asked the First Lord of the Admiralty whether he is aware that the Director of Naval Intelligence was assisted by five assistant directors of naval intelligence, of whom four were executive officers and one a marine officer; and whether he can state how many assistant directors of naval intelligence have now been appointed under the recent re-organisation?

The answer to the first part of the question is in the affirmative. The second part affects the details of the new organisation, the announcement of which it is undesirable to anticipate. It will be made known in due course.

asked the First Lord of the Admiralty if he will state on what dates Captains Campbell and Hulbert took up their appointments of assistants to the Director of Naval Intelligence; and what was the last day on which they were employed at the office?

These officers were appointed as Assistants to the Director of Naval Intelligence respectively on 25th August, 1906, and 27th March, 1909. The 7th August and the 1st July were the last days on which they were respectively on duty at the Admiralty.

asked the First Lord of the Admiralty if he will state whether the "Afridi" has yet been accepted by the Admiralty from the contractors; if so, what precedents are there for accepting a vessel which has not attained her contract speed; what was the reason for accepting this particular vessel; and what was the reason for allowing several months to elapse before coming to a decision on this question?

The "Afridi" has been accepted. The most recent precedents for accepting a vessel which has not attained her contract speed are the cases of the "Arab" and the "Express." The vessel being required for His Majesty's Service, it was decided, after her full speed trial had been carried out, that she should be accepted, when complete, at the reduced sea-going speed then obtained, and the amount paid to the contractors reduced as provided by the contract. It is not the case that several months elapsed before a decision was arrived at. The vessel could not be definitely accepted and taken over from the contractors until the necessary work of opening up her machinery, and other work incidental to completion, was concluded.

May I ask whether the "Afridi" did not attain the necessary speed which was guaranteed?

She obtained a sea-going speed of 32¾ knots.

Under the contract speed?

Yes, certainly. Her sea-going speed should be 33, and she attained 32¾ knots.

Did not the First Lord say she would be ready in June last?

I do not know.

asked the First Lord of the Admiralty if he will state whether Colonel G. T. Onslow has now been placed on the Reserved List of Colonels, Royal Marine Light Infantry; on what date the Order in Council was made; and to what date Colonel Onslow was antedated?

The answer is in the affirmative. The Order in Council is dated August 10th, 1909, and has effect from the 1st April last. The placing of Colonel Onslow on the Reserved List of Colonels is dated 11th April, 1909.

How could Colonel Onslow be placed on the list on April 11th when the list was not created until August?

The Reserve List was created under an Order in Council, which is dated 10th August. Colonel Onslow was dated back to 1st April, because that was the date at which he would have gone on the Retired List at the close of his commission.

This list did not exist in April, and how could he be placed on it when it did not exist?

Because the appointment was antedated.

It could not be antedated.

asked when the inquiry into the circumstance of the loss of submarine C 11 will take place; and if it will extend to the responsibility of a vessel cutting or breaking the line of a fleet when in motion?

A Court of Inquiry was held within a week of the sinking of the submarine by the "Eddystone," and the various questions arising out of the evidence given are under consideration.

May I ask whether the latter part of the question can be replied to?

The inquiry could not go into those questions. The Court of Inquiry would deal exclusively with the conduct of the ship itself, but certainly the Admiralty would undoubtedly take into consideration all the questions affecting the running down. The point I want to make is that the Court of Inquiry could not make that inquiry.

asked the Under-Secretary of State for the Colonies, if he can state when the Report of the Commissioners appointed to inquire into the importation of spirits into West Africa will be laid upon the Table of the House?

The Report is now being prepared for presentation to Parliament, and will be ready very shortly.

asked if any representations have been made by the Governor of South Nigeria to the authorities of Dahomey, French West Africa, with reference to raising the duty on imported spirits so as to check smuggling from French territory into British; and, if so, what reply has been returned by the French authorities?

The Governor of Southern Nigeria has not yet reported the result of the representations made by him to the Governor of Dahomey on the subject of an increase of the duties on spirits.

Can he say whether any representations will be made to the French authorities?

Perhaps my hon. Friend will put down a question on that subject.

May I ask if a representation was made by the Governor of Southern Nigeria to the French representative in Dahomey concerning the raising of duty from British territory?

The representations, to which alone this question refers, are as to the question of smuggling. Raising the duties in one part would be of no use if the spirits come in over the boundary.

asked the Secretary of State for Foreign Affairs whether any reply has been received to the communication recently addressed to the Argentine Government requesting detailed information as to the steps taken either by the federal or the provincial governments to deal with the suppression of foot-and-mouth disease; and, if so, will he state the nature of such reply?

The reply has not yet been received.

asked the Secretary of State for Foreign Affairs whether his attention has been called to the proceedings of an English company called the Peruvian Amazon Company; whether any report as to the alleged ill-treatment of British subjects from Barbados has been made by the English Consul at Iquitos; and whether he will call for a report on the doings of this company from the local English Consul at Iquitos?

asked if his attention has been directed to the charges made against the Peruvian Amazon Rubber Company, Salisbury House, E.C.; if he has been urged by the British directors of the said company or by any of the British shareholders to inquire of His Majesty's Peruvian Consul with reference to the same; and if he has acceded to their request, if made?

I had not heard of the existence of the company, and have no information about it. I will ask for a report on the subject.

Is the hon. Gentleman aware that the American Consul has already made a report to his Government on this company, and whether he can see his way to get hold of that report?

I was not aware of that.

Do I understand the hon. Gentleman to say that he has not received a request as to this company to inquire into the allegations?

That is so.

May I ask whether full publicity will be given in our dependencies in this part as to the proceedings of the inquiry?

I think the first step will be to obtain the report for which I have promised to ask.

asked the President of the Board of Education whether his attention has been called to the case of the headmaster of the national schools at Ashford, under the Middlesex County Council, who was convicted by the magistrates at Feltham, on or about 6th September last, of assaulting a little boy of 10 years of age, one of the scholars under his charge, by flogging him with great and unreasonable severity, and fined £5, being the highest penalty which the magistrates were competent to impose; whether he is aware that during the hearing of the case the vice-chairman of the school managers stated that when he was chairman of the school attendance committee the boy's mother was summoned before them for not sending her children regularly to school, and alleged as the reason that it was impossible for her to do so owing to the headmaster's conduct towards them; whether he will take steps to ascertain the extent to which the infliction of corporal punishment in the elementary schools of England and Wales prevents regular attendance; and whether he will prohibit the use of flogging in all schools under the direct supervision and control of the Board of Education?

I have communicated with the local authority with regard to this case and I am informed that it will come before a sub-committee on 18th October. I propose to postpone further consideration until a report from the local authority has been received. I know of no effective means of ascertaining whether the infliction of corporal punishment has any effect upon regularity of attendance, but I have no reason to suppose that the effect, if any, is appreciable. The answer to the last paragraph is in the negative.

Has the headmaster been dismissed, or will he be allowed to continue?

asked the President of the Board of Trade whether the receipts of the General Lighthouse Fund for the year ending 31st March, 1909, show an approximate surplus of £31,000 over the expenditure; and, if so, whether, having regard to the fact that the accumulated balance to the credit of the fund is over £500,000, he will authorise a further reduction in the light dues?

The reply to the first question is in the affirmative. In reply to the second question, I have already taken steps to reduce the accumulated balance of the General Lighthouse Fund by making a further reduction of 10 per cent. for three years from 1st April last, which makes a total reduction of 30 per cent. below the dues authorised to be levied by the Merchant Shipping (Mercantile Marine Fund) Act, 1898. For the five months ended 31st August, the additional 10 per cent. reduction has caused a reduction in the light dues collected of no less than £32,568 compared with the corresponding period last year. I do not at present see my way to authorise a further reduction.

asked the President of the Local Government Board whether he could state the number of persons who registered themselves for work during the first three days that the registers of the distress committees under the Central Unemployed Body were open; whether this number showed an increase in the number of persons driven to seek this form of assistance for employment; and whether he could state any additional provisions proposed by his Department for meeting the requirements of the approaching winter?

The number of persons registered during the first three days that the registers were open was 5,508, showing an increase of 1,767 persons over the number registered during the first three days last year. The Central Unemployed Body are making every endeavour to find suitable work for applicants who may be referred to them, and I shall be pleased to further their efforts so far as I can do so.

asked the President of the Local Government Board if he could state the total sum expended upon the administration of the Poor Law from 1834 to the latest date ascertainable?

The aggregate expenditure of boards of guardians and other local authorities in England and Wales, which is ordinarily classed as relating to the relief of the poor, during the period of 75 years ended at Lady-Day, 1909, was approximately £597,000,000.

asked the President of the Local Government Board whether his attention had been drawn to a report compiled from recent returns from trade unions and presented to the last meeting of the Oldham Trades Council, showing a high percentage of unemployed in the various trades, more than 1,500 persons being returned as out of work in the building and general trades alone; and whether, in such a case of exceptional unemployment, he was able to announce any adequate step to deal with it?

I have received from the Oldham and District Trades and Labour Council a newspaper cutting containing a copy of the report in question. I gather from it, not that there are more than 1,500 persons who are returned as out of work in the building and general trades, but that out of a total of 1,521 persons referred to as unemployed, 450 belong to the building and general trades. I am ready to consider any proposals I may receive from the Distress Committee for dealing with unemployment in the borough.

asked the Secretary to the Treasury whether he could state the number of detections for the evasion of Licence Duties reported by the officers of Inland Revenue, transferred by the Finance Act, 1908, Section 6, during the year ended 31st March, 1908; and whether he would give the amount paid in rewards for these detections to officers of the Inland Revenue in each of the following administrative areas, London, Manchester, and Birmingham?

(1) The total number of cases in which proceedings were ordered upon detections made by Inland Revenue officers of evasions of these Licence Duties in England and Wales in the year ended 31st March, 1908, was 23,820. (2) The amounts of rewards paid to officers of Inland Revenue in the collections of London, Manchester, and Birmingham for detections made in the above period were as follows: London, £2,826; Manchester, £191 10s.; Birmingham, £171 5s.

asked the Under-Secretary of State for India if the new Education Code for Bengal, which was to be introduced in January next, had been definitely withdrawn or postponed; and if he was in a position to state what the Government of Bengal proposed to do in the matter.

The Secretary of State has no information as to any intention on the part of the Government of Bengal to withdraw or postpone the Code. So far as he is aware, they propose to bring it into force on 1st January next.

asked the President of the Board of Trade whether, seeing that the Departmental Committee on Light Dues, appointed in 1894, in their Report deprecated the accumulation of any balance exceeding £100,000, be could say why the balance standing to the credit of the General Lighthouse Fund had been allowed to grow until it amounted approximately to £529,000, instead of being applied to a reduction in the dues?

With the object of reducing the accumulated balance the dues authorised to be levied by the Merchant Shipping (Mercantile Marine Fund) Act, 1898, were reduced by 12½ per cent. in 1903, and by a further reduction of 7½ per cent., making 20 per cent. in all, in 1907; but these reductions of dues were more than counterbalanced by the increase of shipping tonnage which took place and on which dues are paid. A further reduction of 10 per cent., making 30 per cent. altogether, came into operation for three years from 1st April last, and unless the tonnage of shipping increases at a more rapid rate than appears to be the case at present, it is anticipated that the effect of this reduction will be a large diminution in the amount of the accumulated balance.

asked the President of the Board of Trade if he was now in a position to state the reply given by the Great Southern and Western Railway Company (Ireland) to the complaint made by the travelling public that they make no provision for heating third class carriages on most of their trains, and prohibit their servants, without obtaining special leave, from supplying third class passengers with foot-warmers; and could he state the nature of the communication made to the railway company by the Board of Trade?

A copy of the hon. Member's previous question was sent to the Railway Company for their observations, and the Company replied that it was not usual to supply foot-warmers to passengers travelling third-class over their system. On receipt of that reply the Board of Trade wrote to the Company asking for fuller information, and when that information is received I will communicate with the hon. Gentleman again.

Will the right hon. Gentleman see that the company does not delay giving a definite answer until Parliament rises? Those of us who have to travel third class on this system suffer intensely.

Parliament is having an extended sitting this year, and I hope the reply will be received in time.

asked the Chief Secretary to the Lord Lieutenant of Ireland whether he would give the date of the application of Thomas Robinson to the Estates Commissioners for reinstatement in the farm on the Bruen estate, county Wexford, from which his mother was evicted in 1879; whether the special circumstance which led or induced the Commissioners to sanction an advance of public money to the extent of £2,350 to Thomas Robinson, who possessed over £3,000, consisted in the fact of his having been a land steward in the employment of Lady Kingston; and whether it was to be regarded as part of the policy of the Estates Commissioners, when they acquired untenanted lands, to provide for employés of the landlords by the use of public money which Parliament intended for other purposes?

The date of Thomas Robinson's application for reinstatement was 31st October, 1908. I have already stated that Robinson was one of nine persons who were allotted farms upon untenanted land purchased by the Estates Commissioners from the Countess of Kingston. Robinson, who was manager of the lands on the Kingston estate, in which the farm allotted to him is situate, was being partially deprived of his employment because of the sale of the estate under the Land Acts, and the Estates Commissioners, therefore, regarded him as having a special claim for consideration. He was fully qualified to receive an advance by reason of the fact that he was the representative of an evicted tenant. It is the practice of the Estates Commissioners to give special consideration to the claims of persons who lose their employment upon the sale of an estate, assuming that they are qualified to receive advances.

asked the Chief Secretary for Ireland whether he is aware that the family of Mrs. Mary Kelly O'Donnell, of Kilkee, were evicted out of their holding near Milltown Malbay, on the estate of Mr. Stackpool, of Edenvale, Ennis, about 20 years ago, and that a claim in respect to this family was registered under the Evicted Tenants Act; and whether he will indicate what steps have been taken by the Estates Commissioners either to reinstate this family in their former holding or to provide them with an equivalent farm?

Mrs. O'Donnell's application for reinstatement was not lodged with the Estates Commissioners within the time specified in the Evicted Tenants Act, and cannot be dealt with by them under that Act.

Robinson's was.

asked the Chief Secretary whether he is aware that the vestry of the Raphoe Cathedral, East Donegal, have asked the Local Government Board to inquire into the unsanitary condition of the graveyard in the cathedral grounds, situated in the centre of the town, and condemned as unsanitary 30 years ago, and though there is not an unoccupied space for a grave in it, burials are continually taking place; whether the health officer has recently advised an inquiry and reported the greater part of the graveyard congested and a menace to the health of the community; and whether, seeing the danger to the inhabitants and that the Local Government Board has either neglected or refused to hold an inquiry, he will at once take steps to have an inquiry held in this matter and thereby allay the fears of the people?

The Local Government Board received a representation on this subject from the select vestry in 1906. The medical officer of health has never made a report describing the condition of the graveyard as a menace to the health of the community. In his last report he stated that he could not condemn it as congested, save in so far as it was used by strangers, and added that there was room enough to bury those who had burial rights. In view of the opinions expressed by the responsible medical officer of health the Local Government Board do not think that any good would result from holding an inquiry.

asked the Chief Secretary whether he will give information as to the number of police stationed at Kinlea hut, West Clare; the average amount claimed by them for cycle riding and car hire; and the average extra expense per month to the ratepayers involved in this station?

I am informed by the Constabulary authorities that there are seven police stationed at Kinlea hut, three of whom are in excess of the fixed strength of free constables. The average claim for cycling at the station is £2 16s. per month, and no car hire is incurred. The charge to the county for the extra men is about £8 12s. per month—that is, about £2 17s. 4d. per man.

May I ask whether the right hon. Gentleman hopes to be able to remove these police after the passing of the Irish Land Act?

Well, Sir, I hope; but I am sorry to say that my hopes cannot be expressed in language.

asked the Chief Secretary whether he considers the maintenance of the police station at Kinlea to be now necessary; whether he will state the grounds on which it is maintained; whether he is aware that protests against its continuance have been made in various forms by representative local men; that the irritation caused by the presence of the police tends to produce an effect contrary to the peace of the neighbourhood; and whether he will direct that the instructions establishing the police at Kinlea be rescinded?

I am informed by the responsible police authorities that the retention of the police station at Kindea is necessary for the protection of Mr. James Griffin, who was fired at and wounded last year. I am not aware that protests have been made against the continuance or that the presence of the police is a cause of irritation to anyone. I am not prepared to direct their withdrawal.

Does the right hon. Gentleman keep himself in touch with the state of feeling in Clare?

Oh, yes; I receive very frequent communications from county Clare, and generally from all parts of that neighbourhood.

asked the Chief Secretary for Ireland whether his attention has been called to proceedings at Knock Petty Sessions, which resulted in two men employed on the farm of Mr. James Griffin being fined for assault; whether he is aware that the men so fined were being escorted from the farm to their homes by three police officers, including Acting-Sergeant Thomas O'Neill, and that the acting-sergeant neglected to render assistance to the assaulted man, John Leary, who was seriously injured, but escorted home one of the defendants in the case; whether Leary asked the police to undertake a prosecution, but without result; and whether any action has been taken with regard to the conduct of the police?

I am informed that on the occasion of the assault for which the two men were fined Leary made a complaint to the police who were escorting the men. The police, after giving Leary every opportunity of identifying his assailants, saw the men home and then returned to his house to investigate the case further. Leary had not, so far as the police could see, received any wound or injury requiring their assistance. They were bound to protect the workmen, and the Inspector-General has no fault to find with their conduct.

May I ask the right hon. Gentleman if he has carefully read the evidence as given at the Knock Petty Sessions with regard to this case?

No, Sir, I cannot say that I have.

asked the Chief Secretary whether he has had brought to his notice the case of Sinon M'Grath, of Carrowmore, near Doonbeg, who was evicted from a holding of 4½ acres, of a rental of £2 16s. 4d., on 24th July, 1900; and whether he will state what steps have been taken by the Estates Commissioners to reinstate Sinon M'Grath, and when that event will take place?

The Estates Commissioners inform me that this man has applied for reinstatement in a holding on the Stacpoole estate. The Commissioners have decided not to take any action on his application until they are dealing with the estate under the Irish Land Act, 1903.

asked the Secretary of State for War if he will state whether there has been a military inquiry into the death of the Rev. Nigel Hodgson during the Territorial sham fight at Guisborough; if the inquiry located and identified the detachment from which the bullets came; if he is aware that seven bullets were fired from the same detachment; has any inquiry elicited how the seven loaded cartridges came to be given out to the men; and whether the result of any inquiry will be published in full?

A court of inquiry has been held. Although there is no actual proof, it appears probable from the evidence that some ball ammunition was used by the troops occupying the South Edge of Far Moor plantation. The troops in this plantation consisted of detachments of the 5th and 8th battalions West Yorks Regiment. There is evidence to show that three rounds of ball ammunition were fired. The evidence shows that no ball ammunition was issued, and that all the usual precautions prescribed by the regulations were observed. The question is being considered whether any additional precautions can be devised. It is not usual to publish the reports of courts of inquiry, but I shall be glad to give any information in my power to the hon. Member.

Is it not the custom to examine the pouches of the men before they go on manœuvres of this character, so that the presence of ball cartridge might be detected?

Yes, that is usual; and that was done in this case, and there was no ball cartridge there at the time.

May I use any information that the right hon. Gentleman gives me, because there is a great deal of feeling in the matter?

I will see the hon. and gallant Member later on in the matter.

Is there any information as to how this ball ammunition came to be used?

There is no information as to how the ball cartridge came to be used nor who it was that fired it.

asked the Secretary of State for War if he can state by what authority the body described in the Army List as Special Reserve, Irish Horse, has been raised and maintained; if by statute, what statute; and on what Army Vote are the charges for this body borne?

This body was raised and is maintained under the Militia and Yeomanry Acts, 1901 and 1902, Part III. of the Territorial and Reserve Forces Act, 1907, and the Reserve Forces Act, 1882, and subsequent amending Acts. The charges for it are borne on Vote 3.

Can the right hon. Gentleman tell us how the Territorial Act is applied to Ireland?

Part III. of the Territorial Army Act is the part that belongs to the Reserve Forces Act. The Act does two things. It also deals with the reorganisation of the Reserve Forces Act, and this Act applies to Ireland.

Do I understand the right hon. Gentleman that Section 34 of the Territorial Army Act repeals the Irish Volunteer Act of '75 and the Irish Yeomanry Act of '75?

So far as the Territorial and Reserve Forces Act makes modifications in the Reserve Forces Act, and in the Yeomanry Act, it applies to Ireland.

asked the Secretary of State for War whether the Army Council have considered the suggestion of a badge to be worn by official order at all times in public by the different classes of citizen soldiers; and whether they propose to take any steps in this matter?

The suggestion of my hon. Friend is an excellent one, and it has not been overlooked. The Army Council have under consideration the introduction of such a badge, and I hope before long to submit a suitable design for the King's approval.

asked the Postmaster-General whether the concession recently granted in respect of closing post offices in country towns at 8 p.m., applies to the summer months or to the whole year?

There is no rule on the subject. The course adopted in each case must depend on circumstances.

asked the Postmaster-General if he is aware that the National Telephone Company are reducing the staff employed on line work in Sunderland; that there is plenty of work to be done in this particular department; and, if so, can he state what action he is taking in order to see that the system is kept fully efficient up to the time of the taking over of the undertaking by the Government?

The reduction of the National Telephone Company's staff at Sunderland had not before been brought to my notice. If he will give me specific information I will make inquiries. As regards the general difficulties of the telephone situation and the steps I am taking to meet them, I would refer my hon. Friend to the reply given on the 30th ultimo to the hon. Member for Stoke-on-Trent, of which I am sending him a copy.

I desire to put a question to the Home Secretary, of which I sent him private notice yesterday. It is whether he has received an application from a firm of solicitors, acting on behalf of certain of the women suffrage prisoners in Birmingham, for leave to visit their clients under the provisions of Section 6 of Rule 72 of the Statutory Rules and Orders, 1899, and whether the application has been refused, and, if so, on what grounds? May I ask at the same time whether there are any further reports this morning as to the state of health of the women prisoners, and whether forcible means are still being used to administer food?

I will also answer the question of the hon. Member for Hoxton (Mr. Claude Hay). It is: Whether the Secretary of State has received an application for permission for a solicitor to visit any of the female prisoners at present detained in the Birmingham Prison for the purpose of consulting with them as to their legal situation, and whether the Government have granted the application?

It is the case that a firm of solicitors asked for permission to visit Birmingham Prison to interview the women prisoners who have been undergoing special medical treatment for self-starvation, and that permission was refused. I have received no application from these prisoners themselves; nor have I reason to think that this firm of solicitors is acting on their behalf. The ground for refusal of such applications is that all complaints about prison treatment have to be made to the visiting committee of the prison, who are specially charged by the Statutory Rules to hear and investigate them. I am advised that the objections of the prisoners' friends or associates to the medical treatment rendered necessary by their refusal to take food does not justify the assertion that any "legal business" exists within the meaning of Rule 72 (6) of the Statutory Rules for the government of local prisons. The visiting committee of the prison held a special meeting yesterday afternoon to hear the complaints of six of the prisoners who have refused to take food. All six were fully heard. They only made a protest against the fact that they were fed against their will. They all stated emphatically that they were treated by the wardresses and the prison officials with the utmost kindness.

Is the Home Secretary aware that these ladies contemplate legal proceedings arising out of what has taken place in the gaol, and whether in these circumstances this rule does not apply? The rule refers to a barrister or solicitor conducting any legal proceedings, civil or criminal, in which a prisoner is a party or bonâ fide acting as legal adviser to the prisoner. This firm of solicitors was acting for the ladies when they went to prison, and as they intend to take legal proceedings they desire to interview their clients to take their instructions.

The hon. Gentle man appears to speak for these ladies. I do not know on what authority he speaks for them?

I speak on the authority of local agents referred to—

That is a very different thing. I may be wrong as to the legal interpretation of the rule as regards people outside the prison who, of their own accord, desire to visit prisoners within. Proceedings can no doubt be taken on that point by those who wish to get leave. I only point out to the hon. Member, so far as I am concerned, the prisoners themselves made no application such as is conveyed by the hon. Member in his question.

May I ask whether a firm of solicitors are not allowed to make an application on behalf of their own clients, and whether that was not done in this case?

I have no knowledge of it.

Do you doubt the word of the firm of solicitors?

I doubt the word of nobody, but I have no knowledge as a matter of fact that the prisoners are their clients. In any case it is quite obvious that if an outside firm of solicitors demand to see prisoners in prison on legal business it is absolutely essential that those responsible should satisfy themselves that the legal business is bonâ fide and within the meaning of the regulations.

Would the right hon. Gentleman consider the advisability of appointing a small commission in lunacy to inquire into the lunacy or sanity of those people?

That comes badly from an Irishman.

moved, after Clause 13, to insert the following:—

This Clause purports to apply the principle of increments to minerals, and it will no doubt raise large questions of policy as regards the advisability of proposing this further duty in addition to the Mineral Rights Duty, as to the capacity of trade to bear it, and as to its effects upon industries. I do not desire to go into large matters of policy of that kind, but as this duty is a wholly novel duty I wish mainly to call the attention of the Committee to its actual working and to the direct results which it will produce, because while I do not deny it may be possible, though I think it would be rather difficult, to apply the principle of the taxation of increment of which we heard so much to minerals, I submit to the Committee that this so-called duty on minerals has nothing to do with the principle of the taxation of increment as has been so often explained to the Committee and the House, but that it is an arbitrary tax founded upon no principle at all, which would act in a most capricious and arbitrary fashion.

This duty is not concerned with minerals in current work. I therefore ask the Committee to take a case to which it would apply, which is the case of future leasing or working of minerals hitherto unworked. What tax will that impose upon a man letting or working his minerals? He has to pay an annual duty, which, roughly speaking, amounts to between the rent and two-twenty-fifths of the capital value. What will the duty be which the lessor of minerals will have to pay under this Clause? He will have first of all to start with the capital value of these minerals. It will be observed that in the addition which the Chancellor of the Exchequer proposes to make to Clause 15 he proposes to enact that in preparing the 1909 register no value at all shall be attached to any minerals which are not returned and valued by the owner of the soil in which they are. What position will that put the owner of the land in, in which there are or are supposed to be minerals? He will be put in this dilemma, that he must either go on the off-chance that he will some day have an opportunity of letting these minerals—he must go to the expense of testing his land, and fighting the matter out with the Com- missioners—or else the land will stand with the minerals unvalued in the 1909 register. It is somewhat of a hardship to call upon him to take the first course and go through all the cost of valuing his minerals. If he does not take that course, how will this Increment Duty on working minerals affect him? What will he have to pay? In the first year he will, of course, pay no duty, because it is payable on the last year's working. In the second year he will have to pay the difference between the rent he received in the first year and two-twenty-fifths of the capital value. He will, therefore, have to pay increment value in the second year on the whole of the rent he received in the first year at the rate of 4s. in the £, and that will apply year by year. The effect of this tax is that whenever minerals are let for the first time the owner will have to pay four shillings in the £ on the mineral royalties he receives. That appears to me to be a gross injustice, and I really doubt whether this Committee desires to impose on one special kind of owners of property any such burden as that without any reason and without any principle whatever. This charge will have to be paid quite apart from the Increment Duty, whether there is any increment or not.

I will now take the case of a mineral lease, such as the Chancellor of the Exchequer took as an illustration when he moved this Resolution. He took a mineral lease with an assumed capital value of £12,500, which is a convenient sum to take. I want to call the attention of the Committee to the amazing difference which his proposal introduces between the burden upon a man who lets his minerals and the burden upon the man who sells them. It is a commonplace to say that a mining lease is nothing but a sale of minerals. It is really a sale of minerals piecemeal. A man who has a seam may sell it for a lump sum down or he may sell it on a lease under which the lessee may take the minerals to any extent he pleases, paying for them at so much per ton. That is really a sale. I will take the Chancellor of the Exchequer's illustration and apply this Clause to it. How will it work? Supposing the man who owns a particular vein of minerals sells it out and out. I will assume there is an increment on the capital value of £2,500. The property has risen in value from £12,500 to £15,000, and it is sold at that price. The vendor will pay Increment Value Duty upon it—that is, he will pay one-fifth, amounting to £500. That is his position if he sells. Let us compare that with his position under this Clause, if instead of selling those minerals out and out he sells them piecemeal under a mining lease. I do not think "mining lease" is a good term to use. I will suppose he leases those minerals at £15,000, by which I mean he leases them at so much per ton as will bring in royalties by the time the mine is worked out to the amount of £15,000. What duty will he have to pay upon this income of £2,500, as compared with the £500 paid in the case of sale? That will all depend upon how soon his minerals are worked out, and it will not depend upon any question of increment at all. Supposing they are worked out in three years, and that the royalties work out at £5,000 in each year. What duty will have to be paid in that case? He will have to pay each year the difference between £5,000, the rent he received the year before, and £1,000, which is the annual equivalent of the capital value. He will have to pay £800. Therefore he will have to pay during the three years these minerals are being got, and during which time he is receiving £15,000, the sum of £2,400 in Increment Value Duty.

Let us take a more extreme case. Let us suppose that the lessee is able to work out the whole sum in one year and pay his £15,000. The only difference between the two is that in the one case the man is called the purchaser and pays in a lump sum, whereas in the other case he is called a lessee and pays by instalments. In each case the owner receives £15,000 and the community causes an increment of £2,500. The duty which the owner will have to pay if the seam is worked out in one year is £2,800. These are matters to which I wish to call the attention of the Chancellor of the Exchequer. I can hardly believe that I have correctly read this Section, and I should be very glad to hear that I have not read it correctly. That is quite possible, because I can hardly conceive such a result would be intended. The two questions I address to the Chancellor of the Exchequer are, in the first place, am I right in my reading of this Section; and, secondly, if I am right, are these conclusions really desired by the Committee? I will assume a case in which there is no increment. The only increment I can conceive in the case of a wasting property like some of those which are being worked is where the price of the commodity rises so fast as to more than counterbalance the abstraction from the corpus. That is the only possible increment I can understand as applying to a wasting estate. Take the case where there is no increment at all. During the whole time the lease is running the minerals are being worked, and there is no rise in the price of coal. I will take the capital value at £12,500. What is the Increment Value Duty—as the Chancellor of the Exchequer has had the courage to call it—which will be paid by the lessor in that case? It depends not so much on the kind of work as upon the regularity with which the work is conducted. Now, £12,500 is the capital value, and £1,000 is the annual equivalent of the capital value. If that seam is worked out in 12½ years with regularity, so that the royalties paid are £1,000 a year, no duty will be paid at all. If the seam is worked out in five years with regularity, so that the annual payment of royalties is £2,500, then the duty will be £300 a year, or £1,500 in all. If the seam is worked out in one year, the duty will be £2,300. I will not say it makes no difference to the lessor. He gets his money sooner, of course, and he gets the interest the money earns, but that is a trifle compared with these enormous differences of duty. He pays in all these cases the same amount in Mineral Rights Duty. The faster his property is taken away, the faster he gets his purchase money, and the larger the Mineral Rights Duty he has to pay.

I do hope some one will explain on what principle of reason or justice you are going to tax a lessor who leases his minerals at a given price nothing if it takes 12½ years to work them, and £2,300 if they are worked out in a year. It is quite obvious this is not a tax on increment at all. The case I have just put to the Committee is a case where there is no increment. It is not a tax upon increment; it is on the face of it a tax which has no connection with the price or the value of the coal. It applies equally whether the price rises or falls. It is a tax on irregularity of work, and on nothing else. If, in the case I last put, instead of the working during the 12 years being regular at £1,000 a year, it had been worked so that a small sum was obtained in one year and a large amount in the next, a large amount of duty would have been paid. If the working takes 12 years, and is regular, no duty is paid; but if the working is irregular a large amount of duty is paid, and the greater the irregularity the larger the amount of duty this extraordinary tax will impose upon the owner. That, as it appears to me, is the meaning of this Clause, and that is the irregular way in which it will work. I shall be very glad to hear if I am right in; my reading of the Section. If I am right, it appears to me, first of all, that this is not an increment tax at all, and that at has no relation to those theories, right or wrong, of an increased value accruing to a man's property for which he does not pay or work. It is a tax on the working of minerals, and it is a most arbitrary, fantastic, and unjust tax. I shall listen with great interest to hear what is to be said about it by the party opposite, and whether it is possible anything can be said for imposing upon the owners of a particular kind of property a tax so arbitrary and so absurd.

I do not know whether the Chancellor of the Exchequer proposes to rise at once or shortly to deal with the arguments of my hon. and learned Friend, but I would put in an appeal on behalf of the lay Members of the Committee that on this occasion of the second reading of the Clause the Chancellor of the Exchequer should give us some general explanation of its working and of its principles, which I am sure would lead to a legitimate discussion of its provisions. I do not blame the Chancellor of the Exchequer or the draftsman, but everyone will agree that the difficulties are very great. I defy any man without very detailed and profound study to say exactly what it does and what exactly it is intended to do. I am sure the Chancellor of the Exchequer would perform great service to the Committee if he would give us a general account of the principles underlying the Clause.

I do not propose to reply now to the very detailed questions put to me by the hon. and learned Gentleman opposite, but I will do so later on. If I were to follow a detailed consideration, it might take me away from the general consideration of this Clause. The right hon. Gentleman was not here when I explained the general summary of my view of what this Clause really means. I agree it is very complicated, but any clause dealing with mineral rights must necessarily be complicated. This is how it is proposed to work. In the case of a sale, it would be quite easy to charge on the capital amount of increment, but, in the case of a lease, it will be almost impossible. In the case of a lease with a royalty of sixpence per ton, and a dead rent of £1,000, no one can say at the time the lease is signed with any approach to accuracy what that really represents, be cause the amount depends exactly upon the yield of coal, and you cannot tell what the yield will be. There is, therefore, a difficulty in arriving at the increment on which you ought to impose the tax at the date the lease is signed. The Government consequently propose an Increment Duty in the shape of an annual tax. I will take the figure of £12,500, which is the very figure given by the hon. and learned gentleman. We first of all value all the minerals in England—

I do not interrupt except for the purpose of getting information. According to Clause 15, and an Amendment standing in the name of the Chancellor of the Exchequer, minerals are not to be valued unless the owner declares. The Chancellor of the Exchequer does not mean that all minerals which may exist in the country are at once to be valued. Value is only to be placed on what the owner declares.

That is purely a method of valuation, and we shall come to that point later on. That is the method we propose to adopt in arriving at the valuation. It does not matter from the State point of view what the valuation is, because there is no charge of a ½d. in the £ upon it. We invite the owner to declare whether he has got minerals, and what value he places upon them. Let us assume he values them at £12,500. We divide that by 12½, because that is the number of years' purchase which you place upon a mining property. I am advised that 12½ years is the average. Therefore, a mining property of £12,500 capital value, is worth £1,000 a year. You reduce your £12,500 to an annual value of £1,000. Let us assume that the owner of that mineral property leases it. There is a royalty of 6d. per ton and a dead rent of £2,000. The first year he only gets his £2,000. The royalties do not come up to £2,000, and he therefore simply draws his dead rent. The Increment Duty will be calculated in this way: You take £1,000 from £2,000, and that represents the annual increment for that year, and you charge 20 per cent. upon it. The Government will take duty of one-fifth on that £1,000. Next year the royalties run up to £3,000. You still deduct the £1,000, your original equivalent of site value, and for the second year you have an increment of £2,000, and you take a fifth on that. If the royalties go up to £10,000 you still deduct the £1,000, and there is £9,000 on which you take a fifth. If the minerals peter out there is an end of the colliery and of the increment. Supposing the increment were in any year to fall below £1,000 there would be no Increment Duty. We are charging the Increment Duty year by year on the difference between the annual increment site value and the mineral rents of that particular year. We charge one-fifth upon the difference between the anual equivalent of the original site value and the rents and royalties. On that we charge 20 per cent., and that is the proposition which we are substituting for the valuation of the increment at the date of the lease. But suppose the owner sells his mineral property for £15,000. There will be an increment of £2,500. The original value was £12,500; the property is sold for £15,000. We take the increment on the difference. I hope I have made the point clear.

Is there to be any subsequent occasion for valuation? Suppose the owner does not know he has got minerals on his land and does not consequently declare; but at some subsequent date he discovers the minerals. Will he have an opportunity of declaring the value later on?

The declaration of value is as from 30th April, 1909. Should an owner think he has no minerals worth declaring, and subsequently discover that he has, then of course he will not get the benefit of the original capital value, which, in the case of minerals, is equivalent to the original site value.

How long a period will be allowed him within which to declare the value as from April, 1909? He may not know he has minerals on his land. In such a case, will the Increment Value Duty be one-fifth of the entire rental?

The original capital value will be calculated. The number of these cases will be somewhat restricted. All minerals being worked on 30th April, 1909, will pay 5 per cent. duty. The Increment Value Duty does not apply to them at all. It is very important to keep that in mind, for then we shall see exactly the scope of the duty. The Increment Value Duty only applies to minerals which are not on 30th April being worked, and the expression "being worked" is defined very widely. It is assumed that minerals in the process of being worked are a waning, and not an improving, estate, and generally speaking that is true, although there may be some few exceptions where the increment is considerable. But you must proceed in these cases on general lines. The owner, however, must make up his mind to declare whenever the valuation is made as from 30th April, 1909.

There are two points which, in my opinion, do not agree. There is mention of a State valuation, which is to be all-embracing; and, again, the valuation is to be fixed except where the owner declares. These two do not seem to quite agree. We want to know whether there is to be a specific occasion, and, if so, when, when the State is to make an all-embracing valuation? Are the owners to approach the State in the first instance or is the State to approach the owner?

I think the hon. and gallant Gentleman is rather troubling about a difficulty which is not likely to arise in the working of the Act. Take the case of the owner who ignores minerals on his land and the case of the owner who thinks there are minerals and wishes to declare their value. In the case of the first owner he simply values the land, and if he chooses to make no separate valuation for minerals he gets no benefit from the original capital value when afterwards the minerals come to be developed. If he wishes to get his exemption he will declare the value of his minerals when the valuation comes to be made on 30th April, 1909. Of course, as to the date of that valuation one cannot describe it as an exact point of time; no doubt there will be some considerable time, and we have already discussed this matter on the antecedent clauses. Whenever that time comes he will either say he has mineral ground or he will say nothing about it. If he says nothing about minerals, then he does not secure himself the exemption if afterwards he discovers minerals and begins to work them. If he says, "I have minerals," then they will be taken into account, and for the purposes of valuation will be separately treated. The minerals will be treated as if they were a separate class, and they in each case will each take its own course. Of course, the interest of the mineral owner will be to declare minerals if he has them. He will be checked from putting on a very high original value by the Commissioners, but if he desires to have the original capital value fixed, of course he will move the Commissioners to that effect. If he does not desire to have the capital value fixed, having regard to the Death Duties, then the calculation will be made elsewhere.

So far as I understand the case I think it is quite clear, and from what the hon. and learned Gentleman and the Chancellor of the Exchequer have said, as far as I am concerned, their intention is perfectly clear. The point I did not gather, and which I see now, is that this Clause is to be referred back to the original increment value clauses, and the value which is referred to here is part of the valuation which we have passed in Committee on the other clauses. I mean the general clauses deal with the general value of the land, and this is only a special method of valuation which refers back to the valuation on the Increment Value Duty at the beginning of the first part of this Bill. That is so, is it not?

Yes, as I have defined it.

Then that clears up that point. I should like, if I may, to make one or two comments upon it. The learned Attorney-General tells us that it would only apply to a very small portion of the minerals, and that, I think, gives away the whole case for the tax. The hon. and learned Gentleman also told us that it would not apply to any minerals which were being worked, and as to them there will be an Amendment later, of which I have given the Chancellor of the Exchequer notice, which deals with that point, because it is quite obvious that the principle of Increment Value Duty cannot equitably apply to the lessor who has already parted with his rights before 30th April, 1909, to a lessee for a fixed sum. That does appear to me to be a principle which the Committee cannot equitably depart from. A man has parted with his property on definite terms already agreed to, the rate at which that property is going to be worked has entirely passed out of his hands, and he has no further control over it. The whole of that has been handed over to the existing lessee and it cannot increase in value to the lessor, and how can there be an increment to him when he has already sold his rights under a mineral lease? The word "lease" in the ordinary sense of the term does not apply to minerals at all. It is merely a popular phrase, and it is not a lease in any proper sense of the word; it is an absolute sale out-and-out over a period of years for the whole of the minerals in a certain area of land, and when a man grants a mining lease it is just as much a definite sale of minerals under that land as when a man sells a piece of land. [HON. MEMBERS: "No."] Yes, of the minerals qua minerals, although there are certain differences due to the character of the article. He may not get minerals, and if he does not that is his look-out. If he does not get minerals there is no duty, but so far as any minerals which the lessee does get the duty is to be paid out of them. Where minerals are got the duty is paid, and I am quite sure that it will not be maintained for a moment that, having regard to those minerals which are got, there has been anything but an absolute sale from the so-called lessor to the so-called lessee.

I think the hon. Member is quite wrong in that assumption. There may be cases where the owner may receive very large sums of money where no coal is got at all.

There might be a dead rent on minerals which are to be gotten, but I believe it is universal that where there is a dead rent overpaying the amount of minerals obtained the sum may be made up in subsequent years. If only £1,500 worth of minerals are got, and there is a dead rent of £2,000, the balance can be made up in subsequent years.

In South Wales the general practice is six years to recover, in the Midlands over the whole of the lease, in the North of England a short time, and in Scotland a shorter time.

It is three years in South Wales in many cases.

That is merely a detail; the point is this in regard to the whole question as to minerals to be sold and gotten that where there is a dead rent, and it is in excess of the minerals gotten, the amount can be made up under a fair bargain. Of course there are cases where the lessee or purchaser has made a bad bargain—nothing more nor less—and you may come upon any vendor or seller and tax him upon the ground that the lessee happens to make a bad bargain. That does not touch my argument one way or another. The point is this: that an actual sale has taken place of minerals, of course at the risk of the purchaser, from the vendors or their agents, and under the name of a lease the so-called lessee buys the minerals, and the lessor has parted with them, and has no interest in them whatever, and no power of saying how they shall be worked. How can there be increment in such a case?

He has powers of regulating the working.

There are no doubt certain minor regulations which may be made, but at present it is in the interest of the vendor, as well as of the purchaser, that these minerals shall be worked as soon as possible. Will any hon. Member tell me of any condition inserted in a mining lease in which the lessee has been limited in the amount which he may work in the year? No one can tell me of such a case. What is going to happen under this tax, taking the Chancellor of the Exchequer's own case, is clearly that you are putting an immense handicap on the people who are going to take minerals in future, and the owner of those minerals is going to have an interest in asking that they should not work more rapidly than will enable him to avoid the payment of the Increment Value Duty. Another point will arise on that. Does the owner have the same interest as he had before in getting his minerals worked as rapidly as he can? What he will do and what it will be the owners' interest to do will be to say to the lessee, "The annual equivalent of these minerals is £1,000, so long as you do not work over that I shall have to pay no Increment Value Duty, and, if you do go over that, you will have to pay me some portion of that duty which I shall have to pay." I think when the hon. Member for the Mansfield Division (Mr. Markham) takes his next mineral lease, if this duty is passed, he will have to meet this. I do not say that the lessor will be able 60 extract the whole 20 per cent. from him, but he will be able to extract something, and that will depend upon the state of the market at the moment, how eager the vendor is to sell, and how eager the hon. Member is to buy, but there will be a tendency on the part of the owners or their agents to regulate the output so that the Increment Duty will not fall upon them. That is the view which is pressed upon me by one of the most capable men in the Kingdom in regard to these matters, and here the Government are giving a direct incentive —we do not put it higher than that—and making it to the interest of the vendor to take the course which I have suggested, and is that, I ask, to the advantage of the industry? Will that tend to the increase of the output of minerals, and will that increase labour? To my mind, it is a direct handicap and must act as such, and certainly those who are interested in minerals and who have negotiated with the Chancellor of the Exchequer understood that the Mineral Rights Duty was in substitution of all those fantastic duties which they could never understand. I do not accuse the Chancellor of the Exchequer of bad faith for a moment, but that was the understanding in the minds of those who have been negotiating these Mineral Duties. The Chancellor of the Exchequer has stated in this House that he has given up the Reversion Duty and the Undeveloped Land Duty. The Undeveloped Land Duty he could not collect from minerals because it is obviously impossible to value upon that basis.

That is not what I said. I said I would give up the Reversion Duty and the Increment Duty on existing mines.

The Undeveloped Land Duty has been transferred into this duty but it has been doubled, and it has been doubled, the Chancellor of the Exchequer says, in consideration of his having given up the increment value on minerals now worked. There could never be any Reversion Duty upon an expiring mineral lease.

It by no means follows that when a mineral lease expires the minerals are all worked out. They may be left there with the machinery and valuable equipment.

I can hardly suppose that the Attorney-General will suggest that the minerals in the mine can be worth more at the end of the lease, having been partly worked out, than at the beginning.

The question put was not whether they were worth more, but were worth enough to give a Reversion Duty.

The Reversion Duty is on the difference in value between the property at the end of the lease and the property at the beginning of the lease, and in order to get the Reversion Duty the Treasury will have to show that the value of the minerals in the mine is greater at the end of the lease than at the beginning. I can imagine such a case, but it must amount to almost nothing. Surely the Treasury cannot attach much value to that. The giving up of Reversion Duty cannot surely be considered as a boon. In order to assume that, you have to assume that the lessee will take the minerals in the mine for such a short period and on such terms that he is going to leave a greater value of minerals in the mine, including the value of his plant and shaft, at the end of his lease than he has got out during the whole currency of his lease. That is really inconceivable. You cannot have a more businesslike, capable body of men than mining lessees, and I cannot imagine that any mining lessee will tell us that that is the principle on which he works a mining lease.

It is often the case that, while you are working a mine, you go on and open it up, and at the end of your lease there is a much larger amount of minerals opened and ready for working than at the commencement, and that adds to the value of the mine. It is frequently the case that a mine is worth a great deal more at the end of the lease.

I am certain the hon. Member's facts are accurate. The Reversion Duty, however, is on the lease, and not on the mine. In the particular case that the hon. Member states, the Reversion Duty will be charged not upon the value of the mine or the actual minerals which are discovered after the first lease has been worked, but on the value of the property actually the subject of the first lease. Does the hon. Member suggest that the particular minerals which were the subject of the first lease, having been worked out, would be worth more at the end of the lease than at the beginning, or does he suggest that if the other minerals were included in the lease the lessee would leave them there for the lessor?

You can only work minerals at a certain rate, and it is very often the case that a larger extent of minerals is opened up and prepared for output at the end of a lease than at the commencement, and if a man spends money in opening up a colliery that is probably what will happen. Take the position of the lessor. He will have a largely developed mine which has been opened up well, which he can, of course, let on better terms for himself. He is in a much more satisfactory position for making a good bargain for himself at the end of the lease.

I agree with that, but I do not think it touches the point. The point was whether Reversion Duty would be payable, and in such a case as the hon. Member has suggested there would be no Reversion Duty.

It is exactly the same case as that of a ground landlord who, at the end of the 50 or 60 years for which the land has been let on a building lease, finds himself the owner not only of the site but of the site with a house on it. So at the end of the first lease, instead of being the owner of an undeveloped royalty, the lessor is the owner of the developed mine.

That may be morally the case, but it would not be the fact. Reversion Duty would not be payable for this very simple reason, that in the first case what fell in for the landlord in the case of a house would be the actual subject of the original lease increased in value, therefore Reversion Duty would be payable upon this increased value at the end of the lease as compared with its value at the beginning. What falls in in the case of a mine is not the subject of the original lease. What was leased in the original lease is a certain proportion of the minerals in that mine, and in opening up those minerals other minerals are discovered, but they were not the subject of the lease. I agree that the position of the lessor would be greatly improved, but he would not have to pay Reversion Duty. It is my opinion that the Reversion Duty would at any rate be extremely small which has been given away, and the Increment Value Duty has been surrendered already on mines which are being worked, and it is now proposed to adopt this extremely complicated and difficult method of charging it only on mines which are to be opened up in the future. I think it is a very unnecessary proceeding. According to the Attorney-General it is going to produce very little.

I have not said so.

The hon. and learned Gentleman said there would be very few cases.

No, I was merely dealing with them in comparison with mines which are being worked.

If there are a great many cases it will be a very great hardship, and it will certainly act as a factor in preventing people from developing their minerals, and a very considerable factor. I do not say it will prevent a man who has very valuable minerals. He would naturally like to develop them, and receive a rental for them, but you cannot look upon this tax by itself. A man who is going to develop minerals will look over the whole field, and will ask himself what he is going to get by developing the minerals on the one hand, and what disability and liabilities he will incur on the other. On the one hand he will get his mineral rents, but he will have to pay upon them Death Duties, Income Tax, and this new Increment Value Duty, which will amount in itself to 4s. in the £. There must be a very large area of land where the owners are not at all sure they have minerals. If they only think they have minerals it will be a good number of years before they can be worked at all, and it lies under their own control whether these minerals are ever worked or not, and until they can see that they are really going to get some advantage out of it they will not have their property spoilt. If they declare the minerals they might have to pay heavy Death Duties upon sums which they have never received, and later on if they do declare them they will have to pay 4s. in the £ on whatever is received as Increment Value Duty. In addition to that they will be liable to Death Duties and to a 1s. 2d. or 1s. 8d. Income Tax, and on the whole, in a good many cases, the man who would develop minerals now will not develop minerals in future. It must act as a deterrent. When a man is considering whether he will work minerals or not his mind is on the balance, and he has certain considerations in one scale and certain considerations in the other. You are putting into the scale against the working of the minerals a very considerable weight which is going, to my mind, to do a great deal more to check the development of the mineral industry than it is going to bring to the Exchequer, and in that way it will lose the Exchequer more revenue. You cannot have all your taxes over and over again on the same money, and if, by putting this tax in one form, you are checking the industry, you are by that very means reducing the yield of other taxes which the profits of that industry would pay, and you are so injuring the Exchequer as well as the trade and industry of the country. I believe, from the point of view both of industry and of the Exchequer itself, the tax is a very unwise one, and the Chancellor of the Exchequer will be very wise to drop it.

The hon. and gallant Gentleman is so very well informed about the development of agricultural land and building land—in fact, there is no Member in the House who knows more about it, and no one better entitled to speak on these subjects—that really I think the only excuse for the speech he has delivered on mineral royalties is that he knows absolutely nothing about mines and quarries, otherwise I cannot imagine an hon. Member of his ability and genius making some of the observations he has made. He has said this tax is going to prevent these people from developing their mines. Here you have property which for agricultural purposes, as a rule, is almost worthless. It is generally poor hill country in Wales at from 10s. to 12s. an acre. But let us assume that it is rich agricultural land worth £2 an acre. The owner will get for 1,000 acres of that land, let us say, about £2,000. If, on the other hand, it is in our part of the country, he gets something like £700 or £800. He has got minerals underneath, and someone comes and says, "I am prepared to spend a quarter of a million in opening up this property. I shall probably be able to raise coal which will give you £5,000, £10,000, or perhaps £60,000." But the landlord says, "I would rather have my £800 a year as an agricultural landlord than £48,000 a year because I have to pay something to the State." If the hon. and gallant Gentleman owned mineral properties I do not think that is the view he would take of their development. Let us take other cases, which show how really absurd the argument of the hon. and gallant Gentleman is. He is a keen business man, and the proposition he puts is this: Supposing that you spread the production of the coal over 50 years, and if you say to a man that he must not put out more than 40,000 tons a year he escapes duty altogether. Who is going to do it? Is it the owner who is going to say to a man that he will give him a lease, but that he will not allow him to produce more than 40,000 tons a year? Can he find any man in the country who would be prepared to sink shafts, put up machinery, lay down railways, and incur the whole of the equipment cost, which might run to £250,000 or £500,000, and all for the privilege of raising at the outside 40,000 tons a year and not a grain beyond that? I think I have shown to the hon. and gallant Gentleman how grotesque an argument of that kind is.

May I protest against the Chancellor of the Exchequer's perpetual parodies of the arguments used on this side of the House? What I said was that if the royalties were more than £1,000 the landowner would have to pay in respect of Increment Value Duty, and from that point of view it would be his interest to limit the output of the minerals, but that from the general point of view it would be his interest to have a large output. That would induce him to take the action I suggested, and to say to the lessee, "If you put out more than 40,000 tons, you will have to pay something of the Increment Value Duty."

The hon. and gallant Gentleman said that this tax will act as a factor to prevent the de-development of minerals properties. That is a point which he elaborated at great length and endeavoured to drive home. He said that if the lessee simply spread the output over 50 years, there would be nothing to pay. No one would take a mine on such a condition, for the simple reason that it would not pay him. What is the royalty? Sixpence. Is the lessee going to do what is suggested in order that the landowner may avoid a tax of one-fifth of sixpence? To produce only 40,000 tons would not pay the winding alone. Really the hon. and gallant Gentleman does not know enough about minerals and royalties to discuss the economic effect of this tax. If he would pay a casual visit to the mining estates and ascertain the real facts, he would never embark in criticism of this ludicrously irrelevant kind. His proposal is one which no business man would say should carry the weight of a feather with anyone who is supporting the imposition of this duty.

The Chancellor of the Exchequer has reproached my hon. and gallant Friend (Mr. Pretyman) for having a more limited acquaintance with mining than he has with urban land development and agriculture. That may be true. I am afraid that if my hon. and gallant Friend is ignorant, I am still more ignorant. I have not even the qualification which the right hon. Gentleman kindly attributed to my hon. and gallant Friend of being a business man. I am afraid I cannot claim any such title. I have listened to the Debate, and I must say frankly that I think the right hon. Gentleman has not met my hon. Friend's point. What he has done is to take the extreme case which was suggested, I admit, by my hon. Friend, and to say to him that the motive in that case for not raising minerals would not be sufficient. That really is the whole of his argument. It is no answer to the point raised by my hon. Friend. What the Chancellor of the Exchequer has got to answer are the two points which have been raised this afternoon. One was raised by my hon. and gallant Friend (Mr. Pretyman), and the other by my hon. and learned Friend behind me (Mr. Salter). An answer was promised by the right hon. Gentleman, but no answer has yet been given. The two points are: You are here imposing a tax which, in so far as it acts as a motive at all, win act as a motive against the rapid development of minerals, and will be a motive which will enable the lessor of minerals to throw part of the burden of the tax on the lessee, which I do not believe to be the object of the Government. My hon. Friend's argument was somewhat different. He pointed out that actually the same mine leased by the same lessees, and tinder the same conditions, would pay a totally different tax according as it was worked regularly or irregularly, fast or slow. Why should it pay an entirely different contribution to the Exchequer when worked in a different fashion by people who do not have to pay the tax? You might have said to the lessee, "If you choose to work the property in this way you must take the risk yourself." I think that would be a wise provision.

The proposition which the right hon. Gentleman lays down is that the contribution will be different according as the mine is worked regularly or irregularly. Will he explain how that arises?

I am afraid that my knowledge of the subject is not so intimate as that of others who have taken part in the Debate. My hon. Friend's argument was this: There is an Increment Duty charged on the difference between what a man gets from a mine as compared with some initial rent called the annual equivalent, which is arrived at by one of those hypothetical calculations with which we have become so extremely familiar in this Bill. There is a supposed annual equivalent of the value, and if in any year the value exceeds that data line it count's as increment on which taxation has to be paid. If the initial value was £1,000, and if nothing more than that sum was ever got, the owner of the mine would never pay the tax at all. Remember the property is precisely the same, and he ultimately gets the same value for it. It is a property for which the Government admit the owner will ultimately get the same value in cash. If the annual value does not reach £1,000 he pays no tax, but if in the second year he gets £3,000 he suddenly finds himself liable to a heavy tax, and if in the following year the value goes back to £1,000, he pays no tax. In this way you find that the sum paid for taxation on the same property would be different if it be worked regularly or irregularly, quickly or slowly. I never heard of a tax being laid on in this manner. Why should a man who has parted with his property be liable for a larger or a smaller tax because, having let that property, somebody else for his own purpose, or possibly by the hard necessity of his own position, works the mine sometimes slowly and sometimes fast, according as he chooses to work slowly or fast? That is the point which was put to the Chancellor of the Exchequer. I hope I have made it clear. It is no reply, I venture to say, for the Chancellor of the Exchequer to take the extreme case which was put by my hon. and gallant Friend and say that it is a case which cannot occur, because the motive of the lessee would prevent it from occurring, and to dismiss the whole argument with a few gibes of that description. The case is far more substantial than the Chancellor of the Exchequer seems to think, and so far he has made no attempt to reply to it.

I think the Leader of the Opposition lost sight of the Super-tax on incomes. You might as well say that it is not for a man's advantage to have £6,000 if by keeping his income under £5,000 a year he will be able to escape the Super-tax. The same argument applies in that case as in the case of the limited output of the mine. When it is said that a man's income is within his own control, I would point out that it is within the power of a landlord to say to a lessee, "You must work the minerals as rapidly as possible." In most mining leases there is a provision as to the way in which the minerals are to be worked.

I am sure the hon. Member opposite knows far more than I do on the subject of mining. But surely, when coal is worked slowly, it is the same thing to the owner, except in so far as the loss of interest is concerned.

I think that in many cases the burden of the Increment Duty will fall upon the lessees, who will put it upon the general public. That will entirely depend on the feeling of the market at the particular moment. If several men have coal to sell, and if several people require it, the sellers will be able to make better conditions. The landlord may say to the lessee, "You must pay all the Lloyd-George taxes if you wish to get the mining lease, or to get an extension of your lease." That undoubtedly will be so. Whether the lessor will be able to get a higher price depends entirely on the state of the market, and it is very doubtful whether the landlord can get that extra amount. The hon. Member has stated that this Bill would tend to be a handicap on rapid working, and would be a hindrance to the trade. I can only speak for myself. I do not know a single case where any man would refuse to take a lease of minerals on account of a tax of a penny a ton. There is no case within my knowledge of where anyone has broken off a negotiation on account of a tax of a penny. The Bill provides that no Increment Duty shall be paid in the case of mines which were being worked on 30th April this year. There are no doubt many oases where mines or minerals were leased prior to 30th April, but which are not being worked. In those cases, according to the Bill as it at present stands, the lessor will have to pay the Increment Duties because those mines are not being worked. In the Definition Clause, which is a very curious Clause, certain mines within a radius of a certain rent, as far as I understand, are excluded, and will not pay the Increment Duty. There are many cases in this country where a mine has a large area, and in these large areas of coal there may be sandwiched in certain areas of coal which cannot be worked for 20 or 30 years. The value of those minerals is very small, but when they are reached the increment then will become a reality, and, of course, the landlord will then begin to receive large sums by way of royalties in respect of this coal, and increment will accrue. But under the Bill he does not pay duty, save on the mines which were worked prior to 30th April.

The hon. Member seemed to think that the royalty would only be payable on coal worked. He is quite wrong in that. I gave the case of the Duke of Newcastle. What I said was that there was a very large mine on the Duke of Newcastle's estate, and the minimum rents in respect of that area amounted to £10,000 a year. A hundred thousand pounds represents the sum the landlord has received over and above what he would have been paid if the royalty had been taken on a poundage royalty. I do not know what the rent is in this particular case, but if you take it at 6d. a ton then the mineral rent is £10,000 a year, and they continue to pay an additional 6d. for every additional ton. I say that in this case the landlord has received £100,000 over and above what would be represented by the amount of coal raised. I think I am quite right in saying that 50 per cent. of all the mining leases in this country are overpaid in their royalty. In my experience of mining leases I do not know one case of a colliery owner with overpaid royalties who has not paid for more coal that he has actually been able to get, because the lease always reserves a higher rent. It reserves the maximum rackrent he is able to get.

But the point I want to raise now is an entirely different one, and one which was not mentioned by the Chancellor. When a lease is taken it is in most cases taken for a particular seam. When that seam is worked out after the lease expires, the landlord has the shaft and the rights of purchasing the machinery, and there is a certain amount of Increment Value, not a very large one, which arises in respect of this. What I want to know now is what does "minerals" mean under this Bill? I do not want to be pulled up by the Chairman and to be told that it is a matter for the Definition Clause. But I wish to know, Does it mean all seams of coal or only one particular seam of coal comprised in a mining lease? Are all the others excluded? I do not know any case in my experience where there is not a number of seams. You will in all cases have several seams. All these secondary seams which are being worked to-day had no value 40 years ago; and it is only according as the seams above are worked out that the lower seams come into the market. When this valuation comes to be taken, am I to understand that in all the mines in England a valuation will have to be made for seams of all kinds in those mines which are not under leases, because I think it naturally follows that if the Chancellor does not do that he will lose a great deal of the tax? There are some cases, but not many, where the lessee has all the seams. In Wales it is a general practice to lease most of the seams, but in the whole of the Midlands, in Warwickshire, Derbyshire, Nottinghamshire, and Staffordshire, it is the specific seams which have to be leased. Perhaps a second seam is included in the lease. But all these other seams are excluded. In many cases there are as many as 10 and 15 seams of coal under the seam areas which have been let and are worked by the owners. Are all these cases to be valued—because it is impossible to put a value on any of these seams—and, if so, is each particular seam going to be valued?

How can you value all these different seams when you do not know the distances? Will the owners of the minerals be entitled to say, "I am going to assume the value of the coal for a particular seam," because it must be for a particular seam? He will give a reason in many cases by saying, "There will be a seam of coal underlying my property which, according to mining experience and according to what I have been able to gather from adjoining proprietors, should have a certain amount of coal there." What I want to know is whether the owner of the minerals will be entitled to say, "For the purpose of my valuation I claim that there is a seam of coal lying 300 or 400 yards below the present seam and I want a valuation made?" Has the Government to value four or five different seams of coal below and put a certain specific value on each? And if any of those seams do not prove valuable, the landlord may say, "I will not put a valuation on it at all." But if he does, will he be taxed in respect of the particular seam of coal which he has valued and paid Death Duties on, which, if the seam does not prove to exist, he will have paid wrongly to the State? Because, if so, I do not think you have a right to tax a man on increment value on a seam of coal which does not prove. There are so many different seams of coal underlying all properties that I would like to know whether, after the passing of this Bill, all the seams in the United Kingdom are to have a valuation made of them except the ones under lease? It is a very important point, which perhaps the Chancellor will reply to when he has considered the matter. So far as the quantity of the minerals leased is concerned, I think there is a certain mistake about it. I was not in the House at the time, but I understand that there was a statement made that the bulk of the minerals of this country were leased. I do not think that of the various seams of coal 1 per cent. of the minerals of this country are leased; and probably 99 per cent. of the minerals of the country have yet to be leased, because only one seam out of 10 or 20 is comprised in the ordinary mining lease over the whole of the United Kingdom. I should be much obliged to the Chancellor if he would answer these points which I put to him in respect of the new valuation.

I have some difficulty in replying to the hon. Member opposite, because my knowledge is only secondhand, but if the Committee will remember that the hon. Member only represents the coal mining industry in one part of the country, and that the practice differs in different parts of the country, they will not attach so much weight to his words as they otherwise would do. He says that the seams only are let in mining leases. With confidence I can say that in the counties of Durham and Northumberland all the coal is let in mining leases, and the remarks of the hon. Member must not be taken to apply in these counties, which produce a large quantity of the coal of this country. He said that most royalty owners paid more in royalties than they received in coal.

I did not say so.

I thought he did say that very often they did pay more than they received.

What I said was that I know of cases where the lessee has overpaid dead rents in respect of mining leases for more coal than was produced.

In the counties of Durham and Northumberland the dead rents are always merged in the royalty, and it is quite the exception for the lessee to pay for more coal than he has got. We have also had remarks from hon. Friends on this side of the House about the working of coal which are hardly practicable. The output of coal does not depend upon working fast or upon working slow. The lessee takes into consideration in the working of his mine what shall be the output when the price of coal is low. The output depends upon that and other considerations, and it is on these considerations that depends whether a colliery is worked fast or slow. The right hon. Gentleman the Attorney-General told us that all the minerals of the country were to be valued, and that it would be in the interests of the owners of minerals to return a high value. He said it did not matter about the Death Duties.

No, I did not say that.

The hon. and learned Gentleman said that it would be to the advantage of the proprietor to return a high value for his minerals. I want to ask him about quarries. I have myself a property which I should return, if I valued it for minerals, as nil. There are some stone quarries which may be used, and I have myself occasionally used them, for the purpose of obtaining stone to build farmhouses or cottages on the estate. I want to ask the Attorney-General whether, when I open the quarry for the purpose of obtaining stone for the purpose of building these farmhouses and cottages, I shall have to pay 20 per cent. to the State for working the quarry? Under this Clause I am not sure that would not be the case. For the Chancellor of the Exchequer to get up and say that this tax will not be a hardship on anybody in this country would surely be a mistake. Twenty per cent. is taken by the State from the proprietor who chooses to work his own minerals.

Twenty per cent. on what?

Twenty per cent. on the value, I suppose. The proprietor who works his own minerals is not exempt under this Clause, and the right hon. Gentleman acknowledges that he is in exactly the same position as the lessee, therefore any man who works a quarry or any other mineral, whether for sale or for the purpose of his own estate, will have 20 per cent. to pay to the State. That will be a handicap on the production and development of minerals in this country. I maintain that under this Increment Value Duty the man who works his own minerals, whether for sale or for the purposes of his estate, will have to pay 20 per cent. to the State.

I wish to ask the Chancellor of the Exchequer one or two questions on matters which seem to be in doubt, especially that which relates to the Reversion Duty. As far as everybody understood his statement, the Reversion Duty was given up altogether; there was to be no charge for Reversion Duty in future in connection with this tax, unless, of course, Parliament decided otherwise. But on reading the report of the Chancellor of the Exchequer's speech the other night, I saw that he said that it was only in respect of existing leases the Government had decided to eliminate the provision with regard to Reversion Duty. I only want it made quite clear whether the Reversion Duty has been given up entirely or whether it is intended to apply to leases which could be included in future or leases which have not been at present worked. It was generally understood that the Reversion Duty was entirely given up, and I would be glad to have an answer on that question. With reference to the much debated question of the annual equivalent value, I would like it to be made quite clear. It is a very difficult subject. Taking the case the learned Attorney-General gave us earlier in the day, supposing that the owner does not declare any value at the present time in connection with the valuation when a new lease is made, will the return of the annual value be nothing? It really is not generally understood that through all future leases the actual annual equivalent value, where no value has been put on minerals, shall be taken as nothing, and, therefore, be exempt from the one-fifth payment to the State. If that be so, I think that we will have to consider all those cases which were mentioned yesterday, because it is quite clear now, from the fact that the Government have excluded from Mineral Rights Duty certain minerals, that in other clauses they will be treated as minerals. The fact of stating an exclusion from one clause only means that they are included in other clauses dealing with minerals. Therefore we have the curious fact that whereas the Chancellor of the Exchequer gives away at once on a present lease, say like chalk or the clay industry, which are imperilled by the tax, the one-twentieth, yet they do not admit that in future they imperil those industries by the tax of one-fifth. We were rather led astray by the illustration given by the right hon. Gentleman when he took £80,000; we have to take smaller cases, and not cases of such serious amount, and in regard to future leases we have to consider that one-fifth of the whole period of that lease will have to be given as tax to the State. In these circumstances I think many will consider in regard to future contracts to be arranged between the lessor and the lessee, that there will be a great fear in the industries concerned, especially those put forward last night, namely, that there will undoubtedly be a burden thrown on industries in connection with the tax that I mentioned of 20 per cent.

I should like to get some assurance from the Government as to the exact meaning of "a mine being worked." I will take a case which is known to me in the county of Kent, where I live. Some people have doubt about the collieries in Kent. I am not going to give an opinion upon them, but undoubtedly the fact is that a very large amount of money has been spent in developing the new coalfield. That coalfield has not been worked in the sense that minerals have been got out of it at the present time, but development has been going on, the landlords for some years have made their bargains as to their rents, the whole machinery is being developed, and it may be only a month or two before coal is going to be got, and it seems to me rather a hard thing that you are to put this new tax upon these contracts already made. We should like to have an explanation as to bow far this provision carries us in connection with some of the cases I have mentioned, and it would be satisfactory to have it clearly laid down.

I was glad to hear the hon. Member for Mansfield (Mr. Markham) in his interesting speech agree that the tax would fall on industry. He went on to say that in the case of coal it only amounted to 1d. The Debate, so far as it has gone, has been in terms of coal, but coal is not by any means the only mineral which has got to carry the burden of this tax. I myself would suggest that it would be of advantage, perhaps, to think about it in terms of iron ore, on which the burden would be very much more onerous, in consequence of the tax that may be imposed on royalties. As a steel manufacturer using a very large amount of coal, and raising both coal and iron ore, I find, calculating as well as I can, that the tax on my manufacture would be about eight times as much in respect of the iron ore as it is in respect of the coal that we use; so that you must multiply by about eight when dealing in terms of iron ore with the tax which that mineral will bear compared with that borne by coal. Clearly, the tax in the case of iron ore becomes very serious, because instead of being 1d. it may be very considerably more than 1d. On hematite ores in this country the royalty ranges from 1s. 6d. to 2s. a ton, and up to 4s. and 5s., and even more, where the market price is very high. Therefore, we have to consider this question from the point of view of the burden which it imposes. I entirely agree with the Member for Mansfield in his suggestion that the lessee will have to pay, particularly in the case of new leases, and in that way it will be a burden, as the Royalty Tax must always be, in my opinion, upon industries. This particular form of tax seems to me to be very unsatisfactory in relation to the article of which I am speaking, iron ore. It is not like coal, which is found in seams, with considerable regularity, and a great amount of certainty, after boring operations have been conducted. Iron ore is found in veins and in pockets. It may very well be that after working a lean mine for a longish period you may come to a pocket of ore which will give an enormous return in a short period. That is the reward which the royalty owner and the lessee and those who are interested in the working of the mine occasionally get. But as against that there are long periods of lean working.

The Chancellor of the Exchequer at the outset of the discussion this afternoon took some trouble to make clear to us how the tax would operate. I think so far as he went he was clear. I quite understand that if there were an out and out sale of a property, say, of £12,500, for £15,000 as the capital value, it would show exactly what the increment value would be. But in the case of minerals, where the charge is spread over some years, I do not think that the method is satisfactory. Where you have a mineral such as I have been describing, and which is found perhaps in large quantities for a time, and then for a period in small quantities or even none at all, a considerable further expenditure of money is needed, so that this method of levying the tax—which is so burdensome so far as its amount is concerned—in certain cases, at any rate, is not a good system, and almost amounts to a gamble as to what will have to be paid, or what the burden may be in any given year. I have arbitrarily put down for my own satisfaction a set of figures as to possible payments over a period of 12 years. Take the figures of the Chancellor of the Exchequer at £1,000 a year, which he bases on the site value. Supposing that next year you had £2,000, then another £2,000, then another £1,000, you get £500; then you get nothing at all, then it only carries £500 up to £2,000, then £2,000 and £1,000, taking the figures arbitrarily like that it might be rendered so that in the increment years you would have paid on an increment of £5,000, when you really should have only paid, if you had taken it over an average of years on £3,000, that is 20 per cent. of excess, taking as the basis the period of your lease, more than you should have paid. That arises owing to the system by which the tax is levied, and you have to pay £400 which you would not have paid except by reason of this particular method of taxation. Therefore, I think the system is not a good one, but it is perhaps capable of being rectified. If the same system were adopted in reference to the collection of this tax as is adopted in the payment of dead rent where a royalty merged into dead rent is recoverable by the working of what is called "shorts" in an absolute period. If the Government could make it that a person paying for a period of 12½ years only paid at the end of the 12½ years on the average increment spread over that there might be some alleviation, at any rate, of the hardship based on these figures. I think it is quite clear, owing to the method in which this tax is levied, it may very well be the case that the lessee will have paid more royalty than the terms that the Government have laid down prescribed. That is to say, he will have paid on more increment than he has really been entitled to pay on, and he ought in all fairness to have some consideration in that respect. With regard to where this extra burden will go, that is with me a very strong point. I feel very strongly that it must find its way to the backs of the worker. I object strongly to the tax, but I think that in these respects it might be improved, and I hope that the Government will see, in these respects if not in others, their way to meet the request I put before them.

I wish to ask a question as to a point which is not clear to a good many people interested in minerals outside the House, and which, I think, is not clear to a good many Members in the House. Sub-section (2) states, "Increment Value Duty shall not be charged in the case of any minerals which were on 30th day of April, 1909, being worked, whether by the proprietor…" and Sub-section (3) provides "Increment Value Duty in respect of the increment value of minerals which are comprised in a mining lease or are being worked. …" The point I want to put is this, where there are a number of properties lumped together in order to form a mineral area, and where working is being done on one property, does it mean only that property on which the actual working is taking place should be exempted from Mineral Duty because the working was being done before the 30th April in this year, or does it apply to all the various properties which are included in the mining lease. I would point out, unless it is guaranteed to the people who work the minerals, whether the properties are large or small, that they will find it will not pay them to sink the cash and develop the minerals.

I think, on the whole, the Government may congratulate itself that the criticisms which have been directed against this somewhat novel tax, and somewhat novel machinery, have been such as meet with no great difficulty. The points put by the right hon. Gentleman the Leader of the Opposition, though ingenious points, I think have already been answered in substance—indeed, if I may say so, with great respect to him, the answer to them was fairly obvious to those who followed the speech. He complained that the lessor would have to pay this tax according to the regularity of the working on behalf of the lessee. He said the lessor has parted with his property and he cannot control the working, that it is another person who controls the working, but that this tax is made dependent on the working, and therefore this burden is made dependant on the acts of a person over whom he has no control. That seemed to be a plausible objection, until one considers the case of the Income Tax which was put by my hon. Friend the Member for Mansfield (Mr. Markham). Every person whose income depends on investments he has made in commercial companies has put his money where he has no immediate or individual control. His income depends upon the vigilance and skill and good fortune with which other persons use his capital in order that they may pay from dividends, and he pays his Income Tax upon the regularity or irregularity, on the skill or stupidity, upon the good or ill-fortune of the persons to whom he has entrusted the use of his property. That is exactly the same case. There is nothing at all abnormal about it. It differs only in this respect, that the owner of the royalty has a much more effective and much more direct control over the lessee to whom he has permitted the use of his property than the ordinary investor has over the director to whom he has entrusted his money.

The right hon. Gentleman went further, and said that we now made it the interest of the lessor in some cases to limit the output in order to make his annual profit small. That I venture to say is an inconceivable case in practice, though it is not an inconceivable case in argument. It is like so many of the cases which seem powerful in debate, but which are never heard of again once the debate closes. It is a case which would be very unwelcome to the lessee. No lessee would endure such restriction of working, and certainly it would not be profitable to the lessor. He would be a very foolish person indeed if he said to the lessee, "I do not want you to work the property to its utmost capacity. I do not want you to utilise your means of output and production as economically and as thoroughly as you ought, because it would give me too much this year, and I would have an income in excess of my original capital value, and therefore I would have to pay Increment Duty. Do not work it this year; work it, maybe, five or ten years hence." What a foolish speculation on the part of the lessor! He not only sterilises a large part of the lessee's efforts, but he puts himself at the mercy of the market. Of course, there is a chance that the market may go up, and that the trade may be more profitable ten years hence, but that is a chance, while there is the certainty on the other hand of the year under consideration. He will certainly prefer to have the coal sold when he knows there is a demand than to keep it back on a very speculative chance, and for a time when there might be a less amount. So that the case, though controversially good, is a case which in practice need be scarcely considered at all. The hon. Member for the Ashford Division (Mr. Laurence Hardy) asked whether the Reversion Duty was absolutely given up. One can only refer to the words which are within the Clause, and which are unconditional. They are, "No Reversion Duty shall be charged on the determination of a mining lease."

There was a good deal of discussion as to whether we have really given up any thing in giving up Reversion Duty. It was pointed out in the case of a mineral property, if it is worked to the very best of its use, or if the lessee is thoroughly capable and tries to get out all the coal, that therefore there is very little chance of Increment Duty. But there might very well arise a case where that would not be so. Mineral leases, as the hon. Member knows well, run generally for a period of about 60 years. There were many mineral leases granted 60 years ago, and granted before the property was developed at all. The value actually then would be a small value; but take what happened in the South Wales coalfield within my own recollection. In the South Wales coalfields the best seam, and, I think, the uppermost seam, seemed to be No. 3 seam. I am speaking now of Merthyr district. It was the purest coal, an admirable steam coal, and thought at that time to be the best, but afterwards the 4-foot seam was discovered, and was found to be of the greatest possible value, so that South Wales coal rose in estimation all over the world, and there was a big demand for it for naval purposes. Those lower seams, which originally were not worth much, rose enormously in value. You may, therefore, very well have a lease which 60 years ago was of small value, but which may now be of very much more value, and with the coal not completely worked out, because there are many good seams yet to be developed, and with all the equipment standing there. Reversion Duty in a case like that would be a very valuable duty. So that I do not think in giving up Reversion Duty we are giving up nothing. We have in the case of the Royalty Duty put on a substantial burden, but in putting that duty on we are entitled to have it remembered that we have exempted the mineral royalty-owner from Reversion Duty, which falls upon surface owners when they deal with their property in a particular way. So I think the House ought not to take as quite correct the statement of the hon. and gallant Gentleman that we are to be thanked for nothing when we have given up the Reversion Duty. The next point put by the hon. Member for Ashford (Mr. L. Hardy) was whether, when no value has been put upon the minerals originally, is the Increment Tax all through the lease to be calculated as from zero. I think I dealt with that sufficiently at the beginning of the Debate.

A good deal has turned during the Debate upon the proper definition of the expression "being worked." I do not myself regard that expression as a highly satisfactory one, but I do not think we can entirely avoid its use in some cases. We might substitute for it the expression "comprised in a mining lease" when we are dealing with lessees, but we could not avoid the expression when dealing with collieries which are being worked by the owners themselves. But it is well worth consideration, especially when we look at the Amendments on the Paper, whether we might not amend Sub-section (2) in the way I will now read. Unless it should be thought that I am making a spontaneous suggestion, I may say that the matter has been carefully though out. Undoubtedly, in adopting the phraseology which I am about to suggest, we may be giving up something, though not much, in the way of the tax in certain rather rare cases, but we are gaining a great deal in simplicity of statement. If the Sub-section is amended in the way I suggest, it would read "Increment Value Duty shall not be charged in the case of any minerals which were on the 30th day of April, 1909, either comprised in a mining lease or being worked by the proprietor …" The somewhat vague expression "being worked" would then be confined to the one case in which we cannot avoid it, that is to say, the case of minerals being worked by the proprietor.

Has the Attorney-General's attention been called to the description of this particular matter in the new Definition Clause in connection with the mineral provisions?

I am, of course, quite familiar with that. I wish, however, to make this clear. It will be seen that I am using in regard to a large majority of cases a phraseology which is much easier for the purposes of administration. The hon. Member for Mansfield (Mr. Markham) has on the Paper several Amendments, nearly all of which would in substance be met by the changed phraseology. We will deal with that, however, when we come to consider the Amendments. This alteration will leave the definition of the somewhat vague phrase "being worked" applicable to a smaller number of cases in which it is much easier to apply. The moment you have to apply the test whether the minerals are comprised in a mining lease you avoid many difficulties. The hon. Member for Mansfield referred to certain difficulties in regard to the under seam, and so forth. All these difficulties are practically swept aside by the plain expression "comprised in a mining lease." If the hon. Member thinks not, we will deal with the point later on.

The hon. Member for Cockermouth (Sir J. Randles) said it would be difficult to apply the tax to minerals irregularly worked. I do not think there is any difficulty in such cases. The hon. Member may be of opinion that there is some unfairness in applying the tax in those cases, because no allowance is made for decree- ment. That is a matter for argument, but there is no administrative difficulty. The hardship which arises in these cases arises also in the case of Income Tax, where the State does not trouble itself about the years during which the struggling subject is perhaps making no income at all.

There is the three years' average.

I mean apart from the three years' average, which, after all, by no means meets the whole of the difficulty. The State only takes its tax on the profits. It makes no allowance except in the three years' average. The whole matter was fought out when we were dealing with the question of land values on the surface, and we declined in regard to the Increment Value Duty to make any allowance for decrement.

It is the irregularity of working the minerals which differentiates this case from others, and is a reason why minerals should not be treated in the same way as land.

I am sure the hon. Member has some good reason for his argument, though I confess I do not see it very clearly. A man sometimes makes a profit; then the State comes upon him. He sometimes makes no profit, and the State ignores him. He sometimes makes a loss, and the State pays no attention to it. The State is a fair-weather friend; it only visits a man when he is prosperous, and I do not think you can alter its habits in this regard. The duty is not one which can be said to be incapable of application by reason of the irregularity of working, although that irregularity may give rise to argument under other heads. The hon. Member for South-East Durham (Mr. Lambton) put the case of an owner who uses for the purpose of building cottages stone which he finds on his own property. He said, "There is an Owner who suddenly develops his mineral property: is he to pay 20 per cent. on the value of that stone?" Let us take the case exactly as it would work out in practice. The Committee must remember that the Bill does not put a tax on stone. We are not now, in the strict sense, taxing minerals; we are taxing the rental value of mineral rights. What would the owner have to pay in such a case as that put by the hon. Member? He has some stone on his property. No one will give him a penny for the privilege of working it. If it really has a rental value, if there is a market consisting of persons who are willing to give the owner a certain amount of money per annum for the privilege of working that stone, the owner will, of course, pay the tax on that rental value; but if there is no such market—and I think in the case put by the hon. Member one may assume that there would be no such market—the owner has merely taken out the stone; he has not really developed the mineral, he has not given the stone any particular rental value, and in all probability he will pay nothing at all.

There is no certainty.

I cannot promise absolute certainty. I have given certainty in regard to chalk, limestone, and a few other commodities, but stone is rather beyond the limits of our generosity. The particular case put may be one of extreme hardship, but I do not think the hon. Member need trouble much about it. I do not promise in regard to this tax or any other that it will not fall on some persons or in some circumstances with hardship. That would be disingenuous. But I contend that in a tax of this kind you have fewer cases of hardship than in the general run of taxes. You have a tax on an increment which is at the moment unvalued by the owner of the property. He can declare the present value of his mineral rights, and that present value is exempt from the taxation of this part of the Bill. It is only the increment upon that value that comes under taxation. Therefore one cannot say that a tax of this kind is likely to involve much hardship. It may involve some cases of inequality, like any other tax, and it may fall on one person under circumstances not very different from those of another person who may claim exemption; but do not let us confuse a few cases of possible inequality with any very general sense of hardship. It is a tax which will take its place among taxes as imposing less hardship upon the subject than almost any other tax.

Will the Attorney-General answer my question with regard to the lower seams of mines which are not being worked?

If I understood the hon. Member rightly, he said that lower seams, if they are not comprised in a lease, and are not being worked, would not come under the provisions as to Increment Value Duty, but under the provision as to the 5 per cent. on royalties. That would be so I think. If they are not comprised in a mining lease, and if they are not being worked, they would come under other provisions of the Bill. I think that should make the hon. Member a little more favourable to the expression which I am proposing to put into the Clause, namely, "comprised in a mining lease." I think the Clause, when amended, will remove my hon. Friend's difficulty about mining leases. You have, in most cases, one or two seams which are being worked; the other seams are waiting their working. They would still, I think, be exempt from the Increment Value Duty under the definition we have already got of the words "being worked," which is as follows:—

"Where any minerals are at any time being worked by means of any colliery, mine, quarry, or open working, all the minerals which belong to the same proprietor, if the minerals are being worked by the proprietor, or which the lessee has power to work if the minerals are being worked by a lessee, and which would, in the ordinary course of events, be worked by the same colliery, mine, quarry, or open working, shall be deemed to be minerals which are being worked at that date."

So that on the Bill as it stands an under-seam would probably come under the expression, "being worked by the proprietor, or which the lessee has power to work if the minerals are being worked by a lessee, and which would in the ordinary course of events be worked by the same colliery." The hon. and gallant Gentleman said, "Oh, well, the cases are different." I am afraid they are. Our system of valuation both in regard to minerals and the surface is no doubt quite safeguarded by the fact that sometimes the subject must come to an end, and then valuation is made, which, of course, operates as a check on the valuation which a man may have made during his life. But if he has not leased either seam, and is not working them, then, of course, he stands by the Increment Value Duty from the excess over their value from the 30th April, 1909. I think now the position of the Bill has been made fairly clear. It looks complicated at first sight, but I believe the House will find when they come to consider its provisions in detail that it presents a simple working scheme. So far as the justice of the tax is concerned, that, of course, is a matter of argument.

The right hon. Gentleman the Chancellor of the Exchequer in answering my hon. Friend beside me laid down a new canon. He spoke of my hon. Friend professing to speak on this subject without knowing as much about it as he does of other subjects. If that rule were to be applied to us all our Debates would be very much shorter. I am perfectly certain that even the Chancellor of the Exchequer himself would have taken a much smaller part in the discussions of this Finance Bill. The hon. and learned Gentleman the Attorney-General congratulated himself that the criticisms which have been made on the Bill were not so vigorous as he expected. I am bound to say, however, from the little study I have made of the matter, and from what I can make out of his speech, that he has great reason to congratulate himself on the fact that the number of persons acquainted with this particular trade on the critical side of the House is extremely limited, and that we are all too jaded to take the trouble which under ordinary circumstances we do take to come into contact with people who can give us the information we desire. I myself am convinced that this particular Clause, instead of being a simple and a workable scheme, is the most fantastic proposal ever presented to the House of Commons. It only needs to be examined by experts to have its follies laid bare to the Government. There is one example of what I mean in the reply given by the Attorney-General as to what is to be done with all the under-seams in all the collieries which are being worked now. So far as I can judge, the Government have never thought of them. I judge that by the answer of the Attorney-General.

Have I said anything to show that the Government have never thought of the matter?

The right hon. Gentleman said that the alteration now made in the Clause met all the objections which had been put by the hon. Member for Mansfield (Mr. Markham), when it was perfectly obvious to anyone that they did not meet those objections in the least.

I did not say all objections.

Well, main objections. It comes to the same thing. They do not meet them in the least. I only repeat, that what we want in regard to this measure is what we are not able to get—that is, expert examination. But we can touch the subject as laymen. The hon. and learned Gentleman dealt with two arguments put by my right hon. Friend the Leader of the Opposition. He was good enough to say in regard to these arguments that there seemed to be something plausible in them. No one who heard the hon. and learned Gentleman's, reply would be able to say that the answer that he gave was even plausible. He absolutely failed to meet the case put by my right hon. Friend. The case was this: "Here you have the same kind of tax put on exactly similar products. If the coal is worked out at one rate in the one colliery, you put on no tax at all; if it is worked out at a quicker rate in the adjoining colliery, you put on a very heavy Increment Duty." How, asked the right hon. Gentleman, can that be justified? The hon. and learned Gentleman in reply said: "Everyone who invests in stocks and shares makes an income which he does not control, and he pays Income Tax on that income." Does it not occur to the hon. and learned Gentleman that, taking the whole life of a mine, the amount of income which the lessor gets is precisely the same in the one case as the other; while in the one case he pays a very heavy Increment Tax, and in the other case none. Obviously, that argument is no answer to that part of the case. The hon. Gentleman the Member for Cockermouth pointed out the obvious unfairness of the application of the tax. The hon. and learned Gentleman replied to the hon. Member, "that is what you do with income, you charge it similarly." It is not. You take an average of years, so that your bad year is averaged by your good year. There is another reason which differentiates this even from the case he gives. He said the same subject had been, debated in regard to ordinary Land Tax. But it is not the same subject at all. The point raised was, if a man made a profit on one transaction and a loss on another, the two are to be equalised. Here it is the same transaction throughout, and it is simply a question of the rate at which you are working. Surely in common fairness you ought to take an average of years, and estimate the real and not the imaginary profit? The next point made by the Leader of the Opposition was that the tendency of this tax would be to prevent the coal being worked out in a rapid manner. The hon. and learned Gentleman replies that it is absurd to suppose that a man will work out the coal in 50 years when he can do it in 20. But nobody claims to put an extreme case like that. I do not pro fess to have any special knowledge of this industry, but I am bound to say this, to put it to the Attorney-General, or hon. Gentlemen opposite, must there not be many cases of mineral leases where the total amount of coal is known very accurately, or pretty accurately—must there not be cases of that kind where the rate at which it is taken out does not affect the case to any very great extent? In other words—possibly I am putting an absolutely wrong case—but is it not the case that there might be coal in a mine, which in any case is limited, and which could be taken out in 10 years, but which might be taken out in 20 years? And the cost of taking it out between the two periods is a matter of calculation, and might not be very large. Of course it depends upon many things. It depends upon the market. There obviously that is simply—

It would be much larger than any royalty.

I do not think that follows.

No, it does not.

I do not profess to understand the coal industry as the right hon. and learned Gentleman seems to, but I have been connected with people all my life who know a great deal about it, and it is quite a common thing when the market is not good to work three days instead of six by agreement. It is quite a common thing to work short time, and I have always been told—

I would like the hon. Gentleman to give the House one case where by agreement the men have worked three days in the week.

Does the hon. Member mean to say that it is not so?

Not by agreement, Sir.

What difference does that make? The point that I make is this: That the amount of coal to be taken out is limited, and that in this industry it is certainly not true to the same extent as other industries that the rate at which you take out the coal regulates the cost of taking it out.