FINANCE BILL.

HC Deb 23 June 1903 vol 124 cc270-326

Considered in Committee.

(In the Committee.)

[Mr. J. W. LOWTHER (Cumberland, Penrith) in the Chair.]

*MR. JOSEPH WALTON (Yorkshire, W.R., Barnsley)

proposed the substitution of 1d. for 1s., as the duty on exported coal. He said that in introducing the Budget, when referring to the question of the remission of taxation, the right hon. Gentleman the Chancellor of the Exchequer had stated that, inasmuch as the coal tax had not injuriously affected the quantity of coal exported, he did not propose to interfere with it. The right hon. Gentleman had £10,500,000 to remit in taxation, and though the coal tax was imposed at a time when the financial exigencies of the country were most pressing, the coal tax—the only tax levied on British exports—was, they were told, not to be interfered with. It was perfectly true that the output of coal was greater last year than in any preceding year. Last year was a record year for the output of coal, the quantity being no less than 227 millions of tons. It was also true that the exports last year showed an increase of 1¼ million tons over the exports of the preceding year, but that increase was wholly accounted for by the increased shipments to the United States of America and to France, in consequence of the great strikes of coal miners which had occurred in those two countries. He had not omitted to notice also that there was an increase in the export of bunker coal last year as compared with the preceding year—an increase of 1½ million tons. So far as the special district for which he spoke was concerned—the North Eastern part of England—the increase in the export of bunker coal had been 200,000 tons. While it was true that, owing to the exceptional circumstances of the coal strikes abroad, there was in 1902 an increase in the total export of coal as compared with 1901, it was equally true that the exports of 1902 as compared with the year 1900 were a million tons less, and would have been more than two million tons less had it not been for the extra demand caused by the strikes in America and France. The absence of a diminution of exports did not prevent 1s. per ton less being realised at the pit's mouth on coal for export, by reason of this coal tax, where they had to enter into competition with foreign coal. Whereas the export trade had been maintained, the fact was that the price of coal had fallen heavily since the year 1900, and there had been no corresponding reduction in the cost of production. That necessitated collieries working full time in order to raise the coal at the minimum of cost. It was better to suffer the loss of 1s. per ton, on the proportion of the output of the colliery exported, by reason of the coal tax, in order to enable full time to be worked, and to avoid the increase of cost, amounting from 3d. up to even 1s. per ton, which was the result of working on short time. Members of the Committee would quite understand that in connection with collieries, and especially with those which had heavy expenses for pumping, etc., the standing charges varied enormously as between working short and full time.

In 1901 the case for the imposition of the coal tax rested to a considerable extent upon the Returns of wages and profits in the coal mines. He had obtained a Return from the Government this year similar to a Return issued in 1901. The former, in his opinion, contained many fallacious statements, and this latter Return afforded striking evidence of how fallacious were those figures and estimates. It was said in the Return issued on the 10th June that the price of coal in Northumberland and Durham had only fallen 3s. per ton between the years 1900 and 1902, and that in Yorkshire the fall in price had only been 2s. per ton. These figures could not possibly be correct in face of the fact that whereas in the year 1900 the price of gas coal was 17s. per ton, f.o.b., the price was now only 8s. 6d., and that the locomotive coal for which railway companies were paying 16s. per ton in 1900 was at the present moment, under contract, as 9s. per ton. Further than that it was said in the Return that the average wages in Northumberland in 1900 were 35s., in Durham, 34s. 10d., and in Yorkshire 33s. 3d., while in 1902 the wages were 27s. 8d., 28s. 3d., and 33s. 3d. respectively. In the counties of Northumberland and Durham wages, which were regulated by the selling price of coal at the pit's mouth, had been actually reduced—in Northumberland by 35 per cent., in Durham by 31¼ per cent.; and in Yorkshire by 10 per cent., and if they reduced the wages which the Return stated the miners were earning in 1900 by those percentages, instead of having the figures which he had quoted they would have 23s. for Northumberland, 23s. 11d. for Durham and 29s. 11d. for Yorkshire. He thought he need not quote any further figures in order to prove to the Committee how utterly fallacious were those contained in the Return to which he had referred in regard to wages and to the profits of coal owners.

With reference to the coal tax there was no tax which could have been imposed which was more unjust or indefensible. It was a violation of the principle of the equal incidence of taxation; it was a tax imposed upon one section only of a great industry, while other equally great and profitable industries had no corresponding tax put upon them. It was a reversal of the fiscal policy of this country. Capitalists who had invested their capital in the sinking of collieries never dreamed that the State in the year 1902 would confiscate £2,200,000 of the earnings gained in the working and exporting of coal, all of which loss had to be borne by the colliery owners, coal miners, shipowners and seamen of this country. Goal was the only British export upon which any tax was levied. They were told that this year's Budget was a free trade Budget, but he submitted that so long as the financial arrangements for the year included the imposition of the coal tax it was worse than any protectionist Budget. They had heard a good deal lately about preferential tariff arrangements between the mother country and the colonies. This was a tariff arrangement, which was not a fair trade arrangement between the mother country and the colonies, inasmuch as it handicapped the British coal producer and gave a bounty in favour of the Canadian, Australian and Indian producers in certain markets where they entered into competition with English coal. It also gave a bounty of 1s. a ton in favour of the foreign coal producer in cases where British coal had to be sold in competition with such coal. He could not understand how any free trader on the other side of the House could vote for the continuance of the tax since it interfered with the free exchange of a commodity at its natural price. Neither could he understand how the Members of the House who were in favour of a preferential tariff arrangement between the mother country and the colonies could support a tax which imposed upon the British coalowner a charge of 1s. a ton, thereby handicapping him in interchanging British coal with our colonies and other British possessions.

The Chancellor of the Exchequer in speaking the other day, said the tax was not paid by the consumer, and presumably he was referring to the British consumer. He ventured to say that the tax was paid by a great many British consumers. The great coal industry of this country employed at the present time 825,000 men and boys, while the shipping trade which was engaged in the exporting of coal also employed an enormous number of seamen. He did not hesitate to say that the coal industry, combined with the shipping trade, had dependent upon them a population of six or seven millions, who were affected by the burden of this coal tax in so far as it tended to diminish wages. He desired to show specially how that particular tax operated in the export coal trade of Northumberland, Durham and Yorkshire. Those coals possessed no monopoly of markets; the bulk of the export from these districts went to Germany, Holland, Belgium, and France, in all cases in competition with foreign coal. There was only a certain price obtainable, and that price was fixed by the price which foreign competitors were prepared to accept. But out of that price the coal tax had to be paid, and that meant that 1s. per ton less was received for the coal at the pit's mouth. It had been suggested that the export coal trade of the North of England had not been injuriously affected by this tax, but he would like to lay before the Committee some figures which would put a very different aspect on the case. The exports from the north-eastern parts of this country to Germany, Holland, Belgium, and France amounted to 2,000,000 tons less in 1901 than in 1900, and to 2,600,000 tons less in 1902 than in 1900. It was true that in the export of bunker coal there had been an increase of 200,000 tons, but that did not affect the figures to any practical degree. He would like to give one or two instances to prove how the export was affected. The exports of German coal to Holland, Belgium and France increased in 1902 as compared with 1901 by no less than 1,154,000 tons, while our north-east coast exports to those countries diminished in the same period by 678,000 tons Thus aided by the bounty given to them by the British Government, the German coal producers not only deprived us of a trade representing 678,000 tons last year, but in addition to that sent a further supply of 475,000 tons to those markets, of which we should have had a good chance of obtaining a fair share had our producers not been handicapped by this imposition of a shilling per ton duty by the British Government. If they took the exports of Holland and Belgium only, the figures were still more startling. In 1900 we sent to Holland and Belgium nearly 3,000,000 tons from the north-east ports; the quantity fell in 1901 by 1,200,000 tons, and in 1902 there was a further fall of 440,000 tons. Thus in the two years the exports from the north-east ports of this country to Holland and Belgium fell from nearly 3,000,000 tons to 1,362,000. While the British exports to those countries fell to that alarming extent, the exports from Germany to Holland and Belgium increased in 1902 by no less than 970,000 tons as compared with the figures for 1901. That illustration appeared to him to be absolutely unanswerable, and he did not see how the Chancellor of the Exchequer could reply to the facts he had adduced. They could not be denied, and they went to show how terribly this country had been handicapped by the policy of the Government in cases in which it had to enter into competition with foreign coal.

He would give one or two concrete instances of that. Take the case of the East Railway Company of France. For generations that company had drawn their locomotive coal from British collieries. Last year, for the first time, when in making up the prices it was necessary to add 1s. per ton—the export duty—a burden which the German coalowners were not called upon to bear—the contract went to Germany, and thus the coal-owners of this country lost an order for at least 150,000 tons. Similarly we had lost important contracts in Rotterdam and elsewhere, and this decrease in our export trade had taken place, notwithstanding an unprecedented fall in shipping freights since the coal tax was imposed. The fact was, that in order to retain our coal export trade coalowners and ship-owners had been compelled to lay their heads together, and it was only when the shipowner had shown himself willing to accept a substantial reduction in the freight, and the coalowner had been prepared to make a substantial reduction of price, that they had been able to retain the trade. He ventured to say that the whole community was suffering from the effect of the tax, and this was especially felt in the North of England. If they had a reduced number of ships taking our exports abroad, it followed that they had a reduced number for bringing imports to this country, and, as a consequence, higher freights were charged for those imports. Let them look at the trade with France. Would the Committee conceive it possible that, in the face of the difficulties we had to encounter in connection with the coal trade of France, the Government had added to those difficulties by giving the French producer a bounty equal to 1s. per ton. The French absolutely imposed an import duty of 11¾d. per ton on British coal, and now the British Government had put a further burden on that coal by charging an export duty of 1s. per ton, which was all in favour of the French producer.

The tax on coal was two years ago justified largely on the ground that the coal trade was at that time ex- tremely profitable. At the same time the fact that other great industries were equally profitable was ignored. That argument could no longer be used. Many qualities of coal were now only worth half the price they commanded three years ago. Some collieries to-day were working at an actual loss, and many others were working at little or no profit. If the tax were to be continued, however, it ought to be made an ad valorem tax, with a view to rendering its incidence more equitable. Under the present arrangement some collieries situated near the coast had to pay only 6d. a ton for placing the coal on board ship while others less favourably situated had to pay 2s. 7d. Thus in one case the price of coal at the pit's mouth was 5s. 5d. if sales were made at 5s. 11d., while in the other exactly the same quality of coal sold at 6s. 1d, only left 2s. 6d., there being 2s. 7d. carriage and 1s. coal tax to deduct. Was it not ridiculous that both should pay the same amount of export duty? It would be a fairer arrangement if the tax were levied on the whole output of coal, instead of on one portion of it. A tax of 2d. per ton on the whole output would produce nearly as much revenue as was obtained at present, and if 1d. were borne by the royalty owner and 1d. by the coal-owner the burden would be infinitely more bearable than it was now. One of the professed objects aimed at in imposing the tax was to husband our resources of the most valuable coal we possessed; but the effect of the tax had been just the contrary. Colliery owners were accustomed to prolong the life of the best and cheapest working seams by working concurrently the thinner and more expensive seams, so long as they could make a profit on the average produce of both; but the result of the tax on export collieries had, in many cases, been to concentrate working on the cheaper and more valuable seams. Therefore the object which the Chancellor of the Exchequer said he had in imposing the tax had been absolutely defeated, and a directly opposite effect was now operating.

There was another aspect of the question which ought not to be lost sight of. There were 825,000 men and boys working in the coal mines of the country in a most arduous occupation, and their wages had, in consequence of this coal tax, been considerably decreased. In Northumberland wages had been reduced no less than 35 per cent., in Durham, 31¼ per cent., and in Yorkshire, 10 per cent. Wages, at any rate, in Northumberland and Durham were based upon the selling price of coal at the pit, and that price was substantially reduced by reason of the coal tax. This was not, so far as the counties of Northumberland and Durham were concerned, a small matter. They exported a very large proportion of their output, and in the last two years there had been placed on the coal trade of these counties in connection with this tax an increased burden of £1,300,000. Therefore, this was no light burden on the coalowners and coal miners, for they had had to pay their full share of income tax and of the increase in Imperial taxation, direct and indirect; and the huge increase on local taxation bore on them equally with every other section of the community. Whereas the Government had remitted half of the rates to the landowners of the country, no such remission had taken place for the relief of such a great industry as that of coal mining. On the contrary, as he had shown, a new tax had been placed upon it without the slightest justification whatever, and in absolute violation of all sound principles of the incidence of taxation. He did not know what reply the Chancellor of the Exchequer would give to-day, but he ventured to say that there could not remain long in existence in this country a tax levied upon one British export only when no corresponding tax was levied on any other British export. This was a tax which could not be approved either by free traders on the one hand, or those who were in favour of preferential tariffs within the Empire on the other. The question now was whether the Chancellor of the Exchequer would abolish this tax to-day so that they might face the great controversy which had arisen as to whether or not there should be a change in the fiscal policy of this country. They should approach the question with the way clear. The way had been cleared to some extent by the abolition of the corn tax. That made the present Budget practically a free trade Budget, but, in connection with the financial arrangements of the present year, there was this worse than protective tax—the coal tax — imposed on one industry alone. It was an unjust tax which could not endure if the coal trade along with other industries was to receive justice at the hands of the British Parliament. He begged to move the following clause—

New Clause (Reduction of Coal Duty): On and after the first day of August nineteen hundred and three one penny shall be substituted for one shilling as the duty on coal under section three of The Finance Act, 1901." (Mr. Joseph Walton.)

Brought up, and read the first time.

Motion made, and Question proposed, "That the clause be read a second time."

*MR. FENWICK (Northumberland, Wansbeck)

said that if the speech of the hon. Member proved anything it proved that the coal tax was one which lent itself to evasion and also to fraud. He ventured to say that a tax that lent itself to evasion and fraud was one that could not be approved by this House. The Chancellor of the Exchequer was asked the other day by his hon. friend the Member for Merthyr Tydvil as to whether he was aware that in some parts of the country this tax was being evaded. The right hon. Gentleman's answer was not very explicit, but it gave them the impression that he was conscious that evasions were taking place in some parts of the country. They knew perfectly well, as had been stated by the hon. Member who moved the new clause, that fraudulent transactions did take place in reference to this tax, which had a very injurious effect on the wages of the workmen. He should like to call the attention of the Committee to what happened two years ago when this tax was first imposed. The late Chancellor of the Exchequer at that time rightly described his proposal as a novel proposal. It was novel in the sense that no such tax had been in existence in this country for more than fifty years. It was a novel proposal certainly coming from a Chancellor of the Exchequer whom they had all been previously inclined to regard as a convinced free trader. The proposal coming from such a quarter certainly struck them with surprise because an export duty had always been held by political economists to be one of the worst forms of protection. An export duty constituted a bounty to the foreigner. It was a bounty given in the interest of the foreign producer, and enabled him in many cases to compete successfully with the home producer in markets where he would not otherwise be able to do so. In short it was a "graceful concession" to the foreign producer at the expense of the home producer. He was quite sure that the late Chancellor of the Exchequer who proposed this duty did not intend that it should have that effect. He was quite sensible of that, and he was willing to make the fullest admission on that point. When the miners' deputation waited upon the right hon. Gentleman in April, 1901, he distinctly and emphatically said— I intend this tax to fall upon the foreigner—that is to say upon the foreign consumer. They knew, as a matter of fact, from the statement made by the present Chancellor of the Exchequer that this tax had not fallen upon the consumer.

*THE CHANCELLOR OF THE EXCHEQUER (Mr. RITCHIE,) Croydon

Upon the consumer in this country.

*MR. FENWICK

said the right hon. Gentleman, in reply to his hon. friend the Member for Barnsley, explained that he had in his mind the home consumer, but none of them ever for one moment dreamt that the export duty was likely to fall upon the home consumer. He was afraid that the Chancellor of the Exchequer had not even read his own Budget speech. He had read it and re-read it, and it certainly did not appear clear that the right hon. Gentleman had in his mind the home consumer when he said that it did not fall on the consumer.

*MR. RITCHIE

Surely my assurance on the matter should have satisfied the hon. Gentleman. I was talking of the home consumer, and if he will read through that portion of my speech he will observe that I was dealing with the question of taxation in this country and what taxation should be remitted. I mentioned the coal tax as one that did not fall on the consumers in this country. I was talking all the time about the interest of consumers in this country.

*MR. FENWICK

said he would accept fully and frankly the assurance given by the present Chancellor of the Exchequer, but apart from that admission, it appeared to him that the right hon. Gentleman in his Budget speech indicated that the export duty on coal had not been borne as the late Chancellor of the Exchequer assured the House it would be borne, namely, by falling upon the foreigner, and that neither the coalowner nor miner in this country would be any the worse for that tax. The deputation that waited upon the late Chancellor of the Exchequer endeavoured to convince him that the effect of the export duty would be to reduce the export trade of this country and to reduce also the wages of those who were engaged in producing for the foreign market. The late Chancellor of the Exchequer replying to that statement, said— I should never have dreamt of proposing the tax, and I should never dream now of pressing it, if I thought the result of it would be such as you have stated to-day. He thought he would be able to show the Committee that, so far at least as the North of England was concerned, the effect of the operation of the tax had demonstrated the accuracy to the very letter of all the representations that were put before the right hon. Gentleman the Member for West Bristol by the miners' deputation two years ago. Our trade had fallen off and wages had been reduced through the imposition of this tax. The exports from north-eastern ports to all countries in 1902 showed a decrease of no less than 434,525 tons as compared with 1901. If they took the nearest Continental ports and compared the exports from the north-eastern district they would find that to such places as Belgium, France, Holland, and Germany the decrease was even more marked. The exports of coal to these countries amounted to 656,450 tons less in 1902 than in 1901, and that notwithstanding the fact that the freights in that period were unprecedentedly low. If it had not been for that, unquestionably the reduction would have been considerably greater. And since the imposition of that tax the wages of the Northumberland miner had decreased by 12½ per cent. On this point of wages it seemed to have been assumed, for the purpose of defending this tax on the coal industry, and particularly the exporting part of that industry, that it was peculiarly fitted both by the profits that were being received by the coalowners and the wages of the miners, for the imposition of an extra tax. The miners were supposed to be receiving—or it was assumed they were receiving—higher wages than the workmen in any other industry; and that the coalowners were making more profits than the employers in any other industry, and, therefore, that they were fit game to be fleeced by the Chancellor of the Exchequer, who was in need of further revenue.

Now, what happened? At the time when the Government were contemplating the imposition of this duty a very remarkable thing took place. The Board of Trade, on its own initiative, got out statistics covering a period of fifteen years—a thing that had never been done before, to the best of his knowledge—showing the amount of profit made by the coalowners, and the wages that were being received by the miners, in order to demonstrate that the profits of that industry were sufficiently large, and that the wages were high enough to justify the Government, when in search of additional revenue, to levy an additional tax on that industry. No one ever asked for that Return. No Motion was made in the House calling for it. And why was that Return limited to one industry, while there were other industries in which the employers were making equally large profits and the workmen were receiving equally high wages? He knew half-a-dozen such. The Return was prepared to bolster up a case and to persuade the country, which had been undoubtedly suffering from the high prices that had to be paid for coal, that this was an industry on which they ought to saddle some higher rate of taxation. And let him point out that the part of the industry that was selected to be penalised was not the one that was responsible for the high prices of coal to the home consumer. Their coal was produced for the foreign market; their prices were regulated by the supply and demand of the foreign market. Their produce did not affect the home market at all. It was the producer for the home market that got the cream off the milk in 1900 and 1901. That part of the industry which received the greatest advantage from the coal boom was the part not at all affected by the imposition of the tax; and that part which had to compete with the foreigner in foreign markets was alone saddled with this increase of taxation. Why should not the engineering trade have been selected? He ventured to say, from the reports in the newspapers, that the manufacturers of small arms and ammunition in and around Birmingham reaped quadrupled advantages from the war prices compared with the coalowners and coal miners. It was a matter of common knowledge that the manufacturers of small arms ammunition in and around Birmingham were compelled to run their works day and night, so great was the demand for their goods. And while, before the war, some of these companies were scarcely able to pay any dividend at all, they paid a dividend during the war of 150, 200 and more than 200 per cent. He imagined that the coalowners, whatever their profits, would have been very glad to have had their dividends run up to anything like 150 or 200 per cent. during the good times of their industry.

Another consideration which tended, in his opinion, to show the iniquity of the coal tax was this. The miner not only paid his share of taxation in every other department—he did that just as ungrudgingly as any other taxpayer—he made no clamour or complaint that he had to pay the taxes which were levied equally upon every other citizen in the country; but why should he be called upon to pay over and above—the tea, tobacco, sugar, and corn duties—a tax which did not affect any other citizen in the United Kingdom? He maintained that that was manifestly unfair. Let the Committee conceive what this coal tax involved. This tax was not a tax upon the value of the article at the pit's mouth. It was a tax of 1s. per ton free-on-board, which included all the additional cost of carriage, dock and harbour dues. If they took the tax on the value of the coal at the pit's mouth it amounted, so far as the north-east of England was concerned at this moment, to a tax of very slightly under 15 per cent.; and, if they took the Government figures issued for last year, the prices were very much lower now than in 1902—it was equivalent to a tax of 13.4 per cent. Now, supposing a proposal were made in this House by the Chancellor of the Exchequer, or any other Member, that a tax of 15 per cent. should be imposed upon the value of cotton, woollen manufactured goods, upon pig-iron, or steel rails, was there a Member of the House that represented a constituency which would be affected by such a tax that would not raise his voice in the strongest possible protest against the imposition of such a duty? What he had stated represented the real facts, so far as Northumberland was concerned, and he was not concerned with any other district. He should be surprised, indeed, if the Chancellor of the Exchequer did not admit that the county of Northumberland, and the North of England generally, had a case of grievance and hardship inconsequence of the imposition of this tax. Again, what was the effect of the tax on the inferior sorts of coal? The hon. Member for Barnsley had pointed out with some effect that in times when prices were fairly high, and the demand was fairly keen, coalowners were able to dispose of their inferior qualities of coal along with the superior product, and managed to make both qualities pay. But the moment a depression in trade and a decline in prices set in, they were driven back to work only the superior coal, and to leave the inferior coal unworked until the old prices returned. And so, in place of keeping their best coal for future supplies, that quality was being worked out more rapidly under the effects of the tax. And then the poor seams would not be worth going for when the superior seams were worked out. He put that consideration before the Chancellor of the Exchequer.

The right hon. Gentleman knew that there was a Royal Commission at present sitting on coal supply, and he dared say it was as well known to the right hon. Gentleman as to any Member of the House that very important expert evidence had been given before that Commission, tending to show the possibility of developments in science which might enable us to do altogether in the future without the wealth of the coal of this country. If their prognostications proved to be well founded, then the material wealth which the tax prevented from being developed might be entirely lost to the community, in consequence of further developments in scientific research. Was that a wise and prudent policy for this country to pursue? He submitted it was not. If the effect of the tax was, as he believed it to be, to prevent the free development of the coal fields of this country, then, in his judgment, the tax ought to be removed as speedily as possible. He wished to ask the Chancellor of the Exchequer if he was prepared to grant a Return showing the profits of employers and the wages of workmen in half-a-dozen of the largest industries in the country similar to the Return showing the coalowners' profits and miners' wages which was published two years ago for the purpose of supporting this tax. Why should one industry be singled out; and why had the Government taken advantage of income tax returns and other statistics in their possession to give to the world what they supposed to be the profit of the coalowners and the wages of the miners? That Return was in many respects absolutely fallacious. He was not concerned to defend the position of the coalowners. There were coalowners in the House who were able and competent to defend their own position; but he wished to put the case of the miners. A Return was issued the other day on the Motion of the hon. Member for Barnsley bringing the Return of 1901 up to date; but as far as the wages of the workmen were concerned, the top wage—viz., the wage paid to the coal hewers, was taken as the average wage of all classes in the mines. That was obviously an unfair way of ascertaining the average wage paid to miners, because between the wage paid to a coal hewer and the wage of the lowest paid class in a mine there was a margin of from 4s. to 4s. 6d. per day. That was, in his judgment, a very unfair way, not to use a stronger term, for the Government to proceed in order to defend this tax. He hoped the Chancellor of the Exchequer would be in the position to inform them that he would be prepared to grant similar Returns with reference to half a dozen of the chief industries of the country. If that return was granted, it would clearly demonstrate that in nearly every other staple industry in the country the profits of the employers and the wages of the workmen were higher than in the coal industry. When the Chancellor of the Exchequer was able to remit taxation, it would have been wise and prudent on his part to have repealed the coal tax. If instead of taking 4d. in the £ off the Income Tax, he had reduced the Income Tax to 1s. the other 1d. would have given him all he required in order to abolish this tax. He did not agree with the suggestion of the hon. Member for Barnsley that it was better to deal with this tax by adopting the ad valorem principle. That would not make the right hon. Gentleman's path any smoother. He suggested to the right hon. Gentleman that it would be better to repeal the tax altogether. He congratulated the right hon. Gentleman on the courageous way in which he faced the corn tax and got rid of it; and he hoped the right hon. Gentleman would give the Committee an assurance that at the earliest opportunity he would repeal the coal tax also, which operated most unjustly and most injuriously on certain districts in the country. He had the greatest possible pleasure in supporting the new clause.

MR. F. W. LAMBTON (Durham, South-East)

said that in offering a few remarks to the Committee, he would be only fulfilling the wish of the Chancellor of the Exchequer who asked the hon. Member for Barnsley to put down an Amendment in order that the coal tax might be discussed. His right hon. friend in his Budget speech said that the coal tax was neither a direct nor an indirect tax; but having listened to the speech of the hon. Member for the Wansbeck Division, his right hon. friend would have to admit that it was a very direct tax on the export of coal from Northumberland, Eighty per cent. of the coal raised in Northumberland was exported; and if the tax was not a direct tax on Northumberland he could not conceive what a direct tax was. The coal tax, like the corn tax, was liable to misrepresentation and misapprehension. When it was introduced two years ago, there was a good deal of misrepresentation and misapprehension on the part of those who supported it. It was then said that the tax would not injure the coal industry; but the figures which had been given by the hon. Member for Barnsley and the hon. Member who had just spoken showed that the export of coal from this country had suffered very considerably indeed since the tax was introduced. Since 1900 the export of English coal to Holland had diminished by 59 per cent. and to Belgium by 46 per cent. During that period, the export of German coal to Holland and France had increased by 1,100,000 tons. That showed that the tax was a direct bounty to German coal. The hon. Member for Barnsley referred to some contracts which had been lost owing to the tax. Several coal contracts had lately gone to Germany, which formerly came to this country. The contract of the Paris gas works which used 300,000 tons of coal was lost to England and given to Germany. That meant to Germany a direct bounty of 300,000 shillings. A number of other contracts on the Continent had also been lost. It was perfectly obvious from the figures which had been quoted, that the tax had operated very adversely as regarded the export of English coal. Whether that was desirable or not he would not now discuss. The supporters of the tax might say that the coal exports had not, after all, fallen very much; but, owing to the strike in America, 750,000 tons of coal were sent to that country, which, in normal conditions, would never have been sent there. Further, 500,000 tons of coal had been sent to Canada, to the West Indies, and other places hitherto supplied by America. They had lost a very considerable portion of their trade; and was it probable that they would ever regain it.

He had no doubt that the Chancellor of the Exchequer would tell the Committee that he did all he could to retain markets, not to lose them. It had been already pointed out that this country was losing its markets when freights were lower than ever they had been before. Supposing freights were higher, how could this country possibly compete with Germany? He would point out another fact which showed how this tax had dislocated the coal trade. During 1902, the small coal produced amounted to 3,276,000 tons, an increase of 2,000,000 tons on the preceding year. That in itself showed what an effect this tax had when coalowners were obliged to send coal abroad at 6s. per ton. That must directly affect the wages of the miners. On the general aspect of the question, he wished to know on what principle the tax was going to be maintained. How could the tax be continued under free trade, as it violated every single principle of free trade? How could it be continued under protection, as it violated the principle of protection by giving a direct bounty to foreign producers? He should like to have some light and leading from the Government in this matter. He did not care so much about leading, as if he had convictions he did not wait for other people to settle them; but he should like to have some light on the matter. The more light the better. He did not think that much light had been thrown on fiscal matters during the last few years. They were assured that the coal tax would be entirely paid by the consumer, and that the corn tax would be entirely paid by the exporter. He himself was unable to reconcile those two statements. The Government reminded him of the eccentric gentleman of whom he read in his youth, who, having scratched out both his eyes, jumped into a quickset hedge and scratched them in again. He held the old-fashioned free trade idea that all taxes are paid by the consumer, but his great objection to the coal duty was that it tended to dislocate trade and hamper industry. He wished the Colonial Secretary would give them his views on this subject. He strode like a colossus across the world and appeared to think a great deal about Canada. They would like to know, however, how he reconciled this duty on coal with his fiscal proposals. He represented in Parliament not the Dominion of Canada but the county of Durham, and he should like to know why the interest of that county should not be considered. When he opposed the coal tax two years ago, he was looked upon as a rebel, but he noticed there were now quite a number of men around him who used very strong language about the Government. He ventured to warn the Government two years ago that it was a very dangerous thing to taste blood, but he did not think the end would be so soon. Now the rope was already dangling from the tree. He referred to a speech by the Colonial Secretary in favour of the coal tax in 1901, in which he said the miners had gained by the war and should pay their share of the expenses. It was an entirely new idea to his mind that war was more profitable than peace, and he showed by a comparison of prices between three years ending 1900 and the three years ending 1890 that the war did not increase the profits of the coalowners, and therefore there was no reason to penalise the miners by extra taxation. If the Colonial Secretary was going to carry out that penalising policy how would they get on in a war of tariffs? Would the Chancellor of the Exchequer put taxes on the trades which could be shown to have benefited? If so, great difficulties would be imposed in the way of the new fiscal policy. He hoped the Chancellor of the Exchequer would give them some hope of the remission of this duty which pressed so heavily upon a great industry in the North of England.

MR. JOHN WILSON (Durham, Mid)

said that if the figures which the hon. Gentleman had given were true, he was surprised that the coalowners did not at once join the Party opposite. If he were a coalowner he certainly would. He rose to emphasise what had been said by the hon. Member for Wansbeck. The Chancellor of the Exchequer had remitted the corn tax and he would have liked to have seen the right hon. Gentleman take off this tax on coal as well. But half a loaf was better than no bread, and he hoped the right hon. Gentleman, having remitted the corn tax, would next year see his way to remitting the coal duty. Some of them had had an opportunity of meeting the Chancellor of Exchequer in a smaller room than this, this year, and on that occasion they had put forward certain figures, and although those figures did not accord with those of the right hon. Gentleman, he hoped at some future time they might have an opportunity of hearing from the right hon. Gentleman a fuller explanation of the figures he adopted. He gave the right hon. Gentleman credit for being the most British Chancellor of the Exchequer they had known for some time. The right hon. Gentleman was staunch in his opinions and determined in expressing what he believed to be the correct view; in facing a position every true man would face, he had the tenacity of the British bulldog and the courtesy of a British gentleman. The figures given by the right hon. Gentleman at the meeting to which he had referred did not present the case fairly. The figures in relation to output and wages were for the years 1899 and 1902, which was not a fair comparison. Had it not been for the fact that 1900 was a bumper year, as regarded both profits and wages, the tax would never have been imposed. The greater output was due, not to the tax, but to the natural development of the trade. Even in the most depressed years there had been progress in the volume of the trade. In 1902 they were reaping the benefit of the contracts made in the brisk time of 1900. The Committee would remember that in 1901 the Chancellor of the Exchequer had to exempt from the tax contracts made prior to April in that year, simply because he had been unaware that such contracts were made. This was a question which could not be settled by a single year's experience. It had been clearly proved by taking years which afforded a fair comparison, say 1900 and 1902, that the trade was going back rapidly. The Chancellor of the Exchequer drew a glowing picture of the prosperity of the trade under the shilling tax, according to which, if the tax had been increased to 2s., the gates of the millennium would have been opened, and those concerned would have been at once transported to an economic paradise. The right hon. Gentleman had made out that they were far more prosperous with the tax than without it, but that was simply because the years 1900–2 did not afford a fair comparison.

Allusion had been made to the northeast. Durham was deeply interested in this question. His concern was for workmen. As secretary to a trades union he had regard to the position of the employers, because whatever militated against them militated against the workmen, and whatever improved their position improved that of the workmen also; but at present he wished to speak with regard to the position of the workmen. Figures had been quoted which showed conclusively that since the imposition of the tax British trade had dwindled in Continental markets. In the markets of Holland, Belgium, and France, British trade had diminished to the extent of 747,000 tons. According to a Return granted to the hon. Member for the Wansbeck Division, the average annual output per man and boy employed in the mines of this country was 284 tons, so that the diminution to which he had referred represented the labour of 2,630 persons. If the tax meant that in a time of comparative prosperity, what would it mean if the trade got back to the level of, say, 1886, when wages in Durham were only 3¾ above the standard as compared with 31¼ now? If the tax had prevented the employment of 2,630 persons in a time of prosperity, what would it mean when the trade reached low prices at which, from natural causes, the inferior pits had to stop working. There was also another side to the question. The tax was not only restricting our markets, but raising and strengthening a strong competitor. Without the shilling tax he believed the development of the German coalfields would not have taken place. The following statement had recently appeared in a newspaper:— There is remarkable activity in the German coal trade. Exhaustive surveys ate being made with a view to sinking new shafts; experimental borings are being made; and one colliery expects in a year's time to treble its present output. Hopes are being largely entertained with regard to the future, and it is anticipated that Durham coal will eventually be lost entirely so far as the German steamship lines are concerned. One of the most serious evils that could arise from the tax was the strength and activity it imparted to the German coal trade. The imposition of this tax lessened the chances of the British competitor to contend successfully with the German trade. Capital was being rushed into the German coalfields; large developments were taking place; pits were being sunk — all because the people of Germany, likewise business men, saw that they were able, in consequence of the imposition of this tax, successfully to compete with British coal. According to the report of a Committee appointed by the North of England Steamship Owners Association, the exports of coal from Germany in 1902 as compared with 1901, had increased, by 515,000 tons to Holland, 455,000 tons to Belgium, and 183,000 tons to France. The markets which they could have commanded on the north-east coast had been lost because they had increased the power of the German coal producers to compete and cut them out in foreign markets. There were coalowners in the House who could say that they had lost markets because they could not afford under their contracts to loss this 1s. per ton. The table he had mentioned contained the percentages of reduction of wages which had been lost to the workers, and hon. Members should not be surprised if heat was introduced into the remarks of the four or five hon. Members who represented the miners, more especially from the districts whore this embargo had been placed upon coal The representatives of the miners would stand condemned if they did not enter their protest, because they saw the position of those they represented being jeopardised, and the possibility of the miners being thrown out of employment and their wives and children wanting bread. The result might be that whole villages would be depopulated, because they depended upon the miners' earnings. In the counties of Durham and Northumberland, and every mining district of this country, there were large villages absolutely dependent on the work of the miners, if by any natural means, over which they had no control, villages were depopulated, it was a sad calamity, but if, by the Act of Parliament, this happened it was to them a question of real heartburning, and made them do all they could to prevent such a calamitous tax being imposed. They had been told that in 1900 wages were 65 per cent. above the standard, but since that time they had suffered to the extent of 31¼ per cent. reduction in wages. What did that mean to a workman? Let hon. Members put themselves in the position of a workman whose wages had suffered this serious reduction. Think of the limitations this meant upon the miner's comforts, and how it deprived him, not merely of comforts, but of the necessaries of life. If hon. Members would look carefully at this Return they would find in it the words "estimated" and "assumption" and "approximate," but they would not find the word "average." In a real statement there should be no words like those, but there should be a plain statement or no statement at all. Not long ago he headed a deputation to the Chancellor of the Exchequer and one point put forward was that they had nothing to complain of as far as their wages were concerned. He wished to point out, however, that the figures upon which the right hon. Gentleman based his statement were put into his hands by other people.

*MR. RITCHIE

I took them from the printed Returns.

MR. JOHN WILSON

said that if 28s. was paid to every man in a mine it would not be too much for a miner who had to work sometimes between ten and twelve hours per day. There were thousands of men who worked in mines at 5s. or 6s. a week less than this wage, and he asked if that was too much for men who had to work under such dark and dangerous conditions. He contended that coal should bear no tax at all. If the sugar duty remained they would pay it, and they would pay the tea duty; but he contended that they had no right whatever, and their trade had no right, to bear this increased embargo and prohibition. How did this tax fall upon the foreigner? Was the sugar bounty any parallel? How would the foreigner pay the 1s. tax? Was the foreigner not as keen in his trading propensities as those in this country? Did the foreigner not believe in buying in the cheapest market and selling in the dearest. How could they expect the foreigner to pay this tax? This tax limited the power of the consumer in this country to buy the necessaries of life; he knew that at present they were talking without hope, but he would conclude by asking the Chancellor of the Exchequer to look at this thing in a businesslike manner, and if next year he could see his way to remove the tax he would earn the gratitude of the whole mining community of this country.

*SIR JAMES JOICEY (Durham, Chester-le-Street)

said that two years ago he opposed the imposition of this tax because he thought it would be very mischievous and injurious to the coal industry and more particularly to the coal industry of Northumberland and Durham. All these prophecies he put forward had in his judgment been largely realised. The first statement he made was that undoubtedly where they had competition with other producers of coal they would lose a good portion of their trade, and he specially mentioned as illustrations Holland, Belgium, Germany and France. The figures which had been put before the Committee had justified everything which he said upon that occasion. Almost in every case where they had succeeded in retaining an old contract, in the countries he had mentioned, it had been done only by taking 1s. per ton less than if there had been no coal tax. Not only had the employers suffered, but the tax must of necessity affect the miners' wages. No one who had any experience of transactions in fixing the wages of miners, would deny that undoubtedly this 1s. per ton had affected wages. He could show how inequitable this tax was as a revenue-producing tax, but he would content himself with saying that he thought no Chancellor of the Exchequer had any right to select a small portion of any particular industry and put a tax upon it for revenue purposes. He admitted that when the tax was first proposed there were some strong reasons for increasing the revenue of the country, but these reasons were gone. There was a serious war in operation, but that had now ceased. He was satisfied, from what he had seen of the character and ability of the right hon. Gentleman, that when he looked at the tax, and found the mischievous nature of it in connection with the coal industry, he would ultimately abolish it. He was certain that no man who went into this question with an impartial mind could come to any other conclusion than that; apart from its revenue-bearing strength it was most mischievous, and that the country actually lost more by the injury that it inflicted upon industry than it gained in the way of revenue.

He would like to refer to one or two questions which had been mooted, but had not been sufficiently dealt with. A Paper had been issued showing the profits of coalowners. He failed to understand why there should have been a special Paper issued with regard to the profits in the coal industry, while other industries which were equally profitable during the boom of the last two or three years were practically left out. He could not understand why coal-owners should have been penalised in this way. The only reason for that, he thought, was that coal was sold to individual consumers at very high prices, and the Chancellor of the Exchequer thought if the profits of the coalowners were shown to every voter the tax would easily pass on account of the strong feeling against coal producers in the country. That would possibly have been a strong argument it the tax had been put on the whole of the producers, but one-fifth of the coal industry only had been selected to pay the tax. Everybody who knew about the industry knew that it was the most speculative carried on in this country, and that one year's profits or losses could not be taken as a guide or criterion as to the results of the general industry. In the statement issued by the Chancellor of the Exchequer the profits were shown for seventeen years, after deducting a certain amount for wages, and working expenses other than wages. It would have been very much better if the Chancellor of the Exchequer had given what these other expenses were, so that the statement would have shown clearly to the House and the country what were the actual profits realised by the coal-owners. The right hon. Gentleman had failed to do that. He was going to do that, and let the House see whether there was anything in this special industry to justify a tax of this kind. He would make an estimate of what the other expenses were. He had made some inquiries and found that the lowest at which they could put these expenses was 1s. 9d. per ton. There were cases in Wales where the expenses other than wages amounted to 2s. per ton, and he knew of cases where they were as high as 2s. 6d. per ton; and in taking as a basis 1s. 9d. per ton he thought he was adopting a fair figure. Taking 1s. 9d. per ton it amounted to £87,500 on a million tons In the first year referred to in the Paper the amount left for expenses and coalowners' profits showed that on every million tons produced in this country there was an actual loss to the employers or producers of £12,500. In 1887 it came to a loss of £11,000, in 1888 a loss of £8,500, and in 1889, £23,500. He found that taking the standard he had mentioned—and he challenged the Chancellor of the Exchequer to contradict the statement—in eight of these seventeen years there was an actual loss on every year, while in the other nine years there was profit. Sometimes the loss reached as high as £32,500 per million tons. Taking the quantity of coal produced during these seventeen years, and estimating the capital employed at 10s. per ton, which by all experts was recognised as a fair and reasonable sum, and without taking into consideration any money which had been lost through collieries having been closed, and taking the whole losses and profits together, it represented a yield upon that capital of 2.7 per cent. for the ten years 1892 to 1901 it was 4.68 per cent. That was without taking into consideration exhaustion of seams or depreciation. He challenged anyone in this House to say whether that was a large rate of interest to be received on such a fluctuating and uncertain trade as the coal trade. He said it was not. These figures were not sufficient justification for putting a special tax upon this particular industry. He admitted that there were certain pits where the profits were large, but they could not select one pit or one owner and make that a standard for the whole. They must take the average of the whole industry and deal with the industry as a whole. It was the opinion of every expert who had gone into the matter, and it was in accordance with the evidence given before the Royal Commission, that for fifty or sixty years the profits in the coal industry did not average 5 per cent. upon the capital employed. He challenged the right hon. Gentleman to disprove that when the tax was first imposed it was done because people thought the coalowners were making huge profits. They did for one year, but it was not fair to deal with the industry for one year. He was sure the Chancellor of the Exchequer would not like to deal in that way with the income tax in connection with coal mining. In regard to the question of income tax they took an average of five years. There was no case whatever made out for any special taxation of the coal industry. He would appeal to the right hon. Gentleman to go into this question with an impartial mind. He was certain that if he did so he would come to the conclusion that it was most proper to abolish the tax. There had been an unanswerable case put forward, and he hoped to hear from the Chancellor of the Exchequer that he would give due consideration to the arguments.

LORD HUGH CECIL (Greenwich)

said he desired to say a word in explanation of the vote he intended to give on the present occasion. Everyone on both sides of the House agreed that generally speaking an export tax was a bad kind of tax. The case in favour of this tax was that the commodity to which it related stood in a peculiar position and had special advantages, and that, therefore, it was possible to impose upon it, by way of exception, an export tax without finding ourselves involved in the difficulties which usually attended the imposition of taxes of this character. To that argument the answer was made that it was unfair, but it was not so, unless it was clearly shown that this export tax was driving English coal out of foreign markets, and that we were suffering by the dislocation of industry the other evils which were ordinarily associated with this sort of taxation. Well, it was obvious that the export tax so far had not shown this, but that the effect was rather in the opposite direction. In all these economic questions nothing was more hazardous than to build a conclusion on experience extending only to a year or two years. There were so many confusing elements in all these fiscal problems that if they were hastily to assume that one particular cause was at the root of any economic phenomena, then they were liable, unless they extended their experience over a very wide period of time indeed, to make a mistake. Therefore, it must be ultimately for experience to show whether this tax had the bad effects which were attributed to it or not. It would be wiser to continue it a little longer in order that they might have an opportunity of forming a more secure judgment. There was also the argument that after all they must get money somewhere, and that it was not easy to see any other source which would not be exposed to objections even of a more weighty character than those which were stated against this tax. He did not think that he need enter into the question of the corn tax. The objections to that tax were certainly far greater than those to the coal tax; but he thought also that, having regard to the enormous importance of reducing the income tax in time of peace so that we might have a great fund to draw upon in time of war—an object of national policy of the highest importance—he did not think it was reasonable to say that the reduction of the income tax was a thing which ought not to have been undertaken on as large a scale in the circumstances of the present Budget. It followed that we must retain this tax unless some new tax were put on or an attempt made to find some new source of revenue. These two considerations pointed to retaining the coal tax. Nobody could deny that this tax, in common with all other taxes, was, in itself, a very bad thing; and the true lesson to learn from all this was that the solution of our difficulties was to be found in practising a larger measure of economy in our national expenditure. If we did that we could reduce tax at on; but not otherwise. This conclusion led him to support the Government in the division which was about to take place.

One slighter but not inconsiderable argument he would refer to. He thought it would be agreed by many hon. Members that it was most desirable to give his right hon. friend the Chancellor of the Exchequer that support which, as manager of the national finances, he was ordinarily entitled to look to this House to give him, and which he had, in himself, in a very special degree, earned by the ability, moderation, and firmness he had displayed in discharging the duties of his high position. Expressing therefore no approbation of taxation in general, and not denying that there were great objections to an export tax which might operate against this trade—but which did not seem to be quite clearly proved yet—and admitting that there was a case for continued consideration and inquiry into the subject, he thought that until economy had enabled us to achieve that great object which all had at heart—the lightening of the burdens of the people—the Committee ought to support the Budget as it stood and not ask for any further reduction of taxation from his right hon. friend.

MR. WILLIAM ABRAHAM (Glamorganshire, Rhondda)

said that the North had been well represented in the debate, and he thought it was time that some hon. Member should say something for South Wales. If anything was more condemnatory of the coal tax than another it was the fact that they had already had six speeches against it and only one in its favour, from the noble Lord who had just sat down, though some parts of the noble Lord's speech seemed to be equally condemnatory of the tax as those previously delivered. It had been said— One would have thought that colliers had such a peculiarly good position as would justify the Chancellor of the Exchequer in putting on this coal tax. He did not know which side of the House would support that. Was it because the colliers' occupation was the most dangerous of all trades in the country; was it because the collier was the man who produced, at great danger to his life, that commodity which was essential to the comfort of all the other people in the country? He did not think that these considerations would justify the imposition of this tax. Neither did the collier's wages. The collier's wages in South Wales in 1902 amounted to £1 8s. 2d. for working ten hours a day down in the bowels of the earth amid vitiated air, and at every stroke of his pick by which he earned his living, he was at the peril of his life. Was 28s. a week such an enormous wage that the Chancellor of the Exchequer would be justified in taking 2s. off it? Moreover, wages in South Wales had since gone down another 5 per. cent. Still further, the average wage had been calculated on that of the hewer, who was the highest paid man in the pit—the wage of the other classes of colliers not coming anything near his. And yet the average of the hewers' wages was taken for a justification of the tax. Why was the collier, of all men in the Kingdom, selected to have an export tax put upon what he produced, and an import tax on what he ate? Was there any other workman in the community who was more serviceable to the community? Was there any other workman who more freely endangered his life in plying his vocation? Why was he selected to pay a tax upon what he produced in addition to the taxes upon what he ate and drank equally with the other workmen in the country?

It had been said that the colliers were not favourable to war. He would be glad to think that they were not—not that they were afraid if they had reason to think that the country had need of their services. Did not the colliers see in Glamorganshire, as well as in the North, their sons and their brothers going out with alacrity to the late war? Did they not contribute largely and freely out of their pockets towards the support of the widows and the orphans made by the war? Why then should these men be selected out of the whole community to bear this double burden? The figures which had been produced in support of the coal tax were false figures. There could be no doubt that the shilling export tax on coal from this country was a bounty given to the foreigner. The Germans were coming into England and taking the trade from England, but how were they going to be driven out? The home consumers thought in South Wales that they were going to get their coal cheaper on account of the coal tax; but they never made a greater mistake. The colliery owners made out two invoices to the foreign buyer, but only one, from which the workmen were paid, came into their books. The employers got all the benefit of the tax, and the workers the loss What did that mean? Since last June the colliers had lost in wages in South Wales no less than 30 per cent. In other words the poor colliers' wives had 6s. less in the £ at the end of the week with which to carry on the home and the family. Prices were going down again gradually, although the right hon. Gentleman was able to prove to a deputation that the coal trade had not suffered last year. But if the trade had been left to the operation of the tax, it certainly would have suffered. In South Wales they had lost during the first three-quarters of the year; prices were decreasing, and they were selling less coal. Then came the French strike, and the American strike, with the result that there was an extra demand. Had it been left to the operation of the coal tax the workmen would have been earning less when they had work and would also have had less work. It could also be easily proved that those least able to bear the tax had to bear the most of it. The tax was unfair in its incidence. He thought that the Committee was really losing time in prolonging the discussion. They knew that recently the Chancellor of the Exchequer was affected by argument. They had facts and figures which proved the justice and necessity, when the time came, of removing the coal tax; and he, as one of the representatives of the workers in the House, hoped the right hon. Gentleman would take the earliest possible opportunity of repealing it.

*MR. BURT (Morpeth)

said that having spoken at great length, at almost unconscionable length, in opposing the imposition of the tax, and after what had been so well said by his hon. friend who had just spoken, by his hon. friend the Member for the Wansbeck Division, and other hon. Members who spoke from the same standpoint as himself, and who had adduced a great many of the statistics and arguments he had intended to apply, he did not think it would be necessary for him to detain the Committee for more than a few minutes. Circumstances had changed, considerably since the tax was imposed. They had now a new Chancellor of the Exchequer. He did not suppose that the right hon. Gentleman was lying on a bed of roses, but he certainly did not occupy quite the prickly couch of his predecessor. His predecessor had to face an enormous deficit when he imposed the tax, and had either to raise additional taxation or to add to the National Debt; and, in fact, he was compelled to do both. The present Chancellor of the Exchequer was fortunate enough to have a surplus, and to be in a position to remit taxation. He agreed with his hon. friend who complimented the right hon. Gentleman on the staunchness and bravery he exhibited in abolishing the corn tax. But the coal tax was an entirely exceptional tax. It was the only export duty that was imposed; and, unlike the corn tax, the sugar tax, and the tea tax, it was not broadly based. It applied only to one industry, and only to a very small section of that industry. The right hon. Gentleman, on the preceding day, pointed out with reference to the corn tax that it really did not broaden the basis of taxation because it applied to the same people who paid tea and other duties. The same was true of the coal tax, which had not even the merit of being a broadly based tax. Figures had been quoted to show the great reduction in exports of coal which had taken place during the two years the tax had been in operation. He did not know whether those figures had been thoroughly realised by the Committee. Comparing 1900, which was admittedly an exceptional year, with 1901, there was a fall of 3,212,116 tons in the exports. That was absolutely unprecedented. The coal trade was a very fluctuating trade, but exports had been rising for a considerable period. In fact, during the last fifty years, with the exception of a very few years, the rise in the export of coal had been steady and continuous; and when there was a diminution it was very slight, and generally the following year showed a complete recovery. The only exception to that was when there were coal strikes in this country. It was quite true that last year there was a considerable recovery, but yet the export was 940,000 tons below that of 1900; and had it not been for the strikes in France and the United States there would have been a much greater diminution.

He would not now argue the question, although it was a very interesting one, as to whether it was desirable that this country should export coal or not. A great deal might be said as to that. He could quite understand, and to a certain extent sympathise with, the position of those who viewed with a certain amount of equanimity, if not satisfaction, the diminution of the coal export of the country. He believed his hon. friend the Member for East Islington adopted that view. He agreed that it would be infinitely better if they had a healthy home market rather than have to export coal, which was, after all, to some extent the national capital. But when people talked about saving coal for posterity, he would point out that the patriotism of a man who was prepared to sell the rights of posterity at the rate of 1s. a ton could not be very glowing. The Chancellor of the Exchequer would not get any income if coal were not exported; and, therefore, he would have a sort of divided interest on this question; and would hardly agree with those who regretted the export of coal. He had a certain amount of regard for posterity and he should like to leave posterity a better legacy than an enormous National Debt. They had, however, to look after the present generation also. According to his hon. friend the senior Member for Merthyr Tydvil, who had gone very carefully into the question, there were 200,000 men engaged in and about coal mines who were entirely dependent on the export of coal for a livelihood; and that number excluded seamen, trimmers, railway men, and a number of others connected with the exportation of coal. Therefore, the Committee should look to the interests of the present generation, and not inflict an undoubted hardship upon them. He would like to say a word in regard to the direction in which the exports had gone. Northumberland was more largely dependent on the export of coal than any other county. Eighty per cent. of her coal went abroad, the greater part to the Baltic ports. It went to Holland, Belgium, and Russia, and it had been pointed out that whilst there had been an enormous diminution in the amount of coal sent to Holland and Belgium from this country, there had been a considerable increase in the exports from Germany to those countries, and nothing could more conclusively prove that this diversion of trade was caused largely, if not wholly, by this tax. He had no objection to Germany or any other country flourishing or entering into fair competition with us. The more prosperous other countries were the better it was for us as a general rule. But he did object that this country should practically give a bounty to Germany in order to displace us in these markets, and that was the undoubted effect of this tax.

The hon. Member for Mid Durham, who spoke with great force, had referred to a circular issued by the North of England Steamship Owners Association. Whatever might be the case with others, they had approached this subject from a purely commercial point of view, and they had made out a case that they had suffered through this tax and it had caused a great diminution of freights. They were looking forward to be able to shift their part of the burden on to the mine-owners and miners. It was only human nature for everyone to attempt to shift burdens upon others, and that no one could object to, but the miner would have to endeavour to protect himself, and if they could convince the Chancellor of the Exchequer that the miners were the chief sufferers doubtless the right hon. Gentleman would remit the burden as quickly as possible. The exporting districts had suffered by far the greatest reductions in wages, and if they increased the difficulty of getting a market for their coal wages to that extent would be further reduced. It was mainly on that ground that he asked the Chancellor of the Exchequer to look carefully into the question. His contention was that this was an unjust, unfair, and iniquitous tax, and one which ought to be abolished without delay.

*MR. RITCHIE

said this very important question had been brought before the Committee in speeches of great moderation and ability. He could assure hon. Members that if they had assumed from anything which he had said that he thought men who were engaged in this perilous and disagreeable employment were overpaid, they had drawn conclusions which he never intended that they should draw. He thought there was no class of the community whose labour and risk were greater than those who went down into the mines. He could assure hon. Members that he should regret deeply any step which would permanently reduce the wages which miners earned. The reasons urged for the remission of this duty had been that the output had diminished; that the exports had decreased; that wages had been in consequence greatly reduced, and that employment had diminished. If those allegations had been made out there would be an extremely strong case for the reconsideration of this tax. But the investigations which he had been able to make into this subject led him to believe that those allegations had not been made out, and could not be justified by any facts which were before the Committee. So far as the general output of the mines was concerned, hon. Gentlemen opposite had taken the year 1900 for the purposes of comparison. But 1900 was a very exceptional year, and they were hardly justified in dealing with it as a normal year, and then arguing that wages had been reduced abnormally, and that the output had diminished abnormally. The year 1900 was a year of great prosperity for the mining districts, and all classes interested in mining partook of the advantages of that prosperity. The mineowners made large sums of money. He made no complaint of that, because no doubt it was true they had had other years which were very poor years. But in 1900 the prices of coal were enormously high, the profits made by the owners were very high, and as the wages the miners earned depended on the price obtained for the coal, they also were exceptionally high. For the purposes of comparison it would be admitted that the year 1900 was exceptional, and from his point of view he would be justified so far as output and exports were concerned in reverting to years which did not partake of the exceptional character of 1900, but he was quite prepared to argue the question of exports even from the point of view of the year 1900. Now with regard to the output. In 1897 it was 202,000,000 tons, and in 1898 it was exactly the same. In 1899 it was 220,000,000 tons; in 1900, 225,000,000 tons; in 1901, 219,000,000 tons; and in 1902 it went up to 227,000,000 tons. So that, comparing 1900 with 1902, there was a very substantial rate of increase, and he could not reconcile that with the allegations that employment had diminished. Then take the figures with regard to exports. He could not understand from where the hon. Gentleman who had just addressed the Committee had got his figures as to exports. He presumed that his figures did not include bunker coal.

*MR. BURT

No.

*MR. RITCHIE

said that was a most important omission, because, though bunker coal did not pay duty, it had to be taken out of the ground and was sent out of the country. It was therefore just as much exported as if the shilling duty were paid upon it.

MR. JOSEPH WALTON

said the figures he gave were for the north-eastern ports, and showed that, as compared with 1900, there was a reduction of 2,000,000 tons in 1901, and 2,600,000 in 1902, and that the bunker increase was only 200,000 tons.

*MR. RITCHIE

said he would deal with those ports immediately. He was now referring to the figures given by the hon. Member for Morpeth. He would like to say here one word in deprecation of the allegation that the Return to which reference had been made had been "got up" for the purpose of making out a case. No one who knew anything about the Board of Trade would believe that that Department would be at all likely to endeavour to manipulate figures in order to make out a case. The officials of the Board of Trade were absolutely incapable of manipulating figures to order on any matter whatever, and he would say especially on matters which affected the working classes.

*MR. FENWICK

said he never for a moment suggested that the Board of Trade had manipulated the figures or that any suggestion had been made to them to do so. The question he asked was why they had been got out. They were got out for this specific debate on the coal tax, and not on the Motion or at the request of any hon. Member. He also said they were exceptional in their character, inasmuch as there had never been any similar figures produced to the House.

*MR. RITCHIE

said he was glad to have given the hon. Member the opportunity of saying what he had, because the impression left on his mind was that the allegation was that the Return had been manufactured—that the figures had been collected for the purpose of proving some specific allegation. He could assure the hon. Gentleman that he was perfectly certain that those who tabulated these figures were quite incapable of doing anything of the kind, and he was equally certain that no Minister would ever ask them to produce figures of that kind. He would now give the figures of the export trade of the United Kingdom in various years. He would begin with the year 1898, when the exports were 47,827,000 tons. In 1899 they were 55,338,000 tons; in 1900, 57,850,000 tons; in 1901 there was a very small drop; but in 1902 the figures had risen up to no less than 60,046,000 tons. That was a very startling total. Something had been said about the German output, and it had been alleged that the Germans were beating us out of our markets. What were the figures? In 1900 the German output was 109,000,000 tons, in 1901, 108,000,000 tons, and in 1902, 107,000,000 tons. So that, as far as any competition with Germany was concerned, while we had been increasing our output the German output had been diminishing.

MR. JOHN WILSON

asked the right hon. Gentleman if he would give the figures as to the invasion of our markets in Holland, Belgium, and France.

*MR. RITCHIE

said he had not got the figures. It was all very well to talk of the invasion of markets and of contracts being lost, but there were many other causes for the loss of contracts besides the shilling duty. The loss of contracts happened to merchants of all classes who had to compete with Germany or any other country, and was not at all limited to coal. It was the more likely to happen in countries where they had hitherto had a monopoly, because having secured a particular market merchants might think they could get a higher price than they otherwise would, and on the other hand a competitor would perhaps quote at a low figure in order to obtain entrance to a market from which he had been excluded. He regretted, of course, that coal contracts had been lost to this country, but he thought it would be quite a mistake to assume that they had been lost because of the shilling duty. Now with regard to the North-Eastern ports. The exports in 1899 were 15,100,000 tons; in 1900, 15,800,000 tons; 1901, 16,400,000 tons; and in 1902, 16,184,000 tons. An hon. Gentleman said that not only had the exports decreased but that the decrease was going on. What were the facts? He had with him the figures for the first three months of this year, and he would compare them with those for the first three months of 1901 and 1902. In 1901 the first quarter's export of coal from the United Kingdom amounted to 12,334,000 tons, in 1902 to 13,012,000 tons, and in 1903, when they were told the exports were still falling off, to 14,500,000 tons. Far from there being the smallest symptom of decrease in the exports of coal there was every indication that they were going on at an increased ratio. He would take the North-Eastern ports. The exports from the North-Eastern ports in 1901 were 3,400,000 tons; in 1902, 3,291,000 tons; and in the first three months of 1903, 3,891,000 tons. All these figures included bunker coal; so that whether they took the exports as a whole for the United Kingdom or the North-Eastern ports they both showed satisfactory increases and signs of prosperity in trade. It had been alleged that the number of people employed had diminished, but the figures he had given certainly did not bear out that contention. [An HON. MEMBER: But that is not export.] Where did it go if not abroad? Surely, the more export of coal there was free of duty, the better pleased the mine-owners were. It could make no difference to the miners whether their coal was exported in the hold of a ship or in the bunkers. The figures he had given seemed to show that there could be no foundation for the allegation that employment had diminished. In point of fact, the number of men employed in coal mines was larger than ever. In 1898, the number was 686,000; in 1899, it was 708,000; in 1900, it was 760,000; in 1901, it was 787,000; and in 1902, it was 805,000. This was no doubt accounted for by a considerable increase in the trade.

MR. JOHN WILSON (Durham, Mid.)

asked whether the increase had taken place in the districts affected by the coal tax or in the Midlands.

*MR. RITCHIE

said that he could not separate the districts; but he had given the figures for exports, and had shown that there had been a progressive increase, and at a greater ratio in the first three months of the present year than in any other year. If that were true, it was justifiable to assume that the increase in the numbers of men employed had taken place all round. It was perfectly true that wages had been reduced, but that was because prices had fallen. The abnormal prices of 1900 could not be expected to continue. The figures which he could give to the House as to wages had been prepared on a basis as to which there was some dispute; and, therefore, he would not insist on the actual figures; but their comparative value was unaffected. In 1898, the wages were 27s. 3d.; in 1899, 29s.; in 1900, 33s. 11d.; in 1901, 32s. 6d.; and 1902, 30s. 4d. Since 1900 there had been a considerable fall in wages owing to a great fall in prices, but wages were now considerably higher than they were in 1898 or 1899.

Some discussion had taken place upon the question as to who paid the tax. His hon. friend the Member for one of the divisions of Durham said the foreign consumer paid the tax. He was bound to admit that the figures seemed to show that the foreign consumer paid the tax. In 1898 the price per ton at the pit's mouth was 6s. 4d.; and the price for export coal was 9s. 9d. In 1899 the respective prices were 7s. 3d. and 10s. 1d. In 1900 they were 10s. 9d. and 16s. 6d., but this was, of course, a very exceptional year. Then the duty came into operation. In 1901 the respective prices were 9s. 4d. and 13s. 8d.; and in 1902 they were 8s. 2d. and 12s. 2d. It appeared, therefore, that the duty had been added to the export price; but it was not a matter that could be easily proved. Certainly, with regard to large quantities of coal sent from this country, in regard to which there was hardly any competition, the Welsh proprietor could make the exporter pay. As to an ad valorem duty being fairer, he thought that if this tax were to be permanent it might be well to consider whether some change should not be made to bring the duty more in relation to the value of the coal. But he had been warned by hon. Gentlemen opposite that in making such a proposal he should be entering upon an extremely thorny path. He did not contemplate making any proposal of the kind, but when he was appealed to to withdraw this tax, because it had been oppressive to trade and had diminished both exports and employment, he must say that he did not think the case had been made out. But there was at present a Commission sitting to inquire into the whole subject; and, at any rate, it was quite impossible in the present state of the finances to do what hon. Gentlemen wished to be done. No doubt they would prefer the reduction in indirect taxation which he had proposed, even to the abolition of the duty on coal. He had given facts and figures to show that the evils which they feared had not occurred. As to what might happen in the future, as the result of the Commission's Report, or of the effect upon the trade, he would say nothing. He should watch most carefully to see whether any of the evils which hon. Gentlemen expected were likely to arise; and if they did arise it must be a matter for consideration by any Government whether a tax which really carried with it those evils should be allowed to remain.

SIR EDWARD GREY (Northumberland, Berwick)

said they were all anxious that the Chancellor of the Exchequer should have a peaceful afternoon, and he had no intention of disturbing what had hitherto been the harmony of the proceedings. Indeed, the Chancellor of the Exchequer's speech would have given him no excuse to do so, even if he had desired, for he gathered from the right hon. Gentleman's concluding remarks that he had promised to retain an open mind upon this question, and that, whatever he might think about the present, he had, at all events, no settled convictions about the future. He did not know whether in the very difficult circumstances in which the right hon. Gentleman was placed at the present time they could expect from him a more favourable answer. After all, the best comment upon the figures the right hon. Gentleman had read to the Committee, some of which he admitted told with considerable force, was a remark of the noble Lord the Member for Greenwich, made before the figures were produced. It was that our experience had not yet been long enough to throw into relief the real effect of this tax. That being so, he uttered what he was sure was a sound principle in saying that in the case of a great commodity like coal, whose price varied considerably from time to time, there were so many causes affecting that price that the effect of a small duty might not be apparent for some time, but that, the other causes being variable, a fixed factor like this tax introduced into the determination of the price must sooner or later be felt, and that though it might not be felt in a period of comparative prosperity, it would be felt when there was a shrinkage of trade. He demurred a little to what the Chancellor of the Exchequer had said as to the possibility that the tax had had no effect in making the British exporters lose contracts. The right hon. Gentleman said that there were other ways of losing contracts. Of course, that was quite true. There were other ways of losing a race besides being handicapped, but everybody admitted that a handicap did prejudice competitors. The Chancellor of the Exchequer quoted figures to prove that the German output had fallen off. But there was a great collapse in German industries at the time our industries were very prosperous, and he assumed that that led to a diminished consumption of German coal in Germany. But he was told that the German exports of coal had actually increased, and the figures quoted by his hon. friend the Member for Morpeth as to the increase of German exports to Holland and Belgium at the time our exports fell off was a very unpleasant and significant sign.

*MR. RITCHIE

said the figures for the German exports of coal had been placed in his hands, and it was only fair to give them. In 1900 they were 18,000,000 tons; in 1901, 17,900,000 tons; and in 1902, 18,900,000 tons.

SIR EDWARD GREY

said that, to be quite fair to the right hon. Gentleman, in return he would make the admission that it was natural that if the German home demand fell off it should have led to an increase of German exports, but he still thought that the tax had something to do with the increase in the exports of German coal to Holland and Belgium. He regarded that as an unpleasant sign, because although our export figures might have been maintained, or even increased, we had had exceptional circumstances favouring us on which we could not continue to count, such as strikes in the United States and France. Undoubtedly those circumstances might have helped to disguise the effect which the tax would otherwise have had on our export trade. The Chancellor of the Exchequer said very fairly that the case against the tax had been presented with very great moderation in this debate. He, on the other hand, was struck by the moderation with which the tax was defended on the right hon. Gentleman's own side. The tone of the noble Lord the Member for Greenwich, who supported the tax, was very different from the tone with which it was not only supported but forced and pressed upon them by supporters of the Government when it was first introduced. He was surprised with the moderation with which the case had now been presented, when he remembered the manner in which the tax was originally imposed. It was felt by those of them who belonged to the part of the country especially affected, as an injury, but all manner of insult was added to the injury at the time the tax was put on. The Colonial Secretary said then that it must fall either on the coalowners or the foreigner, and he did not care which. If that remark had come from anyone but the Colonial Secretary he would have thought it about the most offensive and unpatriotic thing he had ever heard, but it came from the Colonial Secretary, and of course they knew that it was only his way. It was his habit to class everybody who differed from him as a foreigner. They had all in turn come under that category in one capacity or another, and he would discount it now because he saw that the turn of the Chancellor of the Exchequer himself to be classed as a foreigner was imminent.

He would admit that the pursuit of the incidence of a tax, though very fascinating, was not always very profitable, and he would admit also that in the case of a monopoly coal the consumer would pay the export tax. But in a case, as in the Belgium and Holland trade, in which we had no monopoly, it seemed to him very clear that such a tax as this must begin very soon to fall upon the coalowner and shipowner, and that ultimately it must settle upon the miner. In the exporting districts in the north-east of England they had been conscious of considerable injustice, because the tax was defended very strongly, and, no doubt, was popular when it was proposed, on account of the high price of coal at home, and it was recommended to the householder as one that could rightly be placed upon the coal trade, yet it was put on those particular miners who did not hew the coal which the householder found so dear. That really was one of the reasons why he would urge that the tax should be carefully watched, for it undoubtedly fell most unequally upon different districts. The very interesting question was raised by the hon. Member for Morpeth as to how far it was desirable to restrict or put a drag upon the consumption of coal in the interests of posterity. But the first coal the consumption of which they would wish to restrict would be the monopoly coal, which could not be replaced by any other coal for naval purposes. He thought he saw a strong case for that, but this tax would not gain that end, for the monopoly coal was just the very coal of which the export would continue unchecked under its operation. They were most grateful to the right hon. Gentleman for his promise to preserve an open mind, but he would be still more satisfied with that promise if he were quite sure that the right hon. Gentleman spoke for all his colleagues as well, because he was surrounded by colleagues with a very dangerous passion for taxes. Import taxes as well as export taxes were now becoming popular, and this desire for taxes was growing a very serious thing. If we were to tax what came in and what went out, the effect upon trade must be very serious. He thought this export tax would be felt more seriously in the future than it had been hitherto, and if that were so, it would act not merely on the coal trade, but as a diminution of our general trade. Our export of coal was but one-half of a branch of general trade, and the tax must act on freights and the shipping trade. As an export tax he regarded it as a particularly bad tax, and while he thanked the Chancellor of the Exchequer for the attention he had paid to the arguments put before him, he trusted that as time went on he would lend as ready an ear to those arguments as he had done to the arguments of the Opposition in other directions.

MR. GIBSON BOWLES (Lynn Regis)

called attention to the fact that during the debate the Chancellor of the Exchequer had been entirely alone on the Treasury Bench. He took that as showing that the financial proposals were entirely agreed to by the Cabinet. It had added to the interest of the debate that there had been no sudden disruption, and it had added also to the satisfaction of the House. There were two minor points on which he should like to make some brief remarks. He understood that the argument of the Chancellor of the Exchequer was based on statistics in which he placed implicit confidence. He should imagine that the statistics were not so much entitled to confidence. They were not Board of Trade statistics at all. The fact that they were Customs statistics seriously decreased his confidence in them. He had had considerable experience of official statistical Returns, and he confessed he had the greatest possible distrust of them. The Minister at the head of a great Department once said that when he wanted figures about anything he went to the officials and said he wanted figures on such and such a subject. The first thing the Department said was: "What do you want to prove?" He knew enough about statistics to be able to state that he could make the most contrary conclusions come out of the same figures, and he was quite sure that the officials in the various Departments could do so more easily than he could. The increase in exports to which the right hon. Gentleman had referred was largely due to bunker coal, on which there was practically a premium, for shipowners were induced to take larger quantities than they had ever done before.

One other part he wished to refer to—viz., the incidence of the tax. The hon. Member for Durham was certain about it, the hon. Baronet opposite was certain about it, everybody except himself was in fact certain about it, and what he wanted was a little information. He did not follow at all the right hon. Gentleman in his figures. The right hon. Gentleman said that his figures went to prove that the foreigner paid the duty; that in 1900 the price of coal at the pit's mouth was 10s. 9d. and the price for export was 16s. 6d. a difference of 5s. 9d. Then the duty came into operation and the price at the pit's mouth was 9s. 4d. and the export price 13s. 8d. or a difference of 4s. 4d. less than before the duty was put on. In the second year the price at the pit's mouth was 8s. 2d. and the export price 12s. 2d. or a difference of 4s. Now, how could that go to show that the foreigner paid the duty? He confessed that it was beyond him to understand it. This matter of the final incidence of the duty was no doubt a very serious one; whether it was always the consumer, or the producer who paid the duty he very much doubted. If time were given, and the duty allowed to remain on long enough, he believed that the doctrine of diffusion came in — that everyone concerned in the trade, the producer, the handler, the machinery, the shipper, the seaman,—everyone concerned in the production, the handling, and the financing of the stuff from its first production to its final consumption paid a portion of the duty. He was not as certain about his notion as other people were about their dogmas, but his notion was that if the tax was continued long enough there was a system of diffusion whereby everyone concerned paid a share.

*MR. RITCHIE

said that he ought to have excluded the year 1900, which they all acknowledged was a very exceptional year. In 1899 the difference between the price per ton at the pit's mouth and the export price was 2s. 10d. In 1901, when the tax was on, the difference was 4s. 4d., and there was left to the coalowner 3s. 4d., which was rather more than in 1899. In 1902 the difference was 3s. 11d., or, after deducting the 1s., 2s. 11d., almost exactly the same amount as in 1899.

MR. HARWOOD (Bolton)

said he wished to urge an objection to the repeal of the tax which had not yet been brought forward. There was another side to the question than that naturally presented by the hon. Members who all represented mining constituencies. It ought to be borne in mind when the export of coal was compared with that of cotton or woollen goods that coal was not a manufactured article. No one had made it, or could make it; and it was perfectly certain that every ton of coal taken out of the country diminished our stock. Coal was our most valuable national asset. He spoke as a land reformer who held very strong views about the claims of the nation to its land; and no Act of Parliament, no Charter, no deed or conveyance could deprive the nation of its rights in its minerals, to which it must always remain in some degree a claimant. The value of coal was not its intrinsic money value, but its potential value as the very basis of our industrial life. An hon. Member had spoken about the time which was coming when there would be some substitute for coal. That was all a dream, the baseless fabric of a vision. Then it was said, "Why not tax all the coal?" For this reason, no. The coal which the nation used the nation got the benefit of. But when coal was exported the nation got no benefit; it parted with a national asset. His reply, speaking as a member of the nation, and representing the nation, about coalowners' profits being diminished, was, "Why should my capital be diminished without my getting my fair share?" He would put this analogy. Suppose that the landlords of Lincolnshire sold their land to fill up the Zuyder Zee, would the nation permit that? The coalowners were making a profit by sending the coal out of the country, and he objected to that on the ground that they were taking away the country, taking away his assets. It had been said that this coal duty was the best way to prevent that; he maintained that it was the only way at present. An hon. Member had said that it was a poor kind of patriotism which was satisfied with a duty of 1s. a ton; but it was something; it was a recognition of an obligation that, as the ultimate owners of the land the nation was unwilling to part with its interest in its own coal. Too much had been heard about the coalowners; the main question was the welfare of the nation. The Chancellor of the Exchequer, with charm- ing amiability and all that sort of thing, seemed to say that he had no principle in regard to this matter. He offered the right hon. Gentleman one, and that was the claim of the nation. He protested, as a member of the nation, and speaking for the nation, against a national asset being sent out of the country without the rights of the nation receiving some recognition.

*SIR CHRISTOPHER FURNESS (Hartlepool)

said he wished to consider the matter from a purely business point of view. The Chancellor of the Exchequer had given them his own figures, and he thought those figures must have affected his mind on this particular point. Figures might be used both for and against an argument, and therefore he would not use many. The Chancellor of the Exchequer in his speech took the exports of the United Kingdom for 1902 as showing that this tax had not affected the export trade. He was glad that the Chancellor of the Exchequer also gave the exports from Germany, so that a fair comparison between the two countries might be made. It was quite true that the exports from the United Kingdom for 1902 did not show any diminution but a comparatively slight increase, whilst the German exports for the same period had increased by over 1,000,000 tons. He wished to state that the imposition of this tax had had a direct effect on wages, a direct effect on the production, and, what was most important, a direct effect on the enterprise of those engaged in the trade and commerce of this country, and he should endeavour to show that the imposition of the tax had also affected the export trade. Why was it that the exports for 1902 did not show any decrease in consequence of this tax? Take, for instance, one of his own works, where they consumed in 1901, in the making of steel, 11,000 tons of coal each week. What was the consumption in 1902 at the same works, consequent upon the falling off in foreign trade and the diminished demand for the steel produced at those works? Instead of 11,000 tons per week—involving between 500,000 and 600,000 tons of coal for the year — the consumption for 1902 was only one-half that amount. It naturally followed to inquire what became of the other half. By reason of those works being short of orders, as well as all the other works in the same position, some outlet must have been obtained for that coal, and the consequence was that the surplus production in the country had to be exported, and that accounted for the slight increase in the exports. To his mind it was too late in the day for those engaged from day to day in trade to argue and attempt to show that the placing of a tax on any article of export was not going to diminish the export of that article. He contended that the imposition of taxation on coal, which was, in point of bulk, the only article of export this country had left, directly affected that export. The imposition of as hilling tax had affected the export, as, in like manner, if they had given a bounty of 1s. per ton, it required no argument to show that, by reason of the bounty, the export of the bounty-fed article would have increased. He also contended that the tax had an evil effect on the enterprise of those who were anxious to embark their capital in the development of the trade and industry of the country.

It was said that one great reason for the proposed change in the fiscal policy of the oountry was the anxiety to find employment for workmen and to extend the manufactures. If that was the object he should like to give one effect of the tax as showing how it affected the enterprise of those engaged in trade. Northumberland had been referred to fully by hon. Members from that county, and in his experience there was one matter of business which had a direct bearing on the incidence of this tax. He was invited to become connected with a large company in Northumberland, which owned considerable coalfields in the county. The experts reported that there was practically an unlimited quantity of coal which only required development. The same company owned a harbour, which it was proposed to enlarge, to permit the loading of large steamers, a project which would have helped to very much extend the coal trade of Northumberland. He went into the matter and arranged for the whole of the capital necessary, not only for extending and deepening the harbour, but for the building of a number of steamers to carry the coal and the necessary capital for the development of the collieries. The moment the coal tax came into force, however, it was pointed out to him that the production of coal in Northumberland for export purposes was 83 per cent. of the total production, and the financiers and capitalists said: "How can you ask us to use our money in developing the trade when you are entirely dependent upon the export trade for customers abroad, and the Government have taxed your export trade from Northumberland?" He could not argue against that. That was the direct effect of the tax on those who were willing to embark money in encouraging the legitimate industries of the country, and it was a matter which he hoped would not be overlooked by the Chancellor of the Exchequer when he considered the serious consequences of this tax upon trade. He should like to point out the serious effect which the placing of a tax upon any article of export had upon the trade of the country, particularly an article like coal, which found employment for so many hundreds of steamers built in this country. He could trace the direct benefit of the coal industry in this country to the development of shipyards along the north-east coast, as well as the erection of steel works. The vast army of hundreds of thousands of men who were employed was directly traceable to the ever-increasing export of coal. He asserted that if it had not been for the coal tax their exports in 1902 and the first quarter of this year would have been considerably in excess of those figures quoted by the Chancellor of the Exchequer. With regard to the question of bunker coal, his firm, along with many others engaged as shipowners, had been in the habit of loading their steamers with a sufficient quantity of bunker coal to take them to their loading port or to the first coaling-station on the way. Since the tax had been imposed the shipowners had been enlarging the bunker space in the steamers, and had been taking on board sufficient coal for the entire voyage. That accounted for the increase in the export of coal, as shown by the returns of the exports, particularly on the north-east coast. Another reason for the enormous demand for export coal was the strike in America and the strike in France. He was not dealing with this matter from the point of view of one interested in coalfields, or from that of one engaged in trade, manufacture, and industry of the country, giving employment to between 30,000 and 40,000. He took a serious view of this new departure of taxing one section of an important industry. He made the statement from a business point of view. He had heard many foolish statements made in that House,

but never a more foolish one than when the late Chancellor of the Exchequer invited the House to place a tax on an article of export which had done so much for the development of the trades and industries of this country.

*MR. RITCHIE

said that after the long and interesting debate they had had, he would appeal to the Committee to come to a decision, as he was anxious to get the Bill through before the evening sitting, having in view the business then to be considered.

Question put.

The Committee divided:—Ayes, 135; Noes, 273. (Division List No. 128.)

AYES.
Abraham, William (Rhondda)	Grey, Rt. Hn. Sir E. (Berwick	Rigg, Richard
Allan, Sir William (Gateshead)	Griffith, Ellis J.	Roberts, John H. (Denbighs.)
Allen, Chas. P. (Glos., Stroud)	Haldane, Rt. Hon. Richard B.	Robson, William Snowdon
Asher, Alexander	Hardie, J. Keir (Merthyr Tyd	Roe, Sir Thomas
Ashton, Thomas Gair	Harmsworth, R. Leicester	Rose, Charles Day
Asquith, Rt. Hon. Herbt. Hy.	Hayne, Rt. Hon. Chas. Seale-	Runciman, Walter
Austin, Sir John	Hayter, Rt. Hon. Sir Arthur D.	Samuel, Herbert L. (Cleveland)
Barlow, John Emmott	Helme, Norval Watson	Schwann, Charles E.
Barran, Rowland Hirst	Hemphill, Rt. Hon. Charles H.	Shaw, Charles E. (Stafford)
Bayley, Thomas (Derbyshire)	Hobhouse, C. E. H. (Bristol, E.)	Shaw, Thomas (Hawick, B.)
Beaumont, Wentworth C. B.	Holland, Sir William Henry	Shipman, Dr. John G.
Black, Alexander William	Hope, John Deans (Fife, West)	Sinclair, John (Forfarshire)
Bolton, Thomas Dolling	Humphreys-Owen, Arthur C.	Smith, H. C. (North'mb, Tyneside
Brand, Hon. Arthur G.	Hutchinson, Dr. Charles Fredk.	Soames, Arthur Wellesley
Brigg, John	Hutton, Alfred E. (Morley)	Stevenson, Francis S.
Broadhurst, Henry	Jacoby, James Alfred	Strachey, Sir Edward
Brown, George M. (Edinburgh)	Joicey, Sir James	Taylor, Theo. C. (Radcliffe)
Brunner, Sir John Tomlinson	Jones, David B. (Swansea)	Tennant, Harold John
Bryce, Right Hon. James	Jones, William (Carnarv'nshire	Thomas, A. (Carmarthen, E.)
Buchanan, Thomas Ryburn	Kearley, Hudson E.	Thomas, Sir A. (Glam., E.
Burt, Thomas	Kitson, Sir James	Thomas, David Alfred (Merthyr
Buxton, Sydney Charles	Labouchere, Henry	Thomas, F. Freeman (Hastings)
Caldwell, James	Lambert, George	Thomson, F. W. (York, W. R.)
Cameron, Robert	Lambton, Hon. Fredk. Wm.	Tomkinson, James
Causton, Richard Knight	Langley, Batty	Trevelyan, Charles Philips
Channing, Francis Allston	Layland Barratt, Francis	Ure, Alexander
Craig, Robert Hunter (Lanark)	Levy, Maurice	Wallace, Robert
Crombie, John William	Lewis, John Herbert	Walton, J. Lawson (Leeds, S.)
Crooks, William	Logan, John William	Warner, Thomas Courtenay T.
Davies, M. Vaughan (Cardig'n	M'Arthur, William (Cornwall)	Wason, Eugene (Clackmannan)
Dewar, John A. (Inverness-sh.)	M'Crae, George	Wason, J. Cathcart (Orkney)
Dilke, Rt. Hon. Sir Charles	M'Kenna, Reginald	White, George (Norfolk)
Douglas, Charles M. (Lanark)	M'Killop, Jas. (Stirlingshire)	White, Luke (York, E. R.)
Duncan, J. Hastings	M'Laren, Sir Charles Benj.	Whiteley, G. (York, W. R.)
Dunn, Sir William	Mansfield, Horace Rendall	Whitley, J. H. (Halifax)
Edwards, Frank	Markham, Arthur Basil	Wilson, Chas. H. (Hull, W.)
Ellis, John Edward	Morgan, J. Lloyd (Carmarthen)	Wilson, F. W. (Norfolk, Mid)
Emmott, Alfred	Nussey, Thomas Willans	Wilson, John (Durham, Mid)
Farquharson, Dr. Robert	Palmer, Sir C. M. (Durham)	Wrightson, Sir Thomas
Ferguson, R. C. Munro (Leith	Partington, Oswald	Wyndham-Quin, Major W. H.
Fitzmaurice, Lord Edmond	Paulton, James Mellor	Yoxall, James Henry
Foster, Sir Walter (Derby Co.	Pease, J. A. (Saffron Walden)
Fuller, J. M. F.	Philipps, John Wynford	TELLERS FOR THE AYES—
Furness, Sir Christopher	Plummer, Walter R.	Mr. Joseph Walton and.
Gladstone, Rt. Hn. Herbert J.	Price, Robert John	Mr. Fenwick.
Goddard, Daniel Ford	Rea, Russell
Grant, Corrie	Reid, Sir R. Threshie (Dumfries
NOES.
Agg-Gardner, James Tynte	Duffy, William J.	Jordan, Jeremiah
Agnew, Sir Andrew Noel	Duke, Henry Edward	Kennaway, Rt. Hon. Sir J. H.
Allhusen, Aug. Henry Eden	Durning-Lawrence, Sir Edwin	Kennedy, Patrick James
Anson, Sir William Reynell	Dyke, Rt. Hon. Sir Wm. Hart	Kenyon-Slaney, Col. W. (Salop
Arkwright, John Stanhope	Egerton, Hon. A. de Tatton	Laurie, Lieut.-General
Arnold-Forster, Hugh O.	Faber, Edmund B. (Hants, W.)	Law, Andrew Bonar (Glasgow
Arrol, Sir William	Faber, George Denison (York)	Lawrence, Sir Jos. (Monm'th)
Atkinson, Right Hon. John	Fellowes, Hon. Ailwyn Edward	Lawrence, Wm. F. (Liverpool
Aubrey-Fletcher, Rt. Hn. Sir H.	Fergusson, Rt. Hn. Sir J. (Man'r	Lawson, John Grant (Yorks, N. R.
Bagot, Capt. Josceline FitzRoy	Ffreneh, Peter	Lee, A. H. (Hants., Fareham)
Bailey, James (Walworth)	Finch, Rt. Hon. George H.	Lees, Sir Elliott (Birkenhead)
Bain, Colonel James Robert	Fisher, William Hayes	Llewellyn, Evan Henry
Balcarres, Lord	FitzGerald, Sir Robt. Penrose	Loder, Gerald Walter Erskine
Baldwin, Alfred	Fitzroy, Hon. Edw. Algernon	Long, Col. Chas. W. (Evesham
Balfour, Rt. Hn. A. J. (Man'r	Flannery, Sir Fortescue	Long, Rt. Hn. Walter (Bristol, S.)
Balfour, Capt. C. B. (Hornsey	Flower, Ernest	Loyd, Archie Kirkman
Balfour, Kenneth R. (Christch	Forster, Henry William	Lucas, Col. Francis (Lowestoft
Banbury, Sir Frederick George	Foster, P. S. (Warwick, S. W.	Lucas, Reginald J. (Portsmouth
Bartley, Sir George C. T.	Fyler, John Arthur	Lundon, W.
Bentinck, Lord Henry C.	Galloway, William Johnson	Lyttelton, Hon. Alfred
Bhownaggree, Sir M. M.	Gardner, Ernest	Macdona, John Cumming
Bignold, Arthur	Garfit, William	Maconochie, A. W.
Bigwood, James	Gibbs, Hn. A. G. H. (City of Lond	M'Calmont, Colonel James
Bill, Charles	Godson, Sir Augustus Fredk.	Malcolm, Ian
Boland, John	Gordon, Hn. J. E. (Elgin & Nrn	Manners, Lord Cecil
Bond, Edward	Gordon, J. (Londonderry, S.)	Martin, Richard Biddulph
Bowles, T. G. (Lynn Regis)	Gordon, Maj Evans (T'r Haml'ts	Maxwell, W. J. H. (Dumfriessh.
Brassey, Albert	Gore, Hn. G. R. C. Ormsby (Salop	Middlemore, Jn. Throgmorton
Brodrick, Rt. Hon. St. John	Gore, Hn. S. F. Ormsby- (Linc	Mitchell, Edw (Fermanagh, N.)
Brotherton, Edward Allen	Gorst, Rt. Hon. Sir J. Eldon	Mitchell, William (Burnley)
Brymer, William Ernest	Goschen, Hon. Geo. Joachim	Montagu, G. (Huntingdon)
Butcher, John George	Goulding, Edward Alfred	More, Robt. Jasper (Shropshire
Campbell, Rt. Hn. J. A. (Glasg.)	Graham, Henry Robert	Morgan, Hn. F. (Monm'thsh.)
Campbell, J. H. M. (Dublin, Univ	Gray, Ernest (West Ham)	Morrell, George Herbert
Campbell, John (Armagh, S.)	Greene, Sir E. W. (Bury St. Ed.	Morrison, James Archibald
Carson, Rt. Hon. Sir Edw. H.	Greene, W. Raymond (Cambs	Morton, Arthur H. Aylmer
Cautley, Henry Strother	Grenfell, William Henry	Mount, William Arthur
Cavendish, R. F. (N. Lancs.)	Greville, Hon. Ronald	Mowbray, Sir Robert Gray C.
Cavendish, V. C. W. (Derbyshire	Groves, James Grimble	Muntz, Sir Philip A.
Cayzer, Sir Charles William	Guest, Hon. Ivor Churchill	Murray, Rt. Hn. A. Graham (Bute
Cecil, Evelyn (Aston Manor)	Gurdon, Sir W. Brampton	Murray, Charles J. (Coventry)
Cecil, Lord Hugh (Greenwich)	Hain, Edward	Murray, Col. Wyndham (Bath
Chamberlain, Rt. Hon. J. (Birm	Hall, Edward Marshall	Myers, William Henry
Chamberlain, Rt. Hn. J. A. (Worc	Hamilton, Rt. Hn. Ld. G. (Midx	Nicholson, William Graham
Chamberlayne, T. (South'mpt'n	Hamilton, Marq. of (Londondy	O'Brien, P. J. (Tipperary, N.)
Charrington, Spencer	Hardy, Laurence (Kent, Ashf'd	Orr-Ewing, Charles Lindsay
Clive, Captain Percy A.	Hare, Thomas Leigh	Palmer, Walter (Salisbury)
Cochrane, Hon. Thos. H. A. E.	Harwood, George	Peel, Hn. Wm. R. Wellesley
Coghill, Douglas Harry	Haslam, Sir Alfred S.	Pemberton, John S. G.
Cohen, Benjamin Louis	Haslett, Sir James Horner	Percy, Earl
Collings, Right Hon. Jesse	Hatch, Ernest Frederick G.	Pierpoint, Robert
Colomb, Sir John Chas. Ready	Hay, Hon. Claude George	Platt-Higgins, Frederick
Colston, Chas. Edw H. Athole	Hayden, John Patrick	Powell, Sir Francis Sharp
Corbett, T. L. (Down, North)	Heath, Arthur H. (Hanley)	Pretyman, Ernest George
Cox, Irwin Edwd. Bainbridge	Heath, James (Staffords N. W.)	Pryce-Jones, Lt.-Col. Edward
Craig, Charles Curtis (Antrim, S.	Henderson, Sir Alexander	Purvis, Robert
Cripps, Charles Alfred	Hermon-Hodge, Sir Robert T.	Rankin, Sir James
Cross, Alexander (Glasgow)	Hickman, Sir Alfred	Rattigan, Sir William Henry
Cross, H. Shepherd (Bolton)	Hoare, Sir Samuel	Redmond, Jn. E. (Waterford)
Crossley, Sir Savile	Hobhouse, Rt. Hn. H. (Somrst E.	Reid, James (Greenock)
Cust, Henry John C.	Hogg, Lindsay	Remnant, Jas. Farquharson
Dalkeith, Earl of	Hope, J. F. (Sheff., B'tside)	Renshaw, Sir Charles Bine
Dalrymple, Sir Charles	Hornby, Sir William Henry	Ridley, Hn. M. W. (Stalybridge
Delany, William	Houldsworth, Sir Wm. Henry	Ridley, S. F. (Bethnal Green)
Dewar, Sir T. R. (Tr. Haml'ts	Hoult, Joseph	Ritchie, Rt. Hn. C. Thomson
Dickson, Charles Scott	Houston, Robert Paterson	Roberts, Samuel (Sheffield)
Dickson-Poynder, Sir John P.	Howard, Jn. (Kent, Faver'h'm	Robertson, H. (Hackney)
Digby, John K. D. Wingfield-	Howard, J. (Midd., Tott'ham	Robinson, Brooke
Dimsdale, Rt. Hon. Sir Jos. C.	Hudson, George Bickersteth	Rolleston, Sir John F. L.
Dixon-Hartland, Sir F. Dixon	Hutton, John (Yorks, N. R.)	Ropner, Colonel Sir Robert
Douglas, Rt. Hon. A. Akers	Jebb, Sir Richard Claverhouse	Rothschild, Hon. Lionel Walter
Doughty, George	Jessel, Capt. Herbert Merton	Round, Rt. Hon. James
Doxford, Sir Wm. Theodore	Johnstone, Heywood	Russell, T. W.

Rutherford, John (Lancashire)	Stewart, Sir M. J. M'Taggart	Whiteley, H. (Ashton-und-Lyne
Sackville, Col. S. G. Stopford	Stock, James Henry	Whitmore, Charles Algernon
Sadler, Col. Samuel Alexander	Stroyan, John	Willoughby de Eresby, Lord
Samuel, Harry S. (Limehouse)	Strutt, Hon. Charles Hedley	Willox, Sir John Archibald
Sassoon, Sir Edward Albert	Sturt, Hn. Humphrey Napier	Wilson, John (Glasgow)
Seely, Chas. Hilton (Lincoln)	Talbot, Lord E. (Chichester)	Wilson-Todd, W. H. (Yorks.)
Seely, Maj. J. E. B. (Isle of Wight	Tallbot, Rt. Hn. J. G. (Oxf'd Univ	Wodehouse, Rt. Hn. E. R. (Bath)
Seton-Karr, Sir Henry	Taylor, Austin (East Toxteth)	Wolff Gustav Wilhelm
Sharpe, William Edward T.	Thorburn, Sir Walter	Wortley, Rt. Hn. C. B. Stuart
Shaw-Stewart, M. H. (Renfrew)	Thornton, Percy M.	Wylie, Alexander
Sheehan, Daniel Daniel	Tomlinson, Sir Wm. E. M.	Wyndham, Rt. Hon. George
Simeon, Sir Barrington	Tritton, Charles Ernest	Yerburgh, Robt. Armstrong
Sinclair, Louis (Romford)	Tufnell, Lieut.-Col. Edward	Young, Samuel
Sloan Thomas Henry	Valentia, Viscount	Younger, William
Smith, Abel H. (Hertford, E.)	Vincent, Col. Sir C. E. H. (Sheffield
Smith, Jas. Parker (Lanarks.)	Walrond, Rt. Hon. Sir W. H.	TELLERS FOR THE NOES—
Smith, Hon. W. F. D. (Strand	Warde, Colonel C. E.	Sir Alexander Acland-
Spear, John Ward	Webb, Col. William George	Hood and Mr. Anstruther.
Stanley, Edw. Jas. (Somerset)	Welby, Lt.-Col. A. C. E. (Taunton
Stanley, Lord (Lancs.)	Wharton, Rt. Hon. J. Lloyd

MR. CHANNING (Northamptonshire, E.)

said he would not move his Amendment.

MR. JOSEPH WALTON

said the necessity for a change in the law in the direction of the Amendment he now proposed to move was brought to his notice by an instance to which he would briefly refer. A man assigned before marriage to the woman he was about to wed two life policies in consideration of marriage. The two policies were assigned absolutely, the whole beneficial interest being conveyed to the assignee. Shortly after the assignment was completed the marriage took place and from her marriage day the wife was the possessor of those policies and was at liberty to dispose of them in any way she thought best. There was no covenant as to the payment of future policies in the assignment, but unfortunately, the husband, instead of handing the money to the wife to pay the premiums year by year to the assurance company, paid the premiums himself direct, and on his death, although he had no interest whatever in the policies, the Somerset House authorities put in a claim and recovered £400 death duties on the £10,000 covered by the policies in respect to which the deceased man had no interest whatever. A more glaring robbery of the widows and orphans on the part of the State could not possibly be found. He had been told that if this clause was introduced in this Bill it would introduce a new principle, but if the principle of equity and justice was a new principle the sooner it was introduced in the finance Bill the better. The clause he proposed was strictly limited in its application. It merely provided that where any irrevocable assignments had been made before marriage the sums receivable under such assignments should not become liable to estate duty. He was quite aware that the consideration of marriage might not, in the eye of some persons, be a valuable consideration, though they were told in "the Book" of a good woman that "her price is above rubies." He begged to move.

New Clause (Exemption from estate duty of policies of life assurance assigned in consideration of marriage): The bonâ fide purchase referred to in Section 3 of the Finance Act, 1894, shall include every case of an assignment in consideration of marriage by either party to the marriage for the benefit of all or any of the parties or offspring of the marriage of any policy of insurance on the life of a party to the marriage, and the sums receivable under such policy shall not become liable to either estate duty by reason only of the manner in which, or person by whom, the policy is kept up."—(Mr. Joseph Walton.)

Brought up, and read the first time.

Motion made, and Question proposed, "That the clause be read a second time."

*MR. RITCHIE

said the hon. Gentleman proposed to make an alteration in the law because of some particular case. He had always been of opinion that legislation under such conditions was extremely dangerous. The hon. Gentleman said in this particular case the policy was assigned, and while the individual was alive he continued to pay the premiums. If he had not continued to pay the premiums no estate duty would have been claimed when he died, but inasmuch as he had chosen to pay the premiums the money fell in at his death.

*MR. JOSEPH WALTON

It was a gift to the wife.

*MR. RITCHIE

said it was not a gift because if the premiums had not continued to be paid no money would have been left. A change of this kind in the law could not be confined to marriage settlements, but would have to be applied to all other settlements where policies of assurance were concerned, but, in any case, he pointed out that if the law was to be amended, if it was desirable that the law should be amended, and a good case was made out for the amendment of the law in general, with regard to this matter it would be better dealt with in another way. He hoped in the course of the session to bring forward an omnibus Bill connected with matters of finance, and if he did the hon. Member would be in a better position to propose an Amendment of this nature. This Bill was a Bill to carry out the financial proposals of the Government as explained in the Budget, and he would deprecate enlarging it in the manner proposed.

MR. GIBSON BOWLES

said he could not for a moment support the Amendment of the hon. Gentleman, and he would remind him that one of the salient principles of the estate duties of 1894 was that marriage had ceased to be a valuable consideration. He rose mainly to point out to the right hon. Gentleman that he was slightly in error in stating that this was not the proper place to introduce such a clause. This was the only place. The right hon. Gentleman's predecessor introduced six Amendments to the Finance Act of 1896, raising the estate duties of the Act of 1894. He knew that perfectly well because he introduced five of them himself.

*MR. RITCHIE

What I said was that this Bill was confined by the Government to carrying out the proposals of the Budget.

MR. GIBSON BOWLES

said the right hon. Gentleman knew perfectly well that when once introduced, the Finance Bill raised every question in the country, and that any Amendment could be introduced. That right had been taken advantage of. He thought the right hon. Gentleman was under a misapprehension.

*MR. RITCHIE

I did not mean that at all.

MR. GIBSON BOWLES

said he was glad to hear that statement. He merely rose to point out that fact. He hoped the hon. Gentleman opposite would not now press his Amendment.

MR. JOSEPH WALTON

said that in view of the promise made by the right hon. Gentleman to consider this matter he would not press his Motion. Although he claimed the right to take a division, he was now disposed to clear the way for the Employment of Children Bill by withdrawing this clause. But they had gained the distinct advantage by this discussion that they had obtained the definite statement from the right hon. Gentleman that if the husband had handed the money over to the wife to pay the premiums she would have avoided estate duty. Under those circumstances nobody would have supposed the Government would have taken advantage of what was purely an error of judgment in not doing so.

*MR. RITCHIE

said he did not say that the handing of the money by the husband to the wife to pay the premiums would take the matter out of the category of taxation. What he said was that if the wife paid the premiums it would do so. If there was any collusion between husband and wife he was not sure what the effect would be.

Clause, by leave, withdrawn.

Bill reported without Amendment; to read the third time to-morrow.