FINAL BALANCE SHEET.

HC Deb 29 April 1897 vol 48 cc1275-336

Now, Sir, I have to state to the Committee my final balance-sheet, I have provided for a tax revenue of £85,250,000,and a revenue from non-tax sources, after making the necessary deductions in my previous Post Office Estimates, of £17,794,000—a total of £103,044,000. The expenditure will be £26,650,000 for the Consolidated Fund Services, £18,341,000 for the Army Services, £22,338,000 for the Naval Services, £20,895,000 for the Civil Services, £2,762,000 for Customs and Inland Revenue, £11,555,000 for Post Office Services, a total of £102,541,000, leaving me a margin of £503,000. Out of that margin I expect to have to provide for certain expenditure in connection with the improvement of education in Scotland, and also for technical education in Ireland, according to promises already made in this House; and, further, for an expenditure which I mention because I am sure the House will desire to be generous with regard to it—that is, for the entertainment of our foreign and colonial guests on the occasion of the Queen's Jubilee. [Cheers.] I leave myself, I think, not too large a margin for the current year. I have no doubt that I shall be told, as indeed I have been told, already, by the right hon. Gentleman the Member for West Monmouthshire, that in each of two successive years I have had a very large surplus and have not reduced taxation. [Opposition cheers.] Well, Sir, I demur to that statement. I do not dwell on the small reduction of the land tax, or of the estate duties which Parliament sanctioned last year; I believe they were just, and I believe they have done good, but they were small in amount. Nor do I dwell upon the postal reforms which I have just announced, although I believe they will be of great benefit to the people—[cheers]—and that they will give relief which is in reality a reduction of taxation. But, Sir, I join issue with the right hon. Gentleman on the main item of his argument. He says that money has been squandered in the Agricultural Rating Act—[Opposition cheers] —and the corresponding Acts for Scotland and Ireland which were passed last year; in the Voluntary Schools Act, which, was passed this year; and in the Bill now passing through the House for the benefit of necessitous schools. I say that each and every one of those Measures are direct or indirect reductions of taxation. [Ministerial cheers.] What is it that is becoming the most oppressive burden now upon the people? It is not Imperial taxation; it is local taxation. ["Hear, hear!"] In the Measures which I have named we have attempted to relieve local taxation through Imperial revenues. I believe that has been a wiser policy than if we had attempted to devote the same amount which has been absorbed by those Measures to reducing any Imperial tax. [Ministerial cheers, and Opposition cries of "No!"] There are taxpayers who complain. The right hon. Gentleman the Member for Wolverhampton made an eloquent appeal last year on behalf of the payers of income tax. There are persons in the country to whom the income tax is odious, although I believe they are a decreasing number. I had a correspondent who wrote from Scotland and told me that in his opinion the income tax was a device of the evil one to lead us into temptation, that it was opposed alike to Christianity and morality—[laughter]— and that it could not be defended by any believer in a future state. [Renewed laughter.] I am happy to say that he went on to inform me that he had resisted the temptation to cheat the revenue. Another correspondent believed that a tax of 10s. per horse on pleasure horses would enable me to make a sensible reduction in the income tax. There are other persons with similar delusions. I had one correspondent who went even beyond the right hon. Gentleman opposite in his admiration of death duties, for to his mind all tombstones and memorial tablets were fulsome and useless luxuries, which were as impious as they were foolish. I had another correspondent who thought a large revenue could be raised by making bachelors over 25 years of age liable to income tax if their incomes were over £80 a year, because they only spent their money in injuring themselves. [Loud laughter.] And, finally, almost everybody who does not ride a bicycle thinks that an enormous reduction might be made in the taxation which particularly presses upon himself if a small tax were placed on those who do ride bicycles. Sir, I have resisted all these temptations for altering our system of taxation. I hope that some day it may be possible to make a sensible reduction in the income tax— ["hear, hear!"]—but I do not, think that the reduction ought to be made by transferring the burden to other shoulders. I hope in quieter times than these it may be possible to make it by a real reduction in our expenditure. [Cheers.] I do not think it wise to make small changes in our system of taxation which, even if defensible in themselves, yet by their very novelty would harass and disturb the complex and delicate fabric of our trade. Great changes in our fiscal system will sometimes be necessary. [Sir HOWARD VINCENT: "Hear, hear!" and laughter.] If after full inquiry it is found that our present fiscal system docs real injustice to Scotland and to Ireland, a great change will be necessary then. But, Sir, at the present moment, with increasing comfort among the people, with wealth more widely diffused, with Imperial taxation more easily borne than at any previous period of our history, I do not think it is a time for change, [Cheers.] So far as I can see, I may well be content if it can be said that, at any rate, I have done nothing to impede, and, I hope, a trifle to assist, the progress of the country in that direction which we all desire. [Loud cheers.]— The right hon. Gentleman concluded by moving the Resolution for the reimposition of the duty on tea.

SIR WILLIAM HARCOURT (Monmouthshire, W.)

, who on rising was received with loud Oppositon cheers, said: I feel it would be presumptuous on my part to offer congratulations to the right hon. Gentleman on the ability, the clearness, and the satisfactory character of the statement he has made. The capacities of the right hon. Gentleman are too well known to this House to require any compliment of that description. One of these days he may acquire in the history of this country the addition of the adjective which formerly belonged to a Chancellor of the Exchequer who went by the name of "Prosperity Robinson." [Laughter.] I shall not repeat to the right hon. Gentleman the lecture which he addressed to mo last year upon the great offence committed by a Chancellor of the Exchequer who had a surplus beyond his expectation. He told me that it was no feather in the cap of any Chancellor of the Exchequer, that the triumph of a Chancellor of the Exchequer was when the Exchequer receipts agreed with his Estimates; he said that he was profiting by my miscalculation, and that he hoped that for once and only for once the authorities of the revenue had proved fallible guides. Sir, I am very glad they have proved this year again to be fallible guides. I am very glad indeed that the right hon. Gentleman has made a, miscalculation in having an excess of revenue of several millions above his Estimates, and that he will dispense with that feather in his cap which he said was the highest honour to which a Chancellor of the Exchequer could aspire. We must all rejoice in these evidences of the growing prosperity of the country, and in every department I hope the lesson will be taken to heart. Although I sometimes disagree with the right hon. Gentleman, in the application of his principles, I always concur and find myself in absolute agreement with the financial principles which he lays down. I regret very much that the hon. Member for Sheffield arrived too late to receive instruction from the Chancellor of the Exchequer—[laugher]—but I hope he will spend to-morrow in rending several times over the doctrine which the Chancellor of the Exchequer has so wisely and well laid down to-day, especially that part addressed to the hon. Member. The right hon. Gentleman took some exception to my having claimed to have supplied him to a certain extent with this bountiful revenue of which he has had the disposal, and he said that at all events the surplus for this year—though he pleaded in extenuation that his offspring was only a little one—[laughter]—was entirely due to himself and not at all to me. But then he proceeded to say that the Death Duties had produced considerably more than he expected. Well, so they did; they gave him a million more than he calculated for, and therefore I think I had some right to the claim that I had contributed to his prosperity. The fact is that the Chancellor of the Exchequer is only a slow, and as yet, I am sorry to say, an imperfect convert to the success of the Death Duties. He very candidly said he was surprised last year that they had yielded so much as they had done. He has given us an interesting account of the working of the Death Duties. But there is a more apt pupil in the study of the death duties than the Chancellor of the Exchequer, and that is my predecessor, now the First Lord of the Admiralty, who, not in a Budget speech, but in an after-dinner oration, confessed his complete conversion to the merits of the Death Duties. I read with great satisfaction this statement of the right hon. Gentleman. He said: — When I see the proceeds of some of these taxes which have been imposed, and their effect. I endeavour to gauge that effect as regards their ability to meet certain items of naval expenditure, and when the changes and chances of this mortal life bring millionaires, and more than millionaires, under the operation of these duties I cannot resist the temptation of translating the cheques poured into that till over which Sir Alfred Milner lately presided into naval defence. When a cheque for £100,000 is paid into the Revenue by more than a millionaire, I say that represents two torpedo boats, or if it is a smaller sum, that represents a most effective gunboat. This is the gentleman who in 1894, when the Death Duties were proposed to meet a great and increased demand for naval expenditure, offered to them at every stage the most violent and most bitter opposition. He predicted every sort of financial disaster from these unsound principles and their application He opposed that tax and every other proposal to meet the exigencies of the country, and now he counts up the gains derived from this iniquitous taxation and ends in this way: — More seriously I look to the smoothness with which the Inland Revenue is collected, and I think how wisely, on the whole, the taxes have been imposed and with what judgment they have been collected. Where should we be in asking for these colossal funds if they could not be provided without undue pressure on the taxpayer and if they gall on the shoulders of those who had to bear them? That is the testimony of the right hon. Gentleman to the effect of the Death Duties. But, instead of speaking in the exhilaration of an after-dinner oration, he ought to have made in his place in this House, in a costume which would have become him, and in which we should have been delighted to have seen him, the declaration— Where should we have been if, in asking for these colossal funds, they could not be provided without undue pressure on the taxpayer, and if they gall on the shoulders of those who have to bear them? Was there ever greater testimony to the soundness of the principles which the right hon. Gentleman endeavoured to defeat three years ago? The right hon. Gentleman has testified also to the injustice of some of the apprehensions that were entertained at that time. What was the argument specially coming from the landed interest? They said: "You are ruining the landed interest; they cannot find the money to pay these Death Duties;" and the consequence was a long period of instalments was allowed in order to make the facilities for payment greater. Now, how has it turned out? So far from the pressure being undue, and so far from the instalments being necessary, people find it more convenient to pay the Death Duties at once. Is not that testimony to the fact stated by the First Lord of the Admiralty that these funds have been provided without undue pressure on the taxpayer, and do not gall the shoulders of those who have to pay them? [Opposition cheers.] After all we have heard, and what we hear every day of the moans of the Duke of Devonshire and others as to the injury and destruction of their class, let us see what that class pays. The right hon. Gentleman says the sum contributed out of land is £800,000.

* THE CHANCELLOR OF THE EXCHEQUER

£843,000.

SIR W. HARCOURT

Yes, but what is given back to the landowners? You have given them back £1,300,000. [Opposition cheers and laughter.] That is the manner in which you have dealt with the landed interest. The Chancellor of the Exchequer just now said that this was all done in relief of rates. Yes, Sir, but of whose rates? Not the rates of the whole country, not the rates of all classes, not the rates of the classes who suffer most from the rates and who are the dwellers in towns. The complaint we have made is not that you have reduced the rates, but that you have reduced them in the most unfair and partial manner, and have given relief where the rates are lightest and none where they are heaviest, and that in the very year when the right hon. Gentleman, in the statement he has made, which we all recognise with satisfaction, says that the landed interest has had the advantage of improved prices and improved profits. I listened with great interest and satisfaction to the admirable review which the Chancellor of the Exchequer gave of the financial condition of this country as it was at the commencement of the auspicious reign of the Queen, and what it is to-day. Yes, and there was one incident in that review the most important of all. It was the reform—yet incomplete, I hope and believe—of the monstrous injustice by which previously to that period the wholes or almost the whole of the taxation of the country was placed on the poor and consumer—the direct taxation which fell on the wealthier class was only one-fourth of the taxation of the country, and three-fourths were borne by the consuming class. If there is anything we have learnt from that important investigation of the Irish Commission it is this—that indirect taxation is most unjust in its incidence because it fell on those least able to bear it, and that these reforms, associated in the main with the great names of Peel and Gladstone, which increased direct taxation and reduced indirect taxation, were the keystone of the prosperity of which the right hon. Gentleman spoke. But what was the cause of those reforms? The cause was the Reform Bill of 1832, which put power into the hands of the people. So long as power remained in the hands of those whose interest was identified with indirect taxation as against direct taxation, you had direct taxation at the lowest possible point, and indirect taxation at the highest. It is only since the people have had real control of the taxation of the country that it has been possible to establish a just system of taxation. That is the practical lesson which is to be learned from the review the right hon. Gentleman has placed before us. I must again repeat what I have said elsewhere, and the right hon. Gentleman has alluded to it, that I think it is deeply to be deplored that in two successive years of a great surplus there has been no material relief of taxation. The right hon. Gentleman claims a grant to the landed interest of a sum of £2,000,000, and which he says he estimated at £1,950,000. I will give him the benefit of the difference of £50,000. What I desire is a reduction of taxation which would be for the benefit of all classes and not of one; and what I would point out is that, but for gifts of this description, whether to the landed interest or to a particular religious denomination to whom he has made a grant under the Voluntary Schools Bill, the right hon. Gentleman must have had a surplus, according to the account he gives to-day, of £2,000,000. Owing to them, and the £1,500,000 of which he spoke as disposable surplus until he came to dispose of it in military operations, he would have had between £3,000,000 and £4,000,000 for the reduction of taxation with which he might have reduced direct and indirect taxation. I will not go further into that matter now, following the example of my great predecessor, Mr. Gladstone. ["Hear, hear!"] He always held that on the first night of the Budget it was not wise to go into the details of the financial operations. But there is one thing to which I must advert, and that is what I call the fly in the pot of ointment of the right hon. Gentleman. He has announced as one of his reasons why the surplus he had at his disposal is to be melted down that a sum of several hundred thousand pounds is to be provided for the support of a war policy in South Africa. [Opposition cheers.] Yes, I know the right hon. Gentleman is not in favour of a war polity in South Africa. But the Minister responsible for the colonies has made it sufficiently apparent that this is a war policy. In every utterance of his during the last few months there is no doubt he has been endeavouring to exasperate sentiment in that country—[Ministerial cries of "Oh, oh!" and Opposition cheers]—and to produce what, thank God, he has failed in producing—a racial war. [Renewed Opposition cheers.] Yea, Sir; but his policy has been defeated. It has been defeated by the good sense and good feeling of the people of Cape Colony, and the vote taken the other day was a vote of condemnation of this war policy. That vote was in support of a peace policy, and by a majority, I am happy to say, the Cape Government rejected the policy which is represented by these additional estimates. [At this point Mr. CHAMBERLAIN entered the House and took his seat on the Treasury Bench amidst loud Ministerial cheers.] I rejoice in that majority, and I repeat in the presence of the right hon. Gentleman that it was the triumph of the peace party in South Africa. It was the defeat of an attempt to get up this ill-feeling, utterly unjustifiable, utterly without foundation, and it was a declaration on the part of the majority of the people of Cape Colony and of the Government of the Cape that they would seek the arrangement of all differences which might exist between them and the Government of the Transvaal by peaceable and not by warlike operations. [Cheers.] Therefore, when we are asked to refuse the reduction of the taxation of the people in order that we may contribute money to promote aggressive and warlike operations in South Africa— [loud Ministerial cries of "Oh!"]—we shall oppose the most determined resistance; and I deeply regret that in this Budget, which in other respects might have been regarded as a satisfactory and prosperous Budget, we should be introduced to a, declaration that the resources of this country and the means by which the taxation of this people might have been reduced should be applied to purposes which, in my opinion, are utterly unjustifiable— [Ministerial laughter and Opposition cheers]—which are rejected by the people of the Cape Colony, which are rejected by the Government of the Cape Colony—and I venture to say that the exhibition of this spirit, is one of the most injurious things in connection with the Empire that has yet been proposed in the House of Commons. [Opposition cheers.] It might have been dangerous. I am happy to say it is not dangerous now; the vote in the Assembly of the Cape Colony has disposed of that. It is utterly impossible for any Party or any Minister to enforce upon the people of the Cape the spirit of hostility and aggression which they themselves are unwilling to accept. In regard to this part of the Budget I am sorry to tell the Chancellor of the Exchequer that, though I do not impute to him a desire to proceed in any spirit of this description, if he is going to make proposals of that character, inspired by that spirit, and likely to have that effect, I am afraid he must count upon great resistance on the part of those who desire peace in South Africa as they desire it in the rest of the Empire.

THIS SECRETARY OF STATE FOR THE COLONIES (Mr. J. CHAMBERLAIN)

, who was received with loud Ministerial cheers, said: I certainly did not expect to intervene in this Debate, and it is difficult for me to justify the South African policy of the Government on the occasion of the introduction of the Budget. But it has been made absolutely necessary for me to say a few words, at all events, in reference to the pernicious and dangerous language—[loud Ministerial cheers]—unpatriotic in the highest degree—[renewed cheering]—embarrassing to the Government, and injurious to the cause of peace—which has just fallen from the right hon. Gentleman. [Cheers.] Sir, I am sorry I did not hear the opening words in which he referred to this subject; but, as I understand, the right hon. Gentleman accuses the Government of being about to embark or having embarked upon what he calls an aggressive and warlike policy, involving warlike operations in South, Africa, and he says that this war policy has been rejected by the Cape Government and people. Sir, both these statements are absolutely inaccurate. [Ministerial cheers.] The policy of the Government in South Africa is exactly the same now as it has been from the first. Their objects are the same. The only thing that has changed, to a certain extent, are the circumstances. The circumstances in South Africa have changed to some extent. The policy of the Government remains the same, and that policy of the Government is to maintain its obligations, not to engage in any aggressive operations whatsoever; not to attack the independence of a State which, even in diplomatic language, can be termed a friendly State, but to maintain its own rights and the rights of the nation. [Loud Ministerial cheers.] I hoped that this policy would continue to be, as it has hitherto been, a non-Party policy, supported from all sides of the House. That hope has altogether disappeared in face of the speech of the right hon. Gentleman —[cheers]—and now I challenge him and his Party to raise the issue. [Loud Ministerial cheers.] Let us know where we are. [Ministerial cheers and Opposition cries of "Crewe."] Let us know at the earliest possible date upon what point they are prepared to take issue with us. [Ministerial cheers.] Are they prepared to take issue with us when we say that, while we observe our own obligations, we intend that the obligations which are held towards us shall also be maintained? [Cheers.] What is it that is now in question between us and the Government of the Transvaal? It is not any interference on our part in the internal affairs of the Transvaal; not any attack by us upon the Convention to which the Transvaal willingly assented. The difference between us arises from the fact that on more than one occasion the Transvaal Government have broken the Convention, and we are calling upon them in friendly and conciliatory terms to give us satisfaction. And this is the opportunity the right hon. Gentleman takes to tell them in effect that they are not to give us satisfaction; to tell them in effect it is we who are aggressive—[cheers]—that it is we who have taken the initiative, and that they will have the support of the Government and the people of Cape Colony, because that is his second statement. [Cheers.] Upon what does he base that? I suppose upon the telegrams, and he must have been much more acute than I am if he understands entirely their importance and meaning. What I see in those telegrams is that the Cape Parliament practically unanimously has declared that they are determined that the obligations on both sides shall be observed.

SIR W. HARCOURT

Peaceably.

MR. J. CHAMBERLAIN

It is desirable that peace should be preserved. We hold that as strongly as the right hon. Gentleman, but we do not hold that peace can be preserved by telling the Transvaal they can break their obligations with impunity. [Cheers.] That is practically the policy which the right hon. Gentleman has expounded. [Loud Ministerial cheers.] I defy him to point to anything in the Dispatches before the House— which are open for discussion—that, can, by any strained interpretation, be assumed to be in any way provocative to the Transvaal. [Cheers.] We have called their attention in conciliatory language to the breaches of the Convention which have taken place. We have assumed that they would be willing to meet our demands for satisfaction, and while the matter is still pending, and under the consideration of the Transvaal Government, the right hon. Gentleman takes this opportunity of saying we are pursuing an aggressive policy, and shall not have his support.

SIR W. HARCOURT

You have come for £200,000. [Opposition cheers.]

MR. J. CHAMBERLAIN

What nonsense! [Loud Ministerial cheers.] We come for £200,000 after we know, and the right hon. Gentleman knows, that the Transvaal has come for a million—for hundreds and hundreds of thousands. [Cheers and Opposition cries of "Where!"] The Transvaal has been arming to the knowledge of the House and of everybody—[An HON. MEMBER: "What about the raid?"]—to an extent which is absolutely unjustifiable by any ordinary policy of defence. We have not complained, we have not thought it consistent with our dignity to make any complaint whatsoever. The result of that has been that at the present moment the armaments of the Transvaal are altogether disproportionate to the defensive resources of our possessions in South Africa. Our forces in South Africa were established there and the numbers were settled at a time when these enormous armaments had not even been thought of. Now, after an amount of very considerably more than a million of money has already been expended, when armaments are still going on, when batteries of artillery, Maxim guns, millions of rounds of ammunition, and hundreds of thousands of rifles have been to our knowledge imported into the Transvaal, ordered from foreign countries and from this country—under these circumstances what is this country to do.? Is it an aggressive or a warlike operation if we think it necessary to reinforce our garrison at the Cape and to bring it up to something nearer a fair proportion in regard to those operations to which I have referred? [Cheers.] And yet, Sir, it is under these circumstances, when this extremely modest demand is made for a sum which will be sufficient to send a brigade of artillery and an additional regiment to the Cape, that the right hon. Gentleman comes down here and in turgid language talks about an aggressive and warlike policy which the feeling of the Cape will entirely repudiate. [Ministerial cheers.] Sir, I do not believe the feeling of the Cape will repudiate it in the least. I believe, on the contrary, the feeling of every loyal British subject at the Cape will be one of gratitude and satisfaction that Her Majesty's Government understand and recognise their position as the representatives of the paramount Power, and that they are determined, in words that I have used again and again, to maintain in their integrity all the rights which we have under the Convention. [Loud Ministerial cheers.]

MR. COURTENAY WARNER (Staffordshire, Lichfield)

asked if there was to be a permanent strengthening of the garrison at the Cape?

MR. J. CHAMBERLAIN

It is only intended at the present moment to increase the regular garrison in South Africa by a brigade of artillery—three batteries, that is—and an additional regiment.

MR. WARNER

said he considered that £200,000 would be a great deal more than enough for taking such, a number of troops from England and keeping them at the Cape for a few months. If it was an increase of the Army that would account for it, but if it was merely a transfer of troops from England to the Cape then this was a larger sum than was required for that purpose.

MR. J. CHAMBERLAIN

Of course, I am not responsible for the Estimate. That is an estimate for the transfer of that force to the Cape, and for maintaining them there. I regard it as substantially and practically a permanent increase of the garrison.

* MR. GIBSON BOWLES (Lynn Regis)

expressed surprise at the tone of the right hon. Gentleman the Leader of the Opposition with regard to this miserable sum of £200,000. If the right hon. Gentleman had read the last Blue-book concerning affairs in South Africa, as he had done, he thought he would have been struck, as he had been struck, by the repeated occasions on which the Colonial Secretary had condoned and forgiven repeated undoubted breaches of the Convention by the Transvaal. ["Hear, hear!"] Though treaties had been signed and completed and ratified in direct breach of that Convention, the Colonial Secretary had nevertheless advised Her Majesty to agree to those treaties.

SIR W. HARCOURT

The hon. Gentleman has omitted to observe, perhaps, that I am a member of the South African Committee, and I have heard the Colonial Secretary there. [Opposition cheers and Ministerial laughter.]

* MR. GIBSON BOWLES

failed to observe the relevance of that remark— [cheers]—and suggested that perhaps the right hon. Gentleman would pay even so humble a Member as himself the compliment of listening to him in silence. [Opposition, laughter.] He repeated that it was impossible to read that Blue-book without being struck with the patience exhibited by the Colonial Secretary in face of repeated breaches of the Convention undertaken, he did not hesitate to say, for the purpose of provocation to this country. It was written in every line of the Dispatches which reached them from the Transvaal that these breaches were openly and avowedly made for the very purpose of provoking a strong feeling of irritation in this country, and when their attention was called to the breaches they dealt with the matter with the utmost insolence. That was the only word that could possibly be used. ["Hear, hear!"] He yielded to no one in that House in the feeling he had that it would be a most tremendous misfortune for this country to be engaged in a war with the Transvaal. [Opposition cheers.] He was most profoundly convinced that such a war could lead to no good result either for the Transvaal itself or for this country, and he earnestly trusted the Colonial Secretary might be able to avoid anything even approaching such a disastrous termination to the correspondence—and, if he might use the word, the disputes—that had been going on between the Colonial Office and the Transvaal up to this time. ["Hear, hear!"] He thought the Colonial Secretary might be able to avoid war; and, in his opinion, if any man could avoid it—if any man were competent to deal with such difficult subjects us Dutch statesmen under Boer control—it was the right hon. Gentleman below him. [Cheers.] But undoubtedly his difficulties were not diminished, but very largely increased, by such speeches as that which they had just heard— [cheers]—by a, speech announcing to the Boers that, right or wrong, they should have the support of Gentlemen who sat on that side of the House—[Opposition cries of "Oh!" and Ministerial cheers ]—and that, whatever happened, they would not want friends to denounce the Government of this country, even if they were driven into a struggle which they firmly intended to avoid if it were at all possible. [Cheers.] That was a digression—[laughter]—into which he was tempted by the speech of the right hon. Gentleman opposite. He came now to the speech of the Chancellor of the Exchequer. Here again, he must say, the right hon. Gentleman opposite showed a certain want of appreciation. As to the First Lord of the Admiralty, he delivered him into the hands of the right hon. Gentleman opposite. [Laughter.] He would rather see that right hon. Gentleman at the Admiralty than at the Exchequer, because he could not forget that he was a first-class sailor, but he did not think he was anything like so good a financier, especially from the point of view of the Death Duties. He could not forget that it was the right hon. Gentleman who exaggerated that monstrous assumption, which was enshrined in the Finance Act, that a man was dead three months before he died. That was Mr. Gladstone's assumption, but the right hon. Gentleman the First Lord of the Admiralty exaggerated it into twelve months. He could not forgive him that—he should never forgive him. [Laughter.] Now with regard to the Death Duties themselves. He had endured the taunts of the right hon. Gentleman opposite in silence and in patience, because he knew his day would come. [Laughter.] He predicted evasions; the right hon. Gentleman opposite ridiculed them. There had been, as the right hon. Gentleman knew too well, many evasions. There had been some evasions in which he himself could scarcely have believed had they not been proved before him by irrefutable evidence—evasions to which, per- haps, the attention of the House would subsequently be called, and which, he ventured to think, would provoke amazement in the breasts of hon. Gentlemen opposite. He had always predicted that one effect of this Act would be to reduce the amount of capital brought into charge under the Finance Act of 1894. What had occurred? In their Report for last year, 1895–6, the Commissioners of Inland Revenue said: — In our Report of last year we called attention to the great falling off in the amount of 'personalty situate in the United Kingdom passing by will or intestacy,' whether subject to Estate Duty or Probate Duty. The amount of such property in 1894–5 was only £141,421,000, as compared with £159,688,000 in 1893–4. At the same time we combated the notion that this falling off was due mainly to evasion of the duty consequent upon the higher rates imposed by the Finance Act of 1894. The correctness of our contention appears to be borne out by the results of the past year, in which the amount of personalty of this description has once more risen to £162,569,000, being £21,148,000 in excess of 1894–5, and £2,881,000 in excess of 1893–4. And then they went on to say they were convinced that evasion was carried on, and that it would be carried on. Mark the result of the present year as shown by the Chancellor of the Exchequer. Whereas this personalty in 1891 was £190,000,000; in 1892, £160,000,000; and in 1893, £159,500,000: in 1894–5, as the very first result of the Finance Act, it fell to £141,400,000; in 1895–6 it did rise to £163,500,000, but in this year the Chancellor of the Exchequer said it had again fallen by £10,000,000 or to £153,000,000. This was a most pregnant fact, and he warned the Committee that that diminution had not stopped. On the contrary, it would go on increasing. He never expected it to reach to a very great height at this particular time. He expected it to reach to its greatest height at the end of the century. He confidently expected that at the beginning of the next century it would be found that there had been a most serious diminution of revenue under the head of Death Duties, and at the same time a most serious increase of the hardships and injustices inflicted under that Act. Then the moment would have arrived for a Chancellor of the Exchequer to stand at that Table and call for a repeal of that Act and a return to the proper principles of taxation. He would like to give four sets of figures in corroboration mid amplification of his conjecture that personalty under the Finance Act was likely to decrease year by year. He moved for and obtained a most valuable Return, showing the amount of personalty assessed in the last five years under seven distinct heads. In 1891–2, the influenza year, the total amount of personalty assessed under all heads was £410,000,000; in 1892–3, it was £367,000,000; in 1893–4, it was £350,000,000; in 1894–5, the first year of the Finance Act, it fell to £280,500,000; and in 1895–6, it fell to £273,700,000. What it would be for 1896–7 he did not know, but he ventured to predict a still further decrease. He must explain that this was the total amount of personalty assessed under every head, and some of it assessed twice or three times over. It did not represent the property. The sums he had named represented far more than the property which was assessed. It represented the total amount of personalty in each year on which they were enabled to assess duty, and consequently he claimed it as a fair figure for comparison between one year and another. The remarkable diminutions from year to year that had taken place since the passing of the Finance Act were such as to make even the right hon. Gentleman opposite reflect and, perhaps, in time, would cause him even to repent. The Chancellor of the Exchequer gave them three reasons why the Death Duties did not suffer so much last year as he had expected. There was a fourth reason, which he ventured to think was perhaps the greatest reason of all. That was the continued prevalence of high prices. The high prices of what were called "gilt-edged" securities had continued to a very large extent this year, but the moment there was a fall in those securities they would have a more than proportionate fall in such duties as the Death Duties, for the reason that those duties were more especially high upon the holders of these "gilt-edged" securities. Under the old system of death duties there was nothing so certain as that the estimate would be verified, or nearly so; but since the passing of the Finance Act a condition of the most absolute uncertainty had been created. There was a mistake in the Estimate of one and a half million last year, and of one million this year. Such a thing never occurred before.

SIR W. HARCOURT

The hon. Member forgets the Succession Duty of 1853,which never produced one-half what is was expected to produce. With regard to the Death Duty of 1894 it was estimated to produce one million in the first year, and it produced that sum within a few thousand pounds. It was estimated to produce ultimately four millions a year, and it has produced that sum almost exactly in both succeeding years. [Cheers.]

* MR. GIBSON BOWLES

said the right hon. Gentleman could not ride off in that way. He began to suspect that the right hon. Gentleman was the author of a letter in The Times signed "H." [Laughter.] There was an accuracy of expression and at the same time an inaccuracy of suggestion in that letter which, at the time, made him think it might have been written by the right hon. Gentleman. He was now confirmed in that opinion. [Laughter.] In two years a mistake had been made in the Estimate.

SIR W. HARCOURT

Not by me.

* MR. GIBSON BOWLES

said he was dealing with the years, not with the personages, and he asserted that the uncertainty that had attended these duties was most remarkable. He observed in the letter signed "H." the remark that, because the Death Duties last year were 14 millions, and this year nearly 14 millions, that showed how near an approximation it was to the original estimate. But the original estimate was not for this year or for last year; it was an estimate of the final outcome of the Death Duties. He was profoundly convinced that the Finance Act was calculated to produce year by year increasing uncertainties in the estimates of revenue as compared with the actual yield; and that when it came into full operation the amount derived would not be the 14 millions which the right hon. Gentleman expected, but a very much smaller sum, while the feeling of hardship entertained would be such as to force the House to reconsider what he could not but think an unfortunate fiscal change. ["Hear, hear!"]

* SIR CHARLES DILKE (Gloucester, Forest of Dean)

expressed regret at the Chancellor of the Exchequer's allusion to the position occupied by the Crown lands in reference to the taxation and finance of the country. It was a return to the high Tory view which he thought had become extinct of recent years. The right hon. Gentleman alluded to the payments in respect of agricultural rating having been considerably less than the estimate made by the Local Government Board. But the Local Government Board in issuing their Order acted under the instructions of the Treasury, whose assent was necessary under the Act. By the limit which was, fixed the great mass of the small freeholders of the country were defrauded of the advantages which Parliament intended to give them. In a parish in his own constituency, where the rates were now 8s. 6d., and in the next half-year would be 9s. in the pound, there were 300 small freeholders who had, through the interposition of the Treasury in the preparation of the Local Government Board circular, been deprived of the benefits of the Rating Act. With regard to the Post Office reforms, he was sorry the right hon. Gentleman had said nothing with regard to the labour side of the Post Office problem. ["Hear, hear!"] The Post Office was the largest employer of direct labour in the world, and although there had been some improvement in recent years, yet the Post Office was far from occupying the position of a model employer. The effect of the proposed reforms would be that an additional weight would have to be carried in the rural districts. At the present time auxiliary postmen had to make long rounds in the early hours of winter mornings, starting with a weight of 35lb. He hoped that the Government in effecting their reforms would consider in a liberal spirit the services of these men. ["Hear, hear!"]

* THE CHANCELLOR OF THE EXCHEQUER

I omitted to say that a considerable part of the sum I estimated will go in improving the position of the rural postmen, and undoubtedly some will go in providing carts where these are needed. [Cheers.]

* SIR C. DILKE

said he was glad to have elicited that statement. With regard to the additional £200,000 to be spent in respect of our position as paramount Power in South Africa, he could not take the extremely serious view of that proposal that was taken by either the Leader of the Opposition or the Member for King's Lynn. If there was the remotest intention in the mind of the Government to embark on a war in South Africa, £200,000 would be merely a ridiculous item of expenditure. He believed that the South African Republic in the course of the year just expired had spent on warlike stores alone at least twice that sum. In face of that fact they would exaggerate if they were to anticipate that the Government intended war in South Africa. But, if in the minds of heated and excited writers in the Press there was any notion of the kind, they ought to be warned in time against the suggestion that this country would be likely to engage in a war which would be so profoundly unpopular as a war in South Africa for any but a very grave cause. Of course, if the South African Republic desired to drive this country into war there were steps which they might conceivably take which would render war between the two countries inevitable, but he felt persuaded that no such step would be taken by the Republic. Upon anything like a doubtful or confused issue such a war would be one of great unpopularity, and one in which the sympathies of all the Powers in the world would be opposed to this country. All he hoped was that Her Majesty's Government would by the prudence of their language—[Opposition cheers]—abstain, not in the interests of Party, but of the whole country, from giving the smallest colour or support to those excited utterances which occasionally found their place in the Press, and on the part of some of their less weighty supporters.[Cheers.] With regard to the £500,000 for the Navy, he was not able to look upon that provision as necessitated by the fresh events to which the Chancellor of the Exchequer referred. He had always held that our Navy should be predominant, not only over the two Powers usually named, but over other Powers besides. As he was one of those who found fault with the shipbuilding programme of the year on the ground of its insufficiency, he cordially supported and approved of the proposed expenditure of an additional amount. He only wished the sum proposed had been larger.

MR. JAMES LOWTHER (Kent, Thanet)

expressed his regret at hearing the Chancellor of the Exchequer, in his review of the last 60 years, rehearse almost word for word one of the stalest leaflets of the Cobden Club. [Laughter.] His right hon. Friend did not even incidentally refer to the introduction of steam and electricity and its applications, and he omitted to take cognisance of the fact that other countries which pursued a fiscal system precisely the opposite of our own had made relatively far greater progress. The Chancellor of the Exchequer talked of 700 millions sterling as representing the trade of this country. His right hon. Friend stepped very lightly over the fact that of that sum 441 millions consisted of imports—[Opposition cheers]—and only 240 millions of exports. In other words, we were 200 millions annually to the bad. [Laughter.] The First Lord of the Treasury himself must have seen, almost within the limits of his own constituency, mills being pulled down and the plant carted bodily to other countries. That meant that British capital was expended no longer in paying wages to British artisans, but to foreigners. He hoped this "redress of the balance," to which the First Lord of the Treasury referred in speeches outside, would be duly appreciated by the wage-earners of this country. The fact was no person who looked dispassionately at our financial position could say we were safe in going on piling expenditure on the top of expenditure, and continually relying exclusively upon our existing fiscal system. Did the Chancellor of the Exchequer think that expenditure in the future would be curtailed? He thought that it would rather be in the direction of expansion. And was it proposed in this event to add to the already high income tax? The Death Duties were not capable of expansion, and therefore the income tax was the only resource of a Chancellor of the Exchequer. He should like to see recourse had to sources of revenue which would provide money and give a stimulus to some of the trades and industries of the country. It was all very well to say that the working classes would not submit to any tax on the necessaries of life, but 4½ millions were already levied on articles which were not produced at home. From a financial point of view, these 4½ millions would be easily made up by a recurrence to a sounder system of finance. A duty of 2s. on corn would produce more than that now raised by the taxes on tea, coffee, cocoa, chicory, and dried fruits. Could any hon. Member say that the working classes would be injured by a transfer of these taxes from the one commodity to the other? This system of depending practically on one source of revenue for any further demands which might be made on the Exchequer was dangerous in the extreme, and he should not hesitate to urge at any time the desirableness of establishing a sounder system of finance.

MR. LEONARD COURTNEY (Cornwall, Bodmin)

could not join in the pathetic remonstrance of his right hon. Friend. He did not find it to be a bad thing that we, by the exportation of 250 millions' worth of commodities should be able to get back 480 millions. It was rather a good bargain, and was a benefit to the wage-earners at home. Nor did he see that his right hon. Friend was justified in asserting that no one wanted to invest capital in this country. It was difficult to reconcile that statement with the fact that the rate of interest was lower in this country than in any other country. As to the suggestion that the working classes would gain by the imposition of a 2s. duty on corn, and a possible abolition of the duty on tea, coffee, and cocoa, he should like to see the working man who would accept the change. Personally he had not met him. He hoped that the greatest attention would be paid to the interesting comparison of the Chancellor of the Exchequer between the beginning of Her Majesty's reign and the finances of today. The revenue then was 53 millions, and the expenditure 52 millions. Now the expenditure was 104 millions. How was that expenditure allotted? Of the 52 millions at the beginning of the reign, 29 millions went in the involuntary charge of interest and cost of management of the debt; only 16 millions went to the Army and the Navy. [Cheers.] Now out of 104 millions something like 16 millions went to the cost of the interest and management of the debt, whereas the cost of the Army and Navy had risen from 16 millions to 42 millions, India being left out of account. In addition to that, the Chancellor of the Exchequer proposed out of the surplus to allot another half-million to the Navy. He held most strongly the necessity of upholding the Navy, and that it should be competent to meet any enemy or combination of enemies we had reasonably to encounter. He asked the Government and the right hon. Gentleman who had preceded them, however, whether there was no alternative polity possible save that of copying and emulating foreign Powers in the increase of our naval and military arms. As the late Lord Beaconsfield said years ago, the expenditure of a Government was the measure of its policy. A Government that developed a policy of mistrust would beget and multiply mistrust. Among civilised Powers there ought to be some method of negotiating and coming to agreement, and the first step to take to make that possible was to banish the sense of mistrust from one's mind. If we were not so suspected we might find other Powers ready to enter into satisfactory negotiations with us. Could we review the policy of Governments in recent years and read the language of Ministers of the Crown—he did not care on what side they were—and compare their policy and language with the policy and language of Ministers of the Crown at the beginning of the reign, without seeing that there had been a change for the worse, and that we were now constantly "biting our thumbs" at our neighbours, instead of cultivating friendly relations with them? Lord Salisbury was himself as cleanhanded in this matter as any man who had been engaged in public, affairs for many years past, but there appeared to be a peaceful spirit running through that Legislature and the country, encouraged, he was sorry to say, by a similar spirit abroad, which was the justification and excuse for it here; and the way to meet that spirit abroad was to try to get rid of it ourselves. In the early part of the reign wiser and really more patriotic policy prevailed. It was this policy of mistrust —this policy of "biting our thumbs" at those with whom we happened for the moment not to be in cordial relations— which filled his mind with the greatest anxiety. With reference to the proposed expenditure of £200,000—in connection with which proposal they had had so deplorable a scene earlier in the evening —he had to say that that was a ridiculously small sum to ask for if the Government really contemplated war with the Transvaal. The expenditure involved in a policy of that kind would be measured by millions and not by tens of thousands. But if the Government did not contemplate something aggressive, why indulge in this petty display? [Opposition cheers] He had been sorry to hear the Secretary for the Colonies refer to the money spent by the Transvaal Government in the erection of forts and in procuring artillery and munitions of war during the last 12 months. No doubt it was true that large sums of money had been so spent, but he did not believe that any person in South Africa dreamed that the Government of the Transvaal had any aggressive intentions — [Opposition cheers]—in that process of arming. [Laughter.] If Mr. Rhodes himself were here he would tell them that the Transvaal Government did not dream of making war. They were preparing to meet war, but they were not preparing to make war except by way of defence. They had no motive or desire for aggression. The reason why they were preparing for defence was, of course, largely explained by the fact that they had been attacked — [Opposition cheers]— and after the attack that had been made upon them such language as had been used by the hon. Member for King's Lynn that evening would not be regarded by them as indicating a friendly spirit. When language was employed such as they had heard in that Debate, could it be wondered at that there should be this inclination to arm on the part of the Boers? The demand of the Government for this £200,000, and the policy which appeared to accompany it, seemed to him to betoken some anticipation of what might be the results of the investigations of the South Africa Committee. He protested against the notion that they could promote peace in South Africa by uttering language of a hostile nature here, and making preparations which were wholly inadequate if war was contemplated. The members of the Cape House of Assembly without exception desired the maintenance of peace, and deprecated the suggestion of war. Whilst those were their views, they also deprecated the intervention of any foreign Power; but nobody in South Africa desired any foreign Power to intervene. Certainly the Government of the Transvaal Republic would not dream of bringing in a European Power to be their masters, or even to help them to fight Great Britain, for they valued their independence too highly. He did not wish to aggravate the situation by any words of his, and he was very sorry that they had anticipated a discussion which must be conducted in a more serious manner— [Ministerial cheers]—and with better preparation a few weeks hence; but he thought the Leader of the House would admit that the language which had been uttered justified, some few words in reply. He regretted that they should have heard from the hon. Member for King's Lynn denunciations of a people with whom we were still in friendly relations. [Mr. GIBSON BOWLES: "I indulged in no denunciations!"] The hon. Member spoke of the insolence of the Transvaal Government and of repeated treaty violations, which the Boers denied.

* MR. GIBSON BOWLES

said that when he used the word "insolence" he was referring to the tone of certain dispatches from the Transvaal Republic. Their tone certainly did seem to him to justify the use of the word.

MR. COURTNEY

said that when the hon. Member talked about "insolence of tone," that was an appreciation of his own. The other side did not think their tone insolent. It was just to this certainty of conviction that we were always in the right and the other side always in the wrong that he demurred, for it was likely to aggravate a situation already sufficiently grave. ["Hear, hear!"]

THE FIRST LORD OF THE TREASURY (Mr. A. J. BALFOUR, Manchester, E.)

I do not know by what unfortunate fate it is that the speeches of Gentlemen who wish to be thought the advocates of peace have always an effect so opposed to the speakers' declared intention. [Cheers.] I cannot imagine two speeches more calculated to aggravate and make more difficult the relations between this country and the Transvaal than the speech of the Leader of the Opposition and the speech of my right hon. Friend who has just sat down. The speech of the Leader of the Opposition has already been dealt with. As to the speech of my right hon. Friend, I am astonished that he should have thought it desirable to rise in his place as a supporter of the Government to explain that we cannot have the intention that we declare we have—the intention, namely, of sending out this small force for defensive purposes, and defensive purposes alone. [Mr. COURTNEY said that the right hon. Gentleman had not understood him correctly.] The right hon. Gentleman has many times assumed that the object of the Government was a provocative object. [Cheers.] The right hon. Gentleman says that the step the Government are taking is useless for aggression, that it is not wanted for defence, and that it must, therefore, be intended for provocation. ["Hear, hear!"]

MR. COURTNEY

I never used the word intended. I spoke of the fact, not of the design. People may engage in conduct which will produce consequences which they do not themselves intend or foresee.

THE FIRST LORD OF THE TREASURY

Surely, if the right hon. Gentleman goes that length, anything more calculated to make this defensive action on the part of the Government to be regarded by the Boers as a deliberate act of provocation—anything more calculated to produce that result than his speech cannot be conceived. ["Hear, hear!"] As a matter of fact, he has done his best, I am sure unintentionally, by the speech he has just delivered, to inflame those feelings which all would desire to smooth, and to increase those difficulties which all would desire to allay; and instead of accepting frankly the statement of the Government that those troops were sent out of precaution alone, that we are absolutely innocent of any aggressive purpose, that we have no desire and never had any desire to do anything but maintain our actual existing and admitted rights, and that we of all people in the world would regard not merely as a national, but as a Party disaster the breaking out of war with the Transvaal, he has by his speech done his best to hide this purpose from the public. ["Hear, hear!"] The brief statement of policy which I have made represents accurately the tone and temper of the Government, and if the Committee and the country will only take it from me in the spirit in which I have made it, I am convinced that something, at all events, will have been done to promote the maintenance of that peace which, I can assure the right hon. Gentleman, he is not the only person in the House to desire. [Cheers.]

SIR W. HARCOURT

I am extremely glad to recognise the tone which the right hon. Gentleman the Leader of the House has adopted. [Cheers.] I hope his statement will have the effect of healing the soreness which exists in this country, and what is much more desirable, in South Africa. ["Hear, hear!"] But when I remember that a gentleman with whom I am personally acquainted and for whom I have the greatest respect, the other day before his constituents said that, from what he had heard and knew, there was going to be immediate war with the Transvaal—[cries of "Name!" and a voice "Williams"]— I will not mention any name, but I refer to a most respected Member of the Party opposite—when, I say, I remember that, I think the time has come when something should be said to remove that impression. That such an impression does exist at the Cape of Good Hope no one acquainted with the state of things there can doubt for a moment. Nobody can doubt that the language Mr. Rhodes has held both there and in this country tends in that direction. Nobody can doubt that within the last month or two the impression has existed that the policy of Mr. Rhodes in this matter has had the support of the Colonial Secretary, and I should be very glad to know that that is not the case. I am bound to say that my experience upon the South African Committee has led me to believe that it was a joint policy. The whole of the Debate in the Cape Parliament turned on that point, and one of the principal supporters of the Resolution that was moved in that Parliament said that the meaning of it was that "we do not mean to support the policy of Mr. Chamberlain." That was the impression—that the object was, I will not say invasion or aggression, but that the object was a policy of menace. ["Hear, hear!"] What my right hon. Friend opposite has said is perfectly true. He has spoken of the arming of the Boers. How can you wonder that they should be arming when it has been admitted before the Committee that Mr. Rhodes and Dr. Jameson had distinctly formed a plan for seizing the armaments of the Boers at Pretoria? ["Hear, hear!"] How can you wonder at their taking measures in self-defence? As to the idea that the Boers of the Transvaal intend to attack the British Government in South Africa, it is absurd. I am very glad to have heard the speech of the right hon. Gentleman opposite, and I hope that his disavowal will go out to the Cape. I welcome his healing words, and I hope they will convince the people of this country, and especially the people in South Africa, that England does not entertain any such suicidal and wicked policy as would encourage a racial war in South Africa, and which would be at once the greatest injury and disgrace to the Empire. ["Hear, hear!"] And remember this—the hon. Member for King's Lynn talked about breaches of the Convention. I have read the allegation of these breaches of the Convention, and to my mind they seem very doubtful; but, Sir, there is a breach of the Convention, the grossest and the most flagrant that ever occurred, and that is the breach of the Convention in the raid and in the promotion of an armed insurrection in Pretoria. ["Hear, hear!"]That has not yet been referred to. It seems to me that before we take the mote out of the eye of those in the Transvaal we had better take the beam out of our own eye. [Cheers.] I am extremely sorry that it was thought necessary to introduce this matter into the Budget. It is really no part of it. The natural course of proceeding would have been to settle the expenditure of the country on a general basis, and if there was any temporary necessity for an armament of this description, it would have been perfectly easy to have dealt with it by a supplementary Estimate. Why the general finances of the country should be embarrassed by such a thorny and difficult question as this I cannot imagine. We have had no explanation of it, and we cannot dispose of it now. ["Hear, hear!"] I am sorry I omitted in my former speech to express my approval of the reforms the Chancellor of the Exchequer proposes in connection with the Post Office, but I only rose now to say that I welcome the tone of the language of the right hon. Gentleman the Leader of the House, and that I hope his words may be reported in South Africa, ["Hear, hear!"]

THE FIRST LORD OF THE TREASURY

I wish first to say that, as there is some inconvenience in discussing this matter on the Budget, I will endeavour to give as early a Friday as possible for the introduction of a supplementary Estimate, when we can discuss the question in a regular manner. ["Hear, hear!"]

MR. H. C. RICHARDS (Finsbury, E.)

said he rose to call attention to a question he had endeavoured to bring before the House by way of a Bill. The subject was no doubt familiar to many Members in consequence of the numerous petitions that had been received from traders in the country in reference to it—he meant the abolition of the plate licence. At present it was necessary for a trader to take out a licence before he could sell any article containing 6 dwt. of silver. The duty was in the nature of a restriction on trade, and of a kind of protection which both sides of the House would wish to see removed. It had been pointed out that the only two arguments in favour of the retention of the licence were that it limited dealing in gold and silver articles to a small number of persons, and that it assisted the police in the detection of persons who stole such articles. There could hardly be any justification for the continued imposition of a duty which produced the trivial sum of £50,000 a year, and which hindered trade in gold and silver articles. It moreover encouraged the production and importation into this country of shoddy articles of silver plate, which just saved the requirements of the revenue. He was at a loss to understand how there could be any opposition to the abolition of the duty, except on the part of the larger traders in these articles, who wished to keep the trade in their own hands. There was only one other point to which he wished to refer as representing a London constituency. He wished the Chancellor of the Exchequer could have seen his way to raising the minimum on which the income tax would have to be paid. This was a matter which closely affected the working and middle classes, particularly numbers of poor traders. He did not think the Exchequer would lose much, seeing the cost of collection. He also suggested that the sale of cigars and tobacco should be allowed on the railways and omnibuses.

* SIR JOSEPH PEASE (Durham, Barnard Castle)

said the hon. Member for Thanet, who had recently addressed the Committee, in saying that no one would invest a 6d. in this country, could hardly have read the admirable reports from the Board of Trade. There was a little book which came out every year, called the "Statistical Abstract," which hon. Gentlemen opposite ought to study. It showed that 17 millions had been invested during each of the last 15 years in one great industry—the railways of the United Kingdom, and yet the hon. Member for Thanet had said that there was no one who would invest a sixpence! With regard to the proposals of his right hon. Friend the Chancellor of the Exchequer as regards Telegraphs and Post Office, he was sure they would be welcomed throughout the country. There were many trades suffering as well as agriculture. What they were most suffering from was, he would not say the policy of Her Majesty's Government, but the unsettled state of Eastern Europe, which had no doubt done great damage to trade. But for that they would have been still more prosperous. He was glad to hear his right hon. Friend say that he did hope that some of this expenditure, which he so much regretted, would come to an end some day—that expenditure which, as the hon. Member for Bodmin said, they were constantly demanding for naval and military affairs, an expenditure which had gone up from 16 to 40 millions. Now, no sooner is there a small surplus than £500,000 of it is handed over to the Admiralty in order to continue those armaments which were so detrimental to the peace of the world. He agreed with the Leader of the Opposition that it is an enormous pity that the £200,000 for additional troops to the Cape, which in itself is neither here nor there, was named at all as an item in the Budget. He feared that it was a fatal mistake, especially after the cross-examination in the Committee taken up so warmly by the Secretary for the Colonies, and the papers and letters written upon it. He was afraid this would tend rather to the war of the world than the peace of the world. ["Hear, hear!"] Whenever these increases were made here, they saw at once the foreign papers urging their Governments to follow the course that England was taking. He believed these countries watched and followed the course that England might take—if we built more ships they followed suit—if we were to adopt another policy, in all probability that policy might and would be adopted by them. This Budget of £103,000,000 was to give 42½ millions of it to the purposes of the Army and Navy. As to the subsidies to local taxation from Imperial funds, he thought every Chancellor of the Exchequer deplored the thing in principle, for the principle appeared to him utterly wrong—["hear, hear!"]— and was actually raised by taxation upon the lower middle and working classes to save taxation, which, would otherwise fall on those more able to bear the burden.

COLONEL MILWARD (Warwick, Stratford-on-Avon)

believed that the postal and telegraph changes would prove of great advantage, not only to the upper classes but to a large extent to the working classes, especially in sparsely-inhabited districts. He wished particularly to thank the Chancellor of the Exchequer for the reduction in the rates as to parcels. Up to now the rates in this country were larger than in other countries, notably in France and Germany, which were largely competing countries with us. The proposed reduction would place them in a better position than France was, but not better than Germany. We should not be in as good a position as the Germans, but it must be remembered that the German Government required that post waggons should run free of charge, and, therefore, the rate for parcels could be considerably reduced. Taking that into consideration they had every reason to be satisfied and gratified with the changes announced to-night, changes which affected both the agricultural and commercial classes. The changes would do a great deal to bring producers of dairy articles and consumers nearer together, with a result beneficial to both classes. He did not think the Government or the House generally recognised to what a large extent commerce was carried on by means of the Parcels Post. Only the other day he learned that one firm, a Member of which sat in this House, sent every day 1,300 parcels by Parcels Post. He trusted that the advantages they had heard of to-night would soon be extended to the foreign Parcels Post, and they had every reason to believe that would be the case. That certainly would go a long way towards helping us to compete with producers abroad. He did not suppose that in consequence of such a change the commerce of England would reach the point his hon. and gallant Friend the Member for Sheffield desired to see it attain, but that and other similar reforms would greatly assist English commerce in its international transactions. Before he resumed his seat he desired to express regret that it had not been possible to reduce the income tax by a penny at least. If we embarked in war we must look very largely to the income tax to bear the burden, and if in time of peace we kept the tax at war rate what were we to do when we had to meet the expense of a war? A 6d. income tax was bearable, but an 8d. tax was always unbearable in time of peace. He was certain it would be wise to reduce the income tax to 6d., so that we might be in a sounder financial position if we had to go to war. One, however, could not help being satisfied at the ease with which the country bore the present enormous expenditure. It was only a few years ago that hon. and right hon. Gentlemen opposite were denounced for proposing an expenditure of £80,000,000. The expenditure during next year was estimated at £101,000,000, and the country appeared to be able to bear it with the greatest ease. No testimony to the country's prosperity could be greater than that.

* MR. ALBERT SPICER (Monmouth Boroughs)

rose to express gratification at the wonderful statement as to the financial condition of the country which the Chancellor of the Exchequer had put before the House. He believed that statement would impress the vast majority of hon. Members with the wisdom of those who made this country one of free imports. From one remark which fell from the hon. and gallant Member for Sheffield it would seem that he at least was still unconverted. [Sir HOWARD VINCENT: "Hear, hear!"] He was afraid that the hon. and gallant Gentleman and those who thought with him did not pay sufficient heed to the enormous increase of home consumption. He was connected with a branch of commerce that had to meet a great deal of foreign competition, but he believed that if a return could be obtained of the gross tonnage produced by home manufactures 20 years ago as compared with to-day, it would be found that in spite of foreign competition the industry of which he spoke had made enormous advance. He listened to that part of the Chancellor of the Exchequer's speech which dealt with postal reforms with peculiar pleasure. He felt that hitherto the improvements in postal arrangements had chiefly benefited the large towns, and, therefore, he was glad that now the rural districts were to be benefited. There was one suggestion he had to make, and that was that the Post Office authorities should take into consideration the advisability of carrying passengers in those districts unprovided with the ordinary means of conveyance. In many districts of the Continent the Post Office provided passenger carrying accommodation, an example which he felt could with advantage be imitated here.

On the return of Mr. SPEAKER, after the usual interval,

SIR HOWARD VINCENT (Sheffield, Central)

said that unfortunately he had not heard the whole of the speech of his right hon. Friend the Chancellor of the Exchequer, and more especially that part in which he referred to the views which he himself, in common with many others, had long held. He had heard the greater part of the statement, however, and he was very much disappointed that his right hon. Friend did not take advantage of the present opportunity to do something for the manufactures and industries of the country. The postal reforms would very possibly do something in this direction, but they must not forget that the present Government was pledged to devote itself as far as it could to fostering the interests of industry and labour in the country. He pointed out that in 1841 the Customs duties, raised upon nine classes of articles, amounted to £23,341,000, while in the present year, 21½ millions were to be raised upon eight classes of articles. The right hon. Member for the Bodmin division of Cornwall had taken exception to the suggestions which were made by his right hon. Friend the Member for the Isle of Thanet, and expressed the opinion that the working men of this, country would not tolerate any such system as he advocated. He would refer the right hon. Member for the Bodmin division to a newspaper published in his constituency, the Cornwall Gazette. On the occasion of a dinner of the Cobden Club last year, at which the right hon. Member took the chair, that newspaper published the following passage: — The iron industry is decaying, and America, which adheres to the fallacy of Protection, is rapidly beating us out of the field. In cutlery, England was mistress of the markets of the world some 14 years ago; in 1894 our exports were short of two millions in value, while German exports were in the neighbourhood of four millions. Our cotton exports in the same year were nearly eight millions less than in 1874, and our exports of woollen goods in 1874 were 28 millions as against 18 millions in 1894, whilst we imported these goods to the value of 11 millions. Our import of silk goods is eight times greater than our exports. Our sugar industry has been destroyed by foreign bounties. The McKinley tariff is killing our tin-plate manufacture. It is such facts as these that one looks to Mr. Courtney to explain. He would suggest that the right hon. Member should consult the opinion of the working men in his own constituency on the subject. The Chancellor of the Exchequer, in detailing the progress which had been made in many respects during the present reign, had altogether ignored the relatively greater progress which had been made by foreign nations under an entirely different system. An official Paper laid upon the Table in 1891 by his right hon. Friend, who was then President of the Board of Trade, showed that while each £100 of English foreign trade in 1854 became under the free import system £276 15s. 6d. in 35 years, in the principal Continental nations, under a system of Protection, each £100 in the same period became £364 10s. 1d. That showed that foreign nations under an entirely different fiscal system had in the last 35 years made relatively much greater progress than we had. The present system, was entirely against the investment of capital in this country. He contended that his right hon. Friend the Member for Thanet was absolutely right when he said that the present condition of affairs tended to diminish the investment of capital in labour-employing British enterprises. The hon. Baronet who sat for one of the divisions of Durham cited against this the £800,000,000 sterling which was invested in the railways of this country, and he considered these were manufacturing enterprises. He did not minimise the great benefits which the railways were to the country, but they gave preferential rates to foreigners, currying foreign goods for less than they carried British produce, arable or manufacturing. In the construction of the new railway from Waterloo to the City the rolling stock was being obtained from abroad and the labour from America. He admitted that the present fiscal system was exceedingly advantageous to people with fixed incomes, who could obtain luxuries at far less cost than they would otherwise be able to do, but to people whose capital consisted of their labour, and who had to work for their daily bread, it was injurious in the highest degree. In 1841, 934,000 persons were in receipt of outdoor relief, and in spite of our vaunted prosperity the number still was 817,000. Then one in three of the population over 65 was in receipt of Poor Law relief. These were matters which in prosperous times should receive more attention from the Government. Arable land was going out of cultivation, and large numbers of the rural population were driven to the towns to obtain a living, swelling the competition in the labour market there. He believed that a registration fee upon grain coming into this country would be exceedingly popular and would tend to increase the employment of the rural population. These were not views which he reserved for the House of Commons. They were views which he freely held and had conferred with his constituents upon. His constituents were an absolutely working class and industrial community, and they saw most clearly that the present condition of affairs was full of evil, if not of great danger for the future, as regarded the poorer and the working class population. He earnestly hoped that in his next Budget the Chancellor of the Exchequer would endeavour to do something to remedy this condition of affairs. Lord Rosebery himself had called serious attention to the decline of British trade and the increase of foreign rivals. The revenue raised by Customs Duties was scarcely less than 50 years ago. But the revenue raised was entirely paid by the consumer, because none of the articles upon which it was raised could possibly be produced in this country, and he appealed to the Chancellor of the Exchequer to consider whether the transfer of these duties to articles competing with our own trade and labour, instead of articles which do not compete with it, and upon which duties have to be paid entirely by the consumer, would not be more advantageous to the country at large.

MR. W. ALLAN (Gateshead)

regretted to hear the speech just delivered. He should have thought the recent dictum of the First Lord of the Treasury against Protection would have satisfied him, and that he would no longer have trotted out that bogey. He failed to find anything practical in the speeches either of the right hon. Member for Thanet or the hon. Member who had just spoken. The former talked about the material produced in other countries out-cutting British merchants and manufacturers, and he pictured the absolute ruin of British manufacturers. What were the facts of the case? Take the jute trade. It was thought at one time that by erecting mills in India, where jute was grown, manufacturers could outsell the British market, and especially the Dundee market. Dundee was peculiarly the centre of the jute trade; it was called "Juteopolis." [A laugh.] Certain capitalists went to India and built jute mills. They employed native labour, and ran their employés night and day, and worked them hours which would not be tolerated in any civilised country, to make dividends. Had they outcut Dundee? The manufacture of jute yielded as much profit as ever in Dundee. It could be manufactured cheaper in Dundee than in India, and wages were better in Dundee than ever. Whereas formerly jute operatives got £1 a week, they were now getting 34s. Then take shipbuilding. We licked the German shipbuilders into fits. [Laughter.] While our youths were learning their trade the young Germans were conscripts, serving their time in the army, and the result was our workmen could knock in two rivets to their one. What, then, was the use of talking about our trade going to the dogs? Take Norway and Sweden. We paid higher wages than were paid in those countries, and worked shorter hours, and their workmen could not touch ours. Then there was the iron and steel trade. Belgium was often held up as running this country very hard. He admitted that it was in some things. But as to rails, girders, and beams, we could undersell them and beat them on their own ground, although our workmen worked shorter hours and received better wages. Take coal-mining in the Rhine Valley. Why did we send hundreds and thousands of tons of coal to Germany if they could produce the coal cheaper? They could not do it, and, although our pitmen got higher wages, we could beat Germany in shipments of coal. Our pitmen could get two tons out of the ground while they were getting one. He pointed out that the cry of "Made in Germany" was likely to inflict injury on English manufacturers and workmen. As an instance of this he mentioned the case of an English engineering firm which had practically secured a repeat order for engines to be erected in a German manufactory, when the workmen told the employers they would strike if they made any more English machinery for Germany. If this cry were to be persisted in they would have other countries retaliating with the phrase, "Made in England," and decline to receive goods manufactured in this country. ["Hear, hear!"] In the genuine British, stuffs for which this country was famous, such as cloths, engines, ships, machinery and large manufactures, no other nation could touch us. ["Hear, hear!"] The hon. Member wanted to tax grain, but that was a thing which the working classes would never stand, while it ought to be the duty of every Government to give the necessaries of life at the lowest possible cost to the nation. Even if grain were taxed wages would not rise as a consequence, because during the time of the heavy tax on grain, workmen received less wages than they did now. He protested against the trotting out of this played-out bogey of protection, which was dead and buried, and which would never be resurrected again while the British people had common sense. ["Hear, hear!"]

* MR. B. L. COHEN (Islington, E.)

observed in the intensely interesting statement of his right hon. Friend there was one subject to which he made no reference, and to which he believed the country was expecting him to allude. He meant the rate of interest on Post Office Savings Bank deposits. On the 26th February his right hon. Friend stated that he had the matter under consideration, because it was clear the present regulations could not continue. He did not consider the matter immediately urgent, as it was only this year that a deficit had been shown on the account, and that was only small. But in the Trustee Savings Banks, as the House knew, there had been a deficit, which increased each year, for many years. His object, however, in raising the subject was because he desired, as he thought his right hon. Friend did, to do nothing which would discourage national thrift, nor which would divert the savings of the artisan classes to less sound investments, and because he was convinced the sooner the subject was taken in hand the less drastic would be the changes which his right hon. Friend would find it necessary to make. For example, at the present moment, out of 6,453,000 accounts opened at the Post Office Savings Banks there were only 248,943 above £100, and the deposits of these accounts amounted to £38,500,000 out of the £112,000,000 which, was the present total of the Post Office Savings Bank Deposits. One half per cent. reduction on accounts of over £100 would give nearly £200,000, which was so much above the probable loss for a long time to come, that for the present, at any rate, if the matter were taken in hand at once, it would probably suffice to reduce the rate of interest only on accounts of over £150. What they all wanted was to protect the small depositors. It was for these the Post Office Savings Banks were primarily designed, and it was in their interest that he hoped his right hon. Friend would take the matter soon in hand. There was no question of "charity," to use the term of the Chancellor of the Exchequer on 26th February. A small alteration, if enacted soon, would give the Exchequer all that was needed, and would protect the taxpayer from loss which, of course, he should not be called on to bear on account of the Savings Banks.

MR. T. LOUGH (Islington, W.)

desired, on the other hand, to thank the Chancellor of the Exchequer for not having listened to the advice of the hon. Member who had just spoken, to reduce the interest, on Post Office Savings Bank deposits. He earnestly hoped the right hon. Gentleman would persist in this refusal, and continue to pay the same rate of interest on these small deposits, giving the depositor the excellent security of the Government. The Banks, it seemed, were not satisfied with making the huge profits they now made, but wanted also to deprive the poor people of the advantage they had got in these excellent institutions of the Government. He fully approved of the announcement which the right hon. Gentleman had been able to make with regard to the improvements in the Post Office service, which would bring that institution into harmony with rival institutions abroad. He hoped that careful consideration would be given to the labour questions which would arise in carrying out the improvements. Turning to the Budget itself, he was greatly disappointed in it. The Chancellor of the Exchequer told them that the finances of the country had reached the largest amount they had ever reached. New taxes which were imposed two or three years ago were only just coming into full bearing now. In addition, they had great and splendid trade, producing the flourishing condition of the revenue, and yet the Chancellor of the Exchequer managed to fritter away all these splendid resources without giving any advantage in the Budget to any class in the community. He repudiated the remark of the right hon. Gentleman that of all the spending departments in this country the most expensive was the House of Commons. When the Chancellor of the Exchequer made that remark about the extravagance of the House of Commons (for which there was no foundation) he knew the right hon. Gentleman was going to suggest some extravagance of his own, and he did. He told them the First Lord of the Admiralty had threatened them with a further increase of the Navy Estimates, and had said that if a certain other Power built war ships the Government would have to take notice of it. Was that the extravagance of the House of Commons? Certainly not. It was the greed of the Departments which sat beside the Chancellor of the Exchequer. The right hon. Gentleman had already provided 22½ millions for the Navy, and why, therefore, provide another £500,000 out of the £1,250,000 of the surplus which he had left? He deprecated such a frittering away of the surplus. He was glad to hear the remarks of the right hon. Member for Bodmin with regard to this Naval matter. He would like to point out that a great responsibility rested upon the House, because they had the strongest Navy in the world, and if they chose to pause in the building of war ships then other countries would do the same. It was the one that was the strongest that ought to stop first. They started on one of those foolish shipbuilding programmes ten years ago. Since then they had spent nearly £50,000,000, and they had scarcely improved their relative position. The effect of their naval programme was to stimulate other countries to go on, and the farther they went the farther would other countries go. They had had this year the heaviest Army Estimates and the heaviest Navy Estimates. They had had an Army Loan Bill, and they were going to have a Navy Loan Bill, and then this little half-million, which the Chancellor of the Exchequer might have spent in so many useful ways, he chucked to these "dogs of war," to which so many other millions had gone. He would only refer to the expenditure of £200,000 on the South African expedition to say that he thanked the Leader of the House for the excellent language in which he referred to it. Nothing could be more desirable, and he hoped the Government would stand firm in its determination. The broad case he had against the Budget was that, while they had the largest resources that this country had ever shown, no reduction whatever had been made in the taxes. He was afraid the late Chancellor of the Exchequer was a little to blame for the extravagance of the present Government. He blamed himself for praising the Budget of 1894 in too enthusiastic a manner. It was only the principle of that Budget that he was entirely in favour of, and not the way in which the money raised by that excellent principle had been frittered away. He regretted that the Chancellor of the Exchequer had not reduced taxation. He believed a great many people had begun to think this had gone a great deal too far, and that, in a time of perfect peace, and when the natural increase of expenditure was so great, they might afford to dispense with some of the taxation put on in 1894. He believed the Chancellor of the Exchequer had again wilfully under-estimated the revenue in order that there might be a surplus next year, and in order to avoid the necessity of taking off any taxes. They ought to have a more careful estimate than they had, and he should be glad to see a change made in this respect. The most interesting part of the Chancellor's speech was the comparison he made with 60 years ago. He there treated the finances of the United Kingdom as a whole, but, personally, he thought it was lime that, in the national treatment of finance, they had some reference made regularly to Ireland, because everything in their national finances which was going in one direction in Great Britain was going in the opposite direction so far as Ireland was concerned. The Chancellor pointed out that in 1837 the total revenue of the country was £52,000,000, and that now it was about £102,000,000. The population had also doubled, and wealth had far more than doubled, so that the burden of this greater taxation fell with infinitely less weight than it did 60 years ago. But look at the Irish figures. In 1837 the Irish taxation was about £4,000,000. It was now £8,000,000, though the population had sunk to one-half and wealth had diminished in proportion to the diminution of the population. So that in Ireland to-day they were really collecting the taxes that they ought to collect if there was a population of 15 or 16 millions in the country. He asked the House to notice this extraordinary contrast between the two countries—a contrast which, in his opinion, made the greatest tragedy which, existed in any civilised country. That was a tragedy for which that House alone was responsible, and it cast the darkest shadow which would be cast on this splendid reign. The Chancellor of the Exchequer also said that in 1837 indirect taxation was 71 per cent., and to-day it was only 44 per cent. It was scarcely candid of the right hon. Gentleman to make that statement. In Ireland to-day the indirect taxation was 75 per cent. They were worse off to-day than they were in 1837. The right hon. Gentleman said that there was a great deal of smuggling in 1837. Wherever they found smuggling, it was the desperate effort of people who could not pay the taxes to get hold of commodities without paying taxes. [Cries of "No!"] The right hon. Gentleman said this smuggling had practically disappeared. As regarded Great Britain, yes; but if he had looked into the Inland Revenue returns for last year he would have seen that cases of smuggling in Ireland had increased in the last year to 1,388 from 1,107. The right hon. Gentleman then said they had taken the taxes off thousands of articles. [The CHANCELLOR of the EXCHEQUER: "Hundreds!"] Well, hundreds; and taxed alcohol, tea, and tobacco. They had, and that was how they had ruined and plundered the Irish. ["Oh!"] He would make good his point, but if he had used an offensive expression he would at once withdraw it. The relief given by taking off the taxes did not extend in anything like the same proportion to Ireland as to England. There were a great many articles taxed, not exactly in 1837, but 10 or 15 years previously, and that was just the same because the present system of finance commenced in 1817. There were a great many articles including necessaries of life, such as soap, bricks, and glass, taxed. The total tax on those articles about 1821 was 23s. 7d. per head of the population of Great Britain; it was 2s. 6d. in Ireland. To-day there was only 7d. collected in Great Britain and 4d. in Ireland. Ten times more relief had been given in Great Britain than in Ireland. It was by such means that the burden had been shifted on to the shoulders of Ireland. The whole of the Irish tragedy had been created in this reign. In 1837 the taxation per head of the population in Ireland was 13s. 6d., in 1897 it was 53s. The taxation had been doubled and quadrupled in Ireland while it had been reduced in Great Britain. Let him give figures to show how Ireland had been hardly dealt with. The taxation to-day on all forms of alcohol per head of the population in England was 16s. 8d., in Scotland 21s. 1d., and in Ireland 14s. 11d. If beer, whisky and wine were taxed at the same rate as in 1829, the tax would be, in England 26s. 6d., in Scotland 14s. 11d., and in Ireland 10s. 2d. The change then that had been made since 1829 had taken 9s. 10d. per head off the Englishman's drink, and had added 6s. 2d. per head to the Scotchman's drink, and 4s. 9d. per head to the Irishman's drink. To put it in another way, suppose that the spirit in drinks were taxed as the spirit in whisky was taxed, then England would pay £2 2s. per head, Scotland £1 8s. 10d., and Ireland £1 6s. 3d. To put it in a third way, suppose that the spirit in all alcoholic drinks were taxed as the spirit in beer was taxed, England would pay 9s. per head, Scotland 6s. 2d., and Ireland 6s. 7d. He desired to point the moral. England had managed the finances, and what had she done? She had cheapened her own drink and increased the tax on the Scotchman's and Irishman's drink. The taxation was not based on any intelligible principle. The principle England had adopted was to cheapen the stuff Englishmen like, and to put an increased tax on the stuff the other fellows like. By any honest principle the Englishman would have paid most, because he drank most. The English consumption of alcohol in the year was equal to 4 gallons of proof spirit; the Scotch to 2¾ gallons, and the Irish to 2½ gallons. Why this arrangement had borne so hardly on Ireland was, that the taxation had been constantly raised. He would admit that the tax was raised by the late Government and not by the present. [Ironical cheers.] It was indeed quite tragic that the Government which came in to do justice to Ireland had left in Ireland as the sole permanent monument of its existence four new taxes. The Inquiry which the Government had promised was delusive, because the injustice was still going on. Since the last Commission was appointed in 1894 the taxation in Ireland had been raised by £600,000. In the last financial year eight millions were collected from Ireland—a larger amount than had been ever collected before in one year. There would be great disappointment in Ireland that the right hon. Gentleman had made no reference to the case of Ireland, for the Debate on the Financial Relations was regarded as quite unsatisfactory. He would like the right hon. Gentleman to explain one phrase in his speech. The right hon. Gentleman said that the questions raised with reference to the financial relations might have to be dealt with, and they were very large matters. That was a much more sympathetic utterance than anything in the right hon. Gentleman's previous speech, and he hoped that it meant something.

* THE CHANCELLOR OF THE EXCHEQUER

I said after a full inquiry, which will, of course, be conducted by the Commission we are going to appoint.

MR. LOUGH

hoped that the right hon. Gentleman would not shut his mind to the very grave questions raised. If a common system were applied to two countries so different as Ireland and England, a great injustice must be done to one country. He did not wish to disturb the excellent fiscal system in Great Britain; but he did desire separate treatment for Ireland. It was said that that would involve the re-establishment of the Irish Customs House, abolished in 1847. But that would only be a nominal Customs House. He did not desire to interfere with the principle of free trade; but such a Customs House was necessary to adjusting the financial grievances, because by that means only could the true state of Irish trade be discovered. At present the Irish trade Returns were mixed up with the English. If the true facts were known, such a pathetic state of poverty would be revealed that the House would no longer hesitate to do full justice to Ireland. He did not ask that Great Britain should in any way pay for Ireland, but only that Ireland should not be taxed remorselessly, as she was in the present Budget, and. regardless of the fact that her wealth and population had disappeared. Direct taxation required no Custom House, and the Government could abolish the income tax in Ireland. [Ironical Laughter.] The details which were given in the Inland Revenue Return as to the collection of income tax afforded striking evidence as to the truth of the proposition that it was a most unsuitable tax to Ireland. In Great Britain the bulk of the income tax was levied on trade, and here it was more suitable for trade than Irish land. It was a British tax, and it was a great mistake ever to have extended it to Ireland. It was also a great pity that the Irish case had not received some attention from the Chancellor of the Exchequer, though there had been a rumour that the right hon. Gentleman was going to apply the Agricultural Rating Act to Ireland. He regretted that the right hon. Gentleman had taken no step in that direction, and he thought that the financial statement as a whole would be received with considerable regret by the great mass of the people.

MR. C. J. MONK (Gloucester)

while congratulating the Chancellor of the Exchequer on the extreme simplicity of his Budget regretted that he had not seen his way to abolish the small and anomalous tax on plate. The amount was only £55,000, and the tax fell mainly on the poor watchmakers. It was their unanimous desire to have the tax taken off, though he believed the jewellers wished it to be maintained, though this was hardly in n spirit of fair competition. The tax was imposed in 1758, and it appeared to him to be extraordinary that it had not long ago been abolished. It was now too late to make an appeal to his right hon. Friend, but he hoped the question would be considered another year. The tax had been condemned over and over again, and it had been brought to the notice of various Chancellors of the Exchequer during many years.

MR. EDMUND ROBERTSON (Dundee)

said he regretted that during the greater part of his hon. Friend's speech there was not a single Member from Ireland present to express approval or assent to the propositions he had made. He wished, however, to remind the Committee, as a Scotch Member, that they in Scotland had a great grievance which must arise at a later stage of the Budget discussion, and that was as to the appropriations of the equivalent grant in connection with the English grant to education. If it was the intention of the Government to give a grant in aid to Voluntary Schools in Scotland, and to ignore and repudiate the principle of their equivalent grant, he had no hesitation in saying that the Scottish Members would be unanimous in resisting that mode of dealing with their claim. Turning to the bearing of the Chancellor of the Exchequer's financial statement on the Navy, he did not accept the account which his hon. Friend the Member for West Islington had given of the history of the naval proposals in the House this Session. He did not admit that the demand made by the Chancellor of the Exchequer was one that was being forced on the House by the Admiralty or the Government. They had strong grounds for saying that the proposition was being forced on the Government and the Admiralty by the prevailing sentiment of the House of Commons. He repudiated the notion that the demand for this extra half million for the naval service was a demand which had been thrust upon the House of Commons by the Admiralty. He believed the opposite to be much nearer the truth. When the First Lord of the Admiralty submitted his naval Estimates to the House one most important fact was not made apparent, but was brought out by the right hon. Member for the Forest of Dean and himself. The casual observer would have imagined that there was no diminution in the Estimates in the provision for new construction, and yet, as a matter of fact, there had been an enormous reduction in the cash provision for new construction. It so happened that the naval plans of the Government for the present year were first published in extraordinarily minute detail in a newspaper early in the Session. The only respect in which the newspaper was wrong was in regard to new construction, and everybody came to the conclusion that alter the information was supplied to the newspaper there must have been some change in the plans of the Government respecting new construction. When he examined the Estimates he came to the conclusion that instead of keeping up new construction to the standard already existing the Government had reduced the cash provision for that purpose by a very large sum, approaching a million. That night they had before them a proposal which had surprised many Members. The deficiency was being made good, and £500,000 was to be devoted to new construction. He raised no objection to that, but he thought it right to draw attention to the fact that there was a deficiency at the beginning of the Session, which deficiency was now being supplied. The First Lord of the Admiralty, when the Estimates were under consideration, had uttered a kind of obiter dictum to the effect that the Government held themselves free to propose new construction if there should be any great development of new programmes in other countries. Now the Chancellor of the Exchequer had explained that the £500,000 for new construction was required because other nations were pushing forward their naval programmes. This declaration cast upon the First Lord of the Admiralty the obligation of showing that since the Navy Estimates were presented there had been a development abroad not of paper, but of real naval programmes. There was another point which called for remark. Two months ago they were given to understand that there was to be a new Naval Works Loans Bill this year, and the Chancellor of the Exchequer had told them that evening that the Admiralty had not spent nearly all the money to which it was entitled under the second Naval Works Act, which gave to the Admiralty, without limit of time, the power of spending 2½ millions upon naval works, During the past year the Admiralty, he understood, had only spent some £830,000 of this money, so there must be an unexpended balance of 1¾ million. How then came it to be necessary to have a new Naval Works Loan Bill this year? The Opposition, even if they did not object to that Bill or to the Military Works Loans Bill, were entitled to point out that the country would not have been driven to borrow money for urgent military and naval purposes if the Government had not squandered so much of their surplus in aiding special classes of the community. [Ministerial cries of "Oh!] If he had spoken earlier in the evening, he would have been templed to allude to what he might call the inflamed discussion which took place some hours ago as to the policy of the Government in South Africa. He had, however, heard with the greatest satisfaction that a speech had been made by the Leader of the House which put an entirely new aspect on the subject, and which made it incumbent upon him to keep silence on the subject until it could be brought up in a formal way. He would only say that he was alarmed by the terms in which the Chancellor of the Exchequer announced this additional military expenditure in South Africa, because the right hon. Gentleman appeared to connect it with the enforcement of what he called our treaty rights. He could not help connecting that statement with the deplorable letter from the Colonial Secretary, dated March 6, which appeared in the last Blue-book, and in which one of the alleged breaches of the Convention was referred to. He would ask the Committee to allow him to read a single sentence from that letter: — 2. The Accession of the South African Republic to the Geneva, Convention.—After Dr. Jameson's raid, owing to a report made by the St. John's Ambulance Association, Her Majesty's Government determined to invite the South African Republic to accede to the Geneva Convention, and the necessary instructions were sent to Sir J. de Wet, who, however, omitted to carry them out. The South African Republic on September 30th formally communicated to the Swiss Government, through their representative at the Hague, their act of accession to the Geneva Convention. Her Majesty's Government, in the circumstances, did not hesitate to convey the Queen's approval, but the action of the Government of the Republic none the less constituted a breach of the London Convention. [Ministerial cheers.] Hon. Gentlemen opposite cheered that. As a matter of law and common sense he challenged them to deny, first of all, that the approval of Her Majesty ratified any previous irregularities; and, secondly, that in this particular case the act they objected to as a breach of the Convention—

* THE CHAIRMAN OF WAYS AND MEANS

pointed out that the hon. Member was now going into details relating to a Blue-book the consideration of which, by the common consent of the Committee, had been deferred to a later day. Of course, he had no power to prevent the hon. Member from going into the matter.

SIR W. HARCOURT

said he had never heard of any such common consent of the Committee. There was a demand in this Budget for £200,000 for increasing the military armaments at the Cape, and unless that demand was withdrawn front the Budget the Committee could not be prevented from discussing it. [Cheers.]

* THE CHAIRMAN OF WAYS AND MEANS

said he had stated that, as a point of order, he could not stop the hon. Member from going into the matter; but, now that he was challenged on the matter he was bound to say that it was irrelevant at the present stage to go into the minute details of a Blue-book, and, therefore, he must, request the hon. Member to desist from going into them. ["Hear, hear!"]

MR. E. ROBERTSON

said that any request from the Chair would always meet with his approval. All he had to say about the matter was that he hoped that it was not one of the reasons that had led to this increased military expenditure that the Transvaal Republic had done what Her Majesty's Government had asked them to do. Such a position was too ridiculous to be taken up. [Cheers.] In conclusion he would only say that he had listened with the greatest admiration to the financial statement of the Chancellor of the Exchequer. He could hardly find language adequate to express his admiration of both the statements the right hon. Gentleman had made. He could only hope that influences such as his might prevail in the Party of which, at the present time, he was the chief ornament. [Cheers.]

THE FIRST LORD OF THE ADMIRALTY (Mr. G. J. GOSCHEN, St. George's, Hanover Square)

said that the hon. and learned Member who had just sat down said he should not enter into any discussion, of the incident which had previously taken place, and they watched him proceeding. They arrived at the conclusion that he was not a bad disciple of the Member for Monmouthshire. ["Hear, hear!"] The Government had no wish to shrink from the discussion, but he should not be surprised if many Members opposite repudiated the action of their Leaders. [Opposition cries of "No!"] The hon. Member said he should only read a single extract from the Dispatch. It was unfair to pick out one extract from one Dispatch and say it was a casus belli. A more outrageous proceeding he had never heard. [Cheers.] Perhaps it was a mere rhetorical flight of the hon. Member; he called it a deplorable matter, and then he did not enter into a general discussion. He was glad of the intervention of the Member for Monmouthshire, as it would give him an opportunity of saying a few words which he otherwise would not have been able to say. With regard to the naval question, he had told the hon. Member before—and he would ask him to do him the honour of accepting his statement as true—that there was no change whatever in the programme initiated by Her Majesty's Government even before the commencement of this year. Against that the hon. Member quoted a statement in a newspaper, forgetting that when he was in office there was purloined information. ["Hear, hear!"] The hon. Member suggested that there was some change of front in regard to their Estimates, and in support of this he quoted the statement in the newspaper. For that statement there was not a single atom of foundation. There had been no change whatever in their programme. The Chancellor of the Exchequer granted the money asked for by the Admiralty. They had their programme completed long before. The next point was that their new construction had been diminished by a million; but this was a mistake, and the hon. Member had been misled by the intricacies which prevailed in all naval Estimates. As to the hon. Member's statement that the £500,000 was grantd in consquence of some obiter dictum of his in reply to an hon. Member as to the abnormal efforts in other directions, it was notorious that naval expenditure had been increased not by paper programmes. If the hon. Member challenged him it might be necessary to explain; but he trusted that he would not take that particular course. He should be sorry to have to enumerate the grounds on which. Her Majesty's Government had felt it to be their duty to ask for this increase. ["Hear, hear!"] He hoped the hon. Member would not press for this precise information; but he could assure the Committee it had not been an afterthought that this £500,000 had been asked for. He had examined the comparative expenditure of European countries, and it was on that examination that they had made tins additional Estimate. Then there was a reference as to the Naval Works Bill; but the sum mentioned did not represent what was expended in any particular year. They had not spent all that they expected to spend, and that money would be available this year. It was distinctly stated last year that there would be a sum for new works. There was in contemplation new work and additional expenditure on Dover Harbour, and for that purpose a new Bill was required. It would be introduced before long; but the surveys had taken some time to complete, and the Admiralty were anxious not to come before the House asking for money until they were able to submit definite figures on the subject. ["Hear, hear!"]

SIR SAMUEL MONTAGU (Tower Hamlets, Whitechapel)

said the Chancellor of the Exchequer had brought forward in his able speech reasonable proposals, but of no great magnitude. He wished the right hon. Gentleman in his able Budget speech had included one, dealing with the Stamps on Bonds, and shares to bearer and on Bills of Exchange. On a former occasion he brought his views before the House and to the notice of Sir Alfred Milner, who did not differ with them. He trusted that the Chancellor of the Exchequer would in the near future equalise those duties and modify them. By so doing he would increase the revenue and facilitate trade. Bonds were treated very unequally as regards stamps. Some were charged with 10s. per £100, others, including Colonial, 2s. 6d. per £100, while an immense quantity were entirely free from Stamp Duty. The 10s. duty on Bonds issued in this country and on certain Bonds delivered here was too high. It led to evasion, or to the diversion of trade to rival countries. In either case the Exchequer suffered. If evidence of evasion or legal avoidance of this duty was required, the India Office could supply it. Many millions of Bonds issued by the Indian Government were free of Stamp Duty. Others indirectly issued by them with their direct guarantee paid 2s. 6d. and 10s. per £100. There were in existence about £13,000,000 of this class of security on which the high duty of 10s. had been paid. In order to avoid the charge for Stamps on a fresh issue, the Bonds falling duo were renewed whenever possible. If the rate of interest was changed the old Bond was still retained, and fresh coupon sheets were attached. This system would continue so long as this high duty was imposed, or until the Bond was worn out. If the duty were reduced to 5s. it might suit the companies to pay off the old Bonds with available funds, and issue later on fresh Bonds when the Money Market was favourable. On the other hand, an enormous quantity of foreign Bonds and Shares to bearer paid no duty whatever when delivered in this country. Such Bonds or Shares to bearer issued, and the dividends payable outside the United Kingdom, required no stamp; whereas the identical securities if issued here, or the dividends made payable here, must bear 10s. per £100 Stamp Duty. He saw no reason why a moderate Stamp Duty should not be universally imposed. The right hon. Gentleman the First Lord of the Admiralty, when he was Chancellor of the Exchequer, tried to obtain a revenue from these securities, but in a most vexatious manner. An adhesive stamp of 1s. per £100 had to be affixed to these Bonds and Shares annually whenever transferred or the inconvenience might be avoided by the payment of 10s. per £100 once for all. Very few could avail themselves of this option, and the troublesome tax was removed by the present Leader of the Opposition substituting an increased stamp on contracts. He was convinced that by such a uniform charge of 5s., the revenue would be increased, and our traders would not be handicapped to the advantage of foreigners. This conviction was supported by the opinions of permanent officials at Somerset House, and by Sir Algernon West and Sir Alfred Milner. He hoped the Chancellor of the Exchequer would consent to appoint a Select. Committee to consider the Stamp Duties. That Committee would make clear the effect on trade of the Stamp Duty on Bills of Exchange drawn out of the United Kingdom and payable out of the United Kingdom, but negotiated here. The transactions in foreign Bills had declined enormously of late years. He knew from his own experience that they were not a quarter of what they were 40 years ago. In 1895 the return from Bill Stamps was £626,000, and in 1896 it was £672,000. But in 1885 the return was £683,000, and in 1886 £637,000. These Bills of Exchange were international instruments of credit, and it would be of great value to the mercantile community if all countries were to have similar regulations in regard to them. As to the deposits in the Post Office Savings Banks, he urged that the interest on deposits of over £100 should be reduced from 2½ per cent, to 2 per cent. That would not affect the great mass of working-class depositors, and thrift was promoted more by the security than the rate of interest given. This high rate of interest, by attracting money to the savings banks, was detrimental to commercial interests; it involved loss to the Government and forced up the price of Consols to the disadvantage of the operations of the Sinking Fund. The saving effected by reducing the interest on the larger deposits would enable the Chancellor of the Exchequer to hold a large reserve of gold when gold might be difficult to obtain. A golden opportunity of creating this reserve was lost last year; but gold was still plentiful and could be gradually amassed by the Government.

MR. G. C. T. HARTLEY (Islington, N.)

said the problem of the Post Office Savings Banks must be solved before very long, for two reasons—first that we were drifting into a very large deficit on the part of the savings banks, and also that we were driving up the price of Consols to a point that would make it difficult to supply them. The idea that in past years the Post Office Savings Bank had been worked at a profit was well founded. When Consols were £92 or £93, as they were some years ago, there was no doubt that a considerable profit was made on the sums invested. The simple solution of the problem was that the present system should be stopped at once—that existing depositors should go on as they were, but that all fresh depositors should be paid a lower rate. He should be sorry if any step were taken that would appear to be discouraging thrift; but the reduction in the rate of interest would mean only a loss of about a farthing a week to the average investor. Another objection to the present system was that if the State invested the Post Office money in Colonial or Corporation Stock it amounted to the State guaranteeing that Stock, the result of which, would be that the price of the Stock would go up at once. The savings banks deposits were increasing at the rate of one million a month, and we were paying off the National Debt at the rate of three-quarters of a million a month, and at the rate we were going, Consols would, in a few years, be practically unpurchaseable.

MR. VESEY KNOX (Londonderry)

said some things had been done recently by the Transvaal Government which he could not palliate or approve of—things which ought not to be done by any modern civilised State, and which largely diminished the sympathy that some of them felt with President Kruger. One of those acts was the suppression of newspapers. ["Hear, hear!"] That was a policy which carried them back to the dark days, ten years ago, when the Conservative Party was coercing Ireland. [Cheers and laughter.] If the Irish people had the power then he felt sure they should have spent at least £200,000 in preventing by force of arms the suppression of their newspapers, and he could only commend the generous spirit of the English people in preventing a similar invasion of the liberties of English-speaking people in other parts of the world. With regard to the question of the savings banks, he would like to know how they had managed to pay 2½ per cent. on the deposits without actually incurring any loss? They did it by sweating Ireland. [Ministerial laughter.] In respect of the Irish Church Fund, they had refused year by year to reduce the rate of interest, and it was by means of the exaggerated amount of interest which for 20 years they had been receiving from an Irish charitable fund that they had made their account balance. English Chancellors of the Exchequer had for many years shown themselves adept in making their accounts balance, and making up a deficit by putting their hand into somebody else's pocket. He was bound to say there was no indication in the Budget statement of this year that there was to be any change in the policy which had been consistently pursued towards Ire- land. As to the retrospect in which the right hon. Gentleman had indulged, he did not begrudge the English people the enormous advances in their material and social prosperity which they had made during the present year, but he would ask them not to forget that during this reign Ireland had certainly declined in population, and, according to the Report of the Financial Commission, in wealth also. They in Ireland had no reason to look back with any satisfaction on the retrospect that had been suggested by the Chancellor of the Exchequer. There had been no more miserable period in the history of their country. They had had a famine, and, in addition, they had suffered from a slow process by which the life-blood of the people had been drained, which was worse than a famine. A great part of their sufferings during: this period they owed to the policy of Her Majesty's advisers, supported by the majority of the English people. So far as England was concerned, he believe it was true that the working classes now contributed very little taxation, but it was not the case in Ireland. At the present moment 75 per cent. of the taxation raised in Ireland was raised by indirect taxation, which was largely contributed by the working classes of the country. They talked about the prosperity of Belfast. But even there there were a large number of families in which the father, apart from the labour of the women and children, could not earn anything like 13s. a week. He would ask the Chancellor of the Exchequer to consider a few figures. It was not too much to suppose that such a family would consume 11b. of tea per week. On that they would pay to the revenue 17s. 4d. a year, and more was exacted from the consumer than was actually received by the State, because various middlemen must have their profit on the amount of the duty as well as the cost of the original article. On an ounce of tobacco a week the family would pay 8s. 8d. a year. A glass of whisky every second day between five persons, not all adults, would not be a large allowance. [Laughter.] He would not call a man a drunkard who had a glass of whisky every second day with the help of his family. [Renewed Laughter.] The sum payable in a year for a glass of whisky on that basis would be £1 10s. 5d., and the Irish peasant would pay considerably more in duty on articles of indirect taxation than the typical poor English family at the beginning of the reign, visions of whom the Chancellor of the Exchequer had conjured up. If it was the pride of their policy that they had relieved the sufferings of their own poor by lessening the burden of taxation upon them, why was it not, their duty to relieve the burdens which still pressed on the poor in the sister isle. He might be told that the articles of indirect taxation which he had mentioned would not have been consumed by the English poor at the beginning of the Queen's reign. Who compelled them to eat bread? A large portion of Irish people preferred potatoes. A large portion of the world's population got on very well without bread, so it could not be said that bread was a necessary of life, and the articles consumed by the English poor at the beginning of the century were not essentials of life. The Irish people were not compelled to use tea and tobacco, but they were necessary in a climate like that of Ireland. Though taxation in Ireland might be levied on a few articles, the Irish people paid more in proportion to their income than the English poor did on the thousand articles which were taxed at the beginning of the Queen's reign. In the case of income tax, still more of the Death Duties, there was a certain amount of graduation. The rich man had to pay more in proportion to his income to a certain extent than the poor man, but in the case of commodities it was the opposite way. It was considered according to the free trade system that specific duties should be levied and not ad valorem, and consequently, in the case of tea, they took fourpence whether the tea be worth in bond tenpence a pound or two shillings. He had never been able to understand precisely why that should be a necessary part of the free trade system. He saw in the United States that the Democrats, who were regarded as the more free trade of the two parties, had substituted ad valorem for specific duties in the Wilson as compared with the McKinley Bill, because they said ad valorem duties were fairer as between rich and poor. He saw that the Liberal Party in Canada, as one of the features of that magnificent Budget they had introduced—and it was the wish of all Members that they might be able to carry it through—were going to substitute ad valorem for specific duties. Therefore, he was bound to say, from the Cobden point of view, there was ground for reconsidering that anathema which was pronounced in the middle years of the century against ad valorem duties. It might be true that this system of raising their money by specific duties on commodities was a system which pressed less heavily on the vast trade of this great commercial country, but it was also true that that system pressed most heavily upon the poor of this country, and still more upon the poor of Ireland. If they considered it necessary for the maintenance of their commercial supremacy that they should keep up this free trade system, under which they had undoubtedly prospered, and if they considered as part of that free trade system they should tax the commodities of the poor, proportionately to their value, much heavier than the commodities consumed by the rich, then he said they ought to look about them to sec whether, without sacrificing their free trade system, they could give to the poor some other redress. Even if Ireland were not a separate entity and the Irish people only so many individuals, taxpayers and citizens of this country, then on that basis it was the duty of the Chancellor of the Exchequer, finding there were these individuals on whom this system pressed so heavily, to attempt, in his financial statement of the year, to give them some relief. The right hon. Gentleman, had made no such attempt, and there was nothing in the Budget to give relief to the people of Ireland. He did not suppose that there ever would be anything in the Budget of an English Chancellor of the Exchequer which would give relief to the people of Ireland until England was afraid of losing Ireland in the course of a foreign war. He was reading some time ago a letter of the Duke of Wellington, written in 1808, when he was engaged in military operations in the North of Portugal. In that letter the Duke wrote strongly to the English Chancellor of the Exchequer of the day, urging him, for political reasons, not to follow the advice of those who asked him to increase the taxation of Ireland. It was undesirable, in the opinion of the Duke, to increase the taxation of Ireland during the circumstances of those years. England was then in the throes of a death struggle with France, and it would have been dangerous to increase the taxation of Ireland to the pitch to which it had been raised now. But at the present day, England was not afraid that there was anybody on the whole face of the world who was likely to stir a finger to help Ireland. For this reason England continued to sweat and over-tax the Irish people, who were the poorest of the inhabitants of the United Kingdom.

* THE CHANCELLOR OF THE EXCHEQUER

The hon. Member who has just sat down and the hon. Member for Islington must excuse me if I do not on this occasion enter at length into the important question of the financial relations between Ireland and Great Britain. We have had a Debate on that already, and, no doubt, we shall have some further Debates on the subject. I will only venture to say with regard to the charge they have made against me of not considering the circumstances of Ireland in the comparison I made, that I did consider the circumstances of Ireland, and I stated that the advance of prosperity of which I spoke had not come to all classes of Her Majesty's subjects alike. But I entirely deny that it has come to no one in Ireland. There is a corner in Ireland—the north-east corner, Belfast, and its neighbourhood—which, in my belief, has prospered as much as any part of Great Britain. ["Hear, hear!"] If I am asked why the rest of Ireland has not been equally prosperous. I am afraid the only answer can be that we have not all prospered equally, the agricultural districts of the country have prospered least, and Ireland is mainly an agricultural country. My comparison of the Taxation on a labourer's family in 1836 and last year applied equally to Ireland as to Great Britain, because the commodities were those on which the rates of taxation were equal in 1836 in Ireland and in Great Britain.

MR. LOUCH

Not spirits.

* THE CHANCELLOR OF THE EXCHEQUER

I carefully excluded spirits from my comparison just as I did beer, and the articles I took were not concerned with alcohol of any kind. The comparison was perfectly fair with regard to the relief of taxation which has been received under the change in our fiscal system by the Irish labourer just as much as by the Scotch or English labourer. Some hon. Members have raised several questions in the course of the evening on which I would only say a very few words. My hon. Friend the Member for Gloucester and my hon. Friend the Member for East Finsbury asked me if I would consider the abolition of the plate licence duty. I have had a great many representations on that subject, both for and against the abolition of the duty. As far as I can make out, it is one of those rare taxes which those who pay it desire to maintain. [Laughter.] That being so, I confess I am rather predisposed against its abolition, particularly as the Exchequer would not lose, but the County Councils, who now receive its proceeds. I happen to know that the County Councils' Association are particularly desirous to retain it, unless I am willing to give them an equivalent grant in place of the tax. On the whole, I do not think there is a good case for the abolition of the plate licence duty. My hon. Friend the Member for East Islington and the hon. Baronet the Member for Whitechapel, have referred to the interest on deposits in Savings Banks. I have already stated in the course of tins Session that that subject is under my wry careful consideration. I am bound to say that the more I look at it the more I feel what very great difficulties are involved in it, and, as I said when I last addressed the House on the subject, I do not think any one of us would desire to reduce the rate of interest upon deposits in savings banks unless we were absolutely convinced that it was essential to the public interest to do so. ["Hear, hear!"] The matter is before me, and when I have any announcement to make in regard to it, it will, of course, take the shape of the introduction of a Bill. I am afraid I have introduced an element of controversy into the Debate this evening by the statement I made that I had to reserve £200,000 in my Budget for increasing the Imperial garrison in South Africa. I think the right hon. Gentleman the Member for West Monmouth, whom I have to thank for the kind way in which he referred to me, rather complained that I had mentioned the matter at all. I do not know what else I could have done. Last year, I remember, I was attacked by the right hon. Gentleman the Member for Wolverhampton for not having made any provision in my Budget for military expenses in the Soudan. At that time I had no reason to expect we should be called upon to pay anything: but this evening I knew that we were about to incur an expenditure of £200,000, which was not provided for in the Estimates, in South Africa, and which I should have to provide for in the course of the year. should not have been frank with the Committee if I had kept that fact back from them and if I had not stated it in the course of my Budget speech. I merely refer to the matter now, not in order to discuss it at all, because I understand that a very early opportunity will be given for a full discussion of the subject, but because, I really wish to defend myself for having brought the matter before the House in the Budget speech. I trust the Committee will be willing to take one of the Resolutions to-night. I understand there is a desire on the part of the right hon. Gentleman opposite that the Tea Duty Resolution, which is usually put first, should be withdrawn to-night and the Income Tax substituted for it. I hope the Committee will be willing to take the Income Tax Resolution, and then we can report Progress. ["Hear, hear!"]

SIR W. HARCOURT

I think the proposal of the right hon. Gentleman is quite reasonable, and I am much obliged to him for having made the alteration and reserving the Resolution in reference to the Tea Duty, because I, for one, desire on that to raise a discussion on the subject of indirect, taxation. I should be glad to know from the right hon. Gentleman, or from the Leader of the House, what form the discussion he has indicated in reference to South Africa, will take. Will it be on a Resolution or an Estimate, or in what particular way will that discussion be taken?

THE FIRST LORD OF THE TREASURY

I presume the proper way of taking the discussion will be upon a supplementary Estimate, which will be moved by the Under Secretary for War. I would remind the right hon. Gentleman that it cannot be put down to-morrow, and it cannot be put down for to-morrow fortnight, because that day is mortgaged to the Irish Members. Therefore we are shut in between to-morrow week and Friday, May 21. Of course, I will take whichever of these Fridays the right hon. Gentleman desires. If he takes Friday week then the discussion on foreign affairs cannot be taken on that day.