with the Stock Exchange; the new taxes were not taxes on land, but tolls on accretions of value to certain classes of land arising from social causes and not from individual enterprise. They were distorted and caricatured by all hostile critics, and he defended the increment and reversion duty at considerable length, justifying the exemptions from them and asking fairminded and candid opponents (some of whom were understood to be present) to note these exemptions, and mark the economic authority in favour of the taxes themselves. The increment tax had been applied in Continental municipalities and proposed for Imperial purposes by the Conservatives of Germany. He defended also at some length the steps taken and to be taken with regard to the income tax and super-tax, and claimed that Great Britain was doing more than any country to pay off debt. The only alternative Free Trade Budget was Lord Avebury's (p. 147) which had better be passed by in friendly silence. The only real alternative was a tariff; the experiences of Germany and America were not encouraging, and he saw no signs that the country was being converted. Hardships and inconveniences to the business world, if proved, would be set right; but the Budget proposals were just, and the Government stood by them.

Next day a great Budget demonstration took place in Hyde Park; a procession marched thither from the Embankment, and speeches were delivered from twelve platforms. That of the Labour party attracted the largest crowd, and the resolution passed at the other eleven was passed here in a more strongly worded version. Opinions differed as to the significance of the proceedings; the Times said that they were "skilfully engineered"; the Westminster Gazette that an unusually large proportion of the audience was acutely interested; according to some estimates, the numbers reached 250,000. Much had been said of the injury done to building by the Budget; yet the building trades' federation was specially conspicuous in the Park.

As a counterblast to Mr. Asquith's City speech, Mr. Balfour likewise addressed a meeting at the Cannon Street Hotel on July 27. It was held under the auspices of the City of London Conservative Association; but the number of prominent financiers present was less. A great commercial country, Mr. Balfour said, demanded security abroad and at home. But, speaking the day after a naval debate (post, p. 174), he was not sure that the Government yet intended to build the contingent Dreadnoughts; they were afraid of their tail. As to security at home, the Budget, severely as it pressed on certain classes, was even more injurious to business and employment. The Prime Minister had spoken of its alleviations and qualifications; let it be noted how many of them were introduced at the instance of the Opposition. Indeed, the day after the Budget was introduced Mr. Asquith's speech of July 23 would have been impossible. The Budget injured employment and capital; it hampered specula

tive building, and added possibly ten, possibly thirty millions to the burden on the community by the provision for valuation. The death duties must diminish the amount spent by landed proprietors, and still more the capital of businesses. They had ceased to be capitalised income tax, and would now be paid out of capital. We were to reduce the National Debt by 25,000,000. a year, and take 25,000,000l. out of the national capital by their increase. Import duties were inevitable for financial reasons, and he did not believe that any scale of duties such as he individually could contemplate would have the slightest effect in hampering industry or diverting trade. By showing the real meaning of Free Trade finance the Government was destroying the illusions which had a basis of sound finance under Peel and Gladstone; and the question whether Tariff Reform was gaining or losing in the country should be decided at a general election. At an overflow meeting, Mr. Balfour insisted that the force behind the Budget was really Socialism.

To return to the House of Commons, the postponement of the Finance Bill had been followed by several debates of importance. The vote for the salary of the Chief Secretary (July 21) elicited admissions from the Ulster members that the state of Ireland had improved considerably, though they attributed it to the Chief Secretary's concessions to the disturbers. Mr. Birrell contrasted the debate with that on the Address (p. 23) and defended his avoidance of coercion and the policy of breaking up the grasslands; and a reduction of the vote was negatived. Three clauses of the Irish Land Bill were passed on July 23, after an unsuccessful attempt to substitute Consols for Irish Land Stock, supported by Unionists and Nationalists alike. This proposal, though opposed by the Government as tending to depreciate the price of Consols still further, was rejected by a majority of only 8 (130 to 122). Under the special closure resolution Clauses 3 and 4 were undiscussed. But the debate on the Foreign Office Vote (July 22) was of more importance in view of the Tsar's approaching visit. Sir Charles Dilke moved a reduction in order to criticise the foreign policy of the Government. He condemned the over-adventurous policy of Great Britain and certain other Powers, and also certain incautious utterances at home as further justifying, to some extent, the German shipbuilding programme. As to the annexation of Bosnia, we had made too much of the sanctity of the Berlin Treaty. The Foreign Secretary's virtual advocacy of the doctrine of the balance of power in Europe (p. 64) set up a dangerous policy, keeping Great Britain in perpetual hot water with occasional risk of war. While approving the Note as to Crete (post, Foreign History, Chapter III.), he thought there were signs of weakening as to the Congo. King Leopold, speaking at Antwerp, had ignored European opinion; so had M. Renkin at Boma. The Belgian reply to our Note implied that our Consuls' interference was illegal; he hoped this would be contested by the

with the Stock Exchange; the new taxes were not taxes on land, but tolls on accretions of value to certain classes of land arising from social causes and not from individual enterprise. They were distorted and caricatured by all hostile critics, and he defended the increment and reversion duty at considerable length, justifying the exemptions from them and asking fairminded and candid opponents (some of whom were understood to be present) to note these exemptions, and mark the economic authority in favour of the taxes themselves. The increment tax had been applied in Continental municipalities and proposed for Imperial purposes by the Conservatives of Germany. He defended also at some length the steps taken and to be taken with regard to the income tax and super-tax, and claimed that Great Britain was doing more than any country to pay off debt. The only alternative Free Trade Budget was Lord Avebury's (p. 147) which had better be passed by in friendly silence. The only real alternative was a tariff; the experiences of Germany and America were not encouraging, and he saw no signs that the country was being converted. Hardships and inconveniences to the business world, if proved, would be set right; but the Budget proposals were just, and the Government stood by them.

Next day a great Budget demonstration took place in Hyde Park; a procession marched thither from the Embankment, and speeches were delivered from twelve platforms. That of the Labour party attracted the largest crowd, and the resolution passed at the other eleven was passed here in a more strongly worded version. Opinions differed as to the significance of the proceedings; the Times said that they were "skilfully engineered"; the Westminster Gazette that an unusually large proportion of the audience was acutely interested; according to some estimates, the numbers reached 250,000. Much had been said of the injury done to building by the Budget; yet the building trades' federation was specially conspicuous in the Park.

As a counterblast to Mr. Asquith's City speech, Mr. Balfour likewise addressed a meeting at the Cannon Street Hotel on July 27. It was held under the auspices of the City of London Conservative Association; but the number of prominent financiers present was less. A great commercial country, Mr. Balfour said, demanded security abroad and at home. But, speaking the day after a naval debate (post, p. 174), he was not sure that the Government yet intended to build the contingent Dreadnoughts; they were afraid of their tail. As to security at home, the Budget, severely as it pressed on certain classes, was even more injurious to business and employment. The Prime Minister had spoken of its alleviations and qualifications; let it be noted how many of them were introduced at the instance of the Opposition. Indeed, the day after the Budget was introduced Mr. Asquith's speech of July 23 would have been impossible. The Budget injured employment and capital; it hampered specula

tive building, and added possibly ten, possibly thirty millions to the burden on the community by the provision for valuation. The death duties must diminish the amount spent by landed proprietors, and still more the capital of businesses. They had ceased to be capitalised income tax, and would now be paid out of capital. We were to reduce the National Debt by 25,000,0001. a year, and take 25,000,000l. out of the national capital by their increase. Import duties were inevitable for financial reasons, and he did not believe that any scale of duties such as he individually could contemplate would have the slightest effect in hampering industry or diverting trade. By showing the real meaning of Free Trade finance the Government was destroying the illusions which had a basis of sound finance under Peel and Gladstone; and the question whether Tariff Reform was gaining or losing in the country should be decided at a general election. At an overflow meeting, Mr. Balfour insisted that the force behind the Budget was really Socialism.

To return to the House of Commons, the postponement of the Finance Bill had been followed by several debates of importance. The vote for the salary of the Chief Secretary (July 21) elicited admissions from the Ulster members that the state of Ireland had improved considerably, though they attributed it to the Chief Secretary's concessions to the disturbers. Mr. Birrell contrasted the debate with that on the Address (p. 23) and defended his avoidance of coercion and the policy of breaking up the grasslands; and a reduction of the vote was negatived. Three clauses of the Irish Land Bill were passed on July 23, after an unsuccessful attempt to substitute Consols for Irish. Land Stock, supported by Unionists and Nationalists alike. This proposal, though opposed by the Government as tending to depreciate the price of Consols still further, was rejected by a majority of only 8 (130 to 122). Under the special closure resolution Clauses 3 and 4 were undiscussed. But the debate on the Foreign Office Vote (July 22) was of more importance in view of the Tsar's approaching visit. Sir Charles Dilke moved a reduction in order to criticise the foreign policy of the Government. He condemned the over-adventurous policy of Great Britain and certain other Powers, and also certain incautious utterances at home as further justifying, to some extent, the German shipbuilding programme. As to the annexation of Bosnia, we had made too much of the sanctity of the Berlin Treaty. The Foreign Secretary's virtual advocacy of the doctrine of the balance of power in Europe (p. 64) set up a dangerous policy, keeping Great Britain in perpetual hot water with occasional risk of war. While approving the Note as to Crete (post, Foreign History, Chapter III.), he thought there were signs of weakening as to the Congo. King Leopold, speaking at Antwerp, had ignored European opinion; so had M. Renkin at Boma. The Belgian reply to our Note implied that our Consuls' interference was illegal; he hoped this would be contested by the

Government. After Sir George White (L., Norfolk, N.W.) had urged a stronger Congo policy, Mr. A. Henderson (Lab.) protested against giving an official character to the Tsar's reception at Cowes. The Reval visit had not led to an improvement in the condition of Russia, and statistics (quoted from a book by Prince Kropotkin) showed an increase in the number of prisoners and death sentences; he gave shocking details. The Tsar and the Russian Government could not be dissociated from responsibility. Let the reception be private; if the peace of Europe would thereby be risked, greater risks had been taken for less worthy objects by this and other Governments. Protests would be made outside the House.

Sir Edward Grey delivered a weighty and exceptionally impressive reply. Dealing first with Sir Charles Dilke's speech, he said that our agreements with certain Powers were not to be regarded as setting up a barrier against Powers with whom there was no agreement, and the Government meant to stand by them as tending to remove friction. The Treaty of Berlin superseded all previous diplomatic engagements, and also the line taken by Lord Salisbury in 1877. We were bound to uphold its sanctity, and had we taken a less decided line the settlement might not have been effected so peacefully. The course taken must be judged by results, and in Austria our attitude was now better understood. He repudiated the doctrine that the preservation of the status quo in Crete was equivalent to "virtual annexation"; they had desired to do nothing to imperil the new régime in Turkey. As to the Congo, the British attitude had not weakened. The Government had wished the Belgian Government to have a fair start, and Belgium had not disputed, at any rate to Great Britain, that it had inherited the obligations of the Congo State. France and Germany had recognised the annexation, and, though our action was not to be limited by that of other Powers, we must not suppose that they would follow us. The Belgian Colonial Minister [M. Renkin] was expected back from the Congo at the end of September, and our action in his absence would have given the impression that we had a selfish purpose. Until forced labour was abolished, we could not recognise the annexation, and if some question arose meanwhile about a British subject in the Congo there would be a serious impasse. He believed that publicity through the Belgian Parliament would kill the old régime, but while this lasted our recognition must be deferred, and a prolongation of the situation would be specially embarrassing for the Government responsible for the administration of the Congo. As to the Tsar, we could not either criticise or justify the internal administration of a foreign country without grave offence; if the Reval visit had improved the condition of Russia he would not say so; let them imagine British feeling if it could have been supposed that the grant of responsible Government to the Transvaal had been furthered by a visit