SECOND READING.

HC Deb 23 April 1888 vol 325 cc190-295

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. Chancellor of the Exchequer.)

MR. W. E. GLADSTONE (Edinburgh, Mid Lothian),

in rising to move as an Amendment— That in the opinion of this House, after Parliament shall have made the appropriations it may deem just in relief of local rates, the Duties accruing upon deaths should be so fixed as to equalize the charge upon real and personal property respectively, said: Mr. Speaker, I have been sincerely desirous of compressing my remarks upon this important subject within a very limited space for the convenience of the House; but there is one thing which would be still more convenient for the House, and more detrimental to the public interests involved, than the length of any statement of mine, and that is that a subject of such importance should be treated with less of detail than is absolutely necessary for its full comprehension. Therefore, I am afraid the only promise I can make is that I will studiously endeavour to avoid in my remarks all that is irrelevant or of secondary importance, and confine myself to an endeavour to give a full and clear idea of my meaning in regard to the important Resolution which I have laid upon the Table of the House, and the reasons which appear to me to make tho moving of that Resolution a matter of urgent and imperative duty. I have also to express my regret that I have now to do what I do not recollect to have done on any former occasion, and that is, to move an Amendment on the second reading of a Bill of this nature. It is a practice, however, not at all unusual, sometimes justifiable, and sometimes even necessary, yet still it is one in respect to which certainly, in my opinion, founded on experience, ought not to be resorted to without strong reasons. On the present occasion my reason is the strongest that can be conceived, and it is this—that it is not in my power to raise the question or make the proposal which I wish to make in any other manner. In Committee on the Bill I should not be permitted to move a general Resolution, and it would be very improper if I were to make any such attempt, as the only other way in which I could proceed would be to move an increase of duty, and an increase of duty, I need hardly acquaint the House, would not come within the powers of the Committee. Therefore, I am reduced to the necessity of moving an Amendment on the second reading of the Bill declaratory of a general principle, or I must forbear raising it at all. I think the House will see, as I proceed, that to forbear to raise it at all would, on my part, considering the gravity of the interests involved, be a failure of duty, and I think the House and the Government will be disposed to admit that I am justified in taking this course, as I think it will see that I have chosen the only available course open to me for submitting a question of public importance to the consideration of the House. Further, I may say that I rejoice very much that I am not in the condition of one who, from the Opposition Benches even, is proposing financial changes which would increase the financial difficulties of the Chancellor of the Exchequer. On the contrary, although no reference is made in the words of my Resolution to the precise rates of duty, it is perfectly well understood that the policy which I wish to recommend to the House is a policy of equal Death Duties upon realty and personalty; and that as it is an opinion widely entertained, so it is art opinion strongly entertained by myself that the Death Duties ought to be equal upon realty and personalty, the effect of which would be to augment the funds at the disposal of the Chancellor of the Exchequer. I hope I shall not be deviating from the subject before me if I say that, in our view, this augmentation would be particularly seasonable and advisable at the present moment, when there are before the House a number of proposals for augmenting and increasing certain taxes, in respect of some, if not all, of which I am afraid it is impossible not to entertain the gravest doubt as to their effect on trade and industry. We may, therefore, relieve our consciences by the reflection that we are endeavouring to place in the hands of the Government additional means which might enable them to exercise greater freedom in waiving some of the financial proposals they are going to bring forward for the further imposition of taxes upon the public than they might be able to do unless the Motion I propose were adopted. I think I shall best serve the purpose I have in view, and the convenience of those who may be inclined to support or oppose the proposition I shall lay before the House, if I at once, in clear and precise terms, state the main propositions I shall endeavour to establish. They are five in number. The first of them is this. That the present enormous disparity under the Death Duties between the charge upon realty and the charge upon personalty has only been tolerated because of the advantage enjoyed by personalty in respect of its limited contribution to the rates, and, in regard to a great portion of personalty, its not being liable to any contribution at all to the rates. That is my first proposition. My second proposition is that on an occasion which Her Majesty's Government have very properly chosen for the opening up of the whole of this wide and complex subject the advantage now conferred upon personalty ought to be entirely cancelled and withdrawn, and that the proper mode of withdrawing it is by adequate aids to rates from Imperial sources, My third proposition is, that under the new proposals of the Government, including those which will come into operation next year, taking the plan of the Government as a whole, between £4,000,000 and £5,000,000 levied on personalty will go in aid of rates, and principally in aid of realty, or the landed interests of the country. My fourth proposition is, that, in the event of the adoption of the proposals of the Government as they stand and without any alteration, there will still remain a gross inequality under the Death Duties in favour of realty, which inequality will have lost its whole and only justification. The fifth proposition is, that immovable personalty or visible personalty, which has, of all property, by far the strongest claims of relief, will remain liable to the action of this gross inequality. I hope that these propositions will have the effect of raising the question I am bringing forward in a broad and intelligible manner. My first proposition has regard to the enormous disparity between the charge on realty and personalty in respect of the Death Duties, and I will endeavour to put the House in possession of the exact amount of that disparity as I take it to be. It is, I believe, generally admitted that a large disparity exists; but I do not think that it is as generally realized how large that disparity is. In all the figures I may lay before the House which are matters of conjecture I will endeavour so to describe them, and where there are Returns to give such Returns. I have certainly used the best means in my power to be correct, and I shall adopt such methods as I think most likely to lay the whole question before the House in a most practical form. I will proceed now to make good the first proposition. I have to state what the present enormous disparity, as I have called if, under the Death Duties between the two great descriptions of property actually is. The whole amount of the Death Duties is £7,519,000. I quote, not from the figures given by the Chancellor of the Exchequer, for a reason which will become perfectly plain as I go forward. Those figures are not the subject of an official Return, and even if they were it is not possible, at the present time, to obtain certain other figures which are absolutely necessary to make them available in the present argument. The figures which I take are the latest figures that are before the House and the country in a state of completeness—I mean the figures of the year 1886–7, ending en the 31st of March last year. Under those figures, I will describe the manner in which the largest sum I have named—£7,519,000—is divided between personalty and realty. In the first place, we come to the Probate Duty, which for the year 1886–7 stood at £4,108,000, with one exception, in my opinion, much too insignificant to be taken into the account—namely, the case of real property which is not actually sold, but is contracted to be sold, and which I do not believe can exceed 1 per cent of the total amount, and is not worth, therefore, taking into the account. With that trifling exception the whole of the Probate Duty of £4,108,000 is levied on personalty. Then I come to the Legacy Duty of £2,572,000, which is also levied on personalty; those two sums together making £6,680,000. I then come to the Succession Duty. There is a common and prevailing belief or idea in the public mind that the Succession Duty is levied on realty, and is to be regarded as a countervailing duty, not in amount, but in kind, and is in the main levied on personalty. But here is a very serious error; and the contention I shall make is this—that only two—thirds of the Succession Duty are levied on realty, and one-third levied on personalty. I must trouble the House by explaining the grounds on which I make that assertion. Probably it would be more convenient for the moment that I should assume the point, and explain when I got one step further on in the argument. If one-third of the Succession Duty is levied on personalty, that sum, added to the £6,680,000 which represents the two great Death Duties of Probate and Legacy, makes a total of £6,960,000. Then there is the question, upon what mass of property is this duty levied; and here I apologetically state to my right hon. Friend and the House, that I will enter into no discussion whatever as to the comparative amount of the total values of personalty and realty in the Kingdom at large. It would be extremely difficult to arrive at it in a positive form, and it is in no way necessary for my purpose. That which is necessary for my purpose and that to which I shall con- fine myself, is to show the rates of duty that are charged upon one and the other respectively. When I have shown that, my argument will be complete. Then I must consider upon what amount of property this annual duty is levied; and there I am not involved in any difficulty, because it is levied upon an amount of property that in my opinion—and I doubt if that opinion will be contested—is fully and amply represented by the Probate Duty. The Probate Duty was levied for that year on the sum of £138,000,000. The Legacy Duty was levied at a smaller sum, there being many kinds of property that escape the Legacy Duty, including those kinds of property which, to a very large amount, pass under the Succession Duty while being personalty. But the Probate Duty, as far as I know, includes every sort of personalty that pays the Death Duty at all. I take the amount as it is—at £138,000,000, and I make the sum of which I have already spoken £6,960,000 levied on £138,000,000 of capital, and if the hon. Gentlemen will have the kindness to make the simple calculation for themselves, they will find that they amount to a rate of little over 5 per cent, levied on death on every change of hands upon personalty for the purposes of the Exchequer as the law now stands. I want to compare that amount with the amount actually levied on realty; and here I must show why it is that I withdraw from the proceeds of the Succession Duty no less a sum than one-third of the proceeds, and treat it as levied on personalty and not upon realty. The amount of property which passes under the Succession Duty annually is £43,797,000, or, for the sake of round numbers, £43,750,000. Of that £43,750,000, £35,000,000 are realty, and £8,750,000 are personalty. But the realty which passes under the Succession Duty is charged upon the life interest; the personalty which passes under the Succession Duty is charged upon the capital value. A contention that I make with the utmost confidence, and which I am bound, I think, to make good—although the amount involved is not very large, but it has application to other portions of the argument—is this: that the charge upon the life interest, as it is made, reduces by at least one-half the incidence of the charge. In answering some remarks which I offered to the House the other day, the Chancellor of the Exchequer contended, if I understood him rightly, that to treat the charge on the life interest, amounting to no more than a half of the capital value, was a mistake; and the reason he gave was the depression of landed property, and that landed property would not sell for so much now as it did 10, 20, 30, or 40 years ago. I say that is a condition totally irrelevant. If landed property sells for less now, why is it? I am not speaking of the monetary state of the market; I ant assuming probably that which the Chancellor of the Exchequer assumes, or what might prove to be the case, and most people will think it to be the case—namely, that the value of landed property will be depressed, but depressed not on account of its selling for a smaller number of years' purchase, but because the number of years' purchase will be assessed on a reduced income, and that reduction of income will be represented in full in the figures which we have before us. I believe that if the average of the values of lives is taken, though they run up as high as 15 or 16 years, according to the ages of successors—if the average values of those lives be taken, I believe it will be found that even supposing the charge on the life interest were a full charge—which it is not—that the capital value is at least twice, nay, is more than twice the value of the life interest. But, Sir, the charge on the life interest is not a full charge. And there, again, I mention to the House that one point must be kept in view, if we are really going to consider and understand the question, and that is the point that there is offered to the successor in the case of landed property, while the successor to personalty is bound to pay at once, a licence to pay in eight half-yearly instalments, the first instalment only falling due after the first rent day which follows the decease, and in case of paying up at once, as the successor to personalty is bound to do, he receives from the Revenue Department a discount of 11 per cent. I am understating my ease when I say that the successor to personalty charged on capital value pays more than double what the successor to realty pays; because the latter pays only on the life interest, and pays on a life interest under the favourable conditions prescribed by the Succession Duty Act. I might adduce a great deal more matter not only in support of that argument, but in enhancement and extension of it; but I have said enough to show, I think, that I am taking the case in a moderate view when I state that the £8,000,000 charged as Succession Duty, which are personally, are charged at the very least at twice the rate at which the £35,000,000 are charged that represent realty; that is to say, £35,000,000 are charged upon less than half their value; and the real value, though there seems to be only £35,000,000 passing under the Succession Duty Act every year, is not £35,000,000, but £70,000,000 a-year. As the proportion of the Succession Duty is one-fifth, and as it is paid at double the rate, it follows that the charge is double in its relation to the property upon which it is paid. That being so, the simple thing I have to do is to take the proceeds of the Succession Duty and divide them, not into fifths, but thirds, or sixths. Two-sixths, therefore, are paid by the £8,000,000 of personalty which passes in the year, and four-sixths, or two-thirds, by the landed property—that is, two-thirds of the total proceeds of the Succession Duty. All I have to show is that, while £6,900,000 yielded by personalty in the year 1886–7 fell upon £138,000,000 of property, and therefore represented a duty exceeding 5 per cent, £560,000 yielded under the Succession Duty Act by realty fell upon £70,000,000 of property, and represents, instead of 5 per cent, 13–16ths per cent. If you multiply that 13–16ths by the figure 6 it gives you 78–16ths—that is to say, a trifle under 5 per cent. Thus, under the present law the payment of personalty is almost exactly six times the payment of realty. That is a matter which is not undeserving of consideration, and certainly justifies the use of the phrase—"enormous disparity." It is an enormous disparity, and the justification of it, or the cause of it, lies in the working of our present law with respect of rating. My second proposition is that this, and no other, is the occasion on which that disparity ought to be remedied and removed, so that we shall not hear any more of it. I look with a friendly eye, as I have said before, on various points on the Budget of the Chancellor of the Exchequer. It contains the elements, and even the sub- stance, of very important reforms. In the first place, it puts an end, so far as the great mass of rates in aid is concerned, to that system which I must be permitted to call an abominable system—for we are all more or less tarred with the same brush—of rectifying the injustice done to certain kinds of property by drawing large sums out of a fund—namely, the Consolidated Fund, which is supplied not only by property, but largely supplied by labour. It is not necessary to enter into that now. I admit that, upon the whole, the intention of the Chancellor of the Exchequer and the plan of the Government is to treat this, as it ought always to have been treated, as a question between one kind of property and another, and not as a question between property and labour. Labour was never liable to be rated; but we have made labour, through our system of rates in aid, pay a very considerable proportion of the charges levied through the medium of rates. For the course adopted by the Chancellor of the Exchequer in this respect I am grateful to the Government. I should be very sorry to put to hazard any proposal which would have the effect I stated. I am also very glad that a great reform, I think, is going to be effected by what will be called clearing the accounts as between Imperial and local taxation. All these things are excellent, and when I heard the Budget Statement of the Chancellor of the Exchequer, I thought that there was another great public object going to be secured—namely, the final settlement of the question. Now, it appears to me that to go into a subject of this kind, involving, as it does, a vast disturbance of our finance, for it is nothing less than a vast disturbance—the creation of new taxes, and the bodily transfer of certain taxes now received by the Exchequer, is not an operation which ought to be done from year to year, or every three or five years. It is an operation, which, when it is done, ought to be done completely. I have not assumed, in the Amendment I submit, that the figures of the Chancellor of the Exchequer, as they now stand, are absolutely final figures. Judging from what I hear much doubt is raised in respect of some of the new charges he proposes to create for the benefit of the local treasuries, and it is not for me to say what is the sum that ought to be paid over by the Chancellor of the Exchequer, or through the medium of the collective power of the Exchequer to the local treasuries. All I say is, that the sum ought to be considered now and ought to be fixed now, and when we have fixed it, we ought to have done with it. It is a question of doing justice between various kinds of property. What are those various kinds of property? I want to call the attention of the House to the distinction that ought always to be borne in mind in discussing this matter, but which is very commonly forgotten. It is supposed that the whole question lies between personalty and realty, that when you relieve realty to a certain extent and place certain charges upon personalty without entering further into the matter you have done your duty. There cannot be a more gross mistake. It is necessary to distinguish between personalty and personalty; it is necessary to distinguish between rated personalty and unrated personalty. The case of unrated personalty is one which involves, of course, a very large amount. It is a case with regard to which I do not wish to express an opinion, and I have not formed any very positive opinion of the amount of charge upon it, if you could get at it, in order to do justice to those descriptions of property that bear the rates. Perhaps the Government have more and superior information upon that subject, and I should be disposed to attach great weight to their opinion. But what I wish to impress upon the mind of the House and to insist upon is this, that now is the time to transact this business, and that we are bad workmen and do not know our business if, when we have set our hand to an operation so large and complex as that which is now before us we do not make it, so far as the term can be used in this matter, a complete and definite operation. It ought to be dealt with once for all, and we should not leave to be done over again a work which we have approached in an irresolute spirit and treated in an imperfect manner. The House will, therefore, understand that I ask them to vote, that when adequate compensation has been given to local rates, the Duties accruing upon Death should be so fixed as to equalize the charge upon real and personal property. As to what is adequate compensation, I do not wish to say, and I make no complaint of the proposal of the Government. The proposal is to give £5,600,000, with something more in prospect next year for Scotland and Ireland in aid of the rates, compensation for getting rid of grants in aid. It is our duty to make a just and fair compensation; and when it is made, so that the local treasuries have no longer a just claim against the Imperial Treasury, we should then see that justice is done within the Imperial Treasury by an equality of charge, as I shall endeavour to show it ought to be, upon personalty and realty respectively. Perhaps I may venture to point out to the House what is the best information I can obtain upon the division of the property of the country—upon ratepaying and non-ratepaying property. I do this because I wish to bring into view the grievance which the ratepaying proprietor has against those who do not pay rates. To ascertain the whole property of the country, I have no other recourse open to me, nor any better I think, than to resort to the Return which was laid before the House in 1885 by Sir Henry Holland, now Lord Knutsford, and which I will call Sir Henry Holland's Return, he having been Secretary to the Treasury at the time it was given. That Return, I think it is No. 345, of the year 1885, has the merit of being short, simple, and intelligible. It gives the whole property of the country, that which can be strictly so called, as £9,410,000,000. Realty is set down at £3,778,000,000, and personalty at £5,632,000,000. But when we look into the Return, we find that not quite the whole of the realty, because realty includes ground rents and other interests of that kind, which I need not mention, though if I did it would strengthen my case—nearly the whole of the realty is subject to rating. But besides realty which is set down as subject to rating. I find what the Return calls realized personalty stated at £1,042,000,000, which consists of about £830,000,000 of realty property and £210,000,000 or £215,000,000 of property in mines, iron works, canals, and so forth. I take that property from that side of the Return presented by Sir Henry Holland and put it to the £3,778,000,000 which are called realty, but which I do not think are accurately so called, and which are, in the main, subject to rating. That being so, I divide the property into ratepaying and non-ratepaying property; the total amount subject to rates is £4,820,000,000, and the estimate of the realized personalty not subject to rates is £4,590,000,000. So the House will see that, according to the evidence of this Return, which, I should think, is not very far wrong, the whole burden of rates and of local taxation at present is laid upon little more than one-half of the property of the country.

THE CHANCELLOR OF THE EXCHEQUER, (Mr. GOSCHEN) (St. George's, Hanover Square)

The whole is not rated really, but only so much of it as is visible.

MR. W. E. GLADSTONE

I beg pardon; I entirely differ from my right hon. Friend. In my opinion, rates are levied upon a great deal of property that is not visible; but my meaning is that that which is visible bears the charge upon the whole. The rate upon railways is levied upon the proprietary interest. It is quite true the shareholders have arranged their interests in a complicated manner, past ordinary, past preference, and so on; but the rate takes no cognizance of these distinctions; it is levied upon the entire beneficial interest. I consider that to be altogether indisputable. This, however, is not connected with the general argument I am pressing on the House. I am referring to it rather to show that the ratepayers have great reason to complain that my right hon. Friend takes a good deal from property subject to rating, and adds to it that which is not. About one-half of the property of the country—not much more than one-half, although the Chancellor of the Exchequer will make it a great deal more than one-half—is subject to rating; and, therefore, I argue that there is a good and strong case for adjustment. There are some important facts I will not refer to, because they would complicate the case too much, without any countervailing advantage; I will mention only those that are material to my argument. I am bound to say that, in the Return of Sir Henry Holland, there are a number of items upon which questions might be raised. One of them is the £300,000,000 that is put down as the value of property belonging to persons who are not repre- sented in the Income Tax; but as that, and various other items which might be questioned, are not immediately connected with my argument, I pass them by. There are varieties in the mode of charging the Death Duties which are also in themselves singular, but which do not require much discussion now. It may be argued that some descriptions of real property, such as ground rents in populous towns, are not subject in any way to rating, either immediately, or in any other way. It is very doubtful if the burden of the rates reaches, or will reach, while the country continues to advance, that description of property. In the main, we may proceed on the assumption—and it is an important assumption—on the present occasion—and one which has always been urged in the interests of the proprietors of land—that lands ultimately discharge the rates that are levied in the rural districts; that personalty in general is charged with both Probate and Legacy Duty. That, however, is not uniformly true, because visible personalty, by which I mean the secondary interests of occupiers in messuages and tenements, is charged to the Probate Duty, and is not charged to the Legacy Duty, but is charged to the Succession Duty in the manner I have described. But I do not think any of these considerations bear very materially upon the point I wish to bring before the House—namely, the disparity—and I will say the gross disparity—it is proposed to leave in the mode of charging personalty and realty after the settlement now in contemplation has been made, and the justice, policy, and necessity of removing that disparity. My next proposition is this—that under the new proposal of the Government £4,000,000 or £5,000,000—or call it what you like—the exact sum may be a matter of dispute—I think the Chancellor of the Exchequer called it £4,000,000; but, at any rate, we know what is meant—under the proposal of the Government £4,000,000 or £5,000,000, which is now levied in one form or other under personalty, will go in aid of rates, and it will go practically in aid of realty and of the landed interest. The way in which it will go principally in aid of the landed interest is this—going back to the statement contained in Sir Henry Holland's Return, the total value of rateable property, with the transfer I made and explained, is £4,820,000,000. Of that £1,746,000,000 does not consist directly of landed property in the strict sense of the word. Then, when one comes to the large item of messuages and tenements, which are put down at £2,032,000,000, the question arises—How much belongs to the landlord and how much to the tenant? Here I wish to state distinctly that I have made nothing more than a conjectural estimate; but considering the matter as well as I could, and taking the whole of this enormous mass of property, valued by the Return at £2,032,000,000, which is, perhaps, rather a low valuation, for it is taken only at 16 years' purchase, I estimate that, in one shape or another, one-half belongs to the landlord, whether he draws the ground rents or whether he has the reversion, and one-half represents the secondary interests. If that be so, of the £4,830,000,000 of rateable property, £2,762,000,000 would belong to realty and £2,038,000,000 would belong to personalty, representing that portion of the interest in houses in the hands of the occupiers which may be called secondary interest. If that be so, the landlord's ultimate share of the subvention which the Chancellor of the Exchequer proposes to give to local rates will be represented by the proportion of £2,762,000,000 to £2,058,000,000—that is to say, as nearly as possible seven-twelfths of the subvention is the landlord's ultimate share, and five-twelfths is the ultimate share of the occupiers. I mention that to sustain the third of my five propositions—namely, that a large and even a preponderating portion of the subvention now proposed to be made will go in favour of realty or of the landlord's interest. I now come to that which is one of the two most important propositions I have to substantiate—namely, that even with the rectifying processes proposed by the Chancellor of the Exchequer there will remain a gross disparity between the Death Duties charged upon personalty and those charged upon land. We know now what personalty will pay, and the whole that personalty will pay; but what personalty will pay to the Exchequer is a question we must now determine. Here is what personalty will pay to the Exchequer if the proposals of the Government are adopted as they stand. I am obliged again, for the sake of completeness, to go upon the figures of 1886–7, and to put out of sight such changes as may occur in the coming year. On the basis of the figures of 1886–7 the amount of Probate Duty is £4,108,000, but only one-half will go to the Exchequer, or £2,054,000. The Legacy Duty is now £2,572,000, and the Succession Duty is £280,000. There is an addition proposed to be made by my right hon. Friend the Chancellor of the Exchequer; but, of course, that addition, small as it is, will not be levied wholly on land—one-third will be levied on personalty—for so I understand the statement of my right hon. Friend. I understand the proposal to be that the 1 per cent of the Succession Duty is to be raised to 1¼ per cent; that the other rates in the consanguinity scale are also to have ½per cent added to them, and the general proposal is that the Succession Duty shall be raised ½ per cent. That being so, personalty will pay, on the whole, to the Exchequer in Probate, Legacy, and Succession Duty £5,046,000; and that, charged upon £138,000,000 is a little more than 3⅝ per cent. Now, Sir, what would be the duty on realty? Recollect I have struck off all the contributions made to the local treasury. I do not take them into the account. £5,046,000 will be received from personalty, representing a charge of 3⅝ per cent or a little more. Realty will pay the £560,000, which it pays now, and an addition of half that sum—namely, £280,000. The total will be £840,000, as the entire charge upon realty, and it will be paid upon £70,000,000 worth of property. Taking again the figures supplied to me by the Return for 1886–7, that £840,000, which will be paid upon £70,000,000 of property, represents upon the whole 1⅕ per cent. The Chancellor of the Exchequer proposes the addition of ½ per cent by way of establishing a sort of equality between the Death Duties charged on personalty and the Death Duties charged on realty, and I make a comparison of the charges as they will actually fall. I find that after we have satisfied the claims of the local rate by a large transfer of taxes, and by other means under the plan of the Government, there will remain a system under which personalty will be charged 3⅝ per cent, while realty Will be charged 1⅕ per cent—that is to say, personalty will continue to bear three times the charge borne by realty. How is it possible to justify such a state of things as that? What view will the nation take, and justly take, of it? What view will any man who has a regard for financial justice think? What notion will the masses of our countrymen form of the manner in which their interests are studied and cared for by the Representatives whom they have chosen? I should care, as little as any man for what the great masses of the country think, if I thought they were going to be deluded, or were being influenced by their own selfish interests; but here is a statement laid before them that realty is only to pay £1 while personalty is to pay £3, and this, too, after the Government have professed to rectify the inequality. What opinion, then, will the country justly form of the manner in which these interests are situated and provided for by the Representatives they send here? Now I come to my fifth, and, I am glad to say, my last proposition—that immovable personalty, which of all descriptions of property has by far the strongest claim to relief, will still remain liable to this gross inequality. Confining my view to a limited portion of the field, I must compare the way in which you are invited to treat land under this plan with the manner in which you are going to treat other personalty at large. I have said that personalty is to pay three times the percentage paid by land. Let me now refer to the case of visible personalty, because the case of visible personalty has also been systematically and almost culpably overlooked in most of our discussions. I want, if I can in some degree, to point out what are the claims and what are the gains of land and visible personalty respectively. Understand that what I mean by visible personalty is represented by the £2,038,000,000 of which I just now spoke, and it is made up of railway property, mines, and ironworks, and property of that class, and all the leaseholders and occupiers' interest in messuages and tenements. A very large sum is £2,000,000,000, and it represents one-fifth of the whole property of the country. I want to show what is the injustice which this property has suffered, and which it is proposed that it should continue to suffer. For that purpose, I must compare the claims of landed pro- perty with the claims of visible personalty, and I must compare what it is proposed to do for landed property with that which it is proposed to be done for visible personalty. With respect to the claims of landed property, I must say this—that although there is, in my judgment, a very strong and well-founded claim on the part of those liable to rates in general, yet the claim of landed property is by far the weakest portion of the larger claim. Why is that? It is because the urgency of that claim has been based upon the fact that there has been an enormous increase in the rates; but, in all our debates upon this subject, I have observed—when demands have been made in the interests of the ratepayers on the Chancellor of the Exchequer and the Consolidated Fund—I have uniformly observed that those who pleaded the cause of the land—and very ably, I must say, some of them have pleaded it—have never been careful to call attention to the remarkable incidence of this increase in the rate. They always took it in the lump, and enlisted the whole support of the urban Members, who knew how their constituents were groaning under these imposts. The landed proprietors, in fact, posed as the sympathizing friends of the urban communities. They represented that they had a common grievance, and took a common stand with the towns—they held their interests were one, and a tender brotherly feeling was displayed on the part of the landed proprietors towards the whole urban community of the country. I do not recollect that the same sort of thing was shown at the time of the discussion of the Corn Laws. But the fact is, that the land took enormous profit from an increase of rates, which it never suffered itself. There has been an enormous increase of rates in connection with a system by which almost all new rates are to be borne by the tenant, and not one sixpence by the landlord, who stands by with folded arms. We have now received a Return on this subject, and I am much obliged to those who have compiled it. It is, I think, a Return published by the Local Government Board, and it gives a comparison between the rates in 1873–4 and the rates in 1884–5. There is also a volume published by the Chancellor of the Exchequer, who is a very high authority, but it is of an earlier date, and does not exhibit the case as well as the more recent document. Now, how does the case stand? Taking, first, the case of the Metropolis, I find that comparing 1873–4 with the rates in 1884–5 there was an increase in the rates in those 11 years, amounting to £2,653,000, or 67 per cent. Now, are the provincial towns much better off? Not a great deal, Sir. The absence of self-governing institutions appears to have given to the Metropolis a slight pre-eminence and superiority in regard to the increase of this expenditure; but I am bound to say that the self-governing towns run a very fair race with it, and in some cases make a very creditable show indeed. I take next, then, the case of all urban districts outside the Metropolis, and I find that in the period specified there was an increase of £2,729,000 upon the rates, representing 59 per cent. I come now to the mixed urban and rural districts, which are very extensive. Their total rating is £9,858,000; but what I am alluding to—namely, the increase, is only £1,194,000, or 13.8 per cent—under 14 per cent. And that, Sir, is not all, for, perhaps, the most interesting of all these classes is that composed of the districts purely rural. I must heartily congratulate the rural districts, and I rejoice, myself, in being personally in any manner associated with them, for I find that in their case this large increment of rate dwindles down to the almost contemptible sum of £213,000, or 12 per cent.

MR. SYDNEY GEDGE (Stockport)

Are they self-governed?

MR. W. E. GLNDSTONE

I have not the least doubt that the hon. Member is quite as competent to answer that question as I am, and that he knows as much about the rural districts. Does he wish to impose upon me the duty of putting into my observations a parenthesis which would occupy at least a quarter-of-an-hour, without the smallest countervailing advantage of increasing the knowledge of the House at large or that of the hon. Member? So much for the general claim of the landed interest; but what is its claim under the present plan? The landlord will get, undoubtedly, the benefit of the whole contribution we are going to make to the rates in the rural districts. But when will he get it? That is the question. But I do not think that it requires any lengthened argument at the present moment. My opinion upon it is clear and strong. He will get it very quickly indeed. If rents were rising he would not get it quickly. If rents were stationary ho would not get it quickly. If there were no general movement in rents he would not get it quickly. He would get it by degrees upon a change of hands in his various lettings. But I am a fraid it is an admitted and melancholy truth that rents are feeling the depression of the times and are going down from year to year. Some have come down, perhaps, and some may, I hope, have reached their lowest points; but, upon the whole, they are moving in a downward direction, and if we are to consider them in a declining state, the full benefit of this subvention from the Consolidated Fund to the local treasury must come at once, or very shortly, to the landlords. If we are agreed, and I am afraid there is no difference of opinion—I wish there was—that rents are generally declining—if we are agreed in that, I will illustrate my meaning in this way. Let us suppose the case to be represented generally by a single farm belonging to a single individual—a farm rented at £300 a-year under the old system, and what we should call a flourishing state of agriculture. On the farm the rates are £60. On the day before the Budget, I received a statement from the tenant setting out the condition of the farm, of course including the amount of the tithe and rates, and saying that he cannot continue to pay the £300 any longer, but that he could pay £200, and making an offer of that amount. Very well, I suppose that I myself, as the landlord, receive that offer on the day before the Chancellor of the Exchequer is going to speak. The Chancellor of the Exchequer makes his speech, and the next morning, before giving an answer to the tenant, I read the speech and I find that the rates on my farms will be very considerably reduced, and that on this particular farm they will be reduced from £60 to £40 by the important subventions that are about to be made. Very well, I make my answer to my tenant, and I say to him, "That is very hard upon me. You ask me to reduce your rent from £300 to £200 a-year, but since your letter was written, there are to be important changes in regard to taxation. You calculated your offer on the basis of the rates being £60. The rates are now to be £40, and, that being so, your offer is evidently an offer of £220 a-year." In that way the landlord gets the benefit of £10, £15, or £20, as the case may be. Now, I take that as an illustration to show that the benefit of these subventions must necessarily fall into the hands of the owner of the freehold, and will pass by the occupier. Well, Sir, for these benefits, which, as I have said, will go entirely to the owners of landed property, cannot be represented by a less sum than £2,000,000 out of the subvention you are going to make, the entire landed property of the country is to be called upon to meet a charge of £280,000. I want, now, to compare this mode of treating the landed property with the mode in which you are going to treat the visible personalty of the country, which is of no less importance than landed property, and, if the observations I have made are correct, at all events of not much less importance; for while the value of the whole freehold of the country is one-fourth of the entire property of the country, the value of visible personalty, or the secondary or tenant and occupiers' interest—call it what you like—it falls under the head of "visible personalty"—is about one-fifth. What, then, is the claim of the owners of visible personalty if we are to be just towards the owners of land, the owners of visible personalty, and just towards everybody. The claim of the owner of visible personalty then is greatest, and it is the greatest on these two perfectly distinct and perfectly substantive grounds. First of all, it is upon him that this enormous increase in the rates must come. This increase of 67 per cent in the Metropolis, and of 59 per cent in the urban districts, is an increase, nearly the whole of which must fall upon the owner of visible personalty. This is one of his claims. The other claim is, that while other classes have been touched on one side only, while the owners of other kinds of personalty have been touched by the Death Duties and not by the rates, and the owners of landed property have been touched, or very slightly touched, by the rates, and not by the Death Duties, the owners of visible personalty have been, to use a homely phrase, hit both ways, they have been hit by the rates and by the Death Duties through the medium in full of the Probate Duty and in part of the Succession Duty, therefore the owners of visible personalty have a double claim for relief upon the Government, of which, however the plans of the Government take no cognizance whatever. Especially in regard to this enormous mass of property held by tenants and occupiers, with a secondary interest no cognizance whatever is taken of it in the plan of Her Majesty's Government. How do the Government treat them? I have shown their claims to be a maximum; I shall show their advantages to be a minimum, though I do not say they have none at all. Of course, they gain like the landed proprietors from the reduction of the Income Tax, and they gain upon the Succession Duty. But the peculiarity of the case is this. This plan is a great plan and a good plan in many respects, and the essence of it is that by giving about £1,125,000—I think it is from the Probate Duty, one moiety of the Probate Duty—compensation is to be made to the ratepayer for his disadvantage under the present system of maintaining local rates. Nothing could appear to be more equitable. But what is the real state of the case with regard to the owner of visible personalty? He contributes his full share to that very fund out of which he is to be compensated. In fact, he is to pay his own compensation. While the landed proprietor is to get, with perfect justice and propriety I admit, his compensation from other people, the owner of visible personalty is to get his from himself. The Chancellor of the Exchequer is to put money into one of his pockets, and immediately extract it from the other; because, so far as I recollect, this claim of compensation, although very large, consists mainly of the moiety of the Probate Duty you are going to hand over, and to that Probate Duty the owner of visible personalty contributes as fully as any other class of owners. Now, Sir, I think I have made good what I have described as my fifth proposition—namely, that visible personalty, which of all property has by far the strongest claim of relief, will still remain liable to this great inequality. And while, on the one hand, the owner of visible personalty will, through the medium of the Probate Duty, have to pay to himself his compensation, which other owners will receive from other parties, they are likewise to be called upon by the Chancellor of the Exchequer to pay under the Death Duties three times as much as is levied upon the landed proprietors. How long will these inequalities continue? It is impossible that they should continue without limit. Well, Sir, they will not continue without limit; they will continue for a time and then they will disappear. What is to happen to-night? A Division, of course, we shall have, and the House will give its decision. On whom does that decision depend? It depends on Liberal politicians who take the name of Unionists. I think I have kept, as I am bound to do, my pledge to the House to avoid drawing its attention to any irrelevant matters, and therefore I am not now going to dispute the right of those Gentlemen to that name. I say that the decision of the House depends on the Unionists. I may take it for granted that some of our old Friends—a sprinkling, at any rate, if not many of them—will give their votes with us to-night; but that will not much matter, for individual votes are of comparatively small importance. A stray Tory used in the past to be allowed to vote for the Ballot, but then it was perfectly well known that the votes of the whole Party would be sufficient and adequate to prevent any mischief that might arise from the fact that a single sheep had gone astray. So with regard to the Liberal Unionists; it is not the vote of this or that Member, but of the Liberal Unionists as a body, that is of importance here. Do not let it be supposed that we shall not be thankful for their votes; we shall be glad of any individual votes—the more the better, and few are better than none. But with reference to the public issue, they are not equally important. A larger Division or a smaller Division, a larger majority or a smaller majority, may cause a few cheers upon that side or upon this, but the cheers will pass away, while the result will be recorded. The result depends upon the action of the Party as a body. They are acting as a body—they have shown their capacity to act as a body—and in what they deemed to be the saving of the Union they have shown that they are a body, and in that capacity they have supported the Government upon a hundred questions that have nothing whatever to do with the Union. Let them show it to-night. If they go as a body with the Government, it is upon them, and them only—it is upon Liberals, and not upon men who are not Liberals—that the maintenance of this system of inequality will rest. It will be their crime, for the Government are in a minority in this House. They have supported them on 20 or 50 occasions when the majority was made up by Liberals. What the country must understand is that these Gentlemen professing the Liberal creed, many of whom believe conscientiously—and they are entitled to that belief if they think fit—that they are the best Liberals, the most consistent of Liberals, the most resolute Liberals—those are the men who are to maintain and keep alive this inequality. These are the men who will be responsible for handing down this system of threefold taxation on personalty as compared with land, and support it as one of those precious institutions which they think we ought to bequeath to our posterity. If there is to be victory for the Government, if this Resolution is to fail, to that cause, and that cause alone, will that victory and that failure be due. But it is necessary to do something more than achieve that victory. It is necessary to answer the facts that I have laid before the House. It is necessary to answer them, not with mere generalities, not by doleful representations, true as they may be, that the landed interest of the country is depressed; it is necessary to break down, and not in detail but in their main substance, the statements and the figures I have laid before you, and which have proved that you are going to give a final sanction to a threefold system of taxation as regards personalty under the Death Duties as compared with what land is called on to pay. Do you think that system will last? Let me say—and perhaps I may make an appeal a little nearer home—that this subject is not entirely new. There was a Cabinet in this country in 1885, and there was a proposal then with regard to it; at that time, hon. Gentlemen sitting below the Gangway, who we now know, on the most unquestionable authority, were welcome allies of those who now sit opposite us in opposing our financial proposals. What was it that we proposed? It was a proposal which had the support of my noble Friend the Member for the Rossendale Division of Lancashire—a proposal which, with a single exception that we did not remove what I have described as the 10 per cent discount in respect of half-yearly payments, was similar to our present proposal. With that single exception, we proposed in 1885 to establish for the purpose of meeting the wants of the Exchequer, a perfect equality between the Death Duty on land and the Death Duty on personalty. That was then the sentiment of my noble Friend the Member for the Rossendale Division of Lancashire, and which I hope he will support to-night. And why should he support it? Not only from consistency, but from the strongest possible à fortiori cause. In 1885, to meet the necessities of the case, we then proposed to equalize, along with my noble Friend, the Death Duties on land and on personalty, although at the time we were not in a condition to make, and we did not propose to make, the slightest concession to ratepayers. There was no Liberal Unionist Body then. We adjourned the claims of the ratepayers; but we, and my noble Friend among us, declared that even under these circumstances, the Death Duties upon realty should be made equal to those upon personalty. I see my noble Friend has some notes in his hand. I have no doubt they contain a most admirable and conclusive speech in support of the Resolution. If by any accident or caprice of fate, if by any of those marvellous or secret causes which operate in the decisions and actions of men and sometimes even of the best and most distinguished men, if from the wheel of the lottery or from any cause, by the support of my hon. Friend, victory should come to the Government to-night—I do not envy them that victory. It will be the opening of a new struggle, a fresh controversy. It may last for a while, If you take up that ground, you may be able to hold it for a limited period; but it will end, as a hundred other controversies have ended in my recollection, which reaches over the time of the Reform Bill, in the triumph of right and justice, in the triumph of a policy of wisdom towards the nation and against the ill-understood and recklessly supported interests of a class. It will end as it has ended before in this—that we shall have soon upon us a momentary and temporary triumph, followed up by permanent odium and discredit and ultimately by a final defeat.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words, "in the opinion of this House, after Parliament shall have made the appropriations it may deem just in relief of local rates, the Duties accruing upon deaths should be so fixed as to equalize the charge upon real and personal property respectively," (Mr. Gladstone,)

—instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."

THE PRESIDENT OF THE BOARD OF TRADE (Sir MICHAEL HICKS-BEACH; (Bristol, W.)

Mr. Speaker, it is not for me to follow the right hon. Gentleman in the concluding portion of his speech or to attempt to defend the noble Marquess opposite (the Marquess of Hartington) against the personal attack that has been made upon him, but I cannot help remarking that it is strange to hear from the right hon. Gentleman, who was the author and originator of the plan for levying succession duties on realty, which he now tells us is recklessly supported in the interest of a class it is strange to hear him attacking the noble Marquess because he may have changed his opinion on this subject. Anyone who looks at the wording of the Resolution which the right hon. Gentleman has moved this night might well wonder why he undertook what he himself characterized in 1885 as— The most obstructive of all proceedings, a course very rarely taken, the proposal of an adverse Amendment on the second reading of the Customs and Inland Revenue Bill. But I do not think we had any occasion for surprise when we listened to his speech. We can understand that the real meaning of that speech was not so much a desire to set right what ho thinks a financial wrong, as to turn out the Government. I judge the Resolution of the right hon. Gentleman, not by its wording, not by his promise—which he did not keep—to abstain from Party criticism, but by the fact that it has been moved as a direct Amendment to the Budget of the Government, and by the interpretation which he has himself placed upon its meaning. Now, Sir, I will say, in the first place, that I think it is rather remarkable that the right hon. Gentleman should, in the terms of his Resolution, have merely professed a desire to equalize the charge upon real and personal property for Death Duties; because the most effective part of the important speech which he has addressed to the House was that in which he dwelt upon the injustice that is done, in his view, to visible personal property under the present system. But the right hon. Gentleman never suggested any mode by which visible personal property should be relieved of that injustice. Does the right hon. Gentleman seriously think that visible personal property would be relieved by inflicting another injustice upon real property? If he wishes to remedy the injustice with which he dealt with so much force—and I am bound to say with a considerable amount, in my opinion, of truth—it would require a thorough recasting of the system of Death Duties, for it is invisible personalty, and not realty, that reaps an unfair advantage from the present system. Does he really call upon the Government to undertake this year such a complicated and difficult a task as that? He did not attempt it, with all his knowledge, power, and experience during the many years he was in Office. For what was the proposal of the right hon. Member for South Edinburgh (Mr. Childers)? Not a recasting of this complicated system of Death Duties, not a plan which would remedy the numerous great anomalies, but a mere attempt to inflict upon real property the injustice which the right hon. Gentleman would inflict upon it, and that alone, as "a final reform"—those were his words—of the system of Death Duties. I contend that such a proposal is both unjust in itself, and is very far indeed, even from the point of view of the right hon. Gentleman, from anything like a complete settlement of this great question. But let us consider the reform which the right hon. Gentleman proposes in the terms of his Resolution. He wishes to equalize the charges for Death Duties on real and personal property. I followed him as well as I could through his statement as to the respective incidence of those Duties upon realty and personalty under the scheme of my right hon. Friend the Chancellor of the Exchequer. I think he was wrong in not eliminating from his calculation that part of the Probate Duty which it is proposed to devote to the relief of Local Taxation. That is part of the whole contribution which, together with the licences, will go to the local ratepayers, and it is not fair to take that part of the Probate Duty into consideration in deciding whether realty or personalty will be most heavily taxed for Imperial purposes under the Death Duties. Let us try to arrive at the relation between the payments which the two classes of property will make to the Imperial Revenue when the scheme of my right hon. Friend the Chancellor of the Exchequer has come actually into force. The Succession Duty will yield £1,200,000; Probate and Legacy Duty, after deducting half the former for local purposes, £4,850,000. But when you come to analyze those two duties, as the right hon. Gentleman showed to the House, you arrive at the fact that the Succession Duty is borne partly by personalty and that Legacy Duty is paid partly by realty. Deduct from £1,200,000 Succession Duty one-fifth on account of settled personalty, or £240,000, and that reduces it to £960,000. Deduct from that one-eighth for leaseholds, or £120,000, and that brings it down to £840,000. On the other side, deduct from the total annual yield of the Legacy Duty a sum which the Inland Revenue Commissioners calculate at £200,000, for Legacy Duty paid upon real estate directed to be sold, on annuities charged on real estate, on portions for younger children, jointures, dowries, if created I by will and not by settlement. I do not include mortgages, though I might do so as part of the corpus of the estate. My right hon. Friend the Chancellor of the Exchequer proposed to add to the Succession Duty ½per cent for lineals and 1½ per cent for collaterals. It is estimated that the £200,000 I have named will thus be increased by £60,000. These two sums of £200,000 and £60,000 added to £840,000, make a total charge on realty of £1,100,000 a-year for Death Duties. Now, I come to the other side. The Probate Duty and Legacy Duty is £4,850,000; deduct from that £200,000, which I have mentioned above, Legacy Duty paid by realty, and you get £4,650,000; add £360,000 Succession Duty, paid by settled personalty and leaseholds, and you have a total of £5,010,000. Realty, then, pays £1,100;000 Death Duties as against £5,010,000 paid by personalty. Now, the right hon. Gentleman calls this an enormous disparity, and makes an eloquent appeal to the masses against it. I think the right hon. Gentleman in that appeal might have felt it his duty to tell the masses himself the strong arguments which he brought forward in favour of real property when he first imposed a Succession Duty in 1853. Whether the disparity is enormous or! not depends on the relative values of; realty and personalty in this country. You cannot assume unfairness in the matter without first examining what relation the value of personal property passing by death bears to that of real property passing by death; and, secondly, without inquiring whether there is any other kind of Imperial taxation borne by real and not borne by personal property. The right hon. Gentleman, in his speech the other day, made what, with all respect to him, I will call one of the wildest assertions ever made in this House, when he assumed that the total value of personalty was the same as the total value of realty—

MR. W. E. GLADSTONE

It was not my calculation.

SIR MICHAEL HICKS-BEACH

I understand from that that the right hon. Gentleman does not think the calculation was made by any Authority on which he can depend. I can accept no such calculation. It is absolutely impossible, in my belief, to arrive at the respective values of realty and personalty in this country, except by the use of statistics which must largely be of a conjectural character. I confess I felt some diffi—culty, myself, in sanctioning the publication of the Return of 1885, from which the right hon. Gentleman has quoted, because I saw that that Return was composed so largely of conjectural figures. In saying that, I do not intend to cast any reflection on the authority of the eminent statisticians dealing with the matter; but I think the only satisfactory figures we can take in calculating those relative values are those based upon the average amounts which become actually liable to the different kinds of Death Duties over a number of years. Beyond this, I think we can only say, generally that it is admitted by all who have attempted to look into the matter that, in the first place, the total value of personalty is considerably higher than that of realty; and, secondly, that the difference between the two is increasing year by year to the disadvantage of realty. What is the average net annual amount of personalty paying Probate Duty since the right hon. Gentleman's Act of 1881? I find it is £140,000,000. Add to that the value of personalty paying Succession Duty, £8,000,000, making a total of £148,000,000.

MR. W. E. GLADSTONE

That was already included.

THE SECRETARY TO THE TREASURY (Mr. JACKSON) (Leeds, N.)

No.

MR. W. E. GLADSTONE

Yes; it is.

SIR. MICHAEL HICKS-BEACH

The figures have been given me by the Inland Revenue Authorities. On the other hand, the net annual value of real property paying Succession Duty is given at £43,000,000, a figure which the right hon. Gentleman quoted. From that deduct settled personalty, £8,000,000, and leaseholds, £4,000,000, or £12,000,000 in all, and that leaves a total annual amount of realty, paying Death Duties of £31,000,000. Well, now, on the face of these figures, of course it would seem very unfair that £31,000,000 of realty should pay £1,100,000, as against £5,010,000 paid by £148,000,000 of personalty. But, of course, these £31,000,000 do not represent the gross value of realty, nor the capital value of realty. It is obviously fair that no man should pay Death Duties upon a greater estate than he receives. The right hon. Gentleman did not make any objection to the system under which, in calculating the value of an estate for Succession Duty, deductions are made for mortgages, legacies, or annuities charged on the estates, or for the necessary outgoings for repairs and insurance. The objection of the right hon. Gentleman was to the calculation of the value on the life interest, rather than on the capital value. Why did the right hon. Gentleman enact, in 1853, that the person succeeding to real property should never be charged with the duty on any higher interest in the property than a life interest? He did. so for three main reasons. In the first place on the ground of the other charges to which real property is subject. He spoke then of the enormous weight of local taxation falling solely upon real property; but to-night he argued that this injustice had been put an end to—that the proposal of my right hon. Friend the Chancellor of the Exchequer by which £3,000,000 will be paid, more than i paid at present, to the ratepayers in relief of their burdens, will settle the question, so that the inequality which he admitted in 1853 will be entirely removed. But what I would say is this—that lily right hon. Friend the Chancellor of the Exchequer drew a very broad distinction between the hereditary burdens of the ratepayers and the addition to them due to fresh charges upon the rates. This proposal of the Chancellor of the Exchequer is in relief of the great increase in the burdens of realty from new charges upon the rates; it practically leaves hereditary burdens untouched, and the difference between property subject to rating and property not subject to rating still remains as in 1853, because it would be impossible that it could be removed. Nay, it is even increased, because there has been an increase of rates since that time so enormous as practically to outweigh the additional relief now to be given. I End, from the Report of the Chancellor of the Exchequer in 1870, that the sum of £9,916,000 was raised in 1852 from the rates in England and Wales. In the year 1886–7 that was increased to £26,140,000. Even allowing for the £3,000,000 proposed to be given in aid of the rates, the result will be that 1 per cent more on the total rateable value will be paid by the ratepayers now than in 1852. The right hon. Gentleman followed the right hon. Member for East Wolverhampton (Mr. Henry H. Fowler) in saying that this great increase of rates is practically an increase in the towns, and not in the country. I quite admit that fact; but remember that the increase of rates in the towns has been accompanied by an increase of ability to bear the rates. The right hon. Gentleman quoted the increase of rates in Middlesex and some large towns during the last 10 years. But what has been the increase in the value of property on which those rates are levied? I find that in 1875 the rateable value of property in the Metropolis was £21,193,000, but in 1885 it was £29,419,000. The corresponding figures in Lancashire were £10,370,000 and £17,936,000. In the West Riding of Yorkshire in 1875 the rateable value was £7,754,000, and in 1885 £9,722,000. I find these figures borne out by Returns arrived at on a wider basis. Hon. Mem- bers are no doubt acquainted with the paper on this subject by Mr. Giffen. Mr. Giffen shows that in 1865 the percentage of house property in the United Kingdom to the total value of property was 16,½ per cent. He informed me the other day that from a recent calculation it was in 1885 20 per cent. In the same way the Income Tax Returns show that in 1877, houses were assessed to Income Tax at £90,000,000, and in 1887 at £117,000,000, or an increase of 29½ per cent. There is, therefore, a distinct increase of ability to bear rates on the part of property which I admit has been mainly liable for the increase of rates. But how is it with regard to property in the agricultural districts? I find Mr. Giffen calculates that whereas in 1865 land was estimated by him as 30 per cent of the total property of the United Kingdom, in 1875 it had sunk to 24, and in 1885 to 17 per cent. The Income Tax Returns show that in 1877 land was assessed at £51,000,000, and in 1887 at only £45,000,000, showing a decrease of 12½ per cent. But the official Returns do not show the whole case. The rates levied on land have increased, though I admit not largely increased, since 1853, for though I believe there has been some decrease in the expenditure on Poor Law relief, the increase of other rates has in many cases more than equalled that decrease. But the ability of land to bear rates has never for many years past been lower in England than it is at the present moment. ["No, no"] I wish hon. Members who doubt that statement would refer to the evidence of Sir James Caird before the Royal Commission on the Depression of Trade in 1886. He informed that Commission that the Inspectors of the Land Office, whose knowledge of the agricultural position was necessarily most intimate, estimated the reduction in the spendable income derived from landed property in the 10 years 1876 to 1886 at from 10 per cent in Lancashire, Cumberland, and Westmoreland, to from 25 to 40 per cent over the South and East of England. His own estimate of the total was that there had been a decrease of £15,000,000 annually, or 30 per cent of the total income from land all over England. I believe that any Member on either side of the House who has any real acquaintance with the present condition of agriculture will admit that in making that calculation Sir James Caird certainly did not go beyond the truth. It may be argued that if the value of laud falls, so will the Death Duty payable on it. ["Hear, hear:" from the Opposition.] I thought so me hon. Members would cheer that statement. But the right hon. Gentleman did not use that argument, because he knows that the Death Duty can only be payable by the successor to the property out of a not income now so enormously reduced that a very little more would make the margin disappear altogether. In many cases, by the increase of the Death Duties you might compel the owner of real property to sell it. [Mr. LABOUCHERE (Northampton): Why not?] The hon. Member for Northampton asks why not. I will tell him directly. I have said that the other charges to which realty was subject were not the only reasons which induced the right hon. Gentleman to consider it favourably in 1853. He then said— I think it is a policy worthy of some consideration not only to give something that may tend to counteract the special burdens borne by real property, but likewise to take care that you so adjust the payment of the tax in regard to property of that description, that you do not allow it to become an engine of great and serious evil by forcing changes in the possession of the land. The right hon. Gentleman gave an example of what he meant by that. He said— Take a large estate worth some £500,000, with a gross rental of £16,000 or £18,000 per year, and a net rental of £13,000 or £14,000, mortgaged for £300,000; the mortgages would absorb some £12,000 of the rental, and leave but £1,000 or £2,000 a-year to the possessor, which will represent the annual value of the life interest, while, at the same time, there would be an excess of capital value over the mortgages reaching to £200,000. Now, I think if you charge upon the capital value, there is no way in which you could meet that case so as not to give the tax the effect and character of an engine for displacing the present possessor. Some hon. Members may ask why not? I will answer in the words of the right hon. Gentleman— I think it would be an invidious, an offensive, an unwise, and an unjust measure not to facilitate the parting with property by persons disposed to part with it; but to lay on a tax in such a way as would have the effect of forcing them to part with it, and there is no tax, however moderate it might be, if it were fixed upon the capital value of such an estate as I have described—when you consider how attenuated the income would be—there is no tax which would not have the effect of compelling the possessor to bring his estate into the market. Now, I wish the right hon. Gentleman had referred in some measure to these considerations when he put forward his appeal to the masses of this country. I do not know why such a proceeding should be more offensive, invidious, unwise, and unjust, in the year 1853, than it is in the year 1888, when land has sunk to a point far below anything which it had reached in 1853. In many parts of the country it is practically unsaleable, so that the injustice and unfairness would be largely increased. The right hon. Gentleman then gave a third reason why he would not charge life renters on their life interests, and the person who comes into absolute possession on the perpetuity, because— You would thus establish a system of law that would work in favour of the great landed proprietors, and against the small holders of land. He referred to the undoubted fact that it is the custom to settle large estates, and not the custom to settle small estates, so that as a rule the inheritor of a large estate would have but a life interest, whereas the inheritor of a small estate would have to pay on the whole. Is it not obvious that if you charged on the perpetuity you might have, in the same parish, a peer paying a diminished rate of Death Duty as tenant for life, and a yeoman or a working man succeeding to a house and a few acres of land unsettled, upon which he would be charged as upon a perpetuity? Is that an injustice which the right hon. Gentleman desires to inflict upon small owners of land? I always thought it was the desire of that as well as of this side of the House to increase the number of small owners of land in England. But what inducement do you hold out to the working man to invest his savings in land, if you not only impose on land burdens which it is unable to bear, but discriminate in your taxation against him and in favour of his richer neighbour. I therefore, for these three reasons, conceive that the arguments of the right hon. Gentleman, addressed to Parliament in 1853 in favour of making a distinction of this kind on behalf of real property in respect of the Death Duties, are as sound now as they were then, and I hold that this distinction should still be maintained. But, Sir, for the purpose of the argument which I now wish to put before the House, I will admit the contention of the right hon. Gen- tleman that the system of charging on the life interest should be done away with, and that realty should be charged with Death Duties upon its capital value. Now, I told the House that £148,000,000 represents the average annual value of personalty charged with Death Duties, and£31,000,000 the realty so charged, calculated on the life interest. My right hon. Friend the Chancellor of the Exchequer stated the other day that that calculation was based upon this—that the life interest on the average is taken by the Inland Revenue Commissioners at 13½ years' purchase. The right hon. Gentleman opposite thinks that in order to arrive at the capital value, that period should be doubled. I do not agree with the argument addressed by the right hon. Gentleman to the House in proof of his contention that the fall in the income of realty did not carry with it a fall in the number of years' purchase for which it may be sold. I believe the fall in the income of realty and of the number of years' purchase for which it may be sold go together; and that were it possible to obtain Returns showing the number of years' purchase for which estates are now sold, it would be found that the number of years' purchase calculated on the reduced income is less than it was when calculated on the former income. But I have another point which has not been considered. A very considerable portion of the realty to which I am referring is composed not of land, but of freehold houses. It is obviously unfair to calculate the value of freehold houses at anything. like 27 years' purchase; but I take the value of the whole at 25 years' purchase, and I find this would make an average annual value of realty charged with Death Duties calculated on the capital value of 25 years' purchase as £57,000,000. Add to that the capital value of realty paying Legacy Duty as £8,000,000, and real property passing direct from husband to wife without any duty at £3,000,000, and that makes a total of £68,000,000 of real property, as against £148,000,000 of personalty. Now, if this paid the same rate of Death Duty as personal property, it would pay £2,300,000 instead of £1,100,000, so that there would be a balance of £1,200,000 in favour of realty. But now I come to a part of the question which the right hon. Gentleman did not touch. I have shown that calculating the relative value of realty and personalty on the basis which he desires, realty benefits in its payment to Imperial taxation through the Death Duties by £1,200,000 a-year. But is not realty subject to other charges for Imperial taxation which personal property does not bear? Why, the right hon. Gentleman did not investigate that question in a single sentence. I will not dwell on the House Duty, because part of the House Duty might fairly be considered a tax on personal property. But how about the Land Tax? Is it charged on personal property? It is charged solely on realty, and amounts to £1,030,000 a-year; but its real amount may be taken as £2,000,000, because the House will remember that half the Land Tax has been redeemed, and that, in calculating the burden of that tax, you ought fairly to take into account the interest on the money spent in its redemption. But, taking it as it stands at £1,030,000, realty is still at another disadvantage as compared with personalty with regard to the manner in which it is assessed to the Income Tax. The owner of real property is assessed to Income Tax at a figure which is calculated by the Inland Revenue Commissioners as 20 per cent more than he receives. The owner of personal property is assessed to Income Tax only upon what he actually receives. The right hon. Gentleman himself stated that a 7d. Income Tax on personalty was equal to a 9d. rate on realty, so that he appreciated the point to which I allude, and yet he never included that as a burden which realty bears in the estimate he submitted to the House. The total amount charged under Schedule A is £180,000,000 a-year. If you deduct from that income arising from the rent of leaseholds, interest on mortgages, from Corporation lands, and other items which do not come under the head of real estate subject to Succession Duty, the Inland Revenue Commissioners have calculated that £110,000,000 a-year remains as the gross income of real estate subject to that duty. The 6d. Income Tax on that amount will produce £2,750,000. If realty bears 20 per cent more than personalty on the assessment to the Income Tax, 20 per cent of that amount represents a stun of £550,000, which ought to be put down to the credit of realty in comparing its burdens with those of personalty, and so, adding to the £1,030,000 of Land Tax that sum of £550,000, I have shown to the House that, on the whole, realty pays £1,580,000 more than personalty towards Imperial taxation, as against the £1,200,000 on account of the Death Duties which, if you assess realty to those duties at its capital value, you may argue that personalty bears more than realty. I will leave this case to speak for itself. It seems to me that I have done something to establish two great propositions. First, that the inequality between rateable and non-rateable property with regard to local taxation is not entirely removed by the proposals which we have submitted to the House, but remains now as it was in 1853, and that, therefore, any arguments which then justified the favourable treatment of realty in the matter of the Death Duties, on account of the burden of local taxation, are equally applicable now, and even more applicable, on account of the ruinous condition of agriculture. Secondly, if you take, according to the best statistics, the relative taxable values of real and personal property in this country, that realty, even under the system of charging it to Succession Duty on life interest, now pays more to Imperial taxation than personalty. The right hon. Gentleman said something about the advantage which realty has in the delay in the payment of Succession Duty as compared with the prompt payment of Legacy and Probate Duty. I think that was answered fairly by the Chancellor of the Exchequer the other night. It is, of course, rarely posible to separate part of the estate in the case of realty, and sell it for payment of the tax with the same facility as in the case of personalty; and where the real estate is small—perhaps only a single freehold house—such a proceeding becomes absolutely impracticable. If, therefore, you were to levy the tax upon realty as promptly as the tax upon personalty, you would impose a charge upon the successors of realty which would. directly lead to their burdening their property for the payment of the tax. That surely would be a financial operation which this House ought not to encourage. For these reasons, therefore, I trust the House will not, as asked by the right hon. Gentleman, in the name of fancied equality in the Death Duties, perpetrate a great injustice upon the real property of this country. I suppose we are all ready to exaggerate the difficulties of our own times; but I do not believe that the condition of agriculture in this country has for many generations been so bad as it is at the present moment. Wages are low, yet employment is very scarce. Labourers are flocking to the towns from the country. Why? Because the farmers have no capital, and the landlords see their rents diminishing to a vanishing point. This is not a state of things in which you should seek, by the policy of the right hon. Gentleman opposite, to aggravate the difficulties of a distressed interest. The landowners of England are comparatively few in number, and they have lost much of their political power; but I think they may claim to have deserved at least as well of the country as any other class. They are quietly, and with great patience, fighting difficulties which certainly are not due to any action of their own. They ask for no favour at the hands of this House. All they ask for is fair and unprejudiced consideration of the circumstances in which they are placed, and I believe that that request will not be refused.

MR. W. E. GLADSTONE

I am sure the House will allow me to explain an error into which I fell in the course of my speech. I made my computation that 3⅝ was the rate which personalty will pay under the new system, on an assumption that £8,000,000 of second personalty which pays Succession Duty also pays Probate Duty. I find that I was wrong, and I have to apologize to the House for that. It does not pay Probate Duty, and consequently I must add it to the amount of personal property paying Probate Duty, in order to estimate fairly the incidence of the whole charge. Instead of £138,000,000, which was the sum in 1886–7, the sum becomes £146,000,000, on which the amount paid by personalty has to be reckoned. Reckoning it so, instead of being a little over 3⅝ per cent, as I stated, it is slightly under 3½ per cent. Consequently, the future payment to be made by personalty, instead of being fully three times the amount paid by realty, will be a small amount short of that.

MR. HALDANE (Haddington)

said, he thought the right hon. Gentleman the President of the Board of Trade (Sir Michael Hicks - Beach) had led the House away from the point of the Motion, the object of which was to remove the inequality and gross injustice in point of principle which attached to personalty as compared with land in the payment of the Death Duties. The details of the proper appropriations in aid of real estate were not what they were there to discuss. With regard to these Death Duties, the oldest and simplest was the Probate Duty, which was nearly two centuries old, having been established in 1694. Then there came the Legacy Duty, imposed in 1780 and remodelled by Mr. Pitt in 1796, which consisted of a sliding scale varying with the degree of propinquity to the deceased of the person who took the succession. Now, with regard to the burdens on land, the right hon. Gentleman the Chancellor of the Exchequer (Mr. Goschen) in 1871 had said that a historical retrospect seemed to prove that, as regarded those burdens, they were not so heavy as in most foreign countries. In 1853 the right hon. Gentleman the Member for Mid Lothian (Mr. W. E. Gladstone) had introduced the Succession Duty Act. It was only when the Succession Duty Act was passed that land was first made subject to a Death Duty. But while on succession to personalty, whether under the Legacy Duty Act or the Succession Duty Act, payment had to be made on the capital value, in the case of succession to land payment was on the annual value only, and that only on an annuity calculated on the life of the person who succeeded, whether he succeeded in fee-simple or not. But the anomaly did not stop there. There was another point to which attention had not been drawn that night, but which was as important as any other in showing the anomalies of the position. Under the Succession Duty Act of 1853 land was to be taxed for the purposes of succession, not, merely, only on the life interest, not only on the footing of an annuity, not upon the value of the land, but upon the value the land was actually producing. If the land was producing nothing at the moment, even although it had an enormous prospective value, it would escape scot free. This led to a very great loss to the Revenue in many cases. The case of Lord Sefton, who succeeded in 1855 to the Toxteth property, near Liverpool, consisting of 48,000 square yards, which at the time yielded nothing, was an illustration. In 1862 he sold a great portion of the land at 16s. the square yard, and the Inland Revenue Authorities took the case to the Court of Exchequer, to see if there was any way of making him liable for Succession Duty; and the judgment was that under the Act the claim of the Crown could not be supported. Could there be a more extraordinary illustration of the anomalous position in which this matter stood as regarded the land? He would suggest that the proper proceedings to take to remove the anomaly were—first, to make the appropriations they were all agreed upon, so that personalty might pay as much as land towards Imperial purposes. Next, he would say, devise machinery which will assimilate the contribution which land paid to the Death Duties as compared with personalty; and for that purpose they must do three things. In the first place, they must get rid of the anomaly under which they paid only on the actual annual value or yield in the way he had described, and they must make land pay under Section 21 of the Succession Duty Act in the same way as they made personalty pay. In the second place, the payment must be on the capital value, and not, as at present, on the annual value. In the third place, the landlord ought not, as at present, to escape payment of Probate Duty altogether. No doubt, if they were to redress the grievance, it involved taking in hand certain changes in the Land Laws. But the Government had very fairly brought forward this Session, in "another place," propositions in the form of the Land Laws Bill, which extended to transfer and to changes in the general law. There had been objections taken to the proposals with regard to transfers; but, so far as he knew, no objections had been taken to the others. The Government should separate the substantive portion of the changes they proposed, including the abolition of the principle of primogeniture, making land pass to a real representative, who should take out probate with respect to the land, and pay duty of exactly the same amount and nature as was paid at this moment with respect to personalty. That would bring about a condition of simplicity in the state of the Land Laws which they did not at present possess. They would equalize the Death Duties and make them payable all round. They would thus get rid of the anomalies to which attention had that night been directed, and the great difficulty which now existed, because the whole subject of taxation and rating was left in such a condition that it was almost impossible to get to the bottom of it. He believed those changes might be made very simply. It might be that they would involve additions of a kind not contemplated in a Budget Bill; but certainly they could be brought about very easily in that part of the Lord Chancellor's Bill which dealt with substantive reform in the Land Laws of this country, if it were taken up by the Government and passed, as he believed it could be done. He believed there was a good deal of difference of opinion on the other side of the House on these subjects. It might be that there was a considerable section of the Tory Party which was not ready for these changes, and which had sentimental views regarding them. On the other hand, there were eminent Members of the Tory Party—such as the right hon. Gentleman the Chancellor of the Exchequer—who were advocates of fiscal changes of the kind he had referred to, and who, in writings and speeches, had advocated changes which went to the root of the question. But the difficulty was that the right hon. Gentleman the Chancellor of the Exchequer and other hon. and right hon. Gentlemen were fighting with their hands tied. They had, besides, to reckon with the majority behind them. It might be that the majority would not let them have their way. But it was not the less the duty of the Opposition in the clearest way, and without hesitation, to put before the House and the country the line of demarcation which divided them from the other side, and which made it essential that they should not be content with less reforms than were suggested by the Motion now before the House.

SIR RICHARD PAGET (Somerset, Wells)

said, it was impossible to take any exception to the able speech which had been delivered by the hon. and learned Gentleman the Member for Haddington (Mr. Haldane). He was apparently acquainted with all the difficult and intricate details of the Legacy and Death Duties, and had dealt with them after the manner of an expert. Now, he (Sir Richard Paget) in no way regretted that the right hon. Gentleman the Member for Mid Lothian (Mr. W. E. Gladstone) had thought right on this occasion to raise the question of the relative taxation on real and personal property. It was just as well that these things should be thoroughly brought to light; that they should be examined in their various details; and speaking here for himself—and he was sure he might venture also to speak for many who sat around him—he could say they shrank in no degree from the fullest and most complete investigation of the whole of the incidence of this taxation. They claimed no privilege; they asked for no favour; they demanded nothing at the hands of the House but the plainest and most absolute justice; and whatever that justice might be they would be content with it. But when they approached a question of this magnitude they were obliged to take a broad view, and not limit their attention to any one incident of taxation. It might be—and he fully admitted it—that in respect of the Death Duties "real" property undoubtedly possessed a considerable advantage; but what they had to consider was whether this was not now met by something on the other side, and whether the balance was not far more than redressed when they looked at taxes of a different description and examined into their incidence. This raised the question whether it was right and whether it was wise as a financial proposal entirely to equalize the Death Duties, and by so doing to present an appearance of equality? He should like, in this matter, to quote the opinion of one who was an ornament to that House, and whose words, he was sure, would always demand attention—he meant the late Mr. Fawcett. Now, Mr. Fawcett clearly, in his admirable work on political economy, after quoting Adam Smith's views as to the justice of taxation, and after having said— The aggregate amount which each individual pays in taxes ought to be in proportion to his ability to contribute to the Revenues of the State, laid down that this equality of taxation could never be perfectly secured, and added— It may, however, be approximately obtained by giving to one class, with regard to some taxes, certain advantages which will, in a rough kind of way, provide a compensation for disadvantages which the same class may suffer from inequalities of taxation. There was no doubt that the class of property which was called "real" property did, with regard to the Death Duties, obtain certain advantages; and was it not the case that in a rough kind of way compensation was rendered by disadvantages which attached to the same class of property in respect of Local Rates, in respect of the incidence of Income Tax, which had already been alluded to; and, further, in respect of the imposition of the Land Tax? Mr. Fawcett evidently was so strongly possessed of the view that there must be inequalities, and that they could not put them all to rights by levelling up on any one tax, that having passed from the question in the paragraph alluded to, 10 or 12 pages further on he was found returning to the same subject— Equality of taxation can be best secured not by botching and patching each single tax, but by contemplating the Revenue as a whole. If it is found that any tax pressed unequally on any particular class, it is almost invariably better not to attempt to adjust the tax by any complicated arrangements. The inequality of taxation should be remedied by placing the particular class whom it prejudicially affects in a relatively advantageous position with regard to some other tax. Here was the same principle laid down in words almost similar to those already quoted, and another dozen pages later on the writer was seen repeating the same view in these words— Equality of taxation can be most effectively secured not by framing any one tax in obedience to Adam Smith's first rule, but by applying a general process of compensation to the whole revenue. Now, the question was, not whether there was any inequality in the incidence of the Death Duties on real property as compared with personalty; but the question was, taking the Revenue as a whole, was there a general process of compensation which, admitting inequality here, made up for it by imposing a disadvantage on real property in another direction? What was the case with regard to this? He had observed just now, when the right hon. Gentleman the President of the Board of Trade (Sir Michael Hicks-Beach) was addressing the House, that some observations the right hon. Gentleman made with respect to the incidence of the Land Tax were received with somewhat contemptuous smiling and sneers by certain right hon. Gentlemen on the other side of the House. Now, what was the case as to this Land Tax? Here, fortunately, they need not be in any difficulty, for they had the most accurate information that it was possible for them to be provided with. He held in his hand the 29th Report of the Commissioners of Her Majesty's Inland Revenue for the year 1886, and he would remind the House that this Report followed in natural sequence after the 28th, which was one of unusual value. The 28th Report was a most able public document, giving a short and concise history of the work of the Inland Revenue Department for many years past; and it was a document which, by the way, he should like to see imitated in another Department of the State (the Customs) in which some hopes had been held out to them that a similar Return would be furnished; but as yet it had not made its appearance. In the 28th Report attention was called to the original position of the Land Tax and its history. That remarkable reference to the Land Tax in the 28th Report appeared to have been made the subject of some discussion. For they found, in the 29th Report of the Commissioners of Inland Revenue, from which he was about to quote, that it was mentioned in the following terms. They said— As the sketch of the history of the Land Tax given in our 28th Report has occasioned some criticism and inquiries, we take the present opportunity of supplementing it with the following statement. Now, that statement was of considerable length, and he would not refer to it all; but it was open to hon. Members to consult for themselves. He would, shortly, allude to a few of the paragraphs to be found in the Report. It said— The history of the existing Land Tax may be said to date from 1692 …. The tax was levied on all personal property, all offices (except naval and military offices), and all real estate.…. For a hundred years the Land Tax was voted annually according to the system about to be described.…. In 1703 Mr. Pitt abolished the practice of fixing the amount of tax annually, and put it on a permanent footing as a charge of £1,989,673 on England and Wales, and of £47,954 on Scotland, the rate on personal property and offices being left, as it stood, at 4s. in the £. Here, then, they saw that, for a century, the Land Tax was levied on personal property. Now let them go to the next paragraph— In the meantime, however, personal properties and salaries had almost entirely slipped out of assessment, probably owing to the fact that it was impossible to localize them, and the burden of the tax had fallen almost exclusively on real estate, the whole sum contributed by personalty and offices in 1798 being only £150,000. Personal property, however, was only legally relieved from the tax in 1833. … It will be clear from the foregoing remarks that the Land Tax was originally nothing else than a Property and Income Tax locally charged; but it can only now be described as an anomalous relic of past times. He should like right hon. Gentlemen who treated in a contemptuous manner the suggestion that the Land Tax was a special burden on real property to say what better proof they could have than this. Here was a tax imposed on all property, personal and real, and yet, as the Report said—" Personal properties and salaries had almost entirely slipped out of assessment." The only Land Tax levied was that attached to realty, and this was a case they could point to as being one in regard to which, a burden having been originally imposed on all property, one large class of property had slipped out of assessment; therefore, when they came to consider the relative burdens on real and personal taxation, here was clearly an important factor which they must bear in mind. If they were setting up equality all round, the Land Tax should be altogether abolished. He observed that the right hon. Gentleman the Member for Mid Lothian had laid great stress upon the necessity of settling this question once for all. His words were that this adjustment was not to be repeated from year to year, not even from five years to five years; but when they had fixed it once they ought to have done with it, and done with it for ever. Now, he (Sir Richard Paget) should like to say a word upon that. If the great increase in the value of the two classes of property, real and personal, were going on pari passu, if the increase from year to year was identical and equal. then there would be nothing in the world to contend against the argument of the right hon. Gentleman. But what was the fact? Why, the slightest glance at any figures accessible would show that real property, taken as a whole, including land and houses, was a class of property which was making very slow progress from year to year, while the class of property which was called personal property was increasing at an infinitely more rapid rate; and if they sought to find out what was the effect being produced on different classes of real property by the existing condition of things they would find out that one considerable part of such property—namely, land—was decreasing in value from year to year, and that it was due alone to the number of new houses built that real property exhibited, as a whole, any increase at all. Statistics showed—if he recollected right—a decrease of no less than £5,000,000 of annual value of land within the last few years; but it was acknowledged by all who took the trouble to study the figures that there were no official figures in existence which showed in any degree the amount of the depreciation in the value of land. The reason was obvious. There were many cases in which the owners of property maintained certain rents on paper, but in which, year by year, abatements were made of from 10 to 20 per cent, which abatements found no place in the Returns, because the assessment, which was the sum taken as the value for the purpose of Income Tax, remained unchanged. There was, he repeated, a decrease of annual value of land to the extent of £5,000,000 shown in connection with the Income Tax between the year 1881 and 1886; but in the calculations no note whatever was taken of the temporary abatements which were made from year to year, and there were no Returns which really represented the amount of depreciated value of that class of real property. Now, the right hon. Gentleman the Member for Mid Lothian had largely quoted from the Return which he (Sir Richard Paget) had had the honour to move for in the year 1885. That Return was called Sir Henry Holland's Return, and it also bore his (Sir Richard Paget's) mane. It was with great interest that he had watched the right hon. Gentleman dealing with the figures in this Return tonight. He could not pretend, for a moment, to imitate the right hon. Gen- tleman in the masterly way in which he had dealt with these figures, handing over huge totals from one side to the other, taking figures on one side as the basis of calculation and dashing them over to the other side, changing them about with such rapidity of motion that he (Sir Richard Paget) could not attempt to follow him. But of this Return, so far as to its accuracy with regard to its estimate of capital value of real and personal property, he was bound to say that through all the observations he had heard from the right hon. Gentleman the Member for Mid Lothian, the right hon. Gentleman had not expressed any adverse criticism, unless it were in regard to the valuation of messuages and tenements which he held were valued too low, at only 16 years' purchase. The Return had been accepted by the right hon. Gentleman as the basis of the great speech he had delivered this evening. Now, this Return was one partly of accurate figures and partly of estimate. He (Sir Richard Paget) desired to go into this Return, but he wished to say beforehand that, though it was put forward with all the authority of the Treasury, it was not put forward by them as an absolutely correct account. It was, he repeated, a matter of estimate, and as an estimate it might be open to criticism; but here it remained as the only estimate of the kind made by the best and most qualified officials, and for what it was worth he took it that it might be said that it at present held the field. There was nothing equal to it, and the right hon. Gentleman the Member for Mid Lothian bad largely quoted from it, and, as he (Sir Richard Paget) had said, had used it as the basis of most of his calculations. But the right hon. Gentleman bad not followed the Return throughout. There was one remark which he (Sir Richard Paget) should like to make with regard to the Return before he addressed himself to the point he wished to make. He would call attention to the fact that real property and personal property, whatever their present value might be, were altering in their relative rates of progress, and that personal property was increasing in value very rapidly, whilst real property, as a whole, was increasing very slowly, and that that portion of real property represented by land was not in- creasing at all in value, but was rapidly and seriously diminishing in value. Now, for purposes of argument, he had made a calculation which took this Return forward from the year 1883–4 to the year 1886–7; and, applying the figures the right hon. Gentleman had given them to-night to the year 1886–7, he found this. Looking at the estimate of the gross capital value of real property, he found that all real property had increased in value in the short space of three years by £30,000,000. Turning to personal property, to ascertain what had been the relative increase of that description of property, he found that, so far from its having been £30,000,000, it was £170,000,000. Here they had clearly, in the course of three years, an increase of £170,000,000 personalty, as against £30,000,000 in the case of realty. Now, after that, was it possible to contend that they could settle and adjust this taxation once for all, and have done with it? He contended that it was impossible. He contended that if they arrived at the most careful adjustment that the most skilled and accomplished financier could accomplish, they would, at the end of three years, have the balance entirely disturbed again. Hence, if the rates of progress shown in the official Returns still continued—that was to say, if personalty rolled up and increased in volume with great rapidity, whilst real property hardly increased in value at all—whatever adjustment took place, one would always keep on developing at a larger ratio than the other, and would always keep ahead of the other. However often they brought them back to the same starting point, they would always find the same thing happening in a short time; and his contention was, without going into figures to prove it, that, however accurately and however free from political bias they might arrange and adjust taxation on the two great classes of property, real and personal, that as they were increasing at different rates, so fresh re-adjustments would be necessary from time to time. He wished to emphasize this point, as it had appeared to him that the right hon. Gentleman the Member for Mid Lothian had treated it on a different footing, crying aloud—"Let a re-adjustment be effected now once for all; let us put an end to the matter." Now, in reference to the figures which were quoted by the right hon. Gentleman, it seemed that the right hon. Gentleman had hardly completed his speech before he found it necessary to get up again and make, at any rate, one substantial correction. They were first told that, according to an approved method of calculation, the burden on personalty in respect of the Death Duties was at the rate of 3⅝, whilst that on realty was only 1⅕; but the figures, as amended, put the matter differently, as personalty was at the rate of 3½, whilst realty remained at 1⅕. He (Sir Richard Paget) mentioned this matter to show that though without doubt every figure had been got up with considerable care, yet, before the right hon. Gentleman had delivered his speech five minutes, it was necessary for him to get up and make an alteration of no less than £8,000,000 sterling, by which the figure £138,000,000 had to become £146,000,000. That would give them reason to exercise some care before accepting the whole of these figures as conclusive. Another thing occurred to him. Supposing, for the sake of argument, the amended figures exhibited correctly the incidence of the Death Duties on the two great classes of property, and supposing it was 3½ in the one case and 1⅕ in the other. He wished to draw attention to the other side of the case, and see how that would stand if the Income Tax were levied with absolute equality on real property and on personalty. The right hon. Gentleman the Member for Mid Lothian admitted that, owing to the fact that Income Tax on land and houses was levied on a gross rental, whilst on all other property it was levied on a net receipt, there was 16 per cent difference in favour of personalty; in other words, that an Income Tax of 7d. did, in fact, exact from "real property" not 7d. but 9d. in the pound. If they came to sum the figures up, they would find that the difference as against realty was a large amount; and he contended that when they were attempting to equalize the burden of taxation, it was unjust and unfair to take the Death Duties alone, and take no account of Income Tax. It required no great calculation to see that 16 per cent was derived from realty to the advantage of personalty, or was suffered by realty in comparison with personalty, and he therefore held that justice demanded that this important item should be included in the calculation. He had already given some reasons why the incidence of the Land Tax ought fairly to be taken into consideration as well; but if they took first the question of re-adjustment of the Income Tax, and then the question of the Land Tax, and then added the question of the incidence of Local Taxes, he felt satisfied that when the figures were put together, so far from there being any balance whatever to show on the side of personalty, the balance would be entirely turned the other way, and they would find that the aggregate disadvantage suffered by real property more than counter balanced any advantages real property would derive in the matter of these Death Duties. The right hon. Gentleman the Member for Mid Lothian had pointed, apparently with great pleasure and satisfaction, to the increase of local taxation in the Metropolis and large towns. He (Sir Richard Paget) confessed that he was unable to enjoy or share the satisfaction which the right hon. Gentleman seemed to feel. The right hon. Gentleman had talked of "magnificent increment." That had reminded him (Sir Richard Paget) of the speech of the right hon. Gentleman the Member for East Wolverhampton (Mr. Henry H. Fowler), whom he was glad to see in his place. The right hon. Gentleman the Member for East Wolverhampton was one of those statesmen who delighted in magnificent increments of local expenditure, and no doubt the borough which the right hon. Gentleman so honourably and worthily represented might be taken as a magnificent specimen of the increment of very unnecessary local expenditure. But the right hon. Gentleman the Member for Mid Lothian quoted figures as to the increment of local expenditure to them as an example, and said—"Go you and do likewise—spend your money in this off-hand way." If there was one thing they were proud of in the administration of Quarter Sessional areas more than another, it was that they had not given rein to magnificent notions, but had been economical, and had kept their expenditure within reasonable limits. Was this to be thrown in their teeth now, and because they did not exhibit those magnificent increments of local expenditure incurred by the Metropolis and the large towns, were they to be deprived of the benefits of the urban districts? Some attempt was made in the Budget to restore the equilibrium which had long been admitted to be grievously out of joint; but he had very grave doubts whether the amounts which were to be given in relief of local taxation would have at all the effect of restoring that balance, and when they went beneath the surface of the total figures of £3,000,000 and saw how much of the relief would go to the land, and how much to houses, he very much doubted whether that class of property—namely, land—which he contended was most in want of it, would receive its fair share. Then he should like to call attention to this fact. They had heard a great deal about the advantages of the additional £3,000,000 which were to be given in aid of local taxation; but there were also many disadvantages to be considered. There would be large extra expenditure on the part of Local Authorities of which they had heard very little. There were the expenses of elections to be considered. The right hon. Gentleman the President of the Local Government Board (Mr. Ritchie) had disposed of an answer to a Question on this subject in a very light-handed sort of way, stating that he thought the charge on this would be one-sixth of a penny in the pound. His (Sir Richard Paget's) impression was that, so far from the elections connected with all these County and District Councils being conducted for so small a sum as that, they would prove not to be one-sixth of a penny in the pound, but a vast increase upon that amount. And there was not only the expenditure of elections to be considered, but also the expenditure of registration in the case both of the new Local Authorities and also the Boards of Guardians. The expenditure of these two subjects was likely to prove very large, and to make a considerable hole in the amount to be made over to the Local Authorities. There would also be expenses in connection with the revising barrister, in connection with audits, in connection with clerks of assize, and in connection also with criminal prosecutions. There would further more be expenditure connected with the issue of licences, and then again expenses connected with the ad- ministration of Provisional Orders. With regard to licensing, the new authority was to take the place of the Commissioners of Inland Revenue, and might have to undertake prosecutions. Then it had been suggested that the increased sum of 20 per cent to be paid for licences should be ear-marked. and should be specially hypothecated to defray the expenses of compensation to publicans. In this case £300,000 would be withdrawn from the total of the £3,000,000 which was to go in aid of local taxation. There were also duties in connection with the payment of police pensions, in aid of which there was good reason to believe that contributions had already been promised by Her Majesty's Government, but the whole of which would now have to be paid by the County Councils; so that if they looked at all the services which the new authority were to perform, which were not now performed by the counties, and put the whole in round numbers, it would be seen that a large reduction would have to be made in the sum to be paid in aid of local taxation. He must apologize to the House for having kept it so long. He thanked hon. Members for having listened to the observations he had made. He thought the figures quoted by the right hon. Gentleman the Member for Mid Lothian would require very careful attention. He trusted that on a future occasion it might be possible to do something like justice to the vast number of figures which he dealt with. He had been unable, as he had said, to follow the right hon. Gentleman in those figures to-night, although he had had the advantage of holding in hand the Return from which they were taken; but the right hon. Gentleman had not allowed the figures to lie in their accustomed bed. He had broken them up, so to speak, and it was necessarily a difficulty for anyone, however familiar with figures, to follow the right hon. Gentleman. It would, he knew, be contended that the burdens of which they complained were merely the hereditary burdens which attached to land; but he would recommend those who put forward that contention to study for a few moments only the work by Mr. Dudley Baxter, who dealt with this contention in a simple but masterly and logical manner, tore it into shreds, leaving not a rag behind. The argument as to the heredi- tary burden on land was a fallacious one. They might just as well say that railway shares had an hereditary burden attached to them of paying this Passenger Duty, and had no right to be relieved of that tax, the result of the partial repeal of which, if he remembered rightly, was immediately to raise the value of all the Metropolitan Railway Stocks. In re-adjustment of taxation the question to be solved was—Had a sufficient case been made out for relief? Was this class of property unfairly taxed? It was not usual to consider—and they had no right to consider—whether this or that property would be increased or decreased in value by the relief given. The proper thing to consider was what was just, and then they could not do wrong. They should stick to the principle laid down by Adam Smith, as interpreted by Mr. Fawcett—namely, that the aggregate amount which each individual should pay in taxes ought to be in proportion to his ability to contribute to the Revenues of the State. That was the principle he gave his adhesion to—equal justice to all. But he maintained that they gave but the scantiest justice if they withdrew important matters from consideration, and said that the Death Duties alone were to be looked at. A dead set was made upon those duties, and they were held up to obloquy—everyone interested in land or houses was held up to the people of the country as a monster of iniquity who was not charged the proper amount of taxation. It was said that they should leave all else alone, and once for all equalize the Death Duties; but his reply was—"Equalize the Death Duties if you like, but, if you do so, see that, when they are equalized, there is no other tax you can point to the incidence of which is unequal." If they got rid of the inequality of the Income Tax and the Land Tax and of Local Taxation, then, he said, by all means take the Death Duties and level them throughout.

MR. O'DOHERTY (Donegal, N.)

said, he would not have interfered in the debate, especially considering the high level at which it was started, had it not been that the Death Duties had been dealt with in Questions which he had the honour to put to the Chancellor of the Exchequer with reference to Ulster tenant right. He had practical experience in the North of Ireland, and by statistics which he had searched for he found that his experience was the practice of the entire Province of Ulster. Prior to the passing of the Act of 1870, the tenant's interest in Ulster was not recognized; after the passing of that Act it was realized and became an asset, and this extraordinary thing immediately occurred—that when a farmer died the tenant right of his farm, which had been thus realized by the Act of 1870, became necessarily part of the assets upon which the Death Duties were paid, and in that respect the Ulster farmer stood in a different position to the farmer in any other part of the Three Kingdoms. The Ulster farmer stood permanently the heaviest taxed of all the various persons who paid Death Duties, being oven more heavily taxed than the owner of the rated personal property upon whose grievances the right hon. Gentleman the Member for Mid Lothian (Mr. W. E. Gladstone) was so eloquent that night. He found, from a Return which was not yet public, but of which he had had the privilege of getting a copy, that the grants of probate and administration made out in the district registers in Ulster from 1870 to 1875 had been doubled. He had no opportunity of knowing the extent of the grants in the Probate Court in Dublin, which also had jurisdiction in local matters; but, certainly, he was within the mark when he said that the number of yearly grants had more than doubled in consequence of the Act of 1870. It was upon that matter that he desired last year, and before this discussion arose, to call the attention of the Chancellor of the Exchequer to the injustice under which the Ulster tenants and Ulster land generally was labouring as compared with land elsewhere in the Three Kingdoms. If tenant right in Ulster was something which was exactly analogous to leasehold property in England—that was to say, if it were not held at a rack-rent; and if it were something in repect of which credit would be given to the tenant; if it were a property that was tangible, that was always valuable; if it were an asset, and not a mere possibility of an asset; he could perfectly understand that his grievance would rise no higher than the grievance of any other possessor of rated personal property. But the Ulster tenant right never rose any higher than this—that it was the equivalent, he might say the exponent or the expression in money of the extent to which land hunger had risen in any particular locality; for a tenant right was not a thing which was saleable as any other property was saleable, either personal or real. There was no market for it outside the locality in which the land was situated, and it had no existence whatever unless at the particular time it came into the market, and for some time previously there had been no such sale. He understood that all property which was liable to Death Duty was property which, if sold at any moment and sold altogether, would be saleable property and would realize the amount at which it was assessed to duty; but that was not so in regard to Ulster tenant right. Ulster tenant right vanished entirely if there were three or four farms in a district for sale; it was not like the sale of chattel property or real property; it was a mere goodwill, and a good-will which had no possibility of finding purchasers outside its own immediate locality. It was entirely different from any other property in land, and entirely existed in, as he believed, the land hunger of a particular district. What he wished particularly to call attention to was that the property was co-existent with a rack-rent which could be imposed under a system of valuation by which the land in Ulster was valued at 25 per cent above the land in the rest of Ireland. These matters stood until the Land Act was passed. If, when the Land Act was passed, there had been a statement that, in fixing the fair rent of tenants, the owners of tenant right in Ulster should have had credit given to them, their grievances would have been exactly the same as those of leaseholders. But no such direction was given, and no such direction existed; the Ulster tenant farmer got no credit for his property, not a single penny was taken off the full letting value of the property, because he had Ulster tenant right. If he could prove actual matters in existence, and if those matters added to the letting value, he got credit for them; but so far as a property he purchased and for which he was assessed, and as to the letting value of which he had to swear, he got no credit; therefore he stood in a far worse position than that of a leaseholder. So the thing which distinguished the Ulster farmer, the thing which distinguished that rated personal property from any other referred to in the speeches that night was this—that while the Ulster tenant farmer was under the same charge for local rates, while he was paying the Probate Duty, he remained in the full letting value of his farm. While as much was paid in Death Duties in respect to a farm in Ulster as was paid in England, Scotland and Wales, the tenant paid for his tenant right, assuming the figures of the right hon. Gentleman the Member for Mid Lothian (Mr. W. E. Gladstone) to be correct, six times as much in the way of duty on personal property as a leaseholder would pay in this country. He called the attention of the Chancellor of the Exchequer to the matter last year in order that something might be done in relief of Ulster land, and he was met by the Chancellor of the Exchequer with the statement that the leaseholders in England were in as bad a position as the Ulster tenants. Now, let them examine what a farm in England, Scotland, or the South of Ireland paid in the way of Death Duties. A farmer was assumed to take the land on a rack-rent, and the Death Duties paid out on a farm similar in value in the Three Kingdoms were 1½, or 1 per cent, as the case might be, which were levied on the landlord. At the same time, a farm of the same size in Ulster paid as much as 8 or 9 per cent, and such a state of things had been going on without remedy, or without the slightest attention ever having been given to it, for as many years now as the Ulster tenant right had been realized. Why he desired to interfere in the debate was, if possible, to show that there was one species of rated personal property to which the attention of the right hon. Gentleman the Member for Mid Lothian (Mr. W. E. Gladstone) had not been called, and that there was one place in which the whole profit was subject to Death Duties six times as much as in any other part of the Three Kingdoms. There had now been established by law in Ireland the system of dual ownership, and therefore it was no longer the owner who paid the local rates, but the occupier; it was out of the produce of the farm that all increase of the rates must be paid, assuming that, at the fixing of the fair rent, the then existing taxation was taken into account. It was perfectly clear that in any system of dual ownership the landlord became the rent-charger, and stood in the same position as the owner of a head-rent in a town, and therefore they would have the full burden of taxation borne by the occupier. He thought it was right that he should show in what way he made it out that there was at least six times as much Death Duty paid on an Ulster farm as was paid in any other place. He made it out in this way. They were not allowed in Ulster to come in under the Succession Duty; it was the Probate Duty they had to pay. Moreover, they could not come in upon the life interest, they must come in upon the full selling value, which in many cases even exceeded the full fee simple value of the land lord's interest. While they were paying Probate Duty upon the full value of the landlord's interest, and while the landlord was paying his full proportion to Succession Duty, they in Ulster were paying—and he thought it was a fair thing to say—as much more for their land in Death Duty as the Succession Duty amounted to. He hoped that in the Bill they were now discussing something would be done to prevent that injustice continuing which had continued since 1870. He did not wish to detain the House longer, except to say that their grievance was aggravated by the present political situation. In England the leaseholder hereafter would be represented in the County Council, and he would be able to look after the local rates; but in Ireland it was proposed that they should go on paying until they had arrived at an altered state of mind. It appeared that they would have to continue to be represented, as at present, by persons who were as hard task masters as anyone could imagine. The Grand Juries of Ireland were completely made up of landlords, and they were the persons who were to look after the rates. If a leaseholder in England had a grievance, he would be represented in the County Council; but they in Ireland were handed over, tied and gagged, to the right hon. Gentleman's (Mr. Balfour's) nominees. Money was to be taken out of both their pockets, and, at the same time, they were to be tied and gagged, and utterly unable to say a word on the matter of local taxation.

MR. ELTON (Somerset, Wellington)

said, he only desired to interpose in the debate with one or two remarks. He came into the House as the hon. and learned Gentleman the Member for Haddington (Mr. Haldane) was speaking, and when he sat down he (Mr. Elton) rose to reply to him, but was unable to catch the Speaker's eye. The hon. and learned Gentleman made a speech which appeared to be of a very powerful kind, because it was based on an important decision. One part appeared to be based on a truism. The part of it which rested on the fact that personal property and real property paid on a different basis he (Mr. Elton) passed by, because he only wanted to refer to the case which showed, if it was decided, as the hon. and learned Gentleman said it was, that the most extraordinary and anomalous state of things existed greatly in favour of the landlords. The hon. and learned Gentleman made a very good case, as hon. and right hon. Gentlemen opposite sometimes did, supposing their premises to be correct. The hon. and learned Gentleman referred to the Toxteth Park case, in which a well-known decision had been given. The hon. and learned Gentleman did them the pleasure to read to them part of the judgment of the inferior Court; he did not, however, quote the suggestion of the House of Lords, which made a very material alteration in that decision. Anyone who took up Mr. Hanson's book on Succession Duty would see that the Toxteth Park case had exactly the opposite bearing to that which the hon. and learned Gentleman made out. In 1862, seven years after it had been found that the land had no value, the Court of Exchequer rejected the claim for Succession Duty, and held that no duty was payable. So far, the hon. and learned Gentleman was quite right. Mr. Hanson, commenting upon the decision of the House of Lords, said it was to be observed that the decision in the case proceeded on the express admission in the case that the land in question was not capable of yielding income, fluctuating or otherwise, and that Lord Chelmsford intimated that, but for that admission, it would probably be found that the land was not altogether valueless. Duty had since been paid in respect to other property of a similar description, so that the very great and anomalous privilege to the landowners disappeared into thin air on the authority of the House of Lords.

MR. SYDNEY GEDGE (Stockport)

said, he thought that hon. Members who read the Resolution which was moved by the right hon. Gentleman the Member for Mid Lothian (Mr. W. E. Gladstone), and who heard his speech in support of it, would have expected a very different issue to be presented from that which was actually laid before the House. When they came to read the Resolution, they found that the right hon. Gentleman proposed— That, in the opinion of this House, after Parliament shall have made the appropriations it may deem just in relief of local rates"— the right hon. Gentleman was evidently referring to the Budget now before the House, and to the Local Government Bill also before the House, which had been introduced by the President of the Local Government Board— the duties accruing upon deaths should be so fixed as to equalize the charge upon real and personal property respectively. Now, that pointed not to the equalization of one particular Death Duty, the Succession Duty upon real and personal property, but to the equalization of all the Death Duties. One might naturally have expected the right hon. Gentleman would have proposed that the Probate Duty should have been charged in the event of death upon the value of real property as well as upon the value of personal property. But, instead of that, the whole thing aimed at in the speech of the right hon. Gentleman was simply that the Succession Duty should be charged when a man succeeded to the fee simple of real property upon the actual capitalized value of the whole property, and not upon his life interest in it. The total amount per annum involved, taking the right hon. Gentleman's figures as correct, was about £280,000 a-year, so that all the magnificent peroration they listened to with wonder and admiration, if not exactly with delight, really amounted to a matter of £280,000 in each year of our Lord. [Cries of "No, no!"] He maintained that the whole point in issue was that they were to charge percentage of duty upon the value in perpetuity and not on the value of the life interest. He should be glad to be set right if he was wrong in the calculation he had made; he cer- tainly listened very attentively to the right hon. Gentleman, who said nothing about the Probate Duty, but only spoke of the Succession Duty. All the wickedness now charged against the Chancellor of the Exchequer lay in the fact that he proposed to increase the Succession Duty by 50 per cent, whereas, in the opinion of the right hon. Gentleman the Member for Mid Lothian (Mr. W. E. Gladstone), it ought to be increased cent per cent. That was not the first time the right hon. Gentleman the Member for Mid Lothian had undertaken to settle the question; it was not the first time he had even proposed to settle it permanently, and to make an end of it. The right hon. Gentleman felt very grievously the anomalies of the Death Duties upon real and personal property in the year 1853, and he brought these anomalies before the House, and said then he thought it proper and right to settle the matter at once, to remove the anomalies, and to make a permanent settlement of the matter. What did he do then? He went into the whole question of the Death Duties levied on the different kinds of property, and he pointed out, as he had done that night, that there were three kinds of property—there was the ordinary real property, the ordinary personal property, and that which he had described as visible personalty, such as leaseholds. He found that leasehold property then was subjected both to Probate and to Legacy Duty; he thought it was a hardship upon leasehold property that it should be subjected to both these duties; and he found that real property was subject neither to Probate nor to Legacy Duty. In order to remove this anomaly, and in order to settle the question at once and permanently, what did he do? The right hon. Gentleman was the person to propose, in 1853, that the Succession Duty should be paid, not upon the capitalized value, but upon the value of the life interest. He (Mr. Gedge) intended to repeat the argument which the right hon. Gentleman used in 1853, to show that there would be the greatest injustice and the greatest cruelty if real property were taxed upon the capitalized value, and still more if the duty were to be paid all at once. He recommended any hon. Gentleman who heard the right hon. Gentleman's speech to-night, or anyone who might read the report of the speech to-morrow, and felt disposed to be led away by his eloquence, to turn to Hansard of 1853, or to the newspapers of that date, and read the right hon. Gentleman's speech in introducing the Succession Duty Act. There they would find the matter carefully worked out in a temperate way, in a far more temperate manner than the right hon. Gentleman had adopted that night—without any attempt to trot out the masses against the classes or the classes against the masses; they would find that the right hon. Gentleman at that time treated the matter from a purely fiscal point of view, avoiding all sentimental considerations, and showing in the most admirable way, and with that eloquence and power of reasoning for which he was so distinguished, the injustice and cruelty of the course which he had been recommending to the House that night. He (Mr. Gedge) did not say that with the object of pointing out the inconsistency of the right hon. Gentleman, but to show that in a matter of that kind, when a man 45 years of age, the Chancellor of the Exchequer, introduced a new scheme of taxation, and did that in the way the right hon. Gentleman did, they might fairly look back upon the arguments the right hon. Gentleman used, and see that those arguments were not mere opinions, but were founded upon matters of fact; and that if the right hon. Gentleman showed then that a particular course of action was unjust and cruel and mischievous, they might fairly produce that speech when he took the opposite view and advocated the course he formerly denounced. It was conclusively shown by the right hon. Gentleman the President of the Board of Trade (Sir Michael Hicks-Beach) to-night that though considerable relief in rates would be given, they still left real property subject to heavy burden. The right hon. Gentleman the Member for Mid Lothian argued, in 1853, that the fairest mode would be to tax realty on the life interest only, and he gave a conclusive proof of the reality of the sentiments he uttered in that he took a large part of realty, which were called leaseholds, out of the category of the Legacy Duty and put them in the category of the Succession Duty, and made the duty even on the leaseholds payable upon the life interest only. The Succession Duty Act was passed. No doubt, it did not meet with the success the right hon. Gentleman expected. The right hon. Gentleman said that by 1856–7 the tax would produce £2,000,000 a-year, and would continue to produce a great deal more year after year, whereas it had rarely yielded half that amount. Nevertheless, the principle had been introduced; it was right and just; and he did not think it lay in the right hon. Gentleman's mouth to say that because they were taking one step towards the equalization of the duties they were bound to make another final settlement—to go the whole hog, and put Probate Duty on real property. Nor was it in 1853 alone that the right hon. Gentleman touched this question. He (Mr. Gedge) had a vivid recollection that in 1880 the late Sir Stafford Northcote dealt with the Probate Duty, and made the duty on the estates of men dying testate or intestate identical. He remembered how very angry, not to say savage, the right hon. Gentleman the Member for Mid Lothian was with Sir Stafford Northcote, because, having once touched the Probate Duties, he did not redress all the grievances connected with them. He remembered that one of the things the right hon. Gentleman was particularly eloquent about was that Sir Stafford Northcote still left the Succession Duty payable upon a different footing to the Legacy Duty; the Succession Duty being payable upon the life interest, and the Legacy Duty being payable on perpetuity. speech after speech was made at railway stations during the right hon. Gentleman's famous journey Northwards, showing the iniquity of a farmer having to pay Probate Duty on his cattle and crops, while no Probate Duty was paid on the landlord's interest. How was it that a year or two later, when the right hon. Gentleman, being in command of a majority of 100 or more, again touched the Probate and Legacy Duties, he did not make the settlement he now suggested? What did he do then? Did he put the Probate Duty on land and realty? No; he did nothing of the kind. Did he make the Succession Duty payable on the capitalized value, instead of the life interest? No. All he did was to increase the Probate Duty from an average of 2 per cent to 3 per cent, and to take the extra 1 percent out of the pockets of widows; and he increased by that 1 per cent the duties payable in the case of people who were in a further degree of relationship to the testator than lineal descendants. If it was such an iniquitous thing that the present Government did not set everything right which the right hon. Gentleman thought wrong, why was it not equally iniquitous in 1881 or 1882, when the right hon. Gentleman was in Office? The words of the right hon. Gentleman's Resolution were—"Equalize the charge upon real and personal property." He supposed the right hon. Gentleman intended by the word "charge" the duties accruing upon deaths. He (Mr. Gedge) would be perfectly willing to vote for any Resolution providing for the equalization of all the charges on real and personal property. It was not real property which would suffer from that; but the right hon. Gentleman's Resolution only referred to the equalization of one particular charge, and that was a very different thing. During the dinner hour, while he was absent, possibly some hon. Member might have referred to this question; but he (Mr. Gedge) did not hear the right hon. Gentleman the Member for Mid Lothian, or the right hon. Baronet the President of the Board of Trade (Sir Michael Hicks-Beach), say a word upon the other charges, especially the charges with regard to the transfer to which the two properties were respectively liable. Let him put a case. Property was transferred from one owner to another during a man's lifetime by sale or otherwise, and at death in accordance with a will. Why should they be asked to make the duties payable to the State in the second case equal unless those paid in the first case were also made equal? There was the greatest possible difference between the two cases. Of course, he was aware that some personal property paid the same transfer tax that real property did—shares in Railway Companies, for instance. But, as they were drawing a distinction between real and personal property, let them consider what an enormous amount of personal property there was which was transferred from day to day without any tax whatever being paid to the State. Take, for example, the case of Consols. The National Debt, he was aware, was made transferable free of duty, in order that the State might borrow on the cheapest possible terms, and there was very good reason for that. But the fact that the State had borrowed the money had not prevented Probate Duty on that Stock being increased, had not prevented an increase of the Legacy Duty and the Succession Duty on that Stock. Nevertheless, there had never been Transfer Duty paid on it, and that was a very large and enormous advantage enjoyed by the holders of that kind of personal property. Take the case of valuable pictures and jewellery and plate. Such property passed freely from hand to hand by delivery, and the State gained nothing by the transaction. Take the case of two brothers, living side by side in two houses, built upon two pieces of land. When each bought his land he had to pay ½per cent duty on the consideration money. Each built his house. One of them was blessed with a large family, and found it necessary to buy some land on which to enlarge his house. What was the result? He had to pay duty on the consideration money when he purchased the additional land. As soon as he had enlarged his house in order to accommodate his increased family, the rate collector visited him and demanded additional rates. Then the Queen's Tax collector turned up and demanded an increased House Duty and Property Tax. All these things were visited upon the man because he chose to increase the accommodation for his family. His brother, who perhaps was childless, had a taste for valuable pictures, and, instead of giving £2,000 for an adjacent piece of land, gave Sir John Millais £2,000 for a picture, or bought his wife valuable jewellery. There was no duty payable to the State on the purchase. There was no extra rate or House Duty paid, and no additional Property Tax upon his increased possessions. The man was allowed to escape, because he chose to invest his money in the way described. It was only when death came that the State came in and equalized matters, and the State then, no doubt, charged Probate Duty upon the pictures and jewellery. But even then the inequality did not cease. It was true that in the case of death Probate and Legacy Duty would be payable on pictures and jewellery; but these were frequently undervalued by ignorant brokers—some man would be called in to value who did not know a Raphael from a Frith; and the result had been that valuable property to the extent of many thousands of pounds was valued for Probate and Legacy Duty at a very small sum, whereas with regard to land every figure and detail was gone through at Somerset House, and the owner could not escape the payment of a single penny. Then it was the commonest possible transaction at the present day to settle money upon the parents for life, and, after their decease, upon the children during their lives. Before the time the parents were dead new trustees were wanted; the sons generally acted as trustees, and the children quietly divided the property between them, and no Succession Duty was paid. And he would suggest to the Chancellor of the Exchequer that a copy of all settlements should be sent to the Inland Revenue Office as a means of preventing this evasion. But in the case of land the rights of the Crown never lapsed, and there was no possible way of evading the duty. If, then, the duty on personal property could be evaded, while that on real property could not be evaded, he said that this was a reason why they should not put so high a tax upon real as upon personal property. Again, it was enacted by the Parliament of 1880 that if anyone made a gift and lived for three months afterwards, that gift escaped all taxation. He said they ought as honest men and business men to take all these things into consideration when legislating with a view to taxation, and try to make it equal upon both species of property. The right hon. Gentleman had gone into elaborate figures to show that the Succession Duty on realty bore nothing like the proportion to that on personalty which it ought to bear; but he seemed to have left out of consideration the fact that real property went, for the most part, to near relations. They did not find men leaving land to strangers. If a man left anything to a stranger it was generally a legacy of money, and this applied also to the case of distant relations and to charities. It was to these that his personal property was given, and the result was that a smaller amount of taxation was got from real property than from personal property. The strangers who got personal property paid a higher rate of duty than those who inherited real property; and, therefore, he said it was not fair to contend that realty did not pay in proportion to personalty. The right hon. Gentleman, however, had omitted to take this into account in dealing with the question. The House had been told by the right hon. Gentleman that it was a very great hardship that ground rents paid no rates or taxes; but he (Mr. Gedge) pointed out that leaseholds were, in point of fact, real property, a portion carved out of the fee; and it was, therefore, incorrect to say that a great hardship was done by the ground rents paying no taxes. He would put a case. Suppose that a landowner had a piece of land worth £1,000, that a builder came to him and agreed that this was a fair value; if that money were put in the Three per Cents, the annual income would be entirely free from all rates. But if the builder said that he could not pay £1,000, but would give a rental of £30 a-year, the landlord would reply that he would accept the money provided he got that income net; that the rates would be increased by a house being built upon the land, and that whatever those rates were the builder must pay them. Suppose, then, that the landlord let the land for £30, and the builder got a lease for 999 years, what happened? If there were no rates and taxes it was evident that the landowner would get £50 instead of £30. Therefore, the rates and taxes did fall upon real property, and why, then, should the House interfere with the existing arrangements? It seemed to him that in dealing with the Death Duties they must not take them into account only and nothing else, but they must take into account all the charges upon real property. It was a sound maxim of taxation that taxes should be so levied that the greatest possible part of what was taken out of the pockets of the taxpayer should go into the national coffers. But under the existing law of real property, arising greatly from the nature of that property, the cost of paying duties upon it was much greater than in the case of personalty. He had pointed out that there was no mode of evading the taxes upon real property, and that they must be paid to the last farthing; he had pointed out that the taxes on personal property were evaded sometimes by law and sometimes by fraud, and he had also pointed out that when they selected a mode of enforcing taxation, they ought to manage it so that there should be as little expense as possible on the taxpayer. The cost to which the taxpayer was put in paying these taxes was very large in proportion to the amount of the tax which he paid. The owner must either sell his land or he must encumber it, and, as the right hon. Gentleman said in 1853, to force him to sell his estate in order to pay the duty was a cruel injustice. For these reasons, he thought the House ought to be well content with the increase in the Succession Duty made by the right hon. Gentleman the Chancellor of the Exchequer, and that they ought to reject by a large majority the unjust and unequal proposals of the right hon. Gentleman the Member for Mid Lothian.

Mr. SHAW LEFEVRE (Bradford, Central)

said, that the right hon. Baronet the President of the Board of Trade (Sir Michael Hicks-Beach) charged his right hon. Friend the Member for Mid Lothian (Mr. W. E. Gladstone) with attempting to upset the arrangement of 1853. But the right hon. Gentleman forgot that in 1885 his right hon. Friend proposed to equalize the Succession Duties in a manner which would remove all unfairness. The House should also recollect that in 1853, when his right hon. Friend proposed to put the Succession Duty upon realty he estimated that its amount would be no less than £2,000,000; but, notwithstanding the fact that realty had increased enormously in value since then, the Succession Duty had never produced more than £800,000, and thus the equality which his right hon. Friend desired to produce had not been created. The right hon. Gentleman the President of the Board of Trade appeared to base the main portion of his argument upon the supposition that realty, on which Succession Duty fell, was landed property in the ordinary sense of the term—namely, landed property subject to agricultural rates. The right hon. Gentleman admitted that there were some exceptions to this. He (Mr. Shaw Lefevre) would make this admission to the right hon. Gentleman. He thought that agricultural land at this time was entitled to great consideration, and if the Succession Duty fell only on agricultural land he would not press for an equalization of the duties at the present moment. But his contention was that a comparatively small portion of the Succession Duty fell upon agricultural land. He thought that not more than one—fourth of the Succession Duties fell upon land of that description. It was far from easy to understand the complications and difficulties of this question and the real effect of the incidence of the Succession Duty by listening to abstract arguments and general statements. He believed that his right hon. Friend the Member for Mid Lothian was under the mark when he stated that the incidence of the Succession Duty on real property was one - sixth only of the incidence of the duty on personalty, and that after the proposals of the right hon. Gentleman the Chancellor of the Exchequer (Mr. Goschen) it would be under one-third. He could illustrate this by one or two examples of what actually occurred, with the view of showing what the actual incidence was at the present moment. The following was a case which had been mentioned to him by a solicitor, and which occurred only a few weeks ago. A gentleman recently died, leaving his property equally between his two daughters. To one of them ho left a freehold house of the value of £8,000, and to the other personalty to the same amount. The first daughter paid Succession Duty, which was estimated at the Inland Revenue Office at £33 12s. while in the case of the other daughter, who had the personalty, the Probate and Legacy duties amounted to £240, a difference of nearly eight to one. There was another very interesting case which occurred six or seven years ago. One of the great London landowners died. He possessed enormous ground rent property, and it was generally estimated that the annual income of that property was £90,000. lie left it in equal shares to three of his sisters, each of whom was above 70 years of age. The leases of that property were rather short, and it was therefore generally estimated that the property was valued at £6,000,000, although the actual rental at the moment was only about £90,000 a-year. Well, he made inquiries as to what would be paid under the Succession Duty. Haying regard to the advanced age of the sisters the amount they paid between them was probably not more than £15,000. If, however, personalty of the value of £6,000,000 had been bequeathed, the total amount of the duty payable would have been £360,000. No one could say that the London ground landlords were entitled to any favour from the State in matters of this kind. He would mention one other case. The Metropolitan Board of Works desired to purchase 260 acres of land at Hackney, valued at £200,000. At present it belonged to a very old gentleman, who would probably leave it to his son. If the negotiation should fall through and the son should succeed to the property in its present condition, he would have to pay Succession Duty to the amount of £72, based on the actual rental of the property as it now is, while if the sale to the Metropolitan Board should be carried out, there would be payable on the death of the owner in question no less than £6,000 in the shape of Probate Duty. It appeared to him that these inequalities and injustices could not be for a moment defended. The right hon Gentleman the Chancellor of the Exchequer had never yet stated the total amount which he anticipated he would derive from his proposed increase in the Succession Duty. As far as he (Mr. Shaw Lefevre) could make out, it would ultimately be £348,000. If the Government were prepared to equalize the Succession Duties in the sense indicated by his right hon. Friend the Member for Mid Lothian, they would have a sum sufficient to dispense with the Horse Tax, the Wheel Tax, the Wine Duty, and the other unpopular taxes which they proposed to levy. Ho could not but think that the Government would do well to consider whether it would not be better, even now, to follow the course indicated by the Amendment. The case mentioned by the hon. Member for North Donegal (Mr. O'Doherty) was a good illustration to the unequal incidence of these Death Duties. It appeared that the tenant right of the farmer was liable both to Probate and to Succession Duty, whereas the landlord paid Succession Duty only. If it was intended to make a final adjustment of local and Imperial taxation, he hoped that this and other inequalities would be rectified.

MR. SLAGG (Burnley)

said, he wished to refer to one special point which had been raised by the speech of the right hon. Baronet the President of the Board of Trade (Sir Michael Hicks-Beach). The right hon. Baronet appeared to lay very great stress upon the sufferings which agriculture had endured of late years, and upon those sufferings he had based a special claim to the tender regard of the taxpayers for that great industry. But he (Mr. Slagg) wished to point out that agriculture had not alone been suffering of late years; on the contrary, it would be possible to show that of all industries the agricultural had really come best off, and that the depreciation which had taken place in the property of the landed classes and their profits was inconsiderable when placed in comparison with the enormous depreciation which had of late years befallen other industrial interests. He had no feeling of antipathy to the landed class; on the contrary, he quite admitted the claim which the right hon. Baronet had set up with regard to country gentlemen—namely, that they had discharged their duties exceedingly well, and that they were entitled to consideration at the hands of the community. But he said that those who were engaged in commerce, and who had so much contributed to improve the value of land, were entitled to receive equal consideration, although, in consequence of their modesty and reticence, they were likely to be overlooked. When there was agricultural suffering the cry ran through the whole land; they never heard the end of it in that House; they were told in every phase of public affairs how much depended upon that industry, and how great was the consideration that should be accorded to it; but those who were engaged in commerce and industry bore their sufferings quietly, and had to wait patiently in the hope that they would come to an end. The House might remember that, although agriculture had suffered in recent years so far as the value of the land was concerned and the price of agricultural commodities, yet still it had always gained and continued to gain through the increase and influence of other industries. It must be perfectly well known to hon. Members that in many districts where large industries had been planted, the landlords had reaped enormous harvests from the advanced value of their land, owing to the populations which had thereby been attracted. He should give one or two statistics in relation to the industry with which he was most acquainted, namely, the cotton trade in Lancashire, and he would ask the hon. Gentleman who said that the agricultural interest should receive tender treatment, whether such treatment should not also be extended to the industry to which he alluded. He would first show how those who were engaged in the staple industries of the country had been affected in respect of their profits and turnover by the legislation initiated for the benefit of the working classes, and among other things, he ventured to say, that the profits of those industries had been adversely affected to the extent of 2 per cent by legislation limiting the hours of labour. Those hon. Members who were acquainted with the cotton industry must be aware that the value of mill property had enormously decreased. By way of illustration he pointed out that a mill at Chorley which cost £200,000 was now worth only £27,000; another at Oldham which cost £142,000 was now for disposal for £30,000; a third, also at Oldham, had fallen in value from £67,000 to £28,000; and a fourth, on which £100,000 had been expended, could now be had for £30,000. This had happened in an industry which was comparatively prosperous, as the cotton trade might be said to have been. He would ask hon. Gentlemen opposite to consult the share lists and see for themselves to what extent the capital invested in industrial enterprises had fallen of late years, and he believed they would find that those who were engaged in such enterprises were entitled to far more sympathy than the agricultural classes. Many industrial concerns were built on leasehold property, and the leases were in numerous cases approaching their end, when the landlords would gain enormous accessions to the value of their lands, for the property of the tenant was vanishing, and would eventually become the property of the landlord. It was in this way that the landowners were daily gaining a considerable increment of value in their estates. He would then take the case of patents. A patent expired in 14 years; every year its value diminished, so that the person engaged in the industry to which these expensive patents were necessary was losing annually in such a manner that his loss could not possibly be recouped; and it must be remembered that persons so engaged had constantly to renew as well as to buy their patents at a large outlay. Then, again, the landed interest had a great advantage with regard to unoccupied land near towns, which had not only increased in value but had never paid any taxes. It did not appear to him, therefore, that the agricultural interest alone was entitled to their sympathy, a proper share of which he contended should be accorded to commercial enterprise, and for these reasons he should support the proposal of the right hon. Gentleman the Member for Mid Lothian.

THE MARQUESS OF HARTINGTON (Lancashire, Rossendale)

Mr. Speaker, I had at an earlier period of the evening some intention of endeavouring to offer a few observations to the House upon this question, but I can assure my right hen. Friend the Member for Mid Lothian that the notes to which he called attention in so pointed a manner were not the foundation of an attempt to make an elaborate reply to his speech, but merely an humble endeavour on my part to assist myself in following his extremely able but elaborate argument on this question. I think the House will probably agree with me that after the very strong appeals which were made to me, and to those who have lately acted with me, by my right hon. Friend—and I think I may say not only appeals, but adjurations and something approaching to menaces on account of our not voting with him—I am bound to address a few words to the House in explanation of the position which most of us take upon this question. My right hon. Friend says we are going to commit an act of great inconsistency, an act of aggravated inconsistency, because I, myself, and all the Party who acted with him were, to a certain extent, parties to the proposals in the Budget of 1885, which contained proposals similar in a great degree to those which are indicated in the Amendment which the right hon. Gentleman has moved. I am glad to find that my right hon. Friend now attaches so great a value to the virtue of consistency. I have not been able to find, either from my right hon. Friend or from any of his Colleagues, any considerable amount of support when I have appealed to them to support measures in regard to another class of questions altogether similar to, if not actually identical with, those which they had been responsible for when they were in Office. And, Sir, this observation does not apply only to questions of Irish policy, upon which so great a divergence has lately manifested itself in different sections of the Liberal Party. The other day a Resolution was brought forward upon the subject of the House of Lords, and I have been taken severely to task for the line I thought it my duty to adopt upon that question. I founded myself on that occasion upon the argument which had been addressed to the House on the very same subject by my right hon. Friend, but my right hon. Friend did not think it necessary to be present in his place to continue to support the line of argument he had adopted on a previous occasion, and the whole of his following thought it their duty to act not in consistency with the opinion which had been laid down by the right hon. Gentleman a few years ago, but in diametrical opposition to it; and, therefore, I find myself somewhat at a loss to understand why we are to be held to be so strictly bound by the principles of consistency to a particular line upon this financial question, while they appear to consider themselves on all other questions to be absolutely emancipated from any rule of conduct dependent on the course they had taken on a previous occasion. It is possible that in the few observations which I am about to address to the House I may not be able altogether to free myself from the charge of some personal inconsistency, but I maintain that it is perfectly possible for me, and still more possible for any Member of the Liberal Unionist section in this House, to vote against the Resolution without exposing ourselves to any charge of inconsistency whatever. It is one thing to be a party to or to vote in support of the financial policy of the responsible Government, and it is quite another thing to bring forward that policy in the form of an abstract Resolution, to ask for the assertion of the House to the principle of that policy, not for the purpose of bringing that policy into immediate effect, but as an engine for a political object—to vote upon such a Resolution for the purpose of displacing the Government, or to reverse a policy with which on the whole we agree, and without reference to the immediate practicability of bringing such financial policy into effect. I do not know whether the Government would consider that the passing of such a Resolution should be viewed in the light of a Vote of Want of Confidence, but at all events it must at least have the effect of displacing their whole scheme of financial policy and the scheme of Local Government which is so intimately connected with it. But even if I could agree with the whole or a great part of the arguments which have been addressed to the House by my right hon. Friend upon the financial question of the evening, I should certainly hesitate before I gave my assent to a Resolution the immediate practical effect of which would be to set aside financial proposals which on the whole have been very generally admitted to be just, fair, and beneficial proposals, and with them to set aside a great scheme of Local Government which is still more generally admitted to be the foundation of a great and salutary reform. Now, in illustration of the position which we are entitled to take up upon this occasion, let me give what appears to me to be not inappropriate. In 1874 my right hon. Friend, then Prime Minister, proposed the entire abolition of the Income Tax. He was again in Office in 1880, and brought forward Budgets in 1880, 1881, and succeeding years. Circumstances had changed, and the proposal to get rid of the Income Tax had entirely disappeared. I do not in the slightest degree blame my right hon. Friend for retaining the Income Tax under the circumstances; but I want to know what would have been the course of conduct of any politician or any body of politicians in this House who had in opposition to the financial proposals of my right hon. Friend in 1880 and 1881 brought forward an Amendment asserting the expediency of absolutely doing away with the Income Tax, and claiming the support of my right hon. Friend solely on the ground that he had in former years made the like proposal. My right hon. Friend puts upon myself and my friends the responsibility of maintaining what he describes as the gross inequalities of these charges, and of so maintaining them for an indefinite period, perhaps for ever. Why do we incur any such responsibility? The Government do not by rejecting this Resolution commit themselves to the perpetual maintenance of the inequalities of these taxes. I should be very much surprised to hear any Member of the Government assert that anomalies do not exist in the manner in which the Probate and Succession Duties are levied on personal and real property respectively; there is not the slightest doubt about that; and my right hon. Friend the Chancellor of the Exchequer, in his financial proposals, is taking a step in the direction of redressing to a certain degree those anomalies. All that the Government say, as I understand, by rejecting this Resolution is that they decline in the present year and in their present Budget to undertake the reconstruction of this great and complicated subject, the Budget containing already so many points for criticism, and the time of the session being already so fully occupied. Now my right hon. Friend (Mr. W. E. Gladstone) in his Budget of 1881 dealt to a certain extent with the question of the Probate Duty, and in bringing it forward he said—I do not profess to give the actual quotation of his words—"Although they dealt to a certain extent with the Probate Duty in that year, they did not profess to bring forward a complete plan. Any such plan ought to be proposed by the Government with plenty of elbow room, plenty of force, and plenty of unoccupied space for discussion." The reasons which he gave were that the complication of the subject was such, the largeness and nicety of the interests involved were such, that the question could not be properly considered and dealt with by Parliament unless a liberal allowance of time was at the disposal of Parliament. I maintain, therefore, that the rejection of this Motion does not prevent any future Government, or even the present Government from dealing at a suitable time, and when it has sufficient elbow room and sufficient space for discussion at its disposal, with the inequalities which have been described by my right hon. Friend as existing in these taxes, or with any lesser inequalities which may be proved or admitted to exist. So far as I am concerned, therefore, and still more so far as those who act with me are concerned, I think I may say that we are perfectly unmoved by the charge which has been brought against us this evening, and that it is open to the Liberal Unionists to vote with perfect confidence against this Resolution, without in the slightest degree precluding themselves from advocating on any future occasion such changes in the incidence of the Death Duties as may be proved upon perfect inquiry to be desirable. Before a further examination of this subject I am not prepared to assert that the changes which were proposed in the Budget of 1885, to the extent to which they went, were changes which were altogether just and politic. My right hon Friend the Member for Mid Lothian will remember just as well as I do the circumstances in which that Budget was proposed. It was a question of providing fresh taxation, of increasing the Income Tax, of raising in some sort or another additional funds for the Public Service. But that was a very different position from the one in which we now find ourselves, when the Government have to dispose of a surplus, and when the time seems less appropriate for imposing new and very heavy taxation upon any class of property whatever. My right hon. Friend must remember the difficulties of every kind in which the Government were placed at the time to which I have referred. I do not think absolute unanimity prevailed among us upon the question of that Budget—I do not say in reference to this particular point, but in reference to the financial proposals of that year, when we were surrounded by difficulties of every kind in every quarter of the globe; and for myself, although I admit I am responsible and that my right hon. Friend is justified in holding me absolutely responsible for every detail of that Budget, yet it must be within his knowledge that my time, my attention, my thoughts were entirely absorbed by the very onerous duties in which I was engaged. I do not shrink from making the confession that it was absolutely impossible for me to pay that attention which no doubt ought to be always paid to the details of the financial proposals of that year. I have no hesitation in saying that, absorbed as I was in the difficulties in which we were engaged at that time in Egypt and the Soudan, I placed my financial conscience absolutely in the hands of my right hon. Friend; I regret that it is not in my power now to place my financial or any other conscience so absolutely at the disposal of my right hon. Friend. The circumstances which have caused that change are not, I think, altogether of my own creation. I do not deny that my right hon. Friend is perfectly justified as regards myself personally in making what advantage he thinks fit of what appears to have been a somewhat imprudent act on my part. Well, Sir, I will endeavour, as shortly as I can, to point out where I am not entirely able to follow the present policy of my right hon. Friend, and where I think he may have gone somewhat too far in the policy to which I was a party in 1885. I cannot go into the detailed figures of this question. It is not, I think, necessary for me to do so. I do not profess to any intimate acquaintance with or expertness in the manipulation of such intricate figures as are involved in this subject. I think my right hon. Friend the President of the Board of Trade in his reply to my right hon. Friend showed that to a certain extent my right hon. Friend had exaggerated the disparity of these duties as between personal and real property, and I think he showed that he had understated to a very considerable extent the burdens which fall upon real property, irrespective of those entailed by the Death Duties, and, above all, I think he showed that my right hon. Friend had somewhat misled the House in describing the wrongs of personal property in comparison with the position of land rather than in comparison with the position of what he described as invisible property. I understood the great part of the argument of my right hon. Friend to be this—and it is a perfectly intelligible and fair argument—that now was the special time at which these inequalities ought to be redressed. He said, as I understood him, that the Government were engaged in re-adjusting the burdens of local taxation upon real or visible rateable property and personal property which is not rated, and he argued that this should be done completely, and that real and personal rateable property should bear precisely the same amount of public burdens. That appears to me an argument which has great weight; but it appears to me to bear the character of a counsel of perfection which is not entirely within the reach of the present or of any possible Government. I do not believe it possible for any Government to achieve such a complete re-adjustment of local burdens as to accomplish the absolute equality of which my right hon. Friend speaks. It is not possible for any Government to redress the inequality in local taxation further than it is in their power to do with the surplus at their command, or by imposing such taxation as can reasonably be borne by the remaining portion. The Government have succeeded to this extent; they have been compelled to supplement the surplus at their disposal by such taxes as the Wheel and Van Taxes, which are likely, as far as we can see, to make demands on the patience of such portion of the people as have to bear them. In these circumstances, we have no right to bind the Government to a position of perfect equality. I think we ought rather to look at their proposals from the point of view that they have done what they could with the means at their disposal, without being able to succeed, or professing to succeed, in establishing a complete, and I believe impossible, equality. I do not now intend to go into the question of what is the absolute amount of relief to which rateable property is entitled. My view is this—I fully admit that portions of the rates which are paid by real property, such as the poor-rate, are a hereditary burden on the land from which land has no right to be exempted. I admit, further, that a great portion of the rates which have been imposed in recent years have been municipal rates, which have had the effect of giving an improved value to property where those rates have been expended, and do not partake precisely of the character of taxation. But, at the same time, a large proportion of the additional rates which have been imposed of recent years, such as the school rate entirely, and sanitary rates to a great extent, have been imposed for services and public uses which are not the interest, and ought not to be the special care, of any class of the community, but which are, and ought to be, equally the interest of the community at large. The additional duty now imposed upon the ratepayers of the country amounts, as was pointed out the other night by my right hon. Friend the Member for Wolverhampton (Mr. Henry H. Fowler, to one-ninth of the existing local taxation, and is an adequate contribution to the increased extent of public services which have been recently and rightly incurred almost entirely at the cost of the ratepayers. Now, I am not saying that, though the Government have not been able to effect that complete re-adjustment which my right hon. Friend thinks ought to be made, what they have done is so inadequate that there is any cause for reopening the question at au early date; all I contend is that, although it is not so theoretically perfect as my right hon. Friend desires, it is not so inadequate as to warrant placing fresh burdens on the land at the present moment. The right hon. Gentleman has framed his Resolution in very sweeping terms. I do not believe that it is possible by any proposal to be brought forward for the consideration of this House completely to equalize the pressure of local taxation on land and on every description of rateable property, such as the capital invested in trade or industries liable to rates, and for this reason, that the larger proportion of the capital employed in farming consists of the value of the land which is tilled, every acre of which is marked for local taxation up to its own value more than can be the case in any other industry. No doubt you rate a millowner or an iron manufacturer on the land and buildings which he uses in his industry; you endeavour, no doubt, to estimate the value of his business, and to rate him in some degree in proportion; but I maintain that it is not possible to rate a manufacturer or a millowner, or other industrial employer, in the same way as an owner or occupier engaged in agriculture. Therefore, I believe that whatever re-adjustment may be made, it will be impossible for the land to escape from a larger share of taxation than that imposed on any other kind of rateable property in aid of local burdens. In considering these questions it is not possible to disregard the fact that the condition of the landed interest is worse than it was in 1853, when my right hon. Friend made the proposals which are the foundation of our present system. My right hon. Friend then pointed out that the net income was always much less than the gross income, and also that in heavily encumbered estates the margin was extremely small, and therefore the tax would bear with extreme severity upon landowners in such cases. My right hon. Friend on that occasion disclaimed altogether the intention, by means of taxation, of forcing land into the market and displacing the present owner. No doubt, since 1853 there has grown up an opinion that it is desirable that there should be a much greater distribution of land. But the point is that, in the first place, my right hon. Friend can hardly have changed his opinion which he so forcibly expressed at that time—that it would be extremely unjust and impolitic by means of a tax to force land into the market in circumstances such as he described. Such a measure as this, if it has the effect of forcing a great quantity of land into the market, will only very partially meet the views of land reformers. No doubt, it will meet their views in so far as it will lead to the compulsory sale of a considerable quantity of land, but it would not do anything to make the acquisition of that land more desirable to the small capitalist. Landed property, in whatever circumstances it may be held, is almost certainly sooner or later to become more or less encumbered, and there will always be inducements to raise money on real property. I want the land reformers to consider whether, if you adopt those proposals which are now advocated by my right hon. Friend, if you impose upon the succession of land a tax, as in the case where an estate is encumbered, you will, as was shown by my right hon. Friend in 1853, inevitably cause the alienation of that property. I want to know whether by that process you will afford to any capitalist, small or great, any inducement to acquire land, and whether you are holding out to him any inducement whatever to improve land? These are some of the reasons why I am not able to give a complete assent to the principle laid down by my right lion. Friend in this Resolution; but I acknowledge that the general considerations which apply to it weigh with me still more strongly. My right hon. Friend pointed out, I think upon two occasions, with considerable satisfaction, that this Resolution differs altogether from the ordinary hostile Resolution which is moved against the Budget of the Government. This Resolution is one not to withhold Supplies from the Government; it is a Resolution, on the other hand, rather for the purpose of pouring additional treasure into their coffers. But this treasure is to be poured into the Exchequer at the cost of prin- ciples which they are not prepared to accept; and therefore the Resolution, if passed, means that this additional treasure is to be poured into the Exchequer at the cost of the total reconstruction of their financial proposals for the year, and with it to cause the abandonment of the Local Government measure they have brought forward, Now, Sir, I admit that I am absolutely unable, for the purpose of supporting an assertion of a principle which, as I have indicated, in my opinion goes somewhat too far, to be a party to dealing a blow at a combination of measures which I believe are calculated to effect great and salutary reforms, and to redress grievances which have long been acknowledged, and which up to the present time no serious attempt has been made to redress.

MR. CHILDERS (Edinburgh, S.)

I have no intention of addressing the House at any great length, or to do more than place before it, in a very few sentences, what appear to me to be the weak points in the answers which have been made to my right hon. Friend the Member for Mid Lothian (Mr. W. E. Gladstone), and to fill up one or two blanks in the statement which has been placed before the House. The House will, therefore, forgive me if I pass by a good many of the statements on some matters which have been made by hon. Members in enlarging upon the principles they have put forward, while I confine myself strictly to those arguments which, I think, require refutation. But, first, as to the speech of my noble Friend the Member for the Rossendale Division of Lancashire (the Marquess of Hartington), who will excuse me for saying that the beginning of his speech and much of his subsequent argument was nothing but an elaborate tu quoque. He seems to think that in many of his statements he had done enough, in reference to the argument which my right hon. Friend addressed to him and others as to former votes and former policy on this subject, if he said that some of us who sit near him and my right hon. Friend had in past days voted in favour of or against certain proposals on totally different questions, and had now turned in a direction different from that which we then took. I do not think a tu quoque argument, with respect to general policy, is an answer to the statement of my right hon. Friend, and when I come to examine somewhat more minutely my noble Friend's speech, I think the House will agree that his tu quoque is of very little weight indeed. For my noble Friend began his speech with a statement which I can only characterize as a most extravagant one, as proceeding from him, and intended to be an answer to my right hon. Friend. He said that the Motion of my right hon. Friend, if adopted, would set aside the Budget and the Local Government Scheme altogether. I dispute that entirely. What would be the effect of the Motion of my right hon. Friend? In the Budget my right hon. Friend proposes to derive £60,000 from the change in the Succession Duties; but my right hon. Friend has shown clearly to the House that, instead of the £60,000 appearing in the present Budget, there might be £200,000 derived from the enlarged Succession Duties, and I ask if the additional sum of £140,000 is of such enormous importance as to set aside not only the Budget, but the Government Scheme of Local Government as well, the contributions to which will not be touched to the extent of one farthing if this Motion is agreed to? The statement appears to me extravagant, and it is one which I hardly expected from my noble Friend. My noble Friend then gave an illustration of what would be thought of the proposal in 1880 to abolish the Income Tax, because my right hon. Friend, in 1874, thought that the time had come for its abolition. Why, Sir, a proposal in 1880 to abolish the Income Tax would have been an impossibility. What did the Government do which in 1874 succeeded that of my right hon. Friend? They found a surplus of £6,000,000, and the whole of that sum might have been applied to the abolition of the Income Tax, and if that surplus had been so applied there would have been a tolerable surplus left which would probably have increased in the following year. The operation, whether right or wrong, of abolishing the Income Tax in 1874, was not only within the scope of practical politics, but it was one of two or three alternatives for the absorption of the surplus of £6,000,000. But in 1880 we had no surplus. The account for that year, as we received it from our Predecessors, if I remember rightly, showed a tendency in the other direction, and a proposal to abolish the Income Tax then would have been nothing short of madness. So that for the noble Lord to refer to this as an answer to the comparison of my right hon. Friend certainly struck me with surprise. But my noble Friend went further, because he seemed to think that it was in his power to anticipate what would be the course of the Government if we took the advice of my right hon. Friend on this Motion, He said that the right hon. Gentleman the Chancellor of the Exchequer (Mr. Goschen) had taken a step towards redressing the anomalies of the Death Duties, and he alluded to what the Government might do if they had more elbow room than they had at present. He argued from that, that he could perfectly well vote against my right hon. Friend's proposal now and vote for it on a future occasion. Sir, it is not in my noble Friend's power to prophecy what the policy of the Government will be in future years, and, more than that, the right hon. Gentleman the Chancellor of the Exchequer has told us very plainly that the present plan is to be taken as a whole, and that, without entirely altering his financial scheme, it was not in his power to change what he proposed to do with reference to the Death Duties. It is, therefore, impossible for anyone to salve his conscience, so to speak, by saying that he is going to vote against the Motion now and going it hereafter, because we have the statement of the Government that their plan is one which must be treated as a whole, and that they are not prepared to alter it. But my noble Friend wound up this part of his address with the statement as to what took place in 1885, which I confess I was astonished to hear from him. If there was one thing which Ministers are silent about in Office, and subsequently in opposition, it is as to whether or not there has been any difference of opinion in the Cabinet, and what those differences of opinion may have been. But if I correctly understand my noble Friend, he justified himself for the line he is about to take by the admission that he was so absorbed in the business at the War Office in 1885 that he could not give all the attention he could have wished to the questions of taxation which came before the Cabinet in that year, and that he doubted whether the changes proposed to be made in 1885 were altogether wise. Such a statement as that, I think, has never before been made by a Member of a former Government. If there is one thing upon which all Members of Cabinets are agreed, it is that there should be no disclosure of any differences of opinion, great or small, without the Queen's leave, and it is impossible to appeal afterwards in justification of one's own conduct to such differences of opinion without taking a line—common enough in some countries, France and America for instance, but unknown here—which I regret that my noble Friend has found it necessary to follow.

THE MARQUESS OF HARTINGTON

I am very sorry that the right hon. Gentleman has misunderstood me. I did not assert that there was any difference of opinion on this question. If I referred to difference of opinion at all, it was only in one sense—namely, the circumstances of great difficulty in which the Government were placed. But I certainly did not shelter myself behind the fact that there was any difference of opinion in the Cabinet on this question; and I am not prepared to say that that was the case.

MR. CHILDERS

I think the House will be very glad to hear that from my noble Friend. But I did understand him to say that certain acts were taken which were not altogether wise in regard to this particular question, and any of us who heard my noble Friend would, I think, assume that he meant what I have mentiond. However, I have no reason to doubt the statement of my noble Friend. I should also like to say a few words with reference to the speech of the right hon. Gentleman the President of the Board of Trade (Sir Michael Hicks-Beach) earlier in the evening, and before I do so let me quote an expression used by him in the Debate on the Motion of Censure which the right hon. Gentleman moved on the Budget of that year. The House will recollect that the ground of censure was twofold; one part had reference to the duty on wine, the other to the equalization of Death Duties on real property, and it was particularly with reference to the latter that the right hon. Gentleman spoke. The right hon. Gentleman used these words, which, I think, ought to be remembered in connection with his opposition to the present Motion— Equalize the taxation on these two classes of property by all means, if you like, but equalize it completely; and remember, above all, that the whole of the taxation borne by real property, as distinguished from personal property, is very far from being included in the Budget."—(3 Hansard, [298] 1431.) Now that is exactly what my right hon. Friend says in this Motion. He says that the principle of equalization is not in this Budget, and he says also that we should be careful that the charge on land and personal property is equalized, so that the whole system may be in harmony. That was the meaning of his speech, and the same language was in his speech in 1875, and you cannot resist the conclusions to which they lead. Now, the right hon. Gentleman the Chancellor of the Exchequer is acting upon the latter part of his Colleague's advice, and therefore we are entitled to say, following that advice, that the two things must run together. If you only carry out a mutilated change you will not be obeying the canon laid down by the right hon. Gentleman, and you will have to come to Parliament hereafter with some proposal for further relief on one side and equalization on the other, and that, indeed, is what the right hon. Gentleman has said. Is this a conclusive solution? Yes, says the right hon. Gentleman the Chancellor of the Exchequer; it is intended to be a final settlement. But the right hon. Gentleman the President of the Board of Trade says to-night— Inequality between the entire charges on land and other property is not removed by the measure we are now submitting, but it remains as it was in 1853. That is to say we have for 35 years endeavoured to settle this question. Parliament has passed certain Resolutions requiring that the Government shall discover a measure under which the charges on real estate for local bodies should be made less onerous, and that in some form or other they should receive contributions from Government, and now, when the right hon. Gentleman the Chancellor of the Exchequer has told us that he has done that, the right hon. Gentleman the President of the Board of Trade says that the inequality of charge will not be removed by the measure now submitted to the House, but that it remains as it was before my right hon. Friend the Member for Mid Lothian introduced in 1853 the Succession Duty. But the right hon. Gentleman referred to other matters. In the first place, he said that the right hon. Gentleman the Member for Mid Lothian did not propose to remedy the injustice on personal property, and he proceeded to state that the Budget of 1885 proposed to inflict injustice on realty. Therefore, personal property was left unredressed to the extent of the inequality of these charges. What has been for the last 20 or 30 years the cry which a number of hon. Gentlemen on the opposite side of the House have raised and expressed by the appointment of Committees and the proposal of Resolutions? That real property was over-charged. But, on the other hand, invisible personal property has escaped too much. Accordingly, the idea always brought before Parliament has been that the Income Tax was an instrument by which personal property was heavily charged, and that it was even desirable to redress this inequality by altering the incidence of Schedule D, and in that way to place the three descriptions of property on a proper footing. If Schedule D has really been an instrument by which these three classes of property has had to bear an excessive amount of charge, surely it is not right to say that the imposition of the higher rate of Succession Duty is at all an injustice now. The fact is that what we proposed in 1885, and what is renewed in the present Motion, does put those three classes of property—visible personalty, other personalty, and real property—upon a fair footing, and until that is done you will have placed the charge upon personal property, partly through the working of the law and partly through the Income Tax, on an excessive scale as compared with real property; and therefore, in order to redress the inequality with reference to both classes of personal property, the present proposal of my right hon. Friend is necessary. The right hon. Gentleman the President of the Board of Trade then went into and discussed the figures of my right hon. Friend. I certainly shall not repeat those figures. My right hon. Friend said that, excluding the amount of charge on personal property which went under the Probate Duty arrangements to the Local Authorities, the re- venue the Chancellor of the Exchequer would receive was at about three and a third times the same rate as would be received from real property, and six times as much if you included the amount going to Local Authorities. To what extent did the President of the Board of Trade modify that? He only altered the proportion from 3⅓ to 2¾4; he said besides the excessive assessment to Income Tax to which real property was liable, it paid a Land Tax of rather more than £1,000,000, and that if it was true that personalty was unequally charged in respect of Succession Duties, this amount must be set against such inequality. But, Sir, the Land Tax is known to be no tax at all; it is a mortgage which has been inherited from remote times by certain classes of real property, and not by the great mass of that property, and it cannot in any sense be called a tax, and I do not remember that any Minister or Chancellor of the Exchequer ever called it a tax. My right hon. Friend did not do so, when he very carefully elaborated his statement of the taxes which are placed on land. So that this charge in the sense in which the right hon. Gentleman referred to it—namely, as a tax—does not exist, and the fact remains, according to the admission of the Government, that personalty pays an excess of something like £2,000,000 a-year as compared with realty. It has been said that if land and personalty paid the same rate of Death Duty, it would be impossible to avoid very often the sale of parts of the estates as the undue sale of estates when they passed by death from one person to another. It is possible that the fact of imposing any tax may lead to some estates being sold, but is that any justification for giving them the advantage, the large advantage of a discriminating tax. Under the present law Death Duties upon real property, so far as Succession Duty was concerned, were paid in instalments. The instalments were spread over four years, and the value of that payment by instalments was reckoned by the Inland Revenue Department as being something like 11 per cent on the whole amount. All that it was necessary to do if you wanted to adjust the matter mathematically was to add 11 per cent to the tax, and allow it to be distributed over the year, and then you will have no reason for the compulsory sale of estates for the immediate payment of Succession Duty. Let me in one word come down from this general argument to the practical case before the House. My right hon. Friend the Member for Central Bradford (Mr. Shaw Lefevre) gave one or two illustrations when the House was much thinner than it is now, and I will give only one, but it is one which, I think, hon. Members will do well to remember. Suppose that anyone inherits personal property, say, in the shape of Consols or other securities of the value of £10,000. What does he pay if he inherits them from his father, I mean? He will pay £300 for that £10,000. Supposing that he inherits land, the net value of which, after making all allowances, not the fancy value, is £10,000, how much will he have to pay? He will have to pay for the amount £70 10s., including the additional ½ per cent, spread over eight instalments as my right hon. Friend proposes, the discount for present value being about the same as it is under the present law. How much then would be paid after allowing for the additional 10s. which the Bill proposes? Why £63. It is that inequality between £300 and £63 which it is absolutely necessary in our judgment should be redressed, and redressed as speedily as possible. I have now fulfilled my promise of only speaking for a few minutes, and speaking only on questions which have been definitely brought forward, and as to which I thought it necessary that some reply should be made. I certainly hope the House will adopt the Resolution of my right hon. Friend the Member for Mid Lothian.

THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN) (St. George's, Hanover Square)

I quite feel the difficulty which was felt by the right hon. Gentleman who has just sat down, that to deliver a speech at this late hour upon a very statistical and complicated subject is not a duty which has much charm about it. But I would entreat hon. Members on both sides of the House, and particularly those on this side, to give me a patient hearing, because we have not only to deal with the vote that will be given this evening, but with the fact that the right hon. Member for Mid Lothian has made a speech which will be circulated through Liberal agencies in every part of the country. [Opposition cheers.] Yes, circulated without the answers that have been and will be made to it. The right hon. Gentleman challenged us to answer, not with generalties, but with facts and figures. I am prepared to answer with facts and figures; but the misfortune in this case is that our answer may not reach the same persons to whom the eloquent appeal of the right hon. Gentleman was made. My right hon. Friend spoke quite in the tone of a man who has rendered such immense financial services to the country, and he preserved his financial tone until he came to his last sentences. Then, if I may say so, he broke out in his later manner, and made an appeal to the masses, an appeal, however, which will have no effect, if the answer which we give reaches the people to whom that appeal is made. It is, therefore, important that the speech of the right hon. Gentleman should be fully answered. My right hon. Friend the Member for Edinburgh (Mr. Childers) who has just sat down said that millions were rather confusing, and that he would therefore bring the matter to the practical test of an individual case. I admit that millions are extremely confusing when they are treated with that conjectural power exercised by my right hon. Friend the Member for Mid Lothian. He threw his millions about and seemed to revel in them, but he afterwards said that he must admit that they were only founded on conjecture. The right hon. Member for Edinburgh said that he would give us an individual instance, and he gave us an exceptional and extraordinary instance totally different from the general and average case, and wishes us to found our judgment upon that. I trust that the House will refuse either to be convinced by the exceptional instance quoted by my right hon. Friend or to be confused by the millions of the right hon. Member for Mid Lothian. The right hon. Member for Mid Lothian spoke of the few remarks that had been made by the President of the Board of Trade. Well, those few remarks contained a convincing argument against the figures of the right hon. Member for Mid Lothian. The right hon. Member for Edinburgh could not pull the figures of the President of the Board of Trade to pieces, and so he said that he would not follow him; but neither did he follow my right hon. Friend in the close reasoning by which he proved that real property pays an increased proportion to Imperial taxation, notwithstanding what it still bears in respect of local taxation. The right hon. Member for Edinburgh says he has never known the Land Tax to be included as taxation by previous Chancellors of the Exchequer. Evidently he has not read the older speeches of his Leader, the right hon. Member for Mid Lothian. I have read them, and I have seen that, in arguing upon this very Succession Duty, the right hon. Member for Mid Lothian himself has described the Land Tax as taxation. Therefore, I do not think that it lies in the mouth of the right hon. Member for Edinburgh to demur to my inclusion of the Land Tax. Why should it not be included? Because it is a past burden—

MR. CHILDERS

I said because it is a mortgage, and paid only by a small amount of property.

MR. GOSCHEN

And why by a small amount of property only? Because a large amount of property has already exonerated itself, bearing, however, the interest upon the money which it raised to pay off the tax. We have to look at these matters as a whole. My right hon. Friend is perfectly right in saying that we have to look both to the Imperial taxation and the local taxation; but I wish to remind the House that no answer has been given by any speaker in explanation of the inequalities in Imperial taxation which have been pointed out by the President of the Board of Trade. There was an historical inaccuracy in the opening phrases of the right hon. Member for Mid Lothian in moving this Resolution. He said—"The inequality in favour of realty is what has only been tolerated on the ground of contribution to the rates." That is not historically right. It has been one of the great reasons why it has been thought that real property need not contribute equally to the Death Duties; but it has only been one out of many reasons, another being that realty pays so much more to the Income Tax. The right hon. Member for Mid Lothian pointed out that the Income Tax paid by land is 9d. in the pound, when the Income Tax paid upon other property is 7d. That makes the considerable difference of 1 per cent upon the Income Tax for every year. Accordingly, a landed property will pay 1 per cent more on its income over 14 years than personal property. It is all very well for you to say that you desire equality; but I think the right hon. Member for Mid Lothian, his Friends, and the public will see that if you are going to equalize the Death Duties you should also deal with other inequalities under which real property has suffered, and abolish the system which charges Income Tax on real property, not on the net income, as in regard to other kinds of property, but on the gross income. It would not be fair to merely carry out the equalization which the right hon. Gentleman now proposes, unless, at the same time, he remedies the inequality under which real property suffers in the matter of Income Tax. It is worthy of notice that the present occasion, when we are asked to equalize the Death Duties, is an occasion when a step is being taken in that direction, and, as has been pointed out by the noble Lord the Member for Rossendale (the Marquess of Hartington), though the right hon. Gentleman has been many years in Office, yet is only now—with the solitary exception of 1885—when we are making an actual movement in the direction of equalization, that he has attempted to remedy what he now calls a monstrous injustice, which is to be held up to the masses in order to stimulate them, and so make them believe that landed property is bearing much too little burden. We have chosen this time to make a movement in the direction of equalization, because now real property is being relieved to some extent of some of the burdens it has hitherto had to bear. We are making a contribution to rates in relief of real property. The right hon. Gentleman referred to the speech which I made in introducing the Budget, and said that our proposals must be taken as a whole. That is quite true. But our proposals do not involve an absolute equalization of the Death Duties, but only a step towards equalization such as we propose to take. If the Death Duties were equalized, then we should have to make further concessions in the direction of local taxation. Our position in this matter is based on the situation as a whole. Let me refer for a moment to the method pursued by the right hon. Gentleman of piling on the millions in his account of the value of landed property as compared with personalty. It is acknowledged that the statistics are very difficult to establish; but, whatever figure is fixed upon, it must be borne in mind that the rateable value of realty does not represent the clear value of the property of the landed class. You must deduct from that mortgages, annuities, and other charges placed on land. It is not fair to put the matter before the public as it has been put by the right hon. Gentleman. You must not only look at the total rateable value of the land, but at the real value of the land to the person who has to pay the Succession Duty. I would not attach an exaggerated importance to these aggregate statistics, and I understand that the right hon. Gentleman the Member for Edinburgh does not wish to rely on them. However, I shall follow the right hon. Gentleman the Member for Mid Lothian in the figures he has laid before the House. In taking the sums paid under Schedule A and under Schedule B, the right hon. Gentleman made three mistakes. He made, first of all, a mistake of £8,000,000, which, however, he himself retracted. Another mistake he made was stating that one-third of the Succession Duty was paid by settled property. The right hon. Gentleman is not now present, but his Colleagues and the House will remember that he said one-third of the Succession Duty was paid by settled property. That is not so. The books of the Inland Revenue show that only one-fifth, and not one-third, is paid by settled property. This is not a matter of argument, but of fact. The third mistake that he made was one of £420,000, due to his calculating that Legacy Duty paid on annuities chargeable on realty was paid by personalty instead of by realty. He has omitted to give realty credit under this head, and he has charged too much to personalty. The consequence is that the elaborate superstructure which he has raised, based on these three fallacies, falls to the ground, with the exposure of the fallacies themselves. Now I will refer again to the figures used by my right hon. Friend the President of the Board of Trade, which proved conclusively that if you add the Land Tax to the additional Income Tax which has been paid by realty as compared with personalty, on account of its paying upon the gross instead of the net income, you find that realty really contributes as much to Imperial taxation as personal property does, and that the inequality in favour of realty which the right hon. Member for Mid Lothian says exists does not, in fact, exist at all. Now I come to the point raised by the right hon. Gentleman who has just sat down, and to the figures by which he sought to prove the existence of that inequality of three to one, but which as he stated them were really incorrect. We contest the accuracy of those figures by taking average individual instances, not such as were taken by the right hon. Member for Bradford (Mr. Shaw Lefevre) and by the right hon. Member for Edinburgh, who chose out certain special instances in order to show that injustices can occur—as no doubt they can and do occur, but which require to be carefully examined—but ordinary cases. If the ordinary cases are carefully examined it will be found that the only difference between the Death Tax as paid by personalty, as compared with that paid by realty after the duties have been put upon the same scale, is that under the Government proposal in the one case it is paid upon the life interest and in the other upon the whole interest. I quite admit that there is the further difference of discount. The right hon. Member for Mid Lothian wishes to make out that the Succession Duty paid is less than one-half. But what are the facts? The ordinary average is 13½ years, and if you take 25 years' purchase—and no one will say that landed property is worth more than 25 years' purchase—the only advantage which is gained now is that they pay upon 13½ years instead of upon 25 years. You must take into consideration that, during the whole period between one succession and another, succession really is paying Income Tax at a higher rate, and that must be taken into account as tending to equalise the difference which otherwise would exist. In calculating the difference of these Death Taxes we must not forget the difference in the relief that will be afforded to the two classes of property. The right hon. Gentleman opposite in arguing this point has fallen into a fallacy which was avoided by the right hon. Member for Mid Lothian, and I am glad that he has afforded me an opportunity of showing how little yet of the effect of the Government proposal has sunk into his mind. We must also remember that realty has for the last 13 or more years paid a higher rate of Income Tax, and taking all these calculations together, we shall find that the total difference between the two death rates is not three to one, or even two to one, but is as four to three. The right hon. Member for Mid Lothian said a great deal—I do not say that he said too much—about the injustice, which he said would still remain as between visible rateable personalty and invisible rateable property. I do not understand from the right hon. Gentleman who preceded me that those injustices would be rectified by the proposals which he made. The difficulty of dealing with this particular kind of personalty is that it is treated as personalty for the purposes of the Death Duties and as realty for rating purposes. No doubt grievances in reference to this matter do exist, and, indeed, it was acknowledged by my right hon. Friend the President of the Board of Trade that they did exist and ought to be looked into. But to do this at the present moment would involve a reconsideration of many other anomalies which still exist in our financial system. But, as was pointed out by my right hon. Friend the noble Lord the Member for Rossendale, it would be impossible in a measure of the magnitude and complexity of that now before the House to have introduced a proposal that in itself would be sufficient to tax the energies of the House of Commons for a whole Session. We therefore do not think that we ought to have included in this measure a proposal for the rectification of many of the fiscal anomalies which we fully admit to exist. There was another point on which the right hon. Gentleman dwelt with considerable force. He asked us to whom would go that large relief of £4,000,000 which we propose to give to local taxation, and he made some ingenious analyses, conjectures and hypotheses as to the proportion that would go into the pockets of the landlords and the proportion that would go into the pockets of the occupier. He proceeded with an interesting but to my mind entirely fallacious calculation to analyze the effect of the increase of the rates upon urban sanitary districts, upon rural sanitary districts, and upon urban rural sanitary districts, and to place figures before the House. But he omitted to notice this—that the incidence of rates and of the increase of rates in a rural community is an infinitely more serious thing and weighs much more heavily on the income and industry of a rural community than does their incidence in a town. This matter cannot be made too clear. If you say, for instance, that the rates of the country have only increased 3d. or 6d., and the rates of the town have increased 3s., what does it mean? Why, every 1d. of increased rate on a farm means 2d. on the income of the farmer, because the rate is assumed to be twice the income of the farmer, therefore an increase of 1d. means an increase of 2d. on the income of the farmer. On the other hand, if you have an increase of 1d. on the house of a dweller in a town that means only one-eighth of a penny on his income. In other words an increase of 1d. in the rates weighs 16 times more heavily on the farmer than on the ordinary inhabitant of a town. That would, perhaps, not hold good on trade premises where a greater proportion of the business of a man is liable to rates, but it applies to a very large amount of the rates levied in towns, and again, it is levied upon what you may call the whole industry of a rural community, and though it is true, perhaps, that there is but a slighter increase of rates on agricultural districts, the actual increase falls as Income Tax infinitely more heavily on the rural population than on the urban population. We must look at it in this light. If the increase of rates we are endeavouring to remedy to a certain extent by our proposals has not been so great on paper in rural districts as in towns, nevertheless, owing to the circumstances that it is levied on the whole area of income in which it is levied, it is a heavier burden to the rural districts. Then the right hon. Gentleman took the aggregate amount we are going to distribute, and distributed it, not according to any calculation as to who would get it, but by some arbitrary method of his own, looking to the fact of what was visible personalty and what was real rateable property. We wish to distribute this amount, not according to any theoretical view of that kind, but upon certain data known to the House; and to lay down now that the greater portion of this sum is going into the pockets of the landlords is really a monstrous assertion, and an assertion which does not hold water for a moment. But the right hon. Gentleman was really very moderate when he told us that half of this relief is going into the pockets of the landlords, because I have already seen that many of his more enthusiastic supporters have been telling the country that the whole was going straight into the pockets of the landlords, and that these local taxation proposals of ours, which we have brought forward to give the ratepayers that relief which the House has decided ought to be given, are proposals to give relief to the landlord party, that it is a landlord's Budget, and that the relief will go straight into the pockets of the landlords. The right hon. Gentleman himself admits that only half will go into the landlord's pockets. But how did he prove that? He put before the House, in an ingenious and amusing manner, a special case, and said that if in that special case it was shown that the landlord would derive benefit from the reduction of the rates, we might argue that the whole of that portion would go into the pockets of the landlords. But the right hon. Gentleman forgot that there were such things as leases still existing, and that there are many arrangements where no change takes place. He must know himself that there is not going to be at once a thorough re-arrangement of rents by which the landlords will pocket this relief to the ratepayers which we at last have given after this long lapse of years. I protest most strongly against the view that this is a landlords' proposal we are making. I think it is unworthy of the right hon. Gentleman, after he has with great calmness and courtesy put his view before the House, that he should take this line of trying to point out, not to the propertied class, but to the masess, that the land is not paying its share, and that he should make a bitter personal attack upon the Unionist Party in order that they may be gibbeted by him before the constituents as the friends of the landlord, and therefore unmindful of the interest of the community at large. Mr. Speaker, I wish to place this before the House—that the figures of the right hon. Gentleman do not hold water; that those figures, when he divides properties into two great portions, are misleading if not actually incorrect, and are not analyzed as they ought to have been. I submit that, even if that were so, an analysis of totals would give no final and satisfactory results. I submit that if you take individual cases, if you take the ordinary averages at first sight, it will appear that through life interests the owner of realty will be paying one-half; but when you reduce that by Income Tax, when you reduce that by the Land Tax, the inequality is wiped out, and the land pays its full share of Imperial taxation. I add to that the fact that the local burdens have been so adjusted as to take into account not only what real property will continue to pay to local taxation, but it has taken this present attitude of the Government, as regards the Death Duties, into consideration. The right hon. Gentleman who has just sat down said, that he could not reconcile my statement that we had finally done all that could be done, with that of the President of the Board of Trade, that an inequality would still remain. We have not contended that there will not still be inequality. Of course there will still be inequality; of course real estate will continue to pay infinitely more than personalty to local taxation. The inequality exists, and the question is whether it ought to be remedied. After we have given £5,000,000 towards rateable property, real estate will still bear an enormous proportion of the local taxation of the country. The inequality still exists, and it exists, as has been frankly pointed out, because it is a portion of the hereditary burdens upon land. It is an inequality we do not seek to remedy so far as the hereditary burdens of the land are concerned. Even after what we have done, the inequality still remains in the Death Duties, and real estate will contribute enormously to the rates of the country beyond what is paid or will ever be paid by personal property, by labour, or by any form of wealth in the country. We have endeavoured to remedy certain inequalities so far as we thought they ought to be remedied; but so far as the Government is concerned, we show our whole hand, and say that we have no further proposals to make. I trust that what I have said may, at all events, remove the impression in some quarters that we are endeavouring unfairly to shift the burden from one shoulder to another. We have endeavoured to frame our Budget, not in the interests of one class, but in the interests of all classes. I admit that it is mainly a ratepayers' Budget. In making it so, we have endeavoured to adjust the burdens in accordance with the capacity of persons to bear them, and we submit our proposals, as a whole, with confidence to the judgment of the House and to the judgment of the country.

SIR WILLIAM HARCOURT (Derby)

I shall not detain the House many minutes, and I shall not enter upon any financial aspect of the question. We are quite satisfied that this controversy should stand as it has been left by the Chancellor of the Exchequer and the right hon. Member for Mid Lothian. I should not have intervened if it had not been for the remarkable statement made by the noble Lord the Member for Rossendale. I confess I saw in that statement something far more important than any theory of adjustment between personal and real property, however important that may be. It seemed to me that in what my noble Friend said to-night he struck, I will not say a fatal blow, but a great blow against the Constitutional principles of government in this country. [Laughter.] I would not advise Gentlemen opposite to laugh so much; it has hitherto been understood that the responsible government of this country was conducted by the Cabinet, and that it was not merely a collection of individuals who each held his own separate, independent opinions which he might avow to-day, and disavow to-morrow. [Loud ironical cheers.] Oh, yes; you are delighted to hear an apology for inconsistency from my noble Friend, and the white sheet becomes him so well, but that is not the point to which I wish to address myself. I say that clearly the responsible Government of this country is the collective Cabinet—the Cabinet as a collective body—because it is that which advises the Sovereign, Parliament, and the nation. The statement the noble Lord has made to-night is absolutely inconsistent with that. He has sat in the Cabinet, and he has declined to recognize the responsibility of that Cabinet. [Cries of "No, no!"] My noble Friend says— Theoretically I was responsible, but as a fact I was so occupied with the business of my Department that I am entitled now to say that I think that the advice given by the Cabinet was not wise advice. Was not that to substitute departmental government for government by a responsible Cabinet? My noble Friend claims to be the representative of Whig principles, but is not that the doctrine against which the Whig Party contended under George III., who endeavoured to set up a number of separate individuals without any common responsibility for the government of the country? Is one of the right hon. Gentlemen who now sits on the Front Bench opposite to be allowed at some future time to get up and say—"True, I was a Member of the Government which proposed the Local Government Bill, but I was so occupied with the business of my Department that I am now free to say that I did not think it a wise proposal?" I say if language of that kind is to be admitted there is an end of responsible Government in this country. It is quite true that in a Government some men are more occupied in particular subjects than others, but they all honourably stand by one another, and if any differ in opinion they leave the Government. But that they should go on as Members of that Government on the faith of an honourable understanding, and then afterwards, when it suits a political purpose, turn round and say, "Oh, I was too busy to attend to it," that is a course which has never been taken in this country by any responsible politician. I take this, the earliest opportunity, of denouncing such conduct as absolutely inconsistent with all that has hitherto been understood to be the good faith of Members of a Cabinet. The noble Lord said—" I was very busy in 1885, and I agreed to equalize the burdens upon real and personal property. I am willing to vote against it in 1888 because another Government proposes something different." But he says—"Take care, I do not mean to pledge myself that some time hereafter I will not vote as I did in 1885." Surely, there never was a statesman more open to conviction. All I can say is that we have seen in other countries the mischiefs which have come of sections—the mischiefs which have come of attempts to overthrow the old Party government of the country. In fact we have been told on good authority the other day, that there is no Party left—no Liberal Party, no Tory Party; that is the doctrine of one great Unionist Liberal. But there is something else going to the wall besides Party Government, and that is the theory of responsible government, as shown in the case of the noble Lord to-night. The Chancellor of the Exchequer says it is a very fine thing for the right hon. Member for Mid Lothian to have pointed out that the land is too lightly taxed in this country. Why, the first person who demonstrated that in the past, he who most successfully demonstrated it, was the Chancellor of the Exchequer himself.

MR. GOSCHEN

The circumstances were different in 1871.

SIR WILLIAM HARCOURT

He says that was in 1871.

MR. GOSCHEN

I beg the right hon. Gentleman's pardon; what I stated was that the circumstances of land and rates in 1871 were entirely different from what they are now.

SIR WILLIAM HARCOURT

Entirely different, because you did not give the relief which you have given now. ["Oh, oh!"] I will tell hon. Gentlemen where they will find an answer. The right hon. Gentleman says he would like to see how the land lay. Then he says that the land in England lies very comfortably. The right hon. Gentleman goes on to say— I will now state the percentages paid by land only towards the total amount raised for Imperial taxation. In England it pays 5½ per cent; in Holland land pays 9 per cent; in Austria 17½ per cent; in France 18½ per cent; in Belgium 20½ per cent; and in Hungary 32½ per cent. What do these facts prove? They prove that as regards Imperial taxation the land of this country is in an infinitely better position than the land in any other European country. Do you suppose that that is not a lesson which will be remembered by those who have studied the writings of the right hon. Gentleman? The question to-night is whether it is fair that land should enjoy in this country a special immunity and exemption which it does not enjoy in any other country. The Chancellor of the Exchequer said that the rates are much more felt as a burden in the country than they are in the towns. I have the honour to represent a borough, and I do not think that the towns take that view of the question. Everybody knows that, especially in the Metropolis —and the author of the Local Government Bill stated it—that there is no place in which the burden of the rates is heavier and more felt than in the poorer parts of the Metropolis. Yet here we have the Chancellor of the Exchequer pointing to this exceptional treatment of land, because he says that the rates are heavier and much more felt in the rural districts than they are in the populous districts of the towns.

MR. GOSCHEN

I did not say that they were heavier. What I said was that they were more felt.

SIR WILLIAM HARCOURT

Yes; more felt. Well, I entirely deny that proposition. I believe that the burden of the rates is much heavier and much more felt in parts of this Metropolis than they are in any rural parish in England. I do not desire at this hour to delay the House longer. My right hon. Friend has raised a fair issue. The President of the Local Government Board spoke with great indignation of the Motion, which, he said, was injurious to the Government and to the Budget. The right hon. Gentleman himself made a Motion of exactly the same character in 1885, and, therefore, we do not accept his reproaches on that subject. We have laid before the House, and my right hon. Friend the Member for Mid Lothian has laid before the country, a very clear and a very distinct issue. He has said, and I conceive he has proved, that there is an exceptional treatment of real property as contrasted with personal property. We deny the justice of that, and, with respect to the Budget, we say that if you only place these taxations on an equal footing you might raise the money you want for Imperial and local purposes, and might dispense with these paltry and irritating taxes which you have proposed, and which we believe to be unnecessary and mischievous.

Question put.

The House divided:—Ayes 310; Noes 217: Majority 93.

AYES.
Ainslie, W. G.	Banes, Major G. E.
Aird, J.	Baring, T. C.
Amherst, W. A. T.	Barnes, A.
Anstruther, Colonel R. H. L.	Barry, A. H. Smith-
	Bartley, G. C. T.
Ashmead-Bartlett, E.	Barttelot, Sir W. B.
Baden-Powell,Sir G.S.	Bass, H.
Bailey, Sir J. R.	Bates, Sir E.
Baird, J. G. A.	Baumann, A. A.
Balfour, rt. hon. A. J.	Bazley-White, J.

Beach, right hon. Sir M. E. Hicks-	Dyke, right hon. Sir W. H.
Beach, W. W. B.	Ebrington Viscount
Beadel, W. J.	Edwards-Moss, T. C.
Beaumont, H. F.	Egerton, hon. A. J. F.
Beckett, W.	Egerton, hon. A. de T.
Bective, Earl of	Elcho, Lord
Bentinck, Lord H. C.	Elliot, hon. A. R. D.
Bentinck, rt. hn. G. C.	Elliot, hon. H. F. H.
Bentinck, W. G. C.	Elliot, G. W.
Beresford, Lord C. W.	Ellis, Sir J. W.
de la Poor	Elton, C. I.
Bethell, Commander G. R.	Eyre, Colonel H.
	Farquharson, H. R.
Bickford-Smith, W.	Feilden, Lt.-Gen. R. J.
Biddulph, M.	Fellowes, A. E.
Bigwood, J.	Fergusson, right hon. Sir J.
Birkbeck, Sir E.
Blundell, Colonel H. B. H.	Field, Admiral E.
	Fielden, T.
Bond, G. H.	Finch, G. H.
Bonsor, H. C. O.	Finlay, R. B.
Boord, T. W.	Fisher, W. H.
Borthwick, Sir A.	Fitzgerald, R. U. P.
Bridgeman, Col. hon. F. C.	Fitzwilliam, hon. W. H. W.
Bristowe, T. L.	Fitz - Wygram, Gen. Sir F. W.
Brodrick, hon. W. St. J. F.	Fletcher, Sir H.
Brookfield, A. M.	Folkestone, right hon. Viscount
Brown, A. H.
Burghley, Lord	Forwood, A. B.
Campbell, Sir A.	Fowler, Sir R. N.
Campbell, J. A.	Fry, L.
Campbell, R. F. F.	Fulton, J. F.
Chamberlain, R.	Gardner, R. Richardson
Chaplin, right hon. H.
Charrington, S.	Gathorne-Hardy, hon. A. E.
Clarke, Sir E. G.
Cochrane-Baillie, hon. C. W. A. N.	Gathorne-Hardy, hon. J. S.
Coddington, W.	Gedge, S.
Coghill, D. H.	Gilliat, J. S.
Colomb, Capt. J. C. R.	Godson, A. F.
Commerell, Adml. Sir J. E.	Goldsmid, Sir J.
	Goldsworthy, Major General W. T.
Compton, F.
Cooke, C. W. R.	Gorst, Sir J. E.
Corbett, J.	Goschen, rt. hon. G. J.
Corry, Sir J. P.	Granby, Marquess of
Cotton, Capt. E. T. D.	Gray, C. W.
Cranborne, Viscount	Green, Sir E.
Cross, H. S.	Grimston, Viscount
Crossman, Gen. Sir W.	Grotrian, F. B.
Cubitt, right hon. G.	Gunter, Colonel R.
Curzon, Viscount	Gurdon, R. T.
Dalrymple, Sir C.	Hall, A. W.
Davenport, H. T.	Hall, C.
Davenport, W. B.	Halsey, T. F.
Dawnay, Colonel hon. L. P.	Hambro, Col. C. J. T.
	Hamilton, right hon.
De Cobain, E. S. W.	Lord G. F.
De Lisle, E. J. L. M. P.	Hamilton, Lord C. J.
De Worms, Baron H.	Hamilton, Col. C. E.
Dickson, Major A. G.	Hamley, Gen. Sir E. B.
Dimsdale, Baron R.	Hanbury, R. W.
Dixon, G.	Hankey, F. A.
Dixon-Hartland, F. D.	Hardcastle, E.
Dunkin, R. S.	Hardcastle, F.
Dorington, Sir J. E.	Hartington, Marq. of
Dugdale, J. S.	Hastings, G. W.
Duncan, Colonel F.	Havelock - Allan, Sir H. M.
Duncombe, A.

Heathcote, Capt. J. H. Edwards-	Maclean, J. M.
	Madden, D. H.
Heaton, J. H.	Malcolm, Col. J. W.
Herbert, hon. S.	Maple, J. B.
Hermon-Hodge, R. T.	Marriott, rt. hn. W. T.
Hervey, Lord F.	Maskelyne, M. H. N. Story-
Hill, right hon. Lord A. W.	Matthews, rt. hon. H.
Hill, Colonel E. S.	Mattinson, M. W.
Hill, A. S.	Maxwell, Sir H. E.
Hoare, E. B.	Mayne, Adml. R. C.
Hoare, S.	Mildmay, F. B.
Hobhouse, H.	Mills, hon. C. W.
Holloway, G.	Milvain, T.
Hornby, W. H.	More, R. J.
Howard, J.	Morgan, hon. F.
Hubbard, hon. E.	Morrison, W.
Hughes, Colonel E.	Moss, R.
Hughes - Hallett, Col. F. C.	Mount, W. G.
	Mowbray, rt. hon. Sir J. R.
Hulse, E. H.
Hunt, F. S.	Mowbray, R. G. C.
Hunter, Sir W. G.	Mulholland, H. L.
Isaacs, L. H.	Muntz, P. A.
Isaacson, F. W.	Murdoch, C. T.
Jackson, W. L.	Newark, Viscount
James, rt. hon. Sir H.	Noble, W.
Jardine, Sir R.	Norris, E. S.
Jarvis, A. W.	Northcote, hon. Sir H. S.
Jeffreys, A. F.
Jennings, L. J.	Norton, R.
Johnston, W.	O'Neill, hon. R. T.
Kelly, J. R.	Paget, Sir R. H.
Kennaway, Sir J. H.	Parker, hon. F.
Kenrick, W.	Pearce, Sir W.
Kenyon, hon. G. T.	Pelly, Sir L.
Kenyon - Slaney, Col. W.	Plunket, rt. hon. D. R.
	Pomfret, W. P.
Kerans, F. H.	Powell, F. S.
Kimber, H.	Puleston, Sir J. H.
King, H. S.	Quilter, W. C.
Knatchbull-Hugessen, H. T.	Raikes, right hon. H. C.
Knightley, Sir R.	Rankin, J.
Knowles, L.	Rasch, Major F. C.
Kynoch, G.	Richardson, T.
Lafone, A.	Ridley Sir M. W.
Lambert, C.	Ritchie, rt. hn. C. T.
Laurie, Colonel R. P.	Robertson, Sir W. T.
Lawrence, J. C.	Robertson, J. P. B.
Lawrence, Sir J. J. T.	Robinson, B.
Lawrence, W. F.	Rollit, Sir A. K.
Lea, T.	Ross, A. H.
Lechmere, Sir E. A. H.	Rothschild, Baron F. J. de
Lees, E.
Legh, T. W.	Round, J.
Leighton, S.	Royden, T. B.
Lennox, Lord W. C. Gordon-	Sandys, Lieut.-Col. T. M.
Lethbridge, Sir R.	Sellar, A. C.
Lewisham, right hon. Viscount	Selwin-Ibbetson, right hon. Sir H. J.
Llewellyn, E. H.	Selwyn, Captain C. W.
Long, W. H.	Seton-Karr, H.
Low, M.	Shaw-Stewart, M. H.
Lowther, hon. W.	Sidebotham, J. W.
Lowther, J. W.	Sidebottom, T. H.
Lubbock, Sir J.	Sidebottom, W.
Lymington, Viscount	Sinclair, W. P.
Macartney, W. G. E.	Smith, right hon. W. H.
Macdonald, rt. hon. J. H. A.	Smith, A.
Maclean, F. W.	Stanhope, rt. hon. E.

Stephens, H. C	Webster, R. G.
Stewart, M. J.	Weymouth, Viscount
Stokes, G. G.	Wharton, J. L.
Sutherland, T.	Whitley, H.
Swetenham, E.	Whitmore, C. A.
Talbot, J. G.	Wiggin, H.
Tapling, T. K	Wilson, Sir S.
Taylor, F.	Wodehouse, E. R.
Temple, Sir R.	Wolmer, Viscount
Theobald, J.	Wood, N.
Thorburn, W.	Wortley, C. B. Stuart-
Tollemache, H. J.	Wright, H. S.
Tomlinson, W. E. M.	Wroughton, P.
Townsend, F.	Yerburgh, R. A.
Trotter, Col. H. J.	Young, C. E. B.
Vernon, hon. G. R.
Vincent, Col. C. E. H.	TELLERS.
Walsh, hon. A. H. J.	Douglas, A. Akers-
Waring, Colonel T.	Walrond, Col. W. H.
Webster, Sir R. E.

NOES.
Abraham, W. (Limerick, W.)	Cremer, W. R.
	Crilly, D.
Acland, A. H. D.	Crossley, E.
Allison, R. A.	Dillwyn, L. L.
Anderson, C. H.	Duff, R. W.
Asher, A.	Ellis, J.
Asquith, H. H.	Ellis, J. E.
Atherley-Jones, L.	Ellis, T. E.
Austin, J.	Esslemont, P.
Balfour, rt. hon. J. B.	Farquharson, Dr. R.
Balfour, Sir G.	Fenwick, C.
Ballantine, W. H. W.	Ferguson,R.C.Munro-
Barbour, W. B.	Finucane, J.
Barran, J.	Firth, J. F. B.
Biggar, J. G.	Flower, C.
Bolton, J. C.	Flynn, J. C.
Bolton, T. D.	Foley, P. J.
Bradlaugh, C.	Foljambe, C. G. S.
Bright, Jacob	Forster, Sir C.
Broadhurst, H.	Foster, Sir W. B.
Brown, A. L.	Fowler, right hon. H. H.
Bruce, hon. R. P.
Brunner, J. T.	Fox, Dr. J. F.
Bryce, J.	Fry, T.
Buchanan, T. R.	Fuller, G. P.
Burt, T.	Gane, J. L.
Buxton, S. C.	Gardner, H.
Byrne, G. M.	Gaskell, C. G. Milnes-
Cameron, J. M.	Gill, T. P.
Campbell, Sir G.	Gladstone, H. J.
Campbell, H.	Gourley, E. T.
Campbell-Bannerman, right hon. H.	Grey, Sir E.
	Grove, Sir T. F.
Carew, J. L.	Haldane, R. B.
Causton, R. K.	Hanbury-Tracy, hon. F. S. A.
Cavan, Earl of
Channing, F. A.	Harcourt, rt. hn. Sir W. G. V. V.
Childers, rt. hon. H. C. E.	Harrington, E.
Clancy, J. J.	Harris, M.
Clark, Dr. G. B.	Hayne, C. Seale-
Cobb, H. P.	Hingley, B.
Colman, J. J.	Holden, I.
Conway, M.	Howell, G.
Conybeare, C. A. V.	Hoyle, I.
Corbet, W. J.	Hunter, W. A.
Cossham, H.	Illingworth, A.
Cozens-Hardy, H. H.	Jacoby, J. A.
Craig, J.	James, hon. W. H.
Crawford, D.	Joicey, J.
Crawford, W.	Jordan, J.

Kay-Shuttleworth, rt. hon. Sir U. J.	Power, R.
	Price, T. P.
Kennedy, E. J.	Priestley, B.
Kenny, C. S.	Provand, A. D.
Kenny, J. E.	Pugh, D.
Kilbride, D.	Quinn, T.
Labouchere, H.	Randell, D.
Lalor, R.	Rathbone, W.
Lawson, Sir W.	Redmond, W. H. K.
Lawson, H. L. W.	Reid, R. T.
Leahy, J.	Reynolds, W. J.
Leake, R.	Richard, H.
Lefevre, right hon. G. J. S.	Roberts, J.
	Roberts, J. B.
Lewis, T. P.	Robinson, T.
Lockwood, F.	Roe, T.
Macdonald, W. A.	Roscoe, Sir H. E.
Mac Innes, M.	Rowlands, J.
M'Arthur, A.	Rowlands, W. B.
M'Arthur, W. A.	Rowntree, J.
M'Cartan, M.	Russell, Sir C.
M'Carthy, J.	Schwann, C. E.
M'Carthy, J. H.	Sheehan, J. D.
M'Donald, P.	Simon, Sir J.
M'Donald, Dr. R.	Slagg, J.
M'Ewan, W.	Smith, S.
M'Kenna, Sir J. N.	Stack, J.
M'Lagan, P.	Stanhope, hon. P. J.
M'Laren, W. S. B.	Stansfeld, right hon. J.
Mahony, P.	Stevenson, F. S.
Maitland, W. F.	Stevenson, J. C.
Mappin, Sir F. T.	Stewart, H.
Mayne, T.	Stuart, J.
Menzies, R. S.	Sullivan, D.
Montagu, S.	Summers, W.
Morgan, rt. hon. G. O.	Sutherland, A.
Morgan, O. V.	Talbot, C. R. M.
Morley, rt. hon. J.	Tanner, C. K.
Mundella, rt. hon. A. J.	Thomas, A.
	Thomas, D. A.
Murphy, W. M.	Trevelyan, right hon. Sir G. O.
Neville, R.
Newnes, G.	Tuite, J.
Nolan, Colonel J. P.	Vivian, Sir H. H.
Nolan, J.	Waddy, S. D.
O'Brien, J. F. X.	Wallace, R.
O'Brien, P. J.	Wardle, H.
O'Connor, J.	Warmington, C. M.
O'Connor, T. P.	Watt, H.
O'Doherty, J. E.	Wayman, T.
O'Hanlon, T.	Whitbread, S.
Palmer, Sir C. M.	Will, J. S.
Parker, C. S.	Williamson, J.
Parnell, C. S.	Williamson, S.
Paulton, J. M.	Wilson, H. J.
Pease, A. E.	Wilson, I.
Pickard, B.	Winterbotham, A. B.
Pickersgill, E. H.	Woodall, W.
Picton, J. A.	Woodhead, J.
Playfair, right hon. Sir L.	Wright, C.
Plowden, Sir W. C.	TELLERS.
Portman, hon. E. B.	Marjoribanks, rt. hon. E.
Potter, T. B.
Powell, W. R. H.	Morley, A.
Power, P. J.

Bill read a second time, and committed for Thursday.

Main Question again proposed, "That the Bill be now read a second time."

MR. PICTON (Leicester)

said, he was quite aware that it would be out of Order for him to attempt to move any other Resolution, nor was he about to say anything upon the Resolution of which he had given Notice—he would take the opportunity of raising the questions he desired to raise on another occasion. But it did appear to him that it was a little awkward on that most important Bill that the House should be allowed to discuss on the second reading only one particular question. It would have been better had the debate been adjourned. There were a number of most important subjects in the Bill that ought to be discussed before going into Committee. To say nothing of the Tea Duty, there was the new Duty on Wines, new Stamp Duties, and a variety of other matters, some of them altogether novel, that ought to be discussed. Therefore, without detaining the House any further, and to give the House the opportunity of giving a decision on the subject, he would move the adjournment of the debate.

Motion made, and Question proposed, "That the Debate be now adjourned."—(Mr. Picton.)

THE FIRST LORD OF THE TREASURY (Mr. W. H. SMITH) (Strand, Westminster)

hoped the House would not consent to an adjournment. The hon. Member (Mr. Picton) mentioned questions upon which he desired to address the House, and he (Mr. W. H. Smith) might remind the hon. Gentleman that the opportunity would be more usefully afforded as, clause by clause, the continuation of old duties or imposition of new duties came under view in Committee. This would be the natural opportunity for discussing such details as the hon. Member alluded to—the Tea Duty, the Wine Duty, and the new Stamp Duties; and such had been the practice of the House in relation to the Budget Bill. After the debate just closed—a debate of the length of which he could not complain—he hoped the House would close the second reading stage.

SIR WILLIAM HARCOURT (Derby)

hoped his hon. Friend (Mr. Picton) would not press his Motion. What the right hon. Gentleman said was perfectly correct, and all the points on which discussion was desired might be dealt with in Committee, whether in regard to duties that hon. Members thought should be lightened, or in reference to new duties proposed. The Committee would offer adequate opportunity for discussion.

MR. PICTON

said, in deference to what had been said, he would not press his Motion.

Motion, by leave, withdrawn.

Main Question put, and agreed to.