FINANCE BILL. (Hansard, 18 July 1912)

HC Deb 18 July 1912 vol 41 cc540-651 540

§ Order read for resuming adjourned Debate on Question [15th July], "That the Bill be now read a second time."

§ Question again proposed. Debate resumed.

§ Mr. LLOYD GEORGE
I was led to understand by formal announcement made by the right hon. Gentleman the Member for East Worcester (Mr. Austen Chamberlain) that opportunity was to be taken of the Second Reading of the Finance Bill this year to arraign the general finances of the Government, and especially the finances of the Act of 1909–10, and as the Unionist Press have been full of very dire forebodings as to the results of that finance I expected to see the Opposition Benches crowded with Members seething with indignation and anxiety to indict the Government. I do not see any indication of that fear and anger at the finance of the Government which I am told was generally prevalent in financial circles, and which would find a voice on the floor of the House of Commons. There is another general observation I should like to make. Although the right hon. Gentleman the Member for East Worcestershire specifically asked that the Debate should be extended to two days because of the desire to challenge and review the effect of the Act of 1909, neither from him nor from any of those who preceded him in the Debate did I hear any criticism of the fiscal results of that Act. That is more notable because, in my public statement this year, I undertook a review of the fiscal results of the Act of 1909, and although we have had three Debates since, more or less formal, we have had no criticism directed against the view which I then submitted for the consideration of this House. The right hon. Gentleman preferred to confine his criticism to the supposed effects of Government finance upon gilt-edged securities. He delivered what I regarded as a very able and very interesting speech—one of the ablest financial speeches that I have had the privilege of listening to in this House, and I have heard many—and I propose during the time I shall occupy to confine myself to a consideration of the points which he submitted to the House, leaving other criticisms of the Government's proposals to my right hon. and learned Friend the Attorney-General, who will take part in the Debate later. The right hon. Gentleman the Member for East Worcestershire 558 rather confirmed the impression which his supporters outside endeavoured to create, that the finance of the Government is a good deal—I think he said has been mainly—responsible for the depression of gilt-edged securities. The right hon. Gentleman was fairer than my other critics in one respect, for he admitted that there were other contributory causes. Most of the other criticisms suppressed that fact, and one might imagine that the whole of the depreciation was entirely due to the finance of the Government. I do not admit that any part of that depreciation is due to that fact, and I propose to examine the question of depreciation of the gilt-edged market in its relation to the finance of the Government.
The right hon. Gentleman laid down one proposition which I think is a very important one. I do not complain of it at all, on the contrary, it is part of my case. He said once a decline begins it is difficult to stop. Anyone who has had experience of stocks knows that perfectly well. If any stocks become discredited owing to heavy losses incurred by its holders, it is very difficult to restore it in the market. That is a proposition which I hold in common with the right hon. Gentleman. I also tack it on to a very important admission made by the hon. Baronet the Member for the City of London (Sir F. Banbury) who knows this subject well. He stated that in his judgment the change began in the year 1903. I think it began a good deal earlier than that, but at any rate the hon. Baronet admitted the change in gilt-edged securities began three years before the present Government ever came into power. He might instruct some of his more rabid political supporters in the City upon that subject, and he might at the same time teach them some of the rudiments of good manners. It began before 1903, and I think the hon. Baronet will admit that. A good deal has been said about the Birkbeck Bank, and it is just as good an illustration as any other. I do not think it is at all an unfair illustration of what has taken place in the market during the last ten years. I read to the House some months ago a signed statement which the chief accountant of the bank—I think he is also the liquidator—made to the Official Receiver with regard to the causes of the failure of the Birkbeck Bank. This is what he said:— The great fall in the investments of the bank took place at the time of the Boer War. At the time of the Boer War the reserve was more than ample to cover every scrap of depreciation. In 1900 the making of 559 Colonial Securities Trustee Investments was also the cause of a large depreciation. To these two factors I put down the greater part of our depreciation. That is the explanation given by the official liquidator of the cause of the failure of the Birkbeck Bank.

§ Sir F. BANBURY
He is the accountant.

§ Mr. LLOYD GEORGE
I thought he was afterwards made the liquidator, but, if the hon. Baronet says not, I am not in a position to controvert that statement. I think, however, he is still engaged in liquidating the securities. Now special reference has been made to the brewery investments of the bank. I was told the other day that the depreciation in these brewery investments was due to the taxation of the present Government. The slightest investigation of the facts would have taught anybody that it had no relation to what really happened. The loss in the brewery investments was £400,000. By the way, I think anyone will admit that was a most unwise investment for a concern of that kind, for a bank that took in small investments. One would have thought they would have selected some other investment not so liable to fluctuate; to fluctuate to begin with according to the habits of the people. I have had the whole of the brewery investments of the Birkbeck Bank analysed, and most of the depreciation occurred before 1st January, 1906, when we came into power. How on earth can it be attributable to taxation by a Government that was not in existence when most of the loss took place? Anyone who looks through the list will find how they tumbled down during the years 1902–3–4, and 1905, attributable undoubtedly to the temperance wave which was supposed to pass over the country at that time, and to which the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain) I remember made reference. It is also attributable to the wild and unscrupulous flotation of breweries which took place in the 1900's, and to the extravagant prices paid for tied houses—prices totally out of proportion to their value. There was a good deal of competition at the time between the various brewery companies, and they ran up the prices to figures which were ludicrous, when one took into account the value of the houses. For instance, a house which ought not to fetch more than a few hundreds was run up in price to thousands of pounds. The 560 inevitable result was a crash, but most of that crash came during the time the Unionist Government was in power. I do not attribute the fall in brewery shares to the Unionist Government.

§ Sir GEORGE YOUNGER
You taxed them.

§ Mr. LLOYD GEORGE
We did not tax them before 1906, but I think my hon. Friend will remember that his Government did tax them very heavily for compensation purposes. Still I am not attributing the fall to the Unionist Government. It just happened that the bulk of that fall came during the time the Unionists were in power, but it was due to causes for which they were not responsible—to the wild and reckless flotation of these companies. The fall was inevitable; but I do say it is grossly unfair for men who have some knowledge of these things—I say, indeedmore—it is very dishonest on their part to attribute to us a fall which had occurred before we came into power, and to lay it at the door of something which happened after this Government was formed—toattribute it, in fact, to the taxation of 1909. I repeat it is absolutely dishonest to do that. Now let us take the case of Consols. The Birkbeck Bank had invested very heavily in Consols. I forget the figure at the moment, but I think it was something like £1,800,000. Most of these Consols had been purchased at a time when they were very high. Certainly£1,500,000 were purchased at the time when they stood at 110, and even at 114. By the year 1906 Consols, which in 1899 were 110, had come down to 89. Then we came into power. Since then they have fallen from 110—

§ Mr. REMNANT
They fell from 114.

§ Mr. LLOYD GEORGE
Yes, they fell from 114 to 89 before we came into office, and at the date of the liquidation of the Bank they had fallen another nine points. What does that mean? There was a drop of twenty-five points during the time the Unionist Government was in power, and there was a drop of nine points during the period we were in power. Yet the whole of the ruin is laid at our doors and not at the doors of those who were responsible for three times the drop that had occurred in our time. Perhaps I had better alter that word "responsible." The Unionists were not altogether responsible, but still the fall occurred during the time they were in power. I, at any rate, am not making 561 them responsible for it. But is it not really monstrous that men with some knowledge of finance, talking to the public, the greater majority of whom naturally are not acquainted with these things, should suppress facts known to themselves and vital to the issue, and lay at the door of the present Government a ruin which, even if you suppose they were responsible for a drop of nine points, was only one-third of the Birkbeck Banks loss? Of course, the real reason is the bank never wrote down their securities as the balance-sheets were prepared from year to year. They wrote them down, I think, to 101, and they stood at 101 on the very day of the insolvency. The day the late Government left office, when Consols stood at 89, they stood in the bank's books at 101. How can any Government be fairly held responsible for a business which is conducted on those principles? It is not fair. All that the Government asks for is fair play. I think they are entitled to receive that.
I have just worked out the proportions of the loss on Consols sustained by the Birkbeck Bank during the lifetime of the two respective Governments. The loss during the time of the Unionist Government was a loss of £328,000 in depreciation on Consols. That is between 1899 and 1906. I am not taking them at 114. If I had taken them at 114 the loss would be still greater. I have taken them at 110⅛. The loss between that time and the time of the liquidation was £170,000, so that during the period we were in office the loss was £170,000; but during the period in which the Unionist Government was in office it was a loss of £328,000; yet the whole of that ruin is placed at our doors. The hon. and gallant Gentleman (Mr. Pretyman) is going to follow me. Will he say that that is fair? I do not think he will. The same thing applies to Home Rails. I have looked at their investments in Home Rails, Colonial Securities, and Foreign Securities. The drop during the time the Unionist Government was in power was almost twice as much as the drop afterwards. In every case—Home Rails, Colonial Securities, and Foreign Government Securities, taking the whole of their investments, the same result works out. I think it is right that these facts should be stated. More than that, when such a charge is made, it is right that these facts should be admitted and owned up to, and this Government should not be attacked for that for which it is not responsible. I leave the question of the Birkbeck Bank, and I come to the general 562 question of depreciation. There has been a fall in Consols.

§ Mr. BURDETT-COUTTS
Is the light hon. Gentleman going to say anything about ground rents, which I think was an item included in the charge with regard to the Birkbeck Bank?

§ Mr. LLOYD GEORGE
I am not quite sure what the hon. Gentleman refers to. What I would point out is that when the statement was made the hon. Gentleman who made it said he had no figures on that subject.

§ Mr. BURDETT-COUTTS
He said the depreciation in value had been very great, but that he had not the figures.

§ Mr. LLOYD GEORGE
He gave the figures in the other case and attributed them all to us. I thought the hon. Gentleman was going to interrupt and say it was very wrong to put it all at our doors. I am still on the question of Home Rails, because those are very important gilt-edged securities in this country. I have taken out the figures. Some of them were alluded to by the hon. Baronet (Sir F. Banbury). He did not choose them. I think if he had chosen them he would have chosen them more fairly, because the very best Americans were chosen and not the very best British securities. That is not a fair comparison by any means. I am going to give a list. Take the London and North-Western Railway. The London and North-Western Railway stock, in December, 1898, stood at 199¾.

§ Sir F. BANBURY
Ordinary stock?

§ Mr. LLOYD GEORGE
Yes. They now stand at 131¾. That is a very considerable drop. That is a drop of sixty-eight points, but how is it divided? While the Unionist Government was in power there was a drop of forty points. Why should the whole drop of sixty-eight points be laid at our door when forty points occurred in the time the Unionists were in power and only twenty-eight afterwards? Take Great Eastern stock. There is a drop from 120¼ to 67, of which 32¼ is due to the period of the Unionist Government and 20¾ after we came to power. Great Northern Deferred stood at 59¾ in 1898 and fell to 45¼ by 9th December, 1905—a drop of 14. Since the present Government came into power it has gone up to 50⅞.

§ Sir F. BANBURY
That is since I became a director.

563

§ Mr. LLOYD GEORGE
I frankly admit that the hon. Baronet, as usual, has scored by that interruption. Lancashire and Yorkshire stood at 148 in December, 1898, and they dropped 38¾ points by the time the Unionist Government left office. They have since dropped nineteen points—half the drop for which the Unionist Government were responsible, if Governments are responsible at all for these things. I do not say they are. That is not my case. In Brighton Deferred there was a drop of fifty-two points during the lifetime of the Unionist Administration and a much smaller drop in the corresponding period since we have been in office. In South-Eastern Deferred there was a drop of fifty-one during the time the Unionists were in power, and there is an increase of 3⅝ during the time the present Administration has been in power. I have not quoted these unfairly. I have quoted them because they are of the best. The drop was much greater before January, 1906, than it has been since. At any rate, even if it had not been, what about the point made by the right hon. Gentleman (Mr. Austen Chamberlain) that once a decline begins it is very difficult to arrest it. The decline was a very considerable and a very rapid one. These securities were tumbling down at the time the right hon. Gentleman and his Friends left office, and we have not been able altogether to arrest it.

§ Sir G. YOUNGER
What about the £65,000 for insurance? Will that increase the value of their stocks?

§ Mr. LLOYD GEORGE
I think I am entitled to reply to an interruption which is more or less relevant, and to which I can give an answer without being deflected from the course of my argument. Of course, I can deliver a speech on insurance, but only on the proper occasion. I am just taking the quotations from the market, and they have surely taken insurance into account. The market must have known that insurance was coming on and I am taking the quotations months after the Insurance Bill has been carried and all these things have been discounted. So much for home rails. Now I come to the real depreciation. It would be very easy to make a party point and say, look at the way gilt-edged securities tumbled down during the period of the administration of a Unionist Government. The right hon. Gentleman (Mr. Austen Chamberlain) said you cannot arrest a thing like that once it starts. We have done our best, but it 564 was impossible. There was such a momentum in the kick downwards that the Unionists gave that it was almost impossible to stop it. It is easy to make a point of that kind, but I should not be giving an honest account of the depreciation of gilt edged securities if I said that, and, besides, if we are really going to do something, let us get to the real genuine explanation. That is the only way in which you could possibly do anything, if anything can be done to arrest that process.
Let us look at the real facts. I do hope that those who take part in the Debate, if I may say so, will in discussing these matters assist the Government in arriving at the real causes, and not endeavour to make mere paltry party points which are not useful on an occasion of this kind. What are the real facts? The first is undoubtedly the great widening of the area of investments which took place. Surely that is not to be denied. That is due to two causes. The first is legislative, and for that Governments and Parliaments are responsible; the second is a cause for which the British Parliament is not in the slightest degree responsible, and that is the vital changes which have taken place in foreign markets which were, and still are, a favourite investment ground to the British investor seeking a return on his surplus capital. I take the first. Legislation with regard to trustee investments has been responsible for a good deal. I do not blame the Unionist Government altogether for that. Part of that legislation was carried, I think, in 1894 by the Liberal Government of that day. There was a considerable widening of the area of trustee investments at that date. I forget for the moment what the purpose of it was, but I think they were extended to municipalities and railways.

§ Sir F. BANBURY
In 1888 on the conversion of Consols Lord Goschen widened the area of investements.

§ Mr. LLOYD GEORGE
That shows that I have been wrong as to the date. I thought we were partly responsible in 1894. I am not complaining of what was done in 1888. I am not criticising that. I think before we extended investment securities to Colonial funds there was something to be said against the conversion of Consols. But I am not criticising the policy; I am pointing out the real causes of the depreciation in securities. In 1888 there was a widening of the area of trustee investments, and there was a 565 further widening when they were extended to Colonial securities. Up to that date there was almost compulsory investment of trust funds in certain securities, because trustees were confined in their choice. There was a limit within which trustees could invest their funds, and that limit was so narrow that they had very little choice. The result was that trust money had to be invested in Consols and a few other choice home securities, and the inevitable result was to appreciate those securities, and to give them an artificial and fictitious value which did not correspond to their real value. That has been altered. We have thrown open the door of other investments to trustees. Municipalities have come in; railways have come in; Colonial securities have come in, and there has been a very wide door opened for investments which before that was bolted and barred to the trustee who was looking out for investments within the four corners of the law for the money with which he was entrusted. I gave the figures about six months ago showing what an enormous increase there was in the area of investments. I cannot for the moment recall the figures, but I think it will be discovered that trustees have now three or four times as much stock in which to invest.

§ Mr. CHIOZZA MONEY
More.

§ Mr. LLOYD GEORGE
More! My hon. Friend knows. I think it is four times, at any rate, at the very least. They have four times as much stock available for investment as they had before this legislation was passed. Anybody who knows anything about the business of the Stock Exchange must know that the effect is enormous, the moment you begin to widen the area of investments of this kind. Even the addition of a small percentage to the available stock in itself makes a difference. When you quadruple or quintuple it the effect must be disastrous on the value of your gilt-edged securities.
But there was a second change for which the House was not responsible, the change in the foreign markets. British investors had been in the habit of putting their money into American Securities, North American and South American. They were putting a great deal of money into Australia, and they were putting money into India. Between 1890 and 1899 a very considerable change came over these countries, and for the time being the confidence of the British investor in them was completely forfeited. In the Argentine there 566 were one or two revolutions. I remember when I visited the Argentine, I think in 1896, one revolution was just over. I was shown the place in which they had just shot every policeman in the streets. In Brazil there had been two or three revolutions. Those two areas, which had been a favourite ground for investment by the British capitalist up to that point for years and years were practically closed to him. The Baring crisis was very largely accounted for by those particular events, and very nearly produced a severe disaster to British capital, and the Government had to come to the rescue. South America was practically closed for years. What happened in India? In India the price of silver fell, as perhaps the House will remember, some time in the nineties. The Indian Mint was closed, and India ceased to be a favourable ground for investment. The British investor had sent scores of millions of pounds to Australia. In Australia there was a great crash, and it was all during those years. The fall in silver affected the United States very seriously, so much so that at one time the United States Treasury was almost within twenty-four hours of exhausting the whole of its gold reserve. That was a very serious situation. There was another important factor which checked British investments in the United States, and that was the Venezuelan episode. That was a serious business, and showed how much sentiment enters into investing. For a short time it created a spirit of antagonism and hostility which almost ruled out America from our markets. For two or three years the British investor would not put his money there.
Then Canada was passing through a great era of expansion. That was the state of things, not only that, but in all the great countries of the world there was a very severe depression, due very largely to the low price of agricultural produce. Inasmuch as the agricultural countries of the world always look to us for cash to develop their agricultural resources, the moment you get depression in those countries you have not got the same inducement to invest in them as you had before. Taking all these things together, what happens? There was no country to which British capital could go at that moment. Until confidence had been restored it could not go to South America, which was rocking in revolution; there was no confidence, and it produced nothing but bankruptcy, and the Baring crisis was a very 567 severe one. The British investor could not go to Australia, because there was a great financial crash there. And in the United States of America, because of the great fall in silver creating a financial crisis, there was very nearly a revolution—I mean a political revolution, because of the silver question at that time. What was left to British capitalists? British capital had been for years looking for investments abroad, British capital which had done more to develop the world than any other country had ever succeeded in doing, and there was no country in the world which did not owe a debt of gratitude to the overflowing capital of Britain; yet for ten years there was no county to which British capital could go owing to this sort of conspiracy of circumstances, over which we had no control at all. The investor had to find places at home in which to put his capital. What happened? Two things happened. Gilt-edged securities simply rushed up to an unprecedented figure, an unhealthy figure, I think. No man can say now that 114 for 2½ per cent, stock was anything but an unhealthy figure. Mr. Goschen took advantage of these circumstances to convert. It was beginning to come; at any rate, there was beginning to be an appreciation in Consols, due to a certain extent to the commencement of these changed circumstances.

§ Sir F. BANBURY
That was in 1896.

§ Mr. LLOYD GEORGE
Very well, I am willing to give up that point in order to go on with the general line of argument; it is not very important one way or the other. The British investor had to put his money into British Securities. Trustees could find no other investments. Even if the Colonial Securities Act had been in operation, there was no Colony in which to invest. South Australia was passing through a severe crisis; Canada had hardly begun to expand; India was in a position of great insecurity because of the silver crisis; and the British investor had to put his money into British investments. He was compelled to put his money into British Securities, and he began to speculate wildly in industrials and in breweries, and all sorts of industrial enterprises were put on the market at inflated prices. Any man who could show his profits were so much, and that those profits had grown from the first year to the second year, and from the second year to the third year with every prospect of being doubled, could float anything. 568 Everybody knows, who remembers those days, the sort of things that were being floated. There was a mad frenzy in the market for all those things. Take brewery shares. Any brewery company that could show profit, or even though they could show very little profit, if they could show that they bought a hundred public-houses or five hundred public-houses, had no difficulty in getting people to subscribe, and people who would say they were worth so much. They could get money then for any undertaking. That was the condition of things, and a very disastrous thing for British credit. Breweries tumbled down, many of the industrials have gone, some of them, it is true, have held their own, because they were sound, and some have appreciated; but on the whole scores if not hundreds of millions, of honest British cash were thrown away at that time, and why? Because there was no other place for the British investor to put his cash, except—and I accept the correction of the right hon. Gentleman—South African mines. It was purely a wild, mad gamble in anything the company promoters could get hold of, and to which they could get any decent accountant or valuer to pen him name.
Under those circumstances, of course, gilt-edged securities went up, up, up, and almost completely out of sight. What happened then? You had a great spurt in gold production. I have no doubt that the fall in silver had a good deal to do with it, and, as a matter of fact, it had. I am told that in Denver, or where the silver mines were, somewhere in the West of the United States, a good many of the silver mines closed down as the price of silver went down. Thousands of miners were thrown out of work. What did they do? They went gold prospecting and discovered a good deal of gold, and then came the great discovery in South Africa, which was purely an accidental discovery. The miners in America discovered gold in the Yukon, and there were also discoveries of gold in Western Australia and other places. The figures are very remarkable as to gold production. In the ten years, 1881–91, the gold production of the world amounted to £223,000,000, and in the ten years ending 1911 the gold production of the world was £823,000,000, or four times as much, and in the last fifteen years the gold production of the world has equalled the previous sixty years put together. Of course, that was bound to have a very great and enormous effect on prices one way or the other. It is very 569 difficult for anyone to dogmatise about a subject of that kind. You might get one man who would say that the effect would be in one direction, and you might get another man who would be equally emphatic in the opinion that the effect would be directly contrary. It seems, judging by events, that the first effect was at any rate to put up the price of gilt-edged securities because of the tremendous flow of gold into this country, and because of the limited character of the investments available. But the moment the door was thrown open there was a directly contrary effect. General prices went up and the price of gilt-edged securities went down. Those are the causes that really affect this very great problem. It is idle to ascribe them in the main to anything else.
I come to political reasons. I admit you cannot altogether exclude political considerations. The South African war undoubtedly affected the question very greatly. There was a downward tendency, I think, before the war. I am not quite sure about that, but I give the credit of it at any rate to those who were responsible. There was a downward tendency apparent, but the moment the war started that slight downward tendency became a drop, a sudden drop, and it has never been recovered. There has been no recovery from that date. It came upon a market which was very sensitive, which was beginning to turn in a certain direction; then came the tremendous weight of these £200,000,000 which had to be borrowed or raised in other ways. Coming at a moment when the market was very apt to start in that direction, it gave a very great momentum to the downward tendency, and we have never recovered. It is affecting the price of Consols even at this moment. I have given the figure of the amount which the Government prior to the present year had expended in debt reduction. The total debt reduction which would have been effected up to the present year was £64,000,000. Had it not been for the South African war practically every penny of that would have gone to Consols. That would have made a very great difference.

§ Mr. BONAR LAW
Taxation would not have been so high, and there would not have been the surplus if taxation had not been so high.

§ 8.0 P.M.

§ Mr. LLOYD GEORGE
I do not think the right hon. Gentleman quite sees my 570 point. That interruption is not quite relevant to the point I was making. What happened? Out of that £64,000,000 we were able to give to Consols only £32,000,000. We had to give £25,000,000—nearly £26,000,000—to the war debt. That made a very great difference in the market. If in addition to the £32,000,000 with which we went to the market to purchase Consols we had been able to go there with an additional £25,000,000, does anyone who knows anything about the market deny that it would have made an enormous difference in the price? With more money than usual to redeem debt we have been able to apply less than usual to Consols. That is not our fault. It is because we had to get rid of this war debt so far as we could and as rapidly as possible. But that made a very great difference to Consols, and what I say is that it is extraordinarily mean to make us responsible for that. It is doubly mean for those who are responsible for it to attribute it to us. I come to another point—Irish Land Stock. That has undoubtedly affected the market very seriously, apart from the fact that you have to go to the market for £2,000,000, £.3,000,000, or £5,000,000 at a time. It would have been far better if you could have borrowed the whole amount and done with it, as it raises the feeling that nobody knows when you are coming next. That is, of course, the evil of Irish Land Stock from the point of view of a Government security. I will show another way in which it has affected the Government. Prior to that Act savings banks invested their money in Consols. I am only quoting now from memory, but I think they used to invest about £10,000,000 in Consols. What an enormous difference it makes in the market when you have a buyer whom you can depend upon to buy ten millions' worth every year! It makes such a difference to trustees; it makes such a difference to bankers; because the one advantage of Consols in the old days was that you knew that you could sell them. [HON MEMBERS: "Hear, hear."] I know; I agree. But when you withdraw £25,000,000 to pay a war debt, when you withdraw £10,000,000 a year—not in so many years—but £10,000,000 a year to invest in something else, it makes a gigantic difference to those who have to invest and who want to invest in that which they can always find a ready purchaser for. What did savings banks do? They invested their money in Irish Land Stock. That 571 was a contributory cause in spoiling our markets.
There is another reason—though I do not want to make too much of this—but you cannot ignore it. There is no doubt that one reason—not the main, but a contributory cause—of the depreciation of British securities is the conspiracy to run them down. Just think what the effect would be with any other security? Supposing you had got all the financial papers, all the Liberal papers, running down some particular security, it is bound to go down, and certain forces might have a ruinous effect upon it. Does any hon. Member again say that these things would not have some effect in reducing the value of that security in the market? Of course they would. This has gone on for years, on platforms, in the Press, and in offices. This must have had an effect, and when it comes with the recollection of losses which people have sustained I agree with the right hon. Gentleman that once it begins to decline it is difficult to stop it. When a man has lost a very large sum of money in Consols he has not the same appetite for investment in that particular security. The main part of the loss occurred before ever we came into office, and the appetite for Consols had gone by that time. People had sustained enormous losses. The Birkbeck Bank had already lost between £300,000 and £400,000 in Consols before we came into office. Their appetite, at any rate, had gone by this time. Therefore if in addition to this there is a kind of organised attempt to decry, to run down, to disparage the securities of your own native country, the result must inevitably be that it will affect the market to a certain extent. There is one thing I want to point out to the right hon. Gentleman. He says, "How is it that foreign securities have not fallen to the same extent; they had not fallen to the same extent before 1906?" The answer is obviously that some of the main causes for the fall of our securities do not operate abroad. You have nothing abroad which corresponds to our Trustee Investment Acts. Before those, France and Germany had the same provision that we had, or, if they had not, they did not alter, and there has been no alteration in those markets at all.
There has been no alteration in these markets at all, and, as the right hon. Gentleman knows very well, France is a very 572 restricted market indeed. There you are not able to invest your money abroad. There is very little trench exchange except subject to conditions which the Government lay down, and lay down very rigorously, so that the French Exchange is one of the narrowest and most restricted in the world, and therefore they have been able to keep up their securities more at the same level in the last ten years, but even they have gone down. That is the first contributory cause that does not apply in France, neither does it in Germany. The Boer war did not apply to them, neither does Irish Land Stock. They have nothing to correspond quite with that, and they have not got abroad the same unpatriotic efforts to decry the credit of their country. On the contrary, the whole of the Press there is engaged in rather appreciating the credit of their country, and saying what a great country it is for investments, and that by that means they endeavour to attract capital from abroad. I apologise to the House for taking up all this time, but the Government has been very bitterly assailed and I feel bound to make my statement in reply. The gilt-edged market is not an index of the prosperity of a country—very often it is the reverse. There is no doubt at all of the fact that if you have plenty of remunerative investments at home and abroad that affects the gilt-edged markets in this country and in Germany, and if trade was worse I think the gilt-edged market would be better in the three countries.
The increment of this country is going up enormously year by year, and it has gone up to a larger extent during the time we were in office. I do not say we are responsible for it, but it has gone up to a larger extent during the time we were in office and to a much larger extent than during the corresponding period when the right hon. Gentleman and his Friends were in office. I do not say the credit is due to us, but what I do say is, when they say all these things about the gilt-edged market, as if something was done by the Government to weaken the credit of the country. I say the fact that the prosperity of this country has gone up to a much larger extent during the time we were in office is much the best answer to these complaints. During the last twenty years there has been an increase of 60 per cent, in income under review and the rate of progress has been much greater during the last six or seven years than it was before. The right hon. Gentleman attributed the fall in securities to the increase of expenditure. If he will 573 take the trouble which I have taken to contrast the increase of expendiure during the time we have been in office and during the time our predecessors were in office he will find that the increase was twice as great during the time that they were in office. What do I mean by expenditure? I mean by expenditure genuine expenditure. I mean you must attribute to expenditure the money which you borrow for unproductive purposes, which we pay out of the revenue of the year, and if you do that you will find the Unionist increase of expenditure was 48 per cent. and our increase of expenditure was 24 per cent.
There are some hon. Gentlemen opposite who will say, "Ah, yes, but you are placing the burden upon a class not popular on your own side." Is that so? One of the complaints of my hon. Friend the Member for Blackburn (Mr. Philip Snowden) is that I put an additional heavy duty upon tobacco, that I put an additional duty upon whisky—at any rate, that I have put a burden upon the working classes. Vary well! These are considerable burdens, and if I were seeking merely to place a burden upon the shoulders of those who do not vote Liberal I certainly would not put a duty upon those two particular classes of articles. The Government are very often charged with truckling to their Friends from Ireland. Do hon. Gentlemen imagine I made myself very popular in Ireland by putting a 3s. 9d. duty upon spirits?

§ Sir G. YOUNGER
What about the licences?

§ Mr. LLOYD GEORGE
Everybody knows it cost me endless trouble. Hon. Gentlemen opposite treated the insurance charge as a burden upon industry. They referred to the £18,000,000 as a charge put upon industry. The bulk of that is put upon the working classes. The right hon. Gentleman, the Member for East Worcester (Mr. Austen Chamberlain) did not make that charge, but one of his followers made it. Let me ask this: Is the action of the Opposition on that occasion such as to encourage any Government to distribute the burden fairly? I ask that in all fairness. I do not ask it of the right hon. Gentleman, because not a word of criticism have I to make of his conduct. There is a good deal of cheap popularity to be obtained by attacking us. The right hon. Gentleman never truckled to that. He stood by it to the very last, and 574 I believe it will be to his eternal credit. It is an unpopular thing to do. Do hon. Gentlemen think I know so little about electioneering as to believe that putting 4d. a week upon workmen is a popular thing to do? I have not been electioneering for twenty years without knowing that that is not the way to win elections.

§ Mr. PHILIP SNOWDEN
Ninepence for fourpence.

§ Mr. LLOYD GEORGE
So it is, but at any rate I agree it would have been a much more popular thing if I had responded to the appeal of the hon. Gentleman and made it purely non-contributory. Another 6d. or 7d. upon the Income Tax would have left the workman quite cold or rather warmer in their support. I really would like to say this in all seriousness. I think it is a fundamental mistake to make things of that sort difficult in the future. There is only one end to it. I know something about the difficulties; I could have got rid of them at once by striking the fourpence out, but it would make the scheme a worse scheme and a poorer scheme; it would not have done as much good to the working classes then as the knowledge that they are contributing something towards it. I will tell hon. Gentlemen opposite where this sort of thing will end. If every effort to do the right and straight and honest thing in things of that kind are to be discouraged by taking advantage of a thing which, on the whole, is one of the best things in it, but which it will take time to bring conviction to the working classes as to its righteousness it will end in a parasite democracy like that which ruined Rome, where they expected all to be done for them by gifts and alms and charity without any contribution being demanded from them. That is not statesmanship. That is the way to rot democracy, and unless there are men who have got the courage to face that temporary unpopularity and call upon the people under schemes of this kind to pay their fair share it will be the ruin of the British democracy as it was the ruin of the Roman democracy. In those days there were no great virile Empires outside. The populations were trained to make sacrifices for the State; trained to give two or three years of their life to the State; trained to contribute an insurance scheme for the State, and trained from the very start each to make his contribution for a common end. There were no democracies like that in those I days, but we have got them to-day. We 575 are face to face with them; we are confronted with them. We have to fight them in industry. Heaven forbid that we shall have to fight them in any other field! At any rate, they are there. I do not think it makes very much diffeernce, but I think the worst even of that has passed. Do hon. Gentlemen not think that I realise what it meant? I do realise it, and I appeal to this House and to those who have a real interest in the people of this country and want to see a virile self-respecting and independent race ready to make sacrifices, the greatest which anybody can be called upon to make for the State. I invite them not to truckle to this sort of soft spirit, but rather say, "We ask you for your own honour as well as for the security and strength of the State to contribute to the riches of this country."

§ Mr. BONAR LAW
I had no intention of taking any part in this Debate, but the speech which the right hon. Gentleman has just delivered was so interesting, and from my point of view so amazing, that I cannot resist the temptation of saying a few words. His peroration was very fine and with every word of it I agree, but what I would say to him is "Physician, heal thyself"—for there is no man in this country up to this moment who has done so much as the right hon. Gentleman to spread that very feeling of parasitism to which he has alluded. In regard to what the right hon. Gentleman said about the insurance scheme, I think I can say without any hesitation that our withers are absolutely unwrung. I spoke on the Third Reading Debate, and I said nothing in criticism stronger than I said on the Second Reading. When the right hon. Gentleman tells us now that he knew of the unpopularity that it would bring upon him, all I can say is that he concealed that very well from his followers, more particularly when he went about the country telling the working classes, "we are going to give you 9d. for 4d." Then the right hon. Gentleman spoke of hon. Members sitting below the Gangway and the criticism about truckling to them. He said, "Did I not put 3s. 9d. on whisky?" Yes, I remember those Debates very well and I remember the hon. and learned Member for Waterford coming down to this House one day and saying, "Your proposed licensing duties are unfair," and the right hon. Gentleman altered them for Ireland, and he did not alter them for England.

576

§ Mr. LLOYD GEORGE
I think it is just as well that the right hon. Gentleman should know the facts. The first demand amounted to £4,000,000, and it was reduced to £2,100,000 by the concession that was made.

§ Mr. BONAR LAW
That does not touch the point, and the Return which was issued the other day proves my argument that the right hon. Gentleman made special terms for Ireland which were not made for England. I think the whole question of our credit is a very serious one, and the speech which the right hon. Gentleman has just delivered shows that he does not realise in the least what the position is. He talked about a conspiracy to run down national securities, and he spoke of papers doing this. He spoke of the City, of officers and the rest of them doing this. I have been in business, and I have never found in my experience any business men who, for political reasons, would refrain from buying a security if they thought they could make a profit. Therefore, if the right hon. Gentleman thinks that all this hostility to his methods of finance in the City is due to political reasons he is mistaken, for they are hostile because they believe that his methods strike at the root of the security on which in the long run their business depends. I am going to examine, the points made in defence by the right hon. Gentleman. He fell back as usual on paying off debt, although he did not say as much about it as we are accustomed to hear. I have some figures made out as to the amount of debt paid in peace years by the Unionist administration and the administration of the right hon. Gentleman. Of course the right hon. Gentleman's administration paid off a great deal more debt than we did, but how was it paid off? Largely by the surpluses from the Old Sinking Fund. What does that mean? It means one of two things. Either that those surpluses came there from bad estimating, of which I do not think the right hon. Gentleman has any reason to be proud, or it came from a far worse cause, namely, that he deliberately estimated in such a way as to get a surplus in order to have it at the end of the year. It must be from one of those causes and in neither of them is there anything which any Government can be proud of. Let me quote from a speech made by a colleague of the right hon. Gentleman the President of the Board of Trade, and I have no doubt he 577 has limped up as quickly as he can to the new finance. This is what he said:— The real test of the policy pursued by thy Chancellor of the Exchequer in regard to debt, is not so much the actual amount of the debt which he managed to redeem during his term of office, as the amount specially applied by him year by year to that purpose. Judged by that test, the amount we provided for a reduction of Debt was an average of £25,625,000 as against £26,000,000 during their time. During the years for which the right hon. Gentleman himself is responsible the amount was £24,500,000. Looking at it from what is the most important point of view, that is the impression produced on the public by what is done, the Government have reason to be proud of what they have done. The right hon. Gentleman gave various reasons for this fall in securities. He said, "It is the trustee investments which have made all this difference." It has undoubtedly made a large part of it, but surely he has exaggerated the effect for two reasons. He himself has pointed out and it is obvious that this state of things does not apply to this country only, namely, that wealth is increasing. If the total amount to be invested is increasing the widening of the area does not apply so much as when the amount is more limited. There is another reason which I think is most important which the right hon. Gentleman always overlooks. While it is quite true that the area of trustee investments is enlarged, nobody knows better than the right hon. Gentleman that long before in the case of estates where a special settlement was made, very wide powers were given in the trust investments, and they were not confined to trustee stock. That always was so, and surely the right hon. Gentleman is greatly exaggerating that matter. What is more, it took place many years before this great fall occurred. The right hon. Gentleman said that it is due to the Boer war, and it is mean of us who are responsible for it to blame him for the fall.

§ Mr. LLOYD GEORGE
Partly.

§ Mr. BONAR LAW
Well, partly. That is one reason. I gave one reason, and I am now giving another. Has the right hon. Gentleman considered that something must be very far wrong with this country if long ere this we have not recovered from the effects of that war? Look, for instance, at a war that has happened lately, the war between Japan and Russia. In both those cases their securities have gone up enormously, while 578 ours have fallen. How, then, can the right hon. Gentleman say the war is one of the causes of this depreciation? What seems to me the most depressing thing about the speech of the right hon. Gentleman is that he has entirely overlooked the point of all the charges made against him. He took the case of the Birkbeck Bank and mentioned two things, Consols and brewery investments. He said there was a larger fall while the Unionists were in office than there has been since the present Government came into office. That is true, but that is not the point. If you find a particular class of securities are falling all over the world at any given time, obviously that is not due to political reasons in any particular country; but, if you find that in one country securities are steadily falling when they are not falling in other countries, then it is safe to assume part of that fall is due to political considerations. Let me show how the right hon. Gentleman entirely overlooked the point. Dealing with home securities and referring to a speech made by my hon. Friend the Member for the City of London (Sir F. Banbury), he picked out certain home securities and showed they fell more before the present Government came into office than since. That was not the point of the charge at all. The point of that criticism was this: Since this Government came into office, that class of security has fallen immensely, whilst similar securities in other countries have not fallen.

§ Mr. LLOYD GEORGE
Surely that applies far more to the period before 1906?

§ Mr. BONAR LAW
Indeed it does not. That is precisely where the right hon. Gentleman is mistaken. Before 1906 the rate of interest to be obtained on good foreign investments was far higher than was to be obtained on good investments in this country. Now in many cases the best foreign debentures or the best foreign preferred stocks do not give a larger yield than precisely the same kind of investments in this country, as, for instance, in the case of American railways and the railways of this country. There never was a case of that kind at all till the present Government came into office. Then the right hon. Gentleman talked about Consols. Let me just give figures to show how entirely he-has overlooked the point. Our national security fell during the period of the Unionist Administration, but so did the national securities of other countries.

579

§ Mr. LLOYD GEORGE
Not to the same extent.

§ Mr. BONAR LAW
Not to the same extent, because they were not so high, but there was a steady and persistent fall which was due to causes universal all over the world. Take our Consols since the present Government came into office, and compare them with the national security of Germany, and in this connection it is especially interesting to read an extract from a speech made by the right hon. Gentleman in Manchester at a time when he was supporting a colleague who was seeking election there. At that time he said:— Take the Exchequer in this year 1908. "We have restored the national credit. When we came into office the national credit had slithered down thirty rungs of the ladder. That was inaccurate, of course, but it was fairly near the point. We could not stop the impetus at once, it was falling so rapidly; but by Mr. Asquith's sound finance confidence and credit has been gradually restored. At that time the price of Consols was 87¾. They have slithered down a good many points since, while the right hon. Gentleman has been restoring the national credit! I ask the right hon. Gentleman to follow this, and the next time he is making this kind of defence to try and deal with it. At that time the price of Germany's national security was 80¾. Ours has fallen from 87 to 75. I am taking the month of June. It may have changed since. At the time the right hon. Gentleman spoke, Germany's national security was 80, and the other day it was 80½.

§ Mr. LLOYD GEORGE
It has fallen since then.

§ Mr. BONAR LAW
At any rate, the fall is not comparable with ours. At that date it was 80½ and practically it has not fallen at all. How can you account for that? The right hon. Gentleman told us that another reason is we have Irish Land Stock and other loans. I have heard him in this House on previous occasions talk about the miserable position of Germany, because they had to borrow money to keep up their Navy. Then they have other loans, too, and yet, in spite of that, their stock has not fallen and ours has. There is no use disguising the fact. If the right hon. Gentleman chooses to make inquiry—I think he knows now, for he can find out as well as any of us—he will find there is all this disquiet in the City for two reasons—one comparatively unimportant, but the other really important. The comparatively unimportant reason is, in my 580 opinion, that the right hon. Gentleman has introduced a looseness of methods in everything dealing with finance. That in itself is bound to shake the market. My right hon. Friend (Mr. Austen Chamberlain) gave an example of it the other day. Look at the Insurance Act and the method by which it was financed. Take old age pensions first. They estimated that at half that which it has turned out to be. The very fact that mistake was made would have made any wise Chancellor of the Exchequer say, "As this great burden has been thrown up for the future by old age pensions, we will at least take care that under the Insurance Act we pay our way, and, if anything pay rather more than our way at the outset." He did nothing of the kind. In order to be able to say he was giving two-pence when he was not giving it, and for no other reason, he piled up this burden for the future.

§ Mr. LLOYD GEORGE
Does the right hon. Gentleman know he is responsible, not exactly for the same thing, but for something worse—teachers' superannuation, which he and his colleagues established. They paid a few thousands the first year, though it was a commitment running up to £600,000 a year thirty or forty years hence. I have done nothing of that kind.

§ Mr. BONAR LAW
Supposing it is true, we showed bad finance in hundreds of thousands; he is showing bad finance in millions. We showed it at a time when we had not previously thrown immense burdens forward for our successors. He is doing it when there is before his eyes this immense and growing burden for old age pensions. Take other examples of what I consider very loose methods of finance. The right hon. Gentleman talks to us about robbing the democracy, but he has used his position from first to last for electioneering purposes, and for nothing else. We had a sample of it in connection with Supply, and I think it was deplorable. He was afraid something might happen with regard to a bargain with the hon. Gentlemen below the Gangway, and he introduced Supply for six weeks instead of for the usual time. It was criticised here, and he told us: "The House of Commons must retain control over finance. This is a good and better method. We are reverting to the older and better method." What happened? The tactical reason for 581 which he was making that change disappeared, and from that day to this we have never reverted to, and have never heard a word of reverting to, the older and better method. Take another instance, which was discussed a year ago. There was a raid upon the Treasury Chest, caused by the same manœuvre, and it was severely criticised by the Public Accounts Committee. That kind of thing in itself does shake confidence. We had a far worse instance this year when he came to deal with his Budget, and hung up that £6,500,000. I can imagine nothing which would appear worse to an ordinary business man who likes to see good, sound, business methods. It was that he was going to supply the possible needs of the Navy. But he knew—it was pointed out to him—that he could not possibly spend more at the outside than a million or two on this purpose. Suppose he had, in an ordinary straightforward way, applied five millions to the reduction of Debt, it would have given a feeling of confidence in the City that he was returning to old methods. But what does he do? He gives it now, and everybody believes he has been compelled to do it against his will, and that he had kept it back for the purposes of electioneering. All these things would destroy confidence in an ordinary commercial undertaking, and it destroys it still more when one is dealing with the finances of the State.
The real reason, however, is not far to seek. The right hon. Gentleman talks here in a comparatively reasonable way. But when he gets on to a public platform, how does he there encourage security and stability? He talked about our being unable to invest in South America, because it was rocking for want of confidence. He is doing his utmost to make this country rock for want of confidence. It was not so much his Budget proposals; there was not very much in them. I always said so; I said that the viciousness was not in the amount, but that it was in the principle involved. The Land Taxes do not take much money out of anybody's pockets and they give nothing to the revenue. They never will do so. They were never intended to do so. [An HON. MEMBER: "Waif: and see."] I ask hon. Gentlemen opposite to realise these facts. At the time that the Budget was going through I was in Glasgow, and attended a meeting of the chamber of commerce there. That is a body divided politically, although it is mainly Conservative. It is very much divided on Tariff Reform. It passed an unanimous vote against the Land Clauses 582 in the Budget. Yet not one man there in a hundred had any direct interests in these taxes. Why did they object? Because they know that if you once lay down the principle that a particular form of property, licensing or land, is unpopular and has no rights or security, then you cannot stop at land, and you must extend it to other forms of property. The one way to restore credit is for the right hon. Gentleman to cease making speeches like those to which I have to refer. I have one here. It is not the Limehouse speech. It was one picked out by accident. It was, I think, delivered at Newport, and in the course of it the right hon. Gentleman asked:— Who is it that is responsible for the scheme of things, whereby while one man is engaged all through his life in grinding labour in order to win a poor and precarious existence for himself, another man who does not toil, receives every hour of the day and every hour of the night while he slumbers, more than his poor neighbour receives the whole year through.

§ Mr. GEORGE ROBERTS
It does not need the Chancellor of the Exchequer to tell the people that. They know it for themselves.

§ Mr. BONAR LAW
Of course, if it was only intended as a peroration to the speech it was nothing but cant. But if it was meant in earnest, it means that the way in which, according to the right hon. Gentleman, the poorer classes of this country are to get their condition bettered is not by improved trade or by having greater prosperity all round, but by adopting the principle laid down by the hon. Member for Blackburn (Mr. Snowden), and to take from the rich in order to give to the poor. You will not gain the confidence of the people by adopting methods of that kind. I think they are radically wrong. Everyone would like to see a fair distribution of wealth, but that fair distribution is not to be obtained by doing what the right hon. Gentleman has done—by frightening capital out of this country in a way in which it was never frightened before, with consequences which the people will learn, if by no other way, by experience and sad teaching in the methods of the right hon. Gentleman. We have, simultaneously with this outflow of capital, speeches in which the right hon. Gentleman talks about the abounding prosperity of this country. There is, too, a larger amount of emigration from this country than ever before. The right hon. Gentleman spoke about investments in foreign securities, and said that this was due to the fact that people had not previously had the same opportunity.

583

§ Mr. LLOYD GEORGE
Really the right hon. Gentleman is wrong. I said nothing of the kind. I said there was a period during which they could not invest in the favourite securities of some British investors.

§ Mr. BONAR LAW
I do not see much difference in the two statements. The right hon. Gentleman said that, at an earlier period, people had not these foreign investments to go to. I really think the right hon. Gentleman, before making a statement of that kind, should ask some people whose business has been in connection with these things. There never has been a time in my life when a man could not get, from a foreign investment, a higher rate of interest on apparently as good security. Why did not the people invest in those foreign securities? Because they felt that, though the rate of interest was higher, and though the security seemed to be as good, yet they preferred things at home because they thought them more secure. But a change has come about, and if the right hon. Gentleman will ask any broker in the City at this moment, he will find this—I think it is a deplorable thing for this country—that the ordinary investor, who formerly never dreamt of touching foreign securities, at this moment prefers a foreign investment with the same apparent security as the British investment and at the same rate of interest. [An HON. MEMBER: "That is not true."] I say it is true. The right hon. Gentleman I gather denies that. He took the figures given by my hon. Friend the Member for the City of London, showing investments offering practically the same security and paying the same rate of interest as in the case of foreign securities.

§ The ATTORNEY-GENERAL (Sir Rufus Isaacs)
Why are not German securities higher than Consols?

§ Mr. BONAR LAW
Germany is not the only country where people can invest. The investments referred to by my hon. Friend were American railways and investments of that kind. The right hon. Gentleman gave prices of our similar securities, but he did not deal with the point that they gave as good a rate of interest as our own.

§ Mr. LLOYD GEORGE
What I said was that the hon. Baronet had chosen the best American railway securities, and compared them with the second best British railway 584 securities, and, therefore, it was not a fair comparison. The argument itself may have been good or bad, but I did not deal with it.

§ Mr. BONAR LAW
Has the right hon. Gentleman got the list?

§ Mr. LLOYD GEORGE
No.

§ Mr. BONAR LAW
I heard the list read over by my hon. Friend, and the securities seemed to me to be practically the same kind of security.

§ Mr. LLOYD GEORGE
I can mention one or two. The hon. Baronet's list included the Great Central Railway and the Metropolitan Railway, and these he sought to compare with the Pennsylvanian Railway. I believe the London and North-Western and the Great Western were also included in the list. A comparison with them would have been right.

§ Mr. BONAR LAW
It is impossible to deal with this matter without the list, I heard the list read, and I undertake to say that if the right hon. Gentleman looks at it again he will find that I am accurate, and that they do, in the main, represent very similar securities. The whole point the right hon. Gentleman has overlooked, and the one point which he ought to have dealt with, is this: that it is not a question of how much securities were falling here when they were falling everywhere else, what he has not explained, and what he cannot explain, is why securities have fallen and are persistently falling under his régime here, while the same kind of securities in foreign countries have not fallen.

§ Mr. GODFREY COLLINS
The Leader of the Opposition has referred to the Glasgow Chamber of Commerce. As I happen to come from Glasgow I may endeavour to refute his statement that there is only one in every hundred members of that body who holds or possesses land. The right hon. Gentleman must know that in Glasgow there are a large number of trustees holding landed property. Business men in Glasgow are largely interested in house property and in land in Glasgow. I venture to assert that his statement that only one in a hundred members of that body is interested in land is very wide of the mark and is a grossly exaggerated statement. He told us also that the Chancellor of the Exchequer by his speeches had removed confidence from the business men of this country. If he will 585 come with me down the banks of the Clyde, he will see there being erected today a large number of shipbuilding yards. If he will come with me to Lancashire, he will see business men erecting new buildings, and putting into their buildings modern plant. If he will come with me to the North-East coast of England, he will see there the same tendencies at work as in Lancashire and Scotland. The fact of the matter is that business men believe that this country has a great future before it, and that they are prepared to back their opinion by placing their money in their businesses. It is because business men to-day are finding an outlet for their money in their businesses that they are withdrawing their money from the exchange to finance their businesses, because when prices are running high, as they are to-day, more money is required by business men to finance and run their undertakings.
I readily admit that confidence is the very necessity of good trade. It is also a very sensitive plant. With all respect to any political party, I believe that economic forces and tendencies are stronger than the power of Governments, and the fall in the prices of securities, and the increased price of commodities, is not due to any action either of this Government or any other Government, but is due principally to the large and increasing output of gold. I should like to emphasise that point, although the Chancellor of the Exchequer referred to it slightly in his speech this evening. I find that every economist, from Adam Smith to the present day, bears testimony to the fact that when more gold mines are discovered and when the output of the precious metal is increased, the prices of commodities increase and the prices of securities on the Stock Exchange decrease. I do not wish to weary the House with quotations from those economists, but I should like to point out that when silver was discovered in large quantities forty years ago and the output increased some 200 per cent, or 300 per cent., the price of silver fell rapidly, naturally, in my opinion, through the increased output, and led to silver having a lower purchasing power. So to-day with gold the law of supply and demand steps in. There has been an enormous output, as the Chancellor of the Exchequer mentioned. This requires to be absorbed, consequently more gold is required than was required formerly to buy the like quantity of commodities. To put the matter from 586 the point of view of Consols, a man may lend to the Government 100 ounces of gold, and he receives in interest 2½ ounces of gold a year. He receives his interest in a depreciating metal; in other words, he receives his interest in a metal that cannot buy as many commodities as formerly, and, naturally enough, the market value of his security drops in price.
Some years before 1895 the output of gold was insufficient for the world's requirements, and up to that time we saw prices falling rapidly and the prices of market stocks rising. During the last ten years there has been this large increase in the output of gold. I have some figures here which show that from 1890 to 1902 the output of gold was £37,000,000 per year and between 1902 and 1911 the output was £85,000,000 per year, in other words, the output had doubled during those years. This output of gold has been of great value to new countries. In the nineties these new countries could not get sufficient gold to develop their resources, but to-day, through being able to get sufficient gold, these new countries are being developed with startling rapidity, and to meet the requirements of these new countries new railroads are being made, new shipbuilding yards are being constructed, new cotton mills and woollen mills and engineering works are being erected up and down the country. All these factors having the result of causing relatively dear money, which in turn depreciates the market value of securities. This is in one sense against the interests of a certain class on the Stock Exchange, but I believe it can be shown that it is to the interest of those who have commodities to sell, because there is an increased demand for their manufactures. It is also to the interest of those who have money to lend, as thereby they are able to get a larger interest on their capital. This point was well put by the late Mr. Goschen in 1883, when, referring to the small output of gold, he said:— Happy it is fur those who have the sovereigns; unhappy it is for those who have the commodities. To-day the converse holds good in view of the large and growing output of gold. Unhappy it is for those who have the sovereigns; happy it is for those who have the commodities. I commend that quotation to hon. Members opposite, as the late Mr. Goschen was undoubtedly one of the most able financiers this House saw during the latter end of the last century. It seems to me that until other countries adopt the gold standard, or until in other 587 ways the produce of the gold mines is absorbed, the present tendencies will continue. Political reasons are advanced by hon. Members opposite to account for the fall in the price of Consols and other things, but, as I have already stated, I believe that economic forces and tendencies are stronger than the powers of any Government, provided that the Government of the day does not spend money in wars or in other risky ways. The Chancellor of the Exchequer has taken to task, I think rightly, the Governor of the Bank of England for his speech on a non-party occasion last week in the City. We are getting accustomed to strong partisan speeches at these non-party gatherings. The whole speech dealt with the last six years, and he stated that during the last six years the total receipts from Death Duties amounted to £129,000,000. Why did he not go a little further back and analyse the £2,30,000,000 which were spent and wasted, in the economic sense of the word in the South African war?

§ Sir G. YOUNGER
Was it not a just war?

§ Mr. G. COLLINS
I said I used the word "wasted" in the economic sense. If he had been anxious to take a fair and impartial view of our financial situation his mind would have gone back more than me six years that the Government was in office. I find even the "Daily Mail," on the following day, taking the Governor of the Bank of England to task.

§ Sir J. D. REES
Is the hon. Member quite sure that Mr. Cole is a Conservative? I know him and I am not aware of it.

§ 9.0 P.M.

§ Mr. G. COLLINS
I do not know what he is. He may be a Socialist for all I know. I am dealing with his attack, and I am trying to show that his whole point of view was limited to the six years during which the Government has been in power, and if he was anxious to take a fair and a wider survey he should have gone back ten or twenty years and made his comparison with the financial position of the country to-day. The "Daily Mail" taking to task the Governor of the Bank of England is a striking instance of Satan rebuking sin. Perhaps I may quote what the "Daily Mail" said:— It might have been better if the Governor of the Bank of England had mentioned that the failure was not only due to that fall, but to the lack of provision to meet it. 588 That amply bears out my point of view that this was not a speech which would influence the people of this country. It was a speech animated, as I believe, by a desire to lecture and to teach the Chancellor of the Exchequer. I hope he will read the reply which the Chancellor of the Exchequer has given him this evening and digest it at his leisure. The speech of the Chancellor to-night was, in clearness and directness, one of the most able utterances that any of us have heard while we have been in this House. The only gratifying point about the speech of the Governor of the Bank of England is that towards the end, when he dealt with trade matters, he stated that a 3 per cent, bank rate does not hurt any legitimate trade—a very welcome statement. I think these financial interests would be better advised to teach the party opposite sound financial methods. They bequeathed to us a legacy of debt. To-day we are having to find £8,500,000 by taxes to meet the debts incurred by the party opposite—not only the National Debt, but other debts as well. I find in the Army Estimates this year £866,000 required to be raised by taxation to pay for military works erected by the party opposite. I also find in the Navy Estimates £1,311,000 required to be raised by taxation to pay for works erected by the party opposite between 1895 and 1905. I also find the sum of £126,000 required for public buildings erected by the party opposite. In other words, a total of £2,250,000 which should have been found by the party opposite when they were in power, instead of being transferred to future years. Surely the best method to adopt in these things is to pay year by year for the service of the year. In addition to that there is a large debt still standing from the South African war. During the war the debt was added to to the extent of £160,000,000. Since 1905 it has been reduced by 1½ per cent, a year. In other words, the debt created during the South African War still amounts to £141,000,000, The interest and sinking fund on that figure amount to £6,250,000. Add that to the £2,250,000 and you have a sum of £8,500,000 which the Government have to raise by taxation to pay for debts created by the party opposite during their long tenure of office. With that before me I think I have good ground for stating that the financial interests should bring their influence to bear upon the party opposite.
The right hon. Gentleman (Mr. Austen Chamberlain), in his speech on Tuesday last, 589 stated that with the Income Tax at a high war figure and our Sinking Fund at a low peace figure and the revenue being fast swallowed up, the present financial situation demanded anxious reflection. But unless hon. Members opposite are prepared to vote against the social schemes of the Government or are prepared to suggest alternative methods of raising the revenue required, their criticism lacks definite reality. Criticism, to be effective and to carry weight, must suggest alternative methods, and until we have their policy outlined before us the country has no chance of judging between the alternative methods. But in my view the country is well able to bear the present burden of taxation, and I will give four reasons for my view. First of all, there are large voluntary savings being made by the country as a whole. Even the wealthy classes are saving money. Some ten years ago, when they found their securities dropping in value, they economised in their expenditure and placed out their savings at higher rates of interest, thereby increasing their annual income. Then there are the large involuntary savings made by the country. I mean the large sums being paid off the National Debt, and the large sums being repaid during the last six years by the local authorities. The local authorities alone have repaid £131,000,000 during the last six years, and at the same time they have stopped borrowing so heavily as formerly. These two sums have drifted into trade and helped commercial enterprise. Then there has been a practical revolution in the manufacturing world during the last ten years. Every great industry has reorganised its business. The keynote has been efficiency, and, I venture to state, with the result that the traders of the country are well able to bear the present burden of taxation. Even when we come to the working classes, although wages have not risen to keep pace with the increased cost of living, we have seen new streets of houses erected, vast quantities of furniture bought, and co-operative stores largely developed; and whether you turn to the wealthy, the commercial, or the working classes, I say that in comparison with the past they are well able to bear the present burden of taxation. Until we have some alternative method of raising the revenue, we have to fall back upon our present taxes.
In several matters there is very little difference between the two political parties. In our foreign policy we are 590 practically agreed. As to the needs of the Navy, we have now reached practical agreement. In our military policy there is only criticism of detail. But in our financial policy there is a wide gulf fixed. Finance is the dividing line between parties here and in other countries, and the people of this country are not prepared to change their present methods until they know something more of the alternative methods. There is one other point I wish to put before the Financial Secretary to the Treasury. There is a large loss in one of the public services for which the Treasury is responsible as well as the Postmaster-General. On the telegraph service it amounts to £1,000,000 a year, and it is a growing loss. The Postmaster-General has arranged his charges at such rates that there is this large loss being thrown upon the general taxpayers. The Postmaster-General has been able to transfer the burden to the shoulders of the Chancellor of the Exchequer, who in turn has been able to transfer it to the shoulders of the taxpayers. But now that the telephone is being developed at a rapid rate, and the Post Office requires to go to the Treasury for increased sums of money, the Treasury has now the opportunity of stepping in and forcing the hand of the Postmaster-General to readjust the telegraph rates so that this large and growing loss will be wiped out, and that, therefore, the loss will not fall upon the whole body of the taxpayers. I hope the Financial Secretary to the Treasury will try to make some arrangement with the Postmaster-General to stop this loss.
During the past few years the Chancellor of the Exchequer has carried through two or three tasks. There was the Budget of 1909 and the National Insurance Act of last year. We on this side of the House wish him to carry out two further reforms before this Government appeals to the country. The first is to readjust the burden of local and Imperial taxation. Local rating, I believe, does press heavily upon the working classes, and if by tapping a fresh source of revenue in land values the right hon. Gentleman could raise the money required to readjust local and Imperial burdens, that would go a long way to help manufacturers to meet foreign competition and to put rating on a proper basis. The Chancellor of the Exchequer in introducing the Budget of 1909 stated in this House that before the introduction of the Budget he considered possible economies in the public services, 591 but when he started to economise, or rather, when he started to inquire into the possibility of making economies, he was met with a torrent of abuse, and he did not proceed any further in that matter. Now that he has carried through the Budget of 1909, and the Insurance Act of last year, I hope he will turn his attention to economies in the public services. If he does so, I venture to think he will meet with support not only in this House but outside. I hope he will consider this before this year or next year has passed.

§ Sir G. YOUNGER
After listening to the interesting speech of the hon. Member (Mr. Godfrey Collins) I congratulate him on his optimism. He seems to think that everything is for the best in this best of financial worlds. He went back to the Boer war. It seems to me that subject is to certain hon. Members opposite like King Charles's head—they always go back to that. I would remind hon. Members opposite that if it had not been for a Liberal Government running away from the Boers ten years before, we should not have had the Boer war. The responsibility for that then really rests with them. The hon. Gentleman in his last sentence expressed the pious hope that the Chancellor of the Exchequer would continue in office long enough to deal with the readjustment of local and Imperial taxation, which I think would be an excellent thing, and also with the question of land values. I do not know exactly what are the views of the Chancellor of the Exchequer on the question of land values, nor do I know what are the views of the hon. Gentleman on that subject. They may possibly be rather mixed, like those of some other hon. Gentlemen who discuss the subject in this House. If in expressing that hope the hon. Member desires to see the Chancellor of the Exchequer proposing anything in the shape of "the Single Tax," or proposing any of the extreme measures which his namesake, Henry George, advocated, and if he regards that as a satisfactory or hopeful issue for a settlement of the land question in this country, I do not think he understands the subject. Land value extremists are, of course, very nearly monomaniacs on this subject. I wonder whether the hon. Gentleman is one of those who wish to tax all land values up to 20s. in the £.

§ Mr. GODFREY COLLINS
indicated dissent.

592

§ Sir G. YOUNGER
The hon. Member shakes his head at that. That is rather a staggering blow, and I am glad that there is a limitation to what he desires. How he thinks it fair or reasonable to tax land while leaving other forms of property largely out of the scheme of taxation is a thing I have never been able to understand. It is a proposal which, I hope, will never be seriously made by any Chancellor of the Exchequer. May I also say a word in reply to what the hon. Gentleman said as regards the position of the commercial classes of Glasgow. The hon. Member contradicted what the Leader of the Opposition said as to their interest in land.

§ Mr. G. COLLINS
The Leader of the Opposition said that one in a hundred owned land. I said I thought it was a very much larger number than one in a hundred who were interested in land in Glasgow.

§ Sir G. YOUNGER
There may be more than one in a hundred, but very few of those Gentlemen who dealt with the question are interested in the Land Taxes. The principal taxes are the Undeveloped Land Tax and the Reversion Duty. Nobody will pay Reversion Duty in Scotland under the system of feuing, and only a comparatively few members of the Chamber of Commerce can be interested in undeveloped land. I do not think my right hon. Friend the Leader of the Opposition was very far wrong when he said that these people who condemned the principle underlying the taxes had themselves no very great interest in the taxes, and that certainly they paid a very small proportion of them. And again he said, talking of the development of shipbuilding on the Clyde and in certain other places, that there was no difficulty whatever in getting money in this country for the development of industrial enterprises. I contradict him flatly on that. I do not know whether the hon. Gentleman has any great experience in business.

§ Mr. G. COLLINS
I have been in business for the last twelve or fifteen years.

§ Sir G. YOUNGER
Perhaps he has not experience of banking. I have had a great deal of experience of banking.

§ Mr. G. COLLINS
I have had the experience of raising money in Glasgow.

§ Sir G. YOUNGER
I hope that the hon. Gentleman had a pleasant experience of 593 bankers. I can tell him that for a considerable number of years past, and particularly at the present time, it is almost impossible to raise money at ordinary rates of interest for the development of industrial enterprise, and underwriters of late, in many instances in the case of very good businesses, have had to shoulder 95 per cent. of the whole issue because the public would not subscribe for the shares. My hon. Friend beside me says that the Chinese Loan went very well. At any rate, that has nothing to do with the present Chancellor of the Exchequer. I do not think I need follow the hon. Member further in his speech. What I really rose to discuss was, first of all, what the Chancellor of the Exchequer said in his speech about the position of brewery securities, and also the question of Licence Duties, which he did not touch, though I certainly anticipated that he would answer what the right hon. Gentleman the Member for East Worcestershire said on this point. As to brewery securities, I quite agree with, the Chancellor of the Exchequer that there was a very considerable slump in brewery securities before 1906, before the present Government came into power; but I do not think that that very seriously affected the value of debentures in these breweries. It did certainly affect the value of preference and ordinary shares. But I do not think that up to that time there was any great fall in debentures, because profits continued to be made, considerable dividends were paid, and although there had been overvaluation no doubt of licensed premises, still the premier securities of these great breweries held their price very well, and were very largely invested in by people who I think myself ought to have known better and ought not to have invested in these securities. I myself always discouraged any bank or any company with which I was connected from making investments of that kind, because I did think that there had been a very excessive price paid for them. But since 1909, when the capital of these houses was largely destroyed by the Budget of that year owing to the Licence Duties imposed on them, there has been an enormous fall in the debentures of breweries, and it is ridiculous for the Chancellor to get up and say that nothing that he has done has had any effect on these breweries. It has had every effect, and though there was a slight improvement about a year or so ago in these debentures, they have slipped back again, and when one considers, notwithstanding 594 all that has passed and all the taxation that has been put on these people, that you have the Prime Minister telling deputations that he is going to bring in a Licensing Bill again, and when you have a Committee which has just finished sitting upstairs giving all Scottish publicans five years' notice to quit, then to suggest that the present Government and the Chancellor of the Exchequer are not responsible for the depreciation of the securities is to talk absolute nonsense!
I come now to the Licence Duties themselves. My right hon. Friend the Member for East Worcestershire got a Return issued the other day which is very interesting indeed and very useful. When the Licence Duties were imposed by the Chancellor of the Exchequer in 1909, he and the Postmaster-General, who was his adjutant on that occasion, over and over again in specific terms stated to the House that the sum which they expected to obtain or which they desired to obtain or which they thought they had a right to obtain from these Licence Duties on the on and off retail licences was the sum of £1,600,000. The amount of Licence Duty paid in 1909 was £1,952,293. If you add to that the £1,600,000 which the Chancellor of the Exchequer said he desired to get and which he thought was a perfectly fair contribution, that ought not to be exceeded, you have a total estimate of £3,552,293. What has been the income from these duties? During the whole of these Debates the Chancellor was told that he grossly underestimated the yield. The original estimate was only, I think, £2,300,000 extra, including all manufacturing licences and both on and off trade licences, and he made certain changes, euphemistically called concessions, which he said would take £500,000 off the yield of duty. They have not taken anything like that off. The fact remains that instead of getting the £3,552,293, we learn from the figures of the right hon. Gentleman himself that during the three years he has received £4,058,580 in the first year, £3,966,580 in the second year, and £3,804,500 in the third year; or, £500,000 in the first, £414,000 in the second, and £342,000 in the third, in excess of the estimate, the average excess over these three years being £420,927. When we consider that everybody in this House, including the Chancellor himself, recognised that he was placing a most excessive duty upon these people, and an extraordinarily heavy burden, and that the Estimates are so far out as they have 595 been proved to be, it is a monstrous thing that Borne relief was not proposed by the Chancellor in the present Budget.
In proposing these duties he made the statement that the basis upon which they were to be charged in the first year was not, he thought, fair. Everybody agreed with that. He had a Clause in his Budget under which he proposed to have a register of annual licence values based largely on the sales in the various houses. That, he said, would be ready in a few months. It is not ready yet—and it is three years since the Budget was introduced—and it never will be ready. The Chancellor of the Exchequer got up in his place last year and frankly admitted that he was completely stuck in his annual licence values, and he had got no figures from which he could extract them, and the House understands that it is perfectly impossible to carry out the provisions of Clause 44 of the Budget of 1909. It was always understood that if the annual licence values could be obtained and tabulated, we should then have probably in many cases a higher basis for assessment than the existing valuation gives at the present moment. But again an assurance was forthcoming that it did not matter in the least whether the annual licence valuation was a high one or a low, that a percentage will be applied to that valuation to yield £1,600,000, and not a shilling more. I see the hon. Member for Lincoln smiles. Does he contradict that statement?

§ Mr. C. ROBERTS
I should very much like the opportunity.

§ Sir G. YOUNGER
I will give my authority. The Postmaster-General said:— The retail part of the licensed duties, excluding the yield of the manufacturers' duties, which we have already discussed this afternoon, after the concessions which are being made by the Chancellor of the Exchequer, are still expected to bring in revenue amounting to £1,000,000. Then he goes on to say:— I am aware that what is in the mind of hon. Members opposite is that we want to get this new compensation peusation basis because we believe that it may produce more than annual value, and that, consequently, this sub-section is in intention a weapon for getting a higher sum out of the trade than would otherwise be obtained. This Sub-section, it is thought, is not merely a question of valuation, not merely a question of getting a fair basis of your taxation, but it is to be used is a means of getting more taxation out of the trade than would otherwise be obtained. That is not the intention of the Government, and the Chancellor of the Exchequer has never advanced any such argument. Therefore, if it is found that the new valuation so raises the general basis of valuation of the trade, that to apply the same rates would amount to a substantial burden, then those rates will be modified. In the case of the low-class public-house with inferior buildings, no 596 doubt its valuation will be raised. In the case of the high-class public-house, doing a restaurant business, its valuation will be lowered, and it will secure greater justice as between one set of licence premises and another. It is not intended to be a vehicle of extracting any burdensome taxation from the trade, and I hope, in view of what the Chancellor of the Exchequer said, and my assurance, the discussion will be conducted on that basis. I hope that is satisfactory to the hon. Member.

§ Mr. C. ROBERTS
Quite.

§ Sir G. YOUNGER
My point is that a promise was given on the Budget to have the tax on the new register of the annual licence value. The right hon. Gentleman bound himself to put it on the new basis at a percentage which would yield £1,600,000, and no more. The right hon. Gentleman shakes his head, I will give another quotation from the Postmaster-General, who is always most accurate in these matters, as the right hon. Gentleman opposite knows. He said:— Very well, we will accept your position. Let the taxation be upon that basis, it being understood that that taxation shall not be substantially greater than that which is proposed to exact by this Budget. Does that satisfy the hon. Gentleman? I think it ought. My point is that you have not succeeded in regard to this annual licence value in your object, and the form you issued did not give you the information you required. You withdrew the only part which was worth anything at all, and you have not been able, therefore to create the new basis on which you ought to tax these people. Under these circumstances you are bound, I submit, to make a substantial reduction on the existing duties in order to meet this £400,000 you are taking out. To my mind you will not be fulfilling your pledge unless you do so. We have waited patiently for three years and we have not had any chance at all to raise the point, but now that we have got it, if it is necessary, we mean to keep you here until the 8th or 9th of August in order to have our point met, and to see if we can at length get some decent fulfilment of the pledge given by the Chancellor of the Exchequer. I believe myself that he will do it fairly and candidly when he realises, as he must realise, that he has to give up all hope of ever preparing this new basis. I believe he will take off something from those duties, which will leave him the £1,600,000; as the Postmaster-General said that the taxation was not to be substantially greater than that which was then proposed. So far as that is concerned, it is a question which should be dealt with in Committee, and an Amendment will be 597 proposed on the point. Beyond all that, we still protest against the duties as they stand; they are much too excessive; they are not taxation, they are something very much more like confiscation. The Chancellor of the Exchequer has reduced by this taxation many people to penury. He had the professed magnanimity to come down with the proposal to increase the Whisky Tax in order to allow the retailer to increase prices so that half should go to the licence holder and half to himself. It was pointed out that the duty would not give him any profit, that there would be less trade done, and that therefore he and the retailer would be losers rather than gainers. These people are struggling on, hoping against hope that they may have a change some day. At the present moment they certainly have not got it. The system on which the tax is charged is an unfair one. I admit that it is a most difficult thing to improve it, but it is for the Chancellor of the Exchequer, and not for us, to find out the proper way to levy the tax. The obligation rests with him, and it is for him to discharge it. The trade was never in a worse position than it is now, and yet it has to bear these heavy burdens. Not only is there an enormous increase in the taxation, but there is an enormous increase in the cost of materials. Both malt and hops are very much dearer, there being an increase of 4s. or 5s. a barrel.
I think the trade deserves consideration, and I am quite certain it can be shown clearly that the trade has the right to demand that consideration from the Chancellor of the Exchequer. To maintain the duties at the present level is to impose an unfair and unjust burden upon the trade, which contributes something like 26 per cent, of the whole taxation of the country. Let us compare the effect of this taxation compared with what it was fifteen years ago. Consumption of all liquors has very greatly fallen, and the consumption of beer has also fallen enormously. [An HON. MEMBER: "Hear, hear."] We are not talking about temperance to-night, we are talking about finance. Beer is three and a half million barrels down since that period, and spirits over thirty million gallons down. Notwithstanding that, the produce of taxation fifteen years back was only £33,916,846 for spirits, beer, etc. In 1911 the amount was £40,323,107, despite this decreased consumption, showing over £6,000,000 more in taxation. Then in regard to the definition of premises, that is a point which was mentioned last year, 598 and we had many discussions about it. The Chancellor of the Exchequer offered to make certain concessions which would cost £50,000 a year. For myself I could never discover anything like that amount. I make it only about £5,000 altogether. The Solicitor-General, who is in his place, took charge of this particular Amendment on a previous occasion, and he said that the revenue must be protected against any great inroad on the yield of the Licence Duties. I have made every inquiry, and all I can make out from the information in my possession is that the rebates only amount to a few pounds, and that the people are called upon to pay a great deal more than was paid before, even on the revised definition. The other matters are Committee points, and I think I will defer them. I do appeal to the right hon. Gentleman, and I ask the Chancellor of the Exchequer to deal with this question of the £400,000 per year beyond the estimated sum which he has received out of these Licence Duties for the last three years, and I ask him also to deal with the speech of my right hon. Friend the Member for East Worcestershire, and think that he should tell us now what has become of those pledges he gave as to the preparation of the register, as he knows perfectly well he is never going to be able to have that register. How does he intend to deal with that now, and how does he propose to treat the pledges which he made so specifically? I am perfectly sure if he is only properly informed on the subject he will endeavour to carry them out.

§ Mr. C. ROBERTS
The hon. Baronet has drawn attention to the question of the Licence Duties, and I think in the course of his speech he desired to obtain agreement with myself on the subject he was discussing. I should like to take the same ground and to offer one or two general observations. I was equally interested in the white paper about the liquor Licence Duties, and some part of the hon. Baronet's case rests on whether the Estimates which were formed in 1909–10 by the Government, were inaccurate as proved by this Paper. Before I go into the question of those Estimates, let me just recall to the House the estimates which were framed by the trade itself of those Licence Duties, because we are always being threatened with red ruin by them. We are always being told that legislation or taxation is going to sweep out of existence thousands of licences and 599 reduce everybody to penury. I confess that I was very much interested to see what the effect of these Licence Duties actually was. We were told that people would be driven out of the trade and reduced to penury by the weight of the burden of these Licence Duties. What is the first fact which is revealed by these Licence Duties? We were told by a colleague of the hon. Baronet the hon. Member for Rutland (Mr. Gretton), in the Debate on these Licence Duties, at the time they were fixed, and all these concessions had been granted in 1909, that as the result of these Licence Duties at least one-third of the houses would be wiped out, and that the produce of the Licence Duties would be at least £1,000,000 more than the Government put down in the Estimates. That is merely one simple sample.

§ Sir G. YOUNGER
The Chancellor of the Exchequer gave concessions amounting to £500,000 reduction on the original estimate.

§ Mr. C. ROBERTS
This was after that concession had been made and at the close of the Committee stage. That was the statement again and again repeated as to the result of those duties. As a matter of fact, retail licences have not dropped by any larger number than that caused by the annual reduction under the Act of 1904. Otherwise they remain exactly the same. There has been a reduction of about a thousand per annum in the number of on-licences, and these duties have produced no result. There is some difference in the wholesale licences, and the retail off-licences have in fact gone up in number. There is a reduction in the wholesale licences in England, but that is due to the changes in the way in which retail licences and wholesale licences were issued. We were told the Licence Duties were going to sweep away wholesale the retail on-licences, but there has been absolutely none of that result. Tested by the number of the licences, after three years' experience of these duties, which were described as crushing and vindictive, we find that those houses are perfectly able to stand the burden, as shown by the fact that they are still in existence.

§ Sir G. YOUNGER
They are not making a shilling of profit on them.

§ Mr. C. ROBERTS
I do not think that is the case.

600

§ Sir G. YOUNGER
It is the fact.

§ Mr. C. ROBERTS
If they were not making a profit as the result of those duties we should see some result in the reduction of numbers. There is no reduction in numbers yet observable as the result of those duties. That is the first point I desire to place before the House. It is what invariably happens whenever any alteration in duties or in legislation is proposed. In the time of Sir William Harcourt's increase in the duties there were just the same prophecies of ruin, and after a year or two they proved to be absolutely false. Those prophecies of ruin from the representatives of the trade are invariably exaggerated, and no doubt on all future occasions we shall get wild and reckless and random exaggerations of the effect of the proposals which are made. What is really important is whether the Government estimate is right or wrong. I am bound to say if you compare the duties as they are levied to-day with the duties levied in 1908–9, the result is extremely creditable to the ability with which those estimates were prepared by the Government and the Department. The hon. Baronet knows, no one better, how difficult it is to frame a trade estimate, and I believe that the Government estimate is astonishingly accurate. It is quite true that the Return is at present given approximately because the Paper says that the effect of some adjustments has been estimated as far as possible, but till they are settled the figures given in the Return must be regarded as provisional.

§ Sir G. YOUNGER
It will increase rather than reduce them.

§ Mr. C. ROBERTS
Therefore we are not dealing with absolute accuracy. They are still provisional estimates. Subject to that proviso, what is the actual fact? What was this pledge given by the Government? The hon. Baronet read it out. The pledge was that the trade was not to pay what would amount to a burden substantially greater than the estimate which was made by the Government of the effect of these duties. The estimate was £2,100,000 from the retail and wholesale trade together. After all, the duties on the retail licences are so bound up with the wholesale that you have to take the two together, because hon. Members who recollect those duties know that some part of the duties on the retail trade is borne by the wholesale trade 601 ultimately. The Postmaster-General said at the end of the Committee stage:— We propose a contribution of £2,100,000, of which about £500,000 is drawn from the manufacturers and dealers, while the retail licence holders of all kinds, publicans, beerhouse-keepers, grocers, clubs, and so on, will contribute to the revenue a sum of £1,600,000. The hon. Baronet left out the case of the wholesale dealers.

§ Sir G. YOUNGER
It has nothing to do with the retail licences. If the Chancellor of the Exchequer made no estimate in estimating the manufacturers' licences that is his own look-out. What he said was that he was going to take £1,600,000 from the retail trade, and he has no right to take another shilling.

§ Mr. C. ROBERTS
I have quoted the statement made by the Postmaster-General on 26th October, 1909. Over and over again it was stated that the sum to be drawn from the trade was £2,100,000. What, as a matter of fact, has been drawn from the trade in addition? Comparing the year 1908–9 with the year 1911–12, the extra sum drawn is £2,275,000, instead of £2,100,000, a difference of £175,000. Anybody who knows the difficulty of preparing these estimates will agree that the Government has come astonishingly close to the estimates which were framed a few years ago. That, I believe, entirely disposes of the hon. Baronet's claim for any concession on that point so far as these Licence Duties are concerned. He has had concessions, and I do not think that, on the pledges of the Government, he has the least case for coming to the House and making a further demand. As a matter of fact, these Licence Duties, which were so severely criticised and attacked three years ago, have been paid out of the great wealth of a gigantic monopoly, and have been borne without any indications of the ruin which we were told they would inflict on the trade.

§ Sir J. D. REES
Is the hon. Member unaware that many holders of brewery stocks have been ruined?

§ Mr. DEPUTY-SPEAKER (Mr. Whitley)
The hon. Member is too ready to take part when other Members are speaking.

§ Mr. C. ROBERTS
When the hon. Baronet goes on to annual licence value I do not think he will find me in any critical or hostile mood, but I think he was not fair to the Government when he said that the present position was entirely their own 602 fault. One of the reasons why that register of annual licence values has been delayed is that their case is still before the Courts, and is apparently going up to the House of Lords. Until that case is finally settled, I do not see how it is possible to get this basis for annual licence value, to which, I assure the hon. Baronet, those who share my views on this subject have no objection in the least. We see many advantages in it, and if the trade is unanimous on the point we will join with him in pressing the Government to give that new basis, which, I think, will be far fairer, and have other advantages in reference to the whole question. I think the hon. Baronet's only other claim was that the trade pays 26 per cent, of the taxation of the country.

§ Sir G. YOUNGER
No; tax revenue.

§ Mr. C. ROBERTS
I am speaking from memory, but I am certain the hon. Baronet will find that as the result of the last ten or fifteen years the trade is paying a smaller percentage of the tax revenue of the country by a considerable sum. Before the Boer war it was paying at least 33 per cent. The extra burdens which have come on the country since the Boer war have not fallen in any special measure on the trade. It has contributed, I admit, but its percentage of taxation has been reduced, and the great burden of this extra expenditure has fallen upon the nation as a whole. So far as the general discussion goes, I find it extremely difficult to shed a tear over the fate of the moneyed classes during the last six or seven years. There has been an immense boom in trade. As compared with 1902 the exports of the country are up by £170,695,000. If a boom of that description had taken place subsequently to the introduction of Tariff Reform, it would have been hailed on every Unionist platform as an absolute demonstration of the enormous value of Tariff Reform and as a proof of the efficacy of that fiscal system. I think that we who are Free Traders can equally point to that enormous development as a proof of the value of the system to which we attach importance. What is the other fact that has marked the last seven or ten years? The moneyed classes have increased their annual income, as tested by the Income Tax Returns, by at least £200,000,000. The income under review has gone up in round figures from £800,000,000 to over £1,000,000,000. It is perfectly true that during the same time there has been a rise 603 in wages—a rise since 1890–1899 of 9 per cent. or 10 per cent. You can refuse to admit that only if you single out the year 1900, during which wages were artificially raised as a result of the Boer war. If you take the average for the decennial period you will find a rise of 9 per cent. or 10 per cent. But side by side with that there has been a rise of 10 per cent. in prices, so that the working classes are not really better off than they were. I do not think they have lost ground, but they have not gained. At the same time, the monied classes have skimmed the cream off this enormous trade boom and increased their wealth by at least £200,000,000 a year.
The Leader of the Opposition seemed to hold up the Chancellor of the Exchequer to the indignation of the country because he had dared to raise the question whether it was right, at a time when the idle rich class was increasing its wealth and even rolling in luxury, that the labouring classes should not receive fair remuneration. That was really the gist of the question he asked. It was the gravamen of his charge against the Chancellor of the Exchequer. Whether that question is asked or not by the Chancellor of the Exchequer, it is being asked by every thinking mind, not merely in this country, but in Europe as a whole. If these are the facts with which we are face to face to-day, that the wealthy classes in this country—as I think they are in other countries too, but certainly in this country—have been growing immensely richer in the course of the last ten years, and at the same time the working classes are deprived, by causes which are not under their control, of their fair share in the industrial progress of the country, if at such a time a Chancellor of the Exchequer or a Government is to be blamed for taking that fact into consideration, the chances of the future are not very bright. It is an immense advantage that just at that moment the Government has been able to produce schemes of social reform, such as old age pensions and insurance, which have done something to adjust the balance within certain limits. Instead of the monied classes finding fault with the Government for introducing a policy of social reform at this time, they ought to be intensely grateful that there happens to be in power a Government which at a moment when the position of wealth is challenged, and to some extent justly challenged, has taken up with earnestness and in all sincerity the work of social reform.

604

§ 10.0 P.M.

§ Mr. JAMES MASON
The hon. Gentleman who has just resumed his seat, will forgive me if I do not attempt to follow through the earlier parts of his speech, because the remarks which I wish to make do not touch that part of the taxation system of the country that specially interests those who are engaged in temperance work. But the hon. Gentleman in his concluding remarks spoke of certain classes in this country who found fault with the general desire of the Chancellor of the Exchequer to effect social reform. I think that is largely an accurate description of the position of many classes in this country. We are all of us desirous to effect social reform, but I think where we differ a great deal is in the complaints which are frequently made from the opposite side of the House, on expenditure on matters such as defence, which is vital to the existence and well-being of the country, and without which social reform is an impossibility. I think we may congratulate ourselves that this year we have the Finance Bill brought forward at a more reasonable time in the Session. This is the first occasion which we have had of discussing finance since the famous Budget of 1909, when it coincides with a certain action in the Law Courts to test the validity of delaying the Finance Bill to such a period of the year. The question is one of whether the basis on which our financial system stands is a satisfactory one. In other words, whether the financial fabric does not now to a great extent overlap the foundations on which it stands! When we examine for a moment the question of what I may call our national balance sheet, and compare how we stand, first of all with regard to the expenditure in which we are involved, and then the resources which are at our disposal, I think no one can help being struck with the fact in relation to the resources from which our income is derived that the nation as a whole is not living on its income, as all private individuals, if they are prudent, would desire to do; but is living to a very large extent on its capital. In the first place, we are confronted with very gigantic expenses going mainly in two directions: First of all in defence, and secondly in social reform. The importance of defence is I think frequently either neglected or denied by a very considerable body of hon. Members who sit below the Gangway on the opposite side of the House, who seem to suggest that money might be saved from defence and 605 applied to social reform. I maintain that to run risks in the matter of defence must jeopardise social reform both now and in the future. It is quite obvious that this very large financial call upon the nation is beginning to bring out the fact that we are in some difficulty, or at any rate anticipate some difficulty, in meeting the stress. I think no one can doubt that the question of whether our defence is adequate has exercised a very considerable influence on the public mind The tendency now to go more and more to the outer Dominions of the Empire for assistance is becoming apparent to all. We are recognising as a nation that this great burden of Imperial Defence cannot much longer be borne entirely by this country, but must be spread over a broader area and on a greater number of shoulders. In comparing the question of our enormous expenditure with our resources we must, compare our finances with the question of our trade system. We have heard a great deal in this Debate about the wonderful boom in trade of recent months. I do not hesitate to say that that boom in trade, if it is compared with the general state of trade throughout other industrial nations, has been very considerably exaggerated. After all this question of defence and the trade are very intimately connected, for not only is defence absolutely necessary to carry out the trade of the country, but trade is really the source from which the cost of defence ultimately has to come. The two are so intimately connected together that the question of our trade system is at the basis of our whole power to support the large financial drain which is necessarily thrown upon our shoulders.
The question is: Is our trade system based on a foundation which is as good as it can be, in enabling trade to get the best possible results with a view to providing for the finances of the country? The essentials of good trading have to be looked at not only as to the system, but in the light of absence of industrial unrest; and not only industrial unrest as applied to labour, but also ultimately in the administration of our Government, and the operations of the Government in the system of their taxation. I cannot help thinking that the proclivities of the Government in recent times have not been altogether favourable to the production of a soil in which trade can flourish as well as it might. I admit that trade has been so much better than before. I was 606 saying just before the right hon. Gentleman the Chancellor of the Exchequer came in that I think the boom has been very considerably exaggerated, and has perhaps not been so great as it might have been if you compared it with other industrial countries.

§ Mr. LLOYD GEORGE
Employment was never better!

§ Mr. J. MASON
I was talking about the general trade conditions and what is called the wonderful boom. There is considerable difference of opinion as to whether the claim for that boom has been made good by the right hon. Gentleman or not. It seems to me that you will never be able to base your trade upon a really satisfactory system as long as you continue to do anything which tends to the destruction of or the disencouragement of your industries. When I say the destruction of your industries, of course I mean the hampering of the development and increase of those industries. We hear a good deal of scepticism expressed upon the other side of the House about the effect of the destruction of capital. It is constantly maintained that capital is not destroyed, of if it is destroyed by such taxes, let us say as Death Duties, it is replaced very rapidly. Of course, capital is destroyed. We all admit if you tax capital by Death Duties you destroy that capital by cutting it down for the purposes of revenue. That is not the only capital you destroy. Of course, in every industrial country there is a loss of capital in the ordinary commercial course which nobody can help. If there was no enterprise there would be no loss. The fact of having business means that there is a certain loss of capital and therefore the destruction of capital by certain forms of taxation is in addition to the ordinary loss of capital going on in the country. We have been told frequently by the Prime Minister and others that the export of capital from this country is most desirable, and that the development of many other countries in the world is due to the export of British capital, which, of course, is true. But I think the point is this: Whether the export of capital to these countries is in excess of what we require in this country, or whether it is the export of capital which might be profitably employed in this country.
I have not the slightest doubt that the mere fact that the owner of an industrial 607 concern in this country has to pay a much higher rate of interest than a few years ago, means there is a great deal more difficulty in raising capital for the industries of this country and I know from experience of those industries that the development and enlargement of those concerns would have been very greatly accelerated if it had been easier to raise capital to carry out such extension. In some of the more speculative businesses it is almost impossible to raise money at any reasonable rate of interest, and even in the big concerns, such as the big railway companies, the raising of capital has become so difficult that there is very considerable check to the development which ought to be going on. Why is it we, find ourselves in a condition of difficulty with regard to the raising of capital for the development and extension of industries and means of transportation in the country. It is, of course, that the temptation to escape from the general system of taxation in this country has led a number of people to compare more favourably foreign securities with British security, and, therefore, the amount of capital which should be accumulated in this country, and accumulated at an ever-increasing ratio, compared to that which was destroyed, not only by taxation, but by the ordinary course of business—the amount of capital which ought to be increasing to replace the destroyed capital—is becoming less and less available, and I have not the slightest doubt has already begun to produce, a very baneful influence upon the future of the country. It is often said that the redistribution of capital as carried out by the application of the Death Duties has not produced any great evil. It takes a very considerable period for a tax of that sort to be fully developed and seen. I believe the amount collected in the form of Death Duties since their invention is £400,000,000, and, of course, it is obvious that that is an increasing burden which will have more and more effect as time goes by, and I very much doubt whether we have got to anything like the full effect of burdens of that kind which are thrown on in addition to the ordinary burdens of the country on trade. There is a tendency existing in certain parts of the House to the belief that the redistribution of existing wealth is desirable, whereas in the opinion of a great number of people the real thing we should aim at is not only a redistribution of wealth, but that the total accumulation of 608 the wealth of the country should continue to increase. A country to be prosperous must not only aim at a redistribution of the wealth we have, but it must keep on accumulating and increasing the creation of wealth. It is obvious in order that the country should flourish you have not only to create the capital which has been destroyed, but you have to create fresh wealth to find employment for the people, and those people, increasing in numbers, are capable of employing a much larger amount of capital than existed before. I cannot help thinking that a good many of the proposals of the Government on the old system of taxation, especially those which are designed to fall rather upon capital than upon the incomes of the country, would be unsound if carried out by private individuals in private affairs, and I believe they are utterly unsound in the management of the country's affairs. I protest against throwing the burden of the year rather upon capital than upon the incomes of the nation as a whole.

§ Mr. SNOWDEN
I do not think in the whole of my experience I have ever before listened to a speech so utterly opposed to facts than that delivered by the hon. Member who has just sat down. One would have thought, if one knew nothing about figures and trade returns, incomes and unemployment, that during the last ten years this country has been going to the dogs. On the contrary, every fact disproves the contention put forward by the hon. Member. With regard to his remarks as to the effect of the Death Duties, like all hon. Members opposite, he seems to assume that the sums taken annually by way of the Death Duties cease to be remunerative. I might assume from the way the hon. Gentleman treated this subject, if I knew nothing at all about the matter, that the Government threw the revenue obtained by the imposition of these duties into the sea. As a matter of fact, if not in all cases, at any rate to a great extent, the money that is taken by the State in the form of Death Duties is put to far better purposes and greater social advantage is derived from it than would be the case if it remained in the pockets from which it is taken. A previous speaker said the decline began with the increase in the Death Duties made by Sir William Harcourt. What are the facts? The first year in which the full effect of the changes made by Sir William Harcourt operated the amount taken by Death Duties was 609 £11,000,000. I believe the figure for last year was something like £26,000,000. What has been the effect of that upon the increase of national capital and upon the increase of our national trade? In the year when we were taking £11,000,000 by Estate Duties, our foreign trade, imports and exports taken together, amounted to £738,000,000. Last year, when we were taking more than double the amount by Estate Duties, the foreign trade amounted to £1,237,000,000, an increase of more than 50 per cent.
What happened to the increase in the profits from trade, which, after all, is a test which cannot altogether be ignored? I am going to supplement in greater detail certain facts mentioned by the Chancellor of the Exchequer. He stated that the increase in the amount of income brought under the review of the Income Tax Commissioners during the last the years was larger than in the previous decade. Fortunately, I happen to have the figures here which I extracted some time ago for each decade for the last thirty or forty years, and I find that between 1870 and 1880 the increase in the amount of income brought under the review of the Income Tax Commissioners was £133,000,000; between 1880 and 1890, it was £100,000,000; between 1890 and 1900, it was £140,000,000; and in the last decade, between 1900 and 1910, it grew from £833,000,000 to £1,040,000,000, an increase of more than £200,000,000. Therefore, roughly speaking, the amount of income of the profit-taking section of the community has increased at a rate twice as large as any previous decade in the country's history. Yet, in spite of these facts, we have hon. Members opposite talking—I do not want to be offensive—the sort of stuff which has been uttered by the hon. Member who preceded me. What better test can we have from their point of view of the prosperity of the country than the increase in the profits of trade. Hon. Members say there is considerable difficulty in getting capital for investment in industrial concerns. The facts again refute that statement. Profits in trade were never so big as they have been during the last ten years. What attracts capital to investments but the prospects of profit, and surely the fact that the prospects of profit on commercial industries are now twice as good as before should appeal to the judgment of the investor. There is not a staple industry in this country to-day which is 610 languishing for the sake of capital; in some of our industries there is a superabundance of capital. Take the industry in the borough I represent—the Lancashire cotton trade. It has been exceptionally prosperous for the last few years, and it could not absorb more capital even if it were offered to it, because it is using up with the capital already invested in the trade as much raw material as is available.
Like the Leader of the Opposition, I enjoyed the very eloquent peroration of the Chancellor of the Exchequer, although I dissented from some of the views he expressed in his rhetorical imagery. But there is one question I would like to address to both the Chancellor of the Exchequer and the Leader of the Opposition. The peroration of the former contrasted the lot of the masses toiling hard for a miserable existence with that of people who "toil not neither do they spin, who are clothed in purple and fine linen, and fare sumptuously every day." Let me put this question to the Chancellor of the Exchequer. I know he does not agree that that is a condition of things that ought to be maintained. I know it should be the first business of statesmanship to deal with a condition of things like that. But how does he propose to do it? Does he propose to brighten the lives of these people who are existing in poverty by adding to their burdens increased taxation? Does he propose to cure poverty by putting the cost of its treatment on the poor themselves? The Leader of the Opposition referred to a statement attributed to me as having been made in this House two or three years ago, namely, that the only way to bring about a better distribution of wealth is to make the rich poorer and the poor richer. I do not remember the occasion on which I said that. I do not deny it, for it expresses my sentiment, but I want to ask the right hon. Gentleman what other way he suggests for bringing about a better distribution of wealth. It is not done by merely increasing the prosperity of the country. We have been increasing the wealth of the country enormously during the last twelve years, as I have shown by the increase in Income Tax assessments. An hon. Member earlier in the Debate stated that the average wages of the past ton years showed no increase on the average for the preceding ten years. I am not concerned whether there has been an increase of wages since the days of our grandfathers or not. I am concerned with what is the tendency of wages to-day, for 611 that is the point. I know that from 1850 to the end of the century wages did increase by something like 60 per cent., but about the end of the century there set in a new tendency, and that tendency I am inclined to believe is permanent, unless we bring about a change in our economic system.
During the last ten years there has been a decline in wages. If we take the period from 1901 to 1911, we find that wages in 1911 were lower by £3,000,000 a year than they were at the beginning of 1901. Last year was a year of exceptional labour unrest. We had a number of strikes. The popular impression was that labour was quite exceptionally successful in getting advances in wages by those strikes. What are the facts? The Board of Trade published the figures a few weeks ago. In that exceptional year, a year in which I admit that labour did better than it had done for many years previously, the net advance in wages amounted only to £25,000 a week, and in that year there were less than 500,000 people who had an advance of wages, and nearly 400,000 workpeople suffered a reduction of wages. Does the hon. and gallant Member (Mr. Pretyman) want further proof in support of the statement I make, that there is to-day greater disparity between wealth and poverty than was the case twelve years ago? I will give him another fact. It is not only in nominal wages, but to a great extent in actual wages that the condition of the workpeople is worse today than it was twelve years ago. If we take wholesale prices we find that the cost of living was 11 per cent, higher at the end of 1911 than it was at the beginning of this century, but if we take retail prices the cost of living has increased by an amount considerably more than 11 per cent. There appeared in the Press a few months ago an extract from the housekeeper's book of a boys' home in Birmingham. The superintendent of that home gave the prices of about twenty articles extracted from the housekeeper's book for July, 1903, and for September, 1911. They were all articles which enter into the necessary expenditure of a working class home. These articles in 1903 cost 12s. 10½. In September, 1911, the same quantities of the same articles cost 17s. 11½d., an increase of 40 per cent, in the cost of living. I will not put the average figures so high as that; I will not say 20 per cent., but 11 per cent. or 12 per cent. Taking that figure, a 612 nominal wage of £1 at the beginning of the century is only worth 17s. 6d. to-day. I repeat that there has been a wider divergence in the condition of those who are wealthy and those who are poor. As the hon. Member for Lincoln (Mr. Charles Roberts) said, between the idle rich on the one hand and the hard-working poor on the other, the idle rich are far richer today than they were twelve years ago, while the hard-working poor are poorer to-day than they were twelve years ago. I repeat my question to the Chancellor of the Exchequer. In taxation he has a potent weapon for doing something to redress these inequalities of wealth. He has proposed to do nothing whatever in the Finance Bill that we are now discussing. Something will have to be done to deal with this labour unrest, which is mainly due to the stationariness of wages and the increase in the cost of living. The incidence of the Insurance Act is likely to accentuate the feeling of unrest which is now being felt by the working classes of the country.
I should like to say a word about the Insurance Act. I opposed the incidence of that measure, but never since it became an Act of Parliament have I ever, by spoken word or by written word, done one thing to make the work of those who had the duty and the responsibility of carrying it into operation more difficult. I should think I was committing a criminal act if I were to do that, because I recognise the good intentions of those who have promoted it, much as I differed from them in the way in which they have attempted to carry out their intentions. I hope that my prophecy may not be fulfilled, and I hope that in the actual operation of the measure it will be found to be a much more beneficial Act than I anticipated and believed when it was being discussed in the House. In all my political experience I have known nothing so immoral and so contemptible as the tactics of the Opposition since it was introduced. They had not the courage to oppose the Bill on the Third Reading, and now when they think it is unpopular in the country and when some political capital possibly may be made out of it, they do not hesitate to put every obstacle they can possibly raise in the way of carrying it out, and the people for whom it was intended reaping the greatest possible benefit which may be derived from it.
I wish to make an appeal I have often made to the Chancellor of the Exchequer to do something more than he has done 613 in the last two or three years to benefit the masses of the people of this country by the use of this potent weapon of taxation. Complaints were made by hon. Members opposite two days ago about the disproportion between the amount of revenue raised by direct and by indirect taxation. One hon. Member, to my great surprise, cited John Stuart Mill as an opponent of direct taxation. My complaint is that far too large a proportion of the national revenue is raised by means of indirect taxation. The poor are taxed far more heavily than the rich. A tax of 1d, in the £ upon an income of £1 a week, out of which very likely a family of three or four has to be maintained, is a heavier impost than a 10 per cent. tax on a man who has £5,000 a year. If you were to take even £3,000 a year from an income of £5,000 a year you would not deprive him of a single reasonable satisfaction. You do not deprive him of the means of getting everything that is necessary for his physical health and comfort. But if you tax a working man's income of £1 a week only 2d. or 3d. you are compelling him to go short of some of the necessaries of life. Mr. Gladstone said more than fifty years ago in this House that taxation upon small incomes was taking away something that ought to be devoted to the improvement of the physical efficiency of the people. That is what you are doing by taxation upon tea, sugar and other necessaries. A year or two ago I made a very modest appeal to the Chancellor of the Exchequer to do something to redeem the promise given by every Cabinet Minister at the election of 1906 for the abolition of taxes upon food. We are raising this year just over £10,000,000 by taxation from food—tea, sugar, cocoa, currants, and other articles. We are raising £250,000 on cocoa and fruits. If the Chancellor of the Exchequer cannot afford at present to abolish the Sugar Duty and to reduce the Tea Duty, I think it would have been a good thing from the electioneering point of view to have reduced or abolished certain of the other taxes on food. The Leader of the Opposition in his speech charged the Chancellor of the Exchequer with being actuated in the framing of his Budgets with a desire to advance the political interests of his party. May I say to the Chancellor of the Exchequer what a grand thing it would be at by-elections if a leaflet could be circulated stating that we have abolished the taxes on cocoa, chicory, fruits, currants, and half a dozen other articles. Those 614 electors who were not aware of the amount of revenue raised by the minor taxes on food would be greatly impressed by that. Probably they would be more impressed by that than if the Government were to abolish the Sugar Tax, by which a far larger revenue is raised. I have long protested against the maintenance of these taxes, and I protest again against so large a proportion of the national revenue being raised by the taxation of people who can ill afford it. My canon of taxation is this: Begin at the top and raise all your revenue by the taxation of those who can afford it, and only go down the scale as you are compelled. The principle of taxation hitherto has been the very opposite. In the Budget of 1909 the Chancellor of the Exchequer began in a very moderate way to change that system by the Betterment Tax. I told the right hon. Gentleman last year that he appeared to have grown weary in well doing. Perhaps he will begin again, and if it is too late this year let him, at any rate, begin next year, and let him show his genuine sympathy with the poor by giving practical effect to the peroration of a speech he delivered at Newcastle by using the weapon of taxation for bringing about better conditions for the people.

§ Mr. HICKS BEACH
The hon. Gentleman (Mr. Snowden) has made an interesting contribution to our Debate, but I hope the House will not be brought to accept the conclusion which he advocated. The hon. Gentleman I gather would like to solve all the ills of the country by taxing first those who have any wealth, and leaving free those who have not very much. That sounds very nice in theory, but I do not look on it with much favour, because I have been taught that if you tax to excess the people who produce the wealth of this country the natural result will be to take away the chief incentive to produce this wealth, and the final result will be that the amount of money distributed among the working classes of this country would be very much less than it is now. I was even more impressed by the argument of the hon. Gentleman, that the more you take from the owners of wealth in this country in Estate Duties the more the exports and imports of this country increase. That seems to me a very extraordinary argument, and I shall require a few more conversations with the hon. Gentleman before I am altogether convinced of its soundness. With regard to Death Duties, what we on this side of the 615 House chiefly complain about is this. You are at present taking out of the capital wealth of this country an enormous sum every year. In the year 1905–06 the Estate Duties yielded some £13,000,000. Last year no less than £25,500,000 were extracted from the owners of wealth by the Chancellor of the Exchequer. Though the Government boast that they have paid off £64,000,000 of debt during the past six years, they forget to mention that in the same time they extracted no less than £124,000,000 from the general public wealth of this country by means of Estate Duties. That does not appear to me to be altogether sound finance. A great portion of these duties must come from the capital value of the State.
A great part of the very interesting speech of the Chancellor of the Exchequer this afternoon was taken up by an explanation of the causes which have led to the depreciation in first-class securities. With a great many of the arguments put forward by the Chancellor of the Exchequer I think the House is in general agreement, but he ought to have mentioned another contributory cause and that was the great increase during the past five years in both Imperial and local taxation of wealth. When you have a very large and continually increasing sum taken out of the pockets of the public, either as rates or taxes, it must necessarily follow that there is less money to be spent in buying high-class securities, and this must have an effect in depreciating generally the securities of this country. I think the House recognises that this question of the depreciation of high-class securities is a matter of really first-class importance, not only because it affects the pockets of a certain number of rich people, but also because it affects the savings of the working classes as well, and, what is of far more importance, it has a very serious effect upon the general credit of this country. Nobody knows if this country were to go to war to-morrow at what rate a great war loan could be raised. That being so, I do think it is hardly diplomatic of the Chancellor of the Exchequer not to have replied to the desire expressed by members of the Bankers' Clearing House of London to have an interview with him—if possible a round table conference—to talk over devising some method of improving the general credit of the country. I really think the Chancellor of the Exchequer has 616 not been altogether diplomatic in the answer he has given with regard to that inquiry, which would be in the interest of both parties, for it is most desirable that steps should be taken, by way of a Commission, a Select Committee, or at any rate, some form of inquiry, to strengthen the credit of the country in future. The hon. Member for Blackburn (Mr. Snowden) said the Liberal party have not fulfilled all their pledges. There are a good many pledges of the Liberal party that have not been fulfilled. One had reference to a reduction of expenditure. A great number of us remember that in the election of 1906 the Liberal cry was, "Peace, Retrenchment, and Reform." We have had peace, a good deal of reform, but no retrenchment in general expenditure. I think it is quite time this House paid some attention to the declaration made by the Prime Minister when he occupied the position of Chancellor of the Exchequer. He said:— The increase of expenditure from £101,500,000 in 1896 to £141,750,000 in 1906–7 makes a return to a more economical administration our first and paramount duty, and second only to the duty of reducing expenditure, is the making of more adequate provision for the reduction of the Debt. I have been looking for some time for this general reduction of expenditure, but I find, on the contrary, that comparing the expenditure of this country with the £141,750,000 which the Unionist party left in 1905, that it has increased to £187,000,000, an increase of no less than £47,000,000 under a Liberal Administration which had promised a decrease of expenditure. In 1905 the expenditure on the Army and Navy and Civil Service amounted to £90,500,000, and in this current year it amounts to no less than £123,025,000. That is a very considerable increase, yet the only reply the Chancellor of the Exchequer makes is, What is the money being spent on? It has been spent on an increase of the Navy, a very large increase on the Civil Service, and a great proportion on old age pensions. I voted against the Third Reading of the Old Age Pension Bill on the ground that it should, like the insurance, have been made contributory, and on the ground that the Prime Minister had said the year before that he had no money for old age pensions, and saw no prospect at all of getting any that year. Next year we were suddenly told that the Government had got the money, but were not told where it had come from. Instead of old age pensions costing £6,000,000 they are now costing £12,000,000 a year. And so we go on. This year we have the great 617 expenditure on insurance, and I do urge the House to try and put some check upon this enormous and increasing expenditure. I quite agree it is absolutely essential for the safety of this country and for the defence of our trade and prosperity that we should expend large sums on the Navy when other countries do the same; but if you are called on to pay those large sums every year towards the defence of our shores, and if you are to carry out the old Liberal tradition of calm and rational expenditure, you ought to cut your coat according to your cloth with regard to your social expenditure. I must say I do think the Chancellor of the Exchequer is very much to blame for this enormous increase which takes place every year. The old tradition was that the Treasury was the watch-dog of the taxpayers' purse, and that it was to keep a watchful eye on the expenditure of every Department. What do we see now? We see the Chancellor of the Exchequer taking a leading part in bringing forward and carrying into law very costly schemes which cost the country an enormous number of millions every year. I do not believe that is a right principle. If a measure requiring a large sum of money is to be brought, it ought to be carried out by some other Member of the Government than the Chancellor of the Exchequer. I believe the principle of the Treasury ought to be to keep a watchful eye upon all measures brought forward by the Government, and that it ought to be the last office to attempt to carry into law any scheme which involved the country in the expenditure of large sums of money. Quite apart from that, it also has the effect of taking away from their legitimate duties the Chancellor of the Exchequer and the Financial Secretary to the Treasury. Anybody who has been here at Question Time this Session must have observed that the whole time of the Financial Secretary to the Treasury is taken up answering questions connected with the Insurance Act. That time is taken away from what ought to be his legitimate duty at the Treasury, and it is the same in the case of the Chancellor of the Exchequer. I fail to understand how any Member of the Government can undertake the duties of Chancellor of the Exchequer or of Financial Secretary to the Treasury and at the same time carry out what are their real proper duties of safeguarding the interests of the taxpayers. I think an example of what the Prime Minister would call "a sloppy method" 618 of providing money is shown in this Budget, by the loan of £500,000 to the Uganda Railway. We were told by the Chancellor of the Exchequer that Uganda was a wonderful country, and with enormous possibilities as an asset to the Empire. I do not know if the President of the Local Government Board is here, but I would like to read an extract from a speech he delivered in 1902, in taking part in the Second Reading of the Uganda Railway Bill:— Results should impress the Government with the folly of these schemes for the extension of Empire. Unless the Foreign Office was seriously impressed by the criticisms which had been delivered in the light of sound information, this expenditure of these six millions would double, and, finally, the only asset would be two long rusty steel ribbons stretching from Mombasa to Victoria Nyanza abandoned in despair, because our policy of universal grab had landed ns in trouble nearer home. Our rivals were delighted to encourage us on these madcap expeditions, because in them we lost men and wasted money, but some day we had to wrestle with the beasts in the European Ephesus, weakened in our outposts and dependent on alien troops, we should want the money and men that have been squandered by this Uganda policy. I am glad to find now that the right hon. Gentleman has received office he has taken a more sane view of the expenditure of money on the Uganda Railway. What I object to is the Government making a loan not arranged at the close of the financial year and when the right hon. Gentleman made his Budget statement. When the right hon. Gentleman made his Budget statement he did not say a word about this loan to the Uganda Railway, and when at the end of June or the beginning of July he explained that £500,000 of the surplus was to be devoted to the Uganda Railway he said that it was because the matter had not been settled at the close of the financial year. I believe that to be contrary to all financial tradition. The tradition of this country has always been that the expenditure of the year should be met out of the taxation of the year, and the position of the Treasury has been that if any Department has not completed its estimates by the close of the financial year it must wait until the close of the next financial year before it gets any money. In making this exceptional loan out of the surplus of last year the Treasury have adopted a policy contrary to their former tradition, and one which I hope will not be adopted by any future Government.

§ 11.0 P.M.

§ Mr. PRETYMAN
I was very much interested in the speech of the hon. Member for Blackburn (Mr. Snowden), and particularly in his comparison between the increase in the general income of the country and the small rise in wages within, 619 recent years, especially last year. I wonder if it ever occurred to the hon. Gentleman to look at the matter from this point of view? We are now raising in Imperial and local taxation every year no less than £286,000,000 or £287,000,000. Where does that money come from? Leaving aside the persons upon whom it is ostensibly and immediately levied, the hon. Gentleman will not deny that the whole of that enormous sum is levied upon production and distribution in this country. It must be so. The only way in which you can earn money is by producing or distributing something. Therefore if you levy a tax in any form it falls upon production and distribution. The fund from which wages, incomes, and taxation are derived all comes from that same great source. Why is it there has not been a greater rise in wages? Why has there been this unrest? Mainly because £287,000,000 of the money which ought to, and must, form the wages of the country is intercepted and taken in the form of taxation. The hon. Gentleman smiles. Let us bring it down to concrete facts. The hon. Gentleman rejoices—everybody rejoices in the result—that £12,000,000 is being distributed to the working classes in the form of old age pensions, and that something like £18,000,000—never mind who contributes it; its effect has been largely discounted— is to be distributed in the form of relief under the Insurance Act. The hon. Member says that the working classes have had a rise in wages of only £200,000 or £300,000—some negligible sum. But have they not got this £28,000,000? Is not that a very considerable sum? Can they have the same £28,000,000 in wages and through taxation as well? They have got the £12,000,000, and there is something like £18,000,000 to be eventually distributed under the Insurance Act. Let us leave the insurance money and deal only with the other. I never said that the £18,000,000 had been spent, but it is to some extent discounted in anticipation in its effect on the industry of the country. Take only what has been paid out, the £12,000,000, that is intercepted, diverted, in the form of old age pensions. You cannot have the same shilling both ways. Do not let me mistake my case. I do not say that the whole of that £286,000,000, or the £12,000,000 would have gone, but I do say that a considerable proportion of it would have so gone; for there is the production and distribution 620 between the different classes who are engaged in the industrial concerns of the country. Under the national law of distribution, a portion of that £12,000,000 would have gone in wages and profits. As it is it is taken from the general fund and distributed in the form of old age pensions. The effect of that is largely to reduce the fund which is available for wages. So far, therefore, as the result to the working classes is concerned, the apparent direct result is that they are receiving £12,000,000 in old age pensions, which may be greater to some people than they would have received in the form of wages. That may be the point of view of the hon. Gentleman. But it is obvious that that money— and this is the point on which I think the hon. Member and I may not agree—for he says that money taken in taxation is as remunerative as if it were left in the hands of the industrial classes.

§ Mr. SNOWDEN was understood to assent.

§ Mr. PRETYMAN
That is where I join issue with the hon. Member. I do not deny that from one point of view the expenditure of money may be as he says. But no expenditure from a social point can be preferable to that expended on providing the necessaries of life for the extremely poor. That is obviously true. I do not for a moment deny it. What I do say is that so far as the general effect on the wealth of the country is concerned the money is taken from reproductive industry. It is there being paid to men who are the actual producers of the wealth; better than to the man who is a mere consumer. It is better for the general wealth of the country, for in reproductive industry the worker has not only to produce sufficient to cover his own wages, but to provide interest on the capital engaged and reserve. The money that comes to him is in a much better form than that of an old age pension, for however munificent and desirable these may be from the social point of view they are not reproductive in any sense of the word. [An HON. MEMBER: "Of course they are."] They are clearly not reproductive. An old age pension is received and spent, some part of it, I admit, being wages the worker has earned during his life as wages. The sums paid to the old aged pensioners are producing nothing, and therefore that money is not reproductive in its actual application. If I may use the expression without being misunderstood, it is from the national point of 621 view not the social point of view, a luxury that the nation should be able to afford—and I am sure the hon. Member will admit that it is a luxury for any nation to be able to afford from its national revenue—5s. per week to the old people. It is a luxury that the nation should be able to afford, not from the humanitarian or social point of view, but from the economic basis—and we are now discussing the Finance Bill—this luxury which few nations can afford. Let me take an illustration. Let me take a part of the United Kingdom. Could Ireland afford the luxury out of her own resources to pay 5s. to all persons over the age of seventy? Will any hon. Gentleman opposite answer that? She could not, and it is only because England is the richer country and finds the economic luxury over here that old age pensions can be paid to the old people in Ireland. If the hon. Gentleman opposite will only look deeper into these things he will find they are not so simple.

§ Mr. SNOWDEN
Does that apply to education expenditure?

§ Mr. PRETYMAN
Certainly not. They are totally different things. By education you are fitting the man to enable him to earn; it is a preliminary stage: you are fitting him to be reproductive. In the other case the money may be equally due, and it may be equally right to pay it; I am not arguing it from that point of view, but the money spent on old age pensions is not really reproductive. I should now like to refer to the speech of the Chancellor of the Exchequer. A more interesting speech I never heard, even from the right hon. Gentleman himself, particularly his peroration. I am bound to say I listened with amazement to the peroration of the Chancellor of the Exchequer. [HON. MEMBERS: "Where is he?"] I do not wish to complain because the right hon. Gentleman is not here. He very courteously told me he had to leave the House for a few moments, and that he hoped to return before I had finished speaking. I know he was called out, but I must get on with my speech. The Chancellor's speech was mainly in reply to my right hon. Friend the Member for East Worcester (Mr. Austen Chamberlain). My right hon. Friend dealt with the question of the fall in the value of securities. What did my right hon. Friend say? He said he did not desire to raise the question of relative responsibility, as to which we were not likely to agree, 622 but he said that the results were of sufficient gravity for the House of Commons to seriously consider how to ameliorate them. I hoped when the Chancellor of the Exchequer rose to reply to the speech of my right hon. Friend he would deal with the question, and would suggest to the House of Commons how this serious situation might be ameliorated without dealing at any great length with the question of responsibility, which my right hon. Friend purposely passed by. The Chancellor of the Exchequer devoted his whole speech to the question of responsibility, and the only suggestion, and that a very indirect one—as to amelioration —came in his peroration. The suggestion was obvious to the whole House that if the Chancellor of the Exchequer himself would adopt upon the platform in the country the same attitude and the same language as he did in his peroration, I think the price of Consols would be very visibly affected. I will take one of the Chancellor of the Exchequer's favourite arguments. He is perpetually telling us that the Government have paid off many millions more of debt than their predecessors. Surely if the price of Consols mainly depended upon paying off debt it must follow that the price would be higher now than when much less debt was being paid off. But is that the fact? We have to look for some other reason. The real fact is that the payment of debt is only one factor of a great many which govern the price of Consols. There is one factor much more important than the mere paying off of debt and it is the root question of security, which is the rock-bottom of this subject.
Take a recent instance. What happened about the 24th of June, when the Chancellor of the Exchequer informed this House and the country that he proposed to devote £5,000,000 of his surplus to its legitimate use, the Old Sinking Fund? Naturally, one looked to see if the price of Consols would respond to that very large accession to the sum available for the reduction of debt. What happened? That announcement was sprung upon the country as a surprise, and it had not been discounted outside the occupants of the Front Bench, and I do not suppose a single hon. Member of this House outside the Cabinet knew that the right hon. Gentleman was going to make that statement, and certainly the City had no sort of prior knowledge that £5,000,000 was going to be devoted to that particular purpose. What 623 the Chancellor of the Exchequer apparently forgot was that within two days of announcing the devoting of that £5,000,000 to the reduction of debt he made a political speech at Woodford Green, and that speech did a great deal more harm to the price of Consols than the £5,000,000 of public money did good. Why do I say that? There is one security in this country which is even more important than Consols. Consols are the premier investment in this country, but they are not the premier security in the true sense of the word. The premier security in this or any other country is the security of the private ownership of land. I hope hon. Gentlemen opposite will not misunderstand me.
I do not sugest that the ownership of any land by any private individual is sacred. It is the invariable custom in every country where the acquisition of land is necessary for the community or the State that land should be compulsorily taken on fair and reasonable compensation to the owner. I do not suggest that because a man owns a piece of land he has a right to keep it if it is required by the State, but I do say that if the State takes that land it ought to pay fair compensation for it. Subject to that, I do say that the root foundation of the security of any State and of any form of property in a State is based upon the security of private property in land. The confidence of investors of all classes has already been rudely shaken by the Budget of 1909–10, and the Chancellor of the Exchequer has chosen this moment for a fresh suggestion or promise of a further onslaught upon private ownership of land. We do not know exactly what form the attack is going to take, but the very vagueness of it increases the alarm. Let me contrast to the House the language of the right hon. Gentleman here with his language on the public platform. What did he say to us to-day? He warned us, in the most eloquent language, of the most dangerous consequences of promising to the democracy benefits to which they do not contribute. I think hon. Gentlemen opposite will see I am in no sense misrepresenting the right hon. Gentleman. He warned us most seriously of the danger of promising a democracy boons to which they do not contribute. That was in his capacity in this House as Chancellor of the Exchequer. When the right hon. Gentleman speaks in the country he does not speak as the Chancellor of the Exchequer, but as the Prince of Demagogues in this country. May I suggest to the 624 right hon. Gentleman that the two rôles do not go well together under the same hat. It is impossible to occupy the position of the Chancellor of the Exchequer and to expect to be able to maintain the credit of the country over whose finances the right hon. Gentleman presides, and at the same time to let himself go on public platforms and use this kind of language. I cannot do better than give the actual sentence quoted by my right hop. Friend (Mr. Austen Chamberlain), because it is the most perfect contrast with the sentiments which the right hon. Gentleman expressed to-day:— Was it not a splendid thing to be able to choose the doctor when yon like, and have someone else to pay for it. I think that was at Newcastle. [An HON. MEMBER: "NO."] Well, at any rate, it was at some public meeting. Was it at the Tabernacle?

§ The FINANCIAL SECRETARY to the TREASURY (Mr. Masterman) indicated assent.

§ Mr. PRETYMAN
Oh, it was in the Tabernacle. Has any responsible statesman in this country before within the short period of a few weeks come down to this House and told the House of Commons and the country that nothing would be more dangerous than to offer to a democracy something for which they are not to pay, and get up on the public platform and say, "What a splendid thing it is to choose your own doctor and get somebody else to pay for it?" Which is the real Chancellor of the Exchequer? I rather think I should have been in some doubt if it had not been for two words used by the hon. Member for Blackburn in his speech when he referred somewhat slightingly to the Chancellor of the Exchequer's peroration, and called it a little bit of "rhetorical imagery." I am afraid the hon. Member puts more faith in the rhetorical imagery of the right hon. Gentleman on the platform than in his rhetorical imagery in this House.
I wish to touch upon the effect on the working classes of this country of the enormous burden of taxation laid on them at the present time. It is quite obvious that the withdrawal of 287 millions a year in the form of rates and taxes from the wages fund of this country must increase the cost of living. You cannot lay a burden to that extent on the cost of production and distribution in this country without increasing the cost of living to every consumer in the country. You have 625 to add to that also the increased cost of capital in every industry—the increased cost of credit and of capital. It is a remarkable thing: it is I suppose one of the laws of political economy that if you attack capital it follows automatically—not through the wickedness of the capitalist—quite apart from any voluntary action on his part—it follows as necessarily as light follows darkness that the cost of that capital is increased to those who require to use it, and the consequence of this increased cost, added to the enormous burden of taxation, largely increases the cost of living, while that increase unaccompanied by a corresponding increase in wages is responsible for the period of labour unrest through which we have been passing.
Both the hon. Members for Tewkesbury (Mr. Hicks Beach) and for Blackburn touched on the question of the Death Duties. The hon. Member for Blackburn said the effect of the Death Duties had been to double the income of the country. I do not think he can have meant that: he probably meant to use the words "in spite of the Death Duties." At any rate, he said that no industry had been seriously injured by the Death Duties. I should like to refer to the industry of which I have most experience—the industry of agriculture. I do not believe anyone will contradict me when I say that the effect of the Death Duties on agriculture has been disastrous. The two rural problems most troubling the House of Commons at this moment are rural housing and the sales of agricultural land, which are going on at the present time greatly to the injury of the tenant farmers. These are the two matters which have been most largely affected by the Death Duties.
I am glad the Chancellor of the Exchequer has returned, because I am speaking of the Death Duties as they affect agricultural land. I do not believe that the right hon. Gentleman in the least degree realizes the effect of the burden of the Death Duties upon agricultural land, as altered and increased by his Budget of 1909. The main difficulty between agriculture and any other industry is that on agricultural estates the actual income available to the owner bears a very small proportion to the capital value or to the gross income. That was recognised by Sir William Harcourt, and on account of that, when he imposed the Death Duties, he inserted a proviso 626 that where they were levied on purely agricultural land, not agricultural land having a building value, they were to be limited to a number of years' purchase of the income of the estate. The effect of that was that where the owner of an estate did his duty and provided the necessary cottages and farms for his tenants at his own expense, his available income being small, he was not burdened with the same amount of Death Duties as his neighbour who neglected those duties and did not spend the amount of money required for the estate. That proviso was one of enormous value to agricultural districts. The right hon. Gentleman last Session, at my instance, made a small modification, and I am ready to acknowledge it. I pointed out the effect of charging Death Duties upon the capital value of rural cottages which cost £200 to build and are let at £4 a year and kept in repair by their owners.
The Budget Debates took place at such a period of the Session that it was quite impossible to argue the point, and one had to accept what the right hon. Gentleman saw his way to give. If he looks into it he will realize that an agricultural labourer's cottage on a farm is not a separate unit. It is part of the equipment of the farm. It may be feudalism. In the rural districts there are certain remains of feudalism which are of value. What was the good spirit behind feudalism? It was co-operation between all classes concerned for the common benefit. To that extent to-day, on agricultural properties carried on as they have been and ought to be, the rent which the owner receives is not looked upon as absolutely at the disposal of the owner. The rent carries with it responsibilities, and the primary burden upon that rent is the equipment of the property for the benefit of all concerned. The owner has the expense of providing the accommodation for the labourers necessary to work the farm. The co-operation takes this form, that the owner builds the cottages. They are let with the farm, and no extra rent is charged for them. Let us say it is a 200 acre farm rented at £200. The agricultural labourer is only charged £4 a year by the tenant. The cottages are part of the equipment of the farm, and when the capital value is concerned, and when it comes to a question of Death Duties upon the farm, a fair basis for charging Death Duties is the net £200 a year which the owner receives after the cottages are built instead of the present system, £200 a year less the 627 necessary annual expenditure for maintenance, repair, and management, for which an allowance has to be made. The right hon. Gentleman recognised in the matter of income tax that position, and he conceded an allowance of 25 per cent., which I hope he is now prepared to increase to the full amount which anyone can show he has expended. But in regard to Death Duties my object in proposing that concession was that he would cover not only income tax but also death duties, and had the law been left as it stood that concession would have been applied to Death Duties as well as to Income Tax. But the right hon. Gentleman gave with one hand and took away four times as much with the other. Had Sir William Harcourt's proviso remained in force the deduction would have operated on the actual income which the landlord received less his expenditure for the maintenance and repairs. That new proviso inserted in his Budget Act of 1909–10 has removed that protection to the landlord and the consequence is that the death duties fall upon the farm entirely irrespective of the expenditure which the landlord has incurred. That is why the housing question is so acute in rural districts and it is one of the main reasons for the sales of agricultural estates.
The right hon. Gentleman in his Budget has devoted £500,000 to East Africa. I think he might have looked a little nearer home, and I think State advances are extremely necessary for rural housing. I do not ask for a farthing of State aid, but only for State financing. The vice of some of the proposals that have been made for rural housing is that the local authority is asked to build the houses. If it builds them and lets them to the agricultural labourer he cannot afford to pay an economic rent and the local authority cannot and ought not to be called upon to make up the difference. Who ought to do it? The owner of the land. It is his responsibility—and he ought not to shirk it—to provide the cottages which are required, not necessarily for every labourer, but the nominal standard of cottages. Why does he not do that? For two reasons. First of all because of the enormous burden of taxation which is laid upon rural property, and secondly because in many cases he has not the capital. If the right hon. Gentleman will look into the matter and relieve what he believes to be the unfair incidence of the death duties 628 upon rural property and if he can provide a fund from which cottages can be built at 3¼ per cent.—

§ Mr. LLOYD GEORGE
What sinking fund do you suggest?

§ Mr. PRETYMAN
I suggest no sinking fund. I suggest a perpetual charge of, say, 3¼ per cent, on £6 10s. for the cottage. If a tenant farmer wants a cottage for a labourer he would be glad to pay £1 a year for it, and to let it for £4. The sum of 30s. extra would enable him to keep the cottage in repair. This is only my own suggestion; I do not make it for other people. I have been building cottages myself for twenty-three years. The difference between that proposal and the proposal that the cottage should be built by themselves is that it has an economic interest for the landlord and the tenant farmer. That would make them glad to carry out the arrangement. There is no economic interest for the local authority to do it. I admit that there is a political difficulty, and it is this: I know that some hon. Members will say that the tenure by an agricultural labourer of his cottage would depend upon the retaining of his present employment, and that if he lost his employment, he would lose his home. I do not think any hon. Member will say so if he looks further into the question. Surely it is right to say that agricultural labourers live on the farm. [An HON. MEMBER: "Why?"] It is just as necessary for them to live on the farm and occupy cottages on it, and that other people should not occupy them, as it is for hon. Gentlemen opposite to have servants living in their own houses. It is part of the equipment of a farm, and I say it is impossible under any circumstances to suggest that an agricultural labourer who leaves the service of his employer should ask to remain in occupation of a cottage built and paid for by the owner, or the tenant farmer, or by both together, for the purpose of enabling that farm to be worked. If cottages are desired for general purposes, and if the occupier of a cottage is to be able to work for whom he pleases, then you will have to provide money for the cottages through the State or the local authorities, and make up the difference through the aid of public funds. If a cottage is to be used by an agricultural labourer on a farm, you must lend the money not to the local authority but to the owner and tenant farmer, and they will make up the difference. They will be 629 glad to do it. If the right hon. Gentleman will consider the suggestion, I think he will find that there is something in it.
I wish now to refer to a matter that was debated on 24th June on the Report stage of a Resolution, namely, the Land Taxes and the inquiry promised by the Chancellor of the Exchequer. The right hon. Gentleman is, I think, prepared to admit that so far his land taxes have not been much of a success. I do not suppose he would admit it—that would be too much to ask—but the facts are pretty evident. There is no revenue. The object of the tax, I suppose, is to collect revenue. There is another object—to provide a valuation. I do not know which is the more worthless. Of the two I think the valuation of the less value because the right hon. Gentleman and his Friends are always telling us that they have got a great Domesday Book which they are going to use for future purposes. But there must be more uniformity in a valuation and this valuation is without any kind of uniformity at all. The methods applied to urban land and agricultural land are totally different. The method of obtaining urban site values has resulted in houses on opposite sides of the street equal in size, area, and market value having different site values. Therefore there is no basis of valuation at all.
Further, there is a large number of cases in the courts to be decided. Quite irrespective of these test cases valuations are going on all over the country, and are being nominally completed. When the test cases are decided all these valuations will have to be reopened. Surely the right hon. Gentleman will not maintain—and I would like some reply from the Attorney-General on this point—that although a valuation may have become statutory by the lapse of sixty days from the date of the provisional valuation, if it is found as the result of the test cases that there is some point or points in that valuation which is incorrect there will be no opportunity of reopening it. If this be so then it is true to say that there is not in reality one valuation settled, and there cannot be until we have the decisions of the courts making clear what is the law on the 101 points which have to be decided. They may all require to be reopened, and therefore the valuations at present are in reality not worth the paper they are written on, let alone the cost of undertaking them. When this matter was discussed on the 24th of June the 630 Chancellor of the Exchequer promised an immediate inquiry. The inquiry was originally suggested by my right hon. Friend the Member for East Worcestershire, who meant to have referred to this matter in his speech on Monday, but it was crowded out. The Chancellor of the Exchequer suggested the reference to inquire into the working of the valuation prescribed by Section 26 Sub-section (1) of the Finance Act of 1910, and to report whether any modifications were necessary in carrying out that valuation. The Chancellor of the Exchequer only put that forward tentatively, and indicated that he was prepared to receive suggestions as to the reference, and further promised that there would be a full opportunity of discussing both the reference and the composition of the Committee before the matter Vas decided.

§ Mr. LLOYD GEORGE
I quite agree that I put forward the suggestion with reference to having a discussion about the terms of reference, but I have no recollection of saying that there would be a debate upon the machinery. I did invite suggestions upon that subject.

§ Mr. AUSTEN CHAMBERLAIN
I think the right hon. Gentleman stated the matter fairly. The discussion arose on a particular Vote in Supply, and we proposed to conclude the discussion then so that we might have an opportunity of recurring to the subject. I do not think the Chancellor of the Exchequer promised a day for it.

§ Mr. PRETYMAN
I do not say a day was promised, but that an opportunity was to be given. Having looked very carefully into the matter I am inclined to think that this reference hardly appears wide enough, and I believe the right hon. Gentleman has had before him the reference which we propose, and which I will now read:— To inquire into the working of the Scheme of land valuation set up by the Finance Act, 1909–10, and, in particular, whether there is being ascertained the true market value of the land, and the true value of the site after credit has been given for improvements other than public improvements; and also to inquire into the method of valuing, on an occasion, and to report whether the site value as ascertained on an occasion is properly comparable with the original site value. That is the reference, which, I think, speaks for itself, and I hope the Attorney-General will be able to accede to the suggestion. In regard to mineral rights an Amendment was moved in Committee and I think the Chancellor of the Exchequer 631 is aware that there is great confusion in the matter. I wish to apologise for having at Question Time said that a question on this subject had not been answered; but there had been a question answered about mineral rights—a question put by my hon. Friend the Member for Brentford, and the answer referred to brine. My point is that the Government have refused to inform the House, although questions have been asked, on what substances they claim Mineral Rights Duties, and they further say that the question has to be settled in Court
Has the right hon. Gentleman considered what that means? It is a very serious matter. The mineral industries of the country are face to face with the fact that a statement is refused as to the substances which are to be regarded as minerals, and they have to fight the matter out in Court at their own expense in reference to every substance. That is not a fair attitude to take up, and it is not a fair position in which to put any industry. I ask, on behalf of the owners of minerals, who are to have a very heavy burden placed upon them, that the Government should state distinctly and publicly what substances are claimed to be minerals. The only communication we have had is the extraordinary one that aqueous rock is not a mineral, and that igneous rock is a mineral. Who is to draw the line? The limit between aqueous rock and igneous rock is very fine, and is a most difficult matter to decide. That has to be found out in regard to a hundred different substances in the Law Courts. Surely that is not a reasonable attitude for the Government to take up. On one point I think the Government can fairly be asked to take definite action, and that is the matter of road stone. In one county you have aqueous rock and in another igneous rock, and in the one county you have Mineral Rights Duty to pay and in the other you have not. What about the enormous quantity of road stone that has to be imported partly from this country and partly from abroad into many counties such as those in the East of England, which have no stone and get it by rail from Leicestershire. The granite from Leicestershire is held to be mineral igneous rock and subject to Mineral Rights Duty. All granite from Leicestershire and from Aberdeen is charged in the duty while granite im- 632 ported from abroad escapes. Surely that is not to the advantage of the home industry.
Really the Chancellor of the Exchequer might look at this matter from a broad point of view, and if he will take a businesslike view of it he will see that to place a tax of this kind produces a minimum of revenue and a maximum of trouble upon the road stone of the country in a day when facility of communication is of enormous importance, and enormous sums are being devoted out of the Development Fund towards the improvement of road communication. All that money which is being spent on granite is subject to this ridiculous imposition. Surely the right hon. Gentleman will find it possible to accept an Amendment, which will be moved in Committee, to exempt road stone from Mineral Rights Duty. We shall then get a broad distinction. Everybody knows what road stone is, but very few can differentiate between igneous and aqueous road stone. I think the right hon. Gentleman will save himself and his Department as much in correspondence and in ink as he will gain in revenue by the tax.

§ Sir RUFUS ISAACS
The hon. and gallant Gentleman in the latter part of his observations mentioned the terms of reference which were proposed as carrying out the suggestions which were made by the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain). The right hon. Gentleman sent us those terms, and I have had the opportunity of considering them. I think it is very important before this Committee is appointed and before the terms of reference are settled that we should be quite plain as to what it is is to form the subject matter of inquiry. There has undoubtedly been some discussion in regard to it on two occasions, but in the terms of reference suggested by the right hon. Gentleman there is one fundamental objection from our point of view. You may have a Committee which is to inquire into the policy of the Act, into the scheme as laid down by Act of Parliament, by the Budget of 1909. If you were to set up such a Committee you would want necessarily a political Committee; that is to say it would be a Committee to inquire into political matters. That is not the kind of matter which this House, and which certainly my right hon. Friend the Chancellor of the Exchequer would like to depute to a Committee of experts com- 633 posed of valuers and presided over by some gentleman distinguished in the legal profession. If, on the other hand, what you desire to inquire into is whether the methods of valuation of land are being properly carried out, and whether the methods employed and the instructions given are generally satisfactory; if that is to be the subject matter of the inquiry, you want, in order to get a proper inquiry, a Committee composed of experts in valuation, a totally different Committee from the one you would appoint if you were going into the political matter. The right hon. Gentleman would be the first to acknowledge that the Committee promised by the Chancellor of the Exchequer was a Committee to inquire into the valuation, that is to say, into the instructions given—which have been many times challenged in this House, particularly by the hon. Member opposite (Mr. Pretyman)—and also into the methods generally employed in the valuation. For that you could not have a better Committee than one composed of eminent experts in valuation, presided over by a gentleman well known and eminent in his profession, whose name when announced would command universal respect.
If you get an impartial independent tribunal of that character to inquiry into the methods and instructions, and to report whether they are generally satisfactory, I think the House will be obtaining what is sought, and what has been the subject-matter of discussion between the right hon. Gentleman and the Chancellor of the Exchequer. The objection that I would take to the proposed terms of reference is that, if adopted as they stand, they would result in a Committee to inquire into both the valuation and the political part of the Act, more especially the latter. The last part of the proposed terms of reference deals with a matter which has not been discussed as forming part of the suggested valuation inquiry. It goes into the question of the occasion of site value, which is defined by the Act of Parliament. That goes into the whole policy of the Act. I am not going to discuss now whether it is right or wrong that you should have an inquiry into that; that may form the subject of discussion, if the right hon. Gentleman thinks fit, at a future date, but it is not what has been asked hitherto. I looked carefully through the Debates to see if that point was raised by the right hon. Gentleman in the discussions with the Chancellor of the Exchequer, and I 634 think the right hon. Gentleman will agree that it was not. What was proposed and promised by the Chancellor of the Exchequer was an inquiry into the methods of valuation, and the Government is anxious that that promise should be carried out. Therefore, my objection, in the main, and for the reasons I have given, is to the last part of the proposed terms of reference.

§ Viscount HELMSLEY
Would the right hon. Gentleman read the words to which he objects?

§ Sir RUFUS ISAACS
Certainly. And also to inquire into the method of valuing on an occasion, and to report whether site value as ascertained on an occasion is properly comparable with the original site value.

§ 12.0 M.

§ Mr. AUSTEN CHAMBERLAIN
This is a matter of great importance, and can hardly be settled to-night. But I want the Government to realise that I am not asking—though I might be tempted to do so—or expecting them to inquire into the policy of the Act. What I am really laying stress upon is that the inquiry should be broad enough to ascertain whether you really get at the truth; in the words of the reference which I have suggested whether you get the true market value of the land, and whether you get the true value of the site both in the original valuation and on any subsequent occasion. If the right hon. and learned Gentleman can give me that in a different form of words I think we can come to terms.

§ Sir RUFUS ISAACS
The whole question depends upon this. Do you intend by submitting to an inquiry to go into the administration of the valuation under the Act or do you mean to inquire into the policy of the Act? By policy I mean the principles of the Act.

§ Mr. AUSTEN CHAMBERLAIN
I will be quite frank with the right hon. and learned Gentleman —perhaps he will pardon me for interrupting him again—but I desire in the first place to inquire into administration. I desire also to go one stage beyond that and ascertain, not whether the policy of the Government was right, but whether the administration of the Act was fulfilling the conditions laid down by the Government when the measure was before the House of Commons.

§ Sir RUFUS ISAACS
What the right hon. Gentleman, quite fairly and frankly 635 —as he always is—says he wants to do is to go a step further than administration; in the inquiry into administration he includes the later part—

§ Mr. AUSTEN CHAMBERLAIN
Yes.

§ Sir RUFUS ISAACS
The objection to that is that you could not have the same Committee to inquire into the later as into the first part. You must have a different Committee. In the first, all you want is to set up a Committee of valuers, with someone to guide them as regards evidence in the questions that come before them. It would, in our view, be impossible to have that Committee dealing with questions which the right hon. Gentleman mentioned in the last part, because that is really an inquiry into the principles of the Act. You cannot have an inquiry into that.

§ Mr. AUSTEN CHAMBERLAIN
Into the facts?

§ Sir RUFUS ISAACS
So long as the inqiury is confined to the administration of the Valuation Claims of the Act it is well; and the right hon. Gentleman says that he does desire an inquiry into that. So long as the inquiry is confined to that, we are willing to submit terms which we shall try to agree upon with the right hon. Gentleman, but we certainly cannot go any further. What is desired is that there should be some inquiry as to whether in fact the valuers under the Act are carrying out the instructions that have been given to them, and whether the methods that are being employed are the proper methods to employ, under the Act. In order to ascertain that it would be quite useless to take an isolated case, and to deal with the subject-matter of that isolated case. You could not possibly do that because, supposing you proved 200 isolated instances, that number is really infinitesimal compared with the ten million valuations which are to be made. If 200 cases were presented—and this is quite serious criticism, for we have considered it very carefully, and I want the right hon. Gentleman to consider it—and their merits were generally inquired into, you would never arrive at a conclusion: it would be absolutely impossible. I defy anyone to show how you could arrive at a conclusion.
That Committee would be inquiring into the matter where there were 100 instances collected by the Land Union, and put 636 before the Committee and the Committee's inquiry into these could not be a satisfactory or conclusive answer. Suppose the Committee were to find that the majority of the instances brought before them by the Land Union showed that in these instances the valuations had not been satisfactory: that proves nothing; it only shows that in these particular instances there had been wrong application of such methods as would be proper under the Act. What everybody must desire to arrive at is to know something of value as to whether the instructions given and the methods employed are generally satisfactory, and in that way you arrive at a conclusion from one point of view from which you at least have something of use.

§ Mr. AUSTEN CHAMBERLAIN
How can the right hon. Gentleman ascertain that except by deciding as to methods in particular instances?

§ Sir RUFUS ISAACS
I do not think there is any real difficulty. I am objecting to isolated instances being brought forward as instances of general methods. What I am pointing out to the right hon. Gentleman is this: Supposing in a district where you have 10,000 valuations, the methods adopted are right and the Committee may think them right and proper though there may be two or three instances in which the methods have not been properly employed. The methods employed may be right but in certain isolated instances you may get wrong application. That is not the thing you want to inquire into by this Committee. I am sure the right hon. Gentleman would agree that must be right where you have an inquiry into the general valuation or for any other purpose. That is what I am anxious to make quite clear before we come to the consideration of what the terms of reference should be. I want to make one further observation which follows from what I have already said, and it is this, that the Committee is not to be constituted as a Court of Appeal. There is already the Court of Appeal in the Referees and the Courts of Justice, and nobody would desire to substitute the Committee for the Court of Referees or the Courts of Law. That really bears out what I have said, that so long as the inquiry is to be confined to the administration and instructions and methods, and is to report as to whether or not these methods are generally satisfactory, we are quite prepared to draft terms of reference and to submit them to the right hon. Gentleman 637 for his consideration and if possible we will agree upon them, but that is the extent to which we shall go in appointing the Committee. May I make one observation in answer to the hon. and gallant Gentleman's (Mr. Pretyman's) criticisms and to a question he put to me in reference to test cases in the Courts? So far as I know there are not many.

§ Mr. PRETYMAN
There are others in course of preparation.

§ Sir RUFUS ISAACS
I do not know, of course, what the future has in store for us, but supposing there is a test case and that it is decided that some wrongful method has been applied, I am quite certain I should be right in saying that on a proper application being made to the authorities based upon this test case technically showing the method was wrong I have no doubt that would be considered by the authorities, and effect given to it.

§ Mr. PRETYMAN
It is only fair to give an instance. Let us take one test case that was before the Referees and is now going to the Courts. That particular case referred to where land is given up for a road, and the Commissioners refused to make any allowance for it. That was brought before the Referees and the Referees decided allowance must be made. This case must affect thousands of others, and my point is where land is given up for roads if it is finally decided allowance must be made other cases can be put forward for allowance.

§ Sir RUFUS ISAACS
It is impossible to deal generally with a question of that kind. I agree that a fair case has only to be made out and an answer will be given to satisfy the hon. and gallant Gentleman and his Friends. I want to make one or two observations with reference to the general discussion Criticism was directed by the hon. and gallant Gentleman upon the Chancellor of the Exchequer for what he had said about the fall in the price of Consols and gilt-edged securities, but he failed to give credit to the right hon. Gentleman for the very full analysis he made to-night of the causes of that fall. Although hon. Members may not agree with him I think the Chancellor of the Exchequer gave us a most interesting and serious speech upon this matter. The right hon. Gentleman the Member for East Worcestershire said in his speech that he was dealing with this point apart from the responsibility of one Government or another, and asserted 638 that what he was anxious to do was to discuss the question on a much broader basis, and I think he did; and that is the way the question was dealt with by the Chancellor of the Exchequer to-night. There is, however, this difference, that the Chancellor of the Exchequer has been attacked and is attacked day by day with regard to this very matter, and responsibility for the fall ill gilt-edged securities is attempted to be placed upon his shoulders. The best argument in favour of that contention which the Leader of the Opposition could give was that he said although it was quite true, as had been pointed out by the Chancellor of the Exchequer, that the fall in the price of Consols was far greater in the years before the present Government came into power—[An HON. MEMBER: "That was due to the war."]—while the Unionist Government were in office, that was no answer to the criticisms and statements made that it is the policy of the Government and the general policy of the Chancellor of the Exchequer which have brought down the price of gilt-edged securities. That is a very interesting subject for investigation. The answer made by the Chancellor of the Exchequer was this: If my policy has brought gilt-edged securities down by nine points during the years I have been in office, how is it that during the years the Unionist party were in office they fell by eighteen points? What is the answer to that? It is a very difficult problem to solve. To my mind the only answer was that given by the right hon. Gentleman the Leader of the Opposition. He had to make the statement that during the time the Unionist Government was in power these gilt-edged securities were falling, but he added at the same time there was a world tendency for a fall in the securities of foreign Governments. If that were so it was a very powerful answer, I agree. If there was such a tendency the fall was not the fault of the Chancellor of the Exchequer or of the Government. But unfortunately for the right hon. Gentleman we challenge him on this statement as to the world tendency. I should have imagined that before he made a statement of that nature on his responsibility to the House he would have made some inquiry and satisfied himself that the facts which are so important and derive so much force when stated by him as the responsible Leader of the Opposition, were true, and that he was entitled to place them before the country. I assert that so far from their being true facts they are absolutely untrue.

639

§ Mr. BONAR LAW
I not only made the statement, but I gave figures at the same time. I referred to the fact that the German National Securities stood at about 80, and remained at the same price, while our stock fell by 9 points.

§ Sir RUFUS ISAACS
The right hon. Gentleman has completely missed my point. What I am pointing out—and in this the right hon. Gentleman agreed withme—that I had fairly stated his proposition—

§ Mr. BONAR LAW
I gave figures.

§ Sir RUFUS ISAACS
You gave figures dealing with the time when this Government came into power. The point I am dealing with is the period before that. That is the point on which the right hon. Gentleman made his observations, which would have been so forcible if they had been true. It was the one point I challenged him upon. Let me give the figures I have here. From the period1900–1906—

§ Mr. BONAR LAW
That is not the period.

§ Sir RUFUS ISAACS
When the right hon. Gentleman repeats that it is not the period, I again reply that he is missing the point of the criticism I am making. It is the contrast that has to be made. He says although it is quite true that Consols and gilt-edged securities fell very much during the years the Unionists were in power, yet that it was not in consequence of the action of that Government, and he sought to prove that by pointing to the world tendency to fall of other foreign Government securities. Let us see what the figures are. In 1900 the German Threes stood at 86½, Consols stood at 100. In 1906 German Threes stood at 89, a rise of 2½ points, while Consols stood at 90, a fall of 10 points. How in that case does the right hon. Gentleman prove his world tendency to fall?

§ Mr. BONAR LAW
The right hon. Gentleman is choosing a particular year, and is not giving the biggest fall. He takes the highest point under the Unionist Government, which was about the year 1906. We began at 1900.

§ Sir RUFUS ISAACS
I am taking a period of six years. The right hon. Gentleman for the purposes of his comparison gave the figures from 1906 to 1912. I am taking the preceding six years. I will 640 give him similar figures as regards France, except that there was a slight fall there of one point, whereas our Consols fell ten points.

§ Sir F. BANBURY
Because of the war.

§ Sir RUFUS ISAACS
If that is now the hon. Baronet's answer it is a very different one to that given by the Leader of the Opposition. I am dealing with the explanation of the right hon. Gentleman that there, was a world tendency to fall. [An HON. MEMBER: "From 1900."] I happen also to have the figures for Canada. Canadian Three per Cents, in December, 1898, stood at 103; in December, 1905, they stood at 99½, a fall of 3¾ per cent. From then to July they fell 9½ points. That has nothing to do with the policy of the right hon. Gentleman the the Chancellor of the Exchequer. The fall is infinitely greater when you are dealing with the years preceding these six years. I again ask where is the world tendency for securities to fall?

§ Sir F. BANBURY
The right hon. Gentleman has chosen Canadian Three per Cent. Stock, which is a small stock that for certain reasons stood at an exceptional price. Anyone with acquaintance of these stocks will confirm that.

§ Sir RUFUS ISAACS
I gave the figures for 1898 because I happened to have them, but I quote the figures relating to Germany and France as the best answer to the argument put forward by the right hon. Gentleman. He says British stocks are so weighted at the present moment that they are falling. But if you want evidence as to the prosperity of the country, surely it is well to look at its trade, and what do you find there? Undoubtedly as soon as confidence is impaired trade becomes bad. But let us apply that test. We know that our trade is increasing, and we know, too, that not only is the security of the country not decreasing and not deteriorating in any way, but that it is increasing. Let me prove that. You will find that the payments of Income Tax during the last year—1910–11— amount to £23.29 per head of population.
Take the total income upon which Income Tax was levied for 1900–1. It was £833,000,000, which gives an income of £20.24 per head of the population. In 1905–6 it was £925,000,000, or £21 and a half per head of the population. In 1910–11—after some years of a. Liberal Government—the total was £1,045,834,000, the income per 641 head of the population being £23.29; so that you have an increase in income per head of the population in those years during which it is said that the security of the country has been impaired. If you look at the unemployment statistics you will find that unemployment has never been lower than it is at present. In the year 1910 it was 3.7, in 1911 it was 3, and in June, 1912, it was 2½. I ask the House to consider how it is possible to say that the country is being ruined, and that the security of the country is so affected that trade is destroyed and confidence is destroyed, when you have these tests, which I should have thought were very valuable evidence to place not only before the House, but before the country, and upon which the country will be best able to judge what is the result of a Liberal Ministry?

§ Mr. GEORGE TERRELL
The Attorney-General has referred to the figures of Income Tax, but he has omitted to state that Income Tax is levied to-day on a totally different basis from what it was years ago. To-day an inquisition is held. A man's books are dragged out and he is made to account not only for every pennyworth of profit he has earned but he is disallowed losses of capital. Of course on a totally different basis of assessment you get totally different results. If you want to make a comparison you must compare like with like. The Attorney-General has referred to unemployment. We all know that the unemployment returns are simply the returns of the trade unions, and therefore I would not accept them, nor do I think anyone on this side would accept them without further inquiry. The Chancellor of the Exchequer has made a very poor and lame defence. He has used the old-fashioned lawyer's trick of abusing the other side when you have a bad case. There is not the slightest doubt that the real cause of the depreciation in our national securities which has occurred since the present Government have been in office is to a large extent political. The right hon. Gentleman has charged us with having misstated the facts to the constituencies. We have done nothing of the sort. We have stated that there was great depreciation consequent on the war, but the war was over by 1905, and naturally one expected a revival.
There was a trifling revival in spite of the fear of a Radical administration. Though we have had a period of peace since 1906 there has been con- 642 tinual depreciation, and it still continues day by day, this week the Consol market touching the lowest record. A new method of oppression has been proposed at the last by-election—at Hanley—namely that of the taxation of land values. Whether that was the cause of the return of the Radical candidate or not I cannot say, but at any rate it is a new method of taxation. It received a sort of blessing from the Chancellor of the Exchequer and the consequence was that immediately the result of the election was known in the City another record was struck in the Consol market. Of course one feels somewhat sorry for the Chancellor of the Exchequer who has to play to the gallery and who has to study his Socialist and Nationalist supporters in this House. The coalition government are always in difficulty—in fact they are being hunted and harried by their different supporters. They remind one of a picture which I believe is hanging in one of the galleries. I am told that the description in the catalogue is "A Tom cat with tallow legs being chased through Hades by an asbestos dog." I do not know whether the Chancellor of the Exchequer claims the position of the dog. Though we have had this heavy fall in our own securities it is noticeable that there has been no such fall in foreign securities, and particularly in French securities. Under those circumstances I am strongly opposed to the policy which the Chancellor of the Exchequer has advocated, and I shall go into the division lobby against him.

§ Mr. LLOYD GEORGE rose in his place, and claimed to move "That the Question be now put."

§ Mr. SPEAKER rose to put the Question "That the Question be now put."

§ Mr. HUNT
On a point of Order. May I not be allowed to speak?

§ Mr. SPEAKER was again about to put that Question.

§ Mr. HUNT
Can I have an answer?

§ Mr. SPEAKER
The hon. Gentleman will see from what the House decides.

§ Mr. HUNT
Is it your ruling that I am not to be allowed to speak?

§ Mr. SPEAKER
It is left to the House to decide.

§ Question put, "That the Question be now put."

§ The House divided: Ayes, 270; Noes, 216.

645

Division No. 149.]	AYES.	[12.36 a.m.
Abraham, William (Dublin Harbour)	Guest, Major Hon. C. H. C. (Pembroke	Muldoon, John
Acland, Francis Dyke	Gulland, John William	Munro, Robert
Addison, Dr. C.	Gwynn, Stephen Lucius (Galway)	Murray, Captain Hon. Arthur C.
Ainsworth, John Stirling	Hackett, John	Nannetti, Joseph P.
Allen, A. A. (Dumbartonshire)	Hall, Frederick (Normanton)	Needham, Christopher T.
Allen, Rt. Hon. Charles Peter (Stroud)	Hancock, J. G.	Neilson, Francis
Armitage, Robert	Harcourt, Rt. Hon. L. (Rossendale)	Nicholson, Sir Charles N. (Doncaster)
Arnold Sydney	Harmsworth, Cecil (Luton, Beds)	Nolan, Joseph
Baker, H. T. (Accrington)	Harmsworth, R. L. (Caithness-shire)	Norman, Sir Henry
Balfour, Sir Robert (Lanark)	Harvey, A. G. C. (Rochdale)	Norton, Captain Cecil W.
Barran, Sir J. N. (Hawick)	Harvey, T. E. (Leeds, W.)	Nugent, Sir Walter Richard
Barran, Rowland Hurst (Leeds, N.)	Harvey, W. E. (Derbyshire, N.E.)	Nuttall, Harry
Barton, William	Harwood, George	O'Brien, Patrick (Kilkenny)
Beauchamp, Sir Edward	Haslam, James (Derbyshire)	O'Connor, John (Kildare, N.)
Beck, Arthur Cecil	Haslam, Lewis (Monmouth)	O'Connor, T. P. (Liverpool)
Benn, W. W. (T. H'mts, St. George)	Havelock-Allan, Sir Henry	O'Doherty, Philip
Bentham, G. J.	Hayden, John Patrick	O'Donnell, Thomas
Bethell, Sir J. H.	Hayward, Evan	O'Dowd, John
Boland, John Pius	Hazleton, Richard	O'Kelly, Edward P. (Wicklow, W.)
Booth, Frederick Handel	Hemmerde, Edward George	O'Kelly, James (Roscommon, N.)
Bowerman, C. W.	Henry, Sir Charles	O'Malley, William
Boyle, D. (Mayo, N.)	Herbert, Col. Sir Ivor (Mon., S.)	O'Neill, Dr. Charles (Armagh, S.)
Brocklehurst, William B.	Higham, John Sharp	O'Shaughnessy, P. J.
Brunner, John F. L.	Hinds, John	O'Shee, James John
Bryce, J. Annan	Hobhouse, Rt. Hon. Charles E. H.	O'Sullivan, Timothy
Buckmaster, Stanley O.	Hogge, James Myles	Outhwaite, R. L.
Burke, E. Haviland.	Holmes, Daniel Turner	Palmer, Godfrey Mark
Burns, Rt. Hon. John	Holt, Richard Darning	Parker, James (Halifax)
Buxton, Noel (Norfolk, N.)	Horne, C. Silvester (Ipswich)	Pearce, Robert (Staffs, Leek)
Buxtoh, Rt. Hon. S. C. (Poplar)	Hudson, Walter	Pearce, William (Limehouse)
Carr-Gomm, H. W.	Hughes, Spenceh Leigh	Pease, Rt. Hon. Joseph A. (Rotherham)
Cawley, Sir Frederick (Prestwich)	Illingworth, Percy H.	Philipps, Col. Ivor (Southampton)
Cawley, H. T. (Lanes., Hey wood)	Isaacs, Rt. Hon. Sir Rufus	Phillips, John (Longford, S.)
Chancellor, Henry George	Jardine, Sir John (Roxburgh)	Pirie, Duncan Vernon
Churchill, Rt. Hon. Winston S	John, Edward Thomas	Pointer, Joseph
Clancy, John Joseph	Jones, Edgar (Merthyr Tydvil)	Ponsonby, Arthur A. W. H.
Clough, William	Jones, H. Haydn (Merioneth)	Power, Patrick Joseph
Collins, Godfrey P. (Greenock)	Jones, Leif Stratten (Notts, Rushcliffe	Price, C. E. (Edinburgh, Central)
Condon, Thomas Joseph	Jones, William (Carnarvonshire)	Priestley, Sir W. E. B. (Bradford, E.)
Cornwall, Sir Edwin A.	Jones, W. S. Glyn- (T. H'mts, Stepney	Primrose, Hon. Neil James
Cotton, William Francis	Jowett, Frederick William	Pringle, William M. R.
Craig, Herbert J. (Tynemouth)	Joyce, Michael	Radford, George Heynes
Crawshay-Williams, Eliot	Keating, Matthew	Raff an, Peter Wilson
Crooks, William	Kellaway, Frederick George	Raphael, Sir Herbert H.
Crumley, Patrick	Kelly, Edward	Rea, Rt. Hon. Russell (South Shields)
Cullinan, John	Kennedy, Vincent Paul	Reddy, Michael
Dalziel, Rt. Hon. Sir J. H. (Kirkcaldy)	Kilbride, Denis	Redmond, William (Clare, E.)
Davies, Ellis William (Eifion)	King, Joseph	Rendall, Athelstan
Davies, Timothy (Lincs., Louth)	Lambert, Rt. Hon. G. (Devon, S. Molton)	Richardson, Albion (Peckham)
Davies, Sir W. Howell (Bristol, S.)	Lambert, Richard (Wilts, Cricklade)	Roberts, Charles H. (Lincoln)
Dawes, James Arthur	Lardner, James Carrige Rushe	Roberts, G. H. (Norwich)
Delany, William	Law, Hugh A. (Donegal, West)	Roberts, Sir J. H. (Denbighs)
Denman, Hon. Richard Douglas	Lawson, Sir W. (Cumb'rld, Cockerm'th	Robertson, Sir G. Scott (Bradford)
Dewar, Sir J. A.	Levy, Sir Maurice	Robertson, John M. (Tyneside)
Dickinson, W. H.	Low, Sir Frederick (Norwich)	Roch, Walter F.
Donelan, Captain A.	Lundon, Thomas	Roche, John (Galway, E.)
Doris, William	Lynch, Arthur Alfred	Roche, Augustine (Louth)
Duffy, William	Macdonald, J. M. (Falkirk Burghs)	Rose, Sir Charles Day
Duncan, C. (Barrow-In-Furness)	Maclean, Donald	Rowlands, James
Duncan, J. Hastings (York, Otley)	Macnamara, Rt. Hon. Dr. T. J.	Russell, Rt. Hon. Thomas W.
Edwards, Sir Francis (Radnor)	MacNeill, John G. S. (Donegal, South)	Samuel, Rt. Hon. H, L. (Cleveland)
Elverston, Sir Harold	Macpherson, James Ian	Samuel, Sir Stuart M. (Whitechapel)
Esmonde, Dr. John (Tipperary, N.)	McGhee, Richard	Scanlan, Thomas
Esmonde, Sir Thomas (Wexford, N.)	M'Laren, Hon. F.W.S. (Lincs., Spalding)	Schwann, Rt. Hon. Sir Charles E.
Essex, Richard Walter	M'Laren, Hon. H. D. (Leics.)	Scott, A. MacCallum (Glas., Bridgeton)
Esslemont, George Birnie	M'Micking, Major Gilbert	Seely, Rt. Hon. Col. J. E. B.
Farrell, James Patrick	Manfield, Harry	Sheeny, David
Fenwick, Rt. Hon. Charles	Marks, Sir George Croydon	Shortt, Edward
Ferens, Rt. Hon. Thomas Robinson	Mason, David M. (Coventry)	Simon, Sir John Allsebrook
Ffrench, Peter	Masterman, Rt. Hon. C. F. G.	Smith, Albert (Lancs., Clitheroe)
Field, William	Meagher, Michael	Smith, H. B. Lees (Northampton)
Fitzgibbon, John	Meehan, Francis E. (Leitrim, N.)	Snowden, Philip
Flavin, Michael Joseph	Menzies, Sir Walter	Summers, James Woalley
Furness, Stephen	Middlebrook, William	Sutherland, John E.
George, Rt. Hon. D. Lloyd	Molloy, Michael	Sutton, John E.
Gill, Alfred Henry	Molteno, Percy Alport	Taylor, John W. (Durham)
Gladstone, W. G. C.	Money, L. G. Chiozza	Taylor, Theodore C. (Radcliffe)
Glanville, Harold James	Montagu, Hon. E. S.	Tennant, Harold John
Goddard, Sir Daniel Ford	Mooney, John J.	Thomas, J. H. (Derby)
Goldstone, Frank	Morgan, George Hay	Thorne, G. R. (Wolverhampton)
Greenwood, Granville G. (Peterborough)	Morison, Hector	Toulmin, Sir George
Greig, Colonel James William	Morrell, Philip	Ure, Rt. Hon. Alexander
Griffith, Ellis Jones	Morton, Alpheus Cleophas	Wadsworth, J.

644 645

Walsh, Stephen (Lanes., Ince)	White, Sir Luke (Yorks, E. R.)	Wilson, John (Durham, Mid)
Walton, Sir Joseph	White, Patrick (Meath, North)	Wilson, Rt. Hon. J. W. (Worcs., N.)
Ward, John (Stoke-upon-Trent)	Whitehouse, John Howard	Wilson, W. T. (Westhoughton)
Wardle, George J.	Whittaker, Rt. Hon. Sir Thomas P.	Wood, Rt. Hon. T. McKinnon (Glas.)
Warner, Sir Thomas Courtenay	Whyte, A. F. (Perth)	Young, William (Perth, East)
Wason, J. Cathcart (Orkney)	Wiles, Thomas
Webb, H.	Wilkie, Alexander	TELLERS FOR THE AYES.—Mr.
white, J. Dundas (Glasgow, Tradeston)	Williams, Penry (Middlesbrough)	Guest and Mr. Geoffrey Howard.

NOES.
Altken, Sir William Max	Fletcher, John Samuel (Hampstead)	Neville, Reginald J. N.
Amery, L. C. M. S.	Foster, Philip Staveley	Newdegate, F. A.
Amstruther-Gray, Major William	Gastrell, Major W. Houghton	Newman, John R. P.
Archer-Shee, Major M,	Glbbs, George Abraham	Newton, Harry Kottingham
Ashley, Wilfrid W.	Gilmour, Captain J.	Nicholson, William G. (Petersfield)
Astor, Waldorf	Glazebrook, Capt. Philip K.	Nleld, Herbert
Bagot, Lieut.-Colonel J.	Goldman, Charles Sidney	Norton-Griffiths, J.
Baird. J. L.	Goldsmith, Frank	O'Neill, Hon. A. E. B. (Antrim)
Baker, Sir Randolf L. (Dorset, N.)	Gordon, John (Londonderry, South)	Orde-Powlett, Hon. W. G. A.
Balcarres, Lord	Goulding, Edward Alfred	Paget, Almeric Hugh
Baldwin, Stanley	Grant, James Augustus	Peel, Capt. R. F. (Woodbridge)
Balfour, Rt. Hon. A. J. (City, Lond)	Greene, Walter Raymond	Peel, Hon. W. R. W. (Taunton)
Banner, John S. Harmood-	Gretton, John	Perkins, Walter Frank
Baring, Maj. Hon. Guy V. (Winchester)	Guinness, Hon. Rupert (Essex, S.E.)	Peto, Basil Edward
Barlow, Montague (Salford, South)	Guinness, Hon. W.E. (Bury S. Edmunds)	Pole-Carew, Sir R.
Barnston, H.	Gwynne, R. S. (Sussex, Eastbourne)	Pollock, E. M.
Barrie, H. T. (Londonderry, N.)	Haddock, George Bahr	Pretyman, Ernest George
Bathurst, Hon. A. B. (Glouc, E.)	Hall, D. B. (Isle of Wight)	Pryce-Jones, Col. E.
Bathurst, Charles (Wilts, Wilton)	Hall, Fred (Dulwich)	Quilter, Sir W. E. C.
Beach, Hon. Michael Hugh Hicks	Hambro, Angus Valdemar	Ratcliff, Major R. F.
Beckett, Hon. Gervase	Hamilton, Lord C. J. (Kensington)	Rawlinson, John Frederick Peel
Benn, Arthur Shirley (Plymouth)	Hamilton, Marquess of (Londonderry)	Rawson, Colonel Richard H.
Benn, Ion Hamilton (Greenwich)	Harris, Henry Percy	Rees, Sir J. D.
Beresford, Lord Charles	Helmsley, Viscount	Remnant, James Farquharson
Bigland, Alfred	Henderson, Major H. (Berkshire)	Roberts, S. (Sheffield, Ecclesall)
Bird, Alfred	Herbert, Hon. A. (Somerset, S.)	Ronaldshay, Earl of
Boles, Lieut.-Col. Dennis Fortescue	Hickman, Col. Thomas E.	Rothschild, Lionel de
Boscawen, Sir Arthur S. T. Griffith-	Hill, Sir Clement L.	Rutherford, John (Lanes., Darwen)
Boyton, James	Hills, John Waller (Durham)	Rutherford, Watson (L'pool, W. Derby)
Brassey, H. Leonard Campbell	Hoare, Samuel John Gurney	Salter, Clavell
Bridgeman, William Clive	Hohler, Gerald Fitzroy	Samuel, Sir Harry (Norwood)
Bull, Sir Wiliam James	Hope, Harry (Bute)	Sanders, Robert Arthur
Burdett-Coutts, William	Hope, James Fitzalan (Sheffield)	Sanderson, Lancelot
Burn, Colonel C. R.	Horne, E. (Surrey, Guildford)	Sandys, G. J. (Somerset, Wells)
Butcher, John George	Horner, Andrew Long	Sassoon, sir Philip
Campbell, Captain Duncan F. (Ayr, N.)	Hunt, Rowland	Scott, Sir S. (Marylebone, W.)
Campbell, Rt. Hon. J. (Dublin Univ.)	Ingleby, Holcombe	Smith, Rt. Hon. F. E. (L'p'I, Walton)
Carlile, Sir Edward Hildred	Jackson, Sir John	Smith, Harold (Warrington)
Carson, Rt. Hon. Sir Edward H.	Jardine, Ernest (Somerset, E.)	Spear, Sir John Ward
Cassel, Felix	Jessel, Captain Herbert M.	Stanley, Hon. Arthur (Ormskirk)
Castlereagh, Viscount	Kerr-Smiley, Peter Kerr	Stanley, Hon. G. F. (Preston)
Cator, John	Kerry, Earl of	Star key, John Ralph
Cautley, Henry Strother	Keswick, Henry	Stewart, Gershom
Cecil, Evelyn (Aston Manor)	Kimber, Sir Henry	Swift, Rigby
Cecil, Lord Hugh (Oxford University)	Kinloch-Cooke, Sir Clement	Sykes, Alan John (Ches., Knutsford)
Cecil, Lord Robert (Herts, Hitchin)	Kyffin-Taylor, G.	Talbot, Lord Edmund
Chaloner, Col. R. G. W.	Lane-Fox, G. R.	Terrell, George (Wilts., N.W.)
Chamberlain, Rt. Hon. J. A. (Worc'r.)	Law, Rt. Hon. A. Bonar (Bootle)	Terrell, Henry (Gloucester)
Chaplin, Rt. Hon. Henry	Lawson, Hon. H. (T. H'mts., Mile End)	Thompson, Robert (Belfast, North)
Clay, Captain H. H. Spender	Lewisham, Viscount	Thomson, W. Mitchell- (Down, N.)
Clive, Captain Percy Archer	Lloyd, G. A.	Tryon, Captain George Clement
Coates, Major Sir Edward Feetham	Locker-Lampson, G. (Salisbury)	Tullibardine, Marquess of
Callings, Rt. Hon. J.	Locker-Lampson, O. (Ramsey)	Valentia, Viscount
Craig, Captain James (Down, E.)	Lockwood, Rt. Hon. Lt.-Col. A. R.	Walker, Col. William Hall
Craig, Norman (Kent, Thanet)	Long, Rt. Hon. Walter	Ward, A. S. (Herts, Watford)
Cralk, Sir Henry	Lonsdale, Sir John Brownlee	Warde, Col. C. E. (Kent, Mid)
Crichton-Stuart, Lord Ninian	Lowe, Sir F. W. (Birm., Edgbaston)	Weigall, Captain A. G.
Croft, Henry Page	Lowther, Claude (Cumberland, Eskdale)	Wheler, Granville C. H.
Dalrymple, Viscount	Lyttelton Rt. Hon. A. (St. Geo., Han. S.)	White, Major G. D. (Lanes., Southport
Dalziel, Davison (Brixton)	Lyttelton, Hon. J. C. (Droitwich)	Willoughby, Major Hon. Claud
Denniss, E. R. B.	MacCaw, Wm. J. MacGeagh	Wolmer, Viscount
Dickson. Rt. Hon. C. Scott	Mackinder, Halford J.	Wood, Hon. E. F. L. (Yorks, Ripon)
Dixon, Charles Harvey	Macmaster, Donald	Wood, John (Stalybridge)
Doughty, Sir George	McNeill, Ronald (Kent, St. Augustine's)	Worthington-Evans, L.
Duke, Henry Edward	Magnus, Sir Philip	Wright, Henry Fitzherbert
Eyres-Monsell, Bolton M.	Malcolm, Ian	Wyndham, Rt. Hon. George
Faber, George Denison Clapham)	Mason, James F. (Windsor)	Yate, Col. C. E.
Faber, Capt. W. V. (Hants, W.)	Meysey-Thompson, E. C.	Yerburgh, Robert
Falle, Bertram Godfray	Mildmay, Francis Bingham
Fell, Arthur	Mills, Hon. Charles Thomas
Finlay, Rt. Hon. Sir Robert	Moore, William	TELLERS FOR THE NOES.—Sir
Fisher, Rt. Hon. W. Hayes	Morrison-Bell, Major A. C. (Honiton)	Frederick Banbury and Earl
Flannery, Sir J. Fortescue	Morrison-Bell, Capt. E. F. (Ashburton)	Winterton.
Fleming, Valentine	Mount, William Arthur

647

§ Question put accordingly, "That the Bill be now read a second time."

648

§ The House divided: Ayes, 269; Noes, 221.

651

Division No. 150.]	AYES.	[12.47 a.m.
Abraham, William (Dublin Harbour)	Goddard, Sir Daniel Ford	Middlebrook, William
Acland, Francis Dyke	Goldstone, Frank	Molloy, Michael
Addison, Dr. C.	Greenwood, Granville G. (Peterborough)	Molteno, Percy Alport
Ainsworth, John Stirling	Greig, Colonel James William	Money, L. G. Chiozza
Allen, A. A. (Dumbartonshire)	Griffith, Ellis Jones	Montagu, Hon. E. S.
Allen, Rt. Hon. Charles Peter (Stroud)	Guest, Major Hon. c. H. C. (Pembroke)	Mooney, John J.
Armitage, Robert	Guiland, John William	Morgan, George Hay
Arnold, Sydney	Gwynn, Stephen Lucius (Galway)	Morison, Hector
Baker, H. T. (Accrington)	Hackett, John	Morrell, Philip
Balfour, Sir Robert (Lanark)	Hall, Frederick (Normanton)	Morton, Alpheus Cleophas
Barran, Sir J. N. (Hawick)	Hancock, J. G.	Muldoon, John
Barran, Rowland Hurst (Leeds, N.)	Harcourt, Rt. Hon. L. (Rossendale)	Munro, Robert
Barton, William	Harmsworth, Cecil (Luton, Beds)	Murray, Captain Hon. Arthur C.
Beauchamp, Sir Edward	Harmsworth, R. L. (Caithness-shire)	Nannettl, Joseph P.
Beck, Arthur Cecil	Harvey, A. G. C. (Rochdale)	Needham, Christopher
Benn, W. W. (T. H'mts, St. George)	Harvey, T. E. (Leeds, West)	Neilson, Francis
Bentham, G. J.	Harvey, W. E. (Derbyshire, N.E.)	Nicholson, Sir Charles N. (Doncaster)
Bethell, Sir J. H.	Harwood, George	Nolan, Joseph
Boland, John Plus	Haslam, James (Derbyshire)	Norman, Sir Henry
Booth, Frederick Handel	Hasiam, Lewis (Monmouth)	Norton, Captain Cecil W.
Bowerman, C. W.	Havelock-Allan, Sir Henry	Nugent, Sir Walter Richard
Boyle, Daniel (Mayo, North)	Hayden, John Patrick	Nuttall, Harry
Brocklehurst, Wiliam B.	Hayward, Evan	O'Brien, Patrick (Kilkenny)
Brunner, John F. L.	Hazleton, Richard (Galway, N.)	O'Connor, John (Kildare, N.)
Bryce, J. Annan	Hemmerde, Edward George	O'Connor, T. p. (Liverpool)
Buckmaster, Stanley O.	Henry, Sir Charles	O'Doherty, Philip
Burke, E. Haviland-	Herbert, Col. Sir Ivor (Mon., S.)	O'Donnell, Thomas
Burns, Rt. Hon. John	Higham, John Sharp	O'Dowd, John
Buxton, Noel (Norfolk, North)	Hinds, John	O'Kelly, Edward P. (Wicklow, W.)
Buxton, Rt. Hon. S. C. (Poplar)	Hobhouse, Rt. Hon. Charles E. H.	O'Kelly, James (Roscommon, N.)
Carr-Gomm, H. W.	Hogge, James Myles	O'Malley, William
Cawley, Sir Frederick (Prestwich)	Holmes, Daniel Turner	O'Neill, Dr. Charles (Armagh, S.)
Cawley, Haroid T. (Heywood)	Holt, Richard Durning	O'Shaughnessy, P. J.
Chancellor, Henry George	Home, Charles Silvester (Ipswich)	O'Shee, James John
Churchill, Rt. Hon. Winston S.	Hudson, Walter	O'Sullivan, Timothy
Clancy, John Joseph	Hughes, Spencer Leigh	Outhwaite, R. L.
Clough, William	Illingworth, Percy H.	Palmer, Godfrey Mark
Collins, Godfrey P. (Greenock)	Isaacs, Rt. Hon. sir Rufus	Parker, James (Halifax)
Condon, Thomas Joseph	Jardine, Sir J. (Roxburgh)	Pearce, Robert (Staffs, Leek)
Cornwall, Sir Edwin A.	John, Edward Thomas	Pearce, William (Limehouse)
Cotton, William Francis	Jones, Edgar R. (Merthyr Tydvil)	Pease, Rt. Hon. Joseph A. (Rotherham)
Craig, Herbert J. (Tynemouth)	Jones, H. Haydn (Merioneth)	Philipps, Col. Ivor (Southampton)
Crawshay-Williams, Eliot	Jones, Leif Straiten (Notts, Rushcliffe)	Phillips, John (Longford S.)
Crooks, William	Jones, William (Carnarvonshire)	Pirie, Duncan Vernon
Crumley, Patrick	Jones, W. S. Glyn- (Stepney)	Pointer, Joseph
Cullinan, John	Jowett, Frederick William	Ponsonby, Arthur A. W. H.
Dalziel, Rt. Hon. Sir J. H. (Kirkcaldy)	Joyce, Michael	Power, Patrick Joseph
Davies, E. William (Eifion)	Keating, Matthew	Price, C. E. (Edinburgh, Central)
Davies, Timothy (Lines., Louth)	Kellaway, Frederick George	Priestley, Sir W. E. B. (Bradford, E.)
Davies, Sir W. Howell (Bristol, S.)	Kelly, Edward	Primrose, Hon. Neil James
Dawes, J. A.	Kennedy, Vincent Paul	pringle, William M. R.
Delany, William	Kilbride, Denis	Radford, George Heynes
Denman, Hon. R. D.	King, Joseph	Raffan, Peter Wilson
Dewar, Sir J. A.	Lambert, Rt. Hon. G. (Devon, S. Molton)	Raphael, Sir Herbert H.
Dickinson, W. H.	Lambert, Richard (Wilts, Cricklade)	Rea, Rt. Hon. Russell (South Shields)
Donelan, Captain A.	Lardner, James Carrige pushe	Reddy, Michael
Doris, William	Law,'Hugh A. (Donegal, West)	Redmond, William (Clare, E.)
Duffy, William J.	Lawson, Sir W. (Cumb'rld, Cockerm'th)	Rendall, Athelstan
Duncan, C. (Barrow-in-Furness)	Levy, Sir Maurice	Richardson, Albion (Peckham)
Duncan, J. Hastings (York, Otley)	Low, Sir Frederick (Norwich)	Roberts, Charles H. (Lincoln)
Edwards, Sir Francis (Radnor)	Lundon, Thomas	Roberts, George H. (Norwich)
Elverston, Sir Harold	Lynch, Arthur Alfred	Roberts, Sir J. H. (Denbighs)
Esmonde, Dr. John (Tipperary, N.)	Macdonald, J. M. (Falkirk Burghs)	Robertson, Sir G. Scott (Bradford)
Esmonde, Sir Thomas (Wexford, N.)	Maclean, Donald	Robertson, John M. (Tyneside)
Essex, Richard Walter	Macnamara, Rt. Hon. Dr. T. J.	Roch, Walter F. (Pembroke)
Esslemont, George Birnie	MacNeill, John G. S. (Donegal, South)	Roche, John (Galway, E.)
Farrell, James Patrick	Macpherson, James Ian	Roche, Augustine (Louth)
Fenwick, Rt. Hon. Charles	McGhee, Richard	Rose, Sir Charles Day
Ferens, Rt. Hon. Thomas Robinson	M'Laren, Hon. F.W.S. (Lines., Spalding)	Rowlands, James
Ffrench, Peter	M'Laren, Hon. H. D. (Leics.)	Russell, Rt. Hon. Thomas W.
Field, William	M'Micking, Major Gilbert	Samuel, Rt. Hon. H. L. (Cleveland)
Fitzgibbon, John	Manfield, Harry	Samuel, Sir Stuart M. (Whitechapel)
Flavin, Michael Joseph	Marks, Sir George Croydon	Scanlan, Thomas
Furness, Stephen	Mason, David M. (Coventry)	Schwann, Rt. Hon. Sir Charles E.
George, Rt. Hon, D. Lloyd	Masterman, Rt. Hon. C. F. G.	Scott, A. MacCallum (Glas., Bridgeton)
Gill, Alfred Henry	Meagher, Michael	Seely, Col. Rt. Hon. J. E. B.
Gladstone, W. G. C.	Meehan, Francis E. (Leitrim)	Sheehy, David
Glanville, Harold James	Menzies, Sir Walter	Shortt, Edward
Simon, Sir John Allsebrook	Wadsworth, J.	Whyte, A. F.
Smith, Albert (Lanes., Clitheroe)	Walsh, Stephen (Lanes., Ince)	Wiles, Thomas
Smith, H. B. Lees (Northampton)	Walton, Sir Joseph	Wilkie, Alexander
Summers, James Woolley	Ward, John (Stoke-upon-Trent)	Williams, Penry (Middlesbrough)
Sutherland, John E.	Wardle, George J.	Wilson, john (Durham, Mid)
Sutton, John E.	Warner, Sir Thomas Courtenay	Wilson, Rt. Hon. J. W. (Worcs., N.)
Taylor, John W, (Durham)	Wason, John Cathcart (Orkney)	Wilson, W. T. (Westhoughton)
Taylor, T. C. (Radcliffe)	Webb, H.	Wood, Rt. Hon. T. McKinnon (Glasgow
Tennant, Harold John	White, J. Dundas (Glas., Tradeston	Young, William (Perth, East)
Thomas, J. H. (Derby)	White, Sir Luke (Yorks, E.R.)
Tlorne, G. R. (Wolverhampton)	White, Patrick (Meath, North)	TELLERS FOR THE AYES.—Mr.
Toulmin, Sir George	Whitehouse, John Howard	Guest and Mr. Geoffrey Howard.
Ure Rt. Hon. Alexander	Whittaker, Rt. Hon. Sir Thomas P.
NOES.
Agg-Gardner, James Tynte	Eyres-Monsell, Bolton M.	Lyttelton, Hon. J. C. (Droitwich)
Aitken, Sir William Max	Faber, George D. (Clapham)	MacCaw, Wm. J. MacGeagh
Amery, L. C. M. S.	Faber, Captain W. V. (Hants, W.)	Mackinder, Halford J.
Anstruther-Gray, Major William	Falle, Bertram Godfray	Macmaster, Donald
Archer-Shee, Major M.	Fell, Arthur	McNeill, Ronald (Kent, St. Augustine's)
Ashley, Wilfrid W.	Finlay, Rt. Hon. Sir Robert	Magnus, Sir Philip
Astor, Waldorf	Fisher, Rt. Hon. W. Hayes	Malcolm, Ian
Bagot, Lieut.-Colonel J.	Fitzroy, Hon. Edward A.	Mason, James F. (Windsor)
Baird, John Lawrence	Flannery, Sir James Fortescue	Meysey-Thompson, E. C.
Baker, Sir Randolf L. (Dorset, N.)	Fleming, Valentine	Mills, Hon. Charles Thomas
Balcarres, Lord	Fletcher, John Samuel	Moore, William
Baldwin, Stanley	Foster, Philip Stavoley	Morrison-Bell, Capt. E. F. (Ashburton)
Balfour, Rt. Hon. A. J. (City, Lond)	Gastrell, Major W. Houghton	Morrison-Bell, Major A. C. (Honiton)
Banbury, Sir Frederick George	Gibbs, G. A.	Mount, William Arthur
Banner, John S. Harmood-	Gilmour, Captain John	Neville, Reginald J. N.
Baring, Maj. Hon. Guy V. (Winchester)	Glazebrook, Capt. Philip K.	Newdegate, F. A.
Barlow, Montague (Salford, South)	Goldman, Charles Sidney	Newman, John R. p.
Barnston, Harry	Goldsmith, Frank	Newton, Harry Kottingham
Barrie, H. T. (Londonderry, N.)	Gordon, Hon. John Edward (Brighton)	Nicholson, William G. (Petersfield)
Bathurst, Hon. A. B. (Glouc, E.)	Goulding, Edward Alfred	Norton-Griffiths, J.
Bathurst, Charles (Wilts, Wilton)	Grant, J. A.	O'Neill, Hon. A. E. B. (Antrim, Mid)
Beach, Hon. Michael Hugh Hicks	Greene, Walter Raymond	Orde-Powlett, Hon. W. G. A.
Beckett, Hon. Gervase	Gretton, John	Paget, Almeric Hugh
Benn, Arthur Shirley (Plymouth)	Guinness, Hon. Rupert (Essex, S.E.)	Pease, Herbert Pike (Darlington)
Benn, Ion Hamilton (Greenwich)	Guinness, Hon. W.E. (Bury S. Edmunds)	Peel, Capt. R. F. (Woodbridge)
Beresford, Lord Charles	Gwynne, R. S. (Sussex, Eastbourne)	Peel, Hon. W. R. W. (Taunton)
Bigland, Alfred	Haddock, George Bahr	Perkins, Walter Frank
Bird, Alfred	Hall, D. B. (Isle of Wight)	Peto, Basil Edward
Boles, Lieut.-Col. Dennis Fortescue	Hall, Fred (Dulwich)	Pole-Carew, Sir R.
Boscawen, sir Arthur S. T. Griffith-	Hambro, Angus Valdemar	Pollock, Ernest Murray
Boyle, W. Lewis (Norfolk, Mid)	Hamilton, Lord' C. J. (Kensington)	Pretyman, Ernest George
Boyton, James	Hamilton, Marquess of (Londonderry)	Pryce-Jones, Colonel E.
Brassey, H. Leonard Campbell	Harris, Henry Percy	Quitter, Sir W. E. C.
Bridgeman, William Clive	Helmsley, Viscount	Ratcliff, Major R. F.
Bull, Sir William James	Henderson, Major H. (Berkshire)	Rawlinson, John Frederick Peel
Burdett-Coutts, William	Herbert, Hon. A. (Somerset, S.)	Rawson, Colonel Richard H.
Burn, Colonel C. R.	Hickman, Col. Thomas E.	Rees, Sir J. D.
Butcher, John George	Hill, Sir Clement L.	Remnant, James Farquharson
Campbell, Capt. Duncan F. (Ayr, N.)	Hills, John Waller	Roberts, S. (Sheffield, Ecclesall)
Campbell, Rt. Hon. J. (Dublin Univ.)	Hoare. Samuel John Gurney	Ronaldshay, Earl of
Carlile, Sir Edward Hildred	Hohler, Gerald Fitzroy	Rothschild, Lionel de
Carson, Rt. Hon. Sir Edward H.	Hope, Harry (Bute)	Rutherford, John (Lancs., Darwen)
Cassel, Felix	Hope, James Fitzalan (Sheffield)	Rutherford, Watson (L'pool, W. Derby)
Castlereagh, Viscount	Home, Edgar (Surrey, Guildford)	Salter, Arthur Clavell
Cator, John	Horner, Andrew Long	Samuel, Sir Harry (Norwood)
Cautley, Henry Strother	Hunt, Rowland	Sanders, Robert Arthur
Cecil, Evelyn (Aston Manor)	Jackson, Sir John	Sanderson, Lancelot
Cecil, Lord Hugh (Oxford University)	Jardine, Ernest (Somerset, East)	Sandys, G. J. (Somerset, Wells)
Cecil, Lord R. (Herts, Hitchin)	Jessel, Captain Herbert M.	Sassoon, Sir Philip
Chaloner, Col. R. G. W.	Kerr-Smiley, Peter Kerr	Scott, Sir S. (Marylebone, W.)
Chamberlain, Rt. Hon. J. A. (Worc'r.)	Kerry, Earl of	Smith, Rt. Hon. F. E. (L'p'I, Walton)
Chaplin, Rt. Hon. Henry	Keswick, Henry	Smith, Harold (Warrington)
Clay, Captain H. H. Spender	Klmber, sir Henry	Spear, Sir John Ward
Clive, Captain Percy Archer	Kinloch-Cooke, Sir Clement	Stanley, Hon. Arthur (Ormskirk)
Coates, Major Sir Edward Feetham	Kyffin-Taylor, G.	Stanley, Hon. G. F. (Preston)
Codings, Rt. Hon. J.	Lane-Fox, G. R.	Starkey, John Ralph
Craig, Captain James (Down, E.)	Law, Rt. Hon. A. Bonar (Bootle)	Stewart, Gershom
Craig, Norman (Kent, Thanet)	Lawson, Hon. H. (T. H'mts., Mile End)	Swift, Rigby
Craik, Sir Henry	Lewisham, Viscount	Sykes, Alan John (Ches., Knutsford)
Crichton-Stuart, Lord Ninlan	Lloyd, George Ambrose	Talbot, Lord E.
Croft, H. P.	Locker-Lampson G. (Salisbury)	Terrell, G. (Wilts, N. W.)
Dalrymple, Viscount	Locker-Lampson, O. (Ramsey)	Terrell, Henry (Gloucester)
Dalziel, Davison (Brixton)	Lockwood, Rt. Hon. Lt.-Col. A. R.	Thompson, Robert (Belfast, North)
Denniss, E. R. B.	Long, Rt. Hon. Walter	Thomson, W. Mitchel- (Down, N.)
Dickson, Rt. Hon. C. Scott	Lonsdale, Sir John Brownlee	Tryon, Captain George Clement
Dixon, Charles Harvey	Lowe, Sir F. W. (Birm., Edgbaston)	Tullibardine, Marquess of
Doughty, Sir George	Lowther, Claude (Cumberland, Eskdale)	Valentia, Viscount
Duke, Henry Edward	Lyttelton, Rt. Hon. A. (S. Geo., Han. S.)	Walker, Colonel William Hall

650

651

Ward, A. S. (Herts, Watford)	Winterton, Earl	Wyndham, Rt. Hon. George
Warde, Col. C. E. (Kent, Mid)	Wolmer, Viscount	Yate, Col. C. E.
Weigall, Capt. A. G.	Wood, Hon. E. F. L. (Yorks, Ripon)	Yerburgh, Robert
Wheeler, Granville C. H.	Wood, John (Stalybridge)
White, Major G. D. (Lancs., Southport)	Worthington-Evans, L.	TELLERS FOR THE NOES.—Mr.
Williams, Col. R. (Dorset, W.)	Wortley, Rt. Hon. C. B. Stuart-	Ingleby and Mr. Mildmay.
Willoughby, Major Hon. Claud	Wright, Henry Fitzherbert

Bill read a second time, and committed to a Standing Committee.