FINANCE BILL.

HC Deb 30 July 1907 vol 179 cc786-835

Order for Third Reading read.

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

Sir GILBERT PARKER (Gravesend)

said he wished to make his protest against the system of taxation prevailing in this country, and against the immutability of free-trade principles so-called. The right hon. Gentleman the Chancellor of the Exchequer had spoken of Great Britain as the one free and untrammelled market of the world. That was perfectly correct, but in its free and untrammelled condition it gave great advantages to the workpeople and manufacturers of foreign nations. The right hon. Gentleman himself in his time had had his doubts, if not about the immutability of free trade, at least about the principle of it. He most certainly had had his doubts about the prophecies made in regard to free trade. In 1900 the right hon. Gentleman said that there was not the slightest doubt in the mind of anyone that in the international markets we were fighting for our trade with all our available strength He had also made another statement which might be commended to hon. Members opposite. In 1903, the right hon. Gentleman said that there were disquieting features with regard to the matter, and in industrial as in social conditions no honest observer, certainly no member of the party of progress, would be found to deny that they had seen industries in which we ought to have maintained our supremacy, falling behind, and in some cases entirely taken away from us by our competitors.

The CHANCELLOR of the EXCHEQUER (Mr. ASQUITH,) Fifeshire, E.

Hear, hear!

Sir GILBERT PARKER,

continuing, said the right hon. Gentleman cried "Hear, hear!" to that. Yet in spite of this fact he could find no remedy for the position in which England found herself to-day with regard to the matter. The right hon. Gentleman was quite ready to say that the prophecies had come true. It was said that we were going to convert the world by our free trade policy, but no single country had been converted, and all our Colonies, whilst starting with free trade, had ended up by establishing a tariff. Despite this, the right hon. Gentleman was still perfectly satisfied. The fault he had to find with the right hon. Gentleman was that he was too Pharisaical. He believed him to be a Pharisee of finance. The right hon. Gentleman was so enamoured of the worship of his ancestors and of the past that, like the Scribes and Pharisees of old, he stood by the letter of the law and would listen to no change whatsoever. He (Sir Gilbert) wished to make a protest against the system of taxation which compelled the people of this country to pay £64,000,000 a year for food, drink, and tobacco, £13,000,000 being taxation on food. He did not object to a tax upon food; that was to say, a tax upon sugar and coffee and tea, and those things which were considered the necessaries of life. A tax upon such articles was necessary in order to reach all the classes of the community, but he did object most strongly to the disproportion of the taxes levied upon those articles. They were too high, and when they had got too high a tax upon any one article of food its consumption diminished, trade was injured, and the people were prevented from getting a full supply. The view he took was that if they distributed their taxation over a wider area the consumption was not reduced, whilst the pressure of individual taxation was scarcely felt. The trouble with the right hon. Gentleman's system of taxation was that it was rigid and inflexible and left no opportunity for escape. If the system were distributed there would be a reasonable elasticity and a chance of retrenching individual expenditure and reducing the pressure of taxation. The right hon. Gentleman admitted that in order to meet demands, he must turn in the future either to the land, or to the income-tax, or to some hitherto unexplored region of which they were not aware. At the present time they had a sort of Chinese puzzle to deal with in the matter of raising money to meet demands, because the area of taxation was so narrow and the things upon which the right hon. Gentleman wished to put a tax so small. He would suggest that the right hon. Gentleman should impose a tax upon silks, a source of revenue which he ventured to say would not be unsatisfactory to hon. Members below the gangway. At the present time we received from £11,000,000 to £12,000,000 worth of silk a year from abroad, chiefly from France. If that were taxed, say at 20 per cent., or even 10 per cent. the Exchequer would get anything from £l,500,000 to £2,500,000 additional revenue, very little of which would be paid by those people whom hon. Members below the gangway claimed, with such great emphasis, to represent. He did not know what the right hon. Gentleman's reply would be to this suggestion; he expected it would be the old reply of the immutable principle of free trade. The right hon. Gentleman would doubtless prefer to put 65 per cent. on the poor man's tea and 30 per cent. on sugar. He declined, however, to put a tax upon corn, because, ho said, that would touch the food of the people, and bear heavily upon them.

MR. MYER (Lambeth, N.)

It will take ten years to undo the policy of the late Government.

Sir GILBERT PARKER

said he did not see that the present Government had made much attempt to undo the policy of their predecessors. If ever there was a Chancellor of the Exchequer in the history of the country who had relied upon the principles laid down by his predecessors, it was the right hon. Gentleman opposite. He had done absolutely nothing to change the policy of his predecessors.

An HON. MEMBER

He has reduced the National Debt.

SIR GILBERT PARKER,

said that that was not a change in policy. The predecessors of the right hon. Gentleman had also reduced the National Debt. The present Chancellor of the Exchequer was the most orthodox of orthodox Chancellors of the Exchequer, and if he could find no way out of his trouble he would do the same next year as he had done this, and would make no fundamental alteration in the existing heavy taxation. The right hon. Gentleman would not deal with corn. When his hon. friend behind him asked what the taxation of corn during the years 1902–3 had come to he was told £1,876,644. And that was paid by the foreigner.

MR. ASQUITH

The whole of that tax went into the Exchequer.

Sir GILBERT PARKER

said he was glad of the right hon. Gentleman's interruption, because he wanted to say that the right hon. Gentleman was by no means certain that all that tax was paid by the people of this country. He would not get the shippers or the railway people in the United States or any one who knew the conditions of transport to agree that the small tax of 2s. per quarter on corn meant that the price of bread would go up. He knew that it went up in a few instances. Lord St. Aldwyn in the course of a speech strongly advocated a corn tax and prophesied its success and that it would not interfere with the price of bread. Afterwards with his free trade prejudices he said that bread did go up in some parts of the country. In such a case he would say that it was well to watch the bakers. Unless the Chancellor of the Exchequer would take the tax off tea and sugar he had no right to say that he would not tax corn.

MR. BYLES (Salford, N.)

made a remark which was inaudible in the Gallery.

*Mr. SPEAKER

said he understood that the hon. Member was not raising a question of order.

MR. BYLES

said he did not wish to rise to a point of order, but to clear up what had been said by Lord St. Aldwyn.

Sir GILBERT PARKER

said he would quote what Lord St. Aldwyn did say— In 1902 he foresaw a great deal of opposition to the proposed corn-tax; that it would arouse prejudice and lead to the cry of tax on food. But he was convinced that in no other form of indirect taxation could so much money be found creating so little an effect and injury to trade and commerce.

MR. BYLES

said that it was Lord St. Aldwyn's second speech that contained the point to which he wished to direct the hon. Member's attention.

Sir. GILBERT PARKER

said he had not Lord St. Aldwyn's second speech with him, but if he rightly interpreted Lord St. Aldwyn he said he thought the corn tax would not affect the price of food although in some, cases in some parts of the country the price of bread did go up.

MR. BYLES

said that the price of bread did go up in Manchester.

Sir GILBERT PARKER

said that he could not continue that particular form of argument any further. If the present high tax on sugar was maintained it would be injurious to the country, because sugar formed such a large part of the raw material in the confectionery trade. He contended that the taxes on alcohol, sugar, and tobacco had somewhat restricted trade. The right hon. Gentleman relied too much on those orthodox taxes, and because he needed money refused to lighten their effect in any way. He was put in the position which he occupied in order to give relief to the taxpayer in two ways; by reducing taxation and by reducing expenditure. He however, had not reduced either expenditure or taxation to any effective extent. His pedantry carried him too far, and he clung to a system of taxation which would not meet the needs of the country and the expenditure which had increased and was bound to increase. Moderate direct taxation and indirect taxes on manufactured articles for the purposes of revenue, he (Sir Gilbert Parker) believed, would give an opportunity for greater ease of payment on the part of the consumer; and also, what was much more important, would make it possible to throw some of that taxation on the foreigner. He knew that some hon. Gentlemen did not believe that. He had lived in protectionist countries and he knew that they could not get a Minister in any protectionist country in the world who would not say that where they had a small tax on manufactured articles which were also manufactured in those countries where the competition was strong against the imported articles, in a vast number of cases the foreign importer paid the tax by lowering the price of his goods so as to cover the tax. That was the ease in Canada and in Australia. That was a logical and a reasonable proposition. That was what the Leader of the Opposition aimed at in the policy for which he had argued. A tariff tax for the purposes of revenue was a reasonable and logical policy. The policy which he advocated went a little further, and carried them into the Colonial field, and into the field of preference, into the Empire at large, where our greatest markets awaited us. It was not in the protective markets of the world that we were to look for an increase in the sale of our goods. We must look to neutral and the Colonial markets. In the neutral markets we had great competition, although we held our own. But those neutral markets were not going to be increased. China and Japan were not going to be any longer the great field for exploration on behalf of our goods as they had been in the past. We had had the best out of China and Japan. Japan in fact was fast becoming an industrial country and a producer of manufactured goods. Japan and the United States were becoming more our competitors in the Far East. When the Chancellor of the Exchequer and other Gentlemen opposite talked about the United States being feeble competitors of ours they forgot that the United States and Germany sent practically nothing to the Far East thirty years ago. The United States was only making a beginning because she had hitherto been satisfied with the markets within her own borders. The Chancellor of the Exchequer had truly said that we were fighting for our lives. The chance of increasing our position in neutral and in foreign markets was diminishing. There remained open to us great Colonial markets where, however, the foreigners were gaining ground every day because of our existing fiscal system. British trade alone in 1894 controlled 72 per cent. of the whole. In 1905 it controlled 57 per cent. of the whole. Foreign trade rose from 16 per cent. of the whole in 1894 to 30 per cent. in 1905. There was a field for the development of our trade the like of which was not offered to any other country in the world, and if we could do it without sacrificing ourselves that trade should be cultivated. The time was past when it could be said, as Mr. Gladstone once said, that the Colonies were not a source of strength to us — a doctrine of the dark middle ages. Time and opportunity and bad trade were helping us to prove that the ideal which tariff reformers had was good for us and good for the Colonies. We wanted not only to develop and create markets but to preserve the markets we had. When he was in Australia he realised that very soon the ships in Sydney Harbour would not be all British. He did not say that we should have all the trade in the world, but he thought we should preserve that trade which naturally belonged to us, especially in view of the fact that Germany gave subsidies to the German steamships going out there. Bismarck's policy always was that they should send away goods and not men. When Germany and France had done so much to develop their trade with Australia and lower the trade which hitherto we had done with that Colony, he commended to the right hon. Gentlemen on the Treasury Bench their own precedent in a matter of this kind. They were subsidising the Canadian-Pacific Railway by a heavier contribution for the carrying of mails than was warranted for the purpose. They were promoting an "all red" route across Canada and Australia; that was a bounty, and a bounty was the most extreme form of protection. If right hon. Gentlemen meant what they said at the Colonial Conference, and he liked to believe that they did, in offering to preserve an "all red" route round the world, they were supporting an extreme form of protection which even some of them on that side of the House might hesitate to advocate. The Chancellor of the Exchequer at that Conference was in an extremely difficult position, and he had great sympathy with him. After what the right hon. Gentleman had said in 1903 he wondered that he was able to go to the Conference at all. At the recent Conference the real discussion was about preference and there was nothing which the Colonial Premiers considered so important. The right hon. Gentleman said the scheme which was evolved from the brain of a statesman whose absence they all deplored was fraught with mischief and dangers to fiscal union. Was that Conference anything else than one to discuss Colonial preference? The right hon. Gentleman realised that, and he was diplomatic.

MR. ASQUITH

said he thought he was said to have "slammed the door."

Sir GILBERT PARKER

said that that was after the Colonial Premiers had left London. Ministers showed profound hospitality to the Colonial Premiers outside the Conference, but inside it they gave them "bitter bread."

MR. ASQUITH

said that whatever he said was said in the face of the Colonial Premiers.

Sir GILBERT PARKER

replied that what the right hon. Gentleman had said was said before the Colonial Premiers came over. The right hon. Gentleman did not, in fact, believe in the Conference at all. The attitude of the Colonial Premiers showed that they were prepared to give reasonable consideration to the great question at issue, but it was impossible for the right hon. Gentleman with his hands tied to do anything. The complaint was that the Government decided the question without discussion. They were all agreed that raw material should be admitted free; that was admitted by tariff reformers as well as by right hon. Gentlemen opposite [Ministerial cries of "Why?"] He wished to keep to the point, and to explain his reason for advocating the admission of raw material. It gave that which was necessary to the worker to prevent his being handicapped. While they were all convinced that raw material should come in free, where they differed was as to the amount of work to be put into that raw material. There was what he might call the staircase of production, such as prevailed in Germany and America. There they said, "Admit your raw material as free as possible, and then work it up through the earlier stages of production until it becomes the highly-finished article." There was the question of hides from Argentina. There was a time when the harbour of Liverpool was, speaking figuratively, filled with ships which had carried hides from Argentina, but at the present time the United States took the raw hides from the Argentine from the lowest to the highest quality, and having manufactured them they got a return in the shape of wages. What was the manufactured material for one set of purchasers was the raw material for another. Some of our trades were disappearing because we had discarded the opportunity of working up raw material from all sorts of forms to the highest state of perfection. While tariff reformers approved of the system of free imports of raw materials, they challenged the system of free imports of foreign manufactured goods on the ground that, by giving the foreigner a double free market, they had made for the increase of importation of raw materials in foreign countries and the decrease of importation of manufactured goods and a lessening percentage of increase in raw material in England with a constant increase of manufactured materials. He would take the test of the figures with regard to the comparative imports of raw material. In 1883 the imports into the United Kingdom were £165,000,000, and into Germany they were £64,000,000, whereas in 1902 the imports into the United Kingdom were £185,000,000 and into Germany £128,000,000, an increase of £20,000,000 in the case of the United Kingdom and of £64,000,000 in the case of Germany, or a difference between 13 per cent and 100 per cent. Let them take the figures in regard to the United States of America and France. In 1883 they were for the United States of America £40,000,000, and in 1902 £55,000,000, an increase of 37 per cent., while in France they rose from £96,000,000 in 1883, to £114,000,000 in 1902, an increase of 19 per cent. Germany and the United States had developed enormously since 1870, and if the increase was maintained we should become a third-rate power. In 1880 the United States produced 67,998,000 tons of coal and 7,120,000 tons of iron, whereas in 1905 she produced 328,102,000 tons of coal and 44,054,000 tons of iron. Germany, in 1880, produced 46,974,000 tons of coal and 7,239,000 tons of iron, while in 1905 she produced 121,298,000 tons of coal and 23,444,000 tons of iron. The United Kingdom, in 1880, produced 146,060,000 tons of coal and 14,591,000 tons of iron, tons of coal and produced 236,129,000 whereas, in 1905, 18,026,000 tons of iron. He wanted to know if hon. and right hon. Gentlemen opposite thought that exports were the test. [Cries of "No."] He agreed that they were not, but that would seem to be the view of the Chancellor of the Exchequer, because the right hon. Gentleman had pointed to the extraordinary character of our exports as compared with those of Germany and the United States. Exports were not the final test of trade. Inside the circle of trade in this country we had a small circle representing the agricultural interest and a large circle representing the manufacturing interest. We had to go out into the world in order to secure our food, of which we did not produce sufficient quantities, and to get our raw material which also we did not produce in sufficient quantities. We were, therefore, bound to show immense exports or to show nothing. But the position was quite different in Germany and the United States, and when the right hon. Gentleman used the argument that the United States exports were smaller than ours he did not do credit to his knowledge, because the United States had within itself a huge circle for the production of raw material, and therefore her exports would be no test whatever of her wealth. If they were to judge the United States by her exports she would appear to be a poor country, but, as a matter of fact, employment and wastes there were high while our skilled workers were not increasing in number. Hon. and right hon. Gentlemen opposite were in the habit of saying that what we ought to do was to tax nothing, but according to the figures for 1904 it appeared that while the United States admitted free of duty £91,000,000 worth of goods, with a duty she let in £105,000,000 worth of goods, while she admitted in raw material £58,000,000. Roughly speaking, therefore, the United States under her system lot in between £200,000,000 and £300,000,000 worth of goods Coming to the figures with regard to emigration in the different countries, he found that in 1894, the amount of emigration was in Germany 26 per 10,000 of the population. In l903 it had fallen to 6 per 10,000. In England, however, in 1894, the figure was 9.7 per 10,000, but in 1903 it had increased to 34 per 10,000. [An HON. Member: It is not true.] The hon. Gentleman was not entitled to say that what he said was not true, as he had taken his figures from accurate sources, and he was illustrating what Bismark and Caprivi had said, that it was better to export goods than men. The Bluebook of the Board of Trade showed that our skilled workmen were not increasing, but there had been an increase in those engaged in merchanting and in clerical work. But no country could live by merchanting, and unless we could keep up our manufacturing standard we were not in a satisfactory condition commercially.

MR. CURRAN (Durham, Jarrow)

asked whether the hon. Gentleman could discuss the whole question of tariff reform on the Report stage of the Finance Bill?

*Mr. SPEAKER

said that, as he understood it, the hon. Gentleman was challenging everything, or nearly everything, in the Finance Bill, and contending that our whole fiscal system was wrong. Therefore, he thought he was in order.

Sir GILBERT PARKER

said that his contention was that our export system was not satisfactory, and before he passed on to other matters he would wish hon. Members to ask themselves whether they were satisfied with the conditions of our trade with Germany. Our total exports to Germany were about £40,000,000. Of this about £30,000,000 was represented by gold, £11,000,090; coal, £4,000,000; skins and hides, £1,740,000; silver raw and in bars, £1,000,000; sheep and goat skins, £775,000; fresh fish, £350,000; caoutchoue and gutta percha, £1,200,000; salted herrings, £800,000; sheeps' wool, £850,000; tin, raw, £600,000; iron, raw, £600,000; yarn, £6,500,000; cotton and woollen fabrics, £900,000; and machinery, £700,000. The President of the Board of Trade the other day stated in reply to a Question that the imports into the United Kingdom, consigned from Germany, of raw materials and articles mainly manufactured was, in 1905, £3,896,000, while the exports of the produce and manufactures of the United Kingdom to Germany was £4,458,000. The imports into the United Kingdom of articles from Germany wholly or mainly manufactured was £38,057,000, while the exports of this class of article from the United Kingdom to Germany was £21,635,000. The total German exports to this country were about £49,000,000, and his point was that that was not the kind of trade exchange with which we ought to be satisfied, especially when it was considered that in addition millions of pounds worth of German goods reached us through Holland and Belgium. It was a fair trade exchange that tariff reformers were asking for and it was that fair trade exchange that the Colonies were prepared to give us, because for every pound of stuff that we bought from them they bought a pound of stuff from us. Hon. Gentlemen opposite suggested that the Colonies wanted to get something out of the Mother Country [Cries of "Hear, hear."] That was utterly untrue. Canada gave us a preference because she wanted to trade with us. She believed that it was better to send her ships to this country loaded with goods and bring them back full instead of having to charter other ships to go to Germany, both sets of ships coming back comparatively empty. All these considerations had moved him that afternoon to speak as strongly as he had done, and he hoped not inconsiderately, concerning the Finance Bill which the right hon. Gentleman had introduced. Tariff reformers did not want to build a ring fence round the Empire or restrict freedom of trade, but they wanted to secure freer markets for our goods. The Liberal Party had their ideals, which were evolutionary and social. They on that side, however, believed that their ideal of preference was nearer to the spirit of the time than the ideals of hon. Gentlemen opposite. They wanted a more ethical form of trade between this and other countries. Their ideal could not be assessed by Board of Trade returns and was in accordance with the utterances of the first Lord Elgin. He believed that if the first Lord Elgin had been at the Conference this year a different reply would have been given to the Premiers, who came here to ask for reciprocal advantages for the common good of the Empire. The answer was not the answer they desired. He believed the answer they desired would come.

*Mr. BYLES

said he was not going to follow the hon. Gentleman in his tariff reform speech, but he desired that the exact facts should be elicited as to what Lord St. Aldwyn had stated in reference to the corn tax. He thought that Lord St. Aldwyn in his first speech had expressed his belief that the corn tax would not affect the price of bread, but in a later speech which he (Mr. Byles) had had the advantage of hearing the noble Lord deliver at Manchester, he said he had made a mistake, he acknowledged that the corn-tax had raised the price of bread, and he withdrew from his position.

Sir GILBERT PARKER

In certain places.

*Mr. BYLES

said that was his sole reason for interrupting the hon. Gentleman. He had risen, however, for the specific purpose of referring to the sugar tax, on which there had already been a formal debate and a division, and there had been a great deal of talk about pledge breakers. He believed that as many as 156 pledge breakers were, it was said, to be found on his side of the House, and the Chief Whip of the Conservative Party had thought fit further to expose the iniquities of these 156 members by writing a letter to The Times newspaper, which letter was replied to from the Ministerial side, as he thought very adequately. At any rate, his own withers were unwrung, and he fancied that many of his colleagues would say the same tiling. It was surely a stretch of rhetoric to call a person a pledge breaker because he had expressed a desire to repeal the sugar tax and then refused to assent to a specific Amendment to deal with a portion of the tax. It was well known that a mouse was fond of toasted cheese, but the mouse was a great fool to go into the trap to get it. The Amendment proposed by the hon. Member for the Walton Division of Liverpool was practically a trap set for supporters of the Government. Sugar was also used sometimes to bait a trap, but he, at any rate, was too old a Parliamentary bird to walk into the trap set for them by the ingenious young gentleman who represented the Walton Division. With regard to the Budget itself he would not offer more than one or two observations. He regretted that the Chancellor of the Exchequer had not seen his way to deal with the sugar tax, with indirect taxes, the breakfast duties, and so forth. They had to wait for another year before they could get a fulfilment of that object. He had said to his constituents, as doubt- less had many other hon. Members to theirs, that he disapproved of these taxes. For his part he regarded indirect imposts as a tax upon the wealth makers of the country, a tax upon the rations of the people, and he held that something ought to be done to prevent money from being so obtained. They should take the necessary resources for carrying on the government of the country out of the wealth when it was produced. They lived in hope, and were looking forward to the next Budget. They had been told by the Chancellor of the Exchequer that this Budget was part of a triple Budget, and they must wait until the picture was complete before they judged it. He would endeavour to possess his mind in patience until next spring, but he hoped that the right hon. Gentleman would lay to heart the warnings which he had got from Radicals on that side of the House, who did not believe in breakfast table duties or indirect taxation, but who did believe in taking all the resources of the country from the accumulated wealth, from the land revenues and the land values of the country, leaving the worker, especially the poor worker, free, or nearly free from taxation.

MR. PIKE PEASE (Darlington)

said that the question of the taxation of sugar was a very important one to the country. He did not think that anyone would state that what his hon. friend had said in regard to the sugar tax was not justified. He had listened with great pleasure to the Budget statement of the Chancellor of the Exchequer. He believed it to be the clearest statement he had ever heard during all the years he had been in that House, and if he might be allowed to say so, he thought the Budget which he had introduced and now actually passed was one of the boldest ever proposed by the Liberal Party. If a Unionist Government had brought in a Budget of this kind and passed it into law, he was sure that a good many strong things would have been said against those "wicked Tories." An hon. Gentleman below the gangway the other day had asserted that as far as relief of taxation was concerned, people with £40 a week would get relief under this Bill, while the man with £1 a week would get no relief whatever. Why was this Budget passed when so many people represented by ton. Members opposite were not in favour of it? The reason was that the Liberal Members could boast of very strong Party feeling. In the last election the constituencies had to vote on very large issues, and among them there was hardly any of a larger character than that with regard to taxes on food. In his own constituency all the votes he had given on tea and sugar in the last one or two Parliaments were published, so that every constituent might have the opportunity of learning what a wicked man he was. When one heard the two cries: "Vote for so-and-so, and old-age pensions," and "Vote for so-and-so, and no taxes on food," one wondered how old-age pensions were to be granted without taxes on food. There must be a considerable amount of feeling in regard to the pledges which had been given. He could not say how definite those pledges were to a certain association, but it was said that a number of members had stated that they were willing to vote against the sugar tax. It was natural for an ordinary person to believe that when a Member said he would vote against taxation on sugar, he would vote against it on the first occasion, just as he would vote against any Bill on the first occasion if he had pledged himself to do so. The statements made in regard to the big and little loaf had a great effect at the last general election, but most of them realised now, and Liberal Members realised it more now than they did at the general election, that we were providing an enormous amount of our revenue out of the taxes on food, and drink, and tobacco. The Chancellor of the Exchequer in reply to a question the other day, said that the total revenue in the last financial year derived from the taxes on food and kindred articles was £64,839,260. Yet they heard at the general election that a small tax on corn, which could not possibly amount to a revenue of more than £2,500,000 to £3,000,000, would mean ruin to this country. He sincerely hoped that the Chancellor of the Exchequer might be able to take the tax off sugar, but he did not think that the hon. Member for Bolton the other day had any right to say that the right hon. Gentleman was going to do it, because they had heard no definite pledge from the Chancellor of the Exchequer in regard to the question. There was no doubt that the taxes on food, drink, and tobacco were paid mainly by the masses of the people of the country; but it might be said that drink stood out of the category. That, of course, was perfectly true, but, so far as the actual cost to the workman was concerned, it did not matter very much whether he paid a small tax on a glass of beer or a small tax on his bread. Before the general election the Chancellor of the Exchequer said in reference to these different taxes that they offered a wide field for revision. The present Lord Chancellor had said that the tax on tea was the most cruel of taxes, because it fell on the poorest people of the community. The Chancellor of the Duchy of Lancaster said the tea tax ought not to be resorted to except in great emergency. The Secretary of State for Foreign Affairs said that these taxes were put on for the war, and ought to be taken off now the war was over. In trying to find some justification for the statement of hon. Gentlemen at the election, he thought it might be said that they had every reason to believe that an effort would be made to take off those taxes. With regard to old-age pensions, he thought the Chancellor of the Exchequer had shown the utmost wisdom in the action he had taken in reference to the Sinking Fund, and it would do something to uphold the credit of the British people. The Blue-books issued the other day showed more than ever the difficulty of dealing with the old-age pensions question, because many people did not realise that it was absolutely essential that any old-age pension scheme should be carried out upon strictly business principles. It had been stated by one of the members of the Labour Party that any pension of less than 10s. a week would be of little value. [A Labour Member: Who said that?] It was said by the hon. Member for Woolwich. The cost of the administration of the Poor Law of this country stood at £15,000,000 per annum. He regretted that they had not had an opportunity of discussing the Local Government Board Vote during the present year. It was rather difficult to discover how far old-age pensions would increase or decrease Poor Law expenditure, but assuming that there were 3,250,000 old people entitled to a pension of 10s. per week, the amount of money required would be £84,500,000, whilst for a pension of 5s. per week, the sum of £42,250,000 would be required. Consequently the right hon. Gentleman could not possibly next year bring in a universal old-age pension scheme. He hoped the Chancellor of the Exchequer would find some means of getting over the difficulty, because he believed such a scheme would be in the interests of the country.

*Mr. EVERETT (Suffolk, Woodbridge)

said that as one of the supporters of the present Government he could not look upon this Finance Bill with unmixed satisfaction. He was elected mainly by the votes of poor men, and he was sorry the Bill gave no direct relief of taxation for them. The relief it gave to possessors of incomes between £160 and £2,000 a year would be welcome to those classes. But not many of them dwelt in cottages where most of his constituents lived. He had hoped for the repeal of the sugar duty. That was the most hurtful to the poor of all the new taxes put on by their Tory predecessors. He was aware that it brought in £6,000,000, collected largely out of the sugar basins of the poor. That was a large sum, but he had hoped that it would have been possible to reduce by that amount the bloated military and naval expenditure imposed upon them by the late Government—the most reckless and prodigal Government which this generation had seen. The present Parliament would, he hoped, insist upon such or a larger reduction soon. In ten years of the late Government's administration, they actually added between £40,000,000 and £50,000,000 a year to our military and naval expenditure! And this, not to keep pace with other nations, but to force the pace on them! They added in those ten years nearly twice as much as Italy, France, Germany, and Russia put together, as was shown by Lord Avebury in the Nineteenth Century Magazine, of November, 1905. He hoped large reductions would be possible before next year's Budget. He welcomed the statement of the Chancellor of the Exchequer that this was a foundation Budget upon which to build others, that it was only one of a series. He hoped it would be a long series. He appealed to the Government to make it so. This was the third Liberal Government he had helped to bring into power. The first muddled them into a dissolution in six short months, the second in three years, and since he had sat in the first of these Parliaments there had been three Tory Parliaments each lasting for six years. He asked the present Government to be as wise in this respect as their Tory predecessors had been, and not to throw office away. The people had given the present Liberal Government the largest majority any Government had ever had. He was sure that it was the wish of those who sent them to the House of Commons that they should use for the full six years allowed by the Constitution the power thus put into their hands. They wished and expected them to do it. Another place could not interfere with them in this matter. The House of Lords would be glad indeed if they could make them dissolve. Neither, happily, could they interfere with their finance. Never did the nation's finances more need remodelling. They — the Liberal Members — looked to their leaders to enable them to help those who sent them to Parliament not in three or four only, but in six Finance Bills. As one of a series, there were many good points in this Bill. It preserved and remodelled the income-tax. If fairly assessed, that was the best tax we had. Their incomes were the leal measure of the people's power to pay. If they adopted the plan outlined by the hon. Member for North Paddington of a graduated income-tax, as he showed ample Cleans were available for all social reforms, and without hurting anybody. The promise of old-age pensions to start next year was the feature of this year's Budget which he most welcomed. What joy, what comfort would the starting of them bring. In every hamlet, in every street, almost in every cottage the starting of them would put new songs into the mouths of the aged poor, and cause their hearts to sing for joy. Let the pensions be immediate, unconditional, universal. Happy the Chancellor, and happy the Parliament which gave this great boon to the people. He hoped they would see it begun next year. In conclusion, he wished to congratulate the Chancellor on being in office at such a time as the present. They had entered on a period of great industrial activity. Coal, iron, cotton, wool, meat, all their great industries were prospering. Why? Rising prices had caused this great activity. And what had caused rising prices? No doubt mainly the wonderful inflow of new gold from mines in various parts of the earth. Great increases in the supply of the precious metals had always produced rising prices and great industrial prosperity. It was so after the discovery of America and the opening of the silver mines of Potosi. The gold discoveries in Cal fornia and Australia, which some of them could remember, as they proceeded brought prosperity to all the civilised nations, and not only the free trade nations, but the protectionist nations as well shared in the great prosperity which accompanied that until then unprecedented outflow of gold. In twenty years following 1849, when the discoveries in California and Australia began, the whole stock of gold in the possession of mankind was doubled. The highest production in any one year during these discoveries was £36,000,000. He was happy to know that the production of gold last year was no less than £82,000,000! These golden sovereigns fresh from the Mint had come rolling into all the avenues of industry of the nations of the earth, and as they had flowed in they had stimulated industry of every kind and caused a large increase in prices. What economists called the "index number," which was based on the wholesale prices of forty commodities, had risen 25 per cent. in the last ten years. A much greater rise in the coming ten was almost a certainty. The inflow of the fertilising streams of new money had lifted up the prices of different commodities so that the producers of them had been stirred into fresh activity, there had been increased employment, and wages had gone and were still going up. The finances of the country could not but share in the beneficial effects of this great inflow of new gold. What Budgets Mr. Gladstone had in the fifties and sixties of last century while the gold production was proceeding He used to reduce taxes and take off taxes and still the revenue increased by leaps and bounds. That was a happy example of what we were now probably about again to see. The Californian and Australian stream was but a tiny rill in comparison with the river of gold that was flowing in now. The average of the twenty years during those discoveries was considerably under thirty millions a year, but last year no fewer than eighty-two millions of new gold flowed in to fertilise the nations. And there was every prospect, indeed almost the certainty, of the continuance and increase of this hug supply for many years yet to come. The world had never seen anything comparable to the golden prospect now opening before us. Happy was the Chancellor who was in office at such a time as this. Here, too, was a Parliament more eager for social reform than any that had ever before sat. And with the inflow of the new rivers of sovereigns here were the means coming in sight to enable these reforms to be carried out. The Chancellor and Parliament might rejoice together in the golden era now opening to bless mankind.

*Mr. LEVERTON HARRIS (Tower Hamlets. Stepney)

thanked the hon. Member for Woodbridge for the compliment he had paid to the Conservative Party in the contrast which he had drawn between it and the Liberal Party. The hon. Member had made what could only be regarded as a startling statement when heard from the Liberal side of the House; he stated that rising prices were good for this country, and that they stimulated industry. He could hardly reconcile that statement with the arguments used by hon. Members opposite that the effect of tariff reform would be to raise prices and to cripple industry.

Mr, EVERETT

said he spoke of rising prices flowing from the great increase of new money.

*Mr. LEVERTON HARRIS

said he always understood that those who were interested in free trade maintained that rising prices, whether they came from an influx of gold or from import duties, were a burden on working men, and that they retarded rather than stimulated trade. Those who had followed the course of the debates on the Finance Bill must have observed that the criticisms so far as they had come from that side of the House, had been principally directed towards the narrowness of the basis of taxation—the limited sources from which the national revenue was derived, and the necessity for expanding these, and effecting what was commonly known as a broadening of the basis of taxation. On the Second Reading of the Bill his right hon. friend the late Chancellor of the Exchequer, moved an Amendment with the object of broadening the basis of taxation. If to-day he did not go far into the tariff reform and free trade controversy, it was not because he at all condoned the economic fallacies which this Bill contained, but because he believed there were other important and pressing considerations which were worthy of the attention of this House. He was inclined to say that no Chancellor of the Exchequer in modern times had presented to the House, and asked it to pass, so dangerous a Budget as the present. In the past it had been the tradition and the practice of Chancellors of the Exchequer in what were known as the piping times of peace, to allow some margin for the expansion of the revenue which could be drawn upon to meet any great crisis or national emergency which might occur and involve us in war, or preparation for war, or even the fear of war. In dealing with the income-tax, Chancellor of the Exchequer after Chancellor of the Exchequer had laid the greatest stress upon the importance of its being a tax that could be expanded to provide for rapid supplies, in order to initiate and carry to a successful conclusion any great or prolonged military or naval operations. He would respectfully commend any hon. Gentleman interested in the subject to those, portions of the Budget speeches of Mr. Gladstone in 1853 and 1864, which dealt with the subject of the income-tax. In both the Budgets—certainly in the second if his memory served him cor- rectly—Mr. Gladstone went so far as to doubt whether the income-tax should be a permanent tax, and laid it down that it was a tax which ought to exist principally as one which could be drawn upon in emergency. There was no more unfortunate position for a country to be in than to know that it was impossible to defend its rights or shores without inflicting wholesale disaster or universal bankruptcy and ruin upon its finance, industry, and commerce. Not only was that a profoundly dangerous situation to be in, but it was a situation the mere knowledge of which invited from hostile and other nations aggression and attack. The mere knowledge that we were weak was a temptation to enforce claims and exact concessions. Were we not in this very situation to-day? What were the facts of the case? If we were suddenly involved in war there were only three ways in which sufficient sums of money could be obtained for the carrying of a large war to a successful conclusion. It might be done as was done by certain other great nations by having a war chest, which, associated with a large gold reserve, enabled the nation to draw money speedily and rapidly to carry on warlike operations. But we had not a war chest, and we had not a large gold reserve. Secondly, if we had well-established credit, we might borrow the money in the markets of the country, or the markets of the world. But could we borrow? He ventured to say that the Chancellor of the Exchequer would find it a difficult problem if he wanted to raise £20,000,000 in the London market. Thirdly, if we had an elastic and wide system of taxation, the taxes could be so increased as to obtain a considerable sum of money to start and carry on operations. Under our present system of free trade our sources of taxation were saturated. We could not increase the burden. The income-tax was at Is. That might be justifiable in time of war. He thought everyone would admit that it was an oppressive tax in time of peace. It was true that during the South. African War it reached Is. 3d., and that, he thought, was the highest point it had ever reached since its re-imposition in 1842, with the exception of a short period during the Crimea, when it touched Is. 4d. If the tax was raised to-day to Is. 4d. the additional 4d. would only produce £10,000,000 more revenue in the year, but that amount in time of war was practically nothing. We had a higher taxation of food than had any other country. The Chancellor of the Exchequer in answer to his hon. friend the Member for Darlington had stated that it amounted to £65,000,000 if tobacco and spirits were included. The tax on tea meant an annual contribution of between 2s. 6d. and 2s. 7d. from every man, woman, and child in the country; and he thought that this justified the Chancellor of the Exchequer when he told them the other day that tea had now become a luxury. It had been stated that 156 hon. Members had vigorously condemned the sugar tax in their private capacity, on the grounds that it was burdensome on trade and pressed very hardly on the poor consumers. But they had inconsistently supported it as a party machine. The party machine, however, would only work once in such cases. He thought they might take it for granted that next year a large part of the sugar tax would be remitted, if it was not abolished altogether. It had been said that the schedule of the death duties might be increased, but they could not control the death-rate of the millionaires of this country at will. In fact every tax which could be imposed under a free trade policy was to-day imposed, and pressed heavily on all classes. He had no doubt that some hon. Gentleman would entirely discredit that statement. Some would dissent because they might think that they had got the duties on wines, spirits, and beer to fall back upon, and that those duties could be increased in time of war. But experience had shown that if they relied on that source they relied on a broken reed. Then others said that land and mining royalties would prove a source of revenue beyond the dreams of avarice. But in time of war, when foreign supplies of food and iron ore were endangered, any tax on land or mining royalties would raise prices and contribute to and aggravate the actual crisis. The situation would not, to his mind, be so serious if our credit was unimpaired. But what was the condition of our credit? Consols to-day stood at 82½—18 below par—he believed the lowest they had ever touched since 1812. He believed that if anyone connected with the City were asked he would say that if one went into the money market and tried to sell £1,000,000 of Consols, he either could not do it, or he would depress the price of Consols to such a point as to start a panic. But if the Government went into the market and tried to borrow £20,000,000 on Consols or any other Government security they would be imperilling the whole commercial fabric of the nation. [Cries of "Oh ! "] He asked the Chancellor of the Exchequer himself whether it would not be a very serious venture if he tried to borrow £20,000,000? That was a position which he regretted. He thought the Chancellor of the Exchequer seemed to be rather inclined to take matters very lightly. The right hon. Gentleman seemed to think that this was only a temporary phase which they need not trouble themselves very much about; that they need not write down their securities, with the favourable hope, that like Micawber, something better would turn up. At the opening of an insurance company's new buildings on 10th July, the light hon. Gentleman who was present gave some startling advice, but like most sanguine persons he did not prove to be an expert tipster. The right hon. Gentleman then said— He did not know if that insurance company were engaged in the gloomy proceedings of writing down—a practice which he thought was very much to be deprecated unless taken at comparatively long intervals, and with full consideration, not only of the past and the present, but of the probabilities and prospects of the future. Such sentiments savoured of the Bankruptcy Court. Had this not been the excuse of every bankrupt and speculator? The right hon. Gentleman continued— A great deal of nonsense had been talked and still more nonsense had been written in the course of the last twelve months on the supposed depreciation of our national credit. He thought, and he spoke with some knowledge of the case, that they might fairly consider that in this matter we had touched bottom, and that the upward process had begun, and that it would continue. On the 10th July Consols stood at 84⅛ to-day they were at 82½—a very considerable fall. The fact that our securities had depreciated was not a myth. If examples were needed of the difficulty of borrowing money he might quote the East Indian Railway Company—which enjoyed the guarantee of the Indian Government both as regarded interest and capital. They recently asked for a loan, but failed to raise more than one-sixth from the public and had to go to the underwriters and place the balance at a discount. The Chancellor of the Exchequer had admitted that they dare not go to the market. No Irish Land Stock was to be publicly issued this year. The market would not take it. Then there was the Transvaal Loan of £5,000,000. The Chancellor of the Exchequer knew perfectly well that if he tried to raise £5,000,000he would have difficulty in getting it except at a very low price, and he therefore proposed to issue it in driblets and on Treasury Bills. They were in a position of very great danger to the country. Where were they to obtain supplies should they be suddenly placed in the unfortunate position of supplies being absolutely necessary for the reorganisation and recreating of our attenuated Army and for mobilising our skeleton Fleet, and the provision of ammunition, food, and transport, which were necessary for vigorously pressing a long and arduous war? If they were to attempt to raise any very large sum of money by way of loan, he ventured to say that such a crisis would be produced as would imperil our position. They could not raise taxation without disturbing the free trade policy of the country to which they were so wedded. At the last general election the great policy of hon. Gentlemen opposite was that there was to be a large reduction of taxation. They had heard a good deal about a free breakfast table, although he did Dot understand what it was, for at present everything on the breakfast table was taxed except bread. That was hardly a definition which carried out the idea of a free breakfast table, which had been so freely promised by hon. Gentleman opposite. The free breakfast table had its sugar, coffee, and tea all taxed. In fact the tax on tea involved a contribution per head six times as high as the contribution paid on foreign wheat and flour during the time the corn tax was in operation.

MR. ASQUITH

said that the hon. Gentleman did not observe that in the one case the whole of the added price went into the Exchequer and in the other it did not.

*Mr. LEVERTON HARRIS

said that that was a matter of dispute between the free traders and the tariff reformers into which there was not at present time to enter. As a matter of fact the Chancellor of the Exchequer assured the House that the penny he took off tea last year did not affect the consumer. The statement he had made was perfectly correct. He said the contribution per head of the population of this country to the taxation on tea was 2s. 6d. or 2s. 7d., and that the contribution on wheat and flour coming from foreign countries during the time that the corn tax was in force was 5½d. per annum. He admitted that something had been done since the opposite Party came into power to reduce taxation, and that there had been a reduction of £2,000,000, but having regard to the fact that it was only about one-sixtieth of the annual revenue collected by taxation it was after all a very paltry sum. Great efforts were being made, thousands of men were being dismissed from Woolwich and cast adrift, the Army had been reduced by several battalions and other retrenchments made. But in spite of this if the Government intended to fulfil their promise and to devise and erect a system of old-age pensions which was not a mere sham, if they wished to maintain our present Army and Navy even at the reduced status at which they now were, if they adhered to free trade doctrines, to what source were they going to turn to provide for large and immediate sums of money should they have to find them for the purpose of defending our rights and maintaining our prestige?

MR. CURRAN (Durham, Jarrow)

said that as a new comer he was surprised to see hon. Members come here with carefully prepared platform orations, and speak at great length on the subject of tariff reform, and he was amazed at the waste of time. Unionist speakers had spoken of tariff reform as if it were in the interests of the workers as a class, and they appeared to think that they knew the interests of the workers better than those who were sent to Parliament to re-present them. The reason the worker refused to countenance the taxation of imported commodities was that they realised that the organised workers of other countries where protective duties existed were strenuously resisting that form of taxation. They had realised through their visits and experiences in the United States and Germany that the taxation of imported commodities did not mean permanence of employment for the workers, but was simply the means of enabling the employers to increase the price of the commodities which the workers had manufactured. The industrial conflicts which took place in America between the workers and the employers were far more violent and more frequent than the industrial conflicts in this country, yet America was held up as a model by the tariff reformers. If the organised workers were not suspicious of tariff reform for other reasons the war chest of the Tariff Reform League would make them so. They did not regard the taxation of imported commodities as a cure for the social evils in this or any other country. They went on first principles and said that the transfer of a commodity across an ocean or a frontier did not enhance its value but, on the contrary, depreciated it. They stood for international reciprocity, and the discussion between the organised workers at the international conferences centred upon how to get rid of these tariffs. The working class movement in the United. States was against the tariff, because while they had higher wages and the climate demanded a higher standard of living, the worker found that he had to pay double the price for the commodity he manufactured than it could be obtained for in this country. In Germany they had protested against the tariff again and again because they were convinced that the taxation of imported commodities was absolutely pernicious. The Labour Party were not satisfied with the Finance Bill; they had expected much more from the strongest Government of modern times. They had expected the Government to put forward old-age pensions, and they believed that if the Chancellor of the Exchequer had forced the problem through the difficulty would have been easily solved. Although it might be regarded as an extravagant proposal they believed that if the Chancellor of the Exchequer found it difficult to get new sources of taxation he should recognise the necessity of putting on landed property the tax which the industrial classes paid to-day; there should also be a tax on land values and upon unearned incomes. If he were Chancellor of the Exchequer he would be prepared to put a graduated income tax upon incomes over £1,000. If that were done the problem of old-age pensions could be solved in less than two years. He believed it would be to the advantage of the country if the breakfast table were emancipated not only by the repeal of the sugar tax, but also by the graduation of the tax on tea. The Labour Party were going to keep up the campaign for old-age pensions both in that House and outside it, and if they could rot convert the Cabinet they would endeavour to convert the constituencies that sent them to the House. That was a point on which they disagreed with the Government, but that disagreement would never lead them to tariff reform. The tariff reform they required was the removal of the railway tariff and the removal of the tariff on people living on their own land. If those two tariffs were removed we could compete successfully with any country in the world.

*Mr. ASHTON (Bedfordshire, Luton)

said that if the finances of the country were in such a lamentable condition as the hon. Member for Stepney suggested, the best thing to do was to reduce the indebtedness of the country, and he congratulated the right hon. Gentleman on the way he had dealt with that question. The right hon. Gentleman had last year reduced the debt by £13,750,000, which he had said was to be a permanent reduction. That was true, but it was not quite so good a reduction as it appeared at first sight, because the right hon. Gentleman had to make allowance for something like £4,000,000 net expended under Works Acts, which made the actual reduction of debt last year. £10,000,000. The point he desired to put to the House was the way in which the right hon. Gentleman had dealt with the debt. Everybody agreed that it was absolutely necessary that the unfunded debt should be largely reduced; that the burden of the unfunded debt had been far too heavy. Five or six years ago it was something like £78,000,000, but he was glad to see that the right hon. Gentleman had since then reduced it to £52,000,000. That was an enormous and necessary improvement, because it not only released a large amount of "short money" which could be better employed in trade, but it also created a resource in times of emergency. The question now was whether the time was not opportune for buying up a large portion of the funded debt. The unfunded debt was not entirely a floating debt. It included the war loan, which was borrowed for ten years, but it was mainly made up of Exchequer Bonds and Treasury Bills. The former the right hon. Gentleman had reduced to £19,000,000, and the latter from £31,000,000 to £13,750,000. He had reduced them more than half. Now that the right hon. Gentleman had reduced the unfunded debt by so much, was not the time opportune for taking in hand the reduction of the funded debt? Treasury Bills ought only to be issued in order to finance the Chancellor of the Exchequer during the lean portion of the year. At the end of the financial year when the Exchequer was full, the right hon. Gentleman ought to pay off the whole of the Treasury Bills and start afresh with the new financial year. Of course in these matters regard must be had to the time through which the country was passing, and he suggested that under the present circumstances there was great advantage to be obtained in buying up Consols. He admitted that it might be cheaper at the moment to buy up some other loan, such as the war loan, but after all, the war loan could only rise to par, and the Chancellor of the Exchequer could only make a small amount by reducing that loan. He did not think the right hon. Gentleman should speculate in finance, but this was not speculating, it was taking a long view of the future. The effect of buying Consols would be to raise the price of Consols by several millions, and looking at the matter from that point of view the right hon. Gentleman would improve the national credit, and if he raised the price of Consols, he would be able to float at a better price the new Transvaal Loan. The right hon. Gentleman would also be able to help the new Irish stock. He believed it would be a very great advantage to take Consols in hand, and leave the unfunded debt alone for a time. We were now on the top of a wave of prosperity, with the result that a great deal of money was wanted for all kinds of purposes, and that was one of the reasons for the low price of Consols at the present moment. They saw a great deal of money seeking employment in the trade of the country, which eventually would seek a resting place in high class securities. With the trade of the country not likely to continue in its present state of prosperity we were sure to see, as in the past, a considerable rise in the price of Consols, and the right hon. Gentleman would be wise to take this opportunity of redeeming a larger sum than £2,000,000 in Consols this year. He hoped they would hear from the right hon. Gentleman that he would invest more.

MR. HARMOOD-BANNER (Liverpool, Everton)

thought that the Chancellor of the Exchequer must acknowledge that where a man in the course of the year, in making up his accounts, could say that he had been defrauded by having paid a larger amount of income-tax than his profit showed he was liable to pay, there was a cause of complaint which should be remedied. He hoped that in his future Budgets the right hon. Gentleman would consider that question. Another point was as regarded the deductions from income-tax. Some years ago Lord Goschen pointed out that he could not accede to a demand for an allowance for depreciation of capital out of revenue, because depreciation of capital was just as much a point with the professional man as with the manufacturer; brains were the capital of the professional man, and no allowance was made for loss of brain power—the man went on until his brain failed in his old age. But he was glad now to note that the Chancellor of the Exchequer was making an allowance for depreciation of brains by giving the earners of income below £2,000 3d. in the £. He appealed to the right hon. Gentleman to put the depreciation of capital on the same basis in regard to individuals and limited companies. He thought he was right in saying that the question of the depreciation of capital had arisen entirely through a mistake or misconception of the description in the original Income-Tax Act. In some way or other the question of income and capital was so stated in the original Act that the Judges had founded their decisions upon it that they could not depreciate capital in dealing with income. Therefore it now arose that they paid income-tax on a set of profits which they could not consider as profits for any other purpose except income-tax. If the right hon. Gentleman would refer to what Sir Henry Primrose had said he would see that the whole foundation of the difference between income and profits arose from the way in which the original Act was framed. If a man were charged on his true profits, made on a proper basis of calculation—of course, paying the tax on reserves— they would do a great deal to make the income-tax more acceptable, while it would be a better reserve in time of war and for the purposes of the Government. He welcomed the depreciation made on behalf of the trader, and he hoped the Chancellor of the Exchequer would see his way to extend it further so as to make the tax unexceptionable in every way. Then, as regarded the Local Taxation Account, he was very much obliged to the right hon. Gentleman for noting his views on that point, and he would particularly ask him, when he was considering the tax on motor cars, to keep that tax specifically for the purpose of improving the roads, laying the dust, and minimising the nuisances which motor cars created. In regard to the first part of Customs and Excise, he was not quite so well pleased with the way in which the taxation under the Bill arose. He had listened with considerable interest to the speech of the hon. Member below the gangway, who desired to apply to labour and wages a sort of tariff reform, or the very fullest protection. What he and those who thought with him urged was that the same thing should be applied to the industries of this country which, besides the high wages they paid, had also to bear heavy rates and taxes He and many others had pleaded for relief as regards the tax on tea, coffee, sugar, and other articles of food, and he thought they had done a little better than many hon. Gentlemen opposite, for they had carried out their election pledges by their votes, while hon. Members opposite who had made promises of a similar kind had not carried them out when it came to a question of voting. His own view of the matter was this—he could not see why taxes should be placed on food when there were manufactured articles on which taxes could be levied. He instanced the case of cash registers, which came exclusively from America. He did not think there was a single one made in this country. Why should these things not be taxed? In Germany they had put a duty on these cash registers, with the result that the Americans had erected works in that country. Therefore he thought we might rightly assume that if we put a duty on cash registers an industry would also be created in this country, and we should have part of that duty, and part of the wages received from the employers. That was the position he had always taken up. He objected to taxation on food, which was the only basis of the present Budget so far as concerned Customs and Excise, when it was possible to tax manufactured goods which came into this country. Taxation for revenue purposes, when accompanied by the statement that they should have no taxation which would beneficially affect any industry of this country, would be injurious, and ought not to be carried out without some alteration. Of course, he was aware that this principle did not entirely apply. It did not apply to the cocoa trade, the Cadburys and the Rowntrees, who made great sums of money; it did not apply to the Wills's, in the tobacco trade. They had taxation for revenue purposes applied for the benefit of specific trades; and what they desired to have instead of taxes on food, was taxation for revenue purposes on articles which were bought almost exclusively by the rich. The adoption of this plan would largely relieve the taxation on food, and make the poor man's expenses lighter and his position better. He regretted that in this particular Budget no effort was made in any way to relieve taxation on food, which amounted to £65,000,000 a year. Any suggestion to put a duty on manufactured articles brought to this country was jealously put aside, so that it should be impossible for any one industry to have an advantage over another. He thanked the Chancellor of the Exchequer on behalf of the traders and the manufacturers for the action he had taken, but as regards the taxation of food, he regretted that something more had not been done, especially as it would have led to the relief of the poor and unemployed.

*Mr. ASQUITH

The hon. Member is the only speaker who has condescended to make any reference to the Bill under discussion. In regard to the income-tax I am glad the hon. Member has recognised what I am sure will be increasingly recognised as the position becomes more generally known—the efforts that have been made for many years past, since it became a necessarily permanent part of our system, to adjust its incidence in such a way as to conform to the elementary canons of equity and justice. With regard to his lamentations over the continuance of the tax on food, I demur to the figure of £65,000,000 as the revenue derived from food taxes. A large proportion of that sum consists of the taxation of alcohol, and no less than £14,000,000 comes from tobacco, so that when those two considerable items are taken off the taxation on food the real proportion is nothing like so large as that which the hon. Member suggested. But I may assure the hon. Member for Jarrow, who made such an admirable and suggestive speech, that nothing would give me greater satisfaction than to be able to deal, as I hope to be able to deal, with the taxation on the remaining articles of food before the time comes when I shall have to lay down my stewardship. By remitting the coal tax and taking a penny off tea last year, and by the reduction and readjustment of the income-tax this year, the Government have done something, at any rate, to redeem whatever pledges they gave at the general election. Another criticism germane to the Budget has reference to the provision for the reduction of debt. I spoke with a glow of optimism at a teetotal banquet the other day and expressed the hope that things are on the mend. I was not speaking of the trade of the country generally— I for no one suggests that that is bad—but of the market in public securities, and I took the precaution of hinting that I was not to be supposed to be uttering any prediction as to the immediate future of the market. So much use has been made of my very innocent and guarded expression that I shall be very careful hereafter not to say anything at all of the future course of our markets and trades. But all the same I cannot allow it to be said that during the last two years, or during many years past, the national credit of this country has been seriously impaired. I agree that we cannot borrow on the enormous scale on which this country borrowed during and after the war—we cannot largely increase the expenditure, without a necessary depreciation in the market prices of what are called gilt-edged securities. One follows upon the other just as any sequence in the order of nature. When we add the abnormal prosperity of trade which has continued for more than three years, and which has put exceptional demands not only upon the currency but upon the whole machinery of credit of this country and the world, it is inconceivable that these so-called gilt-edged securities should remain at the level which they attained under conditions less happy. That is the whole explanation of the matter. But let my critics go to Berlin. There they will enjoy the double blessing of a protective tariff and a paternal Government. Yet anybody acquainted with finance who will compare our credit with the credit of the German Empire or of Prussia, not only as regards the prices at which securities stand, but also with reference to the amount of depreciation, will say that we do not come badly out of the comparison. We ought to deprecate boldly the discrediting and disparaging of the credit of our country. So far as I am concerned, I have done my best, so far as my opportunities have allowed —though I do not think the Chancellor of the Exchequer should meddle more than he can help with the money market—to keep off the market, while conditions are unfavourable for the flotation of new securities, such new ventures as it is in my power to control. Some of my City critics are under the mistaken idea that I can invest the Sinking Fund in Irish Land, which I can no more do than I can buy tram shares. The Sinking Fund is therefore out of the question. But what I have done is to allow the investment of savings banks' deposits in Irish Land stock. This, I think, is a right thing to do, and it has been most helpful that, instead of having a public issue of Land Stock this year, we should be authorising the National Debt Commissioners from time to time to apply such funds as are at their disposal to the purchase of stock. It will not go on the market at all. It will become one of their investments—and an excellent investment at the present range of prices—while the market will be relieved of an incubus which would have undoubtedly been most serious if there had been a public issue. I have done the same in regard to the proposed Transvaal loan. All the requirements of the Transvaal Government can be met during the next twelve months, by short-dated securities which I propose to provide. In both these respects I may fairly claim to have done what I can as Chancellor of the Exchequer to help over a very trying condition. As to the reduction of debt that has taken place, I have for the most part confined my operations to reducing the bulk of the floating debt. I feel that the outstanding Treasury Bills and Exchequer Bonds require to be reduced at the earliest opportunity. By having a great amount of floating obligations on the market the power of raising money in an emergency is crippled to a greater degree than in any other way. Therefore I think we were perfectly right to take the course we have taken. I speak cautiously in regard to matters of this kind, particularly in regard to the future, but I think I may go as far as to say that our floating obligations—I am not speaking of the War Loan, but of Treasury bills and Exchequer bonds—are just now reduced to a manageable sum. Certainly they ought to be further reduced, but I think they are now reduced substantially compared with what they were; and the alternative which lies before us will be between the War Loan, on the one hand, and Consols on the other. These are the only two other securities to which the Sinking Fund can be properly applied. I am not going to say —it would be very wrong if I did—what action will be taken, beyond saying that the considerations which have been brought forward by my hon. friend are very present to my mind, and that in matters of this kind one is guided very largely by the opinions of experts. The Government have at their disposal the advice of some of the most eminent men in the City, and the House may rely upon it that, following the general lines I have indicated, the Government will be guided by the advice which will be at our disposal. I do not think any other specific criticisms have been made on the proposals in the Bill. The hon. Members for Gravesend and Stepney, who very appropriately sit side by side, will forgive me if I do not go into the large question they raised as to the foundations of our fiscal system. The hon. Member for Gravesend said one thing of which I desire to take notice, because coming from him it comes from one of the high priests in the temple of tariff reform. I have often, in the course of the controversy, ventured to urge that you cannot have a system of tariff reform without taxing both food and raw material—and let me point out to my hon. friend the Member for Liverpool that it is no good talking about taxing luxuries which do not affect the daily life of the working man. That is not tariff reform. Tariff reform is founded on Colonial preference, and the taxation of luxuries is merely the fringe of the question—the essence of tariff reform consists in giving a preferential duty to the Colonies with regard to commodities which come to us from them, and the only things that come to us from the Colonies are food and raw materials. I have often argued that if you are going to give preference to the Colonies you must give preference on food and raw materials.

Sir GILBERT PARKER

indicated dissent.

*Mr. ASQUITH

The hon. Gentleman shakes his head. Food if you like, but raw materials never. The hon. Gentleman used the expression: "You place every stiver of the tax on raw material on the consumer." What an extra-ordinary revelation this of the minds of tariff reformers! If food comes from abroad and it is taxed, the foreigner pays the tax; but if raw material comes from abroad and it is taxed, the consumer pays the tax.

Sir GILBERT PARKER

said he qualified his statement by saying when raw material was not produced in this country and did not enter into competition.

*Mr. ASQUITH

Very well, have it so. Is it not the same with food? What is true of one is true of the other. Even after listening to the admirable speeches those two apostles of tariff reform, I am still unable, as I have always been, to see why it should be perfectly good finance, consistent with all the rules of equity and polity, to put a tax on food, while it should be an abomination or an iniquity to put an tax on raw material. Economically, there is not a shadow of a shade of difference between the two. I apologise for making this short digression into the tempting field opened by those two hon. Gentleman. I do not think it is any more relevant to the Budget than any attack on the foundations of our fiscal system, which, of course, the hon. Gentlemen are entitled to make; and I agree there is no more constitutional opportunity than the third reading of the Finance Bill. It is my business simply to defend the proposals of the Government in the Bill, and I do not want to digress beyond the four corners of the measure itself, and I ask the House to give us an opportunity as soon as may be of reading it a third time.

MR. AUSTEN CHAMBERLAIN (Worcestershire, E.)

As to the measures the right hon. Gentleman has taken or is going to take in regard to the country's indebtedness, I am glad to find myself in hearty agreement with him. I must make two observations of a personal character. I do not remember that the right hon. Gentleman, when in Opposition, viewed the depreciation of our national credit with the vehemenence and indignation he has applied to it in the present Parliament, and I rather think that in defending himself he is necessarily drawn to defend the late Government from many of the strictures passed upon it by many ton. Gentlemen opposite. I entirely agree that in reducing the debt the first thing the right hon. Gentleman has to do is to reduce the dangerous, or at any rate the large, amount of the floating debt outstanding. I am not at all insensible to the arguments in favour of purchasing Consols at their present rate, with the possibility that they may at sometime or another have a considerable rise; but I think the Chancellor of the Exchequer was wise to resist that temptation, and, in the first place, to free his hands by reducing the amount if the floating debt, and to give himself a margin for any emergency that may arise. I am not quite certain that that process has gone so tar as it ought to go; but I recognise that the Chancellor of the Exchequer spoke guardedly on the subject, and, in deciding what he would do with the sinking fund, told the House that he would be guided by the judgment he may form after taking the best expert advice he can obtain. The Chancellor of the Exchequer also recalled to the House what he had done to keep aft the market as a borrower during the currency of the present year. I have no word of criticism to offer as to the action he has taken in respect to Irish land stock or the Transvaal loan, except to express regret that his announcement in regard to the Transvaal loan came so late. If, when he first announced that it was the intention of the Government to guarantee the Transvaal loan, he had made the announcement he subsequently made, that the whole demand on the market this year would be a million of short-dated securities, I think he would have saved a great deal of disturbance and misunderstanding, and also some inconvenience and even loss.

MR. ASQUITH

I was most careful to state that I would not commit myself as to the time or manner of the issue.

MR. AUSTEN CHAMBERLAIN

The right hon. Gentleman would not commit himself to anything. When people are in a state of uncertainty they are apt to fear the worst. It is not because he did not state that he would not bring out the loan in a particular month this year that I complain, but because he did not state what he subsequently stated, that he would only make a small demand on the money market, and that in the shape of short-dated Bills. The right hon. Gentleman has spoken not merely of the effect which the large demands for national expenditure have made on the money market, but also the great effect produced by the large increase in local indebtedness. That stands for a great deal in the deterioration of the price of gilt-edged securities, and this House is not wholly free from blame in the matter. No doubt many of the municipalities have been severely pressed by the check placed on their borrowing powers. I think such a check is useful, but I think also that the House should remember that it has its share of responsibility for what the municipalities have done. We are constantly imposing new duties upon them, and giving them new powers of borrowing for fresh objects. As long as the House proceeds on those lines you cannot expect that there will be a real check on the amount of loans raised by local authorities. That is a consideration which we ought to bear in mind in discussing the Budget as a whole. I think the most remarkable fact in the discussion of the present Budget is that I cannot recall to mind a single speech in the course of these debates in which the Budget has been heartily and wholly approved. From every quarter of the House criticism —either expressions of condemnation or expressions or regret that the Budget was not other than it is—have been heard, and even the Chancellor of the Exchequer has never pretended to express any hearty approval of the scheme of taxation embodied in it. That is rather a serious situation. Of the taxes which are now in force the right hon. Gentleman considers that the income-tax is too high, that the sugar tax ought to be abolished, and that the tea tax ought to be either abolished or reduced. At the same time the right hon. Gentleman announces that he has to make preparations for a large amount of new expenditure and that he can hold out no hope of a substantial reduction in the aggregate expenditure of the nation. What, then, is to be the future of our financial system? If we destroy the taxes which now exist, and if we refuse all opportunities which are offered for widening the basis of taxation by the introduction of new taxes, if new taxes are piled on while the present expenditure will be not only maintained but increased, the result will be that the Chancellor of the Exchequer will have to disappoint expectations. The right hon. Gentleman made a remarkable observation when he said that if we added to the taxation he had remitted the amount by which the expenditure had been reduced, it would be seen that he had done very well. But that is counting the money twice over. I think the right hon. Gentleman misapprehended what the hon. Member for Stepney had stated as to the amount of taxation by which he had relieved poor people. Surely my hon. friend was absolutely correct. It is true that the Chancellor of the Exchequer has repealed the coal tax, but I think I could make out a very good case for an argument that whoever gets the benefit of the repeal of the coal tax, it is the foreigner who must have taken the coal, and who must have been obliged to pay the additional tax. But putting that aside, when one considers the relief given to the taxpayers of this country, it is not the tax which is repealed, but the amount of money collected from the people which the Chancellor of the Exchequer ought to look to. When one looks at the amount of money which the taxpayers have to find, even giving credit for the repeal of the coal tax, the relief is no more than what my hon. friend has stated. In my opinion, often expressed, and which I am not going to elaborate now, we cannot safely go on in this fashion. I have listened with very great interest to the speech of the hon. Member for Stepney. We welcome him as a tariff reformer, but my hon. friend's speech dealt with a subject which we ought to consider whether we are tariff reformers or not. Supposing a certain emergency were to arise involving increased expenditure, I do not think there is a Member of the House, whatever may be his opinion on tariff reform, who considers that within the limits of our existing taxation we have at present a satisfactory reserve. If we became involved in a great war, we would have to put on new taxes, or resort to old taxes, in order to secure a satisfactory reserve. To insure such a reserve, we must have existing taxes with existing machinery which has a margin on which one can meet a new demand. That is impossible on the present narrow basis of taxation, and for that reason, if for no other, I would be a tariff reformer and in favour of widening our system of taxation. The right hon. Gentleman has said that the essence of tariff reform is Colonial preference. I am not likely to underrate the importance of the relation of Colonial preference to tariff reform, but Colonial preference is not the only object we have in view. I am here to say that if no Colonial preference can be obtained, it would still be wise to alter our fiscal system for pure fiscal reasons, and in order to obtain an instrument of negotiation to assist us in getting better terms in the protective markets of the world. The less chance we have of Colonial preference the more important become the great Continental markets to us. This is largely owing to the increasing difficulty of entering those markets, and the increasing competition from the same quarter in neutral markets. I attach growing importance to Colonial preference. I am not going to argue now the effect of Colonial preference on political considerations in our dominions beyond the seas. I do not want to delay the debate. But the Chancellor of the Exchequer's observations seemed to imply that we on this side of the House could see no reason for any change in our fiscal system were it not for Colonial preference. I frankly admit that since I first studied the question of Colonial preference, in which I am much interested, I think it is quite as important from the aspect I have just indicated that we should have a change in our fiscal system as for any reason connected with preference to our Colonial possessions. I do not think the Chancellor of the Exchequer can complain of the way in which his Budget has been received. He has given us not very much information as to the financial effect of the various changes he has proposed, and, so far as I am concerned, with that official shortage of information, I am quite unable to follow his calculations or the basis on which he has framed them. I make this passing observation, that if the right hon. Gentleman is right as to the cost of the income-tax, then what he has appeared to give with one hand, he has largely withdrawn with the other; and I am surprised that more attention has not been paid to that point.

MR. STUART (Sunderland)

said he had voted for the Finance Bill with some reluctance, because he thought the present Budget had not recognised that the burdens of the poor were too heavy in proportion to the burdens upon the rich. The Chancellor of the Exchequer had done well in increasing the death duties at the top and introducing some differentiation into the income-tax, although he regretted that he had not done so at the top rather than at the bottom. But on the whole the proportion of taxes upon the rich and poor had remained practically unchanged. He regretted that because the present House of Commons had been largely returned in order to see that the proportion of taxes on the poor was relatively lessened. He had supported the Government for two reasons. First, they must in giving a vote consider what would be the consequences if it helped to turn out a Government from which they expected so much and put in its place a Government whose policy they condemned. Secondly, he understood from the Chancellor of the Exchequer that this Budget was not to be considered by itself, but that it must be taken in conjunction with future Budgets, which together would embrace the policy he desired. There were many in that House who agreed with him that before the present Government left office it was bound for the sake of the nation, for the well-being and prosperity of the people, to shift more burdens proportionately from the poor to the rich. The man upon whom their eyes should be fixed for the time was the man with 20S. a week and not the man with £2,000 a year, and it would be better for all in the House the sooner they recognised in legislative action that the very rich owed a very large debt to the very poor.

MR. HUNT (Shropshire, Ludlow)

said the hon. Gentleman who had just sat down had done justice to himself, his Bill, and his Government, and he seemed to think that they had done a great deal for the working classes, although it appeared to him that they had done very little. The Government took a penny off the tea duty last year, but this year they said they could not take another penny off because it would not benefit the consumer. As to the tax on coal, the removal of the duty had made coal very much dearer and most things were dearer than when this wonderful Government came into office. In his opinion we taxed the wrong things. We allowed the luxuries of the rich to come in without any taxation, and how that could benefit the working classes he was unable to understand. In another way we injured our working people because we compelled our manufacturers to pay heavy rates and taxes which amounted to 12 per cent. on manufactured goods, and we allowed manufactured goods from foreign countries to come in without paying a single penny in the way of taxation. In fact we gave to foreigners a preference of 12 per cent. in our own market. We gave State aid to foreign manufactured goods to the extent of £12 in every £100; he did not think that could be disputed. To make up for that we had to put a heavy duty on tea and sugar, and things of that kind, and the poorer people had to pay for it. More than half the burden of the Budget was put upon the simple luxuries and necessities of the poor. Out of the vast sum which the Budget dealt with it was calculated that the working people paid more than £40,000,000 a year, and they paid over £20,000,000 a year in the way of import taxes. We allowed foreign nations to tax our manufactured goods to any extent they liked, and the result was, as far as he could see, that we made the poor pay more for their simple luxuries and necessities than did the poor in any other country in the world. This Budget taxed the tea and tobacco of the poor more than it taxed the tea and tobacco of the rich. That, he supposed, was another elaborate plan for benefiting the poor of the country. The system which the right hon. Gentleman called free trade, and which Liberals called a system of free food, resulted in millions of pounds being paid on the food of the poor. Yet the Party opposite claimed to be the friend of the poor and to reduce their taxation, and it was because of "terminological inexactitudes" of that sort that they managed to get such a large majority at the last general election. They were still playing the same old game in North West Ham. He went down there the other day and saw the same old bills and the same old posters all over the place, talking about free food. Was it any wonder that the people were coming to know how unfounded was the theory that Great Britain was a free trade country? The taxation in Germany was very much less than it was in this country, and it was put cm things which were not the necessities and luxuries of the poor. In this country, however, the main portion of the taxes was put upon those luxuries and necessities. Surely that was against all the principles of the Liberal Party. It seemed to him that if we put a tax on manufactured goods other countries would have to pay us in raw material, which was exactly what we wanted. We were becoming more and more the consumers of raw materials and slightly manufactured goods than we were fifty or sixty years ago. In Germany a tax was put upon the importation of manufactured goods, and that was why they had money for wages which our poor people could not get. The Chancellor of the Exchequer had been obliged to tell the chambers of commerce that English trade carried on its operations under great and increasing difficulties, and that the burdens were clay by day getting heavier and heavier. On another occasion he said that it was a matter of lite and death to us to persuade other nations to rally to the free trade plan and come round to the "open door" We certainly had not persuaded them; we were being still further kept out of foreign markets, and he was sure the right hon. Gentleman would agree with him that we were dying now rather faster than we were before. People abroad were prevented from buying our goods and the foreigners were beating us in our own market, and this in spite of our being the greatest Empire in the world, and in spite of the fact that our people were in want and misery and hunger because they could not get into the foreign markets. The hon. Member for Merthyr Tydvil, in an article in the Industrial Review of 1901, said that the only reason he had for adhering to free trade was that he hoped by it to get rid of the landlords, and Socialists supported this ridiculous system now because they thought that the condition of the country would get so frightfully bad under it that they could engineer some social revolution and then carry their reforms afterwards. Under the present system we had no security of being able to retain any market except that of India for any length of time. We should retain the Indian market because we compelled India to adopt a system of taxation which was good for us. The Secretary of State for India would remember how in 1894 when a Liberal Government gave India a general tariff the Lancashire men came down and insisted upon an equal duty being put on Indian cotton, because otherwise the Lancashire people would have to pay the tax. Yet they were told that the consumer always paid the tax. It was the greatest humbug in the world. The only real employers of British labour were the people who bought British goods. After all was said and done, the manufacturers, dealers, and middlemen were only agents; they could not sell the goods if nobody would buy them. Under the present system of government foreign nations prevented their people from buying our goods, and that was simply because we had not the power to say, "If you play this game upon us we will do the same with you." The system did not benefit our poor people, it benefited only the middlemen and general dealers because they bought in the cheapest markets either the damaged goods of foreign white labour or the cheap product of African, Asiatic, and Indian labour. The poor of this country could only sell their labour in this country, while the dealers went to cheaper markets, and having sold their goods invested their money in foreign securities. That was the reason they did not want tariff reform. Hon. Members on the Ministerial Benches acknowledged they had no remedy for the present state of things. There were only two Parties in this country who had— the Socialists and the Tariff Reformers So-called free trade was just about dead. It was on its last legs. The Budget showed that hon. and right hon. Gentlemen opposite could not get any money, they had been knocking down expenses where they could, turning thousands of people out of employment at Woolwich and other places, and still they were in trouble, and next year their condition would be far worse. The trade unions had protected their members against the employers of this country, but they were powerless to protect them against the employers of other countries, and for that reason he was greatly surprised to find so many of them against the policy of his right hon. friend the Member for West Birmingham. When the working classes of this country once became familiar with that policy they would no longer suffer the tribulation and the misery they now endured for the sake of allowing foreign manufacturers and workmen to grow fat upon their sufferings.

MR. SEDDON (Lancashire, Newton)

expressed regret that the Chancellor of the Exchequer had not left the income-tax alone and directed his attention to providing for old-age pensions. It was said that the Colonies were willing to give us a preference, but the fact was that the Colonies would only give us a preference which would enable our manufactures to sell in their markets on equal terms with the Colonial products. It was idle to say that the Colonies were giving a preference when all the time, as anybody was aware who knew anything about the fiscal policy of the country, they were anxious to put on such a preference as would enable their own manufacturers to sell in their markets to the detriment of the British manufacturers. He asked the hon. Gentleman to answer the question whether the Colonies were prepared to give such a preference as would enable British manufacturers to compete in the Colonies on equal terms with Colonial manufacturers? If they did not do that, then preference was a mere idle dream.

Question put.

The House divided:—Ayes, 232; Noes, 91. (Division List No. 349.,0

AYES.
Acland, Francis Dyke	Findlay, Alexander	Massie, J.
Agnew, George William	Fowler, Rt. Hon. Sir Henry	Masterman, C. F. G.
Ainsworth, John Stirling	Freeman-Thomas, Freeman	Menzies, Walter
Allen, Charles P. (Stroud)	Fuller, John Michael F.	Molteno, Percy Alport
Armitage, R.	Fullerton, Hugh	Money, L. G. Chiozz.
Asquith,Rt.Hon HerbertHenry	Gardner, Col.Alan (Hereford,S.)	Montagu, E. S.
Baker, Sir John (Portsmouth)	Gibb, James (Harrow)	Montgomery, H. G.
Baker, JosephA. (Finsbury,E.)	Gladstone,Rt. HnHerbertJohn	Morgan, G. Hay (Cornwall)
Balfour, Robert (Lanark)	Goddard, Daniel Ford	Morgan,J.Lloyd(Carmarthen)
Baring,Godfrey(Isle of Wight)	Gooch, George Peabody	Morley, Rt. Hon. John
Barker, John	Grant, Corrie	Morse, L. L.
Barlow, Percy (Bedford)	Greenwood, G. (Peterborough	Morton, Alpheus Cleophas
Barran, Rowland Hirst	Greenwood, Hamar (York)	Murray, James
Barry,RedmondJ.(Tyrone,N.)	Grey, Rt. Hon. Sir Edward	Myer, Horatio
Beauchamp, E.	Gurdon,RtHn.SirW.Brampton	Napier, T. B.
Bell, Richard	Haldane, Rt. Hon. Richard B.	Newnes, F. (Notts, Bassetlaw)
Bellairs, Carlyon	Harcourt, Rt. Hon. Lewis	Nicholls, George
Benn,W.(T'w'rHamlets, S.Geo.	Harvey, A. G. C. (Rochdale)	O'Donnell, C. J. (Walworth)
Bethell,SirJ.H.(Essex,Romf'rd	Harwood, George	Partington, Oswald
Bethell, T. R. (Essex, Maldon)	Haslam, Lewis (Monmouth)	Paulton, James Mellor
Birrell, Rt. Hon. Augustine	Haworth, Arthur A.	Pearce, Robert (Staffs, Leek)
Black, Arthur W.	Henderson, J. M. (Aberdeen, W.)	Pearce, William (Limehouse)
Boulton, A. C. F.	Herbert, T. Arnold (Wycombe	Pearson,SirW.D.(Colchester)
Bramsdon, T. A.	Higham, John Sharp	Perks, Robert William
Branch, James	Hobhouse, Charles E. H.	Pickersgill, Edward Hare
Brigg, John	Holden, E. Hopkinson	Pirie, Duncan V.
Brocklehurst, W. B.	Holland, Sir William Henry	Price, C. E. (Edinb'gh,Central)
Brunner,J.F.L.(Lancs.,Leigh)	Holt, Richard Durning	Priestley, W.E.B.(Bradford,E.)
Brunner,RtHnSirJ.T (Cheshire	Hope,W.Bateman(Somerset,N.	Radford, G. H.
Buckmaster, Stanley O.	Horniman, Emslie John	Raphael, Herbert H.
Burns, Rt. Hon. John	Hyde, Clarendon	Rea, Russell (Gloucester)
Burns, Rt. Hon. Thomas	Idris, T. H. W.	Rea, Walter Russell (Scarboro'
Byles, William Pollard	Illingworth, Percy H.	Rees, J. D.
Cameron, Robert	Isaacs, Rufus Daniel	Rendall, Athelstan
Campbell-Bannerman, Sir H.	Jacoby, Sir James Alfred	Richardson, A.
Causton,Rt.Hn.Richard Knight	Jardine, Sir J.	Rickett, J. Compton
Cawley, Sir Frederick	Johnson, W. (Nuneaton)	Ridsdale, E. A.
Cheetham, John Frederick	Jones,SirD.Brynmor (Swansea)	Roberts, Charles H. (Lincoln)
Cherry, Rt. Hon. R. R.	Jones, Leif (Appleby)	Roberts, John H. (Denbighs.)
Clarke, C. Goddard (Peckham)	Jones, William(Carnarvonshire	Robertson, J. M. (Tyneside)
Cleland, J. W.	Kearley, Hudson E.	Robinson, S.
Clough, William	Kekewich, Sir George	Robson, Sir William Snowdon
Cobbold, Felix Thornley	Kincaid-Smith, Captain	Rogers, F. E. Newman
Collins, Stephen (Lambeth)	King, Alfred John (Knutsford)	Runciman, Walter
Collins,SirWm.J.(S.Pancras,W.	Laidlaw, Robert	Russell, T. W.
Corbett,CH(Sussex, E. Grinst'd)	Lambert, George	Rutherford, V. H. (Brentford)
Cox, Harold	Lamont, Norman	Samuel, S. M. (Whitechapel)
Cremer, Sir William Randal	Leese,SirJosephF. (Accrington)	Scott,A.H.(Ashton under Lyne
Crossley, William J.	Lehmann, R. C.	Sears, J. E.
Dalziel, James Henry	Levy, Sir Maurice	Seaverns, J. H.
Davies David (MontgomeryCo.	Lewis, John Herbert	Seely, Major J. B.
Davies, Ellis William (Eifion)	Lloyd-George, Rt. Hon. David	Shaw, Rt. Hon. T. (Hawick B.)
Davies, W. Howell (Bristol, S.)	Lough, Thomas	Sherwell, Arthur James
Dewar,Arthur(Edinburgh, S.)	Lupton, Arnold	Silcock, Thomas Ball
Dickinson, W.H.(St.Pancras,N.	Luttrell, Hugh Fownes	Sinclair, Rt. Hon. John
Dickson-Poynder, Sir John P.	Lyell, Charles Henry	Smeaton, Donald Mackenzie
Dilke, Rt. Hon. Sir Charles	Lynch, H. B.	Soares, Ernest J.
Dobson, Thomas W.	Macdonald,J.M. (FalkirkB'ghs)	Stanger, H. Y.
Duckworth, James	Mackarness, Frederic C.	Steadman, W. C.
Edwards, Enoch (Hanley)	Macnamara, Dr. Thomas J.	Stewart, Halley (Greenock)
Elibank, Master of	M'Callum, John M.	Stewart-Smith, D. (Kendal)
Erskine. David C.	M'Crae, George	Straus, B. S. (Mile End)
Essex, R. W.	M'Kenna, Rt. Hon. Reginald	Strauss, E. A. (Abingdon)
Esslemont, George Birnie	M'Laren, H. D. (Stafford, W.)	Stuart, James (Sunderland)
Evans, Samuel T.	Maddison, Frederick	Sutherland, J. E.
Everett, R. Lacey	Mallet, Charles E.	Taylor,TheodoreC.(Radcliffe)
Ferens, T. R.	Manfield, Harry (Northants)	Tennant,SirEdward(Salisbury)
Fiennes, Hon. Eustace	Marnham, F. J.	Thomas,SirA.(Glamorgan,E.)

Tillett, Louis John	Warner, Thomas Courtenay T.	Wills, Arthur Walters
Tomkinson, James	Wason,Rt.Hn.E.(Clackmannan	Wilson. Henry J.(York, W. R.)
Torrance, Sir A. M.	Wason,JohnCathcart(Orkney)	Wilson,J.W.(Worcestersh.N.).
Toulmin, George	Watt, Henry A.	Wilson, P. W. (St. Pancras, S.)
Trevelyan, Charles Philips	Wedgwood, Josiah C.	Winfrey, U.
Ure, Alexander	Weir, James Galloway	Wortley, Rt. Hon. C. B. Stuart-
Vivian, Henry	Whitehead, Rowland
Walker, H. De R. (Leicester)	Whitley, John Henry (Halifax	TELLERS FOR THE AYES—Mr. Whiteley and Mr. J. A. Pease.
Walters, John Tudor	Whittaker, Sir Thomas Palmer
Walton, Joseph (Barnsley)	Williams, J (Glamorgan)
Waring, Walter	Williams,Llewelyn(Carmarth'n

NOES.
Abraham,William (Cork, N.E.)	Gretton, John	Nolan, Joseph
Arkwright, John Stanhope	Gwynn, Stephen Lucius	O'Grady. J.
Ashley,W. W.	Halpin, J.	O'Kelly,James(Roscommon,N.
Banbury, Sir Frederick George	Harris, Frederick Leverton	O'Shaughnessy, P. J.
Barnes, G. N.	Hay, Hon. Claude George	Parker,SirGilbert(Gravesend)
Barrie,H.T. (Londonderry,N.)	Hayden, John Patrick	Parker, James (Halifax)
Beach,Hn.MichaelHughHicks	Healy, Timothy Michael	Pease, HerbertPike)Darlington
Boland, John	Hervey,F.W.F.(BuryS.Edm'ds	Powell, Sir Francis Sharp
Bridgeman, W. Clive	Hodge, John	Reddy, M.
Carlile, E. Hildred	Hogan, Michael	Redmond. John E. (Waterford)
Castlereagh, Viscount	Houston, Robert Paterson	Redmond. William (Clare)
Cave, George	Hudson, Walter	Richards,T.F.(Wolverh'mpt'n)
Cecil, Evelyn (Aston Manor)	Hunt, Rowland	Rutherford, John (Lancashire)
Clynes, J. R.	Jenkins, J.	Shackleton, David James
Coates,E.Feetham(Lewisham)	Jordan, Jeremiah	Snowden, P.
Corbett, T. L. (Down, North)	Jowett, F. W.	Staveley-Hill, Henry (Staff'sh.)
Courthope, G. Loyd	Joyce, Michael	Stone, Sir Benjamin
Crean, Eugene	Kimber, Sir Henry	Summerbell, T.
Crooks,William	Lardner, James Carrige Rushe	Taylor, John W. (Durham)
Curran, Peter Francis	Law, Hugh A. (Donegal, W.)	Thomson,W. Mitchell-(Lanark)
Delany, William	Lea,HughCecil(St, Pancras,E.)	Vincent.Col. SirC. E. Howard
Du Cros, Harvey	Lowe, Sir Francis William	Walsh, Stephen
Duncan,C.(Barrow-in Furness)	Lundon, W.	Wardle, George J.
Duncan,Robert(Lanark,Govan	Macdonald, J. R. (Leicester)	White, Patrick (Meath, North)
Fell, Arthur	MacNeill, John Gordon Swift	Willoughby de Eresby, Lord
Ffrench, Peter	Mac Veagh,Jeremiah(Down,S.)	Wilson. W. T. (Westhoughton)
Flavin, Michael Joseph	Mac Veigh,Charles(Donegal,E.)	Wyndham. Rt. Hon. George
Forster, Henry William	Meysey-Thompson, E. C.
Gardner, Ernest (Berks, East)	Mildmay, Francis Bingham	TELLERS FOR THE NOES—Mr. Seddon and Mr. George Roberts.
Gill, A. H.	Mooney, J. J.
Glover, Thomas	Muntz, Sir Philip A.
Grayson, Albert Victor	Murnaghan, George

Bill read the third time, and passed.