Lords Sitting of 26 June 1905

The Lord Harlech sat first in Parliament after the death of his father.

PRIVATE BILL BUSINESS
The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificates from the Examiners that the further Standing Orders applicable to the following Bills have been complied with:—Midland Railway; North-Eastern Railway; Worcestershire County Council (Bridges); Bootle Corporation: Caledonian Railway
Also the Certificate that the Standing Orders applicable to the following Bill have been complied with:—Local Government (Ireland) Provisional Orders (No. 4).
And also the Certificates that the further Standing Orders applicable to the following Bills have not been complied with:—Newry, Keady, and Tynan Light Railway; London County Council General Powers).
The same were ordered to lie on the Table.
North-Eastern Railway Bill. Report from His Majesty's Attorney-General received, and ordered to lie on the Table.
London County Council (General Powers) Bill; Newry, Keady, and Tynan Light Railway Bill. Examiner's Certificates of non-compliance with the Standing Orders referred to the Standing Orders Committee on Friday next.
Rhymney and Aber Valleys Gas and Water Company Bill [H. L.]. Committed.
Andover Lighting and Power Bill. The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn. The orders made

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on the 22nd of May last and the 8th instant discharged, and Bill committed.
Skegness Water Bill. Read 2a, and committed.
Bolton Corporation Bill; North-Eastern Railway (Steam Vessels) Bill. Read 2a, and committed. The Committees to be proposed by the Committee of Selection.
Earl of Stamford's Cheshire Estate Bill [H. L.]. Read 2a.
Bristol Blind Asylum Bill [H. L.]; Central Electric Supply Bill [H. L.]. Read 3a, and passed, and sent to the Commons.
County of London Electric Supply Company Bill [H. L.]. Read 3a. Amendments made. Bill passed, and sent to the Commons.
Humber Conservancy Bill [H. L.]. Read 3a, and passed, and sent to the Commons.
London United Tramways (Extension of Time) Bill. Read 3a, and passed.
Great Northern Railway Bill. Read 3a, with the Amendments, and passed, and returned to the Commons.
Highland Railway Bill. Read 3a, with the Amendment, and passed, and returned to the Commons.
North British Railway (General Powers) Bill; Shropshire, Worcestershire, and Staffordshire Electric Power Bill; Great Northern Railway (Ireland) Bill; London County Council (Money) Bill; Metropolitan Electric Tramways Bill. Brought from the Commons; read la; and referred to the Examiners.
Alexandra Park and Palace Bill [H. L.]; Metropolitan Railway Bill [H. L.]. Re-turned from the Commons agreed to.
Barry Railway Bill [H. L.]. Returned from the Commons agreed to, with an Amendment. The said Amendment considered, and agreed to.
Clacton Improvement Bill [H. L.]; Dearne Valley Railway Bill [H. L.].
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Returned from the Commons agreed to with Amendments. The said Amendments considered, and agreed to.
Croydon Corporation Bill; Stockport Corporation Bill; Birmingham Corporation Bill; Brentwood Gas Bill. Returned from the Commons with the Amendments agreed to.
Donovan's Divorce Bill [H. L.]. Message from the Commons for copy of the Minutes of Evidence taken before the House; together with the proceedings and the documents deposited in the Cases. Ordered to be communicated with a request that they may be returned.
Electric Lighting Provisional Orders (No. 7) Bill; Local Government Provisional Orders (No. 9) Bill. House in Committee (according to order). Bills reported without Amendment. Standing Committee negatived; and Bills to be read 3a Tomorrow.
Municipal Corporations (Merthyr Tydfil Scheme Confirmation) Bill [H. L.]. Commons Amendments considered (according to order), and agreed to.
Local Government Provisional Orders (No. 11) Bill. Read 2 (according to order), and committed. The Committee to be proposed by the Committee of Selection.
Local Government Provisional Orders No. 15) Bill. Read 2a (according to order), and committed to a Committee of the Whole House Tomorrow.
Education Board Provisional Order Confirmation (London No. 1) Bill [H. L.]; Gas and Water Orders Confirmation (No. 1) Bill [H. L.]; Gas and Water Orders Confirmation (No. 2) Bill [H. L.]. Read 3a (according to order), and passed, and sent to the Commons.
Electric Lighting Provisional Orders (No. 8) Bill [H. L.]. Amendments reported (according to order), and Bill to be read 3a Tomorrow.
Local Government (Ireland) Provisional Orders (No. 3) Bill; Local Government Provisional Order (Gas) Bill; Local Government Provisional Orders (No. 6),

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Bill; Local Government Provisional Orders (No. 7) Bill. Read 3a (according to order), and passed.

PETITION.
  LICENSED HOUSES.
  Petition for earlier closing of; persons signing; read, and ordered lie on the Table.

  PARLIAMENTARY PAPERS (RECESS).
  The LORD CHANCELLOR The LORD CHANCELLOR acquainted the House, That the following Papers, having been commanded to be presented to this House by His Majesty, had been so presented on the following dates by delivery to the Clerk of the Parliaments, pursuant to Standing Order No. CXI., viz.;
  Churches (Scotland) Bill. Return of extracts from Acts of the Parliaments of Scotland, relating to the Church of Scotland, passed in the years 1690, 1693, and 1707, showing the repeals in the Acts of 1693 and 1707 proposed by the Churches (Scotland) Bill. (June 9.)

  TRADE REPORTS.
  I. (Annual Series)—
  No. 3398. United States (Philadelphia).
  No. 3399. Austria-Hungary. (June 9.)
  No. 3400. Guatemala (Quezaltenango).
  No. 3401. United States (New Orleans).
  No. 3402. Germany (Grand Duchy of Baden).
  No. 3403. Netherlands (Java). (June 14.)
  No. 3404. Denmark (Faroe Islands). (June 15.)
  No. 3405. Japan (North Formosa). (June 16.)
  No. 3406. Western Pacific (Friendly Islands).
  No. 3407. Corea. (June 17.)
  No. 3408. Persia (the Persian Gulf).
  No. 3409. France (Lyons, St. Etienne and Grenoble). (June 20.)
  No. 3410. Turkey (Palestine).
  No. 3411. Spain (Galicia, Asturias, and Leon).
  No. 3412. Sweden (Stockholm and the Eastern Coast of Sweden).
  No. 3413. France (Dunkirk). (June 21.)
  No. 3414. Spain (Cadiz)
  No. 3415. Muskat. (June 23.)
  No. 3416. Italy (Central Italy).
  No. 3417. Austria-Hungary (Fiume). (June 24.)
  II. Index to Reports of His Majesty's Diplomatic and Consular representatives abroad on trade and subjects of general interest (with Appendix), 1904. (June 21.)
  Factory and Workshop. Annual Report of the chief inspector of factories and workshops, for the year 1904. Part I. Reports. (June 14.)
  Historical Manuscripts (Royal Commission). Report on manuscripts of the Earl of Egmont. Vol. I., Part II. (June 14.)
  Colonies (Annual)—
  No. 448. St. Helena (Report for 1904). (June 14.)
  No. 449. Falkland Islands (Report for 1904). (June 21.)
  Commercial, No. 3 (1905). International Sugar Commission (Spring Session, 1905). Report of British delegate and correspondence (in continuation of "Commercial, No. 1 (1905)," [Cd. 2349]). (June 14.)
  London Unemployed Fund. Preliminary statement (as on the 14th of April, 1905), prepared at the request of the "President of the Local Government Board by the Central Executive Committee. (June 14.)
  Treaty Series—
  No. 16 (1905). Convention between the United Kingdom and Switzerland supplementing Article XVIII. of the Treaty of Extradition of 26th November, 1880; signed at London, 29th June, 1904. (June 15.)
  No. 17 (1905). Industrial Property Convention. Accession of New Zealand to the additional Act of 14th December, 1900; and Accession of Ceylon to the Convention of 1883, as modified by the additional Act of 14th December, 1900. (June 24.)
  Education (Scotland). Thirty-second annual Report by the Accountant for Scotland to the Scotch Education Department. (June 15.)
  Board of Education—
  I. (Training College Regulations). Regulations for the training of teachers and for the examination of students in training colleges. (June 16.)
  II. (Regulations for Evening Schools, etc.). Regulations for evening schools, technical institutions, and schools of art and art classes (from 1st August, 1905, to 31st July, 1906). (June 20.)
  III. (Amending Order, No. 2)., Order amending Final Order, No. 1130, made under Section 11 (8) of the Education Act, 1902.
  IV. (Code for Public Elementary Schools (1905)). Code of regulations for public elementary schools, with schedules, 1905. (June 22.)
  Salvation Army Colonies. Report on the Salvation Army Colonies in the United States and at Hadleigh, England, with scheme of National Land Settlement, by Commissioner H. Rider Haggard. (June 17.)
  India (Army Administration). Correspondence regarding the administration of the Army in India. (June 20.)
  Navy (Hydrographer's Report). Report on Admiralty Surveys for the year 1904, by the Hydrographer. (June 21.)
  Navy Estimates, 1904–1905 (Programme of Shipbuilding, Reconstruction, Repairs, Maintenance, etc.). Statement showing the probable effect on the programme due to reappropriation of cash provision, etc. (June 21.)
  Railway Accidents. Returns of accidents and casualties as reported to the Board of Trade by the several railway companies in the United Kingdom during the three months ended 31st December, 1904, in pursuance of the Regulation of Railways Act (1871), together with reports of the inspecting officers, assistant inspecting officers, and sub-inspectors of the Railway Department to the Board of Trade, upon certain accidents which were inquired into. Part II. Reports on Accidents. (June 21.)
  Income-Tax Committee. Appendix to the Report of the Departmental Committee on Income-Tax; with minutes of evidence taken before the Committee. (June 21.)
  Intermediate Education Board (Ireland). Annual Report for the year 1904. (June 22.)
  Mint. Thirty-fifth Annual Report of the Deputy Master and Comptroller of the Mint, 1904. (June 23.)
  The same were ordered to lie on the Table.

RETURNS, REPORTS, ETC,
  FRUIT CULTURE.
  Report of the Departmental Committee appointed by the Board of Agriculture and Fisheries to inquire into and report upon the fruit industry of Great Britain; with Minute appointing the Committee.
  Report of the inspector under the Inebriates Acts, 1879 to 1900, for the year 1904.

  TRADE REPORTS—ANNUAL SERIES.
  No. 3418. Portugal (North Portugal).
  No. 3419. United States (Oregon, Washington, and Idaho).
  No. 3420. Persia (Kermanshah).
  No. 3421. China (Pakhoi).
  Presented (by Command), and ordered to lie on the Table.

  COUNTY COURTS.
  County Court rules, 1905.
  INDIA (LOANS RAISED IN INDIA)
  Return of all loans raised in India chargeable on the revenues of India outstanding at the commencement of the half-year ended the 31st March, 1905, with the rates of interest and total amount payable thereon, etc.
  FINES, ETC. (IRELAND)
  Abstract of account of fines accounted for by the registrar of petty sessions clerks, for the year 1903.
  DOGS REGULATION (IRELAND) ACT, 1865.
  Accounts of receipts and expenditure under the Act, for the year 1904.

  INTERMEDIATE EDUCATION (IRELAND).
  Rules made by the Intermediate Education Board for Ireland:—

  1. Determining the maximum number of centre superintendents to be appointed for the examinations of 1905.

  2. Constituting an additional centre of examination at Newtownbarry for 1905.

  3. Appointing the places at which the examinations for 1905 shall be held.

  POLLING DISTRICTS.
  (County Borough of Newcastle-upon-Tyne)—Ordermade by the county council, of the county borough of Newcastle-upon-Tyne, dividing certain wards of the borough into polling districts.
  (Borough of Birkenhead).—Order made by the council of the borough of Birken head re-dividing the borough into polling districts.

  MUNICIPAL CORPORATIONS.
  Charter of the incorporation of the borough of Merthyr Tydfil, dated 6th June, 1905.
  Finance accounts of the United Kingdom of Great Britain and Ireland, for the financial year ended 31st March, 1905.

  CIVIL LIST PENSIONS.
  List of all pensions granted during the year ended 31st March, 1905, and
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  payable under the provisions of Section 9 (1) of the Civil List Act, 1901.

  LONDON COUNTY COUNCIL.
  I. Return showing, up to 31st March. 1904:—
  The amount of Consolidated Stock.
  The application of the money raised by such stock.
  The sums carried to the Consolidated Loans Fund.
  The application of the Consolidated Loans Fund.
  An estimate of the expenditure of the Council for all purposes, for the year ending 31st March, 1906.
  II. Return showing, up to March 31st, 1905—
  All moneys raised by the Metropolitan Board of Works and the Council since the passing of the Act for the purposes mentioned in the Act.
  Particulars in relation to every parish, district, union, or place in respect whereof a loan has been obtained from the Metropolitan Board of Works or the Council since the passing of the Act.

  LOCAL LOANS FUND.
  Accounts of receipts and payments by the Commissioners for the Reduction of the National Debt, in respect of the capital and income of the Local Loans Fund, for the year ended March 31st, 1904; together with the Report of the Comptroller and Auditor-General thereon.
  ELECTRIC LIGHTING ACTS, 1882 TO 1902 (PROCEEDINGS).
  Report by the Board of Trade respecting the applications to and proceedings of the Board of Trade under the Electric Lighting Acts, 1882 to 1902, during the past year.
  COUNTY OFFICERS AND COURTS (IRELAND) ACT, 1877.
  Account of receipts and payments under the Act during the year ended March 31st, 1905.

  PENAL SERVITUDE ACTS, 1853 TO 1891 (CONDITIONAL LICENCES).
  Licence granted by His Majesty to Elizabeth Marie Mantle, a convict under

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  detention in Aylesbury Prison, permitting her to be at large on condition that she enter the Elizabeth Fry Refuge, Hackney.
  Licence granted by His Majesty to Maria Yates, convict under detention in Aylesbury Prison, permitting her to be at large on condition that she enter the East End Refuge, Finchley.
  Laid before the House (pursuant to Act), and ordered to lie on the Table.

  UNIVERSITIES OF OXFORD AND CAMBRIDGE ACT, 1877.
  Statute made by the Governing Body of Balliol College, Oxford, on the 23rd of November, 1904, amending Statute IV. and Schedule B. of the Statutes of the college.
  Statute made by the Governing Body of University College, Oxford, on the 11th of March, 1905, to amend the Ordinance regulating the Radcliffe Travelling Fellowships.
  Laid before the House (pursuant to Act), and to be printed. (No. 108.)

  RICHMOND BRIDGE.
  Accounts of the Commissioners of Richmond Bridge for the years ended December 31st, 1903, and December 31st, 19C4. Delivered (pursuant to Act), and ordered to lie on the Table.

  MERCHANT SHIPPING (ALIENS) BILL [H.L.]
  [SECOND READING]
  Order of the Day for the Second Reading read.
  LORD MUSKERRY: My Lords, when on the last occasion I introduced to your Lordships a Bill similar to the present one, it was characterised by my noble friend opposing on behalf of the Government as an "old friend," and therefore, after such a kindly recognition on his part, I never imagined it would receive such rude treatment. As I never forsake "old friends," and as every day this particular one grows in my affection, and, as far as I am led to believe, in that of the British public, I am once more introducing it. Though I would not expect
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  it from the Board of Trade, I am sure your Lordships will give me an unbiassed and unprejudiced hearing, weighing the pros and. cons, and deciding on its merits the fact whether British territory shall be entrusted to and governed by an alien. I have the authority of the noble Marquess the Secretary of State for Foreign Affairs that a British ship is British territory. What is more, it is the one part of British territory upon which all the other parts are supremely dependent. It is the part which welds together the whole fabric of the British Empire. As Froude has written—
  "Take away the merchant fleet, take away the Navy that guards it, and the Empire will come to an end. Her Colonies will fall off like leaves from a withered tree, and Britain will become once more an insignificant island in the North Sea, for the future students in Australia and New Zealand Universities to discuss the fate of in their debating societies."
  These remarks may occur to your Lordships as merely platitudes, but they ire platitudes which cannot be driven home too forcibly or too frequently. If we agree with them we have no recourse but to admit that the efficiency and prosperity of our merchant service should be our first consideration. But, for divers reasons, it is our last. We are content to be assured of its prosperity and of its paramountcy, and to shut our eyes to the unpleasant facts in connection with it which sooner or later will require drastic treatment.
  At the present moment the Government are piloting through Parliament a Bill bearing, a similar short title to this one, which seeks to prevent undesirable aliens from establishing a footing in this country. But surely the place where an alien is least desirable is in command of, or as an officer in, a "British ship. Yet such is the inconsistency of the Government that in opposing my Bill—which I presume will be the case—they will take away with their left hand what they give with their right. Lest your Lordships may consider that I am trying to advance this Bill by the invention of bold assertions, I would quote from a speech in another place in February, 1900, by the then President of the Board of Trade, who delivered himself as follows—
  "Take, for instance, the question of a war—the question of a war where the Naval Reserves were called out—that would be to deplete

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  British ships of British seamen, and instead of being partially manned by foreigners they would, under existing circumstances, be altogether manned by foreigners. That, I think, is matter for very great regret, and if any suggestion can be made to remedy that state of things, or to endeavour to remedy that state of things, which the whole House regrets, then the House would do wrong not to consider any suggestion that might be made."
  One would have thought that after such a statement the country would have realised the danger, and that remedial measures would have been promptly taken. But though it was made five years ago the nation has pursued the even tenor of its way, with the natural result that the position is growing worse and worse.
  It is no use proclaiming that the canker is eating more and more into our vitals; it is of no avail to launch schemes to combat the evil and then abandon them; what is wanted is a determined effort, which will allow no resistance to stand in its way, in dealing with the question in such a manner as will abandon sentiment for the more practical methods of the law. The invention of schemes for encouraging British boys to go to sea and keep them there is a very favourite hobby now-a-days. But most of them, if not all, are quite beside the point. Once make the conditions of a seaman's life worth living, and there will be no lack of men. But all these pet schemes avoid the real source of difficulty, and their only possible result is to increase the supply of officers, who are already plentiful in number. There is, however, a disposition in official quarters to eventuate some British boy-sailor scheme, and I may say that by this Bill I am giving an opportunity which is calculated more than anything to bring such a scheme to a successful issue. It is indeed a fatuous policy to talk of patriotism, and to instil all its noble ideals into British youths, only for them to find that as British boy-sailors the language which is least known, or understood, on board their ships is their own mother tongue. They find aliens as their captains, their officers, and their petty officers. Can there be any wonder that they quickly realise that they have been befooled, and throw up in disgust an avocation which appealed so strongly before they had any practical
  14
  knowledge of it, to their enthusiasm and patriotism?
  I do not wish to infer for one moment that this Bill solves, once and for all, a gigantic problem, but I do contend that it goes far in affording the means to that end. Were the time opportune, or were it within the bounds of practical politics, the scope of this Bill as it affects the crews of British ships would be much larger. But there is reason in all things, and I am one of the last to hamper the British shipowner unless I have full and complete justification for so doing. Our merchant service is now in that unfortunate position where the foreigner can only be displaced step by step without placing urdue and unfair disadvantage on the British shipowner. This Bill, if your Lordships choose to endorse it, provides the first step. It commences at the fountain-head, for the attainment of an ultimate officer's or captain's position in a British ship is the greatest inducement we can possibly offer to the foreigner to serve in our ships.
  The Bill will establish a principle of enormous importance, and its adoption will not affect the interests of the shipowner. I am, I trust, not unreasonable in asking the Legislature to sanction such a principle, especially when I know that, since I first advocated it, the Government have themselves come to my way of thinking and have stipulated for it in their agreements with the Atlantic Combine and the Cunard Line, and also in charters granted to the Peninsular and Oriental Line and the Royal Mail Steam Packet Company. If they are so anxious that the vessels of these companies should be commanded and officered by British subjects, I do not see how in common sense they can oppose this Bill, which has exactly the same end in view.
  During the last debate on the Bill I was accused of trying to establish a close corporation of British officers. Though I do not like to see foreigners taking the bread out of the mouths of British officers, yet such a statement is ridiculous to anyone who chooses to acquaint himself with the circumstances. Further- more a still more serious charge was levelled at me. It was that I was guilty

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  of inaccuracies. Were this correct it would be ample justification for your Lordships' hesitancy in supporting the Bill, and might very possibly account for its rejection. In my Memorandum I stated that—
  "All the other leading maritime Powers restrict the commanding and officering of their merchant ships to their own subjects."
  The representative of the Board of Trade, in opposing the Bill, said he found on inquiry that this was not the case in Germany, Norway, the Netherlands, Belgium, Chili, or Ecuador. I did not know before that in the eyes of the Board of Trade Chili or Ecuador, for instance, were considered to be "leading maritime Powers." Dispensing with these and feeling sure of my own facts I caused inquiries to be addressed to the Consulates. Here are their replies—
  "Captains in command of German ships must be of German nationality as well as the officers, and all captains and officers must hold a German certificate."
  "Norwegian masters and mates certificates obtainable after passing examination in Nor wegian Schools of Navigation; and for master, certificate of citizenship (as shipmaster) in Norway, consequently the difficulties of employment are considerable."
  Therefore, I have just cause for complaining that the information placed in the hands of the noble Lord representing the Board of Trade at that time was misleading to your Lordships, and that the inaccuracies were committed by the Board of Trade and not by me.
  I will, with your Lordships' permission, once again give the position which other maritime Powers adopt as regards the nationality of their merchant captains and officers. I have the information from representatives of these Powers, and it cannot be refuted. I find that, in the United States, all officers of vessels having charge of a watch, including pilots, shall in all cases be citizens of the United States. In Sweden the master and mate must be Swedish subjects. In Norway the master and mate must be qualified by Norwegian examinations and legitimations in every other respect. In France, merchant vessels must be commanded and officered by French subjects. In Greece a similar law is in force. In the Argentine Republic their merchant vessels must be commanded by an Arger-
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  tine subject, or carry an Argentine flag captain. In Austria-Hungary the captain and mate must be subjects of Austria, or Hungary. In Spain the captain, and officers must be Spanish subjects. In Germany, as I have said before, merchant ships must be commanded and officered by German subjects. Russia and Italy also have restrictions regarding the character and nationality of their merchant captains and officers; also I understand that on September 1st last a new law came into force in the Netherlands whereby their merchant captains and officers must be of Dutch nationality. We are set a very fine example, too, by New Zealand, where every applicant for examination, whether master, mate, or engineer, must be a British subject.
  As showing how British captains and officers suffer under such conditions, the Merchant Service Guild have drawn my attention to the following extract from the Report of the Subsidies Committee. Referring to the substitution of foreign officers and crews for British crews, the Committee says—
  "The report of the North German Lloyd Company for 1900 gives a striking instance: 'When we bought the steamers of the Scottish Oriental Steamship Company and Holt's East Indian Ocean Steamship Company the whole of the steamers were carrying exclusively English captains, officers, and engineers. At the time of our taking over the two lines the Englishmen on board consisted of twenty-four captains, forty-eight officers, and seventy-two engineers. Of these we have already replaced sixteen captains, forty-three officers, and fifty-eight engineers by Germans, so that at present there are still on board, of Englishmen, only eight captains, five officers, and fourteen engineers, whom, however, we also hope shortly to replace.
  And I may tell your Lordships that very shortly after this Report was issued, the remaining British subjects were discharged. The unfortunate Britishers were perforce compelled to start at the bottom of the ladder elsewhere.
  So far as I have been able to judge, the main objection which the Government hitherto entertained against the Bill was that, somehow or other, it savoured of protection. I hope they still look upon it in the same light, for, having made a complete change of front in their policy since my former Bill was defeated, they should, sympathise with, and support this one. I cannot see how

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  this Bill, restricting the command and officering of our merchant ships, can be different from the same restrictions in the Royal Navy. I emphasise in the strongest way that neither free trade nor protection can enter into the question of the safety and defence of our country, for the enormous proportion of aliens in our merchant service is, I trust, generally recognised as a menace to our country. As an ex-President of the Board of Trade has stated, if we were engaged in war and the Reserves were called out, our merchant ships would be altogether manned by foreigners. I would like to know whether the National Defence Committee view such a situation with complacence? In the year 1896 the Manning Committee reported—
  "However undesirable it may be that British sailors should thus be ousted by foreigners from British ships, and however dangerous this change may prove to the State in time of war, the fact must be recognised that the existing unrestricted admission of foreigners and Lascars may eventually result in further diminishing, outside of the Royal Navy, the number of British seamen."
  Their prognostication has proved correct; alien seamen are increasing, and the danger to the State is greater still. What have the National Defence Committee to say to this? Not to speak of 41,000 Lascars, I find that no fewer than 40,396 aliens are enjoying the hospitality of British ships. Their percentage in British ships has swollen to 22·9. But a little analysis discloses a still mere astonishing state of affairs. We must have regard to the fact that the crews of most; of the large lines are almost wholly composed of Britishers. Therefore so many the less for "tramp" steamers—which constitute 80 per cent, of our shipping trade—and sailing vessels. The actual percentage of aliens in "tramp" steamers may be safely assumed to be over 50 per cent. whilst I have it from official Returns that over half the men employed in British sailing ships are foreigners. Consequently the evil has grown so great that it can only be removed gradually and with caution. This is why I ask Parliament to proceed mildly at first, and to pass a Bill which asserts a principle but which will not conflict with the interests of British shipowners.
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  In ordinary British trading vessels-the number of alien captains and officers, according to the latest Returns, is 511, and in fishing vessels forty-eight alien skippers and thirty-five mates. I shall no doubt be informed that the number of alien captains and officers is decreasing. I do not deny it; but I may say-that the number of petty officers—who most probably are aspiring to the higher grades—is increasing, for I find that they number 2,991. Furthermore, a most pernicious practice has lately come into vogue of carrying foreign boys as apprentices of British sailing ships. It is still more probable that, after four years service, they will obtain British certificates in order to get the higher pay in British ships, and thus cause a prolific supply of alien officers. But mere numbers are as nothing compared to the fact that by allowing alien captains and officers in our ships we are demoralising the whole merchant service, and, at the same time, offering the highest inducements to other than our countrymen.
  I have stated that the Government themselves have acted upon the principle of this Bill in agreements with large British lines. I think that I am also right in saying that the Admiralty stipulate for British captains and officers in merchant transports. The Steamship Subsidies Committee, in Paragraph 26 of their Report, say—
  "Importance is attached to the manning of ships by national officers and crews in'Germany, Russia, Italy, and Japan; and the British Admiralty hold that no postal or other contract should be given unless all captains and officers are British subjects and a certain proportion of the men, while British-born apprentices and boys should be carried according to the size of the ship. This is also the opinion of jour Committee."
  and at a later stage they say—
  "The British Admiralty point out that it is apparent that if this question of nationality is not recognised in time, British vessels, whenever the occasion for their use by the Admiralty arises, will be extensively manned by foreigners, who would have to be largely, if not entirely, replaced! by British subjects on the outbreak of war."
  How are they going to get these British subjects? Only by taking them from the "tramps" and sailing ships, leaving the country to depend on vessels manned by foreigners for its food supply. The

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  Steamship Subsidies Committee said that on subsidised vessels the captain, officers, and a portion of the crew ought to be British subjects.
  Another point which merits your Lordships'most serious consideration, and particularly the attention of the First Lord of the Admiralty, who I regret is not in his place to-day, is the official intimation to merchant captains that, in the event of relations becoming strained between this country and any naval Power, they will be furnished with a confidential Report showing the ports in the United Kingdom and His Majesty's possessions abroad which are defended "by means of mines or batteries. There is absolutely nothing at present which would prevent these confidential Reports being placed in all innocence in the hands of alien captains of our ships. I should like to know what the National Defence Committee would think of this? I know very well what the verdict of the British public would be.
  It is observable from time to time that, in naval circles, cold water is poured upon the idea that the merchant service is of any avail as a Naval Reserve. I am not proposing to go to the length of arguing the point, for it is manifestly ridiculous. We found that during the Boer War the merchant service was beyond criticism. Without it we should have been hopelessly beaten. As a reserve for the Navy it is indispensable. The Naval Reserves Committee reported that—
  "The Committee do not overlook the importance, both as regards naval and other considerations, of securing that as large a proportion as possible of the crews of merchant ships shall be of British nationality."
  and that—
  "The mercantile marine is, and should continue to be, a valuable source from which to draw a portion of the Naval Reserve."
  Further, that—
  "The present mode of supplying a reserve of executive officers is satisfactory, except that a weeding of the list of Royal Naval Reserve officers and an extension of numbers are required."
  The section of the Bill relating to aliens being granted British pilotage certificates I will only touch on briefly. My noble friend Lord Ellenborough will deal more fully with that portion of the Bill. This
  20
  subject has been brought into great prominence of late years. By granting these certificates to aliens we, are committing an egregious blunder and manufacturing a whip for our own backs in days to come. These alien pilots are increasing; they enable foreign shipowners to compete with us on advantageous terms whilst, at the same time, they rob British pilots of their birthright.
  I regret having trespassed on your Lordships' forbearance so long. I must plead the vast importance of the principle underlying this measure. I have received a letter from the Merchant Service Guild—to whom I am indebted for much useful information on the matter—expressing their fervent hope that your Lordships will extend your support on this occasion. Those of your Lordships who have come into contact with the crews of average cargo vessels will know how desperate is the situation. It is in the interests of the Empire that I speak, that I introduce this Bill. Pass it and you will be acclaimed by public opinion, Reject it, and you will create further blank despair in the heart of the British seaman, and still leave a blot on the fair fame of our Red Ensign—a flag which means so much to us as a nation.
  Moved, "That the Bill be now read 2a"
  LORD ELLENBOROUGH: My Lords, if the officers and seamen of the mercantile marine were represented in the House of Commons by bodies as powerful as the Shipowners' Parliamentary Committee, Bills for improvement in the housing and provisioning on board ship would have been passed long ago, and the proportion of bonâ fide British officers and seamen would have been increased in consequence. The officers and men of the mercantile marine are so much at sea, that they have, even if married men with houses of their own, very few opportunities of voting. The fact that they are practically unrepresented in another place gives them, therefore, an additional claim to have their interests carefully considered in this House. In all other industries of equal importance the actual workers have a

  21
  large voting power; in many cases greater than that of their employers.
  There are, and constantly have been, a number of ships that have nothing British about them except the flag. Many years ago, during the Civil War in America, complaints were made by the Americans of the North that all their commerce was forced to shelter itself under the British flag by Confederate cruisers. But what really happened? American vessels with American officers and crews, entered a British harbour, generally a colonial one, went through a few formalities, painted out the name of the port and put in an English one instead. The owners, officers, and crews remained American. Some New Yorkers, to save paint I suppose, went to New Brunswick and painted in the word "Brunswick" instead of "York." When I was off the Rio Grande in 1864, I boarded numbers of these so-called British vessels, and the first question always put to me was, "Have our armies got to Richmond yet?" Returns show that in consequence of this change · of flag British commerce flourished at the expense of that of America, though what benefit England or Englishmen ever derived from this change of flag I am at a loss to imagine. I look upon the Returns of British shipping-as very fallacious, as it is hard to know what proportion of vessels under our flag are really British.
  In war time there might be grave disadvantages in having foreign officers in command of British ships. For instance, during the Ashantee affair in 1873, it fell to my lot to board some British vessels which were selling arms and ammunition to natives. I had a suspicion that they might resume this trade in my absence, so I cautioned the crews, who were nearly all British, that not only would the ship be seized and confiscated, but that all the British on. board would be held individually responsible, tried for aiding and abetting the Queen's enemies, and kept in Cape Coast Castle until their-trial could commence. Cape Coast Castle, unfortunately, has not the reputation of being a particularly healthy spot, and I have every reason to believe that no arms or ammunition were sold in my
  22
  absence. But had these vessels been, officered and manned by foreigners such a caution would have been useless, as they would not have been liable to any penalty. The captain and the second in command of a British ship ought always to be British subjects.
  As regards alien pilots, there is undoubted danger in allowing a number of foreigners to exercise their profession on our coasts to the exclusion of our own seamen. In 1888, before the Select Committee on Pilotage, some naval officers gave evidence minimising the danger arising from that source. But quite recently Admirals Sir Edmund Fremantle and Sir Nathaniel Bowden-Smith expressed a contrary opinion at a discussion at the Royal United Service Institution. Two years ago Admiral Lord Charles Beresford wrote that—
  "The granting to foreigners of British pilotage certificates is a glaring injustice to British pilots, and I consider it a great danger to the country in time of war."
  Since 1888, moreover, naval methods of warfare have altered, and the number of foreign pilots has greatly increased. There are now no less than fifty-nine foreign pilots licensed for the Thames alone. One of the naval witnesses in 1888, in answer to Question 10,849, said—
  "The navigation of vessels simply by the use of pilots is to facilitate it; not that the captain could not navigate by extra care and extra time without a pilot. It is simply to save time and facilitate matters."
  Now, why on earth should time be saved and matters facilitated for an enemy's ship at the entrance to the Thames? And in answer to Question 10,850 the same witness said—
  "The foreigner is so much the better, certainly, for his knowledge. I freely admit that."
  Since 1888, moreover, men-of-war have nearly doubled their rate of speed, and have greatly increased the effective range and rate of firing of their guns. They have also increased the range of their torpedoes. In naval warfare ten minutes is now of greater importance than half-an-hour was then. We cannot afford to give away any chances in war time, however small they may be.
  When a similar Bill came before this House two years ago it was said that a

  23
  sharp and intelligent sailor, who frequently entered a port, would, with the help of charts and sailing directions, soon pick up such a knowledge of the pilotage as would enable him to enter any port without a pilot. So he would; but in fine weather only. In thick weather he would either have to anchor or to risk running on shore, and thick weather is the only weather in which an enemy would dare to prowl about the entrances to our harbours for the purpose of laying mines or using torpedoes. I know the Thames now a great deal better than when I retired from the service, and I am quite certain that a pilot who had actually piloted a ship would have a great advantage over one who had merely looked on. A man cannot learn to drive a coach as well as the driver by merely sitting on the box seat. If a coach came to a sharp turn on a greasy road impeded by traffic at the bottom of a steep hill, I am sure that the passengers would sooner have an experienced coachman on the box than a man who was holding the reins for the first time.
  I suggest that this part of the Bill should be made even stronger. I would not allow a certificate to be granted to any pilot who had not been naturalised before attaining the age of one-and-twenty, as I think that men would become naturalised for the purpose of evading the Act, and that after one-and-twenty it is too late for a man to change the feelings and sympathies implanted in early life. The only advantage to be derived from the naturalisation of the alien pilot is that if captured he would be liable to be tried for high treason. But as he would probably be on board the enemy's man-of-war under a false name, it is not likely that he would ever be identified. It has been objected that this is trades-union legislation. There are many methods of trades unions that I strongly object to, but I have never heard of the Pilots' Association being accused of any of them, and the Pilots' Association desire to see this Bill passed.
  In this case the interests of the nation, and those of the pilots are coincident. The last Select Committee on Pilotage sat in 1888, and it is therefore quite time that many of the questions connected
  24
  with pilotage should be reconsidered. Besides, there is no reciprocity in this matter. Mr. Langdon, secretary of the United Kingdom Pilotage Association, has written to me saying that Marseilles is the only Continental port where a British pilot can be licensed, but that this indulgence is so surrounded by conditions that no shipmaster has hitherto attempted to obtain a certificate. Objections may be made to some details in the Bill, but I think that they could be dealt with satisfactorily when in Committee; and I hope that the Government will reconsider their intention to oppose the Second Reading of this Bill, and that some portions of it, especially that dealing with alien pilots, may become law this session.
  THE LORD CHANCELLOR (The Earl of HALSBURY): My Lords, in the absence of the noble Marquess who presides over the Board of Trade I have been requested to reply upon this Bill. I may say at once that His Majesty's Government cannot accept the Bill and intend to oppose it. The noble Lord who has introduced the Bill has by no means exaggerated the importance of the subject to which he has drawn attention. What is really intended by the Bill is the reimposition of the Navigation Laws, of which this is the first instalment. When the Navigation Laws were first imposed they certainly did what the noble Lord desires to do—namely, to restrict the choice of officers and seamen to British subjects. From time to time came remonstrances from representative chambers of commerce m those days and the Legislature gradually relaxed the stringency of those-laws. The mercantile marine were constantly petitioning against the restrictions placed in their way, and during the reign of George III. and. for some time afterwards those restrictions were gradually diminished until 1854, when they were swept away. The law was reconsidered, consolidated, and affirmed in 1894, and I cannot help observing that it is a bold endeavour by a Bill of this kind to reverse a policy which has endured for so many years, and the grounds on which that reversal Is. advocated are, I think, altogether insufficient.

  25
  I notice that in the Memorandum which the noble Lord has attached to his Bill he makes this statement—
  "Under the present system British registered ships may be, and are, owned, commanded, and manned entirely by foreigners."
  If not absolutely inaccurate that statement is very misleading. The only case in which British ships may be entirely owned by foreigners is in the case of a corporation, which, however, must have its principal place of business in this country or in some dominion of His Majesty. It may be the case that some of these corporations man their ships with foreigners, but there are no means of exactly telling to what extent that is done. The statement is not absolutely accurate as it stands, and it is certainly misleading. Of course, a question of this kind, so wide and important in its bearings and altering the whole policy of a. statute which extends to 550 sections and has twenty-two schedules, can only be taken up by the Government of the day.
  I do not deny that the questions that have been raised are very important ones, deserving of serious consideration. With regard to the pilotage question, that has been considered by the Admiralty, who in May, 1903, made this statement—
  "I am commanded by my Lords Commissioners of the Admiralty to point out that the total number of alien pilots for ports in England is only eight-seven out of a total of 4,000; that a smart seaman commanding a foreign merchant vessel, which may frequently trade to any port of the United Kingdom, could not fail to learn the navigation of that port; and that the existence of good charts of the approaches to all British ports renders a navigator largely independent of pilotage. For these reasons their Lordships cannot but consider the danger referred to was overestimated by the deputation, but they do not wish to be understood as holding the opinion that an increase in the number of alien pilots is in itself at all desirable."
  So much for the pilotage question. With reference to the proportion of alien captains in our merchant ships, I have in my hand a Parliamentary Return which shows that in the year 1891 the total number of masters was 4,465, of whom 158 were foreigners; in 1896, the total number of masters was 4,301, of whom 145 were foreigners; and in 1901, the masters numbered 3,792, of whom eighty-seven only were foreigners. The percentage of foreign
  26
  masters was, therefore, in 1891, 3·5 per cent.; in 1896, 3·4 percent; and in 1901, 2·3 per cent only. With regard to sailors, I find that in 1891 the total number was 37,103, and of that number 12,715 were foreigners. In 1896 the total number of sailors employed was 34,357, and of that number 13,594 were foreigners. I think these figures are sufficient to show that the noble Lord has very much exaggerated what he appears to regard as a great danger to the State.
  I do not propose to argue the whole question of the Navigation Laws over again. The only observation I would make on the subject is this, that if you reverse what has been the deliberate policy of the Legislature for so many years you must reverse that policy in its entirety or not at all. While shipowners were under the old laws, restricted in their choice of men to man their ships, they had considerable privileges given to them that ensured for them the trade which it was important they should possess; but now the suggestion is made that without those privileges you are to restrict them in the matter of the employment of officers and men. If there is one industry in this country to which people can point as being a successful and important industry and with which it would certainly be rash to meddle it is the shipping industry; yet it is with that industry that the noble Lord appears to think he can make an experiment. Although this Bill may be a small one in itself, the noble Lord has truly said that it involves an important question of principle, and if it is once adopted the rest will follow in natural course. In these circumstances I must invite your Lordships to reject the Bill. I accordingly move that it be read a second time this day six months.
  Amendment moved—
  "To leave out the word 'now' and add at the end of the Motion the words 'this day six months."—(The Lord Chancellor.)
  THE EARL OF MEATH: My Lords, I did not intend to intervene in this debate, but I do so because I feel that this is a most important subject. I was very glad to hear from the noble and learned Earl on the Woolsack that he considers the question one of great importance to the country. I am sure I shall

  27
  be expressing the feeling even of those who are on the side of the Government when I say that we are all indebted to Lord Muskerry for the way in which he has persistently, courageously, and ably advocated the cause of the British sailor. All of us are proud of the British sailor, and of the fact that it should be left to a Member of this House to take up his cause. I was very glad to gather from the remarks of the noble and learned Earl that he considers the question of the future of the Navigation Laws as a more or less open question. I for one feel very strongly indeed that it is for the Government to consider whether the old Navigation Laws cannot in some way or another, either in their entirety or piecemeal, be brought back.
  The statement was made in the House of Commons that 70,000 men would be required to invade this country, and that there was not sufficient tonnage to carry that number of men across the Channel. Although it may be the fact that comparatively few British vessels are officered by foreigners and that at this moment the number of foreign sailors is not sufficiently large for us to be seriously alarmed, still, obsta principiis, there is no reason why these officers of foreign origin should not bf increased, and the number of foreign sailors considerably augmented. I ask whether it would not be possible for some hostile Power to privately and secretly charter these vessels—vessels that are only British by the hanging of a flag from the masthead, and which are manned by foreign officers and seamen—and in that way secure the tonnage which we are informed by the Prime Minister they could not find. We have recently been very close to war with a certain Power owing to the fact that that Power had overhauled and sunk some of our steamers. In the case of the "Cheltenham," which was overhauled, there were only four British sailors on that British ship, and when the sailors of the cruiser who had overhauled the "Cheltenham" left they were cheered by the crew, who were Germans. It is a serious question whether these vessels, officered and manned to a large extent by foreigners, would not be a very serious danger to this country in time of war. I myself believe that they would, and, as a patrio-
  28
  tic subject of the King, I say we should take every step to prevent such an event occurring. I have heard many naval men speak of the seriousness of the granting of pilotage certificates to alien pilots. There are a number of foreigners who know the intricacies of our rivers and the entrances to our ports, and it is important that we should only let those things be known to British subjects. I shall certainly support the noble Lord who moved the Second Reading of this Bill if he goes to a division.
  THE DUKE OF RUTLAND: My Lords, I have no intention of entering into a discussion of the provisions of this Bill, not having that technical knowledge which would justify such an intrusion, but I do wish to make one comment on the opening sentences of the speech which we heard from the noble and' earned Earl on the Woolsack. I understood him to oppose this Bill mainly on the ground that it was a serious infraction, if not an absolute reversal, of the Act passed in 1854 for the repeal of the Navigation Laws—an action which the noble and learned Earl described as being of the most deliberate character. Now, I have a very clear recollection of the circumstances attending the repeal of the Navigation Laws, and I shall never forget the scene which this House presented on the night of the Second Reading of the Bill. The debate was a long one; the greatest orators then in the House took part in it, and so far from the repeal of the Navigation Laws being a deliberate act I do not remember a Bill that was more severely and hotly contested. It was a struggle between the two great Parties in the State. There were some Members professing strong Liberal opinions who opposed that measure with the utmost vehemence, among them no less a personage than Lord Brougham. I do not think there is anything very dreadful in an attempt to alter an Act which was passed under such circumstances, and I hope your Lordships will put aside any historical reverence for the year 1854 and vote for the Second Reading of this Bill.
  LORD MUSKERRY: My Lords, I should like to say one or two words in

  29
  reply to the speech made by the noble and learned Earl on the Woolsack. The ways of the Government are indeed past understanding. I quoted to your Lordships their own Committees in support of my Bill, they having all been in favour of the principle of this Bill; I quoted the statement by the ex-President of the Board of Trade, who until recently was one of their colleagues, in favour of the principle; the Government themselves have adopted the principle in four cases; and the Admiralty have adopted it in every case as regards merchant transports. The noble and learned Earl says this is a small instalment of a much greater question. Well, why not take that small instalment? It does not commit the House or the nation to follow it up in any way. As to the statement of the noble and learned Earl that I am
  Bill to be read 2a this day six months.
  inaccurate when I say that under the present system British registered ships may be, and are, owned, commanded, and manned entirely by foreigners, I must differ from him. It is true that there is a stalking-horse put up as a British subject, but he is only a man of straw; the owners are foreigners, and also those on board. For instance, there is a Norwegian line of steamers running up the south-east coast of Africa which is owned, commanded, and manned entirely by foreigners, but which flies the British flag. I hope your Lordships will consent to the Second Beading of this Bill, if only as an experiment
  On Question, "That the word proposed to be left out shall stand part of the Motion," their Lordships divided:—Contents, 35; Not-Contents, 53.

  CONTENTS.

  Rutland, D.

  Sidmouth, V.

  Ellenborough, L. [Teller.]

  Abercorn, M. (D. Abercorn.)

  Hatherton, L.

  Hertford, M.

  Aldenham. L.

  Hay, L. (E. Kinnoul.)

  Barrymore, L.

  Meldrum, L. (M. Huntly.)

  Carlisle, E.

  Belhaven and Stenton, L.

  Muskerry, L. [Teller.]

  Craven, E.

  Blytha wood, L.

  Newton, L.

  Haddington, E.

  Chaworth, L. (E. Meath.)

  Ranfurly, L. (E. Ranfurly.)

  Mayo, E.

  Clanwilliam, L. (E. Clanwilliam.)

  Rosmead, L.

  West meath, E.

  Shute, L. (V. Barrington.)

  Wilton, E.

  Colchester, L.

  Sinclair, L.

  Crofton, L.

  Sudley, L. (E. Arran.)

  Llandaff, V.

  de Ros, L.

  Wemyss, L. (E. Wemyss.)

  Ridley, V.

  Dunboyne, L.

  Zouche of Haryngworth, L.

  NOT-CONTENTS.

  Halsbury, E. (L. Chancellor.)

  Mansfield, E.

  Fermanagh, L. (E, Erne.)

  Onslow, E.

  Glanusk, L.

  Vane, E. (M. Londonderry.) (L. President.)

  Spencer, E.

  Harlece, L.

  Waldegrave, E. [Teller.]

  Heneagh, L.

  Kenyon, L.

  Devonshire, D.

  Churchill, V. [Teller.]

  Killanin, L.

  Richmond and Gordon, D.

  Cross, V.

  Lawrence, L.

  Wellington, D.

  Falmouth, V.

  Leigh, L.

  Hutchinson, V. (E. Donough more.)

  Methuen, L.

  Bristol, M.

  Ravensworth, L.

  Lansdowne, M.

  Knutsford, V.

  Reay, L.

  Linlithgow, M.

  Portman, V.

  Robertson, L.

  Ripon, M.

  Sandhurst, L.

  Ashcombe, L.

  Shuttleworth, L.

  Abingdon, E.

  Avebury, L.

  Stanley of Alderley, L.

  Amherst, E.

  Brougham and Vaux, L.

  Welby, L.

  Cromer, E.

  Burghclere, L.

  Wenlock, L.

  Doncaster, E. (D. Buccleuch and Queensberry.)

  Chelmsford, L.

  Windsor, L.

  Crawshaw, L.

  Wolverton, L.

  Feversham, E.

  De Mauley, L.

  Wrottesley, L.

  Harewood, E.

  Farrer, L.

  FINANCE BILL.
  [SECOND READING.]
  Order of the Day for the Second Reading read.
  Moved, "That the Bill be now read 2a."—(The Marquess of Lansdowne.)
  LORD AVEBURY: My Lords, before-this Bill is read a second time I hope your Lordships will allow me to call your attention for a few minutes to the enormous and growing expenditure of the country, both national and municipal. As chairman of the English Bankers, and president of the Associated Chambers of Commerce for the last four years, I have had exceptional opportunities of observing how these great burdens weigh upon and injure our trade and commerce. This Bill, of course, does not deal with rates, but it is obvious that the pressure of rates is aggravated by the increase in our taxation, and the burden of the taxation by that of the rates.
  Twenty years ago, in 1884, our national expenditure was £86,000,000; in 1894 it was £92,200,000; in 1904 it was no less than £154,200,000. But even this does not show the real amount. No doubt in any exact comparison various allowances would have to be made, which it would take too long to go into completely now. On the whole, moreover, they would only make the matter really worse. For instance, in 1884 the amount allocated to the National Debt was £29,650,000. In 1904 it was only £27,000,000. If we had applied as much to debt in 1904 as in 1884 our expenditure would have been even greater. Indeed, we have to add on, as Mr. Bowles has shown in a very able and convincing pamphlet, the revenue intercepted and not paid into the Exchequer which is not included in the £154,000,000, but which is really expenditure, and which last year amounted to no less than £22,600,000. In fact, the total State revenue was not £154,000,000, but in reality £176,953,000, showing an addition of over £80,000,000 in ten years. Moreover, what makes matters worse is that in spite of our heavy taxation we do not make both ends meet. It
  32
  is true, no doubt, that mainly by the action of the terminable annuities we may be said to have reduced our debt in one direction by £7,600,000, but then we borrowed for Army and Navy purposes £9,800,000, so that in the year we have actually increased our National Debt by £2,238,000.
  Now, how has this enormous increase arisen? The Civil Services, including education, have increased £9,500,000, and the collection of revenue £8,300,000 That the cost of the Civil Services should increase is inevitable, but the actual growth is excessive. Sir M. Hicks-Beach on more than one occasion called attention to and deplored it. The cost of collection of revenue also demands the serious attention of the Chancellor of the Exchequer. But the most serious item of all is undoubtedly the increase in our military and naval expenditure, which has risen from £36,600,000 ten years ago to no less than £86,600,000, an increase of £50,000,000. I am glad to see that there is this year some reduction in the Naval Estimates against increases in the Army and Civil Services. As, however, we always have supplementary expenditure it is safer to take actual results.
  We did not murmur at the taxation in time of war, but the present expenditure and the present income-tax in time of peace are altogether excessive. Of course it is necessary to be well armed. But assuredly the present portentous expenditure is excessive and unnecessary. We have no important question open with Russia. She is not likely to pick a quarrel, and her fleet has been seriously weakened. France is friendly; she knows that we are her best customers, and that no other nation would take her clarets and her silks. There can surely be no question of war between us and Germany. Yet we are arming as we have never armed before. In doing so we not only weaken ourselves, but incur the moral responsibility—I might say the guilt—of additional armaments in Europe.
  In 1841, when our expenditure on the Army and Navy together was only £11,000,000, Sir Robert Peel thought it much too great. More recently Lord

  33
  Beaconsfield spoke of our "bloated" armaments. What epithet would he find strong enough to describe them now? In 1899 Mr. Goschen, then First Lord of the Admiralty, and speaking on behalf of the Government, threw out an important suggestion to other European States. He said—
  "We have been compelled to increase our expenditure as other nations have increased theirs, not taking the lead, not pressing on more than they. As they have increased, so we have increased. I have now to state, on behalf of Her Majesty's Government, that, similarly, if the other great naval Powers should be prepared to diminish their programme of shipbuilding, we should be prepared on our side to meet such a procedure by modifying ours. The difficulties of adjustment are no doubt immense, but our desire that the Conference should succeed in lightening the tremendous burdens which now weigh down all European nations is sincere."
  That was a wise and statesmanlike suggestion. Unfortunately, however, it has not been acted on.
  If other countries were increasing their armaments as we are there might be some justification for the course we are adopting. But this is not so. What are the figures? In Italy the expenditure on the army has increased in ten years from 264,000,000 of lire to 296,000,000, and of the navy from 118,000,000 to 124,000,000, or, taking the two together, an increase of 37,000,000 lire£1,500,000. In Russia the expenditure on the army has increased from 280,000,000 roubles to 343,000,000, and of the navy from 55,000,000 to 100,000,000; taken together, an increase of 107,000,000 roubles, or about £10,800,000. In Germany the expenditure on the army has risen from 618,000,000 marks to 649,000,000, and on the navy from 78,600,000 to 222,000,000, an increase of 174,000,000 marks or about £8,700,000. In France the expenditure on the army has risen in ten years from 648,000,000 francs to 726,000,000, and of the navy from 274,200,000 to 344,000,000, an increase of 149,000,000 francs or about £6,000,000.
  In our own case there has been—on the Army an increase of £24,800,000, and on the Navy an increase of £25,000,000; or, taking the two together, in round figures an increase of no less than £50,000,000, of which, however, only
  34
  £39,000,000 is shown in the ordinary Estimates. In other words, while Italy has increased her naval and military expenditure by £1,500,000; Russia, £10,800,000; Germany, £8,700,000; and France, £6,000,000; we have increased ours by £50,000,000. Thus these four great countries put together show an increase of £27,000,000, while ours by itself is £50,000,000, or nearly double that of Russia, Germany, France, and Italy put together. My noble friend Lord Brassey has always been a powerful advocate for a strong Navy, but regards our present force as excessive and involving the nation in intolerable burdens, and has suggested various ways in which we might effect economies.
  As regards the protection of commerce at sea, not only ours, but that of the whole world, the real remedy would be the extension of the Declaration of Paris, and the placing of private property at sea on the same footing as property on land. This policy has, I understand, been now adopted by Mr. Roosevelt and the Government of the United States, who have proposed it as one of the subjects to be considered at a conference of the Powers. I trust our Government will give him their supportat—least I know that the late Lord Salisbury would have done so—and I hope that France and Germany will also agree.
  One result of our enormous expenditure is that we have to a considerable degree lost the elasticity and financial reserve which were so great a strength to the country. If we are spending £177,000,000, paying Is. income-tax, and borrowing over £2,000,000 in time of peace, what is the prospect in time of war. The only way to remedy this state of things is to reduce these crushing burdens and lighten the springs of industry. Some years ago Mr. Atkinson, the eminent American economist, said—
  "The burden of national taxation and of militarism in the competing countries of Europe, all of which must come out of the annual product, is so much greater that, by comparison, the United States can make a net profit of about 5 per cent, on the entire annual product before the cost of militarism and the heavy taxes of the European competitors have been defrayed. Such is the burden of militarism, which must be removed before there can be any competition on even terms between European manufacturers and those of the United States in

  35
  supplying other continents, and in sharing in the great commerce of the world."
  This was written some time ago, and matters are now far worse. The difference now probably gives manufacturers in the United States and our Colonies an advantage of something like 15 per cent, over those at home. If the United States had not, unfortunately for themselves, adopted a policy of so-called protection, and deprived themselves as far as they could of the advantage of cheap materials, it would have been almost impossible for our manufacturers to have competed with them in neutral markets.
  Your Lordships, of course, have no control, and recent changes have very much weakened the House of Commons' control over rational expenditure and the opportunities of enforcing economy. The proportion of permanent Votes, i. e. those levied under standing Acts of Parliament and not requiring to be annually voted by the House of Commons, has greatly increased. Appropriations-in-aid have much increased. These do not require a House of Commons vote. The amount for capital expenditure for works is formed by loans authorised under various Acts, once for all. In fact, so far from our annual expenditure requiring the annual sanction of the House of Commons, as I believe is still popularly supposed, a comparatively small part of it now does so. In these and other ways the power of the House of Commons over expenditure and the forces tending to economy have been fatally reduced.
  Unless some serious effort is made, not only can we not hope for any reduction of taxation, but we must be prepared for an addition to our present very heavy burdens. This is a serious position, and the moral aspect of our present policy is also most grievous. Of course, my Lords, we know that we are not going to attack any foreign country. We are sincerely anxious to maintain the peace of the world. But let us suppose for a moment that France or Germany had increased their armaments as we have increased ours. What should we have said? What an outcry there would have; been. We should have inevitably have felt, that we must also increase our forces. If one nation raises its armaments,
  36
  others follow suit, and so on. This is, in fact, not merely a British question; it is an European question. I have more than once quoted Gambetta's saying to me that if the military mania of Europe were to continue we should all end by being" beggars in front of barracks." Little did he then think, little did I think, that we should be the greatest sinners; that we, who claim to occupy a position in the front rank among civilised nations, should incur the responsibility—I had almost said the guilt—of setting so evil an example to the rest of the civilised world.
  The position of Europe is most serious. Even without any war European nations will be crushed by the weight of their own armaments. A Japanese statesman is reported to have said that as long as they only sent us beautiful works of art, we looked on Japan as a semi-barbarous country; now that they have shot thousands of Russians we recognise them as a truly civilised nation. Unfortunately, we are the country which of late has taken the lead in the mad rivalry of armaments. Europe is an armed camp; we have most of the evils of war (except bloodshed) even in times of peace. In fact, it is not really peace; it is only a truce, embittered by jealousy and suspicion. Unless we retrace our steps, unless our neighbours also reduce their expenditure, it will be impossible for European manufacturers to compete with those of America and other countries.
  We do not sufficiently realise what great interests the European nations, and, indeed, the whole civilised world, have in common. Moreover, the enormous increase in expenditure of recent years affects all classes, the poor perhaps even more than the rich. It has been a surprise to many that while our commerce is undoubtedly flourishing the number of those out of work last winter should have been above the average, and some of the supposed remedies are likely, I fear, to make matters worse. But that it has been above the average can hardly, I think, be doubted. It is also an unfortunate fact that pauperism is on the increase. I cannot doubt that both these unsatisfactory features are in great measure due to the increase in our national and municipal expenditure.

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  We ought to take these warnings seriously to heart. Being once more, happily, at peace with all the world, our policy should be to reduce expenditure, pay off debt, increase our financial reserves, and lighten the taxes which now press so heavily on the springs of industry.
  LORD WELBY: My Lords, there is great uneasiness throughout the country among financial authorities and thinking people as to the state of our finance at the present moment, not only as to its actual condition but also as to its prospects, and I am very glad that my noble friend has expressed that uneasiness to your Lordships, because his wide experience and great authority in almost every branch of finance make his remarks of particular weight both here and elsewhere, and entitle him to the serious attention, not only of your Lordships' House, but of the public generally. I venture also to think that it would be an omission of duty on the part of your Lordships' House if you were to pass without any comment whatever the Finance Bill of the present year.
  The Budget of the present year is what I should call a hand-to-mouth Budget. It just provides for the current wants of this particular year, and so far it can hardly be regarded as satisfactory in presence of the enormous amount of taxation which we have to bear. In fact, my Lords, I can only describe it as a Budget of drift. We have now been three full years at peace. In the year 1903 all reasonable people would willingly have granted the Government time to reconsider the financial situation in order to place our peace expenditure again upon a sound and moderate footing, but that plea will not apply to 1904, and still less will it apply to 1905. Here in 1905—three years after the establishment of peace—we find ourselves with a load of war taxation upon us, imposed only since 1899, amounting to no less than £25,000,000 a year.
  The criticism which I venture to make of His Majesty's Government is this, that with this immense weight of taxation. Budget after Budget passes without any general review of our financial position, which certainly ought to be the first duty of the Government. There has been
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  no endeavour to lay down the lines upon which our peace expenditure should be regulated; there has been no endeavour to co-ordinate the ways and means of the country, the financial power and resources of the country, with the demands of those experts who naturally wish for large expenditure and to whom the Government appear to have given carte blanche. I have heard it said that much of the present embarrassment of Russia is due to certain debility of mind in the nation—a debility of mind which is represented by the expression "Nicheoo": It is no matter; things will come all right" I ask your Lordships whether there are not some symptoms, in financial matters, of that kind of listlessness in this country—not only in the great Departments of the State, but also, I think, to a great extent in the country itself. But surely listlessness on this important branch of our policy is a fatal thing for this country. If it is bad for Russia, how much more so is it for a country which holds the commercial supremacy of the world? If this country is careless about its finance, about the taxes which weigh upon its industries and upon the well-being of all classes, surely it is neglecting the great means which it has in its power of maintaining that commercial supremacy.
  I should like to draw your Lordships' attention to two points showing the effect upon the country of this tremendous taxation. The first point to which I wish to call your attention is this, that this immense weight of taxation which has been placed in the last six years upon the tax-paying public has checked consumption, and the second point is that it has hampered the springs of industry and is, therefore, most ominous for the future of this country. With regard to the first point, I would remind you that from 1842 to 1899 this country pursued a very sound policy. It endeavoured during that time to promote the welling of all classes by a reduction of taxation on articles of consumption, and it is impossible to look at the Reports before parliament without seeing what an admirable effect that had, and how the poorer classes of our countrymen, who at the beginning of that time were really sunk in misery, emerged from that state,

  39
  and to what extent comfort and well-being increased among them. But since 1899, that policy has been reversed, and out of the £25,000,000 of taxation which has been imposed no less than £15,000,000 has been derived from indirect taxation, and £8,000,000 of that sum is derived from the two great articles of prime necessity to the country—namely, tea and sugar.
  Now, what is the result of that? The result has been to increase the price of prime necessaries of life. Not only do I apply that to tea and sugar; it also applies to all the other articles which have been made the subject of increased taxation. It is curious to observe that in almost every case the effect of this has been to check increase of consumption. It has checked an increase of consumption of beer and spirits—matters in regard to which many of us do not care very much; but it has also diminished the consumption of the first articles of necessity, and if you look down the whole line you will see that whereas the consumption of these articles up to 1899 was steadily increasing—the consumption was increasing year by year, and in a larger proportion than the population increased—since that time it has beer a question of retrogression, not of progress, and the amount consumed per head of the most important articles of consumption has actually diminished.
  That is a very serious matter for us to consider, especially when we reflect that the highest financial authorities and statisticians who have studied the state of the working classes have told us that a very large proportion of our population is insufficiently fed. Of course, there are differences of degree in these calculations, and I am not in the least wishing to press the view taken by such an eminent man as Mr. Charles Booth, who has calculated that in London something like one-third of our enormous population is insufficiently fed. But, at any rate, it must be admitted that there is a very large proportion of our immense population insufficiently fed. The remedy for that is very difficult to find. We see the difficulty which His Majesty's Government have experienced in dealing with the question, we see the difficulty which besets Bills like that for the unemployed
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  but, at all events, there is one simple thing which the Government could do and which they have not done. They ought not to increase the taxes on the articles of prime necessity. At the first opportunity they had they ought to have regulated the expenditure of the country so as to enable them to relieve the working classes of that war taxation, which I think I have shown has already checked the progress and well-being of our population. I think most of your Lordships will agree with me that the first object of statesmen, the first object of the Government of this country, ought to be, as far as lies in their power, the advancement in comfort and well-being of all classes of His Majesty's subjects. Can we ever look at a situation otherwise-than as most unsatisfactory in which we are obliged to admit that a large proportion of our countrymen are absolutely underfed? If we only think of that as applied to the younger generation we must come to the conclusion that we who are taking year by year larger Imperial duties upon our shoulders ought to spare no effort to secure that the rising generation shall be efficient to undertake those duties.
  I turn to the second point to which I wish to call your Lordships' attention—that excessive taxation hampers our industries. The population of Germany and the United States is increasing very rapidly and faster than our own, but this curious fact accompanies it, that in Germany in the last fifteen years or more the whole of the increased population have gone into the towns, and that in the United States a very large proportion of the increased population have gone into the towns. Now, what does that mean? It means that a very large proportion of the increased population of these two great countries are turning their attention to manufacture; the result, of course, is that our competitors are increasing in number and the competition they are bringing against us becomes more serious. But that is a natural development which no act of ours could possibly check. What, then, can be done? I venture to think that the first duty of His Majesty's Government is to take care that the traders and the manufacturers of this country have

  41
  a perfectly free hand, and that, having a free hand, they shall be able to produce as cheaply as possible, bearing in mind the maxim, which I think is now pretty well established, that "Trade follows the price list."
  Consider for a moment what has been the effect of our legislation of late years. I do not deny the necessity during a war of imposing considerably increased taxation, but after the war we ought to be in a position to reduce that taxation. I notice that the actual taxes, apart from those additional sums to which my noble friend has referred, have risen from £89,000,000 in 1899 to £118,000,000 in the current year after the reduction which the Chancellor of the Exchequer has made in the tea duty. That is really an increase of nearly £30,000,000. That £30,000,000 has been diverted from employment which might have been of very great use to our traders and manufacturers, to uses which, at all events, are not remunerative. I am not supposing for a moment that the whole of that could have reverted, if I may say so, to the pockets of the people, but at all events a very large proportion of it might, and to whatever extent that could have been done it would have had a tendency to make production easier and cheaper. The whole question is, Can our manufacturers and traders produce and carry on their business cheaper than those in other countries? If we load them with taxation so that they have very little margin left which they can employ use fully in the improvement and extension of trade the case will go very much. against us.
  My noble friend alluded to Mr. Atkinson's statement of the burden of national taxation. I have interested myself in a calculation which shows that the taxes levied by the United States come to about £1 7s. per head, whereas the taxes levied in this country come to £3 per head. I notice that both those calculations omit our local expenditure, to which my noble friend alluded, and also the local expenditure of the United States; but as the local expenditure in both countries very nearly balances, the position is left thus, that in the United States, with their enormous advantages as our competitors—happily
  42
  they do a great deal to tie up their own legs and arms—they are only hampered by Government taxation to the extent of £1 7s. per head, while we are hampered to the extent of £3 per head. I look with very great alarm at such a situation. I may say at the same time that I have read, though I do not accept it without confirmation, that German taxes are only £1 7s. 6d. per head.
  If there is any force in what I have ventured to lay before your Lordships, may I ask whether the Government have really done their duty in the manner in which they have dealt with finance? If there are these dangers before us—and I think they are real dangers, dangers which affect the well-being of our population and the progress of our trade and our means of competing with our neighbours—ought not the Government, within the time which has elapsed since the war came to an end, to have taken serious review of the whole financial situation, to have suggested to the country the lines upon which a peace Budget ought to be established, and to have made it clear to the country that the expenditure, so far as it is incurred, is really required? After what we have heard elsewhere can we really say that what I call the surrender of the expenditure of our great Departments into the hands of the experts has been a success, at all events economically? When we remember the Return which was placed before us at the beginning of this session, which showed that something like 120 ships had been taken off the active list—some of them barely finished and most of them in what I may call the prime of life—may we not fairly put forward the argument, until it is disproved, that there has been an expenditure a great deal in excess of what was actually necessary?
  I do not want to touch upon other subjects to-night, but I was struck very much, on reading the other day the Report of the Comptroller and Auditor-General on the South African expenditure, to find one page, consisting of fifteen or sixteen paragraphs, every one of which calls attention to grave matters connected with the administration of funds in the South African War. I think it is not quite creditable to the Government

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  and to the War Office that, although three years have elapsed, not one of those important references have been answered by the War Office. I fear that that is proof that, at all events under present arrangements, the country has very little security that when this great expenditure is being carried on there is due regard to that economy which ought to be proved and shown to us to exist before the country consents to bear longer the enormous load of £25,000,000 of war taxation.
  THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (The Marquess of LANSDOWNE): My Lords, both noble Lords who have addressed your Lordships this evening speak with special authority upon financial questions, and I am sure that the House has listened to them with the respect to which they are entitled. I have certainly done so, and I go further and say that I am not here to differ from either of them with regard to what I conceive to be the main point of the argument which they have addressed to us. Both of them have dwelt upon the rapid increase of the national expenditure; both of them have warned us of the serious results which may arise to the country if some means are not found of arresting that increase. Up to that point I do not think there will be any difference of opinion on either side of the House; but, my Lords, I feel that the two noble Lords have not, perhaps, been so successful when they attempted to show us in what direction we should look for the retrenchment which they consider so essential. The fact is, that retrenchment in the abstract is always popular and easy to suggest; it is when you get to close quarters with the expenditure, and endeavour to find the particular points at which a million or so may be saved here or there that the difficulty of the task commences.
  When one looks at the principal heads of expenditure, I think one is struck with the feeling that, after all, the area which is offered for retrenchment is a comparatively small one. Take the great heads into which our national expenditure is divided. You have, in the first place, the service of the Public Debt. That is an expenditure of which
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  we are not masters. The noble Lord suggested, I think with great force that we should endeavour to reduce the Debt as rapidly as possible, but a more rapid reduction means, of course, an increase of the annual appropriation for the reduction of the Debt. Then there is the Civil Service expenditure. I think my noble friend Lord Avebury, if I correctly understood him, admitted the great difficulty of making a reduction under that head. I, at any rate, am persuaded that the difficulty is very great. I believe there is not a single Department of the Government service in which the work has not steadily increased for many years past, and in. which a claim may not be made out for the assistance of a staff larger than that which used to suffice in bygone years.
  The noble Lord opposite, Lord Welby, told your Lordships that in his opinion the reduction should be made in the military and naval expenditure of the country, and he gave your Lordships figures showing how expenditure of that class has mounted up. With regard to the Navy, I may remind your Lordships that the Naval Estimates this year do show a very considerable reduction over the Naval Estimates of last year. The difference in favour of this year's Estimates is no less than £3,500,000 sterling—a saving arrived at by the courageous scheme of Lord Selborne, adopted by His Majesty's Government, before he left this country, a scheme which had for its main object the getting rid of a large number of vessels which were costly to the public, but added little or nothing to the fighting efficiency of the Navy. The noble Lord (Lord Avebury) reminded us of the proposal which was once made by my noble friend Lord Goschen, who suggested that it might be possible for this country to reduce its naval expenditure if an understanding could be arrived at with other great naval Powers for a similar reduction. My recollection is that that proposal, the spirit of which, I think, everyone must appreciate, did not meet with any response sufficiently definite to enable us to take action upon it; and I am afraid that one must add that since the time when that proposal was put forward the tendency of other

  45
  Powers has been to add largely to their naval strength and their naval expenditure. And, my Lords, it is surely our duty to remember, when we compare our naval expenditure with the expenditure of other Powers, that there is no country in the world to which a strong Navy is so vital and so essential as it is to this country.
  In respect of Army expenditure, the noble Lord (Lord Welby) suggested that when the war came to an end some means should have been found for at once making an impression on the Army Estimates. Those who have had anything to do with Army administration, however, know only too well that rapid and sudden reductions of Army expenditure are so difficult as to be virtually impossible. You cannot suddenly get rid of men, and, if you do, it can only be on terms which will be really extravagant and costly to the country. We are obliged as a Government to do what we can to effect a reduction in the expenditure on the Army, and my right hon. colleague who has charge of the War Office is, I know, deeply impressed with the necessity of keeping down the Estimates for the Army; but I notice that whenever he puts forward a proposal for applying the pruning knife with any approach to vigour there is an immediate outcry, not from the Army so much as from the public Press and the public generally, in defence of that particular section of our military machinery with which it is proposed to interfere. I do not think I am wrong in saying that if it had not been for pressure of that kind my right hon. friend would have been able to submit to the country proposals more economical than those which are actually embodied in this y ear's Army Estimates.
  I take one other item of increased expenditure which is perhaps typical—the increase, which, I think, reaches to about £500,000, in the Post Office Vote. Some of your Lordships may recollect the history of that question. There was a Committee presided over by Sir Edward Bradford, and that Committee' recommended a considerable addition to the emoluments of the Post Office employees. Here, again, there was a general demand, certainly not from one side in politics alone, but a
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  general demand pressed from both sides, in support of that proposal, and the Estimates went up by the sum which I have mentioned. The fact is that the age in which we live is, I will not say an age of extravagance, but it is an age in which the Government of the day is expected to do more and more for the people of this country, and to do that more and more in a more costly and expensive fashion.
  I was very much struck by what was said by the noble Lord who spoke first (Lord Avebury) who reminded your Lordships that we have to bear in mind not only the growth of Imperial taxation, but the growth of local taxation also. To my mind the growth of local taxation is at least as serious as that of Imperial taxation, for, after all, the country has only one pocket, and, although there may be two sets of hands at work at that pocket, there is only one pocket which has to pay in the end. I noticed the other day a statement which goes to show that while in the last forty years our Imperial expenditure has increased from. £70,000,000 to £140,000,000, our local ex-expenditure has increased from £36,000,00) to £144,000,000; that is to say, that while the Imperial expenditure has doubled within that period of forty year local expenditure has quadrupled. In that connection I would venture to make an appeal to the noble Lord who spoke second, Lord Welby, who has been extensively, I might say expensively, concerned with the financial administration of the London County Council. I am not fully convinced that he has always been found a successful advocate of economy in administering the large resources with which that body has to deal.
  LORD WELBY: I beg the noble Marquess's pardon for interrupting, but I could show him that the increase there has not been so great. I would also like to remind him that Parliament withheld from London municipal rights for something like fifty years after granting them to the rest of the country, and London then had to make up very great arrears.
  THE MARQUESS OP LANSDOWNE: In spite of that I cannot help thinking

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  that the London County Council will be found to have allowed itself a very considerable number of certainly not inexpensive luxuries—I refer to such matters as tramways, buildings for housing the working classes, and I am Even under the impression that the noble Lord has allowed himself a little navy of his own which will run into a good deal of money.
  LORD WELBY: But they all pay.
  THE MARQUESS OP LANSDOWNE: With regard to the actual proposals of the Chancellor of the Exchequer I do not gather that either of the noble Lords were disposed to criticise them at all severely. It is true that Lord Welby described the Budget as a Budget of drift. I should have been inclined to describe it as a transition Budget, intended to deal with a period of transition which must take place at the end of a great war and before the national finances revert to their normal condition. At any rate, the two main features of the Budget—I mean the reduction of the duty on tea and the additional contribution to the Sinking Fund—fall well within the canons which the two noble Lords have impressed so earnestly on the House.
  I wish to say one word before I sit down upon a point which was touched in passing by the noble Lord who spoke first. He told your Lordships that although under the financial arrangements of the year the fixed debt was diminished by £7,500,000 owing to the operation of the Sinking Fund, we have, so to speak, with the other hand increased our indebtedness by additional borrowing for the purpose of naval and military works. His argument, therefore, is that we have not really reduced the Debt, but that the net result of our operations has been to increase our indebtedness by something like £2,000,000. Of course it is possible, if the noble Lord likes to do so, to refer to those two transactions in juxtaposition, but I submit that they should be treated as entirely distinct, and that the connection between them is not as close as the noble Lord would have us believe. Borrowings for special works, usually of a naval and military kind,
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  have always been treated as something outside the normal financial arrangements of the year.
  This is what happens. Some expenditure of a novel kind is suddenly found necessary. Let us say that the developments in the art of naval warfare render it necessary, for the safety of our commerce, to build a new harbour; or let us say that a proper feeling for the comfort and welfare of the soldier impels us to embark upon an expensive scheme of building barracks. In these cases you have to find an amount of money which it is impossible to throw on the Estimates of the year. It would not be fair to the taxpayers of the country that the whole of that expenditure, which represents a more or less permanent improvement, should be thrown upon the finances of a single twelve months; nor, on the other hand, is it right that for such expenditure the fixed debt of the country should be permanently burdened. Accordingly the custom has grown up of providing for the necessary expenditure, in cases of that kind, by means of loans repayable in a comparatively short term of years by an automatic sinking fund. That is what has been done in the present case. Each of these loans gives effect to a policy which has been submitted to, and sanctioned by, Parliament, and each of them provides for a sinking fund by which the loan will eventually be paid off. The sums thus raised ought not to be set against the reduction of the permanent Debt by means of the natural operation of the sinking fund. I do not know that there are any other points that I can usefully notice. I admit that it is right and proper that the financial proposals of the Government should be criticised as they have been criticised by the two noble Lords who have spoken, and I can only say that, so far as I was able to follow their remarks, they criticised them in a spirit to which none of us need take exception.
  EARL SPENCER: My Lords, I reel that we owe a debt of gratitude to my noble friends behind me for having initiated this discussion. The noble Marquess who has just sat down admits, the importance of the subject and

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  applauds in a sense the fact that they have brought it before the House. When we look around we must deplore the emptiness of the benches to-night, and the apparent want of interest which the House feels in this great subject; but perhaps the House did not realise that my noble friends were going to speak this evening on the Finance Bill. We on these benches view the enormous increase in the expenditure of the country with the deepest concern. We think that His Majesty's Government have been remiss in not making a difference between the expenditure in peace and the expenditure in war.
  I quite admit that there has been apathy in the country with regard to this. There has been apathy on the part of the Government. That has been shown on more than one occasion, and in its latest phase it has been shown in connection with what are called the stores scandals in South Africa. We may hear more of that. An important debate is going on at this moment in another place with regard to the heavy responsibility which rests on the Government itself, apart from the individuals who may have had the administration of these funds in South Africa. There is also considerable apathy in the Houses of Parliament. This House has not the charge of finance, though it has, as the noble Marquess admitted, full right to express its opinions. But in another place there does not seem that desire for economy and vigilance over public expenditure which used to prevail there in old days. I remember well that during the short time I was in the other House—it is nearly fifty years ago—there were always one or two Members who made it their particular business to bring financial matters continually before the House. There is nobody who fills that rôle now. There is also apathy in the country itself. It is very often carried away by a warlike feeling, or by a desire to spend money on some particular object, without recognising the need of economy, which is so necessary if we are to increase our commercial prosperity.
  The noble Marquess alluded to the question of retrenchment. He referred to expenditure generally and he began with the Civil Service, and to the difficulty there was in retrenchment in that service
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  at the present day. He said that we were living in an age when the Government were more than formerly expected by the people to lay out money in a costly way. That may be so to a certain extent; but it is, however, none the less the bounden duty of the Government to try and retrench in the various branches of the public service. The noble Marquess referred to the difficulty there was in carrying out Lord Goschen's policy of inviting other Powers to reduce naval expenditure. One of the difficulties was that we had ourselves so largely increased our expenditure, in far greater proportion than any other Power. As regards the Army, the noble Marquess said very truly that sudden and rapid reductions were often very disastrous. I quite agree; but no one has asked for a sudden and rapid reduction. We have asked that some difference should be shown between a peace establishment and a war establishment. We look in vain for a sign of retrenchment. Perhaps I may say there was one indication. The Prime Minister recently made a notable speech in another place. A good deal may be said as to whether it was politic for the Prime Minister to make a clean breast of everything that was felt on the most delicate matters connected with the question of defence, but the speech may have been an indication that the Government did not intend to make larger demands for military expenditure. That speech, however, has been followed by no practical result in the direction of reduced expenditure.
  I do not propose to go at length into this matter. My two noble friends have shown the great necessity there is for retrenchment, and I hope that the wisdom of their words will be taken to heart, not only in this House but elsewhere. The noble Marquess referred to local expenditure, which is a matter of the highest importance. Local expenditure has no doubt increased enormously, and requires careful watching, but, at the same time, we may say that a large part of this local expenditure is made for purposes which are remunerative. I know there is a difference of opinion on that point, but still that circumstance must be borne in mind. In his reference to the London County Council the

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  noble Marquess forgot that my noble; friend behind me (Lord Welby), in his financial statement, which was one of great lucidity, pointed out that, with the exception of the education rate, there was hardly any increase in the county council rate this year. I associate myself with the opinions of my noble friends who have brought forward this subject, and consider that the thanks of the House are due to them for the clear and able way in which they have done so.
  THE EARL OF WEMYSS: y Lords, I think it would be as well that we should have clear statements of the growth of these large items. Take the Army. The Army Estimates in 1853 were £9,000,000; in 1870 they had risen to £17,000,000; and noble Lords know what they are at the present time. I think it would be very useful and interesting if we could get a Return from the War Office and from the other Departments setting forth the causes of these extraordinary increases of expenditure, and what we have to show for them.
  On Question, Bill read 2a; Committee negatived and Bill to be read 3a tomorrow.
  House adjourned at five minutes before Seven o'clock, till Tomorrow, half-past Ten o'clock.