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LIBERALISM AND THESOCIAL PROBLEM

BY

THE RIGHT HONOURABLEWINSTON SPENCER CHURCHILLM. P. 

SECOND EDITION

HODDER AND STOUGHTONLONDON MCMIX

PREFACE

These are the principal speeches I have made within the last fouryears. They have been chosen and collected with the idea of presentinga consistent and simultaneous view of the general field of Britishpolitics in an hour of fateful decision. I have exercised full freedomin compression and in verbal correction necessary to make them easierto read. Facts and figures have been, where necessary, revised, ephemeral matter eliminated, and epithets here and there reconsidered. But opinions and arguments are unaltered; they are hereby confirmed, and I press them earnestly and insistently upon the public. 

We approach what is not merely a party crisis but a nationalclimacteric. Never did a great people enter upon a period of trialand choice with more sincere and disinterested desire to know thetruth and to do justice in their generation. I believe they willsucceed. 

 WINSTON S. CHURCHILL. 

 33 ECCLESTON SQUARE. _October 26, 1909. _

CONTENTS

 PAGE

PREFACE vii

INTRODUCTION xiii

I

THE RECORD OF THE GOVERNMENT

THE CONCILIATION OF SOUTH AFRICA 3

THE TRANSVAAL CONSTITUTION 16

THE ORANGE FREE STATE CONSTITUTION 45

LIBERALISM AND SOCIALISM 67

IMPERIAL PREFERENCE--I. 85

IMPERIAL PREFERENCE--II. 106

THE HOUSE OF LORDS 124

THE DUNDEE ELECTION 147

II

SOCIAL ORGANISATION

THE MINES [EIGHT HOURS] BILL 173

UNEMPLOYMENT 189

THE SOCIAL FIELD 211

THE APPROACHING CONFLICT 225

THE ANTI-SWEATING BILL 239

LABOUR EXCHANGES AND UNEMPLOYMENT INSURANCE 253

III

THE BUDGET

THE BUDGET RESOLUTIONS 277

THE BUDGET AND NATIONAL INSURANCE 297

LAND AND INCOME TAXES IN THE BUDGET 318

THE BUDGET AND THE LORDS 344

THE SPIRIT OF THE BUDGET 357

THE BUDGET AND PROPERTY 384

THE CONSTITUTIONAL MENACE 405

INTRODUCTION

The series of speeches included in this volume ranges, in point oftime, from the earlier months of Sir Henry Campbell-Bannerman'sGovernment to the latest phase in the fortunes of Mr. Asquith'ssucceeding Ministry, and forms an argumentative defence of the basisof policy common to both Administrations. The addresses it containsdeal with nearly all the great political topics of the last fouryears--with Free Trade, Colonial Preferences, the South Africansettlement, the latest and probably the final charter of tradeunionism, the Miners' Bill, the measures for establishing Trade Boardsand Labour Exchanges, the schemes of compulsory and voluntaryassurance, and the Budget. They possess the further characteristic ofdescribing and commending these proposals as "interdependent" parts ofa large and fruitful plan of Liberal statesmanship. Of this scheme theBudget is at once the foundation and the most powerful and attractivefeature. If it prospers, the social policy for which it providesprospers too. If it fails, the policy falls to the ground. 

The material of these speeches is therefore of great importance to thefuture of democracy in this country. Let me say a word as to theirauthorship. To a friendly critic they appear to present not only rareand highly trained qualities of statement and persuasion, but a unityand sincerity of thought which give them a place above mere partydialectics. Mr. Churchill's distinguished service to Liberalism hasnot been long in point of years, but it opened with the first speecheshe ever delivered in the House of Commons. No competent observers ofpolitical activities, and of the characters and temperaments whichdirect them, can have doubted from the first moment of Mr. Churchill'sappearance on the stage where his moral and intellectual sympathieslay and whither they would lead him. It is a true and, indeed, anobvious comment on his career to say that he began where his fatherleft off--as a Democrat and a Free Trader, and that on these inheritedinstincts and tendencies he has built what both his friends and hisenemies expected him to build. Mr. Churchill came to Liberalism fromthe same fold as Gladstone, and for the same reason--that it presentedthe one field of work open to a political talent of a high stamp, andto a wide and eager outlook on the future of our social order. Liberalism and Mr. Churchill have both had good reason to congratulatethemselves on that choice, and the party which failed to draw him intoa disastrous and reactionary change of view has no reason to resentit. Before he became a Liberal Mr. Churchill had taken the broad viewsof the South African problem that his father's later opinionscommended to him, and he was properly chosen to expound to the Houseof Commons the plan of self-government that embodied them. 

If, therefore, the political groundwork of these speeches is soundLiberal principle, their meaning and purpose, taken in connection withthe Budget, and the industrial reforms for which it provides, signifya notable advance into places where the thinkers, the pioneers, themen in the advanced trenches, are accustomed to dwell. Let usacknowledge, with a sense of pleasure and relief, that this is newterritory. New, that is to say, for this country; not new to the bestorganisations of industrial society that we know of. New as a clearlyseen vision and a connected plan of British, statesmanship; not new asactual experiment in legislation, and as theory held by progressivethinkers of many schools, including some of the fathers of modernLiberal doctrine, and most of our economists. What is there in thesepages repugnant to writers of the type of John Mill, Jevons, andMarshall? How much of them would even be repelled by Cobden? In themain they preach a gospel--that of national "efficiency"--common toall reformers, and accepted by Bismarck, the modern archetype of"Empire-makers, " as necessary to the consolidation of the great Germannation. An average Australian or Canadian statesman would read themthrough with almost complete approval of every passage, save onlytheir defence of Free Trade. Nay more; the apology for property whichthey put forward--that it must be "associated in the minds of the massof the people with ideas of justice and reason"--is that on which thefriends of true conservatism build when they think of the evils ofmodern civilisation and the great and continuous efforts necessary torepair them. Who does not conclude, with Mr. Churchill, that "a morescientific, a more elaborate, a more comprehensive socialorganisation" is indispensable to our country if it is to continue itsmarch to greatness? Back or forward we must go. 

Mr. Churchill, indeed, has thought it wise to raise the specific pointat which, in the process of seeking a finer use and adaptation of thehuman material which forms society, the progressive and reformingstatesman parts company with the dogmatic Socialist. There is no needto labour a distinction which arises from the nature and theactivities of the two forces. British Liberalism is both a mentalhabit and a method of politics. Through both these characteristics itis bound to criticise a State so long as in any degree it rests on theprinciples of "Penguin Island"--"respect for the rich and contempt forthe poor, " and to modify or repeal the rights of property where theyclearly conflict with human rights. But its idealism and its practicalresponsibilities forbid it to accept the elimination of privateenterprise and the assumption by the State of all the instruments ofproduction and distribution. Socialism has great power of emotionaland even religious appeal, of which it would be wise for Liberalismto take account, and it is, on the whole, a beneficent force insociety. But as pure dogma it fits the spirit of man no more exactlythan the Shorter Catechism. As Mr. Churchill well says, both thecollectivist and the individualist principles have deep roots in humanlife, and the statesman can ignore neither. 

In the main, therefore, these speeches, with all their freshbrilliancy of colouring and treatment, hold up the good old banner ofsocial progress, which we erect against reactionist and revolutionistalike. The "old Liberal" will find the case for Free Trade, for peace, for representative government, stated as powerfully and convincinglyas he could wish. Their actual newness consists in the fact that notonly do they open up to Liberalism what it always wants--a wide domainof congenial thought and energy, but they offer it two propositionswhich it can reject only at its peril. The first is that there can andmust be a deep, sharp abridgment of the sphere of industrial lifewhich has been marked out as hopeless, or as an inevitable part of thesocial system. 

Here the new Liberalism parts with _laissez-faire_, and those whodefend it. It assumes that the State must take in hand the problemsof industrial insecurity and unemployment, and must solve them. Theissue is vital. Protection has already made its bid. It will assurethe workman what is in his mind more than cheap food--namely, securewages; it affects to give him all his life, or nearly all his life, amarket for his labour so wide and so steady that the fear of forcedidleness will almost be banished from it. The promise is false. Protection by itself has in no country annulled or seriously qualifiedunemployment. But the need to which it appeals is absolutely real; forthe modern State it is a problem of the Sphinx, neither to be shirkednor wrongly answered. And the alternative remedy offered in thesepages has already, as their author abundantly shows, succeeded even inthe very partial forms in which it has been applied. The labour marketcan be steadied and equalised over a great industrial field. Part ofits surplus can be provided for. What Mr. Churchill calls "diseasedindustries" can be cut off from the main body, or restored to somemeasure of health. The State can set up a minimum standard of healthand wage, below which it will not allow its citizens to sink; it canstep in and dispense employment and restorative force under strictlyspecified conditions, to a small body of more or less "sick" workers;it can supply security for a far greater, less dependent, and moreefficient mass of labourers, in recurring crises of accident, sickness, invalidity, and unemployment, and can do so with every hopeof enlisting in its service voluntary forces and individual virtues ofgreat value. 

This is not a problem of "relief, " it is a method of humanity, and itsaim is not merely to increase the mechanical force of the State, butto raise the average of character, of _morale_, in its citizens. Nordo these speeches represent only a batch of platform promises. Thegreat scheme of social betterment preached in these pages is alreadyembodied in half a dozen Acts of Parliament, with correspondingorganisations in the Board of Trade and elsewhere; and if the Budgetpasses, the crown can be put upon them next year or the year after bymeasures of insurance against invalidity and unemployment. 

Mr. Churchill's second proposition is the correlative of the first. How shall this imposing fabric of industrial security be reared andmade safe? The answer is, by modifying, without vitally changing, thebasis of taxation. The workman cannot be asked to pay for everything, as under Protection he must pay. In any case, he must pay forsomething. But if he is asked for too much, the sources of physicalefficiency are drained, and the main purpose of the newLiberalism--the ideal of an educated, hopeful, and vigorous people--isdestroyed. Now Liberalism, in ceasing to rely on indirect taxation asits main source of revenue, has opened up for contribution not merelythe superfluities of society, the "accumulations of profit, " as Mr. Churchill calls them, but those special forms of wealth which are"social" in origin, which depend on some monopoly of material agents, on means not of helping the community but of hindering it, not ofenriching its powers and resources, but of depleting them for privateadvantage. In other words, the State in future will increasingly askthe taxpayer not only "What have you got?" but "How did you get it?"No one contends that such an analysis can be perfect; but, on theother hand, can a community desirous of realising what Goethe calls"practical Christianity, " ignore it? And if in this process it entersthe sphere of morals, as Ruskin long ago urged it to do, as well asthe path of economic justice, is the step a wrong one? Has it notalready been taken not only in this Budget, but in its predecessor, inwhich the Prime Minister made the memorable distinction between earnedand unearned income? Those who answer these questions in the Liberalsense will find in these speeches a body of vigorous and persuasivereasoning on their side. 

It is therefore the main purpose of these speeches to show thatLiberalism has a message of the utmost consequence to our times. Theylink it afresh with the movement of life, which when it overtakesparties condemns and destroys them. They give it an immediate missionand an outlook on the wider moral domain, which belongs to no singlegeneration. This double character is vital to a Party which must notdesert the larger ways in which the spirit of man walks, while itquits at its peril the work of practical, everyday service to existingsociety. 

A word as to the literary quality of these addresses, widely varied asthey are in subject. The summit of a man's powers--his full capacityof reason, comparison, expression--are not usually reached at soearly a point in his career as that which Mr. Churchill has attained. But in directness and clearness of thought, in the power to build up apolitical theory, and present it as an impressive and convincingargument, in the force of rhetoric and the power of sympathy, readersof these addresses will find few examples of modern Englishspeech-making to compare with them. They revive the almost forgottenart of oratory, and they connect it with ideas born of our age, andspringing from its conscience and its practical needs, and, above all, essential to its happiness. 

 H. W. MASSINGHAM. 

I

THE RECORD OF THE GOVERNMENT

 PAGE

THE CONCILIATION OF SOUTH AFRICA (April 5, 1906) 3

THE TRANSVAAL CONSTITUTION (July 31, 1906) 16

THE ORANGE FREE STATE CONSTITUTION (December 17, 1906) 45

LIBERALISM AND SOCIALISM (October 11, 1906) 67

IMPERIAL PREFERENCE--I. (May 7, 1907) 85

IMPERIAL PREFERENCE--II. (July 16, 1907) 106

THE HOUSE OF LORDS (June 29, 1907) 124

THE DUNDEE ELECTION (May 14, 1908) 147

THE CONCILIATION OF SOUTH AFRICA

HOUSE OF COMMONS, _April 5, 1906_

We have travelled a long way since this Parliament assembled, in thediscussion of the Transvaal and Orange River Colony Constitutions. When the change of Government took place Mr. Lyttelton's Constitutionwas before us. That instrument provided for representative and notresponsible government. Under that Constitution the election wouldhave been held in March of this year, and the Assembly would have metin June, if the home Government had not changed. But just at the timethat the Government changed in December two questions arose--thequestion of whether or not soldiers of the British Army in garrisonshould be allowed to vote; and the question whether it would not bebetter to have sixty constituencies instead of thirty; and, as bothquestions involved necessary alterations in the Letters Patent, thetime was ripe, quite apart from any difference which the change of themen at the helm might make, for a reconsideration and review of thewhole form of the government which was to be given to the twoColonies. 

The objection that must most readily occur in considering Mr. Lyttelton's Constitution is that it was unworkable. It proposed thatthere should be from six to nine nominated Ministers in an Assembly ofthirty-five, afterwards to be increased to sixty elective members. Theposition of a Minister is one of considerable difficulty. He often hasto defend rather an awkward case. When favourable facts are wanting hehas to depend upon the nimbleness of his wits, and, when these failhim, he has to fall back upon the loyalty of his supporters. But noMinister can move very far upon his road with satisfaction or successif he has not behind him either a nominated majority or an organisedParty majority. Mr. Lyttelton's Ministers had neither. They would havebeen alone, hopelessly outnumbered in an Assembly, the greater part ofwhich was avowedly in favour of responsible and not of representativegovernment. These Ministers, with one exception, had no previousParliamentary experience and no ascertained Parliamentary ability. They would have been forced to carry their Bills and their Estimatesthrough an Assembly in the main opposed to them. All this time, whilewe should have given to these Ministers this serious duty, we shouldourselves have had to bear the whole responsibility in this countryfor everything that was done under their authority; and theirauthority could only be exerted through an Assembly which, as thingsstood, they could not control. 

The Committee can easily imagine the telegrams and the questions whichwould have been addressed from Downing Street and the House of Commonsto these Ministers on native matters, on the question of theadministration of the Chinese Ordinance, on all the numerous intricatequestions with which we are at the present moment involved in SouthAfrica. And what would have been the position of these Ministers, faced with these embarrassments in a hostile Assembly in which theyhad few friends--what possibility would they have had of maintainingthemselves in such an Assembly? Is it not certain that they would havebroken down under the strain to which they would have been exposed, that the Assembly would have been infuriated, that Parties differingfrom each other on every conceivable question, divided from each otherby race and religion and language, would have united in common hatredof the interference of the outside Power and the government ofbureaucrats. Then we should very speedily have got to the bottom ofthe hill. There would have been a swift transition. The LegislativeAssembly would have converted itself into a constituent Assembly, andit would have taken by force all that the Government now have it intheir power to concede with grace, distinction, and authority. Onthese grounds his Majesty's Government came to the conclusion that itwould be right to omit the stage of representative governmentaltogether and to go directly to the stage of responsible government. 

It is the same in politics as it is in war. When one crest line hasbeen left, it is necessary to go to the next. To halt half-way in thevalley between is to court swift and certain destruction, and themoment you have abandoned the safe position of a Crown Colonygovernment, or government with an adequate nominated majority, thereis no stopping-place whatever on which you may rest the sole of yourfoot, until you come to a responsible Legislative Assembly with anexecutive obeying that Assembly. These arguments convinced hisMajesty's Government that it would be necessary to annul the LettersPatent issued on March 31, 1905, and make an end of the LytteltonConstitution. That Constitution now passes away into the never-neverland, into a sort of chilly limbo that is reserved for the disowned orabortive political progeny of many distinguished men. 

The Government, and those who support them, may rejoice that we havebeen able to take this first most important step in our South Africanpolicy with such a very general measure of agreement, with, indeed, aconsensus of opinion which almost amounts to unanimity. Both races, every Party, every class, every section in South Africa have agreed inthe course which his Majesty's Government have adopted in abandoningrepresentative government and going at once to responsible government. That is already a very great thing, but it was not always so. Thosewho sat in the last Parliament will remember that it was not alwaysso. We remember that Lord Milner was entirely opposed to grantingresponsible government. We know that Mr. Lyttelton wrote pages andpages in the Blue Book of last year proving how futile and dangerousresponsible government would be; and the right hon. Member for WestBirmingham, who took the Government decision as a matter of course onthe first day of the present session, made a speech last session inwhich he indicated in terms of great gravity and force, that hethought it was wholly premature to grant responsible government to theTransvaal. But all that is abandoned now. I heard the right hon. Member for West Birmingham, in the name of the Party opposite, acceptthe policy of his Majesty's Government. I heard the hon. Member forBlackpool this afternoon say that he hoped that responsible governmentwould be given to the Transvaal at the earliest possible moment. Inregard to the Orange River Colony, it is quite true that the officialOpposition, so far as I gather their view, think that it should bedelayed, and should not be given at the same time as to the Transvaal;but that is not the view of the right hon. Member for West Birmingham. Speaking in the House of Commons on July 27, 1905, the right hon. Gentleman said:

"Objection has also been taken that the same government which is nowbeing given to the Transvaal has not been given to the Orange RiverColony. I think that the experiment might have been far better triedin the Orange River Colony. It is quite true that in that Colony thereis an enormous majority of the Dutch or Boer population. But they haveshown by long experience that they are most capable and moderateadministrators--under the admirable rule of President Brand they setan example to the whole of South Africa; and although I think there issome danger in this experiment, it is in the Orange River Colony thatI myself would have been inclined, in the first instance, to take therisk. "

It is true the right hon. Gentleman was speaking of representativegovernment; but it cannot be disputed that if an advance were to bemade in associating the people of the conquered Colonies with thegovernment of those Colonies, the right hon. Gentleman thought that ithad better be in the Orange River Colony first. But at any rate now itis incontestable that there is no Party in this country or in theTransvaal that opposes the grant of responsible government to theTransvaal. That is a great advance, and shows that we have been ableto take our first step with the approbation of all concerned. 

But the Opposition, having abandoned their resistance to the grant ofresponsible government, now contend that on no account must the basisof the Lyttelton Constitution be departed from. I am not convinced bythat argument. The Government are to pursue a new purpose, but toadhere to the old framework. We are to cut off the head of theLyttelton Constitution, but are to preserve the old trunk and graft anew head on it. I do not believe that any Government, approaching thisquestion from a new point of view, uncompromised and unfettered, wouldbe bound by the framework and details of the Lyttelton Constitution. It may be that that Constitution contains many excellent principles, but the Government have a right to consider things from the beginning, freshly and freely, to make their own plans in accordance with theirown ideas, and to present those plans for the acceptance of the House. 

The noble lord the Member for South Birmingham spoke of the principleof "one vote, one value, " which was embodied in the LytteltonConstitution. The principle of "one vote, one value" is in itself anorthodox and unimpeachable principle of democracy. It is a logical, numerical principle. If the attempt be made to discriminate betweenman and man because one has more children and lives in the country, itwould be arguable that we should discriminate because another man hasmore brains or more money, or lives in the town, or for any other ofthe many reasons that differentiate one human being from another. Theonly safe principle, I think, is that for electoral purposes all menare equal, and that voting power, as far as possible, should be evenlydistributed among them. 

In the Transvaal the principle of "one vote, one value" can be madeoperative only upon a basis of voters. In nearly every other countryin the world, population is the usual basis of distribution, forpopulation is the same as electorate and electorate the same aspopulation. On both bases the distribution of the constituencies wouldbe the same. There is, for instance, no part of this country which ismore married, or more celibate, or more prolific than any other part. It is only in the Transvaal, this country of afflicting dualities andof curious contradictions, where everything is twisted, disturbed, andabnormal, that there is a great disparity between the distribution ofseats on the basis of voters and on the basis of population. The highprice of provisions in the towns restricts the growth of urbanpopulation, and the dullness of the country districts appears to befavourable to the growth of large families. It is a scientific andunimpeachable fact that, if you desire to apply the principle of "onevote, one value" to the Constitution of the Transvaal, that principlecan best be attained--I am not sure that it cannot only beattained--on the basis of voters, and that is the basis Mr. Lytteltontook in the Constitution he formed. 

But Mr. Lyttelton's plan did not stop there. Side by side with thisbasis of voters, he had an artificial franchise of £100 annual value. That is a very much lower qualification in South Africa, than it wouldbe in this country, and I do not think that the franchise which Mr. Lyttelton proposed could be called an undemocratic franchise, albeitthat it was an artificial franchise, because it yielded 89, 000 votersout of a population of 300, 000, and that is a much more fertilefranchise, even after making allowance for the abnormal conditions ofa new country, than we have in this country or than is the case insome American and European States. So that I do not accuse Mr. Lyttelton of having formulated an undemocratic franchise, but takingthese two points together--the unusual basis of distribution with theapparently artificial franchise--acting and reacting, as they musthave done, one upon the other--there was sufficient ground to favourthe suspicion, at any rate, that something was intended in the natureof a dodge, in the nature of a trick, artificially to depress thebalance in one direction and to tilt it in the other. 

In dealing with nationalities, nothing is more fatal than a dodge. Wrongs will be forgiven, sufferings and losses will be forgiven orforgotten, battles will be remembered only as they recall the martialvirtues of the combatants; but anything like chicane, anything like atrick, will always rankle. The Government are concerned in SouthAfrica not only to do what is fair, but to do what South Africa willaccept as fair. They are concerned not merely to choose a balancewhich will deal evenly between the races, but one which will securethe acceptance of both races. 

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We meet unjust charges in good heart. The permanence and security ofBritish sovereignty in South Africa is not a matter of indifference tohis Majesty's Ministers. Surely no honourable Member believes that wecould wish to cheat the British race in the Transvaal of any numericalpreponderance which may properly belong to them. Equally with ourpolitical opponents we desire to see the maintenance of Britishsupremacy in South Africa. But we seek to secure it by a differentmethod. There is a profound difference between the schools of thoughtwhich exist upon South African politics in this House. We think thatBritish authority in South Africa has got to stand on two legs. Youhave laboured for ten years to make it stand on one. We on this sideknow that if British dominion is to endure in South Africa it mustendure with the assent of the Dutch, as well as of the British. Wethink that the position of the Crown in South Africa, and let me addthe position of Agents and Ministers of the Crown in South Africa, should be just as much above and remote from racial feuds, as theposition of the Crown in this country is above our Party politics. Wedo not seek to pit one race against the other in the hope of profitingfrom the quarrel. We hope to build upon the reconciliation and notupon the rivalry of races. We hope that it may be our fortune so todispose of affairs that these two valiant, strong races may dwelltogether side by side in peace and amity under the shelter of an equalflag. 

THE TRANSVAAL CONSTITUTION

HOUSE OF COMMONS, _July 31, 1906_

It is my duty this afternoon, on behalf of the Government, to laybefore the Committee the outline and character of the constitutionalsettlement which we have in contemplation in regard to the latelyannexed Colonies in South Africa. This is, I suppose, upon the whole, the most considerable business with which this new Parliament has hadto deal. But although no one will deny its importance, or undervaluethe keen emotions and anxieties which it excites on both sides of theHouse, and the solemn memories which it revives, yet I am persuadedthat there is no reason why we should be hotly, sharply, or bitterlydivided on the subject; on the contrary, I think its very importancemakes it incumbent on all who participate in the discussion--and Iwill certainly be bound by my own precept--to cultivate and observe astudious avoidance of anything likely to excite the ordinaryrecriminations and rejoinders of Party politics and partisanship. 

After all, there is no real difference of principle between the twogreat historic Parties on this question. The late Government haverepeatedly declared that it was their intention at the earliestpossible moment--laying great stress upon that phrase--to extendrepresentative and responsible institutions to the new Colonies; andbefore his Majesty's present advisers took office the only question indispute was, When? On the debate on the Address, the right hon. Memberfor West Birmingham--whose absence to-day and its cause I am quitesure are equally regretted in all parts of the House--spoke on thisquestion with his customary breadth of view and courage of thought. Hesaid: "The responsibility for this decision lies with the Governmentnow in power. They have more knowledge than we have; and if theyconsider it safe to give this large grant, and if they turn out to beright, no one will be better pleased than we. I do not think that, although important, this change should be described as a change incolonial policy, but as continuity of colonial policy. "

If, then, we are agreed upon the principle, I do not think thatserious or vital differences can arise upon the method. Because, afterall, no one can contend that it is right to extend responsiblegovernment, but not right to extend it fairly. No one can contend thatit is right to grant the forms of free institutions, and yet topreserve by some device the means of control. And so I should hopethat we may proceed in this debate without any acute divergencesbecoming revealed. 

I am in a position to-day only to announce the decision to which theGovernment have come with respect to the Transvaal. The case of theTransvaal is urgent. It is the nerve-centre of South Africa. It is thearena in which all questions of South African politics--social, moral, racial, and economic--are fought out; and this new country, so latelyreclaimed from the wilderness, with a white population of less than300, 000 souls, already reproduces in perfect miniature all those dark, tangled, and conflicting problems usually to be found in populous andold-established European States. The case of the Transvaal differsfundamentally from the case of the Orange River Colony. The latterhas been in the past, and will be again in the future, a tranquilagricultural State, pursuing under a wise and tolerant Government ahappy destiny of its own. All I have to say about the Orange RiverColony this afternoon is this--that there will be no unnecessary delayin the granting of a Constitution; and that in the granting of thatConstitution we shall be animated only by a desire to secure a fairrepresentation of all classes of inhabitants in the country, and togive effective expression to the will of the majority. 

When we came into office, we found a Constitution already prepared forthe Transvaal by the right hon. Member for St. George's, HanoverSquare. [1] That Constitution is no more. I hope the right hon. Gentleman will not suspect me of any malevolence towards hisoffspring. I would have nourished and fostered it with a tender care;but life was already extinct. It had ceased to breathe even before itwas born; but I trust the right hon. Gentleman will console himself byremembering that there are many possibilities of constitutionalsettlements lying before him in the future. After all, the AbbéSieyès, when the Constitution of 1791 was broken into pieces, was verylittle younger than the right hon. Gentleman, and he had time to makeand survive two new Constitutions. 

Frankly, what I may, for brevity's sake, call the LytteltonConstitution was utterly unworkable. It surrendered the machinery ofpower; it preserved the whole burden of responsibility andadministration. Nine official gentlemen, nearly all withoutParliamentary experience, and I daresay without Parliamentaryaptitudes, without the support of that nominated majority which I amquite convinced that the right hon. Member for West Birmingham hadalways contemplated in any scheme of representative government, andwithout the support of an organised party, were to be placed in aChamber of thirty-five elected members who possessed the power of thepurse. The Boers would either have abstained altogether fromparticipating in that Constitution, or they would have gone in onlyfor the purpose of wrecking it. The British party was split into twosections, and one section, the Responsibles, made public declarationsof their intention to bring about a constitutional deadlock byobstruction and refusing supplies, and all the other apparatus ofParliamentary discontent. In fact, the Constitution of the right hon. Gentleman seemed bound inevitably to conjure up that nightmare of allmodern politicians, government resting on consent, and consent notforthcoming. 

As I told the House in May, his Majesty's Government thought it theirduty to review the whole question. We thought it our duty and ourright to start fair, free, and untrammelled, and we have treated theLyttelton Constitution as if it had never been. One guiding principlehas animated his Majesty's Government in their policy--to make nodifference in this grant of responsible government between Boer andBriton in South Africa. We propose to extend to both races the fullestprivileges and rights of British citizenship; and we intend to make nodiscrimination in the grant of that great boon, between the men whohave fought most loyally for us and those who have resisted theBritish arms with the most desperate courage. By the Treaty ofVereeniging, in which the peace between the Dutch and British raceswas declared for ever, by Article 1 of that treaty the flower of theBoer nation and its most renowned leaders recognised the lawfulauthority of his Majesty King Edward VII, and henceforth, from thatmoment, British supremacy in South Africa stood on the surefoundations of military honour and warlike achievement. 

This decision in favour of even-handed dealing arises from noingratitude on our part towards those who have nobly sustained theBritish cause in years gone by. It involves no injustice to theBritish population of the Transvaal. We have been careful at eachpoint of this constitutional settlement to secure for the Britishevery advantage that they may justly claim. But the future of SouthAfrica, and, I will add, its permanent inclusion in the BritishEmpire, demand that the King should be equally Sovereign of bothraces, and that both races should learn to look upon this country astheir friend. 

 * * * * *

When I last spoke in this House on the question of the South AfricanConstitution, I took occasion to affirm the excellence of the generalprinciple, one vote one value. I pointed out that it was a logical andunimpeachable principle to act upon; that the only safe rule fordoing justice electorally between man and man was to assume--a largeassumption in some cases--that all men are equal and that alldiscriminations between them are unhealthy and undemocratic. Now theprinciple of one vote one value can be applied and realised in thiscountry, either upon the basis of population, or upon the basis ofvoters. It makes no difference which is selected; for there is no partof this country which is more married, or more prolific than another, and exactly the same distribution and exactly the same number ofmembers would result whether the voters or the population basis weretaken in a Redistribution Bill. But in South Africa the disparity ofconditions between the new population and the old makes a very greatdifference between the urban and the rural populations, and it isundoubtedly true that if it be desired to preserve the principle ofone vote one value, it is the voters' basis and not the populationbasis that must be taken in the Transvaal--and that is the basis whichhis Majesty's Government have determined to adopt. 

The right hon. Gentleman the Member for St. George's, Hanover Square, had proposed to establish a franchise qualification of £100 annualvalue. That is not nearly such a high property-qualification as it wouldbe in this country. I do not quarrel with the right hon. Gentleman'sConstitution on the ground that his franchise was not perfectly fair, ornot a perfectly _bonâ fide_ and generous measure of representation. Butit is undoubtedly true that a property-qualification of £100 annualvalue told more severely against the Boers than against the British, because living in the towns is so expensive that almost everybody wholives in the towns, and who is not utterly destitute, has aproperty-qualification of £100 annual value. But in the countrydistricts there are numbers of men, very poor but perfectly respectableand worthy citizens--day labourers, farmers' sons, and others--who wouldnot have that qualification, and who consequently would have beenexcluded by the property-qualification, low as it is having regard tothe conditions in South Africa. Quite apart from South African questionsand affairs, his Majesty's Government profess a strong preference forthe principle of manhood suffrage as against any property-qualification, and we have therefore determined that manhood suffrage shall be thebasis on which votes are distributed. 

It is true that in the prolonged negotiations and discussions whichhave taken place upon this question manhood suffrage has been demandedby one party and the voters' basis by the other, and there has been atacit, though quite informal agreement that the one principle shouldbalance the other. But that is not the position of his Majesty'sGovernment in regard to either of these propositions. We defend bothon their merits. We defend "one vote, one value, " and we defendmanhood suffrage, strictly on their merits as just and equitableprinciples between man and man throughout the Transvaal. We havetherefore decided that all adult males of twenty-one years of age, whohave resided in the Transvaal for six months, who do not belong to theBritish garrison--should be permitted to vote under the secrecy of theballot for the election of Members of Parliament. 

Now there is one subject to which I must refer incidentally. Thequestion of female suffrage has been brought to the notice of variousmembers of the Government on various occasions and in various ways. We have very carefully considered that matter, and we have come to theconclusion that it would not be right for us to subject a youngColony, unable to speak for itself, to the hazards of an experimentwhich we have not had the gallantry to undergo ourselves; and we shallleave that question to the new Legislature to determine. 

I come now to the question of electoral divisions. There are twoalternatives before us on this branch of the subject--equal electoralareas or the old magisterial districts. When I say "old, " I mean oldin the sense that they are existing magisterial districts. There arearguments for both of these courses. Equal electoral areas have theadvantage of being symmetrical and are capable of more strict andmathematical distribution. But the Boers have expressed a very strongdesire to have the old magisterial districts preserved. I think it israther a sentimental view on their part, because upon the whole Ithink the wastage of Boer votes will, owing to excessive plurality incertain divisions, be slightly greater in the old magisterialdistricts than in equal electoral areas. The Boers have, however, beenvery anxious that the old areas of their former Constitution, oftheir local life, should be interfered with as little as possible, andthat is a matter of serious concern to his Majesty's Government. Further, there is a great saving of precious time and expense inavoiding the extra work of new delimitation which would be necessaryif the country were to be cut up into equal mathematical electoralareas. 

The decision to adopt the old magisterial areas, which divide theTransvaal into sixteen electoral divisions, of which the Witwatersrandis only one, involves another question. How are you to subdivide thesemagisterial districts for the purpose of allocating members? Some willhave two, some three, some a number of members; and on what systemwill you allocate the members to these divisions? We have consideredthe question of proportional representation. It is the only perfectway in which minorities of every shade and view and interest canreceive effective representation. And Lord Elgin was careful toinstruct the Committee as a special point to inquire into thepossibility of adopting the system of proportional representation. TheCommittee examined many witnesses, and went most thoroughly into thisquestion. They, however, advise us that there is absolutely no supportfor such a proposal in the Transvaal, and that its adoption--I willnot say its imposition--would be unpopular and incomprehensiblethroughout the country. If a scientific or proportional representationcannot be adopted, then I say unhesitatingly that the next best way ofprotecting minorities is to go straight for single-member seats. Someof us have experience of double-barrelled seats in this country; thereused to be several three-barrelled seats. But I am convinced that ifeither of those two systems had been applied to the electoraldivisions of the Transvaal, it would only have led to the swamping ofone or two local minorities which with single-member divisions wouldhave returned just that very class of moderate, independent, Dutch orBritish Members whom we particularly desire to see represented in thenew Assembly. Therefore, with the desire of not extinguishing theselocal minorities, his Majesty's Government have decided thatsingle-member constituencies, or man against man, shall be the rule inthe Transvaal. But I should add that the subdivision of theseelectoral districts into their respective constituencies will notproceed upon hard mathematical lines, but that they will be groupedtogether in accordance with the existing field cornetcies of whichthey are composed, as that will involve as little change as possiblein the ideas of the rural population and in the existing boundaries. 

The Committee will realise that this is a question with an elusiveclimax. It is like going up a mountain. Each successive peak appearsin turn the summit, and yet there is always another pinnacle beyond. We have now settled that the Members are to be allotted tosingle-member constituencies based on the old magisterial districtsaccording to the adult male residents there. But how are we to applythat principle? How are we to find out how many adult males there arein each of the districts of the country, and so to find the quota ofelectors or proper number of Members for each division? The proverbialthree alternatives present themselves. We might take the Lytteltonvoters' list revised and supplemented. We might make a new voters'list, or we might take the census of 1904. 

 * * * * *

Lord Selborne has pointed out to us that it might take just as long atime to revise the Lyttelton voters' list as to make a new voters'list, which would occupy seven months. So that, with the necessaryinterval for the arrangements for election, ten months would elapsebefore the Transvaal would be able to possess responsibleinstitutions. I think we shall have the assent of all South Africanparties in our desire to avoid that delay. I am sorry that so muchdelay has already taken place. It was necessary that the Cabinetshould secure complete information. But to keep a country seething onthe verge of an exciting general election is very prejudicial totrade. It increases agitation and impedes the healthy process ofdevelopment. We are bound to terminate the uncertainty at the earliestpossible moment; and we have therefore determined to adopt the censusof 1904. 

Let me ask the Committee now to examine the sixteen magisterialdistricts. I think it is necessary to do so before allocating theMembers amongst them. In all the discussions in South Africa thesehave been divided into three areas--the Witwatersrand, Pretoria, andthe "Rest of the Transvaal. " Pretoria is the metropolis of theTransvaal. It has a very independent public opinion of its own; it isstrongly British, and it is rapidly increasing. It is believed thatPretoria will return three, four, or five Members of the ResponsibleParty, which is the moderate British Party, and is independent of anddetached from the Progressive Association. The "Rest of the Transvaal"consists of the old constituencies who sent Boer Members to the oldLegislature. There will, however, be one or two seats which may be wonby Progressive or Responsible British candidates, but in general "Therest of the country" will return a compact body of members of HetVolk. 

Having said that, I now come to the Rand. We must consider the Randwithout any bias or prejudice whatever. The Rand is not a town orcity, but a mining district covering 1, 600 square miles, whosepopulation of adult males practically balances the whole of the restof the country. The Rand population is not, as some people imagine, aforeign population. The great majority of it is British, and a verylarge portion of it consists of as good, honest, hard-working men asare to be found in any constituency in this country. But there arealso on the Rand a considerable proportion of Dutch. Krugersdorp Ruralis Dutch, and has always been excluded from the Rand in thediscussions that have taken place in South Africa, and included in the"Rest of the Transvaal. " But in addition to that there are the townsof Fordsburgh, which is half Dutch, and two other suburbs which alsohave a Dutch population; and it is believed that these will affordseats for members of the Responsible British Party with the support ofHet Volk. I must say further that the British community upon the Randis divided into four main political parties. There is the TransvaalProgressive Association, a great and powerful association which arisesout of the mining interest. There is the Responsible GovernmentAssociation; there is the Transvaal Political Association--a moderatebody standing between the Responsibles and the Progressives--and thereare the labour associations, which are numerous. There are three mainlabour associations, or really four--the Independent Labour Party, theTransvaal Labour League, the Trade and Labour Council of theWitwatersrand, and the Trade and Labour Council of Pretoria. Why do Ibring these facts before the Committee? I do so because I feel itnecessary to show how impossible it is to try to dismiss the problemsof this complicated community with a gesture or to solve theirdifficulties with a phrase, and how unfair it would be to deprive sucha community, in which there are at work all the counter-checks andrival forces that we see here in our own political life, of its propershare of representation. 

Applying the adult male list in the census of 1904 to the three areasI have spoken of, I should allot thirty-two Members to the Rand, sixto Pretoria, and thirty to the rest of the country; or, if you includeKrugersdorp Rural in the Rand, it would read thirty-three to the Rand, six to Pretoria, and twenty-nine to the rest of the country. Arrivedat that point, the Committee in South Africa had good hopes, notmerely of arriving at a just settlement, but of arriving at anagreement between all the parties. I am not going to afflict the Housewith a chronicle of the negotiations which took place. They werefruitless. It is enough to say that there were good hopes that if theProgressive complaint, that the adoption of the census of 1904 did notallow for the increase in the population which has taken place sincethe census was taken, could be met, a general agreement could bereached. The Boers, whose belief that we were going to treat themfairly and justly has been a pleasant feature in the whole of thesenegotiations, and will, believe me, be an inestimable factor of valuein the future history of South Africa--the Boers with reluctance andunder pressure, but guided by the Committee, with whom they were onfriendly terms, were willing to agree to a distribution which allottedone more seat to meet this increase of the population in theWitwatersrand area, and the proposal then became 33, 6, and 30, or, including Krugersdorp Rural, 34, 6, 29. The Responsible Party agreedto that. The Progressives hesitated. The great majority of themcertainly wished to come in and come to a general agreement on thoseterms. Certain leaders, however, stood out for one or two or threeseats more, and, although Lord Selborne expressed the opinion that thearrangement proposed, namely, 33, 6, 30, excluding Krugersdorp Rural, was a perfectly fair one to the British vote in the Transvaal, thoseleaders still remained unconvinced and obdurate, and all hopes of adefinite agreement fell through. 

The Committee returned to this country, bringing with them therecommendation that the Government on their own responsibility shouldfix the allocation of seats at that very point where the agreement ofone Party was still preserved and where the agreement of the other wasso very nearly won. And that is what we have decided to do. We havedecided to allocate thirty-four seats, including Krugersdorp Rural, tothe Rand, six to Pretoria, and twenty-nine to the rest of the country. Lord Selborne wishes it to be known that he concurs in thisarrangement. Now I am quite ready to admit that every Constitutionought to rest either upon symmetry or upon acceptance. Our TransvaalConstitution does not rest upon either symmetry or acceptance, but itis very near symmetry and very near acceptance, and in so far as ithas departed from symmetry it has moved towards acceptance, and isfurthermore sustained throughout by fair dealing, for I am honestlyconvinced that the addition of an extra member to the Witwatersrandareas which has been made is justified by the increase of thepopulation which has taken place since the census. 

On such a basis as this the Transvaal Assembly will be created. Itwill consist of sixty-nine members, who will receive for theirservices adequate payment. They will be elected for five years. TheSpeaker will vacate his seat after being elected. The reason for thatprovision is that the majority in this Parliament, as in the CapeParliament, with which the government is carried on, is likely to bevery small, and it would be a great hardship if the Party in powerwere to deprive itself of one of the two or three votes which, whenParties are evenly balanced, are necessary for carrying on thegovernment. It would be a great disaster if we had in the Transvaal asuccession of weak Ministries going out upon a single vote, one way orthe other. And it is found that when Parties have a very smallmajority and are forced to part with one of their Members for thepurpose of filling the chair, they do not always select the Member whois best suited to that high office, but the Member who can best bespared. 

Now let me come to the question of language. Under the Constitution ofthe right hon. Gentleman the Member for St. George's, Hanover Square, the Members of the Assembly would have been permitted to speak Dutchif they asked permission and obtained permission from the Speaker. Weare not able to lend ourselves to that condition. We are of opinionthat such a discrimination would be invidious. The recognition oftheir language is precious to a small people. I have never been ableto work myself into a passion because there are in parts of SouthAfrica Dutch people who wish to have Dutch teachers to teach Dutchchildren Dutch. I have not so poor an opinion of the English language, with its priceless literary treasures and its world-wide businessconnections, as not to believe that it can safely be exposed to theopen competition of a dialect like the _taal_. We believe that theonly sure way to preserve in the years that are to come such alanguage as the _taal_ would be to make it a proscribed language, which would be spoken by the people with deliberation and with malice, as a protest against what they regarded, and would rightly regard, asan act of intolerance. Therefore we have decided to follow the Capepractice and allow the members of the Transvaal Parliament to addressthat Assembly indifferently in Dutch or English. 

I shall be asked what will be the result of the arrangement that wehave made. I decline to speculate or prophesy on that point. It wouldbe indecent and improper. I cannot even tell in this country at thenext election how large the Liberal majority will be. Still less wouldI recommend hon. Gentlemen here to forecast the results of contests inwhich they will not be candidates. I cannot tell how the British inthe Transvaal will vote. There are a great many new questions, socialand economic, which are beginning to apply a salutary counter-irritantto old racial sores. The division between the two races, thank God, isnot quite so clear-cut as it used to be. But this I know--that asthere are undoubtedly more British voters in the Transvaal than thereare Dutch, and as these British voters have not at any point in theConstitutional Settlement been treated unfairly, it will be easilywithin their power to obtain a British majority, if they all combineto obtain it. I nourish the hope that the Government that will becalled into life by these elections will be a coalition Governmentwith some moderate leader acceptable to both parties, and a Governmentwhich embraces in its Party members of both races. Such a solutionwould be a godsend to South Africa. But whatever may be the outcome, his Majesty's Government are confident that the Ministers who may besummoned, from whatever Party they may be drawn, to whatever race theymay belong, will in no circumstances fail in their duty to the Crown. 

I should like to say also that this Parliament will be of a highrepresentative authority, and it will be the duty of whoever may becalled upon to represent Colonial business in this House to standbetween that Parliament and all unjustifiable interference fromwhatever quarters of the House it may come. 

I now approach the question of the Second Chamber. That is not a veryattractive subject. We on this side of the House are not particularlyenamoured of Second Chambers, and I do not know that our love forthese institutions will grow sweeter as the years pass by. But we haveto be governed by colonial practice; and there is no colony in theEmpire that has not a Second Chamber. The greater number of theseSecond Chambers are nominated; and I think that the quality ofnominated Second Chambers, and their use in practice, have not beenfound to be inferior to those of the elective bodies. His Majesty'sGovernment desire to secure, if they can, some special protection fornative interests which is not likely to be afforded by any electoralarrangement, I am sorry to say. We are unable however to countenancethe creation in a permanent form of a nominated Second Chamber. But inview of the position of native affairs, in view of the disadvantage ofcomplicating the elections, to which all classes in the Transvaal havebeen so long looking forward, and most particularly because of theextra delays that would be involved in the creation of a new electivebody, the Cabinet have resolved for this Parliament only, and as apurely provisional arrangement, to institute a nominated LegislativeCouncil of fifteen members. They will be nominated by the Crown, thatis to say at home, and vacancies, if any, by death or resignation, will be filled by the High Commissioner, on the advice of theresponsible Ministers. During the course of the first Parliament inthe Transvaal arrangements will be completed for the establishment ofan elective Second Chamber, and if necessary further Letters Patentwill be issued to constitute it. 

Under the Treaty of Vereeniging we undertook that no franchise shouldbe extended to natives before the grant of self-government. I am notgoing to plunge into the argument as to what word the "native" means, in its legal or technical character, because in regard to such atreaty, upon which we are relying for such grave issues, we must bebound very largely by the interpretation which the other party placesupon it; and it is undoubted that the Boers would regard it as abreach of that treaty, if the franchise were in the first instanceextended to any persons who are not white men. We may regret thatdecision. We may regret that there is no willingness in the Transvaaland Orange River Colony to make arrangements which have been found notaltogether harmful in Cape Colony. But we are bound by this treaty. Meanwhile we make certain reservations. Any legislation which imposesdisabilities on natives which are not imposed on Europeans will bereserved to the Secretary of State, and the Governor will not give hisassent before receiving the Secretary of State's decision. Legislationthat will effect the alienation of native lands will also be reserved. It is customary to make some provision in money for native interests, such as education, by reserving a certain sum for administration bythe High Commissioner or some other political or Imperial official. Wepropose to reserve Swaziland to the direct administration of the HighCommissioner, with the limiting provision that no settlement he maymake is to be less advantageous to the natives than the existingarrangement. 

On November 30, 1906, the arrangement for recruiting Chinese in Chinawill cease and determine. Our consuls will withdraw the powers theyhave delegated to the mining agents, and I earnestly trust that noBritish Government will ever renew them. A clause in the Constitutionwill provide for the abrogation of the existing Chinese LabourOrdinance after a reasonable interval. I am not yet in a position tosay what will be a reasonable interval, but time must be given to thenew Assembly to take stock of the position and to consider the labourquestion as a whole. I said just now there would be a clause withregard to differential legislation as between white persons andothers, and to this clause will be added the words: "No law will beassented to which sanctions any condition of service or residence of aservile character. " We have been invited to use the word "slavery" orthe words "semblance of slavery, " but such expressions would beneedlessly wounding, and the words we have chosen are much moreeffective, because much more precise and much more restrained, andthey point an accurate forefinger at the very evil we desire toprevent. 

I have now finished laying before the House the constitutionalsettlement, and I should like to say that our proposals areinterdependent. They must be considered as a whole; they must beaccepted or rejected as a whole. I say this in no spirit of disrespectto the Committee, because evidently it is a matter which the ExecutiveGovernment should decide on its own responsibility; and if the policywhich we declare were changed, new men would have to be found to carryout another plan. We are prepared to make this settlement in the nameof the Liberal Party. That is sufficient authority for us; but thereis a higher authority which we should earnestly desire to obtain. Imake no appeal, but I address myself particularly to the right hon. Gentlemen who sit opposite, who are long versed in public affairs, andwho will not be able all their lives to escape from a heavy SouthAfrican responsibility. They are the accepted guides of a Partywhich, though in a minority in this House, nevertheless embodiesnearly half the nation. I will ask them seriously whether they willnot pause before they commit themselves to violent or rashdenunciations of this great arrangement. I will ask them, further, whether they cannot join with us to invest the grant of a freeConstitution to the Transvaal with something of a national sanction. With all our majority we can only make it the gift of a Party; theycan make it the gift of England. And if that were so, I am quite surethat all those inestimable blessings which we confidently hope willflow from this decision, will be gained more surely and much morespeedily; and the first real step will have been taken to withdrawSouth African affairs from the arena of British party politics, inwhich they have inflicted injury on both political parties and inwhich they have suffered grievous injury themselves. I ask that thatmay be considered; but in any case we are prepared to go forwardalone, and Letters Patent will be issued in strict conformity with thesettlement I have explained this afternoon if we should continue toenjoy the support of a Parliamentary majority. 

FOOTNOTES:

[1] Mr. Lyttelton had meanwhile been elected for that Constituency. 

THE ORANGE FREE STATE CONSTITUTION

HOUSE OF COMMONS, _December 17, 1906_

Letters Patent have been issued during the last week conferring aConstitution upon the Transvaal Colony. These instruments have nowbeen for some days at the disposal of the House, and this afternoonaffords an occasion for their discussion. Other Letters Patentconferring a Constitution upon the Orange River Colony are in anadvanced state of preparation, and I think it would be generallyconvenient if I were to make a statement as to the character and scopeof that Constitution. With that view I have, by the direction of thePrime Minister, placed upon the Paper a Resolution which I now move, permitting a general discussion upon the constitutional arrangementswhich we are making both in the Transvaal and in the Orange RiverColony. Now, Sir, by the Treaty of Vereeniging, Great Britainpromised full self-government to the peoples of the two Boer Republicswhich had been conquered and annexed as the result of the war. Thisintention of giving responsible government did not arise out of theterms of peace, although it is, of course, solemnly expressed in them. It has always been the settled and successful colonial policy of thiscountry during the last fifty years to allow great liberties ofself-government to distant communities under the Crown, and noresponsible statesman, and no British Cabinet, so far as I know, evercontemplated any other solution of the South African problem but thatof full self-government. The idea which I have seen put forward insome quarters, that, in order to get full satisfaction for the expenseand the exertions to which we were put in the war, we are bound tocontinue governing those peoples according to our pleasure and againsttheir will, and that that is, as it were, an agreeable exercise whichis to be some compensation for our labours, is an idea which no doubtfinds expression in the columns of certain newspapers, but to which Ido not think any serious person ever gave any countenance. No, Sir, the ultimate object, namely, the bestowal of full self-government, was not lost sight of even in the height of the war; and as allparties were agreed that some interval for reconstruction mustnecessarily intervene, the only questions at issue between us havebeen questions of manner and questions of time. 

How much difference is there between Parties in this House as to time?It is now more than three years since Lord Milner, speaking in theInter-colonial Council, bore emphatic testimony to the faithfulnesswith which the Boers--those who had been fighting against us--hadobserved their side of the terms of peace. Lord Milner said:

"It is perfectly true that the Boer population, the men who signed theterms of peace at Vereeniging, have loyally observed those terms andhave carried them out faithfully. They profess to-day, and Iabsolutely believe them, that no idea of an armed rising or unlawfulaction is in their minds. I may say I am in constant, perhaps I shouldsay frequent communication with the men who in the war fought us somanfully and then made manful terms. We differ on many points, nodoubt, and I do not expect them to rejoice with us in what hashappened, or to feel affection for a man who, like myself, has beeninstrumental in bringing about the great change which has come overthe Constitution of the country. But I firmly believe their word whenthey come forward and meet us, and, without professing to agree in allrespects with the policy of the Government, declare that they desireto co-operate in all questions affecting the prosperity of the countryand the maintenance of public order. I accept the assurance they givein that respect, and I think it is practically impossible to put yourhands on anything done by myself or any member of the Government whichcan be regarded as a manifestation of distrust of the men who haveshown themselves, and do show themselves, men of honour. Let me say, then, I am perfectly satisfied that so great is the influence of theirleaders over the minds of the main section of the Boer population thatso long as those leaders maintain that attitude a general rising isout of the question. "

Those are the words which Lord Milner used three years ago, and I thinkthey are words which do justice to the subject and to the speaker. Butmore than two years have passed since the representations were made tothe right hon. Gentleman the Member for St. George's, Hanover Square, which induced him to confer a measure of self-government on theTransvaal. Those representations laid stress on the fact that thedesire for self-government was not put forward only by the Boers, butthat both sections of the community in the Transvaal desired to takethe control of affairs into their own hands. The right hon. Gentlemanpublished a Constitution. That Constitution conferred very great andwide powers. It conferred upon an overwhelming elected majority theabsolute power of the purse and control over legislation. But it hasalways been my submission to the House that that Constitution had aboutit no element of permanence, that it could not possibly have beenmaintained as an enduring, or even a workable settlement; and I ambound to say--I do not wish to be controversial this afternoon if I canavoid it--that, when I read the statement that this representativegovernment stage would have been a convenient educative stage in thetransition to full self-government, the whole experience of Britishcolonial policy does not justify such an assumption. The system ofrepresentative government without responsible Ministers, withoutresponsible powers, has led to endless friction and inconveniencewherever and whenever it has been employed. It has failed in Canada, ithas failed in Natal and Cape Colony. It has been condemned by almostevery high colonial authority who has studied this question. I do notthink I need quote any more conclusive authority upon that subject thanthat of Lord Durham. Lord Durham, in his celebrated Report, says ofthis particular system:

"It is difficult to understand how any English statesmen could haveimagined that representative and irresponsible government could besuccessfully combined. There seems, indeed, to be an idea that thecharacter of representative institutions ought to be thus modified inColonies; that it is an incident of colonial dependence that theofficers of government should be nominated by the Crown without anyreference to the wishes of the community whose interests are entrustedto their keeping. It has never been very clearly explained what arethe Imperial interests which require this complete nullification ofrepresentative government. But if there is such a necessity it isquite clear that a representative Government in a Colony must be amockery and a source of confusion, for those who support this systemhave never yet been able to devise or exhibit in the practical workingof colonial government any means for making so complete an abrogationof political influence palatable to the representative body. "

I contend that the right hon. Gentleman's Constitution would havebroken down in its first session, and that we should have then beenforced to concede grudgingly and in a hurry the full measure ofresponsible government which, with all due formality, and without anyprecipitancy, the Letters Patent issued last week have now conferred. But even the right hon. Gentleman himself did not intend hisConstitution to be a permanent settlement. He intended it to be atransition, and a brief transition; and in the correspondence whichpassed on this subject two or three years is sometimes named as theperiod for which such a Constitution might conveniently haveendured--two or three years, of which, let me point out to the House, nearly two years have already gone. Seeing how little difference thereis between us upon that question, I dispense with further argument asto the grant of a Transvaal Constitution, as I see the course we haveadopted does commend itself to the good sense of all Parties in thiscountry and is sustained at almost every point by almost every personconversant with South African affairs. 

It is said, however, we have heard it often said, "It may be wise togrant responsible government to the Transvaal, but it is not wise togive it to the Orange River Colony. Why should you give it to theOrange River Colony too?" I say, "Why not?" Let us make it quite clearthat the burden of proof always rests with those who deny or restrictthe issue of full Parliamentary liberties. They have to make their casegood from month to month, and from day to day. What are the reasonswhich have been advanced against the issue of a Constitution to theOrange River Colony? Various reasons have been put forward. We havebeen told, first, that the Colony is not ripe for self-government. Whenyou have very small communities of white men in distant and immenseterritories, and when those communities are emerging from a wild into amore settled condition, then it is very necessary and very desirablethat the growth of self-governing institutions should be gradual. Butthat is not the situation in the Orange River Colony. The Orange FreeState was the model small republic of the world. The honourabletraditions of the Free State are not challenged by any who take thetrouble to study its history, either in the distant past, or in theyears immediately preceding the South African war. The right hon. Gentleman the Member for West Birmingham himself, speaking in thisHouse on December 7, 1900, used language which, I think, should go farto dissipate the idle fears which we hear expressed in various quartersupon the grant of self-government to the Orange River Colony:

"We do not propose, " said the right hon. Gentleman, "that theConstitution of the Orange River Colony should necessarily be the sameas the Constitution of the Transvaal Colony, either at starting or inthe immediate future. It will be dealt with upon its own merits, dealtwith separately, and we think it possible"--I ask the House to markthis--"from the circumstances with which every one is familiar, thatan earlier beginning to greater political liberty may be made in theOrange River Colony than in the Transvaal. That is due to the factthat the Government of the Orange River Colony previous to the war wasby common consent a very good Government, and consequently, speakinggenerally, of course, and not of individuals, we shall find thereprobably the means to creating a satisfactory administration morequickly than we can do in the case of the Transvaal Colony. "

Then we have been told that responsible government presupposes Partygovernment, and that in the Orange River Colony there are not theelements of political parties, that there is not that diversity ofinterests which we see in the Transvaal, that there are not the samesharp differences between town and country, or the same astonishingcontrasts between wealth and poverty which prevail in the Transvaal. And we are told that, in order that responsible government should workproperly, and Party government should be a success, there must be theessential elements of Party conflict. I suppose we are, as a majorityin this House, admirers of the Party system of government; but I donot think that we should any of us carry our admiration of that systemso far as to say that the nation is unfit to enjoy the privilege ofmanaging its own affairs unless it can find some one to quarrel withand plenty of things to quarrel about. 

Then we are told that--"The country is prospering as it is. Why changenow? The land is tranquil, people are regaining the prosperity whichwas lost in the war. It is a pity to make a change now; now is not themoment. " I admit the premise, but I draw exactly the oppositeconclusion. It is just for that reason that we should now step forwardand, taking occasion by the hand, make an advance in the system ofgovernment. How often in the history of nations has the goldenopportunity been allowed to slip away! How often have rulers andGovernments been forced to make in foul weather the very journey whichthey have refused to make prosperously in fair weather!

Then we are told that Imperial interests will be endangered by thisgrant. I do not believe that that is so. The Boer mind moves bydefinite steps from one political conception to another. I believethey have definitely abandoned their old ambition of creating in SouthAfrica a United States independent of the British Crown, and haveaccepted that other political ideal which is represented by theDominion of Canada and the Commonwealth of Australia. At any rate, nopeople have a greater right to claim respect on the ground of theirloyal adherence to treaty engagements than the people of the OrangeRiver Colony; for every one knows that it was with a most faithfuladherence to their engagements, with almost Quixotic loyalty, thatthey followed--many of them knowing where their fortune was going tolead them, knowing full well what would be the result of theiraction--their sister State into the disastrous struggle of the SouthAfrican war. 

It is quite true that there is in existence at the present time--and Ithink Lord Milner has pointed it out--no bond of love between the menwho fought us in that war and this country. I was reading the otherday a speech by Mr. Steyn. Mr. Steyn is, of course, one of the mostclearly avowed opponents of the British power. But Mr. Steyn is quiteclear upon this point. He says there is no bond of love, and it wouldbe untruthful and dishonest on their part to say that such a bondexisted. But, he says, there is another bond; there is such a thing asa man's word of honour. "We gave our word of honour at Vereeniging, and it is our intention to abide strictly by that. " I state my opinionas to the safety of the step we propose to take, but I cannot expectthe Members opposite to set much store by that, although it is anhonest and sincere opinion. But I will quote them an authority which Iam sure they will not dismiss without respect. As soon as the righthon. Member for West Birmingham returned from South Africa, while hisexperiences in that country were fresh in his mind, while he had butnewly been conversing with men of all parties there on the spot, thescene of the struggle, he made a speech in this House which reallyought not to be overlooked by persons dealing with this question. 

"Great importance, " said the right hon. Gentleman, "seems to beattached to the view that in the interests of the two Colonies it isdesirable that a certain time, not a long time in the history of anation, but still a certain time should elapse before fullself-government is accorded. Whether a long time will elapse I reallycannot say. One thing is clear: if the population of the Transvaal andOrange River Colony, both Boer and Briton, by a large majority, desire this self-government, even although it might seem to us to bepremature, I should think it unwise to refuse it. I do not myselfbelieve there is any such danger connected with Imperial intereststhat we should hesitate to accord it on that ground. The ground onwhich I should desire that it might be delayed is really the interestof the two Colonies themselves, and not any Imperial interest. "

The peace and order of the Orange River Colony establish this case onits merits. It is a State bound to moderation by the circumstance ofits geographical position. In all its history in South Africa it hasbeen largely dependent on the goodwill of its neighbours--goodwill andfriendly relations maintained with Natal and the Transvaal, on the onehand, and with the Cape Colony on the other. It is inconceivable thata State so situated in regard to its railways and its economicposition generally should be a disturbing influence from the point ofview of the different States of South Africa. But there is anotherfact which justifies this grant, and that is the extraordinarycrimelessness in a political sense of the whole of that country. Letthe House remember that there had been three years' war, of which twoyears were fierce guerilla fighting, and that on all sides there wereto be found desperate men who had been for a long period holding theirlives in their hands and engaged on every wild and adventurous foray. Peace is agreed on, and what happens? Absolute order exists andprevails throughout the whole country from that moment. There has notbeen a single case of violent crime except, I believe, one murdercommitted by a lunatic--hardly a case of sedition--and not a singlecase of prosecution for treason of any kind. I say without hesitationthat in order to find a similar instance of swift transition fromviolent warfare to law-abiding peace you have got to look back to thedays when the army of the Parliament was reviewed and disbanded at theRestoration. 

I submit to the House that a case for conferring responsiblegovernment on the Orange River Colony is established on its merits. But that is not the whole question before us this afternoon. We havenot merely to decide whether we will give a Constitution to the OrangeRiver Colony, but whether, having given a Constitution to theTransvaal, we will deliberately withhold one from the Orange RiverColony; and that is an argument which multiplies the others which Ihave used. On what ground could we refuse that equal treatment of theOrange River Colony? There is only one ground which we could assignfor such a refusal, and that is that in the Orange River Colony thereis sure to be a Dutch majority. I cannot conceive any more fatalassertion that could be made on the part of the Imperial Governmentthan that on this specific racial ground they were forced to refuseliberties which otherwise they would concede. I say such a refusalwould be an insult to the hundreds and thousands of loyal Dutchsubjects the King has in all parts of South Africa, I say that thisinvidious treatment of the Orange River Colony would be the greatestblunder, a fitting pendant to all that long concatenation of fatalmistakes which has marked our policy in South Africa for so manyyears; and I say it would be a breach of the spirit of the terms ofpeace, because we could not say, "We promised you self-government bythe terms of peace, but what we meant by that was that before you wereto have self-government, enough persons of British origin should havearrived in the country to make quite sure you would be out-voted. "

If we were to adopt such a course we should be false to thatagreement, which is the great foundation of our policy in SouthAfrica. I hope the House will earnestly sustain the importance of thatVereeniging agreement. For the first time in many years the two whiteraces dwelling together in South Africa have found a common foundationon which they can both build, a foundation much better thanBoomplaats, or the Sand River Convention, or the Conventions of 1880and 1884, far better than Majuba Hill or the Jameson Raid. They havefound a foundation which they can both look to without any feeling ofshame--on the contrary, with feelings of equal honour, and I trustalso with feelings of mutual forgiveness. 

On those grounds, therefore, we have decided to give to the OrangeRiver Colony full responsible government. We eschew altogether theidea of treating them differently from the Transvaal, or interposingany state of limited self-government between them and the fullenjoyment of their right. There is to be a Legislature which willconsist of two Chambers, as in the Transvaal. The First Chamber willbe elected upon a voters' basis and by manhood suffrage. Theresidential qualification will be the same as in the Transvaal, sixmonths. The distribution of seats has been settled by general consent. The Committee which we sent to South Africa, and which was so verysuccessful in arriving at an adjustment between the parties in theTransvaal, has made similar investigations in the Orange River Colony, and I think we may accept with confidence their recommendation. Theyrecommend that the number of members should be thirty-eight. The oldVolksraad had sixty members, but it was found to be much too large forthe needs of the country, and on several occasions efforts were madeto reduce the representation. Those efforts were not successful, fromthe fact, which we can all appreciate, that it is very difficultindeed to get a representative body to pass a self-denying ordinanceof that character which involves the extinction of its own members. There will be separate representation of towns in the Orange RiverColony. In the Volksraad there was such a representation: there wereforty-two rural members and eighteen urban members. Out of thethirty-eight we propose that there shall be twenty-seven ruralmembers and eleven urban members; rather less than a third of therepresentation will be that of the small towns. That is a proportionwhich is justified by the precedent of the old Constitution, and alsoby the latest census. 

There will be a Second Chamber, and, as in the Transvaal, it will benominated, for the first Parliament only, by the Governor, underinstructions from the Secretary of State. It is not an hereditaryChamber; and it may be, therefore, assumed that the distribution ofParties in that Chamber will be attended by some measure ofimpartiality, and that there will be some general attempt to selectonly those persons who are really fit to exercise the importantfunctions entrusted to them. But even so protected, the Governmentfeel that in the ultimate issue in a conflict between the twoChambers, the first and representative Chamber must prevail. The otherbody may review and may suspend, but for the case of measures sent upin successive sessions from the representative Chamber on which noagreement can be reached, we have introduced the machinery whichappears in the Constitution of the Australian Commonwealth, that bothChambers shall sit together, debate together, vote together, and themajority shall decide. The whole success of that operation dependsupon the numerical proportion observed between the two Chambers. Inthe Australian Commonwealth the proportion of the First Chamber israther more than two to one; in the Transvaal the proportion will bemore than four to one, namely, sixty-five to fifteen; and in theOrange River Colony it will be thirty-eight to eleven. 

The other provisions of the Constitution will mainly follow the linesof the Transvaal Constitution. The Constitution of the Orange RiverColony will become effective as soon as possible; and I should thinkthat the new Parliament might assemble in Bloemfontein some timeduring the autumn of next year. When that work has been completed, andthe new Parliament has assembled, the main direction of South Africanaffairs in these Colonies will have passed from our hands. 

Sir, it is the earnest desire of the Government to steer colonialaffairs out of English Party politics, not only in the interest of theproper conduct of those affairs, but in order to clear the arena athome for the introduction of measures which affect the masses of thepeople. We have tried in South Africa to deal fairly between man andman, to adjust conflicting interests and overlapping claims. We havetried so far as possible to effect a broad-bottomed settlement of thequestion which should command the assent of people even beyond thegreat party groupings which support us. 

Other liberties besides their own will be enshrined in these newParliaments. The people of South Africa, and, in a special measure, the Boers, will become the trustees of freedom all over the world. Wehave tried to act with fairness and good feeling. If by any chance ourcounsels of reconciliation should come to nothing, if our policyshould end in mocking disaster, then the resulting evil would not beconfined to South Africa. Our unfortunate experience would betrumpeted forth all over the world wherever despotism wanted a goodargument for bayonets, whenever an arbitrary Government wished to denyor curtail the liberties of imprisoned nationalities. But if, on theother hand, as we hope and profoundly believe, better days are instore for South Africa, if the words of President Brand, "All shallcome right, " are at length to be fulfilled, and if the near futureshould unfold to our eves a tranquil, prosperous, consolidatedAfrikander nation under the protecting ægis of the British Crown, then, the good also will not be confined to South Africa; then thecause of the poor and the weak all over the world will have beensustained; and everywhere small peoples will get more room to breathe, and everywhere great empires will be encouraged by our example to stepforward--and it only needs a step--into the sunshine of a more gentleand a more generous age. 

LIBERALISM AND SOCIALISM

ST. ANDREW'S HALL, GLASGOW, _October 11, 1906_

(From _The Dundee Advertiser_, by permission. )

The first indispensable condition of democratic progress must be themaintenance of European peace. War is fatal to Liberalism. Liberalismis the world-wide antagonist of war. We have every reason tocongratulate ourselves upon the general aspect of the Europeansituation. The friendship which has grown up between Great Britain andFrance is a source of profound satisfaction to every serious andthinking man. The first duty of a nation is to make friends with itsnearest neighbour. Six years ago France was agitated in the throes ofthe Dreyfus case, and Great Britain was plunged in the worst and mostpainful period of the South African war; and both nations--consciousas we are of one another's infirmities--were inclined to express theiropinion about the conduct of the other in unmeasured terms, and keenantagonism resulted. What a contrast to-day! Ever since the King, whose services in the cause of international peace are regarded withaffection in every quarter of his dominions, ever since by an act ofprescience and of courage his Majesty went to Paris, the relationsbetween Great Britain and France have steadily and progressivelyimproved, and to-day we witness the inspiring spectacle of these twogreat peoples, the two most genuinely Liberal nations in the wholeworld, locked together in a league of friendship under standards ofdispassionate justice and international goodwill. But it is absurd tosuppose that the friendship which we have established with Franceshould be in any degree a menace to any other European Power, or tothe great Power of Germany. 

If the prospects on the European continent are bright and tranquil, Ithink we have reason to feel also contentment at the course ofColonial affairs. We have had unusual difficulties in the Colonies;but in spite of every effort to excite Colonial apprehension for Partypurposes against a Liberal Ministry through the instrumentality of apowerful press, the great States of the Empire have felt, and withmore assurance every day, that a Liberal Administration in DowningStreet will respect their rights and cherish their interests. 

But I am drawn to South Africa by the memory that to-night, the 11thof October, is the anniversary of the declaration of war; and I thinkit is in South Africa that we have especial reason to be satisfiedwith the course which events have taken, since we have been in anydegree responsible for their direction. One great advantage we havehad--a good foundation to build on. We have had the Treaty ofVereeniging, by which peace was established between the Dutch andBritish races in South Africa upon terms honourable to both. We havehad that treaty as our foundation--and what a mercy it is, lookingback on the past, to think that the nation followed Lord Rosebery'sadvice at Chesterfield to terminate the war by a regular peace and aregular settlement, and were not lured away, as Lord Milner would haveadvised them, when he said that the war in a certain sense would neverbe over, into a harsh policy of unconditional surrender and pitilesssubjugation. 

The work of giving these free Constitutions to the two Colonies inSouth Africa, so lately independent Republics, is in harmony with themost sagacious instincts, and the most honoured traditions of theLiberal Party. But I notice that Lord Milner, who, as we remember, wasonce a Liberal candidate, --and who now appears before us sometimes inthe guise of a silent and suffering public servant, sometimes in theaspect of an active, and even an acrid, political partisan, haranguinghis supporters and attacking his Majesty's Ministers, --Lord Milnerdescribes all this improving outlook as "the dreary days of reaction. "Progress and reaction are no doubt relative terms. What one man callsprogress another will call reaction. If you have been rapidlydescending the road to ruin and you suddenly check yourself, stop, turn back, and retrace your steps, that is reaction, and no doubt yourformer guide will have every reason to reproach you withinconsistency. And it seems to me not at all unnatural that to one whoregards three years' desolating civil war as a period of healthy andinspiring progress, a good deal of what his Majesty's Government havelately done in South Africa must appear very dreary and reactionaryindeed. 

But I would recommend you to leave this disconsolate proconsul alone. I do not agree with him when he says that South Africa is passingthrough a time of trial. South Africa is emerging from her time oftrial. The darkest period is behind her. Brighter prospects lie beforeher. The improvement upon which we are counting is not the hecticflush of a market boom, but the steady revival and accumulation ofagricultural and industrial productiveness. Soberly and solemnly menof all parties and of both races in South Africa are joining togetherto revive and to develop the prosperity of their own country. Gravedifficulties, many dangers, long exertions lie before them; but thestar of South Africa is already in the ascendant, and I lookconfidently forward to the time when it will take its place, united, federated, free, beside Canada and Australia, in the shiningconstellation of the British Empire. 

When we have dealt with subjects which lie outside our own island, letus concentrate our attention on what lies within it, because thegravest problems lie at home. I shall venture to-night to make a fewgeneral observations upon those larger trendings of events whichgovern the incidents and the accidents of the hour. The fortunes andthe interests of Liberalism and Labour are inseparably interwoven;they rise by the same forces, and in spite of similar obstacles, theyface the same enemies, they are affected by the same dangers, and thehistory of the last thirty years shows quite clearly that their powerof influencing public affairs and of commanding national attentionfluctuate together. Together they are elevated, together they aredepressed, and any Tory reaction which swept the Liberal Party out ofpower would assuredly work at least proportionate havoc in the ranksof Labour. That may not be a very palatable truth, but it is a truthnone the less. 

Labour! It is a great word. It moves the world, it comprises themillions, it combines many men in many lands in the sympathy of acommon burden. Who has the right to speak for Labour? A good manypeople arrogate to themselves the right to speak for Labour. How manypolitical Flibbertigibbets are there not running up and down the landcalling themselves the people of Great Britain, and the socialdemocracy, and the masses of the nation! But I am inclined to think, so far as any body of organised opinion can claim the right to speakfor this immense portion of the human race, it is the trade unionsthat more than any other organisation must be considered theresponsible and deputed representatives of Labour. They are the mosthighly organised part of Labour; they are the most responsible part;they are from day to day in contact with reality. They are not merevisionaries or dreamers weaving airy Utopias out of tobacco smoke. They are not political adventurers who are eager to remodel the worldby rule-of-thumb, who are proposing to make the infinite complexitiesof scientific civilisation and the multitudinous phenomena of greatcities conform to a few barbarous formulas which any moderatelyintelligent parrot could repeat in a fortnight. 

The fortunes of the trade unions are interwoven with the industriesthey serve. The more highly organised trade unions are, the moreclearly they recognise their responsibilities; the larger theirmembership, the greater their knowledge, the wider their outlook. Ofcourse, trade unions will make mistakes, like everybody else, will dofoolish things, and wrong things, and want more than they are likelyto get, just like everybody else. But the fact remains that for thirtyyears trade unions have had a charter from Parliament which up towithin a few years ago protected their funds, and gave them effectivepower to conduct a strike; and no one can say that these thirty yearswere bad years of British industry, that during these thirty years itwas impossible to develop great businesses and carry on largemanufacturing operations, because, as everybody knows perfectly well, those were good and expanding years of British trade and nationalenrichment. 

A few years ago a series of judicial decisions utterly changed thewhole character of the law regarding trade unions. It became difficultand obscure. The most skilful lawyers were unable to define it. Nocounsel knew what advice to tender to those who sought his guidance. Meanwhile if, in the conduct of a strike, any act of an agent, howeverunauthorised, transgressed the shadowy and uncertain border-linebetween what was legal and what was not, an action for damages mightbe instituted against the trade union, and if the action wassuccessful, trade union funds, accumulated penny by penny, year byyear, with which were inseparably intermingled friendly and benefitmoneys, might in a moment have been swept away. That was the state ofthe law when his Majesty's present advisers were returned to power. We have determined to give back that charter to the trade unions. TheBill is even now passing through the House of Commons. 

We are often told that there can be no progress for democracy untilthe Liberal Party has been destroyed. Let us examine that. Labour inthis country exercises a great influence upon the Government. That isnot so everywhere. It is not so, for instance, in Germany, and yet inGermany there is no Liberal Party worth speaking of. Labour there isvery highly organised, and the Liberal Party there has been destroyed. In Germany there exists exactly the condition of affairs, in a Partysense, that Mr. Keir Hardie and his friends are so anxious tointroduce here. A great social democratic party on the one hand, arebluntly and squarely face to face with a capitalist and militaryconfederation on the other. That is the issue, as it presents itselfin Germany; that is the issue, as I devoutly hope it may never presentitself here. And what is the result? In spite of the great numbers ofthe Socialist Party in Germany, in spite of the high ability of itsleaders, it has hardly any influence whatever upon the course ofpublic affairs. It has to submit to food taxes and to conscription;and I observe that Herr Bebel, the distinguished leader of that Party, at Mannheim the other day was forced to admit, and admitted with greatcandour, that there was no other country in Europe so effectivelyorganised as Germany to put down anything in the nature of a violentSocialist movement. That is rather a disquieting result to working menof having destroyed the Liberal Party. 

But we are told to wait a bit; the Socialist Party in Germany is onlythree millions. How many will there be in ten years' time? That is afair argument. I should like to say this. A great many men can jumpfour feet, but very few can jump six feet. After a certain distancethe difficulty increases progressively. It is so with the horse-powerrequired to drive great ships across the ocean; it is so with thelifting power required to raise balloons in the air. A balloon goes upquite easily for a certain distance, but after a certain distance itrefuses to go up any farther, because the air is too rarefied to floatit and sustain it. And, therefore, I would say let us examine theconcrete facts. 

In France, before the Revolution, property was divided among a veryfew people. A few thousand nobles and priests and merchants had allthe wealth in the country; twenty-five million peasants had nothing. But in modern States, such as we see around us in the world to-day, property is very widely divided. I do not say it is evenly divided. Ido not say it is fairly divided, but it is very widely divided. Especially is that true in Great Britain. Nowhere else in the world, except, perhaps, in France and the United States, are there such vastnumbers of persons who are holders of interest-bearing, profit-bearing, rent-earning property, and the whole tendency ofcivilisation and of free institutions is to an ever-increasing volumeof production and an increasingly wide diffusion of profit. Andtherein lies the essential stability of modern States. There aremillions of persons who would certainly lose by anything like ageneral overturn, and they are everywhere the strongest and bestorganised millions. And I have no hesitation in saying that anyviolent movement would infallibly encounter an overwhelmingresistance, and that any movement which was inspired by mere classprejudice, or by a desire to gain a selfish advantage, would encounterfrom the selfish power of the "haves" an effective resistance whichwould bring it to sterility and to destruction. 

And here is the conclusion to which I lead you. Something more isneeded if we are to get forward. There lies the function of theLiberal Party. Liberalism supplies at once the higher impulse and thepracticable path; it appeals to persons by sentiments of generosityand humanity; it proceeds by courses of moderation. By gradual steps, by steady effort from day to day, from year to year, Liberalismenlists hundreds of thousands upon the side of progress and populardemocratic reform whom militant Socialism would drive into violentTory reaction. That is why the Tory Party hate us. That is why they, too, direct their attacks upon the great organisation of the LiberalParty, because they know it is through the agency of Liberalism thatsociety will be able in the course of time to slide forward, almostpainlessly--for the world is changing very fast--on to a more even anda more equal foundation. That is the mission that lies beforeLiberalism. The cause of the Liberal Party is the cause of theleft-out millions; and because we believe that there is in all theworld no other instrument of equal potency and efficacy available atthe present time for the purposes of social amelioration, we are boundin duty and in honour to guard it from all attacks, whether they arisefrom violence or from reaction. 

There is no necessity to-night to plunge into a discussion of thephilosophical divergencies between Socialism and Liberalism. It is notpossible to draw a hard-and-fast line between individualism andcollectivism. You cannot draw it either in theory or in practice. Thatis where the Socialist makes a mistake. Let us not imitate thatmistake. No man can be a collectivist alone or an individualist alone. He must be both an individualist and a collectivist. The nature of manis a dual nature. The character of the organisation of human societyis dual. Man is at once a unique being and a gregarious animal. Forsome purposes he must be collectivist, for others he is, and he willfor all time remain, an individualist. Collectively we have an Armyand a Navy and a Civil Service; collectively we have a Post Office, and a police, and a Government; collectively we light our streets andsupply ourselves with water; collectively we indulge increasingly inall the necessities of communication. But we do not make lovecollectively, and the ladies do not marry us collectively, and we donot eat collectively, and we do not die collectively, and it is notcollectively that we face the sorrows and the hopes, the winnings andthe losings of this world of accident and storm. 

No view of society can possibly be complete which does not comprisewithin its scope both collective organisation and individualincentive. The whole tendency of civilisation is, however, towards themultiplication of the collective functions of society. Theever-growing complications of civilisation create for us new serviceswhich have to be undertaken by the State, and create for us anexpansion of the existing services. There is a growing feeling, whichI entirely share, against allowing those services which are in thenature of monopolies to pass into private hands. There is a prettysteady determination, which I am convinced will become effective inthe present Parliament, to intercept all future unearned incrementwhich may arise from the increase in the speculative value of theland. There will be an ever-widening area of municipal enterprise. Igo farther; I should like to see the State embark on various noveland adventurous experiments, I am delighted to see that Mr. Burns isnow interesting himself in afforestation. I am of opinion that theState should increasingly assume the position of the reserve employerof labour. I am very sorry we have not got the railways of thiscountry in our hands. We may do something better with the canals, andwe are all agreed, every one in this hall who belongs to theProgressive Party, that the State must increasingly and earnestlyconcern itself with the care of the sick and the aged, and, above all, of the children. 

I look forward to the universal establishment of minimum standards oflife and labour, and their progressive elevation as the increasingenergies of production may permit. I do not think that Liberalism inany circumstances can cut itself off from this fertile field of socialeffort, and I would recommend you not to be scared in discussing anyof these proposals, just because some old woman comes along and tellsyou they are Socialistic. If you take my advice, you will judge eachcase on its merits. Where you find that State enterprise is likely tobe ineffective, then utilise private enterprises, and do not grudgethem their profits. 

The existing organisation of society is driven by onemainspring--competitive selection. It may be a very imperfectorganisation of society, but it is all we have got between us andbarbarism. It is all we have been able to create through unnumberedcenturies of effort and sacrifice. It is the whole treasure which pastgenerations have been able to secure, and which they have been able tobequeath; and great and numerous as are the evils of the existingcondition of society in this country, the advantages and achievementsof the social system are greater still. Moreover, that system is onewhich offers an almost indefinite capacity for improvement. We mayprogressively eliminate the evils; we may progressively augment thegoods which it contains. I do not want to see impaired the vigour ofcompetition, but we can do much to mitigate the consequences offailure. We want to draw a line below which we will not allow personsto live and labour, yet above which they may compete with all thestrength of their manhood. We want to have free competition upwards;we decline to allow free competition to run downwards. We do not wantto pull down the structures of science and civilisation: but tospread a net over the abyss; and I am sure that if the vision of afair Utopia which cheers the hearts and lights the imagination of thetoiling multitudes, should ever break into reality, it will be bydevelopments through, and modifications in, and by improvements outof, the existing competitive organisation of society; and I believethat Liberalism mobilised, and active as it is to-day, will be aprincipal and indispensable factor in that noble evolution. 

I have been for nearly six years, in rather a short life, trained as asoldier, and I will use a military metaphor. There is no operation inwar more dangerous or more important than the conduct of a rear-guardaction and the extrication of a rear-guard from difficult and brokenground. In the long war which humanity wages with the elements ofnature the main body of the army has won its victory. It has moved outinto the open plain, into a pleasant camping ground by the watersprings and in the sunshine, amid fair cities and fertile fields. Butthe rear-guard is entangled in the defiles, the rear-guard is stillstruggling in mountainous country, attacked and assailed on every sideby the onslaughts of a pitiless enemy. The rear-guard is encumberedwith wounded, obstructed by all the broken vehicles that have fallenback from the main line of the march, with all the stragglers andweaklings that have fallen by the way and can struggle forward nofarther. It is to the rear-guard of the army that attention should bedirected. There is the place for the bravest soldiers and the mosttrusted generals. It is there that all the resources of militaryscience and its heaviest artillery should be employed to extricate therear-guard--not to bring the main army back from good positions whichit occupies, not to throw away the victory which it has won over thebrute forces of nature--but to bring the rear-guard in, to bring theminto the level plain, so that they too may dwell in a land of peaceand plenty. 

That is the aim of the Liberal Party, and if we work together we willdo something for its definite accomplishment. 

IMPERIAL PREFERENCE

I

IMPERIAL CONFERENCE, [2] DOWNING STREET, _May 7, 1907_

The economic aspect of Imperial Preference, both from the point ofview of trade and of finance, has already been dealt with very fullyby the Chancellor of the Exchequer and the President of the Board ofTrade, and I desire in the few observations with which I shall ventureto trespass upon the indulgence of the Conference to refer verylittle to the economic aspect, and rather to examine one or two pointsabout this question of a political, of a Parliamentary, and almost ofa diplomatic character. I want to consider for a moment what would bethe effect of a system of preferences upon the course of Parliamentarybusiness. The course of Colonial affairs in the House of Commons isnot always very smooth or very simple, and I am bound to say that, having for eighteen months been responsible for the statements onbehalf of this Department which are made to the House of Commons, Ifeel that enormous difficulties would be added to the discharge ofColonial business in the House of Commons, if we were to involveourselves in a system of reciprocal preferences. Every one will agree, from whatever part of the King's dominions he comes, or to whateverParty he belongs, that Colonial affairs suffer very much when broughtinto the arena of British Party politics. Sometimes it is one Partyand sometimes it is another which is constrained to interfere in thecourse of purely Colonial affairs, and such interferences are nearlyalways fraught with vexation and inconvenience to the Dominionsaffected. 

Now, the system of Imperial preference inevitably brings Colonialaffairs into the Parliamentary and the Party arena; and, if I may sayso, it brings them into the most unpleasant part of Parliamentary andpolitical work--that part which is concerned with raising the taxationfor each year. It is very easy to talk about preference in theabstract and in general terms, and very many pleasant things can besaid about mutual profits and the good feeling which accrues fromcommercial intercourse. But in regard to preference, as in regard toall other tariff questions, the discussion cannot possibly bepractical, unless the propositions are formulated in precise, exact, and substantial detail. Many people will avow themselves in favour ofthe principle of preference who would recoil when the schedule oftaxes was presented to their inspection. 

I, therefore, leave generalities about preference on one side. I leavealso proposals which have been discussed that we should give apreference on existing duties. It is quite clear that no preferencegiven upon existing duties could possibly be complete or satisfactory. It could at the very best only be a beginning, and Dr. Jameson and Dr. Smartt, when they urged us with so much force to make a beginning bygiving a preference on South African tobacco, have clearly recognisedand frankly stated, that that preference would in itself be of smallvalue, but that it would be welcomed by them as conceding "the largerprinciple. " Therefore, we are entitled to say, that before us at thisConference is not any question of making a small or tentativebeginning on this or that particular duty, but we have to make up ourminds upon the general principle of the application of a reciprocalpreference to the trade relations of the British Empire. 

If that be so, surely the representatives of the self-governingDominions who ask us to embark on such a system, ought to statesquarely and abruptly the duties which in their opinion would benecessary to give effect to such a proposal. The question whether rawmaterial is to be taxed is absolutely vital to any consideration ofImperial preference. Although it is no doubt a very good answer, whenthe direct question is raised, --What are your notions? to say that theColonies would leave that to the Mother Country, those who urge uponus a system of reciprocal preference are bound to face the conclusionsof their own policy, and are bound to recognise that that request, ifit is to be given effect to in any symmetrical, logical, complete, satisfactory, or even fair and just manner, must involve new taxes tous on seven or eight staple articles of consumption in this country. Ilay it down, without hesitation, that no fair system of Imperialpreference can be established which does not include taxes on bread, on meat, on that group of food-stuffs classified under the head ofdairy produce, on wool and leather, and on other necessaries ofindustry. 

If that be so, seven or eight new taxes would have to be imposed togive effect to this principle you have brought before us. Those taxeswould have to figure every year in our annual Budget. They would haveto figure in the Budget resolutions of every successive year in theHouse of Commons. There will be two opinions about each of thesetaxes; there will be those who like them and favour the principle, andwho will applaud the policy, and there will be those who dislike them. There will be the powerful interests which will be favoured and theinterests which will be hurt by their adoption. So you will have, aseach of those taxes comes up for the year, a steady volume ofParliamentary criticism directed at it. 

Now that criticism will, I imagine, flow through every channel bywhich those taxes may be assailed. It will seek to examine the value, necessarily in a canvassing spirit, of the Colonial Preferences as areturn for which these taxes are imposed. It will seek to dwell uponthe hardship to the consumers in this country of the taxes themselves. It will stray farther, I think, and it will examine the contributionswhich the self-governing Dominions make to the general cost ofImperial defence; and will contrast those contributions with a severeand an almost harsh exactitude with the great charges borne by theMother Country. 

There has just been a debate upon that subject in the House ofCommons; but the manner in which that question when raised wasreceived by the whole House, ought, I think, to give greatsatisfaction to the representatives of the self-governing Dominions. We then refused to embark upon a policy of casting-up balances asbetween the Colonies and the Mother Country, and, speaking on behalfof the Colonial Office, I said that the British Empire existed on theprinciples of a family and not on those of a syndicate. But theintroduction of those seven or eight taxes into the Budget of everyyear will force a casting-up of balances every year from a severefinancial point of view. It has been said, and will be generallyadmitted, that there is no such thing in this country as ananti-Colonial party. It does not exist. Even parties, like the IrishParty, not reconciled to the British Government, who take no part inour public ceremonial, are glad to take opportunities of showing therepresentatives of the self-governing Dominions that they welcome themhere, and desire to receive them with warmth and with cordiality. ButI cannot conceive any process better calculated to manufacture ananti-Colonial party, than this process of subjecting to the scrutinyof the House of Commons year by year, through the agency of taxation, the profit and loss account, in its narrow, financial aspect, of therelations of Great Britain and her Dominions and dependencies. 

Then this system of reciprocal preference, at its very outset, mustinvolve conflict with the principle of self-government, which is theroot of all our Colonial and Imperial policy. The whole procedure ofour Parliament arises primarily from the consideration of finance, and finance is the peg on which nearly all our discussions are hung, and from which many of them arise. That is the historic origin of agreat portion of the House of Commons procedure, and there is no moredeeply rooted maxim than the maxim of "grievances before supply. " Now, let me suppose a system of preference in operation. When the taxescame up to be voted each year, members would use those occasions fordebating Colonial questions. I can imagine that they would say: Werefuse to vote the preference tax to this or that self-governingDominion, unless or until our views, say, on native policy or someother question of internal importance to the Dominion affected havebeen met and have been accepted. At present, it is open to the Colonyaffected to reply: These matters are matters which concern us; theyare within the scope of responsible, self-governing functions, and youare not called upon to interfere. It is open for the Dominionconcerned to say that. It is also open for the representative of theColonial Office in the House of Commons to say that, too, on theirbehalf. 

But it will no longer be open, I think, for any such defence to beoffered when sums of money, or what would be regarded as equivalentto sums of money, have actually to be voted in the House of Commonsthrough the agency of these taxes for the purpose of accordingpreference to the different Dominions of the Crown, and I thinkmembers will say, "If you complain of our interference, why do youforce us to interfere? You have forced us to consider now whether wewill or will not grant a preference to this or that particularDominion for this year. We say we are not prepared to do so unless oruntil our views upon this or that particular internal question in thatDominion have been met and agreed to. " I see a fertile, frequent, andalmost inexhaustible source of friction and vexation arising from suchcauses alone. 

There is a more serious infringement, as it seems to me, upon theprinciple of self-government. The preferences which have hitherto beenaccorded to the Mother Country by the self-governing States of theBritish Empire are free preferences. They are preferences which havebeen conceded by those States, in their own interests and also in ourinterests. They are freely given, and, if they gall them, can asfreely be withdrawn; but the moment reciprocity is established and anagreement has been entered into to which both sides are parties, themoment the preferences become reciprocal, and there is a Britishpreference against the Australian or Canadian preferences, they becomenot free preferences, but what I venture to call locked preferences, and they cannot be removed except by agreement, which is not likely tobe swiftly or easily attained. 

Now I must trench for one moment upon the economic aspect. What doespreference mean? It can only mean one thing. It can only mean betterprices. It can only mean better prices for Colonial goods. I assert, without reserve, that preference can only operate through the agencyof price. All that we are told about improving and developing thecultivation of tobacco in South Africa, and calling great new areasfor wheat cultivation into existence in Australia, depends upon thestimulation of the production of those commodities, through securingto the producers larger opportunities for profit. I say that unlesspreference means better prices it will be ineffective in achieving theobjects for the sake of which it is urged. But the operation ofpreference consists, so far as we are concerned, in putting a penaltax upon foreign goods, and the object of putting that penal tax onforeign goods is to enable the Colonial supply to rise to the level ofthe foreign goods plus the tax, and by so conferring upon the Colonialproducer a greater reward, to stimulate him more abundantly to caterfor the supply of this particular market. I say, therefore, withouthesitation, that the only manner in which a trade preference canoperate is through the agency of price. If preference does not meanbetter prices it seems to me a great fraud on those who are asked tomake sacrifices to obtain it; and by "better" prices I mean higherprices--that is to say, higher prices than the goods are worth, ifsold freely in the markets of the world. 

I am quite ready to admit that the fact that you make a particularbranch of trade more profitable, induces more people to engage in thatbranch of trade. That is what I call stimulating Colonial productionthrough the agency of price. I am quite prepared to admit that a verysmall tax on staple articles would affect prices in a very smallmanner. Reference has been made to the imposition of a shilling dutyon corn, and I think it was Mr. Moor[3] who said, yesterday, thatwhen the shilling duty was imposed prices fell, and when it was takenoff prices rose. That may be quite true. I do not know that it istrue, but it may be. The imposition of such a small duty as a shillingon a commodity produced in such vast abundance as wheat, might quiteeasily be swamped or concealed by the operation of other more powerfulfactors. A week of unusual sunshine, or a night of late frost, or aring in the freights, or violent speculation, might easily swamp andcover the operation of such a small duty; but it is the opinion ofthose whose economic views I share--I cannot put it higher thanthat--that whatever circumstances may apparently conceal the effect ofthe duty on prices, the effect is there all the same, and that anyduty that is imposed upon a commodity becomes a factor in the price ofthat commodity. I should have thought that was an almost incontestableproposition. 

Here you have the two different sides of the bargain, the sellers andthe buyers, the sellers trying to get all they can, and the buyerstrying to give as little as they can. An elaborate process of what iscalled "the higgling of the market" goes on all over the world betweenexchanges linked up by telegraph, whose prices vary to a sixteenthand a thirty-second. We are invited to believe that with all thatsubtle process of calculation made from almost minute to minutethroughout the year, the imposition of a duty or demand for £1, 000, 000or £2, 000, 000 for this or that Government, placed suddenly upon thecommodity in question as a tax, makes no difference whatever to thecost to the consumer; that it is borne either by the buyer or by theseller, or provided in some magical manner. As a matter of fact, theseller endeavours to transmit the burden to the purchaser, and thepurchaser places it upon the consumer as opportunity may occur inrelation to the general market situation all over the world. 

That is by way of digression, only to show that we believe that a taxon a commodity is a factor in its price, which I thought was atolerably simple proposition. What a dangerous thing it will be, yearafter year, to associate the idea of Empire, of our kith and kinbeyond the seas, of these great, young, self-governing Dominions inwhich our people at present take so much pride, with an enhancement, however small, in the price of the necessary commodities of the lifeand the industry of Britain! It seems to me that, quite apart fromthe Parliamentary difficulty to which I have referred, which I thinkwould tend to organise and create anti-Colonial sentiment, you would, by the imposition of duties upon the necessaries of life and ofindustry, breed steadily year by year, and accumulate at the end of adecade a deep feeling of sullen hatred of the Colonies, and ofColonial affairs among those poorer people in this country to whom Mr. Lloyd George referred so eloquently yesterday, and whose case, whenstated, appeals to the sympathy of every one round this table. Thatwould be a great disaster. 

But there is another point which occurs to me, and which I wouldsubmit respectfully to the Conference in this connection. Greatfluctuations occur in the price of all commodities which are subjectto climatic influences. We have seen enormous fluctuations in meat andcereals and in food-stuffs generally from time to time in the world'smarkets. Although we buy in the markets of the whole world we observehow much the price of one year varies from that of another year. Thesefluctuations are due to causes beyond our control. We cannot controlthe causes which make the earth refuse her fruits at a certainseason, nor can we, unfortunately, at present, control the speculationwhich always arises when an unusual stringency is discovered. Comparedto these forces, the taxes which you suggest should be imposed uponfood and raw materials might, I admit, be small, but they would be theonly factor in price which would be absolutely in our control. 

If, from circumstances which we may easily imagine, any of the greatstaple articles which were the subject of preference should be drivenup in price to an unusual height, there would be a demand--and I thinkan irresistible demand--in this country that the tax should beremoved. The tax would bear all the unpopularity. People would say:"This, at any rate, we can take off, and relieve the burden which ispressing so heavily upon us. " But now see the difficulty in which weshould then be involved. At present all our taxes are under our owncontrol. An unpopular tax can be removed; if the Government will notremove it they can be turned out and another Government to remove thetax can be got from the people by election. It can be done at once. The Chancellor of the Exchequer can come down to the House and thetax can be repealed if there is a sufficiently fierce demand for it. 

But these food taxes by which you seek to bind the Empiretogether--these curious links of Empire which you are asking us toforge laboriously now--would be irremovable, and upon them woulddescend the whole weight and burden of popular anger in time ofsuffering. They would be irremovable, because fixed by treaty withself-governing Dominions scattered about all over the world, and inreturn for those duties we should have received concessions inColonial tariffs on the basis of which their industries would havegrown up tier upon tier through a long period of time. 

Although, no doubt, another Conference hastily assembled might be ableto break the shackle which would fasten us--to break that fiscal bondwhich would join us together and release us from the obligation--thatmight take a great deal of time. Many Parliaments and Governmentswould have to be consulted, and all the difficulties of distance wouldintervene to prevent a speedy relief from that deadlock. If the daycomes in this country when you have a stern demand--and anoverwhelming demand of a Parliament, backed by a vast populationsuffering acutely from high food-prices--that the taxes should beremoved, and on the other hand the Minister in charge has to get upand say that he will bring the matter before the next ColonialConference two years hence, or that he will address therepresentatives of the Australian or Canadian Governments through theagency of the Colonial Office, and that in the meanwhile nothing canbe done--when you have produced that situation, then, indeed, you willhave exposed the fabric of the British Empire to a wrench and a shockwhich it has never before received, and which any one who cares aboutit, cannot fail to hope that it may never sustain. 

Such a deadlock could not be relieved merely by goodwill on eitherside. When you begin to deflect the course of trade, you deflect it inall directions and for all time in both countries which are parties tothe bargain. Your industries in your respective Colonies would haveexposed themselves to a more severe competition from British goods intheir markets, and would have adjusted themselves on a differentbasis, in consequence. Some Colonial producers would have madesacrifices in that respect for the sake of certain advantages whichwere to be gained by other producers in their country through afavoured entry into our market. That one side of the bargain could besuddenly removed, without inflicting injustice on the other party tothe bargain, appears to me an impossibility. 

I submit that preferences, even if economically desirable, would provean element of strain and discord in the structure and system of theBritish Empire. Why, even in this Conference, what has been the onesubject on which we have differed sharply? It has been this questionof preference. It has been the one apple of discord which has beenthrown into the arena of our discussions. It is quite true we meethere with a great fund of goodwill on everybody's part, on the part ofthe Mother Country and on the part of the representatives of theself-governing Dominions--a great fund of goodwill which has beenaccumulated over a long period of time when each party to this greatconfederation has been free to pursue its own line of developmentunchecked and untrammelled by interference from the other. 

We have that to start upon, and consequently have been able to discussin a very frank and friendly manner all sorts of questions. We havewitnessed the spectacle of the British Minister in charge of the tradeof this country defending at length and in detail the fiscalsystem--the purely domestic, internal fiscal system of thiscountry--from very severe, though perfectly friendly and courteouscriticism on the part of the other self-governing communities. If thatfund of goodwill to which I have referred had been lacking, if ever aConference had been called together when there was an actualanti-colonial party in existence, when there was really a deep hatredin the minds of a large portion of the people of this country againstthe Colonies and against taxation which was imposed at the request ordesire of the Colonies, then I think it is quite possible that aConference such as this would not pass off in the smooth and friendlymanner in which this has passed off. 

You would hear recrimination and reproaches exchanged across thetable; you would hear assertions made that the representatives of thedifferent States who were parties to the Conference were not reallyrepresentatives of the true opinion of their respective populations, that the trend of opinion in the country which they professed torepresent was opposed to their policy and would shortly effect achange in the views which they put forward. You would find all theseundemocratic assertions that representatives duly elected do notreally speak in the name of their people, and you would, of course, find appeals made over the heads of the respective Governments to theparty organisations which supported them or opposed them in therespective countries from which they came. That appears to me to openup possibilities of very grave and serious dangers in the structureand fabric of the British Empire, from which I think we ought tolabour to shield it. 

My right honourable friend the Chancellor of the Exchequer has toldthe Conference with perfect truth--in fact it may have been even anunder-estimate--that if he were to propose the principle of preferencein the present House of Commons, it would be rejected by a majority ofthree to one. But even if the present Government could command amajority for the system, they would have no intention whatever ofproposing it. It is not because we are not ready to run electoralrisks that we decline to be parties to a system of preference; stillless is it because the present Government is unwilling to makesacrifices, in money or otherwise, in order to weave the Empire moreclosely together. I think a very hopeful deflection has been given toour discussion when it is suggested that we may find a more convenientline of advance by improving communications, rather than by erectingtariffs--by making roads, as it were, across the Empire, rather thanby building walls. It is because we believe the principle ofpreference is positively injurious to the British Empire, and wouldcreate, not union, but discord, that we have resisted the proposal. 

It has been a source of regret to all of us that on this subject wecannot come to an agreement. A fundamental difference of opinion oneconomics, no doubt, makes agreement impossible; but although weregret that, I do not doubt that in the future, when Imperialunification has been carried to a stage which it has not now reached, and will not, perhaps, in our time attain, people in that morefortunate age will look back to the Conference of 1907 as a date inthe history of the British Empire when one grand wrong turn wassuccessfully avoided. 

FOOTNOTES:

[2] The following, among others, were present at the Conference:

The Earl of Elgin, Secretary of State for the Colonies; Sir WilfridLaurier, Prime Minister of Canada; Sir F. W. Borden, Minister of Militiaand Defence (Canada); Mr. L. P. Brodeur, Minister of Marine andFisheries (Canada); Mr. Deakin, Prime Minister of the Commonwealth ofAustralia; Sir W. Lyne, Minister of Trade and Customs (Australia); SirJoseph Ward, Prime Minister of New Zealand; Dr. L. S. Jameson, PrimeMinister of Cape Colony; Dr. Smartt, Commissioner of Public Works (CapeColony); Sir Robert Bond, Prime Minister of Newfoundland; Mr. F. R. Moor, Prime Minister of Natal; General Botha, Prime Minister of theTransvaal; Sir J. L. Mackay, on behalf of the India Office. 

[3] The Prime Minister of Natal. 

IMPERIAL PREFERENCE

II

HOUSE OF COMMONS, _July 15, 1907_

 Mr. Lyttelton had moved the following vote of censure:

 "That this House regrets that his Majesty's Government have declined the invitation unanimously preferred by the Prime Ministers of the self-governing Colonies, to consider favourably any form of Colonial Preference or any measures for closer commercial union of the Empire on a preferential basis. " (Mr. Lyttelton. )

 This was met on behalf of the Government by the following Amendment:

 "To leave out all after the word 'that' and add the words 'In the opinion of this House, the permanent unity of the British Empire will not be secured through a system of preferential duties based upon the protective taxation of food. '" (Mr. Soares)

 The vote of censure was rejected, and the Amendment carried by 404 to 111. 

A vote of censure is a very serious thing. When it is moved with greatformality on behalf of the official Opposition, it is intended alwaysto raise a plain and decisive issue. I must, however, observe that ofall the votes of censure which have been proposed in recent times inthis House, the one we are now discussing is surely the most curious. The last Government was broken up three years ago on this veryquestion of Imperial preference. After the Government had been brokenup, a continuous debate proceeded in the country for two years and ahalf, and it was terminated by the general election. This Parliamentis the result of that election, and there is not a single gentleman onthis Ministerial Bench who is not pledged, in the most specific terms, not to grant a preferential tariff to the Colonies. Now, because wehave kept that promise, because we are opposed to preferentialtariffs, because we have declined to grant preferential tariffs, andbecause we have done what all along we declared we were going to do, and were returned to do, we are made the object of this vote ofcensure. 

It may be said, "We do not blame you for keeping your promise, but formaking the pledge. " But what did the Leader of the Opposition promise?He promised most emphatically before the election that if he were inpower as Prime Minister when this Colonial Conference took place, hewould not grant preference to the Colonies. On many occasions theright hon. Gentleman said that not one, but two elections would benecessary before he would be entitled to take that tremendous step. Ihave the right hon. Gentleman's words here. Speaking at Manchester inJanuary 1905, the right hon. Gentleman said: "If that scheme werecarried out, I do not see that we could be called on to decide thecolonial aspect of this question until not only one, but two electionshave passed. " Yet the right hon. Gentleman is prepared, I presume, tojoin in a vote of censure on his Majesty's Government for not grantingthat preference which he himself was prohibited from granting by themost precise and particular engagement. 

Is it a vote of censure on the Government at all? Is it not really avote of censure on the general election? Is it not a cry of petulantvexation at the natural, ordinary, long-expected sequence of events?

The right hon. Gentleman[4] who moved the Resolution made a very mildand conciliatory speech. But he confined himself to generalities. Heavoided anything like a statement of concrete proposals which hethinks the Government ought to adopt. Those who take part in thiscontroversy nowadays avoid any statement of the concrete proposalsthat would follow if their view were adopted. We are told what asplendid thing preference is, what noble results it would achieve, what inexpressible happiness and joy it would bring to all parts ofthe Empire and to all parts of the earth, what wealth would becreated, how the Exchequer would gain, and how the food of the peoplewould cheapen in price. But, though the Government is blamed for notacting on these suggestions, we are never told what is the schedule oftaxes which it is proposed to introduce to give effect to thesesplendid and glittering aspirations. 

It is perfectly impossible to discuss colonial preference apart fromthe schedule of duties on which it is to be based. It is idle toattempt to discuss it without a definite proposal as to the subjectsof taxation and as to the degree to which those different subjects areto be taxed. And the right hon. Gentleman the Member for WestBirmingham, when he dealt with this question, felt that in commonfairness he must be precise and definite. We know what he proposed inthe way of taxation on corn, meat, fruit, and dairy produce. What wewant to know is this. Is that tariff before us now? Do the Oppositionstand by the right hon. Member for West Birmingham, or do they abandonhim? That is what the House and the Government want to know--and thatis what the Colonies want to know. It is indispensable to thediscussion of this question that there should be a clear statementfrom the Leader of the Opposition whether or not we are to regard theGlasgow preferential tariff of the right hon. Member for WestBirmingham as still current as a practical policy. 

Then the House has been told that the Government might have given apreference on dutiable articles. Such a preference would introduceinto our fiscal system an entirely new, and, as the Government think, the wholly vicious feature of discriminating between one class ofproducers and another. The whole basis of our financial and fiscalpolicy is, that it draws no distinction whatever between differentclasses of producers, whether they reside here or abroad, whether theylive in foreign countries or in our Colonies. I am quite prepared tostate that proposition in its simplest form. That is the fundamentalprinciple of our fiscal system, and there is no discrimination. Wehave but one measure to give to those who trade with us--the justmeasure of equality, and there can be no better measure than that. 

We are charged with pedantry in dealing with the Colonial Conference, through not making some concession upon existing dutiable articles. The Colonial representatives, when they asked for a preference on wineand tobacco, did not ask for it because it was of value to them byitself. They knew well that the operation of such a preference must beunfair and unequal. They knew well that Canada, which has the mostsolid claims upon us for a preferential recognition, would receive nobenefit from such a preference. But the Colonial representatives ofSouth Africa asked for a preference on wine and tobacco in order that, as they avowed with candour, we should "concede the principle. " Thatis a perfectly proper proceeding on their part; it is the natural wayof advancing the views which they hold, because it would lead up tothe larger principle and the larger policy. 

But the Government are opposed in this case to "the larger policy. "The Government sit now on these Benches because they are opposed to itas a Government and as a Party. It is one of the fundamentalconditions of our existence that we are opposed to such a policy. How, then, by any process of argument, can the Government be censured fornot making an exception which must inevitably have led to and wouldavowedly have been used for the breaking of the great rule to whichthey have committed themselves?

It is a dangerous thing in this controversy, with the ugly rush ofvested interests always lying in the wake of the Protectionistmovement to be considered, to make even verbal concessions. Some timeago I made a speech in which I said that there was no objection to theextension of inter-colonial preference. By this I meant the reductionof duties between Colonies which have already a discriminating tariff;and it seemed to me in such a case that there is a net reduction ofduty to the good. I do not see any objection to that, because underthe most-favoured-nation principle we gain any advantage which isgained by either party to the transaction. In any case, the sumsinvolved in inter-colonial preference at the present time areextremely small, and, however that might be, the matter is one whichis wholly outside our control, because we have no authority over theColonies in this respect, and we may just as well look pleasant aboutit and accord a sympathetic attitude to such a process. 

Yes; but let those who reproach us with pedantry and with not showinga sympathetic desire to meet the Colonies listen to this: When such astatement is made by a Minister, is it accepted as a desire on thepart of the Government to extend sympathetic treatment to theColonies? Not at all. It is taken as an admission, and used for thepurpose of trying to pretend that the Government have abandoned theprinciple of their opposition to the larger question of Imperialpreference. If, although we think them unsatisfactory, we were, out ofcomplaisance, to accord the small preferences suggested upon dutiablearticles, we should be told in a minute that we had given up everylogical foothold against preference, and that nothing prevented usimposing a tax on bread and meat except our inability to follow thedrift of our own arguments. 

I have referred to preference, but there is another proposal. Theright hon. Gentleman the Member for St. George's, Hanover Square, putforward a proposal earlier in the year, and it was renewed in aslightly different form by Mr. Deakin[5] at the Conference. Theproposal was to impose a 1 per cent. _ad valorem_ surtax on allforeign merchandise coming into the ports of the British Empire. Thatis the proposal which has been put forward as the least objectionableform of the preferential proposals, and it has been said of it that itwas the least objectionable because it gave no loophole for thecorruption which may spring up in the wake of the other proposals. 

Let me ask the House to examine this proposal for a moment. Has anyserious, civilised Government--I ask for information--ever been to thepains and trouble of erecting round their coasts a tariff, with allits complications, with the need of exacting certificates of origin onevery class of goods, with the need of demanding strict assessment ofall commodities brought to their shores--has any nation ever erectedthe vast and complicated network which would be involved in such aduty, simply for the paltry purpose of imposing a duty of 1 per cent. ?I say there is no argument and no reason for such a course, and theonly argument which could justify it is the argument used by Dr. Smartt at the Colonial Conference when he said (page 514 of the BlueBook), "The foreigner pays, and we do not. " Mr. Deakin felt the forceof the objection which would be entertained in this country tointroducing such a tariff as the right hon. Gentleman has proposed, simply for fiscal purposes, and he proceeded to say that GreatBritain, if she was a party to such a bargain, should be permitted toraise the money in her own way, and to contribute her proportion tothe common fund. That was a great concession to the self-government ofthe Mother Country. 

There is no doubt a great difference between subventions andpreferences. A subvention may be raised by a perfectly orthodox fiscalprocess. No more money is taken from the taxpayer than is required. The whole yield of the tax by which the subvention may be raisedcertainly goes to the Exchequer, and when the subvention is paid tothe foreign or Colonial Government, it does not go, as a preferencewould go, to benefit particular interests in the Colony, but it goesto the Government of the Colony for the general purposes of State, andnot for private advantage on either side. Therefore it seems to methat the method of subvention is on all grounds to be preferred to themethod of preference. 

It is of course necessary, however, in examining a question ofsubvention to look at it on its merits. This proposal of 1 per cent. Put forward by Mr. Deakin carried the support of the officialspokesman of the Opposition. Let us look at it on its merits. Lookfirst at the proportions on which this new fund was to be subscribed. Canada was "to dedicate"--that was the expression used by Mr. Deakin--£400, 000, New Zealand £20, 000, Newfoundland £6, 000, CapeColony £40, 000, Natal £26, 000, Great Britain £4, 500, 000, andAustralia--the proposing body--what was she to "dedicate" to thisfund? No more than £100, 000 a year, or one forty-fifth part of thecontribution which was to be made by this country. And for what objectwas this fund to be accumulated? It is hard enough for the Chancellorof the Exchequer to raise the money to carry on so great anestablishment as this country is forced necessarily to maintain. Buthere is a proposal to raise no less than £4, 500, 000 of extra taxation. For what objects? For objects not specified, for objects not yetdiscovered, for objects which could not be stated by those who madethe proposal. The right hon. Gentleman said that there was to be ameeting of the representatives of the different Colonies in thedifferent great cities of the Empire--one different great city eachyear for seven years, excluding London, where there was to be nomeeting, and they were to search for a method of spending this money. Such plans have only to be stated to fall to pieces. 

The House will see that the real essential fallacy of theprotectionist proposal is the idea that taxation is a good thing initself, that it should be imposed for the fun of the thing, and then, having done it for amusement, we should go round afterwards and lookfor attractive methods of expenditure in order to give support to theproject. These are the actual proposals made to us at the ColonialConference. These are the sort of proposals in respect of which weare, forsooth, to be censured because we have not found it possible inthe name of the Government of this country to give our assent tothem. 

I will submit a proposition to the House as a broad, general rule. Idaresay the Leader of the Opposition may rake up some ingenious, hardcase in conflict with it; but as a broad, general rule I believe itwill be found true to say that there is no power in a Government toimpose indirect taxation outside the limits of its territorialsovereignty. Although I am quite ready to admit that, by sudden andunexpected alterations of the tariff, temporary advantage might begained, and some share of the wealth of other people and othercountries might be netted for this or that set of traders within yourown border, in the long run the whole yield of any tax, export orimport, will come home to the people of that country by whom it isimposed. It will come home plus the whole cost of collecting the tax, and plus, further, the inconvenience and burden of the network oftaxation which is needed. It will come home to them, if they beconsumers, in the quantity, quality, or price of the articles theyconsume, and, if exporters, in the profit, convenience, or reservepower of the business which they conduct. 

There is no parity between the sacrifices demanded of the MotherCountry and the proposals of preference made by the various Colonies. To them it is merely a fresh application of their existing fiscalsystem. To us it is a fiscal revolution. To them it is a mererewriting of their schedules to give an increased measure ofprotection to their home producers. To us it is a tax on food, and, asI assert again and again, upon raw material, and thus upon all theindustries of these islands. If the Conference has established onething clearly it is this, that none of the great self-governingColonies of the British Empire are prepared to give us effectiveaccess to their own markets in competition with their home producers. That was established with absolute clearness; and even if they wereprepared to give us effective access to their home markets, I submitto the House that, having regard to the great preponderance of ourforeign trade as against our Colonial trade, it would not be worth ourwhile to purchase the concession which they would then offer at thecost of disturbing and dislocating the whole area of our trade. Therefore, we propose to adhere, and are prepared if necessary to becensured for adhering to our general financial system, which isgoverned by the rule that there should be no taxation except forrevenue, and based on the commercial principle of the equal treatmentof all nations, and the most-favoured-nation treatment from thosenations in return. 

Important as are the economical arguments against a preferentialpolicy, they are in my opinion less grave than the politicaldisadvantages. On other occasions I have addressed the House on thegrave danger and detriment to the working of our Colonial system whichmust follow the intermingling of the affairs of the British Empire inthe party politics and financial politics of this country. Toestablish a preferential system with the Colonies involvingdifferential duties upon food is to make the bond of Imperial unitydependent year after year upon the weather and the crops. 

And there is even a more unstable foundation for Imperial unity. Doesit never occur to right hon. Gentlemen opposite that this solutionwhich they offer of the problem of Imperial unity places the Empirenot on a national, but on a purely party basis, and upon a basisrepudiated by at least half the nation? Some day it may be that theywill return triumphant from a general election. As party politiciansthey may rejoice, yet I think a wise statesman would try to win forthe British Empire, our Colonial relations, the same sort of position, high above the struggle of Parties, which is now so happily occupiedby the Crown and the Courts of Justice, which in less degree, thoughin an increasing degree, is coming to be occupied by the fightingServices. Whatever advantages from a Party point of view, or from thepoint of view of gratifying Colonial opinion, may be gained by foodpreferences, they would be very small compared with the enormous boonof keeping the field of Colonial politics separate from the social andeconomic issues on which Parties in this country are so fiercelydivided. 

It is possible to take a still wider view of this question. If I quotethe right hon. Gentleman the Member for West Birmingham, let me assurethe House that I do not do so for the purpose of making any pettycharge of inconsistency, but because the words which I am going toread are wise and true words, and stand the test of time. When theright hon. Gentleman spoke at Manchester in 1897, not in the distantdays before the great Home Rule split, but when he was already aMinister in the Unionist Government, and had been Secretary of Statefor the Colonies for nearly two years, he used these words, of thehighest wisdom: "Anything in the direction of an Imperial CommercialLeague would weaken the Empire internally and excite the permanenthostility of the whole world. It would check the free imports of thefood of the people. It is impracticable; but if it were practicable, and done in the name of the Empire, it would make the Empire odious tothe working people, it would combine the whole world against us, andit would be a cause of irritation and menace. Our free commerce makesfor the peace of the world. "

Let us then seek to impress year after year upon the British Empire aninclusive and not an exclusive character. We who sit on this side ofthe House, who look forward to larger brotherhoods and more exactstandards of social justice, value and cherish the British Empirebecause it represents more than any other similar organisation hasever represented, the peaceful co-operation of all sorts of men in allsorts of countries, and because we think it is, in that respect atleast, a model of what we hope the whole world will some day become. The House has to-night a considerable and important opportunity. If inrejecting this vote of censure, which is so ill-conceived and solittle deserved, we choose to adopt the Amendment, we shall havewritten upon the records of Parliament a profound political truth, which will not, I think, soon be challenged, and which, I believe, will never be overthrown. 

FOOTNOTES:

[4] Mr Lyttelton. 

[5] Prime Minister of the Australian Commonwealth. 

THE HOUSE OF LORDS

HOUSE OF COMMONS, _June 29, 1907_

 On June 24, Sir Henry Campbell-Bannerman had moved:

 "That, in order to give effect to the will of the people as expressed by their elected representatives, it is necessary that the power of the other House to alter or reject Bills passed by this House should be so restricted by law as to secure that within the limits of a single Parliament the final decision of the Commons shall prevail. "

 This was carried after three days' debate by 315 to 100. 

I will not venture at any length into an abstract constitutionaldiscussion upon this Motion, because, after all, we have an extremelypractical issue before us. It seems to me that this great questionmust be looked at from three points of view. There is the issuebetween the two Houses; there is the issue between the two politicalParties; and then there is the national issue. The quarrel which isnow open between the House of Lords and the House of Commons arisesfrom two events--the general election of 1906, and the rejection ofthe measures of the new Liberal Government, culminating in thedestruction of the Education Bill by the House of Lords at the end ofthat year. Either of these events is memorable in itself, but placedin juxtaposition and considered together they have a multipliedsignificance. The general election of 1906 was the most vehementexpression of public opinion which this generation has known; and thatexpression of public will was countered in the December of the sameyear by the most arbitrary and uncompromising assertion ofaristocratic privilege upon record. 

Let the House think of it. The process of the election of Members ofParliament is extremely elaborate. The candidates go about the countryfor two or three weeks saying all they have to say for themselves inthe different constituencies which they are contesting; at the end ofthat exhaustive discussion there is an elaborate process of voting;the returns are counted with the most scrupulous care; and as theresult 670 Members, representing 6, 000, 000 of voters and many more whotake a deep interest in public affairs but have no votes, arereturned to the House of Commons in the name of the people of GreatBritain and Ireland. The new Parliament assembles. Scarcely anyquestion at the election had been more a test question, so far as thesupporters of the Government are concerned, than the question of theamendment of the education system of the country. A Bill dealing witheducation is brought forward as the principal measure of the firstsession of the new Parliament. Weeks are occupied in its discussion. It represents the fulfilment of the election pledges of every Memberwho supported it. The Bill is passed by perhaps the largest majoritythat ever sent a Bill from this House to another place. 

Nor was it a revolutionary Bill, to turn the world upside down andinside out; on the contrary, it was a Bill which, if vitiated in anyrespect, was vitiated by the element of compromise. Immenseconcessions were made in it, and rightly, I think, to conscientiousand agitated minorities. It was a Bill which so moderate andconsistent a statesman as the Duke of Devonshire, of whose ill-healththe House learns with grave concern, urged the House of Lords to passinto law. 

Sir, the Leader of the Opposition told us the other day that it wasthe habit of his Majesty's Government to introduce Bills which they didnot mean to pass. No one--not even the right hon. Gentlemanhimself--can say that the Government have not earnestly desired to passthe Education Bill. Every concession that could be conceived was made, but to what purpose? After the House of Commons had humbled itselfbefore the House of Lords, after we had gone to the extreme limit ofconcession which self-respect, which a proper sense of the dignity ofthis House, and a due observance of the pledges of the Liberal Partypermitted, the House of Lords curtly, bluntly, uncharitably, andharshly flung the Bill out in our faces mutilated and destroyed. I donot wish to import an element of heat into this discussion, but Irespectfully submit to the Conservative Party that that act on the partof the House of Lords places them in a new position--a new position inthe sense that never before had their old position been taken up sonakedly, so brazenly, and so uncompromisingly. 

It is true that we have an excuse put before us with much suavity oflanguage in these debates--we are told that the House of Lords seeksto interpret the will of the people, and it is explained that by "thewill of the people, " what is meant is the persistent, sub-consciouswill, as opposed to any articulate expression of it. The right hon. Gentleman who leads the Opposition told us that what he meant by thepersistent will was the will of the people expressed continuously overa period of thirty years. That is what he called "democracy properlyunderstood. "

Having regard to that part of the question which concerns the issuebetween the two Houses, we repudiate emphatically the claim of theother House to what the French call _faire l'ange_--to "play theangel, " to know better than the people themselves what the peoplewant, to have a greater authority to speak in the name of the peoplethan their representatives sent to Parliament by the elaborate processI have described. To dispute the authority of a newly electedParliament is something very like an incitement to violence on thepart of the other House. The noble Lord[6] laughs; but we are anxiousto convince him and his friends that we are in earnest. We go throughall the processes which the Constitution prescribes, we produce anenormous majority, and we express the opinion of that majority, butstill the noble Lord and other noble Lords, less intelligent, but moreremote, tell us that they are not convinced. What steps do theysuggest that we should take in order to bring home to them theearnestness of our plea? What steps do they suggest that the peopleshould take in order to assert their wishes? I hold entirely by what Isaid that to dispute the authority of an elected body fresh from itsconstituents is a deliberate incitement to the adoption of lawless andunconstitutional methods. The assertion which the House of Lords madeat the end of last year is an intolerable assertion. I believe thecountry is altogether unprepared for it; and I wonder it was thoughtworth while to risk an institution which has lasted so many centuries, in the very skirmish line of Party warfare. 

I am aware there is a special reason for the temerity of the House ofLords. It is not a very complimentary reason to the Members or theleaders of the late Government, but it is argued that the ConservativeParty cannot be worse than they are. No matter what they do, nor howthey are hated or reprobated by the country, the Conservative Partycannot possibly occupy a more humiliating and unpleasant position thanthey did after the last two years of the late Administration. Consequently, having reached the low-water mark of political fortune, they think they can afford to be a little reckless, and that at thevery worst they will be returned in their present numericalproportions. 

That is a very natural explanation of their action; but if we for ourpart were to accept the assertion lately made by the House ofLords--an assertion which is the furthest point to which aristocraticprivilege has attained in modern times--that assertion itself wouldbecome only the starting-point for a whole new series of precedentsand of constitutional retrogressions; and worse than that, if by anychance, having raised this issue, we were to be defeated upon it--ifhaving placed this Resolution on the records of the House we were tofail to give effect to it, or were to suffer an electoral reverse asthe conclusion of it--then good-bye to the power of the House ofCommons. All that long process of advance in democratic institutionswhich has accompanied the growth of the power of the House of Commons, and which has also been attended by an expansion of the circles ofcomfort and culture among the people of this country--all that longprocess which has gone steadily onward for 200 years, and which hasalmost exclusively occupied the politics of the nineteenthcentury--will have reached its culmination. It will have come incontact with that barrier of which we have heard so much in thisdebate. The tide will have turned, and in the recoil of the watersthey will gradually leave exposed again, altered no doubt by theconditions of the age, all the old assertions of aristocratic andplutocratic domination which we had fondly hoped had been engulfed forever. 

Hon. Gentlemen opposite would be well advised to treat this Resolutionseriously. This Parliament is still young, but there are some thingsat which they have laughed which have already become accomplishedfacts, I could not have during the past eighteen months listened totheir taunts about the permanence of Chinese labour without reflectingnow with satisfaction that Chinese labour is going. Yes, and otherpeople may follow. We are only at the beginning of this struggle. Weare not necessarily committed to every detail of the proposal; we areopening the first lines for a great siege, we have to sap up to theadvanced parallels, to establish our batteries, and at no distant dateopen our bombardment. It may be many months before we shall be able todiscern where there is a practicable breach; but the assault will comein due time. 

The right hon. Gentleman opposite[7] said he welcomed this contestwith great confidence. I wonder if the Conservative Party realise, touse an expressive vulgarism, what they are "letting themselves in for"when this question comes to be fought out on every platform in everyconstituency in the country? They will not have to defend an idealSecond Chamber; they will not be able to confine themselves to airygeneralities about a bicameral system and its advantages; they willhave to defend _this_ Second Chamber as it is--one-sided, hereditary, unpurged, unrepresentative, irresponsible, absentee. They will have todefend it with all its anomalies, all its absurdities, and all itspersonal bias--with all its achievements that have darkened the pagesof the history of England. And let me say that weighty constitutionalauthorities have not considered that the policy on which we haveembarked in moving this Resolution is unreasonable. Mr. Bagehot saysof the House of Lords:

"It may lose its veto as the Crown has lost its veto. If most of itsmembers neglect their duties, if all its members continue to be of oneclass, and that not quite the best; if its doors are shut againstgenius that cannot found a family, and ability which has not £5, 000 ayear, its power will be less year by year, and at last be gone, as somuch kingly power is gone--no one knows how. "

What is the position of the Conservative Party when they attempt todefend the House of Lords? They are always telling us to imitate theColonies; they are always telling us that we ought to adopt the fiscalsystems and other methods employed in the self-governing Colonies; butwhat is their unprejudiced view of the relations which are heldbetween the two Chambers under the bicameral system in the Coloniesand as established by their own Australian Commonwealth Act in thelast Parliament? By that Act they have given power to the LowerChamber to over-ride the Upper Chamber in certain circumstances. TheCommonwealth Act says that when the Chambers differ they shall meettogether, and that the majority shall decide, measures being taken, however, that the numbers of the Upper Chamber shall not be such asto swamp the opinion of the Lower Chamber. Imitating them, andfollowing in their footsteps, we have adopted such a plan in theTransvaal and Orange River Colony Constitutions. 

The Leader of the Opposition asked us yesterday whether the people arenot often wrong, and he proceeded characteristically to suggest thathe always considered them wrong when they voted against him. I am notprepared to take such a rough-and-ready test of the opinion and of themental processes of the British democracy as that. I should hesitateto say that when the people pronounce against a particular measure orParty they have not pretty good reasons for doing so. I am not at allconvinced that in 1900 the electors were wrong in saying that the warshould be finished--by those who made it. Even in the last election Icould, I daresay, find some few reasons to justify the decision whichthe people then took; and if we should be so unfortunate in the futureas to lose that measure of public confidence now abundantly given tous, then I shall not be too sure that it will not be our own fault. Certain am I that we could not take any step more likely to forfeitthe confidence of the people of England, than to continue in officeafter we have lost the power to pass effective legislation. 

I will retort the question of the Leader of the Opposition by anotherquestion. Has the House of Lords ever been right? Has it ever beenright in any of the great settled controversies which are now beyondthe reach of Party argument? Was it right in delaying Catholicemancipation and the removal of Jewish disabilities? Was it right indriving this country to the verge of revolution in its effort todefeat the passage of reform? Was it right in resisting the BallotBill? Was it right in the almost innumerable efforts it made toprevent this House dealing with the purity of its own electoralmachinery? Was it right in endeavouring to prevent the abolition ofpurchase in the Army? Was it right in 1880, when it rejected theCompensation for Disturbance Bill? I defy the Party opposite toproduce a single instance of a settled controversy in which the Houseof Lords was right. 

[An honourable Member: What about Home Rule?]

I expected that interruption. That is not a settled controversy. It isa matter which lies in the future. The cases I have mentioned arecases where we have carried the law into effect and have seen theresults, and found that they have been good. 

Let me remind the House that, but for a lucky accident, but for thefact that Letters Patent can be issued by the Crown and do not requirethe statutory assent of Parliament, it would very likely have beenimpossible for this Government to have made the constitutionalsettlement in the Transvaal and in the Orange River Colony, becausethe Constitutions would probably have been mutilated or cast out bythe House of Lords, and the Executive Government would have founditself responsible for carrying out the government of Colonies onlines of which it wholly disapproved, and after their own policy hadbeen rejected. 

I proceed to inquire on what principle the House of Lords deals withLiberal measures. The right hon. Member for Dover[8] by an imaginativeeffort assures us that they occupy the position of the umpire. Arethey even a sieve, a strainer, to stop legislation if it should revealan undue or undesirable degree of Radicalism or Socialism? Are theythe complementary critic--the critic who sees all the things which theordinary man does not see? No one can maintain it. The attitude whichthe House of Lords adopts towards Liberal measures is purely tactical. When they returned to their "gilded Chamber" after the generalelection they found on the Woolsack and on the Treasury Bench a LordChancellor and a Government with which they were not familiar. Whentheir eyes fell upon those objects, there was a light in them whichmeant one thing--murder; murder tempered, no doubt, by thoseprudential considerations which always restrain persons from actswhich are contrary to the general feeling of the society in which theylive. But their attitude towards the present Government has from thebeginning been to select the best and most convenient opportunity ofhumiliating and discrediting them, and finally of banishing them frompower. 

Examine, in contrast with that of the Education Bill, their treatmentof the Trades Disputes Bill. Lord Halsbury described that Bill asoutrageous and tyrannous, and said it contained a section moredisgraceful than any that appeared in any English Statute. On whatground then did they pass that Bill, if it was not the ground ofpolitical opportunism and partisanship? What safeguard can such aSecond Chamber be to the commercial interests of this country? Is itnot clear that they are prepared to sacrifice, if necessary, what theyconsider to be the true interests of the country in order to secure anadvantage for the political Party whose obedient henchmen they are?The Trades Disputes Bill was a very inconvenient measure for theConservative Party to leave open, because so long as it was left opena great mass of democratic opinion was directed against them. And soit was passed. On the other hand, the Education Bill was veryinconvenient for the Liberal Party to leave open, because they aresupported by Catholics and Nonconformists, and to bring in anEducation Bill to satisfy those two extremes is not to solve aproblem, but to solve a double acrostic. So that Bill was not passed. Upon a measure which it would be inconvenient to the Liberal Party toleave open the House of Lords rejected all compromise. Upon a measurewhich it would be inconvenient for the Conservative Party to leaveopen, they submitted at once--their action being irrespective ofmerits in either case. That, I suppose, is what the Leader of theOpposition called "an averaging machinery. "

I press these points in order to justify me in making this statement, that the House of Lords, as it at present exists and acts, is not anational institution, but a Party dodge, an apparatus and instrumentat the disposal of one political faction; and it is used in the mostunscrupulous manner to injure and humiliate the opposite faction. WhenConservative Members go about the country defending a Second Chamber, let them remember that this is the kind of Second Chamber they have todefend, and when they defend the veto let them remember that it is aveto used, not for national purposes, but for the grossest purposes ofunscrupulous political partisanship. 

I have dealt with the issues between Houses, and I come to thatbetween Parties. Great changes in a community are very oftenunperceived; the focus of reality moves from one institution in theState to another, and almost imperceptibly. Sometimes the forms ofinstitutions remain almost the same in all ceremonial aspects, and yetthere will be one institution which under pretentious forms is onlythe husk of reality, and another which under a humble name is in factthe operative pivot of the social system. Constitutional writers havemuch to say about the estates of the realm, and a great deal to sayabout their relation to each other, and to the Sovereign. All that isfound to be treated upon at length. But they say very little about theParty system. And, after all, the Party system is the dominant fact inour experience. Nothing is more striking in the last twenty-five yearsthan the growth and expansion of Party organisation, and the way inwhich millions of people and their votes have been woven into itsscope. 

There are two great characteristics about the Party institutions ofthis country: the equipoise between them, and their almost incredibledurability. We have only to look at the general elections of 1900 and1906. I do not suppose any circumstances could be more depressing fora political Party than the circumstances in which the Liberal Partyfought the election in 1900, except the circumstances in which theConservative Party fought the election of 1906. At those twoelections, what was the salient fact? The great mass of the voters ofeach political Party stood firm by the standard of their Party, andalthough there was an immense movement of public opinion, thatmovement was actually effected by the actual transference of acomparatively small number of votes. 

When Parties are thus evenly balanced, to place such a weapon as theHouse of Lords in the hands of one of the Parties is to doom the otherto destruction. I do not speak only from the Party point of view, although it explains the earnestness with which we approach thisquestion. It is a matter of life and death to Liberalism andRadicalism. It is a question of our life or the abolition of the vetoof the House of Lords. But look at it from a national point of view. Think of its injury to the smooth working of a Liberal Government. Atthe present time a Liberal Government, however powerful, cannot lookfar ahead, cannot impart design into its operations, because it knowsthat if at any moment its vigour falls below a certain point anotherbody, over which it has no control, is ready to strike it a blow toits most serious injury. 

It comes to this, that no matter how great the majority by which aLiberal Government is supported, it is unable to pass any legislationunless it can procure the agreement of its political opponents. Observe the position in which the present Executive Government isconsequently placed. Take only the question of passive resistance. Theaction of the House of Lords at the present time forces the ExecutiveGovernment to lock up in prison men with whose action they entirelysympathise and whose grievance they have faithfully promised toredress. Such a position is intolerable. Indeed, I am sure that ifright hon. Gentlemen opposite would only utilise that valuable gift ofputting themselves in imagination in the position of others, theywould see that no self-respecting men could continue to occupy such aposition except with the object of putting an end to it for ever. 

Much might be said for and against the two-Party system. But no onecan doubt that it adds to the stability and cohesion of the State. Thealternation of Parties in power, like the rotation of crops, hasbeneficial results. Each of the two Parties has services to render inthe development of the national life; and the succession of new anddifferent points of view is a real benefit to the country. A choicebetween responsible Ministries is a great strength to the Crown. Theadvantage of such a system cannot be denied. Would not the ending ofsuch a system involve a much greater disturbance than to amend thefunctions of the House of Lords? Is there not a much greater cataclysminvolved in the breakdown of the constitutional organisation ofdemocracy--for that is the issue which is placed before us--than wouldbe involved in the mere curtailment of the legislative veto which hasbeen given to another place?

I ask the House what does such a safeguard as the House of Lords mean?Is it a safeguard at all? Enormous powers are already possessed by theHouse of Commons. It has finance under its control, it has theExecutive Government; the control of foreign affairs and the greatpatronage of the State are all in the power of the House of Commons atthe present time. And if you are to proceed on the basis that thepeople of this country will elect a mad House of Commons, and that themad House of Commons will be represented by a mad Executive, the Houseof Lords is no guarantee against any excesses which such a House ofCommons or such an Executive might have in contemplation. Whatever youmay wish or desire, you will be forced to trust the people in allthose vital and fundamental elements of government which in everyState have always been held to involve the practical stability of thecommunity. 

Is the House of Lords even a security for property? Why, the greatestweapon which a democracy possesses against property is the power oftaxation, and the power of taxation is wholly under the control ofthis House. If this House chooses, for instance, to suspend payment tothe Sinking Fund, and to utilise the money for any public purpose orfor any social purpose, the House of Lords could not interfere. If theHouse of Commons chose to double taxation on the wealthy classes, theHouse of Lords could not interfere in any respect. Understand I am notadvocating these measures; what I am endeavouring to show to the Houseis that there is no real safeguard in the House of Lords even inregard to a movement against property. 

But surely there are other securities upon which the stability ofsociety depends. In the ever-increasing complexities of socialproblems, in the restrictions which are imposed from day to day withincreasing force on the action of individuals, above all, in thedissemination of property among many classes of the population, liethe real elements of stability on which our modern society depends. There are to-day, unlike in former ages, actually millions of peoplewho possess not merely inert property, but who possess rent-earning, profit-bearing property; and the danger with which we are confrontednow is not at all whether we shall go too fast. No, the danger is thatabout three-fourths of the people of this country should move on in acomfortable manner into an easy life, which, with all its ups anddowns, is not uncheered by fortune, while the remainder of the peopleshall be left to rot and fester in the slums of our cities, or witherin the deserted and abandoned hamlets of our rural districts. 

That is the danger with which we are confronted at the present moment, and it invests with a deep and real significance the issue which isdrawn between the two Parties to-night. It is quite true that thereare rich Members of the Liberal Party, and there are poor men who aresupporters of the Conservative Party; but in the main the lines ofdifference between the two Parties are social and economic--in themain the lines of difference are increasingly becoming the lines ofcleavage between the rich and the poor. Let that reflection be withus in the struggle which we are now undertaking, and in which we shallwithout pause press forward, confident of this, that, if we persevere, we shall wrest from the hands of privilege and wealth the evil, ugly, and sinister weapon of the Peers' veto, which they have used so ill solong. 

FOOTNOTES:

[6] Lord Robert Cecil. 

[7] Mr. Balfour. 

[8] Mr. Wyndham. 

THE DUNDEE ELECTION

KINNAIRD HALL, DUNDEE, _May 14, 1908_

A new Government has come into being under a Prime Minister who, likehis predecessor, is tied to Scotland by strong and intimate bonds. Give him a fair chance. Give the Government which he has brought intobeing the opportunity of handling the great machinery of State. Beassured that, if you do, they will employ it for the greatest good ofthe greatest number. I am well satisfied at what has taken place sinceI have been in Dundee. I see a great concentration of forcesthroughout the constituency. I see the opportunity of retrieving, andmore than retrieving, the injury which has been done to the cause ofprogress and reform by elections in other parts of our island. 

Ah, but, a very sad thing has happened; an awful thing hashappened--the Liberal Party has gone in for Home Rule. _The Scotsman_is shocked, _The Times_ is speechless, and takes three columns toexpress its speechlessness; _The Spectator_, that staid old weekly, has wobbled back to where it never should have wobbled from; theUlster Unionists declare that the Government has forfeited all theconfidence that they never had in it, and thousands of people whonever under any circumstances voted Liberal before are saying thatunder no circumstances will they ever vote Liberal again. And I amsupposed to be responsible for this revolution in our policy. 

Why, the statements I have made on the Irish question are the logicaland inevitable consequence of the Resolution which was passed by theHouse of Commons, in which every member of the Government voted, whichwas carried by an enormous majority--more than 200--a month ago[9]--aResolution which, after explaining the plain and lamentable evilswhich can be traced to the existing system of government in Ireland, affirmed that the remedy for those evils would be found in arepresentative body with an Executive responsible to it, subject tothe supreme authority of the Imperial Parliament. 

The Irish question at the present time occupies a vastly differentposition to what it did in the year 1886. Ever since 1880 theattention of Parliament has been devoted constantly to Ireland, andthe attention of Parliament, when devoted constantly to one object, israrely fruitless. The twenty-five years that have passed have seengreat changes in Ireland. We have seen a great scheme of localgovernment, which Lord Salisbury said would be more disastrous thanHome Rule itself, actually put into force. We have seen the scheme ofland purchase, which in the year 1886 did more to injure the Home RuleBill than anything else, actually carried, not indeed to a completeconclusion, but carried into practical effect by a UnionistAdministration. These are great events; and their consequences, Ithink, ought to encourage us to move forward, and not to move back. They have produced results in Ireland which are beneficent, and theIrish question no longer presents itself in the tragic guise of theearly eighties. They have produced an effect on Great Britain too. Allover our country people have seen Bills which they were toldbeforehand would be ruinous to the unity and integrity of the UnitedKingdom--Land Bills and Local Government Bills--passed into law; andso far from the dire consequences which were apprehended from thesemeasures, they have found--you here have found--that great good hasresulted from that legislation. Many people are encouraged by what hastaken place to make a step forward in the future; and I think if weneed to look for any further encouragement, we should find it in thegreat and undisputed triumph which, under the mercy of Heaven, hasattended our policy in South Africa, and has resulted in bringing intothe circle of the British Empire a strong and martial race, whichmight easily have been estranged for ever. 

The Irish polity finds its fellow nowhere in the world. It is aGovernment responsible neither to King nor people. It is not ademocratic Government, nor an autocratic Government, nor even anoligarchical Government. It is a Government hag-ridden by forty-oneadministrative Boards, whose functions overlap one another andsometimes conflict with one another. Some are fed with money from theConsolidated Fund, some are supplied by vote of the House of Commons, some are supplied from savings from the Irish Development grant. Someof these Boards are under the Viceroy, some under the Chief Secretary, some under Treasury control, and some are under no control at all. Theadministration resulting from that system is costly, inefficient, unhandy beyond all description: a mighty staff of officials andpolice; a people desperately poor; taxation which rises automaticallywith every increase in the expenditure of this vast and wealthyisland; and a population which dwindles tragically year by year. Addto all this a loyalist caste, capable and well-organised, who aretaught generation after generation to look for support not to theirown countrymen, but to external force derived from across the sea. There exists in effect in Ireland at the present time almost exactlythe same situation which would have grown up in South Africa, if wehad not had the wit and the nerve to prevent it. Take the whole ofthis situation as I have described it, thrust it into the arena ofBritish politics to be the centre of contending factions, and thepanorama of Irish government is complete. 

With these facts before us, upon the authority of men like LordDunraven, Sir Joseph West-Ridgeway, Sir Antony MacDonnell, LordDudley, and others who have served the Crown in Ireland--is itwonderful that we should refuse to turn our eyes away from the visionof that other Ireland, free to control her own destiny in all thatproperly concerns herself, free to devote the native genius of herpeople to the purposes of her own self-culture--the vision of thatother Ireland which Mr. Gladstone had reserved as the culminatingachievement of his long and glorious career? Is it wonderful that weshould refuse to turn our eyes away from that? No; I say that thedesire and the aim of making a national settlement with Ireland onlines which would enable the people of that country to manage theirown purely local affairs, is not an aim that can be separated from thegeneral march of the Liberal army. If I come forward on your platformhere at Dundee it is on the clear understanding that I do not precludemyself from trying to reconcile Ireland to England on a basis offreedom and justice. 

I said just now that this was an important election. Yes, the effectupon his Majesty's Government and upon the Liberal Party for good orill from this election cannot fail to be far-reaching. There arestrong forces against us. Do not underrate the growing strength of theTory reaction now in progress in many of the constituencies inEngland. I say it earnestly to those who are members of the LabourParty here to-day--do not underrate the storm which is gathering overyour heads as well as ours. I am not afraid of the forces which areagainst us. With your support we shall overwhelm them--with yoursupport we shall bear them down. Ah, but we must have that support. 

It is not the enemy in front that I fear, but the division which toooften makes itself manifest in progressive ranks--it is that division, that dispersion of forces, that internecine struggle in the moments ofgreat emergency, in the moments when the issue hangs in thebalance--it is that which, I fear, may weaken our efforts and mayperhaps deprive us of success otherwise within our grasp. 

There are cross-currents in this election. You cannot be unconsciousof that. They flow this way and that way, and they disturb the clearissue which we should like to establish between the general body ofthose whose desire it is to move forward, and those who wish to revertto the old and barbarous prejudices and contentions of the past--tothe fiscal systems and to the methods of government andadministration, and to the Jingo foreign policies across the seas, from which we hoped we had shaken ourselves clear. 

I want to-night to speak about these cross-currents; and let me firstsay a word about Socialism. There are a great many Socialists whosecharacters and whose views I have much respect for--men some of whom Iknow well, and whose friendship I enjoy. A good many of thosegentlemen who have delightful, rosy views of a noble and brilliantfuture for the world, are so remote from hard facts of daily life andof ordinary politics that I am not very sure that they will bring anyuseful or effective influence to bear upon the immediate course ofevents. To the revolutionary Socialist, whether dreamer or politician, I do not appeal as the Liberal candidate for Dundee. I recognise thatthey are perfectly right in voting against me and voting against theLiberals, because Liberalism is not Socialism, and never will be. There is a great gulf fixed. It is not only a gulf of method, it is agulf of principle. There are many steps we have to take which ourSocialist opponents or friends, whichever they like to callthemselves, will have to take with us; but there are immensedifferences of principle and of political philosophy between our viewsand their views. 

Liberalism has its own history and its own tradition. Socialism hasits own formulas and aims. Socialism seeks to pull down wealth;Liberalism seeks to raise up poverty. Socialism would destroy privateinterests; Liberalism would preserve private interests in the only wayin which they can be safely and justly preserved, namely, byreconciling them with public right. Socialism would kill enterprise;Liberalism would rescue enterprise from the trammels of privilege andpreference. Socialism assails the pre-eminence of the individual;Liberalism seeks, and shall seek more in the future, to build up aminimum standard for the mass. Socialism exalts the rule; Liberalismexalts the man. Socialism attacks capital; Liberalism attacksmonopoly. 

These are the great distinctions which I draw, and which, I think, youwill agree I am right in drawing at this election between ourrespective policies and moods. Don't think that Liberalism is a faiththat is played out; that it is a creed to which there is no expandingfuture. As long as the world rolls round, Liberalism will have itspart to play--grand, beneficent, and ameliorating--in relation to menand States. 

The truth lies in these matters, as it always lies in difficultmatters, midway between extreme formulas. It is in the nice adjustmentof the respective ideas of collectivism and individualism that theproblem of the world and the solution of that problem lie in the yearsto come. But I have no hesitation in saying that I am on the side ofthose who think that a greater collective element should be introducedinto the State and municipalities. I should like to see the Stateundertaking new functions, stepping forward into new spheres ofactivity, particularly in services which are in the nature ofmonopolies. There I see a wide field for State enterprise. But when weare told to exalt and admire a philosophy which destroys individualismand seeks to replace it absolutely by collectivism, I say that is amonstrous and imbecile conception, which can find no real acceptancein the brains and hearts--and the hearts are as trustworthy as thebrains--in the hearts of sensible people. 

Now I pass over the revolutionary Socialists, who, I admit, if theyfeel inclined, are justified in throwing away their votes on Saturdaynext, and I come to the Labour and to the Trade Union element in ourmidst. There I have one or two words to say of rather a straightcharacter, if you don't object, and which, I hope, will be taken ingood part, and will be studied and examined seriously. Labour inBritain is not Socialism. It is quite true that the Socialisticelement has imposed a complexion on Labour, rather against its will, and is now supported in its action by funds almost entirely suppliedby Trade Unions. But Trade Unions are not Socialistic. They areundoubtedly individualist organisations, more in the character of theold Guilds, and lean much more in the direction of the culture of theindividual than in that of the smooth and bloodless uniformity of themass. Now, the Trade Unions are the most respectable and the mostpowerful element in the labour world. They are the social bulwarks ofour industrial system. They are the necessary guard-rails of a highlycompetitive machine, and I have the right, as a member of hisMajesty's Government, to speak with good confidence to TradeUnionists, because we have done more for Trade Unionists than anyother Government that has ever been. 

How stands the case of the Trade Unionists? Do they really believe, Iput this question to them fairly--do they really believe that there isno difference whatever between a Tory and a Liberal Government? DoTrade Unionists desire the downfall of the existing LiberalGovernment? Would they really like to send a message of encouragementto the House of Lords--for that is what it comes to--to reject andmutilate Liberal and Radical legislation--and Labour legislation nowbefore Parliament? Would they send such a message of encouragement tothe House of Lords as this--"House of Lords, you were right in yourestimate of public opinion when you denied the extension of theProvision of Meals to School Children Bill to Scotland, when you threwout the Scottish Land Valuation Bill, when you threw out the ScottishSmall Holders Bill--when you did all this you were right. " Do you wishto send that message to the House of Lords? But that will be theconsequence of every vote subtracted from the Liberal majority. 

Why, gentlemen, let me return to the general current of events. Whatis the Government doing at present, and what has it done in its briefexistence? Within the limits under which it works, and under thepresent authority of the House of Lords, what has it done and what isit doing for Trade Unionists? It has passed the Trades Disputes Act. The Workmen's Compensation Act has extended the benefits ofcompensation to six million persons not affected by previouslegislation. The qualification of Justices of the Peace--the citizens'Privy Councillorship, as I call it--has been reduced so as to make itmore easy for persons not possessed of this world's goods to qualifyto take their place on the civic Bench. You know the land legislationfor England, which is designed to secure that the suitable man whowants a small parcel of land to cultivate for his own profit andadvantage shall not be prevented from obtaining it by feudallegislation, by old legal formalities or class prejudice. And is theLicensing Bill not well worth a good blow struck, and struck now, while the iron is hot? Then there is the Miners' Eight Hours Bill, ameasure that has been advocated by the miners for twenty years, andjustified by the highest medical testimony on humanitarian andhygienic grounds. It is costing us votes and supporters. It iscosting us by-elections, yet it is being driven through. Have we not aright to claim the support of the Trade Unionists who are associatedwith the miners? Don't they feel that this measure is hanging in thebalance, not in the House of Commons, but in the balance in the Houseof Lords, which attaches to by-elections an importance which, in theirarrogant assertion, entitles them to mutilate or reject legislation, even although it comes to them by the majority of a Parliament newlyelected on a suffrage of six millions. Then there is the question ofold-age pensions, a question that has been much misused and mishandledin the past. 

That was a pledge given by our opponents to win the election of 1895, and after the lapse of thirteen years of toil and stress, the LiberalParty is able to take it up, and will implement it in an effectivefashion. Now, is there one of all these subjects which does notcommand the support of Trade Unionists and responsible Labour leaders?The Government is fighting for these measures. The Government isrisking its life and power for these and similar objects. The ToryParty is opposing it on every point. The Tory Party is gainingpopularity from the resistance of the interests which are affected bythe passing of such measures of social reform. The House of Lords isthe weapon of the Tory Party. With that weapon they can make a LiberalGovernment ridiculous. Are the Labour leaders, are Trade Unionists, confronted at this moment with the menace of reaction, deliberatelygoing to throw in their lot with the House of Lords? I don't thinkthey will. The record in Labour legislation under the existence of thepresent Government is a record which deserves, and will, I believe, command, the support of the great mass of the labouring classes of ourcountry. 

But I say, in all seriousness, that if the Liberal Government is onthe one hand confronted by the House of Lords, fortified by sporadicby-elections, and on the other hand is attacked, abused, derided, by asection of those for whom it is fighting, then that Government, whatever its hopes, whatever its energies, whatever its strength, willbe weakened, will perhaps succumb, and will be replaced by anotherGovernment. And by what other Government will it be replaced? Therecan be no other result from such a division of progressive forces thanto instal a Tory and Protectionist Government in power. That will notbe fatal to us. Liberalism will not be killed. Liberalism is aquickening spirit--it is immortal. It will live on through all thedays, be they good days or be they evil days. No! I believe it willeven burn stronger and brighter and more helpful in evil days than ingood--just like your harbour-lights, which shine out across the sea, and which on a calm night gleam with soft refulgence, but through thestorm flash a message of life to those who toil on the rough waters. 

But it takes a great party to govern Great Britain--no clique, nofaction, no cabal, can govern the forty millions of people who live inthis island. It takes a vast concentration of forces to make agoverning instrument. You have now got a Radical and democraticgoverning instrument, and if this Administration is broken, thatinstrument will be shattered. It has been recreated painfully andlaboriously after twenty years by courage and fidelity. It has comeinto being--it is here. It is now at work, and by legislation and bythe influence which it can exercise throughout the whole world, it ismaking even our opponents talk our language, making all parties in theState think of social reform, and concern themselves with social anddomestic affairs. Beware how you injure that great instrument, as Mr. Gladstone called it--or weaken it at a moment when the masses of thiscountry have need of it. Why, what would happen, if this presentGovernment were to perish? On its tomb would be written: "Beware ofsocial reform. The labouring classes will not support a Governmentengaged in social reform. Every social reform will cost you votes. Beware of social reform. 'Learn to think Imperially. '"

An inconclusive verdict from Dundee, the home of ScottishRadicalism--an inconclusive, or, still more, a disastrousverdict--would carry a message of despair to every one in all parts ofour island and in our sister island who is working for the essentialinfluences and truths of Liberalism and progress. Down, down, downwould fall the high hopes of the social reformer. The constructiveplans now forming in so many brains would melt into air. The oldrégime would be reinstated, reinstalled. Like the Bourbons, they willhave learned nothing and will have forgotten nothing. We shall stepout of the period of adventurous hope in which we have lived for abrief spell; we shall step back to the period of obstinate andprejudiced negations. For Ireland--ten years of resolute government;for England--dear food and cheaper gin; and for Scotland--the superiorwisdom of the House of Lords! Is that the work you want to do, men ofDundee? Is that the work to which you will put your preciousfranchises--your votes, which have been won for you by so muchstruggle in the past? No; I am confident that this city, which has ofits own free will plunged into the very centre of national politics, will grasp the opportunity now presented; that its command will not beback, but forward; that its counsel will be not timidity, but courage, and that it will aim not at dividing, but at rallying the progressiveforces, not at dissipating, but at combining the energies of reform. That will be the message which you will send in tones which no man canmistake--so that a keen, strong, northern air shall sweep across ourland to nerve and brace the hearts of men, to encourage the weak, tofortify the strong, to uplift the generous, to correct the proud. 

In time of war, when an action has been joined for a long time, andthe lines are locked in fierce conflict, and stragglers are coming inand the wounded drifting away, when the reserves begin to waver hereand there, it is on such an occasion that Scottish regiments have sooften won distinction; it is on these occasions that you have seensome valiant brigade march straight forward into the battle smoke, into the confusion of the field, right into the heart of the fight. That is what you have to do at this moment. "Scotland for ever!"

Now I turn my argument to the other side of the field, to the otherquarter, from which we are subject to attack; I turn in my appeal fromTrade Unionists, from the Labour men, who ought in all fairness torecognise the work this Government is doing and back them in theirsore struggle; I turn to the rich and the powerful, to Unionist andConservative elements, who, nevertheless, upon Free Trade, upontemperance, and upon other questions of moral enlightenment, feel aconsiderable sympathy with the Liberal Party; I turn to those who say, "We like Free Trade and we are Liberals at heart, but this Governmentis too Radical: we don't like its Radical measures. Why can't they letwell alone? What do they mean by introducing all these measures, allthese Bills, which, " so they say, "disturb credit and trade, andinterfere with the course of business, and cause so manyclass-struggles in the country?" I turn to those who complain we aretoo Radical in this and in that, and that we are moving too quickly, and I say to them: "Look at this political situation, not as partymen, but as Britons; look at it in the light of history; look at it inthe light of philosophy; and look at it in the light of broad-minded, Christian charity. "

Why is it that life and property are more secure in Britain than inany other country in the world? Why is it that our credit is so highand that our commerce stretches so far? Is it because of therepressive laws which we impose? Why, gentlemen, there are laws farmore severe than any prevailing in this country, or that haveprevailed here for many years, now in force in great States in Europe, and yet there is no complete security of life and propertynotwithstanding all these repressive laws. Is it because of the Houseof Lords, that life and property are secure? Why, orders ofaristocracy more powerful, much more homogeneous, of greaterprivileges, acting with much greater energy than our aristocracy, havebeen swept away in other countries until not a vestige, or scarce avestige, of their existence remains. Is it because of the BritishConstitution that life and property are secure? Why, the BritishConstitution is mainly British common sense. There never were fortymillions of people dwelling together who had less of an arbitrary andrigid Constitution than we have here. The Constitution of France, theConstitution of Germany, the Constitution of the United States are farmore rigid, far better fortified against popular movement, than theConstitution under which we in these islands have moved steadilyforward abreast of the centuries on the whole to a better state thanany other country. 

I will tell those wealthy and powerful people what the secret of thesecurity of life and property in Britain is. The security arises fromthe continuation of that very class-struggle which they lament and ofwhich they complain, which goes on ceaselessly in our country, whichgoes on tirelessly, with perpetual friction, a struggle between classand class which never sinks into lethargy, and never breaks intoviolence, but which from year to year makes possible a steady andconstant advance. It is on the nature of that class-struggle inBritain that the security of life and property is fundamentallyreposed. We are always changing; like nature, we change a great deal, although we change very slowly. We are always reaching a higher levelafter each change, but yet with the harmony of our life unbroken andunimpaired. And I say also to those persons here, to whom I now makemy appeal: wealthy men, men of light and leading have never been allon one side in our country. There have always been men of power andposition who have sacrificed and exerted themselves in the popularcause; and that is why there is so little class-hatred here, in spiteof all the squalor and misery which we see around us. There, gentlemen, lies the true evolution of democracy. That is how we havepreserved the golden thread of historical continuity, when so manyother nations have lost it for ever. That is the only way in whichyour island life as you know it, and love it, can be preserved in allits grace and in all its freedom--can be elevated, expanded, andillumined for those who will occupy our places when our share in theworld's work is done. 

And I appeal to the leaders of industry and of learning in this cityto range themselves on the side of a policy which will vigilantly seekthe welfare of the masses, and which will strictly refuse to profitthrough their detriment; and, in spite of the violence of extremists, in spite of the harshness of controversy which hard conditionsproduce, in spite of many forces which may seem to those gentlemenungrateful, I ask them to pursue and persevere in their crusade--forit is a crusade--of social progress and advance. 

Cologne Cathedral took 600 years to build. Generations of architectsand builders lived and died while the work was in progress. Still thework went on. Sometimes a generation built wrongly, and the nextgeneration had to unbuild, and the next generation had to build again. Still the work went on through all the centuries, till at last therestood forth to the world a mighty monument of beauty and of truth tocommand the admiration and inspire the reverence of mankind. So let itbe with the British Commonwealth. Let us build wisely, let us buildsurely, let us build faithfully, let us build, not for the moment, butfor future years, seeking to establish here below what we hope tofind above--a house of many mansions, where there shall be room forall. 

 The result of the election was declared as follows

 Churchill (Liberal) 7, 079 Baxter (Conservative) 4, 370 Stuart (Socialist) 4, 014 Scrymgeour (Prohibitionist) 655 ----- Liberal majority 2, 709 -----

FOOTNOTES:

[9] March 30, 1908. 

II

SOCIAL ORGANISATION

 PAGE

MINES [EIGHT HOURS] BILL (July 6, 1908) 173

UNEMPLOYMENT (Oct. 10, 1908) 189

THE SOCIAL FIELD (Jan. 13, 1909) 211

THE APPROACHING CONFLICT (Jan. 30, 1909) 225

THE ANTI-SWEATING BILL (April 28, 1909) 239

LABOUR EXCHANGES AND UNEMPLOYMENT INSURANCE (May 19, 1909) 253

THE SECOND READING OF THE MINES [EIGHT HOURS] BILL

HOUSE OF COMMONS, _July 6, 1908_

Whatever arguments may be urged against this measure, no one can saythat the Government have acted with precipitation in bringing itbefore the House and the country. It has been debated for twentyyears. Parliaments, Tory and Liberal, have affirmed the principle, andI do not suppose there ever was a similar reform put forward in thisHouse upon a greater volume of scientific and accurate information, orafter more prolonged, careful, and sustained scrutiny. If the debateon the Second Reading has thrown very little new light on thisquestion, it is because it has been fully and thoroughly explored onformer occasions; and not only has it been fully explored, but it isnow illuminated by the admirable Report which has been presented bythe Departmental Committee appointed last session. 

This Report, while exciting approval on all sides, gives no completesatisfaction to any. It balances, and weighs, but it does not finallypronounce. It aims less at deciding this controversy, than at definingthe limits within which its economic aspect may be said to lie. Ithink any one who reads the Report with attention will feel, aftercareful study, that the limits of the economic controversy aremoderately restricted. We have to consider on the one hand the grossreduction of one-tenth in the hours of labour of underground workmen, taking the average over all classes of men and all sorts of mines. Andon the other hand we have as a set-off against that gross reductioncertain very important mitigations which are enumerated in the Report, to which I shall briefly refer. 

The first economic question which the House has to settle is, whetherthese mitigations which are enumerated will have the effect ofovertaking the reduction which is to follow the curtailment of hours, or, if not, how far they will fall short in overtaking that reduction. 

I do not suppose that any hon. Gentleman is likely to change hisopinion on a question of such complexity at this late stage of thedebate, and therefore I shall only refer by name to these mitigations, bearing in mind how important they are. There are those which dependon the arrangements of employers, and those which depend on thevolition of the workers. With regard to the employers, there isimproved organisation by methods of haulage and winding, and othermeans specified in the Report. There is the more extensive applicationof coal-cutting machinery, and the sinking of new pits with modernappliances, which is progressing in many parts of the country. 

There is the system of double and multiple shifts. The extension ofthe system will not be so difficult as has sometimes been supposed. Atthe present moment, taking the statistics of 1906, a quarter only ofthe workers below ground are employed in mines in which there is onlyone coal-getting shift, and in all the mines in which there are two ormore coal-getting shifts the first shift preponderates in numbergreatly over the second, and, therefore, in applying this system ofdouble or multiple shifts, in so far as it is necessary to apply it, we shall not have to face the difficulty of a complete transformationin the methods of working a great many of the mines, but it will be amere extension of the system which at present exists over a greatportion of the coal-getting area. 

From the side of labour, the mitigations which may be expected asoff-sets to the original reduction are not less important. There isthe increased efficiency, of which we have instances actually onrecord in this Report, which has followed from the reduction of hours. There is the power of the worker, if he chooses, to increase hisearnings on a short day. There is "absenteeism, " which has always beenaffected by a reduction of hours, and which amounts to 6. 6 per cent. Of the working time of the mines, and there is the margin of stoppagesthrough slack trade and other circumstances, which at presentaggregates 7 per cent. Of the working time of the mines. Taking theselast two alone, they aggregate 13 per cent. , or considerably more, asa margin, than the reduction of working time which will be caused bythe operation of this Bill, even when the full operation is reached. 

First of all then, let the House consider carefully whether from thesesources it is possible to overtake the 10 per cent. Reduction which, in the first instance, the Bill imposes. It is a question nicelybalanced; it offers matter for fair argument this way and that, but, taking all the means of mitigation together, not only singly butcollectively, it is surely very difficult to believe that masters andmen, organised as they are, and working together with good will, andwith ample time to accommodate themselves to new arrangements, willnot be able from all sources to overtake the comparatively smallreduction in hours the Bill will effect. 

I am inclined to an opinion that good use will be made of thesemargins, but even if we assume, for the sake of the argument, thatthere will be a net reduction in consequence of the passage of thisBill in the output of coal, that reduction must be temporary andtransient in its character. For fifty years there have been continuouschanges in the conditions of coal-mining in this country. The hourshave been reduced, the conditions of boy labour have been restricted, wages have been raised, compensation has been provided, andprecautions against accidents have been multiplied. All these changes, the wisdom of which nobody disputes, may from a purely and crudelyeconomic standpoint be said to militate against production. We haveheard many prophecies, but what has been the history of the coaltrade? There has been a steady, unbroken expansion of output duringthe last fifty years. In the period of ten years ending in 1874, 76, 000, 000 tons were produced; in the next ten years 112, 000, 000; inthe next ten years 145, 000, 000; in the next ten years 172, 000, 000; andin the last period of ten years 214, 000, 000--a figure which has beengreatly exceeded since. 

If it be admitted that there may be a certain reduction in output as aconsequence of this Bill, that reduction must be considered, not byitself, not in isolation, but in relation to the steady and persistentmovement of coal production for the last fifty years. To me it seemscertain that the small temporary restriction will be lost in thegeneral tendency to expansion, as the eddy is carried forward by thestream and the recoiling wave is lost in the advancing tide. 

But these arguments would be wholly vitiated if it could be shown thatthe restriction of hours was so violent in its character, so sudden inits application, so rigid in its methods as, not merely to cause acertain shrinkage in the volume of the output, but to upset theeconomy of the coal-mining industry. In that case there would be notmerely a curtailment which might be mitigated, but we should haveinjured and possibly disorganised the industry; and it is at thispoint that it is proper for the House to consider the safeguardsintroduced by the Government into the Bill. These safeguards are ofthe greatest importance. 

There is the safeguard of overtime. Sixty hours a year are permitted. In districts where men work ten days a fortnight, twelve weeks may beone hour longer than the usual time allowed by the Bill; and where thedays laboured are only four in the week, fifteen weeks of extendedtime will be possible through the provision of overtime. There areprovisions with regard to the labour of certain persons permitted toremain below ground beyond the legal hours for special purposes, andthere is a power which relaxes the Bill altogether in an emergencywhich is likely to delay or arrest the general work of the mine, and, of course, in any case where there is accident or danger. Finally, ifthere should be risk of a corner or an unexpected rise in price, theGovernment have power by Order in Council to suspend the wholeoperation of the law in order to prevent anything like a seriouscrisis arising in the coal trade. 

I cannot bring myself to believe that with all these safeguards itwill not be possible for the coal industry, if given time, toaccommodate itself to the new conditions. It is only two years agothat I was invited from the benches opposite to contemplate theapproaching ruin of the gold mines of the Rand through the changeintroduced in the methods of working. That change has been enforced, with the result that working expenses have been reduced, and thestandard of production has increased. In making that transition, iftime had not been allowed to tide over the period of change, then, indeed, you might have had that disaster which hon. Gentlemen oppositehave always been ready to apprehend. But there is here to be a gradualprocess of adaptation, for which not less than five years ispermitted. 

We are told that positive reasons, and not negative reasons, ought tobe given in support of a measure which regulates the hours of adultlabour--that you ought to show, not that it will do no harm, but thatgood will come from it. There are, of course, such reasons in supportof this Bill, but they are so obvious that they have not been dweltupon as much as they might have been. The reasons are social reasons. We believe that the well-being of the mining population, numberingsome 900, 000 persons, will be sensibly advanced in respect of health, industrial efficiency, habits of temperance, education, culture, andthe general standard of life. We have seen that in the past theshortening of hours has produced beneficial effects in these respects, and we notice that in those parts of the country where the hours ofcoal-mining are shortest, the University Extension lecturers find thatthe miners take an intelligent interest in their lectures--and it isamong the miners of Fifeshire that a considerable development ingardening and also of saving to enable them to own their own houses, has followed on a longer period of leisure. 

But the general march of industrial democracy is not towardsinadequate hours of work, but towards sufficient hours of leisure. That is the movement among the working people all over the country. They are not content that their lives should remain mere alternationsbetween bed and the factory. They demand time to look about them, timeto see their homes by daylight, to see their children, time to thinkand read and cultivate their gardens--time, in short, to live. That isvery strange, perhaps, but that is the request they have made and aremaking with increasing force and reason as years pass by. 

No one is to be pitied for having to work hard, for nature hascontrived a special reward for the man who works hard. It gives him anextra relish, which enables him to gather in a brief space from simplepleasures a satisfaction in search of which the social idler wandersvainly through the twenty-four hours. But this reward, so precious initself, is snatched away from the man who has won it, if the hours ofhis labour are too long or the conditions of his labour too severe toleave any time for him to enjoy what he has won. 

Professor Marshall, in his "Principles of Economics, " says:

"The influence which the standard of hours of work exerts on economicactivities is partially obscured by the fact that the earnings of ahuman being are commonly counted gross; no special reckoning beingmade for his wear-and-tear, of which he is himself rather careless. Further, very little account is taken of the evil effects of theoverwork of men on the well-being of the next generation. .. . When thehours and the general conditions of labour are such as to cause greatwear-and-tear of body or mind or both, and to lead to a low standardof living; when there has been a want of that leisure, rest, andrepose which are among the necessaries for efficiency, then the labourhas been extravagant from the point of view of society at large. .. . And, since material wealth exists for the sake of man, and not man forthe sake of material wealth, the replacement of inefficient andstunted human lives by more efficient and fuller lives would be a gainof a higher order than any temporary material loss that might havebeen occasioned on the way. "

If it be said that these arguments are general, is it not true thatspecial circumstances differentiate the case of coal-miners from thatof many other industries in this country? Others have spoken of theheat of the mine, the danger of fire-damp, of the cramped position, ofthe muscular exertions of the miner, at work in moist galleriesperhaps a mile under the ground. I select the single fact ofdeprivation of natural light. That alone is enough to justifyParliament in directing upon the industry of coal-mining a speciallysevere scrutiny and introducing regulations of a different characterfrom those elsewhere. 

The hon. Member for Windsor[10] who moved the rejection of this Billdescribed it as a reckless and foolhardy experiment. I see the mineremerging from the pit after eight hours' work with the assertion onhis lips that he, at any rate, has paid his daily debt to his fellowmen. Is the House of Commons now going to say to him, "You have noright to be here. You have only worked eight hours. Your appearance onthe surface of the earth after eight hours' work is, to quote the hon. Member, 'a reckless and foolhardy experiment'"? I do not wonder at theminers' demand. I cannot find it in my heart to feel the slightestsurprise, or indignation, or mental disturbance at it. My capacity forwonder is entirely absorbed, not by the miners' demand, but by thegentleman in the silk hat and white waistcoat who has the composureand the complacency to deny that demand and dispute it with him. 

The hon. Member for Dulwich[11]--himself a convinced protectionist, with a tariff with 1, 200 articles in its schedules in his coat-tailpocket--has given us a delightful lecture on the importance ofcheapness of production. Think of the poor consumer! Think of theimportance to our industries of cheapness of production! We on thisside are great admirers of cheapness of production. We have remindedthe hon. Gentleman of it often; but why should cheapness of productionalways be achieved at the expense of the human factor? The hon. Gentleman spoke with anxiety of the possibility of a rise in miners'wages as a consequence of this Bill. Has he considered the relation ofminers' wages to the selling prices of coal? At the pit's mouth theunderground-workers' wages are only 60 per cent. Of the selling priceof coal. Free on board on the Tyne, the proportion is only 38 percent. As coal is sold here in the south of England the proportion ofwages is less than one-fifth of the whole price. Is it not clear thatthere are other factors at least which require consideration beforeyou decide to deal with the human factor, which first attracts theattention of the hon. Gentleman?

What about mining royalties? In all this talk about the importance ofcheap coal to our industries and to the poor consumer we have had nomention of mining royalties. No. We never mention that. Yet, will theHouse believe it, it is estimated that mining royalties impose a tollof 6 per cent. , calculated on the price of coal at the pit's mouth, orconsiderably more than half the total diminished production whichcould result from this humane Act of labour legislation. 

But we are asked: "Why stop here? Why don't your arguments applyelsewhere?" and we are told of people whose conditions of life areworse than some of those of coal-miners. Why stop here? Who ever saidwe would stop here? I welcome and support this measure, not only forits own sake, but much more because it is, I believe, simply theprecursor of the general movement which is in progress all over theworld, and in other industries besides this, towards reconciling theconditions of labour with the well-ascertained laws of science andhealth. If we are told that because we support this measure we shallbe inflicting an injury or injustice on other classes of thepopulation, I say there is a great solidarity among all classes ofmanual labourers. I believe that when they consider this matter theywill see that all legitimate interests are in harmony, that no oneclass can obtain permanent advantage by undue strain on another, andthat in the end their turn will come for shorter hours, and will comethe sooner because they have aided others to obtain that which theydesire themselves. 

When the House is asked to contemplate gloomy pictures of what willfollow on this Bill, let them recur to the example of Parliaments goneby. When the Ten Hours Bill was introduced in 1847, a Bill whichaffected the hours of adult males inferentially, the same lugubriousprophecies were indulged in from both sides of the House. Distinguished economists came forward to prove that the whole profitof the textile industry was reaped after the eleventh hour. Famousstatesmen on both sides spoke strongly against the measure. TheParliament, in 1847, was in the same sort of position as we are to-dayin this respect, but how differently circumstanced in other respects. That Parliament did not enjoy the wide and accurate statisticalinformation in every branch of labour which enables us to-day to moveforward with discretion and prudence. They were not able to look tothe general evidences of commercial security and expansion on whichmodern politicians can rely. They could not show, as we can show, overwhelming examples of owlish prophets dazzlingly disproved; theycould not point, as we can point, to scores of cases where not onlyincreased efficiency, but a positive increase in output has followedthe reduction of the hours of labour. The principle was new, thefuture was vague. But the Parliament of those days did not quail. Theytrusted to broad, generous instincts of common sense; they drew agood, bold line; and we to-day enjoy in a more gentle, more humane, more skilful, more sober, and more civilised population the blessingswhich have followed their acts. Now it is our turn. Let us vote forthe Second Reading of this Bill, and in so doing establish a claimupon the respect of Parliaments to come, such as we ourselves owe toParliaments of the past. [12]

FOOTNOTES:

[10] Mr. J. F. Mason. 

[11] Mr. Bonar Law. 

[12] This concluded the debate, and the Second Reading was carried by390 to 120. 

UNEMPLOYMENT

KINNAIRD HALL, DUNDEE, _October 10, 1908_

(From _The Times_, by permission. )

What is the political situation which unfolds itself to ourreflections to-night? I present it to you without misgivings orreserve. For nearly three years a Liberal Administration, moredemocratic in its character, more widely selected in its _personnel_, more Radical in the general complexion of its policy, than any thathas previously been known to British history, has occupied the placeof power. During the whole of that period no single seriousadministrative mistake, either at home or abroad, has embarrassed ordiscredited the conduct of public affairs. Three ParliamentarySessions, fruitful beyond precedent in important legislation, havebeen surmounted with dignity and dispatch. The authority and influenceof Great Britain among foreign Powers have been prudently guarded, andare now appreciably augmented, and that authority and influence havebeen consistently employed, and will be in the future employed, insoothing international rivalries and suspicion, in asserting a properrespect for public law, in preserving a just and harmonious balanceamongst great Powers, and in forwarding as opportunities have served, whether in the Near East or in the Congo, causes of a generous anddisinterested humanitarianism. 

The British Empire itself has enjoyed under Liberal rule a period ofprosperous tranquillity, favourable both to development andconsolidation; and it is no exaggeration to say that it was never morestrong or more peacefully united than at the present moment. Theconfidence which the whole country, irrespective of party, feels inSir Edward Grey in the present European crisis, is the measure of oursuccess in foreign affairs. The gathering of the Convention of aUnited South Africa is in itself a vindication of colonial policy. Each year for which we have been responsible has been marked by somegreat and beneficent event which has commanded the acquiescence--or atleast silenced the dissent--of many of our professed opponents. In1906 the charter of trade unions; in 1907, the conciliation andsettlement of South Africa; in 1908, the establishment of old-agepensions. These are large matters; they will take their place in thehistory book; and on them alone, if necessary, I would confidentlybase the claims of his Majesty's Government to respect, if not torenown, in future times. 

But although we do not meet to-night in any atmosphere of crisis, norin any expectation of a general election, nevertheless I feel, and Idare say you feel too, that we have reached a climacteric in the lifeof this Parliament. The next six months will probably determine thewhole remaining fortunes of the Government, and decide whether agradual but progressive decline will slowly carry the Administrationin the natural course to the grave where so many others are peacefullyslumbering, or whether, deriving fresh vigour from its exertions, itwill march forward conquering and to conquer. 

I said a few minutes ago that this session had been marked by ameasure of great and cardinal importance. Surely no one will deny themagnitude and significance of the step which has been taken in theestablishment of a system of old-age pensions. It marks the assertionin our social system of an entirely new principle in regard topoverty, and that principle, once asserted, cannot possibly beconfined within its existing limits. Old-age pensions will carry usall a very long way. They have opened a door which will not soon oreasily be closed. The members of both Houses of Parliament have beenled to the verge of the cruel abyss of poverty, and have been insolemn session assembled to contemplate its depths and its gloom. Allalike have come to gaze; none have remained unmoved. There are somedistinguished and eminent men, men whose power and experience I cannotimpugn, who have started back appalled by what they have seen, andwhose only idea is to slam the door on the grim and painful prospectwhich has been revealed to their eyes. 

But that is not the only spirit which has been awakened in ourcountry; there are others, not less powerful, and a greater number, who will never allow that door to be closed; they have got their feetin it, they are resolved that it shall be kept open. Nay, more, theyare prepared to descend into the abyss, and grapple with its evils--assometimes you see after an explosion at a coal mine a rescue partyadvancing undaunted into the smoke and steam. Now there is the issueon which the future of this Parliament hangs--"Forward or back?"Voices sound loud and conflicting in our ears; the issue, the sharpestand simplest, the most tremendous that can be put to a generation ofmen--"Forward or backward?"--is the issue which confronts us at thepresent time, and on it the future of the Government is staked. Thereare faint-hearted friends behind; there are loud-voiced foes in front. The brewer's dray has been pulled across the road, and behind it areembattled a formidable confederation of vested interests. Amountainous obstacle of indifference and apathy bars our advance. Whatis your counsel? Forward or Back?

Let it be remembered that aged poverty is not the only evil withwhich, so far as our means allow, we have to grapple. What is theproblem of the hour? It can be comprised in one word--Unemployment. After two years of unexampled trade expansion, we have entered upon aperiod of decline. We are not alone in this. A reaction fromovertrading is general all over the world. Both Germany and the UnitedStates are suffering from a similar commercial contraction, and inboth countries, in spite of their high and elaborate protectivetariffs, a trade set-back has been accompanied by severe industrialdislocation and unemployment. In the United States of America, particularly, I am informed that unemployment has recently been moregeneral than in this country. Indeed the financial collapse in theUnited States last autumn has been the most clearly marked of all thecauses to which the present trade depression may be assigned. 

It is not yet possible to say that the end of that period ofdepression is in sight; but there are some significant indicationswhich I think justify the hope that it will be less severe and lessprolonged than has been known in other trade cycles, or than somepeople were at first inclined to believe. But the problem ofunemployment is not confined to periods of trade depression, and willnot be solved by trade revival; and it is to that problem in itslarger and more permanent aspects that I desire to draw your attentionfor a short time to-night. 

There is no evidence that the population of Great Britain hasincreased beyond the means of subsistence. On the contrary, our wealthis increasing faster than our numbers. Production is active; industrygrows, and grows with astonishing vigour and rapidity. Enterprise inthis country requires no artificial stimulant; if it errs at all, itis from time to time upon the side of overtrading and overproduction. There is no ground for believing that this country is not capable ofsupporting an increasing population in a condition of expandingprosperity. 

It must, however, be remembered that the British people are more thanany other people in the world a manufacturing people. It is certainthat our population could never have attained its present vastnumbers, nor our country have achieved its position in the world, without an altogether unusual reliance upon manufacture as opposed tosimple agriculture. The ordinary changes and transitions inseparablefrom the active life and growth of modern industry, therefore, operatehere with greater relative intensity than in other countries. Anindustrial disturbance is more serious in Great Britain than in othercountries, for it affects a far larger proportion of the people, andin their distresses the urban democracy are not sustained by the samesolid backing of country-folk and peasant cultivators that we see inother lands. It has, therefore, become a paramount necessity for us tomake scientific provision against the fluctuations and set-backswhich are inevitable in world commerce and in national industry. 

We have lately seen how the backwash of an American monetarydisturbance or a crisis in the Near East or in the Far East, or someother cause influencing world trade, and as independent of our controlas are the phases of the moon, may easily have the effect of lettingloose upon thousands of humble families and households all the horrorsof a state of siege or a warlike blockade. Then there are strikes andtrade disputes of all kinds which affect vast numbers of peoplealtogether unconcerned in the quarrel. Now, I am not going to-night toproclaim the principle of the "right to work. " There is not much usein proclaiming a right apart from its enforcement; and when it isenforced there is no need to proclaim it. But what I am here toassert, and to assert most emphatically, is the responsibility ofGovernment towards honest and law-abiding citizens; and I am surprisedthat that responsibility should ever be challenged or denied. 

When there is a famine in India, when owing to some unusual course ofnature the sky refuses its rains and the earth its fruits, reliefworks are provided in the provinces affected, trains of provisions arepoured in from all parts of that great Empire, aid and assistance aregiven to the population involved, not merely to enable them to survivethe period of famine, but to resume their occupations at its close. Anindustrial disturbance in the manufacturing districts and the greatcities of this country presents itself to the ordinary artisan inexactly the same way as the failure of crops in a large province inIndia presents itself to the Hindu cultivator. The means by which helives are suddenly removed, and ruin in a form more or less swift andterrible stares him instantly in the face. That is a contingency whichseems to fall within the most primary and fundamental obligations ofany organisation of Government. I do not know whether in all countriesor in all ages that responsibility could be maintained, but I do saythat here and now in this wealthy country and in this scientific ageit does in my opinion exist, is not discharged, ought to bedischarged, and will have to be discharged. 

The social machinery at the basis of our industrial life is deficient, ill-organised, and incomplete. While large numbers of persons enjoygreat wealth, while the mass of the artisan classes are abreast of andin advance of their fellows in other lands, there is a minority, considerable in numbers, whose condition is a disgrace to a scientificand professedly Christian civilisation, and constitutes a grave andincreasing peril to the State. Yes, in this famous land of ours, sooften envied by foreigners, where the grace and ease of life have beencarried to such perfection, where there is so little class hatred andjealousy, where there is such a wide store of political experience andknowledge, where there are such enormous moral forces available, somuch wisdom, so much virtue, so much power, we have not yet succeededin providing that necessary apparatus of insurance and security, without which our industrial system is not merely incomplete, butactually inhumane. 

I said that disturbances of our industrial system are often startedfrom outside this country by causes utterly beyond our control. Whenthere is an epidemic of cholera, or typhoid, or diphtheria, a healthyperson runs less risk than one whose constitution is prepared toreceive the microbes of disease, and even if himself struck down, hestands a far greater chance of making a speedy recovery. The socialand industrial conditions in Great Britain at this present time cannotbe described as healthy. I discern in the present industrial system ofour country three vicious conditions which make us peculiarlysusceptible to any outside disturbance of international trade. First, the lack of any central organisation of industry, or any general andconcerted control either of ordinary Government work, or of anyextraordinary relief works. It would be possible for the Board ofTrade to foretell with a certain amount of accuracy the degree ofunemployment likely to be reached in any winter. It ought to bepossible for some authority in some Government office--which I do notcare--to view the whole situation in advance, and within certainlimits to exert a powerful influence over the general distribution ofGovernment contracts. 

There is nothing economically unsound in increasing temporarily andartificially the demand for labour during a period of temporary andartificial contraction. There is a plain need of some averagingmachinery to regulate and even-up the general course of the labourmarket, in the same way as the Bank of England, by its bank rate, regulates and corrects the flow of business enterprise. When theextent of the depression is foreseen, the extent of the relief shouldalso be determined. There ought to be in permanent existence certainrecognised industries of a useful, but uncompetitive character, like, we will say, afforestation, managed by public departments, and capableof being expanded or contracted according to the needs of the labourmarket, just as easily as you can pull out the stops or work thepedals of an organ. In this way, you would not eliminate unemployment, you certainly would not prevent the creation of unemployables; but youwould considerably limit the scale of unemployment, you would reducethe oscillation of the industrial system, you would increase itsstability, and by every step that you took in that direction you wouldfree thousands of your fellow-countrymen from undeserved agony andruin, and a far greater number from the haunting dread of ruin. Thatis the first point--a gap, a hiatus in our social organisation--towhich I direct your attention to-night, and upon which theintelligence of this country ought to be concentrated. 

The second vicious condition is positive and not negative. I mean thegross, and, I sometimes fear, increasing evil of casual labour. Wetalk a great deal about the unemployed, but the evil of the_under-employed_ is the tap-root of unemployment. There is a tendencyin many trades, almost in all trades, to have a fringe of casuallabour on hand, available as a surplus whenever there is a boom, flungback into the pool whenever there is a slump. Employers and foremen inmany trades are drawn consciously or unconsciously to distribute theirwork among a larger number of men than they regularly require, becausethis obviously increases their bargaining power with them, andsupplies a convenient reserve for periods of brisk business activity. 

And what I desire to impress upon you, and through you upon thiscountry, is that the casual unskilled labourer who is habituallyunder-employed, who is lucky to get three, or at the outside four, days' work in the week, who may often be out of a job for three orfour weeks at a time, who in bad times goes under altogether, and whoin good times has no hope of security and no incentive to thrift, whose whole life and the lives of his wife and children are embarkedin a sort of blind, desperate, fatalistic gamble with circumstancesbeyond his comprehension or control, that this poor man, this terribleand pathetic figure, is not as a class the result of accident orchance, is not casual because he wishes to be casual, is not casual asthe consequence of some temporary disturbance soon put right. No; thecasual labourer is here because he is wanted here. He is here inanswer to a perfectly well-defined demand. He is here as the result ofeconomic causes which have been too long unregulated. He is not thenatural product, he is an article manufactured, called into being, tosuit the requirements, in the Prime Minister's telling phrase, of allindustries at particular times and of particular industries at alltimes. 

I suppose no Department has more means of learning about these thingsthan the Board of Trade, which is in friendly touch at every stage allover the country both with capital and labour. I publish that factdeliberately. I invite you to consider it, I want it to soak in. Itappears to me that measures to check the growth and diminish thequantity of casual labour must be an essential part of any thorough orscientific attempt to deal with unemployment, and I would not proclaimthis evil to you without having reason to believe that practicablemeans exist by which it can be greatly diminished. 

If the first vicious condition which I have mentioned to you is lackof industrial organisation, if the second is the evil of casuallabour, there is a third not less important. I mean the presentconditions of boy labour. The whole underside of the labour market isderanged by the competition of boys or young persons who do men's workfor boys' wages, and are turned off so soon as they demand men's wagesfor themselves. That is the evil so far as it affects the men; but howdoes it affect the boys, the youth of our country, the heirs of allour exertion, the inheritors of that long treasure of history andromance, of science and knowledge--aye, of national glory, for whichso many valiant generations have fought and toiled--the youth ofBritain, how are we treating them in the twentieth century of theChristian era? Are they not being exploited? Are they not beingdemoralised? Are they not being thrown away?

Whereas the youth of the wealthier class is all kept under strictdiscipline until eighteen or nineteen, the mass of the nation runswild after fourteen years of age. No doubt at first employment is easyto obtain. There is a wide and varied field; there are a hundred oddjobs for a lad; but almost every form of employment now open to youngpersons affords them no opening, is of no use to them whatever whenthey are grown up, and in a great number of cases the life which theylead is demoralising and harmful. And what is the consequence? Theconsequence may be measured by this grim fact, that out of theunemployed applying for help under the Unemployed Workmen Act, no lessthan twenty-eight per cent. Are between twenty and thirty years ofage, that is to say, men in the first flush of their strength andmanhood already hopelessly adrift on the dark and tumultuous ocean oflife. Upon this subject, I say to you deliberately that no boy or girlought to be treated merely as cheap labour, that up to eighteen yearsof age every boy and girl in this country should, as in the old daysof apprenticeship, be learning a trade as well as earning a living. 

All attempts to deal with these and similar evils involve theexpenditure of money. It is no use abusing capitalists and richpeople. They are neither worse nor better than any one else. Theyfunction quite naturally under the conditions in which they findthemselves. When the conditions are vicious, the consequence will beevil; when the conditions are reformed, the evil will be abated. Nordo I think the wealthy people of Great Britain would be ungenerous orunwilling to respond to the plain need of this nation for a morecomplete or elaborate social organisation. They would have a naturalobjection to having public money wasted or spent on keeping inartificial ease an ever-growing class of wastrels and ne'er-do-weels. No doubt there would also be a selfish element who would sullenlyresist anything which touched their pocket. But I believe that iflarge schemes, properly prepared and scientifically conceived fordealing with the evils I have mentioned were presented, and if itcould be shown that our national life would be placed upon a far morestable and secure foundation, I believe that there would be thousandsof rich people who would cheerfully make the necessary sacrifices. Atany rate, we shall see. 

The year that lies before us must be a year of important finance. Nodoubt that finance will be a subject of fierce and protracteddiscussion; but I shall certainly not exclude from my mind, inweighing the chances of social reform, that strong element ofpatriotism which is to be found among the more fortunate of ourfellow-countrymen, and which has honourably distinguished them fromthe rich people of other countries I could name. 

I have been dealing with three, and only three, of the evil causeswhich principally affect labour conditions in Great Britain at thepresent time. Do not forget, however, as the Prime Minister hasreminded us, how intimate is the co-relation of all social reforms, how vital it is to national health and security that we shouldmaintain an adequate and independent population upon the land, and howunsatisfactory, in Scotland, at any rate, are the present conditionsfor small holdings. Do not forget, either, how fatal to the social, moral, and political progress of British democracy is the curse ofintemperance. There is not a man or woman who lifts a voice and exertsan influence in support either of land or of temperance reform, whowill not be doing something not only to alleviate the sufferings ofthe poor, but to stimulate the healthy advance of British prosperity. 

But see how vast is the range of this question of unemployment withwhich we are confronted. See now how intricate are its details andits perplexities; how foolish it would be to legislate in panic orhaste; how vain it would be to trust to formulas and prejudices; howearnest must be the study; how patient and laborious the preparation;how scientific the spirit, how valiant the action, if that great andhideous evil of insecurity by which our industrial population areharassed is to be effectually diminished in our national life. Seenow, also, what sort of politicians those are, whichever extreme ofpolitics they may belong to, who tell you that they have an easy, simple, and unfailing remedy for such an evil. What sort ofunscrupulous and reckless adventurers they are who tell you thattariff reform, that a trumpery ten per cent. Tariff on foreignmanufactures, and a tax on wheat would enable them to provide "workfor all. " I was very glad to see that Mr. Balfour frankly and honestlydissociated himself, the other night at Dumfries, from the impudentpolitical cheap-jacks who are touting the country on behalf of theTory Party, by boldly declaring that tariff reform, or "fiscalreform, " as he prefers to call it, would be no remedy for unemploymentor trade oscillations. 

Now that Mr. Balfour has made that admission, for which we thank him, and for which we respect him, I will make one in my turn. If tariffreform or protection, or fiscal reform, or whatever you choose to callit, is no remedy for unemployment--and it is pretty clear from theexperience of other countries who have adopted it on a large scalethat it is not--neither is free trade by itself a remedy forunemployment. The evil lies deeper, the causes are more complex thanany within the reach of import duties or of no import duties, and itstreatment requires special measures of a social, not less than of aneconomic character which are going to carry us into altogether new anduntrodden fields in British politics. 

I agree most whole-heartedly with those who say that in attempting torelieve distress or to regulate the general levels of employment, wemust be most careful not to facilitate the very disorganisation ofindustry which causes distress. But I do not agree with those who saythat every man must look after himself, and that the intervention bythe State in such matters as I have referred to will be fatal to hisself-reliance, his foresight, and his thrift. We are told that ournon-contributory scheme of old-age pensions, for instance, will befatal to thrift, and we are warned that the great mass of the workingclasses will be discouraged thereby from making any effectiveprovision for their old age. But what effective provision have theymade against old age in the past? If terror be an incentive to thrift, surely the penalties of the system which we have abandoned ought tohave stimulated thrift as much as anything could have been stimulatedin this world. The mass of the labouring poor have known that unlessthey made provision for their old age betimes they would perishmiserably in the workhouse. Yet they have made no provision; and whenI am told that the institution of old-age pensions will prevent theworking classes from making provision for their old age, I say thatcannot be, for they have never been able to make such provision. And Ibelieve our scheme, so far from preventing thrift, will encourage itto an extent never before known. 

It is a great mistake to suppose that thrift is caused only by fear;it springs from hope as well as from fear; where there is no hope, besure there will be no thrift. No one supposes that five shillings aweek is a satisfactory provision for old age. No one supposes thatseventy is the earliest period in a man's life when his infirmitiesmay overwhelm him. We have not pretended to carry the toiler on to dryland; it is beyond our power. What we have done is to strap a lifebeltaround him, whose buoyancy, aiding his own strenuous exertions, oughtto enable him to reach the shore. 

And now I say to you Liberals of Scotland and Dundee twowords--"Diligence and Daring. " Let that be your motto for the yearthat is to come. "Few, " it is written, "and evil are the days of man. "Soon, very soon, our brief lives will be lived. Soon, very soon, weand our affairs will have passed away. Uncounted generations willtrample heedlessly upon our tombs. What is the use of living, if it benot to strive for noble causes and to make this muddled world a betterplace for those who will live in it after we are gone? How else can weput ourselves in harmonious relation with the great verities andconsolations of the infinite and the eternal? And I avow my faith thatwe are marching towards better days. Humanity will not be cast down. We are going on--swinging bravely forward along the grand highroad--and already behind the distant mountains is the promise of thesun. 

THE SOCIAL FIELD

BIRMINGHAM, _January 13, 1909_[13]

(From _The Times_, by permission. )

I am very glad to come here to-night to wish good luck in the New Yearto the Liberals of Birmingham. Good luck is founded on good pluck, andthat is what I think you will not fail in. Birmingham Liberals havefor twenty years been over-weighted by the influence of remarkable menand by the peculiar turn of events. This great city, which used to bethe home of militant Radicalism, which in former days supplied withdriving power the cause of natural representation against hereditaryprivilege, has been captured by the foe. The banner of the House ofLords has been flung out over the sons and grandsons of the men whoshook all England in the struggle for the great Reform Bill; and whileold injustice has but been replaced by new, while the miseries and theprivations of the poor continue in your streets, while thedifferences between class and class have been even aggravated in thepassage of years, Birmingham is held by the enemy and bound toretrogression in its crudest form. 

But this is no time for despondency. The Liberal Party must not allowitself to be overawed by the hostile Press which is ranged against it. Boldly and earnestly occupied, the platform will always beat thePress. Still less should we allow ourselves to be perturbed by thefortuitous and sporadic results of by-electoral warfare. I suppose Ihave fought as many by-elections as most people, and I know that allthe advantages lie with the attacking force. The contests arecomplicated by personal and local influences. The discussions turnupon the incidents of current legislation. There are always grievancesto be urged against the Government of the day. After a great victory, all parties, and particularly the Liberals, are prone to a slackeningof effort and organisation; after a great defeat all parties, andespecially the Tories, are spurred to supreme exertions. 

These factors are common to all by-elections, under all Governments;but never, I venture to say, has it been more important to anOpposition to gain by-electoral successes than during the presentParliament. It is their only possible line of activity. In the Houseof Commons they scarcely show their noses. In divisions they areabsent; in debate--well, I do not think we need say much about that;and it is only by a combination of by-electoral incidents properlyadvertised by the Party Press on the one hand, and the House of Lords'manipulation upon the other, that the Conservative Party are able tokeep their heads above water. And when I speak of the importance tothe Opposition of by-elections, let me also remind you that neverbefore have by-electoral victories been so important, not only to agreat Party, but to a great trade. 

Therefore, while I am far from saying that we should be content withrecent manifestations of the opinion of the electorate, while I do notat all deny that they involve a sensible reaction of feeling of anunfavourable character, and while I urge the most strenuous exertionsupon all concerned in party organisation, I assert that there is noreason, as the history of this country abundantly shows, why a generalelection, at a well-chosen moment, and upon some clear, broad, simpleissue, should not retrieve and restore the whole situation. 

There could be no question of a Government, hitherto undisturbed byinternal disagreement and consistently supported in the House ofCommons by a large, united, and intact majority, being deflected onehair's breadth from its course by the results of by-elections. We haveour work to do, and while we have the power to carry it forward, wehave no right, even if we had the inclination, to leave ituncompleted. Certainly we shall not be so foolish, or play so false tothose who have supported us, as to fight on any ground but that of ourown choosing, or at any time but that most advantageous to the generalinterest of the Progressive cause. 

The circumstances of the period are peculiar. The powers of the Houseof Lords to impede, and by impeding to discredit, the House of Commonsare strangely bestowed, strangely limited, and still more strangelyexercised. There are little things which they can maul; there are bigthings they cannot touch; there are Bills which they pass, althoughthey believe them to be wrong; there are Bills which they reject, although they know them to be right. The House of Lords can preventthe trams running over Westminster Bridge; but it cannot prevent adeclaration of war. It can reject a Bill prohibiting foreign workmenbeing brought in to break a British strike; it cannot amend a Bill togive old-age pensions to 600, 000 people. It can thwart a Government inthe minute details of its legislation; it cannot touch the whole vastbusiness of finance. It can prevent the abolition of the plural voter;but it could not prevent the abolition of the police. It can refuse aConstitution to Ireland, but not, luckily, to Africa. 

Lord Lansdowne, in his leadership of the House of Lords during thepresent Parliament, has put forward claims on its behalf far moreimportant and crude than ever were made by the late Lord Salisbury. NoTory leader in modern times has ever taken so high a view of itsrights, and at the same time no one has shown a more modest conceptionof its duties. In destroying the Education Bill of 1906 the House ofLords asserted its right to resist the opinion of a majority of membersof the House of Commons, fresh from election, upon a subject which hadbeen one of the most prominent issues of the election. In rejectingthe Licensing Bill of 1908 they have paraded their utter unconcern forthe moral welfare of the mass of their fellow-countrymen. 

There is one feature in the guidance of the House of Lords by LordLansdowne which should specially be noticed, and that is the air ofsolemn humbug with which this ex-Whig is always at pains to invest itsproceedings. The Nonconformist child is forced into the Church schoolin single-school areas in the name of parents' rights and religiousequality. The Licensing Bill is rejected in the highest interests oftemperance. Professing to be a bulwark of the commercial classesagainst Radical and Socialistic legislation, the House of Lords passesan Old-Age Pensions Bill, which it asserts will be fatal alike topublic finance and public thrift, a Mines Eight Hours Bill, which itis convinced will cripple British industry, and a Trades DisputesBill, which it loudly declared tyrannous and immoral. Posing as aChamber of review remote from popular passion, far from the swayinginfluences of the electorate, it nevertheless exhibits a taste forcheap electioneering, a subserviency to caucus direction, and a partyspirit upon a level with many of the least reputable electiveChambers in the world; and beneath the imposing mask of an assembly ofnotables backed by the prescription and traditions of centuries wediscern the leer of the artful dodger, who has got the straight tipfrom the party agent. 

It is not possible for reasonable men to defend such a system or suchan institution. Counter-checks upon a democratic Assembly there maybe, perhaps there should be. But those counter-checks should be in thenature of delay, and not in the nature of arrest; they should operateevenly and equally against both political parties, and not againstonly one of them; and above all they should be counter-checksconceived and employed in the national interest and not in a partisaninterest. These abuses and absurdities have now reached a point whenit is certain that reform, effective and far-reaching, must be thenecessary issue at a general election; and, whatever may be the resultof that election, be sure of this, that no Liberal Government will atany future time assume office without securing guarantees that thatreform shall be carried out. 

There is, however, one reason which would justify a Government, circumstanced and supported as we are, in abandoning prematurely thetrust confided to us by the country. When a Government is impotent, when it is destitute of ideas and devoid of the power to give effectto them, when it is brought to a complete arrest upon the vital andessential lines of its policy, then I entirely agree that the soonerit divests itself of responsibilities which it cannot discharge, thebetter for the country it governs and the Party it represents. No onewho looks back over the three busy years of legislation which havejust been completed can find any grounds for such a view of ourposition; and although we have sustained checks and vexations fromcircumstances beyond our control which have prevented us settling, aswe otherwise would have done, the problems of licensing and ofeducation, no lover of progress who compares the Statute-book as itstands to-day with its state in 1905, need feel that he has labouredin vain. 

No one can say that we have been powerless in the past. The tradeunionist as he surveys the progress of his organisation, the miner asthe cage brings him to the surface of the ground, the aged pensionerwhen he visits the post office with his cheque-book, the IrishCatholic whose son sees the ranges of a University career thrownopen, the child who is protected in his home and in the street, thepeasant who desires to acquire a share of the soil he tills, theyouthful offender in the prison, the citizen as he takes his seat onthe county bench, the servant who is injured in domestic service, allgive the lie to that--all can bear witness to the workings of atireless social and humanitarian activity, which, directed byknowledge and backed by power, tends steadily to make our country abetter place for the many, without at the same time making it a badplace for the few. 

But, if we have been powerful in the past, shall we then be powerlessin the future? Let the year that has now opened make its answer tothat. We shall see before many months are passed whether his Majesty'sGovernment, and the House of Commons, by which it is supported, do notstill possess effective means to carry out their policy, not only uponthose important political issues in which we have been for the timebeing thwarted, but also in that still wider and, in my opinion, moreimportant field of social organisation into which, under theleadership of the Prime Minister, we shall now proceed to advance. 

I do not, of course, ignore the fact that the House of Lords has thepower, though not the constitutional right, to bring the government ofthe country to a standstill by rejecting the provision which theCommons make for the financial service of the year. That is a matterwhich does not rest with us, it rests with them. If they want a speedydissolution, they know where to find one. If they really believe, asthey so loudly proclaim, that the country will hail them as itssaviours, they can put it to the proof. If they are ambitious to playfor stakes as high as any Second Chamber has ever risked, we shall notbe wanting. And, for my part, I should be quite content to see thebattle joined as speedily as possible upon the plain, simple issue ofaristocratic rule against representative government, between thereversion to protection and the maintenance of free trade, between atax on bread and a tax on--well, never mind. And if they do notchoose, or do not dare to use the powers they most injuriouslypossess, if fear, I say, or tactics, or prudence, or some lingeringsense of constitutional decency, restrains them, then for Heaven'ssake let us hear no more of these taunts, that we, the Liberal Party, are afraid to go to the country, that we do not possess itsconfidence, and that we are impotent to give effect to the essentialpurposes of our policy. 

Subject to such a constitutional outrage as I have indicated, hisMajesty's Government will claim their right and use their power topresent the Liberal case as a whole to the judgment of the whole bodyof electors. That case is already largely developed. How utterly haveall those predictions been falsified that a Liberal Government wouldbe incapable of the successful conduct of Imperial affairs! Whetheryou look at our position in Europe, or at the difficult conduct ofIndian administration, or the relations which have been preserved, andin some cases restored, with our self-governing Colonies, the policyof the Government has been attended with so much success that it hasnot only commanded the approval of impartial persons, but has silencedpolitical criticism itself. 

It was in South Africa that we were most of all opposed and most ofall distrusted, and by a singular inversion it is in South Africa thatthe most brilliant and memorable results have been achieved. Indeed, Ithink that the gift of the Transvaal and Orange River Constitutionsand the great settlement resulting therefrom will be by itself as asingle event sufficient to vindicate in the eyes of future generationsthe administration of Sir Henry Campbell-Bannerman, and to dignify hismemory in Parliaments and periods which we shall not see. But our workabroad is not yet completed, has not yet come to its full fruition. Ifwe should continue, as I expect we shall, to direct public affairs forthe full five years which are the normal and the healthy period ofBritish Administrations, we may look for a further advance andimprovement in all the great external spheres of Imperial policy. Wemay look in India for a greater sense of confidence and solidaritybetween the people and the Government. We shall salute the sunrise ofSouth Africa united under the British Crown. And in Europe I trustthat Sir Edward Grey will have crowned his work at the Foreign Officeby establishing a better and kindlier feeling between the British andthe German peoples. That will be the record of policy beyond the season which we shall appeal for judgment and for justice. 

If it be said that, contrary to general expectation, our policy hasprospered better abroad than at home, you have not far to look forthe reason. Abroad we have enjoyed full responsibility, a free hand, and fair-play; at home we have had a divided authority, a fetteredhand, and the reverse of fair-play. We have been hampered and we havebeen harassed. We have done much; we could have done much more. 

Our policy at home is less complete and less matured than it isabroad. But it so happens that many of the most important steps whichwe should now take, are of such a character that the House of Lordswill either not be able or will not be anxious to obstruct them, andcould not do so except by courting altogether novel dangers. Thesocial field lies open. There is no great country where theorganisation of industrial conditions more urgently demands attention. Wherever the reformer casts his eyes he is confronted with a mass oflargely preventable and even curable suffering. The fortunate peoplein Britain are more happy than any other equally numerous class havebeen in the whole history of the world. I believe the left-outmillions are more miserable. Our vanguard enjoys all the delights ofall the ages. Our rearguard straggles out into conditions which arecrueller than barbarism. The unemployed artisan, the casual labourer, and the casual labourer's wife and children, the sweated worker, theinfirm worker, the worker's widow, the under-fed child, the untrained, undisciplined, and exploited boy labourer--it is upon these subjectsthat our minds should dwell in the early days of 1909. 

The Liberal Party has always known the joy which comes from servinggreat causes. It must also cherish the joy which comes from makinggood arrangements. We shall be all the stronger in the day of battleif we can show that we have neglected no practicable measure by whichthese evils can be diminished, and can prove by fact and not by wordsthat, while we strive for civil and religious equality, we also labourto build up--so far as social machinery can avail--tolerable basicconditions for our fellow-countrymen. There lies the march, and thosewho valiantly pursue it need never fear to lose their hold upon theheart of Britain. 

FOOTNOTES:

[13] In the interval between this and the preceding speech the House ofLords had rejected the Licensing Bill. 

THE APPROACHING CONFLICT

NOTTINGHAM, _January 30, 1909_

(From _The Manchester Guardian_, by permission of the Editor. )

We are met together at a time when great exertions and a highconstancy are required from all who cherish and sustain the Liberalcause. Difficulties surround us and dangers threaten from this sideand from that. You know the position which has been created by theaction of the House of Lords. Two great political Parties divide allEngland between them in their conflicts. Now it is discovered that oneof these Parties possesses an unfair weapon--that one of theseParties, after it is beaten at an election, after it is deprived ofthe support and confidence of the country, after it is destitute of amajority in the representative Assembly, when it sits in the shades ofOpposition without responsibility, or representative authority, underthe frown, so to speak, of the Constitution, nevertheless possesses aweapon, an instrument, a tool, a utensil--call it what you will--withwhich it can harass, vex, impede, affront, humiliate, and finallydestroy the most serious labours of the other. When it is realisedthat the Party which possesses this prodigious and unfair advantage isin the main the Party of the rich against the poor, of the classes andtheir dependants against the masses, of the lucky, the wealthy, thehappy, and the strong against the left-out and the shut-out millionsof the weak and poor, you will see how serious the constitutionalsituation has become. 

A period of supreme effort lies before you. The election with whichthis Parliament will close, and towards which we are moving, is onewhich is different in notable features from any other which we haveknown. Looking back over the politics of the last thirty years, wehardly ever see a Conservative Opposition approaching an electionwithout a programme, on paper at any rate, of social and democraticreform. There was Lord Beaconsfield with his policy of "health and thelaws of health. " There was the Tory democracy of Lord RandolphChurchill in 1885 and 1886, with large, far-reaching plans of Liberaland democratic reform, of a generous policy to Ireland, ofretrenchment and reduction of expenditure upon naval and militaryarmaments--all promises to the people, and for the sake of which heresigned rather than play them false. Then you have the elections of1892 and 1895. In each the Conservative Party, whether in office oropposition, was, under the powerful influence of Mr. Chamberlain, committed to most extensive social programmes, of what we should callLiberal and Radical reforms, like the Workmen's Compensation Act andOld-Age Pensions, part of which were carried out by them and part byothers. 

But what social legislation, what plans of reform do the ConservativeParty offer now to the working people of England if they will returnthem to power? I have studied very carefully the speeches of theirleaders--if you can call them leaders--and I have failed to discover asingle plan of social reform or reconstruction. Upon the grim andsombre problems of the Poor Law they have no policy whatever. Uponunemployment no policy whatever; for the evils of intemperance nopolicy whatever, except to make sure of the public-house vote; uponthe question of the land, monopolised as it is in the hands of sofew, denied to so many, no policy whatever; for the distresses ofIreland, for the relations between the Irish and British peoples, nopolicy whatever unless it be coercion. In other directions where theyhave a policy, it is worse than no policy. For Scotland the Lords'veto, for Wales a Church repugnant to the conscience of theoverwhelming majority of the Welsh people, crammed down their throatsat their own expense. 

Yet we are told they are confident of victory, they are persuaded thatthe country has already forgotten the follies and even the crimes ofthe late Administration, and that the general contempt and disgust inwhich they were dismissed from power has already passed away. They arealready busy making their Cabinet, who is to be put in and, what isnot less important, who is to be put out. Lists of selection and listsof proscription are being framed. The two factions into which they aredivided, the Balfourites and the tariff reformers, are each acutelyconscious of one another's infirmities, and, through their respectiveorgans, they have succeeded in proving to their apparent satisfactionwhat most of us have known, and some of us have said for a long timepast, that they are an uncommonly poor lot all round. 

It would be bad enough if a Party so destitute, according to its ownstatement, of political merit were to return with the intention ofdoing nothing but repeating and renewing our experiences under Mr. Balfour's late Administration, of dragging through empty sessions, ofsneering at every philanthropic enthusiasm, of flinging a sop fromtime to time to the brewers or the parsons or the landed classes. Butthose would not be the consequences which would follow from the Torytriumph. Consequences far more grave, immeasurably more disastrous, would follow. We are not offered an alternative policy of progress, weare not confronted even with a policy of standstill, we are confrontedwith an organised policy of constructive reaction. We are to marchback into those shades from which we had hoped British civilisationand British science had finally emerged. 

If the Conservative Party win the election they have made it perfectlyclear that it is their intention to impose a complete protectivetariff, and to raise the money for ambitious armaments and colonialprojects by taxing the poor. They have declared, with a franknesswhich is, at any rate, remarkable, that they will immediately proceedto put a tax on bread, a tax on meat, a tax on timber, and aninnumerable schedule of taxes on all manufactured articles importedinto the United Kingdom; that is to say, that they will take by allthese taxes a large sum of money from the pockets of the wage-earners, by making them pay more for the food they eat, the houses they livein, and the comforts and conveniences which they require in theirhomes, and that a great part of this large sum of money will bedivided between the landlords and the manufacturers in the shape ofincreased profits; and even that part of it which does reach theExchequer is to be given back to these same classes in the shape ofreductions in income-tax and in direct taxation. If you face thepolicy with which we are now threatened by the Conservative Partyfairly and searchingly, you will see that it is nothing less than adeliberate attempt on the part of important sections of the propertiedclasses to transfer their existing burdens to the shoulders of themasses of the people, and to gain greater profits for the investmentof their capital by charging higher prices. 

It is very natural that a Party nourishing such designs should beapprehensive of criticism and of opposition; but I must say I havenever heard of a Party which was in such a jumpy, nervous state as ouropponents are at this present time. If one is led in the course of aspeech, as I sometimes am, to speak a little firmly and bluntly aboutthe Conservative tariff reformers, they become almost speechless withindignation. They are always in a state of incipient politicalapoplexy, while as for the so-called Liberal Unionists, whenever theyare criticised, they never leave off whining and say that it isunchivalrous to attack them while Mr. Chamberlain is disabled. Sorry Iam that he is out of the battle, not only on personal, but on publicgrounds. His fiercest opponents would welcome his re-entry into thepolitical arena, if only for the fact that we should then have a manto deal with, and some one whose statement of the case for his sidewould be clear and bold, whose speeches would be worth reading andworth answering, instead of the melancholy marionettes whom thewire-pullers of the Tariff Reform League are accustomed to exhibit onprovincial platforms. But I hope you will not let these pretexts orcomplaints move you or prevent you from calling a spade a spade, a taxa tax, a protective tariff a gigantic dodge to cheat the poor, or theLiberal Unionist party the most illiberal thing on record. 

But if the tariff reformers are so touchy and intolerant that theyresent the slightest attack or criticism from their opponents as if itwere sacrilege, that is nothing to the fury which they exhibit whenany of their friends on the Conservative side begin to ask a fewquestions. One would have thought at least that matters of suchgravity and such novelty should be considered fairly on their merits. But what does Mr. Austen Chamberlain say? He tells us that nohesitation will be tolerated from Unionist Members of Parliament inregard to any tariff reform proposals which may in a future Parliamentbe submitted--by whoever may be the Chancellor of the Exchequer. Nohesitation will be tolerated. Not opposition, not criticism, notdissent, but no hesitation will be tolerated. The members of theUnionist Party are to go to the next Parliament, not as honestgentlemen, free to use their minds and intelligences. They are to goas the pledged, tied-up delegates of a caucus, forced to swallowwithout hesitation details of a tariff which they have not even seen;denied the right which every self-respecting man should claim, to givetheir vote on grand and cardinal issues according to their faith andtheir conscience. And in order that those who would refuse to be boundby these dishonouring conditions may be smelt out and excluded fromthe House of Commons, a secret society of nameless but probablyinterested busybodies is hard at work in all the dirtiest sewers ofpolitical intrigue. 

But, after all, these methods are an inseparable part of the processof carrying a protectionist tariff. The whole question resolves itselfinto a matter of "business is business, " and the predatory interestswhich have banded themselves together to finance and organise thetariff campaign cannot be expected to put up with the conscientiousscruples and reasonable hesitations of Members of Parliament. It willbe a cash transaction throughout, with large profits and quickdelivery. Every little would-be monopolist in the country is going tohave his own association to run his own particular trade. Everyconstituency will be forced to join in the scramble, and to securespecial favours at the expense of the commonwealth for its specialbranches of industry. All the elections of the future will turn ontariffs. Why, you can see the thing beginning already. That egregiousTariff Commission have been dividing all the loot among themselvesbefore the battle has been won--dividing the lion's skin while thebeast lives--and I was reading only the other day that theConservatives of Norwood have decided that they could not supporttheir Member any longer, because, forsooth, he would not pledgehimself to vote for a special tax on foreign imported chairs andwindow panes. It is the same in every country. 

Such is the great conspiracy with which the British democracy is nowconfronted--an attempt to place the main burden of taxation upon theshoulders of wage-earners and not on income-drawers, a disastrous blowat the prosperity, the freedom, the flexibility, and the expansivepower of British industry, and a deadly injury to the purity ofEnglish public life. The Conservative Party tell us that if they winthe victory they will screw a protective tariff on our necks. What dowe say? What of the House of Lords? We say that if we win, we willsmash to pieces the veto of the House of Lords. If we should obtain amajority at the next election--and I have good hopes that if we actwith wisdom and with union, and, above all, with courage, we shallundoubtedly obtain an effective majority--the prize we shall claimwill be a final change in the relations of the two Houses ofParliament, of such a character as to enable the House of Commons tomake its will supreme within the lifetime of a single Parliament; andexcept upon that basis, or for the express purpose of effecting thatchange, we will not accept any responsibility for the conduct ofaffairs. 

But there is another issue which must not be overlooked. I mean thesocial issue. We have taken a great step already. I must say that heis rather a sour kind of man who can find nothing to notice in theOld-Age Pensions Act except its little flaws and petty defects. Ithink you will feel, on the contrary, that the establishment of thepensions system is a marvellous and impressive example of the powerwhich British Governments possess. Without a hitch, perfectlysmoothly, punctual to the minute, regular as clockwork, nearly600, 000 aged persons are being paid their pensions every week. That isa wonderful and beneficent achievement, a good job well worth somerisk and sweat to finish. Nearly eight millions of money are beingsent circulating through unusual channels, long frozen by poverty, circulating in the homes of the poor, flowing through the little shopswhich cater to their needs, cementing again family unions which harshfate was tearing asunder, uniting the wife to the husband, and theparent to the children. No; in spite of Socialistic sneer and Toryjeer and glorious beer, and all the rest of it, I say it is a nobleand inspiring event, for which this Parliament will be justly honouredby generations unborn. I said just now that a Tory tariff victorymeant marching backwards, but there are some things they cannot undo. We may be driven from power. We may desire to be released fromresponsibility. Much of our work may be cut short, much may beoverturned. But there are some things which Tory reaction will notdare to touch, and, like the settlement and reconciliation of SouthAfrica, so the Old-Age Pensions Act will live and grow and ripen asthe years roll by, far beyond the reach of Party warfare and farabove the changing moods of faction. 

There are many political injustices in this country and many absurd, oppressive, or obsolete practices. But the main aspirations of theBritish people are at this present time social rather than political. They see around them on every side, and almost every day, spectaclesof confusion and misery which they cannot reconcile with anyconception of humanity or justice. They see that there are in themodern state a score of misfortunes that can happen to a man withouthis being in fault in any way, and without his being able to guardagainst them in any way. They see, on the other hand, the mighty powerof science, backed by wealth and power, to introduce order, to providesafeguards, to prevent accidents, or at least to mitigate theirconsequences. They know that this country is the richest in the world;and in my sincere judgment the British democracy will not give theirhearts to any Party that is not able and willing to set up thatlarger, fuller, more elaborate, more thorough social organisation, without which our country and its people will inevitably sink throughsorrow to disaster and our name and fame fade upon the pages ofhistory. 

We have done some of that work, and we are going to do more. In movingforward to this great struggle which is approaching, we are going tocarry our social policy along with us. We are not going to fight aloneupon the political and constitutional issue, nor alone upon thedefence of free trade. We are going, fearless of the consequences, confident of our faith, to place before the nation a wide, comprehensive, interdependent scheme of social organisation--to placeit before the people not merely in the speeches or placards of a Partyprogramme, but by a massive series of legislative proposals andadministrative acts. If we are interrupted or impeded in our march, the nation will know how to deal with those who stand in the path ofvital and necessary reforms. And I am confident that in the day ofbattle the victory will be to the earnest and to the persevering; andthen again will be heard the doleful wail of Tory rout and ruin, andthe loud and resounding acclamations with which the triumphant armiesof democracy will march once again into the central place of power. 

THE SECOND READING OF THE ANTI-SWEATING BILL[14]

HOUSE OF COMMONS, _April 28, 1909_

It is a serious national evil that any class of his Majesty's subjectsshould receive in return for their utmost exertions less than a livingwage. 

It was formerly supposed that the workings of the laws of supply anddemand would in the regular and natural course of events, and by asteady progression, eliminate that evil, and achieve adequate minimumstandards. Modern opinion has found it necessary greatly to refineupon these broad generalisations of the truth, and the first cleardivision that we make to-day in questions of wages, is that between ahealthy and unhealthy condition of bargaining. 

Where, as in the great staple trades of this country, you havepowerful organisations on both sides, with responsible leaders ableto bind their constituents to their decisions, conjoined withautomatic scales, or arbitration or conciliation in case of adeadlock, there you have a healthy condition of bargaining, whichincreases the competitive power of the industry, which continuallyweaves more closely together the fortunes of Capital and Labour, andwhich enforces a constant progression in the standards of living andof productive power. But where, as in what we call "Sweated trades, "you have no organisation at all on either side, no parity ofbargaining between employers and employed, where the good employer iscontinually undercut by the bad, and the bad again by the worse; wherethe worker whose whole livelihood depends on the trade is undercut bythe worker to whom it is only a second string; where the feeblenessand ignorance of the workers and their isolation from each otherrender them an easy prey to the tyranny of bad masters, and middlemenone step above them upon the lowest rungs of the ladder, andthemselves held in the grip of the same relentless forces--there youhave a condition not of progress but of progressive degeneration. Andjust as in the former case the upward tendency will be constant if itis not interrupted by external power, so in the latter case thedemoralisation will continue in a squalid welter for periods which arequite indefinite so far as our brief lives are concerned. 

We have seen from the investigations of the last twenty years, whenthe phenomena of sweating have been under close and scientific review, that there is no power of self-cure within the area of the evil. Wehave seen that while the general advance in the standards of work andwages has on the whole been constant, these morbid and diseasedpatches, which we call the Sweated Trades, have not shared in thatimprovement, but have remained in a state of chronic depression anddegeneration. The same shocking facts, in some cases the same pitifulwitnesses, were brought before the Select Committee last year asbefore Lord Dunraven's Committee in 1888. Indeed I am advised that insome respects wages and conditions are worse than they were twentyyears ago. Nor are these melancholy facts confined to any one country. Sweating is not a peculiarity of Great Britain. Practically the sametrades experience the same evils in all other industrial countries. France, Germany, Austria, and America reproduce with great exactnessunder similar economic conditions the same social evils, and in thosecountries, as in ours, Sweated Industries--by which I mean tradeswhere there is no organisation, where wages are exceptionally low, andconditions subversive of physical health and moral welfare--cast darkshadows in what is, upon the whole, the growing and broadening lightof civilisation. 

There is a clear reason for this, which is in itself at once ajustification for the special treatment which we propose for thesetrades, and a means of marking them off more or less definitely fromthe ordinary trades. In the case of any great staple trade in thiscountry, if the rate of wages became unnaturally low compared to otherindustries, and the workers could not raise it by any pressure ontheir part, the new generation at any rate would exercise a preferencefor better pay and more attractive forms of industry. The gradualcorrection of depressed conditions over large periods of time is thuspossible. But in these sweated industries there is no new generationto come to the rescue. They are recruited from a class rather thanfrom a section of the community. The widow, the women folk of thepoorest type of labourer, the broken, the weak, the struggling, thediseased--those are the people who largely depend upon these trades, and they have not the same mobility of choice, exerted, tardily thoughit be, by a new generation, but which is undoubtedly operative uponthe great staple trades of the country. That is an explanation whichaccounts for the same evils being reproduced under similar conditionsin different countries, separated widely from one another and markedby great differences of general conditions. 

I ask the House to regard these industries as sick and diseasedindustries. I ask Parliament to deal with them exactly in the samemood and temper as we should deal with sick people. It would be cruelto prescribe the same law for the sick as for the sound. It would beabsurd to apply to the healthy the restrictions required for the sick. Further, these sweated trades are not inanimate abstractions. They areliving, almost sentient, things. Let the House think of these sweatedtrades as patients in a hospital ward. Each case must be studied andtreated entirely by itself. No general rule can be applied. There isno regulation dose which will cure them all. You cannot effect quickercures by giving larger doses. Different medicines, different diets, different operations are required for each; and consideration, encouragement, nursing, personal effort are necessary for all. Greatflexibility and variety of procedure, and a wide discretionary power, entrusted to earnest and competent people, must characterise anyattempt to legislate on this subject. 

The central principle of this Bill is the establishment of TradeBoards, which will be charged with the duty of fixing a minimum wage. I am very anxious to give these Trade Boards the utmost possiblesubstance and recognition. They will be formed on the principle ofequality of representation for employers and employed, with a skilledofficial chairman or nucleus. That is the principle I have adopted inthe new Arbitration Court recently established. That is the principlewhich will govern the system of Labour Exchanges, shortly to beintroduced, and other measures which may come to be associated withLabour Exchanges, and I think it is an excellent principle. 

At the same time, do not let us suppose that these Trade Boards will, in the first instance, be very strong or representative bodies. Theyare to be formed in trades mainly worked by women, where noorganisation has ever yet taken root, where there are as yet no meansof finding and focusing an effective trade opinion. Where possible, they will be partly elective; in many cases they will, I expect, haveto begin by being almost entirely nominated. In some cases it will beupon the official members alone that the main burden will fall. Icould not ask the House to confer upon bodies of this nebulouscharacter, not representative, not elective in any democratic sense, responsible not to constituents, nor to a public department, nor toParliament itself in any way, the absolute and final power ofenforcing by the whole apparatus of the law any decision, whether wiseor foolish, upon wage questions to which they may come by thenarrowest majority. The work which we entrust to them wholly andfinally is sufficiently difficult and important. We direct them bythis Bill to prescribe minimum rates of wages. They are to find theminimum rate. For that purpose they are as well qualified as any bodythat we could devise. In this sphere their jurisdiction will becomplete. The Board of Trade will not retry the question of what isthe right minimum rate. Another and quite different question will bedecided by the Board of Trade. They will decide whether the minimumrate which has been prescribed by the Trade Board commands sufficientsupport in the trade to make its enforcement by inspection andprosecution likely to be effective. 

That is the division between the responsibility which the Trade Boardswill have and the responsibility which we shall reserve to ourselves. I shall be quite ready in Committee to express that intention, whichis in the Bill, in a simpler and stronger manner, and to make thefunction of the Board of Trade a positive and not a negative one, sothat when the Trade Board has fixed the minimum rate of wages itshall, after an interval of six months, acquire the force of law, andshall be enforced by compulsory powers, unless in the meanwhile theBoard of Trade decides or rules otherwise. For my part, I gladly givean assurance that it is our intention to put the compulsory provisionsof this Bill into full effect upon at least one of the trades in theschedule, at as early a date as possible, in order to bring about thefulfilment of a much-needed and long-overdue experiment. 

Now I come to the probationary period, and I know that there are agreat many who have stated that it is mere waste of time. I, on thecontrary, have been led to the opinion that it is vital to anypractical or effective policy against sweating. It is no use toattempt, in trades as complex and obscure as these with which we aredealing, to substitute outside authority for trade opinion. The onlyhope lies in the judicious combination of the two, each acting andreacting upon the other. A mere increase of the penal provisions andinspection would be a poor compensation for the active support of apowerful section within the trade itself. It is upon the probationaryperiod that we rely to enable us to rally to the Trade Board and toits minimum wage the best employers in the trade. In most instancesthe best employers in the trade are already paying wages equal orsuperior to the probable minimum which the Trade Board will establish. The inquiries which I have set on foot in the various trades scheduledhave brought to me most satisfactory assurances from nearly all theemployers to whom my investigators have addressed themselves. 

For the enforcement of this Act, and for the prevention of evasion andcollusion, I rely upon the factory inspectors, who will reportanything that has come to their notice on their rounds and who willmake themselves a channel for complaints. I rely still more upon thespecial peripatetic inspectors and investigators who will be appointedunder the Act by the Board of Trade, who will have to conductprosecutions under the Act, and who will devote all their time to thepurposes of the Act. These officers will incidentally clothe the TradeBoards with real authority, once the rate has been enforced, in thatthey will be responsible to the Trade Board, and not to some powerfulDepartment of Government external to the Trade Board itself. I relyfurther upon the support of the members of the Trade Boardsthemselves, who will act as watch-dogs and propagandists. I rely uponthe driving power of publicity and of public opinion. But most of allI put my faith in the practical effect of a powerful band ofemployers, perhaps a majority, who, whether from high motives orself-interest, or from a combination of the two--they are notnecessarily incompatible ideas--will form a vigilant and instructedpolice, knowing every turn and twist of the trade, and who will labourconstantly to protect themselves from being undercut by the illegalcompetition of unscrupulous rivals. 

An investigator in the East End of London writes:

"The people who can check evasion are the large firms. Theirtravellers form a magnificent body of inspectors, who ought to seethat the Act is enforced. The checking of evasion will have to becarried out, not so much by visiting workshops and home-workers as byhearing where cheap, low-class goods are coming into the market, andtracing the goods back to the contractors who made them. "

There are solid reasons on which we on this side of the House who areFree Traders rely with confidence, when we associate ourselves withthis class of legislation. First of all, we must not imagine that thisis the only European country which has taken steps to deal withsweating. The first exhibition of sweated products was held in Berlin, and it was from that exhibition that the idea was obtained of holdingthat most valuable series of exhibitions throughout this countrywhich created the driving power which renders this Bill possible. I amadvised that German legislation on some of these questions has evenanticipated us. In other countries legislation is pending onprinciples not dissimilar from those which we advocate. In Bavaria andBaden the latest reports are to the effect that the officialGovernment Reports of Inquiries recommend almost the same and in somecases stronger provisions than those to which we now ask the assent ofthe House of Commons. This may be said in a different form of Austria. All this movement which is going on throughout Europe, and which is sopregnant with good, will be powerfully stimulated by our action inthis country, and that stimulus will not only facilitate our work byremoving the argument which causes hon. Gentlemen opposite anxiety, but it will also, I think, redound to the credit of this country thatit took a leading and prominent position in what is a noble andbenignant work. 

I was delighted to hear the Leader of the Opposition say, in a conciseand cogent sentence, that he could easily conceive many sweated tradesin which the wages of the workers could be substantially raisedwithout any other change except a diminution of price. Sir, the wagesof a sweated worker bear no accurate relation to the ultimate price. Sometimes they vary in the same places for the same work done at thesame time. And sometimes the worst sweating forms a part of theproduction of articles of luxury sold at the very highest price. Webelieve further, however, that decent conditions make for industrialefficiency and increase rather than diminish competitive power. "General low wages, " said Mill, "never caused any country to undersellits rivals; nor did general high wages ever hinder it. " The employerswho now pay the best wages in these sweated trades maintain themselvesnot only against the comparatively small element of foreigncompetition in these trades, but against what is a far more formidablecompetition for this purpose--the competition of those employers whohabitually undercut them by the worst processes of sweating. I cannotbelieve that the process of raising the degenerate and parasiticalportion of these trades up to the level of the most efficient branchesof the trade, if it is conducted by those conversant with theconditions of the trade and interested in it, will necessarily resultin an increase of the price of the ultimate product. It may, even asthe right hon. Gentleman has said, sensibly diminish it through bettermethods. 

Sir, it is on these grounds, and within these limits, that I ask for aSecond Reading for this Bill. 

The principles and objects are scarcely disputed here. Let us go intoCommittee and set to work upon the details, actuated by asingle-minded desire to produce a practical result. It is by theevidences of successful experiment that, more than any other way, weshall forward and extend the area of our operations; and in passingthis Bill the House will not only deal manfully with a grave andpiteous social evil, but it will also take another step along thatpath of social organisation into which we have boldly entered, andupon which the Parliaments of this generation, whatever theircomplexion, will have to march. 

FOOTNOTES:

[14] Otherwise called "The Trade Boards Bill. "

LABOUR EXCHANGES AND UNEMPLOYMENT INSURANCE

HOUSE OF COMMONS, _May 19, 1909_

The functions of Government in relation to industrial life may bedivided into three categories--discipline, organisation, and relief. The control and regulation of industrial conditions by penal anddisciplinary powers belong to the Home Office, the relieving andcurative processes are entrusted to the Local Government Board, andthe organisation of industry falls to the province of the Board ofTrade. The proposals which I now submit to the House are concernedonly with organisation; they can be judged only in relation to thatsection of the subject; they do not pretend to stretch beyond it, orto include other not less important aspects; and I ask that they shallnot be impugned, because, in dealing with the evils which properlyfall within that sphere, they do not extend to other evils that liewithout it. 

I ask permission to introduce a Bill for the establishment of anational system of Labour Exchanges. There is high authority for thisproposal. The Majority and Minority representatives of the Poor LawCommission, differing in so much else, are agreed unanimously in itssupport. "In the forefront of our proposals, " says the MajorityReport, "we place Labour Exchanges. " "This National Labour Exchange, "says the Minority Report, "though in itself no adequate remedy, is thefoundation of all our proposals. It is, in our view, an indispensablecondition of any real reform. " The National Conference of Trade UnionDelegates, convened by the Parliamentary Committee of the Trade UnionCongress, of March 19, 1909, resolved unanimously: "That thisConference of Trade Union delegates, representing 1, 400, 000 members, approves of the establishment of Labour Exchanges on a national basis, under the control of the Board of Trade, provided that the managingboard contains at least an equal proportion of employers andrepresentatives of Trade Unions. " The Central Unemployed Body forLondon, by a Resolution in June 1908, declared in favour of a nationalsystem of Labour Exchanges. Economists as divergent in opinion asProfessor Ashley, of Birmingham, and Professor Chapman, of Manchester, have all approved and urged the project publicly in the strongestterms. Several of the principal members of the late Government have, either in evidence before the Poor Law Commission or in publicspeeches, expressed themselves in favour of Labour Exchanges, and theReport of the delegates of the Labour Party to Germany stronglyapproves of the system which they found there, namely: "theco-ordination and systematic management of Public Labour Exchanges. "

The British authorities which I have mentioned are reinforced by theexample of many foreign countries; and as early as 1904 the Board ofTrade, in its reports on agencies and methods of dealing withunemployed in foreign countries, drew attention to the veryconsiderable extension of Labour Exchanges in the last three years inGermany, Austria, Switzerland, France, and Belgium. Since then Norwayhas been added to the list. Mr. W. Bliss, in the Bulletin of the_Washington Bureau of Labour_ for May, 1908, in the course of a surveyof the whole field of unemployment and of possible remedies, says, "The most important agencies for providing work for the unemployedwho are employable, but have no prospect of returning to their formerpositions, are the public employment bureaux. These are largelydeveloped in a number of European countries, and especially inGermany, where they have grown rapidly in the last twenty years, bothin numbers and in efficiency. " So that the House will see that we havebehind us this afternoon not only a practical consensus of opinionamong authorities at home in favour of the policy, but the spectacleof its successful practice on an extensive scale, and over a period ofyears, in the greatest industrial community of the Continent, and itsextension in various degrees to many other countries. 

I do not, therefore, propose to occupy the time of the House with anyelaborate justification of the merits of the Bill. Those we maydiscuss at our leisure later. I confine myself only to a few generalobservations. Two main defects in modern industrial conditions whichwere emphasised by the Royal Commission were the lack of mobility oflabour and lack of information. With both of these defects theNational System of Labour Exchanges is calculated to deal. Modernindustry has become national. Fresh means of transport knit thecountry into one, as it was never knit before. Labour alone in itssearch for markets has not profited; the antiquated, wasteful, anddemoralising method of personal application--that is to say, thehawking of labour--persists. Labour Exchanges will give labour for thefirst time a modernised market. Labour Exchanges, in the second place, will increase and will organise the mobility of labour. But let mepoint out that to increase the _mobility_ of labour is not necessarilyto increase the _movement_ of labour. Labour Exchanges will notincrease the movement of labour; they will only render that movement, when it has become necessary, more easy, more smooth, more painless, and less wasteful. 

Labour Exchanges do not pretend to any large extent to create newemployment. Their main function will be to organise the existingemployment, and by organising the existing employment to reduce thefriction and wastage, resulting from changes in employment and themovement of workers, to a minimum. By so doing they will necessarilyraise the general economic standard of our industrial life. 

So far as the second defect, "lack of information, " is concerned, asystem of Labour Exchanges promises to be of the highest value. Inproportion as they are used, they will give absolutely contemporaryinformation upon the tendencies of the demand for labour, both inquality and in quantity, as between one trade and another, as betweenone season and another, as between one cycle and another, and asbetween one part of the country and another. They will tell the workerwhere to go for employment. They will tell him, what is scarcely lessimportant, where it is useless to go in search of employment. Properlyco-ordinated and connected with the employment bureaux of the variouseducation authorities, which are now coming into existence in Scotlandand in England, they will afford an increasing means of guiding thenew generation into suitable, promising, and permanent employment, andwill divert them from overstocked or declining industries. They willput an end to that portion of unemployment that is merely local oraccidental in character. They are the only means of grappling with theevils of casual employment, with all its demoralising consequences. They are capable of aiding the process of dovetailing one seasonaltrade into another. A system of Labour Exchanges, dispensing with theneed for wandering in search of work, will make it possible, for thefirst time, to deal stringently with vagrancy. And, lastly, LabourExchanges are indispensable to any system of Unemployment Insurance, as indeed to any other type of honourable assistance to theunemployed, since they alone can provide an adequate test of thedesire for work and of the reality of unemployment. The authority ofboth Reports of the Poor Law Commission may be cited upon thesepoints; and I shall present this Bill to the House as an importantpiece of social and industrial machinery, the need for which has longbeen apparent, and the want of which has been widely and painfullyfelt. 

I said that in the creation of such a system we may profit by theexample of Germany; we may do more, we may improve upon the example ofGermany. The German Exchanges, though co-ordinated and encouraged tosome extent by State and Imperial Governments, are mainly municipal intheir scope. Starting here with practically a clear field and withthe advantage of the experiment and the experience of other lands toguide us, we may begin upon a higher level and upon a larger scale. There is reason to believe that the utility of a system like LabourExchanges, like utility of any other market, increases in proportionto its range and scope. We therefore propose, as a first principle, that our system shall be uniform and national in its character; andhere, again, we are supported both by the Minority and by the MajorityReports of the Royal Commission. 

A Departmental Committee at the Board of Trade has, during the lastsix months, been working out the scheme in close detail. The wholecountry will be divided into ten or twelve principal divisions, eachwith a Divisional Clearing House, and each under a Divisional Chief, all co-ordinated with the National Clearing House in London. Distributed among these 10 Divisions in towns of, let us say, 100, 000or upwards will be between 30 and 40 First-class Labour Exchanges; intowns of 50, 000 to 100, 000 between 40 and 50 Second-class Exchanges;and about 150 minor offices, consisting of Third-class Exchanges, Sub-Offices, and Waiting-rooms, which last will be specially used inconnection with Dock decasualisation. 

The control and direction of the whole system will be under the Boardof Trade. But in order to secure absolute impartiality as between theinterests of capital and labour, Joint Advisory Committees, to containin equal numbers representatives of employers and work-people, will beestablished in the principal centres. Thus we shall apply to the localmanagement of Labour Exchanges the same principle of parity ofrepresentation between workmen and employers under impartial guidanceand chairmanship, that we have adopted in the administration of theTrade Boards Bill, and that, _mutatis mutandis_, is the governingfeature of the Courts of Arbitration which have recently been set up. If this Bill should obtain the assent of Parliament without unduedelay, I should hope to bring the system into simultaneous operationover the whole country, so far as practicable, in the early months ofnext year. Temporary premises will be procured in all cases in thefirst instance; but a programme of building has been prepared, whichin ten years will by a gradual process enable in all the principalcentres these temporary premises to be replaced by permanentbuildings. 

The expense of this system will no doubt be considerable. Its ordinaryworking will not need a sum less than about £170, 000 per year, andduring the period when the building is going on the expenditure willrise to about £200, 000 per year. 

We hope that the Labour Exchanges will become industrial centres ineach town. We hope they will become the labour market. They may, wherenecessary, provide an office where the Trade Board, if there is one, will hold its meetings. We desire to co-operate with trade unions oncordial terms, while preserving strict impartiality between capitaland labour in disputed matters. It may, for instance, be possible fortrade unions to keep their vacant-book in some cases at the exchanges. The structure of those Exchanges may in some cases be such as toenable us to have rooms which can be let to trade unions at a rent, for benefit and other meetings, so as to avoid the necessity underwhich all but the strongest unions lie at the present time ofconducting their meetings in licensed premises. The Exchanges may, asthey develop, afford facilities for washing, clothes-mending, and fornon-alcoholic refreshments to persons who are attending them. Separateprovision will be made for men and for women, and for skilled and forunskilled labour. Boy labour will be dealt with in conjunction withthe local Education Authorities; and travelling expenses may beadvanced on loan, if the management of the Exchange think fit, topersons for whom situations have been found. 

So much for the policy of Labour Exchanges. That is a policy completein itself. It would be considerable if it stood alone; but it does notstand alone. As my right hon. Friend the Chancellor of the Exchequerhas announced in his Budget speech, the Government propose toassociate with the policy of Labour Exchanges a system of UnemploymentInsurance. 

The House knows that the Minority Report advocates a system ofcompulsory labour exchanges, that no person shall engage any man forless than a month except through a Labour Exchange. That is not theproposal we are making. We are making a proposal of voluntary LabourExchanges. I am quite ready to admit that no system of voluntaryLabour Exchanges can deal adequately with the evils and difficultiesof casual labour; but there is one conclusive reason againstcompulsory Labour Exchanges at the present time. To establish asystem of compulsory Labour Exchanges in order to eliminate casuallabour, and so to divide among a certain proportion of workers allavailable employment, would be absolutely and totally to cast out atthe other end a surplus of unemployed: and to do this beforepreparations have been made for dealing with that surplus, would be tocourt an administrative breakdown which could not fail to be attendedwith the gravest possible disaster. Until poor law reform has madefurther progress, to establish a compulsory system of Labour Exchangeswould only increase and not diminish the miseries with which we areseeking to cope. 

We have, therefore, decided that our system of labour exchanges shallbe voluntary in its character. For that very reason there is a greatdanger, to which I have never shut my eyes, that the highest ranks oflabour, skilled workers, members of strong trade unions, would notthink it necessary to use the Exchanges, but would use the veryexcellent apparatus which they have established themselves; thattherefore this expensive system of Exchanges which we are calling intobeing would come to be used only by the poorest of the workers in thelabour market, and, consequently, would gradually relapse and fallback into the purely distress machinery and non-economic machineryfrom which we are labouring to extricate and separate it. It is forthat reason, quite apart from the merits of the scheme of unemploymentinsurance, that the Government are very anxious to associate withtheir system of Labour Exchanges a system of unemployed insurance. IfLabour Exchanges depend for their effective initiation andestablishment upon unemployment insurance being associated with them, it is equally true to say that no scheme of unemployment insurance canbe worked except in conjunction with some apparatus for finding workand testing willingness to work, like Labour Exchanges. The twosystems are complementary; they are man and wife; they mutuallysupport and sustain each other. 

So I come to Unemployment Insurance. It is not practicable at thepresent time to establish a universal system of unemploymentinsurance. We, therefore, have to choose at the very outset of thissubject between insuring some workmen in all trades or all workmen insome. In the first case we should have a voluntary, and in the seconda compulsory system. The risk of unemployment varies so much betweenone man and another owing to relative skill, character, demeanour, andother qualities, that any system of State-aided voluntary insurance isutilised mainly by those most liable to be unemployed, and, consequently, a preponderance of bad risks is established against theInsurance Office fatal to its financial stability. On the other hand, a compulsory system of insurance, which did not add to thecontribution of the worker a substantial contribution from outside, would almost certainly break down, because of the refusal of thehigher class of worker to assume, unsupported, a share of the burdenof the weaker members of the community. 

We have decided to adopt the second alternative, and our insurancesystem will, in consequence, be based upon four main principles. Itwill involve contributions from workmen and employers; it will receivea substantial subvention from the State; it will be organised bytrades; it will be compulsory upon all--employers and employed, skilled and unskilled, unionists and non-unionists alike--withinthose trades. The hon. Member for Leicester[15] with great forceshowed that to confine a scheme of unemployment insurance merely totrade unionists would be trifling with the subject. It would only beaiding those who have, thank God, been most able to aid themselves, without at the same time assisting those who hitherto, under existingconditions, have not been able to make any effective provision. 

To what trades ought we, as a beginning, to apply this system ofcompulsory contributory unemployment insurance? There is a group oftrades specially marked out for the operation of such a policy. Theyare trades in which unemployment is not only high, but chronic, foreven in the best of times it persists; in which it is not only highand chronic, but marked by seasonal and cyclical fluctuations, and inwhich, wherever and howsoever it occurs, it takes the form not ofshort time or of any of those devices for spreading wages andequalising or averaging risks, but of a total, absolute, periodicaldischarge of a certain proportion of the workers. The group of tradeswhich we contemplate to be the subject of our scheme are these:house-building, and works of construction, engineering, machine-andtool-making, ship-building and boat-building, making of vehicles, andmill-sawing. 

That is a very considerable group of industries. They comprise, probably at the present time, 2¼ millions of adult males. Two and aquarter millions of adult males are, roughly speaking, one-third ofthe population of these three kingdoms engaged in purely industrialwork; that is to say, excluding commercial, professional, agricultural, and domestic occupations. Of the remaining two-thirds ofthe industrial population, nearly one-half are employed in the textiletrades, in mining, on the railways, in the merchant marine, and inother trades, which either do not present the same features ofunemployment which we see in these precarious trades, or which, by theadoption of short time or other arrangements, avoid the totaldischarge of a proportion of workmen from time to time. So that thisgroup of trades to which we propose to apply the system ofunemployment insurance, roughly speaking, covers very nearly half ofthe whole field of unemployment; and that half is, on the whole, perhaps the worse half. 

The financial and actuarial basis of the scheme has been verycarefully studied by the light of all available information. Thereport of the actuarial authorities whom I have consulted leaves me inno doubt that, even after all allowance has been made for the factthat unemployment may be more rife in the less organised and lesshighly skilled trades than in the trade unions who pay unemploymentbenefits--which is by no means certain--there is no doubt whateverthat a financially sound scheme can be evolved which, in return formoderate contributions, will yield adequate benefits. I do not at thisstage propose to offer any figures of contributions or benefits to theHouse. I confine myself to stating that we propose to aim at a scaleof benefits which would be somewhat lower both in amount and induration of payments, than that which the best-organised trade unionsprovide for their own members, but which, at the same time, shouldafford a substantial weekly payment extending over by far the greaterpart of the average period of unemployment of all unemployed personsin these trades. 

In order to enable such a scale of benefits to be paid, we should haveto raise a total sum of something between 5d. And 6d. Per week perhead, and this sum will be met by contributions, not necessarilyequal, from the State, the workman, and the employer. For suchsacrifices, which are certainly not extortionate, and which, fairlyadjusted, will not hamper industry nor burden labour, nor cause anundue strain on public finance, we believe it possible to relieve avast portion of our industrial population from a haunting and constantperil which gnaws the very heart of their prosperity and contentment. 

The House will see the connection of this to the Labour Exchanges. Themachinery of the insurance scheme has been closely studied, and, as atpresent advised, we should propose to follow the example of Germany inrespect of Insurance Cards or Books, to which stamps will be affixedweek by week. When a worker in an insured trade loses his employment, all he will have to do is to take his card to the Labour Exchange, which, working in conjunction with the Insurance Office, will find hima job or pay him his benefit. 

The relation of the whole scheme of insurance to the present voluntaryefforts of trade unions requires, and will receive, the most anxiousconsideration, and I am in hopes that we shall be able to makeproposals which would absolutely safeguard trade unions from theunfair competition of a national insurance fund, and will indeed actas a powerful encouragement to voluntary organisations which areproviding unemployed benefit. 

I have thought it right to submit these not inconsiderable proposalsin general outline to the House of Commons at this early stage, inorder that the proposals for Labour Exchanges which we are now puttingforward may be properly understood, and may not be underrated ormisjudged. We cannot bring the system of unemployment insurance beforeParliament in a legislative form this year for five reasons: We havenot now got the time; we have not yet got the money; the finance ofsuch a system has to be adjusted and co-ordinated with the finance ofthe other insurance schemes upon which the Chancellor of the Exchequeris engaged; the establishment of a system of Labour Exchanges is thenecessary forerunner and foundation of a system of insurance; and, lastly, no such novel departure as unemployment insurance couldpossibly be taken without much further consultation and negotiationwith the trade unions and employers specially concerned than theconditions of secrecy under which we have been working have yetallowed. This business of conference and consultation of the fullestcharacter will occupy the winter, when the Board of Trade will conferwith all parties affected, so that the greatest measure of agreementmay be secured for our proposals when they are next year presented intheir final form. 

It is only necessary for me to add that the pressure and prospect ofthese heavy duties have required me to make a re-arrangement of theLabour Department of the Board of Trade. I propose to divide it intothree sections. The first will be concerned with Wages questions andTrade disputes, with Arbitration, Conciliation, and with the workingof the Trade Boards Bill, should it become law; the second, withStatistics, the Census of Production, Special Inquiries, and _TheLabour Gazette_; and the third, with Labour Exchanges and UnemploymentInsurance. 

One of the functions of the last section will be to act as a kind ofintelligence bureau, watching the continual changes of the labourmarket here and abroad, and suggesting any measure which may bepracticable, such as co-ordination and distribution of Governmentcontracts and municipal work, so as to act as a counterpoise to themovement of the ordinary labour market, and it will also, we trust, beable to conduct examinations of schemes of public utility, so thatsuch schemes can, if decided upon by the Government and the Treasury, be set on foot at any time with knowledge and forethought, instead ofthe haphazard, hand-to-mouth manner with which we try to deal withthese emergencies at the present time. 

Such are the proposals which we submit in regard to the organisationsection of this problem. I have carefully confined myself to thatsection. I have not trespassed at all upon the other no less importantor scarcely less important branches, and I am quite certain thisParliament will gladly devote whatever strength it possesses toattempting to grapple with these hideous problems of social chaos, which are marring the contentment and honour of our country, andwhich, neglected, may fatally affect its life and its strength. 

FOOTNOTES:

[15] Mr. Ramsay MacDonald. 

III

THE BUDGET

THE BUDGET RESOLUTIONS (May 4, 1909) 277

THE BUDGET AND NATIONAL INSURANCE (May 23, 1909) 297

THE LAND AND INCOME TAXES (July 17, 1909) 318

THE BUDGET AND THE LORDS (July 26, 1909) 344

THE SPIRIT OF THE BUDGET (Sept. 5, 1909) 357

THE BUDGET AND PROPERTY (Oct. 7, 1909) 384

THE CONSTITUTIONAL MENACE (Oct. 9, 1909) 405

THE BUDGET RESOLUTIONS

HOUSE OF COMMONS, _May 4, 1903_

The Leader of the Opposition this afternoon told us that we were atthe beginning of what would be a very complex and a very protracteddiscussion. If that discussion continues as it has begun, theGovernment will have no reason to complain of it. We have madeextensive and even daring proposals. Those proposals have beenaccepted and, on the whole, even acclaimed by the public at large, andthey have not been substantially challenged in this House. The Leaderof the Opposition, it is true, devoted his reasoned and temperatespeech to making a careful inquiry into the foundations and thecharacter of certain of the taxes by which my right hon. Friendproposes to raise the revenue for the year; and I gathered heaccepted, with such reservations as are proper to all engaged in alarge discussion, and as are particularly appropriate to a Partyleader, the general principle of differentiation of taxation in regardto the amount of property, but that he demurred to and condemneddifferentiation in regard to the character of property. The right hon. Gentleman singled out for special censure and animadversion the twosets of taxes in relation to land and to the licensed trade. He usedan expression about some of the forms of taxation proposed by theChancellor of the Exchequer which was a striking one. He said thatthey diverged from the principles which have hitherto dominatedcivilised society. 

Even at the risk of that accusation we on this side of the House havealways taken and will always assert an entirely different position inregard to the taxation of land and of liquor licences from that of thetaxation of other classes of property. The immemorial custom of nearlyevery modern State, the mature conclusions of many of the greatestthinkers, have placed the tenure, transfer, and obligations of land ina wholly different category from other classes of property. The mereobvious physical distinction between land, which is a vital necessityof every human being and which at the same time is strictly limitedin extent, and other property is in itself sufficient to justify aclear differentiation in its treatment, and in the view taken by theState of the conditions which should govern the tenure of land fromthat which should regulate traffic in other forms of property. Whenthe right hon. Gentleman seeks by comparisons to show that the samereasoning which has been applied to land ought also in logic and byevery argument of symmetry to be applied to the unearned incrementderived from other processes which are at work in our moderncivilisation, he only shows by each example he takes how different arethe conditions which attach to the possession of land and speculationin the value of land from those which attach to other forms ofbusiness speculation. 

"If, " he inquires, "you tax the unearned increment on land, why don'tyou tax the unearned increment from a large block of stocks? I buy apiece of land; the value rises; I buy stocks; their value rises. " Butthe operations are entirely dissimilar. In the first speculation theunearned increment derived from land arises from a wholly sterileprocess, from the mere withholding of a commodity which is needed bythe community. In the second case, the investor in a block of sharesdoes not withhold from the community what the community needs. The oneoperation is in restraint of trade and in conflict with the generalinterest, and the other is part of a natural and healthy process, bywhich the economic plant of the world is nourished and from year toyear successfully and notably increased. 

Then the right hon. Gentleman instanced the case of a new railway anda country district enriched by that railway. The railway, heexplained, is built to open up a new district; and the farmers andlandowners in that district are endowed with unearned increment inconsequence of the building of the railway. But if after a while theirbusiness aptitude and industry creates a large carrying trade, thenthe railway, he contends, gets its unearned increment in its turn. Butthe right hon. Gentleman cannot call the increment unearned which therailway acquires through the regular service of carrying goods, rendering a service on each occasion in proportion to the tonnage ofgoods it carries, making a profit by an active extension of the scaleof its useful business--he cannot surely compare that process withthe process of getting rich merely by sitting still. It is clear thatthe analogy is not true. 

We are further told that the Budget proposals proceed on theassumption that there is a corner in land, and that communities aredenied the opportunity of getting the land required, whereas, it isasserted, there is in fact nothing approaching a corner in land. I donot think the Leader of the Opposition could have chosen a moreunfortunate example than Glasgow. He said that the demand of thatgreat community for land was for not more than forty acres a year. Isthat the only demand of the people of Glasgow for land? Does thatreally represent the complete economic and natural demand for theamount of land a population of that size requires to live on? I willadmit that at present prices it may be all that they can afford topurchase in the course of a year. But there are one hundred and twentythousand persons in Glasgow who are living in one-room tenements; andwe are told that the utmost land those people can absorb economicallyand naturally is forty acres a year. What is the explanation? Becausethe population is congested in the city the price of land is high uponthe suburbs, and because the price of land is high upon the suburbsthe population must remain congested within the city. That is theposition which we are complacently assured is in accordance with theprinciples which have hitherto dominated civilised society. 

But when we seek to rectify this system, to break down this unnaturaland vicious circle, to interrupt this sequence of unsatisfactoryreactions, what happens? We are not confronted with any great argumenton behalf of the owner. Something else is put forward, and it isalways put forward in these cases to shield the actual landowner orthe actual capitalist from the logic of the argument or from the forceof a Parliamentary movement. Sometimes it is the widow. But thatpersonality has been used to exhaustion. It would be sweating in thecruellest sense of the word, overtime of the grossest description, tobring the widow out again so soon. She must have a rest for a bit; soinstead of the widow we have the market-gardener--the market-gardenerliable to be disturbed on the outskirts of great cities, if thepopulation of those cities expands, if the area which they require fortheir health and daily life should become larger than it is atpresent. 

I should like to point out to the Committee that the right hon. Gentleman, in using this argument about the market-gardener, recognises very clearly--and I think beyond the possibility of awithdrawal--the possibility of these cities expanding and taking up alarger area of ground in consequence of the kind of taxation which myright hon. Friend in his land taxes seeks to impose. But let thatpass. What is the position disclosed by the argument? On the one handwe have one hundred and twenty thousand persons in Glasgow occupyingone-room tenements; on the other, the land of Scotland. Between thetwo stands the market-gardener, and we are solemnly invited, for thesake of the market-gardener, to keep that great population congestedwithin limits that are unnatural and restricted to an annual supply ofland which can bear no relation whatever to their physical, social, and economic needs--and all for the sake of the market-gardener, whocan perfectly well move farther out as the city spreads, and who wouldnot really be in the least injured. 

We take the view that land cannot be regarded as an ordinarycommodity, nor are we prepared to place publicans' licences in thesame position as ordinary property. A licence is a gift from theState, and the licensed trade is subject to special restrictions andspecial taxation; this has been recognised by all parties and by allGovernments. The position in regard to licences, as we know perfectlywell, has been sensibly and, indeed, entirely altered in the course ofthe last few years. We have seen the assertion on the part of thelicensed trade of their right to convert their annual tenancy of alicence from what it has been understood to be, to a freehold, and inthat position they must face the logical consequences of the argumentsthey have used and of their action. If there are any hardships to themin the taxation proposed, let the hardships be exposed to Parliamentand they will be considered in no spirit of prejudice or malice. Donot, however, let us have attempts to represent that the tax whichinvolves an increase in the cost of production extinguishes theprofits of the industry. It does not necessarily affect the profits ofthe industry; it is not a deduction from resultant profits; it is anincident in the turnover. If there are hard cases and specialinstances, we are prepared to meet them with the closest attention andwith a desire to avoid severity or anything like the appearance ofharsh treatment of individuals. But we decline to regard licences orland on the same footing as ordinary property. Licences are not to beregarded as ordinary private property, but as public property whichought never to have been alienated from the State. 

No one will deny that we are making very considerable proposals toParliament for the finance of the year; but the Conservative Partyhave gravely compromised their power of resistance. Those who desireto see armaments restricted to the minimum consistent with nationalsecurity, those who labour to combat the scares of war, and to showhow many alarms have no foundation, --those are not ill-situated, ifthey choose to make criticisms on the scale and scope of the financerequired for the year's expenditure. But an Opposition that day afterday exposes the First Lord of the Admiralty and the Prime Minister toa rain of questions and cross-questions, the only object of which, oran important object of which, is to promote a feeling of insecurity, involving demands for new expenditure of an almost indefinitecharacter, those who, like the right hon. Member for Dover, [16] hurryto and fro in the land saying--or was it singing?--"We want eight, andwe won't wait"--they, at least, are not in the best position to tellthe taxpayer to call on some one else. Surely a reputation forpatriotism would be cheaply gained by clamouring for ships that arenot needed, to be paid for with money that is to come from otherpeople. 

There is another set of arguments to which I should like to refer. Wehave been long told that this Budget would reveal the bankruptcy offree-trade finance, and the Leader of the Opposition, seeking fromtime to time for a sound economic foothold in the fiscal quicksands inwhich he is being engulfed, has endeavoured to rest the sole of hisfoot on tariff for revenue. The adoption of a policy of tariff reform, we have been told, had become absolutely necessary if the revenue ofthe country was to be obtained and if a natural expansion were to beimparted to it. But now, if we may judge from the newspapers, one ofthe complaints made against the free-trade system and the free-tradeBudget of my right hon. Friend is not that the revenue will expand toolittle, but that there is the possibility that it will expand toomuch. It is not that we have reached the limits of practicablefree-trade taxation, but that the taxation we now ask Parliament toassent to, will yield in the second year a much more abundant returnthan in the first year, and that in subsequent years the yield willincrease still further. In the words of _The Times_ newspaper: "TheChancellor of the Exchequer has laid broad and deep the basis offurther revenue for future years. "

Those who lately taunted us with being arrested by a dead wall ofCobdenite principles are now bewailing that we have opened up broadavenues of financial advance. They came to bewail the deficit of thisyear: they remained to censure the surplus of next. We may, no doubt, in the future hear arguments of how protection will revive industryand increase employment, as we have heard them in the past; but thereis one argument which I should think it unlikely would be effectivelyused against us in the future, and that is that a free-trade systemcannot produce revenue, because one of the criticisms which isemphatically directed against this Budget is on account of that veryexpansiveness of revenue which it was lately declared a free-tradesystem never could produce. 

But that is not the only vindication of free-trade finance which is athand. How have foreign countries stood the late depression in trade?The shortfall of the revenue from the estimates in this country waslast year less than two millions, in Germany it was eight millions, and in the United States over nineteen millions. Let the House seewhat fair-weather friends these protectionist duties are. In times ofdepression they shrink. In times of war they may fail utterly. Whenthey are wanted, they dwindle, when they are wanted most urgently, they fade and die away altogether. 

And what is true of the taxation of manufactured articles as afoundation for any fiscal policy is true still more of the taxation offood, and of no country is it so true as of this island. For if youwere ever engaged in a war which rendered the highways of the oceaninsecure the rise in prices would be such that all food taxes wouldhave to be swept away at once by any Government which desired to usethe whole vigour of its people in prosecuting the war. This year, withits trade depression and its excellent maintenance of the revenue, has seen the vindication of free trade as a revenue-producinginstrument; next year will see its triumph. 

I have no apprehensions about the Budget which is now before theCommittee. As Mr. Gladstone said, in introducing the Reform Bill of1884, what is wanted to carry this measure is concentration andconcentration only, and what will lose this measure is division anddivision only. And I venture to think that it will not only be ademonstration of the soundness of the economic fiscal policy we havelong followed, but it will also be a demonstration of the fiscal andfinancial strength of Great Britain which will not be without its useand value upon the diplomatic and perhaps even upon the navalsituation in Europe. 

The right honourable Member for East Worcestershire[17] said thisBudget was the work of several sessions, if not indeed of severalParliaments. The statement is exaggerated. The proposals outlined donot in any degree transcend the limits of the practical. A socialpolicy may be very large, but at the same time it may be very simple. All these projects of economic development, of labour exchanges, ofinsurance for invalidity, and unemployment, which depend on moneygrants, may require very careful and elaborate administrativeadjustment; but so far as Parliament is concerned they do not imposedifficulties or make demands upon the time of the House in any waycomparable to those which are excited by the passage of an Educationor a Licensing Bill, and I see no reason whatever why we should notanticipate that in the course of this session and next session weshould be able to establish a wide and general system of nationalinsurance, which, more than any other device within the reach of thisgeneration of the workers of our country, will help to hold off fromthem some of the most fatal and most cruel perils which smash theirhouseholds and ruin the lives of families and of workmen. 

On many grounds we may commend this Budget to the House. It makesprovision for the present. It makes greater provision for the future. Indirect taxation reaches the minimum. Food taxation reaches theminimum since the South African war. Certainly the working classeshave no reason to complain. Nothing in the Budget touches thephysical efficiency and energy of labour. Nothing in it touches theeconomy of the cottage home. Middle-class people with between £300 and£2, 000 a year are not affected in any considerable degree, except bythe estate duties, and in that not to a large extent, while in somecases they are distinctly benefited in the general way of taxation. The very rich are not singled out for peculiar, special, or invidiousforms of imposition. 

The chief burden of the increase of taxation is placed upon the mainbody of the wealthy classes in this country, a class which in numberand in wealth is much greater than in any other equal community, ifnot, indeed, in any other modern State in the whole world; and that isa class which, in opportunities of pleasure, in all the amenities oflife, and in freedom from penalties, obligations, and dangers, is morefortunate than any other equally numerous class of citizens in any ageor in any country. That class has more to gain than any other class ofhis Majesty's subjects from dwelling amid a healthy and contentedpeople, and in a safely guarded land. 

I do not agree with the Leader of the Opposition, that they will meetthe charges which are placed upon them for the needs of this year byevasion and fraud, and by cutting down the charities which their goodfeelings have prompted them to dispense. The man who proposes to meettaxation by cutting down his charities, is not the sort of man who islikely to find any very extensive source of economy in the charitieswhich he has hitherto given. As for evasion, I hope the right hon. Gentleman and his supporters underrate the public spirit whichanimates a proportion at any rate of the class which would be mostnotably affected by the present taxation. And there is for theirconsolation one great assurance which is worth much more to them thana few millions, more or less, of taxation. It is this--that we arethis year taking all that we are likely to need for the policy whichis now placed before the country, and which will absorb the energiesof this Parliament. And, so far as this Parliament is concerned, it isextremely unlikely, in the absence of a national calamity, that anyfurther demand will be made upon them, or that the shifting and vagueshadows of another impending Budget will darken the prospects ofimproving trade. 

When all that may be said on these grounds has been said, we do notattempt to deny that the Budget raises some of the fundamental issueswhich divide the historic Parties in British politics. We do not wantto embitter those issues, but neither do we wish to conceal them. Weknow that hon. Gentlemen opposite believe that the revenue of thecountry could be better raised by a protective tariff. We areconfident that a free-trade system alone would stand the strain ofmodern needs and yield the expansive power which is necessary at thepresent time in the revenue. And our proof shall be the swiftaccomplishment of the fact. The right hon. Gentleman opposite and hisfriends seek to arrest the tendency to decrease the proportion ofindirect to direct taxation which has marked, in unbroken continuity, the course of the last sixty years. We, on the other hand, regard thattendency as of deep-seated social significance, and we are resolvedthat it shall not be arrested. So far as we are concerned, we areresolved that it shall continue until in the end the entire chargeshall be defrayed from the profits of accumulated wealth and by thetaxation of those popular indulgences which cannot be said in any wayto affect the physical efficiency of labour. The policy of theConservative Party is to multiply and extend the volume and variety oftaxes upon food and necessaries. They will repose themselves, notonly, as we are still forced to do, on tea and sugar, but upon breadand meat--not merely upon luxuries and comforts, but also on articlesof prime necessity. Our policy is not to increase, but wheneverpossible to decrease, and ultimately to abolish altogether, taxes onarticles of food and the necessaries of life. 

If there is divergence between us in regard to the methods by which weare to raise our revenue, there is also divergence in regard to theobjects on which we are to spend them. We are, on both sides, inclinedto agree that we are approaching, if we have not actually entered on, one of the climacterics of our national life. We see new forces atwork in the world, and they are not all friendly forces. We see newconditions abroad and around us, and they are not all favourableconditions; and I think there is a great deal to be said for those whoon both sides of politics are urging that we should strive for a moreearnest, more strenuous, more consciously national life. But there wepart, because the Conservative Party are inclined too much to reposetheir faith for the future security and pre-eminence of this countryupon naval and military preparations, and would sometimes have usbelieve that you can make this country secure and respected by themere multiplication of ironclad ships. We shall not exclude thatprovision, and now indeed ask the Committee to enable us to take thesteps to secure us that expansion of revenue which will place ourfinancial resources beyond the capacity of any Power that we need totake into consideration. But we take a broader view. We are not goingto measure the strength of great countries only by their materialresources. We think that the supremacy and predominance of our countrydepend upon the maintenance of the vigour and health of itspopulation, just as its true glory must always be found in thehappiness of its cottage homes. We believe that if Great Britain is toremain great and famous in the world, we cannot allow the presentsocial and industrial disorders, with their profound physical andmoral reactions, to continue unchecked. We propose to you a financialscheme, but we also advance a policy of social organisation. It willdemand sacrifices from all classes; it will give security to allclasses. By its means we shall be able definitely to control some ofthe most wasteful processes in our social life, and without it ourcountry will remain exposed to vital dangers, against which fleets andarmies are of no avail. 

FOOTNOTES:

[16] Mr. Wyndham. 

[17] Mr. Austen Chamberlain. 

THE BUDGET AND NATIONAL INSURANCE

THE FREE TRADE HALL, MANCHESTER, _May 23, 1909_

(From _The Manchester Guardian_, by permission. )

Considering that you have all been ruined by the Budget, I think itvery kind of you to receive me so well. When I remember all theinjuries you have suffered--how South Africa has been lost; how thegold mines have been thrown away; how all the splendid army which Mr. Brodrick got together has been reduced to a sham; and how, of course, we have got no navy of any kind whatever, not even a fishing smack, for the thirty-five millions a year we give the Admiralty; and when Iremember that in spite of all these evils the taxes are so oppressiveand so cruel that any self-respecting Conservative will tell you hecannot afford either to live or die, I think it remarkable that youshould be willing to give me such a hearty welcome back to Manchester. Yes, sir, when I think of the colonies we have lost, of the Empire wehave alienated, of the food we have left untaxed, and the foreignerswe have left unmolested, and the ladies we have left outside, Iconfess I am astonished to find you so glad to see me here again. 

It is commonly said that our people are becoming hysterical, and thatBritain is losing her old deep-seated sagacity for judging men andevents. That is not my view. I have been taught that the dock alwaysgrows near the nettle. I am inclined to think that in a free communityevery evil carries with it its own corrective, and so I believe thatsensationalism of all kinds is playing itself out, and, overdoing, isitself undone. And the more our scaremongers cry havoc, and panic, andairships, and sea-serpents, and all the other things they see floatingaround, the greater is the composure and the greater is the contemptwith which the mass of the nation receives these revelations, and themore ready they are to devote their mind to the large and seriousproblems of national and social organisation which press for solutionand for action at the present time, and upon which his Majesty'sGovernment have notable proposals to make. 

I come to you this afternoon to speak about the political situationand the Budget, or rather I come to speak to you about the Budget, because the Budget is the political situation; and I ask you, as if itwere at an election, whether you will support the policy of the Budgetor not. Let us look into it. 

What is the position in which we find ourselves? After reducing thetaxes on coal, on tea, on sugar, and on the smaller class of incomesby nearly £7, 000, 000 a year, and after paying back £40, 000, 000 of debtin three years, we find that new circumstances and new needs make itnecessary that we should obtain fresh revenue for the service of theState. 

What are the reasons for this demand? There are three reasons--andonly three. Old-age pensions, the navy, and the decrease in therevenue derived from alcoholic liquor. From those three causes werequire sixteen millions more money this year than we did last year. Now who has a right--this is my first question--to reproach us forthat? Certainly the Conservative Party have no right. 

Take first the case of old-age pensions. I do not think their recordis a very good one on that. They promised old-age pensions to win thegeneral election of 1895. They were in power for ten years and theymade no effort to redeem their pledge. Again, Mr. Chamberlain, in1903, promised old-age pensions as a part of his Tariff Reformproposal, but the Conservative Party refused to agree to the inclusionof old-age pensions in that programme and forced that great man in theheight of his power and his career to throw out old-age pensions fromthe Tariff Reform programme and to write a letter to the newspapers tosay that he had done so. 

We, the Liberal Party, did not promise old-age pensions at theelection of 1906. The subject was scarcely mentioned by any of thecandidates who are now your Members. Certainly it did not occupy atall a prominent position. We did not promise old-age pensions; we gaveold-age pensions. When the Old-Age Pensions Bill was before the Houseof Commons, what was the attitude of the Conservative Party? Did theydo anything to try to reduce or control the expenditure of that greatdeparture? On the contrary. As my right honourable friend theChancellor of the Exchequer has told the House of Commons, amendmentsto the Old-Age Pensions Bill were moved or received the officialsupport of the Whips of the Conservative Party which would haveraised the cost of that scheme to fourteen millions a year. And theLiberal Government, which was making this great effort, which wasdoing the work, which was keeping the Tory promise, was reproached andwas derided for not accepting the proposals which these irresponsiblephilanthropists, these social reformers on the cheap, theselimited-liability politicians, were so ready to move. And LordHalsbury, the late Lord Chancellor, one of the leaders of theConservative Party, a man with a powerful influence in their councils, said in a public speech that the old-age pensions as proposed by theGovernment were so paltry as to be almost a mockery. 

I do not think any fair-minded or impartial man, or any averageBritish jury, surveying the record of the Conservative Party uponold-age pensions, could come to any other conclusion than that theyhad used this question for popularity alone; that they never meant togive old-age pensions; that they only meant to get votes by promisingto give them; that they would have stopped them being given if theycould; that while the Bill was on its way they tried to embarrass theGovernment, and to push things to unpractical extremes; and now, evenwhen the pensions have been given, they would not pay for them if theycould help it. Let me say that I think the conclusion, which I believeany jury would come to, would perhaps be rather harsh upon theConservative Party. I believe they meant better than their record; Iam willing to admit that. But their record is before us, and it is abad one, and upon the facts I have no hesitation in saying that it isnot open to them to protest--they have not even an inch of foothold toprotest--against any expenditure which we may now have to incur inorder to defray the consequences of the policy of old-age pensions. Somuch for the first cause of the increased expenditure. 

I pass to the navy. The Naval Estimates have risen by three millionsthis year. I regret it; but I am prepared to justify it. There will bea further increase next year. I regret it; but within proper limitsnecessary to secure national safety I shall be prepared to justify it;but I hope you will not expect me to advocate a braggart andsensational policy of expenditure upon armaments. I have always beenagainst that, as my father was before me. 

In my judgment, a Liberal is a man who ought to stand as a restrainingforce against an extravagant policy. He is a man who ought to keepcool in the presence of Jingo clamour. He is a man who believes thatconfidence between nations begets confidence, and that the spirit ofpeace and goodwill makes the safety it seeks. And, above all, I thinka Liberal is a man who should keep a sour look for scaremongers ofevery kind and of every size, however distinguished, howeverridiculous--and sometimes the most distinguished are the mostridiculous--a cold, chilling, sour look for all of them, whether theirpanic comes from the sea or from the air or from the earth or from thewaters under the earth. 

His Majesty's Government are resolved that the defensive measures ofthis country shall be prescribed by the policy of Ministersresponsible to Parliament, and by the calculations, subject to thatpolicy, of the experts on whom those Ministers rely, and not by thefolly and the clamour of Party politicians or sensational journalists. In that determination we as a Government are united, and we shallremain united. Yet it is clear that the increase in the NavalEstimates of this year must be followed by another increase in thoseof next year. That is deplorable. It will impose upon our finances astrain which some other nations would not find it very easy to bear, but which, if the necessity be proved, this country will not beunwilling, and will certainly not be unable to support. 

Well, but what have the Conservative Party got to say about it? Havethey any right to complain of the taxes which are necessary for themaintenance of our naval power? Do we not see that they are everexerting themselves to urge still greater expenditure upon the nation?He is a poor sort of fellow, a penny-plain-twopence-coloured kind ofpatriot who goes about shouting for ships, and then grudges the moneynecessary to build them. And when Mr. Balfour tells us that "giganticsacrifices" are required, and that those gigantic sacrifices "mustbegin now, " and then at the same time objects to the taxes by whichthe Government proposes to raise the money, he puts himself in a veryqueer position. 

I have dealt with two of the causes which have led to our demand forfurther revenue--old-age pensions and the navy. Upon neither of themhave the Conservative Party any ground for attacking us. What is thethird? Ah, gentlemen, I agree that there is one cause of theprospective deficit for which we are budgeting for which theConservative Party is in no way responsible. I mean the decline in theconsumption of alcoholic liquors. Nothing that they have said andnothing that they have done has, in intention or in fact, contributedto the drying up of that source of revenue. On the contrary, by theirlegislation, by the views they have taken of the rights of thelicensed trade, by their resistance to every measure of temperancereform, by their refusal even to discuss in the House of Lords thegreat Licensing Bill of last year, by their association with thebrewers and with the liquor traffic generally, they have done all theycould--I do them the justice to admit it--to maintain the Customs andExcise from alcoholic liquors at the highest level. If the habits ofthe people, under the influences of a wider culture, of variety, ofcomfort, of brighter lives, and of new conceptions, have steadilyundergone a beneficent elevation and amelioration, it has been inspite of every obstacle that wealth and rank and vested interest couldinterpose. 

The money has to be found. There is no Party in the State who cancensure us because of that. Our proposals for enlarging the publicrevenue are just and fair to all classes. They will not, in spite ofall these outcries you hear nowadays, sensibly alter the comfort orstatus, or even the elegance of any class in our great and variedcommunity. No man, rich or poor, will eat a worse dinner for ourtaxes. 

Of course, from a narrow, electioneering point of view, there are agreat many people--I believe they are wrong--who think we should havedone much better if we had put another penny on the income tax insteadof increasing the tax upon tobacco. Well, I have come here thisafternoon to tell you that we think it right that the working classesshould be asked to pay a share towards the conduct of a democraticState. And we think that taxes on luxuries, however widely consumed, are a proper channel for such payment to be made. We believe that theworking classes are able to pay by that channel, and we believe, further, that they are ready to pay. We do not think that in this old, wise country they would have respected any Government which at a timelike this had feared to go to them for their share. 

I have a good confidence that this Budget is going to go through. Ifthere are hardships and anomalies in particular cases or particularquarters, we are ready to consider them. They will emerge in thediscussions of the House of Commons, and we have every desire toconsider them and to mitigate them. But we believe in the situation inwhich we find ourselves in this country, and in the general situationof the world at the present time--that the taxes on incomes over£3, 000 a year, upon estates at death, on motor-cars before they causedeath, upon tobacco, upon spirits, upon liquor licences, which reallybelong to the State, and ought never to have been filched away; and, above all, taxes upon the unearned increment in land are necessary, legitimate, and fair; and that without any evil consequences to therefinement or the richness of our national life, still less any injuryto the sources of its economic productivity, they will yield revenuesufficient in this year and in the years to come to meet the growingneeds of Imperial defence and of social reform. 

This Budget will go through. It will vindicate the power of the Houseof Commons. It will show, what some people were inclined to forget, that in our Constitution a Government, supported by a House of Commonsand the elected representatives of the people, has in fact a fullcontrol of national affairs, and has the means of giving effect to itsintentions, to its policy, and to its pledges in every sphere ofpublic affairs. 

That is one thing which the passage of this Budget will show. Let notthat be overlooked. But that is not the only thing; the Budget will domore than that. It will reveal the financial strength of Britain. At atime when every European country is borrowing merely for the needs ofordinary annual expenditure, when all these disturbing navalprogrammes, which are injuring the peace of the world and the securityand progress of civilisation, are being supported by borrowed money;and when the credit of Germany has fallen below that of Italy, thiscountry, which has necessarily to make the biggest expenditure fornaval defence of any country, will be found, under a Free Trade systemand by our proposals, able not only to pay its way, but to pay off thedebts of the past--to pay off the debts of our predecessors--even inthe worst of times at the rate of something like £7, 000, 000 a year. 

I have spoken to you of the causes which in the past have led up tothis Budget. I have spoken to you of its present justification. Whatof the future? If I had to sum up the immediate future of democraticpolitics in a single word I should say "Insurance. " That is thefuture--Insurance against dangers from abroad. Insurance againstdangers scarcely less grave and much more near and constant whichthreaten us here at home in our own island. I had the honour andopportunity a few days ago of explaining to the House of Commons ourproposals for unemployment insurance. That is a considerable matter. It stands by itself. It is a much simpler question than invalidityinsurance; but it is a great matter by itself. Indeed, I thought whileI was explaining it to the House of Commons that I had not made suchan important speech since I had the honour of explaining the detailsof the Transvaal Constitution. 

Well, what is the proposal? The proposal is that you should make abeginning. We have stood still too long. We should begin forthwith, taking some of the greatest trades of the country in whichunemployment is most serious, in which fluctuations are most severe, in which there are no short-time arrangements to mitigate theseverity to the individual; and that a system of compulsorycontributory insurance, with a large subvention from the State, shouldbe introduced into those great industries. 

But our proposals go farther than that. The State assistance tounemployment insurance will not be limited to those trades in which itis compulsory. Side by side with the compulsory system we shall offerfacilities to voluntary insurance schemes in other trades, managed bytrade unions or by societies or groups of workmen. Moreover, wecontemplate that the State insurance office should undertake, ifdesired, the insurance against unemployment of any individual workmanin any trade outside of those for which compulsory powers arerequired, and should afford to these individuals an equivalent supportto that which is given in the trades which are subject to thecompulsory system. 

Of course you will understand that the terms, that can be offeredunder a voluntary or partial system, are not so good as those whichcan be obtained in the compulsory system of a great trade. Where allstand together, it is much better for each. But still it is certainthat individuals who take advantage of the insurance policy whichwill be introduced, and I trust carried through Parliament next year, will be able to secure terms which will be much more favourable thanany which are open to them by their unaided contributions at thepresent time, because their contributions will be reinforced by thecontributions of the State. Further, if our beginning proves a successthe attempt and the system will not stop there. It will be extended, and in proportion as experience and experiment justify its extension, in proportion as the people of this country desire its extension, itmust eventually cover, in course of years, the whole of our greatindustrial community. 

Well now, it is said that in adopting the policy of contributoryinsurance the Government have admitted that they were wrong inestablishing old-age pensions upon the non-contributory basis. Now Ido not think that is true. There is no inconsistency or contradictionbetween a non-contributory system of old-age pensions and acontributory system of insurance against unemployment, sickness, invalidity, and widowhood. The circumstances and conditions areentirely different. The prospect of attaining extreme old age, ofliving beyond threescore years and ten, which is the allotted span ofhuman life, seems so doubtful and remote to the ordinary man, when inthe full strength of manhood, that it has been found in practicealmost impossible to secure from any very great number of people theregular sacrifices which are necessary to guard against old age. 

But unemployment, accident, sickness, and the death of thebread-winner are catastrophes which may reach any household at anymoment. Those vultures are always hovering around us, and I do notbelieve there is any sensible, honest man who would not wish to guardhimself against them, if it were in his power to make the necessarycontribution, and if he were sure--this is a very importantpoint--that he would not by any accident or fraud or muddle be doneout of the security he had paid for. And if we choose to adopt onesystem of State-aid for dealing with one class of need, and quite adifferent system for dealing with quite a different class of need, itdoes not lie with any one, least of all does it lie with those whohave impartially neglected every problem and every solution, toreproach us with inconsistency. 

But I go farther. The Old-Age Pensions Act, so far from being inconflict with a scheme of contributory insurance, is really its mosthelpful and potent ally. The fact that at seventy the State pension isassured to all those who need it, makes a tremendous difference toevery form of insurance confined to the years before seventy, whetherfor old age or for invalidity. I asked an eminent actuary the otherday to make me some calculations. They are rough, generalcalculations, and no doubt they might be more exact. But roughly, Ibelieve it to be no exaggeration to say that the rates to cover a mantill seventy are in many cases scarcely half what they would be, ifthey had to cover him till death. Do you see what that means? It is aprodigious fact. It is the sort of fact by the discovery of whichpeople make gigantic fortunes; and I suggest to you that we shouldmake this gigantic fortune for John Bull. It means that the wholefield of insurance has become much more fruitful than it ever wasbefore, that there is a new class of insurance business possible whichnever was possible before. It means that the whole field of insuranceis far more open to the poorest class of people than it was before, and that with a proper system the benefits of the Old-Age PensionsAct would not be confined to the actual pensioners who are drawingtheir money, but would extend forwards in anticipation to all otherclasses and to all other people, and that so far as five shillings aweek is concerned--that is not much unless you have not got it--theactuarial position of every man and woman in this country has beenenormously improved by the Old-Age Pensions Act. 

It is of that improvement that we mean to take advantage next year. Next year, when Free Trade will have yielded the necessary funds tothe revenue, we mean to move forward into this great new field. Butlet me say one thing which is of the utmost importance. We mustremember that the field of insurance is already largely covered by agreat mass of benevolent and friendly societies, just as the field ofunemployment insurance is already occupied to some extent by tradeunions, and the Government would not approve of any development orextension of the policy of insurance which did not do full justice toexisting institutions, or which did not safeguard those institutions, to whom we owe so inestimable and incommensurable a debt, or causedany sudden disturbance or any curtailment of their general methods ofbusiness. On the contrary, we believe that when our proposals are putin their full detail before the country, they will be found to benefitand encourage and not to injure those agencies which have so long beenvoluntarily and prosperously at work. 

The decisive question is this--will the British working classesembrace the opportunities which will shortly be offered to them? Theyare a new departure; they involve an element of compulsion and ofregulation which is unusual in our happy-go-lucky English life. Theopportunity may never return. For my own part, I confess to you, myfriends in Manchester, that I would work for such a policy and wouldtry to carry it through even if it were a little unpopular at first, and would be willing to pay the forfeit of a period of exclusion frompower, in order to have carried such a policy through; because I knowthat there is no other way within the reach of this generation of menand women by which the stream of preventable misery can be cut off. 

If I had my way I would write the word "Insure" over the door of everycottage, and upon the blotting-book of every public man, because I amconvinced that by sacrifices which are inconceivably small, which areall within the power of the very poorest man in regular work, familiescan be secured against catastrophes which otherwise would smash themup for ever. I think it is our duty to use the strength and theresources of the State to arrest the ghastly waste not merely of humanhappiness but of national health and strength which follows when aworking man's home which has taken him years to get together is brokenup and scattered through a long spell of unemployment, or when, through the death, the sickness, or the invalidity of thebread-winner, the frail boat in which the fortunes of the family areembarked founders, and the women and children are left to strugglehelplessly on the dark waters of a friendless world. I believe it iswell within our power now, before this Parliament is over, toestablish vast and broad throughout the land a mighty system ofnational insurance which will nourish in its bosom all worthy existingagencies and will embrace in its scope all sorts and conditions ofmen. 

I think it is not untrue to say that in these years we are passingthrough a decisive period in the history of our country. The wonderfulcentury which followed the Battle of Waterloo and the downfall of theNapoleonic domination, which secured to this small island so long andso resplendent a reign, has come to an end. We have arrived at a newtime. Let us realise it. And with that new time strange methods, hugeforces, larger combinations--a Titanic world--have sprung up aroundus. The foundations of our power are changing. To stand still would beto fall; to fall would be to perish. We must go forward. We will goforward. We will go forward into a way of life more earnestly viewed, more scientifically organised, more consciously national than any wehave known. Thus alone shall we be able to sustain and to renewthrough the generations which are to come, the fame and the power ofthe British race. 

LAND AND INCOME TAXES IN THE BUDGET

EDINBURGH, _July 17, 1909_

(From _The Times_, by permission. )

We are often assured by sagacious persons that the civilisation ofmodern States is largely based upon respect for the rights of privateproperty. If that be true, it is also true that such respect cannot besecured, and ought not, indeed, to be expected, unless property isassociated in the minds of the great mass of the people with ideas ofjustice and of reason. 

It is, therefore, of the first importance to the country--to anycountry--that there should be vigilant and persistent efforts toprevent abuses, to distribute the public burdens fairly among allclasses, and to establish good laws governing the methods by whichwealth may be acquired. The best way to make private property secureand respected is to bring the processes by which it is gained intoharmony with the general interests of the public. When and whereproperty is associated with the idea of reward for services rendered, with the idea of recompense for high gifts and special aptitudesdisplayed or for faithful labour done, then property will be honoured. When it is associated with processes which are beneficial, or which atthe worst are not actually injurious to the commonwealth, thenproperty will be unmolested; but when it is associated with ideas ofwrong and of unfairness, with processes of restriction and monopoly, and other forms of injury to the community, then I think that you willfind that property will be assailed and will be endangered. 

A year ago I was fighting an election in Dundee. In the course of thatelection I attempted to draw a fundamental distinction between theprinciples of Liberalism and of Socialism, and I said "Socialismattacks capital; Liberalism attacks monopoly. " And it is from thatfundamental distinction that I come directly to the land proposals ofthe present Budget. 

It is quite true that the land monopoly is not the only monopoly whichexists, but it is by far the greatest of monopolies; it is a perpetualmonopoly, and it is the mother of all other forms of monopoly. It isquite true that unearned increments in land are not the only form ofunearned or undeserved profit which individuals are able to secure;but it is the principal form of unearned increment, derived fromprocesses, which are not merely not beneficial, but which arepositively detrimental to the general public. Land, which is anecessity of human existence, which is the original source of allwealth, which is strictly limited in extent, which is fixed ingeographical position--land, I say, differs from all other forms ofproperty in these primary and fundamental conditions. 

Nothing is more amusing than to watch the efforts of our monopolistopponents to prove that other forms of property and increment areexactly the same and are similar in all respects to the unearnedincrement in land. They talk to us of the increased profits of adoctor or a lawyer from the growth of population in the towns in whichthey live. They talk to us of the profits of a railway through agreater degree of wealth and activity in the districts through whichit runs. They tell us of the profits which are derived from a rise instocks and shares, and even of those which are sometimes derived fromthe sale of pictures and works of art, and they ask us--as if it weretheir only complaint--"Ought not all these other forms to be taxedtoo?"

But see how misleading and false all these analogies are. Thewindfalls which people with artistic gifts are able from time to timeto derive from the sale of a picture--from a Vandyke or a Holbein--mayhere and there be very considerable. But pictures do not get inanybody's way. They do not lay a toll on anybody's labour; they do nottouch enterprise and production at any point; they do not affect anyof those creative processes upon which the material well-being ofmillions depends. And if a rise in stocks and shares confers profitson the fortunate holders far beyond what they expected, or, indeed, deserved, nevertheless, that profit has not been reaped by withholdingfrom the community the land which it needs, but, on the contrary, apart from mere gambling, it has been reaped by supplying industrywith the capital without which it could not be carried on. 

If the railway makes greater profits, it is usually because it carriesmore goods and more passengers. If a doctor or a lawyer enjoys abetter practice, it is because the doctor attends more patients andmore exacting patients, and because the lawyer pleads more suits inthe courts and more important suits. At every stage the doctor or thelawyer is giving service in return for his fees; and if the service istoo poor or the fees are too high, other doctors and other lawyers cancome freely into competition. There is constant service, there isconstant competition; there is no monopoly, there is no injury to thepublic interest, there is no impediment to the general progress. 

Fancy comparing these healthy processes with the enrichment whichcomes to the landlord who happens to own a plot of land on theoutskirts or at the centre of one of our great cities, who watches thebusy population around him making the city larger, richer, moreconvenient, more famous every day, and all the while sits still anddoes nothing! Roads are made, streets are made, railway services areimproved, electric light turns night into day, electric trams glideswiftly to and fro, water is brought from reservoirs a hundred milesoff in the mountains--and all the while the landlord sits still. Everyone of those improvements is effected by the labour and at the cost ofother people. Many of the most important are effected at the cost ofthe municipality and of the ratepayers. To not one of thoseimprovements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land issensibly enhanced. 

He renders no service to the community, he contributes nothing to thegeneral welfare, he contributes nothing even to the process from whichhis own enrichment is derived. If the land were occupied by shops orby dwellings, the municipality at least would secure the rates uponthem in aid of the general fund; but the land may be unoccupied, undeveloped, it may be what is called "ripening"--ripening at theexpense of the whole city, of the whole country--for the unearnedincrement of its owner. Roads perhaps have to be diverted to avoidthis forbidden area. The merchant going to his office, the artisangoing to his work, have to make a detour or pay a tram fare to avoidit. The citizens are losing their chance of developing the land, thecity is losing its rates, the State is losing its taxes which wouldhave accrued, if the natural development had taken place--and thatshare has to be replaced at the expense of the other ratepayers andtaxpayers; and the nation as a whole is losing in the competition ofthe world--the hard and growing competition in the world--both in timeand money. And all the while the land monopolist has only to sit stilland watch complacently his property multiplying in value, sometimesmanifold, without either effort or contribution on his part. And thatis justice!

But let us follow the process a little farther. The population of thecity grows and grows still larger year by year, the congestion in thepoorer quarters becomes acute, rents and rates rise hand in hand, andthousands of families are crowded into one-roomed tenements. There are120, 000 persons living in one-roomed tenements in Glasgow alone at thepresent time. At last the land becomes ripe for sale--that means thatthe price is too tempting to be resisted any longer--and then, and nottill then, it is sold by the yard or by the inch at ten times, ortwenty times, or even fifty times, its agricultural value, on whichalone hitherto it has been rated for the public service. 

The greater the population around the land, the greater the injurywhich they have sustained by its protracted denial, the moreinconvenience which has been caused to everybody, the more serious theloss in economic strength and activity, the larger will be the profitof the landlord when the sale is finally accomplished. In fact you maysay that the unearned increment on the land is on all-fours with theprofit gathered by one of those American speculators who engineer acorner in corn, or meat, or cotton, or some other vital commodity, andthat the unearned increment in land is reaped by the land monopolistin exact proportion, not to the service, but to the disservice done. 

It is monopoly which is the keynote; and where monopoly prevails, thegreater the injury to society, the greater the reward of themonopolist will be. See how this evil process strikes at every form ofindustrial activity. The municipality, wishing for broader streets, better houses, more healthy, decent, scientifically planned towns, ismade to pay, and is made to pay in exact proportion, or to a verygreat extent in proportion, as it has exerted itself in the past tomake improvements. The more it has improved the town, the more it hasincreased the land value, and the more it will have to pay for anyland it may wish to acquire. The manufacturer purposing to start anew industry, proposing to erect a great factory offering employmentto thousands of hands, is made to pay such a price for his land thatthe purchase-price hangs round the neck of his whole business, hampering his competitive power in every market, clogging him far morethan any foreign tariff in his export competition; and the land valuesstrike down through the profits of the manufacturer on to the wages ofthe workman. The railway company wishing to build a new line findsthat the price of land which yesterday was only rated at itsagricultural value has risen to a prohibitive figure the moment it wasknown that the new line was projected; and either the railway is notbuilt, or, if it is, is built, only on terms which largely transfer tothe landowner the profits which are due to the shareholders and theadvantages which should have accrued to the travelling public. 

It does not matter where you look or what examples you select, youwill see that every form of enterprise, every step in materialprogress, is only undertaken after the land monopolist has skimmed thecream off for himself, and everywhere to-day the man, or the publicbody, who wishes to put land to its highest use is forced to pay apreliminary fine in land values to the man who is putting it to aninferior use, and in some cases to no use at all. All comes back tothe land value, and its owner for the time being is able to levy histoll upon all other forms of wealth and upon every form of industry. Aportion, in some cases the whole, of every benefit which islaboriously acquired by the community is represented in the landvalue, and finds its way automatically into the landlord's pocket. Ifthere is a rise in wages, rents are able to move forward, because theworkers can afford to pay a little more. If the opening of a newrailway or a new tramway, or the institution of an improved service ofworkmen's trains, or a lowering of fares, or a new invention, or anyother public convenience affords a benefit to the workers in anyparticular district, it becomes easier for them to live, and thereforethe landlord and the ground landlord, one on top of the other, areable to charge them more for the privilege of living there. 

Some years ago in London there was a toll-bar on a bridge across theThames, and all the working people who lived on the south side of theriver, had to pay a daily toll of one penny for going and returningfrom their work. The spectacle of these poor people thus mulcted of solarge a proportion of their earnings appealed to the publicconscience: an agitation was set on foot, municipal authorities wereroused, and at the cost of the ratepayers the bridge was freed and thetoll removed. All those people who used the bridge were saved 6d. Aweek. Within a very short period from that time the rents on the southside of the river were found to have advanced by about 6d. A week, orthe amount of the toll which had been remitted. And a friend of minewas telling me the other day that in the parish of Southwark about£350 a year, roughly speaking, was given away in doles of bread bycharitable people in connection with one of the churches, and as aconsequence of this the competition for small houses, but moreparticularly for single-roomed tenements is, we are told, so greatthat rents are considerably higher than in the neighbouring district. 

All goes back to the land, and the landowner, who in many cases, inmost cases, is a worthy person utterly unconscious of the character ofthe methods by which he is enriched, is enabled with resistlessstrength to absorb to himself a share of almost every public andevery private benefit, however important or however pitiful thosebenefits may be. 

I hope you will understand that when I speak of the land monopolist, Iam dealing more with the process than with the individual landowner. Ihave no wish to hold any class up to public disapprobation. I do notthink that the man who makes money by unearned increment in land, ismorally a worse man than any one else, who gathers his profit where hefinds it, in this hard world under the law and according to commonusage. It is not the individual I attack; it is the system. It is notthe man who is bad; it is the law which is bad. It is not the man whois blameworthy for doing what the law allows and what other men do; itis the State which would be blameworthy, were it not to endeavour toreform the law and correct the practice. We do not want to punish thelandlord. We want to alter the law. Look at our actual proposal. 

We do not go back on the past. We accept as our basis the value as itstands to-day. The tax on the increment of land begins by recognisingand franking all past increment. We look only to the future; and forthe future we say only this: that the community shall be the partnerin any further increment above the present value after all the owner'simprovements have been deducted. We say that the State and themunicipality should jointly levy a toll upon the future unearnedincrement of the land. A toll of what? Of the whole? No. Of a half?No. Of a quarter? No. Of a fifth--that is the proposal of the Budget. And that is robbery, that is plunder, that is communism andspoliation, that is the social revolution at last, that is theoverturn of civilised society, that is the end of the world foretoldin the Apocalypse! Such is the increment tax about which so muchchatter and outcry are raised at the present time, and upon which Iwill say that no more fair, considerate, or salutary proposal fortaxation has ever been made in the House of Commons. 

But there is another proposal concerning land values which is not lessimportant. I mean the tax on the capital value of undeveloped urban orsuburban land. The income derived from land and its rateable valueunder the present law depend upon the use to which the land is put. Inconsequence, income and rateable value are not always true orcomplete measures of the value of the land. Take the case to which Ihave already referred, of the man who keeps a large plot in or near agrowing town idle for years, while it is "ripening"--that is to say, while it is rising in price through the exertions of the surroundingcommunity and the need of that community for more room to live. Takethat case. I daresay you have formed your own opinion upon it. Mr. Balfour, Lord Lansdowne, and the Conservative Party generally, thinkthat that is an admirable arrangement. They speak of the profits ofthe land monopolist, as if they were the fruits of thrift and industryand a pleasing example for the poorer classes to imitate. We do nottake that view of the process. We think it is a dog-in-the-mangergame. We see the evil, we see the imposture upon the public, and wesee the consequences in crowded slums, in hampered commerce, indistorted or restricted development, and in congested centres ofpopulation, and we say here and now to the land monopolist who isholding up his land--and the pity is, it was not said before--youshall judge for yourselves whether it is a fair offer or not--we sayto the land monopolist: "This property of yours might be put toimmediate use with general advantage. It is at this minute saleable inthe market at ten times the value at which it is rated. If you chooseto keep it idle in the expectation of still further unearnedincrement, then at least you shall be taxed at the true selling valuein the meanwhile. " And the Budget proposes a tax of a halfpenny in thepound on the capital value of all such land; that is to say, a taxwhich is a little less in equivalent, than the income-tax would beupon the property, if the property were fully developed. 

That is the second main proposal of the Budget with regard to theland; and its effects will be, first, to raise an expanding revenuefor the needs of the State; secondly that, half the proceeds of thistax, as well as of the other land taxes, will go to the municipalitiesand local authorities generally to relieve rates; thirdly, the effectwill be, as we believe, to bring land into the market, and thussomewhat cheapen the price at which land is obtainable for everyobject, public and private. By so doing we shall liberate new springsof enterprise and industry, we shall stimulate building, relieveovercrowding, and promote employment. 

These two taxes, both in themselves financially, economically, andsocially sound, carry with them a further notable advantage. We shallobtain a complete valuation of the whole of the land in the UnitedKingdom. We shall procure an up-to-date Doomsday-book showing thecapital value, apart from buildings and improvements, of every pieceof land. Now, there is nothing new in the principle of valuation fortaxation purposes. It was established fifteen years ago in LordRosebery's Government by the Finance Act of 1894, and it has beenapplied ever since without friction or inconvenience by Conservativeadministrations. 

And if there is nothing new in the principle of valuation, still lessis there anything new or unexpected in the general principlesunderlying the land proposals of the Budget. Why, Lord Roseberydeclared himself in favour of taxation of land values fifteen yearsago. Lord Balfour has said a great many shrewd and sensible things onthis subject which he is, no doubt, very anxious to have overlooked atthe present time. The House of Commons has repeatedly affirmed theprinciple, not only under Liberal Governments, but--which is much moreremarkable--under a Conservative Government. Four times during thelast Parliament Mr. Trevelyan's Bill for the taxation of land valueswas brought before the House of Commons and fully discussed, and twiceit was read a second time during the last Parliament, with its greatConservative majority, the second time by a majority of no less thanninety votes. The House of Lords, in adopting Lord Camperdown'samendment to the Scottish Valuation Bill, has absolutely conceded theprinciple of rating undeveloped land upon its selling value, althoughit took very good care not to apply the principle; and all thegreatest municipal corporations in England and Scotland--many of themoverwhelmingly Conservative in complexion--have declared themselves infavour of the taxation of land values; and now, after at least ageneration of study, examination, and debate, the time has come whenwe should take the first step to put these principles into practicaleffect. You have heard the saying "The hour and the man. " The hour hascome, and with it the Chancellor of the Exchequer. 

I have come to Scotland to exhort you to engage in this battle anddevote your whole energy and influence to securing a memorablevictory. Every nation in the world has its own way of doing things, its own successes and its own failures. All over Europe we see systemsof land tenure which economically, socially, and politically are farsuperior to ours; but the benefits that those countries derive fromtheir improved land systems are largely swept away, or at any rateneutralised, by grinding tariffs on the necessaries of life and thematerials of manufacture. In this country we have long enjoyed theblessings of Free Trade and of untaxed bread and meat, but againstthese inestimable benefits we have the evils of an unreformed andvicious land system. In no great country in the new world or the oldhave the working people yet secured the double advantage of free tradeand free land together, by which I mean a commercial system and a landsystem from which, so far as possible, all forms of monopoly have beenrigorously excluded. Sixty years ago our system of national taxationwas effectively reformed, and immense and undisputed advantagesaccrued therefrom to all classes, the richest as well as the poorest. The system of local taxation to-day is just as vicious and wasteful, just as great an impediment to enterprise and progress, just as harsha burden upon the poor, as the thousand taxes and Corn Law slidingscales of the "hungry 'forties. " We are met in an hour of tremendousopportunity. "You who shall liberate the land, " said Mr. Cobden, "willdo more for your country than we have done in the liberation of itscommerce. "

You can follow the same general principle of distinguishing betweenearned and unearned increment through the Government's treatment ofthe income-tax. There is all the difference in the world between theincome which a man makes from month to month or from year to year byhis continued exertion, which may stop at any moment, and willcertainly stop, if he is incapacitated, and the income which isderived from the profits of accumulated capital, which is a continuingincome irrespective of the exertion of its owner. Nobody wants topenalise or to stigmatise income derived from dividends, rent, orinterest; for accumulated capital, apart from monopoly, represents theexercise of thrift and prudence, qualities which are only lessvaluable to the community than actual service and labour. But thegreat difference between the two classes of income remains. We are allsensible of it, and we think that that great difference should berecognised when the necessary burdens of the State have to be dividedand shared between all classes. 

The application of this principle of differentiation of income-tax hasenabled the present Government sensibly to lighten the burden of thegreat majority of income-tax payers. Under the late ConservativeGovernment about 1, 100, 000 income-tax payers paid income-tax at thestatutory rate of a shilling in the pound. Mr. Asquith, the PrimeMinister, when Chancellor of the Exchequer, reduced the income-tax inrespect of earned incomes under £2, 000 a year from a shilling toninepence, and it is calculated that 750, 000 income-tax payers--thatis to say, nearly three-quarters of the whole number of income-taxpayers--who formerly paid at the shilling rate have obtained an actualrelief from taxation to the extent of nearly £1, 200, 000 a year in theaggregate. The present Chancellor of the Exchequer in the presentBudget has added to this abatement a further relief--a very sensiblerelief, I venture to think you will consider it--on account of eachchild of parents who possess under £500 a year, and that concessioninvolved a further abatement and relief equal to £600, 000 a year. That statement is founded on high authority, for it figured in one ofthe Budget proposals of Mr. Pitt, and it is to-day recognised by thelaw of Prussia. 

Taking together the income-tax reforms of Mr. Asquith and Mr. Lloyd-George, taking the two together--because they are all part ofthe same policy, and they are all part of our treatment as aGovernment of this great subject--it is true to say that very nearlythree out of every four persons who pay income-tax will be taxed afterthis Budget, this penal Budget, this wicked, monstrous, despoliatoryBudget--three out of every four persons will be taxed for income-taxat a lower rate than they were by the late Conservative Government. 

You will perhaps say to me that may be all very well, but are you surethat the rich and the very rich are not being burdened too heavily?Are you sure that you are not laying on the backs of people who arestruggling to support existence with incomes of upwards of £3, 000 ayear, burdens which are too heavy to be borne? Will they not sink, crushed by the load of material cares, into early graves, followedthere even by the unrelenting hand of the death duties collector? Willthey not take refuge in wholesale fraud and evasion, as some of theirleaders ingenuously suggest, or will there be a general flight of allrich people from their native shores to the protection of thehospitable foreigner? Let me reassure you on these points. 

The taxes which we now seek to impose to meet the need of the Statewill not appreciably affect, have not appreciably affected, thecomfort, the status, or even the style of living of any class in theUnited Kingdom. There has been no invidious singling out of a few richmen for special taxation. The increased burden which is placed uponwealth is evenly and broadly distributed over the whole of thatwealthy class who are more numerous in Great Britain than in any othercountry in the world, and who, when this Budget is passed, will stillfind Great Britain the best country to live in. When I reflect uponthe power and influence that class possesses, upon the generalgoodwill with which they are still regarded by their poorerneighbours, upon the infinite opportunities for pleasure and forculture which are open to them in this free, prosperous, and orderlycommonwealth, I cannot doubt that they ought to contribute, and Ibelieve that great numbers of them are willing to contribute, in agreater degree than heretofore, towards the needs of the navy, forwhich they are always clamouring, and for those social reforms uponwhich the health and contentment of the whole population depend. 

And after all, gentlemen, when we are upon the sorrows of the rich andthe heavy blows that have been struck by this wicked Budget, let usnot forget that this Budget, which is denounced by all the vestedinterests in the country and in all the abodes of wealth and power, after all, draws nearly as much from the taxation of tobacco andspirits, which are the luxuries of the working classes, who pay theirshare with silence and dignity, as it does from those wealthy classesupon whose behalf such heartrending outcry is made. 

I do not think the issue before the country was ever more simple thanit is now. The money must be found; there is no dispute about that. Both parties are responsible for the expenditure and the obligationswhich render new revenue necessary; and, as we know, we havedifficulty in resisting demands which are made upon us by theConservative Party for expenditure upon armaments far beyond thelimits which are necessary to maintain adequately the defences of thecountry, and which would only be the accompaniment of a sensationaland aggressive policy in foreign and in Colonial affairs. We declarethat the proposals we have put forward are conceived with a desire tobe fair to all and harsh to none. We assert they are conceived with adesire to secure good laws regulating the conditions by which wealthmay be obtained and a just distribution of the burdens of the State. We know that the proposals which we have made will yield all the moneythat we need for national defence, and that they will yield anexpanding revenue in future years for those great schemes of socialorganisation, of national insurance, of agricultural development, andof the treatment of the problems of poverty and unemployment, whichare absolutely necessary if Great Britain is to hold her own in thefront rank of the nations. The issue which you have to decide iswhether these funds shall be raised by the taxation of a protectivetariff upon articles of common use and upon the necessaries of life, including bread and meat, or whether it shall be raised, as wepropose, by the taxation of luxuries, of superfluities, andmonopolies. 

I have only one word more to say, and it is rendered necessary by theobservations which fell from Lord Lansdowne last night, when, according to the Scottish papers, he informed a gathering at which hewas the principal speaker that the House of Lords was not obliged toswallow the Budget whole or without mincing. [18] I ask you to markthat word. It is a characteristic expression. The House of Lords meansto assert its right to mince. Now let us for our part be quite frankand plain. We want this Budget Bill to be fairly and fully discussed;we do not grudge the weeks that have been spent already; we areprepared to make every sacrifice--I speak for my honourable friendswho are sitting on this platform--of personal convenience in order tosecure a thorough, patient, searching examination of proposals theimportance of which we do not seek to conceal. The Government hasshown itself ready and willing to meet reasonable argument, not merelyby reasonable answer, but when a case is shown, by concessions, andgenerally in a spirit of goodwill. We have dealt with this subjectthroughout with a desire to mitigate hardships in special cases, andto gain as large a measure of agreement as possible for the proposalswe are placing before the country. We want the Budget not merely to bethe work of the Cabinet and of the Chancellor of the Exchequer; wewant it to be the shaped and moulded plan deliberately considered bythe House of Commons. That will be a long and painful process to thosewho are forced from day to day to take part in it. We shall not shrinkfrom it. But when that process is over, when the Finance Bill leavesthe House of Commons, I think you will agree with me that it ought toleave the House of Commons in its final form. No amendments, noexcision, no modifying or mutilating will be agreed to by us. We willstand no mincing, and unless Lord Lansdowne and his landlordly friendschoose to eat their own mince, Parliament will be dissolved, and weshall come to you in a moment of high consequence for every cause forwhich Liberalism has ever fought. See that you do not fail us in thathour. 

FOOTNOTES:

[18] Lord Lansdowne has since been at pains to explain that he did notuse the word "mincing. " That word ought to have been "wincing" or"hesitation"--it is not clear which. 

THE BUDGET AND THE LORDS

NORWICH, _July 26, 1909_

(From _The Manchester Guardian_, by permission. )

The Budget is the great political issue of the day. It involves allother questions; it has brought all other issues to a decisive test. _The Daily Mail_ has stated that the Budget is hung up. So it is. Itis hung up in triumph over the High Peak; it is hung up as a banner ofvictory over Dumfries, over Cleveland, and over Mid-Derby. Theminiature general election just concluded has shown that the policyembodied in the Budget, and which inspires the Budget, has vivifiedand invigorated the Liberal Party, has brought union where there wasfalling away, has revived enthusiasm where apathy was creeping in. 

You cannot but have been impressed with the increasing sense ofreality which political affairs have acquired during the last fewmonths. What is it they are doing at Westminster? Across and beyondthe complicated details of finance, the thousand amendments and morewhich cover the order paper, the absurd obstruction, the drydiscussions in Committee, the interminable repetition of divisions, the angry scenes which flash up from time to time, the white-facedmembers sitting the whole night through and walking home worn out inthe full light of morning--across and beyond all this, can you notdiscern a people's cause in conflict? Can you not see a great effortto make a big step forward towards that brighter and more equal worldfor which, be sure, those who come after us will hold our names inhonour? That is the issue which is being decided from week to week inWestminster now, and it is in support of that cause that we are askingfrom you earnest and unswerving allegiance. 

I do not think that there is any great country in the world wherethere are so many strong forces of virtue and vitality as there are inour own country. But there is scarcely any country in the world wherethere is so little organisation. Look at our neighbour and friendlyrival Germany. I see that great State organised for peace andorganised for war to a degree to which we cannot pretend. We are notorganised as a nation, so far as I can see, for anything except partypolitics, and even for purposes of party politics we are not organisedso well as they are in the United States. A more scientific, a moreelaborate, a more comprehensive social organisation is indispensableto our country if we are to surmount the trials and stresses which thefuture years will bring. It is this organisation that the policy ofthe Budget will create. It is this organisation that the loss of theBudget will destroy. 

But, we are told, "it presses too heavily upon the land-owningclasses. " I have heard it said that in the French Revolution, if theFrench nobility, instead of going to the scaffold with such dignityand fortitude, had struggled and cried and begged for mercy, even thehard hearts of the Paris crowd would have been melted, and the Reignof Terror would have come to an end. There is happily no chance of ouraristocracy having to meet such a fate in this loyal-hearted, law-abiding, sober-minded country. They are, however, asked todischarge a certain obligation. They are asked to contribute theirshare to the expenses of the State. That is all they are asked to do. Yet what an outcry, what tribulation, what tears, what wrath, whatweeping and wailing and gnashing of teeth, and all because they areasked to pay their share. 

One would suppose, to listen to them, that the whole of the taxationwas being raised from, or was about to be raised from the owners ofagricultural estates. What are the facts? Nearly half the taxation ofthe present Budget is raised by the taxation of the luxuries of theworking classes. Are they indignant? Are they crying out? Not in theleast. They are perfectly ready to pay their share, and to pay it in amanly way, and two hundred thousand of them took the trouble to go toHyde Park the other day in order to say so. 

What are the facts about agricultural land? It is absolutely exemptfrom the operations of the new land taxation so long as agriculturalland is worth no more for other purposes than it is for agriculturalpurposes: that is to say, so long as agricultural land is agriculturalland and not urban or suburban land, it pays none of the new landtaxation. It is only when its value for building purposes makes itscontinued agricultural use wasteful and uneconomic, it is only when itbecomes building land and not agricultural land, and when because ofthat change it rises enormously in price and value--it is only thenthat it contributes under the new land taxation its share to thepublic of the increment value which the public has given to it. 

Then take the death duties. One would suppose from what one hears inLondon and from the outcry that is raised, that the whole of the deathduties were collected from the peers and from the county families. Again I say, look at the facts. The Inland Revenue report for lastyear shows that £313, 000, 000 of property passing on death becamesubject to death duties, and of that sum £228, 000, 000 was personaltyand not real estate, leaving only £85, 000, 000 real estate, and of that£85, 000, 000 only £22, 000, 000 was agricultural land. These death dutiesare represented as being levied entirely upon a small class of landedgentry and nobility, but, as a matter of fact, there is collected fromthat class in respect of agricultural land only seven per cent. Of thewhole amount of money which the Exchequer derives from deathduties. [19]

I decline, however, to judge the question of the House of Lords simplyand solely by any action they may resolve to take upon the Budget. Wemust look back upon the past. We remember the ill-usage and thehumiliation which the great majority that was returned by the nationto support Sir Henry Campbell-Bannerman in 1906 has sustained in thelast three years at the hands of the House of Lords. That Assemblymust be judged by their conduct as a whole. Lord Lansdowne hasexplained, to the amusement of the nation, that he claimed no right onbehalf of the House of Lords to "mince" the Budget. All, he tells us, he has asked for, so far as he is concerned, is the right to "wince"when swallowing it. Well, that is a much more modest claim. It is forthe Conservative Party to judge whether it is a very heroic claim forone of their leaders to make. If they are satisfied with the wincingMarquis, we have no reason to protest. We should greatly regret tocause Lord Lansdowne and his friends any pain. We have no wishwhatever to grudge them any relief which they may obtain by wincing oreven by squirming. We accord them the fullest liberty in thatrespect. 

After all, the House of Lords has made others wince in its time. Evenin the present Parliament they have performed some notable exploits. When the House of Lords rejected the Bill to prevent one man castinghis vote two or three times over in the same election, every one inthis country who desired to see a full and true representation of thepeople in Parliament might well have winced. When the House of Lordsrejected or mutilated beyond repair the Land Valuation Bills forEngland and for Scotland, every land reformer in the country mighthave winced. When the House of Lords destroyed Mr. Birrell's EducationBill of 1906, every man who cared for religious equality andeducational peace might have winced. When they contemptuously flungout, without even discussing it or examining it, the Licensing Bill, upon which so many hopes were centred and upon which so many months oflabour had been spent, they sent a message of despair to everytemperance reformer, to every social and philanthropic worker, toevery church, to every chapel, to every little Sunday schoolthroughout the land. If it should now prove to be their turn, if themeasure they have meted out to others should be meted out to themagain, however much we might regret their sorrows, we could not butobserve the workings of poetic justice. 

But I hope the House of Lords and those who back them will not beunder any illusions about the Budget and the position of theGovernment. The Government is in earnest about the Budget. The Budgetcarries with it their fortunes and the fortunes of the Liberal Party. Careful argument, reasonable amendment, amicable concession, notaffecting the principles at stake--all these we offer while the Billis in the House of Commons. But when all that is said and done, as theBill leaves the House of Commons so it must stand. It would be a greatpity if Lord Curzon, the Indian pro-Consul, or the London_Spectator_--it would be a great pity if those potentates were to makethe great mistake of supposing that the Government would acquiesce inthe excision of the land clauses of the Budget by the House of Lords. Such a course is unthinkable. Any Liberal Government which adopted itwould be swiftly ruined. The land proposals of the Government have notbeen made without long deliberation and full responsibility. We shallnot fail to carry them effectively through the House of Commons; stillless shall we accept any amendment at the hands of the House of Lords. 

Is it not an extraordinary thing that upon the Budget we should evenbe discussing at all the action of the House of Lords? The House ofLords is an institution absolutely foreign to the spirit of the ageand to the whole movement of society. It is not perhaps surprising ina country so fond of tradition, so proud of continuity, as ourselvesthat a feudal assembly of titled persons, with so long a history andso many famous names, should have survived to exert an influence uponpublic affairs at the present time. We see how often in England theold forms are reverently preserved after the forces by which they aresustained and the uses to which they were put and the dangers againstwhich they were designed have passed away. A state of gradual declinewas what the average Englishman had come to associate with the Houseof Lords. Little by little, we might have expected, it would haveceased to take a controversial part in practical politics. Year byyear it would have faded more completely into the past to which itbelongs until, like Jack-in-the-Green or Punch-and-Judy, only apicturesque and fitfully lingering memory would have remained. 

And during the last ten years of Conservative government this wasactually the case. But now we see the House of Lords flushed with thewealth of the modern age, armed with a party caucus, fortified, revived, resuscitated, asserting its claims in the harshest and in thecrudest manner, claiming to veto or destroy even without discussionany legislation, however important, sent to them by any majority, however large, from any House of Commons, however newly elected. Wesee these unconscionable claims exercised with a frank and undisguisedregard to party interest, to class interest, and to personal interest. We see the House of Lords using the power which they should not holdat all, which if they hold at all, they should hold in trust for all, to play a shrewd, fierce, aggressive party game of electioneering andcasting their votes according to the interest of the particularpolitical party to which, body and soul, they belong. 

It is now suggested--publicly in some quarters, privately in manyquarters--that the House of Lords will not only use without scrupletheir veto in legislation but they propose to extend theirprerogatives; they are going to lay their hands upon finance, and ifthey choose they will reject or amend the Budget. I have alwaysthought it a great pity that Mr. Gladstone made a compromise with theHouse of Lords over the Franchise Bill of 1884. I regret, and I thinkmany of my hon. Friends in the House of Commons will regret, lookingback upon the past, that the present Government did not advise adissolution of Parliament upon the rejection of the Education Bill in1906. A dissolution in those circumstances would not merely haveinvolved the measure under discussion, but if the Government of thatday had received the support of the electors at the poll their victorymust have carried with it that settlement and reform of the relationsbetween the two Houses of Parliament which is necessary to secure theeffective authority of the House of Commons. That is the questionwhich, behind and beyond all others, even the Budget, even Free Trade, even the land--that is the question which, as the Prime Minister hassaid, is the dominant issue of our time. 

Opportunity is fickle, opportunity seldom returns; but I think youwill agree with me that if the House of Lords, not content with itsrecent exploits with the legislative veto, were to seize on the newpower which its backers claim for it over finance--if, not contentwith the extreme assertions of its own privileges, it were to invadethe most ancient privileges of the House of Commons--if, as an act ofclass warfare, for it would be nothing less, the House of Lords wereto destroy the Budget, and thus not only create a Constitutionaldeadlock of novel and unmeasured gravity, but also plunge the wholefinance of the country into unparalleled confusion, then, in myjudgment, opportunity, clear, brilliant, and decisive, would return, and we should have the best chance we have ever had of dealing withthem once for all. 

These circumstances may never occur. I don't believe they will occur. If we only all stand firm together I believe the Budget will becarried. I believe the Budget will vindicate the strength of theGovernment supported by the House of Commons. I believe it willvindicate the financial strength of this great country. I don'tbelieve, if we pursue our course without wavering or weakening, thereis any force in this country which can stand against us. TheConservative Whip in the House of Lords, a friend of mine, LordChurchill, said the other day that the House of Lords when theyreceived the Budget would do their duty. I hope they will. But in anycase be sure of this--that the Government and the House of Commonswill do their duty. Then if there is anything more to be done, seethat you are ready to do your duty too. 

FOOTNOTES:

[19] Since the date of this speech the new concessions, doubling theallowance exempted from income tax for the expenses of agriculturalestates, have been made public. 

THE SPIRIT OF THE BUDGET

LEICESTER, _September 5, 1909_

(From _The Times_, by permission. )

I have done my best to study the political history of the last fortyor fifty years, and I cannot find any Government which, at the end ofits fourth year, enjoyed the same measure of support, prestige, andgood fortune that we do. The only Administration which could comparein the importance and the volume of its legislation with the presentGovernment is Mr. Gladstone's great Government of 1868. That was aGovernment of measures and of men; but no measure of that Governmentcould equal in importance the Old-Age Pensions Act which we haveplaced on the Statute-book. The settlement of the Irish Churchquestion by Disestablishment was not a more baffling and intricatebusiness, than the settlement of the Irish University question whichMr. Birrell has achieved. The labour legislation of the Government of1868, although very important, shows nothing which equals inimportance the Trades Disputes Act, which we have carried through, andMr. Cardwell's reforms in army organisation were not more successful, and were certainly much less generally accepted, than those which havebeen effected by Mr. Haldane. In the fourth year of its administrationthe Government of 1868 was genuinely unpopular. It had quarrelled withthe Nonconformists without gaining the support of the Church; it hadoffended the liquor interest without satisfying the Temperance forcesin the country; it had disturbed and offended many vested interestswithout arousing popular enthusiasm. 

Indeed, if you look back, you will find that the fourth year in thehistory of a Government is always a very critical and has often been avery unfortunate year. It is quite true that Mr. Disraeli'sGovernment, which assumed office in 1874, did enjoy in its fourth yeara fleeting flush of success, which, however, proved illusory. Withthat single exception, every other modern Government that has lastedso long, has occupied an unsatisfactory position in its fourth year. The Government of 1880 in the year 1884 was brought very low, and wasdeeply involved in disastrous enterprises beyond the sea whichultimately resulted in sorrow and misfortune. The ConservativeGovernment which took office in 1886 was by the year 1890, owing toits strange proceedings against Mr. Parnell, brought to the depths ofhumiliation. The Government of 1895 was in the year 1899 thoroughlyunpopular, and if they had not plunged into the tumult of war in SouthAfrica, they would very shortly have been dismissed from power. As forthe Government of 1900, in the fourth year of Mr. Balfour's lateAdministration, I am sure I could not easily do justice to themelancholy position which they occupied. 

Where do we stand to-day at the end of our fourth year of office? Iput it plainly to you to consider, whether one is not justified insaying that we occupy a position of unexampled strength at the presenttime. The Government is strong in its administrative record, whichreveals no single serious or striking mistake in all the complicatedconduct of affairs. There have been no regrettable incidents by landor sea and none of those personal conflicts between the high officialsthat used to occur so frequently under a late dispensation. We havehad no waste of public treasure and no bloodshed. We are strong inthe consciousness of a persistent effort to sweep away anomalies andinequalities, to redress injustice, to open more widely to the massesof the people the good chances in life, and to safeguard them againstits evil chances. We also claim that we are strong in the support andenthusiasm of a majority of our fellow-countrymen. We are strong inthe triumph of our policy in South Africa; most of all we are strongin the hopes and plans which we have formed for the future. 

It is about this future that I will speak to you this afternoon. Andlet me tell you that when I think about it, I do not feel at allinclined to plead exhaustion in consequence of the exertions we havemade, or to dwell upon the successes which we have had in the past, orto survey with complacency the record of the Government or to ask youto praise us for the work which we have done. No; when I think of thework which lies before us, upon which we have already entered, of thelong avenues of social reconstruction and reorganisation which openout in so many directions and ever more broadly before us, of thehideous squalor and misery which darken and poison the life ofBritain, of the need of earnest action, of the prospects of effectiveand immediate action--when I dwell upon this, it is not of feelings oflassitude or exhaustion that I am conscious, but only of a vehementimpulse to press onwards. 

The social conditions of the British people in the early years of thetwentieth century cannot be contemplated without deep anxiety. Theanxiety is keen because it arises out of uncertainty. It is thegnawing anxiety of suspense. What is the destiny of our country to be?Nothing is settled either for or against us. We have no reason todespair; still less have we any reason to be self-satisfied. All isstill in our hands for good or for ill. We have the power to-day tochoose our fortune, and I believe there is no nation in the world, perhaps there never has been in history, any nation which at one andthe same moment was confronted with such opposite possibilities, wasthreatened on the one hand by more melancholy disaster, and cheered onthe other by more bright, yet not unreasonable hopes. The two roadsare open. We are at the cross-ways. If we stand on in the oldhappy-go-lucky way, the richer classes ever growing in wealth and innumber, and ever declining in responsibility, the very poor remainingplunged or plunging even deeper into helpless, hopeless misery, then Ithink there is nothing before us but savage strife between class andclass, with an increasing disorganisation, with an increasingdestruction of human strength and human virtue--nothing, in fact, butthat dual degeneration which comes from the simultaneous waste ofextreme wealth and of extreme want. 

Now we have had over here lately colonial editors from all theColonies of the British Empire, and what is the opinion which theyexpressed as to the worst thing they saw in the old country? Therepresentatives of every Colony have expressed the opinion that theworst they saw here, was the extreme of poverty side by side with theextreme of luxury. Do not you think it is very impressive to find anopinion like that, expressed in all friendship and sincerity, by menof our own race who have come from lands which are so widely scatteredover the surface of the earth, and are the product of such variedconditions? Is it not impressive to find that they are all agreed, coming as they do from Australia, or Canada, or South Africa, or NewZealand, that the greatest danger to the British Empire and to theBritish people is not to be found among the enormous fleets and armiesof the European Continent, nor in the solemn problems of Hindustan; itis not the Yellow peril nor the Black peril nor any danger in the widecircuit of colonial and foreign affairs. No, it is here in our midst, close at home, close at hand in the vast growing cities of England andScotland, and in the dwindling and cramped villages of our denudedcountryside. It is there you will find the seeds of Imperial ruin andnational decay--the unnatural gap between rich and poor, the divorceof the people from the land, the want of proper discipline andtraining in our youth, the exploitation of boy labour, the physicaldegeneration which seems to follow so swiftly on civilised poverty, the awful jumbles of an obsolete Poor Law, the horrid havoc of theliquor traffic, the constant insecurity in the means of subsistenceand employment which breaks the heart of many a sober, hard-workingman, the absence of any established minimum standard of life andcomfort among the workers, and, at the other end, the swift increaseof vulgar, joyless luxury--here are the enemies of Britain. Bewarelest they shatter the foundations of her power. 

Then look at the other side, look at the forces for good, the moralforces, the spiritual forces, the civic, the scientific, the patrioticforces which make for order and harmony and health and life. Are theynot tremendous too? Do we not see them everywhere, in every town, inevery class, in every creed, strong forces worthy of Old England, coming to her rescue, fighting for her soul? That is the situation inour country as I see it this afternoon--two great armies evenlymatched, locked in fierce conflict with each other all along the line, swaying backwards and forwards in strife--and for my part I amconfident that the right will win, that the generous influences willtriumph over the selfish influences, that the organising forces willdevour the forces of degeneration, and that the British people willemerge triumphant from their struggles to clear the road and lead themarch amongst the foremost nations of the world. 

Well, now, I want to ask you a question. I daresay there are some ofyou who do not like this or that particular point in the Budget, whodo not like some particular argument or phrase which some of us mayhave used in advocating or defending it. But it is not of thesedetails that I speak; the question I want each of you to ask himselfis this: On which side of this great battle which I have described toyou, does the Budget count? Can any of you, looking at it broadly andas a whole, looking on the policy which surrounds it, and whichdepends upon it, looking at the arguments by which it is defended, aswell as the arguments by which it is opposed--can any one doubt thatthe Budget in its essential character and meaning, in its spirit andin its practical effect, would be a tremendous reinforcement, almostlike a new army coming up at the end of the day, upon the side of allthose forces and influences which are fighting for the life and healthand progress of our race?

In the speeches which I have made about the country since the Budgetwas introduced I have explained and defended in detail the specialfinancial proposals upon which we rely to provide the revenue for theyear. You are, no doubt, generally acquainted with them. There is theincrease in the income-tax of twopence, the further discriminationbetween earned and unearned income, and the super-tax of sixpence onincomes of over £5, 000 a year. There are the increases in estateduties and in the legacy duties, and there are the new duties onstamps; there is the tax on motor-cars and petrol, the proceeds ofwhich are to go to the improvement of the roads and the abatement ofthe dust nuisance; there are the taxes on working classindulgences--namely, the increase in the tax on tobacco and on whisky, which enable the working man to pay his share, as indeed he has shownhimself very ready to do; there are the taxes on liquor licences, which are designed to secure for the State a certain specialproportion of the monopoly value created wholly by the State and withwhich it should never have parted; and, lastly, there are the threetaxes upon the unearned increment in land, upon undeveloped land, uponthe unearned increment in the reversion of leases, and then there isthe tax upon mining royalties. 

Now these are the actual proposals of the Budget, and I do not thinkthat, if I had the time, I should find any great difficulty in showingyou that there are many good arguments, a great volume of soundreason, which can be adduced in support of every one of theseproposals. Certainly there is no difficulty in showing that since theBudget has been introduced there has been no shock to credit, therehas been no dislocation of business, there has been no setback in thebeginning of that trade revival about the approach of which I spoke toyou, when I was in Leicester at the beginning of the year and whichthere are now good reasons for believing is actually in progress. Thetaxes which have been proposed have not laid any burden upon thenecessaries of life like bread or meat, nor have they laid anyincreased burden upon comforts like tea and sugar. There is nothing inthese taxes which makes it harder for a labouring man to keep up hisstrength or for the small man of the middle class to maintain hisstyle of living. There is nothing in these taxes which makes it moredifficult for any hard-working person, whether he works with his handsor his head, to keep a home together in decent comfort. No impedimenthas been placed by these taxes upon enterprise; no hamperingrestrictions interrupt the flow of commerce. On the contrary, if thetax upon spirits should result in a diminution in the consumption ofstrong drink, depend upon it, the State will gain, and all classeswill gain. The health of millions of people, the happiness of hundredsof thousands of homes, will be sensibly improved, and money that wouldhave been spent upon whisky will flow into other channels, much lesslikely to produce evil and much more likely to produce employment. Andif the tax on undeveloped land, on land, that is to say, which is keptout of the market, which is held up idly in order that its owner mayreap unearned profit by the exertions and through the needs of thesurrounding community, if that tax should have the effect of breakingthis monopoly and of making land cheaper, a tremendous check on everyform of productive activity will have been removed. All sorts ofenterprises will become economically possible which are now impossibleowing to the artificially high price of land, and new forces will beliberated to stimulate the wealth of the nation. 

But it is not on these points that I wish to dwell this afternoon. Iwant to tell you about the meaning and the spirit of the Budget. Uponthe Budget and upon the policy of the Budget depends a far-reachingplan of social organisation designed to give a greater measure ofsecurity to all classes, but particularly to the labouring classes. In the centre of that plan stands the policy of national insurance. The Chancellor of the Exchequer has been for more than a year at workupon this scheme, and it is proposed--I hope next year, if there is anext year--it is proposed, working through the great friendlysocieties, which have done so much invaluable work on these lines, tomake sure that, by the aid of a substantial subvention from the State, even the poorest steady worker or the poorest family shall be enabledto make provision against sickness, against invalidity, and for thewidows and orphans who may be left behind. 

Side by side with this is the scheme of insurance against unemploymentwhich I hope to have the honour of passing through Parliament nextyear. The details of that scheme are practically complete, and it willenable upwards of two and a quarter millions of workers in the mostuncertain trades of this country--trades like ship-building, engineering, and building--to secure unemployment benefits, which in agreat majority of cases will be sufficient to tide them over theseason of unemployment. This scheme in its compulsory form is limitedto certain great trades like those I have specified, but it will beopen to other trades, to trade unions, to workers' associations ofvarious kinds, or even to individuals to insure with the StateUnemployment Insurance Office against unemployment on a voluntarybasis, and to secure, through the State subvention, much better termsthan it would be possible for them to obtain at the present time. 

It would be impossible to work a scheme of unemployment insuranceexcept in conjunction with some effective method of finding work andof testing willingness to work, and that can only be afforded by anational system of labour exchanges. That Bill has already passedthrough Parliament, and in the early months of next year we shall hopeto bring it into operation by opening, all over the country, a networkof labour exchanges connected with each other and with the centre bytelephone. We believe this organisation may secure for labour--and, after all, labour is the only thing the great majority of people haveto sell--it will secure for labour, for the first time, that free andfair market which almost all other commodities of infinitely lessconsequence already enjoy, and will replace the present wasteful, heartbreaking wanderings aimlessly to and fro in search of work by ascientific system; and we believe that the influence of this system inthe end must tend to standardising the conditions of wages andemployment throughout the country. 

Lastly, in connection with unemployment I must direct your attentionto the Development Bill, which is now before Parliament, the object ofwhich is to provide a fund for the economic development of ourcountry, for the encouragement of agriculture, for afforestation, forthe colonisation of England, and for the making of roads, harbours, and other public works. And I should like to draw your attention to avery important clause in that Bill, which says that the prosecution ofthese works shall be regulated, as far as possible, by the conditionsof the labour market, so that in a very bad year of unemployment theycan be expanded, so as to increase the demand for labour at times ofexceptional slackness, and thus correct and counterbalance the cruelfluctuations of the labour market. The large sums of money which willbe needed for these purposes are being provided by the Budget of Mr. Lloyd-George, and will be provided in an expanding volume in theyears to come through the natural growth of the taxes we are imposing. 

I have hitherto been speaking of the industrial organisation ofinsurance schemes, labour exchanges, and economic development. Now Icome to that great group of questions which are concerned with theprevention and relief of distress. We have before us the reports ofthe majority and minority of the Royal Commission on the Poor Law, andwe see there a great and urgent body of reforms which require theattention of Parliament. The first and most costly step in the reliefof distress has already been taken by the Old-Age Pensions Act, supplemented, as it will be if the Budget passes, by the removal ofthe pauper disqualification. By that Act we have rescued the aged fromthe Poor Law. We have yet to rescue the children; we have yet todistinguish effectively between the _bonâ fide_ unemployed workman andthe mere loafer and vagrant; we have yet to transfer the sick, theinebriate, the feeble-minded and the totally demoralised toauthorities specially concerned in their management and care. 

But what I want to show you, if I have made my argument clear, is thatall these schemes--which I can do little more than mention thisafternoon, each one of which is important--are connected one with theother, fit into one another at many points, that they are part of aconcerted and interdependent system for giving a better, fairer socialorganisation to the masses of our fellow-countrymen. Unemploymentinsurance, which will help to tide a workman over a bad period, isintimately and necessarily associated with the labour exchanges whichwill help to find him work and which will test his willingness towork. This, again, will be affected by the workings of the DevelopmentBill, which, as I told you, we trust may act as a counterpoise to therocking of the industrial boat and give a greater measure of stabilityto the labour market. 

The fact that everybody in the country, man and woman alike, will beentitled, with scarcely any exception, to an old-age pension from theState at the age of seventy--that fact makes it ever so much cheaperto insure against invalidity or infirmity up to the age of seventy. And, with the various insurance schemes which are in preparation, weought to be able to set up a complete ladder, an unbroken bridge orcauseway, as it were, along which the whole body of the people maymove with a certain assured measure of security and safety againsthazards and misfortunes. Then, if provision can be arranged for widowsand orphans who are left behind, that will be a powerful remedyagainst the sweating evil; for, as you know, these helpless people, who in every country find employment in particular trades, are unableto make any fair bargain for themselves, and their labour, and thisconsequently leads to the great evils which have very often beenbrought to the notice of Parliament. That, again, will fit in with theAnti-Sweating Bill we are passing through Parliament this year. 

Now, I want you to see what a large, coherent plan we are trying towork out, and I want you to believe that the object of the plan andthe results of it will be to make us a stronger as well as a happiernation. I was reading the other day some of the speeches made byBismarck--a man who, perhaps more than any other, built up in his ownlifetime the strength of a great nation--speeches which he made duringthe time when he was introducing into Germany those vast insuranceschemes, now deemed by all classes and parties in Germany to be ofthe utmost consequence and value. "I should like to see the State"(said Prince Bismarck in 1881), "which for the most part consists ofChristians, penetrated to some extent by the principles of thereligion which it professes, especially as concerns the help one givesto his neighbour, and sympathy with the lot of old and sufferingpeople. " Then, again, in the year 1884 he said: "The whole mattercentres in the question, 'Is it the duty of the State or is it not toprovide for its helpless citizens?' I maintain that it is its duty, that it is the duty, not only of the 'Christian' State, as I venturedonce to call it when speaking of 'Practical Christianity, ' but ofevery State. "

There are a great many people who will tell you that such a policy, asI have been endeavouring to outline to you this afternoon, will notmake our country stronger, because it will sap the self-reliance ofthe working classes. It is very easy for rich people to preach thevirtues of self-reliance to the poor. It is also very foolish, because, as a matter of fact, the wealthy, so far from beingself-reliant, are dependent on the constant attention of scores, andsometimes even hundreds, of persons who are employed in waiting uponthem and ministering to their wants. I think you will agree with me, on the other hand--knowing what you do of the life of this city and ofthe working classes generally--that there are often trials andmisfortunes which come upon working-class families quite beyond anyprovision which their utmost unaided industry and courage could securefor them. Left to themselves, left absolutely to themselves, they mustbe smashed to pieces, if any exceptional disaster or accident, likerecurring sickness, like the death or incapacity of the breadwinner, or prolonged or protracted unemployment, fall upon them. 

There is no chance of making people self-reliant by confronting themwith problems and with trials beyond their capacity to surmount. Youdo not make a man self-reliant by crushing him under a steam roller. Nothing in our plans will relieve people from the need of making everyexertion to help themselves, but, on the contrary, we consider that weshall greatly stimulate their efforts by giving them for the firsttime a practical assurance that those efforts will be crowned withsuccess. 

I have now tried to show you that the Budget, and the policy of theBudget, is the first conscious attempt on the part of the State tobuild up a better and a more scientific organisation of society forthe workers of this country, and it will be for you to say--at no verydistant date--whether all this effort for a coherent scheme of socialreconstruction is to be swept away into the region of lost endeavour. 

That is the main aspect of the Budget to which I wish to draw yourattention. But there is another significance of the highest importancewhich attaches to the Budget. I mean the new attitude of the Statetowards wealth. Formerly the only question of the tax-gatherer was, "How much have you got?" We ask that question still, and there is ageneral feeling, recognised as just by all parties, that the rate oftaxation should be greater for large incomes than for small. As to howmuch greater, parties are no doubt in dispute. But now a new questionhas arisen. We do not only ask to-day, "How much have you got?" wealso ask, "How did you get it? Did you earn it by yourself, or has itjust been left you by others? Was it gained by processes which are inthemselves beneficial to the community in general, or was it gained byprocesses which have done no good to any one, but only harm? Was itgained by the enterprise and capacity necessary to found a business, or merely by squeezing and bleeding the owner and founder of thebusiness? Was it gained by supplying the capital which industry needs, or by denying, except at an extortionate price, the land whichindustry requires? Was it derived from active reproductive processes, or merely by squatting on some piece of necessary land till enterpriseand labour, and national interests and municipal interests, had to buyyou out at fifty times the agricultural value? Was it gained fromopening new minerals to the service of man, or by drawing a miningroyalty from the toil and adventure of others? Was it gained by thecurious process of using political influence to convert an annuallicence into a practical freehold and thereby pocketing a monopolyvalue which properly belongs to the State--how did you get it?" Thatis the new question which has been postulated and which is vibratingin penetrating repetition through the land. [20]

It is a tremendous question, never previously in this country asked soplainly, a new idea, pregnant, formidable, full of life, that taxationshould not only have regard to the volume of wealth, but, so far aspossible, to the character of the processes of its origin. I do notwonder it has raised a great stir. I do not wonder that there areheart-searchings and angry words because that simple question, thatmodest proposal, which we see embodied in the new income-taxprovisions, in the land taxes, in the licence duties, and in the taxon mining royalties--that modest proposal means, and can only mean, the refusal of the modern State to bow down unquestioningly before theauthority of wealth. This refusal to treat all forms of wealth withequal deference, no matter what may have been the process by which itwas acquired, is a strenuous assertion in a practical form, that thereought to be a constant relation between acquired wealth and usefulservice previously rendered, and that where no service, but ratherdisservice, is proved, then, whenever possible, the State should makea sensible difference in the taxes it is bound to impose. 

It is well that you should keep these issues clearly before youduring the weeks in which we seem to be marching towards a graveconstitutional crisis. But I should like to tell you that a generalelection, consequent upon the rejection of the Budget by the Lords, would not, ought not to be, and could not be fought upon the Budgetalone. "Budgets come, " as the late Lord Salisbury said in1894--"Budgets come and Budgets go. " Every Government frames its ownexpenditure for each year; every Government has to make its ownprovision to meet that expenditure. There is a Budget every year, andmemorable as the Budget of my right hon. Friend may be, far-reachingas is the policy depending upon it, the Finance Bill, after all, is inits character only an annual affair. But the rejection of the Budgetby the House of Lords would not be an annual affair. It would be aviolent rupture of constitutional custom and usage extending overthree hundred years and recognised during all that time by the leadersof every Party in the State. It would involve a sharp and sensiblebreach with the traditions of the past; and what does the House ofLords depend upon if not upon the traditions of the past? It wouldamount to an attempt at revolution not by the poor, but by the rich;not by the masses, but by the privileged few; not in the name ofprogress, but in that of reaction; not for the purpose of broadeningthe framework of the State, but of greatly narrowing it. Such anattempt, whatever you may think of it, would be historic in itscharacter, and the result of the battle fought upon it, whoever wins, must inevitably be not of an annual, but of a permanent and finalcharacter. The result of such an election must mean an alteration ofthe veto of the House of Lords; if they win they will have assertedtheir right, not merely to reject legislation of the House of Commons, but to control the finances of the country, and if they lose, we willdeal with their veto once and for all. 

We do not seek the struggle, we have our work to do; but if it is tocome, it could never come better than now. Never again perhaps, certainly not for many years, will such an opportunity be presented tothe British democracy. Never will the ground be more favourable; neverwill the issues be more clearly or more vividly defined. Those issueswill be whether the new taxation, which is admitted on all sides to benecessary, shall be imposed upon luxuries, superfluities, andmonopolies, or upon the prime necessaries of life; whether you shallput your tax upon the unearned increment on land or upon the dailybread of labour; whether the policy of constructive social reform onwhich we are embarked, and which expands and deepens as we advance, shall be carried through and given a fair chance, or whether it shallbe brought to a dead stop and all the energies and attention of theState devoted to Jingo armaments and senseless foreign adventure. And, lastly, the issue will be whether the British people in the year ofgrace 1909 are going to be ruled through a representative Assembly, elected by six or seven millions of voters, about which almost everyone in the country, man or woman, has a chance of being consulted, orwhether they are going to allow themselves to be dictated to anddomineered over by a minute minority of titled persons, who representnobody, who are answerable to nobody, and who only scurry up to Londonto vote in their party interests, in their class interests, and intheir own interests. 

These will be the issues, and I am content that the responsibility forsuch a struggle, if it should come, should rest with the House ofLords themselves. But if it is to come, we shall not complain, weshall not draw back from it. We will engage in it with all our heartsand with all our might, it being always clearly understood that thefight will be a fight to the finish, and that the fullest forfeits, which are in accordance with the national welfare, shall be exactedfrom the defeated foe. 

FOOTNOTES:

[20] We do not, of course, ask it of the individual taxpayer. Thatwould be an impossible inquisition. But the House of Commons asksitself when it has to choose between taxes on various forms of wealth, "By what process was it got?"

THE BUDGET AND PROPERTY. 

ABERNETHY, _October 7, 1909_

(From _The Daily Telegraph_, by permission of the Editor. )

This is a very fine gathering for a lonely glen, and it augurs wellfor the spirit of Liberalism. Much will be expected of Scotland in thenear future. She will be invited to pronounce upon some of the largestand most complicated questions of politics and finance that canpossibly engage the attention of thoughtful citizens, and her decisionwill perhaps govern events. 

There is one contrast between Parties which springs to the eye atonce. One Party has a policy, detailed, definite, declared, actuallyin being. The other Party has no policy. The Conservative Party has nopolicy which it can put before the country at the present time on anyof the great controverted questions of the day. On most of theprevious occasions when we have approached a great trial of strength, the Conservative Party have had a policy of their own which theycould state in clear terms. You would naturally expect some reticenceor reserve from the head of a Government responsible for theday-to-day administration of affairs. But what do you see at thepresent time? Mr. Asquith speaks out boldly and plainly on all thegreat questions which are being debated, and it is the Leader of theOpposition who has to take refuge in a tactical and evasive attitude. Why, Mr. Balfour is unable to answer the simplest questions. AtBirmingham, the Prime Minister asked him in so many words: Whatalternative did he propose to the Budget? What did he mean by TariffReform? and what was his counsel to the House of Lords?

It would not be difficult to frame an answer to all these questions. Mr. Chamberlain, for instance, was quite ready with his answers to allof them. At Glasgow in 1903 he stated what his Budget would have been, and he explained precisely what he meant by Tariff Reform. AtBirmingham last month he was equally clear in urging the Lords toreject the Budget. There is no doubt whatever where Mr. Chamberlainand those who agree with him stand to-day. They would raise the extrataxation which is required, by protective import duties on bread, onmeat, on butter, cheese, and eggs, and upon foreign importedmanufactured articles; and in order to substitute their plan for oursthey are prepared to urge the House of Lords to smash up the Budgetand to smash up as much of the British Constitution and the Britishfinancial system as may be necessary for the purpose. 

That is their policy; but, after all, it is Mr. Balfour who is theleader of the Conservative Party. He is the statesman who would haveto form and carry on any administration which might be formed fromthat Party, and he will not state his policy upon any of the dominantquestions of the day. Why will he not answer these simple questions?He is the leader, and it is because he wishes to remain the leaderthat he observes this discreet silence. He tells us he is in favour ofTariff Reform, he loves Tariff Reform, he worships Tariff Reform. Hefeels that it is by Tariff Reform alone that the civilisation of GreatBritain can be secured, and the unity of the Empire achieved; butnothing will induce him to say what he means by Tariff Reform. That isa secret which remains locked in his own breast. He condemns ourBudget, he clamours for greater expenditure, and yet he puts forwardno alternative proposals by which the void in the public finances maybe made good. And as for his opinion about the House of Lords, he darenot state his true opinion to-day upon that subject. I do not say thatthere are not good reasons for Mr. Balfour's caution. It sometimeshappens that the politics of a Party become involved in such a queerand awkward tangle that only a choice of evils is at the disposal ofits leader; and when the leader has to choose between sliding into abog on the one hand and jumping over a precipice on the other, somemeasure of indulgence may be extended to him if he prefers to go onmarking time, and indicating the direction in which his followers areto advance by a vague general gesture towards the distant horizon. 

Whatever you may think about politics, you must at least, in justiceto his Majesty's Government, recognise that their position isperfectly plain and clear. Some of you may say to me, "Your course, your policy may be clear enough, but you are burdening wealth tooheavily by your taxes and by your speeches. " Those shocking speeches!"You are driving capital out of the country. " Let us look at thesepoints one at a time. The capital wealth of Britain is increasingrapidly. Sir Robert Giffen estimated some years ago that the additionto the capital wealth of the nation was at least between two hundredand three hundred millions a year. I notice that the paid-up capitalof registered companies alone, which was 1, 013 millions sterling in1893, has grown naturally and healthily to 2, 123 millions sterling in1908. And, most remarkable of all, the figures I shall submit to you, the gross amount of income which comes under the view of the TreasuryCommissioners who are charged with the collection of income-tax, wasin the year 1898-9 762 millions, and it had risen from that figure to980 millions sterling in the year 1908-9: that is to say, that it hadrisen by 218 millions in the course of ten years. 

From this, of course, a deduction has to be made for more efficientmethods of collection. This cannot be estimated exactly; but itcertainly accounts for much less than half the increase. Let us assumethat it is a half. The increase is therefore 109 millions. I only wishthat wages had increased in the same proportion. When I was studyingthose figures I have mentioned to you I looked at the Board of Tradereturns of wages. Those returns deal with the affairs of upwards often millions of persons, and in the last ten years the increase in theannual wages of that great body of persons has only been about tenmillion pounds: that is to say, that the increase of income assessableto income-tax is at the very least more than ten times greater thanthe increase which has taken place in the same period in the wages ofthose trades which come within the Board of Trade returns. 

When we come to the question of how burdens are to be distributed, youmust bear these facts and figures in mind, because the choice isseverely limited. You can tax wealth or you can tax wages--that is thewhole choice which is at the disposal of the Chancellor of theExchequer. Of course I know there are some people who say you can taxthe foreigner--but I am quite sure that you will not expect me towaste your time in dealing with that gospel of quacks and creed ofgulls. The choice is between wealth and wages, and we think that, inview of that great increase in accumulated wealth which has markedthe last ten years, and is the feature of our modern life, it is notexcessive or unreasonable at the present stage in our nationalfinances to ask for a further contribution from the direct taxpayersof something under eight millions a year. That is the total of all thenew taxes on wealth which our Budget imposes, and it is about equal tothe cost of four of those _Dreadnoughts_ for which these same classeswere clamouring a few months ago. And it is less than one-thirteenthof the increased income assessable to income-tax in the last tenyears. 

It is because we have done this that we are the object of all thisabuse and indignation which is so loudly expressed in certain quartersthroughout the country at the present time. While the working-classeshave borne the extra taxation upon their tobacco and whisky insilence, all this rage and fury is outpoured upon the Government bythe owners of this ever-increasing fund of wealth, and we aredenounced as Socialists, as Jacobins, as Anarchists, as Communists, and all the rest of the half-understood vocabulary of irritatedignorance, for having dared to go to the wealthy classes for a fairshare of the necessary burdens of the country. How easy it would befor us to escape from all this abuse if we were to put the extrataxation entirely upon the wages of the working classes by means oftaxes on bread and on meat. In a moment the scene would change, and weshould be hailed as patriotic, far-sighted Empire-builders, loyal andnoble-hearted citizens worthy of the Motherland, and sagaciousstatesmen versed in the science of government. See, now, upon whatinsecure and doubtful foundations human praise and human censurestand. 

Well, then, it is said your taxes fall too heavily upon theagricultural landowner and the country gentleman. Now, there is nogrosser misrepresentation of the Budget than that it hits theagricultural landowner, and I think few greater disservices can bedone to the agricultural landowner, whose property has in the lastthirty years in many cases declined in value, than to confuse him withthe ground landlord in a great city, who has netted enormous sumsthrough the growth and the needs of the population of the city. Noneof the new land taxes touch agricultural land, while it remainsagricultural land. No cost of the system of valuation which we aregoing to carry into effect will fall at all upon the individual ownerof landed property. He will not be burdened in any way by theseproposals. On the contrary, now that an amendment has been acceptedpermitting death duties to be paid in land in certain circumstances, the owner of a landed estate, instead of encumbering his estate byraising the money to pay off the death duties, can cut a portion fromhis estate; and this in many cases will be a sensible relief. Secondly, we have given to agricultural landowners a substantialconcession in regard to the deductions which they are permitted tomake from income-tax assessment on account of the money which theyspend as good landlords upon the upkeep of their properties, and wehave raised the limit of deduction from 12½ per cent. To 25 per cent. Thirdly, there is the Development Bill--that flagrant Socialisticmeasure which passed a second reading in the House of Lordsunanimously--which will help all the countryside and all classes ofagriculturists, and which will help the landlord in the country amongthe rest. So much for that charge. 

Then it is said, "At any rate you cannot deny that the Budget isdriving capital out of the country. " I should like to point out to youthat before the Budget was introduced, we were told that it was FreeTrade that was driving capital out of the country. Let that pass. Itis said we cannot deny that the Budget is driving capital out of thecountry. I deny it absolutely. To begin with, it is impossible todrive the greater part of our capital out of this country, for what isthe capital of the country? The greatest part of that capital is theland, the state of cultivation which exists, the roads, the railways, the mines, the mills--this is the greatest part of the capital. Theowners of that capital might conceivably, if they thought fit, departfrom the country, but their possessions would remain behind. 

I shall be asked, What about all this foreign investment that is goingon? Is not British credit now being diverted abroad to foreigncountries, to the detriment of our own country? Is not British capitalfleeing from The Socialistic speeches of the Chancellor of theExchequer, and the President of the Board of Trade, and taking refugein Germany, where of course there are no Socialists, or in othercountries, where there is never any disturbance, like France, orSpain, or Russia, or Turkey? Now let us look into that. There are onlytwo ways in which capital can leave this country for foreigninvestments. It is no good sending bits of paper to the foreigner andexpecting him to pay a dividend in return. There are only twoways--one is by exports made by British labour, and the other bybullion. Now, if the exports were to increase, surely that should be acause of rejoicing, especially to our Tariff Reformers, who regard theincrease in exports as the index of national prosperity. As for thesecond--the export of bullion--would you believe it, it is only acoincidence, but it is an amusing coincidence, there are actually sixmillion pounds' worth more gold in the country now, than there were atthe beginning of the year before the Budget was introduced. The activeand profitable investment abroad which has marked the last two orthree years, which is bound to swell the exports of the next fewyears, has not been attended by any starvation of home industry. Onthe contrary, the amount of money forthcoming for the development ofnew industries and now enterprises in this country during the lasttwo or three years has compared very favourably with the years whichimmediately preceded them, when the Conservative Government was inpower. 

Property in Great Britain is secure. It would be a great mistake tosuppose that that security depends upon the House of Lords. If thesecurity of property in a powerful nation like our own were dependentupon the action or inaction of 500 or 600 persons, that security wouldlong ago have been swept away. The security of property depends uponits wide diffusion among great numbers and all classes of thepopulation, and it becomes more secure year by year because it isgradually being more widely distributed. The vital processes ofcivilisation require, and the combined interests of millionsguarantee, the security of property. A society in which property wasinsecure would speedily degenerate into barbarism; a society in whichproperty was absolutely secure, irrespective of all conceptions ofjustice in regard to the manner of its acquisition, would degenerate, not to barbarism, but death. No one claims that a Government shouldfrom time to time, according to its conceptions of justice, attemptfundamentally to recast the bases on which property is erected. Theprocess must be a gradual one; must be a social and a moral process, working steadily in the mind and in the body of the community; but wecontend, when new burdens have to be apportioned, when new revenueshave to be procured, when the necessary upkeep of the State requiresfurther taxes to be imposed--we contend that, in distributing the newburdens, a Government should have regard first of all to ability topay and, secondly, that they should have regard to some extent, and sofar as is practicable, to the means and the process by which differentforms of wealth have been acquired; and that they should make asensible difference between wealth which is the fruit of productiveenterprise and industry or of individual skill, and wealth whichrepresents the capture by individuals of socially created values. Wesay that ought to be taken into consideration. We are taking it intoconsideration now by the difference we have made in the income-taxbetween earned and unearned incomes, by the difference we make betweenthe taxation which is imposed upon a fortune which a man makes himselfand the fortune which he obtains from a relative or a stranger. Weare taking it into consideration in our tax on mining royalties, inour licence duties and in our taxes on the unearned increment in land. The State, we contend, has a special claim upon the monopoly value ofthe liquor licence, which the State itself has created, and which theState itself maintains from year to year by its sole authority. Ifthat claim has not previously been made good, that is only because theliquor interest have had the power, by using one branch of theLegislature, to keep the nation out of its rights. All the more reasonto make our claim good now. 

Again we say that the unearned increment in land is reaped inproportion to the disservice done to the community, is a mere tolllevied upon the community, is an actual burden and imposition uponthem, and an appropriation by an individual, under existing law, nodoubt, of socially created wealth. For the principle of a specialcharge being levied on this class of wealth we can cite economicauthority as high us Adam Smith, and political authority asrespectable as Lord Rosebery; and for its application we need notmerely cite authority, but we can point to the successful practice ofgreat civilised neighbouring States. 

Is it really the contention of the Conservative Party that the Stateis bound to view all processes of wealth-getting with an equal eye, provided they do not come under the criminal codes? Is that theircontention? Are we really to be bound to impose the same burden uponthe hardly won income of the professional man and the extraordinaryprofits of the land monopolist? Are we really to recognise the liquorlicence which the State created, which the law says is for one yearonly--as if it were as much the brewers' or the publicans' property_for ever_ as the coat on his back? No; it is absurd. Of the waste andsorrow and ruin which are caused by the liquor traffic, of the injuryto national health and national wealth which follows from it, whichattends its ill-omened footsteps, I say nothing more in my argumentthis afternoon. The State is entitled to reclaim its own, and theyshall at least render unto Cæsar the things which are Cæsar's. 

The money must be found, and we hold that Parliament, in imposing theinevitable taxes, is entitled not only to lay a heavier proportionateburden upon the rich than on the poor, but also to lay a specialburden upon certain forms of wealth which are clearly social in theirorigin, and have not at any point been derived from a useful orproductive process on the part of their possessors. But it may besaid, "Your plans include other expenditure besides the Navy andOld-age Pensions. What about Insurance, Labour Exchanges, and economicdevelopment?" Those objects, at least, it may be urged are notinevitable or indispensable. It is quite true that the taxation whichwe seek to impose this year, and which is sufficient, and onlysufficient for the needs of this year, will yield more abundantrevenues in future years, and if at the same time a reduction in theexpenditure on armaments becomes possible, we shall have substantialrevenues at our disposal. That is perfectly true, but is that a reasonfor condemning the Budget? When we see on every hand great nationswhich cannot pay their way, which have to borrow merely to carry onfrom year to year, when we see how sterile and unproductive all thedodges and devices of their protective tariffs have become, when weremember how often we have ourselves been told that under Free Tradeno more revenue could be got, is it not a welcome change for ourcountry, and for our Free Trade policy, to find our opponentscomplaining of the expansive nature of a Free Trade revenue? I don'twonder that Tory Protectionists have passed a resolution at Birminghamdeclaring that the Budget will indefinitely postpone--that was thephrase--the scheme of Tariff Reform. 

And upon what objects and policies do we propose to spend the extrarevenue which this Budget will unquestionably yield in future years?People talk vaguely of the stability of society, of the strength ofthe Empire, of the permanence of a Christian civilisation. On whatfoundation do they seek to build? There is only one foundation--ahealthy family life for all. If large classes of the population liveunder conditions which make it difficult if not impossible for them tokeep a home together in decent comfort, if the children are habituallyunderfed, if the housewife is habitually over-strained, if thebread-winner is under-employed or under-paid, if all are unprotectedand uninsured against the common hazards of modern industrial life, ifsickness, accident, infirmity, or old age, or unchecked intemperance, or any other curse or affliction, break up the home, as they break upthousands of homes, and scatter the family, as they scatter thousandsof families in our land, it is not merely the waste of earning-poweror the dispersal of a few poor sticks of furniture, it is the stamina, the virtue, safety, and honour of the British race that are beingsquandered. 

Now the object of every single constructive proposal to which therevenues raised by this Budget will be devoted, not less than theobject of the distribution of the taxes which make up the Budget, isto buttress and fortify the homes of the people. That is our aim; tothat task we have bent our backs; and in that labour we shall not bedaunted by the machine-made abuse of partisans or by the nervousclamour of selfish riches. Whatever power may be given to us shall beused for this object. It is for you to say whether power will be givenus to prevail. 

But they say, "This uncertainty about the Budget is causingunemployment; you are aggravating the evils you seek to remedy. " TheBudget has not increased unemployment. Unemployment is severe in thecountry this year, but it is less severe this year than it was last, and it is less severe since the Budget was introduced than before itwas introduced. The proportion of trade unionists reported to beunemployed in the Board of Trade returns at the end of September was7. 4 per cent. , and that is lower than any month since May 1908, and itcompares very favourably with September of last year, when theproportion was not 7. 4, but 9. 3 per cent. 

I can well believe that the uncertainty as to whether the House ofLords will, in a desperate attempt to escape their fair share ofpublic burdens, plunge the country into revolution and its financesinto chaos--I can well believe that that uncertainty is bad for tradeand employment, and is hampering the revival which is beginning allover the country. I do not doubt that all this talk of the rejectionof the Budget is injurious to business, to credit, and to enterprise;but who is to blame for that? When did we ever hear of a Budget beingrejected by the Lords before? When did we ever hear of a leader of theHouse of Lords proposing, like Lord Lansdowne, to decide whether hewould tear up the British Constitution after consultation with theleaders of the drink trade? The uncertainty is not due to our action, but to their threats. Our action has been regular, constitutional, and necessary. Their threats are violent, unprecedented, andoutrageous. Let them cease their threats. Let one of theirleaders--let Mr. Balfour, for instance, say this year what he saidlast year, in the month of October, at Dumfries. Let him say, "It isthe House of Commons and not the House of Lords which settlesuncontrolled our financial system. " Let him repeat these words, andall uncertainty about the Budget will be over. 

I am amazed and I am amused when I read in the newspapers the sillyand fantastic rumours which obtain credence, or at any rate currency, from day to day. One day we are told that it is the intention of theGovernment to seek a dissolution of Parliament before the Budgetreaches the House of Lords--in other words, to kill the child to saveits life. The next day we are told the Government have decided to havea referendum--that is to say, they will ask everybody in the countryto send them a postcard to say whether they would like the Budget tobecome law or not. Another day we are told that the Government arecontemplating a bargain with the House of Lords to alter the Budget toplease them, or that we should make a bargain with them that if theypass the Budget we should seek a dissolution in January. Why should wemake a bargain with the House of Lords? Every one of those rumours ismore silly, more idiotic, than the other. I wish our Conservativefriends would face the facts of the situation. "Things are what theyare, and their consequences will be what they will be. " The House ofLords has no scrap of right to interfere in finance. If they do, theyviolate the Constitution, they shatter the finances, and they createan administrative breakdown the outcome of which no man can foresee. If such a situation should occur a Liberal Government can look only tothe people. We count on you, and we shall come to you. If you sustainus we shall take effectual steps to prevent such a deadlock everoccurring again. That is the whole policy of his Majesty'sGovernment--blunt, sober, obvious, and unflinching. 

THE CONSTITUTIONAL MENACE

NATIONAL LIBERAL CLUB, _October 9, 1909_

(From _The Times_, by permission. )

I have never been able to rank myself among those who believe that theBudget will be rejected by the House of Lords. It is not that I takean exaggerated view of the respect which that body would bear to theconstitutional tradition upon which alone they depend. It is not thatI underrate at all the feelings of personal resentment and ofclass-prejudice with which they regard, naturally, many of theprovisions of the Budget. But I have a difficulty in believing thatthe responsible statesmen by whom they are led, and by whom we thinkthey are controlled, would not hesitate as patriotic men before theyplunged the finances of the country into what would be a largelyirremediable confusion. And still more I find it difficult to believethat Party leaders, anxious no doubt for office on the most secureterms and at the shortest notice, would voluntarily run unusual risksin order to be able to fight a decisive battle upon exceptionallyunfavourable ground. In common with most of us who are here to-night, I hold that the rejection of the Budget by the House of Lords would bea constitutional outrage. I do not think we are entitled at this stageto assume that such an outrage will be committed. We cannot creditsuch intentions, even though we read them every day brutally andblatantly affirmed by a powerful Party Press. We do not credit suchintentions. We are, however, bound to be fully prepared against allcontingencies. The necessary precautions must be taken. The fightingmachine must undergo all those preliminary processes necessary for arapid and efficient mobilisation. And the ground on which a greatbattle might take place, the theatre of war, must be scannedbeforehand with military foresight. And that is being done. 

But those who lightly estimate the crisis which will follow therejection of the Budget by the House of Lords must be either strangelyunimaginative or else they must be strangely ignorant of Britishhistory and of the British Constitution. The control of finance bythe representative Assembly is the keystone of all that constitutionalfabric upon which and within which all of us here have dwelt safelyand peacefully throughout our lives. It is by the application of thepower of the purse, and by the application of the power of the pursealmost alone, that we have moved forward, slowly and prosaically, nodoubt, during the last two hundred years, but without any violentoverturn such as has rent the life and history of almost every otherconsiderable country, from a kind of mediæval oligarchy to a vastmodern democratic State based on the suffrages of six million or sevenmillion electors, loyal to the Crown, and clothed with all the statelyforms of the venerable English monarchy. Finance has been thekeystone. Take finance away from the House of Commons, take thecomplete control of financial business away from the representativeAssembly, and our whole system of government, be it good, bad, orindifferent, will crumble to pieces like a house of cards. 

The rejection of the Budget by the House of Lords would not merely bea question of stopping a money Bill or of knocking out a few taxesobnoxious to particular classes; the rejection of the Budget by theHouse of Lords would mean the claim of the House of Lords--that is, the claim of a non-elective and unrepresentative Chamber--to make andto unmake Governments; and a recognition of that claim by the countrywould unquestionably mean that the House of Lords would become themain source and origin of all political power under the Crown. Nowthat is a great quarrel; that is a quarrel on which we had hoped, onwhich we had been taught, that the sword had been sheathedvictoriously for ever. And that is the issue that is before us now. Wedo not intend to soften it in any way. The responsibility for theconsequences must rest with the aggressor who first violates theconstitutional tradition of our land. 

The Budget is through Committee. We have had not merely an exhaustivebut an exhausting discussion. I am told by ingenious calculators inthe newspapers that over six hundred hours, from some of which Iconfess I have been absent, of debate have been accorded to theCommittee stage. No guillotine closure has been applied. Full, free, unfettered debate has been accorded--has been accorded with apatience and with a generosity unprecedented in Parliamentary annals, and which in effect has left a minority not merely satisfied in allthe conditions of reasonable debate, but unable even on grounds of themost meticulous partisanship to complain that the fullest opportunityhas not been accorded to them. In all this long process of six hundredhours and upwards we have shown ourselves willing to make concessions. They are boasting to-day that they, forsooth, are in part the authorsof the Budget. Every effort has been made to meet honest and outspokendifference; every effort has been made to gather for this Budget--thepeople's Budget, as they know full well it is--the greatest measure ofsupport not only among the labouring classes, but among all classes inour vast and complicated community. 

It has been a terrible strain. Lord Rosebery the other day at Glasgowpaid his tribute to the gallant band who had fought in opposition tothe Budget. Had he no word for his old friends? Had he no word forthose who were once proud to follow him, and who now use in regard tohim only the language of regret? Had he no word for that othergallant band, twice as numerous, often three times as numerous, as theTory Opposition, who have sat through all these months--fine speakerssilent through self-suppression for the cause, wealthy men sitting upto unreasonable hours to pass taxes by which they are mulcted as muchas any Tory? Men who have gone on even at the cost of their lives--hadhe no word for them? We to-night gathered together here in theNational Liberal Club have a word and a cheer for the private membersof the Liberal Party in the House of Commons who have fought thisbattle through with unequalled loyalty and firmness, and who haveshown a development of Parliamentary power to carry a great measurewhich I venture to say has no counterpart in the Parliamentary historyof this country. 

Well, that long process of debate, of argument, of concession, ofcompromise, of conciliation will very soon come to an end. When theBudget leaves the House of Commons the time of discussion, so far aswe are concerned, will have come to an end. It will leave the House ofCommons in a final form, and no amendment by the House of Lords willbe entertained by us. I have heard it often said, and I have read itmore often still, that there are some members of the Cabinet who wantto see the Budget rejected, and I have even been shocked to findmyself mentioned as one of these Machiavellian intriguers. To thosewho say we want to see the Budget rejected I reply, That is not true. As Party men we cannot be blind to the great tactical advantages whichsuch an event would confer upon us. We cannot pretend that ourfeelings in such an event would be feelings of melancholy; but we haveour work to do. Politics is not a game. It is an earnest business. Wehave our work to do. We have large, complex schemes of socialorganisation and financial reform on which we have consumed ourefforts, and which we desire to see, at the shortest possible date, brought to conception and maturity. We do not want to see the financesof the country plunged into inextricable confusion, and hideous lossinflicted on the mass of the people and the taxpayers. For my part, Isay without hesitation I do not at all wish to see British politicsenter upon a violent, storm-shaken, and revolutionary phase. I amglad, at any rate, if they are to enter upon that phase, it shall beon the responsibility of others. 

Our intentions are straightforward. We seek no conflict; we fear noconflict. We shall make no overtures to the House of Lords; we shallaccept no compromise. We are not called upon to offer them anydignified means of escape from a situation into which they have beenbetrayed by the recklessness of some of their supporters. They have noright whatever to interfere in financial business directly orindirectly at any time. That is all we have to say, and for the restwe have a powerful organisation, we have a united Party, we have aresolute Prime Minister, we have a splendid cause. 

I do not think we need at this stage speculate upon the result of abattle which has not yet been, and which may never be at this juncturefought. I have seen enough of the ups and downs of real war to knowhow foolish forecasts of that character often are. But when an armyhas been brought into the field in the best condition, in the largestpossible numbers, in a spirit of the highest enthusiasm, at the mostfavourable season, and on the best possible ground--then I think, whenour army has been brought into that situation, we can afford to awaitthe supreme arbitrament with a cool and serene composure; and thismood of composure and of calmness may ripen into a kind of joyous andwarlike heartiness, if we can also feel that the cause for which weare fighting is broadly and grandly a true and righteous cause. 

Error, of course, there is always in all human affairs--error ofconception, error of statement, error of manner, error of weakness, error of partisanship. We do not deny that, but strip both the greatpolitical Parties which to-day present themselves before the people ofBritain, strip them of their error, strip them of that admixture oferror which cloys and clogs all human action, divest them of thetrappings of combat in which they are apparelled, let them be nakedlyand faithfully revealed. If that were done, cannot we feel soberly andassuredly convinced that, on the main contested issues of the day, upon the need of social organisation, upon the relations between thetwo Houses of Parliament, upon the regulation and control of theliquor traffic, upon a national settlement with Ireland as we havemade with Africa, upon Free Trade, upon the land--upon all of themseparately, still more upon all of them together, if we ask ourselvesin our most silent and reflective mood alone--cannot we feel a soberconviction that, on the whole, we hold the larger truth?

_Printed by Hazell, Watson & Viney, Ld. , London and Aylesbury. _

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