Sitting of 13 April 1899

Preamble
MR. SPEAKERtook the Chair at Three of the clock.
PRIVATE BILL BUSINESS.

  PROVISIONAL ORDER BILLS (NO STANDING ORDERS APPLICABLE).
  Mr. Speaker Mr. Speaker laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bill. referred on the First Reading thereof, no Standing Orders are applicable. viz.:—
  Local Government Provisional Orders (No. 1) Bill
  Ordered, That the Bill be read a second time to-morrow.

  PROVISIONAL ORDER BILLS [LORDS] (STANDING ORDERS APPLICABLE THERETO COMPLIED WITH).
  Mr. Speaker Mr. Speaker laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bill, originating in the Lords, and referred on the First Reading thereof, the Standing Orders which are applicable thereto have been complied with, viz.:—
  Education Department Provisional Order Confirmation (Swansea) Bill [H.L.]
  Ordered, That the Bill be read a second time to-morrow.

  BARRY RAILWAY BILL.
  Read the third time, and passed.
  DUBLIN IMPROVEMENT (BULL ALLEY AREA) BILL (QUEEN'S CONSENT SIGNIFIED).
  Read the third time, and passed.
  HORSFORTH URBAN DISTRICT COUNCIL (WATER) BILL
  Read the third time, and passed.
  NOTTINGHAM CORPORATION BILL.
  Read the third time, and passed.
  RHONDDA URBAN DISTRICT COUNCIL BILL.
  Read the third time, and passed.
  WETHERBY DISTRICT WATER BILL.
  Read the third time, and passed.
  BURLEY-IN-WHARFEDALE URBAN DISTRICT WATER BILL.
  As amended, considered; to be read the third time.
  PILOTAGE PROVISIONAL ORDER.
  Bill,—to confirm a Provisional Order made by the Board of Trade, under the Merchant Shipping Act, 1894, relating to the Llanelly and Burry Pilotage District, ordered to be brought in by Mr. Ritchie and Mr. Hanbury.
  PILOTAGE PROVISIONAL ORDER BILL.
  "To confirm a Provisional Order made by the Board of Trade, under the Merchant Shipping Act, 1894, relating to the Llanelly and Burry Pilotage District," presented accordingly, and read the first time; to be referred to the Examiners of Petitions for Private Bills, and to be printed. (Bill 157.)

  CATHCART'S DIVORCE BILL [H.L.]
  Reported, from the Select Committee on Divorce Bills, without Amendment.
  Report to lie upon the Table.
  Bill to be read the third time.
  Ordered, That the Minutes of Evidence and Proceedings in the House of Lords on the Second Reading of Cathcart's

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  Divorce Bill, together with the Documents deposited in the case, be returned to the House of Lords; and that the Clerk do carry the same.—(Mr. Attorney-General.)

  PRIVATE BILLS (GROUP G).
  Sir James Kitson reported from the Committee on Group G of Private Bills, that the parties opposing the Edinburgh Corporation Bill had stated that the evidence of Robert Cranston, of Dunard Grange Loan, Edinburgh, Managing Director of Cranston and Elliott, Limited, was essential to their case and it having been proved that his attendance could not be procured without the intervention of the House, he had been instructed to move that the said Robert Cranston do attend the said Committee To-morrow, at half-past Eleven of the clock.
  Ordered that Robert Cranston do attend the Committee on Group G of Private Bills To-morrow, at half-past Eleven of the clock.
  Sir James Kitson reported from the Committee on Group G of Private Bills, that the parties opposing the Edinburgh Corporation Bill had stated that the evidence of Robert Miller, 38, Lauder Road, Edinburgh, James H. Waterston, 37, Lutton Place, Edinburgh, J. Macfarlane Cameron, 26, George Street, Edinburgh, and James Steel, 2, Torphichen Street, Edinburgh, was essential to their case; and it having been proved that their attendance could not be procured without the intervention of the House, he had been instructed to move that the said Robert Miller, James H. Waterston, J. Macfarane Cameron, and James Steel do attend the said Committee To-morrow, at half-past Eleven of the clock.
  Ordered, That Robert Miller, James H. Waterston, J. Macfarlane Cameron, and James Steel do attend the Committee on Group G of Private Bills To-morrow, at half-past Eleven of the clock.

  SITTINGS OF THE HOUSE (EXEMPTION FROM THE STANDING ORDER).
  Ordered, That the proceedings of the Committee of Ways and Means, if the Committee be sitting at Twelve o'clock this night, be not interrupted under the Standing Order, Sittings of the House.—(Mr. Balfour.)
PETITIONS.
  BELFAST CORPORATION BILL.
  Petition for additional Provision; referred to the Examiners of Petitions for Private Bills.
  LONDON UNITED TRAMWAYS BILL.
  Petition for additional Provision; referred to the Examiners of Petitions for Private Bills.
  BOROUGH FUNDS ACT, 1872.
  Petition from Edmonton, for alteration of Law; to lie upon the Table.
  CONSTRUCTIVE MURDER LAW AMENDMENT BILL.
  Petition of the Personal Rights Association, in favour; to lie upon the Table.
  CROFTERS' HOLDINGS (SCOTLAND) ACT (1886) AMENDMENT BILL.
  Petition from Kilmarnock, in favour; to lie upon the Table.
  EDUCATION (SCHOOL ATTENDANCE) (SCOTLAND) BILL.
  Petition from Kilmarnock, in favour; to lie upon the Table.
  GROUND RENTS (TAXATION BY LOCAL AUTHORITIES).
  Petitions in favour,—from Blackburn; and, Dewsbury; to lie upon the Table.
  LIQUOR TRAFFIC LOCAL VETO (SCOTLAND) BILL.
  Petitions in favour,—From Aberdeen (four); Perth; Dingwall; Rutherglen; and, Strathaven; to lie upon the Table.
  PARLIAMENTARY FRANCHISE.
  Petitions for extension to women;—From Whitefield (eight); Besses o' th' Barn (six); and, Prestwich; to lie upon the Table.
  POOR LAW OFFICERS' SUPERANNUA- TION (SCOTLAND) BILL.
  Petition from Edinburgh, in favour; to lie upon the Table.
  PRIVATE BILL LEGISLATION (MUNICIPAL TRADING).
  Petition from Exeter, for inquiry by a Select Committee; to lie upon the Table.
  PRIVATE LEGISLATION PROCEDURE (SCOTLAND) BILL.
  Petitions in favour:—From Dundee;—Kilmarnock;—and, Edinburgh; to lie upon the Table.
  PUBLIC HEALTH ACTS AMENDMENT BILL.
  Petition from Stockport, in favour; to lie upon the Table.
  ROMAN CATHOLIC DISABILITIES REMOVAL BILL.
  Petition of the Scottish Women's Protestant Union, against; to lie upon the Table.
  SALE OF INTOXICATING LIQUORS ON SUNDAY BILL.
  Petition from Clevedon, against; to lie upon the Table.
  SALE OF INTOXICATING LIQUORS ON SUNDAY BILL.
  Petitions in favour;—From Manchester;—Mere;—Heaton ersey;—Sunderland;—and, Forest Gate; to lie upon the Table.
  SCHOOL BOARD CONFERENCES (SCOTLAND) BILL.
  Petition from Govan, in favour; to lie upon the Table.
  SCHOOL BOARD ELECTORATE (SCOTLAND) BILL.
  Petition from Kilmarnock, in favour; to lie upon the Table.
  SHOPS (EARLY CLOSING) BILL.
  Petition from Kilmarnock, in favour; to lie upon the Table.
  SMALL HOUSES (ACQUISITION OF OWNERSHIP) BILL.
  Petition from Kilmarnock, in favour: to lie upon the Table.
  TITHE RENT CHARGE.
  Petition of the Clergy of England and Wales, for alteration of Law; to lie upon the Table.
  VACCINATION ACT, 1398.
  Petition from Selkirk, for extension of Section 2 to Scotland; to lie upon the Table.
RETURNS, REPORTS, ETC.
  RAILWAY ACCIDENTS.
  Copy presented,—of Returns of Accidents and Casualties as reported to the Board of Trade by the several Railway Companies in the United Kingdom in the year ended 31st December 1898, together with Reports of the Inspecting Officers of the Railway Department to the Board of Trade upon certain Accidents which were inquired into (by Command); to lie upon the Table.
PAPER LAID UPON THE TABLE BY THE CLERK OF THE HOUSE.
  COUNTY COURTS ACT, 1888, AND SUPREME COURT OF JUDICATURE (OFFICERS) ACT, 1879.
  Copy of Order made by the Lord Chancellor, dated 11th January 1899, directing that the Registrar of the County Court of Northumberland shall not practise as a solicitor, and that section 20 of the Supreme Court of Judicature (Officers) Act, 1879, shall not apply to the office of Registrar of the said County Court.

  NATIONAL DEBT CHARGES.
  Copy ordered, "of Treasury Minute, dated the 11th April 1899, on the subject of the National Debt charges."—(Mr. Hanbury.)
  Copy presented accordingly; to lie upon the Table and to be printed. (No. 154.)

  FINANCIAL STATEMENT (1899–1900).
  Copy ordered, "of Statement of Revenue and Expenditure as laid before the House by Mr. Chancellor of the Exchequer when opening the Budget."—(Mr. Chancellor of the Exchequer.)
  Copy presented accordingly; to lie upon the Table and to be printed. (No. 155.)

  NORTH WEST LONDON RAILWAY BILL.
  Reported, with Amendments; Report to lie upon the Table, and to be printed.

  RAILWAY BILLS (GROUP 5).
  Mr. Jeffreys reported from the Committee on Group 5 of Railway Bills; That, for the convenience of parties, the Committee had adjourned till Monday next, at half past Twelve of the clock.
  Report to lie upon the Table.

NEW BILL.
  MERCHANT SEAMEN (RATING CERTIFICATES) BILL.
  "To amend the Merchant Shipping Act, 1894, in respect of Rating Certificates of competency and service," presented, and read the first time; to be read a second time upon Thursday next, and to be printed. (Bill 158.)
QUESTIONS.

  FIREPROOF CONSTRUCTION FOR GOVERNMENT BUILDINGS.
  SIR J. LENG (): I beg to ask the First Commissioner of Works whether it is proposed to make the new Government Buildings in Whitehall, Parliament Street, South Kensington, and the Patent Office as far as possible fireproof; and whether tests will be made as to which is the best system, or will it be left to the architects employed to decide what system of fireproofing shall be adopted?
  THE FIRST COMMISSIONER OF WORKS (Mr. AKERS DOUGLAS,): The answer to the first paragraph of the honourable Member's Question is in the affirmative. The architects, in conjunction with Sir John Taylor, will be instructed to consider what system or systems are best adapted to render the various buildings fireproof.

THE "SIMLA."
SIR J. LENG: I beg to ask the First Lord of the Admiralty whether he is aware that the chartered troopship "Simla" recently brought from India 1,022 men, 47 women, and 99 children; and whether consideration will be given to the serious risk incurred in the event of collision or shipwreck by crowding 1,168 persons, in addition to the crew, on board one vessel?
MR. PIRIE (): Before the right honourable Gentleman answers,

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may I ask what was the boat accommodation on the "Simla"?
THE FIRST LORD OF THE ADMIRALTY (Mr. G. J. GOSCHEN, St. George's,): It is not admitted that the "Simla" was overcrowded on her recent voyage from India. It is held that there is no more risk in the event of collision or shipwreck in the case of large ships than there is in the case of small ships. Indeed, experience shows that the risk is less. She carried the full complement of boats required by the regulations. I think that is the answer to the honourable Member for North Aberdeen.
MR. PIRIE: No; I am afraid not. I wish to know if the hired transport "Simla" conies under the same class of ship as the "Nubia"?
MR. SPEAKER: Order, order! The honourable Member must give notice.
MR. PIRIE: May I ask, then, how many invalids were on board the "Simla"?
MR. SPEAKER: It is obvious notice must be given of such a Question as that.

LOSS OF THE "STELLA."
MR. RICHARDS (): I beg to ask the President of the Board of Trade if there be any authority for the statement that he has decided to hold the inquiry into the shipwreck of the "Stella" on the Casquets at the port of Southampton; and, in view of the fact that such a decision would entail extra expense and difficulty on the relatives of the deceased and their representatives in attending at such a distance from London, whether he will follow the precedent of the inquiry held on the loss of the "Drummond Castle" off Ushant by directing the holding of the court at the Guildhall, Westminster, or in the Royal Courts of Justice?
THE PRESIDENT or THE BOARD OF TRADE (Mr. C. T. RITCHIE,): There is no authority for the statement to which my honourable Friend refers. The inquiry into the wreck of the
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"Stella" will be held at Westminster, and there has never been any intention to hold it elsewhere.
MR. STEADMAN (): Arising out of this Question, may I ask whether the right honourable Gentleman's attention has been called to the death of a lighterman whose boat was swamped by a, steamer?
MR. SPEAKER: Order, order! That has nothing to do with the Question on the Paper.

COMMUNICATION WITH THE CASQUETS.
MR. RICHARDS: I beg to ask the President of the Board of Trade if the Casquets are in telegraphic or telephonic communication with the Channel Islands; and, if not, will he take an early opportunity of securing such a connection?
THE PRESIDENT OF THE BOARD OF TRADE: The Casquets Lighthouse is not electrically connected with the Channel Islands. As my honourable Friend is aware, the Royal Commission on Electrical Communication with Lighthouses and Light Vessels, which sat for some} ears, considered carefully the circumstances of all the light stations round the coasts of the United Kingdom They made no recommendation for electrical communication to be carried out in the case of the Casquets.

INDIAN FAMINE RELIEF OFFICIALS.
SIR SEYMOUR KING (): I beg to ask the Secretary of State for India with reference to the Resolution, No. 5047—P, dated Simla, 15th November 1897, by which the Government of India announced that the Secretary of State had sanctioned special concessions to officers employed on duties connected with famine relief or the plague, among which were included the following: to officers so employed for a period of not less than 10 months, cither two months' extra privilege leave, or full pay instead of half-pay for the first four months of furlough, or other leave as above,

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whether he is aware that Mr. I. G. H. Glass, CLE., was employed in famine work in Bengal from the commencement of the operations, was a member of the Plague Commission from its institution until he left the Service in March last, and that he applied for leave, to which the Bengal Government admitted him to be entitled, as well as to the concession under the above rules, but was refused on the ground that he was required to complete his Report on famine operations in Bengal, and to give evidence before the Famine Commission; whether he is aware that, before this work was completed, he had come under the 55 years' rule, and was compulsorily retired, thus losing the benefit of either alternatives prescribed by the above rule; whether, although the Government of Bengal, in view of his valuable services, recommended that Mr. Glass should be given two months' pay as compensation for the loss of the above privileges which was caused by the action of the Government in retaining him, he has nevertheless been refused any compensation both by the Government of India and the Secretary of State; and whether, under the circumstances, his claim to some compensation will be reconsidered?
THE SECRETARY OF STATE FOR INDIA (Lord GEORGE HAMILTON,): The facts are correctly stated in my honourable Friend's Question. When the Government of India decided to grant certain concessions to those officers who had been employed in famine work, they expressly laid down that the concession should not take the form of a cash bonus, because it was leave and rest that the officers required after their arduous and trying duties, to fit them for further duty. For this reason, while highly appreciating the value of Mr. Glass's services, they declined to make him a money grant after his retirement in lieu of leave. Mr. Glass protested against this decision in a Memorial, which was very fully considered by me in Council, but while fully concurring in the view expressed by all the Indian authorities as to the merits of Mr. Glass's services, I came to the conclusion that I should not in the circumstances be justified in overruling the decision of the Government of India.

BREWERS' CASKS.
MR. BROADHURST (): I beg to ask the President of the Board of Trade whether his attention has been directed to the several cases in which brewers have been convicted and fined under the Weights and Measures Act, 1878, for using for trade casks of far less capacity than their usual reputed contents, at Swindon, December 1896; Newcastle, January 1897; Haslingden, May 1898; and Daventry, December 1898, which casks were declared by the respective courts to be measures under the Act of 1878; and whether he will cause the attention of local authorities to be given to the more regular testing of such vessels?
THE PRESIDENT OF THE BOARD OF TRADE: The attention of the Board of Trade has been called to this Question. The Board believe that the local authorities are already fully alive to the effect of the legal decisions, which would appear to be that there is not a breach of the law unless the unstamped barrel is, in fact, used as a measure.

LIGHT DUTIES FOR AGED POSTMEN.
MR. STEADMAN: I beg to ask the Secretary to the Treasury, as representing the Postmaster-General, whether it is customary for the Department, as stated in the evidence given before Lord Tweedmouth's Committee by Mr. Lewin Hill (Question 11,679), to provide easier duties for officers who are, through advancing years or other natural causes, incapable of performing their full ordinary duties?
THE VICE-PRESIDENT OF THE COMMITTEE OF COUNCIL ON EDUCATION (Sir J. GORST,): My right honourable Friend has asked me to reply to the Question in his absence. There is no such custom generally, but in the case of town postmen, to whom the evidence referred, the Postmaster-General is glad, if opportunity offers, to allow an easier walk to a postman who has been long in the service than to a junior man.

POSTMAN STODDART, OF GLOUCESTER.
MR. STEADMAN: I beg to ask the Secretary to the Treasury, as representing the Postmaster-General, if he is aware that S. A. Stoddart, postman, of Gloucester, who in his first year of established service (in 1895) had 20 late attendances recorded against him, not only had his increment arrested for one year, but has also had withheld from him the stripe to which he claims to have become entitled in 1898, and has been informed that his claim will not again be reported upon until 1901, so that (as his second stripe will only be granted five years after the first) his punishment for late attendances in 1895, which have not since been repeated, represents not only the loss of increment for one year but a permanent fine of 1s. weekly during the time he remains in the service; and will he have inquiry made into the case; and, if the facts be as stated, consider the desirability of lessening this punishment?
SIR J. GORST (for Mr. HANBURY): It is the case that Stoddart's increment due on the 28th February 1896 was arrested on account of his irregular attendance during the year up to that date. A good conduct stripe can only be granted at the end of a period of five years' unblemished service; and, in view of his late attendance in the year to February 1896, this condition, it is evident, cannot be complied with in Stoddart's case until 1901.

LIGHTSHIPS AND WIRELESS TELEGRAPHY.
SIR R. PENROSE-FITZGERALD (): I beg to ask the President of the Board of Trade whether, in view of the fact of breakages of the telephonic cables between lightships and the shore having taken place from time to time, he will consider the desirability of adopting the wireless system for one or more of the light vessels recommended by the Royal Commission on Electrical Communication and not connected by cable at the present time?
THE PRESIDENT OF THE BOARD OF TRADE: The possibility of adopting the wireless system of telegraphy for light vessels is a very important question, which is receiving careful consideration, but upon which I am not yet in a position to express an opinion.

LEAD POISONING.
SIR C. DILKE (): I beg to ask the Secretary of State for the Home Department whether he is aware that in the case of the death of W. R. Mullock, of Hanley, from chronic lead poisoning, in which a coroner's jury was summoned, the coroner has since stated that he stopped the inquest after consultation with the Factory Inspector; whether such was the case; and whether the allegation of the widow that no fan was in use in the factory where Mullock worked is correct?
THE UNDER SECRETARY OF STATE FOR THE HOME DEPARTMENT (Mr. J. COLLINGS,): The Factory Inspector himself called the attention of the Secretary of State to the statement mentioned by the right honourable Baronet, adding that he was not consulted on the question either of holding or of abandoning the inquest; and the Secretary of State is informed by the coroner that he did not consider it necessary to hold the inquest in view of the fact that the Home Office had already made inquiries into the subject of lead poisoning generally with a view to remedying the present state of affairs as far as possible. The Secretary of State cannot consider that this general inquiry affords sufficient reason for dispensing with the inquiry into the facts of each fatal case for which a coroner's inquest offers an opportunity. He has already expressed in this House and elsewhere his opinion that in lead-poisoning cases inquests should be held, and he will again intimate this to the coroner in question. As to the facts of the case, it appears that the deceased man was engaged in September last to work in a place where a fan was in operation, but that after Christmas he was, at his own request, transferred to another pottery belonging to the same employer where

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there was at that time no fan. Arrangements were at once made, in compliance with the new rules which came into force this year, to provide a, fan, but unfortunately some delay occurred in procuring and fixing it.
MR. COGHILL: Was not Mullock warned by a medical man not to work in the factory?
MR. CODLINGS: I had better have notice of that.

POLICE ACTION AT THE CASTLEBAR MEETING.
The following Question was on the Paper:—
DR. ROBERT AMBROSE (): To ask the Chief Secretary to the Lord Lieutenant of Ireland whether in a police charge at a meeting held in Castle-bar on 2nd April, the 18 police engaged were armed with rifles and the rest with batons; whether he is aware that the people were simply taking part in an orderly meeting got up for the purpose of carrying out the enactments of the Local Government (Ireland) Act; whether he is aware that a poor boy had his head and ear cut open by a. blow of a baton, and is now in hospital, and whether he is entitled to any compensation for such injury, and, if so, from whom; by whose orders were the police ordered to draw their batons and rifles and charge the crowd; and was the person so ordering within his right in doing so: and, if not, will his conduct be brought before the proper authorities?
When the question was called, DR. AMBROSE said: The question has been altered so as to make it ungrammatical, and one paragraph has been omitted altogether. I shall not therefore put it, but will ask it to-morrow in its original form.

GLYCERINATED CALF LYMPH.
SIR BARRINGTON SIMEON (): I beg to ask the President of the Local Government Board whether he will give an order that glycerinated calf lymph should be kept in a sufficient
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quantity at the Local Government Board; and whether he will order that such lymph should be supplied to certified medical men on application, so that in future medical officers of health should not have to send to Switzerland for lymph as they occasionally have to do at present?
THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. H. CHAPLIN,): All public vaccinators are at present supplied with glycerinated calf lymph, and a sufficient quantity of the lymph is kept at the Local Government Board for that purpose. But I am not in a position at present to undertake to extend the distribution of that lymph to an additional 16,000 or 17,000 private practitioners in England and Wales.
SIR. BARRINGTON SIMEON: Will it be necessary, then, in the future to send to Switzerland for the lymph?
THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD: Certainly not in the case of the public vaccinators, and I should say private practitioners will be able to get it in England.

RAILWAY COUPLINGS.
MR. CHANNING (): I beg to ask the President of the Board of Trade whether, having regard to the fact that the House of Commons, on, 19th May 1886, by reading the Railway Regulation Bill of that year a second time, sanctioned the principle of giving powers to the Board of Trade to order couplings to be affixed to goods wagons and mineral trucks which should make it unnecessary for men to go between them for the purpose of coupling and uncoupling, he will ask the House at an early date, to affirm the same principle by reading the Regulation of Railways Hill of this year a second time, and refer the Bill to a Departmental Committee with a view to legislation next Session?
THE PRESIDENT OF THE BOARD OF TRADE: I hardly think we should be justified in asking the House to enter upon what I fear would be a somewhat prolonged discussion on the Bill to which

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the honourable Gentleman refers merely for the purpose of enabling the House to again sanction a principle which the honourable Gentleman says has already been approved by the House of Commons, and without the intention of proceeding further with the Bill in the House. The inquiry which the honourable Gentleman suggests, although I express no opinion as to the tribunal, may be desirable, but I do not think it would be expedited by the course he recommends.
MR. D. A. THOMAS (): Does the right honourable Gentleman intend to proceed with the Bill at all?
THE PRESIDENT OF THE BOARD OF TRADE: I answered a Question on the same subject by the honourable Member the other day, and I have nothing to add to that answer.

TRADE TARIFFS IN MADAGASCAR.
MR. D. A. THOMAS: I beg to ask the Under Secretary of State for Foreign Affairs if he can state the position of negotiations with France in regard to the hostile tariffs imposed upon British merchandise imported into Madagascar; and whether any reply has been received to recent representations on the part of this country; and whether his attention has been drawn to a statement made last month in the Chamber of Deputies by M. Etienne, who occupied the position of Under Secretary for the Colonies from 1888 to 1800, to the effect that the undertaking in the Treaty of 1890, to maintain and respect the rights and immunities the English enjoyed in the island at the time, had only a local or residential application, and was not intended to refer to goods imported from England; and to what extent this statement is somewhat imperfect?
THE UNDER SECRETARY OF STATE FOR FOREIGN AFFAIRS (Mr. ST. JOHN BRODRICK,): No reply has been received to recent representations on this subject. Attention has not been specially called to the statement by Monsieur Etienne alluded to; but the views of Her Majesty's Govern-
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ment upon the point in question will be found fully expressed in the Dispatches which have already been laid before Parliament, Africa No. 8, 1897, and France, No. 1, 1899, to the last of which no reply has been received.

HYDERABAD DEPUTY COMMISSIONER.
MR. D. A. THOMAS: I beg to ask the Secretary of State for India if there is any truth in the report that it is intended to appoint Mr. Frederick William Francis, at present Director of Land Records and Agriculture, to be a Deputy Commissioner in the Hyderabad assigned districts; whether, in that position, he will have extensive criminal, civil, and revenue powers as District Magistrate, District Judge, and Chief Administrative Officer; what legal training and judicial experience for such office he has had; and whether it is proposed that Mr. F. W. Francis should supersede officers who have been regularly trained and are fully qualified for promotion, and who, according to the official reports, have creditably performed their duties as Deputy Commissioners of Districts over considerable periods, and during the famine of 1897, under exceptionally trying circumstances?
THE SECRETARY OF STATE FOR INDIA: I have received no information on this subject. The appointment is one which it is within the power of the Government of India to make, without reference to the Secretary of State; and it is not the practice of the Secretary of State in such cases to interfere with the discretion of the Government of India, I have no reason to suppose that the Government of India, in selecting an officer for this vacancy, will not have fully and impartially considered the claims of the several officers qualified for promotion before coming to a decision.

THE "STELLA."
MR. HOGAN (): I beg to ask the President of the Board of Trade whether he has reason to believe that racing between rival passenger steamers running to and from the Channel Islands

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is of common occurrence; whether he has observed a statement of a lady passenger rescued from the wreck of the "Stella," that the late captain of that steamer said, in conversation, while running through a dense fog, that he would reach port if he had to break his neck to do it; and whether the Board of Trade possesses any powers that could be exercised in the direction of restraining captains of passenger steamers from habitually subordinating safety to speed?
THE PRESIDENT OF THE BOARD OF TRADE: I do not think I ought to be called upon to express any opinion on matters which will, no doubt, be examined into during the approaching inquiry, and I strongly deprecate charges implied or otherwise being made against any of those responsible for the navigation of the "Stella" prior to the public inquiry. The subordination of safety to speed, if proved to exist, would be an offence coming within the provisions of the Merchant Shipping Act. May I express, on behalf of the Government, and, I feel sure, also of the House, our deep sympathy with those who have sustained such grievous bereavement by this lamentable disaster, and our profound admiration for the discipline and calmness which prevailed on board the ill-fated vessel, and for the heroic conduct of those who willingly sacrificed their own lives in order to secure the safety of others.

TONGA.
MR. HOGAN: I beg to ask the Under Secretary of State for Foreign Affairs whether Her Majesty's Government has guaranteed the independence of the Native Kingdom of Tonga, in the Pacific; and, if so, upon what terms or conditions?
MR. BRODRICK: No, Sir. No such guarantee has been given.

OUTRAGES ON BLACKS IN WESTERN AUSTRALIA.
MR. HOGAN: I beg to ask the Secretary of State for the Colonies whether any communications have passed between Her Majesty's Government and
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the Government of Western Australia in reference to recent outrages upon blacks in that colony; and, if so, with what results?
THE SECRETARY OF STATE FOR THUS COLONIES (Mr. J. CHAMBERLAIN,): The only communications which have passed between Her Majesty's Government and the Government of Western Australia on the subject to which this Question refers, are a telegram which I received on the 1st April from the Governor of Western Australia, and which has been published in the newspapers, informing me that the two magistrates concerned in the case of cruelty to natives in that colony, which has been the subject of remarks in the English Press, have been struck off the Commission of the Peace, and a dispatch which I have addressed to the Governor expressing my satisfaction in receiving that information.

TUBERCULOUS UDDER.
MR. KEARLEY (): I beg to ask the President of the Local Government Board, under what Act of Parliament the Local Government Board has power to make tuberculous udder a disease in a dairies, cowsheds, and milkshops Order?
THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD: The amendment of the Dairies, Cowsheds, and Milk-shops Order of 1885, which makes tuberculous udder a disease for certain purposes of that Order, was made under the 49 and 50 Vict. cap. 32, by which certain powers were transferred from the Privy Council to the Local Government Board.
LAKE RUDOLPH MR. MCKENNA (): I beg to ask the Under Secretary of State for Foreign Affairs whether, having regard to the statement made by Major Macdonald, in his dispatch of 18th July 1898, that he proposed covering by treaty, if possible, the small extent of territory between Lake Rudolph and

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the Abyssinian frontier, and to the experience of Captain Austin that bodies of Abyssinian horsemen have devastated the whole country down to the northern shores of Lake Rudolph, the British Government have abandoned the portions of the British sphere lying north and north-east of Lake Rudolph; and whether any negotiations are now being entered into with Abyssinia for the better delimitation of frontier?
MR. BRODRICK: Her Majesty's Government have not abandoned any portion of the British sphere. No negotiations have yet been commenced with Abyssinia for the delimitation of this portion of the frontier.

INDIAN CIVIL SERVICE.
SIR SEYMOUR KING: I beg to ask the Secretary of State for India whether he would say how many claims for exchange compensation allowance for Indian Civil Servants remain to be dealt with; and whether a decision on those claims could be hastened?
THE SECRETARY OF STATE FOR INDIA: I have no means of ascertaining the number of claims that remain to be dealt with, but it is, as I have already stated, a comparatively small one. Every effort will be made to accelerate a decision on the points still under consideration, which have been found to be extremely difficult of solution.

WINFARTHING CHURCHYARD.
MR. SOAMES (): I beg to ask the honourable Member for Thirsk, as representing the Charity Commissioners, whether he is aware that the cost of enlarging the churchyard of Win-farthing has been defrayed out of the funds of the Winfarthing Town Estate Charity; and whether the Charity Commissioners have sanctioned such expenditure of the funds of that charity?
THE PARLIAMENTARY CHARITY COMMISSIONER (Mr. J. GRANT LAW-SON,): The Com-
982
missioners received on the 9th March last a general complaint of misappropriation from the parish meeting, and wrote on the 25th of that month for details, which have not yet been received.

IRISH COUNTY VOTERS' REGISTERS.
CAPTAIN DONELAN (): I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland whether he is aware that many complaints have been made relative to the defective condition of the voters' registers in connection with the recent Local Government elections in Ireland; and whether, in view of the fact that numbers of duly qualified electors were consequently disfranchised, steps will be taken to secure more correct registers in future.
THE CHIEF SECRETARY TO THE LORD LIEUTENANT OF IRELAND (Mr. GERALD W. BALFOUR,): I am aware that some complaints have been made to the effect stated in the first paragraph. The matter, however, is not one in which the Government have any power to interfere, but I should be rather inclined to hope that the majority of the mistakes that have been made are due to circumstances which will not recur in future.
CAPTAIN DONELAN: Who is responsible for these inaccuracies?
MR. GERALD BALFOUR: Different persons in different places. It must be remembered that the circumstances were somewhat novel.

COUNTY CESS DEDUCTIONS.
CAPTAIN DONELAN: I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland, with reference! to the Local Government (Ireland) Act, whether, in cases where half the county cess has hitherto been allowed by the landlord, the deduction of that portion from the rent will date from the last gale day; and whether any instructions will be issued to tenants upon the subject?
MR. GERALD BALFOUR: When an occupier is entitled to deduct from the rent one-half of the county cess, the Local Government Act provides that until the tenancy is determined or a new statutory term in the tenancy begins, the rent shall be reduced by one-half of the appropriate standard amount. This reduction will have effect as from the gale day next after the appointed day. It does not appear to me that any instructions to tenants on the subject are necessary, further than the certificate as to poor rate and county cess issued in the "Dublin Gazette" of the 11th instant.

PERSIAN TRADE.
MR. DRAGE (): I beg to ask the Under Secretary of State for Foreign Affairs if he will give the latest figures in the possession of the Foreign Office showing the proportion of the trade of Persia which is in the hands of British subjects viâ Trebizond, viâ the Persian Gulf, and viâ Seistan; and whether British trade with North and South Persia respectively has increased or decreased in recent years?
MR.BRODRICK: The Annual Consular Report on the trade of Trebizond will be issued in the course of a few days. The latest information respecting the Persian Gulf trade is contained in Report No. 2186 from Her Majesty's Consul-General at Bushire, published in September last. Report No. 2202, from Her Majesty's Consul-General at Meshed, published last January, contains information as to trade in that locality, but we have no exact details as to the trade of Seistan in particular. I shall be happy to furnish the honourable Member with a short statement showing the movement of Persian trade during the last three years.

CHIEF ORDNANCE OFFICE, PIMLICO.
CAPTAIN NORTON (): I beg to ask the Under Secretary of State for War whether the office of the Chief Ordnance Officer, Pimlico, is to be organised and manned in the same
984
way as that at Woolwich and other stations; if so, can he state approximately on or by what date the present Civil Service clerical staff will be transferred to the War Office establishment, and whether the transfer will be made en bloc; and what steps it is proposed to take to ensure that these officials shall receive fair compensation for the abolition of the staff and other posts, the succession to which has been held out to them for many years past?
THE FINANCIAL SECRETARY TO THE WAR OFFICE (Mr. J. POWELL WILLIAMS,): These clerks are either second division or staff clerks serving under the Order in Council. In the reorganisation of the Army Clothing Department, their status will not be changed. The final distribution of the clerks will be determined very shortly, and though no claim for compensation can be admitted on account of possible loss of prospects due to the reorganisation, as much consideration as possible will be given to the wishes and interests of the gentlemen affected.

LONDON SCHOOL BOARD PUPILS' PRIZES.
MR. BARTLEY (): I beg-to ask the Vice-President of the Committee of Council on Education whether his attention has been drawn to the money prizes offered to all students who pass in science and art which are advertised in the "School Board for London Gazette"; whether it is a, fact that these money prizes are offered by the School Board for London; and, if so, out of what funds they are paid, and under what Statute this expenditure is incurred; and whether the prizes are limited to pupils in Board Schools?
SIR J. GORST: My attention was called to the matter by the honourable Member's Question. The London School Board inform me that the prizes—which are not money prizes—have been given since 1894. They are paid out of the School Fund, and the legality of such payment is about to be inquired into by the Local Government Board auditor. They are limited to scholars in Board schools.

CAPTAIN ABNEY AND VACCINATION CERTIFICATES.
MR. LOGAN (). I beg to ask the Secretary of State for the Home Department if his attention has been directed to the conduct of Captain Abney, a Justice of the Peace for Leicestershire, at the Ashby-de-la-Zouch Petty Sessions on Saturday last, when that gentleman took his seat upon the bench after other justices had granted applications for certificates under the Vaccination Act, 1898, and re-opened the proceedings for the purpose of interrogating the applicants in a manner not warranted by the Act; and if he proposes to take any action in the matter?
MR. COLLINGS: I am informed that when Captain Abney put the questions referred to he was not aware —having just entered the court—that the certificates had already been granted. If he had known this he would not have put them. There appears to be no reason for the Secretary of State to take any action in the matter.

PEKIN-HANKAU RAILWAY.
SIR E. ASHMEAD-BARTLETT (): I beg to ask the Under Secretary of State for Foreign Affairs whether it is a fact that the Chinese Government have concluded a loan for £4,500,000 with several French banks for the construction of the Pekin-Han-kau Railway, which will traverse the heart of the Yang-Tsze-Kiang Valley and connect the Pekin-Nin-chwang and Manchurian Railways on the north and the Canton-Han-kau Railway on the south; whether the lenders are to have complete control over the construction, material, working, and personnel of the Pekin-Han-kau line, and all questions of dispute are to be settled by the arbitration of the French Minister; whether the lenders have power to seize the line in case of default on the part of the Chinese Government; and what interest the Russo-Chinese Bank have in this undertaking?
MR. BRODRICK: If the honourable Member will refer to the Blue Book, Nos. 271 (page 185), 278
986
(page 189), 347 (page 260), and 383 (page 285) he will find full information with regard to the loan for the construction of the Pekin-Han-kau Railway, which was given to a Belgian syndicate. The contract gives the syndicate a mortgage on the line in case of default. Her Majesty's Government have no reason to think that the Russo-Chinese Bank has any share or interest in the undertaking except as agents and bankers for the Belgian syndicate.

CENTRAL TELEGRAPH OFFICE, LONDON.
MR. BAYLEY (): I beg to ask the Secretary to the Treasury, as representing the Postmaster-General, will he explain why, in the Parliamentary Return entitled Post Office (Sorters and Telegraphists Pay), no mention is made of the class of operators which exists in the Central Telegraph Office, London, on a salary rising by £8 yearly from £160 to £180; and whether steps will be taken to amend the same?
SIR J. GORST (for Mr. HANBURY): There is no such class of operators as that named in the question. The honourable Member perhaps refers to the "Overseers and Senior Telegraphists" on the scale of £160 by £8 to £190. The Parliamentary Return was intended to include only the rank and file, excluding those to whom supervising or superior duties are assigned.

SALISBURY PLAIN.
MR. BAYLEY: I beg to ask the Under Secretary of State for War when the Return, ordered by the House on 21st February, of further information on the purchase of land on Salisbury Plain by the Government, will be in the hands of Members?
MR. POWELL WILLIAMS: The Return was laid on the Table yesterday.

SHIPPING QUESTIONS.
MR. HAVELOCK WILSON (): I beg to ask the President of the Board of Trade whether his attention has been called to the death of a seaman named John Mallom, who was killed on board the steamship "Kings-cote," at Tilbury Docks, on the 23rd of January last; whether he is aware that Mallom's death was caused through his leg becoming entangled in the coils of wire rope which was being used for the purpose of checking the vessel as she entered the dock; whether he is aware that the jury inquiring into the cause of the fatality added a rider to their verdict that, had there been a man to assist deceased in taking away the slack of the wire rope, the deceased would not have met his death; whether he can state if any compensation, and what amount, was paid by the owners to Mallom's widow; and whether the Board of Trade intend to cause any further inquiry to be made into the circumstances attending this man's death?
MR.HAVELOCK WILSON: I beg, also, to ask the President of the Board of Trade whether his attention has been called to the death of a seaman named George Withers at Barry Docks on Friday the 7th instant on board the steamship "Dalegarth"; whether he is aware that Withers lost his life in consequence of both of his legs being cut off by being entangled in one of the coils of the wire rope used in checking the vessel out of dock; whether it is the intention of the Board of Trade to inquire into the circumstances attending this man's death; and whether he is prepared to make regulations for the greater safety of the men using these wire ropes?
THE PRESIDENT OF THE BOARD OF TRADE: No, Sir, my attention has not been called (except by this and the following Question) to the cases to which the honourable Member refers, but inquiry shall be made.

THE TEANSVAAL.
SIR E. ASHMEAD-BARTLETT: I beg to ask the Secretary of State for the Colonies whether the telegraph account of the petition, in "The Times" of 27th March, addressed to the Queen by the Transvaal Uitlanders, accurately
988
represents the contents of the petition; what steps Her Majesty's Government propose to take in consequence; and whether he can give the House any information as to the long promised reforms in the Transvaal? I beg also to ask the right honourable Gentleman a Question, of which I have given private notice, i.e., whether it is the fact that the Boer Government have just prohibited an outdoor meeting of Uitlanders at Johannesburg, called to consider the question of reform?
THE SECRETARY OF STATE FOR THE COLONIES: The honourable Member asks me a Question about a telegram appearing this morning in the newspapers. I have no official information on the subject. With regard to the Question on the Paper, I have not yet received the petition, and am, therefore, unable to say whether the telegraphic report in "The Times" accurately represent its contents. I am not in a position to give any information beyond what has appeared in the Press.

DETECTIVE-INSPECTOR STEVENS.
CAPTAIN NORTON: I beg to ask the Secretary of State for the Home Department whether his attention has been called to the case of Detective-Inspector Stevens, late of the Criminal Investigation Department, Thames Division, Metropolitan Police, who, after 30 years' service in the Royal Navy and Police, has been invalided on account of injuries received from time to time in the execution of his duty; and, seeing that these injuries have caused almost complete blindness, whether any steps are be taken to increase this officer's pension, which amounts to a little over l1s. a week; and whether, seeing the desirability of attracting to the Army and Navy a good class of recruit, he will consider the advisability of allowing ex-soldiers and sailors who serve in the police force to reckon towards pension their previous Army and Navy service, more especially as many of them are ineligible for promotion or special duty through being over age?
MR. COLLINGS: It is not the case that the officer referred to was invalided on account of injuries received in the

989
execution of his duty. There is no evidence that the defective eyesight which rendered his retirement necessary was due to an assault committed by a prisoner, to which the officer attributed it. Legislation would be necessary to give effect to the suggestion made in the second paragraph. The Secretary of State sees no grounds for such legislation.

NEW IRISH RAILWAYS.
MR. YOUNG (): I beg to ask the Secretary to the Treasury whether he can state what progress has been made towards the construction of the proposed railways from Letterkenny to Burton Port and from Buncrana to Cardonagh under the Railways (Ireland) Act, 1896.
SIR J. GORST (for Mr. HANBURY): Satisfactory tenders for the construction of these railways have been received, and it is hoped that the work will shortly be put in hand.
SAMOA MR. R. G. WEBSTER (): I beg to ask the Under Secretary of State for Foreign Affairs when any further Papers will be issued regarding affairs in Samoa?
MR. BRODRICK: Negotiations are proceeding between the three Governments concerned, and it will not be possible to lay Papers respecting Samoa at present.

ZYMOTIC DISEASES AT ALDERSHOT.
MAJOR RASCH (): I beg to ask the Financial Secretary to the War Office whether the latest Report of the Army Medical Department with reference to Aldershot shows the number of admissions for zymotic diseases, chiefly scarlet fever, to have been considerable; and whether the War Office have now-decided that the milk supply to this camp is in future to be supplied from the sewage farm?
MR. J. POWELL WILLIAMS: The report for 1897 does show that the number of cases of zymotic diseases was considerable at Aldershot. The Report for 1898, however, shows diminution in cases of scarlet fever, diphtheria, and enteric fever. The General Officer commanding does not recommend any change in the arrangement under which milk is supplied from the sewage farm, but inquiry will be made as to the possibility of a connection between zymotic disease and the supply of milk from this source.
MAJOR RASCH: Is the milk still supplied from the sewage farm?
MR. J. POWELL WILLIAMS: Yes.

QUEEN'S BOUNTY FUND.
MR. WOODS (): I beg to ask the First Lord of the Treassury whether his attention has been called to the impecunious position of Miss Potter (daughter of the late Mr. George Potter), who seeks a pension from the Queen's Bounty Fund, as an act of sympathy in memory of her deceased father for his past services to the cause of education and social progress; whether he is aware that about five years ago a similar ease was favourably entertained on behalf of the daughter of Mr. Lloyd Jones; whether he has seen a. letter from Lord Salisbury suggesting a favourable consideration to the application of Miss Potter's friends; and whether he will favourably entertain the application?
THE FIRST LORD OF THE TREASURY (Mr. A. J. BALFOUR,): I do not concur with the statement' of facts suggested in the honourable Gentleman's Question; but I do not propose to contradict them in detail, because I do not think the giving of these pensions should be made a matter of argument in this House, whether by way of Question or Answer or otherwise.

QUARTER SESSIONS JURORS.
MR. H. D. GREENE (): I beg to ask the First Lord of the Treasury whether the Act for the relief of jurors from unnecessary attendance at

991
Courts of Quarter Sessions in. Ireland (1897) has been found to work successfully; whether Her Majesty's Government would facilitate the extension of a similar Measure to England whereby all persons liable to serve as jurors at Quarter Sessions may by notice be relieved from attending the court when it has been ascertained, as in Ireland, before the day for which they are summoned that, owing to the state of business, their services as jurors will not be required; whether Her Majesty's Government is aware that expense and inconvenience are incurred frequently by grand jurors and petty jurors in unnecessary attendances; and whether any remedy can be suggested?
THE FIRST LORD OF THE TREASURY: My right honourable and learned Friend the Attorney-General for Ireland tells me that the law to which my honourable and learned Friend refers has worked well in Ireland. The Home Office authorities tell me that they think it is worth considering whether something analogous should not be done in England, although the cases are not exactly parallel. But I cannot make any pledge with regard to legislation in the present Session.

BUSINESS ARRANGEMENTS.
MR. R. G. WEBSTER: I beg to ask the First Lord of the Treasury when the London Government Bill will be further proceeded with?
CAPTAIN SINCLAIR (): I beg, at the same time, to ask the First Lord of the Treasury what business he proposes to take on Monday next?
THE FIRST LORD OF THE TREASURY: On Monday the first business will be the Small Houses Bill of my right honourable Friend the Colonial Secretary. To-morrow we shall begin with Navy Estimates, Vote 10, and we shall then proceed with other Navy Votes. If we are fortunate enough to reach the Army Estimates, we shall take Vote 10, as it is important, for reasons obvious to the House, that that Vote should be obtained as soon as possible.
SIR H. CAMPBELL-BANNERMAN (): Will the right Honourable Gentleman extend his statement of business over more than one day next week?
THE FIRST LORD OF THE TREASURY: I am afraid it is impossible for me to do that now, but I hope to be able to do so to-morrow.
MR. DILLON (): Is it proposed not to take the Army Estimates until all the Navy Estimates have been finished?
MR. R. G. WEBSTER: Is it proposed to take the London Government Bill at all next week?
THE FIRST LORD OF THE TREASURY: I shall not take it on Monday. As regards the Navy Votes, we have often got through an amount not greater than the Votes now remaining, and I have, therefore, some hope of our reaching the Army Votes.
SIR C. DILKE: It being understood you will not take the shipbuilding Vote?
THE FIRST LORD OF THE TREASURY: We shall not take that.

IRISH SEA FISHERIES.
Mr. W. MOORE. (): I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland how much of the sum of £250,000 granted by the Act 46 and 47 Vic. c. 26, for the purpose of encouraging the sea fisheries of Ireland by promoting and aiding with grants of public moneys the construction of piers, harbours, and other works in Ireland, has been expended by the Fishery Piers and Harbours Commission appointed by the Act of the 46 and 47 Vic. c. 26, or since 1889 by the Commissioners of Public Works in Ireland; and if any balance remains, and is now available for the purposes of the said Acts, will he entertain applications from districts in Ireland other than congested districts, with a view to making such representations to the Commissioners of Public Works in Ireland as will secure the execution of really necessary work in such districts?
MR. GERALD BALFOUR: The amount at present available for the purpose mentioned is between £17,000 and £18,000. Applications have been received from a good many districts in Ireland, non-congested as well as congested, and the expenditure of the moneys available is under the consideration of the Government.

TWELVE O'CLOCK RULE.
THE FIRST LORD OF THE TREASURY THE FIRST LORD OF THE TREASURY moved—
"That the proceedings of the Committee of Ways and Means, if the Committee be sitting to Twelve to-night, be not interrupted under the Standing Order Sittings of the House."
A Division was challenged, but the House did not divide, and the Motion was agreed to.

ORDERS OF THE DAY.

  WAYS AND MEANS (BUDGET).
  Considered in Committee.
  [Mr. J. W. LOWTHER Cumberland, Penrith), CHAIRMAN of WAYS and MEANS, in the Chair.]
  (In the Committee.)

  WAYS AND MEANS (BUDGET).

    WINES.
    1. Motion made, and Question proposed—
    "That in lieu of the duties of Customs now payable on Wine imported into Great Britain or Ireland, there shall be charged, levied, and paid the duties following (that is to say):—

    £

    s.

    d.

    Wine (other than still Wine imported in bottle) not exceeding 30 degrees of proof spirit, the gallon

    0

    1

    6

    Exceeding 30 but not exceeding 42 degrees of proof spirit, the gallon

    0

    3

    0

    And for every degree or part of a degree, beyond the highest above charged, an additional duty, the gallon

    0

    0

    3

    Sparkling Wine imported in bottle, an additional duty, the gallon

    0

    2

    6

    Still Wine imported in bottle, the gallon

    0

    3

    0

    "In this Resolution the word 'Wine' includes lees of Wine. The word 'degree' includes no fraction of the next higher"degree."—(Mr. Chancellor of the Exchequer.)
    THE CHANCELLOR OF THE EXCHEQUER (Sir M. HICKS BEACH,): The financial year which has just closed shows no retrogression in the condition of the people. If we look at the Returns of our bankers' clearing houses throughout the country, or of our railway traffic, we shall see the activity of trade. If we look to our labour statistics we find, I am glad to say, that the ratio of unemployed has been less than the average of the seven preceding years, and that there has been a distinct increase in the rate of wages. Our home trade, generally speaking, has been good for some time past. Our agriculturists have had a good season, especially with regard to the hay harvest. And, lately, our foreign trade has shown a gratifying increase. There have been, from time to time, clouds on the political horizon during the year, such as arose from the war between the United States and Spain, or from our own difficulties on the Niger, the Nile, and in the Far East. But those clouds, happily, passed away, and have had no effect upon our trade or speculation in this country, beyond what was more than compensated for by the rapid and remarkable return of prosperity to India.

    REVENUE, 1898–9.
    Sir, a year ago I framed my Estimates of revenue in circumstances of doubt and difficulty. I had, on the one side, to consider wars and rumours of wars; on the other, I was face to face with the remarkable result of three very prosperous years. It seemed to me on the whole that it was not creditable to the financial foresight either of myself or my predecessor that the Estimates of revenue in three successive years should have been surpassed by the actual receipts by no less a sum than £5,812,000, £3,470,000, and £3,570,000 respectively, and I felt myself justified in being sanguine in my Estimates for the year just closed. Of course, Sir, at the time, and ever since, up to within the last few weeks, all the pundits told me that I was wrong. They insisted that my estimates were over-sanguine; that there was certain to be a deficit; and that the only question was the amount of that deficit. And there were other critics

    995
    who told me that my proposal to reduce taxation was absolutely unjustifiable in the face of a certain increase in the expenditure of the year. I said nothing. I do not much care for criticism; but now, after the event, I think I can say that I was right and that all my critics were wrong. It is true that the expenditure increased beyond my original estimate, but it is also true that the revenue exceeded my Estimate, and the result has been a realised surplus, small, but sufficient, on the right side, and I am en-titled to whatever credit a Chancellor of the Exchequer may claim—a credit which I must honestly say belongs far more properly to his permanent assistants—for not extracting from the pockets of the taxpayers more than is required for the necessities of the country in the year. The total revenue received in the year just closed was £117,857,000, as against £116,016,000 in the previous year. Of that sum £9,521,000 went to the local taxation account, £119,000 more than the previous year; and the Exchequer receipts were £108,336,000, as against £106,614,000 in the previous year, or more by £1,226,000 than the Budget estimate of £107,110,000. That is a satisfactory growth of the revenue, and it is an enormous amount of revenue. I think that it may warn us to be careful how we part from the old-established financial policy of the country and embark on a new departure in the matter of our fiscal system. But I have one word of caution to add. The rate of growth during the year was considerable, but, having carefully looked into the matter, I do not think that the rate of growth with regard to some important heads of revenue was proportionately so great, or the expansion so vigorous, as in the three years ending with 1898. Therefore, though I shall be hopeful of a considerable increase in the coming year, I shall not put my estimates too high.

    CUSTOMS.
    To turn to the details of the revenue. Customs produced £20,850,000, which was £230,000 less than the estimate. With regard to the minor items of Customs, coffee for once shows an increase. I am told that this is due to the increasing number of excellent temperance refreshment rooms in London,
    996
    where coffee is a favourite beverage. The use of cocoa, also, I am happy to say, has increased by 14 per cent., and it may comfort my honourable and gallant Friend the Member for Central Sheffield, who I know is a patron of cocoa, to be informed that a much larger proportion of the cocoa used in this country was of British manufacture than in the previous year. The revenue from dried fruits shows a small decrease, owing to a bad harvest. Tea shows an increase of £62,000, but I shall have to be cautious in my estimate of tea for the coming year, for I am sorry to say that tea has lately risen in price by, I am told, as much as 2d. in the pound. That is due to the fact that Indian and Ceylon teas are becoming very popular in Russia, the United States, and our great Colonies, and consequently there is a shorter supply in this country. No one seems to have noticed the increase in the price of tea, but a good deal would have been said about it if it had been due to an increase of taxation. And it may interest the Committee to be informed of rather a curious circumstance in regard to the receipts from tea. There is a singular rivalry now going on between certain great houses in the tea trade as to the amount of the cheques which each of them shall give for individual clearances of tea. And the result is sometimes greatly to discompose the receipts from tea in one quarter of the year, or even in different years, when compared with one another. The Customs were actually asked the other day to allow the inclusion in one of these cheques of the duty on tea afloat, and not yet arrived in this country. I need hardly say that we promptly put a stop to the suggestion, which, if allowed, would have entirely disorganised the proper keeping of our accounts from year to year. But there are two heads to which I wish principally to allude under Customs Revenue. These heads are, foreign plain spirits, and tobacco. The Exchequer receipts from foreign spirits, in 1897-98 were £898,000; last year they were only £760,000, showing a loss of £138,000. That was altogether unanticipated. It was due to the famine in Russia, which forced the peasantry to consume their potatoes and corn, if they had any, instead on converting them into spirits. And it WE due also to the

    997
    fact that the price of potatoes was very high in this country, and potatoes were imported here from the Continent, instead of, as usual, the cheap spirit extracted from them. That was no gain, I am sorry to inform the honourable Baronet opposite, to the cause of temperance, for although it raised the price of foreign plain spirits, the only result was that people used British spirits instead.

    TOBACCO DUTY.
    I will now turn to tobacco. The Exchequer receipts from tobacco in 1897–98 were £11,437,000. In framing my Estimate for last year, I had to allow on one side for the loss of revenue by the lowering of the duty by 6d. in the pound; and, on the other, for the natural increase in consumption which would follow the lowering of the duty; and my Estimate of the yield from tobacco was, for the year, £10,630,000. The Exchequer receipts have only been £10,420,000. But I should state to the Committee that there will probably be shown, when the accounts are made up, to be a considerable difference between the net receipts and the Exchequer receipts, and it will be due to the following causes: During the last few weeks, including a few days at the end of the financial year, there has been the most extraordinary rush to clear tobacco, in anticipation of a possible increase of duty in the coming year. And although the great bulk of these extraordinary receipts did not reach the Exchequer until the present year—to which indeed of course they properly belong, for they were purely an anticipation of the duty of the present year—vet the trade returns will show, as the honourable Member for Dundee discovered the other day, a remarkable increase in the clearances of tobacco just towards the end of March. Well, making all allowances for this, and taking the Exchequer receipts of £10,420,000 as what I believe they were, the normal receipts from tobacco of last year, I have to confess to a disappointment in this matter. It was due to this cause: Tobacco is, unlike other articles of our tariff, the raw material of a manufacture, and if you touch the taxation on the raw material of a manufacture you have to deal with many complex issues. There are two
    998
    sets of prices to begin with—there are the manufacturers' prices, and there are the retailers' prices, and these prices, in the case of tobacco, have to be resettled on consideration not only of the reduction of duty by 6d. in the pound, but also by the reduction of the rate of moisture by five degrees. And this had to be done in the face of great disputes in the trade, due to other causes, and to the short supply of tobacco, owing to bad harvests and the war in Cuba, which raised the price of the raw leaf by something like 1½. to 2d. in the pound. Thus the trade during the earlier months of the last financial year was thrown into utter confusion, business was disorganised, and the benefit of the reduction of the duty was largely delayed in reaching the consumer. The consumption, therefore, did not increase as had been anticipated. But things have settled down now. The trade has been doing well during the last half of the year, quite apart from the extraordinary clearances to which I have alluded. Things are evidently prosperous, and if we are able —I shall recur to the matter again—to leave tobacco alone this year, I am quite confident that my anticipations of an increased revenue from increased consumption will be more than realised in the year that is to come. Sir, I now conic to the Inland Revenue.

    EXCISE.
    The Excise produced Exchequer receipts of £29,200.000, an increase of £250,000 over my estimate, and of £900,000 over last year. Of this, beer produced an increase of £247,000, rather less than my Estimate. Spirits produced an increase of £036,000, being £260,000 more than my estimate. That was a purely exceptional rate of increase for spirits, as compared with the previous year. It was due, I think, mainly to the falling off in foreign spirits, to which I have already alluded; but partly also, I hope, to the restrictions on grogging which the House enacted last year.

    DEATH DUTIES.
    I now come to the death duties. The death duties turned out very satisfactorily last year. The total yield was"£15,633,000, of which

    999
    £4,233,000 went to the local taxation account and £11,400,000 to the Exchequer. The Exchequer receipts were £300,000 in excess of those of the previous year, and £730,000 in excess of my estimate. But that is not quite an accurate statement as regards my estimate, because in last year's Budget I proposed to make certain alterations in the death duties, which would have entailed a loss of £280,000. I did not proceed with those alterations, and if that fact is allowed for, the yield from the death duties was £450,000 in excess of my estimate, a much less increase, as compared with the estimate, I am glad to say, than in the previous year. The estate duty and succession duty yielded a very small trifle more than in the previous year. Legacy duty increased by £274,000 on the previous year, £310,000 over my estimate. That was due to some exceptional receipts from very large legacies, which paid the very highest rate of legacy duty, and my advisers assure me that it is not practically possible that this should recur. But I may say, in regard to both legacy and succession duties, that the end of the falling off in those duties which resulted from the Act of 1894 has evidently been reached, and that in future years they will yield a reasonable increase. The year that has just closed was not so fortunate as regards the yield of large estates as the preceding year. During it 64 estates over £250,000 in value, each of them paid duty, whereas in the previous year there were 73 such estates. Of these 64 estates eight were over £1,000,000 each, making a total value of £11,600,000, whereas in the previous year there were nine over £1,000,000 each, making a total value of £15,750,000. But what was lost from large estates was gained in smaller estates. Estates below £250,000 each came to a total value last year of £216,000,000, as against £202,000,000 in the preceding year. The total value of realty paying duty last year was £49,379,000, a little less than in the previous year. I think that will be found to be about in future the normal level. Free personalty, which amounted to a total value of £173,288,000 in 1897-98, rose to a total value of £176,908,000 last year. The total receipt of death duties from realty was £3,012,000, less by £122,000 than
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    in the previous year. The total receipt of death duties from personalty was. £12,621,000, more by £427,000 than in the previous year. Of course it is evident that with the increasing wealth of the country the proportion will be greater from personalty and less from realty. In the first nine months of the year the net principal value of realty charged to estate duty was £38,475,000, or one million and a half more than in the previous year. The increase was mainly in agricultural land, which was valued at £11,296,000, an average price of 17.03 years' purchase on the gross value, and 20.85 years' purchase on the net value. House property amounted to £18,864,000; ground rents to £2,755,000; miscellaneous receipts to £5,560,000. That completes my comparison of the death duties.

    STAMPS.
    Stamps yielded £7,630,000, £20,000 less than in 1897–98, and £30,000 more than my estimate. The receipts from stamps on Stock Exchange business have lately shown a failing off, but last year, owing to good business in the last quarter of the year this item showed an increase from £952,000 to £1,006,000.
    INCOME TAX
    The income tax yielded £18,000,000, which is £750,000 more than the previous year, and £300,000 more than my estimate. The full force of the abatements agreed to last year has not yet been experienced. The increase is due to improved assessments, but also, I think, to a somewhat closer collection of arrears than in the previous year. It may be that the income tax receipts of last year, in that way, in some measure anticipated the receipts of this year.

    LAND TAX.
    Land tax shows a decrease, compared with the previous year, of £170,000. Part of this was due to increased arrears, part to the increased redemption under the provisions of tin-Act of 1896. But the bulk of it, £120,000, was due to the provisions to which Parliament agreed last Session. The Committee will remember that in the Finance Act of last year, it was pro-

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    vided that an owner of property liable to land tax who could produce a certificate of exemption from income tax for the year should be entitled also to exemption from the land tax for the year; and if he could produce a certificate of abatement of income tax showing that his income was less than £400 a year he should be entitled to an abatement of half his land tax. It was impossible at the time accurately to estimate the probable result of these provisions, and I confess I was rather reluctant to agree to the second of them. But they cost the country last year, I think, £120,000, and I do not regret it, for, having made inquiries, I am quite satisfied that the result has been a very considerable relief to a large number of freeholders with small incomes; and I know of no class of men on whom the burdens of imperial and local taxation press more heavily than they do on that particular class. Sir, I will complete my review of the revenue of the year by saying that the postal services and miscellaneous receipts also show a satisfactory increase.

    EXPENDITURE, 1898–9.
    I now turn to the expenditure. I provided for £106,829,000 in my Budget. There were Supplementary Estimates of £1,986,000, but from them savings of £666,000 have to be deducted, spread over almost every head of the Estimates, so that the net expenditure amounted to £108,150,000. This, deducted from the revenue, £108,336,000, shows a realised surplus for last year of £186,000. You must add, of course, to that expenditure £9,521,000 paid to the local taxation account in aid of rates, £1,843,000 borrowed on capital account for telephones, barracks, guns and the Uganda Railway, and other purposes; and £1,710,000 issued out of the Exchequer from former surpluses for naval and military works. The total aggregate expenditure provided for by the State last year will then amount to £121,224,000.

    EXCHEQUER BALANCES.
    The Exchequer balances on 1st April 1898 were of a very abnormal amount, £10,918,000, which is about £5,000.000 in excess of the normal amount of Exchequer balances. They were inflated on the one side by including the surpluses of previous
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    years, amounting to £7,249,000, which had been devoted by Parliament to naval and military works and public buildings; and they were depleted on the other side by my having taken £2,089,000 for purposes of capital expenditure authorised by Parliament, instead of borrowing, so as temporarily to save the interest on the money. That last amount of £2,089,000 has now been borrowed and repaid to the Exchequer balances; £1,710,000 has been issued during the year for our naval and military works; £2,550,000 has been also issued and invested in a separate account bearing interest for public buildings, so that there now only remains in the balances £1,861,000 still to be issued for naval and military works, most of which, I think, will be issued this year. The total Exchequer balances on 1st April 1899, including this last-named sum, amounted to £8,919,000. I may state that the balances have been permanently strengthened during the year by the National Debt Commissioners having applied a sum of £1,128,000, the remainder of the surplus of 1897–98, to the repayment of deficiency advances under the Sinking Fund Act of 1875.

    NATIONAL DEBT.
    I now come to the Debt of the country. The total Debt of the country on 1st April 1898 was £638,267,000. On 31st March this year it was £634,984,000. But that is not a. fair comparison of the Debt, if we think only of what I may call the dead-weight Debt or the old Debt of the country, for, of course, the figures I have quoted include the Debt now being borrowed from year to year under special Acts of Parliament for certain reproductive purposes which is outside the fixed Debt charge, the interest and the Sinking Fund being provided for annually by the Votes of this House. That Debt on 1st April 1898 amounted to £3,831,000. On 31st March this year it had increased to £7,479,000, the increase being mainly due, as I have already explained, to the fact that during the year I have borrowed to replace in Exchequer balances a sum of more than £2,000,000, which had been taken out of them for these purposes. The deadweight Debt on 1st April 1898 amounted to £634,436,000. On 31st March last

    1003
    year it had fallen to £627,505,000. The funded debt on the last date amounted to £583,186,000, a decrease of £2,602,000 as compared with last year. Of this decrease in the funded Debt I should say that part was due to the investment of £297,000 received for the redemption of land tax. The estimated capital value of terminable annuities on 31st March last was £36,186,000, less by £4,329,000 than last year. The unfunded Debt remains the same as last year, £8,133,000, so that there was a net reduction of dead-weight Debt in the year of £6,931,000. This includes the reduction due to the application of the New Sinking Fund 1897-98, £1,061,000, which, as I explained last year, the Commissioners of the National Debt were unable to apply before the close of last financial year. But it does not include the New Sinking Fund 1898–9, £1,394,000, which has not yet been applied to the reduction of Debt. During the year £7,577,000 has been set aside for the reduction of Debt, and it may interest the Committee to know that among the sums devoted to that purpose is a sum of £77,000, which had accumulated from some of our Suez Canal shares which had been drawn for payment. The market value of that great national asset, the Suez Canal shares, on 31st March last was £26,450,000, £4,000,000 more than it was two years ago. The Committee may, perhaps, be disposed to set that unearned increment of £4,000,000 against our expenditure of £1,000,000 in the reconquest of the Soudan.

    COINAGE.
    The restoration of our gold coinage continued satisfactory through the year, £2,100,000 in light sovereigns and half sovereigns were withdrawn during the year at a cost of £22,466, making a total of £36,300,000 withdrawn since the operation began. The loss per piece is less by a small fraction of a penny, indicating, of course, a steady improvement in the general condition of our gold coinage in circulation. Now, I have completed my view of the past and the present, and I turn to what I hope will be a more interesting, and I hope also a more agreeable task—a consideration of the finances of the future.
    ESTIMATED EXPENDITURE, 1899–1900.
    The estimated expenditure for the year chargeable against Exchequer revenue amounts to £112,927,000, an increase of £6,098,000 over the Budget Estimate of the previous year. The principal causes of that increase are as follows:—There has been an increase of £742,000 in the Consolidated Fund services. That is almost wholly due to the fact that this year the whole, instead of the half, of the grant made to Ireland by the Local Government Act of last year for poor rate and county cess is charged on the Consolidated Fund—an increase of £364,000 this year. And, further, the sum of £281,000 is also charged on that fund, of which £244,000 was formerly voted on the Civil Service Estimates for the maintenance of pauper lunatics and for other charges in Ireland, and £97,000 for a corresponding grant to Scotland. The Civil Service Estimates have been relieved by this arrangement of £244,000 a year; but I am sorry to say that, owing to the increased charges for education, the expenditure in East and West Africa, and other purposes, they have gone up by £387,000. The cost of the Postal Services has increased by £781,000, due to the fact that the reforms initiated in the Jubilee year and the improved pay and condition of the service of the employees are beginning to press very heavily on the Post Office Estimates. The Army Estimates have increased by £1,396,000 and the Navy Estimates by £2,817,000. The total, as I have said, shows an increase of £6,098,000 over the preceding year. I wish the Committee to take special notice that this is following a similar increase of more than £5,000,000 last year, and that the total increase in our estimated expenditure, if we include the Local Taxation Account for the last four years, is no less than £19,076,000.

    GROWTH OF EXPENDITURE.
    Now, Sir, I think one thing is. quite clear, and that is, that it is impossible, however great the prosperity of the country may be, for such increases as this—of £5,000,000 or £6,000,000 a year in our expenditure to be met by mere automatic increase of our existing taxation. Nor could they

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    be met, for long, by any increase of existing taxes. If this rate of increase is to continue, Parliament and the country must make up their minds not only to large increases in the existing taxes, but also to the discovery of new and productive sources of revenue. I will venture to prophesy that the result of this would necessarily be a. reaction against this great expenditure, which no one would deplore more than I should, for I am convinced that the result of such a reaction would be to reduce the efficiency and the strength of our defensive services to the point at which they unhappily stool in the last generation. And therefore, Sir, I do hope—and I trust that my hope may be seconded by the efforts of Parliament and the Government of the country—that this rate of increase may not continue. Sir, I am hopeful—we ought surely all to be hopeful—that it may not continue, for it is mainly due, as we know, to increased armaments.

    ARMAMENTS: THE PEACE CONFERENCE.
    Well, we hope a good deal from the approaching Conference of the Nations at this moment, when, I believe, a desire for peace is more prevalent throughout the world than it has been for some time past. We hope that this Conference of Nations, animated by that desire, may be able to devise some means for checking this terrible competition in armaments, so wasteful of our ability, our energy, and our money, and from which even the wealthiest of the great family of nations may well pray to be delivered. Sir, I rest on that hope, but if I am asked, "Can I extend it further than that?" I confess I am not sanguine. If I am asked whether I look upon the estimated expenditure of this year as a mere temporary matter capable of being reduced next year, or the year after, or the year after that, to something like the Estimates of four or five years ago, I cannot honestly hold out to the Committee any such expectation as that. And why? Because even if it be possible, as we hope, to make a saving in one direction, I am convinced that we shall increase our expenditure in others.
    GROWTH OF CIVIL EXPENDITURE.
    I listened the other day to a speech by the honourable Member for Northampton a tacking our naval and military expenditure. I noticed that he carefully confined himself to that; I noticed that when he came to deal with the Education Estimates, with the cost of the Civil Service administration, and with matters of that kind, he said he was anxious, not for a decrease, but for an increase. Sir, I know that that feeling is widely shared. I daresay I am old-fashioned in my ideas, but I lock with alarm on the tendency of the present day, quite irrespective of political opinion—a tendency which is. perhaps, more rife on this side of the House than on that—to look to the Exchequer and the Central Government for superintendence, for assistance, for inspection, and for control in all kinds of departments of life, and in all kinds of relations between individuals, in which, in the old days, the Government of the country was never deemed capable of acting at all. Sir, I fear from what I have seen that whatever general view may prevail in the minds of honourable Members as to the excess of our expenditure and the desire to reduce it, the multifarious matters that press on their attention, all of them tending to increase the expenditure, will be too many for them, and that Parliament will continue in the future precisely as it has done in the past few years, largely to increase its expenditure, and thus, as I have said, if it be possible to save in one direction that saving will be neutralised in another. Well, then, I say that in my judgment, so far as my poor foresight can extend, the expenditure of the present year cannot be looked on as a mere temporary estimate. But there is one hopeful matter to which I hope to direct the attention of the Committee for a moment.

    OUR PRINCIPLES OF EXPENDITURE.
    A great part of the increase of our expenditure has been, as I have said, on armaments. Very well; it has been the result of the rivalry in armaments which we all deplore. We have had to follow the increased armaments of other nations. But under what conditions? Other nations have ordinary and extraordinary Bud-

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    gets, by which they conceal the real amount of their expenditure. Other nations do not scruple, if they want more ships, or more guns, or more soldiers, or more sailors, to add enormously to their permanent debt for these purposes. We do nothing of that kind. Our Naval and Military Estimates, be they great or be they small, represent the naval and military expenditure of the year. And, more than that, if we not only desire to provide for what we call temporary matters, such as ships or guns, but also have to provide permanent works, such as harbours, dockyards, or barracks, which ought to last for generations; nay, if we purchase land in this country for the purpose of military manœuvres, or for rifle ranges, which will be a permanent asset to the country's good, what do we do? We do not add to our permanent debt. No, Sir; we borrow for a short term of years, and we repay the sum borrowed by annual votes of Parliament for the interest and sinking fund of such debt. Now, I hope the Committee will not suppose that this is all. It is not all; for during the very time that our Naval and Military Estimates have in this way gone up by ten millions and a half—during that very time we have devoted no less than £29,296,000 to paying off the old debt which we have not incurred ourselves, but have inherited from the past. Sir, I think the Committee will not suppose for a moment that I am alluding to this matter as wishing to alter the practice that has prevailed. Long may it prevail. It is really the only safeguard of this country in these days from something like financial ruin.

    MANAGEMENT OF NATIONAL DEBT.
    I wish it to continue, but I think that those who most wish it to continue will also be most ready to examine from time to time the arrangements under which these matters are regulated, and particularly those arrangements which relate to the administration and the payment of our old debt and the conditions under which those arrangements are carried on, and any new circumstances that may arise. I invite the Committee to such an examination this evening, and in the course of it I hope I may be pardoned if I appear sometimes to deal with matters which to the Committee will be elementary matters. But I wish to make my
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    statement of a complicated and difficult subject clear to the public out of doors; and, therefore, it is necessary to include elementary matters in this statement.

    FIXED DEBT CHARGE.
    Now, Sir, the manner in which we now provide for the interest of our Debt and its gradual repayment is as follows: We set aside £25,000,000 a year as a fixed Debt charge. Out of that fixed Debt charge has to be paid the interest and management of the Debt and the cost of the terminable annuities, and the balance goes, under the name of the New Sinking Fund, to the further redemption of the Debt. In this year the cost of interest and management of the Debt will be £17,264,000; and, therefore, out of the £25,000,000, a sum of £7,736,000 will be available for the reduction of the Debt. That is the largest amount that has ever been set aside for that purpose out of the fixed Debt charge. In the year 1884–85, which until lately was always looked upon as the most flourishing period of the Sinking Fund, the sum of £6,852,000 was so set aside. It then decreased. In 1887–88 it was only £4,963,000. From that time it gradually rose, until in 1894–95 it was £6,552,000.

    TERMINABLE ANNUITIES.
    Now, Sir, the manner in which our debt is reduced at the present time is chiefly through the action of terminable annuities. A large block—perhaps 10 millions, perhaps 20 millions, or 30 millions—of Consols is cancelled; for example, a block standing to the credit of the National Debt Commissioners on behalf of savings bank depositors; and in place of the Consols so cancelled a terminable annuity is set up of such an annual amount and running for such a time as may suffice to pay annually the interest on the Consols cancelled, and also by the end of the time to replace the capital amount of the Consols cancelled. When the end of the terminable annuity arrives the redemption of that amount of debt is effected, and the annual amount of the terminable annuity is, of course, available for other purposes. It may be used either by Parliament, to set up a fresh terminable annuity in order to cancel more Consols, or it may fall, as it would naturally fall, into the new

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    Sinking Fund, and through the new Sinking Fund—which is the unappropriated balance of the fixed debt charge not appropriated either for the interest or the management of the Debt, or for the service of the terminable annuities—be devoted to the redemption of the Debt. Now we are approaching a very remarkable period in the history of the terminable annuities and of the new Sinking Fund. In February 1902 what is known as the Savings Bank annuity of £2,200,000 a year will come to an end, and between that date and July 1904 the converted annuities of £684,000 a year and the Chancery annuities of £2,943,000 a year will also come to an end. And, further, the interest on Consols will be reduced by a quarter per cent., saving an annual amount of something like £1,300,000.

    NEW SINKING FUND.
    So that between the spring of 1902 and 1904 a sum of no less than £7,000,000 a year will fall into the new Sinking Fund. And if Parliament makes no fresh arrangement the new Sinking Fund will be increased by this and other causes until, in 1905–6, it will amount to no less than £9,214,000 a year. Now, it is not in the interest of the steady reduction of the debt—and I think every one will admit this—that the new Sinking Fund should be allowed to increase to such an extent as this. The new Sinking- Fund was never intended to be anything more than a small unappropriated balance of the fixed debt charge.
    HONOURABLE MEMBERS: "Oh"
    THE CHANCELLOR OF THE EXCHEQUER: No, never; because the great bulk of the fixed debt charge was always intended to be devoted either to the payment of the interest on the debt or to the service of the terminable annuities. If the new Sinking Fund were allowed to be increased to such an amount as I have named I am certain that this would be the infallible result—there would be a temptation that no Parliament could possibly resist to devote a very large portion, if not the whole, of these windfalls of which I have spoken, to some wholesale remission
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    of taxation, just as a similar great windfall was devoted by Mr. Gladstone to the remission of taxation in the year 1860. Sir, I wish to take precautions against that. I wish to follow the precedent which was set by Mr. Gladstone and Mr. Childers in 1881 and 1883. It was found in 1881 that in 1885 a great block of terminable annuities would expire. In 1881 Mr. Gladstone proposed that, in order to prevent a large amount falling in at once, with the results which I have suggested to the Committee just now, those terminable annuities should be prolonged, and that suggestion was actually carried out by Mr. Childers in 1883. The terminable annuities were prolonged, and, of course, the annual charge for them was reduced, and with the amount which was gained by reducing the annual charge other Consols were cancelled, and other terminable annuities were set up. I propose to do this now.

    PROPOSED NEW TERMINABLE ANNUITIES.
    I propose to prolong the Savings Bank annuity of £2,200,000 from March 1902 till 1911. That will reduce the annual charge for that annuity to £591,000. With the saving I propose to cancel the book debt of £13,000,000 to the Savings Banks which was established by my right honourable Friend the First Lord of the Admiralty in 1892, and also to cancel £15,000,000 of Consols now held for the Savings Banks by the National Debt Commissioners; and in place of the book debt and Consols so cancelled to set up two terminable annuities respectively of the amount of £746,000 and £870,000, expiring in the year 1923, when Consols will be redeemable at par. I have chosen that year because the nearer that time approaches the more Consols must approximate to par; and the stock to be replaced through the terminable annuities will, therefore, be obtained most cheaply at the time when the greater part of it will be required. I think, Sir, this proposal needs no argument to commend itself to the Committee. It is impossible that Parliament can allow such enormous windfalls as those which I have named to fall into the new Sinking Fund within two years. It is right that we should take measures now to strengthen and maintain the Sinking Fund by such a

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    course as I have suggested. It is perfectly in accordance with precedent, and I do not believe that any objection can be raised to it.

    PRINCIPLES GOVERNING THE REDUCTION OF THE DEBT.
    But, of course, you cannot deal with the terminable annuities without raising another question, and that question is this—What rules should guide us in fixing the amount to be devoted annually to the redemption of the debt? Now that is a question which cannot be decided according to the financial conditions of any one single year. It is not a, question of the temporary suspension of the Sinking Fund. It is a question of the permanent amount of the fixed debt charge; and it is a question the consideration of which, if we were to do nothing with the terminable annuities now, could not by any possibility be postponed beyond February 1902, when the great Savings Bank annuity falls in. Now I would venture to suggest to the Committee some principles which I think ought to guide us in this important and difficult matter. In the first place, I think that the amount of the fixed debt charge ought to bear some relation to the amount of our outstanding debt. Let me take an extreme case. Suppose that Parliament had continued the original amount of the fixed debt charge, £28,000,000 a, year, quite irrespective of the amount which had annually to be devoted to the interest and management of the debt, until the whole of the debt was extinguished. Why, does not everyone feel that that would have been an utterly unreasonable tax on the present for the benefit of the future? It would be an attempt to overdo the Sinking Fund which would certainly end in undoing it. To my mind, Sir, this is clear, that the taxpayers of the time who provide millions annually for the interest of this old debt which they have not themselves incurred, and also for its reduction, are entitled without question to benefit by such reduction in the interest of the debt as may from time to time occur. No one, I think, will question this—that where the reduction in the interest of the debt is due to the reduction of the rate of interest on the debt the tax-
    1012
    payers of the day have a claim to that benefit; such, for instance, as accrued to them from the reduction of the rate of interest on the debt made by my right honourable Friend the First Lord of the Admiralty a few years ago, and which will again take place in 1903. But I go further. The reduction in the interest of the debt may be due not merely to a reduction in the rate of interest on the debt, but also to a reduction in the amount of the debt bearing interest. That is clear. I think on that ground also' the taxpayers have, from time to time, a clear claim to some benefit. Now, 12 years have passed since the taxpayers got any benefit from the redemption of capital, although within that time the charge for interest on the debt has, by reason of the redemption of capital, been reduced by no less than £2,100,000 a year. When Sir Stafford Northcote established the fixed debt charge in 1874, the amount of our debt was £768,946,000; yet he never provided more than £5,000,000 a year for its redemption. The amount of our debt since that time has been diminshed by £141,000,000, and it is now over £627,000,000. And yet we are providing this year seven and three-quarter millions for its reduction. But, Sir, I will go further. I contend that the amount of the fixed debt charge ought to bear some relation, not only to the outstanding amount of our debt, but also to the amount of that debt which is purchase-able in the market, because it is only on that amount that our Sinking Fund can operate at all. I am referring in this matter, of course, to Consols, which is practically the only debt which we can now redeem. There has been a remarkable change in this matter in the last 15 years. In the year 1884–85 there were in the hands of the public, and, therefore, presumably, likely to go on the market—although I shall qualify that presently by what I have to add—£529,986,000 of Consols. There were in the hands of the Government Departments, and, therefore, practically out of the market altogether, for the Government is a buyer and not a seller of Consols, £82,775,000. In that year a sum of £6,852,000 was devoted to the redemption of the debt, and the average rate at which Consols were purchased for that purpose was 100J. This year I

    1013
    find that there are no more than £358,000,000 of Consols in the hands of the public, and, therefore, likely to come on the market; whereas the amount of Consols held by the Government Departments has nearly doubled, and amounts to £162,000,000, and we have £7,736,000 to devote to the purchase of Consols, probably at the rate of something like 11 per cent. premium. Now, Sir, we will take the proportions. The sum devoted to the reduction of the debt through the fixed debt charge in 1884–85 bore the proportion of 1.29 per cent. to the amount of Consols in the hands of the public. This year it will bear a proportion of 2.15 per cent. But still there is something more to be said. Out of that £358,000,000 of Consols in the hands of the public, by no means the whole is likely to come on the market. A very large proportion of it is held by banks, financial institutions, insurance companies, trustees, and foreigners, in older that they may have a nest-egg easily realisable at a time of crisis, and with very little regard either to the price that may be obtainable for Consols or the rate of interest they may produce.

    PRICE OF CONSOLS.
    But suppose it were possible that a greatly increased price of Consols tempted some of the stock so held on to the market? It is perfectly clear from the figures which I have given to the Committee that the market in which Consols are purchasable by the Government, either for the reduction of the debt or for the investment of Savings Bank deposits, has been dangerously narrowed since 1884. We have now Consols at a very high and a continuously high premium, and nobody knows how much higher they may go. I do not say that that premium is entirely due to the fact that the market for Consols has been so narrowed. No doubt it is due also to the general fall in the rate of interest and to the high credit of this country. But I do say that the narrowness of the market, as compared with past years, has had an appreciable effect in raising the price of Consols, and that by our increased purchases in that market we are practically raising the price of what we desire to buy against ourselves. Well. Sir, but this, as years go by—and very soon—will be an increasingly serious
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    matter with regard to the redemption of our debt. If we insist, despite all the changed conditions which, I believe, were never anticipated for a moment by the authors of the existing arrangement, in devoting year by year an amount to the redemption of debt larger in proportion to the outstanding amount of our debt, and far larger in proportion to the purchasable amount of our debt in the market than was ever considered necessary to be so devoted in past years, I think that a persistence in this policy would constitute a real danger to the Sinking Fund.

    SINKING FUND.
    For what is a common argument against the Sinking Fund? Why, surely this—that it is better for the country to allow so many millions a year to fructify in the pockets of the people to the increase of their wealth than to devote those millions a year to the redemption of the debt through the Sinking Fund. I do not agree with that argument. I wish to maintain the Sinking Fund at a substantial amount, but I do not wish to strengthen the hands of those who use that argument by allowing it to be said that we cannot invest these millions which we devote to the Sinking Fund in a better way than by buying Consols, perhaps, at a premium of 15 or 20 per cent. in the years that are before us—Consols, the Committee will remember, which in 24 years hence will be redeemable at par. Sir, I wish to give the Committee a concrete instance bearing on my argument. During the four years since I have had the honour to be the Chancellor of the Exchequer we have devoted the sum of £20,569,000 to the purchase of Consols for the redemption of the debt. With that sum £18,641,000 worth of Consols have been purchased, so that during those four years we have actually paid £1,928,000—nearly £2,000,000—more for the debt redeemed than it will be worth in the year 1923. Well, Sir, the right honourable Gentleman the Member for Wolverhampton called attention to this important matter three years ago. I remember he was answered by the right honourable Gentleman the Member for West Monmouthshire, who said he did not. see any way of reducing the debt except by buy-

    1015
    ing Consols at a premium. I sympathised with the right honourable Gentleman at that time, and I said I was endeavouring to avoid this loss as much as I possibly could. And what did I do? Why, Sir, instead of purchasing Consols I redeemed the floating debt to the extent of £4,293,000; and, further, I obtained the assent of Parliament to transfer from the old Sinking Fund, through which it would have been devoted to the purchase of Consols, the sum of £9,233,000 for permanent military and naval works and public buildings, instead of borrowing separately for this purpose. Those were, as far as they went, temporary palliatives of the difficulty which, I think, the Committee must admit to be before us.

    REDUCTION OF FIXED DEBT CHARGE.
    But they were only temporary palliatives, and, looking to the circumstances which I have endeavoured, I am afraid very imperfectly, to detail to the Committee, I am convinced of this, that in the true interests of the Sinking Fund we should not only now prolong the Savings Bank annuity, as I have suggested, and set up other annuities besides, but we should reduce the fixed debt charge from £25,000,000 to £23,000,000 a year. Sir, if we do that we shall still have left this year a sum of £5,816,000, increasing annually in future years, for the redemption ofdebt—a sum greater in proportion to the total amount of the debt, and much greater in proportion to the purchasable amount of the debt, than was considered sufficient in past years. I may say that it amounts to a percentage of 1.6 per cent. on the amount of Consols in the hands of the public, and that that is a greater percentage than has at any time been applied inside the fixed debt charge to the redemption of debt except during the last four years. Well, Sir, of course I may be told that my arguments with reference to the past are insufficient, that we are richer than our predecessors, and should do more than they did for the reduction of debt. Yes, Sir, we are richer, but we also bear far greater burdens. When, in 1875, Sir Stafford Northcote set up the fixed Debt charge he had to provide the sum of £10,785,000 for the Navy; I have
    1016
    to provide £26,595,000. He had to provide £14,678,000 for the Army; I have to provide £20,617,000. He had to provide £12,656,000 for Civil Service Estimates; I have to provide £22,180,000. Sir, it is quite true that the ability of our people to bear taxation and the yield of our revenue have greatly increased since those days; but I ventured three years ago in my Budget Speech to draw a comparison, which I think was accepted by the Committee, between the increase in our revenue and the increase in our expenditure during the 20 preceding years. I showed how there had been an increase in our revenue, but I showed also how the increase in our expenditure had been infinitely greater; and I am sorry to add that the results of the three years that have since passed have still further increased that disproportion. But, perhaps, I may be told also: "Oh, it is true that the taxpayers of to-day have some right to benefit by the falling in of these great annual charges, but the taxpayers who ought to benefit by the falling in of the Savings Bank Annuity of £2,200.000 are not the taxpayers of the present day, but the taxpayers of 1902."Sir, I claim that I have a right to bespeak this windfall, as I propose to bespeak it on behalf of the taxpayers of the present day. What have we done for those who may succeed us in 1902?
    SIR W. HARCOURT (): Hear, hear !
    THE CHANCELLOR OF THE EXCHEQUER: I will tell the right honourable Member the Member for West Monmouthshire what we have done for them. We have done this: We have, at a cost of almost untold millions, during the past few years provided a Navy so admirable in its strength and in its efficiency, so far greater in those respects than any that can challenge comparison with it, that there is no doubt. I believe, in the minds of the great majority of the people that the obvious strength of that Navy has been a main factor during the past year in saving us from a great war, the burden of which would have fallen not only on ourselves. but hardly less heavily on those who may succeed us in 1902. And further, though it. is a much smaller matter, in the three years ending March 1898

    1017
    the taxpayers produced out of their pockets £9,000,000 more than were required for the services of those three years. Those £9,000,000 have been devoted by us not to our own benefit, but to relieving the taxpayers of the future from a charge to that amount for permanent naval and military works and public buildings, instead of borrowing a loan for that purpose, as justice and precedent would have authorised us to do. But, most of all, I would say that it is in the interests of the taxpayers of 1902, as well as in our own, that the relief, through the falling in of these annuities, which is so near at hand, should be so equitably apportioned over the years that are to come that it should enable a persistent and continuous reduction of Debt to be effected. I believe that my proposals strengthen and safeguard the Sinking Fund; as such I commend them to the favourable consideration of the Committee. I think the Committee for the patient attention which it has devoted to what I fear is a very imperfect explanation; but I would add that in so difficult and complicated a matter as this it is only right that the full details and explanations should be in the possession of the Members of the House, and that to-morrow morning I hope that a Treasury Minute will be in their hands containing those full explanations.

    ESTIMATED REVENUE 1899–1900.
    Now, if those proposals are accepted, the expenditure for which I have to provide in the present year will stand at £110,927,000. Against that, on the existing basis of taxation, I expect a revenue from Customs of £21,350,000, £500,000 in excess of last year's Exchequer receipts; from Excise, £29,850,000. £650,000 in excess of last year's receipts; from Death Duties, £11,150,000, £250,000 less than last year's receipts, because I have to allow for a falling off in the exceptional receipts from legacy duty; £7,600,000 from stamps, £30,000 less than last year's receipts; £800,000 from land tax, £30,000 more than last year's receipts; £1,650,000 from house duty, £50,000 more than last year; £18,300,000 from income tax, £300,000 more than last year; a total tax revenue of £90,700,000. Then I expect from the Post Office £13,200,000, an increase of £490,000; from the telegraph service
    1018
    £3,300,000, an increase of £150,000; from Crown lands, £450,000, an increase of £20,000; from Suez Canal dividend £787,000, an increase of £74,000; and from miscellaneous revenue £1,850,000; a total non-tax revenue of £19,587,000, making a total revenue of £110,287,000 as against a total expenditure of £110,927,000.

    ESTIMATED DEFICIT 1899–1900.
    So that the Committee will see that I have still to make up a sum of nearly £900,000 in order to balance the account and to give me a reasonable margin for contingencies. Now, of course, it is clear that for this purpose there will be no justification, and there can be no necessity, for anything like a new departure in taxation, nor do I propose to embark even upon the new departures of a minor character which a great many correspondents have recommended to me. I have been the victim for the last few weeks of an extraordinary number of persons, who all seem to think that the object of taxation is not to raise revenue, but to penalise their pet aversions. Dogs and cats, menservants and maidservants, advertisements and grinding organs, the bicycles, which are so dear to my right honourable Friend the First Lord of the Treasury, the perambulators, of which more domesticated persons know the value, have all bitter enemies in this country. One gentleman wants me to tax soap and artificial light; another suggests that if I would put a small duty on aerated waters I might make a man of the teetotaller, by whom I suppose he imagines these beverages are principally consumed. Another gentleman tells me I might raise an enormous revenue—I do not know whether it was my honourable Friend the Member for Sheffield (Sir Howard Vincent)—if I would put a tax of £100 a head on every pauper alien landing in this country; and, lastly, a very enticing person assures me that there must be at least 1,500 individuals, gentlemen, men of birth, education, position, respected of their countrymen—not, of course, Members of the House of Commons—everyone of whom would gladly give £10,000 for a baronetcy, if I would only give them the chance. And then, on the other hand, there are those comforting prophets, all of whom have doubtless shouted with the loudest for

    1019
    increased expenditure, who assure me that any kind of new taxation will be a screw in the coffin of Her Majesty's Government. I set them against my right honourable Friend the Member for Bodmin. I admire the anxiety for unpopularity which characterises my right honourable Friend. If I had not to think of others I might be tempted to imitate him. But when he suggested to me that I should impose a fractional in crease on the income tax in order to give a pleasant arithmetical exercise to the income-tax payer, and that a trifle should be added to every one of our Customs and Excise Duties so as to worry the commercial classes into objecting to increased expenditure, why, I am reminded of a saying which I think was Mr. Gladstone's, that the British merchant will stand being taxed, but he will not stand being teased. I turn from the heroic counsels of my right honourable Friend, but there is one proposition upon which I should like to say a few words.

    TOBACCO DUTY.
    It has been suggested that I ought to reimpose the sixpence on the tobacco duty taken off last year. Now, Sir, I am sorry to hear the cheers raised by mention of that suggestion, because I believe there are very grave objections to that proposition. I believe that it is suggested because of the belief that the reduction of the duty has been appropriated by the manufacturer and retailer, and has not reached the consumer. Now, Sir, I have made very careful inquiry into this matter, and I think that belief is an entire mistake. I will tell the Committee why. In the first place, the amount of tobacco retained for home consumption during the year, quite apart from abnormal clearances for which allowance has been made, has increased by more than twice the normal increase under the old rate of duty. That in itself is primâ facie proof that the consumer must have derived some benefit from the reduction; but I will go further. I have made careful inquiries in London and the provinces in this matter, and have obtained price lists of manufacturers and retailers, and I will give the' Committee the general results. I may venture. in the first place, to remind the Committee that last year I said the consumer would
    1020
    benefit in one of two ways—he would either pay less for the same amount of tobacco, or he would get more tobacco for the same payment as before. Now, there are two perfectly distinct kinds of tobacco consumed. There is the drier kind of tobacco, what is called in the trade, I believe, "packet tobacco," which is a more expensive tobacco, but is by no means on that account not consumed by the working classes; that tobacco has unquestionably been reduced in price. I have compared lists from various parts of the country, and I find that in many well-known brands of packet tobacco and cigarettes the price of that class of tobacco has been reduced by 8d. in the lb.—2d. in the lb. more than the reduction of duty. In other cases it has been reduced by 6d., 5½d., 4d., and 2d. in the lb. Of course, opportunity was taken for a general revision of prices. I do not want to detain the Committee with details of this nature, but I shall be happy to show honourable Members who take interest in this matter the figures I have obtained from the price lists, which amply bear out what I have said. Then, with regard to the cheaper class of tobacco, that has not, except in some few eases, been reduced in price. But what has happened? This has happened. That class of tobacco is moistened up to the utmost legal limit. Last year I reduced that legal limit of moisture by 5 degrees, and that amount of reduction of moisture was tantamount to compelling the retailer of that class of cheap tobacco to put less water and 3d. more tobacco into every lb. of tobacco than before, and, therefore, to the extent of 3d. in the lb., consumers of that class of tobacco must have benefited by the reduction. Further, I am assured on the best authority that this tobacco is made from leaves of better quality than it was before; and, further, that in no case has the consumer suffered from what is notorious, the increase of price in the raw leaf during the last 18 months. The price of the raw leaf from which this cheap tobacco is manufactured has gone up 2d. in the lb., but no addition in price has been made to the consumer on that account. Therefore, again the consumer of this class of tobacco has found benefit from the reduction made in duty last year. What would happen if the duty

    1021
    were again raised? What was the reason why the consumer had not obtained in all cases the full benefit of the reduction, or did not obtain it as soon as might have been expected in others? This was the reason. The great confusion and disturbance in the trade caused by the alteration in the duty. If you were to alter the duty again this year you would double that confusion and disturbance in the trade, and that, added to the increased cost of the raw material which I have mentioned, would certainly be used to put up the cost of tobacco to the consumer to a higher price than was charged before the reduction. Well, Sir, I do not want to cause that, but I had another object than the benefiting of the consumer in proposing the reduction of the duty last year. It was this: I saw an article the prime cost of which as a manufactured article was increased in many cases 500 per cent. by the duty. I saw that the consumption of that article, in spite of the fondness of all classes of our population for it, was much less per head of the population of this country than in Continental countries where the duty is lower. I was anxious at least to take a step towards the establishment of a reserve of force in one of the greatest sources of our revenue. I knew then, and I know now, that this could not be effected in one year, but I do urge the Committee to give the experiment a fair trial in the interest of the revenue. I do assure them of my complete conviction that, if they will do so they will reap from it a golden harvest in the future by increased consumption. I anticipate a great increase in consumption in the year now before us, and I am convinced that it would be a foolish, an unwise policy, for the sake of a small temporary gain which would only he small on account of the large amount of clearances in anticipation of an increase of duty—for the sake of a small gain of that kind to give up the hope of what I really believe will be a golden harvest in the future. I think it would he wiser to look to other sources for the taxation we require.

    NEW STAMP DUTIES.
    I propose to look to both direct and indirect taxation, and I look first to the stamp duties. I pro-
    1022
    pose two new stamp duties. First, I propose to require a stamp duty of 5s. per £100 on the nominal value of all documents representing foreign or colonial bonds, stocks, or shares, which are not at present liable to any duty under the Stamp Act, to be paid on the first occasion when any such document is negotiated here, in order to make it a good delivery in the United Kingdom. Once stamped, it will not require to be stamped again during its lifetime. If withdrawn and another exactly similar is substituted the new document would have to be stamped at a reduced rate of charge. It has long been an admitted anomaly that these documents are not subjected to taxation through the stamp duties, and I do not think anyone could possibly object to an attempt to make them bear their share. An attempt was made by my right honourable Friend the First Lord of the Admiralty (Mr. Goschen) in 1888, but I am informed that it failed then because the duty was a recurrent duty, and gave so much trouble to those who held these securities, that practically the duty could not be levied. The duty which I propose is small in amount, and framed so as to avoid driving those securities—the stay of which in this country is transient.—from the market, and also to avoid any unnecessary trouble on the part of those who hold them. My second proposal is, to impose the ordinary mortgage duty of 2s. 6d. per £100 on loan capital and debenture stock created by any corporation or company under statute. If it were created not under statute, it would have to be secured by a trust deed, and it would then be liable to the 2s. 6d. mortgage duty. I do not see why, merely because it is created in a different way, it should escape the duties to which all other mortgages are liable.

    INCREASE OF EXISTING STAMP DUTIES.
    I further propose two increases in the existing stamp duties. Companies' capital duty is now 2s. per £100. or ½ per cent. In these days, when everybody, from a peer downwards, converts himself into a company, I think the State may well derive a little more profit from the transaction. I do not think for a moment that my proposed increase will be any bar to a legitimate enterprise,

    1023
    although I rather hope that it may tend to check over-capitalisation, and put some obstacles in the path of the impecunious promoter. There is one more small proposal I have to make in regard to stamp duties. Letters of allotment and of renunciation are now to be stamped with a 1d. stamp, and I propose that in future they shall bear a 6d. stamp, because they are contracts which are, or ought to be, profitable to the allottee. The total yield which I expect this year from these new and increased stamp duties is £450,000, because, as the Committee are aware, some of them will not come into force until the Finance Bill passes into law.

    INCREASED WINE DUTIES.
    Now, I turn to indirect taxation. There is a very old controversy as to the justice of the manner in which a given amount of alcohol is taxed in the various forms in which it is produced and sold for the consumption of the public. I believe that in all civilised countries the rate of taxation is highest upon alcohol in its most compact form, and lowest on alcohol in its most diluted form, obviously in order to encourage lighter drinks. In this country a gallon of proof spirit, if in the shape of brandy or any other spirits, pays on importation 10s. l0d.; if it is in the shape of wine it pays from 8s. to 3s. 4d., varying with the strength of the wine. I think that this gives wine too great an advantage, considering the respective values of the commodities. Now, for some time past, our wine duties have been considered not so much as a means of raising revenue as a means of bargaining with wine-producing countries for such commercial advantages to our own general trade as they might be disposed to give us in their tariffs in return for reductions in our wine duties. That is a policy which was successfully adopted in the Cobden Treaty, and has been attempted on various occasions since; but I think, for some years past, it has failed to meet its objects, and foreign countries, whether wine-producing or not, have raised their tariffs to such points as they thought advantageous to themselves with very little, if any, regard to the amount of duty we charged upon their wine. Sir, until a few
    1024
    years ago there was a difficulty in dealing with this matter in the ordinary way, because the revenue of wine was a falling revenue, and, of course, you could not increase taxation on a falling revenue. But the wine duties in the last few years have done very well. Their produce has risen from £1,144,000 in 1894–95 to £1,400,000 in the year just closed, and I think there is no longer any reason, either in the condition of the wine trade or in our Treaty engagements with foreign countries, or any fear of what may happen to our general trade, why we should not impose such reasonable duties on wine as we think it can reasonably bear. The present duty on wine is 1s. per gallon on wine not exceeding 30 degs. of proof, 2s. 6d. per gallon on wine between 31 degs. and 42 degs., and 2s. per gallon surtax on sparkling wine. I propose to increase it to 1s. 6d. per gallon on wine not exceeding 30 degs., to 3s. on wine between 31 degs. and 42 degs., and to increase the surtax on sparkling wine to 2s. 6d.; and, further, to impose a duty of 3s. per gallon upon still Wine imported in bottle, the same duty as on wine between 31 degs. and 42 degs. I do not believe, Sir, that this increased duty will materially reduce the consumption of wine in this country. I think that the amount of that consumption depends far more on the habits and tastes of the people than upon such an alteration as I have suggested in the amount to be levied upon it. I would call the attention of the Committee to these two facts—that in the thirties there was a consumption of wine in this country much larger, in proportion, than now, although then the rate of duty per head of the population was something like 2s. 3d., whereas. now it is only 8d.; and that since the surtax was imposed by my right honourable Friend the First Lord of the Admiralty upon sparkling wine, the consumption of sparkling wine in this country has largely increased. I know there is some still wine of low value imported in bottles, but that kind of wine can just as easily come into this country in the wood, and the average value of wine imported in bottle, as compared with the duty, is far greater than the

    1025
    average value of wine imported in wood. I anticipate from the proposed increased wine duty an increase in the present year of £420,000. Therefore the total increased taxation which I propose will be £870,000.

    FINAL BALANCE SHEET.
    My final balance sheet will be as follows: Customs, £21,770,000; excise, £29,850,000; death duties, £11,150,000; stamps, £8,050,000; land tax, £800,000; house duty, £1,650,000; income tax, £18,300,000; making the total tax revenue, £91,570,000. The total non-tax revenue is £19,587,000; the total revenue is £111,157,000, against an expenditure of £110,927,000, leaving the small surplus of £230,000 for contingencies. Sir, I have now concluded my task, and have only to thank the Committee on both sides of the House for the patient attention they have been, good enough to accord me. I have had to provide for expenditure unprecedented in time of peace, the bulk of which expenditure is due, not to any aggressive policy on our part, but has been forced upon us by the increased and increasing armaments of other nations, and the consideration of the unique conditions of our national prosperity and security. There is a small section of honourable Members opposite who have consistently opposed the increase of our expenditure for war. They are logically entitled also to oppose the provision which I suggest, and the ways and means for meeting it. But I appeal with some confidence to the great majority of the Committee, who have not only cheerfully sanctioned this great expenditure, but have urged and demanded it. I respectfully submit to them that, having done so for reasons which, I believe, commend themselves as satisfactory to the great majority of the people of this country, they are bound to provide for that expenditure. I do not say that they are necessarily compelled to adopt the particular proposals I have made by way of meeting them. These proposals, no one is better aware than myself, are open to criticism. But it is impossible for any proposals to be made for meeting this great expenditure which nobody shall feel and to which nobody can object. There-
    1026
    fore, Sir, I submit my scheme with some confidence to the Committee. I claim for it that it recognises the exceptional circumstances, as compared with past years, with which we have to deal. I claim for it that it deals with those circumstances without adding to our Debt; that, on the contrary, it provides arrangements more reasonable. and, therefore, superior and more permanent for the reduction of our old Debt than those which previously existed; and, finally, I claim that, in the increased taxation which I propose, I have suggested nothing antagonistic to those great fiscal principles from which we receive so abounding a revenue, and have proposed nothing which will seriously interfere with the trade and commerce of this country, or will appreciably add to the burdens of the community.
    SIR H. FOWLER (): I am sure, Sir, that whatever differences of opinion may prevail in the House with reference to some of the proposals the right honourable Gentleman has made, the House will be quite unanimous in the expression of their opinion as to the lucidity, the eloquence, and the masterly ability with which he has made his financial statement. I think that the dullest scholar in finance will be able to clearly understand and to appreciate all his proposals, although it will be necessary that they should be, as he himself has suggested, reduced into writing, and printed, and circulated, both for the convenience of Members and also for the convenience of the country, before the House is asked to pronounce any definite decision upon them. Three years ago, when he made his first Budget proposals, the right honourable Gentleman called the attention of the House to the fact that he was announcing then the receipt of the largest revenue ever known in this country since the great war, the largest surplus almost during a similar period, and the greatest sum devoted to the payment of the National Debt. I think, as he himself has already told us, the experience of the last three years has enabled him,

    1027
    as far as two of those items are concerned, to beat the record. Such a statement as he has made to-night has never been made in the House of Commons before.—with reference either as to figures of income or expenditure. But then, Sir, the Budget, complicated as it is With these various increases, and subject also to the explanations which the right honourable Gentleman has given as to the reasons of the vast additional expenditure, also as to the prosperous state of the country which this year records in the largest revenue ever paid into the Exchequer, may be summed up in one sentence, that sentence being this: The Chancellor of the Exchequer proposes to meet the additional expenditure which will fall upon the country next year by reducing the amount set apart for the payment of the National Debt. The right honourable Gentleman cited the examples of Mr. Gladstone and Mr. Childers, and when the time comes for further discussing his proposals there will be ample opportunity of showing the extremely wide divergence between the proposal of the Chancellor of the Exchequer and the proposals which Mr. Gladstone made in 1860 and those which Mr. Childers made in 1881. But I would point out, simply as a preliminary remark, that the principle of the Sinking Fund established by Sir Stafford Northcote was to set apart a fixed sum every year for the payment of the cost of the Debt, and applying the margin to the reduction of that Debt, and that at the time the right honourable Gentleman has alluded to, when he admits we were not so rich as we are now, when there was no such prosperity existing in the country as exists now, when the yield from taxation was nothing like so great as it is now, Sir Stafford Northcote proposed that £28,000,000 should be set apart for that purpose, totally irrespective of what the future might disclose, keeping that sum up in order to provide for the permanent gradual extinction of the National Debt. When Mr. Childers dealt with it in 1881—Mr. Childers and Mr. Gladstone, although they prevented the windfall coming into the hands of the Chancellor of the Exchequer in the year when the long and other annuities would expire, they made no diminution of the amount to be set apart towards
    1028
    the payment of the Debt. Mr. Gladstone's great object was to keep up expenditure—if I may use such expression—which those annuities required in order to go on paying the cost of the Debt and of liquidating the Debt at a much more rapid rate than had prevailed up to that time. Now, however ably and cleverly the Chancellor of the Exchequer may disguise his proposition, although he may say, "You are really paying off more debts than you ought to," this proposal is to diminish the fund for the payment of the cost of the Debt, and not really to provide for the extinction of the Debt in the future to the extent to which it has been extinguished in the past. Well, the first question we have to ask ourselves is, What is the justification for such a change in our fiscal position? The argument which the right honourable Gentleman enforced on the House with very great ability was, "Oh, there will be a temptation to some Chancellor of the Exchequer, or to some extravagant House of Commons, at some future date to take this money and appropriate it." But he could have provided, and I do not think any one on these Benches would have objected if he had provided, for the extinction of further debt by prolonging these annuities, as Mr. Gladstone and Mr. Childers did. He, however, said, "No; reduce the amount; we have already reduced from £28,000,000 to £25,000,000; let us reduce it from £28,000,000."So that in 1899–1900 the country is to be content with paying £23,000,000, whereas in 1847, under very different conditions, we were content and willing to pay £28,000,000. We talk of burdens, and the Chancellor of the Exchequer said something in reference to our obligations to posterity. He said nothing as to the enormous burdens which fell upon past generations, of the great sacrifices which years ago were made both before and after the great war, to keep up the credit of the nation. But now, at a time of unexampled prosperity—I venture to say that in the whole history of this kingdom there has never been such commercial and financial prosperity in this country as there is at the present moment—the Chancellor of the Exchequer proposes that we should diminish by £2,000,000 per annum the liquidation of the National Debt. I do not wish to

    1029
    forestall what may hereafter be said on that question. It is well understood that the financial proposals of the Budget are not contentiously discussed on the night of their introduction, but I think those of us who feel strongly upon the question should lose no time in expressing our opinion that, at all events, any tampering with the Sinking Fund is an operation which is disastrous and unwise. Not only under the teaching of Mr. Gladstone, but under that of my right honourable Friend the Member for West Monmouthshire, and of the Chancellor of the Exchequer himself, we have regarded this Sinking Fund—this £6,000,000 or £7,000,000, as our war chest. We have felt that in case war broke out we were enabled at once, without adding to the taxation of the country, to raise £200,000,000 or £250,000,000. Without in any way wishing to detract from what the Chancellor of the Exchequer has said as to the necessity of a strong and overpowering Navy, I must express the belief that our financial position is one of our strongest lines of defence, and that the right honourable Gentleman is considerably weakening that position by the course he proposes to take. Now, there are various matters of minor detail upon which, had the right honourable Gentleman been present. I would have asked him a few questions.
    THE FIRST LORD OF THE TREASURY (Mr. A. J. BALFOUR,): He will be here in a moment.
    SIR H. FOWLER: I Will refer to something else while he is absent. One matter to which I should like to call attention is this: the Chancellor of the Exchequer told us that the expenditure which he is asking the House to meet this year will be something like £122,000,000, and he put, as he often has done, the whole strain of the increased expenditure upon our Naval and Military preparations. I have no doubt that those preparations are responsible for a very large amount, the overwhelming proportion, of the expenditure of the last few years, but they are not responsible for it all. Certainly, there has been a margin, I will not say of extravagance, but of very generous expenditure, and I firmly believe that had it not been indulged in, this tam-
    1030
    pering with the Sinking Fund would not have been necessitated. I will say in passing, as the First Lord of the Admiralty is present—I do not sec any representative of the Army in his place—that those who feel the most strongly as to the necessity of upholding the Navy are not quite satisfied with what I may call the tone of the expenditure. The right honourable Gentleman smiles; perhaps it would be better to say the trend of expenditure. There is an impression abroad, whether well founded or not, that, during the last two or three years, there has been a very free, generous, and liberal expenditure upon both the Navy and the Army. It is felt that, if a very strong economical hand had been at work, possibly the expenditure would not have been so great, while, what the Chancellor of the Exchequer laid great stress upon, a strong Navy and an increase of the Army might have been attained. The Chancellor of the Exchequer said nothing with reference to large increases of expenditure on other items. The sum he proposed to take from the Sinking Fund is £2,000,000. Has he made no expenditure of £2,000,000 a year during the last three or four years—an expenditure not for the benefit of the community as a whole, not for the benefit of the taxpayers as a whole, not for the benefit either of the Navy or the Army, or the defence of the country, but for the benefit of a small class of the community, and in order to relieve them of burdens to which they were no more liable than other members of the State? I notice that, in reference to the figures which the right honourable Gentleman gives in reference to the death duties, the right honourable Gentleman said that £3,000,000 was the amount received from realty, but he did not tell us what the amount received from agricultural land had been. He told us that the amount assessed on agricultural land was £11,296,000. I do not know whether he knows the amount that was paid by agricultural land in respect of the death duties.
    THE CHANCELLOR OF THE EXCHEQUER: It would be a very small amount.
    SIR H. FOWLER: Yes, a very small amount compared with the £2,000,000 paid to agricultural land, and, when

    1031
    we come to look at the Very small items of additional taxation which the Chancellor of the Exchequer has proposed, I think we may bear in mind some of these figures. Then the Chancellor of the Exchequer expressed his very strong opinion that this expenditure to which we are now committed is chronic, normal. I agree with him. I do not see much chance of a reduction of expenditure, though I do anticipate considerable and satisfactory results from the forthcoming Conference, and from the general feeling of intolerance of these naval and military armaments which is spreading through the whole civilised world. I think that, at all events, we can stop increasing, and I think there may be some reasonable chance of reduction. The Chancellor of the Exchequer expressed with very great force, and perhaps with some justice, some of his own opinions, which he said were old-fashioned, with reference to this increased expenditure. To some extent I agree with him, but I think there are large branches of future expenditure which will have to be met from Imperial funds for improving the general condition of the people of this country, and there are many items which now stand at comparatively small figures which will be increased. Of course, we cannot forget, though the Chancellor of the Exchequer himself appears to have forgotten, that when he gave out of the public taxes a very large sum in aid of agricultural rates, he promised us that at a future date the case of the urban ratepayer would be considered after the Commission had inquired into it. When that happy day arrives, if it ever does arrive, some demand will be made on the public purse. There has been a considerable increase during the last three years—an increase of nearly £5,000,000—in the bounties, and they will tend to increase. The Chancellor of the Exchequer referred to the Education Vote. There is a feeling—it is a popular feeling, which I share—that that Vote should not be reduced, but should, if possible, be increased. But I think there is a very widespread feeling arising in the country—and certainly it has been stimulated by speeches made by the right honourable Gentleman's colleagues in this House—that our educational system is not only on a very unsatisfactory, but on a very extravagant
    1032
    basis, and that a much better education could be given at a far less cost from the Imperial Exchequer than that which is prevailing now. The Chancellor of the Exchequer seemed to make a very strong point with regard to what was done last year with respect to the tobacco duty. I will take this opportunity of troubling the House with a few remarks on the Chancellor of the Exchequer's arguments and figures. I agree with him that there has been a very golden result—harvest, as he called it—from the tobacco duties. I think he has arrested the progress of that harvest, and I do not share with him his anticipations with respect to the future. The House will, perhaps, allow me to call their attention to what has happened since the year 1888, when, I think, the right honourable Gentleman opposite, the First Lord of the Admiralty, restored the duty which had been taken off by Sir Stafford Northcote. The previous year the tobacco duty was £9,300,000. There was a loss on the first year, which brought it down to £8,700,000, and that loss was not recovered until three years afterwards. But in 1892—and I want the House to note this—when the tax on tobacco stood where it stood up to the last year, the revenue was £10,000,000. It then gradually rose to £10,100,000, £10,120,000 £10,400,000, £10,750,000, £11,000,000, and £11,500,000. You had there a steady, satisfactory increase, and that will be one of the first reasons why I would ask the Chancellor of the Exchequer why he should inflict on the revenue the very heavy loss he has inflicted upon it, and which, I think, will be greater than he anticipates, in order to benefit a very small class of the community. But the controversy arises as to who has been benefited. The Chancellor of the Exchequer told us last year that the benefit would be twofold—either that the consumer would get a better article, that is, a drier tobacco, or, may I put it, a less adulterated tobacco?
    THE CHANCELLOR OF THE EXCHEQUER: No.
    SIR H. FOWLER: Then a drier tobacco, or he would get it at a lower price. The Chancellor of the Exchequer says that the trade has been in a state-of very great confusion during the year.

    1033
    I have no doubt the Chancellor of the Exchequer has read—I believe all Chancellors of the Exchequers are very careful readers of—that very able financial paper, "The Economist," which a short time ago called attention to the increased prosperity which had prevailed in the year 1898 amongst the retailers of tobacco. When their figures were called in question, one of the first firms in the tobacco trade addressed to the "Economist" a communication, in which they said that the whole of the remission did not go into the pockets of the tobacco trade, whether manufacturers or retailers, but that a larger part, if not the whole, went to the consumer. Then they gave the usual description, which the Chancellor of the Exchequer has given, but which nobody finds anybody accepts in private life, namely, that the tobacco is better, or that it is cheaper. They put it into figures, and what their figures came to was this, that the ultimate result was that 2¾d. was practically the amount which represented the improvement in the tobacco, and that 3½d. did go actually into the pocket of the manufacturer and the retailer. The Chancellor of the Exchequer is proposing to interfere with the Sinking Fund to the extent of £2,000,000. I think we are entitled to say, with all respect to him, that he has sacrificed £1,500,000 of revenue for the benefit of a very small class—namely, the tobacco trade, and I can find nobody, either rich or poor, who says that the tobacco is any better, and no one will admit that it is any cheaper. That, I think, is the general consensus of opinion, and I think the Chancellor of the Exchequer would see, reading, as I have no doubt he did, those unspoken indications of the general feeling of the House, that that feeling was not confined to this side of the House when he alluded to the question. But I would ask the Chancellor of the Exchequer one question. Why have the tobacconists been so anxious to release the tobacco before this Budget came on? If this benefit has gone into the hands of the consumer, if they have had no advantage from it, why should they want to clear it on the lower rate of duty? They thought they were going to lose a large bounty, and they were anxious to have as full a share of that bounty as possible. I have great admiration for the Chancellor of the Exchequer's
    1034
    talents, and I have never heard him so ably develop his brief as he did to-night on behalf of the tobacco trade, but with all his masterly skill I do not think he will carry conviction to the country, and I am sure he did not carry conviction to himself in the statement he made. With reference to the other items of his proposal, there can be very little dispute about them, though in regard to the increase on wines, I would like to ask him how he proposes to deal with Colonial wines?
    THE CHANCELLOR OF THE EXCHEQUER: In the same way as with the other wines.
    SIR H. FOWLER: Then, if I recollect aright, it was urged by my right honourable Friend the Member for West Monmouth, when he made his reduction, that it was in the interests of the Colonies, and especially with reference to Australian wines. And now who are going to put on a, duty which would practically be prohibitive. I have no doubt the Chancellor of the Exchequer has fully considered that point, but I should like to know from him, before we pass these Resolutions, what are his reasons for putting an additional burden on an industry which is developing very rapidly, and which is sure to be of very great advantage to our Colonial interests. The honourable Member for Sheffield, who has cheered most of the heresies which have fallen from the Chancellor of the Exchequer, was very quiet on that point, I am afraid he did not look after the interests of the Colonial producers——
    COLONEL SIR HOWARD VINCENT (): I am going to move an Amendment.
    SIR H. FOWLER: I am glad to find that the honourable Gentleman is true to his colours under all circumstances. One other question I would like to ask is in reference to the death duties. The Chancellor of the Exchequer takes a low estimate for this year, as he has taken every year. I think for three years his estimates with regard to the death duties have always been, perhaps rightly so, under the mark. What I want to ask him is, what he is proposing to do with reference to what is evident to all per-

    1035
    sons who look into these matters—namely, that there are attempts being made, and successfully made, and attempts on. a very large scale, to evade the payment of these duties. I do not think that evading the payment of the death duty differs very much from evading the payment of the spirit duty, or the beer duty, or the duty on any other article on which Custom and Excise is levied. There used to be very strong laws against smuggling, and very strong laws against the evading of payment of Excise duties. Mr. Gladstone, I think, when he imposed the Account duty, extended its operations to three months before death. I think it was the right honourable Gentleman opposite, the First Lord of the Admiralty, who extended the three months to twelve months when he imposed the estate duty. The two Chancellors of the Exchequer admitted that you must have a sort of close time before death when any dealing with property would not enable the payer of duty to escape. The Chancellor of the Exchequer is satisfied—I think he must be satisfied—that the death duties have been evaded, and evaded to a very large extent, and I want to ask him whether he is prepared to consider this question with a view to increasing the existing period before death. Honourable Members say "No !"but I put it on this ground—that every man who evades payment of the duty increases the burden of other people. He is not injuring the Chancellor of the Exchequer primarily. He is injuring the whole of the taxpayers who honestly pay their taxes, and who have to make good his evasion of the duty. I am simply putting it, and do not think unreasonably, that, if 12 months is found not to be a sufficient protection for the Revenue and for the other taxpayers, it is a fair question to raise for the consideration of the Chancellor of the Exchequer. I will conclude as I began, by saying that while I admire the manner in which the Chancellor of the Exchequer has made his statement, while we take very little exception to the mode in which he proposes to fill up the vacuum, which he himself has partly created by what we think the unwise reduction of the tobacco duty, and while I hope that there may be some opportunity consistent with the forms of the House of raising that question on the
    1036
    distinct and definite issue of whether the House prefers to impose taxation in lieu of the tobacco duty, still, apart from all that, I think the Chancellor of the Exchequer must expect, and it is only fair and candid to say so, that any and every attempt to tamper with the Sinking Fund and to endeavour to provide for the current expenditure of the year out of funds which we think ought to be set apart for the liquidation of the Debt, will be met with strong opposition on this side of the House.
    MR. COURTNEY (): On the question of the tobacco duty I am inclined to agree with the Chancellor of the Exchequer. It could not be expected that the full effect of that reduction would be at once felt, but I cannot understand how honourable Gentlemen can deny that, sooner or later, the consumer will experience a greater gain, either in the reduction of the price or an improvement in the quality of tobacco. The action of the Chancellor of the Exchequer last year was a step in the right direction, and it would be most unwise for him to retrace his steps. The central fact of the Budget is the reduction of the sum available for decreasing the Debt by £2,000,000. In this matter, I might say we have been a little deceived by the Secretary of State for India, who, in a serious, deliberate, and well-expressed form, declared that nothing of the kind was going to be done.
    THE CHANCELLOR OF THE EXCHEQUER: I saw that my right honourable Friend had alluded to the speech of my noble Friend the Secretary for India, and I asked the. noble Lord what he said. He explained that he asserted that we did not intend to suspend the payment of the Debt. Neither do we.
    MR. COURTNEY: The Government are going to suspend the payment of the Debt to the extent of £2,000,000 a year, at all events; but I understood my noble Friend the Secretary for India to say that they were not going to interfere in any way with the Debt. When I realise the scale of our naval and military expenditure now, and what the cost of war would be now or in the near future, I think it is eminently desirable that every possible means should be

    1037
    taken to reduce the debt in time of peace. The cost of the Crimean War, when warlike operations were much less expensive than they are now, was £100,000,000, and that war did not last very long, and was strictly localised. If we had a war now with a first-class Power it would cost in a very short time hundreds of millions of money, and add to the Debt, which would increase far beyond the amount we have succeeded in reducing. It is in view of this that I regret the Chancellor of the Exchequer should have met his deficiency of £3,000,000 by reducing the amount to be devoted to the reduction of the National Debt by £2,000,000. With regard to the proposed increase in the wine duty, I think it is a remarkable thing that the Chancellor of the Exchequer has selected for taxation the particular beverage which is supplied by the foreigner.
    SIR C. DILKE (): The Colonies are not foreigners.
    MR. COURTNEY: In this respect they are. I was so rejoiced at what the Chancellor of the Exchequer said in regard to the proposal for the reduction of armaments that I heard with a pang of regret that the only resource by way of indirect taxation that the right honourable Gentleman has is to raise the duty on wine—a course which would at once raise reciprocal feelings not of a too friendly character on the part of the great nations of Europe. Is it to be supposed that the people of France and Germany will not feel the raising of the duties on wines? The rise is most severe, too, in regard to some of the cheap wines. The duty is to be increased from 2d. to 6d. a bottle on the lowest class of claret——
    THE CHANCELLOR OF THE EXCHEQUER: No!
    MR. COURTNEY: The duty on still bottled wines is to rise from 1s. to 3s. per gallon, that is from 2d. to 6d. a. bottle, and that is wholly out of proportion to the value of the wine. Such a proposal is a bad introduction to the Conference at The Hague. It must undoubtedly be regarded abroad as a hostile act on the part of this country towards the winegrowing countries of Europe—that the only increase of indirect taxation resorted to by the Chancellor of the Exche-
    1038
    quer should be in respect of wine. But the whole subject of the tax on wines must be reserved for, a later stage.
    SIR W. HARCOURT (): I do not rise for the purpose of discussing in detail the Budget on the night of its introduction; and certainly never was there an occasion on which the House of Commons and the country had more reason to deeply consider the proposals of the Chancellor of the Exchequer deliberately. That the time of the largest Revenue and the greatest prosperity, from a fiscal point of view, which this country has probably ever known should be the occasion chosen for what I can only call a repudiation of the obligations under which this country has placed itself with regard to the extinction of the Debt is, I confess, one of the most serious, and I will call it one of the most disastrous, proposals which has ever been made. I will not say it is the most disastrous, because another Chancellor of the Exchequer (Mr. Goschen), who sits by the side of the right honourable Gentleman, did the same thing. Twice in the history of this country has this proposal been made in times of extreme prosperity. The present First Lord of the Admiralty, who was almost as fortunate as the present Chancellor of the Exchequer in the times in which he administered finance, chose that period of prosperity to strike off £2,500,000 from the provision of the Debt; and now comes another Chancellor of the Exchequer who strikes off £2,000,000 more, and tells us that it is in order to secure provision for the future. The Chancellor of the Exchequer gave us admirable precepts on the duties of maintaining the obligation of redeeming the Debt, but I am of opinion that future Chancellors of the Exchequer will be much more likely to follow the right honourable Gentleman's example than to obey his precept. In my opinion, if thin Budget is passed, and it is agreed under present conditions to strike off what is practically one-third of the provision for the redemption of the Debt, that provision has practically come to an end. It is a fatal blow against that system which we have stood by through good report and bad report. Had we never to find sums equal to those which the right honourable Gentleman has been called upon to find?
    AN HONOURABLE MEMBER: Never!
    SIR W. HARCOURT: Why, what was the sum which we had to find in 1894? Yet we did not resort to this proposal. We paid off the debt which had been incurred by the present First Lord of the Admiralty. It is true that at times when there were exceptional burdens the Sinking Fund has been suspended to meet the extreme necessity of the hour—that, I think, is a very legitimate transaction. But the permanent reduction of the Sinking Fund is a different thing, and is fatal to the whole system of finance. The Chancellor of the Exchequer asks, Are we to benefit the people of 1902? But what is the Government's policy doing for these people? Every day you are increasing the liabilities of this country to an extent which you cannot measure, and which you are only commencing. You are issuing the scrip which they will have to redeem. It is the men of 1902, it is your posterity, who will have to bear the enormous burdens of these great liabilities which you are every month creating. And while you are creating these prospective liabilities you are cutting off the provision by which they might be made easier to bear. I will not at this time attempt to enter into all the arguments which the right honourable Gentleman has so ingeniously put forward. He might have dispensed with a great part of his speech. He might simply have said, "I want some money, and I will take it out of the fund for the redemption of the Debt." With all respect to the right honourable Gentleman, all the rest of his argument was mere leather and prunella. He was determined not to ask the country to find the money to meet these obligations, which he believes—and, I daresay, believes truly—the country desires should be undertaken. But I remember the right honourable Gentleman the First Lord of the Admiralty on one occasion, when, I think, we sat together in the same Party, paid me the compliment to quote a sentence which I had used in regard to the great expenditure of the year 1878. I ventured to say then that it was a policy of blood and glory— things that in themselves were no doubt admirable, but that if you undertook the obligations you should not "bilk the bill." The present First Lord of the
    1040
    Admiralty quoted my phrase with approbation at that time. But he himself "bilked the bill" as soon as he became Chancellor of the Exchequer. He set the example to the right honourable Gentleman, in whom, I confess, I am disappointed. I was one of those who bad a profound faith in the inflexible virtue of the present Chancellor of the Exchequer. I know his opinions are sound. I know what his convictions are upon this question, just as much as upon bimetallism, in spite of all the trashy finance by which he is beset and surrounded. I regret this lapse of his from virtue. Never was there a greater example of the truth that evil communications corrupt good manners. His lapse is no wonder to me when I see him with, on the one side, the First Lord of the Treasury—whose abilities in all respects I admire, but whose financial opinions I do not share—and on the other side the First Lord of the Admiralty, who, I think, indulged during five years in every financial heresy which it was possible for a man to commit.
    THE FIRST LORD OF THE ADMIRALTY (Mr. G. J. GOSCHEN, St. George's,): The conversion of the Debt?
    SIR W. HARCOURT: I apologise to the right honourable Gentleman. But when a Chancellor of the Exchequer finds himself in sufficient funds to effect a conversion of the Debt I think he might abstain from destroying the provision for redeeming the Debt. Perhaps the right honourable Gentleman thought it so great a feat to accomplish that he ought in some way to neutralise its effect. I deeply regret that this proposal has been made. I know how tempting it is to any man in difficulties to get rid of them by refusing to pay his debts. The right honourable Gentleman seems to have adopted the idea of Sheridan, who said that the worst possible course was to muddle away your income by paying your debts. The right honourable Gentleman has muddled away his income by not redeeming the Debt. I have always held that this provision is one of the greatest sources of strength to the British nation. It gives you credit at home and a character abroad. When we come to discuss this question I shall ask the House to consider which course was taken in 1859

    1041
    by Mr. Gladstone, when he had to meet an exactly similar sum for an exactly' similar purpose. What was the language which he employed on that occasion, and which was reiterated and re-echoed by Mr. Disraeli, who supported him? They treated with scorn the idea that when the British Empire was called upon to make provision against a scare then existing of war with France they should have to resort to extraordinary measures regarding the Debt, and when those passages are recalled to the recollection of the House, I think it will be ashamed of this financial degeneracy. We shall hold ourselves forth to the world at large, that in order to maintain the greatness of our power and to play our part among the nations, we are incapable, we are too weak—I would say too cowardly—to meet the responsibilities which have been cast upon us.
    COLONEL SIR HOWARD VINCENT: I believe the great majority of Members on both sides of the House, especially on this, are delighted with the Budget which has been laid before the Committee. A very much larger deficit was expected than that which has actually occurred, and the manner of dealing with it as a whole will commend itself to the taxpayers of the country. But there are one or two matters to which I should like to invite the attention of the Committee, and especially the consideration of my right honourable Friend the Chancellor of the Exchequer. Of the enormous amount of £91,000,000 which he proposes to raise by taxation, far too large a proportion is raised by direct taxation, instead of indirect taxation. As far as I can make out from the figures, at least £60,500,000 is to come from direct taxation. A proportion of two-thirds of the taxation of the country raised by direct taxation is, I think, excessive, under all the circumstances of the case. My right honourable Friend stated that as there was a great increase in expenditure in recent years, with a further increase probable in years to come, it. was absolutely necessary to discover new productive sources of revenue. I only wish my right honourable Friend had called my honourable Friend and myself into council when he was locking for new sources of
    1042
    revenue. I believe we should have been able to direct his attention to a source of revenue far more satisfactory than any of the sources to which he has referred this evening. There is one matter to which I would invite the attention of My right honourable Friend. I think a large number of the taxpayers of the country will be disappointed that at this time of great prosperity he has not been able to reduce the income tax. An income tax of 8d. in the £ in a time of general peace, and when the outlook in foreign affairs is much more pacific than when it was passed, is far too high. The; income tax, which amounts to £18,000,000 sterling, presses very heavily indeed on many of the trading classes in the country. There can be no question about that. There is, I believe, some truth in the statement which is frequently made as regards the great centres of industry—that not infrequently returns are made on fictitious profits in order to maintain local credit. The income tax was imposed a. hundred years ago entirely for the prosecution of the war with France. It was repealed in 1816, and was not reintroduced until 1842 by Sir Robert Peel, who only proposed it for a limited period, and when it was increased at the time of the Crimean war it was entirely for the prosecution of that war. Therefore, in its foundation and essence, it is a war tax, and in time of peace should be kept as low as possible. If my right honourable Friend, instead of maintaining an income tax of 8d. in the £, producing the enormous amount of £18,000,000, would take off 1d. or 2d. in the £, and raise an equivalent sum on other sources for revenue, it would meet with the approval of the great majority of the trading classes of this country. If he asks how he is to raise a sufficient sum to cover the reduction and to obtain the deficit of £2,000,000, he could easily do it by imposing a. tax of 5 per cent. on all imported foreign manufactured goods. That would produce £5,000,000, and would enable him to take 2d. off the income tax, and obtain the £1,000,000 he asks for. The wine tax will, I think, commend itself to the great majority of Members on both sides. There is one matter in connection with it which, however, I regret. The wine

    1043
    industry is a growing one in Australasia and South. Africa, and it is much to be regretted that, with the Secretary of State for the Colonies by his side, my right honourable Friend did not say that wine imported from British Colonies would be exempt from the increased tax he proposes. I would venture to strongly recommend that course. As regards the extra tax on wine, the figures are interesting. The total value of the wine imported in 1898 was, in round numbers, £6,500,000, both in cask and bottle, the proportion being about half and half. Of this amount, no less than £3,500,000 came from France, and I rejoice that the Chancellor of the Exchequer has levied an additional tax on an article coming from a country which increases almost yearly the duty it imposes on imported British goods. The proposal of the Chancellor of the Exchequer will, in all probability, give Her Majesty's Government that leverage and basis of negotiation so long wanted with the French Government, not only with regard to the reduction of duty, but also the exemption from some of the vexatious regulations which now press so hardly on exporters of British goods. France sends to England no less than £53,000,000 worth of goods, and buys only £19,000,000 worth. That is a very unfair proportion, and I believe this extra tax on the £3,500,000 of wine imported from France will give the Secretary of State for Foreign Affairs and our Ambassador at Paris exactly that power of negotiation so long wanted. Two millions' worth of wine comes from Spain and Portugal, and with Spain we may be able to effect some very advantageous commercial bargains. The quantity of wine coming from the British Colonies is so small, that if it were exempted from the extra duty it would not materially affect the amount which the Chancellor of the Exchequer requires. In 1898 only £2,733 worth of wine was imported from South Africa, and only £112,565 from Australasia, a total of about £115,000. If the Chancellor of the Exchequer will, as I hope, consent to this wine being exempted from this extra taxation, his action will be greatly appreciated in both South Africa and Australasia, and will tend to cement that commericial
    1044
    federation which so many of us so earnestly desire. I have not been able to communicate with the Chancellor of the Exchequer on the subject, and, as it is exceedingly difficult to move an Amendment to a Resolution which has only been read from the Chair, it may be more convenient, instead of moving an Amendment this evening, to move it when the Finance Bill is in Committee, as that is the course which my right honourable Friend desires. In the meantime, I hope he will allow me, if I may respectfully do so, to congratulate him on the manner in which he has provided for the necessities of the country, and to urge him with all the power I can to give the most attentive consideration to the proposal to exempt from extra taxation the small quantity of wine imported from British colonies.
    MR. GOLD (): I must express the very great regret with which I have listened to the remarks of the Chancellor of the Exchequer with regard to the increase of the taxation on wine. I would remind the Committee that the introduction of light wines into this country was greatly facilitated many years ago by Mr. Gladstone, in order to encourage temperance. Prior to 1860, there was scarcely any trade at all in light wines, but at the present moment there is an enormous sale for light wines, imported from France and Germany. They are retailed to the public at a uniform price of a shilling a bottle, and any increase in the duty such as is proposed by the Chancellor of the Exchequer, would render it impossible for those wines to be retailed at their present price, which has induced the public to purchase them. That would be a retrograde step, and one calculated to check a great improvement in the habits of the people, which, I venture to say, has been brought about by the increased use of light wines. There is another point to which I should like to refer. It is whether this is a judicious moment for taxing the produce of a country with which we have lately had, unfortunately, some political differences. It will, I think, rather have the appearance of a desire on our part not to cultivate those very friendly relations which the Treaty of 1860 was meant to bring about. There is only one other point on which

    1045
    I would like to say a word. I feel sure that this increase in the wine duties will not bring the return which the right honourable Gentleman imagines; it will, I fear, check the consumption of these light wines, and the result will be most disappointing. Everything possible should be done to encourage the use of these wines, and it must be borne in mind that it is only of late years that anything like a trade in them has been developed.
    MR. BANBURY (): The right honourable Gentleman the Member for west Monmouthshire told us that the effect of these Resolutions, if carried, would be to reduce the amount which will be set aside for the reduction of the National Debt by something like one-third. But he evidently is not aware, or he must have forgotten, that in 1903 the reduction of interest on Consols effected by the right honourable Gentleman the Member for St. George's, Hanover Square, will take effect, and will give us an annual sum of something like £1,300,000. Therefore, the actual reduction will only be £700,000, except during the next four years, when it will represent the larger amount. The next point which arises is—is it an advantage to do away altogether with the National Debt? I say distinctly that it is not. The National Debt, if it is so large that it presses unduly upon the people, ought, no doubt, to be reduced. But what are the facts with regard to it? In 1815, in round figures, it amounted to £900,000,000, while our population was 15,000,000. At the present moment our National Debt is £634,000,000, while our population is nearly 40,000,000. Therefore it is impossible to say that the National Debt does in any way press hardly upon the people of this country. What good purpose does the National Debt serve? It provides a safe investment for the savings of the people. Undoubtedly the only drawback to my mind to the provision made by the last Chancellor of the Exchequer on this side of the House for reducing the interest on the National Debt was that it caused a rise in second-rate securities. Therefore I hold that, provided the Debt does not press unduly upon the resources of the people, it is an extremely advantageous thing to have a National Debt. The right honourable Gentleman the
    1046
    Member for Bodmin rather contradicted the statement of the Chancellor of the Exchequer that we were putting up the price of Consols against ourselves, and he said we had only to look at the list of good securities to see that their prices had gone up pari passu with that of Consols. He is mistaken there. It is true that that occurred in the year 1896, but since then good securities have fallen some 10 per cent. or 12 per cent., whereas Consols, owing to the large purchases made in the market by the Government, have only fallen about 1 per cent. or 1½ per cent. I believe the highest price was 113, and now they are down to about 111. I am not quite certain what the effect will be of the 5s. duty on foreign and Colonial bonds; but I am inclined to fear that it will inflict a serious blow upon arbitrage business, which is carried on by a comparatively small number of people, but which is a legitimate and important business.
    MR. KEARLEY (): The honourable Member who last spoke need have no apprehension of the National Debt ceasing to exist. I think we are quite right in using our best efforts to reduce it in times of peace, because if a war should break out we should have that Debt largely augmented, and unless we decrease it in peaceful times the burden would become too heavy to bear, irrespective of the increase of population. Of course, we all hope there will be no more war, but at the same time I expect we are also agreed that that hope is not likely to be realised, and therefore it is our duty now to reduce the National Debt as much as possible. I want to say a few words with respect to the tobacco duty. When we considered this question last year, many of us thought that the right honourable Gentleman had made a mistake in reducing the duty on tobacco. He told us it was to be an experiment, and we now know that the result of that experiment has not approximated his estimate.
    THE CHANCELLOR OF THE EXCHEQUER: Yes, it has approximated it.
    MR. KEARLEY: Your estimate has not been reached.
    THE CHANCELLOR OF THE EXCHEQUER: It is only £200,000 short, and that is not much in £10,600,000.
    MR. KEARLEY: Still, we have lost nearly £1,000,000 of revenue, although the right honourable Gentleman thinks that next year it will be made up. I do not agree with him, and I fear he will have to expand his hopes over a much longer period. We objected to it last year, because we felt the reduction was going to benefit nobody whatever, and this year we are, in fact, enabled to point out that it has not materially benefited anybody. The right honourable Gentleman has recently carried on certain investigations, as the result of which he says he is prepared to prove that the public have got the full benefit of this remission. I am prepared to dispute that point with him. He does not appear to be aware of the fact that the tobacco manufacturers throughout the country—in Bristol, London, Dublin, and Liverpool—immediately the duty was reduced met together and formed themselves into a ring, and resolved that tobacco should not be sold below a certain price. The price fixed upon was 3s. 2d. a pound, and at the same time they reduced the discount which they had been in the habit of giving, from 6¼ per cent. to 5 per cent. Prior to this, tobacco had been sold as low as 2s. l1d. per pound. The right honourable Gentleman, in hi6 speech tonight, contended that the consumer was getting the full benefit of the remission, although he admitted it took a long time to percolate through from the manufacturer to the retailer and to the consumer. I venture to say it has not reached there yet. In the case of what are known as "cutting firms" I believe there has been some reduction in the price to the consumer, but let the right honourable Gentleman take his own neighbourhood, and let him have tobacco purchased in the small towns and villages round about, in the public-houses for instance, and I will challenge him to prove that there has been any diminution whatever in the retail price of tobacco. On the contrary, he will find that there has been none. Of course, he is perfectly entitled to 6ay that the consumer is better off in the matter of quantity and quality, and that may be so, because he gets about 14 per cent. more tobacco for his money, whereas he used to get it in the shape of moisture. The right honourable Gentleman mentioned several times that he had reduced the moisture 5 per cent. I do not
    1048
    think that that is quite right. I make it about 14 per cent.
    THE CHANCELLOR OF THE EXCHEQUER: I reduced it. from 35 deg. To 30 deg.
    MR. KEARLEY: That works out as nearly as possible at 14 per cent., so that the consumer gets 14 per cent. more tobacco now in lieu of the water which he got under the old arrangement. But he was perfectly satisfied with the tobacco as he then had it, and I think the initial mistake was in reducing the percentage of moisture. If the right honourable Gentleman had reduced the duty and not the moisture the public-would have got the benefit of every penny, but the reduction of the moisture enabled the manufacturer and retailer to manipulate things in such a way that it became a perfect juggle, and the public could not tell where the benefit came in. I say that the consumer did not get the benefit of the reduction, and never will. The right honourable Gentleman mentioned another point to which I should like to refer. He said there had been a rise in the price of tobacco of from l½d. to 2d. per pound, owing to the war in tobacco-producing countries. May I remind him that that rise had already taken place before he reduced the duty? The conditions in Cuba and elsewhere were thoroughly acute and had been anticipated by merchants and manufacturers long before the remission was made in this House. Another thing. it is impossible to follow up a rise of that description. When a rise takes place in an article through some temporary cause it cannot be followed at once by the merchant and the retailer. Take the case of tea. Does the right honourable Gentleman suggest that the consumers pay the rise at the moment it takes place?
    THE CHANCELLOR OF THE EXCHEQUER: They do.
    MR. KEARLEY: I disagree with the right honourable Gentleman. Of course. if the rise becomes permanent and lasts some six, eight, or 12 months, then the consumer does pay it, for the merchant will raise his prices. I say, however, that at the present moment the rise has not affected the consumer in the slightest

    1049
    degree, and it will not affect him so long as it proceeds from temporary causes. Of course, there has been, among the higher-priced tobaccos, some slight diminution in the retail price. The higher-priced packet tobaccos, which fetch 5d. or 6d. per ounce, have obtained the full advantage, and in some cases even more, of the remission of duty. But the cheaper and lower-priced tobaccos remain to-day at precisely the same figure as they stood at before the remission was made. I think it is a pity that the reduction of duty was made. It has lost a million of revenue, and I am sure that if the right honourable Gentleman could have foreseen what was going to happen he would never have taken that step. It caused a great amount of confusion for a long time after the duty was remitted. I would suggest to him it is well worth considering whether the percentage of moisture should not be replaced at its old figure, because then the consumer might get the full benefit of the reduction of duty.
    MR. BRODIE HOARE (): I think the right honourable Gentleman will find there is an almost unanimous opinion throughout the country that our National Debt in practice plays a very important and permanent part, and if it were to be extinguished too rapidly it would greatly add to the difficulties of trustees and others in finding proper investments. If I understood the right honourable Gentleman aright, he is at present in this position, that his balances were affected at the end of the year by the fact that he was unable to buy a million of Consols when he wanted them.
    THE CHANCELLOR OF THE EXCHEQUER: I said that the National Debt Commissioners were unable to lay their hands upon Consols when they wanted them.
    MR. BRODIE HOARE: Yes; that is what I understood. We have £350,000,000 Consols in the hands of the public, and the Commissioners for the Extinction of the National Debt were unable to buy apparently the trifling sum of a million odd when they wanted it. What does that mean? It means that every time the Chancellor of the Exchequer, or the Commissioners for the Reduction of the National Debt, go
    1050
    into the market, they put up the market for Consols against themselves. In 24 years' time the Chancellor of the Exchequer will be able to pay off these Consols at par. Those who must hold Consols now, and there are many, are obliged to buy them at a constantly increasing price. What is the further result of that? It is that in the great scarcity of these investments municipalities and others are encouraged to indulge in excessive borrowing at rates which are certainly low from the investor's point of view, and they are induced to go into all sorts of outside speculations, which they had much better let alone. If I rightly understand the Chancellor of the Exchequer's figures, they are these. Last year we paid off some £7,000,000 of Debt, and even after a reduction of £2,000,000 in the amount set aside for the service of the Debt, we could pay off between £6,000,000 and £7,000,000 again this year. And, in 1902, there will be £2,000,000 further available for the purpose, so that in the course of the next decade we shall be paying no less than £9,000,000 a year off the National Debt. If the ideas of the right honourable Gentleman the Member for West Monmouthshire were to be carried out. we should in a few years hence be putting aside £25,000,000 for the service of the Debt, and devoting £16,000,000 of it to reduction of Debt. Surely no man of business, nobody in his senses, would ever dream of putting taxation upon the people with a view of paying off the Debt within an early period at the rate of something like £16,000,000 a year. I only rose to say that I am quite sure the Chancellor of the Exchequer, in what he has done in this respect, will receive the most cordial support of most of us who have business east of Temple Bar, and I believe he will also have a like support generally throughout the country.
    MR. BROADHURST (): I fear that the hard-workers of this country are being made to suffer by the abstention of the Chancellor of the Exchequer from certain personal indulgences. If the right honourable Gentleman were a tobacco smoker he would understand more thoroughly than he does now how useless to the poor smoker has the remission of taxation on tobacco, made last year, proved. In the Debates last year

    1051
    on this question I told the right honourable Gentleman that the half-ounce men—the very ones who should be benefited—would receive not an atom of advantage from the remission. That has been proved to be absolutely correct. The name of the Chancellor of the Exchequer is naturally a popular one in many places, and, consequently, there is some temptation to make use of it. I have used it at nearly every meeting I have addressed since last Budget Day. I have asked my audiences to tell me how much they have benefited by the Chancellor of the Exchequer's reduction of the tobacco duty, and in no single case have I found anyone who has in the least degree benefited. It is perfectly true, as the right honourable Gentleman stated, that persons who buy expensive tobaccos, who buy it, say, in the pound-tin, have in many cases obtained a reduction of 2d., 3d., or even 4d., but it is the poor worker, it is the labourer, who should have the first consideration, and not the man who can afford to pay 6s. or 8s. for a pound of tobacco. The Chancellor of the Exchequer having, I expect, felt some misgivings as to the effect of the legislation on this matter, told us that from information which he had been able to obtain there had been a reduction in the price of packet-tobacco. I buy tobacco in every form, in packets, in tins, and even by the half-ounce, and, except in the tin form—the higher-priced tobacco—I have found no reduction. He went on further to fortify his position by saying he had learnt that a large part of the packet-tobacco trade was done amongst the working classes. But what happens in regard to packet-tobacco? If the right honourable Gentleman had been a smoker he would have known that packet-tobaccos are not popular with the working-classes, for the reason that a considerable percentage of the tobacco comes out in the form of dry dust. Therefore the man with a small income seeks to avoid these tobaccos, because the only way he can deal with the dry dust is to take it home and put it in a damp place, or lay a wet brick upon it, or put even a potato in the centre, in order to give it the necessary moisture. Therefore, when the right honourable Gentleman extols the packet-tobaccos, and advises working-men to buy them, he certainly is not benefiting them. Again, I say that if he
    1052
    had only possessed practical knowledge on this question, he would not have fallen into this error, and I trust that before he makes his next financial statement he will, by experience and demonstration, have made himself thoroughly acquainted with the ins and outs of this great and important subject. Having shown that I was right last year, and he was entirely wrong, I think I am entitled now to expect him to pay some attention to my admonitions. May I say one word with regard to the wine duties? I cannot imagine a more unhappy choice of an article upon which to levy increased taxation than still wines and cheap wines. The very object of Mr. Gladstone when he took off the duties on these wines was to encourage the consumption in this country of light drinks as against heavy and intoxicating drinks. Now the Chancellor of the Exchequer has reversed that policy. He is more heavily taxing the very wines which he ought, if anything, to have relieved, and I do suggest that if he had particularly desired to get more money from the wine trade he should have increased the duty upon the heavy and more expensive classes of wine. He should not have interfered with the still hocks and other light wines which, in the last few years, have come to be largely used by invalids and persons bordering upon being permanent invalids. There is a class of people who like to have wine upon their table; it does not matter what it is, but the cheaper it is the better, so long as it is called wine; they like to have it, in fact, whether it is good or not. Mr. Gladstone, in his great financial days, saw the desirability of that and encouraged it, but now the Chancellor of the Exchequer of to-day is discouraging this light drink which is so good for the community, and laying a tax upon it, while the heavier drinks of the country are left untouched. I have no doubt that the brewing trade and the whisky trade of the country will recognise in this Budget matters very favourable to their particular interests and shaped to encourage the development of their particular trades. Now, if there is an opportunity—I don't know whether there will be—of voting against the increased taxation on the light still wines, I shall vote against that increased taxation. I won't go so far as to vote against in-

    1053
    creased taxation on all wines, because there are other classes of wines which I think might fairly bear a considerable increase of taxation; but this class of wine ought most certainly to be left untouched by the Chancellor of the Exchequer. Now, may I ask the Chancellor of the Exchequer a question? Is this increased stamp duty on letters of allotment of a share or part of a share in a company—is this increased stamp duty to be on every allotment, however small the amount?
    THE CHANCELLOR OF THE EXCHEQUER: No; I made an omission there. I ought to have stated that the 1d. stamp would be still retained where the allotment was under £5. The stamp of 6d. will be on allotments over £5.
    MR. BROADHURST: That has met my objection to a very large extent. But will the 6d. stamp be for any amount over £5?
    THE CHANCELLOR OF THE EXCHEQUER: Yes, the ordinary contract stamp of 6d. on all allotments over £5.
    MR. BROADHURST: I think there ought to be an increase in the allotment stamp duty on all sums above £500, and a further increase on all sums above £1,000. Why should the Chancellor of the Exchequer not adopt a graduated scale in regard to this matter of stamps, as he did so sensibly, as well as so satisfactorily, with regard to the smaller incomes which were affected by the income tax. I think that these are matters of great interest, and which I hope the Chancellor of the Exchequer will be able to make an improvement upon them before we get through with the Finance Bill. Now, while some of the well-to-do men, some of the rich bankers and others who come as they describe themselves, from "east o' Temple Bar," seem to be highly delighted with this Budget, there are many people in the country who will be very disappointed with it. We have an enormous revenue, amounting to £122,000,000, if I understand the Chancellor of the Exchequer right, and there is not one farthing of reduction on the taxation of the poor. Of course, his answer will be that he has to meet current expenditure; but current expen-
    1054
    diture is the result of the Government policy, and therefore the Government which made the policy and created the demands have naturally to pay for these demands. But, then, we find fault with the policy that has led to these enormous demands. There is a poor agricultural community, and what may be called a poor river-side community, in our country, and these are the classes of the people who receive no benefit whatever, or at any rate very little benefit, from our national prosperity. All the benefit they have ever received is in cheap food. These people's wages are very much to-day what they were 30 years ago—there is practically no difference; and they are left struggling on from year to year and from generation to generation without a single benefit from the Budgets of the Chancellor of the Exchequer. I mean to say that the articles of every-day consumption, such as tea, coffee, cocoa, and other little articles which are so necessary for the domestic economy of the poor man's home, remain exactly where they have been for years. With all this enormous, this unprecedented prosperity, the poor are to be left without any benefit whatever. I do think that there will be widespread disappointment with the Chancellor's statement when that statement conies to be read by the people of our country to-morrow. I shall certainly, if no other Member of the House does it, take the opportunity to move Amendments in regard to the tea duties and one or two other subjects of taxation. When we get to the Committee stage I shall take the sense of the House as to the desirability of taking at least a part of the duty off tea, which would benefit those most entitled to benefit, and would not, in my opinion, lead to any great deficiency in the income of the Chancellor of the Exchequer.
    SIR E. ASHMEAD -BARTLETT (): The honourable Gentleman who has just sat down has made some very amusing and interesting statements. He made an attack on the Chancellor of the Exchequer with regard to the non-reduction of the price of tobacco in small quantities. His complaint should be addressed with more correctness to some of the great tobacco dealers on his own side of the House, rather than to the

    1055
    Chancellor of the Exchequer. In regard to what he said as to the duties on light wines, will the honourable Gentleman contend that the working classes drink these light wines?
    MR. BROADHURST: No.
    SIR E. ASHMEAD-BARTLETT: The honourable Gentleman was speaking ostensibly on behalf of the working classes. I am quite certain that very few of the working men drink these light wines, and if they ever did so, they would not drink them a second time. The second part of the speech of the honourable Gentleman consisted of the usual political clap-trap. He described the increase of the expenditure of the country as due to the policy of the Government. The honourable Gentleman ought to know well that that expenditure is not due to the policy of Her Majesty's Government, but has been incurred for national defences, and that these national defences have been rendered necessary not by the policy of the Government, but by the action of Foreign Powers. Ever since 1893 this country has had to deal with a great conspiracy against our Empire. Why, honourable Gentlemen on the other side of the House are never tired of holding out instances in which the Government has not sufficiently safe-guarded the interests of the country; and I daresay we shall continue to have politicians denouncing the Government because they have not been strong enough in their dealings with foreign countries in such cases as Siam, Madagascar, Tunis, and China. The honourable Gentleman should remember how, for the past five years, British interests have been attacked, especially by two Great Powers in Asia, in West Africa, in China, and in South Africa, and how with great difficulty that organised conspiracy has been checked, and has only been checked because, by a large expenditure, this country has at last created a great and efficient Fleet. Sir, the right honourable Gentleman the Member for West Monmouth, whose re-appearance in this House is so warmly welcomed by every Member, indulged his humour by inventing rather a catching phrase—"bilking the bill. "The right honourable Gentleman has been for many years a leading member of a great Party in the
    1056
    State, and he has been responsible for the conduct of that Party, which has done something worse than "bilking the bill"—that is, destroying or bilking the results of great national efforts. The right honourable Gentleman and his Party were responsible for one of the greatest efforts of the last two generations, the Crimean War, which cost £100,000,000 and the sacrifice of nearly 50,000 British lives. They were responsible for that war, first by their policy, and for entering upon it before the country was prepared for a great war; and secondly for their weakness in the way they carried it on. Not only did they cause that war, but they neglected their duty after it, and then they deliberately threw away all the results of it. The policy of the Liberal Party, before and after the Crimean War, was worse than "bilking the bill." It is made a matter of complaint that the present Government has in two years increased the expenditure of the country by something like £8,000,000 or £10,000,000. But, Sir, that £8,000,000 or £10,000,000 has saved us from one great war, the cost of which would have been something like £300,000,000 or £400,000,000, and will, if the Government are courageous, in all probability save us within the next few months from another great war, the cost of which would probably be much greater. I believe that by that expenditure of £10,000,000 this country has been saved from an outlay of at least £500,000,000, and from a loss of human life and suffering simply incalculable. But what about the actual operation of the Budget? I listened with great interest to the speeches of the honourable Member for Peckham, and the honourable Member for Hampstead, both of whom the Member for Nottingham would describe as hailing from "east of Temple Bar," and are well qualified to speak on finance. Both of these honourable Gentlemen dealt with the question of the National Debt in a practical and sensible manner. I believe with them that the wiping out of the National Debt would be one of the greatest misfortunes that could happen to the country. I hold that the National Debt is, as it at present stands, a moderate debt, and it is an immense boon to the country. The National Debt of France is more than double our Debt.

    1057
    The honourable Gentleman who has just sat down spoke of the enormous burdens entailed on this country by rasing a revenue of £120,000,000. Why, Sir, the French pay in taxation of all kinds £145,000,000. Where should we find a safe investment, or, as the honourable Gentleman for Hampstead calls it, an easily realisable investment, if we had not a National Debt? There would be no really secure, solid, permanent investments for those who are in the position of trustees, and those who are not capable of choosing sound investments for themselves, if there were no Consols. I noticed that the Chancellor of the Exchequer and the right honourable Gentleman the Member for West Monmouth both placed considerable hopes in the results of the coming Peace Conference. I trust these hopes will be realised. I would have preferred to see some tangible proof of a peaceful policy given by the Tsar, who is the author of the Peace Conference. I would have liked to have seen the £9,000,000 given last year by the Tsar of Russia to his fleet dispensed with; and I would have liked to have seen the enormous warlike preparations going on all over the Russian Empire diminished. It would have been more hopeful if, on the eve of that Conference, its Imperial author had not by force destroyed the free Constitution of Finland, in order to further increase his enormous army. I trust these hopes in regard to the results of the Peace Conference will not prove illusive. In the long run the English people will be convinced that the best way to avoid war, and to conserve our great Imperial interests and the interests of the human kind all over the world in liberty and progress, is to take up the position which the Government have taken—that of "the strong man armed who holds his house in safety.' I beg to offer my hearty congratulations to the Chancellor of the Exchequer on the admirable financial statement he has made.
    MR. J. A. PEASE (): I rise to protest against tampering with the Sinking Fund which the Government proposes. It seems to me that the supporters of the Government are driven to desperate straits when the honourable Member for Central Sheffield has to rise in his place and to contrast the "bilking of the Bill" with
    1058
    the worst things that have happened in the past. He has been alluding to the responsibility of the Liberal Party for events prior to 1857. There is not a single Member of this House who was here in 1857, and to dwell on what happened before that year is a somewhat far-fetched reason for supporting the present Government in the policy just announced. When the Chancellor of the Exchequer was alluding to the reduction of the Sinking Fund from £25,000,000 to £23,000,000, but in favour of which we have heard nothing, I thought I had heard some time ago utterances from the Chancellor of the Exchequer on the principles of sound finance which would have prevented him from ever adopting the policy which he has now suggested to the House. I have been looking back to the Budget Speech made by him in 1896, in which he was alluding, as he did this afternoon, to the enormous amount of money paid in recent years in liquidating our national liabilities. He then said—
    "We have paid off in 39 years £190,000,000 of debt, and £100,000,000 of that has been paid off in the last 13 years. Some may think that our efforts have been wasted, and that we should have done better if we had allowed the money to fructify. as it is said, in the pocket of the taxpayer. That is not my view."
    THE CHANCELLOR OF THE EXCHEQUER: I said so to-night.
    MR. J. A. PEASE: He then went on—
    "By this self-denying course the Parliament and the people of this country have raised up a reserve fund of incalculable importance—a reserve fund which, if the time of need should come when this country should again have to fight for its life, would enable us, without imposing a single extra penny of taxation, to raise a couple of hundred millions for the defence of the country, and without imposing, either, an atom more debt upon the people of that day than our predecessors bore without a murmur in 1857."
    THE CHANCELLOR OF THE EXCHEQUER: I maintain that policy.
    MR. J. A. PEASE: The right honourable Gentleman continued—
    "That is a thing which, I think, this country may be proud of. It is a source of incalculable strength to this country, and, although it may sometimes be necessary, even in time of peace, as it was necessary in 1885, when I was last responsible for the finances of the country, to postpone temporarily the operation of the

    1059
    Sinking Fund, yet I trust that Parliament will never permanently depart from the wise and prudent policy in this matter which it has hitherto pursued."
    I think that Parliament, if it reduces the Sinking Fund from £25,000,000 to £23,000,000, will be departing from the policy which every Parliament has adopted in recent years. Of course, the Chancellor of the Exchequer desires to justify his attitude, but I am perfectly certain that in 1897 the Chancellor of the Exchequer had no more idea of justifying a reduction of the Sinking Fund from £25,000,000 to £23,000,000 than he even had last year. Now, the First Lord of the Admiralty has also repudiated such a policy as that which has been adopted by the present Chancellor of the Exchequer. In 1887, when he himself was reducing the Sinking Fund from £28,000,000 to £25,000,000, he did it under exceptional circumstances, and he stated what the exceptional circumstances were. He said—
    "The Sinking Funds have had to be suspended, and they will be suspended again, so surely as anything occurs which strains in the slightest degree the resources of the country. I admit the plausibility of the argument—that it is better you should suspend the Sinking Fund when there is distress, rather than that you should impose additional taxation. But I am not satisfied that the argument is sound. I think it is a most wholesome restraint upon any expeditious or costly undertakings that it should be necessary to impose taxation, and that you should not be able to cut the knot simply by suspending the Sinking Fund."
    What has happened in the meantime has been that our expenditure has increased in the last four years under Her Majesty's Government by £20,000,000, and this is largely due in connection with costly expeditions, and costly undertakings, but not at all to times of distress. The First Lord of the Admiralty in 1877 proclaimed that the suspension of the Sinking Fund could be only justified by exceptional causes, and yet he is a party to tampering with the Sinking Fund and "bilking the bill" in the present times of exceptional prosperity. I think I was fully justified in the action I took last year in moving that the reduction of taxation should take place on tea rather than on tobacco. We have heard to-day a good deal about tobacco, and, personally, I am unconvinced by the speech of the Chancellor of the Exchequer that any real bene-
    1060
    fit has been given to the poorer classes of the country by the reduction made last year in the tobacco duty. I have endeavoured to obtain information from all over the country as to the prices of the quarter ounce, half ounce, or ounce packages of tobacco which the working classes buy in very large quantities. But I certainly fail to find that there has been any reduction in the price of these small quantities. It is all very well for the Chancellor of the Exchequer to allude to the reduction of tobacco sold per pound, but the working people do not buy their tobacco by the pound; they buy it in quarter ounce, half ounce, and one or two ounce packets. The Chancellor of the Exchequer stated that he was glad that he could not be charged, at any rate, with the increase of 2d. in the pound in the price of tea. No; but what he did do was to refuse the desire of those on this side of the House last year to reduce the tax on tea. Had he so reduced it then, the people, instead of paying 2d. extra per pound for their tea, would not have paid any increase at all. I regret very much that the Chancellor of the Exchequer has not seen his way to reduce taxation. I regret very much that, at a time of unexampled prosperity in the country, is the time that he has thought it desirable to tamper with the Sinking Fund, which, I am sure, will make his duty still more difficult when he comes to find the money for our constantly increasing expenditure.
    Upon the return of the Chairman after the usual interval,
    MR. MARKS (): I think it would be interesting to know—and it is to be hoped that in the course of this evening's Debate we may learn—to what, if to any, extent the £700,000 increase upon the cost of the Postal Service is attributable to the present system of management of the Post Office Savings Banks. Those banks have on deposit something like £150,000,000 to £160,000,000, which has to be invested in Consols at the market price, which to-day is somewhere about III. The depositors receive interest at the rate of 2½J per cent., a rate which is barely obtainable on Consols at the present price. This is an important item, in

    1061
    view of the fact that the deposits are increasing at the rate of something like £9,000,000 a year, and it is rather to investments from this quarter than to purchases by ordinary investors that the continued rise in prices may be attributed. These Savings Banks, strangely enough, have no coin reserve. In time of danger, or what is equivalent, in times of panic, any run upon them, and any great demand for payment out must inevitably result in a sale of Consols, and that sale must necessarily take place at an inopportune time, and upon disadvantageous terms. The only alternative would be the borrowing of money on the security of these Consols, and I need scarcely say that in times of panic even upon Consols money could not be borrowed, except at a much higher rate than the Consols themselves return. In the estimate we have before us for the coming year it seems that the expenditure in connection with the Post Office is put down at £8,553,000, as against £8,200,000 for the last year, so that this increase of £700,000 is not a mere accident and it is not a mere temporary increase, but part of it at least may be regarded as more or less of a permanent nature. Under these circumstances, I do think it is important that we should learn in the course of this Debate to what extent the increase is attributable to the present system in connection with the Post Office Savings Bank deposits. I would also call the attention of the Committee to the fact that while deposits made in the Savings Banks are being invested in Consols at III, so far as I have been able to learn, no preparation is being made for the inevitable time 24 years hence when these Consols will have a value of 11 per per cent. less than we paid for them. I take it that the Post Office Savings Banks, whilst they were designed to aid and encourage thrift, were not intended to enable people to obtain a remunerative rate of interest at the expense of the nation at large. I should like to say one word with reference to the proposed new stamp duties. To the proposed quarter per cent. duty upon the nominal value of foreign securities, I anticipate that there will be very strong objection in the City, particularly among the "arbitrage" dealers. The Chancellor of the Exchequer did not say
    1062
    bonds and he did not say shares. Therefore, assuming that it is to extend to all foreign securities, I should judge that this would bring in a very much higher revenue than that which he has estimated. It is well within the knowledge of those who understand "arbitrage" dealings in foreign securities that not unfrequently a turn of one-eighth or one-sixteenth per cent. is considered a very fair turn, but if that is to be wiped out by a quarter per cent. stamp duty, obviously great difficulties will be created, and the profits on such operations will be wiped out. With regard to the proposed duty upon companies' capital, I foresee no objection, and I do not think that any objection will be urged against the proposed duty on allotment letters, though I would suggest that the 6d. stamp on the latter might be further increased on amounts beyond £500. If it could be done, I should like the Id. stamp on allotment letters to continue up to £5.
    SIR H. FOWLER: The right honourable Gentleman said that the Id. stamp was to continue up to £5.
    MR. MARKS: Yes, Sir, but the 6d. stamp is to serve for anything beyond £5. The suggestion I should make is that beyond £500 the stamp duty might be even further increased. The Chancellor of the Exchequer expressed the hope that by increasing the capital duty of the companies, and by increasing the stamps on allotment letters, something might be done to check over-capitalisation. I do not, however, share his hope in that respect, for whatever increases the expense of forming and floating companies must tend to increase their capital. These expenses are necessarily paid out of capital in one way or another. With respect to what has fallen from one or two honourable Gentlemen opposite with regard to the action of the Chancellor of the Exchequer on the subject of the Sinking Fund and terminable annuities I have only this word to say. Those honourable Gentlemen do not dispute the necessity of raising the revenue which by this Resolution will be raised. They do not dispute that the necessity has arisen to provide the means to defray the expenses incurred in connection with our national

    1063
    defences. They must be well aware that one cannot make omelets without breaking eggs. They are loud enough in their denunciation of the present proposals, but so far I have not heard any alternative proposal put forward for meeting these admitted necessities, and, therefore, I am rather forced to the conclusion that these criticisms are inspired less by a feeling of indignation at outraged financial principles than by a feeling of disappointment that the Budget proposals, which it was predicted would furnish a valuable political cry in the country, have failed to realise their expectations in that direction. If the arguments we have heard to-night are the best that can be brought against the Budget proposals, I, for one, venture to believe that the Budget will receive not only the support of this House, but that it will receive the cordial endorsement of the public at large.
    MR. W. H. HOLLAND (): I should like to take this opportunity to associate myself with that large and important band of critics, by no means confined to this side of the House, who are united in condemning the proposals of the Chancellor of the Exchequer this afternoon. I must confess myself that I am very much disappointed with the Budget proposals put before us. Acknowledging, as I do, the very high financial reputation of the Chancellor of the Exchequer, I think it was only reasonable to expect that something better might be brought forward than this tampering with the Sinking Fund. If it is impossible to pay our way under highly prosperous circumstances, I should like to know under what circumstances are we likely to pay our way? Twenty-five years ago, or thereabouts, the sum of £28,000,000 was fixed as reasonable for the service of this Debt, but during the period which has elapsed since that Sinking Fund was founded, I think we must admit that the country has increased enormously in financial strength, wealth, and resources; and if, as a nation, we could afford to find £28,000,000 a quarter of a century ago for this particular service, it is indeed very hard to justify the position which is taken up to-day by the Chancellor of the Exchequer when he declares that £25,000,000 is too much,
    1064
    and that it must be reduced to £23,000,000. If we were to take the present income tax assessment, and compare it with that of a quarter of a century ago, it would indicate that £38,000,000 to-day would involve us in no more sacrifice than did £28,000,000 then. I think further that it is a very dangerous innovation indeed to reduce the amount set apart for this particular task in proportion as the Debt itself is reduced. On that principle how can you ever extinguish a debt? I think it is clearly the best course to take to maintain the contribution in times of peace. Then we have something to fall back upon in times of emergency. If this is done, then our financial position will become strong indeed, and we shall be in a position to face any eventualities which may lie before us. If the same ingenuity had been exercised by the Chancellor of the Exchequer during the last few years in avoiding expenditure as has been exercised to-day by the right honourable Gentleman in evading liabilities on account of debt, our position to-day would have been much more hopeful than it is. We have heard from the Chancellor of the Exchequer that our present national expenditure must not be regarded as extraordinary, and not likely to recur, but rather as our normal expenditure. Now, I think that that is a very serious statement to be made by the Chancellor of the Exchequer. We all of us are very wishful that there may be some practical and useful results from the forthcoming Peace Conference; but I am bound to say that that expression of opinion from the Chancellor of the Exchequer has by no means a hopeful ring about it. I think, on the contrary, it was much more hopeful the other day when the First Lord of the Admiralty made his annual statement, for he indicated pretty clearly that although the amount which he asked the House of Commons to provide was exceedingly large, yet it was capable of revision if other countries would themselves also reduce their naval outlay. I think that was a hopeful position for the First Lord of the Admiralty to take up, but there is no such hope about the announcement made by the Chancellor of the Exchequer this afternoon when he states that the present enormous expenditure is not extraordinary, but is an

    1065
    expenditure which may be regarded as normal. I noticed that there was some reference to the death duties this afternoon, and two statements in regard to them were brought before the House, to which I should like to refer. One of them indicated that in the opinion of the Chancellor of the Exchequer the proceeds of these duties during the next year would be less than during the last year. That is an important statement for the Chancellor of the Exchequer to make. Another statement which he made was that the falling off which had occurred during the last year was most conspicuous in large estates. I hope that does not suggest that in the case of the largest estates there is the most evasion going on. I was much edified, as other Members were, by the remarks of the honourable and gallant Member for Sheffield. I observe that in his criticism the chief sin which he attributed to the Chancellor of the Exchequer was that he had not called him in so that he might have had advised him as to what should have been done in the matter of duties. It is lucky, I think, that he did not, because if the honourable and gallant Member had been called in to the assistance of the Chancellor o f the Exchequer I think we should have had "confusion worse confounded." I notice that the honourable and gallant Member was delighted that there would be an increase in the wine duties. Now, what was the reason why he was so delighted? It was because in his opinion these duties would hit France. Now, I entirely dissent from the views of the honourable and gallant Member for Sheffield in this respect. I think, on the contrary, that when these duties are imposed they will not hit France, but will hit us here in this country who consume the wines. I am sure it cannot have passed out of the recollection of the honourable and gallant Member for Sheffield what was the effect when last the duties were increased on sparkling wines—I suppose on that occasion he would say that the raising of those duties was a blow levelled at France. My recollection of the operation of that increase is that the wine lists of all the hotels in the country were increased, and instead of paying 10s. a, bottle for champagne you had to pay 11s. or 12s. That does not look much like hitting
    1066
    France, but it is hitting those who consume the wines in this country, and the more wine they consume the more heavily they are hit. I do not wish to express any opinion now as to the merits or demerits of this kind of taxation. It may be defended I know on many grounds, but I have heard of none so curious as in the United States, where the new beer duties were justified on the ground that unless a man drank a lot he would never feel them, and that by the time he had drunk a lot he would be in such a. condition) that he wouldn't care what the duties were. I observe that the honourable and gallant Member for Sheffield, if he had been called in by the Chancellor of the Exchequer would have proposed instead a 5 per cent. duty on manufactured goods. I must confess that I think the honourable and gallant Member will have a very long time to wait before he can induce any Chancellor of the Exchequer to agree to such a proposal. So far as I have been able to judge, the present Chancellor of the Exchequer is as sound in regard to Free Trade as any previous Chancellor of the Exchequer. Such proposals as those indicated by the honourable and gallant Member for Sheffield would of course be purely protective. And protection, I think, will never meet with favour at the hands of the present Chancellor of the Exchequer. The duties which he proposes are, on the contrary, not protective in any sense, but are solely for the purposes of revenue.
    COLONEL MILWAED (): I should like, if I may be allowed to do so, to offer my hearty congratulations to the Chancellor of the Exchequer for the extreme skill with which he has extricated the Government from a very difficult position. I do not say that the Chancellor of the Exchequer is responsible for this expenditure, but I do say that he has shown extreme skill in the proposals which he has made to meet it. I myself have never been an advocate of panic naval expenditure. I have always thought that two circumstances have been often forgotten, and they are that this country is able far more quickly than any other country to build ships and equip them in time of war: and, secondly, we should also remember that if this country met with disaster, we are able probably to

    1067
    build ships quicker than any two countries could destroy them, because it must be remembered that, even if we were involved in war, I presume that our ships would not be destroyed without inflicting some considerable damage. Holding the views I do, I still think that we have every reason to congratulate ourselves upon the state of our preparedness and the strength of our Navy during the September of last year. Upon that the country was united, and we came out of that danger with honour, and I do not think anyone in this House will deny that the great expenditure which we have incurred on our national defences is a matter of very great and sound economy. I look forward with great interest to the Treasury Minute which will appear to-morrow morning upon the subject of the proposed changes in regard to the terminable annuities. I did not exactly gather how that question affects the Budget now before the House, or whether the Chancellor of the Exchequer is looking forward really to something which would occur in the future. But with reference to the suspension of a part of the Sinking Fund, I am heartily in accord with the Chancellor of the Exchequer. Now, there are certain circumstances which must be remembered in connection with that. First of all, when the sum of £25,000,000 a year was set aside for the payment of interest and Sinking Fund on the National Debt, that Debt was very much larger than it is now, and the interest also was very much larger than it is now. We must remember that during the last four years we have paid over £29,000,000 in liquidation of that debt. Therefore, it is quite reasonable that, as the Debt has diminished, we should diminish the sum which we pay off year by year. The figure which I quoted, mentioned by the Chancellor of the Exchequer, was, that out of the £25,000,000 at present set aside for the payment of interest and the Sinking Fund £17,264,000 is for interest and management of the Debt, and £7,736,000 for the reduction of the Debt. Then there are certain other circumstances which must be remembered. First of all, we pay at the rate of £111 for every £100 we buy; secondly, the amount of Consols which is available for other purposes is steadily diminishing year by year. According to the Chancellor of
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    the Exchequer the amount of the Debt held by the public is now £358,000,000. Now, bankers, insurance companies, and foreigners are always trying to obtain these Consols, which are the readiest and safest mode of investment. Now, the smallness of the amount on offer places our merchants and the public generally at a very great disadvantage. Just before the commencement of this sitting a Member of this House, who is a banker, told me that so great is the difficulty of obtaining Consols at the present moment that he was perfectly certain that if he wished to buy a quarter of a million of Consols it would force the price up 1 per cent. Under these circumstances it does seem to me to be foolish to be perpetually buying back the Debt at a great premium year by year; and when questions of this kind arise and the country is in some difficulty, it is a wise and sound policy to reduce to a certain extent the amount of the Sinking Fund. Personally, I confess that I should have had a little more courage than the Chancellor of the Exchequer has displayed, and I should have raised the whole £3,000,000 while I was about it by attacking the Sinking Fund. I am not quite so sure that I approve so fully the other smaller economies which the Chancellor of the Exchequer has resorted to. I do not know what the effect will be of the quarter per cent. duty on foreign bonds. But I do not. think that the effect of raising the duty on the issues of companies from 2s. to 5s. per £100 has been quite realised by the right honourable Gentleman the Chancellor of the Exchequer. I quite admit that so far as bogus companies are concerned I should like to see the duty raised to £5; but the right honourable Gentleman is aware that there is going on in this country at the present time the conversion of private firms into private limited companies, principally for family reasons, and I do think that such conversions will be very hardly hit by this raising of the duty from 2s. to 5s. per £100. I am not speaking of public companies, but private concerns which are being turned into private companies for the purpose of providing for the families of the proprietors. I think if the right honourable Gentleman enquires he will find that it is really a thing which tends to

    1069
    the very great advantage of the country. It is not a question of a private individual giving up his interest in a concern, but merely of becoming directors in a concern in which they are interested. For a company the capital of which does not exceed £100,000 the Chancellor of the Exchequer will receive instead of £100, £250, and I think that that is a very heavy sum to pay for the privilege of turning a private concern into a private company. With regard to the increase of the wine duties, of course, if that is intended for the purpose of bringing some pressure to bear upon France in our commercial interest, I should heartily approve of it. We have far too few means of bringing pressure to bear upon her. We are a very large customer of hers, and she is a small customer of ours, and it is quite possible that occasions may arise in the future when it may be necessary to reduce these duties again in our mutual interests. I have to express my regret that there are two omissions from the Budget. One is, that there has been no reduction in the rating of the tithes of the clergy. This matter has been brought up on one or two occasions, once two years ago; and on that occasion the right honourable Gentleman the Chancellor of the Exchequer told us that we must await the Report of the! Taxation Committee. Who had a Debate upon the subject last session, and at the' end of that Debate, in deference to some advice which I received from the honourable Gentleman the Member for the Oxford University, I withdrew my Motion, but such was the feeling in the House in favour of it that the honourable Gentleman the Member for Northampton insisted upon dividing the House in favour of the doctrine of reducing the rating of our clergy. I am free to admit that the honourable Gentleman was followed into the Lobby by a very small number, but when you find the honourable Member for Northampton telling in favour of a reduction of taxation of the clergy, it is a matter to be considered. But since then an interim Report has been issued by the Committee, and it speaks in very strong terms of this question. I doubt very much whether you would find any question in any Report of any Committee more strongly dealt with than this. But as the right honourable Gentleman has said, his action
    1070
    on that matter must depend upon the Report, and I hope that the very small amount that is required for that purpose will be forthcoming. There is another question in which the right honourable Gentleman the Chancellor of the Exchequer is not in agreement with me, and that is the surtax on rum imported from the West Indies; I think it does behave us to be generous where we can to the West Indies, and if we can meet the views of the West Indies in this respect, I shall be grateful. I conclusion, I congratulate the Government upon their Budget.
    SIR S. MONTAGU (): I cannot agree with the right honourable Gentleman the Chancellor of the Exchequer in the main feature of his Budget, which is the reduction of the Sinking Fund. It is a process which cannot be justified at the present time. If we are not to pay off our debts in such times of peace and prosperity as these, when shall we ever pay them off? It is not what is called Conservative finance, and I am absolutely astonished that so eminent a financier as the right honourable Gentleman should have taken refuge in such means as these, which can only be justified in times of war, or when we have incurred a very heavy permanent expenditure. The difficulty which has been raised by himself and other Members of the House about paying off Consols at £10 or £11 premium could easily have been avoided in various ways. Two and a half per cent. Consols are 103½, and the existing floating debt could have been reduced and even entirely extinguished. There is also the proposal of the Chancellor of the Exchequer to found a Colonial Fund with the guarantee of this Government, and that would give an opportunity to him of taking up that fund. The Bank of England hold a great number of Consols, and they would be glad to convert them on reasonable terms into terminable securities; then, again, the Post Office Savings Bank could have their investments extended to other securities; they might be permitted to buy Crown Colonial Loans and London County Council Stock, and by that means a large amount of Consols would be left free to be paid off, and even if the Government bought them

    1071
    at a premium of 10 or 11, though one Department of the Government would lose, another, the Post Office, would gain. And as the alternative of that, the Chancellor of the Exchequer might have found other sources out of which to raise the small amount he requires in a far more satisfactory manner. There, for instance, are ground values which he might have taxed, and he also very properly might have largely raised the charge for the licenses for public houses. There are a very great number of tied houses, and why should they not pay a heavy licence for their privileges. I think the right honourable Gentleman is quite right to impose the stamp duty on bonds and shares payable to bearer when they are issued out of the country. I have advocated such a duty for years and years, but nothing has been done until the present time in that respect. It seems to me to be perfectly monstrous that hundreds of pounds of securities should be sent here and negotiated here free from duty, and that the same securities issued here should be subjected to a heavy stamp. One or two honourable Gentlemen have raised the question of whether such a course as is proposed would interfere with the dealing of stocks and shares as between one country and another. Now, I know a great deal about that, and I say that it will make no difference whatever. Germany has raised the duty from 4s. to 10s. on bonds sent over there for negotiation, and France has raised it from 3s. to 10s., and there is no complaint whatever. That dealing in bonds and shares between one country and another is not in any way hindered provided the stamp duty is not so high as to be to our disadvantage. If we keep our duty below or not higher than that of other countries we cannot interfere with trade. I have been advocating that this source of income should be tapped, and I hope, now that the right honourable Gentleman has availed himself of it, that the result will be most satisfactory. As the stamp is a, final one, of course you naturally expect more in the first and second years than later on. The First Lord of the Admiralty tried to secure a revenue from these securities by placing a stamp duty of 1s. per cent. upon them some years ago; that was a most inconvenient way of trying to raise revenue, besides a great many shares were held back. Dealers would hold
    1072
    back their shares and borrow stock at interest, and thus avoid the stamp altogether; then there was an option to commute this 1s. a year by a payment of 10s. per cent., but that was not availed of, because everybody thought that he could escape with 1s. duty. I am glad that the right honourable Gentleman has been content with a 5s. duty, as I have always advocated, because a 10s. stamp might operate against trade. I suppose we shall hear later on how the right honourable Gentleman proposes to deal with the currency expressed on the face of these bonds, and whether he will take the gold dollar at 4s. and the paper and silver dollar at 2s. This has been done by Japan. Japan has converted 1,000 yen, which is the Japanese dollar, into £100 sterling, and issued bonds at about 100 sterling. There are other modes of increasing revenue; for instance, by a lower stamp duty on bills of exchange. I am sorry that the right honourable Gentleman has not included that subject in his Budget; but if he is in doubt upon that point, if he would appoint a Committee to inquire into the whole question of stamp duties, and also the diverse regulations affecting bills of exchange, he Would increase revenue indirectly by bringing profit to this country which does not come here now, and give him a benefit in other directions. I trust that he will act in such a manner next Session as to be able to make the necessary financial arrangement, and avoid touching the Sinking Fund.
    MR. GIBSON BOWLES (): This is a most remarkable Budget, remarkable for the expenditure involved, still more remarkable for the ease with which the income to meet expenditure is obtained, and most remarkable for the simplicity—I will not say brutality—of the method adopted for dealing with this large expenditure next year. First, as to the income. If we take the revenue as it was left by the late Government, and compare it with that of the last four years, we shall see that the Chancellor of the Exchequer has had at his disposal nearly £58,000,000 more than they had. The late Chancellor of the Exchequer estimated and provided for an expenditure of £96,000,000 in 1896, and that included an increase for the Navy and Army, and in four

    1073
    years that amount has been increased by the present Government by more than £57,000,000, not counting, of course, the expenditure which has been met by temporary loans, such as that for Naval and Military Works and Public Offices. I do not say that the expenditure is unnecessary; the House has agreed to it, and there is an end of it; but many Members attribute it solely to the great increase in the Navy and the Army. There are Members who put all increases down to the Navy and the Army; and just as there was once a, stiff-necked people who said always that it was "Jeroboam the son of Nebat which made Israel to sin," they hold that the Navy and Army are the Jeroboam of to-day. But there is the item of Education, for which we provide something more than £10,000,000. I do not say it is not wanted, as honourable Members suggest, but I do say that it is an extremely large sum to provide for the education of other people's children, who are quite ready and able to provide it for themselves. Then there is the increased expenditure in the way of inspectors of every kind—inspectors of factories, of trades, of foods, of health, of ships, and other things. But this increase to the Army, and to the Navy especially, what is that due to? It is due directly to the determination of the people of this country to carry their commerce to new markets, by persuasion if they can, or, if need be, by force of arms, and equally by the determination of the people here that they will foster their Colonies. All these things have to be taken into consideration, and the Chancellor of the Exchequer must take account of them. Moreover, I am sorry to say that I believe this country is so rich and so prosperous that it does not care what it spends. And I do not believe that you will ever get the smallest tendency to economy until the voter is made to feel that he is hit by the taxes more than he is at present. The ordinary voter pays a very small amount of taxes, and those who pay the great bulk of them are in an infinitesimal minority when it comes to the vote. The result of that must be that the voter is always in favour of extensive expenditure, especially when it is an expenditure which extends the trade by which he earns his livelihood without saddling him with the expense. The
    1074
    right honourable Gentleman, having had large sums of money at his disposal, nearly £58,000.000 extra spread over four years, I should have thought would have taken some means to readjust or make some revision of our system of taxation. He has declined to do so, not because it is not necessary, but because, like many other Chancellors of the Exchequer, he lives very largely from hand to mouth. I regard the right honourable Gentleman as an austere prophet, not one of those who believe in bimetallism or even in female suffrage. I look to him as a "Walpole, a Pitt, or a Prosperity Robinson, whom he so much resembles, and I should have expected from him some attempt at an improvement in and a revision of our taxation, which has many defects. Take the system of direct taxation; it is full of the most extraordinary exemptions and abatements, which inflict a most extensive injury on those who really pay the taxes. It is a fact that in the case of the death duties, one-tenth of the estates which pay the estates duty pay nine-tenths of that duty. It is a very insecure financial basis upon which to rely when you rely for so large a proportion of the duty on so small a number of persons. Take again the income tax. The total amount derived from income tax last year, according to the Returns, was £16,000,000. Now, were you to levy 8d. in the £ income tax all round on the incomes not exempted altogether, which amount to £700,000,000, that would give you £23,000,000. You really got £16,000,000, so that through exemptions and abatements, and only taking the incomes of over £160, instead of getting £2:5,000.000, you only got £16,500,000, and lost very nearly £7,000,000. I give that as an illustration of the extraordinary system which is adopted. Again, in inhabited house duty, you exempt one-half in value of the houses. The figures are open to the Committee in the Report of the Inland Revenue Commissioners. Then, coming to indirect taxation—to the Customs—I do not know whether that Committee quite realises that this so-called free trade country levies at its ports in Customs duties a larger amount than any other power in Europe: larger than Russia, larger than Germany, and larger than France. And it is levied on very few articles, on which the duties are very high. Tea

    1075
    pays 33 per cent., so that when I take a cup of tea, the Chancellor of the Exchequer puts his lips to the cup and drinks a third of it. Wine is taxed at 28 per cent., so that if I take a glass of wine he sips a quarter of it. The duty upon spirits is 206 per cent., so that when I treat myself to a glass of spirits I treat him to two; and upon tobacco the duty is 247 per cent., and, therefore, when I light a pipe for myself, I have to light other two and a half pipes for the right honourable Gentleman. Those five articles, together with beer, produce £52,000,000, or about one-half of the total revenue of the country. Now, Sir, I do say that it is not a sound system of finance to rely upon so few persons for the payment of direct taxation, and upon so few articles for the payment of indirect taxation, and I am remarkably confirmed in this opinion by a statement of the right honourable Gentleman himself, and by almost an equally great financier—not quite, perhaps, but almost equally great—the right honour able Gentleman the First Lord of the Admiralty. He said in 1894—he was In opposition then, but that is unimportant—he said—
    "In my judgment our whole fiscal system rests on a very narrow foundation. The whole revenue is derived from a comparatively small number of sources. Any one, indeed, who can broaden the basis and find new sources of revenue by which you can avoid a constant recurrence, for example, to the income tax, would render, and does render, a public service."
    The present First Lord of the Treasury was equally strong upon the matter on the same occasion. He said—
    "My right honourable Friend made a most interesting comment in passing upon the dangers that we are running in confining too much of our taxation to one or two commodities at most. That danger is a real one; I do not think anybody can deny that. The time may come—I think probably will come—when the right honourable Gentleman's successors may bitterly regret that we have carried to such a length a process which, beneficial though it has been, may be carried too far."
    The present Chancellor of the Exchequer, on the same date, said—
    "We have arrived now at this position, that in time of peace we have an income tax of 8d. in the £ we have death duties at a point which, I suppose, hardly anybody will wish to increase, and we have indirect taxation levied only on a very few articles of great con
    1076
    sumption, the list of which has not been added to for very many years, and the taxation on which, with the exception of the taxation on beer and wine and spirits, has not been increased at all since the year 1878. I wish to put before the Committee the present condition of our financial system. I wish to ask them to consider at their leisure what the position may be of the Chancellor of the Exchequer, who, in some future year, may have to meet a continuing enormous increase of expenditure under this system of taxation, and I wish to ask them whether they are quite sure that in such circumstances our present financial policy can be maintained."
    The Chancellor of the Exchequer has entirely given the go-by to this side of the question. He has left taxation to be levied upon a very few persons as regards direct taxation, and upon a very few articles as regards indirect taxation. Let me say, in concluding this part of the subject, that if you choose to carry out the policy which was initiated by"' Prosperity Robinson," and which was carried out by Peel and the late Mr. Gladstone, of substituting indirect taxation for direct, you must have your taxation so that everybody shall feel it, at any rate in a small degree; you must abolish most of your exemptions and abatements, and then, indeed, there will be no objection to getting rid of all your indirect taxation. On the other hand, if you determine to keep up indirect taxation, there again you must not rely upon a few articles taxed at the enormous rate of 200 or 250 per cent., but you must reasonably increase your sources of indirect taxation. After all, if you levy 240 per cent. on tobacco, there is no reason in principle or in free trade why you should not levy 1, 2, or 3 per cent. on lace, embroidery, artificial flowers, feathers, musical instruments, jewels, emeralds, rabies, pearls, and diamonds. This, of course, is merely a suggestion of mine; it is for a Chancellor of the Exchequer or a Secretary to the Treasury to consider such suggestions; and I only presume to put forward the idea as that of an unofficial and unimportant person. All these are articles of luxury; there is no reason why we should not tax them; and, if you are to rely upon indirect taxation, these articles, or such as these, might well be added to your Customs tariff. The Chancellor of the Exchequer made some jokes. Some of them I recognised. They were jokes that the Treasury keeps in pigeon-holes ready to

    1077
    be used by Chancellors of the Exchequer on Budget nights. Others were original jokes. One of the original jokes was that various people had made various mistakes as to the deficit that he would have to face this yea Yes, Sir, they have made mistakes. "The Times" said the deficit would probably be £1,500,000 to £2,000,000. I myself estimated that the amount would be from £3,000,000 to £4,000,000, and it is close on the former of those two sums. But in the Chancellor of the Exchequer's Estimate of the expenditure for 1899–1900 he has not made any allowance for the Supplementary Estimates, which, if we are to trust to the experience of the last four years, must certainly be brought before this House during this financial year. I think the system of Supplementary Estimates has been much abused. They are only intended for occasional, unavoidable, and unforeseen expenditure.
    THE CHANCELLOR OF THE EXCHEQUERindicated assent,
    MR. GIBSON BOWLER: I am glad the Chancellor of the Exchequer agrees with me; but these unforeseen expenses have been very large during the last four years. They have averaged something like £2,000,000 a year, or rather over. Therefore, if we may rely upon the experience of the past we shall have £2,000,000 to find than the total Estimates now put before us.
    THE CHANCELLOR OF THE EXCHEQUERindicated dissent.
    MR. GIBSON BOWLES: I am glad to see that shake of the head. I take it that the Chancellor of the Exchequer is going to reform his ways this year: that, he is going to forbid this year what he has allowed in previous years—the importation by the Departments of Supplementary Estimates—and that we shall have very much fewer Supplementary Estimates during the present year than we have had during the last four years. Now, Sir. one word about the proposed increase of taxation. As to the increase of the wine duty, so far as I can make out, the major part of that duty will represent an increase of no less than 50 per cent. on light wines, because the major part of it applies to
    1078
    those wines which are now taxed at a shilling a gallon. The increase of duty will be 6d. a. gallon, and consequently there will be the enormous increase of 50 per cent. in the duty. The Chancellor of the Exchequer has not sought any new form of taxation. He has passed by my lace, my embroidery, my jewels, my feathers, and my diamonds. He will have none of them. He has descended upon one commodity alone, and that a commodity already highly taxed, and he is going to levy the enormous increase of 50 per cent. upon wine. I think that is in very strong comparison with his generous treatment of the tobacco duty. The Chancellor of the Exchequer has told us that he smokes not, neither does he drink.
    AN INTERRUPTION: He does drink!
    MR. GIBSON BOWLES: Oh ! he does drink. Then his generosity is great, for he has extended the benefits of lighter taxation to the tobacco which he does not smoke, but he has levied a, heavier duty upon wine which he does drink. Now, Sir, I come to what, after all, is the most important point of the Budget, and that is the attitude of the Chancellor of the Exchequer with regard to the paying-off of the Debt. I do not think there is any growing impatience of debt in the constituencies. The people of the country do not. I fear, mind how much they owe, but they do mind how much they pay. Consequently, I think the right honourable Gentleman has shown the wisdom of the serpent in choosing the line of least resistance, and in deferring the further reduction of the Debt in order to avoid adding anything to the burden of taxation. I have heard to-night, and I have often heard before, the argument adduced, that it is an advantage to the country to have a National Debt. I cannot comprehend it. [Ironical cheers.] Are those Members of the Committee who make those weak cheers aware that we have to pay £25,000,000 a year extra taxation that we should not have to pay if we had no National Debt? Do they forget that but for the existence of the National Debt we could get: rid of most. if not all. of our Customs duties. and other duties to boot? It is absurd to say that ii is an advantage to us to

    1079
    have a National Debt. And then we have had the old argument that if we had no National Debt we should have no good investments. Why, Sir, it is rot the business of a Chancellor of the Exchequer to find good investments for the public. Anybody can do that. There are already any amount, not only of good investments, but of bad, indifferent, and speculative. Investments for all tastes will never be wanted in this country, and investments at all rates of interest. It is not the business of the Chancellor of the Exchequer to deal with the question of investments; his business is to work the finances of the country on the most economical and sound principles possible. Well, Sir, he stops the payment of £2,000,000 of the permanent Sinking Fund. The Secretary of State for India previously stated, however, that no interference would be made with the arrangements for the liquidation of the Debt.
    HONOURABLE MEMBERS: Oh!
    MR. GIBSON BOWLES: Did he not say that? Well, will any honourable Gentleman tell me what he did say? If not, I shall adhere to my own words
    SIR H. FOWLER: He said he would not suspend the Sinking Fund.
    MR. GIBSON BOWLES: I am much obliged to the right honourable Gentleman for furnishing me with the words. "Not suspend the Sinking Fund"? Well, Sir, it is not suspended in its entirety, but it, is in part. That is the difference. The Secretary of State for India, no doubt, derived his information from the Cabinet, and I think it is quite conceivable that upon this question the Cabinet subsequently changed its mind. It seems to me, moreover, that the Chancellor of the Exchequer himself changed his own mind during the progress of the Debate. When I heard at the beginning of his speech the glowing eulogium be made of the benefits of the Sinking Fund, I said to myself, "Well, we are safe; he is not going to touch the Sinking Fund"; but he converted himself in the course of his speech, and in the end he told us in the most surprising mam that he was going to raid the Fund. That very much surprised me, because I remember
    1080
    reading a speech which the Chancellor of the Exchequer delivered in the virtuous and budding youth of his Chan cellorship. In April 1896 he said——
    THE CHANCELLOR OF THE EXCHEQUER: It has been quoted already to-night. You need not read it again.
    MR. GIBSON BOWLES: But it is such a valuable and so convincing a speech that it will bear quotation, not once but many times. This is what the Chancellor of the Exchequer said—
    "We have paid off in 39 years £190,000,000 of Debt—[Cheers.]—and £100,000,000 of that has been paid off in the last 13 years. [Cheers.] Some may think that our efforts have been wasted—[an honourable Member: Hear, hear!]—and that we should have done better if we had allowed the money to fructify, as it is said, in the pocket of the taxpayer. That is not my view. [Cheers.] By this self-denying course the Parliament and the people of this country have raised up a reserve fund which, if the time of need should come when this country should again have to fight for its life, would enable us, without imposing a single extra penny of taxation, to raise a couple of hundred millions for the defence of the country, and, without imposing, either, an atom more debt upon the people of that day than our predecessors bore without murmur in 1857—[Cheers.]—and that is a thing which, I think, this country may be proud of."
    THE CHANCELLOR OF THE EXCHEQUER: That is exactly what we are now.
    MR. GIBSON BOWLES: At any rate we shall in future be less proud by £2,000,000 a year. Then the right honourable Gentleman goes on to say—
    "It is a source of incalculable strength to this country. and, although it may sometimes be necessary, even in time of peace, as it was necessary in 1885, when I was last responsible for the finances of the country, to postpone temporarily the operation of the Sinking Fund, yet I trust that Parliament will never permanently depart from the wise and Prudent policy in this matter which it has hitherto pursued."
    That is exactly what the right honourable Gentleman now proposes to do. This is a permanent departure. It is a permanent alteration of the new Sinking Fund. This is the very thing the Chancellor of the Exchequer had in mind in 1896 when, not foreseeing these contingencies, he said he trusted that Parliament would "never permanently depart from that wise and prudent

    1081
    policy." He permanently departs from the wise and prudent policy to the extent of £2,000,000, and that which he said was a source of incalculable strength will now be incalculable minus two. But not only has the right honourable Gentleman stopped £2,000,000 of the permanent charge for the Debt under the new Sinking Fund, but he has been stopping money from the old Sinking Fund every year since he came into office. £10,000,000 at least of the surplus that he has had since 1895 he has diverted from their legitimate destination, which was the reduction of the Debt, to other purposes. Of course this was done with the consent of Parliament. It is not so difficult, however, to obtain the consent of Parliament when you have a majority of 140 as it is when you only have a majority of 13 or 14, as was the case with the last Government on more than one occasion. Well, Sir, the right honourable Gentleman says that he takes this step "as a precaution." Yes, he takes the precaution by taking the money. He says also that you may overdo the Sinking Fund. That is one of his fears. So he proceeds to under do it. Well. Sir, really this conduct, compared with his speech, seems to me most extraordinary. I do not know how the Chancellor of the Exchequer may view his utterances of 1896, but to me it seems as though he were absolutely eating his own words. The right honourable Gentleman reminds me of Ugolino, who ate his own children in order to preserve to them a father. I now see the noble Lord the Secretary for India has fortunately returned to his place; and I am sure the Committee will be interested to know what were the real words he used when in a recent speech he declared that there would be no suspension of the Sinking Fund this year by the Chancellor of the Exchequer.
    THE SECRETARY OF STATE FOR INDIA (Lord GEORGE HAMILTON,): Certainly, I said nothing of the kind.
    MR. GIBSON BOWLES: Never mentioned the Sinking Fund?
    THE SECRETARY OF STATE FOR INDIA: If the honourable Gentleman wants to know what I said I will tell him.
    MR. GIBSON BOWLES: I do want to know.
    THE SECRETARY OF STATE FOR INDIA: I attended a gathering of the municipal corporations, and, after dinner, there were a large number of toasts. One of the toasts associated with Her Majesty's Government was proposed by Sir John Hibbert, a very well known old Member of Parliament. In the speech made by that gentleman he gave the Government some excellent advice, and, in speaking of the expenditure in the course of the year, he suggested that the Government should not suspend the payment of the National Debt. Those were the exact words which Sir John used, and, taking up those words, I, in reply, said that, without revealing any secrets in connection with the Budget, I could assure him that the Government had no intention of suspending payment of the National Debt, and that I was pretty sure that, high as Consols then stood, the day after the statement of the Chancellor of the Exchequer they would stand equally high. I was accurately reported in all the newspapers except one, which attributed to me, not the words "suspension of Debt," but "the suspension of repayment of Debt," which alters the sense. I was not aware of it at the time, but the right honourable Gentleman the Member for Bodmin made reference to this, statement in a speech outside. I then sent for the reports, and I found that in one newspaper I had been misreported. I would gladly have corrected the misstatement, but I did not deem it advisable to do so in view of the statement of the Chancellor of the Exchequer, and I was obliged to allow the misconception to run its course until the discussion took place on the Budget.
    MR. GIBSON BOWLES: After the extremely clear and most succinct statement of the right honourable Gentleman, I gather take what he did say was that the Government would not suspend the payment of the National Debt; but I they have now done so to the extent of

    1083
    £2,000,000 a year. That being so, I can only congratulate the Chancellor of the Exchequer upon the perfection with which his Budget secret was kept, even from the noble Lord the Secretary for India. With regard to the wine and the stamp duty, I have no particular complaint to make, but I am grieved at the most unexpected determination of the right honourable Gentleman to put his hand on the Sinking Fund, provided for the liquidation of the National Debt, established as a permanent institution by one of his former colleagues, respected by successive Governments in circumstances of great difficulty and trial up to this day, and in its character rightly described, both by the right honourable Gentleman the Member for West Monmouth and the Chancellor of the Exchequer himself, as a war chest reserve of great value to this country. I deeply regret that under present circumstances, in time of no stress and with. a rising revenue, the right honourable Gentleman has held it necessary to lay his hand upon this reserve fund. It seems to me to be a timid policy, and therefore a policy unworthy of himself—a dangerous policy, and an improper policy, which ought not to be adopted or sanctioned by this House.
    SIR C. DILKE: My honourable Friend the Member for King's Lynn in the very happy speech he has just delivered made a point which, perhaps, was not so acceptable to Members on this side of the House as it may be to honourable Gentlemen opposite, when he suggested that the great mass of the voters of this country do not contribute their fair share to the National Revenue at the present time. We, on the other hand, not only believe they do, but we also think that these duties fall too heavily, rather than too lightly, upon the voters. I did not, however, rise to discuss the speeches which have been delivered. For that we shall have other opportunities. I only wish to say a few words upon the resolution now actually before the Committee, and I do so in the conviction that the Committee is hardly aware of the gravity of the circumstances which the passing of this Resolution to-night will produce. My right honourable Friends the Members
    1084
    for Liskeard and Wolverhampton, and one other Member, have spoken very strongly upon the question of these duties, and the right honourable Gentleman the Member for Wolverhampton asked the Chancellor of the Exchequer what course he was going to take with regard to the Colonial contribution towards the wine duties. The Member for Sheffield, in his speech, has given notice of his intention to move the exemption of Colonial wines from the payment of this added duty. I do not think, however, he is likely to succeed in carrying that. We must face the facts as they will be brought about by the passing of this Resolution. We may vote against it, and it may be carried with an approach to unanimity, but for myself I shall, if a Division is pressed, vote against it, because I am convinced that, after its passage, nothing that can be said here will have the slightest effect in regard to its ultimately becoming law. This Resolution. means an enormous increase in the duty on light wines, and the increased duty will press on the trade of France, Spain, Portugal, Germany, Austria, South Australia, and Victoria, and in some degree of the United States of America. The pressure upon the South Australian and Victorian trade will be very great indeed. The Committee, perhaps, is hardly aware of the immense and increasing proportion which the export of wine, in the case of Victoria and South Australia, bears to the total trade. It is a very rapidly increasing trade indeed. What has been the position of this country with regard to wine duties hitherto? We have almost always either reduced them or held out to the countries with which we have been in negotiation a prospect that they will be reduced. The increase in the duty upon sparkling wine, which was imposed some years ago, was one which hit only one town, for practically the whole of that wine comes from a single district. The increased importance of the wine trade has always been fostered by this House by the lightening of the duties upon the cheapest kinds, as compared with the strongest kinds. We have always refused to admit that we were bargaining with regard to our duties, but, in practice, every one must feel we have constantly offered to other countries a reduction of these wine duties by proposing to

    1085
    raise the scale from 28 degrees, at which it formerly stood, to 32 or 33 degrees, so as to admit more freely the wines of Italy and Australia and the lighter wines from Spain and Portugal. Will the Committee consider for a moment what is the gravity of the step we axe asked to take to-night? It is not the case, as the Chancellor of the Exchequer seems to think, that the countries fix on their duties as against our trade. Most of the countries have two columns in their tariff—the most-favoured-nation treatment and the least favourable treatment to be accorded to the goods of other countries. In most cases there is power to take certain classes of goods from the latter column and to put them into the first, and they can give any country the most-favoured-nation treatment for all their goods, or they can apply it to only a certain class of goods. At this moment we receive the most-favoured-nation treatment from all these countries. Surely the Committee must be aware of the enormous weight of opinion in these countries in favour of Protection as against the trade of this country. There is a continually constant pressure on Foreign Governments to remove our goods from the first to the second column of the tariff. Are you going to strengthen that pressure for action which could be easily taken by many Powers? Are you going to risk having our exports put into the the second column of the tariff of these countries, by the sudden raising of the wine duties without any preliminary negotiation? It is a very grave risk indeed to take for a step which is of purely hypothetical value. At one time Spanish wines were refused, because they exceeded the alcoholic limit, and we refused to raise the limit of strength in order to admit them. They, accordingly, put us in the second column of their tariff, and a pretty state of things was the result—enormous pressure being brought to bear upon the Government. And that was only the case of Spain. I pity the Chancellor of the Exchequer, and the Party to which he belongs, if similar action should be taken and similar pressure should be brought to bear in the case of those countries which are the great markets for our goods. The honourable Member for Sheffield cheers these suggestions, because he thinks their adoption would be an object-lesson to
    1086
    France. But it is not France that will be most hit by the increase proposed here to-night. There is a rapidly increasing trade in light bottled wine from Germany, much of it through Holland. It was nearly £700,000 last year, and the hands of German Protectionists will undoubtedly be strengthened by the action we are taking. The Chancellor of the Exchequer told us that these wines could be easily bottled in this country, and that it is only about 50 per cent. of the increase that will hit them, because in future the course of trade will be changed. It may be the case with regard to some classes of these wines, that they will not be injured by being bottled in this country, but it certainly is not the case with regard to all of them, for many of them would be vitally injured by being transported in casks. The Chancellor of the Exchequer will find that he has hit them a very heavy blow indeed by this sudden and enormous increase of duty. I think that this is a very dangerous proposal. I will not myself force a, Division on this Resolution, but if any of my honourable Friends, feeling as I do, should insist on taking one, I shall vote with them, and I shall do so in the certainty that I am voting in the true interests of this country.
    MR. BARTLEY (): I agree very much with what fell from the right honourable Gentleman when he said that, considering the small amount to be raised by this additional taxation, it will produce an immense amount of friction and irritation in the wine trade, and I think it is a pity to incur that risk, I only wish to say a few words, because I have consistently opposed every sort of reduction of the system of paying off the National Debt. I agree most heartily with my honourable Friend the Member for King's Lynn, that the duty of this country is to reduce the National Debt as fast as it can, and in days like these, when the nation is unusually prosperous, it is a, most extraordinary thing that we should shrink from that duty. I certainly cannot accept the doctrine that, as the Debt gets smaller, we should pay less. What does this really mean? It means that we are afraid, or seem to be afraid, to ask the people to pay the natural cost of the policy we are pursuing. That policy is a bold and free one, and I personally

    1087
    strongly approve it, I believe, too, that the country approves of it, but surely it is the worst possible system, if a bold, free, and somewhat venturesome policy is put forward, not to ask the people to pay the necessary bill. We hear people talk about Jingoism. If it means being prepared to protect our position, I do not mind being called a Jingo, but if it means that, at a time like this, we are afraid to put our policy clearly before the people and to ask them to pay the cost of it, I say that that is the very worst form of Jingoism that could be conceived. If we believe our policy to be a good one, we ought to ask the nation to pay for it, even though it involves more taxation, rather than to seek to defray the cost of it by reducing the payments off our Debt during a period of great prosperity. What is the real motive inducing Russia and the other Great Powers to go into the Peace Congress? It is because they are feeling the pressure of army and navy expenditure; and I believe that the more the public all over Europe are brought to see that the present system leads to great expenditure the more likely they are to be led to favour a peaceful and pacific policy. The Chancellor of the Exchequer says the increase in our expenditure must be permanent. I certainly think it will be so. We hear of pension schemes of all sorts, and of increases of salary in all directions, and nobody can suppose that our national expenditure is likely to decrease. There is, therefore, all the more reason why, in prosperous times like these, we should be careful to reduce our debts, so that at any period at which we are less prosperous we may have something to fall back upon in the shape of reduced taxation which a reduced Debt will involve. I am perfectly aware of the great difficulty in paying off the Debt. I had not the benefit of hearing the speech of my honourable Friend the Member for Peckham. We all know the difficulties are associated with Consols, and also that the Chancellor of the Exchequer has found not a little trouble through not knowing what to do with the money, because the price of Consols has gone up so high. But there is something else, and that is the enormous sum we are every year spending in the Post Office Savings Bank. That is a matter which, I think, requires careful
    1088
    consideration. I only rose to make this protest, I say that while we are prosperous we ought to raise our voices, apart altogether from any Party considerations, and do our best to reduce this great weight of debt, so that if misfortune should overtake us we should not have this heavy burden around our necks, and should be in an infinitely better position to meet new obligations.
    MR. CHANNING: I wish to join in the protest that has been raised in many quarters of the House against the central principle of the Budget, the tampering with the Sinking Fund, and wish to protest still more emphatically against the financial policy which has brought the Government to its present straits. What they were now proposing to do was to rob posterity, because they have been diligently robbing the taxpayer of the present ever since they came into power. The figures which have been quoted by the honourable Member for King's Lynn as to the increased expenditure during the last few years are very remarkable. They show that the total increase of the expenditure of this country since the present Ministry came into power, a period of only four years, including the prospective year—has been £57,000,000 above the standard of expenditure of the preceding Government during their three years of office. The right honourable Gentleman seems to be confident that now he will be able to restrain the powerful forces which appeal for a mighty expenditure for the Army and Navy. But apparently he has made no provision for supplementary expenditure, and I believe we shall find, before the close of the present financial year, that they have spent in these four years £60,000,000 of the taxpayers' money more than was deemed to be necessary to be expended by their predecessors. The amount of realised surpluses placed at the disposal of the right honourable Gentleman in the last four years has been simply stupendous. They come to between £10,000,000 and £11,000,000 sterling, and the whole of that, so far as I have been able to trace it, has been swept away in the Naval Works Act and for other military and naval expenditure. And that has been in addition to the enormous sums which have been placed

    1089
    at the disposal of the Ministry owing to the automatic increase in the revenue of the country. I should like to ask honourable Members opposite, and the right honourable Gentleman opposite, where they would have been had it not been for the Budget of the right honourable Gentleman the Member for West Monmouthshire, which has placed so many millions at their disposal? I have taken the trouble to look a little into the way in which these gigantic sums have been appropriated in aid of special classes of the community. So far as I can gather, within the last three years there has been appropriated in aid of the landlords in England, and then in Scotland, and now in Ireland also, directly or indirectly, a sum either just exceeding or just falling under £7,000,000 sterling. Surely that is a very grave tiling for Parliament and the country to realise, that one single class of the community should have had this money handed over to them, for I cannot admit that they have been suffering to anything like an extent that would justify such an enormous grant in aid. Again, a large sum—over £1,300,000—has been appropriated to the maintenance of the Voluntary school system of this country, and that, again, is a questionable policy. What we have to consider is this. We have had an enormous increase in the expenditure of this country, and I must compliment the Chancellor of the Exchequer, if I may do so, on the extreme honesty and fairness with which, for four years, he has dealt with these vast increases of expenditure. Last year he had pointed out that during the past 20 years, while the population had increased 19 per cent., and the growth of the chief heads of taxation had increased only 15 to 16 per cent., expenditure had increased no less than 68 per cent. In his speech this afternoon he frankly recognised that the increase of expenditure was far too serious a matter to be lightly dealt with. He admitted that it must be faced as a subject of great concern. Now, the expenditure on the Army and Navy for the coming year is estimated at not less than £47,000,000 sterling, and I want the Committee to realise what that enormous sum means. I have been a Member of this House
    1090
    many years, and I well remember a very remarkable speech made by Lord Randolph Churchill, in January 1887, in explanation of his resignation. Lord Randolph said there were several points of difficulty which had arisen between himself and the Prime Minister and other Members of the Cabinet, but they could all have been adjusted except one, and that was the enormous expansion of the expenditure of the country upon naval and military matters, against which he felt it a paramount duty to protest, and to insist on, at least, a beginning in a policy of retrenchment and reduction. The expenditure in that year was only £31,000,000 sterling on the Army and Navy, and Lord Randolph Churchill thought it was imperative at that stage of the country's history to begin a reduction of this enormous expenditure. Now we have a Tory Ministry again in power who have increased the expenditure by leaps and bounds. The expenditure on armaments has reached the gigantic sum of £47,000,000 sterling a year, an increase of 50 per cent. on the amount against which Lord Randolph Churchill protested by resignation 12 years ago, thus sacrificing a career of the brightest promise. The House and the country should wake up to the realities of the position, and recognise that the Chancellor of the Exchequer, instead of supinely saying that he cannot resist this gigantic expenditure on the Army and the Navy, ought to make a vigorous and determined attempt to cut the expenditure down. The enormous claims that have been hinted at by my right honourable Friend the Member for Wolverhampton, for social reform and social development in this country, and the growing claims for secondary education, and other urgent questions have been thrown aside, and this enormous sum has been voted mainly for armaments and for subventions to favoured classes. About £7,000,000, more or less, in three years have gone to the landlords of England, Scotland, and Ireland, and £1,500,000 has been given to the managers of Voluntary Schools during the last three or four years, but what has the Government done for the poorer classes of the community? The Chancellor of the Exchequer would doubtless refer to the remissions and exemption of income tax on the

    1091
    smaller incomes: only £100,000 has been given in the reduction of the income tax on small incomes. Then there is the somewhat illusory reduction of the duty on tobacco, which had been put at £1,120,000: as far as I can discover, it has made no difference whatever to the purchasers of half-ounces of tobacco. So that while over £8,000,000 has gone to help the rich, little more than this £100,000 has gone to the poorer classes. I wish also to support what was said by the honourable Member for Islington with regard to the Savings Banks, and the position in which they stand with regard to the investment of their money in Consols. There may be further opportunity during this Session of discussing this question, but I cannot let this opportunity slip of at least pressing home the point that it may be of very considerable advantage to the finance of this country, and it may also be of very considerable advantage to the humble depositors in the Post Office Savings Banks and Trustee Savings Banks, if there could be some inquiry held which might result in enabling the Government to authorise some other investmnets than Consols for the large sums which remain in the hands of the Savings Banks. What. I have wished to do is to enter my most emphatic protest against the wanton extravagance of the Government in frittering away their vast resources. They may have been wise in not imposing some of the forms of additional taxation that had been suggested. Personally, I would rather that the income tax had been increased than that there should be any interference with the Sinking Fund. I believe it is a protest which will be echoed throughout the country at the next General Election, against the wanton extravagance of the past few years which has brought the Government to its present position.
    SIR J. BLUNDELL MAPLE (): I have listened carefully to the speeches which have been delivered to-night, most of which have, generally speaking, been directed against the proposals of the Chancellor of the Exchequer. Personally, I view the proposals of the right honourable Gentleman with a great deal of favour. I do not see what reason we have for reducing our National Debt when we are
    1092
    increasing every day our National Defences. If we look at the capital account of the country at the present time, and compare it with our position five or six years ago, we find that to our credit is standing not 10, 20, or 50, but probably £100,000,000 of capital in the way of armaments, etc. And to ask the nation to submit to increased taxation at the present time because there is a small deficit of £2,000,000 is to me an untenable proposition. What is the advantage of decreasing our National Debt? I would not mind the National Debt being increased to £100,000,000, if, in the meantime, we spent £200,000,000 on the defensive forces of the country. It is easy to have a surplus if you do not strengthen your position in the same way as the Government has been doing lately. But to have a surplus at the sacrifice of the defensive forces of the country would be, in my opinion, the greatest possible folly. I would myself suspend the whole of the repayment in respect of the National Debt. The proposal of the Chancellor of the Exchequer is one of the best that could be made in. the interests of the tax-payers of this country. With regard to the stamp duty, I think that matter will require reconsideration. The extra duty of 6d. on allotment papers is rather disadvantageous to investors.
    THE CHANCELLOR OF THE EXCHEQUER: I omitted to state that the increase from 1d. to 6d. was only to be in the case of allotments over £5. The 1d. will remain under £5.
    SIR J. BLUNDELL MAPLE: I am obliged to the right honourable Gentleman for that explanation, but I would ask him to consider whether it would not be advisable to limit the 6d. to allotments for £100 and over, with a duty of 3d. for £50. For small investments duty should be left at 1d. If promoters of public companies in allotting shares have to pay 6d. instead of 1d. they will be inclined to pass over small subscribers of shares. However, I am pleased to hear that the Chancellor of the Exchequer is willing to make an exception with regard to allotments under £5. With regard to wine duties, I hope we may be able to get the Chan-

    1093
    cellor of the Exchequer more favourably to consider the question of the duty on the less expensive wines. I disagree with the right honourable Baronet the Member for the Forest of Dean, that this way of collecting our taxes will cause the slightest unfriendliness with foreign nations. I have been connected with foreign countries in business matters for some time, and I am perfectly certain that neither France, Germany, nor any other country, will take exception to the duty put upon wines if the duty is put upon every nation alike. What they would object to would be differential rates. I hope the Government will adhere to their proposal with regard to the paying off of the National Debt, and I commend to all future Chancellors of the Exchequer the fact that it is advisable, from an economic point of view, that our National Debt should increase as long as our defensive power and our capital account is increased. It is far better that we should be in a position to defend ourselves than reduce our National Debt.
    MR. HARWOOD (): I do not propose to offer any suggestions, but simply to say that I do not think the proposals of the Chancellor of the Exchequer will raise the moral reputation of this country, and for this reason, that they seem to me to set a very bad precedent, and to outrage two very good principles. The Chancellor of the Exchequer gave a very glowing and poetic description of how this country is enjoying prosperity such as it has never enjoyed before, and yet there came the sorry ending to his speech that we are not prepared to pay our way. To paraphrase a well-known song—
    "We've got the ships, we've got the men, but we are not prepared to find the money."
    The two principles which the right honourable Gentleman has violated are these: First, that there should be set aside a fixed amount for the redemption of the National Debt; and, secondly, that temperance should be encouraged by lightening the burdens on liquors containing a small amount of alcohol and rather placing the burden on strong spirits. Speaking on behalf of those who do a great deal of business with foreign countries, I view with considerable trepidation, to use no stronger
    1094
    word, the proposals as to the wine duty. The honourable Member for Sheffield and other honourable Members seem to laugh and speak lightly of our trade with France and Germany, but I would ask the Committee to remember that after all two-thirds of the whole of the foreign trade of this country is done with these nations, and it would be a very serious step indeed if we were to do anything which might make them place our trade in a less advantageous position than it now occupies. I simply rise to make one criticism, which does not refer to this particular Budget or this particular Government; it is a criticism which refers to both Front Benches in this House. I consider that the statement of national account which is presented to us annually is drawn up on very bad principles of book-keeping. By national expenditure the people understand the cost of keeping the nation going by the Army, Navy, and Civil Services, but lumped in with these items is the cost of the Post and Telegraph Services, which upon ordinary business principles should appear in a separate account, for they are reproductive Services, and the net result, be it loss or profit, should appear in the net account. We shall hear to-morrow about the national expenditure having increased to such an amount, but those statements will all be based upon wrong figures. You cannot possibly say that the whole cost of carrying on the Post Office and Telegraph Services is national expenditure when you gain a profit of £4,500,000 upon them. The Chancellor of the Exchequer has informed me that the present arrangement was started by Mr. Gladstone. Of course, such a name must be treated with great respect and reverence, but there might have been reasons for it in 1854, when this system was started, which do not hold good to-day. I am certain that this is a wrong system of book-keeping, and I will prove it by its effect. We have no means of comparing our national expenditure from year to year with any accuracy. The Chancellor of the Exchequer, in his Jubilee speech, compared the expenditure of this country in 1837 with the expenditure in 1897. He worked out some very charming, striking, and interesting figures, which had only one virtue, and that was that

    1095
    they were not true. If the Chancellor of the Exchequer will refer to the Budget Speech of 1837, he will find that that Budget was drawn up on a proper basis of book-keeping, the net account being brought in as an asset. Suppose, for example, the State was to take over the railways. Would it be a proper thing to put on the national expenditure side of the account the whole cost of working the railways? If this were done, hundreds of millions would be added Straight away. The thing is absurd, and I ask the Chancellor of the Exchequer, and future Chancellors of the Exchequer, to give us a proper statement of account, and one which the country can understand. The Chancellor of the Exchequer may say that anyone can work out these figures for himself, but we must consider those who have not these figures before them. I therefore ask the Chancellor of the Exchequer, with all deference, to consider this proposal, because, as our expenditure is increasing, we ought to be more careful to make it as clear as possible, especially in view of the fact that the people of this country are paying more and more attention to this matter than they have been accustomed to do in the past. The national expenditure ought to mean only the expenditure on keeping the nation going by the Army, Navy, and Civil Services, and when the nation undertakes any business the account ought to be kept separate, and the net result given in the general account.
    MR. JOHNSTONE (): I decline to believe that any citizen of this Empire, rich or poor, grudges the expenditure upon our Army or Navy, to which Services the increase is mainly due. The expenditure is not of our creating, and the Under Secretary for Foreign Affairs justly said in this House that if the pace is a fast one it is not our setting. The guardians of national expenditure have simply to see that we keep pace with other nations in armaments and that the money is wisely spent. For once in my life I am not able to agree with the Words uttered by the honourable Member for King's Lynn. He spoke of the Budget as a timid one. I regard it as a Budget of courage and common sense, and I think that as such
    1096
    it will commend itself to the country. I cannot help thinking that the diversion of part of the Sinking Fund is an extremely good and sensible business. The honourable Member for King's Lynn said it would be a very foolish thing for a man whose income was decreasing not to at the same time endeavour to pay off his debts. This is rather the case of a man taking capital money out of a security which is producing 5 'per cent. and with it paying off a 3 per cent. mortgage, which I am sure no one would say was good or sensible business or a prudent step to take. The Chancellor of the Exchequer has turned his back on economic fallacies, has looked facts squarely in the face, and has applied the Sinking Fund in a way which the nation will not regret in the slightest degree. I am very thankful that the Chancellor of the Exchequer has made no alteration in the present incidence of the tobacco duty, though I was not one of those who took a favourable view of the remission of the tobacco duty last year. I do not want my tobacco any drier. I get it a great deal drier than I like it at the present time, but I fully recognise that, having regard to the disturbance which took place in the trade 12 months ago, it is desirable that another 12 months should be given in order to see the result of the reduction of the duty which was made last year. No increase has been made with regard to beer, but I consider that a considerable extra burden might have been borne by beer. I would suggest that the great brewing firms and the beer-drinking community of this country should follow the examples set by some of our Colonial brethern, and testify their gratitude to the Chancellor of the Exchequer for letting them off by making a handsome contribution to the defences of the realm.
    MR. E. C. J. MORTON (): I do not particularly object to the proposals of the Chancellor of the Exchequer, so far as they relate to the imposition of increased taxation, but I totally disagree with the views expressed by the honourable Member who has just sat down, and the honourable Member who preceded him on the other side of the House, with regard to the suspension of the Sinking Fund. The arguments advanced in favour of the suspension of part of the Sinking Fund

    1097
    practically amount to this—that we are engaged in expenditure which is for the benefit of future generations, and that, therefore, we are not bound to pay such expenditure out of current income, but might leave a certain amount of it to those who come after us. Those are practically the arguments in favour of the suspension of part of the Sinking Fund, as I understand them. But there is nothing in the way of National Expenditure which we can say, with any degree of certainty, will benefit posterity. The material progress which has been going on for the last 20 years with increasing acceleration, and which is now going on at a more rapid rate than at any other period in the history of any nation in the world, makes it certain that we can never lay it down as a settled fact that any particular expenditure is for the benefit of posterity. I will just take one instance, which will perhaps make the matter more clear than any amount of general argument. I know a town on the South Coast of England which was supposed, in 1860, not to be sufficiently protected from foreign attack, and Lord Palmerston, when Prime Minister, built a certain number of forts round that town for its protection. Seven years ago those forts, which had been built with public money, were demolished, also with public money, because they had become obsolete. For some years before they were demolished they were known in the district as "Palmerston's Folly." I do not agree with the idea conveyed in this phrase, because my belief is that at the time these forts were constructed they were useful, and probably even necessary in the condition of military science as it then existed, but military science—like all other science—has progressed since then, with the result that those forts became obsolete and had to be demolished. The forts were built not out of current expenditure, but by means of a debt which was incurred, and the argument was that it was right to incur that debt as these forts were for the protection of the nation, and would be for the advantage of succeeding generations as much as of the generation that built them. But, as I have said, by the progress of military science it turned out that instead of being advantageous they were absolutely noxious. They were worse than useless, and the suc-
    1098
    ceeding generation, instead of benefiting by the expenditure from which it was thought they would benefit, actually had to undertake a further expenditure for the purpose of demolishing the forts.
    THE CHANCELLOR OF THE EXCHEQUER: The debt has been paid off.
    MR. E. J. C. MORTON: That may have been the case since then, but the point is the debt was incurred upon the principle that the succeeding generation was going to benefit as much as the generation that built the forts, but the result turned out exactly the opposite. It is absolutely impossible to say that any expenditure in the present is for the benefit of succeeding generations. If you are going to have a sound system of finance you must go on the principle of regarding national improvements as belonging to this generation only. For that reason, therefore, it is incumbent upon us to pay off the debt as quickly as we can. It is a notorious fact that prosperity and adversity go in succeeding waves in this country, and now that we are in a period of prosperity we must look forward in the near future to a period of adversity, and I contend that it is the duty of the nation to carry out its national finance upon an honest basis, and to use these fat years to pay off the lean years which are in store for us. It is not honest finance to reduce by £2,000,000 the sum set aside for the redemption of the National Debt, when, at the time, we are in a state of unexampled prosperity, and when we cannot possibly be sure that any expenditure we are. entering into will be for the benefit of any other generation than our own.
    MR. GEDGE (): I have never before made any observations upon the Budget proposals, and on that account perhaps the Committee will kindly give me their indulgence for a few minutes. The honourable Gentleman the Member for Devonport could scarcely have chosen a more unfortunate illustration in support of his argument than the forts to which he referred. He said they were built for the benefit of one generation and had to be pulled down by another. I should like to

    1099
    point out that the amount which was borrowed to build these forts was all repaid within the time of the existing generation which built them, and had been repaid long before the forts were dismantled. The whole expenditure now proposed that is not to be repaid during the year will be repaid by 1923–24 years hence—which is during the existence of the present generation. With regard to the National Debt, the real obligation the country is under is only to pay so many millions a year towards its redemption. It cannot be compelled to pay off the Debt. Surely it would be unwise policy to redeem at the cost of £112 what in a few years can be redeemed for £100, or to adopt the suggestion that the whole of our expenditure on fortifications and our Army and Navy should be paid out of the current income in order that the people of this country, seeing the great cost of these preparations, might be more careful to avoid war. I am sure there is no desire for war in any part of the country. We all recognise that peace is essential to our commerce and happiness, and we wage war with very great reluctance. I know no class in England with whom war is popular, but they approve of this large expenditure on our defensive forces, because they know that such expenditure is the best means of averting a war, as experience had taught us during the past year. No doubt what we spend is twice as much as what was paid when Her Majesty came to the Throne, but the population and wealth of the Empire have increased much more in the meantime. We have a great deal more to defend now than we had then, and it is necessary that we should pay for that defence. I am sure there is no one in the country who grudges the expenditure. The Chancellor of the Exchequer, in the very able speech to which we have listened with great attention and pleasure, showed definitely that we are reducing the Debt at a very considerable rate, and I fail to see that we are outraging any sacred principle of finance in adopting the plan in regard to the Sinking Fund proposed by the Chancellor of the Exchequer. I think it would tend to a much better understanding of these matters if the country were to follow the method adopted by all commercial bodies, and have year by year, not
    1100
    only a profit and loss account published, but also an annual balance-sheet showing what the national prosperity consists of. In this way I believe a sounder and safer opinion would be obtained of what the real position of the country is. I should like to say how exceedingly grateful I am to the Chancellor of the Exchequer for his clear explanation of the effect of his reduction in the duty upon tobacco last year. I contended most urgently at the time that the consumer would ultimately get the benefit of the 6d., and I confess I was shaken in that view when, not long ago, on visiting my constituency, it was commonly stated that the consumer did not benefit in any way, and had to pay just as much for his tobacco. I think, however, that the right honourable Gentleman has shown the fallacy of that contention, and has explained that though the tobacco was not in some cases cheaper it was drier, and that though the price has not decreased it would have risen if he had not reduced the tax to the extent he did. The right honourable Gentleman proposes to increase companies' capital duty, and he told us he thought one of the effects of this increase would be to put difficulties in the way which might stop the creation of some of the bogus companies which are now formed for the purpose of bleeding the public. I hope it will have that effect, but I think the increase of the duty from £1 to £2 10s. per £1,000 will tend to decrease the amount of nominal capital, and the result will be that the Chancellor of the Exchequer will be disappointed as to the amount which he will receive as the outcome of this increase in the duty. I would suggest that there can be no reason for the present distinction between companies whose liability is limited and other companies, such as railway and dock companies, which have their own Acts of Parliament. If you charge £1 or £2 10s. for every £1,000 on the capital of the one, I do not see why it should not be charged on the capital of the other. Railway companies should pay as well as joint stock companies. Despite these very slight criticisms which I have ventured to make, I heartily approve of the Budget of the right honourable Gentleman as a whole, and with regard to his proposal about

    1101
    the wine duty, the effect will be that light wines, which are now imported in. bottles from Germany, will be imported in the wood, and the bottling will be done in this country, to the advantage of British manufacturers and British labour. Moreover, wine up to now has been less taxed in proportion than spirits and beer. For this reason I heartily approve of the Budget, and sincerely hope that it will be carried by the usual majority.
    MR. MARTIN (): I hope that before the Debate is quite concluded the right honourable Gentleman will adopt the suggestion that some inquiry should be made into the incidence of the Stamp Duty. I think that some of the recent legislation on the subject of that duty has certainly sent away business from London and England generally, and the small increases which have been made have resulted not in gain, but in loss of business. The matter is a very technical one, and one which will require a great deal of thought and discrimination, but it is certainly a matter worthy of inquiry. I regret that the Sinking Fund has been interfered with. We are always glad in one way to see the interest reduced on the Debt, but it is of far more importance to see that the Debt itself should be reduced, in case of accidents. I fully sympathise with what the right honourable Baronet the Member for the Forest of Dean said with regard to the importation of the German light wines, and I regret that any difficulty is to be placed in the way of the importation of those wines. They come down the Rhine to Rotterdam, and are exported with very little trouble and expense, and I think their introduction into this country was a decided step in the cause of temperance, which I hope the increase in the duty will not destroy.
    THE CHANCELLOR OF THE EXCHEQUER: We have had perhaps a wider Debate than usual on Budget night. It has ranged over many subjects—from the mode of keeping our national accounts—and I still think Mr. Gladstone was a better authority than the honourable Member who has criticised them—to the condition of the Savings Bank. I shall not endeavour to follow the speakers on all these topics. I shall confine myself
    1102
    to the actual proposals in the Budget. Of course, we must all expect a great deal of grumbling when we have to raise money, and I aim not surprised that my proposals have met with criticism. But the proposal to alter the terminable annuities and reduce the fixed debt charge has been unanimously opposed on the other side of the House; and I thought that the opposition was tinged with a little disappointment that some taxation had not been proposed instead, which might have been possibly more unpopular in the country. But I did not observe that any one of the honourble Members on either side of the House who objected to my proposals suggested the particular form of taxation which he would like substituted for the diminution of the fixed Debt charge. Sir, it is all very well for my honourable Friend who has just sat down to say that he does not like this policy—that he objects to any interference with the stamp duties and does not like an increase in the wine duty—but he has to pay the bill. He has voted for the expenditure, and he must pay the bill. I would apply the same answer to other honourable Members on both sides of the House who are in the same position with regard to the expenditure which has been incurred. Sir, I will not attempt again to enter upon the question of terminable annuities or the fixed debt charge, as both the right honourable Member for Wolverhampton and the right honourable Member for West Monmouth felt that it would be far better that the Treasury Minute should be in the hands of honourable Members, and that my proposals and arguments should be fairly considered by the aid of that Minute, before we enter into regular discussion of the proposals. But I demur most strongly to the mode in which my proposals were described by the right honourable Member for West Monmouth. He said that I had adopted a disastrous policy; that I was ceasing to pay off the Debt; that I was repudiating the obligations of the country; and that the provision for the redemption of the Debt had come to an end. Well, Sir, all these statements are absolutely inaccurate. An honourable Member below the Gangway added that the country was not paying its way. Sir, the country is paying its way com-

    1103
    pletely; and, more than that, it is paying off the obligations of our forefathers. If my proposals are adopted by the Committee, it will continue' to pay off those obligations at a greater proportionate rate than they have been paid off in past years, even when the right honourable Member for West Monmouth was Chancellor of the Exchequer. For even in this year nearly £6,000,000 will be devoted to the redemption of the Debt; and I can remember perfectly well—I think it was in 1886—when the right honourable Gentleman, finding himself in rather a tight place for his Budget, and having a difficulty in proposing increased taxation, temporarily suspended one of the Sinking Funds in order to provide himself with a sufficient surplus; and he defended his action on the ground that £6,000,000 were quite enough to devote to the redemption of the Debt in one year. Another criticism has been made from the other side by the honourable Member for Leicester, who complained bitterly that there was no reduction in the taxation of the poor. Last year I thought I had proposed a reduction of taxation in a matter which specially affected the poor? I understand that honourable Members opposite, including the right honourable Gentleman the Member for Wolverhampton, are in favour of a reduction of indirect taxation. I chose an object for that reduction which on every fiscal ground was a proper object for it, and it was the tobacco largely consumed by the poor. I was supported by many speakers on the other side on that very ground. Nothing I can say will alter the views on that matter of the honourable Member for Leicester and the honourable Member for Devonport, but will they propose that the tobacco duty shall be increased instead of the fixed debt charge being reduced? I know very well they will make no such suggestion to the House. I know very well that, although they may criticise my proposal, although they may say I do nothing for the poor man, yet it only means that from a Party point of view they are bound to find fault with me; and if the tobacco duty had been reduced by a Chancellor of the Exchequer on their own side he would have had no more hearty supporters than themselves.
    SIR H. FOWLER: If the right honourable Gentleman will facilitate the working of the forms of the House so that we can raise that issue, I will undertake to raise it.
    THE CHANCELLOR OF THE EXCHEQUER: Several honourable Members have criticised, though not entirely unfavourably, my proposal to increase the stamp duties. I can only say that I shall be happy to consider any representations that are made to me as to any particular feature of the proposals which I have suggested to the House. I have no wish to interfere with the transactions of the Money Market. I believe that the honourable Baronet opposite (Sir S. Montagu) is as well acquainted with this particular subject of the dealings in foreign bonds and stocks as any man in or out of the House, and he expressed the opinion most strongly that in the proposal I have made there was nothing that would interfere with the market transactions in these documents. With regard to the other stamp duties, very little objection has been taken to the increase in the companies' capital duty. I attach importance to that increase. I believe it is a very good proposal. But I am quite willing to consider whether that proposal may not be worded in such a way as possibly to catch a little more than it catches now, and, if that be so, I shall be very thankful for the suggestion. Now, I come to the last proposal—to increase the wine duties. I have no sympathy whatever with the objection raised by the right honourable baronet the Member for the Forest of Dean. He and I are old antagonists upon this question. I have always believed that we in this country have attached far too great importance to the threats of foreign countries as to what they would do to our commerce and trade if we take action in regard to our own revenue which to us seems expedient. I think, if anyone goes carefully into the condition of the trade between any of the great wine-growing countries and ourelves at this time, he will see that in their own interest it would be impossible for them to take such measures as the right honourable Baronet suggested. The great bulk of our exports, for example, to France are of raw material which she wants—coal and such like, which she

    1105
    would be very careful not to prohibit entering into her ports. I think the time has gone by when the bogey of what a foreign country may or may not do if we choose to take such action as seems best calculated to promote our own interests in regard to our own tariff ought materially to affect us. Something has been said in regard to the wine trade of our own Colonies. The wine trade of our Colonies with this country is very small when compared with our total imports of wine.
    SIR C. DILKE: It is rapidly increasing.
    THE CHANCELLOR OF THE EXCHEQUER: Not at present. Here I have the figures for the last three years. I find the total number of gallons of wine imported from all our Colonies during last year was only 745,000 gallons, out of more than 18,000,000 gallons imported into this country, and the total value of the import was about £125,000, and that these figures are practically the same for each of the last three years. Therefore, that is not the greatly-increasing trade which the right honourable Baronet imagines. I hope the Committee will not only pass this Wine Duty Resolution to-night, but that the House will also carry it into law. It will not be, as it stands, a heavy tax on the light wines. Something has been said about the effect of the duty on the light wines that come from Germany or France. Why, the increased duty is about a, penny a bottle. Is that a tax which would really so increase the price as to make a material difference to the consumption. I must say I have not heard anything which induces me to think that the proposal is in any way a mistake, but of course I shall expect to receive representations from those who are not only interested in, but well acquainted with, the subject, and I shall be prepared, as Chancellors of the Exchequer always are prepared, to consider fairly any representations they may make to me as to any particular hardship that may be inflicted on any particular class of wine. I hope that the Committee may now be willing to pass the Wine Resolution, which it is essential should be carried to-night, in
    1106
    order that the new duty may be levied, and also the Stamp Resolution, which I should desire also to see carried this evening. The Tea and Income Tax Resolutions will be reserved for Thursday, when there will be, of course, an opportunity for general Debate, which always takes place on the second night of the discussion on the Budget.
    Question put, and agreed to.
    1. Resolved, That in lieu of the duties of Customs now payable on Wine imported into Great Britain or Ireland, there shall be charged, levied, and paid the duties following (that is to say):—

    £

    s.

    d.

    Wine (other than still Wine imported in bottle) not exceeding 30 degrees of proof spirit, the gallon

    0

    1

    6

    Exceeding 30 but not exceeding 42 degrees of proof spirit, the gallon

    0

    3

    0

    And for every degree, or part of a degree, beyond the highest above charged, an additional duty, the gallon

    0

    0

    3

    Sparkling Wine imported in bottle, an additional duty, the gallon

    0

    2

    6

    Still Wine imported in bottle, the gallon

    0

    3

    0

    In this Resolution the word "Wine" includes lees of Wine. The word "degree" includes no fraction of the next higher degree—(Mr. Chancellor of the Exchequer.)

    STAMP DUTIES.
    2. Resolved, That there shall be charged on all Foreign and Colonial marketable securities transferable by delivery which are not at present chargeable with stamp duty, and which are negotiated in the United Kingdom after a date to be fixed by Parliament, a stamp duty of sixpence for every ten pounds, and also for any fractional part of ten pounds, of the money thereby secured.—(Mr. Chancellor of the Exchequer.)
    3. Resolved, That the stamp duty on share warrants issued under the provisions of the Companies Act, 1867, shall extend to any instruments to bearer issued by or on behalf of any

    1107
    company or body of persons formed or established in the United Kingdom and having the like effect as such share warrants, and the stamp duty charged on stock certificates to bearer as defined by the Stamp Act, 1891, shall extend to any instrument to bearer issued by or on behalf of a company or body of persons formed or established in the United Kingdom, having the like effect as such a stock certificate to bearer—(Mr. Chancellor of the Exchequer.)
    4. Resolved, That there shall be charged on any instrument issued by or on behalf of a company or body of persons formed or established out of the United Kingdom by means of the livery of which any share or stock of such a company or body of persons is transferred, assigned, or negotiated or purported to be transferred, assigned, or negotiated in the United Kingdom after a date to be fixed by Parliament, a stamp duty of sixpence for every ten pounds, and also for any fractional part of ten pounds, of the nominal value of the share or stock to which the instrument relates.—(Mr. Chancellor of the Exchequer.)
    5. Resolved, That the stamp duty on marketable securities transferable by delivery and on share warrants or stock certificates to bearer shall be extended to securities and instruments respectively where the delivery of the security or the delivery of the instrument is treated as a sufficient transfer, whether it constitutes a legal transfer or not.—(Mr. Chancellor of the Exchequer.)
    6. Resolved, That five shillings shall be substituted for two shillings as the ad valorem stamp duty on statements of the nominal capital or authorised increase of capital of any corporation or company.—(Mr. Chancellor of the Exchequer.
    7. Resolved, That where a local authority or company formed or established in the United Kingdom, issue any loan capital, a statement shall be made of the nominal amount proposed to be issued, and that statement shall be charged with an ad valorem stamp duty of two shillings and sixpence for every one hundred pounds or any fraction of one hundred pounds.—(Mr. Chancellor of the Exchequer.)
    8. Resolved, That there shall be charged on any letter of allotment, and on any letter of renunciation, including any document having the like effect as a letter of allotment or a letter of renunciation—

    (i.) Where the nominal amount allotted, or to which the letter of renunciation relates, is less than five pounds, a stamp duty of one penny; and

    (ii.) In any other case a stamp duty of sixpence—

    (Mr. Chancellor of the Exchequer.)

  GENERAL.
  9. Resolved, That it is expedient to amend the Law relating to the Customs, the Inland Revenue, and the National Debt.—(Mr. Chancellor of the Exchequer.)
  Resolutions to be reported this day; Committee to sit again this day.

ARMY (ANNUAL) BILL.
Considered in Committee.
Clauses 1, 2, and 3 agreed to without discussion.

ARMY (ANNUAL) BILL.

  CLAUSE 4.
  Amendment proposed—
  "In page 3, line 13, to leave out the words 'in section 91 and.'"—(Mr. Caldwell.)
  MR. CALDWELL (): The power at present vested in the Secretary of State for War to determine the parish to which a soldier discharged in respect of lunacy should be chargeable is proposed by the Bill to be transferred to any officer who may be deputed for that particular purpose. Obviously, the power which it is proposed to be transferred is not a power which it is possible to depute to a subordinate officer. It has nothing whatever to do with any question of

  1109
  military discipline, and the question of domicile is entirely a civil question, information in respect of which can only be obtained through civil sources, and the Secretary of State for War should be retained in the clause. The liability of the parish to which a lunatic soldier should be chargeable is of a most extensive character, as it would involve the maintenance of that soldier during the remainder of his life should he remain a lunatic. The term "officer" which it is proposed to put in this Bill is a most comprehensive one. It is said in the Memorandum that the object of the Amendment of the Army Act contained in the clause to which I am referring is to enable the Secretary of State for War to depute to General Officers commanding districts the power of the Secretary of State to make orders for the transfer to workhouses and lunatic asylums of lunatic soldiers and their wives and families. But the Bill would enable this power to be deputed to any officer whom the Secretary of State may select. I move to omit these particular words from the clause, but as I have a number of other Amendments to propose on this clause, I appeal to the Leader of the House to postpone discussion on this Bill until some future occasion.
  THE FIRST LORD OF THE TREASURY: As we did not commence the discussion of this Bill until a comparatively late hour, I admit that there is some argument in favour of choosing some other night, if possible. I understand from my honourable Friend that this Bill must pass, if the law is to be obeyed, by Thursday. On Monday, I believe, there is to be a Debate on an Education Question, which comes on after 12 o'clock, and I am afraid it may be of a lengthy character. I never like to commit the House to sit unduly late on Tuesdays, and therefore there only remains to-morrow. I am reluctant to put down Bills on Fridays, because if they are taken before 12 o'clock it interferes with the sanctity of the Friday rule. Perhaps the same objection does
  1110
  not apply to Bills which can be taken after 12 o'clock. If it is understood that the honourable Gentleman will assist us to pass the Bill to-morrow I shall be glad to put it off until then.
  MR. CALDWELL: I quite recognise that the Bill has to pass, and I merely want to bring the points out. I will agree to the adjournment until to-morrow if to-morrow is the only suitable time.
  THE FIRST LORD OF THE TREASURY: I am afraid it is.
  MR. COURTENAY WARNER (): Do I understand that the Bill will be put down as the first Government Order to-morrow?
  THE FIRST LORD OF THE TREASURY: The only Government Order after Supply.
  Progress reported.

BUSINESS DEFERRED.
  FARNLEY TYAS MARRIAGES BILL.
  Second Reading deferred till Monday next.
  PALATINE COURT OF DURHAM BILL [H.L.]
  Second Reading deferred till Monday next.
  SOLICITORS BILL [H.L.]
  Second Reading deferred till Monday next.
  TELEGRAPH (CHANNEL ISLANDS) BILL [H.L.]
  Second Reading deferred till Monday next.
  SCHOOL BOARD CONFERENCES (SCOT- LAND) BILL [H.L.]
  Second Reading deferred till Thursday next.
  SALE OF INTOXICATING LIQUORS ON SUNDAY BILL.
  Second Reading deferred till Thursday next.
  POOR LAW OFFICERS' SUPERANNUATION ACT (1896) AMENDMENT BILL.
  Second Reading deferred till this day.
  PARLIAMENTARY DEPOSITS BILL.
  Second Reading deferred till Monday next.
  CONSTRUCTIVE MURDER LAW AMENDMENT BILL.
  Second Reading deferred till Wednesday next.
  CHEAP TRAINS BILL.
  Second Reading deferred till Tuesday next.

  SEATS FOR SHOP ASSISTANTS (SCOTLAND) BILL.
  Considered in Committee.
  (In the Committee.)
  Clause 1—
  Committee report Progress; to sit again upon Tuesday nest.

  MEROPOLITAN WATER COMPANIES (GOVERNMENT) BILL.
  Third Reading deferred till Monday next.
  COLONIAL LOANS FUND BILL.
  Second Reading deferred till Monday next.
  INEBRIATES ACT (1898) AMENDMENT BILL.
  Second Reading deferred till Monday next.
  UNIVERSITIES (SCOTLAND) ACTS AMENDMENT BILL.
  Adjourned Debate on Second Reading [9th March] further adjourned till Monday next.
  CHARITABLE LOANS (IRELAND) BILL.
  Second Reading deferred till Monday next.
  ROMAN CATHOLIC DISABILITIES RE- MOVAL BILL.
  Second Reading deferred from Thursday 27th April till Wednesday 10th May
  CROWN CASES BILL.
  Second Reading deferred from Tomorrow till Monday 24th April.
  LONDON WATER (PURCHASE) BILL.
  (By Order.) Second Reading deferred till Thursday, 27th April.

  LONDON WATER (FINANCE) BILL.
  (By Order.) Second Reading deferred till Thursday, 27th April.
  House adjourned at forty minutes after Twelve of the clock.