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at last. Sound finance demands that revenue and expenditure should be co-related. Ireland's economic circumstances are widely different from those of Great Britain, but she has been included, without any regard to her needs and without any reference to Irish expenditure, in a system of taxation designed exclusively for the capacities and needs of Great Britain. Hence Irish revenue is both excessive and inadequate.

Excessive ”'? “ Inadequate ”'? What do these terms really mean? Let us once and for all clear our minds of all obscurity and look the facts in the face. No one knows what Irish revenue and expenditure ought to be, or would be, if Irishmen had controlled their own destinies. It is useless to parade immense sums as the cash equivalent of over-taxation ; it is idle to array against them rival figures of over-expenditure. Normal Irish revenue and normal Irish expenditure are matters of speculation. For all we know, Ireland, had she been permitted normal political development, would be raising a larger revenue, and feeling it less ; while it is absolutely certain that she would be paying her own way and contributing to Imperial services more, in proportion to her resources, than she did before the Union. The political and therefore the economic development of Ireland have been deliberately and forcibly arrested. I do not say malignantly, because there was no malignant intention. But the action, if mistaken, was deliberately and consistently sustained. Much of Irish industrial talent was lost irrevocably before the old industrial restrictions were removed. There remained the land, an immense source of potential wealth, if properly developed under a rational system of agrarian tenure. For the best part of a century after the Union, the agrarian tenure, dating from the first genuine colonization of Ireland, when the land was confiscated wholesale and the peasantry enslaved, was maintained by force of arms. Thirty years ago (if we date from the Land Act of 1881) we began to change this tenure into another equally defective, though far more favourable to the tenant. A little later, but only eight years ago, on a thorough and systematic scale, we began the parallel policy of Land Purchase. Even now, having transferred half the land to peasant ownership, and placed the other half under judicial rents, many of our statesmen are unwilling to give Ireland the control of its own

affairs. On the contrary, step by step with the economic enfranchisement of the farmers, has gone the policy of destroying their personal and political independence, and forcing them to look outside their own country for financial aid, by spending money upon Ireland which Irishmen have no direct responsibility for raising. What a travesty of statesmanship! First, having assisted the farmer to buy his own land, to clap him on the back with “Now, my fine fellow, you are a free man. In the same breath to tell him that he is not fit to have a direct voice in the management of his own country's affairs, and to try and reconcile him to this insult by sapping that very independence of character which the acquirement of a freehold has begun to instil in him.

I described in Chapter IX. how a number of patriotic Irishmen, working both at industrial and agricultural development, have striven to counteract this fatal tendency, and to persuade their countrymen to rely on themselves alone. But I venture to repeat what I said then, that without the bracing discipline of Home Rule, and, above all, of the financial Home Rule, these efforts are doomed to comparative failure.

It is absolutely necessary to produce an equilibrium between revenue and expenditure in Ireland, as in every other country in the world. Whatever the temporary strain upon Ireland, whatever the sacrifices involved, the thing must be done, and done now or never.

Great Britain's interest is something, but it is trivial beside that of Ireland. The situation is growing worse, not better, and Irishmen should unite to insist that the whole system should stop.

II.

IRISH EXPENDITURE.

Let us look a little more closely at Irish expenditure, as disclosed in the Treasury returns.

For purposes of comparison, I set out first the main heads of Civil Expenditure for England, Scotland, and Ireland in the year 1910-11 :*

* Treasury Return, No. 220, 1911.

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Customs and Excise and Inland Revenue 3,157,000 464,000
Post Office Services

15,798,500 1,930,000

298,000 1,404,500

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The totals, if we consider relative populations, appear startling.

Look at the third, or Irish, column, and set aside the two last items, “Customs, Excise, and Inland Revenue," and “Post-Office Services," which represent the cost of collecting Irish Revenue and maintaining the Irish postal, telegraph, and telephone services. We may note in passing, however, that the Post-Office receipts in Ireland in 1910-11, according to the Treasury estimate, were less than the outgoings by £249,000 (receipts, £1,155,500 ; outgoings, £1,404,500).

The Civil Government Charges are the most important heads of expense, and these are divided into two main classes : (a) charged on Consolidated Fund ; (6) Voted.

Class (a) consists of (1) Salaries, Pensions, etc. ; (2) Development and Road Improvement Funds ; (3) Payments to Local Taxation Accounts.

In other parts of Return No. 220 will be found the details of expenditure in these various classes :

(1) The Salaries and Pensions need not detain us long. The principal item is judicial salaries, £102,000, as compared with

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£282,000 for England, which has more than eight times the population of Ireland. Another item, £20,000 for the LordLieutenant, is double the sum allotted to any Colonial Governor, even of the Dominion of Canada, which has nearly twice the population of Ireland. But the extravagance lies, not in the cash amount, but in the fact that the Irish Lord. Lieutenancy is, under present conditions, an anomalous institution. No Irishman would grudge a penny of the sum if the LordLieutenant, like a Colonial Governor, presided over a responsibly governed Ireland.

(2) Road Improvement and Development Funds. This category is blank for the year 1910-11. There will be payments for the current year which will swell the Irish expenditure.

(3) Payments to Local Taxation Accounts, £1,477,500. This raises an intricate subject, into which I cannot enter in great detail. It is well known that the whole system of relieving local taxation out of Imperial taxation needs thorough revision. Meanwhile Ireland, like other parts of Great Britain, has been allotted at various times a multitude of different grants under various Acts, but principally under the Local Government (Ireland) Act, 1898, and the Finance Acts of recent years.

Local Government on the British pattern was, as I have already described, extended to Ireland only in 1898. The money now raised in Ireland by Local Taxation is about £4,800,000, exclusive of the Grants in Aid which we are now considering, and which appear, rightly, on the national balancesheet because they come from the common purse. They are based on different principles, and originated in many different ways. Some are fixed annual sums, determined either by some arbitrary standard or (as in the case of the Licence Duty grants and the Customs and Excise grants*) on the Irish proceeds of certain duties in a year taken as standard. The Estate Duty grants still vary with the total product of duties in the United Kingdom, and are still allocated on the proportion settled by Mr. Goschen in 1888—namely, 9 parts to Ireland, 11 to Scotland, and 80 to England. $ If the proportion were to be revised now, and, on Mr. Goschen's method, made to

* A list is given at p. 10 of Return 220 (1911), and an admirable exposition of the whole subject from the Irish standpoint will be found in Professor Oldham's seventh published lecture on the “Public Finances of Ireland" (1911).

The “ Whisky Money ” was so treated under the Finance Act of 1910.
See p. 238.

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correspond to the respective estimated contributions to Imperial Services, Ireland, instead of getting £418,000, would get nothing at all. The largest item in the list-namely, the Agricultural Grant,” a fixed annual sum of £728,000, dating from the Local Government Act of 1898—was designed partly to reconcile Irish landlords to the passage of that Act. Nearly half of it represented the remission of the landlord's half-share of the poor-rate on agricultural land, as estimated in the standard year 1896-97. The English precedent for this was the Agricultural Rates Act of 1896, which relieved the English owner of agricultural land in a similar way. Irish conditions were so different, however, that it was felt necessary in this case to balance the landlord's boon with an equivalent boon to the tenant ; so that half the tenant's share of the county cess was also remitted. The result was a disproportionately large grant as compared with those received by England and Scotland.* We must remark, as one of the minor intricacies of Irish finance, that all these grants do not actually go in relief of Local Taxation. Some of them are diverted to public Departments, such as the Board of Intermediate Education, the Congested Districts Board, and the Department of Agriculture.

All these grants will cease, as such, after Home Rule, while their amount must be reckoned as part of the cost of Irish Government. The Irish Parliament will have to revise the whole system of relief to Local Taxation and establish it on some simple and rational basis. Meanwhile, it is important to remember that the Irish grants form the major part of the Guarantee Fund set up by the Land Purchase Acts, and, until the last amending Land Act of 1909, were chargeable—the Estate Duties Grant, in the first instance, the Agricultural Grant in the second instance-with the increasingly heavy losses incurred in floating Land Stock below par. In 1908-09 the sums so withdrawn amounted to £90,000. That liability was removed by Mr. Birrell's Act, and they now remain chargeable only with any arrears in the annuities paid by the purchasing tenants. This is a negligible liability, and should properly be placed upon the Irish Government as a whole, which, if it pleased, could recover the money from localities.†

* Between 1896 and 1898 the equivalent grants to Scotland and Ireland were based on the Goschen proportion, 80, 11, 9, the English grant being taken as standard. Scotch grants are now determined by special legislation.

+ See Chapter XIV.

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