found, because the people interested in these trades and in these commodities are being unfairly treated. A new principle should now be adopted. I think that the Chan- cellor of the Exchequer is raising a great deal too much money out of drink. Last year the amount was £36,000,000, and it is now proposed to raise two or three millions more. We have had a number of extraordinary facts laid before us recently by the Royal Commission on the Licensing Laws, and no Member of this House can look with unqualified satisfaction at the extent to which the State is interested in the drink traffic. In Ireland and Scotland a huge revenue is collected from it, and extraordinary revelations have been made of the moral and material damage done, especially to the people of Ireland, by the trade. Yet the House is interested in it to a great extent. The State sells licences for the sale of drink in places which are not fit for anyone to eat or drink in, it levies a huge tax on every gallon of the infamous liquor sold, and it is, therefore, far from being in a free position to take any steps to decrease the evils connected with the traffic. There are twenty-six new imposts in this oppressive Budget, and the total amount to be raised by them is stated by the Chancellor of the Exchequer to be twelve and one-third millions; but the amount is, I think, greatly under-estimated. The Chancellor of the Exchequer has always under-estimated his revenue. Last year it was under-estimated by five millions, and this year the under-estimate will be almost as large. The under-estimate is particularly noticeable in the case of the tea tax. Last year it produced four and a quarter millions, and for his increase of 50 per cent. the right hon. Gentleman only adds £1,800,000. I think he might well have estimated for another £200,000. Again, in the matter of the income tax, the estimated produce for last year is £18,800,000. He raises the tax 50 per cent., but only anticipates receiving an additional six and a half millions. I think that is an under-estimate of a million. I hold it is a great pity those under-estimates should be made. Again, in my opinion, the teetotallers, who are being made to bear the heaviest burden, have been unfairly treated in the Budget. The hon. Gentleman evidently intended to put a little on everybody, but while he has added 50 per cent. to the tea duty, he has only put 15 per cent. on beer, 12½ per cent. on tobacco, and 5 per cent. on spirits. Supposing we include the teetotal articles, tea and tobacco, the new impost will increase the amount raised upon these two articles 20 per cent., but if we take the other two articles, beer and spirits, the increase is only between 8 and 10 per cent. I will put it another way. We raised last year on tea and tobacco fifteen millions; next year we will raise three millions more, or a total of eighteen millions. But we raised thirty-five millions from beer and spirits, and that would be only raised two and three-quarter millions. That shows that the teatotallers have not been fairly treated in the Budget, and we should have some explanation from the Chancellor of the Exchequer. I think it is most undesirable that all these taxes should have been raised, if not absolutely necessary; and if it can be proved by one or two figures that these increases might have been avoided, then I think a case can be made against the Budget. It may be very bold of me to suggest that these increases might have been avoided, but I venture to do so. When you remember that you have six millions of extra revenue provided by taxation this year, it was not necessary to impose all these new taxes, which will bring in vast sums of money. The theory is that as we are at war we should find a large contribution to the cost out of taxes of the year. But in the year that ends 1st April we found six millions that was not raised in the year before the war commenced. If we put on no increased taxation next year, we would have seven millions for the war. Then, suppose we put on 2d. on the income tax, we would have eleven millions next year and thirteen millions the year after. If the House has followed the figures, there would have been thirty millions for the war in three years—1899–1900–1. I think that would have been a very respectable contribution to the war. And when you add to that the thirty millions that were borrowed on loan, then, I think, the war expenditure might have been disposed of, especially as I still hope the war will not cost the large amount provided by the Chancellor of the Exchequer. If I have shown that it was not necessary to disturb all these trades and to put on twenty-six new taxes, and that one tax would have been enough, surely I have made out a case against the Budget. But there is one provision in the Budget to which I have not alluded which seems to me to be the very worst in the whole series, and that is the new tax on brokers. If I knew that that was absolutely withdrawn, or if the Chancellor of the Exchequer would tell me now that it was absolutely withdrawn, I would not refer to it further.

It is withdrawn.

Very well. I wish it had been done by the Chancellor of the Exchequer in a formal manner. I have a great hatred of these stamp duties, and I would ask the Chancellor of the Exchequer to give me a return of the stamp duties imposed during the last twenty-five or thirty years, and the amounts they yielded. I believe that we shall soon not be able to turn round without having a stamp put on us if we do not keep our eye on the Chancellor of the Exchequer. The right hon. Gentleman hints that he is going to make an alternative proposal, but I would plead with him to abandon the proposal altogether. He has gone as far as he can go when he dealt with stamps on stock and security contracts, and I would warn him not to make matters any worse by imposing stamp duties on transactions in merchandise. The clause was bad enough in the resolution as it was passed, but now, when we see the Bill, it is a good deal worse. The clause added to the Budget brought three new classes of informers on the scene: first, those who would get a reward for telling of any transactions made without a contract; second, those who would tell if a contract was not stamped; and third, those who would inform if the stamp was not of the right amount. I say that trade and commerce could not be carried on under such conditions. The only other point I want to mention—perhaps the most important point of all—is the effect this Budget will have upon Ireland. Now, this subject has been already discussed this session, and the Chancellor of the Exchequer made a promise which I will recall to him. In the debate on the Address the condition of Ireland was brought before him by the Irish Members, and the right hon. Gentleman used these words^*—

"I would just observe in passing that it does not at all follow, assuming there be in-

^*See The parliamentary Debates, 9th February, 1900 [Fourth Series], Vol. lxxviii., page 1092.

justice to Ireland in the present system, that it would be aggravated by an increase of taxation. Hon. Members who have examined this question know that a greater percentage of certain taxes, according to the calculations which have been made of the true revenue raised in both countries, is raised in Ireland, as compared with the rest of the United Kingdom, than of other taxes. For example, suppose—hon. Members will remember I am not in any way suggesting anything with regard to future taxation; it is much too early in February to do that—but suppose for a moment that it was necessary to raise revenue by largely increased taxation on account of the war, and that the whole of the increase was raised by direct taxation, certainly that would not aggravate any injustice Members from Ireland complain of; that must be admitted by hon. Members opposite. The simple fact is this: Ireland pays a very much less proportion of direct taxation than she pays of indirect taxation, or of direct and indirect taxation taken together."

I think anyone who listened to these words would say that they almost amount to a promise by the Chancellor of the Exechequer that any new taxes which he might have to introduce would not press heavily on Ireland. If he made any such promise as that, he has not followed it up in the Budget before us.

dissented.

I think that the right hon. Gentleman's statement that hon. Members ought not to assume that new taxes would unnecessarily press upon Ireland might be interpreted in that way.

again dissented.

Well, I leave it at that. If these taxes had been devised to press heavily upon Ireland, it would have been impossible to make them more onerous than they are. In a former debate I gave an estimate of the amount which these taxes may produce in Ireland, though on looking further into the matter I believe it was an under-estimate. I think they will produce £1,100,000. The Chancellor of the Exchequer shakes his head, but I have given very close attention to the produce of these Irish taxes, and I must say that, making even a reasonable estimate, it looks to me as if some such amount as I have mentioned might be produced. I shall just mention the figures. I think the tea tax will produce another £300,000, the tobacco tax £160,000, alcohol £270,000, income tax £350,000, and stamps £20,000, or a total of £1,100,000. Now, that is an unprecedented blow to Ireland. Not since 1801 has this House in any Budget laid on £1,100,000 of extra taxation on Ireland; and that it should be done on this drowsy afternoon without an Irish Member being present—[An HON. MEMBER: Hear, hear!]—seems to me one of the most astonishing things when we consider the present state of that country. It is not as if this Budget stood alone. We have had a Report on Irish taxation, and that Report stated that Ireland was overtaxed by nearly three millions a year, and within seven years of that Report being issued five millions of taxation will be wrung out of Ireland by this House more than the Royal Commission declared would be just under all the circumstances if this Budget is passed. The Chancellor of the Exchequer had very correctly stated the principle under which these huge sums were raised in Ireland. That principle, which the right hon. Gentleman said he would stick to till his latest breath—which we all hope will be far distant—is that every person in Ireland should pay per head the same amount of taxation on the same articles as is paid in England. [HON. MEMBERS: Hear, hear!] Now, that seems a simple statement, and superficially a just statement. [HON. MEMBERS: Hear, hear!] Hon. Members opposite admit that. I recognise with the greatest candour that it is a point we have got to contest; but I want to submit some figures to the House to show that you cannot possibly, with any regard to the historic progress of these two countries, carry out that programme. What I propose to do is to quote six figures and six dates stretching over 200 years, to show the proportion that each person in England pays in comparison with each person in Ireland, and to demonstrate that a violent change has taken place on the old system of taxation. In 1690 every person in Great Britain paid £5 7s. for every £1 a person in Ireland paid; in 1760, £6 9s.; in 1815, £5 7s.; in 1837—Itake this year because it was the commencement of the Queen's reign—£4 was paid by every person in Great Britain for every £1 paid per person in Ireland; in 1857 it had fallen to £2 in Great Britain for £1 in Ireland; and in 1897 it had again fallen to £16s. per head in England, to £1 per head in Ireland. Now, you see exactly what we are doing; we are altering the historic disproportion that has existed between these two islands. For 200 years the rich people of Great Britain paid five times as much as the poor people in Ireland, and the load upon the English people was like a feather upon their shoulders, while the Irish people groaned beneath the smaller burden. But within the last fifty years we have changed all that, and now the Chancellor of the Exchequer says that he will insist to his dying day on the necessity of the principle that every person in Ireland shall pay practically the same as every person in Great Britain. If the House insists in carrying out that principle, it will commit the greatest iniquity that a democratic assembly ever committed against a people placed in their charge. They might just as well say that the miserable people of India or of Iceland are as able to bear taxation as the people of Great Britain. They cannot do it, because they have not got it. Within the last fifty years we have destroyed the historic proportion of taxation, while England has progressed in prosperity, and Ireland has simply gone to rack and ruin. Let me just take the question of population. During the last fifty years in this country, the population has doubled, and that that is not the case in Ireland is the fault of this House. In Ireland during the same period the population has decreased by half. Hon. Members no doubt think that has changed now, but that is not so, because last year—1899—the emigrations from Ireland were 9,000 more than they were in 1898, so that the decrease in the population is continuing and growing worse. Then take the figures as to pauperism. Between 1864 and 1898 pauperism in Ireland has doubled, whilst in Great Britain it has decreased by half. In 1899 there was a terrible increase in pauperism; the number of paupers increased from 115 per thousand in 1898 to 124 per thousand in 1899. I will not go further into details which are perfectly familiar to the House, but these are facts of great significance. Here you have two islands, one growing richer and richer every year, and the other going to utter ruin, and yet you apply the same fiscal system to both. There never was a time when the sentiment of the people of England, from the Queen downwards to the poorest in the land, was more kindly disposed to Ireland than to-day; and what is the barrier between? The barrier which stands between the rich island and her poor sister is this House, which heaps new burdens to the extent of millions of pounds on the taxpayers of Ireland. Looking at recent events we may say: "Fair words will butter no parsnips." If this House places upon Ireland new burdens such as those disclosed in this Budget, it is not the slightest use to organise a new regiment of Guards to wear the shamrock on St. Patrick's Day, or to organise State visits to Dublin. This House ought to be just and fair, and let the goodwill of the people flow freely across the Channel. If any hon. Member on this side of the House had moved that the Finance Bill should be read to-day six months, I should have supported the motion, but in the present condition of opinion I fear it is useless to make any protest.

said he was to a considerable extent in agreement with what had been said by the hon. Member for West Islington with regard to finding new subjects for taxation always within a fiscal system based on free trade. But when his hon. friend said that this was an oppressive Budget he frankly disagreed with him, and with respect he submitted that the hon. Gentleman had not proved that contention even with regard to Ireland. Although it might be true that Ireland's burdens would be increased by indirect taxation, it must be remembered that the increase of the income tax, which was by far the largest increase in taxation this year, would fall with greater severity upon the people of this country than upon the people of Ireland. To his mind this Budget ought to receive the support of both sides of the House. It was a frank, straightforward, and honest Budget, and the Chancellor of the Exchequer had not resorted to tricks and subterfuges. Those who held the opinion that we ought to carry the war to a successful issue were bound to approve, on the whole, the proposals of the Chancellor of the Exchequer. There were obviously only two alternatives before the right hon. Gentleman; he might have borrowed, or imposed fresh taxation. Neither of those two alternatives would have been right alone. If he had borrowed all the money necessary for the prosecution of the war, he would have led this country into great financial peril, and possibly disaster, and bred carelessness in our people as to war. Had the right hon. Gentleman imposed taxation alone, and not borrowed, it would have been an unjust and impossible policy, and a piece of pedantic finance. What commended this Budget to himself and he thought the large majority of the House, was that the Chancellor of the Exchequer had happily blended both principles. It was, of course, quite right to suspend the Sinking Fund this year, and those who disapproved last year could not only consistently support the suspension now, but could even point out that last year it was suspended by an amount which, capitalised, exceeded the total estimated cost of the war up to September 30th. This showed what a valuable war chest the Sinking Fund was. It was a pity the right hon. Gentleman did not wait until this year to suspend the fund. His method of borrowing by separate loan was also to be commended. It was most essential that the Transvaal should in some form or other be called upon to pay some considerable portion of the cost of the war, and the security for that must be imperial control. The right hon. Gentleman was perfectly right in increasing taxation. To raise the income tax was just and right, as was also the raising of the taxation on beer and spirits. As regarded the income tax, there was, however, the obvious fact that the increase would fall with great severity on those who derived their incomes from trade or professions, which incomes were very uncertain. The very large increase proposed this year showed the great necessity that existed for a differentiation between certain and uncertain incomes, and for a graduation of incomes. A large and sudden increase like that now proposed made the injustice of the present system more apparent. He knew there was great difficulty in both these reforms; but surely, at any rate, the increase might have been arranged so as to fall more heavily on the larger than on the smaller incomes. With regard to the increase in the tea duty, he doubted the justice or policy of the rise. It was by far the highest increase compared with the increases on beer and spirits. He would go further, and say that the tea duty ought to have been reduced last year or in 1898 instead of the tobacco duty. The very large majority of opinion in the country would convince the Chancellor of the Exchequer that that reduction had not gone into the pockets of those for whom it was intended, but into the pockets of the tobacco trade. Had the right hon. Gentleman, moreover, taken off the twopence on tea last year he would have had a much stronger case for imposing it this year in case of emergency. Even now the right hon. Gentleman had not reimposed the whole amount which he took off tobacco last year. He took off sixpence and put on fourpence. He would have been a great deal better advised had he left the tea duty alone, as the commodity had become a comfort and a necessity for the poor. He thought the taxation of the country was raised from too narrow a source—[Hear, hear!]—but he could not agree with the hon. Gentleman opposite, the Member for Thanet, when he advocated taxation of the necessities of life or the taxation of the commodities which entered into the trade and industry of this country. It was indisputable that Chancellors of the Exchequer had too narrow a basis for indirect taxation. From Customs and Excise last year a sum of fifty-three millions was raised, and that from very few articles.

And why not?

said for many reasons. Supposing temperance reformers succeeded in greatly reducing the consumption of intoxicants, as he hoped they would, there would be a considerable fall in the drink revenue, and then where would the Chancellor of the Exchequer be? Obviously if people did not spend so much money on drink they would be able to spend more money in other ways, but in raising this huge revenue from drink, and at the same time promoting the cause of temperance, they were engaged in two rather inconsistent operations, and it would be very much better for the financial position of this country if there were a far larger field from which to raise revenue. He disagreed with the idea that in time of crises like this they should not reform the financial resources and methods of taxation. In ordinary times, when revenue and expenditure about balanced, the argument was strong for continuing the existing system. He was impressed with the importance of taking stock of our financial resources. It was at a time like this, when a large expenditure was demanded for national objects, that a great Finance Minister should seriously consider the whole basis of taxation and revenue. There were sources from which might be extracted a large revenue—for instance, land in towns. He rejoiced in the great prosperity of the country, but could the continuance of that prosperity be guaranteed? The last two years had been years of great commercial prosperity, but in the natural course of events they would at some time or other possibly give place to trade depression. Then, where would our expanding revenue be? It was to meet this vast and ever-growing expenditure that there should be got into the meshes of the Chancellor of the Exchequer all the subjects of taxation which it was right should contribute towards it, and so broaden and widen the financial system under which we lived.

Athough I approach the subject from a very different standpoint from that of the hon. Gentleman who has just sat down, I cordially endorse many of the concluding remarks in his speech. He pointed out that we had been passing through abnormally good times and spending more and more money every year. I am now speaking outside the requirements of the war. I remember the right hon. Gentleman the Member for West Monmouthshire making a very eloquent appeal to this House to afford support for the Chancellor of the Exchequer for the time being by curtailing the tendency of the House of Commons to increase expenditure. I told him at the time that the reason of that tendency was because inevitably the mass of the taxation fell, comparatively, on a small number of people, and that the responsibility for the expenditure did not fall upon the set of people who paid the piper, and so had a right to call the tune. There is one thing in which I do not agree with the hon. Gentleman opposite, and that is the question of the tea duty. If the tea duty had not been increased, but left at the figure to which it was reduced a year or two ago, it would come to this, that there would be a very large mass of the people who, without this duty, would contribute little or nothing to national requirements. As I said the other day, there is a wide- spread feeling of disappointment at the Budget of my right hon. friend, and what we have heard from the hon. Gentleman the Member for Plymouth shows that that disappointment is not confined to the financial world. My right hon. friend has taken upon himself to lay down doctrines which portend great danger in the future. I think the right hon. Gentleman had a great opportunity. It is perfectly true that if all financiers availed themselves of similar opportunities they would do more mischief than if they altered the fiscal system in a dangerous direction, and the hon. Gentleman opposite was quite right in saying that Mr. Gladstone himself felt that in critical times a Chancellor of the Exchequer might be justified in saying that it was undesirable to raise wide differences of opinion in this country. The right hon. Gentleman does not take that timid view. He does not take refuge behind that argument. He says—

"Shall we confess to the world that a few months of war has frightened us from a financial policy we know to be sound?"

explained the sense in which he used the expression.

I do not wish to do the right hon. Gentleman the injustice of attributing to him a defence of our whole financial policy, but he has rigidly adhered to the system this year. The normal increase of taxation and expenditure requires very careful consideration at the hands of the House. The Civil Service Estimates are mostly responsible for the deplorable position of our financial system. We find year after year an automatic increase of expenditure, and when we try to curtail it we are told that it is regulated by statute. This House, which is supposed to be all powerful in finance, cannot without the assent of the other House of Parliament interfere with it, and this is the constitutional doctrine that the Commons House of Parliament is met with in these days—in other words, that expenditure is beyond our control. It was said just now, with perfect truth, that the limited number of articles on which taxation falls renders us incapable of dealing with any great demand beyond the ordinary requirements. I go further, and I say that, framed as our financial policy now is, it has already proved itself, and is bound in the future to prove itself, unequal to the automatic normal increase I have referred to. If that time has come, the receipts from customs and excise are bound to go down. Are you prepared to continue this policy? I do not think the Chancellor of the Exchequer could rise and tell us any one item which could be dealt with if the direct revenue falls substantially short in the course of future years. He knows very well that Parliament has committed itself to a continually increasing system of expenditure, and that if taxes as they are now framed do not meet the requirements they will have to pay the increase, or some other system must be employed in their room; and that leads me to ask whether the time has not arrived when this question must be fairly faced. I know that my right hon. friend is hopeless in certain directions. I am not going to waste the time of the House giving the old remedies, though I can only say in passing that I should wish my right hon. friend to consider them, and I will add that I am more than ever convinced that we shall never have our financial system on a sound basis until many old opinions and prejudices have been cast to the wind. Now, the Chancellor of the Exchequer must observe that many taxes going, at any rate, largely in a direction which would be stigmatised as protectionist, have been added in quarters which certainly are free from any taint of suspicion of protectionist heresies. I observe that a suggestion for the restoration of the old shilling duty on corn has been very widely advocated in non-protectionist circles. I would describe that as a very slight and halting step in the right direction, but I have never made myself responsible for such a suggestion at any time, and more than that, I never advocated any specific or fixed duty at all. What I have advocated have been importation duties on a sliding scale, with the view of fixing as far as it can be done the price of the necessaries of life in order to avoid the chopping, the ups and downs, and changes in the market so far as possible. But I have sometimes quoted specific duties for the purpose of illustration, and for the purpose of illustration only. I will remind the House that my right hon. friend the Chancellor of the Exchequer, in reply to a question addressed to him—I think it was two years ago—estimated that the financial effect of the imposition of this shilling importation duty would be to produce to the Exchequer in the financial year in which he spoke close upon two and a half millions. The actual figures he gave were £2,450,000, and consequently a duty of 5s.—using that figure for the purpose of estimating the amount—would bring in twelve millions and a quarter, while a duty of 10s. would bring in over twenty-four millions. I have no doubt we will be told that it would be a most oppresive tax to put on 1s. and raise the price of bread to the poor people; and as to 5s., that would be an absolutely ruinous and starvation figure. Therefore I must remind the House of what the actual effect to the community would be of these figures. I cannot tell the House what the effect of the shilling duty would be, because I believe it would be absolutely nil in the way of price, but if it was not nil it would be so infinitesimal that it is hardly worth troubling the House with. The effect of 5s. is calculated, and I believe it is accurately calculated, to produce these financial results. It would involve additional taxation, to be provided from some source or another. I am not going to say what source it would be, and I do not say whether it would be obtained on the theory of two-thirds being paid by merchants and others, and that a smaller proportion would be paid by the consumers. I am assuming that all would be paid by the consumers, and I challenge contradiction when I say that the utmost it could amount to per unit of the population per day would be the very large figure of one half of a farthing. That is called a mite, and I am not sure whether that is still a current coin. It was so in former days. That would be the result of a 5s. duty on corn. I think I have shown the House that it would be infinitesimal. It would amount to seven-eighths of a penny per week per unit of the population, or 3s. 9½d. per year. My object in referring to this is to show that the right hon. Gentleman or his successors will some day or other have to face something in the way of old age pensions. Someone will have to do that. Perhaps my right hon. friend is not himself prepared to face that question. I don't know whether he is or not. Any step taken by Parliament in the direction of old age pensions would be sheer socialism unless it was accompanied by some financial provision ensuring that every person deriving the benefit of such a system should personally contribute substantially towards that emolument. Therefore I think we should not overlook the fact that on so very modest a contribution as I have mentioned we could obtain twelve millions almost unknown and unobserved from the taxpayers of this country. With regard to the particular Budget now before us, my right hon. friend has steered clear, as he tells us, of novelties and of new taxes in addition to those which already lay to his hand. I suppose it would be almost useless calling the attention of the House to the fact that the moment was singularly appropriate for meeting the wishes which have been so loudly expressed in Parliament of the great self-governing colonies that steps should be taken in the direction of establishing preferential trading among the various elements of the Empire. The Ottawa conference showed that that was practically the unanimous opinion of the self-governing colonies of the Empire. Only the other day—and doubtless the right hon. Gentleman's attention was called to it—a suggestion emanated fromCanada—the self-governing colony which has come forward so gallantly at a period of our national difficulties—that some Imperial tax should be instituted which should be in operation throughout the Empire as a contribution towards Imperial defence. That, I think, was an impost which my right hon. friend might not inappropriately have had recourse to in the present emergency in which the colonies and ourselves are placed, but, unfortunately, so far as this Budget is concerned it is crying over spilt milk to refer to it any more. I hope that my right hon. friend will realise that in order to maintain our financial system he must make up his mind to depart from the present narrow basis, which is absolutely inadequate to meet the growing requirements of the present day. Of course, Mr. Hume, Mr. Bright, and all the great economists of the day, acting in conjunction with other politicians, founded the doctrine of peace, retrenchment, and reform. They discouraged armaments, and they practically advocated the giving up of the policy of raising the strength of the Army. They, at any rate, had system in endeavouring to bring down expenditure to the narrow limits to which they thought our taxation ought to be reduced. But that is not the policy of my right hon. friend. He advocates an increase of expenditure, and very properly advocates it. All parties in this House are agreed that if you increase expenditure you ought, as a matter of duty, to consider whether you are prepared to supply the sinews of war whereby the sixty millions may be met. It is always argued that the existing fiscal system of this country is perfect, that it is against our best financial principles to entertain any suggestion which aims at increasing the limits and expanding the sources whence we derive our revenue. That is a very hopeless position. I shall be told that I have advocated nothing but the imposition of taxation. I have by no means exhausted the possible resources of taxation. There are foreign manufactured goods, taxation on which no one can say would interfere with the food of the people, and there are other items which one would have thought would occur to any Chancellor of the Exchequer who desired to extend the resources of taxation. While condemning most heartily the narrow limits within which the Budget is framed, I hope my right hon. friend will not take amiss my suggestion that in view of the admitted fact that our expenditure is continually and systematically increasing, and that all parties are united for the purpose not of curtailing, but of increasing that expenditure—[Opposition cries of "No, no!"]—some material alteration must be made in our financial system in order to meet the requirements of the country.

Although we have a nice quiet House, apparently, with plenty of leisure, I do not think I need devote a great deal of time to arguing against my right hon. friend's proposal of a 5s. duty on corn.

I beg pardon; my right hon. friend quite misunderstood me. Five shillings would be a miserable sum. I advocated a sliding scale which, taking wheat at 40s., would keep it up to that price. Five shillings would be no good whatever.

That is worse even than I supposed. I will not deal further with the subject. Perhaps when the present President of the Local Government Board occupies the position of Chancellor of the Exchequer, the proposal may become a serious matter for this House and for the country, but not till then. Nor will I enlarge upon the heresy which, with all respect to the right hon. Gentleman, we all regard as a leading heresy in economical questions, and which has received a new recruit in my hon. friend the Member for Plymouth. Of all financial heresies I believe the greatest to be the idea that you ought to levy taxes upon the largest possible number of articles. That was what my right hon. friend called one of those "preconceived ideas." I would point out that the revenue of this country, which sixty years ago stood at about £50,000,000, has now reached £125,000,000, a result achieved by exactly the opposite policy. In those days almost everything possible was taxed. To-day, the fewest subjects possible are taxed. The history of that is that when you put taxes, however small, upon a commodity you make it dearer; you make the manufacture of it more difficult; the trade in it less profitable; you make it less accessible to the population; and the people who consume that commodity save less money and add less to the wealth of the country. That is the whole history of it.

Does that argument apply to the death duties?

I will deal with death duties presently. That is one of the few things which are as certain as that from which it derives its name. I really ought to ask the pardon of my hon. friend behind me for the exclamation which escaped me when he quoted Mr. Gladstone, and he said he shared in this heresy. Of all the preachers against this heresy my right hon. friend was the most earnest and consistent, and if the hon. Member would look at the speeches he made when the idea was suggested by Sir George Cornewall Lewis after the Crimean War, he would be satisfied as to the views of Mr. Gladstone on that subject. One of the great objects secured by the commercial Treaty with France in 1860was the abolition of taxes on an infinite number of commodities. But I will not enlarge upon this point, because the Chancellor of the Exchequer is perfectly sound on the subject, and there is no process so unprofitable as that of preaching to those who are already converted. My right hon. friend the Member for Thanet has said that this enormous increase of your expenditure may become a very serious question. Yes, indeed it may. It may drive you to tax commodities of every kind as they were taxed by Mr. Pitt in the great French War. Is that going to improve your financial position? Is that going to improve the condition of your people? What was the history of the people of this country from the conclusion of peace in 1815 when the great weight of taxation fell upon the masses of the people? From 1815 to 1840 the people of this country were in a miserable condition, owing to the intolerable weight of taxation. In 1840, before the income tax was imposed, about £50,000,000 was raised from taxation, of which £41,000,000 was raised upon that which was not property. That was the condition of the taxation of this country at that period. Even so far down as 1860 the proportion was only about £15,000,000 out of the £50,000,000 raised. With the splendid revenue you possess, are you going to reverse the principles upon which it has been built up? I imagine the House of Commons is not going to commit any folly of the kind. But, as I say, with the expenditure going on at its present rate, you may be driven to false finance, and then you will do infinite injury to the people of this country, and especially to the humbler classes, who are dependent for their existence on the wages of labour. But my principal reason for addressing the House to-night is that I desire at this stage—which is the proper occasion for reviewing the financial condition of the country generally—to place before the House what I think may be useful—a view of the distinction between the war Budget of to-day and what would have been a peace Budget. The figures are very few. At this time last year the Chancellor of the Exchequer estimated the revenue at £111,000,000. He was not able a few days ago to give us the exact result, as the financial year has not yet concluded, but he has put it at £16,000,000, or £5,000,000 beyond his expectation. I do not wish to reproach the Chancellor of the Exchequer with that fact, but I do remember that on the occasion of his first Budget, five years ago, he reproached me with having left him a surplus of £5,000,000 which he said was a discredit, saying that it showed bad calculation on my part, and that the duty of a Chancellor of the Exchequer was to make accurate prognostications of revenue and of expenditure.

But I have stood in a white sheet myself.

I have no more to say—a white sheet is always a becoming garment. The right hon. Gentleman has had the advantage of successive surpluses and of successive miscalculations, but I never complain of a miscalculation when it ends with a balance on the right side. It is quite true it is becoming impossible to calculate correctly the growing wealth of the country and the growing productiveness of the revenue. There is only one thing that exceeds it, and that is the incalculable growth of the expenditure. That is a fact, and I daresay when the Chancellor of the Exchequer gives us, as he has promised to do, the accurate figures of the revenue of this year, the amount will exceed the £116,000,000 at which he has put it. The estimated expenditure he took at nearly the same figure, with a very narrow margin—£111,000,000. The actual expenditure, as given by the right hon. Gentleman the other day, apart from the war expenditure, was £110,500,000. Therefore, his peace expenditure was half a million sterling below his estimate, with the consequence that, but for the war, he would have had a surplus of £5,500,000 according to that estimate, and I think I have his consent in saying that the surplus will really turn out to be considerably more than that sum—that is to say, the revenue will be more than £116,000,000. That was the very favourable position in which the Chancellor of the Exchequer would have found himself, and I would direct the attention of the House to what would have been to this country the result of such a condition of things. First of all as regards the National Debt, and then as regards taxation. The Chancellor of the Exchequer has given us what is the increased Debt account with which he has to deal, showing in all an increase of £43,000,000. He has provided for that by the War Loan Bill £35,000,000, and Treasury bills already granted £8,000,000. But that is not the entire view of the case. You must remember that his surplus of £5,500,000—or, as it is likely to turn out, nearly £7,000,000—would have gone in a peace Budget by legislation to the reduction of the Debt under the head of the old Sinking Fund. But more than that, the right hon. Gentleman proposes to suspend the Terminable Annuities next year to the amount of £4,600,000, which in time of peace would have been appropriated to liquidation of debt. If you add the Terminable Annuities and the surplus together, and put the surplus at least at £6,000,000, you will find the sum which, if this had been a peace Budget, would have gone to the diminution of the Debt would have been at the very least £10,000,000, and probably £12,000,000. Therefore, upon this war Budget as compared with a peace Budget we stand upon the Debt account at least £53,000,000 to the bad, even assuming that we have provided for all the expenditure that will take place. I compare that with the situation in which the country was left at the close of the Crimean War. The figures show that at the present time we are £20,000,000 worse off than at the winding-up of the Crimean War, when, after a contest of two years, the sum added to the Debt was £32,000,000. That is a contrast which is deserving of the attention of the House. I pass now to the question of taxation; and how do I find we stand in a war as compared with a peace Budget? The Chancellor of the Exchequer estimated the revenue for next year at £116,900,000, or an increase of about £1,000,000 over the proceeds of this year. I do not know whether he proposes to diminish the amount by drafts made in anticipation of revenue, but I think he is generally the reverse of sanguine in his estimates, and might well calculate upon something more. I would add £1,500,000 to the expenditure of £110,500,000 last year, to meet the normal increase in expenditure, and taking these figures you would have upon a peace Budget an estimated revenue of, say, £117,000,000 and an estimated expenditure of £112,000,000, and that would have given you an estimated Budget surplus of £5,000,000, which would have been available for the reduction of taxation; and I can hardly believe that after five years of enormous prosperity and accumulation of surpluses the time would not have arrived when the Chancellor of the Exchequer, in possession of a surplus of £5,000,000, would not have addressed himself to the reduction of taxation at large. Five millions would have enabled the right hon. Gentleman to make a sensible decrease in the income tax, to diminish instead of increasing the tea duties, and, in fact, to give sensible relief to the taxation of the people. Instead of that you have increased taxation by upwards of £14,000,000, including the arrears of the increased income tax. I add to that, on the same principle which I applied to the terminable annuities, the £5,000,000 which might have come in diminution of taxation, and I say that in the place of a diminution of taxation of £5,000,000 you have an increased taxation of £14,000,000. So that on the head of taxation we are £19,000,000 worse off than we should have been on a peace Budget. That seems to me a very serious matter which deserves the attention of the House. I do not know that, in the face of this enormous expenditure, the Chancellor of the Exchequer could have done better. That I have already frankly admitted, and I do not think the right hon. Gentleman or his friends will ever say that I have been a captious critic of my successor. I have always rejoiced in the prosperity of his Revenue, and approved of the principles on which he has proceeded—with one exception, namely, when he struck £2,000,000 off the Sinking Fund. If he had not struck that £2,000,000 off the Sinking Fund, imitating the bad example of his predecessor, the First Lord of the Admiralty, he would now have had a far larger sum in the war chest with which to meet his expenditure. We have said what we had to say upon that subject, and I hope that the Chancellor of the Exchequer will stand again in a white sheet. There is one thing which I would like to ask the Chancellor of the Exchequer. I cannot find anywhere in the right hon. Gentleman's speech or in his tables any provision for the payment in the coming year of the interest upon the war loan.

I have included that in the £35,000,000.

Oh, in the £35,000,000! But, surely, when you raise a loan you ought not in the interest of sound finance to mix the payment of interest up in a hypothetical margin. Who ever heard of providing the interest of the debt out of the loan by which that debt is created? What sort of finance is this? It ought to appear in your table as being in addition to the sum provided in the fixed charge, or at least as an item of the Consolidated Fund charge. It ought to be added to the charge for the National Debt, which you have reduced to £23,000,000, and which you have increased by this loan to £24,000,000, or something more. I turn now to the death duties, and I see sitting opposite to me the hon. Member for King's Lynn. There is a process known in the Church of Rome as canonisation, in which it is thought necessary, in order that all the defects and offences of the person it is proposed to canonise should be properly presented, that an officer known as the avvocato del diavolo should be present. The hon. Member fulfils that part to perfection in pointing out the defects, real or imaginary, in the death duties. The hon. Member for the Woodbridge Division of Suffolk is more limited in his opposition to the duties, because he only attacks them in the interest of one class—the landowners—while my hon. friend the Member for King's Lynn objects to them universally on principle. I have always been willing to say very frankly that in dealing with so composite and large a question errors may have occurred, and no one would be more pleased than I should be to see them properly corrected. One objection to the duties taken by the hon. Member for King's Lynn was that they were difficult to calculate. All taxes are difficult to calculate, but this particular tax is remarkable, because it always exceeds the calculation made. At the time the death duties were passed in 1894, with the able assistance of my friend Sir Alfred Milner, the calculation I made was that the result of the new duties would not be less than an addition of £3,500,000 to the existing yield. In that year the death duties brought in£10,000,000, and our calculation was that the future yield would be £13,500,000, and might possibly go as high as £14,000,000. But £14,000,000 was the outside of the ultimate yield we expected, though it would not be available for several years; £3,500,000 was the figure at which we thought it safe to fix the final increase. But to-day the Chancellor of the Exchequer estimates the death duties at £17,500,000; and the result, therefore, is that they have yielded in five years more than double the £3,500,000 at which we put the increase. To what has that been due? It has been due to the undiscovered and incalculable wealth of this country. People talk about millionaires. My hon. friend the Member for King's Lynn declared that under our legislation millionaires would be abolished and would no longer exist. No, Sir, we have not abolished millionaires by that legislation. What we did was to discover millionaires who never would have been found out but for our process of aggregation, because instead of treating a man possessed of a million as if we were only possessed of smaller sums in hundreds and thousands of pounds, we got the larger share from what was in fact a larger fortune. I was a little sorry to hear the tone in which the Chancellor of the Exchequer spoke of the author of the recent windfall under the death duties, because you ought not to look a dead millionaire in the mouth. An hon. Member who sits for the City of London said the other day that capitalists were a necessary evil. That is not my financial view of them at all. I look upon them as an indispensable good. I rejoice in their existence and I am consoled in their death. No doubt, as in the case of all taxation so in the case of the death duties, there are a number of people who are always devising some method of evasion. The great preacher of evasion is the hon. Member for King's Lynn.

That is not true. It is absolutely contrary to the fact. What I have preached is avoidance. I have always reprobated evasion. Avoidance, as I have defined it, is to do what is permitted by the Act to escape the duty. Evasion is to do what is prohibited by the Act.

I will accept the explanation of the hon. Gentleman. When I was at the Bar there used to be a plea of the special pleaders called "a plea of confession and avoidance," and it is a plea of that character the hon. Gentleman has put forward. But I will accept the word "avoidance." If the hon. Member for King's Lynn preaches avoidance, the successful practitioner of avoidance is the hon. Member for the Woodbridge Division of Suffolk, who has fathered some amendments which may result in avoidance in favour of the class he represents. I cannot say that I wish him success in his efforts. The great difficulty in our way in this matter is the difficulty of dealing with settled property. All other property is quite simple; but settled property is surrounded by legal complication. One of the great difficulties we have had was in connection with the accidental omission of the clause in the Succession Duties Bill, which would have obviated the errors which have occurred. I am delighted to have an opportunity of offering my thanks to the hon. and learned Member for Haddington, who has publicly claimed the authorship of clause 2 of that Bill, and if it has not fulfilled all his expectations it must be remembered that this question of settlement is necessarily a difficult one. We endeavoured, by giving the immense advantage to settled property that it should only pay once upon all the lives included in the settlement, to meet a great part of the difficulty; and in order to compensate for that advantage, we thought it necessary to make an additional charge of one per cent. But I am now convinced that settled property at present enjoys a great and exceptional advantage to which it is not entitled—that the accumulation of lives and the one simple payment upon them is not compensated for by the one per cent. extra charge, and if there is to be any change in that matter it certainly ought not to be in favour of settled property, which already enjoys advantages to which it is not entitled. That, at all events, is the result of my experience. Therefore, I am glad that the Chancellor of the Exchequer proposes in the Finance Bill to place settled property on the same footing as other property in respect of the limit of twelve months before the decease of the party making the alteration. The Chancellor of the Exchequer was good enough to say that he acknowledged the advantages given in the Budget of 1894 to the landed interest as regards what was done in respect of Schedule A for their benefit. It is agreeable in these times to have even one of the many who were benefited return to give thanks, and the views of the Chancellor of the Exchequer are not the less pleasant because they are unique. The new Estate Duty, as everyone must admit, has given a revenue which is of great use to the country at this crisis; and it has yielded twice as much as was expected, in curious contrast to the succession duty of 1853, which tax did not yield one half what was expected, and never yielded the whole of what was calculated because at that time life interests introduced such a drawback that it was not until we dealt with the matter apart from that obstacle that we were able to put the duties on a footing that enabled, us to derive a solid revenue from them. I know an objection is made to the tax on the ground that it is a tax upon capital. That might have been true at a time when, after the great war, there was a great deficiency of capital in this country. But there is no deficiency of capital in this country now, as is proved by the number of companies floated every day, and the amount of capital invested abroad for unremunerative purposes, and it is not a bad thing that out of the hundreds of millions sterling wasted in that manner, this country should derive a few millions in the form of taxation; and there is no reason whatever to think that the removal of that capital has any injurious effect upon labour in this country. One more remark upon the death duties. It is generally supposed that they weigh disproportionately heavily upon real property. But the amount levied upon real property is extremely small. If you look at the last return of the Inland Revenue you will find that the amount levied upon land is an insignificant portion of the £17,500,000 yielded by the death duties. The aggregate has been raised by £7,000,000, but a great deal of that has been diverted to the local taxation account as a subsidy for the rates. Then there is the beer duty. I find that among my friends the brewers the beer duty is now met with curses not loud but deep. In my time they were not only deep but very loud. In 1894, I remember, my hon. friend the Member for Wimbledon was most anxious to assure the House that it was not the duty on beer he objected to, but that what he was really solicitous about was the terrible effect the 6d. a barrel would have on the price of barley. We were told that we were ruining the agricultural interest. I do not remember exactly the figure which the present Chancellor of the Exchequer said that 6d. a barrel would inflict in the way of taxation upon a quarter of barley, but I know the agricultural interest rose in flocks to declare that 6d. on a barrel of beer would be ruinous to barley—that it would amount to a tax of 2s. a quarter.

I never said so.

No, I think you were too discreet. I did not enjoy a majority of one hundred and fifty. I could only boast of about fourteen. But I was overwhelmed with the wrath of the ruined agricultural interest, which, I was told, would be destroyed, especially in the eastern counties. I should like to know now at what exact figure hon. Gentlemen put the shilling on a barrel of beer converted into a tax upon barley in the form of malt? It ought, according to the traditions of that time, to represent a tax of 4s. on a quarter of barley. But a Unionist Government is now in power, and they have become more patient, and the ruined agricultural interest is, at all events, silent to-night. (Laughter.) I should be very glad to know—and I am speaking very seriously now—that the agricultural interest is in a less disastrous condition than it was in 1894.

Very little.

Then what is going to happen to the barley? I will put it, then, that the more cheerful, the moderately cheerful, condition of the agricultural interest on the subject of the beer duties is extremely satisfactory. It is one of the advantages of the change of Governments in this country—and we hear a great deal about party Government now that you shunt a great deal of nonsense. The Protectionist Party, that has gone; the party of a tax on malt, that has gone now, and there are many other fallacies of different kinds that were got rid of in this manner. And, no doubt, it is very satisfactory that we do not hear to-night the sort of arguments against the beer duty that we have heard on previous occasions. There is no form of taxation that is satisfactory to Gentlemen opposite. The death duties were anathema; the beer duty was destructive of the agricultural interest, and the spirit duty—well, that was worse than all. But now, when similar conditions arise to those of 1894, and there is a call made for money for the defence of the country as it was then, the Unionist party have dispelled their prejudices and they are willing to accede to that which they rejected before. On the whole, I do not greatly criticise the proposals of the Chancellor of the Exchequer. For myself, I think he might have raised a little more by taxation. I am not sure it has not yet to come. We are not at the end of our expenditure. I hope we are not going, in the future, to depend entirely upon borrowing. If you are not, then you are going to have more taxation. Everything tends, so far as I can see, in Gentlemenopposite—and I cannot answer for everybody on this side of the House—to encourage all those ideas, all those dispositions which are entirely in favour of increased expenditure. You may depend upon it, whatever you may say, whatever you may argue, and whatever may be the basis of your taxation, that this increase of expenditure, not by hundreds of thousands but by tens of millions, year after year, does, and must, mean increased taxation. I do not know whether we may be reduced to a taxation which is unsound in its principles, by extending it to all commodities. Most Gentlemen will remember the catalogue of Sydney Smith of the commodities that used to be taxed until it reached the nails in the coffin of the pauper. You may be reduced to that at the rate you are running into expenditure. I hope I may not see that day, but as long as I have the honour of a seat in this House, I shall continue to raise a warning voice against the inordinate increase of the expenditure of this country.

The right hon. Gentleman has drawn a true picture of what is in prospect. Undoubtedly, we have to look for a vast increase in our taxation, and I should have thought that that would be a reason why we should give some consideration to our system of taxation. The right hon. Gentleman is quite content that this country should go on levying a larger amount in customs duties than is levied by any other country in Europe. He is consoled, by the fact that the duties are few, for the other fact that they are outrageous. The Chancellor of the Exchequer agrees with him, but in doing so disagrees with the First Lord of the Admiralty and the First Lord of the Treasury, because both these right hon. Gentlemen have appealed for the discovery of more objects of taxation. The right hon. Gentleman is in favour of piling up our taxation on its present objects, and that he regards as sound finance.

Hear, hear!

I am glad there is one amongst the party opposite who agrees with the right hon. Gentleman. The right hon. Gentleman accuses myself and my hon. and gallant friend the Member for the Woodbridge Division of Suffolk of being in partnership as devil's advocates. Our partnership is a limited one, but undoubtedly we are to some extent, though on different lines, devil's advocates in pointing out the defects—the numerous and awful defects—of the right hon. Gentleman's Act. No, doubt the right hon. Gentleman expects at some future time to be canonised for that Act.

It is canonised.

Then if it is canonised it ought to be under the title of the "Impenitent Thief." That is the only appropriate name I can think of. The right hon. Gentleman talks about millionaires. He is never tired of boasting about his millionaires, but they are artificial millionaires, whose millions do not exist and do not pass. The right hon. Gentleman knows as well as I do that he has built up an enormous fabric of wealth which does not exist except for the purposes of the Act, a consecrated phrase which indicates a thing which does not exist. These millionaires, though artificial in their millions, are very real in their deaths, and the death duties themselves are very real, but when the right hon. Gentleman takes credit for increasing the number of millionaires, I wish to point out that they are merely artificial. Now as to evasion, the right hon. Gentleman has "evasion" on the brain, and I sometimes think the Chancellor of the Exchequer has caught it from him. They are always talking of evading the death duties. Why, if you listen to these right hon. Gentlemen, a man evades the death duties by not dying. I shall next expect hear that the right hon. Gentleman for millionaires the methods known to the Italian poisoners in order that he may the more speedily come into his own. The right hon. Gentleman told us, and the Chancellor of the Exchequer in the clause he proposes tells us, that when a man gets rid of his money in his life time and does not leave it to be taxed at his death, that is evasion.

That is not my clause.

I am going to attempt to show that it is. First of all let me remark that there is here no evasion. When I asked a modest question the other day the right hon. Gentleman, by the mouth of his acolyte the Secretary to the Treasury, replied that this duty was no new duty at all, but was in order to stop the evasion of the existing duty.^* The right hon. Gentleman talks of death being certain; but there is nothing so uncertain as death. It sometimes comes to the wrong man and at the wrong time; to the son first, to the father next, and to the grandfather last; and that constantly upsets the operation of the death duties. The whole argument on the evasion of the Act is fallacious. If a man divests himself of his property during his life, if he gives it away or throws it away, there is no evasion of the Act. There may be avoidance, and Mr. Justice Chitty has expressed a very clear opinion on that point. At a time when the death duties have reached an amount such as the wildest dreams and imaginations never expected, it is the height of cruelty and wantonness to screw up the Act, to close the door which was left open by the right hon. Gentleman opposite, and to impose an entirely new duty. What does the right hon. Gentleman propose to do? Clause 10 says that—

"In the case of every person dying after the 31st March, 1900, property, whether real or personal, in which the deceased person or any other person had an estate or interest limited to cease on the death of the deceased shall, for the purpose of the Finance Act, 1894, and the Acts amending that Act, be deemed to pass on the death of the deceased, notwithstanding that that estate or interest has been surrendered, assured, or otherwise disposed of, whether for value or not, to or for the benefit of any person entitled to an estate or interest in remainder or reversion in such property, unless that surrender, assurance, or disposition was bona fide made twelve months before the death of the deceased, and bona fide possession and enjoyment of the property was assumed there under, immediately upon the surrender, assurance, or disposition, and thence forward

^*9th March, 1900, See page 485 of this Volume.

retained to the entire exclusion of the person making the same, and of any benefit to him by contract or otherwise."

Well, I venture to say, as the Court has decided, that this is a tax upon property which does not pass, and has not existed to pass. I think I have shown that this is an entirely new duty, a duty which the Courts have decided was not imposed by the Act of 1894.

It was imposed on all unsettled property.

That is so. It was thought to be imposed; it was perhaps intended to be imposed by the hon. Member who drew this remarkable clause—a clause which I remember the right hon, Gentleman justified by explaining that if the clause had been intelligible the House of Commons would never have been expected to pass it. I say this is a new death duty, and when I remember the fervour with which the right hon. Gentleman, the present Chancellor of the Exchequer, pleaded for the interest of property, I am astonished that he should dare to impose in the year of the largest returns from death duties, a death duty of his own. I recognise that Clause 12 is unquestionably desirable to get rid of a small defect in the principal Act, but in regard to Clause 11 the case is quite different. As the right hon. Gentleman knows, and as everybody who has studied the Act knows, the great central weakness of the Act was graduation founded on a scaffolding of aggregation. The effect of graduation is sometimes exceedingly remarkable. A very small amount added to or diminished from the aggregate may make an enormous difference in the rate of duty. When the Chancellor of the Exchequer proposed three separate aggregations, the Attorney General said he was quite right; that the only practical and sensible method of dealing with the matter was to require that property passing by settlement should be aggregated separately. I applauded him then. I admired him then as I do now, but more then than I do now, because so far as I can gather, he is going to make himself an accomplice in what he formerly denounced. There is only one sound principle in regard to this aggregation, and I propose to apply that principle by a small Amendment which will make a very slight difference in the amount of duty received; and that is that you should only aggregate that which passes. The right hon. Gentleman proposes to bring in aggregation that which is not in it. The end of the Clause is so remarkable that I perceive he is acting here contrary to the settled principles of taxation—he proposes to deal with what he conceives to be hard cases. There is this most extraordinary proviso at the end of Clause 11:—

"Where settled property passes, or is deemed to pass, on the death of a person dying after the passing of this Act, under a disposition made by a person dying before the commencement of part 1 of the Finance Act, 1894, and such property would if the disponer had died after the commencement of the said part, have been liable to estate duty upon his death, the aggregation of such property with other property passing upon the first-mentioned death, shall not operate to enhance the rate of duty payable either upon the settled property or upon any other property so passing by more than one-half per cent. in excess of the rate at which duty would have been payable if such settled property had been treated as an estate by itself."

What is that but ousting the aggregation and crippling the graduation? I shall wait with great interest the explanation the Chancellor of the Exchequer will be able to afford us as to the genesis of this clause. Under the present system the right hon. Gentleman is levying an enormous tax on a few hands. Some people will no doubt approve of a system whereby those who have the largest incomes pay twice as much Income Tax as there is any need for them to pay if the burden were properly distributed. The total income of this country now is estimated by the most capable of statisticians, Sir Robert Giffen, at 1,600 millions. Now an Income Tax of 1s. in the £1 would on that sum yield eighty millions. The total income of those having incomes over £160 would be, this year, 800 millions; three years ago it would have been only 729 millions. Well, 1s. Income Tax on 800 millions would give forty millions; but, as a matter of fact, instead of taxing 800 millions you only tax 500 millions, and that at 1s. Income Tax gives you twenty-five millions. The fact is that through the exemptions and abatements, and the escape of the lower class, 1s. Income Tax is paid instead of 7½d., if it were more equally levied. The Chancellor of the Exchequer has this year increased the direct taxation somewhat more in proportion to the indirect; but if we are going to rely on direct taxation the time has come when we will have to recast the system and extend it to those who at present pay little or nothing. It would be a most excellent thing in the public interest, for it would bring home to those who at present do not pay an interest in public affairs through their pockets. Without presuming to say by what exact method the change should be made, I think it would behove the Chancellor of the Exchequer to consider whether he is to go on exempting an enormous amount of income, or consider whether it is politic to exempt or even partially to exempt incomes above £160 and below £700. I regret that the Chancellor of the Exchequer should impose a new death duty and rest upon the aggregation clause; but in regard to the rest of the Budget I join in the chorus of approval in the circumstances that have taken place. The time, however, must come when we should recast our system of taxation; but no doubt this is scarcely a very convenient time to do so, although by piling up the taxes upon the present very small basis the inequality has been added to. A time of urgency is not a time to discuss new methods of taxation; and except as regards the points I have alluded to I think the right hon. Gentleman's Budget a very good one.

I wish to correct a misapprehension which appears to be in the mind of the right hon. Gentleman who sits below me and of the hon. Gentleman who has just spoken. I was not in the House when the hon. Gentleman alluded to the matter, but I believe he referred to me as having claimed the credit of being responsible for the life estate part of Clause 3 of the Finance Act, 1894. I had nothing to do with the life estate clause. As regards the "allusive" clause the right hon. Gentleman who sits below me says I claim the credit for the form of that clause. No, the credit of that clause belongs to the right hon. Gentleman himself. What I did say in the course of a lecture which I gave some time ago to a legal society on the subject of the death duties was, that the form of legislation by reference in this clause was suggested by Sir Alfred Milner and myself to the right hon. Gentleman, and that he had adopted it. That had nothing to do with the life estates clause. The "allusive" clause, as it was called, combined amendments in the Finance Acts of the two Parliaments of 1889 and 1881, and Sir Alfred Milner and myself suggested that the shortest and most concise way of incorporating existing legislation was by reference. That is the plan which was followed, and I congratulate the right hon. Gentleman on having adopted a plan of which I think he need not now be ashamed.

said that an important point referred to, not for the first time, was the largely increased expenditure of the country. Hon. Members prided themselves, and he thought justly—because that was the attitude taken up by the present and the late Chancellor of the Exchequer—on the present principle of taxation in this country. At the same time, they expressed a fear that this increased expenditure might drive the country back into the old methods. Very possibly it was the very success of the present taxation, and the ease with which it was collected, that to some extent caused the present excessive expenditure. In his opinion, any small return to the old system of taxation would at once bring up short the expenditure. The question we had to ask ourselves was not so much whether the expenditure was large as whether we got value for our money. In his opinion, the money spent on education was well spent, and even more might be spent to greater advantage. The right hon. Gentleman had referred to the expenditure on the Army and Navy as "spasmodic," but he did not think that was a term which could be fairly applied to it, because there had been a continuity of policy, the results of which had been voted satisfactory. The money which had been voted for the Army and Navy during the last ten years had been the truest economy in the best sense of the word, and had resulted in a truer gain than other expenditure. Only imagine the position we should have found ourselves in six months ago, if that expenditure had not taken place. With regard to the suggestion that more objects of taxation should be found, he thought there appeared to be some confusion of terms, because it was not the commodity, but the individual who paid the taxation, and he did not see what difference it made to the individual whether he paid £5 a year on tea, or the same amount on sugar. At the present time, the elasticity of our revenue was shown by the fact that by very small impositions we were able to increase our revenue by many millions; but he argued that a multiplicity of extra subjects taxed was not necessary. If one founded a house, one did not build it on a bed of shingle, but on a few substantial blocks, and, the same principle applied to taxation, in the present case a multiplicity of taxable subjects would be a bed of shingle. As the Chancellor of the Exchequer had said, the country must be gratified by the fact that we could raise the enormous expenditure that was necessary without making any radical change in our system of taxation. As to the remarks with respect to the comparatively large increase in the tax on tea, compared with that on wine and beer, he pointed out that it was because the tea tax had been reduced so largely in recent years. It was an abnormal tax which we would like to see reduced again as soon as possible, but that remark did not apply to wine and beer; but at the same time there was a limit to taxation, even on such subjects as wine and beer. He was glad to hear that the Chancellor of the Exchequer had provisionally withdrawn the clause as to the extra stamp duties. He had heard the Chancellor of the Exchequer say that the business classes would stand being taxed, but that they would not stand being worried, and he was convinced that the collecting of the £150,000, which it was estimated the new stamp duties would have realised, would have caused more worry than the sum expected to be realised was worth. There had been some considerable discussion with regard to the death duties, and the right hon. Gentleman the Member for West Monmouthshire had accused him of taking an interest in the death duties only so far as they affected landed interests. He was glad the right hon. Gentleman had made that accusation, as he now desired to support the proposed clause imposing estate duty on settled property where the life interest had not been made over more than twelve months before death. He wanted to see an equality of treatment and a twelve-months rule, so applying to property which had been transferred or settled more or less than twelve months before death. There was injustice in that matter, of which we had a right to complain, and he asked for a readjustment in connection with this matter, which would apply to the various disputes and difficulties which now arose. The clause dealing with the matter was the result of the labours of the Departmental Committee, which was appointed to deal with the question, and of which he was a member. He hoped that the House would not regard clause 12 as an increase of the duties, but as a remedy for undue leniency on the one hand, and undue hardship on the other. We had been told that the Act was unduly lenient on landed property. The Member for King's Lynn said so, but one of the difficulties in following him was to know what his real principles were. As to the Member for West Monmouth, he entirely differed from him as to the incidence of the taxation of securities and landed property. These, he must admit, must be differently dealt with. The value of land had gone down and remained at its lowest ebb, but the country was small and the population was large, and therefore it was a great privilege to own a considerable area of land, and that privilege must be paid for. A man with £100,000 worth of securities could sell £10,000 worth, and the value of the remainder would not be affected, but the sale of a quantity of land might deteriorate the remainder of an estate. He maintained that the burden of local taxation which fell on real property was largely in excess of what it used to be. A Royal Commission on the subject was sitting at present, and its decision was anxiously awaited, and he deprecated increasing taxation on realty until they had its report. He compared the position of a man who had a farm of 300 acres, and who had a difficulty in making a living and keeping it properly equipped, and that of a man who had £10,000 a year from foreign securities, and who was not the employer of any labour beyond domestic servants. Their relative positions with regard to taxation were very unfair. The right hon. Gentleman opposite did not appear to believe in the reality of agricultural distress.

I did not allude to agricultural distress particularly. I only said that I have observed that the agricultural Members appear to object less to the tax now to be put on beer than they did to the 6d. which I proposed a few years ago.

The agricultural interest was not behindhand in paying what was necessary at this exceptional time, and the right hon. Gentleman's tax was not proposed in order to pay for a war. It was because there was a general feeling that all classes should help to provide the money now required that the agricultural interest did not object to the new tax on beer, but he was afraid that the brewers, in order to recoup themselves, would use less barley, and that the farmers would suffer inconsequence. He hoped, when all other industries were prospering, that agriculture would revive, and, in regard to this Budget, they all wished to express their willingness to bear any share of the burden that was put upon all. The Budget, as a whole, appeared to him to show that the country was in a position to bear the heavy taxation in a manner which would earn us the respect and appreciation of our well-wishers; but, perhaps, what was even more desirable, the respect of those who did not wish to see it as prosperous as we all wished to see it.

The Chancellor of the Exchequer assured us that, at whatever cost, this war was to be brought to a successful termination. We have to decide how that particular cost has to be borne, how much to be raised by taxation and how much by loan; in other words, how much is to be paid by ourselves and how much by posterity. By an intelligent anticipation of events the Chancellor of the Exchequer has arranged that the Boer Republics should pay something like two-thirds of the cost of this war when they become British colonies. They are to be saddled with a debt of £43,000,000. So much the better for us—but we have to wait until they are additions to the Empire—assuming that they will be added to the Empire before the end of the year. I think it will be better to wait until we have had time to administer them, until we see what is wanted for their own purposes, and how much is available as interest and sinking fund for this £43,000,000. At any rate, we cannot look upon this £43,000,000 as repaid to us until we have had some experience of the cost of administration of the Boer territories. We have further to consider what sums will have to be paid by these territories as compensation to the loyal colonists of Cape Colony and Natal. That will undoubtedly amount to a considerable figure, which will lessen the power of those territories to bear a debt of £43,000,000. Therefore, with regard to the cost of this war, £43,000,000 of it is a debt which may or may not be repaid to us, and we are only being called upon to pay the difference of £12,500,000. I think the Chancellor of the Exchequer has let the present taxpayer off somewhat too easily. I know that that is not a very popular view, but still I cannot help feeling, having regard to the extraordinary wealth of this country, and having regard to the fact that the vast majority of persons in this country are in favour of this war, that the Chancellor of the Exchequer might have increased the proportion to be raised by taxation, and lessened the amount to be borrowed. What is the position as compared with the last time we were engaged in a great war? It is assumed that this war will be over by October, and it is estimated that it will have cost £60,000,000, or a little over. Of that sum £12,500,000 is to be raised by increased taxation, and £43,000,000 by loan. During the Crimean War £29,000,000 was raised by increased taxation and only £37,500,000 by loan, so that this war is going to cost the taxpayer to-day less than half what was the yearly cost to the taxpayer at the time of the Crimean War. It may be said that the situation is different from what it was at the time of the Crimean War, as there was then no prospect of an indemnity. In regard to this war, I think the prospect that the Boer Republics will be able to pay an indemnity has somewhat influenced the soundness of the financial principles of the Chancellor of the Exchequer. I venture to say that if we were at war with any country in Europe, and estimating what that war would cost in one year, there would be a very much larger sum raised by increased taxation, and a very much smaller sum by loan. Of course, it is said in regard to this war that posterity will very largely benefit by it, and that that is not an argument which can be used in regard to a war with a European Power. I do not think that argument will bear close examination in the present case. It appears to me that we are fighting to-day to defend the rights and interests of our own British subjects and the honour of the British Empire. In going to war with the Boer Republics, we are not considering posterity at all in the matter. We are fighting to maintain the supremacy of the British Empire of to-day, and if in the process of defending that supremacy we do something for the benefit of posterity, so much the better for posterity, but I cannot see that that is a reason why we should not take upon ourselves the burden of the war, which is ours, and ours only. Apart from this question of the interest of posterity in this war, there is surely another good reason why a larger sum should be raised by increased taxation, and that is that it is advisable that the expense of war should be brought home to every taxpayer in the country, and I am afraid this Budget, which has been hailed with approval throughout the country, will not accomplish that purpose. They will be apt to forget that we may be in a year or two engaged in a war which will cost a very great deal more, and will lessen their idea of their own responsibility in regard to the persons they return to this House. The Chancellor of the Exchequer will tell us that all classes are to pay the increased taxation he has placed on the country. I venture to think that that increased taxation will be paid by three classes—the income-tax payer, the beer and spirit merchants, and the tea drinker. The income tax has always been considered a war tax. Whatever may be the origin of the income tax, I do not imagine any Chancellor of the Exchequer or any House of Commons would be able to abolish the income tax in time of peace, although there is no doubt it might be somewhat considerably reduced. As the payer of this tax has always looked upon it as a war tax, he is always ready when a war comes to have the tax increased to pay some of the cost of the war. He is certainly doing so to a large extent in this case, and he is paying out of the increased taxation to be raised something like two-thirds. Further, as as there were in the time of the Crimean War no graduated death duties, he is contributing both in time of peace and in time of war a very much larger sum in proportion than he used to. I think the Chancellor of the Exchequer might well have raised the tax to 1s. 2d., making £12,000,000 extra revenue, and I do not think the income-tax payer would have grumbled to any extent. In regard to indirect taxation, I wonder what has become of the financial courage of the right hon. Gentleman. Hardly any of this indirect taxation will reach the consumers of dutiable articles, except the consumers of tea. The tax on beer and spirits will have to be paid almost entirely by the brewers and the shareholders in breweries, and to a small extent by the retailers. If they are going to recover that from the consumers they can only do it in one way, and that is by giving an inferior article for the same price they used to pay for the superior article. I am sure the indirect taxation which results in that is not taxation which ought to recommend itself to any Chancellor of the Exchequer. With regard to tobacco, tobacco is now to be placed in nearly the same position as in 1898, before the tax was reduced. The result is that the consumer of tobacco at a time of national crisis will be able to smoke his pipe at the same price as in 1898 in a time of peace.

The price has been increased.

Tobacco merchants absorbed nearly the whole of the reduction given two years ago, and, having absorbed that, it will be very shabby on their part if they now increase the price to the consumer. The tobacco trade is certainly a sufficiently lucrative one to pay something towards the extra expenses of the country in time of war. When I come to tea, there is no doubt the consumer will have to pay. Every old woman as she watches her dish of tea stewing on the hob will have the satisfaction of knowing she is paying towards the cost of the war, and I am rather sorry for those persons who, like the hon. Baronet, the Member for Cocker mouth, are teetotalers, because it seems to me they will be in the position of having to pay more for this war of which they do not approve, than the income-tax payer who is not a teetotaler, but a moderate consumer of beer or spirits, and who cordially approves of this war. I think the right hon. Gentleman might have raised by indirect taxation a sum altogether of £12,000,000 over and above the amount raised in time of peace. We should then have been able to pay £24,000,000 towards the cost of this war, a sum which represents a very much fairer proportion of the cost that should fall upon us than the paltry sum the Chancellor of the Exchequer has called upon the country to pay. We should have thrown upon the taxpayer a sum which would have brought home to him his financial responsibility, and which would have made him aware that it is impossible to go to war without having to suffer something for it. Under the present Budget there will be a very large number of taxpayers who will pay practically nothing at all, and that is not at all a situation to be desired. I think it should be arranged that in times of war all classes should be called upon to pay equally towards the cost of that war, and the increased taxation should be so arranged that the burden does not fall upon a somewhat limited number. By such a course we should raise a much larger sum, and afford a more edifying spectacle to foreign nations than is shown them by persons who are helping to pay for this war by subscribing to a good investment and pocketting a substantial premium.

The present year is so momentous an epoch in the history of British finance that I feel it requires exceptional courage to take part in this debate, and this is particularly the case for a new Member. I am conscious that in trespassing on the time of the House in the present circumstances I shall have to appeal in a peculiar degree to that generosity with which those who speak in these precincts for the first time are always treated. But the gravity and tension of the financial situation, the heavy difference which exists between the necessary expenditure of the year and the highest level the revenue can be expected to reach are, I hope, circumstances of justification for me, because I am one of the few Members of this House whose life has been passed among deficits, and whose financial experience consists largely in endeavouring to bring revenue up to the level of expenditure. When the Chancellor of the Exchequer announced the other night a considerable deficit, the word rang in my ear with a familiar sound, and I felt myself on well-known and oft-trodden ground. Turning to the proposals contained in the Budget, I hope the universal approval with which they have been met will not cause the right hon. Gentleman, the Chancellor of the Exchequer, to view with disfavour the tribute of sincere admiration which I desire to offer. He deserves all the praise he has received for his doctrine, and even more than he has received for his practice. The right hon. Gentleman the Member for West Monmouth says the sound financial principles of the Chancellor of the Exchequer have been clipped and nipped in practice in order to fall in with the views of those who sit on this side of the House, about whose capacity for sound finance he is rather sceptical. I venture to think that the proposals of the Chancellor of the Exchequer are on all fours with his doctrine, and that in the Budget he has carried his principles to their fullest legitimate conclusion. Mr. Gladstone was in the habit of saying that in framing schemes of taxation you must be bold, intelligible, and decisive. I venture to claim for the present scheme the merit of all three qualities. The proposals are certainly bold, for they comprehend the largest increase of taxation ever proposed to this House. In the year of the Crimean War—the year with which the right hon. Gentleman opposite contrasts the present so unfavourably—the total increase was only £10,000,000, while in the other great war period, at the end of the last century, it required the cumulative effect of four Budgets to increase the taxation of the country by the amount which is now being imposed by one Budget. Even allowing for all the vast increase of wealth which has taken place, the mere statement of those figures is sufficient to absolve the proposals from the charge of being either timorous or commonplace. They are certainly intelligible. On all sides it has been admitted that straightforwardness and an absence of juggling are amongst their main characteristics. They are essentially honest and straightforward, and the reception they have been accorded would not be given to any complicated or obscure scheme. In regard to the third point I think they are decisive. They show in the clearest possible way that the Government and the country are determined to submit to the necessary sacrifices in order to carry this war to a final conclusion, and that they will not allow the credit of the country to be impaired or the financial administration to be troubled by any hesitation in imposing the necessary taxation. In this connection I venture to express the opinion that justice has hardly been done to the proposals by the right hon. Gentleman the Member for West Monmouth- shire. He criticised the timidity of the Chancellor of the Exchequer, saying that out of a total war expenditure of £60,000,000, only £12,000,000 were to be provided by current taxation, and that nearly £50,000,000 would be added to the indebtedness of the country. He stated that this policy was below the standard set at the time of the Crimean War. I beg to dissent from that view. What are the figures? The right hon. Gentleman himself said that out of the total expenditure of £60,000,000, £30,000,000 could and should be recovered from the Transvaal or from Transvaal revenue; and that view has been favoured by, I think, every speaker in this debate.

I should like to say that I am very sceptical about it, and if the Chancellor of the Exchequer does not get it from the Transvaal he will have to pay it himself.

We all hope it will be paid. But is it quite logical or consistent of the right hon. Gentleman first of all to state the right of this country to the repayment, and then to leave the probability or the possibility of that repayment altogether out of account when it somewhat embarrasses his argument? How does this payment for taxation of £12,000,000, or in reality of £14,000,000 towards the presumed debt of £30,000,000, compare with the practice of former times? It compares favourably. In the time of the Crimean War taxation was kept on for some considerable period after the cessation of hostilities, and the net result was that approximately 50 per cent. or 55 per cent. of the war expenditure was met from taxation, the remaining 45 or 50 per cent. being left to swell the indebtedness of the country. Comparing it with the war at the beginning of the century the case is even more favourable, because out of the expenditure on the war only 27 per cent. was paid from taxation. Under the present proposals, the total of our indebtedness, after deducting the repayment from the Transvaal, will be paid off in two years if the taxation is maintained. How long is the war taxation to be kept up? I trust that the precedent of the Crimean War will be followed. I feel strongly that it is the duty of those responsible for the finance of the country to maintain either the whole, or, at any rate, a part of the war taxation until such time as the indebtedness of the country has returned to the point at which it stood at the beginning of the war in October, 1899. This may be considered to be a severe standard, but the prosperity of the country is such that it can stand the sacrifice. I am convinced that that policy if followed will do more to enhance and strengthen the reputation of the finance of this country than any other measure we can take. The world will see in our action in this colonial war the spirit with which we should meet the crisis if we are involved in a still greater complication. I do not ask the Chancellor of the Exchequer to give any pledge upon this subject, but I trust he will not give a pledge in the contrary sense, regarding the abolition of the taxation now being imposed. Pledges of that kind at the time of the Crimean War gave rise to considerable difficulty. I now turn to the question of broadening the basis of taxation which has been treated by several speakers. It appears to me that the advocates of this course may be divided, roughly, into two classes, namely, those who desire to replace a given amount of direct taxation by an equal amount of indirect taxation, and those who, whilst maintaining the aggregate amount of indirect taxation, desire to replace a certain number of high duties which are now levied on a small number of articles by a lower duty levied on a larger number of articles. I shall not enter into a discussion of the very abstract and theoretical question of direct and indirect taxation, but I will say in passing that those who contend that the proportion of increase in the case of direct taxation has been excessive have certainly a strong prima facie case. Comparing the Estimates for the present year with the Accounts of 1885 what do we see? Direct taxation has increased by about 80 per cent. and indirect taxation by about 23 per cent. only; and there is the additional aggravating circumstance that the indirect taxes have increased principally owing to commercial development, and not to enhanced duties, while direct taxes have mainly increased on account of the larger imposition of duties. But the whole subject of direct and indirect taxation is complex, and I shall not venture to trouble the House with any further remarks respecting it. Besides which, the rival merits of the two forms of taxation are not really the critical and essential point of the present discussion. That point is the contention that our present system of levying high duties on a small number of articles is dangerous, and that it hampers us gravely when in time of emergency an increase of taxation is required. I do not agree with that view. It appears to me that it has been arrived at rather by those who have been misled by the sound of words and phrases. The proposal to "broaden the basis of taxation" sounds wise and statesmanlike, but it is forgotten that it is practically equivalent to narrowing and reducing the number of articles on the free list. Converted into those terms it does not sound so well. The whole effort of the legislation of the last half-century has been in reality not to broaden the basis of taxation, but to restrict the sphere of the operations of the Customs House official, and undoubtedly that policy has played a large part in promoting our commercial supremacy. Experience has shown that high duties on a small number of articles impede commerce less, cost less to collect, and are probably—though this is a matter of opinion—less liable to evasion and fraud than lower duties levied over a wider area. In the old times, as the right hon. Gentleman opposite has said, everything was taxed, and I think he gave the quotation from the ribbons of the bride to the brass nails of the coffin. There were then 1,100 articles taxed; now, the list of articles in which commerce is not free can be written on a half-sheet of note-paper. Moreover, this great reform, this marvellous freeing of commerce, has been conducted with such skill that it has caused no diminution of the customs revenue. Then there is the argument that by having high duties on a small number of articles you deprive yourself of the emergency reserve which consists in increasing low duties on a large number of articles. I do not deny that there is considerable force in this argument, but it would carry conviction only if it could be shown that our present rates of duty were such as to render an increase in time of war or in some other such time unduly irksome or dangerous. It is demonstrable—so far as any opinion of the kind can be demonstrable—that our present duties are not at danger point, and, if it was desirable to do so, I believe, speaking purely from a fiscal point of view, that it would be possible to increase the majority of them considerably without undue danger of giving rise to contraband. In support of this view I would mention the interesting fact that prosecutions by the Customs have diminished in the most remarkable degree during the last twenty, and still more during the last ten, years. Since 1890 the number of prosecutions for fraud in connection with the Customs has diminished by fully 50 per cent., and in the more important matter of what I may call the non-summary cases the fall is even greater, as they have fallen from 56 and 60 in 1889 and 1890 to an average of ten during the last few years. The line separating a tax which can be applied from a tax which will give rise to fraud is clearly not determinable in a permanent fashion; it depends upon a number of varying factors, such as the efficiency of the revenue service, and, still more, I believe, on the moral progress of the community. The proposal to impose taxation during peace time on a larger number of articles in order to create a reserve—a frame-work for war taxation—appears to me to be applying the principles of war organisation to the peaceful administration of the revenue, and I do not think they meet the case. This policy, if adopted, could only lead to this—that you would hamper trade unnecessarily, you would appoint unnecessary customs and excise officials, and you would, if I may say so, create a skeleton battalion of tax collectors. I shall not discuss the question of whether our present indirect taxes fall unduly on any given class of the community, because I do not think it is contended that the system is narrow in the sense of being unfair, but only in the sense of falling upon a small number of articles. But if those articles are consumed by the entire community there would be no gain from the point of view of justice by the change proposed, and there would be, as I have endeavoured to show, considerable administrative disadvantage and impeding of commerce. I fear I have already detained the House too long—["No, no!"]—but I would venture to conclude by expressing the hope that at some not distant period the House will undertake an examination of the financial situation of the country with a special re- gard to the constant and rapid increase of expenditure. I know this is an unpopular and an unfashionable subject, but I believe that the wise and sober traditions of English finance can be maintained only by a strict and vigilant regard for economy. The forces acting in the direction of expenditure are now strong. I confess I view with some alarm the alliance against the Treasury which has been formed by various persons of great influence and power. We hear voices which differ on almost every subject agreeing in the desire to diminish financial control. I fancy that when that occurs there is some peril for the Exchequer, but I hope the Chancellor will not be dismayed by the unusual combination brought against him, and that he will preserve his natural ferocity unimpaired. The right hon. Gentleman, however, with all his great qualities, is powerless to stem the tide unless he is supported by a steady body of opinion in this House. May the day be far distant when the policy of moderation in public expenditure, the duty of sleepless vigilance against profusion, will lack advocates of sufficient courage to stand up for what is now a neglected cause. When peace is obtained—permanent peace based upon complete victory—I trust the enormous expenditure, inevitable in time of war, will give place to a period of careful revision. The splendid liberality with which the country and the House have voted unprecedented supplies appears to entail upon the Government the grave responsibility of so ordering the administration that there shall be neither waste, nor extravagance, nor excess. If this duty is performed rigorously and unflinchingly I am confident that the finance of England will long remain what it has now been for more than two centuries—the standard and model for all countries of the civilised world.

I do not propose to follow the various points raised by previous speakers, but I rise for the purpose of drawing attention to two or three points in the Bill. The speech of the hon. and gallant Member for Woodbridge has been listened to with great attention, and he has raised one or two very interesting points. He brought up again the old point mentioned so often at the passing of the Finance Bill in regard to the great hardship inflicted upon the landed interest. But the hon. and gallant Member seems to find a difficulty in applying to land-owners the same principle which applies to any other class of property. He says that in the case of an estate worth £100,000 it is difficult to cut off £10,000 to pay the estate duty. But he should remember that there are other people who own property which it is very difficult to divide. What about the owner of a steamship worth £100,000? He has to pay the £10,000 duty, and there is no way of cutting that off a steamship. Probably this person who owns a steamship will have a considerable amount of money, and a man with a landed estate generally has a good deal of property beside his estate. The hon. and gallant Member put the question to my right hon. friend the Member for West Monmouth—why do agriculturists look more cheerful now than they did in 1894? Agriculturists are more cheerful now because they have received £2,000,000 in doles, which the present Government have given to them. But when hon. Members opposite talk about agriculturists they always mean landlords, and not the tenant farmers or the agricultural labourers. Under the circumstances it would not be grateful if they did not look to the Government with gratitude for the favours of the past, and they are looking for more favours to come in the future. The right hon. Gentleman the Chancellor of the Exchequer, I think, is the only gentleman on the opposite side of the House who has acknowledged properly the boon which the right hon. Gentleman the Member for West Monmouth gave to the landed interest in the Budget of 1894, when he allowed them 15 per cent. off for repairs. I must say that I have some doubts about the equitable working of that allowance. I do not say that it has not worked well in respect to agricultural land, but it works unfairly in respect of the land in towns, where the site value of the property is much larger than the building value. In the City of London the site value of land is 80 per cent. of the total value, and this 15 per cent. for repairs is charged upon the site value and the structure in a lump. Therefore, the site value, which requires no repairs, gets 15per cent. allowed to the extent of four-fifths of the total value. All that excess of deduction made from the site value, means that there is that much site value which bears no taxation. The site value of London has been estimated at £3,923,000 a year, and the building value £1,500,000. The deduction from these two figures means £927,300, whereas if the deduction for repairs was made from buildings alone it would only be £250,000. In other words the sites are assessed at £670,000 a year too little in the City of London. If this injustice were remedied there would be a considerable gain to the Exchequer at the cost of those who might fairly be taxed. In connection with the property tax under Schedule A, the law lays down that land should be charged according to what it produces, and not according to its real value. When this property tax was first put in force about fifty years ago, the conditions were somewhat different, and there is now in all our large towns a great deal of land that escapes taxation which ought to bear taxation. Large quantities of land lie idle and produce nothing, and consequently such land does not come within the purview of this taxation. And why not? Such land is increasing in value every year, and it is just as legitimate to tax it as if the owner derived an income from it, and I see no reason why the owner should not be charged upon the actual value instead of upon the proceeds from the land. Let me give an illustration. I know a case where a man owns twenty acres of land in the midst of streets in a town, and that land is lying practically idle. It produces practically nothing and certainly not more than £2 or £3 a year. A few weeks ago a builder offered the owner £400 a year as ground rent for the land, but he refused it. This land is actually increasing in value year by year, and the owner is only paying 10s. or 12s. per annum upon it, whereas if it were taxed at its real value it would produce a considerable sum. I do not think there is an hon. Member of this House who does not know of dozens of cases of this sort, and there are large numbers of cases, where plots of land are lying idle which it would be easy to tax. The owners of such land know that the work of the people in the immediate vicinity will increase the value of their land, and so they keep it idle and you do not tax it, but the moment they begin to use it you put a tax upon it, and therefore there is a premium upon keeping the land idle. Everybody must be convinced that the difficulty of getting land is the real problem at the root of the housing question, just as the taxing of land is at the root of the land question. I will not go into the general question of taxation of ground values, for I am basing my case purely upon the taxes now levied, and which under this Bill you will continue to levy. Taking the taxes now levied I say that you are not dealing quite fairly between the owner of one piece of land and another, because you put a tax upon the man who uses his land, and you do not tax the man who lets his land lie idle, and who thus prevents people from living upon it. There is one other question I want the Chancellor of the Exchequer to attend to. I feel sure that there is a very great deal of leakage going on in the matter of the income tax in respect to the fines on the renewal of leases. Perhaps it will be news to some hon. Members to hear that fines on the renewal of leases are subject to income tax, but there is a special section which makes these fines chargeable. No doubt many hon. Members would suppose that a very large income is derived from this impost. The Chancellor of the Exchequer was good enough to give me information as to the sum assessed for fines on renewals of leases in London in three successive years, and I think the House will be surprised to hear that instead of being a very large sum the totals were only £15,000, £11,000, and £14,000. I cannot help thinking that there must be some leakage there, and that a great many people are escaping taxation. I may point out that if the owner of the property chooses to expend the money he receives from fines in further building or extending his property he escapes the income tax. It will be perhaps a novelty to manufacturers to know that if they spend the money received from fines in extending their cotton mills they are exempted from this tax. That perhaps may be a reason why the sum is so small, but the Chancellor of the Exchequer informed me that there had been no claim during these three years for any reduction or abatement of income-tax on account of rebuilding. I have, therefore, come to the conclusion that a great deal of leakage is going on. I would venture to press these three matters on the attention of the Chancellor of the Exchequer. I hope that he himself will introduce a very considerable measure for the taxation of land values, but if he does not some more enterprising Chancellor of the Exchequer will do so in the future.

I think the Chancellor of the Exchequer has every reason to congratulate himself on the reception given to his proposals not merely by this House but by the country also. I have no reason in any way to dissent from that approval, which has received its crowning glory in the figures which my right hon. friend read out this afternoon in answer to a question as to how the War Loan had been received. I do not intend to digress into a criticism of some of the minor provisions of the Finance Bill, which ought it seems to me to be reserved for the Committee stage, because my experience for the past nine or ten years has been that the House generally discusses the Budget as a whole on the Second Reading of the Finance Bill. I believe the country approves, though perhaps not quite unequivocally, the amounts which it is proposed to raise by loan and by taxation. We have seen, as was to be expected, a little disappointment. Some would rather that more had been raised by loan, but I very respectfully desire to pay my tribute to the equitable distribution of the funds which have to be raised between borrowing and taxation. I would also add that I believe the country, and certainly the House of Commons, will approve of the proportion which the right hon. Gentleman has awarded between indirect and direct taxation. Having those sums to find in an emergency, my right hon. friend has on the whole made a very equitable distribution of the burden. That being the case, the country has done what my right hon. friend expected it would do, because it is determined that this war shall be carried through to a successful and complete issue, and there is not anyone who will in the least shrink from the burden—[Mr. SAMUEL dissented]—except, perhaps, the hon. Gentleman opposite. I think, however, I may say that both the House and the country are practically unanimous on the matter, and, after all, we never have anything absolutely unanimous in this country. The country, having entirely justified the expectations of my right hon. friend, should not, however, prevent us from inquiring whether the proposals which we have to deal with in this emergency are such as this country in a similar emergency in the future desire. I do not think that is a practical inquiry now, but while I acknowledge that my right hon. friend is entitled to the gratitude of the country for having introduced his Budget and taken the nation into his confidence at the earliest possible moment, I would suggest whether the time has not arrived to examine whether the system of our finance does not require a little revision. The hon. Member for King's Lynn and some newspapers have reproached my right hon. friend for not having introduced what they call an imaginative Budget. My right hon. friend was charged with the poverty of his imagination. I do not share in that reproach, because I rejoice that we have not got an imaginative Chancellor of the Exchequer. Imagination may be a great gift, but imagination in finance often leads to disaster and occasionally to ruin. I believe that our system of indirect taxation does rest on too small a foundation, and that that taxation ought to be drawn from a wider area. But just as the right hon. Gentleman the Member for West Monmouthshire took twelve months to consider and perfect his wide-reaching scheme of death duties with regard to which, pace my hon. friend the Member for King's Lynn, I think his reputation will be for all time honourably associated, I hope my right hon. friend will also spend twelve months in examining whether our area of direct taxation should not be extended. It is, however, a very delicate and difficult subject, and I do not believe the Chancellor of the Exchequer would be justified in attempting to vary the existing system in the present emergency. But I hope he will apply his mind to it, not hurriedly, but with deliberation. There is one further subject to which I wish to draw attention. My right hon. friend in introducing his Budget said that the income tax had always been considered as a tax that might properly be increased in time of war, for the reason that it could be readily dealt with by being increased or lowered. I believe no Member of this House will dissent from that maxim, but what I desire to draw my right hon. friend's attention to is that neither he nor his predecessor carried out that maxim. We all recognise that the income tax should be the first tax to which the Chancellor of the Exchequer should turn in time of war; but as well as being the first tax in time of war, it is now the first tax to which the Chancellor of the Exchequer turns in time of peace. When the right hon. Gentleman the Member for West Monmouthshire wanted one and a half millions in 1893 he said there was only one tax to provide it, and that was the income tax. But when my right hon. friend had a surplus in 1898 he said he could not take a penny off the income tax because he had only one and a half millions, whereas a penny on the income tax would mean over two millions. The position of the income tax therefore appears to be that the tax is increased in time of war and cannot be decreased in time of peace. When my right hon. friend introduced his Budget he said that with regard to indirect taxation, he looked upon it only as a temporary addition to the existing taxation, and that he hoped it would be merely for one year, but he did not say anything of the kind with reference to the income tax. I do not suggest that he proposes to keep the income tax at a shilling, but while he says that he hopes to take off the increase in indirect taxation next year, the only comfort he has for the income tax payer is that the income tax is a very useful tax because, in theory, you can raise it when short of money and lower it when you have a sufficient surplus. Do not let it be thought that I am arguing in favour of the rich man: he can always take care of himself. It is a mistake to suppose that the income tax is a rich man's tax. By far the greater portion of it is paid by slender incomes of £1,000, £2,000, and £3,000 a year. In the Returns for 1894–5 I find £71,000,000 were assessed on incomes under £3,000 a year, £46,000,000 on incomes above £3,000, £6,000,000 on incomes below £200, and £41,000,000 on incomes under £1,000. We all recognise that the income tax is a war tax, and because we think that it is a war tax, we believe it should not be a peace tax. In dealing with this question of income tax I desire to thank my right hon. friend for the abatements and exemptions he has given to the small income tax payer. Let hon. Gentlemen think what it means on an income of £800 or £900 a year to pay away a twentieth part, besides taxation in respect of tea and other necessaries of life. I thank the House for having listened to these observations, and I again congratulate my right hon. friend on his Budget and its reception.

I wish to express my grateful appreciation of the action of the Chancellor of the Exchequer in regard to the stamps on brokers' contract notes. When he introduced his Budget he promised in effect to keep an open mind as to any representations which might be made to him in regard to the operation of the proposals then before the House. Those representations have since been put before the right hon. Gentleman by deputations, and I am sure it was extremely gratifying to us to hear to-day that the matter has been reconsidered by the Chancellor of the Exchequer, and that for the time being he has withdrawn the clause to which objection has been taken. With that exception, so far as I have been able to judge, the Budget has been received as well as any Budget could have been expected to be received which proposed the colossal taxation that was inevitable. I have not heard many words of objection to the beer tax, nor to the increased tax on spirits, nor to the addition to the income-tax. I do not suppose, however, that the Chancellor of the Exchequer will deny to us on this side of the House the consolation of believing that if this Budget had been drawn up on this side it would have contained provisions more acceptable to us. I do not intend to dogmatise on matters of this kind, but if it had fallen to the lot of a Liberal Chancellor of the Exchequer to have drawn up the Budget, the probabilities are that the income tax would have been more fully graduated than it now is by means of exemptions and abatements, that the tea duty might not have been increased, and that we might have had the beginning of an experiment in the taxation of ground values. I should like to express my cordial approval of the general tone of the speech delivered earlier in the debate by the hon. Member for Exeter. The whole tone of that speech, which enforced economy in so far as economy could rightly be enforced, is one that cannot fail to commend itself in all quarters of the House. I think it is a fortunate circumstance for the country that we have in office just now a Chancellor of the Exchequer who is not extravagant by nature in public affairs, and we may feel sure that he will not sanction any great outlay of public money unless under stress of real need. If we had a Chancellor of the Exchequer at the present moment who held the national purse-strings more lightly it would have been a great misfortune for the country. I feel certain we need have no fear whatever of the present Chancellor of the Exchequer yielding to the blandishments of the right hon. Gentleman the Member for the Isle of Thanet, who again presented nostrums to which we have been accustomed for many years. He assured the Chancellor of the Exchequer with a view to tempting him that a 10s. duty on corn would have a substantial yield, and although the result would be large, individual payments would be small. I think the right hon. Gentleman committed himself to a very serious fallacy in this respect. He fell into the error of assuming that the consumer would only pay the actual amount paid in duty. That is not really the case in practice. There is not only the duty but also the cost of handling, the cost of bonded warehouses, and many other incidental charges. The suggestion that such a tax should be used for providing old-age pensions is very curious. The right hon. Gentleman proposed to provide for the deserving poor after sixty-five years of age by making everyone poorer under sixty-five by increasing the cost of living. That is, indeed, taking away with the one hand what we give with the other. I note that the right hon. Gentleman still advocates the imposition of a duty on imported manufactured goods. I do not know whether it is worth while to take seriously a suggestion thrown out in such a haphazard way, but although he may hanker after a duty on manufactured goods, I should like to know where there is any clamour on the part of manufacturers for such a duty? During last week the annual meetings of the Associated Chambers of Commerce were held, at which manufacturers from all parts of the country were present, but I did not hear of any desire on their part to have a duty imposed on manufactured goods brought into this country. I think that the Returns of the Board of Trade for last year are a sufficient refutation to the arguments of the right hon. Gentleman, and in view of the very high state of prosperity which they unfold, I do not think the country can be expected to entertain the idea of reversing a fiscal policy which has existed so long and answered so well.

There is one point which I wish to bring to the notice of the Chancellor of the Exchequer, and which, if he is able to answer now, may save trouble to himself and his Department. The right hon. Gentleman is no doubt aware that many debentures are issued by trading companies, to which a provision is attached that, if the issuing company at any time prior to the date at which the debentures are redeemable at par choose, they shall be entitled to redeem at a certain advanced price. Last year a circular was issued from the Inland Revenue Department, calling the attention of trading companies having such debentures to a decision which was given in one of the courts by Mr. Justice Wills and Mr. Justice Bruce, that the stamp duty payable on these debentures was to be paid, not on the par value of each debenture, but on the price at which it could be redeemed at any time during its existence. The particular case tried by the two judges was the case of a £100 debenture issued in 1898, and redeemable at par in 1917, but power was reserved to the company at any time between July, 1900, and a year before the time when the debenture would ordinarily be redeemed, to redeem it at 103. It was decided by the Court that the stamp on these debentures should be based on the price of 103, instead of on the par value. The consequence of that was, I believe, that a circular was sent out by the Board of Inland Revenue calling the attention of companies having such debentures to the fact that they were bound to pay the additional stamp duty on their full value; and I know that in a great many instances debentures were sent up to the Inland Revenue Office to have the extra stamp affixed to them. Since that decision was given this particular case was carried to the Court of Appeal, and was tried there before Lord Justice Smith and Lord Justice Collins, who entirely disagreed with the decision given by the Judges of the Court of First Instance, and reversed their decision. Lord Justice Smith very emphatically laid it down that £100 was the total sum secured by the debenture, and that that was all on which the stamp duty had to be paid. The questions I want to address to the right hon. Gentleman are: What is he going to do with those trading concerns which have paid the additional stamp duty on these debentures in consequence of the circular issued by the Board of Inland Revenue; and, in the second place, is the case going to be carried to the House of Lords, or is he going to accept the decision of Lord Justice Smith and Lord Justice Collins in the Court of Appeal, and if there is an appeal, and if their decision is upheld by the House of Lords, will this extra stamp duty be returned to those concerned? This is a matter which is exciting a good deal of interest, and if the right hon. Gentleman can answer my question definitely, it will put an end to a good deal of feeling on the matter at the present time.

I am afraid that offhand I am not able to answer the question of the learned Member, but if he will be good enough to address it to me in the ordinary way I shall be very happy to do so. But meanwhile, I may say that the action of the Board of Inland Revenue in matters of this kind is, and I think ought to be, to a great extent, independent of the Government of the day. It is the duty of the Board of Inland Revenue to interpret the law by the best advice that can be given to them, and if a case is doubtful and contested by the taxpayer, of course it has to come for the decision of the Court. Whether this decision of the Court of Appeal should be accepted or not is a matter upon which, necessarily, the law officers will advise, and the action of the Inland Revenue must be guided by their advice. Until the matter is settled one way or the other it would be absolutely impossible for me to give an answer to the hon. Member. I need only detain the House for a very short time with regard to the general debate. It has been an extremely interesting debate, but, in singular contrast to the view of the hon. Member for Islington, who commenced it. He began by saying that this was the most oppressive Budget that had been known for a century, and he went on to expound to the House his ideas of taxation, which consisted, I believe, in this, that whatever happens there should be no increase of existing taxes; that, above all, there was at present too much taxation on drink, and that any additional revenue required should be raised by some new tax, which he did not specify, and which, I am quite sure, he would oppose if anybody proposed it. A better comment upon the wisdom and justice of views of that kind than that which has been afforded in the course of this debate it would be impossible to imagine. I think that the main complaints, if I may call them complaints, against me in regard to my financial proposals for this year have been two. In the first place, the right hon. Gentleman the Member for West Monmouth, supported by my hon. friend the Member for Salisbury, suggested that, in dealing with the financial difficulty due to the war, I had not imposed sufficient additional taxation. I cannot admit that the calculations of my hon. friend the Member for Salisbury or of the right hon. Gentleman as to the amount of taxation which is to go towards the cost of the war were quite adequate. To begin with, we are not asking Parliament to impose only twelve and a-half millions of taxation towards the cost of the war. It is more than fourteen millions altogether, including the arrears of income-tax. But besides that, five and a half millions, possibly six millions, out of the taxation of the current year goes to the cost of the war.

It has gone to debt.

It has gone to the cost of the war. It would never go to debt unless it had been beyond the expenditure of the year—in fact a surplus—and as the war expenses come into the expenditure of the year it has gone, necessarily, towards the cost of the war. That altogether in two years is twenty millions towards the cost of the war. And further, when the right hon. Gentleman the Member for West Monmouth said that this six millions of taxation was spent in the war instead of paying off the Debt, and assumed that it was precisely the same thing as adding to our debt, I entirely demur to that proposition. It is entirely different. Devoting part of the taxation of the year towards the cost of the war, which but for the war would have gone to the reduction of the Debt, is by no means the same as adding to the debt of the country the cost of the war.

I do not mean to interrupt the right hon. Gentle- man; but surely, if these five millions had not gone to the expenses of the war, they would have gone to the extinction of the Debt.

No; the question is this. How are you providing for the cost of this war? I provide for it in two ways—by additional taxation, or by existing taxation; and by increasing the debt of the country. This five and a half or six millions is the proceeds of existing taxation, and therefore is fairly to be taken into account in considering how much is being paid by the taxation of the country and how much is being paid by an addition, whether temporary or otherwise, to the debt of the country. That, I think, is perfectly clear. But, more than that; the right hon. Gentleman said that on the Debt account we were not forty-three millions to the bad, as I stated in my Budget speech, but fifty-three millions to the bad. I do not admit that my proposal to suspend during this year £4,600,000 of the Fixed Debt Charge, which would otherwise have gone to the reduction of the Debt, is the same thing as incurring new debt. I admit it is not paying off old debt, but it is not the same thing as incurring new debt or adding to the existing debt of the country for the purposes of the war. They are two very different things, and unless hon. Members separate them in their minds I do not think they can form a fair estimate as to what the country is being called upon to pay out of taxation towards the expenses of the war. Then the right hon. Gentleman the Member for West Monmouth asked me how I propose to provide for the interest on the thirty millions loan which has been recently raised. I called the attention of the Committee in my Budget speech to the fact that putting the expenses of the war next year altogether aside, and simply taking what may be called the ordinary expenditure of the year, as against the ordinary revenue of the year, there would be a surplus of between £800,000 and £900,000 of revenue over expenditure. And that happens, curiously enough, to be just about the amount that will be required towards paying the interest on the thirty millions. But, besides that, as we are adding fourteen millions to the taxation of the country, we think it is perfectly fair to say that we are in that way providing also towards the interest on the Loan which will be bor- rowed. I admit that we do not ear-mark any particular sum towards the payment of that debt. But why? Because at present we think it is universally admitted that it is impossible to say how much the total debt which may be incurred on account of this war may be. It may be more than we at present expect. It may be, on the other hand, very much less than the House has authorised owing to the recovery of a considerable part of it from the Transvaal; and until, in fact, the amount is settled it is absolutely impossible for us to make permanent provision towards the repayment of the capital of the Debt which has been authorised by Parliament. There are one or two points affecting the Finance Bill on which criticisms were made. In the first place, the hon. Member for King's Lynn unfavourably criticised two clauses of the Bill relating to the death duties. He accused me of imposing, by one of them, a new death duty and of adding to the severity of the Finance Act of 1894. The position is simply this. As the law now stands, if a man possessing an estate in fee simple, whether in personalty or in realty, chooses during his life to give it away to another person, if that gift is made more than twelve months before his death, that property, of course, will not pass at his death, and will not be charged with estate duty. But if he is the life tenant of a settled estate, and gives his interest away to the reversioner, at any moment before his death—even on his death-bed—by the fact of that gift, the whole property, not merely his life-interest, which maybe worth five minutes purchase, but also the estate of the reversioner, will escape the estate duty. Now, I think my hon. and gallant friend the Member for the Woodbridge Division of Suffolk put this question very plainly to the House. I think he showed that it was absolutely necessary in this matter to maintain equal treatment between settled property and unsettled property; and it would be, I think, an outrage, at the very time in which we are increasing the taxation on all other classes of the country, if we allowed, by such a proceeding as this, the life-tenants and reversioners of settled estates, who are certainly among the wealthier classes of the country, absolutely to escape the I estate duty. Then, Sir, the Member for King's Lynn unfavourably criticised the clause in the Bill relating to the aggre- gation of property. That is a very technical subject, and I think it can be better dealt with in Committee than on the Second Reading, But I may say generally that the clause in the Bill is the outcome of a careful inquiry by very competent persons. Two years ago this question of the law relating to the aggregation of property was raised by the noble Lord the Member for the Biggleswade Division of Bedfordshire, and was discussed at considerable length. Nothing came of it then. But last year the discussion was renewed, and I think all of us who took part in the debate were convinced that, although there were difficulties in the way of an amendment of the law, yet the present condition of the law was unsatisfactory. And in accordance with the general feeling of the House, I promised to appoint a Departmental Committee to consider this particular question. That Committee consisted of the Member for Haddingtonshire, the hon. and learned Member for Dumfries Burghs, the present Solicitor General, my hon. friend the Member for the Woodbridge Division of Suffolk, my noble friend the Member for the Biggleswade Division of Bedfordshire, and the Chairman of the Board of Inland Revenue. I do not think a more competent Committee could be got together. They arrived unanimously at the conclusion which is embodied in this clause of the Bill. The hon. Member for Halifax brought two questions before me with reference to the income tax. He said that income tax at present was not sufficiently charged on ground values, and that some alteration should be made with the object of securing, through that tax, a contribution from vacant building land in the neighbourhood of towns. I do not quite see how that can be secured when, this being a tax on income, there is really little or no income from the land. I may remind the hon. Member that property of this kind has been brought under Imperial taxation very much more than it used to be through the death duties. There is no doubt that the contribution of building land towards Imperial taxation is very different under the present law to what it was before the Finance Act of 1894. I think that what the hon. Member has in his mind is part of the very difficult question of the taxation of ground values. I agree very much with the hon. Member for the Woodbridge Division of Suffolk that whatever it may be possible to extract from land, whether built upon or likely to be built upon, by way of taxation, beyond that which is now demanded, will probably go more to local taxation than to Imperial taxation. I do not think, if you fairly consider the existing state of the law in regard to death duties, you will find it possible to extract equitably more from this class of property towards Imperial taxation than at present. As to the suggestion that income-tax should be paid on fines for the renewal of building leases, I will inquire further into that matter. The subject is a highly technical one and one by no means easy to deal with. It may be that fines of this nature which are at present properly liable to income-tax do not pay it; but it is extremely difficult to ascertain when these fines are paid and what is their amount; but I will call the attention of the Inland Revenue authorities to the subject and see how best to secure that the existing law shall be properly carried into effect. I do not know that there is any other particular matter included in the Finance Bill which was the subject of adverse criticism. No doubt one or two speakers have said that the tea duty was unfairly increased as compared with the duty on alcohol and tobacco, but I think that has been fairly answered when it is said that the tea duty is a low one when compared with that on alcohol and tobacco at the present time. There has been a good deal of discussion in the course of the evening upon the general scope of our present system of taxation. I think no greater tribute could have been paid to that system than that which was actually paid by one or two members who were desirous to do what they could towards securing economy in expenditure. It was actually alleged by more than one speaker that the best way of doing that was to add in some way to the subjects of existing taxation, in order, by irritating the taxpayer, to make him more interested in economy. Does not that show, if anything could show, how lightly our taxation bears on the country at the present time? I do not suppose for a moment that the manner in which this Budget has been received both by the House and the country is due to any particular merit of my own or of any proposal I have made. I know it is mainly due to the fact that, taken as a whole, the great majority of the people feel that the expenditure required is necessary and that they are ready to submit to be taxed for it. But what I have endeavoured to do is this: I have not cared in the least for the charge of want of imagination. I have not cared about the observations that have been addressed to me in the press and elsewhere as to the humdrum nature of the Budget, or the criticism that it is a Budget that any schoolboy could have prepared. That, to my mind, is a compliment. I have felt that this was a temporary necessity which the country had to meet, and that I was bound to take care that in dealing with a temporary necessity I should do nothing which would have, perhaps permanently, an injurious effect on commerce and trade. I undoubtedly felt a desire not to raise new fiscal questions that might excite differences—and acute differences—in this House. I do not think it would be advisable to do so at the present time, but I should not have shrunk from doing that if I had thought it was necessary and right. I did not think so, and I have been more confirmed in that impression by the course of the debate this evening. What are the suggestions of hon. Members like the Member for King's Lynn? He was good enough to suggest that we should tax diamonds, pearls, feathers, and lace in a way which made me doubt whether he had ever sufficiently realised that two of the highest and holiest feelings in woman's nature are the love of diamonds and the love of smuggling. But when the hon. Member went on to suggest that I should lower the limit of income-tax and collect it from persons of smaller income—I do not know what expedient may be necessary in the course of the finance of the future—but I do think that any proposal of that kind would be full of difficulty and danger. Then my right hon. friend the Member for the Isle of Thanet suggested that a shilling duty on corn, though good in principle, was a mere flea-bite, and that to do any good whatever we ought to have at least a 10s. duty on corn in order to meet the growing expenditure of the country. Of course, it was tempting to hear that such a duty would produce twenty millions. But when he went on to say he would spend the proceeds in old-age pensions, and that I was also in some way to provide for preferential treatment of colonial produces, by which I must necessarily tax a considerable part of the twenty millions, I began then to think his fiscal proposals, whatever their effect in promoting the peculiar ideas he is so fond of ventilating, would not produce much towards the ordinary expenditure of the country. There was one speech which I listened to with real pleasure, and that was the speech from my hon. friend the Member for Exeter. My hon. friend is a man of great financial experience and knowledge, and I am sure that the House will feel that in him we have one who will in the future be a great acquisition to our debates. My hon. friend gave utterance to some valuable truths, and nothing was more welcome in his speech than the stress he laid upon the necessity in these days of economy. I welcome him as an aid to me in my task in this matter. At present I am thankful to say that, if I put war expenditure apart, the financial prospects of the country, even at the present rate of expenditure, are by no means bad. I have shown to the House that but for war expenditure, and including the permanent additions to our expenditure on the military services, the ordinary revenue of the year, without additional taxation, would show a substantial surplus over the expenditure. Of course times may change. It may be necessary, if in the face of commercial distress we have to meet an expenditure in the future greater even than that with which we are at present engaged, for us to look beyond the existing sources of taxation and to endeavour to find new sources of taxation to supplement our revenue. I know that that may be necessary. I remember that in the year 1854, just after Mr. Gladstone had made his great alterations in the tariff of the country, when he had removed I do not know how many articles from our Customs tariff, and had effected a great financial change, he said that war expenditure was a thing which could not be limited by any preconceived policy of this kind, and that it might be necessary even to restore some of the duties which he had just abolished if the financial necessities of the war should demand it.

The arrangement to close the debate at an early hour this evening was arrived at to some extent in order that Irish Members might have the whole of the sitting on Thursday for the discussion of the alleged grievance with regard to the financial relations between Great Britain and Ireland. That being so the Irish Members have, I believe, abstained altogether from taking part in the discussion to-night, and, recognising the desire of the First Lord to meet our wishes in this matter, I desire to state in one or two brief sentences that the Irish Members do not regard this as a "humdrum" Budget; it is a Budget which imposes upon Ireland more additional taxation than has ever been proposed in any year since the passage of the Act of Union. It proposes to impose on Ireland an additional taxation of considerably over £1,000,000, and that for the purpose of enabling the Government to provide the expenses of a war at which the whole conscience of the Irish people revolted. Under the circumstances I think it would not be fair or advantageous for me to dilate upon this matter; it is enough for me to protest on behalf of the Irish Members against this Budget, which we regard as an aggravation of the injustice under which we suffer. From the Irish point of view the Budget is iniquitous and most unjust to our country, and with this brief word of protest against it the Irish Members will record their votes in the Lobby against the Second Reading of this Bill.