Digitized by the Internet Archive in 2007 with funding from Microsoft Corporation http://www.archive.org/details/bettertimesOOIIoyrich BETTER TIMES BETTER TIMES Speeches by the Right Hon. D. ^LOYD GEORGE, M.P. Chancellor of the Exchequer " It looks as though this rich and powerful nation, after the exceptional provision it has been making recently for the needy and unfortunate, has been blessed with greater pros- perity than it has ever attained in the whole history of its commercial greatness." — Second Budget Speech, yothjune, 1910. HODDER 6? STOUGHTON ST. PAUL'S HOUSE WARWICK SQUARE, LONDON, E.C. MCMX Richard Clay and Sons, Limited, bread street hill, e.c., and BUNGAY, SUFFOLK. (3l-Jo£s< **<* GIFl is* • CONTENTS i. Trusts and Monopolies. Newcastle, April 4, 1903 . 2. Welsh Education Revolt. Cardiff, October 6, 1904 16 3. Liberalism and the Labour Party. Cardiff, October II, 1906 30 4. Free Trade. Manchester, April 21, 1908 37 5. Social Reform. Swansea, October 1, 1908 48 6. The People's Budget. House of Commons, April 29, 1909 60 7. The Land and the People. Limehouse, July 30, 1909 *44 8. The Landlords' Tariff on Industry. Newcastle, October 9, 1909 157 9. The Great Assize of the People. National Liberal Club, December 3, 1909 176 10. The Budget Examined. Carnarvon, December 9, 1909 192 11. Free Churchmen and the House of Lords. Queen's Hall, December 16, 1909 208 12. The Peers and Public Opinion. Walworth, Decem- ber 17, 1909 220 13. The Problem of Unemployment. Queen's Hall, December 31, 1909 233 359 VI 14. The Budget and Social Welfare. Reading, January i, 1910 255 15. Tariffs and the Foreigner. Plymouth, January 8, 1910 266 16. The Peers' Campaign. Falmouth, January 10, 1910 278 17. Rural Intimidation. Queen's Hall, March 23, 1910 289 18. Second Budget. House of Commons, June 30, 19 10 , 303 INTRODUCTION I have been urged by friends to publish these speeches. Very reluctantly I gave my assent. I felt, however, that the speeches might at any rate serve one useful purpose — the dispelling of a popular Tory illusion as to the origin of the Budget scheme of 1909. It has pleased some critics to represent the proposals of that Budget as a pure electioneering expedient, devised to meet a critical emergency in the fortunes of the Liberal Government. Some of the speeches in this volume will at least prove that the ideas which found form in the Finance Bill of 1909 had been in my mind years before the present Liberal Government was even in sight. This may be a poor excuse for publishing a volume of speeches, but I have no other to offer. D. LLOYD GEORGE. Criccieth, August, 1910. TRUSTS AND MONOPOLIES Newcastle, April 4, 1903. We have arrived at one of the most important stages in the history of the Liberal party. I believe the future of this country largely depends upon the foresight, convic- tion, courage, and devotion to principle of the Liberal party during the coming years. There is, in my judg- ment, too great a disposition of late years to play up to the whims arid caprices of what is known as the man in the street The man in the street clamours for war, and we all say war is the right thing. The man in the street says we must have a big Army, and we all say "right," we must have a formidable Army. The man in the street talks about the expansion of the Empire, and we all garnish our speeches with Imperial allusions. But the man in the street has a relapse; he gets tired, not so much of the pomp, but of the burden of war; and we all become peaceable. The man in the street then says it is not an increase of the Army you want, but a small one; and we all say the Army is too big. There is too much disposition to tune our lyre to the sounds that come from the street, instead of standing to the sound prin- ciples of Liberalism. The man in the street is the man who gives neither time nor serious thought to the study of politics. Whenever anything sensational occurs the man in the street begins to think of politics. Nothing, in B 2 BETTER TIMES my judgment, can be more detrimental to good govern- ment than that the policy of any party should be dictated to by the mere passions of a superficial observer whilst the reflections of the real students of politics who give their best time and thought to the study are brushed aside. It is time we should revert back to the old funda- mental principles and base our policy upon them. We have great problems in front of us. Never were a people confronted with greater or more serious problems. What is the condition of the people in this country at the present time? Seven per cent, of the people in the great cities live in a state of chronic destitution — a hand-to- mouth existence. Thirty per cent., or nearly one-third, live on or below the poverty line. Who can tell what that means? That is the problem which Liberalism has to grapple with if it is true to itself. How are you going to do it? You must reduce extravagant national expenditure, which undoubtedly affects the people and bears upon them. You must have efficiency in all the departments of the State. More than that, you must above all deal with those enormous trusts and monopolies which are interfering with national development, crushing out industries, and pressing heavily upon vast numbers of the people of this country. What do I mean by trusts and monopolies? You may say you have no great trusts here as you have in America. In America you had great trade combines, but they were purely ephemeral. They were creations of yesterday. By the mere action of trade and industry they occasionally collapse. Those that are still in existence the American people, with that prompti- tude and energy which characterise them, are preparing to deal with. But in this country the trusts I am alluding to are part of the social fabric. They have been in exist- ence for generations and centuries. They had their com- mencement in the days of William the Conqueror. What is the first of them ? The first is the great land trust. The land is a trust. A great financier starts his TRUSTS AND MONOPOLIES 3 work — and I recollect it as a law student as one of the first lessons in the law of real property — by saying there is no absolute property in land. Sometimes we curse the feudal system, but at any rate there is this to be said for the feudal system : it was based on the assumption that the revenues on land were given to a set of men in order to enable them to deal in their district with the problems of national defence and the administration of justice. Before we attack the feudal system, the first thing we have to do is to realise its obligations. Let me say a word about this question as it affects the towns. The land in London is worth about ^500,000,000. It is worth more than all the municipal debt throughout the kingdom — the money which has been sunk in great municipal enter- prises, in waterworks, sanitation, lighting, tramways, and roads. The land in London is worth more than all the municipal debt of the kingdom. Who created that wealth? It was not the landlords. London was a swamp, and the landlords did not even create that. All the wealth has been created by the industry, the energy, and the enterprise of the people who dwell in London. Every year the value of the land is improving in London by the capital sum of ^"10,000,000. This improved value is due to the energy of the people, not to the great land- lords into whose coffers this enormous sum of money pours. Whilst the landlords are going to their race- courses, their property is increasing by this enormous sum. Out of this sum of money what do they contribute to the public expenditure? If these great communities had not expended money upon sanitation and lighting and roads this value would never have been created. These communities could not have existed at all without great public expenditure that has enabled the landlord to get this value for the land. It would hardly be believed by anyone outside this country that the landlords have not contributed a penny towards that great local expenditure. The first duty of any reforming progressive Govern- B 2 4 BETTER TIMES ment is to compel those gentlemen to contribute their fair share. London, of course, is the great illustration, but you can find the same thing in any great city or town, or even in villages throughout the country. Glasgow, I am told, is going up in value to the extent of ^2,000,000 every year. They laid down in Glasgow a system of tram lines, and a magnificent system it is; but what is the result? Simply that all the land in the suburbs is going up in value by leaps and bounds. Land worth ^500 two or three years ago is worth ^"5,000 or more this year. The land of Glasgow and suburbs is going up in value each year to the extent of ^"2,000,000, and yet towards all the municipal expenditure entailed the great landlords have not contributed a single penny. I was in Liverpool some time ago and was given a remarkable example of that sort of thing. Just outside Liverpool, but inside the Corporation area, there was a man who had a piece of land in respect of which he received £19 a year as rent, as much as it was worth. Liverpool grew, and this land was afterwards let for building purposes, and the Earl of Sefton received ^70,000 premium for letting the land, and is now receiving ^16,000 a year for that land which would be worth ^700 were it not for the fact that that great hive of industry had grown up. And what does he contribute to the expenditure of the Corporation? Not one penny. I was given other figures in Liverpool. I was told that the Lords of Derby and Sefton and Salisbury — that these three noble Lords are in the receipt of the sum of ;£345>ooo a year from ground rents in the city, and out of that enormous revenue they do not contribute one penny to the public expenditure on the place. Recently the present Unionist Government [1903] passed the Agricultural Rating Act. Under that Act the tax- payers in Liverpool who are paying heavy rates to improve Lord Salisbury's property are paying something like one penny in the pound to relieve Lord Salisbury, Lord TRUSTS AND MONOPOLIES 5 Sefton, and Lord Derby from paying the rates on the great rural estates to which they retire to enjoy their ^345,000 a year, to take the rates off these poor, oppressed landlords — this crushed industry of receiving rents. It must be hard work receiving and spending ^345,000 a year, even if you don't earn it. Yet, at the last election in this country, the people gave a majority of 135 to a Government which did that, and very nearly wiped out the party that opposed it — called them traitors and pro-Boers. As Mr. Chamberlain has repeatedly said, "This is a wonderful Empire." Lord Selborne, in a speech which was reported yesterday — Lord Selborne, by the way, is a son-in-law of Lord Salisbury — called upon the taxpayers of the country to contemplate the rich reward they were receiving from their opposition to Home Rule. He was perfectly right. Lord Selborne and his friends are receiving a very rich reward — all these millions that have been given to landlords, whose only contribution towards the work of the community is receiving these enormous ground rents. All this question of the taxation of ground rents bears upon the great municipal enterprises of the future. Take the question of overcrowding. This land question in the towns bears upon that. It is all very well to produce Housing of the Working Classes Bills. They will never be effective until you tackle the taxation of land values. Do you know that you are living in one of the worst districts of England in respect to overcrowding? Out of the six worst towns in the country, the three very worst are in the North of England. Gateshead tops the list. Newcastle comes second. I think Sunderland is the third. These are the three worst towns, and you have villages in some of the mining districts of Northumber- land which are still worse than the towns. In one village the overcrowding is 55 per cent. What does overcrowd- ing mean? It is not a question purely of the physical discomfort which it imposes upon its victims. It is more 6 BETTER TIMES than that. It is a question of health and happiness, self- respect, morality. How can you expect a healthy, sound race, when men, at the end of their hard day's work, are supposed to recruit the strength consumed in their toil in habitations where some of our great landlords would not pen their cattle? How can you expect men and women to lead cleanly lives under such conditions as obtain in some of our large towns? I sat as a member of an Old Age Pensions Committee — appointed by a Unionist Government — ancl I really thought it meant business. I was younger then. We drew up a scheme and found it would cost twelve millions a year. The Government said it would cost too much, and, by way of a diversion, plunged into the South African War as a cheaper business. Since then they have increased our taxation by armaments and war debts by more than would have sufficed for all our Old Age Pensions. In the evidence we heard we found a greater difficulty than giving pensions. We found amongst the workmen, especially in the unskilled trades, that men rarely approach even the confines of old age. They are exhausted by the way, still in the prime of life. When we came to fix our age for a pension at sixty-five, we found that large masses of the workmen would never live to benefit by it. Why? The explanation is to be found in the terrible habitations to which the large propor- tion of our unskilled workmen in the large towns are driven at the end of their day's work. Here is another fact. I have told you that 7 per cent, of the people live in destitution, that one-third live on or about the poverty line. They have not the moral or the physical stamina necessary to sustain continuous labour. How can you expect them with such homes as these? The first thing to do in lifting up the people is to provide decent habita- tions. Before you can do that you must grapple with the land question in the towns — the first of these great trusts. It is all land. You cannot build houses without TRUSTS AND MONOPOLIES 7 land, you cannot lay down trams for the purpose of spreading the population over a wider area without land. As long as the landlords are allowed to charge prohibi- tive prices for a bit of land, even waste land, without contributing anything to local resources, so long will this terrible congestion remain in our towns. This, then, is the first great trust to deal with — land. There is another reason why it must be dealt with, and that is because the resources of local taxation are almost exhausted. There are instances of rates going up to 8s., 9s., and even 10s., and there is yet much that the munici- palities ought to do, but cannot. It is essential that they should get new resources. What better resources can you get than this wealth created by the community, and how better can it be used than for the benefit of the community? I would like to say something about rural land, but I am not going to dwell upon that. The land question in the country is very important for the towns as well. But the only thing I will put to you is this : There is some- thing wrong — where the labourer, working hard from morning till night in spring, summer, autumn, and winter, in rain and sunshine, only to receive his us. a week in vast areas of rural England — in a country where you give thousands of pounds to men who do not labour at all. There is something wrong where you have such a state of things as you find in Wiltshire and among the agricul- tural communities of England, where labourers are crowded into cottages, three, four, and even ten in one room. People are crowded in Wiltshire like this, and in a district where the community could spare fifty acres of the loveliest park land to a man who does nothing. There is something wrong in that system. It is largely a town problem. You are driving all these labourers into the town owing to this land system. These men depress wages. You take them away from their healthy environ- ments, where they have as much air and sun as Provi- 8. BETTER TIMES dence can spare for English soil. You drive them into the town to unhealthy environments. You weaken the martial resources of this country by taking them from the country where you develop a robust and strong manhood. All these questions will demand serious con- sideration in your cities in the future. But that is not the whole story of the land. There is the question of mining royalties. In every country in Europe except this the State has reserved its rights over minerals. In France, through the Revolution, they abolished the private ownership in minerals. But in this country we are paying five millions and a half for permission to develop our mineral resources to men, I won't say they have no right to it, but men who have contributed nothing to that develop- ment. What happens as a rule? I will tell you the story of some mines I know in South Wales. One of them in particular. There is a nice bit of common land which belonged to the whole people in that dis- trict. It is a waste with just a few unshepherded cattle upon it, and the landlord says, " It is a pity for this land to lie waste; would it not be better to put it under the plough? " So in a Parliament composed largely of lords of the manors he obtained an Enclosure Act to bring into cultivation waste land. He put it under the plough, and the tenants have been under the harrow ever since. The Enclosure Act is passed. The land in future does not belong to the people of the district; it belongs to the lord of the manor. Some day they discover that this unpromising waste has a great treasure underneath it — coal, or iron, or copper, or it may be slates. What happens? Some gentleman comes round and says, "I should like to open up that land." The lord of the manor says, "Yes, if you pay ten times as much as it is worth." So he commences to sink, and very often sinks something else — he sinks his money. If he fails, the lord of the manor compels him to pay for the damage to the surface, TRUSTS AND MONOPOLIES 9 three times as much as the surface is worth. That is a good start, but it is only a start. Supposing he succeeds, and finds coal there, the lord of the manor, with three times the value of the surface in his pocket, adds a charge of 5d., 6d., or is. a ton for all the coal raised, a third or fourth of the wages of the miner. That is not all. Naturally the discovery of a rich mine like this attracts people to the neighbourhood, and, of course, the more people go there to work the better it will be for the lord of the manor. You would imagine he would show some concern for the proper housing of the men who come down to work this mine. Does he say, " It is in our interest ; let me help you to this nice bit of land ? It is poor land ; I am getting about six- pence for it now. Take it, my good fellow, and build a nice house for yourself. And there is a rock over there ; go and quarry as much stone out of it as you need to build that house. Make yourself comfortable and happy while you are working here." That is not the way of lords of the manor. The lord of the manor says, "You may build a house on that land, but you must pay me for it every year forty times its value. You may quarry stones there, but you must pay me so much for every cartload you take away. And when you have built your house, it does not belong to you. Part of it will belong to me, and that part will grow year by year. I will have a few stones this year, and the stones will grow year by year, and I will take your house piece by piece. When you are an old man half of it will belong to me, and when you are dead it will pass to my son, and not to yours." Nor is that all. Talking about the daughter of the horse leech, if there had been ground landlords in that day and royalty owners, the inspired writers would have alluded to them as examples of greed. But, sup- posing that something happens to the miner. He goes down into the bowels of the earth, facing dark, weird, and io BETTER TIMES potent enemies, the savage forces of untamed nature, at any moment ready to maim, mutilate, or to crush the life out of him. Supposing he falls, this soldier of industry, does the mining royalty owner contribute one penny towards his care or his cure? Does he make any provi- sion for those dependent on him? If he is killed, what does the mining royalty owner pay? It is true that the man who sinks his capital, even though the accident that destroys the miner may destroy his fortune, is compelled to contribute. Next time the Progressive forces of this country are once more triumphant their first task will be to teach their civil duties to these people. Another illustration of the dangers of uncontrolled power over the resources of the soil is supplied by the Penrhyn case? Originally the whole of the Penrhyn quarry was common land. Great lords came there, and got an Enclosure Act. It is now their property. At the beginning of the last century a family of slave-owners from Jamaica came over and took over the quarry, and founded the new Penrhyn dynasty. And the quarry has been worked on slave-driving principles ever since. I am not going into all the details of the dispute between the work- men and the employer. It is sufficient to say that these men protest in the name of self-respect and manliness against the terms which degraded them. They say : " If we are wrong we will submit to the arbitrament of any honourable body of men, of any creed, of any party in the land." They have named the Unionist Prime Minister. Although they are Liberals they say, "We will submit our case to the Prime Minister, to Lord Rosebery, to Lord James, to any man nominated by the Board of Trade " — nay, they say, "We will submit the settlement of the dispute to Lord Penrhyn 's own counsel." What is the answer? "I am the sole judge." Really, there ought to be a limit to this sort of thing. And to-day you have great distress in that community. TRUSTS AND MONOPOLIES n I can hardly trust myself to speak of it. Every man who comes tells me one story — he is just stricken down by the pinched, hungry look of little children. A school attend- ance officer finds children in a house. "How is it," he asks, "the children are not at school?" "They are in bed," says the mother. "In bed?" "Yes," she says, "I have not a crust to give them for breakfast." The suffering is intense, all through the cruel arbitrament of this one man. These men have endured hardships that I cannot depict. They have faced it all. There has never been a struggle in the history of Labour where men have shown such tenacity, such unflinching courage. I can understand them. They are mountaineers, and I know the feeling of mountaineers towards the mountains. They are working among mountains, the ramparts thrown up by God throughout His earth for the defence of freedom, and they say, "We will endure anything rather than desecrate the hills with slavery." Were I a Penrhyn quarryman, I would rather, on the bleakest moorland road in Britain, be a stone-breaker than yield to these demands. But what about the interests of the community? Here is a thriving industry. Here is a loyal, industrious, God- fearing community, brought to the verge of starvation. Here are towns in the district whose trade is withering, and — I put this to those gentlemen who talk about foreign competition — here is the building trade throughout the country suffering, and here are slates coming from America for the first time, and establishing a foothold in British markets from which you cannot dislodge them. We are living in an age of keen competition. There is a great struggle for life, not merely amongst individuals, but amongst nations, for commerce, trade, supremacy. No nation can afford to allow mediaeval notions, to allow either the insatiable greed or the insensate pride of any aristocrat to stand in the way of an industry. I am delighted to find that the Liberal party is a whole, without 12 BETTER TIMES any division, one mind, one purpose, in putting an end to this tyranny of Lord Penrhyn. There are other trusts. There is the drink monopoly. What is that? We are a community not of teetotalers, or, if we are, we have a very considerable cellar. I believe it costs us about one hundred and sixty millions a year. At any rate, it is a community that has not made up its mind that alcohol has no place in civilisation. The teetotalers are in a minority, and cannot force their views on the majority. But it is, at any rate, accepted by all that if alcohol is to be sold it is a commodity in the sale of which there is considerable danger to the State. There- fore, it can only be sold under careful restrictions. The sellers are, therefore, carefully selected for their qualifi- cations. It is a dangerous trade, and you must have a care for the State. We cannot have a policeman at every door, and therefore they must be trusted. And how is the trust fulfilled? Last year there were 150,000 con- victions for drunkenness, half the workhouses are filled with intemperates, two-thirds of the lunatic asylums, and nine-tenths of the prisons. What does that mean? 150,000 breaches of trust, and all the rest may go as breaches of the bargain between them and the State. All this sort of thing must be taken in hand. It is a great danger, but a graver still is the great brewing combine — this potent, terribly potent, trust. It is using the power which the State has given it, the wealth which the State has enabled it to accumulate for the purposes of intimidating any man who dares to call it to account for its delinquencies. There never has been a more humiliating spectacle in the history of England than that speech of the Prime Minister's. I regret it deeply. I have great respect for the Prime Minister, and I believe that there was never a more honourable man filling so great and exalted a position. But when a man of his position, of his acknow- ledged rectitude, is intimidated and threatened by a trading TRUSTS AND MONOPOLIES i3 syndicate into a breach of the first law of public life, the law which says that matters must not be criticised whilst still sub judice — under appeal — what can you expect of Mr. Walter Long and others who go about the country? This state of things is a grave peril to the State, and, as Lord Rosebery said years ago, if the State is to save itself, save its independence, it must grapple firmly with this potent power in its midst. Just one or two words on Education. This is another monopoly. After drink comes the clergy. They are more closely associated than you perhaps imagine. They are always together at elections. It is the same with all these great monopolies. They have a strange instinct when- ever one of them is attacked — somehow or other they hang together, the clergy throw in all their support, and if you attack the Church you find in every parish road in the kingdom brewers' drays full of barrels to buttress up the falling Church. Attack the land monopoly — Church, brewers, publicans, landlords, they're all together at once with a sort of instinct. I remember perfectly well in 1880 when Mr. Gladstone attacked the Sultan of Turkey, all the publicans, parsons, landlords, and bashi-bazouks stood instantly side by side in defence of any despotism. It is an instinct of these great monopolies and tyrannies. Therefore, this monopoly comes in the list. I am putting the parsons on the Black List. They claim the monopoly of education in 8,000 parishes and 15,000 schools. They appoint teachers, control the school, and say what sort of instruction we shall get there. What have they to do with the appointment of teachers? They have no more claim to appoint teachers to a State school than they have to appoint, let us say, an Exciseman. I object to handing over the control of any State department — and education is a State department, after all — I object to handing it over to any class of practitioners, let alone parsons. They are not business men. Their affair is not to look after this world. They should leave that to the 14 BETTER TIMES lawyers, whose interests, I am told, end here. It is no? their business, nor the business of any person of any profession, class, or section to appoint teachers in a State school for the benefit of all. It is the business of the people themselves. How many parsons send their children to these schools? That is the best proof of the lack of confidence they have in their own judgment. They don't believe in their own religious instruction, because they take good care not to bring up their own sons in it. They don't believe in their own selection of teachers because they never send their children to the teachers they select. It is the business of the people — and the children of the people that suffer. It is the children of the people who are brought up there, and it is the people who maintain the schools. It is part of the common rights and inherit- ance of citizenship, and we object to any parsons blocking the way. The first thing that we have to deal with is the rights of citizenship in regard to the schools. My last monopoly is the great monopoly of the governing classes. What does that mean? You have no governing classes, you say. Have you not? There are about six million electors in this land at the present day, and yet the Government is in the hands of one class. They have so manipulated Parliament that it is all in the hands of that one class. It does not matter up to the present which party is in power, you have prac- tically the same class governing the country. There is no democratic country in the world where such a state of things exists. In America an old rail splitter became President of the State, and in France we have an old workman President now. In this country the way in which Parliament meets, the burden of expenses for entering Parliament, and the very hours at which they meet all conspire in the end to keep the Government in the hands of the leisured classes who have nothing else to do except to govern others. The great weapon for this purpose is TRUSTS AND '-MONOPOLIES 15 the higher chamber known as the House of Lords. That has to be dealt with. I have given you just a few of the monopolies demand- ing attention. On the way they are dealt with will depend largely the destinies of the people of this country. Poverty, crime, wretchedness, misery, slums, destitution that often follows honourable old age, these are the problems; but I have listened for six months to scions of the aristocracy in the House of Commons dwelling upon the importance to this nation of giving instruction in definite Christian teaching to the children of the people. Let me tell them this — if they will only engage their abilities, their influ- ence, to the great task of lifting the poor from the mire, they will have taught the State to give its first lesson in definite Christian teaching. WELSH EDUCATION REVOLT Cardiff, October 6, 1904. Those who are assembled here are the members of the local education authorities of Wales. It is not a political gathering in any sense of the term. It is a gathering of those who are responsible for the local government of Wales. We invited men of all sections, of all creeds and of all parties, and if any parties are unrepresented it is because they have deliberately chosen not to come here to represent their views. Now, what is it we are met for ? We are met to take part in probably one of the greatest struggles for religious equality which this generation has seen. What is the position — the educational position — in Wales? Up to the year 1902 you had a dual system of education in this country, and I believe it is about the only country in the world where it exists — a system which is respon- sible very largely, if not entirely, for the educational backwardness of England and Wales compared with the great countries on the Continent of Europe. You have, practically, an educational civil war, the friends and advocates and supporters of one system waging war upon the friends of the other system. The result is that which follows upon every civil war — the country suffering as a whole. What were these two systems? You had first of all a system, the free and popular system of the board WELSH EDUCATION REVOLT 17 schools, where the schools are established by the people, controlled by the people, maintained by the people, where there are no theological tests, where everybody met on the basis of perfect religious equality round that board and in the schools of that board. You had, on the other hand, a sectarian system, a system maintained out of public funds, largely so even before the Education Act, but controlled in the main by the clergy of one sect; theological tests imposed upon teachers ; the appointment of 60,000 of the Civil Servants of this country subject to a test which had been abolished with regard to every other branch of the Civil Service. Not only that, you had the children of this country divided into two indepen- dent, almost hostile, camps ; trained at the public expense to think and act independently and even antagonistically as citizens. A more pernicious system of education was never devised. You had half the children of the country trained in these sectarian schools, taught doctrines which pretty well half the community repudiated — taught again at the public expense. What happened? This sectarian system was tottering. Its own supporters admitted that it could not continue much longer unless relief came from some quarter. The free popular system was making encroachments upon it, and, I believe, eventually would have completely swept it out of the way. What did the Tory Government do? Without consulting the people, without giving the slightest hint to the people at the moment when the people could have expressed their opinions effec- tively, when they sought a mandate from the people on other issues, when they expressly said they were not going to deal with questions of this character — in defiance of their pledges, they introduced a measure which called upon the municipalities of this kingdom to levy a contri- bution upon their constituents for the purpose of buttress- ing up this tottering sectarian system which was a rival to the popular one. Now, that was the position. In the c 18 BETTER TIMES first place it was a gross violation of the most honour- able traditions of British statesmanship. How did Wales stand? In Wales, I don't suppose anyone will deny that the vast majority of the people are Nonconformists. How did this Act affect Wales? You had hundreds of these sectarian schools in villages with Nonconformist children constituting the majority of the pupils, and yet excluded from all positions of privilege and of power in the management or on the staff of these schools. And the Government came to the County Councils — Nonconformist County Councils — to say, "These schools are being starved out of existence gradu- ally, and we call upon you Nonconformist County Councils to levy a rate, which will be paid in the main by Noncon- formist ratepayers, for the purpose of preventing this system, which is an injury and an injustice to your faith : preventing it from going out of existence and being substituted by a free, a popular, and a fair system." That is practically what they asked us to do. It is exactly as if the Boers in the late war were to come to us and say, "Gentlemen, we are not fighting on equal terms; you have captured all our ammunition, you have deprived us of food. We really can't keep up the fighting on these terms; in fact, it is an intolerable strain on our resources, and unless you help us we shall have to sur- render. We observe you are voting large sums of money to your own army in South Africa ; be fair, vote a few hundreds of thousands to us, so that we can fight on equal terms." Now, that is practically the demand which has been made upon us by this Act of Parliament ; we are to vote the supplies for the purpose of keeping up a hostile army ; we are to fill their war chests, their ammuni- tion boxes. What for? In order to enable them to fight the only educational system which gives a scintilla of fair play to men of our own faith. A self-respecting nation had only one answer to give to that, and that is, "No, thank you." WELSH EDUCATION REVOLT 19 But then we had to decide what sort of " No " it was going to be, and we met here at Cardiff. It is where we have decided all great questions in recent years. And provided Cardiff takes the resolution to really lead, we shall very likely meet here again to settle equally impor- tant questions affecting Wales in the years to come. But unless Cardiff really means to throw in its lot for better or for worse with Welsh nationality then I would personally rather see the capital of Wales planted on the heights of Plinlimmon. Now, what was it we had to consider at the first Cardiff Convention? There was a wanton provocation of our people in their deepest and most permanent susceptibilities. Could they submit tamely without loss of self-respect? I venture to say there is no part of the community where there is greater respect for law than in Wales. There is no more law-abiding part of the community. It is not fear that makes Wales law- abiding ; it is instinct. There is no part of the country which has given less trouble to the Government. If it had given more trouble, we would have had better Bills. What did the greatest statesman, the greatest modern British statesman, say about Wales? You remember what Mr. Gladstone said about us : " Your submissiveness is sheep-like." That is what he said. W T ell, we are going to substitute for the sheep on our national flag the dragon. "Y ddraig goch a ddyry gychwyn." Now, we had to consider how we were to go about it. There were some in favour of blankly refusing to ad- minister the Act at all. Well, I was against that line. I need not go into my reasons at this stage. I felt it was our bounden duty to do all we could at any rate to keep within the four corners of the law, and if we were driven outside, the responsibility must be upon those who drove us, and not upon us. So, at the Cardiff convention we threshed the thing out. We decided upon a middle course. We decided upon a course that would reconcile our respect for the law in general with our detestation of c 2 20 BETTER TIMES this law in particular. We would reconcile our obedience to the law of the land with our loyalty to the behests of the higher law. We found we could do it; we consulted the lawyers. And they have got their uses in every well- ordered community. I always thought so, but I am certain of it now. They have been exceedingly useful, and don't forget there has never been a revolution yet in which the lawyers have not been very serviceable to the popular cause. I should like to put in that word for our profession against its detractors. What did we find? We found that this Act was no ex- ception to any other Act. There were defects in it — in fact, more defects than usual in it — and we decided to ad- minister those defects. We said, "All that is good in the Act of Parliament, we will administer rigidly, ruthlessly, and all that is bad in it, we will do our best to soften." And we found we could so administer the Act as to exer- cise fairly clear, definite control over the schools, whilst, at the same time withholding rate aid. That was the great discovery at Cardiff. We recommended that policy to the councils — to administer the law and keep within the letter of the law without levying a rate for sectarian institu- tions that refused popular control and imposed offensive tests on its teachers. That was our policy. Wherever that policy has been applied — and it has been in operation now over a twelvemonth — it has been an absolute and complete success. We challenged the Minister of Educa- tion in the House of Commons to point out a single particular in which any of the counties which were really administering the Cardiff policy had broken the law, and he could not do it. You may depend upon it, he would have done it if he could. And yet there is not a single county in Wales where any rates are levied for sectarian schools which refuse control. We decided if they were going to insist on their Act of Parliament, or in Shake- spearean language, if they were going to insist upon WELSH EDUCATION REVOLT 21 redeeming this bond obtained through the House of Commons by a species of Parliamentary fraud, we would give them the bond, but only "just one pound of flesh " — not more or less than just one pound — not "so much as makes it light or heavy in the substance, or the division of the twentieth part of one poor scruple, nay, that it should not turn the scale even in the estimation of a hair." We said " We will deal with these ecclesiastical Shylocks upon that footing. We would give them just one pound of flesh, but no blood except what we have drawn." Now, they passed the Defaulting Authorities Act this year. That is what they call it. Why did they pass this Coercion Act? Was it because we were not administering the law? Not at all. It was because we were too successful in ad- ministering it. If we were not administering the law there was a remedy. What was that remedy? Man- damus. But a mandamus involved their going to a court of law and proving to the satisfaction of two impartial judges that we had broken the law. They could not prove that, and so, because they could not prove we had broken the law, they brought in this Act of Parliament to compel us to administer it. Now, what is the position? They say, "You administer only the letter of the law." Yes, we administer the letter that killeth. " Ond nid yr yspryd sydd yn bywhau." All these verses I have learned in my own tongue. The spirit of the law ! Why, have you ever heard of a mandamus to compel a man to carry out the spirit of the law? Is there any lawyer who has ever heard of it? You are compelled to carry out the letter of the law, but who are these gentlemen who say you must carry out the law not merely in the letter, but in the spirit. The very men who have broken in the spirit, whatever about the letter, all the most honourable tradi- tions of the British Constitution in their methods of secur- ing this Act ! What is the spirit of this law ? Can you tell me? Has anyone seen this spook? What is it? Are 22 BETTER TIMES there any spiritualists present who can tell me where to find a medium who is on rapping- terms with it? I ask these clerical spiritualists to enlighten us. What is the spirit of this law? The Prime Minister says the spirit of the law is to increase popular control. We have carried it out in that spirit — even to the straining of the letter. But if the spirit of the law is to tighten the grip of the priest upon tl e conscience of the child, all I can say is that no self-respecting council in this land, who has the interest of the child and of the nation at heart, will ever carry out that spirit whatever the penalties may be. But, who talks of law-breaking? I will tell you. The Department and the clergy that have been engaged for over a generation in breaking every educational law and regulation in the land. How? They have no right to give any grants at all to schools which are not efficient. Were these little sectarian schools efficient? Their own inspectors said they were not. Sir John Gorst in the House of Commons said that reports were sent down to be re-written because the inspectors condemned them and said they were not efficient. What would have happened to a company promoter who would have done that? He could have taken no further interest in educational matters for five years. The money has been given to heaps of these little sec- tarian schools on the pretence that they were efficient when the Education Department knew they were not. Well, that is what is called in law giving money under false pretences. In spite of the law, these gentlemen, these Scribes and Pharisees, say you are breaking the law ! They bind heavy burdens and grievous to be borne, and lay them on men's shoulders, but they themselves will not move them with one of their fingers. They blame us for breaking the law while their whole administration of the denominational system in this country has been one pro- longed series of contrivances to evade the law of the land. They have given an answer, and I want you to follow WELSH EDUCATION REVOLT 23 this because it has a very significant bearing on our action. The Department said in effect : " If we declared them to be inefficient the parishioners would have to set up a school board, and then build a school and levy a rate for the purpose of building and maintaining it." They break the law in order not to levy a rate. Have you heard of any- body else doing that? These Board of Education people who have broken the law rather than levy a rate in order to set up a popular and free school are going to send us to prison because they cannot tolerate our following their example in order to secure free schools. It doesn't lie in their mouths, at any rate, to taunt us. They are breaking the law now. Whilst they were passing the Defaulting Authorities Bill in the House of Commons and denouncing us, they were actually engaged in breaking the law. How? I will tell you. The Education Act of 1902 says that, unless the school buildings are fit, the education authorities have no right to give money to maintain them. After the passing of the Act most of them were surveyed and found to be absolutely unfit. Notices were given the managers, and ample time — twelve months — allowed to place them in a fit state. But they have not yet been put in a state of repair. What happened? By the Govern- ment's own law, the Act of 1902, the local authorities have no right to give money to *Jiese unfit schools, neither out of grants nor out of rates. Very well. What does the Board of Education say — this Board that is so very anxious that we should administer the law? Have its officials written to any County Council to say " Here, we find you are giving money to a rotten little school. We believe it is managed by a parson, but we cannot help that. You are giving money out of grants and rates to a school in a certain district which has been condemned as unfit. You are breaking the law, and if you carry it on we will have to mandamus you, or declare you in default " ? Not at all. Why not? Good buildings are for the protection of children. When I see these hypocritical claims on the 24 BETTER TIMES other side that they are only anxious to protect the little children, I say, "The first thing you have to do is to protect your children against foul air, in these schools. Every regulation of the Board of Education says you must give so much space — plenty of air and room for the children in the schools." Heaven knows, these clerical managers have plenty of cubic space in their own churches. Well, here's a good motto for them, M Less overcrowding in the schools and more overcrowding in the churches." We have had the report of the Committee on physical degeneracy, and one of the reasons given for the evil is the bad air children breathe. It is a grave national ques- tion, and at this moment, when it is a living question of the hour, you have the Board of Education breaking the law, urging County Councils to break the law, and entering into a conspiracy with the Local Government Board to persuade the County Councils to break the law, in order to drive children into schools where they are breathing poison into their little systems, that will breed disease, degenera- tion and debility for the rest of their lives. These men will talk about breaking the law? Let them first of all carry out the law themselves. They are actually preventing us from carrying out the law, and that is the object of this Act. The object of this Act is not to compel us to carry out the law ; it is to prevent us from carrying it out. In Glamorgan, they are going to put the law into operation by compelling the managers of these schools to put them in order. The Board of Education brings in an Act not to compel Merionethshire and Carmarthenshire to pay up arrears. That is a small matter — a thousand pounds in Merionethshire and another thousand in Car- marthenshire. They could have left that to the County Courts and to the ordinary process of law. You would not bring in an Act of Parliament to convert this into a Crown Debt and make the Sovereign of these realms a debt collector for the clergy ? Not at all. Why did they bring the Act in ? It is for a much more serious matter. WELSH EDUCATION REVOLT 25 They discovered that we were about to force the denomina- tional managers to put their schools in order, so they bring this Act in to provide an easy way for the Board of Education and the clergy to break the law with impunity. It is a conspiracy of law-breakers — the Government, the Board of Education, and the clergy. We are here to stand for law and order. Now that is the object of this law. If Glamorgan de- clared these schools to be no longer public elementary schools because they were unfit, the Board of Education might, under the first Act, bring in a mandamus, but they would have to go to the Courts. Glamorganshire would say " We are simply carrying out the law. These schools are condemned." They would bring their surveyor, medical officer, and architect up to give evidence, they would produce all the regulations of the Board of Educa- tion, and the judges would say, "Are you going to have a prerogative writ to prevent the Council carrying out one of the most beneficent clauses in your Act? " The judges would say, " Go home ; learn how to respect the law your- selves ere you insist on its being obeyed by others ; but before you depart, there is a little preliminary — you have to pay the costs of Glamorganshire." But now, the Defaulting Authorities Act comes in. They need not go to the Courts now. A parson writes from Glamorgan, and says : " Mr. Hughes and his friends are going to close our schools because there is not enough air for the children." "Are they?" says the Board of Education, "the wretches ! The moment they do it, you tell us." And the clergy write that the Council is pressing hard and things are looking dangerous. So the Board of Education comes promptly to the rescue and the Default- ing Authorities Act is applied. Mr. Hughes is declared in default straight off. There is no going up to the Court. Instead of a mandamus issued by two judges after careful public scrutiny of all the facts, in future you have a letter written by a parson as a basis for an order by a Govern- 26 BETTER TIMES ment cterk at Whitehall. And that is the Defaulting Authorities Act. And they call upon us to submit to that. Good gracious ! They must really think we have lost all sense of self-respect. Let me show you what is being done to-day in Carnarvonshire. A surveyor went round all the schools — not merely the sectarian schools, leaving the board schools on one side — he went to both classes of schools, examined them, and reported that both classes of schools needed an expenditure of ^12,000 to bring them up to the proper state of repair and fitness. This was nearly 18 months ago. What have the sectarian managers done? Practically nothing. What did the County Council do with the surveyor's report on their own schools? On the agenda to-day of the Carnarvonshire Council there is a resolution to raise ,£16,330 in order to pay for and complete enlargements and improvements in course of being effected in the schools of the County Council. If the County Councils are called upon to pay this money in order to conform to the provisions of an Act of Parliament, why should not these other gentlemen be also called upon to obey that Act in the same respect, if they want their schools to benefit under its financial arrangements? Ah! no. If you fill the lungs of the children with good air, you empty the purses of the parsons of good gold. Therefore, this Act of Parliament is to be broken. But, gentlemen, there is a good deal more at stake than that. You have the dignity of municipal institutions in question. It is a new idea in this country that a great Corporation or County Council is just like a constable whose business is to carry out orders from above, and who is liable to be cashiered for breach of discipline if he exercises any discretion. That is a new notion of the status of municipal institutions. I don't mean to say that any municipality or council has the right to refuse to obey an Act of Parliament. I never claimed WELSH EDUCATION REVOLT 27 that. That is not our case, but every municipality has the right by the traditions of British self-government, to exercise a very wide discretion as to the manner, the extent, and the time, in and to which they put into opera- tion the various provisions of an Act of Parliament. They have the right to consider and take into account local circumstances, local burdens, local conditions, and even local prejudices. If they did not, the result would be that there would be such a state of exasperation and irrita- tion in various localities that many excellent Acts of Par- liament would be dead letters. It is because you allow this wide and wise latitude that our system of Government has on the whole worked so well and so smoothly up to the present, and that there has been hitherto so little friction between the central and the local authorities. We must not have it altered. Why, there are Acts of Parliament passed years and years ago that have not been fully complied with up to the present. No one has ever heard of a Coercion Act being brought in within 12 months after an Act has been passed, to suspend a Corporation because it does not carry out every provision of a statute to the full satis- faction of a Government department. We are carrying out the best part of this Act, and we have not come to the end of that yet. After all the honour of our country is at stake. We are fighting for the status of Wales as well as for religious equality, and pray don't forget this in reckoning up the sacrifices we should be prepared to make. There are some who suggest we are playing a mere game of bluff. All I can say is this : I am one of those who believe that there are great things in store for Wales. And we should do nothing which would be unworthy of the great future of our little country, and there is nothing which would be more undignified than merely to enter into a game of brag, bluff, and bluster. Be the cost what it may, the people of Wales have under- 28 BETTER TIMES taken this great enterprise, not as individuals, not as members of a party, not even as members of Churches, but as a nation. Wales has entered the lists to champion the most sacred cause that was ever entrusted to the charge of a people. What is that? The great cause of Freedom of Con- science. Gentlemen, you hear sneers and gibes at con- science. Take this warning. Never trust an individual, never trust a party whose stock jest is a gibe at conscience. I say it in all solemnity, it is God's greatest gift to the human mind, the propeller and the rudder of human pro- gress. And it is for the Freedom of that in this land, in the schools where our citizens are brought up — it is for this freedom of conscience that we have entered the lists to fight as a people. We have staked our reputation by the result. By our demeanour in the contest shall we be judged for all ages. I know the history of my country pretty well. I think I know its present temper as well as most people, and I venture to say that although we have been charged with almost every vice and defect in the whole category of human flaws as a race, not even our worst defamers have ever accused us of cowardice. If we run away now, we shall not merely be taunted, but we shall deserve the taunt. It is a great struggle, and there are great sacrifices. Great sacrifices we must make — close our schools if necessary. Yes, but we will see our children do not suffer. We have buildings where we can teach them. " Ah ! " say our enemies : " teach them ! It will be inferior education. " Inferior? Why inferior? I say that the children will be trained in these circumstances in a way, that they will receive an education higher than any Welsh child has ever received in his daily training. What will it be? Every child will be taught at the outset of his career, it will have it en- graved upon his young heart, so deeply that the impression will not be worn away till it crumbles in the dust, this great lesson of the Master, that man shall not live by WELSH EDUCATION REVOLT 29 bread alone. We shall teach the children that there are principles eternal, outside, beyond, above the limited atmosphere of their daily lives, like a firmament to which they must lift up their eyes, if they would not be as the beasts of the fields. These are the lessons that we will teach them during the year we shall be exiled from our schools. And when the contest is over Wales will have the proud satisfaction of knowing that she has been in the forefront of the battle that has established for ever in the British constitution this principle, that no man on British soil shall suffer any proscription at the hands of the State for any belief he honestly holds as to matters that pertain to his own soul. LIBERALISM AND THE LABOUR PARTY Cardiff, October n, 1906. Let me say at once that, as far as Wales is concerned, I have no anxiety whatever as to the outcome of the new Labour movement. The Welsh working man is an ardent patriot above all things. In the chapels of Wales you will find no distinction of class. The workman, the trader, and the professional man all meet and mingle on terms of absolute equality. Take again the political ideals which Welsh nationalism has striven to attain for over a generation. If you turn us all out of Parliament to-morrow, and substitute for us candidates run by the Independent Labour party, so long as they are Welsh working men they will be just as ardent in their pursuit of those ideals as any member of the Welsh Parliamentary party. I don't see how they could be otherwise. What is and has been our programme? First of all stands the establishment of complete civil and religious equality. Nonconformity is the religion of the working men of Wales, and to demand equal treatment for the Free Churches in every school maintained out of public funds, and equal position for those Churches in the eye of the law in all things is simply to put forward the claim that the religious institutions of the people shall not be regarded as inferior by the State to those patronised by the aristocracy of the land. LIBERALISM AND THE LABOUR PARTY 31 What is our next legislative ideal? The emancipation of the Welsh peasant, the Welsh labourer, and the Welsh miner from the oppression of the antiquated and sterilis- ing and humiliating system of land tenure. Who are more concerned in the success of this part of our pro- gramme than the workmen of Wales ? Both villager and town workman are vitally interested in the settlement of this problem. The present state of things on the land means that the sustenance of the labouring man is often sacrificed to the sport of the idle few ; that almost as large a share of the produce of the soil goes into paying for the permission to cultivate it as is allotted towards maintain- ing the labourers who till it through the sweat of their brow; that the continued enjoyment of the fruits of the labour of the whole of the rural community may depend upon the caprice of one man. Surely this is enough matter of itself to call for reform. But that is not all. The man who flees from this tyranny into the town is preceded by it there into the recesses of its darkest slum. This vicious system of land ownership accounts for the exodus from the country, which is the nation's best nursery ; for the unemployment which comes from the sturdy countryman earning the bread that is meant for the townsman ; for overcrowding not merely men, women, and children in houses, but, what is equally pernicious, that overcrowding of unsightly houses for men, women, and children to live in, which makes our towns and indus- trial villages hideous to look at and unhealthy to dwell in. All this, and much worse, comes from the greed and selfishness which a stupid system of tenure permits to control unrestrictedly the vital resources of our soul. Surely every man who is interested in the amelioration of the condition of the working population of this country must help us in putting an end to such a condition of things. What more have we inscribed on our Welsh national programme? There is the calling in of the aid of the 32 BETTER TIMES State, which means the concentrated power of all, to assist the moral reformer in the creation of a nation of sober people. How? By removing - the temptation to inebriety by interposing legal obstacles in the way of ex- cessive drinking; by so improving the conditions and en- vironments of the people that the despair of squalor shall not drive them to drink. Drink has kept the workmen of this country back a whole generation on the road to progress. It is also an essential part of our national programme to bring the best and highest educational facilities within the reach of the poorest child in the land. We have already done more to achieve this object within the last thirty years than any nation in these islands, but we have only just begun. There is nothing more essential to the permanent emancipation of the working classes of this country than that they should be thoroughly trained in the schools of the land for the struggles in front of them. To crown all, we seek the extension of the powers of self-government to Wales so as to enable her sons and daughters to manage her affairs without hindrance or embarrassment from those who possess neither the time nor the inclination to attend to them, or even to acquire any adequate knowledge as to what these affairs are. No candidate can ever hope successfully to contest an indus- trial constituency in Wales who does not pledge himself unreservedly to advance these reforms to the best of his power and opportunity. I cannot imagine any genuine Labour candidate desiring to do anything else. Therefore I say confidently that the Labour move- ment contains no menace for Welsh nationalism. I re- gard the leader of the Welsh Labour movement, Mabon, who is with me on this platform, as being as good a Nationalist as any of us. With ordinary common sense there ought to be no unpleasantness or misunderstanding. Nothing gives me surer hope for the future than the fact that up to the present there have been no symptoms of bitterness and wrangle over this question in Wales. The LIBERALISM AND THE LABOUR PARTY 33 discussion has been conducted with calmness and re- straint. We owe this to the great tact and good temper shown by the leaders on both sides. We cannot have a really Welsh movement with the workmen outside. The miners and quarrymen of Wales have always been ardent patriots, and the movement amongst them for economic emancipation will never alienate them from the endeavour to secure the political and religious emancipation of the little land they love as dearly as any of us. But there is something more to be said on this sub- ject. We who confer here to-day are not merely Welsh Nationalists, but we are members of a great British party, striving for objects outside as well as inside Wales. How does this new Labour agitation affect us in the capacity of British Liberals? Frankly I don't believe there is the slighest cause for alarm. Liberalism will never be ousted from its supremacy in the realm of political progress until it thoroughly deserves to be deposed for its neglect or betrayal of the principles it professes. As long as the Liberals go on as they have done this Session, showing that they are not afraid of their professions when they are reduced to practice, then their trust will never be transferred to a new party. The working man is no fool. He knows that a great party like ours can, with his help, do things for him he could not hope to accom- plish for himself without its aid. It brings to his assist- ance the potent influences drawn from the great middle classes of this country, which would be frightened into positive hostility by a purely class organisation to which they did not belong. No party could ever hope of success in this country which does not win the confidence of a large portion of this powerful middle class. That is an asset brought by Liberalism to the work of progress which would never be transferred to a Progressive party constructed on purely Labour lines, and I would strongly urge the importance of this consideration upon those who wish to drive Liberalism out in order to substitute another D 34 BETTER TIMES organisation. You are not going to make Socialists in a hurry out of the farmers and traders and professional men of this country, but you may scare them into re- action. They are helping us now to secure advanced Labour legislation ; they will help us later on to secure land reform and other measures for all classes of wealth producers, and we need all the help they give us. But if they are threatened with a class war, then they will surely sulk and harden into downright Toryism. What gain will that be for Labour? Of course if the Labour leaders could ever hope to detach every working man through the country from both political parties and recruit them into a Labour combination then I agree such a party might be all-powerful. But those who know anything about political history can tell you that this is an impos- sible feat. There are hundreds and thousands of working men who never under any pressure or provocation quit the parties that they join any more than they leave the churches of which they become members for any new- fangled religious organisation. There are many more who will always remain true to the members, upon the election of whom time, after time they have often spent much en- thusiasm, devotion, and some sacrifice. There are numbers who are treated well by employers to whom they are attached. There are many who doubt, and will continue to doubt, the wisdom and feasibility of the Socialist ideal. You must recollect that up to the present there has been no real effort to counteract the Socialist mission amongst the workmen. When that effort is made you may depend upon it it will find adherents even amongst working men. You have to reckon with an enormous power of wealth, the influence of highly trained intelli- gence, or organisation ; you have also the incalculable influences of conflict of Labour interests, personal and sectional rivalries. There will be alternative remedies, amongst which working men will be divided. For LIBERALISM AND THE LABOUR PARTY 35 instance, take, if you like, tariff reform, and, alas ! there comes the blighting but potent seduction of drink. All these are influences which will prevent the consolidation of the working classes of this country as a whole into one powerful and solid federation. Those who think that they can bring every workman in this country into one taber- nacle do not understand the elementary forces that move human nature, whether as individuals or in the mass. Does anyone believe that within a generation, to put it at the very lowest, we are likely to see in power a party pledged forcibly to nationalise land, railways, mines, quarries, factories, workshops, warehouses, shops, and all and every agency for the production or distribution of wealth? I say again, within a generation. He who entertains such hopes must indeed be a sanguine and simple-minded Socialist. Are we, then, to wait until the nation is converted to this sweeping programme before we do anything? Is nothing to be done in the meantime to temper the miseries of our social system except to expend our energies in squabbling with each other? Common sense bids us get along together as far as we can to-day, and not to block the road of progress by standing on it in groups to quarrel about the stage we hope to reach the day after to-morrow. We do not ask Labour to be hewers of wood and drawers of water for Liberalism. We have already in Wales seven representatives directly associated with labour — 1 that is, one-fifth of our representation already — a larger proportion than any other part of the country can show. We do not seek the aid of Labour merely to win elections for the party. We want its assistance to give direction to the policy of Liberalism and to give nerve and bold- ness to its attack. If the able men who now think that they are best serving the cause of progress by trying to shatter Liberalism were to devote their energies and their talents to guide and to strengthen and to embolden Liberalism, they would render higher and more enduring d 2 36 BETTER TIMES service to progress, and in doing so they would be help- ing to guide and direct the cause of a much more powerful machine than they are ever likely to command. But I have one word for Liberals. I can tell them what will make this I.L.P. movement a great and sweep- ing force in this country — a force that will sweep away Liberalism amongst other things. If at the end of an average term of office it were found that a Liberal Par- liament had done nothing to cope seriously with the social condition of the people, to remove the national degrada- tion of slums and widespread poverty and destitution in a land glittering with wealth ; that they had shrunk from attacking boldly the main causes of this wretchedness, notably the drink and this vicious land system ; that they had not arrested the waste of our national resources in armaments, nor provided an honourable sustenance for deserving old age; that they had tamely allowed the House of Lords to extract all the virtue out of their Bills, so that the Liberal statute book remained simply a bundle of sapless legislative faggots fit only for the fire; then would a real cry arise in this land for a new party, and many of us here in this room would join in that cry. But if a Liberal Government tackle the landlords, and the brewers, and the peers, as they have faced the parsons, and try to deliver the nation from the pernicious control of this confederacy of monopolists, then the Independent Labour party will call in vain upon the working men of Britain to desert Liberalism that is so gallantly fighting to rid the land of the wrongs that have oppressed those who labour in it. FREE TRADE Manchester, April ax, 1908. There is no county in England whose fortunes are more inextricably bound up with freedom of trade than Lanca- shire. I wonder whether even Lancashire men fully realise what a change might mean. I think it might mean a great trade catastrophe for Lancashire if there were a departure from the root principles of our fiscal system. Take the present condition of things. Before leaving the Board of Trade I was curious to find out what was the position of Lancashire in its main industries compared with that of its trade rivals. You know the contention of the Tariff Reformer is that owing to the free imports which flow into this country, our trade is being destroyed, whereas, sheltered by protective tariffs, foreign countries are building up great industries in competition with ours. What are the three great industries of Lancashire? First and foremost comes the cotton trade — the greatest in the world. What has happened in the cotton industry, not merely in Lancashire but throughout the world? In Lancashire you are drawing your raw material from the end of the earth. Your supplies have to be carried across thousands of miles of ocean. In America they have the cotton fields at their own doors. You might have imagined that, with raw materials on the spot and high 37 38 BETTER TIMES protective tariffs to help it, if there was anything in Tariff Reform at all, the cotton trade would present a case where Protection would be triumphant and Free Trade go to the wall. Let me give you one or two figures. Last year Lancashire alone — a county which is not the size of a single State in America — sold to the world, not merely to the Colonies but to all the countries of the earth (there is not a land probably where you would not find a cargo of Lancashire cotton fabrics); you sold from Lancashire ;£i 10,000,000 worth of cotton fabrics, which represents an increase on the previous year of 11 per cent. Take the United States of America — cotton grown there — excellent cotton ; every quality ; the raw material on the spot, high protective tariffs, everything, according to the Protectionists, to help. What did they sell? The Protectionist United States sold ^5,700,000 against Free Trade Lancashire's ;£ 110,000,000. That is a little over a twentieth. Nor is that all. It represents a decrease in America from the trade of the previous year of 45 per cent. We have heard a good deal about un- employment. Trade has been bad, and of course these gentlemen talk as if unemployment were the monopoly of Free Trade countries. If your trade in Lancashire had gone down in a single year — your export trade — by 45 per cent., think of the mills that would have had to be closed. Then there is Germany ; there is " the bogey " — Ger- many, the paradise of Protection. You have every ele- ment in Germany that would make a Tory paradise. A high tariff, an exalted Imperialism with a still more exalted tax on food — a Conservative administration with an all-powerful aristocracy, Socialists not strong enough to direct a policy, but strong enough to frighten people into Toryism — just the sort of land to live in, and yet in FREE TRADE 39 Germany wages are lower by 20 per cent, than in this country, the cost of living is higher by another 20 per cent., the hours of labour are longer, and the London stock-jobbers — who are mostly Tariff Reformers — when they are asked to lend money on the freehold of this Pro- tectionist Garden of Eden, insist upon 4 per cent., and with reluctance advance money then. But when they are asked to advance money on the security of this Free Trade purgatory they are only too glad to do it for 3 per cent. Germany — what does she do in cotton? A little better than America. She sold last year very nearly, not quite, one-fifth of what you sold — one-fifth. Free Trade is better than Protection by five to one. And the trade of the Germans in textiles last year decreased by 5 per cent. France, another Protectionist country, has gone down. She only sold 12 millions, and yet she has a tariff. She has duties on goods. She has Protection. And she sells exactly one-tenth of what you sell of cotton goods. I am sorry to weary you with figures, but trade has a way of working itself out in figures — always except in a Tariff Reform pamphlet — so I ask you to consider a few figures showing your trade in cotton with the world. During the last four years the increase in your sales was greater than the whole of the sales of the United States of America, Germany, and France put together. " Cotton is going." Yes, and going very strong. You increased your exports in cotton goods, the product of your brain and your muscle, by 26 millions in four years — higher by 26 millions last year than four years ago. That is more than all the goods sent out by the cotton mills of the United States of America, Germany, and France put together. Well, now, there is another very important item. What about wages? The wages in the cotton mills of Lancashire are higher than those in the cotton mills of Mulhausen by 40 per cent., and the hours are better. 4 o BETTER TIMES Selling more, a bigger trade, higher wages, shorter hours; yet these gentlemen come to you and say, "Swap it for long hours." You have another very considerable interest in Lan- cashire, and that is engineering. Now there you might think the Protectionist would have the advantage. In the first place you must remember America is in more senses than one the country of inventiveness. Some of the inventions are patented, and some of them are not. And of course they are driven very largely sometimes, because of the scarcity of labour — — they are a new country — to resort to machinery in many cases where you would not be here, and no doubt their patent laws have been more favourable in the past, but only in the past. The result is that it has been the great country for new machinery, and you might imagine at any rate in machinery the United States would beat us in exports. Now the real test of Free Trade and Protec- tion is which of the two is the better for these countries when they come face to face in neutral markets. That is the real test — when the commercial travellers of England meet the German and the American at the same counter, in Germany, in France, in China, in the Argentine — when the three go into the same warehouse to tender their goods, which of the three comes out on the top? That is the test. In cotton the Free Trade traveller comes out an easy first; his goods have got the gloss of freedom on them, and they go. Now comes machinery. Of course, in the old days we were an easy first even in the making of machinery. That is not the case now. But I tell you where we are very good. We are very good at adapting ideas when other people have thoroughly tried them. The American tries a machine which will take him to the moon and he comes down to the ground. He tries another machine and he falls again, and so a third and a fourth time. At last he succeeds, and then FREE TRADE 41 the English engineers begin to make it. That really has been the experience of the last twenty or thirty years. We are rather slow; we rather allow other people to make themselves bankrupt over experiments, and then we avail ourselves of their ingenuity and their enterprise. The result is this. America last year sold to the world, including Great Britain, ^"18,000,000 worth of machinery. The Germans sold also ^18,000,000 worth of machinery. And then comes along this poor, old, Free Trade country, limping along, ruined, nobody employed here — except in consuming foreign goods. Nothing to do. Our ships empty ! And we sold thirty-one millions worth. A small country; but you must not judge quality by size. It is often the little one that comes out best. So much for machinery. In cotton we beat them with Free Trade. In machinery we beat them with Free Trade. There is a third trade. It is shipping. If you read Tariff Reform pamphlets you would never know that we owned a single ship. Shipping is never mentioned in decent Protectionist society. It does not fit in with the argument, and therefore it is left out. What has hap- pened to shipping? There, at any rate, we meet on equal terms. And what happens? This little country — a small country, just the size of one of the States of the United States of America; you might put the whole of Great Britain down on one of the States of America and it would fit quite nicely — and there it is. It is carry- ing in its ships one-half the trade of the world. That is gigantic. Reckon them all, everyone of them — Germany, United States of America, Japan, France, Spain, Italy, and Nor- way — add them together, and we carry half the trade of the world. Then in building ships — that also gives em- ployment. The shipbuilding trade is bad — it is probably worse than it has been for a long time; but we built more in our yards last year than were built in all other 42 BETTER TIMES shipbuilding yards of the world put together. I should have thought that that would have satisfied anybody — we built, not more than any one of the Protectionist countries, but more than all put together. You people of Lancashire are closely concerned with shipping. You have got the great port of Liver- pool, and the almost equally great port of Manchester — a very considerable port this is. I went through it the other day, and was amazed at the way you have carried out this port in the middle of the land. It is a very remarkable achievement. That is the way to fight tariffs in this country. It is by brains and enterprise, and not by the quack methods of Tariff Reformers. Well, there you are — shipping, machinery, cotton — the three great industries of Lancashire ; in all three we are easily first in this Free Trade country. One suggestion I would make to Tariff Reformers. Supposing they got up a deputation to go to Germany, to visit the Kaiser, and carried along with them the cotton spinner who preferred Mulhausen wages to Manchester wages. If they scoured the lunatic asylums of Manchester they might find one, and take him along with them, and they would go to the Kaiser and say : — "We understand your industries are protected by tariffs. We come from a ruined country, a country deso- lated by the operation of freedom. We have come to make a proposal to you. Would you mind exchanging your cotton export trade for ours? Then there are our engineering exports. Would you mind swapping these? And then there is our shipping. Will you give us your magnificent mercantile marine in exchange for ours? " The Kaiser would look at them and say : — "Gentlemen, where did you escape from? " By every test which you can apply Free Trade comes out triumphant, and it would be the greatest catastrophe FREE TRADE 43 to Lancashire if a change were effected. It is an easy thing to change ; it would be very difficult for you to go back. In a moment of thoughtlessness, in a moment of resentment about petty things, in a moment of fitfulness under a pure desire for some sort of change, you may throw over this great institution that has been the making of Lancashire, and if you do you will not get it back. Well, I am standing for Britain — Britain and the flag of freedom in her markets. That flag has stood for Free Trade for fifty years, and the results are superb. If, with England's magnificent results in ship- ping, in machinery, in the cost of food, in the hours of labour, in wages, in textiles, yes, and not merely that, in the security which is given for the peace of the world — if all this is not worth fighting for, then all I can say is that I wonder what is. It is better worth fighting for than an excess of public-houses, than for keeping miners underground to work under conditions where hundreds of them meet their death every year ; it is better worth fight- ing for than bigotry in the schools ; it is the flag of freedom and fair play. Before I abandon this question of Free Trade, will you allow me to say one other thing? It is not merely in the interests of trade alone that I would have you stand by freedom in our markets. Free Trade is a great paci- ficator. We have had many quarrels, many causes of quarrels, during the last fifty years, but we have not had a single war with any first-class Power. Free Trade is slowly but surely cleaving a path through the dense and dark thicket of armaments to the sunny land of brother- hood amongst the nations. We buy largely from nations. We sell largely to nations. We fetch here, we carry there, and we traffic everywhere. It is their interest to be on good terms with us. It is our interest to be on good terms with them. Our trade, our commerce, our shipping — they are weaving "the silken strands of peace 44 BETTER TIMES that bind the nations to us in the bonds of a commercial fraternity." Let me tell you this, the day will come when a nation that lifts up the sword against a nation will be put in the same felon category as the man who strikes his brother in anger. I know not how many generations, maybe centuries, it will take before swords are beaten into plough- shares, and spears into pruning-hooks. But of this I feel assured, that when that day dawns it will be reckoned as one of the greatest and noblest achievements in the story, in the wonderful story, of the human race, that the men and women that dwelt in this little island, standing alone against a world armed with tariffs — valiantly, triumphantly defended the paths along which humanity eventually marched into the realm where the Prince of Peace reigneth for ever. Will Lancashire sell that tradi- tion? Well, I tell you the race that would give up that posi- tion in the history of the world is a race that you and I ought never to feel any pride in possessing relationship to. It is greater than you and J know. Now stand by it. I appeal to you men of Lancashire, whatever induce- ments there may be for you to abandon it. And let me say this, and it is all I have to say about Free Trade. It is a great fight. But I would not have you believe that it is the end, and that we have nothing more to do. Free Trade may be the Alpha, but it is not the Omega of Liberal policy. Build on it as a foundation. Do not take away the foundations of the fabric. It is a great foundation for a fine building, but it is only a foundation. It is not all that I would do for trade. I have never been a believer in the do-nothing policy for trade, and if there were time I would just indicate two or three points where something more could be done. There are great things to be done even for the advancement of trade in this country. A great deal has been done in the improve- FREE TRADE 45 ment of our foreign trade, as well as in establishing agencies in the Colonies. The Patent Act brought, or at least will bring, more employment to our shores than a hundred tariffs. That Act must be ruthlessly and rigidly administered. Some of our friends say : " Well, here your Chancellor of the Exchequer is something of a Tariff Reformer. He introduced a Tariff Reform Bill called the Patents Bill." I repudiate the suggestion that there is the slightest taint of Protection in that measure. The effect of Protection is to put up the price of goods. The effect of my little Patents Bill is to put the price down. I would wish to see reorganised the great inland trans- port system of this country, so as to get rid of wasteful competition, which is a burden upon the industry and the trade and the commerce of the country. I should like to see an end put to the preferential charges which are given by railways for the conveyance of foreign produce. Free Trade is not a preference for the foreigner ; it is fair play for everybody. I should like to see more done in the way of the development of transport — water transport, train transport — so as to open up the resources of our own country. Above all, I should like to see a reasonable, a prac- ticable, and an equitable land system. I know how in- dustries have been stifled and starved by unreasonable demands with regard to the land ; I could give you in- numerable instances. I know how agriculture is de- pressed very largely owing to land conditions ; there is no security which would bring the necessary capital for de- velopment. All that must be attended to. After all, the land of this country was not created and given as an endowment to maintain the dignity and delight of a small class. It was given for the benefit of the children of the soil. I believe that if we had a forward policy on these lines 46 BETTER TIMES you would get such a trade boom in this country as we have never seen the like of. Talk about developing foreign countries and possessions ! We have not got yet to the development even of our own country. And when I talk about trade and industry first, it is not because I think trade and industry are more important than social reform. It is purely because I know that you must make wealth in the country before you can distribute it, and, having done that, we must see fair play to the worker in that direction. After all, this is a rich country. It is the richest country under the sun; and yet in this rich country you have hundreds and thousands of people living under conditions of poverty, destitution, and squalor that would, in the words of an old Welsh poet, make the rocks weep. This is the stain upon the flag. And it ought to be the duty of every man in this country, for the honour of his native land, to put an end to it. There are men in this country, of course, who are in such easy cir- cumstances that they need not apprehend anything from the dread spectre of unemployment. The wolves of hunger may not be awaiting winter to prey upon their child. But still, I am one of those who believe that human sympathy is in the end capable of a deeper and more potent appeal to the human heart than even interest. If these poor people are to be redeemed they must be redeemed not by themselves, because nothing strikes you more than the stupor of despair in which they have sunk — they must be redeemed by others outside, and the appeal ought to be to every class of the community to see that in this great land all this misery and wretchedness should be put an end to. I cannot boast, like Mr. Hyndman, the Socialist, that I belong to a different class from the audience I address. I am a man of the people, bred amongst them, and it has been the greatest joy of my life to have had some part in fighting the battles of the class from whom I am proud to have sprung. FREE TRADE 47 The task is great and it is difficult. The task of every reformer is heartbreaking. There are sympathies to arouse, there are suspicions to allay. There are hopes to excite, there are fears to calm. There are faint hearts to sustain, there are hot heads to restrain. There is the dormant interest in right to wake up, there is many a vested interest in wrong to be beaten down. SOCIAL REFORM Swansea, October i, 1908. Liberalism has not exhausted its mandate nor yet com- pleted its task. During the last three Sessions this Parliament has done more to set things straight than any of its predecessors. During the last^Session of Parlia- ment we carried the greatest measure of social reform of recent times. But all these were but the first-fruits of the great harvest long ripe and awaiting the reapers, some of it cut long ago and lying on the ground, but not yet garnered in owing to unpropitious weather. I don't think this Liberal Parliament has altogether been judged fairly by certain sections. Because we have not during this short period effected a complete transformation in the conditions of life in Britain — swept away all abuses which had grown up for generations — rooted out of the soil grievances which had sunk in and spread for centuries — there are hosts of unreasonable people irritated and impatient and threatening to remove their custom to some other store. All this shows a great lack, not merely of the sense of proportion, but of common sense. Liberalism is entitled in its work to that fair play which is supposed to be the peculiar attribute of the British character. There are some people who, in spite of all we have done, are not satisfied because we have not done every- thing. We cannot be held responsible for the delays 48 SOCIAL REFORM 49 and blunders of the last twenty years. We are doing our best to repair them. And we would have done more but for the malignant destructiveness of the House of Lords. Three of the greatest measures the Govern- ment laboriously carried through the Commons have been slaughtered in the charnel-house across the road, and the Lords are now menacing tne life of a fourth. For twenty years Liberals were not responsible for the Government of the country, and they are not responsible for the delay and for the blunders, administrative and legislative, of those twenty years, when another party was governing the country. Seven years were wasted in an insane hunt for gold in South Africa. Some people thought there was going to be found some Eldorado there which would make every man, woman, and child rich for ever in this land. But it is unfair to blame the Liberal party for that waste; therefore I think we are entitled to say that we are responsible only for the last two and a half years of government, and to appeal to the people of this country to exercise patience and let us work out the term for which we have been called upon to serve. Although we have done a good deal, the task of Liberalism has only just begun. We are not in the slightest degree discouraged by the opposition of foes or by the impatience of friends. We mean to go on steadily along the path which we marked out for ourselves at the outset. What is the work still waiting the Liberal party in this country? It is to establish complete religious equality in our institutions. There is no religious equality so long as men of capacity and character are debarred from com- peting for teacherships in 14,000 State schools because they cannot conscientiously conform to the doctrines of some dominant sect. There is no religious equality as long as one sect whose dogmas in Wales, at any rate, are repudiated by the vast majority of the people, is able to pose as the official exponent of the faith of the Welsh people, and to enjoy all the privileges, emoluments, and E 5© BETTER TIMES endowments attached to that position. I place the estab- lishment of complete religious equality in the forefront, because it lies in the domain of conscience, and must therefore have a greater effect on the spirit, and conse- quently on the destiny of the nation, than anything that can be done in the sphere of its material interests. It affects the self-respect and the independence of a race — a privileged race and caste debase the coinage and manliness in a nation — and nothing can save a people afflicted by such institutions from the spirit of bondage but an incessant protest against them. That is why I rejoice in the unbroken resistance Wales has made, and is still making, against the brand of inferiority stamped by the State on the faith of the majority of its people. That protest has not yet ripened into a statute of the realm for Wales. No. But it has saved her soul from the curse of obsequiousness, and soon the offence itself will be removed. The same observations apply to the question of civil equality. We have not yet attained to it in this country — far from it. You will not have established it in this land until the child of the poorest parent shall have the same opportunity for receiving the best education as the child of the richest. It will not have been established as long as one man has the power and influence in the Councils of the nation which is attached to the possession of ten votes; and another equally deserving — and, maybe, more deserving — has only one, or, maybe, none at all. It will never be established so long as you have 500 men nomin- ated by the lottery of birth to exercise the right of thwart- ing the wishes of the majority of 40 millions of their countrymen in the determination of the best way of governing the country. I hope no prospect of a tem- porary material advantage will blind the people of this country to the permanent good for them of vindicating in the laws and institutions of the land these great principles, SOCIAL REFORM 51 which lie at the root of freedom and good government for the people. On the other hand, I think there is a danger that Liberals may imagine that their task begins and ends here. If they do so, then they will not accomplish even that task. British Liberalism is not going to repeat the errors of Continental Liberalism. The fate of Continental Liberalism should warn them of that danger. It has been swept on one side before it had well begun its work, because it refused to adapt itself to new conditions. The Liberalism of the Continent concerned itself exclusively with mending and perfecting the machinery which was to grind corn for the people. It forgot that the people had to live whilst the process was going on, and people saw their lives pass away without anything being accomplished. But British Liberalism has been better advised. It has not abandoned the traditional ambition of the Liberal party to establish freedom and equality; but side by side with this effort it promotes measures for ameliorating the conditions of life for the multitude. The old Liberals in this country used the natural dis- content of the people with the poverty and precariousness of the means of subsistence as a motive power to win for them a better, more influential, and more honourable status in the citizenship of their native land. The new Liberalism, while pursuing this great political ideal with unflinching energy, devotes a part of its endeavour also to the removing of the immediate causes of discontent. It is true that men cannot live by bread alone. It is equally true that a man cannot live without bread. Let Liberalism proceed with its glorious work of building up the temple of liberty in this country, but let it also bear in mind that the worshippers at that shrine have to live. It is a recognition of that elemental fact that has pro- moted legislation like the Old Age Pensions Act. It is 52 BETTER TIMES but the beginning of things. Legislation of this character is essentially just, and it is a severe reflection on our civilisation that we should have waited so long ere we undertook the making of a provision of that kind for the aged and deserving poor. There are 43 millions of people in this country. They are not here of their own choice. Whether they are here by accident or the direct decree of Providence, at any rate they had no control or voice in the selection of the land of their birth. If hundreds and thousands of them either starved or were on the brink of starvation, we must not blame Providence for this mis- fortune. There are abundant material resources in this country to feed, clothe, and shelter them all — yea, and if properly husbanded and managed, to do the same for many millions more. Why, then, is there so much want and wretchedness in the land? I have heard it suggested by rather shallow critics that it is attributable to Free Trade. What non- sense. If Free Trade had reduced this country to poverty and made it poorer than other countries which are enjoy- ing a Protectionist tariff, I could understand their taunt. But the fact is that Britain is the richest land under the sun after over sixty years of Free Trade, and there is not a decade that passes over its head that it has not added hundreds of millions to its surplus wealth. We must therefore seek for other causes. Poverty is the result of a man's own misconduct or misfortune. In so far as he brings it on himself, the State cannot accomplish much. It can do something, however, to protect him. In so far as poverty is due to circumstances over which the man has no control, then the State should step in to the very utmost limit of its resources, and save the man from the physical and mental torture involved in extreme penury. Let us take the case of a man who has brought it on himself, say, by drinking, gambling, idleness, or other evil habits. The State can do something by removing SOCIAL REFORM 53 temptations and by brightening the general environments of life to save people from bringing themselves to poverty through some of these causes. That is the meaning of such legislation as the Street Betting Bill and the Licens- ing Bill and the Housing Bill. Idleness is a more difficult problem, perhaps, than drinking, but much of this is also due to the lassitude and lack of vitality which comes from insufficient nourishment and bad conditions. Owing to these circumstances, men are not equipped with the necessary strength and energy for consistent and con- tinuous toil. Better conditions of life for the people will produce an appreciable diminution in the numbers of the idle classes at both ends of the scale, for the State cannot well support both, and it must adopt the most effective method for getting rid of them. They are a burden and a source of danger. But there is another and a larger section of the poverty-stricken than these, and it is with that section I am mainly concerned — those who through no fault of their own are unable to earn their daily bread, the aged and infirm, the broken in health, the unemployed, and those dependent upon them. The aged we have dealt with during the present Session. We are still confronted with the more gigantic task of dealing with the rest — the sick, the infirm, the unemployed, the widows, and the orphans. No country can lay any real claim to civilisa- tion that allows them to starve. Starvation is a punish- ment that society has ceased to inflict for centuries on its worst criminals, and at its most barbarous stage humanity never starved the children of the criminal. But what happens to-day in the working of the great economic machine? A workman breaks down in his prime, and permanently loses his power of earning a livelihood. He has done his best to contribute to the common stock, and he can do no more. Why should he be allowed to starve and his children to die of hunger in this land of superabundant plenty? A workman dies, having done his duty as faithfully to his country as the 54 BETTER TIMES soldier who falls on the stricken field. He has contributed the whole of his strength and skill towards building up its might and riches. Has the country no obligation to see that those left behind receive their daily bread ? Here is the richest country in the world. What a shabby country it must be that it does not see that the widows and orphans of those who have served it faithfully are not suffering from want. Take another case. A good workman is thrown out of employment. Whose fault is it ? Perhaps some greedy financiers, it may be in another country altogether, who, in their eagerness to get very rich, overstep the bounds of prudent speculation. There is a crash. A panic follows. The trade routes are blocked with the debris, and hundreds of thousands, nay, millions of workmen in many lands are forced to remain idle until the roads are cleared and traffic is resumed. The workmen are not to blame. Is it just, is it fair, is it humane to let them suffer priva- tion? I do not think the better-off classes, whose comfort is assured, realise the sufferings of the unemployed work- men. What is poverty? Have you felt it yourselves? If not, you ought to thank God for having been spared its sufferings and its temptations. Have you ever seen others enduring it ? Then pray God to forgive you if you have not done your best to alleviate it. By poverty I mean real poverty, not the cutting down of your establishment, not the limitation of your luxuries. I mean the poverty of the man who does not know how long he can keep a roof over his head, and where he will turn to find a meal for the pinched and hungry little children who look to him for sustenance and protection. That is what unemployment means. I have had some excruciating letters piled upon me, more especially during the last year or two, from people whose cases I have investigated — honest workmen thrown out of work, tramping the streets and from town to town from one workshop to another, begging for work as they SOCIAL REFORM 55 would for charity, and at the end of the day trudging home tired, disheartened, and empty-handed, to be greeted by faces, and some of them little faces, haggard and pinched with starvation and anxiety. The day will come, and it is not far distant, that this country will shudder at its toleration of that state of things when it was rolling in wealth. I say again, that apart from its inhumanity and its essential injustice, it is robbery, it is confiscation of what is the workman's share of the riches of this land. During years of prosperity the workman has helped to create these enormous resources of wealth which have accumulated in the country since the last period of depres- sion. Hundreds of millions are added to the national wealth during the cycle of plenty. Surely, a few of these millions might be spared to preserve from hunger and from torturing anxiety the workmen who have helped to make that great wealth. I have heard some foolish mutterings that much recog- nition of this fact in legislation may drive capital away. There is nothing capital need fear as much as the despair of the multitude. And I should like to know whither it will flee, for, judging by the unmistakable symp- toms of the times there will soon be no civilised land in the world where proper provision for the aged, the broken, and the unfortunate amongst those who toil will not be regarded as the first charge upon the wealth of the land. And may I say that there is a good deal of nonsense talked about capital? You might imagine that a large number of people contributed labour either of brain or of muscle or of both, to the wealth of the country, and that another section, and, unfortunately, a smaller number of people contributed something, which is known as capital, and that immediately those people are offended they are liable at any moment to shake the dust of this country off their feet and to carry their capital with them to other lands, where there would be no Socialists and no agitators and no Radical politicians. 56 BETTER TIMES The fact of the matter is, that the greatest capitalist in this country is nature. What is it that has made this the wealthiest land under the sun? It is the richness and the convenience of its great coal deposits, not only excellent in quality, but so deposited as to be within convenient access to the sea, so that it is ready for export to other lands without the handicap of a prohibitive land transport. It is nature, too, that has made it possible for other minerals to be brought from other countries at an in- significant expense. We see it in our large coastline everywhere indented by estuaries and creeks that con- stitute some of the finest natural harbours in the world. These advantages have enabled us to build up the greatest mercantile marine the world has ever seen. We have a climate that has not only merely kept us up to the mark and made us a vigorous and energetic race, but one that has peculiar qualities of moisture not attractive from a tourist's point of view, but invaluable to the manufacturer of cotton and woollen fabrics. There is also the great fact that nature has made us an island and that the sea, like a deep and wide moat, has protected us from the ravages and incursions of Continental marauders for centuries. We have, therefore, enjoyed the inestimable boon of peace, and whilst every Continental country in its turn has been scorched by war, and its resources for the time being devastated and destroyed, we have built up and accumulated wealth generation after generation. You might imagine from the vainglorious talk which is being indulged in, more especially by peers and their apologists, that these rich mineral deposits were brought here at the time of the Norman Conquest by the ancestors of some of our great landlords ; that they were placed in these con- venient spots near the coast by those dukes and earls and barons after they had stolen the commons from the people. You might almost imagine that these profitable elements in our atmosphere were the invention of some ingenious SOCIAL REFORM 57 chemist whose patent has been exploited by a syndicate of capitalists floated on the London Stock Exchange; that our creeks, estuaries, and harbours were all the result of some baronial ingenuity, and there is almost a hint con- veyed that if this kind of Radical legislation is allowed to go on the consequence will be of the most disastrous character. The miner will go down one morning into a Glamorganshire coal pit with his mandril and his safety lamp, and discover to his amazement that he will be driving his pick into the bare shale, for every seam of coal will have been scooped out and carried away to Germany. At Swansea you will go down to your wharves and find your harbour choked, your ships stranded high and dry on the silted sands, for capital will have fled. The Lancashire cotton spinner will go down to his mill and find his threads snapping hopelessly, for the moisture will have disappeared from the air. And, worse than all, there will be no more sea, for it will have receded in disgust from these plebeian shores, and the men of the East Coast will witness the armies of Germany walk over on dry land to trample down into dust this land, already ruined by this hegira of capital. In these investments of nature the toiler has, or should have, his share, and at any rate it is fair for him to insist that the wealth which is attributable to them shall be utilised to protect him and his children from hunger in the dark days of misfortune. No one can really honestly defend the present system. All classes are not taking their fair share of the burden of trade depression. I can name twelve men, and so can you, for it is no Exchequer secret, whose aggregate income during the worst days of depression would suffice to maintain in comfort during the whole of one winter at least 50,000 workmen and their families, and yet you probably find these twelve men on a Tariff Reform platform proclaiming that the distress incidental to unemployment is entirely attributable to the fact that the bread of the workman is still untaxed. Think 58 BETTER TIMES of it — 250,000 men and women and children could live on the income that these twelve men would receive during the worst period of trade depression, and received without ever earning it. I am not one of those who advocate confiscation, and at any rate as far as I am concerned honest capital, capital put in honest industries for the development of the industry, the trade, and the commerce of this country, will have nothing to fear from any proposal I shall ever be responsible for submitting to the Parlia- ment of this realm. But I do without fear of misrepresentation say that the first charge on the great natural resources of this country ought to be the maintenance above want of all those who are giving their labour and brain and muscle to the culti- vation and development of those resources. These condi- tions I have described the Liberal party has already done something to redress. It will yet do more. It pursues its course of legislative beneficence assailed on all hands. Whilst it was extending the mercy of a small pension to the ag'ed who have won it by a life of toil, Liberalism was assailed with blind fury by the Tory party in front. Incredible as it may seem, it was attacked with spiteful savagery by Socialists on the flank. We are not dis- couraged, and we mean to go on. And even if we fail we shall have spared many thousands of old workmen in the land the cruel alternative of the workhouse or priva- tion. We shall have saved the millions of workmen in this country from the torment and waste of vitality which come from the constant dread that ill-health or unemploy- ment may leave them and those dependent on them face to face with hunger. We in Britain shall have struck starvation for ever from the dark category of evils with which honest men and women are beset. I hope we shall have done something to promote the divine cause of peace on earth and goodwill amongst men, which is an essential step in the redemption of the human race from the ills that afflict it. SOCIAL REFORM 59 And if, through the mischievous obstruction of an irre- sponsible and selfish Assembly, we fail to establish liberty of conscience in every State school in the land, to extend a larger measure of protection to the homes of the people against the inroads of drink, to equip our municipal insti- tutions with the power of improving the homes in which the children of the nation are reared, to extend equal rights of citizenship to all those who contribute their best of strength and skill to the common stock, then we shall invite the electorate of this country to arm us with the authority to use the most effective means .for removing this senseless obstruction from the path of progress. Whatever befalls Liberalism at the next election, I feel assured that with such a record as this the democracy will turn again with renewed hope and confidence to the great party which served it so loyally, so effectively, and so jealously in the days of its power. THE PEOPLE'S BUDGET House of Commons, April, 29, 1909. Before I explain the proposals which I shall submit for the liquidation of this year's deficit of ;£i 5,762,000, I must invite hon. Members to join me in taking a wider survey of our financial responsibilities at this moment. It must be patent to every one cognisant of the facts that fresh liabilities must be incurred next year in connection with the Navy and with social reform. These are commit- ments to which we are pledged, and from which no Government can honourably escape, and if I were to ignore these liabilities altogether in arranging my finance for this year I might, it is true, lighten my burden very considerably, but I should be guilty of an unbusiness-like short-sightedness which would be highly culpable. I cannot conceive anything which would be more dis- turbing to trade than the uncertainty which must ensue if it were thought that, in addition to the taxes for the year, new and unknown taxes were looming in the near future. It is far better, as well as bolder, therefore, that we should frankly examine the financial outlook and make provision not merely for the ascertained needs of the year, but for the further and increased liabilities which are not merely in sight, but to which the Government and Parliament are definitely and irrevocably committed. Prudence seems to me to dictate such a policy, and although it may seem 60 THE PEOPLE'S BUDGET 61 as if we were needlessly anticipating troubles of the morrow, still those troubles are inevitable, and it is there- fore better to provide against them without delay. This is the course which would be adopted in any commercial undertaking conducted on ordinary business lines. Let us, therefore, examine our commitments. First of all comes the Navy. Up to the present we have been con- sidering the Naval problem from the point of view of merely spending money. I shall now have to invite hon. Members and the country to consider the Naval problem from the equally essential but less agreeable standpoint of paying. Spend- ing is pleasant, paying is irksome ; spending is noble, pay- ing is sordid. And it is on me falls the labour of making the arrangements for the less attractive part of the Naval programme. Let us see what it means. The building of two lf Dreadnoughts " represents nearly a penny a year on the income tax during the two years of construction. The construction of four M Dread- noughts," therefore, represents nearly 2d., and of eight 11 Dreadnoughts " nearly 4d., added on to the income tax. It is my business as Finance Minister to consider all these programmes which add to the expenditure of the country in the terms of new taxes. In estimating what the Naval programme is likely to cost the Chancellor of the Ex- chequer next year I must, of course, premise that it is quite impossible with even approximate accuracy to fore- cast twelve months ahead what the expenditure of any Department of the Government is likely to be ; at any rate, so I am assured. But there are one or two facts which lead to the in- evitable conclusion that we must look forward to a con- siderable increase in our Naval expenditure next year. Let us, first of all, examine the prospect, if the programme this year is confined to four " Dreadnoughts. " Then I will examine what it will mean if we have eight "Dread- noughts." The Vote taken this year in respect of building 62 BETTER TIMES these four " Dreadnoughts " will cover building opera- tions in the case of two " Dreadnoughts " for nine months, in the case of the second instalment for only six months, and the first few months' expense upon these huge machines is, I am told, the least burdensome. But next year the Treasury will have to find money for paying the whole cost of construction of four " Dreadnoughts " during an unbroken period of twelve months. This, in addition to an eleven months' building on the two " Dread- noughts " which were laid down some time ago, will bring up the Estimates of the year for Naval construction to a figure which is considerably above even the increased estimate of this year. But if, in addition to these four M Dreadnoughts," we are to have a twelve months' expen- diture upon still four more, the Naval Bill for the year will attain very serious and grave dimensions indeed, at which the taxpayer may well shudder. I am not putting these considerations forward in any sense as reasons why we should not incur this expenditure. Whatever be the cost, no great country can afford to shirk its responsibilities for the defence of its coasts against every possible invader, and I am not dwelling on the magnitude of the burden which is cast upon us in order to suggest that we should in the slightest degree lighten the load by evading any part of our obligations. I have simply invited the Committee to consider the prospect in front of them, not with a view to urging them to run away from the imperative duty which is thrust upon them of pro- viding for the defence of the country, but rather in order that they might follow me in facing that prospect, and make beforehand all the provision which wise and reso- lute forethought shall deem adequate for the occasion. We all value too highly the immunity which this country has so long enjoyed from the horrors of an invaded land to endanger it for lack of timely provision. That immunity at its very lowest has been for genera- tions, and still is, a great national asset. It has un- THE PEOPLE'S BUDGET 63 doubtedly given us the tranquillity and the security which have enabled us to build up our great national wealth. It is an essential part of that wealth. At the highest it means an inviolable guarantee for our national freedom and independence. Nay, more. Many a time in comparatively recent history it has been the citadel and the sole guarantee which have saved the menaced liberties of Europe from an impending doom. I can assure hon. Members if they still have any suspicion lurking in their minds that any Member of this Govern- ment or of this party proposes in any ill-judged fit of parsi- mony to risk even for an hour so precious a national treasure, they can dismiss those unworthy suspicions entirely from their minds. Such a stupendous act of folly would, in the present temper of nations, not be Liberalism, but lunacy. We do not intend to put in jeopardy the naval supremacy which is so essential not only to our national existence, but, in our judgment, to the vital interests of Western civilisation. But, in my judgment, it would also be an act of criminal insanity to throw away ^8,000,000 of money which is so much needed for other purposes on building gigantic flotillas to encounter mythical Armadas. That is why we propose only to incur this enormous expen- diture when the need for it arises. We must ensure the complete security of our shores against all real dangers, but, rich nation as we are, we cannot afford to build navies against nightmares. It is much too expensive an operation. To throw away millions of money when there is no real need for it purely to appease an unreasoning panic would be to squander resources essential to our safety in time of real danger. It is the business of a Government to follow with calm- ness, as well as with courage, the middle path between panic and parsimony, which is the only safe road to national security. However, as it may be necessary to make arrangements for laying down all the eight " Dread- noughts " on 1 st April, 1910, so as to complete them by 64 BETTER TIMES April, 1912, the financial proposals which I shall submit to the Committee will be of such a character that we can pay for them without resorting either to additional taxa- tion or to the vicious expedient of a loan. Should it on the other hand be discovered that our fears are groundless, and that this precipitate "Dreadnought " building is un- necessary, then the money will find its uses either in further endowment of our social programme for the benefit of the masses of the people or in giving the much-promised relief to the local ratepayer. He is entitled to consideration in respect of the increased expenditure imposed upon him by the late Government and by the present Government, more especially in educational matters. He has also been very hard pressed owing to the increased costliness of maintaining the roads, attributable to the develop- ment in mechanical traction. I am not sure that it is altogether a fiscal question. It has almost become a great social question ; for the municipalities are at the end of their resources, and their work is almost at a standstill in many of these areas, because they cannot afford to spend what is absolutely necessary on their development. The local ratepayer has been promised consideration by succes- sive Governments, and he is surely entitled to get it. I think I can safely say more : the financial proposals which I shall lay before the House will enable me to make good that promise. Now I come to the consideration of the social problems which are urgently pressing for solution — problems affect- ing the lives of the people. The solution of all these ques- tions involves finance. What the Government have to ask themselves is this : Can the whole subject of further social reform be postponed until the increasing demands made upon the National Exchequer by the growth of arma- ments have ceased? Not merely can it be postponed, but ought it to be postponed ? Is there the slightest hope that if we deferred consideration of the matter we are likely THE PEOPLE'S BUDGET 65 within a generation to find any more favourable moment for attending to it? And we have to ask ourselves this further question. If we put off dealing- with these social sores, are the evils which arise from them not likely to grow and to fester, until finally the loss which the country sustains will be infinitely greater than anything it would have to bear in paying the cost of an immediate remedy ? There are hundreds of thousands of men, women, and children in this country now enduring hardships for which the sternest judge would not hold them responsible ; hard- ships entirely due to circumstances over which they have not the slightest command ; the fluctuations and changes of trade, even of fashions ; ill-health and the premature breakdown or death of the breadwinner. Owing to events of this kind, all of them beyond human control — at any rate beyond the control of the victims — thousands, and I am not sure I should be wrong if I said millions, are pre- cipitated into a condition of acute distress and poverty. How many people there are of this kind in this wealthy land the figures as to Old Age Pensions have thrown a very unpleasant light upon. Is it fair, is it just, is it humane, is it honourable, is it safe to subject such a multi- tude of our poor fellow-countrymen and countrywomen to continued endurance of these miseries until nations have learnt enough wisdom not to squander their resources on these huge machines for the destruction of human life? I have no doubt as to the answer which will be given to that question by a nation as rich in humanity as it is in store. Last year, whilst we were discussing the Old Age Pen- sions Bill, all parties in this House recognised fully and freely that once we had started on these lines the case for extension was irresistible. The Leader of the Opposition, in what I venture to regard as probably the most notable speeches he has delivered in this Parliament — I refer to his speech on the third reading of the Old Age Pensions Bill and the speech he delivered the other day on the question of unemployment— recognised quite boldly that whichever 66 BETTER TIMES party was in power provision would have to be made in some shape or other for those who are out of work through no fault of their own and those who are incapacitated for work owing to physical causes for which they are not responsible. And there was at least one extension of the Old Age Pensions Act which received the unanimous assent of the House, and which the Government were pressed to give, not merely a Parliamentary but a statu- tory pledge to execute. I refer to the proposal to extend the pension to the meritorious pauper. During the discussion on the Old Age Pensions Bill in the House of Commons, several Amendments were moved with a view to extending the benefits of the Act to the septuagenarian pauper, and I think it was generally felt in all quarters of the House that it was rather hard upon those who had managed up to a ripe old age by a life of hard work to keep off the Poor Law, and who only finally resorted to parochial relief when their physical powers utterly failed them — it was rather hard they should be still kept to their miserable and pauper-tainted allowance of 2S. 6d. a week, while their more fortunate but not more deserving neighbours were in receipt of an honourable State pension of 5s. a week, and often of 10s. a week. That cannot possibly stand. It was condemned by all, and could only be defended by the Government on the ground of stern financial necessity. With the unanimous assent of the House of Commons a purely provisional character was given to the pauper disqualification, and, unless something is done, it automatically comes to an end on the 1 st January, 191 1, and all these poor old people, numbering between 200,000 and 300,000, will become chargeable to the Pension Fund. I cannot recommend Parliament to undertake the whole financial burden of putting such a transaction through. It would put too heavy a charge upon the Exchequer, and there is no reason why it should fall entirely upon Imperial funds. At the present moment these paupers cost some- THE PEOPLE'S BUDGET 67 thing like ^2,000,000 to the local rates of the country. If we received a contribution from local funds which would be substantially equivalent to the relief which would be afforded by withdrawing such a large number of paupers from the rates, then something could be done to remove this crying hardship. My right hon. Friend the President of the Local Government Board and I have entered into negotiations with some representatives of local authorities with a view to effecting an arrangement on this basis, and although we have not yet arrived at any decision as to the amount of the national contribution, we are very hopeful of being able to enter into a bargain which will be satisfac- tory to all parties concerned. I do not think it would be desirable for me at this stage to give any figures — other- wise it might embarrass us in the negotiations — but it is my intention in the financial proposals which I shall submit to the House, I am afraid not this year, but probably next year, to make provision which will enable us with the assis- tance of the local authorities to raise over 200,000 old people from the slough of pauperism to the dignity and the comparative comfort of State pensioners. That is a contingent liability which I am bound to take full note of in arranging my finance, because it is perfectly clear we cannot impose taxation this year and next year impose new taxation for proposals of which at the present moment we have full cognisance. But still, all those who have given any thought and study to this question must realise that the inclusion of the septuagenarian pauper is but a very small part of the problem which awaits solution — a problem of human suffering which does not become any easier of solution by postponement. On the contrary, the longer we defer the task of grappling with it the more tangled and the more desperate it becomes. We are pledged, definitely pledged, by speeches from the Prime Minister given both in the House and outside, to supplementing our Old Age Pensions proposals. How is that to be done? f 2 68 BETTER TIMES It has been suggested that we should reduce the age limit. I am emphatically of opinion that that is tlie most improvident and ineffective method of approaching the question, and that it would be the line upon which advance would be slowest and most difficult, and which would achieve the least hopeful results. For the moment it is financially impracticable. A reduction of the age limit to 65 would cost an addi- tional 15 or 20 millions a year to the Exchequer. I will not say that is beyond the resources of a rich country like this, but it is much the most wasteful way of dealing with the question, for whilst it would afford relief to many thousands and hundreds of thousands probably who neither need nor desire it, and whose strength is probably more happily and profitably employed in labour, it would leave out of account altogether far and away the most distressing and the most deserving cases of poverty. What are the dominating causes of poverty amongst the industrial classes? For the moment I do not refer to the poverty which is brought about by a man's own fault. I am only alluding to causes over which he has no control. Old age, premature breakdown in health and strength, the death of the breadwinner, and unemployment due either to the decay of industries and seasonable demands, or to the fluctuations or depressions in trade. The distress caused by any or either of these causes is much more deserving of immediate attention than the case of a healthy and vigorous man of 65 years of age, who is able to pursue his daily avocation, and to earn without undue strain an income which is quite consider- able enough to provide him and his wife with a comfort- able subsistence. When Bismarck was strengthening the foundations of the new German Empire one of the very first tasks he undertook was the organisation of a scheme which insured the German workmen and their families against the worst evils arising from these common accidents of life. And THE PEOPLE'S BUDGET . 69 a superb scheme it is. It has saved an incalculable amount of human misery to hundreds of thousands and possibly millions of people. Wherever I went in Germany, north or south, and whomever I met, whether it was an employer or a work- man, a Conservative or a Liberal, a Socialist or a Trade Union leader — men of all ranks, sections and creeds, with one accord joined in lauding the benefits which have been conferred upon Germany by this beneficent policy. Several wanted extensions, but there was not one who wanted to go back. The employers admitted that at first they did not quite like the new burdens it cast upon them, but they now fully realised the advantages which even they derived from the expenditure, for it had raised the standard of the workman throughout Germany. By removing that element of anxiety and worry from their lives it had improved their efficiency. Benefits which in the aggregate amounted to 40 millions a year were being distributed under this plan. When I was there the Government were contemplating an enlargement of its operations which would extend its benefits to clerks and to the widows and orphans of the industrial popula- tion. They anticipated that when complete the total cost of the scheme would be 53 millions a year. Out of the present benefits of 40 millions the Government contribute something under 3 millions a year. Out of the 53 millions they were looking forward to having to find 5 millions. I know it is always suggested that any approval of the German scheme necessarily involves a condemnation of the Act of last year. That is not so. The Act of last year constitutes the necessary basis upon which to found any scheme based on German lines. It would be quite impossible to work any measure which would involve a contribution from men who are either already 70 years of age or approaching the confines of that age as a condi- tion precedent to their receiving any benefits. It was therefore essential that people who had attained this great 7o BETTER TIMES age should be placed in a totally different category. But that is not a reason why the young and vigorous who are in full employment should not be called upon to contribute towards some proposals for making provision for those accidents to which we are all liable, and always liable. At the present moment there is a network of powerful organisations in this country, most of them managed with infinite skill and capacity, which have succeeded in in- ducing millions of workmen in this country to make some- thing like systematic provision for the troubles of life. But in spite of all the ability which has been expended upon them, in spite of the confidence they generally and deservedly inspire, unfortunately there is a margin of people in this country amounting in the aggregate to several millions who either cannot be persuaded or perhaps cannot afford to bear the expense of the systematic con- tributions which alone make membership effective in these great institutions. And the experience of this and of every other country is that no plan or variety of plans short of an universal compulsory system can ever hope to succeed in coping adequately with the problem. In this country we have trusted until recently to voluntary effort, but we found that for old age and accidents it was insuffi- cient. In Belgium they have resorted to the plan of granting heavy subsidies to voluntary organisations, and they have met with a certain amount of success. But whether here or in Belgium, or in any other land, success must be partial where reliance is absolutely placed upon the readi- ness of men and women to look ahead in the days of abounding health and strength and buoyancy of spirit to misfortunes which are not even in sight, and which may be ever averted. The Government are now giving careful consideration to the best methods for making such a provision. We are investigating closely the plans adopted by foreign countries, and I hope to circulate Papers on the point THE PEOPLE'S BUDGET 71 very soon. We have put ourselves into communication with the leaders of some of the principal friendly societies in the country with a view to seeking their invaluable counsel and direction. We could not possibly get safer or more experienced advisers. We are giving special attention to the important reports of the Poor Law Com- mission, both Majority and Minority, which advise that the leading principle of Poor Law legislation in future should be the drawing of a clear and definite line between those whose poverty is the result of their own misdeeds and those who have been brought to want through mis- fortune. All I .am in a position now to say is that, at any rate, in any scheme which we may finally adopt we shall be guided by these leading principles or considerations. The first is that no plan can hope to be really comprehensive or conclusive which does not include an element of com- pulsion. The second is that for financial as well as for other reasons, which I do not wish to enter into now, success is unattainable in the near future, except on the basis of a direct contribution from the classes more imme- diately concerned. The third is that there must be a State contribution substantial enough to enable those whose means are too limited and precarious to sustain adequate premiums to overcome that difficulty without throwing undue risks on other contributors. The fourth, and by no means the least important, is that in this country, where benefit and provident societies represent such a triumph of organisation of patience and self- government, as probably no other country has ever wit- nessed, no scheme would be profitable, no scheme would be tolerable, which would do the least damage to those highly beneficent organisations. On the contrary, it must be the aim of every well-considered plan to encourage, and, if practicable, as I believe it is, to work through them. That is all I propose to say on that particular subject 72 BETTER TIMES at this juncture. I have gone into it at this length merely to indicate that here also is a source of contingent liability which I am bound to take into account in my financial scheme. In this country we have already provided for the aged over 70. We have made pretty complete provision for accidents. All we have now left to do in order to put ourselves on a level with Germany — I hope our com- petition with Germany will not be in armaments alone — is to make some further provision for the sick, for the invalided, for widows and orphans. In a well-thought-out scheme, involving contributions from the classes directly concerned, the proportion borne by the State need not, in my judgment, be a very heavy one, and is well within the compass of our financial capacity without undue strain upon the resources of the country. The Government are also pledged to deal on a com- prehensive scale with the problem of unemployment. The pledges given by the Prime Minister on behalf of the Government are specific and repeated. I do not wish to encourage any false hopes. Nothing that a Govern- ment can do, at any rate with the present organisation of society, can prevent the fluctuations and the changes in trade and industry which produce unemployment. A trade decays, and the men who are engaged in it are thrown out of work. We have had an illustration within the last few days, to which Lord Rosebery has so oppor- tunely called our attention, in the privation suffered by the horse cabdriver owing to the substitution of mechanical for horse traction. That is only one case out of many constantly happening in every country. Then there are the fluctuations of business, at one moment filling a work- shop with orders which even overtime cannot cope with, and at another moment leaving the same workshops with rusting machinery for lack of something to do. Trade has its currents, and its tides, and its storms and its calms like the sea, and, like the sea, it seems to be as little under human control, or, at any rate, as little THE PEOPLE'S BUDGET 73 under the control of the victims of these changes; and to say that you can establish by any system an absolute equilibrium in the trade and concerns of the country is to make a promise which no man of intelligence would ever undertake to honour. You might as well promise to smooth out the Atlantic Ocean. But still, it is poor seamanship that puts out to sea without recognising its restlessness, and the changefulness of the weather, and the perils and suffering thus produced. These perils of trade depression come at regular intervals, and every time they arrive they bring with them an enormous amount of distress. It is the business of statesmanship to recog- nise that fact, and to address itself with courage and resolution to provide against it. Now, I have a word to say about the proposals of the Government to meet this state of things. The Poor Law Commission have recently called attention to the import- ance of endeavouring to devise some effective scheme of insurance against unemployment. The question is one which bristles with difficulties, and the Commission put forward no definite scheme of their own, but they expressly approved the principle, and recommended that immediate steps should be taken to devise a workable scheme. My right hon. friend the President of the Board of Trade has anticipated this recommendation, and the Board of Trade have been closely engaged for the last six months in en- deavouring to frame and develop a scheme which, while encouraging the voluntary efforts now being made bv trade unions to provide out-of-work benefit for their members, will extend the advantage of insurance to a very much larger circle of workmen, including unskilled labourers. I do not now speak of the unemployment due to infirmity or personal failings or of unemployment due to labour disputes, but to that unemployment, by far the larger part of the evil, which occurs as a regular feature, varying with seasons and cycles, in important groups of trades ; which renders the position of the worker in such 74 BETTER TIMES trades unusually precarious ; and which can only be dealt with, and ought clearly to be dealt with, by a process of spreading wages and of averaging risks and fluctuations. I do not propose to enter into the details of the Board of Trade scheme, which is, however, far advanced, and for which the national system of labour exchanges promised in the King's Speech will afford the necessary machinery. We recognise in this matter that we must walk with caution, and that it will be best to begin with certain groups of trades peculiarly liable to the fluctuations I have referred to and in other respects suitable for insur- ance, rather than to attempt to cover the entire area of industry. The Royal Commission were emphatic in re- commending that any scheme of unemployment insur- ance should have a trade basis, and we propose to adopt this principle. Within the selected trades, however, the scheme will apply universally to all adult workers. Any insurance scheme of this kind must necessarily require contributions from those engaged in the insured trades, both as employers and employed; but we recognise the necessity of supplementing these contributions by a State grant and guarantee. W T e cannot, of course, attempt to pass the necessary Bill to establish unemployment insurance during the present Session. But the postpone- ment will not involve any real delay, for the establishment of labour exchanges is a necessary preliminary to the work of insurance, and this will occupy time which may also be advantageously employed in consulting the various interests upon the details of the scheme and in co-ordin- ating its financial provisions with the machinery of invalidity and other forms of insurance. So much for the provision which we hope to be able to make for those who, under the changing conditions which are inevitable in trade and commerce, are tempor- arily thrown out of employment. We do not put this forward as a complete or an adequate remedy for all the evils of unemployment, and we do not contend that when THE PEOPLE'S BUDGET 75 this insurance scheme has been set up and financed the State has thereby done all in its power to help towards solving the problem. After all, it is infinitely better, in the interests both of the community and of the unem- ployed themselves, that the latter should be engaged on remunerative work, than that they should be drawing an allowance from the most skilfully contrived system of insurance. This country is small — I suppose it is the smallest great country in the world — but we have by no means exhausted its possibility for healthy and produc- tive employment. It is no part of the function of a Government to create work ; but it is an essential part of its business to see that the people are equipped to make the best of their own country, are permitted to make the best of their own country, and, if necessary, are helped to make the best of their own country. A State can and ought to take a longer view and a wider view of its investments than individuals. The re- settlement of deserted and impoverished parts of its own territories may not bring to its coffers a direct return which would reimburse it fully for its expenditure ; but the indirect enrichment of its resources more than compen- sates it for any apparent and immediate loss. The indi- vidual can rarely afford to wait, a State can ; the individual must judge of the success of his enterprise by the testi- mony given for it by his bank book ; a State keeps many ledgers, not all in ink, and when we wish to judge of the advantage derived by a country from a costly experi- ment we must examine all those books before we venture to pronounce judgment. Any man who has crossed and re-crossed this country from north to south and east to west must have been perplexed at finding that there was so much waste and wilderness possible in such a crowded little island. There are millions of acres in this country which are more stripped and sterile than they were, and providing a living for fewer people than they did even a thousand years ago — 76 BETTER TIMES acres which abroad would either be clad in profitable trees or be brought even to a higher state of cultivation. We want to do more in the way of developing the re- sources of our own country. There is much to be done for the re-settlement of neglected and forgotten areas in Britain. We have been spending for the last two or three years ^200,000 to ^300,000 a year upon work which 1 would not like to discourage. I have no doubt that it has relieved a great deal of distress, and that it is the best thing that could be done as a temporary shift and expedient, and all thanks and gratitude are due to the people who have devoted their time, leisure, and labour in expending the money in the most profitable way possible, but still it is a wasteful expenditure. Some- times, I have no doubt, some good is done, but it is wasteful whenever you create work for the sake of creating it. We think that the money could be spent much more usefully and profitably, and with better direction, so long as we take a wider view of our responsibility in this matter. This brings me straight to the question of afforestation. There is a very general agreement that some steps should be taken in the direction, I will not say of afforesting, but of re-afforesting the waste lands of this country. Here, again, we are far behind every other civilised country in the world. I have figures here on this point which are very interesting. In Germany, for instance, out of a total area of 133,000,000 acres, 34,000,000 or nearly 26 per cent, are wooded; in France, out of 130,000,000 acres, 17 per cent. ; even in a small and densely populated country such as Belgium 1,260,000 acres are wooded, or 17 per cent., out of a total area of 7,280,000 acres. Again, in the Netherlands and Denmark, out of total areas of 8 and 9! million acres respectively, over 600,000 acres, or between 7 and 8 per cent., are wooded. In the United Kingdom, on the other hand, out of 77,000,000 acres, only 3,000,000, or 4 per cent., are under wood. THE PEOPLE'S BUDGET 77 Sir Herbert Maxwell, who has made a study of this question for a good many years, and whose moderation of statement is beyond challenge, estimates that, in 1906, "eight millions were paid annually in salaries for the administration, formation and preservation of German forests, representing the maintenance of about 200,000 families, or about one million souls," and that, "in work- ing up the raw material yielded by the forests, wages were earned annually to the amount of 30 millions sterling, maintaining about 600,000 families, or three million souls." Anyone who will take the trouble to search out the Census Returns will find out that the number of people directly employed in forest work in this country is only 16,000. And yet the soil and the climate of this country are just as well adapted for the growth of marketable trees as are those of the States of Germany. I am disposed to agree with people who contend that afforestation is not particularly well adapted to the provision of employment on any large scale for the kind of labourer who is thrown out of work by the fluctuations of trade in the towns, and that its real utility will be rather found (to use the phrase of the hon. Member for Merthyr) " in the extension of the area of employment." It will be serviceable in providing employment in the rural districts during that inclement season of the year when work is least abundant. It would also afford an excellent adjunct to a system of small hold- ings and allotments. Recently we have been favoured with a striking Report of a Royal Commission very ably presided over by my hon. friend the Member for Cardiff. A perusal of the names attached to that Report will secure for it respectful and favourable consideration. It outlines a very compre- hensive and far-reaching scheme for planting the wastes of this country. The systematic operation which the Commission recommend is a gigantic one, and before the Government can commit themselves to it in all its details, 78 BETTER TIMES it will require very careful consideration by a body of experts skilled in forestry. I am informed by men whom I have consulted, and whose opinion on this subject I highly value, that there is a good deal of preliminary work which ought to be undertaken in this country before the Government could safely begin planting on the large scale indicated in that Report. I am told that experiments ought to be made, so as to test thoroughly the varying conditions of climate and soil and the best kind of trees and methods of planting to meet those variations. I am also told that we cannot command the services in this country of a sufficient number of skilled foresters to direct planting. I am advised, and, personally, I am disposed to accept that counsel as the advice of prudence, that the greater haste in this matter will mean the less speed, and that to rush into planting on a huge scale, without first of all making the necessary experiments, organising a trained body of foresters, and taking all other essential steps to secure success when you advance, would be to court disaster, which might discourage all future attempts. I will tell the Committee how I propose that this subject should be dealt with; but, before I do so, I have something more to say about proposals for aiding in the development of the resources of our own country. The State can help by instruction, by experiment, by organ- isation, by direction, and even, in certain cases which are outside the legitimate sphere of individual enterprise, by incurring direct responsibility. I doubt whether there is a great industrial country in the world which spends less money on work directly connected with the develop- ment of its resources than we do. Take, if you like, and purely as an illustration, one industry alone — agriculture — of all industries the most important for the permanent well-being of any land. Examine the Budgets of foreign countries — we have the advantage in other directions — but examine and compare them with our own, and hon. Members will be rather ashamed at the contrast between THE PEOPLE'S BUDGET 70 the wise and lavish generosity of countries much poorer than ours and the short-sighted and niggardly parsimony with which we dole out small sums of money for the en- couragement of agriculture in our country. We are not getting out of the land anything like what it is capable of endowing us with. Of the enormous quantity of agricultural and dairy produce and fruit, and of the timber imported into this country, a considerable portion could be raised on our own lands. On this, hon. Members opposite and ourselves will agree. The only difference is as to the remedy. In our opinion, the remedy which they suggest would make food costlier and more inaccessible for the people; the remedies which we pro- pose, on the other hand, would make food more abundant, better, and cheaper. What is It we propose? — and, let the Committee observe, I am only dealing with that part of the problem which affects finance. I will tell the House therefore, briefly, what I propose doing in regard to this and all kindred matters I have dwelt upon. There is a certain amount of money — not very much — spent in this country in a spasmodic kind of way on what I call the work of national development — in light railways, in harbours, in indirect but very meagre assistance to agriculture. I propose to gather all these grants together into one Development Grant, and to put in this year an additional sum of ^"200,000. Legislation will have to be introduced, and I will then explain the methods of administration and the objects in greater detail, but the grant will be utilised in the promotion of schemes which have for their purpose the development of the resources of the country. It will include such objects as the institution of schools of forestry, the pur- chase and preparation of land for afforestation, the setting up of a number of experimental forests on a large scale, expenditure upon scientific research in the interests of agriculture, experimental farms, the improvement of stock — as to which there have been a great many demands from 80 BETTER TIMES people engaged in agriculture — the equipment of agencies for disseminating agricultural instruction, the encourage- ment and promotion of co-operation, the improvement of rural transport so as to make markets more accessible, the facilitation of all well-considered schemes and measures for attracting labour back to the land by small holdings or reclamation of wastes. Every acre of land brought into cultivation, every acre of cultivated land brought into a higher state of culti- vation, means more labour of a healthy and productive character. It means more abundant food — cheaper and better food for the people. The sum which I propose to set aside for these large and diverse purposes may seem disproportionate, especially as a good deal of capital expenditure will necessarily be invested in the carrying out more especially of the experi- ments. For the purpose of afforestation schemes, at any rate in the earlier stages, when the expenditure will be particularly heavy, I propose that borrowing powers should be conferred upon the Commission directing the distribution of the grant, though I intend to avoid the necessity of resort to loans in connection with the capital expenditure required for other parts of the scheme. I should hope to attain this end by what may at first sight appear a proposal of a more drastic character. Hitherto all surpluses due either to unexpected accre- tions to the revenue or savings upon the Estimates have passed automatically into the old Sinking Fund for the liquidation of debt. I propose that all these unanticipated accretions and economies shall in future pass into the Development Fund, so as to constitute a reserve for the purpose of money to be spent on the recommendations of the Commissioners, but under the direction of Parliament, on such objects as I have too compendiously sketched. The days of surpluses are not quite gone, and I sincerely hope, although the omens are for the moment bad, that THE PEOPLE'S BUDGET 81 the days of economising in public Departments are not over. Last year the various Departments saved over two millions, and I feel confident that we shall not look in vain for a similar spirit of cautious and conscientious dealing- with public money in the course of the coming- years. We have, more especially during the last 60 years, in this country accumulated wealth to an extent which is almost unparalleled in the history of the world, but we have done it at an appalling waste of human material. We have drawn upon the robust vitality of the rural areas of Great Britain, and especially of Ireland, and spent its energies recklessly in the devitalising atmosphere of urban factories and workshops as if the supply were inexhaust- ible. We are now beginning to realise that we have been spending our capital, and at a disastrous rate, and it is time we should make a real, concerted, national effort to replenish it. I put forward this proposal, not a very extravagant one, as a beginning. It would be better that I should in this connection inform the House of another project which I shall have to submit in detail to its judgment later on in the course of the Session, but as it involves a substantial addition to the financial burdens of the year, I have to outline its general character in my Budget statement. It also has an in- direct, but important, bearing on the question of providing useful and not purposeless employment in times of de- pression. I propose that a beginning should be made this year with a scheme for dealing with the new, but increas- ingly troublesome, problem of motor traffic in this country. We are far ahead of all other European coun- tries in the number of motor vehicles upon our roads. We have at least three times as many as France and more than four times as many as Germany. And I am informed by those best able to judge, that to-day among the products of our factories are some of the best cars procurable in the world, both as regards the comparative G 82 BETTER TIMES perfection of the more costly vehicles and the value given for the prices asked for those designed for popular use. I therefore look forward to a great future for this industry, and I am the last to wish to hinder its develop- ment or be responsible for proposals which would be in any way hostile to its interests. Quite the reverse. I am anxious to be helpful to its growth and prosperity. But I cannot help feeling that this problem is urgent, and calls for immediate attention. Any man who takes the trouble to consider the damage which is done to the roads of this country, often by men who do not contribute — or perhaps I ought to put it in another way, who have not been given the opportunity of contributing to the upkeep of the roads they help so effectively to tear up — the consequent rapid increase in the expense of road maintenance, the damage done, if not to agriculture, at least to the ameni- ties of rural life by the dust clouds which follow in the wake of these vehicles, above all, the appalling list of casualties to innocent pedestrians, and especially to children, must come to the conclusion that this is a ques- tion which demands immediate notice at the hands of the Central Government. The question of road construction, which was at one time deemed to be part of the essential development of the country, seemed to have been almost finally disposed of by the railways, but the advent of the motor has once more brought it to the front. It is quite clear that our present system of roads and of road-making is inadequate for the demands which are increasingly made upon it by the new form of traction. Roads are too narrow, corners are too frequent and too sharp, high hedges have their dangers, and the old metalling, admir- ably suited as it was to the vehicles we were accustomed to, is utterly unfitted for the motor-car. If there be any truth at all in Ruskin's assertion that "all social progress resolves itself into the making of new roads," it must be admitted that we have been lamentably deficient. The State has for a very long period done THE PEOPLE'S BUDGET 83 nothing at all for our roads. I believe that no main road has been made out of London for 80 years. We have no central road authority. The roads of England and Wales are administered by 30 metropolitan authorities (including the London County Council and the City of London Cor- poration), 61 county councils, 326 county and non-county borough councils, and 1,479 urban and rural district councils. The Great North Road, our greatest historic and national highway from London to Carlisle, is under no fewer than 72 authorities, of whom 46 are actually engaged in maintaining it. Among those are such autho- rities as the Kirklington Urban District Council, which controls one mile, and the Thirsk Rural District Council, which is responsible for 1 mile 1,120 yards in one place and 2 miles 200 yards in another ! Both the general public and motorists are crying out for something to be done, and we propose to make a real start. How the funds will be raised for the purpose it will be my duty later on to explain ; the only indication I shall give now is that the brunt of the expense at the beginning must be borne by motorists, and to do them justice they are willing, and even anxious, to subscribe handsomely towards such a purpose, so long as a guarantee is given in the method and control of the expenditure that the funds so raised will not merely be devoted exclusively to the improvement of the roads, but that they will be well and wisely spent for that end. For that reason we propose that the money shall be placed at the disposal of a central authority, who will make grants to local authorities for the purpose of carrying out well-planned schemes which they have approved for widening roads, for straightening them, for making devia- tions round villages, for allaying the dust nuisance ; and I should also propose that power should be given to this central authority to set aside a portion of the money so raised for constructing, where they think it necessary and desirable, absolutely new roads. Power will be given them G 2 84 BETTER TIMES not merely to acquire land for that purpose, but also for the acquisition of rights over adjoining lands, so as to enable them eventually to bring into being new sources of revenue by taking full advantage of the increment and other benefits derived from the new easements they will be creating for the public. That is all I have to say with regard to expenditure, and I nov/ come to the question of how I have to meet it. Once more I want to make it clear before I dismiss this part of the subject, that the expenditure undertaken out of the fund must be directly referable to work done in connection with the exigencies of the motor traffic of the country. Although this is expenditure which will be in- curred in the course of the present year, and is, therefore, not in the same category as the prospective liabilities which I have hitherto sketched, I do not think it incumbent on me to add this new liability to the ordinary deficit for the year, and I think the House will see that I have a sufficient reason for not doing so. I propose to deal with this expenditure by raising a special fund for the purpose, and it is therefore not quite in the position of being part of the current expenditure of the year. The expenditure will be strictly limited by the revenue we succeed in raising. I have outlined what I deem to be some of our more pressing requirements in the near future. I have now to consider in what way my proposals will affect the balance sheet of the current year. For this purpose I shall leave out of account for the moment the expenditure upon motor roads, since it will, as I have indicated, be covered by and limited to the produce of certain special sources of revenue. Liabilities in respect of schemes of insurance against unem- ployment and other contingencies affecting the working classes will not mature within the current year, but for labour exchanges ^100,000 will be required, mainly for the pro- vision of buildings. Under the head of development ^200,000 will, as I have explained, be set aside for the first year's grant to the proposed fund. These two items THE PEOPLE'S BUDGET 85 together give a total of ^300,000, to which must be added a sum of ^50,000 for a purpose which will shortly become apparent, making a total addition of ^350,000 to the esti- mated expenditure. If this is added to the estimated deficit of ^15,762,000 on the basis of present taxation, and of the Estimates already presented to Parliament, the amount which must be found, either by further taxation or other means, is increased to ^16,112,000, or (allowing a margin for contingencies) to, say, 16J millions. It is important that the Committee should recollect that during the first three years of the present administration taxes amounting in the aggregate to something over 7J millions a year were taken off*. In addition to that, provi- sion has been made for a net reduction of Dead-Weight Debt to the extent of no less than 47^ millions, and of our aggregate capital liabilities to the extent of 42J millions. This means a saving to the country in respect of interest of over a million pounds a year, which, if it had been directed to relieving the taxpayers' burdens instead of to increasing the Sinking Fund, would have enabled the total remission of taxation to have been raised to 8J millions — a sum practically equivalent to the annual cost of the Old Age Pensions measure of the Government. Another satisfactory element in our Capital Account is to be found in the fact that under the head of " Other Capital Liabilities " the repayments will, in the present financial year, for the first time since the introduction of the system of naval and military works loans, exceed the new borrowings. The estimated borrowings on capital account for 1908-9 were ^2,785, 000. The actual borrow- ings were ^2,636,000, of which ^"1,300,000 was for tele- phone purposes, ^859,000 for naval works, and ^270,000 for military works, while the amount applicable in the year to repayment of principal was ^2,279,000. The esti- mated borrowings for the current year are only ^1,795,000, of which ^1,300,000 will be required for telephone works, while the amount applicable to repay- 86 BETTER TIMES ment of principal is estimated at ^2, 497,000. The borrow- ings under the Naval and Military Works Acts are now limited to works actually in progress, and have practically come to an end. The proposal I now have to make was foreshadowed and justified by the Prime Minister when he opened the Budget last year, and I need now scarcely say more than that the amount by which I propose that the Fixed Debt Charge should be reduced is three million pounds. The Dead-Weight Debt on the 1st of April last was ^702,688,000, a decrease of ^8,788,000 as compared with the amount on the 1st of April, 1908. The reduction would have been considerably larger but for the fact that I did not deem it advisable, having regard to the state of the market towards the close of the year, to lay out the whole of the moneys available for debt reduction. The unex- pended balance of Sinking Fund moneys in the hands of the National Debt Commissioners at the end of 1908-9 was no less than ^"7,667,000 as compared with ;£ 1,132,000 a year ago. This additional ^6,500,000 or ^5,750,000, if we assume that the realised deficit is met out of these moneys, represents a debt-redeeming capacity in terms of Consols at current prices amounting to ^6,750,000. If we add this amount to the previous figure of ^8,788,000 we arrive at the real reduction of Dead-Weight Debt which is properly attributable to the finance of last year — £ l 5 » 538,000. When this is brought to account the Dead- Weight Debt will stand at approximately ^696,000,000, or somewhat less than its amount twenty years ago (^697,043,000), when the late Lord Goschen reduced the Debt Charge to 25 millions a year. There is, however, an important difference between a Fixed Debt Charge of 25 millions in 1889-90 and a Fixed Debt Charge of the same amount now. The rate of interest on Consols 20 years ago was in process of reduc- tion from 3 to 2| per cent., now it is 2 J per cent. While, therefore, in 1889-90 20 millions in round figures of the THE PEOPLE'S BUDGET 87 total provision was applied to the payment of interest and management expenses, leaving little more than 5 millions, or about three-fourths of 1 per cent, of the amount of the debt available for repayment of principal, interest and management will in the current year absorb only about 18 millions, leaving nearly 7 millions (or more than 1 per cent.) for Sinking Fund purposes. This figure is ^300,000 more than the average annual provision made for the repayment of principal in the ten years immediately preceding the South African War, and only three-quarters of a million less than the amount estimated to be avail- able in 1S99-1900, before the adoption of Lord St. Aldwyn's proposal to reduce the Fixed Debt Charge from 25 millions to 23 millions, and whereas in 1S99-1900, and the years immediately preceding and following it, we incurred a net increase of our other liabilities in respect of naval, military, and other works by an average of more than ^3,500,000 per annum, there will this year be a net surplus of moneys applicable to repayment of principal over new borrowings of about ^700,000. In view of these facts, and more particularly as we are spending so much out of current revenue upon Naval con- struction, which less provident finance might have found an excuse for charging upon a future generation, I think the time has come when, without any failure in our duty to posterity, we can reduce the Fixed Debt Charge from 28 to 25 million pounds. The adoption of this proposal will mean a reduction of the amount to be found by new taxation from i6£ to 13J millions. How am I to obtain the necessary money for the settle- ment of this very heavy account? I dismiss borrowings. One way, of course, to balance the account would be to effect a saving of expenditure, and the other is by raising taxes. I should like to say one word on the first before I come to the second question. The path of the economist is hard. His is not a very attractive or popular role in any Government. One might infer that the first 88 BETTER TIMES object of a Finance Minister who has to face a heavy deficit would be to inquire as to possible economies, with a view, if not of obviating new imposts altogether, at all events to lightening them as far as possible. Last summer, when there was a suspicion that I might possibly do my best to seek out economies and make a beginning in that respect, what was the result? I saw paragraphs in responsible Opposition journals accus- ing me of impertinence in instituting a search into possible economies in some of our most expensive services. What happened? Merely because I proposed to inquire, merely because I sought investigation, myself and my colleagues were subjected to such persistent abuse, insults, and scurrility as few Ministers have ever been subjected to. I am still of opinion that it is worth this country's while to inquire thoroughly into its affairs, but I am equally clear that until public opinion is educated up to the point of assenting to the institution of that inquiry, and there- fore giving the necessary support, no substantial results will be achieved in that way. Therefore I fall back upon the other resource of raising taxes and of so meeting and liquidating the demand. Now what are the principles upon which I intend to proceed in getting those taxes? The first principle on which I base my financial proposals is this — that the taxa- tion which I suggest, while yielding in the present year not more than sufficient to meet this year's requirements, should be of such a character that it will produce enough revenue in the second year to cover the whole of our esti- mated liabilities for that year ; and, moreover, that it will be of such an expansive character as to grow with the growing demand of the social programme which I have sketched without involving the necessity for imposing fresh taxation in addition to what I am asking Parliament to sanction at the present time. The second principle on which I base my proposals is THE PEOPLE'S BUDGET 89 that the taxes should be of such a character as not to inflict any injury on that trade or commerce which consti- tutes the sources of our wealth. My third principle is this, that all classes of the com- munity in this financial emergency ought to be called upon to contribute. I have never been able to accept the theory which I have seen advanced that you ought to draw a hard-and-fast line at definite incomes and say that no person under a certain figure should be expected to contri- bute a penny towards the burden of the good government of the country. In my judgment all should be called upon to bear their share. No voluntary associations, religious, philanthropic or provident, have ever been run on the principle of exempting any section of their membership from subscription. They all contribute, even to the widow's mite. It is considered not merely the duty, but the privilege and pride of all to share in the common burden, and the sacrifice is as widely distributed as is the responsibility and the profit. At the same time, when you come to consider whether the bulk of the taxation is to be raised by direct or indirect means, I must point out at this stage — I shall have a little more to say on this subject later on — that the industrial classes, in my judgment, upon a close examination of their contributions to local and Imperial finance, are paying more in proportion to their incomes than those who are better off. Their proportion to local finances especially is heavier, because, although nominally the rates are not paid by them, as everyone knows, they are really. For that reason the burden at the present moment of new taxation bears much more heavily in proportion to their income on that class than it does upon the wealthier and better-to-do classes. I now come to the most interesting and the most diffi- cult part of my task, the explanation of the various pro- posals for fresh taxation which I have to lay before you. I think it will be to the convenience of the Committee if 9° BETTER TIMES I deal first with motor-cars, and so dispose at once of a source of revenue from which, as I have explained, I, as Chancellor of the Exchequer, shall derive no advantage. In Great Britain, private cars, as distinct from hackney carriages {i.e., taxicabs and motor omnibuses), at present pay £2 2s. carriage tax if under one ton in weight, with an additional £2 2s. if between one and two tons in weight, and an additional ^3 3s. if between two and three tons, while motor cycles pay 15s. In Ireland there is at present no tax on motor-cars. I propose to remove that Irish grievance. These duties brought in for the year 1908-9 the sum of ^150,569. I propose to substitute for this a new and increased scale, with graduations, which will come into force next January for the whole of the United Kingdom, and I have decided to base the scale on the power of the cars and not on the weight. The horse-power will be determined in accordance with regulations made by the Treasury, and in the case of petrol cars with reference to the bore of the cylinders. It will no doubt be somewhat more difficult to ascertain the power than it is to ascertain the weight, but I believe that the plan I am adopting will be on the whole the fairest method of distributing the tax. The scale I propose will be as follows : — Under 6| horse-power, tax £2 2s. 12 » £3 3s. >, 16 ,, £4. 4s. 26 „ £6 6s. >> 33 >> „ £8 8s. M 4° ,, ;£lO IOS. ,, 60 ,, £21 OS. Above 60 ,, ,, £42 OS. It will be seen that the tax rises rapidly when we get to cars over 40 horse-power — a provision with which I think the Committee will not quarrel. Doctors' cars I propose to charge at one-half these rates. THE PEOPLE'S BUDGET 91 Motor cycles I would charge at the uniform rate oi jQi. No additional duties will be placed on hackney carriages, and the existing exemptions to trade vehicles will be continued. The new duties on private cars and motor cycles I estimate to yield, in the aggregate, this year ^410,000, or an increase of ^"260,000 over last year's figures ; but such an estimate must be to a large extent guess-work, for, though I am able to say with fair cer- tainty that the number of private cars is about 55,000 and of motor cycles 40,000, the number of the former in each category of power is of course entirely a matter of conjecture. I need hardly say that, in accordance with the Prime Minister's undertaking in his Budget Speech in 1907, arrangements will be made so that the local au- thorities will continue to obtain a sum equivalent to the old duties. I now come to a second proposal that I have to make in this connection. I have already explained to the Com- mittee that one of the chief reasons for imposing addi- tional taxation on motor-cars is the fact that the increase in their numbers necessitates a reorganisation of our main- road system, and it will be obvious that, were I to confine taxation to a mere readjustment of the scale of licence duties, the burden would be imposed with absolutely no relation to the extent that the car might use the roads. Some cars are out four or five hours a day all the year round, others are used but rarely, and I believe that, were I to obtain anything like adequate contribution from motor-cars entirely by direct taxation, I might hinder to some extent the development of the motor industry by discouraging persons from keeping a motor, or an addi- tional motor, should they only want it for occasional use. I therefore propose to put a tax of 3d. per gallon on all petrol used for motor vehicles. This small tax is very small compared with what hon. Gentlemen would have to pay if they were motoring in France, where they would be compelled to pay is. 8d. It varies very much, but in 92 BETTER TIMES the principal towns you also pay an octroi duty. This small tax will fall on motorists in proportion both to the distance travelled and also to the power of the car, for the Committee knows that a high-power car will consume considerably more petrol per mile run. In order to meet the case of commercial vehicles and vehicles such as motor cabs and omnibuses, which will not perhaps profit to so great an extent by the improvement in our roads, I propose to give a rebate of half the duty on the quantity consumed in their propulsion. There will, of course, be a rebate of the whole duty on petrol used for all purposes other than propelling motor-cars — though the amount used for such other purposes is comparatively small. I estimate the yield of this tax to be about £340,000 for the 1 1 months of the current financial year, and to be about ,£375,000 for a full year. The total sum, there- fore, available for that part of my development scheme which bears on road improvement from these two sources (after allowing for the payment to the local authorities of a sum equivalent to the old licence duties) will be some £600,000 — a figure which should rapidly increase in suc- ceeding years. I propose that the proceeds of these duties should be issued from the Exchequer to a separate account under statutory arrangements similar to those applicable to the estate duties grant and the local taxation grant. Now I come to my direct taxation. It must be obvious that in meeting a large deficit of this kind I should be unwise to trust to speculative or fancy taxes. I therefore propose, first of all, to raise more money out of the income tax and estate duties. Income tax in this country only begins when the margin of necessity has been crossed and the domain of comfort and even of gentility has been reached. A man who enjoys an income of over £3 a week need not stint himself or his family of reasonable food or of clothes and shelter. There may be an exception in the case of a man with a family, whose gentility is part THE PEOPLE'S BUDGET 93 of his stock in trade or the uniform of his craft. Then, I agree, things often go hard. When you come to estate duties, what a man bequeaths, after all, represents what is left after he has provided for all his own wants in life. Beyond a certain figure it also represents all that is essential to keep his family in the necessaries of life. The figure which the experience of 70 years has sanctified as being that which divides sufficiency from gentility is ^150 to ;£i6o a year. A capital sum that would, if invested in safe securities, provide anything over that sum ought to be placed in a different category from any sum which is below that figure. There is one observation which is common to income tax and the death duties, more especially with the higher scales. What is it that has enabled the fortunate pos- sessors of these incomes and these fortunes to amass the wealth they enjoy or bequeath? The security ensured for property by the agency of the State, the guaranteed im- munity from the risks and destruction of war, ensured by our natural advantages and our defensive forces. This is an essential element even now in the credit of the country ; and, in the past, it means that we were accumu- lating great wealth in this land, when the industrial enter- prises of less fortunately situated countries were not merely at a standstill, but their resources were being ravaged and destroyed by the havoc of war. What, further, is accountable for this growth of wealth ? The spread of intelligence amongst the masses of the people, the improvements in sanitation and in the general condition of the people. These have all contri- buted towards the efficiency of the people, even as wealth- producing machines. Take, for instance, such legislation as the Education Acts and the Public Health Acts : they have cost much money, but they have made infinitely more. That is true of all legislation which improves the condi- tions of life for the people. An educated, well-fed, well- 94 BETTER TIMES clothed, well-housed people invariably leads to the growth of a numerous well-to-do class. If property were to grudge a substantial contribution towards proposals which ensure the security which is one of the essential conditions of its existence, or towards keeping from poverty and privation the old people whose lives of industry and toil have either created that wealth or made it productive, then property would be not only shabby, but short- sighted. Now what do I propose? When it is remembered that the total yield of income tax on its present basis amounts to little more than five years' normal growth of the aggre- gate income upon which income tax is payable (which increased from ^607,500,000 in 1901-2 to ^"640,000,000 in 1906-7), it will be seen that our present reserve of tax- able capacity is as great at the present moment with the existing rate of the tax as it would have been five years ago if there had been no tax at all. If the tax were doubled in the present year income tax payers would, in the aggre- gate, after payment of the double rate, be in the enjoyment of almost exactly the same net income as five years ago. A careful consideration of these figures ought to convince the most sceptical that the maximum rate of the tax may be retained at is., or even increased, without seriously en- croaching upon our available reserves for national emer- gencies. The time, however, has gone by when a simple addition of pence to the poundage of the tax, attractive as the simplicity of that expedient is, can be regarded as a satisfactory solution of a financial difficulty. As the Prime Minister so well pointed out two years ago, inequalities which might be tolerated in a tax designed for the purpose of meeting a temporary emergency are in- tolerable in a permanent part of our fiscal machinery. The income tax, imposed originally as a temporary expedient, is now in reality the centre and sheet anchor of our finan- cial system. The principles of graduation and differentia- tion, the apportionment of the burden as between different THE PEOPLE'S BUDGET 95 classes of taxpayers, according, on the one hand, to the extent, and, on the other hand, to the nature of their re- sources, are in the lower stages of the income tax scale already recognised by abatements and allowances. It remains to complete the system by extending the applica- tion of these principles, and in regard to differentiation by taking account to some extent, at any rate, not only of the sources from which income is derived, but also of the liabilities which the taxpayer has contracted in the discharge of his duties as a citizen, and of the other burdens of taxation borne by him by virtue of those responsibilities. Notwithstanding the relief given by the Finance Act of 1907, the burden of the income tax upon earnings is still disproportionately heavy. While, therefore, I propose to raise the general rate at which the tax is calculated, I pro- pose that the rates upon earned income in the case of per- sons whose total income does not exceed ,£3,000 should remain as at present, namely, gd. in the pound up to £2,000, and is. in the pound between £2,000 and £3,000. In respect of all other incomes now liable to the is. rate I propose to raise the rate from is. to is. 2d. In the case of incomes not exceeding £500, the pres- sure of the tax, notwithstanding the abatements at present allowed, is sorely felt by taxpayers who have growing families to support, and although a comparatively trifling additional burden will be imposed upon them by the in- creased rate, since the aggregate income of this class is to the extent of at least four-fifths exclusively earned in- come, I think that even upon the present basis they have a strong claim to further relief. Even from the purely fiscal point of view there is this essential difference between the position of a man with a family and that of the taxpayer who has no such responsibilities. The family man is, generally speaking, a much heavier contributor to that portion of the revenue which is derived from indirect taxa- tion and inhabited house duty, so that in comparison with 96 BETTER TIMES the bachelor he is taxed not so much in proportion to his income as in proportion to his outgoings. There is no class of the community which has a much harder struggle or a more anxious time than that com- posed of the men whose earnings just bring them within the clutches of the income tax collector. On a small income they have not merely to maintain themselves, but to exhaust a large proportion of their limited resources in that most worrying and wasteful of all endeavours known as "keeping up appearances." They are often much worse off and much more to be pitied than the artisan who earns half their wages. If they have only themselves to think about they do well, but when they have a family dependent upon them the obligation to keep up the appear- ance of respectability of all their dependents is very trying. I am strongly of opinion that they deserve special con- sideration in the rearrangement of our finances. Continental countries recognise their claim, and I pro- pose that for all incomes under ^500, in addition to the existing abatements, there shall be allowed from the in- come in respect of which the tax is paid a special abatement of £10 for every child under the age of 16 years. Take the case of the widow with a family, which is always cited in reference to proposals to tax income or property : she will in most cases be better off with this abatement, should her family be of average numbers, even though she is rated at is. 2d., than she was before. The new abatement will, like the existing abatements, be allowed irrespective of the source from which the income is derived, and earned incomes, upon which no new burden is to be imposed, as well as unearned incomes, will enjoy the advantage of the concession. The addition of 2d. to the rate upon all in- comes in excess of ^2,000, and upon unearned income enjoyed by persons whose total income does not exceed that amount, would yield in a full year ^"4,700,000, and in the year of imposition ^3, 760,000. But from this source I must deduct ^160,000 in respect of the retention of the THE PEOPLE'S BUDGET 97 is. rate upon earned income enjoyed by persons whose total income is between ^2,000 and ^3,000, and ^,'600,000 for the costs of the new abatements. This reduces the esti- mated net receipts from the additional 2d. in 1909-10 to ^3, 000, 000. The rate of income tax under the present law is abso- lutely uniform upon all incomes in excess of ^2,000 a year ; between that rate and ^700 the allowance in respect of earned income operates to relieve the less wealthy tax- payer, and thus to introduce the principle of graduation. Below ^700 the system of abatements produces a regular graduation by descending stages. The introduction of a complete scheme of graduation, applicable to all incomes, besides raising questions of general principle, which it is not necessary now to discuss, would require an entire re- construction of the administrative machinery of the tax, including in all probability the abandonment to a very large extent of the principle of collection at the source, upon which the productivity of the tax so largely depends. It would create for the administrative Department a series of problems which, if not insoluble, could at any rate scarcely hope to obtain a satisfactory solution in a year when other taxation of a novel character must necessarily claim a large part of its attentions. The imposition of a super-tax, however, upon large in- comes, on the lines suggested by the Select Committee of 1906, is a more practicable proposition, and it is upon this basis that I intend to proceed. Such a super-tax might take the form of an additional poundage charged at a uniform rate upon the whole income of persons whose total income exceeds the maximum above which the tax is to be applied, or the poundage might be varied accord- ing to the amount o'f the income to be taxed. A third, and I think preferable, alternative is to adopt a uniform pound- age, but to charge the tax not upon the total income, but upon the amount only by which the income exceeded a cer- tain fixed amount, which would naturally, but need not H 98 BETTER TIMES necessarily, be the amount of the minimum income which attracts the tax. We might begin, say, at ^3,000, and levy the new tax upon all income in excess of ^3,000, or at ^5,000, and levy the tax upon income in excess of ^5,000. In the former case some 25,000 assessments would be re- quired, in the latter only 10,000 — from the point of view of administration a very strong argument in favour of the adoption of the higher figure, at any rate, in the first in- stance. On the other hand, a general abatement of ^5,000 per taxpayer would be extremely costly, and though it would have the effect of largely reducing the actual as compared with the nominal rate of the tax, except in the case of very large incomes indeed, the nominal rate neces- sary to produce an adequate revenue — though in reality no measure of the general burden — would tend to appear somewhat alarming. While therefore I propose to limit the tax to incomes exceeding ^5,000, I propose to levy it upon the amount by which such incomes exceed ^3,000, and at the rate of 6d. in the jQ upon the amount of such excess. An income of ^5, 001 will thus pay in super-tax 6d. in the £ on ^2,001, the equivalent of an addition to the existing in- come tax of rather less than 2|d. in the £, and an income of ;£6,ooo the equivalent of an additional 3d. The equiva- lent of an extra 4d. (or a total income tax of is. 6d. in the £) will only be reached when the total income amounts to ^9,000, and of 5d. not until the total income reaches ;£i8,ooo. Assessments to the new tax will be based upon the returns of total income from all sources, which will be required from persons assessable. The machinery will be, in the main, independent of the machinery of the existing income tax, but the assessments will be made by the Special Commissioners appointed under the Income Tax Acts, and assessable income will be determined according to the rules laid down in the income tax schedules. Total income for the purposes of the tax will be ascertained in THE PEOPLE'S BUDGET 99 the manner prescribed by Statute for determining" total income for the purposes of the present income tax exemp- tions and abatements — that is to say, deductions will be allowed for interest upon loans and mortgages and any other payments made under legal obligation, while in the case of real property assessed to property tax under Schedule A, a special 5 per cent, allowance will be made for cost of management, as well as the allowances of one-sixth and one-eighth for repairs at present made in collection of the property tax under that schedule. Sir Henry Primrose, in his evidence before the Select Committee in 1906, estimated the number of persons in receipt of incomes over ^5,000 a year to be 10,000, and their aggregate income to be ;£ 12 1,000,000. From this it will be seen that the amount of income liable to a super- tax would be ^"90,000,000. The yield of the super-tax in a full year is estimated at ^2,300,000, but as new machinery has to be set up, and as returns have to be obtained from taxpayers, examined, and assessments made upon them, I should be sanguine if I anticipated that more than a small proportion of the first year's income will reach the Exchequer before 31st March next. In these circumstances I have not felt justified in including more than ^"500,000 in my Estimate for the current year. My last proposal relating to the income tax is the re- striction of the exemptions and abatements to persons resident in the United Kingdom. The income of a person resident abroad only comes within the scope of the income tax in so far as it is derived from sources within the United Kingdom. Whatever may be his total actual income, his total income from all sources within the meaning of the Income Tax Acts comprises only such receipts as accrue to him from sources in this country. A foreign millionaire, who draws anything between ^160 and ^400 from English investments, can obtain £8 from the Commis- h 2 ioo BETTER TIMES sioners of Inland Revenue. If his dividends exceed ^400 but do not exceed £700 he can recover a sum which varies from jQj 1 os. to ^3 10s. in accordance with the abate- ment scale. If they are ,£701 or upwards he can recover nothing. There is reason to suppose that by far the greater part of the money paid to persons outside the United King- dom in respect of these abatements g;oes to people who, if they were resident here, would not be entitled to it. The claims are, besides, from an administrative point of view, very difficult to deal with, and the difficulty will be greatly increased if my proposal to grant special abatements to the fathers and mothers of families is adopted. The claims themselves are received in the main through income tax repayment agencies, which absorb in commis- sion a large percentage — often, I believe, as much as 50 per cent. — of the amount recovered. In these circum- stances I am satisfied that the abolition of this concession, which was recommended by Lord Ritchie's Committee of 1904, will give rise to no appreciable hardship. The con- sequent saving to the revenue will be something like ^250,000, to which must be added a considerable saving in respect of the salaries of the staff at present employed in the troublesome business of dealing with the claims. As, however, the repayments take place in a year sub- sequent to that in which the tax is collected, and I do not propose to make the alteration retrospective, no part of the saving will accrue to the revenue of the present year. The proposals I have to make with regard to the death duties are of a very simple character. The great recon- struction of these duties in 1894, which will always be associated with the name of Sir William Harcourt, has given us a scheme of taxation which is at once logical and self-consistent as a system, and a revenue-producing machine of very high efficiency. Apart, therefore, from one or two minor changes in the law, which experience has shown to be desirable, I intend to confine my attention to adjusting the rates with a view to increasing the THE PEOPLE'S BUDGET 101 yield without altering the basis on which the duties are levied. The estate duties upon small estates of which the net principal value does not exceed ^5,000 will remain at 1, 2, or 3 per cent., according" to value, as at present; but between ^5,000 and ^"1,000,000 I propose to shorten the steps and steepen the graduation. I do not propose to increase the maximum of 15 per cent., but I propose it should be reached at ^1,000,000 instead of ^3,000,000. An estate of ^"10,000 belongs to a different category, and represents a greater taxable capacity, than an estate of ;£i,ooi, yet both alike pay 3 per cent. ; and the same is true of an estate of ^25,000 as compared with one of ;£io,ooi, both of which now pay 4 per cent. Under the new scale, estates from ^5,000 to ^"10,000 will pay 4 per cent., and those from ^10,000 to ^20,000 5 per cent. The next step will be ^"20,000 to ^40,000, and the rate 6 per cent. ; the next ^40,000 to ^"70,000, with 7 per cent., while estates of ^"70,000 to ^100,000 will pay 8 per cent. ; from ^100,000 to ^150,000, the rate will be 9 per cent. ; from ;£i 50,000 to ^"200,000 it will become 10; the rate from ^200,000 to ^400,000 will be 11 per cent.; from ^"400,000 to ^"600,000, 12; from ;£6oo,ooo to ^800,000, 13; from ^800,000 to ;£i,ooo,ooo, 14; and above ^1,000,000, 15 percent, upon the whole of the estate. The new rates, if chargeable, as I propose they should be, in respect of all estates passing upon deaths occurring on or after to-morrow, are esti- mated to yield an additional revenue of ^2,550,000 in 1909-10, increasing to ^"4,200,000 in the following year, and ultimately to ^4,400,000. As a consequence of these increases, added to the increases made in the higher steps of the estate duty scale two years ago, it becomes necessary to deal with the settlement estate duty, which has remained unaltered since its original imposition in 1894. Non-settled property is chargeable with estate duty according to scale every time 102 BETTER TIMES the interest in the property passes on death upon the full corpus of the property. Settled property, on the other hand, if settled by will, is so chargeable only upon the death of the testator, or, if settled otherwise than by will, only upon the death of the first tenant for life, and, unless a subsequent life tenant is competent to dispose, escapes any further payment of estate duty until the expiry of the settlement, however many life tenants may intervene. For example, a non-settled estate left to a son, by him to a brother, and by the brother to his son would pay estate duty three times, whereas, if it took the same course under a settlement made by the will of the original testator, it would pay once only — at the original testator's death. By way of set-off to this preferential treatment of the settled estate it was provided by the Finance Act of 1894 that an additional rate of 1 per cent., called settlement estate duty, should be paid in addition to the estate duty, at the rate appropriate to the estate, on the first occasion of its passing at death under the settlement. The duty must therefore be regarded as a sort of composition for future payments of estate duty to which the property would be- come subject in the absence of a settlement. Sir William Harcourt's intention, as expressed in the Budget speech of 1894, was to secure by means of this duty absolute equality of treatment as between settled and non-settled property. "In this manner," he said, "we levy the same amount from the estate as if it were left absolutely, but each beneficiary will contribute according to the extent of his interest by the reduction of his income resulting from the original diminution of the capital." The proposition that an immediate payment at the rate of 1 per cent, is an adequate composition for a future payment, or possibly several future payments, according to the character of the disposition and the course of events, at rates varying from 1 to 8 per cent, (the then limits of the Estate Duty scale) is at first sight somewhat startling. On the other hand, when we remember that the expedient THE PEOPLE'S BUDGET 103 of settling a whole estate is often adopted as an alterna- tive to dividing it in the first instance, that the average age at which a life tenant succeeds is probably much higher than that of the average beneficiary taking free property, and last, that the difference in value between the fee simple of the property and the life interest or life interests of the tenant or tenants for life passes, in theory at any rate, directly from the settlor to the remainderman, it is not unreasonable that a substantial abatement should be made from the present value (calculated on a strictly actuarial basis) of what would probably be the future liability in respect of estate duty, in the event of the whole estate being charged in full every time it passed upon death under the settlement. When, however, every allowance has been made for difference of circumstances, I think there can be no doubt, especially when regard is had to the fact that settlement estate duty is not chargeable where the only life interest is that of a spouse, that the 1 per cent, additional duty was not, even in 1894, when the average rate of estate duty was approximately 5 per cent., any- thing like the full equivalent for the immunity from further charge enjoyed by the property during the remainder of the settlement. The alterations in the estate duty scale made in 1907, and those which I now propose, will to- gether have the effect of raising the average rate of estate duty from about 5 to approximately 7 per cent., and the charge of only 1 per cent, settlement estate duty, which was not in fact a full equivalent for the privilege granted even on the basis of the 1894 rates, clearly cannot be defended in conjunction with the new scale. I propose, therefore, to increase the rate from 1 to 2 per cent. Although the effect of this alteration will ulti- mately be to double the yield of the present 1 per cent, duty (about ^500,000) I can only reckon on ^50,000 extra revenue from this source in 1909-10 and ^375,000 in 1910-11, since these duties are in most cases not collected until some time after the death. 104 BETTER TIMES I propose at the same time to correct a small anomaly, introduced, I believe, as an accidental effect of the legisla- tion of 1894, which gives rise to a very considerable loss of revenue every year. Where property subject to a life interest does not fall into possession until after the death of the prospective beneficiary, only one estate duty is pay- able, namely, as in respect of settled property. But where it falls into possession in his lifetime, two estate duties are payable, namely, one on the transmission of the pro- perty to him, and one on the transmission of the property from him. It is, of course, a matter of indifference to the ultimate taker whether the decease of the life tenant is prior or subsequent to the decease of his own testator ; yet, in the former case, it comes to him charged with two duties, and, in the latter, charged with one duty only. My proposal is that such property should be treated, as before 1894, in the same way in the latter as in the former con- tingency. The estimated advantage of this alteration to the revenue of the current financial year is ^"250,000, and ^"375,000 in 1910-11 and future years. The rate of legacy and succession duties, where the benefi- ciary is a brother or sister or a descendant of a brother or sister of deceased, will be raised from 3 per cent, to 5 per cent. ; while the other legacy and succession duties, which at present vary from 5 to 10 per cent., according to the degree or absence of relationship, will be charged at the uniform rate of 10 per cent. The present exemptions from the 1 per cent, legacy and succession duties now chargeable, where the beneficiary is a lineal ancestor or descendant of the deceased, will be abolished, and the duty extended to the case where a husband or wife takes the legacy or succession. In the cases of spouses and lineals, however, I propose to exempt from the new and reimposed duties all legacies and suc- cessions of whatever value in cases where the aggregated property passing on the death of the deceased does not exceed ;£ 15,000. THE PEOPLE'S BUDGET 105 Exemption will also be allowed, whatever may be the principal value of the aggregated property, wherever the amount of the legacy or succession itself does not exceed ;£i,ooo, or, if the person taking the legacy or succession is the widow of the deceased or a child under the age of 21 years, wherever the amount of such legacy or succes- sion does not exceed ^2,000. The changes will, like the new estate duty scale, operate only in the case of persons dying on or after the 30th instant ; but as these duties are not as a rule payable until the end of the executor's year, I cannot count on receiving any additional revenue until 1910-11. I estimate the amount which the alterations will produce next year at ^"1,370,000, and that the yield will in course of time increase to ^"2,150,000. Apart from the question of rates, the method of valua- tion adopted for the purposes of the death duties has neces- sarily a very important influence on the revenue. Under the present law, agricultural property enjoys the some- what peculiar privilege that, whatever may be its value in the market, its valuation for death duty purposes cannot exceed 25 years' purchase of the net rental after allowing for expenses of management. I propose to abolish this limitation, and to deal with the class of property to which it applies on the basis applicable to all other property pass- ing upon death — namely, the actual price which would be paid by a willing buyer to a willing seller as on the date upon which the property becomes chargeable to duty. Further, the law as to the valuation of large blocks of stocks and shares is not sufficiently clear. It is some- times contended that, if the whole property were placed on the market on the date of the deceased's death, a " slump " would take place in the value of the securities. Of course, no executor would be so imprudent as to take this course. There is no reason why it should be definitely laid down that stocks and shares are in all cases to be valued at the market price, without any reference to the size of the holding, and I propose to amend the law accordingly. 106 BETTER TIMES From these two changes in the law relating to valuation, I hope ultimately to derive a considerable accession of revenue, but the effect of the changes will only be felt gradually, and the advantage to be derivd from the alteration in the current financial year is scarcely likely to be appreciable. I now come to the period within which gifts made dur- ing the lifetime of the deceased are reckoned as part of the estate for the purposes of estate duty. The loss to the revenue arising from voluntary dispositions inter vivos, made with the purpose of avoiding the death duties, can- not be precisely ascertained ; but it is probably very con- siderable, and I fear that resort to this expedient may become still more common when the rate of duty is raised. I therefore propose to substitute five years for one year, as the period within which property so alienated shall re- main liable to duty. I am not sanguine that this reform will do more than operate to check what at present is thought to constitute a considerable leakage of revenue ; and I do not therefore feel justified in estimating any posi- tive increase of revenue from the alteration. My last proposal is to extend to free estates the con- cession made by section 20 of the Finance Act, 1896, which grants exemption from estate duty in respect of objects of national, scientific, or historic interest forming part of a settled estate. The estate duty in respect of such objects, whether forming part of a free or settled estate, will only become chargeable in future if and when they are actually sold. This concession will, I hope, result in keeping to- gether many collections whose owners are, from various reasons, unable to take advantage of the privilege afforded by the present law, and so keep in the country many national treasures which would otherwise, more especially in view of the prospective change in the United States customs tariff upon such objects, tend to find a home on the other side of the Atlantic. Under the head of stamp duties I propose to increase the THE PEOPLE'S BUDGET 107 duty upon conveyances on sale from 10s. to' 20s. per cent., an exemption from the increased rate being made in favour of conveyances of stock or marketable securities which, by reason of the greater frequency with which they change hands, in comparison with other kinds of property, bear a disproportionate burden under the present uniform scale. The greater part of the additional revenue under this head will be derived from transfers of real property. As such property will benefit largely from the decrease of the poor rate, which must necessarily follow as a result of the adoption of a State system of Old Age Pensions and other schemes of social reform, it is equitable that it should be called upon to contribute to the Exchequer expenditure for these purposes. Even after my proposed addition, the transfer duty upon such property will still be low as compared with the rates charged in other communities. In Germany, there are both State and municipal taxes which, in towns like Cologne and Frankfort, at any rate, together amount to not less than 3 per cent. ; while, in France, the rates are still higher. Conveyances or transfers operating as a voluntary dis- position, inter vivos — an expedient largely resorted to as a method of avoiding the death duties — will in future attract, instead of the present fixed duty of 10s., an ad valorem duty calculated on the worth of the property transferred, at the same rate as is applicable to a conveyance on sale of property of a similar description, and the same rates will apply to certain instruments chargeable at present with stamp duty as settlements. The rates upon marriage settlements will remain unaltered. As a corollary to the increase of the conveyance duties, duties upon leases will be doubled, except in the case where the id. rate is charge- able, which will remain as at present. My next proposal relates to bonds to bearer and other securities transferable by delivery. The duty in these cases is the counterpart of the stamp duty upon the con- 108 BETTER TIMES veyance necessary to transfer securities transferable by deed ; but, whereas the latter covers only a single trans- action, the duty upon bearer securities covers all the transactions taking place during the life of the bond. It is therefore an anomaly that under the existing law this valuable privilege should be given at the cost of a single transfer. I, accordingly, propose to increase the duty upon such bonds (not being bonds issued by a Colonial Government, upon which the rate will remain as now at 2S. 6d. per cent.) from ios. to 20s. per cent, of the nomi- nal value, the duty upon bonds issued in lieu of existing bonds being concurrently raised from 2s. 6d. to 5s. per cent. This completes the list of my proposals relating to stamp duties, with one important exception. The transfer duty upon stocks and shares is at the rate of ios. per cent. ad valorem, leviable upon the conveyance by which the transfer is effected. There are, however, many trans- actions in securities which, for one reason or another, are never followed by an actual conveyance. A block of shares may be sold and resold several times in the course of pass- ing from one permanent holder to another, and the whole of these transactions may be covered by a single transfer from the first seller to the final purchaser. In such cases the intermediate transactions escape taxation altogether, except for the stamp duty chargeable upon the broker's contract note — id. upon transactions between ^5 and ;£ioo, and is. upon larger transactions irrespective of amount, and they may, I think, reasonably be required to make a moderate contribution to the Exchequer. Such transactions being mainly of a speculative character and worked upon narrow margins, will clearly not bear a rate of duty in any way comparable with that charged upon an actual conveyance. Such an impost would, in the first place, from the point of view of the revenue, defeat its object by rendering the greater portion of such trans- actions impossible, while, in the second place, it would, THE PEOPLE'S BUDGET 109 in my opinion, be opposed to the public interest as calcu- lated to curtail that free circulation of securities which is a necessary condition of steady prices and an open market. For, although these transactions are in the main specula- tive, and do, at times, like all speculative trans- actions, degenerate into mere gambling, it is a mistake to suppose that this is their essential or pervading characteristic. In their proper place they form part of the legitimate machinery for discounting fluctuations in value, necessary, not only to the Stock Exchange, but to every sphere of commercial activity, and the imposition of a penal tax designed to curtail the mischievous develop- ments of the system could scarcely attain its object with- out inflicting irretrievable damage upon the marketability of securities as a whole. The same objections do not, however, apply to a small ad valorem tax, which would operate to check business, if at all, only in the case of operations undertaken upon infinitesimal margins, in which, as a rule, the purely gambling element is most prominent, and which can be dispensed with without seriously endangering the stability of the market. I propose, therefore, that the rate between ^5 and ;£ioo should be 6d., instead of id. ; from ^100 to ^500 is. (as" at present); from ^500 to ^"1,000 2s., with a further 2s. for every additional ^1,000. To prevent those rates affecting what are known as " carry-over " operations with undue severity, a single duty will be charged upon the two transactions involved therein, in- stead of, as now, the full duty upon each transaction. " Option notes " will be charged at similar rates, calcu- lated upon the value of the securities to which the option relates. When a substantive contract follows upon the option and involves the payment of stamp duty upon the contract note, there will be a return of the duty already paid in respect of the option contract. Brokers who are not members of the Stock Exchange, whether acting as agents or principals, will be required to issue similar notes no BETTER TIMES to their clients, and such notes will be chargeable with the same duties. The preferential treatment now enjoyed by the so-called " bucket shops " — institutions whose principal object is the encouragement of gambling — in the matter of stamp duties will thus be removed. These additional stamp duties may be expected to yield about ;£i, 450,000 in a full year — of which conveyances, deeds of gift, settlements, and leases will account for ^850,000, bonds to bearer and other marketable securities for ^350,000, and contract notes for ^"250,000. They will not, however, come into force until the Finance Bill has received the Royal assent. The greater part of the first half-year's revenue will thus be lost, while, in the case of most of the duties, a considerable amount of "forestal- ment " has to be reckoned with, since transactions will no doubt be expedited wherever possible to secure the advan- tage of the lower rate of duty. I cannot, therefore, safely calculate upon receiving more than ^650,000 in 1909-10. I now come to the question of licences. I think I may fairly say that further taxation of licences has been antici- pated for some time. It has been generally felt that the State has not received a fair return for the valuable mono- poly which it has granted to the trade. If a comparison is instituted with the amount charged for this privilege in a community like that of the United States, one cannot help feeling amazed that the trade has been let off so lightly in this country. Land and licences have this in common, that where they have a value at all it is a monopoly value. No one would pay rent for a plot of land if he could secure an equally valuable piece of ground in the same neigh- bourhood for nothing ; nor would anyone give the slightest consideration for an existing licence if a new licence could be got for the asking. The State for reasons of public utility limits the number of licences in a given neighbour- hood, with the result that the holder of one of the licences is able to enjoy the exceptional rate of profit which the THE PEOPLE'S BUDGET in possession of the privilege permits him to earn. This point was very effectively put in the able circular issued by the brewers themselves during the passage of the Licensing Bill through this House. I shall quote the words they use, as argument could not have been more forcibly or more fairly put. These are the words which the brewers used in stating their cases : — 41 Now, with the exception of that portion of the trade which is done by delivery to private houses and clubs, and that which is done through off-licences, the only channel through which the consumption of excisable liquor can take place is through the licensed houses. Parliament has provided that it shall not be sold in any other way, and as a consequence the existing licensed houses, being in pos- session of a practical monopoly, have acquired a very high value." That is the statement of the case of the brewers them- selves. As to the extent of that value I shall be able to afford the Committee some statistical enlightenment in the course of a few minutes, but I should like to premise that during recent years there have been two or three elements which have added very considerably to the value of this mono- poly. The first is the growing disinclination of benches of magistrates to issue fresh licences, and the steady effort made by benches of magistrates rather to reduce the numbers. The reduction which has been made under the Licensing Bill of 1904 has undoubtedly contributed to the increase in the value of licences. All this has endowed old licences with a special value, which did not attach to them in the days when new licences were more readily granted. The second element in the enhancement of value has un- doubtedly been the tied-house system ; and the third has been the conversion of what was an annual licence, deter- minable by the magistrates on evidence as to the necessi- ties of the neighbourhood, into an interest — I will not call it a freehold — determinable only on misconduct. ii2 BETTER TIMES By the Act of 1904 a valuable public right or property was parted with without any commensurate return being- obtained. Is the market value of this privilege conferred by the State a sufficiently substantial one to justify a con- siderable increase in the very light licence duties which are now levied on these houses? Fortunately, we are not left to conjecture in appraising the money worth of this privi- lege. We have three important tests of its value. The first is that claimed by the trade itself. The trade has re- peatedly assured the House of Commons, through its well authenticated spokesmen, that it assesses the value of the monopoly thus conferred upon it by the State at the enor- mous sum of 150 millions. I am not sure that this does not apply to licences in England and Wales alone, and that Scotland and Ireland are left out of account in the com- putation. At 10 years' purchase this would mean the annual value of 15 millions conferred by a State monopoly. In return for this the public receive by way of licence duties upon public-houses, beer-houses, and hotels in the United Kingdom, an annual rent of ^1,809, 000. If all the freeholds of the kingdom were farmed out on these light and easy terms, what fortunes our farmers and farm labourers would divide between them. A farmer's profits are assessed for income-tax purposes at a third of his rent. One ready proof of the difference which the granting of this privilege of exclusive trading makes in the value of a business is to be found in the fact that an ordinary business is generally bought and sold at two or three years' purchase of the profits, whereas the value of a public-house licence is always appraised at from 10 to 12 years' purchase, the difference being attributable entirely to the greater cer- tainty, both as regards turnover and rate of profit, which arises from the restriction upon competition afforded by the licensing system. Another test of value has been supplied by the working of the Act of 1904, where compensation is afforded to the owner of the licence when it is forcibly withdrawn by the THE PEOPLE'S BUDGET 113 action of the magistrates. These houses do not afford, perhaps, the best criterion of the real value of a prosperous public-house. Licences are generally withdrawn from the poorer type of public-house because the licensing magis- trates have come to the conclusion that they are not re- quired, and therefore, if the value of a house of that kind is high, what must be the price which would be put upon a house required by the neighbourhood, and, therefore, doing a good trade? However, let us take this, the least favourable illustration available, and here again I quote from the brewers' circular. It gives the cases of 126 houses of this kind spread over London, Essex, and Hertfordshire, and we are assured that these houses must be taken as a fair sample of the whole of the houses valued for compensation in that district. The result, according to this document, was that in these 126 cases the total value of the premises with a licence was £280,870; the value of the premises without the licence was .£59,071, or, in other words, the value of the pre- mises without the licence amounted only to 21 per cent, of the value of the same premises with a licence. So much for the value of a licence in a house which is not required by a neighbourhood, a thoroughly pernicious and poisonous influence as a rule, which ought not to be toler- ated a single day after its superfluous character had become evident to the authorities. Now let us take the case of the thriving house, or rather of the house whose trade proves that it is required by its neighbours. I have had before me a list of 141 licensed premises which have been acquired by the London County Council in connection with street and other improvements between March, 1889, and February, 1907. The total pre- mium value attaching to the sites by reason of the licences has been estimated at £344,550, or an average of £2,443 per site. The acquisition of such sites in connection with Kingsway and Aldwych has been estimated to have cost the Council in respect of the premium value attaching to 1 ii 4 BETTER TIMES the sites of the public houses acquired, a sum of ;£i 32,000. In another instance, the premium value of a public-house site required for the improvement of the northern approach of the Tower Bridge is estimated at ^20, 000. I might multiply these instances, but I think I have furnished the Committee with sufficient evidence of the enormous value which this monopoly has created. Anyone who impartially investigates the figures may come to. the conclusion that the rent or toll exacted by the public is ludicrously inadequate, and that in the interests of good management of public property that rent ought to be brought up to a figure which, without reaching any- thing like the proportions of a rack rent, will at any rate be commensurate with that which would be charged by a fair-minded and tolerant landlord, who, without doing him- self a gross injustice, still at the same time wishes to afford his tenant not only a reasonable but even a generous margin within which to make a living out of his trade. And when a country requires revenue to provide for the defence of its shores, and to supply the urgent social need of its people, that seems to be just the moment when, before imposing fresh taxes on its citizens, it ought to look round and see whether it has farmed its property to the best advantage. Now the Legislature has long ago fixed what it con- siders to be a reasonable toll in the case of the little village inn. For a house assessed under Schedule A at ^9, a licence of £4. 10s. is charged, that is 50 per cent, of the nominal annual value. As I shall point out later on, this bears no relation to the real value; in the vast majority of cases the assessment is probably less than one-half what it ought to be on the basis acknowledged by the trade itself, in all its business transactions, so that the real charge imposed upon the licensee of the village inn amounts to something like 25 per cent, of the value. The principle which has been considered good enough for the small village publican we think ought to be extended to the pro- THE PEOPLE'S BUDGET 115 prietors of the prosperous liquor palaces of our great towns, and our rates of duty will be based generally on that principle. Before I actually give the figures 1 should like to say a few words on the question of valuation. We realise that by keeping the present assessable value as the basis of computation for our licences there would be a good many anomalies and inequalities. Any man who looks at the list of compensated public-houses, and compares the amount of the compensation given in each case with the annual value, will realise how unequally the present principle of licensing bears upon public-house owners. Here is one house, with an annual value which could hardly exceed ^40, receiving in compensation money ^3, 246. Here is another house, with an annual value of nearly ^300, receiving in compensation money £731. We have there- fore come to the conclusion that it is essential, in order to ensure fair treatment as between one publican and another, that there should be a valuation based upon the principles on which publicans for the time being receive compensa- tion, and therefore generally accepted by the trade as an equitable basis for appraising the value of their mono- poly. This assessment, when it is complete, will be trans- lated into terms of annual value, and the licence will be levied accordingly. The burden of some publicans may be lightened, that of others may be increased, but on the whole justice will be done, as each man will be called upon to pay according to the value which he receives from the privilege which the State confers upon him. It may well be, however, that it will have the effect of so considerably raising the whole level of the contribution required of the publican as to make it appear oppressive. In that case we undertake, when the valuation is complete, to reconsider the whole scale in the light of the more accu- rate and scientific figures which will have been secured by the operation of this new assessment. This new valuation will, however, take some months to complete, and mean- 1 2 n6 BETTER TIMES while we propose to levy our duties upon the basis of the valuation upon which the present duties are chargeable. My new scale of duties for the full publican's licence begins, as I have already indicated, like the existing- scale, at 50 per cent, of annual value ; but, instead of following the existing scale — by gradually diminishing the percent- age as the value increases until upon houses having an annual value of ^700 the charge amounts to no more than 8| per cent., above which figure, thanks to the cessation of the scale at that point, the decrease in the rate of the charge in proportion to annual value proceeds with still greater velocity, until, in the case of the highest values, it becomes almost insignificant — we propose to charge a uniform 50 per cent, of annual value throughout, subject to a minimum. The minimum rate in rural districts and in urban areas having a population of less than 2,000 will be ^5, which, although only 10s. in excess of the present minimum charge, is, I think, a sufficient duty to exact from the small country inn, which satisfies the legitimate social needs of a scattered population, and whose volume of trade is in many cases not more than sufficient to provide the inn- keeper with a decent subsistence. The same considerations do not, however, apply to the poorer class of premises in the larger urban areas. A very large part of the mischief resulting from the liquor traffic is associated with the small, and often disreputable, house of this kind, which, in fact, ought never to have been licensed. Such houses are, indeed, in many cases, mere survivals from the period before 1872, since which date new licences have not, in fact, been granted, at any rate in England and Wales, to any premises in towns con- taining a population of not less than 100,000 inhabitants, of a lower annual value that ^50; and in other towns, con- taining a population of not less than 10,000, of a lower annual value than ^30. Such houses, where they do exist, have often a turnover quite out of proportion to the THE PEOPLE'S BUDGET 117 character of the premises, and make large profits. We think, therefore, that no hardship will be created by the charge of a minimum duty of ;£io in urban areas of between 2,000 and 5,000 inhabitants; ^15 between 5,000 and 10,000 ; ^20 between 10,000 and 50,000 ; ^30 between 50,000 and 100,000; and ^35 in London and other towns having a population in excess of 100,000. So much for the full "on " licences. The next point in importance is the beer-retailers' "on" licence, com- monly known as the " beer-house " licence. The same conditions as regards the enjoyment of a monopoly value attach to these licences as to the publicans' licences. The trade done in a beer-house is frequently as extensive and as profitable as the trade done in fully licensed pre- mises, though, of course, as the privilege granted by the licence is a more restricted one, this is not invariably the case. The present fixed charge of ^3 10s. for a beer- house licence, without regard to the value of the premises to which it is attached or to the profits which it enables the owner to earn, is, if judged by the standard of what would form a fair and reasonable consideration for so valuable a privilege, absurdly inadequate. I propose, therefore, to introduce for this class of licence, rates graduated on the same basis as that which is to be made applicable to full " on " licences, the rate being in each case two-thirds of the amount chargeable for a publican's licence in respect of similar premises — that is to say, one-third of the annual value of the pre- mises. The principle of a minimum rate according to the size of the place in which the house is situated will be applied to this as to the public-house licence. The scale will be : For rural districts having a population of under 2,000, ^3 1 os. ; between 2,000 and 5,000, £6 10s. ; be- tween 5,000 and 10,000, ;£io; from 10,000 to 50,000, ^13; 50,000 to 100,000, £20; and above 100,000, £23 10s. The distinction made by the existing law between hotels u8 BETTER TIMES and ordinary public-houses works in a very unsatisfactory and arbitrary manner, both from the point of view of the revenue and from the point of view of hotel-keepers. The charge for the hotel licence, properly so-called, is, on the one hand, an extremely low one ; but, on the other hand, it is so difficult for the average keeper of a bona- fide hotel to comply with the conditions laid down for the grant of this licence that the great majority of such hotel- keepers in fact find it necessary to take out the full publican's licence. This latter licence, even at the rates at present charged, constitutes in the case of small hotels, at any rate, whose receipts from the sale of liquor are sometimes insignifi- cant compared with the total business done, an undue burden, and it would clearly be inequitable to apply the new scale without qualification to this class of house. I therefore propose to make special concessions to bona- fide hotels, inns, and restaurants. I am anxious to draw a deep and clear line for purposes of taxation between the house which supplies all the best traditional objects of the inn and the mere drinking establishment which lives and thrives on "swilling" and "tippling." Under the new system, therefore, a distinction will be drawn between houses whose receipts from the sale of stimulants do not exceed one-third of their total receipts from all sources, and those in the case of which that proportion is exceeded. I have made careful inquiries, as a result of which I am satisfied that the proportion of one-third, at which I suggest the line should be drawn, will cover the case of practically all establishments whose business primarily consists in supplying food and lodging, facili- ties for recreation, or other services only incidentally connected with the consumption of alcohol. Hotels and restaurants which are mainly drinking places will thus be, as they ought to be, chargeable with the full publican's licence duty, but where the bulk of the business consists in the satisfaction of public require- THE PEOPLE'S BUDGET 119 merits in directions other than the supply of stimulants, the rate of duty applicable to the publican's licence will be reduced in proportion as the receipts from the sale of intoxicating liquor diminish. It must, of course, be remembered in this connection that the possession of a licence gives an advantage not only as respects the sale of liquor, but also as respects the other business of a hotel, higher prices being obtainable both for food and lodging in licensed premises than in premises not enjoy- ing a licence. This value, no less than the profit directly derived from the sale of liquor itself, is part of the mono- poly value of the premises and ought to be taken into account in assessing the duty. I propose to recognise this principle by making the reduction dependent on the proportion which the receipts from intoxicants bear, not to the whole, but to one-half the total receipts from all classes of business. Thus, a house whose receipts from the sale of liquor amount to one-quarter of its total re- ceipts wil pay only one-half, and one whose liquor receipts amount to one-sixth only one-third of the full rate. The effect of this reform will be to tax hotels on a logical basis and to put large hotels for the first time into their proper place as contributors to the revenue. A provision is inserted in the Bill under which the increase in duty will not, in the case of tied houses, fall on the publican. Payments in respect of monopoly value of new licences under the Licensing Act of 1904 will, in future, be taken for the Exchequer, thus removing the temptation to local justices to grant such licences for the sake of the profit accruing to the local authority, which, in some parts of the country at any rate, has resulted in the grant of licences in excess of legitimate public requirements. The case of clubs remains to be dealt with. The sale of intoxicating liquor in a club is not legally "sale," but "supply," and this method of distribution is under the present law entirely untaxed. Clubs in which liquor is supplied at present compete to a large extent directly i2o BETTER TIMES with the ordinary public-house, and this competition of an alternative and untaxed method of distribution is not only unfair to the holders of publicans' licences, but likely, in the long run, seriously to encroach on the re- venue derived from licence duties. In some cases, par- ticularly where licences have been suppressed under the Act of 1904, clubs have sprung- up which are mere public- houses in disguise, some of them financed by the very persons who have received compensation for the trade supposed to be lost by the withdrawal of the licence, but really transferred, with the added privilege of exemption from licence duty, to the house in which the club has been established. A scheme of licence duties for clubs, how- ever, based upon annual value, would be both inequitable and impracticable. The better class of club, from what- ever social rank its members may be drawn, possesses, as a rule, much better premises than a club which is mainly a drinking club. A tax upon annual value would, therefore, in all probability, vary almost inversely with the amount of liquor consumed, and would penalise a club for increasing its accommodation for other than drinking purposes. I therefore propose that the duty should take the form of a poundage upon the amount of the receipts from the sale of liquor. Under this proposal clubs will not be licensed, that is to say, they will not be put in the same position as licensed premises ; but an obligation will be imposed upon them to keep an account of the receipts from the sale of liquor, and a duty of threepence in the £ will be imposed on every £ of those receipts. The effect will be that clubs will not be taxed as clubs, but will simply be taxed as drinking clubs. These are, from the point of view of the Revenue, and of public interest, the most important of my proposals relating to licence duties ; but I propose to take the oppor- tunity of revising the whole system of Excise liquor licences — a system which is at present full of confusion and anomalies, both in law and practice — and to place it THE PEOPLE'S BUDGET 121 upon a simple and intelligible basis. These licences are divided into three main classes: (1) manufacturers' licences, (2) wholesale dealers' licences, (3) retailers' licences. Speaking generally, no licence of the first two classes requires a justices' licence; but, with a few minor exceptions, all the licences of the third class require such a licence. The considerations to which I have referred relating to monopoly value are, therefore, applicable only to licences of the third class, but this does not, of course, mean that a further contribution to the revenue by way of taxation cannot properly be required from the holders of the other classes of licences. Under the head of manufacturers' licences I propose to substitute for the present fixed duties of £1 and ;£io 10s. for brewers for sale and distillers of spirits respectively, graduated scales of duty according to the amount produced. In the case of the brewer's licence, the present payment of £1 will cover a production of 100 barrels only, and 12s. additional will be charged for every 50 barrels or fraction of 50 barrels above that quantity. The distiller's licence will be ^10 for any quantity not exceeding 50,000 proof gallons, with an additional £10 for every additional 25,000 or fraction of 25,000 proof gallons. For the other manufac- turers' licence the duties will still be charged at fixed rates, but I propose to increase the licence for rec- tifiers of spirits from ^10 10s. to ^15 15s., and that for makers of sweets — a term which in this case does not, of course, mean confectionery, but British-made wines — from £1 to ^5 5s. Makers of cider or perry will like- wise pay a duty of ^5 5s., except when they manufacture solely from fruit which they themselves produce, in which case the duty will not be chargeable. The system of taxing wholesale dealers' licences will be the same as that at present in force, namely, a fixed duty, but the duty will be increased. There is, however, one important change, namely, that these wholesale 122 BETTER TIMES dealers' licences will not in any case authorise retail sale, and the licences for wholesale dealing and retail sale are kept absolutely distinct. Subject to this qualification, the rates for wine (including sweets) and sweets will re- main at ;£io i os. and ^5 5s. as at present. That for beer will be raised from £3 6s. id. to ;£io 10s., and spirits from ^"io 10s. to £15 15s. A licence to deal by wholesale in cider and perry will cost ^5 5s. The existing additional licences for retail trade, issued in connection with some of the wholesale dealers' licences, will be abolished, and wholesale dealers who desire to engage in retail trade will be required to take out the ordinary retailer's off-licence, subject, however, to a re- duction of 25 per cent, in the scheduled rate for that licence. A separate retailer's off-licence will be intro- duced in the case of spirits, and the spirit retailer will accordingly be relieved from the necessity under which he at present labours, of taking out a wholesale licence which he does not require. The manufacturer's licence will cover the sale by wholesale of his own product, and dealers' licences will not require to be taken out by manu- facturers unless they desire to engage in independent business as dealers. I now come to retailers' on-licences, With the public- house and beerhouse licences I have already dealt, as also with hotels, restaurants, and clubs, which come under the same category. Theatres will, as at present, pay the same rates as public-houses, but with a maximum of £50 instead of ,£20. In the case of wine, sweets, and cider, I propose to substitute for the present fixed duties (£3 IOS - m tne case °f wine [including sweets], and £1 5s. in the other cases), a scale according to annual value in four sections, the steps being at ^20, ^50, and ;£ioo. The respective rates for wine will be £4 10s., £6 f £9, and ^12, and for sweets and cider one-half these rates. Under retailers' off-licences the same principle will be THE PEOPLE'S BUDGET 123 adopted, the rates for spirits will be ^14 for premises under ^20 annual value, ^20 between ^20 and ^50, ^30 between ^50 and ;£ioo, and ^50 above ,£100. The scale for the off beer licence (including cider and perry) will be ^3 10s., ^5, £7, or ;£io, according to the value of the premises, and for wine (including sweets) the same, but off-licences for cider alone or sweets alone will cost only £2 irrespective of annual value. The new rates will be applicable to the whole of the United Kingdom, and the anomalies at present existing as between England, Ireland, and Scotland, as regards this class of licence, will be removed. As regards Scot- land, there are various minor points in which the adoption of an uniform system throughout the United Kingdom will make a certain amount of difference, but the point which will attract attention is the modification of the conditions under which the retailers' off-licence for spirits is granted. In Scotland, at present, the holder of a grocer's spirit licence can sell wholesale, and can also sell in open vessels and in small quantities, whereas the English grocer can only sell in quart bottles or larger quantities. A great deal of business at present done by the holders of grocers' spirit licences in Scotland is really publican's business, that is to say, they sell small quantities of spirit in little glass noggins which are drunk outside the house and the glass noggin is left on the pavement out- side. There is no doubt that a business of this sort is an abuse of the retailer's off-licence, and constitutes an abuse which ought to be suppressed. The present com- bined beer and wine licences will be abolished, and per- sons desirous of selling both beer and wine will in future have to take out two separate licences. The rate for passenger vessels will be increased from £s to £ lo i tne daily rate being raised from £1 to £2, while railway restaurant cars, which do not at present pay any licence duty, will pay £1. i2 4 BETTER TIMES The charge for occasional licences will be raised from 2S. 6d. to i os. a day for a full licence, and from is. to 5s. a day for beer or wine only. I propose that the new rates should come into force on 30th September next, subject to the necessary adjust- ments with respect to unexpired existing - licences, and I estimate that the effect of the changes will be to increase the revenue of the year from licence duties by ^2,600,000 for the full year. As a matter of fact, I should rather anticipate a reduction than an increase in the second year. This will be probably a maximum year. As pay- ment of these duties is made for the whole year in ad- vance the full effect of the charge will be felt in the year in which it takes place. Against this, however, must be set the prejudicial effect upon the yield of the spirit duties which may be expected to be produced should an effort be made (and I am not sufficiently sanguine to think that it will not be made) to shift the new burden to the shoulders of the consumer by reducing the quantity or quality of the spirits supplied. On this aspect of the question I shall have more to say at a later stage. Now I come to the question of land. The first con- viction that is borne in upon the Chancellor of the Ex- chequer who examines land as a subject for taxation is this : that in order to do justice he must draw a broad distinction between land whose value is purely agricul- tural in its character and composition, and land which has a special value attached to it owing either to the fact of its covering marketable mineral deposits or be- cause of its proximity to any concentration of people. Agricultural land has not, during the past 20 or 30 years, appreciated in value in this country. In some parts it has probably gone down. I know parts of the country where the value has gone up. But there has been an enormous increase in the value of urban land and of mineral property. And a still more important and relevant consideration in examining the respective THE PEOPLE'S BUDGET 125 merits of these two or three classes of claimants to taxa- tion is this. The growth in the value, more especially of urban sites, is due to no expenditure of capital or thought on the part of the ground owner, but entirely owing to the energy and the enterprise of the community. Where it is not due to that cause, and where it is due to any expenditure by the urban owner himself, full credit ought to be given to him in taxation, and full credit will be given to him in taxation. I am dealing with cases which are due to the growth of the community, and not to anything done by the urban proprietor. It is un- doubtedly one of the worst evils of our present system of land tenure that instead of reaping the benefit of the common endeavour of its citizens a community has always to pay a heavy penalty to its ground landlords for putting up the value of their land. There are other differences between these classes of property which are worth mentioning in this connection, because they have a real bearing upon the problem. There is a remarkable contrast between the attitude adopted by a landowner towards his urban and mineral properties, and that which he generally assumes towards the tenants of his agricultural property. I will mention one or two of them. Any man who is acquainted with the balance-sheets of a great country estate must know that the gross receipts do not represent anything like the real net income enjoyed by the landowner. On the con- trary, a considerable proportion of those receipts are put back into the land in the shape of fructifying improve- ments and in maintaining and keeping in good repair structures erected by him which are essential to the proper conduct of the agricultural business upon which rents depend. Urban landlords recognise no obligation of that kind, nor do mineral royalty owners. They spend nothing in building, in improving, in repairing, or in upkeep of structures essential to the proper conduct of the business of the occupiers. The urban landowner, as i26 BETTER TIMES a rule, recognises no such obligations. I again exclude the urban landowner who really does spend money on his property; that ought to be put to his credit. The rent in the case with which I am dealing is a net rent free from liabilities, or legal obligations. Still worse, the urban landowner is freed in practice from the ordinary social obligations which are acknowledged by every agri- cultural landowner towards those whose labour makes their wealth. It is true in the rural districts that there are good landlords and there are bad landlords. But in this re- spect there are so many good landlords in the country to set up the standard that even the worst are compelled to follow at a greater or a less distance. But the worst rural landlord in this respect is better than the best urban landlord in so far as the recognition of what is due to the community who produce the rent is concerned. I will point out what I mean. First of all the rural land- owner has the obligation to provide buildings and keep them in repair. The urban landowner, as a rule, has neither of these two obligations. There is that essential difference between the two. The urban landlord and the mineral royalty owner are invariably rack-renters. They extort the highest and the heaviest ground rent or royalty they can obtain on the sternest commercial principles. They are never restrained by that sense of personal re- lationship with their tenants which exercises such a be- neficent and moderating influence upon the very same landlord in his dealings with his agricultural tenants. And the distinction is not confined merely to the rent. Take the conditions of the tenancy. I am not here to defend many of the terms which are included in many an agricultural agreement for tenancy. I think many of them are oppressive, irritating, and stupid. But com- pared with the conditions imposed upon either a colliery owner or upon a town lessee they are the very climax of generosity. Take this case — and it is not by any means THE PEOPLE'S BUDGET 127 irrelevant to the proposals which I shall have to submit to the Committee later on. What agricultural landlord in this country would ever think of letting his farm for a term of years on condition, first of all, that the tenant should pay the most extortionate rent that he could pos- sibly secure in the market, three, or four, or even five times the real value of the soil; that the tenant should then be compelled to build a house of a certain size and at a certain cost, and in a certain way, and that at the end of the term he, or rather his representatives, should hand that house over in good tenantable repair free from encumbrances to the representatives of the ground owner who has not spent a penny upon constructing it, and who has received during the whole term of the lease the highest rent which he could possibly screw in respect of the site? There is not an agricultural landlord in Great Britain who would ever dream of imposing such outrageous con- ditions upon his tenant. And yet these are the conditions which are imposed every day in respect of urban sites ; imposed upon tradesmen who have no choice in the matter; imposed upon professional men and business men who have got to live somewhere within reasonable dis- tance of their offices ; imposed even on workmen building a house for themselves, paying for it by monthly instal- ments out of their wages for 30 years purely in order to be within reasonable distance of the factory or mine or workshop at which they are earning a living. This is by no means an imaginary picture which I am drawing. If anyone thinks so I would invite him to examine for himself the evidence given before the Town Holdings Committee in 1888 and the subsequent Com- mittee of the same character held later on — Committees appointed by the Unionist administration of that date. There was the case of the Festiniog quarrymen, who had to build on rocks which could not feed a goat, and upon swamps for which the landlord could not, and did not, 128 BETTER TIMES receive more than, sometimes, 2S. an acre, and, at the outside, 7s. 6d. an acre. These were let to the quarry- men for building- purposes at rents that amounted to ^50 an acre. Leases were given for 60 years. All the im- provements were effected either by the quarrymen them- selves or by the local authority to whom they paid their rates. To build or buy their houses, most of these quarrymen generally borrowed money from building societies. As long as they were in good health and in full employment they were able to pay their monthly in- stalments. When either health or work gave out they were very hard pressed indeed. But they never got any assistance or sympathy from the landlord. As they paid, the property, instead of increasing in value for them, be- came of less and less value as it passed year by year into the possession of the landlord. There were many illus- trations of that kind given before these Committees, though not all 60 years. Some were 70, some ran up to 90, others were for lives and 21 years. You cannot put cases of this kind at all in the same category as that of an agricultural landlord who builds farmhouses and farm buildings, and generally incurs most, if not all, of the capital expenditure in and around a farm, and who by no means, if he is a fair-minded landlord, ever thinks of extorting these monstrous rents out of the necessities of his tenants. I might give other cases where land in the neighbourhood of towns has appreciated in value owing to the growth of the popula- tion. I do not wish to multiply instances, because every hon. Member must have in his own mind illustrations, with the details of which he is cognisant, from his own experience and observation of what I am referring to. I might, perhaps, take another case, and I am not sure that you can find a better or a fairer one than that which is provided by the working class suburbs of London. I am referring to the case of Woolwich. Considerable population has been attracted there largely owing to the THE PEOPLE'S BUDGET 129 expenditure of public money upon the Arsenal. If there is any increase in the value of land there, not a penny of that increment is attributable to anything done by the local •landowners. Now I would commend Members of the House to a speech delivered by the late Conservative Member for Woolwich, who in his day was one of the most striking- figures in this House. This is what he says about Woolwich : — 11 In the parish of Plumstead land used to be let for agricultural purposes for ^3 an acre. The income of an estate of 250 acres in 1845 was ^750 per annum, and the capital value at 20 years' purchase was ;£i 5,000. The Arsenal came to Woolwich ; with the Arsenal the necessity for 5,000 houses. And then came the harvest for the landlord. The land, the capital value of which had been ^15,000, now brought an income of ^"14,250 per annum. The ground landlord has received ;£i, 000,000 in ground rents already, and after 20 years hence the Woolwich estates, with all the houses upon them, will revert to the landowner's family, bringing another million, meaning altogether a swap of ;£i 5,000 for a sum of ^2, 000,000." There are many cases of a similar character which will readily occur to the memory of every hon. Member who is at all acquainted with the subject. Take well-known properties in Lancashire and Cheshire in regard to which evidence was given. And yet, although the landlord, without any exertion of his own, is now in these cases in receipt of an income which is ten or even a hundred-fold of what he was in the habit of receiving when these properties were purely agricultural in their character, and although he is in addi- tion to that released from all the heavy financial obliga- tions which are attached to the ownership of this land as agricultural property, he does not contribute a penny out of his income towards the local expenditure of the com- ic i 3 o BETTER TIMES munity which has thus made his wealth, in the words of John Stuart Mill, "whilst he was slumbering." Is it too much, is it unfair, is it inequitable, that Parliament should demand a special contribution from these fortunate owners towards the defence of the country and the social needs of the unfortunate in the community, whose efforts have so materially contributed to the opulence which they are enjoying? There is another aspect of this matter which I should like to say a word upon before I come to the actual pro- posals of the Government. I have dwelt upon the funda- mental difference in the demeanour of landowners to- wards their urban tenants, and that which under the inspiration of more high-minded and public-spirited prin- ciples marks their conduct towards their agricultural tenants. There is no doubt that the spirit of greed is unconsciously much more dominant and unrestrained in the former case. One disastrous result of this is that land which is essen- tial to the free and healthy development of towns is being kept out of the market in order to enhance its value, and that towns are cramped and their people become over- crowded in dwellings which are costly without being com- fortable. You have only to buy an ordnance survey map and put together the sheets which include some town of your acquaintance and the land in its immediate vicinity, and you will see at once what I mean. You will find, as a rule, your town or village huddled in one corner of the map, dwellings jammed together as near as the law of the land will permit, with an occasional courtyard, into which the sunshine rarely creeps, but with nothing that would justify the title of "garden." For it is the interest of the landlord to pile together on the land every scrap of bricks and mortar that the law will allow; and yet, outside, are square miles of land unoccupied, or at least rebuilt upon. Land in the town seems to let by the grain, as if it were radium. Not merely towns, but THE PEOPLE'S BUDGET 131 villages (and by villages and towns I mean the people who dwell in them) suffer extremely from the difficulty which is experienced in obtaining land, and by the nig- gardliness with which sites are measured out. You cannot help feeling how much healthier and happier the community could have been made in these towns and villages if they had been planned on more spacious and rational principles, with a reasonable allow- ance of garden for every tenant, which would serve as a playground, as vegetable and flower garden, for the work- man and his family, and which would even, in many dis- tricts, help materially to solve the problem of unemploy- ment. The same observations apply to the case of mineral royalties. There, all the expenditure is incurred by the capitalist, who runs the risk of losing his capital, while the miner risks his life ; and I do not think it is too much to ask the royalty owner, who has contributed no capital and runs no risk, to share in this emergency in bearing the large burden that is cast upon us for the defence of the country, and to help to pay the large sum of money needed to make provision for social needs, for the aged, and for those who have been engaged in digging out mining royalties all their lives. My present proposals are proposals both for taxation and for valuation. Although very moderate in character, they will produce an appreciable revenue in the present year and more in future years. The proposals are three in number. First, it is proposed to levy a tax on the increment of value accruing to land from the enterprise of the com- munity or the landowner's neighbours. We do not pro- pose to make this tax retrospective. It is to apply to future appreciation in value only, and will not touch any increment already accrued. We begin therefore with a valuation of all land at the price which it may be expected to realise at the present time, and we propose to charge K 2 i 3 2 BETTER TIMES the duty only upon the additional value which the land may hereafter acquire. The valuations upon the differ- ence between which the tax will be chargeable will be valuations of the land itself — apart from buildings and other improvements — and of this difference, the strictly unearned increment, we propose to take one-fifth, or 20 per cent., for the State. We start with the valuation of the present moment. No increment that has accrued before the date of the valuation will count. We value the land at its present value, and then count the increment from that point. You get the increment on two bases. You get at it when the land is sold. Then it will be discovered what the actual increment is. We propose to charge 20 per cent, on the increment which the landlord receives, ascertained by comparing what he receives with the valuation to be made immediately after the passing of the Finance Bill. It would also be made on the passing of the property upon death ; and if there is any increment which is not due to expenditure by the landowner himself on improve- ments, but is due merely to the appreciation of land in the neighbourhood owing to the growth of population or some other cause, then the same charge would be made on that increment. Corporations (which do not die) will pay upon property owned by them at stated intervals of years, being allowed the option of spreading the payment of the duty upon the increment accruing in one period over the following period by annual instalments. Upon the creation of a lease or upon the transfer of an interest in land, only such proportion of the increment duty will be payable as the value of the lease or of the transferred interest bears to the value of the fee simple of the land, and increment duty once paid will frank the increment or the portion of the increment in respect of which it has been paid from any further charge of the duty. As regards the duty payable on the occasion of the grant of a lease, provision will be made for payment THE PEOPLE'S BUDGET 133 by instalments, inasmuch as in such circumstances no capital sum is available for payment of the duty. As the standard of comparison is the value of the land at the present date, and the tax will be levied only upon the increment subsequently accruing - , the yield in the first year will necessarily be small, and I do not think it safe to estimate for more than ^"50,000 in 1909-10. The amount will increase steadily in future years, and ulti- mately become a fruitful source of revenue. The second proposal relating- to land is the imposition of a tax on the capital value of all land which is not used to the best advantage. The owner of valuable land which is required or likely in the near future to be required for building purposes, who contents himself with an income therefrom wholly incommensurate with the capital value of the land in the hope of recouping himself ultimately in the shape of an increased price, is in a similar position to the investor in securities who re-invests the greater part of his dividends; but while the latter is required to pay income tax both upon the portion of the dividends en- joyed and also upon the portion re-invested, the former escapes taxation upon his accumulating capital alto- gether, and this, although the latter by his self-denial is increasing the wealth of the community, while the former, by withholding from the market land which is required for housing or industry, is creating a speculative inflation of values which is socially mischievous. We propose to redress this anomaly by charging an annual duty of Jd. in the £ on the capital value of unde- veloped land. The same principle applies to ungotten minerals, which we propose similarly to tax at Jd. in the £, calculated upon the price which the mining rights might be expected to realise if sold in open market at the date of valuation. The tax on undeveloped land will be charged upon unbuilt-on land only, and all land of which the capital value does not exceed ^50 an acre will be exempted, as i 3 4 BETTER TIMES also any land exceeding that value with respect to which it can be shown to the satisfaction of the Commissioners of Inland Revenue that no part of the value is due to the capability of the land for use for building purposes. Under these provisions all land having a purely agricul- tural value will be exempt. Further, exemptions will be made in favour of gardens and pleasure grounds not exceeding an acre in extent, and parks, gardens, and open spaces which are open to the public as of right, or to which reasonable access is granted to the public, where that access is recognised by the Commissioners of Inland Revenue as contributing to the amenity of the locality. Where undeveloped land forms part of a settled estate, provision will be made to enable a limited owner who has not the full enjoyment of the land to charge the duty upon the corpus of the property. The valuation upon which the tax will be charged will be the value of land as a cleared site, deductions being allowed for any expenditure necessary to clear it, and likewise for any value attributable to works of a per- manent character executed by, or on behalf of, any person interested in the land within a specified period of the date of valuation, for the purpose of fitting the land for build- ing purposes. Until a valuation has been obtained it is impossible to estimate the yield of the tax with any pre- cision, and the yield in the first year is made still more doubtful by the fact that, pending the completion of the valuation, the tax must be collected provisionally upon the basis of declarations by owners — arrears (if any) to be collected later when the valuation has been completed. But as these declarations will also form the basis for the charge of increment value duty until the valuation is completed, with respect to which an under-declaration may have serious consequences, it may be expected that they will be sufficiently reliable to allow at any rate a THE PEOPLE'S BUDGET 135 large proportion of the whole amount due to be obtained within the year. I therefore feel justified in estimating that the duty of Jd. in the pound on undeveloped land and ungotten minerals will produce not less than .£350,000 in the current financial year. My third proposal under the head of land is a 10 per cent, reversion duty upon any benefit accruing to a lessor from the determination of a lease, the value of the benefit to be taken to be the amount (if any) by which the total value of the land at the time the lease falls in exceeds the value of the consideration for the grant of the lease, due regard being had, however, for the case of the reversioner whose interest is less than a freehold. The reversion at the end of a long building lease having no appreciable market value at the time the lease is granted is, when the lease falls in, of the nature of a windfall, and can be made to bear a reasonable tax without hardship. Some consideration must, however, be shown to the purchaser of an approaching reversion where the pur- chase has taken place before the imposition of such a duty was contemplated. I therefore propose to make special provision to deal with that case. Special pro- vision will also be made to meet the case of an increment value, in respect of which increment duty is payable under my first proposal, being included in a reversion. Another case in which special consideration should, I think, be shown is that of a lease determined by agree- ment between lessor and lessee before its expiration for the purpose of renewal. Towards the termination of a lease the lessee may be willing and even anxious to make improvements in the premises, provided that he can ob- tain a decent security of tenure at a reasonable rent. His business may be crippled for want of proper accommoda- tion, but he is at the mercy of the ground landlord, who, 136 BETTER TIMES in many cases, wrings out of him the uttermost farthing before agreeing to a renewal which is to the interest of both parties. If the parties fail to come to terms the opportunity for an improvement, possibly of great public utility, is at any rate postponed, and perhaps irretrievably lost. The importance of facilitating such renewals in the interests of lessees, of the building trade, of the public generally, and even of the ground landlord himself, can scarcely be exaggerated. Accordingly in cases where a reversion is anticipated in circumstances of this char- acter, and comes under taxation at an earlier date than would have happened in ordinary course, by reason of an agreement entered into with the lessee to enable him to improve the premises, I propose to make a special abate- ment of duty proportionate to the unexpired period of the original lease which is surrendered, and I have great hopes that this allowance, coupled with the fact that the value of the reversion for the purpose of the duty will be calculated upon the difference between the consideration for the old and the consideration for the new lease, will induce owners to grant renewals more readily and upon more favourable terms than at present, and so tend to remove one of the most mischievous effects of the lease- hold system. There are no official statistics of the value of leasehold property, or of the dates upon which existing leases deter- mine, and I am therefore not in a position to give more than a conjectural estimate of the annual yield of this duty. There is, besides, reason to believe that the number of leases falling in from year to year is by no means a constant quantity, and this makes the task of esti- mating for a particular year still more difficult. On the whole, I do not think that I can in the present year rely on a larger revenue than ^100,000 from this source, and I propose, therefore, to estimate the yield of the three land taxes for the current year at ^500,000, an amount which, however, must not, as I have already explained, THE PEOPLE'S BUDGET 137 be regarded as any indication of the revenue they will ultimately produce. These proposals necessarily involve a complete recon- struction of the method of valuing property. The exist- ing taxes upon real property are levied upon the annual value of such property as a whole without distinguishing between the value which resides in the land itself and that which has been added to it by the enterprise of the owner in erecting buildings or effecting other improvements. Even apart from this, the methods of valuation vary in different localities, with the result that the incidence of existing burdens is very uneven. The intensely complex character of British land tenure introduces a further com- plication. There are no official records of the various in- terests in land, existing rates and taxes being charged upon the occupier, who is left to recover from the other interests (if any) either by a rough-and-ready scheme of statutory deductions from rent or by making such bar- gain as he is able with his landlord. It now becomes necessary for the purposes both of the increment value duty and of the undeveloped land duty to distinguish be- tween the two elements in the value of real property, while, as the increment value duty and the reversion duty will both of them have to be collected from the particular interests to which those accretions respectively accrue, a complete register of the owners and other persons in- terested in land, with full details of the various interests, will ultimately be required. The preparation of such a register will be a lengthy task which must in the main be proceeded with as each separate property comes under taxation, but the question of valuation is of greater urgency. The existing valua- tion lists on an annual value basis (even if they repre- sented the true annual values, which in many cases they do not) would be of little use for the purpose of deter- mining capital values — the basis of the new duties — and it will therefore be necessary to provide machinery for a 138 BETTER TIMES complete valuation on a capital basis of the whole of the land in the United Kingdom. I do not think I will enter into particulars now of the method which we propose to follow in valuation. I shall do that when we come to discuss the Resolution in Committee. Now I have dis- posed of direct taxation. I am not going at this late hour to enter into any dis- cussion of the principles which ought to guide a Finance Minister in the imposition of indirect taxation. But one thing I am sure will be accepted by every Member of this House, and that is that we ought at any rate to avoid taxes on the necessaries of life. I referred some time ago, in the course of a discussion in this House, to the old age pension officers' reports. There was one thing in those reports which struck me very forcibly, and that was that they all reported that the poorer the people they had to deal with, the more was their food confined to bread and tea. Of the price of that tea, which of course was of the poorest quality, half goes to the tax gatherer. That is always the worst of indirect taxation on the people. The poorer they are the more heavily the tax falls upon them. Tea and sugar are necessaries of life, and I think that the rich man who would wish to spare his own pocket at the expense of the bare pockets of the poor is a very shabby rich man indeed ; therefore I am sure that I carry with me the assent of even the classes upon whom I am putting very heavy burdens, that when we come to in- direct taxes, at any rate those two essentials of life ought to be exempt. There are three other possible sources — beer, spirits, and tobacco. An increase in the beer duty, sufficiently great to justify an addition to the retail price, would pro- duce a very large sum — larger, indeed, than I require for my present purposes — and would have, besides, in all probability, the effect of diverting the consumption of alcohol from beer to spirits — a change which would cer- THE PEOPLE'S BUDGET 139 tainly not conduce to the social health of the country. The incidence of a small duty, on the other hand, would, to a large extent, at any rate in the first instance, be upon the liquor trade rather than upon the consumer; and I should not feel justified in imposing such a burden in a year when so considerable an additional contribution is being- called for from that trade under the head of licence duties. The case of spirits is, however, somewhat different. I am aware that the small increases in the spirit duties which were made by Lord St. Aldwyn during the South African war were disappointing in their financial results, and that any further increase would undoubtedly result in a considerably diminished consumption, which would, to a very large extent at any rate, nullify the benefit to the revenue which might otherwise be expected to accrue from it. It does not, however, follow from the result of this small experiment that we have reached the absolute limit of the profitable taxation of spirits, or that a sub- stantial increase in the rates of duty would not, in spite of its effects upon consumption, produce an appreciable amount of revenue. I am disposed, at any rate, to try the experiment, which, even if it ends — to take the most pessimistic view — in no larger revenue being raised from the higher rate upon a diminished consumption, than by the existing rate upon the present consumption, will still, in my view, be conducive to the best interests of the nation. It is perfectly true that the small duties imposed up to the present have not been productive. The reason for that was that the publican, or the retailer, found that, probably by changes in the character of the whisky, or by other means, he was able to get his money in another way, and the consumption decreased by a considerable amount. It is idle, therefore, to put on anything except a fairly heavy tax, and I impose a duty which the publican will find it to his interest to charge. I propose to raise the present duties (Customs and Excise) on spirits by 140 BETTER TIMES 3s. gd. per gallon, an amount which will, on the one hand, justify an increase in retail prices, and on the other hand, assuming such an increase to be at the rate of a halfpenny per glass, will leave a margin to the publican to recoup himself for loss of profits arising from decreased consumption, and have something over towards miti- gating the pressure of the new licence duty. The mere paper increase of a duty of that sort would be very con- siderable, but I do not expect to get anything approxi- mating to that. This year there are exceptional circumstances. First of all, the forestalments are very heavy. It is not merely forestalments up to the end of the last financial year, but they have been going on since, so that the wholesale people have got in hand sufficient stock to carry them on comfortably for a good many weeks at any rate. There- fore, we do not get the increase for some weeks, possibly for some months. That will make a very considerable hole in the estimate which I should otherwise have made of the yield of those taxes. Not only that, but I have not the faintest doubt that it will have the effect of decreasing consumption; that will be the inevitable effect. It may drive a good many from spirits to try beer and to expedients of that sort. It will involve a very consider- able increase in the price of the commodity, and there- fore, I think, must have a very considerable effect in diminishing the actual consumption. Taking all these influences into consideration, I do not feel safe in counting upon receiving more than ^"1,600,000 additional revenue as the result of the change in 1909-10. I have still nearly two millions more to find, and for this I must turn to tobacco — from a fiscal point of view, a much healthier source of revenue. The present rate of duty on unmanufactured tobacco containing 10 per cent. or more of moisture is 3s. a pound, and the increase I propose is 8d. a pound, with equivalent additions to the rates for cigars, cigarettes, and manufactured tobacco. THE PEOPLE'S BUDGET 141 Now, one pound of unmanufactured tobacco, as im- ported, produces, after allowance has been made on the one hand for waste in manufacture, and on the other for the moisture which is added in preparing it for sale, nearly one and one-fifth pounds of the tobacco of retail trade, so that an addition of a halfpenny an ounce to the retail price leaves the tobacco trade with an ample margin to finance the increased duty. In estimating the additional yield from the increased rate of duty, regard must be had, as under the spirit duty, to the considerations that one month of the year has already passed, and that the duty-paid stocks are inflated by forestalments. Allowance must also be made — but in this case a comparatively small allowance — for decrease of consumption consequent upon the higher rate of duty. My estimate, therefore, is £1,900,000 for 1909-10, and £2,250,000 for a full year. I am now in a position to present my final balance sheet for 1909-10. The Revenue, on the present basis of taxa- tion, being ... ... ... ... ...£148,390,000 And the Expenditure, on the basis of the Estimates already presented to Parliament 164, 152,000 The Account, before adjustment, shows, as I have already explained, an anticipated deficit of £15,762,000 To the Revenue side of the Account must be added : — Under Customs and Excise : — New duty of 3d. a gallon on petrol £340,000 Increase of spirit duties ... 1,600,000 Increase of tobacco duties ... 1,900,000 Revision and increase of liquor licence duties ... ... ... 2,600,000 Motor car licences ... ... 260,000 Making a total addition under the head of Customs and Excise of ,£6,700,000 i 4 2 BETTER TIMES Under the various Inland Revenue duties the new pro- posals are estimated to produce': — Estate duties ... ... ... ^2,850,000 Stamps ... ... ... 650,000 Income tax (net) ;.. ... 3,500,000 And the new land taxes ... 500,000 Or a total from new and increased Inland Revenue duties of ... ... ... ... ^7,500,000 These amounts (namely, ^6,700,000 from Customs and Excise and ^"7,500,000 from Inland Revenue) added together give as the total estimated yield of new taxation ^14,200,000 Adding these sums to the estimated Revenue on the existing basis ... ... ... 148,390,000 We arrive at ... ... ... ... ... ^162, 590,000 as the estimated Revenue of the year. To the Expenditure side of the Account must be added : — Under the head of Consolidated Fund Services : — The proceeds of the petrol duty and motor car licences which will be paid to the new fund for improvement of roads ... ... ^600,000 Under Civil Services : — The amount required for the year's grant to the new De- velopment Fund ... ... ^200,000 For labour exchanges ... ... 100,000 Making a total addition under Civil Services of 300,000 and under Customs and Excise and Inland Revenue ... ... ... ... ... 50,000 for the payment of valuers and other ad- ministrative expenses arising in connection with the proposed taxes on land. Adding these sums together we arrive at a total additional expenditure of ;£95o,ooo THE PEOPLE'S BUDGET 143 Brought forward ... ... ... ... ,£950,000 which, with the expenditure on the basis of the Estimates already presented ... 164,152,000 increases the total estimated expenditure for the year to £165,102,000 Deducting-, under the head of Consolidated Fund Services, the amount of the pro- posed reduction of the Fixed Debt Charge 3,000,000 We arrive at ... ... ... ... ...£162,102,000 as the final figure on the Expenditure side of the Account. The Total Estimated Revenue thus being £162,590,000 and the Total Estimated Expenditure there remains a margin for contingencies of £488,000 There will be a very considerably increased demand upon the yield of those taxes for the coming year. If the Navy expenditure is at the maximum, which I an- ticipate, most of the increased revenue will be absorbed by naval expenditure. The balance will be appropriated to those schemes of social reform which I sketched at the beginning of my observations. This is a War Budget. It is for raising money to wage implacable warfare against poverty and squalidness. I cannot help hoping and believing that before this gene- ration has passed away we shall have advanced a great step towards that good time when poverty, and the wretchedness and human degradation which always fol- low in its camp will be as remote to the people of this country as the wolves which once infested its forests. THE LAND AND THE PEOPLE Limehouse, July 30, 1909. A few months ago a meeting was held not far from this hall, in the heart of the City of London, demanding that the Government should launch into enormous expenditure on the Navy. That meeting ended up with a resolution promising that those who passed that resolution would give financial support to the Government in their under- taking. There have been two or three meetings held in the City of London since attended by the same class of people, but not ending up with a resolution promising to pay. On the contrary, we are spending the money, but they won't pay. What has happened since to alter their tone? Simply that we have sent in the bill. We started our four "Dreadnoughts." They cost eight millions of money. We promised them four more ; they cost another eight millions. Somebody has to pay, and then these gentlemen say, " Perfectly true ; somebody has to pay, but we would rather that somebody were somebody else." We started building; we wanted money to pay for the building; so we sent the hat round. We sent it round amongst workmen, and the miners and weavers of Derby- shire and Yorkshire, 1 and the Scotchmen of Dumfries, who, like all their countrymen, know the value of money, they all dropped in their coppers. We went round Bel- gravia, and there has be%i such a howl ever since that it has well-nigh deafened us. 1 A reference to the by-elections which took place in Derbyshire, Yorkshire and Dumfries a few days before this speech was delivered, when the main issue before the electors was the Budget which in each three divisions was supported by substantial maiorities. 144 THE LAND AND THE PEOPLE 145 But they say, " It is not so much the ' Dreadnoughts ' we object to, it is pensions." If they objected to pensions, why did they promise them? They won elections on the strength of their promises. It is true they never carried them out. Deception is always a pretty contemptible vice, but to deceive the poor is the meanest of all. They go on to say, "When we promised pensions we meant pensions at the expense of the people for whom they were provided. We simply meant to bring in a Bill to compel workmen to contribute to their own pensions." If that is what they meant, why did they not say so? The Budget, as your chairman has already so well reminded you, is introduced not merely for the purpose of raising barren taxes, but taxes that are fertile, taxes that will bring forth fruit — the security of the country which is paramount in the minds of all. The provision for the aged and deserving poor — was it not time something was done? It is rather a shame that a rich country like ours — probably the richest in the world, if not the richest the world has ever seen — should allow those who have toiled all their days to end in penury and possibly starvation. It is rather hard that an old workman should have to find his way to the gates of the tomb, bleeding and footsore, through the brambles and thorns of poverty. We cut a new path for him — an easier one, a pleasanter one, through fields of waving corn. We are raising money to pay for the new road — aye, and to widen it so that 200,000 paupers shall be able to join in the march. There are many in the country blessed by Providence with great wealth, and if there are amongst them men who grudge out of their riches a fair contribution towards the less fortunate of their fellow-countrymen they are very shabby rich men. We propose to do more by means of the Budget. We are raising money to provide against the evils and the sufferings that follow from unemployment. We are raising money for the purpose of assisting our great friendly societies to provide for the sick and the widows and L 146 BETTER TIMES orphans. We are providing money to enable us to develop the resources of our own land. I do not believe any fair- minded man would challenge the justice and the fairness of the objects which we have in view in raising this money. Some of our critics say, "The taxes themselves are unjust, unfair, unequal, oppressive — notably so the land taxes." They are engaged, not merely in the House of Commons, but outside the House of Commons, in assailing these taxes with a concentrated and a sus- tained ferocity which will not allow even a comma to escape with its life. Now, are these taxes really so wicked ? Let us examine them ; because it is perfectly clear that the one part of the Budget that attracts all this hos- tility and animosity is that part which deals with the taxa- tion of land. Well, now let us examine it. I do not want you to consider merely abstract principles. I want to invite your attention to a number of concrete cases ; fair samples to show you how in these concrete illustrations our Budget proposals work. Let us take them. Let us take first of all the tax on undeveloped land and on increment. Not far from here, not so many years ago, between the Lea and the Thames, you had hundreds of acres of land which was not very useful even for agricultural purposes. In the main it was a sodden marsh. The commerce and the trade of London increased under Free Trade, the ton- nage of your shipping went up by hundreds of thousands of tons and by millions ; labour was attracted from all parts of the country to cope with all this trade and business which was done here. What happened? There was no housing accommodation. This Port of London became overcrowded, and the population overflowed. That was the opportunity of the owners of the marsh. All that land became valuable building land, and land which used to be rented at £2 or ^3 an acre has been selling within the last few years at ^2,000 an acre, ,£3,000 an acre, £6,000 an acre, £8,000 an acre. Who created that increment? Who made that golden swamp? Was it the THE LAND AND THE PEOPLE 147 landlord? Was it his energy? Was it his brains — a very bad look-out for the place if it were — his forethought? It was purely the combined efforts of all the people engaged in the trade and commerce of the Port of London — trader, merchant, shipowner, dock labourer, workman — everybody except the landlord. Now, you follow that transaction. Land worth £2 or ^3 an acre running up to thousands. During the time it was ripening the landlord was paying his rates and his taxes not on £2 or £2 an acre. It was agricultural land, and because it was agricultural land a munificent Tory Government voted a sum of two millions to pay half the rates of those poor distressed landlords, and you and I had to pay taxes in order to enable those landlords to pay half their rates on agricultural land, while it was going up every year by hundreds of pounds through your efforts and the efforts of your neighbours. That is now coming to an end. On the walls of Mr. Balfour's meeting last Friday were the words, "We protest against fraud and folly." So do I. These things I tell you of have only been possible up to the present through the " fraud " of the few and the " folly " of the many. What is going to happen in the future? In future those landlords will have to contribute to the taxa- tion of the country on the basis of the real value — only one halfpenny in the pound ! Only a halfpenny ! And that is what all the howling is about. There is another little tax called the increment tax. For the future what will happen? We mean to value all the land in the kingdom. And here you can draw no dis- tinction between agricultural land and other land, for the simple reason that East and West Ham was agricultural lancT a Few years ago. And if land goes up in the future by hundreds and thousands an acre through the efforts of the community, the community will get 20 per cent, of that increment. Ah ! what a misfortune it is that there was not a Chancellor of the Exchequer to do this thirty l 2 i 4 8 BETTER TIMES years ago ! We should now have been enjoying an abundant revenue from this source. I have instanced West Ham. Let me give you a few more cases. Take cases like Golder's Green and others of a similar kind where the value of land has gone up in the course, perhaps, of a couple of years through a new tramway or a new railway being opened. Golder's Green to begin with. A few years ago there was a plot of land there which was sold at ^160. Last year I went and opened a tube railway there. What was the result? This year that very piece of land has been sold for ^2,100 — ;£i6o before the railway was opened — before I went there — ^2,100 now. My Budget demands 20 per cent, of that. There are many cases where landlords take advan- tage of the needs of municipalities and even of national needs and of the monopoly which they have got in land in a particular neighbourhood in order to demand extortionate prices. Take the very well-known case of the Duke of Northumberland, when a county council wanted to buy a small plot of land as a site for a school to train the children who in due course would become the men labouring on his property. The rent was quite an insignificant thing; his contribution to the rates I think was on the basis of 30s. an acre. What did he demand for it for a school? ^900 an acre. All we say is this — if it is worth ^900, let him pay taxes on ^900. There are several of these cases that I want to give to you. Take the town of Bootle, a town created very much in the same way as these towns in the East of London, by the growth of a great port, in this case Liver- pool. In 1879 tne rates of Bootle were ^9,000 a year — the ground rents were ^10,000 — so that the land- lord was receiving more from the industry of the com- munity than all the rates derived by the municipality for the benefit of the town. In 1898 the rates had gone up to ^94,000 a year — for improving the place, con- THE LAND AND THE PEOPLE 149 structing roads, laying out parks, and extending lighting and opening up the place. But the ground landlord was receiving in ground rents ^100,000. It is time that he should pay for all this value, and the Budget makes him pay. Another case was given me from Richmond which is very interesting. The Town Council of Richmond re- cently built some workmen's cottages under a housing scheme. The land appeared on the rate-book as of the value of ^4, and, being agricultural, the landlord only paid half the rates, and you and I paid the rest for him. It is situated on the extreme edge of the borough, therefore not very accessible, and the town council naturally thought they would get it cheap. But they did not know their landlord. They had to pay ^'2,000 an acre for it. The result is that instead of having a good housing scheme with plenty of gardens and open space, plenty of breathing space, plenty of room for the workmen at the end of their days, forty cottages had to be crowded on two acres. If the land had been valued at its true value, that landlord would have been at any rate contri- buting his fair share of the public revenue, and it is just conceivable that he might have been" driven to sell at a more reasonable price. I do not want to weary you with these cases. But I could give you many. I am a member of a Welsh county council, and landlords even in Wales are not more reasonable. The police committee the other day wanted a site for a police station. Well, you might have imagined that if a landlord sold land cheaply for anything it would have been for a police station. The housing of the working classes — that is a different matter. But a police station means security for property. Not at all. The total popula- tion of Carnarvonshire is not as much — I am not sure it is as great — as the population of Limehouse alone. It is a scattered area ; no great crowded populations there. And yet they demanded for a piece of land which was contri- i 5 o BETTER TIMES buting 2s. a year to the rates, ^2,500 an acre ! All we say is, "If their land is as valuable as all that, let it have the same value in the assessment book as it seems to possess in the auction-room." There was a case from Greenock the other day. The Admiralty wanted a torpedo range. Here was an oppor- tunity for patriotism ! These are the men who want an efficient Navy to protect our shores, and the Admiralty state that one element in efficiency is straight shooting, and say : " We want a range for practice for torpedoes on the coast of Scotland." There was a piece of land there which had a rating value of ^11 2 s., and it was sold to the nation for ^27,225. And these are the gentlemen who accuse us of robbery and spoliation ! Now, all we say is this : " In future you must pay one halfpeny in the pound on the real value of your land. In addition to that, if the value goes up, not owing to your efforts — if you spend money on improv- ing it we will give you credit for it — but if it goes up owing to the industry and the energy of the people living in that locality, one-fifth of that increment shall in future be taken as a toll by the State." They say : "Why should you tax this increment on landlords and not on other classes of the community?" They say: "You are taxing the landlord because the value of his property is going up through the growth of population, through the increased prosperity of the community. Does not the value of a doctor's business go up in the same way?" Ah, fancy their comparing themselves for a moment ! What is the landlord's increment? Who is the landlord? The landlord is a gentleman — I have not a word to say about him in his personal capacity — the landlord is a gentleman who does not earn his wealth. He does not even take the trouble to receive his wealth. He has a host of agents and clerks to receive it for him. He does not even take the trouble to spend his wealth. He has a host THE LAND AND THE PEOPLE 151 of people around him to do the actual spending for him. He never sees it until he comes to enjoy it. His sole function, his chief pride is stately consumption of wealth produced by others. What about the doctor's income? How does the doctor earn his income? The doctor is a man who visits our homes when they are darkened with the shadow of death ; who, by his skill, his trained courage, his genius, wrings hope out of the grip of despair, wins life out of the fangs of the Great Destroyer. All blessings upon him and his divine art of healing that mends bruised bodies and anxious hearts. To compare the reward which he gets for that labour with the wealth which pours into the pockets of the landlord purely owing to the possession of his monopoly is a piece — if they will forgive me for say- ing so — of insolence which no intelligent man would tolerate. So much then for the halfpenny tax on unearned incre- ment. Now I come to the reversion tax. What is the reversion tax? You have got a system in this country which is not tolerated in any other country in the world, except, I believe, Turkey — a system whereby landlords take advantage of the fact that they have got complete con- trol over the land to let it for a term of years, spend money upon it in building, and year by year the value passes into the pockets of the landlord, and at the end of 60, 70, 80, or go years the whole of it passes away to the pockets of a man who never spent a penny upon it. In Scotland they have a system of 999 years lease. The Scotsmen have a very shrewd idea that at the end of 999 years there will probably be a better land system in existence, and they are prepared to take their chance of the millennium coming round by that time. But in this country we have 60 years leases. I know districts — quarry districts — in Wales where a little bit of barren rock on which you could not feed a goat, where the landlord could not get a shilling an acre for agricultural rent, is let to quarrymen for the purpose of building houses at a ground rent of 30s. or £2 a house. 152 BETTER TIMES The quarryman builds his house. He goes to a building society to borrow money. He pays out of his hard- earned weekly wage contributions to the building society for 10, 20, or 30 years. By the time he becomes an old man he has cleared off the mortgage, and more than half the value of the house has passed into the pockets of the landlord. You have got cases in London here. There is the famous Gorringe case. In that case advantage was taken of the fact that a man had built up a great business. The landlords said in effect, "You have built up a great business here ; you cannot take it away ; you cannot move to other premises because your trade and goodwill are here; your lease is coming to an end, and we decline to renew it except on the most oppressive terms." The Gorringe case is a very famous case. It was the case of the Duke of Westminster. Oh, these dukes, how they harass us ! Mr. Gorringe had got a lease of the premises at a few hundred pounds a year ground-rent. He built up a great business there as a very able business man. When the end of the lease came he went to the Duke of Westminster, and he said, "Will you renew my lease? I want to carry on my business here." The reply was, "Oh, yes, I will; but only on condition that the few hundreds a year you pay for ground rent shall in the future be ^4,000 a year." In addition to that Mr. Gorringe had to pay a fine of ^50,000, and to build up huge premises at enormous expense, according to plans approved by the Duke of Westminster. All I can say is this — if it is confiscation and robbery for us to say to that duke that, being in need of money for public purposes, we will take 10 per cent, of all you have got, for those purposes, what would you call his taking nine-tenths from Mr. Gorringe? These are the cases we have to deal with. Look at all this leasehold system. This system — it is the THE LAND AND THE PEOPLE 153 system I am attacking, not individuals — is not business, it is blackmail. I have no doubt some of you have taken the trouble to peruse some of those leases, and they are really worth reading, and I will guarantee that if you circulate copies of some of these building and mining leases at Tariff Reform meetings, and if you can get the workmen at those meetings and the business men to read them, they will come away sadder but much wiser men. What are they? Ground rent is a part of it — fines, fees; you are to make no alteration without somebody's consent. Who is that somebody? It is the agent of the landlord. A fee to him. You must submit the plans to the landlord's architect, and get his consent. There is a fee to him. There is a fee to the surveyor; and then, of course, you cannot keep the lawyer out. He always comes in. And a fee to him. Well, that is the system, and the landlords come to us in the House of Commons, and they say: "If you go on taxing reversions we will grant no more leases." Is not that horrible? No more leases, no more kindly landlords, with all their retinue of good fairies — agents, surveyors, lawyers, ready always to receive ground rents, fees, premiums, fines, reversions. The landlord has threatened us that if we proceed with the Budget he will take his sack clean away from the hopper, and the grain which we are all grinding in order to fill his sack will go into our own. Oh, I cannot believe it. There is a limit even to the wrath of outraged landlords. We must really appease them ; we must offer up some sacrifice to them. Suppose we offer the House of Lords to them? Now, unless I am wearying you I have just one other land tax to speak to you about. The landlords are re- ceiving eight millions a year by way of royalties. What for? They never deposited the coal in the earth. It was not they who planted those great granite rocks in Wales. Who laid the foundations of the mountains? Was it the landlord? And yet he, by some divine right, demands 154 BETTER TIMES as his toll — for merely the right for men to risk their lives in hewing those rocks — eight millions a year ! I went down to a coalfield the other day, and they pointed out to me many collieries there. They said : " You see that colliery. The first man who went there spent a quarter of a million in sinking shafts, in driving mains and levels. He never got coal, and he lost his quarter of a million. The second man who came spent ^100,000 — and he failed. The third man came along and he got the coal." What was the landlord doing in the meantime? The first man failed ; but the landlord got his royalty, the landlord got his dead-rent — and a very good name for it. The second man failed, but the landlord got his royalty. These capitalists put their money in, and I asked, "When the cash failed, what did the landlord put in?" He simply put in the bailiffs. The capitalist risks, at any rate, the whole of his money ; the engineer puts his brains in ; the miner risks his life. Have you been down a coal mine? I went down one the other day. We sank down into a pit half a mile deep. We then walked underneath the mountain, and we had about three-quarters of a mile of rock and shale above us. The earth seemed to be straining — around us and above us — to crush us in. You could see the pit-props bent and twisted and sun- dered, their fibres split in resisting the pressure. Some- times they give way, and then there is mutilation and death. Often a spark ignites, the whole pit is deluged in fire, and the breath of life is scorched out of hundreds of breasts by the consuming flame. In the very next colliery to the one I descended, just a few years ago, 300 people lost their lives in that way ; and yet when the Prime Minister and I knock at the doors of these great landlords, and say to them : " Here, you know these poor fellows who have been digging up royalties at the risk of their lives, some of them are old, they have survived the perils of their trade, they are broken, they can earn no more. Won't you give something towards keeping them THE LAND AND THE PEOPLE 155 out of the workhouse? " they scowl at us. We say, "Only a ha'penny, just a copper." They retort, "You thieves ! " And they turn their dogs on to us, and you can hear their bark every morning. If this is an indica- tion of the view taken by these great landlords of their responsibility to the people who, at the risk of life, create their wealth, then I say their day of reckoning is at hand. The other day, at the great Tory meeting held at the Cannon Street Hotel, they had blazoned on the walls, " We protest against the Budget in the name of democracy, liberty, and justice." Where does the democracy come in in this landed system? Where is the liberty in our leasehold system? Where is the seat of justice in all these transactions? I claim that the tax we impose on land is fair, is just, and is moderate. They go on threaten- ing that if we proceed they will cut down their benefactions and discharge labour. What kind of labour? What is the labour they are going to choose for dismissal? Are they going to threaten to devastate rural England by feeding and dressing themselves? Are they going to reduce their gamekeepers? Ah, that would be sad ! The agricultural labourer and the farmer might then have some part of the game that is fattened by their labour. Also what would happen to you in the season? No week-end shooting with the Duke of Norfolk or anyone. But that is not the kind of labour they are going to cut down. They are going to cut down productive labour — their builders and their gar- deners — and they are going to ruin their property so that it shall not be taxed. The ownership of land is not merely an enjoyment, it is a stewardship. It has been reckoned as such in the past, and if the owners cease to discharge their functions in seeing to the security and defence of the country, in looking after the broken in their villages and in their neighbourhoods, the time will come to reconsider the conditions under which land is held in this country. No country, however rich, can permanently afford to have 156 BETTER TIMES quartered upon its revenue a class which declines to do the duty which it was called upon to perform since the beginning. I do not believe in their threats. They have threatened and menaced like this before, but in good time they have seen it is not to their interest to carry out their futile menaces. They are now protesting against paying their fair share of the taxation of the land, and they are doing so by saying : " You are burdening industry; you are putting burdens upon the people which they cannot bear." Ah ! they are not thinking of themselves. Noble souls ! It is not the great dukes they are feeling for, it is the market gardener, it is the builder, and it was, until recently, the small holder. In every debate in the House of Commons they said : "We are not worrying for ourselves. We can afford it, with our broad acres ; but just think of the little man who has only got a few acres " ; and we were so much impressed by this tearful appeal that at last we said: "We will leave him out." And I almost expected to see Mr. Prety- man jump over the table when I said it — fall on my neck and embrace me. Instead of that, he stiffened up, his face wreathed with anger, and he said, "The Budget is more unjust than ever." We are placing burdens on the broadest shoulders. Why should I put burdens on the people? I am one of the children of the people. I was brought up amongst them. I know their trials ; and God forbid that I should add one grain of trouble to the anxieties which they bear with such patience and fortitude. When the Prime Minister did me the honour of inviting me to take charge of the National Exchequer at a time of great difficulty, I made up my mind, in framing the Budget which was in front of me, that at any rate no cupboard should be barer, no lot should be harder. By that test, I challenge you to judge the Budget. THE LANDLORDS' TARIFF ON INDUSTRY Newcastle, October 9, 1909. A Minister in charge of a great Bill has no time to prepare speeches, and I have not come here to deliver a speech. I have just come here for a plain, straight talk about the Budget, the opposition to it, and the prospects of both. It is six years since I had the privilege of addressing a gathering in Newcastle, and I have some recollection that then I dwelt upon the great burden imposed upon industry by ground landlords and the royalty owners, and I then mildly suggested that it was about time they should contribute something out of their wealth towards the necessities of the State. I come here to-day, six years afterwards, to tell you it will be done, and in a few years. The Budget is through all its most troublesome stages, and it has emerged out of its forty days and forty nights in the wilderness rather strengthened and improved. We have made alterations and modifications. You cannot apply any great principle or set of principles without necessary hardships. We have done our best to meet every hard case that was presented to us, done our best, and done it amidst the taunts of the very people who pressed them upon us whenever we listened to them, as I have had to do for five months. I have done five months' hard labour. 157 158 BETTER TIMES Although we have made alterations and modifications, the Bill in its main structure remains. All the taxes are there. The land taxes are there. The super-tax is there. The poor fellows who are receiving only ^5,000 a year and ;£io,ooo and ^20,000 a year, will have to con- tribute just a little towards the expenses of the country. And then there is the man to whom somebody has left a fortune. He will have to contribute a little more. All these taxes remain, as they necessarily must, because, after all, when you order "Dreadnoughts," a respectable country like this must pay for them. Now, I have told you that all the taxes remain. There has been one alteration in the form of one tax, and that is with regard to mineral rights. They complained when we taxed mineral rights. They said, "We do not object to pay the tax; all we do object to is the form of the tax." And they said it was uncertain. I said very well. It was not the form I cared so much for as the sub- stance. I was quite prepared to accommodate them. I did not want an uncertain tax, and they said so long as the tax was a certain one they preferred paying more. Well, I was prepared to meet them. I said the present uncertain tax will produce ^175, 000. So I altered it to a tax on mining royalties, which was certain, and produced ^350,000. They are not a bit better pleased. We are now through the Committee stage. We are through the last stage where the substance of the Bill can be modified. The Committee stage is the stage for the axe and the chisel and the plane. The Report stage is the stage for the sandpaper just to alter the drafting; but the substance remains, so that you see the Bill prac- tically in the form in which it is going to become an Act of Parliament. I will now proceed to examine the main objection to my proposals, and I may have to make some draft on your patience. What is the chief charge against the THE LANDLORDS' TARIFF ON INDUSTRY 159 Budget by its opponents? That it is an attack on industry and an attack on property ! I am going to demonstrate to you that it is neither. It is very remark- able that since this attack on industry was first promul- gated in the House of Commons trade has improved. It is beginning to recover from the great crash which first of all came from America, the country of high tariffs, and it has improved steadily. It has not quite recovered ; it will take some time for the operation ; but it is better. Industries which were making losses last year are begin- ning to make profits this year. The imports and the exports have gone up during the last few months by millions. Industrial investments have been steady, and there has been, on the whole, an improvement even in brewery shares. Only one stock has gone down badly — there has been a great slump in dukes. They used to stand rather high in the market, especially in the Tory market, but the Tory Press has discovered that they are of no value. The dukes have been making speeches recently. One especially expensive duke made a speech, and all the Tory Press said, "Well, now, really, is that the sort of thing we are spending ^250,000 a year upon? " Because a fully-equipped duke costs as much to keep up as two "Dreadnoughts," and they are just as great a terror, and they last longer. As long as they were contented to be mere idols on their pedestals, preserving that stately silence which became their rank and their intelligence, all went well, and the average British citizen rather looked up to them, and said to himself, "Well, if the worst comes to the worst for this old country, we have always got the dukes to fall back on." But then came the Budget. The dukes stepped off their perch. They have been scolding like omnibus drivers purely because the Budget cart has knocked a little of the gilt off their old stage coach. Well, we cannot put them back again. That is the only property that has gone 160 BETTER TIMES down badly in the market. All the rest has improved. The prospects of trade are better, and that is the result of a great agitation which describes the Budget as an attack on industry and on property. Well, now, why should Liberalism be supposed to be ready to attack property ? After all, they forget this : I lay down as a proposition that most of the people who work hard for a living in the country belong to the Liberal Party. I would say, and I think, without offence, that most of the people who never worked for a living at all belong to the Tory Party. And whenever you go across country you see men building up trade and business, some small, some great, by their industry, by their skill, by their energy, by their enterprise — not merely maintaining themselves and their families, but putting something by for evil days — hundreds of thousands of them — not all of them, I do not say that — but hundreds of thousands of them belong to the Liberal Party. If you came to the House of Commons you might imagine that all the men who had anything to lose were on the Tory side of the House, and that the men who had nothing to lose all sit on the Liberal side, whereas, as a matter of fact, the richest men in the House of Commons — I only mention the fact — happen to sit on the Liberal side of the House ; and yet we are told they are all engaged at the present moment in destroying property and industry and riches. Why are they engaged in the operation? Let me say this about these men — my friend Mr. Churchill mentioned it last night in his speech. You will find these rich men in the House of Commons sitting up night after night, risking health, some of them most advanced in years, and what for? To pass a measure which taxes them to the extent of hundreds, maybe thousands, of pounds a year. All honour to them. That is the kind of rich men one honours, who are prepared to make sacri- fices. Therefore, you may take it from me that the Liberal THE LANDLORDS' TARIFF ON INDUSTRY .6, Party is not a party that is likely to engage in a mere wanton war upon industry and upon property in this country. All we ask for is that wealth shall pay its fair share. We are simply seeking to establish in an Act of Parliament a very old friend and honoured fiscal principle that men should contribute to the needs of the State as God has prospered them. But why should there be all this anger, all this fury against the Budget? I will tell you. There are two classes who really object to the Budget. The first are those who are seeking to establish a complete change in the fiscal system of this country — to tax food — and they know that once this Budget is through there is an end to their desired opportunity. The tax will be on the right shoulders, and they cannot shift it. There is a second, and I think a most powerful class, who are the great landlords of this country. Why do they object? Why are they angrier about the land taxes than about any part of the Budget? We are raising this year eleven or twelve millions of money out of new taxation. We shall probably raise next year something approaching twenty millions by the same taxation. And yet the land taxes this year only produce ^650,000. Why, then, all this anger about these taxes? I will tell you. The first reason is they are taxes that will grow. They only start at ^650, 000, and a good start, too. But, year by year, they are bound to grow. The increment duty will grow ; the reversion duty will grow ; the mineral duties will grow. The increment duty is bound to grow with the growth of the prosperity of this country, and that is a certainty. As you get an advance in science and advance in education it strengthens and develops the intelligence of the people, and directs it; as you get an advance in international ideas about peace, so that the wealth which is produced by the industry of the people is allowed to accumulate and the harvest is not trampled M 162 BETTER TIMES down by the ravages of war, the prosperity of Britain is assured, and the growth of prosperity is assured. As it grows, the value of land taxes will grow. Not merely are the riches in this country growing, but there are more rich people. Year by year wealth is getting better distributed, and when a man acquires wealth, he wants not merely better housing accommodation, but more elbow room ; more land for recreation purposes, as well as for adornment. And it is not merely the wealthier sections of the community — the working classes are de- manding better homes, too. They are not satisfied with the dull, grey street of the past. They do not clamour for palaces; but they are tired of Walbottles. They are not satisfied with promises merely that the housing problem will be settled for them on the other side of the valley, because they have observed that some of the people who insist most on that are the very people who choose the best sites on this side of the river. They are asking for more air, more light, more room, more verdure, more sunshine, to recruit energies exhausted in toil, and they will get it. I believe this Budget will help them to get it. As these new ideas — these new fruitful ideas — develop more land will be required, and the more land you require the more taxes will come from the Budget, and therefore these are taxes that will grow. That is one reason why they object to them, but that is not the chief objection. The chief objection of great landlords to this Budget lies in the fact that it has great valuation proposals. Why do they object to valuation? Well, I will tell you why. It goes to the very root of all things in the land question. There has never been a public undertaking in this country, municipal, State, or indus- trial, there has never been an enterprise but that the landlord has generally secured anything from four to forty times as much for the value of the land as its agricultural price. When I was at the Board of Trade I saw a good deal THE LANDLORDS' TARIFF ON INDUSTRY 163 of it. I recollect a number of cases that were brought before me of complaints from the trading community as to the oppressive character of railway rates. From every part of the country, from every kind of business and undertaking, there was complaint that the heavy character of the railway rates was interfering with the successes and prosperity of that particular business. I had to go into it. I went into it very carefully in hundreds of these cases, and I found in the end that it was not the railway companies that were to blame. They had had to pay for every yard of land they had used and often fifty times its real value. You may get a railway passing through a barren stretch of country, passing on its way between one great hive of industry and another, where the land is well-nigh worthless, with just a few shepherds' huts here and there, and an occasional stray mountain sheep. I do not suppose the land would be worth more than sixpence or a shilling an acre. But the railway company comes along and says : "We want to drive a railway through this wilderness." What happens? The moment they ask for that land its value goes up enormously. Every trick and chicanery of the law, and there are many of them, as my brothers in law to the right can testify, everyone of these is exhausted in order to prove that this worthless land has enormous hidden value. The first thing they say is : " What about the law of severance, what compensation are you going to pay for that? Here you are driving a railway right through this valley; you are separating that hill from this hill, they can never greet each other, they can never visit each other, they can never embrace each other; what com- pensation do you pay for that?" Damages, gentlemen, heavy damages for severance ! What is the next thing they prove? Mind you, I am now telling you the facts that were brought to my notice at a conference in the Board of Trade on this very ques- m 2 i6 4 BETTER TIMES tion by great railway managers of the kingdom. What is the next thing they have to pay for? The landlord says : " This valley is not much to look at, but do you know what it means ? Look at its conformation ; you could convert this into a valuable reservoir to supply water for the great cities hundreds of miles away." So you have got to pay for that valley for the railway because you are destroying its market possibilities as a reservoir. That is not all. Then they say : "Do you know there are minerals here? " If you propose to tax ungotten minerals, they say, "How can you find out? " But when it is a question of getting paid for them, they can bring you fifty surveyors and engineers, and agents, and experts, and lawyers, to prove to demonstration that every mineral in the dictionary is hidden in some obscure corner of the valley, and the damages mount up and the com- pensation swells, and the railway rates increase. That is what happens. There is not a railway train — goods, luggage, or passenger — in which there is not one truck carrying interest on the excessive prices paid to the landlords. All this is a heavy burden upon industry at the present moment in this country. Now you see where valuation comes in. Take municipalities. If they want land "for any public purpose — a school in which to train children — I can see you have a case in your mind. I never heard of it. Wherever you go you get the same sort of inter- jection. They at once think you are referring to some local thing that has happened; and so you are. You cannot go to a single locality where you do not get cases : schools where the future citizens of the Empire are being trained, water works, gas, electricity, anything you want land for, alive or dead, you have got to pay for it four times as much as its agricultural value toj these great landlords. Start analysing the rates of any great city, and you will be surprised how much is THE LANDLORDS' TARIFF ON INDUSTRY 165 attributable directly to the excessive prices paid by municipalities for land for purposes which are essential to the very life of the city, to the very life of a civilised community. Then, to come to business. What have we in trade, in business, in commerce, in industry? If you want to found a new business or to extend an old one, the charges for land are extravagant, especially if you want to extend because you are there. A trader who has been building up a business in a particular locality, who by years of care and industry and a good deal of anxiety and worry has been building up a business gradually year by year — he cannot carry his trade away as if it were a coster's barrow and plant it in the next street; he has to get his extension where he is. Then comes the landlord, who has done nothing, and demands the highest price he can possibly extort. I can give you many cases of the kind. I have my bag full of them, sent to me from all parts of the country with full particulars. Hence the need for State valuation. The State valuer for the first time places a perfectly impartial valua- tion upon all the land of the kingdom. He separates the value of the land intrinsically from the value which is attributable to the expenditure by its owner. He thus for the first time forces the landlords to look at the value of land not merely from the point of view of a receiver, but of a payer. There is nothing like compelling a man to look at both sides of a question. That is really why they object to valuation. Whenever a great industry in the future requires land it can always quote the State valuation in answer to any extortionate and extravagant demands put forward on behalf of the landlords, and therefore they object, and object to it very strongly. I should like to give you a few illustrations by way of showing to you how the new Budget taxes will work. I will take you first of all on a trip to my own country 1 66 BETTER TIMES which is quite interesting, I can assure you. Some of you may know the South Wales coalfield. It is not long ago since it was a very wild, unproductive country, most of it common land. Landlord Parliaments soon handed over the property to the great landlords when they dis- covered there was mineral value in it. At the present moment the South Wales coalfield pays a million and a half per annum in royalties to a few landlords, and in ground rents hundreds of thousands of pounds. Let me give you just one or two figures which will show what is done there. You get first of all land not very rich, agricultural land, rather poor agricultural land, where coal is discovered. The landlord leases the property to somebody who has the necessary enterprise and capital for purposes of development. The landlord himself does not sink any capital in these properties, except in rare instances. Somebody else does that, some- body else faces the risk of a loss, and the landlord takes sixpence a ton in the way of royalties. What happens when you come to the surface? You must employ workmen for the purpose of carrying on your mining operations, and the workmen must have homes. So they start building, and the landlord then says : " Yes, certainly ; by all means you may build, but you must pay a ground rent." There is land now leased in these valleys in South Wales which, within living memory (it may be only a few years ago in some cases), produced only a shilling an acre, where the landlord is now getting ^30 and £40 per acre per annum, simply for the permission to build a few cottages upon it. They are able to build on lease, and in about sixty years the whole of this land will fall into the landlords' hands. Take the Rhondda Valley — it is one of the greatest coalfields in South Wales. In the year 1851 the total population of the Valley was only a thousand. To-day the population is 132,000. The landlords receive annually ^200,000 in royalties. They receive ^30,000 a year in THE LANDLORDS' TARIFF ON INDUSTRY 167 ground rents. The colliery proprietors there pay in rates £54,000 a year. The landlords do not pay a penny. That is how the matter stands there. They charge for the minerals ; they charge for the surface ; whenever land is wanted for waterworks they charge heavy prices for it; railways have to pay, and between all these charges industry is burdened and the landlords do not contribute a penny towards the heavy and growing rates of the dis- trict. Sir Christopher Furness the other day — I was very delighted to read the remarkable speech he delivered — gave a case where one of his collieries alone paid, I think, £300,000 in ten years. I should like to know how much the landlord contributed towards the rates of the district ; probably not a penny, certainly not a penny of the £300,000 ; but the colliery company at the same time con- tributed heavily to the rates. I know that is the case so far as South Wales is concerned. There was a case given to me from South Wales the other day of a company which had sunk a good deal of money in mining opera- tions, and they sent me their balance-sheet. I find their profits are £3,000 per annum — the profits of last year, I won't say per annum — and what do you think they paid to the landlords in royalties? £10,600. This company paid ,£3,500 in rates, they made a profit of £3,000, and the landlords got £10,600 — more than the profits and the rates together — and yet they never sank a penny in the mine, nor do they pay one halfpenny towards the rates of the district. And when I come along and say, " Here, gentlemen, you have escaped long enough, it is your turn now ; I want you to pay just 5 per cent, on the £10,000 odd." "Five per cent.," they say to me. "You are a thief; you are worse, you are an attorney; worst of all, you are a Welshman." That always is the crowning epithet. Well, gentlemen, I do not apologise; I could not help it, and I do not mind telling you that if I could I would not. 168 BETTER TIMES I am proud of the little land among the hills. But there is one thing I should like to say. Whenever they hurl my nationality at my head, I say to them, "You Union- ists ! You hypocrites ! Pharisees ! You are the people who in every peroration — well, they have only got one — always talk about our being one kith and kin throughout the Empire, from the old man of Hoy in the north down to Van Diemen's Land in the south." And yet if any man dares to aspire to any position, who does not belong to the particular nationality which they have dignified by choosing their parents from, they have no use for him. Well, they have got to stand the "Welshman this time ! I have just given you some facts from the Welsh valleys. But then you will probably say to me, "These are Welsh landlords. Our landlords are not like that." I thought from your patience that they must have been angels, but I see that you have got just the same sort. Well, you know you may say to us, " Why do you stand them ? " Because you force us to stand them. We would have got rid of them long ago. When the Celt has a nail in his boot he takes it out. But you have been marching on until there is a sore. Have it out. I have been inquiring into what is happening in England recently. Landlords liave no nationality ; their characteristics are cosmopolitan. A case was given me the other day from Yorkshire, of all places in the world, and as it illustrates practically every tax which I propose in my Budget, if you can stand it, I will tell you this story. And as I have it on the authority of the managing director of the concern — well, he is responsible. It is the story of a district in Yorkshire which four or five years ago was purely agricultural — really agricul- tural, receiving half its rates as agricultural land from your taxes and mine. There was not within four miles of it an industry, not a factory, not a coalmine. And some very enterprising mining investors came along, and said, "We think there's coal here." And they went to the land- THE LANDLORDS' TARIFF ON INDUSTRY 169 lord and said, "Will you allow us to dig for coal here? " He replied, " For a consideration, of course. I will only charge you 6d. a ton on all the coal that comes up." They said, "What about the surface?" "Ah, cer- tainly; I will sell you any surface land you want for the purpose, for a consideration." "Well, what do you want?" they said. "You are receiving now 15s. 6d. an acre. What will you want from us? " "Well," he said, ";6"4 an acre." Then they said to him, "We must bring workmen here ; and as there are no cottages we shall have to build them, and we propose building a model village." And they have built one of the most beautiful model villages in the kingdom. When they asked "Will you allow us to build a few cottages?" he said, "Certainly, but I shall want a small return, £6 or ^"io an acre — quite moderate," and I am not holding him up to pillory him. This landlord is really a most moderate landlord. The land was at 15s. 6d., and he charges ^10. Well, that is only eighteen times the value of the land. I can give you cases where land- lords have charged thirty, forty, even a hundred times the value of the land. This man has been most moderate — only eighteen times its value. Then he said to them, "There is the fish pond, rather near your model village. I don't think it will be worth much afterwards, whatever it's worth now. So I think you had better take it." The mining speculators replied, "All right. It will be rather good sport to fish either for trout or tadpoles." The landlord said, "I am getting £1 for it now ; I will let you have it for eighteen guineas a year, cheap." They started. They spent half a million without know- ing what would happen. It was a real speculation, a real risk. They took it on, spent half a million, discovered the coal, and the landowner is getting royalties now at the rate of nearly /T2o,ooo per annum. He is getting, in addition to the ^4 per annum for every acre of land out 170 BETTER TIMES of the surface used by the colliery — he is getting £6 to ;£io per annum per acre for all the cottages there. He charges ^4 per annum for tipping rubbish, and ^10 per annum for workmen's cottages. And he is making a good thing out of it, a very good thing out of it. Recently they were prospering and getting more and more coal, and in a very short time they will be paying ^40,000 per annum for this land for the royalties alone. The landlord has never spent a penny upon it. Recently they wrote him and said, "We want more ground to build cottages on." He said, "Certainly, for ^150 per acre," the land now for agricultural purposes being worth about ^20 per acre, and the landlord getting half his rates paid out of the general taxation of the country in respect to the fact that it is agricultural land. What happens? He said to them, "I will let you have this land at ,£150 per acre," but he added — and I am sure this will commend itself to every temperance man in this house — he said, "No public house to be erected." Well, now, gentlemen, that is all right. Oh, I beg your pardon. Here is another sentence, "without the consent of the landlord." If consent is given an extra premium is re- quired. I like a man who puts a high value on his prin- ciples. Here, at any rate, is a man who won't part with them without an extra premium. They said to him, "Well, supposing the enterprise fails; supposing we cannot get coal; or suppose we don't get a sufficient quantity to pay?" "Well," he said — landlords are always accommodating in these cases — " I charge you a dead rent." Very fair. Pay a dead rent for a dead failure. So it is a growing one. It is a graduated one. They believe in graduated receipts. I am trying to inculcate the principles of graduated pay- ment to them, and in a few years the dead rent will be ^7,900 a year. The more the mineowners sink in the mine the greater the loss, and the greater the loss of the mineowner the greater the payment to the landlord. THE LANDLORDS' TARIFF ON INDUSTRY 171 Where does my Budget come in? It comes in rather late, I admit. It ought to have come in in one of the earlier chapters. Still it comes in soon enough to give the story a happy ending. When the ^40,000 royalty comes, 5 per cent, for the first time will come to the State. The land outside the land which is nominally agri- cultural land, but which is really now valuable building land, will pay a halfpenny in the £. When it is sold we will get 20 per cent, on the increase. And when the landlord passes away to another sphere we shall then get the dead rent, 20 per cent, on the increase. More than that. We have had another little provision. We have considered his case thoroughly. When these cottages fall in and his heir comes and walks in for the whole of this beautiful model village — this model landlord of a model village — the State will then, under this Budget, say, " Very well, if you really must take all that property I think we had better get a toll of 10 per cent, off it, at any rate. We shall be able to do something for the people who live in these cottages. We have got a little provision. He has only leased one seam of coal. They have discovered, I think, four seams. Some day the other three seams will probably be leased, and then the 5 per cent, only applies to existing collieries. But we have got a special provision for future collieries. We shall then ask from him not 5 per cent, of the royalty, but 20 per cent." Where is the injustice there? I have been listening to criticism for five months, and they could not point out a single injustice in it. They simply scolded at large. I defy any reasonable man anywhere to say that there is any injustice in taxing men under these conditions, when the State needs the money. We want money for the defence of the country; to provide the pensions of the old people who have been spending their lives in tilling the soil at a very poor pittance, in sinking those mines, risking their lives. And when they are old we 172 BETTER TIMES do not want to starve them or to humiliate them ; and we say what better use can you make of wealth than to use it for the purpose of picking- up the broken, healing the wounded, curing the sick, bringing a little more light, comfort, and happiness to the aged? These men ought to feel honoured that Providence has given them the chance to put a little into the poor-box, and since they won't do it themselves we have got to do it for them. I have another illustration before I come to the House of Lords showing how these taxes on landlords really burden industry. The other day in the House of Commons there was a speech delivered, when I proposed to tax mining royalties, by a gentleman called Sir John Randies. And, by the way, it is a very significant and interesting lesson for you in Newcastle that that gentle- man got into the House of Commons purely through a split in the party at the by-election in Cockermouth. The candidate who was opposed to him was in favour of the taxation of mining royalties; in fact, he has been working hard for the Budget League — Mr. Frederick Guest. Well, Sir John Randies made a speech in the House of Commons which he thought was against the proposal. He said, "This tax is an unjust one. It is an oppressive one. It interferes with industry." That is the tax of 5 per cent, which I proposed on mining royalties. He said, "Do you know how much it will cost per ton of steel ?" And he began working it out. You require limestone, ore, and so many tons of coal, and we have a 5 per cent, tax on the royalty on each. And he said, "That comes to sixpence per ton on steel — your tax on mining royalties — and that interferes with the competition with the foreigner." We pointed out to him that in the first place we did not tax the industry at all, but simply taxed those who did tax industry. We pointed out to him that 5 per cent, was only a twentieth, and if our taxes upon the royalties THE LANDLORDS' TARIFF ON INDUSTRY 173 came to sixpence, the royalties must have been io.v., and if a 6d. tax upon steel is going to interfere with our competition with the foreigner, what will 105. do? As a matter of fact, it is not against foreign tariffs that we want to be protected. What we want is protection against the landlords' tariff. Well, now, we are going to send the Bill up — all the taxes or none. What will the Lords do? I tell you frankly it is a matter which concerns them far more than it concerns us. The more irresponsible and feather- headed amongst them want to throw it out. But what will the rest do? It will depend on the weather. There are some who are not fair-weather sailors, and they will go on. But poor Lord Lansdowne — with his creaking old ship and his mutinous crew — there he is, he has got to sail through the narrows with one eye on the weather- glass and the other on the forecastle. But it does not depend on him. It will depend, in the first place, probably on the reports from the country. The most important gentleman in the business is not Lord Lansdowne with all his adroit management of the House of Lords, not even Mr. Balfour with his invaluable services to his party. The real sailing master is Sir Alexander Acland-Hood, the chief Whip of the Tory party ; and the Ancient Mariner is engaged at the present moment in trying to decide whether it is safe to shoot the albatross. He will probably not decide until too late. But still this is the great Constitutional party, and if there is one thing more than another better established about the British Constitution it is this, that the Commons, and the Commons alone, have the complete control of supply and ways and means ; and what our fathers estab- lished through centuries of struggle and of strife — even of bloodshed — we are not going to be traitors to. Who talks about altering and meddling with the Con- stitution? The Constitutional party — the great Constitu- tional party. As long as the Constitution gave rank and 174 BETTER TIMES possession and power to the Lords it was not to be inter- fered with. As long as it secured even their sports from intrusion and made interference with them a crime; as long as the Constitution enforced royalties and ground rents and fees and premiums and fines, and all the black retinue of exaction; as long as it showered writs and summonses and injunctions and distresses and warrants to enforce them, then the Constitution was inviolate. It was sacred. It was something that was put in the same category as religion, that no man should with rude hands touch, something that the chivalry of the nation ought to range itself in defence of. But the moment the Con- stitution looks round ; the moment the Constitution begins to discover that there are millions of people outside park gates who need attention, then the Constitution is to be torn to pieces. Let them realise what they are doing. They are forcing a revolution, and they will get it. The Lords may decree a revolution, but the people will direct it. If they begin, issues will be raised that they little dream of. Questions will be asked which are now whispered in humble voices, and answers will be demanded then with authority. The question will be asked whether five hundred men, ordinary men chosen accidentally from among the unemployed, should override the judgment — the deliberate judgment — of millions of people who are engaged in the industry which makes the wealth of the country. That is one question. Another will be, Who ordained that a few should have the land of Britain as a perquisite ? Who made ten thousand people owners of the soil, and the rest of us trespassers in the land of our birth? Who is it who is responsible for the scheme of things whereby one man is engaged through life in grinding labour to win a bare and precarious subsistence for himself, and when, at the end of his days, he claims at the hands of the community he served a poor pension of eightpence a day, he can only get it through a revolution, and another THE LANDLORDS' TARIFF ON INDUSTRY 175 man who does not toil receives every hour of the day, every hour of the night, whilst he slumbers, more than his poor neighbour receives in a whole year of toil? Where did the table of that law come from? Whose finger inscribed it? These are the questions that will be asked. The answers are charged with peril for the order of things the Peers represent; but they are fraught with rare and refreshing fruit for the parched lips of the multitude who have been treading the dusty road along which the people have marched through the dark ages which are now merging into the light. THE GREAT ASSIZE OF THE PEOPLE National Liberal Club, December 3, 1909. My Lords and Gentlemen, the extreme kindness of your reception requites me for many a weary and anxious month of hard work. I come here to-day not to preach a funeral oration. I am here neither to bury nor to praise the Budget. If it is buried, it is in the sure and certain hope of a glorious resurrection. As to its merits, no one appreciates them more sincerely than I do; but its slaughter has raised greater, graver, and more fruit- ful issues. We have to arrest the criminal. We have to see that he perpetrates no further crime. The momentous event of last Tuesday has closed one chapter in the history of this country, a chapter which opened over seventy years ago with a bright gleam of hope for the people of this country. Much of that hope has been realised. Perhaps most of it has faded into the gloom of disappointment. A new chapter is now being written — equally full of hope, but with a better prospect of realisation — for the sinister assembly which is more responsible than any other power for wrecking popular hopes has, in my judgment, perpetrated its last act of destructive fury. They have slain the Budget. In doing so they have killed the Bill, which if you will permit me to say so, had 176 THE GREAT ASSIZE OF THE PEOPLE 177 in it more promise of better things for the people of this country than most Bills that have been submitted to the House of Commons. It made provision against the in- evitable evils which befall such large masses of our poor population — their old age, infirmity, sickness, and unem- ployment. The schemes of which it was the foundation would, in my judgment, if they had been allowed to fructify, have eliminated at least hunger from the terrors that haunt the workman's cottage. And yet here you have an order of men blessed with every fortune which Providence can bestow on them grudging a small pittance out of their super-abundance in order to protect those who have built up their wealth against the haunting terrors of misery and despair. They have thrown out the Budget, and, in doing so, have initiated one of the greatest, gravest, and most promising struggles of the time. Liberty owes as much to the fool- hardiness of its foes as it does to the sapience and wis- dom of its friends. I wish for no better illustration of that than this incident. Here, for years, for generations, Liberal statesmen have striven to bring to an issue these great forces. Their Bills were mutilated, torn, and devitalised by this machine, and they were never able to bring the cause to any sort of decision. It has been done at last, and I am proud that I have had a small share in it. At last the cause between the Peers and the people has been set down for trial in the great assize of the people, and the verdict will soon come. The Assembly which has de- layed, denied, and mutilated justice for so long has at last been brought to justice. Well, now, we are on the eve of a General Election, which will decide this great question. There may be the usual attempt to divert the attention of the jury by turn- ing their minds on to other and irrelevant questions. I have no doubt the stale old question of Protection will be brought up. Anyone who has read carefully the modern 178 BETTER TIMES political history of this country can recall many instances where the Tory Party, hard pressed, has always resorted to Protection. They will try it again. It will fail. It is not that we are afraid of them. In fact, it raises in a very clear way the issue which we will Be delighted to get the mind of the country upon : whether the service of the country, whether the money for the service of the country is to be raised by taxing the unearned increment upon land and by taxing luxuries, or by taxing the bread and meat of the people. But, after all, there will be one great dominant ques- tion submitted to the electors, one that will absorb all others. What is that? (A Voice: "The House of Lords.") That's it — the question which was put by the Prime Minister in his great speech yesterday. Here are you, a nation of nearly 45 millions, one of the greatest nations the world has ever seen, a nation whose pro- ficiency in the art of government is unrivalled, a nation which has no superior in commerce or in industry. It has established the greatest merchant fleets that ever rode the waves. It has got the greatest international com- merce in the world. It has founded the greatest and most extensive empire the world has ever witnessed. And yet we are told that this great nation, with such a record of splendid achievements in the past and in the present, is unfit to make its own laws, is unfit to control its own finance, and that it is to be placed as if it were a nation of children or lunatics, under the tutelage and guardianship of some other body — and what body? Who are the guardians of this mighty people? Who are they? With all respect, I shall have to make exceptions ; but I am speaking of them as a whole, and I shall come to the analysis later on. They are men who have neither the training, the qualifications, nor the experience which would fit them for such a gigantic task. They are men whose sole qualification — speaking in the main, and for the majority of them — they are simply men whose sole THE GREAT ASSIZE OF THE PEOPLE 179 qualification is that they are the first born of persons who had just as little qualification as themselves. To invite this Imperial race; this, the greatest com- mercial nation in the world ; this, the nation that has taught the world in the principles of self-government and liberty ; to invite this nation itself to sign the decree that declares itself unfit to govern itself without the guardian- ship of such people, is an insult which I hope will be flung back with ignominy. This is a great issue. It is this : Is this nation to be a free nation and to become a freer one, or is it for all time to be shackled and tethered by tariffs and trusts and monopolies and privileges? That is the issue, and no Liberal will shirk it. It is time something were done. The insolence of that Assembly has grown by immunity. They did not believe we were in earnest, and it is time that we showed that we were. It has thrown out Liberal Bills — Bill after Bill, even after the country had declared explicitly its views on the matter. It has passed Conservative measures which were never submitted to the judgment of the country. In fact, it is purely a branch of the Tory organisation. It is just as much a Tory organisation as either the Tariff Reform League or the Coal Consumers' League. They are three separate and distinct parts of the same great mechanism of destruction, just different branches of the same service. Carlyle once said, " It is wonderful how long a rotten institution will hold together so long as it is not roughly handled." It is time it were handled firmly. Mr. Balfour yesterday taunted us with making speeches about the House of Lords and passing resolutions. I agree, if we left it there, we should justify every gibe that has been flung at us. You cannot with menacing speeches cast down even the most ricketty and gimcrack of idols. You must handle them a little more firmly, and the time has come for unflinching and resolute action. For my part, I would not remain a member of a Liberal Cabinet one hour unless I knew that the Cabinet had N 2 i8o BETTER TIMES determined not to hold office after the next General Elec- tion unless full powers are accorded to it which would enable it to place on the Statute Book of the realm a measure which will ensure that the House of Commons in future can carry, not merely Tory Bills, as it does now, but Liberal and progressive measures in the course of a single Parliament either with or without the sanction of the House of Lords. That does not mean a single Chamber; but it does mean that where there is a conflict between the two Houses, and the House of Lords persist in their resist- ance after full opportunity is accorded to both Houses for reflection, then in the course of a single Parliament the will of the House which represents the people of this country must and shall prevail. I should like to examine the claim of this House of Lords to be the impartial, superior, judicial, and dispassionate assembly which its own friends assume that it is. It is a great claim. Let us examine its credentials. Here you have got two assemblies face to face, and one of them must prevail. Let there be no mistake about that. It is not a question whether the House of Commons and the House of Lords should go on side by side with almost co-ordinate authority; it is a question which of them is to prevail. Is it the House that represents the 45,000,000 of people, or the House that represents the 600 more or less who happen to be there at the time, and I am not sure that it represents even them? Look at these two Assemblies. You might imagine from the way they talk about the House of Commons that we were all — the 670 of us — men who had been picked up at random from lorries in Hyde Park or from street corners orating on a tub. What is the House of Com- mons? And when I ask that question I am not referring to the present House, but to every House of Commons that I have had experience of, and I have been a member of five Parliaments — three of them Unionist and two of THE GREAT ASSIZE OF THE PEOPLE 181 them Liberal — and what I say about the House of Com- mons applies to all five. The House of Commons not merely in an elective capacity, but in the personality of its individual members represents every business, every trade, every branch of commerce and industry, and every great profession in the country. They are men of experi- ence in the trade and commerce of the country. You have got a certain number of men of that kind in the House of Lords. I do not deny it, and they make the most of it. They do everything with them except take their advice. They are good enough for advertise- ment. They are good enough for placards. They are good enough for the shop-window — but they are to be kept out of the counting-house. These are not the men who rule the House of Lords. They are a small minority of the House of Lords, and they are not listened to in the House of Lords as they are in the House of Commons. Take, if you will, three or four of the principal indus- tries of the country : Agriculture, which, I suppose, is the greatest of them all. You have got landowners in the House of Lords. How many farmers have you got there? How many ploughmen? If you come to the House of Commons you have landowners, but you have also farmers. You have got men who have earned their living between the horns of a plough. So much for agri- culture. And a little more, you have other branches of the great agricultural interests in the House of Com- mons — men, who, in various capacities, either as mer- chants, or agents, or dealers, have come into contact with agriculture in every phase and form which is thoroughly representative in the individual character of its members. Now come to the great transport industries of the country. In the House of Lords you have got great ship- owners. You have got great shipbuilders. You have got one of the greatest, if not the greatest, shipbuilders in the world there (Lord Pirrie). He voted for the Budget. I 182 BETTER TIMES had the pleasure and privilege of visiting- his great yard in Belfast some years ago, and there I found two or three mammoth ships. " Whom are you constructing these for? " I asked. They said, " For the Germans " — some patriotic Germans, who, instead of building ships at home, actually gave orders to British firms. The Lords include ship- owners and shipbuilders ; but in the House of Commons you have not only shipbuilders and shipowners, but men who have served before the mast. You have got pilots there. You have got men who have been engaged in every branch of the merchant service. And then come to the railways. You have railway directors in the House of Lords. I am not mentioning that as a proof that there is anybody there who knows anything about railways. At the same time, there may be one or two of them that do. But in the House of Commons you have not merely directors, you have men who have served as railway guards and porters. How many miners have they in the House of Lords? How many colliers have they? They have colliery pro- prietors; they have royalty owners. We have those in the House of Commons; but we have miners as well. How many weavers and spinners do you find in the House of Lords? You have every side of this great in- dustry represented in the House of Commons. I will tell you another fact which is even more important. In the House of Lords you soon exhaust the men who have had any training in business at all. My friend Mr. Samuel was kind enough to tell me that he had analysed the list supplied by the Times the other day. The Times said: "Now look at this great business assembly," and they gave a list of the noble lords who knew everything about everything, and I found that out of that list — or rather, Mr. Samuel did — there were 103 of them — only 57 voted against the Budget to begin with. It was not an overwhelming majority, and in order to make out any THE GREAT ASSIZE OF THE PEOPLE 183 show of business men they have to leave out some of our men who do know something about business. But taking them altogether they are just a small minority of that large body. But you come to the House of Commons ! The average type of man there is a man who has gone through all those stages — men who have worked themselves up through various kinds of industry, trade, and commerce until they have won for themselves the distinction of a seat in the greatest Parliament in the world. That is the real difference between them, and a very substantial dif- ference it is. You have just a few in the House of Lords, and the rest of them are of no more use than broken bottles on a park wall to keep off poachers. And that is what they are there for — to keep off Radical poachers from the lordly preserves. There are many of them, if you dissolved the House of Lords to-morrow, who probably would be in the House of Commons, and would take honourable, distinguished, and probably commanding posi- tions there ; but these are not the men who say the Budget should be thrown out. How did the Lords arrive at the position? It is worth looking into. For those who say that it is an Imperial assembly who soberly and calmly sit down to consider the proposition on its merits, a mere narration of the events that led up to the throwing out of the Budget, a mere enumeration of the forces that propelled the Budget out of the Lords is a complete answer. Who opposed the action of the Peers? There is Lord Balfour of Burleigh, who delivered one of the greatest speeches. Who is he? A very able Tory, and a Scotch Tory — a Tory in whom there is no guile. He was against its being thrown out. There is Lord James — one of the greatest constitutional lawyers of the day, and a man who made the biggest poli- tical sacrifice of any politician. He is above suspicion of undue partiality to the Radical Government. Lord Cromer, 184 BETTER TIMES the greatest of living pro-Consuls. Lord Rosebery — nobody will accuse him of excessive partiality either to the Budget or the Government, and if he advised them not to throw it out it must have been after a careful consideration of all the conditions. He was of opinion that it was a mad act of folly. Then there is Lord St. Aldwyn — one of the greatest of Tory financiers — I am not quite sure I should not be right if I said the only Tory financier. He was not there, and I can better imagine than repeat the language he probably used about it. Who was on the other side? Lord Lansdowne. Are you quite sure? I am not in the counsels of Lord Lans- downe. He did not consult me about it, but I am not sure my conclusion would have been very different. But what has he done ? He has been forced into his posi- tion. It is not I that said so. Lord Rosebery said so. Others sitting on the same side hinted it broadly. He was forced into it against his own better judgment, but, having been forced, saw no way out of it. Being in the trap, he thought he might as well eat the cheese, and not leave it for the consumption of any other mouse or rat. But who is really on the other side? Lord Curzon unmistakably. There was no mistake about him. Now, Lord Curzon is not a very wise or tactful person. All I would say about him would be this : I think he is less dangerous as a ruler of the House of Lords than as a ruler of India. For further particulars apply to Lord Kitchener. And if you want any more information you might apply to Lord Midleton. I will say no more of him. Then there is Lord Milner. There is one thing in common between Lord Milner and Lord Curzon. They are both very clever men, but they are that class of clever men with every gift except the gift of common sense. Look at the two pro-consuls who took part in this debate — one of them, Lord Cromer, advising that the Bill THE GREAT ASSIZE OF THE PEOPLE 185 should not be thrown out ; the other, Lord Milner, advising that it should be thrown out ; Lord Cromer, the man who, finding a province devastated by its Government, deso- lated by war, left it a land of abounding and smiling pros- perity ; the other found a smiling land — prosperous, leap- ing into great wealth — and left it, after two years of mis- management and miscalculation a scorched and blackened desert. He has a peculiar genius for running institutions and countries into destructive courses. There is the man who threw out the Budget ! His motto is one I apologise for quoting in a respectable assembly. His motto is "Damn the consequences. " The war, he says, will only cost ten millions. Somebody says it will cost 220 millions. He says "Damn the conse- quences !" Tariff Reform, says he, will produce 20 millions a year and help every trade and industry. You go to him and say it won't produce five, and will ruin and embarrass half the trades of the land. He will say " Damn the conse- quences !" Here you are raising millions of money for the poor, the broken, the wretched, and you have to put off for a couple of years looking after the unemployed, the sick, and the aged — never mind the consequences ! That is the spirit, that is the temper, that is the genius that has rejected the Budget. How long is Britain going to be ridden down by this sort of rule? Not an hour later than the next General Election. I should like to ask if you have gone into the journals that counselled this. It is true that at the last moment they have all rallied. I am not criticising that, I am not condemning them. They rallied to their party. Party discipline has asserted itself ; party loyalty has over-ridden their judgment. But I am taking the period when they were making up their mind. Which were the journals that counselled rejection ? Which were those that advised them not to reject? All the weightiest papers on the Con- servative side were against it : The Times, the Birming- ham Post, the Glasgow Herald, the Spectator, and, I hope 186 BETTER TIMES I am not wrong here, but I am not quite sure of the fifth, but I think the Yorkshire Post. These were the papers that counselled the Lords not to follow the advice of the wild men. Who was on the other side? Practically only one able but ill-balanced journalist. It is true that he was writing in two or three papers — in the Observer and the Telegraph. I am not sure that he did not write in the Daily Mail. Very well. Here is a man who was advocating a few years ago the cause of Parnellism with the same fervour and the same extravagance as he is now advocating the rejection of the Budget. Even the Daily Mail hesitated, too. It only came in at the last moment. It had a bad skid once to our side. But I admit that for the last couple of months it has placed at the disposal of the wreckers that passion for accuracy of statement which has been so dear to it. That is how the Bill was thrown out — not by the wise men, not by the reflecting men, of the Unionist Party, but by its Mad Mullahs. And here is the assembly — you see what I am coming to? — here is the assembly which is supposed to be dispassionate, to be calm, to be judicial above everything — this is the body that is to stand be- tween us and anarchy ! Here is the Fire Brigade that is to quench the flames of revolution when they ciome ! Why, they cannot put out a little fire in the backyard of the Sunday edition of the Daily Mail. They have joined the incendiaries. "Well, now," they say, "have you not great financiers to support the rejection of the Budget? What about Lord Rothschild and Lord Revelstoke? The House of Lords has indulged in a good deal of plain speaking about me. I mean to return the compliment. It shows my appre- ciation of their style. Lord Rothschild and Lord Revel- stoke did it on the ground, they said, that British invest- ments were absolutely no use at the present moment. The only thing fit to imvest in was something which was THE GREAT ASSIZE OF THE PEOPLE 187 foreign. These two noblemen are great exporters of British capital. They are making a competence and a respectable living, and when I hear these two able financiers say that the British fish smells rather strongly, and that the foreign fish on their stalls is both sweet and wholesome, then I say, "My Lords, you are two very good salesmen." At the same time, I say to them, "We in this old country " — some of us and our ancestors have been here over two thousand years — time whereof the memory of man runneth not to the contrary — "we are getting a little tired of these noblemen who are always running down British pro- ducts and British investments, and all the things in the country that afforded hospitality to their forefathers, and enabled them to make their riches." Why did they reject it? They said if they hadn't re- jected it things would have been done which were irre- trievable. What were they? It is perfectly true until the next General Election the brewers would have had to contribute to the building of a couple of Dreadnoughts. Is that so dangerous a calamity that the House of Lords should have been induced to throw out the Bill? What else was the danger — a few millionaires, or, rather, a few heirs of millionaires, might in the course of the next year or two, if so unfortunate as to get two millions left to them, have to pay a little more to the country. But Lord Rothschild said: "Worse than that." He said the Holy Inquisition would have been set up. What is that? The Holy Inquisition for the super-tax. He would have been obliged to reveal his income. In- tolerable ! I beg his pardon. Does he know that at the present moment hundreds of thousands of tradesmen and professional men — small people, it is true, but who have just the same objection to revealing their income, or their lack of income, and would be just as glad to get off by paying half of what they ought to pay as any lord or duke in the land — have to submit to this inquisition, and 188 BETTER TIMES are doing it. Lord Rothschild seems to say : " What ! Are you going in this country to make the same law for me and for my grocer? Out with the Bill at once ! " Those days are gone, and the sooner these noble lords reconcile themselves to the change the better for their peace of mind. Oh, but it is unemployment. Lord Rosebery said so. Well, Lord Rosebery 's speeches are very curious produc- tions; extraordinarily interesting and picturesque and very eloquent, but they always remind me of the Parable of the Virgins. His arguments, some of them are wise and some of them are foolish. The only difference is that they are not as equally distributed. Really, what could be more — I am sorry to use the words, for I have great respect for Lord Rosebery, and great admiration for him, and a curious sort of liking for him — but what could really be more silly than that statement about the bonds, foreign bonds, ballasting ships from this country abroad? If that is true, it means we were unloading foreign bonds as quickly as we could. Then as to trade, he said that nothing had been done in trade since this Budget was introduced — complete stag- nation. Well, really if he would only just look at the figures — the only figures he interests himself in are figures of speech — but if he would only look at the figures, he would have known that even the foreign trade of this country, our international trade, our imports and exports, had gone up by 25 millions since this wretched Budget was brought in. And then unemployment. Really, it is so important, because they are making so much of this, that, at the risk of wearying you, I am going to give you the actual figures. Now look at this. In April of last year unemployment in this country was 7.1 per cent., and by the month of October it went up to 9.5, a gigantic increase of unemployment between April and October last year. What happened this year? The Budget was intro- THE GREAT ASSIZE OF THE PEOPLE 189 duced on April 29. The effect upon Unemployment was instantaneous. The unemployment figures in April were 8.2 per cent., and by October they had come down to 7.1 per cent., a decrease as compared with last year of about 25 per cent. What is the good of talking about increase of unemployment when you have facts to show that steadily the unemployment figures have gone down. That has been the effect on unemployment, and that will be the effect. I do not mean to say that the dislocation which has been due entirely to the action of the Lords won't have any injurious effect. Of course it will have an injurious effect on the money market, and that will re-act to a certain extent on trade and commerce. Why should they put that on our shoul- ders? It is entirely their own doing, not ours. But they have not rejected the Budget ; they have only referred it to the people. On what principle do they refer Bills to the people? I remember the election of 1900, when a most powerful member of the Tory Cabinet said that the Nonconformists could vote with absolute safety for the Government, because no question in which they were interested would be raised. In two years there was a Bill destroying the School Boards. There was a Bill which drove Nonconformists into the most passionate opposition. What did the House of Lords do? Did they refer it to the people? Oh no, there was a vast differ- ence between protecting the ground landlords in towns and protecting the village Dissenter. After all, the village Dissenter is too low down in the social scale for such exalted patronage, so he was left to the mercy of a Tory House of Commons without any of this high and power- ful protection. Well, the Dissenters, despised as they may be, once upon a time taught a lesson to the House of Lords, and ere another year has passed they will be able to say, "Here endeth the second lesson." No. They do not choose Bills on merits. If they want i 9 o BETTER TIMES to reject, or what they call refer to the people, they have another method. If a Bill has powerful friends that can avenge its assassination it passes through that perilous journey without toll. But if it has no friends of that kind ? The Lords slaughtered without compunction temperance Bills. Who is there who would befriend the drunkard? He cannot do it himself. He is at their mercy, and the drunkard's wife has no vote. But there are rich brewers in the House of Lords, and their shareholders, and these Bills have to be slaughtered. At last with all their cunning, their greed has over- borne their craft, and we have got them at last. And we do not mean to let them go until all the accounts in the ledger have been settled. Ah ! Why did they do it on the Budget? This is simply the fulfilment of the measure of their iniquity. Nay, more than that. Mr. Balfour said, "This is merely your pet vanity." What? The right of the Commons to grant supplies a pet vanity ! It is a franchise won through generations of sacrifice and of suffering. The Commons of England stormed the heights after many repulses, many a failure, with heavy losses, but they captured them, and the plain of government was at their feet. Now, when we are beginning to realise the possibilities of that position, when we have discovered — I won't say for the first time — but discovered in real earnest what the power of finance means in the repression of wrongs, the House of Lords come along and say, "We will share the garrisoning of that position." All I can say is if that position, if that rampart, is surrendered it will be the greatest act of folly any democracy has ever perpetrated. Every grain of freedom is more precious than radium, and the nation that throws it away is the most wanton of prodigals. Think of the most commonplace public right we enjoy. What an incident of our everyday life ! Yet it has cost generations of pleading and of pain to wring it out of the grip of tyranny. THE GREAT ASSIZE OF THE PEOPLE «<;. Here we are this afternoon, at a public meeting, dis- cussing urgent matters of vital public importance, and think nothing of it — nothing of it ! But you know that this commonplace right has cost centuries of strife, of suffering, of struggling to our forefathers. And the rights of the Commons of England to grant supplies and to make the redress of grievances the condition of that grant drenched England with blood. That right is the proud possession of Englishmen. They were pre-eminent in the conflict that won it. It is their noblest tradition, and I do not believe that the dauntless national spirit which won that liberty has become so degenerate that at the call of an effete oligarchy, without striking a blow, Englishmen of to-day mean to surrender one of the finest and fairest provinces of freedom won by their ancestors. THE BUDGET EXAMINED Carnarvon, December 9, 1909. This is the largest political meeting that I have ad- dressed in the Carnarvon Boroughs. With the weather quite unpropitious in the depth of winter, here we have this huge crowd of, I am told, ten thousand people drawn from all parts of the country. We are here to consider the gravest political crisis that has arisen in either your day or mine. It is not due to k one event, but to a series of events. For the first time in the history of this country a financial pro- vision made by the Commons of this country for the services of the land has been rejected by the House of Lords. That in itself is enough to create a grave situation, but the rejection of the Budget is simply the culmination of a series of similar acts on the part of the same Assembly. What has happened — not merely during the present Parliament, but during every Parliament? At any rate for a century. Liberal mea- sures undoubtedly demanded by the vast majority of the people, put forward by men elected by a majority of the people, after careful consideration by the representatives of all the people, one after the other are either re- jected or mutilated by a House with no responsibility to any one, not elected by any one. Now, when Tory Parlia- ments are in power there is no difficulty in getting Bills 192 THE BUDGET EXAMINED 193 through. Measure after measure, never demanded by the electorate, with every indication that the majority of the people were opposed to those particular measures, are passed without question, without challenge, without demur, and almost without consideration. Why is this? They say, " You have set up an impartial judicial tribunal which weighs in the balance every measure submitted to it, and if they find it wanting they reject it; if the mea- sure is not up to a high standard they reject it." What would you say to an inspector of weights and measures, who, when examining the measures and weights submitted to him by the tradesmen in his district, passed them as correct and without any question if the trades- man happened to be his friend ; but if the tradesman hap- pened to be his enemy he either condemned the weights and measures or added some baser metal to bring them up to his own peculiar standard? The Lords say, "We have not rejected your Bills; we are only referring them to the country." Let us examine that, because you will hear a good deal of it in the course of the next few weeks, though you will not hear much about it afterwards. It is a claim that does not bear examination. W r hat does it mean. Follow the subject in the light of what has happened during the present Parliament. During the first Session of this Parlia- ment two great measures passed from the House of Commons. The first was the Education Bill. No one can doubt that the principles of that measure had been submitted to the judgment of the electorate. It was rejected by the House of Lords. What was the second Bill? The second Bill was the Plural Voting Bill, better known as "one man one vote." That was also re- jected. Those are two Bills which have been unquestion- ably submitted to the electorate, and both were rejected in the first Session of this Parliament. What is the claim of the Lords? The Lords said, " We did not reject them ; we simply referred them to the o 194 BETTER TIMES people." Very well; suppose we had taken them at their word. There would have been a dissolution in the first Session of Parliament. In our second year we dealt with two great questions upon which the Scottish electorate were unanimous. One was the Scottish Small Land- holders Bill, and the other was the Scottish Valuation Bill. Both these Bills were rejected. You would have had a second dissolution — two dissolutions of Parliament in two years, if the claim of the Peers is to be admitted. Now we come to the third year. The third year we had a Licensing- Bill. What happened? That was thrown out. A third dissolution of Parliament would, therefore, have been called for. We come to the fourth year, and the Finance Bill is thrown out. A fourth dissolution of Par- liament in the course of four years ! Do the Peers really think the people of this country are fools? This is not a reference to the people; this is a refusal. It means that whenever a Liberal Government happens to come into power there must be annual Par- liaments, and whenever a Tory Government comes into power, then the Septennial Act is to work. This is not holding the balance even and fair between the parties in this country. This is a demand which is absolutely in- tolerable. They carry it further than that. They say, Not merely must you refer a question to the people, but it must be the only question referred to the people at the election. Consider what happened to the Educa- tion Bill. The main principles of that Bill were un- doubtedly submitted to the electorate — popular control, the abolition of tests in all the public schools in the land. The Bill was carried through the House of Com- mons; it was sent to the House of Lords. What did they say? They said: "But this was not the only ques- tion referred to the electorate; it is perfectly true that you had a discussion about this, and the Liberal leaders appealed to the electors upon it; but you had in addition to that, Chinese labour." THE BUDGET EXAMINED 195 Mark what that means. It means that if we refer more than one question to the electorate they will not recognise any mandate upon any of them. This is making a mockery of the democracy. It is making progress im- possible. The Lords will succeed in accomplishing their object unless we put an end once and for all to their mischievous work. The Liberals have shown unutterable patience for years. This is the time for us to strike, and we have done it. They have thrown out the Finance Bill. It is a most serious act, I think, on the part of the House of Lords, to dislocate the finances of the year. They have done it because they say that this is an un- precedented Bill. Well, of course, every new Bill is an unprecedented one. There would be no need of a Bill at all unless it was different from every Bill introduced and carried. They said : " This is so revolutionary, this is so drastic, and, above all, it is so Socialistic." Let us examine that contention. Let us see what justi- fication there is for it. What are the great taxes which are comprised in the Bill that I introduced on April 29? The first was the increase in the income tax on earned incomes of ^3,000 a year and on unearned incomes throughout of is. 2d. A is. 2d. tax was the first pro- posed, and in the House of Commons that was not chal- lenged. It went through without a division, after a speech by Mr. Balfour. If such a misfortune were to happen that there should be a Tory victory at the next election, they would have to reimpose a is. 2d. income tax. There is no difference between them and us on that question. There is no Socialism in that. There is no robbery in that. That, at any rate, is an honest, down- right attempt to take 2d. from other people's pockets and put it into the purse of the State. What was the super-tax? It was a tax of 6d. in the pound. I want you to understand that — it was 6d. in the pound on incomes of over ^5,000, but deducting the first 3d. That is rather an ingenious arrangement. It effects o 2 196 BETTER TIMES a graduation. The man who has ^"6,ooo pays 3d., the man who has £7,000 pays 3jd., and up it goes until you get to the man who has ^20,000 a year, and then you get nearly the whole 6d. It is a graduation. The first time that principle was introduced into the House of Commons the Tories challenged it, but after six months' debate, the last time it was brought up, Mr. Balfour, on behalf of the whole of his party, withdrew his opposition. That shows that the longer you examine my taxes the more reasonable they become. At first they op- posed them. There was robbery, there was also theft, and the taint of Socialism. But after months of examination, and debate, and scrutiny, they said : " These are all right " ; and they went through without a division. But when the taxes reached the House of Lords, then they had something to say about them. Let us examine the taxes again. A man who gets ^20,000 a year is called upon to pay 6d. towards the unquestionable needs of the country. You want some- thing for defence. They themselves clamoured for it. They have got the goods, and will not pay for them. What does ^20,000 a year mean? If you take all the working days of the year and give the man who earns it a month's holiday, it means £70 a day. Is it unfair that a man who is so lucky, so fortunate as either to inherit that great income or to possess the brains and the gifts, given to him from on high, that enable him to make that great income, should be asked to give 6d. in the pound out of his fortune for the purpose of defending his native land, and to pay something for the wretched and the miserable in our midst? Let me say this, it is not the men who earn their wealth that grumble. I know many of them ; I never heard one of them complain that he was called upon to pay — never one of them. Every one of them has told me he thought it a fair and reasonable thing. It is men who never THE BUDGET EXAMINED 197 earned a copper of their wealth that complain. But tiny say, M Ah ! what we object to is not paying, but letting the income tax Commissioners know how much we have to pay upon." Of course they do. Who would not be glad to avoid the Income Tax Commissioners? It is wonderful what a difference it makes as to who asks questions about our means. We generally like to give the impression that we are doing rather well, all of us, except to the income tax assessor. We are so modest to him ; we are not doing very well ; trade is very bad, and it is getting worse. We do not like him to inquire too much into our circumstances, especially if we have ^20,000 a year to pay an extra sixpence upon. What these noble lords forget is that every tradesman in the land has to make an account. Professional men have to make an account. Why should not they? Why exempt a man from rendering an account of his taxable property purely because he has one man to fix his collar and adjust his tie in the morning, a couple of men to carry a boiled egg to him at breakfast, a fourth man to open the door for him, a fifth man to show him in and out of his carriage, and a sixth and a seventh to drive him? All men for whom the community provides such privileges as these ought really to pay for them. All we say is that we want to treat such a man no worse than either professional men or tradesmen or workmen. We want equal rights for all white men. Where is the Socialism of it? It is simply fair play and equal treatment. I propose also to put up the death duties. What does that mean? It means that where a man has been enabled, owing to the protection which the law gives him, which the organisation of society in this country affords him, which the security afforded by our Army and Navy have extended to him, to accumulate a large fortune and to transmit it to a second generation, there shall be a toll 198 BETTER TIMES paid at that stage by the man who receives. That is a principle which comes down from the days of the Roman Empire. It was extended by Mr. Pitt in this country, by Mr. Gladstone, by Sir William Harcourt. I have come on with my little contribution. What have I done? A man who leaves up to ^5,000 I have not touched. More than that, I pro- vide just a few little relaxations in the scale. For instance, where a man has got a mortgage on his pro- perty, and two or three modifications of that kind, so that he leaves under ^5,000 of property on the whole, I rather improve the position. That covers a vast multitude of people in this country. Up to ^20,000 I have only increased the duty very slightly. From that point, it is true, I do increase the scale until I get up to the millions. If there are any millionaires here I have no doubt they are feeling particularly sore with me at the present moment. Now, let us see. You know they talk in the House of Lords as though it were a very common thing for a man to leave thousands to his children in this country — as though every workman in the land left anything from ^5,000 to ^50,000, and as though every tradesman left from ^100,000 to a million, the poorer amongst us leaving a hundred thousand, and those who are better off leaving something in the neighbourhood of a million. They do not know the condition of things. It is not a question of thrift. They talk as if we were taxing thrift. Not all the thrift in the world will enable a man to accumulate a million, and beyond a certain point most of the wealth of this country is accumulated a good deal by luck. The assumption that when a man accumulates riches it is a proof of superior and superlative virtues, and that when a man dies poor it is, on the other hand, a proof that he has not been a very well-conducted citizen is true neither in history nor in fact. There were death duties in the Roman Empire, I am THE BUDGET EXAMINED 199 told, in the early days of the Christian era. I do not believe that the Apostles had to pay much, except in respect of one of them, and he, I believe, spent his life dabbling in finance. All we say is this, that if a man is lucky enoug-h to be able to leave millions no one suggests that they should be taken away, but that he ought to make a contribution towards providing for those who have been less fortunate in the battle of life. Consider the other taxes. I have two more taxes to deal with, but I am afraid that the heaviest tax of all is on your patience. What about the licences? I am told that these taxes are vindictive, oppressive, and grossly unfair. Let us examine them. What does a licence mean ? A licence is a monopoly granted by the State to a certain privileged, selected trader. A draper does not pay for a licence, but suppose that in the year 1828 the State said : "We must limit the number of drapers in this country," and they chose a comparative few, making strict provision to limit the number of drapers, and protecting them from competition. Supposing that during the last 10 or 15 years there had been a steady diminution in the number of drapers, and that the State passed another Bill in order to bring about a still greater diminution. Do not you think that the drapers would have been very pleased to pay a licence which would guarantee them against competi- tion? It would be a valuable commercial asset for them. A licence is a valuable asset, created by the State, and there is no injustice in the State demanding a fair and adequate return for a property which it created itself by its own acts. Let me say another word about licences. By my proposals we are charging 50 per cent, of the rent. Do you know that when you come to the smaller public-houses they are paying 50 per cent, now ? Why should it be fair to charge the small public-houses 50 per cent, without its being called confiscation and Socialism, and not fair to charge the big public houses 50 per cent. ? It is the same 2oo BETTER TIMES old vicious principle of graduation the wrong way, gradua- tion against the poor man. A big public-house does not pay in proportion one-twentieth of what the poor village publican pays. All we say is that what is fair to the village publican is equally fair to the great gin palaces of the cities. We now come to the land taxes. What are the proposals of these taxes? The first is this, that the owners of land should pay on its full real value. And when they talk about us exempting agriculture, the reason why we have done it is that the owner and occupier pay on its full value at this moment. You come to land in the neighbour- hood of a town, and very rarely can you get land even upon a tenth part of its value. There is no justice in it, there is no fairness in it. And you must remember this, that the value of land in the neighbourhood of a town has been created by the industrial growth and energies and efforts of the inhabitants of the town themselves. What is the second principle of the land taxes? It is that when land grows in value, not owing to any expen- diture by its owner, to any capital invested by him, to any improvements effected by him, but purely to the growth of the community around, then one-fifth of the increased value shall go to the pockets of the community that created the whole of it. What is the third tax? We have in this part of the country the leasehold system, which is a truly vicious system. What happens when a man takes a piece of land to build upon it? It may be land for which at the time the owner may be only getting a "few shillings. A man builds upon it, and the rent immediately goes up by leaps and bounds to as much as four, five, ten, and fifty times, and sometimes — I can give you cases — a hundred times the previous value of the land, solely because he has built a home for himself upon it. He gets a lease for 60, 70, or 80 years. Year by year the Vclue of that land and house THE BUDGET EXAMINED 201 passes out of the hands of the man that built it, who sweated for it, who raised money for it, into the hands of the man who never spent a penny in erecting the house. What do we say? We say the country has need of money, and we are looking - out for somebody to tax. We do not want to tax food, we will tax no man's raiment, we will not tax the house that shelters him and his family — what shall we tax? We do not want to tax industry, we do not want to tax enterprise, we do not want to tax commerce — what shall we tax? We will tax the man who is getting something that he never earned, that he never produced, and that by no law of justice and fairness ought ever to belong to him. So when that lease expires and the landlord comes in and seizes that house he has to give 10 per cent, to the community upon it. Well, they say that 10 per cent, is robbery ; I do not know what name they would give 50 per cent. ; but the landlord takes 100 per cent. ; we only take 10. If you can stand me a little longer, let me take my first proposition, that we are simply charging the landlord upon the real and not the nominal value of the land. I cannot do better than give you one or two cases, one or two concrete illustrations. How they loathe these cases ; they think facts are so vulgar, so common — it is so rude to mention them that I really must apologise for giving you a few facts. There is a very fine old castle in South Wales ; it is now in the hands of a Scotsman called the Marquis of Bute. It is a magnificent building ; it is the Marquis of Bute's South Wales residence. It has over a hundred acres of land — invaluable land in the heart of Cardiff. If you were to sell that land, I will not say you would get enough sovereigns for it to cover it, but you would get an enormous price for it. Well, that castle is now rated, with all that invaluable land, at ^924 per annum. Next door to this castle is a tailor's shop; on a site of some eight or nine hundred square yards. The 202 BETTER TIMES castle and its ground occupy 500,000 square yards. The tailor's shop is rated at ^947. £9 2 ^ for this gigantic castle, with its magnificent grounds in the heart of one of the most prosperous cities of the Empire; next door is this small tailor's shop, rated at ^23 higher every year. Well, now, nobody wants to take that castle away ; that is not the proposal. Nobody wishes to confiscate the property of the Marquis of Bute. But the tailor has to pay full value on his premises. I could give you other cases, but you can multiply from your own experience, your own observation, your own knowledge. You can compare the way in which the tradesman is assessed in any town, great or small, for his premises with the assessment which is placed on some great baronial castle or residence in the neighbourhood. You find that the tradesman has often to encounter very hard times, and he has always to pay. He has to pay the wholesale man, he has to pay wages, he has to pay the tax gatherer, he has to pay the rate col- lector, and he has to pay the ground landlord, and, it may be, he has to pay the mortgagee. At any rate, he has to pay promptly, he has to pay on the nail, and very often he has to deal with people who have not the same ideas of promptitude and punctuality as his creditors have. A large number of tradesmen are above this anxiety, but they have passed it on their way. No tradesman I have ever met objects to pay his taxes, whether Imperial or local, his fair share, but he objects to pay somebody else's share, for that is what happens here as long as you allow it. What we want is equal treat- ment for all. As an illustration of the increment duty, I will take an example from this town. You had a demand here a short time ago for land for the purposes of a ceme- tery and a new school. The land which was wanted for the cemetery was rated at £2 an acre. What THE BUDGET EXAMINED 203 did the landowner ask for that land? He wanted ^847 per acre. Two pounds an acre at 25 years' purchase would bring us ^50 ; the demand put forward was ^847. There are two things in this Budget concerning that — namely, that if land is worth ^847 it should be taxed upon that sum, and not upon £s°- If land goes up in value so rapidly in the neighbourhood of towns, if land worth £50 goes up to ;£8oo, the community which creates that value should get one-fifth of that increment for public purposes. You had a demand for a public school and wanted land for that purpose. The sum asked in respect for that land was, I think, about a thousand pounds an acre. The Times to-day — poor old Times, it is getting more Daily Maily every day — says I propose to confiscate the land of the people, to tax them out of their land. The fact is I only propose that the tax should be upon the real value, and not the nominal value ; I only propose that where there is increment in the value which is entirely attribu- table to the industry of the community and not the industry of the owner of the land, at any rate the community should have a share of it. That is a proposal that is in existence at the present moment in some of the greatest commercial cities of Europe, but no one calls it Socialism there. It has not been carried by the Socialist party; it has been carried by the great leaders of commerce, of trade, and of industry in those cities, and it is perfectly just. Those are some of the taxes. I will give you an illustration of my last tax of all, and a very good one too. It is the reversion tax. This illustration reached me only yesterday; it refers to the trust deed of a Calvinistic Methodist chapel, and since the monthly meeting vouches for it it must be all right. There is a little chapel that was built down in the Gower peninsula by the Calvinistic Methodist body. It was built many years ago, and it will be of interest to you to know that one of its first ministers was the late Mr. 2o 4 BETTER TIMES Wyndham Lewis. It is a very small chapel, and did not cost much to build ; but the principle is just the same. It cost about ^150. It is a poor neighbourhood, and for years and years, week in week out, they contributed their coppers just to pay the debt of that little chapel, to keep it going and to paint, decorate, and renovate it when necessary. But they had only a lease upon it. It was a lease on miserable hill land. The whole freehold of the land was not worth more than a few shillings. A short time ago that lease came to an end, and they thought it might be renewed. Not at all; the trustees were told that the chapel belonged to the landlord, and they had to buy the chapel back from the landlord — a chapel they had built with years of sacrifice they had to buy back. They had to pay ^150 for the chapel. They paid for redeeming the chapel site £iS°' To take that chapel from them, I suppose, is not robbery. It is not confiscation when the landlord stipulates by that document that the whole fruit of the labour of genera- tions of members of that little church passes at a certain time into his possession. Well, that is property, that is law; but when I come along and say to that landlord, " Here, the State wants money to protect you and your property, your mansion, your rights, your privileges — we want money to protect you. You must pay ^15 out of that ^150," they say "Robber." Well, I venture to say that every tax in the Budget is a fair one, a just one ; but I tell you what they object to. It is the valuation. How can you go to a town council whenever a town council wants land for a school, a cemetery, a waterworks, or a gas works, or for some other public purpose, say, for small holdings, for houses for the working classes — how can you go to that town council and say that land is worth a thousand pounds an acre when you have already made a declaration to the valuer that it is not worth ^50 an acre? You cannot THE BUDGET EXAMINED 205 do it. There is a man who will go round all this land and will say, "How much is it worth? In my judgment it is worth (let us say) £300 an acre." The landlord will come down and say, "No, it is not worth £100." The matter will be settled by a perfectly impartial tribunal ; there will be an appeal against that tribunal, and the ultimate Court of appeal may say that it is worth £200 an acre. By-and-by that land will be wanted, it may be to build houses for the working classes. They will go to the landlords and say, "This land is worth £200 an acre." He will say, "Good gracious; it is worth £1,500 an acre." How can it be? It is all registered. And if he does say that it is worth £1,500 an acre, and if he proves that it is worth £1,500 an acre, then that means that that land has gone up from £200 to £1,500, and that it has increased in value by £1,300. Who created that difference? You will go to the landlord and say, "Did you make it worth .£1,500 when it was only worth £200?" He will say, "Yes." We will say, "What have you done to it ? Have you improved it in any way ; have you done anything to increase its value?" And if he cannot prove that he has improved it we will then say, "There is an increase in the value of £1,300 which is due to the community, and we will take a modest 20 per cent, of the increase." We are going to get at the real value of land. A good deal hangs on that. Each successive Parliament adds to the number of objects for which land can be com- pulsorily acquired. We have added housing, small hold- ings, roads for opening up the country, afforestation, ex- perimental farms. In future, when we get valuation, we will pay, not fancy prices, but the real value. These are the taxes, these are our proposals. What do our opponents object to? Where is the Socialism, injustice, and wrong? Where is the oppression? Where is the unfairness of it? Do they object to what we are 206 BETTER TIMES spending the money for? They do not complain about our building- Dreadnoughts ; they want more, but they want someone else to pay for them. Do they object to pensions? What do they object to? Is it unfair to raise money for these purposes? We are imposing no burdens upon the earnings of any working man. The vast majority — I am sure the whole-v- of the middle class of this country escape additional burdens. We put no burden upon the necessities of life of anyone. We are taxing the surplus. We are taxing the luxuries. If a man has enough after maintaining his wife and family, and can spare something upon whisky and tobacco, why should he not afterwards contribute towards the pensions and defences of the country? No; we are raising money by means that make it no more difficult for men to live, we are raising it for making provision for hundreds of thousands of workmen in the country who have nothing between them and starvation in old age except the charity of the parish. We propose a great scheme in order to set up a fund in this country that will see that no man suffers hunger in the dark days of sickness, breakdown in health, and unemploy- ment which visit so many of us. These schemes for the betterment of the people, we shall get some day. We cannot get them without effort, and they will not be worth getting without effort. Freedom does not descend like manna from Heaven. It has been won step by step, by tramping the wilderness, fighting enemies, crossing Jordan, and clearing Jebusites out of the land. I do not regret that we cannot obtain these blessings except by fighting. The common people have taken no step that was worth taking without effort, sacrifice, and suffering. I cannot pretend to regret this conflict with which we are now confronted. It is well that democracies should now and again engage in these great struggles for a wider freedom and a higher life. They represent stages THE BUDGET EXAMINED 207 in the advance of the people from the bondage of the past to the blessings of the future. Those who dread these political convulsions, who apprehend from them nothing but destruction and danger, have read their history in vain. The race has nothing to fear except from stagnation. Against our will, we have been pre- cipitated into this tumult. For all that, we mean to win our way through it to a better time. The people may not secure all they seek, but if they bear themselves manfully they will achieve other ends they dare not even hope for now. Yesterday I visited the old village where I was brought up. I wandered through the woods familiar to my boyhood. There I saw a child gathering sticks for firewood, and I thought of the hours which I spent in the same pleasant and profitable occupation, for I also have been something of a "backwoodsman." And there was one experience taught me then which is of some profit to me to-day. I learnt as a child that it was little use going into the woods after a period of calm and fine weather, for I generally returned empty-handed ; but after a great storm I always came back with an armful. We are in for rough weather. We may be even in for a winter of storms which will rock the forest, break many a withered branch, and leave many a rotten tree torn up by the roots. But when the weather clears you may depend upon it that there will be something brought within the reach of the people that will give warmth and glow to their grey lives, something that will help to dispel the hunger, the despair, the oppres- sion, and the wrong which now chill so many of their hearths. FREE CHURCHMEN AND THE HOUSE OF LORDS Queen's Hall, December 16, 1909. I am not here to-night as a Liberal Minister; I am not here as a member of a political party ; I am here, like your chairman, as a quiet and retiring Free Churchman, but not a very silent one. I am here to take counsel with my fellow-members of the Free Churches as to what we ought to do in the gravest crisis which I think has befallen the Free Churches in your time or in mine. Why should this crisis be peculiarly one which affects the Free Churches? It is perfectly true that as citizens of the Empire they are affected by all the great political questions which are initial in this election ; but it may be said that they are not more gravely or injuriously affected than any other section of the citizens of the country. Finance affects them as citizens, but why should it affect them as Free Churchmen? Free Trade affects them, but not as Nonconformists. The small loaf is no smaller on a Nonconformist table than on the Church table; and I do not think that German horseflesh would be more palat- able to the Church party than to the Nonconformists. We therefore know this to be a crisis affecting Nonconformists especially. It is because it raises graver and deeper and 208 FREE CHURCHMEN AND HOUSE OF LORDS 209 wider issues than either finance or trade. The Free Churchmen of this country once fought the greatest battle and won the noblest triumph ever achieved for religious liberty in a struggle over finance, over a question of supply. It was their battle. They fought it for the free- dom of conscience in a conflict which involved the right of the Commons to be the sole guardians of the Supply of the Kingdom. That situation has been reproduced. We fought not merely for the rights of supply, but, as the chairman has indicated, also for the freedom of conscience in our schools. I do not propose to enter into an ex- amination of all the grievances of the Free Churchmen. I would rather, in the course of the time placed at my disposal, proceed to a calm examination of the general situation as it affects Nonconformists in this land. What is our grievance? Our grievance is not merely the grievance of the school in England and Wales. It is not merely the grievance of the Church in Wales. Our grievance is this — that our case, whatever it is, is ex- amined by a prejudiced tribunal. Whatever grievance Nonconformity may suffer from, whatever injustice it endures, whatever its claim, what- ever its petition, it has to bring it before a tribunal which is essentially biassed, one-sided, prejudiced — that is our grievance. Parliament is well called the High Court of Parliament. W T hy? It is the highest Court in the land. It sits in judgment, not to administer laws; it sits in judgment on the law itself. It is the only tribunal that can do that. It examines the law. The law is brought before it. There is a petition from the subject against that law. Parliament sits in judgment to examine whether that law is a righteous and fair one. I say it is essential that so high a Court, so exalted a tribunal, shall be free from any suspicion of bias or partiality or unfairness. And my contention as a Free Churchman is this, that the Lords are a biassed Court, sitting in permanent judgment upon 2io BETTER TIMES the rights of millions of Free Churchmen, who have not a shadow of a chance of getting equal justice from them. I say that is a serious indictment against such an essen- tial part of the Constitution of the realm as its law-making machinery must necessarily be, and I do not think it is a charge that ought to be brought without very substan- tial justification for it, and I propose to give the grounds upon which I justify it. My contention is this : that if there is any class of the community that is entitled to a special claim in this re- spect, it is the Nonconformist. Look at it from a purely material point of view. The Nonconformists constitute some of the very best citizens of the land ; the honest, industrious, thrifty, sober work- ing men, the most capable business men of the land. Supposing any statesman were to find that this land were overcrowded, and that in order to enable us to gain a living here at all it were necessary to expatriate, say, five millions of the population — supposing such a thing were possible, no real statesman would begin with the Non- conformists. I will tell you why. What would happen if he were to expel Nonconformists? He would find that most of the mines of this country would be closed. He would find that there would be whole areas of land abso- lutely uncultivated — there would be no agricultural labourers and very few farmers. The factories would be almost derelict ; in fact, the whole business of this country would come to a standstill. It would be worse than the year after Tariff Reform ! These are citizens who are essential to the prosperity and the well-being and the very life of this community. But it is not merely that. Our very Constitution, everything that is best in our law, in our jurisprudence, in our Constitution, is attributable to the effort and to the sacrifice of Nonconformists. Hume, no very partial historian to Nonconformity, ad- mitted that the country owed its very Constitution to the FREE CHURCHMEN AND HOUSE OF LORDS 211 struggles of the Puritans. Freedom, the greatest triumph of civilisation, was won in this country by the Free Churches. And if there Is perfect freedom in this land for any man in any place of worship, it is because its doorposts and its lintels are sprinkled with the blood of the Nonconformists. What do we claim? Fair play. Nothing more do we ask; nothing less will we take. Do we get it? I would appeal not merely to Nonconformists, but to any fair- minded Churchman ; what defence has he got or answer for the position in the villages of England and Wales? Eight thousand villages ! One, one school — only one school possible. If you duplicate the schools you destroy education, and, of course, you double the burden on the community, whilst at the same time you diminish that portion of the efficiency of education. You might have imagined that in a case of that kind every Christian com- munity would be prepared to make some sacrifice ; to give something up to you in a brotherly, kindly, charitable, tolerant spirit — men of older faith — and arrange to have a common school where all the children could go. We really don't think they would be contaminated. They might very well, at any rate in the villages, manage to pull together. What happens? In these parishes the school is entirely in the hands of one Church ; practically managed by that Church, teachers all belonging to that Church, the avenue of promotion for teacherships rigidly closed against every Nonconformist child, however bright he may be. I have been in a school of that kind myself; I was there ten years, and was very well treated by the clergyman of the parish, who kindly offered to make me a pupil teacher on condition that I should leave the Baptist community and join the Church of England. It was offered me in a kindly spirit, and if I had only accepted it I might have been a curate now ! That is not religious education. It is the very worst education. I cannot con- ceive a more irreligious education. It is more degrading p 2 212 BETTER TIMES than a pagan philosophy to come to a child and say, " I will offer you " — what is, after all, the only avenue to the profession for a poor child — " I will offer you an honour- able position in life if you will only sell the faith of your fathers." In the old days there might have been something to say for it. The school belonged to the Church, and was built by the Church — with the help of Nonconformist sub- scriptions, it is true ! — but at any rate, the responsibility for collecting the money was upon the Church. Still worse, the lawyer, as a rule, was a Churchman, and he took care that the deeds were properly drawn. In those days the burden of maintaining the school was upon the Church. The contribution from the State was a small one. But to-day the schools are maintained by public funds, the teacher is paid exclusively out of them, the books are bought out of the rates, the very desks — which are there not merely for the day-school but for the Sunday-school of the Church as well — are bought out of the rates ; the building is maintained out of the rates, and the very cost of cleaning is borne by rates. It is mon- strous, in a case of that kind, that all ratepayers, with- out distinction of faith, should not have the same share in the management of that school. Well, now, we brought in a Bill. First of all we sought a mandate from the country, and we got it. There is a great deal of talk about the Budget not having received the sanction of the electorate. The Budget is safe at any rate. Why do they object to it? They have no objection to it, except that they want to protect the poor people especially, and they want to be perfectly sure that we all want it. The moment they are sure of that point it will be through. But with regard to Education, there was a Bill the main principles of which were submitted to the electorate. It was discussed on every platform, it was discussed for weeks in the House of Commons, every candidate was asked questions about it. If it is possible to get a man- FREE CHURCHMEN AND HOUSE OF LORDS 213 date at all for anything, the mandate was secured for an Education Bill on the lines of that introduced by Mr. Birrell. If that mandate was departed from at all in that Bill it was in the direction of securing safeguards for denominationalists which we never pledged ourselves to give, but they have no complaint of that. It is ours, not theirs. What happened? Here is a Bill, so temperate, so moderate, so tolerant even to the denominationalists, that the whole body of the Catholics in the House of Com- mons voted for it finally. That Bill sent up to the House of Lords is torn to little bits. How can you expect fair play from a tribunal of that sort? We have suffered dis- appointment after disappointment. It is not our fault. The Liberal Government is not responsible. It has done its best, and it is only the House of Lords that stands in the way. Look at their general record in their treat- ment of Nonconformity. Can you think of any Nonconformist measure that has ever received fair treatment at their hands? I cannot think of any Bill promoted in the interest of the Church of England ever rejected by the House of Lords — not one. I am not complaining of that, mind you, not at all ; I cannot think of any Church of England Bill ever amended by them except one, and that was amended in the interests of the Church — the Education Act of 1902. They amended it to give more money to the Church, and then they infringed the privileges of the House of Commons. Now they are infringing the privi- leges of the House of Commons by denying our rights, they are infringing the privileges of the House of Com- mons in order to extend the rights and privileges of their own denomination. That is their record with regard to Church Bills. What about Nonconformist Bills? I cannot recall a single Nonconformist Bill ever sent up to the House of Lords which was not either rejected alto- gether or amended to the detriment of Nonconformity — not one. And it must be remembered that these Bills 2i 4 BETTER TIMES were sent up by a House of Commons, the majority of whose members are Church of England people. Yet look at the Bills the Lords have rejected time after time, time after time, till we were weary of asking — generations passing away, and when they eventually granted them as a result of agitation, turbulence, obloquy, it was done in a way perfectly graceless and grudging; they amended, and you can see now the finger-marks of the culprit on those measures to this day. Some of the Bills they eventually carried after years of pressure were Bills which you would not get a Tory now to deny the justice of. Take the admission of Noncon- formists to the Universities. There is no man so insane in this country as to get up and propose that you should reimpose those tests, and yet for years those tests were defended, those tests were maintained on grounds of high principle by the House of Lords. You might have imagined that the moment those tests were removed the whole fabric of society would be underpinned. Justice is impossible with a House of Lords constituted as at pre- sent — and I will tell you why. It is too one-sided an assembly. It is drawn too much, as Lord Salisbury him- self admitted, from one class, one faith, and one order. If you get a very Tory House of Commons, men who are thoroughly biassed against Nonconformity, there is always one corrective. There is the knowledge that there are a million Nonconformist voters that have to be reckoned with — a very valuable corrective for bias, for prejudice, and for any desire to do injustice to Noncon- formity. But that does not apply to the House of Lords. On the contrary, they are not responsible to anyone ex- cept of their own class, and perhaps to their own party machine. Now look at its constitution. Who are they? You have got first of all the bishops there — the leaders of one Church. I have not a word to say against them. Some of them have behaved extraordinarily well — I mean for them — over the Budget — actually five out of twenty- FREE CHURCHMEN AND HOUSE OF LORDS 215 six voted for a Budget imposing taxes on the rich ! Well, that is an extraordinary record, and let us frankly admit it. One Archbishop actually voted for it, and the other man at any rate had the grace to stay at home. But there you are. They are representatives purely of one Church. All the other great Churches of the land are quite unrepresented — the Church of Scotland, the Free Churches and the Catholic Church. You have four or five hundred laymen of the same Church. You have only two or three Nonconformists there. I am not sure that there are as many, but you have ten times as many pagans, I believe. But at any rate, suppose you reverse the order of things, and instead of being members of the Anglican communion, suppose they had been members of the Free Churches. Suppose, instead of twenty-six lead- ing divines of the Anglican community, you had twenty- six of the chosen ministers of the Free Churches — the Archbishop of Westbourne Park, for instance, and a Bishop of Birmingham in the person of Rev. J. H. Jowett. Do you think the Church of England, with 400 or 500 leading Nonconformist laymen there, would feel the same confidence in the hereditary principle as they do at the present moment? Ah, what democrats that would make of them ! The Lords are bound in the very nature of things to have a prejudice against Nonconformity. Among them- selves they do not deny it. I am not one of those who say they are monsters. On the contrary, I regard them as ordinary human beings, with just the ordinary prejudices of their class — social, theological — those who have got theology — political, just like any other persons. Now I say they are bound to be prejudiced on all these grounds against Nonconformity. I see that Lord Curzon has been championing the hereditary principle and quoting a great agnostic writer with approval. He states that civilisation has been the work of aristocracy. That is not the view of Noncon- 216 BETTER TIMES formity. We are of the humble belief that the carpenter's Son of Nazareth had more to do with it, that the Galilean fishermen had far more to do with what is best and highest in our civilisation. Let me say it with reverence that the heaviest swell among them was purely an exciseman. No aristocracy there, and yet civilisation owes its best and purest to them. But how does the aristocracy re- gard the Churches that preach that especially? Go through rural England. I have had a good deal of motor- ing. There is this advantage in motoring — you see the country for the first time — what the country is before mines are opened and factories set up, and the country that will remain after probably the last ton of coals has darkened the atmosphere. It is a beautiful country. I know my own little country of Wales. I know its gran- deur, but I had not observed England closely before my motoring experiences, and, I tell you what you all know — it is one of the most exquisite of the works of the Great Architect. What strikes me in the landscape is this. On the one side you see the great baronial castle and the stately Elizabethan mansion, and on the other side a little red-brick building with a word on a board, either " Metho- dist " or " Congregationalist " or "Baptist." One thing you may be certain about, and thatls that the little chapel is the only place in the village that will stand up to that castle. All the men in the village who would decline to cringe, they are there. Those little buildings — unsightly sometimes — they are the sanctuaries and citadels of vil- lage independence. Do you think the Peers love them for that? Why should they? Why, I believe in their hearts they put Primitive Methodists and poachers in the same category, as people whom they would rather see living on the neighbouring estate. Those little chapels are there to fight for the rights of the people, and they do it. Let me give you a little experience in my own country, which is a Nonconformist country. There is no man who is more disposed to pay respect to the good old county FREE CHURCHMEN AND HOUSE OF LORDS 217 families than the Celt, and if he has quarrelled with them you may depend upon it it is not without cause, and it is not without patient, long-suffering experience. But he has done it. In the old days you could in an election tell what was going to happen by simply asking for the list of the landowners, and by going through it, and saying, " Squire So-and-so is a Tory — 300 tenants. Put 300 down, please. Lord So-and-so is a Tory. He has 1,000 tenants — Tory. Squire So-and-so, he is a Liberal. He has 100 tenants. They will vote Liberal." It was regarded as almost the tenure of the land that a man should vote with his land- lord. A man's political convictions, in the jargon of the lawyers, were covenanted with the land, and when some of the great Nonconformist fathers of Wales first hinted that that was bondage, the landlords regarded the sugges- tion that the tenant should vote according to his conscience as confiscation and robbery. It was taking away their property. Who freed the political slaves in our country? Non- conformity. How did they do it? Not by preaching politics — no. But they restored to the man the mastery over his own soul — made a man of him. It is like the Japanese altar I saw a picture of the other day. There was a tree that had struck its roots under the altar. As it grew and expanded and spread its roots in the cracks and crevices it gradually demolished it, and it was ruined. That is what has been in our country. The seed was sown under the altar of Feudalism. It grew and ex- panded and struck its roots, and the altar is now a ruin, and the deities have left it there. Do you really expect these men to remove obstacles in the way of the expan- sion of that tree? No, they would rather cut it down. That is why I say they are biassed against Nonconformity. They are bound to be biassed. Nonconformity stands up to them, fights them in their native lairs, and there- fore they are not likely to give it a fair hearing. The Times, I think, talks about the House of Lords as a 218 BETTER TIMES jury. All I say is if it is a jury we challenge the panel. It is a biassed jury. It is not a fair jury. It is not pro- perly summoned. It is not properly constituted. Non- conformity has no free access to it. It has no cham- pions there. It has no hearing there. Judgment goes against it by default. We have the right to demand justice from the highest tribunal in the land- — and we mean to get it, too. But we are not merely interested in our own grievances ; we are interested in the great social questions referred to by the chairman, and I think one of the finest incidents in the history of Nonconformity is the way in which Non- conformists, eager to get settlement of their wrongs, were ready to postpone them when the Liberal Government undertook to do something to protect the poor drunkard. Like Sir Philip Sidney stricken on the battlefield, sorely wounded, they were quite prepared to pass on a glass of water to a poor, stricken, wounded wretch, lying more sorely distressed than they. It was one of the finest in- cidents in the history of the Free Churches. What did the House of Lords do? Here is a Bill demanded by all the Churches of the land. Nonconformists? Yes. Established? Yes. Catholic? Yes. All the Christian Churches of the land unanimously prayed Parliament to grant this protection to the poor drunkard's home and hearth. What did they do? At the behest of a great but powerful Trade they flung it out. Ah ! but there is a sad lesson in it. Are they more powerful — is that Trade more powerful — than all the moral and spiritual agencies in the land? If it is— if it is! I was reading the other day an old sermon delivered 200 years ago, and I was struck with this sentence : " The true reason of the great wrong in the world is because we maintain an army against the devil of whom he standeth not in awe." Here is all the army — regulars, territorials, militia; they are all there. And it stands up to their bidding but fears them not. This election will prove FREE CHURCHMEN AND HOUSE OF LORDS 219 whether this country is to be dominated by the drink traffic or by the people. There is untold wretchedness and squalor around us in this land, and, unhappily, in every civilised community. Read Charles Booth — and many of you have done it — his account of the mean streets of some of the London slums is like a supplement to Dante's "Inferno." The very poor lead lives under a firmament of leaden despair, unbroken by a gleam of joy. Yes, lives where the fumes of alcohol constitute their sole substitute for hope. Have the Free Churches, have all the Churches no responsibility for these people, too rigid to murmur, too feeble to cry for help? I say to the Churches of the land, with this misery oozing around their stateliest temples, that unless they can prove that they have spared no sacrifice, no effort to avert, to dispel it, and to cleanse the land from the greed and the oppres- sion that cause it, then the responsibility must ever be on the altars of their faith, and upon the bared heads of those who bow before them. THE PEERS AND PUBLIC OPINION Walworth, December 17, 1909. Your chairman (Captain Cecil Norton, M.P.) has a splendid record in the service of the Liberal party. His complaint and mine is that after about four years' hard work in the House of Commons carrying out your mandate we find the whole of that work destroyed by an absolutely irresponsible assembly. He comes down to you at the General Election to find out what you want, what you are in need of. He makes a note of it, goes up there to carry out the orders, collects the goods together, intends to bring them back ; and here comes in the House of Lords and flings them into the street on the plea that they understand much better what you want than he does. That is the question which you have to decide here, and which has to be decided in every constituency throughout the land — whether the people of the country are going to make their wishes known through their elected representa- tives or whether they are going to depend upon the House of Peers. Who are the representatives of the people? They are men who first of all have to come down before the con- stituency and explain their views fully to them. Generally they visit them from door to door and make themselves acquainted with their views personally face to face; they THE PEERS AND PUBLIC OPINION 221 are cross-examined and heckled ; they have to explain fully what they are prepared to do if they are returned. At the end of five or six years, if they have not done it, they are called to a reckoning — to face the men to whom they have given their pledges and to give an account of their stewardship ; and if they have fallen short in the slightest particular they are called to account. That is the position of a Member of the House of Commons. He is dismissed unless he actually carries out the pledges he made to his constituents. What about the House of Lords? How do they ascer- tain the wishes of the people ? Have you seen any dukes about the Walworth Road? Before the Budget was thrown out, did any earls leave their visiting-cards upon you? How do they ascertain the wishes of the people? Whence the cause of this excessive anxiety on the part of the House of Lords to ascertain the opinion of the country? Have they always shown this anxiety? Is it hereditary? I have some recollection of their resistance to the Reform Bills which provided machinery for ascertaining the views of the people, and so anxious were they that the views of the people should not be expressed that they resisted even up to revolution. Therefore, it is quite a new thing, this extreme anxiety on their part to ascertain the real views of the people of the country. Now, where does it come from? It is rather one-sided. You go to some restaurant, and if you get an excessively polite waiter there he shows you a dish before he starts carving it, in order to ascertain whether it meets your wishes. I will tell you what the House of Lords does. If the cook is a Liberal one, it insists upon showing the dish and ascertaining the views of every customer before it serves a single cut, until it gets quite cold. But if the cook happens to be a Tory one, it never ascertains the views of the customer. He has to take it. And 222 BETTER TIMES very often, when he has ordered chicken, he simply gets crow. I have been struck, during the debates on the Budget, with this new care of the peers for the wants of the people. If they object to paying, it is purely in the interests of the people. They say, " You are putting up the death duties ; you are setting up a super-tax ; you are taxing land. We have absolutely no objection to paying, but we don't think it is in the interests of the people." If they withhold land from building, it is purely because it benefits the people to keep these spaces open, and if they charge extortionate rents for the land which they let, that, again, is in the interests of the people. It has the effect undoubtedly of crowding them into the narrow streets without air, and without light. But that is in their interest. They are so much more compact. It draws them near together. It is so much more sociable and keeps them warmer in winter. Whereas, if you open out the land and have roomy buildings and plenty of air, just look at the distance between you and your next door neighbour. With these gardens the wind would blow around you and the sun would spoil your carpets. It is all in your interest, the administration of the land. It is time we should appreciate this great tender care for us by the Lords. They say you think we are keeping up these great establishments in the country for our own benefit. Not at all. Purely for the interests of the people. The game laws — look, they say, at the expense, the trouble, the worry we are put to, to keep these going, all to provide employment for the people — gamekeepers, a useful employment for making and keeping together prisons, all in the interests of the people. W T ell, they will discover at this election that the people think differently. We have had a great burden cast on us, as your chair- man very well put it, owing to the exigencies of national defence. Who clamoured for these Dreadnoughts? I remember a great meeting in the City presided over by THE PEERS AND PUBLIC OPINION 223 Lord Rothschild, in which he demanded that there should be instantly laid down eight Dreadnoughts. Well, we have ordered four, and he won't pay. There was a very cruel king- and taskmaster in the past who ordered Lord Rothschild's ancestors to make bricks without straw. I tell you that was a very much easier job than making Dreadnoughts without money. We had to get the money. They admit it now. We had to get money also for pensions, which they did their very best to hold back. Now they are going about the country saying "nothing further from our minds." Very well ; but why do they object to pay for them ? They say we don't object to their being paid for, but we think the way you are going about it is not the right way. You should not put it on the land of the country. Why don't you tax food? Tax the food of the workmen's children in order to spare the acres for the landlord's child, so that the workman's spare store to feed his child shall be diminished and dwindled in order that the estate shall be preserved for the landlord's heir. We will have none of that. But they say it is so much better for trade. When the Budget was brought in trade was not good at the time. Trade is just like the sea. It has its ebb and flow. At one moment you have the flowing tide that carries all before it; then you have the ebb. We had the ebb tide. Undoubtedly there were industries left high and dry. That is one of the misfortunes of the present system, which no man up to the present has discovered a complete remedy for; and it is idle to talk as if it were purely British. And I say if you are bound to have unemployment you had better have it with cheap bread than with dear bread. At any rate, the Budget does one thing. It has set aside over a million of money a year for the purpose of providing insurance against unemployment for the work- 224 BETTER TIMES men of the country. When the Budget was brought in, trade was not particularly good, and they said : M Now you are bringing in a Budget which destroys credit and upsets confidence. Trade is bad now. It will be infinitely worse under this Budget." That was their story. Let us have the facts. What has happened since then? Since the Budget was introduced trade has steadily improved, and the extraordinary thing is — I am not claim- ing the credit for the Budget — that this improvement began as soon as the Budget was introduced. Trade went steadily up ; our imports and exports went steadily up. Before April of this year our foreign trade was going down. We had still the greatest foreign trade in the world, but it was going down as compared with the corresponding month of the previous year. W 7 hat has happened since April? Our exports have gone up by ten and a half millions during the period since the Budget was brought in. What does that mean? I will take Mr. Chamberlain's method of testing imports and exports. He says, " Half of these exports or imports are wages." Very well. That means that if we have exported ten and a half millions more of British goods since April the foreigner has been paying us five and a quarter millions more wages. Oh ! this wicked foreigner. That is the way Free Trade taxes the foreigner. Now look at the employment statistics. Employment has improved so steadily that unemployment at the end of October was less by 25 per cent, than it was in the October of the previous year. I do not say it is satis- factory, but it has improved. It is getting better, and it is going to improve still more. There is one fact which is of enormous importance when you come to reckon the prospects for the future, and that is the harvests of the world. Under Free Trade that will count. We lock no door THE PEERS AND PUBLIC OPINION 225 against the good things that Providence has left for the people. You know it is important. No country has always a good harvest. Each has its turn, and when there is a drought in Canaan there is always plenty in Egypt. That is the way, through the harvests of the world, you find. One year Russia fails. What then? The Argentine comes in with a bumper harvest. One year Canada has a blight. Then you probably find that Russia, India, or Australia has a good harvest. That is the advantage of Free Trade. We place the world under tribute. We take the sunshine wherever it comes — the sunshine and the rain that ripen the harvest wherever they fall. Britain gets the advantage of it. Well, I say the harvests of the world are good this year. That means two things for Great Britain. The first is that next year there will be better trade than ever. The second thing is that the food of the world will become very much cheaper, and with Free Trade we shall enter into the full inheritance of Providence when that year comes. This is very hard on the landlords. They have been looking forward to a period of bad trade as the result of the Budget, and here everything goes against them. The foreigner, of course, goes against them. Just at the moment when they wanted bad trade this pernicious foreigner comes in and buys ten millions' worth more of our goods. He is always up to some mischief. Ah ! never you mind, when the Tariff Reformer comes in he will pay them out for that, though the country starve in the process. Not merely that. Providence seems to be on our side. On the whole trade is improving. The wool mills of Yorkshire are improving in their trade ; and in spite of the Budget the people are wearing tweeds. What they really ought to be wearing is sackcloth and ashes. But I am not so sure of that. Sackcloth, I believe, is Q 226 BETTER TIMES made out of jute, and ashes come out of the coal. That means improving the trade of Dundee and Wales. So there is absolutely nothing in the contention that the Budget has upset credit, and that it has interfered with trade. On the contrary, trade has improved. After all, these things do not depend on argument. Trust to facts. You may depend upon it these returns, at any rate, never lie. There they are. The Customs every month register the quantity of goods that leave our shores, the quantity of goods that come to our shores, and they are improving month by month, and the latest was the best month of all. But they say, " Ah, but we have such an excellent alter- native if we were only allowed to present it." Well, what is it? I have been trying to find out. Lord Lans- downe made a speech, and he began to say how the sixteen millions were to be raised, and the only concrete suggestion that I could find was this — he proposed that you should tax soda water. A very admirable suggestion ! But really has he any notion of how much soda water is drunk in this country? You know he has an idea that he is getting at the teetotalers in that way ! I have heard it said before, so if you don't mind I will answer it now. It was never said in the House of Commons, where you could give an answer. After all, the object of the Budget is to raise moneys Supposing you tax all mineral waters, both manufactured at home and imported into this country ! What do you get? A couple of hundred thousand pounds. I wanted sixteen millions. Well, now, it is a sort of delusion under which these gentlemen labour that teetotalers indulge in orgies of soda water, and that every evening they drink quarts of it. And therefore, they say, "Let's tax them." In the first place, I should say that I find that about half the mineral waters in the country are drunk by people who mix them with something else — judiciously, I have no doubt. I have made some inquiries into this — I can THE PEERS AND PUBLIC OPINION 227 tell you when I was making the Budget I inquired ini<< everything, and I had all sorts of suggestions. Why, one day I received a postcard : — " I had two cats on my window-sill last night ; there were three in the back-garden. They kept me awake all night. Tax cats ! " That writer evidently believed in a vindictive Budget. Well now, I inquired into this mineral water business. The first thing I found was that there was no money in it. That was fatal. If there had been any money in it, it would not have fallen on the teetotaler — only on the drinker in another way ; and on the children. I find that most of these fancy drinks are indulged in by the children. Lord Lansdowne's answer is — "Don't tax the landlords; tax the kiddies ! — tax anything but land ! " But Mr. Austen Chamberlain had a real alternative; he said it was up his sleeve. Well, somebody dropped the card out of that sleeve and the editor of the Birmingham Post picked it up. What was it? The same old story! Taxing the food of the people. This is their alternative Budget, and this is what is going to produce the great revival in trade ! Employment for everybody — except the landlords ! Really, I am amazed at some of the things which are said about this question. I noticed yesterday, walking about different parts of London, posters making statements — well, I really don't like to characterise them; if I did I should use the language of Mr. Balfour — if I were Mr. Balfour I would call them "painted lies." One poster stated that everything had gone back since the Liberals had come into power — employment, trade, and everything else, and it compared the present position with the posi- tion the year before they came into office. Well, I was anxious to find out how things really stood. You know you need not go to posters to find out these facts ; they are all enshrined in the records of the Customs House and the Board of Trade. I ventured to look at Q 2 228 BETTER TIMES the figures of the Board of Trade returns the year before the Liberals came into office, and I compared them with the last eleven months. Take the eleven months ending November, 1905, compared with the eleven months ending November, 1909, and the exports of British goods have gone up by forty-three millions — to be perfectly accurate, forty-three millions and a quarter. What does that mean, taking again the Chamberlain test that the foreigner is paying? It means twenty-two million more wages in respect of the trade of this year than it did in respect of the trade of 1905. I should like to hear their explanation of that. Ah ! no. They want to tax food ; they want to go back to the "good old days " before the Corn Laws, when rents were high and hundreds of thousands were starving- in the land. That is what they want to go back to. We know their alternative Budget. They are throwing out the present Budget purely and simply as a conspiracy between the great manufacturers and the landlords in order to increase the profits of the one and the rents of the other. If this Budget went through, they said, there would be no excuse for it; the money would be provided — provided without imposing the slightest burden on any necessary of life. Oh, yes; it was getting on very well before the Budget. The manufacturer was to get 10 per cent, on goods that would keep out all competition, so that prices should gfo up) — so the prices of everything would go up in this country — everything would go up, we would have to pay more for all the commodities of life. What would happen then? More employment? I beg pardon. What would happen ? We would sell less goods than we have ever done abroad. How do you make that out? I will tell you. Neither the Colonies nor the foreigners buy our goods except for two reasons — either their quality is better or the price is cheaper for the same quality. They are not buying them because they love us. You go to the Colonies with any article, wherever THE PEERS AND PUBLIC OPINION 229 it comes from — French, Russian, German, American — if it is a better article for the cheaper price. They are not going to buy the British article which is inferior at a bigger price. That is not the way to do business. Our goods are beating them all because we are able to put them on the market more cheaply than any other country. I am going to give you one statement now, and I challenge anyone in the Elephant and Castle Tariff Reform Club to contradict it. You cannot have dear material, high wages, and a great foreign trade. Do you follow that? I think it is worth repeating. You cannot have high wages, dear materials, and a big foreign trade. If you want a big foreign trade with dear materials you must cut down your wages. I prove it by facts. There are four great manufacturing countries in this world — the United States of America, Germany, France, and, of course, our own country. The United States of America has eighty millions of people. It has richer resources than we have, and there- fore it is bound to be the first manufacturing country in the world. Nothing can prevent it. We have a popula- tion of only forty-five millions. Germany has sixty millions, and France has somewhere about forty millions. We have the highest wages in Europe. We have the shortest hours in Europe. We have the cheapest condi- tions of life in Europe. Will any Tariff Reformer deny these facts? Germany wants to compete with us. How does she do it? We have the cheapest material in the world because we have no tariff. The material for every manufacture is cheaper here than in any other land. The Germans know it. They have a tariff so that their materials are dear. They cut down the wages, and they increase the hours of labour. Even then we beat them. Now listen to this. I will give you the figures for these four countries, and although figures seem very dry things they are not really. 2 3 o BETTER TIMES The figures of our trade are more exciting, more sensa- tional than any romance you could pick out. It is a great, a marvellous story of courage, enterprise, adven- ture, skill, daring, with the crown of freedom over it all. Now take these countries, three of them highly protected countries, the fourth of them, thank God, still under the banner of freedom. Germany during the last five years exported of manufactured goods — I am confining myself to purely manufactured goods — a thousand and twenty- three millions, a huge trade. The United States of America — I want you to follow this ; in Germany there is a high tariff and low wages, so she is able to sell a thousand millions worth of goods — the United States of America has a high tariff, but also high wages, so she can only export 689 millions. She sells less by nearly 400 millions than Germany. Why? She cannot have dear material and dear wages as well. France, which is a country just about our size, only sells 586 millions. What about our own country? Ruined by Free Trade. Nothing to do! It sells 1,400 millions — 400 millions more than Germany, and highest of the lot. What does that mean? She is able to give better wages than Germany, better hours of labour, better conditions. She meets her in all the markets of the world face to face, armed only with freedom. She beats her by 400 millions in the course of these five years. Now, what is the good of talking about tariffs promoting trade? The first thing that would happen to a tariff would be this : the profits would go up, but the material would cost more. We could not sell our articles as cheaply as we do now. If we could not sell them as cheaply, who would buy them? Do you think the people of the world are going to pay 10 per cent, more for our goods than THE PEERS AND PUBLIC OPINION 231 they do now? Not at all. We should sell at least 10 per cent. less. Where is the more employment in that? On the contrary, it would throw hundreds of thousands of workmen out of employment if you had a high tariff in this country. We are dependent upon our Free Trade for our work. Ah, yes, but what do the manufacturers and landlords say — some of them, not all — what does this Tariff Reform conspiracy do? The landlord says to the Tariffites, " Here, I cannot allow you to put an extra ten per cent, on all the things I buy unless you give me ten per cent, on the things I sell." "All right," is the reply, "two shillings on corn, dairy produce, and meat." Up goes the landlords' rents, and they make merry together at the expense of the people of this country. We have found them out in time. What they wanted were "the good old days," that the rich might be made richer, that the fat rent rolls might become fatter. But the bare cupboard of the poor would become barer. It is the spirit of reaction, the spirit which takes you back sixty years to the days of the Corn Laws, a spirit that would take you still further back to the days when the Commons were still struggling for the right to grant supplies to secure redress; still further back to the days when the barons ruled the land. Our policy is the policy of forward progress. They say, Let us go back. Never ! The Budget found them out, found them out in time to stop the conspiracy. And now they are worrying about their land, and they are anxious about their privileges. They are unhappy about their general position. And I am glad to see anxieties for once flitting from the cottage to the castle. It is a good omen. I come from a part of the country where we have some very fine mountains, and I tell you how we who never could afford a weather-glass used to know what kind of weather was coming there. We used to 232 BETTER TIMES look at the hills, and if we saw the clouds hanging heavily in the valleys and on the lower ridges of the hills, we knew there was bad weather coming. But if we saw the clouds lifting and gathering round the summits we knew there was going to be fine weather in front of us. To-day the clouds are lifting from the valleys, from the lowly and humble homes of the people, and they are gathering round the tops. There is a fine day coming. THE PROBLEM OF UNEMPLOYMENT Queen's Hall, December 31, 1909. This great gathering has been summoned together to appeal to the greatest metropolis in the world, of the greatest Empire in the world, to take its place in the fore- front of the great struggle for the rights of the people. It is not the first time London has taken the lead in such a struggle as this. Some centuries ago London was in the forefront of the fight to establish the rights of the Commons of England to grant Supply to the Crown, and to deny Supply except on condition that grievances should be redressed. We are now engaged in establishing that right, not as against a monarchy, but as against an oligarchy, and we are calling upon those who support the action of the Lords to show cause why the constitutional rights of the people should not be established beyond cavil or question. What is the Tory answer? I have followed it very closely, and, as far as I can see, in London they attempt no answer at all, but they seek to divert attention by side issues. We are not afraid to meet them, and to-night I propose, subject to your patience, to deal exclusively with one of those side issues — a not unimportant one. It appears in every Tory paper, on every Tory platform. It is one which I am going to show we have not the slightest desire either to shirk or to avoid — I mean the question of 233 234 BETTER TIMES unemployment. Now what is the contention of our oppo- nents ? They submit two contentions. The first is that the Free Trade system of this country has had the effect of depriving a very considerable proportion of our working people of the opportunity of earning a living, and that that condition of things which has been growing from bad to worse ever since Free Trade was established, has been considerably aggravated by the Budget I introduced in April last. I propose to deal with both of those questions, and the first thing I should like to do is to put this question to you — Has it ever occurred to you, with those two contentions in your mind, why the House of Lords did not follow the advice of Lord Rosebery, not to reject the Budget, but to put it into operation for a year? Now I want you to follow that, as it is by no means a bad test of their sin- cerity. What did Lord Rosebery say? — and he is a per- fectly sincere opponent of the Budget. Very few people like to pay if they can avoid it, and there can be no question as to the sincerity of Lord Rosebery 's objection. He said to them : " Here, this is such a bad Bill that all you have to do is to pass it, and let it come into operation, and after a year's experience the people of this country will realise what a thoroughly pernicious thing it is, instead of enter- ing upon a very doubtful contest now." Those are his words, not mine. Personally, I have not the slightest doubt about it — "in a year's time your victory will be assured." Why did they not adopt that staid counsel? Just follow. They might have said, "We took the high patriotic line. We could not allow, even for the sake of party advantage, a bad Bill like this to come into opera- tion, to destroy confidence, and to destroy the trade and commerce of the country." If they had said so, their record proves that at any rate they do not always follow that line. They said the same thing about the Trade Dis- putes Bill and the Miners' Eight Hours Bill, and Lord Lansdowne, their leader, said about the Old Age Pensions THE PROBLEM OF UNEMPLOYMENT 235 Bill that it was a thoroughly mischievous measure. In spite of that they passed it, simply because it would not be to the interest of the House of Lords not to pass it. They are not above passing even a bad Bill if they think it is to the advantage of their party to do so. I will give you another consideration. The worst that could happen to this country if the Budget were passed would be that ten millions of money would be extracted out of the pockets of the rich for the purpose of paying for " Dreadnoughts " and Old Age Pensions. I think this country could stand that for twelve months at any rate with- out being utterly ruined. And my third reason for believing that that was not their motive was this. If trade had gone from bad to worse since the introduction of the Budget, then the Lords might have said : " We must put an end to it. We cannot stand this any longer in the interest of the country, and therefore we must throw it out, whatever the consequences may be." But that was not the case. From the moment the Budget was introduced trade im- proved. Our foreign trade went up month by month until the last month of all. The month in which the Budget was introduced our foreign trade went up by, I think, something like ten millions. Unemployment went down steadily from the month of April until it dropped something like 2 per cent. From April down to November the traffic on our railways improved. There is every indication that we are in for better times, and so far from the Budget having shaken confidence, destroyed credit, and injured the trade and industry of the country, things have improved, and I think we can say will improve for at least twelve months. Therefore I dismiss that as an explanation of their reason. What was it then? I will give you two. The first reason undoubtedly was this — that in the course of the next twelve months, before they would get any oppor- tunity of calling upon the country to express their opinion on the Budget, great progress would have been made with the land valuation. Now, I want you to consider what 236 BETTER TIMES that would have revealed. It would have revealed startling results. It would have shown, at any rate, the extent to which the great ground landlords of this country have escaped their fair share of the burden of taxation. Lands rated at a few scores of pounds per year, or at the outside a few hundreds, are rated as agricultural land, and get half their rates paid out of the taxes of the country. The official valuation would have proved that lands of that kind are worth scores and hundreds of thousands of pounds. What would that have meant ? The tradesmen of the country, the business people of the country, who are now being crushed by the heavy burden of local taxation, would have turned round and said, "Where is their share of all this?" The working men of the country, whose rents now are in many cases almost impossible of payment, owing partly to the price of the land on which their houses are built, and partly to the heavy rates, would, with the tradespeople, business people, and commercial elements of the country, insist on the great ground landlords pay- ing upon the real value of their land. By throwing out the Bill the Lords for the time being have avoided that catastrophe, and naturally they are anxious. We must talk about something else. What is the other reason? It is the one I am going to deal with at this meeting. The other reason is this. Trade is recovering rapidly — recovering from a blow which came from America. Unemployment is diminishing. Foreign trade is improving. Our shipping is improving. Our railways are improving. And there is another factor of very great importance going to tell next year. We have heard a good deal about capital being exported abroad. You have heard of capital exported abroad, but you have not seen capital exported abroad yet but that it comes back in orders for British goods. These orders are due in the course of the coming year. They will be flowing in, and before the next General Election would, in the ordinary course of things, have become due, trade THE PROBLEM OF UNEMPLOYMENT 237 would have been booming merely by the execution of these great orders. So the party managers said, "Don't you wait. Trade is not as bad as it was, but there is still room for improvement. Take it at its present condition. Un- employment is not as bad as it was. It is still rather bad. If you wait another year there will be no unemployment, no bad trade, and it is no use going to people working overtime and saying to them, ' Your job has been taken away by the foreigner. ' " Now you understand why they threw out the Budget instead of waiting another year. It is because they have no confidence in their own predic- tion. They don't believe our trade is going to be taken away either by the foreigner or by the Budget. Now the mere fact that they urged the Lords to throw the Bill out shows that they themselves do not believe that unemployment is going to be worse. On the contrary, they believe it is rapidly diminishing, and in the course of another year it will be idle to talk about it on a plat- form. You can frighten people about Halley's Comet. You can tell them what a frightful catastrophe will happen when we pass through its tail. But once we are through, all the dangers are over, and you will know really how thin it is. And it was just the same with the Protectionist bogey. There it is. It now fills the sky. But in a very short time we shall have passed through it, and we shall know that it is the thinnest of gas. They talked like this in 1885 exactly. I remember on every platform in England the same talk about unemployment, the same talk about the foreigner taking away the bread from the mouths of the children of the workmen. I re- member how they predicted that in a very few years, un- less we changed our fiscal systems, the factories and the mills and the mines and shipping of England would be ruined. Who answered them then? I remember the service Mr. Chamberlain rendered then — and we re- member it with pride — by showing it was purely a temporary condition of things, by showing that every 238 BETTER TIMES country in the world was suffering from the same depression, by showing that unemployment was worse in Protectionist countries, and by showing that if we simply kept our heads cool and stood by the flag of freedom things would come round. And so they did. Since then our trade has gone up with foreign countries by scores and hundreds of millions, and so far from having gone to the bad we are much better off. How- ever, the party managers said to the Lords: "Don't you wait. Don't you risk it. You will never get another chance like this." And they are not going to get another chance. Now let me give you four or five considerations on this question of unemployment. The argument of our oppo- nents is this — that the foreign products imported into this country take away the employment of our own men. Well, now, the first thing I should like to impress upon you is — and it is a fact which is thoroughly well known, but one has really got to emphasise these fundamental and elementary facts for the benefit of our opponents — that whenever imports are at their highest employment is at its best. So far from imports from abroad taking away the work of our employes, you look at the trade statistics for the last fifty years, and you will find that the more goods that come in from abroad in a given year the better is the state of employment. It means that trade is better. The second consideration is this — trade fluctuations are not confined to this island. These gentlemen talk as if there was no depression in trade in any Protectionist country — always full work, working overtime — one year's end to the other. Well, how tired they must be. It really is very odd that with all this excessive demand for labour abroad their wages are so much lower abroad than in this country. The fact of the matter is that every country is liable to have trade depression. You have ups and downs in trade in every land. Trade is not a lifeless THE PROBLEM OF UNEMPLOYMENT 239 sea. It has its spring and ebb in every land. This is no exception. As a matter of fact, this great trade depres- sion began in America, and it was very much worse there than it has ever been here. And whenever you get less trade, less business, you must have less employment, and that is not a truism which is applicable to this country alone. Well, now, the third fact I want to rub in, or, rather, I want you to rub in, is that when trade depression comes unemployment is worse in Protectionist countries than in ours. Now, they talk of America as if everybody had enough to do there at all times and seasons, year in and year out, and as if there was never unemployment. It is a high tariff country. If there is a Protectionist country in the world it is America. It has every advantage that nature can give it, every resource. There is not a metal or a mineral they have not got. It has an immense con- tinent of country. I do not know of any country in the world with so many natural advantages as America, and in addition to them it has got the artificial advantage of a high tariff — according to our Protectionist friends. What is the state of things there? I must trouble you with figures. After all, these things resolve themselves into figures. The trade depression began there in 1908. What was the unemployment in the State of New York, which compares with the metropolitan area here? In the State of New York, in the month of May, 1908, the state of unemployment was 30 per cent, of the workmen making returns there. Thirty per cent. ! In this country about the same time the state of unemployment was some- thing like 8 per cent. — I beg pardon, 7 per cent. To be absolutely accurate to a fraction — because I do not want to have to write letters to the newspapers — in the State of New York it was 30.6 per cent., and in the United Kingdom it was 7.4 per cent. Almost one out of every three in the State of New York out of work in the month of May, and in this country only 7 per cent. Even Sir 2 4 o BETTER TIMES Alexander Acland-Hood has given that up, and it must be a very bad case indeed before he surrenders. I will tell you why I have chosen the month of May. Had I chosen January and February and March — it was then 35 per cent, in America — then they would have said, " Yes, the weather there is so bad in those three months that they cannot work in the building trades." There is something to be said for that. But you must remember that there are two sides to that. It means that if, owing to natural conditions, you are not able to work at full tilt the first three months of the year you ought to be able to crowd more work into the other months of the year, and, so far from being 30 per cent, in May, they ought to have been working overtime in May to make up for lost time during the frost in January, February, and March. But, instead of that, in the merry month of May, in Protectionist America, with all the blessings of a tariff to keep foreigners away, 30 per cent, of workmen out of work ! And if you look at the trades they are very in- teresting. This (alluding to a return he held in his hand) is their official report. It is not a Free Trade book. There is what is called transportation. I suppose that in- cludes railways and trams, and carting. There you find in 1908 30 per cent, of the people out of work. There are railways here, and what percentage of the people are out of work on the railways in this country? Take, again, engineering, including shipping. There in May were 35 per cent, out of work, furniture and woodworking 37 per cent., printing 22 per cent. That is the state of things in that great country, and no doubt there was great suffering there. Well, here you are in this Pro- tectionist paradise, where you have got Custom House officers lining the shores like cherubim, with the flaming sword of a scorching tariff to keep out every foreign-made article from the Garden of Eden. Here, once you enter the garden, you find the serpents of hunger, want, unem- ployment hissing in every glade. What is the good of THE PROBLEM OF UNEMPLOYMENT 241 talking about Free Trade creating unemployment when you have official facts of this kind staring you in the face? There have been a good many charges of falsehood hurled at honourable men on our side. Before they repeat them they had better burn all their leaflets. The same thing applies to France. I find even in France, where they have not the same teeming population, that during the month of May 11.9 per cent of the work- men were out of work according to the official reports. In Berlin last year in winter, according to a house-to-house canvass made by the trade unions, they had 100,000 people out of work in Berlin alone. If you apply that proportion to Greater London it would mean about a quarter of a mil- lion out of work. Let the Tories prove whether there is anything approaching that in this great country. So much for their figures about unemployment. There is another thing to be said when you are out of work in this country. It is pretty hard anywhere. There is a great deal of suffering. But at any rate in this country you can buy food and clothes cheaper than in any other country in the world. But what does unemploy- ment mean in Berlin with a 12s. duty on bread? That is what you have to face in a Protectionist country. If unemployment comes here, it comes at any rate where food is cheapest. If it comes in Protectionist countries, it comes where food is dearest and most inaccessible to the working men. That is a point to be considered. Protection would aggravate unemployment in this country. Let me point that out to you, if it is necessary rather for the benefit of those outside than those in here. We are a country that depends more upon its international trade than any other country in the world. When Mr. Balfour in his speech yesterday — and I think Mr. Cham- berlain in his manifesto — when they appeal to foreign countries and say, "Why don't you look to foreign countries and see what they are doing?" my answer is this : Every tradesman must consult his own business. R 242 BETTER TIMES You would not go to another trader for advice as to how to conduct your own business, which is of a different character. Our business in this country is pre-eminently an inter- national business. In America, which is a vast continent, they can depend on their own resources entirely, and they do not depend on an outside trade. In Germany they depend to a certain extent on outside trade, but not to the same extent as we. But in this country if you destroy our outside trade, then this country is a heap of ruins. What is the good of quoting Germany here? We have got half the carrying trade of the world. Where does Germany come in? I agree Germany has got something like a third or a quarter of the whole of her fleet engaged, and engaged very largely, in carrying her own goods. But we carry for the whole world, and if we destroy our carrying trade we destroy our business. We cannot com- pare this country with Germany. We are the carriers of the world, the bankers of the world. We are the mer- chants of the world. We do more manufacturing for the world than any other country. What is the good of quoting other countries? I do not want anyone to depend— even my friends — upon what I say. You look at the Board of Trade statis- tics — official statistics — of the shipping of the world. When I spoke with my friend, Captain Norton, in his constituency,! challenged our opponents to give me an answer on four points, and one of them was — I said we sold more of our manufactured goods to the world than any other country, and almost as much as any two countries in the world put together. That is our trade. These people have not a proper pride in their own native country. I do not want to quote these second-rate shops in Germany or elsewhere, and ask Britain, the foremost trader of the world, to follow the example of people whom it has taught to do business. We were in business long before they ever started their shops. Very well, there- THE PROBLEM OF UNEMPLOYMENT 243 fore, I say — I want to impress this — we must do nothing to destroy our international trade, because we depend more upon it than any other thing - . Let me give an illustration. Take two shops. One shop does its business almost exclusively in its own area. Another shop also does a large trade in its own area, but it does a very large wholesale trade outside. It sends its goods by road and rail to all parts of the country. That second shop must depend very largely or entirely on two things — the superior quality of its goods and their greater cheapness. If you want cheap goods you must have cheap material, and anything that increases the cost of the material out of which things are made for that shop must diminish its trade, because it cannot compete with the others, and if you diminish its trade you diminish the employment there. You want fewer assistants and fewer workmen. And it is just the same with Great Britain if we do anything that imperils the lead we have now — I want to emphasise this, because these people talk upon platforms as if we had suddenly taken second or third place. We are maintaining our trade in the world in all the neutral markets from Pole to Pole. The only excep- tions are those where you have places just on the frontier of one or the other great competing countries. But you take all the great neutral markets of the world. We are more than first in all of them. Do not let us.do anything to impair that. If we do anything to impair our foreign trade we lose business, and how is that going to cure the problem of employment? There is another thing I want to put to you. They say: "But we can fall back on the home market." We have got a home market, but we want the markets of the world as well. The home market would be a poorer market if we had not the world as well. What is it that enriches the home market? It is the fact that we are doing the business of the world. When we carry half the trade of the world we do not carry it for nothing. R 2 244 BETTER TIMES We are fairly good business people, and, although we are very philanthropic, when we sell goods to the world we sell them at a profit. When we lend money to the world, we lend it for a good percentage. If you have any doubt about it, ask Lord Rothschild. I hope that is not another insult to Lord Rothschild. You dare not mention this great potentate on a Liberal platform except in the lan- guage of idolatry, which I am not in the habit of using. All this business we are transacting with the world means more profit for this country, more profit for the merchant, the banker, the insurance agent, the shipowner, the manu- facturer, the coalowner. That means that the people at home who make all these profits, who reap these harvests of foreign trade, have more money to give orders in the home markets. You know that the talk is that most of the goods that are consumed in this country come from abroad. You would be surprised if you looked at the manufactures which come from abroad and com- pared them with the manufactures made and sold in England to see what a small percentage it is. There- fore, the more money our people make, whether out of Britishers or foreigners, in honest business and trading, the better it is for the home market. Do not let us listen to this folly, this insanity which would destroy our inter- national trade in the supposed interest of the home market, which depends for its enrichment, its power to purchase, upon the greatness of the trade we are carrying throughout the whole world. If I may say so, I am very pleased to see Mr. Balfour has recovered from his temporary indisposition. It is only those who have seen his great fighting qualities in the House of Commons who can fully realise what a great loss it must be to his party to have him absent even for a short period from the front of the fight. Mr. Balfour quite fairly in his speech yesterday stated the case. He said that in his judgment no alteration in our trade relations could possibly remove unemployment, but THE PROBLEM OF UNEMPLOYMENT 245 it might mitigate it. Well, now, you may mitigate the evils of unemployment, I agree. I believe eventually you may be able to remove them, but not by this method. I will come to the method by and by. But is Mr. Bal- four quite sure what the effect of only an alteration in the tariff would be upon unemployment? Is he sure that it would reduce that unemployment from 6*5, where it is now, let us say to 3? Is he not afraid that it might have just the reverse effect and convert 3 into 30 per cent. ? That is what has happened in America. Is he prepared — for he, after all, is a responsible statesman — is he prepared, I would venture respectfully and humbly to ask, to pledge his honour, is he prepared to pledge his reputation for foresight as a statesman, is he prepared to be responsible to the millions who in this country de- pend for their daily bread on trade, commerce, and industry, that the tariff will not have the same effect here as in America, and deprive people not to the extent of 6 per cent., but to the extent of 20 to 30 per cent, of employment in the days of depression? It is too great a hazard. We have the biggest trade in the world — I chal- lenge anyone to contradict it — in shipping and manu- factures. We are not mere carters. We are not mere parcel deliverers. We make goods. We make the best goods. Manufactures, fabrics, textiles — we make the best, and we sell at a good price, too, everywhere. And, having got this lead, and maintaining this lead, not in percentages, but in actual figures, in millions, in quan- tities, is it not too great a hazard for us to throw it away upon a tariff? There may be an improvement, but no sane man would ever pledge his reputation as a certainty. My own judgment is, I cannot believe that a country like this, which has a great reputation for sanity and shrewdness, will ever take such a foolish risk as that in its trade. We shall see in a year, a year which will be a very 246 BETTER TIMES fateful one in the history of the democracy of this coun- try, but one which, I hope, will mark the dawn of a new era. I have told you why, in my opinion, it would be hazardous, it would be extremely risky, it would be foolish to gamble with our great international trade. In my judgment, the effect would be — and it is a judgment which is fortified by the experience which I had at the Board of Trade — in my judgment it would simply increase unemployment enormously in this country. But is that all that Liberalism has to say about unemployment, you will ask? No. If that were the only answer Liberalism had to make about un- employment, well, I tell you frankly, I should not be here as a Liberal Minister to-night. Unemployment entails great suffering on the part of people who do not deserve it. They are not responsible for the fluctuations of trade. They are purely its victims, and I think that it is the duty of any country within the limits of its resources to see that that suffering is mitigated, and, if possible, re- moved. We have set ourselves to that task. What have we done? My first answer is the Budget. Now what does the Budget do? It makes a larger provi- sion for mitigating the evils of unemployment than any measure ever introduced by any Government. Now let me show you. I added them up. First of all there is the pro- vision of labour exchanges and the insurance against un- employment. The two go together. In the Budget a million and a half per annum is set aside out of the new taxes for the purpose of setting up labour exchanges to assist in the finding of employment, and to provide adequate insurance to save the man who is out of work perforce and his wife and his family from starvation till he gets employment. Now that is a million and a half pro- vided in the Budget. What more? We have done some- thing towards providing useful, serviceable employment, THE PROBLEM OF UNEMPLOYMENT 247 not for the sake of making employment, but employment which will be of more use to the country. Now what is the first ? We have set aside ^600,000 towards the improve- ment of roads and the making of new ones, and the motorists of the country are gladly contributing to that sum of money, because it improves the road accommoda- tion for them, and makes them less a terror to the rest of the community. In addition to that we have undertaken to do something towards promoting schemes for the development of the resources of this country — the neglected resources of the country like afforestation. When our opponents talk of Germany they must not forget that there are scores and thousands of people engaged there in State forests. Then in agriculture, in the development of transport, light rail- ways for opening up the country, we are setting aside every year for the first five years half a million of money to create a fund upon which the Development Commis- sioners can draw whenever there are useful schemes for the purposes of developing the resources of the country. In addition to that we have set aside an annual sum of money for scientific experiments in agriculture, and to improve the conditions of agriculture, upon which labour so essentially depends, and generally for assisting the scheme of development which has been set out in the Development Bill. To people who talk about our having done nothing to meet the problem of unemployment I would point out that in this Budget there are three millions of money annually set apart out of the new taxes for the purpose of coping with the problem of unemployment. When did any Government ever do that before? The Tories talked about old age pension ; we gave them. The Tories talked about unemployment ; we dealt with it. Still, in my opinion, that is not sufficient. Our only hope of effecting a permanent improvement in the problem of 248 BETTER TIMES the unemployed is in a complete overhauling of our land system. And now we come to business. We make less out of our land than any country in Europe. Why? Because of our land system. It discourages expenditure in capital ; it does not give security to capital. The Tories are constantly talking about the importance of giving capital a sense of security in this country. Have they ever thought how important that is in agriculture? Is there adequate security now for the capital expended on the land? All those of you who have been brought up in an agricultural district, as I have, know perfectly well that no money which you spend upon land on any adequate scale will bring in its full fruition for five, ten, fifteen, or often twenty years. How can you expect any man with an annual tenancy, terminable on a year's notice, without reason assigned — how can you expect him to spend all his capital when he does not know, not merely whether he or his children will be there to reap it, but whether the rent may not be put up on his own improvement? Is he going to put his own money, is he going to run into debt, to borrow money for the purpose, and if he is, what security is there for the lender? Absolutely no legal security at all. There is the security of the poor farmer, who may be here to-day and gone to-morrow, but no legal security. The first essential condition in fully developing the re- sources of this country is to give absolute security to the man who spends money upon developing. We are spend- ing money on scientific education in agriculture. In the Development Bill, as I pointed out to you, I have set aside a good many hundred thousands more for the purpose. It is essential ; but what is the good of teaching scientific agriculture? It all means money. It means spending more money, and you will not get people to spend money until they have absolute security that they will get back every penny of that money, with all the profit that it makes. The farmer is not to blame. The labourer is not THE PROBLEM OF UNEMPLOYMENT 249 to blame. They are all working hard. They are facing great anxieties. They are doing their best within the limitations imposed upon them. What is to blame is our land system. Our idea as to land is fundamentally wrong, and I will tell you why. The idea which is fostered by a certain section of people is that the land of this country was created for the benefit, for the enjoyment, for the amuse- ment, for the amenity of a small class of superior persons. The land of this country was given for the rearing of a strong, healthy, happy race of men, women, and children upon it. How does that affect the problem of unemploy- ment? I will tell you. The difference between the man who spends money with a sense of security and the man who does not, from fear that he won't get the full fruit of it, is this : One man employs twice as many men as the other does. Why is there all this overcrowding in towns? Why is it that you get two men running after one job? It is because there is a flood of people who have been flowing steadily from the villages and the rural districts into the towns to find work that they ought to have found at home. I will give you one of my experiences in the last few days. I visited my old home, and went round the old village and over the old fields, and I wish to tell you what struck me. It was the number of old cottages I remembered which were in ruins, cottages which used to be full of bright children playing about, many of them my old schoolmates, people not rich, not prosper- ous, but living in healthy abundance. Nobody starved there ; they had plenty of good healthy food ; they reared strong healthy children there; and I remember them inhabited by men, women, and children of that type. What are those cottages now? Mere heaps of stones, with the brambles and nettles covering them. I made inquiries. I asked a man who I knew had been writing up a history of that little village* I said, " How 250 BETTER TIMES many are there of these ruined cottages in the whole parish? " — there are only about 200 or 300 cottages alto- gether — and he replied : " Curiously enough, I have been investigating this myself, and I find that within living memory seventy-two cottages have either disappeared or been allowed to fall into ruins." What has happened to the people? The people have gone, some perhaps to America, most of them to Liverpool, to London, to Birm- ingham. They and their descendants are helping to glut the labour market in the conflict for work. It would have been far better for them, far better for their children, if they were working on the old fields at home. But I tell you another fact which I discovered, and it is by no means an irrelevant one. I find that whilst the cottages had gone out the population had gone down. The cot- tagers had gone away, but game preservation in that parish had more than quadrupled. They said it was the poverty of the district that sent them away. It was the foreign competition that sent them away. I saw no Germans there. I do not think I saw any German goods there. Anyhow foreign competition drove them away ! It was the poverty of the district ! Yet it is the richest as it is without doubt the most beautiful land in the world. What, then, was the cause? You must remember this, and I am not putting it as a point of prejudice, but as a point which is of growing importance; there is four or five times the amount of game preservation which I remember in my young days there. Now a gamekeeper would rather not have too many cottages spread about the estate. Some of the cottagers occasionally go out at night. An occasional partridge or hare or pheasant may find v its way into the cotter's soup. So game preservers never encourage the development of these small holdings. But it is not simply that. Landlords say : "We cannot afford to build cottages ; it does not pay ; we only get 1 or 2 per cent, on them." That, I think, is a very short-sighted policy. The landlord gets more rent, and there is more THE PROBLEM OF UNEMPLOYMENT 251 labour, and especially cultured labour, on the property. Half the money spent in game preservation in that village during that period would not merely have built those seventy-two cottages better, more commodious, and more airy, but it would have built double the number. I say this, the land of England was not made for the partridges, but for the peasants of England. Every other country in the world is paying attention to this. They are encourag- ing these little cotters. They are doing their best for them, and we have to do the same thing. Otherwise the proportion of unemployment will grow, not from foreign tariffs, but from the home landlords. One other consideration of the land question which I want to put to you. The building trade, I am told, is very depressed. So it is in every part of the world. But there is one reason why it is more depressed here than it ought to be. You go to any village in the country and ask, " How is it you do not build here — there are very eligible sites? " Do they say it is because of the Germans? No. It is the home-grown product, and they will tell you who he is. They will say, " Look over at that mansion there. You cannot get land here. If you do get land it is always in the spot where you do not want it, and when you get it you never get enough of it, and when you get .that which is not enough you pay ten times as much for it as it is worth." That stops building. You see towns crammed and crushed in. They are not allowed to spread out at all. There is something unseen, an influ- ence sinister, which seems crushing them in with a bear's hug. We must clip the bear's claws. Occasionally in villages you get men who have saved a little money and would like to build. Why cannot they? Because it is with the greatest difficulty in the world that they get a plot of ground, and then it is so small that they cannot provide a decent-garden round the house. Consider, too, the price they pay ! You find that land is probably worth about £1 an acre. I think it is fair 252 BETTER TIMES that if you cut a piece out of a farm you should pay more than £1 an acre for it. You must pay for the disfigure- ment at ioo per cent. Double it — that is, £2 an acre. But what really happens? The little plot of ground in_the village where land is of rather ought to be cheap, is charged at twenty, thirty, forty, or even fifty times its value. That kills building. Take another case, of which I have had some experi- ence as a solicitor. Go to any town and say to a trades- man, "You seem to be doing very well here, but you have very little room. Why do you not open out?" "Open out," he says, "where am I going to open out? I cannot build in the clouds, and if I did I should be charged a ground-rent, because by the laws of England you can charge a ground-rent if you build right up to Mars. The landlord is the owner up to the heavens." The tradesman cannot get land for the purpose of extension, and he cannot alter any of the premises on his land without consent. If he wants to put in a new window, he must get the consent of the landlord. The landlord graciously gives his consent for a con- sideration. If the tradesman wants a few square yards at the back, the landlord knows perfectly well it is the only place he can build on. He cannot cart his business away on a costermonger's barrow and plant it in the next street. The landlord knows it, and takes advantage of it. What is the result? The tradesman leaves matters to the last moment. He does not build unless he is forced to, and when he does a good share of the money he would have put into the building goes towards paying the landlord, who does not utilise it for employment. Most men have a certain amount they can spend on building and no more. A man may have ^1,000 to spend on a house or a shop, but if he has to pay three, four, or five hundred pounds for the land, he has less for the building ; and if he has less for the building, less THE PROBLEM OF UNEMPLOYMENT 253 material is required, there is less employment for the workman, and everybody suffers for this greedy ground landlord. Our opponents are all talking about capital going abroad. Tens and scores of millions going every year ! Capital must go somewhere. Capital must have elbow- room, and if it does not get room here it must go where it can find room. If they do not allow British money to be spent on British land and British soil, the capitalist must get a return for his money, and so he invests it in the Argentine or somewhere else. You make British soil as profitable to the British capitalist as the soil of the Argentine, and British capital will not run away. Experience proves that the capitalist prefers the home in- vestment — that is something he sees with his own eyes. If you are in for a gamble, you prefer something you cannot see, because you depend upon faith. A man natur- ally prefers something he knows and sees, and the land is something he can see. There is no land under the sun that repays capital more than the land of England. It is the richest under the sun. That is why the Saxons took it away from us, and left us the hills. I would not ex- change. What would happen if you had a rational land system? The people would flock to the land exactly as they have been flocking to seek a job anywhere in the great commercial and industrial centres. The people pre- fer the land in every country. A man will take less for labouring on the soil, and he is right. He gets something from the land that no gold can ever pay him for. What are these Protectionist visions and dreams and the great things that would come through taxing food? I was passing, the other day, on my way to one of my boroughs, when I saw one of the most beautiful skies. The whole firmament of heaven was lined with a fine white wool, and if you looked towards the west there was a solid bank of gold of the richest hue, and you might have imagined that at the first shower the whole country would 254 BETTER TIMES have been covered with enough wool to clothe the in- habitants for the rest of their time and enough gold to keep us above want for the rest of our days. All that would have happened if it had fallen would have been that we should all have got a good drenching. It was nothing but vapour. That is the Protectionist heaven. Ah, yes, it is the Protectionist heaven paved with the food and raiment and riches golden in hue. But it is nothing but vapour which, if it once comes down on this land, will drench it with hunger. We have tried it before. What did it bring? It brought famine to hundreds of thousands of our people. It is bringing black bread to Germany. Why should we try it here? Let us rather get back to the free, unfettered, unshackled cultivation of the land of England. The land makes no promises to the tiller that it does not fulfil; it excites no hopes in the springtime that it does not realise at harvest. The land is the boun- tiful mother that gives to the children of men sustenance, security, and rest. THE BUDGET AND SOCIAL WELFARE Reading, January i, 1910. I read to-day in one of the obituary notices of the Old Year which appears in one of the Tory papers, that the Budget is dead. By this large, enthusiastic, and I may say electric meeting, it does not look like it. I have been travelling during the last few weeks in the north, south, east, and west, and I find there's the same determination on the part of the people to win. As for Reading, I am never in doubt. As the Chairman has reminded you — I forget how many years ago — I had the honour and privilege of being present at one of the meetings at Mr. Rufus Isaacs' first election to Reading, and I'm proud that I had that privilege in the humblest way in the return of one of the ablest, most brilliant, and distinguished men in the House of Commons. His constituency is a credit to him, and if you will allow me to say so, he is a credit to his con- stituency. Why is your member forced to come down at this season of the year to fight a contested election ? Why has the Government in its good work not been allowed to run its natural and usual course? Here we are in the midst of the Christmas season engaging in an election contest when we might have been enjoying ourselves in other ways. Why? The reason is that the rich land- 255 256 BETTER TIMES lords who are represented specially in one branch of the Legislature decline to bear their fair share of the burden of taxation of this country. They have a special branch of the Legislature to protect their rights and privileges. What was the expenditure towards which they were called upon to pay their fair share and nothing but their fair share? It was an expenditure that they themselves and their associates had taken a prominent part in forcing upon the country. They were quite willing to agitate even for Old Age Pensions when they wanted their party returned to power in 1906. And during last year they were clamouring for a bigger and a more expensive fleet. There was a great national crisis, we were told ; the security of bur shores was threatened ; the Germans might come over any day. There was a tremor and a fear, and there were some people, I have no doubt, who, whenever they heard any noise in the early morning, feared when they opened the window, that instead of hearing the rattle of the milkman's can, they would hear the rattle of the spurs of a German hussar. That was the agitation that was got up, and they said, "You must build, and you must build four, eight, eighteen." They were not particular about the number; they were as little particular about the number as they were about who should pay. And we said, "There is no cause for this alarm. We have actually got in men and material something like three to one in the German fleet." "What," they said, "have you only got three to one against the German fleet. Traitors ! Little Englanders ! Are you going to send three poor Britishers to face one big German? You might have known that a German could eat three British sailors as if they were Frankfort sausages." These are the patriots of England, these great imperial souls. Well, now, I wonder what would have happened if Sir Francis Drake when he heard THE BUDGET AND SOCIAL WELFARE 257 of the Armada had said, " Here, I have only got two big ships for one Spanish ship, and five small ones for every small Spanish ship. I really can't face them." What would have happened to Drake ? There was a good old Welsh lady named Elizabeth Tudor, with no fear of Germans or Spaniards in her soul. She would have sent for him and said, "Come over here, your head is more useful on Tower Hill than on a British man-of-war." Anyhow, they would have the ships. They had no doubt that three to one was not enough. We said we will have four mammoth Dreadnoughts. They said "We want eight, and won't wait." "Very well," we said, "we will give you eight." Then we sent in the bill. We saw that these people were suffering from an attack of nerves, so we gave them something to cure them. It is wonderful what a steadying effect it has had on their nerves. They ought to thank us. They ought to pay double. There is a certain person who is always getting things at every shop, and always the most expensive, but when the goods come home he won't pay. If the trades- man sends his bill in and presses him, he calls him by names, such as "Robber." I am not sure that he does not call him "Socialist." I was telling you about these gentlemen who ordered Dreadnoughts and won't pay for them. I remember just about the time that agitation was on I found painted on the pavement of Downing-street, " We want eight, and we won't wait." The paint worn off by the feet of people tramping along Downing-street has not been renewed re- cently, now that it is necessary to find means of paying the money. Meetings were organised all over the country. Those meetings were dropped, or rather con- verted into meetings to protest against payment. They won't pay; they flung the Bill out of the House of Lords and said, " If you want payment, you pawn the workman's loaf." We say "Never. We would rather get rid of you, my lords." They say "Your Budget is s 258 BETTER TIMES unfair ; it places burdens which are too heavy on the poor rich men of the country. Tax bread, tax meat." There has been a very interesting development re- cently. They are constantly quoting to us Colonial opinion, and they say, " Here are your kinsmen across the sea. Why don't you take them by the hand. They are asking you to put two shillings on wheat. Why don't you do it? " Our Colonial brethren have been watching this Budget fight with great interest, and they have been expressing their opinion very plainly and they are thoroughly ashamed of their lordly friends for the way in which they are declining to face their responsibility and pay up like men, and I think our Tariff Reform friends at this election are rather glad that their kinsmen are across the sea, and not here to take part in the election. After all the Budget raises money not merely for Dread- noughts but for social reform. I agree we must make our shores absolutely secure against the possibility of foreign invasion. We have been immune for so many centuries. It has been an undoubted advantage to us — that immunity. It has enabled us to pursue our own way, do our own work in peace. Peace is such a blessing ! Peace is such a treasure that it is undoubtedly worth spending money to make it absolutely secure, and you may depend upon it this Ministry will not shirk its duty in that respect. But we must also make not merely our shores secure. We must make our homes secure. What does the Budget do? What is the really great root trouble of our present social system? The great precariousness, not of life but of living. What is it that makes mere livelihood so precarious, so doubtful in so many cases. There are two very important elements. One is that a man may break down in health. That is one. Old age, of course, is also an answer to the same question. But men, in the prime of their days, may have an illness which incapacitates them from earning a living THE BUDGET AND SOCIAL WELFARE 259 for their families. What provision is there for a case of this kind ? We have made provision for old age. Thers is no national provision for a breakdown before you reach old age. What is the second element? Unemployment. Un- employment, as I pointed out in my speech in London last night, is by no means confined to this country. On the contrary, I quoted statistics to prove that unemployment is infinitely worse in the greatest Protectionist country in the world. There was great trade depression in the United States of America. What did it end in? Almost one out of three of the workmen, in the great metropolitan State of New York, out of work. Well, you have nothing of that kind here in Free Trade Britain. Very well, unemployment is purely a symptom, and almost an inevitable one to a pressing industrial, commercial system in every land, and it is, therefore, the business of statesmanship to grapple with it, to deal with it so that it heals, and if possible to extirpate it from our minds. It is not enough to say, "We are better off here, any way, than they are in America." It is not enough to say, "We are better off than they are in Germany." Great Britain has always taken the lead in these great matters ; let it keep the lead. Let me tell you what we propose doing in the Budget. Let me deal with this all-important problem for the people of this country. You have two classes of people in this country and in every civilised country in the world. Well, who are they? It is a rough distinction, but it comes to the same thing very much. What is the first class? You are at the beginning of a new year. The first class know they will go through the year, at any rate, without suffer- ing or privation. When sickness becomes their lot at any rate they know perfectly well they have immediate pro- vision to see themselves and family through the year with- out any hunger coming to the home. There's another s 2 2 6o BETTER TIMES class for whom the moment they are deprived of employ- ment either by bad trade or by sickness the security of bread disappears. Now that ought not to be in a civilised country. I know also there's the security of capital. You must have security for capital. Without security for capital you won't induce capital to risk itself upon enterprises. So I am all for giving- every security for capital. But I also want to have security for daily bread. And unless you have the latter you can't ensure the former. What happens now? In cases of unemployment and cases of sickness, when working men are not earning their daily and weekly wage, they may have their savings, but it is not every workman who can always save. It is not so easy. I should like to know how many of those gentlemen who have their thousands a year put by money at the end of the year, and it is not so easy for the work- man with a weekly wage always to make an adequate provision for a rainy day. Very well, then, what does he have to depend upon. There are many poor who would have had no food at all had it not been for the tradesmen who have had their business in their times of good. And often it happens at the end of the bad period the workman resumes his work in debt. W T hat have they done in Germany? Our opponents are always studying Germany, and, mind you, I'm not one of those who say Germany should not be studied, that German methods ought not to be looked into. On the contrary. But why adopt the worst method and ignore the best. The scientific training, the technical instruction of Germany, are ignored on Tory platforms. All they want is the black bread of Germany, the conscription of Germany, the low wages of Germany. In addition to these, there's another side of the great industrial life, the insur- ance of Germany against sickness and invalidity. Every German workman is insured under this great system, so THE BUDGET AND SOCIAL WELFARE 261 that when there is a breakdown something- comes out of the fund to keep his family. He is either looked after in his own home or there is a convalescent home, a sanatorium, or hospital ready to receive him. That system is contri- buted to largely by the workmen themselves. The State also contributes — not a very considerable amount, but it does contribute. And I met Socialist leaders and trade union leaders in Germany, I met a good many employers of labour, and they said it was one of the best systems ever introduced into the industrial life of Germany. It has given a sense of security to the workmen. The worry, the weari- ness, the fear of what will happen has vanished. Instead of the workman going on as he does to the last moment, when he ought to be recuperating his strength because he is ill, being afraid to give up because he does not know what will happen to his family — instead of that in Ger- many they have got the knowledge that this great gigantic State system is at their backs, and that if they really fall and faint in the struggle there is something to fall back' on at any rate, something to look after them, and some- thing to look after their wives and their children. That is the sort of thing in Germany we ought to copy, and not tariffs. I think we ought to introduce a system not exactly modelled on the German plan, but a system which would provide universally in the same way, based on contributions, but backed up by assistance from the State. We have provided for a State contribution which is twice as large as that of Germany, so that although the Germans have had the system for 20 years, Free Trade Britain in a single year is able to provide twice as much as Protectionist Germany after 20 years. One gentleman in the audience just now asked me a very pertinent question. "Where do the Friendly Societies come in? " There are Friendly Societies in Germany, but they are not so important, they are not so effective, they have not the same number of members as the Friendly 262 BETTER TIMES Societies have here. Therefore, they are not so important a factor in the national life as the benefit societies are in this country. Therefore the first condition I laid down when I took the matter in hand was this — that nothing we did should impair the efficiency of the Friendly and Benefit Socie- ties. On the contrary, that we should work through them. I will tell you what I did. I invited the heads of some of the largest Friendly Societies, the most repre- sentative, to meet and discuss the matter. We discussed it for weeks and months. We submitted our conclusions to some of the ablest actuaries in England, and we formu- lated a scheme which is friendly to the Friendly Societies, they helping us, we helping them, and between us helping working men out of the difficulties to which they are at the present moment subject when the hour of sickness and unemployment comes upon them. Let me tell you this. These details have been worked out. They are in the hands of the leaders of the Friendly Societies, and when the time comes — that is when we have got the money — they will be perfectly at liberty to make them public. They have got them now to work out. They have been submitted ■ — these schemes actually worked out — have been submitted to the greatest actuaries we could command as a Govern- ment. They have been submitted by the Friendly Socie- ties to their own actuaries, and we were making provisions in the Budget. We intended to start in the Budget with four millions of money from the Treasury for this great purpose. And the Lords have flung it out. Men who never knew the sting of poverty have cruelly, callously, flung out that great humane provision for the sake of the wounded soldier of industry. Call them to the reckoning in another fortnight. Then you may ask, what about unemployment. That scheme has been worked out, worked out in its details, let me assure you, my friends, not merely as a sort of vague promise as the Tories THE BUDGET AND SOCIAL WELFARE 263 promised pensions. Mr. Chamberlain said he had a plan, but it never appeared. We had not merely a vague pro- mise, not merely the outline of the scheme, and if the Lords had not thrown out the Budget it would have been an Act of Parliament in this year of grace. Unemployment ! The scheme is worked out by my friend Mr. Winston Churchill. He has worked it out in conjunction with the very able officials of the Board of Trade, calling in also the assistance of great trade-union leaders. They know it is not a vague scheme. They know it is a plan — a thought-out plan. They have seen it. Not merely politicians, but men who are working on these benefits at the present moment. And all we are doing is waiting upon the will of " my lords ! " These are our plans. Have you ever totalled up the amount of money raised by the Budget for social reform? Not talking of social reform on platforms. Not promising social reforms at elections and forgetting it afterwards. Not writing leading articles on social reforms. Not men- tioning it for the sake of winning a cheer. It is a national financial proposal finding money for social reforms. Add it up ! Nine millions for old age pensions. Between one and two millions to bring in the paupers. Three millions for unemployment. Three millions per annum towards relieving unemployment. Four millions for the sick, broken, soldier of industry. A provision of 18 millions ! Eighteen millions as a total ! What for? I will tell you what for. We want to drive hunger for ever from the hearths. We mean to banish the workhouse from their thoughts, from the horizon of every workman in the land before we are done. But we want your help, not merely to carry the Bill, but to sweep out of the way the people who obstruct it. What do they promise in return ? Two shillings on bread is their contribution towards the social reform box. It doesn't follow, even if it is promised, that it will be realised. 264 BETTER TIMES For instance, I believe you have a candidate here who at the last election said not only that he was in favour of Old Age Pensions, but that he thought the best way of paying for them was to tax ground values. That was his promise. He kept it as long as he was a Liberal, but the moment he turned Tory he broke it. Old Age Pen- sions the Tories promised. When? It was in 1895, an d although they were in for eleven years they never gave them. There is an old English proverb which says, " You can't grind corn with water that has passed the mill." The water flowed into their mill-wheels year after year, but our poor old mill was dry. A flood turned theirs. What did it grind? It ground for the landlords. Where is the corn it ground for the poor? I simply came here in order to say to you that when we are talking about social reforms we are not simply deluding the people in order to get their votes. We come before you with plans, with proposals, with schemes. Some of them were put into Acts of Parliament, passed through the House of Commons ; others are on the stocks waiting to be put on the car to get there next time. But the Lords are blocking the rails. Let us clear them off. We can't settle the unemployed problem without making a real great concerted national effort, and, above all, we must deal with the land problem, and if we do that, if we get a free hand unfettered by this sinister power that has wrecked every progressive scheme in the past, then we can do things. This is the first day of a new year ; not a new year, but the beginning of a new era. This year, for better or for worse, is going to leave an indelible mark on the history of this great land. What it brings forth for the people depends on the people themselves. Amongst the legends of my native land there is one that always strikes me as full of meaning and instruction. It is a legend of the cauldron which never boils soup except for brave men. The political cause of 19 10 is of that character. What will become of this conflict depends THE BUDGET AND SOCIAL WELFARE 265 entirely upon the courage, the firmness, the determination, which the people display. If they fail, then this year will be looked back upon with a shudder as a year in which the people sold their birthright — won for them by the blood and sufferings of their ancestors — to the selfish aristocracy ; as a year in which they pulled down the flag of freedom which has waved for 60 years over their market places and exchanges, and threw it at the feet of the plutocracy. That is how it will be remembered if we fail. But if we respond to the call at this great hour then 191 o will be looked back upon with pride as a great year when the people won complete self-government in their own land, when they established their right to govern in their own country, when they established security in their homes, and shattered the feudal chains and threw off the feudal burdens. In a word, this truly will be the year of grace — 1910. TARIFFS AND THE FOREIGNER Plymouth, Junuary, 8, 191 o. I almost despair with my weak voice of being able to make myself heard in this gig-antic gathering, and, there- fore, I must claim your indulgence during the time I shall occupy your attention. It is a great privilege to me to be able to address such a great assembly of the brave men of the West, under the chairmanship of my brilliant young friend, George Lambert, and in support of the candidature of the excellent members and candidates who stand before you this afternoon. Why have I come down here to support them? You live in a very beautiful county. I suppose it is one of the most beautiful counties in one of the most beautiful countries in the world. I was up on the Hoe this morn- ing, and seeing that exquisite view I could well under- stand why the great men of Devon in the past thought such a country was worth dying for. But with every desire to see such a beautiful county I came down for another purpose. I came down for the reason already indicated by your chairman, that an irresponsible assembly has scuttled a ship full of the most valuable cargo for the people. What was that cargo? Well, it is what is known, I think, in shipping circles, as a general cargo. First of all we were raising an enor- mous sum of money for the defence of the country. You 266 TARIFFS AND THE FOREIGNER 267 might imagine from the sort of talk that you have had, during the last few days more especially, that we had made no provision at all for increasing the security over our shores. This year we have added very nearly three millions to the cost of the Navy. There will be many more millions next year, and for that there is a provision in the Budget which was wrecked by the House of Lords. What else ? We were not merely contented with defend- ing our shores against the foreign invader. We had to see to a good many wrongs and evils at home — make it an even better country to defend. Your great Devonian hero, Sir Francis Drake, did not merely drive off the foreign invader. He left as a monument to his concern for the welfare of the people that great provision to supply the town of Plymouth with pure, clear water. He wanted to make them a healthy and happy race. He knew that was the way to produce men who could defend the country. That is what we have done. We have got a reservoir and we are bringing it home to the doors of the people in this country. Professor Mar- shall, the greatest political economist in Europe — not a wild Socialist, not even a wild Radical — one of the most thoughtful writers on political economy living to-day — described the Budget as the "Social Welfare Budget." Why? Because it raises eighteen millions of money for the purpose of improving the condition of the people. Never in the whole history of the world — I won't say in the history merely of this country — never in the history of the world has an annual Budget been introduced that contains such a rich provision for the people, for those who live in the cottages of the land as this Budget. They say, " Oh ! you talk about social reform; you promise things for the people." No! We were ready to perform them if we had only had a chance. How is that eighteen millions made up? They say, " You are only raising sixteen millions this year, including the Sinking Fund." I beg their pardon. That is one of 268 BETTER TIMES the beauties of this Budget that it has an expanding re- venue. They said, " Oh ! Free Trade is bankrupt. You can raise no more money." What do they say now? "You are raising too much." You cannot satisfy these people either way. Sixteen millions this year. Next year it expands to over twenty millions. Next year, the year after, it grows, and it is done without imposing any burdens upon the people of the land — none of the neces- saries of life touched at all; only the superfluities. Yet in this country we are raising over twenty millions of money per annum to defend its shores, and to see that the people who live in it may live above hunger, want, and misery. How do we divide it? We raise very nearly nine millions for old age pensions. Then there is a provision for including the pauper. Ah, I am sorry for him. Many an old man, who did his very best to keep out- side the workhouse gates, worked hard until he broke down hopelessly, and there he is looking from inside, hoping to see somebody unlocking the doors to let him out. The moment you clear the Lords out of the way we will open the door. I hear that some of the Tories say in Devonshire, "We voted for including the paupers." Ah, yes, the moment we brought in our Bill they voted for including everything. You see a ferryboat crossing. You consider how much cargo you can take on board safely. There is a man on the banks who does not want you to cross. He says, "Why don't you take this chap on? Why don't you take this other man on? And here's a third chap; why don't you take him? " He doesn't want to see them cross. He simply wants to swamp the boat. He doesn't want to see one of them safe : he wants them all to get drowned, including the ferryman. And that's what they did when Mr. Asquith put me in charge of that little ferryboat. They meant to pitch everybody in just to sink it. Well, I'll tell you what we did. I said, "We will TARIFFS AND THE FOREIGNER 269 take this cargo first. And I'm coming back for the rest." And I did. Which is more than they have ever done. "Now," I said, "I am ready to take the pauper on; I am ready to take the unemployed on. Put 'em all on board." What do they say now? "Oh! we're not going to pay. We won't pay their passage." I say in your name, "You have got to, my lords." The Budget provides three millions for unemploy- ment. What have they done for unemployment, except use it for the purpose of catching your votes — use it for the purpose of persuading the people to tax their own bread? That is all they have done for unemploy- ment. We have put three millions into the Budget for improving the condition of the unemployed. Yes, and for reducing unemployment. Still more have we put into the Budget. We have started smashing the feudal chains they have put on the land, so as to open all its resources for the people that live in this land. And then we have provided over four mil- lions for sickness and infirmity. So that, at any rate, the workman in the land when he is low on a sick bed will not have the additional anxiety of dreading that his children are suffering from want of bread. All that is in the Budget — a valuable cargo. These people have wrecked it, and I say : "Let us clear the scuttlers out of the way." But they say to themselves, Why don't you tax the foreigner for it? Well, now, if I could have taxed the foreigner and raised this eighteen millions, do you think I would not have done it? Do you think I would have pulled all this hornet's nest about my ears, brewers and distillers and landlords and agents, buzzing around and trying to sting too? Whenever I hit them out of the way they say, "How vulgar! " "Just fancy," they say, "hitting such beautiful insects!" I think I showed at the Board of Trade that I was not afraid of putting my- self right as between foreigner and Britisher. If I 270 BETTER TIMES thought a foreigner was getting any advantage in ship- ping or in patents I can tell you my concern was not the foreigner. I am quite willing to slay the Egyptian if he is interfering with my own people. But you can't do it except by Free Trade. The Germans were 25 millions short. They had run into debt, not for social reform. They had run into debt, and the German Chancellor had to raise 25 millions. Why didn't he tax the foreigner? He at any rate was not tram- melled with this obsolete Cobdenism. Reverence for Free Trade did not keep him back. He was sound on Tariff Reform. Why on earth did not he tax the foreigner for his 25 millions? He knew perfectly well it was all rubbish to talk about taxing the foreigner. Why are prices so much higher in Germany if it is the foreigner who pays? Bread dearer, raiment dearer, housing dearer — everything dearer. Why? It is because the German knows he pays and not the foreigner. They put twelve shillings on wheat in Germany. Who pays? Not the foreigner. Do you think that Germans would eat black bread and horse- flesh if they could get white bread and good old ox beef ? I tell you my suggestion. Let's try it on the peers. You know, we will give them three months of black bread diet and the best and most juicy horseflesh rump steaks. I tell you, before they had got through three days they would say, "Let's pass the Budget !" I'll give you another test. Are you worried at all in the country districts with tramps? Well, I'll tell you how to get rid of them. Buy a few loaves of the best German black bread, and whenever a tramp comes round, cut him a chunk. He'll never come near you again. And this food, which would be scorned by British tramps, this is the food which is recommended by our Protectionists to the work- ing men of Britain as a wholesome alternative to white bread. Never mind, we will stand by Free Trade, and the best that God gives to the children of men for their sustenance. TARIFFS AND THE FOREIGNER 271 Let me say another word about taxing the foreigner. I have been considering it carefully. When I was look- ing out for 20 millions of money, depend upon it I searched high and low, here and abroad, and if I could have got it out of German pockets — well, I can tell you, I would have taken it, so long as I could get it honestly. Let me put this to you. Has it ever occurred to you that there is only one way of taxing the foreigner, and that is the way we are pursuing? Do you know the foreigner now pays our rates and taxes? You follow this. I have no doubt those canvassers they let loose during the election convey the impression that our trade and commerce are disappearing. I have brought you two very useful books. They are not issued by the Cobden Club, and I need hardly tell you they don't come from the Tariff Reform League. They are just the official returns of the trade of this country, and here is the latest of all. And it is a very marvellous story. Do you know what we sold last year, mostly to the foreigner, of British produce? We sold last year of British produce 426 millions' worth, and our total exports were 517 millions. The German does not come within 200 millions of that. Those are not imports. Those are what we sell. Well, you know, we do not sell without making a profit. That is not the British way of doing business. So we make a profit on that odd 200 millions that the German never sees. Now follow that. I want to show you where I get my taxes from. It is a very mysterious operation, but I get them, which is more than the German Chancellor of the Exchequer does. Now, look at this. We are selling in Lancashire 93 millions' worth of cotton for abroad. I should say about 60 millions of that goes to the foreigner. Lots of it goes to India, Canada, Australia; but the vast bulk of it goes to the foreigner. Most of the stuff turned out of the mills of Lancashire is bought by the foreigner. Well, there's the profit of the manufacturer, paid by the foreigner. There's 272 BETTER TIMES the wages. Of 60 millions of stuff there is 30 millions of wages. Who pays that? The foreigner. Where do I come in? I go to the manufacturer and I say to him, "You've made a profit, haven't you?" "Ah, well," he says, "just a small one." It's wonder- ful how their profits go down the moment the income-tax collector comes near them. He's a most depressing individual. However, they do admit that they have made a small profit. Then I say to him, " Shilling, please." Then I say more to him, "I think you have made over ^3,000 this year." And he replies, "Yes, I'm afraid I have." "Twopence extra, please!" Then I say to him, "I've been looking at your accounts carefully, and I see you made over ^5,000." "Well," he says, "I am afraid I cannot deny it." "Another sixpence, please." Who pays it ? All that profit, of which I only get a share, is paid by the foreigner. I am the greatest taxer of the foreigners in the world. But that is not all. There is the spinner. He gets his wages paid by the foreigner. There is the man who has made the mill. Because you must remember that if it had not been that the foreigner bought all this stuff from us half the mills in Lancashire would never have been built. There are the mason, the bricklayer, the carpenter, the plasterer, the painter, the builder, the whole lot of them — the man who does the iron girders — and I think the lawyer comes in somewhere. All the useful members of society. They have their share. They say, "We have got wages, all to be paid by the foreigner." Some of them smoke, some of them drink tea, some of them drink coffee, some of them take sugar. Some of them even drink beer and a few take to whisky. Very well. They all pay into the Treasury. Who pays it? The foreigner, of course. He pays wages, wages pay the Exchequer, so I get it in income-tax, I get it in taxes on commodities, and had it not been for this malignant foreigner I would not have had a penny of all that money. TARIFFS AND THE FOREIGNER 273 Well now, take shipping. You know we carry halt 1 lu- trade of the world. This little bit of an island, this little chunk, the smallest of all the great countries of the world, carries more of the goods of the world than all the other great countries of the whole world put together. And we, as patriots, have no pride in that ! Well, we have. Now, here's another book. It is a very interesting document. It shows among other things the extent of Germany's shipping. Yes, Germany has actually got ships ! Are not you frightened ? I am surprised to see — but I forgot ! This is the land of Sir Francis Drake. You are not wont to be chicken-hearted in Devon. The county that drove away the Armada is not the county to frighten people with talk of Germany.* In Germany they have got 2,600,000 tons of shipping, a very fine shipping, creditable to Germany — very creditable. Of course, we have nothing like that. The Germans have beaten us, at any rate, hollow. We have got in this miserable little Free Trade country, ruined because we don't tax bread, over 11,000,000 tons of shipping. That is over four times as much as Germany. What do we do with it? Oh ! it just lies up in our ports, rotting, no business. Isn't there? We do most of the business of the world. We carry more international trade — probably ten times more — than Germany. Germany carries her own trade very largely. The international trade is ours. Well, we do not do it for nothing. As a matter of fact, our shipping brings us over a hundred millions a year, mostly paid by that wretched foreigner. Well, there's profit in that. There's income- tax in that. There's some whisky probably in that, and perhaps a little beer. All comes into the Treasury ; all paid by the foreigner. I'm taxing the foreigner for all I know. You've heard a good deal of talk here, probably, about the exportation of capital abroad. There is no way in which we make the foreigner pay more. We get T 274 BETTER TIMES the foreigner in four ways by that. The first way we leave to Lord Rothschild, who, knowing this is a Free Trade country with a good deal of money to spare, gathers his money together and loans it to foreigners. And very properly. In a speech in the House of Lords not so long ago, he quoted his father as saying that there was nothing more fruitful for the trade of a country than the fact that it was able to advance money to foreign lands. However, what is the first way in which we get the foreigner? We get a good commission, and when I say " We " I mean a few of us — a good commission on the advance. What is the second way we get the foreigner in advancing capital abroad? This money does not go in cash. If we advance a hundred millions to the foreigner, we don't pack up a hundred million sovereigns into a ship. It generally goes in goods, in some commodities. It is exchange. The foreigner orders goods here. We send them along, and that is the payment of the money. What is the third way we get it? Well, we get some- thing for carrying these goods, and we carry them. What is the fourth way we get him? After he has bor- rowed money, and we have deducted commission, we have deducted the price of the goods, we have deducted the freight for carrying the goods, we charge him an interest on the thing we have got ourselves. So it goes on. By this process we have laid the world under tribute. There has never been a country which has levied such tribute upon the world since the days of ancient Rome, except that we have conquered the world, not by force of arms, but by commerce. Where does the Exchequer come in? It comes in at every point. It comes in on the commission. Most of the recipients pay supertax on it. It comes in on the profit on the goods which are bought, the wages which are paid to make the goods; it comes in on the freight, it comes in on the interest, and between them all I am TARIFFS AND THE FOREIGNER 275 reaping a rich harvest, as Chancellor of the Exchequer, from the foreigner. "Well, but can't the Germans do this sort of thing? " They are trying to, and they don't come within 200 millions of us. What happens to them ? You must remem- ber that in Protectionist countries the price of material is bound to go up. Well, if the price of material goes up you cannot take the finished article into the market and compete on equal terms with people whose material is cheaper. Common-sense will teach anybody that. If you pay 10 per cent, more for the material which you convert into a manufactured article in your shop, well, when you take it into the market, how can you compete with a fellow who does not pay that extra 10 per cent? What do the Germans do in order to meet that? They cut down wages. They pay less wages to their work- men in order to make up the difference between the cost of the material there and the cost of the material here. Would you like to try that here? Higher price of material, less wages, longer hours of labour. So that there is less profit for them, less wages, and, the third and most important factor, their wages don't go so far, because everything costs more, and there's less to spare, even for a Chancellor of the Ex- chequer in Germany. And I am looking at it now purely from the point of view of a man who is looking out for taxes. It has been asked — why don't the foreigners give it up and try our system? There are two answers to that. Each country after all knows its own business, exactly as each trader knows his own business. But that's not all. Protection is a quicksand. Once you get your feet into it, the more you struggle the deeper you sink. You have reacl that great description in Victor Hugo of a man caught in a quicksand on the coast. He doesn't discover it at once. He only feels an additional difficulty T 2 ^76 BETTER TIMES in getting on step by step. At last he begins to sink. He struggles. The more he struggles the deeper he sinks. And he sinks and sinks, and he sinks until he has completely vanished. It is no use. They struggle. The people are struggling in every Pro- tectionist country to get out of the quicksand. They can't. They are doing their best. My warning to the people of this country is : " Never put your foot into it once." That is the worst of all these artificial stimulants. It is no use going to the drunkard and saying: "Why don't you give it up? " Do you think he doesn't know just as well as you that it is harming him, that it is bringing poverty to his home, ruining his health, and making him a weaker man and a poorer man? He can't — he can't ! And I tell you Protection is just one of those artificial stimulants that once a country begins to take nips and to get it into her system she cannot throw it off. Don't you begin. That's my advice to you. That's the real reason. You get millions in Ger- many who are trying to throw it off. You create in- terests who thrive on it. Who is stopping Germany and preventing her throwing off the shackles of Protec- tion? The great landlords of Germany. It is every- thing to them. It means high rents for them. That is why British landlords want !to tax the bread of the people. They know if you tax wheat and corn it may mean better rents for them. It may mean getting rid of some of their burdens, and they want to put them on the people, and that is why they hate the Budget. But I appeal to you in the West, in this great struggle, I appeal to you to stand by the flag of freedom ---freedom in your markets, freedom in your institutions, freedom in education, freedom in land. My friend the chairman here said they were very abusive in their references to such a humble individual as myself. Well, I have one thing in common with TARIFFS AND THE FOREIGNER 277 the men of the West. You have a large admixture of the Celt in your population. And they hate the Celt. I can't get a speech from any noble lord but that he attacks the poor Celt. That is the crown of all my iniquities : I have got Celtic blood in my veins. Well, there is much more Celtic blood in the Englishman everywhere than they are prepared to admit, and if you drained every drop of Celtic blood from his veins he would be pretty anaemic. And that is what they want. He would not be strong enough to resist the Lords. Why, they treat me as if X were a foreigner. My race was here three thousand years ago. But I'll tell you why they hate the Celt. He has an irrepressible love for freedom. He may be trampled upon, and he has been ; he may be down-trodden, and he has been ; he may be oppressed — and God knows he has ; but you never can quench his passion for freedom. Tread him in the mire, and his children and his children's children will arise with the watchwords of liberty on their lips. And I come here to you, as men who have Celtic blood in your veins — mixed with good Saxon — I come to you, as the descendant of a race that fought the legions of Caesar, to appeal to you to stand against a more insidious, a more dangerous attack upon the free- dom, the liberties, and the privileges of the people of these islands. THE PEERS' CAMPAIGN Falmouth, January 10, 1910. I thank this magnificent meeting of the men and women of Cornwall for their very kind reception of me this even- ing. I have come here to support the candidature of my friend Sir John Barker, who has been good enough to tell you that in his judgment the Budget places the burdens upon the right shoulders. Well, now, there is one of the shoulders (pointing to Sir John Barker) : broad, sturdy, and well able to bear them. I will tell you the difference between him and others who are equally able to bear them : he bears them not merely readily, but cheerfully, whilst some others growl. Throughout the whole of the discussions in the House of Commons, and they were very protracted, sometimes into the small hours of the morning, there I found one sturdy figure behind me throughout the whole of the proceedings back- ing me up, cheering me on, and yet I bled him at every pore. I am pleased to be able to tell you he is not the only rich man in the House of Commons who took up that position. There were several others there, and with alacrity they supported the Budget ; they acclaimed it as a just measure, although it added very considerably to their annual burdens, because they recognised they were better able to bear them than the poor were to part with their bread. We are supposed to be engaged in a great conspiracy 278 THE PEERS' CAMPAIGN 279 against property, so I am assured. Well, can you tell me why men like Sir John Barker should go into a con- spiracy against property — and there are many men of the same type? It is because they know that property is more assured than ever, when you make a people con- tented with their lot, that they support measures like Old Age Pensions, measures like the Budget, and other measures which, I believe, will grow out of it, bearing fruit a hundred-fold to the people of this country. They support these things because they know the surest security of property is to be found in the goodwill and content- ment of the people of this land. The chairman has been good enough to assure you that we are winning. We are winning all over the country. If I wanted additional proof of it I should find it in the increasing virulence of our opponents. They have given up argument altogether, and have taken to mud. I hear that they are circulating here what I call the Savile lie. What is that? Somebody of the name of Lord Savile, a gentleman of whom nobody would ever have heard if he had not been a peer, said the other day in a speech which was given wide circulation that I had cheered in the House of Commons a British defeat during the Boer war. I am told that the canvassers of Sir John's opponent are going from door to door repeating this statement. I wrote to Lord Savile to ask him upon what authority he made the statement. I said the Tory Press was represented in the House of Commons. Could he quote a single Tory newspaper that reported the incident? There were hundreds of Tory members in the House. Could he name one who had seen it? He wrote back, withdrawing the statement and apologising. Now, I would not have said a word about it if he had left it there, but since then he has written a letter to the papers saying, although I did not cheer a British defeat, I did something just as bad, if not worse. What was that? You will be surprised to hear it. He said the 2 8o BETTER TIMES Tories got up a mob in Birmingham to kill me, and I would not allow them to. Well, I am very sorry I behaved so badly, but, judging from the way they are circulating that statement, you might have imagined that one of the most glorious incidents in that war was the getting up of a mob of fifty thousand persons to kill a man who had had the effrontery to disagree with them, a mob who failed, by the way, to accomplish their pur- pose. And you might have imagined that the most dis- creditable incident in the war was the fact that I out- witted the fifty thousand ! Perfectly true, perfectly true ! There was a mob of fifty thousand Birmingham Tories surrounding the building with intent to kill me, but I got through them without the slightest difficulty. That shows how much brains fifty thousand Tories have got. They are not equal to one Welshman. And they went on howling for two hours at bare walls like Red Indians, and when they discovered I had got away they said, "You ought to be ashamed of yourself." And they have been saying it ever since. I am glad these Peers were let loose. They have been addressing meetings all over Great Britain, and if they had not no one would have known what the Peers were like. You associated with the House of Peers stateliness, dignity, reserve, majesty almost, until the Peers begin to talk. What has happened since? '*They have used language that no member of the House of Commons, of any party, would demean himself by using. ("What can you expect? ") Well, I know. I ex- pected nothing better. But, then, I had heard them before. But now, you know, they have gone about the country, and the rest of the people of the country have heard them. Take some of the speeches made — language, I don't mind saying, reeking of the stable. The Duke of Rutland, the Duke of Beaufort— Lord Mal- mesbury, I think, his name is — and two or three others, THE PEERS' CAMPAIGN 281 not to mention Lord Savile and Lord Milner I They ought to be gentlemen before they become noblemen. There is something to be said about Lord Savile and Lord Milner. After all, their wine of nobility is rather immature. It had not been bottled long. But when you come to the Duke of Rutland and the Duke of Beaufort, that has been in the cellar, I believe, for centuries, until it has evidently turned musty. Well, I am glad that they have talked. The only argument I know for keep- ing the House of Lords alive is that up to the present, at any rate, it has kept the Lords from the platform who really lower our controversial methods in this country, and I am glad the people of this country are beginning to know exactly what they are like in that they are not the sort of demi-gods which their admirers and worship- pers claim that they are. Last week we had an ex-Minister of the Crown here — Mr. Lyttelton. He delivered a speech. I do not think it was in this very fine marquee. I thought I would give myself the pleasure of reading his speech. I thought it might form a good text for a speech by myself to-night, but I was very disappointed, because I have never seen thinner soup served to any audience. There was nothing to give it either body or flavour except one or two chest- nuts. But there are one or two statements he made I feel it incumbent upon me to take some notice of. The first was, he made a very bold statement that there was nothing in the Budget for the Navy. Well, now, I can hardly believe that Mr. Lyttelton said anything of the kind. If he did, it is not true, and I think he must have forgotten. Mr. Alfred Lyttelton is quite incapable of making a deliberate misstatement, and I think he must have forgotten, because in introducing the Budget, I dis- tinctly stated that I made a provision for a gigantic increase in the Navy Estimates. If it were necessary, I could quote the words, which I have here with me, from 282 BETTER TIMES the official report. Yes, I think it is worth while, because so much has been said about the Navy that I think I ought to call attention to what I said in introducing the Budget when I explained to the House of Commons why I wanted the money and what for. These are the words I used : — " It is quite impossible to say in advance what the Naval Estimates will be next year." I had already explained they were up 2\ millions this year; then I said : — "They will be up still further next year for construc- tion," because there are Other items in those Estimates, "but on construction alone the increase will be some- thing gigantic." Now, those are the words I used, and I hope nothing further will be said about no provision being made by the Government for the Navy. On the contrary, the Budget that I introduced involved millions of money per annum for the purpose of improving and strengthening the Navy of this country. Then Mr. Lyttelton went on to discuss Tariff Reform. I must say he was very mild in his statements. He did not make the wild promises which I have seen reported in so many speeches, about its "producing work for all," about its "getting rid of unemployment," about its "in- creasingly enormously the prosperity of this country." He was exceedingly moderate and temperate. But still, he did make statements which had not a single basis in the facts of our trade. He did rather invite you to believe that Tariff Reform would undoubtedly conduce to improve- ment in our trade. If that is the case, if Free Trade is doing so much harm to us in this country, if Protection is so much better, there are four facts I should like explained. What are they ? Can they explain this ? Why is it that per head of the population we export twice as much of our products as Germany does of hers. We export four times as much as the United States of America does of her THE PEERS' CAMPAIGN 283 products. Here you have two Protectionist countries. They are our rivals in trade, our rivals in business. We have got Free Trade, and yet we export twice as much of our products as Germany, four times as much as the United States. Well, there is the first fact. The second fact I should ask them to explain is this : If Protection is better than Free Trade, how is it our shipping — and, after all, you depend largely upon shipping down here — how is it our shipping, the shipping of Great Britain, is four times as great as that of Germany, and eight times as great as that of the United States of America. I beg pardon — eight times as great as France, twelve times as great as the United States of America. Now, will they kindly explain those two facts for me, and when they have done that I have a third I should like them to explain. How is it, if Protection is better than Free Trade, that the wages of this country are higher than those of any other country in Europe? When they have explained those three facts, I will give them a fourth. Whilst wages are higher in this country than in any country in Europe, how is it that food and clothing are cheaper? And then, when they have answered those four, I have got a fifth for them. If Protection is so much better than Free Trade, if Free Trade is ruining our industries, can they explain this to me : Why is Great Britain the richest country m the world? Let us have those five facts rubbed well in. The first is we sell twice as much per head of our pro- ducts as Germany does, and four times as much as the Americans with all their Protection. Our shipping is four times that of Germany, eight times that of France, twelve times that of the United States of America. The third fact is that our wages are higher than those of any country in Europe, and the necessaries of life cheaper. Fifth fact — this is the richest country in the world. When they have 284 BETTER TIMES explained these five facts to you satisfactorily, then you can begin to argue Protection and Free Trade with them. "But," said Mr. Lyttelton, "let us trade with the Colonies." By all means trade with our Colonies. Cer- tainly, but why trade with our Colonies alone? We want to trade with everybody ! A tradesman who opens a shop here does not put up a notice board outside to say, " I am going to trade with my relations." Here is one of the ablest business men in Great Britain (pointing to the Chairman), which means, of course, that he is one of the ablest business men in the world. Supposing he put a notice outside and said, "Goods are cheaper here for my relations. We charge 10 per cent, more to anybody else." I tell you what would happen to that great busi- ness establishment. You find now "John Barker, Limi- ted." If you went up in about six months' time you would find the shutters up ! That is not the way to do business. You cannot recognise those things in trade. If our relatives want help, if our kinsmen want any assistance, very well — to the last penny in the Empire — to the last drop of blood. We are bound to help them, and I am certain they would help us. But business is business, whether you are dealing with relations or with outsiders. And mind you, it's very much better that it should be so. If you begin to introduce this sort of blood considerations into business, that blood will end in bad blood before you have done with it. It is not the way to keep on good terms with your relations, not by any means. Why do they buy from us now? If a Colonial wants to buy goods he does not say, "Let's go to the old mother shop." In Canada you have a great manufac- turing country on its borders. Everything that Canadians can get cheaper in the States they buy in the States. They don't pay more because it comes from Great Britain. And I will tell you another thing. They would be fools if they did. We don't pay more for Canadian wheat because it comes from Canada. If it is better wheat, if it is a better crop, if they have had a good harvest there, then we pay THE PEERS' CAMPAIGN 285 more for it. But we pay more on merits and not on rela- tionship. And the Canadians do exactly the same with us. They buy goods from us for two reasons, and they are the best reasons in the world for doing business. What are they? The first is they get their goods cheaper, and they get their goods better. But so do foreigners buy from us. Let me give you the figures. Our Colonies buy from us 125 millions' worth every year. That is a very good business. I wish I had it. But what do the foreigners buy from us? They buy from us 251 millions' worth. Well, now, supposing we got all the trade of the Colonies, every penny of the trade of the Colonies, of goods which they could buy from us, how much more would our trade be? Thirty millions. Well, now, this is the question : Are we going to risk the 250 millions we get from the foreigners on the off-chance that we may get an additional 30 millions from our Colonies? That would be folly. It is not worthy of a business nation. And no one is quite sure they would get the 30 millions. You must depend upon it, those nations, whether they are Colonial or foreign, buy from us now purely because we are the cheapest market in the world. Go to China or the Argentine. They are magnificent customers of ours. Germany is a great customer of ours. Mr. Lyttelton admitted it here at Falmouth that Germany was our second best customer in the world. Why do the Germans buy? Because we can sell cheaper than anybody else. Why do the Chinamen buy from us and not from Ger- many, and not from Russia, and not from Japan? Purely because we can sell to them cheaper. Why does the Argentine Republic buy from us? For exactlv the same reason. If you consent to Protection here, what will happen? The cost of material will go up, and the cost of our goods must go up, and we shall lose the trade of the world, which we have at the present moment. What would we get in return? Dear food, that 286 BETTER TIMES is all. I do not believe you would cement the friend- ship between us and the Colonies. It would be a risky experiment. You might be able now, though I doubt it, to patch up a tariff with them. In a year or two they might make discoveries in, say, iron or in coal, and it would not be to their interest to let our goods come in. Do you think they could resist a demand from their people at home to put a tariff against us? Of course they could not. It would be the beginning of misunderstandings. It might be the beginning of quar- rellings, or hostility between us. We are friends now. We are their best customers. We are friends, and they would stand by us in the hour of need, as we would stand by them. Do not let us run the risk of entering into a partnership based upon shackling their power to deal with their own finance, and based here on making dear the food of the children of the people. It would be a mistake, a blunder, and might very well become a catastrophe. It may be said that food will not become dearer. How can you put a two-shilling duty on corn without its becoming dearer? How can you guarantee that once you put two shillings on, it will stop there? It did not stop in France. It did not stop in Germany. It began exactly in the same way there. It began with a shilling, came on to two shillings. It is now over eleven shillings in Germany. It is twelve shillings in France. Who is there here now that can give his word for Protectionist statesmen of the future that they will not double it and treble it and quadruple it and send it up to twelve shillings? Bismarck began with one shilling and two shillings, but it soon ran up. Here, Protection is like putting your arm into a cog-wheel. Once you are in it draws you in further and further, until it crushes bone and sinew. That is why there is depression in Germany. It would be folly for this country to give up its free ports. We are not compelled to buy foreign goods. Free THE PEERS' CAMPAIGN 287 Trade is not compulsory purchase of foreign goods. It is freedom, and it is freedom to take the best, wherever it comes from. ("What about granite?") Well, consider granite. I have got granite quarries in my constituency, and my opponents have tried to talk in exactly the same way to the quarrymen there, but they are far too intelli- gent to listen to that sort of business. I just heard, before I came to the meeting, that the Tory canvassers are going down to the quarrymen in Carnarvon telling them exactly the same sort of tale as they are telling the quarrymen down here. But they are not making the slightest impression upon them. Why? Because the Welsh quarrymen know perfectly well that during the last few years we have imported less granite and not more from abroad. And not only that. The Protectionists themselves have stated that they are not going to tax raw materials. Do you imagine that in the great building centres of this country they will go down to the masons, the builders, the house-owners, and say, " Here, we are going to put a tax on granite, a tax on slates, and on slabs?" Not a bit of it. They only come down where there are granite quarries and say, "We mean to tax granite." They do not mean to do it at all. Let them give a pledge. You ask Mr. Balfour. He is the man who is responsible. I challenge any Tariff Reformer here to get a letter from Mr. Balfour to say he means to tax granite and slates. Tariff Reformers allow their candidates to talk in this way in each district, taking very good care not to say so in the great populous centres of England. They are deluding the people. The fact of the matter is that under this system of Free Trade Britain has become the richest country in the world. We have stood by the flag of freedom for fifty or sixty years. Under that system the people have undoubtedly increased enormously in prosperity, and in conditions of life. There is a good deal more to be done, but the way to do it is the way we are travelling 288 BETTER TIMES in the Budget. Not by making our food dearer. Not by making our clothes dearer. Not by making our houses dearer. But by freeing the land, by putting taxation on the right shoulders, and by seeing that the resources of the State are applied to lift the poor out of the mire, and the needy from the dung-hill. That is our policy. This land — this land is meant for Free Trade. Look at it. I have been round a good part of Cornwall — not only now, but on a previous visit — and I have looked at your beautiful bays and creeks and estuaries. There are others all around the coast of England, Scotland, Wales, and Ire- land. They are all meant to draw in the good things of the earth from every part. Germany — how many ports has Germany got? She has practically got only one great port. For the rest she depends upon Antwerp and Rotterdam in other lands. She is a great land country. We are a great sea country, opening our arms north, south, east, and west to the whole world. And look at our great seaports — London, the greatest in the world, Liverpool, Newcastle, Grimsby, Glasgow, Leith, Cardiff, and Bristol. Come to the South of England, South- ampton — and Falmouth as well. Go everywhere, all along our coast; we have the greatest seaports in the world. What is that for? It is to trade with the world; to receive goods from every clime ; to send goods to every clime. It is the function which Providence seems to have pointed out for us in the very configuration of our grear country — intended for it — and I say that to close our ports, to put a bar across them, to put a sort of turnpikes there, with toll gates, is quarrelling with Providence itself. Let us stand by the flag planted in our market places sixty years ago by the greatest Englishmen of our age — Sir Robert Peel, Mr. Cobden, Mr. Bright — the flag of free- dom planted in our markets, planted over our seaports, over our exchanges, a flag under which we have grown in prosperity, in wealth, and in greatness. I thank you. RURAL INTIMIDATION Queen's Hall, March 23, 1910. During the last General Election it was my privilege to address, I think, two or three large gatherings in this identical hall, and what strikes me and has impressed me very deeply since I have been in this hall to-night has been this. I am a pretty old hand at public meetings now of all sorts, several of them very lively, some of them enthusiastic, and some of them not, and all of them very warm ; and what I learn from this meeting is that there is no abatement of the spirit of resolution and zeal which carried us through to victory at the General Election. I am glad of that, because we are only on the eve of very stirring events. The progressive forces in this country are bending their energies to the task of uprooting the mischievous power of feudalism. The reactionary elements in the country, on the other hand, are, with the same energy, with the same zeal, but, perhaps, with different weapons, under- taking the task of nourishing and feeding these roots, of strengthening them, and deepening their hold on the soil, and by tariffs and by something they call reform of the House of Lords, real progress in this country is barred in every direction by the feudal power. In the villages we find it driving the population from the healthy occupations connected with the soil into the 389 U 2 9 o BETTER TIMES unhealthy atmosphere of the towns, or often driving them across the seas to find a living. In the towns we find the conditions imposed by feudalism on the tenure of land driving people into unhealthy habitations, and when you come to the government of this country you find the same power obstructing every measure demanded by the people for the amelioration of their condition. Feudalism is the enemy, and we must deal with it. Victory in this conflict means the regeneration and the emancipation of Britain. Defeat would mean despair and disaster to the British democracy, and I am, there- fore, glad to see signs that the democratic and pro- gressive forces in this country are realising the magnitude of the operations in front of us, and are organising for the purpose of dealing with it. The Government have been subjected recently to some criticism from foes, and just a little from friends. Some of that criticism has possibly been justified, and is, there- fore, helpful. Some of it, I think I may say a great deal of it, has been dictated by impatience, and is, there- fore, superfluous. This is the first chance I have had of saying a word to our critics. They have criticised for our good : I will return the compliment, and criticise for theirs. The first thing I should like to say is this : there is nothing more baffling to the reformer than the patience of the people with wrongs, except their impatience when they are aroused to a sense of their wrongs. You find the people enduring injustice, oppression, fraud, generation after generation, and without a murmur — just a groan — for centuries. The patience of the people is a marvel of all time. Then suddenly they are stirred up to a sense of the injustice that has been inflicted on them, and when they rise in their might there is nothing which is more baffling than their impatience. They can hardly wait for the counsels of prudence in their efforts to redress wrongs which they have endured for centuries. RURAL INTIMIDATION 291 This is the first thing I have to say now — we are engaged in settling the old but heavy account with the House of Lords. ("Down with them!") I agree; but let us go at it scientifically. I will just utter a word of warning in a metaphor. A chauffeur driving along a new, unaccustomed, and difficult road requires all his nerve, all his steadiness of purpose and direction ; but he cannot preserve any of these qualities if the passengers, the moment there is a bit of a jerk or a little snap, pull at his elbow, if they press him^ jostle him, or shout at him conflicting orders and injunctions. Give fair play to the chauffeur. The old injunction they always used to put up on ships was, "Don't talk to the man at the wheel." He will pull us through. I am not talking at anyone in particular, but at everyone whom my observa- tions concern. We are in for a protracted fight, but if we stand together we will win. And I am very glad that those who are engaged in the Gladstone League are going about it intelligently and organising systematically. That is what is going to do it. In every war there is a dearth of fighting men, but a superabundance of strategists. You will get one at every fireside. It is true no two of them will agree, except in condemning everybody else. We want fighting men, and you may depend upon it that our general will lead us on to action. Now I come to business; I am going to talk about the purpose of the Gladstone League. It has already been developed in the very admirable speech of the chairman, and all I have to do is to drive home one or two points which he so admirably made. The first essential object of this organisation is to ensure complete protection to the voter in the exercise of his civil rights. After all, the franchise is the most valuable possession of a workman. Is it the only property that is not to be protected by the law of the land? If a man is deprived forcibly of a six- pence the whole machinery of the law is at his disposal u 2 292 BETTER TIMES to assist him to recover it and to bring the depredator to justice. Why not the vote? The other day a poacher got six months for an offence. If a man's hares and rabbits are to be protected to that extent, why should not a workman's vote receive the same protection at the hands of the law? And why should not the man who tries to poach it and force it from you by threats be visited with the same punishment? Poaching is a very serious offence. I know it. It seems to me it is not less a danger to the institutions of this country than an offence which means an interference with the exercise of the elementary rights of citizenship. That is the first thing we have to do. If the law is inade- quate to protect a citizen, by all means strengthen it. But it is no use having a law strong or weak unless it is in force, and the business of the Gladstone League will be to see that the law is put in operation. Now, the circumstances of the last election disclosed intimidation and interference with voters on a scale that is almost unparalleled in modern times. Never before has it been quite so barefaced, especially in certain parts of England. The Gladstone League has already investigated a number of cases. I had a copy of a number of them — I am sorry to say I did not bring it with me — but I have two or three cases which have been investigated where the facts have been verified. A shepherd put in his cottage window a picture of the Liberal candidate. What a crime ! The picture was in- stantly taken out of the window by the employer, and the shepherd was threatened with dismissal if he put it back again. A gardener received a week's notice, not because he had offended, but because his wife and daughter took too active a part in politics. What will happen when these ladies get the vote I don't know. A carpenter was dismissed for asking a question at a Tory meeting. Yes, in a way. They sent the man about his business. That they could do. To give a reasonable RURAL INTIMIDATION 293 argument was beyond their power, for any man can sign a notice to quit, and, therefore, they only did what they could, and nobody can do more. Here is another : A farm labourer was seen to go to the poll in a prominent Liberal's car. The moment he returned he was dismissed. There are several cases where traders have had their custom taken away from them. Why should that be tolerated, and what does it mean? A letter appeared in a local paper somewhere in the South of England in which a Tory put it brutally that if you employ a labourer you expect a "quid pro quo." I should think that " quid pro quo " was the labour, the work that is done. Not at all. The return he expected was that the man should surrender his conscience and soul to the man who employed him. What an arrogant demand ! Purely because you give a man the opportunity to earn his living, to do honest work, which is the right of every man, he is supposed to sell his soul to his em- ployer. The poor labourer, earning his fifteen shillings per week, may say, " I think it is rather hard on me that two shillings should be put on the bread and meat of my children." The landlords or the employers say to him, "Think! What right have you to think? You parted with your power of thinking when you accepted the pledge that put you in my employ." That is a pledge that is inconsistent with the elementary right of manhood. Well, if that demand is to be conceded, free institutions are a farce, and we have to consider seriously what is to be done in order to meet that kind of intimidation. You may say, "Why not prosecute in those cases?" In the first place, the answer is because there was no Gladstone League at the General Election. A prosecu- tion in a case of that kind ought to follow hot-foot on the offence. You ought to have a League of this kind to in- vestigate a case immediately ; you ought to have a League of this kind as a city of refuge to which every persecuted voter could flee, with an avenger of blood, in the shape 294 BETTER TIMES of an official of this League, to prosecute the man who commits that offence. I hope at the next General Elec- tion you will have a League in every borough of the country, with secretaries well known to the people, so that the voter may know where to seek protection. We want not merely protection, but compensation. In these cases we want to see that no man starves because he stands up for his principles in this country. As some of you may know, I come from Wales. Evi- dently you seem to have heard of it, and if you had not our opponents would have reminded you of it. Well, now I will tell you what we did with intimidation there, and the story is not only not irrelevant, but it is strictly germane to the setting up of this League. We used to have tenant-farmers and their vote was part of the letting of the land. I ventured to say here before that it was what the lawyers call "a covenant that runs with the land." What of the conditions of tenancy? If a land- lord was Tory, well, the vote of course was Tory. If the landlord happened to be Liberal, then all his tenants of course voted Liberal. A time came when our tenant- farmers and labourers began to think that that was in- consistent with true manliness, and in 1868 we had really a great revolt against it. What happened? I will tell you the story of our county. Our members used to be chosen for us. I do not remember very much beyond 1868, but I am told that before that time our members used to be chosen for us by the country squires, who used to meet in an hotel at Carnarvon and say, "Which of us shall go up to Parliament? " Somebody said, "Will not you go?" He said "No." But at last a brilliant idea got into one man's head, and he said, " I propose that Lord Penrhyn's son go there." Somebody seconded. The thing was settled. There was no contest expected ; they thought the man was as good as elected the moment the resolution was declared carried by the chairman. But something happened in 1868, The Liberals said, RURAL INTIMIDATION 295 "Had we not better run a candidate?" The day emu- for nomination. A great landowner proposed Mr. Douglas Pennant, a land agent for the second greatest estate of the county. Then somebody got up and pro- posed a Liberal candidate, and to the amazement and consternation of the assembled landowners up jumps a tenant-farmer, the chief tenant-farmer on the estate of that great land agent, and said, " I second the nomina- tion." He was not tenant of that farm long. A man of the highest attainments, an exceptionally cultured man, a brilliant writer, a great thinker, a man of exceptionally high character. Not only that, but he was one of the pioneers of scientific farming in that part of the country. Not one of those qualities saved him. Why? He, a tenant-farmer, dared to have an opinion in opposition to the great landlords of the county as to who should repre- sent that county. Notice to quit ! Ejectment ! There was nothing else that could drown the memory of that insolence. But that was not the end of it. I remember — it is the first election I remember — and I will tell you one or two things about it, because they are strictly re- levant to what we are considering. I was a boy at school then, and I was in the blackest Tory parish in the land. I believe my old uncle, who brought me up, was the only Liberal in the village, so you may guess the sort of time I had. Let me tell you what happened. He was not the only Liberal in the parish. There were three or four others — and I will tell you what happened to them in that election. One or two of them refused to vote for the Tory candidate, and two or three actually went further and dared to record their votes for the Liberal. All of them received notice to quit. I remember that some lads who were at school with me in the same class in a year or two had to leave the neighbourhood. I was very young, but young lads do not forget things of that sort. I know the reason why they left — because the great 296 BETTER TIMES squire of the parish had turned their father out of their home purely because he dared to vote for the Liberal candidate. That is the sort of thing that went on through- out the whole of Wales, and I will give you a letter that was written by the Trustees of the Willoughby de Eresby estate — not the present Willoughby de Eresby : " I feel it necessary to explain that Lord Willoughby de Eresby is a Conservative " — I should have thought that quite unneces- sary — "and gives all his support to Mr. Pennant, and therefore " — this is the point — " does not consider it right that you should allow yourself to be led by others to vote against the interests of the estate on which you live, and against the wishes of his lordship." Those are the letters t.hat were circulated. That was the attitude of Welsh land- lordism up to that date. After the election notices to quit were showered upon the tenants. What happened? They were turned out by the score on to the roadside because they dared to vote according to their consciences. But they woke the spirit of the mountains, the genius of freedom that fought the might of the Normans for two centuries. There was such a feeling aroused amongst the people that, ere it was done, the political power of landlordism in Wales was shattered, as effectually as the power of the Druids. It is my first memory of politics, and that is why I am proud to be President of the Gladstone League. What happened after- wards? There were poor tenants who used to receive the dictation of the landlord as if it came from heaven. Was it because they were Tory? Not at all. In that little village where I was brought up the Welsh newspapers which were read we-e all Liberal papers. I knew the men on whose lips they hung, whose counsel they took on all the deepest affairs of their lives. They were the great pioneers of Welsh Liberalism. Up to 1868 they all voted with the landlord, but the chains were broken, and they have been free men ever since. The landlords still meet in the back rooms of the county hotels. The same old county meetings are held to choose the candidate, and if RURAL INTIMIDATION 297 you look at the results of the last General Election you will find that they have been "put down last," as we used to say in school, by anything- between 3,000 and 11,000. They still go on. They cherish the old delusions. They still think they rule the county. Why, in that little village, where, when I was a boy, there were not half a dozen Liberals, at the outside, there was a county council election a fortnight ago. The landlord nominated his nominee — a Tory. Then a relative of mine, my brother, who, as you may imagine, is not a particular favourite with landlords, stood as the Liberal candidate. He got in by something like two to one. That is the change that came over the spirit of the dream of rural Wales ; and all I can say to rural England is, "Go thou and do likewise." I am going to give you another little lesson from Wales. It is full of significance, and leads me straight on to my next point. The labourers in Wales have always been above intimidation. And why? Because Wales is a country where there are mines and quarries, and if a landlord or great farmer was to try to intimidate the labourer, the labourer would say, "Good-bye," and would take the next Parliamentary train down to the nearest mining village and double his wages. What does that mean ? It means that the essence of political independence is economic independence. That is what we have to do in this country. We have to secure the economic indepen- dence of the workman, and we will never do it so long as there is feudalism in the land. There are in this country 2,500 landlords — I do not mean dukes and barons — who own two-thirds of the soil. How many people are there in this hall? .Well, fewer people than there are in this hall to-night own two-thirds of the soil of Great Britain. What is still worse, by virtue of their ownership they possess and exercise complete sway and power over the liveli- hood of millions of men, women, and children. That is a very serious fact. Not only do these landlords 298 BETTER TIMES possess complete power, but even comparatively recent events prove that they are prepared to exercise it. Take the Scottish deer forests. There you had scores of thousands of industrious, hard-working, thrifty, happy crofting- families — who have produced some of the most gallant defenders of the Empire, all swept away with the disastrous brush of landlordism — swept clean as if they were dust — clean from the board. What for? Purely in order to provide a few weeks' pleasure every year for a few rich plutocrats. It means that the power of feudalism over the land, which is the basis of our living in this country, is not only absolutely complete, absolutely with- out appeal, without challenge, but that you have got landlords who are prepared to exercise it to the detriment of the public welfare. I have given you cases of political intimidation. That is another case in point. Why is this? You know it. It is because there is an essential difference between the conditions under which agriculture is conducted and the conditions under which any and every business in the land is conducted. There is a difference not merely in the conditions, but, what is still more important, in the very aim and object. What is the aim and object in business? The aim and object in business is that you should be able to produce conditions that will secure the maximum of yield and the greatest reward for all the labour and capital which are put in any particular business. What is the aim, the chief aim, of the letting of land. It is to secure a maximum of social, economic, and political power for the landowners. What business could ever be conducted under the conditions in which you conduct agriculture? Would you ever get a business man risking the whole of his capital on improvements on a year's tenancy? Of course some of the methods of feudalism have obtruded themselves even into the business of our towns, where you get scandalously short leases. But no business man would invest and risk his capital without a certain measure of security that he will reap the reward of it. But in farming RURAL INTIMIDATION 299 there is nothing but the honour of the landlord. A year's notice terminates the tenancy, and although you may get a certain measure of compensation it really is not adequate to the loss which a farmer suffers if he is turned out at the end of a year's notice, having put all his thought, all his brain, all his knowledge, his capital and his labour into the development of the farm. Well, now, that is the first thing. It is organisa- tion on a different principle. I am not challenging the honour of our great landowners. I believe that in the main they are thoroughly honourable men, and that they wish to deal fairly by their tenants. That is not the point. After all, they cannot guarantee what will happen beyond the term of their lives. Very often land is sold. How can they guarantee how the purchaser will deal with the things on which the tenant has spent his money during the ownership of his predecessor. All that means a certain precariousness, a certain insecurity, which militates against the development of the full natural resources of the soil by those who are engaged in tilling and cultivating it. What is the first thing to do? There ought to be absolute security of tenure in this country. There ought to be a full guarantee that every man will reap to the utmost the harvest which he him- self has sown. If you did that you would have better farming. You would have men spending more capital and more thought on farming. They would know per- fectly well even if they themselves did not reap the harvest that their children would. That in itself would increase the labour in the country ; it would increase the quantity and quality of labour ; it would double the resources of the soil ; it would augment the natural wealth. It would secure in a great measure the independence of the people who live on the soil. All these are matters of the greatest importance. I hope Liberalism will see its way to go even further than ensuring security of tenure for those who cultivate the soil. Our chairman has already indicated that in his 3 oo BETTER TIMES judgment there ought to be some great measure which would transfer the ownership of the soil from these great landowners to the cultivating peasants. The Tories con- template some plan of that kind. They — at least at the General Election — had a great scheme for breaking up the big estates. The object is a thoroughly sound one, but, as your chairman has already very wisely pointed out, it depends entirely on how it is worked. Who is to select the estates? What part of the estates is to be chosen? What is the price that is to be paid for them? Who is to do the valuation ? What are the principles upon which that valuation is to be based ? Those are matters not merely of detail, but they are essentials to the success of the scheme. We know something about the Tory principles of valuation. When land is purchased from a great land- owner for public improvements, I have heard of 80 years' purchase being given before now, and my friend here, who has been going into this matter very fully, reminds me there have been cases of 700 years' purchase. Well, no one would live to work through that. We have seen a great Tory measure for setting up peasant proprietorship working in Ireland, and I should like every man and woman here to go closely into the finance of that operation. I can assure you it is fearfully and wonderfully made. You are to transfer the land of Ireland from the landlord to the tenant-farmer. What are the principles? I will tell you what the result was. The first result has been to put up the price of land in Ireland by seven years' purchase. The State loses on every trans- action over 20 per cent., so that if it is a farm of ^1,000 the price first of all is up by seven years' purchase, and the State loses over ^200 for every ^1,000 in putting the transaction through. You may be able to do that for Ireland, but if you were to extend those principles to the whole of the United Kingdom you would bankrupt the whole country. Your loss would be worse than a great war, and that is bad enough. What about the tenant? I have seen something of freeholders, I have seen some- RURAL INTIMIDATION 301 thing- of tenants who purchased their farms at extravagant prices when estates were broken up. What happens? The poor fellow, in order to secure his property, to secure his home, invariably pays more for it by five or ten years' purchase than it is worth. How does he pay for it? He has been working hard through all the years of his life. He is working hard, his wife is working hard without any pay, and they have saved a little money — just a few hundreds. The old home is put up for sale by auction. The auctioneer manages to hint that there is somebody in the room bidding against him. He says, "One thousand," "Eleven hundred." Yes, thank you." Up he goes, and the poor fellow, in fear and trembling that the old home is to be taken away, in his eagerness gives his last penny, not for the value, no, but for the excess of valuation. In five minutes in the auction room, where before, at any rate, he was a man with a little com- petence, with a little saved up for a rainy day, he is reduced to a bankrupt freeholder. He goes to a man and borrows money on mortgage at a high rate of interest. That man is crippled for life. Thrifty, industrious, all his labour is of no avail. He is a man without hope. He is broken. He was better off as he was, even with the year's notice to quit hanging over his head. That is the Tory notion of land purchase — something that will do what is done in Ireland, what is done now on several estates, something that puts into the pockets of the landowners hundreds and thousands of pounds more than the thing is worth ; and the poor tenant and the State between them — the State being the taxpayer — have to divide the loss. None of that in our ideas of land purchase ! That is why, when I introduced the Budget, I felt the first step in land reform was valuation — a fair valuation, an impartial valuation, not a penny less to the landowner than the place is worth — that would be robbery of the landowner — not a penny more to the landowner than the thing is worth — that would be robbery of the State. No robbery on either side. 302 BETTER TIMES The Tories shout, "No confiscation." We say, "We agree with you, but you must not confiscate on either side ; absolute fair play, holding an even balance." If the land- lord is dissatisfied with the valuation, if he thinks it too high, we have helped to adjust the matter by making the valuation the thing upon which he pays the taxes. That gives a man a wonderful sense of the value of the thing. No man ever exaggerates the value of property for rating purposes. But if he thinks it is too high, or if he thinks it is too low, he can appeal to the highest tribunal in the land and put it right. Very well, that was the basis upon which the operation of land purchase — whether it is from the tenant, from the County Council, or from the State — that is the principle upon which it ought to be conducted. And I have only one word more to say in conclusion — the advantage of all this is not merely economic, it is not merely that I think you will double the resources of the soil — because no man who looks at England as it is can possibly deny that with more scientific applications to agriculture, and with greater security to the cultivator of the soil, you could not double the resources of the land — but it is not merely economic, it is not merely that you increase the natural resources of the land and augment its wealth, it is not that you give addi- tional opportunities for productive, remunerative labour. You do more than that; by this means you secure the independence of the worker in the rural districts of the land. And that is an important thing. Precariousness of work leads to the servitude of the worker. Certainty of work means freedom. It is that certainty, that independence, that we aim at. There was a great judge who once said that the moment a man put his foot on British soil he became a free man. We want to translate that great dictum into reality. Our view, our purpose, the mission of Liberalism is summed up in this — that labour ought never to be the reward of bondage — that labour should ever be the road to freedom. SECOND BUDGET House of Commons, June 30, 1910. I am introducing a Budget this year under circum- stances which, to say the least, are very unusual, and I think I may say entirely without precedent. The position is that the financial provision made in the usual course by the Government last year to meet a substantial deficit — for reasons I need not enter into, and that are not at all relevant to the question I have got to discuss to-day — was not carried in the year for which it was intended, and it was only a month after that financial year had expired that the Budget was carried into law. I have no concern at all with the constitutional aspect of the ques- tion, and I am not at the moment interested in its con- troversial side ; but I am bound to take note of it, because it has had a very considerable direct and damaging influ- ence upon the finance of the year, and consequently upon the statement which I have to make. It has complicated and disarranged the whole of the finance, and at every point of the statement which I have to submit to the House I shall have to interpolate some observation or figure having reference to that state of things. Conse- quently it is necessary that I should preface my observa- tions by specially directing attention to that exceptional state of things. It has affected the finance of the year in three or four ways. A month after the expiration of the 303 304 BETTER TIMES last financial year two-thirds of the Income Tax had not been collected, the whole of the Super-tax was uncol- lected, and several new taxes upon which we depended to make up the deficit of the year not only had not been collected, but the machinery for their collection had not been set up, and it is not even now completed. Large sums have been borrowed in order to meet the current expenditure of the year, and there will be a charge for interest even upon the revenue of this year. The greatest complication of all is that certain taxes have been put back. I shall be unable to collect the whole of the Income Tax for this year before the end of the financial year. The same observation applies to the Super-tax. The Land Taxes have been put back. We have lost about a month of the stamps. Therefore, these exceptional circum- stances affect very seriously and substantially the whole revenue of the year. But in spite of that nothing has hindered the growth of Expenditure. [Opposition cheers.] In response to those cheers, I think it is necessary for me to point out that, with very trivial exceptions, it is expenditure which has been the result of pressure from both sides of the House — at least the great bulk of it — and as a matter of fact it would have been much greater if we had responded to that pressure. The increase in the expenditure of this year over that of last year is very considerable. As to the reason for that expenditure, it is expenditure which is essential for the growth of any civilised or healthy com- munity. There is a considerable growth in the Education Estimates. There is a substantial growth in Old Age Pensions. Labour Exchanges are responsible for an increase in the expenditure of the year, and I am glad to be able to say that they are an unqualified success. Valua- tion is responsible for something under ^500,000. The Development Grant accounts for ^900,000. A sum of ;£6oo,ooo is voted for the purpose of improving the roads of the country. SECOND BUDGET 305 Ireland is responsible for an increase of something- like ^700,000 on education, land purchase, congested dis- tricts, as well as old age pensions. As a matter of fact the increased expenditure on Ireland for this year alone is more than the total which we expect to derive from that country in respect of the new taxes. If the old age pen- sions for last year were added, the contribution of Ireland towards these taxes would be something like one-fifth the amount she gets out of them. But the greatest growth of all has been in the Navy. The increase here has been considerable — something like ^5, 500,000. Last year there was an increase of nearly ^3,000,000; this year there is another increase of about ^5,500,000. I would remind the House, by giving one or two figures, how expenditure upon the Navy has grown during the last few years. In 1886 the Chancellor of the Exchequer in a Conservative Government resigned his position rather than assent to Navy Estimates of a little over ^13,000,000. To-day they are ^40, 600,000, and I believe some people are not satisfied even with that. The total expenditure of the year, as the Committee will find by referring to the Papers that have been circulated, comes to ^171,857,000. In addition to that, we have the deficit of last year, for which I have to make provision, ^26, 248,000. Then there are arrears of payments to the Local Taxation Account, also dealt with in last year's account, amounting to ^825,000, making ^27,073,000 in respect of last year. Therefore, the total amount I have to provide this year is ^"198,930,000. I come now to the Revenue side. First of all, I had better deal with the arrears from last year. I made a statement to the House a short time ago indicating that I expected to collect another ^30, 000,000 in respect of the arrears of revenue which would have come into the Ex- chequer if the Budget had passed in due course. I have already collected in respect of those arrears ^26,796,000, and great credit is due, both to the Inland Revenue and to x 3 o6 BETTER TIMES the Customs, for the admirable way in which they have surmounted the difficulty. We have practically wiped out the whole deficit of last year already. We have money in hand to take up all the Treasury Bills for the temporary borrowing- rendered necessary by the peculiar circum- stances of the year. We have almost restored the Ex- chequer balances, and the money which has not been col- lected will be in the nature of a surplus upon last year's account. I will give one or two particulars as to the arrears. We have collected everything- on Spirits, Tobacco, and Tea. We have collected the Estate Duties that were in arrear. Land Tax and Inhabited House Duty are almost entirely cleared up. Of Income Tax we have collected every penny. For the Super-tax the machinery has not been set up. Therefore, we have not collected the arrears in respect of the Super-tax ; and the same remark applies to the Land Value Duties. But the biggest arrears of all are in respect to the Licence Duties. The Licence Duties are due for payment to-day. We have already received payment in different parts of the country, and, as usual, Scotland is to the fore [An Hon. Member : " Ch ! "] Well, a Scotsman and his debts are soon parted. The Scotsman is a g-ood business man, and he realises that the sooner he gets rid of his debts the quicker he gets at the profits ! Seventy per cent, of the licences in Scot- land have either already been taken up, or arrangements have been made in respect of them. I hope in a very short time to be able to give a further clear account of what has been done in Scotland. England is generally in arrear, and the same observation applies to both Ireland and Wales — both in respect of the Income Tax and the licences. I do not expect to see anything like the whole of that amount for some time to come. That is the posi- tion with regard to the arrears. The deficit has already been wiped out before the end of the year, and I have not the slightest doubt that we shall see the full ,£2,900,000 SECOND BUDGET 307 which we regarded as surplus upon last year's Revenue •and Expenditure Account. I come to the revenue for this year. In estimating it, as every Member of the Committee knows quite well, the conditions and prospects of trade constitute a most im- portant element. Almost all branches of the revenue, except possibly the Income Tax, respond immediately to trade conditions. The Income Tax, computed upon a three years' average, shows that we may have a year of very good trade, with a bad Income Tax year. That is what happened more or less this year, because we have one moderate year substituted for one excellent year. Therefore the Income Tax will be slightly down, although it is a year of good trade. What is the trade outlook? I have made many in- quiries in divers quarters, and in very authoritative quar- ters, and I am very glad to be able to say that all the replies received have been most reassuring. I am told that the outlook is distinctly bright. The world's crops for this year are likely to be abundant. That is a great impetus to trade. There has been an immense production of gold. Last year was a big one in this respect ; this year, I am told, is larger. The commercial world everywhere is in better heart. There is more enterprise. Everything makes the prospect brighter. I am told, on authority that I do not doubt, that we shall possibly see a greater volume of trade this year and next year than has ever been witnessed in the history of this country. Cotton, which was giving us a good deal of anxiety, promises by October to be abundant in the supply of raw material. Imports and exports are leaping up. The home market is much busier. Unemployment is going down. Last year at this time it was something like 8 per cent. ; now it is 4 per cent., and it is still steadily on the down grade. All indications are that this year's trade will be good, and that next year's trade will be better; that the people will be prosperous, and that therefore the revenue will show expansion. The x 2 308 BETTER TIMES Revenue Departments are fairly good tests of this, and there is one advantage in bringing in the Budget late. That is that you have been able, at any rate, to test some of the duties and taxes for two or three months before you introduce your Financial Statement and make your Esti- mates. And that is what I find — that all the taxes and duties which constitute the best index of trade are doing well. The Post Office is a very good test of either good or bad trade. The Mint is almost better — because when the purchasing power of the people goes up there is a greater demand for small change. That improves the revenue. The Mint is doing uncommonly well, and there is a greater demand for silver, very largely for home use. With respect to consumption of articles of the house- hold, like tea, sugar, coffee, cocoa, and with respect to stamps, which especially show the state of trade activity — like bills of exchange, cheques, receipt stamps, and marine policies — all these things which are peculiarly affected by trade activity — are doing brilliantly. The Stock Exchange is not always a good indicator as to whether trade is either good or bad. Therefore I am justi- fied in making my estimate on the assumption that there will be an expansion of revenue owing to improved trade. I come to the various items of revenue. The first is the Customs. In estimating the revenue on Customs, I first come across the troublesome question of the Spirit Duty. I think I had better deal with that before I reach the Ex- cise. It is true that only a small proportion comes under that head, but the same principle applies to both. There- fore I shall deal at once with the question of spirits. Un- doubtedly, last year we lost a good deal of revenue under this head. I have no doubt that a good deal was due to the fact of the extra duty of 3s. gd. Our estimate was com- pletely wrong — wrong by millions — and the only thing I can say in defence is that I was nearer the mark than any- body else. I was nearer the mark than the trade itself. There was not a single trade organ — you might imagine they would know more about their business than I did — which SECOND BUDGET 309 did not denounce me for under-estimating the revenue. I was wrong. They were still further wrong. What were the causes? I think, before we come to the spirit ques- tion, and as to whether we should retain the 3s. gd. extra Spirit Duty or not, we had better, first of all, get the facts. There were three causes of depression in the spirit revenue. Two were temporary. One of them, I believe and hope, will be permanent. Let us take the two tem- porary causes to begin with. The first was forestalments. There was very considerable forestalment both in March and in April, in anticipation of a very probable increase in the Spirit Duty — which was very well justified ! Taking that forestalment on the 14s. gd. basis, it accounts for a loss of ;£ 1, 400, 000 of revenue. Then there is the fact that the 3s. gd. was not charged at all in respect of Mr. Austen Chamberlain : Would the Chancellor of the Exchequer make that calculation a little clearer to us? He says, "taking it on the 14s. o,d. basis." Is he assum- ing that the year lost 14s. gd. on every gallon that was forestalled? Mr. Lloyd George : No. What I am assuming is : that in respect of the March forestalment we lost 14s. o,d. I am assuming that in respect of not merely the forestal- ment in April, but also in respect of the whole month of April — from this point of view — we lost the extra 3s. o,d. That is the basis of the calculation. That is the first cause. It is purely temporary. These forestalments have to be made up this year, and therefore that is the cause which is removed when you come to calculate the possible revenue for this year. What is the second temporary cause? Depletion of reserves. The licence holders drew largely on their cellars. They lived on their cellars for some time. I know the hon. Gentleman the Member for Ayr (Mr. George Younger) in the course of discussion on this question, pointed out that the trade had learnt a lesson. They find that they can live on very short stocks, and still conduct their business quite as efficiently Mr. George Younger : No. 310 BETTER TIMES Mr. Lloyd George : Not so efficiently, probably ; but the lesson they have learnt they will take advantage of in the future. I am assuming- that. I think it is very likely they will not restock their cellars to the same extent ; that they will not keep the same reserves as they used to do. But to the extent they lived on those reserves they have to withdraw from bond this year a corresponding amount. Therefore that is a temporary cause. Now I come to far and away the largest, most important, and substantial cause of the diminution, that is the fall in consumption. What accounted for that? I have made inquiry and found there was a variety of causes. Curiously enough the first is political. The Conservative was so angry that his whisky had been put up by a Radical Government that he declined to buy it. The extraordinary thing was the Radical was equally angry with the publican for putting up the price to a figure which he thought was beyond what was justi- fied, and he would not drink. So that both the Tory and the Radical consumption fell off. Part of that, I have no doubt, is temporary. This resentment will not last, but I must also say that people discovered they were much better off under diminished consumption, and they may decide to make it permanent. But the third cause was that the consumer undoubtedly found he could not pay the extra price, and therefore he cut down his consumption. I have had some very curious reports about the effect which that has had. A Birmingham publican reported that in the morning he used to sell a bottle of brandy with sodas. "Now," he says, "I sell all sodas and no brandy, with just a little whisky." He said that out of four customers now coming in, two are for beer and two for mineral waters. Now that is a change affecting the revenue. The publicans discovered they could not put up the price ; and they are divided about it. There are two great parties : there is the party which puts up the price, and there is the growing party — the party of the future, as I believe — which cuts down the measure. They discovered SECOND BUDGET 311 that they could not do business by selling at a higher price. So now they have resorted to the other expedient of sell- ing at the old price a smaller quantity. I think the old measure was something like a quarter of a gill. They have now cut it down to one-fifth, and they have done it rather cleverly, so I am assured. They use a measure which ex- ternally is exactly the same as the old one, but with a raised bottom. Well, now, that is very good for the publican, because it enables him to pay his extra duty and to make a little profit, and it pleases the customer. I do not think he is at all conscious that he is drinking less, and there is nothing gives greater satisfaction to a man than to feel that as he is growing older he is able to drink exactly the same number of glasses, and to carry it better. At any rate, between one cause and another there has been an enormous diminution in the quantity of spirits consumed in this country. Comparing 1908-9 with this year, there would be a drop of 10,000,000 gallons in the consumption of spirits. I have considered this from two points of view. Of course, as Chancellor of the Exchequer, I have first of all to con- sider the effect upon the revenue. I do not think the Chancellor of the Exchequer is bound merely to consider that, and I think this is the view taken by the right hon. Gentleman sitting opposite — that is not his view certainly of this fiscal reform — at any rate, he is bound to consider the revenue. Now what has been the effect upon the revenue? I should like the Committee just to follow the figures. There is an idea that we have lost money by it. We have not. Take the following : There was a steady, continuous diminution in the quantity of spirits consumed in this country. There was a drop of 5 per cent, between 1907 and 1908. Taking the true revenue of 1908-9 — we must eliminate forestalments for that period — there was a drop of 5 per cent. If you assume for a moment that we had not touched the Whisky Duty, but kept it at us., the diminution, which had been steady and continuous for years at something like 3 per cent, per annum, going on 3 i2 BETTER TIMES at the same rate in 1909 and 1910, what would happen? If you put the revenue at us., and on that basis com- pare it with the revenue and diminution of consumption at 14s. 9d., we have at least ^500,000 to the good. It has been a substantial gain to the revenue and not a loss. But I am bound to take a broader view of its effects than that. It has been a distinct gain to the community. The results have been perfectly astounding — I do not think that is too strong a word. If the Committee will allow me, I will take the whisky drinking parts of the country. I am speaking of the parts where whisky is the beverage, and not beer. From the moment the tax was put on drunkenness dropped down, and had a very long drop. The effect seems to have been instantaneous, and it is continuous. There was a drop from the first month. In Scotland I have the figures for the first quarter for this year and the last nine months of last year. There was a drop of 33 per cent, in the con- victions for drunkenness. I have here the figures for Glasgow, and there I observe in the month of March, 1909, the convictions are rather up for drunkenness. There seems to have been some forestalment in anticipation of the Whisky Duty ; there was a good deal of drunkenness, and the figures went up. In the month of April, finding the Whisky Duty still at the same figure, they were kept up; but in May there was a drop from 1,100 down to 700, and it has kept at that figure ever since. I have a letter from the chaplain of Edinburgh Gaol, and this is what he says : — "The reduction in admissions to that gaol from April to December, as compared with 1908, was 2,000 persons. This, in the opinion of the governor of the prison and the recent chairman of the Prison Commissioners, was entirely due to the increased tax on whisky." The letter concludes : — " From the moral point of view, there can be no doubt the increased duty has been an enormous gain to the SECOND BUDGET 313 nation. I regret that private individuals have suffered thereby, but surely in this matter the national well-being must be considered." I have also a letter from a well-known Provost in Scot- land, who says : — 44 1 regard the relaxing of the increased Spirit Duty as nothing short of a national calamity. From my 23 years' experience in municipal government, working among the masses of the people, I know of no measure that has done so much for the well-being of the community by getting rid, as it most effectually has done, of the evils of intem- perance." I find this week there was a less number of prisoners on the record of the calendar of the Edinburgh police courts. That is the story we get from Scotland. The same thing applies to Ireland. There a very appreci- able reduction has taken place in drunkenness, ranging from 35 per cent, to even 70 per cent., and in some places there has been a great fall in the convictions for drunken- ness. I am sorry to say the only exception is Waterford, where, since the Whisky Duty was put on, the arrests for drunkenness have gone up. But, taking Ireland as a whole, there has been a very appreciable reduction in the con- victions for drunkenness. The same thing applies to England. In an answer given by my right hon. Friend the Home Secretary this afternoon it is shown that the reduction in the number of convictions for drunkenness and offences connected with drunkenness have gone down by something like 18,000 in the course of last year. This is bound to react on other branches of the revenue. You are increasing the consuming and purchasing powers of the people. There has been a falling off in consumption of 10,000,000 gallons of highly alcoholised liquor. It is difficult to measure the benefits in improved health, in increased efficiency, in the comfort and the happiness of the people which have been 314 BETTER TIMES effected by that. I say if any Chancellor of the Ex- chequer, in the face of these facts, in response to any appeal from any interest, were to alter a tax that had such beneficent results, he would be guilty of a crime against society. Therefore we must adhere to this duty. Finan- cially, and from a higher point of view, I consider it an un- qualified success. The estimate this year is that there will be an increase — I am now dealing only with spirits, as I think there is an advantage in dealing with spirits alone — there will be an increase in the amount of the revenue derived from Spirit Duty — Customs and Excise — of something like ^1,800,000. That is due very largely to the fact that forestalments have been eliminated, and that in addition to that a good deal of spirits will have to be withdrawn from bond to replace the quantity consumed out of stock last year. The total figure for Customs this year I put at ^32,095,000. That is an increase of ^1,355,000 upon the Budget Estimate of last year. I expect that increase partly from spirits. If the right hon. Gentleman opposite (Mr. Austen Chamberlain) would like the actual figures in detail I think I can give them to him. I anticipate an increase from chicory, cocoa, and coffee of ^49,000 ; dried fruits, ^9,000; motor spirit, ^77,000; spirits, ^268,000 ; sugar, ^190, 000; tea, ^52 1,000 — that is partly forestal- ments, but it is partly, I expect, from a greater demand — tobacco, ^763, 000. That is partly forestalments, and partly due to the fact that there was one month of last year when we did not get the increased Tobacco Duty, and partly because I anticipated 1*5 per cent, increased consumption of either beer, wine, or any other — a very good test of trade. Wine, I expect, will be down by ^48,000, and other articles — I do not know what they are — down by ^3,000. The total increase, I expect, will be ^1,826,000 on the net receipts for last year. I now come to Excise. Here I expect an increase of ;£i,o88,ooo on the net receipts for last year. I have to SECOND BUDGET 315 estimate beer at £432,000 less than last year. The extra- ordinary fact about the diminution in the consumption of whisky is that people do not seem to have been driven to the consumption of either beer, wine, or any other form of alcoholic liquor ; there is a diminution all round. Spirits I put up by ,£1,555,000. Then there are small additions on glucose, licences, medicine labels, and motor spirit, making- the net addition £1,088,000. The total of Excise I have put at £34,270,000. Last year the Death Duties produced an unexpectedly and exceptionally high yield. The amount of property which passed under review, especially on the higher scales, was one of the highest, if not the highest, on record. It was an especially fatal year to millionaires. This year you cannot estimate the Death Duties upon the basis of what we received last year. In fact, they are very difficult to estimate at all, and the general rule is to estimate upon the basis of a three years' average. I have taken that course in estimating the revenue for this year. I have taken a three years' average, with this addition. I am making an allowance for an improvement in trade, and also an allowance for the improvement in the machinery of valuation, which is already beginning to produce good results. Therefore, I propose estimating my Death Duties at £25,650,000. That is an estimated increase of £2,504,000 for next year. It represents an increase of £4,200,000 on the original estimate of last year, but of only £2,504,000 upon the actual receipts of last year. There are one or two disturbing elements when you come to estimate the probable yield of the Stamp Duties this year. First you have only ,got eleven months of the new duties instead of twelve. The Budget was only passed in the last days of April, and, therefore, the first month of the new duties has to be eliminated. There is another disturbing element. Last year the stamp revenue from the Stock Exchange was exceptionally productive. 316 BETTER TIMES There were great booms in rubber and in oils, and, speaking as the Chancellor of the Exchequer, I prefer booms to scares, and they very rarely go together, be- cause when people make them they are very occupied with booms, and they are too busy to get up scares. The rubber boom was more effective in driving off the German invader than fifty "Dreadnoughts." The rubber and oil booms in the city were very produc- tive from the point of view of stamps. I think they account for an increase of something like ^500,000 in the Stamp Duties of last year. It may go on; you can- not tell. I do not think anyone would care to predict — and at any rate I am perfectly certain nobody cares to build an estimate upon — its continuance very much longer. I have heard it said that probably the rubber boom will soon be over, and that the oil boom will con- tinue, but at any rate I think it a bit risky to depend upon the probability of any prolonged extension of either of these great booms. There are one or two other dis- turbing elements, the American markets, which we have to take into account. Taking everything into account, including the fact that the improvement in trade is already making a great impression upon our Stamp Duties in bills of exchange, receipt stamps, and in other directions, I think we are safe in budgeting for an increase of ;£i, 52 1,000 in stamps. The increase which we expected from the new duties in the course of the year was ;£i,20o,ooo. We must take a twelfth off for the month we have lost. That means that in the ordinary course an increase of ^1,100,000 in stamps owing to the new duty, but I think I am perfectly safe in estimating for an in- crease of ;£i, 500,000, and therefore, I am putting stamps down at ^9,600,000. The Land Tax and the House Duty I estimate at ,£2,690,000, an increase of ^"40,000. There are difficulties in the way of estimating the re- venue from the Income Tax, difficulties which are entirely attributable to the exceptional circumstances of the year. SECOND BUDGET 317 We were very late in collecting the Income Tax of last year. We have only just collected it, and, as I have already pointed out, the machinery for the Super-tax is not complete even now. Therefore we shall be very late in collecting - both the ordinary Income Tax and the Super- tax so far as this year is concerned. I estimate that at the end of this financial year we shall be ^2,000,000 in arrear with the ordinary Income Tax, and ^1,000,000 in arrear in connection with the Super-tax. I have to take all that into account because of the lateness of the period at which we shall approach the question of the collection of the money for this year. Therefore I do not think it will be safe to put the Income Tax at more than ;£37>550>o°o- I do not know whether the Committee will be interested to know how that sum is made up. [Hon. Members: "Yes."] Very well, I estimate the yield of the ordinary Income Tax for 1909-10 at ^"36,600,000. The increases made last year were estimated to produce in the second year ^850,000 more than they produced the first year. That is a total of ^37,450,000, which we should have collected if everything had gone in its ordinary normal way. We deducted ;£i 50,000 because the average is bad. You have to substitute one bad year for a good year, and therefore the total collected would have been ^37,300,000. We anticipate there will be ^2,000,000 of arrears carried forward to next year, and that reduces the amount to ^"35,300,000. We expect the Super-tax for last year and the present year to produce ^2,250,000. That brings the total up to ^37,550,000. That means there will be something like ^3,000,000 of revenue which is appropriate to this year. I want the Committee really to get this figure into its mind, if I may say so, for some reason later on. There will be ^3,000,000 appropriate to this year, which will be carried forward into the next year, for the simple reason we cannot possibly collect it in the course of the current year. 3*8 BETTER TIMES The Land Value Duties are very difficult to estimate, for the simple reason we have not got our machinery for valuation set up. We expect to receive from Royalties ^350,000, from Undeveloped Land ^140,000, and from Reversion Duty ^"90,000. The Increment Duty, of course, will be very small the first year, because it depends upon a comparison between the value of a property when it is sold and the valuation when it is made, and, the valuation not having- yet been made, we do not expect very much from the Increment Value Duty for some time. The total is ;£6oo,ooo. The Committee will bear in mind that instead of being in the second year of our Land Value Duty we are practically in the first year, for the simple reason we were not allowed to set up our machinery of valuation. Mr. Austen Chamberlain: What is the total? Mr. Lloyd George : The total revenue from taxes is ;£i4 2 >455> 000 - I come now to the non-tax revenue. The Post Office I estimate at ^"23,800,000. Mr. Austen Chamberlain : Does that include the Telegraphs and Telephones as well as the Post Office? Mr. Lloyd George : Yes, it includes all three services, and the total is ^"23,800,600. The increase we anticipate is very largely due to the excellent trade prospects of the year. The receipts from the Crown lands we put at ^480, 000 and from the Suez Canal shares and other mis- cellaneous items at ;£i, 160,000. That is down by ^109, 000, but the diminution is not attributable to the Suez Canal at all ; it represents, in fact, a sum of ^ioo.v received from the Gold Coast last year on account of an Exchequer Loan, and which, of course, is an item that will not appear in the revenue for this year. "Miscel- laneous " stands at ^"1,850,000, an increase of ^"162,000, giving a total non-tax revenue of ^"27,290,000. To this must be added the arrears brought forward from last year SECOND BUDGET 319 — ,£30,046,000 — a total revenue of £199,791,000. That leaves a surplus of £861,000. I have one word to say about that surplus and about its character before I come to consider the question of what the Government propose should be done with it. It may be said that this is a surplus due to the carrying forward from last year of £2,900,000, which is attri- butable to the raiding- of the Sinking Fund ; but I think I should point out that had the Budget passed in the ordinary course last year we would have received in re- spect of the revenue of the year £2,000,000 more from ordinary income-tax, another £1,000,000 from the super- tax, £150,000 from stamps, and £200,000 from land, or a total of £3,350,000; so that, even if this Budget were introduced now without any arrears from last year, and had things taken their ordinary normal course, instead of a surplus of £861,000 we should have had a surplus of £1,238,000, just enough to finance the insurance schemes of the Government for the first quarter of the year. Of course, if things had gone on in their normal course £2,800,000 would have been disposed of last year, which is now carried forward into this year, and we should not have had the benefit of that £2,973,000; we should have had the benefit of the increased revenue of £3,350,000, so that we should have been better off by £377,000. The question is, What are we to do with the surplus? Of course, one cannot accomplish very much with £861,000. The first thing that confronts me is the diffi- culty of the authorities who have the responsibility and charge of technical instruction. They undoubtedly have been placed in very considerable difficulty by the diminu- tion in the consumption of whisky, which has injuriously affected their revenue to the extent of £328,000 comparing 1908 with the present year. Of course, there are two factors which should be taken into account in favour of the revenue as against the local authority. The first thing is that they received the benefit of the forestalments of 1908, 320 BETTER TIMES and therefore their revenue was artificially raised. Secondly, even had we not put up the increased duty there would have been a continuous diminution in the consump- tion of whisky, and, therefore, the revenue would have been going- down, although at a smaller rate. The loss of duty, therefore, to them would not be ^328,000, but not quite ^225, 000. However, this is a very unsatisfactory position. It is unsatisfactory that the efficiency of educa- tion in this country should depend upon the quantity of alcoholic liquors consumed. The same thing - applies to policing in Scotland, and to other funds which are expended in Ireland out of these grants. Therefore I think the time has arrived for putting these things on a firmer and more permanent basis. I promised last year that part of the land duties should be allocated for this purpose. Complaint was made that that would be inadequate, as half the land duty only amounted to ^245,000, whereas the loss of revenue exceeded ^300, 000. Another complaint was it was not quite certain whether the land revenue would come in, or whether it would reach the total of ^2^5,000 in the first year. Consequently a strong desire was expressed by the local authorities first of all that whatever offer was made should be a firm offer, and that we should take the risks of the land revenue, and, not only that, but that the amount contributed should be an amount which corresponded with the loss sustained by the local authorities. We have decided to put this contri- bution on a permanent basis — on the 1908 basis — which will add ^328,000 to the amount in the ordinary course given to the local authorities in England for technical in- struction, to Scotland for policing, and to Ireland for various other purposes. The proposal that the Land Tax should be impounded for that purpose means a loss to revenue in this year of £102, and that brings the surplus down to £759, 000. What about the balance? There is the pauper disqualifi- SECOND BUDGET 321 cation. The Government are pledged to remove it, and they intend to give effect to that pledge. I do not wish to weary the Committee, but I should rather like to put to them the express terms in which this pledge was given last year. I said : — " I cannot recommend Parliament to undertake the whole financial burden of putting this transaction through. It would put too heavy a charge on the Exchequer, and there is no reason why it should fall entirely upon Imperial funds. At the present moment these paupers cost some- thing like ^2, 000, 000 to the local rates of the country. If we received a contribution from local funds which would be a substantial equivalent to the relief which would be afforded by withdrawing such a large number of paupers from the rates then something can be done to remove this crying hardship." I added that the President of the Local Government Board and I had entered into some negotiations with the local authorities with a view to effecting an arrangement which would enable us to add a contribution to the rates next year and wipe out that pauper disqualification. There are something like 270,000 old people who come under this category, and who are just as deserving and just as meri- torious as the present recipients of the old age pension, and the House of Commons will fully realise the fact that it adds a good deal to the cruel conditions of the present system that one man who has worked all his life is re- ceiving half a crown from the parish, while another man who has worked no harder, but perhaps has been able to keep himself for an extra six weeks, receives a 5s. honour- able pension. That in itself adds to the cruelty of the posi- tion. We stand by the pledge which we gave last year. We are prepared to do it with the aid of the local authori- ties, and we ask nothing from them in the way of an addi- tional charge. We only ask of them the sum by which the rates will be relieved by the removal of the paupers to the pension list, and we undertake to find the whole of the Y 322 BETTER TIMES balance, and to make a beginning from ist January next year. What that will cost it is very difficult to compute, and for this reason. I am sure those who have experience in Local Government will realise the difficulty. There are a good many persons disqualified who are not now in receipt of poor relief. It may be their wives have received something in the past. It may be that at some period of distress they themselves had resort to the Poor Law, but they are receiving nothing from the parish now, and, of course, the whole burden of this class of pensioner will fall on the Exchequer. It is only in respect of those who are now actually a charge on the guardians that the guardians will be asked to make a contribution. It is very difficult to know how many there are. It is also difficult to com- pute how many will leave the workhouses, but my own estimate is that next year this will add something like ^2,500,000 to the burdens of the Exchequer, and in the last quarter of this year it will amount to ^450,000. But I believe that in a full year it will cost something like two and a half millions to the Exchequer. I wish it were possible to undertake the whole burden. An Hon. Member : Oh ! The Chancellor of the Exchequer : My hon. Friend does not quite realise. All the paupers are taken off. I do not think he realises that. All the paupers who would but for this disqualification be able to claim a pension can apply for a pension. It is purely a question of book- keeping between the local authorities and the Exchequer. The pauper will have nothing to do with the guardians ; he goes with other pensioners to the post office to receive his 5s. It would be quite impossible for me to undertake this responsibility at this stage unless the local authority take their share of it. An Hon. Member : Why not put it in the Act? The Chancellor of the Exchequer : That is rather a futile observation. You have to find the finance for the transaction. I want hon. Members to realise what it SECOND BUDGET 323 means. Supposing the Exchequer were to undertake the whole liability, what would happen? This is not the only claim of the local authority. Only to-day as I came into the House a letter was put into my hand calling my attention to the demand from the education authorities for an increased Special Grant. I have had many applications from the county councils with respect to roads, to police, and to other services. If every penny the Exchequer can pay is to be given to the local authori- ties, in this form, you would prejudge every claim. It is of supreme importance that when we come to deal with the readjustment of local and Imperial finance — I do not believe it will be possible to postpone that question beyond this year; I think whoever stands at this box next year will have to deal with that problem, and deal with it thoroughly — it would be a fatal mistake — I cannot con- ceive anything more impolitic than that the Chancellor of the Exchequer at this moment should prejudge the whole question of these rival claims by picking out one even if he had the money. Voting it in this form is a most wasteful, extravagant method of doing it — thoroughly injudicious. Another thing. If you did it, there would not be a penny left for starting unemployment and in- validity insurance next year. Therefore we say to the local authorities, "We shall simply invite you to con- tribute to the Exchequer the amount by which you benefit — not a penny more — the amount by which the rates are relieved, and the liability for the balance will be left entirely with the Exchequer." We also say, "It is purely a pro- visional arrangement until the whole question of local and Imperial finance is reconsidered by the House of Commons." Mr. Austen Chamberlain : The Chancellor of the Exchequer estimates that the pauper disqualification will cost the Treasury in the last quarter of the present year ^450,000. How much does he anticipate that the Treasury will receive in addition for this purpose from the local authorities? 3 2 4 BETTER TIMES Mr. Lloyd George : I think the amounts by which the rates will be relieved will be something between ^300,000 and ^350, 000. It is difficult to say, it depends so much on the guardians themselves. Mr. Austen Chamberlain : Is the ^450,000 gross or net? Mr. Lloyd George : That is net. That is the amount which the Chancellor of the Exchequer must find. That leaves me with a balance of ^309,000 for con- tingencies, which is none too large. I have been asked a few questions even to-day with regard to certain expen- diture which I have to face in the course of the present year — in respect of which there is no provision in the Estimates — the expenses of the King's funeral and other expenses. I do not think I am going beyond precedent in setting aside at least ^309,000 for the purpose of meeting these inevitable contingencies. Just one word about the future. Last year in preparing the Budget we took stock not merely of existing liabilities, but of commitments in sight. We knew there would be a large increase in the Navy this year, and probably next year. I hope in the following year, when the German programme drops by 50 per cent., we shall all return to a more normal condition, and, if I may say so, a saner condition. But, at any rate, last year we budgeted not merely for the liabilities of the year, but for the increased liabilities which we saw in front of us, and which were inevitable for this year and next. We budgeted for Old Age Pensions, Labour Exchanges, Irish education, exten- sion of pensions to paupers, with a contribution from the local authorities, grants towards the development of agri- cultural and other resources of the country, the fitting of the roads for the new demands of mechanical traction, unemployment and invalidity insurance, and I expressed some hope that we should have something left for the relief of local taxation. What happened? This year we are in a position to meet all these demands except two — invalidity insurance and local taxation — and even to the SECOND BUDGET 325 extent of ^,'300,000 we have relieved local taxation. We could have proceeded with unemployment and invalidity insurance this year had the Budget gone through in the ordinary course. Next year, if the taxes fulfil their promise, and they are doing it up to the present — as a matter of fact, the new taxes, all except three, have exceeded our expecta- tions — but next year, if they come up to expecta- tions, and we return to a normal Naval expenditure, we can see our way now to start next year a great national scheme of insurance for unemployment and invalidity — a scheme on a contributory basis with a liberal State subsidy, a State subsidy twice as liberal as that given by Germany for the same purpose — which will insure 2,500,000 of workmen employed in precarious trades against the evils of unemployment and 13,000,000 of workmen and workwomen against the dis- tress that comes from sickness and premature breakdown of the breadwinner, and the setting up of sanatoria for the curing of the workmen. When these schemes are pro- vided, I think we can claim that last year's Budget, with all its accessory measures, will challenge comparison with any set of measures passed by this Parliament in the aggregate of human misery they have saved. The most satisfactory condition of all is that in spite of these increased burdens for these purposes, the excellent trade prospects which we are now enjoying prove that the nation has not been generous beyond its means. On the con- trary, it looks as though this rich and powerful nation, after the exceptional provision it has been making re- cently for the needy and unfortunate, has been blessed with greater prosperity than it has ever attained in the whole history of its commercial greatness. Last year there were five nations, five of the greatest nations in the world, that were labouring in the trough of financial distress — Germany, France, the United States of America, Russia, and the United Kingdom — they all had huge 326 BETTER TIMES deficits to meet. There is only one of them that has emerged. Let me just summarise what has been accomplished already : We have wiped out completely a deficit of ;£i 6,000,000. In readjusting taxes for that purpose we have reduced existing taxes where they were pressing heavily by ^1,200,000. We made provision for increas- ing demands on the Exchequer in respect of defence and social reform to the extent of many more millions. We paid out of current revenue charges which other countries are borrowing for. We have no naval construction loan. We are paying for our ships out of the current revenue of the year. Yes, and we are paying out of the revenue charges for which five years ago we ourselves were borrowing. Not only that. Last year we provided towards the reduction of our liabilities, even when they were suspending the Sinking Fund, ^6,691, 000. This year we have provision for reducing our liabilities — old established debt and other capital liabilities — by ^9,687,000. What country in the world can show such a record? I ask more — what fiscal system in the world could stand such a strain? It has been a real triumph for both. We have heard a good deal in the last few years of decrying and depreciating British credit, British trade, British commerce, and British securities. Let anyone who doubts examine the facts and compare ours with the financial record of other countries, and he will find that there is no need for this well-organised despon- dency; that after everything that has happened even during the last few years we are paying our own debts, meeting our own deficits, while others are lumbering along with their burdens and with their deficits from one futile financial expedient to another ; and I think he will come to the conclusion that the old country is still the soundest investment going. Richard Clay and Sons, Limited, bread street hill, e.c., and bungay, suffolk. fr j~ * -< *3L