SECOND READING.

HC Deb 07 May 1894 vol 24 cc489-573

Order for Second Reading read.

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

* MR. GRANT LAWSON (York, N. R., Thirsk)

said, he rose to move that the Bill be read a second time upon this day six months, and he desired to give to the House some out of numerous reasons why the measure should not receive a Second Reading. The first reason he would assign was that the measure was of an exceedingly cumbersome and complicated character, and that it was introduced at a period of the Session when time was short and the programme long. That reason alone ought to render the Bill unacceptable to some sections of the House, for the reason that they were supposed to be hungering for various items, which could not fail to be delayed if no modification of this very substantial Bill were agreed to by the Government. They had been told by a master of Parliamentary tactics that the task of readjusting the Death Duties would by itself absorb a whole Session. That task, however, the Government now conjoined with many others, such as the resettlement of the incidence of the Income Tax, the reconsideration for certain purposes of the Naval Defence Act and the Imperial Defence Act, and the imposition of additional duties on beer and spirits. The Bill, in fact, bristled with controversial questions. It reminded him of barbed wire, which could hardly be touched at any point without inflicting injury. Controversial provisions had been introduced into the Bill from no pressing financial reason whatever. The brewing industry was represented in the House, and also the hop and barley-growing industries, and he hoped that those Members would hear a warning voice from their constituents as to how they should vote. With regard to the-duties on alcohol, if they were meant as an instalment given to the temperance vote, he would point out that those taxes were said to fall upon the producer, and could, therefore, have no effect in reducing the consumption of the cup that cheered, but did not, necessarily, inebriate. It was true that some surreptitious water might be introduced. These extra duties upon alcohol appeared to sin against the canons of finance. The Spirit Duty affected a trade respecting which the revenue had been falling for the last four years. He admitted that it had been increasing as regarded beer, but it surely was not wise, from the point of view of Excise, to exaggerate duties until they compelled adulteration. The part of the measure, however, which he wished to criticise specially was that which imposed increased taxation on land. The Party to which he belonged claimed that in 1853 laud was given by the late Leader of the Liberal Party certain advantages in respect of the Death Duties, and that those advantages were given because land suffered under special disadvantages in respect of rates and the so-called Land Tax and Income Tax under Schedule (A). Now the Government proposed to take away the advantages which were conferred upon laud in 1853, although the disadvantages under which land suffered had rather increased than diminished since that year. The Secretary of State for War, on the First Beading of the Bill, dealt with this matter in a very clever speech, which, however, was not to the point. The contention of the Opposition was that by this Bill all realty would be heavily burdened when the existing heavy pressure of the rates made it very undesirable that it should be so burdened. The speech of the right hon. Gentleman was no answer to the argument that realty should not bear additional taxation; lit merely proved that one class of realty, house property, was already rated to an almost intolerable amount. The case of realty was so strong that it could afford to concede all that was urged in connection with hereditary burdens. It was just possible, by making the worst case against land, to bring the so-called hereditary burdens up to £14,800,000. In the Report of the right hon. Gentleman the Secretary of State for India the gross immediate expenditure for the relief of the poor was put at £8,643,000. In an Appendix to the Report an account was given of the expenditure by every Local Authority in the country; and from those accounts he had taken every item relating to roads and bridges, and including sums spent for street-washing, scavenging, &c. The amount came to £6,248,000, and thus, with all these exaggerated statements against land, the total of hereditary burdens could only be calculated at £14,800,000. But the rates in the same year (1890–91) were £27,800,000, and therefore the local burden on realty, without the hereditary burdens, was £13,000,000 a year. What case could the right hon. Gentleman make for personalty? In the Report he stated— The entire Treasury subvention, including not merely payments to the several Local Authorities but also other charges of a local nature, borne by annual Votes of Parliament, in 1892 were £11,846,482. To get at this sum, credited to personalty, the right hon. Gentleman had to reckon as a local matter such an Imperial matter as public elementary education grants; and the total naturally included the large expenditure to assist the roads which he had already retransferred to realty. Further, it must bo remembered that realty paid into the Treasury from which the subventions were taken. But, granting everything to the right hon. Gentleman, and stating the case as adversely as possible to realty, it remained that personalty paid £12,000,000 where realty paid £13,000,000. But he would show where that case broke down. No one would contend that the value of realty and personalty were at all equal at present. They all knew that personalty vastly exceeded realty in value. Unless and until it was proved that for local public purposes, apart from hereditary burdens altogether, personalty and realty bore the local burdens in equal proportions, there was no ground for claiming that they should bear the Imperial taxation in equal proportions. Taking the words of the Chancellor of the Exchequer out of his own Budget speech, his case for realty was founded on the right hon. Gentleman's statement that The inequalities in the position of real estate should be considered together. In the present measure it was proposed to equalise the Death Duties; and the right hon. Gentleman said that when this equal scale came into operation personalty would pay £11,000,009 to the £2,500,000 contributed by realty. That was in the proportion of 22 to 5. In 1893–4 the Death Duties yielded £10,000,000, and out of this, according to the proportion indicated by the Chancellor of the Exchequer, land and houses would have contributed £1,850,000. They actually contributed, however, £1,150,000 — an underpayment of £700,000. But as to Income Tax, under Schedule (A), the right hon. Gentleman was prepared to admit that realty paid too much, and to make certain deductions, which he assessed at £700,000. Therefore, the amount underpaid one Death Duties was neutralised by the amount overpaid on Income Tax. But the right hon. Gentleman would object that the leaseholds came under Schedule (A). He calculated that one-quarter should be deducted for leaseholds, or £175,000, and that left a net over-payment by realty in regard to Income Tax under Schedule (A) of £525,000. Therefore, the balance of payment in favour of personalty and against realty, in respect of Death Duties and Income Tax, was only £175,000. But he contended that the deductions under Schedule (A) ought to be twice or three times the amount at which the Chancellor of the Exchequer put them; and if that contention were carried the balance would at once be in favour of realty. But, admitting the Chancellor of the Exchequer's statement, there was another item to be considered. House Duty, which produced £1,425,000, fell on realty alone. [Sir W. HARCOURT: It falls upon the occupier.] The occupier gave less rent for his house because of the burdens upon property. After all these figures, could anyone say that realty paid so much too little to Imperial taxation, as compared with personalty, that there was any justice in the Bill? Realty did not ask to be treated in an exceptionally favourable manner, but by the Bill it was being treated in an exceptionally unfavourable manner. That was not done on any principle of reason or justice, but simply on the rule of counting heads and taxing the minority. It was useless to appeal to political economy: but even on the principles of the "odd-man cult" he would show that the minority were a very substantial minority in voting power. He would not argue for the owners of the great estates. He could not expect any sympathy for men whose solvency was apparent, if not real. Besides, these men were only to have one vote. But the increased burden on the large estates would be fourfold the present average burdens. The smaller estates, with which he would concern himself, were not under strict settlement, as were the larger. Where the estate was settled, the duty would be paid once for the whole settlement. But where the estate was unsettled, the duty on the whole capital value of the estate would have to be paid over and over again as often as there was a succession. The other night the Chancellor of the Exchequer said that he had benefited the yeoman farmer under this Bill. He spoke of the case of a man with £1,000 in land, and he enlarged his holding to 200 acres. Doubtless hon. Gentlomen opposite flashed these tidings of comfort and joy to all the small yeomen in their divisions who were, perhaps, doubtful about the measure, but he hoped an analysis would be taken now with regard to the relief given. First of all, it must be just £1,000 in land and nothing else. He must have no stock, no furniture, and no implements, because if he had he would get outside the limits of the protection of the 13th clause. And what would happen if be got outside that Alsatia? In the case of £1,000 in land that land, taking the general rule, would go from father to son. The age of the son would be 40 years, and, according to the calculations adopted by Somerset House, the net income from this £1,000 would be about £40 a year. As the law stood at present there would be no Probate Duty upon land, but Succession Duty would be paid on the life interest in an annuity of £40, and the successor, the son, at 40 would have to pay £8 18s. 6d. He might spread it over a period of eight years, and in that case he would pay interest at 4 per cent. upon the last four yearly instalments. Such interest would amount to about 9s., so that according to the present scale £9 7s. 6d. was all that the yeoman would have to pay. According to the new scale proposed by the Bill he would first have to pay a valuer to value the land. Taking Byde's scale for valuing land—which was in use in the Taxing Master's Office—be found that the fee for valuing laud of the value of £1,000 was £18 18s., and on an estate of £200,000 the fees would be £1,063 13s. At the present moment the cost of the valuation for Probate Duty was paid by the people who took the succession, so that they might take it thai the successor, would have to pay £5, at the least, for the valuation Then, under Clause 13, he had to pay "fees of Court and expenses, 15s.," and he had to pay 2 per cent. on£l,000, which made £20, or a total of £25 15s., as against £8 18s. 6d. This was the case the right hon. Gentleman selected as an illustration of how grateful the yeoman's sons would be to him. He had shown that the total amount spread over eight years would be, as the law now stood, £9 7s. 6d., but if the payment were spread over eight years under this Bill what would happen? The successor would have to pay 3 per cent. interest on the whole of the eight annual instalments, which would be two guineas, so that the total amount would be £27 17s., as against £9 7s. 6d. The yeoman, he was sure, would be duly grateful for the relief the light hon. Gentleman had afforded him. Perhaps the Chancellor of the Exchequer would say that he (Mr. Lawson) had taken the age at too high a figure, and that he ought not to say the successor would be 40; that it would be unkind of the yeoman to upset the calculation by a too long life, and that he ought to die young and leave a young successor. Four years was the age at which a successor would have the greatest expectancy of life. If a son succeeded at four years of age he would have to pay under the present system £11 11s., as against £25 15s. suggested by the Bill. Take the case of collaterals. Suppose it went to a brother at the age of 40, as the estate was not over £1,000 in value there would, by the 13th clause, be no Succession Duty to pay. A brother succeeding to an estate all in realty of £1,000 would pay now a duty of £27. He would have the advantage of a pound or two, because under the Chancellor of the Exchequer's scheme he would only pay £25 15s. That was to say, there would be 25s. to the benefit of the collateral. But was the policy of this House that lineals should be injured in order that collaterals should gain? The condition of the Chancellor of the Exchequer's relief was that the yeoman must die young and not leave his land to his children. He said he would point out what would happen if a man, by having stock and implements, got outside the Alsatia of the limit of Clause 13. Suppose that his land was worth £1,000 and that he had personalty of £500. His net income for the land would be £40. The Probate Duty at £1 for each £50 would be £10; he would pay for Succession Duty £9; so that altogether he would now pay £19. Under this Bill he would pay 3 per cent. on the capital value of £1,500, making £45, as against £19. Then, again, the larger fees of the Court for probate on a larger sum, expenses of valuation, increased interest on instalments, largely increased the difficulties. Now take the case of a brother coming into an estate of that sort. He would now pay: Probate Duty, £10; Legacy Duty, at 3 per cent., £15; and Succession Duty, at 4½ per cent., £27— making in all £52. In future he would pay 3 per cent. on the capital value of the whole property, £45; Legacy Duty, 3 percent., £15; Succession Duty, 3 per cent. on the capital value of the land, £30 —or in all £90, as against £52. He would go on with the list of those whom this measure directly injured. Take the case of younger children whose portions were to be paid out of the estate. Under the settlements now existing the amount of these portions was fixed and could not be altered. What would happen if this Bill passed? These portions were not very liberal, and he believed in many parts of the country to have the portion of an Earl's daughter was a synonym for poverty. From these portions, which could not be increased, because the amount was settled at the marriage of the parents, there would be taken off this very considerable additional duty, which would be reckoned in this way: they would not have to pay at a rate fixed by what they themselves received, but they would have to pay at the rate fixed by what the eldest brother got, and on what was the value of his property. There was thus a class distinctly injured. He would give another class which included a multitude of people—namely, those who had purchased reversionary interests. Some of the greatest Insurance Companies had invested their money in reversionary interests, and he did not think there was any man who wished to do anything to injure the great Insurance Companies, on whoso stability the peace of mind and comfort of the vast majority, high and low, in this country depended. When he showed that this Bill would injure them he thought he should have driven one nail into the coffin of these proposals. These reversionary interests had been purchased by the Companies on a careful calculation of what would have to be paid to the State when the reversions fell into their possession. If this measure were passed they imposed a new duty on these reversionary interests. And how was that duty to be calculated? Not by what was the amount of the reversion they took, but by the total estate left by the man upon whose death these reversions were expectant. If the man left £1,000,000, the holder of a reversion of £1,000 of that £1,000,000 would have to pay at 8 per cent. By this means they reduced the purchase of a reversion, which was now a legitimate business, to a mere gamble, only to be undertaken by a cent. per cent. money-lender. He had named several classes who would be injured, and he would now state generally that under the clauses of this Bill the Government were injuring every man in this country who had a house or who occupied a yard of land, and the only persons they were sparing were those who were living in tents on commons or in barges on canals. Did they not know that the tenant of land or a house which was heavily encumbered was in an unfortunate position? A few repairs and no improvements was all that he could get from his landlord. The curse of encumbrances which fell on every tenant in this country the Government were increasing in this Bill in two directions. In the first place, there would be the heavy mortgage to the State, which would last for eight or nine years after the succession, but in the case of settled estates this incubus would be perpetual and absolutely irremovable. It was not likely that the first life-tenant would pay the full Estate Duty out of his own pocket, he would raise it by a perpetual mortgage upon the estate. At the commencement of the next settlement the process would he repeated, and the land would become more and more embarrassed, until the dreams of the land nationalizers would be realised, and out of the poverty of the Chancellor of the Exchequer the State would inherit the earth. Clause 7, of Sub-section 9, ran— Where any proceeding for the recovery of Estate Duty in respect of any property is instituted, the High Court shall have jurisdiction to appoint a Receiver of the property, and to order a sale of the property. So that eventually the land would be sold by the High Court to pay for these heavy incumbrances they were building up. He left it to others to speak of the injury done by accumulated mortgages and incumbrances to everyone in the agricultural community, which was already suffering from want of capital and from a sense of insecurity of land-tenure, which prevented money being put in the agricultural interest. He also left it to others to speak of the injury done to schools and charities, which were largely dependent upon the liberality and generosity of country squires; and to the injury done to the employment of agricultural labourers throughout the whole of the country districts. He would leave it to the Representatives in this House of all other industries injured by this measure to speak of the manner in which those industries and interests were injured, but he hoped the country gentlemen by their action on this Bill would prove that they no longer deserved the scathing sarcasm of Walpole—that while moneyed men were like hogs who never failed to grunt and stir if even a bristle were touched, the country gentlemen were like sheep who would suffer themselves to be fleeced every year. Let them show that they would not suffer themselves to be fleeced without very vigorous protestation. He should be told that it was unusual to reject a Budget Bill, and that it was more usual to attack some specific provision of it, and by so under-mining it to bring down the whole edifice. He objected to these proposals as a whole; it was a long and complicated measure, but not more lengthy than it was unjust. He was aware that certain inconveniences would arise from the adoption of the course he asked the House to take, but were these inconveniences to be made a reason for the greatest possible injustice? If they attempted to mend this Bill in Committee they should be told, in the first place, that they must regard the Budget as a whole; and, in the second place, that they should be merely postponing the inconveniences which must arise from the collapse of this measure—which he regarded as inevitable—to a period when they would be still more inconvenient. Let them face this matter at once, while yet there was time. Let them ask the Chancellor of the Exchequer to give them a Bill more simple and more suitable to the circumstances of the time, and more equitable, and if he could not, let them ask him to give them the chance of appealing to the constituencies against it. He begged to move the rejection of the Bill.

* MR. BONSOR (Surrey, Wimbledon)

seconded the Motion for the rejection of the Bill. He intended, he said, to criticise the Finance Bill from a different standpoint to that which his hon. Friend had argued so eloquently. The hon. Member for Thirsk had argued the matter from the point of view of the unfair taxation of the landed interest as regarded the Death Duties, and he (Mr. Bonsor) intended to prove to the House that the increased Beer Duty which the Chancellor of the Exchequer proposed under this Bill was practically a tax upon the agricultural industry. The right hon. Gentleman in his speech the other night took great pains to show that he had laid this tax of 6d. a barrel so that it should not fall upon the consumer, and he prided himself on the supposition that nobody would be able to say he had robbed the poor man of his beer. On that point he would only say one or two words. He wished to know where the consumer ceased to pay this indirect tax, and where the manufacturer came in? The manufacturer collected several millions per annum which he handed to the Revenue, and he had always understood he collected that tax from the consumer of the article. He should like the Chancellor of the Exchequer to inform the House where the consumer ceased to pay and where the manufacturer came in. The fact was that this tax was placed on the manufacturer on somewhat false pretences. The right hon. Gentleman said he had figures to show that the retailers and distributors of alcoholic liquor were in a position to pay this tax. Pie was not afraid of the right hon. Gentleman's figures, because he was in a position to know something of the profits made by the great brewers. He had taken figures from a number of the published Returns of the Limited Liability Companies, and in hardly any case did the Returns exceed 6 per cent. on the whole capital employed. In no instance, he thought, did it exceed 7 per cent. The Chancellor of the Exchequer might say that was because the capital was inflated and that there was a good deal of capital on paper for goodwill, but in making his calculations he had, wherever he could, deducted the amount allowed for goodwill, and still found that 7 per cent. on the net capital was a fair calculation. He was well aware that there were some eminent firms that were making greater profits, but brewers were not the only people who made considerable profits. He had a Return of certain banking firms, every one of which showed a larger return than 6 per cent. on the capital employed. He had taken his figures from the Stock Exchange Year Book, which was open to everybody. He found that Parr's Bank paid 19 per cent.: the National Provincial 19; London and County 21, and so on, Out of a list of 15 banks the average percentage of profit on capital employed was 17½ per cent. And there were other manufacturing industries that greatly exceeded that percentage—for instance, the great firm of Brunner, Mond, and Co., who made a very considerable profit on what was practically a monopoly. The fact of the matter was that the right hon. Gentleman, in his endeavour to tax the brewers, was trying to do something to render himself inconvenient to them because they possibly had been rendering themselves rather inconvenient to him during the last 18 mouths. He was going to endeavour to show that this tax would not really fall upon the brewers. He did not say that for the first six mouths or so it would not be a source of great inconvenience to them, because after all brewers could not reorganise their business at a minute's notice, but brewers worked like other manufacturers, to a cost sheet—on one side was material, labour, taxes, &c.; and, on the other, the selling receipts. The Chancellor of the Exchequer said that while the price of raw material had fallen the price of beer to the consumer had remained stationary. But the right hon. Gentleman forgot that the tax on the raw material had been increased. And as the tax increased the price of agricultural produce fell. The Revenue had gained something like £2,000,000 a year since the Malt Duty was changed into the Beer Duty. The Chancellor of the Exchequer anticipated that the 6d. a barrel on beer would bring in £580,000 out of £840,000 which it would yield if it were fully paid, consequently he reckoned on a loss of £260,000 of profit-producing material now employed in the manufacture of beer. That meant that the beer would be watered to that extent that the manufacturer at the end of his year would have £260,000 worth of material in stock, and exactly that sum less would be spent in the barley-growing-districts. But this £260,000 did not mean the whole of the tax upon the agricultural industry. It was in 1880 that the right hon. Gentleman the Member for Midlothian took away the Malt Duty and imposed the Beer Duty. In that year a quarter of barley as used in brewing was put at 21s. 8d., and there was an additional tax of 1s. a quarter called the old brewers' licences. That 22s. 8d. had always been taken as equiva- lent to 22s. a quarter, owing to the increase in the process of manufacture. In the year 1880 the Member for Midlothian removed the Malt Tax and imposed the Beer Duty, and he intended at that time to put a duty equivalent to 10d. per quarter on barley. As a matter of fact he put on something just over 2s., and a deputation which waited on the right hon. Gentleman in 1883 were able to prove to him that (he tax really amounted to 24s. a quarter on barley as against 22s. in 1880. The right hon. Gentleman below him (Mr. Gosehen) in 1889 imposed a further tax of 3d. a barrel, or 1s. a quarter, and the old Barley Duty of 22s. was raised to a sum equivalent to 25s. The present tax was equivalent to 2s. per quarter, which raised the tax on barley to something over 27s., which was very nearly cent. per cent. of the value of barley at the present time. He wished to show to the House the effect of this extra taxation. In the year 1876, during which year the biggest consumption of malt took place in this country, he found that while 58,000,000 bushels of malt were used in browing, there wore 820,000hundredweights of sugarused. In 1880 there were 55,850,000 bushels of malt used and 1,136,434 hundredweights of sugar. In 1887 the amount of bushels of malt used in brewing had sunk to 52,319,027, whereas the hundredweights of sugar had risen to 1,465,939, while in] 893malt was 55,654, 980 bushels and sugar 2,122,611 hundredweights, sugar being nearly throe times the amount it was in 1876. But the figures as regarded the prices of barley were even more extraordinary. His own barley buyer in Norfolk had dealt in the best barley in the same market for a number of years, and from his figures he found that in 1876 the average price of the best malting barley was 45s. 6d., in 1880 42s. 10d., and that in 1887 it sank to 34s., while in 1893 it fell as lowas 28s. 10d. The right hon. Gentleman, he had no doubt, considered that the fall in prices was a very good reason for increasing the tax on beer and thereby further decreasing the prices of raw material. But the right hon. Gentleman was absolutely wrong when he stated that the prices of beer had not fallen. They had fallen considerably during the past 10 years, owing to the reduction of the prices of raw materials, and there was not a single brewer who was not selling his beer from 10 to 12 per cent. less than he was 10 years ago. The Chancellor of the Exchequer estimated to lose'£260,000 a year by the imposition of this tax. That £260,000 was practically 2d. out of the extra 6d., and the brewer had an easy means of recouping himself for the other 4d. at the expense of the agricultural industry. According to the Return which he had just read, 55,000,000 bushels of malt were used in brewing, and there was also now a considerable amount of raw grain used for the same purpose. He would like to inform the right hon. Gentleman that malt extract for brewing cost 5d. per pound, and that the raw grain extract was 3½d. per pound. Consequently, there was every inducement to brewers to use raw grain, by which be would gain 1½d. per pound, as against English-made barley malt. The other day, at the Institute of Brewing, where those learned in the science of brewing met to discuss all subjects connected with the industry, it was decided that 10 per cent. of raw grain could be used in brewing without spoiling the article. Thus, if 10 per cent. of grain was used, the Chancellor of the Exchequer would see that the brewer would be recouped at once. But this raw grain was not English barley. It was maize, sago, and rice. Consequently, if the brewer was going to recoup himself to the extent of 4d., he would be thrown upon the foreign produce in order to recoup himself for the tax imposed by the right hon. Gentleman. He hoped that Agricultural Members opposite would lay these facts and figures before their constituents, especially those in the Eastern Counties, and would inform them what was the real meaning of this Budget. An English brewer wished to use English barley, if possible; but if the Chancellor of the Exchequer was going to insist upon running up the taxation on beer to such a point that it could not be made from malt and hops, the brewer, like any other manufacturer, would naturally seek other ingredients. This tax bad, in his opinion, been dictated more by prejudice against the brewing trade than from the mere desire to add to the Revenue. The brewers since 1880 had been partners with the Inland Revenue authorities in the collection of the Excise, and he would venture to say the Act of 1880 would never have worked smoothly and well if it had not been for the cordial co-operation of the brewers of the country with the Excise authorities. He believed there was not a single instance of any evasion of the law on the part of a brewer, and that there was not a single instance where a brewer had been brought before the Magistrate for endeavouring to evade the law, although it was a law which could very easily be evaded. As an Income Tax Commissioner in the City, he knew that many other businesses tried to evade the payment of Income Tax. The tax might fall on the brewers for the first six months, but it would eventually fall upon the agriculturists in the country, and, therefore, he cordially seconded the Amendment that the Bill be read a second time that day six months, and he hoped the Agricultural Members would do their best to endeavour to throw the Bill out.

Amendment proposed, to leave out the word "now," and at the end of the Question to add the words "upon this day six months."—(Mr. Grant Lawson.)

Question proposed, "That the word 'now' stand part of the Question."

* MR. EVERETT (Suffolk, Woodbridge)

said, that the rejection of the Budget had been moved in two very interesting speeches. The hon. Gentleman who proposed the Motion always addressed the House with consummate ability, and the House always listened to him with very great pleasure and very great interest. The House had not the pleasure of often hearing the voice of the hon. Gentleman who seconded the Motion; but he, too, had put forward his case with remarkable ability. One thing in the combination of those two hon. Gentlemen struck him very much, and that was that the first spoke on behalf of what he believed might truly be described as the most distressed industry in the country—the agricultural industry; and the other hon. Gentleman was the spokesman of the brewing industry, which was popularly believed to be the most flourishing industry in the country. But the hon. Member for Wimbledon was able to point to an industry even more flourishing than his own —the industry of banking; which, indeed, he believed the hon. Member had fortunately also something to do with. They had, therefore, distress and prosperity linked together in opposing the Budget. Of course, hon. Gentlemen who opposed the Budget Bill occupied a very considerably more advantageous position than those to whom it fell to defend the Bill; for the reason that it was much easier to speak against an increase of taxation than to defend an increase of taxation. But he wished that hon. Gentlemen opposite who opposed this increase of taxation had remembered that such increase was inevitable when they urged the House to incur the obligation which it was intended to meet. He always listened with pain to proposals of what he should describe as profligate increases of expenditure on the armaments of the country in a time of profound peace. Everyone with patriotic instincts of course desired to see the country defended by a sufficient Navy; but he viewed with consternation and alarm the ease with which a scare was worked up with regard to the Navy. He remembered in the short Parliament hearing Lord Charles Bores-ford declare in the House that the £6,000,000 which had been spent by the Liberal Government to increase the armaments of the country in connection with the Penjdeh scare might just as well have been thrown into the sea for all the good they had effected. It seemed to him that the further millions they were now spending to strengthen the Army and Navy —so far as it was supposed to satisfy the aspirations of those who directed the two Services—might have been thrown into the sea also. They all thought the extra £20,000,000 that had been voted in the last Parliament a very large sum, but in this new Parliament they were increasing upon even that expenditure. But the one thing that pleased him in the Budget more than anything else was that the Chancellor of the Exchequer had endeavoured to lay the burden of this increased expenditure on the right shoulders, so that those who cried out for this expenditure would have to pay for it. His hon. Friend the Member for Haggerston, when the House was being urged to further enlarge the Navy, had shown that the working men organisations of the country unanimously, or almost unanimously, declared that they did not desire this increased expenditure on preparations for war. The cry for the expenditure had come from the classes, and he, for one, was heartily glad that it was the classes that would have to pay for it. The working classes would not mind additional taxation if it were for a purpose in which they took an interest— such as old - age pensions: but with regard to this proposal to spend more money on the fighting men and less on the industrial men, he was glad that the pockets that would be applied to were the pockets of the rich rather than the pockets of the poor. He was sure it would have a wholesome effect in restraining profligate expenditure in the future, when it was realised that those who cried out for the increased expenditure would have to supply the necessary money. Turning to the general subject of the Budget, he wished to say, as a farmer, that he thought the farmers had every reason to he satisfied with the Budget. The Chancellor of the Exchequer extended the incomes exempted altogether from Income Tax from £150 a year to £160 a year, and reduced the tax by that amount on incomes up to £400, and gave a reduction also on incomes of £500. He was sorry to say that few farmers would benefit from the reduction of the tax on salaries of £400 and £500 a year. He believed the great bulk of farmers had incomes so small that they would not now be legally liable for the tax at all, and if they looked sharply after their interests in that respect they would got out of paying Income Tax altogether. He thought it was a great thing, at a time when the expenditure of the country was going up, for this large and worthy class of people to find their taxation actually going down, and in a large number of cases completely taken off their shoulders. He hoped, however, that the Chancellor of the Exchequer would place the farmers of England, Ire-laud, and Scotland on the same footing with regard to the Income Tax by arranging that the English farmer should pay the tax not on half the rent, as at present, but on one-third the rent, like the farmers of Scotland and Ireland. That obviously would be only an equitable arrangement, and would hardly cost the Revenue any thing. He could also say, as a small land- owner, that on the whole the proposals in the Budget appeared to him to be just and satisfactory. The Chancellor of the Exchequer had been able, in a time of great financial pressure and difficulty, to extend to landowners what was positively a gift—to give them a remission under Schedule (A), with regard to which they had been charged hitherto on the gross instead of on the not income. It must be felt that it had not been an equitable arrangement that a class which derived its income from any source should have been compelled to pay the tax on an amount considerably in excess of what their income really was, and the Chancellor of the Exchequer, in setting the matter right, deserved the hearty thanks of the landowners. It would, however, be very agreeable to the landowners, and would come well within the equities of the case, if the right hon. Gentleman saw his way to extend the 10 per cent. reduction he was allowing them under Schedule (A) a little further. In the county in which he lived the Assessment Committee of the County Council had arranged that lands with houses and buildings on them should have an abatement on the assessment of 12Z½ per cent. That was only a reasonable abatement. It was said that the Lancashire County Council gave an abatement of less than 10 per cent. But Lancashire was a very rich county—a county largely in grass, and a county in which the buildings were not so numerous in proportion to the acreage as in the Eastern Counties. It was also a county of stone, so that most of the farm buildings were of stone, and not so liable to need frequent repairs as the buildings in the Eastern Counties, where there was little or no stone, and whore the buildings were, as a consequence, many of them of timber covered with thatch. He, therefore, respectfully submitted to the Chancellor of the Exchequer that it would be only equitable if he made the abatement a little more than 10 per cent., as that figure did not really represent the difference between the gross and the net income of the landlords. He now came to the most critical part of the Budget— that part which dealt with the Death Duties. The proposal in the Bill was that real property and personal property should be treated exactly alike, and he thought that proposal appealed to the sense of equality and justice in every man. The principal objection taken against the proposal was that real property bore local burdens far heavier in extent than personalty did. But he did not think it was a good plan to keep two wrong systems going in order that one might balance the other. It was desirable that the basis of taxation should be equitable, and he could conceive no reason why, if a man were fortunate enough to inherit an estate worth £20,000, he should pay less in Death Duties than a man who inherited personal property of the same value. If there were equal treatment between realty and personalty in the case of the Death Duties, it would strengthen the case of realty in fighting the battle of equal treatment in regard to the local rates. He thanked the Chancellor of the Exchequer for having resisted the pressure that had been brought to bear on him by some hon. Members amongst his own followers to have the grants in aid of local taxation withdrawn. While it was right and fair that in regard to the Death Duties realty and personalty should stand on the same equal footing, when local rates were dealt with the like equal treatment should also be meted out to the two different classes of property. It had been shown that personalty could not be rated in the same way as real property was rated, and until some better system could be devised the plan of making grants-in-aid out of the Imperial Exchequer went some way to redress the great inequality which would otherwise exist. He thanked the Chancellor of the Exchequer for resisting the pressure which had been put upon him to abolish these grants. He also thanked the right hon. Gentleman for resisting the pressure which had been put upon him to give a free breakfast table. He (Mr. Everett) should like a free breakfast table as much as anybody else, but at the time when expenditure was going up he thought it would have been an unwise thing to have sacrificed the income derived from the Tea Duty. The mass of the people, no doubt, paid quite a sufficient share of the taxes of this country as compared with the richer classes. The taxes upon tea, tobacco, and strong drink represented half the taxation of this country, and of course the great bulk of those taxes came out of the pockets of the poor. Still, if a free breakfast table had been given there would have been no tax at all that would have reached the large and increasing number of the working classes who do not smoke nor drink beer, wine, or spirits, but refreshed themselves with milder beverages. He was sure that these worthy citizens would not wish to be exempted from the payment of their fair share of taxation, and especially if resort was had to the taxes to provide old age pensions. Coming to another point, there was no doubt a difference between real property and personal property in regard to the convenience of payment. Where a man's property consisted of cash he had only to write a cheque for the duty, or, if the property consisted of shares, he could sell a portion without injuring the remainder. Where, however, a man inherited real property he would have much more difficulty in paying the duty. He thought the Chancellor of the Exchequer had fairly grappled with this not inconsiderable difficulty. The most obvious way for a man who inherited real property to procure money to pay the Death Duty with was to sell a portion of the property. It was not very easy, he knew, to sell agricultural land, but that very circumstance would make the charge imposed upon it a minimum charge, because there would be very little value to levy the duty upon. If the result of the proposal was to bring more land into the market, and to lead to the subdivision of estates which had recently been yearly growing larger and larger, he believed that great public benefit would ensue. Nothing had been more remarkable than the growth of the size of estates during the present century. In Suffolk, at the beginning of this century, the largest estate extended only to 6,000 or 7,000 acres, whilst now there were two or three in the county which ran up to something like 30,000 acres. The owner of one of these large estates died not long ago, leaving £300,000 to be expended on further increasing the size of the property. In connection with another estate which was close by, £200,000 had been left to be used also in enlarging it. It appeared to him that if that kind of thing went on we were not very far off the time when one man would own a whole county, and no one else would have perfect liberty and freedom within the area of that county. Under these circum- stances, he did not think it would be anything but a national benefit if the operation of this Bill were to put more land into the market. The Chancellor of the Exchequer provided for cases where sales would be inexpedient by permitting an annual payment extending over eight years to take the place of the payment of a lump sum, in which case interest would be charged upon the unpaid portion of the duty. There was also the alternative of a, mortgage, but no one would wish to see the mortgage system extended under this Bill, and the annual payment appeared to be the soundest method of paying where cash was not immediately available. He thought at first when be heard the proposal that the payment of interest upon the unpaid instalments would not be fair, but he confessed that, after having looked round it, he thought the Chancellor of the Exchequer was right in his proposal. In the end a man inheriting real property would not pay more, and probably he would hardly pay as much as if he received the inheritance in personalty and paid down a lump sum at once. On the whole, he felt quite in a congratulatory mood with regard to this Bill. He thought the Chancellor of the Exchequer had made a just and fair proposal, and that he had put the burden upon the right shoulders. He did hope that the country would begin to realise that the enormous growth of expenditure, and especially that part of it which related to armaments, must be stayed. How much better it would be for a country in the happy position of this Island to suggest to the other countries of Europe mutual disarmament to some extent! The Seconder of the Amendment (Mr. Bonsor) had tried to frighten the farmers with the idea that the price of barley would be decreased still further by the imposition of the additional 6d. on beer. In order to prove that the transference of the duty from malt to beer had had such an effect the hon. Gentleman had quoted figures to show that there had been a very great fall in the price of barley since the transfer was made. If, however, the hon. Gentleman had also given the prices of wool and of meat and of live stock at the two periods he had mentioned he would have found that they had fallen greatly too, and he would also have discovered that there had been a less fall in the price of barley than in that of any other considerable agricultural product. Last year in the Eastern Counties those who were fortunate enough to get good barley had made considerably more per sack of their barley than of their wheat. He had spent a great deal of time and trouble in trying to get the Malt Tax removed. Certainly he had overlooked at that time the fact that the freeing of the mash tub was a necessary part of the change. The effect of the free mash tub had been no doubt to introduce into the manufacture of beer materials which could not have been used under the old Malt Tax, and to that extent the price of barley might have been prejudiced. Still, seeing that barley had gone down less than other products, he did not think that those who advocated the abolition of the Malt Tax had anything to reproach themselves with. He thought that the Budget would conduce to the fame of the Chancellor of the Exchequer, and that it would be accepted with gratitude by the people of this country, and not least by the owners and occupiers of land.

MR. W. LONG (Liverpool, West Derby)

said, the hon. Gentleman who had just sat down had congratulated the agricultural interest upon the fact that the Chancellor of the Exchequer had upheld the system of grants-in-aid. The Chancellor of the Exchequer himself could hardly join in this congratulation, because grants-in-aid had more than once been the subject of denunciation on the part of the Chancellor of the Exchequer as well as of the Secretary for India (Mr. H. II. Fowler). The hon. Gentleman had also said that he rejoiced at the form the Chancellor of the Exchequer's proposals had taken because they would place upon the shoulders of those who had demanded large naval and military armaments the cost of such armaments. The Chancellor of the Exchequer would hardly agree with the hon. Gentleman on that point either, because early this Session the right hon. Gentleman had said that the representatives of the landed interest were not prepared to bear their fair share of the cost of the Army and Navy. He (Mr. Long) could assure the hon. Gentleman that if the Government world only place their burdens fairly upon land according to the ability of the land to bear them they would not find that either the owner or the occupier of land would endeavour to avoid the burden. In his (Mr. Long's) opinion, the distribution of burdens by the Chancellor of the Exchequer had been inequitable and unjust, whilst the burden which would be thrown upon land would be a very severe one, and one that would go far to complete the ruin which was now rapidly overtaking the agricultural interest. The right hon. Gentleman, when he detailed the advantages which had been conferred upon occupiers and tenant farmers, had forgotten altogether that the late Chancellor of the Exchequer (Mr. Goschen) conferred upon the farmers the greatest privilege ever extended to them by allowing them to claim from payment of Income Tax under Schedule (B), and thereby to escape payment, when they could prove they had made no profit. He believed that if this advantage had been made larger use of, and if the careful keeping of accounts had been more general throughout the country, much greater benefit would have been derived from the use of the privilege than appeared to have been obtained from it. It would be convenient to consider the present Budget first from the point of view whether the new proposals would be workable and equitable, and, secondly, from the point of view whether the agricultural laud of the country, on which it was sought to place an additional burden, was or was not in a position to bear that burden. The most remarkable characteristic of the speech of the hon. Gentleman who had just sat down was that, with the exception of his concluding remarks about barley, he did not attempt to meet any one of the powerfully - stated cases produced by the hon. Member for the Thirsk Division or the hon. Member for the Wimbledon Division in the numerous instances which they had given of the incidence that the proposals of this Budget would have on the lauded interest. The hon. Member for Thirsk, in one of the most admirable speeches ever made in the House in defence of the landed interest, produced case after case, which he argued out so far as he was able to do so, upon the proposals as they appeared before the House. The hon. Member met these detailed and exhaustively put cases by one consoling declaration—he took comfort in the fact that as land in many parts of the country, as he, and other practical agriculturists in the House knew, was of little value, therefore the tax would realise very little. If that were true, what was to become of the Chancellor of the Exchequer's proposals for raising extra money by these means? To one question they had tried to get an answer from the Chancellor of the Exchequer, but the right hon. Gentleman told them he was unable or unwilling to answer. [Sir W. HARCOURT: No.] He was not accusing the right hon. Gentleman of want of courtesy. What he meant was that they were constantly told that the change which would be made in taxation would depend upon the system of valuation. [Sir W. HARCOURT:I gave the figures.] The right hon. Gentleman had said that night across the Table, in answer to a question, that the figures would depend upon the method in which the valuation was made.

SIR W. HARCOURT

I have given the figures of what I believe will be the amount yielded by agricultural laud generally. The figures I have given are the result of the best calculation we can make of what the general result will be. I have not been able to take individual cases.

MR. W. LONG

said, he was very much obliged to the right hon. Gentleman for his interruption. It was precisely the difficulty in which they stood that the sum ultimately payable to the State was of necessity dependent upon the value placed on the land in individual instances. The hon. Gentleman who had just spoken found consolation in the fact that land would be of little value in a great many cases. He (Mr. Long) would endeavour, in the short time he should keep the attention of the House, to show what appeared to him to be at all events possible difficulties in the way of the application of the principles of this measure and serious obstacles from a practical point of view. The Chancellor of the Exchequer had more than once told the House that he did not seek to do any permanent injury to land. He, for one, earnestly accepted that assurance in the spirit in which it was given. He did not desire to accuse the Chancellor of the Exchequer of any intentional wish to injure the landed classes of the country. The right hon. Gentleman reminded the House himself that he was closely connected with the land-owning class, and everybody knew that the name he bore was honoured among the land-owning class of the country. Intention, however, was one thing, and effect another, and he could not help thinking that the proposals of the right hon. Gentleman would do a lasting injury to the landed interest. The Chancellor of the Exchequer made his proposals, and how were they supported by hon. Members on his own side of the House? The Member for Northampton spoke in the country and declared that the proposals of the Government were going to have the effect of breaking up the large estates; and the right hon. Baronet the Member for the Forest of Dean, in the first Debate in that House on the subject, said that if landed estates could not realise the necessary money without sale, he thought it was better they should be sold. Both the hon. Member for Northampton and the right hon. Baronet the Member for the Forest of Dean put the matter in a plain and straightforward way. They did not deny they were opposed to the existing laud system, and would be glad if one of the results of the Bill would be in some degree to break it up. The hon. Member for Northampton declared he thought it was desirable that many of those estates should be broken up, and that their succession from father to son should not be longer continued. If that was what was intended the Government should proceed in an open manner against the land of the country and deal with it in such a way as to secure this breaking up, and not proceed by means of bleeding the land to death, which would not have the effect of breaking up the large estates into small holdings. Under the plan of the right hon. Gentleman sums between three and four times more than were now payable would be paid, and would have to be got either by sale of the land or by mortgage. Having told the House that this money could be got by the sale of land the right hon. Gentleman immediately demolished his own argument by proceeding to remind the House that in the vast number of cases it was impossible to sell land at a price which would bring in the money required. The right hon. Gentleman no doubt spoke in his double capacity as an owner and occupier of laud. He could tell them that a great many of those who spoke on behalf not of the owners, but of the occupying tenant farmers did not share the optimistic views of the right hon. Gentleman, and did themselves believe that these proposals were injurious to the land and to the interests of owners and occupiers, and of cultivation also. He was not going, after the speech of the hon. Member for Thirsk, to trouble the House with concrete cases. He had no doubt that, although the hon. Gentleman opposite failed to deal with them, some other Member would give attention to them, and either admit their accuracy and endeavour to justify the policy which the Chancellor of the Exchequer was pursuing, or, if not able to do that, show where his hon. Friend was in error, and in what respect he had overestimated the effect of these proposals on the land. He did not believe that the majority of hon. Members sitting opposite desired to see the landed estates of this country broken up, unless, indeed, they were prepared with an alternative policy. He would take one case only, the history of which had been much in the possession of the public recently—the case of the great Savernake property belonging to the various Lords Ailesbury. Under ordinary circumstances he did not say that that property could not bear the burden of this tax; but he asked the House to realise what was the actual condition of that estate. It had passed through an unfortunate time. It was not for him to say anything as to the causes which had brought it into its present state, or the character of the dead man who was the last possessor. At all events, that property had now passed into the hands of one who was at one time an honoured Member of that House, who would bring to bear upon its management and administration not only experience and capacity, but an earnest, solid determination to sacrifice himself in every way he possibly could in order to rehabilitate the estate which had passed to him. He ventured to say that if the present owner of the Savernake property were confronted with the difficulty of having to raise on mortgage the considerable sum of money which might be demanded under the wide clauses of this Bill— which left the method of valuation so uncertain, and which it would be impossible to pay out of income, but which must be paid either by mortgage or sale—he would find it impossible to meet the additional burden. And if some part of the estate was to be sold to pay the Death Duty, who was to say what the portion was to be? Was it to be left to the local surveyor, or decided by the Commissioners? Who was to decide in the case of a large property like this, the vast proportion of which was practically unsaleable, unless they got, as it was not likely they would gel, some enormously rich man ready to come down and make an extraordinary offer for the whole estate? The present owner had a reasonable prospect of recovering the estate and placing it on sound ground again, and were they going to decline to give him the opportunity and compel him to further mortgage the property, so making the position of the successor worse than that of the present owner? They were told there was to be power of appeal; that the successor was to be called upon to pay this sum when it had been arrived at, and if he objected he might appeal. A very generous proposal this ! Under what circumstances was he to appeal? He might appeal to a higher Court after he had paid the total amount of the claim. He (Mr. Long) ventured to say that, as regarded a great majority of similar properties to this, it would be a mere farce to give no power of appeal more efficacious and simple. The hon. Member for Thirsk touched upon another very important point which had been mentioned more than once, but to which he thought sufficient attention had not been given—that was, who was to pay the very large cost of valuing these estates? The principle, as he understood it, which underlay the Chancellor of the Exchequor's proposals was that real and personal property should be put absolutely on the same basis. He maintained that, altogether apart from the portion that the land bore of the rates of the country, the right hon. Gentleman was attempting what was practically impossible. The Chancellor of the Exchequer told them that in many cases in connection with the existing Estate Duty the valuation was carried out in much the same way as was proposed under this Bill. The right hon. Gentleman must, however, admit that his proposals involved a gigantic change. Upon the mode of valuation would depend the amount of increased duty that was to be paid. He maintained that it was almost impossible to find landed properties in this country which were occupied or owned on equal or similar conditions, and he did not understand how this valuation was to be made in the careful and exhaustive way in which it ought to be made, and how the actual value was to be arrived at. If they were going to carry out this proceeding by the careful and exhaustive method of inquiry and examination now adopted, all he could say was that his hon. Friend behind him had not in the smallest degree exaggerated the heavy cost that would have to be paid for such valuation by competent valuers. He would remind the House that when the local surveyor or valuer was called upon to do work of this kind he not only had to make a professional valuation as to what the property was then worth, but in the case of laud he had to run what he might call a considerable professional risk in saying what would be the value of that laud within a reasonable period; and valuers would tell them there was nothing so difficult, and no more anxious task, than that which they were called upon to perform when they were asked to value estates under the present extraordinarily complicated condition of the land in this country. The Chancellor of the Exchequer had also told them that in arriving at the value of these estates the valuer would be called upon to value as between a willing purchaser and a willing seller in the open market. [Sir W. HARCOURT dissented.] That was what he understood the right hon. Gentleman to say when he questioned him upon the matter. [Sir W. HARCOURT: No.] He had done his best to follow this matter from the first night that the Chancellor of the Exchequer introduced it, and he had been present on every occasion when there had been discussion upon it or questions asked and answered, and had endeavoured to follow the right hon. Gentleman's explanations as to what the provisions in this respect were to be. If that was not to be the basis, then he confessed the difficulties in which they found themselves were much greater than appeared. He certainly thought they were to take it that the valuer would put upon the property such a value as he would recommend a willing purchaser to give to a willing seller, and then, having arrived at the principal value of the estate for the purpose of these Death Duties, there would be deducted there from everything that could be considered a fair charge upon the estate; in other words, that the mortgages were to be deducted. He imagined it would be impossible to deduct from the capital value any charge in regard to upkeep of the property. [Sir W. HAR-COCRT: That is done now.] It was very difficult to find out what was the cost of the up-keep of an estate. Let them take the practical case of a man succeeding to a property, whose value was estimated at several hundred thousand pounds. He would be called upon to pay a very large sum yearly in repayment of capital and interest in respect of work done for the improvement of the property, and he should be glad if the Chancellor of the Exchequer would tell them whether he would be entitled to deduct the capitalised value of that annual payment from the principal value, and whether he would be entitled to say that although the estate had a net value of £200,000 or £300,000 that having to spend £2,000 or £3,000 a year that should be deducted from the amount. That was a very important question to owners of lauded property in this country. It was a difficulty which had puzzled wiser heads than his, and no solution had yet been arrived at.

SIR. W. HARCOURT

Does the hon. Gentleman moan money borrowed— for drainage, for instance?

MR. W. LONG

said, that drainage was a case in point. The Chancellor of the Exchequer and many hon. Members knew that 25 or 30 years ago it was generally believed that one of the obstacles in the way of agricultural prosperity was that insufficient money had been spent on these properties by their owners, and the owners of that time determined to get rid of that difficulty, and borrowed large sums of money which now constituted heavy burdens, which had to be met annually. He wanted to know whether on succeeding to an estate the tenant-for-life would be entitled to deduct from the capital value of the estate the amount of the money he had annually to repay;? He understood that perhaps in a few cases the expenditure of this money had produced a return, but unfortunately in the vast number of instances the tenants were paying large sums annually without any return, the rents being lower, and the outlay having been wasted for the simple reason that what was thought then to be most advantageous to the agricultural interest in the way of a wise expenditure of money, had turned out to be delusive, and left the occupier in a worse condition than if none of these improvements had been made. Therefore, he would point out to the Chancellor of the Exchequer that if the successor was to be called upon to pay this tax, regardless of the fact that he might have for the next 20 years to pay £2,000 or £3,000 for so-called improvements of the property, which had left him so much poorer and the property no better, a great hardship would be inflicted. The Chancellor of the Exchequer had said, and some hon. Gentlemen behind him repeated, that the difficulty of this payment would be met either by sale of land, or mortgage. He wanted to put another practical difficulty before the Chancellor of the Exchequer. [Sir W. HARCOURT: It can be paid by instalments.] He was sure hon. Gentlemen on both sides of the House must be able to recall numerous instances where facts had occurred in the way in which he was about to briefly explain. Was it not the fact that in regard to the great majority of landed estates in this country, under the law as it stood now, when the owner succeeded, he was compelled sometimes for two or three years, and even for a longer period of time, largely to reduce the expenditure of his predecessor, to give up a good deal of the things that his predecessor was in the habit of doing, and to carefully economise in order to pay the Death Duties as they existed at the present time? That was a fact which everybody must know who took note of what was going on around them. If that was the case now, how would it be in the future, when the Death Duties were increased three or four times? Not only must a man economise as at present, but he might have to leave his home, or realise the capital value, in order to discharge the mortgage. There were many inequalities and injustices that would be inflicted by this Bill. It appeared to be the object of the Chancellor of the Exchequer, and of a good many other people who had talked and written upon this subject, to throw the burden of taxation on those who were rich and well able to pay. He told the right hon. Gentleman and his friends, however, that they were not going to effect that object by this Budget. He had heard—the unfortunate landowners knew nothing of it but what they heard —that there were men in this country who possessed more than £1,000,000; some of them £2,000,000 or £3,000,000; and they had heard that some of them sat in that House on the Benches opposite. That might explain why the right hon. Gentleman drew the line at £1,000,000. He could understand the Chancellor of the Exchequer so graduating the Income Tax that these very rich persons should pay more towards the burden of taxation, instead of endeavouring to catch the unfortunate landowners. He did not think it could be maintained that laud did not already pay its fair share, but if it did not the Chancellor of the Exchequer should have gone boldly in for a system of graduated duties which would have caught these extremely rich men. He would like to put to the Chancellor of the Exchequer a case which would show some of the inequalities of the system. A landowner who had property worth £10,000, and had one child, as he understood, that child would have a Death Duty to pay of £300. In another case, where the property was worth £100,000, if there were 10 children, the Death Duty payable would be at the rate of £600 for each child.

SIR W. HARCOURT

said, the duty was payable on the whole estate without regard to the number of children amongst whom it was divided.

MR. W. LONG

said, the right hon. Gentleman was proposing grave changes in the Death Duties of the country, and he thought it was advisable, while he was doing so, that he should redress some inequalities which appeared to him to be unjust. How could the right hon. Gentleman defend his position in adding very largely to the Death Duties incidental to the succession to real estate, and, at the same time, introducing into his rearrangement existing anomalies and injustices? It practically came to this — that although the right hon. Gentleman called it a Death Duty, he was laying a burden not upon the original owner of the property, but upon the unfortunate successors who might be called upon to pay, not in proportion as they succeeded, but in proportion to the wealth left behind him by the person who had owned the property. That was an injustice which the Chancellor of the Exchequer might well have remedied, and it would have been something to put before them as consolation for the inequalities of this Bill. He wanted to say one word with reference to some remarks which fell from the right hon. Gentleman the Secretary of State for India. He was not going to discuss with the right hon. Gentleman the question of hereditary burdens. They had heard a good deal about them, and if they once got into that discussion no one knew better than he did that it would be an involved and long one. He said, when it came to hereditary burdens, that he thought they on that side of the House who contended in the interest of real estates could prove, where there was any hereditary transmissions of burdens at all, it did not exist so much in the case of personal as of real property. Their contention was that real estate bore an unfair share of taxation. The Secretary for India quoted from a Return prepared by one of the ablest officials in the Public Service, which showed, in the first instance, that the relief which had recently been given to local taxation had been plainly to the relief of the rural rather than the urban ratepayers—for this reason, that they held, as they held now, that the rural part of the land of this country was less able to pay the burden of taxation now than it used to be. They felt, in the second place, that the rural ratepayer got less in the way of return for his rates than the urban ratepayer. He did not care whether they took the case of police or highway rates or whatever was the expenditure out of the rates, large or small, the urban ratepayer got a direct benefit from the money spent which was altogether out of proportion to any advantage derived by the rural ratepayer. He-would go further, and say that not only did the urban ratepayer get a benefit much in excess of anything obtained by the rural ratepayer, but in a great many cases, and particularly in regard to police rates, the rural ratepayer was burdened with the cost of maintaining police, a large proportion of the services of whom went almost solely to the towns. The hon. Gentleman the Member for the Wood bridge Division had told them that the question of rates was a landowners' question, and not a farmers' question, and that if they granted money in aid of rates it went into the hands of the owner, and not of the farmer. He held in his hand the Report of a large gathering of farmers held in his own county not long ago which contained a most excellent paper, which was read by a well-known tenant farmer, a man of exceptional ability, and well known in the neighbourhood. What he said was heartily endorsed by many other farmers. Throughout the whole of that address, Mr. George Blake, a well-known occupying tenant-farmer, stated plainly that this question was not an owners' question, but that it was the question of the occupier and the labourer, and that it would be difficult to find an owner who had realised any benefits from the grants in aid. The right hon. Gentleman the Secretary for India made a calculation which brought the rates of the country down to something a little over 3s. in the £1, and he told them of a remark made by Mr. Howard, a friend of his, that even if all this large sum were knocked off, it would be of very little use to the agriculturist. He did not know of what time Mr. Howard spoke, but probably it was some few years ago when the condition of land and the conditions of the burdens of the country were very different to what they were now; but the right hon. Gentleman himself would admit that whore the rent amounted to no larger a sum than 5s. or 6s. an acre, out of which 2s. 6d. or 3s. had to be paid in tithes, and out of which the outgoings of the estate had also to be paid, an extra burden of 3s. or 3s. 6d. per acre for rates was a very considerable burden, and one well worth the attention of the tenant-farmer and the landlord. There were thousands and thousands of acres of land where the rent did not exceed 5s. 6d. or 6s. an acre, and there were cases in which land had gone so low as 2s. 6d. or 3s. Was anyone going to say that a large reduction would not be of considerable benefit where land had fallen to so low a value as that? Mr. Blake, in his paper, urged this from another point of view. He said it might be suggested that 1s. or 2s. per acre in relief of taxation would not ameliorate their condition, but his reply to that was that the very pursuit of their calling depended upon small economies of that sort. It was no use pooh-poohing small recommendations. Although the revision of the taxation imposed on laud would not bring back prosperity or might not amount to a large measure of relief, at all events it would bring some relief which would be appreciated by every agriculturist, whether tenant-farmer, owner, or labourer. It was unfair in times like this not only to refuse relief but to actually throw increased burdens on the land. Hon. Gentlemen opposite who supported the policy of the Budget Bill, thinking it would break up the large estates, were entirely mistaken and misguided. It would not break up the large estates. [Cheers.] But why? Because, in the main, they were in present circumstances absolutely unsaleable, and no one would saddle himself with the responsibilities and difficulties connected with the ownership of land in such precarious times. In his opinion, the Death Duties payable in respect of the majority of estates were heavy enough. In many cases a man succeeding to an estate in those days had to practice rigorous economy on account of the Death Duties and other charges, but the necessity for that economy would henceforth be doubled and trebled and quadrupled. And who was it that would feel most the rigid economies which lauded proprietors would have to practice if increased burdens were forced upon them? It would not be so much the man who would no longer have a horse to ride, or the groom who would no longer have his weekly wages? The Chancellor of the Exchequer might have laid the burden on shoulders which really would be able to bear it instead of on the land of the country, which was unable to bear it either with justice to itself or to the numerous classes dependent upon the land.

MR. C. HOBHOUSE (Wilts, Devizes)

said, he did not propose to go into the question of whether the amount which would be contributed to the Imperial Revenue through the Death Duties should fall upon real or personal estate. He did not consider the question at all arguable. He would confine himself to the present proposals of the Government. Hon. Gentlemen opposite, who claimed to represent the agricultural interest, spoke from one point of view and one only, and that was the landlords'. They were the rent-receiving and not the rent-paying part of the community. According to a Return of the amount of land farmed by landowners in this country, he found that out of some three-quarters of a million of occupiers, only 14 per cent. owned the land which they farmed, and for that reason, if for no other, it might be said that hon. Gentlemen as a whole who sat in this House representing the agricultural community only represented the land-owning class. It was remarkable that while great objection had been taken to the increased duties payable by land, none at all had been taken to the increased duties payable by personality. They all lamented the present depreciation in agriculture, but trade was depressed as well as agriculture; therefore, if additional taxes had to be raised it was fair that both realty and personality should bear their just proportion. What were the objections taken by the hon. and learned Gentleman opposite to increased charges on the land? They were partly sentimental and partly practical. The sentimental part of the case had been put before the House by the right hon. Gentleman the Member for Sleaford and the hon. Member who had just sat down, whilst the practical part had been more particularly dealt with by the hon. Member for Thirsk. The sentimental objection was that if increased charges were laid upon the land the land would have to be let to commercial gentlemen. That argument came strangely from the Party who only three or four days ago boasted that they were supported by the commercial part of the community; and it was to him an extraordinary thing that hon. Gentlemen opposite should object in times of agricultural depression to commercial and business men of wealth and activity going into the country and employing their wealth and activity for the benefit of the country side. It was said that acts of charity would cease. Well, he did not think so badly of the commercial classes as to believe that if they hired or purchased places in the country they would immediately cut off all the charities of their agricultural predecessors. Such a sneer at the new men seemed to him to be in curious taste from the hon. Members opposite, when they considered that the greatest part of the wealth of the country had been built up by the commercial classes. These taunts and fears were not new things. They were always uttered on these occasions. The hon. Member for the West Derby Division warned the House that under the new burdens upon landowners charities would cease.

MR. W. LONG

said, he had said nothing about charities, although they had been mentioned by someone else. His experience was that where landlords were driven away they always continued their charities.

MR. C. HOBHOUSE

said, the hon. Member had, at any rate, said that wages would cease, because grooms would be driven out of employment. But grooming a horse was not the only employment open to a man. and if some of these extensive estates were broken up and sold in small portions it would be open to a man to cultivate some of the land for his own benefit instead of grooming a horse for his master's benefit. A concrete example had been given by the right hon. Gentleman the Member for Sleaford. He had mentioned an estate of £500,000 in value bringing in a yearly rental of £14,000, with a mortgage of £300,000 on it, the interest payable on which was £12,000, the net income of the owner being £2,000.

MR. CHAPLIN

That case was a quotation from the right hon. Gentleman the Member for Midlothian. It was not my case.

MR.C. HOBHOUSE

said, he was sorry if he had made a mistake. He took the statement from The Times the other day, and regretted if he had not taken it down correctly. What would be the charge on an estate so situated. The owner would not have to pay on the whole value, but only on the £200,000, or the unmortgaged portion. The charge at 6½ per cent. would be £13,000. It would be open to the owner to pay the £13,000 in two ways. He could do it either in eight instalments of £1,650 a year, or in one lump sum. If the former method were adopted the owner's income would be reduced from £2,000 a year to £350. And supposing it was, the result would most likely be beneficial. The owner would most likely be turned into a useful citizen—a producer rather than a consumer of wealth. If he were reduced to that necessity there would not be a great deal to be sorry for. But supposing the owner paid the sum of £13,000 down in one lump sum. He would, perhaps, have to sell an outlying portion of the estate, and if he did that and some of the mort gaged superabundant acres were let loose and acquired by the rural population, no great hardship would be done either to the individual or the State. Some one had said that great estates were a buffer between labourers and destitution: but the district he represented consisted entirely of large estates, and he was sorry to say that during the past winter in many parts of that district the labourers' wages had fallen as low as 8s. a week. If the large estates there had stood between the labourer and destitution it was an act for which the labourers were not very grateful. He confessed that if it was possible to break up estates by means of increasing the Death Duties he should not look forward with regret or dread to the change when it took place. It was not small quantities of land which would be heavily taxed under the proposal of the Government, but large aggregations of land—-the keeping together of land in large estates. He thanked the Chancellor of the Exchequer for the remissions of taxation he had given them. They were remissions which would be sensibly felt, and would in great measure make up for the increased duties which, undoubtedly, land would have to pay. The only question was how much would the duties amount to, and how far they ought to be imposed on laud. He believed that in the first case they would be found to be much less than was imagined, and in the second case it was only fair that land should pay some part of the increased expenses for defensive purposes. It had been said that the increased charges on land would be very heavy, and that the great estates would have to pay fourfold. He would give the figures, which he had received from an Insurance Company, with regard to three typical estates—two belonging to landed gentry and one to the working man. The first was the case of an estate worth just under £10,000, with a rental of £300. Under the old scale the Succession Duty would have amounted to £63, and the Estate Duty to £100. Under the Bill there would be one simple charge of 4 per cent., amounting to £400, so that the difference against the present proprietor would be £237. At the age of 30 he could insure for that sum by an annual payment of £3 6s. 8d., and as he would receive a commission on his Income Tax of 30 per cent., or £1 per annum, the total annual charge he would have to pay in order to meet the new Death Duties would be something like 15s. per cent. of his income. His next case was that of an estate worth just over £100,000, and bringing in a rental of £3,000. The old duty would have been £1,500, and the new charge would be £5,500. The owner would receive a remission of Income Tax amounting to £12, and in order to insure himself against the difference between the old and the new duty he would, at the age of 44, have to pay £99, so that the total charge for the new duty would be 3¼ per cent. on his annual income. Then he would take the case of a working man who lived in his own house worth £300. The Death Duty on that property would be £3; but he would receive a remission of Income Tax amounting to 8s. a year, so that in seven years he would save the amount of the duty, and therefore in his case there would be no extra charge. If these figures were correct it was a great exaggeration to say, as Lord Salisbury had said at Trowbridge on Thursday, that the proposals of the Chancellor of the Exchequer would amount to a charge of 10 per cent. on land. The Chancellor of the Exchequer had done something for the smaller taxpayers by giving them a rebate on the Income Tax, but there was another thing he might do. He might reduce the scale upon which the farms of English farmers were valued. He had not been able to find out how this would work, but he was sure that if the right hon. Gentleman would adopt the suggestion he would earn the thanks of the members of a struggling community.

* MR. BIDDULPH (Herefordshire, Ross)

wished to appeal to the Chancellor of the Exchequer for justice on behalf of the landowners. He had already given them some relief in the form of rebate on the Income Tax, but he (Mr. Biddulph) failed to see why they should continue to be charged under Schedule (A) and on woods under Schedule (B). The landowners only made profit under Schedule (A), and if the right hon. Gentleman could see his way to relieving them under Schedule (B) they would be very grateful to him for it.

MR. USBORNE (Essex, Chelmsford)

wished to say a word or two in regard to the tax on beer. He desired to show that there were two sides to the question, and that the arguments used in favour of the imposition of the tax were not so strong as they had been represented to be. The Chancellor of the Exchequer had said it was an indirect tax on the public, and was to be levied to counterbalance the direct taxes proposed in the Budget, that it was a direct tax on the wealthy brewers, that the profits of the trade were so great that they could afford to pay the impost, and that the extra tax ought not to be felt by the brewers owing to the price of barley. It was suggested that a publican in England might recoup himself the amount of the tax on spirits by diluting them, but if a publican diluted spirits below a certain point he would be liable to a prosecution and conviction.

SIR W. HARCOURT

Not if he announces the fact that they are diluted.

MR. USBORNE

said, he was quite aware the right hon. Gentleman had said he had in his mind a circular issued by Messrs. Gilbey, which advertised whisky at 52 under proof, but that was a very different matter. He understood his own business, but he did not profess to understand that of Messrs. Gilbey. From his great experience he was confident that it would never do to try and get back the extra 6d. by reducing the spirits. Then he complained that the abolition of the Malt Tax was a great grievance; the new Beer Duty was not a duty on beer at all, but was a duty on barley, and for that reason was a great and grievous burden upon the farmers of England.

SIR W. HARCOURT

What I said was that the Malt Duty was removed at the earnest request of the farmers; that year after year their great grievance was the existence of the tax.

MR. USBORNE

said, that the majority of the farmers who agitated for the abolition of the tax thought they would get the removal of the tax in toto from the barley. There were a number of farmers, the more intelligent, who did not agitate or expect that, but whatever the farmers expected they did not expect that getting off a 22s. tax would mean the putting on of another tax of 24s., and now it was proposed to make the tax 27s. It was said that the tax was too small in amount to be split up into fractions, and that being so it was in the power of the brewers to recoup themselves by pumping more water into the copper. The right hon. Gentleman had said that if the brewers would water their profits instead of the beer everyone would be satisfied, and all would go right. He would like to ask the right hon. Gentleman if he had considered what the profit amounted to that had to be watered? A country brewer would not turn out more than 10,000 barrels of beer in a year, which was only what a London brewer sent out in a day, and, therefore, the whole profits of the business of a country brewer, including the rent received for the houses, would not, with a tax of 6d. per barrel, amount to more than 6 per cent. on the whole income of the business. And yet the right hon. Gentleman considered that the profit upon beer was so great that it could well afford to bear the weight of the tax. The fact was that the profit on beer was considerably less than upon any other article sold to the trade. When an article was sold at a low rate, the sale must be enormous in order that there should be any profit at all. For instance, what was the percentage of profit upon newspapers. He had inquired. He had made inquiries that morning, and found that 13 papers were sold to the retailers for 9d., so that for his 9d. the retailer got 1s. 1d. The profit on matches was the same, but what was the profit on soda water, for which the Chancellor of the Exchequer had lately expressed a preference? The right hon. Gentleman had stated that the profits on beer and spirits in various parts of London was 100 per cent. He (Mr. Usborne) had no hesitation in saying that statement was most misleading-—not on the part of the right hon. Gentleman, but that the information upon which he founded his statement must have been misleading; and he would explain how it might have arisen. He had been to a meeting of the trade that afternoon, when it was shown that the profits upon both beer and spirits were about 25 per cent. But how had the right hon. Gentleman arrived at the remarkable figures he had given them? If they took rum, that was a spirit on which it was impossible for a retailer to get a profit exceeding 25 per cent. The right hon. Gentleman had treated exceptional cases. He (Mr. Usborne) was told that the gentleman who gave the information to the right hon. Gentleman stated that the profit in Regent Street was about 176 per cent on brandy, and he made it out in this way: He went into the Hotel Continental and ordered a small glass of brandy, for which he paid 2s. 6d. That was purely an exceptional transaction, and an exceptional transaction could be shown to produce a profit of any percentage they liked. In the same way, if a man in the East End of London asked for 6d. of the best special and a split soda, he paid a price that yielded a large gross profit; but if they asked what profit was got out of 4d. ale they would find it was very small.

SIR W. HARCOURT

The price that my informant paid was 4d., and the profit on that was 213.4 per cent.

MR. USBORNE

said, the right hon. Gentleman would not get any one in the trade to accept that as true. The right hon. Gentleman quoted his own case, going into a railway refreshment room and buying a glass of bitter ale for 2d., and the right hon. Gentleman appealed to him and said he would admit that such ale could be bought for 48s. a barrel, consequently there was a profit of 96 per cent. on the transaction. Admitting, for the sake of argument, it was 100 per cent., was 1d. on the transaction a very large profit to be made under the circumstances? But then they must take into account the enormous expense that the contractor who sold the beer was put to. He could assure the House that supposing 1d. was the gross profit in the first instance, the expenses the contractor was put to would reduce his profit to a halfpenny; yet the Chancellor of the Exchequer considered this was a trade that required to be further taxed, because when he went into a first-class refreshment room the fortunate individual who had a transaction had made a halfpenny out of it. He would really recommend the Chancellor of the Exchequer to look a little more closely into the profits that were made by the trade. If the right hon. Gentleman had bought soda water instead of a glass of ale, at the lowest price he would have paid 3d. for it.

SIR W. HARCOURT

What I said was that the retailer made 48s.profit on a barrel of beer; that a man who buys a barrel of beer at 48s. sells it in point of fact for 96s.

MR. USBORNE

quite admitted that that was so, but he took it that out of the 48s. the net profit was not more than a halfpenny per glass on the transaction. But supposing the right hon. Gentleman bought, instead of the beer, a glass of soda water, let him point out what the gross profit of that would be. He had written to a manufacturer of soda water, and the reply he received was that the plant of the firm could turn out 1,000 dozens of soda water, which gave three grains of soda to each bottle, and nothing else beside water was put in. To make the required amount of gas they used 56 lbs. of whiting with the necessary proportion of sulphuric acid, bringing the total cost for materials up to 7s. for 1,000 dozens of soda water, manufacturing charges £10. The selling price of that to the trade customers was £41 13?. 4d., and the price obtained from the public at 2d. per bottle was £100; therefore, if they charged 3d. per bottle there would be a profit of £150 upon a gross cost of 7s. Then there was the question of the fall that had taken place in the price of barley, which the Chancellor of the Exchequer considered made the time favourable for increasing the tax upon barley. He could assure the House that the fall in the price of barley, and the consequent fall in other farm produce, had been for the large brewers the most disastrous thing that had occurred for the last 10 years. The net profits of the country brewer had during these 10 years fallen at least 50 per cent. He should only be too glad if barley was 40s. a quarter instead of 30s. a quarter, because then the labourers would have some money to spend, and the country brewers would reap some advantage from the increased prosperity. Speaking for himself, and he believed for all small country brewers, he wished to say that if there was to be heavy taxation they wished to bear it pro rata with their richer brethren; but Conservative brewers—and most brewers were Conservatives—had a most violent objection to graduated taxation, and they believed it was a tax upon thrift and enterprise.

* MR. SPICER (Monmouth, &c.)

said, he would not cuter into a discussion with the Member who had just spoken, but he had ventured to intrude for a few moments on the time of the House because of the speech delivered by the hon. Member for the West Derby Division of Liverpool (Mr. W. Long). The hon. Member speaking from the Front Opposition Bench, and as a landowner, seemed to look at the matter of the Death Duties from the standpoint of the agricultural interests, and even in that took a one sided view, for, after all, what was the hon. Member's contention? The hon. Member blamed the action of the Chancellor of the Exchequer for imposing an increase of Death Duties on these landed estates, and gave them as an example the great Savernake estate, which, the hon. Member said, had been before the public during the last few months, or even years. The argument of the hon. Member was, that if an estate, which had been managed either well or ill, was left to an individual with insufficient income to keep it up it was a hardship that he should be called on either to sell a portion of that estate, and, if necessary, to live in a reduced way to what his predecessors had done. In taking the Savernake estate he thought the hon. Gentleman was taking an estate that would not create much sympathy, because it was an instance of an estate that had been frittered away by its owners. When a man in any other walk of life was left property, whether it was a manufactory or a business which he was unable to keep up, it was not thought hard that he should be called upon to sell such part as would enable him to keep up the remainder. Some of them might not be largely interested in agricultural land, though they had some interest in it, and knew what falling prices meant; but, after all, the great desideratum in regard to agricultural land appeared to be that they wanted those to have the property who could spend something on it, and who were not attempting to manage an estate where they had not capital enough for the purpose. The hon. Member and other hon. and right hon. Gentlemen on the Opposition side of the House ran only the agricultural landowner, and did not mention the case of the great urban land-owners, and he also noticed that when hon. Members got up on that side of the House to launch proposals with regard to land, they always spoke from the standpoint of the agricultural landowner. He thought hon. Gentlemen made a mistake in not drawing a distinction between the agricultural and the urban landowners, because since Free Trade had been introduced their interests were largely divergent, and if each would fight their own battle it would be better for them in the long run. If there was one thing that more than another was being felt as a hardship at the present time, and which the Chancellor of the Exchequer had, for the first time, shown them the way to deal with, it was that a great injustice was being done to the dwellers in the large towns by the ground landlords taking a large portion of the fruits of their toil. The largest of the boroughs which he represented, the town of Newport, belonged very largely to one nobleman. Let him say he did not believe there was a nobleman in the country who more truly did his duty by his estate than Lord Tredegar; he admitted frankly that Lord Tredegar conscientiously tried to do right in the great trust that had been committed to him, but what was the feeling of the largo majority of the people in that town? It was the feeling that had sent him to represent the constituency instead of the gentleman who formerly represented them, and who sat on the opposite side of the House. He went into the town of Newport without a single commercial interest in it, and almost without a friend, whereas the gentleman who represented them, now unfortunately deceased, had a large stake in the commercial interest of the town, and yet he (Mr. Spicer) stood here today largely, he believed, as the Representative of the constituency, because of the hardship the people of Newport felt with regard to Lord Tredegar's position in the town. That town had grown very largely with the increased development of commerce, and especially because it was the port of shipment for coal from the Western Valley of Monmouthshire. A few years ago it was a small town, but the Corporation did their best to develope its resources, and it had increased. But what the people felt was that land which a few years ago possessed but an agricultural value was made more valuable by their labour, and yet the greater part of that value went to swell the large income of the ground landlord. This was not a question of personality. There could not be a better instance of a town, the ground landlord of which was esteemed by all parties, and yet it was felt that be was allowed by the laws of this country to put an immense burden on the people. They were coming to the end of a number of leases—already a great many renewals had been made, of course, at a large increase, and many of those who had accepted new leases rather than give up the goodwill of their businesses were finding that when they had gone to the expense of erecting new shops and buildings they were called upon to pay not only a ground rent largely in excess of what they were paying before, but also interest on the capital which they had been compelled to pay upon the new property, and they felt that in future they were going to work largely for the ground landlord, and very little for themselves. It was very difficult in this country to impose new taxation on ground values. They had had the subject of betterment frequently discussed in that House, and he had always felt that whenever they had betterment from public improvements they also had worsement, therefore unless they could lay the new burdens on the actual ground landlords they would do somebody an injustice. The Chancellor of the Exchequer, he believed, bad found a remedy, and one which would gradually be a great relief to the taxpayers of this country. Anybody who knew the Metropolitan district of Essex knew that during the last few years there had been an enormous development of the urban population in this district, and they had had the labour of the East of London and the City going over into the Metropolitan District. In that district to-day land, which was formerly in cultivation as market gardens at £4peracre, was now worth in some cases thousands of pounds per acre. Under the present system they were tempting land speculators to go down to a district like that, to buy land practically at agricultural value, throw it out of cultivation, make it waste and throw it out of the labour of human beings. This laud was speculated upon very often years before it was required for building; it lay for years bringing in nothing to the State, and the State rewarded the owner for leaving it unoccupied. The man who spent money on an estate for the purpose of developing it had to pay rates as he improved it, but the man who let his estate go waste or lie idle waiting for a rise in value, had to pay no rates whatever. He knew of a property less than one-half of a mile from the Bank of England the owners of which kept it unoccupied for 30 years so that they might get the price they asked for it, and then at the end of that period when by reason of the public and other improvements around it reached the enhanced value they put upon it, they sold it, but during the 30 years they did not pay a single penny for rates. The bright feature of the Budget, in his view, was that the Chancellor of the Exchequer had shown them how, perfectly fairly to all interests in the future, to get some share of taxation from the great landowners of this country and to do it also in a way that would lead to the better development of these estates, and which would consequently tend to the general prosperity of the country as a whole.

* MR. BARTLEY (Islington, N.)

said, he should not dwell much upon the agricultural land question, as it had already been considerably discussed, but would address himself principally to a larger and more general view of the Bill, as the financial statement of the year. In the first place, be would point out that a remarkable change had been made in the name given to the Bill this year. It was called, contrary to the practice of many years, the Finance Bill, instead of the Customs and Inland Revenue Bill. Some might say that the matter of the name was of small importance, but it must be obvious that if a Bill which had been known for generations as the Customs and Inland Revenue Bill changed its name suddenly in one year and became the Finance Bill, it would be difficult to trace it in future years, and the difficulty would be increased by not knowing the reason of the change. He had ventured to suggest to the Chancellor of the Exchequer that he should call it the Customs and Inland Revenue and Finance Bill; and the right hon. Gentleman in reply said that there was a good deal in the title "Finance Bill" that at first sight was not apparent. That answer led him to look carefully into the matter, and he discovered that under it lay the great principle of tacking on to the Customs and Inland Revenue Bill part No. 6, which dealt with the alteration in the National Debt and the suspension of certain parts of the Bill, about which he would say a few words later on. If precedent had been followed this change would have been embodied in a separate Bill, and would have received separate consideration. But leaving that subject, he should like to deal with the Bill as a whole, and consider the main principles which the Bill specially developed this year. There were three main principles in the Bill, which, though some of them were not strictly new, were for the first time developed in an extensive manner. First, there was the systematising of the plan of graduated taxation. Of course, that was not a new question altogether, but, in the systematic arrangement proposed in the Bill, it was a practically new point. Secondly, there was the assimilation of real and personal property for the purposes of taxation; and, thirdly, there was the indirect and partial acknowledgment that capital was to pay more than an industrial income under the system of graduated taxation. Those three main principles of the Bill he had in the abstract always advocated and acknowledged to be fair and just. But the real question lay in the way they were to be administered; for unless the details of the mode of carrying out those principles wore strictly fair and just, the principles themselves would really become instruments of injustice. He approved of a system of graduated taxation, of the principle of taxation according to the ability of the person paying the tax. It was obviously fair that a larger percentage of taxation should be placed on large rich estates than on small estates; but he thought there was a system of graduated Death Duties much fairer than the system proposed in the Bill, and that was that taxation should depend not only on the gross amount left, but on the amount of benefit which any individual received from the estate he inherited. When a man was left a large sum it was not unfair that he should pay a larger per- centage of taxation than the man who was left a small sum. Suppose a testator were to leave him £100,000, he should be more willing to pay a larger percentage of taxation than if the same individual had only left him £1,000. But under the Bill, if a man had two sons, and left one £1,000 and the other £10,000, the two-sons would have to pay exactly the same percentage. There should be a graduated scale of taxation, not only according to the corpus of the estate, but according to the amount an individual was left under the estate. The Chancellor of the Exchequer might say he would like that, but the two principles should be worked together, in order to get a proper system. Possibly such a system would lead to a greater subdivison of property, and that would be a good thing; for, in his opinion, the more people that derived benefit from property, the better for the State, Though he did not think the accumulation of property in the hands of a few individuals should be stopped by artificial or unjust means, the tendency of legislation should be to level up from the bottom. The question then that arose under the Bill was whether the scale of graduated taxation was a fair one? He found that the scale rapidly grew at the bottom instead of at the top. Of course, he was aware why that was done. The fact was that it was from the bottom of the scale that the Chancellor of the Exchequer? really derived the larger part of his receipts. The smaller fortunes in the aggregate brought in more annually than the exceptionally big ones. The scale was that up to £500 1 per cent. was imposed, and from £500 to £1,000 2 per cent. was imposed. An estate of £500 up to £1,000 had absolutely to pay double the tax of an estate under £500. Then from £1,000 to £10,000 another 1 per cent. was added; and an estate under £25,000 in value had to pay 4 per cent.; while whether a man left £500,000 or £1,000,000 the increase in the tax was only 10s. per cent. He would urge that the small graduations of the scale should be at the bottom rather than at the top; and he hoped that in Committee the fullest attention would he paid to the matter. Leaving the great question of graduated taxation, he wished to say a few words on a most important point— namely, the question of valuation. The authority that was to do the valuation under the Bill was the Commissioners of Inland Revenue. He appealed to the experience of hon. Members whether they could say that that was a strictly impartial tribunal. He himself had very strong views about it. His experience of the Inland Revenue Authorities was that they not only extracted the uttermost farthing, but went beyond it if they could. Anybody who had to deal with them would agree with him that in entrusting the Inland Revenue officers with this valuation they Were trusting to people—of course, it was their business— who would put the highest value they possibly could on anything that came before them. The Chancellor of the Exchequer gave them an example about a certain picture. He mentioned that a picture of a young lady, by Reynolds, was sold at auction for £8,000, whereas the picture of a statesman and a Prime Minister by the same artist was sold for about £400. The right hon. Gentleman gave that as a remarkable instance of the astuteness of persons who were in the habit of valuing properties. He would ask whether it was the experience of anybody who had anything to do with the Inland Revenue that they would have taken that view of the relative value of these two pictures? He was sure that if two pictures were submitted to them for valuation of about the same size, and painted by the same artist, they would come to the conclusion that although one was the picture of a Prime Minister, and the other that of a young lady unknown, they were, roughly speaking, about (he same value, and they would never dream of setting the value of the one at a sum 18 to 20 times in excess of the other. Supposing they had two pictures by Sir John Miilais, one of the present Chancellor of the Exchequer, and one of a Miss Smith, was it conceivable that if they came before the officers of the Inland Revenue the latter would be valued at 18 or 20 times more than the former? He decidedly thought it would not be so. According to such a valuation the portrait of one anonymous lady would be regarded by the Inland Revenue as worth the portraits of every one of the Members of the present Cabinet. They must judge of what would be the method of valuation under this Bill by the experience of the past. He did not hesitate to say that valuations put upon Income Tax in the past had been unfair, and excessive, and arbitrary. The Chancellor of the Exchequer, however, in this Bill left them entirely to the Inland Revenue officers for the most important and vital matter of the valuation of these estates and property. He would draw attention to this fact. The Chancellor of the Exchequer had this year for the first time made some allowance for repairs to house property, and he might say that, having advocated that reform for many years, he thanked the right hon. Gentleman for having done so. Let him remind the House that Chancellors of the Exchequer had acknowledged for many years that the system was unfair under which nothing was allowed for repairs; but although the Income Tax was imposed in 1842, they had had to wait until 1894 before this obviously unfair treatment was removed. This unfair valuation had been going on, therefore, for 52 years, and now they were suddenly asked to believe that the Inland Revenue Authorities would at once adopt a fair system of valuing the estates which came under particular clauses of this Bill. He thought that, bearing in mind what had occurred in the past, this Bill should contain some distinct Rules showing how the valuation was to be made. No doubt it would add to the difficulties of the Bill, but he thought in some way they would be bound to see that there were clauses put in to enable them to know on what principle and basis the various classes of property were to be valued when this Bill came into force. Take the question of Irish land. The way of valuing Irish land at the present time would depend entirely upon the particular fancy and political views of the persons who were engaged to value it. Would the land be estimated at its selling value? If so, how would they get over the difficulty that Irish land was not saleable, and that, therefore, the selling value of Irish land was nil? That was the case also with regard to considerable quantities of English land, and here again also the valuation would depend upon the peculiarities of the person who was entrusted with the valuation. Therefore, it was very necessary that they should introduce into this Bill some words or clauses which would lay down precisely and definitely what were the main lines upon which real and personal property were to be valued. He knew of one estate which was nominally valued at £30,000 a year. It was an Irish estate. The actual receipts from that estate did not exceed something like £5,000 a year. They might fairly argue that a rent roll of £30,000 a year, if valued at 25 years, would amount to £750,000. Under the scale that estate would have to pay—if it was valued on that basis, 7½ per cent, duty; that was to say, £56,000, or 11 years of the net income that the proprietor would enjoy—half the freehold value. Surely these were matters in respect of which they must have some information from the Chancellor of the Exchequer. He was not suggesting that the Chancellor of the Exchequer intended to put any fictitious value upon these estates, but he thought it was only fair that they should know exactly and precisely the line of valuation that would be taken. The Ailesbury estate had been referred to, and that was a fair case to be considered, and showed that unless there was some precise rule decided upon the greatest injustice would be done. He looked out the other day an interesting case of an estate which had been lately bought up, and which was the property of a nobleman who died lately, who was not only a landed proprietor but was interested largely in the brewing trade. He found that under the old Probate Duty that estate would pay £19,500, and in respect of Estate Duty £6,500. Under this Bill it would have to pay £48,780—that was to say, £22,000 more. He was not complaining of the incidence of the tax in respect of this particular estate, because he agreed that it was fair and reasonable that in such an instance a larger sum should be taken; but what he was pressing was that in this Estate Duty there ought to be some distinct and definite rule laid down so that people might know how this tax would really be levied. There could be no question that this duty would be very largely evaded. Perhaps that was not a proper word to use. It seemed to him that one of the effects of this Bill would be that it would tend to induce people to part with their personality before they died, and oven real estate also. He personally did not see any objection to that; he did not see there was any fraud involved, but they would find out that owing to the evasions it would not be possible to obtain any large revenue out of the tax. With regard to the assimilation of real and personal property, it might be that some Members on his own side of the House would not agree with him when he said he looked upon that arrangement as a satisfactory one. He believed in making the taxation of real and personal property entirely alike, and he said that almost entirely in the interest of real property. There was an opinion abroad that real property did not pay its share of taxation. That was altogether a mistake. There was a lecturer travelling in the north of London who was saying that the whole taxation of the country ought to be laid on the land. Of course, he must be a person who knew nothing at all about the incidence of taxation. He did not even know that the whole gross rental of the land of the country would only just half pay the amount necessary to be raised by taxation. But such was the ignorance of some persons in regard to the taxation of the laud that they honestly thought that land escaped a great deal of its legitimate burden, whereas hon. Members of that House knew that land was in fact so overburdened that it was not possible for it to bear much more taxation. By the Parish Councils Bill there had been added a 6d. rate to the land, and although it did not sound much it meant a great deal with the land in its present depressed state. This Bill would show many people that the land was taxed up to a higher point than they supposed. Someone had stated that this new tax would only mean an increase of £300,000 a year on land, and the Chancellor of the Exchequer himself put it at something like £400,000 a year. Therefore, they had got brought out the fact that really and truly, although this enormous increase of taxation was to be put on all property, the great increase would be in respect of personality, and that only between £300,000 and £400,000 extra was to be got out of the land through assimilating the duties. There was another point to which he wished to call attention, and that was the indirect and partial acknowledgment of the idea that capital should pay a larger amount than industrial incomes. He had himself urged very often that there should be a different scale of Income Tax between industrial and spontaneous income. The Bill touched this point, but it did it in the worst possible way, because under it a man's industrial income would be heavily taxed on his death, although all his life through he had had to bear the burden of taxation and bring up his children and provide for their education. That, he thought, was the worst possible way in which the Chancellor of the Exchequer could make a difference between spontaneous and industrial incomes. If they told a man that they were going to burden his estate tremendously on his death the tendency of that man might be to spend as much as he could and not to be careful and thrifty as they would like him to be. It was no consolation to such a man to know that persons who were very rich would also be heavily taxed upon death. When the Bill was in Committee he should raise this question, because he was sure that the Income Tax could not be fairly raised unless there was an equitable difference made between industrial and spontaneous income. What he thought was a fatal blot upon the Bill was the proposal for the suspension of the Sinking Fund. He appealed to the Chancellor of the Exchequer to say whether he (Mr. Bartley) had not always objected to any reduction in the Sinking Fund. In 1887, when the Sinking Fund stood at £28,000,000, and when the Government unfortunately reduced it, he objected, and he thought the Chancellor of the Exchequer, with all his financial virtues, would have maintained the position he took up then, that the Sinking Fund should not be decreased. He certainly thought the right hon. Gentleman was in earnest when he said that he should not think of touching the Sinking Fund. Of course, the right hon. Gentleman would say that the circumstances were entirely different at the present time, but the fact was that the Chancellor of the Exchequer had fallen at the first temptation, like so many other Chancellors had fallen, and suspended a part of the Sinking Fund which, according to his speeches, he would never touch. The right hon. Gentleman had reduced the Sinking Fund in two ways. He had suspended one large item of £1,000,000 odd, and had taken £288,000 from the Naval Defence Fund. This was a very paltry proceeding. Last year the Chancellor of the Exchequer could not make his Budget meet except by taking £300,000 from the Treasury Chest. Now he was obliged to go to the Naval Defence Fund—the Fund which was created under the Act that the right hon. Gentleman had so often derided—in order to make his Budget meet. He must say he sympathised with the Chancellor of the Exchequer. It must be very galling to him that at a time when he was culminating his career by bringing in a great Budget he could only make his finances balance with the aid of the funds which had been raised under the National Defence Act. But as a humble follower of the finance of the right hon. Gentleman he would let that pass; but he must say that he took a serious view of the fact that, although they were going to pay an 8d. Income Tax, increase the Property Tax and the tax on beer and spirits, yet the Chancellor of the Exchequer had given up his views about the Sinking Fund, and taken from it moneys to pay the expenditure of the year. He knew perfectly well that the Chancellor of the Exchequer would not condescend to pay attention to anything that he might say, but, all the same, he had always looked up to him with respect as the great champion of the protection of the Sinking Fund, and now he found that the right hon. Gentleman was no better than anybody else, and that so soon as he discovered himself in difficulties had resort to this Fund in order to make a nominal surplus. The Chancellor of the Exchequer said that the Budget ought not to be made a Party question. The right hon. Gentleman discounted the merit of that statement when he dwelt so fully and freely on the fact that the extra taxation that he was proposing would only fall upon one particular class of the community. He thought it was a dangerous sign when a Chancellor of the Exchequer began to explain that his taxation would only touch one class. It laid the whole Budget open to suspicion. When, again, in answer to one of the Irish Representatives, he said that the incidence of the new taxation would fall with hardly any weight upon Ireland, he thought it took away even more from the force of his argument that a Budget ought not to be treated as a Party measure. He acknow- ledged that in regard to many of the principles of this measure he was in agreement with the Chancellor of the Exchequer. The real fact of the case was this, however: that the Bill was in reality a matter of detail, and he had been trying to show that the details were not set out. The great difficulties of the valuation of estates, realty and personalty, were not considered, and therefore it was necessary for them to make a careful investigation of this Bill when it was in Committee. Although they might agree with some of the principles of the Bill, they must see that the details of it inflicted no hardship upon any of the classes affected, and, above all things, that the method of valuation which was to be adopted should not have practically the effect of stamping the agriculturists out of existence. He did not object either to the selling of estates or the dividing up of estates. This Bill did not allow either one or the other to be done. It was not possible to borrow money in order to pay taxes. All these defects showed, he thought, that the scheme had been brought out with a view to the making of a popular Budget for a certain section of the community. It was merely a vote-catching Budget, making an attractive appearance, but framed without regard to strict equity. They did not oppose every principle of it, but it would be their duty, if it passed its Second Read-inff and got into Committee, to do their utmost to introduce details that would safeguard all the various interests involved. Because the measure was lacking in most important details he should support the Amendment of his hon. Friend.

* MR. JOHNSON-FERGUSON (Leicester, Loughborough)

said, they had heard a great deal about the difficulties in which owners of encumbered estates might be placed by the passing of this Bill. That, however, had nothing to do with them. What they had to be decided was whether it was right and just that lauded property on the death of the owner should pay the same contribution to the State according to its value as was paid by other forms of property in the country? That was the question which, so far as the first part of the Bill was concerned, the House had to decide, and so far as he was concerned his answer would be an Emphatic "Yes" to the Government. He believed that to give to any particular form of property even the appearance of enjoying a privilege not possessed by other forms was to expose it to very grave danger. It raised up a feeling that other kinds of property were being treated unjustly. He, therefore, welcomed the action of the Government in trying, as far as the Death Duties were concerned, to put landed property on precisely the same footing as personal property. He did not deny that the Bill would place the owners of many landed estates mortgaged up to two-thirds of their value in a difficult position. Take an estate valued at £100,000, and assume that it was mortgaged to two-thirds its value, or £66,000, leaving a free value of some £34,000. The net income of that estate would probably be £3,000 a year, out of which as interest of mortgage £2,300 a year would have to be paid, leaving a free income of only £700 a year. The duty payable on the £34,000 would be £1,530; or, allowing for interest, £200 a year spread over eight years, and the free income would be reduced to £500 a year. This might mean that the owner of the estate would have to leave his family house and go elsewhere; but the Chancellor of the Exchequer was not responsible for this. It was the man who in the first instance left his heir in the position of being nominal owner of an estate worth £100,000, with the social position and responsibilities of ownership, yet with mortgages such as to leave only a free income of £700 a year. They were told that it was a great evil that the State should encourage further burdening by means of mortgage of the landed property of the country. He admitted this, and thought many of the difficulties in our rural districts were due to so many estates being burdened with mortgages. But this Bill would not have that effect. Take the case he had spoken of. Suppose the estate worth £100,000, free from all burdens, and with an income of £3,000, the Estate Duty on that would be £5,500. The settled estates of this country were usually resettled every time the next heir became 21 years of age. From the table of one of the large Insurance Companies he found that £5,500 would be insured on the life of a person 21 years of age for a payment of £137 for 20 years, or £99 per annum for life. What would happen would be that when the resettlement was made the life of the next heir would be insured, and the premium on that would be made one of the first charges on the estates, and on his death the money would be used for the payment of Death Duty. The £137 a year would be an additional charge on the estate, but so long as Parliament spout money at the rate it was now spending it, the money would have to be raised in some way. But on an estate managed with reasonable regard to prudence and good management, the demand now made by the Chancellor of the Exchequer was not one that would place the estate in any real difficulty, or compel the owner to take it into the market. Passing to the Income Tax clauses, he was glad the Chancellor of the Exchequer recognised that there was a material difference between the gross and net income from landed property whether in land or buildings, and to meet that he made an allowance before levying the Income Tax. But that allowance by no means represented the difference between the gross and net income of land, and now that landed property (land and buildings) were put on precisely the same footing so far as the Death Duties were concerned with other forms of property, they were bound in justice to place landed property as far as Income Tax was concerned also on precisely the same footing as other forms of property. Look at the way in which Income Tax was levied on personal property. If it was on mortgage or invested in Government Stock you paid on the net sum received; if it was invested in business the expense attendant on carrying on the business, including insurance and the cost of maintaining and repairing all machinery employed, and all bad and doubtful debts, were deducted before the net profits were arrived at; and, in addition to this, you were entitled to deduct a certain percentage, varying in different parts of the country from 5 to 7½ per cent., for depreciation of machinery employed. Compare this with the way Income Tax was levied on land. It was levied on the gross annual value, which might be either the rental or something more, but the offer of 10 per cent. on land, and 16 per cent. on buildings, did not meet the necessities of the case. Two cases would illustrate the difference with which Income Tax pressed on the two forms of property. The great storm in January, 1882, which swept away the Tay Bridge, did so much damage to an estate near where he lived that it took the entire gross half-year's rental of the estate to repair the damage, and the owner of the property did not receive one penny of income for that half-year; but not one penny reduction did he receive from the Income Tax authorities owing to the loss. The same storm did considerable damage to a large manufacturing concern with which he was well acquainted, blowing down walls and destroying machinery. The cost of repairs was paid out of the current year's revenue, and naturally reduced the profits; but it was put against them, and the manufacturer was called upon to pay Income Tax on the average of four years, including the disastrous year. When once real and personal property were put on the same footing as regarded the Death Duties these anomalies should be removed. Look how Income Tax was levied on buildings in large towns. The higher portions of large buildings were usually served with elevators, which were erected at considerable expense by the proprietors, who let out the building either for residential or business purposes. In one of our northern towns was a block let out in chambers, from which a rental of £4,000 a year was derived. The cost of working the elevator was £250 a year exclusive of any allowance for wear and tear or depreciation. On an average valuation the rent, without the hoist, would be £3,500 a year, yet Income Tax was levied every year on the full £4,000 without any allowance whatever for the expense incurred in working the elevator which was an absolutely essential expense for the £4,000 to be earned. A large proportion of the difference between the gross and net income of landed property was essentially expenditure without which land quickly went out of cultivation, and was just as much a portion of the cost of producing the crops raised as was the expense of repairing and maintaining the machinery of a cotton or woollen mill part of the cost of producing the yarn or cloth made in those mills. In February, 1890, a Committee was appointed by the House to inquire into the expense of management of the woods and forests and land revenue of the Crown, and to see whether the expenditure on the Crown estates was in excess of what would be made by private landowners upon similar properties. Sir W. Kingscote was examined on that occasion, and stated that he had, at the request of the Committee, drawn up a detailed Schedule of the expense incurred on the agricultural estates of the Crown, and compared it with a similar return from eleven other estates in different parts of the country, and the result had been to show that the expenditure on private estates was in excess of that on Crown estates. Sir W. Kingscote had been in communication with several noblemen and gentlemen on this subject, and many of them had been good enough to allow him to examine their estate books and to extract from them such figures as he thought necessary for the purpose of comparison with the expenditure on Crown estates. He would not, however, weary the House with many figures, hut would simply call the attention of hon. Members to a summary handed in to the Select Committee. According to the summary the expenditure on Crown estates was:— Management, 4.5 per cent.; repairs, 12.6; general expense, 7.p—total 24.l. The expenditure on 10 out of the 11 private estates averaged-':—Management, 4.2 per cent.; repairs, 20.l; sundries, 5.7—total 300. Now, had that been an unreasonable expenditure they might naturally have expected to see some criticism upon that in the Report of the Committee, but that body seemed to have come to the conclusion that, even taking a moderate scale of expenditure, 20 per cent. was the very smallest margin between gross and net income, eliminating every consideration with regard to residence and outlay connected therewith. It was said that the deduction could not be settled in individual cases, but that a uniform course must be pursued in all cases; but he could not see any reason why deductions in the case of landed property should not be made variable and dependent upon the circumstances of each just as they were in all other classes of property, and just as every case was settled by itself under Schedule (D). In Scotland an allowance was made to a landowner depending on the amount of rates he paid. Why should not landowners in England be placed in a similar position as regarded their outgoings? Landowning was a business, and in this matter it ought to be treated as other businesses were. He believed that the best way of meeting the difficulty was by extending the provision to which the hon. Member for the West Derby Division had alluded—by extending to occupiers of land the right to be assessed under Schedule (D) if they thought fit, and, providing that they kept proper books, to be allowed to go before the Commissioners to be re-assessed on their actual income. He hoped the Chancellor of the Exchequer would carefully consider this proposal, as there was a very strong feeling existing on the question.

* SIR J. LUBBOCK (London University)

said, that the hon. Gentleman who had just sat down had in the latter part of his speech given a very good answer to the first part of it, and a sufficient reason why he should support the Amendment. It was clear that real property paid far more to the rates than personal property, and if taxation was to be equalised it ought to be equalised all round. Practically, it was almost impossible to raise rates upon personal property, and the only way that had yet been suggested of equalising the burdens upon the two classes of property was by putting the rates chiefly upon realty and the Death Duties—chiefly upon personalty. The Government now proposed to alter the system in one respect without altering it in another, which was obviously a great injustice. It was surprising that the Government, who professed so much anxiety to pass the Newcastle Programme, should have selected this year for the introduction of a Budget which raised so many questions of intricacy and perplexity. In 1874, when the right hon. Gentleman the Member for Midlothian (Mr. W. E. Gladstone) proposed to the country to do away with the Income Tax, it was generally understood that he intended to meet the additional taxation which would be required by an increase of the Death Duties. For that course there was a great deal to be said, but Her Majesty's present Government, without reducing the Income Tax, and even when they were increasing it, were adding to the Death Duties, which fell practically upon the same class of the community. So far, therefore, from carrying out the policy of the Member for Midlothian, the Government were taking the opposite course. Not only were they proposing to increase the Death Duties, but they were taking the very important step of introducing a graduated system of taxation. Fortunately, most of them could discuss that question entirely as an abstract problem on its own merits, because it did not affect them personally. It affected their children, no doubt, and they were entitled to speak for them; no one could complain of that. But so far as personal interest was concerned, it would tend the other way, because, unless the increase were thrown on the Death Duties, they would have to pay it, while by throwing it on the Death Duties they made their successors bear the burden. The right hon. Gentleman (Sir W. Harcourt) did not defend the justice of his proposals. He simply said, to his great astonishment— This raises in its simplest form the vital question of graduated taxation. To my mind the principle, if applied with fairness and justice, is a most equitable and politic principle. And he added that it had the assent of every writer on political economy and finance. Now, he (Sir J. Lubbock) ventured to say that this was not only not correct, but that the very reverse was the case. The right hon. Gentleman quoted Adam Smith, and no doubt it was true that Adam Smith in his first axiom stated that— The subjects of every State ought to contribute towards the support of the Government as nearly as possible in proportion to their respective abilities. But then he went on to say— That is, in proportion to the revenue which they respectively enjoy under the protection of the State. The expense of government to the individuals of a great nation is like the expense of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate. In the observation or neglect of this maxim consists what is called the equality or inequality of taxation. The Chancellor of the Exchequer observed that the effect of the graduated Succession Duty was equivalent to a graduated Income Tax. Another advanced Radical but sound thinker, Professor Fawcett, in his excellent Manual of Political Economy, said— The proposal to make the rate of the Income Tax progressively increase with the amount of the income would almost indefinitely strengthen the objection that the tax operates as a discouragement to prudence. It will be sanctioning the principle that the proportion which the State should take from a man's income should increase in the direct ratio of the amount he might save. The tax as proposed by the Government was avowedly a tax on capital, and Professor Fawcett went on to point out that— It consequently follows that if any portion of the Income Tax is paid out of capital which would otherwise be employed within the country itself, the incidence of the tax partly falls on the labourer, although the tax may never be directly levied from them. And he then proceeded to show how this would be the effect— It is, "he continued," important to remember that the proposal to graduate the Income Tax seems to sanction the principle that it is desirable to impose a penalty upon the accumulation of wealth. Any such scheme which is aimed against large capitals probably obtains popular support, because it seems to favour the prejudice which is frequently expressed against capital. The spread of education is however, gradually dissipating this error. And he concluded— It therefore follows that one of the most serious objections which can be urged against the tax is greatly strengthened if it should be so graduated that the tax is increased in proportion to the amount which an individual saves. Dr. Farr, the late Registrar General, in his evidence before the Income Tax Committee of 1852, said— The correct principle with regard to taxation is that each member of the community should contribute every year to the common yearly expenditure of the country in a fixed proportion to the amount of property in his possession. John Stuart Mill, in his Political Economy, laid down that— To tax the higher incomes at a higher percentage than the smaller is to lay a tax on industry and economy; to impose a penalty on people for having worked harder and saved more than their neighbours. It is partial taxation, which is a mild form of robbery. A just and wise legislation would scrupulously abstain from opposing obstacles to the acquisition of even the largest fortune by honest exertion. He would only quote one foreign economist, for, in fact, such a suggestion as that made by Government had generally been regarded as so unjust as to be hardly worthy of serious discussion. The late Prime Minister of France, M. Thiers, however, alluded to it, and laid it down as a self-evident axiom that every member of a State should contribute to the Revenue of the country in proportion to what he earned or to what he possessed. He went on to discuss graduated taxation, and pointed out the objections and difficulties. He said— If you once begin you have no logical limit. You are on an inclined plane, and once started cannot stop yourself. Having shown that the principle was unwise, he concluded by giving his opinion that it was un vrai pillage. In proportional taxation, he said, you had a principle; graduated taxation was an odious injustice, a "revolting exercise of arbitrary power" John Stuart Mill, in his Political Economy, quoted Adam Smith's four rules, the first of which, as he had shown, condemned graduated taxation, and summed up by saying that these rules having been generally concurred in by subsequent writers may be said to have become classical. So far, then, from supporting the proposals of Government the authority of political economists was altogether against them. It was true that in Mill's opinion the objections which were conclusive against a graduated Income Tax did not apply to a graduated Succession Duty; but this would hardly help the Chancellor of the Exchequer, because, as he had told the House, a graduated Succession Duty would, in his opinion, be practically a graduated Income Tax. If this principle were once admitted, when were they to stop? The Chancellor of the Exchequer had said that the right hon. Member for St. George's, Hanover Square (Mr. Goschen), admitted, and indeed proclaimed, these principles when he established the Estate Duty. It was, in fact, he said, the first rung of the ladder, and the Government proposed to ascend the scale. But ladders have several rungs; they had only got to the second. Where would the rest lead them? The object of the Chancellor of the Exchequer was to tax the rich as much as possible in order to spare the poor; but did he effect that object? It had been well pointed out that any proposal which impaired the solvency of the Insurance Offices would be a great national misfortune. And not only would the security on which so much of our social life was based be injured, but the many poor people who were the shareholders in the Insurance Offices would be injured, too. A large proportion of the shares were held in small quantities by women, widows, executors, and trustees for children, and they were the people who would be injured. But how were those affected who were immediately concerned in the Succession Duties? Let the House consider a concrete case. Suppose that two men each received £50,000. One was an only child, and inherited his father's property. He would pay 5 per cent. The other was one of ten children who inherited equally. He was no richer than the other, and yet he would have to pay 7½ per cent. because he was one of a group of persons interested in a common property. The Government might as well make Bank of England stock pay a higher rate than shares in a smaller bank. They might as well make a Yorkshireman pay more than a man in Rutland because Yorkshire was a bigger and richer county. The two men inherited exactly the same, they were equally rich, and yet one paid half as much again as the other, because his legacy, instead of being a fund in itself, was a part of a larger one. Surely if graduation were to be adopted it should be graduation on legacy and not on the estate. The Government proposal might be described as something else, but it certainly was not graduation. He did not feel confident that the result would answer the expectations of the right hon. Gentleman, because in the past, when attempts had been made to introduce inequitable systems of taxation, the great legal ingenuity of the country had devised means to defeat those attempts; but even if the addition to the national Revenue were as large as the right hon. Gentleman anticipated, it would be dearly purchased by a course which, so far from being approved by the highest economical authorities, had been forcibly described by one of the most eminent as "a revolting exercise of arbitrary power." Before sitting down, he was anxious to say something about the treatment of London in reference to the Exchequer grants, and here he believed that he spoke for the whole of the London Members. But though he could not speak for other cities and districts, it was by no means a question which affected London only. The grants from Imperial taxation were made on a dual system, partly the amount of licences actually collected within the area, and partly a proportion of the Probate, Custom, and Excise duties. There was also a special grant for police pensions. The Bill proposed to continue the arrangement under which the Exchequer contributions were apportioned according to the amount paid by Government in the year 1887–88 in respect of certain grants discontinued in that year by the Local Government Act, and this system was open to serious objections. In the first place, the year 1887–88 was very unfortunate for Loudon, inasmuch as London received less than 22 per cent., whereas for several previous years it had received over 23 per cent. But, in the second place, these grants themselves were not based on any equitable system of division as between county and county; in some of them, as for instance those for roads and for medical officers, Loudon had scarcely any allotment. As regarded the grant for main roads, out of a total of £500,000, London received £3,500 only; and the fact that the City supported its own police was left out of account altogether. The consequence was that in this respect alone London received over £ 150,000 less than its fair amount. Indeed, the relief afforded to London was far less than that to any other part of the country. Had relief been distributed according to rateable value, London would have received in the year 1887–88 about £160,000 more than she did receive, and had it been distributed so as to equally relieve the actual burden of rates, London would have been entitled to £490,000 more than she received. Then again, while London received in grants less than her fair share, she contributed to the Exchequer an unduly large proportion in the shape of taxes. This inequality appeared clearly in connection with the Inhabited House Duty, which was essentially a local tax, of which London paid £655,874 out of a total of £1,460,180, or 45 per cent. of the whole. From rates on Government property London received £40,000 a year less than she ought, and in the arrangements as regards the police also a very large sum. The result was that, while London contributed 24 per cent. and received back only 17 per cent., the rest of the country paid 76 per cent. and received back no less than 83 per cent. He believed they would be able to establish a just claim on behalf of London for £300,000 or even £400,000 a year out of the Government contributions more than they now received. The question was one of great importance to London, where the rates were very heavy, and steadily increasing. If the Chancellor of the Exchequer could not see his way to do anything at once in this respect, he might at least assent to the appointment of a Committee, a Motion for which, on behalf of his colleagues, he had given notice of. He did not wish, and did not think that his colleagues would wish, to bring any charge against the Government of intentionally arranging the matter unfairly. At the time the arrangement was made it was believed to be generally equitable; hut the experience of the last five years had shown that London and other large cities were placed at a very great disadvantage. He hoped, therefore, the Government would take the matter into their consideration and give London the relief to which it was fairly entitled.

* THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. SHAW-LEFEVRE,) Bradford, Central

The Debate this evening was opened by the hon. and learned Member for Thirsk in a speech of considerable ability, which covered a large amount of ground. The hon. and learned Member, however, appeared to have somewhat shifted his ground since he last spoke on the subject, because when he spoke a few days ago he based his attack upon the Bill on the ground that it would throw great additional burdens upon agricultural land, whereas now he has extended his objection to the ground that it is unfair to house property also. The hon. and learned Gentleman, however, appears to forget that most house property—in the South of England, at all events—being leasehold and, therefore, personal property, is already subject to Probate Duty. For my part, I consider that this difference between leasehold house property and freehold house property forms one of the strongest arguments in favour of the equalisation of the Death Duties. I recollect that when some years ago one of the greatest London landowners died and left his freehold houses to three ladies of advanced age they only paid some £7,000 or £8,000 on succeeding instead of the £140,000 they would have had to pay had the property been leasehold instead of freehold. One of the main objects of the Bill is to bring freehold land and house property under the same law as leasehold property is under. The hon. and learned Member then went on to attack the Bill, and to claim exemption in respect of what took place in 1863, and he quoted in support of his argument the language which the right hon. Gentleman the Member for Midlothian used then. But the hon. and learned Member appeared not to be aware of the speech delivered by that right hon. Gentleman in 1891 in answer to the right hon. Gentleman the Member for Sleaford, who was at the head of the Agricultural Department. The right hon. Member for Sleaford said— The hon. Member (Mr. Provand) left out of account altogether the burden of rates, for he roundly declared that rates fell upon the occupier alone, and were in no way paid by the land. The occupier pays a certain sum for the use of the land, and in that sum are included rates as well as taxes. The effect on the owner is that if the rates are high he gets less rent, and if they are low he gets more rent; and I maintain that it would not be difficult to show that ultimately the whole burden of the rates falls on the owner of the land, and on nobody else. The right hon. Geutleman the Member for Midlothian said— Those were the circumstances in which I endeavoured to show that the land under Schedule (A) pays more than 7d.in the £1, and that the burden is greater than it is commonly supposed to be. My right hon. Friend (Sir W. Harcourt) reminds me that it might be urged that that has been redressed by the Constitution. If we are to speak of that, I would say that, in my opinion, it has been a great deal more than redressed by the contribution in 1888 from the Treasury… The fact is this that—I am not now speaking of rural land alone —while realty has received an enormous boon at the expense of the Consolidated Fund, a boon of which the whole, in the case of rural land, goes to the landlord, and of which a large part, if not the whole, in the case of land not rural goes to the landlord—while that boon has been given to the landlords of the country, rural and urban, at the charge of the Consolidated Fund, a compensation has been administered to the Consolidated Fund in return which is, I believe I am right in saying, an affair of a few hundreds of thousands of pounds. In these circumstances, what is the position of the Government? Are we permitted to hope that the Government will do something more to redress the balance, something which will bring the change in the Succession Duties to a point, if not equal, yet, at all events, more nearly approaching to the enormous boon that the owners of property have received.? No, Sir; the Chancellor of the Exchequer long ago told us that he had nothing more to offer, that he could hold out no further expectation; and the right hon. Gentleman the President of the Board of Agriculture has to-night not only given emphasis to that doctrine, but has told us, and told us on behalf of the Government, that it is the rural landlords who have a grievance, that they already pay too much, that they, if they chose, might make out a case for relief from the House of Commons, and come before Parliament as a claimant… This I know, that the question between the rates and the Consolidated Fund is not a settled question, that no proper equivalent, no fair and proper consideration, has been given to the Consolidated Fund by a re-adjustment of taxation in respect of that enormous boon which has been handed over to the rates, and that a further and larger change than has yet been made in the Death Duties is, in my opinion, a matter of absolutely necessity on the plainest ground of justice before Parliament will have fully vindicated its character as the just distributor of benefit and burden among the several classes of the community. The right hon. Gentleman the Member for Midlothian considered that what occurred in 1888, and the subventions given by the Treasury in aid of the local rates, completely altered the position, and constituted the strongest claim on the part of the State to a further adjustment of the Death Duties. Then the hon. and learned Member for Thirsk went on to point out the hardships which the younger children might incur who would have to pay the Succession Duty in respect of legacies charged upon real estate by their parents. Well, I confess I do not see that hardship with regard to younger children. The hon. and learned Member was followed by the hon. Member for Wimbledon, who appeared to think that the agricultural community are deeply interested in avoiding the increased duty upon beer. He presented this extraordinary case. He appeared to admit that at first it would not be possible for the brewers to put an increased price upon the consumer, but said that after the first six months he thought they would seek to shift the burden from their own to other shoulders by buying inferior foreign grain, and no longer buying in the best English markets.

* MR. BONSOR

said, he quoted from the Chancellor of the Exchequer, who, in his estimate, only calculated upon extract- ing from the brewers a sum of £580,000, out of a possible £'840,000, in respect of the additional duty. He pointed out to the Chancellor of the Exchequer that the balance of £260,000 would fall upon somebody, and that somebody he suggested would be the agricultural in-

SIR W. HARCOURT

That is a mistake. The £260,000 is the amount less than will be collected this year. As in the ease of every tax, we do not get the whole of it in the first year.

MR. SHAW-LEFEVRE

I think I was not wrong in saying that the argument was that the agricultural community would be injured by the brewers buying inferior foreign grain. That seemed to imply that the brewers, in order to save themselves from the burden of the additional duty, would supply inferior grain, instead of the best English barley, and would, by inference, supply their customers with inferior beer.

MR. BONSOR

I said the brewers would use raw grain instead of malt from barley.

MR. SHAW-LEFEVRE

Yes, instead of buying the best English barley they would buy something inferior, and shift the burden upon somebody else. The hon. Member proceeded to point out that the price of barley has fallen in the last few years from 45s. to 28s. and 27s., or 40 per cent., the brewers using very much more sugar than formerly. The hon. Member will, no doubt, admit that the price of sugar has also fallen considerably of late years, almost in the same proportion as formerly, and yet the hon. Member went on to say that the price of beer to the consumer bad only been reduced 10 per cent. or 15 per cent., and argued that the brewers had made no profits.

* MR. BONSOR

No. I argued that £2,000,000 a year of the difference between the price of the material and the price of the product of the brewers had gone to the Exchequer inconsequence of the alteration of the Malt, Tax into a Beer Tax.

MR. SHAW-LEFEVRE

I think the decrease in the price of barley and sugar has occurred within the last 12 or 15 years, whereas the alteration in the incidence of the tax is very much older than that.

MR. BONSOR

No, Sir. I quoted the price of 34s. 10d. for the year after the introduction of the Malt Tax, and it has now fallen to 28s. 10d.

MR. SHAW-LEFEVRE

Then the hon. Member admits that the price of barley has fallen considerably since 1876, and he went on to say that the price of beer has been lowered only 10 per cent., and yet he argued that the brewers have made very small profits. The hon. Member only quoted the Brewers' Companies. He stated that he had examined the Returns of several of the Brewers' Companies, and ascertained that their average profits did not amount to more than 6 per cent.; but the hon. Member did not state what his own profits were.

* MR. BONSOR

I am one of a Brewing Company, and my own profits do not amount to 6 per cent. on the whole capital employed.

MR. SHAW-LEFEVRE

I did not think the hon. Member's Company was open to all the world, but supposed it was a, private Company.

* MR. BONSOR

No, Sir; it is a Company whose shares are quoted on the Stock Exchange.

MR. SHAW-LEFEVRE

I thought the hon. Gentleman was a member of a private firm of brewers.

MR. BONSOR

No, Sir.

MR. SHAW-LEFEVRE

Then I find it somewhat difficult to understand how, in view of the prices quoted by the hon. Member, and the small reduction in the price of beer to the consumer, the Brewery Companies have not made larger profits. Of this I am certain—-that many of them have made very great profits within the last few years. [Cries of "Quote !"]It is a well-known fact that breweries have made very large profits. [An hon. MEMBER: Quote one case.] I will undertake to say that such is the general belief. Whether some Companies have been less fortunate than others I will not say. With regard to a question put by the hon. Member for the West Derby Division of Liverpool, I have to point out that the Estate Duty is levied on the death of the owner, and before the corpus is distributed, and it matters not whether there are one or 10 children —the question of justice or injustice does not, arise. Then the hon. Member quoted from a tenant farmer in his district in Wiltshire, to the effect that the incidence of local rates fell upon the tenant farmer and not upon the landlord, and he claimed that any reduction of the local rates would be enjoyed by the tenant farmer and not by the owner of the laud. The hon. Member upon that point was in opposition to the right hon. Member for Sleaford.

MR. W. LONG

said, his argument was not in the slightest degree in contravention of his right hon. Friend's. He had quoted from a farmer who stated that no relief had been felt cither by the owner or occupier, because agriculture had been so depressed that there had been no possibility of relief.

MR. SHAW-LEFEVRE

I will answer that argument by showing that there has been great benefit derived by tenant-farmers and owners of land in respect of the remission of rates due to the subventions made by the right hon. Gentleman. That has been well shown by my right hon. Friend the Member for Wolverhampton, who has, indeed, somewhat understated the case. My right hon. Friend quoted the average results on agricultural land throughout the country; but in order to estimate the real effect of the subventions given out of the Treasury from 1888 it is necessary to look into the details of the several Unions, and to compare the amount of the rates before the subventions with what they are now, taking into account the reduction in the valuations in respect of agricultural depression and the reduction of rents. I have obtained a series of tables, showing what has been the effect in different Unions of the subventions given by the late Chancellor of the Exchequer. When the House hears what they are hon. Members will be somewhat surprised at the amount of benefit derived from these subventions. Take, in the first place, the Union of Marlborough in Wiltshire. I find in that case the valuation of land was reduced from £52,000 in 1878 to the very small amount of £30,000 in 1892, this very great reduction of valuation in the interval being due to the great depression in agriculture which we all admit and deplore. The reduction in valuation was no less than 40 per cent.; and yet, notwithstanding that the rates of all kinds levied in the Union were reduced from £5,800 in 1878 to £2,770, the average of the last two years, and the rates in the £1 had been reduced from 2s. 3d. to 1s. 9d., representing a reduction of 6d. in the £1 in spite of the very great reduction in the value of the land, I make out the calculation that a farmer who rented a farm of £400 a year in 1878 would have paid from the then valuation and at the then rate £45 a year; whereas in 1892, with the reduced valuation and with the reduced rate, he would pay only £17 10s., a difference, therefore, of more than £28. I daresay it may be said that the actual rates levied do not represent all the burdens upon the landowners, and that especially there is the contribution to schools, because in this Union there is no School Board. I have worked out what have been the contributions of the landowners in respect of the schools from the Return before the House, and I find that the aggregate contributions in the Union amount to 1¾d. in the £1, which is not a very serious amount on which to form any very strong argument. Let me take the case of the Union of Amesbury, also in Wilts. The valuation fell from £65,000 in 1878 to £39,000 in 1892, a very large and serious reduction due to the very great reductions of rent in that Union— a fall of 40 per cent. The total rates of all kinds levied in that Union have fallen from £5,600 to £3,600. The rates in 1878 were 1s. 8d. in the £1; in 1881, 2s., and they are now 1s. 10d.

MR. W. LONG

The right hon. Gentleman is now only quoting the Union rates?

MR. SHAW-LEFEVRE

The Union rates.

MR. W. LONG

It is rather important to remember that certain matters have been transferred from the Unions to the counties, and a mere statement of the Union rates does not represent the Union rates and the county rates.

MR. SHAW-LEFEVRE

I am putting all the rates—every rate which has been levied in the Union.

MR. W. LONG

I want to ask the right hon. Gentleman does he, and does the Secretary of State for India desire the House to understand that the total rates for all purposes of local taxation levied in the Unions of Marlborough and Amesbury amount in the one case to 1s. 9d., and in the other to 1s. 10d. in the £1?

MR. SHAW-LEFEVRE

The information supplied to me is that the amounts I have given include rates of all kinds.

MR. W. LONG

said, this was a matter which was important, and which ought to he cleared up. The right hon. Gentleman who was responsible for the Local Government Board told the House on behalf of the Government that the total rates levied in the Unions of Marlborough and Amesbury were 1s. 9d. and 1s. 10d. The right hon. Gentleman the Secretary of State for India, must be aware of the fact that under the Act of 1888 there was a transfer from the Unions and Highway Authorities to the County Councils of certain payments, and by that amount the rate of the County Council was naturally increased, and what had been in the one case the highway rate, and in the other the poor rate, became for the purposes of local government the county rate. The right hon. Gentleman had stated that. the total rates were 1s. 9d. and 1s. 10d., and what he wanted to know was whether that included the total rates of the district, or whether it was not, as he had reason to believe it was, a statement of the Union rate totally, exclusive of rates under several other heads.

* MR. SHAW-LEFEVRE

My information is, that it does include every rate of every kind levied in the Union. I have been anxious to ascertain what was the total amount of all the rates levied in the Union, and that is the information with which I have been supplied. Let mo take another case—that of the Union of Sleaford. I have asked for information about the Union merely as a test case, and I find this state of things there. In the Sleaford Union the poor rale valuation has been reduced from £213,000 to £180,000, a, reduction of £33,000, and the total rates levied of all kinds— including poor, county and other precept rates—which amounted in 1877 and 1878 to £26,000, in the year 1891–2 amounted to £18,500, a very largo reduction, and the rate in the £1 has gone down from 2s. 6.7d. to an average of just about 2s. That is an enormous reduction, in spite of the reduction in valuation due to the great, fall in rents in that district, which in the case of agricultural property had amounted to 40 and 50 per cent. I think the right, hon. Gentleman opposite (Mr. Chaplin) will admit that the reductions of rents in his immediate district have been 50 per cent. Of course, the average may not be so high, and as against that there has been a probable increase of the valuation of house property and railways assessed to the rates, but the figures J have quoted lend to show that but, for the great reduction of rent and the enormous fall in the valuation, the reduction of rates would have been very large indeed. But even with that reduced valuation (here has been a reduction of from 2s. 6d. to 2s. in the £1. I will take one other case —namely, the parish of Hatfield, because I observed the other day, in a speech made by the late Prime Minister, Lord Salisbury stated that, the landowners had to pay one-sixth or one-seventh of their total net income in the shape of rates. What is the state of the case in Hatfield? I find that the valuation in 1878–9 was £56,000; and in 1891–2 it was £60,000; therefore the valuation is very much the same. J have no doubt that the rent in the Union has somewhat lowered, bur, probably on account of the rise in the valuation of other property the average valuation of the whole Union has remained about the same. I find that in the same time the actual rates levied of all kinds have been reduced from £4,600 to £3,900, and the rates in the £1 from 2s. 2d. to 1s. 11d., a reduction of 3d., and this means, not one-sixth or one-seventh of the income of the landowners, but about one-eleventh. I should like to take one other case as an illustration of the result of the subvention made by the right hon. Gentleman opposite in a. Union where here has not been, so far as I know, any reduction of rent. I have taken a rural Union in Lancashire, Garslang, and I think the right hon. Member for Sleaford will admit that in the County of Lancashire the farmers have not felt the agricultural distress to anything like the same degree that it has been felt in other districts, and practically the rent has not, been much reduced. What has been the effect in a, Union like that? I find that in 1878–9 the Poor Law valuation was £106,000, and in 1891–2 it had risen to £119,000. The actual rates levied in 1878–9 and the previous year averaged £9,000; in the last two years they averaged £6,800, a very large reduction, whilst the rate in the £1 has been reduced from 1s. 10d. to 1s. 2d. I will quote the Union of Thirsk, represented by the hon. and learned Member opposite (Mr. Grant Lawson), and what has been the case there? There has been a comparatively small reduction of valuation. I presume that the agricultural rents have been lowered, but, probably on account of the rise in the value of other property, the total valuation has not been reduced in the same proportion. The total valuation has been reduced from £144,000 in 1878 to £130,000 in the years 1891–2, a reduction of £14,000; but the actual rates levied in the district have been reduced from £10,800 to £8,500, a very large reduction; the rate in the £1 has been reduced from 1s. 6d. to 1s. 3d. I think these cases prove my statement— that the effect of the subventions conceded by the late Government has been to largely lower the rates in the agricultural Unions, and that that operation would have been still greater if it had not been for the fact that there had been a largo reduction in the valuation of land. I think the facts which I have quoted go even further than the facts quoted by the right hon. Member for Wolverhampton, and show that in purely agricultural Unions the reduction in the amount of rates now levied has been considerable as compared with what they were a few years ago. If we were to go to the years 1868, 1851, or 1852, we should find an even greater reduction of rates. I find in the Union of Hatfield that the rates in 1868 were 3s. in the £1, and now they are only 1s. 11d. In the eases of Sleaford and the other Unions I have quoted I think it will be found there is about the same comparison between the rates of the present day and what they were in 1868. I think I have completely proved the case that the rates of every kind in these agricultural Unions have been very largely reduced. I think the main argument against the Bill before the House is the condition of agriculture. No one who has sat on the Agricultural Commission, as I have done, can doubt the gravity of the condition in many agricultural districts. The accounts we have received from numbers of them are simply deplorable. The farmers are in great difficulties, rents have lowered from 50 to 60 per cent., and oven more, land in many districts has been allowed to go back into grass, and many farms are, in some districts, unsaleable. Everybody must deplore this state of things, and hope that better times will soon be experienced. That, of course, is not generally the case throughout the whole country. I have referred to the worst districts in the East of England and part of the centre and South of England where land is heavy clay or where it is poor and unsuitable for growing anything but wheat. There the agricultural depression is severely felt, but further to the West, where there is pasture land, the condition of things is improved, and in some parts of the West of England, though the rents have had to be reduced, and the farmers have not made so much profit as they did formerly, still the farms are lettable at a somewhat reduced rent. The question is whether that condition of things may form any grounds for not proceeding with the proposal of the Chancellor of the Exchequer. If it be the fact that land has greatly diminished in value it follows, as a matter of course, that its value, for the purposes of Estate Duty under the Bill of my right hon. Friend, will be greatly reduced. If land is unsaleable and there are charges upon it so that the margin is almost nothing, then I presume that the Estate Duty which will be levied under the measure will also be very small. The valuation, I do not think, will be a difficult one, as the hon. Member for the West Derby Division appears to think. The practice of the Excise Department is to take the valuation made by the owner of the property unless they have reason to believe it is altogether of an improper character, and I believe it will turn out in practice that the expenses of the valuation will not be excessive. The question is whether, under these conditions, the measure of my right hon. Friend ought to be proceeded with? I would venture to point out to the House what has been stated by my right hon. Friend before—namely, that the amount of this increase in Estate Duty which will fall on agricultural land will not be large, but by far the greater proportion of it will fall either on house property, ground rents or other real property, or it. will be raised by the effect of the graduation of the Probate Duty and Legacy Duty upon personalty. After deducting the amount of the allowance under Schedule (A) in (he Income Tax, the total amount which will tall on agricultural land, as has been explained by my right hon. Friend, will be no more than from £350,000 to £100,000. That does not appear to me to be a large amount in proportion to the real annual value of land in the United Kingdom. The annual value of laud in the United Kingdom is stated, from the Income Tax, to be not far short of £60,000,000, and £350,000 as the annual burden on that is not a very large amount. I would point, out that the question before the House is not an alternative, but whether this scheme or nothing should be carried. Unfortunately we have incurred liabilities for the increase of the Navy amounting to £4,000,000. It is necessary to raise that money by some form of taxation, and the question is in what form it should be raised so as to provide money for the purpose of the services of the State. Is there any other way in which it can be raised in which it will fall more lightly on the agricultural interest? If there were any other alternative which would bring about this result I think I would willingly vote against the Bill, but there is not. I think no person with ordinary ingenuity, who had endeavoured to devise a plan for raising this money, could have formulated one for raising it in any other way. There are only two other alternatives— one by increasing the Income Tax, and the other by increasing the duties on articles of consumption, whether tea or tobacco, or some other articles of general consumption, so its to provide the £4,000,000 required. Let me ask the House what would be the effect of raising the £4,000,000 by increasing the Income Tax? How much of that would fall on the agricultural interest? A 2d. Income Tax would produce something over £1,000,000 of money, and would result in the owners of agricultural laud having to produce £500,000. That would be the effect of 2d. in the £1 on so much of the Income Tax assessment as is paid by the owners of agricultural land. Then the farmers would have to pay their share of the Income Tax:, which would amount to another £200,000, and the result, therefore, of a 2d. Income Tax, would be that the agricultural interest, consisting of landowners and farmers, would have to produce a sum of no less than £700,000 towards the amount required. Let me now consider the effect of the other alternative of raising this £4,000,000 by duties on articles of consumption by the people generally of this country. Supposing we were to raise the money by increasing the Tea and Tobacco Duties, bow would it fall? A very large portion of it would fall on one agricultural interest of the country—namely, the agricultural labourers and small farmers. What is the proportion of agricultural labourers and farmers of the United Kingdom to the rest of the community? In England, I believe, the agricultural labourers, tenant farmers, and their families form about one-ninth of the whole population. In Ireland the proportion is 60 and in Scotland 9 per cent. If you add the agricultural population of the three countries together, you will find that they form between one-sixth and one-seventh of the whole population, and, therefore, of these £4,000,000 which would have to be raised by duties of some kind on the articles consumed by the people, you would find one-sixth or one-seventh would have to be paid by the agricultural labourers or farmers. One-sixth of £4,000,000 would be about £700,000, therefore if that alternative were adopted, a very considerable burden would still fall upon the agricultural interest—not upon the same interest as that which it is now proposed to deal with, but in my opinion a not less important interest than that it is now proposed to tax. I venture to say, without fear of contradiction, that the proposal of my right hon. Friend is the most lenient form of taxing the agricultural interest which could possibly be devised. There is, in my opinion, no other method by which the burden would fall more lightly upon the agricultural interest. His proposal would have the effect, taken as a whole, coupled with the reduction in the Income Tax of throwing on the agricultural interest a sum of between £350,000 and £400,000, and that would fall upon the agricultural class best able to bear it—namely, the landowners. Any other proposal would involve a greater burden upon some one of the agricultural interests of the country, either upon the tenant-farmers or the tenant-farmers and landowners combined, or the tenant-farmers and agricultural labourers combined. I, therefore, think that this scheme will commend itself to the country inasmuch as it imposes as lenient a burden upon the agricultural interest as it is possible to devise. The scheme of my right hon. Friend not only does that, but it treats with very great favour the small farmers and small owners of laud of this country, as has been pointed out by the hon. Member for the Woodbridge Division of Suffolk and other speakers. In the first place, the new abatements and remissions in the Income Tax in respect of small incomes will considerably favour the tenant-farmer class; the exemption is raised from £120 to £160, and in other respects the abatements and remissions are favourable to that class. Then there are other provisions extremely favourable to the tenant-farmers. The Estate Duty is more lenient in respect of small owners than the existing Probate Duty. Taking it as a whole, I believe the proposal contained in this Bill will be extremely favourable to the tenant-farmer class, whereas any other possible alternative which can be suggested will throw a greater burden upon them or others connected with the agricultural interest of the country. I venture, therefore, to recommend this measure to the House as one which will carry out the great principle of equalising the Death Duties, an object aimed at for a long time past by every person who has had to consider the financial position of the country, and as also carrying out the principle, to some extent, of a graduation of such duties. The right hon. Gentleman the Member for the University of London attacked the Bill on the ground of the graduation of the Death Duties. Mr. John Stuart Mill was in favour of graduation, and I venture to say that all the principal economists from the time of Mill have been in favour of this principle. It has been adopted, too, by almost all our colonies. It commends itself to some hon. Members opposite, for the Member for Islington expressed partial approval, and the Member for Thirsk was not averse to entertaining it to some extent, at least in regard to personalty. The great weight of authority is in favour of the principle of graduation. I believe that it is one which is just in principle and will be beneficial in practice, and that it will not in any way tend to injuriously affect the propertied classes. That has been the experience of a great number of our colonies, and I believe its application here would give general satisfaction and produce a considerable income for the State.

MR. BRODRICK (Surrey, Guildford)

said, the explanation of the principles of the Budget given on the part of the Government was of the most meagre character, but it was in keeping with the state of the House. He did not suppose that during the whole time of that discussion there had been 30 Members present supporting the Government, including the Members of the Government themselves. In addition to that, he never recollected a case of a Member of the Cabinet rising at half-past 10, and speaking for a whole hour without receiving a single cheer from any Member in the House. He took note of that fact, because the right hon. Gentleman the President of the Local Government Board had some title to be heard on such a subject. He did not know whether the speech convinced the right hon. Gentleman himself, but he felt bound to say that the right hon. Gentleman did not speak with that force of conviction which they had observed on previous occasions. ["Oh !"] He suggested nothing, except that perhaps the right hon. Gentleman's case was not to his liking; and if that were not so, then the right hon. Gentleman was badly equipped with facts with which to argue his case. The House would recollect that the right hon. Gentleman began his speech by replying to the hon. Member for Thirsk, who had quoted some instances of the most serious character, which would have been shown up at the moment had they been wrong, and which had brought conviction to the House that this measure was likely to produce great-inequalities, and placed a much greater burden on small estates than was supposed; but the right hon. Gentleman, when he reached that part of the speech of the hon. Member for Thirsk, he did not attempt to give an answer, but addressed himself to the question as to how the deficit should be made out; and then proceeded to double the deficit. The deficit was originally stated to be £2,000,000. That was the deficit the proposed new taxation was intended to meet. The right hon. Gentleman had stated that the deficit was £4,000,000, but he ought to have given the grounds for such a, statement. The deficit was really only £2,000,000, and the right, hon. Gentleman had no right to frighten the agriculturists by doubling it. Hut the right hon. Gentleman fell into worse traps as he went forward. The right hon. Gentleman spoke of the reductions of rates in Unions as being immense and large. These reductions only amounted to 4½d. in the £1, and that was actually less than the sum —6d. in the El—which might be imposed under the Parish Council Act of last year. He should like to call attention to the serious absence of statistics which would throw light on the matters dealt with in the discussion. He thought the Opposition had a right to complain that no basis of figures had been given to them. The Chancellor of the Exchequer, in dealing with the question of Succession Duty, had told them the agricultural interest would only pay an extra sum of between £300,000 and £400,000 a year. He challenged that Statement. The House had a right to know the figures on which that statement was based, for he had made inquiries the result of which was to prove that it was totally unfounded. He had the figures of 24 largo estates. He found that in the last five years those estates paid in Succession Duty £457,000. Those estates would in future pay, taking probate fairly into calculation, £1,783,001). He admitted that many of those estates were settled, and that in such cases it was right to reckon a life and a half as the general length of a settlement. He knew they must raise the Succession Duty paid in the previous five years in order to make up the figure; but even if they did so, they were left with an increase on those estates alone of £1,280,000, which represented £220,000 a year. The Government's statistics showed they had about 10 of those estates in the last five years. He put it to the House whether, if live agricultural properties paid £220,000 a year extra in the future, and these represented about one-tenth of the whole agricultural properties assessed to Death Duties, it was credible that the remaining nine-tenths were only going to pay £180,000? He believed the figures of the Chancellor of the Exchequer were absolutely and radically wrong. The right hon. Gentleman's statement that the agricultural interest would be very lightly taxed greatly impressed the House, but he believed it to be entirely wrong. But the large estates were not the only estates to be taken into account. He had inquired into the cases of 80 estates of moderate size, some of which were only of 5,000 or (5,000 acres. The actual sums paid by those estates in the past was £19,786; in the future it would be £71,148. If they added to the £19,000 one-half because of the settlement, so that the estates would only pay in one generation and a-half, they still arrived at a figure nearly three times as large as formerly. If these figures were not to be relied on, he asked the Chancellor of the Exchequer to lay on the Table, before they went into Committee, the estimates by which he had arrived at his own figures. It was only fair that the agricultural interest should know the real extent to which they would be taxed. He contended that the Bill was not going to carry out the intentions of its promoters, and that while it was honestly believed by the Chancellor of the Exchequer that the largest estates would pay more, the small estates would be mulcted to a degree which no one had yet fathomed. What they were arguing for was the very point which hon. Gentlemen of the Radical Party had pressed so strongly on the Chancellor of the Exchequer. Hon. Gentlemen opposite wished to see a distribution of property; but they took away the reason for distribution by taxing the corpus and not succession. The big men could sell, hut the small man could not sell. If the big man was not satisfied with the award, thinking it too high, he could go into the High Courts. Put the small man could not go into the High Courts. There was more chance of distribution being carried out by the big man; but. it could not be carried out by the small man, because he could not afford to give up the property during his life. Was it expected that all those small estates would go into the Chancellor of the Exchequer's maw ? His information was that people wore already making arrangements to give away their life estates, and, if so, big estates would escape. There was no difficulty in the way of the owner of a big estate giving a younger son £150,000 instead of paying £5,000 a year out of the land. But a man with £20,000 could not do that—he would require the money for himself during his lifetime, and so he would he mulcted to the uttermost farthing. He would put two cases before the House. The first was a case of settled property, whether realty or personalty, and the next was a case as between realty and personalty. With regard to settled property, he would really like to know did the Chancellor of the Exchequer wish to punish settlement? His own belief was that settlements were made by the most thrifty and careful class of the population. Take the case of a man who had amassed £20,000 and left it to his widow, settled upon his four children. Before this Bill they would pay £300. Now there was, first of all, the £50 stamp; then the now Estate Duty, 4 per cent., or £800, and I per cent. for settlement, bringing the total up to £1,000. Again, £5,000 to each of the four children would bring them each in £140 a year. That would barely cover the cost of educating a youth for one of the professions; and if it were a woman, unmarried, it would barely pay for her lodging, clothes, and food. But while the Chancellor of the Exchequer had such sympathy with persons with incomes of only £150 a year that he relieved them altogether from Income Tax, the right hon. Gentleman put on this £5,000 with which he was dealing a duty amounting to £75 extra, the interest of which would be more than the tax would be in the case of an industrial income. Therefore, while with one hand the right hon. Gentleman removed the Income Tax from these people, he with the other hand took out of their capital a sum more than equivalent to the Income Tax from which they were relieved. Moreover, if those people happened to be connected with land, they would have an extra charge of £2,000 or £3,000 for the privilege of having an elder brother to succeed to the land. It was said by the hon. Member for Wiltshire on the other side of the House that landowners objected to a commercial man coming and settling amongst them, and that they desired to retain a monopoly in land. As a matter of fact, there was nothing they desired so much as to get a good fat commercial man amongst them, who would subscribe to charities, and employ labour and assist in other ways.

MR. C. HOBHOUSE

I only quoted the words of the right hon. Gentleman the Member for Sleaford.

MR. BRODRICK

said, the landowners desired to see commercial men settling down amongst them, because they were the best centres of Toryism in the country districts they could possibly wish to see. But it was difficult to dispose of a portion of an estate that was mortgaged to meet the Estate Duty. The case of the Savernake estate was an instance of the difficulty of putting a mortgage on an estate already sufficiently mortgaged; and if they could not put on an extra mortgage, they could not in such a case sell sufficient of the estate to meet the Estate Duty, but would have to sell the whole estate in order to pay off the mortgages. The case of the small estates really deserved the serious attention of the Government. There was only one possible way of getting rid of the hardship of these small cases. They could only get equality of charge if they put the charge on the succession, and not on the corpus. That would enable the Government to get the distribution which they wished for, and, what was more, he believed they would realise very nearly as large a sum. He certainly would not get it on the corpus. Were they really to understand that it was the object of the right hon. Gentleman to break up the large estates? [Sir W. HARCOURT; No.] No, he believed it was not; but, as had been pointed out by his hon. Friend the Member for the West Derby Division, they would certainly plant them with mortgages, even if they did not break them up. Everybody knew, whatever might be said to the contrary by hon. Members opposite, that in nine cases out of ten an estate was better in the hands of one large landlord than if it were split up among 50 small landlords. What was wanted was to level up, but the effect of the Government proposal would be to squeeze out the best landlords, Hon. Members seemed to think that this was not a labour question; but he had before him the case of an estate the rental of which was £2,800 a year, and nearly the whole of that was expended in keeping up the estate; in fact, £1,450 went in labour, £550 in rates, &c., £350 in repairs of cottages, &c., and £65 in insurance. Therefore, this was really a labour question, and the Bill, although it was not intended to do so, would spread desolation in the villages. He hoped that the Chancellor of the Exchequer, in his desire to pursue and torment big estates, would appreciate the effect his policy would have on the smaller estates. After the discussion that had taken place he felt that he had a right to be fortified with the view that the Bill, although it had been honestly drawn, seriously affected the smaller class of owners, while it was not at all clear that it would affect the large owners. It was always possible to get at the land, but personalty could be given away or invested in foreign securities. Large capitalists would evade these heavy duties, and men now worth millions would probably figure at their death as worth only £100,000. He therefore objected to the measure in its present form, regarding it as a discouragement of thrift, and as introducing the speculative element into the possession of land; and he hoped that if his hon. Friend did not go to a Division upon his present Amendment, he would raise the question in Committee. He was confident the Bill would not carry out the intentions of the framers, while it would cast grievous injury and injustice on an already overburdened class.

Motion made, and Question, "That the Debate be now adjourned,"— (Mr. Barton,)—put, and agreed to.

Debate adjourned till To-morrow.