Commons Sitting of 18 April 1907

Preamble
The House met at a quarter before Three of the Clock.
PRIVATE BILL BUSINESS.

  PRIVATE BILLS (PETITIONS FOR ADDITIONAL PROVISION) (STANDING ORDERS NOT COMPLIED WITH).
  Mr. SPEAKERlaid upon the Table Report from one of the Examiners of
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  Petitions for Private Bills, That, in the case of the Petition for additional provision in the following Bill, the Standing Orders have not been complied with, viz.:—Great Central Railway Bill.
  Ordered, That the Report be referred to the Select Committee on Standing Orders.
  Richmond (Surrey) Electricity Supply Bill.—Read the third time, and passed.
  Local Government Provisional Orders (No. 3) Bill.—Reported, without Amendment [Provisional Orders confirmed]; Report to lie upon the Table.
  Bill to be read the third time To-morrow.
  Boston Spa Gas Bill; Shanklin Gas Bill; Grays and Tilbury Gas Bill.— Reported, with Amendments; Reports to lie upon the Table, and to be printed.
  North East London Railway Bill.— Reported, with Amendments [Title amended]; Report to lie upon the Table, and to be printed.
  South Eastern and London, Chatham, and Dover Railways Bill.—Reported, with Amendments [Title amended]; Report to lie upon the Table, and to be printed.
  West Riding Tramways Bill [Lords].—Reported, without Amendment; Report to lie upon the Table, and to be printed.
  Medway Lower Navigation Bill [Lords].—Reported, without Amendment; Report to lie upon the Table.
  Bill to be read the third time.
  Royal Insurance Company Bill [Lords].—Reported, without Amendment; Report to lie upon the Table.
  Bill to be read the third time.
  Port Talbot Railway and Docks Bill.—Reported with Amendments [Title amended]; Report to lie upon the Table, and to be printed.
  North Eastern and Lancashire and Yorkshire Railways Bill. — Reported

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  [Parties do not proceed]; Report to lie upon the Table, and to be printed.

  RAILWAY BILLS (GROUP 5).
  Sir LEWIS M'IVERreported from the Committee on Group 5 of Railway Bills; That, for the convenience of parties, the Committee had adjourned till Tuesday next, at Eleven of the clock.
  Report to lie upon the Table.

PETITIONS.
  COAL MINES (EIGHT HOURS) BILL.
  Petitions in favour: From Chorley; and Mountain Ash; to lie upon the Table.
  EDUCATION (SCOTLAND) BILL.
  Petition of the United Free Church of Scotland, for alteration; to lie upon the Table.
  FACTORY AND WORKSHOP ACT (1901) AMENDMENT BILL.
  Petition from Paisley, in favour; to lie upon the Table.
  GROCERS' LICENCES (SCOTLAND) BILL.
  Petitions against: From Aberdeen; Dumfries; Edinburgh; Inverness; Kelso; and, Kirkcaldy; to lie upon the Table.
  LIQUOR TRAFFIC (LOCAL OPTION) (SCOTLAND) BILL.
  Petitions against: From Aberdeenshire; Crief; Dunoon; Hamilton; Kelso; Kilmarnock; Kirkcaldy; and Peterhead; to lie upon the Table.
  LIQUOR TRAFFIC (LOCAL OPTION) (SCOTLAND) BILL.
  Petitions in favour: From Aberdeen (three); Annan; Bathgate; Birsay; Buckie; Dundee; Eaglesfield; Ellon; Glasgow (two); Greenock (three); Inverness; Kingussie; Lesmahagow; Melrose; Mother well; Paisley (two); Perth; Petercoulter; Stonehaven; Stromness; and, Torry; to lie upon the Table.
  PROBATION OF OFFENDERS (No. 2) BILL.
  Petition from Paisley, in favour; to lie upon the Table.
  PUBLIC LIBRARIES BILL.
  Petition from Paisley, in favour; to lie upon the Table.
  RIGHTS OF WAY (SCOTLAND) BILL.
  Petition from Paisley, in favour; to lie upon the Table.
  SALE OF INTOXICATING LIQUORS ON SUNDAY.
  Petitions for prohibition: from Bournemouth; and, Hinckley; to lie upon the Table.
  SCHOOL BOARDS CONFERENCE (SCOTLAND) BILL.
  Petition from Paisley, against; to lie upon the Table.
RETURNS, REPORTS, ETC.
  EDUCATION (SCOTLAND).
  Copy presented, of Memorandum on the teaching of arithmetic in primary schools [by Command]; to lie upon the Table.
  LOCAL GOVERNMENT BOARD (IRELAND).
  Copy presented, of Order with respect to the Urban County District of Cooks-town [by Act]; to lie upon the Table.
  JAMAICA.
  Copy presented, of correspondence relating to the resignation by Sir A. Swettenham of his office as Governor of Jamaica [by Command]; to lie upon the Table.

  FINANCIAL STATEMENT (1907–8).
  Copy ordered, "of Statement of Revenue and Expenditure as laid before the House by the Chancellor of the Exchequer when opening the Budget."—(Mr. Runciman.)
  Copy presented accordingly; to lie upon the Table, and to be printed. [No. 115.]

  EAST INDIA (EXCISE COMMITTEE).
  Address for "Return of Orders of the Government of India on Chapters II. and IX. of the Report of the Excise Committee, 1905–6."—(Mr. Herbert Roberts.)
  SANITARY OFFICERS IN RURAL DISTRICTS.
  Return ordered, "of the Medical Officers of Health and Inspectors of Nuisances in the Rural Districts of each county in England and Wales, showing the area and population of each district, and, as regards each officer, the amount of his remuneration, whether repayment is made in respect of it by the county council, and whether he holds any other appointment or carries on any other occupation."—(Sir John Dickson-Poynder.)
  INTER-IMPERIAL TRADE.
  Return ordered, "showing, for the last year for which figures are available:—(a) the value of all articles imported into the United Kingdom from Canada, Australia, New Zealand, and British South Africa, respectively (i.) free of duty; (ii.) subject to duty; (b) the value of all articles imported into Canada, Australia, New Zealand, and British South Africa, respectively, from the United Kingdom (i.) free of duty; (ii.) subject to duty."—(Mr. Harold Cox.)
  NATIONAL PHYSICAL LABORATORY.
  Accounts ordered, "of Receipts and Expenditure, with Balance Sheet, for each year 1900 to 1906."—(Mr. Runciman.)
QUETIONS AND ANSWERS CIRCULATED WITH THE VOTES.

  Postmen's Promotion.
  MR. JAMES O'CONNOR: To ask the Postmaster-General what is the system under which the seniority of the postmen for promotion is calculated; whether by date of Civil Service appointment or by other means; whether there is a general system all over the United Kingdom; whether it differs in any respect from the systems employed regarding sorters and sorting clerks; and, if so, what are the reasons for this different treatment.
  (Answered by Mr. Sydney Buxton.) Postmen rank as a rule according to date of appointment, though exceptions are made in cases where this practice would discount considerable unestab-
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  lished service. As regards the other classes mentioned by the hon. Member, which are recruited by competition, in the case of persons entering by the same examination the place taken in the examination normally determines the seniority. The system in each case is uniform throughout the United Kingdom.

  Dublin Assistant Postmen.
  MR. JAMES O'CONNOR: To ask the Postmaster-General whether he is aware that there are in Dublin sixty-six assistant postmen who were formerly ex-telegraph messengers, and that despite a recent revision there are still thirty-four of them with from two to more than four years service as assistant postmen for whom there does not appear to be any immediate chance of full-time appointments; and whether, in accordance with the promise made by a previous Postmaster-General, he will take steps immediately to find full-time established appointments for these men.
  (Answered by Mr. Sydney Buxton.) The position of the ex-messenger assistant postmen at Dublin received my attention when the revision proposals referred to by the hon. Member were being considered, and, although the largest possible number of established appointments was granted, I regret that it is not at present possible to provide all those who have considerable length of service with full-time established appointments. The promise made by one of my predecessors was not as stated in the Question. It was to the effect that he would endeavour to reduce the force of assistant postmen as opportunity occurred, to such a number as would make it possible, as a general rule, for the members of that class to obtain promotion to the class of established postmen after not more than three years' -service as assistant postman, and in the case of ex-telegraph messengers, as far as practicable, by the time they attained the age of twenty. In pursuance of this promise the force of assistant postmen at Dublin has been reduced from eighty-six to forty-six under the recent revision.

  Sligo Land Appeals.
  MR. FETHERSTONHAUGH: To ask the Chief Secretary

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  to the Lord-Lieutenant of Ireland if he is aware that out of a list of 265 Land Commission Court appeals listed to be heard by Mr. Justice Dodd at Sligo, on 18th March, 1907, and following days, it turned out that thirty-two appeals only required a hearing, the rest having been withdrawn or settled as the result of land purchase; will he say if these 265 appeals were a portion of the number of appeals pending to dispose of which Mr. Justice Dodd was appointed; and is he aware that of the appeals at present recorded as pending a very large proportion are in reference to holdings already sold to tenants and will never require to be heard.
  (Answered by Mr. Birrell.) I am informed by the Land Commission that the preliminary list for hearing at Sligo on 19th March and following days contained 265 appeals, of which sixty-four were excluded by the Judicial Commissioners from the final list. The remainder, 201, was the most that the Commissioners considered could be disposed of on the occasion. Between the dates of issuing of the final list and the date of the sitting fifty-six appeals were withdrawn by the parties, leaving 145 for hearing by the Court. Of this latter number thirty-two went to hearing, the remainder having either been, settled in Court or withdrawn by the parties because purchase negotiations were pending or for other reasons. The 265 appeals referred to were included in the Return of appeals outstanding on 31st January last, subsequent to which date Mr. Justice Dodd was nominated as an additional Judicial Commissioner for the purpose of hearing such appeals. The Land Commissioners do not think that any general deduction can be drawn from what happened on this occasion. They cannot say how many of the pending appeals may ultimately be withdrawn by reason of purchase proceedings. In many such cases the fact that purchase negotiations are pending and that the appeals will not be proceeded with is not brought to the Commissioners' knowledge until the very eve of the hearing. This was specially the case in regard to the Sligo appeals.

  Irish Urban Rating Law
  MR. CHARLES CRAIG: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether a deputation representing some sixteen urban district councils from the North of Ireland recently waited on the Local Government Board for Ireland for the purpose of pointing out the serious defects in the present rating law in urban districts; and, if so, is it the intention of the Government to introduce legislation this session to amend the defects complained of.
  (Answered by Mr. Birrell.) The reply to the former part of the Question is in the affirmative. The question of introducing legislation, with the object of facilitating the collection of rates and removing certain difficulties, to which the deputation called attention, is under the consideration of the Government, but I do not think it will be possible to introduce a Bill this session.

  Belfast Post Office Telegraph Department.
  MR. SLOAN: To ask the Postmaster-General how many members of the telegraph messenger staff are permanently employed on indoor duties in the telegraph department of the Belfast post office, and what is their respective rate of weekly pay; whether in rotation they are called upon to perform a duty of eight hours on one Sunday in every four without remuneration, and, if so, upon what grounds, and how many are invariably employed on duty each Sunday; and whether the members of the indoor telegraph messenger staff are the only individuals in the employment of the Post Office who are obliged to discharge Sunday duty without remuneration; and can he state the principle upon which they are thus so exceptionally treated as compared with other members of the service.
  (Answered by Mr. Sydney Buxton.) Nine telegraph messengers are permanently employed on indoor duties in the telegraph department at Belfast, they are on scale wages, 8s. by 1s. to 10s. a week. In rotation, two of them are called upon to perform about seven and a half hours

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  duty, once every fourth Sunday, on an average. The pay for telegraph messengers, both indoor and outdoor, is based upon a weekly attendance, covering the whole seven days. There are other classes of post office servants whose weekly wages include payment for regular duty on Sundays.

  West Indian Mail Subsidies.
  MR. HAROLD COX: To ask the Postmaster-General what are the steamship subsidies paid for the conveyance of mails from this country to Jamaica and other West Indian Islands; and what is the annual sum received for postage in each case.
  (Answered by Mr. Sydney Buxton.) The only subsidy at present paid for the conveyance of mails from this country to the West Indies is† that received by Messrs. Elder, Dempster, and Company, under a contract with the Crown Agents for the Colonies, which provides for a service to and from Jamaica for commercial as well as postal purposes. The postage on mails sent from this country by this service may be estimated at about £4,000 a year.

  Cavan Postal Arrangements.
  MR. VINCENT KENNEDY: To ask the Postmaster-General if he will have a letter-box erected at Owengallis cross roads on the route from Bawnboy post office to Drumtober national school, in county Cavan; and, in view of the fact that this letter-box would be a convenience in the district, will he give the matter first consideration.
  (Answered by Mr. Sidney Buxton.) I have called for a Report on this subject, and on its receipt I will send the hon. Member a reply.

  Antrim Postal Arrangements.
  MR. CHARLES CRAIG: To ask the Postmaster-General whether he is aware that the change recently effected in the delivery of letters in the Grange Corner postal area, county Antrim, has resulted in the letters addressed to certain houses in the area being delivered later instead of earlier than before; and whether he
  † £40,000 per annum.
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  will consider the practicability and advisability of having the Grange Corner mail delivered at that post office from Randalstown instead of from Toome Bridge.
  (Answered by Mr. Sydney Buxton.) I have called for a Report on this point, and will send the hon. Member a reply.

  Indian Railway Inquiry.
  MR. ANNAN BRYCE: To ask the Secretary of State for India whether, in view of the urgency and importance of the Indian railway question, he is now in a position to say when the departmental inquiry alluded to in his reply to the deputation of 12th March will be instituted; what its scope will be; and what will be the constitution of the body to which it will be entrusted.
  (Answered by Mr. Secretary Morley.)The committee of inquiry will begin work very shortly, It will be directed to inquire into and make recommendations upon the sufficiency of the amounts allotted in recent years for railway construction and equipment in India; the method of raising and applying further amounts, if such arc found desirable; and the system under which the Railway Board now works. The Committee will consist of Sir James Mackay, Chairman, Sir Felix Schuster, and Mr. Abrahams representing the India Office, and Sir David Barbour and Sir Walter Lawrence representing the Indian railway companies.

  Castletown Bere Estate
  MR. GILHOOLY: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is aware that Mr. Leigh White entered into negotiations for purchase with the tenants of his Castletown Bere estate, and, prior to doing so, he served a number of civil bill ejectments, some of which were for only one year's rent; and seeing that the tenants offered to leave the purchase price to the decision of the Estates Commissioners or Congested Districts Board, whether he will say what action the Estates Commissioners will take in the matter.
  (Answered by Mr. Birrell.) Purchase agreements in respect of the estate referred to were lodged with the Estates Commissioners in December, 1905, but the case has not yet reached its turn to be dealt with. The Commissioners have no knowledge of the circumstances alleged in the question, but will, when dealing with the estate, give full consideration to any facts which may be brought to their notice by the tenants.
  MR. GILHOOLY: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is aware that the tenants on the estate of Mr. Leahy, Castletown Bere, county Cork, and Mr. Leahy agreed to leave to the arbitration of the Estates Commissioners the purchase price the tenants should pay, including arrears, and that subsequently Mr. Leahy wrote to the Estates Commissioners withdrawing from that agreement, and served them with writs and civil bill ejectments; and whether, seeing that the relieving officer of the Castletown Union has been served with fourteen notices of ejectment, he will say what action the Estates Commissioners will take with regard to the sale of this estate.
  (Answered by Mr. Birrell.) The hon. Member is under a misapprehension in supposing that the landlord agreed to leave the purchase price in this case to the arbitration of the Estates Commissioners. Last autumn it was represented to the Commissioners that differences existed between the landlord and the tenants as to terms of purchase, whereupon the Commissioners offered their services as conciliators under the Lord-Lieutenant's regulations. At an interview between the Commissioners, the landlord's agent, and the tenant's representatives, it was suggested that the Commissioners should have the holdings inspected, with the object of estimating, for the consideration of the parties, the prices which should be given. The landlord, however, declined to permit inspection or to consider terms of sale for the part of the property in dispute, alleging that the tenants on that part of the property had declined to pay rent for the last year. In the circumstances the Commissioners were obliged to withdraw from the matter, and cannot take further action.

  Ballingeary Assault Case.
  MR. SHEEHAN: To ask the Chief Secretary to the Lord Lieutenant of Ireland whether he is aware that at the recent hearing, at Macroom petty sessions, of some cases of alleged assault against a number of young girls from Ballingeary, the presiding magistrate was Mr. O'Hara, resident magistrate; will he say if Mr. O'Hara was formally moved to the chair by his brother magistrates, or if he took it as if it were a right appertaining to his position as resident magistrate; does any such right exist; and, if not, will an instruction be issued to Irish resident magistrates that they should not take the chair at petty sessions unless they are moved to it by their brother magistrates in the usual course.
  (Answered by Mr. Birrell.) I am informed that there was no formal moving to the chair on the occasion mentioned, but Mr. O'Hara was asked to take it by the majority of the magistrates present at the opening of the court. A resident magistrate is not chairman of petty sessions by virtue of his office. It rests with the magistrates present at each court of petty sessions to select one of their number as chairman, but whether by a formal vote or by general concurrence is a matter entirely for themselves. Mr. O'Hara informs me that he has never assumed a right to take the chair, and I have no information that any other resident magistrate has claimed such a right. In the circumstances there does not appear to be any reason for issuing instructions in the matter.

  Kilfinane Town Tenants
  MR. SHEEHAN: To ask the Chief Secretary to the Lord Lieutenant of Ireland whether the Estates Commissioners have received any application from the tenants in the town of Kilfinane requesting them to advance money for the purchase of their holdings; does this town form a portion of an estate which is mainly agricultural and on which a sale to the rural tenants has already taken place; and will he explain the powers of the Estates Commissioners to advance money for the purchase of their holdings to town tenants in circumstances such as the present.
  (Answered by Mr. Birrell.) The Estates Commissioners have received from the town tenants referred to an application that their holdings should be included in the sale of Colonel Gascoigne's estate, and have directed their inspector to inquire into the matter. Proceedings for the sale of the rural portion of the estate have been instituted before the Commissioners. The general question of advances for the purchase of town or village holdings is dealt with in the Lord-Lieutenant's regulations of 13th November, 1906, to which I beg to refer the hon. Member.

  Coachford Evicted Tenant.
  MR. SHEEHAN: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether the Estates Commissioners received an application for reinstatement from an evicted tenant named Jeremiah Murphy, formerly of Aharrin, Coachford, county Cork, on the Bowen-Colthurst estate; has a sale been arranged to the tenants on this estate, and have these made it a condition of purchase that Murphy should be reinstated; have different inspectors of the Estates Commissioners inquired into the claims of this evicted tenant; and, if so, what has been the nature of their reports; did the middleman, Mr. J. H. Weldon, Killmallock, inform any of the inspectors that he was willing to dispose of his interest for a reasonable sum to the Estates Commissioners; and will he state the number of inspectors through whose hands the claim of this evicted tenant has passed.
  (Answered by Mr. Birrell.) The Estates Commissioners have received Jeremiah Murphy's application for reinstatement. No proceedings for the sale of the estate have been instituted before the Commissioners, but they are informed that terms of purchase have been arranged with the tenants, who, however, are unwilling to sign agreements until Murphy is reinstated. Two of the Commissioners' inspectors have visited the farm, and have approached the middleman, Mr. Weldon, with a view to purchasing it. Mr. Weldon has not yet stated what sum he would require for his interest. The matter is still pending.

  Coolroe Estate, Wexford
  MR. FFRENCH: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is aware that the owner of the Coolroe estate has offered it for sale to the Estates Commissioners; and whether any progress has yet been made with regard to the restoration of the Coolroe evicted tenants to their homes.
  (Answered by Mr. Birrell.) The owner of the estate mentioned has intimated his willingness to accept the price provisionally offered by the Estates Commissioners, and proceedings for the sale have accordingly been instituted. The case has not yet reached a stage at which the matter of the evicted tenants can be dealt with.

  Woolwich Arsenal.
  SIR BERKELEY SHEFFIELD: To ask the Secretary of State for War how many boxes of ammunition there are waiting in Woolwich Arsenal for repair and overhaul.
  (Answered by Mr. Secretary Haldane.) It is assumed that the Question refers to boxes for ammunition. A large number are now being repaired, and others will be dealt with during the year as they are required for use. The requirements of these boxes will only mature pro rata as filling work, etc., proceeds during the ensuing twelve months.

  Colonial Premiers and the Reserve Forces.
  SIR HOWARD VINCENT: To ask the Secretary of State for War if no opportunity is to be afforded the Colonial Statesmen now in the Mother Country of seeing the Yeomanry and Volunteer Forces, having regard to the efforts they are making in the several Colonies to develop national defence.
  (Answered by Mr. Secretary Haldane.) No effort will be spared to procure for the Colonial Statesmen now in this country such opportunities as they may desire of acquiring information in regard to the Yeomanry and Volunteers.

  Gun Velocities.
  MR. ARTHUR LEE: To ask the Secretary of

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  State for War, if he can state the remaining velocity and angle of descent at a range of 5,900 yards, of the projectiles of the British 18-pounder quick-firing, British 15-pounder (converted), and latest models of French and German quick-firing field-guns, respectively; and also the angle of elevation corresponding

  British.

  German

  18-Pounder Quick-firing.

  15-Pounder B. L. Converted.

  Remaining Velocity

  743 f. s.

  655 f. s.

  756 f. s.

  Angle of Descent

  23o3'

  25o6'

  22o3'

  Angle of Elevation

  15o2'

  17o7'

  15 7'

  Tidworth Barracks Hospital.
  CAPTAIN FABER: To ask the Secretary of State for War whether it can now be stated at what date the building of the new hospital at Tidworth barracks will commence.
  (Answered by Mr. Secretary Haldane.) It is not possible to give a definite date, but the work in preparation for the new hospital work is so far advanced as to render it possible in a short period to arrange a contract.

  Norfolk and Suffolk Artillery.
  MR. FELL: To ask the Secretary of State for War if the 1st Norfolk (Prince of Wales' Own) Artillery and the 1st Suffolk Artillery will be embodied as usual during the present year; and where their training will take place.
  (Answered by Mr. Secretary Haldane) The hon. Member apparently alludes to the annual training of two regiments, called respectively the Prince of Wales' Own Norfolk Royal Garrison Artillery Militia and the Suffolk Artillery Militia. The former regiment will train at Great Yarmouth from the 20th May to 8th June, and the latter at Harwich from 10th June to 29th June.

  Nenagh Garrison.
  COLONEL KENYON-SLANEY: To ask the Secretary
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  to this range which has to be given to the gun in each case.
  (Answered by Mr. Secretary Haldane.) The figures for the British and German guns are as follow. There is no reliable information available as regards the French guns:—
  of State for War whether he has received a memorial from the Nenagh Urban Council, the magistrates of county Tipperary, and the people of Nenagh, praying; him to cause the reconsideration of the removal of the present military from Nenagh, in view of the feeling that has sprung up between them and the people of Nenagh of all creeds and classes; and whether he can state the nature of the reply to this memorial.
  (Answered by Mr. Secretary Haldane.) No such memorial has been received at the War Office.

  Army Scheme—County Associations.
  CAPTAIN HERVEY: To ask the Secretary of State for War if it is intended, under the Territorial and Reserve Forces Bill, that the establishment of county associations should be permissive; and, if they are permissive, what would happen to the existing organisation of the Militia, Volunteers, and Yeomanry in counties where associations were not formed.
  (Answered by Mr. Secretary Haldane.) In accordance with the terms of the Bill the associations need not be all established at once, but may be formed progressively. Until associations are actually formed the existing powers in relation to the Auxiliary Forces will continue.

  Pay of Lieutenant-Colonels.
  MR. COURTHOPE: To ask the Secretary of State for War what sum has been taken in the Estimate for 1907–8 to meet the service of increasing the pay of lieutenant-colonels.
  (Answered by Mr. Secretary Haldane.) I am in communication with the Treasury as to the rate of increase per arm, and I am not yet in a position to state the exact figures.

  Cost of Autumn Manœuvres.
  MR. COURTHOPE: To ask the Secretary of State for War what has been the total cost from all sources of autumn manœuvres during the last three financial years; and what sum has been provided for manœuvres during 1907–8.
  (Answered by Mr. Secretary Haldane.) The sums provided in Estimates for manœuvres and field training are as follows:—

  Length of Service.

  Present Salary.

  Present Position.

  £

  1

  18 years 2 months

  486

  Chief Examiner, Headquarters (formerly Local Auditor, Gibraltar).

  2

  15 years 10 months

  300

  Local Auditor, Gibraltar (receives £50 for auditing Dockyard Accounts, £86 for the audit of Municipal Accounts).

  3

  12 years 4 months

  460

  Local Auditor, Uganda.

  4

  8 years 5 months

  300

  Assistant Auditor, East Africa.

  5

  7 years 11 months

  320

  Assistant Auditor, Uganda.

  6

  7 years 6 months

  440

  Local Auditor, Gold Coast.

  7

  6 years 10 months

  340

  Assistant Auditor, East Africa.

  8

  6 years 6 months

  430

  Local Auditor, British Central Africa.

  9

  5 years 1 years

  360

  Assistant Auditor, Southern Nigeria.

  10

  4 years 8 years

  310

  Assistant Auditor, Northern Nigeria.

  11

  4 years 6 years

  100

  Examiner, Headquarters.

  12

  4 years 2 months

  310

  Assistant Auditor, Southern Nigeria.

  13

  3 years 1 months

  300

  Assistant Auditor, Southern Nigeria.

  1904–5

  £250,000

  1905–6

  140,000

  1906–7

  145,000

  1907–8

  175,000

  The expenditure on the two items is not shown separately.

  Second Division Clerks.
  MR. FIELD: (Dublin, St. Patrick): To ask the Secretary to the Treasury whether he will state the total number of clerks, neither Second Division nor university graduates, who were admitted, without Civil Service examination, to the Colonial Audit Branch in London from its establishment in 1889 to the date of its reorganisation in 1906; and the length of service, the rate of salary, and the present position of each of such clerks now serving at Home or Abroad.
  (Answered by Mr. Runciman.) The length of service, rate of salary, and present position of those still serving are as follows:—

  Second Division Clerk Examinations.
  MR. FIELD: To ask the Secretary to the Treasury, whether Second Division clerks who entered the Exchequer and Audit Department, prior to its reorganisation in 1906, generally scored high marks in book-keeping at the various examinations in which they were successful; whether book-keeping is now included in the competitive part of the examination for new entrants, and, if not, will he explain why.
  (Answered by Mr. Runciman.) The appointment of Second Division clerks to the Exchequer and Audit Department did not depend upon their proficiency in book-keeping, which was an optional subject. The new scheme of examination for the Exchequer and Audit Department which applies also to certain appointments under the War Office and Admiralty, has been framed, after conference with eminent head masters representing various types of higher grade schools, to attract able youths who have been educated in public schools, grammar schools, or other higher grade schools up to the age of eighteen or nineteen. Book-keeping is not included among the subjects, because book-keeping does not form part of the ordinary curriculum of many of the schools in question. Candidates are, however, required to pass in arithmetic; and it is provided that no candidate shall be confirmed in his appointment unless he has, during the probationary period, satisfied the Comptroller and Auditor-General that he has gained a sufficient knowledge of book-keeping by single and double entry.

  Annual Leave in the Exchequer and Audit Department.
  MR. FIELD: To ask the Secretary to the Treasury, whether he will grant a statement showing the annual leave allowed to each rank in the Exchequer and Audit Department, including the Comptroller and Auditor-General and the Assistant Comptroller.
  (Answered by Mr. Runciman.) I learn that the scale of leave authorised by the Comptroller and Auditor-General for the
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  various ranks of the Exchequer and Audit Department is as follows:—

  Per annum.

  Principal and senior clerks

  48 days.

  Chief examiners

  36 days

  Examiners

  24 days

  After 10 years service

  30 days

  After 20 years service

  36 days

  The Comptroller and Assistant Comptroller conform to the rules applicable to the Civil Service generally.

  Code Telegrams.
  SIR H. COTTON: To ask the Postmaster-General whether his attention has been drawn to the frequency of mistakes made in code telegrams, and to the fact that a majority of these do not probably come under his official notice owing to the loss of time involved in addressing such complaints to local postmasters; whether he is aware of the probability of any telegram being misread so long as the present method of transcribing messages in pencil is continued; and whether he is prepared to consider the question of directing all telegrams in future to be typewritten.
  (Answered by Mr. Sydney Buxton.) I do not think such mistakes are frequent, having regard to the great number of telegrams transmitted. The question of typewritten telegrams is engaging my attention. Experiments have been made, but the results have not been altogether satisfactory. I believe that as a rule telegrams are clearly and legibly written, and I have had but little complaint on the subject.

  Addresses of Private Telegrams.
  SIR H. COTTON: To ask the Postmaster-General whether, having regard to the inconvenience and annoyance caused by private telegrams having been opened by persons other than the addressees owing to the illegibility of the lead pencil directions on paper of the colour now used, he can see his way either to abolish the use of the present coloured envelope in all cases, or, as an alternative, to direct that telegrams bearing the words private, confidential, or similar indications, shall be delivered in envelopes

  1121
  on which lead pencil writing is more distinctly legible.
  (Answered by Mr. Sydney Buxton.) I cannot do better than repeat to the hon. Member the substance of a reply which I gave to the chamber of commerce of his constituency on this point a month ago. I said that exception was very rarely taken to the colour of the present telegram envelopes; any change in its colour would probably give rise to much complaint; that Postmasters - General had from time to time been urged to use distinctive envelopes for various classes of telegrams, but that the multiplication of forms of official stationary used at postal telegraph offices was moat undesirable, and would undoubtedly tend to certain delay and possible mistakes in the treatment of telegrams.

  Census Advisory Committees.
  SIR A. SPICER: To ask the President of the Board of Trade whether, having regard to the provisions of Section 9 of The Census of Production Act, 1906, stipulating that the advisory committees should include persons engaged in as well as conversant with the conditions of various trades and industries, he has taken steps for the appointment of such advisory committees; by what process it is proposed to select the members; and whether it is intended to invite nominations from chambers of commerce in the principal industrial centres.
  (Answered by Mr. Lloyd-George.) A general committee has been appointed to advise upon the general scope of the census of production, and the lines upon which the information required is to be obtained. Steps are being taken to appoint other committees to consider the special requirements of particular trades, which will include leading manufacturers and representatives of trade associations. Committees for the building, iron and steel, cotton, woollen and worsted, engineering, shipbuilding, and boot and shoe trades are at present in course of formation, and in each case the leading trade associations have been invited to suggest members. The question of the appointment of further
  1122
  committees is under consideration, and a similar method of selection will be adopted in these cases.

  His Majesty's Customs Tide Surveyor.
  MR. W. HOPE: To ask the President of the Board of Trade whether a tide surveyor, in the employ of His Majesty's Customs, has the right to take from boatmen timber which they have salved, when the boatmen have found the owners, and the timber, being only good for firewood, has been given by the owners to the boatmen.
  (Answered by Mr. Lloyd-George.) It is laid down in the Merchant Shipping Acts that all wreck found by persons other than the owner must be delivered to the receiver of wreck. This officer, however, has instructions to permit any article which is proved to his satisfaction to belong to parties on the spot to be delivered by the salvors to such parties at once without demanding any fee, provided that there is no question as to salvage or customs duties, and of course in such a case the owner may do what he likes with it.

  Shettleston Free Church Property
  MR. REMNANT: To ask the Secretary for Scotland whether the Church Commissioners have decided that all the Free Church property in Shettleston shall be allocated to the United Free Church; and whether, in view of the fact that there is a substantial Free Church congregation in the district who will be left without a place in which to worship, the Commissioners will consider the advisability of making some financial provision for the religious needs of this congregation.
  (Answered by Mr. Sinclair.) I understand that the Church Commissioners have decided that the Free Church property in Shettleston must be allocated to the United Free Church. The rest of the hon. Member's Question refers to matters which the Act leaves entirely to the discretion of the Commissioners, with which I cannot interfere.

  Hanwell Vaccination Exemption Certificate.
  DR. RUTHERFORD: To ask the Secretary of State for

  1123
  the Home Department whether his attention has been called to the fact that Mr. Reginald Hayles, of Hanwell, applied twice to the magistrates at the Brentford police court, on 2nd and 16th March, for an exemption under the Vaccination Act, 1898, and was refused; and what steps he proposes taking to give the conscientious objector a fair hearing.
  (Answered by Mr. Secretary Gladstone.) I have received two letters from Mr. Hales calling my attention to the case. The amendment of the law is under consideration by my right hon. friend the President of the Local Government Board.

  Privilege Cabs.
  MR. C. B. HARMSWORTH: To ask the Secretary of State for the Home Department if he is in a position to state when it is proposed to give effect to the unanimous recommendation of the Cabs and Omnibuses (Metropolis) Committee that the privilege system for cabs at metropolitan railway stations should be provisionally abolished for one year.
  (Answered by Mr. Secretary Gladstone.) As the hon. Member is probably aware, I approached the railway companies, but they saw great difficulties in the way of carrying out my proposals. I am still in communication with them, and I still have hopes of obtaining the desired result by friendly arrangement. Owing to the number and different characteristics of the different stations affected the question is far from simple, but I am pressing forward my negotiations, and I have not relaxed in any way my declared intention of dealing with the matter.

  Municipal Indebtedness.
  MR. PIKE PEASE: To ask the President of the Local Government Board whether he is in a position to state the total amount of the municipal debt of England and Wales to the end 1906; also the annual cost of such debt, including interest.
  (Answered by Mr. John Burns.) I presume that the Question refers to the debt of all local authorities in England and Wales, and not merely to that of
  1124
  town councils. The latest available figures relate to the year ended March, 1904, and these show that the outstanding loans then amounted to £393,882,146, and that the loan charges in that year (including interest, repayment of principal, and sums paid to sinking funds) amounted to £21,675,645.

  Midwifery.
  MR. ASHTON: To ask the President of the Local Government Board whether he is aware that there are only nineteen counties in England and Wales in which there are institutions approved by the Central Midwives Board for the training of midwives; and that there are only fifty-two approved institutions in England and Wales, of which thirty-five are voluntary and only seventeen Poor Law institutions, of which again six are in London and only eleven in the rest of the country; whether he will say if the Paddington, Farnham, and Epsom infirmaries are yet approved; whether in the voluntary institutions the probationers have to pay fees, and whether in the Poor Law institutions they pay none; and if he can state what way the fees payable in the voluntary institutions are generally disposed of.
  (Answered by Mr. John Burns.) I understand that the figures in the Question are substantially correct, the precise figures being as follows:—

  Counties in England and Wales in which there are institutions approved by the Central Midwives Board for the training of midwives

  19

  Approved institutions in England and Wales (of which there are 35 voluntary (i.e., non-Poor Law), and 16 Poor Law, of the latter there are 6 in London and 10 in the provinces)

  51

  The Paddington, Farnham, and Epsom infirmaries have not been approved. I have no information as to the payment and application of fees in voluntary institutions. In Poor Law institutions, there are usually no fees.

  Proposed Vizamgam-Malia Railway.
  MR. WEIR: To ask the Secretary of State for India

  1125
  whether the memorial from the Cutchi public of Bombay, urging that the proposed Vizamgam-Malia railway line should pass through the territory of the Rao of Cutch, has now been received and considered; has the Report on the reconnaissance of the two alternative routes yet been received and considered, and if any fresh reconnaissance has been ordered will he state its nature; and will he state when a decision as to the route to be adopted is likely to be arrived at.
  (Answered by Mr. Secretary Morley.) I have nothing to add to the Answer which I gave to a similar Question asked by the hon. Member in December last.† I cannot state when a decision as to the route to be adopted is likely to be arrived at. So far as I am aware there is no intention on the part of the Government of India of proceeding with the construction of the Bombay-Sind connection at present.

  Bengal Indian Education Service
  MR. MCCALLUM: To ask the Secretary of State for India whether, having regard to the fact that only one Native of India has during the past seventeen years been appointed to the Indian educational service in Bengal, he will consider the claims of highly qualified graduates of English Universities who are Natives of India, and now serving in the provincial service, to promotion to the Indian education service.
  (Answered by Mr. Secretary Morley.) The Indian educational service, as distinguished from the provincial service, is intended to supply what is at present considered to be the minimum of European appointments necessary to ensure the due progress of education in India, and it is therefore intended to be recruited mainly from Europeans, and must for the present continue so to be recruited. I may explain that it differs from the provincial service only in so far as its pay and other conditions are fixed with reference to the scale necessary to attract Europeans, which is naturally higher than that required to secure Indians serving in their own country.
  †See (4) Debates, clxvii., 1004.

  Irish Education Grant.
  MR. FETHERSTONHAUGH: To ask the Chief Secretary to the Lord-Lieutenant of Ireland, is he aware that the Estimates presented to Parliament provide a sum of £2,000,000 and upwards for public education in Scotland and only £1,400,000 for Ireland, though the number of children to be educated in Ireland is practically equal to the number in Scotland; and will he say what is the reason for the difference, and take steps to bring the grant to Ireland up to that for Scotland.
  (Answered by Mr. Birrell.) I am afraid that I cannot, within the limits of an Answer, discuss the question which the hon. and learned Member raises. I have repeatedly stated that the Irish Government are doing everything in their power to obtain adequate recognition of the claims of Ireland in respect of education.

  Bundoran Evicted Tenant.
  MR. DOLAN: To ask the Chief Secretary to the Lord-Lieutenant of Ireland what steps are being taken by the Estates Commissioners to bring about the restoration of Francis M'Guinness, Bundoran, to the holding on the Tottenham estate, county Leitrim, from which his father was evicted.
  (Answered by Mr. Birrell.) The Estates Commissioners are unable to trace the receipt from Francis M'Guinness of any application for reinstatement.

  Glenboy Fair Rent Cases.
  MR. DOLAN: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is aware that it is the practice of the agent on the G. S. Clements estate, Glenboy, county Leitrim, to have all applications for the fixing of fair rents transferred from the jurisdiction of the county court judge; and will he state by what authority the agent is thus enabled to prevent these applications being heard within any reasonable time.
  (Answered by Mr. Birrell.) The Land Commission inform me that five out of six pending applications to fix judicial rents on the estate mentioned were transferred from the Civil Bill Court on

  1127
  the 6th March. The applications were transferred to the Land Commission on the application of the landlord made under the powers conferred by the provisions of Section 37, sub-section (4), of The Land Law (Ireland) Act, 1881, no cause against such transfer having been shown by the tenants.

  Inspection of Irish Schools.
  MR. DELANY: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is aware that the rule by which inspectors of national schools are bound to give notice of the annual inspection to both teachers and managers is in many instances not observed; and will he see that this rule is enforced and the date fixed in future.
  (Answered by Mr. Birrell.) The Commissioners of National Education inform me that under their rules the inspectors are not required to give notice of their intended visits to schools except when they propose to hold a formal inspection annual or otherwise. The Commissioners are not aware that inspectors have failed to give notice of their intention to hold formal annual inspections.

  Royal Irish Constabulary Cadets.
  MR. SLOAN: To ask the Chief Secretary to the Lord-Lieutenant of Ireland, whether it is intended to hold any more examinations for Royal Irish Constabulary cadets; and whether the holding of these examinations is due to the insufficient supply of head constables qualified to fulfil the duties of district inspector.
  (Answered by Mr. Birrell.) An examination is to be held on the 7th May. Under the existing regulations half of the examinations in the rank of district inspector are filled by the appointment of cadets and half by the promotion of head constables. Formerly only one-fourth of the vacancies was given to head constables.

  Royal Irish Constabulary Barracks.
  MR. SLOAN: To ask the Chief Secretary to the Lord-Lieutenant of Ireland, to what extent separate sanitary
  1128
  accommodation is provided for the wives and children of members of the Royal Irish Constabulary living in barracks; whether there is any exception to the rule that one convenience only is provided for men, women, and children, as well as prisoners of both sexes; what means have the constabulary authorities of ascertaining that the sanitary accommodation of Royal Irish Constabulary barracks is wholesome; and whether the surgeon to the force exercises any supervision in this respect.
  (Answered by Mr. Birrell.) Separate sanitary accommodation for women and children is almost invariably provided at the larger stations, but it is not possible to provide such accommodation at many of the small rural stations where the premises are small. The latter stations are usually occupied by one married constable only, and in such case the necessity for separate sanitary accommodation is not so marked. Constabulary stations are periodically inspected by county and district inspectors, as well as by officers from headquarters, so that ample opportunity is afforded for bringing to notice any defects in the sanitary arrangements. The local medical attendants advise on all matters affecting the health of the men and their families, and the sanitary condition of the barracks. The surgeon of the force, who is attached to the depot, exercises no supervision in this respect.

  Upper Ballinagh Evicted Tenant
  MR. VINCENT KENNEDY: To ask the Chief Secretary to the Lord-Lieutenant of Ireland if he will say whether the Estates Commissioners have received an application for reinstatement, from Thomas Forster, of Aughaweely, Upper Ballinagh, county Cavan, whose father, John Foster, was evicted from his farm in the same townland about twenty years ago, held under the Reverend Francis Sclater; will he say if the Estates Commissioners have inquired into the claim; and when is the matter likely to be dealt with.
  (Answered by Mr. Birrell.) The Estates Commissioners cannot trace the receipt from Thomas Foster of any application for reinstatement.

  Callan Evicted Tenant.
  MR. O'MARA: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether negotiations for the; sale of the Madden estate, Callan, county Kilkenny, are now proceeding; and, if so, what steps are being taken to reinstate Mr. Richard O'Mahony, an evicted tenant, on this estate; and whether he will consider the expediency of making public the report of Mr. Smyth, the inspector, who inquired into this matter.
  (Answered by Mr. Birrell.) The Estates Commissioners have made inquiries into the application of Richard Mahony. The landlord objects to any interference with the present occupier of the evicted holding, and the Commissioners understand that Mahony already occupies a farm of 112 acres elsewhere. The Comissioners have therefore decided to take no action in the matter. The reports of their inspectors are confidential documents and cannot be published.

  Dingle Harbour Board.
  MR. THOMAS O'DONNELL: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether the Harbour Board of Dingle, county Kerry, have sent memorials asking for grants for the extension of the pier or the further dredging of the harbour; and whether, seeing that Dingle is one of the best fishing ports in the whole of Ireland, and that the present pier was built without any Government contribution, and the harbour authorities have gone into debt in trying to make the harbour suitable for fishing, and in view of the congested nature of the surrounding country and the dependence of the people on fishing, some assistance will be given to enable them to carry on this industry.
  (Answered by Mr. Birrell.) I am informed that the Dingle Board addressed to my predecessor a memorial asking for a grant of £5,000 for the purpose of extending the pier by 160 feet. The Board of Works, however, reported that the proposed extension would not effect the desired end; it would not reach out to low-water mark, and the chief advantage to be gained would be merely increased quay accommodation. The hon. Member is under a misapprehension in supposing
  1130
  that the existing pier was built without Government contribution. More than half of the cost was provided from State funds. The Congested Districts Board contributed £500 last year towards the cost of dredging the harbour. They have been obliged, owing to the state of their funds, to refuse a contribution this year.

  Northumberland Artillery Militia
  SIR ROBERT HOBART: To ask the Secretary of State for War whether the Northumberland Artillery Militia can be called out, assembled, and trained this year at Tynemouth, where the Castle Barracks are now empty, their arms and accoutrements being sent from Berwick, thus avoiding expense to the public; whether there is a battery at Tynemouth armed with modern guns, which do not exist at Berwick; and whether there is ample camping ground adjoining the Castle Barracks on which the Durham Artillery Militia, with a strength of 200 men more than the Northumberland Artillery Militia, have been previously trained.
  (Answered by Mr. Secretary Haldane.) All arrangements for training and camps of the auxiliary forces are in the hands of the general officers commanding-in-chief. The matter raised will, however, be brought to the notice of the General Officer Commanding-in-Chief concerned.

  Exchequer and Audit Department—Press Communication.
  MR. FIELD: To ask the First Lord of the Treasury whether he is aware that an order has been recently issued in the Exchequer and Audit Department threatening with instant dismissal any employee who communicates information to the Press or to any outside person whatsoever; whether he will state who is responsible for the issue of this order; whether a Member of Parliament is entitled to obtain information respecting maladministration in any Government department, provided the Official Secrets Act is not contravened; and whether, seeing that this order would deprive the House of Commons of the power of criticising the permanent officials, he will take measures to have the order annulled and prevent its repetition.
  (Answered by Sir H. Campbell-Bannerman.) The order to which the hon. Member refers is presumably the rule which, I am informed, has for a long time been operative in the department, and which prohibits communication to the Press of information derived from official sources. This rule is based upon the Treasury Minute of 3rd June, 1873, which, together with another Minute on a similar subject, was presented to Parliament in 1884 [Cd. 3951]. I do not think that the rule has the results suggested by the hon. Member, nor do I think it is expedient to alter or withdraw the Minute.

QUESTIONS IN THE HOUSE.

  Promotion in the Navy.
  MR. JOWETT: I beg to ask the Secretary to the Admiralty whether the Board are prepared to introduce into the Navy the principle of promotion exclusively by merit; and, if so, when do they propose to abolish the automatic promotions each year from the Royal Yacht.
  THE CIVIL LOED OF THE ADMIRALTY (Mr. LAMBERT,): Promotion in the Navy is determined exclusively by merit, and the special promotions from His Majesty's Yacht are no exception to the rule, as only officers who merited promotion are appointed to her.
  *MR. BELLAIRS: Is not promotion from the Royal Yacht automatic and not by merit, and is the hon. Member aware that it has been officially stated in this House that in the ten years ending 31st December, 1905, forty-three commissioned officers of the executive branch have been thus automatically promoted?
  MR. LAMBERT: No. Promotion in the Navy is exclusively by merit.

  His Majesty's Ship "Dreadnought."
  SIR BERKELEY SHEFFIELD: I beg to ask the Secretary to the Admiralty how long His Majesty's Ship "Dreadnought" was kept waiting for her 12-pounder ammunition recently; whether this delay was due to
  1132
  the inability of Woolwich Arsenal to cope with the work owing to shortage of hands; and, if not, to what other cause is the delay attributable.
  MR. LAMBERT: His Majesty's Ship "Dreadnought" has not been kept waiting for her 12-pounder ammunition. A demand recently preferred at Portsmouth for reduced charges, which do not form part of the fighting equipment of the ship, could not immediately be complied with in full locally, but the balance is available elsewhere. The suggestion in the second sentence of the question is without foundation.

  H.M.S. "Phœnix."
  MR. NIELD: I beg to ask the Secretary to the Admiralty if H.M.S. "Phœnix" has been sold; and, if so, what was the price realised and received; and by what ship the "Phœnix" has now been replaced.
  MR. LAMBERT: The "Phœnix" was sold at Hong Kong by public auction and realised £2,242. As this vessel was one of a number of small craft reduced from the active strength of the fleet in December, 1904, it is not proposed to replace her.

  The Coastguard.
  MR. HUNT: I beg to ask the Secretary to the Admiralty whether it has been decided to abolish the coastguard; if so, by whom are their duties to be discharged; and, if the coastguard is to be abolished or reduced, what men are to take their place as a reserve for the Royal Navy.
  MR LAMBERT: I have nothing to add to the reply to my hon. friend the Member for Orkney and Shetland on the 21st November last.†

  H.M.S. "Furious"—Case of Stoker Keeley.
  MR. COURTHOPE: I beg to ask the Secretary to the Admiralty whether his attention has been called to the case of H. Keeley, now residing at 313, Battle Road, Hollington, near Hastings, who was severely injured by an explosion on board H.M.S. "Furious," at Gibraltar, in the winter of 1902–3; whether he is aware that, on that occasion, Keeley enabled all others to escape
  †See (4) Debates, clxv., 813.

  1133
  by his promptitude in giving the alarm, while he himself remained in the stokehold to draw the fires; and that, as a result of injuries received on this occasion, Keeley became subject to fits, in consequence of which he was invalided out of the Navy in September, 1906, and is now, owing to their increasing frequency, unable to work or to go out unattended; and whether the Admiralty will grant him a greater pension than 6d. per diem.
  MR. LAMBERT: There is no record of any such explosion or of any injury to Keeley. The disability for which he was invalided was not attributable to the Service, and the pension of 6½d. a day which he has been granted is the full amount which the circumstances of his case entitle him to receive from naval funds under the Regulations.

  Anti-Opium Movement in the Malay Peninsula.
  SIR H. COTTON: I beg to ask the Under-Secretary of State for the Colonies whether his attention has been drawn to the mooting of the anti-opium societies of the Malay Peninsula, held at Ipoh on 8th March last, at which resolutions were carried demanding the abolition of all opium farms and the substitution for them of Government depôts and complete Government control, and also urging that compulsory registration of all opium smokers, as in Formosa and the Philippines, should be enforced by law; and whether the Government will take any action in the direction indicated.
  I beg also to ask the Under-Secretary of State for the Colonies whether his attention has been drawn to the resolution recorded at the conference of the anti-opium societies of the Malay Peninsula, held at Ipoh on 8th March last, to the effect that the Government be requested to pass additional rules under the chandu shops enactment forbidding the sale of opium to any person under twenty-one years of age, and also forbidding the sale and use of opium in brothels, jinriksha depots, and other such public places; and whether the Government will take any action in the direction indicated.
  THE UNDER - SECRETARY OF STATE FOR THE COLONIES (Mr. CHURCHILL,): I have seen a newspaper report of this meeting. His Majesty's Government are giving careful consideration to the opium question.

  Opium Smoking in Penang.
  SIR H. COTTON: I beg to ask the Under-Secretary of State for the Colonies whether his attention has been drawn to a Chinese proclamation issued by the Protector of Chinese in Penang on 8th February, 1907, and given by him to the opium farmers for distribution, the effect of which is to encourage opium smoking in the Colony; and whether, having regard to this unusual procedure and to the objection to a Chinese protector becoming a protector of Chinese vice, the Government will indicate to the Governor of the Straits Settlements their disapproval of the terms of this notice.
  MR. CHURCHILL: I have seen in a newspaper what purports to be a translation of this notification. The Governor of the Straits Settlements will be asked for a report on the subject.

  White Police in British East Africa.
  MR. NIELD: I beg to ask the Under-Secretary of State for the Colonies what is the size and nature of the force of white police now being recruited for British East Africa.
  MR. CHURCHILL: I would refer the hon. Member to the reply given to the Question of the hon. Member for the Kingston Division on the 10th instant,† to which the Secretary of State has nothing to add.

  Transvaal Government and Chinese Coolie Repatriation.
  SIR GILBERT PARKER: I beg to ask the Under-Secretary of State for the Colonies in view of the establishment of responsible government in the Transvaal, whether the arrangement for repatriation of Chinese coolies from Imperial funds is to continue; and, if so, for what period.
  MR. CHURCHILL: This matter is forming the subject of discussion with
  †See (4) Debates, clxxii., 200.

  1135
  the new Government, but no decision has yet been reached.

  The Nairobi Case—Captain Grogan.
  MR. CAVE: I beg to ask the Under-Secretary of State for the Colonies whether Captain Ewart Grogan, now imprisoned in East Africa for holding an unlawful meeting at Nairobi, is the explorer of that name who, during his march from the Cape to Cairo, was for some months in the interior of Africa accompanied only by Native servants; whether Captain Grogan some time since, with a view to assisting in the development of British East Africa, settled at Nairobi with his family, and induced some of his friends to take the same course; whether Captain Grogan, as chairman of the Colonists' Association, lately represented to the local authorities that the attitude of the Wakikuyu towards the white population has changed for the worse, and requested that increased police protection should be afforded to the settlers; whether his representations were disregarded until he publicly caned three of his boys for deliberate insults to English women; whether, immediately after that occurrence, the Secretary of State authorised the raising of twenty, since increased to forty, white police for the protection of the settlers, and on whose recommendation the authority was given; and whether it is in consequence of a crowd having collected while the boys were flogged that Captain Grogan and his friends have been convicted of holding an unlawful meeting and imprisoned.
  MR. CHURCHILL: The Secretary of State has no official information as to Captain Grogan's explorations. He has now been for some little time resident in East Africa, and has obtained a large forest concession from the Government which so far he has not developed. The Secretary of State is not aware that, previous to the flogging of the natives on the 14th March last, Captain Grogan had made the representations referred to by the hon. Member. The raising of a small white police force had for some time been recommended by the Commissioner of the Protectorate, and provision for raising it was inserted in the Estimates for the financial year 1907–8, which were prepared in the Protectorate as far back as November last. The increase of the
  1136
  number from twenty to forty was, however, decided upon in order to deal with such lawless acts as that of which Captain Grogan has been guilty. It is clear from the reports received that Captain Grogan and his follow-offenders announced their purpose of flogging the natives in a public place with a view of inducing a crowd to assemble to witness and participate in their unlawful acts. The House must not assume that I admit that the expression "caning three boys for deliberate insults to white women" expresses at all accurately what took place.
  AN HON. MEMBER: Will the hon. Gentleman inquire as to the alleged discontent among the whites?
  MR. CATHCART WASON: Is it not the fact that this alleged discontent is very largely caused by the alienation of large tracts of land from the natives?
  MR. CARLILE: Will the hon. Gentleman inquire if the representations referred to in the Question were made?
  MR. CHURCHILL: It is very difficult to see how such inquiry can be made.
  MR. CARLILE: It is not for me to guide the hon. Gentleman.
  MR. CAVE: I beg to ask the Undersecretary of State for the Colonies, whether Captain Grogan contracted a dangerous illness while serving in the Matabele war, and has lately had a return of such illness; whether he is imprisoned at Nairobi or Mombasa; and, if the former, whether on the high or low ground.
  MR. CHURCHILL: The Secretary of State has been informed that the facts as to Captain Grogan's medical history are as stated in the first part of the hon. Member's question. He has ascertained that he is now in good health and is confined in a house on the high ground at Nairobi, where he is daily visited by a medical officer.
  MR. CAVE: I beg to ask the Undersecretary of State for the Colonies when Papers on the subject of the Nairobi incident will be laid upon the Table.
  MR. CHUECHILL: Papers will be laid in due course, but I cannot fix a date at present.

  Sir Alexander Swettenham.
  MR. JESSE COLLINGS: I beg to ask the Under-Secretary of State for the Colonies when the Paper referring to Sir Alexander Swettenham's resignation will be issued.
  MR. CHURCHILL: The Paper will be presented immediately.
  MR. JESSE COLLINGS: Will it include the letter of the American admiral to Sir Alexander Swettenham, as well as the latter's reply, and also—what is most important to the House and the public—the letter sent by the mayor to the admiral and the admiral's reply?
  MR. CHURCHILL: I think the right hon. Gentleman had better await the publication of the Paper. In some respects it will fulfil his wishes, and in others it will fall short of them.

  German Settlements in the Far East—Sales of Opium.
  SIR H. COTTON: I beg to ask the Secretary of State for Foreign Affairs whether the German Government has agreed to suppress the sale and consumption of opium and morphia in the German settlements in China and at Tsingtau (Kiaochow.)
  THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (Sir EDWARD GREY,): We have no information on the subject at present.
  SIR H. COTTON: Will the right hon. Gentleman inquire?
  SIR EDWARD GREY: No, Sir, it is a matter on which the German Government act on their own responsibilities.

  British Trade in Eastern Persia.
  MR. REES: I beg to ask the Secretary of State for Foreign Affairs whether, in view of the active participation of the Consuls of other Powers in commercial affairs in Eastern Persia, our own Consuls have received
  1138
  instructions to forward the interests of British trade.
  SIR EDWARD GREY: The Consuls in Persia have instructions, as have Consuls elsewhere, to accord to British enterprise all the assistance that it can properly receive, and quite understand what their duties are. There is no occasion for special instructions in this instance.

  Mesopotamia Oil Concessions.
  MR. BOWLES: I beg to ask the Secretary of State for Foreign Affairs whether he has now received any information showing that a concession of the deposits of mineral oil in Mesopotamia has been granted by the Porte to the poisons representing the Anatolian Railway; and whether this concession is still in force.
  SIR EDWARD GREY: Information has been asked for from His Majesty's Embassy at Constantinople, but not yet received.

  Congo Free State—Lado Enclave
  MR. FELL: I beg to ask the Secretary of State for Foreign Affairs what is the length of the lease of the Lado Enclave to the Congo Froe State; and whether there is any power to determine the lease at an earlier date or to cancel it for any cause and regain possession of this tract of country, so as to have it administered by Englishmen and not by officials of the Congo Free State.
  SIR EDWARD GREY: In Answer to the first Question, I have to refer the hon. Member to Article 1 of the agreement of 12th May, 1906, between the Congo State and the United Kingdom (published in Treaty Series No. 4, 1906). The Answer to the second Question is in the negative.

  Egyptian Agent-General.
  MR. ASHLEY: I beg to ask the Secretary of State for Foreign Affairs if the status and powers of the new Agent-General in Egypt will be identical with those of his predecessor.
  SIR EDWARD GREY: The Answer is in the affirmative.

  New Hebrides.
  MAJOR SEELY: I beg to ask the Secretary of State for Foreign Affairs when the Anglo-French Commission dealing with the New Hebrides is to meet; whether amendments of the labour regulations will be made; and, if so, on what specific points.
  MR. MACKARNESS: I beg to ask the Secretary of State for Foreign Affairs whether in any future negotiations with the French Government about the New Hebrides Convention, or in any instructions which may be issued to British officials, the suggestions made by the Prime Minister of Australia, in his despatch of the 13th June, 1906, for the better protection of the indentured labourers, will be fully considered by His Majesty's Government; and whether special consideration will be given to those sections of the Convention which deal with the engagement of women and children, the hours of labour, the rate of wages, and the conditions of repatriation.
  SIR EDWARD GREY: The Answer to both parts of the last Question of the hon. Member for the Newbury Division is in the affirmative. But I may point out that the Anglo-French Committee which is shortly to meet is not intended to deal with the Convention generally, but only to discuss certain details of working of the Joint Court. I may add, with regard to the last part of the Question, that it must be some time before any licences at all can be issued under the Convention, and before any such licences are issued it will be made quite clear by the instructions given to the British authorities that the points indicated in the Question will be thoroughly safeguarded as regards all licences issued by them. His Majesty's Government have already communicated with the High Commissioner for the Western Pacific with regard to the appointment of sufficient labour inspectors to ensure that abuses do not arise as regards indentured labour employed by subjects under British jurisdiction after licences have been issued.
  MR. PIKE PEASE: Will the right hon. Gentleman lay a copy of
  1140
  the instructions on the Table of the House?
  SIR EDWARD GREY: I undertake that the instructions issued by the Colonial Office will be laid on the Table of the House.

  Egypt—Sugar Royalty on Refined Sugar
  DR. RUTHERFORD: I beg to ask the Secretary of State for Foreign Affairs whether there exists in Egypt and the Soudan, or in either and which of those countries, a royalty on the manufacture, importation, exportation, or sale of refined sugar; if so, what is the amount of such royalty; and whether it is intended to abolish wholly, or to reduce to any and what extent, such royalty and to replace it by one upon unrefined sugar.
  SIR EDWARD GREY: I am not aware of the existence of any such royalty. I will inquire. But, with regard to the latter part of the Question, I must point out that it is for obvious reasons the rule in this country not to announce an intention to alter duties before a decision has been arrived at, and the same reasons would, I assume, be equally applicable to Egypt.

  Egyptian Pharmacy Laws.
  DR. RUTHERFORD: I beg to ask the Secretary of State for Foreign Affairs whether, seeing that under the new Pharmacy Law of Egypt no power of search or seizure is given, he will advise the Egyptian Government to amend the law so as to create such powers as regards natives, who form the great majority of the illicit vendors of poisons.
  SIR EDWARD GREY: It is not a case in which His Majesty's Government can interfere with the discretion of the Egyptian Government.

  Canadian Tariffs—Sir Richard Cartwright's Statement.
  MR. PIKE PEASE: I beg to ask the Secretary of State for Foreign Affairs, whether his attention has been called to the statement of Sir Richard Cartwright, acting Prime Minister of Canada in the absence of Sir Wilfred Laurier, made in the Canadian Senate on 11th April, as to the negotiations it was proposed to conduct immediately after the Colonial

  1141
  Conference to bring into force the Canadian intermediate tariff with certain foreign countries; will he state what are the foreign countries in question, and whether the negotiations would be conducted through the Foreign Office, whether the conclusion of such treaties on the basis of the intermediate tariff would automatically diminish the value of the British preference; and whether such negotiations would in any way bind the action of Canada in extending further preference to the United Kingdom.
  SIR EDWARD GREY: I have not yet seen a report of the speech referred to, and am not aware what are the countries in question. The negotiations with Foreign Powers would, of course, be conducted through the proper channels in a manner agreed upon between the Canadian Government and His Majesty's Government. The application of the intermediate tariff would reduce, protanto, the preference granted to British goods; but the grant of the intermediate tariff to any foreign country would not, apparently, prevent the Canadian Government from altering the British preferential tariff at any time.

  Metz Smallpox Outbreak.
  MR. LUPTON: I beg to ask the Secretary of State for Foreign Affairs if he can give any information about an alleged epidemic of smallpox at Metz which began last July, has assumed alarming proportions, has seriously affected trade and industry, and has caused the usual Eastertide festivities to be abandoned; can he say if the population at Metz is protected by vaccination and re-vaccination with the same thoroughness as the rest of the German empire; and, if he has not this information, will he send a special commission to inquire and report.
  SIR EDWARD GREY: I have no information other than that supplied to me by the hon. Member. His Majesty's Ambassador at Berlin would, no doubt, ask the German authorities to facilitate any inquiry which competent British authorities may desire to make independently in the interests of medical science, but I have not been advised that the occasion is one which requires the appoint-
  1142
  ment of a special commission by His Majesty's Government.

  Duty on Cocoa.
  MR. AUSTEN CHAMBERLAIN: I beg to ask Mr. Chancellor of the Exchequer whether the duty payable on raw cocoa is from 2s. 3d. to 8s. 6d. per cwt. loss than the duty charged on the product of the same quantity of raw material if imported in a manufactured state.
  THE CHANCELLOR OF THE EXCHEQUER (Mr. ASQUITH,): An infinite number of combinations of cocoa with other ingredients may be made, and it is therefore impossible to state the exact amount of advantage which may be derived by a manufacturer in this country as compared with a foreign importer. The matter is a complicated one and cannot be dealt with within the limits of a Parliamentary Question and Answer; but, so far as the data which I have enables me to make a calculation, there is an advantage of about 2s. 3d. in favour of the home manufacturer of cocoa powder upon each hundredweight of cocoa beans dealt with, while, in the case of chocolate confectionery of various kinds, there is a similar and often greater advantage, which may, as regards some classes of goods, even reach the higher figure quoted. On the other hand, there is no drawback upon the export of cocoa manufactures.
  MR. AUSTEN CHAMBERLAIN: I beg to ask Mr. Chancellor of the Exchequer whether he will lay upon the Table the Report of the Chairman of the Board of Customs, dated 5th October, 1904, on the working of the cocoa and chocolate duties.
  MR. ASQUITH: The Paper referred to is a confidential Memorandum prepared for Departmental purposes. I am not prepared to lay it on the Table.
  MR. AUSTEN CHAMBERLAIN: Is the right hon. Gentleman aware that although the Paper is headed "Confidential" as is every Report by the Chairman of of the Board of Customs to the Chancellor of the Exchequer, the late Chancellor of the Exchequer was quite prepared to lay it on the Table if desired.
  MR. ASQUITH: I think it would be a very bad precedent, and I do not intend to set it.

  Imported Colonial Spirit
  MR. MITCHELL-THOMSON: I beg to ask Mr. Chancellor of the Exchequer whether imported Colonial spirit for methylating is subject to an adverse differential treatment to the extent of 5d. as compared with Home spirit; and, if so, what is the reason for such differential treatment.
  MR. ASQUITH: Colonial spirit, like all imported spirit, is subjected to a Customs Duty which exceeds the Excise Duty on British spirit by 4d. a gallon in the case of rum and brandy, and by 5d. in the case of other spirit. The reason for the difference between the Customs and Excise Duties is that the Excise Duty represents only a part of the total burden imposed on British spirit. It does not cover that portion of the burden which results from revenue restrictions on the manufacture of spirit, and, as this portion of the burden has to be borne by British spirit, whatever the purpose for which it may be used, equality of treatment requires that imported spirit should pay the difference between the two duties, whatever the purpose for which it may be used. Accordingly, imported spirit used for methylation is charged the difference, which on Colonial spirit would be 4d. in the case of rum or brandy, and 5d. in case of other spirit.

  Duty on Tobacco.
  MR. DAVID MACIVER: I beg to ask Mr. Chancellor of the Exchequer whether the duty payable on unmanufactured tobacco is considerably less than the duty charged on the product of the same quantity of raw material if imported in a manufactured state as cigarettes or cigars.
  MR. ASQUITH: Yes, Sir. It has always been held that cigars cannot be manufactured in this country to compete with foreign cigars, and that the additional duty is, therefore, not a protective duty, but a luxury tax. The principle was extended to cigarettes by my immediate predecessor as Chancellor of the Exchequer, the right hon. Member for
  1144
  East Worcestershire, who, if I remember rightly, argued the case for the extension upon purely free trade grounds.
  MR. DAVID MACIVER: I beg to ask Mr. Chancellor of the Exchequer whether, as regards the kind of tobacco ordinarily consumed by working men, the amount claimed by the Exchequer in respect of Customs Duty largely exceeds the value of the article; and whether, in the case of a three penny packet of tobacco such as working men ordinarily smoke, the Customs Duty now collected amounts to about 2½d. the actual value of the tobacco being only about one halfpenny.
  MR ASQUITH: Yes, Sir.

  Anthrax.
  MR. JOWETT: I beg to ask the Secretary of State for the Home Department whether, in view of the fact that during the six months ending 20th March last there were fifty-four cases of anthrax reported to his office, fourteen of which were fatal, and that in eight of the fifty-four cases his officers have failed to ascertain the kind of material upon which the person attacked had been engaged, he can see his way to make such arrangements as will in future enable him to inform himself as to the materials which have carried the infection.
  THE SECRETARY OF STATE FOR THE HOME DEPARTMENT (Mr. GLADSTONE,): I understand the hon. Member refers to some statistics of anthrax with which I recently furnished him. In the eight cases in which a return was made of "material not ascertained," the reference intended was to the material by which the infection was actually conveyed, and not to the material on which the worker was engaged. It is sometimes impossible—especially in the case of miscellaneous occupations such as that of dock labourer, carter or the like, in which six out of the eight cases occurred—to trace the source of the infection; a mere entry of the material on which the worker had been engaged would not serve any useful purpose and might be actually misleading. Every effort, of course, is made by the Medical Inspector of Factories to trace the source of infection in each case, but

  1145
  it is difficult to see what further arrangements, especially in the case of miscellaneous employments such as those mentioned, can be made to ensure a knowledge of the particular material which has carried the infection. I should add that the figures quoted by the hon. Member refer to a period of nearly nine months, and not six as stated in the question.
  MR. JOWETT: I beg to ask the Secretary of State for the Homo Department whether, in regard to all future cases of anthrax which occur at seed-crushing, oil-extracting, and bag-making works, he will endeavour to ascertain the kind of material from which the bags used in seed-crushing and oil-extraction operations have been made and, in the case of bag-making works, what materials are being used.
  MR. GLADSTONE: Yes, Sir, this will be done.

  Birmingham Betting Prosecution.
  *CAPTAIN FABER: I beg to ask the Secretary of State for the Home Department whether he is aware that on Friday, 12th April, a soldier, by name Joseph Latham, on furlough from India, was arrested in Birmingham for handing two papers to a man, who was not a bookmaker but a greengrocer, and that this soldier was marched through the streets between two policemen, although he was in His Majesty's uniform; and will he state what reparation has been made, considering that the stipendiary dismissed the case.
  MR. GLADSTONE: I am informed that Latham was found giving two packets containing money and names of horses to a well-known bookmaker whom the police were watching for the purpose of taking proceedings under the Street Betting Act of last session, and that he was thereupon arrested and charged tinder the Act. He was not in uniform at the time. The magistrate dismissed the charge on the ground that Latham was possibly an innocent agent. I see no reason to think that he has any claim to compensation.

  Aliens.
  SIR W. EVANS GORDON: I beg to ask the
  1146
  Secretary of State for the Home Department whether he can give the number of aliens who have arrived in this country in batches of nineteen or less, and have thus escaped examination, during the last six months; how many vessels have been concerned in bringing these people; and what is their classification according to nationality.
  *MR. GLADSTONE: I am unable to give the information asked as regards the present year, as the statistics for the last three months are not yet fully tabulated. I have, however, extracted from the complete figures for 1906, which are being prepared for publication, those relating to the last six months of that year. They are as follows:—Between 1st July and 31st December, 1906, 4,894 non-immigrant ships—i.e., ships bringing not more than twenty alien steerage passengers — brought a total of 66,636 alien passengers. After deducting cabin and exempted second-class passengers and transmigrants, there remain 11,502 alien passengers brought on non-immigrant ships. Deducting further (1) those who stated they were proceeding to a destination outside the United Kingdom, (2) those who held return tickets to the Continent, and (3) seamen, there is a total of 6,567 alien passengers on non-immigrant ships who may be said to have escaped examination by arriving on such ships. The nationalities of the 6,567 aliens were as follows:—Russians and Poles, 2,266; French, 1,691; Germans, 773; Dutch, 336; Scandinavians, 299; Italians, 267; Austrians, 240; Spaniards, 206; Swiss, 140; Belgians, 133; United States, 64; others, 152.
  SIR W. EVANS GORDON: To ask the Secretary of State for the Home Department whether he has any information that persons who have been rejected under the Aliens Act are brought into this country in small batches of nineteen or less; if not, whether he will cause inquiry to be made upon this subject; and whether any steps are taken to ascertain if persons rejected on account of contagious disease attempt to enter the country after rejection.
  *MR. GLADSTONE: I have no information to the effect suggested in the first part of the Question: and as to the

  1147
  last two sentences I do not see what steps I can take in the direction indicated, as there is no power to inspect alien steerage passengers on non-immigrant ships.
  CAPTAIN CRAIG: I beg to ask the Secretary of State for the Home Department if he can state the number of aliens landed in Great Britain during the past twelve months, and the number of skilled artisans who have emigrated from Great Britain to foreign countries during the same period.
  *MR. GLADSTONE: The total number of aliens who landed in the United Kingdom during the twelve months ended 31st December, 1906, was 560,368. This total includes aliens of every description, irrespective of the purposes for which they may have come to this country. The total number of skilled workmen recorded as leaving the United Kingdom during 1906 for non-European foreign countries was 38,600, of whom 23,245 were of British nationality. The number leaving for European countries cannot be stated.
  CAPTAIN CRAIG: Will the Government take steps to prevent the landing of these aliens to this enormous extent, and thus enable the British workman to find employment in his own country?
  *MR. GLADSTONEreferred the hon. Member to his previous Answer as throwing light on the figures last given.
  *MAJOR SEELYasked if the right hon. Gentleman, in view of the extraordinarily small number of aliens permanently remaining in this country, the great cost of administering the Act, and the hardships imposed by it on refugees, would not consider the desirability of repealing the Act altogether?
  [No Answer was returned.]

  Vaccination Exemption at Bradford.
  MR. LUPTON: I beg to ask the Secretary of State for the Home Department if his attention has been called to the case of Mr. Vincent Ward, an applicant for a vaccination exemption certificate at the West Riding Court, Bradford, when Dr. W. H. Ellis, a local practitioner, presided, and refused the application; if
  1148
  it is permissible for a medical practitioner to adjudicate in these cases; if his attention has been called to the statement of Mr. Rawson, the magistrate's clerk, that the question was whether vaccination would injure the child; and if he will take steps to remove Mr. Rawson.
  MR. GLADSTONE: I am making inquiry into this case, and I will let the hon. Member know the result, but I may point out that I have, of course, no control over a magistrate's clerk.

  Poor Prisoners Defence Act.
  MR RENDALL: I beg to ask the Secretary of State for the Home Department whether he has, as promised, communicated with Mr. Wallace, K. C. the Chairman of the London County Sessions, with regard to the latter's expression of opinion that the Poor Prisoners' Defence Act was rendered practically inoperative because legal aid could not be granted unless a prisoner disclosed a defence before the committing magistrate; and what reply the Chairman has given to his communication.
  MR. GLADSTONE: I have consulted Mr. Wallace, and have received from him a suggestion for the Amendment of the Rules under the Act. I will bring his proposal to the notice of the Attorney-General by whom the Rules are made.

  Company Subscriptions to Election Funds.
  MR. TREVELYAN: I beg to ask the President of the Board of Trade whether his attention has been called to the fact that the dock companies assisted in financing the London Municipal Society; whether he will make an inquiry into the extent and circumstances of the subscription; and whether he will take any steps, by legislation or otherwise, to prevent the recurrence of subscriptions by companies created by Act of Parliament to associations which take an active part in contested elections.
  THE PRESIDENT OF THE BOARD OF TRADE (MR. LLOYD-GEORGE,): I have been in conmunication with the London and India Docks Company, the Surrey Commercial Dock Company, and the Millwall Dock Company on the subject of my hon. friend's

  1149
  Question. I have received replies from these companies to the effect that they have subscribed, the London and India Docks Company, £100, the Surrey Commercial Dock Company, £100, and the Millwall Dock Company, £21, to the funds of the London Municipal Society. These replies, which are too lengthy for me to read hero, but which will be printed with the Votes, state in all three cases, that the Directors were not influenced by any political motive.
  The letters were as follows:—
  "London and India Docks Company,
  "Dock House, 109, Leadenhall Street,
  "London, 18th April, 1907.
  H. 4547.
  "Sir,
  "The Directors have had before them your letter of the 12th instant. They have no objection to stating that they subscribed £100 to the funds of the London Municipal Society in December last, and they are advised that under the judgment given by the Court of Appeal on the 19th November, 1906, the contribution was a perfectly legal one.
  "Their reason for giving the subscription was to aid the endeavours of the London Municipal Society to return members at the recent municipal and guardian elections pledged to economy in local administration.
  "The Company, like all proprietors of industrial undertakings in and near London, have suffered grievously from the excessive local rates levied upon them. Rates have been increasing for many years past, and there has been no remedy open to the Company in the municipality itself, for although they pay a large proportion of the rates in every locality in which their docks are situated, they have absolutely no voice in the election of the persons who spend their money.
  "The only course open to the Company, therefore, is to support reputable organisations which are found to educate voters as to the peril to them of the increase of municipal burdens, and to expose the mismanagement of particular local institutions. Acting on this principle, my directors have subscribed to the West Ham Borough Alliance and the Poplar Borough Alliance. Both of
  1150
  these alliances have been remarkably successful in the work, and it may be within the knowledge of the Board of Trade that they have been active agents in bringing to light the notorious scandals which have been the subject of recent official inquiry in these two boroughs: indeed in the case of the inquiry into the administration of the Poor Law at Poplar, the alliance was officially recognised by the Local Government Board's representative as the body chiefly responsible for proving the charges made against the guardians. In Poplar alone, as a result of the action taken by the alliance, there will Do savings in expenditure at the rate of £70,000 a year, which will be shared by the whole of the ratepayers of the borough.
  "It was because of the success acchieved at Poplar and West Ham that the Directors welcomed the efforts of the London Municipal Society to apply to those matters in which London as a whole is concerned, the same reforming energy which has been applied locally at Poplar and West Ham.
  "The Directors observe that it has been charged against the London Municipal Society that it is a political organisation. No ground for such a charge is to be found either in the rules or the statement of objects of the society. No political test for membership is imposed, and as a fact, there are persons belonging to both the Unionist and Liberal Parties amongst its members, and on the council is Sir F. Schuster, who was the Liberal candidate for the City of London at the last general election.
  "The Directors, amongt whom are adherents of both sides of politics, would certainly not continue their support to the society if they had any reason to believe that its aims were political, but no evidence has come before them to show that there has been any conduct on the part of its managers which indicates a departures from the spirit of its constitution.
  "I am, etc,
  "(Signed) J. G. BROODBANK,
  "Secretary.
  "The Assistant Secretary,
  "Harbour Department,
  "Board of Trade.

  1151
  "Surrey Commercial Dock Company,
  "Secretary's Office,
  "106, Fenchurch Street,
  "London, E. C.,
  "18th April, 1907.
  "Sir,
  "I have submitted to my directors your letter of the 12th instant, and, in reply to your enquiry as to whether or not my company have made any subscription to the London Municipal Society, I am instructed to state that in November last my company subscribed the sum of £100 to the funds of the Society.
  "In making this contribution my directors were not influenced by any political considerations. They were solely concerned, in the interests of their shareholders, to ensure the election of persons pledged to the economical administration of local affairs, with a view to obtaining some alleviation of the burden of excessive and increasing rates from which my company, in common with other industrial undertakings, has suffered severely.
  "Whilst this company contribute a very large proportion of the rates in the district in which their property is situated, they have no part in the election of the members of the bodies who make the rates, and have absolutely no control over the expenditure.
  "In these circumstances my directors, believing the London Municipal Society to be a non-political organisation, as evidenced by its constitution rules and membership, thought it right to support the society, whose objects appeared to them legitimate and desirable
  "I am, etc.,
  (Signed) "P. H. CULLIS,
  "Secretary.
  "The Assistant Secretary,
  "Harbour Department,
  "Board of Trade."
  "Millwall Dock Company,
  "Dock House, 1, Railway Place,
  "Fenchurch Street, E. C.,
  "London, 17th April, 1907.
  "Sir,
  "In reply to your letter of the 12th instant, I am instructed to say that a
  1152
  donation of twenty guineas has been given to the funds of the London Municipal Society by this company.
  "In response to your invitation to offer observations on the subject, I am further instructed by my directors (who represent both shades of political opinion) to say that they were induced to make this donation by the success which attended their efforts to expose the wasteful and extravagant policy of the Guardians in Poplar, through the medium of the Popular Borough Municipal Alliance, to whose funds an amount of £125 has been contributed from time to time by my Board.
  "My directors had noted with apprehension the steady growth in the Poplar general rates, as shown in the following table:—

  1897

  7s.

  8d.

  in the £

  1898

  7s.

  10d.

  in the £

  1899

  8s.

  7½d.

  in the £

  1900

  9s.

  1½d.

  in the £

  1901

  9s.

  4d.

  in the £

  1902

  9s.

  7d.

  in the £

  1903

  9s.

  8d.

  in the £

  1904

  9s.

  10d.

  in the £

  1905

  11s.

  8d.

  in the £

  190G

  11s.

  9d.

  in the £

  1907 at the rate of

  10s.

  7d.

  in the £

  after the Poplar Inquiry.
  "My directors were unable to secure any redress from the burden, as they had no voice whatever in the disposition of the funds to which they were large contributors, until the Poplar Borough Municipal Alliance secured the assistance of the Local Government Board, who held an inquiry into the expenditure and operations of the Guardians at Poplar with the result shown above in 1907.
  "My directors are fully satisfied that in helping to promote this public inquiry they were acting in the interests of their proprietors and of the general body of ratepayers in the borough of Poplar.
  "Encouraged by the distinct benefits which resulted from the efforts of the Poplar alliance my directors had no hesitation in contributing to the funds of the London Municipal Society, and did so in the hope and belief that the society would direct its efforts to putting a stop to the heavy expenditure of municipal bodies who, in the opinion of my directors, do not sufficiently take into consideration the burden that is being

  1153
  placed upon public and other companies through their extravagance.
  "I am further desired to say that my directors take strong exception to the suggestions which have been publicly advanced that such monies have been contributed for political purposes; their one and only object has been to effectually counteract the alarming tendency in recent years to increase the local rates.
  "I am, etc.,
  (Signed) "W. S. T. Biggs,
  "Secretary.
  "The Assistant Secretary,"
  "Board of Trade,
  "Harbour Department,
  "7, Whitehall Gardens, S. W."
  AN HON. MEMBERsuggested that the right hon. Gentleman should inquire into the action of the Glasgow Corporation in spending the ratepayers' money in promoting the Land Taxation Bill.

  Coal Export.
  MR. HICKS BEACH: I beg to ask the President of the Board of Trade what was the total quantity of coal exported from the United Kingdom in 1906, including the estimated coal equivalent of coke and patent fuel.
  MR. LLOYD-GEORGE: The total quantity was 76,788,179 tons, if bunker coal is included. Excluding bunker coal the total was 58,197,966 tons.

  Export Returns.
  MR. AUSTEN CHAMBERLAIN: I beg to ask the President of the Board of Trade whether his attention has been called to the incompleteness of the figures relating to exported manufactures in the Returns of Imperial trade given in the Statistical Abstract; why leather goods are represented in that Return as the solitary manufactured export of the British Empire; and whether he will take steps to complete the statement in future issues by the inclusion of figures relating to other manufactured commodities.
  MR. LLOYD-GEORGE: The table in the British Empire Abstract to
  1154
  which the right hon. Member alludes was originally intended to show the trade in certain staple foodstuffs and raw materials between the British Empire as a whole and foreign countries. The classification introduced in the most recent issue of the abstract under the three headings, food, raw materials, and manufactured articles, has had the unintended effect of giving a solitary position to leather in this table which, I admit, now gives a misleading impression. I shall be very glad to discuss with the right hon. Gentleman how far it is practicable to include particulars with regard to a few of the more important groups of manufactured articles, having due regard to the great labour involved in compiling the details and the want of uniformity in the Colonial trade accounts.

  Commercial Corruption.
  MR. J. M. HENDERSON: I beg to ask the President of the Board of Trade whether he is aware that, consequent upon the provisions of the Prevention of Corruption Act, 1906, and the action of various trade associations in making public the provisions thereof, offers of secret commission to agents are now being extensively circulated in this country from firms writing from abroad, the offer in some cases amounting to a, very large percentage on the amount of the order sent to the foreign firms in question; and whether he will give the matter his attention at the earliest possible opportunity.
  MR. LLOYD-GEORGE: My attention has already been called to this matter and a notice was published in the Board of Trade Journal for 21st February last in which it was pointed out that the acceptance of any such offers from foreign firms renders agents in this country liable to penalties under the Act. I trust that the efforts which I understand are being made by various associations of British traders to put an end to the practice, will be successful.

  Patent Law.
  MR. MOND: I beg to ask the President of the Board of Trade whether he can state whether Clause 10 of the Bill to amend the Law relating to Patents and Designs is at variance with any treaty, agreement, or engagement

  1155
  with any foreign country or British Possession; and, if so, what foreign countries or British Possessions.
  MR. LLOYD-GEORGE: I am advised that the provisions of the clause would not be at variance with any existing, treaty, agreement, or arrangement.

  North Eastern Signal Boxes at Hull
  MR. HUDSON: I beg to ask the President of the Board of Trade of he is aware that the hours of duty of the gate signalmen at the St. George's road and Hawthorne avenue level crossings, Hull, North Eastern Railway, are at present six turns of twelve hours' day duty and seven turns of twelve hours' night duty per fortnight, without any clear Sunday off duty; whether any inquiry has been made under the Hours Act, 1893; and, if so, can he say what conclusion has been arrived at.
  MR. LLOYD-GEORGE: Inquiry has been made in this matter, and the railway company have arranged that the gatemen concerned are to have a clear interval of twenty-four hours off duty on alternate Sundays.

  Emigration.
  CAPTAIN FABER: I beg to ask the President of the Local Government Board whether, looking at the fact that the Emigration Returns for Great Britain, which is a free trade country, amounted to 453,000 in 1904, and in Germany, which is protectionist, to only 28,000, and also looking at the destitution which exists at Woolwich owing to want of work, the Government can see their way to legislation which will safeguard our manufacturing industries, and so give more employment to those who wish for it.
  THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. JOHN BURNS,): The figures mentioned in the Question do not seem to be comparable, for whilst those relating to the United Kingdom represent the total number of passengers leaving this country for places out of Europe in 1904, and include foreign passengers and also British and Irish passengers, whether emigrants or not, the figures relating to Germany appear only to include such
  1156
  Germans as can be stated to be leaving for settlement abroad. The promotion of the legislation which would be necessary to give effect to the suggestion in the last part of the Question would not be a matter within the province of my Department, but I should have thought that the views of the present Government on the subject of any legislation having protection for its object were sufficiently well known.
  CAPTAIN FABER: Has the right hon. Gentleman no remedy to suggest?
  MR. JOHN BURNS: There are many remedies suggested for the unemployed difficulty, but the most unsatisfactory is protection.
  MR. AUSTEN CHAMBERLAIN: Can the right hon. Gentleman give us the figures for England which are comparable to the 28,000 for Germany?
  MR. JOHN BURNS: If the right hon. Gentleman will give me notice, I shall be pleased to get the best available figures.
  SIR GILBERT PARKER: Is it not the case that the emigrants for England number 34 per 10,000, and for Germany only 9 per 10,000.
  MR. JOHN BURNSsaid he was not disposed to accept those Returns. There were many other things to be taken into account.
  MR. J. M. ROBERTSON: Has the right hon. Gentleman any figures showing the ratio to population?
  [No Answer was returned.]

  Derby Union and Vaccination.
  MR. BELL: I beg to ask the President of the Local Government Board, whether he is aware that Dr. Johnson, one of the Local Government Board inspectors, has instructed the vaccination officer of the Derby Union to recommence prosecutions under the Vaccination Acts; whether he is aware that there are between 25,000 and 30,000 children unvaccinated in Derby, and if the parents of all those will also be prosecuted, and, if so, will those of the longest standing be proceeded against first and continued on in

  1157
  that order; and whether Dr. Johnson's action has the sanction of the Local Government Board.
  MR. JOHN BURNS: A new vaccination officer has recently been appointed at Derby, and Dr. Johnson acted properly in advising him as to his duties, one of which is to take all reasonable steps to put the Vaccination Acts in force. I am aware that there are large number of unvaccinated children in Derby. It is not contemplated that proceedings will have to be taken in all these cases. I understand that Dr. Johnson told the vaccination officer that he should use all possible means of persuasion to induce parents to comply with the law, and that if this failed, he should institute proceedings in a limited number of cases with a view to securing its observance. The selection of the cases would rest with the vaccination officer.

  Poor Law Expenditure
  MR. WALROND: I beg to ask the President of the Local Government Board what is the total expenditure incurred by all local bodies, excluding that on Poor Law, for the financial year 1906, or for the financial year 1905 if the figures for the former year are not available.
  MR. JOHN BURNS: The figures for the financial year 1904–5 are not quite ready. Those for the year 1903–4 show that the total expenditure of all the local authorities in England and Wales, excluding expenditure on the relief of the poor and purposes connected therewith, was £114,573,229, inclusive of £29,407,543 defrayed out of loans.
  MR. WALROND: I beg to ask the President of the Local Government Board what is the total number of municipal officers and employees of all grades, excluding Poor Law, and the total amount of salaries, wages, gratuities, etc., received by these for the year 1906, or for 1905 if the figures for the former year are not available.
  MR. JOHN BURNS: The Returns furnished to the Local Government Board do not give the information desired by the hon. Member. A Parliamentary Return will, however, shortly be published, showing the number of persons
  1158
  employed in November List by the London County Council and by the councils of County Boroughs and Metropolitan Boroughs. the remuneration of the persons employed by local authorities is often merged in the Returns in the expenditure on the purposes and undertakings in which the persons have been engaged; but the Local Taxation Returns give some particulars as to the salaries and superannuation allowances of the officers of local authorities, and I will send the hon. Member a copy of the last published summary of those Returns.

  Death from Vaccination at Harringay.
  *MR. LUPTON: I beg to ask the President of the Local Government Board if W. F. Hunt, of 64, Duckett Road, Harringay, has complained to the Local Government Board that his child, Olive Hunt, has died from the effects of vaccination, and has applied to the Local Government Board, in a letter dated 18th February, 1907, to be allowed to see a copy of the Report of the case prepared by Dr. Fletcher for the Local Government Board; and if he will order a copy of the Report to be supplied to Mr. Hunt.
  MR. JOHN BURNS: I received the letter referred to, but, as I stated in reply to a previous Question on this subject by my hon. friend, the Report of Dr. Fletcher was made for my information and is a confidential document. Consequently I could not supply a copy to Mr. Hunt.
  *MR. LUPTON: Will the right hon. Gentleman allow me to make a copy?
  MR. JOHN BURNS: Certainly not.
  *MR. LUPTON: Why is it when the quality of the staff which he supplies is impugned he keeps the reports secret?
  [No Answer was returned.]

  Indian Mail Contracts
  SIR H. COTTON: I beg to ask the Postmaster-General whether a new postal contract with the Peninsular and Oriental Steam Navigation Company is under consideration; and, if so, whether an accelerated despatch can be arranged for under which the Indian mail will ordinarily arrive in London not later than Friday morning.
  THE POSTMASTER-GENERAL (Mr. SYDNEY BUXTON,: The question of future arrangements for the Eastern mail service is under consideration; but I am not at present in a position to make any announcement on the subject.

  Education Bill.
  LORD EDMUND TALBOT: I beg to ask the President of the Board of Education when he will introduce the Bill to authorise the expenditure of public money upon the erection of new public elementary schools.
  THE PRESIDENT OF THE BOARD OF EDUCATION (Mr. MCKENNA,): The form which this legislation will take is still under consideration, and I am not in a position to say when it will be introduced.

  Royston Head Teachership.
  MR. LANE-FOX: I beg to ask the President of the Board of Education whether the grounds given by the West Riding education authority for their refusal to appoint Mr. Milnes to the head teachership of the Royston school are entirely based upon a report by the sub-committee; whether he is aware that the subcommittee consisted of two members with their clerk, not specially experienced in dealing with children or in testing the efficiency of teachers; that the total duration of their visit to Sharlston school was forty-five minutes, of which not more than fifteen were spent with the children in the school, and that not more than six questions in geography and mental arithmetic were asked of the children; and whether he will see that evidence based on such a visit of inspection shall not be allowed by the Board to outweigh the favourable reports of many Government Inspectors extending over many years, and the strong recommendation of Mr. Milne's appointment made by the Inspector specially sent by the Board to inquire into this dispute.
  MR. MCKENNA: I am unable to say whether the local education authority's decision was entirely based on the sub-committee's report, but as the sub-committee appointed representatives with the special object of visiting the school at which Mr. Milnes is employed, I have
  1160
  no doubt considerable weight was given to their report. According to my information the sub-committee did not consist of two members and their clerk, as stated by the hon. Gentleman. Two members of the sub-committee, accompanied by the county council's inspector of schools, visited the school in question. I am informed that at least forty-five minutes; was spent with the children themselves, besides the fifteen or twenty minutes spent in the school in discussion with the head master before the children assembled; I have no information as to the number of questions asked. As I have previously; stated, the jurisdiction of the Board in these cases is strictly limited to deciding whether the local education authority withheld their consent on educational grounds and no question of one report outweighing another can therefore arise.
  MR. LANE-FOX: Arising out of that Answer may I ask whether the right hon. Gentleman's attention has been drawn to the letter written by the chairman of this education committee, and appearing in the Yorkshire Post on Monday last, and whether that letter is consistent with the statement that the appointment of Mr. Milnes was refused on educational grounds?
  MR. MCKENNA: Yes, Sir. My attention has been called to that letter, and it appears to me that the strict construction of that letter does not agree with the statement made by the local education authority.
  LORD R. CECIL: May I ask whether the right hon. Gentleman conceives that the duty of the Education Department is fulfilled the moment it receives the statement of the local education authority that they had acted on educational grounds, or whether he considers they ought to ascertain whether that statement correctly represents the facts?
  MR. MCKENNA: I do think it is the duty of the Board of Education to inquire whether the statement does correctly represent the facts.
  *MR. GEORGE FABER: May I ask whether the right hon. Gentleman is still prepared to repeat the Answer given in the House last week that there

  1161
  was no shadow of doubt that the appointment was refused on educational grounds?
  MR. MCKENNA: I have no doubt the educational authority refused the appointment on educational grounds.

  Non-Provided Schools.
  LORD R. CECIL: I beg to ask the President of the Board of Education how many of the local education authorities in any of the years 1904, 1905, and 1906 spent on the non-provided schools in their districts not more than the amounts received by way of grants in respect of such schools.
  MR. MCKENNA: I have no information as to the sums spent by local education authorities upon individual schools, and, as I stated, in answer to my hon. friend the Member for Merthyr Tydvil, on Monday, separate accounts for the whole cost of individual schools, so far as I am aware, are not usually kept.
  LORD R. CECIL: Cannot the right hon. Gentleman obtain information, not in respect of individual schools, but in respect of the whole body of non-provided schools in each district?
  MR. MCKENNA: No, Sir, I am not able to do that.
  LORD R. CECIL: Can it not be obtained by means of a circular from the Education Department?
  MR. MCKENNA: No, Sir, we have no authority to demand such information from the local authorities. In fact they do not keep their account in such a way as to admit of their giving it.

  Pall Mall Improvement.
  SIR F. BANBURY: I beg to ask the Secretary to the Treasury what sums are now being expended upon the repair and redecoration of the buildings in Pall Mall recently occupied by the War Office.
  THE FIRST COMMISSIONER OF WORKS (Mr. HARCOURT,: I have been asked to reply to this Question. One portion of these buildings will be occupied for the present
  1162
  by the staff of the Director of Barrack Construction, for which there is no accommodation in the new War Office. A sum of £700 has been expended on work for this occupation. Another portion will temporarily be used by the Office of Woods during the building of new offices for that Department; but the cost of preparation cannot yet be given. The remainder of the old War Office premises in this block has reverted to the Land Revenue as Crown property at the disposal of the Office of Woods; and nothing has been expended on it on repair or redecoration since it was vacated.

  Grand Committee Rooms.
  MR. NIELD: I beg to ask the First Commissioner of Works which rooms are to be allocated for the use of Grand Committees in addition to the large Committee room now used for that purpose; and what alterations are to be made for the convenience of the Press, the public, and the Members serving upon the Committees.
  MR. HARCOURT: The large Committee room off Westminster Hall will be available, and I am considering improvements in its seating accommodation.

  Vote on Account of Provision for New Schools.
  LORD BALCARRES: I beg to ask the Secretary to the Treasury on what date it was decided to exclude from the Vote on Account the proportion of the sum of £100,000 to be voted as special provision for now schools.
  THE FINANCIAL SECRETARY TO THE TREASURY (Mr. RUNCIMAN,): No special decision was necessary, as it would be contrary to the rules governing Votes on Account to include therein any provision for a new service.

  Prescot Land Tax Commissioners.
  MR. AUSTIN TAYLOR: I beg to ask the Secretary to the Treasury if he is aware that the Land Tax Commissioners appointed under the Act of 1906 for the Prescot district of the county of Lancaster were summoned to attend a meeting at Prescot on the 11th instant to appoint the collectors for the ensuing year; that

  1163
  twenty-five gentlemen from Liverpool accordingly attended at the hour named; that on arrival they were informed by the clerk that there was no business to transact; and that two meetings had been held previously in March and April at which the clerk himself and the collectors were appointed, and to which the Land Tax Commissioners in question were never summoned; whether these meetings and the business transacted thereat are valid; and what steps His Majesty's Government intend to take to secure the proper working of the Act of 1906 and the due summoning of the Land Tax Commissioners as prescribed by that Act.
  MR. RUNCIMAN: The incident referred to appears to have been due to some misapprehension on the part of the clerk. I understand that another meeting has now been held at which satisfactory explanations were given and an amicable settlement of the difficulty effected.

  Second Class Inspectors of Inland Revenue.
  MR. SNOWDEN: I beg to ask the Secretary to the Treasury, can he say how many examinations have been held since 1st January, 1897, of supervisors of Inland Revenue, for the position of second-class inspectors of Inland Revenue; the dates on which the several examinations were held; the number of supervisors summoned to attend each examination; the number who actually attended; and the number passed at each examination.
  MR. RUNCIMAN: The Answer to this Question involves a great number of figures which, however, I can communicate privately to the hon. Member if he desires.

  Population, Revenue, and Expenditure.
  MR. ELLIS: I beg to ask Mr. Chancellor of the Exchequer whether he will cause to be issued a similar memorandum respecting the progress of population, revenue and expenditure, to that contained in Parliamentary Paper, No. 163, of Session 1896, bringing the figures down to 31st March, 1907, and excluding, if needs be, the figures for the years of war taxation
  1164
  and expenditure, which, to a certain extent, vitiate comparisons.
  MR. RUNCIMAN: The Memorandum to which my lion, friend refers contains a great mass of detail, much of which would not now probably have any very great general interest, but I will consider whether a simpler statement can be prepared embracing the more important points, and bringing the information down to the present time.

  Export of Horses to the Continent
  SIR HOWARD VINCENT: I beg to ask the hon. Member for South Somerset, as representing the President of the Board of Agriculture, if it has been possible for the Department to act upon any of the suggestions of the Royal Society for the Prevention of Cruelty to Animals as detailed by the deputation thereof, received upon 15th January 1907, in the matter of the export trade to the Continent of old and decrepit British horses, so as to minimise as far as possible the suffering and cruelty involved in the traffic.
  SIR EDWARD STRACHEY: The suggestions made are receiving careful attention, and we have called for reports on the subject from our inspectors, but I am not in a position at present to make any further statement in the matter.

  Anthrax.
  MR. JOWETT: I beg to ask the hon. Member for South Somerset, as representing the President of the Board of Agriculture, whether, on all future occasions when an outbreak of anthrax among cattle is reported, he will inquire whether oil cake has been used in feeding the infected cattle; and, if so, whether bags made from dangerous wool have been utilised at any stage in the manufacture of such oil cake, and, also, where bags of the description referred to have been used, the kind of material from which the bags have been manufactured.
  SIR EDWARD STRACHEY: It is already our practice, when anthrax is reported, to ascertain whether artificial feeding stuffs, including oil cake, have been used. Where necessary, samples of

  1165
  the feeding stuff, and of the bags in which it is contained are taken for experimental investigation. Up to the present, infection has not been definitely traced in any case to the material of which the bags are made.

  Dumbarton Sewerage.
  MR. R. DUNCAN: I beg to ask the Secretary for Scotland whether the Local Government Board in effect, ordered the conversion of the domestic sanitary system of the burgh of Dumbarton, as stated by the Provost before a Parliamentary Committee on 8th May, 1906; whether he is aware that the conversion referred to has resulted in the domestic sewage of over 20,000 inhabitants being discharged into the tidal pools of the River Leven without purification of any kind; and whether, in view of the condition of the river, he will insist upon such proceedings being taken as will render the conversion of the sewage system harmless to the natural purity of the river.
  THE SECRETARY FOR SCOTLAND (Mr. SINCLAIR,): In 1903 the Local Government Board pressed the local authority to take steps to remove certain nuisances. I understand that the local authority have also on hand the extension of all outlets into the river so as to prevent the deposit of sewage on the shores above low water mark. When those have been completed it is believed that a great improvement will be effected in the condition of the river bed.
  MR. R. DUNCAN: Is the Government aware, as a reason for pressing action in this matter, that the City of Glasgow is expending about £2,000,000 sterling for the purification of the River Clyde, and that the neglect of the purification of the River Leven may render this expense nugatory?
  MR. SINCLAIR: I am aware of that.

  British Fishermen on Foreign Trawlers.
  MR. SUMMERBELL: I beg to ask the Secretary for Scotland if he is aware that a number of Grimsby fishermen have been summoned to appear at Elgin; that such prosecution has been instituted by the Scottish Fishery Board for alleged contravention of the local Scottish fishery regulations in vogue in
  1166
  the Moray Firth; and, if so, whether he is aware that these men occupied subordinate positions on board of the trawlers and took service on board with the sole desire of earning an honest livelihood, and that it has always been recognised by them that, being engaged on these boats with a captain superior to them, they were amply protected from interference under the Scottish regulations, and that the vessels on which the defendants were engaged were none of them within the three mile limit, some of them being from ton to twelve miles from low-water mark; and whether, in view of all these circumstances, he will use his best endeavours to have such prosecution set aside.
  MR. SINCLAIR: The facts regarding intended prosecutions are as stated by the hon. Member. The policy of the Government to proceed against British subjects engaged in illegal trawling has been already intimated to the House, and I am unable to adopt the course suggested in the Question.
  MR. STANLEY WILSON: May I ask if the right hon. Gentleman knows that the men mentioned in the Question were heavily fined for being employed on foreign trawlers?
  MR. SINCLAIR: They were fined, not for being found on foreign trawlers, but for breaking the laws of their own country.
  SIR GEORGE DOUGHTY: Is the right hon. Gentleman not aware that the persons fined yesterday were employed on foreign trawlers?
  MR. SINCLAIR: That is so, and the responsibility rests with those who employed them.
  MR. STANLEY WILSON: May I ask whether it is the intention of the Government to allow English fishermen to be heavily fined and imprisoned for doing what foreign fishermen have the right to do?
  THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Sir H. CAMPBELL-BANNERMAN,): The intention of the Government is to compel obedience to the law.
  SIR GEORGE DOUGHTY: Is it an illegal act for an Englishman to serve on a foreign ship?
  SIR. H. CAMPBELL-BANNERMAN: I do not think it is, but it is an illegal act for him to go into the Moray Firth and break the law of Scotland.
  SIR GEORGE DOUGHTY: But foreign trawlers are doing that daily, and these men are employed on foreign trawlers.
  MR. STANLEY WILSON: May I ask if the House is to understand that the Government is in favour of giving preference to foreign over English fishermen?
  [No Answer was returned.]

  Irish Board of Works.
  MR. DELANY: I beg to ask the Secretary to the Treasury whether, in view of the statement made from the bench by the chief magistrate of the city of Dublin as to the character of the Board of Works, which was not refuted by the Board, will he ask the Board of Works why this matter was allowed to pass unnoticed, having regard to their minute dealing with the article in the Freeman's Journal of the 16th November last, relative to their in competency and the bigotry of Mr. Williams.
  MR. RUNCIMAN: The Board of Works inform me that they have no knowledge of the statement alleged to have been made by the chief magistrate of the city of Dublin as to the character of the Board of Works. In any case it is not the custom of Government Departments to reply to attacks made on them by outside bodies, or individuals, but it is within their discretion to take such steps as may appear necessary to maintain the discipline of their Department.

  Carrickfergus Town Lands.
  MR. J. MACVEAGH: I beg to ask Mr. Attorney-General for Ireland whether his attention has been called to the fact that certain landowners at Carrickfergus, county Antrim, are endeavouring to arrange the purchase of the head-rents paid to the town Commissioners of Carrickfergus; whether he is
  1168
  aware that these lands ware vested by Royal Charter from Queen Elizabeth in the town commissioners, and were inalienable; that under the Charter the occupiers or leaseholders cannot lease, let, or sell the lands without the sanction of the council; and whether inquiries will be made to ascertain if these are Crown lands or municipal or private property.
  THE ATTORNEY-GENERAL FOR IRELAND (Mr. CHERRY,: I am informed by the town clerk of Carrickfergus that one application only has been received from a landowner at Carrickfergus for the purchase of head rents payable to the town commissioners. The offer was ultimately refused. The lands are vested in the town commissioners by Royal Charter of Queen Elizabeth confirmed by Charters of 7th James I. and 10th James 1., but I understand the Charters contain no restriction upon alienation. The former corporation made grants for ever, and leases for long terms of years which did contain clauses restricting alienation, but the urban, district council in whom the lands are now vested have been advised by counsel that such clauses when contained in fee-farm grants are inoperative and void. They are, I believe, valid when contained in leases for terms of years, except so far as they are affected by the terms of the Land Act, 1903. I do not see any necessity for an inquiry into the matter, as it has not been suggested that the town commissioners are in any way acting contrary to their duties towards the public.

  Irish Post Office Stores Department.
  MR. MEAGHER: I beg to ask the Postmaster-General whether it is contemplated to establish a branch of the Controller of Stores Department in Dublin; and, if so, whether the existing storesmen and stores clerks at the local depots in Cork, Belfast, and Dublin will have the option of being transferred to the new branch as they desire, or is it the intention to import a staff from Great Britain and appoint an Englishman to the control of the new branch at Dublin, in accordance with the usual practice of the Post Office in Ireland nowadays?
  MR. SYDNEY BUXTON: At present the officers in charge of postal stores in

  1169
  Ireland are under the control of the Secretary in Dublin, and those in charge of telegraph stores are officers of the engineer-in-chief in London. It is intended, on the ground of administrative convenience, to unite the two branches and to place the stores department in Dublin under the control of the Controller of Stores. The details of the rearrangement have not yet been settled, but due regard will be had to the claims of the existing staff.

  Welsh Church Commission.
  MR. D. A. THOMAS: I beg to ask the Prime Minister whether his attention has been called to the fact that several members of the Welsh Church Commission have ceased to attend the meetings of that body; whether any number has tendered his resignation; and if he can give an assurance that neither the resignation of members nor the differences that have arisen between members as to the meaning and scope of the reference will delay the Report of the Commission, or postpone the introduction of the promised Disestablishment Bill next session.
  MR. REES: I beg at the same time to ask the Prime Minister whether any member or members of the Welsh Church Commission have resigned; and whether any steps can be taken to hasten the proceedings of this Commission, in view of the unanimity of Welsh constituencies upon the subject with which the Commission has to deal.
  SIR H. CAMPBELL-BANNERMAN: I am sorry to say that my hon. friend the Member for Mid-Glamorganshire, together with Professor Jones and Principal Fairbairn have tendered their resignation to the King. I can, of course, give no assurance as to the progress which will be made by a body over which I have no control. But I have no fear that any unnecessary delay will occur.

  Irish Licensing Trade.
  MR. FETHERSTONHAUGH: I beg to ask the Prime Minister if he is aware that Ireland, with a population slightly and wealth largely below that of Scotland, has about 7,000 more public houses; that, owing to the decision in Clitheroe's case, the
  1170
  justices in Ireland have no power to refuse renewals of licences on the ground of there being too many public houses, and that the Licensing Act of 1904 does not apply to Ireland; and will he consider the desirability of immediate legislation on the subject to meet the need of Ireland for reduction of the number of her licensed houses.
  SIR H. CAMPBELL-BANNERMAN: The facts as stated in the hon. Member's Question are, I believe, substantially correct. With regard to the last paragraph of the Question I would refer the hon. Member to an Answer I gave him upon this subject on Wednesday last.†

  Loans for School Buildings.
  MR. STUART WORTLEY: I beg to ask the Prime Minister whether, in view of representations that have been made to the Local Government Board in favour of granting longer terms for the repayment of loans contracted by municipal and other authorities for the erection of school buildings, he will arrange for the Local Government Board Vote being taken first on some early Thursday.
  SIR H. CAMPBELL-BANERNMAN: I will communicate with my right hon. friend the President of the Local Government Board, but I understand that there are difficulties in the way of taking this Vote on an early Thursday.

  Standing Order 18.
  MR. NIELD: I beg to ask the Prime Minister whether, having regard to the amount of work which, under the proposed amendment of the Standing Orders, will devolve upon the Standing Committees, he will consider the advisability of amending the Standing Order No. 18 so as to apply its provisions, either wholly or in some modified form, to proceedings before such Committees.
  SIR H. CAMPBELL-BANNERMAN: I hardly see the connection between the work that will be done by the Standing Committees and the unruly conduct of Members which the hon. Member anticipates. I should have thought that the more work they had to do the less unruly
  †See (4) Debates, clxxii., 753.

  1171
  they would be. Should the necessity unhappily arise, I should, however, be prepared to consider the hon. Member's suggestion, but the Standing Order to which he refers is not a very convenient weapon seeing that it broke in the hand of the Minister who was forging it and has remained ever since in a truncated condition.

  Empire Day.
  CAPTAIN CRAIG: I beg to ask the Prime Minister whether His Majesty's Government will favourably consider the advisability of ordering the British flag to be hoisted where possible on all Government buildings throughout Great Britain on future Empire days.
  SIR H. CAMPBELL-BANNERMAN: I have already given this matter my consideration, and I do not think it advisable that any order should be issued with regard to the hoisting of flags on Government buildings on the day in question.
  CAPTAIN CRAIGasked if there was any objection to the hoisting of the flag on Government buildings on Empire day.
  MR. MYER: What is Empire day? How long has it been established?
  [No Answer was returned.]

  Woolwich Arsenal Discharges.
  CAPTAIN CRAIG: I beg to ask the Prime Minister whether, in view of the distress caused by the discharges from Woolwich Arsenal and Dockyard among the working classes and shopkeepers, he will arrange to take Vote 8, Ordnance Establishment, before the end of this month, so as to afford an opportunity to the House of discussing the whole matter before any further discharges take place.
  SIR H. CAMPBELL-BANNERMAN: I understand that the consideration of this Vote would afford no opportunity for discussing the question of these discharges; but in any case the causes of the reduction of the Arsenal Staff are so well known that it seems to me doubtful whether a discussion would be of any benefit. As my right hon. friend the Secretary for War, has informed the House, they are due to general reductions
  1172
  in naval and military expenditure and not to any unusual allocation of Government orders, and everything that legitimately can be done will be done to temper the hardship which they entail.

  Indian Budget.
  DR. RUTHERFORD: I beg to ask the Prime Minister whether he will allot two days to the discussion of the Indian Budget in order to enable the Secretary of State for India to reply to the criticisms and suggestions of hon. Members.
  SIR H. CAMPBELL-BANNERMAN: I am afraid that in view of the amount of work which has to be got through it may be quite impossible to give more than one full day to the Indian Budget.
  MR. REES: Will the right hon. Gentleman give us a full instead of a half day as before?
  SIR H. CAMPBELL-BANNERMAN: I will do my best.

  Malta.
  SIR F. BANBURY: I beg to ask the Prime Minister if it is proposed to appoint a civil governor for Malta; and by what department the appointment will be made.
  SIR H. CAMPBELL-BANNERMAN: It is not proposed to alter the present arrangements by which the Governor of Malta is appointed.

  The Government and the Lords.
  VISCOUNT TURNOUR: I beg to ask the Prime Minister whether he will, before Whitsuntide, make an announcement to the House on the subject of the unfortunate differences which have arisen between the two Houses, mentioned in His Majesty's most Gracious Speech.
  SIR H. CAMPBELL-BANNERMAN: I hope so, Sir, but I shall be better able to answer the Question in a week's time.

  Grand Committees.
  MR. STANLEY WILSON: I beg to ask the Prime Minister whether it is his intention to have official reports made of all proceedings taking place on the four new Grand Committees, and having such

  1173
  reports published for the use and benefit of all Members of the House.
  SIR H. CAMPBELL-BANNERMAN: Official Reports in the case of the Proceedings of the House itself, as well as of the Standing Committees, are confined to what is done and do not extend to what is spoken. We do not contemplate any alteration of this practice.
  MR. STANLEY WILSON: How will Members of this House be able to gain information as to what takes place upstairs?
  SIR H. CAMPBELL-BANNERMAN: In the way they have done in past years.

  Chamber of Commerce and the Colonial Premiers.
  MR. FELL: I beg to ask the Prime Minister if his attention has been called to the resolution passed on the 15th March by the Glasgow Chamber of Commerce to send cordial greetings to the Colonial Premiers and to express the opinion that commercial union throughout the Empire could be most readily and advantageously established on a mutual preferential basis; and whether this resolution, and the other similar resolutions by these chambers, which represent the commerce of the country, will be specially considered by the Government.
  SIR H. CAMPBELL-BANNERMAN: All expressions of public opinion that may reach His Majesty's Government will be duly considered.

BUSINESS OF THE HOUSE.
SIR H. CAMPBELL-BANNERMANstated that the business next week would be, provisionally, the Budget Resolutions on Money, the Army Bill on Tuesday, and the Budget Resolutions or Bill on Wednesday.
MR. A. J. BALFOUR: I take it the right hon. Gentleman proposes to follow the ordinary course tonight, and to restrict the Resolutions taken by the Chancellor of the Exchequer to those necessary for the public service, reserving the general discussion till a later day.
SIR H. CAMPBELL-BANNERMAN: The ordinary practice will be followed.

SELECTION (STANDING COMMITTEES).
SIR WILLIAM BRAMPTON GURDONreported from the Committee of Selection; That they had discharged the following Members from the Standing Committee on Trade (including Agriculture and Fishing), Shipping, and Manufactures: Mr. Everett and Mr. William Johnson; and had appointed in substitution: Mr. Lupton and Mr. John Johnson.
Report to lie on the Table.

NEW BILLS.
  CONVICTS' D1VORCE BILL.
  "To entitle the wives of convicted persons, sentenced to seven years imprisonment and upwards to Divorce," presented by Mr. Bottomley; to be read a second time upon Friday, 26th April, and to be printed. [Bill 162.]
  TOWN TENANTS (ENGLAND AND WALES) BILL.
  "To amend the Law relating to Town Tenants in England and Wales," presented by Mr. Walker; supported by Mr. Rendall and Mr. Wedgwood; to be read a second time upon Wednesday, 8th May, and to be printed. [Bill 163.]
  RIGHTS OF WAY (SCOTLAND) (No. 2) BILL.
  "To amend The Local Government (Scotland) Act 1894, with regard to Rights of Way," presented by Mr. Munro Ferguson; supported by Sir Thomas Glen Coats; to be read a second time upon Monday, 29th April, and to be printed. [Bill 164.]
  PATENTS AND DESIGNS (CONSOLIDATION) BILL.
  "To consolidate the Enactments relating to Patents for Inventions and the Registration of Designs and certain Enactments relating to Trade Marks," presented by Mr. Kearley; to be read a second time upon Monday next, and to be printed. [Bill 165.]
  HARBOUR AUTHORITIES (IRELAND) BILL.
  "To fix and regulate the franchise for the election of the members of Harbour Authorities in Ireland," presented by Mr. Joseph Devlin; supported by Mr. T. W. Russell, Mr. Kettle, Mr. Mooney, Mr. M'Killop, Mr. Clancy, Mr. Ramsay Macdonald, and Mr. Crooks; to be read a second time upon Monday, 6th May, and to be printed. [Bill 166.]
  BUSINESS OF THE HOUSE (WAYS AND MEANS.)
  Ordered, That the Committee of Ways and Means have precedence this day of the Business of Supply.—(Sir H. Campbell-Bannerman.)
  BUSINESS OF THE HOUSE (WAYS AND MEANS).
  Ordered, That the Proceedings of the Committee of Ways and Means, if under consideration at Eleven o'clock this night, be not interrupted under the Standing Order (Sittings of the House).—(Sir H. Campbell-Bannerman.)

  WAYS AND MEANS (COMMITTEE).
  (In the Committee.)
  [Mr. EMMOTT (Oldham) in the Chair.]

  THE BUDGET STATEMENT.
  *THE CHANCELLOR OF THE EXCHEQUER (Mr. ASQUITH,): Mr. Emmott, as I am afraid I may have to make a somewhat considerable draft on the patience of the Committee in dealing with the present and the future, I shall content myself, and I will ask the Committee to be content, with a very brief, though, I hope, not wholly perfunctory, review of the past. The financial year which closed on March 31st was, in many ways, a remarkable one. Tried by all the ordinary tests, the trade of the United Kingdom, both at Home and over the sea, has rarely been more active or more flourishing. Nor was this prosperity confined to ourselves. It was shared, in greater or less degree, by almost all the producing countries of the world. To these generally favourable conditions there has been one prominent exception,
  1176
  the market for stocks and securities. Owing to causes of which I shall have to speak later on, there has been, especially in the later part of the year, a monetary stringency which looked at one time as though it were going to put a severe strain on the machinery of credit. It has been, from the financial point of view, in many ways, a year of surprises; and, perhaps, there has been nothing in it, superficially at least, more surprising than that the balance to the credit of the national account, which a year ago I estimated as likely to be somewhere between £300,000 and £400,000, was found, when the account was closed on March 31st, to be no less than £5,399,000. I have been the object of much misdirected congratulation in regard to the unforeseen dimensions of this enormous sum by people who do not understand the vital difference to the Chancellor of the Exchequer between the realised balance of one year and the estimated surplus of the next. Over the former, the realised balance of the past year, unless he chooses to ask Parliament to suspend the law, he has absolutely no control. It goes automatically to the Old Sinking Fund, and can only be legally applied to the redemption of debt; and as, moreover, any substantial excess in the realised over the estimated value is, or ought to be, the result of more or less accidental circumstances, its abnormal proportions afford little or no ground for anticipating a similar result in the coming year.

  RESULTS OF PAST YEAR.
  My first duty to-day is to explain how it is that a balance so largely beyond my expectations has been obtained. On the one hand, the Exchequer receipts were more than I expected by £2,059,000. On the other hand, the Exchequer issues were less than I expected by £3,006,000. These two items, added to the £334,000 which I allowed as a margin for the year, bring up the total I mentioned a moment ago to £5,399,000. Hon. Members will see from the statement in their hands that the large decrease on the expenditure side was entirely due to savings by the spending departments and mainly in the Army. The actual savings on the estimated expenditure of 1905–6, the year (for which we were not responsible) which had not been anticipated by March 31st, 1906,

  1177
  were £881,000, and the actual savings on the estimated expenditure for 1906–7, which were anticipated by the close of the financial year, and in respect of which no issues were made, were £1,150,000, making together for the Army a total of £2,031,000. On the revenue side the increase is due almost entirely to three items, in no one of which could its extent have been reasonably foreseen. The first of these comes under Customs; the coal duty, which during the last seven months of its life, April to November, produced £1,495,000, or £345,000 above the estimate, which was based on the highest yield of previous years. That was due to a time of very exceptional activity in the coal export trade, which was stimulated to some extent by strikes and by a shortage of supply in the French and German markets. The second item is the estate duties, which, in consequence of the falling in of a number of abnormally large estates, produced a record yield of nearly £1,200,000 in excess of the estimate. The third item, coming under the heading of "Miscellaneous," is the Mint, the exceptional profits of which are responsible for nearly the whole of the large increase of £441,000 under that head. This is such an unusual circumstance that I ought to say a word about it. The amount payable into the Exchequer under this head consists of the profits on the coinage of silver and bronze token coins, less the sum required to defray the working expenses of the Mint. For some years past the Exchequer receipts from this source have been steadily declining. In 1901–2 they were as much as £595,000. In 1903–4 they had sunk to £174,000, in 1904–5, to £44,000, and in 1905–6 they were as low as £26,000. The main cause of that heavy and progressive decline was that during the period of the South African War there had been a very active demand for coinage, which caused the supplies to become redundant in slacker years. Hense for the past two years there had been comparatively little coinage of new silver, as it was possible to meet the demands merely by the recoinage of worn silver when withdrawn, and these recoinages, of course, yield the Mint no profit, but rather a loss, as the coins have to be made up to standard weight before they are reissued. A year ago it was obvious that the turning point of the
  1178
  depression had been reached, and accordingly, in my Budget of last year, the Mint raised their estimate of receipts to £150,000. The result has far exceeded anticipations. The receipts have actually been £535,000. I am informed that the increase results from a revived demand all round, of which, no doubt, the activity in trade is the chief cause; but it is partly due to the exceptional Colonial demand, the Colonies which have been chiefly responsible for the increase being West Africa and Australasia. Another special contributory cause was the general election, to provide for the various requirements of which half a million of silver was taken. In view of these considerations, it was thought prudent to reduce the estimate to £201,000 for next year. So far, I have been dealing with exceptional and unforeseen causes of increase.

  REVENUE RETURNS.
  I now turn to the Revenue returns, as a whole. I cannot say they anywhere exhibit very great elasticity. In some respects, in view of the undoubted prosperity of trade, they are distinctly disappointing. As regards dutiable articles of consumption, tea and sugar have in each case very slightly exceeded the Budget estimate. For sugar there has been throughout the year a quiet and steady market, with an even level of prices, on the whole favourable to the consumer. The reduction of the tea duty by one penny was followed by an increase in the consumption of 4,500,0001bs. The year in tea has been a record one as regards imports, exports, and consumption. The great increase throughout the world in the demand, particularly for Indian teas, has raised the price, but there is little reason to doubt that but for the reduction of duty there would have been a still higher rise. Tobacco has not quite realised my expectations. Now I would say one word on what is really a more interesting item to the majority of the members of the Committee—the alcoholic group, in which there has been since 1899, as I pointed out last year, a progressive and formidable decline. Speaking strictly for the moment from the point of view of the Chancellor of the Exchequer, I am glad to observe that there are at last signs of a slight, but definite, reaction. The Excise receipts on beer and domestic spirits have exceeded the estimate

  1179
  by £150,000; the Customs receipts on wine by £60,000; and on foreign spirits by no less than £435,000, As compared with the actual receipts of 1905–6, the progress of the whole group shows in 1906–7 an increase of £494,000. The income-tax brought in a little more than the estimate. Our other two sources of revenue in addition to those with which I have dealt—namely, stamps and the Post Office—have fallen short of my expectations. The decrease in stamps of £200,000 is entirely attributable to the Stock Exchange and the shrinking in value of the securities which are there marketed. The receipts from deeds, bills of exchange, and companies' capital duty all show a very satisfactory increase. The check which has occurred to the normal growth of the Post Office revenue is more difficult to explain. The year 1905–6 was a year of unbounded prosperity for the Post Office; the receipts exceeded those of the previous year by over a million and were nearly half a million higher than the estimate which had been formed of them. In the four years preceding 1905–6 the average annual increase of the Post Office revenue was £670,000. For the year 1906–7 the estimated increase after allowing for the concessions promised in the Budget was £735,000; the increase actually realized was only £415,000. The causes to which the Post Office authorities attributed this comparative failure—for it is only comparative, not real—were, first, the less expansion in the demand for picture postcards, which have recently been a growing source of revenue, and secondly, the effect of the telephone in supplanting communication through the post. A great many people, particularly within the limits of the same town or district, who used to communicate by post, now speak through the telephone, and the revenue to that extent suffers. The third cause to which this comparative failure is attributed is the less rapid growth of revenue from telephone trunk lines. I ought to add the non-recurrence of a general election, as the general election largely stimulated postal revenue.
  If hon. Gentlemen will now turn to the table showing the comparative revenue raised by the State for the year 1906–7 and the previous year they will realise that the revenue with respect to the Exchequer is not the only
  1180
  revenue for which the Chancellor of the Exchequer is responsible. He has also to make payments to the Local Taxation Account, which amounted in all for the year 1906–07 to £10,222,000. Of this there was derived from the surtax on beer and spirits £1,416,000; Excise licences, £4,122,000; and estate duties, £4,684,000. If you add this money to the Exchequer account of £144,814,000, it makes a total of £155,036,000. If for the moment we confine our attention to the revenue raised from taxes, adding the local taxation revenue to that which goes to the Exchequer, we shall see that instead of being, as would appear from the Table No. 2, only £119,830,000, the revenue receipts from taxes would be £130,052,000. I had also to provide during the year for capital expenditure amounting to £5,975,000, for which we borrowed £5,555,000, the difference being, made up out of balances. The total amount which had to be provided in the year was thus £160,591,000.
  Another table (to complete the account for the year) shows the Exchequer balance-sheet. We began the year with an Exchequer balance of £10,451,000, and ended with a balance of £6,932,000. I ought to explain how the difference was made up. The balance was strengthened by a surplus revenue this year of £5,399,000. It was depleted by the issue of the old sinking fund of the previous year to the amount of £3,466,000; by a capital expenditure which was issued in excess of what was borrowed in the year amounting to £420,000; by some small sums £32,000; and then by the rather important item of Treasury bills, temporarily paid off under the Act of last year, amounting to £5,000,000. We took power in the Act of last year to do what previously we could not have done—namely, in the first quarter of the year, when our balance is large, not to renew the Treasury bills we otherwise should have renewed. We were previously in the ridiculous situation of going into the market to borrow money in connection with Treasury bills when the balance at the Exchequer was more than sufficient to meet our requirements. Therefore, we took power last year temporarily to drop those bills, and there has been a considerable saving in interest. For the moment the Exchequer balances are

  1181
  reduced to that extent. That is all I need say in reference to the finance of last year.

  ESTIMATED EXPENDITURE OF CURRENT YEAR.
  Now I come to the current year. First I will deal with the estimated expenditure. An addition of £500,000 to the new Sinking Fund was peculiar to last year, and is not included in the expenditure which the present Budget has to provide. The figures are familiar to hon. Members. I will not go through them except to note that the estimated balance out of revenue assigned to local taxation is £10,045,000. The figures exhibit total reductions over the estimated expenditure of the previous year of £1,664,000. I hope that reduction will be continuous and progessive. It is, in fact, considerably greater than it appears to be, because we have borne on the Army and Navy Votes for the current year sums amounting to £1,019,000, which under the pre-existing system would have been borrowed and charged to capital account. The real reduction, therefore, on the expenditure is £2,683,000. The main item of increase is in the Civil Services, and it is attributable to a large extent to the automatic growth in the cost of elementary education. As I have mentioned, £10,045,000 is assigned out of revenue to local taxation. The estimated capital expenditure for the year is £3,850,000. The total provision for the year is thus on all these accounts £154,652,000.

  ESTIMATED REVENUE.
  Now I come to the estimated revenue of the country. In regard to that, it is to be remembered that next year is leap year, will have one less Sunday than the past year, and contains no Eastertide. That makes a serious difference to the Exchequer, because it means a gain of two working days. On the other hand, we have lost the coal duty which we had for seven months during the past year, and we have lost the extra penny of the tea duty which was in force for the first six weeks of the last financial year. Perhaps it will be convenient if I give the figures and then make such comments as I have to make. Customs, £31,740,000, showing a diminution, owing to the causes I have mentioned, of £1,190,000; excise, £30,600,000, an increase of £250,000;
  1182
  estate duties, £13,600,000, a diminution (because we cannot reckon on a continuance of this abnormal mortality among the very rich) of £800,000; stamps, £8,000,000, a small increase of £50,000; land tax, £700,000, house duty, £1,900,000, a decrease in the former, and an increase in the other which practically balance one another; and then the important item of property and income-tax, £32,500,000, or an increase of £900,000 on the amount received last year. That gives a total estimated tax revenue of £119,040,000, or a diminution as compared with the tax revenue of last year of £790,000. Then I come to the non-tax revenue—Post Office, £17,600,000, an increase of £430,000; telegraphs, £4,400,000, an increase of £145,000; Crown lands, £500,000, a diminution of £20,000; receipts from Suez Canal snares, £1,100,000, an increase of £2,000; and miscellaneous, £1,550,000, a decrease of £391,000, which I have already explained in dealing with the Mint. The total non-tax revenue is estimated to be £25,150,000, or an increase of £166,000 as compared with the preceding year. Adding these figures together, you get a total Exchequer revenue of £144,190,000, or a diminution as compared with the preceding year of £624,000.

  CUSTOMS AND EXCISE.
  The estimates of Customs and Excise have been framed after making what seems a safe allowance for the increased spending power of the consuming classes. There is an exceptionally large increase in the income-tax, no less than £900,000, partly due to the early date of Easter having delayed the collection this year and thrown an unusual proportion of the receipts for 1906–7 into 1907–8, and it is partly due to the fact that two good years now come into the three years' average on which the income-tax returns are made up. The other items call for little remark except the item "Miscellaneous," which I have already explained, and the estate duties, a most uncertain, element, which we have put at £13,600,000, £400,000 in excess of the last Budget Estimate and £800,000 behind the actual receipts. This brings out a total estimated Exchequer revenue for the year of, as I have said, £144,190,000; and if you set that against the estimated expenditure of

  1183
  £140,757,000, it shows an estimated surplus for the year of £3,433,000. To save further reference to the matter, I must deduct from that a sum of £200,000 which has not appeared on the Estimates, and represents a temporary continuance for another year of the grant in aid made last year to necessitous school areas, which, in consequence of the failure of the Education Bill to pass into law, it is necessary to renew. The available surplus is thus reduced to £3,233,000.

  CAPITAL LIABILITIES OF THE STATE.
  Before I pass away from the examination of last year, I must explain what we have done during the year in regard to the capital liabilities of the State. I endeavoured in my last year's Budget speech to make clear the distinction between what is popularly called the National Debt, the dead weight debt of the country, and the other capital liabilities which have been for the most part created during the last fifteen years for special purposes against specific assets, actual or potential, and each with a Sinking Fund of its own. I will deal with the two things separately. I take first the dead weight debt—the National Debt, popularly so-called, which consists of three items—the Funded Debt, the estimated capital liabilities in regard to terminable annuities, and the Unfunded or floating Debt. I will compare each of these items as they stood respectively on 1st April, 1906, and 31st. March, 1907. The Funded Debt on 1st April, 1906, was £634,048,000, and on 31st March it was £631,929,000, a reduction of £2,119,000. The estimated capital liabilities in regard to terminable annuities on 1st April, 1906, were £43,459,000, and on 31st March, 1907, £40,864,000, a reduction of £2,595,000. The Unfunded Debt on 1st April was £65,713,000—and I ought to add a word of caution before I read the next figure—and on 31st March, 1907, £51,713,000, or an apparent reduction of £14,000,000; but the actual reduction was not £14,000,000, but £9,000,000, £5,000,000 being due to the temporary dropping of the Treasury bills, of which I have given an explanation; but after allowance has been made for that, there was an actual realised reduction on the Unfunded Debt during the year of no less than £9,000,000 sterling. The permanent reduction, as the Committee will see, effected during
  1184
  the course of the year 1906–7 in the National Debt was £13,714,000. It is only fair and right to say that in making that large reduction we are indebted to the extent of £3,466,000 to the Old Sinking Fund left by the right hem. Gentleman the Member for Worcestershire, East.

  WAR DEBT.
  I think it will be convenient to the Committee to point out to what extent this reduction has affected the additional debt caused by the war. The debt contracted during the war was as follows:—Treasury bills, £13,000,000; Exchequer bonds, amounting in all to £24,000,000; the War Loan stock, which falls due in 1910, £30,000,000; and the new issue of Consols, £92,000,000. So that the total addition made to the debt of the country in consequence of the war was £159,000,000. Now, Sir, it will be interesting to the Committee to see how far that additional debt has been reduced. It now stands at £138,827,000. In other words the war debt has been reduced, almost entirely in the last two years, by £20,173,000, and of that amount the reduction effected in the last financial year 1906–7 was £9,643,000. That is to say, what I have said shows that during the past year the war debt has been reduced by £9,643,000, and the total deadweight debt by £13,714,000. That does not complete the matter, because we have also the other capital liabilities of the State to take into account. In regard to those other liabilities, I anticipated that we might have to raise during the year £6,500,000, which, after allowing for the Sinking Fund charged upon the Votes, would mean a total net addition of £4,600,000. The total amount issued has been £5,975,000, of which £420,000 is provided out of balances, and the amount borrowed therefore was reduced to £5,555,000, and as the various Sinking Funds that came into operation during the year amounted to £l,666,000, the net addition to the debt was £3,889,000. Some of these items, I am glad to say, will never reappear, one in particular—the Cunard agreement, under which we had to issue last year £1,684,000. If the addition under that head is subtracted from the reduction made on the National Debt, it will appear that the gross liabilities of the nation were reduced during the year by £9,825,000.
  REDUCTION OF DEBT.
  Now I turn to the current year. In the current year the fixed provision for reducing the Debt automatically is £28,000,000, being £500,000 less than last year. We have made during last year the last two payments on account of Chancery funds annuity, amounting to £1,162,000 in all. The result is that, out of the fixed Debt charge there will be applicable to the reduction of Debt during the year £9,383,000, in addition to the realised surplus of last year, £5,399,000. The two together make up £14,782,000; and, if I add miscellaneous receipts to the reduction of Debt—including the China indemnity of £318,000—estimated to amount in all to £600,000, the total sum available should be not less than £15,382,000. The issues on account of capital liabilities, happily, as I have said, growing less year by year, are estimated as likely to be £3,850,000, of which £2,855,000 is authorised by existing Acts, and the balance under the Telegraph Bill to be introduced this Session. On the other hand, there is provided, on the Votes for the repayment of principal of this class of liabilities, a sum of £2,030,000; so that the maximum addition for the year cannot exceed £1,970,000. Therefore, the estimated sum available during the current year for the diminution of the gross liabilities of the State is £13,400,000. Sir, if I may take the two years together, I should like the Committee to keep the figures in their mind. First of all, I will take the deadweight Debt. If you take the actual reduction in 1906–7 and the sums which are applicable or will be applicable to the reduction of the Debt in 1907–8, they make a total for the two years of £29,096,000. On the other hand, if you take the gross liabilities of the nation, the actual reduction in 1906–7 and the sum which is applicable or will be applicable to reduction in 1907–8, make a total reduction on the whole of the capital liabilities of the nation for the two yews of no less than £23,225,000.

  FINANCIAL POLICY OF THE GOVERNMENT.
  Now, Sir, I have finished, I am glad to say, that somewhat dry, but necessary, recital. Before I come to what I am sure will be to the Committee a much more interesting theme — namely, the intention of the Government
  1186
  as to the disposal of the available surplus, I think it right, on behalf of the Government, to make a more general statement than is usual on these occasions of the lines on which, in our opinion, the finance of the country during the next few years should be directed. It is, I think, a mistake to treat the annual Budget as if it were a thing by itself, and not, as it is, or as it certainly ought to be, an integral part and a necessary link in a connected and coherent chain of policy. In my opinion, and I think it is an opinion that will be shared by a great number of hon. Gentlemen opposite, the country has reached a stage in which, whether we look merely at its fiscal or at its social exigencies, we cannot afford to drift along the stream and treat each year's finance as if it were self-contained. The Chancellor of the Exchequer, in other words, ought to Budget, not for one year, but for several years. It is in that spirit that the proposals which I am going presently to submit to the Committee have been conceived, and it is from that point of view that I ask they shall be judged.

  STATE OF NATIONAL CREDIT.
  What, then, are the lines for financial progress which this Government, and a majority in this House, are bound by their pledges and by their convictions to pursue? First and foremost, we are under an immediate obligation, often insisted upon when we sat upon the other side in the last Parliament, and reiterated certainly by me over and over again at the general election after I had assumed the office of the Chancellor of the Exchequer—an immediate obligation of reinstating and improving the national credit. I am bound to say that there is no subject upon which more exaggerated and sometimes more nonsensical language has been used. Consols, like all other so-called gilt-edged securities, have been at a low level of price during the last six months. They once nearly touched eighty-four. Immediately we had an outcry. Some of the more irresponsible among the mischief mongers of the Press declared that the credit of this country was gone—gone because we had a Liberal Government in power dragged by a Socialist tail. Even a grave and seasoned economist like the hon. and gallant Member for Central Sheffield began to

  1187
  show signs of perturbation. People for-forget the simple and surely indisputable arithmetical fact that a 2½ per cent. Stock at 83, which we have not yet touched, is equivalent to a 3 per cent. stock at 100. They forget further, or perhaps they have never learned the equally indisputable historical fact that our 3 per cent. Consols, the admitted premier security of the world, during the whole course of their long history never remained at or above 100 for a whole year. It is quite true that during the intermediate period after conversion, when Consols were a 2¾ per cent. stock, they rose for some years to a high premium, even as high as 114. How was that? That was at a time when, owing, among other causes, to the relative slackness of trade and to the rapid development of the new source of gold supply in South Africa, the value of money ruled very low, and a secure 2¾ per cent. stock was, what it is not to-day, a very tempting investment. That was a state of things that could not have lasted long, even if the war had not occurred. But there has been a serious fall, and one which has affected all the better class of securities. I think I ought to take this opportunity of giving what I conceive to be the explanation. It is not far to seek, and it has nothing whatever to do, I venture to submit, with the misdoings, actual or imagined, of His Majesty's present advisors. We have seen in recent years enormous additions, due not only to the war, but also to other causes, to the liabilities both of the State and of the municipalities; the admission of colonial stocks to the extent of something like £300,000,000 sterling to the category of trust investments; abnormal activity leading to higher; wages and higher prices in almost every form of business both at home and abroad; catastrophes in North and South America which have brought about a considerable destruction of insured property, much of which had to be replaced by the realisation of gilt-edged securities; and gigantic speculations in shares and the issue of new obligations which have been going on upon the other side of the Atlantic. Take all these causes into account, following as they have done an exceptional drain upon the whole fabrics of currency and of credit, and operating as they were bound to do with converg-
  1188
  ing force here in London, which is the only free and open market for gold, and you have more than sufficient reason to account for the low level of price in the best class of security. These patriotic gentlemen to whom I referred a few moments ago might, I think, find some better occupation both for their tongues and their pens than trying to disparage and belittle the credit of their country, which still, when all is said and done, remains better and higher than that of any other country in the world. But the fact remains that the existing condition of things, which is largely the result, as I have said, of the unliquidated commitments of recent years, is for the time being a source of embarrassment, not to the Government alone. Happily, there is no question of the Government's, as a Government, having to go into the market to add to the debt for which we are directly liable. Take, however, the case of Irish land security, which is guaranteed by the British Government. Fresh issues of that stock must from time to time be made to keep the operation of purchase going, and the whole loss upon the flotation of that stock which must arise in the present state of the market falls upon the Irish Development Grant, which, if my memory is right, was originally intended to serve the purpose of Irish education. It is a mistake to suppose that this is a matter which only affects the City, what is called the "high finance." It affects every community and every class in the country. Look at the position, of our great municipalities. From the London County Council downwards they can raise capital only upon terms which, as compared with those of ten years ago, are grievously burdensome to the ratepayers, with the result that in every direction their activity is being crippled. You may think, if you like, that some forms of their activity are misguided, but there are some, at any rate, innocuous, and others absolutely essential to the well-being of the community. What is true of them is true, in varying degrees of inconvenience and of severity, of almost every trading concern in the country. Taking these facts into view, I have no hesitation in drawing the conclusion that a substantial and exceptional effort to effect a further reduction in the Debt is, for the moment, one of the paramount duties of the Government.

  SOCIAL REFORM.
  But behind and beyond this there lies the whole still unconquered territory of social reform. Social reform may be regarded, according to the point of view from which you look at it, as a luxury or as a necessity, but in any case it is expensive. It has to be paid for. Someone must be prepared to meet the bill. Well, now, this is a House of Commons which was elected more clearly and definitely than any other House in our history in the hope and belief on the part of the electors that it would find the road and provide the means for social reform. No doubt social reform is a phrase vague in itself, which carries different meanings to different minds. But there are some things which it certainly means to all of us who sit upon this side of the House, and I fancy to a good many who sit opposite. I myself, for instance—if I may refer to myself—am not what is called a Socialist. I believe in the right of every man face to face with the State to make the best of himself, and, subject to the limitation that he does not become a nuisance or a danger to the community, to make less than the best of himself. This world is much too full of wrongdoing, and of injustice, and of unmerited suffering; but, in my judgment, the way of escape is not to be found in any solution, or so-called solution, which, by slowly but surely drying up the reservoir which gives vitality to human personality and human purpose, will in the long run leave the universe a more sterile place. I say this in no polemical spirit, not at all, but simply by way of emphasising the fact that to all of us—people like myself who may be regarded by some of my hon. friends below the gangway as a lukewarm Moderate—there is nothing that calls so loudly or so imperiously as the possibilities of social reform. Just let me, in order to make plain what I am going to say, invite the House to look at two sots of figures in our modern community, whose appeal is irresistible.

  THE STATE AND THE CHILD.
  First of all there is the child, for whom heredity and parental care have perhaps done nothing or worse than nothing. And yet it is the raw material, upon the fashioning of which depends whether it shall add to the common stock of wealth
  1190
  and intelligence and goodness, or whether it shall be cast aside as a waste product in the social rubbish heap. The State has long recognised that it cannot pass by that appeal with folded arms. It has put the child to school, it keeps the child at school, and (much as it shocks some excellent people) after the legislation of last year, if the poor body of the child is benumbed with cold or pinched with hunger so that it can got no benefit from its lessons, it will even go so far as to help to provide it with bread Does the House realise what the recognition of that means on the part of the State, what every one of us now agrees is a duty, though it was neglected and passed by generation after generation by humane and far-sighted statesmen? Does anyone realise what the performance of that duty has cost this community? Let me give two or three figures which I think very striking. In the year 1869–70, the last year of what I may call the old system, the total cost of education to the public in the form of Parliamentary grants—for of course there was no rate-aid at that time—was £721,000. What was it in the year 1906–7? Your Parliamentary grants, if you add the Exchequer contributions, as you ought to, were £13,359,000; sums raised by local rates were £11,785,000; a total of £25,144,000. That is what it has cost the State to recognise its duty to the children of the community. I do not say that every penny or every pound of that money is well or wisely spent. I rejoice to think that we have at the head of the Board of Education my right hon. friend the President, a severe economist, who subjects the whole of this expenditure to a most searching review. But this I do say, that there is not a man who sits on either side of the House who is prepared substantially to recede from the performance of this enormous duty. Well, that is one thing.

  OLD-AGE PENSIONS.
  There is another thing, nearer the other end of the journey of life, which makes an equally strong, though hitherto an unavailing, appeal both to the interest and to the conscience of society—I mean the figure of the man or woman who, perhaps, spent out with a life of ill-requited labour, find themselves confronted in old age, without fault or demerit of their own, with the

  1191
  prospect of physical want and the sacrifice of self-respect. Sir, I never gave, nor, so far as I know, did any of my colleagues on this Bench give, any pledge at the elections on the subject of what is called old-age pensions. We knew something of the magnitude of the problem, and we thought it wrong to raise expectations without the knowledge that they could be met. Nor do I now commit myself or any of my colleagues to any specific scheme, although both my right hon. friend the Prime Minister and myself have laid down certain conditions to which, in our judgment, any practical proposal must conform. Whatever is done in this matter, as I have said before in this House, must be done by steps and stages, and cannot be achieved at a single blow. But this I do say, and I wish to say it with all the emphasis of which I am capable, speaking for the whole of my colleagues who sit upon this Bench, that in the sphere of finance we regard this as the most serious and the most urgent of all the demands for social reform; and that it is our hope; —I will go further and say it is our intention, before the close of this Parliament—yes, before the close of the next session of this Parliament, if we are allowed to have our way—it is a large "if"—to lay firm the foundations of this reform.

  FREE TRADE.
  To that general statement there is one thing that I want to add, though perhaps the addition is hardly necessary. We are a free-trade Government. This is a free-trade House of Commons. Whatever now resources we can provide for any purpose I have indicated are subject to that governing condition. In a sense, of course, that involves a limitation of the area. [OPPOSITION Cries of "Hear, hear."] I thought that sentence would be appreciated. But it is a limitation of the area only in the sense in which a wise builder, who is seeking to lay the foundations of an enduring structure, recognises the limits which divide firm ground from an unfathomable morass. We do not dogmatise about free trade. We are neither professors nor missionaries. There is nothing we need say to countries which adopt other systems than our own. But for us here, 43,000,000 of people in these
  1192
  two small islands, dependent as we are upon extraneous sources of supply for the food of the people and the materials of the industry, the one free, open, untrammellcd market in the whole world—for us, I say, free trade is the breath of life, and there is no social reform that would not be dearly purchased by its sacrifice. Well, I think we do not always sufficiently recognise the immense advantage which we had in the recent controversy from the fact that protection presented itself to the electors of this country in its most questionable and vulnerable shape. It was entangled from the first, and it was ultimately strangled, by being bound up with the taxation of corn and meat, the first necessaries of life; and, as we showed, must have the inevitable consequence, if the proposed scheme were to be fairly applied as between different parts of the Empire, of taxing the raw materials of our different industries. [OPPOSITION cries of "Why?"] I have argued the question on a hundred platforms, and I am not going to do so again. I am only expressing my opinion that it was that which killed protection, and it is that which will kill it again. But, Sir, I can conceive the protectionist invitation being couched in much more insidious and much more alluring accents. I think, therefore, that it is wise for us who are, as I have said, not only the party of social reform, but the party also of free trade, to make it clear if we can—and I believe we can make it clear—that the attainment of the one is not incompatible with the maintenance of the other.

  TAXATION AND SOCIAL REFORM.
  That may seem to be a digression, but it really has, as the Committee will see, a very direct bearing upon the concrete proposals I am now going to make. I repeat if we are to have social reform we must be ready to pay for it, and when I say "we" I mean the whole nation—the working and consuming classes as well as the wealthier class of direct taxpayers. An important practical inference at once arises. If these two objects, the strengthening of our national credit and the provision for social reform, are to be the governing aims of our policy, large as my estimated surplus may seem to be, I cannot deal with it in such a way as to involve any permanent diminution of revenue of a substantial character.

  1193
  That puts at once on one side more than one suggestion which, in other circumstances I might yield to, for the remission or repeal of particular taxation. For instance, I have been urged, in the course of the year to repeal almost every tax, but I have been urged with particular insistence to deal with what are called the war taxes. What are the war taxes? They cover a pretty wide area of ground. They include 4d. on the income-tax, the whole of the sugar duties, one penny still of the tea tax, and all the extra imposts on tobacco, beer, and spirits, amounting, I suppose altogether, to something like £20,000,000 sterling. From this point of view, although they are all war taxes, each of them is equally entitled to consideration. What is a war tax? A war tax is not a tax put on to last during a war and to come to an end the moment peace is concluded and your Army is withdrawn from the field. It is a tax which is put on to meet the extra burden imposed on the country by waging war; and so long as that extra burden remains—and it remains, as I have shown to the Committee, to the tune of something like £130,000,000 of extra debt—the claim that the war tax qua war tax can be removed is, in my opinion, an inadmissible claim. I will just say two or three words about one or two particular duties with regard to which special appeals have been made.

  COCOA DUTY.
  First of all, there is a little duty, a very small one, to which I observe my predecessor in office is beginning to pay a good deal of attention—the cocoa duty.
  MR. AUSTEN CHAMBERLAIN: I have not asked you to take it off.
  *MR. ASQUITH: The cocoa duty produces, I think, about £250,000. It is a very small and not very productive tax. I think, if you ask me the question, as the right hon. Gentleman did, by implication, this afternoon, that there is a good deal of the flavour of protection about the present scale of cocoa duty. I should not defend it myself from the point of view of a free-trader, and I do not think it is defensible; but it is a very small affair, and you must notice this about it, that this duty, with its protectionist flavour, has stood the scrutiny, and has been preserved, at any rate, with the connivance
  1194
  of Mr. Gladstone, of Sir William Harcourt, of Sir Stafford Northcote, of Mr. Goschen, and of Sir Michael Hicks-Beach, who slightly increased its protective character—a string, I should think, of as good and severe free-traders as have over been responsible for the finances of this country. I might say that what was good enough for them is good enough for me. At any rate, I think that, with that history behind the cocoa duty, I may safely postpone, as I propose to do, the expurgation of this very small protectionist taint, which, I admit, still lurks in this particular part of our fiscal system. So much for the cocoa duty.

  TEA AND SUGAR DUTIES.
  Then there is the case of tea and sugar. The tea duty was reduced last year by a 1d. It now stands at 5d., that is to say only a 1d. above the lowest point it reached before the time of the war, and I am satisfied, from a careful review of the existing conditions of the trade, that any further attempt at this moment to deal with the duty, in the way of reduction of another 1d., would not be of any real profit to the consumers of tea. The sugar duty is one of a very peculiar character. It bring in over £6,000,000, which is, to my mind, almost as strong an argument as you could possible use for not lightly interfering with it. Objectionable as I think it is, and have always thought it, as a tax both on the food of the poor and upon the raw material of several important industries, it is a duty with which you cannot deal piecemeal. It is a duty which, translated into terms of retail prices, works out at something like ½d. on the ordinary pound of sugar, and, as we do not deal in this country in retail trade with farthings, I say, if you were to halve the sugar duty I do not think you would do any good whatever to the great bulk of consumers in the country. You might do good to some of the trades, like the confectionery and the mineral water trades, in which sugar is a raw material, but I do not believe you would benefit the working classes or the consuming part of the community unless you get rid of the duty altogether. That is out of the question, and I dismiss it from consideration. I say, generally, having regard to the principle which I have laid down, the practical conclusion to which I have come is that I must not permanently impair

  1195
  my sources of revenue in view of the future, and I do not propose this year to make any change in the indirect taxation of the country.

  PROPOSED CHANGES—IMPERIAL EXCHEQUER AND LOCAL TAXATION.
  I now come to the changes which I am in fact going to propose. First of all, I will deal with a matter which, though it does not immediately affect, for good or evil, the revenue of this particular year, is, in my judgment, of the greatest importance with regard to the future. I refer to the relations between the Imperial Exchequer and local taxation. I propose, as from the end of the present financial year—I cannot break up the year for this purpose—but, as from the 1st of April next, to sweep away, root and branch, the whole system by which assigned revenue, the proceeds of Imperial taxes, is intercepted from the Exchequer and handed over to local authorities. The arrangements which I ask Parliament to terminate were initiated nearly twenty years ago, in 1888, by the late Lord Goschen, whom we have lost since I last presented a Budget to this House. He was a great financier, a great administrator, a man who brought a rare combination of clear insight, cultured intelligence, subtle reasoning power, wide expert knowledge, and indomitable and inflexible courage, to the service of the State. Lord Goschen introduced this system, and his scheme, as conceived by him and as presented to this House in 1888, had, no doubt, a good deal to recomend it. He had a twofold object in view—first, to provide a contribution from personalty towards local expenditure, and next, to effect a permanent settlement between local and Imperial taxation by handing over to local authorities certain duties or taxes. Amongst these were the licensing duties, which it was intended should be collected locally, a power at the same time being given to the local authorities to vary them by raising or lowering them, a moiety of the probate duty on personal property, and certain proposed new taxes—the van and wheel tax, which never saw the light of day, together with the surtaxes on beer and spirits, which were assigned with the special object of providing funds for compensation for the extinction of licences. That was the scheme, but as all of us who were here at
  1196
  the time, and as all know as a matter of history, in the course of its passage through this House it was mutilated beyond all recognition. The van and wheel tax was abandoned. The local authorities got the licensing duties, it is true, but without the power of raising them, and without the power of collecting them. They were really Imperial taxes, collected by Imperial officers, which, by a thoroughly illogical and indefensible process, never came to the Imperial Exchequer, but were intercepted on the way, and reached the hands of the local authorities, who had nothing to do with them but to spend them. As regards the death duties, with the revision of those duties in 1894 by Sir William Harcourt even the semblance of a special contribution from personalty to local taxation disappeared; and the Agricultural Rates Act and various other Acts which have since been passed have rendered the system even more intolerable than it was before.
  The Committee may not find it interesting, but I think it is necessary to show what the present condition of things is. First of all, there is the estate duty. Part of it, representing the old probate duty, goes, under the Act of 1894, to the Local Taxation Account, and is divided between the three kingdoms in certain fixed proportions, though it is a variable amount. And it is further complicated by this, that, owing to the passing of the Tithe Rent-Charge Act, from the English portion of that varying amount another varying amount is every year deducted for the purpose of the tithe rent-charge grant. Then a further part of the estate duty goes to agricultural rates. In England, that contribution is made entirely out of the estate duty. In Scotland it is made mainly out of the estate duty, with, also, a grant from the Consolidated Fund; and in Ireland it is wholly made out of the Consolidated Fund. Take the case of licences. In England and Scotland the proceeds of the local taxation licences are given to the various authorities according to the amount collected in their several areas. Ireland gets three so-called equivalents. I am not sure, though I do not want to raise any question of controversy with hon. Gentlemen whom I see sitting opposite to me, that they are not a good deal more than

  1197
  equivalents. But, at all events, they receive three so-called equivalents for these licence duties out of the Consolidated Fund. And, finally, you have the beer and spirits duty, which is divided between the three kingdoms in the fixed proportion. Could a more head-splitting condition of chaos and confusion possibly be presented to the House of Commons? I think that everybody concerned either with local or Imperial taxation will agree that it is time that the system was put an end to. It will stop an enormous amount of complication and difficulty in our national accounts; and, from the point of view of the Chancellor of the Exchequer, which is the point of view from which mainly regard it at the moment, it will set his hands free, as they are not free at present, to deal with some of the most important sources of taxation. I have been pressed very much to alter and raise the duty on motor-cars. I should be very much disposed to do so. I think a tax on motorcars is almost an ideal tax, because it is a tax on a luxury which is apt to degenerate into a nuisance. But it is no good, so long as this system prevails, for me or for anyone else to put an additional duty on motor cars; for where does the duty go to? It goes to the local authority by whom these duties are collected, that is to say, as a rule, the local authority within whose area the person resides to whom the motor-car belongs. Suppose I pay, under a new addition to the motor duty, as I should pay, here in London, an extra duty on my motor-car, the benefit goes entirely to the London County Council. But it is not the streets and roads of London to which my motor-car does injury, it is to the rural districts of England and Scotland. Nothing can be more illogical or unjust than that distribution of the matter. Let me take another case, much more important—take the duty on the licences of public-houses. I wish to have my hands set free in that matter also. At present the proceeds of those duties go to the Local Taxation Account, and there, again, they go to the local authorities in proportion to the number of licences which are taken out in their respective areas. You could not possibly have a system better calculated to put a premium on a lethargic and non-public-spirited licensing authority. To set free the hands of the Chancellor of the Exchequer for these and
  1198
  other purposes it is eminently desirable that he should recover complete control over the whole of this class of duties. I do not want the local authorities to suffer; as far as my plan is concerned, they will not suffer and will not be one halfpenny out of pocket. I propose that in future, after the close of the present financial year, they should no longer have any concern with probate duty, local taxation licences, or beer and spirits, but that they should receive from the Consolidated Fund a sum equivalent to the proceeds of these respective sources of revenue that at present go to the Local Taxation Account, and at the present rates of charge. I mean, of course, that, if in the future you raise the duties of any of this class of licences, that is not to be taken into account in the sum which the local authorities are to receive.
  MR. AUSTEN CHAMBERLAIN: They would share in any natural growth?
  *MR. ASQUITH: They would share in any natural growth—that is to say, they would receive precisely the same sum in any year as they would receive now if the present state of things was continued; a natural growth or a natural diminution, as the case may be. The object is, as I say, first of all to get rid of an enormous, most unsightly and inconvenient complication in our national accounts; secondly, to set free the hands of the Chancellor of the Exchequer with regard to a large area of taxation; and thirdly, to clear the ground—for this is only a provisional arrangement—for a future re-settlement, I hope on equitable terms, of the whole relations between the central authority and the local authorities. That is the first of the proposals that I make to the House, and I hope it may be received as of almost a non-controversial character.

  INCOME-TAX.
  Now I come to more thorny ground. I have said that I do not propose in any way to alter indirect taxation; but I do propose to deal with the income-tax. The income-tax, as it is one of the most productive, so it is one of the most delicate parts of our fiscal machinery. There is nothing like it to be found anywhere else in the world. It produced this year something like £32,000,000 to the Exchequer, and The largest part of that sum, no less than two-thirds of the whole,

  1199
  through the operation of our system of deduction at the source, is collected, without difficulty or friction, without any necessity for the taxpayer to draw a cheque or even open his purse, and almost without his being made conscious that he is being taxed at all—I said almost. As regards the remainder, one-third of the whole, the process of ascertaining and getting in what is due with ease and expedition depends upon a certain amount, at any rate, of co-operation—it is not expected to be very cordial—between the taxing authority and the person assessed, and still more upon the harmonious interaction of the central and localised parts of the machine. Now there is nothing in the world easier, I know it because I have tried the experiment, than to sit down at a table and draw up on a piece of paper an ideally perfect scheme of income-tax, logically graduated from the top to the bottom, safeguarded by an elaborate machinery of inquisition, and detection, and punishment, all administered by the pitiless and impartial hands of a perfectly dispassionate central authority. Nothing is so easy on paper; but when you are brought into contact, as I am almost daily, with the actual administrative problem, you find you have to content yourself with something very much less ambitious. And if the reform I am about to propose falls short, as I am afraid it will, of some people's expectation, it is governed and limited by severely practical considerations. The income-tax is really a twofold tax, it is a tax on property and a tax on earnings. I start with this proposition, and a most important proposition it is, that it must now be regarded as an integral and permanent part of our financial system. If that proposition is once enunciated and admitted, it makes it impossible to justify, if there be any practical way of escape, the present incidence of the income-tax. After you have reached the limit of abatement, which is now £700, the State taxes all incomes at the same rate, whatever may be their character or source. Just compare two cases. You have here A, a man who derives, we will say, a thousand a year from a perfectly safe investment in the funds, perhaps accumulated and left to him by his father; on the other hand you have B, a man making the same nominal sum by personal labour in the pursuit of some arduous and
  1200
  perhaps precarious profession or some form of business. The one is under no necessity to make provision either for his children or for old age; the income will go on being automatically received as long as the investment remains; the other, if a man of ordinary prudence, is bound, his work being carried on subject to risks to health and all the other vicissitudes of fortune, year by year to deduct from his nominal income and set aside a sufficient sum to make provision for contingencies in the future. To say that those two people are, from the point of view of the State, to be taxed in the same way is, to my mind, flying in the face of justice and common sense. That is the feature of the tax which has never been justified by any of the great men, Mr. Pitt, Sir Robert Peel, Mr. Gladstone, and the others who have been concerned in its introduction and development; it has always been palliated on the ground either that the income tax was a mere temporary expedient, or that it was impossible to make the distinction without destroying its productiveness, which is the same thing as saying that it ought not to be more than a temporary expedient. For a tax whose effective continuance involves the annual perpetration of a gross injustice is a tax which ought to be reserved, at any rate, for great and pressing emergencies.

  HISTORY OF INCOME-TAX.
  If I am not wearying the Committee, as this is very important, let me very briefly review the history of the tax. The income-tax was introduced by Mr. Pitt in 1798, in almost the darkest hour in our great struggle with France. It was avowedly a temporary tax put on for the purposes of war. Our ancestors, when they did these things, did not do them by halves, and the tax was 2s. in the £. Incomes of £60 and under were exempt, and up to £200 there was a differential rate proceeding by steps. That tax was reintroduced, after a year of peace, in 1802–1803, by Mr. Adding-ton, at the lower rate of 1s. In 1806, war still continuing, it was raised by Lord Henry Petty, the Whig Chancellor of the Exchequer, to 2s.; and he for the first time introduced a distinction, since dropped, between earned and unearned incomes by providing—and this was the state of things that prevailed from 1806 to 1816—that, as regards abatements,

  1201
  only earned incomes should be entitled to them. In 1816 the tax came to an end, and, although Lord Liverpool's Government attempted to continue it, they were, by a large majority of this House, defeated in their attempt; and I think it was Mr. Brougham who moved that all the records of the tax should be burnt or destroyed, in order that posterity should never know that such a tax had existed. That was the early history of the tax. It was revived in 1842 by Sir Robert Peel, not as a war tax, but again as a temporary expedient, only for a period of three years, to enable him to effect a reconstruction of the tariff. Mr. Gladstone never liked the income-tax; as a member of Sir Robert Peel's Government he opposed its introduction; during the whole of his life he was anxious to see its gradual extinction; and on a celebrated historic occasion he invited the country to agree with him in abolishing it altogether. In his picturesque language, speaking of Sir Robert Peel's revival of the tax in 1842, he spoke of calling forth from its repose this giant, which had once shielded us in war, to come to assist our industrious; toils in peace. The industrious toils were assisted to this extent, the tax was imposed by Sir Robert Peel at the comparatively moderate rate of 7d. in the pound; but he raised the limit of total exemption to £150, and above that everybody was taxed exactly alike. Sir Robert Peel defended it mainly on the ground that the tax was a temporary one. It was taken in hand again by Mr. Gladstone in 1853, who proposed that it should continue seven years at a diminishing rate, and extended it to Ireland, not altogether without consideration. ["Oh."] He reduced the limit of exemption to £100, but between £100 and £150 gave abatements at a lower rate of tax. I should like to quote two sentences from Mr. Gladstone's speech on that occasion. In refusing to make any differentiation between earned and unearned incomes, he said—
  "I do not at all deny that the case of the professional man appeals to my sympathy; in my opinion, that is one of the reasons which indicate that the tax eight to be a temporary tax."
  And again he said—
  "It is not adapted to be a permanent portion of your fiscal system unless you can by reconstruction remove its anomalies."
  1202
  I found myself on that opinion. We now recognise the tax to be a permanent part of our system; and following Mr. Gladstone, I think that we must do something to remove the anomaly and to arrive at some scheme, without destroying the essential features or the productive character of the tax, which differentiates incomes, not only as to amount, but also as to the source whence they are derived and the conditions under which they are enjoyed I need not weary the Committee by giving the history of the different steps by which the present scale of abatement has been reached. We all know that in incomes up to £700 there is a substantial abatement; but it may be interesting to point out that at the present rate of 1s. in the pound an income of £200 pays 2½d.; an income of £300, 5½d.; £400, 7¼d.; £500, 8½d.; £600, 9½d.; and £700, 10¾d., so that the Committee will observe that the principle of differentiation prevails now to that extent. What is the result? The income-tax is not only Is. in the pound, but of the million of taxpayers, 800,000 to 850,000, or four-fifths of the whole, showing an income of £275,000,000, are under £700. This extension of the scale of abatement has much simplified the question. Mr. Gladstone used to say—
  "Take the poor widow with £300 a year derived from investments, and bringing up a family; is she to he placed in a worse position and to be taxed at a higher rate than the small business or professional man making 1300 a year from his business?"
  There is great force in the argument, but it should be remembered that nobody pays the whole rate unless his or her income is over £700 a year.

  REPORT OF SELECT COMMITTEE.
  Having been impressed with these general considerations, I last session moved for the appointment of a Select Committee, which sat under the presidency of my right hon. friend the Member for the Forest of Dean. This Committee took evidence, and made a valuable Report; and I am sure that the House is very much indebted to the members of the Committee for their labours. They were unanimous, as I gather—and it was a Committee which represented all parts and sections of the House—in upholding the necessity of making a difference between earned and

  1203
  unearned incomes. What is am earned income? It is not easy to draw a distinction, but we can but do our best. First of all, there are the incomes of all officers and employés paid by salary. That, I think, includes the clergyman. Although he derives his income and pays income tax under Schedule A from the glebe or tithe rent-charge, his income is really paid to him in consideration of the services rendered by him in the performance of his clerical duties. Secondly, it clearly includes every class of professional man; and, thirdly, all traders whose income is substantially —and I lay stress on the word "substantially"—derived from their own personal labour. In the first two categories no difficulties arise at all. The difficulty arises in the third class—how to take into account the amount of capital a man brings into his business, and to deal with the class of incomes which are either wholly earned or partly earned and partly unearned, means a degree of logical precision where there will be the greatest possible difficulty in hindering overlapping in dubious cases. I am satisfied, however, that a much more practical way of dealing with this branch of the question is to confine the differential treatment to earned incomes which do not exceed £2,000 in amount. The Select Committee suggested £3,000, but I think that £2,000 is quite as far as you can fairly go. I confine the differential treatment, therefore, to persons whose total income from all sources does not exceed £2,000—not merely their earned incomes but from all sources. In the case of a man who is left £40,000 or £50,000 a year by his father, and by becoming a director of companies earns another £1,000, I think it is absurd to give him a preferential treatment on the score that he is a man with an earned income. I do not think that the principle should be carried to that extent. First of all, therefore, the earned income in respect of which relief is given should not exceed £2,000, and secondly, the whole income from all sources should not exceed £2,000.

  METHOD OF DIFFERENTIATION.
  How do we carry out the differentiation? I propose that where these conditions are satisfied—the income-tax remaining as a normal tax at the rate of Is.—the income tax should be imposed on
  1204
  the earned incomes within these limits at the lower rate of 9d. in the pound, being a relief of 3d. in the pound to this class of income-tax payer. That is to be in a addition to, and not in derogation of, all existing exemptions and abatements. The burden of proof will be on the individual claiming the lower rate, and we shall provide that he must make his claim with his return—this is a most important point—if he is a person to whom the formal return is sent and is required to fill it up; if he is not, he must claim exemption and abatement not later than 30th September in the year. In this way we shall avoid the enormous congestion of claims for refunds and abatements which accumulate at the end of every year. It is only fair to say to such a claimant, "If you want lo be rated at the lower rate you muse be zealous in the matter yourself." I propose to supplement those provisions with another set of provisions which are very much needed, and which carry out in the main the provisions of Lord Ritchie's Committee which sat two or three years ago. That Committee proved that under the present system there is much evasion and leakage. I propose to make it compulsory on every man who receives a form —that well-known buff-coloured form — as one of the annual incidents of the tax to make a declaration and to send back the return, even though all his income may be taxed at the source. If he has no unearned income he must say nil. At present also he is under no penalty, because he is under no statutory obligation to make it. I propose to make it compulsory in all cases that the return shall be made. In the next place, we shall increase the penalties and extend the period of recovery in cases of evasion. In the third place, we shall require extended returns from all employers, whether private persons or companies, requiring them to give not only the names but the salaries of their emplyés. This will, of course, impose a slight additional burden on the employers, but the precaution will tend enormously to prevent evasion. Further, I propose to repeal Section 133 of the Act of 1842, which allows an abatement of duty at the end of the year of assessment where it is found that the profits of that year fall short of the average of the previous three years. I may add also, as the representative of a Scottish constituency, that as

  1205
  the delay in the collection is almost entirely due to the persons directly assessed—the persons to whom we are going to give relief—we intend that the English machinery shall be levelled up, so that it may with equal efficiency correspond to the admirable machinery at work in Scotland. In order to make the matter clear I should like to point out how the system will work by a concrete instance. I take the amount of income-tax payable on certain incomes under the present and proposed scale. First of all I will take an income of £1,500 a year. At present, whatever may be the source of that income, at the rate of 1s. in the pound it pays £75. Under the now system, if the income is derived wholly from the Funds, it will continue to pay at the rate of 1s. in the pound, or £75. If, however, it is derived wholly from a profession or a trade, it will pay at the lower rate of 9d., or £56 5s. If, on the other hand, it is a composite income, say £500 from the Funds and £1,000 from a profession or trade, it will pay 1s. on the £500 and 9d. on the other portion, or £62 10s. instead of £75. Now as to the abatements. I will take an income of £600. At present such an income is allowed a deduction of £120, so that income-tax is paid on £480 irrespective of the sources of income. Under the new system Low will it work out? If the income of £600 is derived wholly from the Funds, it will pay £24; if wholly from a profession or trade, it will pay £18, at the rate of 9d. per pound, coupled with an abatement; and if the income is made up of £200 from the Funds and £400 from a profession or trade, it will pay £20 10s., the abatement of £120 being deducted from professional earnings.
  MR. AUSTEN CHAMBERLAINIs the abatement in the case of the mixed income always to be made from the earned portion and not from the unearned?
  *MR. ASQUITH: Yes, from the earned portion. The effect of this change will be a very sensible relief to that class of income-tax payers who are grievously oppressed by the present burdens, and it will enable us, with a clear conscience and with much greater ease and simplicity of working, to treat the income tax, as I intend it should be
  1206
  treated, as a permanent part of our fiscal machinery.

  GRADUATION OF INCOME-TAX.
  There was another point in connection with this question referred to the Committee presided over by my right hon. friend—the practicability of graduation, whether by progression upwards from the normal tax by an ascending scale for higher incomes, or by degression from the normal rate by a descending scale to a lower rate. On this point there was a considerable divergence of opinion in the Committee, and I may say at once that, quite apart from other reasons, it would not be possible for administrative reasons to introduce any change in graduation simultaneously with the already sufficiently complicated alterations of a differentiated tax. The machinery would break down under the strain. I do not announce at this moment any final opinion on the various schemes submitted to the Committee. I see, as everyone conversant with the national finance must see, enormous difficulties in the application of that principle. It would require a compulsory declaration of income from everyone. I should like to see it very much; but how are we to get it? Only by giving an advantage for it. You get a compulsory declaration now where abatements are claimed. Under the scheme of differentiation you will have no difficulty, because it will be to a man's interest to make the declaration. But the moment you come to tell a man, "You are to declare your income, not for your benefit, but in order that you may be taxed at a higher rate," you find yourself confronting a good many formidable difficulties. As to the experience of foreign countries, in my opinion there is no foreign or colonial experience which is really relevant on helpful. I do not mean because out social and economic conditions are very different. But you will find, if you examine the various systems of so-called graduation, that they all stop at a comparatively low point, Most of them stop at £5,000. As far as I know, none of them go beyond £8,000. That is just about the point where, by compulsory declaration, we should hope to rake in for income-tax a lot of money that we do not now receive. But I am not now expressing a final judgment in the matter. I am pointing out difficulties which must

  1207
  be present to the minds of all who have considered the question; and, as far as the present year is concerned, we must be content with the reforms of differentiation.

  COST OF NEW SCHEME.
  What will be the cost? This, I may say, is a very opportune moment for making a change of this kind, because, as the Committee will observe from the estimated revenue for the year, we are anticipating an increased receipt from income-tax next year of no less than £900,000. That is a time when we may well be able to risk a little in the way of cost. Nothing is more remarkable in respect of the income-tax, notwithstanding the growing abatements and the rise in the rate of charge, than the growing produce of a penny. In the year before the war, 1898, Sir Michael Hicks Beach completed the present system of abatements up to £700; and the income-tax then stood at 8d. in the pound. Notwithstanding these abatements and the fact that the tax is now at 1s. in the pound, the produce of each penny, which was £2,284,000 in 1898, is now £2,600,000—a remarkable proof of the elasticity of this tax. But it is very difficult to estimate either a possible gain or a possible loss on this tax; though its tendency for many years has been in an upward direction. There are, perhaps from 800,000 to 850,000 persons with incomes between £160 and £700 a year. There are, perhaps, 120,000 taxpayers with incomes between £700 and £2,000 a year. How much of their incomes is earned and how much unearned is largely a matter of conjecture. Therefore, the figure I give must be taken more or less as guess-work. But I estimate, from the best materials available, the loss during the year from this differentiation at £1,250,000. Further, during this first year there will be an additional loss, which will not recur, owing to the delay which must necessarily result in getting in the tax in the early months of next year owing to the more complicated machinery. We anticipate that we ought for safety's sake to reckon that we may be delayed to the extent of £750,000 in the collection. That would make a loss for the year of £2,000,000. But you must set against that the fact that we shall get £900,000 more this year, according to our estimate; and the £750,000 is only a deferred pay-
  1208
  ment and not an actual loss. As I say I do not present it to the Committee as more than a well founded guess; but I hope it is an outside estimate of the loss.

  DEATH DUTIES.
  With many apologies for the long time that I am detaining the House, I approach the last chapter of my task. The very substantial relief that I am giving to the income-earner necessarily suggests the question whether, at the other end of the scale, property is contributing its fair proportions. As I said some time ago, I cannot, with a view to the needs of the immediate future, afford any substantial loss of revenue, and I must add that, even if I had not to deal with the income-tax at all, I should have felt myself bound to invite the Committee to consider a revision of the death duties. Whether, and how far, those duties ought to be regarded as a sort of deferred income-tax is a controverted economic problem on which I do not desire to enter. But, at any rate, they are in parimateria; and, indisposed as I am, not only to lose revenue, but to disturb the balance between direct and indirect taxation —and, remember, I am doing nothing directly this year for the indirect taxpayer—unwilling as I am to disturb that balance in favour of direct taxation, I am going unhesitatingly to ask the Committee to inquire with me whether the greater part of what I have lost or may lose in making the income-tax just and equitable may not be recovered without injustice or lack of equity in another way from the owners of property. We all remember the gloomy predictions uttered in this House at the time the Into Sir William Harcourt imposed the death duties in 1894. We were told that they would check the accumulation of capital and drive it out of the country; that people would have to shut up their country houses and curtail the area of employment for honest and industrious men; that the foreign millionaire would no longer make England his home, or, at any rate, the place of his death. None of these predictions has been verified by the event. It used to be said of a great landowner in the West of England, at the time of the repeal of the Corn Laws, that he was convinced that he was going to be ruined, and went about saying that he must make economies if he were to continue to live. After a time, a friend asked him

  1209
  what form his economies had taken, and he replied, "I have put down my pew." I am not at all sure that a revision of the death duties ever had so prejudicial an effect as that on the spiritual welfare of the upper classes. I doubt very much whether they have at all curtailed their contributions to the weekly offertory. But I am satisfied, after a great deal of investigation, that we may, without injury to property, without checking the accumulation of capital, and without injustice to any human being, reconsider the scale of duties imposed in 1904. I propose to leave the scale as it is up to £150,000. The unfortunate man who is unable to leave more than £150,000 will remain in exactly the same position as he is today. But when the principal value of the estate exceeds £150,000 and does not exceed £250,000, I propose that the rate of duty shall be 7 per cent. instead of 6½ per cent.; from £250,000to £500,000 it shall be 8 per cent. instead of 7 per cent.; from £500,000 to £750,000, 9 per cent. instead of 7½ per cent.; from £750,000 to £1,000,000, 10 per cent. instead of 7½ per cent.; and when the estate exceeds £1,000,000, 10 per cent. on the first million. And here I introduce a new element, or what is called, in another connection, a super-tax. I propose that when a man's income exceeds £1,000,000—I do not know what we ought to do with such a man. When a man's estate which passes at his death exceeds £1,000,000, but does not exceed £1,500,000, I propose that it should pay 10 per cent. on the first million, and an additional 1 per cent., or 11 per cent. in all, upon the remainder; if the estate exceeds £1,500,000, and does not exceed £2,000,000, it will pay 10 per cent. on the first million and an additional 2 per cent., or 12 per cent. in all, on the amount in excess of £1,000,000; if it exceeds £2,000,000, and does not exceed £2,500,000, the tax will be as before, 10 per cent. on £1,000,000, but 13 per cent. on the balance; between £2,500,000 and £3,000,000 it will be 10 per cent. on £1,000,000, with14 per cent. on the remainder, and above £3,000,000 everything in excess of the first million (which will still bear 10 per cent.) is to be taxed 15 per cent. There we stop. I need not point out, what I think must be clear to the Committee, that this
  1210
  applies not to the living, but to the dead. I shall be asked, of course, the pertinent question—and the answer to it will show the extreme moderation of my scheme—What addition will this make to the revenue of the country? Death Duties in former years were very uncertain, and therefore we must take an average. I estimate the average extra proceeds from the increased scale of Death Duties will be £1,200,000 a year. I ought to add that I propose that the new scale shall apply to all estates that pass by death after to-day. But it will be obvious to the Committee that, in consequence of the delay in winding up estates, the new scale will only operate practically for a few months of the present year. Therefore, for the present year, I think it is wise not to anticipate a larger receipt than £600,000 from this source; but the ultimate annual receipt I estimate at £1,200,000.

  BALANCE SHEET.
  I am now able to present a balance-sheet showing how I have dealt with the surplus up to this point. The surplus of revenue over expenditure is £3,233,000. If you add to that the addition to the Death Duties of £600,000 you bring it up to £3,833,000. The cost for the year of the proposed change on the income-tax is estimated at £2,000,000. This leaves a still disposable surplus of £1,833,000. The odd figure of £333,000 I will keep in hand for the contingencies of the year—not an excessive amount for the purpose. As regards the other £1,500,000 I propose to add it to the New Sinking Fund, making a fixed provision for the year of £29,500,000. Why do I do that? I have said I am not going to part with revenue, and I think the arrangements I have made are such as to show that I shall not suffer in revenue from the Budget proposals. I cannot part with this £1,500,000. I shall need the money for the future. I shall need it next year. In the meantime I make the best investment I can by diminishing pro tanto our national obligations. We recognise that the income-tax is a fiscal engine with which we cannot dispense. But we shall remove from it its greatest blot by giving effective relief in the form of a lower rate of charge to that class of incomes on which it presses most heavily. We shall have made a substantial, but

  1211
  not, as I have shown, an excessive addition to the toll which the State exacts from large estates which pass at death. We shall have fulfilled to a degree never attained, or even attempted, before on the same scale in any single year the discharge of debt.
  Then in regard to the future. There are urgent, long-delayed, and overdue problems of social reforms; and we shall have begun to provide the nucleus of a fund for the relief of necessitous old age. I shall have in hand next year, free and earmarked for the purpose, the £1,500,000 to which I have just referred, together with the uncollected arrears of this year's income-tax, amounting to £750,000, which will make a total of at least £2,250,000, and an additional sum from the increased estate duties. I count with confidence on further economies in expenditure; and let me add, as time goes on, nowhere with more hope than in the department of expenditure for the relief of the poor. And if I expect economies from my colleagues I appeal for them with still more emphasis to this House. You cannot have everything at once, or everything together; but if you have set your purpose, as I believe you have, and as we have, on this greatest and most urgent of social reforms, you must be willing to sacrifice, or, at any rate, to postpone other forms of useful and even beneficent expenditure. Nor are the resources of taxation, within free trade, yet exhausted. I make no prophetic estimate as to the future. There must always be in our calculations a place for the unforeseeable and the unforeseen. There are what we call accidents, shiftings, mutations, and vicissitudes of fortune, from which States are no more exempt than are the men and women who compose them. But, subject to those necessary reservations, I ask the House to sanction proposals which are intended to open the gate and straighten the way to a better and brighter future for our people.

  TEA.
  1. Motion made, and Question proposed, "That the Customs duty now charged on tea shall continue to be charged until the first day of July nineteen hundred and eight (that is to say) tea, the pound, 5d."—(Mr. Chancellor of the Exchequer.)
  MR. AUSTEN CHAMBERLAIN: It is almost superfluous on my part to praise the right hon. Gentleman on the merits of his speech, but I am sure I am speaking for the Whole House when I say that we have listened with pleasure to his statement, and with admiration to its form. But I am glad to think that I can go further than that and say that as to a considerable part of it at any rate I find myself in no great disagreement with the right hon. Gentleman cither in his survey of the situation or some of the changes he proposes. I do not propose at this moment to examine in any detail the financial scheme he has unfolded, still less to follow in that way the statement which the right hon. Gentleman has just made, but I should like to make a few observations upon that statement. Let me say at the beginning that I agree with the right hon. Gentleman that the credit of the country has been needlessly disparaged in some quarters, and that it is of course a patent fact that, when you allow for the change of the rate of interest, it not only stands to-day higher than that of any other country in the world, but that it stands higher than it did except on rare occasions in our own history. And, Sir, I agree with the right hon. Gentleman that, having regard to present conditions, it is expedient and desirable that special provision shall be made for the reduction of Debt. I am not one of those who think the permanent provision which we have made, especially when it is strengthened with considerable sums coming from the old Sinking Fund is insufficient as a continuous charge, but I do think that in the circumstances of the present time there are special reasons why we should increase that charge. I rejoice that the right hon. Gentleman has utilised a portion of the surplus which he anticipates in the year now entered upon for the reduction of Debt, but I must say, because it is the first time I have had the pleasure of speaking in the right hon. Gentleman's presence on the matter, though I had a passage-of-arms with his; right hon. friend on the War Estimates —I must say that I regret that the right hon. Gentleman abstracted £500,000 of what would have normally gone to the Sinking Fund for the purpose of carrying out the scheme adumbrated by the Secretary of State for War, for petting the Volunteers free from their liabilities.

  1213
  He intercepted that money which would have otherwise gone to the reduction of Debt, and the country remains burdened with debt from which, except for this extraordinary and unprecedented proceeding it would have been relieved. With another part of the right hon. Gentleman's proposals I am in complete sympathy, and I think I can promise him for myself and my friends, on the lines he has laid down, co-operation in dealing with the subject of local taxation, and his attempts to place the giants from Imperial taxation in favour of local rates, on a sound and substantial footing. Nothing could be more complicated or unsatisfactory than our system as it now stands, and as it has been described to the Committee by the right hon. Gentleman, and provided he takes care to secure that by his treatment the local authorities shall not be the losers either in the present or in the future, by the change that he proposes, I do not think he will meet with any opposition from this side. I hope he will go a little further and see whether it is not in the power of the Exchequer of the Government; to secure some further control over the; expenditure to which they contribute, or at any rate to see that the contributions they make go to the purposes for which they are intended. A grant is given and grants have been given over and over again in relief of local taxation, but have any local rates ever been more than momentarily reduced thereby? Is it not the common experience that within a short time of the contribution having been given to local taxation the rates have risen again to the height at which they were and even beyond that figure? There is no limit to local taxation except the limit put upon it by the patient or impatient ratepayer. It is worth considering whether in any change that is made in local taxation we can secure that the money given in relief of local taxation does go in reduction of taxation, and does not go towards encouraging local authorities in embarking in further unnecessary expenditure. The right hon. Gentleman has, as he said, made a statement covering a wider range than is usual on this occasion, and the Committee is the gainer by it. I thing it is a wise and prudent thing that we should from time to time take stock of our position, not merely as it affects one year but as it affects a series to years, as far forward as a Government
  1214
  or a Chancellor of the Exchequer may be expected to look. It is doubly necessary when the Chancellor of the Exchequer sees before him very heavy calls for new expenditure, and wishes to provide for new expenditure for which he cannot provide in the present year, but which he can only hope to provide for by gradually building up a fund with which to meet it. I do not think the review which the Chancellor of the Exchequer made of our resources is altogether an encouraging one, and it was at this part of his speech, no doubt necessary for purposes of his own, that the right hon. Gentleman quitted that dispassionate and non-partisan air which Chancellors of the Exchequer are apt to adopt in Budget speeches, and indulged in rhetoric and fireworks on the subject of free trade. I say "fireworks" because I do not wish to use a harsher phrase. I might borrow the phrase of the Under-Secretary of State for the Colonies and say that the right hon. Gentleman indulged in terminological inexactitudes. What was the situation he disclosed? That there was an ever-growing demand for social reform; a demand the growth of which was typified by his illustration of what has happened in connection with our expenditure on education, which in a period of about thirty-five years has risen from under £750,000 to £25,000,000. I echo what the right hon. Gentleman said that so far as that money is spent in providing education for the children without extravagance, and without waste, there is not one of us who would wish to cut it down. But there may be there, as some of us think there is in other cases, some expenditure for which we do not get an adequate return. So far as it serves the purpose to which it is devoted there is not one of us who desires to reduce it or who believes it can be reduced if you are to make economy, because as fast as you make an economy other growths will come up. As it is with other social reforms, the inevitable tendency is to grow. They begin with a small figure and inevitably grow. What are the resources out of which we have to meet them? The right hon. Gentleman said the revenues of receipts of last year are in some respects curious. They certainly are. I think he might add that they are to some extent disquieting. The right hon. Gentleman's great increase is in the Death Duties, and as he said

  1215
  himself very fairly, though they tend to average themselves over a series of years they are very uncertain in any year, from the point of view not of the condition of the tax, but of the consideration of the tax as an engine of revenue. The right hon. Gentleman also said that last year was a year of singular prosperity in trade, of increased profits and of growing wages. I do not think the wages have grown very much hither to, I am not quite sure in what sense the right hon. Gentleman used the term. There has been some growth in employment, and therefore some increase of wages paid, but I do not think the Board of Trade Returns show a very marked increase in the wages paid, although there has been some movement in that direction. But the greater the prosperity, the greater the sum paid in wages, the greater you would expect the revenue to be in articles of Customs and Excise. But those Returns are not satisfactory. We do not see in the Customs and Excise the evidence of abundant wealth or widespread prosperity which the Chancellor of the Exchequer finds, I suppose, in a survey of other facts and figures. I think the lack of growth in these items is rather disquieting. It produces this result, that while the Chancellor of the Exchequer is anxious to reduce taxation and to provide funds for social reforms, he is obliged to say the second object kills the first, and he cannot offer any remission of taxation. That is the doctrine I and my friends have been preaching for years; but the right hon. Gentleman denounces his opponents for defending a course he himself continues to pursue. To the consumer it does not matter whether one Chancellor takes a revenue from tea or sugar or another Chancellor takes it from corn. We have admissions as to hopes for social reform—in particular, old-age pensions; but on grounds of statesmanship and fiscal stability, you ought not to attempt to cary out those great measures, principally for the benefit of the poorer amongst us, wholly at the expense of those who are better to do in the world. I think his admissions will be useful, and he will find that the scarecrow, with which he has for a time succeeded in frightening the people, will lose its effect the next time he waves it over the electoral field. As
  1216
  regards the right hon. Gentleman's proposal to graduate the income-tax by means of a super-tax or other taxes, I observe that he did not decline ever to look into the matter again, but he indicated, at any rate, clearly and succinctly, the very great difficulty which would attend the practical application of any proposal of the kind. What he proposes, I think, at first sight appeals to all of us. He takes extreme cases on either side, for the purpose of illustration. He takes the case of a man who has £1,000 a year derived from Consols, and the case of another man who has £1,000 a year derived from his personal exertions. He asks, is it fair that you should tax these two men on exactly the same basis? I think all of us will feel that it is desirable to make a distinction between these two cases, but there is a little doubt whether the Chancellor of the Exchequer will be able to make the tax much fairer by the proposal which he has put forward. He will remove certain anomalies, but I think he will not remove anomalies altogether; I think he will only change the anomalies which are perpetrated instead of removing them from the tax. I was rather surprised in this connection that the Chancellor of the Exchequer made no reference to the evidence given by the Chairman of the Board of Inland Revenue before the Income-Tax Committee—evidence remarkably interesting, full of thought and value, in particular that part of it which dealt not only with the attempt at graduation, but with the question of differentiation, which was carried out by the present combination of Death Duties with income-tax. The right hon. Gentleman said he would not go into the question of the Death Duties, or whether they were deferred income-tax or not. I confess I do not think they are. I think that properly they are anticipated income-tax, collected from the heir at the moment he enters on the inheritance, and he has to make that good during the time he is in enjoyment of the property, always assuming that he is prepared to maintain the profits of the property, and is not prepared to see them gradually wasting away. If that be so, the Death Duties are in fact anticipated income-tax. The income-tax is collected not from the dead man after his death, but from the heir in

  1217
  anticipation of his enjoying the income. The moment you take the Death Duties as well as the income-tax into account, you have already a great difference between the taxing of a man who is receiving £1,000 a year from Consols and the taxing of a man who is earning £1,000 a year from his own exertions. The capital sum represented by £1,000 a year from Consols is taxed for Death Duties, and is taxed when the capital passes again. The capital represented by a man's life and strength, that is to say, what gives effect to and enables him to make his personal exertions, is not taxed, but only such money as he may have laid by at the time. I admit, nevertheless, that it is very tempting to endeavour to make a distinction between earned and unearned income. I am not, however, at all sure that the right hon. Gentleman has succeeded in distinguishing fairly between them. I am not quite clear what he proposes to do with a certain large class of property which he himself did not mention, but which he will perhaps be good enough to refer to when he speaks later in the evening. Under what category does he treat pensions? Will the civil servant's pension, which he has earned by his labours for the State, but for which he has ceased to labour, be treated as earned or unearned income? What about life interests of any kind? What about annuities? Are they to be treated as earned or unearned income? From the point of view of the recipient they are not in the same position as the money received from personal exertions; that is to say, that from the point of view of the receiver the income dies when the person dies. Of course, those incomes are derived probably from permanent investments; it is only the interest of the living person that dies with his death; the permanent investment still exists, and the interest becomes someone else's. How does the right hon. Gentleman propose to deal with that? It is obvious that we are only at the beginning of the subject, and that before we part from it we shall have to go into all those cases.
  MR. ASQUITH: There will be the definition clause.
  MR. AUSTEN CHAMBERLAIN: There will be a definition clause, but the right hon. Gentleman will have not merely to define, but to justify his definitions; he will not merely have to draw a line by putting it in one particular place rather than another. Again, I wish to refer to a very peculiar class of cases. How does the right hon. Gentleman propose to deal with income derived from land? I assume that he will treat the income of the farmer derived from land as earned income. But suppose the farmer is owner of the land, what will happen then? Is he going to treat as unearned the Sum which you would assume to be the rent of the land if it were let, or is he going to treat the whole income as earned if it be farmed by the owner himself? Take the case of a man who is not farming his own land, but makes it his business to do the management of his estate himself, his income being £1,500 a year. I do not know whether the right hon. Gentleman would wish to answer me at once.
  MR. ASQUITH: It will be more convenient to answer these questions together.
  Mr. AUSTEN CHAMBERLAIN: I put the case of a man deriving an income of £1,500 a year from his estate, which he does not farm, but which he manages himself; that is his business; is that income earned or unearned? There must be an answer. Of course, our attitude towards the right hon. Gentleman's proposals must depend very much on his answer. I put two cases. I say the person having a life interest in certain property bringing in a certain sum ought to be treated in the same category as the person who is earning the same sum by his own exertions, because the income in each case is dependent on the life of the possessor and cannot be bequeathed by him to someone else. Then I take the case of a man who owns land, manages his own estate, and derives an income of £1,500 a year, will say a sum under £2,000 a year. Why not put him beside the man who is making a similar sum by devoting his time to a manufacturing business? I should like to know whether the right hon. Gentleman draws any distinction between them, or whether he is prepared, as I think he

  1219
  should be prepared, to treat both on exactly the same footing. No doubt he is considering these matters, and there are other cases about which we shall have to ask him and which he himself will have to consider. I come to the last of the right hon. Gentleman's proposals, the increase of the Death Duties. I do not at all meet him in an attitude of hostility in regard to increased graduation on great fortunes that we see falling in from time to time. I do not wholly agree with him as to all the effects prophesied or which followed from Sir William Harcourt's reform. I think he is mistaken. I think it has tended to remove a certain amount of capital out of this country, it has tended to shut up a certain number of big houses, at any rate temporarily, with the result of very considerable hardship primarily on their possessors, besides distress and disturbance of the whole country-side. I ask the right hon. Gentleman to consider, when he is still further graduating these Death Duties, whether he cannot make some distinction between the taxation of capital which is readily available and capital which is not readily available for its purposes. Nobody can contend that the owners of great estates with their capital invested in the land are in the same position as those who have their money invested in securities or business. Their obligations are much heavier, and the difficulty of realising any portion of their capital is much greater. I have often felt that Sir William Harcourt, when he introduced the death duties, might with very little sacrifice of revenue have alleviated the cases of great hardship which arose under them if he had been willing to do so; and I now ask the right hon. Gentleman whether he can do something to relieve the worst cases of hardship under the present duties, which may be cases of even greater hardship under his new duties. I ask him to consider whether he cannot do this without sacrificing any substantial portion of the revenue he hopes to obtain. I said at the commencement of my remarks that I did not intend to go fully into the matters raised by the Chancellor of the Exchequer today. A statement of the character and scope of that of the right hon. Gentleman demands much further consideration than can be given to it by the speaker who follows him immediately in debate and
  1220
  the Opposition will have other opportunities of pressing their views upon him, of examining his reforms, and eliciting information as to the changes he has proposed. For the present I know how limited are the resources with which the right hon. Gentleman is able to deal, how little scope be has, bound as he is, quite, unnecessarily, by the declarations of the Party opposite — how little scope he has for enlarging his revenue, and how utterly insufficient is our present basis of taxation to provide the means required for the reforms which we all desired to see undertaken. Even when the right hon. Gentleman is prepared still further to increase the taxation on great fortunes and to increase direct taxation, it is obvious how utterly inadequate our present resources are to meet the needs of the State.
  *MR. GEOEGE FABERsaid there was at any rate no difference of opinion upon either side of the House amongst business men as to the manner in which the Chancellor of the Exchequer had dealt with the Sinking Fund and the reduction of the National Debt. Every hon. Member would realise that the late war put the National Debt into a very unfortunate, in fact a calamitous, position, and raised it by £150,000,000. The Sinking Fund was, of course, suspended during the war, but it had now been put upon its full working basis, and by that process the National Debt would be automatically reduced. They were all therefore very grateful to the Chancellor of the Exchequer for restoring the Sinking Fund to a strong position and for carrying to it a further sum of a million and a half sterling from the estimated surplus for the coming year. This year, when the temptation to devote such a surplus to other and more fascinating objects must have been very great, the Chancellor of the Exchequer had sturdily turned his eyes away from such temptation and had added the money to the Sinking Fund. He noticed that there was one exception to the general prosperity, and that was the market for stock and securities. They had only to look round the whole purview of the stock markets to see the enormous shrinkage that had taken place. There had

  1221
  been a shrinkage of at least 25 per cent in the great stocks of the country. Consols in 1899, before the war in South Africa broke out, stood at 106, and now they stood at 86. The blue rib and of railway investment stock, the London and North Western Railway 4 par cent. preference stock, stood at 140 before the war and now they stood at 115. There were many reasons for this fall. Why had Consols suffered this great drop? Partly owing to the late Lord Goschen's conversion scheme, which lowered the interest from 3 per cent. to 2¾ per cent. and later to 2¾ per cent. At the time Lord Goschen's schema was regarded as a great financial achievement, but the present position of Consols showed that it had been very disastrous from the paint of view of the interests of the country. It was quite true that the national Exchequer saved ¼per cent to begin with and was now saving ½ per cent., but it was possible to purchase that kind of economy too dearly. By reducing what was described by Lord Beaconsfield as "the sweet simplicity of the 3 per cents." to 2¾ and 2½ per cent. they had shaken out the small investors who were the backbone of Consols and I who in the past had been relied upon in times of financial stress. The little: men had gone, and who had taken their place? Largely the banks of the country and the Government itself. It was true that those now sitting in Opposition ware responsible for the war, and they were quite willing to bear that responsibility. There was another contributing cause to the fall in all first-class stocks, and that was the immense increase which had taken place in municipal expenditure, which now stood at more than half the amount of the National Debt. Why should they be surprised if Consols and other great preference stocks and securities dropped when they continued to water down the whole of the stocks and securities of the country in this way? Then again there had been an immense fall in the value of mining shares in South Africa. Everybody who knew anything about the question of South African mines knew that the shares were held in small lots all over the world, often by people of little means, although no doubt the mines were
  1222
  initiated by capitalists. In the winter of 1904 the stocks of thirty-six of the chief companies stood at £156,000,000 while to-day they were valued at about one-half.
  MR. MARKHAMsaid that half of the companies had watered capital.
  *MR. GEORGE FABERsaid that he knew the hon. Member's views on that topic. They were diametrically opposed to his own. He was pointing out that owing to the agitation against the mines, which had been most ill-advised from the point of view of finance, the value of the shares had fallen. The stocks of railway companies in this country had been immensely depreciated by threats made against them, and legislation apprehended in regard to licensed property had led to an enormous depreciation in the value of such property. He wished to say a few words in regard to a matter which the Chancellor of the Exchequer had not touched upon, namely, the gold supply. There had been a great deal of recent discussion about the scarcity of gold and about the gold reserve. Gold was only a commodity just like corn or meat or other marketable articles. The reason why there had been a great scarcity of gold was that during the past year business had been active all over the world with the result that there had been an exceptional demand for gold, and there had not been enough gold to go round. [Cheers.] He was not surprised to hear the cheers of hon. Members below the gangway. He was afraid that the Budget would not make gold circulate any more freely in the direction hon. Members desired. On account of the activity of trade the supply of gold had not been sufficient. The view he had always taken was that this country being still a creditor country only really required gold as a medium of internal exchange, and owing to her cheque system did not require the amount of gold for the transaction of business that some countries required. There had been a cry in many quarters about increasing the gold reserve, but he ventured to think that no such expedient was required.
  *THE CHAIRMAN: I really do not see the relevancy of these remarks even on a subject so wide as that now before the House.
  *Mr. GEORGE FABERthought that, money being the basis of the Budget, he would not be altogether out of order in making some general remarks on that subject. He had the honour of being a member of the Committee which inquired into the question of the income-tax. They all learned a great deal from the inquiries of the Committee, and he did not think that the Chancellor of the Exchequer's proposal of differentiation would be disagreeable to any Member who sat on the Committee. But he ventured to think that it would not be found anything like so easy as was imagined to work out the scheme of differentiation which the Chancellor of the Exchequer had stated to the House. The right hon. Gentleman had quoted the late Mr. Gladstone's objection to differentiation, but that objection applied with equal force now. The right hon. Gentleman did not meet the case at all. The widow's grievance referred to by Mr. Glads one remained. He instanced the case of a widow with an unearned income of £300 a year, and the case of a grocer with an earned income of the same amount. The widow under the present system of abatements got the benefit of an abatement, but she would not get any differentiation under the new scheme, whereas the grocer got both the abatement and the differentiation. The right hon. Gentleman had not at all got over Mr. Gladstone's objection. Let them look at the matter from another point of view. In the case of a mixed income—partly earned on capital and partly by personal effort—how were they going to differentiate? Cases of that kind could be multiplied, but he would take the case of a doctor who earned £1,000 a year. The doctor had bought the business, and in respect of the capital which he had paid his income would be unearned, while in respect of the personal effort he put into the business his income would be earned. Who was going to differentiate between the two? In the case of any trader who had bought a business with his
  1224
  capital, who was to decide how much of the income was earned and how much was unearned? Was the collector to decide how much of an income was unearned and how much came from personal endeavour? It would give rise to an infinite number of appeals. He was rather sorry to hear the right hon. Gentleman almost laugh at the hardships caused by the higher scale of Death Duties introduced by the late Sir William Harcourt. But apart altogether from millionaires, they all knew that there was a great intermediate class that had been most grievously burdened by those Duties. Let them take the case of a landed estate worth £150,000 on which the Chancellor of the Exchequer proposed to increase the Death Duties. It should be remembered that there might be large charges on that estate for the widow and the younger children and very little ready money with which to pay the Duties, thus necessitating a heavy burden of mortgage upon the estate. He did not think any increase on that class of estate was just. The millionaire was supposed to be fair game. That was true from one point of view; but it must not be forgotten that the millionaire was quite as necessary for the financial stability of this country as any other class. Some millionaires might have made their money by their own exertions. There were more who were made, perhaps, than born. The Chancellor of the Exchequer laughed at the idea that the Death Duties drove capital out of the country; but he maintained that that charge was true. Hitherto capital had found comparative security in this country. Capital was a shy bird, a cosmopolitan bird, having no country, but building its nest where it could best find security. If that security was destroyed, capital would go. He doubted whether it was good policy from the individual or the national point of view to increase the Death Duties. It was pointed out by Sir Henry Primrose in his evidence before the Select Committee that the Death Duties worked out on an average at an equivalent to an extra 1s. in the pound income-tax and on millionaire estates to an extra 2s. in the pound.
  MR. HART-DAVIESasked whether the pensions of Civil

  1225
  servants or of naval and military officers would be regarded as deferred pay or accumulated savings? He thought that the duty should have been taken off sugar, and that the Chancellor of the Exchequer was hardly correct in saying that to take off a small sum from that duty would have had no effect on consumption.
  MR. ASQUITHsaid he was open to argument as to whether for the purposes of the income-tax pensions should be treated as deferred pay or accumulated savings. That was one of the questions which was discussed by economists in both aspects. He himself was disposed to regard pensions in the light of accumulated savings. A farmer who earned his income would be entitled to pay income-tax at the rate of 9d. instead of 1s. in the £1 if his income was under £2,000 a year.
  MR. GEORGE FABERasked what about the landlord who acted as his own agent?
  MR. ASQUITHsaid that in the case of a landlord who farmed his own land or acted as his own agent he had to make out his return; and it was for him to show that he was entitled to the low rate because his income was earned.
  MR. SAMUEL ROBERTSsaid he would like to join with the late Chancellor of the Exchequer in offering his congratulations to the right hon. Gentleman on his Budget statement. He believed that a great part of that Budget would be approved of and give satisfaction in the country. The right hon. Gentleman did nothing for indirect taxation. That was good, because last year indirect taxation had been reduced. Something had been taken off the duties on sugar, tea, and corn, but nothing had been taken off the income-tax, although the right hon. Gentleman had associated himself with the opinion of his predecessor that it was impossible to justify or defend an income-tax of 1s. in the pound in a time of peace. However, his first criticism of the proposal of the Chancellor of the Exchequer was that he ought to have made a. general reduction of the income-tax
  1226
  from 1s. in the pound. He was quite sure that the right hon. Gentleman's proposal to reduce the income-tax to 9d. only in certain cases would not have been approved of by Mr. Gladstone, who always regarded that tax as a temporary and not a permanent tax. On one occasion Mr. Gladstone proposed that the income-tax should be imposed for only seven years, and in 1873 that it should be taken off altogether. He contended that the income-tax payers in the country with incomes below £700 had borne more than their fair share of the burden of the war taxation, and at present direct taxation for war expenditure amounted to £15,000,000, and indirect taxation to only £8,000,000. He knew that the right hon. Gentleman said that he would devote the large sum of £1,500,000 to the Sinking Fund, and they were naturally pleased that the Chancellor of the Exchequer should keep that fund up. The right hon. Gentleman seemed to propose to pay off £13,700,000 odd and in addition this £1,500,000 was to be paid into it, so that £15,200,000 was to be devoted to that purpose. He understood however, that this payment of £1,500,000 into the Sinking Fund would not bind the Government to its allocation to the purpose of reduction of Debt next year, the object of the Chancellor of the Exchequer being to form a nucleus of a fund for old-age pensions. He entirely agreed with the basis the right hon. Gentleman had laid down as to this question, viz., that it must be approached step by step, and that they could not at once launch the country into extravagant expenditure. He also agreed that this benefit should be given to persons who were suffering through no fault of their own. It seemed to him that the only safe way to proceed was for the State to contribute a certain amount which should be met by the contribution of a similar sum by the local authorities. On the whole he thought the statement of the Chancellor of the Exchequer was highly satisfactory.
  *MR. REESregretted that the Chancellor of the Exchequer had not taken another penny off the tea duty this year. No article had a greater claim upon a Chancellor

  1227
  of the Exchequer, because it was to a large extent raised by British capital in British possessions, and the use of it also forwarded the cause of temperance, while it was the comfort, little luxury, and indeed necessity of the poor. He hoped that the right hon. Gentleman would consider that, as they had not had the penny remission this year, it was owing to the tea consumers in Great Britain and planters in India and Ceylon, who were our fellow countrymen, to take off 2d. next year. As the right hon. Gentleman had said, the price went up last year, but that was because of the failure of the crops and the depletion of the stores of retailers in anticipation of the Budget. The price of the cheaper teas ran up, he believed, to as much as 3d. a pound more. Another reason for the increase was the active enterprise of those engaged in the tea industry in India, who had endeavoured to develop the German and Russian markets. He himself had taken part in that movement though he had not a penny piece invested in tea. There were other parts of the world, like Finland, where at present coffee was mainly used, but in which tea had only to be introduced to create a trade. If this additional 1d. had been taken off it would have led to a great development of the industry, and have employed more British capital and labour. Another fact was that owing to the large tax which had prevailed in the last few years planters had been discouraged from extending cultivation, and this coupled with the expansion of the market had led to the high price of tea, to the great disadvantage of the poor people of this country. He had hoped that the Chancellor would have taken these matters into account, because if the penny was of no value to the consumer, and did not reach him, as was argued, and the been which he gave last year was on that account wasted, there was the more reason for a decrease, and what was wanted now was the extra penny to make the been efficacious. He would not go at greater length into the question of tea, because a memorial had been circulated among Members for which he was in part responsible. He wished however to call attention to the pensions of British officers and civil servants, and would
  1228
  strongly urge that they should be regarded as earned income and deferred pay, and not as accumulated savings handed over by the employers on retirement, and thus come under the lower rate as to income-tax. These people had often had very little pay and were often hard put to it to maintain themselves and their wives and to educate their children. They had been accustomed to some comfort and to a certain position, and he put it strongly that their pensions should come under the most favourable rate. As to the man with an income of £2,000 a year, would he enjoy the more favourable rate in respect of any portion of it which he earned?
  MR. ASQUITH: If his income exceeds £2,000 a year he will not enjoy anything.
  *MR. REESsaid he understood that as to the £1,500,000 which was to be placed in the Sinking Fund and was to be the nucleus of a fund for old-age pensions the Chancellor of the Exchequer intended to take it out next year or to ear-mark it for this specific purpose.
  MR. ASQUITH: I have no power to take it out. I only propose to devote it to that purpose if the House agrees. If they do it will be for Parliament to take it out.
  *MR. REES: Yes; but Parliament had power with the Exchequer and the Chancellor had Power with Parliament, and he did not altogether understand how this sum was secured for this purpose. When his hon. friend opposite was speaking he made some remarks which met with considerable disapproval on the Ministerial side. The hon. Gentleman pointed out that the capital of the gold mines in South Africa was was now distributed among a great many small investors of this country and was not the property of capitalists in South Africa. That was true, and he desired to take that opportunity of expressing his concurrence with a statement which any one who would take the trouble to go to the city might verify for himself. There could be no doubt, moreover, that the competition between the

  1229
  Government and the municipalities on the one hand and private traders on the other must lead to dislocation and difficulty in regard to labour and industry in this country. For instance, if it was right for the Government to give employment as a matter of relief rather than as a matter of business in a particular constituency, such as Woolwich, then it was right and proper to give such employment in other constituencies where there were no Royal Arsenals, one of which was the Montgomery district. There was no justice in giving to one constituency what was not given to another, and the public purse was the property of all constituents.
  SIR F. BANBURYsaid he wished first to congratulate the right hon. Gentleman in being able to devote £1,500,000 to the sinking fund, because when the country was in funds as it was at present was the time to do so; it could not be done when we had no money. The right hon. Gentleman had given some reasons for the deplorable state of affairs which he said existed in the stock markets, but there were other reasons which the right hon. Gentleman did not recognise, or at all events did not put before the House. The right hon. Gentleman said the Radicals were pledged to restore the national credit, and referred to wild talk in the newspapers on the price of Consols, and then said that 2½ per cent. stock at 82 was equal to 3 per cent. stock at 100. He quite agreed that there had been about the national credit a lot of wild talk which was not justified, but that was not the argument used by the right hon. Gentleman a year ago. When that argument was used by the Unionist Party the price of Consols was 85, and it was only after the advent of the right hon. Gentleman as Chancellor of the Exchequer that they touched a lower point than they ever touched when the Unionists were in power. Although there was a good deal of point in the contention that the credit of the country had not materially suffered, he did not think the Party of the right hon. Gentleman had redeemed their pledge to restore the national credit. The right hon. Gentleman said that fresh
  1230
  issues had a great deal to do with it; that the trust list had been extended and Colonial securities had been admitted, and that excessive borrowing of municipalities had a great deal to do with it. All that was true, because as they returned a higher interest than Consols, the tendency was to sell Consols and put the money into municipal and Colonial stocks. He did not quite see how the right hon. Gentleman brought in the catastrophe in America, because although it was suggested that a number of stocks were going to be sold by the insurance companies he did not think that ever occurred. The fall in Consols had been going on for some years. The right hon. Gentleman had also alluded to Irish land stock, which certainly affected the price of Consols. And it should not be forgotten that while the right hon. Gentleman had reduced the National Debt by £13,000,000 he had issued large amounts of Irish land stock which was just as much a part of the National Debt as Consols. He admitted that the right hon. Gentleman was not really responsible for the issue of Irish land stock. He himself voted against the issue of stock for the purchase of Irish land, and he believed that if the thing had been done properly no special stock would have been issued but Consols. What was the use of buying up Consols which paid £2 16s. per cent. and issuing Irish land stock at £3 5s. per cent. That represented a loss of 9s. to the taxpayer, and such a proceeding could not be justified by any principle of sound finance. Another reason for the drop in Consols and other securities generally was that at one time people were content to invest in English securities because they thought that though the interest was low the security was undeniable, and they would not invest in foreign securities because they thought the security was not so good. He was sorry to say that owing to the action of the Party opposite there was a strong impression in the minds of people who had money that it was better to invest it out of England. That was another reason for the fall in Consols, as he was able to prove. It was a fact well known to every stockbroker in the City of London. He asked the right hon. Gentleman in all seriousness to investigate

  1231
  that statement, and, if he found it was true, to do something to strengthen stocks in the stock market and do away with that want of confidence which prevailed in the case of English stocks. He regretted that the right hon. Gentleman was going to put employers to the trouble of stating the wages paid to all their employees, because it would put a very great tax upon them, especially on such companies as railway companies, who employed sometimes as many as 20,000 men. It would entail very great labour.
  MR. ASQUITHsaid the idea was not his. he had taken it from Lord Ritchie.
  SIR F. BANBURYsaid that everybody was liable to make mistakes, and Lord Ritchie was as liable as anyone else. As this was not the idea of the right hon. Gentleman he hoped he would not persist in it. They must not forget also that the income-tax was instituted as a war tax, and that it was desirable from the Government's point of view to keep it as low as possible in order that they might have a little in reserve for times of emergency. He hoped the right hon. Gentleman would consider the points that had been put to him.
  *MR. CHARLES ROBERTSsaid he wished to draw attention to the statement of the Chancellor of the Excheqer that the decline in the consumption of alcoholic liquors, of which he told them last year, had now suffered a check, and that there had been a slight but distinct set back. The drink Bill had gone up some £2,000,000 in the last year. The effect of his statement last year in which he traced the decline of the drink Bill from the year 1899 onward was to produce in the minds of many Members and of the country as a whole the sense that everything was going on all right, that all was for the best in the best of all possible licensing worlds, and that this very difficult problem might be left to settle itself. However, if they took a retrospect of ten years, this diminution practically disappeared, and if they went back further, it would be found that they were drinking more to-day than they did, say forty years ago. It was impossible to leave this question on
  1232
  one side, and he felt convinced that the Government did not mean to leave it undealt with. Now, some of them had been looking to the Budget statement with eyes of hope, and they were glad that there was going to be the alteration in the licence duties under which they would be recovered for the National Exchequer, and no longer go for the relief of local rates. That was, administratively, a great improvement, and they were glad that the step was going to be taken. At the present time, in some cases, local authorities could get £5,000 or £7,000 on the grant of new licences, in relief of rates, and it was very desirable indeed that that temptation should be taken away from the local authorities, and that these sums, which really were not due so much to local action as to the general policy of the State, should be recovered for the Exchequer. But they could not help wishing that the Chancellor of the Exchequer had seen his way to go further in the matter. The case was overwhelming for a revision of the licence duties. When Mr. Gladstone introduced the revision of the licence duties in 1880, he based it on the principle that Parliament had been engaged for years past in bolstering up monopolies and in adding to the artificial value which attached to public-house property, and which in his opinion were the most deadly and inveterate enemies with which temperance reformers had to deal. The principle referred to by Mr. Gladstone in 1880, after the act of 1904 which for the first time recognised a continuing interest in the licence, would in itself have justified a further revision, and a much more severe graduation of the licence duties. Many temperance reformers had altered their view in reference to that matter. In the past they were suspicious of raising more revenues from this trade; but now that the State, by the Act of 1904, recognised a continuing interest in the licence, it was borne in upon the minds of temperance reformers that the charging of a real licence duty and not the sort of peppercorn rent charged at the present time, would have a substantial effect in reducing the excessive number of licences, and especially that undesirable class of licences, which were merely on the margin of subsistence, and might very properly be put an end to. That was the reason why some of them

  1233
  were anxious for this revision of the duties. But under this Budget, at all events, they could not get the Reforms which might have come out of the revision of the duties. The Chancellor of the Exchequer held out hopes that it might come next year. "Man never is but always to be blessed." Some of them were tired of endless postponement, and he would like to convey to the mind of the Government that there was a growing feeling of impatience and anxiety at the delay in dealing with the question of temperance reform. If nothing could be done in the Budget there was increased urgency for dealing with the question by other means, and he hoped that the Government would, in framing their plans for the coming session, bear in mind that so far nothing had been done to redeem the strong assurance given by the Prime Minister last year that he would grapple with the problem of licensing reform. One further reflection occurred to him. If the duties were not revised this year, they retained at least in their hands a weapon over which the House of Commons had complete control. Licensing reforms were usually bitterly attacked, and, so far as legislation was concerned, they knew that the House of Commons had not complete control as it had over matters of taxation; he did not, however, think that the licensing reforms of the Government, when they were finally proposed, would suffer shipwreck in another place, but if that did happen, he hoped that the Government would not scruple when the time came to use their power over taxation, by which, at all events, they could accomplish some small instalments of temperance reform which had been so long delayed.
  *MR. VICTOR CAVENDISHsaid that though they had heard a clear statement from the right hon. Gentleman, yet he must confess that it was not satisfying, and it left a great deal over to another occasion. So far as he was able to judge, after listening to the statement, they were already confronted with an expenditure of £119,000,000, and there seemed no prospect in the near future of any reduction of that expenditure. On the contrary, the right hon. Gentleman was unable to give them any hope of a reduction
  1234
  of taxation; he had to keep all he had got, and probably there might be further inroads on the taxpayers in future. A considerable amount of legislation had been promised, and only a very small proportion of it had yet been placed before the House. The general experience now was that legislation usually meant money. None but Members of the Government knew anything about the proposed legislation. Two important Bills for Ireland were named in the King's Speech, and they did not know whether they would involve any charge upon the taxpayers or simply mean are allocation of sums already voted. Then there was the proposal of the Secretary for War, whose scheme for a Territorial Army must prove very costly, and he would like to know what provision had been made with regard to that. With reference to the principal point of the Budget, he thought the right hon. Gentleman was to be congratulated on the intention to recover the licences into his own hands. With regard to the new proposals which the right hon. Gentleman had laid before the House making a differentiation in the death duties, he would like him to consider seriously whether something could not be done to give a further reduction in the case of estates, where the greater part of the owner's income might be derived from land. He thought the Chancellor of the Exchequer was a little too sanguine when he ridiculed some of those prophecies which were put forward when Sir William Harcourt introduced his great reform. He believed that the death duties had caused the withdrawal of a certain amount of capital, and undoubtedly there had been a tendency in many places, if not to close estates, to spend less money upon their development than would have been the case but for the heavy burdens which had been placed upon them. He hoped the right hon. Gentleman would consider the various classes of property which had to boar these heavy burdens, and that he would be able to make a differentiation in favour of landed estates. He congratulated the right hon. Gentleman on what he had done with regard to the income-tax, and still more on what he had not done. The Chancellor of the Exchequer, he hoped, would not depart from the lines which he had laid down. With regard to the super-tax he was

  1235
  pleased that the right hon. Gentleman had not finally made up his mind, and that he had left the principle of the graduation of the income-tax to be dealt with upon some other occasion. He hoped that during the interval any consideration he might give to these questions would not induce him to make any departure from the lines he had laid down. The imposition of a super-tax must entail a full declaration in regard to all incomes from whatever source, and that course would not only be resented, but it might prove extremely disastrous to the tax as a whole. He would advise those hon. Members who expected to see a large amount of revenue raised through a graduation of the income-tax to read the admirable memorandum presented to the Committee by the Chairman of the Board of Inland Revenue. The idea of graduation had a certain amount of attraction about it, but when it was examined in detail and thoroughly threshed out it would be found not only that it would prove very irksome to the country, but that it would have a most disastrous effect upon the revenue. To draw distinctions between the various classes of income-tax payers was open to considerable objection. He did not know any distinction which would not be open to some objection, but from the experience which he gathered on that Committee and from the evidence which they heard he thought the line the Chancellor of the Exchequor had taken was the one least open to objection. On the whole it was the fairest, and although there must and would be innumerable hard cases, still he was of opinion that if the House of Commons was determined to adopt any distinctions of that character that which the Chancellor of the Exchequer had drawn was perhaps the best. They would, of course, wait to see his definition clause before offering further criticism, and they would have to discuss further the Budget as a whole. In conclusion he wished to congratulate the right hon. Gentleman upon not having allowed himself in dealing with the income-tax to be led away from really sound principles of finance by any plans however attractive they might seem.
  MR. ASQUITHsuggested that the Committee should pass the non-conten-
  1236
  tious Resolutions, and that the general, discussion should be taken on Monday, when the Resolutions relating to income-tax, death duties, or local taxation were brought up.
  MR. AUSTEN CHAMBERLAINthought that was a fair offer, and he had no objection to that course being taken.
  *MR. C. E. PRICEasked whether the Chancellor of the Exchequer intended that the notices issued for the collection of the income-tax should be issued in September in Scotland. He thought that course would cause a great deal of difficulty, and if there could be some intimation that the notices would not be issued until after the payment of the November term rent it would prevent a great deal of trouble. These notices in Scotland were different from those issued in England, and, if without giving the exact words, the right hon. Gentleman would assure them that those notices would be issued in precisely the same form in England as in Scotland, they would feel no injustice. With regard to the tea duty, he was glad that there had not been a reduction of one penny per pound, because he thought it was a mistake last year to take off a penny. When the tea duty was reduced only by a penny the consumers did not receive any benefit at all. The primary object of the House of Commons in dealing with such questions ought to be to see that whenever a reduction was made it was done in such a way as to ensure that it did benefit those who were intended to be benefited. With regard to taxes on food, he did not gather that even next year the Chancellor of the Exchequer held out no hope that any changes would be made. He thought the right hon. Gentleman had laid the foundation for a complete alteration in the finances of the country, and he congratulated him upon his proposals. He approved of the alteration suggested in the system of local taxation, but he was not in favour of giving grants in aid.
  *COLONEL R. WILLIAMSsaid the right hon. Gentleman had spoken a good deal about the solid and growing prosperity of the country. He wished he could feel as optimistic as the right hon. Gentleman.

  1237
  did as to the probability of that prosperity lasting. He thought there was a great deal which was not so solid in our trade as could be wished, and a good many of the symptoms in the country did not portend the continued prosperity for which they all hoped. When talking of his scheme of social reform, the right hon. Gentleman, he was glad to hear, paid due regard to the importance of character as a basis of the prosperity of the country. He welcomed those words as representing the considered opinions of His Majesty's Government, because they would tend to allay a good deal of alarm as to what might be called social reforms, which might possibly alter some of our social conditions, and certainly not improve the prospects of the country, by loading rather to dependence on Government than on one's own force and strength of character. He hoped the right hon. Gentleman would carry out his scheme of old-age pensions. He himself had always been an advocate of old-age pensions. He had watched the driving power in favour of old-age pensions gradually growing, and he was glad to think that it was coming near the time when they would lie able to accomplish something, though he hoped it would not be all that was expected in some quarters. The great difficulty to his mind in regard to old-age pensions was the fear of sapping self-reliance and lessoning the inducement to lay by in younger years. He therefore specially welcomed what the Chancellor of the Exchequer had said about self-reliance in all schemes of social reform. He hoped the right hon. Gentleman would carry out the principle of self-reliance in another matter which he mentioned. He congratulated him on having the boldness to deal with the local taxation account. While that account was well conceived in intention, its use had been so altered that it had been nothing but an incubus to our national finance. He hoped the right hon. Gentleman in granting subventions to local authorities would lay down that the grants would depend on whether it appeared from their management of their affairs that the local authorities deserved them. One of the great merits of the scheme propounded by the Committee on the Reform of Local Taxation, presided over by Lord Balfour of Burleigh, was that the
  1238
  amount of the subventions from the Consolidated Fund to local authorities would be regulated by their deserving them, the subventions being larger with the poverty of a district us proved by the smallness of the amount produced by a penny rate, and with the economy with which the local affairs were administered, as proved by the lowness of the poor rate. The Chancellor of the Exchequer had stated in the course of his speech that war taxes ought to be applied to the paying off of war debt. He was sure all Members of the House agreed in that. The right hon. Gentleman had further stated that the war taxes produced at present about £20,000,000. If that was so, the right hon. Gent Ionian had fallen away from his own dictum, for in this year he had been paying off only £15,000,000. Like the right hon. Gentleman, he was very much in favour of the reduction of Debt, but he was not sure that he agreed with what was proposed to be done this year. One plan which the right hon. Gentleman had proposed for the alteration of the incidence of the income-tax, removed the burden from only a small portion of the number of the taxpayers. It would relieve part of the burden from about 210,000 payers of the tax out of about 850,000, or not quite a quarter. It had been stated that this would absorb some,£600,000; in addition to which £1,500,000 were paid off the Debt. But these two sums together amounted to £2,100,000, or nearly 1d. on the income-tax, and if the Chancellor of the Exchequer had remitted the 1d. from the whole of the payers of the tax, he would have provided a larger reserve in case of need in the ability to reimpose the penny. He would not go into all the difficulties in regard to the Chancellor of the Exchequer's scheme of differentiation. He thought the principle of making a differentiation between earned and unearned income was as sound as any differentiation could be—probably more sound and defensible than most, if not all, the others. Of course it would lead to a great many difficulties. He imagined that the greatest difficulty would be in the framing of the definition clause in the Budget Bill dealing with this question. He thanked the Chancellor of the Exchequer for the tardy act of justice he had done to a long-suffering

  1239
  class, namely, the beneficed clergy, whose incomes were to be included in the category of earned incomes. There was no doubt that they were freeholders; they were so in right of service, and the amount of their freehold was therefore reaily earned income. The freeholds were granted in very many cases to the parishes to provide for their spiritual needs. As to the taking of 3d., in the pound off incomes which were earned, he wanted to know whether that was to be a fixed sum. If the income-tax was reduced to 10d. would the earned incomes be taxed at 7½d.? In other words, was the tax on earned incomes always to be 25 per cent. less than that on unearned incomes? If that was so, there was another difficulty which would have to be met. They never dealt with halfpennies in connection with the income-tax, and if the Chancellor of the Exchequer wanted to increase the tax it would have to be by 4d. at a time. He did not quite know why the differentiation should be 3d., but if that was to be a fixed sum those who were entitled to it would bear a larger proportion of the burden than those who were not entitled to it in the event of the tax being increased to (say) 1s. 3d. in the pound, and a smaller proportion than their share if it was reduced below 1s.
  *MR. SCOTTsaid he regretted very much that no relief had been given in respect of sugar. In addresses up and down the country, and in answer to deputations, the Chancellor of the Exchequer had expressed himself as freely as any-Member of the House on the iniquity of the sugar tax. In a speech delivered to a deputation the right hon. Gentleman said it could only be a temporary tax, and that it would not be made a permanent impost. In the speech delivered to-day the right hon. Gentleman had outlined a scheme of old-age pensions which would come on twelve months hence. He could only conceive of that, and other beneficial measures, being carried out by making the tax on sugar permanent. If that was so, it meant the breaking of pledges which had been made right and left in the country. The sugar tax was put on as a war tax. He agreed with the Chancellor of the Exchequer that after a war they could not pay off the debt all at once. He contended, however, that sugar was just
  1240
  as deserving of relief as tea. [An HON. MEMBER: More.] He entirely differed from the observations of the Chancellor of the Exchequer in regard to the sugar duty and its reduction. There would not be the slightest difficulty in either the wholesale, retail, or manufacturing trade. Every grocer and storekeeper regulated the quality and price of his sugar to a farthing in the 1b., and if the sugar duty were reduced one half, the price would be reduced in every shop in the country by a farthing in the 1b. Again, the tax on sugar was out of all proportion to its value, amounting to from 35 to 40 per cent., which was a tremendous tax on food and on the raw material of many industries. So much had the tax on sugar been felt that prosperous industrial concerns depending very largely on sugar as the raw material of their manufactures had ceased to pay dividends; and labour employed in these industries, some of them of great magnitude, had suffered very materially. The tax affected not only sugar itself, but a thousand and one articles which were brought to this country. For instance, there was a tax on tins of fruit according to the sugar in them. Then there was the Custom House inspection, which disorganised business. He had seen a gentleman in the lobby that day who told him that the sugar tax put him to an expense of £6,000 a year in a department dealing with the Customs, an expense which he could not possibly get out of his customers. He hoped when the Chancellor of the Exchequer came to reply he would give them to understand that he was not going to look forward to this tax being made permanent. He knew that the directors of great industries in which many millions were locked up, and which were not paying one per cent. on the capital invested, would look at this Budget with great disappointment.
  *MR. BRIDGEMANsaid that he could not recall a previous occasion on which the Chancellor of the Exchequer had asked the House to agree to his Budget Resolutions after only two hours debate. He did not think the right hon. Gentleman was quite fair to the members of the Select Committee on Income-Tax when he said they had practically agreed that it was desirable that they should differentiate the income-tax. He could not think that, because

  1241
  that was not within the terms of their reference which directed them to consider the practicability, not the desirability of it. He would have preferred that the Chancellor of the Exchequer had not gone into the scheme of graduation which he had submitted, not because he objected to graduation, but because the scheme would create a large amount of work for the officials without any certainty of that work's being productive. He would have preferred if the right hon. Gentleman had confined graduation and differentiation to the death duties, especially on large estates. There were one or two regrettable omissions from the Budget speech to which he wished to call attention. Last year the Government were prepared to spend a million on what they described as education, although that million would have been devoted entirely to destroying denominational education in voluntary schools. If the Government were as interested in education as they professed to be, he would have looked to their forwarding the interests of education in the country apart from denominational teaching. He maintained that education required further assistance from the Treasury. He had always held that the Bill of 1902 formed an educational ladder by which the children of the poor could climb from elementary to higher education; and to some extent it had fulfilled that idea. But the reason why it had not been more successful was that the duty of providing scholarships was left far too much to local enterprise rather than to contributions from the Imperial Exchequer. The burden consequently fell more heavily on the poorer counties. To his mind it was a mistake in principle that that ladder should be dependent on the local rates rather than on grants from Parliament, and he would have been very glad if the Chancellor of the Exchequer had given this year £500,000 to found scholarships in the poorer counties for poor children so as to make the Act of 1902 more effective. There was an entire omission from the speech of the Chancellor of the Exchequer of any reference to the important agricultural industry. A year ago, there was a very line sentence in the King's Speech, setting out that His Majesty's Government were considering proposals for attracting people to the land, and retaining them
  1242
  upon it. Those proposals did not amount to very much, and this year it was only in the last item but one in the Kings Speech that reference was made to a small measure for an alteration of the law affecting small holdings. Looking to the fact that it was almost universally admitted that agriculture bore a higher amount of taxation than any other industry, it could not be expected that people would be attracted to the land, until the land received some relief from taxation. They could not be content with vague proposals. There was no proposal to relieve local taxation further than it had been relieved, and there was no proposal to give any money towards the increase of small holdings. There was another question in connection with the land which the Chancellor of the Exchequer had left out of account, and that was the position of the owners of agricultural land with regard to their assessment for the purposes of income-tax. They had for many years suffered from very great injustice in that respect. For some reason or other the Party opposite never felt themselves in a position to see justice done to anyone who called himself a landlord, and it did not appear likely this year at any rate from what they had heard, unless there had been an omission from the Chancellor of the Exchequer's speech, that justice was going to be done. The rural landlord, the man who possessed, say, nothing whatever except agricultural land, and that perhaps of no great value in the way of letting, was paying far more in income-tax than any other kind of income-tax payer in proportion to what he had received. There was an arbitrary deduction from his assessment of one-eighth in respect of agricultural land, and the deduction was one-sixth in regard to houses. The latter for a landlord in a town might be a reasonable deduction, but for a landlord in a country district it was absolutely unreasonable and unfair. He did not believe that they could find one landlord in ten in country districts who did not spend more than one-eighth of his gross income upon his property, and he netted nothing like seven-eighths of his total income. Not one of these country landlords had a desire to escape from paying his fair share of the taxation of the country and paying the same share as other people paid. He did not think

  1243
  that anyone could say that the country squire was less patriotic than any other class in the country. He was ready to to pay his fair share, but because he was willing to do so was no reason why justice should not be done to him in this case. It could be done in this way if the Chancellor of the Exchequer would agree to it. The Chancellor of the Exchequer said he thought it would be an admirable thing if everybody made a declaration of his total income from all sources, and he expressed his keen desire that it should be done by them all, although he said he did not think that it was likely that everybody would do it. At any rate, the owners of agricultural land would have no objection whatever to make that declaration, and he thought it would be only fair to allow them the opportunity of being assessed on the net income which they got out of the land. The best landlords spent most in keeping their property in good order and in doing what they could to help their tenants; and if their property contained a number of small holdings they had to pay more out of their income than other landlords. If the Government were going to say that the man who did most for his land and most for his tenants was to pay more income-tax than anyone else, they would be endorsing a principle which was unjust, and was; becoming more unjust every day. If one-eighth was a fair proportion the Government would got a statement to that effect from those who made a declaration of their income, but a vast proportion of the rural landlords spent a great deal more than that, something more like one-half, not in improving their property, but simply in preventing its deterioration. These people ought to be assessed on the money which they pocketed just as much as other people, and justice which had been too long delayed ought to be done to them in the Budget which had been brought in that day. If the Chancellor of the Exchequer would consider these points he would have his support to his Budget, which in many
  1244
  ways he admired very much, but he thought the right hon. Gentleman had a great opportunity at a time like the present and in a Budget which had received support from all quarters of the House, of redressing these absolutely incontestable grievances which would no doubt have been removed but for the idea that no Liberal Government could do anything in the way of justice for anyone who called himself a landlord.
  *MR. MADDISONsaid it was necessary to find a justification for a Budget which did nothing to repeal indirect taxation, especially in the case of sugar, which wan both a food and a raw material. The tax on sugar operated in an injurious way in both directions, and he confessed he waited for the declaration of the Chancellor of the Exchequer on that point with considerable interest. He had not, however, the slightest difficulty in finding a justification for the Budget, in spite of the non-remission of any indirect taxation, because the Chancellor of the Exchequer had made it perfectly plain that he was not bringing forward a showy Budget, the chief claim of which would be for the moment to be called popular, but that he was attempting to reorganise our national finance on a sound basis. For many years he had taken a good deal of interest in the promotion of old age pensions on the lines suggested by Mr. Charles Booth, and it was because he was a convinced opponent of State socialism that he had always felt that there was a real case for dealing with the aged poor who, through various causes, found themselves—not by any means all of them helpless, but in such a condition that public money might well be devoted to succouring them in the twilight of their lives. There was a good deal of vague talk indulged in by all classes, including the working classes, who got hold of huge figures and said that with all this wealth surely the Government could bring forward at once an old-age pension scheme. He knew it would be said

  1245
  that the rich had been looked after and the poor had been neglected. Although he had never handled large sums of money, he was sufficiently acquainted with these things to know that national finance had a direct bearing upon the trade of the country, and, after all, the first consideration was to get national finance sound, so that the trade of the country in the operative part of a man's life should also be prosperous. He wished to say he regarded the Budget—much as he would have liked to have seen a remission of the sugar tax or part of it, and much as he would have liked to have seen this year old-age pensions established—as one which would be welcome to the great mass of the people and one which he could support without apology or qualification, because the Chancellor had united two things, namely, sound national finance and social reform. This was the first Budget in which there had ever been a distinct pledge on the part of the Government to introduce during the life of this Parliament and even in the next session, if another House would leave them alone — a measure under which a start would be made with a scheme of old-age pensions. He ventured to say that no reasonable man, and one need not trouble about unreasonable men, could expect more in the second session of a Parliament than that which they had been offered that afternoon. A good many of them felt so strongly about old-age pensions that in order to secure them they would be prepared to assist the Government in resisting every fanciful scheme which might come into hon. Members' heads and which they thought might make the people better. There was no piece of social amelioration which had so solid a backing, not only by the working classes but by tradesmen and others who had realised that there was no more pressing need than old-age pensions, and they would support the Government in pressing forward this scheme. If, however, the Government embarked upon artificial methods of keeping the people unem-
  1246
  ployed in farm colonies which would cost huge sums of money, they would raise a feeling in the country against them, whereas they could carry the opinion of the country with them by putting their finance on sound lines which, while meeting the requirements of the country as a whole, would enable them to carry out great schemes of social reform. He had only one further word to say as one who endorsed the principles — he did not say every word he wrote—of Henry George in respect of land; and it was, that that great uncreated monopoly had never yet yielded to the community what it ought to have done.
  *MR. RAWLINSONsaid he had ventured last year to call attention to the most overtaxed members of the community, namely, professional men such as clergymen, doctors, and lawyers, with, say, an income of only £300 a year and upwards, and he said that these men were bearing an undue proportion of taxation. The Chancellor of the Exchequer had met the claims of those men to a considerable extent, and for that concession he was grateful, because the right hon. Gentleman proposed (rather illogically he thought as to the limit selected) to reduce the income-tax on earned incomes below £2,000 from 1s. to 9d. For that, as he had said, he was grateful, but if it was not ungrateful to look a gift horse in the mouth he might venture to criticise the limitation of the concession; he certainly must say it was not logical, but probably it would be ungracious to make a comment upon that, because those whom he wished to assist did not possess incomes which rose to £2,000 a year. There were two small points which he mentioned last year, referring to people with whom the Chancellor of the Exchequer had not dealt. Assuming that a man was earning from £500 to £700 a year, if he were a bachelor he paid on that sum subject to the deduction allowed in such cases, but a

  1247
  married couple for some extraordinary reason were treated as one person and he thought they ought to be treated as two people. It the wife had £200 a year and the husband £600 a year, making a total of £800, they both ought not to lose the exemption, but such was the case at the present time. The other matter was the case of a man who was trading in the Colonies but living in England. If he traded in South Africa, he had to pay income tax there and also in England, therefore paying it twice. It seemed somewhat hard that those Colonials who lived in the Mother Country and those Englishmen who traded in the Colonies should be penalised in this manner. Passing from these smaller points of criticism, he protested against one important proposal which was a great departure both from the principles of sound finance and from the policy of the right hon. Gentleman's predecessors. He alluded to the suggestion of the Chancellor of the Exchequer to deal with the Is. income-tax as a permanent integral part of national finance and taxation. The right hon. Gentleman had intimated that the income-tax of 1s. on all incomes over £2,000 a year should remain as a permanent tax. That was not only a departure from the policy of his predecessors, but, in his judgment, it was unsound finance. To keep such a tax would be disastrous, as undoubtedly it was a heavy clog on commercial enterprise and business in this country. There were countries which had not got an income-tax, and to have an income-tax at that high rate in this country would undoubtedly act as a clog on our industries and might tempt manufacturers to move their businesses to other countries. Such a policy would, moreover, allow of no elasticity in case of war or other emergency. He would like to know what Mr. Gladstone would have said to a permanent income-tax, because they were all familiar with the remarks he made even on an income-tax at 6d.; but with a permanent income-tax of Is. it was difficult to see
  1248
  where in case of war the reserve of the Chancellor of the Exchequer would be, and where he would get his money from. One other point he wanted to criticise had regard to the capacity of the Chancellor of the Exchequer, and to the stability of his views. The right hon. Gentleman had said to-day that he did not propose a reduction of the tax on tea because he was satisfied that to reduce it by a 1d.a pound would not make any difference to the consumer. He did not propose for the moment to discuss the accuracy or inaccuracy of that view. Last year when the Chancellor of the Exchequer in his. Budget reduced the tea duty by a 1d. he was challenged from both sides of the House on that very point, and on the 29th of May last, sometime after the introduction of the Budget, he made a speech to the effect that he had made most careful inquiries and the net result was diametrically opposed to what he had told them to-day to be his undoubted opinion. The right hon. Gentleman said according to Hansard—
  "That the question which he asked his advisers at the Treasury, and which he anxiously considered before making this proposal was whether a reduction of 1d., which was without precedent, would really reach the consumer. No Chancellor of the Exchequer would wish to put money into the pockets of the trade; what he desired was to secure that the benefit of the remission should go to the person by whom the article was consumed. He made inquiries whether or not the effect of the remission of 1d. would reach the consumer, and he was assured by all the information he could gather that in an article like tea, where a duty of 6d. represented something like 100 per cent. on the actual value of the imported raw material, a reduction of 1d., or 15 per cent., where there were no intermediate processes of manipulation, in the course of which the reduction might be either delayed, intercepted, or neutralised, must speedily reach the consumer. What had happened? The hon. Member had quoted from information that had been given to him that the reduction had gone into the pockets of the blenders. He would like to read a few words from The Times Commercial Supplement, which all must agree was a most admirable and very impartial summary of what went on in the commercial world. On

  1249
  21st May, under the heading of 'Tea,' The Times Commercial Supplement dealt with this matter."
  Then followed a. quotation of half a column of matter proving that the penny had gone into the pocket of the consumer, which he need not read, and the Chancellor of the Exchequer added—
  "According to this authority, which was not prejudiced in favour of the Government, the effect of the reduction had already been felt and the consumer was receiving it in a reduced price of 2d., or he was paying 10d. now for what lie formerly paid 1s."
  If last year the 1d. reduction had really saved the consumer 1d., he would like to know from the right hon. Gentleman why this year it should be regarded as axiomatic that the reduction of a further 1d. would not reach the consumer at all. There was one point upon which he wished to give his most unfeigned support to the Chancellor of the Exchequer. He was afraid he was one of those who had taken the view that the national credit had been in jeopardy during the last year not only in consequence of extravagance in the way of money, but also in the way of speech. It was therefore with unfeigned gratification that he recognised that the Chancellor of the Exchequer had set aside a considerable sum for the reduction of the National Debt, and he believed he only expressed the views of most business men when he said that this money so spent would tend to reinstate the financial credit and security of the country, and probably would be repaid in the way of increased investments being made in this country.
  *MR. J. RAMSAY MACDONALDsaid the Labour Party sympathised with the Chancellor of the Exchequer in his attempt to reconstruct the machinery of taxation, and on the whole they welcomed the announcement that he intended to readjust the relations between central and local finance. But the great fault of his speech was the very sparse reference to all practical proposals dealing with social reform. The Labour
  1250
  Party were profoundly disappointed with his attitude to the old-age pension question. They saw no reason why the Chancellor of the Exchequer could not find a sufficient sum of money to start the scheme this year. It was profoundly unsatisfactory that year after year these sympathetic speeches should be made. They were perfectly prepared to admit that the Chancellor of the Echequer had gone further than any other statesman who had spoken on the question, but the gulf still fixed between promise and performance was too large not to be disquieting. They were told the scheme would start next year, but they did not know what the state of the finances would be in a year's time. The Labour Party had no objection to the reduction of the income-tax, but in the minds of some of the Members of that Party it appeared as though the Chancellor of the Exchequer had felt that he could not reduce the income-tax and give old-age pensions at the same time. The right hon. Gentleman did not put it in that way, but some of the Labour Members felt that he had passed through that mental process. There was nobody more sympathetic than he with the oppressed shopkeeper with a small and precarious income, or with the oppressed professional man, whose income, though not exactly small, was precarious and whose cost of living had perforce to be high. But while sympathetic with these people and fully recognising their claims, yet if those claims were to defer an old-age pensions scheme, then they were not in favour of the reduction of income-tax, but they were in favour of old-age pensions. If the Chancellor of the Exchequer had reduced the income-tax because he felt that he could not give them old-age pensions, I then they regretted exceedingly that he had not selected an old-age pension scheme rather than the reduction of the income-tax. Moreover, on the merits of the reduction they were not quite satisfied. They thought £2,000 was far too large a limit, and they rather regarded the scheme of the right hon. Gentleman as

  1251
  one to relieve middle class taxation. The middle classes were the beneficiaries under his Budget scheme. They submitted that if the Chancellor of the Exchequer wanted an income for old-age pensions or social reforms, it would have been perfectly sufficient for him to have fixed the differentiation, not at £2,000, but at £1,200 or £1,500 at the very outside. So far as the readjustment of taxation was concerned, they were on the whole in agreement with the Chancellor of the Exchequer. They stood as he did for free trade. They believed that under free trade the system of taxation was much more equitable than taxation under a system of protection. Under free trade they taxed the people who could bear the tax under protection they taxed the people who could not bear the tax. Under free trade taxation was upon a scientific basis, which consisted in this, that they had got to put their finger upon earned income and tax that lightly. The great problem which the Chancellor of the Exchequer had to face, which be had partially solved, though not completely, was this problem of differentiating between income that came from social sources and income that came from individualistic sources. In this respect, they regretted that he had not gone further than he had done. As a matter of fact, unearned incomes which flowed from social sources ought never to find their way into private pockets at all. The community were the authors of those values, which went to make personal incomes and which ought to be the subject of a series of carefully constructed taxes so that the State could get for itself the whole of those unearned incomes. A shilling upon unearned incomes over £2,000 was too little. He suggested to the Chancellor of the Exchequer that he should increase it to 1s. 6d. as a beginning. In that way he would earn still more the gratitude of the democratically-minded sections of the community. Another point on which they felt was this if the weight of the taxes of a direct character was to be
  1252
  lightened, then it ought to have been done at the same time as indirect taxes were lightened. If the choice was to be between direct and indirect taxation for the purpose of lightening it, then lie thought that the choice ought to have been in favour of indirect taxation. It was not a question of 4d. instead of 5d. on tea. That would not be an appreciable been to the working classes. But take sugar. This was used at the breakfast table, and unless they took the whole of the duty off it would have no appreciable effect on prices for working class consumers. But sugar was a raw material, and if they took the tax off sugar to the extent of one-third, it would have an appreciable effect in stimulating industries which depended on sugar as a raw material. So that it was not merely a question of the working classes, but it was also a question of healthy production; and it would have been much sounder, from the point of view of economics, if the Chancellor of the Exchequer had told the income tax-payers that he could not relieve them this year; that he had got the funds for old-age pensions, such social reforms as the medical inspection of school children, and was going to use them at once. The right hon. Gentleman might have also said, "As a matter of fact, I have got to find a larger income, and I propose to put a heavier tax on large incomes; I cannot relieve the taxpayer this year, but in order to stimulate the industry of this country I am going to take one-third or one-half off the taxation on sugar." If the right hon. Gentleman had constructed his Budget on those lines it would have been more acceptable to the democratic and Liberal opinion which gave him such a magnificent majority at the last election. When the Finance Bill was before the, Souse the Labour Party would have to produce an Amendment which would raise the whole questioned old-age pensions.
  *MR. MORTONsaid he felt thankful to the Chancellor of the Exchequer not only for the clear way in which he had brought forward his Budget, but also for his determination that Debt should be paid off, especially when there were still £139,000,000 of the war debt remaining. He could quite understand that the Chancellor of the Exchequer in bringing in his Budget could not hope to please everybody, but he hoped that when they had got rid of the war debt there would be a serious attempt to reduce taxation. He trusted that they would see every economy practised in the spending of public money. Though the working classes did not directly get anything out of this Budget, yet they did get some benefit from the public money which was spent on education. He did not think that they ought to have the sugar tax at all, because it made living more expensive, especially for the industrial classes, while it adversely affected certain industries of the country. It was a double mischief, and the sooner the Government could see their way to get rid of it altogether the better it would be. Of course, he saw the difficulty of reducing the taxes, and was aware that after it was frequently a long time before the consumer got the full benefit of a reduction. The Chancellor of the Exchequer last year mentioned in his speech that in connection with new telegraph lines two-thirds of the annual cost would be guaranteed by the Government. There were exceptional distances in Sutherlandshire, but there had been a refusal to take any share of the guarantee. He would like to ask the Chancellor of the Exchequer why he had not carried out the promise he made last year. If there was a case entitled to the full benefit of the Chancellor's promise it was that of Sutherland. As to the income-tax, he agreed with his hon. friend that it would have been much better if the margin had been fixed at £1,200 or £1,500 instead of £2,000. The Chancellor of the Exchequer might have a further opportunity
  1254
  of considering that matter and of doing what he could to make the rich pay their due share of the taxation of the country. As representing the country, it was their duty to make those pay who were best able to bear the burden. The taxation of the country was at the present time very excessive, and the Budget of to-day provided for an expenditure of nearly £40,000,000 more than was required ten years ago. Heavy taxation interfered seriously with trade. Some members of the Labour Party said that heavy taxation did not matter so much, because the rich would have to pay it, but he did not agree with that argument. Taxes had to be paid out of profits, which were largely made by the exertions of the working classes. If an employer had to pay such a large portion of his profits away in taxation he had no margin left to increase the wages of those who worked for him. Taxation, therefore, did affect all classes of the community.
  MR. EVELYN CECILcalled attention to the absence of the Chancellor of the Exchequer, and complained that no reply had been made to the speech of the ex-Chancellor of the Exchequer.
  THE FINANCIAL SECRETARY TO THE TREASURY (Mr. RUNCIMAN,)stated that it had been agreed across the Table that the formal Resolutions should be taken to-night, and the principal debate on Monday. Under the agreement between the two sides, two or three Resolutions involving contentious matter would be held back.
  MR. EVELYN CECILsaid he was not aware of that arrangement, but in view of what the hon. Gentleman had said he would defer any further remarks until Monday.
  MR. MORTON: protested against arrangements of this kind being made across

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  the Table. He did not see why the debate should not be continued. He did not object to the Chancellor of the Exchequer taking a rest, but he had left behind a very able Gentleman who could reply for the Government. He regretted the bargain which had been made between the two front benches, because such arrangements always placed them between the devil and the deep blue sea.
  Question put, and agreed to.

  CONTINUANCE OF ADDITIONAL CUSTOMS DUTIES ON TOBACCO, BEER, AND SPIRITS.
  2. Resolved, That the additional Customs duties on tobacco, beer, and spirits imposed by sections two, three, four, and five of The Finance Act, 1900 (including any increased duties imposed by section five of that Act), shall continue to be charged until Parliament otherwise determine.—(Mr. Chancellor of the Exchequer.)
  CONTINUANCE OF ADDITIONAL EXCISE DUTIES ON BEER AND SPIRITS.
  3. Resolved, That the additional Excise duties on beer and spirits imposed by sections six and seven of The Finance Act, 1900, shall continue to be charged until Parliament otherwise determine.—(Mr. Chancellor of the Exchequer.)

  HIRE PURCHASE AGREEMENT.
  4. Resolved, That a hire purchase Agreement shall be charged with stamp duty as an agreement, or if under seal or in Scotland with a clause of registration as a deed, as the case requires, and shall not in any case be exempt from stamp duty as an agreement, letter, or memorandum made for or relating to the sale of
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  any goods, wares, or merchandise.—(Mr. Chancellor of the Exchequer.)

  ESTATE DUTY (FINANCE ACT, 1896, s. 21).
  5. Resolved, That the deduction allowed under section twenty-one of The Finance Act, 1896, on account of the previous payment of duty on property shall (instead of being calculated as provided by that section) be taken to be the amount which would be payable on account of the duty on the property if the duty were calculated on the value of the property upon which estate duty is payable.—(Mr. Chancellor of the Exchequer.)
  PERMANENT ANNUAL CHARGE.
  6. Resolved, That the permanent annual charge for the National Debt for the current financial year be twenty-nine and a half million pounds.—(Mr. Chancellor of the Exchequer.)

  AMENDMENT OF LAW.
  7. Resolved, That it is expedient to amend the law relating to the National Debt, Customs, and Inland Revenue.—(Mr. Chancellor of the Exchequer.)
  Resolutions to be reported upon Monday next; Committee to sit again upon Monday next.

  ADJOURNMENT.
  Motion made, and Question, "That this House do now adjourn,"—(Mr. Whiteley)—put, and agreed to.
  Adjourned accordingly at Five minutes before Ten o'clock