HC Deb 01 August 1900 vol 87 cc320-49

[SECOND READING.]

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read the second time."

*SIR W. HARCOURT (Monmouthshire, W.)

We have now come to what is certainly the last Supplementary Estimate of this session, although anybody would be extremely rash to say that we have come to the last Supplementary Estimate of the present financial year. But, as this session will be remembered —for good or for evil—as one of the most memorable financial chapters in the history of the Parliament, I think that this is the proper opportunity for taking some note of what have been the incidents of its financial existence. But before I advert to earlier matters I have some explanations to ask of the Chancellor of the Exchequer. We have had what are practically three financial statements, three fragmentary Budgets—one before the financial year was completed, one when the financial year was completed, and another after the financial year was completed. I have endeavoured to make what I believe the theologians call a harmony between the right hon. Gentleman's doctrines, with, I am sorry to say, very imperfect success. I have over and over again, with as much care as I have been able to devote to the subject, endeavoured to understand what the actual cost of this war was, what the estimated cost of this war was, and what is the financial provision that has been made for it. Upon not one of these heads have I been able to arrive at any satisfactory conclusion. I observe that originally the right hon. Gentleman, in his first Budget speech in March, put the estimated cost of the war at £60,000,000. That was repeated, I think, afterwards, in April; the Under Secretary for War gave the same figure some weeks ago in stating the Estimates to which this Bill is a corollary; and last night, I see by the papers, the light hon. Gentleman said that the present cost had been £42,000,000. I want to have an explanation upon these points. The provision that has been made for the war, according to the right hon. Gentleman, up to the time of this Bill is defective by £8,500,000.

*THE CHANCELLOR OF THE EXCHEQUER (Sir M. HICKS BEACH,) Bristol, W.

was understood to dissent.

*SIR W. HARCOURT

I will read to the right hon. Gentleman what his words were. He said in his speech, when he was introducing this matter, that he required, out of the £13,000,000 he asked for, £8,500,000 for what he might call South African purposes connected directly or indirectly with the unhappy prolongation of the war. Therefore, whatever provision has been made before this Bill was, according to this statement, insufficient to the amount of £8,500,000? Whether correct or not, these are the words.

*SIR M. HICKS BEACH

Would the right hon. Gentleman like me to explain?

*SIR W. HARCOURT

I think I can make plain what I desire to know in a moment. What I want to know is, is that to be added to the £60,000,000 which upon repeated occasions has been stated to be the estimate of the cost of the war? My hon. friend the Member for Carnarvon asked a question, to which he got an inadequate reply, and I have tried as hard as I could to understand from these triple statements what is the view of the Chancellor of the Exchequer himself upon this subject. But then, in the same statement, the right hon. Gentleman said, "We have got £6,000,000 in hand." Then, if you have £6,000,000 in hand, as he stated, for this particular purpose, you do not want £8,500,000 in addition; one would suppose that what you really want is £2,500,000 in addition to what you have got in hand. I want to know whether the right hon. Gentleman really does want, in addition to the £6,000,000 he says he has got in hand, £8,500,000, or whether he wants the balance between the £6,000,000 he has in hand and the £8,500,000. I defy anybody reading these statements to say which it is. If he wants £8,500,000 besides £6,000,000 then the cost of the war as now estimated is £68,000,000. Now what I want to ascertain is this—not so much what has been spent up to this time, for that is not material, but what out of taxes and loans has, independent of this Bill, been assiged to the expenses of the war. That is the first fact I want to get at. I will try to state what the position is so far as I can ascertain it from the figures which have been laid before us. In his first Budget speech the right hon. Gentleman said there was an estimate of £23,270,000 for the South African War, and of this he said £5,500,000 would be met from what he then estimated would be the surplus from last year. This surplus then, according to his Budget statement, was to form part of the provision for the cost of the war. Then, later on, he found he had a much larger surplus and consequently less deficit to meet in the coming year. He said at first, "I have got £5,500,000 and have £23,000,000 to meet, therefore the deficiency is £17,500,000." But then, finding himself possessed of a larger surplus by about £4,000,000, the deficit became £13,000,000, and not £17,000,000 as ho had first estimated. What I want to make clear is that he treated the probable surplus of last year as part of the cost of the war. Then in March the right hon. Gentleman, dealing with the finances of this year, said he expected to have a deficiency of £20,000,000, but in consequence of the anticipation of payments to the revenue he found afterwards that though the; deficit was £4,000,000 less in the preceding year it was £2,000,000 more in the present year, and the consequence was that altogether on the two years there was a deficit of £2,000,000 less than ho had anticipated. Finally, in his statement in April on what may be taken as the corrected Estimates, the right hon. Gentleman said his position at the present time was that he had a margin of £1,127,000 and borrowing powers, not then employed, of £5,000,000. That was what he had in hand to deal with in April last. I want to know what has become of that £6,000,000? The right hon. Gentleman stated at that time, in April, that he had taken the odd million —not on any definite estimate, for it was difficult to make an estimate—he took the odd million as a margin, with the borrowing powers for £5,000,000, to moot contingencies that might arise after April; the return of troops, I suppose, among other contingencies, but specifically he included reserve of ammunition necessary in consequence of the war. Then up to this point we have got the right hon. Gentleman with his estimates, so far as he could make them, necessary to bring the war to its conclusion. He still adheres, I believe, to the belief that the whole thing will be wound up in September, therefore there is nothing in that which should alter his calculations. He having made his estimates for the war to end in September, and having possessed himself of the £6,000,000 balance, comes now and says he wants £13.000,000 more, of which £8,500,000 are for purposes of the war. Then, I say, we want explanations of that. I daresay my analysis of his statements may be in correct, but that is what I make out to be the provision expended or not expended for the war. In the first place, there was a surplus of £10,000,000 in round figures, which would have been expended in reduction of debt, but was devoted to purposes of the war. Then there was £4,600,000 which would have gone to the Sinking Fund, but was suspended for the purposes of the war. Then there was the margin this year, upwards of £1,000,000; I think £1,125,000. Then there is taxation—"a small quantity of bread to a great deal of sack" —amounting in the financial yield to £14,000,000 including the arrears of the Income Tax to accrue next year. Then there were the Treasury Bills raised last year to the amount of £8,000,000 and renewed. Then there was the war loan of £30,000,000. Then there are the extra borrowing powers which he said he hoped he would not I want to use, but he has these in I hand. Now what does all this amount to? If you add these items together they come to not £60,000,000, but £71,000,000 as the provision in hand or employed for the war. On the top of that the right hon. Gentleman comes this week and asks in terms for £8,500,000 more in respect of the war. Now without some explanation there is confusion in the figures. From one sentence in the right hon. Gentleman's speech the other night I gather that he has got £6,000,000 to set against £13,000,000, and what we want to know is, why does he want £13,000,000 if he has £6,000,000 in hand? Why does he ask for the additional amount specifically for the war? Of course, what I have said is subject to any explanation the Chancellor of the Exchequer may give us; but I do submit that, when we have three financial statements difficult to reconcile, the House of Commons before giving; a Third Reading to this Bill, if it is to have any control over the taxation, expenditure, and debt of the country, should have a clear statement laid before it showing exactly the estimated cost, the actual cost, and the provision made for the war. This ought not to be left to loose statements that my intellect, at all events, finds difficulty in reconciling one with the other, and I think this is not an unreasonable demand which I hope the right hon. Gentleman will consider. It is quite plain that somehow or other he wants more money. That is a position which in a state of war in several parts of the world is with a Chancellor of the Exchequer not an unusual one, and so with a little coy reluctance the right hon. Gentleman tells us he is going to borrow. It is said borrowing is as easy as lying. It is the easiest transaction in the world. The latter is said to be an abomination, but it is a very present help in time of trouble. What is true of the one is true of the other, and though borrowing may be an abomination, it is also a very present help to an Administration in time of trouble. The courage of our soldiers is as of yore, but the courage of our financiers is not of the same character. The cost of fighting against the Beers is as near as possible the same as when we fought against the Empire of Russia. Fifty years ago our politicians and statesmen were, of course, far inferior to these of the present day, but at all events they had some financial conscience and some financial courage, and out of that £70,000,000 they provided £35,000,000 from taxation. We, who are so much wiser and braver, provide only £14,000,000 from taxation; they provided half, we provide less than a quarter. Different times have brought different manners. Well, this is the situation. The people of this country are willing to give their lives and their happiness in this cause; but there is one thing Her Majesty's Government think they would not bear to give, and that is their money. There is one thing which will not bear the test of a dissolution, and that is, taxation. Then we come to the question of borrowing. The right hon. Gentleman wants to borrow £13,000,000, but he has £6,000,000 in hand, and the amount, one would suppose, should lie £7,000,000, not £13,000,000. Assuming the borrowing, I approve his declaration that he will not make it a permanent borrowing, that ho will "earmark it as a temporary borrowing." That shows that as far as circumstances admit the Chancellor of the Exchequer has a sound financial conscience. He tells us that he has done it for this purpose—"he desires to point out to the Chancellor of the Exchequer of that day that at the earliest moment he is to make a provision for the redemption of the loan." An excellent principle ! I only hope he may be the Chancellor of the Exchequer of that day to act upon it. Then he says that "the provision for the redemption of the loan is to form a part of the first financial statement after the war in South Africa is happily over." That will be next April. The war will be over in September, and we shall have the financial statement as to the liquidation of the debt next April. How is it going to lie provided according to his view? He says that he is sanguine of recovering the cost from the Transvaal. But the Transvaal contains two populations. Whom is he going to recover it from in the Transvaal? Does he expect to recover £40,000,000 from the Beers? I dare say the right hon. Gentleman would like to do it, but, no doubt, he is familiar with the old proverb that you cannot got more out of a cat than its skin; and if he thinks that in the present condition of the Beers in the Transvaal he is going to recover from them the money he borrows I think he will be disappointed, and I do not think it is a hopeful prospect to extend to the taxpayers of this country. Does he expect to get it from his friends the Uitlanders? No, the Uitlanders in these circumstances would be more satisfied with their late administration than with that which is to take its place. Then he thinks that because the mines are uninjured this money will be paid by the mine-owners. If he thinks that he is going to get out of them the money that has been spent on this war I must be excused for veiling my opinion on the subject in the learned language—Credat Judceus Apella. I have my own doubts as to the Judœus of to-day. The right hon. Gentleman next says that he wants to have liberty in borrowing. With his present majority he is a chartered libertine, and they will give him, I have no doubt, what he desires. I agree that in the present state of the money market ho ought to be able to pay his money and take his choice. How much money he will have to pay when he makes his choice I do not think even the hon. Member for East Islington will be able to tell him. He will not touch Consols. He is quite right there. A year or two ago everyone was in a panic about the high price of Consols. It was said that there never was such a disaster as in having Consols at 114 and 115. There were alarmists who said that they would rise to 150, and then where should we be? As long as I was at all responsible for the finances of the country I could never see that the high value of the national credit was a public evil. We had all kinds of alarms about the Savings Banks, and it was said that if you get Consols up to this high price we must have a revolution in the Savings Banks legislation. This panic even affected my friends at the Treasury, and when it was necessary to justify the cutting down of the Sinking Fund, the excuse was the terrible price of the Consols in which you had to invest. Nothing more childish or more ridiculous was ever put forward in a solemn Government Memorandum. But I consoled my alarmist friends by saying, "Do not be too timid; you enjoy an Administration which will soon bring the value of Consols down." But speaking of Consols at 115, I suppose there are persons who believe that the thermometer is always to be at 93 degrees in the shade. I have great confidence myself in the vicissitudes of the seasons, and the right hon. Gentleman has been equal to the occasion. He has got Consols down to 97, and I have no doubt that in time he will rival the First Lord of the Admiralty, who succeeded in getting them down to 95. Then I think we shall hear no more of the Savings Banks Bill, which came to an untimely birth, and that there will be no difficulty in investing the savings of the country at a depreciated price in Consols. The right hon. Gentleman is quite right not to touch Consols. I do not think there is any man who can tell him what the price would be if he issued £13,000,000 in that stock to-morrow. Then he shies a little at the war loan. The right hon. Gentleman is a most generous antagonist, and he has testified to the value of the services that I rendered him with respect to the war loan. It is true that it was a confidential communication, but in these days of the new diplomacy the natural place which a Cabinet Minister chooses for a confidential communication is at the Mansion House in a speech addressed to the bankers. There he was good enough to recognise that by my contribution of £100 I had greatly supported the loan of £30,000,000, and that I had done it out of personal regard for the light hon. Gentleman and in my interest for the well-being of the country. Like a generous man he is grateful for small mercies, and I am glad that I should have rendered him that material assistance; and if I did good by stealth I do not blush to find it fame. I must confess, however, to the right hon. Gentleman that my object was not exclusively patriotic. I had another object. I wished to have my own personal barometer by which I could test the exact value of his financial arrangements. During the high tide of enthusiasm of this war I told him that I thought he had put the price too low, and that he might easily have got half a million more than he did. That was some weeks ago; but things have a good deal changed in the last few weeks. People do not seem to be so keen about the war loan as they were; and the loan which was at a high premium then is at a considerable discount now. I watch its fortunes with much interest, and the result of that investment; and I agree with the right hon. Gentleman that he had much better not try his war loan because it is impossible to say that if he was to issue £13,000,000 of a war loan he would be quite certain of issuing it at even 2½ premium. Again, I think he is right in the decision at which he has arrived. It is plain to anyone who understands these things that he knows very well that what he will have to do is to issue this money on floating debt of some kind or other, either Treasury bills or Exchequer bends, or some short security of that kind. I know that the right hon. Gentleman agrees with mo as to the evil of floating debt, because he and I together reduced the floating debt almost to a minimum. It stood in the time of the former Administration at £36,000,000. That is a great evil. When you come into a tight money market you have to pay a high price; and if he raises this money by £13,000,000 his floating debt will exceed £30,000,000. What price does he expect to get them at? There are gentlemen in the House who can tell him. His last price was 4 per cent. Does anyone say that that is the extreme price to which they are likely to rise? I do not profess to be an expert in these matters, but no one looking at the money business of the world can predict what the price of the floating debt will be at any particular time. I do not know what estimate he has made for the interest which in future he is bound to raise on a floating debt upwards of £30,000,000. The right hon. Gentleman has spoken of Exchequer bends. I am all for short currency of debt, but I cannot help recollecting that in the time of the Crimean War Exchequer bends were raised with a view to liquidation, and as soon as the time came for liquidation they were renewed. I rest with confidence on the hope that if the right lion. Gentleman is responsible for the financial affairs of the country next April he will lay before the House a scheme for the liquidation of the debt which during the present year we have incurred. That is a matter, in my opinion, quite apart from any party interests, of the highest consequence to the welfare and the credit of this country. Passing from this, I should like to make a few remarks upon the finance of which this is the concluding chapter this session. It is very remarkable how the financial aspect of the war began. When the Government entered upon the war in October their estimate for its conduct and conclusion was ten millions of money—I forget the number of men, but I do not think it was more than 10,000. That was their idea of its requirements. I am taking the figures as given by the Under Secretary for War. In February it was an additional twelve millions; in March thirty-one and a half millions; and now to that we have the figure of seven and a half millions of the Under Secretary for War and the figure of eight and a half millions of the Chancellor of the Exchequer. However, I am not at a question of half a million— I am looking at the figures as a test of the foresight of this Government as to the character of this war. They entered upon the war with a light heart and a lighter purse. In October they were satisfied they would have a military parade and a walk-over in the Republics for ten millions. It was not till February they discovered they must have twelve millions more. In the Budget in March the right hon. Gentleman put the gross cost of the war at twenty-three millions, towards which he had a surplus of five millions and a deficit of about seventeen millions.

*SIR M. HICKS BEACH

That estimate was till the end of the financial year.

*SIR W. HARCOURT

Yes, the 31st of March. Singularly enough, in that very March, they wanted thirty-one and a half millions more, and now they want seven and a half millions more. All I can say is that these figures do not spell prescience as to the character of the war on which they had entered. I am not going to-day—under no circumstances do I think it at all necessary or expedient— to discuss the origin of the war. I doubt very much whether at this time, or even; in this generation, a just judgment will be formed upon the war. It will be judged by these who live to see its results. Oh, you think you are going to be judged by a snatch dissolution. That is not the final judgment of a nation that has a, future. I have lived to see another great war. I remember the time when, in the streets and in the music-halls, the Crimean War was as popular as this war. No man could be heard to aver against, it, but half a century has elapsed, and the Prime Minister of England has avowed that at that time we put an equal sum of money upon the wrong horse. I say that, in the end, this war will be judged by its results, and the results of this war will depend upon the policy which attends its conclusion. That is all we can say to-day. All we can do is to contribute, as far as we can, to make that policy a wise policy. We are told—and that is all I will say upon the origin of the war, and it is unnecessary to discuss it under these circumstances—that the war was inevitable. That is a discovery which, oddly enough, was made after the event, and an inevitable Government has been the sport of inevitable circumstances. I am not myself a disciple of the inevitable in statesmanship. I am old-fashioned enough still to believe in the theory of causation, and I am not satisfied, with a defence which rests upon a purblind fatalism. If a great enterprise is undertaken with means ludicrously inadequate, if there is a lamentable breakdown in your hospital system, or if military disasters are repeated in the presence of an inferior foe, I. am not satisfied to be told, "We could not help it; it was inevitable." For my part, it hold with the great Roman satirist that "prudence and not fortune is the deity that guides the destinies of mankind." However, I admit it is of no use to attempt to argue with a bench of Predestinarians. They thought of disposing of this war for ten millions when they began. You would have thought from this estimate that they did not know anything about the resources of their antagonists; but they told us they knew all about their armaments, their Mausers, and. their Krupp guns, and, in fact, they told, us they knew they were armed to the teeth; yet ton millions was all they asked for for some six months after the commencement of the war. And in that war, for which ten millions were asked, I think the losses from all causes—killed, wounded, missing, and deaths from disease—have been as near as possible, as far as we can calculate, equal to the whole number of their foes. We are told sometimes—it is a favourite dilemma of the Colonial Secretary—that we must either approve the origin of the war and its prosecution, or oppose it altogether and refuse the means of carrying it on. Now that, with great respect to him, I will venture to say, is absolutely and wholly irrational. When your house is on fire it is not at all immaterial who set it on fire, but what you have got to do is to put it out. To say that you must approve the conduct of the person who set it on fire, or not put it out at all, or object to its being put out, does not seem to me to be a sensible proposition. In the same way, if the interests of the State are imperilled the first duty, in my opinion, of every man is to employ the means and to support the moans that shall put an end to that danger. That is my view on this subject, and it is a view which since the war began, I have consistently advocated. The question of ultimate responsibility remains, but the duty of dealing with the present danger, of quenching the flames, and removing the peril to the country, is imperative. That is a policy which is just, reasonable, and perfectly consistent. The House of Commons have voted, and they will always vote, in my opinion, the money, whether by taxation or by borrowing, which is necessary to bring this war to the earliest finish. I know that the right hon. Gentleman the Colonial Secretary has charged these upon this bench with having been willing to sacrifice the interests of the country when they were responsible for the government of the country. He brought a charge against the Leader of the Opposition—a charge he found it necessary to retract, but for which he has not thought fit to apologise. That is the right hon. Gentleman's way. But I must observe that my right hon. friend the Leader of the Opposition was not the chief offender. He had the misfortune to have an "imperious colleague" under whose evil influence he was guilty of a crime that was never committed. That imperious colleague does not ask or ex- pect any amends for that charge from the Colonial Secretary. He was good enough to say that the right hon. Gentleman had diminished the artillery of this country under the "compulsion of an imperious colleague who was seeking after popular Budgets." I am perfectly contented with the somewhat belated acknowledgment on the part of the right hon. Gentleman and his colleagues that the Budgets of the late Administration were popular—Budgets that the right hon. Gentleman and his friends neglected no means, but employed every, artifice, to defeat. What did the late Administration find? They found a deficient revenue, they found a neglected Navy, and a demand for an increase in the Navy, as soon as they took office. They met these demands not by the cheap expedient of borrowing, hut by calling upon the people for great sacrifices in respect of taxation, and that was the popular Budget of an imperious colleague, who coerced my right hon. friend into a crime which it is admitted he never committed. These are the sort of reckless charges which are manufactured upon the eve of a dissolution. If you want an example of the sacrifice of public interests to popular Budgets you must go to Governments who in times of great surplus cut down the Sinking Fund, which should have gone to diminish the Debt, and who appropriated that which might have gone to the national defence to favourite classes whom they are willing to subsidise. That was not the conduct of our short Administration, with its feeble majority. We met the difficulties in which we found ourselves, we called upon the nation for great sacrifices; we carried in this House— yes, and they could not reject it in the House of Lords—a popular Budget upon the surplus of which the right hon. Gentleman and his friends have been living for five years. Therefore, for my part, I am quite willing to accept as amends for the unfounded imputation he cast upon me his recognition that it was a popular Budget. I have no desire in this matter to introduce party recriminations. In the interests of the credit of the public life of this country I do enter, and I will enter, a stern remonstrance against this habit for electioneering purposes of inventing false charges and then declining to apologise for them. I am afraid that is a practice which is becoming more common than it used to be when I first entered political life. It is part of the new diplomacy. I am not an admirer of the new diplomacy, especially that particular feature of it. Now I turn to a matter which is more satisfactory and in which we can nil agree, and that is the courage, the devotion, the self-sacrifice which every class of the subjects of the Queen in this country, and in her dominions beyond the seas, have shown in the trials to which they have been subjected in this war. These people who believe that a long period of prosperity and peace depraves the fibre of a nation have seen that theory belied by the events of the past year. I have heard it said, and I am not sure it was not said by a member of Her Majesty's Government, that it was worth while to have the war in order to enjoy this spectacle. I do not go so far as that, I should not even be willing to set my own house on fire in order to see how my household would behave. I should be quite satisfied to trust to them without it. I think that is a poor consolation for all the suffering, the loss of life, and the sorrow which have been caused. I cannot, looking at this the final estimate of this session, fail to look back to where we were this time twelve months ago. If the estimates and, still more, the sad records of this war could have been before this House in August of last year I for one shall never part with the belief that there would have been a different temper and tone in dealing with the difficulties of that period, and that the result might have been very different from what it was. I am not one of the disciples of predestinarianism. What was the condition of this country in last August? A condition in which every man could rejoice. You had an unexampled trade, you had public credit high, you had the condition of the people in the matter of wages good, you had the necessaries and the comforts of life cheap, you had a revenue overflowing beyond the dreams of the avarice even of the Chancellor of the Exchequer. You had a surplus of ten millions, from which with its prospects you had the expectation of great relief to the people of this country. You might have granted them many a boon; you might have granted them relief from taxation; you might have granted old-age pensions. Such was the progress of the people of this nation as the result of fifty years practically unbroken peace. I know there are people who advocate war and annexation. Sometimes it is in the cause of Christianity, sometimes in the cause of civilisation; and when these hypocrisies do not take, then it is for the good of trade. I have had some experience in this matter, and watched it very closely, and my conclusion has been that war has never been the foster-mother of trade. We have heard from the President of the Beard of Trade that lie anticipates a decline in the trade of this country. I believe that that is borne out by the state of things at present in Lancashire. I have spoken of public credit. Nothing strengthens public credit so much as the knowledge that you are making constant provision for the reduction of the debt. In the last six months you have cut off provision for the reduction of the debt. In fact, you have cut off fourteen millions with old and new Sinking Funds of money which would naturally have gone towards the reduction of the debt. That has to lie added to the achievements of two Tory Governments—I beg pardon, Unionist Governments; it is the same thing—who had already depicted the Sinking Fund to the extent of four millions— we know in whose interest. You have borrowed forty-three millions of money, and by this Bill you add thirteen millions more. That is the change which has come over the situation and the nation within twelve months, and now we are told that these are what are called the final estimates—the winding-up estimates. The right hon. Gentleman says he has taken more than he wants; and therefore it is to be assumed that this is all we are to be asked for. Is there any man who believes that these are the final estimates? He must be very little versed in the precedents of the past or in the probabilities of the future. He says that he is going to leave in South Africa 45,000 men, of which 30,000 is for a permanent garrison. The first observation I make upon that is that if you are going to shut up for a long time 30,000 men in South Africa, you must raise 30,000 more men in England; but there is no estimate for that. And there is not merely the question of the estimate of the money, but the question of the enlistment of the men, and of that we hear nothing. As to the garrison in South Africa, I do not offer any opinion on that subject. I know that that territory is nearly twice as big as the United Kingdom, and 30,000 men in the midst of a discontented population will not be a very large proportion. If you are going to add to disfranchisement confiscation, then, in my opinion, it will be very inadequate; and if you are going to put on the top of that an attempt to levy thirty millions or forty millions of money upon that community, then the tax-collectors will want more than 30,000 men. It is not merely the money you have borrowed and the money you have spent, but we are told that there are going to be great claims for compensation. Who is going to pay the claims for compensation? We have heard nothing of that from the Chancellor of the Exchequer. He talks about recovering the compensation to be paid to all these loyalists who have suffered in the war. Who is going to pay it? We ought to hear something of that. But then there are the other odd 15,000 men who are not to be brought home. Who are they? Are they the persons who are to become settlers there out of the military forces? What is your authority for believing that there are 15,000 men who have had experience of South Africa, and who desire to remain there? We should like to have some explanation on that subject. I have talked to many, and I have read the letters of many, and the one chorus is, "Thank God we have done our duty to our country, and we hope we shall never see South Africa again." That is my experience on that point. But are these 15,000 men to have any support given to them? What are they to have for remaining if they choose to remain there? Are you going to give them confiscated land, or are you going to give them money, and, if so, how much money? Why in this estimate now put before us are we not told what is to be the cost of settling these 15,000 men? There again it depends upon the policy of your settlement. Do you believe that there is any English Yeoman who will allow himself to be placed down in South Africa in the midst of a hostile population alone? There are better places for him to go to than that. Of course, if you have a policy of confiscation, then there will be some inducement to the men to remain; but, in any case, you ought to give us some account of who these 15,000 men are, what they are to receive, and what is to be the inducement for them to settle. There is another thing which is not provided for in this final estimate. We are told that as the result of this war there is to be a great military consultation and a great military reorganisation. Will that cost nothing? The principle, so far as I have seen it, of this future military organisation is that each military man has his own plan which he considers the most perfect plan, and insists upon its adoption. The one thing they are all agreed upon is to denounce any check upon it, especially on the part of the Treasury. It is like the man who had got a watch and insisted upon it having no balance, with the result that it ran down at once. When you talk of final estimates of this kind it is perfectly obvious what is contemplated. I have already indicated that you must raise 30,000 more men to take the place of the garrison that is to remain in South Africa, and the demands which are made for military organisation may be of an indefinite character. Therefore I cannot myself accept for a moment the estimates and the Bill we have now before us as closing the capital account of the war in South Africa. Well, Sir, unfortunately, we are upon a review of our financial situation, and there is another matter—I can hardly call it a small cloud rising in the East—for which, a provision of £3,000,000 is made in this Bill.

*SIR M. HICKS BEACH

There is a large margin.

*SIR W. HARCOURT

Well, I should like to ask, what is your margin? We have not been told what that margin is. You had £3,000,000, and you ask for £8,500,000 for the war in South Africa; that is £11,500,000, and. then you have got £1,000,000 additional for the reserve of stores, and so on. If that is a proper calculation it fills up your £13,000,000. However, the right hon. Gentleman will explain that, because it is perfectly unintelligible as it stands. At all events, we have done a very formidable thing. We have opened a new war account in China. Into what that trouble may or will develop no man can say. I do not blame the Government for not declaring their policy in this case, because the facts are not known on which any policy can be founded. That, the besieged Ministers and their de- pendents must be rescued if they be alive, as we all hope they are, everybody will of course agree, and that these by whom they have been attacked and some of them murdered, must be punished if they can be discovered. Beyond that, the future is dark and gloomy. We have interests in China equal to, if not greater, than these we have in South Africa, and never was there a time when it was more desirable or necessary for the good of this Empire that we should have our hands free, and be able to make the influence of England felt in these regions as it ought to be felt. Never were we in a position more difficult to make that influence felt. We are in the position of a man with his arms tied behind his back. Our resources are greatly restricted. We have had recourse already to troops from India in Africa, and we have been obliged to have recourse to Indian troops in China. That is, in my opinion, a most mischievous practice for the interests of our Indian Empire. By adopting it you place before the Indian people this dilemma: either you are keeping an unnecessary number of troops in India at the expense of the people of India, who cannot afford it—and that is an injustice—or you are not keeping an unnecessary force; and then by removing a necessary force from India you are exposing her to perils to which she ought not to be exposed. Therefore, not now only, but in former days, I have always protested against the use of Indian troops for purposes that are not Indian. Well, you have this question of China to be solved by the concert of Europe. We know something of the concert of Europe. Up to this time the representatives of the concert of Europe at Peking have been occupied in nothing but competitive rivalry to see which could possess themselves of the largest fragment of the Chinese Empire, and then you are surprised that this is resented by the Chinese people. The Great Powers — I am speaking of them all — assumed that China was a corpse, and around that car-case the eagles were gathered together but that corpse has proved to be most dangerously alive. It is idle to speculate where we know so little, but it is clear enough that the ultimate questions which may arise in China may be more formidable than any we have had to meet in South Africa. But I will not hazard an opinion upon it. It may be the £3,000,000 provided for dealing with China will be about as adequate as the £10,000,000 you have provided for South Africa, and this may be followed by demands equally great. But behind and beyond all these things there is a matter of greater gravity than any to which I have yet referred. Statesmen of the highest authority and character have been impressing upon our minds over and over again this fact—that we are the best hated people in the world. Not by the Governments, but by the nations, which is a much more serious thing. In a speech of the Prime Minister to the Primrose League he represented to them that so great and so combined was this hatred that we might at any time be exposed to an ugly rush upon our shores from the nations of Europe. Such a statement as that has never in the history of this country been made by the Prime Minister of England. I do not say whether it is true or not; but that statement, whatever it is, is rather an unpleasant consequence of the régime of Imperialism which we have enjoyed for five years. We were told by the gentleman who is now Viceroy of India on this Government acceding to office that the mere fact of Lord Salisbury taking charge of the Foreign Office would produce a great calm in Europe; that everybody would be satisfied and everybody would be happy; that there would be a millennium, in which the lion would lie down with the lamb. But at the end of five years the Prime Minister comes forward and says we are the object of the combined hatred of Europe. And what is his remedy for that state of affairs? It is to be brought about by the Primrose League, who are to arm with rifles the peasantry of this country. That does not entirely reassure me against this syndicate of European hatred.

Non tali auxilio nec defensoribus istis Tempus eget. That is all the remedy for this colossal danger which is offered by the Prime Minister. Nothing could be more childish or more puerile. Why, Sir, if it is true that this danger exists, you must quadruple your Army and you must quadruple your Navy. What does it mean? It means that if each of four of the Powers builds an iron- clad, you must build four, or if each adds a corps d'armée to its land forces, you must add four. The remarkable thing is that when the Prime Minister made this declaration he said lie really could not understand the reason for that hatred. He ought to understand it. It has grown up under his auspices. "It was inevitable." That, I suppose, is the explanation given by the Government. There is another authority, greatly versed in foreign affairs, who holds the same opinion of the danger and of the universality of the hatred. Lord Rosebery, however, knows the cause of that hatred, and he has stated it in a celebrated speech. This is what he said, and it is deserving of the attention of the House and of the country— The British Empire needs peace. For the last twenty years, and still more for the last twelve, you have been laying your hands —observe these words— with almost frantic eagerness on every tract of territory adjacent to your own or which from any point of view you thought it desirable to take. That has had two results—I dare say it is quite right; but it has had two results. The first result is that you have excited to an almost intolerable degree the envy of other colonising nations, and in the cases of many empires, or many countries, or several countries rather, which were formerly friendly to yon you can reckon, in consequence of your colonial policy, right or wrong—and I am supposed to be rather a sinner in that respect— not on their active benevolence but on their active malevolence. That is the reason of the hatred given by Lord Rosebery. He then goes into a careful calculation as to what has been the addition of territory in the last twelve years by the process which he described as a process of "frantic eagerness to lay hands on every tract of country adjacent to your own," and he says it has resulted in "undigested Empire." That is a capital phrase. Nothing affects the body corporal more than undigested food, and the body politic with an enormous mass of undigested Empire knows no repose and enjoys no health. It is "undigested Empire" which he calculates has amounted "in the last twelve years to twenty-two areas as large as that of the United Kingdom itself"; and this is the very sound conclusion at which he arrived— That marks out for many years a policy from which you cannot depart if you would. Yon may be compelled to draw the sword—I hope you may not be, lint the foreign policy of threat Britain until this territory is consolidated; filled up, settled, and civilised must inevitably be a policy of peace. That was spoken four years ago. That was before unconsidered trifles like the Soudan and the two Republics were added to the "undigested Empire." In these sentiments I entirely agree. Is it not a strange thing that these great Empires should be possessed with such a lust of extended dominion, and that the greater they are the more hungry they seem to be for more? What Lord Rosebery calls "frantic eagerness" for acquisition of territory, and what Lord Salisbury rebuked as "the desire to fight everybody and take everything "—a desire which, he said, was the ruin of great Empires—seems to be growing upon the nations of Europe. What is the consequence? Their resources are strained to the uttermost, they leave no margin for dealing with the duties which belong to their dominion, the great possessions they already have are starved and mortgaged for these further acquisitions. Every nation seems to regard that which its neighbour acquires as wrong to itself, and the consequence is that state of active malevolence which is referred to in the passage which I have read. The interests of what, after all, is but a small and distant fraction of our vast Empire have absorbed all our resources in men; they have increased our taxation; they have accumulated our debt. What have they done for us? They have left us but a very narrow margin for dealing with the great possibilities of danger in China; they have compelled us to refuse, what in my opinion we desired and ought to have given, assistance to our Indian subjects. These are the results—I am not speaking of the present war, I am speaking of this land hunger, this craving for acquisition when you have not settled, developed, or done justice to the territories you already possess, and you are not able to do justice to the people to whom you are responsible at home. Is it not well to-day that in reviewing the situation in which we find ourselves these who are responsible for the fortunes of this nation, instead of inflaming popular passions and stimulating a spirit of wild and grasping ambition, should impress upon the public mind the great truth, that of all the interests of this vast and glorious Empire, the greatest interest is peace?

*SIR M. HICKS BEACH

Sir, we have listened to a very remarkable address, which reminds us of the old days when the right hon. Gentleman, in his best fighting form, used to delight us, although we might disagree with him, with his frequent interposition in our debates. Achilles has emerged from his tent, perhaps not entirely satisfied with the conduct of affairs by Agamemnon in his absence, and for the first time in my recollection for seven years the right hon. Gentleman has expressed his cordial approval of, and agreement with, a speech of Lord Rosobery's. The right hon. Gentleman, in the exercise of his right, has made this debate the occasion for a general review of the history of the country during, I think, almost the whole of our term of office. I had imagined that he might take exception to some such minor point as the mode by which I propose to raise the loan which I ask the House to sanction, but on that he had nothing more to say than that—which I heard with regret—in his little effort to aid Her Majesty's Government in their policy in South Africa he had, unfortunately, missed his market. But the right hon. Gentleman naturally and properly devoted a very large portion of the earlier part of his speech to inquiring as to the expenditure upon the South African War, and the means by which we propose to provide for it. On that point I hope presently to satisfy the House. But I think the main object of his speech was not financial. The right hon. Gentleman told us, to my great astonishment, that he had no desire to introduce party recriminations into this debate, and yet, within five minutes after that agreeable announcement, he made the Loan Bill a vehicle for a personal attack upon my right hon. friend the Secretary for the Colonies, who is always, perhaps not unnaturally, the object which all the sections of the party opposite unite in attacking.

*SIR W. HAKCOURT

I defended, myself, an attack on the right hon Gentleman by an imperious colleague.

*SIR M. HICKS BEACH

It struck me that there was something in the speech of the right hon. Gentleman of that very invention for party purposes of which he accused my right hon. friend. He told us that he would not discuss the origin of the South African War. And what did he at once proceed to do? In a manner to which we are very well accustomed he begged the whole question of the origin of the South African War. He took it for granted that we began it.

*SIR W. HABCOULT

I did not say that.

*SIR M. HICKS BEACH

What the right hon. Gentleman said was that the war was undertaken by us with means ludicrously inadequate, that we in October entered upon the war with an estimate quite insufficient. But we did not begin the war at all. It was begun by the invasion of Her Majesty's territories by the Transvaal and Free State Governments, and I demur entirely to the mode in which the right hon. Gentleman, while professing to decline to discuss the origin of the war, begged the whole question as to the responsibility for it. He ridiculed the idea that the war was inevitable. Let him ask the hon. Baronet the Member for the Berwick Division of Northumberland, or the right hon. Member for East Wolverhampton, who sit on each side of him, what their views are on that subject. There are some very near him who believe it was inevitable. He charged us with undertaking the war with inadequate means. We did not undertake it at all. If our means were inadequate at the commencement it was because we desired and believed in peace. Ths right hon. Gentleman said the war would be judged by its results. Yes, it will be. But he will not be the historian on whose history the country will judge it. Sir, the right hon. Gentleman has taken this opportunity, while disclaiming party advantage, of making a pure electioneering speech from the "Little England" point of view. What was his argument? It amounted to this:—"You have thrown away millions on an unnecessary war." Let the country judge of the necessity. "By doing this you have tied your hands so that you cannot defend the interests of the country in China, where we have greater interests, perhaps, than even in South Africa." The right hon. Gentleman forgot—perhaps he does not know—that although we have 200,000 men engaged in South Africa, our Navy is free, and there are more troops at the present time in this country than there have been for many years cast. What is the policy the right hon. Gentleman would recommend to the country? It is the policy of scuttling out of all our difficulties whenever and wherever they arise. What is the bribe he holds out to the people? This, that "if you do scuttle out of these difficulties and do not; provide for a war which is a necessary war if we are to maintain our Empire, then we will reduce your taxation, we will reduce your debt, we will give you old-age pensions, we will subscribe five; millions to the sufferers by famine in India—we will do all these things." That is the speech of a right hon. Gentleman who disclaims any party purpose ! I will not attempt to go into that part of the speech of the right hon. Gentleman beyond the observations which I have already made. But when the right hon. Gentleman asks me what provision I have made for the war in China, and says I have provided no more than three millions, I venture to refer him to what I said a few days ago on that very subject. I then said the estimate of my right hon. friend the Under Secretary for War of the expenditure which might be entailed upon us by the present condition of affairs in China was three millions. I told the Committee, in introducing this Bill, that I was asking for a considerable margin of borrowing power beyond what was required by the Estimate before the House —to the extent, indeed, of six millions. Out of that six millions I intimated at the time, and repeat now, that I consider a large portion is asked for for possibilities—I will not put them higher—in China, in the promotion of the policy which I indicated to the House.

SIR W. HARCOURT

You appropriate throe millions for China, and now you say you have a margin of seven millions. You say you have £8,500,000 for what I may call South African purposes, added to the £3,000,000 in China. That is £11,500,000. Then you have besides £500,000 additional stores. What is your margin?

*SIR M. HICKS BEACH

I am afraid I have not made myself clear to the right hon. Gentleman. He asked me to place before the House a full statement as to the estimated cost of the war in South Africa and the ways and means which we had provided to meet it. I will endeavour to reply to that question, and I hope that if I do not make myself clear he will let me know as I go on. I may remind the House that last autumn we voted, in Supply, a grant for the war in South Africa of £10,000,000, and last February £13,000,000—£23,000,000 in all. Besides that there was expenditure charged on the Consolidated Fund for interest on the Treasury bills for £8,000,000— namely, £217,000—making a total expenditure on the South African War last year of £23,217,000. I am speaking all through of estimated expenditure because, as the right hon. Gentleman will understand, it is too soon to talk of actual expenditure. At the commencement of this year Supply was granted by the House for the purpose of the war of £37,797,000. Besides that there was charged on the Consolidated Fund interest on Treasury war bills £250,000 and £619,000 interest on the war loan—total £869,000—making in all, in the current year, exclusive of the present Supplementary Estimate, £38,666,000. These two sums added together make £61,883,000. Then, in addition to that, we have to add the Supplementary Estimate recently voted of £7,440,000, making £69,323,000. I must ask the House to bear in mind that these are estimates and not actual expenditure. Now, Sir, I will take the other side of the account and show how that has been and is to be raised. In the first place, the surplus of last year was £9,335,000. Then the difference between the total revenue and ordinary expenditure of the present year, taking into consideration the suspension of the Sinking Fund, amounts to £16,125,000, making the total sum raised by taxation for the purposes of the war in the two years of £25,460,000. By Treasury bills last winter we provided eight millions, and out of the proceeds of the war loan £28,423,000,altogether £36,423,000; by Treasury Bills recently issued, under the powers given us by the War Loan Act, we have provided £2,000,000 more; and out of the supplementary war loan which I am now asking for we shall provide the balance of £5,440,000, or a total provided by taxation towards the war, so far, of £25,460,000, and by loan £43,863,000, making a total amount of £69,323,000, balancing the other side of the account far as the estimates for the South African War are concerned. Then I have left £1,127,000, the unused balance of the war loan; £3,000,000, unused borrowing power's under the War Loan Act; and £7,560,000, borrowing powers under the present Bill, out of which to provide for three millions estimated for China, for a considerable margin which I will put at four millions for the same purpose, for a million and a quarter for Naval Supplementary Estimates—for £200,000 for the Ashanti Expedition and £1,090,000 Supplementary War Estimates not directly connected with the war; besides other minor Supplementary Estimates. I think I did not sufficiently discriminate between these two parts of the estimate of the Under Secretary for War which related to the expenditure on the South African War and expenditure for purposes not directly connected with the war. That £1,090,000 was for permanent huts for soldiers in this country, for barracks at Khartoum, additional payments to Volunteers for camping in England this summer, and some payments for barracks in Mauritius. Then I went on to explain to the House that I had a second need for asking for a large margin of borrowing powers in this Bill. Borrowing powers of £7,000,000, plus the £5,000,000 of borrowing powers which I took in March and did not utilise in March, and the £1,000,000 of surplus on the war loan proceeds, would have made up the £13,000,000 to which the Supplementary Estimates of this month amounted. I am sorry I cannot explain this more clearly.

SIR W. HARCOURT

But £3,000,000 for China, £7,000,000 of borrowing powers for South Africa now, and £6,000,000 of old borrowing powers, make more than £13,000,000. Will the right hon. Gentleman lay on the Table an I official Paper giving the total amount of the moneys which have been raised out of taxation, or surpluses, or loans, or from any source, and the purposes to which they have been attributed? Such a Paper we ought to have, and if he will give it to us it will be much more satisfactory.

*SIR M. HICKS BEACH

I am perfectly willing to do that. It shall be done at once. But I would explain that, in addition to the extra borrowing powers for £5,000,000 given last March, and to the £1,000,000 unexpended out of the proceeds of the war loan, I have deliberately asked in this Bill for £6,000,000 borrowing powers beyond the amount of the total Estimates of the year and the Supplementary Estimates which have been presented, including, of course, in that sum all those other charges besides the South African War. With regard to that war, the figures I gave as to the total cost and the means by which it has been met afford a clear statement. I have asked for the extra borrowing powers not merely on account of affairs in China, but also because it is necessary for me to have at my command some temporary means of borrowing while the revenue is accruing and the proceeds of the war loan are accruing.

SIR W. HARCOURT

That you will only want for six months.

*SIR M. HICKS BEACH

Yes, it is to finance the Exchequer during that time. The right hon. Gentleman has blamed me very much on the ground that the proportion of expenditure on the war borne by taxation is very small when compared with what was raised by our ancestors by taxation at the time of the Crimean War. The right hon. Gentleman says we have only raised £14,000,000 I of the cost by taxation, while for a war costing about as much our ancestors raised one-half by taxation. I entirely demur to the contention that we have provided only £14,000,000 out of taxation.

SIR W. HARCOURT

Additional taxation.

*SIR M. HICKS BEACH

If you devote a surplus out of existing taxation to the war, it is as much raised by taxation as if it were additional taxation. The financial doctrine of the right hon. Gentleman is one which I am surprised should he suggested to the House. During the Crimean War, in the year 1855, at just about the same period of the year as this, Sir George Cornewall Lewis, who was then Chancellor of the Exchequer, was obliged to bring in Supplementary Estimates for more than £6,000,000 in addition to the original Estimates of the cost of the war for that year. How did he provide for them? Exactly as I do—by borrowing on Exchequer bills. Therefore I do not think that the right lion. Gentleman is quite fair in the comparison which he has attempted to draw between our financial cowardice and the financial courage of our predecessors at the time of the Crimea. The right hon. Gentleman then referred to the prospect of recovering from the Transvaal any part of the cost of the war, and he rather suggested to the House that I had held out hopes that the whole cost of the war would be so provided for. I have never said anything of the kind. What I have said is that when the war is over, we should obtain from the taxation of the Transvaal a substantial contribution to the cost. The right hon. Gentleman seems to think that that will be impossible. I do not think so, and he did not think so last March.

SIR. W. HARCOURT

I hoped it would be possible.

*SIR M. HICKS BEACH

The right hon. Gentleman not only expressed a hope; he concurred most strongly in my idea that it should be done. I entirely admit that there will be other charges on the Transvaal besides this. There will be the charge for compensation for the injury done to the property of loyalists in Natal and the Cape, and that is a charge which should undoubtedly come before any contribution to this country for the cost of the war. But in my belief there will be means for a substantial contribution for both purposes; and beyond that it is impossible to go now. Then the right hon. Gentleman asks why we do not provide in the present Estimates for the cost of settling some of the troops now in South Africa, and for the military reorganisation which he anticipates when the war concludes.

SIR W. HARCOURT

I asked for an estimate.

*SIR M. HICKS BEACH

Obviously these are matters which do not relate to the present time. They are under the consideration of the Government now, and I dare say, whoever may have the duty of making proposals with regard to the Estimates next year, will have to call the attention of the House to both these subjects. But that they should be included in a Supplementary Estimate for the present year is impossible.

SIR W. HARCOURT

I did not ask for that.

*SIR M. HICKS BEACH

Then I do not understand his object in asking for an estimate.

SIR W. HARCOURT

I was looking to the future.

*SIR M. HICKS BEACH

The right hon. Gentleman looked to the future and to the past, and to both from a purely electioneering point of view. I am perfectly ready to lay on the Table the statement which the right hon. Gentleman desires, because the matter is extremely complicated by the fact that it was necessary for mo to bring in my Budget one month and a half earlier than usual in order to anticipate as far as possible anticipatory payments of taxation, and to make the provision required at the moment for the expenditure of the war. The right hon. Gentleman would have been the first to blame me if I had asked for that provision without making a full financial statement. That was the reason of a Budget which could not include an accurate statement of the revenue and expenditure of the previous year. But now the right hon. Gentleman blames me for bringing in fragmentary budgets. The circumstances made it impossible for me to do anything else. As soon as the financial year had concluded I made a full statement of the actual revenue and expenditure, and now I have placed before the House Supplementary Estimates, which are necessary in time of war, for the expenditure as far as we can foresee it; and I have explained the measures by which we intend to provide for that expenditure. I hope that the principle of the Bill will commend itself to the House, and that it may now be read a second time.

Question put, and agreed to.

Bill read a second time, and committed for To-morrow.