§ The most formidable part of it, the part which strikes the imagination most, is the amount spent on our armaments—£34,457,000 on the Navy, and, after allowing for the extraord nary services for which we have to provide this year, £27,588,000 on the Army—in all £62,045,000. That is a gigantic amount, and I do not wish to minimise it at all. But when people talk about the country being "bled to death in time of peace," or say that "flesh and blood cannot stand" such an expenditure, I would like the Committee to consider for a moment how we have stood such a crushing burden in the past, remembering always that the burden is relative to the back which has to bear it.
§ MR. JOHN WILSON (Durham Mid.)The sugar tax and the poor.
§ MR. RITCHIEPeople forget that our back is much broader now. What was the burden on the taxpayers of a generation and a half ago? Let us cast our memories back to forty years ago, to the year 1863–64, when our military charges had undergone a great reduction, when economy, under Mr. Gladstone, in accordance with public opinion, was in full swing. The Army and Navy Estimates proposed in that year appear to us, by comparison, ridiculously small—on the Army, £13,107,000, and on the Navy £10,556,000—no more 248 than£23,663,000 in all. Now what proportion does that expenditure bear to the national income of that day—which, in other words, is the back which has to bear the strain? How are we to estimate the national income? No doubt it is an extremely difficult and problematical calculation to make—so difficult and problematical that I hardly like to attempt to make it. But as regards what is believed to represent about one-half the aggregate income of the nation, we are on safe ground. We have got the gross assessments to the Income Tax. I have excluded for the present purpose incomes derived from Government securities, for two reasons—in the first place, because such income is not earned, but is merely abstracted by means of taxation, and because, in the second place, this will eliminate the greater part of the incomes drawn by foreigners from this country, for presumably their principal holdings are in our Government securities. Having made these deductions, we arrive at a gross assessment to the Income Tax in 1863–64 of £314,300,000, and the Army and Navy outlay of £23,663,000 in that year represents 7.5 per cent. on £314,300,000. The corresponding gross assessment to the Income Tax in 1903–04 we take to be £879,000,000. Now, 7.5 per cent. upon the latter figure would be £65,925,000 while the actual provision proposed for the ordinary Navy and Army services is, as we have seen, £62,045,000. So it may be said that, even with the present gigantic armaments, we are proposing to spend now less relatively to our means than we were spending forty years ago. This may be thought surprising; I believe it to be accurate. It may be interesting to know the respective burden per cent. on the Army and Navy in the periods under comparison. In 1863–64 the burden per cent. of the Navy was 3.3, whereas for 1903–04 it is 3.9. In 1863–64, when economy was-fashionable, the percentage of burden of the Army was 4.2; in 1903–04, when, unfortunately, economy has gone out of fashion, it is 3.1. So, while the naval burden has relatively increased, the military burden has relatively decreased. So far, therefore, as the burden on the country of our naval and military 249 expenditure is concerned, it is some comfort that we are not worse off, but better off, than we were then.