I have no intention whatever of altering the schedule.

Then I ask leave to withdraw my Motion.

said be could not agree to this proposal. The English miller who imported foreign corn to grind into flour was able to sell at a profit.

Gentlemen opposite will believe that I have no particular Party object in bringing forward the Motion I now rise to make, because last year, as the Chancellor of the Exchequer will remember, I supported him in the coal tax and in the sugar duty through all their stages. I adhere now to the preposition of which the right hon. Gentleman approved last year, and of which he has been good enough to remind the House this year—and I can consider no empire or kingdom in a more dangerous position than one in which a certain army of electors has the power of dictating the policy without at the same time paying their full share of the sacrifice—in all respects, fiscal as well as otherwise—which may be involved in carrying out that policy. I may say further that I am not a hardened and convicted political economist. An economist of my acquaintance, Mr. Bagehot, used to say that he did not believe that any one was really sorry when a political economist died. I will not go as far as that, or as far as the hon. Member for King's Lynn, who said the other night that political economy was a parcel of platitudes and paradoxes.

No; the phrase, I think, was "A conglomeration of pretentious platitudes."

When I think of the eminent men who founded political economy, I do not agree with the hon. Member in calling it "a conglomeration of pretentious platitudes." But I should have myself been sorry to lay down any proposition which would apply to all communities at all times and stages in their history and to all the variations in the course of their development. In everything with which I shall trouble the House I am thinking of my own country as it now stands—its social, political, and fiscal needs in respect of the present situation. Now, Sir, what do we see? I have attended the whole of the discussion on the Budget in all its stages. We see a remarkable spectacle. First of all a war tax expanded into a permanent source of revenue. We see what was first brought forward as an emergency duty blossoming into the first stage of widening the basis of taxation; and finally, we see what was a fiscal expedient for a twelvemonth swelling into a reversal of national fiscal policy for ever. The Secretary to the Treasury, who made a most interesting speech on the Second Reading, said—

"If you are not to tax the very poor you ought to take the duty off sugar and tea."

In that proposition there was an implication of reproach of those who, like myself, supported the Government last year, and this year feel bound to oppose it. The fact that the Government have increased the duty on sugar is the very reason why you should not have now a further stage of pressure and crush them by imposing a duty on bread. Let us see what the Government have done as to food—not by way of an emergency tax, but by way of permanent taxation. They have put £6,500,000 on sugar and £2,000,000 on tea. You must add £2,000,000 more for the incidence of the coal tax, now understood to be a permanent source of revenue. That makes £10,500,000 of taxation weighing on trade and labour. Then you have £2,600,000 for the bread tax making a total of £13,000,000 on trade and labour. The only increase of direct taxation is the income tax, and the House is given to understand that the present height of the income tax is only to be temporary. That is the situation, and I see no inconsistency whatever in supporting the Government last year, and this year resisting the corn tax in every shape. It is true that it is desirable to "instruct" the electors. I am strongly of that view. Instruct the electors as much as you can; but recollect that the electors are only 6,000,000 or 7,000,000 out of a population of 40,000,000 or more in the United Kingdom, and, therefore, in taxing the electors you are taxing only one-fifth or one-sixth of the population, while you are punishing or "instructing" those who had no direct share in the decision instead of leaving the whole burden, if that were desirable, on the 6,000,000 or 7,000,000 of electors. The hon. Member for North Islington said the other day—

"It is necessary to make people understand that they are subscribing to the great purposes for which this Empire exists."

I wonder it did not occur to the hon. Member that surely one of the first purposes for which this or any other Empire exists is to keep its people as far as its Governors can from misery and starvation. The right hon. Gentleman has just informed the House, to its universal satisfaction, that the duty on maize is to be reduced by a half, and he deserves our thanks for that concession. We cannot forget the state of things that was described to the House in the course of the discussion the other afternoon, a description which, I am sure, affected the right hon. Gentleman's mind, impelling him to the action he intends to take. What is the use, in the spirit of the hon. Member for North Islington, going to these wretched people on the west coast of Ireland and telling them that the Chancellor of the Exchequer is "widening the basis of taxation," or in telling them that they must he willing to pay more for their wretched yellow meal in order to serve the purposes of Empire? I cannot help remarking to what a very extraordinary line of observation the Chancellor of the Exchequer committed himself on that occasion. He, like myself, has been twice Chief Secretary for Ireland, and others have been heroic enough to undertake that office on two occasions, but I do not think that he has ever been to the west coast of Ireland. If he has, how can he dream of saying to the wretched people who pick out a hard subsistence front land covered with heavy stones, "You really must improve the land and cultivate oats." That anyone who thinks of parts of Donegal, Galway, and Mayo should talk about cultivating oats there, strikes me as an extraordinary and stupendous illustration of ignorance which men of great competence sometimes show. But apart from the Irish aspect of the matter, do not let us forget what has been called the submerged tenth in our own island, the large body of suffering, patient, uncomplaining poor, many of whom have never enough to eat. When we talk of England being a country of boundless wealth, in a sense it is true, if you look at the prices paid for trifles at Christie's; but it is not to be supposed that because there are enormous pockets of wealth of that kind there is not an immense fringe of our poor population who will be affected by this tax, and who are constantly fighting a life and death battle with hunger and starvation. I cannot but notice how rapidly the Chancellor of the Exchequer withdrew the cheque tax. For my part, I thought when I first heard his proposal—and I still think—that the cheque tax was a very good tax ["Oh, oh!"] but it was withdrawn because the opinion of a very powerful class in the City and elsewhere opposed it.

No, no!

Then I do not know why it was withdrawn.

It was withdrawn because I had reason to believe that it would seriously affect small traders throughout the country, and, further, that there would be a serious diminution in the number of cheques used in consequence, largely affecting the revenue from it.

I thoroughly accept the right hon. Gentleman's explanation. At all events there was the fact that a tax which would have affected well-to-do people of different degrees of prosperity was withdrawn in consequence of a very powerful, if not organised opposition, whereas the arguments as to the corn tax seemed to have no weight at all with the right hon. Gentleman, except his decision to halve the duty on maize. The Government have made what I cannot but think in the course of these debates is a rather ludicrous shifting of their position. The First Lord of the Treasury at an early stage said—

"I do not believe that the working men will object to pay a tax which will probably have no effect upon them at all."

That is the language of the First Lord of the Treasury. As if any one would object to pay a tax which did not affect them at all! But then the ground was changed, and I have not heard, although I have listened attentively to the language of the right hon. Gentlemen sitting on the Treasury Bench, even now what is their theory as to who they are who will pay this tax. They have never told us. The Chancellor of the Exchequer says that the price is affected by the general and natural fluctuations in the circumstances of the production or the importation of the article used; but he leaves out of account the effect of this ramrod, constant tax upon the free play of the variant circumstances which he called the general and natural play of production and importation. That is an argument which the right hon. Member for West Monmouthshire pressed upon him and to which I have not heard an answer. I must quote one dictum of Mr. Mill which entirely supports the position taken up in a very powerful speech by the right hon. Member for East Wolverhampton. It is this—

"A tax on any commodity will, as a general rule, raise the price of that commodity by at least the amount of the tax; there are few cases in which it does not raise it by more than that amount."

You have given no answer, or at least I have not heard any answer given, either to the question who in your judgment really pays the tax, and whether you do or do not believe that there will be any effect from this corn tax on prices. There is one point to which I beg the attention of the House. When the duty of 1s. a quarter was left in 1846–49 the price of wheat ranged from 50s. to 60s., or even higher. Therefore the 1s. was about 2 per cent. of the proportion of wheat imported, or a quarter of the total consumption. But now that we import considerably more than three quarters of our total consumption the price ranges, I think, from 25s. to 28s. a quarter, and, therefore, your new duty of 1s. is nearly twice as high on the value of the article as it was in 1846. I do not know how he proposes to meet it. Another contention which is urged is this. It has been constantly argued by the Government that this is not in any aspect a protective tax; but the night before last, I think, we had a very extraordinary development of that allegation. It was pointed out to the Chancellor of the Exchequer that with a corn tax at 3d. a hundredweight, offal at 1½d., and flour at 5d., the tax on flour was too high in proportion to that on corn. The Chancellor of the Exchequer said he wanted whole grain, and that flour was taxed so much higher than corn because it was a manufactured article. He said, if he was rightly reported, that it was desirable to get whole grain and then this country itself made the flour and retained the offal. I have given the fairest consideration possible to that position of the Chancellor of the Exchequer, and I ask, Can it be contended that that means anything but Protection? Is it not Protection, and nothing else? If that is not Protection, I do not know what is. Now, Sir, I will sum up what I have got to say upon the corn tax. I say it is bad in its principle and deplorable in some of its consequences, to which I will refer in a moment. A registration duty of £200,000 has been transformed into a source of revenue amounting now to £2,600,000, capable of infinite elasticity and expansion, and sure, in a certain number of years, if the policy of some members of the Government prevails, to be expanded still further. The Chancellor of the Exchequer, who is himself a free trader, has made a change in our fiscal system which leaves the door open to those who are not free traders but thorough-going protectionists. That is one point. Then the second point is this. Mr. Lowe said—and everybody is aware that he was not in the least sentimental—"this tax is a kind of poll tax"—and that is as true today as it was when Mr. Lowe said it—"but graduated in a peculiar fashion because it tells heaviest on the very poorest of the people." The tax affects two-thirds of the consumption, but it raises the price of the other third to the same level, and this rise does not go to the Exchequer. The next point is one to which I am rather surprised that in this House, which contains so many important representatives of trade and commerce and banking, more attention has not been paid. My hon. friend the Member for Exeter said, and nothing can be more true or more relevant—

"I believe that the great commercial prosperity of this country is due, not only to freedom from certain taxation, but to freedom from those harassing formalities which are inseparable from an extended Customs tariff."

I was glad to hear my hon. friend the Member for Devonport the other night warn the Chancellor of the Exchequer that when this tax comes to be understood and its possible expansion comes to be realized, the commercial classes of this country will certainly let him hear from them; and that the effect upon their proceedings and the effect upon their commerce, upon which the prosperity of the country depends, will he, and must be, of the gravest kind because of the harassing formalities which Customs arrangements will undoubtedly entail. Now, having dealt with these aspects of the corn tax, I want to come to what I may call the indirect consequences of it; and they are to me more important in many ways than the direct consequences, because, as everybody knows, you can more easily efface the traces of war than you can undo the mischief of a serious blunder in your fiscal policy. I submit that the Chancellor of the Exchequer's proposal opens the sluices to mischief of every kind in an indirect but closely connected form. But what I have, to my regret, to charge the Chancellor of the Exchequer with, is that he used vague and shadowy language upon a subject upon which shadowy and vague language is more dangerous than it can be on any other. He says—

"I have proposed this duty as a Revenue duty and nothing else. I disclaim altogether the interpretation put by Sir Wilfrid Laurier on the corn duty."

Then in some very remarkable observations two or three nights ago he rather turned round, and he said—and I must Bay, with all respect to him, with some confusion of thought and some bewilderment of language—

"An Imperial Zollverein would be a better arrangement for binding together the colonies and the mother country than anything else that could be devised."

Of course, by an Imperial Zollverein he meant, not preferential tariffs, but a true Zollverein, a tariff union similar to that of the United States of America and the old condition of things in Germany. Then the right hon. Gentle man went on to say that it was hot possible—

"As every one who looks into the matter knows, that there should be free trade at the present time—that is, a free trade tariff union—between England and her colonies."

Then, I wonder, if we cannot have a Zollverein, why talk about it?

I was directly challenged by the previous speaker.

Then I go on to say, if you are challenged to talk about a Zollverein, why do you not think the thing out before you do so. The right hon. Gentleman went on to say—

"It is not possible that there should be free trade at the present time between the mother country and the colonies."

But he went on in words which in my judgment display some perilous confusion of thought—

"But cannot we try to consider the commercial relations between us that we may make trade freer than it is now, and that without necessarily injuring any foreign country at all? I am bound to say,"

he went on—

"that my idea of dealing with this great and important question is on the basis of free trade and not on the basis of Protection."

And, finally, the right hon. Gentleman made a most satisfactory declaration. He said—

"That we should impose new duties as against foreign nations in order to give advantage to our colonies, that is not the policy of His Majesty's Govornment."

I call that a most satisfactory declaration,-and if he had left the matter there, I for one, should have had no criticism to offer. But he is unable to leave this fascinating notion of a Zollverein and preferential rates and the like, and he says—

"It is our duty while adhering to our own principles to do what we can to make trade between ourselves and the colonies more free in order to promote the best relations in the Empire."

Now, Sir, I should like to ask for a plain answer to a plain question. Will the right hon. Gentleman tell us this afternoon, or at some other time, how he proposes to make trade between us and the colonies more free? He admits, and this is very significant, that some sacrifice will be involved by a movement in that direction.

That was in a previous part of my statement.

These observations I thought, and still think, were all organically connected. Otherwise there was some incoherency. At all events, the right hon. Gentleman said at some other stage in his speech that some sacrifices would be involved in a movement in that direction. It is true it was not quite clear what was meant by "that direction." I am somewhat at a loss to know accurately what it meant, but I take it to mean in the direction of making our commercial relations with the colonies more free.

If the right hon. Gentleman will read what I said he will see the meaning.

The words were these—

"If we could have free trade with our colonies, I do not see why that should necessarily involve increased duties on our part as against foreign nations; but if we could have free trade with our colonies, even some sacrifices in that direction might he made."

I fail to see how I have misrepresented the right hon. Gentleman.

The right hon. Gentleman has, I am sure quite unintentionally, transferred from one part of my remarks to another a sentence which had reference solely to the establishment of complete free trade between the mother country and the colonies.

I do not wish to labour or prolong the matter, but I submit that the sentence stands on its own four feet distinctly. It does not matter where it comes—

"If we are to have Free Trade with our colonies, even some sacrifices in that direction might he made."

It comes to this, if we are to have Free Trade with our colonies, some sacrifices even might be made; that is to say, at all events, that in the right hon. Gentleman's view Free Trade with the colonies, if it were possible, which he denied in another part of his speech, would involve sacrifices.

And it would be worth it.

Then, perhaps the right hon. Gentleman will tell us how it is to be done and in what direction we must look for compensation—in the sense, I presume, of wider markets for our manufactures. Who is the Minister who talks in this way of sacrifice? Are we in a position according to him to make that sacrifice? Is not this the Minister who for two or three or four years has been telling us that our fiscal system has brought us almost to the brink of financial ruin? I say, without irony, that I am a disciple of the right hon. Gentleman, and that I believe as fully as he does that our fiscal position is of the most dangerous character. But that is the very reason why I want the House to think twice or thrice before embarking on any policy, or countenancing any scheme or project, which will involve further sacrifice. After the right hon. Gentleman's explanation, let us consider the confusion, into which vague, shadowy talk of this kind throws the colonial merchant and the colonial producer, the British merchant and the British producer. I consider that on a subject where clear thinking and firm language is far more indispensable than on any subject engaging the attention of the House, the language of the Chancellor of the Exchequer is most unfortunate. One may see any clay the unfortunate effects of this vague and shadowy language. Even today we may read that proposals are in the air, and even much more than in the air—they are upon the earth—proposals of a kind which I declare I do not know whether the right hon. Gentleman's language encourages or discourages, but at all events they are proposals of a kind which such language as his brings into existence and fosters. I want to look for a moment at the kind of language which the attitude of the right hon. Gentleman produces. I am not going to examine the projects of the Zollverein, a commercial and customs' union and preferential duties. But there are suggestions in connection with them which it seems to me are of the first importance, and which the House should, at the earliest opportunity, test, measure, and gauge. I am in order, I hope, because this is the real basis of my objection to the corn tax.

It is not the basis of the corn tax.

Not the basis? I do not know that. What happened the moment the Chancellor of the Exchequer said we are going to have a corn tax? Why, as my right hon. friend the Leader of the Opposition has pointed out, the Canadian Prime Minister instantly said: "England is now for Protection." Therefore, those proposals, I do not say arise out of, but are connected with, the duty on corn which breaks down the ramparts of the fiscal policy which has made us what we are. This is the kind of language, as we read today, which is used: "Did any one say that we are not losing ground in respect to manufactures and trade?" Now I hear that constantly in conversation. I read it in articles—the assumption that we are losing ground in commerce and trade. Is it true? [Hon. Members on the Opposition Benches: No.] What is true—as, of course, we must all admit—is that the increase in our manufactures and trade is now at a slower rate. But everybody, from Adam Smith downwards, has told us that a larger volume of manufactures and trade means a slower rate of increase. As for saying that our Free Trade policy is suicidal, that we are losing ground and so forth, I will only remind the House of this single fact, that the total tonnage of ships belonging to Great Britain doubled between 1860 and 1900—from 4½ millions to 9¼ millions. What is the use, in face of a fact like that, to remark, as the right hon. Gentleman does in the speech I am quoting, that our policy has been suicidal, and that we are at the end of the growth of our wealth and prosperity? I am the last man to say that I would ascribe to Free Trade all the advance in prosperity we have made. That is due to various causes. But all the other causes would have been nothing if they had been handicapped by Protection. In face of that fact, what is the use of people writing, as I see they do, that Free Trade is a mummy and a fetish? Even in an important morning journal, The Times, as I read to-day, those who do not accept this view that our manufactures and trade are declining and going to the dogs, are described as "people who bring up some mouldy pieces of theory deduced by logic-chopping methods from some circumstances which no longer exist, and from principles which were never at any time of absolute authority." I cannot imagine anything more, futile than language of that kind. We are not logic-chopping. These are not mouldy pieces of theory, but facts which are to be found in your Statistical Abstracts, and Board of Trade Returns. I have heard it read from some journal that the twentieth century is going to paddle its own canoe. If proposals like those we read of this morning, which involve, mind you, preferential duties against foreign countries, and the restoration of the Navigation Laws, are to be adopted—if the twentieth century is going to paddle its canoe in the waters, I am happy to think that most of my life has been spent in the nineteenth century. Are we to be frightened, forsooth, in the City of London—where they know about these things, if they know anywhere on this earth—by pictures of 160,000,000 of glittering golden sovereigns? I find no trace of these 160,000,000 going. What I do find is that 5,000,000 gold and silver export of bullion and specie, no doubt, takes place. But what is the meaning of that? It only means that we are the greatest creditor nation in the world. I am quarrelling with the Chancellor of the Exchequer because he has, by his talk, and by his one or two vague phrases, helped to let loose projects of this kind; and I gather he is looking upon them with, at all events, not an unkindly eye.

I have said the contrary.

The right hon. Gentleman has also said the contrary of that. [Hon. Members on the Ministerial Benches: No.] I am sorry to appear to wrangle with the right hon. Gentleman, but when he has said that Free Trade with the colonies, even if it involved some sacrifice, might be desirable, I submit that he has rather warmed into life these sorts of projects. Say what you like, the basis of all these projects is the substitution in this country of colonial products for foreign products. In itself that is desirable enough. But if that is your, object the effects will be these—and if anyone can overthrow these propositions, I hope he will do so—first, that the substitution must mean a rise in the price of most of your raw material; secondly, that the rise in the price of raw material must mean a rise in the cost of manufacture; thirdly, that a rise in the cost of manufactures must, of course, handicap you, and make you less able to hold your own in the neutral markets of the world; fourthly, that it is absurd, unreasonable, and disastrous, to play ducks and drakes with your great trade with foreign countries for the sake of a relatively small trade with the colonies; and fifthly and lastly, that in order to carry out this policy you would have to set up a machinery, in the colonies and elsewhere, of a kind which used to be well known, and which threw a most deadly impediment in the way of trade and commerce. That machinery was the abomination of those days. Moreover, that machinery would not be under your own control, but would be under the control of the colonies themselves, and these colonies would have a large number of men interested in making that machinery ineffective, because it would be their interest to allow foreign produce to slip round through their own borders, and so find its way into this country on colonial terms—that is to say, without duty. The more that is considered, the more will the House and the people outside perceive that these projects have not been clearly thought out. Then the right hon. Gentleman used the expression that these commercial relations ought to be made freer in order to promote good feelings between the mother country and the colonies. First of all, I would ask how the present relations between the mother country and the colonies—which at this hour are at a pitch of enthusiasm and exaltation that was never reached in our history before—have been brought about. By the very policy of free imports which you are now prepared to trifle with. Are you certain that it is a sure way of promoting better commercial relations between ourselves and the colonies to have a great series of bargains constantly going on, putting the mother country on one side and the colonies on the other as antagonistic parties to a bargain? There are many other points in that issue, but these must needs be handled with the utmost delicacy, kindliness, and, I should add, firmness. I entirely agree with what fell the other day, in a speech out of-doors, from my right hon. friend the Colonial Secretary. He said there are circumstances now visible to us that make all men who consider the economic and commercial as well as the social conditions of their country full of anxiety. Very often those who are watching the flow of the tide of economic circumstances do not realise what the process is. I see a great many things in our present commercial position which must cause us the liveliest anxiety and must set us all thinking day and night how this new course of things, new distributions of capital and other economic circumstances, is likely to end. But from them I draw this moral—not to plunge into such reversals of policy as the Chancellor of the Exchequer is now inviting us to take.

No, I am not.

I beg pardon, I withdraw that. I mean such a reversal of policy as his policy involves, and such a reversal of policy as undoubtedly is in the minds of many gentlemen around him. In the face of the circumstances I have just mentioned, the right course is not to perform such achievements as that, but to keep your head cool and not to make changes in a policy which has made this country so powerful, so strong, so overmastering in its credit as it is at this time.

said in the long debates on the Budget and Finance Bill he had not before troubled the House. That must be his excuse now, as well as the fact that the voice of Old. ham, as hitherto expressed by his hon. friend and colleague, had not been in accordance with his own views, nor, as he believed, with the views of the preponderating majority of the people of Oldham. His hon. friend's position was a somewhat peculiar one. He seemed to approve strongly of the policy of the Government but he disapproved of the expenditure to which that policy gave rise; and, on the other hand, he seemed to welcome with open arms a tax of any sort which the Government proposed. He hoped the efforts of his hon. colleague to cut down the expenditure of this country, might lead to some useful result. Of course he knew that the point was a very difficult one, but there was a point at which expenditure became unproductive. We all desired to ensure the safety of this country, but experts differed so much as to the expenditure that was necessary to secure the safety of this country that it seemed to him that we had to decide for ourselves what expenditure was necessary for our safety, and determine at what point that expenditure became a pressing burden upon the industries of this country. He had said that his hon. colleague did not represent the opinion of the people of Oldham upon this question. Abundant evidence of that had reached him from many quarters of a non-party character, and he believed every great industrial constituency would, at the present time, go strongly against this tax which the Government had proposed if they had the opportunity. He thought the political instinct of their great industrial constituences was sufficiently alert to know the difference between the old shilling duty of 1869, the remnant of a tax which was a grievous burden, and the new duty which was now proposed and put on as a permanent tax, was capable of indefinite expansion, and which might therefore in time become a very grievous burden upon the poorest classes in the land. He thought the political instinct of the great mass of the people of this country was also quite clear as to the people upon whom the burden of this tax would ultimately fall. The right hon. Gentleman who had just spoken so powerfully to the House said that he did not pose as a political economist. They had heard a good deal of rather extraordinary political economy in the House during the course of these debates. They had heard it proved that the whole burden of this tax must be ultimately borne by the consumer. On the other hand they had heard it proved to the satisfaction of hon. Members opposite that none of the burden of this tax would be borne by the consumers. He had begun to doubt whether political economy in these modern days was of much use to them in the comparatively rough-and-tumble debates in this House. Political economy used to be called a dismal science. It was dismal, because it was, in those days, founded upon the doctrine of pure selfishness. But since the earlier days of political economy they had discovered that other motives than pure selfishness affected man in his economic outlook. Modern political economy was rather an affair of a main stream of tendency met by certain obstructions which caused eddies and crosscurrents which might be very difficult to follow. He often thought that is debating economic questions in this House they were apt to lose the main stream of tendency by watching the course of some of the cross-currents. One of the hon. Members for Glasgow made a very interesting, speech last week which met with and deserved the interest and attention of the House. In the course of that speech he mentioned as a disproof of the statement made that the whole burden of this tax would fall upon the consumer that one railway in America had reduced its charges 2½ cents on flour in order that it might be able "to carry as much flour as before." He did not know the railway, or the circumstances under which this reduction was made, but after all the price of coal was lower and there were other circumstances which tended towards a fall of railway rates at the present time; but unless freights and railway rates generally were reduced he did not think that it would have any important effect upon the cost of corn or flour in this country. It did not appear that any less corn or flour would be consumed, and he believed that the whole of this tax, and probably rather more than its total, would be borne by the consumers of this country. If that were so then this tax was a Protectionist tax; it was a wasteful tax because the consumer would have to pay more than went into the Exchequer; it was a tax which was a dole to one set of farmers and a burden to another set; and a tax which would materially affect the very poorest people of this land. The whole of this discussion had been complicated, in the first place, by what was said about a Zollverein, and in the second place by what was not said about the tax being merely temporary. We were bound, therefore, to treat this tax as a permanent tax. If any good could be done in the direction of a Zollverein, and if it would produce a powerful effect by drawing the bonds of friendship between this country and the colonies closer together, there might be something to be said for it. But was there any reasonable chance of this tax, as it was now put on, being used for striking one of those bargains between the colonies and, this country which would be likely to draw closer those bonds of friendship which tied them together? Supposing that we did not impose this shilling tax upon wheat from Canada. That might be some advantage to Canada, but it would not be an advantage to Australia, and unless there were some other concession, Australia would be unfairly treated. He thought that infinitely more importance was to be attached to the strong feeling of sentiment which bound the mother country and the colonies together at the present time, and also to the fact that the colonies must see that they made practically no contribution to the Imperial forces, and that this country practically bore the whole burden of the Navy upon its shoulders. If, as he believed, this new tax would be no help as a means of bargaining with the colonies and inducing them to lower their tariffs upon our goods, then he would ask what other means were there which this country could hold out by which they would be able to make an Imperial Zollverein. The House had listened with great interest to, and must acknowledge the great force of, the arguments used by his right hon. friend the Member for Montrose. Our commercial position was one of enormous importance. We were by far the largest exporting country of manufactured goods in the world. In 1901 this country imported £100,000,000 worth of manufactured goods, but we exported in the same year £230,000,000. A great deal of our foreign trade was so very nicely balanced that a fraction might get and keep business and a fraction might lose business. Our greatest export trade was in textile cotton goods. We were still upreme as an exporting country in manufactured cotton goods. Would any statesman, unfit for Bedlam, dare to suggest a tax upon the raw material of cotton? We imported annually £42,000,000 worth of cotton, and over £41,000,000 worth of that came from foreign countries and less than £1,000,000 from our own possessions. With regard to our trade in manufactured cotton goods, four-fifths of it was export trade, and only about one-fifth of those goods was sold in this country. Who would dream, under those circumstances, of putting an import duty on the raw materials used in this country? That would be a most suicidal and dangerous policy for us to adopt. Was there any inducement for this country to foster colonial trade? Had the colonial trade, during the last twenty or thirty years, grown more quickly than our trade with foreign countries, and would it soon overtop our foreign trade? Our colonial Empire, during that time, had grown enormously, and he did not think colonial tariffs had been raised against the Mother Country, but they had been raised in other countries. During the last thirty years the proportion of trade with the colonies and with foreign countries had practically remained stationary. If they took the figures for periods of five years, they would find that we had imported from the colonies some 21 to 23 per cent. of our total imports, while we had exported to the colonies some 33 to 35 per cent. These figures, during the whole of this time, had remained stationary. There was not, therefore, any large increase of trade with our colonies. We were doing no larger trade with our colonies now than was done by us thirty years ago. Our trade, under the policy of Free Trade, had prospered; and, in his opinion, it would be folly to interfere with a system under which we had benefited so largely, and which he, for one, would be sorry to see done away with.

said the debate upon this question had been of a most interesting character, though the speech of the hon. Gentleman who had just sat down, he thought, had had very little to do with the subject before the House. When he considered the figures given by the right hon. Member for Montrose, he felt that the speech of the right hon. Gentleman to a great degree was no better. The right hon. Gentleman had not met the Chancellor of the Exchequer in any way. He had spoken of those who adopted the old-fashioned idea of Protection, and in almost all he had said the right hon. Gentleman had carried him (Mr. Elliot) with him. For his part he would have supposed that the Chancellor of the Exchequer himself might have said "Hear hear" to three-fourths of the speech of the right hon. Gentleman. He was not ashamed to say that he himself was a Free Trader; but let the House be practical—he was not only a Free Trader, but a Free Trader in want of money, and it was absurd to keep out of sight all the necessities of the occasion for which this Bill was brought in. If they were proposing to take up a loan, it would be easy enough to advance sound arguments against the proposal, but the House had to look at the proposed tax as a whole. They had heard far too little of the other side of the account. Last year we had an expenditure of £212,000,000. That expenditure, being a war expenditure, was no doubt abnormal. But it had been shown that the normal expenditure of the country was greatly growing; and the question was—Were they going to raise the revenue required by the old system of taxation? It was obvious that they could not go on, as they did in the old days, putting a little more on beer and spirits and another penny on the income tax. That had been done in the past, but the Chancellor of the Exchequer had shown that beer and spirits had been taxed up to the very highest limit, and that if we put everything on to the income tax we should have nowhere to look for that reserve fund which we were always told we should have to look for in case of war or difficulty. We dealt with the colonies for the same reason that we dealt with the whole world—because they supplied us with what we wanted; but to suppose it was good business or good patriotism to say we should put difficulties in the way of trade with other countries because the men of those countries could not speak the English tongue, was absurd. In these days of Imperialism there was a good deal of sentiment that was hardly entitled to that name, and when he heard these suggestions—that our trade and commerce were not to be regulated by business principles, but with an idea of favouring everything that came from our colonies, he could only say that that was not true imperialism. That was not, however, the question which they had to deal with on this occasion. The question with which they had to deal now was how this gigantic sum was to be raised. To put a duty on corn and other matters was not necessarily Protection. He challenged the House to say whether, from the time of Sir Robert Peel down to the present day, it had ever been suggested that to put an import duty on any article for the purposes of revenue only was Protection. Mr. Gladstone and Mr. Lowe abolished the registration duty on corn, as everybody knew; but hon. Gentlemen opposite shut their eyes to the fact that when Mr. Gladstone abolished the registration duty he had a surplus of £900,000 which he did not want, and so he gave up the registration duty on corn. But the present duty on corn would bring in £2,500,000, which the Chancellor of the Exchequer did want. There had been no suggestions from right hon. Gentlemen opposite as to an alternative way of raising this money. They, apparently, were perfectly contented with a surplus of borrowed money. That was the case which had to be met. His right hon. friend had been accused of imposing a Protective duty, but against that they had the distinct statement of the Chancellor of the Exchequer, made not only on his own behalf but on behalf of the Government, that he did not intend to embark in the policy of Protection, but would always carry out the policy of Free Trade. He had never known the Protectionists in that House lie so low as they had been doing for the past few months, and he thought he could say that when he spoke of Protection the right hon. Member opposite conjured a phantom of a thing that could not exist.

expressed the belief that the Chancellor of the Exchequer's vague words were responsible for the prolongation of these debates. It was the duty of Members—a duty which they owed to the House, the country, and the Empire—to insist either upon having a clear statement from the Chancellor of the Exchequer on the matters with regard to which the right hon. Gentleman the Member for Montrose had asked some questions but received no reply, or upon the Government—and this would be the preferable course—giving the House an opportunity of debating the subjects to be brought before the conferences shortly to be held. The House were in a great difficulty in attempting to discuss those proposals upon the clause under consideration. That clause had been named by Sir Wilfrid Laurier as having an essential bearing upon those proposals; the Chancellor of the Exchequer, in reply to speeches, had discussed that bearing at considerable length; and yet it would be clearly out of order to follow into all their ramifications, or even their more obvious difficulties, the considerations to which those speeches naturally gave rise. Therefore, hampered as the House was, and impossible as it was to deny the momentous character of the decisions shortly to be arrived at, he appealed in the strongest terms to the Government to give the House an opportunity, as the colonial Legislatures had already had, of considering these questions. It was little short of monstrous that the country should be committed, as he believed it would be in the course of the next few weeks, to an entire change of fiscal policy, which would extend throughout the Empire—affecting in a marked degree our Indian Empire, the interests of which could not be discussed in the present debate—without Parliament being given an opportunity, such as the colonial Legislatures had had, of discussing the question. The speech of the Chancellor of the Exchequer was on the same lines as the speech of Mr. Seddon reported in that day's papers, and he read them as meaning the same thing.

I entirely disagree.

said the words of the right hon. Gentleman were—

"In a few weeks we hope there will be a conference of the representatives of the colonies upon this question of colonial preference."

I think I said "commercial relations."

said the words as they appeared in The Times were—

"In a few weeks we hope there will be a conference of the representatives of the colonies upon this question of colonial preference, as well as upon other questions affecting the interests of the Empire. … It is our policy to do what we can to make trade between ourselves and our colonies freer. … Cannot we try so to treat the commercial relations between ns that we may make trade freer than it is now, and that without necessarily injuring any foreign country at all? … I do not see why that should necessarily involve increased duties on our part against foreign nations."

Those words pointed exactly to the policy to which Mr. Seddon's speech pointed. The proposals to which Mr. Seddon alluded had apparently been put before the other colonies; the House did not know whether in full they had been accepted by them, but they were proposals which came within the terms of the Chancellor of the Exchequer's speech. They were proposals, not for increasing this duty against foreign countries, but for reducing it or taking it off in the case of the colonies. That was consistent with the words of the Chancellor of the Exchequer; but he was bound to say that, knowing, as he did, that these proposals of the Australian colonies and New Zealand must have been before the light hon. Gentleman—he must have known of them—

No.

was glad the right hon. Gentleman was not acquainted with the proposals, but the extraordinary coincidence between his words and the proposals made by Mr. Seddon had certainly made him (the speaker) think he was so acquainted. The point he desired to put to the Government was this: The bearing of the grain tax on the interests of India could be considered in the present debate, but the proposed preference within the Empire could not be considered all round. They could not debate, for instance, the effect of a preferential duty on wines. They might point out, but they could not adequately argue the question, that, as regarded this tax, any preference would lead to the American trade coming to this country by way of Canada, and it was impossible to prevent it. In attempting to discuss, on the present occasion, this enormously important question, they would be simply dancing in fetters, and he earnestly appealed to the Government, on behalf of a large number of Members, that, before they committed the country to the system of preferences foreshadowed in the speeches to which he had referred, they would give the House of Commons an opportunity of considering a subject than which one more worthy of the attention of the House could not be conceived.

was in the same position as the right hon. Gentleman the Member for Montrose, in that he had supported the imposition of the duties on sugar and coal, and now objected strongly to the imposition of the corn duty. The hon. Member for Durham, in supporting the tax, had given one of the strongest possible arguments against it. In quoting what happened in the early forties, when a commencement was made in the reduction of taxation, which ended in a complete Free Trade, he said that it was not the amount of the taxes reduced, but the general policy on which the reduction was based, that gave it its great importance. Just so with the present tax. The amount in itself was not serious, but it was the general policy implied by it, and which, if followed, might have serious results, that made its opponents object to the tax. The proposal had been defended on various grounds, but these grounds had varied from time to time, as one after another had been proved to be fallacious or unsound. On the assumption that the tax raised the price of wheat 1s. a quarter, it affected the price of bread by one-eight of a penny on the 4lb. loaf. One-eighth of a penny could not be collected from anyone, so the practical result would be to increase the price of the 4lb. loaf by a halfpenny. If the price of wheat was rising by 1s. a quarter per month, the price of bread would be increased by a halfpenny one month sooner; while, if wheat was going down by 1s. a quarter per month, bread would go down a halfpenny one month later than if there were no tax. To a man with a large family the tax would mean as much as 2d. in the £. on his income. Such a tax, which fell heaviest on those who were least able to bear it, was one which obviously required defending. The first defence was that it would have no effect at all on the price of bread. That defence had been practically abandoned. But the serious objection was not the amount of the burden imposed, but the fact that the tax was Protective, and that, in addition to the amount actually received by the Exchequer, there was a further amount which went to other people in the country. That had been denied, but let the House consider the effect of the tax in its working. The price of wheat in the local markets was regulated by the price of foreign wheat, and that was made up of two parts—the price of the wheat in harbour, and the cost of the carriage from the harbour to the local markets. The price of the wheat in harbour was the price that had to be paid to obtain in the English harbours the quantity required by the people. The tax had not altered that price one jot or tittle; it had not altered the cost of growing wheat abroad, or the cost of bringing it to England, and, according to those who said it was not protective, it would not affect the production of wheat in this country. The tax, therefore, would not affect any of the circumstances which regulated the supply of corn or the demand for corn in the ports, so that the price in harbour would remain the same as before. But 1s. was added to the cost of bringing that corn to the local markets, so that 1s. was added to the price of corn in those markets, and the price of grain throughout the country was raised. In the eyes of some people that rise of 1s. was not an absolutely fatal objection to the tax, but it was a very grave objection, and, in his opinion, it made it the worst possible way of raising the money required. What was the second defence? That this was a war tax and that the Government wished to make every person in the country feel the pressure, and that everyone would be willing to pay. He did not deny the desirability of that element in taxation, but he did say that this was the worst tax they could have from that point of view. The war was over, and therefore this was no longer a war tax, but it was a tax which was necessary, to use the words of the Chancellor of the Exchequer, for permanently broadening our basis of taxation. He was one of those who sat at the feet of the Chancellor of the Exchequer and the right hon. Gentleman the Member for West Monmouthshire when they preached the necessity for economy in the finances of this country. He did say to the Chancellor of the Exchequer was it wise in the interests of economy to begin a series of taxes which would put them, in the position of having large numbers of people in the country who were in favour of maintaining taxation at its present level. Surely the Chancellor of the Exchequer was aware at the present moment of the truth of what he was saying. He had received resolutions from gentlemen actually thanking the Chancellor of the Exchequer for imposing this duty. Who ever thanked the Chancellor of the Exchequer for putting another 1d. on the income, tax, or who ever thanked him for imposing such taxes as they had had of late years? When they got people thanking the Chancellor of the Exchequer for imposing taxation, it meant that they had a number of people who were interested in the tax. There were many hon. Members who had supported this tax with the idea that it would be felt by the people of this country, and because they thought it was desirable that the people should feel the pressure of taxation. He appealed to them, however, to remember this fact, that the very poor would feel it, and the people who would feel it the most would be those whose influence upon political questions was the very least. They had a large number of persons who were personally interested in the maintenance of taxation. In other countries it had been found that great trouble in reducing expenditure was caused by the existence of large numbers of people who, being interested in a portion of the taxation, found that it was to their interest to increase and maintain expenditure lest that portion of the taxation should be reduced. The Chancellor of the Exchequer said that one of the most serious things he had experienced at the end of the war, was that the feeling of the country had been not how he should reduce expenditure, or how he should retrench, but how he should spend the money. That was to his mind a grave situation. It was a situation on the gravity of which this tax had seriously increased, and the maintenance of this tax as a permanent one—and still more if it was followed by the imposition of other taxes of a similar character—must make that situation still worse. He did not wish to exaggerate or to imply that in any way he doubted the statement of the Chancellor of the Exchequer when he said that he was a free trader, and when he said that, nothing was farther from his mind than to allow this country to be dragged into the old bad system of taxation. He did say, however, that he thought the right hon. Gentleman had been unfortunate in the policy he had adopted, and he was afraid the right hon. Gentleman had been misled by the inquiries he had made as to the effect of taking off the tax, because it had no effect upon the price. The effect upon the price was produced at the time when the Budget was introduced, and that had something to do with the right hon. Gentleman yielding to the pressure which had been brought to bear in the country, in favour of the re-imposition of this tax. He hoped that if it were impossible for this tax to be removed this year, that when they came to discuss the finances of the country next year, and in the future, they would not be hampered in the most serious duty which this House had to perform, that of diminishing and supervising the enormous expenditure of the country in face of the opposition of a large number of people who were interested in maintaining that expenditure. He should support the Resolution which had been moved.

said he was glad to have the opportunity of supporting the proposition made by the right hon Gentleman the Member for Montrose. He demurred some what to the argument put forward by the hon. Member for Durham, who said that this particular tax which they were now considering was one of very great importance and necessity to the Chancellor of the Exchequer. He submitted that if this tax were necessary a few weeks ago, the improved political conditions in which the country now happily found itself had taken away the urgency which prevailed before. He held that the yield of this tax, substantial as it was, was nevertheless infinitesimal in comparison with the vast and far-reaching consequences which it would be likely to bring in its train in the shape of the upheaval and reversal of our whole fiscal system. He felt grateful to the right hon. Gentleman the Member for Montrose for having dealt with this subject in an important speech that afternoon. He hoped that one effect of that speech would be to steady the public opinion of the country in regard to its fiscal policy and make it still more resolved not to let go that sheet anchor of Free Trade which had done so much to build up the commercial prosperity of this nation. He confessed that he had a very strong feeling of sympathy with the Chancellor of the Exchequer when he expressed his desire to promote the closer commercial relations of the mother country with the Colonies on the basis of Free Trade, but he thought that was much more of a theoretical than a practical question. If the Chancellor of the Exchequer would stick firmly to this theory, he felt sure that he would receive a large measure of support from the Opposition side of the House. There was something they might do to improve their commercial relations with the Colonies, and that was to do all they could to study their requirements and their respective markets, and the Colonies in return should do all they could to study the requirements of the home market. He thought a study of that nature would promote good feeling and increase the volume of commercial transactions passing to and fro between the mother country and the Colonies. They should see to it that if they had more Free Trade within the Empire it should not be at the expense of a diminution of the Free Trade which they enjoyed without the Empire. He agreed with some speakers who had preceded him as to the great importance of keeping their minds open with regard to some of the proposals which would be considered by the Colonial Premiers during the next few weeks, but in return for that he thought they might reason ably ask that a full opportunity should be given to them later on of discussing whatever proposals were the outcome of the conference with the Colonial Premiers, when they had reached a definite and concrete form. He therefore, most strongly supported the appeal made by the right hon. baronet the Member for the Forest of Dean, and he trusted the House would have a full and adequate opportunity of dealing with this question in detail. The views of their Colonies were entitled to their deepest respect, but the colonial representatives, he thought, would cordially concede that the views of the United Kingdom were similarly entitled to every consideration. There was another class on whose behalf he wished to put in a pica. He thought that the traders of this country should have an opportunity of expressing their views on any such proposals. That was done in 1896 when there was an Imperial Congress of Chambers of Commerce assembled in this city, and he recollected that this question of an Imperial Zollverein was very fully debated. At that time the proposal had the powerful advocacy of the Colonial Secretary, but when it came to be carefully examined at the hands of practical traders the result was that it was seen that it bristled with so many fatal and insuperable objections that the original proposal which seemed so plausible at the outset was in the end entirely dropped, and quite an innocuous one was passed in its stead. What was one of the considerations which convinced those business men of the impracticable character of this proposal? One of the considerations was that if we began to differentiate in favour of one part of the world we should have to differentiate against another part of the world, and if we differentiated against foreign nations from whom we got raw materials, it would handicap our own industries and prevent them being carried on in a satisfactory manner, and make it quite impossible for us in the future to hold that commanding position in the great neutral markets of the world which this country had up to the present held. This would be a fatal objection, particularly in regard to the cotton trade, but other trades would be similarly affected. If they began to impose a duty on iron ore, coming from Spain or elsewhere outside the Empire, the iron trade would be hopelessly handicapped, and it would become impossible for the iron and steel trades to be carried on. In another respect also we should at once find ourselves face to face with a serious position if we began to discriminate against foreign nations, for we should lose the advantage of the "most favoured nation" condition which hitherto we had enjoyed. If we discriminated in favour of tea from India and Ceylon, we should be ipso facto discriminating against tea from China. A commission had been sent to China to try to negotiate a new commercial treaty with that great empire from which we expected so much, and it was clear that an insuperable difficulty would be imposed in the way of Sir James McKay, who had charge of that commission, and he would undoubtedly not have so good a chance of concluding a satisfactory arrangement if we were to discriminate against China in this matter. It was clear to the House, he thought, that if a war of tariffs were to result many of our producers must be seriously penalised, and if they were to penalise production then employment in this country would be proportionately diminished. He did not think a movement in that direction would tend to consolidate the Empire or increase the good feeling between the colonies and the mother country which they were all anxious to promote.

said he did not quite understand the apprehensions which hon. Gentlemen opposite, or some of them, seemed to feel on the point on which they had laid so much stress this afternoon. The right hon. Gentleman the Member for Forest of Dean made an earnest appeal to the Government, and he was supported by other speakers, that no great change in the fiscal policy of this country should be allowed to take place without opportunities of discussion being afforded in Parliament. Surely such an appeal was altogether unnecessary and beside the mark. Was it conceivable for a moment that a great change of that kind could ever take place without Parliament being heard with regard to it? The right hon. Gentlemen opposite could command an opportunity whenever they pleased, and assuming that there was such a change contemplated by His Majesty's Government he was quite certain they would be ready to afford opportunity for discussion. He was glad to hear from his speech that the right hon. Gentleman the Member for the Montrose Burghs was actuated by no party motives whatever. Hitherto this corn tax had been known and described in the House of Commons and the country as the registration duty on corn, but owing to the publicity given to it in these debates it would be known in future as the Peel shilling duty on corn. When hon. and right hon. Gentlemen denounced it in the relentless, and almost savage, manner they had done during these debates he thought they did injustice to the memory and the traditions of the great man who was first responsible for the tax, who introduced it into Parliament, and who maintained it during the rest of his career. The hon. Member for Lincoln had denounced the tax as the worst tax introduced at the worst possible time. With great respect to his hon. friend, he thought it was exactly the opposite. It was one of the best taxes that could be introduced, for this reason. It raised a large revenue, which could not be obtained by any other means with less disturbance to trade and less injury to any single class of the community than by this tax. The hon. Member said, what on this side of the House they, had always denied, that it would have a permanent effect in increasing the price of the food of the very poorest people in the country. They heard a great deal on that subject on the last occasion when this question was discussed, and he should like to say one parting word on that point before this debate closed, as to the cardinal fallacy which, in his opinion, underlay the whole of the argument, when it was said that the rise in the price of grain was due to the imposition of this duty. Really, one would think that hon. Gentlemen on the Opposition side of the House, were of opinion that taxation was the only factor which affected the question of the rise of price. Member after Member had got up and drawn pictures of the bitter suffering—the word starvation had frequently been used—which would be brought on the very poorest of the poor by the imposition of this tax. He had hoped that the condition of the poorest classes in those days was considerably better than it undoubtedly was in years gone by. Whether he was right or wrong on that point, he maintained, and he was ready to demonstrate, that it was due not to the 1s. duty but to other causes altogether. At the very commencement of these debates he reminded the House of the fluctuations which were for ever occurring in the price of wheat. There had been a very striking proof of this since the duty was imposed, and the mere statement of the fact was a conclusive answer to all the lucubrations of hon. and right hon. Gentlemen opposite with regard to the effect of the 1s. duty. He should like to know how many hon. Gentlemen in the House were aware of what had occurred as to the course of the prices of wheat since the Budget was introduced. He had taken the trouble to obtain figures on the subject from a very authoritative source—the Board of Agriculture—up to a short time ago, and he thought it would be extremely interesting for the House, as they had not been quoted before, to know what they were. On March 1—a fortnight before the introduction of the Budget—the price of wheat was 27s. 1d. per quarter; on March 8, 27s.; on March 15, 27s. 1d.; on March 22, 27s. 1d.; on March 29, 27s. 2d.; on April 5, 27s. 3d.; on April 12, 27s. 5d., and on April 19, 27s. 7d. That was to say that in the five or six weeks after the Budget statement was made wheat varied in price exactly to the extent of 6d. On April 26 it rose to 28s. 9d.; on May 3 to 29s. 9d,; on May 10 to 30s. 9d.; on May 17 to 31s. 1d.; and on May 24 to 31s. 6d. What did that mean? That was a rise of nearly 5s. per quarter since a fortnight before the time that the Budget was introduced. That in itself, quite irrespective of the shilling duty, was more than sufficient to account for all the rise that had occurred in the price of bread. He should like to say to the Committee that all this was foreseen by the authorities in the corn trade. He had received the following letter, dated April 21, from one of the highest authorities engaged in the corn trade in London. He did not give his name— only for this reason, that he had not asked his permission to do so—but it was as follows—

"It is most unfortunate that at the same time as the Ministry issued the Budget with the taxation on grain and flour the Americans found that the red winter wheat crop, which is the largest in the United States, was considerably damaged, and a rise in price consequently followed; this will undoubtedly be taken advantage of by the opponents of the Ministry to say that dearer bread is caused by the new taxation, whereas it is the outcome of higher foreign markets on poor crop reports."

He quoted that to show what was the opinion among business men with regard to the effect of the shilling duty. His correspondent turned out to be a true prophet in two respects—first of all the attitude which would be taken by hon. Gentlemen on the Opposition side of the House and, secondly, in regard to the course of the price of wheat. There was something else equally true which he wished to press on the attention of hon. Gentlemen opposite. He found that there, were innumerable markets in the country where wheat was quoted at from 32s. to 35s. per quarter. But 35s. per quarter was a price for wheat which in these days was entirely abnormal. He should say that taking one year with another 25s. or 26s. was more like the average figure. It was as certain as anything could be that the price would very shortly change, and that there would be a very considerable fall before many months were over—a larger fall, indeed, than the rise of 5s., which, he supposed, even the most determined opponents of this tax would not attribute to the shilling duty. He was very confident that that would show once for all the value of the statements urged from the other side of the House as to the misery and starvation which was going to fall on the poorer classes of this country entirely in consequence of the imposition of this shilling duty. A single illustration would show the absurdity of the whole charge. It so happened that the day after the clause imposing the duty passed through Committee he came across two passages in two London papers. One was from a leading article in the Daily News and the other was from an article in The Times, on the price of wheat. The article in the Daily News was headed, "The Wolf at the Door," and it ran in this fashion—

"The bread tax has been closured through the Committee stage, and the country is a step nearer the dark days of dear bread and protection which we had hoped had gone for ever."

He then turned to The Times, and the first thing he came across in that journal was the quotation of the price of wheat in Salisbury market—

"English wheat is another shilling per quarter down."

And

"English wheat has lost another shilling per quarter."

At all events, wheat had fallen in price 2s. per quarter, or double the amount of the tax. He did not think that anything could show more completely the absurdity of the denunciations, which had been levelled against this tax in and out of Parliament than these two quotations from two different papers on the same day. Unless the whole position changed in regard to the price of wheat in this country, he believed that in a very few months there would be a considerable fall in the price of that grain. What a commentary that would be on the statements of hon. and right hon. Gentlemen opposite as to the misery that was to befal the poor through the imposition of this shilling corn tax. He supported the tax, not because it was a question of Protection, but because he believed it to be the best, the simplest and easiest mode of raising what was stated to be a necessary revenue, and which would, at the same time, inflict the least possible harm on any class of the community. He did not often indulge in prophecy, but he ventured to predict that the day was not far distant when hon. and right hon. Gentlemen on the opposite side of the House would be only too anxious to forget what they had said from the very beginning in regard to this question.

said that it was not expected that the debate that afternoon would turn on the question of Free Trade or a Zollverein embracing the Colonies. There was a good old proverb which stated that coming events cast their shadows before, and he thought there was some reason to believe that the shadow of a Zollverein, accompanied by Protection, was approaching. There was an imposing structure of timber and straw in the street leading to the House with the motto upon it, "Canada, the Granary of the Empire." That was clearly an indication of the belief in Canada that America was in the future to be cut off from supplying us with food stuffs in favour of Canada. Now, we got, comparatively speaking, no manufactures from the Colonies, and if we were to have any reciprocity at all between them and ourselves, we must put on duties on the raw materials and food imported from foreign countries. But cheap food and cheap raw materials had been the basis of the prosperity of this country during the last century, and why should we seek to check that by imposing import duties on raw materials and food from foreign countries, such as the United States, which were developing their great natural resources with enterprise and spirit, and give a preference to the imports from the Colonies? If we had reciprocity with the Colonies we should have to put a duty on wool imported from Morocco, from South Africa, from Cashmere and from the Argentine. If import duties were to be paid on the wool from all those countries, he believed that the great woollen manufacturing industry of Yorkshire would wither, for it was necessary that the spinners and weavers of Yorkshire should be able to buy their raw material—their wool of every different quality—from all parts of the world. Then take the steel industry, in which he was interested—

The hon. Gentleman is going too far in following that line of argument in connection with the Motion before the House.

acknowledged that according to the forms of the House he might be considered out of order, and therefore he would obey Mr. Speaker's ruling and would not pursue this matter further. He expressed the hope, however, that the House might have an opportunity of discussing this question at some length on a future occasion. It was idle to doubt that this particular Clause was encouraging the distinguished representatives of the Colonies who were coming to England for the Coronation, in the belief that some sort of Zollverein, some sort of arrangement with the Colonies for differential duties was in the air. It was most unfair that the House should have to depend on casual debates of this kind in order to get some information. He trusted that the Government would seriously consider the appeal made to them from that side of the House for an opportunity to have a proper discussion on this question. The Speaker might even allow the adjournment of the House to be moved in order to debate it.

, said that he had had no communications, no private letters, no insinuations of any sort from his constituents against this corn tax which the Government were imposing. He believed that the tax was based on justice, and he looked upon the long, dreary, and shallow debates upon it as mere waste of time. Since the debate had been inaugurated there had been a very small and listless attendance. Nobody had been present except the professional politicians, who looked upon the tax as a change in the fiscal system of the country. It was nothing of the kind. They had already heard ad nauseam that when the Liberal Party were in power and had a surplus of £900,000, and therefore had a chance of abolishing the duty, which was then regarded as only a registration duty, they did not do so. Now, on the present occasion, there was no surplus. Borrowed money was not a surplus, although it might be so in the eyes of the professional politicians opposite. [Loud cries from the Opposition Benches of "Who are they?" "Name, name."] He did not require to name them; they were too well known. He thought it was somewhat hard that so much had been said about the Zollverein before the proposition had been considered by the colonial representatives; but he had no objection if the Government would give a future day to discuss the matter. He should be delighted to have a freer trade with the Colonies than with the rest of the world; but he did not sec how that could be brought about quite as easily as some hon. Gentlemen imagined. The Government did not look upon this corn tax as a return to Protection: it was only a revenue duty. He, with the Government, was perfectly convinced that it would not raise the price of bread. In Glasgow, the second city in the Empire, there had been no rise in the price of bread, although there had been a slight rise in the price of feeding stuffs, which was due to a temporary panic.

commented on the fact that the hon. Member who had just sat down had commenced his speech with the statement that he had had no representations from his constituents. The hon. Member having said that had proceeded to inform the House that his constituents thought this tax was not protective; that it did not affect the price of bread; and that the shallow debates on this subject in this House were a waste of time. Having regard to the admission made in the opening of his speech, he (Mr. McKenna) was inclined to think the views expressed were not the views of his constituents, but of the hon. Member himself. With regard to this tax, he desired to draw attention to what took place in October 1900. The month of October 1900, was an important date, because at that time a General Election was in progress, and the speeches made at that time laid down the policy of the Government during their tenure of office. There was one speech to which he would like to refer. In a speech made in the Liverpool Chamber of Commerce, the Chancellor of the Exchequer said:

"We must remember that our great imports from our Colonies were raw material and food, and to suppose that after fifty years experience of what the freedom from taxation of raw material and food mean, this country will deliberately resort to a system of taxing raw material and foods from foreign countries is to my mind an absolute impossibility."

I know where the hon. Gentleman has got that from. It is from one of those veracious pamphlets circulated by the Financial Reform Association; and the obvious meaning of that speech from which he has read that short quotation is this. What I was alluding to was the old system of Protection which existed fifty years ago. This tax fifty years ago was imposed by Sir Robert Peel when he abolished Protection, and it was maintained for twenty years, and was only abolished thirty years ago. Therefore it is perfectly obvious that, when I spoke of fifty years of experience of what freedom from taxation of imports of raw material and food meant, I could not possibly have alluded to this tax.

said it was, of course, perfectly obvious that this proposal of 1s. a quarter on wheat, was very much less than the imposition on food at the time when the principle of Free Trade was adopted, but it was never-the-less true that not only those who sat on the Liberal side of the House, but he believed the country as well, understood that when the right hon. Gentleman the Chancellor of the Exchequer came into office in 1900, his policy was the policy of Free Trade; that he would maintain Free Trade; and that he would resist any taxation on the staple food of the country. The defence made by the Chancellor of the Exchequer with regard to this particular tax, that thirty years ago that tax was taken off by another Chancellor of the Exchequer, was no ground for his reimposing it. There were a few figures which he wished to lay before the House. The House had been told so often that we had been losing ground owing to the competition of our rivals; that we must widen the bases of taxation and that we must protect our manufacturers, that he made no apology for the figures he was about to give to show how disastrous would be Protection on our foreign trade. The figures he proposed to quote were the figures of the foreign trade of the United States of America and of this country. He proposed to compare the year 1840, which was before Free Trade was introduced into this country, with the figures of 1900, which was almost the last year before, as he was afraid, we were going back to the policy of Protection. The House would bear in mind that in comparing the figures of the trade of two countries, the amount of trade per head was the only true comparison that could be made, and the House would also remember that the population of the United States of America is nearly twice that of the United Kingdom. In 1840 the foreign trade of the United States of America per head was £2 8s., and that of the United Kingdom £4 5s.; in 1900 the trade of the United States of America per head was £6 5s. 8d., and that of the United Kingdom £19 5s. 10d. In sixty years, therefore, the trade of the United States of America per head had increased by £3 17s. 8d., whilst that of the United Kingdom had increased by £15. Those were remarkable figures to illustrate how we had prospered when we had left our manufacturers free, and when we did not indulge in a system of protection. The figures of the shipping trade were even more remarkable. In 1860 the United States of America's estimated tonnage of sea-going shipping was 2,380,000; in 1901 it was 880,000, so that it had been reduced to a little more than one-third. The figures for the United Kingdom were 4,660,000 in 1860, and 9,300,000 in 1900, so that that part of our trade which gave us our great invisible exports had doubled. That was another example of the benefit of Free Trade. Now, the House had been told that this tax was not Protection, and the hon. Gentleman the Secretary to the Treasury put forward an interesting argument in support of that view on the Second Reading. The hon. Gentleman argued that this was not Protection, because the essential of a protective tax was that it should protect, and he asked, did anyone suggest that this tax would result in keeping out of the country one quarter of foreign corn, or that it would result in putting one acre under corn that was not already under it? But that definition of protection was not the right definition. A Protective tax was one that protected the seller of goods in this country against the consumer; a tax which enabled the seller to get a higher price, from the consumer. That the seller should be able to get a higher price it was usually necessary to keep foreign goods out of the country, but that was not essential. If by this tax the producer of corn in this country was protected against the consumer then it was a protective tax. There could be no doubt that the effect of this tax would, and must be, to raise the price of corn in this country. The right hon. Member for Sleaford had given some interesting figures to show that the price of corn fluctuated from other causes besides taxation; nobody disputed that. But if a tax of 1s. were put upon corn, it would not fall so low by 1s. as it would if the tax were not put on; and if a tax of 1s. were put on, it would go higher by a 1s. than it otherwise would if there were no tax. The hon. Baronet who had spoken last had talked of the House having voted Supply, and having committed itself to raising the taxation, and of its now being unwilling to meet the expenditure except out of borrowed money. That attack was hardly a fair one to make against the Liberal side of the House. For his own part, he would have preferred to have seen an extra penny on the income tax rather than this 1s. on corn. The income tax was now 1s. 3d. in the pound, and that was looked upon as a very large amount; but only on Monday last an award was given in the case of the arbitration of the North Country miners, which reduced their wages by 10 per cent. That amounted, so far as they were concerned, to an income tax of 1s. 3d., but they did not grumble. We had been rightly described as the richest country in the world, and he submitted that the richest people in the country could better afford to pay an extra penny on the income tax than the poorest of the poor could afford to pay this 1s. corn tax. This was not a case of getting a necessary contribution from the masses of the people in order to meet the expenditure of the war, and the people who were asked to pay it were people who had to pay, not out of their comforts, not out of a reduction of their luxuries, but out of their food supply, which they could not spare. We were imposing on these people—one quarter of the population of Great Britain—a tax which they could only pay by having insufficient food.

said the right hon. Gentleman had referred to the figures given by the right hon. Member for Sleaford but he had omitted to point out one thing which he should have pointed out, which was that all the fluctuations dealt with by the right hon. Gentleman were rising and not falling fluctuations.

said that was exactly the opposite of what he had pointed out with regard to the fluctuations referred to. In support of this argument he had given two specific cases of falling fluctuations.

said the right hon. Gentleman had then proceeded to prophesy, and had ended his prophecy by saying that in a few months there would be a considerable reduction in the price of corn. But the right hon. Gentleman gave no figures upon which to base that prophecy.

pointed out that he had said the 35s. in these days was an abnormally high price for wheat.

said the right hon. Gentleman had also forgotten that this tax not only involved the 1s. which would go to the Chancellor of the Exchequer, but other charges from which he would derive no benefit, but which the people would have to pay. If the omission of this clause had reference only to a technical matter, he should not have ventured to have intervened in the debate; but there were two questions involved upon which he would like to say a few words. First of all, was this taxation necessary? Having regard to the statement made that the surplus at this time was due to borrowed money, he thought there was some necessity for further taxation, but, in his opinion, though there should be some taxation to pay off the cost of the war, it ought not to be taxation on the food of the people of this country. What he objected to in this proposal was that the tax which was proposed by the Chancellor of the Exchequer was a tax on the food-stuffs of the people. The Chancellor of the Exchequer objected to the pamphlet issued by the Financial Reform Association, but there were other words also in that pamphlet which were àpropos to the debate and to this question. The right hon. Gentleman said at that meeting it had not been his fate to inaugurate some great fiscal change. The power which had been granted to the Government was given for a very different purpose, and if any such fiscal change as this were going to be introduced, if this reform was going to be made at the conference of Colonial Premiers soon to take place, he ventured to say before this change was made it was the duty of the Government, before the convention or the treaty was ratified by the Government, to refer it to the House. And in strict justice it ought to be referred to the country. He did not suppose for a moment that the Government would appeal to the country on any fiscal arrangement agreed to by the Government with the Colonial Premiers, but no such change ought to take place before the House had tested the arguments. He objected to the payment by the working classes of this new duty on corn. It had been said that laying a tax upon corn would bring home to the people their responsibility for their share in the war. But there was no difference between this and a tax on tea or tobacco with regard to bringing home the responsibility. The difference was that the one article was a necessary, and the others were only luxuries. The real argument that must be used in support of the tax was that, inasmuch as the population increased automatically every year, the increase of the consumption of corn must keep up with the increase of the nation, and that the Chancellor of the Exchequer of the day, whoever he might be, slowly but surely got an increased amount into the Treasury from the tax, because it was impossible for anyone not to evade it by not consuming the particular article taxed. A great number of people in this country were teetotalers, and the taxation on wine, beer, and spirits was evaded by them; many did not smoke, and consequently did not pay the tax on tobacco; but that was not so in this odious tax, for odious he considered it—everybody must pay this. When this registration tax was in operation before, it only cost the people 9d. a head, now it was going to cost 1s. 7d., and when that was added to the cost of the sugar duty, it would be found that the two together were equivalent to a poll tax of 5s. And all this was done, as was stated by the noble Lord the Member for South Kensington, in order that the people might feel their responsibility by a personal sacrifice. But the personal sacrifice demanded from the people was ten or twenty times as much as the noble Lord wished to pay himself. The right hon. Gentleman had told the Committee that this was partly a war tax and partly a permanent tax. The right hon. Gentleman had gone down to Bristol, and had told the people that he proposed to charge a large portion of the cost of this war to the Transvaal, but only a few days ago he had told the House that a large part of the borrowed surplus was to be devoted to the temporary advantage of the Transvaal.

What I say is, some of it may be temporarily used for the purpose of rebuilding and restocking farms in the Transvaal and purposes of that kind, until a Transvaal guaranteed loan can be raised.

said it appeared that this war tax was to be found by the people of this country. He ventured to say it would have been more honest on the part of the Chancellor of the Exchequer if he had told the people of Bristol, and, through them, the people of the country, that he was prepared to tax their food in order to leave the resources of the Transvaal untouched until some distant day. It seemed to him that the right hon. Gentleman, instead of putting this war tax on the people, should have laid some greater burden on the great accumulations of capital in this country, which amounted to no less than £15,000,000 of income a year, and accumulated annually nearly £200,000,000 of capital. What we wanted in this country to break up the congested districts was cheap and wholesome food, but this tax would to some extent make it more difficult to obtain that food. In this respect the Government were making taxation synonymous with privation, and that was a course of political and financial conduct against which he entered his most earnest protest.

This tax has now been debated on several occasions, but, speaking for myself as to the impression made in my own mind, I must confess that the longer it is debated the more dense is the cloud of obscurity which hangs around it, and the more difficult it is to understand why the Chancellor of the Exchequer continues to press it. The case of necessity, such as it was, which was presented on the introduction of the Budget—not, as many of us thought at the time, a very convincing or even plausible case—has entirely disappeared, and the House is at this moment, I venture to say, absolutely in the dark as to the destination of the proceeds of this tax. We may hope that the Chancellor of the Exchequer may be able, as he indicated a few nights ago, by means of this tax to reinstate the Sinking Fund, and to begin again the process of repaying the debt. We may hope that; but we may also fear—and to my mind the fear is just as well founded as the hope—that the proceeds of this tax will be intercepted from any such innocuous purpose, and that, in view of the dilatory and ambiguous statements of the Government as to the final form which the Education Bill is to take, they may be diverted in the direction of relieving the rates and financing the denominational schools. I venture to say that the House of Commons in a matter of this kind ought not to be left a prey cither to hopes or to fears. It ought to have certain knowledge; but at this moment, when we are at the Report stage of the Bill, all that we actually know is that the proceeds of this tax are going to be collected and thrown without label or ear mark into the National Exchequer, to be applied to some unspecified and indefinable purpose; and the only safeguard we have is the good intentions of the Chancellor of the Exchequer. Quite apart from the merits of the tax, that state of ignorance as to its ultimate appropriation is amply sufficient to justify our opposition to this clause. But what are the merits of the case? I do not want to go over again the ground so frequently traversed, and necessarily traversed, in the course of the debates; but many things which at the beginning of the discussion were matters of controversy, are now common ground of general agreement. I say that this tax—and I do not think I shall state in the two or three propositions I am about to lay down anything which is fairly disputable as regards some of the articles enumerated in the schedule, and to which it is to be applied, is obviously and undeniably a tax on the first necessaries of life, and as regards other articles enumerated in the schedule, it is a tax on the raw material of important manufactures. I say again that, as regards some of the articles, not all, it is true,—not maize, not rice—but certainly as regards wheat and flour, it is either admittedly or demonstratively a Protective tax. As regards flour, we had an admission from the Chancellor of the Exchequer himself in the debate the other night on the proposition of my hon. friend the Member for Devonport to reduce the duty on flour from 5d. to 4d., that the foreign manufacturer as Compared with the home manufacturer would be at a disadvantage—that, in fact, this duty on flour, in the form and at the figure in the schedule, is a Protective duty to the extent of 20 per cent. in favour of the home producer as against the foreign producer. I say these are propositions which cannot be disputed.

I do dispute them.

The right hon. Gentleman may have changed his mind.

No; I deny that it is a Protective tax to the extent of 20 per cent.

Of course, I do not mean to commit the right hon. Gentleman to the 20 per cent.; that is my own inference; but he did admit that the foreign manufacturer, as compared with the home manufacturer, would be at a disadvantage, and that is quite sufficient for the purposes of my argument. Then, Sir, this tax, which possesses the characteristics I have described, is a tax which, upon the highest estimate, is going to produce a relatively insignificant sum for the purposes of the Exchequer, and which, owing to the reductions which the Chancellor of the Exchequer has made, and very properly made, in the figures of the schedule, will yield a still more unimportant sum than appeared when the Budget was originally introduced. So that you have got, to sum up, a tax partly on raw material, partly on food, as to some of its features Protective in its incidence, producing a relatively small amount, proposed for no ostensible reason, and put forward in circumstances not of necessity or even of urgency. In these circumstances is it not natural and legitimate that we should suspect that there is over and above the actual exigencies of the hour, some ulterior fiscal purpose? Two reasons have been suggested in the course of these discussions to account for what, otherwise, I must again say, is to me the absolutely inexplicable conduct of the Government. The first is, and this is the view of the Chancellor of the Exchequer, that it is desirable to broaden the basis of taxation, and that the imposition—or, as he calls it, the revival—of this duty on corn, is one of the means of carrying out that object. I will go any length with the Chancellor of the Exchequer—he cannot state it too strongly or too clearly for me—I will go any length with him in acknowledging the doctrine that all classes of the community, who are ultimately responsible for the policy of the country—and policy as we know governs expenditure—ought to contribute their share to the general cost of that for which they are responsible. I will not go into an inquiry, because it would not be relevant to this clause, as to whether, in point of fact, the balance as between direct and indirect taxation, is at this moment evenly adjusted. A great deal might be said on that point, and it must not be assumed from what I am about to say, that I admit for a moment that the adjustment is unduly in favour of the payer of indirect taxation. But let me assume that it is necessary, as a matter of fiscal equity, and in order to support this doctrine of popular responsibility, to increase the proceeds of indrect taxation. I say, even on that assumption, that the tax now proposed, and which the House is, in this clause, asked to sanction, is an absolutely indefensible tax. And why? It offends against the elementary canons of indirect taxation, and in two distinct ways. In the first place, because it is a tax on an indispensable and primary article of universal consumption; and in the second place, because, whether you intend it or not, it gives protection to the home as distinguished from the foreign producer, with the necessary consequence that more money is taken out of the pocket of the consumer than ultimately reaches the Exchequer. We have a great many indirect taxes; the Chancellor of the Exchequer himself has added to their number both last year and the year before by placing duties on sugar and coal, but there is not one of them which is exposed to these two objections which, in my judgment, are fatal to the tax which is now under consideration, I do not pretend that the analogy is an exact one, but it is an analogy which is sufficiently relevant to be used for the purpose of argument. Take the case of the income tax. You exempt, and rightly exempt, from liability to income tax, incomes which are below a certain amount. And on what principle? On the principle, I think, that it is the irreducible minimum of expenditure for persons in that class of life, and, therefore, not a fit subject for taxation, by the State. Apply the same principle to the consumer, the person who pays indirect taxation. I say that there again there is an irreducible minimum which you ought not to tax, and that minimum is represented by the bread which no family can do without, which is the staple food of the people. Therefore, even if I agreed with the assumption of the Chancellor of the Exchequer, which I have assented to for argumentative purposes, that it was necessary in order to do fiscal justice to broaden the basis of indirect taxation I should say you are here offending against the principles you have hitherto recognised and flying in the face of the practice which you yourselves adopt in dealing with direct taxation. But, Sir, I pass from that, and I will come to what I may call the second ulterior reason suggested for this tax which, as I have said, cannot be justified by the necessities of the time, and that reason is that it is or may be the first step towards the introduction within the Empire of some form of preferential or discriminating tariff. I do not intend to travel into any part of this large and very controversial area which is not distinctly relevant to the proposal now before us. The Chancellor of the Exchequer himself, I know, denies that he had any such intention when he proposed the tax, and I think the other night, in sufficiently unambiguous language, he disclaimed that he had any such purpose in the retention of the tax, but in making that disclaimer he professed a great desire for the establishment of what is called free trade within the Empire. I suppose we should all like to see free trade within the Empire. The best example of that that I know of, and it is a most encouraging one for those who are disposed to make such an experiment, is to be found in a country which is often, but very wrongly, cited as a country whose commercial prosperity is due to Protection—I mean the United States. The prescience of the founders of the American constitution enabled them to see that the best possible chance of industrial and commercial prosperity for the new federation was absolutely to prohibit internal import duties as between State and State. It is in the fact that you have there a vast area of territory, containing almost every variety of climate and natural resource and over which there is absolutely unrestricted free trade, that you find the cause to which is due more than to any other the commercial prosperity and industrial supremacy, as it is rapidly becoming, of the United States. If we were in that happy position, and our Empire consisted of one contiguous area, enclosed within a geographical ring-fence, we might adopt the same plan and have free trade within its boundaries. But our Empire is not of that character. When we gave responsible government to our colonies—responsible government which many of our statesmen fifty years ago thought to be synonymous with separation—we gave them at the same time fiscal freedom. I think we were perfectly right to do so. We lost our colonies in the eighteenth century because we wished to tax them according to our own ideas; and we should very likely have lost our colonies in the nineteenth century if we had not allowed them freedom to tax themselves in their own way. Having regard to the facts, free trade within the Empire appears to me to be an ideal most desirable in itself, which it would be very difficult, if not impossible, I to attain. But free trade is one thing and the proposition of preferential or discriminating duties is a totally different thing. I accept gladly the right hon. Gentleman's disclaimer on this subject. But the proposition of this tax which the House is invited in this clause to sanction will take away from the Colonial Secretary or the Chancellor of the Exchequer, or whoever is going to meet the colonial delegates in friendly conference, the argument which otherwise they might have used with unanswerable effect. It is now impossible to say, in answer to any proposal which may be made. "We are wedded to a free trade policy in this country. There is not a tax which is not levied for revenue purposes alone; and we cannot upset our fiscal system for any contingent benefits." You cannot say that now.

Why not?

What have you to say to the Canadian exporter of wheat or flour? This tax discriminates against him and in favour of the home producer. The only answer you could make is to deny my premisses and to say that the tax is not Protective at all. But given my premisses, I say that you have no answer to the Canadian who says, "Yours is not a free trade system. It has ceased to be a free trade system, and you are actually discriminating, not against the foreigner only, but against your colonists and fellow subjects." That, to my mind, is a very serious state of things, The fact that you have deprived yourself of an unanswerable argument, and have handed over to the advocate of Colonial Protection an argument which he never had before, is enough of itself to condemn the Clause, and induce the House to refuse to sanction it. It would not be in order for me to go at length into this question, but I submit to the Chancellor of the Exchequer that it would be a bad bargain for the colonies themselves, a bad bargain for the mother country and for the Empire, if you were to purchase a diversion of trade from one channel to another at the cost—and that is the cost you will have to pay—of endangering the position of this United Kingdom as to a large extent the workshop, and as the market and clearing-house, of the industrial world. I was very much struck by a passage which I read yesterday in a suggestive volume called "The American Invasion," by my hon. friend the Member for Hartlepool. He is not a doctrinaire, but one of the captains of our enterprise and industry. With regard to shipbuilding, which my hon. friend understands, he writes—

"What is shipbuilding? It is the bringing together and working together in Great Britain of raw material obtained at the lowest price from different parts of the world. The steel in steamers is made from ore produced in Spain, Algiers, and Sweden; the brass from Spanish and American copper; spelter is produced in Germany, and tin obtained from Asia; the woodwork is made from lumber imported from Sweden, Russia, Canada, America, and our Colonies; the paint from Spanish, Australian, and American lead; the rope from Russian and Manilla hemp."

That is where you get the raw material for a British ship, and shipbuilding is one of the industries in which we hold our own. But the moment you begin to discriminate, between these different sources of supply, or as between two different articles from the same source, that moment you strike a blow at this the most prosperous of your trades and also at the carrying trade of Great Britain. That is the way, directly you interfere with the natural course of trade, in which it works out. I have only one other observation to make. There is a passage in a speech of the Chancellor of the Exchequer at Liverpool which has been cited before. It is an admirable passage, containing the very gospel of Free Trade, and I will cite it again—

"We must remember that our great imports from our colonies are raw materials and food; and to suppose that, after fifty years experience of what freedom from taxation on our imports of raw material and food means, this country would deliberately resort to a system of taxing raw material and food is, to my mind, an absolute impossibility."

It is all very well to say that fifty years ago this particular tax was in existence—

I was not referring to this tax at all.

But this is a tax on raw material and food, and how is the right hon. Gentleman to exclude it from the general doctrine which he has laid down as his own canon, because it is a tax both upon raw material and food. I ask the Chancellor of the Exchequer to apply his principle to this case. Never mind what Mr. Gladstone or Sir Robert Peel said. This is a question of principle. I suppose it is thought that that was a disrespectful allusion of mine to those great authorities. But let me remind the right hon. Gentleman that Mr. Gladstone, not once, but twice and thrice, declared that this was an in-defensible tax; and let us have no more invocations of his authority in support of this relic and survival of a Protective system. This tax, whatever the intentions of the Government may be, is a tax upon food and raw material, and must be of a Protective character, and therefore its effect must be to increase the burden of taxation where it is least easily borne, and to afford a precedent, if not a starting-point, for fiscal changes of the utmost peril to the Imperial and industrial supremacy of the country.

We have had many long debates on the matter before the House; but I think we may congratulate ourselves that today, at any rate, our discussions have been re-animated by the speeches which we have heard from the two right hon. Gentlemen opposite. I can appreciate those speeches, if I do not agree with them; and I will first turn to the main argument of the right hon. and learned Member for East Fife. He absolutely begged the question throughout the whole of his speech. He assumed, without the slightest proof, that this was a Protective tax, and then he accused me of departing from the principles which I laid down in a speech two years ago, and which applied entirely to the old Protective system of fifty years ago, and not to a tax of this kind, which is not practically Protective at all. It is a tax which, in my judgment, can have no material influence on the price of the commodities on which it is levied. The right hon. Gentleman said that this tax could not be justified by the necessities of the time. I say that it is a necessity of any time to pay our debts. We have incurred an enormous expenditure this year for the purposes of the war and the termination of the war. We have borrowed for that expenditure beyond the amount which we require; and it is calmly argued over and over again by hon. Members opposite that we should be justified in dropping taxation which has been proposed for the purposes of the year, and which has been in force for two mouths, and using money which we have borrowed beyond our necessities in order to relieve the people from that taxation. I entirely demur, as I have often done, to that assumption, and it is for that reason, in the first place, that I have pressed this tax upon the attention of Parliament, But the right hon. Gentleman says that I have no business to ask Parliament to entrust me with a tax without telling the House of Commons what I am going to do with it. He suggests that every tax should be labelled or ear-marked for a particular purpose. Such a thing never has been done in the financial history of this country. The right hon. Gentleman insinuates that I am maintaining this tax in order that I may devote it to the relief of the ratepayers under the Education Bill. Every one who has looked at that Bill—and I am quite sure the right hon. Gentleman himself is aware of it—knows very well that not a penny could be expended under the Bill in the course of the present financial year. Therefore, so far as this year is concerned, such a suggestion is simply absurd. As regards the future, whatever expenditure may fall on the Exchequer under that Bill will be a part of the whole general expenditure of the country, for which the Exchequer has to provide, and you can no more earmark a particular tax to a particular part of that expenditure, than you can limit a particular head of expenditure by the proceeds of a particular tax. There was an attempt to do something of the kind by my predecessor, Viscount Goschen, in the matter of the payments from the Death Duties to local taxation, and no one has more persistently denounced that attempt than the financial authorities I see before me on the Front Opposition Bench. What is the argument we have to deal with today? We have hoard but little today about the terrible effect of this tax on the poor. The hon. Member for Lincoln told us that it would impose what would be equal to an income tax of 2d in the pound upon the earnings of a poor man with a huge family. I happen to have consulted a well-known publication, the Labour Gazette, published a few days ago. I find in it figures based on 367 returns from co-operative societies in Great Britain. I find that the mean price in Great Britain of the 4lb. loaf is practically the same as on June 3rd, 1901, in spite of the imposition of the tax, and that it is only ·08—the smallest possible fraction—above the price on March 3rd of the present year. I do not say that that proves that the tax has no influence on the price of corn, but I do say that it is absurd to talk of the tax as a great burden on the poor of the country. The right hon. Member for Montrose has never dwelt in his arguments on the hardship of this tax. He has, in fact, oven suggested that if the tax were a hardship it would be all the better, because it would call the attention of the people to the expenditure of the country; and he has more than once expressed his strong conviction, in which I entirely agree with him, that it is absolutely necessary in a country like this, that the whole population, and not merely a class of the population, should realise what the extent of that expenditure is. The right hon. Gentleman has objected to this proposal mainly on two grounds. He says that it is a reversal of the fiscal policy of this country for ever.

It tends to it.

Oh! Then it is not a reversal of policy, but only tends to it! But be said it was an abandonment of Tree Trade, I confess that I have never been able to appreciate that argument, although it has often been urged in the House. How can this, be practically Protection? No one has suggested that it will diminish our imports of food. It has been admitted in the course of the debate today, and in fact one hon. Member said that it was an objection to the tax, that the imports of food would increase with the increase of population in spite of the tax, and therefore it would produce more in future than was anticipated. Another hon. Member raised as an objection to the tax what I should have thought was, after all, a main element of value in a tax—namely, that no one could evade it. No one has said that it will increase the production of corn in this country. The hon. Member for North Monmouthshire argued that it would raise the price of corn, but even he did not venture to say that the rise would be sufficient to increase the production of corn here. If not, where is the Protection? There is absolutely no proof, although I have challenged hon. Members to produce it, that this tax, which existed for twenty years, had any practical Protective effect such as is credited to it today. It is impossible to suppose, whatever the right hon. Member for East Fife may say as to Mr. Gladstone's opinions two years before this tax was repealed, that if in his belief for all the years before that time during which he was Chancellor of the Exchequer, it had such a Protective effect, he would have repealed the tax on luxuries, on wines, on artificial flowers, which we imported from Prance, and matters of that kind sooner than deal with this tax, which now, in the opinion of hon. and right hon. Gentlemen opposite, amounts to nothing less than the abandonment of Free Trade. After all, the real point of the debate today, in default of any proof as to the Protective character of this tax, has been the excursions made by one speaker after another into the possibility or probability—I will put it as high as that—that through imposing it we intend to change the principles upon which the fiscal system of this country is based. I do not know what more I can say to lay this extraordinary delusion than I have already said. I have told the House plainly that, on behalf of my colleagues, I entirely disavow any idea of that kind through this tax. I have said that it is not our policy to endeavour to encourage trade with our colonies by initiating a tariff war with all those foreign countries who are our largest and greatest customers. That idea is the most perfect delusion that can be conceived, and let me suggest to right hon. Gentleman opposite that I think there is some proof of it, if they do not believe my words, in the nature of the tax itself. Why! What is the only kind of colonial preference we know? A preference given to us by Canada in her tariff. What is the tariff of Canada? It is a purely Protective tariff. It is a very high rate of duty on all kinds of imported goods. Canada has given to us—and we are grateful to her for it—a preference with regard to that tariff to the extent of one-third over foreign countries. But she has not put us on a level with her own producers; we are still heavily taxed as compared with her own producers. And that is my answer to the right hon. Member for East Fife, when he tells me that our position is compromised with regard to Canada by the proposal of this tax. Supposing—I do not for a moment suggest that the thing can be done—that the suspicions of hon. Members opposite were fulfilled, and that we proposed to Canada, reciprocity with regard to this tax. What would that mean? Our two great imports from Canada are wheat and maize. We are about to reduce the duty on maize to three halfpence a hundredweight. One-third of this amount is a halfpenny. The duty on wheat is threepence, and one-third of that would be a penny. Can it be conceived that such a preference as that would be worth anything to Canada in comparison with the difficulties that unquestionably she would have to face in the Customs arrangements which would be necessary to prevent United States corn from availing itself of the same advantage, which might seriously hamper trade on her railways, and perhaps even necessitate some change in the ports from which her products are exported? Why, Sir, it is obvious that any system of preference requires to be based on high duties. If hon. Members had suggested that our wine or tobacco duties, for example, afforded material for a system of colonial preference, and had asked whether we are disposed, because the representatives of the colonies desire, to introduce this matter as a subject for discussion at the forthcoming Conference, I could to some extent have understood the suggestion. But I would venture to remind hon. Members that suggestions have been made in the House within the last three or four years for colonial preference with regard to wine and sugar. I think the right hon. Gentleman will do me the justice to recollect that I told the House frankly and plainly my opinion on that proposal with regard to wine; and the opinion of the Government with regard to sugar was expressed only the other day at the conference at Brussels at which the sugar convention was agreed to. One important enactment in the sugar convention is that we agree during the continuance of the convention, in view of the abolition of bounties by all foreign bounty-giving countries, not to impose preferential duties in favour of our colonies in the matter of sugar. I have to appeal to these facts in the possession of the House in confirmation of the views I expressed the other day as to our intentions in proposing this tax, and in maintaining it. I think that the right hon. Gentleman the Member for Montrose has not done me justice, because he has got this question somewhat on the brain. He confessed to an audience in the North of England the other day that he had been reading magazines on this subject, and from these magazines he had gathered that there were most extraordinary theories afloat with regard to the future policy of this country on economic questions, which appear to have terribly alarmed him. Well, if I may be allowed to offer advice to the right hon. Gentleman, I would suggest that if you want to read something sensational you may go to a magazine; if you desire to find something new you may occasionally find it there, but you should be very doubtful whether you will find much that is true or anything that is practical. I would ask hon. and right hon. Gentlemen opposite if they can do so, even now to lay this phantom of their imagination, and to consider the proposal now before the House entirely apart from this question of colonial preference. The right hon. Baronet the Member for the Forest of Dean made an appeal to the Government in this matter, and said— "If you mean to abolish all the more important fiscal principles of this country, if you mean to lake the first step in introducing an entirely new fiscal system, you ought at least to give an opportunity to the House for expressing an opinion upon it." But does not the right hon. Gentleman know that when there is any real danger of that kind it will be easy enough for him to press Government of the day to initiate a debate on such a subject? But for the present, in my humble belief, this is nothing more than the drawing of a red herring across the scent of this tax. I propose the tax and press it on Parliament because, in my belief, it is required for dealing honestly with the financial affairs of the nation in the present year, and for paying our way in the future with fair regard to the allocation of taxation among all classes in the country. In my belief it will be a tax largely productive, easily levied, and inflicting no hardship on the people or difficulty upon the commerce of the country.

said he did not desire to stand between the House and the division for more than a minute; but when he endeavoured to speak in Committee the Chancellor of the Exchequer moved the Closure, and did not give him an opportunity to do so. He was, therefore, entitled to take the first opportunity of expressing, on behalf of his constituents, their opinion with reference to the proposal of the right hon. the Chancellor of the Exchequer. At Question time the right hon. Gentleman made the welcome announcement to the Irish Members that he intended to meet their views and reduce the tax on maize by one half. That statement was received with satisfaction by the Irish Members, and would be received with satisfaction in Ireland; but it would not at all effect the opposition which would be given to the proposal of the Chancellor of the Exchequer, because oven after the concession the right hon. Gentleman had made, the food of the very poorest portion of the people of Ireland would be, as they thought, unjustly taxed for the purposes of the late war. His constituents would feel it a great hardship to have the price of Indian meal, which was one of the principle articles of their food, increased. He was sure that hon. Gentlemen opposite who really reflected seriously on what they were doing could not escape the consciousness that they were doing an extremely mean thing. What could be more mean than that the Government and Parliament of this great and wealthy Empire should impose taxation on the poorest article of food used by the poorest part of the population of Ireland? England had done many mean things in pursuance of her settled policy to all those who were governed by her in every part of the world, but this was absolutely the meanest. He thought that the Government should have been ashamed to attempt to raise taxation out of the poor food of the poorest section of the population of Ireland. The Chancellor of the Exchequer said that he had been impressed by the tone of the speeches of hon. Members from Ireland in the debate, but his sympathy was