The discussion of this clause has turned almost entirely upon the question of the possible effect of the action taken by the Government, upon the financial relations between this country and the colonies and the rest of the world. The right hon. Gentleman the Chancellor of the Exchequer expressed some surprise that that should be the turn taken by the debate. I think he expressed even more obvious and emphatic surprise when, a week or two ago, I ventured to ask whether this proposal; was introduced in any connection with the expected visit of colonial Premiers to this country. I do not think that I was altogether without reason for thinking that there was some connection, partly, but not entirely, on account of the very plain words used by Sir Wilfrid Laurier, who, I would again say, is a man whom we all respect in the highest degree and whom we know would not speak unadvisedly in a matter of this importance. I observe that the Premier of Natal, arriving in this country the other day, being interviewed by the inevitable reporter, got immediately on the very same subject, and said that one of the great objects they would all have in view was the establishment of preferential fiscal relations between the mother country and the colonies. Let us not, however, forgot the purely domestic aspect of the subject. The two aspects are entirely separate, and in my opinion the tax is to be condemned just as strongly from one aspect as from the other. I do not intend to go over all that has been said with regard to the inevitable incidence of the tax. It has been argued that it falls upon no one. That, of course, is an argument which will not hold water. Somebody must pay the tax, and the person who pays it in the normal state of things is necessarily the consumer, He will pay either in the price charged for the commodity or in the quality of the commodity, and it is equally hard upon him in either case. Then, another objection to which this tax is open—in an almost greater degree, I think, than any other indirect tax—is that it gathers as it goes. Bar more is taken out of the pocket of the consumer than ever reaches the Exchequer. Then, the third objection is the obviously Protective nature of a duty such as this. You cannot levy a duty upon an article which is imported, and which is at the same time produced in this country, without giving Protection to the home producer to the extent to which the tax will operate. It is inevitable that the imposition of the tax will lead to further demands by other classes who are entitled to an equal amount of consideration, and we therefore object to embarking on this scheme. It was in that sense that the proposal was received with the jubilation which we witnessed with our eyes and heard with our ears when the right hon. Gentleman first announced his intention of imposing this tax. The next thing that I have to say from this point of view is this: No doubt it is a small tax at present, but it is obvious that it is capable of extension and of rising to a high figure in the future when a necessitous Chancellor of the Exchequer deems it right to pursue that course. This brings one naturally to consider the expenditure of the country. This is not the time to examine that in great detail, but I. would point out what is perfectly obvious—that while we, are now at the end of the war and the war expenditure stops, there are certain sequences from that war which are almost as expensive as war itself. Even this will come to an end sooner or later, but if this great normal expenditure is to get out of hand and be allowed to increase by leaps and bounds, the expenditure cannot be checked of a sudden. It will require almost superhuman efforts to check it when such an impetus has been given to it as has been the case—I will not say whether it be the fault of the Government or of the House of Commons—for the last six years. The Chancellor of the Exchequer was, I will not say very indignant, but he referred to the fact that I have spoken of him as a sign post which Indicates which would be the wrong direction to follow but at the same time does nothing to bar progress in that direction. He said that we did not know what his efforts had been—his unavailing efforts—to check the expenditure of the country. Well, I know his efforts must have been great, but we can only judge the tree by its fruit. We can only assume that this, at all events, represents the residuum which remains to us after the more unreasonable demands of his colleagues have been refused by him. But he is in the same boat with them, and, it I must still liken him to a post of some sort, I would withdraw the sign-post, and suggest that a whipping-post better describes the posit ion in which he stands. That is briefly what there is to be said against this tax on what I may call domestic grounds. Now, turning to the effect of this proposal on National or imperial finance, we hear a great deal about the Zollverein, or, rather, what I prefer to call a customs union. The former phrase was made in Germany, but I think we ought to describe things in our own way and by the names we are accustomed to. But a customs union such as there is in Germany has no analogy with what is proposed by some dreamers as applicable to the British Empire. We can remember the time when every little State in Germany had its own customs, involving a great amount of trouble and annoyance to those who travelled in that country. I can remember myself, coming nearer home, that, although England and Scotland have been united as firmly as it could be done for 200 years, duties were levied. An enterprising and adventurous Scotchman coming to England, being a little suspicious as to what would happen if he wanted to quench his thirst, brought a hamper of his favourite beverage with him, but at Carlisle or Newcastle he would have to pay an extra duty. What a nuisance that was! The reason for the establishment of the Zollverein in Germany was to get lid of the utterly vexatious, harassing, and senseless system of eternal tariff and eternal customs houses. But there is no analogy between such a case and the case of the colonies separated by sea from the mother country and from each, other, having no common frontier and having circumstances entirely different one from the other. A customs union would mean that there would be no duties within the Empire, but that there were to be duties as against the whole world to be treated as a. common fund. But such an arrangement is certainly not contemplated by our colonies. The Colonial Secretary on one occasion said that he actually looked forward to the time when the British Empire would be entirely self-supporting—if I understood him rightly, when the colonies would produce all that we needed. [An HON. MEMBER: What date?] That was in 1896. We were to have corn, meat, wool, sugar, and perhaps other articles, to be sent to this country from the colonies, where they were to be wholly produced. Well, this state of things may come with the millennium, but I do not think they are within the range of immediate possibility. Then it must be remembered that our colonies and dependencies vary infinitely in their production and in the articles which they consume; that the article's produced in one colony are those which are consumed in another; and that the duties are in most cases imposed for their own revenue purposes. Therefore. I think we had better drop the Zollverein and turn our attention to what is a little more reasonable.

I rise to order. I wish to ask for the ruling of the Chairman as to whether it is in order to discuss the whole question of the Zollverein on this clause.

Has it not been stated by a Minister of the Crown that one of the chief features of this tax is that it opens the way up to the Zollverein?

No statement of that kind has been made in Committee of this House.

No, but it was made outside of the House.

Yesterday, I think, the question was in order, because the point raised was that by making this a temporary tax no such question would arise, but if it were made a permanent tax it might at some future time be used for the purpose of entering into an arrangement with the Colonies, and so creating a customs union. The Chancellor of the Exchequer stated most distinctly that there was no such intention, and I should have thought that after a statement of that sort the Committee would have accepted it, and then proceeded to argue against the tax on domestic reasons. I think the matter was very thoroughly gone into yesterday with regard to the Customs union question. Would it not be more reasonable to discuss it today from an interior point of view? I submit that to the Committee. It seems that there are two distinct lines of argument. One was discussed yesterday for the greater part of the day, and I think it would be unfair to those who wish to discuss the matter from the domestic side if they are precluded doing so by continuing the debate on the present lines.

I have no desire to exclude discussion, and I have no intention of making a long speech, but the Chancellor of the Exchequer made a most important speech yesterday, which raised the question whether the imposition of this tax was not opening the door to the consequences I have indicated, and which make us object to the tax. I submit we have a right to criticise his answer. The right hon. Gentleman says that His Majesty's Government have no intention of making any alteration of the fiscal relations with the Colonies. But how long will that immunity last? The matter will undoubtedly come up within the next two or three weeks; not, perhaps in this House, but under other conditions and circumstances, and in quarters which it would be very well that the opinion of this House should reach. I think a few remarks on that point would be in order. The right hon. Gentleman disclaimed any intention of putting on a, Protective duty, but he has made no answer, so far as I have heard, to the hon. Member for Launceston, who pointed out that putting on a Protective duty as against one country was in no degree different in its effect from putting a duty upon every country and then taking it off with regard to certain countries. The Protective effect is still possible by the withdrawal or modification in favour of certain countries of the duty now put on. It seems to me that if it is to be modified in the interests of any of the Colonies, or in the interests of any individual State or group of States, it may have an effect upon the people of this country in this way. The right hon. Gentleman says it is a revenue tax out on for revenue purposes. It is to produce £2,600,000, and it will be the right hon. Gentleman's intention and desire to maintain it at that figure, if any abatement is made we will say, in the interest of the Colonies, in order to obtain that same amount of revenue which he finds necessary for his purpose, he will have to increase the tax as against the rest of the world, and, as the price in this country will be determined by the highest duty, any such arrangement as that to which I have referred would have the effect of increasing the price to the consumer in this country. But the right hon. Gentleman says he thinks that something of the kind which is desired can be effected on what he calls a Free Trade basis. What is the meaning of a Free Trade basis? A Free Trade basis means that there should I be a reduction in the present duties as between Great Britain and the Colonies. But we have nothing as against most; of the Colonies. The only duties that would be effected would be the tea duty, in the interests of Ceylon and India, sugar to some extent, wine to a small extent, and, I suppose, tobacco to some extent. But, taking the two Colonies which are, perhaps most to the front in this matter—Canada and New Zealand—we have nothing whatever to offer them in order to induce them to lower their tariffs. It may suit their purpose to do so, and I wish they would go further in that direction, but we have nothing whatever to offer in exchange. In my country we have a saying that there is a certain garment, which we all find useful, which you cannot take from a Highlander. A man who wears a kilt cannot be deprived of his trousers. If you do not impose a duty on a country, naturally you cannot take it from them; and, therefore, I do not see how we are to secure the fair-trade arrangement to which the right hon. Gentleman refers. These are the vistas which open to us when we consider this tax, and I think the House and the country ought to proceed with the greatest caution, before they take the first step into these unknown difficulties. I have the greatest desire to see everything done which will remove causes of friction, and promote good feeling between this country and the Colonies; but any such arrangements as those which have been foreshadowed in the last two or three days, would give a larger opportunity for friction than probably any step that could be taken. I am in favour of sentiment, but I do not like sentiment with bargain. Do at des is a motto, not so much of friends, as of suspicious friends, and I think it is better to have either sentiment or bargain than to have both. The hopes that have been excited and the fears we entertain of the ultimate effect of this tax seem to me to make it inexpedient, and therefore, on this ground, as well as on domestic grounds, I oppose it, and shall vote against the clause which is now before the Committee.

said, in his amended Statement the Chancellor of the Exchequer still omitted all reference to any expectation that the Transvaal would assist the revenue of this country. In his opinion the right hon. Gentleman was right in his omission, for the influence of the Transvaal mine-owners was so great and their action on individuals so varied and potent that we could not expect much alleviation from them. The Chancellor of the Exchequer's Statement, however, completely established the fact that the corn tax was not imposed because it was necessary for the revenue, for it avowed that he had £5,996,000, or say.£6,000,000, which was not required for any specified purpose.

Borrowed money.

said it was true that it was borrowed money, but it had already been borrowed, and was in his pocket, and must therefore be reckoned among his resources. If the right hon. Gentleman did not impose the corn tax he would still have a surplus of £3,346,000, and that was quite enough to enable him to meet what he called contingencies. That proved that the corn tax was being levied for some ulterior purpose. As he had shown, the corn duty would not be wanted for revenue purposes this year. Would it be wanted for such purposes next year, when it might be hoped that there would he a vast reduction of expenditure? That was most unlikely. The fact that all this revenue was raised for war purposes indicated that the taxation ought to be temporary at least, but the corn duty was not to be temporary; it was to be permanent. What then was the ulterior motive? Before he dealt with that he would like to point out that the tax was by no means a small one. He had taken the trouble to work out the percentage. On corn it was 3·67 per cent. ad valorem; on flour, 4·4 and on wheat and flour together, 3·9 per cent.—practically a tax of 4 per cent. on bread. On maize it was as high as 5½ cent., and it should be remembered that there were enormous importations of maize into this country, it being increasingly and extensively used for a number of purposes. It was not candid to blink or hide the fact that this tax would have a Protective effect. The right hon. Gentleman the Member for Thanet, he understood, did not admit that it was Protective, because it was not, Protective enough to prevent foreign corn coming into this country. But, so far as it went, it undoubtedly was Protective. The right hon. Gentleman the Chancellor of the Exchequer, in what fur him was a passionate speech, on the previous night repudiated having an ulterior motive. But he lilted a corner of the veil which hid those very high regions where policies were decided, and where even divisions were taken, resulting in one side being victorious and the other beaten, and from what he said of making trade freer with the Colonies, it was not unnatural to inter that some ulterior motive of giving tariff preference to the Colonies had been lurking in some of those august places, In a speech delivered on the 16th May last, the Colonial Secretary said it was our business to "keep British trade in British hands" At the same time, he denounced what he called "economic pedantry" and "old shibboleths." He thought it might be supposed that when the right eon. Gentleman spoke of old shibboleths he meant the Chancellor of the Exchequer and the Member for West Monmouth. When he spoke of keeping British trade in British hands, did he mean to suggest that there should be some preferential treatment or the colonies such as was supposed to have been intended? We now know that he did not, at any rate, mean a customs-union between this country and the. colonies founded on absolutely Free Trade between them, for the Chancellor of the Exchequer now declared that this was an impossible tiling to expect. It had been stated that, whereas a customs union was possible between the German States, because they were close together and not separated by any difficult seas, it would be impossible with regard to the colonies, because they were separated from us by sea. But the German States were separated by land roads, and these were very often more difficult than the sea. The easiest and cheapest roads of all were the seas. The sea did not divide, it united the sea routes were always open, and there was nothing in physical conditions to prevent a customs union between England and her colonies. There were however, other reasons which he would not now go into. The Chancellor of the Exchequer, in disposing of this ulterior motive, suggested that at any rate we were not going to impose any new duties as against the foreigner in favour of the colonies. But it did not matter whether we imposed new duties on the foreigner and not on the colonist, or tool; off old duties from the colonies and not from the foreigner—it came to the same tiling; it was a preference. His ideal for this country was founded on its geographical position. England stood in a. geographical position which dictated her policy. She stood centrally in the sea. with all the four quarters of the world grouped around her. She was in the sea and at the crossing of all the great sea-roads. Her natural destiny, written on the map by Nature itself, was that she should be the carrier of the world. Every trammel and every difficulty should be removed from the way of trade, and the easiest way of all was not to levy any customs duties, not only because of the cost it meant to trade, but of the difficulty it threw in the way of business to the merchant. His ideal was that we should develop the carrying trade by this country becoming a free port or the world. But we could not now reach that ideal. We must count with the weakness of human nature and the indisposition of Chancellors of the Exchequer to let the people know that they were paying the taxes which the Exchequer required; and therefore they must assume that, until human nature readied a greater state of perfection or information, customs duties to some extent would continue to be levied here. He reminded the Committee that the difficulties in the way of dealing with colonial trade as compared with foreign are, by preferences, were very considerable. Our trade with the colonies was but one-fourth of the whole, while our trade with the foreigner was three-fourths. He did not say that the difficulty was insuperable, but it was considerable. Doubtless the colonies loomed very much larger than they did. Even the Foreign Office which was always the last to hear of anything worth knowing, had now discovered the Colonies. He observed that the noble Lord the Under Secretary for Foreign Affairs went down to Rochester last Saturday, and, in one of those high flights of oratory to which his constituents were more used than we were in this House, explained that the colonies had become so important that we had taken them into partnership, and said that the firm was now Great Britain and Sons. He was too modest: it was not Great Britain and Sons, it was Great Britain and Sons, and Sons-in-law, and Nephews. The hon. Member admitted that the time might arrive when we should have to reconsider the whole of our system and policy, including customs duties. There was no magic in Free Trade. It was a question of opportunity. It was not because of the name "Free Trade" that be offered any objection to the corn duty, though he did consider that it was a bad tax in itself as compared with other customs duties. When we were in financial straits, and when the Chancellor of the Exchequer scarcely knew where to turn for the necessary money to meet the expenditure of the year, he, on that ground, was perfectly prepared to vote for the corn duty, though all Free Traders might say him nay. But when that necessity had vanished—and it was established by the figures of the Chancellor of the Exchequer that this duty was not required for the revenue of the year—then he was unable to vote for it; in fact, as the circumstances were now shown to be, he meant to vote against it. It might be that at some future time, looking to that portentous continent of America which was flourishing in spite of Protection, we should come to the conclusion that we, too, must adore the gods we had burned and burn the gods we had adored. But we must be wary. Although Protection had succeeded there, it might fail with us. King Ahaz, we were told, "sacrificed unto the Gods of Damascus which smote him, and he said, because the Gods of the Kings of Syria help them, therefore will I sacrifice to them that they may help me. But they were the ruin of him and of all Israel." We must not court the fate of Ahaz. But his mind on this subject was open. If there was a Minister who was prepared to come down there and show that, in the face of the terrible new menaces and perils to our carrying trade, we must adopt new policies, he was not going to be prevented from entertaining that proposal by any old shibboleth or economic pedantry such as had been referred to. He did not object to the corn duty, because it might be held to be contrary to Free Trade, but because, as it was now proposed, it was either too much or too little. It was too much if the revenue did not require it; but if the revenue required it, it was too little on which to found such an enormous change of policy as was suggested by the ulterior motive, if that existed. Whether the motive of the corn duty were really, as alleged, a motive of revenue, or the ulterior motive of Protection and preference, on neither ground was it necessary or politic, and on both grounds he would vote against it.

said that the discussion might very well be directed to the consideration of the manner in which this tax would affect poor people. He should have preferred to adopt the suggestion made by the Chancellor of the Exchequer last night, that the Irish Members should postpone what they had to say until the Committee came to the consideration of the schedule; but it must be remembered that although Indian meal made from maize was far more largely used by the poor people of Ireland than any other article, yet that they were interested in others of the articles named in the schedule also. They were accustomed in that part of the House where the Nationalist Members sat to have regard to two sets of persons—the mass of toilers in the English towns who, in many cases, were flesh of their flesh and bono of their bone, and the people of Ireland. They could not feel indifferent to anything that might affect the price of bread in this country, but of course it was rather to the effect of the tax upon their own people that their criticism was most naturally directed. He merely asked the Committee at this moment to realise, if they had not already done so, how very largely those articles on which it was proposed to levy the tax entered into consumption in the very poorest families in Ireland. Though this might seem a very small matter, he could assure the Committee that it was one of vital importance to a very large number of exceedingly poor people. He did not mean to make a poor month for the people who were to be found in the congested districts, but he desired to direct attention once more to the Family Budgets which were to be found in the first Report of the Congested Districts Board for Ireland. In the case of a family whose total income was £14 3s., it was found that the meal which the Chancellor of the Exchequer proposed to tax cost no loss a sum than £5 17s., or more than one-third of the whole of their expenditure. In other cases described as those of families in "ordinary" and "comparatively good" circumstances, the expenditure on meal was from a fourth to a fifth of the whole. There would not be a single item in the whole expenditure of such families which did not contribute to the revenue if the present proposal were carried. It might be said that such family budgets as that to which he had referred were not now to be found in Ireland, so greatly were the operations of the Congested Districts Board, and other remedial legislation, held to have improved the condition of the people. He was most grateful for the undeniable benefits conferred in that way, and he would ask the Committee to bear in mind the recent Report of the Royal Commission upon Local Taxation. He specially directed attention to the separate recommendations in regard to the amount and distribution of the Exchequer grant, and to the very startling statements as to the condition of the people of the West which were to be found therein. The inhabitants of the congested districts, said the Commissioners, were "mainly composed of two classes—the poor and the destitute." Had it come to this—that Britain could not support her great Empire in any other manner than by placing the bulk of the cost of it on the shoulders of the poor and the destitute?

said he assured the hon. Gentleman who had just sat down that the House had listened with attention to the figures which he had quoted; but the same thing was true of almost any indirect taxation. Hon. Gentlemen opposite had from the first realized that if they were to admit that the evil of the tax consisted solely in the addition of the duty to the cost of grain, the change in price would be so slight that it would be hopeless to attempt to raise any agitation against it. It had, therefore, become necessary for them to seek other grounds for attacking the proposal. The first was, that this was the initial stop towards Protection; and the second was, that the amount of the tax was only a small part of the sum which in consequence of the tax would be paid by the consumer. Now, everyone would admit that political power had passed in this country out of the hands of the landed interest, into the hands of the industrial classes. Did any one suppose that the class which held political power was going to tax themselves for the benefit of another class which had not political power? It seemed to him that the Chancellor of the Exchequer might easily have imposed indirect taxation, which would really have been going a step towards Protection. It had been suggested that manufactured articles imported from abroad might be taxed, and there were many grounds on which that proposal might not be considered unreasonable. But it was obvious that there were two insurmountable objections: first, the interference with trade; and second—and to his mind the stronger—that it was impossible to tax one manufactured article without immediately raising an agitation for the taxation of all manufactured articles. Those engaged in other industries, and especially in depressed industries, would immediately agitate that their particular trade should also be protected; and that is an agitation which would have life in it, which would be popular in many districts of the country, and which would be popular with the classes in whose hands political power rests. From that point of view, it seemed to him that it would be impossible to find any other tax which was less likely to be extended in future, and was less open to the suggestion that it was a beginning of a return to Protection. He knew that the Leader of the Opposition had referred to the pleasure which the imposition of this tax had given to the right hon. Gentleman the Member for Sleaford, and the right hon. Gentleman the Member for Thanet, but surety this was a question upon which hon. Members could judge for themselves. But if there were any hon. Members who had not sufficient confidence in their own judgment, and preferred to bow down before some authority, he would set against the opinion of these right hon. Gentlemen the opinion of the hon. Member I for Waterford, who, in his first speech, expressed himself as opposed to this tax because it did not protect agriculture. He admitted that if the question of a Customs Union were really within the range of practical politics, the position would be different. He agreed with the leader of the Opposition that the Colonies had much to give us, and that we had very little to give them in exchange. They could give us, as Canada had given, preferential tariffs; and he did admit; that the working men of this country might very easily be tempted, by the prospect of a better ma rivet for their manufactures, to face even a higher price for food. But this question of a Customs Union seemed to be surrounded by difficulties which were almost insurmountable. The greatest difficulty was that the Colonies could send nothing but raw material, and largely food, which was the last thing which it would be wise or possible to seriously tax. But it did seem to him that the Government might do something in uniting more closely the trade interests of the Empire from one point of view. It had been in the air that the Colonies were considering some form of bearing their share in the defence of the Empire. Would it not be possible to induce them to bear that share in the shape of giving us preferential duties throughout the Colonies? He knew that the Opposition were so fond of Free Trade that many of them would object to that advantage because it came in that form; but the country would most gladly welcome anything which promised an expansion of trade in that direction. If there were difficulties in the way of a Customs Union, were there not difficulties in the way of leaving things as at present? Was it true that our supremacy was due to Free Trade, and would continue? Look at the strides which other nations were making in competition with us. Look at the United States and Germany. He would leave the United States out of account, as they had now the advantage which we enjoyed forty or fifty years ago—cheap coal and cheap iron; but Germany had no such advantages, and look at the industrial position Germany had attained, If we claimed that our industrial I position was due to Free Trade, might Germany not claim that hers was due to Protection? Personally, he thought that under existing circumstances Free Trade was best for this country, but he could not see why anyone could hold that it was like a religion, which they could not even discuss or think of altering. Germany was now sending steel and iron to the very centres of the iron and steel industries in England and Scotland, and was also sending locomotives to our own railways in India. That ought to give us ground to think that perhaps our supremacy was not so long-lived as we might hope, and he believed that the time might come when the only chance of continuing the industrial prosperity of this country would be some system of bringing the trade connections of the Empire closer together and keeping British trade in British, hands. The other argument of the opponents of the tax was that the consumer would have to pay a great deal more than the amount of the tax; that was, that because there was no coin in common circulation smaller than a half-penny; therefore, however slight might be the addition to the cost of production, the consumer would have to pay a half-penny extra for his 4lb, loaf. He knew that hon. Gentlemen opposite were fond of appealing, when it suited them, to economic authority; and he challenged them to produce the authority of any economist—who was not a rabid politician or a man fit for a lunatic asylum—who would contest the argument that, in the long run, the, producer could only get from the consumer the addition of his cost of production and nothing more, ft was curious to notice the different attitude towards this theory of hon. Members on the other side of the House. The right hon. Gentleman the Member for West Monmouth did not identify himself with that argument at all. On the contrary, he expressly pointed out the absurdity of it. But the Leader of the Opposition not only adopted, but exaggerated it, in a speech he delivered in the North of England, in which he said that the consumer might not only have to pay £2,500,000 of the tax, but a total of £14,000,000 or £15,000,000. On that theory the countries which, raised the bulk of their revenue from such, taxes, like the United States, Germany, and France, must obviously have been ruined long ago. He was more than surprised that the right hon. Gentleman the Member for East Wolverhampton had identified himself with the same theory. The right hon. Gentleman, it was true, added some refinements to it. He pointed out that there would be the cost of manipulation—provision for the capital required, and provision for bad debts. Put in this vague ways these statements sounded rather alarming, but why should they be put in this vague way? These were all matters of calculation, and if the right hon. Gentleman had taken the trouble to calculate what they would amount to, he would not have taken the trouble to have laid his argument before the Committee. Manipulation—a Custom House clerk at £100 a year! What was that on the 4lb. loaf? About one two-hundred-and-fiftieth part of a farthing! As to interest on capital, and the provision for bad debts, the Committee would remember that the interest was not interest on the capital value of the flour, but only on the amount of the tax. A fair provision for bad debts would be about 2 per cent.; but say that the provision for bad debts and the additional capital required reached 10 per cent., that would amount to ½d. on the cwt. of flour, equal to one-hundredth part of a farthing on the 4lb. loaf. The position, therefore, remained exactly as before, namely that the bakers were going to make an additional charge of ½d. on the 4lb. loaf, whereas the extra cost to them was only half a farthing. He had ascertained from a baker in Glasgow that if this theory were correct it would mean an additional profit to him of £15,000 a year. Was that possible? If the theory of the right hon. Gentleman the Member for East Wolverhampton was true, he must say that the obvious duty of the Chancellor of the Exchequer was to multiply the duty by four, for, according to that theory, the consumer would still only be charged d. on the 4lb. loaf. It would make no difference to the consumer, but it would make a very great difference to the Exchequer. The right hon. Gentleman the Member for West Monmouth challenged the House to produce any authority who would state that the cost of production should not be added to the selling price of the article.

I never said anything of the kind.

Here are the right hon. Gentleman's words—

"Is there an article in the world of which, if you put an increased charge upon it, that does not raise the price to the consumer?"

That is exactly what I did say. I entirely avoided the whole question of cost of production.

failed to see that there was any difference between saving that the increased price was due to increased cost of production, and that the increased price was due to increased charge. What was the difference? He did not think that he misrepresented the right hon. Gentleman. The right hon. Gentleman would certainly admit that in the case of coal sent abroad the export duty would be an increased charge on that coal; but, speaking on the coal tax last year, the right hon. Gentleman said—

"I venture confidently to affirm that this tax will not fall on the foreign consumer, but on the home producer, it is on the miner that the burden of the shilling will fall."

Hon. Gentlemen maintain that every import tax must be paid by the consumer, but, as the right hon. Gentleman the Member for West Monmouth pointed out, that was a question of theory. It could not be proved by practice to be true—ho did not say it was not true—but if it could be proved that a. single farthing of the tax was paid, not by the consumer, but by the producer, the whole theory fell to the ground, and every one could then judge how much was paid by the consumer and how much by the producer in the light of his own common sense. He would remind the Committee what had happened since, and in consequence of, the Budget. One of the large American railways had reduced their rate for flour 2½ cents per 100 lbs., or rather more than a fourth of the Budget tax. Who would get the benefit of that? Would the American miller? The railway company would not reduce their rate in order to make the American miller richer. They did it to make sure that as large a proportion of flour would continue to come over their lines in spite of the change in the Budget. It was obvious, therefore, that, to the extent of 2½ cents per 100 lbs., the producer or his agents paid, and that that was not paid, by the consumer. When it was admitted that a part, however small, was paid by the producer or his agents, the whole theory fell to the ground, and everyone must then judge from his own experience. Hon. Gentlemen on that side had been delighted with the unanimity of hon. Gentlemen opposite. He had not been long in the House, but it was the first time that he had ever seen hon. Members united. He would, however, advise them not to build too much on the tax. It seemed to him that, by the time they had the agitation in full working order, they would discover that the people of the country would have found out that the tax did not mean any addition to the price of bread—no, he would not say that. He was not like some hon. Gentlemen opposite. He stated what he believed to, he true. [Cries of "Withdraw."] Yes, he would withdraw that statement; he did not mean to say that he would state what he believed to be true, but what he believed to be sound. When hon. Gentlemen opposite had their agitation in full working order, people would have discovered that there was no appreciable addition to the price of bread, and when they sent out their pictures of the big loaf and the little loaf they must remember that if these pictures were correctly drawn it would be impossible, without the aid of a microscope, to tell which was the big and which the little loaf. It seemed to him on that question, as with many others, that hon. Gentlemen opposite, who claimed to be the party of progress, were really living on the prejudices of the past, and were trying to make political capital out of the watch cries of their grandfathers. They would find, however, that the driving power which was behind the Anti-Corn Law League was not theoretical; it was not imaginary—it was real. That driving power would be absent, and hon. Gentlemen would find that their agitation would consequently fail.

I have always listened to the hon. Gentleman who has just sat down with interest and attention. The opinions he holds are the only opinions that are sound; and the opinions of all who differ from him are utterly unsound. I was not impressed with the hon. Gentleman's economic doctrines, which, in my opinion, are thoroughly unsound. He misinterpreted my statements, and does not see the difference between an objection to a tax which is a fixed charge on a commodity under all circumstances, and a tax which varies at different times—a difference which is recognised by the most sound economists. Therefore, I dismiss the hon. Gentleman's economical arguments; but he stands today, as he stood a good many weeks ago, in the character of a prophet. Before this tax had commenced to operate, he assured the House, with that confidence in his own opinion which he displays, that it would not affect the price of bread at all. Within a week of that prediction, for all the lower classes of bread, which are the food of the poorer classes of this country the price was raised. Does the Chancellor of the Exchequer deny that? It is known in the East End; it is known in Lancashire; it is known at Bury. Now, the hon. Gentleman, having failed in his prediction, puts forward another prophecy; but he must excuse me for placing little confidence in it. I dismiss the latter part of his speech, first because in theory it is perfectly unsound, and secondly because in point of fact it is entirely unfounded. I pass from that to another part of the hon. Gentleman's speech. I confess I attach more importance to what he said with reference to the question of differential duties in respect to the colonies, and I join with him altogether in his opinion that it is perfectly impossible that we can have a customs union with the colonies; and for this reason: the colonies cannot afford to part with their Protective duties. The right hon. Gentleman the member for the Thanet Division knows that perfectly well, and that a customs union with this country would naturally be a Protectionist union. They can only join with us on the basis of Protection. I received the other day a document, which seems to me to be an authoritative document. It is the manifesto of the Canadian Empire League. The first article of the constitution of the League advocates a policy between Great Britain and the colonies by means of which a discrimination in the exchange of natural and manufactured products will be made in favour of one another and against all others." That is the only basis on which the colonies will deal. I will ask the House to examine this document in relation to the Budget of the present Government. It was issued three months before the Budget was introduced, and this is the declaration on the part of this Empire League, which has apparently branches in this country, and we may take it as an authentic statement of the views of, at all events, Canada. No doubt the argument is the same in the other colonies. It is corn and timber in Canada, but it would be wool in Australia, and so on. Therefore, we may apply this doctrine to all the colonies, and regard it as the basis of the negotiations on which the colonies will enter. At a meeting of the Empire League held at Toronto on 1st February, 1902, the following resolution was passed—

"Resolved, That this meeting is of opinion that a special duty of 5 per cent. or 10 per cent. should be imposed at every port in the British possessions on all foreign goods."

Then, in a speech made on this subject, the President of the League said—

"As will be seen by the admirable report, our League has been advocating the principle of a special duty of 5 per cent. or 10 per cent. to be imposed at every port in the British possessions on all foreign goods in order to create a fund for Imperial defence. There is no doubt-something will have to be done towards taking our share of the common defence, and this tax will not only provide the funds, but will give every part of the Empire a preference in the markets of every other part over the foreigner."

If that is not Protection, I wonder what it is. The way in which it bears on the Budget is stated as follows—

"New methods of taxation are absolutely necessary in Great Britain, and there is no difference in the way except the over confidence against which Kipling writes, and the strong prejudice in the English mind against taxing wheat."

The people who have overcome these prejudices are Rudyard Kipling and the Chancellor of the Exchequer. It is a very remarkable thing that two months after this, declaration this tax on wheat appeared. As soon as the prejudices in the British mind against a tax on wheat are overcome by the joint efforts of the poet and the financier, then the whole thing is done. There will appear the tax of 10 per cent. on all goods introduced into this country by the foreigner, and the whole thing is accomplished. And the right hon. Gentleman the Member for the Thanet Division will be perfectly satisfied. Again I quote—

"It seems incredible that the mother country should refuse this after the efforts made by the colonies, and one cannot help hoping something will be done in this direction."

The Chancellor of the Exchequer yesterday disavowed any intention of adopting this policy of universal duties to be levied upon all foreign goods. He said we are to proceed on the principles of Free Trade. But he introduced a sentence that something may be done in that direction. A great deal of doubt has been raised in reference to that sentence.

That sentence related solely to the idea of complete Free Trade between this country and the Colonies, which I said was impossible.

Then it is only an impossible hypothesis. So long as it is taken to be only an impossible hypothesis I am less dissatisfied with it than I was before; though I fail to see, if you had Free Trade with the Colonies, how you could depart from the principle of universal Free Trade with the world. That is our position, and that is the foundation of our prosperity. The hon. Gentleman who has just sat down said that Germany was successful in her competition with us. Yes, but I think Germany, at this moment, would be extremely glad to have our prosperity in trade. Everyone knows that the condition of German trade is far less prosperous than ours; it is notorious that it is on the wane, and not on the increase, in the competition of the world; and therefore the condition of Gorman trade is a very bad argument to show that their system of commerce is better than ours. The hon. Gentleman also said it was a great evil to put a tax on raw material. But is not corn a raw material? Yes, it is the raw material of the most valuable of all products—of man and labour—and a tax upon corn is one of the worst taxes that could be imposed, for it raises the price of bread. We are going about the world, in China and elsewhere, preaching the doctrine of the open door. We are telling Germany, Russia and France that we will insist upon the open door. Yet the same gentlemen who talk about the open door abroad advocate the closed door in England. For the sake of the Colonies, they would close the doors of the British Empire against all foreign countries from whom we are demanding the open door abroad. You had better shut your mouths on the subject of the open door in future, if such a policy as this is to be adopted. I observe that a predecessor of the light hon. Gentleman in the office of Chancellor of the Exchequer made a statement in another place about the prosperity of the country, in consequence of its commercial policy, and I will add also of its currency policy; and he showed the marvellous results, equivalent to those created by the magical lamp of Aladdin. Having performed by that the transformation of this country, which I have seen in my life time, in the last half century of the commercial prosperity of this community, we are asked to throw away the old lamp, and to buy the wretched new lamps which are now being hawked about, and which will destroy all the work that has been achieved by this policy in the past. I am sure there is common sense enough loft in the people of this country, and I hope, at least, that there is common sense enough in the Government of this country not to play tricks with the fundamental principles upon which the great prosperity of this country has grown, and upon which we have been able to compete with success against all the nations of the world.

This debate has been a most remarkable one in many respects, but I think it has been most remarkable for the speech of the right hon. Gentleman the Member for West Monmouth and the line of argument he adopted. He has gravely produced a pamphlet containing the Report of an executive Committee of a private Association in Canada, and has referred to that document as if he could find in it an official explanation of the intentions and policy of His Majesty's Government.

I quoted it as the view to be presented by the Canadian Government. I believe I am perfectly justified in that statement.

I think the right hon. Gentleman went a good deal further than that, but if he only went as far, he might just as well have taken the Report of the United Traders Association in this country as being the views of this Government, and quote that as an official document he was entitled to rely on. The views of the Association are entitled to the respect which they command on their merits, and for the ability with which they are put forth; but they are not binding on the Canadian Cabinet, still less on the Government of this country. It is rather a far-fetched suggestion that in such a Report as that is to be found the basis of the action which His Majesty's Government are now proposing. As a matter of fact, the Report appeared two months before the tax was proposed. Allusion has been made to a speech delivered by the Colonial Secretary at Birmingham. But in that speech the Colonial Secretary was commenting on a speech made by the Leader of the Opposition. He was not arguing in favour of preferential relations, but he was refusing to be deterred from proposing a tax which he believed to be good on its merits, merely because it might be used, if the people of this country so willed, to draw closer the ties between the Motherland and the Colonies. That was a declaration which was emphasised by my right hon. friend the Chancellor of the Exchequer on Monday. The whole question between the Opposition and the Government now is that hon. and right hon. Gentlemen opposite wish to extort from the Government at this stage a declaration that in no circumstances and at no time will they consent to preferential arrangements with the Colonies. Sir, I think it would be a strange proceeding if, before learning authoritatively what the Prime Ministers of the great self-governing Colonies intend to propose, before hearing the arguments with which those Ministers may support their propositions, the Government were to slam the door in their faces and solemnly declare that they would not listen to any arguments on the subject. That would not be a very friendly act, nor a very generous recognition of the spirit which they have shown, and which we are unanimous in emphasising. It would not be courteous in dealing with strangers, and it would not be decent in dealing with our kinsmen. It was suggested by the right hon. Gentleman the Member for West Monmouth-shire that, unless we are prepared to adopt this course, we must give up talking about the open door in China. Was ever such a preposterous suggestion made to an Assembly of this kind? What was the open door for which we asked in China? It was equal opportunity for all nations. What possible connection is there between the treatment which China is to accord to foreign Powers, and the relations which are to exist between Great Britain and her Colonies and dependencies? I confess that I think, in attempting to bind ourselves as to the future, we are rather premature, and straying very far from the merits of the proposal which is before us. When this tax was first proposed, the objections taken to it were of a very different kind. I think we should at least get back to the real merits of the proposal, instead of discussing the merits of something which has not been proposed, and which is not before us. The objections to this tax raised by the right hon. Gentleman the Member for West Monmouthshire were on account of the burden it would impose upon the poor, and he rise which it would cause in the price of bread. The right hon. Gentleman attempted to answer the second most remarkable speech which my hon. friend the Member for the Blackfriars Division of Glasgow has addressed to this House, but I confess that I am wholly unable to follow him in his expositions of the principles of political economy, which vary from time to time. According to the right hon. Gentleman, the principles of political economy on a coal tax are different to those which apply to a corn tax. They are different, as far as I can understand the right hon. Gentleman, at different periods. He regards the extra cost of production produced by a tax, as some thing which is wholly different from any other cost of production, and which will affect price in a totally different way, and will not be governed or limited by the ordinary rules of supply and demand. I cannot put a tax in a category of that sort by itself, with special rules and principles unlike those which govern all other items of cost of production. Whatever share of the cost of production falls upon the producer, or the consumer, or the intervening interests dealing with corn, the price, I believe, will be regulated in the long run by the ordinary laws of supply and demand, and I venture to say that under no circumstances, in the end, putting the tax at its highest, can it be larger than the amount levied. The light hon. Gentleman says that it has already raised the price of bread, but when he was challenged he had to admit that he meant only certain prices of bread, and if be had been pressed still further he would have had to admit that the price had been raised only in certain places. Take Glasgow as an example. Has any baker raised the price of bread in Glasgow?

I do not know.

If the right hon. Gentleman had made inquiries he would have known. I have never argued that no part of this tax will be borne by the consumer, but I do say that such a sweeping statement as the right hon. Gentleman has made is as unfounded and unsupported by reason as if I were to assert, with equal confidence and equally little reason, the absolute opposite of what he said. The right hon. Gentleman and the Leader of the Opposition both find in this tax an economic heresy which they feel it necessary to stamp out and extinguish on its first appearance. I do not want to repeat more than need be what has been said to the Committee already on more than one occasion by more than one speaker as to the different views which the earlier exponents and perhaps the more authorised exponents of Free Trade took of this tax. Already the Committee has been reminded that for twenty years after the Anti-Corn Law League was dissolved as having accomplished its work, this tax remained in operation without, as far as I am aware, a single protest against it by those who took part in the great Corn Law struggle. We know that Mr. Gladstone himself, if the right hon. Gentleman the Member for Montrose will allow me to say so, thought so little of this tax that he preferred to reduce the duty on bottled wine rather than abolish this "Protective" tax. I have one quotation which I will venture to read to the House in support of this tax, which possibly the right hon. Gentleman the Member for Montrose will recognise. It is a quotation from Mr. Cobden. He says—

"By repealing the present corn laws and putting a fixed duty of such an amount as would levy the greatest revenue, we approach no more to a tax on corn than on tea or sugar, for the purposes of revenue. By putting such an amount as would bring the greatest revenue, which probably would be found to be 2s. a quarter, such an impulse would he given to the manufactures of this country while so great a shock would be experienced by our rivals through the augmented price of food all over the world, that a rapid growth of wealth and increase of prosperity must take place throughout these coal districts of England, Wales, and Scotland."

That is what Mr. Cobden says in his early writings, in a pamphlet which went through a great number of editions. I am bound to say in fairness that this was a view which the editor of his writings says Mr. Cobden subsequently abandoned, and that he subsequently modified his views upon this point. Nevertheless, the argument which I have quoted was Mr. Cobden's argument in his own words, and the correction was made by somebody else. If such a tax was as fatal to Free Trade principles as hon. Gentlemen opposite would have us believe, do they suppose that, when he was arguing in favour of Free Trade, Mr. Cobden would have written in support of a tax of double the amount which the Government are now proposing? At the present time there exists a necessity for enlarging the sources of our revenue and for spreading wider the burden of taxation borne for the advantage of all classes and accruing to the advantage of all classes. That assertion I think can hardly be contested by any one. It is, of course, easy to bring individual cases of hardship before the Committee, and to influence hon. Members by producing the family budgets of the very poor, and asking us if we wish, in any way, to make life harder to those to whom it is already very hard. No one can have listened without being impressed to the description of life in the West of Ireland, given by the hon. Member who spoke from the Irish Benches, and who made a speech which was listened to with interest, and which none can have listened to without sympathy. I do not think, however, that it is quite fair to treat the figures he gave as the complete budget of those families. But if the Committee are to be ultimately guided by arguments of that kind, how far are you going to carry that argument? Are you going to be logical, or are you going to confine your argument to this single tax? We have abundant evidence that among the poor families of this country, and also in Ireland, tea is a most important article of diet. I do not say that it is obtainable at all times, but it does enter largely into the family budget. When we were discussing the sugar tax, hon. Members opposite were never weary of telling us that sugar was the first necessity of life to the poor. Are hon. Members opposite prepared to relieve all the necessaries of life of taxation? [Cries of "Yes!"] Then I should be very glad to see the Budget which hon Members opposite would present to the country. Unless those who oppose this clause are prepared to say that no necessity of life, or anything which can be regarded by the poor as a necessity of life, is to be subject to taxation, it is idle to blame or condemn us because some portion of this tax will fall upon the very poor. I am not at all certain that tobacco is not as much a necessity of life—[Opposition cries of "Oh, oh!"]—perhaps hon. Members will allow me to finish my argument before they laugh. I am not at all certain that tobacco is not as much a necessity to some people as either tea or sugar, and I am certain that many very poor people spend some portion of their income in alcohol. The argument is that these poor people ought not to be taxed. [An HON. MEMBER: That necessaries ought not to be taxed.] That is not the argument. The argument is that you ought not to impose taxation on the poor, or the very poor. [An HON. MEMBER: For the necessaries of life.] It is difficult to carry on a discussion in this House in the face of these interruptions. The right hon. Gentleman correctly states that we are adding another tax. That we are prepared to defend, but your argument, if you carry it to a logical conclusion, means that there should be no tax at all on those people. Unless hon. Gentlemen opposite mean that there should be no tax at all on the bread of the poor, half of the arguments that they have used and seven-eighths of their rhetoric falls to the ground and has no meaning whatever. We do not wish to place an undue share of the burdens on the poor, but when you consider whether the share is undue or not you must look not at one tax alone, but at the whole of our taxes; and the compensation for the heavier force with which this individual tax presses on the very poor, or on the poor, than on the rich, is to be found in those burdens which press not with greater force on the rich than on the poor, but which press on the rich alone, and leave the poor free. That some proportion of taxation should be borne by those who direct the policy of the country, and who control the expenditure, is to my mind the only safe ground for any Government to take up, and the only ground which promises that due regard should be had to the value to be obtained, and to the importance of the object sought, when any new expenditure is pressed upon us by any class of the community. For my part, I have always been willing to admit that some portion of this tax would be borne by the consumers, and that among the consumers even the poor would pay some portion of it; but that a tax of an eighth of a penny on the 4lb loaf, is to make the difference between comfort and lack of comfort, between pauperism and superiority to pauperism, I do not believe anybody can prove, and I do not think anybody can bring a reasonable argument to show that that will be the case. This tax, even if the whole of it falls on the consumer, is a very small portion of the weekly budget of any family. I calculate that to a London family, for instance, earning 20s. a week among its members this tax would not be a penny a week. I do not believe that a tax like that is one that they will grudge. I do not believe it is one that will seriously affect their comfort. On these grounds I have throughout supported this tax, and it is on these grounds that we commend it to the acceptance of the Committee. I think from the assurances of support we have had in this House, as indicated when the subject was previously under discussion, we have no need to fear the verdict which will now be given.

said he would not deal at length with those minute and fine-spun arguments of which the Committee had heard so much. This place, after all, was not a debating school or a lecture room for the discussion of the minuter and more complicated details of political economy. If they dealt on sound principles with the general tendency and bearing of the tax, they would go as far as they could properly go here at present. He maintained, first of all, that this was a Protective tax, and thus objectionable. He did not care about good intentions in this matter. It was pretended to be a tax imposed only for revenue purposes, and not with a Protective design. That did not alter its nature. The intention in the proposer's mind was quite immaterial. Whatever the intentions of the proposal might be, its effect was essentially Protective or restrictive. It was said to be a doubtful question to what extent the tax would be borne by the ultimate consumer. That might be, with regard to different subjects of taxation, a highly complicated question; but when a tax was imposed on the import of an article also produced at home, its tendency always was to increase the cost to the consumer. He happened to have lived almost all his life in a country which was blessed with innumerable Customs duties. Sometimes they were called duties imposed for revenue, but they were always duties which no one here would call other than Protectionist. They imposed serious restrictions on the foreign producer, more or less to the advantage of the home producer, at the expense of the home consumer. The question as to the precise extent to which a tax on a particular article fell on the consumer was, he agreed, not always answered by adding the full amount of the tax and traders' profits thereon to the charges incidental to the cost. They had always to deal with the law of supply and demand and of competition, as affected by the condition artificially produced by the restriction. There was also the higgling of the market to be taken into consideration. The desire of the foreign producer to retain the market he had made, or to make a new market, sometimes induced him temporarily to part with some portion of his large profit, and thus to reduce the increase of charge to the consumer. To that extent he made the hon. Gentleman opposite a present of the argument that there might be cases in which the foreign producer did, in a sense, temporarily bear a portion of the tax. It was useless to go into these discussions. The fact remained that the tendency was universal, and the variations of degree were, for the present purpose, immaterial. That being the case, the present proposal was objectionable in this country, which justly boasted of being a Free Trade country, because it was the reintroduction of the Protective principle. The hon. Member for the Blackfriars Division of Glasgow pointed out that here was a case where the masses held the power if they knew it, and true there was no danger of unjust advantage to the classes. But who pretended that the classes did not hold power far out of proportion to their numbers? Their concentrated strength, capital, and organising facility would always give them far more than their fair share of political power in this country, because the masses could not use the power they possessed in proportion to their real strength. The hon. Member had said that this tax was not dangerous. But the fact was that from the crew of Tree Traders no tax could be proposed so dangerous as the corn tax, because it gave reason to the whole manufacturing population, not agriculturists, to say, "Our bread is taxed; you alter our position for the worse; give us, too, relief." Thus if a tax upon corn were imposed the door of Protection would at once be opened, and they would be asked to tax a large number of the products, which were imported and came into competition with our own manufactures. This would be the cry of the member for Sheffield, this was why he had cheered the tax. He (Mr. Blake) would object to this tax even if it were not Protective, because it was a tax on the staff of life, on the cheapest food of the poorest persons, and pressing most of all on the poorest of all. It was very well for the Secretary to the Treasury to call for rigorous logical demonstration before allowing weight to these arguments. But in matters of taxation it passed the wit of men to devise a symmetrical and logical system by which there would be equality of sacrifice for all classes. It was only possible to produce some very rude approximation to justice, but it was a true doctrine that the very poorest should be burdened as little as possible. In order that a man should pay taxes he must live. They must not starve the goose that laid the golden egg. It was only out of the surplus after keeping body and soul together that one could pay. But this tax hit not merely or most heavily the average mechanic, but the poorest of the poor. Then the true economic interests of the State, not less than the dictates of humanity, forbade in tax which would starve them more. It was all very well for the hon. Gentleman opposite to say that the poor were compensated by the circumstances that the rich paid taxes which did not operate upon them. In the cases he was pleading for it was no compensation. But he denied that the taxes imposed on the rich had no effect on the poor, and in support of that view he would quote words used by the Chancellor of the Exchequer on Kith May, 1900, when he made a speech in which he pointed out the virtues of economy and the serious condition of the country. The right hon. Gentleman said—

"We knew very well what happened in our private affairs if we allowed our expenditure, year by year for a series of years, to increase more than our income, and suddenly our income and our power of earning income diminished. Well, he did not say that the country would be absolutely ruined, but he did say that if we went on as we were going now, there might be very bad times in store for the people of the country, and particularly the working classes. Wealthy men could reduce their expenditure with little inconvenience. But how? By giving less employment than before, and that loss would fall upon men who wanted employment, and would be deprived, perhaps, of their daily bread."

Yes, that daily bread about which in these debates they were discussing whether it should he directly taxed or not!

"He had spoken, perhaps, at too great length on the subject, but he had spoken as he had because it was a subject on which he himself felt deeply, and was bound to feel deeply, as the Chancellor of the Exchequer, and on which it was his plain and bounden duty to speak to the country at large."

He denied that the tax could be defended by setting up that arbitrary balance which was proposed to be struck between direct and indirect taxation. He conceived that the new and absolutely arbitrary canon that there should be about equal sums levied in this country from the one source of taxation and the other, was utterly unjustifiable, because the proportion really depended upon the condition and relative ability of those who paid taxes as a whole, upon the wealth and paying capacity of the indirect as compared with the direct taxpayers which might he one way or the other. There was thus no ground for an equal division. Besides the question was not so simple. The rich paid something in direct taxation though to them it was a mere fleabite. The poor, as he had shown, were touched by indirect taxation; it might be little, but still it might seriously affect the condition of the very poor. The dogma of the even balance between direct and indirect taxation was incapable of bring supported either by reason or practical facts. Then as this corn tax would open the door more than any other to the agitation for Protection in this country, and also to the scheme for preferential tariffs, hence it followed that the question of the permanence of the tax was a very serious thing. He accepted absolutely the declaration of the Chancellor of the Exchequer that this tax had not been proposed by the Government in view of Protection or preferential duties; but when the tax was once put on it would give the greatest facilities to them or their successors for introducing these schemes, and when they came to consider the possibility of that danger the tiling became serious indeed. Time had always made very quick changes amongs politicians as well as other persons. Still the tendencies that produced those changes were frequently manifested long before the change, occurred. Changes themselves took place more rapidly in these days than formerly; and while he gave the Chancellor of the Exchequer full credit for what he said and for being determined that this tax should not be utilised in the sense and for the purpose suggested, he was not at ail so sure that at some future day the tax would not be employed for the purposes which had been referred to. He was not so certain of the resisting power of the Chancellor of the Exchequer as of his absolute straightforwardness in the statement he had made as to his present intentions. It had sometimes appeared to him that the phrase applied by Bismarck to the distinguished statesman at the head of the Government was not altogether inapplicable to the Chancellor of the Exchequer; and that he was not iron, but rather a lath painted to look like iron. He had noticed even in reference to the statements the right hon. Gentleman had made the previous day and that day, certain alterations from former utterances in temper, phrase, and tone, which were very remarkable. He wished to say that his great dependence for safety in the future against the dangers to which reference had been made, and which had impressed themselves so much on so many members of the Committee, was that if they came to close grips on this subject in the Conference with the leading men of the Colonial Empire, conversant with the revenue needs of their different Colonies, it would be found impossible to frame a system of British and Colonial preferential duties, as against the outside world, which would be at all favourable to this country, and in which the disadvantages of such a scheme would not be far greater than the advantages. And so, in his opinion, though depending on more complicated considerations, as to the Colonies themselves. The hon. Gentleman who had just sat down rather deprecated the idea of a plain expression of opinion in Parliament on this subject, before the Conference, and thus before there was any committal by the Executive Government. But he wholly differed. They ought to have plain expressions. In truth they had had some, which he rejoiced to quote. On the 24th October, 1900, the Chancellor of the Exchequer, speaking at Liverpool, after a, great commercial congress had taken place, said—

"There are two subjects which stand out prominently from the debates (in the Congress), and on which I should like to say a few words. The first was a desire for a Commercial Union, a closer commercial union throughout the different parts of the Empire; the second was a greater organisation for the common defence of the Empire. Now, with regard to the first, naturally enough, there were great divergencies of opinion. The result of your discussion was somewhat indefinite, because the subject was approached by some from the Protectionist point of view, and by others from the Free Trade point of view. Gentlemen, I wish to say for myself that I am convinced that it is impossible to approach this subject from a Protectionist point of view. I do not believe in the idea of preferential duties in favour of our Colonies, as compared with foreign countries on the imports of the United Kingdom, I do not want to argue the question tonight. I think if I had to argue it I could show you that any such duties would he dangerous to the utmost degree to our foreign trade, which is essential to the prosperity of the country. Put I may venture to say this much, that I entirely sympathise with the remark which I saw recently in the Press attributed to Sir Wilfred Laurier, the Prime Minister of Canada, when he said that in his opinion an Imperial Zollverein, though far distant in the future, was only possibly attainable with absolute Free Trade throughout the Empire. I am confident that this great question—and it is a great question—can only be approached and dealt with on the principle of Free Trade, and that any attempt to deal with it on any other principle is unkind and unfair to our colonists themselves, and is misleading them as to the possibility of public feeling in this country. To suppose that this country, after fifty years experience of what the freedom of taxation on imports of raw material and food means to us, will deliberately resort to the taxation of raw material and food from foreign countries is to my mind an impossibility."

The right hon Gentleman, however, had since risen superior to his impossibilities, because he was that day pressing this tax on food from foreign countries, in the hope of triumphing in the course of a few days. Then the right hon. Gentleman went on to say—

"I do not wish to argue the question further. I wish to simply state my own opinion, that any person in our Colonies or in this country who founds his views as to the future on the possibility of any solution of this question, except on the basis of Free Trade, is founding his views on the foundation of sand, and I would not for the world have the responsibility of saying to our fellow subjects that we can deal with it on any other basis than that of Free Trade."

So much for the Chancellor of the Exchequer, whom he only wanted by this quotation to confirm and fortify in his own views. Now he wanted to say a word in reference to the Colonial Secretary, He had seen the day before a rather amusing picture which represented the countenances, but not the other members, of two distinguished statesmen. They were sitting on a wall facing one another in a position of obvious and acute hostility. He had seen the countenance of one of those right hon. Gentlemen present at these debates, but not that of the other, on whose responsibility and utterances these debates had largely turned. But if the cat had not appeared the kitten showed, and worthily represented the parent's views. He would, however, say in justice to the Colonial Secretary, that although he had not recently refreshed his memory with reference to all that the right hon. Gentleman had said in public in the past, he did not remember to have seen any statement of his which was other than a suggestion to deal with this subject on the basis of absolute Free Trade between this country and the Colonies. The suggestion which had been made was that if there was absolute Free Trade with the Colonies, duties on articles of large consumption here, such as corn, timber, wool, and beef from foreign countries might be imposed. He remembered that as soon as the Colonial Secretary found that that principle of absolute inter-Imperial Free Trade was, as he ought to have known it must be, deemed impossible by those with whom he was conferring, his proposal was withdrawn. He had himself not observed in any public utterance of the right hon. Gentleman any ground for the assumption that he and his colleagues would press this subject except on a basis of Free Trade throughout the Empire. He owned he thought the earlier utterances of the Chancellor meant, as the condition of a fiscal union, Free Trade not limited to the Empire. But, any way, either view was fatal to the plan now in the air. And thus there did not seem ground for active hostilities at the moment between the Chancellor and the Secretary, though that might come later. It was from that point of view of Free Trade in the widest sense with all the world that he himself approached this question. In his opinion this country was critically engaged in a strenuous effort absolutely incumbent upon her to renew her strength, to realise her position, and to strain, every nerve to promote technical education, the adaption of supply to customers' demands, and economy, production and distribution, in a word to exhibit once again that wonderful energy, force, enterprise, and organising zeal which has made manufacturing, trading, carrying, and emigrating England the envy of the world, and thus to maintain her position. At the same time he thought there were circumstances they could not overbear, and conditions which, especially as regarded America, forbade the hope of their retaining the absolute predominance they had so long enjoyed. Yet he believed they would be able to fight their adversaries and be measurably successful, if they did not throw away their weapons, if they did not cast down the structure they had raised, if they did not destroy the foundations upon which alone they could maintain their prosperity. England's great advantage was that her policy did not rest on artificial and restrictive methods. Their position was that they rested on a solid foundation. They invited the whole world here, and got what they could of the world's trade. They not only preached, but they practised, Free Trade, as best not for themselves alone, but for all the world. But the moment they resorted to other methods they armed every Protectionist country with a weapon which they would be only too delighted to obtain. Let them keep true to the principles by which they had triumphed; and then although the struggle must be strenuous, it would be glorious. It was because he deeply felt these things for both these islands that he deplored the introduction of a tax on the first necessary of life, and its effect on the chief raw material of manufacture—labour; a tax which, whatever the intentions of the Government might be, was in its nature and essence a restrictive and, therefore, a Protective tax. It was because he felt deeply with regard to the impolicy and misfortune of this tax, in the burden it laid on the poor and on trade, in the dark example it set to the world, in the evil hopes it produced here and abroad, and in the leverage it gave for its own application and extension, that he should vote against it now and on every future occasion.

said that the reason for his intervention in this debate was indicated by some observations which fell from one of the hon. Members for Glasgow. The hon. Member had said that the power had passed from the landed interest to the industrial classes, and he was, it happened, the Member representing the only industrial constituency which had had the opportunity of expressing an opinion upon this tax, and it was for that reason be desired to say a few words upon it. He could not follow the hon. Gentleman the Secretary to the Treasury in his interpretation of the views of Cobden. He had quoted the words used by Cobden when he was attacking what appeared to be an almost impregnable citadel. No doubt, at that time Cobden would have preferred a duty of 2s. to one of 40s., but it did not follow that because he then preferred a duty of 2s. he would have desired to re-impose a duty thirty years after it had been done away with altogether, in dragging the names of Mr. Gladstone and Mr. Cobden into a debate of this kind, Members were leaving the region of facts for the region of hypothesis; but, coming from Cobden's country, he had no doubt of what his opinion would have been now. It was with deep regret that the Liberal party had seen the free breakfast table of the people disappearing in the distance. When they taxed sugar, tea, tobacco, and other necessaries of the working man and his family, each tax was an argument against extending that list, and each tax was an added burden which decreased the surplus above the barest necessities of life. He felt as if he were drawing the discussion from the infinitely great to the infinitely little. They heard a discussion on Monday as to the amount of the surplus, the estimates ranging from £6,000,000 to £40,000,000, but he wished to turn from millions, which demoralised the judgment of those who talked of them, to consider the sacrifice which even an eighth of a penny multiplied by the number of mouths in a poor family might entail. The right hon. Member for Thanet had spoken of this tax of £2,500,000 as paltry and contemptible, but it did not strike him as being paltry when he considered those who had to bear the weight of it—the consumer. This tax, at the best, took as much from the poor man as the rich; but the poor man, eating as he did more bread than the rich man, in fact paid more of the tax than the rich man. The Chancellor of the Exchequer himself realised that there was a point beyond which taxes on the poor must not he increased. The right hon. Gentleman had refused to allow inhabited house duty to be imposed on rentals under £20 a year, and said that the burden of rent was already so great that to impose house duty on people occupying such houses would be cruelty indeed. What, would the 3d. house duty be in such a case? it would be a ½d. or 1d. a week. But the right hon. Gentleman allowed a tax on grain which would affect the poor to a very much greater extent. The cost of this tax would be 3d. or 6d. a week according to the size of the family. There was a large class far below the£10 householder. 30 per cent of the population of York lived in houses rented at less than £10 a year and a similar state of things existed in many of our manufacturing centres. If it was cruelty to tax the £10 or £20 house-holder what was it to tax those below that scale: those who were struggling to keep a household together? It was on that class this tax most heavily pressed in its incidence. This class was not a fixed class. Into it families were continually rising or falling just when their children were young. It. was a class that might be characterised as underfed, and diminishing the food of this class was undermining the stamina of the nation. The Secretary of State for the Colonies had spoken of the arguments against this tax as appeals to the selfishness of the working classes. He (Mr. Toulmin) rather resented that. He had recently attended a conference of Trade Unions, Co-operative Societies, and Working Women's Guilds at Manchester, representing 300,000 workers, or a population probably of a million, and there was no argument used in the course of the debate at that conference that he would be ashamed to bring before this House. That conference had in the strongest manner condemned this tax. Selfishness and the desire to serve class interests was not confined to the working men, and if such feelings animated hon. Members of this House they did not animate those who were endeavouring to serve the working men. Those who knew the poor best knew most of the iniquity of this tax. The Chancellor of the Exchequer had followed the incidence of the tax down to the £10 householder, but he did not follow his tax far enough into the homes of the poor. He advised the horse-keepers to pass the tax on to the consumers. But the class for which he (Mr. Toulmin) spoke could not do that—charwomen and the like who earned 2s. a day could not raise the price of their labour, and often could not get enough work even at the price they charged; the casual labourer who had to take a job at whatever price he could get: and others who lived on the verge of starvation. Did the right hon. Gentleman know where bread was sold by the halfpennyworth? He had been in such a. shop kept by an old lady who had been a. Tory for sixty years, but had been converted by the action of the right hon. Gentleman. She bought ten loaves or 1s. 6d. and cut them up into eight slices and sold two slices for a hlafpenny, making 2d. by sailing forty halfpennyworths. She sold with them a ii pennyworth of tea and sugar mixed, both taxed; and a halfpennyworth of margarine, which was not yet taxed. she now bad to either raise her price or reduce the size of the slices. When he looked at the poor creatures who came for the bread he thought it a very hard alternative. She dreaded the tax and its extension. Whether the tax was oppressive or not in its immediate incidence, the right hon. Gentleman by his action had sent fear into the cottages of the land. There was a footprint outside the cottages now that had not been seen for fifty years. The right hon. Gentleman would have them believe that the wolf was not at the door, but the people of Lancashire knew the footprint. The footprint, they were told, was there for twenty years after the repeal of the Corn Laws, but it was an old footprint which disappeared when Mr. Gladstone became Prime Minister. The footprint, now, was a new one. Me condemned the tax as Protectionist, because it might introduce serious difficulties in commercial relations with our colonies and with foreign nations, and because in its incidence upon the working classes it was unequal and oppressive, and a dangerous reversal of our settled policy.

said he only intervened in the debate to note an in consistency revealed by the statement of the right hon. Member for West Monmouth. The right hon. Gentleman had said and reiterated in an interruption to the Secretary to the Treasury that every increase in taxation of a commodity meant an increase in price to the consumer. That was the right hon. Gentleman's proposition. He thought it was a remarkable proposition, and he was therefore encouraged to look back to the report of the speech of the right hon. Gentleman in introducing his Budget of 1894, when he increased the duty on beer and spirits. He found there the right hon. Gentleman dealt with the subject at length. He commenced with an exordium, such as Chancellors of the Exchequer were apt to indulge in, and declared that the addition of 6d. to the duty on a barrel of beer could hardly be levied on a quart, and hoped that he would not be told that his proposal was robbing a poor man of his beer.

It was robbing a man of his beer to serve him with beer and water instead.

said the right hon. Gentleman did not think it judicious to say that in 1894. When it was said that this tax on bread stood in an exceptional position by itself, a tax wholly unlike any other tax, when they evidently thought that it would impose a burden on the poor quite in a different sense to any other tax, the canons of taxation had been overlooked. Every taxpayer makes the burden of the tax fall on that part of his expenditure to which he attaches least importance. Contrast this tax with the tax on tea or, spirits—supposing bread and spirits were taxed. It made no difference to a man what were taxed. Suppose he wished the tax on spirits to come out of the bread he bought less bread, and the money he saved out of bread he spent in spirits; but if. on the other hand, lie desired to make the spirits pay he bought less spirits and more bread. Hon. Members might laugh, but that was the plain truth. The tax on bread would occupy a peculiar and exceptional position only with those who ate bread only, but he thought it would be found there were no such people. He quite agreed that a tax might be put upon bread which might cast a very heavy burden indeed upon the poor, but nobody suggested that this was a heavy burden. What the tax meant was a general impost that would be paid by everybody. Were hon. Members opposite going to argue that when all governed all were not to pay? If they adopted that principle, they would adopt a principle very dangerous to the democracy not only of this country but of the whole world. He supported the principle that as all governed all must pay; that was the only principle embodied in this Bill and, therefore, he supported the Bill.

contended that if there was good cause to protest against this tax when first proposed, there was much greater justification for opposing it now that a blessed peace had supervened, and the Chancellor of the Exchequer was no longer under the necessity of raising money for war expenditure. The Secretary to the Treasury and others had endeavoured to convict the Opposition of inconsistency in opposing the tax on the ground that the old registration duty was retained by Mr. Gladstone and Mr. Peel for a considerable number of years. But could it be contended that it was the same thing to allow the continuance for a limited time of the last remnant of an oppressive tax, while a multitude of other articles, with claims second only to that of corn for relief from taxation, were being freed as to re-impose the duty after a generation of absolute freedom from import duties? The two cases were totally different. At that time two-thirds of the corn consumed was grown at home, whereas now nearly three-fourths of it was imported, so that a tax, however small, would have a much greater effect on the food of the people now than then. They were accustomed in times of distress, when commerce was depressed, and employment scarce, to have the spectre of Protection—whether in the guise of fair trade, reciprocity, or bimetallism—brought forward, but it was an extraordinary circumstance that after a period of boundless prosperity they should be discussing the whole question of Free Trade and Protection. Up to the period of the Repeal of the Corn Laws our foreign trade stood stationary at £120,000,000; it was now £750,000,000, even after deducting the £50,000,000 or £60,000,000 which came to this country for re-exportation; and the income tax, which thirty or forty years ago yielded only £1,000,000 for every penny imposed, now brought in £2,500,000. If these, added to the fact that we owned one-half of the mercantile shipping, and three-fourths of the carrying trade of the whole world, were not indications of abounding prosperity, he did not know where to look for such tokens. Whatever proposals I might have been made for the imposition of duties on manufactured articles, he had believed it to be accepted as a firm and abiding principle that the free import of food and of raw materials was the very life-blood of our prosperity. It was true that this was only a small tax, but it made all the difference between a thing being absolutely and spotlessly clean, and being not quite clean—the difference between having free imports and not having free imports. It was a reactionary and dangerous step; it was a tax graduated in exactly the wrong direction. The burden would be practically unfelt by the rich and the middle classes; it would be felt to some extent by the working classes with good wages; but it would be severely felt by the very poor. Let Ministers say what they liked, it was a Protective tax. On the 8,000,000 quarters of wheat grown in this country it was a gift at the rate of 2s. per acre to the owner or occupier, and it was a still greater Measure of protection to the home miller as against the importer of flour. A good deal had been said about the prosperity of America and Germany, but would the British working man like to change places with the working man of Germany? He would find that wages there were lower, the hours of labour longer, and that, owing to the delightful system of Protection, a great deal more had to be paid for articles than was the case here. The United States had absolute Free Trade between her twenty-two States; she had an area twenty times the extent of that of the United Kingdom; she had every element of wealth to her hand; she had coal and iron and a climate which could produce almost everything, and was consequently less dependent upon foreign commodities than any other country. She could not help being prosperous in spite of her Protection. Yet, notwithstanding their Protection, we sent to Germany and America about £30,000,000 of manufactured goods every year. In other words, those two countries, although Protective against us, were two of our best customers, and took about one-fourth of our total exports. We ought to rejoice in the prosperity of other countries, because the more prosperous they were the more they bought from us. The Chancellor of the Exchequer had challenged the opponents of this tax to suggest anything else to which he could have had recourse. Tobacco could well bear a further impost, but, in any case, a tax should be put upon anything in the world rather than the food of the people. It would have been better to have put another penny on the income tax, or to have reduced the exemption limit to £100. To say that because tea, sugar, and tobacco were already taxed it was justifiable to go on and tax the first necessity of life was an extraordinary and untenable argument. It was quite; right that the people who shouted for the war should help pay for it; but the people who would be most affected by this tax were not the supporters of the war. The consumers of beer and tobacco were the people who shouted for the war and they should have been further taxed before a burden was placed on the bread of the poor. It had been suggested that the opposition to this tax was not genuine, but was being manufactured for electioneering purposes. If he did not place the country's interest far above that of Party he would rejoice at its retention, but he most earnestly and deeply deplored the decision of the Government in regard to it, for he had hoped that when peace was declared the Chancellor of the Exchequer would have withdrawn this tax.

said that if he thought the effect of the proposal of the Government was anything like that which had been described by the hon. Member he would not support it. Recently he had been able to ascertain the views of a large body of working men upon the Budget, for at Liverpool only a little more than a week ago they had a great meeting of the Conservative Working Men's Federation. Nearly 600 of these delegates from all parts of Lancashire and Cheshire met at Liverpool and declared their opinion in the plainest possible manner in favour of the Budget. Did hon. Members believe for a moment that if those working-men thought the grain duties were going to fall upon the poor they would have passed a resolution in favour of the Budget? One of the speakers had with him a report of the Colonial Secretary's speech at Birmingham, and he quoted from it those paragraphs which hon. Members opposite were most disposed to call into question, and the meeting wound up with a resolution expressing a hope that when the Colonial Premiers came to London the Government would take the opportunity of endeavouring to negotiate with them for preferential, trade with the Colonies. Therefore, at this great meeting, which he had alluded to, they were not only in favour of the Budget, but also of preferential trading tariff's between this country and the Colonies.

It was a ticket meeting.

said those working-men understood something about arithmetic, and they were able to calculate for themselves that 5d. per cwt. on flour was not equivalent to a halfpenny or a penny per loaf which some bakers were trying to get out of them. If those working-men had believed this they would not have supported the Budget. If the speech of the hon. Member for East Mayo represented the true state of things in Ireland, then he maintained that it was the duty of Parliament to take some steps to relieve that distress. He wished, however, to point out that the Finance Bill would have no appreciable effect upon the poor people the hon. Member for East Mayo had spoken about. He would also point out to the hon. Member that Indian corn was not imported direct to Ireland for it came to Liverpool first. He thought that if Irish Members would demand a reasonable measure of protection for Irish industries they would be doing a good deal for the country. Free Trade had ruined Ireland and therefore the responsibility of the state of Ireland rested at the door of the right hon. Gentleman and hon. Gentlemen opposite. Free Trade had caused the working population of the rural districts to flock into the towns where they had to live in slums, and it had ruined agriculture. He entirely disagreed with what had been said in regard to the money not being required. Hon. Members, no matter on whose side of the House they sat, could believe otherwise than that the basis of taxation ought to be widened, and the money required could not be got in any other way. He should like to see import duties levied upon other articles and upon manufactured goods. They wanted increased revenue for education, and the charges for education in his opinion ought not to go on the rates, but upon the Imperial revenue, and the money would have to come from the Customs. Upon this subject he had not been to sleep for the last fifty years like some hon. Members opposite. They resembled Rip Van Winkle for they thought things were the same now as when they went to sleep in the days before there were steamers, when circumstances were altogether different than they were now. Free Trade was now dead all over the world. All the civilised world was against it, and the only supporters of Free Trade outside these shores were the Turks, for every great nation in the world had adopted protection. The opinions of hon. Members on either side of the House in regard to the question where the tax would ultimately fall, were not of the smallest weight unless they were able to give some reason for the opinions they held. He could give a reason for the opinion which he held, that the tax would not in any large measure fall upon the consumer. Every business man in the House would agree with him that there were two parties to a transaction, and that the one most anxious to do business had to give way to the other in the matter of price. The producers of wheat, maize, and the other articles which would be affected by this tax were much more anxious to sell than we were to buy. The countries which produced wheat were numerous—the United States, Canada, India, New Zealand, Australia, and the Argentine—and not one of these countries could sell their produce in any large quantity except to Great Britain. [An HON. MEMBER: "Oh! "] Somebody-said "Oh!" but what he had stated was a fact, and, therefore, Great Britain was a valuable market to them, and not one of them was of the smallest value to Great Britain. If we were to cut off the whole of our trade with the United States, in the course of a few months all the food supplies we wanted would come from our own Colonies and from the Argentine. If we were to close our ports against United States produce, could any gentleman name a country where they could sell it? There was no country in the world except Great Britain to which they could export their produce without paying a very much larger duty than that which it was now proposed to impose. The foreign producers would have to pay the duty, and they would have to reduce their prices if they wanted to sell to us.

said the hon. Member for the Kirkdale Division began his speech with the remarkable statement that political considerations did not enter into the result of the Bury election. He would ask the hon. Gentleman whether political considerations entered into the deliberations of the Conservative working men. The hon. Gentleman also told the Committee that foreign countries were so anxious to sell to us that they would do so at any price. According to that argument, he wondered why they did not give us corn in a present. He admitted that it was possible to exaggerate what might happen under this tax. It was a small one, and would not produce immediate starvation or immediate ruin throughout the country. His point was a different one. He would vote against the tax because it was a departure on a new and ruinous road. The Chancellor of the Exchequer complained of being called a "signpost." Well, a "sign-post" was a most useful article. It was placed where two roads diverged, and told which was the right and which the wrong-road. If the Chancellor of the Exchequer would fulfil that function he would be; doing a good turn to the country. We stood at present at the divergence of the two roads—the road of Protection and that of Free Trade. They might be separated at first by nothing but a hedge, and for a mile or two there might only be a field between them, but one of those roads would lead to ruin and the other to financial prosperity. Let every Gentleman remember that in voting for this tax he was voting for a tax upon bread and for the beginning of preferential duties which would inevitably lead to the taxation of the whole of our raw materials. This could be proved from what the Chancellor of the Exchequer said. The right hon. Gentleman in introducing the tax said that he never contemplated its being used for a preferential duty. No doubt the intentions of the right hon. Gentleman were honest. When a man threw down a match carelessly and his house took fire no doubt he did not intend it, but it was small consolation to him to be told next day when he was houseless that his intentions were entirely free from mischief. The right hon. Gentleman said he was against the putting on of now taxes for the purpose of giving the colonies a preferential claim, but he said he saw no mischief in endeavouring to coax them into Free Trade by working on the existing taxes. He was with the Chancellor of the Exchequer so far, but it should be remembered that the tax now proposed was not in existence. It was not a legal tax until the Budget was passed, and when it was passed the right hon. Gentleman would no longer be able to resist it on sound financial principles. Everybody knew that the right hon. Gentleman the Chancellor of the Exchequer was a Tree Trader, and all more or less knew that he was the champion of Tree Trade in the Cabinet. He was the Archangel of light, who with his flaming sword combatted the powers of darkness. But, alter all, the powers of darkness were the powers, and he should have liked to hear the opinion of some of the powers of darkness upon the possible preferential scheme of the colonies. It was only reasonable to suppose that the right hon. Gentleman the Colonial Secretary, who would preside over the conference of the Colonial Premiers would have taken part in this debate. It was true that the House had had the speech of the Secretary to the Treasury, whose speeches were always welcome. The hon. Member had a brilliant future before him, and he had an advantage which his father had not—he had not a brilliant past behind him. The Colonial Secretary, whatever his views might be now upon this preferential scheme, held at one time very sound views. In 1882, when a proposition was made by the then hon. Member for Preston in favour of taxing grain 10 per cent., the Colonial Secretary laid it down as an axiom that you could not tax corn without raising the price of food. He wondered whether that axiom held good now. The right hon. Gentleman then went on to argue that we could not establish such a preferential arrangement, because, after all, the colonies only gave us a, small portion of food, and if corn were taxed it would raise the price of food generally; that the colonies only took a small portion of our trade, and that we could not pay the colonies for their food supply in bullion. Those were the arguments the right hon. Gentleman brought against the scheme in 1882; would he again bring those arguments to bear against it at the Conference of the Colonial Premiers, which was so soon to take place? Supposing the scheme which the Chancellor of the Exchequer had sketched were put into force on the existing duties, and suppose Queensland were given a preference in sugar, and Canada a preference in corn; New Zealand had a most active Premier—did hon. Members suppose that he would be silent at the Conference, and see preferences given to Canada and Queensland without asking for something himself? Would he not insist on a duty being put on meat and wool? On all these grounds, he asked the Committee to vote against this duty. It was the first step on the downward path, which they would have to continue to tread if once they took this step. And if they did take that path, it would inevitably bring the country to famine and ruin.

said it was a matter of astonishment to him that anybody could say there was no greater distress and poverty now than there was during the times of Protection. However bad and terrible poverty was now, it certainly was not so bad as it was in those days. He desired to confine his observations to the taxation of the one article, wheat. He agreed, at the same time, that to tax the other articles was as wrong as could be, because the farmer would not get any good out of it. He was perfectly sure the farmer would have to pay more for feeding stuffs than for the little wheat he would sell. He was going to assume, in the observations he was about to make, that the consumer would finally have to pay. He ventured to think that nine-tenths of the hon. Members of this House were thoroughly convinced that, in the end, the consumer must pay. The rich man, as well as the poor, would have to pay if his family ate bread, but they would not feel it so much. Go to the lower middle class, the house of the clerk, of the man who had a. wife and family, and had to dress them and himself fairly well. There it was bread for breakfast, bread for dinner, bread for tea, and bread for supper; they might have a little butter, but not much. Co to the houses of the artisans, and go below them to the agricultural labourers, like those in his own constituency, who were not paid more than 9s. a week. There were millions living in that state. Let the right hon. Gentleman go to the large towns, where, as in certain districts of London, 30 per cent. of the population lived on the verge of starvation, whose food, in many cases, consisted of bread alone. If meal were taxed, the right people possibly might be hit, in fact the right people would be hit if anything were taxed except corn. Corn was the staple food of everybody, but it was more necessarily so of the man who lived on the verge of starvation. If the matter was considered in that light, this was the most evil taxation that could be imagined. There were £90,000,000 worth of food brought into this country—apart from grain and meat, which were luxuries to the very poor,—such articles as butter, cheese, etc. Why not tax those? Why go to the one article in the whole world which the poor could not get enough of, which hit the poorest person harder than any one else in the country? It seemed to him, when Mr. Gladstone's and Mr. Cobden's names were brought into this debate, that it made no difference what they might have thought on the matter, the Committee had in this case to think for itself. If what he said was true, this tax hit the poor harder than anybody else. It had been described as an extra one-eighth of a penny on a four pound loaf, but it would be found to be a much larger tax, and even if it were not, what would that mean to people with only 9s. or 10s. a week to live on? He still hoped that the Chancellor of the Exchequer would withdraw this tax.

I hope I may judge, both from the observations with which the right hon. Gentleman the Leader of the Opposition commenced this debate and from the general tone of the debate, that the time is now approaching when the Committee may be able to come to a decision. I must remind the Committee that this subject has been discussed now on three set occasions—in the first place, upon the report of the resolution: in the second place, on the Amendment of the right hon. Gentleman the Member for West Monmouth; and again, yesterday and this afternoon, on the clause itself. And having attended very carefully throughout the whole of this debate, and to all the observations that have been made, I confess I do not think we are very far advanced in novelty of argument today as compared with previous occasions. The old objections to the proposals have been made. They have been answered from this side of the House in, at any rate, one admirable speech, made by the hon. Member for the Blackfriars Division, and I have vainly endeavoured to find anything from which I can hope to afford any fresh information or argument to the House. The right hon. Gentleman the Leader of the Opposition, who initiated this debate, insists—in spite of what I thought it my duty to say yesterday—upon regarding this tax as the prelude to preferential duties with the colonies, and that note has been dwelt upon by subsequent speakers. But I fail to find any argument for that view, except the terror which appears to possess the minds of hon. Gentlemen opposite of my hon. friend the Colonial Secretary. To them he is the author of all evil. Indeed, he has been so characterised, in set language, by an hon. Gentleman who has very recently addressed the Committee; and it seems that with regard to this as with regard to everything else, they attribute everything that is bad in their opinion to the evil genius of my right hon. friend. On this subject I have nothing to add to what I said yesterday.

Why does not the Colonial Secretary do it?

Because it is my business and not the business of the Colonial Secretary to address the House on financial matters. I think when the right hon. Gentleman the Member for West Monmouthshire was conducting the Finance Bill of 1894, if he had been interfered with even, by one of his colleagues, who might have entirely sympathised with him in what he was doing, he would have been very much surprised, and would have preferred to be left to the conduct of his own affairs. What I have said I said on behalf of my right hon. friend as a Member of the Cabinet, as well as on behalf of myself; and I have nothing to add to that. The next point is the view which the Leader of the Opposition takes with regard to this proposal as the first step towards Protection. I do not know upon what he bases that. I think he bases it entirely, judging from his remarks today, upon the cheers of my hon. and gallant friend the Member for Sheffield I have every respect for the hon. and gallant Member for Sheffield, but I do not agree with him in this matter; and he was decidedly premature in his cheers, because it has been conclusively proved that this proposal can have no practical protective effect whatever. I challenge the right hon. Gentleman to produce any proof that when this duty existed for twenty years it had any such protective effect. Is it conceivable that, if it had, or could have had, at that time any such; effect, Sir Robert Peel would have initiated it and carried it into law, and that it would have been maintained during those twenty years? I challenge the right hon. Gentleman to produce any practical agriculturist of today who will say that this proposal will increase the production of corn in this country. It is objected to by no less a person than Lord Rosebery on the ground that it will have no effect of that kind. I challenge the right hon. Gentleman further to produce any representative of the great trade of corn importing who will tell him that he believes it will in the smallest degree diminish the imports of corn into this country, I have observed the imports of corn since this duty was imposed and I find that in five weeks ended May 31st, no less than 9,109,000 cwt. of wheat were imported into this country, winch paid duty, as against 5,471,000 cwt. of wheat in the same five weeks a year ago. And yet we are told, upon the high authority of Lord Welby, in one of those veracious pamphlets which are being spread broadcast by the Cobden Club, that this proposal hampers and interferes with trade. But I turn from that point to that which L believe really more affects the minds of hon. Members in this House, and that is the effect which the duty may have upon the poor of this country. We have not heard recently quite so much of the poor as in the earlier debates on this subject, and I cannot help thinking that hon. Members have found that their anticipations have by no means been realised. I heard just the same thing last year with regard to the sugar duty. The hon. Member for the Radcliffe Division in the discussion on the sugar duty told me that before the year was over I should regret putting taxation upon an article which would affect the very poorest in the I and. I have never for a moment regretted putting on the sugar duty, and I believe, if I happen to be here a year hence, I shall not regret the imposition of this duty on corn. What is the real position with regard to this matter? I have never believed, as I have frequently stated to the House, that this duty on corn will in all cases increase the price of imported corn. But, of course, that is a question upon which there is a difference of opinion. I think when the supply of foreign corn is greater than the demand, the producer will practically bear the whole cost of this duty. If hon. Members think that in all cases the consumer must bear it, I should like to ask them to account for this remarkable fact—that before the imposition of the duty the price of wheat in France was only 2s. 2d. per cwt. higher than the price of wheat in England, although the import duty on wheat in France was 2s. 10¼d. per cwt. and there was no such duty in England at all. I do not think you can be at all certain whether the incidence of a duty of this kind will be on the consumer or the producer. But the right hon. Gentleman the Leader of the Opposition, in a speech in the country and not in this House, has enormously exaggerated this matter. He attributed the rise in some cases of a halfpenny upon the quartern loaf wholly to this duty. That is perfectly absurd. Everybody who has followed the price of wheat during the last few months know that it has been steadily rising—rising to a degree far beyond the duty—and that from causes which have nothing whatever to do with the duty, it hon. Members think that this occasional increase of a halfpenny in the loaf is really due to the duty, I should like to ask them whether they believe that if they were successful in their opposition to it there would be an immediate reduction of that halfpenny which has been put upon the price of bread? If the duty were now-rejected, there would be loss and there would be gain. There would be loss to the revenue. There would be, in my belief, a loss to sound finance. There would be a loss, no doubt, to hon. Members opposite of what they think, I daresay, will be a telling electioneering cry. There would be a gain to the bakers and millers who have raised the price of bread or flour, because they would get the duty returned to them, and they would also get the advantage of their rise in price. But the poor man, on whose behalf hon. Members are so anxious, would gain nothing at all. There is one factor in this question which I do not think has been sufficiently taken into account in these debates, and that is that you cannot judge the amount of the burden that you are imposing by this tax without also considering what the price of bread is at this particular time. I received a deputation a little time ago from a conference of Trade Unionists. I asked one of those gentleman, who said the price of bread in his district had been raised a half-penny, what the price of the loaf was after that rise. He said 5d. Is the price of 5d. the quartern loaf such a terrible burden on the poor man? Is there any exceptional distress from such a price? If there was, we should hear a great deal more about it than we do now. Let us look back to the days when this duty existed before. I have been favoured with a record of the contract prices of bread supplied to one of the regiments of the Guards in London for many years. I find that in the three years of the Crimean War the average price of the quartern loaf supplied to that regiment was as high as 8½d. and 8¾d. I hope we may never see anything like that again in this country. But during that time this duty was enforced, and neither Mr. Cobden nor Mr. Bright, nor any representative of the people, ever declared that it was responsible for the price of bread. And later than that, in the year 1866, when the average price of bread was 6½d. the quartern loaf in the contract to which I have referred, Mr. Gladstone preferred to reduce the duty on bottled wines in place of reducing this duty on imported corn. Sir, it is really a gross exaggeration to speak, as many hon. Members on that side of the House have spoken here and in the country, of the terrible burden which this duty is about to impose, or has imposed, on the poorest section of the people. Why, at the present moment, and for several days past, the price of corn and flour has been falling. I heard from Glasgow the other day that the price of the best American hour for shipment in July and August was 24s., as against 24s. 6d before the introduction of the Budget. A very little extra fall will remove all occasion to the bakers for keeping up their present price, and then, I should like to know, where will be any real objection to this tax? I know it is argued that this is but the first step. We put on 3d. a cwt. now, and we shall be asked to put on 3s. a cwt. next year, and so on, just as if there were no difference whatever between a nominal duty of this kind—a duty which was considered purely as a registration duty when it was put on by Sir Robert Peel, and an import duty of 5s. or 10s., which hon. Members opposite seem to anticipate on corn and flour. When such a duty is proposed, it will be time enough for them to fight it, and if they fight it I think they will have me on their side. I have proposed this duty as a part of our general system of taxation. It must be regarded as a part of the whole, and not by itself, with reference to the burden which it imposes on the poor. I have proposed it because I do not agree with the view which appears to be widely entertained on the opposite side of the House on this matter. I hold most strongly that every person in this country who can maintain himself is bound to contribute something towards the expenditure of the State. Hon. Members opposite, I believe, if they could have their way, judging from their opposition in the past to the sugar duty and the tea duty, would confine taxation to persons who can pay direct taxation and to those who consume alcohol and tobacco. I think that would be a fatal policy. I decline to be a party to it. I ask the Committee to affirm quite the opposite principle, and I leave the result in their hands.

said that the reason why most of them on that side of the House wished to hear the Colonial Secretary was that this special clause was put into the Bill at the special request, and under the instruction of, the right hon. Gentleman for special reasons.

No.

said that it was the general belief that this tax had been put in the Budget in order to enable the Colonial Secretary to go to the Conference of Colonial Representatives, and make a deal with them for the unity of the Empire, of which they had heard so much. He was glad that that was not the case. But, this tax being put on, it might be manipulated by some other Chancellor of the Exchequer in order to deal with our colonial possessions, and he thought it was right to take into consideration what prospects there were for a national supply of food from our colonies. At the present moment, if we depended on the colonies for our bread-stuffs, we should be in a sorry position. According to all indications in Canada and Australia, the prospects of such a. supply of agricultural produce being obtained from those colonies were growing less rather than more. The universal complaint, as he read, both in Canada, and in Australia, was the difficulty of inducing the people to remain on the land for farming purposes. He had read the other day a statement, showing that the people in Canada were more and more each year retiring from land cultivation and flocking into the great towns; and precisely the same state of things was prevailing in the Australian colonies. Therefore, we had a. terrible prospect indeed before us it we were going to confine ourselves in any way in the future to a supply of the bread of the people from the colonies. The colonies were talked of as if they were great nations. He wished they were, and that their population would increase as fast as that of the United States. That was not the case though, for there was practically no increase of population born within those possessions. The population of New Zealand. Australia, and Canada amounted, in the aggregate, to not more than 12,000,000. Now it was proposed to give a preference to 12,000,000 of people, and by that process offend the 80,000,000 of people, in the United States, the 100,000,000 in Russia, and the people of Germany and France, who were customers of our manufacturers. He could not conceive a policy more fraught with disaster than that. On the; Budget night he had made the statement that the only effect of this tax would be to increase the price of food. It had increased the price of food in his district in precisely the way he had predicted, and the high price was still maintained, notwithstanding the increase of imports, and the reduction in the price of corn and Hour. It was no use telling agricultural labourers that it was unjust for the baker to charge the increased price for the 4lb. loaf; the baker did charge it, and the consequence was that the labourer and his children got less bread. He regretted more than he cared to say the extraordinary speech which the noble Lord the Member for Greenwich had made, in which he jested to the House on a matter of the highest importance to the lives of the working classes. The noble Lord suggested that if the labourer with six, eight or ten children, and 12s. a week wages, did not care to buy the dear loaf, he could direct his expenditure to the purchase of whiskey. That was, he maintained, jesting with the lives of the people. Whiskey was not the life of the people, it was the curse and abomination of the people; while bread was the necessity of their existence. When so distinguished a member of the Tory Party dealt in that language, it was, he maintained, a regrettable incident, and he hoped it would never be repeated in this House.

said his argument was quite as good applied to tea as to Hour. Tea was taxed.

said that tea was not so necessary to life as bread, or as sugar. What the noble Lord specially dealt with was whiskey. His great point was that the labourers could take whiskey if they objected to bread. But whiskey was a strange drink to nearly the whole of the agricultural population of this country, and he thought that the Chancellor of the Exchequer would stand by him in that statement from his own experience in his own country. The hon. Member for the Kirkdale Division had made a most extraordinary speech that afternoon. Those who remembered Liverpool forty years ago and had seen its extraordinary development since then under a system of free trade, must have been amazed and surprised, as he was, at the advocacy of the hon. Gentleman to go back to the dark and terrible days, so far as the poor were concerned, of protection. The hon. Gentleman stated that he had had a great confidence with the conservative working men in Liverpool, who were all highly delighted with the new tax. He should not he surprised if nearly all these Conservative working men attended the Conference with silk hats and frock coats. That was very frequently the case with Conservative working men delegates. He had seen it himself. To his poor mind, incapable of imagining vain things, he had always taken them for well-to-do tradesmen. He could quite, understand that tradesmen dressed in frock coals and silk hats would not feel the burden of this tax. Me had spent two days last week in his constituency, and had addressed one great demonstration in the open air. In the earlier part of his speech he had not referred to the Budget, either directly or indirectly, but he had been forced by the acclamations of the people to come to the bread tax. It was the bread tax the people wanted to hear about. The people demanded the discussion of the bread tax, and that fact disproved the assertion of the hon. Member for the Kirkdale Division of Liverpool that the people of the country entertained no feeling against this proposal. The Chancellor of the Exchequer was right when he said that it he dropped this tax, some advantage would be taken from the Opposition speakers in the country. The right hon. Gentleman seemed to imagine that nobody would have to pay this 1s. Where was the money to come from? Was the burden to be dealt with as the untidy housemaid dealt with the dirt-to be swept about until it was lost? Was the Chancellor of the Exchequer to be benefited by the amount, of the yield of this tax, and yet nobody have to pay the money? It was obviously impossible. It was not a question of whether the people; were going to pay it; they were actually paying it already, lie believed that the tax was introduced in order to enable another Minister to do business at conferences that had not yet met, and to, devise some scheme, some great Colonial combination with the mother country, by which the children would have the milk and the mother would have to find the supply. The effect of such a, scheme would be that the Colonies would benefit, while the working man at home would have to pay the cost. He had opposed this tax from the first, and he should vote against it to the last.

said they were now dealing with a matter far more complex and vast than was the case when the Resolution was first presented to the House. The hon. Members opposite were very anxious to lay stress on this as an emergency war tax, though he was bound to say that that was not the way in which the Chancellor of the Exchequer introduced it. The right hon. Gentleman undoubtedly introduced it as a permanent tax, and the arguments by which he supported it were those usually identified with Tory financial policy. He urged that the balance between direct and indirect taxation should be readjusted, and that property should be relieved and the burden on trade and labour increased. That policy was quite agreeable to the instincts of the party the right hon. Gentleman so ably represented, but it was not a policy they cared to defend in the; country. They therefore refused to follow the line of the right hon. Gentleman, preferring to treat the tax as a war tax. But that point of view was now disposed of. the Chancellor of the Exchequer had stated, in perfectly clear terms, that the tax was to be a part of the general financial system of the country: in other words, that this ministry proposed to take the taxation of food into our general financial system. The tax was about to be imposed at a time when the country was at peace, and when there was every prospect, of a great surplus upon the ordinary expenditure. Moreover, the Committee were assured that this was not one of the taxes that would be remitted in consequence of the conclusion of the war They had, therefore, to deal, not with the war at, all, but with a deliberate, change of policy on the part of the Government to effect what the right hon. Gentleman called readjustment, but what they called the transfer of burdens from the propertied class to the labouring and trading class. It might be said that although the war had ceased, it had left a burden which taxation would have to meet. But what was the extent of that burden? The war had left a burden of about £4,300,000 a year in the shape of interest on debt. But before this tax was reached at all, the right hon. Gentleman had increased the taxation on the food of the people to more than twice' the amount of the permanent charge of the war, because he was getting£6,300,000 from sugar, and £2,000,000 from tea. It was perfectly clear, therefore, that the war was being used as an occasion for making a change in our fiscal system, by which the Chancellor of the Exchequer would be enabled to relieve property at the expense of labour and trade. But it was not enough to look at this particular tax as though it stood by itself. It must be taken as an item in a total; it must be taken with the other food taxes. Each of these taxes had been defended on the ground of their smallness. Even if that were true with regard to each item—which it was not—it could not be said to be true with regard to the total. The taxation upon the food of the people amounted to between £10,000,000 and £11,000,000, and, seeing that it was laid on the necessities of life of the industrial classes, it could not be regarded as anything but an oppressive total. He was alarmed for Free Trade more by the arguments of the Chancellor of the Exchequer than by his tax. The right hon. Gentleman had said that the bread tax would not in all cases raise prices. But the question was not whether the tax would in every case raise the price, but whether it would raise prices in a long period of years, and that was a point which the right hon. Gentleman would not touch, although it had been put to him again and again. Let the argument he tested by a very simple question. A tax, like any other clement in the cost of placing an article on the market, had to be treated as an addition to the cost of production. Other elements in the cost of production, such as rent, wages, cost of transport, and so on, were on exactly the same footing as a tax, but would the right hon. Gentleman say that those elements were utterly unimportant because there were occasions when each of those elements was less important than the question of supply and demand? The Chancellor of the Exchequer had also said that in cases where the supply was greater than the demand, the effect of the tax would fall entirely on the producers. What did he mean by saying that bread was a commodity of which the supply was ever greater than the demand? The supply of bread would never be greater than the demand until there were no

rose to continue the debate.

rose in his place, and claimed to move, "That the Question be now put."