§ I come next to compare the capital liabilities, not in regard to dead-weight Debt alone, but as regards the aggregate capital liabilities of the nation. Here again I start reminding the Committee of the date I have already mentioned. On 31st March, 1889, our total capital liabilities amounted to £697,600,000; in 1903 the amount was £798,300,000; in 1906 it was £789,000,000; and for 1909 it is estimated at £748,000,000. In other words, applying the same analysis as before, in the years between 1903 and 1906 the gross liabilities of the nation were reduced by £9,300,000, or at the rate of £3,100,000 a year, and in the second three years the reduction, in round 457 figures, was £41,000,000, or at the rate of £13,700,000 a year. Finally, there is the item, a very important item, of the interest on the dead-weight Debt. When we came into office, in my first financial statement the total interest charged on the National Debt on 31st March, 1906, was £18,812,000, and on 31st March, 1909, at the expiration of three years, it will be £17,585,000. In other words, there is a saving, a permanent saving, in the interest to be annually provided for the National Debt of very nearly £1,250,000.
§ Now let me summarise this statement. In three years to 31st March, 1909, we shall have paid off nearly £47,000,000 of National Debt; we shall in three years have reduced, we estimate, the aggregate capital liabilities of the nation by £41,000,000, and we shall have effected a saving in interest annually of nearly £1,250,000. We shall have brought back the capital of the National or deadweight Debt, notwithstanding the South African War and other sources of liabilities which have since arisen, to the same figure as that at which it stood at the corresponding date of 1889. Now all this has been done out of the taxation of the country. And, when people talk about the demands of democracy, I may be allowed to say that there is not a more creditable chapter in the annals of democratic finance than that which records the fact that during three years, with a passionate desire for diminution of expenditure and for the mitigation of burdens on the people and on industry, they should have acquiesced in the appropriation of this enormous sum of between £13,000,000 and £15,000,000 a year out of taxation to redeem the principal of our National Debt. I do not know that there is anything like it or approaching it in the history of national finance. For seventy years between 1835 and 1905 there were only two occasions, and these widely apart, on which the reduction of the principal of the National Debt amounted to more than half as much as the figures I have mentioned. In 1853–4, Mr. Gladstone being then Chancellor of the Exchequer, the principal was reduced by about £10,000,000, and in 1865–1866 by over £9,000,000, but the occasions were 458 separated by twelve years interval. Now when our attention is directed to the advantages other countries are supposed to enjoy—I do not wish to go into controversial matters—when it is represented that they have a better fiscal system than our own, and when we find they are obliged to borrow year by year, and even decade by decade to make both ends meet—I say nothing as to the rate at which they have to raise their money—I think it is rather a source of satisfactory reflection when we find we have been able to make this reduction in our National Debt. I state these facts, not as affording an opportunity for self-glorification, but to draw a solid lesson from them, a lesson that will bear very much on the finance of future Chancellors of the Exchequer. I have pointed out that we shall have brought back by 31st March next the aggregate of our National or dead-weight Debt to the same figure as that at which it stood in 1889. What was the provision then made for reduction of the burden of debt? Mr. Goschen was then Chancellor of the Exchequer, a most cautious and conservative financier, who set very great store upon reduction of the permanent burden on the nation. In that year the total sum applicable to Sinking Fund purposes was £5,100,000. This year, 1908–9, with practically the same capital debt, we are applying a a fixed debt charge of £28,000,000, in cluding a Sinking Fund of £9,785,000, with the addition of the Old Sinking Fund of over £4,000,000 from the realised surplus of last year. Mr. Goschen reduced the permanent annual charge from £26,000,000 to £25,000,000. I do not hesitate to say, I am entitled to say—after the efforts it has been my duty and my pleasure to make in this matter—that the time has come, in the various interests we have to safeguard and promote, and in connection with finance and the reductions we shall have made in March next, to justify a review of the situation. I do not think—though, of course, the Chancellor of the Exchequer will exercise his unfettered judgment in making future proposals—I do not think that if I were in his position I should be justified in asking the taxpayers of the country to continue to pay £14,000,000 or £15,000,000 a year for further reductions of Debt. I think the efforts we 459 have made, unprecedented in their character, will justify a review of the situation and the setting free of some substantial part of the revenue which in the last three years we have applied to that purpose.