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the least effect in preventing an Irish revolt against any provisions designed to restrict the complete commercial and financial independence of Ireland. No man has a right to fix a boundary to the march of a nation.' The history of 1782 will sooner or later repeat itself. There is no practicable alternative between the Union and Repeal. It is necessary to remember this when we are considering how far any financial proposals for a Home Rule constitution are likely to work out successfully, when an Irish Parliament with an Irish Executive controlled only by it governs Ireland.
Finance cannot be isolated. The claims made by the Nationalists in reference to the finance of Home Rule depend to a very great extent upon the history of Irish constitutional relations with Great Britain, and not merely upon modern tables of revenue and expenditure. Ireland achieved financial and legislative independence in 1782. When Grattan's parliament commenced its career, the net revenue of Ireland was 1,106,500l., and the expenditure about 1,313,7001. The debt charges were 120,8007.; over 600,000l. was contributed to the army and navy; the civil government charges were 583,000l. The debt, funded and unfunded, which had been incurred during the Seven Years' War and the War of American Independence amounted to 1,917,000l. Additional taxes were imposed in 1785; and revenue and expenditure balanced one another in the year 1792. The debt then stood at 1,586,000l. The effects, however, of the great French war and the Rebellion of 1798 were financially disastrous; and the annual deficits rose rapidly from 400,0007. in 1793 to 3,837,000l. in 1800. At the beginning of 1801 the debt stood at 28,541,1577.; and the country was verging on bankruptcy.*
Meanwhile, the questions of inter-insular trade and defence had become dominant. An independent Ireland could withhold all military assistance. An independent Ireland could also create a protective tariff and bar out English goods from the Irish market. England depended to a great extent in time of war on food supplies drawn from Ireland. It was essential to come to an arrangement. Pitt accordingly proposed in 1785 that there should be
complete freedom of trade between England and Ireland, and that there should be a fixed contribution made by Ireland from her hereditary revenue-the excise and customs duties for the purposes of the defence of the Empire in time of peace; while in time of war Ireland was to contribute voluntarily such further aids as extraordinary emergencies might require. The Irish House of Commons passed resolutions accepting these proposals, but in the British parliament they were violently opposed. The jealousy of the English manufacturers was aroused; and modifications were introduced that would have subjected Irish trade to English domination. The result was that, when the resolutions came back to the Irish parliament for ratification, they were at once rejected. Irish public opinion indignantly reprobated them as an attempt to re-establish the ascendency of the British parliament over Irish commerce, and to deprive the Irish parliament of its legislative independence.
This episode of 1785 formed the first of the great differences between the British and Irish parliaments, and unquestionably led to the determination of the British ministry to bring about the Union. The history of the commercial propositions should be read again at this crisis when it is proposed to break up the Union. Mr Redmond, in his speeches in England and articles in English papers and magazines, has repeatedly stated that 'Ireland wants an Irish parliament with an executive responsible to it charged with the management of purely Irish affairs (land, education, local government, transit, labour, industries, taxation for local purposes, law and justice, police, etc.), leaving to the Imperial parliament the management just as at present of all Imperial affairs -army, navy, foreign relations, customs, Imperial taxation, matters pertaining to the Crown, the Colonies, and all other questions which are Imperial and not local in their nature.'* In Ireland, however, the Nationalist voice, in spite of the efforts of the parliamentarians to stifle it, is speaking out louder and louder; and Nationalist pens are asserting more and more strongly every day that Home Rule, without control by the Irish parliament of
* See e.g. 'McClure's Magazine,' Oct. 1910; T. P.'s Magazine,' Feb. 1911; and speech on the Address, 1911 (Parl. Debates, 1911, xxi, 1102).
Irish customs, excise, trade and commerce, will not be worth having, and will be rejected as ignominiously as was the Councils Bill by Nationalist Ireland.
The Seventh Article of the Act of Union provided that Ireland should contribute to Imperial expenditure in the proportion of two to fifteen; in other words, that out of every 1007. Ireland should contribute about 127. and Great Britain about 881. These proportions were stated by Pitt and Castlereagh to be based upon the taxable capacities of the two kingdoms. It is also declared that these contributions should be made to the expenditure of the United Kingdom.' Under the Act these proportions were subject to revision until the Exchequers should be amalgamated, when contribution by fixed proportion was to cease. Provision was made for parliament in the future declaring that the expenditure of the United Kingdom should be defrayed 'indiscriminately 'by equal taxes imposed on the like articles in both countries, subject only to such abatements in Ireland and in Scotland as circumstances may appear from time to time to demand'; and that 'from the period of such declaration it should no longer be necessary to regulate the contribution of the two countries towards the future expenditure of the United Kingdom according to any specific proportion.' The Act of Union clearly treated all expenditure of the United Kingdom, no matter where spent, as 'Imperial' or 'common' expenditure.
The continuance of the Napoleonic wars soon demonstrated that the proportion of contribution fixed for Ireland under the Act of Union was more than she could bear in time of stress. The Irish deficit in the year 1816 was 10,458,000l., and the actual amount of the Funded Debt of Ireland on February 1, 1817 was 130,561,000l.† Irish financial authorities contend that a large portion of this debt was unduly debited to Ireland; but it is clear that, even if very large deductions were to be made from the total debt, yet, unless Great Britain had taken over the liability, Ireland would have been bankrupt. The debts of Ireland and Great Britain were accordingly
Sir E. Hamilton's Memorandum, Financial Relations Report, i, 334, 335. + Report of Select Committee on Taxation of Ireland (1864; H.C. 513); Evid. p. 21 p. No. 12, p. 396.
consolidated in the year 1817.* The three kingdoms then became finally bound together in fiscal union. It is important to consider what has been since 1817 the fiscal relation of Great Britain and Ireland.
The Act of 1817 provided (1) that after January 5, 1817, all the revenues which before that date formed part of the Consolidated Fund of Great Britain and of Ireland respectively should form one general fund, to be called the Consolidated Fund of Great Britain and Ireland; (2) that, whether any part of it was in the Exchequer of Great Britain or that of Ireland, it should be applied indiscriminately in the first place to the payment of the whole of the interest of the National Debts of Great Britain and Ireland and their Sinking Funds as one Consolidated National Debt and Sinking Fund; in the second place it should in like manner be applied in paying the salaries and charges on the Civil List in Great Britain and Ireland; in the third place it should in like manner be applied in payment of any charges on either of the Consolidated Funds created by any Act of Parliament in force before January 5, 1817; and, lastly, after payment of all these charges the said Consolidated Fund of the United Kingdom should be in like manner indiscriminately applied to the service of the United Kingdom of Great Britain and Ireland or any part thereof as shall be directed by Parliament.
The constitutional fiscal relation of the three kingdoms created by the Act of Union, reasserted by resolutions of the House of Commons in 1816 preliminary to the amalgamation of the Exchequers, and re-enacted in terms by the Act of 1817, is that there should be a common system of indiscriminate taxation, and that, if that system of taxation pressed with undue severity upon Scotland or Ireland, they should be entitled to such particular exemptions and abatements as circumstances may appear from time to time to demand.'
'The clear intention of the framers of the Act of Union was that, so far as related to taxation or the raising of revenue, Ireland should (whether contributing, as she did up to 1817, according to a certain ratio, or, as subsequently, by way of indiscriminate taxation subject to exemptions), have a distinct
* 56 George III, cap. 98.
position and separate consideration. But it was their equally clear intention that all expenditure, including no less that upon civil government in Ireland than that upon the Army and Navy, should be common or Imperial. It was never intended that the ratio of contribution or the extent of the exemptions and abatements (as the case might be) should be affected by consideration of the relative cost of administration in each of the three kingdoms. While legislative and fiscal union of the three kingdoms remains, this way of treating the matter must hold good.'
The theory of the Imperial finance of the three kingdoms when the Exchequers were amalgamated was simple. Each country was to contribute by equal taxes' to the common Exchequer. Equal taxes' were to be those which would press upon each country fairly, in accordance with its relative ability. From the common Exchequer, fed by these equal taxes, were to be paid out, without consideration of anything but necessity and without differentiation on the ground of the locality of the expenditure or the relative contribution to the common chest of England, Scotland or Ireland, such moneys as were required for the public services, civil, naval or military. One portion of the United Kingdom may and does from time to time make heavier demands upon the common chest than another. In some respects England gets proportionately more, as in cash outlay in the dockyards, arsenals and other public services; in other respects Ireland gets proportionately more, as in the case of old age pensions; but it is all common' expenditure, paid out under authority of the United Parliament, and constitutionally indiscriminate.' To anyone who reads the Union debates or studies the Union Statutes, it is perfectly clear that the framers of the Act of Union never contemplated that expenditure of revenue in any one of the three kingdoms was to be measured by the proportion of the contribution of such kingdom to the common exchequer; or that any such expenditure should be considered as a 'set-off' to any disproportionate burden which the taxes imposed by Parliament might from time to time cast upon either Scotland or Ireland as contrasted with England.
* Mr Childers' draft Report. Financial Relations Report, iii, 191.