Lords Sitting of 29 November 1909

FINANCE BILL.
Petitions against; of persons signing (2); read, and ordered to lie on the Table.
ASSURANCE COMPANIES BILL. [H.L.]
Commons Amendments to be printed. (No. 234.)

EARL OF DROGHEDA.
Report made from the Lord Chancellor that the right of Henry Charles Ponsonby, Earl of Drogheda in the Peerage of Ireland, to vote at the elections of Representative Peers for Ireland has been established to the satisfaction of the Lord Chancellor; read, and ordered to lie on the Table.
Ordered, That the Report of the Lord Chancellor of the United Kingdom, made to the House of Lords this day, that the right of the Earl of Drogheda to vote at the elections of Representative Peers for Ireland has been established to his satisfaction, be sent to the Clerk of the Crown in Ireland, together with a certificate stating that such report has been made, and that the House has ordered it to be sent to the said Clerk of the Crown in Ireland.

FINANCE BILL.
Debate on the Amendment moved by the Marquess of Lansdowne to the Motion that the Bill be now read 2a resumed (according to order).
THE SECRETARY OF STATE FOR INDIA (VISCOUNT MORLEY OF BLACKBURN): My Lords, this is the first time I have had the honour to address your Lordships' House on any but subjects connected with my own Indian Department, and I therefore feel that I need the same measure of indulgence that your Lordships were good enough to extend to me during the debates on the Indian Councils Bill. I count myself a very unfortunate politician, for during most of the twenty or twenty-five years I was in the House of Commons I was confronted by a Conservative majority. Here I find myself confronted by a Conservative opposition still more inexorable and relentless, I fear, than that which used to confront us in the House of Commons.
What, after all, is the drift and significance
1138
of the Amendment which you are going to vote upon to-morrow night? I think the Amendment, though contained in a couple of lines, and though containing very few words, involves no fewer than five points, each of which I think to be more removed from precedent, departing further from constitutional usage and from practical convenience, than the other. The first is, it arrogates to this House the control of the taxing power. Next, it assumes the power of forcing a penal Dissolution by refusing Supplies. Thirdly, there must be a new Parliament whenever the sitting Parliament has the misfortune to displease your Lordships' House. Fourthly, if these propositions of the Amendment are true, you are proposing to change representative supremacy into what I will venture to call—I mean no offence by the word, but it is the true word—you are changing representative supremacy into oligarchic and non-representative supremacy. Fifthly, this Amendment involves your throwing out of gear the whole finance machinery of the year.
But that is not all. The policy of the Amendment would throw all the financial machinery of the time out of gear. It would do much more than that. What would it do? Our present system is that in Parliament the Government of the day proceed to consider the Estimates and Votes of the year. Those proposals, Estimates, and Votes are submitted to the House of Commons and the House of Commons decides upon them and accepts them. Then the Resolutions are passed and taxes are collected under the authority of these Resolutions by custom if not by law; taxes are collected, and all goes on in regular, well-understood, and well-established order until the Appropriation Bill is passed and the Resolutions become law.
Let us see what will happen under the policy of this Amendment. It will be ridiculous for a Government or for the House of Commons to set to work in April when, for anything they know, by July they may be given to understand from important authorities in this House that this House is not at all likely to agree to those proposals. I hope I have made this position clear. If the Government with the confidence of the other House frames its proposals, the House accepts them, and the various officers concerned are working upon them; then if your Lordships do not pass the Finance Bill their

1139
work will be fruitless. If that is going to be our system, so be it. I can imagine—and I am not sure that there are not cases—two Chambers having voices in finance. It might be so in this country if you make a tremendous revolution. That is not our system. Why cannot you have that system here under the present state of things? My Lords, I will venture to tell you why, and I will tell you, not in language of my own, which you might resent, but in language of one of the most eminent and respected leaders who ever sat in this House—the late Lord Salisbury. This is the reason why you cannot have a working system founded on an agreement between the leaders in the House of Commons and the leaders in this House. This is what Lord Salisbury said in 1894. Speaking in your Lordships' House he said—
" We belong too much to one class. The consequence is that in respect of a large number of questions we are all too much of one mind. That is a fact which appears to me to be injurious to the character of this House as a public assembly."
Those are words that I believe most of your Lordships fully admit in your hearts, and these are the reasons why you cannot, so long as you have two Parties' in this country, have a financial arrangement made by agreement between the two Houses.
Now I have said you are assuming in this Amendment your right to call for a Dissolution of Parliament, and I was rather amazed at the noble Viscount (Lord Milner) on Friday last. Speaking at Glasgow, he said—
" An autocratic House of Commons—you cannot imagine what things it might do—it might even prolong its own existence and repeal the Septennial Act."
as if repealing the Septennial Act were not the very operation that your Lordships are to-day performing! I mean performing in spirit; you do not literally do it any more than a wild-cat House of Commons. This Parliament was elected in January, 1906, and would come to an end by the Septennial Act in 1912, or by established custom and practice in 1911; but you say to the House of Commons, "We do not like your Budget and so we will refuse Supplies, and in spite of the Septennial Act, and in spite of the prerogative of the Crown, we will send you back to the electors at the end of the fourth year." So do not let my noble friend talk of the sanctity of the Septennial Act.
1140
What is the ground for taking this moment for digging up pretensions of the sort I have indicated in these five propositions? What is the ground for digging these pretensions out of their ancient sepulchres? If you adhered to unbroken precedent and the normal course of established and traditional practice, you would have accepted the provisions of the Budget as they have always been accepted; you would not have intercepted Supplies granted to the Crown by the House of Commons, and you would have left the House of Commons to run its course. The noble Marquess said thoughtful people were leaning undeniably towards Tariff Reform. So be it. Should we not have expected a Statesman with the destinies, not only of a Party, but of much more than a Party, in his hands, to be glad of more time to allow this process in the minds of thoughtful people to run its course, so that what is now only a leaning might ripen into a solid conviction, so that the currents in favour of Tariff Reform, which it now appears are running rapidly and satisfactorily to the noble Marquess, should be allowed time to broaden into a great main stream? I should have thought from my observation of Parliamentary tactics over a good long time that that would have been the reasonable and judicious course from the Tariff Reform point of view. Time also might have given us an opportunity for enabling us to understand a little more of what Tariff Reform is to which we are now leaning. But apart from that, would it not have been, in the ordinary views of political strategy and political tactics, wiser to have let the alleged transitory mischiefs of the Budget run their course, and then have taken your appeal to the wearied and exasperated electorate? That would have been, I confess, my own view.
I have listened with respectful attention during the course of this debate, and I should like to deal, if I may, with what appeared to me to be the grounds of support given to this Amendment. The first is this, that this House has the right to reject the Budget Bill. The bare legal right has not been denied. Some, no doubt—and I do not know that I would quarrel with them—would argue that the bare legal right may, on certain occasions, be appropriately transformed into a moral duty. Yes, but I can imagine a state of things—I can imagine it with difficulty—which would

1141
justify the transformation of a legal right into aspects of moral duty by reason of the wild-cat proposals of a demented House of Commons.
I will try to show that that case has not yet arisen. There has been no serious attempt to show that the assertion of this bare right, by foisting a constitutional crisis upon the top of a financial deadlock, is in any way provident, sensible, or likely to serve one single useful end. Nobody pretends—and I am sure the most ardent of noble Lords opposite does not pretend—that there is an absolute security that this shrill, this unexpected assertion of a bare right, a barren right, will produce the results which you desire. Then it comes to this—as was said in a phrase used by a man so guarded and careful in his language as my right hon. friend the Foreign Secretary—that your Amendment is a gambler's throw. I venture to associate myself with Sir Edward Grey in the characterisation of this operation. We are told—I have seen it in some of the prints which support noble Lords opposite—the old historic situation of Lords and Commons is now entirely reversed. It is the House of Lords which is now the champion of the popular rights against what the noble Marquess, quoting Cromwell, called the "horridest arbitrariness of the House of Commons"; and I have seen it stated that the noble Marquess is the John Hampden of the twentieth century. If I agreed with that I should certainly think I was paying the noble Marquess a very great compliment. But I do not myself take that view at all of the operation which is now proceeding.
I do not believe that anybody will soberly contend that by throwing out this Budget you are asserting popular rights. And I am a better Whig than the noble Marquess. He will remember the name of a predecessor of his illustrious political line—Lord Shelburne. Lord Shelburne said in 1778—and apparently his view has descended to the noble Marquess—
" I shall continue to be of opinion that your Lordships have a right to alter, to amend, or to reject a Money Bill, and I say that this House is equally with the House of Commons representative of the people."
Yes, but there was a greater man even than Lord Shelburne, eminent as he was, and that was Burke. What did Burke say to Lord Shelburne? He said of the House of Commons—
1142
" We are the sole representatives of the people. The Lords have no right to the disposition, in any sense, of the public purse."
I commend respectfully to the noble Marquess the perusal of some of the writings of that illustrious Whig. I really do not know where you will find any serious authority, certainly within the last 100 years, for depriving the House of Commons of the sole control of the taxing power.
I now come to another point. You say that we, the Government, have no mandate. You say this Budget was never brought before the electors in January, 1906. Well, I am myself utterly averse to these, what I call foreign, ideas. Lord Balfour of Burleigh spoke of this in a speech of which I may perhaps be permitted to say that it was a speech of which, whether you agree with its conclusions or not, by its ability, by its disinterestedness, and by its transparent sincerity, any political assembly in the world might have been proud. He remonstrated with the doctrine of mandat impéralif, and all the rest of the jargon; but he, I think, employed it in regard to the relation of a member to his electors. I go further. I may recall that in 1902, when noble Lords opposite brought in their Education Bill, it was a common taunt or remonstrance on the part of many of my political friends that the election of 1900, which placed them in office, was a war-election, and that they had no mandate. I dissociated myself then from my political friends, and I hold firmly that all this idea of an election ad hoc, of a referendum, a plébiscite, and a mandate is a complete departure from the wholesome usages of this country.
I particularly, for my part, object to the referendum. Why? Because it weakens what is the most important thing for this country to maintain—the sense of responsibility in the House of Commons. If you tell the House of Commons that they are liable to have a given conclusion of their own submitted to other people—whether they be members of this House or people in the country—you weaken their own personal individual and collective responsibility. What I say as to mandate, and this is my view after pretty careful consideration, is that no doubt you may have an election where a Minister and a Party have a majority to do one particular thing, as, for example, Mr. Gladstone in 1868 to carry the disestablishment of the

1143
Irish Church, or Sir Robert Peel in 1841 to maintain the Corn Law—a mandate which was not entirely respected. A Minister and a Party may have a mandate to do one particular thing, but my argument is that that carries with it no sort of exclusion from that Parliament's doing any other thing which it considers it right and fit to do. I believe that is sound doctrine. My view is that when an elector goes to the poll he is voting for the House of Commons to make laws, to watch administration, to support a Minister or a Party for a certain number of years in Parliament—and more often, by the way, partiality for a Minister has at least as much to do with the decision as his particular enthusiasm for any particular question. I think our electoral history will show that, and I say that a Parliament so chosen is not, and cannot be, fettered in any matters with which it thinks fit to deal. Therefore I will brush aside the argument that we have no mandate.
By this Amendment you are subjecting the Budget to what is called, in the jargon to which I have referred, a plébiscite. If there is any one matter which cannot be usefully or wisely submitted to a plébiscite it is a Budget. It is one of those things on which you cannot say, Yes or No. How can any one say Yes or No to this Budget? Noble Lords here do not like the Budget, but the Budget contains any number of provisions, qualifications, intricacies; it is a complex of things to which you cannot give a plain Yes or No, which is the point of a plébiscite. Therefore, if anybody says he thinks the Budget is a good thing for a plebiscitary operation it can only be because he has not well mastered the practice of referendums and plébiscites. The electors can undoubtedly demand a financial policy. They can demand, for example, though I think it would be an evil day, Tariff Reform. So be it. They can demand a policy. They can punish a Minister by dismissing him when the time comes. What they cannot do, I submit, is to break into the middle of a fully-planned executive scheme for supplying the public needs of the year—three-quarters of which year, by the way, at this moment have expired. The electors must trust those whom they have elected to the present House of Commons; they must acquiesce in the action of their own representatives who have had the whole case before them, all the facts, conditions, arguments, possibilities,
1144
who have fixed the Estimates and decided on the ways and means for satisfying them.
Now another point. It is argued that you will vote for this Amendment because you want to arrest Socialism. I am, and always have been, a pretty strong individualist. But just let us look at these Socialist allegations and the assumption that by rejecting this Bill and passing your Amendment you are putting a spoke into the wheel of Socialism. The people of this country are either of the predatory species or they are not; they are either in favour of predatory, destructive Socialism or they are not. If they are, it is quite certain that the success of this Parliamentary operation of your Lordships will not set up any dam or rampart or barrier against the great destructive flood such as would then arise. Anyone who tells you that by passing this Amendment you are obstructing Socialism is as foolish as were the courtiers of King Canute. But I do not believe, and I am quite sure all your Lordships do not believe, that our countrymen are a predatory species. No Englishman can think so.
If you will forgive a passing personal reference, it was my fortune to be—I only mention it to show that I am not talking of the working people of this country with a Utopian head in the clouds—for twelve years a Member for what was in those days one of the largest constituencies in England. It was an enormous constituency, and my return was always due to the skilled artisans, mainly workers in the famous Elswick factory—skilled and admirable artisans. It is true that at the end of twelve years they turned me out, but I had plenty of time—and I am not entirely without the faculty of observation—to satisfy myself that the skilled artisan of this country, aye, and many more than they, are not men wearing the Phrygian cap. No, they are not "Reds." Then, what is it you are so afraid of under your designation of Socialism? Suppose I am wrong. Suppose that a dangerous Socialistic tide is running, then I put this question to your Lordships: Is it wisdom, is it political sagacity, does it show that circumspection which we have a right to look for in this House, to take ground which must, however unfounded you may declare that it is, and however unfounded it may be, expose you to the charge that you are

1145
straining the Constitution, and straining it as champions of the rich against the poor? Electioneering is rough-and-ready work.
I should have thought it was well worthy of the consideration of the noble Marquess and his friends, whether, if you be right and if there be a dangerous tide of Socialism running, and going to run, it is wise of you to take up a position which exposes you to a suspicion, and a charge of that kind. My own view about the present aspects of Socialism is that there is, as the noble and learned Lord on the Woolsack said the other night, a great feeling prevailing quite beyond the lines of Party in this country at present of pity, of sympathy, and of horror at the miseries which our industrial system entails. We all feel it. I have never, I think, heard in my life a more moving speech than I heard in this House from the Bishop of Southwark when he was talking about the word "unemployable," and about people describing the unemployed as unemployable. A more noble vindication of this emotion of pity and sympathy I have never heard, and it is sound.
There will, no doubt, be foolish proposals made by the pitiful and sympathetic, whether politicians or philanthropists outside politics—there will be proposals made, if you like, full of charlatanry and full of quackery. But, anyhow, it is inevitable to anybody who has followed the course of movements of a Socialistic kind in France and other countries that you should have these experiments tried. My own hope, my own conviction, is that at the end of these experiments there will be left behind a fertile and fertilising residue of good. Mill, whose name has been so often quoted in these debates on fiscal matters, said at the very end of his life he was averse to Socialism, and in a certain production of his, where he described the possible dangers of Socialism, he said—
" If Socialism with all its dangers was the only alternative to the horrors of our present system I would be a Socialist."
The noble Viscount, Lord Milner, said the other day that he would be very sorry to be a member of a dummy House of Lords, and I suppose any one who sits in an assembly, however new a comer he may be, would be very sorry to sit in a dummy assembly. He would rather absent himself altogether. But there is something worse than a dummy House of Lords, and that is a dummy House of Commons. What else
1146
does this operation which you are going to consummate to-morrow night mean than reducing the House of Commons to a dummy? They discussed the Budget for six months. I forget how many hundreds of sittings and how many hundreds of Divisions there were. I understand from those who speak with a certain impartiality that it was discussed with a freedom and a fulness of detail almost, if not entirely, without precedent in our recent Parliamentary annals. In the course of that prolonged ordeal it was not transformed in principle, but it was transformed, changed, and amplified in detail.
Nothing has surprised me more in listening to this important debate than the curious argument which is drawn from the fact that the Government accepted a great many Amendments, and literally had 250 Amendments of their own at the last stage. But suppose the Government had accepted no Amendments, or very few, or suppose they had not listened to any representations, then we should, of course, have heard here the other regulation set of observations made on these occasions. We should have been told that this was a most imperious Government, most unconciliatory, most perverse, and all the rest of it. There was no guillotine. There were ceaseless interviews with deputations, and yet all this prolonged and careful labour, discussion, thought, contrivance—all that is to go for nothing, and all its results are to be pulverised and brought to naught by a trenchant sweep of the noble Marquess's arm. That is what I call making a dummy House of Commons.
In the Division on the Third Reading, what were the numbers? They were 379 for the Budget Bill and 149 against it. In this House, to-morrow night, let us suppose it is 500 against fifty. My Lords, the more triumphant your majority, the more huge the disparity between your numbers and ours, the more flagrant the political scandal, and the more blazing in the public eye the Constitutional paradox. Such a contrast as that, 379 against 149 in one House, only a four-year-old House, and 400 or 500 in this House against forty or fifty—I say it cannot last. You may argue as you like about rights. You may say, as the noble and learned ex-Lord Chancellor did, in a genial speech which we enjoyed, all the more because the force of argument was not destructive of the Bill, that the word "Constitution" may be an idle and spurious catch-word on our lips, full of

1147
sound and fury, but signifying nothing. But that paradox cannot be. It is against common sense. It is against the course and operation of things. It cannot be.
I will ask you to listen to what the eminent and accomplished man who leads the Opposition in the other House said—
" It is the House of Commons, not the House of Lords, which settles uncontrolled our financial system. It is the House of Commons, and not the House of Lords, which determines by its vote whether such and such a Minister should continue to have such a measure of general confidence as would justify the Sovereign in further employing him. I am a House of Commons man."
I do believe that this notion that you can deprive the House of Commons of its power, that you can so interfere with the exercise of its power as to amount to a practical deprivation, is the most rash dream that has ever made its appearance in the politics of this country since the days of the Fifth Monarchy men in the seventeenth century. I do not believe that the Fifth Monarchy men were a bit more dreamers than noble Lords opposite who sit in this place and think that they can override the House of Commons.
Your prominent reason for this Amendment, which I must call a revolutionary proposal, is that the Budget itself bristles with revolutionary proposals. But, my Lords, does it? It is very easy to use the word "revolutionary," but you must begin by remembering, if you will, that we are in an era, quite independent of this year and quite independent of the Budget, of a deficit of sixteen to eighteen million pounds. Such a deficit I should think has never been seen—I will not commit myself to that, but a deficit of sixteen or seventeen or eighteen millions constitutes the beginning of momentous finance. Let me first take the increases in the Income Tax and the Death Duties. What did Mr. Balfour say upon them? Did he say that they were revolutionary and would justify a revolution in our Constitution? This is what Mr. Balfour said on the Third Reading of the Bill on the 4th of this month—
" There was a Division in the House of Commons against the Super Tax, but there was no division against the Income Tax or the Death Duties, so I am informed, either in Committee or on Report. Though, as I told the House before, I do see great danger in these taxes, I have always held one language on this subject from the first day that I spoke in April last till now."
And these are the words to which I invite your Lordships' attention—
1148
" I quite admit that if there is no other way of finding the necessary resources for carrying on the work of this country and fulfilling its obligations, you must have recourse to Income Tax and to Death Duties to an amount and of a character which would have horrified every great financier, Liberal or Conservative, in the past."
Therefore, my Lords, you see that Mr. Balfour, at all events, did not find the proposals affecting Death Duties and Income Tax revolutionary.
Then there is graduation. That is thought by many members of your Lordships' House to be revolutionary. Is it? There is no new principle in graduation. The Income Tax was always graduated from Pitt's time till the present. Up till 1906 the principle of graduation was only applied to small incomes. But if it is right and not revolutionary to graduate the tax upon incomes up to £1,000 a year, say, what is there revolutionary in extending the principle to incomes of £10,000 a year? And, mark this, these Death Duties and Income Tax are not fastened on the shoulders of either rich or poor for all eternity. They are revocable at the first moment noble Lords opposite and their Party come into power. They may then cut down the Death Duties, they may lower the Income Tax, they may do whatever they will, but I hope that I shall be allowed to see their perplexities if they make any attempt of that kind. As to the Super Tax, Mr. Pitt thought 2s. in the £ not too much for even moderate incomes in an emergency to pay, and for seventeen years it was paid. But we call on nobody now, I think, to pay more than 1s. 8d. Now as to the licensing proposals. What is there revolutionary there? There is no revolution. The new scale of licensing duties may be good or it may be bad; it may be open to criticism and objection. I dare say it is. It would be very odd if it were not. All proposals of this kind are open to objection, but no revolution. It used, I think, to be the practice to charge fifty per cent. licence duty on the smaller houses and a lower duty on the larger houses. This Budget equalises those duties. And may I remind your Lordships that Lord St. Aldwyn—who, by the way, I have been so accustomed to see in financial debates for so many years that I quite miss him on this occasion—when he was Chancellor of the Exchequer admitted that the scale was inadequate for the larger houses? It is therefore a question of degree, and there is no revolution there.

1149
As for the taxes on land, I certainly will not invite the House to embark on that formidable and complex theme, not because I am afraid but because it would take a great deal too much time. But I will Kay this, that there is no principle in the land proposals for which you will not find the authority of writers of the highest and accepted repute. Mr. Gladstone has been referred to, and we have been told, inside this House and outside, that Mr. Gladstone would have made short work of this precious Budget if it had come near him. The noble and learned Lord, Lord Ashbourne's, praise of Mr. Gladstone was delightful to me to hear, because I very often heard him years ago take another line, quite naturally. But when that great and famous man was happily among us—I think the noble Marquess who served under him will agree with me—it was not always the easiest and simplest tiling in the world to be quite sure, after he had listened to arguments, upon which side he would come down. Therefore, I have listened with amazement to the confidence with which, not only in this House but in the newspapers, it has been said: "If Mr. Gladstone were here he would make short work of all of you, and we wonder you who knew him do not blush at accepting responsibility for proposals which he would have pronounced as most pernicious." The first of a great many conflicts that Mr. Gladstone had with this House was upon the Succession Duties. It is all very well now to say what a great man he was and what a wise Statesman, but let me call your Lordships' attention to the language that was used in this House about the Succession Duties. When land was made to pay like other forms of property, the Succession Duties were called "essentially impracticable," "unjust," "cowardly," "absurd," "one of the most detestable and odious measures ever proposed," "he is a vulture soaring over society waiting for those to die so that he may appropriate their goods." My Lords, this vulture has now become an eagle or a swan, and who knows, such are the chances and changes of our modern life, whether some of the very young members of the present House may not live to see the day when our present Chancellor of the Exchequer, who is now little liked here, may undergo the same conversion.
Now if I am not wearying the House, I should like to say a word about the very able and interesting speech which was
1150
delivered the other night by my noble friend Lord Revelstoke. It was a most interesting speech, but I do think that the noble Lord fell into the great human fallacy of attributing to one cause effects really due not to one cause alone but to a multiplicity of causes; and to me it seems quite astounding, and I am not entirely unversed in economic matters, that anybody in his great position and with his experience should dream that the Budget alone would produce all the phenomena which he described with so much power. Let us look at the facts. He complains that we, the present Government, are injuring British credit. Let us look at it. From 1898 to 1905 Consols fell from 113 to eighty-nine. He dwelt upon that. But, my Lords, experts toll me that there are three causes to account for that. First there was the increase of the Debt for the Boer War—a war which my noble friend on the Woolsack and I, at all events, have no responsibility for. Secondly, there was the extension of trustee securities, which was done not by us but by the late Government; and, thirdly, there was the Irish Land Act of 1903. Those three factors are still operating, and I might remark in passing that the two European Powers who are now suffering most from the burden of armaments—namely, Great Britain and Germany—are the two powers who also for the last few years have been suffering most in the matter of credit. Let me criticise, if I may, the view the noble Lord took about these figures of Income Tax, in order to revive the courage of your Lordships and of the country. The gross amount which came under the review of the Income lax Commissioners for the year 1898–9 was £762,000,000. In the year 1908–9 that £762,000,000 had risen to £980,000,000—that is to say, nearly £220,000,000 increase in ten years. I know the noble Lord will say that I have not allowed for the greater efficiency of collection so I will allow for that a quarter, or, if you like, I will be very handsome and will allow that one half of that £220,000,000 of increase was due to expedited collection. The Income Tax payers of this country, who only number 1,100,000, were, therefore, better off, even knocking off the £110,000,000 for better collection, by £110,000,000 a year than they were at the beginning of the previous ten years. The Death Duty figures, I admit, do not fully sustain the same conclusion as would arise from the Income Tax figures, but there they are.

1151
Now, my Lords, let us look for one moment at other figures from the Board of Trade returns. During the last ten years ten million persons, the aristocracy, so to call them, of skilled labour, increased their annual wage by about £10,000,000, nearly the whole of which has been attained during the last four years; but you have to set off against that a steady rise of rents, and some rise, tolerably recently, in the price of food. I do not pretend to have exhaustively dealt with the noble Lord's case, but I have pointed out that it must be taken with a discount; and I go on to ask this, Were we at this hour of momentous finance, when we are bound to look wherever we can, with justice and equity, to find resources to raise the money required by the State from the funds of wealth or from the nearly stationary wages of labour? I beg your Lordships to ask yourselves, if any of you were Chancellor of the Exchequer and that question were propounded to you, whether you would be in a hurry to answer it. You would, I think, come to the same mind as the mind of the present Government, and that the substantial justice of the Budget proposals are, to some degree at all events, vindicated by figures of that kind. My Lords, I have detained you too long. I only want to say that I do not feel—and I say it with all deference and respect—that the policy of this Amendment has been thought out to all the ulterior conclusions that it contains. Many members of this House evidently agree with that view. One noble Lord who always interests the House, Lord Newton, said that they had been "jockeyed"—I think that was the expression—into this Amendment. Who jockeyed them I did not gather.
LORD NEWTON: Lloyd-George.
VISCOUNT MORLEY OF BLACKBURN: Without going into personal points, because this is not merely a personal matter, it is a very significant fact that four of the most powerful speakers who have addressed your Lordships from that side of the House and from the Cross Benches will not follow the noble Marquess into the Lobby. I do not say at all, and have never promised, that this Budget will bring right away the Millennium, but I am quite certain that it will not bring Pandemonium. It will bring neither the Millennium nor Pandemonium, and I think that noble Lords opposite are beginning
1152
to feel that perhaps their apprehensions were unduly aroused. Let me make one observation to which I believe the noble Marquess will attach certain weight. When Mr. Gladstone was going through his early financial operations he was watched by nobody in the world with a more eager interest than by Cavour. I am not speaking quite without the book when I say that there are now Ministers in European countries, with their own battles to fight, who are watching with some anxiety and some apprehension the double issue, fiscal and constitutional, in which we are involved by these proceedings. For many glorious generations England has been the stable and far-shining model of reform, and any clouding of her position in either fiscal or constitutional policy will be a gain, and a heavy gain, on the Continent of Europe to the parties of reaction. I may say that in the part of the world with which I am for the moment very responsibly connected—India—they are watching us, I do not mean to say the malcontents merely, and there is great interest taken in all our changes of fiscal view. I do not envy the Indian Government of the future, if you accept what is at the back of this Amendment—a new fiscal policy—I do not envy the Government which will have to deal with the claim of the Indians to have their tariff reformed too.
Lastly, the noble Marquess must have foreseen that the success of this Amendment and its consequences must lead a pretty straight way to constitutional revision, and I am sure he must know that there is no such battle ground, if you look at our own history in the seventeenth century, at the modern history of the United States, or at that of half the countries of Continental Europe, for the fiercest and most determined conflicts as constitutional revision. With regard to the Second Chamber, I venture to call it the pons asinorum of democracy. I hope noble Lords will recognise that. The scene in this House during the last ten days must not, I think, be counted one of those brilliant and exciting stage plays, political and party stage plays, of which some of us have seen so many. I think it is much more than a mere stage play. It is the first step on a tremendous journey, and, as we all know, when we troop off home to-morrow night we shall not think that, though the theatre is empty, the curtain has fallen upon a completed drama. We shall all know in

1153
our hearts that the note has sounded for a very angry and perhaps prolonged battle.
LORD ROTHSCHILD: My Lords, if I venture to rise to say a few words after listening to the eloquent speech of the noble Viscount, I can promise you that I shall only detain you for a very short time, knowing full well that nothing I can say will influence the votes and decisions of any of your Lordships. But I think it right that your Lordships should know what I believe to be the views of the majority of those citizens of London whose avocations take them daily into the City. When I talk of the City I do not mean only the members of the Stock Exchange and those who noble Lords opposite seem to think frequent Capel Court and Shorter's Court, but I am talking of men who are associated with the trade and commerce of this great country, without which trade and commerce England could not exist. My Lords, the City fully recognises that whatever expenditure may have been incurred, and whatever expenditure for whatever purposes may be necessary, it should bear its full share, and more than its full share, of that expenditure, so that the taunts which are levelled at the City that it advocates expenditure which it is not willing to bear its proportion of are groundless.
The City objects to and criticises many of the provisions of the Budget because it believes that those provisions would undermine credit and destroy confidence and in that way would impair the resources to which every Chancellor of the Exchequer looks for the greater part of his revenue. Although not directly interested in land, whether urban or rural, the City objects to the taxes which it is proposed to levy on land because it believes that it is the first time in the financial history of this country that taxes on capital are to be levied in that way, and that at not infrequent intervals what is called a portion of the unearned increment is to become the property of the State. The City objected to the Land Taxes when they were introduced, because it was proposed to levy those taxes on the bare word of officials without appeal to the law. It objects to them now because these taxes are to be levied and an appeal to the law is only to be allowed at a later period, whenever that may be, when the valuation is made. My Lords, when these taxes were first introduced to the public notice
1154
they were advocated, I think, on the ground that they would affect a very few people—in fact, I may say, a very small number of your Lordships' House. Since then it has been reluctantly granted that the number of landowners was 250,000, and afterwards that number was increased to 1,000,000. Among the million are several insurance companies, and the largest landowner in the administrative county of London, is, I believe, an insurance company. But quite apart from the land which insurance companies may hold, there is not an insurance company, there is not a friendly society, there is not a building society, there is no society of an analogous nature, that has not lent very large sums of money on land mortgages. If future legislation were to impose heavier taxes on land, the mortgages which form part of the security or the assets of 30,000,000 of policy holders might be seriously impaired.
But quite apart from the future. Unemployment is always looming before your Lordships' House, and one of the causes, in my opinion, of unemployment at present is the great difficulty that builders have, not because land is held up, as is often said in this House, but because of the difficulty they have of borrowing money, which they used to do with great ease. My Lords, the Super Tax has been severely criticised in the City; I will not say for its amount, but it is believed that by the Super lax a new kind of Holy Inquisition is being set up which will pry into every one's affairs. I received a few days ago a letter from a friend of mine, a gentleman of high standing and deserved popularity in the City of London. He is a gentleman who prides himself on having been—and he still is—a lifelong Liberal. With your permission, my Lords, I will read his letter. This gentleman writes—
" In the case of ordinary Income Tax assessments are made by additional Commissioners, while the right of appeal if allowed to an independent body or the general Commissioners of the district, generally consisting of gentlemen of high standing and position in the neighbourhood. In the case of the Super Tax the only appeal allowed is to the Special Commissioners. That is the same body against whose assessment it is desired to appeal. There is, therefore, no appeal to any independent or impartial body on questions of fact, though on questions of law a special case can be demanded to the Courts. Thus, in the case of the Super Tax, an assessment can be arbitrarily made by paid officials, the appeal heard, and the duty collected without the intervention or control of any impartial body. There is, I believe, no similar instance of such powers in the levying of any tax."

1155
It is not necessary for me to read the whole letter. My friend writes that this is a novel principle. To my mind this setting up of independent bodies above the law is the chief plank in the platform of all the proposed legislation of His Majesty's Government.
My Lords, I might, if I trespassed on your kind indulgence, criticise many more of the details of the Budget, but my chief object in rising this evening was to point out to your Lordships what is the effect of these Budget proposals. It is evident to any one in the City that there has been a very large efflux of capital. That efflux of capital differs very considerably from the raising in this country of foreign loans for a Government or for any of those enterprises like the railway in Argentina, so ably fathered by the noble Lord, Lord St. David's, opposite. I think I am right in asserting that my grandfather was called to give evidence before a Committee of your Lordships' House, at the beginning of the last century after the great war. My grandfather told your Lordships then that the raising of foreign loans in this country had two effects. Of the money raised he asserted that a large portion was spent in British manufactures, that the money sent home for interest and sinking fund sometimes came in specie, but oftener in goods and in produce; and he pointed out to their Lordships then that the raising of foreign loans was essentially beneficial to the trade and commerce of this country. No one disputes that at the present moment. And it is not at all necessary for your Lordships to listen to assertions of that kind on both sides of the House. In the newspapers last week it was stated that the Government of the Argentine Republic, imitating other Governments, had ordered twelve destroyers, and so as to make no difference between the three countries from which they had borrowed they ordered four in England, four in France, and four in Germany. What was true, as my grandfather told your Lordships' Committee then, is true now.
I noticed the other day that Mr. Haldane told a company of young men at a luncheon that if English money sought foreign investment it was because there was a plethora of money in this country and we did not know what to do with it. I can tell Mr. Haldane, from my limited experience, that, while it is very easy to get money for foreign investments, it is
1156
difficult, if not impossible, to obtain those sums for even the best English enterprises. If I understood the noble Lord, Lord St. David's, accurately the other evening, he said that the depression of English securities was due to the aftermath of the war in South Africa. I wonder if the noble Lord thinks that the recuperative power of England is less than the recuperative powers of Russia and Japan. I know he does not think so. How then does he account for the fact that since the peace in the Transvaal all English securities have depreciated, while since the end of the struggle between Russia and Japan, Russian and Japanese securities have improved, although Russia and Japan may have borrowed since then as much as the noble Viscount says England has?
*VISCOUNT MIDLETON: My Lords, I think there will be common consent that the two speeches to which we have listened to-night have maintained the debate at the high level of tone and of interest which it has reached during the preceding four or five days, and I am glad that His Majesty's Government appear to concur in that view. I noticed that a distinguished member of the Government, speaking three or four days ago—had to deal with rather a difficult audience and with a considerable amount of interruption at the back of the hall, and after complaining of the unreasoning hyena-like cat calls, he said, discussing the debate in your Lordships' House, that the debate here was being conducted with a levity which he could only compare to the levity at the back of that hall. If the First Lord of the Admiralty continues his speaking on that level, then the Chancellor of the Exchequer and the President of the Board of Trade and even the Lord Advocate may have to look to their laurels.
To-night we have been treated to a somewhat different display, but I wonder whether the noble Viscount, in the long list with which he began his speech of the changes which would be made in the relations of the two Houses by the brief Amendment which has been submitted to your Lordships, has really considered the relations between cause and effect. He accuses us of arrogating to ourselves taxing power, of forcing a penal Dissolution, and also of establishing an oligarchy in substitution for the representation of the people. But how can we be arrogating to ourselves the decision upon this Budget? How

1157
can we be said to be establishing an oligarchy by inviting popular opinion at a General Election upon these financial proposals? The noble Viscount may remember a passage in which it was written that even religious fanaticism could not exercise a greater tyranny than the domination of a single Chamber, and I was rather surprised at the use which he made of his own view regarding the doctrine of the mandate. It is quite true that in the last Parliament the noble Viscount was not one of those who pressed strongly in the House of Commons the view that the late Government had no mandate after the conclusion of the war. But on how many nights was that Government faced with strong objection to their taking any action whatever because they had no mandate—not to take action to impose taxation which must continue over many years, but to prevent their even holding views with regard to future taxation which they had undertaken never to submit to that Parliament before they had been the subject of decision by the constituencies?
On the first night of the debate the Lord Chancellor laid down that our action, though not illegal, would be unconstitutional. The unconstitutional theory has been entirely abandoned to-night. I venture to think that from the moment the Lord Chancellor admitted that our action would be legal, he left the domain of law, in which he is master, and came into the domain of custom, with regard to which your Lordships have some right to an opinion; and in the domain of custom, from the moment that Lord Salisbury adduced, in, as I thought, a most admirable speech, the opinion given last session by the Lord Chancellor with regard to the rejection of Money Bills, the whole question of unconstitutional action fell to the ground. My Lords, I wish that with it some of the unsound financial theories which have been advanced in favour of this Bill had also fallen to the ground. The theory to which we object with regard to this Budget is one which is absolutely novel in our political history. The old financial theory was that you should spread your taxation over the broadest basis, and levy it where it would least be felt. That is not the theory on which this Budget is based. The theory on which the Budget is based is that you should spread your taxation over the narrowest basis and levy it where it will most be felt. There is not a Chancellor of the Exchequer who in this generation
1158
has brought forward a Budget who has not pointed out, wherever he found a tax would lose in elasticity, that that tax was in itself in jeopardy.
But what did we hear from the noble and learned Lord on the Woolsack the other day? It was so good an illustration of the view of the Government that I trust I may be pardoned for pointing it out. The noble and learned Lord spoke of the Whisky Duty, and had before him the statement of the Chancellor of the Exchequer that the enhanced Whisky Duty had lost something like £500,000 in the first few months, a sum which the Chancellor of the Exchequer said could never be recovered. It was gone for ever. But the noble and learned Lord said that among the indirect and most valuable results of the Budget had been the large diminution in the consumption of spirits since these taxes were imposed. This is a Budget brought forward, as we are told, not to penalise any particular individuals. It is not brought forward as a measure for improving the deficient morality of the people, but for filling up a depleted exchequer; and here we have a Budget on which there is unanimity in the Cabinet, and on which the Chancellor of the Exchequer told us that the best intellects of the Cabinet had been engaged for many months—this Budget, which has lost in the first few months a sum of nearly a million of money, which has involved a further raid on the Sinking Fund, and has been followed by a further fall in Consols, is cited with satisfaction by the noble and learned Lord. We all, of course, admire him as a humanitarian and as a social reformer. It may be very good morality, but I submit that it is very bad finance. Again, it is not merely what is said by the Government, but what is not said.
We have listened to four important speeches from high financial authorities on this side of the House, not the least important of which was delivered by Lord Rothschild. What answer have we heard? The noble Viscount, I admit, has brought forward various arguments to-night. He suggested a number of reasons, including the great expenditure on the war and the increased number of securities made available for trust investments. But how does he meet Lord Rothschild's contention that while the stocks of other countries like Russia and Japan, after an equally great or greater strain, have gone up, our Government

1159
stocks have gone down? If I might add one little illustration to show that confidence does do something for credit, will the noble Viscount or one of his colleagues tell me how they account for this very curious fact, which has not yet been mentioned to your Lordships. Two years and a-half ago the ratepayers of the metropolis—whose Budget is the largest in this country with the exception of the National Budget, spending as they do between twelve millions and fifteen millions a year—reversed the policy of the previous eighteen years and returned a reform party with the object of reducing expenditure, which object may, to some extent, have been carried out. How did the stock of the London County Council—the largest stock, I believe, in this country with the exception of the National Stock—stand? The three and a-half per cents. stood at ninety-seven at that date. My Lords, while Consols have gone down six points, while India Stock has fallen three or four points in the last three or four years, while Local Loans Stock is not buoyant, while Irish Land Stock has fallen in a greater proportion—while every Government security has suffered, the London County Council stocks have risen four points and have been maintained at an average of between four and five points higher since the change of policy which has given confidence, and, therefore, improved credit.
I am not going to travel again over ground which has been already traversed. The noble Lord the Under-Secretary of State for War, who is not now in his place, accounted for these curious manifestations on the part of the City by saying that the City was very frequently wrong, and he illustrated that—I must say in an argument which I thought was an insufficient one—by elaborately comparing how stocks stood during the war in South Africa before battles in which we happened to be unsuccessful and battles in which we were successful. He instanced Spion Kop. I would like to deal with that for one moment, and to say that in my opinion the City takes a longer view than the noble Lord gives it credit for. If before the action at Spion Kop Consols rose, it was not because of the immediate effect which might be believed to be coming about from the advent in South Africa of the noble and gallant Field-Marshal on the Cross Benches, but owing also to the knowledge that from every part of the
1160
world tens of thousands of troops were being poured into South Africa and the absolute determination on the part of the country to go through with the war at whatever cost. In the same way I venture to think that it is insufficient to say that this great fall of investments at home is due, as Lord St. David's suggested, to the increased facilities for investment abroad. I pass lightly over that point, because the answer is so obvious when we ask ourselves the question, "Why has this change come over investors, not over an average of five or ten years, but within the last few months? "It is solely, as we believe, in consequence of the provisions of this Budget.
If I may trouble you with a very few figures I should like to do so in order to correct what I think was a very grave error on the part of the noble Lord the Secretary for Scotland, the cause of whose absence to-day I am sure all your Lordships deplore. Lord Pentland made a speech of a character of which I think we have had too many outside—that is to say, of representing this Budget as if it were a campaign of the poor against the rich. At the least we have the right to ask that the figures should be accurately given in the description of the Budget. Lord Pentland said that the extra burden laid by this Budget on a man with 30 s. a week was 2d. in the pound, and on a man with £5,000 a year 5d. in the pound, and he proceeded to say, in words which I really should like to read to your Lordships, that he thought in the one case—that was, in the £5,000 a year case—it merely meant some slight subtraction from the margin of income spent on luxury or ease or what they pleased, and that it could not be maintained that a man with £5,000 a year could not well afford 5d. in the pound as compared with the 2d. in the pound of the man with 30 s. a week.
May I give an illustration of what the figures really are? I had through my hands the other day as trustee a trust estate, and I had an actuarial calculation made on what a man of the age of fifty would have to pay throughout the whole of his life on his estate, and what his contributions would be to the burdens of the country. I think these figures will bear any amount of inspection. I know that the Government will not maintain that the Death Duties on land are all to be paid out of capital. We have heard from the

1161
noble Earl, the Lord Steward, who made so admirable a speech, that these things can be done by a very slight sacrifice by insurance, but his figures were rather difficult to follow. I would instance these figures for the noble Earl's attention. This is the actuarial calculation that I had made. This particular estate, I must mention, happened to pay three per cent. extra. Sixty years before it had descended by a settlement made by an uncle; it had gone to a father and a son, and the man inherited from his grandfather; but still there was three per cent. extra, and so the estate paid ten per cent. The whole amount paid before this Budget was introduced was 1s. in the pound in Income Tax and 3s. 4d. in Death Duties—or 4s. 4d. Under this particular scheme he will pay an extra 8d. in Income Tax and an extra 1s. 4d. in Death Duties. His total contribution, therefore, to the Exchequer for the whole period of his life of fifty years is 6s. 4d. in the pound. I ask your Lordships to realise first of all that the addition which Lord Pentland put at 5d. in the pound, is not 5d. but 2s.; 2s. is ten per cent. of his whole income, and I hardly think that the most confirmed Radical speaking to any audience would say that a man who out of £5,000 a year is charged 6s. 4d. in the pound to the public revenue is paying an unduly small proportion of his share to the burden. It amounts to £1,580 a year out of £5,000.
My Lords, I am not pleading for individuals. I recognise as much as any man in this House that the rich can pay in proportion more than the poor. I am not thinking of those men who have £10,000 a year, and if they are reduced £10,000 a year will still have an ample margin left for luxuries. But if you take a man with a family place and who has a nominal £5,000 a year and who out of that pays £1,500 or £1,600 a year in taxation, that is very hard upon him, and a very large amount of what remains to him is mortgaged already for necessary employment. I will make three deductions in this connection. The first is that the majority of men are not prudent enough to tax themselves so highly, and will therefore pay these charges out of capital and not out of income. I submit that the nation has no more right to defray its annual expenditure out of capital than has a private individual. The second deduction which I draw is this. We have been told that land is not affected by this, but in my opinion it is absolutely impossible to avoid
1162
an increase of unemployment in agricultural districts and a further driving of people into the towns if you too unduly tax agriculturists. This is not a question, such as the Irish Land Act, of a transfer of the profit from the landlord to the tenant, in which case the money remains with the land, perhaps more so, but it is an absolute diversion of money from the land to national service. The third point is one which was made by Lord Milner in language I cannot hope to equal, and with regard to which I entirely agree with him—that if you press this system of Death Duties too far you arrive at a point at which the fines are so heavy that capital cannot recover between fine and fine, and it then becomes a wasteful and ruinous method of raising revenue. I cannot help feeling that if we impose such duties as these we are running down the slope of national impoverishment.
I was struck with one omission in the noble Viscount's speech. He did not speak with that strength with which so many noble Lords on his side of the House have spoken against the alternative which has been put forward from this side, but I know he is an ardent Free Trader. The other day the noble Viscount published a most interesting paper from the India Office showing the progress of India in the course of the last thirty or forty years, and one subject which was specially noted for the pleasing consumption of British readers was that the Jive per cent. general tax levied on imports into India, so far from in any way reducing imports, had in the last few years, largely in the period of the noble Viscount, risen from three millions to five millions, and had actually restored the equilibrium of the Indian Budget. Many people have asked us, and we have been asked in the course of this debate: "What is your alternative? Dare you tell the people that you propose to put this taxation on them rather than levy it as we propose?" My Lords, there is extreme and fearful poverty in this country. We have been told of the terrible effects and the misery which our industrial system creates. Will that be relieved by this Budget? Does the noble Viscount think, after Lord Rothschild's speech, that money will come forward more freely for industrial enterprise? Will he tell us that industrial enterprise has been in any way crippled in India by the duty to which I have alluded? He certainly will not tell us that he is not dealing there with a population to whom not merely

1163
pence but even farthings in the purchase of commodities are an object, and yet has he not seen a satisfactory advance all along the line in India under the very system of duties, which, without the slightest desire of fostering industries which cannot protect themselves, it is desired to attempt in this country?
My Lords, the position in which we are placed is, indeed, a difficult one. We believe that the Budget as it stands is as short-sighted as it is inequitable. We believe that instead of decreasing unemployment and improving the lot of the poor, it will greatly imperil the continued employment of the poor. We believe that the Government have not shifted the burden on to the right shoulders. We know that if you had, instead of going out of your way to select particular interests which are not the most flourishing ones for your taxation, looked merely to where there was the largest margin, you would have framed your Budget differently. Yet we are asked from the Woolsack to forego our rights, and we are advised from the Cross Benches to defer the exercise of them to some greater national emergency. My Lords, I think that the assumption that this struggle has not been provoked by the Government but has been provoked by this House is a most extraordinary one. If you look merely to the taxation which has been given up; if you look to the wanton abandonment of the export coal duty which produced £2,500,000, an export which continued to rise despite the duty, although it was an article which we might desire to see sent not too largely abroad; if you look at the £1,500,000 thrown away last year upon tea, which I believe has not in the slightest degree affected the price of tea to the poorer people; if you think also of the £3,000,000 thrown away upon sugar, we cannot make much of the argument of the Government when they come here in forma pauperis and say, "It is you who refuse to pay your share." As the noble Viscount said, your Lordships, however unjustly, will be accused of having championed the cause of the rich against the poor. But you have not only to consider that charge.
I submit that nothing can warrant the tacking on to the Budget proposals which have been already rejected by your Lordships' House, and if your Lordships to-day give up the particular privilege which you
1164
possess in that respect you can never resume it, and may have to face for generations to come Budgeting under similar conditions. That, I think, makes it quite clear that the quarrel has not been made here. If we take Lord Rosebery's view—and I much regret that circumstances have made him form so strong an opinion as not to be here when the Division bell rings—the Bill is a revolutionary one. The noble Viscount also talked of revolution. My Lords, although we do not desire to minimise, we still less desire to magnify, the issue, that is not language which is used on this side of the House. We think that this crisis is not as great as the crisis of 1831 when noble Lords did believe that they were on the brink of revolution. The leading speakers in that debate made it perfectly clear as to what they felt on the issue before them. Lord Brougham said on that occasion—
" Their Lordships were standing on the brink of the most momentous decision that ever human assembly came to at any period of the world,"
and Lord Eldon, not to be outdone, gave it as his opinion that—
" With this Reform Bill in operation the monarchy cannot exist, and it is totally incompatible with the existence of the British Constitution."
With that issue before them, and with the knowledge that this House must be imperilled for ever by the exercise of their privilege and by the vote which they intended to give, the Statesmen of 1831 considered it to be their duty to their country to vote as they did, and that their duty was greater than their interest in this House. Accepting as we do what the noble Earl, Lord Rosebery, said, that this Budget is an omen of evil for the future, creates great financial confusion in the present, and is at variance with all preconceived financial theories of the past, I wonder whether the noble Viscount, who has written so much and so warmly in favour of strength of conviction—I could quote many passages, but I will spare him—indicating that he thinks very little of the man who has not zeal and faith and confidence but is content with a trivial compromise, would extend to us his respect if we acted upon the advice of Lord Rosebery. I do not believe that the youngest and least experienced of the members of your Lordships' House whom Lord Rosebery almost advised to absent themselves from this Division, could have given your Lordships advice that less tended to the honour and dignity and prestige of the House than the advice which the noble Earl

1165
gave us, that we should state our views and convictions but that we should not carry them into effect in the Division Lobby.
What would be the opinion of the country if all these gloomy predictions which we have unfortunately had to make are realised, and if, as those who guide us in the City tell us will be the case, capital is diverted from the country; if the country finds that unemployment, which is now so rife, has largely increased; if the people themselves in two or three years time rebel and demand a remedy which it may then take years to apply. Do you not think if your Lordships' House were then to come forward and say "That has been our opinion about it all along," that the country might reply to us, as Dr. Johnson did to Lord Chesterfield—
" My Lord, yon are one who looks with unconcern on the man struggling for life in the water, and when he has reached ground you cumber him with your help."
We are told that the rejection of this Bill would be an unprecedented act. But I think there is one action which would be more unprecedented, and that is that the most independent assembly in the world should acquiesce in the passage of a Bill for which not one member away from the Government Benches, whether he intends to vote or to abstain from voting, is ready to take one jot or tittle of responsibility, and the results of which are, as I venture to think, clearly foreseen.
LORD JAMES OF HEREFORD: My Lords, as I am unable, I regret, to afford support to the Amendment moved by my noble friend Lord Lansdowne, I hope you will not grudge me an opportunity of very briefly stating to you the reasons which have caused me to come to the conclusion that such support should be withheld. I am happy to be able to use the word "briefly," because from the nature of the position that I suggest should be taken by this House I am precluded from dealing with more than one point that has been raised in the course of the debate. My proposition is that it is beyond the constitutional competency of this House to reject this Bill. I do not shrink from that position. It is the result, perhaps, of political training in old Whig principles; but clearly and distinctly I submit the proposition and stand by the view that we have no competency to reject this Budget.
Now, my Lords, if you will allow me, I will elaborate that proposition. My noble friend on the Woolsack stated that in
1166
determining the question of competency we were not controlled by what was the law affecting the subject, but that we were controlled by the constitutional power that exists within this House. I venture to say respectfully that, notwithstanding the opinions expressed in the House against that view, the Chancellor's proposition is a sound one. My noble friend Lord Halsbury, replying to the Lord Chancellor, said—
" What is the part of the Constitution that is infringed by the rejection of this Bill? "
I will tell my noble friend. It is exactly and precisely that portion of the Constitution which controls the relations between the two Houses of Parliament. The law does not control those relations. How could it? Those relations have sprung up during centuries, and the Constitution is founded, happily for us, on a solid basis. It has been founded on precedent, usage, practice, and acquiescence, and all these characteristics are in favour of the proposition that the House of Lords in its relation to finance measures, and in relation to the House of Commons, is controlled by precedent, practice, usage, and acquiescence. If time were given to me I think I could demonstrate to your Lordships that every one of these ingredients comes into play to prevent your Lordships from taking the course which it is now suggested you should take.
I have heard the phrase used by many of your Lordships—it has certainly been used in the Lobby—" You admit that it is legal, and the law is good enough for me; if it is legal, that is satisfactory." My noble friend Lord Midleton spoke just now of our privilege and of our legal rights as if that determined the question. As I said just now, legal considerations do not control the relations of the two Houses. I know I cannot expect you to accept propositions barely made by me, but there is one authority on the difference between what is law and what is constitutional custom to which I would, with great confidence, refer your Lordships. In the year 1856 the Government of the day conferred a life peerage on Sir James Parke, afterwards Lord Wensleydale. The Conservative members of this House objected to that life Peerage, and it was objected to by probably the most distinguished Conservative lawyers who have sat in this House. Lord Lyndhurst led the opposition to it. What was Lord

1167
Lyndhurst's view, concurred in by Lord St. Leonards and Lord Campbell? Lord Lyndhurst said—
" I hear it repeated this is part of the prerogative of the Crown and that the Crown may legally appoint a Peer for life. Assuming that to be the case, it does not follow that every exercise of such a prerogative is consistent with the principles of the Constitution. The Sovereign may, if he thinks proper, create by his prerogative a hundred Peers with descendible qualities in the course of a day. That would be consistent with the prerogative and strictly legal; but everybody must feel and everybody must know that such an exercise of the undoubted prerogative of the Crown would be a flagrant violation of the principles of the Constitution. In the same manner the Sovereign might place the Great Seal in the hands of a layman wholly unacquainted with the laws of the country. Other cases might be adduced, but these already cited are sufficient to establish the principle I maintain. Every person who has studied the Constitution of this country and who is at all conversant with the principles on which it is founded must be aware that one of its principles is long continued usage."
I could give your Lordships other authorities. As I mentioned, Lord St. Leonards and Lord Campbell agreed with Lord Lyndhurst that in dealing with the prerogative of the Crown at least you do not look to law, you look to usage, and if my noble friend Lord Halsbury asks me "Where is your constitutional declaration?" I answer that I have given it to him—that is the relations of Parliament following usage and precedent which show us the Constitution with which we have to deal. I also reply to my noble friend who says law alone should control our action, and ask him, if you are dealing with a legal right, where is the record of your legal right? You say that you have the declarations of great men in favour of it. Where is the proposition that can be found to support the idea that only law should guide us? My Lords, do let me remind you that it is not only in regard to the relations of the Houses of Parliament that this constitutional power comes in as distinguished from law. Why is it you cannot vote at elections? There is, as far as I know, no law to prevent you. It is because the Constitution prevents you, and it would not be enough for you to say, "I have a legal right to vote, and that is enough for me." The Judges of the land have told you that you have not, because the Constitution prevents you. You will not be allowed when this conflict takes place to enter into it; you will not be allowed to record your votes and you will not be allowed to go to an election meeting because long habit and long usage prevent you, not
1168
in consequence of any legal disability but entirely in consequence of constitutional disability. There may be some who will say that similar considerations have affected the judicial decision that women have as certainly as your Lordships no right to vote.
Now, my Lords, in referring to what has occurred in the past, I will be very brief, although I could occupy hours in giving you authoritative declarations of your inability to intervene in this controversy. This conflict really began early in the fifteenth century, but I will skip a good many events and read to you an early declaration of this House of what its rights were in the year 1640. In that year the House of Lords, for some reason, was very desirous that the Commons should take Supply first. The Lords sent this communication to the Commons—
" Under all the circumstances, although my Lords would not meddle with subsidy, which belong properly and entirely to you "—
this is the solemn admission of this House to the House of Commons—
" no, not to give you advice thereon—they have utterly declined it—yet being members with you of one body they have declared by vote that they hold it most necessary that Supply should have precedence over every other matter whatsoever."
That was the view of this House at that time. But that sturdy old Republican, Pym, gave a very firm answer. He said—
" Your Lordships have been pleased to advise that this matter of Supply naturally belongs to the House of Commons. Your Lordships say you would not meddle with it, no, not so much as to give advice, yet if you have voted this Resolution you have meddled with it, and the House of Commons takes that to be a breach of privilege."
I pass over the great revolution of 1688, which, as Lord John Russell said, gave the liberty which was the real foundation of our great Constitution, and come to the solemn declaration of Chatham that it was the House of Commons alone in which was vested the power of taxation. He said "taxation is no part of the legislative or governing power. The taxes are a voluntary gift and grant of the Commons alone," and then Lord Chatham eloquently gave his reasons for repudiating any power in this House to deal with Supply Bills. Then, my Lords, the words of Edmund Burke have been quoted this evening, and the principles contained in them ring through the pages of our history.
There is another example that I should like to give because I think it

1169
follows what has been done in earlier times, and because the weight of its authority may affect noble Lords on this side of the House. In 1786 Mr. Pitt introduced a Bill to apportion £250,000 a year to the redemption of the National Debt as a kind of Sinking Fund. When the Bill came to this House the Lords thought they would interfere with the proposed legislation, but they had no information. Of course this House never has any information on the question of subsidy. They sent a message to the Commons asking for information. Mr. Pitt received the message, and although he was not, I think, likely to assume anything against the House of Lords—he must have had many grateful friends within it—he indignantly refused to give this House the slightest information. He said it was for the House of Commons to deal with the question of appropriation of taxes, and he moved a Resolution in terms declaring that the House of Lords should have no information on such a subject. I hope your Lordships will acquit Mr. Pitt of doing anything at all unconstitutional, and I am sure he was not a man who would be likely to pander to public opinion. Mr. Pitt was Chancellor of the Exchequer at that time and knew his position well; he represented the Conservative Party in the State, and he gave that opinion as a man who well knew what he was doing. Certainly he was one who revered the Constitution.
I will pause for a moment to ask you to consider what is the matter we are dealing with. The words "Money Bill" are sometimes used, I think, rather inconsiderately. Lord Palmerston in 1860 apparently applied them to all Bills in which taxation was imposed. That is not the kind of Bill we are dealing with. We are dealing with the Budget Bill which grants Supply for the service of the State during the year. Your Lordships will bear in mind that that grant is given in response to an appeal from the Crown, not to us. "Gentlemen of the House of Commons, I ask you to give me aid and Supply." It is to them and to them alone the request is made. There is no appeal whatever made to the House of Lords. Then at the end of the session when the Prorogation takes place thanks have to be given to someone, and although your Lordships have gone through the form of assenting to the Finance Bill no thanks are ever given to us. Again it is—
" Gentlemen of the House of Commons, I have to thank you for the generous Supply you have given to me."
1170
There is nothing within the Constitution showing that thanks ought to be given to the House of Lords for that Supply. My Lords, the matter is of so much delicacy that I purposely avoid attempting to forecast how the paragraph of thanks will express at the end of the session the gratitude of the Crown.
Will your Lordships allow me to mention one other fact which may be known to you? The practice is in this House that whenever a Bill is finally read a third time in either House it passes into the custody of the Clerk of Parliaments, it is retained in his hands until the Sovereign, by himself or by Commission, gives assent to it. But in respect of two Bills—the Finance Bill and the Appropriation Bill—the Commons to the knowledge of this House have asserted their privilege and right to deal with such Billsalone. The other House never will trust our officer with those two Bills, and the moment either of them is read a third time in this House someone on behalf of the Commons claims it back, and the Speaker keeps it in his custody or in that of the Chief Clerk. When the Speaker comes to the bar of this House to hear the Royal Assent he intimates to our officer, the Clerk of the Parliaments, that he has something to give him, and he gives him this Bill. That is for the momentary purpose of the Royal Assent being given to it. My Lords, we have admitted that custom to be a correct one, and how can it be said that we are upon an equality with the other House in relation to those two Bills when our own officer will not be entrusted with them because they are Commons Bills and not House of Lords Bills? You may say it is not a very important matter to have charge of these two pieces of paper which constitute Bills, but it is a symbol of the control which the Commons have over those Bills. That is a point I would ask you not to pass by too lightly until you can find some good reason for this old custom.
I am not troubling your Lordships by quoting the numerous declarations upon the constitutional position made by distinguished men; but there is one authority I must quote. I was taught in my earliest political life to regard with the greatest respect as a Whig Statesman Lord John Russell than whom I think it will be admitted there is no one who had great or knowledge of the Constitution and its origin, and greater knowledge of those ingredients of political

1171
life that constitute the freedom of the people. Let me refer to what he said in connection with what is called the precedent of 1860. I think there was something in the mind of several of your Lordships who have spoken that the Paper Duties Bill was a precedent in favour of this Amendment, but when you have looked at it I think you will find that it is destructive of any such contention. In the course of the debate which arose upon the Lords throwing out that Bill—not a Budget Bill, not a Supply granted by the Commons in reply to the demand of the Crown, but simply one isolated measure—Lord Palmerston said that the House of Lords could not deal with the Bill. I prefer, however, to rely upon what Lord John Russell said on that occasion. He said—
" I must say that for 200 years there is no instance of the House of Lords having exercised such a power as that which is exerted in the present instance. I believe that, according to all former practice of the Constitution, the whole question of granting Supplies belongs to the House of Commons."
Then he quotes the eloquent words of Lord Chatham and proceeds to make the further statement of his objection to what had occurred. He said that if ever this conflict came between the two Houses, one voting one way and one the other, there would be confusion which could never be overcome and which would be deadly in the interests of the State. These were his words—
" It is therefore not only true that with regard to all past time ever since our Constitution was a Constitution we have had the power of regulating, but it is true likewise that if we were to part with the power, and the House of Lords were to be admitted, the consequence must be utter confusion to our finance. The remission or imposition of taxation would be in a perpetual state of uncertainty. Each House would endeavour to take off the tax which was most unpopular, thereby to gain for themselves popular credit and applause."
It is satisfactory for me to say that I am not now placing before you propositions of my own. This comes from one who I am sure was as great an authority upon the Constitution as ever lived, and one who was incapable of being influenced by Party motives. I would remind your Lordships that when the Bill of 1860 was thrown out, Mr. Gladstone reintroduced its provisions in the Budget Bill of 1861, and being in the Budget Bill the Lords, who had objected to the Paper Duty Bill, passed that Budget Bill, and did not dare to reject it, because it was a subsidy Bill given in return to the application of the Crown.
1172
There is only one other quotation I am going to make, and I really make it with regret, but I think it is something that will influence your Lordships. I refer to the words of Mr. Balfour in 1907, and I have never read a more explicit declaration than he then made against this power being exercised. I do not care to dwell upon it too much because there may be some explanation of it. He said—
" We all know that the power of the House of Lords is still further limited by the fact that it cannot touch these Money Bills."
My right hon. friend then proceeded in very distinct terms to explain why. But, my Lords, I really do not care to dwell very much on such personal statements. I have given your Lordships the opinion and authority of great Statesmen which I hope will convince this House that the view I put forward is correct.
There is one other matter to which I wish to call your attention. Long usage has shown the impossibility of your Lordships exercising this power of rejecting a Money Bill. It has never been done. Now, my Lords, you claim the actual Tight to reject this Bill. If this rejection is within your competence it has been for centuries equally within your duty. If Supply Bills were bad they ought to have been rejected according to all the arguments we hear now in support of this Amendment. If it was not only our right, but our duty, as we are told, for the sake of the public, to have rejected such Bills if they were bad, why is it that our duty for centuries has never been fulfilled? Is not the alternative either that such constitutional duty did not exist or that we have neglected to do what we ought to have done in the interest of the State? I am happily relieved from expressing any opinion on the contents of the Bill, but my silence must not be taken as indicating that I am in favour of some of all its provisions. In Committee if I were in the House of Commons I would have supported Amendments, but that is not the question. I say this House is estopped from acting because of insufficient power.
What do the House of Commons base their Budget Bills upon? They base them upon Estimates. They estimate what is wanted and they get information as to what is required for the State service from the various public Departments. What power has this House to form any estimate? We can get no estimate, and we should not

1173
have the slightest idea what to budget for, or whether it was right for the Chancellor of the Exchequer to ask for sixteen millions or 160 millions. If you were to say to that gentleman of whom so much has been said, the Chancellor of the Exchequer, that you have no power to estimate, and ask for information, what answer would you get? The same answer that Pitt gave, that you have nothing to do with Estimates. Now, whilst all this, I think, places us in a position of great difficulty, it is sought to escape from the difficulty by saying that this is an exceptional Budget, and that it is exceptional in the sense that it contains so many different subjects. I should like to know what that means. I think it was my noble and learned friend Lord Halsbury who said that it contains so many multifarious subjects. I do not think he expressed himself quite correctly, because many taxes are rightly put in, and that would in one sense be multifariousness. What I think he meant to say was that if a Money Bill contained other matters beyond finance—foreign, alien matter—that would be a ground for throwing out the Bill. I entirely concur. If you introduce into a Money Bill foreign matter such as, say, the ballot, or if you shot into it an enactment about the deceased wife's sister, of course this House would have a perfect right to take exception to such a Bill.
All this introduction of alien matter is represented by one word—it is "tacking." If I am asked is there "tacking" in this Bill, I should say there was not; but the question becomes immaterial. If there is "tacking" in this Bill, the duty of this House is complete. It would semi-judicially determine this "tacking," and we should reject the Bill because it is an insult and a fraud upon this House, and rightly say "Take your Bill away." But that question does not arise. You are not rejecting this Bill on the ground of tacking. It is whispered throughout the Lobby that this is not rejection at all. But if you postpone a Bill for three or six months or even until a General Election takes place, it is equally a rejection of the Bill. The noble Marquess the Leader of the Opposition, in his Amendment which remits to the electors the decision upon the Bill, does not I am sure for a moment intend to leave to them the decision of whether this Bill contains tacking or not. That could not be, because the electorate has no knowledge of Parliamentary history or Parliamentary practice. It must be a question
1174
for us. I am sure the noble Marquess will agree that what he seeks by his Amendment is to leave to the electorate the policy of this measure, because he cannot give to them the power to determine whether tacking vitiates this Bill. Therefore we come back to the pure simple question—because a majority of this House does not like the provisions of this Bill, is it within its competence to reject it?
During the struggle that is coming upon us, there will be many students, many readers who will read out aloud to audiences that the balance, and the conclusive balance, of authority is that there is no competency in this House. I can assure the noble Marquess, and he knows, that it is in no spirit of hostility that I quote his words. My noble friend said—
" I would venture to ask, shall we stand better or worse when the struggle comes if we shirk our responsibility now? "
I ask him to consider, if it be right that this is outside competency and that this is an unconstitutional act, shall we not be very much the worse for taking that unconstitutional step? What a power we are giving to our opponents! We all know the power of any Party rallied together, bound together by a common cause, with all their differences composed because they have got a great overwhelming cause. What will they be saying of us throughout the land in consequence of this action? It is nothing to say, "If it is right to do it, we should do it and never mind the consequences." The first question is to find out whether you have got the power to do right, and if you have not, then wrong will come prominently against this House.
Let me repeat that the contest which is coming will be a one-sided contest. In the conflict that is going to take place, none of your Lordships will be able to take a share, not one of your Lordships will be able to defend the course that you have taken, not one of your Lordships will be able to say that you have been acting, in your belief, within the Constitution. You will be at the mercy of your opponents, and at the mercy of men who will not spare you. I do not know how Unionist members of the House of Commons are going to take this decision of your Lordships' House. You are making every one of them ride a race with a good deal of extra weight up. You are making for them hostile audiences. I should like to bear testimony myself on that point. There

1175
is a certain class of practical sportsmen who are said to make the very best gamekeepers. I can tell you something about agitation against the House of Lords. The House of Lords in 1884 threw out the Franchise Bill. That was, of course, within their power. But the Liberal Party resented the exercise of it, and I was told off in very good company—the late John Bright and the late Duke of Devonshire—to do what we could in Lancashire. I can assure your Lordships that it is very easy work to howl against this House. The House of Lords was overruling, as we told our audiences, their representatives, overruling the representatives whom they had elected. Then, of course, we told them about 500 or 600 persons being supreme. We did as we liked with our audience. We took every wicket, although some of our bowling was not very strong. This assertion of the exclusive right of the Commons to deal with finance will now be added to the previous attack on your Lordships' House.
I, my Lords, am devoted to the principle of a double Chamber, and as I desire to see the fortunes of the Unionist Party supreme, I am appalled at the prospect we wilfully and intentionally are raising against that principle. Such are my convictions. They are those, perhaps, of a Party man in one sense, for I am an old Whig, and I have never forgotten the principles of that old Whiggism which, I believe, represent liberty in this land. I have followed many leaders. I am sorry that, to-night, I am parting somewhat, for this purpose only, from my noble friend Lord Lansdowne. I have no right to speak with any personal knowledge as to what Lord Salisbury would have said if he had been in charge in this crisis. But we have his public statements, and I think that if that most sagacious, most patriotic of men was here to-night he would not give approval to this Amendment. I need scarcely tell your Lordships what Mr. Gladstone would have said. His valedictory words in 1894 told us his views upon the action of this House. I had one other leader whose memory is yet fresh in my mind, a leader whom no man in this country could do other than regard, and who to his dying day retained those old principles of Whiggism which had been the principles of his house. He never would have been, I verily believe, a party to this course. My Lords, I am no deserter. I am no deserter from any principle that I have ever thought ought to guide the
1176
public mind, and I do not believe that even the noble Marquess will regard me as a personal deserter from him to-night.
Such being the views I entertain strongly, I have the courage of them, and I now ask myself what is the course that ought to be taken in order to emphasise the opinions I hold. I have surveyed those two roads which my noble friend Lord Balfour of Burleigh so invitingly traced out before us, and I am not disposed to follow them. And, much as I appreciate the fascination of Lord Balfour's society, I shrink from going into the woods with him. As I say, I have the courage of my opinions, and therefore it is that I will not take for myself any path but that of the Constitution, which will lead, I believe, if it is followed, to securing the security and safety of this House, and will increase the power of the Unionist Party in the country.
THE EARL OF DUNRAVEN: My Lords, I do not rise for the purpose of criticising or discussing any of the details of the Budget. The clauses of the Bill dealing with finance, and those clauses, which are, perhaps, more important, dealing with social matters, have been already so thoroughly and so ably dealt with that no words of mine could add anything. I only wish to make one specific allusion to those clauses of the Bill which will have a peculiar effect upon Ireland. I enter a protest first of all against any additional taxation being placed upon Ireland. I am not going to-night to inflict an Irish speech upon the House, but I think it will be agreed by everybody, certainly by His Majesty's Government, that if the relative capacities of the communities in Great Britain and Ireland be taken into consideration, there can be no doubt that the burden of taxation is far heavier upon Ireland than it is upon Great Britain. But I have no wish to argue that.
I have no doubt if that was the question before the House, I should be told that even if that was so, Ireland is getting advantages in so many ways that they will make up for it, and that in any case the same taxation upon the same articles is the only possible system, and the over-taxation, if it exists, must be borne. If I were arguing the case, I should reply to that by reminding your Lordships of what I think is very often forgotten, that when the two countries were placed under one fiscal system it was stipulated for and agreed that Ireland was entitled to abatements and exemptions. No adequate

1177
abatements or exemptions have been made under the Budget Bill. On the contrary, a sum which I do not think can be estimated at less than £2,000,000 a year has been added to the already over-great burden of taxation which is crippling the Irish people in their most laudable endeavours to recreate industrial life in their country. That huge addition to a weight of taxation already overwhelming would in itself be very cruel. In view of the fact that Ireland is entitled to exemptions and abatements, I think it is unjust even almost to the extent of illegality, and I am sure it is most unwise when you consider the peculiar effect of some of these land clauses upon Ireland. Undeveloped land is taxed, and, as your Lordships know, land that has been developed, used for buildings, trade, manufactures, and so on, and that has relapsed into an undeveloped state, is considered undeveloped, and subject to duties. Well, that may be right enough—I do not wish to argue it—in the case of Great Britain, where, as a rule, towns and cities are increasing and progressing. But what is the position in Ireland? Ireland, alas!is full of cities and towns and villages decayed or decaying. Ireland is covered with closed factories and disused mills, and to say that all this land, which was formerly developed but has decayed owing to the destruction of industries and for various reasons which I need not now specify, has become undeveloped, shall be subject to duty seems to me the most absurd financial proposition that was ever attempted to be placed upon the Statute Book.
Will your Lordships consider for a moment the case of purely agricultural land? Agricultural land, of course, is subject to various imposts, stamp duties, and duties on transfer, in fact upon almost every transaction that has to do with land. Death Duties are increased, and also the Income Tax. All those imposts will fall infinitely heavier upon Ireland than upon Great Britain. I must remind your Lordships that 230,000 tenants have purchased their holdings in Ireland and become landowners within the last five or six years; that 73,000 have become landowners under former Land Acts; that there are in fact in Ireland about 300,000 men who when they were tenants would have escaped all these imposts, yet upon whom since they have purchased their holdings and become landowners these imposts will fall. Now, all these men are debtors to the State, and surely it would be prudent and wise to give every possible encouragement
1178
to them to put every ounce of energy and every penny of capital into the development of their property, and so enhance the value of the security of the State. It must be better that loans should be secured on an increasing and not in a wasting security. And how are these men treated? Take only the valuation. The whole of the agricultural land of Ireland will be valued and the market value fixed by an official. It will be very difficult, but no doubt not impossible, to ascertain the market value of land in England, but I maintain it will be absolutely impossible to do so in Ireland. If there was a natural open market value for land, if there was only a normal desire and competition to get land, if agriculture was conducted as a purely business proposition, values and rents, would have adjusted themselves, and there would have been no necessity whatever for the dozens of Land Acts that cumber the Statute Books. But that is not the case in Ireland. You cannot possibly get a market value when in some cases there is no market at all, and no prices to be got, and in other cases and at other times enormous sums are given for tenant rights and for possession for small holdings. So I take it that the purchase price will be assumed to be the fair market value. But the purchase price has to be repaid by annuities, and as the instalments are paid off the value of the land, of course, increases. But the imposts and duties upon it increase, so the practical effect will be that you are penalising the man for paying off his debts. Some of these tenant purchasers may make money and save money, or they may be left money. I know of no better way in which they could invest their money, though it is not at a very high rate of interest, than in paying off their instalments and liquidating the debt, or as much as possible of it, that they owe to the State. That certainly would be a considerable advantage to the State, for it would free money that could be used again for carrying on land purchase in the future. But are these men likely to do that when the mere fact of their doing it, and perhaps paying off the whole of their debt to the State will only render them liable to much heavier imposts in the way of Death Duties and so on?
The one thing that ought to be done was to give every encouragement to these small proprietors to develop their holdings and to feel absolutely secure in the validity of their titles to them, and secure in the enjoyment of them subject only to such taxes and such rates as are imposed upon.

1179
other forms of property. I think your Lordships know very well what the real object of these land clauses is. It is to insert the thin end of the wedge of State proprietorship, instead of individual ownership, of land. All these imposts are placed upon these small landowners in Ireland because in the thinly veiled opinion of His Majesty's Government, and in the perfectly openly expressed opinion of the principal supporters of the Government in the country, individual ownership of land is wrong, and ought to be discouraged with a view to its final abolition. It is not much encouragement to the small landowners in Ireland to feel secure in their titles, and to develop their property. I do think it is worth the while of this House to consider this matter seriously, even if your Lordships are not specially concerned with Ireland and with Irish prosperity. Take it only as an example. I hope, and I believe the great majority of your Lordships hope, to see a large increase in the number of small landowners in Great Britain, but of one thing your Lordships may be perfectly sure, that if you ever want to get the people back to the land, the only way in which that can be successfully carried out is under the stimulus and the energising charm of private ownership. If any real attempt is made to largely increase the number of landowners in Great Britain, they will then be in precisely the same condition as the tenant proprietors in Ireland, and I think the example of Ireland will then be found useful to your Lordships.
It is no wonder, and it is perfectly true, as my noble and learned friend said, that every man, woman and child in Ireland is hostile to the Budget, and is looking to this House to take better care of their interests than the other House of Parliament has done. For that reason alone, if for no other—its disastrous effects upon Ireland—I feel myself compelled to enter the strongest possible protest against the Budget. That is the only allusion I propose to make to any detail whatever of the Budget. My objections are quite of a general character. In spite of what fell from the lips of the noble Viscount opposite, I object to the Budget because it contains proposals, or at any rate the very well-developed and fruitful germs of proposals, for destroying and reconstructing the whole economic and social fabric of the community. It introduces a completely novel principle of taxation, and an entirely new departure in our national finance. This social
1180
revolution and these new principles have never been submitted to the electorate. That is the solid basis of my objection, and even if the proposals in the Budget did not appear to me objectionable, I should very much doubt whether those proposals ought to be passed into law before the people have had an opportunity of expressing their opinion about them. I can perfectly well understand the attitude of a man who will say that these proposals may not be bad and may be even beneficial; but they are so utterly novel and unprecedented that they ought not to be put on the Statute Book until the people have expressed their opinion about them. I cannot understand the attitude of those noble Lords whose speeches I have listened to, as we all have, with the greatest attention, who, while considering the Budget proposals to be absolutely pernicious, are yet quite content to say that they should be enacted without the people having an opportunity of saying whether they liked them or not.
I do not wish to go into the constitutional question, or the right of the House to reject this Bill. I think that was disposed of by my noble friend Lord Salisbury. The noble and learned Lord on the Woolsack, if I remember aright, said that no doubt if the House accepted the Amendment it would be within its rights; it would be legal, but that in his opinion it would not be constitutional. I think that was the view taken by the noble and learned Lord who has just sat down, but I admit that, although I was sitting behind him, he seemed to me to be delivering rather a personal lecture to the noble Marquess the Leader of the Opposition than addressing the House generally, and I could not very well catch what he said. But, at any rate, it is legal. We have a right to do it, and what are we to understand by unconstitutional? What I understand by unconstitutional is that such action as is proposed would not be in accordance with convention, usage, and custom. I quite agree with that; but the power and the right do not lapse from disuse; and if the power has not been used by this House, why has it not been so used? Because the necessity for it has not arisen. If the power of this House has been seldom used, it is because the power of the Government with a majority in the other House has been so seldom abused.
The question, therefore, to me narrows itself down into this: Are we justified

1181
in using our rights and our powers on the present occasion? I know that the fact that the Budget contains multifarious matters has been denied by none more forcibly than the noble and learned Lord on the Woolsack, and I think he instanced the valuation clauses as an evidence, and said that they were absolutely necessary for the collection of taxes. I did not think the example was altogether a very happy one, because, as your Lordships know, the amount of taxes raised are so insignificant as to be a negligible quantity. What the Government propose to do is to set up a vast and complicated machine at huge expense to collect an utterly insignificant tax, not in the least necessary, and not really of any value in meeting the financial requirements of the year. You are not setting up machinery to collect the necessary taxes. You are setting up practically a nominal tax in order to justify the creation of machinery which is not for use now, but which is to be used for we do not know what at some future time, we do not know when. That seems to me an absolutely new departure from precedent.
The Bill contains many other novelties. It proposes, as far as I know, for the first time to meet current expenditure out of capital. It adjusts taxation, not with reference to the capacity of wealth or income to bear taxation, but with reference to the opinion of the Government as to the character and the source of the wealth and income. That appears to me to be the most inquisitorial, arbitrary, and utterly un-English proposal that has ever been put before the country. But it is not necessary to pursue that. It must be admitted, and will be admitted by every one, that legislation of any kind attacking any of our institutions, harassing and affecting any trade or industry, can be introduced in the guise of a Money Bill, and if this House is on that account unable to deal with it, then this House is practically reduced to a condition of impotency. We have had some threats directed against the House if it accepts this Amendment. We have had admonitions, and a great deal of advice showered upon us. The noble and learned Lord on the Woolsack the other day asked "Why this impatience? Why not accept the Finance Bill and wait just a couple of years until the term of Parliament has expired, and then if the people do not like the Bill you can repeal all its provisions." In the first place, if the principles of this Bill are once accepted,
1182
if they once find foothold on the Statute Book, they cannot be revoked. If this House does not object and make its stand now, it will never have an opportunity again of making that stand, however much those principles may be developed in the future.
I might, perhaps, be allowed to remind the noble and learned Lord that according to the views of the Party of which he is so bright an ornament, the Government have been in office as long as or longer than they have a right to be and expect to retain the confidence of the country. Short Parliaments was one of the principal planks in the famous Newcastle Programme. Three-year Parliaments, or, at the utmost, four-year Parliaments have been advocated on thousands of Radical platforms. What, then, is the situation? The people of the country have, according to the views of the Radical Party and of the Government, presumably, lost confidence in the Government by this time. That is their view; I do not say it is right or wrong. According to their publicly-expressed opinion, the Government have lost touch with the people. If their theories are correct, their majority in the House of Commons no longer represents the people, and yet, with the sanction and authority of that majority, they want to force upon the Statute Book a social and financial policy of which the people never had an inkling at the last General Election, which has never been before them, and upon which, as a consequence, they have never been able to pronounce any opinion. I cannot imagine a clearer case in which it is the simple, plain duty of a Second Chamber to intervene. If under these circumstances this House does not make a stand for the right of the electors to be consulted, and does not grant a stay of execution in this matter, I say it will never again be able to maintain its rights as a Second Chamber. It will simply become a cipher in the Constitution. It has no option in the matter except to act or abdicate.
I find it difficult to understand why under those circumstances the Government seem so reluctant to take the fatal plunge of consulting the electors. I cannot understand why they so greatly resent the gentle compulsion towards that fatal plunge which the acceptance of the Amendment will give them. I can only suppose that it is because they are reluctant to fight a General Election on their Budget,

1183
or against Tariff Reform, and they are anxious to cover up their policy by an agitation against this House. Of course I shall be told, as we have been told this evening, that the real objection that the Government have is that it is an outrageous thing for this House to interfere with a Finance Bill; that it would enable this House, if we once did so, to precipitate a General Election every year; that it would deprive the Commons of their undoubted rights and privileges over finance and over dissolutions, and that it would dislocate the whole machinery of the State. Well, of course, it would. I quite agree with that; but if the House of Commons were to adopt this new principle of wrapping up any kind of legislation they please in a Finance Bill, and say that this House cannot therefore touch it, would not that have precisely the same effect? Would not that absolutely smash up the whole Constitution and substitute a single Chamber, and a single Chamber of the very worst description, because there would be nominally a double Chamber system, but the Second Chamber would be absolutely impotent and a mere cipher?
I do not think any of your Lordships would seriously argue that this House is likely to desire to upset the balance of the Constitution, or to interfere in any way with the Tights of the Commons over finance, or over dissolutions of Parliament. The whole history of the House is opposed to such an absurd doctrine as that. It is safe to say and every Member of this House will agree that it is safe to say that this House will never interfere with a Finance Bill, provided it is a Finance Bill and nothing more; but when a Finance Bill of this character is brought up, the case is very different. When we are asked to adduce instances of this House interfering with Finance Bills, instances could be adduced, but I think it is quite sufficient, and a fair retort, to ask for specific instances when any Finance Bill the least resembling the Bill before the House has ever been brought before this House and accepted. This Bill contains many Bills which have been considered and rejected by this House. It is founded on social principles which have not been accepted by the people. It introduces novel principles of finance which the electors have never dreamed of. It involves a social and financial revolution. The revolution maybe beneficent or otherwise;
1184
the principles and proposals may be wise or foolish, that is a matter for argument; but in any case no Government has any right to try and smuggle these principles and proposals on to the Statute Book under the cloak of a Money Bill. We have been told that we are fighting in a very bad position, that our position is strategically weak. The noble Earl on the Cross Benches, Lord Rosebery, said it was not a suitable battlefield. I quite agree with all that. I think our position is weak. I think His Majesty's Government have been very clever. They have manoeuvred this House into a very difficult position. But granting all that, what option have we? We cannot choose another battlefield. We cannot occupy another position. If we make any protest at all against the principles of this Bill, it must be made now. We cannot possibly have another opportunity. There is no question of convenience or tactics or positions. The sole question before the House is its duty to the people of this country. I do not know what the consequences will be Very direful consequences have been prophesied. In a sense I do not care what the consequences may be. In a sense, of course, I do care, because a great constitutional struggle ought to be avoided at almost any cost, but there is a price that is too dear to pay for a mere temporary peace. But I do not care in the sense that I hold that this House ought to do its duty whatever the consequences to it may be.
The noble Earl, Lord Rosebery, who speaks with such weight and authority, seemed to anticipate very terrible consequences. I seemed to recognise all through the noble Earl's speech, and some other speeches, a rooted distrust of the democracy. I do not share that distrust. I have no doubt that the issues will be confused at the General Election, perhaps purposely confused, but I have that confidence in the intelligence and in the sense of fair play and justice of the electors that I believe they will see, if a constitutional crisis has arisen, it has arisen, not of necessity by any action of this House, but because it is the desire of His Majesty's Government to place before the people at the election something more palatable than their Budget or their financial policy. Whatever the opinion of the electors may be about the Budget, whether they approve or disapprove of it, or whether they approve or disapprove of the action of

1185
this House, if this House stands up now for the rights of the people to be consulted, and does its duty, I am perfectly certain that this House will retain the respect of the country.
LORD SWAYTHLING: My Lords, I did not intend to speak in this Debate because I hardly thought that this was the place to enter into financial details. As to the principle of the Amendment, I am quite content to leave that question in abler hands, but I wish to record that I support the Budget because I consider it the best and the safest mode of raising the money which we so unfortunately require. I desire to say a few words with regard to Tariff Reform, and also as to the financial position. The noble Marquess the Leader of the Opposition gave us Tariff Reform as the alternative to the Budget, and he pointed out that our rivals on the Continent raise high tariff walls against us, but I think there are some noble Lords who do not realise that foreign trade is simply barter. We do not pay for our imports in gold. If we were to attempt to do so, we should find that our small stock of gold at the Bank of England, thirty or forty millions, would disappear in a few weeks. What we must do is to pay our exports against the imports, and if you hamper that trade and impose upon the imports a protective duty, you lessen also the exports and reduce the possibilities of employment. I believe that the French Government, when there is a bad harvest, suspend altogether or reduce the import duty on wheat, with the object of inducing other countries to send wheat to them. Does that not prove that the consumer pays? Germany has protective duties, but Germany never enjoyed the blessings of Free Trade, and they cannot forego the large revenue they derive from taxing their own subjects by these protective duties. And is the condition of their working men as good as ours? I think from all my experience, and from what I have heard, it is very much worse, and we all know that poverty either starts or increases Socialism.
I now turn to finance. I have had sixty-one years' experience of finance in the City. I do not think I ever missed criticising a Budget brought forward in the House of Commons, but I had thought that this House would be a haven of rest without financial cares or troubles. Unfortunately, I fear that we are going to have a great struggle over financial control.
1186
During those sixty-one years of financial life I have gone through several crises which used to occur pretty regularly once every ten or eleven years, but it speaks well for the good sense and the intelligence of the City of London that now for a long period they have not felt that distrust which develops into panic. There is now some hesitation on account of the transition stage that may be brought about through the rejection of this Budget, but all in the City hope that some prompt measures will be taken to provide for the continuation of taxation. I noted—and I am sorry that they are not now in their places—that those noble Lords whom I may call the City Lords took a very pessimistic view of the financial position, and of our credit. They said that our capital had gone abroad in large quantities, and that our credit was affected by this Budget.
May I respectfully submit the other side of that question? During the six months from the end of March to the end of September the Bank Rate was two and a-half per cent., and the discount outside in the market was on several occasions as low as one and a-quarter. The enormous amount of deposits at our joint stock banks, estimated at £900,000,000, only yielded one. per cent., and it is no wonder that a large amount of our capital sought the foreign markets in order to get a better interest. I want to know in what form our capital has gone out of this country. Is it in cash or in shiploads of bonds? They still remain the property of the British owner, and they can be brought back in a very short time if they become more useful here than elsewhere. A day or two from the Continent, and a week from New York would suffice to bring them back. The Bank Rate of interest has increased from two and a-half for discount and three per cent. for advances to five per cent. for discount and five and a-half per cent. for advances. Consequently money, which, like water, runs in favourable channels, is coming over in larger sums. If cash or securities are sent over to evade the Income Tax or Super Tax, remedies could be provided to stop that practice. It is useless for me to go into those remedies now, the time not having arrived, but our credit, I may tell your Lordships, is still the best in the world. As an evidence, the portfolios of foreign bankers are full of English bills. To give you one startling instance, the Bank of France—the State bank—has been accumulating English bills

1187
for the last six months; it has already got over a million sterling in these bills, while their increase is about a quarter of a million every week. Our Consols yield barely three per cent., if you take the extra tax. In France they have no tax on the Rentes. Our Consols stand at eighty-two and three-quarters, which is about fourteen or fifteen per cent. higher than German stocks. In fact, it is the highest-priced stock in the world, with the exception of that of the United States, who issue bonds at a low rate of interest as a basis for the circulation of bank-notes to their face value. There is even an increase in the returns from the Clearing House. Where, therefore, is this great depression?
The noble Viscount opposite talked about Irish Land stock, and said that it had decreased in value some three or four per cent. Well, no wonder the price keeps down if the general public, and the bankers especially, know that further large issues of that stock will take place. It is well known that when you issue every now and again large sums of a certain security you must lower the price. I think it was one noble Lord opposite who asked, "How is it our stock goes down, and Japanese stock goes up?" There is a very good reason for that. Japan pays five per cent., and what is more, the Japanese Government declare that they will issue no more stock in the near future, and they are paying off debt rather rapidly. There are always many complicated questions arising with regard to the prices of every stock, and you must not take the bare quotation as the only criterion. It is a great advantage to this country to send money abroad. We try to realise the Biblical quotation, "Thou shalt lend unto many nations, but thou shalt not borrow." Unfortunately, we cannot resist borrowing money from abroad, but I would appeal to noble Lords to consider one point with regard to the Budget, and that is to put the sanctity of the poor man's loaf far above any question of taxation of land or the taxation of liquor.
[The sitting was suspended at eight o'clock and resumed at nine' o'clock.]
LORD ELLENBOROUGH: My Lords, the Government appear to think that the House of Commons alone should be the judge of the proper time for a Dissolution, and that neither the people nor anyone else should have a word to say in the matter.
1188
The Royal prerogative, too, is now claimed as an appanage of the Prime Minister—that is, by the majority of the House of Commons under another name. Some other authority, not necessarily the House of Lords, should have the right to dissolve the House of Commons. No Chamber in any other country has powers so unchecked. None of the authors of written Constitutions ever dreamt of giving such powers to a single Chamber. Some form of referendum might meet this if either House had power to submit points in dispute to a referendum, on giving three months notice, during which time an agreement might be come to between the two Houses. The people would have time to think it over, and contested legislation would only be delayed three months, if it was in accordance with the views of the electorate.
The noble Viscount the Secretary of State for India I understood to say was opposed to a referendum on the ground that it reduced the responsibility of Statesmen. But I think it would increase their caution. I do not myself believe that this Budget would ever have seen the light if those who brought it forward knew that it would eventually be referred to a referendum. It was because they thought the House of Lords so weak that they attempted to pass the Bill and override this House. Whatever this House does, it should not surrender any of its rights to the House of Commons. That body is far too powerful already, but I think that it might be wise for the Lords to hand over a part of their power to some institution specially created to act as a check to the House of Commons, whenever it appears to be misrepresenting the people, or the Lords might be strengthened by making it to some extent an elected body. I say that the present House of Commons misrepresents the people. Is there a man in either House who believes that when this Bill is rejected it will ever come back to us in its present form with the cry of "The Bill, the whole Bill, and nothing but the Bill" as was the case with the Reform Bill of 1832? No! Your Irish allies will take care of that. Lord Wear-dale has made the point that for 200 years the Lords have never rejected a Budget. But until now the Commons have never sent up a revolutionary wild-cat Budget, and I hope that another 200 years will elapse before a Second Chamber finds itself obliged to appeal to the people on a finance question.

1189
I shall touch for a moment on the naval finance of the Government. It has been decided that four more Dreadnoughts are to be built, but not one penny has yet been voted for them, Now ready-money payments, whether in public or in private life, are the essence of economy; they are the origin of the co-operative societies and large establishments on ready money principles that are now so flourishing in all parts of the country. If you do not pay ready money it will cost you more, and this is true, whether you are buying tea for private use or ironclads for the public service. The people of this country are, however, so immersed in their own business or in their amusements that they can only think of one public matter at a time. When they had obtained what appeared to them to be a promise of eight Dreadnoughts, their agitation calmed down. They quite forgot that there was also a shortage of sea-going destroyers of the more modern types, and that in the Russo-Japanese war, which began on the 8th of February, no battle of fleets in the open sea took place until the 10th August. During the intervening six months the flotillas and lighter vessels were constantly engaged. Several battleships and large cruisers on both sides were destroyed by mines and torpedoes, before a pitched battle took place between the main fleets.
Then, again, by not building continuously the Government have greatly increased the cost of the vessels that they will have to construct, by giving intermittent instead of permanent employment. The hungry unemployed for one year will be overtime workers at high wages in the next, which I submit is bad finance and very hard on the workmen. Altogether their naval finance has been unbusinesslike and uneconomical. For this, Mr. Lloyd-George and Mr. Winston Churchill are, I believe, chiefly responsible. Mr. Winston Churchill should take warning from the fate of his father. All went well with him until he attempted to make serious reductions in the Naval Estimates when Chancellor of the Exchequer; then he fell like a sky-rocket to rise no more. During the last two years our Estimates for new construction have been about the same as those of Germany, and we have, in consequence, a great deal of lee-way to make up. Our Estimates for new construction and armaments for 1910–1911 are £10,256,000, and those of Germany are £10,751,000 when calculated on a similar basis.
1190
If we wish to keep the command of the sea so as to be able to feed our population with any degree of certainty we ought to spend twice as much as Germany in naval construction. Germany gets as good value for what she spends on shipbuilding as we do ourselves. If a Dissolution had been postponed for two years we should have had Lloyd-George Naval Budgets for two years longer. If he and his colleagues are returned to power we shall have Lloyd-George Naval Budgets for seven years longer. If that happened, then at the end of that time a great deal more than the House of Lords will have ceased to exist. Great Britain as we now know it will have passed away, and the inhabitants of these islands will have learnt to submit to the dictation of foreign Powers under pain of starvation.
LORD REAY: My Lords, I wish to approach the subject from the point of view of a Gladstonian Liberal. Gladstonian Liberals are now called moderate Liberals. They were not always considered moderate Liberals during Mr. Gladstone's life. We are in favour of the maintenance of Free Trade and believe (hat direct taxation ensures that, rather than the increase of indirect taxation. We wish to maintain the Sinking Fund and see the gradual redemption of the National Debt. We do not object to taxation on unearned increment, believing that ultimately the tax on urban land will, in most cases, fall on the occupier of the buildings after the land has been developed. That is a question of the incidence of taxation, and the incidence of taxation is of all the problems of political economy perhaps the most intricate. We approve of the exemption of agricultural land and of the concession made with regard to the assessment of Income Tax on agricultural land, and we repudiate the doctrine that there is any monopoly in land. Neither do we object to the valuation of land so long as it is carried out by experts, as it is in India. For any one who has been connected with the administration of India land valuation has no terror. And we believe that valuation with regard to agricultural land will explode a great many of the fallacies with reference to the site value of agricultural land. If the capital spent on improvements is taken and the maintenance charges, the site value of agricultural land will be very slight indeed. The President of the Surveyors' Institute said lately that the capital value of agricultural land

1191
in thirty years was depreciated by about £900,000,000. This shows the fundamental difference between urban land and agricultural land, because in the case of urban land there has been a general increase in value, and in the case of agricultural land depreciation.
Now with regard to the Income Tax the Death Duties, and the Super-Tax, perhaps the House will allow me to give a few figures, and they will be the only figures I shall give. I have here a carefully drafted return under the heads of Income Tax, Death Duties, and Super-Tax in the case of estates of the capital value of £50,000, £100,000, £250,000, £500,000 and £1,000,000 respectively, each yielding an average return of three per cent., the owner insuring himself against Death Duties on a three per cent. basis, with the assumed expectation of life of twenty years, and the amount of the insurance being so adjusted as to leave the net capital value unaltered after the payment of the Death Duties. It is presumed that the property is being left to lineals or to a widow. I shall only give the totals; I shall not weary the house with details. In the case of an estate of £50,000 the taxes payable under the Budget of 1908–09 were £168; under this Budget the figure would be £240. An estate of £100,000 under the former Budget, £375; under this Budget, £567. An estate of £250,000, under the former Budget £1,144; under this Budget £1,789. An estate of £500,000, under the former Budget £2,498; under this Budget £3,821. An estate of £1,000,000, under the former Budget £5,472; under this Budget £9,171. No doubt these increases are not light, but then this is an Imperial Budget for Imperial needs, and at a moment when the Colonies are preparing to bear their fair share of the burden is it desirable for us to set the example of saying that we do not wish to undertake our share of that burden?
In a recent speech at Périgueux the Prime Minister of France, M. Briand, spoke to this effect: "We are obliged to impose sacrifices, and we trust you will do your patriotic duty with regard to the sacrifices, which we shall make as slight as we possibly can under the circumstances." We do not desire to see the credit of the country shaken in any way or London to cease to be what it is now, the centre of the world's finance; and we wish the defences
1192
of the country placed on a secure footing. But we view with alarm the increase of expenditure, and wish to see a rigorous scrutiny applied to expenditure in the future. We consider that the constant increase of armaments all over the world is an international question which must be dealt with by diplomatic negotiations between the Powers chiefly concerned. We do not doubt that the Government will take the opportunity whenever a favourable occasion arises. We are in favour of expenditure on education and sanitation, because we consider that thereby the earning power of the wage-earner is increased. We do not believe in the readjustment of the inequalities which exist in the present social condition by means of taxation.
As my noble friend Lord Morley justly observed, neither this Budget nor any other Budget can create a Millennium, but this Budget will certainly not create a Pandemonium. We object to any policy which would stir up instead of subdue class antagonism. We are opposed to Socialism, and because we are opposed to Socialism we support this Budget, which we believe will not create grievances such as would arise under a Budget which increased the burden of indirect taxation. The spread of Socialism in Germany is mainly due to the system of taxation and to the high rate of national expenditure. Neither do we believe that this Budget will diminish what Mill called "the effective desire of accumulation." We do not consider that thrift will receive from this Budget a check, and that the growth of British capital will be imperilled if this Budget is adopted. With regard to the employment, or the investment, of British capital abroad, in addition to what has been said on this side of the House there is perhaps, one element which has not yet been alluded to. If capital is invested in a country with a high tariff the interest accruing on that capital is used for the payment of the imports, the needful imports, from that country. For instance, the export of grain and foodstuffs from America can be paid by the interest on the securities held by British capitalists in America, and by that means you can defeat the bad results of a high tariff because the exports from this country which you would have to send to pay for the imports might perhaps meet with difficulties. And then the payment can

1193
be made, as I have shown, by the interest which accrues to the capital invested in such a country. We do not believe that the money taken by the State, if wisely spent, will increase unemployment. Extravagant expenditure on the part of the State is as much to be deprecated as extravagant expenditure by individuals. In both cases, whether the money is spent by the individual or by the State, with regard to employment it depends on the question whether such expenditure is remunerative or not.
Now with regard to the constitutional question. We do not wish to see the constitutional practice which gives the House of Commons control of the finances of the country upset. We do not believe in the doctrine of mandate, a doctrine which would sap the independence of the representatives of the people. We do not accept the novel doctrine that this House can dictate an appeal to the country. An appeal to the country on one subject, which with a referendum would be possible, would not, under the circumstances in which an appeal will take place here, give the verdict of the country on the Budget, because the verdict will be on a variety of issues. We are strongly in favour of a Second Chamber, but we consider that it imperils its authority, perhaps even its existence, by exceeding the limitations which the Constitution has imposed on it. We agree with Lord Balfour that a referendum on matters of finance would make a most momentous change in the Constitution as it has grown up, and that there must be a considerable amount of give and take in the relations between the two Houses, as was shown in the very eloquent speech of my noble and learned friend Lord James of Hereford. Many Liberals, therefore, consider that it is their duty to support the Government and not to incur any responsibility for a crisis which will submit to the judgment of the country much wider issues than the issues which may be involved in some of the novel features of this Budget—issues which hitherto Statesmen on both sides of the House have desired carefully to avoid. Let us not forget the lesson of history, that oligarchies are seldom destroyed and more frequently commit suicide.
LORD KNARESBOROUGH: My Lords, practically everything which can be said on the financial proposals of the Government
1194
has already been said in this House. I myself have an excellent speech on the Budget in my pocket, but I must ask you to take it on trust, for it will remain there. But I wish to say a few words about the Amendment before the House, and on the Division which is to be taken to-morrow. The noble Lord who spoke last gave us some figures concerning the cost to the inheritor of various duties which I think may perhaps be rather misleading. I have just worked out a case which was suggested to me—it may be a very hard one. We will suppose one of your Lordships owns an estate valued at a little over £1,000,000. You have had two sons. The elder has died, leaving you a grandson. The grandson inherits, and he has to pay in Death Duties £158,500. The estate, valued at a little over £1,000,000 cannot possibly bring in net more than £30,000 a year. That is equivalent to confiscating the whole income of the estate for five years. Now carry this a little further. Let us suppose this grandson is a minor and the last in entail; the estates could not therefore be re-settled. We will suppose that during his minority the whole of this large sum is paid off. He succeeds at the age of twenty-one and dies shortly afterwards, leaving the estate, as he naturally would do, to your second son, his uncle, who would succeed to the title. The second son would have to pay a sum of £235,000. The estate would have first gone to your grandson and then back to your second son and the State would have taken out of it £393,500.
The noble Lord who spoke last seems to consider this a very moderate amount, but let us try to see ourselves as others see us. Supposing this had taken place elsewhere, say in Turkey at the time Mr. Gladstone was conducting his fiery campaign against the Turk. Supposing he had got hold of a case of this sort in which a rich landowner had died, and the Sultan had exacted £158,500 from the son, and when the son died leaving the estate to his uncle the Sultan had exacted £235,500, making £393,500, what would Mr. Gladstone and the papers which sup-ported him at that time have said? Would they not have pointed out that no country could flourish, financially or agriculturally, where such exactions were possible I Would they not have said it was a folly, almost a crime, for any English people to lend money to such a nation? But

1195
the irony of events is very strange. A few years ago Liberal politicians were holding up Turkey as an example and a warning, and now, except for the protection of your Lordships' House, which they wish to destroy, property is far safer in Turkey than it is in the United Kingdom.
I am not going to pursue the Budget any further. I should like to be allowed to say a very few words on the Amendment before the House and the Division which is to follow it. Now, my Lords, I do not suppose anything I shall say will have any effect on noble Lords opposite. I am not addressing my remarks to noble Lords on the other side of the House. I have no doubt they have made up their minds to swallow their medicine, and when you have made up your mind to swallow your medicine it is probably wiser not to examine the ingredients too closely, but to shut your eyes and swallow it down quickly, however black the draught may be. Nor do I propose to address myself particularly to those on our side of the House who have made up their minds to vote for the Amendment, but there are some to whom it has seemed very attractive to abstain from voting, and it is especially to them I wish to address my remarks.
I know how unbecoming it would be for one who is a comparatively newcomer among you, to attempt to advise your Lordships how you should give your votes; but I hope I may be allowed to make an humble appeal to your Lordships on account of our Unionist Members and of the candidates who are to fight this battle for us. Our Unionist Members have fought a gallant fight in the House of Commons. They are worn out and exhausted by all-night sittings and a session of extraordinary length. They have now without any rest to start again and fight an election campaign, and I want to appeal to you not to stultify their efforts in the House of Commons and dishearten them for the contest, by any want of unity on this side of the House. Two noble Lords, Lord Cromer and Lord Balfour of Burleigh, made most valuable contributions to the debate, but to our great disappointment they ended by announcing that they would not vote for the Amendment, but would abstain from voting. Now what will the consequences of that announcement be? I believe that a thousand Liberal speakers
1196
have already made notes, either mental or in their pocket books, of these announcements as a most important point to make in their forthcoming speeches, and I believe that every one of the thousand believes that votes will be transferred from our side to the other in consequence of these announcements. Lord Avebury has told us on how few votes a majority at a General Election depends, and every Unionist Peer who abstains or votes against the Amendment will transfer votes from our side to the other. How could it be otherwise? Every one of you has influence in his own neighbourhood.
I imagine I am at a Liberal meeting and an oleaginous gentleman comes forward and says—
" My dear friends, I am happy to be able to reassure you on the subject of this beautiful Budget. You know your friend and neighbour, Lord So-and-So; you know how good, how charitable a man he is! What excellent judgment!—
You may be sure you will be dressed up in beautiful clothes for the occasion—
" And did Lord So-and-so vote against the Budget? No! my friends, I knew before I ever scanned the list that the name of Lord So-and-so would never be found voting against this magnificent Budget! "
Well, now, what sort of effect would this have on an elector who had always voted Liberal, but who was frightened at the Budget, and who was thinking of voting for our side? Would he not be re-assured? Would he not say to himself, "Lord So-and-so has had the opportunity of hearing both sides of the question. He has heard the debate in the House of Lords. He is far harder hit by the Budget than I am; surely if it is good enough for him, it is good enough for me." I am sure that I shall be borne out by all the noble Lords in the House who are experienced in elections. In the turmoil of a General Election there is no room for fine-drawn distinctions. To use an Americanism, "we have ' no use ' for fine-drawn distinctions." The electors do not understand them, and will have none of them. Every Peer who votes for the Amendment will be held to be against the Budget; and every Peer who deliberately abstains will be held to be in favour of the Budget, the whole Budget, and nothing but the Budget!
You may say all this is self-evident, but the gospel of abstention has been

1197
preached by three notable apostles. Three noble Lords of commanding ability, immense experience, and the highest character have announced that they will not vote for this Amendment. I listened most attentively to the speeches of these three noble Lords, and I find them all lacking in one important particular. They are, inconclusive. They showed us the pitfalls but they did not show us the path. They all condemned the Budget root and branch. We all know that they wish the Amendment had not been brought forward; but now that it has been brought forward do they wish us to vote for it, or against it, or to abstain? We have heard a great deal of aëroplanes lately. I imagine myself in the country on a wintry day. The barometer is at stormy; dark clouds are drifting overhead. I wish for a clearer view of the country. I get into my aeroplane; I mount; I mount higher and higher. The view is magnificent, everything is becoming clear, when, suddenly all is darkness and obscurity. What has happened? I have run into the clouds. This seems to me the case, with the three noble Lords. We have been carried away on the wings of their eloquence, we have mounted higher and higher till we soared with them in the loftiest regions of statesmanship and politics. Then they led us into the clouds and left us there.
My Lords, this is not a debating society; we are engaged in practical business of a most important kind. We must assume that the speeches of the noble Lords were designed to have some political effect on this debate, and on the Division which will follow it. But what effect? To be able to say Liberavi animam meam is no doubt a great relief to the sufferer, but how did they mean their speeches to affect animas nostras? To make my meaning clear let us imagine that, one of the genii of the Arabian Nights were to appear to-night to each of the three noble Lords, and were to say to them, "If you will say the word, I will cast such a magic spell over the minds of all the noble Lords on this side of the House that when the critical moment arrives, when the Division is called to-morrow night, they will all follow your example and troop solemnly out of the House behind you, without voting, leaving our noble Leader, who has moved this Amendment, to go into the Lobby alone." Would they say the word? Do they wish to be left to plough their three solitary furrows alone,
1198
or do they wish for companions? Do they, like Saul, aspire to be leaders of a host, or are they content with the mantle of Jeremiah?
I know there are some who think that it is unwise to carry this Amendment, for fear that worse will follow. But what worse can follow? That the House of Lords may be abolished? But I am quite certain of this, that if you lose the power, either by voluntary abdication or the will of the people, to oppose Finance Bills of this character, then this House had better cease to exist. The State, the Empire, and the individual can be ruined by so-called Finance Bills just as easily as in any other way. If a single Chamber is to have unbridled power, then let only a single Chamber exist. For your Lordships to sit here and pass Bills of which you profoundly disapprove, with no power either to amend or reject them, would be neither dignified nor profitable. Much better let the electors realise that unbridled power is being given to their representatives and they will at once set to work to devise some means of keeping power in their own hands. What expedients they would devise, whether it would be a referendum, or annual Parliaments or triennial Parliaments, or what it would be, I cannot say; but something they would certainly devise. And if the field of battle is to be the House of Commons alone, then the great abilities of many of your Lordships will be far better employed there, where the real battle is being fought, rather than here, where only academic discussions could take place. In any case, if the House of Lords were abolished you might derive some cynical amusement from seeing the effect which the abolition of this House would have upon the group of very rich men supporting the Government, which they are so fond of boasting about.
In conclusion, I will only say that beyond political and Party considerations there is the sound commonsense of the country to reckon with. If the sound commonsense of the country deliberately wishes for socialistic legislation, confiscation of capital, and abolition of your Lordships' House, then, certainly, socialistic legislation will be carried, capital will be confiscated, and the House of Lords will be abolished in spite of anything that you can do. But give the sound commonsense of the country a chance. Then if history has to record the fall of this

1199
ancient House, let it record also that while it existed its members had the courage of their convictions and fell fighting gloriously in a just cause!
LORD AMPTHILL: My Lords, it is evident that short speeches are now the order of the day, and I trust I shall not offend by exceeding the limit that now seems appropriate. I desire, however, with your Lordships' permission, to make a few general observations and then to refer to one particular point which I have very much at heart, and which has not received any attention in this Debate until it was raised by my noble friend on my left. As regards the general observations I wish to make I trust that the noble and learned Lord on the Woolsack will not deem me presumptuous if I make so bold as to use his speech as the peg on which to hang my argument. The noble and learned Lord asked us to consider what would be the consequences of adopting the step recommended by the noble Marquess the Leader of the Opposition. But the noble and learned Lord did not seem to have considered—he certainly did not ask us to consider—what would be the consequences of taking the alternative course and passing this Bill. I venture to say with all respect that this rather one-sided view of a question which undoubtedly has two sides on the part of the Lord Chancellor was disappointing to a great many of us. We are, of course, aware that the noble and learned Lord on the Woolsack is a Minister of the Crown and that he must therefore speak as a Party politician, but we certainly hoped that in a question involving a grave constitutional issue he, at any rate, would have sought to give us guidance by a reference to both sides of the question.
The fact is that from whatever point of view we regard our duty on this occasion we find ourselves in a grave dilemma. It is impossible for us to adopt any course which will not be displeasing to a large number, possibly one half, of our fellow-countrymen, and it is not possible for us to adopt any course which will not, in a greater or lesser measure, imperil the balance of forces in the Constitution. It is impossible to say at the present time whether, if we adopt one course or the other, we shall offend the greater or the lesser number of our fellow-countrymen, but certain it is that if we were to pass this Bill we should incur the contempt of all those who look to this House to give
1200
pause to legislation which has excited apprehension, which has given rise to unusual excitement, or which, to put it in another way, has not received a popular mandate. But if, on the other hand, we adopt the course recommended by the noble Marquess it is equally certain that we shall incur the resentment of all those who regard this Budget as a first step towards the attainment of the policy which they have at heart—namely, the fundamental change of our political and social system. If we take the course which is pleasing to those who are friendly to this House there can be no question that we shall imperil the balance of forces in the Constitution. As evidence of that we have the threat or warning—a warning which, if I am not mistaken, was very carefully drafted before hand—which fell from the lips of the noble and learned Lord on the Woolsack.
But if we seek to conciliate those whom we regard as the aggressors, those who are not friendly to this House, is it not certain that we shall establish a precedent which will indubitably be used to reduce the Second Chamber to impotence? I noticed that the noble and learned Lord on the Woolsack omitted to mention the warning or threat which his friends apply to this contingency. But we have heard it, and there is no mistake about it. Even if we were to pass this Budget, what has been said by every Radical speaker all over the country? That they will not have done with the House of Lords, that their desire for abolishing the veto of the House of Lords—that is to say, reducing this House to practical impotence—will remain the same as ever. We may be misinformed, but we have a pretty shrewd opinion that, supposing we had passed this Budget, there was a little scheme on the part of the Government to dissolve Parliament in February and appeal to the country for a fresh lease of power and a mandate against the House of Lords on the score of their contemptible weakness and pusillanimity in this matter. If this is not the case perhaps the noble Lord who is going to speak after me will deny it.
I venture to say again with great respect that the argument, all the arguments, in the speech of the noble and learned Lord on the Woolsack cut both ways. His principal objection to the course we are taking, besides the one which was founded on the opinion that it was unconstitutional, was that if we once did this thing of which

1201
he disapproved we should always be doing it, that we should get into a bad habit. Can you not apply the same arguments to the House of Commons and say if they once resort to the expedient of "tacking" they will always go on doing it? Nevertheless it seems to have become part of the creed of the Liberal Party in connection with the discussion of this measure that nothing but abuse can sanction the use of a right, that if a right is not abused, if it remains dormant because there has been no occasion to use it, therefore it must necessarily expire and cease to exist.
The noble Viscount the Secretary of State for India made use of a very similar argument, which I venture to think also can be turned against him in exactly the same way as he used it against us. The noble Viscount made five points. He said five propositions were involved in the Amendment proposed by the noble Marquess. The first was, he said, that we were arrogating to ourselves the control of taxation. Well, my answer to the noble Viscount is that that is just what he is doing, that is just what the Government are doing through the House of Commons. The control of taxation belongs to both Houses of Parliament. The proof of that is to be found in the preamble of this Pill, which runs exactly the same as the preamble of every other Pill, namely that the enactment is to be "by and with the consent of the Lords spiritual and temporal." Rut I noticed when the Lord Chancellor was enumerating the various points of Parliamentary practice upon which he based his argument that he omitted to mention this one, which seems to me to be by itself pretty conclusive.
The next proposition set forth by the noble Viscount was that we were assuming a power of penal Dissolution. My answer to the noble Viscount is that the Government are assuming a power of penal administration. If they cannot get their Bills passed in the manner which has been customary and according to the Constitution they introduce them into their Budget in order to do what they call in their jargon "get even" with the House of Lords, and "get even" with the licensed trade. The proposition of the noble Viscount was that this action will be repeated whenever the House of Commons displeases your Lordships' House. Can we not reply with equal fairness and equal logic that the House of Commons will
1202
tack Bills on to their Finance Bill whenever the action of the House of Lords displeases them? Then again the noble Viscount said, and no doubt the phrase will be much quoted, that we are turning a representative supremacy into an oligarchic supremacy. I submit that the nation is represented not by the House of Commons only but by Parliament as a whole, and that what the Government are trying to do, if they succeed in the policy of reducing this House to impotence, would be to establish the much smaller oligarchic supremacy of the Cabinet. It is needless to remind you that under the present Parliamentary system the majority of the present House of Commons are merely tools in the hands of the executive Government of the day.
To return to my argument, I say that, with so little to choose between the alternative dangers and disagreeables which are involved in either of the alternative courses which are open to us, there is absolutely nothing to prejudice or weaken that sense of duty with which this House always has and always will discharge its appointed task. The only question before us is "What is our duty?" And on that point I need only say that I agree most fully with all that has been said by those who have supported the Amendment of the noble Marquess. But I venture to think that there is yet another reason, a reason which seems to me to be at least as important as those which have already been put forward, for referring this Budget—and when I say the Budget I mean the whole policy involved in the Budget—to the nation. The criticism thus far has mainly been directed to the methods by which the taxes are to be raised. There has been less mention of the purposes for which they are to be raised, and it is in this latter respect that I beg your Lordships' consideration of one particular point.
I maintain that we ought to refer this Budget to the people because it does not provide adequately for national security. Eight months ago His Majesty's Ministers, of their own accord, came down and told an awe-struck House of Commons firstly that they had completely miscalculated the rate of progress of German naval construction; secondly, that Germany had developed a power of building and arming Dreadnoughts equal to, if not superior to, our own; and, thirdly—the most startling of all—that the entire British Fleet would

1203
have to be reconstructed. Now what did the Government do? Did they call upon the nation at once to put forward her whole energy and might in order to meet this great danger from without? Did they shape their Budget so as to meet this supreme need? Did they seek to unite all classes in a patriotic determination to discharge that first and most human duty of all, the duty of self-preservation? My Lords, they did none of these things. On the contrary they chose the very moment of national awakening to a great peril, which has long been perceived by those who make a study of these things but not by the people at large, to provoke a bitter internal conflict, to stir up a class war, to embitter Party animosity, all for the sake of their own Party policy; and they thus made of the nation "a house divided against itself," instead of a united nation determined to sacrifice anything rather than imperil her liberties and her honour. Can there be any doubt whatever what the response would have been if His Majesty's Government had adopted the other course, if they had claimed the support of all patriotic men to a policy of providing beyond all shadow of doubt for the security of the nation? I retort on the noble Viscount the Secretary of State for India that the Government made a great tactical mistake. If they had made such an appeal there would have been no question whatever about assenting cheerfully to additional taxation fairly adjusted between all classes. Not only sixteen millions but twenty millions, thirty millions would have been voted without serious objection. What has come of the brave words of the Prime Minister, who said in the House of Commons on the 16th of March—
" Any Government which sacrifices national safety to any question of expediency would be worthy of severe condemnation."
Those words are not too high in which to describe the duty of the Government, for surely nobody will deny that it is the first duty of every Government, the highest duty of every Government, to protect the State against external aggression.
What, again, has come of the words of the Foreign Secretary who, above all ought to know, and I believe does know the real nature of the danger? Sir Edward Grey, on the 19th of February, used memorable words. He said—
" There is no half-way house in naval affairs between complete safety and absolute ruin."
1204
Now will anybody dare to say we have complete safety at the present moment, or that this Budget attempts to provide for complete safety? I am not going to take up your Lordships' time, in view of what I said at the outset, by going into details. The facts, moreover, are familiar to all your Lordships. There are, however, certain circumstances which it is just as well to bear in mind, which we ought to bear in mind, and which I shall merely enumerate.
In the first place the two-Power standard, that rule of thumb on which the nation has relied and which has given confidence to the nation in each successive Government, was abandoned on the 26th of May, when the Prime Minister qualified his previous explicit declarations and pledges in such a manner as to render them ineffective for any practical purpose. In the second place, for the first time that memory can recall, the votes for new construction in our Estimates are less than those of a single other Power. Then, again, we know that Germany can now construct and arm fourteen Dreadnoughts simultaneously against the eight which we are able to construct and arm at the same time. Germany will be able to dock and repair nine Dreadnoughts on the North Sea coast while we, until 1915, shall not be able to dock and repair more than three Dreadnoughts at the same time. The shortage of medium cruisers and destroyers, to which my noble friend referred, is a matter of common notoriety. The most important point of all is the shortage of men. The personnel was reduced, and I believe I am right in saying that during the last three years not a single man has been added to the establishment of the Navy. It takes longer to make a sailor than it does to build a Dreadnought, and if we are to man the new ships that are built we shall want 15,000 men whom we cannot possibly improvise. What steps have been taken to provide them?
Lastly there is the question of the four contingent Dreadnoughts concerning which we remain in grave doubt. Are they really to be part of this year's programme or are they to be counted in next year's programme? I will not go into the question, for your Lordships know very well what reason we have for mistrusting the Government on this point. Those who dwell on these facts are not alarmists.

1205
The gigantic development of German naval power is surely not for parade, for show, or for any academic purpose. Surely we have a right to assume, nay more, a duty to assume, that what Germany can do she may do at any time without asking "By your leave," and without consulting us as to the time and the object. The gravity of the danger is best measured by the words of the Foreign Secretary, Sir Edward Grey, whom nobody will accuse of being an alarmist. Sir Edward Grey, speaking of what would be the result of the loss of our naval supremacy, said on the 29th of March—
" We should cease to count for anything among the nations of Europe, and we should be fortunate if our liberty were left and if we did not become the conscript appendage of some stronger Power."
Surely no graver, no more impressive warning has ever been addressed to the Parliament of Great Britain. And is it not strange that nothing of that warning is reflected in the financial policy of His Majesty's Government as shown in this Budget? The results of Radical policy in regard to the Navy prove beyond question that any relaxation of effort on our part, so far from inducing other Powers to arrest the growth of their navies, encourages at any rate one. Power to redoubled efforts. That is a fact which is absolutely beyond dispute.
Now, I say that the Government ought to have recognised their initial mistake. They proceeded at first on the assumption that if they reduced our Fleet other Powers would follow suit. When they saw that that was not the case they ought to have recognised their mistake, and they ought to have made it clear in this Budget, which was drafted and conceived immediately after the alarming period which is popularly known as the "Naval scare," that we mean at all hazards to keep our place in the race of armaments, and that it is absolutely vain and futile for any other nation to attempt to overtake us by a sudden sprint or to catch us napping. That, as my noble friend on my left said, would have been the truest economy in the long run. Instead of doing that His Majesty's Government have chosen to persuade the people of this country to once more "sleep in their beds." They have again lulled them into that sense of false security which it is so easy to inspire in the people of this country. They have distracted their attention from this supreme and overwhelmingly important
1206
question by dallying with Socialistic dreams and putting forward pottering schemes for rounding off the sharp corners of motor roads throughout the country. To those who have put forward a plea on behalf of national security they have replied with unworthy sneers about clamouring for Dreadnoughts and not wishing to pay for them. No grosser misrepresentation has ever been made seeing that not one penny of these new taxes is to be applied, or is required, for new construction in the Navy, and that the three millions for new construction is met by the reduction of the Sinking Fund.
I hold that the Constitution was made for Great Britain and not Great Britain for the Constitution. Therefore I have no shadow of doubt that it is our duty to risk even the Constitution in order that we may give the nation an opportunity, before it is too late, of deciding whether they prefer Socialistic experiments to the safety of the realm. Nothing I have heard in this debate has altered my profound conviction that a measure advocated as this measure has been advocated cannot be a righteous measure. It has had to be recommended to the people by appeals to class prejudice, by gross personal attacks on individuals, by misrepresentations as inconsistent as they are varied, of which, by the way, we had an example in the speech of the noble Lord the President of the Board of Agriculture. I say that a cause which has to be recommended in that way cannot be for the good of the nation as a whole. But the nation alone can decide in such a case, and whether the decision be for or against the policy of the Budget—for let us not forget for one moment to impress upon the people that it is not the Budget but the policy of the Budget, everything that is connoted in the Budget, a Budget which is the climax and the outcome of years of Radical policy, the policy which aims at the abolition of the veto of the House of Lords—whether the decision is for or against that policy I am perfectly certain the nation will not blame those who are not afraid to refer the question to their judgment.
LORD DENMAN: My Lords, in the speech to which we have just listened the noble Lord has mentioned gross personal attacks on individuals, I presume on individuals on that side of the House. May I remind him of one or two expressions which have already been used during the course of this debate? One speaker has

1207
alluded to the "vulgarity" of Mr. Lloyd-George, and another speaker—I think it was Lord Newton—spoke also in an eloquent peroration of the "nauseating cant" of Mr. Winston Churchill. I propose to show by a few quotations I have by me the typical style of platform oratory that has found favour with distinguished members of the Party opposite.
First of all I think it would be only right and fitting and respectful that I should deal with the utterances of one or two of what Lord Rosebery terms that "poor but honest class," the Dukes. I will begin with the most moderate and go on to the more violent of those particular utterances. First of all I will take that of the Duke of Rutland. The noble Duke, speaking at Haddon Hall, on September 18, is reported to have said that the Liberals were a crew of "piratical tatterdemalions." I am not quite sure what he meant by that term. I do not wish in the least to complain of that particular utterance, for, after all, the platform speeches of the noble Duke occasionally have a subtle charm which gives them a great deal of interest, even to opponents. On another occasion the Duke of Rutland is reported to have said—
" He would like to place a gag into the mouths of all the members of the Labour Party in the House of Commons."
I have no doubt possibly the Duke of Rutland would like to place a gag into the mouths of all his Liberal opponents as well. That would greatly simplify the controversy on the issues of the Finance Bill.
I next come to the Duke of Beaufort. I see that he was at a function at Cirencester on August 7. There were calls towards the end for a speech from the Duke of Beaufort, and the Duke of Beaufort "good humouredly" responded to these and made reply—
"I should like to see Winston Churchill and Lloyd-George in the middle of twenty couple of dog hounds. (Laughter and applause.)"
Well, my Lords, that was surely a noble and pleasing sentiment. But your Lordships will observe that "the Duke of Beaufort good humouredly responded." Really, I think the noble Duke must possess the grimmest sense of humour of any individual I have met or heard of in my life. Then I pass by without comment a letter from another noble Duke, the Duke
1208
of Somerset, who I do not think is in the House this evening—a letter of the type to which we have become rather accustomed throughout this controversy, containing a thinly-veiled threat that he would discharge estate hands and reduce his subscription to charities and other associations and so forth, should this Budget pass into law. I pass that by without comment.
I come to the speech of a distinguished member of the other House, Mr. Joynson-Hicks. As your Lordships may be aware, Mr. Joynson-Hicks is one of the distinguished men of the Tory Party in the House of Commons. Speaking at Manchester—I have not the exact date, but I think it was recently—he made the following remarkable statement. As I see at all events one noble Duke opposite in his place I would like to assure him these views are not my views but the views of Mr. Joynson-Hicks. He used these words—
" He only wished the Dukes had held their tongues, every one of them. It would have been a good deal better for the Conservative Party if, before the Budget was introduced, every Duke had been locked up and kept locked up until the Budget was over."
I grieve to say these are the actual words of this person, this Mr. Joynson-Hicks. And he went on to say—
" These men who are going about squealing and saying they are going to reduce their subscriptions to charities and football clubs because they were being unduly taxed ought to be ashamed of themselves, Dukes or no Dukes."
God forbid I should ever, in any platform utterance or elsewhere, use language like that about a Duke or any other member of your Lordships' House. But I suppose it was utterances of this kind to which the noble Lord, Lord Willoughby De Broke, referred when he spoke about the claptrap which had been talked about the Dukes.
Then I come to a long letter which appeared in The Times on August 13 from Mr. Hiram Howell, the Tory candidate for, I believe, North Manchester. He said—
" The Lancashire working men were sick of the selfish cry of ' Property, property, property ' and he wished that someone would give the Dukes a hint, if they had not already done so, to put away their pocket handkerchiefs."
My Lords, I wonder whether anybody did give the Dukes a hint to put away their pocket handkerchiefs. I notice that so

1209
far in this long debate, almost unprecedented in length in this House, only two noble Dukes, of a roll of some twenty-eight, have so far taken part in these proceedings. All I can say is that if they did receive a hint to put away their pocket handkerchiefs I would like to congratulate both those noble Dukes who have taken part in this debate—the Duke of Norfolk and his colleague the Duke of Marlborough—upon their glorious and splendid act of disobedience. I pass from the utterances of those noblemen to others of, perhaps, lesser importance but men also of high station and of noble birth. I will take, for instance, the case of Sir Spencer Maryon-Wilson. Your Lordships may, perhaps, have seen a letter which appeared in the Press in which Sir Spencer Maryon-Wilson directed his tenants to address him not as "Dear Sir," but as "Sir Baronet." I observed in the local papers in two consecutive weeks a notice signed by Sir Spencer Maryon-Wilson, owner of the Rectory Field, Blackheath, to the effect that in the event of the land clauses of the Finance Bill being passed he would be compelled, much against his will, to sell the Rectory Field at Blackheath. A fortnight later there appeared the following notice—
" Sir Spencer Maryon-Wilson has taken an estate of some 30,000 acres belonging to the Dowager-Countess of Seafield for the shooting."
It is hard to believe in the abject poverty of people who can rent large estates for the shooting. I have no personal feeling whatever against Sir Spencer Maryon-Wilson. I only quote this as an instance of the sort of pressure which is being brought to bear by well-to-do people upon people who are poor or less well-to-do, and which is really in the nature of threats of what will happen should this Budget pass into law. Then I come to the utterances of another, I have no doubt distinguished, man, Sir Gray Humberstone Skipwith, who is reported to have said in a recent speech at Shipston-on-Stour that the Lord Advocate was one of the most unprincipled blackguards living, that Mr. Lloyd-George ought to have been shot, and that if the Budget passed not only would he not help to resist an invasion of our shores but would actually welcome the invaders. Such, my Lords, is the patriotism of Sir Gray Humberstone d'Estoteville Skipwith, Bart!
I may be told that these men, although, no doubt, distinguished men, and men of
1210
great influence in those parts of England where they reside, are not, after all, men in official positions. I agree that it is possible that none of those gentlemen whom I have mentioned is ever likely to hold either the post of Chancellor of the Exchequer or that of President of the Board of Trade, but I will proceed to quote the utterance of a very distinguished official member of the Tory Party, Sir Alexander Acland-Hood, who, as your Lordships are all aware, has been Chief Whip of the Tory Party for a considerable number of years. I, too, as the House may be aware, have been for some years a Whip in this House, but I do not presume to compare my own position in any sense with that occupied by Sir Alexander Acland-Hood, because the Whip of the Liberal Party in this House, in my opinion at all events, has neither power, nor authority, nor patronage, nor influence of any kind. But in the other House the official title of Chief Whip, that of Patronage Secretary to the Treasury, explains one of the sources of the great influence which undoubtedly belongs to his office. And, further, the position of Chief Whip in the House of Commons is frequently a direct stepping stone to higher rank, even to Cabinet rank. I take the cases of my right hon. friend Mr. Arnold Morley; of our late friend on this side, Lord Tweedmouth; of the present Home Secretary, and of a distinguished member of the Party opposite, Lord Waleran, who have all stepped straight from the Whips' Room in the House of Commons to the Cabinet. Therefore I do not in any sense underrate the importance of Sir Alexander Acland-Hood; indeed I can well conceive of his occupying the post of Chancellor of the Exchequer in a Tariff Reform Government. Speaking last year at Kingston, near Taunton, in Somersetshire, Sir Alexander Acland-Hood in an eloquent peroration, said the members of the Government had "faces like sausages or suet puddings." He was speaking at the time of political cartoons or caricatures, and he said, you could not caricature the faces of members of the Government on that account.
I speak without any animus at all in this matter against Sir Alexander Acland-Hood because I do not think he had in his mind those members of the Government who are also members of His Majesty's Household, and who, as a rule, are spared the distinction or the terror, as the case may be, of the political

1211
cartoonists, with the exception, I am bound to say, of my noble friend the Lord Chamberlain, who at all events may, I think, be able to rest easy under this particular charge. I should like to ask this question. Sir Alexander Acland-Hood is well known to be Mr. Balfour's right-hand man. He says as much in the very speech from which I am quoting. I would like to ask some member of the Front Bench opposite whether Sir Alexander Acland-Hood was carrying out Mr. Balfour's instructions when he made this particular speech. And if his view is not the view of Mr. Balfour, is it the view of the noble Marquess opposite and his colleagues on the Front Opposition Bench? I await with interest an answer on that particular point. I do not pretend that it is a very pleasant task going into this question of the personalities that have been flying about lately, but really noble Lords opposite, or some of them at all events, appear to think that they and some of their friends can use any sort of language on the platform with absolute freedom and irresponsibility; and therefore when you talk to me about the vulgarity of Mr. Lloyd-George I retort "What about the polished metaphors of Sir Alexander Acland-Hood?"
I pass from that to what I believe is the general conception of a good many members of the Party opposite of what the system of Government which obtains in this country is. Let us say that a Tory Government comes into power and stays in power ten years. During that time we are not, as a rule, overburdened in the matter of legislation, but the work of administration is heavy, and is growing heavier year by year, and so heavy does this become that after a prolonged period of office Tory Statesmen, worn out by their labours and by the strenuous resistance that they offer to reforms of any kind, require a rest. It is for this purpose and on these occasions that a Liberal Government really becomes quite useful. It is true that it is unpleasant to see persons in high positions who are not members of the ruling families in this country. It is true that just for the look of the thing a certain number of Liberal measures, carefully watered down, may be allowed to pass into law. But, I repeat, Cabinet Ministers require a rest, and there must be a redistribution, not a redistribution of seats but of offices. The "Elder Statesmen," if I may quote a phrase used by our Japanese allies, must, in the natural
1212
course of things, retire. Places must be found for younger men, not, indeed, so good as their merits entitle them to, but good enough, perhaps, to keep them quiet for the time being. Then, if measures are introduced and we do not like them, after all there is always the House of Lords which can be counted upon to cripple or reject any Liberal measure and which now, apparently, is claiming the right to force a Dissolution upon the country whenever it pleases.
In this country, where games and sports play a large part in our national life, it is frequently the custom to compare politics to a game. I also will compare them with a game in which the element of chance enters but little. This is not an original comparison of mine, but I think it is an apt comparison. It is a game called, "Heads you win, tails we lose." If we suggest very mildly and deferentially that the rules of the game might with advantage undergo some slight alteration then you get hold of words like "Socialist," and "Revolutionist," and "Anarchist," and any other long, dreadful-sounding words ending in "ist" you can find and you sling them at our heads from every platform in the country. If, further, there should rise to high positions, to high office, men who have the courage to stand up for their own side, and not only that but inspire courage in others and infuse a ray of hope into the minds of men bent and bowed and well-nigh broken by the cruel circumstances of their lives, then you say "Not only are you setting class against class "—that, I may mention in passing, was the accusation you brought against Mr. Chamberlain twenty-five years ago—" not only are you setting class against class, not only are you driving capital abroad, not only are you bringing ruin upon the country and the Empire," but worse than all, above all and beyond all, you say, "These men have faces like sausages, or, indeed, like suet puddings." These, my Lords, are the literal and sober truths of the methods of political controversy on the platform of those political purists on the Benches opposite.
I would like to touch for one moment on the speech delivered on Wednesday night by the noble Earl, Lord Rosebery. I am one of those who bitterly regret the severance of the noble Earl from the Liberal Party. I remember the great services which he rendered to the Party in the past.

1213
I remember the brilliant attacks which, when we were in Opposition, he made inside and outside of this House on the Party to which he was then opposed. It was with great regret that I read the speech which the noble Earl delivered recently at Glasgow. He told us the other night that it was delivered in an atmosphere of some seventy-five degrees. I think that fact throws an entirely new light upon it. I can understand some passages in the speech better now than I could before, but how final and complete the severance of the noble Earl from this side was I did not actually realise until I heard him propounding a scheme whereby you could make the defeat which we are about to sustain in the Lobby carry increased weight in the minds of the electors of this country. He made a practical suggestion to your Lordships. He suggested that some 150 out of your number should be chosen—150 out of, roughly, about 500—to do battle against the other side. Well, I am not sure when the noble Earl made that suggestion whether he had perused a list which appeared in the Standard on Monday last which divided the members of your Lordships' House into various different categories. There were, for instance, Statesmen, Empire makers, diplomatists, railway directors, landowners, bankers, soldiers, educationalists, scientists, jurists, county workers and captains of industry. I perused this list with great interest and I only wish I had had more time in the last few days to devote to it, for it was really very instructive. Amongst the captains of industry, for example, I noticed the noble Earl, Lord Cowley. Lord Cowley, I gather from that list, is a "captain of industry." Then I noticed the name of my noble friend Lord Ribblesdale, whom I have known for a considerable number of years. He also figured in that list, I am bound to say rather to my surprise, as a "captain of industry." Then there was Lord Poulett, and really Lord Poulett is the most remarkable instance of them all. Lord Poulett, I think I am right in saying, is but twenty-six years of age, and yet during that short time, no doubt by honest toil and strenuous effort, he has reached this great position of a "captain of industry." That is all the more remarkable because I know for a fact that all this time, when he must have been toiling so strenuously in business and other ways, he was hunting a pack of harriers in Somersetshire with, I have no doubt, considerable eclat.
1214
If the noble Marquess the Leader of the Opposition really did entertain the suggestion of Lord Rosebery I am bound to say he would find himself in a rather difficult position. Supposing he took, say, the Statesmen, the Empire makers, the captains of industry, the railway directors and the jurists, and I do not see how he could well leave out any of those, that gives him a total of 147. Subtracting out of that say thirty who might be Liberal Peers; that gives 117. Now, in the other categories I have mentioned, the diplomatists, soldiers, and so forth, there are somewhere about 300. Therefore he would be in the invidious position of having to choose thirty out of somewhere about 300 of these very distinguished men. Looking back to my rather vague knowledge of history I cannot think of any leader who has been in such a terribly perplexing position since possibly the days of Gideon, the son of Joash. Your Lordships may recollect that Gideon had to choose a few hundred men out of an army of 10,000 to do battle against the Midianites. The noble Marquess is in this respect in a far better position than Gideon, because he only has to choose some 150 out of 500, but, on the other hand, the task of the noble Marquess is in some respects more difficult than that of Gideon, and for this reason. I speak subject to the correction of any member of the right rev. Bench when I say I presume that Gideon had fewer Empire builders, or captains of industry, or railway directors, or county workers to choose from in his army of 10,000 men. No doubt your Lordships are very familiar with the procedure adopted by Gideon, but for the benefit of some captains of industry on the Benches opposite whose Biblical history may be a trifle rusty I may remind them exactly what it was that Gideon did. He was told to set aside "every one that lappeth the water with his tongue as a dog lappeth." May I, with great deference and respect, suggest to noble Lords on the Front Bench opposite that the precedent set by Gideon might be useful for the purpose of choosing champions to do battle with the Radical hosts, but, in consideration of the feelings of my opponents, might I also suggest that water should not be, the only beverage employed for the purpose.
Another thing which I would like to mention, and which, I think, is nearly as important as any of the speeches that have been made by noble Lords opposite, is the

1215
absence during these debates of a distinguished member of this House—the noble Viscount, Lord St. Aldwyn. The absence of that noble Viscount is very remarkable. I understand that he is in London at the present time presiding over the Royal Commission dealing with land transfer. I would like to ask some member of the Opposition, any member who will deign to reply, why it is that Viscount St. Aldwyn has remained absent from these discussions? Hitherto he has taken part in every Budget debate that has been held in this House since this Government came into office. He is the only Ex-Chancellor of the Exchequer in this House. He is still quoted at the Treasury, and will be quoted for many a long year, as a great authority on national finance. Why, I repeat, is he absent from these discussions? Is it because the labours of this Royal Commission are so arduous, or is it rather because he is a great Parliamentarian and a great House of Commons man, and bitterly resents the course which noble Lords are taking with regard to the Finance Bill of this year?
I only desire to offer one or two further observations with regard to this Budget. I would like to say one or two words as to the constitution of this House. The views I hold might be regarded in some quarters as extremely moderate and out-of-date: in other quarters they might be regarded as very extreme. I do not, for example, share the view of the schoolboy who was told to write an essay on Guy Fawkes, and who wrote that Guy Fawkes was, in his opinion, a very wise and clever man because he tried to blow up the House of Lords. But I do say this, that anything more unfair or unjust to a Liberal Government than the present state of affairs it is impossible to imagine. I cannot conceive of a more humiliating position than for men to be given positions of authority, with little, if any, real authority; to be given the semblance of power with little or no real power. That is the case; I am not speaking of the administrative duties of Ministers, but as regards the legislative duties of Liberal Ministers. I can understand to some extent the motives which have prompted noble Lords opposite to reject this Bill, and in all sincerity I say that I respect them for the courage they are showing. I have always respected fighting men, possibly because I am such a painfully peaceful person myself; but I
1216
do not envy them the position in which they are now placed. It is true, I believe that we, at the General Election, will be fighting for our very existence; fighting with our backs to the wall. It is true, on the other hand, that if you lose, the enormous power you now hold may be, to some extent curtailed; but if you win you will gain supreme power—supreme over the Crown, supreme over the Commons; yes, the power supreme, unchecked, and uncontrolled. Noble Lords opposite jeer at that statement. Will any of them tell me what then, in their opinion, will be the issues on which the General Election will be fought, and will they consider themselves entitled to pass a Tariff Reform Budget should they be returned to power? They are forcing us to go to the country, and surely it is fair to the electors to tell us what they will do in the case of a victory for their side?
I would like to quote what was said not long ago by Mr. Walter Long. He said that politics has become a war in this country between the Haves and the Have-nots. I do not think that is exactly the case. It is true that the bulk of the wealth of this country, or certainly the greater part of the wealth of this country, is on the side of noble Lords opposite, but there are on this side of the House some wealthy men, and there are many men of moderate means or men who have a modest competence and who are loyal supporters of the Liberal Government at the present time. Some of them, may be, are men who are engaged in the advocacy of some particular reform. It is easy to sneer at men like those as "faddists" and "cranks," and it is always easy to raise a cheer in this House whenever you choose to do so by those means. But those men, after all, are working wholeheartedly, loyally, for the cause they have at heart, and there are others who are working for the Liberal Party because they see in it the agency, and, as they believe, a powerful agency, for social reform, and who look to Liberalism to check some of the terrible evils which modern civilisation has brought in its train. Well, if you succeed in gaining supreme power, and if you retain supreme power for any length of time, a great number of those men will necessarily, so it seems to me, give up in despair, and then, indeed, politics in this country will become a bitter and a merciless struggle between the Haves and the Have-nots.

1217
And should that come to pass, then depend upon it revolution will not be very far off—not the rosewater revolution which you discern, or affect to discern, but revolution grim and stern and terrible as war itself. My Lords, I pray that that revolution may never come. But if ever we are threatened with revolution then I think there are some members of this House who will sigh regretfully for the days, the halcyon days, of 1909, when they had to deal with desperadoes fierce and cruel, like the noble and learned Lord on the Woolsack and Socialists of the type of my noble friend the Leader of your Lordships' House.
LORD RITCHIE OF DUNDEE: My Lords, I was under the impression that we were discussing the Budget, but the great part of the noble Lord's speech was devoted to personalities. I am not going to make any attempt to defend noble Dukes—first, because I think they are quite capable of defending themselves, and, secondly, because I do not see what it has to do with the Budget. The noble Lord who has just sat down asked us a riddle. The riddle was this—" Where is Lord St. Aldwyn? "Well, I do not know where Lord St. Aldwyn is; but I will ask noble Lords opposite a riddle in return—" Where is Lord Joicey?" I followed the Third Reading debate in another place pretty carefully, and I was very much struck by the fact that while the more timid supporters of the Government were trying to keep one another's spirits up by protesting that there was not the slightest taint of Socialism in this Bill, the Socialist supporters of the Government were congratulating one another on having obtained so very large and satisfactory an instalment of their most cherished principles. I think they were entirely justified in congratulating themselves, because in these land taxes they have obtained from the Government a recognition of the two root principles of a complete system of Socialism—the principle of the redistribution of capital and the principle that increment is due to the action of the community and is therefore the property of the community. The Attorney-General, in the course of that debate, gave his definition of Socialism in these words—
" Socialism is the substitution of cumbrous, ignorant and hide-bound State action for individual enterprise and energy."
If I had racked my brains for a month
1218
I do not think I could possibly have evolved a more perfect description of the general tenor of the Government's legislation during the last two or three years. Nearly every measure they have sent up to this House has provided for the substitution of cumbrous, ignorant, and hide-bound State action for individual enterprise and energy. Almost every measure they have sent up here has been the embodiment of bureaucracy and teaches the people the deplorable lesson that it is not so much upon their own individual efforts that they need rely any longer but that they may lean with confidence and security on the fostering care of an almighty Government. The noble Viscount, Lord Morley, asked us whether we were afraid of the predatory instincts of the people. Well, I am not afraid of the predatory instincts of the people. I am afraid of the lessons which the legislation of the Government is teaching the people—legislation which, as was inevitable, has been accompanied by a horrible growth of expenditure instead of the retrenchment which we were promised.
Now, to crown it all, we are given a Budget containing principles which aim a further blow at private enterprise and attack capital as well. Capital is very shy and very easily frightened, and public enterprise will disappear if you deny it its fair reward. The supporters of the Government laugh us to scorn when we tell them that the working classes will be the first to feel the ill effects of the Budget. But capital is very much more liquid than labour, and capital can go elsewhere and leave labour behind. Socialists hold the view that capital gets too large a return in this country, and I should imagine that the authors of the Budget share this view. If that is the case, why is it that capital is leaving the country in unprecedented volume? Surely if capital got so good a return here it would not want to go elsewhere. Those who hold the view that capital gets too high a return in this country must surely realise that by attacking capital they are bringing about the very opposite result to that which they wish to achieve. Surely they must see that if they attack capital it results in the capitalist asking a higher return for his money than when his security is good. The man who is prepared to take three or four per cent. for his capital when the security is sound will want five or six

1219
per cent. for it if you damage the security, or else he will take his capital elsewhere—a process which the noble Lord, Lord Revelstoke, gave ample evidence is going on at the present moment. The noble Lord, Lord St. David's, the other evening told us that whenever any sound investment was offered in the City of London with good security there was plenty of capital forthcoming. Of course there is. Your Lordships do not want a financial expert from the City of London to tell them that self-evident proposition. The noble Lord was begging the question. Our point is that by damaging the security you are removing the attraction to capital. The first essential of a healthy labour market is an abundant supply of cheap capital, and if you threaten capital labour will feel the first effects. Pursue your policy a little farther, carry it to its logical conclusion, and your credit will go too.
Let us consider what six or seven months of this Budget has done for the credit of the country. I have taken figures from the Stock Exchange lists in April last, before the Budget was introduced, and compared them with the figures ruling within the last few days. This is what I find. I find that whereas Consols have fallen over three per cent. Russian stock is unchanged, Japanese stock has gone up one per cent., and French Government stock one and a-half per cent. Then I have taken the best classes of English railway debentures. I find that Great Western Railway stock has fallen four and three-eighths per cent., and London and North Western debentures three and three-quarters per cent., while Canadian Pacific stock, on the other hand, has not moved, and the best class or American railway bonds has not moved. There is one country that I have not named—Germany. Germany is the exception that proves the rule. German stock has fallen in exactly the same ratio as British stock, and I think the explanation is very simple. Germany is wallowing in the same financial morass as we are in, and from much the same causes—growth of expenditure and the threat of Socialism. Why is it that during this time British securities have fallen while the securities of other countries have either remained steady or been inclined to rise? It cannot be owing to any peculiarity of the London money market, because many of the foreign stocks I have mentioned
1220
are dealt with very largely in London, some of them almost exclusively, so that if the money market had affected one class of stock it would have affected the other. No; there has been a steady pressure to sell British securities, and there has been some influence at work here which is non-existent elsewhere. I say without hesitation that that influence is a feeling of insecurity engendered by the growth of expenditure, by the policy of the Government in general, and by this Budget in particular. The trade of the country cries out for retrenchment and the lightening of the burden of taxation, and the reply it gets from a demented House of Commons is a wildcat scheme of land valuation at a cost according to the Government's own ridiculous estimate, of £2,000,000, but in the view of those who are well versed in these matters at a cost more like £10,000,000 or £12,000,000.
I am a Free Trader, and I am told by the Government that I must take my choice between their policy, crystalised as it is in this Budget, and Tariff Reform. Well, I can name two measures for which the Government have been answerable in the last two months both of which violate the first principles of Free Trade—the Port of London Act and that misbegotten Bill, the Hops Bill, No. 2. The latter Bill was greeted with such exuberant joy by Tariff Reformers on this side of the House that the Government have apparently thought it wise to hustle it off the stage in the hope that it may be forgotten. One or two noble Lords opposite who denounced the Bill as a betrayal of Free Trade are not likely to forget it in a hurry. It seems to me that the chief difference between the two Parties on this question of Tariff Reform, or Protection, or whatever else you like to call it, is that while one preaches it the other is busy practising it. And when I am told that I must take my choice between this Budget and Tariff Reform I have two replies. One is that the land taxes, to which, although I am not a landowner, I object more strongly than to any other part of the Budget, will bring in no revenue this year; and the other is that apparently I have got to submit to Tariff Reform in one shape or another whichever Party is in power, and I think, on the whole, I prefer to be experimented upon by my political friends rather than by my political

1221
opponents. I do not want to make way for Tariff Reform. I should not be sorry to see Tariff Reform "side-tracked," or thrown off the track altogether; but much as I dislike Tariff Reform I dislike this Budget still more, because I believe it contains principles which aim a deadly blow at the very foundation upon which the prosperity of this country has been built—the enterprise and the energy of the individual. Destroy that energy and enterprise, as you undoubtedly will if you carry these principles to a logical conclusion, and you will convert prosperity into ruin. I am going to vote for the Amendment of the noble Marquess because I think the people should have an opportunity of expressing their opinion on a Bill which to my mind is fraught with incalculable danger to the whole of the community.
LORD SALTOUN: My Lords, this is without doubt a Socialistic Budget, and I believe that it is brought in not so much with a view to obtaining the finance of the year as with the object of creating a quarrel with your Lordships' House, because so long as this House is in being and is a power it is quite impossible for any Government to carry on these Socialistic methods. The whole of the legislation of the last four years points to the efforts being made by Socialism to invade Parliament. We have seen in almost every measure the attempt to place the supreme power in the hands of a bureaucracy. What is that but the beginning of the thin end of the wedge of Socialism? In the course of this debate various noble Lords have spoken of revolution. Earl Russell appealed to the French Revolution, Earl Beauchamp appealed to the revolution which took place under the reign of the Stuarts, and now we have the noble Lord, Lord Denman, saying it is very possible that a revolution may take place as a consequence of what is going to occur in your Lordships' House. You must remember that if it does take place it will be a revolution by invitation. Members of the Government have been about London and other parts of the country appealing to the passions of some of the lowest classes in the country; and what can you expect? We all know that there is a certain substratum existing in society always ready, owing to poverty, crime, and other evils, to assist in disorder, especially when invited to do so by those who hold high office in His Majesty's Government. I
1222
think those who have appealed to such terrible measures must be responsible for anything that takes place.
EARL RUSSELL: If the noble Lord will allow me, may I point out that I only alluded to the French Revolution as an instance of the courage of an aristocracy and for no other purpose.
LORD SALTOUN: I should like to say before I leave this subject that I was very glad to hear the Marquess of Northampton say that old age pensions were the product of both sides of the House, and that they would be carried on in the future by both sides of the House. I think that gives a conclusive answer to the statements which were made by the Lord Advocate, and which were so ably refuted by the Leader of the Opposition in the other House. After all, what is it that the Amendment of the noble Marquess proposes? What we propose is that before this Budget is passed into law it should be referred—this most revolutionary Budget—to the will of the people. We acknowledge the supremacy of the people, and we are perfectly ready to act on their dictum. But that is not at all what the Government are prepared to do. I should like to quote what the Lord Chancellor said the other day. He said—
" It is in my opinion impossible that any Liberal Government should ever again bear the heavy burden of office unless it is secured against a repetition of treatment such as our measures have had to undergo for the last four years."
What does he do? He puts himself above the people. He refuses to abide by the decision of the people when that decision is adverse. I think that is also a very Socialistic proposal. Then Lord Rosebery says he would like to see the House of Lords pass this Finance Bill, not because he had a good opinion of it, but because he had such an excessively bad opinion of it. The noble Earl said that if the Budget were allowed to become law and if the country had a sufficient experience of its intolerable inquisitions, its intolerable bureaucracy and the enormous loss of employment and capital it must involve, we should achieve a victory when next we went to the polls. I think the noble Earl's speech was a most admirable criticism of the Bill, but I cannot accept his conclusion. He foresees the hardships which this Budget would entail upon the populace, the great loss of employment which it would bring in its wake, and

1223
all the rest of the hardships and disasters which are to accompany it. And yet he says "Pass the Budget; let the people suffer; and then when they have suffered, when they have found out what tyranny and what an amount of pain and suffering and loss of employment this Budget has caused they will turn to the Unionist Party and say ' We will gladly have you back again.'" That is not, in my opinion, the right way to do the thing. Let us tell the people what the hardships are going to be. Let them know what the Budget is going to do for them. Then give them the opportunity of deciding and if they elect to have the Budget they cannot blame your Lordships' House. Lord Balfour of Burleigh made a most excellent speech and a most excellent criticism of the Budget, but his conclusion, again, is one which I think it is almost impossible to understand. He criticised the Budget. He showed what a bad and wicked Bill it is. He showed the difficulty of carrying out the details, the enormous expense it would involve before you could even understand the different clauses of the Bill; and yet he said that he could not vote for the Amendment and that he must go out into the woods. I confess that that is a conclusion I fail to understand. I can only say that all we Scottish Peers who have for many years watched the noble Lord's distinguished and able career can only view his action with surprise and great regret. I can only think that the idea that possessed him was that if this Budget were not passed it would be a death blow to what he valued still more—Free Trade. Your Lordships must remember that the welfare of millions of your countrymen, the very life of the country, is in its industry, and that its industry depends on its integrity and on its security. The security of the people is in the integrity of their rulers; it is that integrity and that security which can alone bring about national prosperity and it is for that integrity and security that your Lordships are standing.
LORD KILLANIN: My Lords, on the important matter before the House I should especially like to have an opportunity of expressing, however briefly, my view, because, while I agree with a great deal of the criticism—I might perhaps say all the criticisms—of the Budget offered on this side of the House, I am in the unfortunate position that I cannot see my way to voting for the Amendment of the noble Marquess the Leader of the Opposition. We have
1224
heard in the course of this debate a number of very interesting and able speeches, and from this side of the House we have heard a number of powerful criticisms of the Budget; and, as an Irishman, I wish to take the opportunity of endorsing the view of the Budget expressed by two noble Lords from Ireland, Lord Donoughmore and Lord Ashbourne, who pointed out how particularly unfair this Budget is, in its incidence of taxation, on Irish interests by picking out for heavy taxation such well-known commodities of Irish life as whisky, tobacco, and land.
But, though I have heard a great many speeches, and agree with many of these criticisms of the Budget, they have not for the most part assisted me in the difficulty which I feel in this matter, because the question that seems to me to be of primary importance in reference to how we treat it is the constitutional one. The noble Lord, Lord Newton, asked "What does that matter? What interest will the electorate take in the constitutional view?" That may be so; possibly the bulk of the electorate will not take any interest in it: heaven only knows what will influence them! But the constitutional aspect is very important for members of this House to take into careful consideration on this fateful occasion, and we ought not to put it aside in this easy, indifferent manner. Furthermore, a large number of electors, and those Conservative electors, do take an interest in the constitutional view of the question. My difficulty in the matter is that the Government come to this House and say, "This is the Finance Bill of the year, the annual Bill of Supplies and aids granted by the House of Commons; it has been passed, also, in that House by a majority of 230, and do you mean to say that the House of Lords is going to throw it out? We know that this House has the Tight to point out the unfairness of any of the taxes and to discuss and express disapproval of them, but we submit that it has no right to amend or reject such a Bill." As an abstract proposition—if this were an ordinary Budget—I should agree with the Government. But then a noble Lord on this side of the House says, "Do you mean to say you are going to vote for this particular measure just because it is called a Finance Bill?" to which, I reply, "Certainly not." That is the dilemma, the contradiction, the difficulty of the problem as it presents itself to me, and which I had hoped this House

1225
might have found some means of coming to closer quarters with, and so clearing up, if not solving.
May I attempt, then, to formulate my view? And, in the first place, may I say that, while I recognise that this House has the legal right to reject a Money Bill or a Finance Bill, I submit that in the case of an unwritten Constitution the mere letter of the law does not cover the whole ground or settle the question; and, from all I have heard or read on the subject, I am of opinion that it would be against the theory, and practice, and spirit of the Constitution and against all the principles and conventions which make and hold together our unwritten Constitution, if this House were to reject or amend the Budget, provided the particular measure, called a Finance Bill, is a genuine, annual Budget, and nothing more. I hold that, even if your Lordships considered certain financial proposals were "Socialistic" or "revolutionary," or were convinced that the finances of the nation could be better arranged, we must observe our constitutional limitations, and that, provided the Bill containing such proposals is a Finance Bill and nothing more than a Finance Bill, this House is bound to pass it, and that its assent to it with or without discussion is merely formal. But one does not get much further unless one considers what is a Finance Bill. The noble and learned Lord on the Woolsack said that at the beginning of each session, the Sovereign in the speech from the Throne asks the "Gentlemen of the House of Commons" to grant Supplies and aids with which to carry on the executive Government of the year, and he implied, and I submit, that the Finance Bill is the response of the House of Commons to the request of the Sovereign made at the beginning of each year for Supplies and aids for the carrying on of the Government for that year.
But this Finance Bill is much more, and includes under its cover important pieces of legislation. A couple of right rev. Prelates have supported this Bill on the express ground that it, is a great scheme of social reform. That has been the boast also of many members of the Government. That may be all very well, and in its time and place a good thing. I can quite understand the right rev. Prelates being earnest advocates of beneficial schemes of social reorganisation, but such measures and
1226
objects are, surely, legislation!and it is intolerable that such great social changes should be brought about, and the Second Chamber, which is intended to revise all legislation, be able to do nothing with reference to them. Let us take the valuation clauses. I submit that these are a most serious and flagrant case of "tacking." The noble Earl, Lord Beauchamp, has justified their inclusion in the Finance Bill as being a necessary accompaniment of the land taxes. But that does not settle the matter. I ask him, Is this House, or is it not, a Second Chamber for revising all legislation? And does he really maintain that such a Valuation Bill, introducing entirely new principles of valuation, is not legislation, or that it is right that it should become the law of the land, and yet this House never have been able to change a single, word in it or reject it, if it so thought right? My submission is—not that I am necessarily opposed to such proposals—that it is intolerable and absurd to think that such a piece of legislation might possibly become law, and this House have been absolutely debarred from considering it on its merits. Moreover, valuation Bills have always hitherto been regarded and treated as legislative proposals.
Then take the Land Taxes. Here, again, there is tacking. They are sufficient to constitute a Land Bill, introducing, as they do, great changes in the ownership of landed property. Take the Undeveloped Land Duty. It practically compels urban landowners to deal with their property in a certain way. That is the cause and object of the tax, and, although it may be a good object, is it to become the law of the land and this House have had nothing whatever to say to it and to have been wholly unable to change a single syllable in it? And if I turn to the Licensing Clauses, I find the same story. They contain the penal policy advocated by the noble and learned Lord on the Woolsack and by the Chancellor of the Exchequer. They have openly said that their object, in connection with the Licensing Clauses, was not merely to raise money but to carry out a certain policy with reference to the liquor trade of the country. The Chancellor of the Exchequer has boasted that, as a result of the taxation, he looked forward to "diminishing" returns from this source of revenue. His real aim is to injure or destroy a certain trade. That may be a good thing, it may,

1227
or may not, deserve approbation, but I object most strongly to any such legislation being included in a Budget Bill and to this House being told that it has, therefore, no right to interfere with it at all. I say that it is intolerable that such obvious pieces of legislation as I have referred to should be thus smuggled through Parliament, and this House told that it cannot touch them just because they can be used, or, if you like, are even necessary, for financial purposes afterwards. That is the view which I hold very strongly and which I have held all along; and the speeches I have heard have not caused me to change my mind.
Such is the difficulty of the situation as it strikes me. The real trouble and cause of complaint is "tacking"; and I thought it should have been met by frankly and openly dealing with it. It seemed to me a fitting occasion to repel a serious and growing invasion of our rights and privileges. It is admitted that tacking may not take place, but it is also said that we must not amend a Money Bill; but I could quote a number of authorities showing that, if there is a case of tacking to Money Bills, we have the right to amend on the ground of, and in so far as it is a case of, tacking. Members of the Government have boasted that they would tack to this Budget legislative measures which we had refused to pass by themselves; they have done so; and it seems to me that this House would have been better advised to have dealt with the matter from that standpoint. Those parts of the Finance Bill which were genuine financial proposals for the year would then have been passed by this House although it might not have thought well of them, and, on the other hand, the House would have been fully entitled to deal, as it thought fit, with those portions of the Bill which were tacking. If the rights and privileges of the House of Commons are invaded, the Speaker says so; he goes thoroughly into the matter, and the Commons confirm his rulings. The noble and learned Lord on the Woolsack, being a member of the Government, could not fill that rôle for this House, but I venture to say that had a Committee of this House been appointed, composed of members who carried weight and were experienced in the working of the Constitution—and from both sides of the House—it could have inquired into whether certain portions of this Bill
1228
were not illegitimately tacked into it and were an invasion of the rights and privileges of this House as a legislative Chamber. Liberal and Conservative members of the House could have served on such a Committee, since afterwards any Peer could have voted, on their legislative merits, for or against any of the proposals which had been found as tacked on. I venture to think that some such treatment of the difficulties of the situation would have been profitable, and might possibly have led to some understanding or settlement, and at the worst, it could only have ended in a Dissolution, but the Dissolution would have been brought about by the other House, and not by this House; and this House, while it would not have failed to assert and protect all its rights and privileges, entrusted to it for the public good, would not, either, have exceeded them.
That brings me to the reasons why the method proposed by the Amendment of the noble Marquess does not recommend itself to me. I cannot possibly vote for the Finance Bill in its present form, but neither can I support the Amendment of the noble Marquess because it seems to me to be a very extreme proposal—more so than the case demands—and because, as I have tried to show, I think it might have been dealt with otherwise. This House is going, without any attempt at discrimination, to refuse straight away all aids and supplies whatsoever to the Government, and thus bring the Executive to a deadlock. It arbitrarily orders a Dissolution and names the issue. We enact a Referendum off our own bat. These may be possible powers for us to exercise, and the Amendment has a plausible and democratic ring about it; but it seems to me to be very extreme action, and, whilst I am most anxious to protect the rights and privileges of this House, I think we are going unnecessarily far. Nor am I satisfied that it is the business of this House even to insist on the nation being consulted, except in accordance with the laws and customs of the Constitution. The late Lord Salisbury said that this House had not the power of changing the executive Government, but by this Amendment we are going to stop all Supplies and, necessarily, to turn out the Government by exercising a power and control which has hitherto rested solely and completely with the House of Commons. For these reasons I find it impossible to vote for the Amendment of the noble Marquess; and this is a

1229
matter of sincere regret to me, because I recognise the gravity of the occasion, and because during the eight years that I have been a member of this House I have always been able—certainly on every important occasion—to support the noble Marquess. I regret that I cannot do so now, all the more because I believe that I am as opposed as he is to much of the contents of the Bill, and because I am as opposed as possible to the procedure adopted by the Government in the introduction of this so-called Finance Bill to your Lordships' House.
LORD CLIFFORD OF CHUDLEIGH: My Lords, I wish to say that I am supporting this Amendment, among other things, for the strong view I have always taken that the power of this House in such a matter is a necessity of the Constitution. It is admitted on all sides that this House has a legal right to reject a Money Bill, and I have always looked upon this as embodying the principle that we have for that reason the right to reject any Bill that may come before your Lordships' House. I consider that this is one of the greatest attributes a Second Chamber can possess and it is one of the greatest bulwarks of the rights of the Crown. I have always regarded it as an evil of a singles Chamber that there is nothing between it and the people when it is at variance with them except the veto of the Crown. I look upon the veto of the Crown us a delicate and sacred thing, which ought not to be used except in cases of the gravest emergency. It is far better if the House of Commons is to be called to account by the country that it should be done through the instrumentality of a Second Chamber than by the interposition of a powerful and popular Sovereign.
Two things have always impressed me very much. There is the statue of the great Protector outside this House with his back to the Chamber he ruthlessly flaunted, and his face to the people to whom he appealed and in whose name he held sway for ten long years. The other is a point made by one of the Labour Members the other day. He said that a popular Sovereign was a greater danger to a democratic Government than a despot. I think this is sufficient to show that if this power is legal it is also constitutional in the sense that it is not obsolete and it is necessary. It is one we should preserve; but I can hardly see how it is to be preserved if it is to be whittled away by the indefinite wrapping up of
1230
almost any measure within the compass of a Finance Bill. The question before the House which has been stated on several occasions in the course of the debate is—Are we justified in using this power on this occasion? I think we are. This is not an ordinary Finance Bill. It is a Bill which contains many new provisions of taxation, and I say that we are justified in rejecting it. The noble and learned Lord on the Woolsack said the other night, for instance, that the valuation clauses were necessary to the taxation of land. Now, is it so? Is it not perfectly possible to take land on the present valuation if you want merely to raise taxes? Is not the whole gist of this Bill to substitute for an assessment based upon the annual value of the land an assessment based upon its capital value? This is a principle which has not hitherto been maintained in our system of taxation, and therefore we have the right to ask that the opinion and views of the nation may be taken upon this matter.
Then, again, we are told openly that the whole object of this Bill is a revolution, that the purport of the Budget is a Socialistic one. This Budget was purposely formed so as to lead to the nationalisation of land, so as to lead to the nationalisation of the liquor trade, so as to lead to the nationalisation of the railways, and so as to lead to the nationalisation of all sources of production. The whole object of the Bill is Socialistic. There are three forms of Socialism. They take the form that every kind of property is to become the property of the State, and everybody is to be compelled to work, willingly if they will and compulsorily if they will not, for the benefit of the State; that the State shall take all liability to see that the people are fed, clothed, housed and made as happy as possible. That is a beautiful idea, but it is impracticable, and I know of only three instances in which it has come to fruition—namely, the workhouse, the prison, and certain religious orders which have existed from time to time. The two first are not loved, and the third is impracticable except for enthusiasts and those prepared to banish all family ties. For these reasons I think it is absolutely necessary that we should exercise the power of this House in referring to the country a Bill which contains powers so novel and so far reaching, and whose acceptance must have the very gravest results upon the prosperity of this country.
Debate again adjourned till to-morrow.

ASSURANCE COMPANIES BILL. [H.L.]
Order of the Day for the consideration of the Commons Amendments read.
Moved, That the Amendments be now considered.—(Lord Hamilton of Dalzell.)
LORD MONTAGU OF BEAULIEU: These Amendments raise points of very great interest, and having regard to the lateness of the hour I beg to move that the debate be adjourned.
LORD HAMILTON OF DALZELL: I do not think any good reason has been advanced for that course. This Bill passed through the House of Commons last Thursday, and I took the earliest opportunity of putting it down. It was set down on the Notice Paper and circulated with the Votes on Friday morning, and I think ample notice has been given of the Amendments passed by the House of Commons.
1232
Further, I do not think, having regard to the state of the Benches of this House, that the Amendments in themselves excite any great degree of interest or of resentment. The Paper only contains two Amendments to the Commons Amendments, and they both stand in the name of the noble Lord, Lord Montagu of Beaulieu. I therefore ask the House to now take them.
On Question, resolved in the negative, and consideration of the Amendments adjourned to Wednesday next.

CUSTOMS AND INLAND REVENUE BILL.
Read 3a (according to order), and passed.
House adjourned at ten minutes before Twelve o'clock, till To-morrow, half-past Ten o'clock.