£58,668,392. Her population had increased from 13,765,000 in 1820 to 33,469,000 (estimated) in 1893, but her "true revenue had fallen per head of the population from £3 13s. to £2 13s. 4d. (approximately), although her local expenditure had risen from 4s. 7d. to £1 2s. (approximately). In other words, a great increase of wealth had enabled the British taxpayer to pay far more while feeling the burden far less. The converse was true of Ireland.

The current state of the account in 1893-94 was as follows:

Great Britain, though raising in "true" revenue between eleven and twelve times as much as Ireland, was costing only between five and six times as much to administer as Ireland, and was therefore contributing to Imperial services twentyeight times as much as Ireland.

Now the Commissioners had stated that the taxable capacity of Ireland was not one-eleventh, but, at the utmost, onetwentieth-in other words, that she ought to contribute not more than one-twentieth of the United Kingdom revenue. On that basis she should as we have seen, have been showing a revenue in 1893-94 not of £7,568,649, but of £4,842,781.

But, if her local expenditure had also been proportionate to her true taxable capacity of one-twentieth, instead of standing at £5,602,555, it would have stood at £1,811,057, or two-thirds less, while if her net contribution to Imperial services had likewise been a twentieth, instead of paying £1,966,094, she would have had to pay £3,031,724, or a million more.

The conclusion, therefore, might be extracted from the figures that, although by hypothesis overtaxed, Ireland was drawing a balance of profit, because, by having more spent on her-or, to put it in another way, by costing more to

govern, she paid a million less to the common purse than if she had been taxed according to her capacity.

This was precisely the conclusion drawn by one member of the Commission, Sir David Barbour, and implicitly acquiesced in by one other member, Sir Thomas Sutherland. All the other Commissioners agreed that there was something seriously amiss, and declined to regard the disproportionately high expenditure on Ireland as compensation for the over-high taxation. The O'Conor Don, as successor in the chairmanship to Mr. Childers, and four others contented themselves with setting forth the facts, but made no recommendations, on the ground that the Commission had not been asked to make any. Mr. Childers, who died before the completion of the inquiry, left a Draft Report recommending that a special grant, amounting to two millions a year, should for the future be allocated to Ireland. The other six members, dividing into two groups of three, under Lord Farrer and Mr. Sexton respectively, and stating their views in two different Reports, all agreed that a form of Home Rule giving financial independence to Ireland was the only solution of the difficulty.

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The questions at issue were not at all obscure. Any apparent obscurity was caused by the terms of reference to the Commission, which assumed the permanence of the Union, while it was absolutely impossible for the Commission, divided though its members were in politics, to start work at all without, as they said, considering Great Britain and Ireland as separate entities." The reader must be on his guard against exaggerating the "over-taxation of Ireland" in its purely cash aspect. The really important points were: (1) The suitability of the Irish taxes and the responsibility for levying them; (2) the amount and suitability of the expenditure in Ireland and the responsibility for its distribution. In order to see conflicting principles stated in their clearest form the reader should compare the terse and vigorous reports of Sir David Barbour on the one hand, and of Lord Farrer, Lord Welby, and Mr. Currie on the other.

It was Sir David Barbour's great merit that he was not afraid of his own conclusions. He frankly stated, like all the other Commissioners, that Ireland's taxation, considered by itself, without regard to Irish expenditure, was unsuitable and

unjust. He recognized that a system of taxation which was suitable for a rich, industrial, and expanding country like Great Britain was unsuitable for a poor, agricultural, and economically stagnant country like Ireland. He had before him the figures showing that two-thirds of the Irish population was rural, and that between three and four-fifths of the English population was urban.* He laid special stress on the fact that five-sevenths of Irish revenue, as compared with less than half the British revenue, was derived from taxes on commodities of general consumption, pressing heavily on the poor, and set forth the figures showing that the product of these taxes represented a charge of £1 2s. 95d. per head of the population in Ireland, and £1 1s. 05d. in Great Britain, although the wealth per head of Great Britain, as he admitted, "was much greater than the wealth of Ireland per head."† His conclusion was that this state of affairs, though regrettable, could not be helped, because, under the Union, whose permanence he took for granted, a change of general taxation to suit Ireland was simply impracticable. He did, it is true, point out incidentally that the same hardship might be said to affect poor localities in Great Britain and poor individuals in Great Britain, but he recoiled from the absurd fallacy involved in saying that on that account Ireland was not unjustly taxed. If he had gone to that length he could never have signed the unanimous Report.

I only mention this latter point because some outside critics have been bold enough to assert the fallacy in its completeness, proving, as they easily can, that the purchase of a pound of tea or a pint of beer is as great an expense to a man with 10s. a week in Whitechapel as to a man with 10s. a week in Connemara. Such reasoning nullifies the whole science of taxation. It would be as sensible to say that our whole fiscal system might wisely be transplanted in its entirety to any foreign country or to any self-governing Colony absolutely irrespective of their social and economic conditions and of their habits. Yet Ireland in these respects has always differed from Great Britain at least as much as any self-governing Colony and many European countries. The tea-tax produces scarcely anything in France; it produces an enormous amount *Final Report, p. 24 (Census figures of 1891). † Final Report, p. 122.

relatively in Ireland, and is a greater burden there than in Great Britain. The wine-tax is not felt by Ireland; it is felt more by England; it would cause a revolution in France. Beer is taxed lightly in the United Kingdom, but the Irishman drinks only half as much beer as the Englishman. Meat is untaxed, but the Irish poor eat no meat. Spirits and tobacco are highly taxed, and they are consumed more largely in Ireland than in England. And so on. The whole Commission recognized that the circumstances of the two countries were different, and stated “that identity of rates of taxation does not necessarily involve equality of burden."

Nor could Sir David Barbour have dissociated himself from these conclusions without destroying the rest of his argument. He pointed out with truth that merely to reduce Irish taxation to its correct level, and to leave Irish expenditure where it was, would be to wipe out Ireland's contribution to Imperial purposes and leave her with a subsidy from Great Britain of three-quarters of a million. On the other hand, he held, as I have already indicated, that unduly heavy taxation in Ireland was already compensated for by an excess of local expenditure in Ireland as compared with Great Britain. But how, on its merits, and apart from the question of taxation, could such an excess be justified? The Act of Union had provided for indiscriminate expenditure in the event of a fiscal union. Most of the other Commissioners, indeed, had objected to the idea of distinguishing between "Imperial” expenditure and "local" expenditure, and striking a balance called an “Imperial contribution," without, at the same time, distinguishing politically between Ireland and Great Britain. In other words, they took up the not very logical position that Ireland must be considered as a separate entity for purposes of finance owing to the phrase about "abatements and exemptions," but not for purposes of expenditure. Whether this was a correct interpretation of the Act of Union has always been a matter of dispute, but the practical problem is little affected thereby. Sir David Barbour thought it an incorrect interpretation, and reached the more logical position that Ireland, both for revenue and expenditure, could be regarded as a separate entity. This view enabled him to put forward an argument which, while ostensibly palliating the over-taxation

of Ireland, in reality condemned the whole of the political system established by the Union. We can, he said, in effect, rightly distinguish between Imperial and local expenditure, and it is permissible to spend more on Ireland than on Great Britain. By so spending more we not only cancel our debt to Ireland, but make her a present of a million which would otherwise go to swell her contribution to Imperial purposes. Now, to get at the pith of this argument, the reader must bear in mind what Sir David Barbour thought it needless to remark upon, that Ireland had, and has, a separate quasicolonial system of administration of her own, but outside her own control, a system of which he approved. In other words, besides having to be considered in finance as a separate entity," she was to a large extent in actual fact, politically, a "separate entity," though not a self-governing entity, to which through the channel of the Irish Government Departments a special large quota for local expenditure could be easily allocated. As an economist, therefore, and as an upholder of the strangely paradoxical system set up by the so-called "Union," Sir David Barbour was absolutely consistent.

So were Lord Farrer, Lord Welby, and Mr. Currie in coming to diametrically opposite conclusions. The crux of the discussion, stripped of academical reasoning, was simple. Everything turned, obviously, on the nature, amount, and origin of Irish expenditure. Sir David Barbour had passed lightly over these vital points, recommending only that any future saving of expenditure in Ireland ought to be used for Irish purposes a further admission of Ireland's separate political existence and shutting his eyes to future increases of expenditure. Lord Farrer and his colleagues, while agreeing that it was impossible to alter the taxation of Ireland so long as the Union lasted, agreed that additional local expenditure in Ireland could not be regarded as a set-off to undue taxation, not only because such a doctrine was inherently fallacious on economic grounds, and would hardly be listened to in the case of any other country than Ireland, but because Irish expenditure was subjected to no proper means of control. Both Irish revenue and Irish services, the former being only theoretically, the latter actually, distinct and separate, were outside the control of Irishmen, who had therefore no motive for