HC Deb 14 May 1907 vol 174 cc871-919

Postponed Proceeding on Amendment to Question, "That the Bill be now read a second time:—"

Which Amendment was— To leave out from the word "That," to the end of the Question, and add this words "in the opinion of this House, the financial needs of the country, as disclosed in the Budget statement of Mr. Chancellor of the Exchequer, require that, the basis of taxation should be broadened, in order that the anomalies and hardships inseparable from the present high rate of particular taxes may be diminished, the revenue necessary for the public service and for social reform raised with fairness to all classes of the community, and our fiscal system adapted to the present condition of national and imperial trade,"—(Mr. Austen Chamberlain)—instead thereof,—resumed.


continuing his speech, said that it was not right that hon. Members should be asked to break the promises which they had made to their constituents. As regarded the Amendment generally, they all felt that it had been drafted to rope in certain Members of the Unionist Party; but he could not help feeling that there were a good many Members on the other side of the House whose silence could not be construed otherwise than as indicating their opposition to the Amendment. He himself would have no hesitation in voting against it.

MR. HUNT (Shropshire, Ludlow)

said that one hon. Gentlemen after another on the Ministerial side had impressed upon the House that we were a free trade country. The statement was absolutely untrue. The import duties on the necessaries and luxuries of the poor came to about £25,000,000 a year; how could that be called even free imports for the poor, let alone free trade? There were also many millions of money taken every year in the excise duties on beer and spirits which were also largely used by the poor. On the hand, almost all our manufactured exports by which our working people earned their wages were very heavily taxed by other nations. Where, then, did the freedom of trade come in? He had never been able to make it out. If hon. Gentlemen opposite were to say that our system was one of State aid to foreign countries, he thought they would be much nearer the truth. Under our present system we were practically giving foreign nations an advantage on manufactured goods in our own market of about £12 in every £100 worth of goods which they sent to us. The reason was that our manufacturers had to pay in rates and taxes about £12 for every £100 of manufactured articles which they exported, while we allowed all foreign goods to come into this country without paying one half-penny towards rates and taxes. He would like to ask if any one would deny that proposition.

MR. LUPTON (Lincolnshire, Sleaford)

said that he would deny it.


said he would give the hon. Gentleman his chance after he had done. On the other hand, foreign nations made us pay a great deal more than the equal of their rates and taxes for the goods we sent to them, so that we paid not only our own rates and taxes but a great deal more than their rates and taxes, as well as for the goods which we sent to them. Let them take the carpet trade. The charge on our carpets was £72 on every £100 worth of carpets sent to America. The head of an old firm of carpet manufacturers in his own constituency had told him that it was perfectly impossible to do trade with America now, unless they produced some new kind of carpet the design of which they had invented, but which the American manufacturers had not yet learnt to make. American carpets were sold in Bridgnorth, one of the homes of the carpet trade, whilst workers in the carpet trade in that town were obliged to be kept on short time. On the other hand, the Americans can send any number of £100 worth of their surplus carpets into this country without paying a halfpenny towards our rates and taxes, and, according to Mr. Carnegie's statement in his address to the students at St. Andrews University in Scotland, surplus goods do not even pay rates and taxes in their own country because the extra amount made does not increase the numerous general charges. In the case of carpets America has not only kept our carpets out by her high duties, but in the early nineties gave a bounty on exported carpets, mid the effect was that several firms in Kidderminster closed their works, many looms were broken up and sold out of the country, and carpet weavers who had been earning £3 a week were left to starve, or attempt to get work as ordinary labourers at less than a third of their former wages. He (Mr. Carnegie) pointed to the industry of agricultural implements and showed how the Americans had triumphed and beaten us in our own market, so that now one agricultural implement maker made more machines in America than are made in the whole of Great Britain. The same unfair disadvantages applied to agriculture. Land in this country was heavily burdened by rates and taxes, and by death duties as well. When he was in America twenty-eight years ago he was told that, besides there being hardly any tax on the land, the work was done by niggers whose wages were much lower than those of agricultural labourers in this country. The farmers sent over their produce to this country, and also obtained preferential rates from our railway companies. Under those circumstances, he did not think that agriculture could be expected to flourish in England. What was wanted was to help the agriculturists and the agricultural labourers; but it must be on a different system from that proposed by the present Government. Could anybody explain how it was that we should have in this country such a number of unemployed and unemployable men? As the hon. Member for Woolwich had said, if a man was out of work for so many months he became to a certain extent an unemployable. China and Japan were becoming great manufacturing countries, and we should have in the near future to face products of the cheap labour of those countries. Goods manufactured by means of that cheap labour would soon be coming in free in increasing quantities. He would ask the Labour Party to bear in mind that in those countries a man worked for 8d. a day and a woman for 3d. or 5d. The supply of articles produced by means of that cheap labour was beginning to arrive already. He had recently bought in one of the best shops in London a Japanese table cloth, and he was told by the shopman that Chinese goods of a similar description were also coming in. It was by goods such as those that the Irish linen industry was being under sold. He would remind the House that the American Press had very strongly pressed upon the American people that if the scheme of the right hon. Gentleman the Member for West Birmingham came off it would do an enormous amount of harm to American trade and an enormous amount of good to British trade. Public men in America had also expressed the same opinion. The exchange of products benefited both buyer and seller, and there was a great difference between a home and a foreign market. With British home commerce both buyer and seller were Britons and both employed British workpeople; with foreign commerce only one was a Briton and one employed British workpeople. Hence home commerce was doubly profitable. But that was not all. Our coal and machinery being sold to go abroad helped to develop foreign industries, and those industries in return produced goods which competed with our manufactures. If our coal and machinery were, however, sold at home they would assist in developing home industries and in keeping our own workmen employed. About fifty years ago we made more iron and steel, manufactured more machinery, and wove more cloth than all the rest of the world. At the present time we were beaten in two great industries by America and Germany. We were becoming more and more the exporters of raw material and partly manufactured goods, whilst other nations were more and more sending us their finished products. In consequence of that state of things our people suffered terribly from want of work. During the ten years ending 1905 Germany took £63,000,000 in gold more from this country than we did from Germany. He could not help thinking that this went to show why employment was so plentiful in Germany whilst we suffered so much from want of employment in this country. Probably a large part of the £63,000,000 was spent in wages in Germany. From Great Britain, says the German official writer, Germany takes chiefly raw material and half finished goods, so that Germany may manufacture them themselves; and he added that German raw produce and semi-crude materials are now only sent to Great Britain in a very limited degree. Hon. and right hon. Gentleman opposite are always taking about what they call our invisible exports, chiefly ships and investments abroad. Mr. Perris, the present Secretary of the Cobden Club, had himself pointed out that our capital and plant had been steadily flowing abroad for the last fifty years. No doubt our money and machinery went abroad, but it employed foreign labour instead of British labour, and, not only that, it often employed very cheap labour which competed with our industries and our workmen at home. People who called themselves free traders made a great point about our great shipping trade, but from the working man's point of view our shipping trade really did the donkey work for the other nations of the world and humped their goods about. Even in that case we had to employ a number of foreign and Asiatic sailors, and he did not see where the benefit of that system came in. The President of the Board of Education told them yesterday that the poor paid enough in taxation. He should rather think they did. They paid an Empire tax of something about £25,000,000 a year upon the necessaries of life (if tobacco was to be counted a necessary, although it might perhaps be called a luxury). But, on the other hand, in the year 1906 there came into the country without paying a halfpenny of taxation such luxuries of the rich as ornamental feathers, silk manufactures, leather gloves, motor cars, fancy goods, musical instruments, toys and games, dressed skins and furs, and undressed skins and seal skins, excluding rabbit skins, to the value of £27,874,000. The Chancellor of the Exchequer could not put a halfpenny of taxation on these things, because it might help our people to get work and wages, and none of the money would come out of the pockets of the poor. The right hon. Gentleman said at Penzance in 1903 that the adoption of a tax of 2s. a quarter on corn would inflict a grievous burden on the poor; yet that worked out at a tenth of a farthing on 10 lbs. of wheat. The right hon. Gentleman this year said that after a careful review of the existing circumstances in connection with the tea duty, the reduction of 1d. in the pound would be of no relief to the consumer, and that if the sugar duty were halved it would be no good to the great bulk of the consumers. So that while something under a quarter of a farthing on a 4-lb. loaf would be a grievous burden to the consumer, although about half the supply would be untaxed, and therefore there would be competition with an untaxed supply, the reduction of 1d. a pound of tea, in regard to which there could be no competition with an untaxed supply, would make no difference to the poor people this year, although it was a great deal of good to them last year; and on sugar, which the right hon. Gentleman said was a food and a necessity of the poor, a reduction of a farthing a pound was no use. He supposed that they must remember that lawyers were educated, trained, and brought up to argue one day that black was white and the next day that white was black, but he really thought that the kind of argument used by the Chancellor was a trifle overwarm for ordinary working people. The Government had lost a great opportunity of consolidating the British Empire. They appeared to be so tied up with their gigantic election inexactitudes of big loaves and enslaved Chinamen, who, however, could not be persuaded to leave their slavery; and were so wedded to the old-fashioned, obsolete, out-of-date, wooden-headed, blind-eyed fallacies of Cobdenism, that if they had their deserts they would go down to history as the Ministry of inexactitudes, lawyers, and second-class parish councillors.

* MR. TOULMIN (Bury, Lancashire)

said the hon. Member for Ludlow usually managed to entertain the House, but he had omitted one point from his speech on this occasion. They would have liked to have heard from him his opinion of the speech of his leader so that they might know whether in his opinion his leader had toed the line. That at all events was the object of this Amendment. It was in order that the country might get to know how the right hon. Gentleman stood with regard to this matter. He was mistaken as to our exports and imports. During the last three months our imports of raw material had increased by,£6,500,000, and of manufactured articles by £1,333,000. Our exports of manufactured articles had increased by £6,000,000, and of raw material by £1,000,000. The hon. Member for North-West Lanark had endeavoured to put the Chancellor of the Exchequer on the horns of a dilemma with regard to the sugar tax. But he did not think his right hon. friend, in saying that if he took off a portion of the sugar tax this year no benefit would accrue to the consumer, was laying down a principle as to the general influence of the reduction of a tax. He understood his right hon. friend to mean that no benefit could accrue in the present state of the market. If the hon. Member claimed that whenever a tax was taken off the consumer always got the whole benefit he must also admit that when an extra tax was put on the consumer always paid it. Attention had been called to the speech of Mr. Gladstone in 1843 when he advocated a preference on corn to Canada. But at the time we had a tax on corn, and in as much as we were breaking down the tax we were proceeding in the direction of free trade, and it was not inconsistent to support Mr. Gladstone on that occasion. To-day hon. Members might see Canada and Australia breaking down the barriers between them and reducing taxation. He objected to a corn tax, not merely because it was protective, but because bread was the last resource of a person who had only one halfpenny to spend. It was the one thing that those who were poorest must have, and therefore in his opinion it ought not to be subject to taxation at all. He had never heard protectionists face the fact that where there was a protective duty the consumer paid both the duty and the increased price of the goods which did not come under that particular duty. The right hon. Member for St. Georges desired to diffuse the burden of taxation by taxing more commodities. But why were these commodities chosen? Sugar was chosen in place of corn because the whole of the revenue went into the Exchequer. If they chose other commodities the consumer not only paid the whole duty, but also paid an increased price. What was the result in the case of the French corn tax? The price was not raised by the whole of the amount of the duty, but notwithstanding that, the consumer paid the duty many times over. Only 5 per cent. of corn was imported into France, and that 5 per cent. paid the Government 12s. 2d. per quarter. Ninety-five per cent. was home grown, but the price of the whole 100 per cent. was raised by 8s. a quarter. The price to the consumer was raised by 800 shillings, of which 60 shillings as duty went to the Government, and 740 shillings went elsewhere. One need not wonder at there being an enthusiastic army of advocates for such a system of taxation. The right hon. Member for East Worcester had said that our present fiscal system handicapped our industries; but no evidence had been adduced in favour of that contention. He repudiated that suggestion, and contended that our fiscal system provided a medium for an abnormal growth of industry, such as had never been seen in any other country since the world began. Certain industries which were highly specialised had a greater development here than anywhere else Free trade provided a better soil and industries obtained a luxuriant growth. Let them take the textile and shipping industries. This country was not defenceless; we had cheap goods and cheap services which through free trade enabled us to bargain with any other nation in the world. Which nation with a tariff was able to get better terms than ourselves with other nations? He had some figures which would disprove the contention of the right hon. Gentleman that countries with tariffs could always keep their mills going. He would not go into details, but would merely quote— By inquiries addressed to 1,233 Berlin hardware concerns it was found in October, 1901, there was a decline of from 15,000 to 18,000 workmen, chiefly adults, as compared with the corresponding months of 1900. In the iron-founding industry no less than 39 per cent of the workmen were discharged. A month later another 7,500 were thrown on the labour market owing to the cessation of the 'season' trades. Of the 6,375 weaving looms at Aachen 1,231 were standing still and fully 1,300 men were without employment. So far as he had been able to discover, the seasons of depression, either in the United States or in Germany, were worse and more profound than here, and they recovered later and not sooner. Then again, the right hon. Gentleman had said that they could not put more capital into their mills. Really, to any one going over Lancashire, that seemed very peculiar, because he did not think that any one who took an hour's journey in any part of the spinning portion of Lancashire could fail to see a new mill either working or rising. How did free trade affect that? It enabled them to build mills more cheaply than any other manufacturing country. A mill which in England cost £125,000, in Germany cost £185,000, in France £200,000, and in the United States £250,000. The interest and depreciation alone on the extra money spent in the United States, was more than the wages which were paid to operatives in England. He was speaking entirely of the cost of building the mill before it was run. This "handicap" result was that in the Oldham district there were actually more spindles at work than in the whole of Germany. Was it not a most marvellous fact that we took America's raw material, although she was a manufacturing nation, brought it 3,000 miles across the sea, worked it up here, and then exported £100,000,000 worth of it to every quarter of the globe? [An HON. MEMBER: It has got less and less every year.] No; it had got more and more. Taking the figures for ten years, it had grown from £65,000,000 to £100,000,000. We were not taking as much extra raw material, but we were exporting greater value. Why? Because we were putting more work into it. He could not see any economic disadvantage whatever in that. We exported of goods, made from the raw material from America, ten times as much as they did. What was our record in regard to shipping? The right hon. Gentleman had referred to our supremacy in shipping as having been as great half a century ago as it was now. He thought the right hon. Gentleman was mistaken. In regard to the United States, which had everything that was required for shipping within its own borders—skilled workmen, iron, wood, water, magnificent waterways, and everything which ought to encourage it to be the greatest maritime nation the world had ever seen—why was it that we had in their ports 25,000,000 tons of shipping while they had in ours 1,500,000? The whole reason was free trade, because free trade gave us, in the building, the furnishing, and the working of our great steamers—which were not donkey-power as the hon. Member opposite had remarked—all the advantages which enabled us to build cheaply. These steamers had the the most highly organised engines that the world had ever seen. More skill went to the building of those ships, more intelligence and power in sailing them about the world and in conducting its commerce, than had ever been seen in any other industry. Our shipping industry was one of the marvels of the world at the present time. We not merely did the shipping between the United States and ourselves, but we did 14,000,000 tons of their shipping with other foreign nations, and that was how we paid for the corn and cotton which we got from them. In 1840 our maritime supremacy over France was four times, whereas it was now nine times as great; our mercantile navy was nine times that of France. In 1868 the United States had 2,500,000 tons of shipping compared with our 4,500,000 tons. In 1870 we were 5,500,000, and the United States 1,500,000 tons. In 1901 we had 9,500,000, and the United States had less than a million. That, in his opinion, and after reading what had been said by inquirers in the United States, was entirely owing to the fact that we were a free trade nation and they were not. We were threatened with Germany getting up to us. Between 1870 and 1900 the figures for Germany had doubled, but they had only added a million tons while we had added 4,000,000. It would take Germany at that rate a longtime to get up to us, although they had doubled and we had not. Our superiority over Germany in regard to steam was even greater. In 1880 we had 2,500,000 tons more in steam than Germany; in 1890 we had four and one-third millions more; and in 1900 we had 5,750,000 more steam tonnage than they had. He wished for the indulgence of the House while he turned to the Imperial side of the question. Lancashire was in the fore-front of this battle, not because of any accidental circumstance, but because she was interested in two of our great trades, shipping and cotton. Those were the two trades which would suffer most if the proposals of hon. Gentlemen opposite were adopted. The right hon. Gentleman had said that the preference proposals were the first great advance towards greater unity. He (Mr. Toulmin) said on the contrary, that if they began with tariff bargaining they would throw not an apple but a whole bushel of apples of discord between ourselves and the Colonies. We should set every trade in England examining the kind of injury which was done it by the colonial tariffs. The Leader of the Opposition had said that afternoon that without close relations they could not have unity. Close relations in what? Close relations in those things on which they could agree, and on which they could unite, but not close relations when they were actuated by absolutely opposite principles. On the one side they were protectionists; they at home were free traders, and to set them haggling on this point was to invite disaster. Sir Robert Peel repudiated haggling with foreign nations; they introduced haggling with our Colonies as a step towards free trade. What did that lead the Leader of the Opposition to? They had again that afternoon the schedule of forbidden industries in the Colonies. Nothing was more marked in the tour of the right hon. Gentleman the Member for West Birmingham than the fact that he referred to the industries which the Colonies were not to begin. That he believed was kept out—he hoped that he was correct in saying so—of the revised edition of his speech. Of course it must be left out. It was never intended that there should be a restriction of Colonial industries; otherwise, we should at once get to loggerheads with them. Now, the right hon. Gentleman said that they were to prevent the building up of industries in the Colonies, and we were to supply the manufactured goods. There they had something to quarrel about, because they were asking the Colonies to give up the whole basis of their policy. There had been a good deal said both inside the House and out of it, about, the foreigner paying the tax. He was not going into the point whether the foreigner paid the tax, because, in reference to the question he was about to ask, he did not very much care which answer they gave. Who paid the tax imposed by Canada on Lancashire cotton? Whoever paid it, as he had said, it was a penalty and an obstacle to trade. He had not forgotten the campaign in regard to the Indian import duties, nor had he forgotten what hon. Members opposite had told Lancashire in regard to it. That was the occasion on which the present Chancellor of the Duchy defended India. Hon. Members opposite then said that the Indian 5 per cent. duty came out of the pockets of Lancashire. Very well then, out of whose pocket did the Canadian twenty-three and one-third come? Did it come out of the pocket of Lancashire or the Canadian consumers of Lancashire goods? He had said that the duty was an obstacle to trade between Canada and England. They gave us a preference, and so far as that went it reduced the obstacle and they welcomed it; so far as it was a sign of goodwill they welcomed it. In criticising Canada in this matter he hoped that it would be clearly understood that he was criticising only those who were advocating what they believed to be Canada's position in that House and outside of it. He had to look at the matter from the point of view of one whose welfare depended on that of Lancashire. He had business relations with three of the great trade centres of Lancashire, and he represented the fourth, and whatever did Lancashire harm, would do himself the greatest possible harm. That might sound a selfish argument. They were told that Lancashire was selfish, and that her object in supporting free trade was selfish. Let that be so. Let them be taken as they were. Sometimes they had a rub at their neighbours, and they must be content to take a rub in turn. He had never known a Lancashire man get the better of a Yorkshire-man in a horse deal. Let it be so. They were both of them hard men. Let the House beware of setting them bargaining. It would be the millions of Lancashire against the millions of Canada: and the millions of Yorkshire against the millions of Australia. What was the picture which the hon. Member for Aston Manor had given them of the Colonies? He had said they would be ready to prefer a reduction of Italy's tariff to our own open market. Did hon. Members believe that the Colonies would be ready to give benefits to Italy which they did not give to us, although we kept our doors open? This country bought from them every year £28,000,000, and they only bought from us £14,000,000. He hoped the House would not take the hon. Member's estimate of the Colonies. Having an open market, we had not become adepts at tariff bargaining; but if Lancashire was to go in for bargaining then she must start at the beginning and go into it pretty thoroughly. What was the present position? Great Britain had given her Colonies freedom to tax Colonial purchasers of our goods. That freedom was greater than preference, nay it was even greater than equality, because in this particular case equality was greater than preference. Their absolute freedom was greater than any trade relations with us, however beneficial, could be. If Lancashire worked for Canada in the United Kingdom there were no obstacles to the payment from Canada, but if Lancashire wished to pay for Canadian corn how did Lancashire stand? What would be the position between Lancashire and Canada if they agreed to try to strike a bargain? Lancashire cotton was taxed 25 per cent. in Canada. Canadian corn was free in Lancashire. How, then, could Lancashire bargain with Canada for preference when there was this inequality between Lancashire cotton and Canadian corn? If they placed a tax of 25 per cent. on English purchasers of Canadian corn they would then be equal, and they could bargain. They only tolerated the present position in the name of political freedom and because they wished the Colonies to be absolutely free; but once set them to tariff bargaining, then the position would become intolerable. How did the position stand with regard to the suggested preference? What was the preference to be? Lancashire also dealt with the foreigner, and consequently Canada's position, according to the views of hon. Gentlemen opposite, would be "We, Canada, penalise your import trade into Canada. We have the thumbscrew on Lancashire to the extent of 25 per cent. If England will impose penalties on Englishmen dealing with foreigners we will relax the thumbscrew a turn or two off your Lancashire cotton. We cannot relax it altogether for fear of our own manufacturers." He protested against the false view taken of this preference by bringing in a comparison with the foreigner. Members opposite said "Look how Canada taxes the foreigner." His contention was that they must look at the position between Lancashire and Canada before they looked at the position between Canada and the foreigner. They had to look at the position of Canada and Lancashire in regard to cotton goods, and Canada and Yorkshire in regard to woollen goods. The effect of Canada's barrier was that we bought from Canada £28,000,000 and Canada bought from us £14,000,000. In the face of that fact Canada could not hoodwink them by diverting their attention to the foreigner and saying "We tax the foreigner more." That was not the question. They replied" Look how you treat our trade and how we treat yours; look how we treat your corn growers and our own upon an absolute equality; look how you treat your own cotton and woollen manufacturers and our cotton and woollen manufacturers." If once they accepted the tariff reform policy they would be committed to retaliation, preference and protection, and they would be putting into the hands of friends weapons with which they might mutually hurt one another, because inevitably every great trade would have to fight for its own hand, and where there was unity at the present moment, they would produce enmity. Where was the greater unity that would come from these negotiations? If it came to a general scramble, Lancashire would fight, and Lancashire would be right. The Colonies at the present time had fiscal freedom to tax any of our goods for the purposes of retaliation and protection. They taxed our goods and when they offered us a preference it was only a form of retaliation, because they put a duty on which they said they would take off if we would give them something in return. They could not adopt such a system by halves, but must adopt all its evils, jealousies, and strife. Lancashire now fought with a single eye for free trade. There was a great reserve of free trade strength in Lancashire to-day. Many thousands in Lancashire voted for Unionists at the last election, because they knew that free trade was safe, in fact the first day settled that, and that prevented the Unionist Party from falling to pieces. The hon. Member for Durham had spoken of 100,000 Unionist free traders, and he had no hesitation in confirming his statement so far as Lancashire was concerned. Lancashire Members were not receiving from their constituencies a shower of resolutions in favour of tariff' reform. By free trade Lancashire had grown, and if they destroyed free trade they would increase the manufacturers' cost, burden the workers, hinder their customers' payments, and lay them open to retaliation the whole world over. Preference would bring no increased unity, but internal tariff wars, and would produce not bonds of unity, but burdens of bitterness. Canada herself made no such claim as had been suggested by those who wished to entrap her and get her to pull the protectionist chestnuts out of the fire for them. They were calumniators of the Colonies who represented them as already traitors in their hearts to the Empire. He would like to read to the House the words of Sir Wilfrid Laurier— The people of Canada did not come here as suppliants; they did not come here to ask for anything for their benefit; they asked the British people simply to consider whether such a policy would be in the interests of the British people. If the British people came to the conclusion that it would not be in their own interests, then Canada wanted none of it. He had read in some newspapers here that unless the British people gave a preference to Canada, unless there was mutuality of preference, that they in Canada were prepared to desert the British policy and to seek markets in the United States. That statement had no shadow of foundation. Their neighbours were well aware that whenever it came to a matter of competition in Canadian markets between products of the United States and products of Great Britain their choice was made—they stood by the Mother Country. There was no system of preference which could be devised which was not unjust between Colony and Colony. It would give to the poorest of the King's dominions such as South Africa the least, whilst it would give to the richest Colonies like Canada the most. It would be unjust between the Home Country and the Colonies, and the various industries both at Home and in the Colonies. It would also be unjust between trade and trade. The House of Commons in its vote that night could not do better than respect the ripe political wisdom and the long experience of that great Canadian statesman, Sir Wilfrid Laurier, expressed in his words— If preference for preference were not given, however, their loyalty would remain the same. The courageous ancient Gauls were afraid only of one thing, and that was of the canopy of heaven falling. Those who entertain a doubt of the loyalty of Canada might just as well fear the fall of the blue vault of heaven. The future of the British Empire was absolutely secure so long as it rested upon the complete and untrammelled autonomy of all its component parts. By that autonomy this Empire had been built up, and by that autonomy, without preference, it would stand.

* MR. PIKE PEASE (Darlington)

said he had listened with great interest to the speech of the hon. Member for Bury, because he remembered the excitement about the corn tax when he was first elected at a bye-election there. He remembered a speech made by the hon. Member in which he said that he was anxious to take the whole of the taxes off the poor. It seemed to him that the debate which had taken place had not touched to any great extent the question before the House, namely, the Second Reading of the Finance Bill, but was chiefly in regard to economic doctrine. He would like to say a word or two in reference to the taxing of the poor. The hon. Member for Gloucestershire, in what he might call a provocative speech, had said that the Unionist Party were dishonest. What he had stated was that the Unionist Members advocated the views they held upon tariff reform, not because they believed that tariff reform was in the interests of the country, but because it was in their own interest. He had also said that the resolutions passed in favour of tariff reform were dishonest resolutions. Surely the hon. Member knew that resolutions were passed upon every conceivable subject in almost every constituency, and it was the custom to send them to the Member of Parliament representing that particular constituency. He wished to deal for a moment with the question of taxing food. Hon. Members opposite had stated on many occasions that they would like to do away with the tax upon sugar. He believed that at the last election there were 131 Members who pledged themselves, under any circumstances, not to vote for any tax on sugar at all. The only excuse put forward for the sugar tax was that it was a payment for old age pensions. The right hon. Gentleman the Member for West Birmingham had on many occasions advocated contributions from individuals towards State-aided pensions, and if that was what this Budget meant there would have to be a compulsory contribution towards those pensions so long as there was a tax on sugar and tea. If those taxes were increased next year a great deal of the money would go towards old age pensions. They frequently saw at election time great placards "Vote for So-and-So and no taxes on food." It was often said by speakers on the Government side of the House that the people of this country would not stand taxes on their food; but the taxes upon food and drink excise and customs last year amounted to no less than £48,000,000. We were at the present time the greatest tariff State in the world. He was not at all a bigoted protectionist. If they taxed the things they produced instead of those they did not produce they did increase the price in the home market to some extent if the foreigner did not decrease the price of the article to the extent of the tax. Let them take the position of many firms in the north of England. Of course there was at present a very great deal of prosperity all over the country. His friends on the other side of the House knew that there were a considerable number of works stopped owing to the present fiscal conditions. Some of the owners of these works had gone abroad with their factories. If a man had to decide whether he would put up works in this country or in Germany he found that by putting them in Germany he had the advantage of a market of 60,000,000 people in Germany and 40,000,000 in this country. If a man had the offer of two pieces of land separated by a stream over which there was a bridge, and he was told that if he erected his factory on one side there would be a toll to pay if he brought his goods over the bridge, but that if he placed his factory on the other piece of land there would be no toll, there could be little doubt as to the place which he would choose for the erection of his works. That applied to our fiscal system at the present time. He was not going to advocate the system of Germany. He thought he might say however that in the interests of this country something should be done to alter our present system. Referring to the question of the income-tax, he appealed to the Chancellor of the Exchequer to consider the present system which prevented people who paid the tax and who were not liable for it from getting their money refunded. This was a very hard condition. There were thousands of people who were paying income-tax which was not due by them to the State, and he hoped the Government would be able to do something to alleviate the hardship. He would give two instances. One was the case of an overdraft in respect of which £5,000 worth of shares were deposited with the bank against a loan of £4,000. The borrower had to pay income-tax on the interest which he received on his £5,000 worth of shares, but as he had to pay to the bank interest on the £4,000 of borrowed money, he was really only getting an income on £1,000. The great majority of the people did not know that they could obtain a refund of the income-tax in respect of such a transaction. the other case was that of poor people, of whom there was a large number, who had from £100 to £300 in some shares on which the income-tax was paid before they received the dividend. Those people whose incomes did not come within the taxable limit did not as a rule make any application for the tax which had been deducted. He thought the Chancellor of the Exchequer should do something to make the process of getting the money refunded simpler. If a graduation of the income-tax was going to take place in future, it should not be done on the lines advocated in the Budget. He admitted it was the clearest Budget statement he had heard in the House of Commons, but they were not carrying out the principle of taxing the people who were best able to pay. A poor widow loft with a bare competence who had to pay Is. in the £ income-tax was not so able to pay that tax as a bachelor earning £2,000 a year. He hoped these suggestions would receive the consideration of the Treasury.

MR. HARWOCD (Bolton)

said he did not think they could look forward to any decrease in the total cost of running the State, and therefore he regretted that the Government had given up the coal tax. There were certain advantages in that tax. One was that a portion of it—much the larger portion of it—was paid by the foreigner. Another was that it enabled the nation to get something out of its own property. As a Radical he had always held the opinion that the nation had property in its mineral wealth as well as in its land, and the coal tax was one of the means by which the nation could get something from its own. It was not enough that the miner should get his wages, the mineowner his profit, and the shipowner his freight. He wanted the people who were the owners of the coal to get something, but practically the nation at present was getting nothing beyond the ordinary profit of trade. But whether that tax was a good one or not, at any rate it brought in £2,500,000, and he would have preferred it to remain in order to make a beginning with old age pensions. He was deeply disappointed that a beginning was not made with the solution of that question. He held that if the Chancellor of the Exchequer had anything to give, he should have begun by giving to those who needed it most. He did not think that the cost of old age pensions would be anything like what had been put before the House. There were a great many considerations in the calculation which he thought had not been given weight to. As an employer of labour he believed that of all classes of the community those who, beyond the people receiving the pensions, would derive the greatest benefit would be employers of labour. Fifty or sixty years ago that principle was discovered in the Poor Law. When the State subsidised wages it more or less gave a benefit to employers, and he believed it would be fair if they had to contribute a certain proportion to the solution of the pension problem. Therefore, he hoped that the Chancellor of the Exchequer! would not be deterred from tackling the problem by any fear of treading on the corns of employers. The suggestion of the Opposition as to the method of raising money was about the worst possible. The Leader of the Opposition, while professing to be a free trader, said they were under the necessity of raising money, and that, therefore, he was inclined to favour the proposals for preference because they were a means of raising money. But surely that was going on the principle of "killing the goose that lays the golden egg." If the nation had to raise more money, the greater was the necessity that the business capacities of the nation should be untouched, and, therefore, if they weighted the nation with anything like these duties they would be impeding the nation in providing the additional wealth required. The suggestion of the Leader of the Opposition was contrary to common sense. The right hon. Gentleman had said he was in favour of free trade in principle. How did he justify his departure from that principle? He had said that free trade in the abstract was a right principle; there was no doubt about that; but it did not answer the case, because no one else adopted it. The right hon. Gentleman and his friends did not believe in the kind of free trade we had in England. On the Ministerial side of the House they did believe in it. If we were the only people to adopt free trade they would still believe in it. The Leader of the Opposition said, "Do you mean to say that England knows better than anybody else? Here are Germany, France, and the United States, and here are all our Colonies adopting plans of protection. Are you any wiser than they?" He thought we were, and there were many cases in which we had been wiser. He thought we had taught Continental countries and the Colonies a great deal more than they had taught us. We had taught them constitutional government, given them railways, and no end of things, and when he looked round he thought we were more likely to be right than they were. Who was suffering from the protection in Germany, France, and the United States? Speaker after speaker had talked as if protection in those countries had succeeded. He knew the industrial conditions of those countries pretty well, having close business relations with them, and he submitted that it was not protection which had succeeded. Why had German trade developed? It was because Germany had practically adopted free trade ever since the foundation of the Empire. He remembered when there were thirty different systems of customs in Germany. When the Empire was founded, those were swept away, and Germany had prospered, not by protection, but by her free trade. He wished to speak respectfully of France. He read an article in a French paper the other day on the question "Is France prospering?" He gathered from it that the French people were coming to the conclusion to which observers had come for some time, that the system there was not prospering. Considering her natural advantages France was not prospering as she would have done under free trade. He was very strongly of opinion that if the United States adopted a policy of free trade it would be a great danger to England, considering the enormous natural advantages of soil, climate, minerals, and rivers which that country possessed. He did not think that we could compete with the United States under those circumstances. Again, the United States was an instance of the advantages of free trade. There were no customs duties between one State and another. The United States was a cosmos, and within its vast continental borders they had all the advantages of free trade. Their prosperity was due to free trade; where there was failure it was due to protection. It was said that we had not been perfectly frank in regard to the business relationships between the Colonies and the Mother Country. The Colonies said to us—"You are to jeopardise four-fifths of your trade in order to develop one-fifth of your trade with us." But, in the first place, they would not give us their trade; and, in the second place, they had not got it to give. He spoke from his own personal experience. The Colonies treated the trader in this country worse than anyone else in the world. He said to his Colonial friends, "Do you mean to admit my goods on the same conditions as we admit yours in this country?" And they frankly said, "No; we cannot afford it, but we will give a preference." They acknowledged that they built a wall against us, but the preference they offered was that they would add another twenty feet to that wall against the foreigner. But what use was that to the traders in this country? As a matter of fact, the duties against his goods were greater in Canada and Australia than they were in Germany and France. It was said that if we did not close with the Colonial offer they would make terms with someone else. As a business man he wished to do business with any one who would do him good; and the closer they kept to the business point of view the better it would be. Where would the Colonies find anyone to treat them better than we did? The whole of the Colonies did not contain as large a population as the two counties of Lancashire and Yorkshire. Hon. Members opposite said that we should think of the future. He maintained that we should think of the present at first. Another striking thing was that the Colonies were wedded to their protective system. But how did the tariff system work in the Colonies? He said frankly that Australia was not a progressive country at all, it was non-progressive. Its population was not increasing. Its wealth was not increasing. The one Colony which adopted protection in its most severe form was the one Colony which did not prosper. Hon. Members on the Ministerial side of the House were often charged with not realising the greatness of the Empire. From his point of view, they were proud of the Empire, and he had taught his children to be proud of the Empire, because it had stood as no other country in the world had done for liberty, freedom, and righteousness. He was so proud of the Empire that he trembled lest anything should be done to put it in jeopardy. They were told that a relationship that was not founded on interest was not a solid relationship, and an hon. Gentleman opposite had instanced the case of matrimony. But the matrimony which was founded on money considerations was sure to end in failure, and in an unhappy life. It was the nexus of money that had broken up Empires in the past; and it was money and considerations of tariff which had lost to this country the United States. He remembered when he was young hearing Mr. John Bright speaking in his father's house on this subject and saying— We are trying to build an Empire upon sentiment. I do not know it we shall succeed, but I am certain that on no other basis will we succeed. There never had been an Empire in the whole history of the world which had been so successful as ours in binding together its elements of loyalty and high feeling, and that was because we had never tarnished it with money considerations. We said to the Colonies: "Do as you like in your own interest.'' We treated them as a father treated his children; and one and all came back to us for advice and assistance. But once we began to bargain and haggle the whole thing would break up. In a great question of this kind we had a right to ask what was the true ideal for nations to strive after. The world had been made by the Almighty with great varieties of soil and capacity for production. Was the right ideal that nations should build walls round themselves? No; the right ideal was not that nation should strive against nation, but that all I should participate in the benefits of all; and he hoped that this country would adhere to that ideal.

MR. BONAR LAW (Camberwell, Dulwich)

The hon. Gentleman who has just sat down began his speech by repeating very much the same line of thought which has been used by everyone from those benches. He admitted that our existing means of taxation was not equal to the demand, and he proceeded to say that anything in the nature of this Amendment would make things worse. That is common ground; but my hon. friend is always original, and he did not keep long to the beaten track. He said that protection was built up by self interest, and he summed this up by saying that he, a business man, could not sell to the Colonies because the duties were so high. I would point out that the extent of the protection of any duty does not depend upon the size of the duty, but the extent to which it is protective. I do not know the nature of the hon. Member's business. [HON. MEMBERS: "Muslin."] I put it to him. Does he sell more muslin to the Colonies with the higher duty than to Germany with the lower duty?


To Germany, decidedly.


That does not in the least alter the argument I put before the House—namely, that the extent of the protection does not depend on the amount of the duty. A small percentage of duty in a highly-developed country like Germany is more protective by far than a much higher duty in a country where manufactures are not highly developed as in the Colonies. I was taught at school that America was going some day to adopt free trade, and then look out for us. As the hon. Member said, when that view was expressed more than thirty years ago there was much more chance of its being realised than today, because there was then a political party in the United States which advocated free trade. There is no political party of any size in the United States to-day, however, which recommends the system which prevails in this country. The hon. Gentleman says that Germany has prospered because she has free trade; I do not want protection greater than the free trade which has been so prosperous in Germany. The Chancellor of the Exchequer was wrong in his corrections of my right hon. friend the Leader of the Opposition. For more than a generation after the abolition of our Corn Laws we had an effective entry into the markets of the world, because their manufactures had not grown up. So much was that the case that even so recently as 1879, when Bismarck altered the fiscal system of Germany, he was able to point out to the German people that the system which then prevailed in Germany had the effect of making Germany the dumping ground for England, and that by no other means than protection could they build up industries in Germany. If the right hon. Gentleman imagines, or tries to get other people to imagine, that the problem is the same as that with which Peel had to deal he has not begun to realise the A B C of the fiscal question. I challenge the Chancellor of the Exchequer to give any evidence for his statement that Peel never expected that our adoption of free trade would break down the tariffs of other countries. I say you will not find anywhere in Peel's speeches anything which does not agree with the assertion that is constantly made by Cobden that the effect of our adoption of free trade would be to compel other countries to adopt free trade also. Peel said he was going to fight hostile tariffs by free imports—[MINISTERIAL cheers] —yes, but he meant that he was going to beat them by free imports. These statements of Cobden and the implied acquiescence of Sir Robert Peel are not accidental. They are part of their deliberate philosophy on this subject. Not merely were they free importers, but they were free-traders, which meant free exchange, which meant buying as well as selling, and it was part of their policy that they should have both. That was the prospect they held out to the people of this country. The Chancellor of the Exchequer also reminded my right hon. friend that in the Cobden treaty with France there was nothing contrary to free trade principles. There are few things in a dialectic way which the right hon. Gentleman is not capable of, but I do not think that even he is capable of proving that, and for three good reasons. In the first place, Cobden himself admitted that it was contrary to free trade principles—["No"]—in the second place, Mr. Gladstone, who carried through the treaty, took the same view; and in the third place, Mr. Gladstone himself, in defending the treaty in the House of Commons, defended it on the curious ground that at the cost of a small loss of revenue we had gained a great extension of trade—the very argument used this afternoon by my right hon. friend in recommending preference. The discussion on the Budget is so wide that it is difficult to get out of order and difficult to make a selection. I shall take the line of the speech made by the right hon. Gentleman in introducing the Budget. The Chancellor of the Exchequer in his Budget statement said that he proposed to budget for some years ahead. That was very interesting, and reminded me that Mr. Gladstone once made a similar attempt and failed. When the right hon. Gentleman made the same attempt I listened for the development, but that development never came. There was nothing in his speech to show he is looking ahead except two things which are important. The right hon. Gentleman did make it clear to the House that for two or three years, the life of the present Parliament, we are to have no remission of taxation. The income-tax is to remain at a shilling, and the duties on tea and sugar are to continue for that period. For the present there is to be a burden; the advantage is all in the future. I feel that this is by far the most momentous Budget that has been presented to Parliament in my Parliamentary career. It marks, I believe, the beginning of the end. It is a confession of impotence, an admission that even from the point of view of revenue we have reached the limit, and that our fiscal system is on the verge of bankruptcy. Let me examine that statement in the light of the facts which have been presented to us in connection with this Budget. The right hon. Gentleman looks forward to having a surplus of £2,250,000, which is to be applied, if nothing happens, to old age pensions next year. But that surplus is dependent on many things. It is dependent on no other demands more pressing being made in the meantime on the Chancellor of the Exchequer, and, as was pointed out by my right hon. friend the Leader of the Opposition, if a Bill which is now before the House is carried, a quarter of that surplus will immediately disappear. It depends also on the revenue proving at least as productive in the next year as it has been in this year, and that depends upon our trade on the whole continuing in at least as good a state as it is at present. It is true that the right hon. Gentleman the President of the Board of Education told us yesterday that it was not only going to continue at the present level, but was going to get better, but he proved it in a curious way by pointing out that up to the end of 1905, we were having a bad period of trade. Has the right hon. Gentleman forgotten his election speeches? There is not a gentleman on the Government Benches who did not point out that the boom in trade had completely knocked the bottom out of protection. The yield of revenue is dependent on a better state of trade. That may be realised, but I think it is doubtful. Of this I am sure, that the majority of business men in this country believe that we have now reached the top of the boom. But it depends on more than that. It depends on the expenditure for our defensive forces not exceeding the amount put down in the Estimates. I do not claim to be an Army expert. I am one of the few Members of the House who do not make that claim. But is that likely to be realised? Judging only from the speeches of hon. Gentlemen opposite, I have arrived at the conclusion that the Army scheme of the Secretary for War, if it succeeds at all, is going to cost a great deal more than he estimates. But we have something more to go upon in the fact that only recently the right hon. Gentleman had to divert money that was going to the Sinking Fund, a system of finance so unsound that nearly a dozen of his supporters voted against him. Then as to the Navy, we know now from the First Lord of the Admiralty that it is the intention of the Government to keep the Navy at its present scale of superiority over other nations. That means that the control of our expenditure on the Navy is entirely taken out of our hands, and depends not on this Government, but on what is done by other Governments over which we have no control. In the face of these considerations is it not at least probable that in a short time the right hon. Gentleman may be face to face with these alternatives—either to increase still further the enormous height of the taxation with the existing duties, or to put a tax on something which is not taxed now? It is true, as was pointed out by the hon. Members for North Paddington and Leicester this afternoon, and an hon. Member yesterday, that he might have another alternative, the alternative of making this country a place very undesirable for the rich man to live in, and still more undesirable for him to die in, but the amount of money which could be derived even if he adopts such a course will inevitably be very small. That brings us to the main purpose of the Amendment—the widening of the basis of taxation. My right hon. friend tried to explain what this meant. [Ironical MINISTERIAL Cheers.] I thought he explained it—[MINISTERIAL laughter]—and if he failed—I am not sure whether he failed or whether Members are laughing at their own inability to understand him—if he failed, then I have not much chance of succeeding. I will take the same illustration which he used. Suppose the Chancellor of the Exchequer has to get £10 out of men of a particular class. On the average, he estimates on getting £10 out of income-tax, or £10 from sugar, or £10 from the motor car. In the long run, one man averaging another, the Exchequer will get the same amount of money. But the effect on the individuals in this class will be very different. If the money is raised by one-third on each of these articles, what will happen? A man who has a bad year pays no income-tax, and he does not buy a motorcar; and if it is all raised on sugar, however little or much money he has made in the current year, he will use approximately the same amount of sugar, and he will suffer as he would not have suffered if the burden had remained on the other articles. Hon. Members may agree or disagree with my views, but I hope they understand what those views are. The right hon. Gentleman admitted that he had shut himself off from this wider basis of taxation, but he justified it on grounds which were perfectly satisfactory to him. He justified it by the illustration (and a very good one from his point of view and I believe he must have thought so), that he had only blocked himself off from unsound and marshy ground. Illustrations are not arguments, and nobody knows better than the right hon. Gentleman how easy it is to find them. If his illustration represents the facts he is wise. If it does not represent the facts then he is not wise. I will give him an illustration which I think is much more appropriate. The right hon. Gentleman has waiting for him a dwelling-house. It seems to be desirable, it apparently meets all his requirements, but he will not enter it. Why? Not because its foundation is insecure, but because there is a current report, which he is superstitious enough to believe, that it is haunted. The right hon. Gentleman is not very consistent even himself. If this kind of thing is marshy ground, there are present, as he well knows, in this country industries like that of tobacco manufacturing and the cocoa trade which are resting on this marshy ground. Why does he not remove them? If the duties on those industries are so bad, why does he leave them there to vex the country? He gave an explanation with regard to the cocoa duties which did not seem to me to be quite adequate. He admits that there is severe protection there, but he leaves it alone, the only reason, as I understood, being that Mr. Gladstone was a free trader and did not touch it. I do not think that is quite sufficient. In the first place, the conditions are different now. In Mr. Gladstone's time the principle on which our taxation was based was never challenged. It is challenged now. It is because it is challenged—I know of no other reason; I do not suppose it was vindictiveness—that the Chancellor of the Exchequer last year removed the arrangement with regard to stripped tobacco, which was far less protective, and which was introduced by the ex-Chancellor of the Exchequer. But there is something more to be said. I may be wrong, and I give it to the House for what it is worth. The duty on these commodities remains the same but the protection is probably not the same. The cost of manufacture, if it is like other things, must have been greatly reduced, and, therefore, as the duty on the raw material and the manufactured article is the same, the probability is that the protection on cocoa industries now is at least twice what it was in the time when Mr. Gladstone fixed the duty. I confess that if anyone had moved an Amendment to remove these anomalies, I would hardly have known which way to vote. On the one hand, I believe the arrangement is not a bad one—that the country gains more than it loses by the flourishing of these industries in its midst. But on the other hand, there are other industries which might be benefited in the same way, and from the point of view of having these other industries benefited it is very desirable that all the people, whose interests ought to be the same, should be placed in precisely the same boat, and dealt with from precisely the same point of view. Another consideration is this: I think it very unreasonable and most unfair that the large fortunes which are made in this country out of the protection of these industries should be used as they are to subsidise newspapers and to help to finance Members of Parliament whose influence is used to prevent other people getting precisely the same advantage as they enjoy, and without which advantage there would be none of the money to spend in this way. Now I come to the remarks of the Chancellor of the Exchequer about the tea and sugar duties. What he said about the tea duty is really very amusing to me. Last year the House will remember he took a penny off the tea duty because it was going to benefit the consumer. This year he does not take off a penny because it would not benefit the consumer. When right hon. and hon. Gentlemen quote what they are pleased to call axioms of political economy against us, they speak as if these things were the laws of nature, as inevitable as the law of gravitation; but apparently the right hon. Gentleman is able to suspend the laws of nature. They only apply when they suit him; and they do not apply when they suit us better than they do him. My right hon. friend the ex-Chancellor of the Exchequer said this was an extraordinary explanation. The Chancellor of the Exchequer said in reply, "There is such a demand for tea all over the world that I am informed if you take 1d. off the duty, the consumer would get no benefit." I will put the reverse of that: There is so little demand for tea, and the price is already forced down so low that if you take 1d. off, the middleman will get the benefit of the whole of it. That statement is like the other, and I think it is as good and perhaps a little better than the other, and I would suggest it for the use of the right hon. Gentleman in his next year's Budget. Then the Chancellor of the Exchequer came to the sugar duty, and I noticed that what he said about it was not cheered by hon. Gentlemen behind him. I am not surprised it was not cheered, but I am surprised that the right hon. Gentleman should have used the argument that no benefit would result from taking off half the sugar duty, because the farthing is an unknown coin in retail business. The right hon. Gentleman is an economist, if he will allow me to say so without offence. The right hon. Gentleman confessed a few months ago that he boasted in his salad days that he had not only studied political economy but had actually taught it. Well, that is fatal. When a man has gone through that experience it has only one effect, which is that the knowledge disappears and the prejudices remain and cannot be shaken. I challenge the right hon. Gentleman to produce any economist in the world, of any school, who would make himself responsible for the assertion that the want of a coin has anything to do with the incidence of a tax. When Sir Michael Hicks Beach introduced his duty on corn some of his hon. friends used the same argument. They said it is only a half-farthing on a 4lb. loaf, and will mean nothing to the consumer. Did the right hon. Gentleman accept that argument then? If the argument is inapplicable in the one case it is inapplicable in the other, unless the laws of political economy are to be varied to suit the Liberal Party, and the incidence which affects the cost by way of increase is to have no effect by way of subtraction. The President of the Board of Education said that what we mean by widening the basis of taxation is to transfer the burdens which are now borne by the rich to the backs of the poor; and nothing that he said was more loudly cheered by his supporters. In a speech which otherwise I thought was very able I was surprised that the right hon. Gentleman should make that statement. That is the most absolute claptrap, and the right hon. Gentleman must know it. More than that, it is absolutely untrue, and he ought to know it. Owing to the system on which we levy our indirect taxation, there is no country in the world in which that taxation bears so hardly on the poor as it does in this country. That is inevitable. We put indirect taxation on articles of food and drink, and that means that a man is taxed not in proportion to his ability to pay but according to his capacity to eat and the extent of his thirst. We put taxation only on articles of food and drink, and the result of that system must have the effect that a far larger part of the burden falls on the poorer classes. [Hear, hear.] If the right hon. Gentleman agreed, why did he make that statement?


Because we have other taxes, such as income-tax and death duties, and I understand the broadening of the basis of taxation was proposed in order to reduce the income-tax.


No such statement was ever made, ["Oh."] All any one said on our side of the House was that both the income-tax and the indirect taxation of sugar and tea were too high. Taxation on other things was suggested as a means by which this excessive taxation might be relieved. There is no proposal, as the right hon. Gentleman seemed to imagine, to put on this taxation unless more money is needed. There is nobody who would not propose to relieve indirect taxation to the same extent as direct taxation is relieved.


It was proposed, on the Resolution, to reduce the income-tax to 11d.


I would remind the right hon. Gentleman that it was also proposed to do away with the tea duty and the sugar duty. There is one other matter. The Chancellor of the Exchequer has stated that it is impossible to have any system of preference without the taxation of raw material, because it would be so unfair to the different Colonies as compared with each other. In the first place, let me point out that this proposal for preference came not from my right hon. friend the Member for West Birmingham, but from the Ministers of the different Colonies in the first Conference, and it has been persistently pressed by them ever since. If, therefore, you want to find out what the proposal means, you must go to the authors of the proposal. There is no suggestion that duties should be imposed so as to be equally favourable to all parts of the Empire. All that is asked is that preference should be given on any duties in this country. More than that, if the difficulty exists, it exists in the Colonies between themselves. Yet they are making these, arrangements—I do not say behind our backs, but in our presence—they are making these financial arrangements from which we are excluded. Nobody suggests that the advantage between one Colony and another is exactly equal. Let us for a moment look at this thing upon its merits. The right hon. Gentleman judges the value of preference by our existing trade; but that is begging the whole question. The Colonies desire preference because they believe that it will alter the whole course of trade and make an entirely new arrangement of their business. Take as an illustration the case of Ireland. Hon. Members representing Ireland took a great deal of trouble this year to carry through a Bill to enable them to grow tobacco in Ireland. Upon the right hon. Gentleman's principle what is the value of that? The value is in the future and will not be derived until after the passing of the Bill. The argument has been frequently used that we cannot give Australia a fair preference except on wool, but any Australian statesman would tell you that the wool trade would take care of itself, that they did not want to be a one horse country, and that though their exports of wheat were smaller than their exports of wool, yet a preference on wheat that would stimulate it would be of enormously greater value to them than a preference on wool. The right hon. Gentleman really looks at this question from the wrong point of view, if I may say so, and it is wrong for this reason. He is against preference, he does not believe in it, and, therefore, he hunts for arguments which will make it impossible; but if he could imagine that he was in favour of it in principle, then objections like that which he has stated, and like those used by the Under-Secretary for the Colonies, would disappear. They would not be worthy of consideration assuming that you wanted to carry the thing through. If you make that assumption, look at the position in which the right hon. Gentleman places himself. He represents to the country that he goes to the Colonies with whom there is a proposal to make this arrangement. He is the seller for us, but he acts both as the buyer and seller. He says, "That is what we have got to sell, but I advise you not to accept it, because it is not worth having." That was undoubtedly the position he put himself in the last time he spoke on the subject. But if South Africa came and said, "We are unfairly treated," the same answer was not to be given. The assumption of the right hon. Gentleman is based on the deep-rooted idea that the Government are not only best able to judge what is best for us, but also what is best for the Colonies. It was the feeling that that is the attitude of the Home Government which made Mr. Deakin good-humouredly, but evidently with some feeling, say that hat the Home Government thought Would be done with the representatives of the Colonies was that they should be brought over here occasionally in order that they might be given admonition and advice. Does the Chancellor of the Exchequer say that they needed it?


Not at all. I say they gave us quite as much advice as we gave them.


That is a reasonable arrangement. With an arrangement of that kind no one can find fault. The right hon. Gentleman, in the course of his speech this afternoon, got extremely indignant and very eloquent about what he called the reptile Press, on the fiscal reform side, and the dirty Party capital they try to make out of the Colonial Con- ference. I should be sorry if that has been done. It is not desirable from any point of view that the Colonies should regard one of the Parties in the State as their enemy. But the right hon. Gentleman must feel that in this kind of thing fiscal reformers at their best are only amateurs, that in such a business it is the Liberal Party who are the professionals, as the success of their efforts over Chinese labour proved. But I have a serious charge in this connection to make against the right hon. Gentleman himself. I shall put it very moderately. I felt that the remarks of the right hon. Gentleman, in reference to the offer of preference by Australia were altogether unjustified and that they would have the effect of conveying to the people of this country the idea that the proposals of Australia were entirely different from what the proposals were. The right hon. Gentleman said the Bill of the Prime Minister was all they had to go on. Was an offer a Bill? What Mr. Deakin said on introducing the Bill was that it was a preliminary overture, that it was no more than the first step on the road they desired to travel, and along which they should proceed with the Mother Country in amity together for all time. Was it fair to assume that all the Australians offered was contained in that Bill? Without saying more on the political aspect of the question, there is one aspect of preference the friends of closer union desire to put forward. Is it not the fact that all the Colonial Premiers and all the Colonies consider that the first and only practical step towards closer union is by means of trade relationship? [An HON. MEMBER: "No."] Is that not a reason for thinking long and carefully before turning a deaf ear to the proposals they make? Is it not a reason for giving anything we can give without disadvantage to ourselves? I maintain that the Government could without any disadvantage have given preference upon existing duties, and the Under-Secretary for the Colonies has pointed out that a duty taken off is a benefit to either party. Why has that not been done? The President of the Board of Education gave the reason. He said the Colonies could do it because it did not alter their system, but that we cannot do it without breaking down our fiscal system. That is plausible, but it was not sound. It was a Government of free-traders in 1892–5 who introduced into India a system of revenue duties without corresponding excise, and they did so for the sake of revenue. It was then an object of sufficient importance for them to waive their theoretical objections; but now they do not think the object of sufficient importance to prevent them from sacrificing it on the altar of pedantry. A great deal has been said on the economical side of this question. I would like to point out briefly the advantages of preference. I can only repeat the arguments which I have used before, but I am justified in repeating them for they have never been answered. Even now for our total exports of manufactured goods the best market is to be found in the British Empire, and in the Empire the best market is in the Colonies. ["No."] Gentlemen who deny that should look at the figures; I have done so. Of course, I know we are told that it is illusory to make a distinction between manufactured goods and raw materials. The fiscal system of every country in the world except ours, however, is based on that distinction, and on nothing else; it aims at encouraging the importation of raw material, at discouraging the importation of manufactured goods, at encouraging the export of manufactured goods, and discouraging the export of raw material. Can any one doubt that a distinction which works in every country but our own is a real and vital one? The value of the Colonial trade is not in the present only; it lies in the future. These countries are only just beginning their development. If we choose we may have a share in the enormous trade which they are going to do with some one. Hon. Gentlemen opposite have told us since the beginning of this controversy that goods must be paid for by goods. The Colonies, for generations at least, must be great exporting countries, and they cannot export unless they import. That is a platitude; it is common ground in every school of economics; yet hon. Gentlemen think they have discovered therein an argument for free trade. These countries must be great importing countries, and, however high they may have to erect their tariff walls, if the preference is high enough we are certain of securing that the immense trade will be in our hands.


But for brief interludes a singularly languid interest has been taken in the whole discussion. That is due to the striking fact that after three years campaigning the country and the Members of this House have satisfied themselves on this great question, and now we are able to see the result. The hon. Gentleman who has just sat down is always frankly protectionist. He has indulged in a series of gloomy predictions not only as to the future of the Colonies, but also as to the decline of our own industries. These gloomy predictions are not made for the first time to-night. Three years ago, addressing the House on the subject of the iron trade—about which he is one of the first authorities—the hon. Gentleman stated that before twelve months were past the production of steel in America would be so great that they would overflow their own requirements.


I would like to know when I did say that?


I think the hon. Member will recollect] [OPPOSITION cries of "Quote."] he anticipated that the over-production in the United States would be so great that the United States would be exporting rails to this country at £2 10s. before long.


"Before long" and "twelve months" are very different.


The hon. Gentleman will not expect me to go into the definition of what is "before long." The hon. Member, a prominent protectionist, admits quite fairly that a country cannot export unless it imports. Therefore, he granted at once the first hypothesis upon which free trade is founded. The hon. Member attacked the Budget of this year because he said it was a confession of impotency and had no elasticity about it. He said we had in fact reached the limits of our present fiscal system. The late Chancellor of the Exchequer was responsible for a Budget based on this system in 1905, and he deplored the fact that he was bound by the free-trade pledges of his Government and was not able to add any elasticity to our national finance. I venture to say that the right hon. Gentleman did not realise that our national finance depended on both revenue and expenditure. We have succeeded in making our expenditure elastic, and for the first time for many years there has been a reduction in Army and Navy expenditure without any diminution in the efficiency of either service. Let us take what has been done under this inelastic system. During the last two years we have sanctioned no more expenditure under Military Works and Naval Works Acts. The amount spent under the Naval and Military Works Acts has gone down to no more than £2,500,000, and next year I believe not a single penny will be spent under them, and the capital expenditure will now be borne boldly on the annual Vote. That is one example of the way in which this inelastic system of ours has been expanded. Take the Sinking Fund. In 1905 the Sinking Fund was destroyed. In 1906–7 the Sinking Fund was made effective to the extent of nearly £10,000,000, and in 1907–8 it will be made effective by over £14,000,000. In addition to that, during that period we have succeeded in reducing taxation on tea, coal, and earned incomes. That alone is sufficient proof that the system which the right hon. Gentleman found inelastic has been found by his successors to be the most elastic system in the world. The right hon. Gentleman is an advocate of broadening the basis of taxation. My right hon. friend the President of the Board of Education put his own interpretation on that phrase, and it was the only sensible interpretation, namely, that the basis of taxation was to be found in the taxpayer. What is meant by broadening the basis of taxation is that there should be a greater variety of indirect taxes. I will give the House some idea of the effect of broadening the basis of taxation in the early part of the nineteenth century, when the tariff was formed by William Pitt, Sir Robert Peel, Sir F. Baring, and George Canning, all scientific financiers. The scientific tariff of those days covered a large number of articles. In 1821 no less than 1,709 articles appeared on the tariff. In 1842 the number was 886. In almost every year that followed a large number of articles were taken off the tariff, and the number was reduced to 389 in 1859 and to 112 in 1863. At the present time there are something like ten classes on which customs are levied. During that period the return from indirect taxation has remained at practically the same amount, of about £23,000,000, until during recent years, when it has gone up to £32,000,000; showing that as the variety of the tariff is diminished the productivity of indirect taxation was increased. From the year 1835 to the year 1855, the great period during which we were narrowing the basis of taxation, some nine and one-third millions of duties were taken off. They have been removed and the customs revenue has not varied during the period more than £1,000,000 one way or the other. The experience of the nineteenth century has shown, first, that our tariff should be simple; and, secondly, that by a simple tariff the cost of collection is diminished. The cost of collection in this country, with its higher wages, is less than in any other civilised country in the world. In Germany the total cost amounts to no less than 10 per cent. of the total duties collected. In France it is 7 per cent.; in the United States of America 3.5 per cent.; while in the United Kingdom it is only 2½per cent. The cheapness of the collection is put down to the fact that the bulk of the import duties is collected on a small number of articles. What is put forward as the alternative to our present fiscal system? Four definite proposals have been put forward. Every one of them is said by its supporters to provide, funds not only for a reduction in direct taxation, but sufficient to carry through some of the great social reforms which are now looked for. The first is that there should be a 5 per cent. duty on all imports into this country. Then there is another subject of a kindred nature which also received the blessing of Mr. Deakin at the Colonial Conference, and that is a proposal for a 1 per cent. duty on foreign imports into the Empire for Imperial purposes. In the United Kingdom such a duty would produce £4,500,000 sterling; in Australia it would produce—the inequality is worth noting—£100,000: in New Zealand £20,000; in Canada £400,000. What is the £4,500,000 for the United Kingdom to do in the way of reducing income-tax or providing funds for social reform? If used as Mr. Deakin intends, it will be used for another purpose. If used for a l½d. reduction in the income-tax there will be absolutely nothing for old age pensions. Another proposal is that we should have duties on corn, meat, and other foodstuffs. We have had experience of a duty on corn. It produced £2,500,000 sterling. That would be sufficient to wipe off something less than 1d. of the income-tax, and would provide nothing for social reform. Another proposal is that there should be a duty of 10 per cent. on foreign manufactured goods imported into this country. The total produce of this duty would be something like £13,000,000, if the goods came in. That would be sufficient to provide the poor of this country, over sixty-five years of age, with a pension of 2s. 6d. a week, and nothing would remain for the relief of the income-tax payers. Such proposals as have been put forward in concrete terms by right hon. Gentlemen opposite would not provide for any of the great schemes which under a free trade Budget I believe we shall be able to carry out in the ordinary course, if allowed to carry out our intentions. It has been suggested that we have somehow been responsible for the Colonies bargaining with each other behind our backs. If they are prepared to bargain behind our backs for a reduction of their tariffs I do not see why we need grumble. A great deal of rubbish has been talked about trading with the Colonies. We do not trade with the Colonies, but with merchants who inhabit the Colonies. And let it be remembered that the Australian corn-grower, wool-grower, wine-grower, or manufacturer is no more entitled to consideration from this Government than the poor who inhabit our great towns. The hon. Gentleman embarked on a discussion as to the views of Cobden when he advocated free trade and negotiated the French Treaty. Here are Cobden's own words, as set out in the "Life of Gladstone" by my right hon. friend the Secretary of State for India— I will undertake that there is not a syllable of our treaty that is inconsistent with the soundest, principles of free trade. The Government and its supporters advocate free trade, not because of our adherence to a theory or doctrine, but because of its business advantages. We believe it to be good business for our manufacturers, our carriers, and our consumers. In the long run an import duty tends to delay a fall in the price of the imported commodities, and it also accelerates a rise in the price which the consumer is bound sooner or later to pay. If the consumer does not pay, who pays? Is it the foreigner? ["Yes."] If the foreigner pays 10 per cent. on manufactured goods, why do we not put on 100 per cent. when we are about it? If the foreigner pays the import duties it is clear that the price in this country will not rise, and if the price will not rise it is certain that the Colonists cannot get an effective preference here, and that we must go on with that import duty until the price is affected in order to give an advantage to the Colonies. If the foreigner pays and not the consumer, will the hon. Gentleman kindly tell me why raw material should be excluded, or bacon, or maize? The truth is that hon. Gentlemen opposite are insecure. They have some doubts in their own minds as to some duties which would in some way be paid by the consumer. The real fact with regard to our trading position is that we buy foreign goods because we want them. We rely on foreign countries because they supply what we want. We wish to draw our supplies from the widest possible markets in order that those who devise and conduct "corners" shall find their operations the sooner broken. The Government believe in the broadest possible basis of supply, in the policy of abundance, and not of restriction. It seems strange that after last session and the controversy of the last five or six years it should still be necessary to point out the particular individual position of this Kingdom. But if you look through history you will find that the two great industrial marvels of the world are our cotton and shipping industries. Three thousand miles away from its source of supply you will find the greatest cotton industry ever known; £14,000,000 was invested in new mills in Lancashire last year, I am told. It is increasing by leaps and bounds at a time when America with its natural advantages might be expected to beat us. So far it has done nothing of the kind, but once you jeopardise the cause of free trade you jeopardise the prosperity of the cotton industry. I need scarcely refer to our shipping, but as to that we have succeeded in building up the most wonderful shipping industry ever known. It exceeds the total tonnage of the rest of the world, and it is dependent for the first conditions of success on our free trade policy. So success-

ful have we been in fostering exports and imports that they exceed those of the United States, of Germany, or of France, per head of the population, and are still increasing. Surely, in face of these circumstances, the man who would, lay his hand on this delicate machinery deserves the reprobation and not the approbation of the country. Our present fiscal system is financially sound, and any departure from it will be commercially and socially unprofitable. Those who will suffer most will be not the rich, but the poor, who already have difficulty enough to endure the ordinary stress of life.

Question put.

The House divided:—Ayes, 376; Noes, 108. (Division List No. 167.)

Abraham, William (Cork, N. E.) Bowerman, C. W. Cox, Harold
Acland, Francis Dyke Brace, William Cremer, William Randal
Adkins, W. Ryland D. Bramsdon, T. A. Crombie, John William
Agnew, George William Branch, James Crooks, William
Ainsworth, John Stirling Bright, J. A. Crosfield, A. H.
Alden, Percy Brocklehurst, W. B. Dalmeny, Lord
Allen, A. Acland (Christchurch Brodie, H. C. Dalziel, James Henry
Allen, Charles P. (Stroud) Brooke, Stopford Davies, M. Vaughan-(Cardigan
Armitage, R. Brotherton, Edward Allen Davies, Timothy (Fulham)
Armstrong, W. C. Heaton Brunner, J. F. L. (Lancs., Leigh Dewar, Arthur (Edinburgh, S.)
Asquith, Rt. Hn. Herbert Henry Bryce, J. Annan Dewar, John A. (Inverness-sh.)
Astbury, John Meir Buckmaster, Stanley O. Dickinson, W. H. (St. Pancras, N.
Atherley-Jones, L. Burns, Rt. Hon. John Dickson-Poynder, Sir John P.
Baker, Sir John (Portsmouth) Burnyeat, W. J. D. Dilke,Rt. Hon. Sir Charles
Baker, Joseph A. (Finsbury, E.) Buxton, Rt. Hn. Sydney Chas. Dobson, Thomas W.
Balfour, Robert (Lanark) Cairns, Thomas Duckworth, James
Baring, Godfrey (Isle of Wight Cameron, Robert Duncan, C. (Barrow-in-Furness
Barker, John Campbell-Bannerman, Sir H. Duncan, J. H. (York, Otley)
Barlow, Percy (Bedford Carr-Gomm, H. W. Dunn, A. Edward (Camborne)
Barnard, E. B. Causton, Rt. Hn. Richard Knight Dunne, Major E. Martin (Walsall]
Barnes, G. N. Cawley, Sir Frederick Edwards, Clement (Denbigh)
Barran, Rowland Hirst Channing, Sir Francis Allston Edwards, Enoch (Hanley)
Barry, Redmond J. (Tyrone, N. Cheetham, John Frederick Edwards, Frank (Radnor)
Beauchamp, E. Cherry, Rt.Hon. R. R. Elibank, Master of
Beck, A. Cecil Churchill, Rt. Hon. Winston S. Erskine, David C.
Bell, Richard Clarke, C. Goddard (Peckham) Essex, R. W.
Bellairs, Carlyon Cleland, J. W. Esslemont, George Birnie
Benn, Sir J. Williams (Devonp't Clough, William Evans, Samuel T.
Benn, W. (T'w1r Hamlets, S. Geo. Clynes, J. R. Eve, Harry Trelawney
Bennett, E. N. Coats, Sir T. Glen (Renfrew, W.) Everett, R. Lacey
Berridge, T. H. D. Cobbold, Felix Thornley Fenwick, Charles
Bertram,; Julius Collins, Stephen (Lambeth Ferens, T. R.
Bethell, Sir J. H. (Essex, Romf'rd Collins, Sir Wm. J. (S. Pancras, W. Ferguson, R. C. Munro
Bethell, T. R. (Essex, Maldon Cooper, G. J. Findlay, Alexander
Billson, Alfred Corbett, A. Cameron (Glasgow) Fowler, Rt. Hon. Sir Henry
Birrell, Rt. Hon. Augustine Corbett,C.H.(Sussex, EGrinst'd Freeman-Thomas, Freeman
Black, Arthur W. Cornwall, Sir Edwin A. Fuller, John Michael F.
Boland, John Cory, Clifford John Fullerton, Hugh
Bottomley, Horatio Cotton, Sir H. J. S. Gibb, James (Harrom)
Boulton, A. C. F. Cowan, W. H. Gill, A. H.
Gladstone, Rt Hn. Herbert John Lloyd-George, Rt. Hon. David Radford, G. H.
Glendinning, R. G. Lough, Thomas Rainy, A. Rolland
Glover, Thomas Lupton, Arnold Raphael, Herbert H.
Goddard, Daniel Ford Lyell, Charles Henry Rea, Russell (Gloucester)
Gooch, George. Peabody Lynch, H. B. Rea, Walter Russell (Scarboro'
Grant, Corrie Macdonald, J. R. (Leicester Rees, J. D.
Greenwood,G.(Peterborough Macdonald, J M (Falkirk B'ghs Rendall, Athelstan
Greenwood, Hamar (York) Mackarness, Frederic C. Renton, Major Leslie
Grey, Rt. Hon. Sir Edward Maclean, Donald Richards, Thomas (W. Monm'th
Griffith, Ellis J. Macnamara, Dr. Thomas J. Richards,T.F.(Wolverh'mpt'n
Gurdon, Sir W. Brampton Macpherson, J. T. Richardson, A.
Haldane, Rt. Hon. Richard, B. M'Callum, John M. Rickett, J. Compton
Hall, Frederick M'Crae, George Ridsdale, E. A.
Harcourt, Rt. Hon. Lewis M'Kenna, Rt. Hon. Reginald Roberts, Charles H. (Lincoln
Harmsworth, Cecil B. (Worc'r.) M'Laren, Sir C. B. (Leicester) Roberts, G. H. (Norwich)
Harmsworth, R L (Caithn'ss-sh.) M'Laren, H. D. (Stafford, W. Roberts, John H. (Denbighs.)
Hart-Davies, T. M'Micking, Major G. Robertson, Rt. Hn. E. (Dundee
Harvey, A. G. C. (Rochdale) Maddison, Frederick Robertson, Sir G. Scott (Bradf'rd
Harwood, George Mallet, Charles E. Robertson, J. M. (Tyneside)
Haworth, Arthur A. Manfield, Harry (Northants Robinson, S.
Hazel, Dr. A. E. Mansfield, H. Rendall (Lincoln Robson, Sir William Snowdon
Hedges, A. Paget Markham, Arthur Basil Roe, Sir Thomas
Hemmerde, Edward George Marks,G. Croydon (Launceston Rogers, F. E. Newman
Henderson, Arthur (Durham) Marnham, F. J. Rose, Charles Day
Henderson, J. M. (Aberdeen, W.) Massie, J. Rowlands, J.
Henry, Charles S. Masterman, C. F. G. Runciman, Walter
Herbert, Colonel Ivor (Mon., S.) Micklem, Nathaniel Russell, T. W.
Herbert, T. Arnold (Wycombe) Molteno, Percy Alport Rutherford, V. H. (Brentford)
Higham, John Sharp Mond, A. Samuel,Herbert L.(Cleveland)
Hobart, Sir; Robert Money, L. G. Chiozza Samuel, S. M. (Whitechapel)
Hobhouse, Charles E. H. Montgomery, H. G. Scarisbrick, T. T. L.
Hodge, John Morgan, G. Hay (Cornwall) Schwann, C. Duncan (Hyde)
Hogan, Michael Morgan, J. Lloyd (Carmarthen) Schwann, Sir C. E. (Manchester)
Holden, E. Hopkinson Morley, Rt. Hon. John Scott, A. H. (Ashton- under- Lyne
Holland, Sir William Henry Morrell, Philip Sears, J. E.
Holt, Richard Durning Morse, L. L. Seaverns, J. H.
Hooper, A. G. Morton, Alpheus Cleophas Seddon, J.
Horniman, Emslie John Murnaghan, George Shackleton, David James
Howard, Hon. Geoffrey Murphy, John Shaw, Charles Edw.(Stafford)
Hudson, Walter Murray, James Shaw, Rt. Hon. T. (Hawick B.)
Hutton, Alfred Eddison Myer, Horatio Sherwell, Arthur James
Hyde, Clarendon Napier, T. B. Shipman, Dr. John G.
Idris, T. H. W. Newnes, F. (Notts, Bassetlaw) Silcock, Thomas Ball
Illingworth, Percy H. Newnes, Sir George (Swansea) Simon, John Allsebrook
Isaacs, Rufus Daniel Nicholls, George Sinclair, Rt. Hon. John
Jackson, R. S. Nicholson, Charles N.(Doncast'r Smeaton, Donald Mackenzie
Jacoby, Sir James Alfred Nolan, Joseph Soames, Arthur Wellesley
Jardine, Sir J. Norton, Capt. Cecil William Spicer, Sir Albert
Jenkins, J. Nussey, Thomas Willans Stanger, H. Y.
Johnson, John (Gateshead) Nuttall, Harry Stanley, Hn. A. Lyulph (Chesh.)
Johnson, W. (Nuneaton) O'Brien, Kendal (Tipp'r'ryMid Steadman, W. C.
Jones, Sir D. Brynmor (Swansea O'Connor. John (Kildare, N. Stewart, Halley (Greenock)
Jones, Leif (Appleby) O'Donnell, C. J. (Walworth) Stewart-Smith, D. (Kendal)
Jones, William (Carnarvonshire O'Grady, J. Strachey, Sir Edward
Kearley, Hudson B. O'Kelly, James (Roscommon, N. Straus, B. S. (Mile End)
Kekewich, Sir George O'Malley, William Strauss, E. A. (Abingdon)
Kincaid-Smith, Captain Parker, James (Halifax) Stuart, James (Sunderland)
King, Alfred John (Knutsford) Partington, Oswald Summerbell, T.
Kitson, Rt. Hon. Sir James Paulton, James Mellor Taylor, Austin (East Toxteth)
Laidlaw, Robert Pearce, Robert (Staffs. Leek) Taylor, John W. (Durham)
Lamb, Edmund G. (Leominster Pearce, William (Limehouse Taylor, Theodore C. (Radcliffe)
Lamb, Ernest H. (Rochester Pearson, Sir W. D. (Colchester Tennant, Sir Edward (Salisbury)
Lambert, George Pearson, W. H. M. (Suffolk, Eye Thomas, Abel (Carmarthen, E.)
Lambton, Hon. Frederick Wm. Philipps, Col. Ivor (S'thampton Thomas, Sir A. (Glamorgan, E.)
Lamont, Norman Philipps, J Wynford (Pembroke Thomas, David Alfred (Merthyr
Layland-Barratt, Francis Philipps, Owen C. (Pembroke Thomasson, Franklin
Lea, Hugh Cecil (St. Pancras, E. Pickersgill, Edward Hare Thompson, J. W. H (Somerset, E.
Leese,Sir Joseph F. (Accrington Pirie, Duncan V. Thorne, William
Lehmann, R. C. Pollard, Dr. Tomkinson, James
Lever, A. Levy (Essex, Harwich Price, C. K (Edinb'gh, Central Torrance, Sir A. M.
Lever, W. H. (Cheshire, Wirral Price, Robert John (Norfolk, E. Toulmin, George
Levy, Maurice Priestley, Arthur (Grantham) Trevelyan, Charles Philips
Lewis, John Herbert Priestley, W. E. B. (Bradford, E. Ure, Alexander
Verney, F. W. Wedgwood, Josiah C. Wilson, John (Durham, Mid)
Walker, H. De R. (Leicester) Whitbread, Howard Wilson, J. W. (Worcestersh. N.)
Walsh, Stephen White, George (Norfolk) Wilson, P. W. (St. Pancras, S.)
Walters, John Tudor White, J. D. (Dumbartonshire) Wilson, W. T. (Westhoughton
Walton, Sir John L. (Leeds, S.) White, Luke (York, E. R.) Winfrey, R.
Walton, Joseph (Barnsley) White, Patrick (Meath, North) Wodehouse, Lord
Ward, John (Stoke upon Trent Whitehead, Rowland Wood, T. M'Kinnon
Ward, W. Dudley (Southampt'n Whitley, John Henry (Halifax) Yoxall, James Henry
Wardle, George J. Whittaker, Sir Thomas Palmer
Waring, Walter Williams, Llewelyn (Carmarth'n TELLERS FOR THE AYES—Mr.
Wason, Eugene (Clackmannan) Williams, Osmond (Merioneth) Whiteley and Mr. J. A.
Wason, John Cathcart (Orkney) Wills, Arthur Walters Pease.
Waterlow, D. S. Wilson, Hon. C. H. W. (Hull, W.)
Watt, Henry A. Wilson, Henry J. (York. W. R.)
Anson, Sir William Reynell Faber, Capt. W. V. (Hants, W.) Morpeth, Viscount
Arkwright, John Stanhope Fardell, Sir T. George Muntz, Sir Philip A.
Ashley, W. W. Fell, Arthur Nicholson, Wm. G. (Petersfield)
Aubrey-Fletcher, Rt. Hon. Sir H. Finch, Rt. Hon. George H. Nield, Herbert
Balcarres, Lord Fletcher, J. S. O'Neill, Hon. Robert Torrens
Balfour, Rt Hn. A. J (City Lond.) Forster, Henry William Parker, Sir Gilbert (Gravesend)
Banbury, Sir Frederick George Gardner, Ernest (Berks, East) Parkes, Ebenezer
Banner, John S. Harmood- Gibbs, G. A. (Bristol, West) Pease, Herbert Pike (Darlington
Baring,Capt.Hn.G(Winchester Haddock, George R. Percy, Earl
Barrie, H. T. (Londonderry, N.) Hardy, Laurence (Kent, Ashfo'd Randles, Sir John Scurrah
Beach, Hn. Michael Hugh Hicks Harris, Frederick Leverton Ratcliff, Major R, F.
Bignold, Sir Arthur Harrison-Broadley, H. B. Rawlinson, John Frederick Peel
Boyle, Sir Edward Hay, Hon. Claude George Remnant, James Farquharson
Bridgeman, W. Clive Heaton, John Henniker Roberts, S. (Sheffield, Ecclesall)
Bull,Sir William James Helmsley, Viscount Rutherford, W. W. (Liverpool
Burdett-Coutts, W. Hervey, F. W. F. (Bury S. Edmd's Salter, Arthur Clavell
Butcher, Samuel Henry Hill, Sir Clement (Shrewsbury) Sassoon, Sir Edward Albert
Carlile, E. Hildred Hills, J W. Scott, Sir S. (Marylebone, W.)
Carson, Rt. Hon. Sir Edw. H. Houston, Robert Paterson Sheffield, Sir Berkeley George D.
Cave, George Hunt, Rowland Smith, F. E. (Liverpool, Walton)
Cavendish, Rt. Hon. Victor C. W. Kennaway, Rt. Hon. Sir John H. Stanley, Hon. Arthur (Ormskirk
Cecil, Evelyn (Aston Manor) Kenyon-Slaney, Rt. Hon. Col. W. Starkey, John R.
Cecil, Lord John P. Joicey- Keswick, William Staveley-Hill, Henry(Staff'sh.
Chamberlain, Rt Hn. J. A (Worc. Kimber, Sir Henry Talbot, Lord E. (Chichester)
Coates, E. Feetham (Lewisham) Lane-Fox, G. R. Thomson, W. Mitchell-(Lanark)
Cochrane, Hon. Thos H. A. E. Law, Andrew Bonar (Dulwich) Turnour, Viscount
Collings, Rt. Hn. J. (Birmingh'm Lee, Arthur H. (Hants, Fareh'm Vincent, Col. Sir C. E. Howard
Corbett, T. L. (Down, North) Liddell, Henry Walker, Co1. W. H (Lancashire)
Courthope, G. Loyd Lockwood, Rt. Hn. Lt.-Col. A. R. Walrond, Hon. Lionel
Craig, Captain James (Down, E.) Long, Rt. Hn. Walter (Dublin, S. Warde, Col. C. E. (Kent, Mid)
Craik, Sir Henry Lonsdale, John Brownlee Willoughby de Eresby, Lord
Dalrymple, Viscount Lowe, Sir Francis William Wortley, Rt. Hon. C. B. Stuart-
Dixon-Hartland, Sir Fred Dixon Lyttelton, Rt. Hon. Alfred
Doughty, Sir George M'Iver, Sir Lewis (Edinburgh W. TELLERS FOE THE NOES—Sir
Douglas, Rt. Hon. A. Akers- Magnus, Sir Philip Alexander Acland-Hood and
Du Cros, Harvey Marks, H. H. (Kent) Viscount Valentia.
Duncan, Robert (Lanark, Gov'n Mason, James F. (Windsor)
Faber, George Denison (York) Moore, William

Main Question put.

The House divided:—Ayes. 304; Noes, 54. (Division List No. 168.)

Abraham, William (Cork, N. E.) Asquith, Rt. Hn. Herbert Henry Barnard, E. B.
Acland, Francis Dyke Astbury, John Meir Barran, Rowland Hirst
Adkins, W. Ryland D. Atherley-Jones, L. Barry, Redmond J. (Tyrone, N.)
Agnew, George William Baker, Sir John (Portsmouth) Beauchamp, E.
Ainsworth, John Stirling Baker, Joseph A. (Finsbury, E.) Beck, A. Cecil
Allen, A. Acland (Christchurch) Balfour, Robert (Lanark) Bell, Richard
Allen, Charles P. (Stroud) Baring, Godfrey (Isle of Wight) Benn, Sir J. William (Devonport
Armitage, R. Barker, John Benn, W. (T'w'r Hamlets, S. Geo.
Armstrong, W. C. Heaton Barlow, Percy (Bedford) Bennett E. N.
Berridge, T. H. D. Gibb, James (Harrow) Maddison, Frederick
Bertram, Julius Gladstone, Rt. Hn. Herbert John Mallet, Charles E.
Billson, Alfred Glendinning, R. G. Manfield, Harry (Northants)
Birrell, Rt. Hon. Augustine Goddard, Daniel Ford Mansfield, H. Rendall (Lincoln)
Black, Arthur W. Gooch, George Peabody Marks, G. Croydon (Launceston)
Boland, John Grant, Corrie Marnham, F. J.
Bottomley, Horatio Greenwood, G. (Peterborough) Massie, J.
Boulton, A. C. F. Greenwood, Hamar (York) Masterman, C. F. G.
Bramsdon, T. A. Grey, Rt. Hon. Sir Edward Micklem, Nathaniel
Branch, James Griffith, Ellis J. Molteno, Percy Alport
Bright, J. A. Gurdon, Sir W. Brampton Mond, A.
Brocklehurst, W. B. Haldane, Rt. Hon. Richard B. Montgomery, H. G.
Brodie, H. C. Harcourt, Rt. Hon. Lewis Morgan, G. Hay (Cornwall)
Brooke, Stopford Harmsworth, Cecil B. (Worc'r) Morgan, J. Lloyd (Carmarthen)
Brunner, J. F. L. (Lanes, Leigh) Harmsworth, R. L (Caithn'ss-sh) Morrell, Philip
Bryce, J. Annan Hart-Davies, T. Morse, L. L.
Buckmaster, Stanley O. Harvey, A. G. C. (Rochdale) Morton, Alpheus Cleophas
Burns, Rt. Hon. John Harwood, George Murnaghan, George
Burnyeat, W. J. D. Haworth, Arthur A. Murray, James
Buxton, Rt. Hn. Sydney Charles Hazel, Dr. A. E. Napier, T. B.
Cairns, Thomas Hemmerde, Edward George Newnes, F. (Notts, Bassetlaw)
Cameron, Robert Henry, Charles S. Newnes, Sir George (Swansea)
Carr-Gomm, H. W. Herbert, Colonel Ivor (Mon., S.) Nicholls, George
Causton, Rt. Hn. Richard Knight Herbert, T. Arnold (Wycombe) Nicholson, Charles N. (Doncast 'r
Cawley, Sir Frederick Higham, John Sharp Nolan, Joseph
Channing, Sir Francis Allston Hobart, Sir Robert Norton, Capt. Cecil William
Cheetham, John Frederick Hohouse, Charles E. H. Nussey, Thomas Willans
Cherry, Rt. Hon. R. R. Hogan, Michael Nuttall, Harry
Churchill, Rt. Hn. Winston S. Holden, E. Hopkinson O'Brien, Kendal (Tipperary Mid
Clarke, C. Goddard (Peckham) Holland, Sir William Henry O'Kelly, James (Roscommon, N.
Cleland, J. W. Holt, Richard Durning Partington, Oswald
Clough, William Hooper, A. G. Paulton, James Mellor
Coats, Sir T. Glen (Renfrew, W.) Horniman, Emslie John Pearce, Robert (Staffs. Leek)
Cobbold, Felix Thornley Hutton, Alfred Eddison Pearson, Sir W. D. (Colchester)
Collins, Stephen (Lambeth) Hyde, Clarendon Pearson, W. H. M. (Suffolk, Eye)
Collins, Sir Win. J. (S. Pancras, W. Illingworth, Percy H. Philipps, Col. Ivor (S'thampton)
Cooper, G. J. Isaacs, Rufus Daniel Philipps, J. Wynford (Pemb'oke
Corbett, C. H (Sussex, E. Grinst'd Jackson, R. S. Philipps, Owen C. (Pembroke)
Cornwall, Sir Edwin A. Jacoby, Sir James Alfred Pickersgill, Edward Hare
Cory, Clifford John Jardine, Sir J. Pirie, Duncan V.
Cotton, Sir H. J.S. Johnson, W. (Nuneaton) Pollard, Dr.
Cowan, W. H. Jones, Sir D. Brynmor (Swansea) Price, C. E. (Edinb'gh, Central)
Cox, Harold Jones, Leif (Appleby) Price, Robert John (Norfolk, E.
Cremer, William Randal Jones, William (Carnarvonshire Priestley, Arthur (Grantham)
Crombie, John William Kearley, Hudson E. Priestley, W. E. B. (Bradford, E.)
Crosfield, A. H. Kekewich, Sir George Radford, G. H.
Crossley, William J. Kincaid-Smith, Captain Raphael, Herbert H.
Dalmeny, Lord King, Alfred John (Knutsford) Rea, Russell (Gloucester)
Dalziel, James Henry Kitson, Rt. Hon. Sir James Rea, Walter Russell (Scarboro'
Davies, Timothy (Fulham) Laidlaw, Robert Rees, J. D.
Dewar, Arthur (Edinburgh, S.) Lambert, George Rendall, Athelstan
Dewar, John A. (Inverness-sh.) Lamont, Norman Richardson, A.
Dickinson, W. H. (St. Pancras, N. Layland-Barratt, Francis Rickett, J. Compton
Dobson, Thomas W. Lea, Hugh Cecil (St. Pancras, E. Ridsdale, E. A.
Duckworth, James Leese, Sir Joseph F.(Accrington) Roberts, Charles H. (Lincoln)
Duncan, J. H. (York, Otley) Lehmann, R. C. Roberts, John H. (Denbighs.)
Dunn, A. Edward (Camborne) Lever, A. Levy (Essex, Harwich Robertson, Rt. Hn. E. (Dundee)
Dunne, Major E. Martin (Walsall Levy, Maurice Robertson, Sir G. Scott (Bradf'd
Edwards, Clement (Denbigh) Lewis, John Herbert Robertson, J. M. (Tyneside)
Edwards, Enoch (Hanley) Lough, Thomas Robinson, S.
Edwards, Frank (Radnor) Lupton, Arnold Robson, Sir William Snowdon
Elibank, Master of Lyell, Charles Henry Roe, Sir Thomas
Essex, R. W. Lynch, H. B. Rogers, F. E. Newman
Esslemont, George Birnie Macdonald, J. M. (FalkirkB'ghs) Rose, Charles Day
Evans, Samuel T. Mackarness, Frederic C. Rowlands, J.
Everett, R. Lacey Maclean, Donald Runciman, Walter
Fenwick, Charles Macnamara, Dr. Thomas J. Russell, T. W.
Ferens, T. R. M'Callum, John M. Rutherford, V. H. (Brentford)
Ferguson, R, C. Munro M'Crae, George Samuel, Herbert L. (Cleveland)
Findlay, Alexander M'Kenna, Rt. Hon. Reginald Samuel, S. M. (Whitechapel)
Freeman-Thomas, Freeman M'Laren, Sir C. B. (Leicester) Scarisbrick, T. T. L.
Fuller, John Michael F. M'Laren, H. D. (Stafford, W.) Schwann, C. Duncan (Hyde)
Fullerton, Hugh M'Micking, Major G. Schwann, Sir C. E.(Manchester)
Scott, A. H. (Ashton under Lyne Tennant, Sir Edward (Salisbury White, J. D. (Dumbartonshire
Sears, J. E. Thomas, Abel (Carmarthen, E.) White, Luke (York, E. R.)
Seaverns, J. H. Thomas, Sir A. (Glamorgan, E.) White, Patrick (Meath, North)
Shaw, Charles Edw. (Stafford) Thomas, David Alfred (Merthyr Whitehead, Rowland
Shaw, Rt. Hon. T. (Hawick B.) Thompson, J. W. H. (Somerset, E Whitley, John Henry (Halifax)
Sherwell, Arthur James Tomkinson, James Whittaker, Sir Thomas Palmer
Shipman, Dr. John G. Torrance, Sir A. M. Williams, Llewelyn (Carmarth'n
Silcock, Thomas Ball Toulmin, George Williams, Osmond (Merioneth)
Simon, John Allsebrook Ure, Alexander Wills, Arthur Walters
Sinclair, Rt. Hon. John Verney, F. W. Wilson, Hon. C. H. W. (Hull, W.)
Smeaton, Donald Mackenzie Walker, H. De R. (Leicester) Wilson, Henry J. (York, W. R.)
Stanger, H. Y. Walters, John Tudor Wilson, John (Durham, Mid.)
Stanley, Hn. A. Lyulph (Chesh.) Walton, Sir John L. (Leeds, S.) Wilson, J. W. (Worcestersh. N.)
Steadman, W. C. Walton, Joseph (Barnsley) Wilson, P. W. (St. Pancras, S.)
Stewart-Smith, D. (Kendal) Ward, John (Stoke upon Trent) Winfrey, R.
Strachey, Sir Edward Waring, Walter Wood, T. M'Kinnon
Straus, B. S. (Mile End) Wason, Eugene (Clackmannan) Yoxall, James Henry
Strauss, E. A. (Abingdon) Wason, John Cathcart (Orkney)
Stuart, James (Sunderland) Waterlow, D. S. TELLERS FOR THE AYES—Mr.
Taylor, Austin (East Toxteth) Whitbread, Howard Whiteley and Mr. J. A.
Taylor, Theodore C. (Radcliffe) White, George (Norfolk) Pease.
Abraham, William (Rhondda) Hall, Frederick Richards, T. F. (Wolverh'mpt'n
Banbury, Sir Frederick George Hay, Hon. Claude George Rutherford, W. W. (Liverpool)
Barnes, G. N. Hodge, John Seddon, J.
Barrie, H. T. (Londonderry, N.) Hudson, Walter Shackleton, David James
Bignold, Sir Arthur Jenkins, J. Sheffield, Sir Berkeley George D.
Bowerman, C. W. Johnson, John (Gateshead) Smith, F. E. (Liverpool, Walton)
Boyle, Sir Edward Macdonald, J. R. (Leicester) Summerbell, T.
Brace, William Macpherson, J. T. Taylor, John W. (Durham)
Bridgeman, W. Clive Markham, Arthur Basil Thorne, William
Cave, George Marks, H. H. (Kent) Turnour, Viscount
Clynes, J. R. Murphy, John Walsh, Stephen
Corbett, A. Cameron (Glasgow) O'Connor, John (Kildare, N.) Wardle, George J.
Corbett, T. L. (Down, North) O'Donnell, C. J. (Walworth) Watt, Henry A.
Crooks, William O'Grady, J. Wilson, W. T. (Westhoughton)
Dalrymple, Viscount O'Malley, William
Du Cros, Harvey Parker, James (Halifax) TELLERS FOR THE NOES—Mr.
Duncan, C. (Barrow-in-Furness Ratcliff, Major R. F. Arthur Henderson and Mr.
Duncan, Robert (Lanark, Govan Rawlinson, John Frederick Peel George Roberts.
Gill, A. H. Remnant, James Farquharson
Glover, Thomas Richards, Thomas (W. Monm'th

Bill read a second time, and committed to a Committee of the Whole House for To-morrow.