Sitting of 23 April 1903

Preamble
The House met at Two of the Clock.
UNOPPOSED PRIVATE BILL BUSINESS.

  PORT OF LONDON BILL (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, pursuant to the Order of the House of the 7th day of April, That, in the case of the following Bill, the Standing Orders which are applicable thereto have been complied with, viz.:—
  Port of London Bill.

  PRIVATE BILL PETITIONS (STANDING ORDERS NOT COMPLIED WITH).
  Mr. SPEAKER Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bill, That in the case of the Petitions for the following Bill, the Standing Orders have not been complied with, viz,:—
  Baker Street and Waterloo Railway (Extension of Time) Bill.
  Ordered, That the Report be referred to the Select Committee on Standing Orders.

  PRIVATE BILLS (PETITION FOR ADDITIONAL PROVISION) (STANDING ORDERS NOT 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 Petition for additional Provision in the following Bill, the Standing Orders have not been complied with, viz.:—
  Castleblaney, Keady, and Armagh Railway (Extension of Time) Bill.
  Ordered, that the Report be referred to the Select Committee on Standing Orders.

  PROVISIONAL ORDER BILLS (NO STANDING ORDERS APPLICABLE).
  Mr. SPAKER Mr. SPAKER 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
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  the First Reading thereof, no Standing Orders are applicable, viz:—
  Land Drainage Provisional order Bill.
  Ordered, that the Bill be read a second time to-morrow.

  GREAT EASTERN RAILWAY (No. 1) BILL.
  Ordered, that the great Eastern Railway (No. 1) Bill be re-committed to the former Committee.
  Ordered, That it be an Instruction to the Committee on the Great Eastern Railway (No. 1) (re-committed) Bill and the Great Eastern Railway (No 2) Bill that they have power, if they think fit, to consolidate the said two Bills, or any part or parts thereof respectively, into one Bill.
  Ordered, That the Committee have leave to proceed with the said Bills to-morrow.—(Mr. Ernest Gray).

  ELECTRIC LIGHTING PROVISIONAL ORDERS (No. 4).
  Bill to confirm certain Provisional Orders made by the Board of Trade under the Electric Lighting Acts, 1882 and 1888, The Electric Lighting (Scotland) Act, 1890, and The Electric Lighting (Scotland) Act, 1902, relating to Borrowstounness, Cambuslang, Irvine, Kilmalcolm, and Kirkintilloch, ordered to be brought in by Mr. Bonar Law and Mr. Gerald Balfour.
  ELECTRIC LIGHTING PROVISIONAL ORDERS (No. 5).
  Bill to confirm certain Provisional Orders made by the. Board of Trade under the Electric Lighting Acts, 1882 and 1888, relating to Abersychan, Calverley, Falmouth, Horsforth, Launceston, Maesteg. Walton-upon-Thames, Warmley, Whickham, and Wigan (Rural), ordered to be brought in by Mr. Bonar Law and Mr. Gerald Balfour.

  ELECTRIC LIGHTING PROVISIONAL ORDERS (No. 6).
  Bill to confirm certain Provisional Orders made by the Board of Trade under the Electric Lighting Acts, 1882 and 1888, relating to Bexley (Extension), Bridgwater and District, Bromley (Rural), Hendon (Amendment), Huddersfield (Extension), Leatherhead and

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  District (Extension), Prestwich (Amendment), Stroud, and Whitchurch and Pangbourne, ordered to be brought in by Mr. Bonar Law and Mr. Gerald Balfour.

  ELECTRIC LIGHTING PROVISIONAL ORDERS (No. 4) BILL.
  "To confirm certain Provisional Orders made by the Board of Trade under the Electric Lighting Acts, 1882 and 1888, The Electric Lighting (Scotland) Act, 1890, and The Electric Lighting (Scotland) Act, 1902, relating to Borrowstounness, Cambuslang, Irvine, Kilmalcolm, and Kirkintilloch," presented, and read the first time; to be referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 159.]
  ELECTRIC LIGHTING PROVISIONAL ORDERS (No. 5) BILL.
  "To confirm certain Provisional Orders made by the Board of Trade under The Electric Lighting Acts, 1882 and 1888, relating to Abersychan, Calverley, Falmouth, Horsforth, Launceston, Maesteg, Walton-upon-Thames, Warmley, Whickham, and Wigan (Rural)," presented, and read the first time; to be referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 160.]
  ELECTRIC LIGHTING PROVISIONAL ORDERS (NO. 6) BILL.
  "To confirm certain Provisional Orders made by the Board of Trade under the Electric Lighting Acts, 1882 and 1888, relating to Bexley (Extension), Bridgwater and District, Bromley (Rural), Hendon (Amendment), Huddersfield (Extension) Leatherhead and District (Extension), Prestwich (Amendment), Stroud, and Whitchurch and Pangbourne," presented, and read the first time; to be referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 161.]
PETITIONS.

  COAL MINES REGULATION BILL.
  Petitions in favour: from Low Stubbin (No. 2); Whitehaven; Braysdown Pit; Camerton Pit; Kilmersdon Pit; Bishop Sutton Pit; Upper Conygre Pit; Huish Pit; Foxcote Pit; Writhlington Pit; Ludlow's Pit; Norton Hill;
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  and Lower Conygre Collieries; to lie upon the Table.

  COUNTY COURTS JURISDICTION EXTENSION BILL.
  Petitions in favour: from Reading; Bournemouth (two); Dover; Harrogate; Torquay; Pudsey; Middleton; Eastbourne; Ilford; Leytonstone; Forest Gate; Weston-super-Mare; Barnsley; Bridgwater; Brighton; Sunderland; Mossley; and Kingston-upon-Hull; to lie upon the Table.
  DETENTION OF POOR PERSONS (SCOTLAND) BILL.
  Petitions in favour: from Stenton; Bellie; and Girvan; to lie upon the Table.
  EDUCATION (SCOTLAND) BILL.
  Petition from Montrose, in favour; to lie upon the Table.
  EMPLOYMENT OF CHILDREN BILL.
  Petition from Leeds, in favour; to lie upon the Table.
  LICENSING (SCOTLAND) ACTS AMENDMENT BILL.
  Petition from Borrowstounness, for alteration: to lie upon the Table.
  MARRIAGE WITH A DECEASED WIFE'S SISTER BILL.
  Petition from Montrose, in favour; to lie upon the Table.
  PREVENTION OF CORRUPTION BILL.
  Petition from Bristol, for alteration; to lie upon the Table.
  PUBLIC HOUSES (HOURS OF CLOSING) (SCOTLAND) BILL.
  Petitions in favour: from Paisley (four); Edinburgh (four); Glasgow; and Aberdeen; to lie upon the Table.
  PUBLIC LIBRARIES.
  Petition from Oldham, for alteration of law; to lie upon the Table.
  RATING OF MACHINERY BILL.
  Petitions against: from Newhaven; and Brighton; to lie upon the Table.
  SALE OF ADULTERATED BUTTER BILL.
  Petitions against: from Brighton (two); and Hove; to lie upon the Table.
  TRADES DISPUTES BILL.
  Petitions in favour: from Whitehaven; Low Stubbin (No. 2); Braysdown Pit; Upper Conygre; Ludlow's Pit; Writhlington Pit; Norton Hill Pit; Foxcote Pit; Lower Conygre; Kilmersdon Pit; Huish Pit; Camerton Pit; and Bishop Sutton Pit Collieries; to lie upon the Table.
RETURNS, REPORTS, ETC.
  WORKHOUSE INFIRMARIES (IRELAND) (NUNS EMPLOYED).
  Return [presented 21st April] to be printed. [No. 115.]
  EVICTIONS (IRELAND).
  Copy presented, of Return of the number of Evictions in Ireland for the quarter ended 31st March 1903 [by Command] to lie upon the Table.
  FORESTRY (DEPARTMENTAL COMMITTEE).
  Copy presented, of Minutes of Evidence taken before the Departmental Committee appointed by the Board of Agriculture to enquire into and report upon British Forestry, with Appendices and Index [by Command]: to lie upon the Table.
  BOARD OF EDUCATION (EDUCATION COMMITTEES).
  Copy presented, of Statement of Schemes for the formation of Education Committees approved up to 31st March by the Board of Education, under Section 17 of the Education Act of 1902 [by Command]; to lie upon the Table.
  ELECTRIC LIGHTING PROVISIONAL ORDER (No. 1) BILL.
  Return presented, relative thereto [ordered 22nd April; Mr. Bonar Law]; to lie upon the Table, and to be printed. [No. 116.]
  ELECTRIC LIGHTING PROVISIONAL ORDERS (No. 2) BILL.
  Return presented, relative thereto [ordered 22nd April; Mr. Bonar Law]; to lie upon the Table, and to be printed. [No. 117.]
  ELECTRIC LIGHTING PROVISIONAL ORDERS (No. 3) BILL.
  Return presented, relative thereto [ordered 22nd April; Mr. Bonar Law]; to lie upon the Table, and to be printed. [No. 118.]
  TRADE REPORTS (ANNUAL SERIES).
  Copies presented, of Diplomatic and Consular Reports, Annual Series, Nos. 2959 and 2960 [by Command]; to lie upon the Table.
  ENDOWED SCHOOLS ACT, 1869, AND AMENDING ACTS.
  Copy presented, of Scheme for the Management of Chew's Foundation, in the parish of Dunstable, in the County of Bedford, founded by' Deed of 16th September 1724 [by Act]; to lie upon the Table, and to be printed. [No. 121.]

  FINANCIAL STATEMENT (1903–4).
  Copy ordered, "of Statement of Revenue and Expenditure as laid before the House by the 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. 119.]

QUESTIONS AND ANSWERS CIRCULATED WITH THE VOTES.

  Scotch Education—Leaving Certificates.
  Mr. CROMBIE: To ask the Lord Advocate, whether he is aware that under the regulations for leaving certificates, a candidate who desires to take dynamics as an additional subject, though he has already passed in higher mathematics, is compelled to undergo another examination and pass again in the latter subject; and, if so, whether he will take steps to render the second examination in higher mathematics unnecessary.
  (Answered by Mr. A. Graham Murray.) The rule in question has been adopted in order to check a tendency to cram up a special subject and to neglect the mathematical knowledge on which it ought to be based. Experience so far has confirmed the expediency of such a rule.

  London Elections Bill—Date of Second Reading.
  MR. H. C. RICHARDS: To ask the President of the Local Government Board if he will state when the Second Reading of the Bill for the rectification of the London Parliamentary Borough Boundaries will be taken.
  (Answered by Mr. Walter Long.) The Bill referred to has not been introduced this session. In reply to a question on the 2nd of March last,† I pointed out that last year's Bill was introduced on the assurance that it would meet with no opposition, but that in fact it was opposed from both sides of the House. I added that I was not prepared to deal with the matter in the present session unless I was satisfied that the Bill would be treated as an unopposed measure.

  Plumbers and Electricians in the Navy.
  MR. KEARLEY: To ask the Secretary to the Admiralty whether men holding the rating of plumber or plumber's mate will be permitted to change it to electrician, provided they possess the necessary qualifications.
  (Answered by Mr. Arnold-Forster.) So long as the direct entries of electricians continue sufficient to meet all requirements, it is not intended to permit transfers from other ratings within the service.

  Savings Bank Department and the Telephone Service.
  MR. CLAUDE HAY: To ask the Postmaster General whether, in view of his decision to employ the telephone service at the Savings Bank Department, Kensington, in preference to the telegraphs, he will explain why the telegraph apparatus has been used since this decision was made known; and whether he will state the number of telegrams sent from the Savings Bank to the Central Telegraph Office from 8th April to 16th April, inclusive.
  (Answered by Mr. Austen Chamberlain.) It became necessary, owing to the pressure of work, to supplement the telephonic communication between the Savings Bank and the Central Telegraph Office by Wheatstone telegraphic apparatus on the Saturday before Easter and the
  † See (4) Debates, cxviii., 1099.
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  following Tuesday. It will be necessary to do this probably on a few other days in the year. The number of telegrams sent from the Savings Bank to the Central Telegraph Office from the 14th to the 16th April, inclusive, was 3,248, and there were 3,452 in the opposite direction. The transfer to the new buildings was not completed until the 14th, so that I only give the figures from that date inclusive.

  Irish Lights Commission.
  MR. H. C. RICHARDS: To ask the Chief Secretary to the Lord Lieutenant of Ireland if he to take any steps, and what, to bring the Irish Light Commissioners and their work within Parliamentary control.
  (Answered by Mr. Wyndham.) I am aware that representations have been made from time to time in favour of a reform in the constitution of the Irish Lights Board. The question, however, is properly one for the consideration of my right hon. friend the President of the Board of Trade.

  Depopulation of Ireland.
  CAPTAIN DONELAN: To ask the Chief Secretary to the Lord Lieutenant of Ireland whether his attenton has been directed to the numbers of emigrants leaving Ireland almost daily for America; and whether, in view of the consequent depopulation of the country and of the fact that farmers each year experience greater difficulties in working their farms owing to the scarcity of labour, with a view to provide a remedy, he will consider the desirability of enlarging the provisions dealing with the labourers in the Irish Land Bill.
  (Answered by Mr. Wyndham.) There has been a decrease, small but still gratifying, in the number of emigrants from Ireland during the first three months of 1903 as compared with the corresponding period of 1901 and 1902. In the first quarter of 1901 the figures were 4,974; in 1902, 4,395; and during the past three months, 4,153. The second inquiry can more properly be dealt with in Committee on the Land Bill.

  Baghdad Railway Convention—Article IV.
  SIR JOSEPH LEESE: To ask the First Lord of the Treasury whether his attention has been drawn to the terms of Article IV. of the Convention alleged to have been granted to the Anatolian Railway Company by the Turkish Government, whereby the proposed Railway to Baghdad and Bâsra is to be finished within eight years, subject to any delays arising out of force majeure, such as a war between European Powers or a radical change in the financial situation of England, Germany or France; and whether he is able to explain the meaning of the reference to the financial situation of England in this said Article.
  (Answered by Mr. A. J. Balfour.)—As I have already stated, His Majesty's Government are in possession of a copy of the Convention in question; but they are in no sense parties to it, and cannot therefore be called upon to explain its provisions.

QUESTIONS IN THE HOUSE.

  Naval Marksmanship.
  MR. GIBSON BOWLES: I beg to ask the Secretary to the Admiralty have the Admiralty given attention to the great variations between the marksmanship records of various ships of the fleet, and to the fact that whereas some ships have scored no hits at all others have scored over 70 per cent. of hits, and that the general average is so low as about half the highest results attained. Are they aware that defective marksmanship is partly due to the inadequate supply of practice ammunition for breech-loading quick-firing guns. Are they aware that it is also in many cases principally due to the inadequate interest taken in gunnery as compared with other matters by admirals, captains, and senior executive officers, the concurrence of all three of whom with the gunnery officer is required in order to afford any ship the requisite facilities for gunnery training. And, will they consider the advisability of making the admiral, the captain, the
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  senior executive officer, and the gunnery officer all personally responsible for success in marksmanship in their respective fleets and ships; and of causing it to be understood that upon the adequate results of the gunnery of the fleet or ship will depend the retention of the admiral and the captain of their respective appointments, and the promotion of the senior executive officer, as well as that of the gunnery officer.
  THE SECRETARY TO THE ADMIRALTY (Mr. ARNOLD-FORSTER,: The firing returns from all ships are carefully scrutinised both at the Admiralty and in the gunnery schools, and the attention of the officers concerned is specially directed to all cases in which the firing has been unsatisfactory The approbation of the Board is expressed when specially good results have been obtained. The supply of practice ammunition has recently been revised, and it is not considered inadequate for the purpose. With regard to the third paragraph of my hon. friend's Question, the Board are of opinion that it conveys a serious imputation upon the officers alluded to, and that the statement contained in it to the effect that such officers are indifferent to one of their principal and most important duties is absolutely incorrect, and involves an unjust reflection upon them. In answer to the fourth paragraph, the Board see no reason for altering the existing regulations, which clearly lay down that the attainment of "good shooting and efficiency in gunnery are always to be considered as taking precedence over all other duties," and that special reports with regard to gunnery efficiency are to be forwarded to the Admiralty for consideration at the time of the half-yearly recommendations of lieutenants for promotion.
  MR. GIBSON BOWLESsaid he did not impute indifference to admirals and captains except as compared with other matters—that was to say, paint and brass work.
  MR. ARNOLD-FORSTER: Yes, Sir, that is exactly the point. Such a

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  suggestion conveys a very serious imputation, for which there is no foundation whatever.

  The Disaster in Somaliland.
  SIR H. CAMPBELL-BANNERMAN: I beg to ask the Secretary of State for War whether the Government have received any news from Somaliland.
  THE SECRETARY OF STATE FOR WAR (Mr. BRODRICK,: Yes, Sir, we have received the following telegram from General Manning:—From Colonel, Swann, Bohotle, To the Secretary of State for War, April 22. Following message received from General Officer Commanding (begins):—Twenty miles to the west of Galadi, 18th April. Regret to report that flying column under the command of Cobbe, which left Galadi 10th April reconnoitre road to Walwal, as reported in my 110 of 8th April, has had most serious check on 17th April. On morning of 17th April Cobbe, at Gumburru, forty miles to the west of Galadi, had decided to return to Galadi owing to serious difficulty in finding road to Walwal and short of water. He was about to leave zariba when firing was heard in direction of small party under command of Captain Olivey which had been sent in a westerly direction to reconnoitre. At 9.15 in the morning Colonel Cobbe despatched Colonel Plunkett with 160 2nd Battalion King's African Rifles and 48 2nd Sikhs and two Maxim guns for extrication of Captain Olivey if necessary. As a matter of fact Olivey had not been engaged. Plunkett on joining Depot continued to push on. At 11.45 in the morning Colonel Cobbe heard heavy fire in direction of Plunkett, and at or about 1 o'clock in the afternoon a few fugitives coming in reported Plunkett defeated with loss. News fully corroborated since, and I have to report total loss of Plunkett's party with exception of thirty-seven Yaos who have arrived."
  Latest information extracted from fugitives is dated 8 30 o'clock in the afternoon 17th April; is as follows:—That Plunkett pushed on after enemy's force to open country seven miles to the west of Gumburru. Here he was attacked by very strong force of mounted
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  troops and enemy's infantry, who attacked at close quarters.
  He kept back enemy's forces until no more ammunition, when he formed square and charged (with) bayonet in direction of Cobbe's zariba. He moved for some distance in this manner, but a great many, inclusive of Plunkett, killed and wounded by enemy's force in pursuit. At last enemy's infantry overwhelmed square and annihilated all with exception of 37 fugitives above mentioned.
  Following reported missing, without doubt killed in action:—
  Officers, 2nd Bn. King's African Rifles: Colonel Plunkett, Captains Johnston-Stewart, Olivey, Morris, MacKinnon, Lieutenants Gaynor and Bell.
  2nd Sikhs: Captain Visey [? Vesey].
  Indian Medical Staff: Captain Sime.
  Rank and file: No. 2176 Private Laurence Ensor, 4th K.R.R.C.; No. 1589 Private John Barrow, 4th K.R.R.C.
  Rank and file, native soldiers: 2nd Sikhs, 18; 2nd Bn. King's African Rifles, 124.
  Two Maxim guns also lost.
  Colonel Cobbe reports result of slight fighting on 16th April—Lieutenant Chichester, Somali M.I., killed in action.
  Received earliest account from Cobbe 8.30 o'clock last night, 17th April, bearing date 1 10 o'clock in the afternoon, to the following effect:—That he feared that Plunkett had been repulsed with serious loss, started immediately after for Gumburru with 300 2nd Sikhs, 60 3rd Battalion K.A. Rifles. Kenna, with all available M.I.—namely, 100—started at once; at the same time ordered to push on as fast as possible.—COBBE.
  Further information from above mentioned reached me marching. Cobbe encamping with 220 troops; plenty of food supplies and four days' water. He has about 1,000 camels and does not think he can withdraw from there with them without help, because the scrub is thick and the enemy's forces seem likely to act on the offensive.
  I march again directly to-night at moonrise, expecting to arrive at Gumburru to-morrow at noon. I shall accomplish extrication of Cobbe with as much as possible transport and shall return to Galadi. Can only carry sufficient water for march to Gumburru returning

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  direct with Cobbe, and therefore unable to advance against an enemy's forces if he keeps back. Will telegraph as soon as possible with regard to situation of affairs as soon as I shall accomplish extrication of Cobbe.—MANNING, (ends.)

  The Military Riot at Pretoria.
  COLONEL NOLAN: I beg to ask the Secretary of State for War if he can give the House any information as to the five soldiers sentenced to death at Pretoria for being concerned in a military riot.
  MR. BRODRICK: No, sir. No report has been forwarded to the War Office. I have telegraphed for a report, but the hon. and gallant Gentleman is aware that, as these men were tried by the civil power, they have passed out of the jurisdiction of the War Office.
  COLONEL NOLAN: I would like to address the same Question to the Secretary of State for the Colonies.
  Mr. CHAMBERLAINwas not in his place and no answer was returned.

  Madras Law Students.
  MR. HERBERT ROBERTS: I beg to ask the Secretary of State for India whether his attention has been drawn to a notice recently posted in the Madras Law College forbidding the senior students taking part in discussions regarding public affairs; and, if so, will he state whether this notice has the sanction of the Government.
  THE SECRETARY OF STATE FOR INDIA (LORD GEORGE HAMILTON,: I have no information as to the notice referred to in the Question; but it is a well-understood principle that students in Government Educational Institutions in India are expected to abstain from taking part in political agitation.

  Delhi Railway Conference.
  MR. SCHWANN: I beg to ask the Secretary of State for India whether his attention has been drawn to an answer given in the Viceregal Council by the Public Works Member on the 25th of March, to the effect that the proceedings of the Railway
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  Conference held at Delhi on the 2nd of January last had not been submitted to the Government, and that the Government had taken no action thereon; whether he is aware that the Conference was presided over by the Railway Secretary to the Government of India, and that a Government circular letter, dated 18th February, was issued upon the proceedings to all railway administrations inquiring what steps could be taken to increase the employment of Europeans and Anglo-Indians on the Indian Railways; and, if so, whether, in any policy initiated by the Government of India, he will take steps to secure that the employment of Hindus and Mahomedans shall not be interfered with.
  LORD GEORGE HAMILTON: My attention has been drawn to the answers given in the Legislative Council of India on the 25th of March last as to the employment of more Anglo-Indians on Indian Railways, but no action has been taken by the Government of India nor has the matter come under their consideration.

  Lord Ampthill and Imputations on Indian Administration.
  MR. SCHWANN: I beg to ask the Secretary of State for India whether his attention has been drawn to a speech by Lord Ampthill, Governor of Madras, as ex-officio Chancellor of the Madras University, in which he deprecated he discussion of administrative Acts and comments upon the conduct of public affairs and the effect of legislative and other measures affecting the general interest of the country; and, if so, will he state whether he proposes to take any, and, if so, what steps in the matter.
  LORD GEORGE HAMILTON: The hon. Gentleman has misunderstood the purport of that part of Lord Ampthill's speech to which his Question refers. What Lord Ampthill deprecated was not discussion or comment upon administrative acts, but the tone and temper of the imputations not un-frequently made as to the intentions and objects of the Administration. The advice thus conveyed to his audience

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  seemed to me to be both salutary and needed.

  Railway Construction in Northern Nigeria.
  MR. HERBERT SAMUEL: I beg to ask the Secretary of State for the Colonies whether the construction of a railway in Northern Nigeria from Zungeru to Zaria, and thence to Kano, is under the consideration of the Government; and, if so, whether an estimate of the probable cost as yet been made.
  THE SECRETARY OF STATE FOR THE COLONIES (Mr. J. CHAMBERLAIN,: Arrangements are being made for a survey of the country between Wushishi (which is close to Zungeru) and Zaria, with a view to acquiring information which will assist in formulating a policy of railway construction in Northern Nigeria, but no decision has been arrived at as to the actual direction of a railway between those points, and until this has been settled no estimate of the cost of constructing such a railway can be made.

  Native Labour for the Transvaal Mines.
  MR. WHITLEY: I beg to ask the Secretary of State for the Colonies if the experimental recruiting of 1,000 natives in Central Africa for the Transvaal mines has yet begun; and, if so, what rate of wages per diem has been approved by the British Commissioner.
  THE UNDER SECRETARY OF STATE FOR FOREIGN AFFAIRS (Lord CRANBORNE,: This Question should have been addressed to the Foreign Office. The recruiting of natives, up to a maximum of 1,000, is now proceeding in the British Central Africa Protectorate. The following rates of wages have been approved:—Monthly payments to the labourers of £1 10s. without any deduction. In addition the Labour Association will pay 4s. a month for maintenance of wives and families left in the Protectorate, and a sum of 6s. for every native engaged, in respect of hut-tax due to the Protectorate Administration. Papers on the subject are about to be laid.

  The Baghdad Railway.
  MR. GIBSON BOWLES: I beg to ask the First Lord of the Treasury have His Majesty's Government considered that by Article VIII. of the Decree of Monharrem (8th December, 1881) any surplus arising from a modification in the Turkish Customs tariff in case of revision of the treaties of commerce was ceded by the Turkish Government for the service of the Turkish debt in an absolute and irrevocable mariner until the complete extinction of the said debt; and, in view of that cession, can he state how any part of any sums arising from an increase of Turkish Customs duties can be applied towards the provision of payments for the kilometric guarantee proposed to be given to the Baghdad Railway, or be in any other way used in guaranteeing that railway.
  THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Mr. A. J. BALFOUR,: A modification of the terms of Article VIII. would be necessary in order that any part of the surplus arising from an increase of the Customs duties might be applied to purposes other than the service of the Turkish Debt. The consent of the Council of the Ottoman Public Debt, who represent the bondholders, would be necessary for any such arrangement.
  MR. GIBSON BOWLES: I beg to ask the First Lord of the Treasury, are His Majesty's Government aware that on the 31st January, 1902, the directors-of the Anatolian Society, which has the concession for the construction of the Konia-Baghdad-Basra Railway proposed, by a written communication to the-Turkish Government, that the desired kilometric guarantee for the railway of £1,400,000 should be secured on an increase of the Turkish Customs duties,, on the creation of five monopolies of petroleum, alcohol, matches, cards, ands cigarette paper, and on an arrangement for the unification of the Turkish debt; will these monopolies render necessary the prohibition of import into Turkey of or the imposition of prohibitive duties on the five articles named; were His Majesty's Government consulted as to

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  this proposal; have they received a copy of the communication in question; and if so, will they lay it on the Table of this House.
  MR. A. J. BALFOUR: His Majesty's Government have not been informed of the communication to which my hon. friend refers, nor have they been consulted as to the proposal contained in it.
  MR. GIBSON BOWLES: Have the Government not received any information on this matter from the Ambassador at Constantinople?
  MR. A. J. BALFOUR: I understand that we have no such communication from the Ambassador to place before the House.
  MR. NORMAN: I beg to ask the First Lord of the Treasury if he will state whom the British Government has negotiated with, or been in communication with, or derived its information from, in the matter of the Baghdad Railway. I beg also to ask the First Lord of the Treasury if he will state who are the members of the British group of financiers interested in the proposal to provide part of the capital of the Baghdad Railway.
  MR. A. J. BALFOUR: The answer to both these Questions is in the negative.
  MR. GIBSON BOWLES: I beg to ask the First Lord of the Treasury have His Majesty's Government received a copy of the Turkish Convention relating to the Anatolian Railway Company (Baghdad line) quoted by Mr. Vice-Consul Waugh in his report dated 9th March, 1903, as showing that the entire management of the line from Konia to the Persian Gulf is secured in German hands, independent of the nationality of the capital which may be raised to build the line; and, if so, when is it proposed to lay it upon the Table of this House.
  MR. A. J. BALFOUR: A copy of the convention between the Turkish Government and the Anatolian Railway Company to which my hon. friend refers is in our possession. This convention, a
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  summary of which was published in The Times of yesterday, leaves the whole scheme of railway development through Asia Minor to the Persian Gulf entirely in the hands of a company under German control. To such a convention we have never been asked to assent, and we could not in any case be a party to it. The alternative arrangements which have lately been under our consideration were, on the contrary, designed to place the railway, including the existing Anatolian Railway, throughout its whole length from sea to sea, under international control, and to prevent the possibility of preferential treatment for the goods or subjects of any one country. In these arrangements it was suggested, inter alia, that equal powers of control, construction, and management should be given to German, French, and English interests. After careful consideration of these proposals, His Majesty's Government have come to the conclusion that they do not give to this country sufficient security for the application of the principles above referred to; and they have therefore intimated that they are unable to give the suggested assurances with regard to the policy which they might hereafter adopt as to the conveyance of the Indian mails by the projected route, as to facilities at Koweyt, or as to the appropriation of a part of the Turkish Customs revenue in aid of the contemplated guarantee.
  MR. GIBSON BOWLES: I am obliged to the right hon. Gentleman for his answer, and I congratulate the Government on their decision.

  The Passionist Fathers.
  COLONEL NOLAN: I beg to ask the Under Secretary of State for Foreign Affairs if he has any official reports showing that a teaching body of English subjects (the Passionist Fathers) have been lately forced to discontinue their instructions in Paris owing to the late change in the French law; can he state if their property has been left undisturbed; and if any correspondence on this matter has taken place between the-English Embassy and the French Government.
  LORD CRANBORNE: His Majesty's Government have been informed by His Majesty's Ambassador at Paris that the application for authorisation presented by the Passionist Fathers in Paris has been refused by the Chamber of Deputies. The community being thus legally dissolved, a formal application has been made by Sir E. Monson with a view to the re-opening of the chapel in Avenue House he under the ministration of secular priests, and we have every reason to believe that this will be successful. We have no reason to think that there will be any interference with the property of the community. His Majesty's Ambassador has been in frequent communication with the French Government with the object of securing considerate treatment for the community.

  Shipping Legislation.
  MR. HARRIS: I beg to ask the President of the Board of Trade if he will consider the advisability of appointing a committee to examine the question as to how far the legislation applying at present to British shipping trading to ports in the United Kingdom can be extended to vessels belonging to foreign owners.
  THE PRESIDENT OF THE BOARD OF TRADE (Mr. GERALD BALFOUR,: I would suggest to my hon. friend that the most convenient way of dealing with this subject would be for my hon. friend or some other hon. Member to introduce a Bill embodying the views of shipowners. If this is done the Government will be prepared to give favourable consideration to such a Bill on the understanding that if read a second time it is sent to a Select Committee.

  Barnstaple Rural Postman.
  MR. SOARES: I beg to ask the Postmaster-General whether he is aware that Samuel Hopkins, an unestablished rural postman from Barnstaple to Ashford, was dismissed on the ground of ill-health on the 11th instant, no gratuity or pension having been given him; and whether, seeing that Hopkins is now fifty-five years of age, and has been in the employ
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  of the Post Office for over twenty-one years, that he was receiving wages of 19s. 6d. per week, and was already in possession of one good conduct stripe, another being due to him this month, he will, having regard to the fact that Hopkins has no means of livelihood now open to him, consider the advisability of granting him a compassionate gratuity or a pension.
  THE POSTMASTER-GENERAL (Mr. AUSTEN CHAMBERLAIN,: The services of Samuel Hopkins, unestablished rural postman from Barnstaple to Ashford, were discontinued on the 11th instant, because he had been absent through illness for a considerable time and was certified by the medical officer to be permanently unfit for the discharge of his official duties. I regret that his service was not such as to render him eligible for any award under the Superannuation Acts.

  Kiladysert Police and the Press.
  MR. WILLIAM REDMOND: I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland whether his attention has been called to the fact that at the petty sessions court in Kiladysert a reporter was removed from court by orders of District Inspector Patrick; and if so, will he state for what reason and under what authority the police exercised this power.
  THE CHIEF SECRETARY FOR IRELAND (Mr. WYNDHAM,: I have called for a Report on this matter. The district inspector is absent on leave, and I hope to be in a position to reply to the Question on Monday next.

  Evictions on the Berridge Estate.
  MR. O'MALLEY: I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland if his attention has been drawn to the fact that fourteen families were evicted a few weeks ago on the Berridge Estate, in the Carna district of Connemara for non-payment of rent; and, if so, whether he will state the extent of the holdings and rental in these cases; and whether he can take steps, in the Land Bill or otherwise, to deal with the cases of rents upon holdings that are incapable of yielding rent
  MR. WYNDHAM: The number of evicted holdings was eight, and six of these were occupied by joint tenants, or tenants in common. The extent of the holdings varied from sixteen to thirty-one acres; the rental from £5 to £8; and the arrears due from three to; seven years. Seven tenants and sub-tenants were readmitted as caretakers. Section 5, Sub-section 3 of the Land Law Act, 1896, deals with the fixing of fair rents on holdings held by joint tenants.

  Rosscarbery Mail Service.
  MR. EDWARD BARRY: I beg to ask the Postmaster-General whether inquiries have recently been made with a view of establishing a second daily mail service from Clonakilty to Rosscarbery; and, if so, will he state whether he is prepared to give effect to the requests of the people of that town for a second daily delivery.
  MR. AUSTEN CHAMBERLAIN: I have already instituted further enquiries with the view of ascertaining whether it is now possible to provide a second post from Clonakilty to Rosscarbery, and I will inform the hon. Member of the result as soon as possible.

  Roman Catholic University for Ireland and the Irish Land Bill.
  SIR GEORGE BARTLEY: I beg to ask the First Lord of the Treasury whether Section 3, Sub-section (a), of the Ireland Development Grant Bill would enable the Government of the day to establish a Roman Catholic University for Ireland and endow it with the whole or part of the £185,000 a year by simply laying the scheme before the House of Commons for a period of not less than thirty days, and without the scheme being brought before Parliament as a Bill and discussed and carried through the various stages necessary before any measure can become an Act of Parliament.
  MR. A. J. BALFOUR: The Chief Secretary undertook some weeks ago to amend the provision referred to in such a way as to secure the discussion in the House, at a convenient hour, of any positive vote in favour of any proposal,
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  prior to its taking effect. Therefore, it is not open to my hon. friend's criticism. But I would add that anything of such enormous importance and interest as the subject referred to by the hon. Member could not be dealt with even by Resolution before twelve o'clock.
  SIR GEORGE BARTLEY: If this large sum of money is not to be used except in the ordinary way, I do not see why the exceptional course was taken of placing it on the Consolidated Fund.
  MR. A. J. BALFOUR: The Chief Secretary in his speech made out a good case for what I quite admit is an exceptional course.

  THE LONDON EDUCATION BILL.
  DR. MACNAMARA: I beg to ask the First Lord of the Treasury whether he will defer the Second Reading of the London Education Bill until after the London County Council and the London School Board have had an opportunity of considering the proposed measure, bearing in mind the fact that both these bodies had risen for the Easter recess before the Bill was issued, and have not yet had an opportunity of discussing it
  MR. A. J. BALFOUR: I do not think it would be convenient or possible to alter the arrangements we have come to. But, of course, the important bodies to which the hon. Member has referred and other bodies will have an opportunity of expressing an opinion on the Bill between the Second Reading and the Committee stage.

  NEW MEMBER SWORN.
  SIR WILFRID LAWSON, Baronet, for the County of Cornwall (North Western or Camborne Division).

  COUNTY COUNCILS (BILLS IN PARLIAMENT) BILL.
  Reported from the Standing Committee on Law, etc., with Amendments.
  Report to lie upon the Table, and to be printed. [No. 120.]
  Minutes of Proceedings of the Standing Committee to be printed. [No. 120.]
  Bill as amended (in the Standing Committee), to be considered upon Monday next, and to be printed. [Bill 162.]

  SELECTION (STANDING COMMITTEES).
  Mr. HALSEYreported from the Committee of Selection: That they had added to the Standing Committee on Law and Courts of Justice, and Legal Procedure the following fifteen Members in respect of the Borough Funds Bill:—Mr. Brigg, Mr. John Burns, Mr. Caldwell, Mr. Jesse Collings, Mr. Shepherd Cross, Mr. Charles Douglas, Mr. Joseph Howard, Mr. Grant Lawson, Mr. Llewellyn, Mr. Walter Long, Mr. Peel, Colonel Sackville, Sir Edward Strachey, Mr. Tomkinson, and Mr. John Wilson (Durham.)
  MR. HALSEYfurther reported from the Committee: That they had added to the Standing Committee on Trade (including Agriculture and Fishing), Shipping, and Manufactures, the following fifteen Members in respect of the Sheep Scab Bill:—Mr. Buchanan, Mr. Chaplin, Earl of Dalkeith, Sir Michael Foster, Sir Robert Gunter, Mr. Hanbury, Mr. Hudson, Mr. Nicholson, Mr. O'Neill, Mr. Phillips, Mr. Price, Mr. Soares, Mr. Spear, Mr. Vaughan-Davies, and Mr. Warner.
  Mr. HALSEYfurther reported from the Committee: That they had added to the Standing Committee on Law, and Courts of Justice, and Legal Procedure the following fifteen Members in respect of the Local Government (Transfer of Powers) Bill:—Mr. Brigg, Mr. John Burns, Mr. Caldwell, Mr. Jesse Collings, Mr. Shepherd Cross, Mr. Charles Douglas, Mr. Joseph Howard, Mr. Grant Lawson, Mr. Llewellyn, Mr. Walter Long, Mr. Peel, Colonel Sackville, Sir Edward Strachey, Mr. Tomkinson, and Mr. John Wilson (Durham.)
  Reports to lie upon the Table.

NEW BILLS.

  HOME INDUSTRIES BILL.
  "For the better regulation of Home Industries," presented by Colonel Denny; supported by Mr. Charles Douglas, Mr. John Burns, Mr. J. W. Wilson, Mr.
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  Emmott, and Mr. Fenwick; to be read a second time upon Friday 17th July, and to be printed. [Bill 163.]

  EDUCATION (BORROWING) BILL.
  "To provide for the borrowing by Local Education Authorities for certain purposes," presented by Mr. Long; supported by Mr. Grant Lawson; to be read a second time upon Monday next,, and to be printed. [Bill 164.]
  BUSINESS OF THE HOUSE (WAYS AND MEANS.
  Ordered, that the Committee of Ways-and Means have precedence of the Business of Supply this day, and that the proceedings of the Committee of Ways and Means, if under consideration at Twelve o'clock this night, be not interrupted under the Standing Order (Sittings of the House).—(Mr. A. J. Balfour.)

  WAYS AND MEANS.
  Considered in Committee:—
  (In the Committee.)
  [Mr. J. W. LOWTHER (Cumberland, Penrith) in the Chair.]

  THE BUDGET STATEMENT.
  THE CHANCELLOR OF THE EXCHEQUER (Mr. RITCHIE,: Sir, it has been my privilege for a great many years to listen to the Chancellor of the Exchequer explaining to the-Committee the financial position and his-proposals for the year I confess I have always felt a great deal of sympathy with previous Chancellors of the Exchequer in their discharge of what I have always thought has been certainly a complicated, and often a very difficult task. But, great as has been my sympathy with previous Chancellors of the Exchequer, it has never been so-profound as it is with the present Chancellor of the Exchequer. I feel that I shall require at the hands of the Committee all the consideration and indulgence which it is in their power to-grant tome to enable me to accomplish, even with moderate satisfaction, the task which now lies before me; and I am satisfied that, under all the circumstances, I shall not make an appeal for

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  that consideration and indulgence in vain, but that it will be readily granted to me. I have peculiar difficulties to encounter in fulfilling the task which I have now to discharge. I am comparatively new to the responsibilities of the high office which I have the honour to hold; and I succeed a Minister who occupied this position, and, I think, occupied it with satisfaction to the Committee and to the House for a great many years, and who, at any rate during the latter portion of his term of office, had to deal with a very difficult situation. He had to finance a great and prolonged war—a task which, I hope, will not fall to the lot of any Chancellor of the Exchequer of this country for many years to come. He had to come down to the House and ask power from the Committee to impose, year after year, fresh taxation; and, in doing so, he displayed courage, resource, and above all, consideration to a very great degree. I am sure that even those who suffered, or thought that they suffered, from the new taxation which he had to impose will be the first to recognise that, consistently with the duty which he thought devolved upon him, he endeavoured to meet all the objections and suggestions which were made to him with the greatest consideration; and however much they disliked the taxation, they could not but admire the manner in which that taxation was imposed upon them.
  My task is a more agreeable one than that of my right hon. friend. His task was to impose taxation. My task, I am glad to think, is to remit taxation. But do not let the Committee imagine that this task, although perhaps not attended with the same difficulties as the other, is by any means free from difficulty. I can assure the Committee that if they had the opportunity of studying my correspondence for some considerable time past they would find that, in comparison with the money I have to give away, the claimants are very numerous indeed. It is not an easy matter, when one has a limited sum to give away, to choose between the various directions in which it can be applied and to give satisfaction to all those who have made application. I have no doubt that, having regard to the fact that taxation is to be remitted, the
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  Committee would gladly dispense with the long introduction which Chancellors of the Exchequer naturally have to make, and would like me at once to come to the point. I am afraid that my duty is to conduct them to that goal through, perhaps, long and tortuous and paths; but I can promise the Committeethat, that if they will give me the patient hearing which I am sure they will give me, I will endeavour to mitigate their distress as much as I possibly can, and to go as rapidly over the various subjects with which I have to deal as I can, with justice to them and to the Committee. But, as the Committee will understand, I have necessarily much ground to traverse.

  CONDITION OF TRADE.
  One of the first concerns of the Chancellor of the Exchequer is the position of trade and industry; and I am glad to say that the trade and industry of 1902, although not so good as in 1900, which, as the Committee knows, was a bumper year, were still in many respects better than in 1901. In some respects they were not so good. For instance, there is, so far as the returns show, a rather larger percentage of unemployed, al though the percentage is by no means great, and will compare favourably with the average, yet it is somewhat larger than in both 1900 and 1901. Wages are also somewhat lower than they were in 1900; but the Committee will remember that the wages of 1900 were at a very high level; and it is not therefore surprising that, trade not being so brisk as it was then, wages have to some degree suffered. What is a very satisfactory feature of the case, I think, in a falling market for wages, is that there have been, comparatively, very few trade disputes. Both employers and employed have dealt with this question of wages in a conciliatory manner; they have met together in a friendly way to discuss the situation, and, as is the case in the great majority of instances where employers and employed can be got together to discuss the situation, they have been able between themselves to arrive at a conclusion with regard to wages which has been comparatively satisfactory to

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  both—at any rate, it has been reached without any strikes or serious trade disputes. The foreign trade of the country, I am glad to say, shows an increase both in imports and exports. The home trade of 1902 also shows an improvement; and there has been an increase in the production of coal and iron. Railway traffic itself, which is important as an indication of the state of trade, has shown an increase of receipts both in goods and passengers. Bankers' clearances show considerable increases; and the tonnage of vessels entered and cleared with cargoes shows an increase of over 1,500,000, equal to 4 per cent., and I am glad to say almost the whole of that increase has been in British bottoms. I claim, therefore, that this state of things is not only satisfactory in itself, but that it may be considered fairly satisfactory when we come to compare it with the depression which, exists elsewhere. The figures for 1903, as far as they have gone, are encouraging; and, while I do not think there is any great scope for jubilation with regard to our trade figures, I think there is much to inspire courage. But there is also much which should entail caution upon us; and I think the lesson we have to learn is in the direction which I have just hinted, that capital and labour should endeavour to draw closer together with a view to mutual understanding, knowing as they do that what is in the interest of one is in the interest of the other, and by friendly conferences and putting shoulder to shoulder they should strengthen their power of competing with foreign countries.

  STATE OF THE MONEY MARKET.
  With regard to the money market I need hardly say it has been a very difficult one; money has been very scarce and very dear. There have been great demands made by the Government to meet expenditure in South Africa, and they have been met, I am bound to say, in a patriotic manner. Along with the Government demands for money there have also been, as the Committee knows, demands on the money market from various quarters; and what is hanging somewhat like a cloud at the present time over the money market is the
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  anticipation of further demands by the Government. It should, however, be remembered that the coming Transvaal demands are for conversion of securities and for reproductive works, that the war, which has been such a strain, is now over, and that the Sinking Fund is again in full operation and will, I trust, be strengthened. The question of depression in Consols, a very important one, will be referred to hereafter. I hope, however, to show in regard to that that there is nothing to excite either alarm or apprehension in connection with what is, and what will, I hope, always remain, the premier security of the world.

  FINANCIAL OUT-TURN, 1902–3.
  I now passon to the out-turn of the past year, and in order that it may be followed it is necessary for me to go back briefly to the proposals of my predecessor, who, it will be remembered, last year produced what I will call a first edition of the Budget in April, when the war was going on, and the second edition in June, after peace had been concluded. The financial proposals of the first edition of last year's Budget were as follows: the expenditure for which the Chancellor of the Exchequer found he had to provide, after the suspension of the Sinking Fund, was £170,719,000; but as the end of the war was not in sight, he put the probable supplementary requirements at £17,750,000, bringing the aggregate requirements up to £188,469,000. To meet this expenditure he estimated that the existing sources of revenue would yield £147,785,000, and the additional taxes £5.150,000, together £152,935,000, the deficit with which he was thus faced amountingto£35,534,000. This deficit he intended to meet out of the proceeds of a loan of £32,000,000 Consols, and by draft on existing balances. But some weeks afterwards peace was arranged, and he was enabled to dispense with almost all the supplementary requirements. He had, however, already raised his Consols loan, issuing the stock at 93½, which would produce £29,920,000 in cash. This being so, he was strongly urged to drop his additional taxation. There was, however, considerable uncertainty about the requirements on the cessation of

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  actual fighting; and he told the Committee that, if it turned out that he had more money than he required, he could usefully employ it in extinguishing some portion of the floating debt, and, more over, he attached great importance to the re-establishment of the Sinking Fund at the earliest possible moment. Therefore, he resisted the temptation to dispense with the extra taxation, and, after re-establishing the Sinking Fund, the expenditure he had to provide for was £176,359,000. He expected the revenue, including the additional taxation, barring the duty on cheques, which he had abandoned, and after certain concessions in regard to the Corn Duty had been made, to yield £152,185,000. The deficit, therefore, was £24,174,000, which would be more than met by the estimated proceeds of the Consols loan, which amounted to £29,920,000; and he would thus have £5,746,000 spare cash, which would be available for unforeseen expenditure, or the repayment of debt. The wisdom of this arrangement made by my right hon. friend has been proved by subsequent events. Making peace has proved almost as costly as making war. If it has not been quite as costly, the cost has still been very considerable. It was found necessary in the autumn to help the Transvaal and Orange River Colony burghers on their return to their homes, and in making good some of the losses incurred in the war by other persons, these outlays involving an estimated expenditure of £5,000,000 in all. It was also deemed necessary to provide the Colonial Governments temporarily with money to enable them to make advances to their people; and the Imperial Government for this purpose granted a loan to the Colonial Governments of £3,000,000, which was included in the Supplementary Vote.

  EXPENDITURE, 1902–3.
  Let us see how the actual expenditure, as represented by Exchequer issues, compares with the estimated expenditure. In 1902–3 it amounted to £184,484,000, and it therefore exceeded the provision made last year, which was £176,359,000, by £8,125,000. This difference is almost wholly to be accounted for by the
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  supplementary provision for the requirements of the Transvaal and Orange River Colony, to which I have just referred. The total expenditure of £184,484,000, however, does not represent the entire outlay for which the State had to provide in 1902–3. Besides this, it handed over to the local authorities revenue amounting to £9,767,000; and it had to find money for expenditure chargeable to capital account, which came to £6,876,000; so that the grand total of the expenditure provided for by the State was no less a sum than £201,127,000. I will not trouble the Committee with the details of the issues on capital account, because the figures have been inserted in the paper in the hands of hon. Gentlemen.

  COST OF THE WAR.
  Before I have done with the expenditure for 1902–3 there is a subject on which the Committee will wish to have some information, and to which I rejoice to think that I can refer almost entirely in the past tense—I mean the war expenditure. The Committee will want to know what is the total charge which the war has entailed upon us, and also how much of the war expenditure has been met from taxation and how much from borrowed money. I will do my best to give the Committee full information on the subject, but they will understand, I am sure, that it is one which bristles with difficulties, and that almost impossible to earmark with any accuracy the charges due to a great war. You cannot draw any precise line between the expenditure which has been caused by the war and the expenditure which would have been incurred had there been no war. Even if you could, I doubt if an estimate of the cost of the war, which included all the many indirect additions to expenditure which must result from the war, would serve the purpose of the Committee. The definition of cost, I submit, must be framed on common sense lines, and after much consideration of every alternative method, I have come to the conclusion that I cannot give the information in any better form than that in which it has already been presented in a Return moved for by the hon. Member for Poplar. I do not claim for it, and no one

  235
  could claim for it, that it is absolutely accurate, but it is certainly as accurate as any other return is likely to be, and therefore if the hon. Member for Poplar will move for a return of a similar character to that which he has already obtained, I shall be very happy to giant it. The matter is one which is quite familiar to the Committee, and I do not propose propose on this occasion to go into the details, but I will give one or two leading points. The charges on account of the wars in South Africa and China during the last four years up to the 31st of March, 1903, are estimated to have amounted to £217,000,000, or more than a quarter as much as the computed cost of the great French war which lasted eight times as long. Of this amount there was defrayed out of revenue £67,500,000. There will, therefore, have been met out of capital a balance of £149,500,000. This means that 31 percent of the expenditure was charged to income and 69 per cent. was charged to capital. It must be remembered, however, that we shall got at an early date £4,000,000 from the Transvaal Guaranteed Loan, and we shall also get £30,000,000 in respect of the war contribution which the Transvaal has to make us in addition to the repayment of the sum of. £3,000,000 temporarily advanced last autumn to the Transvaal Government. There is also the British share of the Chinese indemnity to be borne in mind, which may be put at about £6,000,000. In this way it may ultimately prove that the net amount to be charged to capital on account of the war expenditure is not more than about £110,000,000 or £40,000,000 less than the amount I stated above. In this case the proportion will have been 38 per cent. charged against revenue, and 62 per cent. charged against capital.
  MR. SYDNEY BUXTON: That includes the amount due to the suspension of the Sinking Fund?

  REVENUE, 1903–3.
  MR. RITCHIE: The calculation is on the same lines as in the former Return. I turn now to the other side of the account—the amount of the revenue. Taken as a whole, the amount paid to the
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  Exchequer very closely approximated to Estimates finally made by my right hon. friend the Member for West Bristol. His estimate was £152,185,000 and the amount brought to account was £151,552,000, so that the receipts fell short of the estimate by £633,000—a very small difference indeed, I think, on so gigantic an amount, and one which reflects the greatest credit on those who had the framing of the Estimates. The deficiencies were: in Customs £767,000, in Excise £600,000,in no-tax revenue £166,000, together £1,533,000. These deficiencies were in part made up for by excesses in death duties representing £650,000, house duty £50,000, and income tax £200,000, together £900,000, leaving a deficit, as I have said, of £633,000.
  I do not think it will be necessary to trouble the Committee with any great detail in reference to this revenue, but I ought to make one or two observations with respect to it. The part of the revenue that did least well was Customs, and the two articles on which the chief deficiencies took place were sugar and tea. The deficiency in the sugar revenue is due to more than one cause. It is due to the very large stocks that were in hand at the beginning of the year in consequence of the rush to clear, for fear of a rise in the duty, and also to the fact that the beet crop of 1902–3 was nearly 1,000,000 tons less than in 1901–2, which was a record year. It is perhaps also due in some degree to the suspense of operations connected with the Brussels Convention and to doubts as to the United States Treaty with Cuba, and likewise to the fact that bounty fed sugar can be stored more cheaply in the country of production than it can here. The deficiency in tea is in the main attributable to the anticipation of a reduction of the duty and the accustomed holding back. The only other Customs article to which I need refer is corn, on which the Is. duty was last year re-imposed, and which has brought in nearly £2,350,000. Before leaving this part of my subject, I should like to say, and I think it is only just and right to say it, that the Customs have been very much assisted in the performance of a very difficult work in connection with the new duties by the manner in which they were met by the trade, who

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  cordially co-operated with them in en-deavouring as far as was possible to remove the difficulties that existed. I now come to the Excise. Neither beer nor spirits were quite up to the mark. Beer stood still. Spirits advanced as compared with the previous year, but not so much as we had hoped. Of course there are compensations. The failure of the first may be taken to be due to a cold summer, which does not promote thirst, the second to a warm winter which does not promote the consumption of spirits. So owing to the cold in the one case, and the heat in the other we have not derived quite the revenue which we anticipated. There was nothing abnormal about the death duties. There was no exceptional number of large estates, and the level of values has continued low, so that the good progress we have made may be put down to the extraordinary work in connection with the collection of arrears.
  Notwithstanding the high rate at which the Income Tax was fixed, the produce has been more than satisfactory. It was not in any way due to any special pressure on the part of the collectors, for nothing is more remarkable than the fact that, notwithstanding penny after penny being added to the Income Tax, there is no appearance of any falling off, but quite the contrary, in the moneys derived from the payers of Income Tax. The Post Office receipts were hardly up to the mark, but there is nothing disquieting about them. The falling short in the Miscellaneous Revenue is more than accounted for by the diminished demand for silver and the consequent shrinkage of the profit made by the Mint.

  THE BURDEN OF TAXATION.
  Of this revenue of £151,552,000, a sum of £129,933,000 represents the proceeds of taxation, and, if we want to arrive at the total proceeds of taxation, we must add to this the amount of revenue assigned to local authorities, which I have already stated to amount to £9,767,000, bringing the aggregate up to £139,700,000. It is a record amount, and one which I hope from the bottom of my heart will remain a record amount. It means that we
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  emerge from the war with a burden of £3 6s. 7d. per head of the population. The burden was high enough, Heaven knows, but at all events we emerged with a less heavy burden than was laid upon us at the conclusion of the great French war, one which we are much better able to bear. In 1815, when peace was re-established with France, the burden on the British taxpayer was equal to £3 16s. per head. The Committee may be interested to know how much of this enormous sum of £139,700,000 was raised by indirect taxation which, though it falls on the community at large, is more particularly felt by the poorer classes, and how much by direct taxation, which falls almost exclusively on the better-to-do. We must first, however, eliminate the coal duty, which produces £2,000,000, but falls under neither of those heads. So we have to deal with a total of £137,700,000 which represents a burden of £3 5s. 8d. per head of the population. Of the total taxation £65,330,000 was raised by indirect taxation, entailing a burden of £1 14s. 6d. per head that is to say 47·5 per cent. has to be set down to indirect taxation, and 52·5 per cent. to direct taxation.

  BALANCE SHEET, 1902–3.
  Having passed in review both sides of the account for the last year, I find that the expenditure of 1902–3 having been £184,484,000 and the revenue having been £151,552,000, the deficit amounted to £32,932,000. This deficit has been met mainly by the proceeds of the Consol loan, amounting, with prepayments under discount, to £29,875.000, and the remainder, namely £3,057,000, has been taken out of balances. This represents almost exactly the amount of £3,000,000 repayable to us out of the Guaranteed Loan which we have advanced to the two colonies. A statement of the balances will be found in the hands of the Committee.

  REVIEW OF NATIONAL DEBT, 1902–3.
  Before I come to deal with the figures of the new year, I must make a few remarks on the National Debt. The broad features of the National Debt

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  last year were two. First, there was a large issue of Consols in connection with the war; and secondly, the Sinking Fund, after being suspended as far as it could be for two years, was re-established. I draw a distinction, as my predecessors have done before me, between what may be called the dead-weight debt, the debt for which there is nothing to show, and the other debt for which there is something to show in the shape of capital works. The Funded Debt on 31st Match last stood at £640,086,000, having on the one hand been increased by £32,000,000 Consols, and reduced, on the other hand, by the operation of Life Annuities and other miscellaneous means by £1,501,000; that is, having been augmented on balance to the extent of £30,499,000. The liability in respect of terminable annuities stood at £55,560,000, having been reduced in the year by the operation of the Sinking Fund to the extent of £4,735,000. The Unfunded Debt remained unchanged at £75,133,000, so that at the end of last year the total of the dead-weight debt was £770,779,000. To this total there should be added other liabilities which, having been increased by £7,370,000 in the year, stood on the 31st March last at £27,570,000, so that the State's aggregate liabilities amounted to £798,349,000, having been increased in the year by £33,134,000. The Committee will wish to know how much of the National Debt was necessitated by the war. I give the principal details. First: the Funded Debt was increased by the creation of Consols for £92,000,000; the Unfunded Debt, by the creation of the War Loan, amounting to £30,000,000, by Exchequer Bonds for £24,000,000, and by Treasury Bills for £13,000,000, altogether £67,000,000. The total War Debt thus comes to £159,000,000. This is an enormous sum to have raised in two years and a half, and I think it is very satisfactory that we have been so loyally and readily supported by the City. I doubt if my right hon. friend's difficulties have been appreciated. He had conflicting interests to reconcile as best he could; the interests of the nation which had to borrow on so gigantic a scale, and the interests of the Money Market which had to find such huge sums. I think it is wonderful how well he surmounted those difficulties, and I
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  believe the interests of the tax-payers were well protected.

  THE FALL IN CONSOLS.
  Before leaving the subject of the National Debt, the Committee will expect me to say something about Consols and their fall. Much has been said and written with regard to the fall in Consols, and in some minds, apparently, there exists apprehension and even dismay at what they allege to be the great fall in the credit of the country. No doubt the fall has been very great, but before I come to the conclusion of the observations I have to make on this important subject, I hope that the Committee will agree with me that there is no reason for either apprehension or alarm. The fall has undoubtedly been very great, but both the high price which was reached by Consols at one time and the low price which they have touched lately have undoubtedly been abnormal, because of the peculiar circumstances of the time, both at the one period and at the other. The Committee will remember that in the year 1890 there was a great financial crisis. Confidence was much disturbed and shaken, and people in the City hardly knew from one day to another what might be expected to occur. The consequence was that all the financial houses in the City and elsewhere fortified themselves to meet any great demand that might be made upon them. And how did they make provision for meeting any demand that might arise? They made it by adding money to their tills, by taking care that they had large supplies of ready money. And how were they to obtain those large supplies of ready money? By the sale of securities. And the securities which are, I would almost say alone readily saleable at such a time as we saw in 1890 are Consols. Consols were very largely sold by all the financial houses in the City and elsewhere, in order to strengthen their position, and the money was added to the available balance which it was thought prudent on the part of those houses, to have ready for any sudden demand which might be made upon them. The consequence was that Consols, which were already below par,

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  fell several points, and it must be remembered that at that time the interest was not 2½ as now, but 2¾ per cent. A period of cheap money followed some time the crisis. There was a rapid output of gold in South Africa and American money, owing to the silver panic in the United States, poured into the British market for investment. The Bank rate for some years stood as low as 2 per cent., but even that did not represent adequately the low price of money at that time, because; although the rate of discount in the Bank was 2 per cent., everyone who had anything to do with the City at that time knows that discounts could be obtained readily at considerably below the Bank minimum, and that, in point of fact, day to day money was often lent as low as ¾ per cent., and even ½ per cent. Trade was not active, the Money Market was deluged with money, and the natural consequence was that people who found they could make a good profit by buying consols which yielded to them 2¾ per cent. and borrowing money from their bankers for which they had to pay ½ to ¾ per cent., went in largely for that profitable transaction. In addition to these causes which operated to raise the price of Consols again, the Government became a large buyer of Consols because of the growth of the Savings Banks deposits, which always increase largely when money is very cheap, but do not grow so largely when money is very dear. We had, as the Committee knows, to borrow at one time a good deal of money in connection with the redemption of Consols. When that operation ceased, more money was available, and so the Government added to the money which was in the market. All these circumstances created a great demand for Consols, while the supply of the material became shorter and shorter, with the inevitable result that Consols were forced up abnormally high. Then succeeded a period of great trade activity. Money was wanted; it became dear; and down went Consols again. The South African War ensued, expenditure increased, Government became large borrowers, the Sinking Fund was suspended, less money was paid into the Savings Banks, less gold came from South Africa; and another cause which operated, I think, was that people did not quite realise how soon Consols were
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  to come down from 27¾ to 2½ per cent. The category of Trust securities was enlarged; colonies and municipalities came into the market to borrow, and what wonder, then, that Consols had fallen, and fallen materially? To sum up the situation; we have during the last twelve or thirteen years been through two distinct periods; one of extraordinarily cheap money, so cheap that we were able to borrow twelve months Treasury Bills at the rate of interest of 13s. 9d. per cent. per annum—the other a period of extraordinarily dear money, so dear that we had to pay as much as £4 17s. 5d. per cent. per annum for six months bills. The cheapness and dearness of money would in any case have produced a marked rise and an equally marked fall in Consols; but the cheapness and dearness were both attended with exceptional circumstances which made the rise and fall more marked. When people talk of a record depression, and compare the price of Consols now with the price in 1870, they are not comparing like with like. They seem to forget that the stock is now of a different denomination. It was 3 per cent. in 1870; it is 2½ per cent. now. It is, therefore, clear that a simple comparison between the prices of Consols in the two epochs gives no index of the comparative credit of the country then and now. Let us examine for a moment what is the equation of the two stocks both quoted at 91. With Consols at the price of £91 in 1870, the yield was nearly £3 6s. per cent. Now, at the same price, it is only £2 15s. So that the investor who in 1870 paid £91 to obtain an annual dividend of £3 would now pay £109 4s for the same annuity. That is I to say, that, if we ignore the fact that a stock above par is naturally depressed by the prospect of ultimate redemption, and if we suppose that the Three per Cent. Consols existed now, they would stand at over £109, or 20 per cent. higher than in 1870. Yet people, in the, face of figures like these, are apprehensive as to the credit of the country.

  CONSOLS AND FOREIGN GOVERNMENT STOCKS.
  Before I leave the subject of Consols, I should like to refer to a correspondence which was opened by my hon. friend the Member for Exeter, whose opinion as a financial authority must

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  necessarily have great weight. My hon. friend has drawn a somewhat depressing comparison between our credit and the credit of foreign countries in the past and present, as represented by the prestige enjoyed in the Money Market by the respective Government stocks. He makes out that, as compared with average prices during the period from 1895 to 1898, our stock has fallen much more than that of other countries. But it is hardly fair to take that period for comparison, because it was marked by quite an exceptional rise in the price of Consols, while there was no corresponding simultaneous rise in the price of foreign stocks. For the purpose of comparison I take the yield and not the price of the different stocks because of the difference of denomination. The yield of Consols fell from £2 6s. in 1895 to £2 in 1898, while the yield of French Rentes fell from £3 to £2 19s. only, and the yield of German Three per Cents, actually rose from £3 2s. to £3 4s. But if we are to draw comparisons, I think we ought to deal with a much longer period of time, so as to avoid the concatenation of extraordinary circumstances which has been so upsetting to our calculations. Let us take the period of ten years, and what do we find? We find that in 1893 Consols yielded £2 12s. per cent., French Rentes £3 2s., and German Three per Cents. £3' 10s. 6d. At the present time Consols yield about £2 15s., French Rentes £3 1s. 3d., and German Three per Cents. £3 6s. 4d. Thus the prestige of French Government securities is much what it was ten years ago. that of British securities is a little lower, and that of German securities a little higher. If we bear in mind that German Three per Cent. stock did not come into existence until 1891, and, therefore, had hardly secured an established position in 1893, the difference to our disadvantage is very slight. When we also remember that we have gone through a great war, which necessitated our borrowing over £150,000,000, I think we may congratulate ourselves on the fact that the difference is not more marked; and that we may, with a light heart, put aside all the sorry prognostications made of late with regard to the financial
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  position of the great stock of this country.

  EXPENDITURE 1903–4—THE FIXED DEBT CHARGE.
  I come now to the amount of-expenditure for which I shall have to provide in 1903–4—namely, according to the Estimates, £144,331,000. The only item upon which I think I need comment is the charge in respect of the National Debt. Sir Stafford Northcote in 1875 instituted the system, which has existed ever since, of a fixed annual charge. That fixed annual charge had two duties to perform—to cover all the obligatory payments and to provide for the repayment of capital. Of course, as the debt diminishes, the interest paid out of this fixed sum becomes less and the Sinking Fund becomes greater. That is the simple way in which the Fixed Debt Charge works. The system is one from which I think the country has derived very great advantages. Certainly I have no intention of departing from it. On the contrary, I hold most strongly that it is in the highest degree necessary both for the maintenance of our credit and the stability of our finance, that a fixed debt charge should be maintained; and maintained at such a figure as to provide a Sinking Fund for the extinction of debt adequate to the amount of the debt. It is rather curious to notice that the debt at the time when Sir Stafford Northcote instituted this charge, which he fixed at £28,000,000, was almost precisely the same as it is now. It was then £769,000,000, as against £770,000,000 at the present time. But it will be remembered that the interest on the debt at that time was 3 per cent., instead of 2½ per cent. as it is now. Therefore, a very much larger proportion of this fixed charge of £28,000,000 had to go in payment of interest, and a very much smaller sum in extinction of debt than would be the case with a fixed charge of that amount now. I estimate that an annual charge of £25,500,000 would now be as effective for the redemption of the debt as £28,000,000 was at that time. The amount of the annual charge has been varied more than once. I shall be perfectly prepared, if necessary, to defend the variations that have taken place;

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  but I do not consider it necessary to trouble the Committee by doing so at the present moment. The amount of the annual charge fixed in 1899 by the right hon. Gentleman who preceded me at the Exchequer was £23,000,000; of which £17,250,000 went for interest and £5,750,000 for extinction of Debt.
  It now becomes necessary to reconsider the amount to be allocated to the annual charge. The Committee know that there is at present a considerable sum, amounting to about £4,500,000, interest on the war debt, which is at present outside the I fixed charge. It is quite clear that it is not good finance that that amount should remain outside the fixed charge. It would be absurd to have one portion of the interest on our debt inside the fixed charge and another portion outside. Therefore I propose to bring the interest on the war debt within the fixed charge. In determining the amount at which that charge should be fixed there are certain considerations which the Committee must remember. One is that, in pursuance of the memorable conversion scheme which was carried out by my noble friend Lord Goschen, and which will always be associated with his name, Consols have now become 2½ per cent. stock, and the charge for interest is lightened by ¼ per cent., which amounts to an annual sum of £1,250,000. Another consideration is that, as a consequence of the war, we have added no less that £159,000,000 to the National Debt. Before, however, deciding finally what shall be the annual debt charge, the Committee should bear in mind another consideration; and that is that, in pursuance of the arrangement made by my right hon. friend the Secretary for the Colonies, we confidently hope to obtain from the Transvaal this year—and it will be obtained immediately—£4,000,000 out of the proposed guaranteed loan in repayment of colonial expenditure which we had previously provided for out of Imperial funds, and in the course of the three following years a further sum of £30,000,000, by way of contribution towards the expenses of the war. Bearing all these considerations in mind, I come to the question at what amount should the annual debt charge be fixed, so that it should not be too heavy a
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  burden for the taxpayer, and yet bear a proper proportion to the a amount of the debt, I think there is nothing so well calculated to raise and maintain our credit as large purchases on account of the Sinking Fund. I have therefore decided to fix the annual debt charge at £27,000,000.

  AMOUNT OF PROPOSED SINKING FUND.
  It is estimated that from this amount there will be available for the Sinking Fund during the year £6,600,000, as compared with £5,750,000 last year; but as we receive the payments on account of the war from the Transvaal the amount available for the purpose will be largely increased, and at the end of five years it will be nearly £9,000,000, or 1·25 per cent. of the entire debt. Let us see how this compares with former years. On March 31st, 1875, the debt was £769,000,000, and the Sinking Fund portion of the debt charge in 1875–76 was £4,092,221, or ·53 per cent. of the debt. On March 31st, 1887, the debt was £736,000,000, and the Sinking Fund in 1887–88 was £4,963,000, or ·67 per cent. On March 31st, 1889, the debt was £698,000,000, and the Sinking Fund in 1889–90 was £5,100,000, or ·73 per cent. On March 31st, 1899, the debt was £627,000,000, and the Sinking Fund in 1899–1900 was £5,800,000, or 7·92 per cent. On March 31st last the debt was £770,778,000, and the Sinking Fund will be £6,600,000, or ·85 per cent. On March 31st, 1908, we calculate that the debt will be £694,000,000, and the Sinking Fund £8,841,000, or 17·25 per cent., the largest amount, both absolutely and proportionately, which has ever been applied. It must be borne in mind that the Sinking Fund will be much more operative, with Consols at or below par, than it has been for some time past. I believe I am not taking too sanguine a view of the operation of the Fund when I say that, if the debt is not added to, and if the annual charge is maintained at the proposed amount, the whole of this gigantic debt can be wiped out within fifty years from now. That is a startling proposition, but I believe it to be none the less true.
  MR. WILLIAM REDMOND: You will have some more wars before then.

  TOTAL EXPENDITURE 1903–4.
  MR. RITCHIE: The fixed Debt charge, then, being £27,000,000, the total expenditure for 1903–04 will stand at £143,831,000. To this must be added this year's proportion of the proposed Development Grant to Ireland in the Bill now before the House, two-thirds of £185,000, or £123,000, so that the total expenditure I have to provide is £143,954,000. It is a very formidable expenditure to meet, and, speaking as Chancellor of the Exchequer, I naturally have a very sincere sympathy with those who press for its reduction.

  BURDEN OF NAVAL AND MILITARY EXPENDITURE.
  The most formidable part of it, the part which strikes the imagination most, is the amount spent on our armaments—£34,457,000 on the Navy, and, after allowing for the extraord nary services for which we have to provide this year, £27,588,000 on the Army—in all £62,045,000. That is a gigantic amount, and I do not wish to minimise it at all. But when people talk about the country being "bled to death in time of peace," or say that "flesh and blood cannot stand" such an expenditure, I would like the Committee to consider for a moment how we have stood such a crushing burden in the past, remembering always that the burden is relative to the back which has to bear it.
  MR. JOHN WILSON: The sugar tax and the poor.
  MR. RITCHIE: People forget that our back is much broader now. What was the burden on the taxpayers of a generation and a half ago? Let us cast our memories back to forty years ago, to the year 1863–64, when our military charges had undergone a great reduction, when economy, under Mr. Gladstone, in accordance with public opinion, was in full swing. The Army and Navy Estimates proposed in that year appear to us, by comparison, ridiculously small—on the Army, £13,107,000, and on the Navy £10,556,000—no more
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  than£23,663,000 in all. Now what proportion does that expenditure bear to the national income of that day—which, in other words, is the back which has to bear the strain? How are we to estimate the national income? No doubt it is an extremely difficult and problematical calculation to make—so difficult and problematical that I hardly like to attempt to make it. But as regards what is believed to represent about one-half the aggregate income of the nation, we are on safe ground. We have got the gross assessments to the Income Tax. I have excluded for the present purpose incomes derived from Government securities, for two reasons—in the first place, because such income is not earned, but is merely abstracted by means of taxation, and because, in the second place, this will eliminate the greater part of the incomes drawn by foreigners from this country, for presumably their principal holdings are in our Government securities. Having made these deductions, we arrive at a gross assessment to the Income Tax in 1863–64 of £314,300,000, and the Army and Navy outlay of £23,663,000 in that year represents 7·5 per cent. on £314,300,000. The corresponding gross assessment to the Income Tax in 1903–04 we take to be £879,000,000. Now, 7·5 per cent. upon the latter figure would be £65,925,000 while the actual provision proposed for the ordinary Navy and Army services is, as we have seen, £62,045,000. So it may be said that, even with the present gigantic armaments, we are proposing to spend now less relatively to our means than we were spending forty years ago. This may be thought surprising; I believe it to be accurate. It may be interesting to know the respective burden per cent. on the Army and Navy in the periods under comparison. In 1863–64 the burden per cent. of the Navy was 3·3, whereas for 1903–04 it is 3·9. In 1863–64, when economy was-fashionable, the percentage of burden of the Army was 4·2; in 1903–04, when, unfortunately, economy has gone out of fashion, it is 3·1. So, while the naval burden has relatively increased, the military burden has relatively decreased. So far, therefore, as the burden on the country of our naval and military

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  expenditure is concerned, it is some comfort that we are not worse off, but better off, than we were then.

  DESIRABILITY OF REDUCTION OF ARMAMENTS.
  But I hope that my having drawn that comparison will not lead the Committee to believe that I wish to make light of our expenditure on armaments. On the contrary, necessary though it may be, I confess I view it with great concern, more especially when our annual outlay on other objects is inevitably growing at such a pace. As regards Army expenditure, I hope we may be able to make considerable reductions in the next year or two, as reorganisation on a normal peace footing becomes complete. With regard to the Navy, a strong fleet for us is not a matter of advantage or convenience only; it is not a mere gratification of national pride; it is for us a matter of life and death. It is not an instrument of aggression, it is the safeguard of national existence. And more, it is not a matter, I am glad to think, of party controversy. Our trade and industry, the trade and industry of our colonies and dependencies, our supplies of food and raw material, the employment of our people, all depend on our supremacy at sea. To preserve this we will grudge no cost. Certainly, so far as I am concerned, I will never be responsible for crippling the efficiency of our Navy by refusing to find the means for maintaining our command of the sea. Cobden once declared that he would spend £100,000,000 to maintain the irresistible superiority of our Fleet; and there is not, I feel sure, any responsible body of persons who would not be prepared to agree with Cobden. Our naval preparations are no menace to any foreign Power. Happily we are on friendly terms with all. When Cobden gave expression to the opinion I have quoted it was of France that he was thinking. I am very glad to know that our position is quite different to-day. The relations between the two Powers are of the most cordial description. We all hope that the mutual feelings of respect and regard which animate the Governments and peoples of the two countries, so strikingly shorn by the cordial welcome which is being prepared
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  for the King on his visit to France, will year by year become stronger. It is no jealousy of any Power which compels us to spend more and more on our Fleet. So long as other fleets grow, our Fleet must grow also; but there are not wanting, I am glad to think, indications that some of our neighbours wish to call a halt in their naval expenditure. We welcome such an indication on their part, and we can assure them that, if they will adopt and adhere to such a policy, we will readily and loyally follow suit.

  DEMANDS FOR CIVIL EXPENDITURE.
  But it is not our expenditure on armaments alone that I view with apprehension. It seems to me that every project imaginable for increasing the burdens on the Exchequer not only finds favour in the House but is pressed by both sides on the Government, which, in return for preserving the interests of the Exchequer and preventing it from becoming a more universal milch cow than it is now, is accused of turning a deaf ear to the most useful, necessary, and praiseworthy public demands. Only the other day the Government narrowly escaped defeat because they refused to transfer half a million of money from the shipping interest to the shoulders of the taxpayer. It is demanded of us that harbours of refuge shall be constructed, and reserves of food kept; stipends for Members of this House are to be found, election expenses are to be paid, employees of the State are to be better paid, and better provision is to be made for them when they retire, and the very persons who advocate these and similar raids on the Exchequer are the first to clamour for a reduction of taxation.
  MR. WILLIAM REDMOND: What about old age pensions?
  MR. RITCHIE: I think that is another item which might well be added to my list. I remember Mr. Gladstone in 1857 saying—
  "The country shows a greater disposition to be critical and sore on the subject of taxation than to be critical and sore on the subject of expenditure."

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  These words are very apt now, whatever they were at the time when Mr. Gladstone used them. I do not at all complain of the present jealousy with respect to taxation, but I do complain of the recklessness in regard to expenditure. Only by being somewhat less reckless will you be able to keep money out of the hands of the tax collector.

  ESTIMATED REVENUE, 1903–4.
  I now turn to the revenue on which we can reasonably reckon—taking, of course, the existing basis of taxation. May I say just one word before I come to the figures? I notice that there is some inclination to charge me with having brought pressure to bear upon the officials to raise their estimate of revenue beyond that which commends itself to them. I need hardly say that there is not the smallest foundation for any such charge. I think that any Chancellor of the Exchequer who ventured to take a step like that, and who in consequence at the end of the year had to face a deficit, would deserve the strongest condemnation. No Chancellor of the Exchequer can hope always to escape deficits, but certainly any deficit made in such a manner as that suggested is one for which no defence can be found.
  I am able to estimate Customs at £36,640,000, which is £2,207,000 in excess of the receipts of 1902–3. The increase is due to three causes. Last year the receipts were unduly depleted by the clearances at the close of the year before; then I am able to expect better receipts from sugar; and this year the receipts are rather swollen by the tendency there was during the last month or two to hold back in anticipation of a remission. I take Excise at £32,700,000, which is an increase of £600,000 over last year. I take Death Duties at £13,000,000 or £550,000 less than in 1902–3 because the arrears have been all worked off. I think I may put Stamps at a rather higher figure, viz: £8,400,000; Land Tax and House Duty together are expected to yield £2,600,000,and IncomeTax£39,000,000. This brings the total anticipated proceeds from taxation to £132,640,000. The non tax revenue is expected to yield £22,130,000; namely, the Post Office £15,300,000, which allows for an increase of £550,000; Telegraphs
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  £3,800,000, which allows for an increase of £170,000; Crown Lands £445,000; Suez Canal shares, etc., £935,000, and miscellaneous revenue £1,650,000, which allows for a further falling off in the Mint receipts. Taking the revenue from taxes and the other revenue together, the total amounts to £154,770,000, and the estimated expenditure to £143,954,000, leaving an available surplus of £10,816,000.

  DISPOSAL OF SURPLUS.
  What shall we do with it? That certainly is the most interesting portion of my task, and I think the most difficult. I think the surplus of lO¾ millions is a good deal larger than most people have expected, but it is less than one-third of the yield of the new taxes that have been imposed. I am very glad to think that the relief will be so substantial. The taxpayers of the country have borne their burden uncomplainingly. ["Hear, hear," "No, no," and laughter.] I see there are two or three Gentlemen opposite who do not agree with that statement, but I think I may say that, although the taxpayers have suffered, and suffered much, yet on the whole they have borne the taxation with equanimity, because they believed in the objects for which the taxes were required. But they are nevertheless looking forward with great anxiety to some relief from the burden of taxation, and I am glad to think that it is in my power to give it. It will be remembered that the duties on beer, spirits, tea, and tobacco have all been raised, and that new duties have been imposed on sugar, corn, and coal. These duties on commodities yielded last year £15,127,000. The Income Tax, representing the increase of direct taxation, was raised from 8d. in 1899 to 1s. 3d. last year, the extra 7d. yielding last year £18,107,000.

  NECESSITY OF REDUCING INCOME TAX.
  More than one-half of the war taxation has thus fallen on the Income Tax. But that does not show adequately the amount of the burden which has been borne by the Income Tax payer. If we add up the extra amount, which during the war has

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  been contributed by the Income Tax payer, and the amount contributed by the indirect taxpayer, the amounts come out as follows: the Income Tax payer has paid £39,884,000, and the indirect taxpayer £31,962,000; so that the Committee will see that the Income Tax payer has paid nearly £8,000,000 more towards the cost of the war than has been extracted from the pockets of the indirect taxpayer.
  But this, I think, does not really fully describe the extent of the burden. The indirect taxation has been spread over seven different articles, and is on this account less burdensome than the direct taxation which has all been imposed upon one subject so that the rate has been nearly doubled. It must also be remembered—what is very often forgotten in discussing these matters—that the Income Tax payer is also a very large payer of indirect taxation. When we hear people discussing the respective burdens on the direct taxpayer and on the indirect taxpayer, that fact is often lost sight of. I think, in considering the burdens which fall upon the shoulders of the taxpayer, it ought to be remembered that a very large share of the indirect taxation falls upon the direct taxpayer. I am expressing my own opinion only, but, in my opinion, the most heavily burdened person, according to his means, is the small payer of Income Tax. Therefore, I consider that the Income Tax payer has the first claim for consideration. But more than that. The importance of getting the Income Tax back to a lower figure than that at which it stands at present can hardly be exaggerated, having regard to the general interests of the country. Mr. Gladstone once said, and said truly—
  "The Income Tax is a fiscal reserve available for the defence and salvation of the country."
  I quite agree, and I think everybody will agree, with that view of Mr. Gladstone's. He went on—
  "It is, therefore, necessary to get it down to a figure as speedily as possible which will enable us to raise it at any moment of sudden emergency."
  May I say also that the Income Tax is more often "commandeered" than any
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  other tax. To make up any deficit, or to meet any sudden emergency, it is the Income Tax payer who is at once called upon.

  PROPOSED INQUIRY INTO INCOME TAX.
  Now, Sir, I should like to say with regard to the Income Tax that I am not quite satisfied with many matters in connection with it. It is forty-two years now since an inquiry was made into it, and my own opinion is that it would be advisable that further inquiry should now be made into its incidence, the equity of the burden, its machinery, and the evasions. I am told that the evasions are very great. An illustration has been given to me by a friend of mine who is an Income Tax Commissioner. One of the most successful modes of evasion is to make no return of income, the Income Tax payer preferring to be assessed by the Commissioners. In this particular case my friend saw that a particular firm, of which he knew something, had adopted that plan, and that the Commissioners had assessed them, I think it was at something like £3,000 or £4,000. My friend said: "What, £3,000 or £4,000; that is preposterous! These people are making gigantic profits." The Commissioners replied "Then we will make it £5,000." "£5,000!" my friend said, "put it up to £55,000." The Commissioner acted upon this advice, and the tax was paid. If much of this kind of thing goes on, we who are honest [laughter]—I am one of those individuals who cannot claim much credit for being honest, because my Income Tax is taken off for me—but, however, there can be no doubt that if this practice prevails much, the just must suffer for the unjust, and there ought to be some method by which this leakage can be stopped. Probably if that were the case, we might be able to take a penny or two pence off the Income Tax and still get the same sum from Income Tax. On the other hand, there are complaints that men who have real grievances to urge are not properly attended to. I have heard it alleged as a grievance that a man has not the right to bring his solicitor or his accountant before the local Income Tax Commissioners if they with old their consent. I think there is some ground for complaint there, but I do not want to go

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  into the various matters of complaint, and I would really say this, that I think the time has arrived when, having regard to the fact that it is likely to remain at a high sum for some years to come, we ought to have some inquiry into the operation of the tax. There is only one court of inquiry which I think would be adequate for the occasion, and that is a Committee of the House of Commons. If I find that this suggestion of mine is favourably received, I shall be very glad to act upon it, and have the inquiry made.

  REDUCTION OF 4d. IN THE £.
  But, Sir, what the Committee wants to know is, how much is coming off? Some people are prophesying that it is going to be a penny. [An HON. MMEMBER: "No, no."] My hon. friend says "No." Will he take 2d? [Cries of "No."] Would he like 3d? [Hear, hear.] Well, I propose to take off 4d. Apparently, fourpence off the Income Tax nearly absorbs the whole of my surplus, but that is not the case. A reduction is never wholly felt in the year in which it is made. I am told that the amount by which my income will be reduced by this remission in the current year is not £10,400,000, but £8,500,000. Fortunately I have a set-off in certain non-recurrent charges in the Army Votes which will provide me with sufficient funds to meet the extra deficiency which will fall upon next year. The whole amount comes to £10,100,000, and this year £8,500,000, so that there will be about £2,000,000 remaining.
  SIR WILLIAM HARCOURT: Then it will be £10,000,000 next year?
  MR. RITCHIE: Taking off 4d. costs £8,500,000 this year, and nearly £2,000,000 more next year.

  REMISSION OF INDIRECT TAXATION.
  I have still £2,000,000 to give away, and this I propose to devote to the remission of indirect taxation. I need hardly say that there are many competing claims for this, but I think the strongest claim is that made on behalf of necessaries of life. Beer, spirits, and tobacco do not come
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  within that category, and there remains coal, corn, sugar and tea. The Goal Tax does not fall on the consumer. [Cries of "Oh, oh."] It has not injuriously affected the quantity of exports, and I do not propose to interfere with that. There remain sugar, tea, and corn. Sugar has undoubted claims. If it cannot be called an actual necessary of life it is very near it, but to reduce that duty by one half would cost £3,000,000", and I have not got £3,000,000 to spare. My choice, then, is limited to tea and corn. Now tea, Sir, has many attractions: it is the easiest and least contentious subject of taxation, but it cannot be said to be dear. Nor do I think that a duty of 6d. on tea is very excessive or hard to bear. Tea is not strictly a necessary of life. ["Oh, oh."] Mr. Gladstone at one time spoke of tea and sugar as being harmless and beneficial articles. I am not sure that some people do not take too much of them, but one thing is certain, that the tea duty is not a tax on raw material.

  REPEAL OF CORN DUTY.
  Now, Sir, corn is a necessary of life in a greater degree than any other article. It is a raw material, it is the food of our people, the food of our horses, and of our cattle; and, moreover, the duty has a certain disadvantage inasmuch as it is inelastic; and what is much worse, it lends itself very readily to misrepresentation. [OPPOSITION cheers.] I do not think it can remain permanently an integral portion of our fiscal system, unless there is some radical change in our economic circumstances or it is connected with some boon much, desired by the working classes. It was the last tax that was imposed by my right hon. friend the late Chancellor of the Exchequer, and I know it was imposed with reluctance and only under pressing necessity. In my opinion, being, as it is, a tax on a prime necessity of life, it has the first claim to be associated with the large remission of the Income Tax of which I have spoken. I therefore propose to remit the Corn Duty. [OPPOSITION cheers.] I made a promise to the trade that if I did this I would give-suitable notice. I propose, therefore, that the repeal shall take effect on the

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  1st of July and in the meantime bonding facilities will be allowed. The loss for a full year would be £2,400,000.

  FINAL BALANCE SHEET, 1903–4.
  My estimated surplus is thus disposed of: £8,500,000 Income Tax, £2,000,000 Corn, £10,500,000 together; and this deducted from my surplus leaves me a margin of £316,000. I am now in a position to state my final balance sheet. The revenue, with the proposed alterations, will be as follows: Customs, £34,640,000; Excise, £32,700,000; Death Duties, £13,300,000; Stamps, £8,400,000: Land Tax and House Duty, £2,600,000; Property and Income Tax, £30,500,000; making a total tax revenue of £122,440,000; to which I add a non-tax revenue of £22,130,000, bringing the total revenue to £144,270,000. Now the expenditure to be set on the other side is as follows: Consolidated Fund services, £29,919,000; and Supply services, £114,035,000, making together £143,954,000, leaving a margin for contingencies of £316,000. I have now completed my task, and I thank the Committee most sincerely for the attentive and kindly hearing they have given me. I rejoice to think that my first Budget is not associated with imposition of taxation, but with remission of taxation. I propose to remit the duty which, small though it is, affects the greatest necessary of life. I have proposed a still larger reduction of direct taxation by taking 4d. off the Income Tax, and yet I have left the proportion of direct to indirect taxation higher than it was before the war. Besides this I am going to ask the House to strengthen the Sinking Fund, in view of our increasing liabilities, and in view of the present price of Consols. These are my proposals, and I confidently submit them to the judgment of the Committee, claiming for them not only that they proceed on sound and simple line, but also that they benefit all classes, both rich and poor.

  CUSTOMS—TEA.
  Motion made and Question proposed, "That the Customs duty now charged on tea shall continue to be charged until
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  the first day of August, nineteen hundred and four (that is to say):—
  Tea.…the pound Six pence."—(Mr. Chancellor of the Exchequer.)
  SIR WILLIAM HARCOURT: The right hon. Gentleman in commencing his speech made an appeal to the sympathy of the House. It has been said that nothing so much commands human sympathy as a good man struggling with adversity. I am quite sure that the House has thoroughly appreciated the ability, the clearness, and the straightforwardness of the statement which the right hon. Gentleman has made. It would not be at all appropriate, nor would it be-usual, to go into a great number of-matters with which the right hon. Gentleman has so fully and so ably dealt. They will require careful examination. What he has said on the subject of Consols I think many people will not entirely agree with, but the figures and the arguments he has presented are such that they require to be carefully examined. At one time it was said that we were going to be ruined by the high price of the public securities. I ventured on that occasion to say that that was a danger of which we were likely to be relieved by the present Administration, and they have fulfilled that prediction. I never can think myself that when we want money—as we have wanted money, and as we are going to want money—it is a good thing that we should get so very much less than we should charge upon posterity in the price of Consols. But there are one or two subjects and one or two facts which, I think, after what I may call the cheerful optimistic tone of the right hon. Gentleman, require consideration. One of these is not the relief of taxation which he has given, but the taxation that remains in excess of that which existed before the war. I am not going back as far as the right hon. Gentleman has gone back for a comparison of the condition of the people. He seemed to think it was a great point to have made, that we are only paying per head of the population a very little more—[The CHANCELLOR of the EXCHEQUER: A little less.]—or, rather, a little less than was paid per head of the population at the

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  conclusion of the French War. I was going to say, God help us if that is so! What was the condition of the people after the French War under the burden of the debt that had been created? That condition, and the depression of the people consequent on the taxation which was imposed, are horrible to think of. The real thing to ask, and what the House must ask, and what the country will ask, is this: How much more are you going to pay in taxation now than you did four years ago? The increase in the taxation of the country is £40,000,000, and what are you going to take off? You are going to take off £10,000,000. The consequence is that the residuum you have is £30,000,000 of increase of taxation, not due to the war at all, but due to the normal increase in the country's expenditure. In 1898 the taxation of the country was £99,000,000. This year it is £140,000,000, an increase of £41,000,000. Upon that you are going to make a reduction of £10,000,000. The consequence is that the country is saddled with an addition of £30,000,000 as compared with the taxation that existed in 1898. Now, Sir, why? What is the justification of raising £30,000,000 more from the people of this country than you did four years ago? That is a question to which the right hon. Gentleman has not addressed any part of his remarks. If you go back again to the last years of the last Liberal Administration there is a difference of £47,000,000, You have taken off from that £10,000,000, and therefore there remains an increase of £37,000,000 upon the normal expenditure of this country. The Secretary to the Board of Trade went down to his constituents at Leeds the other day and said he was not prepared to admit that the Government had imposed on the nation a greater burden than the nation could with comparative ease bear. In my view that is not the opinion of the nation at all, and it is not the opinion of the nation that there is any justification for having raised the normal taxation of the country in the space of four years by £30,000,000. The right hon. Gentleman made use of one sentence which was very interesting, and upon which I think we ought to
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  have some further information. He said, addressing the Parliamentary Committee of the Co-operative Congress—who represented 1,600 societies, paid £500,000 a year in sugar, and £400,000 in corn stuffs—that people complained of the great expenditure. He then went on to say that, while everybody complained of the great expenditure of the country, he hoped he saw his way to a substantial reduction of expenditure, but that he would very much like to know where the deputation would begin to reduce taxation. The right hon. Gentleman said he did not wish to enter into any argument upon that subject, but that great numbers of people contended that the Army cost too much and ought to be reduced. No one, he added, could more heartily wish that the cost of the Army should be reduced than he, and he was not without hope that it might be reduced. I hope that before we part with the Finance Bill we shall know what are the foundations of that hope. We should very much like to know what reduction on this £30,000,000 of extra taxation the right hon. Gentleman the Chancellor of the Exchequer hopes to make, what foundation he has for entertaining such a hope, and how far the Secretary of State for War concurs in that expectation. We ought to have some specific information on that subject, because I believe that desire exists largely in this House and still more largely in the nation. It is no use for the Chancellor of the Exchequer to make general statements of that kind unless he is able to show what it is that he expects or hopes for in the reduction of expenditure, of which he held forth a prospect.
  Now, Sir, there is a point which must be challenged at once, and it is in reference to direct and indirect taxation. That is a subject which will occupy the attention of the nation, and which ought to occupy the attention of this House. How does this question of direct and indirect taxation stand? In the days far back, before the imposition of the Income Tax, nothing could be more unjust than the taxation of this country. Almost the whole burden of that taxation fell upon the consuming classes, and the Income Tax was introduced for the purpose of relieving that unjust burden. The truth is, Sir, that all taxation—nobody can deny

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  the fact—comes out of income; but the income of three parts of the people consists of their wages. Therefore the taxes must fall upon the income of the working classes. What has the right hon. Gentleman told us only this afternoon? He has told us that this year wages have been falling, that the produce of the Income Tax has been rising and rising every year; therefore the greater part of the relief has been given to that class whose condition is obviously improving, and not given to the class whose income he admits is falling. I did not exactly follow the figures given by the right hon. Gentleman. I find, from a valuable return of my right hon. friend the Member for Wolverhampton, that in 1880 the total revenue from taxation was £69,000,000. At that time the Customs and Excise, which you may take generally to represent articles of consumption, was £44,500,000, and direct taxation £24,000,000. Ever since that time it has been the policy of the Finance Minister of this country to equalise the burden of direct and indirect taxation. That has been the consistent policy of this country. It was felt to be unjust that the great masses of the people should pay a larger amount than wealthier and better-to-do people. No man earning under £160 a year—that is, no man belonging to the working or wage-earning classes—will derive one farthing benefit from £8,000,000 of the £10,000,000 reduction; no man earning £3 a week and under will derive any advantage whatever from four-fifths of the sum you are now giving away in regard to Income Tax. Since the Finance Act of 1894 came into full operation it has been the consistent policy of the Finance Minister of this country to reach to and to maintain an equality between direct and indirect taxation When the late Chancellor of the Exchequer in 1900 made proposals for increased taxation he said—
  "During the last five years the proportion by which our revenue has been derived from direct and indirect taxation has not materially varied. There has been no material variation. I think these proportions are fair, and I do not agree with those persons who would desire to upset them largely on either side, and I think that in the taxation which we now propose we should endeavour as far as may he that these proportions should not be materially altered. "
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  That was an acceptance of the principle of equality between direct and indirect taxation as the continued policy in finance of both Parties in this country. We hear a great deal of continuity of policy, but this Budget is a reversal of the financial policy of this country in this most material particular. The late Chancellor of the Exchequer undertook to follow out that principle of continuity of equality between the two classes of taxation, and he did it in the most rigorously just manner. In 1901 he imposed Income Tax to the amount of £9,700,000, and indirect taxes to the amount of £6,000,000. In the next year he imposed Income Tax amounting to £5,000,000 and indirect taxes amounting to £8,200,000.
  MR. RITCHIE: Including the Coal Tax.
  SIR WILLIAM HARCOURT: If the right hon. Gentleman chooses to deduct £2,000,000 from that I do not agree with him, nor do the miners of this country, either in the North or the South, agree with him. They are of opinion that the tax has had a most injurious effect upon their trade, and it has in point of fact injured their wages, and therefore I do not think that it ought to be struck out. But just let us reserve that £2,000,000. Last year the right hon. Gentleman imposed an Income Tax of £2,000,000 and a Corn Tax of £2,650,000.
  MR. RITCHIE: The Income Tax was £2,600,000.
  SIR WILLIAM HARCOURT: That was not so estimated by the late Chancellor of the Exchequer. He estimated for £2,000,000, and the extra £600,000 was not expected to be collected in the year. That makes a total of direct taxation £16,700,000, and of indirect taxation £16,800,000, subject to what has been said about the Coal Tax. Therefore there was £100,000 more indirect than direct taxes imposed. If you choose to strike the Coal Tax out, you will find that, substantially, the amount of direct and indirect taxation raised since the war, and for the war, was as nearly as possible, even. Out of

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  the whole revenue of last year I find that Customs were £34,650,000 and Excise £32,600,000 and I add to that £1,000,000 of Excise out of the local fund for beer and spirits. The direct taxation was, Income Tax £38,800,000, Estate Duties £18,000,000, Stamps £8,200,000, and Land Tax and House Tax £2,500,000. Therefore, the total of direct taxation was £67,500,000, and that of indirect taxation £67,250,000. That shows that on the present basis the two systems of taxation were as near as possible on an equality. At the end of the war you come with a Peace Budget, and under those circumstances, having £10,000,000, and leaving an additional burden of taxation on this country of £30,000,000 as compared with the state of things before the war, when you distribute that £10,000,000 you give £8,000,000 to the well-to-do classes and only £2,000,000 to the working classes. I say that is scandalously unjust. That principle cannot be defended and will not be accepted. I envy the sense of humour with which the right hon. Gentleman announced the abandonment of the Corn Duty, remembering the arguments that were adduced in its support when it was introduced. When we remember the profound economic demonstrations of the Prime Minister as to those upon whom the incidence of this tax would fall, and how he held us up to scorn for maintaining that this was a tax which by any possibility could fall upon the consumers——
  THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Mr. A. J. BALFOUR,: I never said that.
  SIR WILLIAM HARCOURT: I recollect very well these arguments, and it would take some time to have them read by the Clerk at the Table. I say there is nothing more ludicrous than the situation of the Government in first fighting for this Corn Tax, as they fought last year, and now coming forward and saying that its repeal will be a great boon, and the only boon which they will give to the consumers of the country. The Chancellor of the Exchequer used a phrase which was amusing, tie said it
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  was a tax that was liable to misrepresentation. We all know very well what that means. After all, by-elections are a valuable institution, and all the profound political economy of the Prime Minister has been refuted, and he is, I presume, a convert in consequence of the by-elections.
  MR. A. J. BALFOUR: I really think that if the right hon. Gentleman is going on quoting my words he might quote them accurately. He is not representing anything I said in this House. Perhaps he will read my words if he has my speeches there.
  SIR WILLIAM HARCOURT: If I had guessed that this sacred tax would be taken off I should have brought a pile of Hansards which would have demonstrated that it was a tax which would under no circumstances ever be abandoned by a Conservative Government.
  MR. A. J. BALFOUR: Well, do not say that I said it.
  SIR WILLIAM HARCOURT: I only regret the absence of an hon. Member on the other side who on that occasion ejaculated "Well done." Now the Chancellor of the Exchequer says it is to be undone. I am very glad that the Corn Tax has been repealed. It was an infamous tax. The Government have at last been persuaded by the nation to take that view of the subject. I say that we take issue with the Government, and shall continue to do so, both here and elsewhere, upon the question of the unjust disproportion in dealing with this £10,000,000. There is one other thing which I should like to call attention to. Having said that you are left now with £30,000,000 more of taxation than the country was paying before the war, I should like to point out that this is the last remission that you have any present prospect of receiving. That is the important point. What the House has got to consider very carefully before this Budget is passed is, what are the prospects of a greater economy and less expenditure, and what are the prospects of a greater revenue? If there are no such

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  prospects, there can be no prospect of further remission. As far as I understood the Chancellor of the Exchequer's remarks in reference to dealing with the Sinking Fund, they do not seem to me to be satisfactory. He said he was going to make the Sinking Fund proportionate to the debt. People speak of the capital. The National Debt is not a capital sum. It is an annuity payable every year. The right hon. Gentleman gave some figures of what was expected to be done in future years towards the repayment of the National Debt. If I caught his figures aright the sums he I will appropriate to this purpose will be less than those which have been so applied on the average for many years past. In many years as much as £7,000,000 was paid in discharge of the debt. I think it will be found that there is no real addition to the sum appropriated to the extinction of the debt before the debt was increased. Is there any prospect of reduced expenditure? When your six Army Corps are fully developed, will they cost less than they are costing now? I imagine not. I believe that the development of the new system will be more, and not less, expensive than the present system. Are we to cease to pay for the Army in South Africa? Why should we not? Why should not South Africa pay for the Army there as India pays for the Army in India? Why should not this great wealth, which we are always told about but do not always see, discharge the cost of the Army in South Africa? But there is not much prospect of it Then what is the prospect of a diminution of the charges for the Navy? The right hon. Gentleman made the usual flourish about the Navy to which we are accustomed. But it is rather curious that I received this morning a pamphlet from one who is a high authority on this subject—I mean Lord Brassey. He says—
  "The British Navy Estimates for 1903–04 amount to £34,457.000, as against £31,225,000 in the previous year. Heavy expenditure for warlike preparation is a strange sequel to the conclusion of peace."
  You would have thought that that was said by some miserable Little Englander. Lord Brassey is not a Little Englander but a Great Englander.
  "The policy on which we have entered is not the policy on which the great statesmen of
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  the past—Lord Beaconsfield not less earnestly than Mr. Gladstone—insisted. Our expenditure has grown beyond all precedent, and is not to be borne without detriment to the national progress and prosperity."
  Then Lord Brassey proceeds to give in detail a demonstration of the unnecessary extravagance which is now going on in naval expenditure.
  I can see no prospect whatever of diminution in your expenditure. The right hon. Gentleman has truly said that he wants a great deal more money for domestic purposes and for all sorts of reforms at home. But we never know from day to day what rash new enterprises we may be embarking on; what entangling alliances, which you take up one day and find it difficult to drop the next, and which involve you in wholly unforeseen expenditure. What prospect is there of relief in any other quarter? You perorate about the Empire; but it is not the Empire that pays. It is Little England that pays. I know there has been an attempt to induce the Empire to pay; but the Empire does not see it. The Colonial Secretary has made most pathetic appeals, with tears in his voice, to the Colonies one after another. His sermons have been excellent, eloquent, and pathetic. But the contributions to the plate have been small. The cost of the defence of the Empire is £64,000,000 a year. What do we receive towards that from the rest of the Empire? I am quite sure it does not amount to half-a-million. What has been the response of the Colonial Conference to these appeals? It is a very remarkable fact that while those appeals are printed in full the answers are not given. But the answers are to be found in the fact of the contributions; and I am afraid that those contributions of the Empire have passed into the wallet of disappointed hopes. Australia is not at present in a financial position, however much she may desire it, to make great contributions; and Canada, the most flourishing of all our possessions, takes a view which I cannot find it in my heart to condemn. She says through Sir Wilfred Laurier, that she does not wish to embark on unlimited militarism. As to the contribution of £30,000,000 from the Transvaal, at present it is rather a bird in the bush. Talking of

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  expenditure, what is South Africa going to cost you in the future? Do you think that you have exhausted your expenditure in South Africa? Do you think that the £35,000,000 which is to be borrowed on your guarantee is going to do the whole of the business? How much of it will be left after you have purchased the railways and developed the country? Irrigation alone has been put at £30,000,000, and therefore in all these directions I see no hope of relief, but rather calls for further expenditure. Then there is Rhodesia. It is and always has been insolvent, and depends on grants-in-aid from the Chartered Company. I am glad to see that Lord Cromer has put his foot down heavily on that wild cat scheme, the Cape to Cairo railway, and I hope we have heard the last of it. But seeing that you ask the nation to pay £30,000,000 more in taxation than it paid four years ago, we call upon you to justify that demand and to tell us why, now that the war is over, you stand in a different situation to the nations abroad from that in which you stood four years ago. You require an increased expenditure of £30,000,000, of which £20,000,000 are for the Army and Navy alone. What is the position that justifies that increased taxation in four years?
  We have heard a great deal lately of co-ordination. I should like to see a little more co-ordination in our finance. I should like to see some sort of opinion formed as to the burden which it is justifiable to put upon the country, and to see the expenditure arranged accordingly. Mr. Disraeli said, and it is a well known saying that expenditure depends upon policy. Very well; we will judge your policy by its expenditure, because if your expenditure depends upon your policy, I suppose the argument is that a great expenditure means a great policy. But you may have a great expenditure from a foolish policy. You have arrived at an expenditure which, in the judgment of all sober-thinking men—and I am sure I may include the present Chancellor of the Exchequer as well as the late in that category—it is impossible to continue. The late Chancellor of the Exchequer told you that you were going on in a manner in which it was impossible to proceed; that the country cannot
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  stand the yearly addition of five and a half millions to the normal expenditure which seems to have become an inveterate habit. The prospect of further loans will make further calls upon your resources. There is further expenditure of every kind, that sort of lax finance to which we have almost become accustomed; when you offer a million or so to your friends in agricultural rates, and when you find a difficulty one afternoon with the parsons over your Education Bill, you get the Chancellor of the Exchequer to give a million or so to voluntary schools. That is the sort of thing that destroys finance and increases expenditure; it is not the result of a well-considered system by which taxation may be reasonably dealt with. What is the cause of these bloated armaments? The wealth of a nation, like the wealth of an individual, depends on his margin and his reserve; but when you have added £159,000,000 to the National Debt you have gone far to exhaust your reserve; and when you raise your normal taxation by £30,000,000, you have gone very nearly up to your margin of increased taxation. Increased taxation has never been known at any time in the history of this country such as has recently taken place in the normal expenditure of this country. These bloated armaments, as Lord Beaconsfield called them, are the result of a policy of inflation—a flatulent policy. It is said that after a hot fit there comes a cold fit. I am glad to know that war is a pestilential disease. It has been characterised by high fever, by a high temperature, and by delirium-The delirium has passed away, thank God. We have now the subnormal stage, which is the stage of convalescence, and which leaves the patient weak and depressed. That is the condition in which the war has left you and everyone who has had the misfortune to suffer from it. Thank God we have arrived at peace. Let us now devote ourselves to the works of peace, for, for dilapidated finance such as yours, there remain only the sovereign remedies of retrenchment and reform.
  MR. WHITE RIDLEY: The right hon. Gentleman who has just sat down was very alarmed

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  at the rapid progress of our national expenditure during the last five years, and he drew most serious and alarmist conclusions from it. The Chancellor of the Exchequer was, as I conceive from his speech, equally concerned and equally anxious about the state of our national expenditure, but he did not draw the same alarmist conclusions as the right hon. Gentleman. I do not think that anyone who has viewed carefully the gradual rise of our national expenditure during the last half century can come to any other conclusion than that the present state of affairs, although calling for anxious consideration and careful treatment, such as the nation expects from the present Chancellor of the Exchequer, is not one which called for any alarmist cries, or that it puts us in any serious doubt as to the solvency of the nation. When I look at the expenditure during the last five years, and compare it with the state of affairs during the last half century, the marvel to me is not so much that expenditure has increased at a great rate as that that increase in expenditure did not begin sooner. When we look back to the sixties and compare the amount collected per head by the State over the prosperous period of the sixties and seventies, we find that the normal sum per head received from the population varied from £2 8s. 11d. to £2 9s. 11d. from 1861 to 1895. Then there was a sudden increase per head up to £3 8s. 8d. last year, and now, according to the Budget which has just been introduced, it stands at £3 per head. Thus, in the prosperous years from 1861 to 1895, when the wealth of the country, not only in the aggregate but per head, was increasing by leaps and bounds, the amount collected by the State remained practically stationary. During that period, gauged by almost any standard you like, the wealth of the nation per head was increasing. Let us take the Income Tax, which Mr. Gladstone declared in 1860 to be the only satisfactory test of wealth. The assessment in 1860 was equivalent to £12 per head of the population; the assessment now is equivalent to £20 per head of the population. There is another test, the yield of the Income Tax. In 1861 the yield per penny was £1,100,000; now it is £2,500,000. Let us take any other
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  test, such as bank deposits and life insurance, and it will be found that there is no single standard that does not show that the wealth of the country is rapidly increasing, and the marvel is that the State did not sooner appropriate more of the wealth of the country for carrying on its business. There are the annual returns of imports and exports. In 1860 they amounted to £325,000,000, or £13 per head; now they are £801,000,000, or £19 per head. This is not a sudden but a gradual increase that has been going on year by year ever since 1860. The money collected by the State per head has not gone on rising year by year; it remained practically stationary up to 1895; and, therefore, I think that there is some ground for saying that great as has been the increasing expenditure since 1895 it is only expenditure which is commensurate with the wealth of the country; and the remarkable thing is not that it has risen so quickly since 1895, but that previously the amount collected by the State had not increased in proportion as the wealth of the country increased
  There is another point of view. What has been the chief cause of the great rise in expenditure since 1895? It is admitted on all sides that it has been increased expenditure on armaments. And why have we been obliged to increase our expenditure on armaments? Because we have to consider our relations with foreign countries and compete with them in the race for power. I have attempted to find out what the increase in expenditure has been on the part of some of our chief competitors since 1895. It is very difficult, as the Budgets of foreign countries are differently constructed from ours, and in giving the figures I cannot pretend that they are a perfectly accurate comparison. For the purposes of comparison we have taken the receipts, because that would exclude the money borrowed on loan. Taking the receipts of the United Kingdom in 1895 as £93,000,000, and in 1902 as £133,000,000, there was an increase of 40 per cent. The United States increased their receipts from £71,000,000 to £104,000,000, or 48 per cent., Germany, from £66,000,000 to £123,000,000, or 95 per cent., and Russia from £146,000,000 to £194,000,000, or 33 per cent. These figures gave rise to consideration. We might also take the

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  revenue per head which is collected by other countries as compared with this country. In the United Kingdom in 1902, about £3 5s. per head was collected, in France, £3 15s., in Germany, £3 15s., and in the United States£2 15s. The United States are in a different category. They boast, and justly boast, that they enjoy immunity from many of the burdens which the older European nations are liable to. These figures excluded local charges. In the case of Germany we have to add the charges in the various States and that would also apply to the United States. These figures are not very disquieting. We collected £3 5s. per head, while both France and Germany had collected £3 15s. These figures, and the statement of the Chancellor of the Exchequer, show that there is no justification for alarmist views of our national finances. I would rather say they show, if anything, that we might apply the analogy of a great business, and that it is necessary and proper to keep up our great expenditure if our business is to be kept up to date. The Government in pursuing the policy of increasing expenditure upon armaments and upon other necessary things, such as education, is only pursuing a wise and cautious policy which every employer of labour and every business man would pursue. The Government is following the methods of business men by increasing and improving its methods to suit the times, not being afraid to incur more expenditure in order to reap great and lasting benefits.
  MR. HALDA E: Whatever feelings we may entertain towards the Budget the right hon. Gentleman the Chancellor of the Exchequer has produced, there is one thing with which I think we shall all agree and rejoice in, and that is the business-like and moderate fashion in which he made his statement and the clear desire for economy and improvement which dominated the entirety of his speech. We on this side of the House feel a greater affinity towards the right hon. Gentleman than we do to some of his colleagues, and we feel we should like to see more of his spirit prevailing in the measures of the Government than has prevailed in the past, and if we have to take
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  exception to not one but many things in the Budget he has produced, it is because we feel that the hand which framed the Budget has not throughout been the hand of the right hon. Gentleman. The broad feature which has attracted attention in this House, and will attract attention in the country, is the one on which my right hon. friend the Member for West Monmouth put his hand. surely it is extraordinary that in a year of an unexpectedly large amount of surplus, you should dispose of the surplus in the proportion of five to one to remedy the grievance of the direct taxpayers, instead of relieving the indirect taxpayers to an equal extent. I am quite aware of the argument that you should look on your Income Tax as a national resource—something to be husbanded; that you should look upon it not only as the war chest, but as the resource fund of the nation for many other purposes. That is true, but there is a broader view which cannot be lost sight of after you have imposed an exceptional amount of taxation, and are approaching a relief of this kind; you ought to have some clear view of the relative positions of the various classes you are seeking to relieve. The right hon. Gentleman gave us some figures of the payment of Income Tax, and, according to those figures, the position of the Income Taxpayers is a remarkable one, inasmuch as a very small number of people raise a great deal of money. But the right hon. Gentleman touched upon another topic, and that was the character of the national income. He said the amount of the national income was difficult and almost impossible to obtain, unless you had the figures of the direct taxpayer. But the national income has been estimated; various estimates have been made of it, all of which have converged within large limits to one amount. The national income has never been put lower than £1,500,000,000 and it has been put as high as £1,700,000,000. If we take it at £1,600,000,000, that is owned to the extent of about £800,000,000 by the Income Tax payers. The Income Tax payers are a comparatively small class; they are only 4,000,000 people out of a population of 42,000,000. These

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  4,000,000 persons hold half the national income, and therefore it seems to me that if you take as a standard the ability to bear taxation into consideration at all, the Income Tax payer has certainly not the first claim to anything like the extent of reduction which the right hon. Gentleman the Chancellor of the Exchequer has proposed—half the national income, £800,000,000, among some 4,000,000 people.
  SIR GEORGE BARTLEY: No, families. Perhaps 20,000,000 persons.
  MR. HALDANE: Well, families. Take it as you will, it seems to me an extraordinary state of things that this small section, taking half the whole income of the country, is to get the benefit of the remission of taxation that the right hon. Gentleman proposes in the proportion of five to one. Before this is carried out, we certainly ought to have all the figures clearly before us and inquire very carefully into the ability to bear taxation. While I am bound to make these criticisms on the Budget of the right hon. Gentleman, there is another thing to which I am coming which it gives me great pleasure to admire, and that is the sum which he has set aside as the fixed charge for the extinction of the National Debt in the future. £27,000,000 is a very satisfactory and substantial sum; it is an increase of £4,000,000. We had £23,000,000 before on the old National Debt and we have now £27,000,000 on the National Debt as it stands at this moment. If my estimate is not wrong that should pay off the whole debt in a half century from now. I am quite aware that it is a very sanguine view which presupposes that we shall stick to the proportion of £27,000,000 for fifty years, but I do say that that is a standard we should set before the nation as part of our continuous policy not to be departed from as Government succeeds Government, and if we do that we shall see our National Debt disappear in the time that I have indicated. But while it is a good feature that there should have been an increase in the charge for the extinction of the National Debt to the extent of £4,000,000 a year I am not able to take quite the sanguine view that the right
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  hon. Gentleman has taken as to our relative financial position as compared I with other nations or the view taken by the hon. Member who spoke last. It is quite true that £27,000,000 is a substantial fixed charge for the payment of our National Debt, but as regards the debt itself I think we stand in a much worse position than most of the great Powers. Most of the other great Powers have a debt represented by some form of substantial assets, such as State I Railways, which they own—I am not speaking of France which is in a more difficult position than ourselves in that respect, but as regards some of the Powers the situation is different. Let us for instance take the case of Germany. The German Empire has an Imperial debt of about £121,000,000 which it is true is not represented by any asset, but the State debts are always represented by a substantial form of assets. The State debt of Prussia is £336,000,000, but the State Railway of Prussia, out of which the State makes a large profit, pays more than is necessary for that debt. Even in the case of Russia, which has a National Debt which is estimated at £700,000,000, the Government own over 23,000 miles of railway, a most substantial asset for that debt. In this country we own no assets except perhaps the Suez Canal shares. Ours is sheer debt, and that is the thing which differentiates us from Germany and Russia. France is in a worse position than we are. They have a National Debt of over £1,200,000,000, represented by no substantial assets, and there is a fixed charge for that of £47,000.000, which contrasts very favourably with our £27,000,000. The United States are reducing their debt rapidly. The Federal debt in 1865 was £531,000,000, to-day it is reduced to £190,000,000. Therefore it is that I say although we are paying our debt, we are paying it none too soon, and therefore I cannot take the sanguine view taken by the right hon. Gentleman as to our financial position.
  It is true that we hold a very strong position, but if we are to retain our place in the comity of nations it must be assured that we shall continue to hold the position we have, and to do that you have to improve

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  the quality of the people and to spend more money on education than you are doing at the present time. That is one item I should have liked to have seen increased very substantially, in a rational manner, and I hope to see it figure in the Budgets of years to come as a very substantially increased item. It is all very well to speak of our being in a very substantial position, as the hon. Gentleman who spoke last suggested, but we must be assured that that position will be maintained. We have to look to the future, and we cannot be sure that the enormous advantages which we have reaped in the past, and which have given us the monopoly of the commercial supremacy of the world, will continue. We have competition growing up in every land; a new spirit entering into other nations, and, in my opinion, the duty which lies on us most heavily is to pay off debt as rapidly as possible. I trust we have now entered into some sort of policy of economy in some directions. I was struck with the way in which the right hon. Gentleman the Chancellor of the Exchequer made his references to the expenditure which this country is at present making on the Army, and I cannot draw any other inference from it than that the Government have made up their minds that the policy adumbrated this session will have to be, and ought to be, much curtailed, and that it refers to other views which did not prevail in the debates which took place recently, but which will, I trust, show themselves very markedly in the debates which will take place in the near future. The Government seem to realise that they have placed themselves in a wrong position—indeed, it almost looks as if they anticipate that they may have to submit themselves to the judgment of the country at no distant date. The right hon. Gentleman's Budget struck me as being somewhat of an electioneering Budget. But there is another side to the Budget, and I feel more and more as the Budget is reflected upon, that more and more it will be felt that the indirect taxpayers of this country have not had justice done to them.
  MR. CHAPLIN: In many respects I listened with
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  great pleasure to the statement of my right hon. friend the Chancellor of the Exchequer, but while I heard with approval many parts of his speech, such, for instance, as those dealing with the reduction of the debt and the disposition of the greater part of the surplus, there was one of his proposals to which it is only fair and right I should say at once I am absolutely opposed. I find myself agreeing very much with what fell from the right hon. Gentleman opposite as to-the position of a Government who, after all they have done and all they said last year, now come forward and deliberately repeal a tax which, on their own statements, repeated over and over again, could not possibly injure anybody, and which was avowedly imposed for the purpose of broadening the basis of taxation. Lest there should be the slightest doubt as to the accuracy of my statement, let me remind the Committee of a few sentences which fell from the late Chancellor of the Exchequer in introducing the Budget last year. He pointed out how great had been the tendency to increase expenditure, and he said—
  "I went so far as to say that in my judgment if that rate of increase continued the country must come within reach of actual financial ruin."
  He proceeded to take measures which he thought were adequate to the circumstances of the time. He said—
  "Looking to the ever-increasing demands made upon the Exchequer flowing from our modern civilisation, we must expect some increase in our expenditure in years to come. I am therefore endeavouring now, as I endeavoured last year when I asked the Committee to raise additional taxation in order to meet the charges of the war, so to frame that taxation that when peace returns and it is possible also to return to ordinary expenditure, we may have no difficulty in settling our financial system on a basis which would be equitable to all payers of taxation in the country. Therefore, in seeking for new indirect taxation, what I desire to find, as I desired to find last year, is an article of practically universal consumption, from which therefore a large revenue can be produced to the Exchequer without any injurious or oppressive burden on any individual or on any class. My primary duty is to look for revenue, and my ideal of a tax is that which will yield the most revenue with the least injury and inconvenience to the community."
  He then referred to the old registration duty on corn, and after using a great variety of arguments, he proved conclusively that in his opinion that was the

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  least injurious tax which could be imposed for the purpose of providing an increase of revenue; and made it the chief feature of his Budget. The right hon. Gentleman was more than justified, and is more than justified by the results which are before us at this moment, in all that he said with regard to the infliction of the smallest possible injury upon any class of the community. It was only yesterday that I received the monthly statement which is circulated by the Board of Trade under the auspices of the Government—of which my right hon. friend ought to know as much as anybody in this House—I mean the Labour Gazette, and there I find in black and white that in more than one of the towns in the North of England the prices of bread and wheat are at present both lower than they were before the imposition of the tax. Why does my right hon. friend do this? He says it is because he wants to do something for the consumer. By the repeal of this tax he will do nothing whatever for the consumer. He will not affect or change his position by one iota. If he thinks he is going to lower the price of bread he will be just as much mistaken as were hon. Gentlemen opposite when they said last year that the imposition of the duty would permanently raise the price. If he really wanted to do something for the consumer it is patent to everybody how he could have done it. He had £2,000,000 to dispose of. The present duty on tea is 6d. What did it produce last year? The actual figures for 1901–02 are £5,792,967. If my right hon. friend, wishing to do something for the consumer, had devoted his £2,000,000 to the reduction of the duty on tea he might have reduced it by nearly one half, and thus have done something which would have been of substantial interest and use to the consumer. What does my right hon. friend expect to gain by this? What have the Government got in their minds? What are their supporters going to gain? So far from gaining the respect, I think they will gain what they fully merit, the ridicule of their opponents, and, unless I am very much mistaken, they will arouse the resentment—I do not like to say the contempt—of thousands of their friends in all parts of the country.
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  Of their friends and supporters in this House, whom they seem to forget, by their present attitude they are making fools; they are making absolute fools of them in the eyes of the country by all that they deliberately took them through last session. Now, when all is over, when they have got a large revenue from the tax which was imposed for the purpose of broadening the basis of taxation for all time without inflicting the smallest injury upon a single member of the community, for some reason, known only to themselves, they throw away the whole of these advantages, and at the same time deprive the consumer of a real and substantial benefit which they could have given him by reducing the duty on tea by one half. I confess that it has seemed to me sometimes lately that the Government were going through the operation known as deliberately riding for a fall, and I must say of this last act of theirs, that if that fall should be thereby precipitated, I, for one, should consider that they most heartily deserved it. I am perfectly sincere in making these observations, though I make them with real regret, because, as I said just now, I listened with great approval to the greater part of the statement of my right hon. friend, and also because I honestly believe that his conclusion will have the effect of converting into a fiasco what I, and many others in this House and elsewhere, think would otherwise have been a most excellent Budget. I am sure of this, that it will be regarded by countless friends of the Government as an act of financial folly and weakness which has seldom, if ever, been equalled.
  MR. McKENNA: It is impossible not to sympathise with the indignation expressed by the right hon. Gentleman who has just spoken. He is the one strong and consistent man on the other side. The arguments he has now stated are the arguments we listened to last year, and though we did not then agree with him, he was received with cheers on his own side of the House, and was supported in the lobby. How hon. Members opposite can fail to support him now I do not understand. But I rose more particularly to say something on the subject of the Sinking

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  Fund. The Chancellor of the Exchequer, in the beginning of his observations, rather represented that he was going to strengthen the Sinking Fund, and he spoke of that as a most desirable object. To our infinite astonishment, when he came to actual figures, we found that so far from strengthening the fund he was reducing the amount provided by his predecessor last year. On June 4 last, when the late Chancellor of the Exchequer restored the Sinking Fund, he re-established the fixed debt charge at the figure of £23,000,000 a year. That fixed charge was for the purpose of meeting the interest on the old debt and the Sinking Fund on the whole of the debt. The interest on the new debt which has been incurred on account of the war did not come out of the fixed charge. That interest last year reached the sum of £4,500,000, and had to be added to the £23,000,000, so that the actual provision made by the late Chancellor of the Exchequer for the Sinking Fund and the payment of interest was £27,500,000. The present Chancellor of the Exchequer, who was full of pious expressions as to the advantage of large purchases of Consols in the open market, and the need of our paying off the debt, instead of increasing that amount, as the late Chancellor of the Exchequer suggested should be done, has actually reduced the amount by £500,000. An hon. Member opposite spoke of the exceeding prosperity of this country. It is true that certain classes are exceedingly prosperous, and I would ask whether there is any better way in which some of the surplus of our prosperity could be used than in paying off our great National Debt. Let me remind the Committee of what took place in 1899, when the late Chancellor of the Exchequer reduced the fixed charge of the debt from £25,000,000 to £23,000,000 a year. At that time the Chancellor of the Exchequer explained that in a very few years the interest on the Debt would be lowered, and that a large number of the then existing terminable annuities would cease to have to be paid; and he showed that in a very few years there would be £9,000,000 a year available for the Sinking Fund. That, he said, was too much, and ho was going to take out of the hands of future Chancellors of the Ex-
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  chequer the temptation to invade the Sinking Fund, and he therefore created a large new block of terminable annuities and reduced the amount of the fixed debt charge. He held the Sinking Fund should be an annual sum, more or less the same over succeeding years for the reduction of the debt. The amount he provided then was for the reduction of a debt which was £150,000,000 less than it stands at to-day. The amount then left was £5,800,000 a year, and he told us at that time that he was happy to say, that being the minimum, that as years went by that amount would be increased. He did not wish to see it increased to such a large amount as £9,000,000, but what has the present Chancellor of the Exchequer done T With a much larger debt than the Chancellor of the Exchequer dealt with in 1899 he has reduced this provision.
  SIR FREDERICK BANBURY: The hon. Member has forgotten the reduction in Consols.
  MR. McKENNA: No, I have not forgotten that, for that was one of the reasons the late Chancellor of the Exchequer gave in fixing a reduced amount. Now, upon a larger debt the right hon. Gentleman proposes to reduce the amount of the fixed debt charge still further. It is true that the amount is nominally to be increased from £23,000,000 to £27,000,000, but as I have shown already under the old fixed debt charge the interest on the new war debt would not have been included. He has therefore added £4,500,000 a year to the liabilities on the fixed debt charge, and has not increased the amount of the fixed debt charge, as he should have done if he had left it in the same position as it was under the late Chancellor of the Exchequer. Whether the right hon. Gentleman be right or wrong in his policy, he must not take credit to himself for having made an added provision for the reduction of the National Debt. The hon. Member for Exeter has been asking that a new and additional Sinking Fund should be created for the reduction of the war debt of £160,000,000, but the right hon. Gentleman has not done that; on the contrary, he has actually reduced the amount which was provided last year by

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  his predecessor by £500,000. I do not know whether the hon. Member will be satisfied with the exchange, but I certainly say that in making this change the right hon. Gentleman has not, I think, acted the part he should have done. The right hon. Gentleman is, I submit to the Committee, more or less bound to the pledge made by the late Chancellor of the Exchequer on June 4th of last year, and he is bound by that pledge, if he does anything at all, to increase the old fixed debt charge. Instead of that he has reduced it by half a million. That to my mind is one great objection to the right hon. Gentleman's scheme. It has been pointed out with very great force that the right hon. Gentleman, for every £5 he has taken off taxation, has given £4 to the classes who are admitted to be well off, and only £1 in relief of taxation to the classes who we know, from the Returns he has given, are less well off now than they have been in previous years. But quite apart from that, ought not the Chancellor of the Exchequer, when he comes to reduce taxation, to have given us some inquiry as to the actual amount of taxation which is borne by the working classes in this country? What does the man with 30s a week pay? In answer to a recent deputation the Chancellor of the Exchequer said that owing to the extended franchise it was only right the working classes, who had a share in the Government, should also bear a share in the payment of the taxation of the country.
  MR. RITCHIE: Yes, in a tangible form.
  MR. McKENNA: They do pay a share in a most tangible form. That is the great misunderstanding on the opposite side of the House. The right hon. Gentleman may not know the small items of his household expenditure Personally, I do not know when the price of the articles which are taxed goes up or down—I am alluding to the price of bread, beer, tea, sugar, spirits, and wines. I do not know the fluctuations in the prices of these articles, and no more do the majority, I believe, of hon. Members in this House. But for the working classes a rise or fall in the price of these articles is a most tangible fact, and
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  they feel every week the sums they have to pay through the rise in prices. Ought the right hon. Gentleman to be content with mere percentages of the amounts paid in direct and indirect taxation, or ought he not to tell us what a working man with 30s. a week does actually pay in taxation? I venture to say that the right hon. Gentleman will find that under this Budget a man earning 30s a week pays more than one-twentieth part of what is paid by a man earning £30 a week. I do not know what principle of taxation would be acceptable to hon. Gentlemen opposite, but I do say that I do not believe there is a single hon. Member in this House who would go less far than this—that a man with 30s. a week ought not to pay a larger proportion of his income than a man with £30 or £300 a week. I think he ought to pay a much less proportion. I think there is a minimum amount necessary for living which ought not to be subjected to taxation at all. Can the right hon. Gentleman tell the Committee what is the proportion of income which a working man earning 30s. a week pays and what the man with £30 or £300 a week pays. I have gone into some figures, and so far as I can judge of the expenditure from reading a number of budgets of the working classes on 30s. a week, and comparing them with incomes of £30 a week, I have been driven to the conclusion that a man with 30s a week pays a larger proportion of his income in taxation than the man with £30 a week. If that is true is it not a crime for those who have control of the taxation of this country to take taxes off the rich and leave them on the poor? I would ask the Chancellor of the Exchequer, who will have plenty of opportunities, and who has unrivalled means at his disposal for considering this question, to give the House upon some future date an estimate of this description, which he can make with the greatest accuracy. We have thousands of specimen budgets of working men, and if he will make a comparison of the taxation borne by working classes and by the wealthier classes he will be able at a later stage in the course of these proceedings to tell the House whether justice has been done to the working classes or not. Whether

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  the backbone of the right hon. Gentleman's Party will be dissatisfied or not I do not know, but I believe that those who are most clamorous for the reduction of the Income Tax would consent to a smaller reduction of that tax in order to take their fair share of the burdens off the shoulders of those poorer than themselves, and who are far more heavily burdened at the present time by taxation.
  SIR GEORGE BARTLEY: I should like to say a few words, because I have taken a very great interest in the subject of taxation as affecting the two classes of the community. It is perfectly true, and I do not think anybody can deny it, that the ordinary man who consumes a reasonable amount of alcohol, and earns £1 a week or so, does pay a larger proportion of his income in taxation than the richer man. I do not think that argument can be got over at all. But, Sir, the conclusion, and the only conclusion, to be drawn from that is that you must remodel the whole system of your taxation, and you must alter the system of taxing alcohol. As long as you do tax alcohol to the enormous extent that you do the working man earning small wages and drinking a reasonable amount will continue to pay an undue share of taxation in proportion to his richer neighbour. But surely no sane man with the welfare of the country at heart, in order to establish a system that theoretically would be absolutely fair, would do away with the taxation on alcohol; yet that is the only solution of the particular difficulty of which the hon. Member complained. If you are theoretically to tax every man strictly in proportion to his earnings, you must do away with the tax on alcohol. As long as you have a system under which you derive an enormous taxation from alcohol, the greater part of which must be paid by the working classes from their present modes of living, I say that it is absurd to attempt a theoretical system with absolute fairness. But we cannot solve this matter simply upon these grounds. A good many years ago I endeavoured to get out the budgets of a number of persons, and I came to the conclusion that ignoring alcohol the man who paid a larger proportion of his
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  income than any other class was the small man who paid Income Tax. He is the man more hardly hit than anybody else. I could not help being struck with the remarks of the right hon. Gentleman who spoke last but one, in which he said that the Income Tax payers were a small class of the community. He said that only 4,000,000 paid Income Tax, but we must remember that those 4,000,000 are, practically speaking, 4,000,000 families, which makes a large difference in the calculation. Taking the average family at five, it means 20,000,000, and although there may be some instances in which two members of a family pay Income Tax, those instances are very few. I think you may take it that, roughly speaking 20,000,000 persons are concerned in the payment of Income Tax. Those who have studied the Income Tax returns must have come to the conclusion that the great bulk of the increase of Income Tax payers is at the bottom of the scale. The number of people who are getting into the class of Income Tax payers is ever increasing, and there is no more hopeful sign of the prosperity of the country. It seems to me that that is a reason why they should be considered as a class. In the last three or four years these persons have suffered very severely; they have suffered more than any others, and it does seem to me that it is a most reasonable thing that they should be relieved first. Mr. Gladstone always held that Income Tax payers should be relieved, and that Income Tax should be regarded as a sort of reserve. But if you maintain it at l1d. you can hardly say that it is a reserve. The tax should be reduced for the safety of the country, and certainly in fairness to those who pay it.
  My right hon. friend behind me has objected to the remission of the duty on corn. I should like to state candidly my opinion upon that. I am placed in this difficulty. We have heard, and I agree with the statement, that this tax does not fall with any hardship on anybody. This was the argument for it two or three years ago. I myself do not believe that it affects the price of bread one bit, and, that being so, I cannot see that it is very wise to make an alteration in it.

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  I wish to see the basis of taxation widened and I would much prefer that some other indirect taxation had been taken off. However, I think it is fair that the payers of indirect taxation should have some advantage, and therefore I suppose we must agree to this. But it is a little difficult to understand why the repeal of a tax which two years ago did not affect anybody should now be regarded as a boon. The other subject I should like to refer to is that of the incidence of the Income Tax. Every year during the discussion of the Budget I have urged that the incidence of the Income Tax should be considered, and I am glad to see that at last the Chancellor of the Exchequer is going to appoint a Committee to consider it. To my mind the incidence of the Income Tax does want considerable attention. I have always urged that Income Tax should be a tax on income. In many cases it is not. There may be such cases as the Chancellor of the Exchequer referred to, in which men pay on£2,000 or£3,000 a year instead of on£50,000. All I can say is that there must be careless collectors in those districts. At any rate, they are extreme cases. There are many cases in which the Income Tax paid, especially by the smaller payers, is much larger in amount than they have any right to pay. There are many cases in which the tax is not a tax on income at all, and I hail with great satisfaction the statement of the Chancellor of the Exchequer that the subject will be gone into. The present state of affairs has been a crying evil for many years, and although I doubt very much whether the Exchequer will gain by the inquiry, I think the tax will be made fairer. I do not think the late Chancellor of the Exchequer would agree with this proposal. I think he repudiated the idea of investigation. I have always held the theory that there should be a different scale for what are called spontaneous incomes, as compared with industrial incomes, that the tax should be lower in the case of those persons who have to depend on their labour for their incomes, and higher in the case of those whose incomes are not attained by the sweat of the brow. This is a large question, and one which I do not wish to dwell upon now. I am extremely glad
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  that the Chancellor of the Exchequer has seen his way to relieve Income Tax payers. It seems to me that the action he has taken is a fair one. I repudiate altogether the idea that the Income Tax falls only on the rich No doubt there are some rich people in the country still—I am glad there are—and they pay heavily in the Death Duties, which is a form of deferred Income Tax. In the course of a few generations a great part of a millionaire's wealth is absorbed by the Chancellor of the Exchequer. I should not mind accepting a million on those terms myself; but still the fact remains that a great part of it does ultimately come into the Exchequer by means of this deferred system of Income Tax, in addition to the Income Tax paid during the millionaire's life. The smaller Income Tax payer is, after all, the backbone of the country; he has paid a large share towards the war expenditure of the country, and I think it is only fair and proper that he should be the first to be relieved.
  SIR WILLIAM HOLLAND: I confess I do not for a moment think that the anticipations of the right hon. Gentleman the Member for Sleaford are likely to be realised, and that hon. Members on this side of the House are in the least disposed to ridicule the Chancellor of the Exchequer for having repealed the Corn Duty. On the contrary, I, as one of the rank and file on the Opposition side of the House, warmly congratulate the Chancellor of the Exchequer on having taken that step, not only because of the intrinsic amount involved, but because the removal of the Corn Duty is tantamount to the removal of a constant peril—the peril lest we should be forced to return to that policy of Protection which we had thought was abolished once for all. So long as that duty remained it stood as a constant encouragement to those in the country who were anxious to have it substantially increased, and the day might by-and-bye have arrived when a weaker Chancellor of the Exchequer would have yielded to the enormous pressure which would undoubtedly have been brought to bear upon him. But I think that the good intentions of the Government in regard to the Corn Duty

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  are more than discounted by their evil intentions with regard to the Sugar Tax, which will be still further increased when the proposals of the Sugar Convention come into force. I certainly think, with those speakers on this side of the House who have preceded me, that the most glaring defect of the Budget is the paltry character of the relief which is afforded to the poorest class of the taxpayers. By the proposals of the Government the equilibrium between direct and indirect taxation is destroyed, and unfortunately it is destroyed entirely in the wrong direction. If the remission of£10,000,000 is to be given one would have thought that the greater part should be given to those who stood most in need of relief, and not that£8,000,000 should be given to the richer classes and only£2,000,000 to the poorer. I can quite understand that this Budget may be defended by some on the ground that the Government are once more looking after their friends. I will not pursue that topic, which I know is a sore one in certain quarters on the opposite side of the House; but I submit that the Government have still undoubtedly some friends amongst the very poorest classes of the community. So that, even on that theory, there would have been some justification for benefiting them more substantially than they are to be benefited by the present Budget. I do not know whether the Chancellor of the Exchequer has regarded the question of the Income Tax in this light, but to me it does appear that the Income Tax is differentiated from indirect taxation in that even without changing its amount the actual sum to be contributed does vary with the varying income of the individual, so that a smaller income carries with it its own relief; but indirect taxation, on the other hand, does not vary very much with the income of the individual. When a man is doing uncommonly well he may spend more on drink and on tobacco than he would at other times, but in the matter of food the case is entirely different. If less wages are brought home on a Saturday by a working man, his children are just as hungry on that Saturday as they were on the previous Saturday when he brought home a larger sum, and from that point of view I think a special claim can be established for the amelioration of those whose lot is
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  not only poor, but is becoming poorer still. It has been clearly shown by the Chancellor of the Exchequer to-day that he is aware of the fact that the wage earners are earning less now than for some time past. I daresay hon. Members may have noticed that month after month the paragraph headed "Changes in the Rate of Wages," in the Labour Gazette has invariably begun with the statement that the nett effect of the changes in the rates of wages reported during the month was a decrease of so much. That has been the monotonous tale for a great many months past, and it shows that the indirect taxes which have been contributed by the working classes, although not altered specifically in their amount, are gradually becoming a much heavier burden than when wages were higher. I cordially approve of the determination of the Chancellor of the Exchequer to institute an inquiry into the incidence of the Income Tax. There is a great case for investigation in regard to that particular tax
  I am sorry that the Chancellor of the Exchequer could not see his way to remove the Coal Tax. It does have the effect of hampering trade in many directions. I know that it has led to the loss of many important foreign contracts for coal, and the loss of these contracts obviously will be to diminish the volume of work for those engaged in the coal trade. We are in the habit of priding ourselves, and not without reason, that this assembly mirror public opinion in the constituencies-more or less accurately, but I put it to the Chancellor of the Exchequer whether he honestly thinks that the constituencies approve of a Budget amounting to between£140,000,000" and£150,000,000 in time of peace. For the last year or two in regard to this subject our tongues have been more or less tied. While the war was on the success of our arms was undoubtedly the first consideration of Members, not only on that side of the House but also on this side, but now that, happily, the sword is sheathed, it is time for us to put our house in order. I would like to ask where are the economists on the Government benches now? There was one a few months ago, but I

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  am afraid that when the right hon. Gentleman the Member for Bristol retired from office, the solitary representative of economy simultaneously disappeared. It is true that his successor this afternoon expressed a pious hope that our Army expenditure might be reduced, but a pious hope is not the language of a sturdy economist. The Chancellor of the Exchequer did not, I think, wear the garb of an economist when he sought to defend the present outlay on armaments by proving that it was less in proportion to our income than it was forty; years ago. A famous predecessor of his, Lord Randolph Churchill, in 1887 resigned his position as a protest against the military expenditure of the time I do not think there are many Members on the Treasury Bench who would contemplate resignation on that score now, although there is ten times more reason for it. If the Government is not more alive to the necessity for economy, I believe, judging from the by-elections we have had lately, that a determined electorate will insist on their views in regard to this matter being paid more attention to. I think it is obvious to every Member of this House that unless we husband our resources in time of peace we shall be incapable of making the supreme sacrifices in which the nation will be involved in time of war, for we shall be impoverished by having parted with and squandered money which is described as the sinews of war. Hence it happens that economy may from this point of view be regarded as the highest patriotism.
  I think it is also obvious to most Members of the House that the least satisfactory item of expenditure is the£34,500,000 we are called upon to provide for the Army. That outlay has met with very severe criticism, and no more effective critics have made their voices heard in this matter than hon. Members on the other side of the House below the Gangway, who have spoken to such good purpose; during the present session. The proposals of the Government with regard to the Army have been proved again and again to be both costly and inefficient, and it seems to me that in this important branch of expenditure we can ourselves take independent action almost without reference to other nations. We can decide on the plan on which we
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  shall form our Army, upon its size and its nature, without reference to continental Powers. In regard to the Navy however, it is obvious that we have not at all the same freedom, for every Naval Power fights on a common battleground. Therefore it is obviously our duty to keep pace with the leading nations of the world; but I am very much afraid that instead of keeping pace we are, in their eyes, at the present time, guilty of forcing the pace. The Chancellor of the Exchequer himself this afternoon recognised that many of our continental rivals would themselves welcome any proposals for the diminution of the outlay on the naval armaments of the respective countries. I can understand that among the different Governments there is considerable jealousy as to who shall take the initiative, lest the taking of the initiative should itself be interpreted as a sign of weakness. That I take to be a sentimental objection of which we in this country, with all our wealth, need have no fear. And whenever sentiment prevents us from facing facts, it becomes a National peril. That Statesman, Liberal or Conservative, will deserve well of his country and of the civilised world who does the best that in him lies to stop the policy of beggar-my-neighbour in armaments, and who works for a prôrata reduction, securing beyond all cavil our relative superiority as an essential factor, which, so far as I know, every great Power is willing to concede to us as being nothing more than our due.
  MR. GIBSON BOWLES: It is usual for those who have taken an interest in and who study finance to postpone their remarks on the Budget to the future occasions always afforded for the discussion of it, and the reason is that the Budget usually contains elements of complication which require to be considered quietly and deliberately before financiers pronounce upon it. That is less so this year than usual. The right hon. Gentleman's Budget statement is simple, broad, bold and intelligible, and, with a single exception to which I will come presently, I think his Budget is a good one. The right hon. Member for Sleaford seems to think it shows that the Government are riding

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  for a fall. I do not quite think that. If they had that intention and desire, the "bullfinch" of the Bagdad Railway would have furnished them with an excellent opportunity; and I think I could myself have made sure of securing for them their desired fall. But much to my satisfaction they have swerved aside from that jump and have gone through a gap. I do not believe they are riding for a fall; I should rather think they are riding for a dissolution. I am encouraged in that belief by the speech of the right hon. Gentleman the Member for Monmouth. The first part of the right hon. Gentleman's speech was admirable. It was the speech of a financier, in which he dealt clearly and accurately with the Sinking Fund. But the second part of his speech was sentimental, if not hysterical. That was the speech of an electioneering agent preparing the ground for a General Election. My remarks on the speech of the right hon. Gentleman the Chancellor of the Exchequer will be very few, but to one of them I think some importance should be attached. In the first place, I cannot but think, in spite of the right hon. Gentleman's protestations, that his estimates of the forthcoming year's revenue are extremely generous; that they are, in fact, too high. He estimates an increase of revenue for the year ending 31st March, 1904, of£3,200,000, or an increase of 2 per cent. over last year. I cannot think that the prospect of the increase in trade and of the prosperity of the country generally sufficiently justifies an estimate of so generous a character as that. Of course, I am aware that the right hon. Gentleman must rely on his Departmental officials, and I cannot and do not imagine that he exercised any influence in the preparation of the estimates of expenditure in order to improve his Budget statement this evening. That is, I think, impossible, for I have always found the right hon. Gentleman simple, plain, honest and straightforward. But there is, for in stance, one item in that estimate of revenue which, I believe, cannot be expected to be realised, and that is the expected increase of£2.200,000 in the Customs for the coming year, on the basis of existing taxation. I hope I may be
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  wrong. As to the Sinking Fund, I would point out that there are in our system two Sinking Funds. One is the old Sinking Fund, which is the excess, if any, of realised and actual revenue over realised and actual expenditure. That is the Old Sinking Fund. And the other, or New Sinking Fund, represents the balance which remains of what is called the Fixed Charge for Debt after the Interest on the Funded Debt, the Interest on the Unfunded Debt, the charge for Terminable Annuities, and the cost of management have been deducted from that Fixed Charge. To the New Sinking Fund I will return later. But as to the Old Sinking Fund, it is manifestly affected by an over-estimate of revenue such as I fear here. If any mistake of over-estimate has been made in the estimates of the revenue of the year, the result will be a serious damage to the old Sinking Fund. My own impression is that there is some over-estimate of the revenue to be derived next year, and that, consequently, the Old Sinking Fund will suffer.
  Then, as regards the revenue for Crown Lands, as the Committee know, the department which administers the Crown Lands are allowed, contrary to the practice that governs all other departments, and contrary to the very principle of our finance, to deduct the whole of their expenses from the proceeds of these lands, and only pay the balance into the Treasury. Now, a very remarkable thing has occurred in connection with these Crown Lands. Up to the year 1901 the net amount received for the Crown Lands was always increasing. They had gradually risen from something like£300,000 to£500,000, at which they stood in the year ending March 1901. And naturally so, in spite of the Department of Woods and Forests making their own deductions. But from the beginning of the new reign the Crown Lands proceeds have steadily gone down. In the year 1902 they fell to£455,000; last year they were the same amount; and for this coming year the estimate is£445,000. Why is it that the receipts from the Crown Lands, which must be increasing in value, have gone down£55,000 in three years? I should like the right hon. Gentleman to give me some explanation of that. It suggests to me that the moment has arrived at which a sound financial system requires that the Woods and Forests Departments should be treated as all

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  other Departments are treated, that is to say that they should pay into the Exchequer the gross receipts from the Crown Lands and that the House should vote the amount of their expenditure, instead of their being allowed to deduct it in what are apparently ever-increasing amounts. That is, however, a relatively small matter. The right hon. Gentleman makes his estimate of expenditure£144,000,000, and he adds expenditure from capital account, a sum of, I think, some £7,000,000. I need not remind the Committee that there is no such thing as a capital account in this country. We put all our revenue on one side of the account, and all the expenditure on the other, we neither have, nor could have, any balance sheet, and no one can estimate our full financial responsibilities or our full assets. Then the right hon. Gentleman adds local taxation and brings up his expenditure to a much larger sum. But even that larger sum does not represent the whole. I would remind the Committee that our public accounts are completely and absolutely false. In addition to the items mentioned by the right hon. Gentleman, there are appropriations in aid, payments out of gross revenue, and many receipts of the Civil Service which are never brought into the account, at all. As a matter of fact, the items I have mentioned ought to be added to both sides of the account, in order that the accounts might be made true. In addition, there is local taxation, which is now something over£100,000,000 a year—I am speaking of the three countries—and the local debt is considerably over£300,000,000. That also has to be kept in mind.
  As to the Income Tax, I rejoice that the right hon. Gentleman is going to have an inquiry into it. The time is ripe for that. There are abuses connected with the Income Tax which are perfectly monstrous. I do not allude to taxing all incomes in the same way, because it is all income, however earned, and therefore all taxable as such. My hon. friend opposite claims that one sort of income ought to be taxed in one way, and another sort of income in another way. I say nothing of the kind. Whether you get income from property or from your brains, it still is income. If income comes from personal ability, when the ability ceases the tax
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  ceases also; but if income is derived from permanent property the tax is permanent and continues. I see no grievance in that. What I do regard as a very serious grievance are the exemptions from Income Tax and the abatements which now exist in respect of the smaller incomes up to£700 a year. As a matter of fact, you only tax one-half of the incomes in the country, whereas you ought to tax them all. If you did that the result would be that a 6d. Income Tax would do the work that a 1s. Income Tax now does. I am aware that there would be difficulty in levying a tax on small incomes, but that is a question of machinery. Small levies of small taxes are not new. Penny and halfpenny postage stamps are small, but they mean a very considerable amount of revenue, without any inconvenience or trouble to the payer. As to the Corn Tax, the right hon. Gentleman the Member for the Sleaford Division and other hon. Members representing agricultural constituencies thought, when the tax was imposed, that a great new principle had been announced—a principle of eternal verity which would never be departed from. I ask myself what sort of a face the right hon. Gentleman the Member for West Bristol will present when he finds tha4t the Corn Tax for which he argued with so much conviction is repealed. I agree with the present Chancellor of the Exchequer. I rejoice at the repeal. When the late Chancellor of the Exchequer put this tax on, I agreed to it with the greatest possible reluctance, and only because, as I explained at the time, of the very great emergency which had arisen. That emergency has now passed away; and now we have a new Chancellor of the Exchequer who most properly thinks it is his bounden duty, if he touches indirect taxation at all, to take off the tax on corn. I am convinced he is right. After all, it is a hard thing to tax the food of the people; and I congratulate the right hon. Gentleman in taking off this tax which his predecessor put on.
  Now, I come to the one serious criticism I have to make. The right hon. Gentleman in appearance has increased the Permanent or Fixed Charge for the National Debt. In reality, he has

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  diminished it. He has added£4,500,000 of extra Fixed Charge representing new funded debt—and therefore necessarily to be added—to the£23,000,000, and should thus have arrived at a Fixed Charge of£27,500,000. But he only proposes to make the new Fixed Charge£27,000,000, and he thus diminishes the balance available for the New Sinking Fund by£500,000. His new Fixed Charge of£27,000,000 is in reality not more but less than the old£23,000,000. And even this£23,000,000 was already£2,000,000 too little. Everyone interested in finance protested against the diminution from£25,000,000 to£23,000,000 when it was made by the late Chancellor of the Exchequer. Having diminished the fixed charge set aside for the Debt, the right hon. Gentleman seeks to justify himself by the expectation of certain sums he is to get from the Transvaal. But he is to get these sums out of loans he himself is to provide. In effect the Transvaal says that if the right hon. Gentleman will lend the money it will pay what it owes. But that will not be in the present; it is only an expectation; and I submit that the Sinking Fund should not be dealt with by expectation. You must have real, solid, realised facts when you are dealing with such an important pillar of public finance and public safety as the Sinking Fund. The most important feature of our finance lies in this permanent Fixed Charge. I regretted to see that sum largely reduced by the late Chancellor of the Exchequer; and I regret to see it diminished, even in a small degree, by the present Chancellor of the Exchequer. Nor do I think the reasons given by the right hon. Gentleman are at all sufficient. This is the one blot in his Budget. I do not think that any importance is to be attached to the right hon. Gentleman's calculations as to the final extinction of our debt; for whenever a Chancellor of the Exchequer tampers with the Sinking Fund, he always enters into an elaborate calculation by which he shows that he has invented a system which, if he only gets his diminution of the Sinking Fund on that particular occasion, will result in the whole of the National Debt being paid off in thirty or forty or fifty years
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  as the case may be. I must just read; to the right hon. Gentleman one extract which I hope will be chastening to him and prevent him indulging in these expectations as to the end of the National Debt. In May, 1887, Mr. Goschen, the then Chancellor of the Exchequer, when proposing to reduce the Fixed Charge from£28,000,000 to £26,000,000,said—
  "The Chancellor of the Exchequer desires to observe that, according to a calculation which has been made, the proposed Fixed Charge of£26,000,000 will, if maintained, redeem the whole of the present Funded Debt(£600,000,000) at par in about fifty-two years, and the whole of the present National Debt(£700,000,000) at par in about fifty-six years."
  Now mark, that was in 1887, so that Mr. Goschen, Lord Goschen as he now is, predicted, arranged for, and settled finally for the total extinction of the National Debt in the year 1943. The right hon. Gentleman says now—"I am; going to make another arrangement for the Sinking Fund by which the whole of our National Debt will be got rid of in 1953." Thus putting off the end for another ten years, and I am afraid the next Chancellor of the Exchequer may present yet another fancy picture to us, but still put off the extinction of the National Debt to a still later date. As I have said, few remarks on details can be made upon a Budget on its presentation. With regard to this Budget, with the exception of the treatment of the New Sinking Fund, which I consider a mistake, I think it is a bold, a courageous, and, on the whole, a good Budget, and, in my belief, that will be the opinion of the country at large.
  MR. SYDNEY BUXTON: The hon. Member who has just sat down considers, with the one exception of the Sinking Fund, that this is a good Budget. In my opinion, and I believe the opinion of most of those who sit on this side of the House, that is the only good feature in it, because whichever way we look upon it it is a most disappointing Budget. Of course we agree with the proposal to get rid of the unfortunate tax put upon us last year, the Corn Tax, but I must say it will be rather difficult for the Government to argue that the remission of this£2,500,000 on the Corn Duty will be any

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  relief to the indirect taxpayers; for they argued last year that it was no burden. I think hon. Members opposite will agree that if you give something like£10,500,000 to the payers of direct taxation it is only fair that the payers of indirect taxation should have some relief This£2,000,000 given on the Corn Tax will not be, in their opinion, a relief, and therefore I hope we may have the, support of hon. Gentlemen opposite when we come to consider further reductions on the lines of indirect taxation, Nobody will dispute the proposition that the proposal of Chancellor of the Exchequer last year, and what he stated afterwards, was that if after putting on an extra penny last year the national position was such that he was able to relieve the country of that extra penny or two pence this year, he should combine it with a considerable relief to the indirect taxpayers. We should not object to the two going hand-in-hand; but we object to the preposterous proportion of the relief to be given to direct taxation as against the infinitesimal relief given to indirect taxation.
  The right hon. Gentleman said that of the taxation of the last two years;£17,500,000 was put on direct taxation, and£15,500,000 upon indirect taxation, Now he proposes to relieve direct taxation by£10,000,000, and thus leave only£7,500,000 a year, whilst he leaves upon indirect taxation a burden of£13,000,000; a year, a burden, the Committee will bear in mind, which is not due to the war, but to the gross extravagance of the Government in regard to expenditure. And I am afraid that this is the last remission we are likely to have for some time to come, for the obvious reason that the Chancellor of the Exchequer is presenting this year an increase of expenditure of no less than£11,000,000. Since 1895, in a period of eight years, the expenditure of the country, owing to the gross extravagance of the Government, has risen by no less than£46,000,000; this year the Chancellor of the Exchequer has anticipated a reduction of£2,500,000. The Government anticipates a reduction next year of£2,500,000 in ordinary expenditure. This is from a Government which in eight years has increased the right the ordinary expenditure by£46,000,000, and even in the current year is increas-
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  ing it by£11,000,000. It is surely too much for us to expect to get any reduction of expenditure from the Government constructed on its present basis. I am afraid, therefore, that this is the last opportunity the right hon. Gentleman will have of giving any relief of taxation, and that makes it all the worse that he should have devoted the whole of his relief to direct taxation.
  I have said something with regard to the expenditure of the country. The annual taxation imposed during the last three years amount to something like£33,250,000, while the elasticity of the revenue due to the increase of wealth and population has produced another£22,250,000 since the Government has been in office. They have therefore had the handling of no less than£55,500,000 Unfortunately, the increase of expenditure has been so great that it has swallowed up a large proportion of that, and these taxes on sugar, tea, corn, and so forth are really due to ordinary and not to war expenditure.
  The right hon. Gentleman, in defending the way in which the Government have met the liabilities of war, put the cost of the war, at£217.000,000, and said that out of that sum£67,500,000 had been met from revenue. But the point as regards the Government is this: How much additional taxation have they imposed for war purposes? The liabilities were£217,000,000, but the extra taxation in the three years amounted only to£48,000,000. I am sorry the right hon. Gentleman fell into the fallacy which seemed to permeate the mind of the late Chancellor of the Exchequer. We had to point out over and over again that while it was quite right during a time of borrowing to suspend the Sinking Fund because it was exactly the same whether you applied it to the liquidation of new debt or to the purchase of old debt, it was not right, in considering how much had been met from additional taxation, of the Sinking Fund.
  In conclusion, I wish to say a word in regard to the proposals of the Government concerning the Sinking Fund I am glad the right hon. Gentleman is going to reconstitute the Sinking Fund on its old basis, and make the charge of the

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  debt a fixed charge. We shall all agree to that, but I think it extraordinary that the right hon. Gentleman should have left the impression on the Committee that he was going greatly to increase the application of the Sinking Fund to the redemption of debt. In his last speech as Chancellor of the Exchequer his predecessor distinctly said that he intended as soon as peace came to increase the Sinking Fund, but the right hon. Gentleman, instead of increasing it, is actually diminishing it by£500,000. The whole argument of his predecessor in 1899, when he reduced the fixed charge from£25,000,000 to£23,000,000 (and the right hon. Gentleman adopted his view this afternoon) was that the amount of the fixed charge ought to bear some relation to the burden of the debt. The Sinking Fund in 1899 was just under£6,000,000, with a debt of£630.000,000. If that is a minimum Sinking Fund for a debt of£630,000,000, the Sinking Fund for a debt of£800,000,000, as it now is, ought to be£7,000,000 or£8,000,000 a year. If that amount is added with the interest to the old Sinking Fund, the amount is not£27,000,000 as the right hon. Gentleman proposes, but more like£31,000,000 or£32,000,000 a year. The right hon. Gentleman said the proportion of the Sinking Fund had increased of late years. But£120,000,000 had been added to the total of the debt. Looking to the fact that we are giving£12,000,000 to remission of taxation, the right hon. Gentleman makes a most miserable proposal in regard to the extinction of debt. I should have thought that after the warning we have had in South Africa and China our experience there would have induced the Chancellor of the Exchequer to have made some better proposal. We shall have other opportunities of discussing the real blot on his proposals, namely that he is relieving the Income Tax payers to an unnecessary extent and not relieving the taxes upon the necessaries of life.
  Mr. J. FITZALAN HOPE: We are not so heavily burdened now as in the past, for we enjoy very great immunity which we can hardly hope for in the future. In support of this view I should like to
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  call Sir Robert Giffen. Although we may not agree with all his theories, still on matters of finance his authority is undoubted. Sir Robert Giffen writing in The Times on January 10th last year said—
  "The abnormal character of the financial period which began about 1860 and continued to a recent date should be distinctly recognised. So many fortunate circumstances at the same time cannot be counted on in the history of any country. The growth of real expenditure may indeed be expected to continue. … but in all other respects the conditions seem likely to be more ordinary. In the way of outlay, especially, to guard against the armaments of foreign Powers, the good fortune which rendered possible the penuriousness of the sixties and seventies has ceased. It may be doubted whether that penuriousness was always as well advised as it was popular. … Bnt in any case there cannot be a doubt that our former immunity from the common lot of nations is at an end. Great military Powers have become great naval Powers, and we must be strong by land as well as by sea if the Empire is to continue at all."
  He makes an estimate of what probably would have to be our normal expenditure in future, and he said that if it was£160,000,000 a year even then we should not be worse off than we were on the average in the sixties. This is borne out by a comparison of two other authorities, Mr. Dudley Baxter, who wrote in the year 1869, and the hon. and learned Member for Haddington, who spoke on this matter last year, and who has also spoken to-night. I notice that there was a slight variation in the hon. and learned Gentleman's statement, because last year he put the whole national income at no less than£1,750,000,000. To-night he takes it at£1,600,000,000, and of course if the latter figure is right the argument is somewhat invalidated, but only to a slight extent, and it remains substantially the same. Mr. Dudley Baxter in 1868 put the national income at£800,000,000, but the expenditure in 1868 was£68,000,000, and at the same proportion now, on the hon. Member's estimate of last year, it would have been£148,375,000; therefore on the figure we have heard to-night, we are better off in our expenditure than we were in 1868. Our expenditure is 8 per cent. now as against 8½per cent. then, and even if you add the burden of the rates it works out at about 11½per cent. of the total in each case. You really get a better

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  result if you compare the amount of our debt to the whole volume of national capital as estimated by the best authorities. Let me just say that I think the hon. and learned Gentleman underestimated the debt of France. As figures have been supplied to me by Monsieur Jules Roche the present debt in France amounts to an equivalent in English money of a sum representing no less than£1,535,000,000, or considerably more than double our own. Taking this proportion between the National Debt and the whole volume of capital I draw even more favourable conclusions. I take the figures of last year, namely£768,000,000 as the whole volume of the debt, and it is practically the same this year. In 1865 it was considerably more, for it was then£815,000,000. But according to Sir Robert Giffen's calculation, the total wealth of the country was somewhere about£6,000,000,000 in 1865 and now it is£15,000,000,000. Of course if you go back to more remote times you will find, taking what we owed in 1815, that it was 33 per cent. of our total estimated wealth, and by that calculation we arrive at the enormous total of£5,000,000,000. I suppose Sir Robert Giffen would be the first to acknowledge that in all these calculations there is a certain speculative element. Making a very large deduction for them, the fact remains that our debt in proportion to our national wealth is nothing like as great now as it was in the time of Mr. Gladstone's great Budget. I do not want to put this before the Committee in any way as depreciating, but as praising economy, but I especially deprecate the idea that either of our two great fighting services should suffer. I confess that I was a little concerned—by some remarks made by the Chancellor of the Exchequer about the growth of our Army expenditure, which I confess was somewhat different from the tenor we have heard from other speakers within the last few months from the Front Benches I know there are some hon. Members who think you can economise on the Regular Army by some definite development of the Auxiliaries, but I cannot think that they have thought out the difficulties of such a course. While on the one hand there is complaint of the
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  cost of the Regular Army, on the other hand there is complaint amongst the Auxiliary Forces of the increased amount of work which is now expected from them. I know that is a serious question, and I trust the Commission recently appointed will find some way out of it. If you are to depend less on your Regular, and more on your Auxiliary Forces, it is certain that you will have to get more work out of your Auxiliaries. The statement which has been made is totally misleading, and I cannot get away from this conclusion: that unless you are to depend more on the Auxiliaries, you must maintain a larger Regular Army and pay them more.
  There is one little matter, perhaps rather technical but none the less important, I to which I would draw the Committee's attention for a moment. I refer to the rule whereby unexpended balances at the end of the year are not allowed to be carried over by the Departments, but are obliged to fall into the Sinking Fund. That, I believe, leads to great extravagance, because it entirely takes away from the officers of the Department any incentive to economy. They know that if they economise it is not they nor their work that will benefit by that economy. This matter was gone into by a War Office Committee some two years ago, and it was very distinctly condemned, and several instances were then brought up of the extravagance to which it led. It is not the practice in Germany, and although I know that very strict constitutional jurists will be against me, I think we will economise much more by allowing these balances to be brought forward in the ordinary way of business. There are two courses open—the one is to reduce expenditure, the other is to find fresh sources of revenue, and I believe it is to the latter we shall have to go. I have not the time nor the wish to consider this matter just now, but I will just mention this fact. Last year we re-organised the tariff of the Transvaal on this kind of basis. It was 7½per cent. on most things; it was I nothing on necessities and materials for the development of the country; it was more on luxuries If we applied that tariff at home, I believe that£8,000,000 a year is a very low estimate

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  of what would be gained without inflicting any palpable injury on the consumer. But if the consumer is the plea, let us consider that now in the course of taxation the consumer is very severely hit. I do not speak of the tax on corn which is now to be remitted. I have always thought that the burden of that disappeared in competition and was paid by the foreigner I am bound to say that if the result of the remission is that food becomes any cheaper next year I shall be very glad, but I shall be much surprised. Undoubtedly the Sugar and Tea Duties do press very severely. I think that, roughly speaking, the duty on sugar amounts to something like 30 per cent.ad valorem,and on tea to 75 or 80 per cent. I do believe, if remission had to be given to indirect taxation, that it would have been more appreciated on either of these items. Personally I believe we shall have to go further and extend our basis of taxation, and get more out of the foreigner who competes with us. I confess I think that the Estimates of the Chancellor of the Exchequer are a little sanguine as to the future. I hope, however, that I may be wrong. But, whatever the means, the duty remains, and whatever the unpopularity we may temporarily incur, it would be nothing to the maledictions, both loud and deep, that would fall in the hour of trial upon a Government that had failed to tell the people what they knew to be the truth and to call on them to make timely provision for the common need.
  MR. EMMOTT: The Budget which the right hon. gentleman the Chancellor of the Exchequer has submitted to the House tonight has been variously described. We have been told that it is a dissolution Budget, and that the Government are riding for a fall. Personally, I would describe it, in the language of the cricket field, as an attempt "to stop a rot." It must have been a source of satisfaction to the Chancellor of the Exchequer to be able to propose such a large reduction of taxation in this his first year's Budget. The question of the Sinking Fund has been dealt with so fully by hon. Members on both sides of the House that I will not say more than this with regard to
  304
  it, that it must be evident, even if we get the money from the Transvaal and from China, that the additional provision being made for the Sinking. Fund is not at all in proportion to the addition that has been made by the nation to the National Debt. The great point on which I think the Chancellor of the Exchequer is to be congratulated is in reference to the remission of the Corn Duty. There is no doubt that some hon. Members opposite are bitterly disappointed with regard to this, but, personally, I rejoice that this is not to be a permanent tax. It was, to a small extent I admit, a protective tax. It certainly bore more hardly on the very poor than any other tax, and I rejoice that the right hon. Gentleman has seen his way to remit it. Speaking, in my constituency last night I said that if the Chancellor of the Exchequer reduced the Income Tax by 3d. he would have no money left for further remission of taxation. The course of events has proved the evil of making prophesies before one knows the facts. The right hon. Gentleman has not only reduced the Income Tax by Id. more than I foreshadowed, but he has remitted the Corn Duty as well.
  And it being half-past Seven of the Clock, the Chairman left the Chair to make his Report to the House.
  Committee report Progress.
  To sit again this evening.

EVENING SITTING.

  WAYS AND MEANS.
  Considered in Committee.
  (In the Committee.)

  CUSTOMS—TEA.
  Motion made and Question proposed, "That the Customs duty now charged on tea shall continue to be charged until the first day of August, nineteen hundred and four (that is to say): Tea … the pound, Sixpence."—(Mr. Chancellor of the Exchequer.)
  MR. EMMOTT: At the time of the adjournment I was congratulating the Chancellor of the Exchequer upon the unexpectedly large surplus he was able to devote to the remission of taxation, and I was saying that I agreed with the hon. Member for King's Lynn that I thought the Estimates of the right hon. Gentleman were based on a rather sanguine view of the possibilities of the future. Particularly is that the case with regard to the Customs. This year the returns show a reduction of£767,000 in the revenue from Customs on the Estimates, and next year the Chancellor of the Exchequer is estimating not only that he will get that£767,000 but in addition another£1,400,000. I think an estimate of that kind is not usual on the state of things as they exist in the country at the present moment, though I hope it will be justified. Many believe that when the Transvaal loan is floated there will be a considerable reaction in trade and that we shall have greater prosperity than we had last year, but in any estimate like this, which is based, as I understand it to be, on the returns of Income Tax as showing the general prosperity of the country, it is only right to remark that the Income Tax of last year was based on the profit of the three preceding years. I do not think the profits from business since 1900 have been so large as they were in 1899–1900,audit is possible that the Income Tax will not show that increase which the right hon. Gentleman expects, although, so far, I admit the returns of foreign trade are extremely good. But there are no signs of such a general revival of trade as would lead one to adopt the sanguine view which the Chancellor of the Exchequer has put before us. There is one other matter which may justify the right hon. Gentleman in regard to these Estimates, which is that he seems to be expecting that in future years there may be a considerable reduction in the expenditure of the Army. I hope the Government, although they refused all Motions on the subject when the Estimates were before us, has taken heed of what I believe is the general feeling of the House, if it could only be expressed without party feeling, and also the general feeling of the country, that we are spending more than we ought on military affairs. I have no doubt next year the right hon. Gentleman will be able to point to reduced
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  Army expenditure, and that even if he has over estimated the receipts from the Customs he will not have to increase taxation At Question time we had sad news with regard to Somaliland. It is quite clear in regard to that matter that instead of spending hundreds of thousands we may have to spend millions before it is concluded. The right hon. Gentleman also said there should be a Committee of Inquiry into the incidence of the Income Tax I hope that will be held, but I do not think the right hon. Gentleman will find many such cases as the one which he instanced where the estimate was put up from£3,000 to£50,000. I know some industrial centres fairly well, and I think there can be but few cases of that kind. On the other hand, if we could lessen the number of assessments left to the Commissioners, and make everybody return their own incomes, it is quite possible that we might find many incomes under estimated, and the country would benefit.
  I must join every hon. Member who has made an attack on the proportion of reduction that has been made as between direct and indirect taxation. The right hon. Gentleman said without including the Coal Tax the amount received from indirect taxation was£15,127,000, and the amount received from the Income Tax was£18,118,000. He is now proposing a remission of£10.000,000 in regard to the Income Tax, whilst he only remits£2,500,000 of indirect taxation, which will leave indirect taxation at£12,500,000, whilst direct taxation is only represented by£8,000,000 If to the indirect taxation the Coal Tax is added, the indirect taxation will altogether amount to£14,500,000, so that the old proportion of taxation will be entirely destroyed in the future, and indirect taxation will have been increased by far more than its just proportion. In regard to the Income Tax, we leave small incomes untaxed, and with regard to small incomes, I think, if it could be usefully done, there is an irreducible minimum of income which should not be taxed at all. We formerly carried out the principle almost because at one time of the necessities of life only tea was taxed, but now bread and sugar are taxed, and therefore the smallest incomes pay a consider-

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  able amount of taxation which a few years ago they did not pay. It has been said that a high Income Tax is a danger, in as much as it diminishes our possible resources when any great strain is put upon the country. That is true, and I think we ought to be very careful not to depart from the lines upon which our taxation has been based throughout, but I venture to say that we have been shown during the late war that the Income Tax is not our only resource in case of emergency. The right hon. Gentleman told us that the Sugar Tax and the Bread Tax had been collected with very little trouble, so it has been clearly proved that in the case of any great strain coming on this country there are other sources besides the Income Tax.
  In conclusion, the right hon. Gentleman dwelt, as all Chancellors of the Exchequer have done during the last twenty years, on the fact that the real danger of the country at the present time is our greatly increased and growing expenditure. It is quite hopeless for us to imagine that we are going to reduce our expenditure at home, because it is perfectly evident we must spend more rather than less in connection with the affairs of these Islands. The expenditure for the Navy cannot be reduced unless the expenditure of other nations on their navies is reduced also, but I hope the Government will lose no chance of joining any effort which may be made in that direction. We are left therefore with this, that the expenditure on our Army is the one thing upon which we may diminish the calls made on the taxpayers of this country. I believe, as I said before, that relief may come in that way, and I have only one suggestion to make in regard to this Budget. I once knew a case where a Chairman of the Finance Committee of a municipality left the local authority and went on the School Board in order to see what he could do in the way of reducing the expenditure of the School Board. He was not a success because he became an ardent supporter of increased expenditure. The suggestion I make is this, that if we spend too much on the Army we should ask the Chancellor of the Exchequer to change places with the Secretary of State for War, which might demoralise the Chancellor of the Ex-
  308
  chequer, but would probably make the Secretary of State for War an economist.
  SIR ALBERT ROLLITT: I do not propose to discuss the proposals of the right hon. Gentleman generally, but there are two points, one of which has been referred to very little and the other which has not been mentioned at all, to which I should like to refer. I should like to add my testimony to what I think was the most practical, able and businesslike speech of my right hon. friend, and which, apart from the merits and demerits of his proposals, is one likely to commend itself to business men in this House. I re-echo, as many have done, the last words of my hon. friend opposite that this question of the combination of efficient economy with a decrease of expenditure is all important. I believe no work can be more useful to the country than the strict attention which is given to the revision of the Estimates of the country. With regard to the question of the Army I have been sorry to notice too great a disposition to magnify the importance and utility of a large Regular Army as compared with the cheap, and what I believe may be made a thoroughly efficient force in the shape of our Auxiliary forces. I do not think a feeling of fair regard to the difficulties and the condition of the Volunteer Forces has always been applied. The recent regulations are a mistake, and I think instead of seeking to economise in the direction of Army Corps and the like we should seek to economise by having a small force and developing in the people of our country a general readiness to take up arms if there is any necessity. I believe the Income Tax payers will be grateful for the remission of taxation, and I think they are entitled to—I do not say the full amount, because I might be disposed to deal somewhat differently with that point—but a considerable reduction is due to them. We ought to be very careful to retain the elasticity of this tax. It is not the only resource in times of emergency, but a very fruitful one, and it has the merit of being popular in this country. I think it is a good thing to maintain the equitable incidence of taxes, and not to tax the patience, as well as the pockets, of the

  309
  taxpayers, and that, at the earliest opportunity, remission should take place. What I think will be even more acceptable is the proposal to institute an inquiry. The Income Tax is a very difficult tax to administer in some points of detail, and I certainly think, in instituting this inquiry, that regard should be had not only to the real incidence of the tax, but also to the position of the small tradesman, who has the struggle for commercial existence to undergo, upon whom this burden most heavily falls. The hon. Member for King's Lynn spoke against the suggestion that there was a distinction of principle, which I believe, between taxation of realised property and precarious income on profits made in trades and professions. My hon. friend and others have taken exception to exemptions and abatements, but I think without those this tax would be a cruel and unpopular one. In the matter of abatements, I should like to go farther and adopt some fair graduation which would adapt the tax to the men who are able to pay. I hope that is a suggestion which the Chancellor of the Exchequer will find it possible to deal with.
  Apart from the Income Tax he has so generously remitted, the Chancellor of the Exchequer had considerable choice as to the reductions he might have made. He declined to remit the Coal Tax, because the exports had not been diminished, but I venture to think that this tax is disadvantageous to trade, and I do not admit the stoppage of exports to be the crucial test as to the propriety of the tax; I might remind the Chancellor of the Exchequer that one of the arguments in favour of the tax was that it would restrict exports, and so prevent the remote and scientifically preventive possibility of the extinction of our coalfields in the dim future. I believe other means of economy in that matter will be devised to prevent the serious consequences that would ensue. With regard to tea, I think it may now be regarded as a practical necessity, and though I have a personal interest with regard to the remission of the duty on coal, I feel that the pressure of indirect taxation is very considerable, and I Should have been extremely glad if some reduction had been made in the
  310
  case of tea. Sugar again is distinctly a food—a necessary and most nourishing food—and an article indispensable to the great majority of the poor. I would remind my right hon. friend and the Committee that the Convention will come into operation, and whatever predictions may be made, I venture to say that it will increase somewhat the price of sugar. I should have liked that the figures had been so adjusted as to make a somewhat less decrease in the Income Tax and to remit some of the taxation upon either tea or sugar—if possible of such an amount upon sugar as would counteract the increase which will necessarily arise from the operation of the Convention. While I approve of the reduction in the Income Tax, I think there were considerations that might have pointed in other directions, and would certainly have been acceptable to myself. In regard to the remission of the duty on corn, I am glad to say that I am not in the dilemma of some of my hon. friends on this side of the House, and I have no concern with the approaching quarrels between the Government and the right hon. Gentleman the Member for Sleaford. I think they are on the horns of a dilemma. If it was a good tax, as we were told, why remit it, and if it was a bad tax why was it ever imposed? In any case I have an absence of responsibility because I opposed it on principle. I did not support it reluctantly like the hon. Member for King's Lynn, but I voted against it, because I was not led away by those specious and fallacious arguments that no one would bear the tax, that everybody would benefit, and that everything would come Out of nothing. Well, these are arguments, but they are not facts, and I am glad, that the situation has been redeemed by the present Chancellor, It was a standing temptation to proceed in a direction which I am sure would not have commanded the general approval of the House. I am glad it has been repealed.
  I have only to add a word on one point to which I wish particularly to draw the right hon. Gentleman's attention, and on which he maintained significant silence. On the occasion of the discussion of the Budget, reference

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  has generally been made to a subject in which I have taken very great interest. I mean the question of our Savings Banks. Nothing has been said about the result of the decrease of interest on Consols this year in its bearing—a very important bearing—upon the future of our Savings Banks. I should like to point out to my right hon. friend that there is a growing liability of which he will have to take note unless he passes legislation on the subject. That arises from the fact that this year the interest on Consols is reduced by a quarter per cent. The effect of that will be felt by the Chancellor of the Exchequer in making him less able to meet the deficits upon the working of the Savings Banks and Friendly Societies, and it will involve him, much as we may regret it, in an expenditure of about£38,000. That will increase the deficits which he must meet this year to something like very nearly£250,000, and it will increase it in the next four or five years to an amount approaching£500,000. I am extremely sorry that this question should have to be raised from the force of circumstances, but a deficit of nearly£250,000 is a matter of which the Chancellor of the Exchequer must take note. A Select Committee on which some of us sat was appointed on the subject some time ago, and that Committee recommended that the interest payable by the Savings Banks to depositors should be reduced by⅛per cent. Some of us suggested the enlargement of the area of investment might meet the matter, but there was an equal division of opinion in Committee on that subject. Concessions were made, and I think it was ultimately, virtually agreed, in consideration of those concessions, that a compromise was inevitable, and, upon the whole, I think it would have to be accepted. These institutions are of the greatest importance to this country as a means of encouraging thrift, and I have to convey to my right hon. friend an expression of the belief of those interested, that he has not only their welfare at heart, but that he will do all he can when the exigency arises in regard to the price of Consols—which is really the cause of the difficulty—and we hope that he may see his way to meet
  312
  it by some other means than the reduction of interest. In any case I ask him to state, if there is to be a reduction, when it is likely to take place. I take it that it must be effected within the present session by legislation if at all. The date suggested by the Committee was 20th November, 1902, but that is past, and I would point out to the right hon. Gentleman that it would be most inconvenient and most injurious, and would involve endless trouble if any date were fixed which was in the middle of the Savings Banks year. I hope and trust that until the 20th November no change will be made. I hope also that the change will be made simultaneously in the case of the Post Office Banks and the Trustee Banks, but that above all he will let us know as early as possible what are his intentions in that direction, and how he means to meet the deficiency to which I have referred. I hope that in the reply he makes he will indicate his interest in, and his sense of the value of, these banks, and give us an assurance that he will make that change, if it is made at all, as little injurious to thrift and the saving habits of the people as he possibly can. With these observations I beg to express general approval of his proposals. There are some details which I could have wished had been otherwise. But I believe the Budget to be sensible and practical.
  MR. CHANNING: I wish to associate myself with the remarks of the hon. Member for Islington in regard to Savings Banks. It seems to me that it will be very disastrous if we are to add to the character of this Budget a further step which might possibly be taken, in view of the deficit that may arise, by reducing the interest on deposits in the Savings Banks. If you distribute your relief in the proportion of£4 to the rich man, and£1 to the poor man, and if you add to that a reduction of an eighth per cent. on the interest paid to depositors, it will be a very serious matter. I sincerely hope that either owing to the price of Consols, or to some other method, the right hon. Gentleman may see his way to meet this difficulty without reducing the interest on deposits. I can assure him from having discussed this question very fully with working

  313
  men in the country, and those specially interested in it, that that would be most heartily resented, not only in this House but in the country itself. I should like to say—I do not wish to say it with any disrespect to the Members of the Select Committee—that some of those in the House may remember that I myself drew attention to the fact that the Committee was largely composed—almost entirely composed—of the banking interest representatives in the House. It was only by an effort which was made by myself and supported by one or two Members that one representative of the working classes was added to that Committee. I would strongly recommend the right hon. Gentleman to consider that fact in view of the recommendation of the Committee. With regard to the Budget, I consider it a rich man's Budget. What is more, I consider it a rich rich man's Budget, and for this reason. Two hon. Members for Islington have referred to the position of the small Income Tax payers. The right hon. Gentleman has announced, very much to the satisfaction of all interested in this question, that an inquiry will at last take place, but I will remind him and the Committee that a promise was made by his predecessor last year in reply to Amendments moved by the hon. Member for the Elland Division and by myself. In the course of the debates——
  MR. RITCHIE: The proposal I make as much wider.
  MR. CHANNING: I am quite aware that the proposal of the right hon. Gentleman is much wider. But the point to which I attach the greatest importance—and I hope it will be included in the inquiry—is the question of the conditions under which exemptions and abatements may be extended to the poorer classes of Income Tax payers. I myself would have ventured to suggest that instead of giving 4d. relief in the Income Tax that the reduction should only have been 2d., or perhaps only 1d., and the rest remitted to the poorer classes, and to the lower middle class, in this country, who, in my opinion, have borne far more than their share in the expenditure on this war. I cannot imagine why the right hon. Gentleman has not given 3d. off the Income Tax and applied the other penny to the extension of the system of
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  abatements and exemptions for the poorer class of Income Tax payers. I shall move an Amendment in that sense with the view of giving relief in the way of exemptions and abatements to the struggling tradesmen, and small professional men who have really had to suffer far more than the great millionaires, to whom the reduction of 4d. on the Income Tax may be extremely pleasing, but it is not at all in any sense a necessity. I have for years past protested against the policy which underlies all these Budgets. It appears to me that, since 1895, we have had one perpetual policy of increasing expenditure which went to the benefit of the rich, and of shifting the burden of that expenditure, year by year, more from the shoulders of the rich to the shoulders of the poor. Hon. Members may regard that as a laughing matter, but I do not think it is [An HON. MEMBER: It is not a fact.] Does not an increase in indirect taxation mean the transferring of a portion of the burden which would otherwise have fallen upon the wealthy classes to the shoulders of the poorer classes?
  MR. RITCHIE: What I say is that the change in the incidence of taxation in past years has been in the direction of putting taxation in the form of direct taxation and taking it off indirect.
  MR. CHANNING: The increase in the last three years——
  MR. RITCHIE: I am not talking of the last three years.
  MR. CHANNING: I am discussing the new forms of taxation. We have heard with the greatest satisfaction that the right hon. Gentleman is taking off the Corn Tax. I share a little the surprise of the right hon. Gentleman the Member for Sleaford at the course taken by the Government in that respect, and I have some reason to do so, because I was the one Member in the House who moved in Committee that the tax should be imposed for one year only. The late Chancellor of the Exchequer replied to me last year—giving his quotation in exact words—
  "It has never been the habit of this House to impose a new indirect tax for one year only, and that for the obvious reason that it would leave everyone uncertain as to the future; for imposing any indirect tax only for twelve

  315
  months would undoubtedly interfere with trade, for a reason which would probably be inadequate, and which no Chancellor of the Exchequer would think of putting forward."†
  and in concluding this section of his speech the right hon. Gentleman wound up by saying—
  "That is why I have proposed this Corn Duty as part of our permanent system of taxation."‡
  Warmly as I welcome the remission of this tax, for the sufficient reason that I do not at all share the opinion of hon. Members opposite that the indirect taxation had been a light and trifling matter and the only burden had been upon the rich, I must say there is a complete hiatus between the reasoning of the Government last year which it was perhaps hard to account for. My right hon. friend the Member for Sleaford, and other Members representing the agricultural districts, remind me a little of a picture which appeared in one of the early numbers of Punch. It represented an agriculturist being drawn into swamps by a Will-o'-the-Wisp light. That was the Protection cry of those days. I have no doubt that many agriculturists in this House and out of it regarded this as a protectionist tax. But I confess, although I thought that it was of a protective nature, I always thought that the motive for the tax was largely connected with the Colonial Conference about to take place shortly afterwards. He conceived that the tax represented one of the suggestions which emanated from Birmingham, and certainly it was supported with remarkable persistency as well as ingenuity, by the present Postmaster-General. It has been said that this is a trifling tax which has not been felt by the people. I think that the right hon. Gentleman the Member for Sleaford dwelt upon certain figures that appeared in the Labour Gazette. I do not think he can have considered those figures with very great care, because undoubtedly they show that whereas in some districts, when the tax was first imposed, and where the price of bread was already high and left a margin to the traders and bakers, the price did not rise any further. But what are the fact With regard to London, which contains 5,000,000 people. They show an increase in the price of bread of 1d. all over this vast metropolitan
  †See (4) Debates, cix., 164.
  ‡See (4) Debates, cix., 167.
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  area. [An HON. MEMBER: No!] These are the official figures given in the Labour Gazette. The price was from 3½d. to 4d. in 1902, and from 4½d. to 5d. in 1903. If the hon. Member can produce better figures than these he is welcome to answer me.
  MR. CHAPLIN: What I stated was that the figures in the Labour Gazette showed that in some of the larger towns in the North of England there had been a reduction. Would the hon. Member kindly read the statement with regard to Oldham and also the whole of the statement with regard to London?
  MR. CHANNING: I am aware that Oldham is one of the instances in which there has been a reduction, but in the greater number of cases to which the right hon. Gentleman refers the price has remained the same. In all cases that is the fact with the exception of Manchester and Liverpool, where the price was low in 1902 and has remained the same. I do not profess to understand the reason for the state of the price there, as I am not familiar with the conditions in those cities.
  MR. CHAPLIN: They are reduced.
  MR. CHANNING: No, they have not been reduced. Oldham is reduced, but not either Manchester or Liverpool. I think I have sufficiently referred to that matter. What I wish to say is that with one or two exceptions prices are either the same or have risen since last year. That is, I believe, incontrovertibly proved by the official figures. Now we are asked to consider the Budget in which there is this relief of the Corn Tax and a relief of 4d. on the rich man's Income Tax. I wonder if hon. Members have really considered what the Corn Duty and the whole of this indirect taxation has meant for the poor man. An agricultural labourer with 14s. a week, who spends one-third of his income on bread and other articles which paid the Corn Duty, has been paying, Without any increase in the price of bread, an Income Tax of 3½d. in the£.But if the price of bread went up½d. he was paying an Income Tax of 13d. in the£,and in

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  the case of the Loudon working man, where the price of the loaf had gone up a Id., and had this imposed on him not four but eight times the ad valorem duty, there was an Income Tax of 26d. per£. There is no doubt whatever about these facts. The hon. Member for Islington, who first addressed the Committee, seemed to consider that the poor man's case, in this matter, was entirely a question of the consumption of alcoholic liquors. I am quite prepared to take the basis of a teetotal working man's budget and to show that taking the consumption of tea, sugar, bread, and tobacco, the taxation of non-alcoholic articles has meant for working men, with incomes ranging from the labourer at 12s. to 14s. to the incomes of workers at 35s. to 40s. per week, has meant that they have been paying an Income Tax from one-and-a-half to double what the rich man has paid during the last two years. I have shown that in the case of the labourer the Corn Tax alone represented something like an Income Tax of Is. in the£1 where the price of the loaf had gone up, as it did very generally, and as I found it universally the case in Devonshire and the West of England.
  There is another part of the question in regard to the full incidence of taxation on the poorer classes of the community, which has not been mentioned in the debate, but which should not be left out of consideration by hon. Members who wish to do justice as between man and man. The hon. Member for King's Lynn referred to the enormous increase in local taxation. That is a matter which we cannot leave out of sight. I ask hon. Members to consider this fact besides the fact that the working classes have been paying in indirect duties a higher Income Tax during the last three years than the wealthier classes I have been in consultation with some of the most experienced financiers in the Co-operative movement during the past few days in regard to this matter. I asked them what is the proportion which the working man pays out of his wages for local rates either directly or indirectly, and the answer was that, taking the income of the working mail at 26s a week, the amount of rent he paid was 6s., and that the proportion of the rent which
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  belonged to the rates was Is. 8d. That means that the working man pays indirectly through rates an Income Tax of 15d. per£. Now, what proportion of his income does a man who occupies a house rented at£400 or£500 pay in rates? Instead of paying an equivalent to a tax of 15d. in the£,he is paying an equivalent to a tax of something like 3d., 4d., or 5d. in the£for local rates. Taking it all round, it will be found that the working classes are paying in Income Tax, without counting alcoholic liquors at all, more than double what the wealthy classes are paying. I think, if inquiry were made into this matter, that that would be proved absolutely and incontrovertibly. I regard it as a national misfortune that power has been in the hands of hon. and right hon. Gentlemen opposite during the last seven or eight years. Instead of a reversion to expenditure on a peace footing, as was the case after the Crimean War, but we have practically a crystallisation of the war expenditure imposed for ever in a time of peace. The right hon. Gentleman the Chancellor of the Exchequer has spoken of a reduction being possible on the Army Expenditure. I do not know whether he is going to take over the control of the War Office or is going to induce his right hon. friend the Secretary of State for War to abandon his scheme of Army Corps. But unless he gets rid of the policy of the War Office his speech consisted of so many meaningless words that cannot be realised. I associate myself with the hon. Member for Kings Lynn in his allegation that this surplus which is being distributed is a fictitious surplus. During the last few years the late Chancellor of the Exchequer has adopted the policy of taking an immense margin of money above his actual necessities, and most of this money has disappeared in a mysterious way, while the position of the year following has been made to look better. I cannot see how, on the figures, the right hon. Gentleman can make ends meet next year. This fact remains, that there has been an increase in the expenditure of the country of between£40,000,000 and£50,000,000 a year, without any real prospect of reduction. Unless a bold policy of retrenchment is really entered

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  upon, it will be well nigh impossible to make any further reduction then in taxation.
  MR. J. WILSON: I think there will be but one opinion—that the right hon. Gentleman the Chancellor of the Exchequer has performed his task in a thoroughly able and businesslike manner. This was what we might have expected from a man of his training. Last year when the Budget was presented a great war was raging and expenditure was going on apace. Unfortunately, owing to the demands made in South Africa and elsewhere, that expenditure has still to a very great extent to be calculated for. We expected after the visit of the Colonial Minister to South Africa, which was made in such a brilliant way, that a large amount towards that expenditure would be secured from the Transvaal. Some of us have said during the past four years that the Transvaal ought to pay a much larger amount than she wishes now to contribute. Before the war the mining magnates said that if British rule could be substituted for Boer Government the advantages it would bring would be worth over£100,000,000 sterling. I am sorry that the Colonial Minister has not been able to secure that£100,000,000, for I am still of opinion that in spite of the difficulties in regard to native labour the Transvaal is quite able to pay that amonnt. I must congratulate the Chancellor of the Exchequer on his abolition of the Corn Tax. I voted for that tax when the war was raging, but when the war was over I opposed it and urged its discontinuance, and voted against it, and I congratulate the right hon. Gentleman on his courage in having retraced the step taken in putting a duty on the bread of the people. Although it was a mistake in putting it on I am sure the remission of this taxation will secure the confidence of the people. I am also glad to congratulate the right hon. Gentleman on the Income Tax reduction. I agree that a large proportion has been taken off the Income Tax as compared with the amount taken off indirect taxation, but the precedent of the Crimean War ought not to be
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  forgotten. When that war was ended the Income Tax was reduced from 1s. 4d. to 7d. in the£,and I think the Chancellor of the Exchequer has therefore a very good precedent, and has to a great extent met the expectations of his supporters.
  I am, however, a little disappointed that we have had no statement in regard to the Coal Tax. The right hon. Gentleman might have reduced the Income Tax by 3d., and taken Id. off the Coal Tax. I urge this because I consider the Coal Tax economically unjust and oppressive to the industries of the country. I know that the right hon. Gentleman, in reply to a deputation which asked him to abolish the Coal Tax, urged that they could not expect a remission of the Coal Duty considering the amount of coal which was exported. But there are very good reasons why the volume of coal exports has not fallen off. It is perfectly well known that in America there have been enormous disturbances of labour; and during the first three months of this year no less than 976,000 tons of coal have been exported from this country to the United States, and that is really after all the total expansion that has taken place in the coal trade in this country. But the coal trade is one which has always expanded. Since 1850, when the total exports were only 3,000,000 tons, these had expanded to 43,000,000 tons; and if there had been no reason for the inflation I have mentioned there would still have been expansion in the coal exports. The price of coal has fallen, the wages of miners have fallen, and, more than all, freights of coal have fallen. Had the shippers of this country, when the Coal Tax was put on, been fully alive to their own interests, I am perfectly certain that they would have prevented the imposition of the Coal Tax. There was at that time, however, a natural feeling that the enormous profits which were made by the coal owners should be taxed. It was, however, forgotten that these were not ordinary profits but arose from an undue expansion of the trade. Owing to the low price of the article and the low freights foreigners now get coal cheaper than before the imposition of the tax. If we are to have no redress

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  in the way of reduction of the tax, the Chancellor of the Exchequer, as a Scotsman and a good business man, ought to apply the tax on an ad valorem scale. Why should Scotch coal, which is only 7s. or 8s. per ton be taxed at the same rate as Welsh coal, which brought 13s. or 14s. per ton. The late Chancellor of the Exchequer admitted the principle so far, for he gave a remission on small coal under 6s. a ton, and what is to prevent the present Chancellor of the Exchequer from giving an additional concession. Taken as a whole I maintain that a coal export duty is economically unjust and oppressive. There is no indication of any scarcity of coal in the near future, and I believe that the Royal Commission that is at the present time making inquiry into the subject, will be able to show that there is at least ten times more coal yet to be worked than has been worked up to the present time, and that the supply will last for hundreds of years. I ask the right hon. Gentleman to take my suggestion into his most earnest consideration and if he cannot take off the whole tax he should make it an ad valorem duty. I am in the hope however, that if he has such a surplus next year as this, he will take off the whole tax.
  MR. TOULMIN: There is one item in the Budget which will give satisfaction to the working classes of Lancashire, and that is the remission of the Corn Tax, against which they expressed very strong opinions a year ago. One cannot help having a certain amount of sympathy with the right hon. Gentleman the Member for Sleaford in the step the Government have taken, and in seeing the last hope of a policy he has long advocated disappear. I think, however, he will find that the Government have had good reason for the action they have taken. The right hon. Gentleman quoted the late Chancellor of the Exchequer as saying that the Corn Tax was the least injurious tax he could discover. I will not argue with the right hon. Gentleman the Member for Sleaford as to injury to the consumer; but whether the consumer has been injured or not, I think it has been discovered that the corn tax has inflicted an injury in one quarter, and
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  that quarter is the Government. Therefore, the Government have very good reason for dropping a tax which they have discovered to be rather unfortunate. The Chancellor of the Exchequer himself appears to be conscious of that injury, because he said that the tax lent itself to misrepresentation. That is rather a singular statement to make. Are all the acts of the Government which lend themselves to misrepresentation to be disavowed; and is the Government to be influenced by a misrepresentation and change its policy? because that policy has been misrepresented? I am not quite sure that one cannot turn the accusation the other way round, and ask whose were the misrepresentations? Were they those who said that the tax would not hurt anyone, and would be paid by American railway shareholders? If that were true, is not the Chancellor of the Exchequer giving£2,500,000 away to the corn growers in the United States and Russia? But, I take the Chancellor of the Exchequer's own ground. I say that the country rejected the tax because, as the right hon. Gentleman himself says, corn is more a necessity of life than any other commodity, because it is raw material, and because it is the food of the people, and of the horses and cattle which serve the people. I would wish to be allowed to congratulate the Government in retracing what I sincerely believe to have been a wrong step in fiscal policy, all the more as they have put it out of the power of any future Chancellor of the Exchequer to initiate a preferential tariff on colonial corn. The Government have, I think, more steps to retrace. The Chancellor of the Exchequer says that he has no sympathy with the cry for a free breakfast table. That has been shown by his disposal of his surplus, which gives£10,500,000 to Income Tax and only£2,500,000 to indirect taxation. The right hon. Gentleman appealed to Cobden, on the Navy. I wish the right hon. Gentleman had as much belief and trust in Cobden as a man who understood the conditions of the people and the way in which taxation ought to be laid upon them, as he had in Cobden's opinion as to the necessity for a strong Navy. In 1859 the taxes on

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  commodities in England were£1 11s. 7d. per head. That was the time when Cobden and Bright concentrated the attention of financial reformers on a free breakfast table. In 1901 the taxes on commodities were again£1 l1s. 6d., after having been reduced by successive Governments. For forty years the free breakfast table has been the object of the Liberal Party. Every step taken in that direction by the Liberals was imitated by Tory Chancellors of the Exchequer; and even the present Chancellor of the Exchequer will admit that Sir Stafford Northcote and Lord Goschen were statesmen in abolishing the last remnant of the duty on sugar, in reducing the tea duty, and in abolishing the duty on currants.
  It apppears to me that the policy of the Government with reference to the incidence of taxation indicated by this Budget shows that the Government have taken advantage of the war to reverse what has been the settled policy of this country for nearly half a century—a policy founded on equity and justice by proportioning the burden to the power to pay. The basis which existed before the war is altered It is a basis which existed after a Conservative Government had been in power for four years, and which was not discovered to be unjust. The Chancellor of the Exchequer gave the contribution from Income Tax payers to the increased revenue occasioned by the war at£39,800,000, and the contribution from indirect taxation at£31,932,000. What remission is now promised? Taking a period of three years the Income Tax will be reduced by£31,500,000, and indirect taxation will be decreased by£7,500,000. I think the true position will be best seen if we reverse the process by which the taxes were put on. The taxes were put on in layers, year after year, and let us revert to the position which obtained before the last penny was put on the Income Tax and the Corn Duty was put on. Suppose the war had been over earlier, the Chancellor of the Exchequer would not have thought of putting an additional penny on the Income Tax last year, or putting on the Corn Duty. If we take the Corn Duty off, and the last penny on the Income Tax off, we then find the
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  Chancellor of the Exchequer has reduced the Income Tax by 3d. without giving any corresponding reduction to indirect taxation. In 1900–01 tea, beer, spirits, and tobacco were taxed additionally to the amount of£5,600,000; the Income Tax was raised to 1s., producing an additional£8,000,000. In the next year sugar and coal were taxed and produced£8,000,000; and the Income Tax with an addition of two pence also produced£8,000,000, with the surplus from the previous addition. Step by step the Income Tax and indirect taxations have been increased, but now when we come to a remission of taxation, if we take off one year's layer, the Income Tax alone receives remission. I think there is a strong claim that the reduction of taxation ought to have been carried out in the same proportion as taxation was put on. It has been claimed that men with 30s. a week should not pay in the same proportion as men with£30 or£300 a week. I agree with that; but there is also a strong claim that there should beat least a minimum which the very poorest householder should have untaxed. There should be an untaxed minimum. Many labourers do not get anything like 30s. a week, and there are many households which have no able-bodied men, and taxation bears upon them with undue severity. Nearly a fourth of the workers of this country receive such scanty wages that they cannot purchase sufficient food and clothing to make them efficient; and taxation tends to further reduce expenditure on food, and, therefore, further reduce their efficiency. Those whose incomes are so small that they cannot buy enough of the necessaries of life ought to be entirely exempt from taxation. With regard to the National Debt, I do not think that the measures which the Chancellor of the Exchequer has taken for its reduction are by any means heroic. The Sinking Fund was fixed at£23,000,000, because it was foreseen that this year there would be a reduction.
  MR. RITCHIE: Certainly not. I deny that.
  MR. TOULMIN: That was What was understood at the time. It appears tome that it would be more to the advan-

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  tage of the country if we had a Sinking Fund for the debt incurred by the war, leaving the £23,000,000 alone. I should like to ask the Chancellor of the Exchequer on what basis he fixes the amount for the reduction of the debt. Is the proportionate wealth of the country taken as a basis? In that case we are better able to pay £28,000,000 now than during the years in which the nation did pay £28,000,000. Again, is the basis our responsibility? Our responsibility in the amount of territory and the millions of subject races that have come under our sway indicates that we may well think it necessary to give more attention to paying off the National Debt. The deplorable incident which was announced this afternoon shows the vanity of prophesying that the National Debt will be paid off in forty, fifty or sixty years; and the war has shown how easily the savings of thirty years may be dissipated in three unfortunate years.
  MR. LEES KNOWLES: As a Lancashire man, following a Lancashire man, I congratulate my right hon. friend on the repeal of the tax on corn, and also on the large reduction in the Income Tax. I recognise that that reduction will mean in populous districts still further employment. It seems to me that the point of the speech of my right hon. friend the Member for the Sleaford Division was a question as between the producer and the consumer. My right hon. friend, no doubt, speaks for an agricultural district, where corn is produced; I speak as one of the representatives of Lancashire, where corn is consumed. When my right hon. friend referred to the speech of the ex-Chancellor of the Exchequer in proposing the Corn Tax, he forgot altogether that the proposal was made without consultation with members of his Party; and although many of us voted for the tax in order to keep the Government in power, we did not, approve of it. Two or three days later, after it was proposed but before it was agreed to, I spoke in my own constituency, and said that the country had returned the Government by a huge majority in order to prosecute the war; and that I looked on this tax as a tax
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  in connection with exceptional expenditure to pay for the war. Now the war is over, and I came here to-day prepared, if the tax was not removed, to urge on my right hon. friend to remove it as soon as possible; because in Lancashire we hold the traditions of Cobden and Bright. I represent one of the divisions of Salford with a population of 230,000; and I cannot forget the history of my county, or the incidents of Peterloo. Therefore, I was naturally opposed to this tax; and I am only too delighted that the Chancellor of the Exchequer has seen his way to remove it. It was said when it was imposed that it would not inflict any great burden on the people, and my right hon. friend the Member for the Sleaford Division said to-night that since the tax was imposed the price of corn was less and the cost of bread had fallen. Why? Because the tax was imposed when the market was falling. The same thing was said with regard to the Coal Tax. But, although the price of corn and the price of bread may be lees now, it might be said that if the tax were not imposed, the price of corn and of bread would be still less. It is also said that the removal of the tax will, at all events, remove misrepresentation. The hon. Gentleman who has just spoken succeeded in winning Bury for the Opposition upon this tax. We know how that was done; we know what was done by the Co-operative societies; we know how the price of bread in Bury I was raised; and how the hon. Gentleman won the seat. But, as I have said, I have always opposed this tax.
  AN HON. MEMBER: You voted for it.
  MR. LEES KNOWLES: Oh, yes; I voted for it because I was not going to turn out a Government which had been returned to prosecute the war; but I explained my views at the time, and said I had always opposed a tax on the food of the people. This tax on corn goes even farther, because not only corn but also offal and starch products are taxed, which has a very important bearing on many industries in Lancashire. I have received a letter from a firm in my constituency referring to a deputation from the Calico Printers Association

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  which waited on the Chancellor of the Exchequer to point out the difficulties arising in connection with the drawbacks on exports. The firm in question are both calico printers and dyers, and they assert that especially as dyers and finishers they are very hard hit. They say—
  "We are both calico-printers and dyers, and we can safely say that calico-printers are not nearly so hard hit as dyers and finishers in this matter, a great proportion of mineral matter being used in the bulk of their finishes. Our dyeing and finishing department shows that for a similar turnover in the finished article the consumption of dutiable material is more than doubled, and in some finishes it would be much more than this, as our finishes to a great extent are soft finishes, that is, they are not heavily filled with size. It has cost our firm during the past year in direct duty alone an amount equal to twice the Income Tax, so that we are in reality paying triple Income Tax, compared with other trades… Had the tax been accompanied by taxation on the foreign manufacturer and finished work from abroad, it would probably have been to a large extent counterbalanced."
  This shows that the tax on corn is not merely a tax on the poor man who buys his bread, but that it is also a tax on the manufacturer and those whom he employs. Of course the right hon. Gentleman the Member for Sleaford thought a new policy was inaugurated last year and, like the hon. Member for Sheffield, approved the new form of taxation.
  MR. J. FITZALAN HOPE: On the contrary, I said the Corn Tax was prejudicial to the policy I advocated.
  MR. LEES KNOWLES: It was the hon. Member for the Central Division to whom I referred; I had for the moment forgotten that there was any other Member for Sheffield.
  MR. BATTY LANGLEY: I may remind the hon. Gentleman that there are other Members for Sheffield who did not approve of the duty. I for one did not.
  MR. LEES KNOWLES: I am glad to find I get some support from Sheffield. My point is this. The tax was contrary to the policy of Free Trade and it was a tax on the food of the people. I therefore congratulate the Chancellor of the
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  Exchequer on having removed it and thus on having got rid of a source of much misrepresentation.
  MR. ROBSON: When the Corn Tax was introduced it was announced as a small burden, and I presume we must infer that its remission is a small boon. It is clear, however, that the remission of the tax is a great relief to the conscience of hon. Gentlemen opposite. The hon. Member who has just spoken has endeavoured to explain that he has acted consistently throughout in regard to this matter. True, he admits he voted for the tax, but he says he was aware that in doing so he was doing a wrong thing, and throughout he has, he says, maintained unaltered his profound conviction that the tax was not a good one.
  MR. LEES KNOWLES: I explained to the House at the time that I voted for it, merely as an exceptional war tax.
  MR. ROBSON: The hon. Member has forgotten that when the tax was imposed the war was over.
  Mr. LEES KNOWLES: No, but, whether the war was over or not over, you have to pay your debts when you have incurred them.
  MR. ROBSON: When the tax was introduced we alleged that it was a war tax, but the then Chancellor of the Exchequer was particularly careful to refrain from calling it a war tax, and he introduced it and defended it as a permanent tax. The hon. Member's admirable consistency did not stop there. He made some no doubt sincere, but almost pathetic, references to Cobden and other Lancashire men, and then went on to defend the Coal Export Duty. I am not surprised at the hon. Member's defence of that duty. When that duty was introduced we opposed it, and pointed out that it would fall with unequal incidence on different classes-and different districts. Welsh coal held a totally different position to the coal exported from our north-eastern ports. It was coal exported from the northeastern ports to the ports in the north-east of Europe, there coming

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  into competition with German coal, that was bound to feel the duty most heavily. What has actually happened with regard to that coal? The Chancellor of the Exchequer has claimed that the duty has not diminished exports. Of course, the right hon. Gentleman means exports generally. But exports from districts affected by foreign competition have diminished. Exports from north-eastern ports have largely diminished, and in the neutral market to which the coal from those districts is sent, German trade has increased 20 per cent. Thus we have made a deliberate transfer of the trade to the German coal owners. I wish to look at the Budget from the point of view of general policy. The remission of Income Tax will amount in due time to something like £10,000,000, and from the taxation on food and trade something like £2,000,000 will be removed. My hon. friend the Member for Northampton said the war has been used as a means of transferring burdens from the rich to the poor. That is actually true. The Chancellor of the Exchequer says that £18,000,000 has been put on in the form of direct taxation and £15,000,000 in the form of indirect taxation. The right hon. Gentleman is now remitting £10,000,000 of the former and £2,000,000 of the latter, so that £13,000,000 out of the £15,000,000 on food and trade will remain, and only £8,000,000 out of the £18,000,000 on income. In addition to this we have to take into consideration the doles given to particular classes. You must not look at one Budget by itself. You must look at the general trend of fiscal policy, and consequently you must, in considering this matter, bear in mind the relief given to supporters of voluntary schools under the Education Act. The war has been made the occasion not merely for increasing the burdens of all classes, but for relieving certain propertied classes at the expense of the general trade and industry of the country. Thus the Government have not merely increased expenditure, but have transferred burdens from the richest to the poorest.
  Let me invite hon. Members to consider how taxation falls on different classes of the community. Every tax falls sooner
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  or later in an industrial community upon all classes, but it does not fall on every class with equal weight. Speaking generally, taxes upon food and trade fall on the industrial and labouring classes—that is to say, the principal weight, as measured by sacrifice, falls upon them. With regard to Income Tax, the principal weight or sacrifice falls upon the trading and professional classes; it falls with much greater effect upon them than upon the propertied class. The man who derives his income from property has an income of which he may spend a far larger proportion than would be legitimate in a man who derived his income from his profession or trade. The man who pays upon the whole of his trading income is paying practically upon that which he ought to regard as part of his capital, because it has to be laid to reserve, but the man who pays upon property is not doing anything of the kind. This Government have levied their taxation in the form of indirect taxes upon the industrial and trading classes, and their direct taxation in a form which falls most upon the trading and professional classes. The propertied class, which ought to have borne some special share of this additional burden, so far from having been specifically burdened, has been specifically relieved, and I say that we should do wrong if we allowed this financial debate to proceed without keeping that fact well in mind. These measures for relieving property are apparently by no means ended. Before next week is over we shall be discussing another great grant, also to a particular class, and also without reference to the fact, now becoming very serious indeed in our administration, that all these grants have to be borne in large part by the necessities of the poor. I should have been very glad if the Chancellor of the Exchequer had made the remission of the Corn Tax an indication of a change of policy, but I listened with some forebodings to what he said on that point. He dealt with tea and sugar. What did he say about tea? He said it was not a necessary of life; it was not a raw material. I hope the Committee will not regard that as a sound proposition in either finance or economics. Tea is an article of food,

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  and whatever is an article of food is a raw material of labour.
  MR. RITCHIE: When I was addressing the Committee on these taxes every observation I made upon the one was relative to the other. The question was which of the taxes I should take.
  MR. ROBSON: The right hon. Gentleman is perfectly accurate; that is what he was doing, and I am taking the reasons that he gave. He went on to say that people sometimes took too much tea. I could not help reflecting on what his predecessor had said in regard to bread. Bread, he said, was very often wasted. Apparently tea is a new form of excess. Conservative Chancellors of the Exchequer are very fond of posing, not as persons who burden the poor—far be such a thing from their intention or their policy—but as philanthropic persons who desire to restrain the prodigality of the poor. Too much tea is drunk; so much bread is wasted!
  MR. LEES KNOWLES.The crumbs fell from the rich man's table.
  MR. ROBSON: Yes, and I suppose that soon they will be all that the poor will have to eat. Taking what the right hon. Gentleman said as indications of policy, I was much struck by his choice of comparisons. Every Budget I have heard has been fertile in comparisons of different epochs. The right hon. Gentleman has dealt much in comparisons both here and outside. He tells the working classes of the country that they must not complain, because they do not bear as great a percentage of the total taxation as in 1856 and 1858. Again he tells us to-day that we must not complain, because the amount of taxation per head at the end of a war with 50,000 farmers is not so great as at the end of a war in which England stood against organised Europe under one of the greatest military geniuses of the world, when at the end of year After year of heroic and magnificent sacrifice, England had reached almost her last sovereign. The Chancellor of the Exchequer chooses that period as one suitable for comparison with to-day!
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  The standard of comfort for the industrial classes is apparently to be drawn from 1858, and the right hon. Gentleman's standard of the burden for the community at large is to be that which existed in England at the end of the Napoleonic war.
  MR. RITCHIE: It is an entire misrepresentation.
  Mr. ROBSON: The right hon. Gentleman says it is a misrepresentation. That would be a very serious word to come from his own lips had he not used it once before this evening. He said he had been guilty of misrepresentation with regard to the corn tax. The word "misrepresentation" is, I believe, a parliamentary expression, but it is an extremely disagreeable one, and might not inappropriately be termed an offensive one.
  MR. RITCHIE: The hon. Member must not misrepresent what I said. I did not say that he or any other hon. Gentleman had misrepresented the Corn Tax, but I said it was a tax capable of being misrepresented.
  MR. ROBSON: Now is the right hon. Gentleman fairly representing the meaning he intended to convey to the Committee? I will not use the word "misrepresentation." We do not judge of inuendoes and insinuations of that kind by what the mere words technically purport to convey; we look at their substance and sense. What on earth did the right hon. Gentleman mean when he said that this was a tax which lent itself to misrepresentation if there has been no misrepresentation about it? We know perfectly well that allegations and assertions may be made by inuendo just as well, and perhaps more conveniently, than in any other form. I would like to ask where has the misrepresentation been with regard to the Corn Tax? What did we on this side contend, only too frequently amid laughter and interruptions? We contended that the Corn Tax fell as a burden on the English consumer. Does anybody now deny it? ("Yes.") There are some who do. Then they apparently, do not follow the Prime Minister, If we

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  may judge from the attitude of the Prime Minister to-night he desires to deny it, because he interrupted my hon. friend the Member for West Monmouthshire when he described him as having said it did not fall on the consumer. The Prime Minister did not like the reference, and said, "Where is it? Produce your Hansard." I have taken the trouble to look up Hansard, and what the right hon. Gentleman said when the tax was being debated was that "its effect on the working classes would probably be nothing." When we said it would be something we were charged with misrepresentation. I think our "misrepresentations" have proved to be correct, otherwise, why have you taken off the tax? What is meant by this extraordinary policy at a time when the Exchequer is being depleted by so many demands, when our expenditure is rising as the income used to rise—by leaps and bounds? What is meant by making this magnificent remission to the foreign producer? What have American railways done for us that we should give them £2,000,000 per annum? These are the assertions which, like curses, are coming home to roost. One is entitled to reflect upon the way in which the House and the country have been treated over this tax by those who defended it. It has not been fairly and sincerely defended. The arguments which have been used in its favour have savoured of petty and contemptible dialectic.
  The right hon. Gentleman made another reference in telling us why he took off the tax which struck me as ominous. He said, "There is no elasticity about it." That is a phrase to reflect upon. It meant, of course, that he dare not increase the tax. The people make a great deal of noise about their bread; but their is plenty of elasticity about tea and sugar. We are to assume, I suppose, that the taxes on the food and trade of the people which are retained have the virtue of elasticity, and I think I can predict where the elasticity will be required. The right hon. Gentleman has taken 4d. off the Income Tax. That is equal to £10,000,000 or over, but this year the remission will mean a loss to the Exchequer of only £8,000,000. Next year the full effect of £10,000,000
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  will be felt. But the right hon. Gentleman has already given away, by remitting the Corn Tax, the £2,000,000 which he saves by the Income Tax remission not having its full effect this year. Where is the right hon. Gentleman going to find the extra £2,000,000 next year? Is he going to reduce expenditure? We have had that hope too long. If even the cessation of a great war does not produce a diminution of expenditure, we must not look forward to any reduction next year. He will look for the additional money required in those taxes which have the virtue of elasticity. He is not going to put the burden on property.
  MR. RITCHIE: I am sorry to interrupt the hon. Gentleman, but I distinctly stated how I should meet it. I said there was a non-recurring charge on the Army Estimates, which would considerably more than meet the deficit.
  MR. ROBSON: May I ask the right hon. Gentleman to mention that nonrecurring charge?
  MR. RITCHIE: Certainly. A portion of it is £2,000,000 placed on the Army Estimates for the purpose of meeting the extra demands for compensation which legitimately arose this year.
  Mr. ROBSON: That is a compensation in connection with the war, and is a war and not a peace expenditure. I thought the right hon. Gentleman was dealing with peace expenditure. However, if he says it is a non-recurring war expenditure, we are all very glad to hear it. But I am still rather disposed to doubt whether we shall ever see that £2,000,000 so saved. ["Why?"] Hon. Gentlemen wonder why. I remember—perhaps they have forgotten—that not long ago we discovered an expedition, of which nobody on the Front Bench knew anything, had started into the centre of Africa—an expedition which seems to have had somewhat unhappy results, one which might well have been more carefully considered, and for which more elaborate preparations might very properly have been made. Is that going to be a non-recurring expenditure, or is it, with this Ministry which never knows

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  when a war is going to take place, to be a continually recurring expenditure t They did not know of the Jameson Raid. They did not know what Sir John Ardagh had put into his report about the intention of the Orange Free State, although that report was lying undusted on the shelves of their offices. This is the sort of expenditure which, with such Ministers, we shall have continually recurring. We may anticipate a great deal more expenditure in the same form, and whenever additional money has to be raised we know where it is to come from. It is not to come from a tax on property; it is not to come from the burden laid on incomes—which, indeed, is already sufficiently high; it is to come from taxation on the food of the people. That is the traditional and historic policy of the Party opposite. The moment the finance of the country gets into a position of difficulty, and they find themselves embarrassed, they revert to that policy as an instinctive policy.
  MAJOR RASCH: I have not been able clearly to follow the argument of the hon. Member for West Salford, who congratulated the Chancellor of the Exchequer on the abolition of the registration duty on corn. He said that we who represented agricultural districts would probably not agree with him because we grew corn while they in Lancashire consumed it. I should like to ask what he supposes we consume in Essex? Does he think we eat manna? We eat bread if we are lucky enough to get it; therefore we are in the same boat as the people of Lancashire. I regret the Government has seen fit to abolish the registration duty. I am not a protectionist, nor are my constituents, and this is not a protectionist tax. A protectionist tax is one which protects, one which encourages home industries and discourages imports, and this registration duty has done neither. As a matter of fact, it has done us rather more harm than good in the agricultural districts in the matter of offals. But I am not disposed to make mountains out of molehills, or to say that this is a momentous or important matter. I regret the abolition because I think the imposition of the duty showed that the Government had a pious opinion with reference to the
  336
  distress in the agricultural districts, but although I regret it I shall go down to my constituents on the Corn Exchange at Chelmsford to-morrow, and meet them without the slightest diffidence, because I know they are sensible men who recognises the difference between shadow and substance, who have an acute recollection of the condition of agriculture when the right hon. Gentleman opposite was in office ten years ago, and who are not likely to kill King Charles in order to make James king.
  MR. KEARLEY: Many hon. Members to-night have pointed to the urgency for a reduction of expenditure, but they have seemed to hold the opinion that the only hope for reduction was in the Army Estimates. I hold the view that there is much to be done in the way of reducing expenditure in connection with our administrative Departments. To all our great administrative Departments there is what I may call a commercial side; they have frequently large amounts of commodities to buy, and in the administration of those Departments there is much money that might be saved. Let us take an illustration which has come under the notice of the Committee during the present session, showing how the heads of Departments conduct the commercial side of their offices. About a month ago we had under discussion a supplementary Estimate, containing a large additional sum to be spent on the maintenance of two steam launches. It is a small illustration, but it wilt suffice. The President of the Board of Trade could give the House no explanation; he knew nothing whatever about this extraordinary additional expenditure, and asked to be allowed to make an explanation on Report. That is a weak feature in the administration of Ministers; they generally know nothing about the items of expenditure which are brought under discussion, and take refuge in the Report stage. What was the explanation on this occasion? Here was a steam launch which was bought second-hand in 1874 for £590, and since that time had had spent on it by the Board of Trade no less than £2,900. Take another case. If hon. Members wish to know where the money goes

  337
  I advise them to study the Navy Appropriation Accounts of this year. What do we find there? We find that there are thousands and tens of thousands of pounds expended upon repairing vessels that ultimately have been decided to be useless, and the money spent upon them has been literally pitched into the sea. Any hon. Member who wishes to study this matter should peruse the Navy Appropriation Accounts, and then he will see for himself the great waste that is going on. Let me give another case. I felt it my duty to study the waste in the victualling of the Navy. If this Department were efficiently managed, the head of the Department ought to have discovered that the Government were carrying on the manufacture of Navy biscuits at a cost which was 41 per cent. greater than they could buy them in the open market. These are items which ought to be considered carefully by those hon. Gentlemen who are the responsible heads of this particular Department. I am perfectly certain that we shall never get a real diminution until every item of expenditure is watched as carefully as possible, and in that way alone shall we be able to reduce our expenditure.
  We have been reminded quite recently by two right hon. Gentlemen, one who is still a Member of the Government, and one who recently was in the Government, that to hold a position in the Tory Administration of this country, one must have certain social distinctions. This was pointed out by the right hon. Gentleman the Member for Preston and the Member for Bordesley, who said that to possess the aptitude of business was considered to be rather a vulgar accomplishment than otherwise by the Government. Until the Government get rid of this idea we shall never get the finances of this country upon a proper footing. I called attention to this matter last year, and I make no apology for alluding to it this year, because I believe that the more it is ventilated and discussed, the more it will be recognised by the House as a line upon which we might pursue our policy of efficiency and a reduction of expenditure. I do not propose to go into any further details to-night on the Budget because we shall have plenty of
  338
  opportunities later on, but I raise these points because I think they require forcing upon the attention of the House. It is because most of the speakers have indicated that it is solely in the direction of the Army that economy can be effected that I have felt it my duty to point out another direction in which I think much can be done in the way of economical and efficient management.
  MR. RITCHIE: The hon. Member who has just sat down has truly said that there would be many opportunities for discussing the various points which have been raised to-night and the criticisms which have been passed upon the Budget; and, therefore, I hope the Committee will consent to bring this discussion to a close and let the Government have the Resolutions, which will, of course, have to be embodied in the Finance Bill. Then there will be ample opportunity for discussing the whole question as regards principle and details.
  MR. LOUGH: Do you want more than one Resolution?
  MR. RITCHIE: Yes. The hon. Member will observe that there is no Resolution of a contentious character; they will all be included in the Finance Bill. It is not as if we proposed to impose any fresh taxation. We are not doing that. We are continuing existing taxation and remitting taxation, but we are not imposing taxation; and under the circumstances it is necessary to have all the Resolutions. I do not, of course, say that it is absolutely essential, but it is important for the carrying on of business. I want to point out that we shall have other opportunities of discussing all these matters of principle and detail, and I do not think that any hon. Member wants to have a general discussion on these various Resolutions, and I hope that the Committee will be content to have the discussion in the ordinary way both on the Second Reading of the Bill and in the Committee stage.
  MR. JOSEPH WALTON: Is this not the only opportunity we shall have for a general discussion?
  MR. RITCHIE: No. On the Second Reading the discussion can be full and complete, just as if we were discussing the whole of these Resolutions. I desire, however, Mr. Lowther, to say a few words with regard to the criticisms which have come from both sides of the House with regard to our Budget proposals. If there is one thing that I regret more than another in connection with the proposals which I have made, it is that, so far as the proposal as to the Corn Duty is concerned, it is unacceptable to my right hon. friend the Member for the Sleaford Division, whom I greatly regret to find in opposition to us on this point. I know how keenly he feels on this subject, and my regret, therefore, is all the greater. But, Sir, I am sure that his disappointment must have been somewhat mitigated by the reception which the proposal met with on the other side of the House. Our proposal for the remission of the Corn Duty, which, I confess, I anticipated would be acceptable to hon. Gentlemen opposite, has been received, not, perhaps, with a storm of disapproval, but, I will say, with a storm of adverse criticism. [Opposition cries of "No, no!" and "Misrepresentation."] I do not go merely by cheers. Anyone who has heard the discussion to-night cannot fail to have been struck by the extremely cold way in which the proposal was received on the other side. It is not the cheers I am talking I about, but the verbal criticisms; and I think those criticisms and that attitude may go some way towards mitigating the distress which my right hon. friend feels. My right hon. friend desired that the duty should remain on, and, from a protective policy point of view, I can understand that he strongly objects to it being taken off. The duty was advocated as a broadening of the basis of taxation. In a sense, of course, the Corn Tax was a broadening of taxation, but not in the ordinary sense of the term; for, as I understand the term, it means a tax capable of increase or decrease; and in that sense it is not a broadening of taxation, because I do not myself believe it would be possible to increase the tax, except on an occasion of very great emergency, and it goes without saying that it is not possible to decrease it. From that point of view, therefore, it is
  340
  not of very much value as broadening the basis of taxation. If that is so the whole thing amounts to this—we derive £2,500,000 from this particular tax, and if we retain it we must take that amount off something else—for my right hon. friend agrees that this amount of taxation should be taken off something; and he suggests tea. Even from his point of view, unless he regards it as a measure of protection, it is just as well to take it off the Corn Tax as off tea. If he knew of the variety of small matters that have to be considered in connection with the tax I am sure he would agree it is more desirable to take off this tax than to take 2d. off tea. It is on an article largely used for cattle feeding purposes, and it is a matter of complaint with farmers that the cost of feeding stuffs has increased with the imposition of the tax. My right hon. friend says it has not increased the price of bread; but that is an impossible thing to say. It is impossible for the reason that the price of corn and the price of flour, and therefore of bread, depends on a great many circumstances other than this particular tax. Therefore it is quite impossible, if there has been no actual rise, to say that the tax has had no effect on the price. Certainly I am quite sure my right hon. friend will agree with me that undoubtedly the price of flour has increased to the amount of the tax, and a good deal more; and, as a good many people make their own bread, the cost of the latter must have been increased.
  A good deal has been said about direct and indirect taxation; and most of the speakers from the other side have contended that we have taken a far larger amount of money off direct taxation than we ought to have done, and that remissions should have been more equally distributed between direct and indirect taxation. Now, as my hon. friend behind me has said, when the Crimean War came to an end 75 per cent. of the whole amount remitted was taken off direct taxation and 25 per cent. only was taken off indirect taxation; so that we are strictly in accordance with precedent. When the right hon. Gentleman the Member for West Monmouth talks of the enormous increase of the burdens we have placed on the shoulders

  341
  of indirect taxpayers, I venture to tell him that the proportion of direct to indirect taxation is more in favour of the indirect taxpayer than it was when he was Chancellor of the Exchequer, even after we have taken off this taxation.
  MR. BALFOUR: Hear, hear!
  MR. RITCHIE: He will find, if he examines the subject, that the proportion of indirect to direct taxation was then larger.
  SIR WILLIAM HARCOURT: I would remind the right hon. Gentleman of the Death Duties.
  MR. RITCHIE: It makes not the slightest difference; the result is the same. I contend that when the right hon. Gentleman says we are imposing a greater burden on the indirect taxpayers now than was imposed before, he is stating what is not correct. When he had charge of the nation's finances there was a larger proportion on the indirect taxpayer than we leave now.
  SIR WILLIAM HARCOURT: I proposed an arrangement which increased direct as compared with indirect taxation.
  MR. RITCHIE: That does not alter the facts of the case when the right hon. Gentleman left office. ["Oh, oh."] But I do not want to pin myself to his operations. Let him take any year previous to that and show me that the indirect taxpayer was more favourably considered than he is under our proposals. He cannot show any single year during the whole time Mr. Gladstone was in office that will compare to anything like the same extent in favour of the indirect taxpayer as that which we are now proposing. Let me also point out that when we are talking about taxation, we must remember that the local taxation account is also included; so that it is not only for Imperial purposes that this taxation is now levied, but very largely for local purposes. Therefore it may beargued that the indirect taxpayer ought fairly to be called upon to pay even a larger proportion than he is now asked to pay.
  342
  Of course, we shall have plenty of opportunities of discussing that matter in Committee. Let me also point out to the Committee, what I think has been pointed out by one or more speakers already, that, when we come to talk about indirect taxation, a large proportion of this indirect taxation is purely voluntary. It is true that a certain proportion of this indirect taxation is on the necessaries of life; but a very large proportion is taxation which people may pay or not as they choose; and I am glad to think that a large proportion of the working classes do not pay this indirect taxation at all, because they refrain to a large extent from the intoxicating beverages to which hon. Gentlemen have alluded. With regard to the Sinking Fund, it has been stated by the hon. Gentleman the Member for Monmouth Boroughs that the proposals I am making to the Committee to-day are a departure from the expressed intentions of my right hon. predecessor. He said—
  "You are taking a certain portion of the reduction of interest and giving it to the taxpayer. The right hon. gentleman who preceded me," the hon. Gentleman said, "stated distinctly in this House that he intended that this reduction of interest when it came about should not go to the taxpayer but should go to the Sinking Fund."
  I happen to have a paper which was presented by my right hon. friend to the House on April 30th, 1899, in which these words occur—
  "To the saving to be effected by the reduction of interest on Consols in 1903 the taxpayers of the day will no doubt have an unanswerable claim, but if on that account the fixed debt charge were reduced by, say, £1,500,000, the new Sinking Fund would still stand in 1905–6 at about £7,750,000."
  Consequently my right hon. friend reduced the fixed charge by £2,000,000, thereby reducing the Sinking Fund to £5,750,000, and having done that he says the taxpayer will, when this reduction of interest comes into play, have a full and good claim for remission of taxation. I do not press that, though I thought it right to allude to the fact in view of what the hon. Gentleman has said. But I base my position on the facts of the case as they stand. What are the facts of the case? In the present year immediately the Transvaal loan is floated, which I

  343
  hope will be within a very short time now, we are going to repay out of that loan £4,000,000 which we advanced to the Transvaal and which will be repaid as a first charge upon this loan. Therefore within the next month we shall receive £4,000,000, which will be employed in redeeming debt, and the money hitherto required to pay interest on that amount of debt, namely, about £20,000 will of course go to the Sinking Fund. In January next we are to receive £10,000,000 more money, not out of the guaranteed loan but out of the loan which has been underwritten by the Transvaal mine-owners; so that within twelve months we shall receive £14,000,000, and the interest upon that £14,000,000 will be £420,000, which will be added to the Sinking Fund part of the fixed debt charge, and by that time the amount of the fixed debt charge which is available for the extinction of the debt will be increased by nearly £500,000. In another year we shall get another £10,000,000, and the year after that we shall get a further £10,000,000; so that we are really going to put into the Sinking Fund a sum of about £1,000,000, since the debt which bears this amount of interest will be extinguished in three years. The £1,000,000 which will no longer be required for interest will remain part of the Fixed Debt Charge—that is, will be added to the Sinking Fund, so that by the time this £30,000,000 is paid we shall have a Sinking Fund of close on £9,000,000 sterling. I ask the Committee whether, under these circumstances, I should have been justified in asking the taxpayers to pay another £1,000,000 more now. The taxpayers are already heavily burdened; and I am satisfied that the Committee would have considered that I was placing a much greater burden on the existing taxpayers than I was in the least justified in doing, having regard to the circumstances I have now stated. Therefore I maintain not only that we have not actually diminished the Sinking Fund, but that we have made provision for largely increasing the Sinking Fund and bringing it up to an amount greater than it has ever been known to reach before. The right hon. Gentleman opposite gave us his usual exposition of what he considered to be the folly of our
  344
  expenditure upon armaments. This is not the time to discuss that question. The right hon. Gentleman and others have asked me to-night to explain whether we propose in any way to reduce the cost of these armaments next year. What a preposterous idea it is to propose that at this stage of the Budget I should enter into the details of the Navy and Army expenditure with a view to showing how much they are to be reduced next year.
  SIR H. CAMPBELL-BANNERMAN: When will you?
  MR. RITCHIE: When? Why, when the Estimates come on next year. That is the time to discuss the details of Estimates. The Budget is not the time to discuss the details of the Estimates. It is my duty of find the money for the Estimates which have been laid before the House and agreed to. I am very far from saying that it is not wise to criticise minutely this expenditure, and I am sure I should be as delighted as right hon. and hon. Gentlemen opposite to see it much less than it is. But it is absurd to ask me to enter into details of Army and Navy expenditure upon an occasion like this. My hon. friend the Member for Islington asked me about the Savings Banks. Well, I hope to introduce a Bill dealing with that subject; but I think it would be impossible now that it should come into operation until the beginning of the financial year of the Savings Banks. My hon. friend thinks that would entail considerable loss to the Exchequer, but I do not think this need necessarily be the case, for it may be possible to provide that whatever the loss may be should fall on the proposed Reserve Fund. But, if hon. Gentlemen think that because Consols are now so low we can afford to disregard the recommendations of the Savings Bank Committee, they are entirely mistaken. It matters not to us, so far as the Savings Banks are concerned, what the price of Consols is, except so far as new investments are concerned. I A sum of £100,000,000 of Savings Banks money is invested in Consols, and we cannot sell this out. We have to be content, therefore, with the rate of interest—2½ per cent.—at present obtainable; and we cannot afford to pay the present interest to Savings Banks

  345
  depositors without great loss to the general taxpayer. I Ho not think that the general taxpayer ought to be called upon to bear that loss; and therefore I hope that it will be possible to carry the Bill which I shall introduce. I hope, too, that we shall receive the assistance of my hon. friend in carrying it. He was a valuable Member of the Committee which inquired into the subject; and, when it is stated that the Committee mainly consisted of bankers, the Committee will believe that my hon. friend would be able to stand up against any number of bankers if he thought that the interests of the public were being prejudiced by them. I do not know that I have anything further to say. I am greatly obliged to the Committee for the kind way in which they have spoken of myself in connection with the Budget and for the consideration they have given to me, and I hope they will now agree to the necessary Resolutions.
  MR. LOUGH: I think it is not unreasonable that the matter should be brought to an issue now, and I desire to submit an Amendment to the Motion which will enable that to be done. I beg to move to reduce the Tea Duty from 6d. to 4d. Our case is, that there should have been a reduction in the Income Tax of 3d. and of 3d., only. That would have taken £6,500,000 and left £4,000,000 for the relief of indirect taxation, and this should have been applied to a reduction of the Tea Duty by 2d. and the abolition of the Corn Duty. Not one of the advocates for a reduction in the Income Tax asked for a greater reduction than 3d., and the statement of the Chancellor of the Exchequer that he proposed to reduce the Income Tax by 4d. came as a complete surprise. The right hon. Gentleman has thrown a most valuable light on the principle which guided him in this matter. He told us that he took the precedent of the Crimean War, at the end of which 75 per cent. was taken off direct taxation, and 25 per cent. only was taken off indirect taxation. The answer I make to that is, that many things have happened since the Crimean War. We have had the Reform Act of 1867 and the Act of 1885, and the class of the population on whom these indirect taxes fall are
  346
  now represented in Parliament, whereas in the years referred to they were unable to make their voices heard. In a speech a week ago the Chancellor of the Exchequer adumbrated this new policy of sticking to the indirect taxes that were imposed during the war, of maintaining them as a continual burden on the people and giving all the relief to the direct taxpayers.
  MR. RITCHIE: What I said was that this deputation came to me and asked me to so regulate the finances of the country as to give a free breakfast table. That was the proposal made tome and to which my observations were addressed.
  MR. LOUGH: Many of us would like to see a free breakfast table. We are not ashamed of the demand, or of the policy which embodies it; and, as the Chancellor of the Exchequer argued before this deputation, and before this Committee to-day, in favour of almost confining his relief to direct taxation, so we wish to argue in favour of the claims of the indirect taxpayer who we think is being cheated in this year's Budget. These taxes were imposed equally on direct and indirect taxpayers. The Chancellor of the Exchequer had tried to make out that the Coal Tax was not an indirect tax. That is not fair. Surely it cannot be denied that it is an indirect tax.
  MR. RITCHIE: Not on the consumer.
  MR. LOUGH: I am not on that point. It is only fair that I should be allowed to take one point at a time. We are speaking of direct and indirect taxation, as generally understood, and we say that it is merely playing with words to suggest that the Coal Tax is not an indirect tax. The Chancellor of the Exchequer, however, has left it out of the indirect taxes in order to make out his case that more money has been raised by direct taxation than by indirect taxation. We know the figures, and we say that there is scarcely any difference in the way the taxes were imposed. What we demand is that, inasmuch as you made both classes pay equally, so, when the remission comes,

  347
  You should give it to both classes equally. We contend that the proposal of the Chancellor of the Exchequer is a most unfair one on this broad ground, and also on one other ground that I will venture to mention. There was a plain road open before the right hon. Gentleman, but with many ingenious arguments he has taken the wrong road. I desire to submit one final argument in support of this proposal; it is with regard to the Tea Tax. Growers of tea put their case before the Chancellor of the Exchequer with great moderation. They stated that they had patiently borne the burden placed upon them and that, in the first year this additional tax was levied they paid half the tax out of their own pocket, and suffered a great loss inconsequence. The area of tea-growing being diminished, the consequence now is that there is a certain shortage of tea, and the increased price which has followed has had to be borne by the consumer. The Chancellor of the Exchequer said that the tea duty was a small duty,
  but it is a duty of at least 75 per cent. On the price of the raw material. The Chancellor of the Exchequer also said that tea was not a necessity; again I disagree with him. We think it would have been far better for the Government, and far more to the credit of this House, if the remission had been made in the same way as the taxes were imposed I beg to move to reduce the Tea Duty from 6d. to 4d.
  Amendment proposed—
  "To leave out the word 'six,' and insert the word 'Four'—(Mr. Lough.)
  Question put, "That the word 'Six' stand part of the Question."
  The Committee divided:—Ayes, 184; Noes, 76. (Division List, No. 68.)

  AYES.

  Agg-Gardner, James Tynte

  Craig, Charles Curtis (Antrim, S

  Gretton, John

  Agnew, Sir Andrew Noel

  Cranborne, Lord

  Groves, James Grimble

  Allhusen, Aug. Henry Eden

  Cross, H. Shepherd (Bolton)

  Guest, Hon. Ivor Churchill

  Anson Sir William Reynell

  Crossley, Sir Savile

  Hall, Edward Marshall

  Arkwright, John Stanhope

  Davenport, William Bromley

  Hamilton, Rt Hn Lord G. (Mid'x

  Atkinson Rt. Hon. John

  Denny, Colonel

  Hare, Thomas Leigh

  Bain, Colonel James Robert

  Dickson, Charles Scott

  Harris, Frederick Leverton

  Balfour, Rt. Hon. A. J. (Manch'r

  Digby, John K. D. Wingfield-

  Hay, Hon. Claude George

  Balfour, Rt. Hon. G. W.(Leeds

  Dimsdale, Rt. Hon. Sir Jos. C.

  Heath, James (Staffs., N. W.)

  Balfour, Kenneth R.(Christch.

  Dorington. Rt. Hon. Sir John E.

  Hermon-Hodge, Sir Robert T.

  Banbury, Sir Frederick George

  Doxford, Sir William Theodore

  Hickman, Sir Alfred

  Bignold, Arthur

  Duke, Henry Edward

  Hoare, Sir Samuel

  Bigwood, James

  Durning-Lawrence, Sir Edwin

  Hogg, Lindsay

  Bill, Charless

  Elliot, Hon. A. Ralph Douglas

  Hutton, John (Yorks, N. R.)

  Blundell, Colonel Henry

  Faber, Edmund B. (Hants, W.)

  Jameson, Major J. Eustace

  Bond Edward

  Faber, George Denison (York)

  Jebb, Sir Richard Claverhouse

  Boscawen, Arthur Griffith

  Fellowes, Hon. Ailwyn Edward

  Keswick, William

  Brodrick, Rt. Hon. St. John

  Fergusson, Rt. Hn Sir J. (Manc'r

  Knowles, Lees

  Butcher, John George

  Fielden, Edward Brocklehurst

  Lambton, Hon. Fredk. Wm.

  Carlile, William Walter

  Finch, Rt. Hon. George H.

  Law, Andrew Bonar (Glasgow

  Carson, Rt. Hon. Sir Edward H.

  Finlay, Sir Robert Bannatyne

  Lawrence, Wm. F. (Liverpool

  Cautley, Henry Strother

  Firbank, Sir Joseph Thomas

  Lawson, J. Grant (Yorks. N. B.)

  Cavendish, R. F. (N. Lancs.

  Fitzroy, Hon. Edward Algernon

  Lee, A. H. (Hants, Farenam)

  Cavendish, V C W (Derbysh.)

  Forster, Henry William

  Lees, Sir Elliott (Birkenhead)

  Cecil, Evelyn (Aston Manor)

  Foster, Philip S. Warwick. S. W.

  Legge, Col. Hon. Hensage

  Chamberlain, Rt. Hon. J (Birm

  Fyler, John Arthur

  Leveson-Gower, Frederick' N. S.

  Chamberlain, Rt Hn. J. A (Wore

  Gardner, Ernest

  Lockie, John

  Charrington, Spencer

  Garfit, William

  Lockwood, Lieut.-Col. A. R.

  Churchill, Winston Spencer

  Godson, Sir Augustus Fredk.

  Long Col, Charles W.(Evesham

  Clive, Captain Percy A.

  Gore, Hn G. R. C Ormsby-(Salop

  Long, Rt. Hn. Walter(Bristol, S.

  Cochrane, Hon. T. H. A. E.

  Gore, Hon. S. F. Ormsby-(Linc.)

  Londsdale, John Brownlee

  Coghill, Douglas Harry

  Gorst, Rt. Hon. Sir John Eldon

  Lucas, (Col. Francis (Lowestoft

  Collings, Rt. Hon. Jesse

  Greene, Sir E. W.(Bury St. Ed.

  Lucas, Reginald J. (Portsmouth

  Compton, Lord Alwyne

  Greene, Henry D. (Shrewsbury)

  Macdona, John Cumming

  Corbett, A. Cameron (Glasg.)

  Greene, W. Raymond (Cambs.)

  Maconochie, A. W.

  M'Arthur, Charles (Liverpool)

  Platt-Higgins, Frederick

  Stanley, Edward Jas. (Somerset

  M'Calmont, Colonel James

  Powell, Sir Francis Sharp

  Stirling-Maxwell, Sir John M.

  M'Iver, Sir Lewis (Edinburgh W

  Pretyman, Ernest George

  Strutt, Hon. Charles Hedley

  Majendie, James A. H.

  Purvis, Robert

  Talbot, Lord E. (Chichester)

  Malcolm, Ian

  Quilter, Sir Cuthbert

  Talbot, Rt Hn. J. G. (Ox'fd Univ.

  Manners, Lord Cecil

  Randles, John S.

  Thornton, Percy M.

  Maxwell, Rt Hn Sir H. E (Wigt'n

  Rankin, Sir James

  Tollemache, Henry James

  Maxwell, W. J. H. (Dumfriessh.

  Rasch, Major Frederic Carne

  Tomlinson, Sir Wm. Edw. M.

  Mildmay, Francis Bingham

  Reid, James (Greenock)

  Tritton, Charles Ernest

  Montagu, G. (Huntingdon)

  Remnant, James Farquharson

  Valentia, Viscount

  Montagu, Hon. J. Scott (Hants.)

  Renshaw, Sir Charles Bine

  Walrond, Rt. Hn. Sir William H

  More, Robt. Jaspe (Shropshire)

  Renwick, George

  Warde, Colonel C. E.

  Morgan, David J (Walthamstow

  Ridley, Hn. M. W. (Stalybridge)

  Webb, Col. William George

  Morrison, James Archibald

  Ritchie, Rt Hon. Chas. Thomson

  Williams, Colonel R. (Dorset)

  Morton, Arthur H. Aylmer

  Robertson, Herbert (Hackney)

  Willox, Sir John Archibald

  Mount, William Arthur

  Rollit, Sir Albert Kaye

  Wilson, A. Stanley (York, E. R.)

  Mowbray, Sir Robt. Gray C.

  Ropner, Colonel Sir Robert

  Wilson, J. W. (Worcestersh., N)

  Murray, Rt Hn A. Graham (Bute

  Rothschild, Hon. Lionel Walter

  Wodehouse, Rt. Hn. E. R. (Bath

  Newdegate, Francis A. N.

  Royds, Clement Molyneux

  Worsley-Taylor, Hry. Wilson

  Nicholson, William Graham

  Scott, Sir S. (Marylebone, W.)

  Wortley, Rt. Hon. C. B. Stuart

  O'Neill, Hon. Robert Torrens

  Seely, Charles Hilton (Lincoln)

  Wrightson, Sir Thomas

  Orr-Ewing, Charles Lindsay

  Seely, Maj. J. E. B.(Isle of Wight

  Wylie, Alexander

  Palmer, Walter (Salisbury)

  Sharpe, William Edward T.

  Wyndham, Rt. Hon. George

  Parkes, Ebenezer

  Skewes-Cox, Thomas

  Pease, H. Pike (Darlington)

  Smith, H. C (North'mb. Tyneside

  TELLERS FOR THE AYES—Sir Alexander Acland-Hood and Mr. Anstruther.

  Pemberton, John S. G.

  Smith, James Parker (Lanarks

  Percy, Earl

  Spear, John Ward

  Pierpoint, Robert

  Stanley, Hon. A. (Ormshirk)

  NOES.

  Allen, Charles P. (Glouc,. Stroud

  Hayne, Rt. Hon. Charles Seale

  Samuel, Herbert L. (Cleveland)

  Ashton, Thomas Gair

  Helme, Norval Watson

  Samuel, S. M. (Whitechapel)

  Barran, Rowland Hirst

  Hobhouse, C. E. H. (Bristl, E

  Schwann, Charles E.

  Bayley, Thomas (Derbyshire)

  Holland, Sir William Henry

  Shackleton, David James

  Beaumont, Wentworth C. B.

  Hutchinson, Dr. Charles Fredk,

  Shaw, Charles Edw. (Stafford)

  Bell, Richard

  Jones, William (Carnarvonsh.)

  Shaw, Thomas (Hawick, B.)

  Black, Alexander William

  Joyce, Michael

  Shipman, Dr. John G.

  Bolton, Thomas Dolling

  Kearley, Hudson E.

  Sinclair, John (Forfarshire)

  Brigg, John

  Langley, Batty

  Spencer, Rt Hn C. R., (Northants

  Brown, George M. (Edinburgh)

  Lawson Sir Wilfrid (Cornwall)

  Taylor, Theo. C. (Radcliffe)

  Caldwell, James

  Leese, Sir Joseph F. (Accrington

  Thomas, David Alfred (Merthyr

  Campbell-Bannerman, Sir H.

  Leng, Sir John

  Thomas, J. A. (Glam. Gower)

  Cawley, Frederick

  Lough, Thomas

  Thomson, F. W. (York, W. R.)

  Channing, Francis Allston

  Lundon, W.

  Tomkinson, James

  Craig, Robert Hunter (Lanark)

  M'Kenna, Reginald

  Toulmin, George

  Davies, Alfred (Carmarthen)

  Mitchell, Edw. (Fermanagh, N.

  Ure, Alexander

  Dilke, Rt. Hon. Sir Charles

  Norman, Henry

  Walton, Joseph (Barnsley)

  Duncan, J Hastings

  Partington, Oswald

  Weir, James Galloway

  Edwards, Frank

  Price, Robert John

  White, George (Norfolk)

  Emmott, Alfred

  Priestley, Arthur

  White, Luke (York, E. R.)

  Evans, Sir F. H. (Maidstone.)

  Rickett, J. Compton

  Whitley, J. H. (Halifax)

  Griffith, Ellis J.

  Rigg, Richard

  Wilson, F.W. (Norfolk, Mid)

  Gurdon, Sir W. Brampton

  Roberts, John Bryn (Eifion)

  Haldane, Rt. Hon. Richard B.

  Robson, William Snowdon

  TELLERS FOR THE NOES—Mr. Herbert Gladstone and Mr. Causton.

  Harcourt, Rt. Hon. Sir Wm.

  Rose, Charles Day

  Hardie, J. Keir (Merthyr Tyd

  Runciman, Walter

  Harmsworth, R. Leicester

  Russell, T. W.

  Original Question put, and agreed to.

  CONTINUANCE OF ADDITIONAL CUSTOMS DUTIES ON TOBACCO, BEER, AND SPIRITS.
  Motion made, and Question proposed, "That the additional Customs Duties on
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  tobacco, beer, and spirits imposed by-Sections two, three, four, and five of The Finance Act, 1900 (including any increased Duties imposed by Section five of that Act), shall continue to be charged until the first day of August, 1904."—(Mr. Chancellor of the Exchequer.)—
  Sir H. CAMPBELL-BANNERMANasked what were the intentions of the right hon. Gentleman with regard to the other Resolutions. There were other two which were obviously deserving of discussion—one referring to the Income Tax, and the other referring to the Sinking Fund. Although everything had been done with perfect regularity by suspending the Twelve O'clock Rule because there might be taxes to be imposed, and because it was necessary to safeguard the interest of the Exchequer, he thought it was not the usual practice at all to proceed the same night with any Resolution affecting a tax which was not of that character. The Committee had only heard to-night for the first time of the proposals with regard to these taxes, and he thought it was only due to them that they should have time to look into them cautiously and to consider what conclusion they would form upon them. Therefore he appealed to the right hon. Gentleman not to take the two Resolutions to which he referred.
  Mr. RITCHIEsaid he could not resist the suggestion made by the right hon. Gentleman, but at the same time he thought that, having regard to the fact that there would be opportunities for full discussion of the proposals on the Second Reading of the Finance Bill, he thought they might fairly expect to have these Resolutions to-night. They differed somewhat from the ordinary Resolutions to which the right hon. Gentleman referred; the Budget Resolutions as a rule were for imposing taxation, but none of these Resolutions imposed taxation Some of them proposed reductions in taxation. He was not prepared to contest the matter, and if the right hon. Gentleman pressed him not to take these two Resolutions he would consent to adopt that course.
  SIR WILLIAM HARCOURTsaid the usual course was for the Chancellor of the Exchequer in laying the Budget Resolutions before the House to give his explanation of them. Of course time ought to be allowed for the consideration of the Resolutions; they ought to be subjected to careful examination. When Resolutions on the Budget were passed the same night, it was for the purpose
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  of protecting the Exchequer. But when the Resolutions would not affect the interests of the Exchequer it was not necessary to proceed with them the same night.
  MR. LOUGHsaid that what was now proposed to be done was a new precedent which had only sprung up in the last year or two in the emergency of the war. He recollected quite well the time when only one Resolution was taken on the Budget. The Chancellor of the Exchequer had got that Resolution, and members of the Committee had been kept there for ten hours during which the right hon. Gentleman had done most of the talking himself. He hoped the right hon. Gentleman would not press the other Resolutions.
  MR. RITCHIEsaid he was very wishful to continue the discussion in the same amicable spirit in which it had been carried on, and as he did not wish to disturb the harmony of their proceedings he would agree to the request.
  Whereupon Motion made, and Question proposed, "That the Chairman do report Progress; and ask leave to sit again."—(Mr. Chancellor of the Exchequer.)
  Put, and agreed to.
  Resolution to be reported upon Monday next; Committee also report Progress; to sit again upon Monday next.

  COMMONS (INCLOSURE AWARDS.)
  Return ordered, "of all Inclosure Awards or Copies of Inclosure Awards which are at the present time deposited or enrolled with the Clerks of the Peace or of the Councils of the Counties of England and Wales, setting out alphabetically under the head of each county the name of each Common affected by an Award, the parish or township in which each such Common was situated, and stating the date of the Act of Parliament authorising the Inclosure and the date of the Award."—(Sir John Brunner.)
  Adjourned at eighteen minutes after Twelve o'clock.