WAYS AND MEANS.—COMMITTEE.

HC Deb 09 July 1885 vol 299 cc127-97

WAYS AND MEANS — considered in Committee.

(In the Committee.)

THE CHANCELLOR or THE EXCHEQUER (Sir MICHAEL HICKS-BEACH)

, in rising for the purpose of making a Financial Statement, and of moving a Resolution for raising a sum of money by an issue of Exchequer Bills or Treasury Bills, said: Sir Arthur Otway, it is not my intention to weary the Committee on this occasion with anything approaching to an exhaustive Financial Statement. That duty has been already performed by the right hon. Gentleman opposite the Member for Pontefract (Mr. Chil-ders); and anything I could say would merely be a repetition of the facts and figures which he very lucidly and fully placed before the Committee on the 30th of April last. Nor, Sir, have I the least intention of making to the Committee any proposals of a novel or startling character, although I am afraid that by not doing so I shall fail to meet some very sanguine expectations that appear to be entertained by many of my correspondents in the country. But I take it that, under the most favourable circumstances, it would be a very diffi- cult, if not an impossible, thing for a Chancellor of the Exchequer, in a few days, to frame a novel Budget in the first week of July; and that difficulty certainly is not lessened by the fact that I and my Colleagues, although we are called upon to provide for a very high expenditure, and an exceptional deficit, are ourselves in no way responsible either for that expenditure or that deficit. Sir, my duty to-day is a very humble one. It is merely to do the best I can to meet, during the present year, the legacy that has been bequeathed to us by our Predecessors. I hope I may, to some extent at any rate, receive the assent of the Committee to this proposition—that neither the time which it has been possible for me to devote to the consideration of this important subject, nor the circumstances in which we are now placed, would justify me in asking the Committee to accept any ambitious financial measure. It is not necessary for me to recall to the Committee the main features of the original Budget of the present year. But I may venture to remind them that on April 30 the late Chancellor of the Exchequer announced a deficit of about £2,800,000, including about £200,000 for Supplementary Estimates. That was after providing about £7,500,000 in increased taxation, and £4,670,000 by appropriating the Sinking Fund of such Terminable Annuities as were capable of being so dealt with; and he proposed that this, together with the deficit of £1,050,000 from the previous year, should be made good to such extent as might be necessary out of the Sinking Fund of the Terminable Annuities of 1886–7. Since that time the House has practically rejected, as the Committee are aware, the proposed increase of the Beer and Spirit Duties, the first Estimate of which amounted to £1,650,000, and the increased Succession Duty, estimated for the year at £200,000. The Revenue, therefore, as originally estimated by the late Chancellor of the Exchequer, is decreased by £1,850,000; while, on the other hand, the right hon. Gentleman, on the 5th of June, gave to the House a calculation that £2,000,000 of the Vote of Credit of £11,000,000 would not be required, thus leaving a deficit of £2,650,000, instead of the deficit of £2,800,000 estimated by the right hon, Gentleman on April 30. On succeeding to Office, my first care was to make inquiry both, as to the prospects of the Revenue and of the Expenditure, especially and primarily, I may say, of the Vote of Credit. I will refer to that matter hereafter. As to the prospects of the Revenue, I think they are very much what was stated by the late Chancellor of the Exchequer to the Committee on the 30th of April last. Of course, I am not speaking of increased taxation. I do not think there is reason to expect any material variation in the receipts from Customs and Excise, taken together, from the Estimates which were stated by the right hon. Gentleman in April last. On the one hand, the Inland Revenue authorities state to me that they anticipate a diminution in the receipts from British spirits of about £150,000, owing to the disturbance in the trade, and also a small decrease of, I think, £40,000 on Railway Duty, owing to concessions made by the Board of Trade respecting urban traffic since their Estimate was framed. On the other hand, the Customs Estimate appears to me to have been very cautiously made; and, looking to the present favourable prospects of a good harvest, I think there is every reasonable ground for the anticipation that some increase here may be likely to make up for any loss on Excise. I therefore think we may fairly put one against the other. The Estimates of the other items of Revenue do not call for any special remark; and, of course, our first duty with regard to them has been to consider whether, in the circumstances I have stated, we should proceed with those proposals of the right hon. Gentleman, which still remained unaffected by the Vote of the House of Commons on the 8th of June. I may say, at once, that we have decided to proceed with those proposals; and if the Committee should accept the Resolution it will be my duty to propose as to Exchequer Bills or Treasury Bills, I intend afterwards to ask that such Resolutions as have already been adopted by the House should be read by the Clerk at the Table in order that I may found on them a Motion for leave to bring in a Bill embodying them. The Committee will see that, as the result of this, there would be levied, if Parliament sanctions this proposal, during the year, the following additional taxation proposed by the right hon. Gentleman:—2d. additional on the Income Tax, making 8d. in all; the Duty on corporate property; and the Stamp Duty on bonds and foreign securities payable to bearer. The right hon. Gentleman estimated to receive from all these sources £3,600,000. The proposed increase in the Succession Duty, which the right hon. Gentleman estimated at £200,000, and the increase of the Duty on spirits and beer, which, according to the last Estimate of the Chancellor of the Exchequer, would have produced £1,350,000, the Committee will remember have been practically rejected by the House of Commons. Now, Sir, I have considered very carefully whether it would be possible for me to propose any additional indirect taxation in the place of the £1,350,000 which has been lost to the Revenue by the rejection of these proposals. Such a proposition would, no doubt, be in complete accordance with the principle laid down by the right hon. Gentleman the Member for Pontefract (Mr. Childers), when he said that the whole of the additional taxation which we have to raise on occasions when war, or active preparationsfor war, on a large scale come upon us, ought not to fall upon property; a declaration in which, as the Committee may possibly remember, I expressed at the time my entire concurrence. But, Sir, I hope the Committee may do me the honour also to remember that at the sametimo I expressed my very strongest sense of the extreme difficulty which the right hon. Gentleman, or any Chancellor of the Exchequer, must necessarily experience in times like the present in giving effect to this principle, owing to the very small number of articles still remaining on the list of our Customs Tariff. When times were more prosperous, of course the mere elasticity and ordinary growth of our receipts from Customs and Excise, in spite of the removal, one after another, of articles from the list, and the diminution in the amount of taxation levied on each, so kept up the Revenue that such a comparatively trifling addition to indirect taxation as £1,350,000 would have easily, so to speak. been provided to the Chancellor of the Exchequer of the day without any special increase of particular taxes. But the Committee are aware that the times in which we live are, unfortunately, very different. In such times as these it is, I fear, too true that, for the purposes of Revenue, we have arrived at the limits of increased taxation on the most important taxed articles of consumption, except, perhaps, one article only— namely, tea. If hon. Members opposite ask me whether I am going to propose an increased duty on tea, I have not the slightest difficulty in referring them to my speech on that subject in the debate upon the Budget. They will there find, if they will do me the honour to refer to it, that, after presenting fully to the House, to the best of my ability, what seemed to me to be the financial and economical reasons in favour of an increase of duty on tea, I intentionally and, as I think, completely demolished my own argument by a practical conclusion conveyed in a single sentence— namely, by stating my belief that such an additional duty would be so unpopular that Her Majesty 'slate Government could not propose it. Well, Sir, I can hardly see how the Committee can expect me to attempt what I admitted that a Minister so powerful and so popular as the right hon. Gentleman opposite, with all his power and support in the country, could not successfully carry through the House of Commons. Sir, I should like to ask the Committee how it was that the right hon. Gentleman the Member for Pontefract (Mr. Childers), when searching for the means of obtaining some increased yield from indirect taxation, adopted a proposal so financially unsound as his scheme to increase the duties on beer and spirits? How was it that, with all his financial ability and experience, he tried to raise the rate of duty on articles the revenue from which is notoriously decreasing, for the sake of obtaining for the Exchequer an increased yield so small as to be utterly out of proportion to the percentage by which the tax was increased —and, more than that, I may say a yield which the Inland Revenue authorities now assure me would probably not have approached even the low estimate he had formed of it? Why, it was because even he, with all the time he had to consider this question, could find no other means of obtaining even the small amount he required. I am forced to believe that he would not have made such a proposal as to increase the duties on beer and spirits, if he had not been practically driven to it as the sole way of obtaining an increase from articles already subject to indirect taxation. I think I might plead this fact alone as sufficient proof of the extreme difficulty of carrying into effect the very proper and wholesome principles as to the relation between direct and indirect taxation which were propounded by the right hon. Gentleman in introducing his Budget. I confess, Sir, I do not myself believe that that principle can in times like these be carried into effect without the addition of some one or more articles to our Customs Tariff. Well, Sir, of course I have not omitted to examine very carefully more than one proposal for this purpose; and like other Chancellors of the Exchequer, I presume, I have been flooded with all sorts of proposals from all parts of the country, and nothing, I may say, can exceed the hostility of my correspondents to bicycles and tricycles. Such a problem is no easy matter to solve. It is not to be settled offhand, though there are many amateur financiers in the country who seem to think there is nothing simpler than to propose new subjects for indirect taxation. But I do not think the Committee of this House will be of that opinion; at any rate, I hope they will admit that I am not unreasonable in saying that I have not been able, in the short time that I have had at my command, even to satisfy myself as to the advisability of proposing taxes on any fresh article of consumption, and very much less have I been able to satisfy myself that I could make any such proposal with a reasonable expectation of securing for it the consent of the House of Commons. This I will venture to say—that I am very strongly of opinion that unless I entertained such a reasonable hope, it would be almost criminal on my part, or on the part of any Chancellor of the Exchequer, to make such a proposal at all. I am sure the trade and manufactures of this country have difficulties enough of their own to struggle with at the present time. We have no right to add to these difficulties by any further prolongation of the uncertainty, already unduly prolonged, as to the incidence of taxation for the current year. Even looking at it from a Revenue point of view, I may say that any disturbance of the general business of the country which would be caused by the prolongation of that uncertainty would be So injurious as to far more than counterbalance anything we should be likely to gain from an increase in indirect taxation, even if such a proposal were adopted—certainly for the nine months which are all that now remain of the present financial year. Therefore, Sir, I have not thought it consistent with my duty to make any proposal to the Committee for an increase in indirect taxation; and I hope that under the circumstances in which we are placed, although I am quite aware of the criticisms I am likely to receive, such a position may not be without some chance of securing the sympathy and support of a Committee of this House. Sir, I will frankly own to the Committee that in these circumstances, not being able, as I have stated, to propose any increase in indirect taxation, and finding myself, according to the latest Estimates of Expenditure stated by my Predecessor, with practically no greater deficit, in spite of the rejection of the increased taxation on beer and spirits proposed by him, than he had estimated for in his original Budget, I was strongly tempted to propose to the Committee such a reduction in the burdens of the payers of direct taxation as might in some measure correspond to the amount of relief given to the payers of indirect taxation by the vote of the House. But, Sir, there are two circumstances on this point which have weighed with me, and which I will state to the Committee. In the first place, though it is, no doubt, the fact that in the Budget, as it now stands, after the rejection of the proposed increase on spirits and beer, the Income Tax payer bears nearly the whole increased taxation, yet this does not entirely represent his position. I do not think his total burden this year — supposing the Income Tax to be placed at 8d. —relatively to the total amounts received by the Revenue from Customs and Excise, is greater than it certainly has been in some previous years. The Income Tax stands this year at 8d.; the Revenue from Customs is estimated at £20,000,000, and from Excise—excluding stamps, railway duty, and licences, which can hardly be called indirect taxation—the Revenue is estimated to amount to £22,400,000, making £42,400,000 in all. Therefore, we have an 8d. Income Tax on the one side, and £42,400,000 from Customs and Excise on the other. No doubt, if we only look to recent years, during which we have become accustomed to a low Income Tax, the rate this year may seem disproportionately high; but, if we look further back, the case bears a different aspect. Thus, in 1859–60, when the Income Tax was at 9d., the payments into the Exchequer from Customs and Excise, calculated on the same basis as I have taken for the current year, were only £42,765,000. In 1860–1, with a l0d. Income Tax, they were £42,529,000; and in 1861–2 they were £39,766,000, with a 9d. Income Tax. I am not arguing that the Income Tax payers in those years may not have had cause for complaint; much less do I express to the Committee an opinion that an attempt should not be made, at the earliest possible opportunity, to reduce the 8d. Income Tax to what may be called a more normal limit; but I merely quote these figures to show that the present state of things is not entirely without precedent. It was, I dare say, to a great extent justified in the years to which I have alluded, as I am afraid I must justify it now, by the simple but very cogent argument that we cannot do without the money. I have now, Sir, to state to the Committee a fact which I am sure the Committee will hear with considerable regret—nainely, that the expenditure in respect of the Vote of Credit of £11,000,000 can no longer be limited within the £9,000,000 stated on the 5th of June by the late Chancellor of the Exchequer. The right hon. Gentleman, as the Committee will recollect, made on the 5th of June the following statement on this subject. He said:— I am able to say this—that if the state of affairs which lead Her Majesty's Government to ask for the Vote of Credit should present an aspect which would justify a cessation of further preparations, we anticipate that about £9,000,000 out of the total Vote of Credit of £11,000,000 will have been spent or incurred."—(3 Hansard, [298] 1337.) Now, the very first day after I had the honour of entering upon Office, I made it my duty to inquire into this matter. I found that the opinion of the right hon. Gentleman had been based, of course, as it must have been based, on Estimates of money spent and liabilities actually incurred furnished to the late Government by the two spending De-partments—the War Office and Admiralty. On assuming Office, I lost not a day in inquiring into this matter. I was told at first that there was no reason to anticipate an excess over the £9,000,000; but when I prosecuted my inquiry further, I am sorry to say that I came to a very different conclusion. I wish to state the matter with extreme frankness to the Committee, because I think it is only right that I should do so. In the Estimates furnished to the late Government of £9,000,000, a sum of £6,200,000 was given by the War Office, and one of £2,800,000 by the Admiralty. Of the sum estimated by the War Office, a certain portion was due to the provision which had been authorized for the defence of our principal coaling stations and commercial harbours, an item for which, in spite of its great importance, and in spite of the pledges given by Parliament last December by the First Lord (the Earl of Northbrook) and the Secretary to the Admiralty (Sir Thomas Brassey), no provision had been made in the Army Estimates. Well, Sir, so far as I am able to learn, the War Office Estimate of £6,200,000, even after making an allowance for the prolongation of the state of uncertainty, and the additional expenditure that has resulted from it, is not likely to be materially exceeded. Of course, there may be an excess in some. matters; but there will probably be a saving in others, unless the present condition of emergency should be very considerably prolonged. I do not, therefore, estimate for any additional expenditure in that quarter. But I am sorry to say that the case is very different with regard to the Admiralty. The Committee will remember that I have stated £2,800,000 was estimated by the Admiralty on the 5th of June as covering their probable expenditure and liabilities up to that time. I fear this will be exceeded by no less than £850,000, including liabilities to the extent of £500,000, which, as far as my inquiries enable me to ascertain, were absolutely incurred at that date. I feel it my duty to place before the Committee the reasons for this, so far as I have been able to ascertain them. Out of the Estimate of £2,800,000, £1,000,000 was allowed for transports, besides a further sum for vessels taken up for ocean cruisers. Subsequently about £80,000 was added to this before the defeat of the late Government, owing, no doubt, to the continuation of the unsettled state of foreign affairs. Since then, of course, further expenses have been incurred, due to the same cause; and for this no one can be blamed. But the grave fact which I have to bring before the Committee is that we have now discovered that the Estimate of £2,800,000 presented to the late Government at the time I have stated by the Admiralty, did not include all the liabilities that had been then incurred. So far as I have yet ascertained, the error was no less than £500,000. Now, Sir, I hope it will not be supposed that I blame the late Government collectively for this. One right hon. Gentleman, in particular, did his best to prevont it. In spite of the many and urgent affairs that must have distracted his attention at that moment, the late Prime Minister found time to put his finger on this very blot, and to represent to the Admiralty the urgent necessity for checking an expenditure which I must say, so far as I have yet been able to investigate the circumstances, appears to me to have been incurred with an absence of method and supervision, to say the least, which is far from creditable to such a Department as the Admiralty. I cannot at present say who is to blame; but Her Majesty's Government will devote their most earnest and careful attention to the matter. The result of our investigation so far is this —that although the Admiralty gave the late Government an Estimate of £2,800,000 at a certain date, yet they had, at that time, actually exceeded that Estimate by £500,000. I am sorry to say that this is not all. There is another very important matter. I said the Admiralty had exceeded their Estimate of £2,800,000 by no less than £850,000. That is not all due to the increased cost of transport. It is also due to the fact that—although, I think, quite rightly— provision was made in this £2,800,000 for building or purchasing 40 torpedo boats, the Admiralty actually omitted from that Estimate any provision whatever for furnishing those boats with torpedo gear, without which they would be absolutely useless. And now we are called upon to include in the Estimate of further expenditure to the extent of £850,000, a sum of £127,000 which it is abso- lutely necessary to add for torpedo gear. I do not mean to say that for all the increased expenditure of £850,000 the Admiralty can be blamed. That, of course, is not so; because the Committee will be aware that, owing to the prolongation of the uncertain state of foreign affairs, a necessarily increased cost has been incurred in keeping up transports, and for that the Department, of course, is not to be blamed. But taking the whole matter into view the result is that, owing partly to the continued uncertainty in foreign affairs, but mainly to the facts I have stated, I cannot, I am afraid, estimate that less than £850,000 will have to be added to the £9,000,000 stated by my Predecessor the right hon. Member for Pontefract (Mr. Childers), on June 5th, as the probable expenditure out of the Vote of Credit. I am afraid, Sir, that, under these circumstances, the Income Tax payer must bear as easily as he can the 8d. Income Tax originally proposed by the late Government; and the only question that remains is how the deficit is to be provided for. Now, the right hon. Gentleman opposite proposed to make it good to such extent as might be necessary out of the Sinking Fund of 1880–7, and took powers in the National Debt Bill for that purpose. Sir, I am not disposed to ask Parliament to adopt that course. I do not know that anyone has objected to the proposal of the right hon. Gentleman to suspend the Sinking Fund of these Terminable Annuities for the current year. That seems to me perfectly justifiable. I do not consider our Sinking Fund too large in times of prosperity and peace. I think it is quite right and proper that then we should do what we can to pay off in this way our National Debt. But when, in times like these, you have to make war, or make active preparations for war, on a considerable scale, to quote the words of the right hon. Gentleman, I think the Committee will be of opinion that it is not only justifiable, but right, to pause in that repayment of Debt. I propose to carry this principle in the current year rather further than my Predecessor had intended. He proposed to apply to the service of the year that part of certain Terminable Annuities which represents the principal to be repaid. That amounts, as the Committee will remember, to the sum of £4,672,000 during the current year, We propose to carry that principle a little further, and to apply it also to the New Sinking Fund. The right hon. Gentleman left intact the New Sinking Fund, which consists of the difference between the actual charge of the Debt and the fixed sum of somewhat more than £28,000,000 attributable to the service of the Debt. The Now Sinking Fund for the present year was estimated at £622,000; but I have to anticipate a charge for interest on the Exchequer or Treasury Bills, which I ask to-night the assent of the Committee to raise, and which, perhaps, may diminish it by some £36,000. I propose in the National Debt Bill to take power to appropriate the New Sinking Fund also to the service of the year. The deficit will then amount to £2,827,000, to which must be added the deficit of last year of £1,050,000, leaving an accumulated deficit in prospect of £3,877,000, supposing the expenditure on the Vote of Credit to be taken at £9,850,000, and supposing also that Parliament agrees to suspend the New Sinking Fund for the current year, as I have suggested. I have said that I do not propose to proceed with that part of the National Debt Bill which empowers the Chancellor of the Exchequer to appropriate the Sinking Fund of the year 1886–7. I confess that I do not think that we should now legislate for the Sinking Fund of next year. I think this is a matter which may properly be left to the new Parliament to deal with. I propose to ask the Committee to enable me to meet the deficit temporarily, as I have stated, by empowering me to issue Exchequer or Treasury Bills to the amount of not more than £4,000,000. I have placed in your hands, Sir Arthur Otway, a Resolution to that effect, and, of course, it will be necessary to make it the subject of a separate Bill. I should like, Sir, to add another statement on this matter. It is this. I ascertained that, owing to the fact that the repayments of loans to the Exchequer are, at the moment, in excess of the issues for loans from the Exchequer, the Exchequer balances on the 31st of March next are likely to be in a favourable position, and, of course, that has an important bearing on the proposals for the issue of Exchequer Bills. I do not think there is anything further with which I should occupy the attention of the Committee. There is nothing, as the Committee will have seen, of originality or novelty in the proposals I have made. I make them, not by any means as entirely satisfactory in themselves, not as proposals of the kind which I should hope, if I have the honour next year to occupy my present Office, to lay before the Committee, but as the best, as far as I can see, that can be made for dealing with the circumstances that are at present before us. They appear to me to meet the exigencies of our present situation with the least possible disturbance to the trade of the country and with due regard to the liberties of the future House of Commons.

Motion made, and Question proposed, That, towards raising the Supply granted to Her Majesty, the Commissioners of Her Majesty's Treasury he authorised to raise any Sum not exceeding Four Million Pounds by an issue of Exchequer Bills or Treasury Bills."—(Mr. Chancellor of the Exchequer.)

MR. CHILDERS

I think it is a good rule, which has always been observed on occasions like the present, that we should not, at this moment, enter upon any controversial criticism of the financial proposals which have been developed by the Chancellor of the Exchequer, but that we should reserve our criticism until those proposals are embodied in a Bill which is brought to a second reading. I, therefore, will only make two remarks now on the statement of the Chancallor of the Exchequer, and I shall then proceed to ask him a few questions, reserving for another opportunity, when I shall have had time to consider his proposals, any further observations which it may be necessary to make upon them. The two remarks which I wish to make in reference to the statement of the right hon. Gentleman are these. In the first place, the Chancellor of the Exchequer said that he was not responsible for the deficit with which he had to deal. He is not responsible for the whole of it, but he is responsible for greatly increasing our deficit by moving a Resolution and adopting a policy which deprives him of a large amount of Ways and Means; so that his responsibility, if it is not complete for the whole deficit, clearly extends to a large amount of it. The other statement of the right hon. Gentleman to which I wish to address a word is this. He said that we had reached the limits of taxation on all taxed articles of consumption.

THE CHANCELLOR OF THE EXCHEQUER

On all important articles of consumption.

MR. CHILDERS

All important articles, except tea. That is a proposition on which, on a future occasion, I should like to address some remarks; but the right hon. Gentleman went on to justify that statement as to tea. He repeated his former argument that an increased duty on tea would be so unpopular that we did not dare to bring it forward, because we were so dependent on Radical teetotallers. Yes, Sir; but he did not say that that consideration influenced him, I think I am bound to say that I by no means admit the general proposition of the Chancellor of the Exchequer that there were no articles of consumption upon which the duty might be increased. That is not my opinion, and it is not the opinion on which we framed the Budget. I am quite prepared, at the proper time, to discuss this question with the Chancellor of the Exchequer. So much for the two statements of the right hon. Gentleman on which I feel it my duty to offer passing remarks. And now, Sir, as to the proposals of the right hon. Gentleman, and the grounds on which he has based them, I wish to ask him for some information in order to make the matter clear. He estimates Customs and Excise together pretty nearly as I estimated them two months ago. As far as we can judge, from information which is in the possession of everybody, those Estimates are probably correct. But he says that since my statement, on the 5th of June, that out of the Vote of Credit of £11,000,000 probably only £9,000,000 would be required, he has ascertained that £9,000,000 will not be sufficient, because, although the Army Department accurately estimated what they had spent or incurred—namely, £6,200,000—the Admiralty was wrong in its Estimate of £2,800,000, and that to that amount a further sum of £850,000 will have to be added. That, of course, is a statement which has come upon me with great surprise, because, as he was good enough to admit, we had taken great care to verify the Estimates of the reduced expenditure. I spent some time going into the Estimates with my two Colleagues at the head of the Army and Navy Departments, and with Sir Reginald Welby, who was assisted by the two Accountants General, and we arrived, at the time, at the conclusion that £9,000,000 was the full Estimate of the expenditure. I hope that before the Committee concludes that we were in any way guilty of want of care in the discharge of this important duty, detailed information upon this matter will be given to the House. I should now like to ask the right hon. Gentleman a question or two, in reference to the Customs and Inland Revenue Bill, upon matters which are not of so much importance as that to which I have just referred. In the first place, the right hon. Gentleman said that while he is prepared to go on with the proposals in the Customs and Inland Revenue Bill in reference to the tax to be paid by Corporations and the tax on bonds payable to bearer, the two together producing, I think, £250,000, he does not propose to take up any of the clauses dealing with taxes on articles of consumption. But there is one of these clauses to which I should like to refer. We did not propose to alter the Wine Duties, but to take power to the Government to make a certain change in the superior limit of the lower rate of duty—that is to say, to raise that superior limit from 26 to 30 degrees alcoholic strength. I explained the object of that change in my Financial Statement. It was to enable us to complete the Treaty with Spain, which would be much to the advantage of the trade of this country. I should like to know if the Chancellor of the Exchequer proposes to give up that power? [The CHANCELLOR of the EXCHEQUER: Yes.] The right hon. Gentleman says "Yes," and that is an answer to my question; but, considering the large manufacturing interests concerned, and the Memorials from our Colonies in favour of the charge, it is a subject on which I shall have to make some remarks at a future stage. There is another matter about which I wish to ask a question. Does the Chancellor of the Exchequer propose to do what was hinted at by the noble Lord the Postmaster General (Lord John Manners) a day or two ago—namely, to abandon the proposals for cheap telegrams? If he does, I gather from the statement of the noble Lord that this would make some appreciable effect upon the Budget. In naming the amount of the deficit, has he made any allowance for that change? The Budget was framed on the minimum price of telegrams being reduced to 6d. on the 1st of August. If the telegrams are not reduced to 6d. on the 1st of August, there will be an increase in the Revenue, and, I hope, some diminished expenditure in favour of the Exchequer. If I am not mistaken, the two together would be favourable to the Buget of the year to the extent of something like £100,000. I think that, later, on we ought to have some explanation from the Chancellor of the Exchequer on this point. These are the only points of detail in reference to the Chancellor of the Exchequer's statement which occur to mo. I should be glad to know when the right hon. Gentleman proposes to take the second reading of the Bill? The whole matter is now well before the House and the country, so that no long time for consideration will be necessary. I will reserve till then such remarks as I may deem to be necessary upon the general financial proposals of the Chancellor of the Exchequer; but I repeat that, with the exception of the two or three questions I have asked, the Committee may now be satisfied with the clear statement which the right hon. Gentleman has made.

MR. W. FOWLER

wished to ask for an explanation from the Chancellor of the Exchequer in regard to the exemption of corporate property from taxation. If he understood rightly, corporate property, as a whole, was now exempt in England. He had always failed to understand why it was exempt in England; and, although he had asked questions on the subject, he had not received any information upon it. The subject of exemptions was one that required careful consideration, as it was a large and difficult question, and he recommended it to the careful attention of the Chancellor of the Exchequer. If he were right, he thought the Ecclesiastical Commission would ray no duty under the Bill? ["No!"] Well, he was distinctly at variance with hon. Members on that point.

MR. H. H. FOWLER

said, there was one part of the statement made by the right hon. Gentleman the Chancellor of the Exchequer that he, for one, could not pass by. The right hon. Gentleman had laid down a certain principle and had introduced it into his Budget, which, he (Mr. Fowler) admitted, was perfectly consistent with the Resolution submitted to the House three weeks ago, but a principle to which he could not assent. It was one upon which he thought the judgment of the House ought to be taken, and he was quite sure that the judgment of the constituencies would be taken upon it, and that the judgment of the new Parliament would be clearly expressed. That principle was the practical exemption of real property from its fair share of Imperial taxation. He was quite aware that in the Eesolution moved by the right hon. Gentleman, three weeks ago, some stress was laid upon this point; but the strain of the debate went upon the imposition of direct taxation upon beer and spirits, and very little was said in reference to the taxation proposed to be levied upon real property. The history of this question was some what in teresting. The late Chancellor of the Exchequer was the first Gentleman occupying that position who, for something like 30 years, had proposed to deal with this exemption of real property from its fair share of the payment of duty on devolution by death. It was interesting to know that Mr. Pitt, when ho first introduced the Legacy Duty in this country, proposed that it should apply equally to real property and to personal property. In the speech which Mr. Pitt made on that occasion—and this was more than 100 years ago—he used these memorable words. He said "that if we were to protect property it was just and equitable that property should bear the burden." He asked hon. Gentlemen opposite to remember those words. It was not a Radical sentiment, not a sentiment put forward by the right hon. Member for Birmingham (Mr. Chamberlain), but a sentiment uttered by Mr. Pitt— If we were to protect property it was just and equitable that property should bear the burden, and as it was in the nature of things that landed property was the most permanent it was just and fitting that it should contribute accordingly. Mr. Pitt's Bill for the imposition of the Legacy Duty, therefore, applied equally to landed and personal property. But such was the powers of the landed interest, that Mr. Pitt was compelled to divide his proposal into two parts, one imposing a Legacy Duty upon personalty, and the other imposing a Legacy Duty upon realty. He carried the duty on personal property with great ease; but when he came to propose a duty upon real property, he only carried his Bill through Committee after repeated divisions and obstruction; and when he came to the third reading it was proposed to leave out the word "Now," and 48 voted for, and 46 against. As no words were proposed to be added at the end of the Question, Mr. Pitt proposed to add, "That it be read a third time tomorrow morning." The House divided again, when the numbers were 54 to 53; and Mr. Pitt then moved the Main Question, "That the Bill be read a third time to-morrow morning," when the votes were equal. Under those circumstances, he was compelled to abandon the measure; and from that time to this real property had not paid its fair share of the taxation of the country. There were three modes in which property was taxed in England. It was taxed upon its enjoyment, upon its transfer, and upon its devolution by death. Real and personal property stood on precisely the same footing in regard to taxation upon enjoyment. They paid the same amount of Income Tax and Property Tax. [An hon. MEMBER: "What about rates?] He would come to that question before he sat down; but as to the actual income derived from personal and real property, they paid the same amount of taxation upon enjoyment. With respect to transfer, the same duty of 10s. per cent was paid by each description of property. He would now ask the attention of the Committee to the present position of the law in reference to the duty payable on devolution by death, and he would ask the Committee to take an illustration which would show the practical working as well as the practical injustice of the present system. He would take the case of a father holding £50,000 in Consols, and having landed property also worth £50,000. The one produced an income of £1,500 a-year, and the other an income of the same amount. [A langh.] The hon. Member who laughed would have an opportunity of replying to him later on. He would repeat the statement. He maintained that £50,000 invested in Consols produced £1,500 a-year, and that landed property worth £50,000 also produced £1,500 a-year upon an ordinary rental of 3 per cent. [Interruption.] He was taking the rental at the worth of the property. It would only make it worse for the argument of hon. Members opposite if it was worth more. [An hon. MEMBER: It is worth less.] People did not buy real property now-a-days to pay less than 3 per cent. ["Oh!"] All he would say was that he read the details of the sales of real estates upon a very different principle. He would, however, put his illustration in another way—two properties each producing an income of £1,500 per annum; the personal property invested in Consols, and the real property in land. Well, if the father died and left the two properties to two sons—say, at the age of 45 or 46—the Chancellor of the Exchequer came down at once upon the man who succeeded to the Consols, and he had to pay £1,500 in the shape of duty. "What did the other son have to pay? He paid only on the capitalized value of an annuity of £1,500, which, taking his age at 45, was worth £20,600, and upon that £20, 600 he paid £206. And that payment was paid over four years. He was dealing with the matter as an abstract question of political economy, and he wanted to have an intelligent answer to the question, why the one class of property should be taxed at one rate, and the other at a totally different rate? He knew he should be told directly by several hon. Members that the answer to that question was that landed property, in addition to the ordinary claims upon it, paid an unfair share of local taxation, and that the smallness of the amount paid by real property to the Imperial Exchequer was owing to the excessive amount which it contributed towards local rates. He was not going to defend the present system of local taxation. He thought it was as bad as it possibly could be; but he believed that the heaviest and greatest injustice fell upon the large towns and the trading classes. But in reference to this question of land, what were the burdens upon land for the purpose of local rates? They were threefold—the poor rate, the burden of the highways, and the burden of what they might call social legislation laid on all descriptions of rateable property, such as school boards and the charges for sanitary purposes. The poor rate was a burden which every acre of land in this country had been subject to for the last 300 years. Landed property had been liable to poor rate ssince the Reign of Elizabeth. It had been sold subject to the payment of that burden, and there was the further fact, that the poor rate was not increasing but decreasing. It was a great deal less now than it was a few years ago, and it was gradually decreasing. He would give the Committee one or two figures, for it was impossible to argue a question of this sort without looking at the figures. The poor rate in 1856—the average poor rate on the real estate of this country— was 2s. 3d. in the pound, of which 1s. 8d. was applied purely to the relief of the poor. That was what he called a burden upon the land, against which the land had no right to complain, seeing that it had been bought subject to that burden. In 1856 the portion of the rate applied to the relief of the poor was, as he said, 1s. 8d. in the pound. Last year the entire poor rate, which included all sanitary purposes—school boards and various other burdens put upon the land, except the highways—was only 2s. in the pound, and only 1s. 2d. of that sum was levied with respect to the poor, so that the actual burden which land was legally subject to had, during the last 30 years, decreased something like 25 per cent. In 1871 the poor rate was 1s. 5½d., and it had been gradually going down every year since 1871, until, in 1883, the poor rate got to 1s. 2d. The following figures would show the steady decrease during recent years:—In 1871 the poor rate proper—he meant the rate devoted exclusively to the relief of the poor—was 1s. 5.6d., in 1872 1s. 5.6d., in 1873 1s. 4.9,d>., in 1874 1s. 4.4d., in 1875 1s. 3.5d., in 1876 1s. 2.8d., in 1877 1s. 2.3d., in 1878 1s. 2.4d., in 1879 1s. 2.3d., in 1880 1s. 2.4d., in 1881 1s. 2.3d., in 1882 1s. 2.1d., and in 1883 1s. 2.2d. Therefore, the figures he had given did not show an exceptional contrast, but the normal state of affairs, and they showed that the burden on real estate, with respect to the relief of the poor, was steadily decreasing. In reference to the highways, that was also a natural burden upon land; the land had always been called upon to repair the roads of the country. [An hon. MEMBER: NO!] An hon. Gentleman said "No!" He would like the hon. Gentleman to get up and try to convince the Committee that for centuries in this country the duty of keeping the highways in repair had not been a burden upon the land. [An hon. MEMBEE: No; Turnpikes!] The hon. Gentleman said "Turnpikes!" A turnpike was nothing more nor less than a highway, constructed for the convenience of the parishes through which it ran; and, because there was no fund out of which it could be constructed, the money was borrowed and tolls were levied to keep the roads in repair and to pay off the debts incurred in making them. What was the entire highway burden that fell upon the rural districts of England last year? Considerably under £2,000,000 was spent upon all the highways of the country, and out of that sum a solid contribution was made from the Consolidated Fund, so that all of the burden did not fall upon the land. He did not deny that there was an annual burden upon landed property, in reference to the third head; but it was a burden which was borne by every kind of property. He quite agreed that there had been a considerable increase in taxation for social improvements; but that increase was thrown upon the shops, the manufacturers, and therail-ways of the country, as well as upon property. The local rates paid by the landed gentry were not a different class of rates from those which were paid by other classes of the community. He would challenge anybody to dispute the statement that he had made—that the average local rates of this country amounted to a fraction over 3s. 3d in the pound. They were considerably under that amount in the rural districts; but in all the large towns they were considerably over that amount. As far as that point was concerned, he did not propose to trouble the Committee further, because he thought there was a still more important question behind all this, to which he wished to draw the attention of the Committee for a moment or two longer, and that was the disproportion which he humbly conceived to exist between real and personal property in contributing their fair share to the actual burdens of the country. On that question he joined issue with the Chancellor of the Exchequer. He maintained that industry in this country was over-taxed, and that property was under-taxed; that an unfair amount of taxation was levied on industry, and not an adequate amount on property. The figures which the right hon. Gentleman gave were clear enough in reference to the purpose for which he gave them; but he (Mr. Fowler) would like the Committee to understand the full strength of the position, and it was, therefore, necessary to take a few years beyond those which the right hon. Gentleman had alluded to. All the sensational talk which they had heard about £90,000,000 and £100,000,000 Budgets, and so on, partook a great deal of the nature of clap-trap. This country carried on two very large businesses in regard to the Post Office and Telegraphs, and the larger the expenditure the larger would be the income and profit. It also carried on a large banking business in reference to loans, for public works and other purposes, and the larger the amount obtained so much the better for the country, as the profit and income were larger in proportion. He was not going to underrate the burdens actually borne; but in raising taxation they had to deal with the burdens of the people. What was the amount of taxation raised? He did not wish to make his remarks of a Party character, and he would go no further back than the taxation imposed by the late Government in the year 1880. The income raised by taxation in that year was nearly £67,000,000, of which amount the sum of £44,500,000 was raised by OustomsandExcise,andonly£22,500,000 by Property, Income Tax, Stamps, and Death Duties. In 1881 the amount of taxation raised was £68,824,000, and the proportions were £44,484,000 and £24,340,000. In 1882 £46,527,000 were were raised by Customs and Excise, and under £24,000,000 by Property. In 1883 £46,500,000 were derived from articles of consumption, and £26,500,000 from property, and in the year just closed £46,653,000 were raised from Customs and Excise, and £25,000,000 only from Property and Income Tax. It was a very difficult question to say what proportion of taxes on articles of consumption was paid, he would not say by the working classes, but by the industrial classes. The use of the words "working classes" was a mistake, because, although the burden of taxation was oppressive on those who got their living by weekly wages, yet if there was a class upon which taxation fell more heavily than any other it was the lower sections of the middle-class people, who had no property—men who obtained their living by their brains and industry —the curate, the Nonconformist minister, the poor professional man, the doctor, the clerk, whose incomes ran from £200 up to £500, and in whose case the expenditure of each 1s. had to be watched. In the case of the lower middle-class, an increase of taxation meant a positive deprivation of some family comfort or enjoyment or other. In fact, that class felt the burden of taxation more than any class of the community. Therefore, in adjusting taxation accurately, the contribution of the industrial classes should be taken into account. Some years ago, Professor Leone Levi, after the Census of 1861, was of opinion that two-thirds of the population of the country belonged to the working classes —the working classes in that case meaning the working classes pure and simple —and one-third to the class above them. Those figures had been materially altered during the last quarter of a century. There had been an enormous increase in the consumption of taxable articles, the bulk of which had no doubt been consumed by the industrial classes. He thought that the amount of rent paid was a reliable indication of the proportion of classes. In England alone they had something like6,000,000 dwelling-houses; 3,000,000 of those dwelling-houses were under £10 a-year rent; 750,000 were between £10 and £15 a year; and 500,000 between £15 and £20 a-year. Therefore, out of the entire number of 6,000,000 houses, 4,250,000 were inhabited by people who could not afford to pay £20 a-year rent. That, he thought, was an indication of the number and extent of the industrial classes. If they extended the figures to Ireland and Scotland, the proportions were still greater. Therefore, what he ventured to submit to the Committee was this—that at least five-sixths of the people of this country belonged to the class to whom he was alluding, and it was admitted by statisticians that the average consumption per head was the same in regard to all the principal taxed articles. The argument which he adduced, then, was that five-sixths of the taxation on articles of consumption was paid by the industrial classes, and one-sixth only by the well-to-do and propertied classes. If that were so, out of £46,000,000 raised by Customs and Excise, more than £38,000,000 were contributed by the industrial classes, and scarcely £8,000,000 by the propertied classes. In adjusting taxation, they should consider not only the amount put upon each man's back, but the strength of the man's back to bear it, because by one class the burden must be felt far more heavily than by another. Without going into the question of a graduated Income Tax, he submitted that in adjusting the due ratio of taxation between direct and indirect taxation—between property and industry—they were bound to give the advantage to industry, because it did not possess that reserve fund to fall back upon which the propertied classes possessed. By those who lived by industry every tax upon that industry was most acutely felt, while in the case of the propertied classes it could only affect their luxuries, and it rarely affected even them. The conclusion he drew was this—while he did not challenge the Budget of the Chancellor of the Exchequer, as there was probably no other course open to the right hon. Gentleman in the circumstances in which he was placed, and without impugning the principles of finance which had guided him, he wanted to reserve the principle that, as between real and personal property, real property did not pay its fair share of Imperial taxation, and that, as between property and industry, the industry of this country paid an unfair share. He exceedingly rejoiced that the articles on which direct taxation was placed had been so reduced that no Chancellor of the Exchequer would hardly venture again to propose an increase. He believed that, in their future fiscal system, the industry of the country would have to be relieved to a greater extent than it had hitherto been, and property would, as Mr. Pitt said, have to bear a larger burden for the discharge of duties which properly belonged to it.

SIR BALDWYN LEIGHTON

said, he was not going to follow the hon. Member for Wolverhampton (Mr. H. H. Fowler) through all his facts and figures. He would only say, with all deference to the hon. Gentleman, that he had never heard in so short a speech such a tissue of fallacies as that to which the Committee had just listened. The facts were all wrong, and the conclusions drawn from them altogether erroneous. Of course, the hon. Gentleman had come down to the Committee thoroughly prepared to make this speech. Unfortunately he (Sir Baldwyn Leighton) did not happen to be prepared, for he had come down not intending to speak at all. At the same time, he was quite prepared to pit his memory against the figures which the hon. Member had laid before the Committee. What was it that the hon. Member said about the rates? He believed he was able to quote the figures of the hon. Member correctly. He had told the Committee that, in 185G, the rates amounted to 2^*. 2d. in the pound, of which 1s. 8d. was for poor rate, and that in 1871 they had been reduced to 2s., of which 1s. 2d. was for poor rate. Now, they had the book of the right hon. Member for Ripon (Mr. Goschen) upon this subject, which might be regarded, so to speak, as a text book; and it would be found that the hon. Member for Wolverhampton (Mr. H. H. Fowler) had commenced with a false principle, by mixing up the counties and the boroughs. The right hon. Member for Ripon showed that the poor rate in the rural parishes was 2s. 5d., and since that date they had had the cost of maintaining the turnpikes and the sanitary rates thrown upon them. Those two charges amounted to not less than 6d. in the pound, bringing up the total burden to 2s. 11d.; and in addition they were maintaining schools without levying a rate, which, if they were maintained by rate, would amount probably to 1d. more, making the total amount 3s. in the pound.

MR. H. H. FOWLER

wished to explain that he had drawn a distinction between the poor rate and the other local burdens. He had said that the poor rate was 2s. in the pound; but, with other rates in addition, the total might be raised to 3s. or 3s. 3d.

SIR BALDWYN LEIGHTON

begged the hon. Gentleman's pardon. He had understood him to allude only to the poor rate. The hon. Gentleman now admitted that the rates amounted to 3s. in the pound in the rural parishes; but although the hon. Member said that the average rate all over England was 3s. in the boroughs, it was from 4s. 6d. to 5s., and sometimes as high as 6s. Some of the burdens borne by the land had been altogether ignored by the hon. Gentleman; and he (Sir Baldwyn Leigh-ton) would endeavour to point out what they were. First of all, the hon. Member had fallen into the mistake of saying that this was a tax upon property. His (Sir Baldwyn Leighton's) contention was that local rates were a tax upon labour. The same fallacy had been put forward by the right hon. Member for Birmingham (Mr. John Bright) and by the right hon. Member for Mid Lothian (Mr. Gladstone); but the contention on that side of the House was that those rates which fell upon the small farmer in the rural parishes, and upon the unskilled labourer in the towns, was a tax upon labour. That was their position, and from that position they were not disposed to give way. It was the whole difference between them. He maintained that it was not a tax upon property, but a tax upon labour; whereas the hon. Member for Wolverhampton (Mr. H. H. Fowler) contended that it was imposed as a tax upon property. He asked the Committee to bear with him while he endeavoured to point out what the burdens were which really did fall upon property, and especially landed property. And here ho would say that he and his Friends wore quite ready for re-adjustment, and that, in fact, they asked for it. It was because they wanted re-adjustment that they had called attention to those things over and over again. First of all, he would take the Land Tax. It was supposed to be a tax upon land; but it was nothing of the kind. Originally, it was an Income Tax put on in the time of William and Mary in 1693; and if hon. Members would refer to the Act which imposed it, they would find that it was levied on all incomes. Land only slipped in, and the principle of the tax was that it should be a tax on incomes. Those £2,000,000 a-year, originally levied on all kinds of property, were now only levied upon land. [An hon. MEMBER: It is only £1,000,000.] He was aware that it appeared to be only £1,000,000; but really it was £2,000,000, because there was £1,000,000 which had been redeemed, and which must be reckoned. Then there was the House Tax, which, he believed, was about £1,800,000 or £2,000,000 more. There was also the rates, which were allowed by the hon. Gentleman to be 3s. in the pound. The hon. Member said that they had been imposed on the land since the time of Elizabeth; but, in point of fact, it was only in 1836 that those rates were imposed on the land and made perpetual. The poor rate was levied on all property in the time of Elizabeth. The hon. Member talked about the great reduction of rates which had taken place since the time of Mr. Pitt. In the time of Mr. Pitt, rates were only ponce in the pound; they were now shillings. They had doubled and trebled since the time of Mr. Pitt, 100 years ago. The hon. Member would appear not to have read history, or, if he had, not to understand it. Then they had the tithes also. The hon. Member was, perhaps, not aware that the tithes were put on by Henry IV.; that they were originally for the support of the poor, and a tax upon income, but were now a charge upon land. Then, again, there was the cost of prosecutions, and Schedule A and Schedule D of the Income Tax were raised on the land. If they went into those matters at all, they must go into the whole of them, and that was why those who were interested in the land asked for a re-adjustment of the whole matter. It was, unfortunately, the habit of those who were constantly bringing those questions forward to forget, or to pass over, all the other incidence of taxation and the injustice which property complained of. For instance, in the illustration which the hon. Member for Wolverhampton (Mr. H. H. Fowler) gave of the two sons—one inheriting £1,500 a-year from Consols, and the other £1,500 a-year in land—he omitted to take into consideration the fact that the Land Tax had to be deducted from the latter, and that it was not paid by personal property at all. That was an important element to be considered. In the time of Elizabeth, William and Mary, and still later, land represented the principal property of the country. The population was at that time from 5,000,000 to 10,000,000. The value of land had increased comparatively very little. About £150,000,000 represented the assessment value of land, whereas £1,200,000,000 represented the assessment value of personal property, which did not exist in the time of Elizabeth, or William and Mary, and hardly existed at the commencement of the present century. Those were only a few of the facts of the case. He would not take up the time of the Committee by going into the matter further; and ho had only ventured to offer those observations, in order to show the utter fallacy of the arguments which had been put forward by the hon. Gentleman.

MR. CAINE

said he was sorry he was not in the House when the Chancellor of the Exchequer spoke of that portion of the Vote of Credit which appertained to the Navy. If ho rightly understood the right hon. Gentleman, he had stated that the Estimate of money expended, or liabilities incurred, which were given to the Treasury by the late Board of Admiralty amounted to £2,800,000; but he now found that the Estimate showed an excess of £850,000.

THE CHANCELLOR OF THE EXCHEQUER

I said that, as far as I could understand in the short time I had been in Office, liabilities to the extent of £500,000 had been incurred before that Estimate was furnished by the Admiralty, which were not included in it. I endeavoured to communicate with the late Secretary to the Admiralty (Sir Thomas Brassey) on the subject, in order that ho might be here; but I found that I was too late, and that he is out of town.

MR. CAINE

said he was sorry that the late Secretary to the Admiralty was not in his place; but in reply to the right hon. Gentleman, although he had not been aware that it was intended to make the statement, ho would say that their information was carefully collected by the late Admiralty from all the Departments; that the Estimates were carefully prepared, and that they were believed at the time to be fair and proper Estimates. He was not greatly surprised, himself, at the assertion of the right hon. Gentleman that there was an excess on the Estimates. It should be remembered, as the Committee knew very well, that it was the Executive which regulated this matter, and that they had not relaxed their preparations for war during the time the late Government held Office; that the mercantile cruisers they had to purchase were in distant parts of the world; and, under such circumstances, it was not easy to estimate what they would cost. The right hon. Gentleman had also referred to the fact that, although the late Government had ordered a considerable number of torpedo boats, they had ordered no torpedo gear, and, therefore, it was assumed that the boats were use? less. He might inform the right hon. Gentleman that this torpedo gear was deliberately omitted. The immediate object for which those boats were ordered was not the firing of torpedoes, but to be fitted up with quick firing guns. It was not considered necessary, therefore, to provide the boats with torpedoes at that time. If the right hon. Gentleman knew what a torpedo boat was, he would know that it was impossible to hit them with torpedoes. It was intended, no doubt, that torpedo fittings should ultimately be put in, and that they should be eventually fitted for torpedo service; but the immediate object the Board of Admiralty had in view was that they should act as torpedo catchers in defence of their Fleet, and not for the purpose of firing torpedoes at the enemy. The real question, however, was this—Did the right hon. Gentleman think that the late Board of Admiralty had spent money unwisely and unprofitably? Because, unless that charge were made out, it was not a serious matter to make an error in so difficult a subject as the calculations of the cost of securing transports, and the fitting out of merchant cruisers, which latter was entirely a new experience to the Admiralty officials.

MR. GRANTHAM

said, he did not know what view the country would take of the statement which had just been made by the hon. Member for Scarborough (Mr. Caine), who appeared to consider an error of £500,000 to be of no importance at all. He thought the statement of the hon. Gentleman showed that no very great care could have been exercised on the part of those who had presented the Estimates to the House. It was a remarkable fact that the Estimates framed by the other side were invariably exceeded, and that it became necessary to present Extraordinary Estimates for additional money which it was subsequently found necessary to spend. He had not risen, however, for the purpose of commenting upon the points at issue between the hon. Member for Scarborough (Mr. Caine), the Chancellor of the Exchequer, and the late Secretary to the Admiralty (Sir Thomas Brassey). He had not been in the House during the early part of the discussion, and had not, therefore, heard the remarks which gave rise to it. His object in rising was to continue, if he might be allowed to do so, the discussion which had been raised upon the question of local taxation. They were indebted very much to the hon. Member for Wolverhampton (Mr. H. H. Fowler) for the figures he had given them, and the speech he had made, because there could be no doubt that it was a very important question; and if there was any foundation for the assertion as to the partial exemption of land from the charges imposed on personal property, he could quite understand the feeling of dissatisfaction that one class in the country should be treated more favourably than another in reference to taxation. He could not go so far as the hon. Baronet the Member for South Shropshire (Sir Baldwyn Leighton) in saying that the facts which had been stated were altogether fallacious; but he would congratulate the hon. Member for Wolverhampton (Mr. H. H. Fowler), if he had been a purchaser of land, that he was able to obtain it at prices at which people in the South of England certainly were unable to purchase. He himself had been guilty of the extravagance of occasionally buying land; but he had never yet been able to purchase land at a price to pay 3 per cent. He accepted the figures of the hon. Member with the greatest pleasure, because he believed he should be able to show from the illustration which the hon. Member had given that the owners of real property were treated with injustice. Now, taking the case of two persons inheriting, the one £50,000 in land, the other £50,000 in Consols; from the income in land the one would not get more than £1,000 a-year, but from Consols the other would get £1,500. It was impossible to take the income derived from £50,000 invested in land at anything like £1,500 a-year. H would illustrate that, with the permission of the Committee, by pursuing the case put by the hon. Gentleman opposite, and he would take 30 years as the period during which two persons— sons—would enjoy the respective properties. At the end of 30 years there would be a great difference between the value received from the properties which would have to bear their share of the Death Duties. The son inheriting the land would have lost £500 for 30 years, or £15,000 would have been taken from the sum he would otherwise have received. The son who inherited Consols would only have to pay 1 per cent Legacy Duty on the amount, whereas the son of the person who had real property would have been mulcted of £15,000; in other words, in the case of two sons inheriting estates apparently of similar value, one of them would, at the end of 30 years, have paid 10 times as much as the other. Ho thought that would show the fallacy, he would not say which his hon. Friend alone had put forward, but the fallacy of those hon. Gentlemen who said that those who were the owners of landed estates were taxed at a much less rate than those who owned personal property. His hon. Friend had also stated that land had, since the days of Elizabeth, been always bought and sold subject to the poor rate. But the Committee would be aware that the rental of land was very different now from what it was in those days. [Opposition cheers] He thought he should catch hon. Q-entlemon opposite with that statement. But what was the increased rental derived from? It was not the result of allowing the land to remain idle—the unearned increment as it was called by some; but it arose from the money actually spent upon the estate. [A laugh.] The late Vice President of the Council of Education (Mr. Mundella) laughed at that; but he was not surprised that the right hon Gentleman was so ready to show his ignorance of the matter. Speaking from experience, he knew that if those who had land wanted to get any return at all from it, they would be obliged constantly to spend money on their estate. He knew of a farm which did not return him the money he had laid out upon it. The Committee would perhaps excuse him for alluding to a personal matter, by saying that he could give chapter and verse to show that there were farms from which the owners were not receiving a farthing profit. He was not a large landowner, hut he had a farm on which ho was not receiving a farthing of rent or anything for the money he had expended upon it; and so it was throughout the length and breadth of the land. Take the case of the estates of a noble Lord in Norfolk and Suffolk, the rental of which had been largely increased by expending money on them; and therefore it would be seen that the poor rate, inherited from the days of Queen Elizabeth, as his hon. Friend said, was charged not upon the unearned increment, but upon the money actually laid out upon farms—which he wished to point out to the hon. Member for Wolverhampton was practically the same thing for this argument as if the property had been sold and changed hands. He hoped he had made it somewhat clearer to hon. Gentlemen opposite, that there was some reason for the difference always made between real and personal property in the incidence of taxation. At the time referred to by the hon. Member for "Wolverhampton, personal property in this country was a mere bagatelle; but it had enormously increased; whereas real property had increased nothing like so much in value, and its increase had been, as he had shown, derived from the money spent upon it, and not from the causes imagined by hon. Gentlemen opposite. Again, he said it was a fallacy to say that the income from the tolls was always devoted to paying off debt; the income of the roads from the old turnpikes was for maintaining the roads, and it was the surplus only that went to the payment of debt. The highways, a portion of the cost of which had always been borne by the land, were now called the main roads of the country, and were for the benefit generally of landowners, farmers, and others living in the localities, whose locomotion was not required to be so rapid as that of the class he represented. It was when the railways had been made that the tolls ceased. [Mr. H. H. FOWLER: When the railways paid.] He was speaking of the turnpikes. One would suppose from what had been said that the money that used to be paid for their carriages went simply to pay off debt; but he had shown that was not so—it went partly to maintain the roads; but after that, there was not sufficient to pay off debt. Having been obliged to differ in toto with a great deal which the hon. Member for Wolverhampton had stated, he would say that there was one part of his speech in which he entirely concurred with him, and that was where he said that that portion of the community whom he described as the industrial middle class paid a greater amount of taxation than the owners of property. That was perfectly true; hut the hon. Member for Wolverhampton appeared to have forgotten that the class he referred to were much more numerous than the class who owned property. The amount which the former paid, although greater in the aggregate, was spread over a larger area, and was nothing like so large relatively as that paid by the latter. He was glad that the hon. Member for Wolverhampton had referred to that particular class as suffering more than any other from direct taxation—that was to say, the class composed of professional men, clerks and curates, because it was a great pleasure to remind the country that it was owing to the Chancellor of the Exchequer of a Conservative Government that a considerable concession had been made in favour of that very class, either by taking off the Income Tax altogether, or by reducing it considerably on incomes under £400 a-year. They had to thank the Conservatives for that; and if it had not been for them the class in question would have been punished as their friends had tried to punish them. Then there was another point to which he would refer. He had seen many statements to the effect that a great deal of the land of the country paid no Land Tax; but he pointed out that nearly £1,000,000 had been redeemed. As far as the land was concerned, no doubt there was only about one-half of it under the Land Tax for the reason stated; but, notwithstanding that, there were many who cried out—"Here is a large portion of the land paying no taxation at all," and they called on Members of Parliament to endeavour to get that land taxed. All he could say was that he paid 4s. an acre for land taxation; and the hard part of it was that when land was bought, they could not treat the Land Tax as they could treat the poor rate and tithe—they had to buy the estate nominally free from Land Tax, the auctioneer not being bound to say whether there was any Land Tax or not. The result was that, as in his own case, land was bought at a price as if it were free from Land Tax, whereas it was paid as a direct tax by the person who purchased the estate. Another consideration, which was apt to be forgotten when people were dealing with the question of taxation of land as compared with the taxation of personal property, was this—if a person had £50,000 left to him, he was taxed to the extent of £500 or £1,000, which amount he could obtain at once by simply selling Stock without prejudicing the whole amount. But with regard to real property the case was entirely different; to raise the tax upon real property by selling a portion of it was like chipping off a portion of a piece of valuable china — the whole suffered by it. The person who had to pay Succession Duty on land, and who had nothing but land, would have to sell or mortgage a portion of his land to raise the money, and in that way persons who owned land were punished. The hon. Member for Wolverhampton had said that there were 4,500,000 houses of a rental of £20 and under— that there were 500,000 of a rental of between £15 and £20. But he (Mr. Grantham) pointed out that those were the houses of the class who were punished most. Those people bought their houses, which, at 20 years' purchase, would be worth £400. But how could they pay Succession Duty? Were they to sell their houses? Perhaps houses in the district were a drug in the market, and they could not sell them. The result would be that a man in that position would have to mortgage his property to raise the duty. But if that was the case with small householders, it was, if possible, still worse with the small landowners, whom the right hon. Gentleman opposite and his supporters were so anxious to see increase in this country. Take the case of a man who was left 20 acoss of land; how was he to raise the money for the duty, seeing that he wanted every farthing he could get for cultivating the farm? He believed that all who went into this question honestly would see that there was a good foundation for the difference in the incidence of taxation, especially as between those who inherited a small amount of Consols, as he preferred to call it, on the one hand, and those who inherited small estates in land. If the views of hon. Gentlemen opposite were carried out, the owners of real property, in the shape of houses of £20 a-year, would suffer in the way he had described; and they would, moreover, affect the small landowners, whose number they desired to see in- crease. For his own part, he would like to see the number of small landowners doubled, because he believed it would be for the good of the country; but he did not think it would be for their own advantage if they were to be taxed in the way hon. Gentlemen opposite proposed. In conclusion, he thanked the Committee for the attention with which they had listened to his remarks, which were quite unprepared, and arose solely on the speech of the hon. Member for Wolverhampton; and he trusted that before the next Election took place hon. Members would have taken more trouble to find out what were the real merits of the case.

MR. ALDERMAN W. LAWBENCE

said, he thought the hon. and learned Gentleman (Mr. Grantham) had proved most satisfactorily to himself—he did not know whether he had to the Committee— that if a man had a large property in land it would be difficult for him to find the money to pay the tax on the estate, because he wanted the whole of his money and income to keep up the land. The argument of the hon. and learned Gentleman applied in the same way to small properties in land. It seemed to him (Mr. Alderman Lawrence) that the Budget of the right hon. Gentleman the Chancellor of the Exchequer was just the Budget that might have been expected he would introduce to the Committee, and he thought it might be looked upon as a provisional Budget of a provisional Chancellor of the Exchequer of a provisional Government; and looking at it in that light they would receive it without objection, and he believed it would be so regarded by the country. Hon. Gentlemen opposite made an excuse by saying that the local taxation of the country had been improperly levied, and that, therefore, they ought at all times to have an improper Budget to make up the amount of Imperial taxation. For his own part, he thought that when a blot was pointed out with reference to Imperial taxation, that blot ought to be removed, and that local taxation should be relieved when there was an opportunity of doing so; but he contended that when they were trying to remedy any injustice it was no answer to say—"Oh, we cannot remedy this injustice until something else is done with respect to local taxation." He thought that for a number of years, in every Parliament, that principle had been carried too far. They were always saying—"Before we can remedy that evil we must alter local taxation, and before we can do that we must remedy something else," and so they went round the circle. He thought that no case had been made out for allowing real property, any more than leasehold property, to escape its just share of taxation; and he could give an instance of injustice in the case of the large estates in this Metropolis. There were large estates, those belonging to aristocratic owners and to Companies, and to individuals, let on long building leases, on which buildings had been erected and great interest created in connection with them; and yet, although largo portions of the original leases had expired, the value of the leases was as great as before. When the owner of a leasehold house died, the property passed by will or devolution, and the successor would have to pay both Probate and Succession Duty. But at the end of, say, 40 years, the leases would fall in, and the owner of the freehold would let the houses for terms of 21 years, at rack rentals, and the Government of the day would thenceforward receive nothing more from the devolution of the leases. He asked the Committee whether it was fair that when this leasehold property devolved on the ground landlord the Imperial Exchequer should receive no further tax from it? The difference between the amount paid by the leaseholders during their terms and that which the ground landlord would have afterwards to pay in respect of the property would be enormous. Supposing that a leasehold house and a freehold house adjoining each other were left severally to two sons; the son who received the leasehold property would have to pay Probate Duty on the full value of the house, and also Succession Duty according to the value of his life; but the son who had the freehold house would simply have to pay Succession Duty. That was an arrangement that was neither fair nor equitable, and there was nothing whatever to justify it. That question had been debated year after year; and although there was no answer to the argument ho had put forward, every Chancellor of the Exchequer had shrunk from proposing a remedy for the removal of that injustice. He admitted that the incidence of local taxation required re-adjustment. The owners in the Metropolis who had let their property on lease had done so on condition that the tenant paid all the taxes. Since the leases were granted taxation had risen to a large amount; but the owners of the property did not contribute one farthing towards it—the occupiers had to pay the whole. He maintained that that was strictly unfair, because very often the occupiers had to pay taxation for the improvements of the neighbourhood, owing to which improvements they would, at the termination of their leases, be required to pay additional rent for renewals. He was rather surprised, although he did not regret, that the right hon. Gentleman the Chancellor of the Exchequer, although he had struck out the payment to the full amount of Probate Duty on freehold property in the manner suggested by the late Chancellor of the Exchequer, had adopted that part of his Predecessor's Budget which had reference to the taxing of corporate property. When the proposal was made by the late Chancellor of the Exchequer he (Mr. Alderman Lawrence), as the Representative of many who had to do with corporate property—Livery Companies and others—said that corporate bodies never objected to have their property taxed in lieu of Succession Duties. While adopting that part of the Budget introduced by the right hon. Gentleman the Member for Pontefract (Mr. Childers), the Chancellor of the Exchequer had let slip the question of the devolution of freehold property both in houses and land. He (Mr. Alderman Lawrence) thought that the very levying of a tax upon corporate property would be a lever to be used for bringing freehold property to pay its fair share of taxation when it devolved by death. It was very ingenious of the hon. and learned Gentleman the Member for East Surrey (Mr. Grantham) to argue that there was a large number of houses in the country so small that it was impossible for anyone succeeding to them to pay anything in the way of Devolution Duty. But those houses, or the great majority of them, were leasehold, and were owned by the large landed proprietors. Whoever succeeded, the houses had to pay Probate Duty upon the full value, whatever it might be. It was not his wish to detain the Committee longer on this question. It was a large question, and one which was much better understood in the country than it was formerly. He was convinced the people would soon be found asking why freehold house property and freehold land property should escape the taxation when they devolved by death any more than leasehold property. The only reason why it had escaped taxation so long was that those who were chiefly interested in that description of property had great power and influence in both Houses of Parliament. He did not anticipate that the Budget of the Chancellor of the Exchequer would meet with any opposition. He had considered it his duty to make those remarks, holding, as he did, the opinion that great injustice was done by the manner in which leasehold property was treated in comparison with freehold property.

MR. R. H. PAGET

said, the Committee were indebted to the hon. Gentleman the Member for Wolverhampton (Mr. H. H. Fowler) for firing off his torpedo, which, although entirely unexpected, had been very successful. The hon. Gentleman was essentially fair; he would not put before the Committee any figures or statements which he did not feel he was thoroughly justified in putting forward; and if anyone was in a position to show him that he had made statements which were not to be supported, he would withdraw from the position he had taken up. Now, he wished to point out to the hon. Gentleman that he had entirely omitted to take notice of that which exhibited a large amount of taxation on real property as compared with personalty. The first thing the hon. Gentleman omitted to notice was that the Income Tax was levied on the gross rental in all cases of real property, that gross rental by no means representing the net rental, but being a sum largely in excess of it. To entirely omit such a fact as that could not be considered a fair proceeding, unless, as he had no doubt, it was in this case an accidental omission. The hon. Member would see that in estimating the difference of the burdens which fell on real property as compared with. personal property he would arrive at an entirely fallacious conclusion, unless he noticed the injury which was done directly to real property by the levying of the Income Tax on the gross value. Again-, it was constantly said that houses must be provided for the labouring classes. He would like to ask the hon. Gentleman if he had taken the slightest trouble to ascertain what was the amount spent by landlords in erecting labourers' cottages? How many thousands and tens and hundreds of thousands of pounds were spent in that way, and with what result? Landlords took money from the funds, or from various investments in stocks or shares, where it was liable to no rating, to employ it in the fulfilment of what they were told was one of their highest duties, and then it became liable to rating. Was it fair to omit such a fact when a comparison was being made between the taxation on real and personal property? Then they were told that it was well that the number of independent owners of land should be increased; that they should resuscitate that great and independent race which he regretted had so much disappeared —the yeoman farmers. But how was the yeoman farmer to continue to exist, even if they were to bring him into possession by unnatural and artificial means, in the face of a severe, an unfair, and a crushing burden of taxation? There was another argument of the hon. Member for Wolverhampton which ought to be met, and it was that the burden of the poor rate was imposed on land so long ago that it was now no burden at all. What did that argument lead to? The burden of the highway rate had been imposed for a certain number of years. If the owners of the land could manage to pay their proportion of the rate for a century, was it to be said that the rate was no longer a burden on the land? The education rate was recently imposed. If it remained as a burden on the land for 50 or 100 years, and land was bought and sold subject to it, was it to be said it was no burden at all? There had been a charge for police on the land for a generation, and land had been bought and sold subject to it. Was it to be contended for a moment that because land had changed hands within the last 20 years, subject to the burden of providing a large portion of the expenses of the police, the police rate was no burden on the land '? The argument of the hon. Gentleman was completely valueless. The fact that they had a right to look at was whether property, be it real, be it persona], be it industrial, be it what it might, paid its full and fair share of taxation? What he claimed for real property was that it should be treated on an equality with income derived from personalty. Ho and all those who had been associated together on the local taxation question for many years past demanded this, and nothing more than this—that the burden of taxation, be it on real property—houses or land—or on personalty, be it for local purposes or for Imperial purposes, should be levied with absolute fairness and absolute equality; then, and then only, they would have no cause of complaint. The hon. Member who last addressed the Committee (Mr. Alderman Lawrence) said that, in regard to the grievances to which he alluded, ho was always put off by being told—"Oh, we cannot remedy this until something else is done." That was the very answer which was always given to him (Mr. Paget) and his Friends. The House had again and again recognized by vote that the bur-don of local taxation was such as to demand immediate attention. How was it that it had never come to pass that effect was given to the Resolution of the House? It was because they had always been put off by the cry—"Wait for your county government; wait for your local reforms; wait till these things take place, and then a financial remedy will be afforded you." But they had waited in vain too long. It would not do to let it go forth that there was anything approaching a shadow of truth in the statement that land escaped its fair burdens. It might be that land escaped certain Imperial burdens; but then it was doubly taxed locally. The hon. Gentleman the Member for Wolverhampton said that the larger the amount raised by local loans the better. Those words of the hon. Gentleman astonished him, because he knew the extent to which local loans had increased. When he remembered that vast sums of debt were being incurred by Local Authorities, it was too much to hear from the hon. Member that the larger the amount raised in that way the bettor. He was afraid the hon. Gentleman had in his mind the borough of Wolverhampton. He (Mr. Paget) recollected hearing in that House the right hon. Gentleman the late President of the Local Government Board (Sir Charles W. Dilke) speak in terms of approbation of a loan of £600,000 which had been signed that day with the borough of Wolverhampton. What had been the result? They had made Wolverhampton a desert. [Mr. H.H. FOWLER: No !] The hon. Member might say no; but he (Mr. Paget) had a personal acquaintance with Wolverhampton. He went there a short time ago to find acres of land lying deserted by the magnificent scheme to which the loan of £600,000 had been applied. The rates of Wolverhampton had been raised to such a pitch that the place had been ruined. [Mr. H. H. FOWLER: No!] It was his (Mr. Paget's) misfortune to have an intimate acquaintance with the town; it was his misfortune to be the possessor of a few acres of land in the neighbourhood; it was his misfortune to know that the rates had been raised to such an extent that they formed such a burden that many places in the vicinity were increasing in population with a rapidity for which Wolverhampton would look in vain. He admitted that there was much to be done in the way of local reforms, and in many of them he heartily concurred; but when it was said that the larger the amount of local loans raised the better, he—

MR. H. H. FOWLER

said, the hon. Gentleman had completely misunderstood him. What he had said was that the more loans were granted the greater was the corresponding profit to the Exchequer.

MR. R. H. PAGET

said, ho was sorry if he had misunderstood the hon. Gentleman. He took down the hon. Gentleman's words, and thought he was placing a fair interpretation upon them. They had, however, to thank the hon. Member for bringing the question before the Committee. They wanted daylight to be thrown upon it. They wanted the whole truth in that matter to be told. If it could be justly proved that there was any class of property which did not bear its fair share of the burdens of the country, he did not care what happened as long as the injustice was removed. If the result of the investigation was to put more taxation on land, good and well; but let the investigation be complete. Do not let them have recriminations—"You are not taxed, and you are not taxed." The owners of land had nothing to lose by a thorough inquiry and by a plain statement of the facts. He wished that the whole truth should be put clearly before the nation at large, so that every man might know how the matter stood. He asked for nothing, demanded nothing, but absolute justice, absolute fairness, absolute equality of taxation for all classes of property in respect of Imperial and local matters.

MR. ARTHUR ARNOLD

said, he wished to detain the Committee by making a few remarks which meant practically a Notice of opposition to one part of the right hon. Gentleman's Budget— an opposition which he was sufficiently impartial to give Notice of when the right hon. Gentleman the late Chancellor of the Exchequer (Mr. Childers) introduced his scheme. His confidence in the personal sense of justice of the Chancellor of the Exchequer (Sir Michael Hicks-Beach) was severely shaken by the right hon. Gentleman's adoption of the proposal of his Predecessor with reference to corporate land. He doubted if the right hon. Gentleman was aware of the gross scandal he had sanctioned by his adoption of that proposal. Take, for example, one case of the injustice which would be permitted. There were some 500,000 acres of the very best land in the country belonging to the Ecclesiastical Commissioners and to the Colleges of Oxford and Cambridge. Under the Income Tax Acts those lands were exempted from Income Tax; and the right hon. Gentleman, himself a landowner, and surrounded by landowners paying Income and Succession Duty, now proposed to the House of Commons to confirm, not the exemption that existed, but to confer a statutory exemption upon those and other corporate lands. He (Mr. Arnold) did not hesitate to say that that was a scandalous proposal. What did it amount to? The late Prime Minister had described the exemption as a grant. The right hon. Gentleman the Chancellor of the Exchequer proposed to take out of every poor man's pocket a certain sum of money in order that he might make a grant to the richest Church Corporation and the richest Universities in the whole world. He ventured to make that observation because he heard his right hon. Friend the Member for Pontefract (Mr. Childers) ask the Chancellor of the Exche- quer when he proposed to take the second reading of the Budget Bill. He presumed the right hon. Gentleman would introduce a new measure, and allow the Bill of the right hon. Gentleman the Member for Pontefract to drop. On the second reading of the Bill he should condemn the exemption which the Chancellor of the Exchequer proposed to the House, unless, indeed, the right hon. Gentleman, on reflection, himself suggested the repeal of the scandalous exemption which it was now proposed to give to corporate and other lands.

MR. GREGORY

said, he would not refer to the burdens on real property, which had been ably stated by hon. Gentlemen who had preceded him; but he would point out that there was a very large class of personal property in the country which passed from hand to hand, and which entirely escaped duty. There was an immense number of houses in the country all well furnished. The furniture was property, yet it paid no duty on transfer. On pictures no duty was paid. There was a large amount of property in plate, jewels, and other similar articles, and yet no duty was paid on its transfer. There were other classes of property, too, of a commercial character, which did not pay any duty. Take the goodwill of a business, which on transfer produced a large sum of money. That was property of a valuable character; but he was not aware it paid any duty. Stock-in-trade too was property, but it was not subjected to duty. The number of financial transactions which wont on from day to day in the City of London which escaped taxation was almost incredible. He did not think, therefore, that in dealing with the two classes of property these considerations ought to be lost sight of. The question of the Succession Duty on land was a very technical one. It was a fact that there was a considerable hardship in respect of the Succession Duty in consequence of the terms used in the Act. Cases were constantly occurring in which property was liable to the 10 per cent duty on account of the use of the words "predecessor in title," whereas it would only be liable to the 1 per cent duty if other words wore employed. With respect to the assessment of the Succession Duty on the life interest, it should be observed that it was levied upon property which was permanent in its nature, and which was, as it were, always under the hand of the Chancellor of the Exchequer; whereas personalty on which dues had once been paid might be carried out of the country, or otherwise disposed of in such a manner as never again to become liable to duty here.

MR. FRANCIS BUXTON

said, he had to apologize for troubling the Committee; but he wished to congratulate the right hon. Gentleman the Chancellor of the Exchequer for the clear statement he had made under somewhat difficult and painful conditions. The proposals themselves were at least simple, and, he thought, on some points, deserved the congratulations of hon. Members on that (the Opposition) side of the House. In the first place, he would venture to congratulate the right hon. Gentleman on his proposal to make an alteration in the Budget proposals as brought in a couple of months ago in that he was not going to anticipate the Sinking Fund of next year. He could not help thinking that the principle of anticipating the Sinking Fund and the paying off of a part of the National Debt was a somewhat dangerous one; and ho was well satisfied that the right hon. Gentleman had thought right to make an alteration in that respect. In other respects he saw that "coming events cast their shadows before." There was in the Budget proposals of the right hon. Gentleman a very dark shadow in many respects. He could not help thinking that, whilst hon. Members on the other side of the House had described the late Budget as a £100,000,000 one, they should describe the present proposals as a 100,000,000 Vote Budget. He could not help thinking that it was, to some extent, a popularity Budget. The effect of the proposals before the Committee was that the Treasury should have power to issue £4,000,000 of Treasury Bills to meet the requirements of the moment. The late Government had given them good hopes that £2,000,000 of the £11,000,000 would not really be required; but now the right hon. Gentleman (Sir Michael Hicks-Beach) came down and asked them to pass a Budget with a deficit of £4,000,000; and, so far as he (Mr. Buxton) could understand it, he did not hold out any hope that any part of that £4,000,000 would not be spent. It was to be regretted that the Committee should be called on to pass such a Budget as this, and he would venture to offer his humble protest against such a system of finance. The right hon. Gentleman had said that he had done his best to carry out a principle which he admitted was a sound one—namely, that on this occasion, when there was a special requirement for the financial demands of the country, some indirect taxation should have been put on as well as direct taxation. The right hon. Gentleman had found, however, after very careful search, that there was no article on which he could put indirect taxation except tea if he gave up beer and spirits. That conclusion showed, to a certain extent, the wisdom of the late Chancellor of the Exchequer in having ventured, just before the General Election, to propose indirect taxation on beer and spirits. The present Chancellor of the Exchequer, as the right hon. Gentleman would, no doubt, admit, had spoken somewhat in favour of a duty on tea; but he had said that such a tax would be too unpopular for even the right hon. Gentleman the Member for Mid Lothian (Mr. Gladstone) to propose on such an occasion as this—just on the eve of a General Election. It was to be regretted that the Chancellor of the Exchequer had endeavoured to make this a popularity Budget to such an extent as not to raise any money by indirect taxation, whilst there was such a large increase in direct taxation. The right hon. Gentleman was going to put 1½d. on the Income Tax, and was about to do that without any indirect taxation; and would there not be some justification required for an 8d. Income Tax if, at the end of the year, they found there was to be a "great change in the financial arrangements of the country?" An inquiry was to be held into the causes of the depression in trade, and in regard to the measures to be adopted to put an end to that depression; and with the hon. Gentleman the present Chancellor of the Duchy of Lancaster (Mr. Chaplin) sitting on the Front Ministerial Bench he could easily imagine that that inquiry was only to have one result, and that they would see a bold return to putting protective duties on foreign imported articles. Why, if that were really to come to pass—if they were really to see this great change in the fiscal arrangements of the country, surely the Income Tax payors could reasonably complain that the Chancellor of the Exchequer, who had just come into power at a little more than a week's notice, had, by his Budget arrangement, ventured to maintain the Income Tax at the abnormally high figure of 8d. They would surely complain that he ought to have waited a little longer, until the result of the inquiry had become known. They would surely say that he need not have levied that large amount upon them at that time. He (Mr. Buxton) must ask pardon of the Committee for having detained it on that occasion; but he felt that with the large deficit they were asked to carry on for the next two years—a principle which he hoped every hon. Member, at least on that (the Opposition) side of the House, would most heartily condemn — some protest was necessary from him. He thanked the Committee for having listened to him.

MR. ECROYD

said, he thought that the hon. Gentleman the Member for Andover (Mr. Francis Buxton) had entirely left out of view, in the remarks he had just addressed to the Committee, the fact that the arrangements proposed by the right hon. Gentleman the Chancellor of the Exchequer were simply those which remained of the recent proposals of the right hon. Gentleman opposite (Mr. Childers), and which had not been condemned by a vote of the House. He, for one, could not admit that that condemnation had proceeded only from the action of Gentlemen who now sat on the Ministerial side. The cause of the failure of the Budget of the late Government was the deliberate refusal of the ordinary majority of the House of Commons to support it. The condemnation which had been passed on it had been the condemnation of a large body of the Liberal Party, who must, accordingly, be held responsible for the disappearance from the Budget of those particular proposals which were condemned by that vote. For his own part, he heartily rejoiced that in a state of affairs almost unparalleled—quite unparalleled in the present generation-—in which an enormous and sudden increase of expenditure for great national purposes had been called for at a moment when trade, agriculture, and industry were all profoundly depressed—the country should be spared an oppressive increase of taxation. The means by which the right hon. Gentleman the Chancellor of the Exchequer proposed to provide for this immense and sudden deficiency were means peculiarly appropriate in the present condition of things. The right hon. Gentleman proposed to borrow by Exchequer Bills. Well, it unfortunately happened that the trade of the country was in so stagnant and miserable a condition that the money which ought to be employed in it was lying, to a large extent, idle and unoccupied; and thus the very circumstances that rendered the country unusually unable to bear an addition to the ordinary burden of taxation enabled the Chancellor of the Exchequer to borrow money at an extraordinarily low rate of interest. He thought no more complete justification of such arrangements as those now proposed could be conceived. He would not attempt to enter into the question introduced in the speech of the hon. Member for Wolverhampton (Mr. H. H. Fowler), which seemed altogether foreign to the subject in hand. This was not the proper occasion for a discussion of the great question of local taxation. That speech was, he conceived, directed not to the Business of the House, but rather to the purposes of the coming General Election. But the charge of acting with a view to the coming General Election could hardly be laid at the door of the Chancellor of the Exchequer in connection with the proposals he had submitted. They were arrangements of an entirely provisional character, and they wore merely made from the pressing circumstances of the year. It was clear it would have been utterly impossible to pass a Budget of complete, new, and necessarily complicated arrangements in the month of July. But the hon. Gentleman the Member for Andover had spoken of the proposed inquiry into the existing depression of trade and industry. The hon. Member assumed that that inquiry was likely to lead to a complete alteration in the system of taxation in this country. If it did so, it could only be in consequence of the facts brought out by the inquiry being of such a character as to lead the great majority of the country to desire a change in the fiscal system, and to consider such a change just and ne- cessary under the circumstances. He (Mr. Ecroyd) should not attempt to prejudge that question. That might be the result of the inquiry, or it might not; but, at least, the investigation would bring to light a great deal that was now hidden from them, and would enable the public to form a much sounder judgment upon those questions in the future than they had been able to form in the past. He was firmly convinced that that inquiry, if fearlessly and honestly conducted, would bring to light a great deal of information not only in regard to fiscal questions, but in regard to other matters connected with commercial and industrial affairs that awaited settlement; and he rejoiced that Her Majesty's Government had had the wisdom and the courage to institute that inquiry at the present time. He believed it would meet with the general approval of the people of this country; but, at all events, he knew it would cause a feeling of the deepest joy and satisfaction in the hearts of hundreds of thousands, if not millions, of the labouring classes. The objections which could be taken to such an inquiry were apparently set forth in an Amendment which the hon. Gentleman the Member for Cambridge (Mr. W. Fowler) had placed on the Notice Paper of the House. It seemed to him (Mr. Ecroyd) that the objection grounded on the possibility of raising expectations which could not be fulfilled was one of the most empty that could be imagined. It was as if, in the case of serious disease having attacked some member of a family, and a proposal having been made to call in physicians, in order to ascertain the nature of the disease, some friend of the family should say—"Do not inquire closely into the nature of this disease or its symptoms, lest you should raise expectations of a cure that will probably be disappointed." That was not sound advice, and he did not think it would meet with the approval of the great mass of the people of this country. He was sorry to detain the Committee at so much length; but there was one other question he should like to make a remark upon. The hon. Member for Wolverhampton had spoken of the fact that the industries of this country were overtaxed. He (Mr. Ecroyd) admitted it to the fullest extent. He believed the industries of this country were over- taxed and overburdened in the strenuous struggle they had to maintain with foreign countries under most unjust and unequal conditions; and there was no burden more grievous than the special taxation levied for local purposes on land and buildings, which were the great bases of all their industries. That heavy and increasing taxation of land and build-ings and the dwellings of the workers was a matter that would certainly have to be inquired into with a view of relieving their industries. In agreeing, therefore, with the statement of the hon. Member for Wolverhampton that the industries of the country were overtaxed, he dissented from the view that they should be relieved by increasing the burdens on land and buildings. He would rather say that the cure was to be found in bringing under the scope of taxation the enormous amount of capital held in this country invested in foreign land and buildings, and foreign manufactories and works, the products of which were brought here, duty free, to compete with our own industries. He believed that in this would be found the chief remedy for the over-taxation of their industries. Relief would be secured in a two-fold sense. They would relieve their own industries from an unjust burden, and, to a certain extent, impose it on the shoulders of those who in all fairness ought to bear a share of it. That would be an inevitable element in the future re-arrangement of fiscal matters in this country. But, as the hon. Member for Wolverhampton had said, all those matters were to be remitted to the verdict of the constituencies. To that verdict he (Mr. Ecroyd) was sure the right hon. Gentleman the Chancellor of the Exchequer might appeal with great confidence, for he had shown a sympathy and consideration for the suffering industries of the nation which had been rare of late years, and which would be highly appreciated by the people.

MR. M'LAREN

said, there was one object which the Committee had to provide for, and that had been frequently alluded to—namely, the subventions to local taxation. That was not the opportunity to discuss that question; but they must take it as a fact, in their general financial discussion, that that item was a growing one in the annual Estimates. They were adding, from time to time, on the Motion of one Party or the other, to that large and important item in aid of the local rates. Whether or not it was a right thing to be done, it was certain it was the duty of the Chancellor of the Exchequer for the time to provide, in some equitable way, for the payment of those subventions. Though they had been increasing year by year, the taxpayer looked into the burdens, and never found that there was any attempt made to adjust the burdens put on the land for Imperial purposes, and bring them into harmony with the burdens put upon personal property. Year after year the assimilation of Succession Duties and Legacy Duties had been spoken of. The subject had been brought forward by the present Leader of the Opposition (Mr. Gladstone), who had admitted that it was a most important question; and yet, on the eve of a General Election, both Parties were compelled to say—" We have come forward every year to reduce the burdens on land, and yet we have never had the courage to make the land pay the same taxes as personal property." There was, as he himself could testify, a strong feeling in the country against the injustice of that state of things. Ordinary occupiers had to pay heavy rates, and they found that although Parliament came forward, year after year, with payments in aid of rates, they never had to pay any less. For instance, the lessees of the land held by the Ecclesiastical Commissioners knew that when they died their successors would have to pay sums varying in amount; but, whatever the amount might be, it was unjustly in excess of what was paid by the owners of the ground rents. A great deal had been done to attempt to show that that was not a real injustice; and the hon. and learned Member for East Surrey (Mr. Grantham) had especially distinguished himself by drawing what he (Mr. M'Laren) considered most fallacious conclusions from facts admitted. The average amount of money paid in Succession Duty was If per cent, whereas on personal property they never got below 3 per cent, and they often went up to 9, 10, and 12 per cent. They on the Liberal side of the House were frequently twitted with not being alive to the claims of the local taxpayer. He would suggest that if the parties who held that opinion would come forward with some bold proposal for equalizing, as far as they could, the national tribute which land and personalty had to pay, they would come with a much better grace and receive a larger share of support on this subject in the House. There was a question of principle behind it; but still they could, some of them, go before their constituents and say that an attempt was being made by some Party in the State to remedy the grievance. He was sorry that this Budget would have to go to the country practically without discussion on its merits; but he thought that before the Tax Bill went through its several stages it would be the duty of the right hon. Gentleman below him (Mr. Childers) to show the fallaciousness and weakness upon which it was based. It was not a right thing that they, on the eve of the Dissolution, should silently allow a Budget to pass which was one of the most improvident and spendthrift which had ever been brought before the House of Commons. There had been one point in recent arguments of the Chancellor of the Exchequer which the right hon. Gentleman himself now said he was unable to substantiate. That close, careful examination he lately gave to the proposals of the right hon. Gentleman the Member for Pontefract (Mr. Childers) went for nothing. The late Government had been turned out on certain statements and financial criticisms; and yet, when they came to ask the right hon. Gentleman's Successor whether he had adopted the very conclusions on which he threw out the late Administration, ho said he was unable to do so. A great deal of interest had been taken in the country a month ago in the statement of the right hon. Gentleman that the duty on tea should be raised as well as on spirits and beer. The Secretary of State for India (Lord Ran-dolph Churchill) had made himself conspicuous in that House and elsewhere in demanding an increased duty on sugar. The country believed that something of that kind would be introduced into the Budget; and yet the House of Commons was now told that no statesman, either Liberal or Conservative, would have the courage to do that. There could be no greater or more crushing condemnation of the manner in which the Government had come into Office than the speech of the right hon. Gentleman that night. He (Mr. M'Laren) hoped the country would take notice of this—that the Government had come into Office on pretences and arguments that they were not able to substantiate. He hoped that in the course of the Autumn they would have on the part of the Leaders of the Liberal Party a pledge that they would undertake the thorough-going reform of what were called the Death Duties, and a proper adjustment of taxation between real and personal property.

MR. HARRIS

said, the hon. and learned Member (Mr. M'Laren) who had just sat down had complained that real property was lightly taxed, whilst unjustly heavy burdens were imposed upon personal property. Well, he (Mr. Harris) happened to be an owner of both kinds of property, and he found that the burdens on his real property were very real indeed—in fact, ho paid at least 10 times as much in the form of various burdens on his land for national purposes as he paid on his personal property. Moreover, worse than that, when applied to land used for productive purposes, it all came out of industrial pursuits, because, as an agriculturist, he was competing on most unequal terms with agriculturists abroad, who had immense advantages over him. He was competing with the owners of virgin soil, and men who took advantage of all the native resources of the soil, on the principle of exhaustion; whilst it was a source of considerable expenditure to him to renew artificially the recuperative energies of the land. Moreover, as a large employer of agricultural labour, he ought to be relieved, in some degree, from contributing to the maintenance of the poor. The real burdens of taxation of all kinds imposed on agricultural land must fall on the industry of farming in this country. The burdens on agriculture, he could assure the hon. and learned Gentleman, were, therefore, very real indeed, and stood very much in the way of the prosperity of this most useful industry. The hon. Member for Wolverhampton (Mr. H. H. Fowler), he understood, had in his speech admitted that the taxes fell very heavily on the industries of the country. He (Mr. Harris) could hear out the hon. Member so far as farming was concerned. He thought the agriculturist ought to stand in a very different position to any other producer, seeing the immense national import- ance of our home supply of food. The hon. Gentleman seemed to think that the landowners had bought their lands with all the burdens on them; but that was not the case. When most of them bought their land it stood in a very different position to that it occupied today. Its produce was protected; consequently the owners and occupiers received most of those charges again in the price they obtained for the produce. Before the English yeoman farmer could take anything for himself, he had to maintain the Church of England and the poor of the country to a very large extent. He was a large employer of labour, and he (Mr. Hams') maintained that if anyone ought to be to a large extent freed from the poor rate it was the farmers. Instead of that, the rate was levied upon the assessed value, which was often more than the net rental; and he had to pay, perhaps, 10 times as much as the nearest tradesman, who was very likely doing a more profitable business, and who occupied a house and small buildings. The tradesman would be assessed for his house and small buildings at one-tenth the amount the farming class had to pay on their business premises. Why was he, a farmer, to pay police rates in excess of others who had movable property which could far more easily be stolen? Police rates ought to be raised from people who owned diamonds and valuable things which were portable, and the agricultural land ought to be relieved to a corresponding extent. Suppose that the distress in the country became much greater than at present. Suppose that the labouring classes became so poor that they rose against the property of the country, what description of property would they take first? Would it be personal property or land? Of course, they would first seize personal property; and so far as personal property was concerned it was impossible, at present, to say that it bore any burdens at all. They could not say whether the Income Tax even was paid on the actual income or not; whereas upon land it was a simple process to levy it upon the gross rental, without any reference to the annual outlaynecessary, and which ought to be first deducted there from. There was no doubt that land at present was not producing anything like the sums which appeared in the Board of Trade Returns. He did not think that the actual amount of rental in England and Wales exceeded £30,000,000, although the Board of Trade Returns fixed it as high as £48,000,000. There was a vast amount of land which was worth nothing at all, and would not pay for expending money upon it in improvements. As a matter of fact, the improvements often cost a lot more than the land was worth; and, therefore, in putting taxes upon the land, they were really placing them upon the improvements. He considered it most unfair to tax the agricultural land, and by that means prevent the farmers and owners of land in this country from competing with the farmers and owners of land abroad. The farmer ought to be taxed on nothing beyond the value of his house, and then he would pay quite as much as other people. Hon. Members opposite imagined it to be a fine thing to have all this food coming into the country from abroad, and, no doubt, it was a good thing for the poor to have cheap food; but it would be far more satisfactory still if the English farmer had the opportunity of producing it. The more taxes they placed upon an industry like farming, the less able the farmers were to compete with foreigners. He thought that real property, such as agricultural land, ought to be treated as industrial property. If the burdens on the land fell upon the landlord, ho was unable to do what he ought to do for the tenant, and if they fell on the tenant he could not compete with the foreigner; whereas if they fell on the man who farmed his own land, how could he possibly compete with the virgin soils of foreign countries? There never was a time in the history of England when agricultural land required more doing to it in the shape of improvements, all over the country, than now. But they found hon. and right hon. Gentlemen opposite going all over the country and making speeches about the extra burdens which ought to be put upon it, and the ransom due from it. How, under such circumstances, could they expect the landlords to do anything for their tenants, notwithstanding the fact that there never was a time when the tenant farmers wanted more doing for them? The landlords desired to lay out money in improvements; but they were afraid to do so. He (Mr. Harris) during the last 15 years had laid out more money in agricultural improvements than his estate was originally worth; but for every extra £100 he laid out, he had a fear as to what the result would be. He knew very well that it was not a question of taking £ 100 out of Consols, and losing the 3 per cent interest which he would otherwise got upon it; but it was a question of the rates that would be placed upon the land afterwards. It, therefore, became simply a question of a reduction of capital, and how could improvements in farming be expected if they were continually putting heavier burdens on the soil, which was the raw material which the farmer used, just as much as cotton was the raw material which the manufacturer used? He was willing to admit that there ought to be one rule in regard to the succession of property; but they must oppose anything extra in the shape of a btrrden being put upon the land, whether a Death Duty or anything else, until the grievances of which the agricultural interest complained had been removed. All the burdens which now lay on land had been put upon it under totally different principles from those which now existed; and when the repeal of the Corn Laws took place those burdens ought to have been removed at the same time. When farms were put up in the market, they found no bidder for them. There were at that moment farms in Essex, Suffolk, and Norfolk, which were let simply upon the terms that the tenant should pay the ordinary outgoings, but that he should actually pay no rent at all. He saw no probability of grain or wheat going up in price. He was afraid it was much more likely to go down; and yet, under such circumstances and at such a time, it was proposed to increase the burdens. It seemed to him utterly absurd and ridiculous to propose such a thing, and he was glad that the Chancellor of the Exchequer had put his foot down in the interests of that which would be found to be the staple interest of the country, when all other industrial interests were gone.

GENERAL SIR GEORGE BALEOUR

was understood to say that as the right hon. Baronet (Sir Michael Hicks-Beach) had indicated that it was highly probable the present Government would be in Office when the next Budget was brought before the House, he would express a hope that the right hon. Gentleman would turn his attention to the heavy duties now levied on gold and silver plate, and to the interference with free trade by hall marking, and would see his way to abolishing those duties. There could be no doubt that these interferences impeded trade, and thereby diminished the demand for skilled workmen. It would be found that two or three days' employment in the week were very general. The result was that the fine hand work of gold and silver manufacturers was less advanced than it would be if the artizan directed all his time to the art. The tax yielded but little to the Treasury, though the rate of taxation was heavy, being at least 30 per cent on the value of the metals used. A Select Committee had already reported in favour of the abolition of duties, and during the last four years the Chancellor of the Exchequer had been in favour of abolition. The prevailing cause had been the fear of a heavy drawback being demanded by the holders of stocks. That fear ought not to prevent abolition, seeing that one year's income, say £70,000, would suffice to repay the duties levied for one year's stock.

SIR GEORGECAMPBELL

remarked, that the Chancellor of the Exchequer had said that he had the task of providing a sum of money equivalent to that which would have been produced if the proposal of the late Government for imposing increased duties upon spirits and beer had been adopted. The right hon. Gentleman had done it by the simple process of not finding the money at all, but borrowing. Although he (Sir George Campbell) thought it was bad finance not to provide for the expenditure of the year, he was afraid that the course which had been taken could not be avoided in the present instance; and, therefore, he would say no more upon the subject. But they had now reached the enormous expenditure of £100,000,000, and had got to find £9,850,000 upon a Vote of Credit; and he wanted to know what the Government were spending their money upon? In regard both to the Army and Navy expenditure, he wished to know how the money was going? In particular he desired to know what the Soudan War, which was estimated to the 31st of March last to cost £1,600,000, had really cost, because they had already been told that the Estimate would have to be extended to £4,500,000; although, at a subsequent period, they were informed by the late Secretary of State for War (the Marquess of Hartington) that as the war in the Soudan had been abandoned that expenditure would be very materially diminished. It did seem somewhat extraordinary that during the whole of last year the war expenditure should have been £1,600,000, and for this year should have been increased to £4,500,000, when the Force was returning from Khartoum. Was it proposed that they were now to expend that large amount of money after the decision which had been come to for the withdrawal of the troops? He wanted to make the matter perfectly clear to the country what the real expenditure of the Soudan War was, and he wished to distinguish between the Soudan War proper, and the expenditure now going on for the maintenance of something like 20,000 troops in Lower Egypt. He did not know whether he made himself perfectly clear; but what he wished to have was the total cost of the war expenditure in the Soudan proper until the withdrawal of the troops, and what the expenditure was which was being incurred in maintaining their troops in Lower Egypt. He desired to learn what the military expenditure was which was included in this large sum of money, and what other kind of expenditure was also incurred under the head of military expenditure. There were one or two other points upon which he would like to say a word before he sat down. He had understood the right hon. Gentleman the Chancellor of the Exchequer to say that he did not propose to prosecute the proposals of the late Government in regard to the Wine Duties. Was that so or not? [The CHANCELLOR of the EXCHEQUER: Yes.] Then he would express his great pleasure that the Government had arrived at that decision. He thought it was monstrous that while whisky was paying 10s. a gallon, port and sherry should only pay 1s. a gallon. He did not propose to enter into a discussion of the taxation upon property, which had occupied the greater part of the evening. Ho thought the Committee were greatly indebted to the hon. Member for Wolverhampton (Mr. H. H. Fowler) for bringing the subject forward. He did not intend to discuss the question of taxation as affecting real and personal property, because all must admit that that was a very difficult question indeed. But he entirely concurred with the hon. Member that property in general was not sufficiently taxed, and that there was good ground for imposing further taxation upon it, and remitting a portion of that which fell upon industry, except where it was imposed upon articles of an injurious nature. He hoped that, whatever the ultimate measures taken might be, this would be borne in mind. For his own part, it did seem to him that property was very insufficiently taxed, and that the labour and industry of the people were very much overtaxed. He thought it was quite right to abandon any attempt to increase indirect taxation. The incidence should be adjusted; but, that done, he thought the country ought thoroughly to understand that if they wont to war the people must pay for it. What he should like to see was more activity on the part of the Government in preventing war; and they would be materially aided in effecting that object if the people were made to feel the pinch of war.

SIR WILLIAM HARCOURT

I only rise to make a single remark on two very striking subjects to which we have listened to night. We have heard the voice of Protection very plainly enunciated by the hon. Member for Preston (Mr. Ecroyd) and the hon. Member for Poole (Mr. Harris). The hon. Member for Preston has given us a very instructive commentary on the real object of the Commission of Inquiry that has been suggested. We have been told that there is no doubt what its end will be, and its object would appear to be to establish a proper basis for the restoration of the protective system. I gathered that distinctly from the speech of the hon. Member for Preston. But the hon. Member for Poole has also made a very able speech, from his point of view, with reference to the agricultural interest, and has spoken of the distress of that interest. Now, the existence of that distress I do not for a moment deny, and I regret it as much as the hon. Member does; but the hon. Member is, happily, a comparatively young man, and he looks on agricultural distress as a new thing in the trade of this country. For myself, I have not a personal recollection of the state of things which existed in this country 50 years ago, when Protection was in full force; but I know that at that time the depression of the agricultural interest was as great—nay, greater—than it is now. ["No!"] Yes; I have read the Reports of Commissions. You talk of Commissions now to inquire into the distress of the agricultural interest; but go back and read the Reports of Commissions on the condition of the agricultural interest between the years 1832 and 1837. This House was then perpetually appointing Committees, and Commissions of Inquiry were frequently issued to inquire into the state of the agricultural interest; and if hon. Members will read the Reports and statements of these Committees and Commissions as to the condition of agriculture when Protection was in full force, they will find that the condition of that interest, under the full force of protective duties, was far worse than anything that exists at present. You talk of the price of wheat. As to the price of wheat, I venture to say if you will go back to the time of which I speak you will find that about the year 1835, and a year or two before or after that period, the price of wheat was about the same as it is now. ["No!"] Yes; it was about 33s. or 34s. a-quarter; and that was in the palmy days of Protection. That is not all, because the price of meat then was not half of what it is now. Therefore, I say that if you take the question of prices, or the result of those prices, you will find that there was, at that time, a condition of things at least as bad, I venture to say, as anything we have now. I remember that when these same questions were raised some eight or ten years ago, when I represented Oxford, I found occasion to allude to them; and I recollect that Mr. Henley, a great authority on those subjects in this House, said—"You are perfectly right; we now know nothing at all compatible with the condition of things in 1835." Mr. Henley added—"I recollect the time when in Oxfordshire"—Oxfordshire is now, I am sorry to say, one of the most distressed counties in England —"all round me there was farm after farm out of cultivation, because they could not afford to pay rates." Now, I am not using the language of contro- versy, but am rather referring to these things as matters which may afford some consolation to the agricultural interest, because, if we can look back to periods when the disease has been quite as serious as it is now, and was followed by recovery, why may we not expect to realize the same experience again? I see that an hon. Gentleman opposite shakes his head and is determined to despair; but I would recommend the hon. Gentleman not to think that Free Trade is always to cause low prices for agricultural produce; and not to think that Protection can always be the remedy for them; for there is no doubt whatever that throughout the world—although it is a difficult thing to explain, and I know of no economist who can pretend to explain it—there has been a universal wave of depression. But does it exist in England alone? Let us go to America, about the most Protectionist country in the world, and we shall find trade more depressed than it is here. Look at the iron trade of America, the corn trade, and all the industries that are protected to the highest possible degree in America, and where do we hear such loud complaints of de-pression? It is a remarkable circumstance, and I do not pretend to give any explanation of it; but it is an entire mistake to suppose that the depression of trade which exists, whether in our textile industries, our iron trade, our corn trade, or our agricultural interest generally, is a thing peculiar to this country. We know perfectly well that it prevails universally in every country in the world. I only venture to make these remarks after the Protectionist speeches we have heard from the hon. Member for Preston (Mr. Ecroyd) and the hon. Member for Poole (Mr. Harris).

MR. ECROYD

denied having said a single word that could be construed into advocating Protection. He was absolutely opposed to it.

SIR WILLIAM HARCOURT

Then my oars must have deceived me, and I am glad to hear the denial, for I was afraid that his abilities had been enlisted in that cause. I understood him to say that he denied that those taxes should be raised from the foreigner; but if I am mistaken I am glad to be corrected. But I do not think that I placed a wrong interpretation upon the remarks of the hon. Member for Poole (Mr. Harris), or that I misrepresent the views of the right hon. Gentleman the Member for the Duchy of Lancaster (Mr. Chaplin), when I say that he sometimes advocates a 5s. duty on com. It is thought that a 1s. duty on corn here or there under the influence of Protection will repair the agricultural distress which now exists. I can only hope that the agricultural interest, which recovered from the very serious depression of 50 years ago, will recover again without having recourse to quack remedies, which people are very apt to administer to themselves when suffering.

MR. STORER

remarked that they were forestalling, in a discussion upon the Budget, a question which would probably come on for discussion later in the Session, when the whole subject would have to be considered. There was certainly no time for entering into it fully on the present occasion. At the same time, he entirely refused the sympathy and comfort which the right hon. Gentleman the Member for Derby (Sir William Harcourt) offered to them, and which he seemed to think the agricultural interest was so much in need of. The right hon. Gentleman said he knew that agricultural distress was existing at the present moment, and he deplored it as much as anyone; but, at the same time, he said that things had been as bad before as they were now; and, therefore, they were likely to recover again as they had done in times past. He (Mr. Storer) would remind the right hon. Gentleman of this fact—that things might have been bad in the past so far as the agricultural interest was concerned; but it was doubtful whether the price of corn had ever been so low as it was now for 100 years past. He would ask the right hon. Gentleman to consider the subject a little more carefully, and to go into it a little more deeply; and he would find that when prices were low formerly it was due to a succession of good seasons when there had been good harvests. Having farmed for 50 years himself, he knew that to be a fact. It was quite true that when there had been a famine in the country corn had been at a very high price; but the right hon. Gentleman did not take those facts into consideration. Hon. Gentlemen opposite set up theories without taking into consideration the fallacies they preached, or what the condition of affairs formerly was. In olden times they were not subjected to the competition of the whole world; but they occupied a very different position now. Ho ventured to say that if Sir Robert Peel and Mr. Cobden were living now they would be Protectionists. He had in his possession some of the prize essays issued by the Anti-Corn Law League in favour of Free Trade in 1846. He had read them very carefully, and in every one of them the main point was that if they led the way in the adoption of Free Trade every country in the world would follow their example; and yet, after 40 years of that experiment, where were they? Not only every farmer, but every man connected with trade and business in the United Kingdom, and particularly with the corn trade, knew perfectly well what was the cause of the low price of corn in the country. They were told by a great authority they did not often see in the House now—the right hon. Member for Birmingham (Mr. John Bright)— that all they wanted was a good season, that they had had a succession of bad seasons; but the moment the sun began to shine, and they had a good season, everything would come right again, and they would have fair prices. But what occurred last year, when they had the finest season they had had for years? Why, as a matter of fact, it was one of the worst for the farmers. In regard to the immediate subject before the Committee he desired to say a word upon it. Hon. Gentlemen opposite appeared to be the advocates of labour; but they forgot that in placing taxation upon land they were putting it upon the raw material—land was the raw material of agriculture, just as cotton was the raw material of calico, and iron the raw material of machinery. If they were to tax the land further, as the hon. Member for Poole (Mr. Harris) had ably pointed out, they would render the farmers still more unable than they would otherwise be to compete with the farmers abroad. All that showed the fallacy of the arguments of hon. Members opposite; but hon. Members, no doubt, insisted upon them with a view of influencing the next General Election. The agricultural labourers, however, fully understood those things. They knew the fallacy of the Free Trade views which had produced so serious a fall in their wages, and they knew that agriculture was year by year departing from the country—-that year by year more land was taken away from the plough and laid down in grass. Therefore, the depression was brought to bear not only on the farmer and occupier, but on the labourers themselves. The result was that meetings were being held to consider the necessity of the State-aided emigration of those who ought to be employed on the land; and some hon. Gentlemen proposed to divide the land into small holdings and establish peasant proprietorship, which would make them merely a great nation of paupers, who would be obliged, in the long run, to protect themselves against competition from America and other countries. The first cry they would have from the labourer would be that which had proceeded from France— namely, that they should protect themselves from the labourers of other countries. All those were matters which ought to be taken into consideration, and ought to influence the public at the next General Election. He trusted that they would receive careful attention, and that the people would not be led away by delusive statements such as those they had heard that night.

MR. ILLINGWORTH

said, he recognized the fact that this was only a makeshift Budget, and he thought the circumstances of the case entitled the Chancellor of the Exchequer to leave the preparation of a new Budget until next year. Still, the Conservative Party had before them a magnificent entertainment, in which they were called upon to swallow every profession, every pledge, every principle, and every protest in which they had been indulging for the last five or six years. In regard to the Budget of the right hon. Member for Pontefract (Mr. Childers), it was objected that so much of the burden of the increased taxation was to fall upon real property. But what had the right hon. Gentleman opposite (Sir Michael Hicks-Beach) done? He had maintained the objectionable provisions of the Budget of his right hon. Friend, and had not had the courage to put upon labour and the industrial classes of the country that share of the increased burden which was more than ever necessary if the working classes were to have a monopoly of political power in the future. He could only say, in regard to the enormous sum they were called upon to meet, that ho thought it would have been, in the long run, more honest and more courageous to have found the means this year of meeting this extraordinary expenditure. Hon. Gentlemen opposite had no right to say that their present obligations were incurred by the late Government, because the fact was that in the most criminal part of the expenditure of the late Government hon. and right hon. Gentlemen on the opposite side of the House had participated. They had fully shared in the extravagance which had been displayed in connection with Egypt, South Africa, and Afghanistan. As a matter of fact, what right hon. and hon. Gentlemen opposite had maintained, and it was the only matter upon which they raised an objection, was that the Government had not made sufficient provision, that the Army and Navy were too small, and that more money ought to be squandered upon them. It was, therefore, impossible for them to appear at the next General Election and say that the responsibility rested with the Liberal and not with the Conservative Party. He was free to confess that the right hon. Gentleman had failed in courage in submitting a Budget in which both ends could be made to meet. It was a remarkable thing that the present House of Commons would at one moment indulge in enterprize which involved such an enormous and extravagant outlay of money, and yet were constantly, at intervals, treating the country to jeremiads about the depression of agriculture, asserting that the landlords were ruined, that all the industry of the country was in a miserable condition, when, forsooth, the recollection of this state of things did not damp the ardour of their enthusiasm whenever the question was the squandering of the public money. The question as to whether they might not resort to Protection had been again raised that night; and it had been suggested that, perhaps next year, when they knew something more of the fiscal condition of the country, it might be possible to place additional burdens upon some articles of import, so that the taxation might fall on the right shoulders. But he ventured to think that the next Parliament would look at the matter from a very different standpoint. The fact was that, although the suffering was universal, the outcry came from a small class, and that, too, the wealthiest and most influential class in the country. Commerce was equally depressed with agriculture. Those who had property locked up in their industries knew that the depression had been quite equal to that which had fallen upon land. He wanted to know, then, why the cry should only come from one quarter? As a matter of fact, it came from the idle class alone —from that class which, in the past, had enjoyed a monopoly of political power in both Houses, and a position such as no other class in the world had ever occupied. The result had been that they had been pampered, privileged, and extravagant; and. now, when they were returning to a more natural condition of things, they began to make the House and the country ring with their complaints of the suffering which had fallen upon them. He could feel for any depression, loss, and suffering which came upon any class; but he ventured to tell the landlord class of this country that land would not go out of cultivation so long as rent accrued to landlords, and rents must be foregone if they could not be borne, if the farmer was to live on the results of his industry. The hon. Member for Poole (Mr. Harris) had put his own case, but it was an exceptional one. The hon. Member appeared in the double character of landlord and farmer, and he had mixed up the two. He had put the case in such a way as to give the Committee to understand that the farmer would have to bear the burden of these increased rates; but he (Mr. Illingworth) contended that whatever burdens fell upon the farmer must go towards the reduction of the rent which the landlord received, just as the landlords of the country had to bear the burden of an Established Church. Burdens must diminish rent, both ecclesiastical and lay. The tithe was a permanent charge, and all the farmers must know that the rent of the lay landlord must shrink more and more before any relief would come to them in an abatement of the amount of tithe. He hoped the country would take to heart the lessons of the last few years. He confessed that he was amazed at the cowardice which had been manifested by the Chancellor of the Exchequer and by the House. The country had been involved in millions of expenditure for such fanciful objects as the possession of the territory of the Ameer of Afghanistan. Surely if they were to take up this Imperial position—if they were bent upon setting everything right in every part of the world, they should show that they had the courage to meet the expense of it. They ought not to begin in a cowardly spirit by piling up debits and setting aside Sinking Funds. He did not regret the latter step. Ho believed it to be appropriate enough that the National Debt should be reduced whenever there was a surplus from the increased taxation levied on the people of the country. But it was monstrous to pretend to reduce the National Debt, and then add to the taxation of the country year by year at a period of universal suffering and depression. The lesson to be learned from what was now taking place was that they should mind their own affairs more completely. He believed that the country would impress upon those who would be elected in the next Parliament the absolute necessity of acting in a very different spirit in regard to these foreign enterprizes. He believed that there was a wide-spread feeling among all the industrial classes of the country that they had no necessity to seek for more territory, or to enter into undertakings that were likely to involve loss of life and treasure to this country. He rejoiced that this dilemma had arisen, and that this check had been given to both Governments. He did not hesitate to say that he was reconciled to the loss of power by the late Government, when he recollected the supreme folly of which they had been guilty when indulging in the enterprizes to which he had referred. He ventured to warn the present Government that if anything happened to them in consequence of the foreign policy of the late Government, it would be due to the brave words they had used when sitting on that side of the House, and when they did not feel the responsibility of Office. Now that they were in power they felt no more desire to be brave than their Predecessors had been. He would only tell them that unless they wished to find themselves annihilated as a political Party they must lay it to heart that the working classes of the country would not tolerate that the supreme interests of the people should be trifled with in the future as they had been for so many years in the past.

MR. BIDDELL

said, the hon. Gentleman who had just spoken said that this matter had nothing to do with land going out of cultivation; but nothing that the House could do would prevent the owners of land ceasing to cultivate arable land or turning it to that which was the most profitable use. What was the experience the farmer was now gaining? It was that he could not cultivate the land without incurring great loss. Whenland wasturned into pasture, about £1 per acre for labour would be saved; the result being that the surplus agricultural labour flooded the towns. What was now going on he believed would go on to a much greater extent in the future, and the result would inevitably be a large diminution in the agricultural population of the rural districts. He had heard the hon. Member for Ipswich (Mr. Jesse Collings) say that the large towns were being crowded by the influx of rural labour. If so, it was this fact that had caused it. He altogether disagreed with the speech of the right hon. Gentleman the Member for Derby (Sir William Harcourt) as to prices. There was evidently something wrong in the conclusions which the right hon. Gentleman had formed. If his (Mr. Biddell's) memory was right, the price of wheat had not been so low for 100 years as it was now. Wheat-growing did not pay, therefore one-fourth of the arable land was no longer of that crop as formerly, but was allowed to remain in artificial grass. The low price of corn produced by an abundant home harvest, was a very different thing from a low price of corn produced by importation from abroad. It was the importation from other countries which ran down prices. It was most delusive for hon. Gentlemen opposite to contend that the low price of corn was indicative of prosperity and gain to the country. Had they ever had such universal depression in the whole country as they had now? They seemed to forget that a great part of the population were producers; they forgot their interests as producers, and they were in the habit of looking at them only as consumers. He advised the Committee to bear in mind the maxim, he thought, of Adam Smith— "Take care of the producer, and the consumer will take care of himself."

THE CHANCELLOR OF THE EXCHEQUER (Sir MICHAEL HICKS-BEACH)

I hope that, at any rate, I may draw this favourable conclusion from the discussion which has taken place—that hon. Members have not found very much to object to in the proposals which I have laid before the Committee. The debate has certainly been one of the most discursive that I have ever heard in this House. It has ranged over questions of Protection and Free Trade, the respective burdens of real and personal property, the Succession Duties, and even, I think, the hon. Member for Bradford (Mr. Illingworth) could not keep away from his old friend the Established Church. I hope the Committee will excuse me if I decline to go into all these topics. The right hon. Gentleman the Member for Derby (Sir William Harcourt) was good enough to allude to the intention of Her Majesty's Government to institute an inquiry into the depressed condition of trade and industry. He stated that our intention, in proposing that inquiry, was to establish a proper basis for a return to the Protective system. I can only say that I entirely repudiate any such interpretation of our proposal. I was glad to notice, however, in the latter Part of the right hon. Gentleman's remarks, that he practically enrolled himself among the supporters of such an inquiry; because, although he gave such a description of it as I have quoted, and informed the Committee that there had been in times past, as we all know, great depression in trade and agriculture in this country, yet he admitted very frankly that there was at this time a universal wave of depression which no economist could explain. Surely, that being so, I may fairly count on his support to our proposal to institute an inquiry into the causes of that depression which no economist can explain. The hon. Member for Wolverhampton (Mr. H. II. Fowler) was the first to deviate, if I may so call it, from the subject which I brought under the notice of the Committee. He delivered a speech, with all the ability which we know he possesses, on the question of the Succession Duties and the relative burdens on real and personal property. Now, it occurs to mo that if—as we some- times hear—it was for the interest of the late Government to have prolonged the debate upon the Amendment which I ventured to move upon the Budget of their Chancellor of the Exchequer, it was a pity that the speech of the hon. Member for Wolverhampton was not delivered upon that occasion. I do not intend to enter into all these topics, and only desire to answer some of the questions which have been asked me with reference to the proposal which I have made this evening. The hon. Member for Kincardineshire (Sir George Balfour) has asked me whether I would undertake to consider the question of abolishing the duty on gold and silver plate? I should be glad to consider the question of abolishing any duties at all; but I must say that I have never felt any great sympathy with those who wish to do away with the particular duty mentioned by the hon. Member, because it certainly appears to me to be a duty upon a very great luxury, whatever effect it may have upon the particular trade engaged in the production of gold and silver plate. The right hon. Gentleman the late Chancellor of the Exchequer (Mr. Childers) asked me whether it was my intention to abandon the proposal which was contained in his Customs and Inland Revenue Bill for enabling the Treasury to raise the limit of the first-class wines to 30 degress? I may say that it is not my intention to proceed with that proposal, which, I may add, was made at the time when the late Government had every cause to anticipate that they would obtain certain commercial advantages from Spain. That proposal may or may not have been warranted on various grounds; but I do not think, under present circumstances, that it would be a very wise one to adopt. I am as anxious as the right hon. Gentleman can be to establish better commercial relations with Spain, and the best efforts of the Government will be devoted to that end; but I do not think that that end would be furthered if now I were to take power to do that which the right right hon. Gentleman proposed to take power to do in the earlier part of the Session. The right hon. Gentleman also asks me whether I have made any allowance, in calculating the deficit, for the abandonment of the 6d. telegram system? I did not make any allowance for that at all, and for this reason—that the Bill is still before the House; and from what passed the other night the House is aware that the question, whether it can or cannot be proceeded with, is still under the consideration of the Government. I may venture to say, on the part of the Treasury, that I cannot agree to any proposals which may involve a larger charge than the Bill proposes. The hon. Member for Salford (Mr. Arnold) and the hon. Member for the town of Cambridge (Mr. W. Fowler) made some observations upon the exemption of Corporations from Income Tax. The hon. Member for Cambridge, I think, alluded to the exemption of the Ecclesiastical Commissioners. That is a matter which I do not think I can enter into now; but this observation occurs to me in regard to it —that the Ecclesiastical Commissioners and Bodies of that kind are practically Trustees of property, the receipts from which they hand over to certain persons in return for duties performed, those persons paying Income Tax upon the revenues they thus obtain. That, therefore, would be a reason for the existence for what at first sight might appear to be an anomaly. I do not quite understand the argument of the hon. Member for Salford (Mr. Arnold) on the question of the exemption from taxation of Corporate property; but I will postpone any remarks that I may have to make upon that subject until a later stage of the Bill. I do not think that any exemption is conferred on Corporate property beyond what it now enjoys. The only other point I will now notice is that mentioned by the late Chancellor of the Exchequer (Mr. Childers) as to what day I propose for taking the second reading of the Customs and Inland Revenue Bill. If the Committee will consent— and I believe it will be quite in Order for the Clerk at the Table to read the necessary Resolutions after this Resolution has been voted—I might then obtain leave to introduce the Bill. In that case, I should propose to take the second reading on Thursday next, which would afford time for the consideration it requires. I have only now to thank the Committee for their kindness to me this evening.

Resolution agreed to; to be reported To-morrow,

Committee to sit again To-morrow.

1st, 5th, 6th, 12th, and 14th Resolutions [1st May] read.

Bill ordered, to be brought in thereupon by Sir ARTHUR OTWAY, Mr. CHANCELLOR of the EXCHEQUER, and Sir HENRY HOLLAND.

Bill presented, and read the first time. [Bill 22.3.]