FINANCE BILL.

HC Deb 12 May 1902 vol 107 cc1435-82

Adjourned debate on Amendment to Second Reading [12th May] continued.

(9.0.) MR. BROADHURST

I do not simply rely on the cases I was mentioning before the adjournment. In my own home we are paying 2d. a stone more for breadstuff than previously, and therefore the evidence I have been able to submit to the Treasury Bench on this point is pretty near complete. The theory of the Chancellor of the Exchequer that no one would be the worse for this increase of taxation is to my mind entirely dispelled by what has actually taken place. You cannot get over the fact that bread is dearer, and that other things have been stiffened in price in consequence. I entirely, strongly, and determinedly oppose any tax on the necessaries of life of the poorest class of workers. The other day one of the minor poets in this House, in answering a communication from a constituent, wrote, "He who taxes bread should lose his head." (An HON. MEMBER: He has lost his head.) I think it might fairly be put in that form, and it has been clearly proved by recent events in the centre of the Conservative County of Lancashire.

Now, are you going to offer exceptional benefits to one class of traders as against other classes? I represent a great industrial community, the stape trade of which is shoe making. Shoes are imported in large quantities from America free of duty. Why should the poor shoemakers of Leicester have their bread and sugar taxed, while the very articles which make it more difficult for them to earn a livelihood are admitted free? What explanation can you give of this fact to these people? What about hosiery? It is well known that large quantities of hosiery are imported from Saxony and other parts of the Continent. Why-should the hosiery hands of Leicestershire be taxed on their bread and yet have Saxony goods brought free into this country in competition with their industry? A few years back a great controversy arose in this House with regard to the supply of hosiery goods, made, it was discovered, in some of the prison establishments of Saxony. Why should these people of Leicester be taxed to assist the Chancellor of the Exchequer in his lame Budget over expenditure incurred in a cause which many of the electors strongly condemn and disapprove, and have done so for the last three years? I used to represent Nottingham, the staple trade of which is lace. Why should the lace makers of Nottingham be paying a tax on their bread, while French, Spanish and Swiss lace goods are imported into this country free of charge?. You cannot stop where you are. If you favour one section of the community at the expense of another you cannot rest at that point. You must go on till you have taxed all round, or if you do not you will be continuing a grave injustice to those who have to meet foreign competition. I am not advocating a tax on lace, hosiery, or other ready-made goods imported from abroad, but I am condemning this tax on the food of the people because it causes one section of the community to suffer at the expense of another section.

I do not know how the Government will explain the position. If they will only make haste and wind up the business of the session, abandoning some of the terribly controversial and destructive measures which they have now under consideration, and appeal to the country, we will tell them how to get one of their dilemma. They will be able to leave their liabilities and the debts created by their crimes and their folly for other people to pay. And then it will be seen that they can be paid in some other way than by taxing the food of the people. Some of the poorest people in this country are now paying one-twelfth of their present income as additional taxation to pay for the debts created by the Government, and I venture to say a more shameful proposal has not been made in the history of Parliament for the last fifty years. Surely there are other sources of taxation if the Treasury had only had courage to face the difficulty. The Chancellor of the Exchequer tells us that beer, spirits, wine and tobacco will not bear a further increase of even a Id. That is all nonsense, everybody knows that they are capable of still further taxation. Let us take the licensing system. We constantly read of licensed premises, the value of which has been created by law and by monopoly, increasing in value by leaps and bounds, while the licence charges are ridiculously low and absurdly cheap. Why not increase the taxation on these licences and make it proportionate to their value? There is at present no comparison in the proportion of charge for the ordinary beer house and the great taverns which change hands at £20,000 and even £30,000. Surely that would be better than taxing the bread of the people. Again, we have the land values, the ground rents, royalties, and way leaves, which might be properly taxed, but the Government are avoiding these lest they offend their own followers. They only put the tax on food because they think the poor are unorganised and unable therefore to protect their own interests. Take the case of stamps. I am not sure that on its merits a special duty on cheques for sums above £5 or £10 might not well have been defended on its merits. But it was absurd and ridiculous to put it on cheques for lower sums, for it would have been a factious restraint on trade. But the people who deal in cheques are organised and so their protest has proved effective, but the poor farm labourers, the riverside, dockside, and casual labourer has no organisation so he is to be taxed on the first necessities of life. This question of the bread tax is one of the most monstrous I know of. It is well known that labourers depend for nine-tenths of their existence on bread. That and the vegetables produced in their garden they mainly live upon. Meat is only an occasional incident in their lives, so that in taxing their bread you are putting an unequal proportion of the burden on them as compared with other classes. I sincerely hope there will be such a manifestation from the other side of the House as will demonstrate to the Government the weakness of their position, and lead them to drop this tax on bread as they have dropped that on cheques, if not in shame and humiliation, at any rate in such a frame of mind as will prevent them ever again attempting to impose taxation on the very lives of the labouring classes.

(9.10.) MR. KEARLEY (Devonport)

A fortnight since the Chancellor of the Exchequer threw out the gibe that no one had attempted to show in any way that this duty was Protective. I must say that on that occasion he gave us a very poor opportunity of doing so, for when he made the remark he had risen in succession to the great speech delivered by the right hon. Gentleman the Member for East Wolverhampton, and I think he rose quickly with the idea of obliterating the effect that that speech had undoubtedly made on the minds of those who heard it. Now I wish to point out that the tax is a Protective one. The right hon. Gentleman the Member for East Wolverhampton laid down the general proposition as to what constitutes a Protective tax. He pointed out that if you impose at the port of entry a tax on an article also produced in this country, which you fail to levy here, you are going against the principles of Free Trade. That statement has not been refuted; indeed, it is un-answerable.

Now, I shall endeavour to prove that this tax is not only Protective but that its intention is Protective. My hon. friend the Member for one of the Divisions of Bedfordshire quoted an extract from a speech delivered by the Chancellor of the Exchequer in reply to the representations made to him by a deputation of flour importers in this country. Since then another colleague of the right hon. Gentleman has been expressing his views in the country as to the desirability of jutting a Protective duty upon flour. The Minister of Agriculture, in pursuit of the policy he has announced of meaning business in his Department, addressed the farmers of Norwich on Saturday last, and said this tax on flour would do a great deal to bring back the milling industry to this country, and that the tax would not increase the price of food, while it would give the farmer his offal. I regret the Chancellor of the Exchequer is not here. I have made three speeches on the Budget, and he has been absent each time. But I will point out to his custodian that in taxing flour imported into this country he is doing something which he does not perhaps comprehend. Is he aware that the English millers are compelled to mix a certain percentage of the flour which comes from America and Manitoba with the English flour in order to produce the flour which is in demand, and that, consequently, if this impost is decided on the English miller's trade will be injured? The Chancellor of the Exchequer, in introducing his Budget, pointed out that formerly when the tax existed the correlative duty on flour was 4½d., as against 3d. on wheat. He said the correlation was based on the average quantity of corn it took to make a certain amount of flour. I presume that that is the basis on which he is proceeding at the present moment. But he has raised the correlative duty on flour to 5d., and the reasons he gave for it were extraordinary. He said, in the first place, that the milling circumstances of this country had hugely changed, and that whereas in the past milling was done by stones, now it was done by a much improved process. He further made the astounding statement that the extraction under the old system of milling was as high as 80 per cent., while under the modern system it was only 72 per cent. He said it was therefore necessary to equalise the duty as between flour and corn, by raising the correlative duty on flour to 3d. But the extraction by the old system of milling was nothing like so high as he mentioned, and on the other hand under the modern system it is higher than it ever was. The correlation that existed under the old duty of 4½d. on flour, and 5d. on wheat, was established so long ago as 1828, when the sliding scale on wheat, ranging from 1s. to 25s. per quarter, was fixed by Act of Parliament. In those days, too, the duty was levied not on the basis of weight, but on that of measure, and 38½ gallons were estimated to weigh 289 lbs.; consequently 289 lbs. of raw material was estimated to give 196 lbs. of flour. Upon that correlation the duty was fixed and it continued on that basis until the corn laws were abolished. When ther registration duty was finally abolished in 1864, Mr. Gladstone substituted weight for measure, but it continued to be worked on precisely the same basis.

I think that I may claim to have shown that the Chancellor of the Exchequer was wrong in his statement as to the relative amounts of extraction under the old and the modern systems, and that therefore he was not justified in raising the correlative duty from 4½d. to 5d. Taking his own figures, however, I am now going to show that he sets up a discrimination against flour imported from our colonies. Take 100 cwt. of wheat at 3d., and bearing in mind the extraction he suggests, you get 78 cwt. of flour on which the duty is 5d. There remains 28 cwt. of offal. There is a discrimination against flour of 22 per cent., and if you take the flour and offal together you get a discrimination of 50 per cent. Is not that Protection? What are we protecting against? I do not know whether the right hon. Gentleman is aware that our colonies are very large importers of flour, to this country. Canada has built up in the last 25 years two of the largest milling enterprises in the world, the Albany Mills and the Lake of the Wood. The right hon. Gentleman stated that practically America had no alternative but to send her flour over here. That is not absolutely the case, but it is true in regard to Canada and Australia. Canada cannot send her wheat to the United States because of the high tariff, and consequently her raw material must come to this country. We are talking of doing great things for the colonies in return for the splendid loyalty they have displayed. Yet here we are taking the first opportunity to create a preferential tariff against our own colonies. What ought to be done? If the Chancellor of the Exchequer thinks that there is no Protection in this, then he must amend his tariff', and if he wants to make a proper correlation between flour and wheat, he must reduce the duty on flour from 5d. to 4d. I suggest the proper duty would be wheat 3d., flour 4d., and offal 2d. Even then there would be a discrimination of 40 per cent. between wheat and the other two components. I repeat that I am sorry the right hon. Gentleman is not present, for I should have been glad to got some reply from him on these points. He is not unfamiliar with them, for he has met deputations representing the great importers who take enormous quantities of flour, both Canadian and American. I am almost ashamed to take up the line of argument as to who is going to pay for this tax: it is so thoroughly well understood that the consumer is going to pay. I think that before this Budget is finally disposed of we shall have argued this from every point of view, and, unless the right hon. Gentleman is fortunate enough to have a fall of 2s. or 3s. in the market, we shall convince all hon. Members that the burden is going to be paid by the consumer. He may endeavour to show good reason why the tax should not fall on the consumer, or, if it does, why it should only be a temporary burden on him. Indeed, it will probably have been noticed that even time the right hon. Gentleman speaks he brings forward some very ingenious argument. The right hon. Gentleman has stated that he thinks competition will bring this trade to its proper balance and that those who have I put up the price will be left behind by the rest of the trade. The right hon. Gentleman has given us evidence in support of his contention that there has been no rise in the price of bread. The figures he has put before us, in my opinion, have been more than a justification of what we allege, and it wilt require far more ingenious arguments than the Chancellor of the Exchequer has used to convince the consumer that he is not going to pay this tax. I do not think that the right hon. Gentleman brings in any expert knowledge upon this question, for the only support he has brought forward is the argument of the First Lord of the Treasury, whom we all regard with kindly feelings, although we do not regard him as a typical authority upon trade in this country. The First Lord of the Treasury has never appealed to me as a gentleman well fitted to give a first-class opinion upon a first-class commercial matter. He says that the idea that this tax will fall upon the consumer is an economic fallacy of the grossest character. We have just had the experience of the people of Bury, and they appear to have come to the conclusion that this tax is a heavy impost upon the food of the people. I understand that those who are students of the doctrine of economics are people with plenty of leisure, and they always take good care that they never take the responsibility, for good or evil, of putting these doctrines into practice on their own account.

I am no student of political economics, but I do claim to have had some practical experience of how these matters work out; and in reply to the First Lord of the Treasury I will give an illustration of the practice which is in vogue in respect of these articles which are now being assailed. Those large importers who were talking to the Chancellor of the Exchequer the other day make their purchases direct from the miller. What is the basis upon which they buy? They are having cable communication with their principals continually, and the man who ships the goods has nothing to do with the duty, and he does not take it into consideration. But when the goods arrive in this country the importer immediately comes into contact with the duty, and he has to pay the shilling. Prior to this imposition he had no obligation of that kind. He had no capital to invest in that direction, and no establishment expenses to pay; and nobody can deny that he is justified in taking some additional profit upon the goods to cover not only the shilling but his outlay of capital and time and energy in the direction I have just mentioned. Consequently, the importer pays the duty, and after charging these additional expenses he sells his goods to the merchant. Therefore, the flour comes to the merchant at a duty-paid price, and bears not only the 1s. duty but also the additional profit of the importer. In the ordinary way the merchants are in the habit of taking a minimum trading profit on the cost price of the article. Supposing the merchant was buying before the duty was put on the 20s. After the duty he would probably have to pay 21s. 6d. or 21s. 3d. Of course, the merchant will also want his additional profit, and this goes on all along the line down to the retailer. Consequently, there must be quite another 1s. added as representing intermediate profits. This means that the £2,600,000 which the Chancellor of the Exchequer expects to realise by the tax is going to be duplicated by another £2,600,000 be-fore it gets into the hands of the final distributor. The final distributor will take another profit, and if we could trace this all through we should find that in the end the consumer will not only pay the duty itself but more than double the amount of the duty in addition. This is a serious matter, and I think we shall be able to prove to the country that this is not a mere trifling tax, and that it is not merely a question of a 1s. duty, but that it involves very much more.

We have heard it stated that the price of bread in some places has gone up a halfpenny per 4lb. loaf. That means 4s. a quarter, or four times the amount of the duty. Therefore, if you multiply by four the £2,600,000 which this tax is expected to realise, you will get what the consumer is going to pay by this tax. The Chancellor of the Exchequer said that in the days of the Crimean War our tariff contained hundreds of articles, but in one twelvemonth, while the right hon. Gentleman has been in office, we have added to the permanent tariff of this country no less than eighty-three taxes. This registration duty is responsible for the addition of no less than fifty-two new taxes to the Customs tariff-Therefore, when the right hon. Gentleman makes this comparison of an adverse character in regard to the articles taxed in the time of the Crimean War, he cannot be aware of the far-reaching effect of this registration duty. He calls this tax a registration duty upon corn and flour. I presume that is the short title, but if anybody studies the Resolution they will at once notice that this tax is very much extended, and it is made to apply to all starchy substances used as articles of food. As a matter of fact, it goes much beyond this, for it includes articles that are not starchy, such as locust beans and dextrine, and many articles which were not in Mr. Lowe's tariff'. We are entitled to know how far this proposal is going to carry us. What has the Chancellor of the Exchequer done? I presume hon. Members have examined the Finance Bill as it is printed. They will find in that Bill that, instead of having fifty-two articles corresponding to the Customs tariff, the Bill only contains about twenty articles, and leaves out about thirty which ought to be included. I want to know what our position will be in Committee if thirty out of fifty-two articles have been omitted in the Finance Bill. I want to move in Committee an Amendment including locust beans and dextrine. One of them is not mentioned, and I am not quite sure about the other. The Chancellor of the Exchequer ought to give us an opportunity of having before us every article which corresponds with the Customs schedule at the Customs House.

The right hon. Gentleman twitted us, when he introduced his Budget, that last year we tried to raise the cry of taxing the food of the people, and he said that as the people rejected it then, so they would reject it upon this occasion. The people have recently had an opportunity of expressing their views at Bury, and as other opportunities crop up we shall find that the country is emphatic in its condemnation of this system of taxing the food of the people. We were told last year that the working man was proud of the amount he was contributing to the taxation of the country. I admit that many of them have approved of the war, and are in favour of keeping up an invincible Navy, but they are not blind to the fact that the ordinary expenses of the country have increased by many millions, and they have also heard how the money voted for the war has been squandered. They have heard of the remount and other scandals, and these things have gone deep into their minds, and they do not see why their food should be taxed in order to liquidate such mis-management as this. The people wish us to expose this tax, and offer to it a most uncompromising hostility. I do not say this in any obstructive spirit, but we intend to fight this tax line by line, and whatever may be the result of our action in this House, I feel sure in this course we shall finally receive at the hands of the people their approbation.

(9.50.) SIR EDGAR VINCENT (Exeter)

I desire to take this opportunity of congratulating the Government upon the decision which they announced on Friday, which I think has an important bearing upon the financial administration of the country. I refer to the decision of the Government to appoint a Committee to consider the machinery for the examination of the Estimates. I sincerely hope that the terms of reference will be sufficiently wide to enable good work to be done. Turning to the Amendment proposed my right hon. friend the Member for West Monmouthshire, there are two points which may, I think, be considered as legitimate subjects of regret. The first is that he has not confined himself to a condemnation of the imposition of the corn duty under the present circumstances, but he seeks to commit the House to hostility to the imposition of Customs duties on all articles of prime necessity as food of the people. It appears to me that those words are susceptible of various interpretations, and they might be construed into a condemnation of the tax upon tea and sugar. I imagine that the right hon. Gentleman does not propose at the present moment to interfere with those taxes. Had he confined himself to a mere condemnation of the corn tax, I should certainly have supported him. I decline, however, to bind myself to support a vague Amendment which might, in my judgment, cause considerable embarrassment to our financial administration in the future.

SIR WILLIAM HARCOURT

My words refer only to the various articles I connected with corn and flour which were referred to by the last speaker.

SIR EDGAR VINCENT

I quite understand the right hon. Gentleman's explanation, but I still submit that the words are capable of another interpretation and they might without undue straining be applied also to tea and sugar. I regret that this debate has been brought on before the discussion of the general financial condition of the country and the financial policy of the Government. It appears to me to be difficult to discuss the proposals of the Government to meet the financial necessities of the hour without coming to a clear opinion as to what those financial necessities are. Would it not have been more logical and more instructive to have settled first the condition, of the patient before proceeding to discuss the remedy? I sympathise with the right hon. Gentleman the Chancellor of the Exchequer in his desire to increase the proportion of the cost of the war which is paid from revenue, and to diminish the proportion for which recourse has to be had to borrowing. I would observe, however, that it is somewhat late in the day to make such a proposal in regard to the cost of the war when it has already been in progress three years, and when it has now arrived at a stage at which it is not unreasonable to anticipate that it will be brought to a speedy conclusion. I would also say that an additional argument against the immediate necessity of new taxation is to be found in the expectation which is based upon the declaration of the Chancellor of the Exchequer, that a considerable contribution to the expenditure of the war will be made by South Africa. I do not entertain any exaggerated opinion as to what that contribution will be, but we are entitled to consider the official declarations, made from the Treasury Bench, that a sum may be expected from this source which will make a considerable difference in the position of the account.

If the argument against immediate taxation is not considered sufficient, there is a further one which appears to me to be of a more convincing character. I hold that the House of Commons is justified in refusing to increase the scheme of taxation at present existing, until it has been able to ascertain more clearly than it now has done that the vast sums already voted to the Executive are expended with economy, and in such a manner as to produce the maximum of I efficiency. I see no reason to alter the opinion which I have submitted to the House on several occasions, namely, that our present system of control is lamentably weak and inefficient, and I believe that it is not only wise, but it would be good statesmanship on our part, to insist upon proof being shown that a maximum I of efficiency has been secured, and that the money has been expended with a due consideration to the interests of the taxpayer, before we consent to increase the burdens of the people. The Chancellor of the Exchequer, in the speech in which he introduced the Budget, stated that the crux of the position was the necessity of increasing indirect taxation. I believe that the crux of the situation is the necessity of increased vigilance and prudent thrift. If this House would establish a good system of financial control, and if it would exercise the right which it undoubtedly possesses of revising in a critical way the various Estimates submitted to the House I believe that it would dispose in the course of a few years of a far larger sum of money than can possibly be realised by the imposition of a 1s. duty on corn, or by any similar financial expedient. I will assume for a moment that the contention of the Chancellor of the Exchequer that an increase of indirect taxation is necessary is correct. I will admit it for the purpose of argument. The question arises whether this increase of indirect revenue should be obtained by high duties on a few articles, or low duties on a much more extended list. The effort of every Chancellor of the Exchequer who has held office during the last century since the time of Pitt has been to restrict by every means and power the field of interference with commerce, and to render as many articles as possible entirely free for men to deal in. But I gather from the various measures which have been put forward by the Government last year and this year that the present tendency of policy is somewhat toward the reversal of this tradition. New methods have been adopted, and it would seem as though the aim was to establish a large number of duties not of very great extent upon nearly every article of large consumption. Well, I view with great distrust the diminution of the list of articles in which men in these islands may trade and barter freely. I know the reply will be that the duty is light and that the actual burden on trade is insignificant, but outside the actual net cost of the duty I submit that the increased interference of Customs officers is in itself a most potent and undesirable impediment to the exercise of Free Trade. I believe that the great commercial prosperity of this country is due, not alone to the freedom of our commodities from taxation, but also to its freedom from those harassing formalities and restrictions which everyone who has any knowledge of foreign Customs Houses knows to be absolutely inseparable from the administration of an extended tariff.

The Chancellor has defended this measure by two arguments, both of which appear to me unsound and unconvincing. He has stated first of all that this duty of 3d. per cwt. on corn is so small that it hardly constitutes any infringement of principle. I do not think that a very solid argument to put forward, it is called a registration duty, but it is impossible for anybody to deny that the tax represents 4 per cent. on the value of the corn, rising in some cases to 5, 6, and 6½ per cent. Under modern trade conditions it is undoubted that a tax of 4 per cent. is a very considerable impediment to business, and if it is contended that such a small percentage does not count, I would submit that the argument can be turned another way, and if 4 per cent. is not important, and does not raise the price to the consumer, surely that line of argument leads to the imposition of 4 per cent. all round. If it docs not increase the price in the case of corn, why should it increase the price in the case of any other commodity. The second argument by which the measure was supported was that it does not constitute any approach or progress towards Protection or Fair Trade, but I would ask the right hon. Gentleman from what quarter the most enthusiastic support to his proposal has come. I think the most vehement applause with which it has been greeted proceeded from those who regard the present tax as a mere instalment, a mere stopping stone, to higher duties upon more numerousarticles. I confess that those gentlemen who take this view of the question appear to me to have more reason on their side than the right hon. Gentleman the Chancellor of the Exchequer. For they contend with some show of reason that no man would infringe so important a principle in order to attain such a small result did he not intend to proceed on the same lines at no very distant date. It would be strange, indeed, if while those who most enthusiastically support the measure, and while all those who oppose it, agree in the view that it constitutes a grave question of principle that the right hon. Gentleman should alone be right in asserting that it is a matter of mere financial expediency.

This tax is either proposed as an expedient or a principle, and it appears to me that in either case it is equally to be condemned, If it is an expedient, I consider it to be a paltry one and the financial result is not adequate; if it is a principle, then I say it is vicious. The right hon. Gentleman, in his speech, was at great pains to show that this duty would not increase the cost of corn to the consumer, and he quoted elaborate tables, both in introducing the Budget and in his speech today, to show that the price of corn had not been affected by the imposition or by the abolition of the duty, but I really think the right hon. Gentleman must realise that the figures he quoted only prove one thing, namely, that the fluctuations in the price of corn largely exceed 4 per cent. in any one year, and he produced absolutely no argument to show that in the duty protected area the price of corn will not be higher than if the duty was not imposed. No attempt has been made to show this, and I am bound to say that until further proof is given that the cost of this tax does not fall upon the consumer I remain convinced that the consumer will pay the full amount, or possibly more than the amount that, will come to the Exchequer. My general comment on the case for the defence is that when so able a disputant as the right hon. Gentleman condescends to produce arguments of this character there must be a great dearth of good reasons for the action he has proposed.

I shall not venture to detain the House any longer on the present occasion. There are many things which I think require saying on the general financial position, but I understand that they would not be in order this evening. I would venture in conclusion to make one request to the Government. It is that if the negotiations now being carried on with the view to peace should end successfully the Government will then reconsider their scheme of taxation. The pressure of expenditure in South Africa will then be somewhat relaxed, and I venture to think they will do wisely if they retreat in good time from what I consider to be a perilous and illogical position. Let them withdraw the proposal, which I cannot but call foolish and retrograde. The right hon. Gentleman has already first modified and subsequently withdrawn his suggestion respecting cheques in obedience to an agitation among the wealthy classes. I am convinced that the turmoil created by that proposal is nothing compared with the disturbance which will be caused by the corn tax among an infinitely large class. I hope that more prudent counsels will prevail, and that this tax will not be proceeded with, because I consider it a tax, not only fraught with danger to the financial prosperity of this country, but as one which cannot fail to be disastrous to the Conservative party.

(10.6.) MR. MOULTON (Cornwall, Launceston)

Like all those who believe that this tax is one of the most unjustifiable and most injurious of all import taxes, it was a great pleasure to me to hear the last speaker throw the great weight of his financial knowledge on our side. Having no right to speak as a financial authority, I am going to take a different point in the debate, Some of the arguments that have been put forward, markedly by the Leader of the House in the previous debate, and also by the Chancellor of the Exchequer to-night, in defence of the tax, were on the ground that it was impossible to show that it would come upon the consumer, and that it was so small that it could inflict no evil. I join issue with both of them. There is no import tax that I know where it is more possible to show to demonstration that ibis falls wholly, if not exaggeratedly, on the consumer; and so far from its producing no effect, the more you examine into it you will see that the effect will be inexorable and cruel.

The speeches of the members of the Government convince me that they have never thought of this tax in all its industrial incidence. They have no doubt faced the charge of taxing the food of the people; but that is only one point about this tax. I can imagine a tax upon food—that is to say, on articles which can be used for food—in which it would be impossible to say that the whole of the tax was borne by the consumer, but that is not the case with this tax. The peculiarity of this tax is that it is a tax on the cheapest food of the people. It is a tax on the food to which they have recourse when they are so low in the struggle that they are actually fighting with starvation. We all know that wheat and flour, which are the chief subject of this tax, and to which I am going to confine my remarks, are the cheapest staple food of the people in England. From this there follows a most remarkable economic consequence which few people realise. It has passed almost into a saying that when price goes up consumption goes down. The very opposite is the case when you tax the cheapest food of the people. The more price goes up, the more consumption goes up, and I will tell you why. It is because people are driven more exclusively to live on their cheapest food. If I wanted proof of it coming from the months of those who are certain to suffer, I should find it in the letter which was read by the rght hon. Gentleman the Member for East Wolverhampton today. It was a letter from a poor workman's wife, and she was lamenting that under this tax bread would go up. And what was the consequence of bread going up? Shall we eat less bread? No, she said, we shall never be able to get our weekly bit of meat. What is to take the place of that meat? They would be obliged to have dry bread in place of that meat. Therefore, because of the tax the price of bread goes up, and the poor are compelled to eat more bread. That is a strange peculiarity of the case when we are dealing with the cheapest food of the people, the more you raise the price the more exclusively have the people to take refuge in it, and a larger consumption is produced in consequence. But this leads to another remarkable consequence. I will take a case of something of the nature of food—if you like a luxury—I will suppose for instance that you were to put 2d. on the can of canned peaches. The persons who produce them would know that at the higher price fewer would be bought, and they could not keep up their trade. The consequence would he that in order to keep the market going and to keep up the demand for the article, they would not dare to let the retail price be 2d. higher and they would be obliged to be content that some of their price for producing them should be taken away. They would make sacrifices in order to keep their market. There it could be proved that the producer would have to bear a portion of the tax, because he could not get his market if he threw the whole of it on the consumer. He has to coax his market, and therefore he has to bear part of the tax himself. But the market for the food of the poorest stiffens when the market goes up, because the people are driven more than ever to confine themselves to it. There is no coaxing of the market there. The baker knows that they must take bread, and that they must take it all the more because it is dear. They cannot take meat or other things because they are more costly, and the consequence is that the baker knows that he has not to be afraid of his market, and he puts the whole of the increase duo to the tax on to the purchaser. The middleman knows that he is not to lose his profit, and that his market is just as big as ever. The middleman and the producer know that the baker does not need any coaxing on account of the stiffening of the market. As soon as you get a market that becomes more eager as the price goes up, you will see that the whole of any increase of the cost, whether due to a tax or not, must fall on the consumer.

Is there any exit from that line of argument? There is only one, and I warrant that we are saved from that being urged against us. If the rise in price drives people to hunger, and not to substitute for their more luxurious foods plain bread, and if the weekly bit of meat is dropped out, and no bread is taken in its place, there might be an answer. But this only means that the poor pay the tax either in money or hunger, and I very much doubt whether the supporters of the Government will choose the second alternative. If they do not do it, if they realise that this rise in price must make the poor take more rather than less bread, the more they think of it the more inexorably they will see that it follows that the poor pay the whole of this tax. But do not they pay more? We will see. First of all, when the price of foreign grain goes up the price of English grain goes up too. Now it is perfectly true that the money by which English grain goes up goes into the pockets of Englishmen, but it comes out of the consumers of bread, and the main consumers of bread are the poor. The consequence is that this money goes from the poorer pockets into the more well-to-do pockets, and when you are estimating the effect of this tax, and considering how it bears on those who are nearest to starvation among us you must reckon the whole of the money you take out of their pockets for the same nutriment they had before, and in doing so you must add to the amount that goes into the Exchequer the whole of the money that goes into the farmer's pocket. I am not suggesting that this tax will, in the end, benefit the farmer. Under this Bill the farmers will pay in another way for that which they get for wheat and flour, but that is a point I am not going to trouble the House with. But I wish to point out that when you are considering the incidence of the tax on flour and corn you must add to that which you collect through the medium of flour and corn what the farmer is able to get by the rise in prices.

Just for one minute consider the condition of the people who are to pay a higher price for bread. The further you go down in the scale the more exclusively is the food of the people bread, and as I have pointed out the more the price rises still more exclusively becomes that food bread. The consequence is that the burden of this tax is borne mainly by those in need, and the more in need they are the more they bear of it. Then you may say that so far from this tax being adjusted according to the resources of the people who have to bear it, the money you exact is almost in direct proportion to the direness of the people's need. Can it be thought that this great country is going to tax people according to their poverty, and that is the best way to raise £2,000,000? The suggestion is "Oh, 3d. on the cwt. of corn, or 5d. on the cwt, of flour, is so little that nobody will feel that." If slipshod politicians lounging in a drinking bar were to talk like that, one would really not be much surprised, and yet when you think that the Budget is the carefully prepared outcome of months of work by the man picked by the country to look after its finance—when you think that arguments like that can be brought forward here to defend this financial measure—one's heart sinks. The light hon. Gentleman has advanced the extraordinary proposition that you can tax an article and that nobody will have to pay, that you are to get £2,000,000 and nobody will feel it. Inquiries have been made it seems all over the country, and in countless places the price of bread has not gone up. This does not greatly surprise me. In another set of circumstances you might find that there was not a single place where bread had gone up, and yet it would be true that ultimately the consumer would bear the full tax. Such a defence ought not to have satisfied the Chancellor of the Exchequer.

The whole of that defence is based upon the fact that the Chancellor of the Exchequer, with all his firmness, insight, experience, and honesty of purpose, has never set himself to ask what, happens when the cost of an article rises and falls whose retail price can only go up by fits and starts. The wheat stuffs and the flour of the country, as mentioned already in this debate, are bought in largo quantities, and the price can be graduated to a nicety; but when you come to the 4lb. loaf this can only be sold for certain coins of the realm and the price must go up by jumps. The smallest variation is a halfpenny except in the poorest parts of the kingdom. What is the necessary consequence? If the price of flour goes up a shilling a cwt. that is not enough to raise the loaf a halfpenny. Will it raise it at all? This depends on the nearness of the baker to the edge of his margin of profit. In places where the baker has just put up his loaf a halfpenny it will not be enough to raise the price again; where he has not already raised his price it may decide him to do it, and it will in every case make a subsequent rise easier. The baker has to sell his loaves at so many halfpennies, but he has to buy his raw stuff at varying prices. He lives on fat years and lean years. There is a time when the cost of the raw stuff is almost unbearably near to the price obtained for the bread. This happens immediately before the raising of the price of the loaf by a half penny. Then the fat year commences until the cost of the raw stuff has risen so much that he starts another halfpenny, and has another good time. But on the average he gets his trade profit. Prices of bread, of course, vary according to competition in one part of the country and another. But the increase of the price of flour by a shilling makes it all the easier for a subsequent rise in the price of the loaf. Thus in some places we are told the price has gone up, in some places that there is no change at ah. But that does not prevent the shilling producing on the average its full effect. It does so by making the price easier to go up and slower to go down. I have been trying to think of some simile which would explain how an average is independent of this inequality due to price going up by jumps. Let us suppose that by a ukase of our War Office the soldiers of the Army are all to be measured to the nearest inch and that the average should be taken. We all know that it would give very accurately the average height of the British soldier, although some of the measurements would be too high and others would not be high enough. Then suppose it were to go forth that they all should be measured in their shoes, which raised them half an inch. In half the cases this would make no difference, in the other half it would make the difference of a whole inch. But on the average it would just make the half inch. In precisely the same way the shilling added to the cwt. will produce on the average the full shilling increase in the price of bread, and there is no possible way of avoiding it. We now see the full consequences of this disastrous tax. It will stiffen the market because the poor will be driven to eat bread more exclusively. The consequence will be that neither the middlemen nor the foreign producers will have the slightest inducement to lower their price, and the poor of this country will have to pay the higher price, and will have to bear this burden in proportion to their poverty; and with this additional aggravation that the poorer they are the more they will be driven to bear a larger share of it.

(10.30.) MR. WINSTON CHURCHILL (Oldham)

As one who has listened to this debate, I welcome most heartily a most eminently satisfactory feature in it. We are all economists tonight. There has hardly been a single speech on either side of the House which has not been carefully prompted by the idea of retrenchment and economy. There are obvious reasons which brought out this important issue, for everyone on the Opposition Benches, as well as on these, could say, "Here, at least, is a common basis of agreement." There is another reason why I welcome the debate—the fact that the Chancellor of the Exchequer has introduced this tax into his Budget has terminated the long annual series of compliments which used to be exchanged across the Table between the right hon. Member for West Monmouth and the Chancellor of the Exchequer, which always gave entire and complete satisfaction to both right hon. Gentlemen, but which were always received by a shiver of disgust and disapprobation by the Treasury Bench. The distinct and definite matter before the House is the selecting of the financial sources wherewith to meet the expenses of the country. Whether the taxation should be direct or indirect is the great question, whether either or both these branches of revenue should be selected. We are not now discussing the question of expenditure, but the means of paying the bill for which we are liable. During the debate, which has languished, I have not heard one Member on either side of the House attempt to condemn the Government for not having adopted the easy method of meeting expenditure by having recourse to a further permanent loan. We have had a most tangled argument as to the best tax to impose to pay our bill.

The hon. and learned Member for the Launceston Division has given us a most lucid and interesting lecture. As one who has not had the advantage of an academic career, it filled me with awe and wonder, and must have awakened in the minds of hon. Members who enjoyed that advantage many recollections of their early academic days. In the course of his able and lucid exposition of financial principles, the hon. and learned Gentleman has proved, as many Members have proved, I think, perhaps a little more than he would care to verify when the result of his reasoning is sot out in black and white. Very extreme views have been taken by economists on both sides. On one side it has been proved, by unrelenting and incontrovertible logic, that the whole of this corn tax, and more, must fall on the British consumer. On the other hand, it has been shown, by no less indefensible steps, that the whole of this tax will be paid by the foreigner out of his abnormal profits and the love which he bears to this country. I venture to say that the economic view on this side of the House was put most effectively by the hon. Member for Glasgow—a view which most hon. Members on this side of the House pin themselves to. Surely there is a great deal to be said for the argument that it would be as difficult to trace which of the parties were benefitted by the remission of the tax in 1869, as it will be difficult to decide the proportion in which the parties will suffer by its re-imposition now. I would recommend the Government to be very generous in this matter of the argument of hon. Members opposite. At all events, I will make them a present of all the satisfaction they will derive from these arguments that the consumer will pay the tax. If we, on this side of the House, were to admit that the whole of this tax—plus, of course, a certain wastage—should, by the force of economic gravity, fall on the consumer, either in quality, quantity, or price, then hon. Member's opposite ought to admit that where prices have been raised to artificial levels from local circumstances, which levels do not correspond to the increased cost of production, these prices will be adjusted by the ordinary higgle of the market. But if the whole tax, if not more, falls on the consumer, what does it amount to? It is estimated to realise approximately £2,500,000. I have seen the annual national income calculated at £1,700,000,000; therefore, the tax amounts to an equivalent of 2s. 11d. per £100 of the national income. I am the last to underrate its importance, but surety it does not justify all the epithets that have been lavished upon it.

There has been much discussion as to whether this is a Protective tax or not. If this tax has been seriously prejudiced by the reception it has met with, we have this consolation: that if over a tax was damned with praise not faint from certain quarters, it is this. It will, however, I venture to think, survive the eulogies even of the hon. and gallant Member for Central Sheffield. Practically, it is absurd to call this tax Protective. [Cries of "Oh!" from the Opposition Benches.] I humbly submit to hon. Gentlemen opposite that the essence of Protection is Protection. Now, this tax in no way-facilitates the growing of wheat in England, and nobody would wish to do anything so wicked as that. It cannot practically be said to be a Protective tax; but in economic theory, which is a very different thing, there is no doubt that the tax is Protective in so far as any profit realised by the home producer in excess of the world's market price must go to him. But, as the Chancellor of the Exchequer has told us, the profits of the wheat grower will be strictly limited and will be more than swamped by the increased price of his feeding stuffs. The object of the tax is revenue only. How much Protection is there in this tax? The average juice of wheat in England during the past year was 26s. 8d per quarter. Under the shameful and notorious legislation of 1828 the proper Protective duty upon wheat at that price would amount to £3 a quarter—that is to say, sixty times the amount of the proposed duty. Therefore, hon. Gentlemen opposite would be justified in using, with regard to this tax, only one-sixtieth of the adjectives and expressions which were applied to the Protective duties which formerly prevailed. But the Rules of Order must have been very lax, and the English evoked must have been very extensive, in the old days, if the opponents of the Protective duties indulged in language sixty times as strong as that of the right hon. Gentleman the Member for West Monmouth.

So much for the economic aspect of the question. The tax is not a new one: it is a revival of an old tax.

MR. JOHN BURNS (Battersea)

With an ancient and fish-like smell.

MR. WINSTON CHURCHILL

It is a curious thing in our system of taxation how much easier it is to revive an old tax than it is to impose a new one. Last year the sugar tax was passed without any difficulty, whereas the coal tax—the proceeds of which were insignificant—was the subject of prolonged and vehement debates. That was not met with anything like such an unfavourable reception as was given to the small cheque tax, which, I am glad to say, my right hon. friend, in deference to the feelings of the House, and especially of hon. Gentlemen opposite, has withdrawn. Then there arises the question—Is this an equitable tax or not? It is on that that the debate has mostly ranged. Sir, there is not much room for sentiment in taxation. Hon. Gentlemen have asked us, by their Resolution tonight, to say that the House will not tolerate any taxation whatever of the necessaries of the food of the people. They appear to hold what is, to a certain extent, an illogical sentiment in the matter—a sentiment which, of course, is quite unmixed with any taint of Party bias or advantage. Every argument which can be used against the corn tax would be equally applicable to the tea tax. I have listened to the frequent quotations which have been made from Mr. Rowntree's book, which must have impressed everyone who has read it. In all these pitable budgets of the poor, tea figures as universally as bread. I hesitate to embark on this delicate ground, but I venture to say that if in the realm of the very poor any economy is possible, which I do not assert, there would more likely to be economy possible over a crust of bread than over a spoonful of tea. Every argument used against the bread tax could be used also against the tea tax. Do not mix sentiment up with taxation. In taxation what is required is equity, and sentimental notions ought not to be allowed to prevent any Government from taking the correct financial course. Let us look at the question from the point of view of equity alone.

I have already referred, in discussing these subjects, to the figures on indirect and direct taxation which my right hon. friend the Member for Montrose first introduced to the House. They are figures which may be used in various political controversies, and which, I think, are full of suggestive and significant lessons to both political parties. Direct taxation between 1841 and 1901–2 has risen from 27 per cent. to 52 per cent. Indirect taxation during that period has fallen from 73 per cent. to 48 per cent. Now, Sir, that is a very remarkable process.

MR. JOHN MORLEY (Montrose Burghs)

Are these my figures?

MR. WINSTON CHURCHILL

They are the figures of direct and indirect taxation, and I should not be a bit surprised if my right hon. friend did not obtain them from the same source as I did. What I submit to the House is that there was a tendency going on during all that period, as illustrated by the figures of direct and indirect taxation, which shows distinctly that the ratio of taxation is being altered not to the disadvantage, but to the advantage of the masses of this country. That great evolution has taken place under various Governments of both Parties, and no Government cared or dared to interrupt it. For my own part, I should never feel able to vote for any Government that desired to reverse that process. But the exact contrary has happened in the present case. It has been left to this Government—the Government of class and interest, as hon. Gentlemen opposite are never tired of calling it out of the House of Commons—in a time of war and difficulty and public embarrassment, to make the proportion of labour as a contributor to national taxation comparatively lighter than ever it was before, and the proportion of direct taxation comparatively heavier; to exact a lesser proportionate contribution from labour than was exacted by Mr. Gladstone during all the years he was supreme and powerful in England, and a much lesser contribution than was exacted as recently as 1894–5, in a time of profound peace, by the right hon. Gentleman the Member for West Monmouth himself. For my own part, I would charge against the Government that they have allowed the expenditure of this country to get beyond the bounds of prudence and reason.

Another charge is made against us, I admit not directly in this debate, but very much in the newspapers which support the Party opposite. It is that the Government have endeavoured to shift the burden of taxation from the shoulders of the wealthier classes to the shoulders of the poorer classes. That is a very dishonest charge. The hon. Gentleman the Member for South, Shields has spoken with feeling of the, poor in this country, and he said that so many poor living in such conditions diminished by one-half the glory of this famous Empire; hungry in the midst of abundant plenty, homeless in the heart of our greatest cities, suffering the privations of the savage with the nerves of the civilised man. I would have hon. Members to understand that a vivid realisation of the sufferings of the poor is not the monopoly of the Party opposite. We also possess this vivid realisation. We have just as good a right to speak in the name of the masses of this country, and just as fine a record of work done to ameliorate their condition to point to. The only chance the struggling millions of whom we read in Mr. Rowntree's book, and whom we see in our own constituencies, ever have of enjoying the bounties of nature and science, lies not in any socialistic system of taxation, not in any charitable enterprise, or charitable immunity from taxation, but, solely and simply, in an effective and scientific commercial development. I apprehend very grievously that there will one day come a Government in England which will put upon its programme a great Navy and a great Army; £20,000,000 for old age pensions and the housing of the poor; £25,000,000 for an elaborate system of education, perhaps, more elaborate than either the resources of the country or the needs of the people justify or require, and that the money will be raised, not equally over the whole country, but by the taxation of one particular class, a very small minority, who, in a phrase which has been already used, will not be able to resist it at the polls. If, in the face of the growing expenditure of this country, when the Government is confronted with demands from all quarters, we are so to arrange taxation that the great majority of the electorate will, as it were, be divorced from all real responsibility, and the burden laid on a minority without any great voting strength, we shall find ourselves in a most ruinous and paralysed condition. If ever, in this country, the incidence of taxation falls so as to make this country not a good country for capital, so as to displace it from its position as the clearing house and business centre of the world, then, indeed, the whole of the vast structure of our credit and authority will come clattering down, and the only choice we shall be able to offer to the manufacturing multitude in England will be to emigrate or starve. Let us lead the electorate forward at any rate with their eyes open. This is not so much an agitation for retrenchment. That I should welcome. I wish I could think that my right hon. friend is about to set up any sort of an inquiry into the causes of expenditure and taxation. The demand on the Government is, I fear, a demand, not for education in retrenchment, but for education on future expenditure, coupled with a transference of burdens; and I believe that, although that may relieve the labouring classes from the weight of taxation in the first instance, it will ultimately descend upon them and overwhelm them in difficulties and dangers.

The right hon. Gentleman the Member for East Wolverhampton, in a speech which greatly impressed all who heard it, used about this tax the epithet "mean." I very much regret that the right hon. Gentleman, should have permitted himself to have used that expression, which is at once unjust and inappropriate. It is quite true it has no special significance, but I would ask the right hon. Gentleman, on whom does the reproach more justly fall? On the Government which in a time of difficulty and embarrassment had the courage to choose this method of raising money for what they believed to be a popular policy, or on the Opposition, who, without just cause, and with every species of ornamented exaggeration have endeavoured, for the sake of a vulgar Party advantage, to trade on the half buried prejudices of the past. What would be said of a Government who, believing that a tax on corn was the best financial expedient I to be adopted, refrained from taking the course which financial experience and wisdom dictated because of a fear that an unscrupulous use would be made of the sentimental aspect of the tax? My right hon. friend the Member for West Monmouth did me the honour in his speech today to notice me, and to appeal to me to voice the opinion of Lancashire. I will not presume to speak for Lancashire, but I would venture to say to the; right hon. Gentleman that, upon the whole, in dealing with that electorate, and it is a very good one, it is well to count upon it as a class and a mass taking the most generous and most public spirited view of any question brought before it. I will not go so far as the right hon. Gentleman and argue that the whole opinion of Lancashire is the opinion of one bye-election fought under so many local and personal circumstances. My right hon. friend no doubt remembers very well the American Civil War. What was the attitude of Lancashire then? Lancashire, the most prosperous and proudest part of England was reduced to living on the charity of the rest. While the fleets and armies of the Worth were blockading the Southern States, thereby preventing the exportation of cotton on which Lancashire depended, all that time Lancashire was absolutely true to the cause of the North. They are a great people we have to deal with, and it is not well to count too much on the selfish forces which here and there make themselves visible. I shall support this tax to-night, not because I. do not hate and fear the expenditure which makes it necessary; not because it is not painful to think of some on whom it may fall; not because I think it is imperceptible; but because, although it will be perceptible, it will not be onerous, and in so far as it will be perceptible I hold that it will be rightly and healthily perceptible. I shall support it because I believe there is a general consensus of expert opinion that it is the best financial expedient that can be adopted; because it is a brave and honest act of policy, having regard to the permanent welfare of the nation, and not merely to the transient popularity of a political Part, and also because it is a tax which is efficient, economical, and highly productive.

(11.0.) MR. GEORGE BROWN (Edinburgh, Central)

The bellicose mood of the Chancellor of the Exchequer at the beginning of his speech this afternoon made me hesitate very much about addressing the House for the first time on this corn tax. But his milder accents towards the end of his speech have encouraged me to trespass for a few minutes on the time of the House. The right hon. Gentleman did not seem to me to quite understand the position on this side of the House. There is no question of the war in this matter. Liberals are united against this tax because they believe that the Government might have taken other and better means of raising the revenue, because they believe that the Government are asking them to alter the fiscal policy of the country without adequate cause, and because they believe that the Government have selected a tax which will act in the hardest possible way on the hardest lives lived in this country. The view expressed on the Government Benches about this tax underwent very considerable modifications this afternoon. When I read the report of the first evening's debate on this subject, it seemed as if the Government had discovered a new and original tax which, while Protective in its appearance and its attributes, was guaranteed as genuine Free Trade by its promoters. It was not like our ordinary duties levied for revenue purposes. It was not like the tea duty raised on an article wholly grown abroad, or like the duties on beer and spirits levied equally on home and foreign supplies. It was to be levied on the foreign supply alone, while the home supply was to be free. It was carefully called a corn registration duty, although not really a registration duty. A registration duty as popularly understood in former days was for statistical purposes; now we get all our statistics free of charge. In all these ways it looks very like a Protective tax, and yet its supporters indignantly disclaim any Protective intention. This tax they say was not meant to be and could not possibly be a Protective tax. It was not even "a sort" of a Protective tax. Then they went on to say that the tax would fall on the producer, and not on the consumer as one might suppose. It was a new kind of tax, very like Protection, and yet according to its promoters as different from Protection as it well could be. Although the Chancellor of the Exchequer still argued this afternoon that the producer would have to bear the duty, he let fall some expressions that indicated some hesitation in his mind.

The noble Lord the Member for South Kensington assumed that a tax would fall on the consumer, although he could not see that if the price of an agricultural product rises the agriculturist pockets that rise, and is thereby protected. It is satisfactory that opinion is changing, but it cannot be too often insisted that this is a tax which will fall on the consumer, and that it is a Protective tax, though only of a small amount. It is very hard to trace the incidence of indirect taxation, but the supporters of this tax have invented a simple rule for doing so. It is something like this. Put a duty of one-eighth of a penny on the flour in a loaf, and if the price of the loaf does not immediately rise ½d. then it is clear that the producer is going to pay the whole tax; but if the loaf does immediately rise ½d. then that is due to entirely different causes. I think that those who do not sec that this tax will protect our agricultural interests, and will be paid by the consumer, are not looking quite deep enough into its incidence. They say that the duty will not increase the price of the loaf. There may not be a general increase of ½d. immediately, although it looks as if that were going to occur. The Chancellor of the Exchequer may have hit upon a time when all those interested in the importation of corn are so exceedingly prosperous that one of them may pay the duty out of his own pocket and say nothing about it, or several may divide it between them. Again, if the price of the loaf does not rise immediately, it may be due to the fact that the tax on the loaf is only one-eighth of a penny, whereas our smallest coin in the bread market is ½d., or to the coincidence of some other factor tending to lower the price at the moment the tax is imposed. But the question is not the immediate effect on the price of the loaf, but the effect in the future. This tax will always remain and will have its effect in lean years as well as in years of plenty. It will always remain in lean years to make the loaf rise ½d. by ½d. a little faster than it otherwise would. It will always remain in prosperous years to prevent the loaf falling ½d. by ½d. as quickly as it otherwise would. Over a period of years it will accelerate the raising of the price, and retard the falling of the price until the eighths paid in duty are recovered in halfpence, and the country has paid for its food more than it otherwise would by just the amount of the tax or a little more. If other factors remain the same, this tax can only be paid in three ways. The first is by the producer accepting a lower profit in his business and the second is by some saving and improvement in business organisation such as often results from a rise in wages in factories. No ground has been shown for supposing that the producer of corn will be willing to do the first or able to do the second, so that there is obviously no other source than the pocket of the consumer. Indeed, the Government might as well say that the duty will lower the price of the loaf, as to say that it will not raise it. In fact their argument resolves itself into this, that the increase in the price due to the tax will be unrecognisable among the many factors which go to determine that price. It is not the first time that the Government have regarded burdens, errors, and abuses which may sometimes evade notice as non-existent. If the price of grain is raised, not necessarily immediately, but at any time, by the operation of this tax, this is then a measure of Protection, and some of the increase in price will go into the pockets of certain classes in this country. Those who grow grain exclusively will benefit thereby; those whose land supports cattle will pay more for their feeding stuffs, and will lose thereby; and those who do both will come out about equal. The tax will transfer a great deal of money from those in cities to those in the country, exactly as under the Agricultural Rates Act. Although, I think, so far as the agricultural class is concerned the history of this country shows that any benefit obtainable from such taxation as this goes ultimately to the landlords, I do not wish to enter into that difficult question now.

I wish to point out one or two general effects of this tax. The first is that it will introduce a new element of risk, speculation, and un-certainty into the corn business. This unfair tax, which is going to extract £2,500,000 from the producer, may very well be increased some day, and another £2,500,000 obtained from the same source; or, perhaps, a Liberal Government may conclude that the consumer pays, and accordingly reduce the tax, or abolish it altogether. Agriculture is an uncertain industry at all times. It depends upon good seasons and bad seasons, rain, frost, drought, and the uncertainty of markets. In the corn law days, the element of uncertainty introduced by the tax was fully recognised, but it will be infinitely increased in these days of American shipping "combines" and corners, and it will add to the corn trade a new element, more fickle than the seasons—a tax dependent on the caprice, the necessities, or possibly the wealth of future Chancellors of the Exchequer. I do not think that the Government, in proposing this duty, have fully considered its effect on the colonies. The colonies are deeply interested in our food supply. One of the first questions that a Canadian interested in his country's politics, asks a Briton interested in his country's politics is, "Do you think that Great Britain will adopt a preferential tariff for grain in favour of the colonies?" I hope Great Britain will not. For the sake of the effect on the colonies, I think that if the Government really means to maintain our Free Trade system, it ought to give up what I may call flirting with Protection. What will the colonies think when they see the Chancellor of the Exchequer, a Free Trader, proposing a tax like this which they regard as Protection, and which Sir Wilfred Laurier has stated to be the first step towards a Protective tariff. What will Colonial statesmen think? Will they think that this country is still true to Free Trade principles, or that it is entering upon a war of tariffs. I can understand a preferential tariff for the Empire, though I would oppose it. But I wonder how the Colonial Secretary will refer to this tax at the Conference of the Colonial Premiers at the Coronation. Will he say that the policy on which it is based is a purely insular policy, that it will do nothing to cement the trade interests of the Empire? Or will he point to it as evidence that the wishes of the colonies will some day be favourably considered by Great Britain? I believe that if the Government do not wish to encourage the desire of the colonies for a preferential tariff, the only way to really resist it, is to maintain Free Trade in its entirety.

But whether this Protective policy is insular or Imperial, I would not vote for this tax unless under extraordinary circumstances which do not exist at present. It is for practical reasons as much as for economic reasons that I am opposed to it. I have seen too much of Protection in the United States and Canada. I think it is the most malignant disease that can possibly seize on the national life. First single industries are protected, then the system is extended here a little and there a little; next great monopolies spring up, and the rivalry between huge corporations imposes the greatest hardship on the working classes. Railways, even States, pass under the control of a single corporation and the interests of these corporations are maintained by lobbying, speculation, and corners; finally the whole industry of a country is held fast in the iron grip of what is a most vicious system. I know these evils would not occur in this country to the same extent, or in the same form; but I think anyone who has seen Protection in America must dread and shrink from its being introduced in any shape into this country. If I were ever pressed to vote for a Protective duty it would be my last vote, not my first, that would support the tax on bread. If hon. Members are not convinced of the fatal consequences of the step it is now proposed to take, let them read the history of England in the days of the Corn Laws. Let them read the books of Mr. Charles Booth and Mr. Rowntree, and see how the poorer classes are living today, and then ask themselves whether they wish to increase the present army of underfed children who are going to be the future citizens of this country. This is a tax that will fall on the poor, and on the very poor. From the tables in Mr. Rowntree's book it may be seen what a considerable part of the total expenditure by the poor on food is spent on bread, flour, oatmeal. In families just able to keep a servant 10 per cent. of the total is spent, in families with an income of over 26s. a week, 15 per cent. is spent, and in families with under 26s. a week, 20 per cent. is spent. This is only one small bit of evidence to show that the taxation will press most heavily on the very poor, and it has been confirmed by the personal experience of Members tonight. The country is bearing a very heavy load of taxation, and it is bearing it willingly and cheerfully. It would have cheerfully acquiesced in any reasonable scheme the Government might suggest. The Government might even have raised the money it required by special war stamps on all sorts of articles as has been done in other countries, and I believe the country would have acquiesced. Even at the present moment the country is, I believe, willing to broaden the area of taxation in any reasonable way but, instead of that the Government pass by all other suggestions and fix upon a tax on bread, a tax that will fall hardest on the hardest lives lived in this country. You are asking us to alter the fiscal policy of this country without showing any adequate reason for doing so. Liberals are accused of making a fetish of Free Trade. It is unfair. They do not regard it as an end in itself, but as a moans to an end—a full, healthy national life. They see its limitations. They see that under special circumstances, Free Trade might have to be thrown to the winds. But no such circumstances have arisen, and that is why the Liberals are loyal to the principles of Bright and Cobden and opposed to this tax.

(11.30.) MR. RENWICK (Newcastle)

As representing a large working class constituency, I desire to give some reasons why I am going to support this tax. I have listened very carefully to the arguments that have been used by the opposite side against this proposed tax, and it appears to me that the majority of them consist of wire-drawn arguments as to whether this is a tax which is Protective or non-Protective in its character. I venture to think that the working classes, and the people of this country generally, will not discuss whether this is a Protective or a non-Protective tax; what they will consider is whether in present circumstances it is an expedient tax. I venture to think that the conclusion they will come to is that it is an expedient tax. Neither do I think that the people, as a whole, will trouble themselves, as we have been troubled tonight, with long drawn out arguments as to who is going to pay this tax. Ever since I have occupied any portion of my time in politics, and I have done that for some years now, I have always taken an interest in what is called lair and Free Trade. The question has been discussed on every conceivable opportunity as to who paid the import or Protective tax, but we have not yet succeeded in arriving at any satisfactory conclusion. I think the House will agree that as a result of the arguments we have heard tonight we are no nearer a solution of that problem than we were at the beginning of the discussion.

Now let me state the reasons why I intend to support this tax. I support it first and foremost because I think it is a tax that is much more preferable than any further increase in the duties on tea and sugar. I agree with the hon. Member for Oldham that tea is almost as great a necessity in a working class family as bread. Sugar had a duty put upon it last year, and I therefore think that it should not be increased. I should have preferred a tax placed on foreign manufactured goods rather than upon corn, and, whenever a Chancellor of the Exchequer has the courage to propose in this House a five per cent. or ten per cent. duty on foreign manufactured goods, I believe that the verdict of the country will be that he had done one of the most popular acts ever performed in modern times by any Chancellor of the Exchequer. The Chancellor of the Exchequer has not decided upon such a tax, but has decided, instead, to put a tax on corn, and I think in doing that he has acted wisely, for one important reason, if for no other. That is, that it places in his hands a weapon he can use in endeavouring to come to some agreement with countries which place a Protective tax on our goods, in order to obtain some modification of these duties. Not only will it do that, but it will also place in the hands of the Chancellor of the Exchequer a duty by which he may enable the Colonial Secretary to carry out some great scheme for giving preferential duties to the colonies; and I believe it will never be possible to bring about preferential duties with our colonies unless we have some duties by which we can give them preference. I remember long ago when Lord Salisbury was urged at a great meeting that he ought to enter into some arrangement with the colonies, he reminded the meeting that that could never be done until we had the courage to place duties on goods sent to this country by countries which placed duties on our goods. Small as this duty is, I believe it is the beginning of the new policy in the direction I have indicated. The right hon. Gentleman the Member for West Monmouth regretted that this duty was going to undermine the dam we had placed between Protection and Free Trade. That dam has been carried away long ago, but not by us; and in its place a dam has been built by foreign countries in the shape of a Protective tariff' which our trade in vain strives to get over. When I have been watching a salmon stream during a period of flood, I have seen salmon endeavouring to leap over the net, and I have seen them driven back. In the same way our traders are at present driven back when they attempt to gain access to the markets of foreign countries. At the present time, we have not Free Trade: we have one-sided Free Trade; and I sincerely trust that one of the effects of this tax on corn will be that we may be able to persuade foreign countries to treat our manufacturers fairly. We cannot at the present time afford to live on the memory of the past. It may be that in the time of Peel and Cobden it was necessary to treat the corn tax as it was treated, but we have nothing to do with that at the present time. We have to look at the circumstances with which we are surrounded. We find that we are threatened by combinations of foreign capitalists, and it is absolutely necessary that we should take measures for our self-protection.

We have been told that this 1s. tax is going to raise the price of bread. Let us see if there is any other way in which the price of bread is likely to be raised. Sir John Glover recently read a paper before the Royal Statistical Society in London in which he pointed out, that in 1896 wheat fluctuated to the extent of 11s. per quarter, and barley to the extent of 13s. 5d. per quarter. That was from the exigencies of trade alone. Let us consider what is likely to happen if there is a combination of foreign capitalists, who have made up their minds, not for the first time, to corner foreign wheat. In the paper I have mentioned, it was shown that Leiter's corner in wheat in 1898 caused the price to rise from 25s. to 48s. 1d.—a difference in one year of 22s. 8d. per quarter. What is that as compared with 1s. per quarter? We have lately seen our great fleets of Atlantic ships passing under the control of these capitalists, and, speaking as a shipowner myself, I believe that is one of the most serious things that have happened in this country for many years, because I recognise that not only have these capitalists got control of the ships, but they have also got control of the railways on the other side. These "combines" are not formed from philanthropic motives: they are formed from selfish motives; and the men who have gained control of our ships will not have the slightest compunction in also doing their utmost to corner grain, and, if they decide to do so, what will be the result? Remember that we get nearly 80 per cent. of our imported grain from the other side of the Atlantic, principally from Canada and the United States. I should also like hon. Members to remember that, while that is the case, our imports are falling off' from Australia, India, Russia, and the Pacific Coast, and that our other markets generally are decreasing. That shows how absolutely we can be at the mercy of these foreign capitalists if they choose to do what I believe they have the power to do, viz., to enter into a corner with regard to grain. If it is a serious matter in time of peace, how much more serious it would be in time of war! Speaking as a shipowner, I venture to say we do not place the most implicit reliance on our Navy to help us. I believe it is a good policy not to levy a duty for purely Protective purposes, but to levy a duty of such a character as this upon corn as a measure of encouragement to our agriculturists at home to grow more wheat than they do at present. With an increasing population such as we have it is not safe, with land going out of cultivation, that we should rely entirely on supplies of grain from abroad, and I trust that one of the results of this tax will be the growing of more grain at home.

I would again impress upon the House the importance of this matter. France grows sufficient corn to sustain some 90 per cent. of her population, and Germany 80 per cent., while the United Kingdom grows only 39 per cent. of her corn requirements. We have never more than a six weeks supply of wheat in this country. I remember the outbreak of hostilities between Turkey and Russia in 1877. That was not a war in which we were implicated. On 7th April, 1877, the freight from Odessa was 5s. 6d. per quarter; on the 21st it had risen to 10s. 9d., and on the 28th to 12s.; that is, in three weeks it had more than doubled. In the same period wheat had risen from 55s. to 70s. per quarter. It will be seen at once from that that this 1s. per quarter on corn is infinitesimal, compared with what may take place, not only in the event of a corner in grain, but on the mere suspicion of a war between this country and Russia, or France, or the United States. I trust, therefore, that the House will give more attention to the practical considerations of the expediency of this tax than to the profitless discussion of who is going to bear it. Certain Radical newspapers have told us during the last few days that this shipping combination is only for the purpose of raising freights, and that it will do no harm to this country. Whether it is for the purpose of raising freights or for the purpose of raising the price of corn, I believe it outrages the teaching of political economy quite as much as the placing of a Protectionist tax on imported corn.

In conclusion, let me urge this House to bear in mind that we have recently seen a ring of American capitalists acquiring our steamships, and that, in the opinion of many shipowners, is a much more serious matter than the country has yet realised. Whatever may be the effect in time of peace, the effect will be much more serious in time of war. It has become necessary to broaden the basis of our taxation, and, considering that we have recently raised the tax upon sugar, I venture to think that the Chancellor of the Exchequer, in placing this duty on corn, will have, if not the unanimous approval of the country, at any rate, the approval of the country whole.

(11.41.) Mr. CHARLES DOUGLAS (Lanarkshire, N.W.)

, said: It has been one of the charms of this debate that we have had such full and fervent assurances from hon. Gentlemen opposite that they are confirmed and convinced Free Traders. Their assurances have a merit which does not always belong to speeches, viz., that they have distinctly contributed to our knowledge, for if they had not told us they were Free Traders, we never should have known it. The House is fully conscious that the matter we are discussing is a large and serious one. An attempt has been made to belittle the importance of the proposal by speaking of the smallness of the suggested tax, but in spite of that attempt, it cannot be concealed that the question is a far-reaching one. Everyone must recognise that a tax upon the food of the people is, in itself, a thing serious, and to be avoided if possible. It is a direct burden upon labour, and it increases the cost of maintenance and diminishes the purchasing power of labour. Such a tax is far more serious when placed upon the food which is cheapest, because it places the heaviest burden, not only proportionately, but actually, on those who are the poorest earners and the largest consumers. This is of extreme importance when we consider it in relation to the fact that there is a very considerable class of earners who work for a wage below that which is necessary for their proper and normal maintenance. The grisly and menacing facts brought out by Mr. Rowntree and Mr. Booth are clear evidence that the number of such labourers is very considerable. I regard the presence of these under-fed and under-paid men as a menace as well as a discredit to the future of this country, and it is a matter which will have to be dealt with by drastic measures before many years are past. It is a serious fact that there exists this great mass of our working population for whom each day's labour under present conditions is so much leakage of life. Each day's labour is a day nearer, not to progress and life, but to death and extinction by what is physiologically starvation. In the presence of such a fact we cannot but realise what it means to levy a tax on bread.

The Chancellor of the Exchequer shares the view expressed on both sides of the House, that the tax-gatherer is the best school-master. For my part, I wish this potent schoolmaster had begun his tuition at some other point in the social scale. When he has to teach his lesson against extravagance, I think there are homes to which he might be sent before he goes to that of the widow with half-a-dozen children and only 12s. or 15s. a week on which to feed them. This schoolmaster has been placed on an even higher plane by the noble Lord the Member for South Kensington, who imparted almost a religious character to the value of taxation. I do not know that the privilege of paying taxes is always appreciated by people in any rank of life. I have heard that taxes are apt to be evaded by those who find themselves able to evade them, as a working man cannot do in the case of a tax on bread. Surely it is a very serious matter that we should deliberately proceed to widen the area in which there exists the state of things I have described, and to increase the number of those whose labour is not really a means of life, but an avenue to death.

The official argument on this subject, to begin with, was that the tax would not lie on the consumer in this country—that it would be paid by the foreigners—(who seem to be much better people than we have hitherto been led to believe)—by benevolent shareholders in American railways undertaking the carriage of corn at a cheaper rate in order that we should get it here at the same price. That argument requires no answer from this side of the House; it has already been most fully and definitely answered on the side from which it proceeded. The Chancellor's argument in proposing this tax is that it does not rest on the consumer in this country; the argument of the noble Lord the Member for South Kensington in defending it is that it does lie on the consumer here, and that it is both his duty and his highest privilege to pay such a tax. Then the excuse was made that the tax was too slight to affect the price of bread, but it has been conclusively shown that it has already done so. We, on this side, need not press for an extreme Anew on this subject. We may admit that the tax is one-eighth of a penny on a 4lb. loaf, and that the rise which has taken place does not represent the permanent effect of the imposition of the tax, and that the permanent increase in price may represent nothing more nor less than the actual amount imposed. But over a period of years this tax—which is not a war tax, but a permanent imposition—will stimulate the rise and retard the fall, and make itself felt over the average price paid by the eater of bread. The price of bread fluctuates, but the maximum and the minimum alike will be heightened by what we are asked to do tonight.

Moreover, we have no security that this tax will not be increased. On the contrary, there is strong reason for believing that it will be. It is a tax which can readily and easily be increased. Any argument which is accepted tonight as justifying the imposition of the tax this year will apply equally to the imposition of an increase of a similar amount next year or in any future year. If 3d. makes no difference on the present price, what difference will another 3d. make on any future price? But this is a tax for the increase of which several motives or reasons may be given and the main objection to this proposal is that in its principle, essence, and effect, it is Protective. I do not say that it is intentionally or deliberately Protective. This would be a bettor world if the effects of men's actions were always limited to their intentions. The tax has undoubtedly been supported, because it is Protective. There would be no enthusiasm for it, whatever grudging submission to it there might be, if it were not supposed to be Protective. The enthusiasm of its warmest supporters would be much lessened if it were proposed to accompany it by a corresponding Excise duty on the production of wheat in this country.

It is not only a Protective tax, but it is the only tax of this character that we have in this country. Whereas the only motive for the increase of all other taxes is simply the revenue they bring in, a Protective tax has the support of those who have an interest in having it increased so that their industry may prosper under it. You will have a new force in favour of a certain kind of taxation, and it is difficult to estimate the effect of that force. This tax stimulates the movement—which I think is more powerful than is sometimes imagined—in favour of Protective finance. It gives the encouragement of a first success, and it introduces a new fact—a protected industry—which does not now exist. Now we are not entitled merely to say in the abstract that this or any other tax is the thin end of the wedge of Protection unless we show what motive it gives for further progress in that direction; and the great motive which I think is bound to lead to further Protection is the inequality of the incidence of this tax. It raises questions between rival interests, and, while it does so, it must engender a perpetual discussion of its Protective merits, and those of other taxes that might be proposed instead of, or in connection with it. There will be the claims of industries to equal treatment. If this duty be imposed, Protection becomes a real factor in our fiscal system. If we persist in levying this tax it must really govern the future of our finance. On the figures of 1901 the present tax on wheat yields about £1,000,000 on grains that are used chiefly for feeding stuffs. That tax is in favour of the British producer of those grains, but it is against the feeder of British stock. It is a bounty in favour of the producer of stock abroad; and to the incidence of this part of the tax on the stock-raising industry you must add, the rise in price of home grown and imported feeding stuff, on which no tax is levied but which have already risen in price, and which are bound to rise in response to and in sympathy with this tax. This incidental inequality between two agricultural industries cannot be avoided under this Bill. It is not an accidental but a necessary consequence of a tax on grain. You cannot avoid it by taxing one kind of grain and not another; you cannot distinguish between the purposes for which grain is to be used and for which it is imported. You cannot have a grain tax at all without creating inequalities between these two great branches of agriculture. The tax levied on the imports of this raw material amounts in the case of maize to upwards of 5½ per cent. of its total value, and involves a substantial increase in the cost of the produce. It gives a substantial advantage to the foreign producer. £1,000,000 is a heavy burden for an industry in which there is keen competition. In the case of pork the addition amounts to two shillings per cwt., and represents about 3 per cent. of the total value of the produce. In regard to poultry, the additional cost in egg-production would be over 3 per cent. on value. These instances do not stand alone, but they are two typical agricultural industries, chiefly pursued by small farmers, largely dependent on foreign grain, and subjected to very keen competition from abroad. The right hon. Gentleman was asked whether he intended to place a countervailing duty on foreign beef and pork to enable the British farmer to compete with beef and pork fed on untaxed grain, and he said— No, the British farmer can easily feed his stock with home grown grain if he prefers it. That is to say, the people may evade the tax by using home grown grain. Now in what circumstances would home grown grain be used instead of foreign grain? Obviously only when the taxation imposed had made foreign grain dearer than home grown grain would be. Then the home grain grower makes a new profit, and the Exchequer gets nothing. But does the buyer evade the tax? Really he pays it as much as ever, and the Chancellor's solution is that one set of farmers are to pay taxes to another, while the State gets nothing out of either. This is "broadening the basis of taxation"!

A tax on grain affects not only that part of the supply which is taxed, but also that which is not. Increased cost of imported grain means increased cost of British grain. It also means higher cost of feeding stuffs with which grain competes. This is so important a point that it ought to be considered in addition to the other arguments which have been brought against the tax. This part of the tax gives a definite bonus of at least £1,000,000, and we do not know how much more, to the foreign producer of meat, and it places the British stock farmers at a disadvantage in competing with his foreign rivals. In connection with the coal tax last year the right hon. Gentleman said the foreigner would through that tax pay his share toward the cost of the war. I suppose this bonus to the foreign producer is some return for paying that share. Our policy in the past has been to allow stock farmers in this country to have the benefit along with their foreign competitors of the chief grain produced abroad. The result of that policy has been that, great as are our imports of animal produce, and greatly as they have increased, our home production has grown also. If you reverse that policy you destroy its result. If we had not repealed the corn duty it is evident we should have been in a much worse position in respect of stock farming than we now are. If we had allowed our foreign competitors to have the whole advantage of cheap grain, we should have suffered a loss of which the best measure is given by the rate of increase in our imports of grain. The advantage in competition which foreign grain growers have had would have been gained by foreign stock farmers also. We should have lost the ability to compete with foreign stock farmers, as well as the cheap food which our policy has secured. That is the loss we are now invited to incur.

This tax creates a serious inequality, not as between stock and grain farmers, but between different districts of the country. Obviously for grain growing districts it is advantageous, but for Scotland and Ireland, which devote a much larger proportion of their agricultural work to the production of stock, it is a sheer loss to the farmer as well as everyone else.

The only possible remedy for the inequalities created by a tax on grain is a corresponding tax on animal produce If you persist in taxing grain, I believe that a corresponding tax on animal products will, within measurable distance, become inevitable. Such a tax would be an act of common justice to stock and dairy farmers. Then, again, the value of the respective products is very important. That which is untaxed is more than twice that which is now proposed to be taxed—more than three times as great as the total value of wheat and flour. An ad valorem duty on all animal products imported, equal in proportion to the duty now proposed would yield £6,500,000 of revenue. Moreover the food that would be taxed if a duty were placed on these animal products would he a dearer kind of food, the food of the richer consumer, which would be a far more legitimate object of taxation. Such a tax would produce endless complications. Even the present tax affects forty articles, but how many would you affect if you laid a tax on all the produce of stock and dairy farms? This is our first object lesson, and apparently only our first, in broadening the basis of taxation. It means, in effect, that kind of taxation which the Chancellor of the Exchequer has always hitherto condemned, a large and complicated tariff, with small revenues derived from a large number of articles; since a tax on raw material implies either a tax on every manufactured product or a disadvantage to the home-industry.

My object has been to show not that such taxation is right or necessary, but that it is a consequence which must result if we persist in levying a tax on the raw material of stock farming and similar industries. The effects of a tax on grain are not now so simple as they were in 1868. You are introducing the tax into a great industrial system which has grown up under the influence of Tree Trade. Such a tax vitiates the whole system of national finance. Any Protective tax of this kind requires the protection of everything that is produced by the labour or from the animals whose food is a taxed import. Failure to afford such protection means loss to the industry which is taxed, and gain to the foreign competitor. We are at the dividing of the ways in national finance. There is more at stake than the mere incidence, of national burdens. It is vitally important to turn the minds of the people, of whatever class or occupation, to the task and duty of gaining and promoting science, knowledge, and skill in business, on which success in industry depends. The effect of such measures as this is in the end to divert their minds from these vital issues, and to attract their attention and political efforts to the task of securing advantages at the expense of the public. Free Trade has been not only a great incentive to commerce, but it has formed a bond of union and agreement between all classes of the people; it gives a security for equal treatment that no tariff can give; it bars out those rivalries and jealousies which are the greatest dangers, not only to the material prosperity, but also to the moral fibre of the country and the goodwill of the people. It is more than a mere fiscal expedient, if is a pledge that one class of people shall not be impoverished to enrich another. By such a proposal as this you withdraw that pledge, and diminish the confidence and goodwill between different sections of the community. The Government have had no mandate to introduce any such policy as this. I do not suppose that 1 per cent. of those who voted for the return of hon. Members opposite believed that any such measure was possible and we have had some evidence already that the country will not endorse it. In the earlier stages of this discussion we were taunted with timidity. There is some timidity, but it is not on this side of the House, it is rather in minds of those who began by calling a corn tax a registration duty, who tried to evade the most obvious consequences of their action, and who have never yet decided on a consistent theory as to the future effect of the tax, but who say in one breath that the working men of this country will pay the tax willingly and in the next that they will not pay at all. Their fears are well founded, and our anxieties are no less justified when we see the occasion of this war being used to urge the House to a course which we believe will be injurious to the interests of the country and the contentment of the people.

MR. SYDNEY BUXTON (Tower Hamlets, Poplar) moved the adjournment of the debate.

Debate adjourned till tomorrow.