"On Home Rule for Ireland, I repeat and emphasise the opinion of my former telegrams, especially regarding apprehension of religious intolerance."

The late Lord Spencer:

"I have had some experience of Ireland, and yet I do not know any specific instance where there has been the exercise of religious intolerance on the part of the Roman Catholics against their Protestant countrymen."

The Marquis of Crewe:

"In 1886 and 1893 the animosity between cla.s.ses, largely agrarian in its origin, was far stronger than at present, and the line of cleavage roughly followed that of religious difference. But even in those days, as I well remember, it was evident that the possibilities of intolerance in a self-governed Ireland were deliberately and grossly exaggerated, with a party motive. Now, when the various cla.s.ses know each other better, and there is less occasion for friction, the attempt to excite religious discord will utterly fail, as I firmly believe."

The safeguards provided by the measure deal specifically with the subjects as to which fears of religious inequality exist: establishment and endowment, education and marriage; as compared with them, the provisions in the Canadian and Australian Acts are very imperfect. They guard, in explicit terms, against the dangers to religious liberty and equality in a way in which probably no other Const.i.tution does.

A necessary supplement to any Legislature with limited jurisdiction is a Court of Appeal. Under the proposed const.i.tution, the Irish Courts will be free to determine the const.i.tutional character of any measures pa.s.sed by the Irish Parliament; and from their decisions an appeal will lie to the Judicial Committee of the Privy Council, which will decide questions similar to those determined by it with reference to the Canadian and Australian const.i.tutions, and by the Supreme Court of the United States reviewing the const.i.tutional character of State legislation. It may be surmised that the Court will be faithful to the principles which it has laid down in dealing with the powers of the Parliaments of the Dominions.

It has not hesitated to interfere in Canada with ecclesiastical sentences or censure which it believed invalid (see _e.g._, _Brown_ v. _Cure de Montreal_). It will, we may a.s.sume, do likewise in Ireland.

To conclude: He who believes in political freedom will believe also that religious oppression cannot long co-exist with it. Never, so far as I know, has ecclesiastical tyranny been enduring under democratic inst.i.tutions; and I see no reason why the result should be different in the new Ireland which the Land Acts and the Local Government Act have created. Full and free political life is the best, perhaps the only, solvent of intolerance.

V.-Financial Relations(99) BY LORD WELBY

"The Channel forbids Union, the Ocean forbids separation. I demand the continued severance of the Parliament with a view to the continued everlasting unity of the Empire."

Terse words in which a great statesman summed up the relation of Ireland to England. The Home Rule Bill will give the sanction of law to Grattan's aphorism. It bids Ireland manage her own affairs, freeing her in her own house from official bondage to an unsympathetic consort. If the Act of Enfranchis.e.m.e.nt is drawn in a trustful and large spirit, it will, we may feel a.s.sured, end the feud of centuries, and create unity where the Act of Union has created enmity.

The policy of Home Rule is wise in itself, and worthy the statesmanship of a nation always bold in the hour of need, and, as experience of its working is gained, it will commend itself more and more to the commonsense of a practical people, but the immediate success of the first Home Rule Act will depend greatly on the skill and wisdom with which the details of a complicated measure are devised, facing fairly the financial evils consequent on Tory obstinacy, and avoiding, in reasonable degree, offence to popular prejudice and existing interests.

The provisions which will adjust the financial relations between the two nations are not among the least difficult of those details, and Parliament must solve the puzzling problem without delay. It must begin by temporarily giving local government in Ireland a fair start at the cost of the British tax-payer.

Let us, in the first place, clear the ground from some doubtful arguments which, used as premises, will probably lead the unwary to false conclusions. A plea is often put forward that England is a rich country and Ireland a poor country, and it is argued that identical taxation therefore wrongs Ireland. But England is not a rich country, in the broad sense. It is a country in which there is vast acc.u.mulation of wealth, but in which, also, there is a great ma.s.s of poverty-poverty probably exceeding the poverty of Ireland, and, therefore, identical taxation if it wrongs the poor of Ireland, wrongs still more the poor of England. Critics arguing from this false premise contend that the extension of the Income-tax to Ireland was a wrong, that is to say, the wealthy man living in Ireland, where living is relatively cheap, ought not to contribute to the national expenditure on the same principle as the wealthy man living in England, where living is relatively dear; or, to put the argument in another form, it is sound finance to take Income-tax from a man in England, struggling on a few hundreds a year. It is unsound finance to take Income-tax from, say, the profits earned in Ireland by the Guinness firm. Nationalists, misled by the plea of Ireland's poverty, have relied on this argument, and Conservatives also have used it chiefly to discredit Mr. Gladstone, who extended the Income-tax to Ireland; but the argument is false in itself, and cannot be made the basis of sound financial legislation. As a matter of fact, taxes on articles of general consumption, on the necessaries of life, fall heavily on the poor, and the argument of over-taxation applies in great degree to the poor in the great towns of England, and to the poor in Ireland. If, then, the poor of Ireland are to be relieved, the poor of England must be relieved also, and identical taxation would still be the result. The statesman must find a truer gauge by which to measure the relative capacity of the two countries to bear taxation.

Again, during the long discussion on financial relations, much time has been wasted in criticising that provision of the Act of Union, which fixed the respective contributions of Great Britain and Ireland to the common purposes of the Empire at the proportion of fifteen and two. That proportion, in fact, was not exacted, and it may be put aside as theoretical.

A summary of recent financial history in Ireland will enable the reader to understand the circ.u.mstances in which Parliament takes up the problem of Home Rule. Towards the close of the eighteenth century the condition of Ireland was bad. England, selfish to the last degree in her commercial policy, treated Ireland as little better than a conquered country, and ruined her commercially and industrially by restrictions on her trade.

Protestants and Catholics joined in patriotic resistance, and wrung at last freedom of trade in 1779, and an independent Parliament in 1782.

Thenceforward for a time the financial administration of Ireland was regulated in accord with Irish interest. The country prospered financially under the new order. Large sums were spent in promoting agriculture and manufactures, and in grants for public works, and the country's finance was restored to order. During the years of peace, 1782 to 1793, Ireland contributed on the average 584,000 to military-that is to the common expenses of the Empire. The military expenditure of Great Britain in the peace years, 1786 to 1792, averaged 5,142,000. Ireland was then a most important factor in the State, for the population was to that of England in the proportion of nearly one to two.

Pitt desired to establish reciprocity between the two countries and at the same time to obtain from Ireland a contribution on a fixed principle for the Navy, wise proposals worthy of the Minister; but the two Parliaments could not agree. That of England bowed to the pernicious claims of ascendancy and to the supposed interests of the commercial cla.s.ses. Pitt was defeated. The French Revolution and a war lasting nearly twenty-two years followed, and in the midst of the war broke out the Rebellion of 1798. If the charge of the Irish debt at the outbreak of the war and the average civil expenditure of Ireland between 1793 and the Union is deducted from the average income of Ireland, the surplus const.i.tuted Ireland's real contribution to the common expenditure and it averaged about 900,000 a year. The year 1800 marks a great change of policy. Pitt put an end to the independent Parliament of Ireland and pa.s.sed the Act of Union, bad in itself, and worse by the means which made it law. It sought to make the two countries one for all purposes of revenue, and that object was kept steadily in view.

From 1800 to 1817 the United Parliament imposed taxes on both England and Ireland, but the Irish Treasury collected the Irish Revenue, defrayed the local expenditure of Ireland as sanctioned by the United Parliament and remitted the surplus in aid of the war expenditure. The greater part of the burthen fell upon Great Britain, but Ireland's share drained greatly her resources. Her revenue which had produced 1,837,000 in 1793, reached 7,305,000 in 1817, an increase of 300 per cent., while her contributions during the years of war to the common expenditure calculated on the principle adopted in the preceding paragraph amounted to about 3,000,000.

During the same period Great Britain contributed to the war out of revenue about 43,000,000 on the annual average.

In 1817 the Irish Treasury was abolished, the exchequers of the two countries were united, the British and Irish Revenues were paid alike into the one exchequer. The Irish local expenditure was defrayed from that exchequer under the check of the English Treasury, and the United Parliament imposed and repealed Irish taxes. From 1817 for many years Ireland fared badly. Her representatives in Parliament served her ill.

Tories, Whigs, and independent members failed alike in making England understand Irish needs, and the British Parliament neglected Irish interests. The years between 1817 and 1842 mark the first period of Irish financial history dating from the war. It was a period of stagnation. Both countries required time to recover from the calamity incident to war; but the recovery would have been more rapid, even under heavy taxation, had not progress been r.e.t.a.r.ded by the unwise legislation of protection, which fettered enterprise and restricted commerce. This evil, however, injured Great Britain more than Ireland. In 1824 the separate Customs Departments of the two countries were abolished. The trade between Great Britain and Ireland was treated as coasting, and from that time no official record has been kept of goods exported from and imported into both countries.

In 1817 the taxes levied in England were similar to, but not identical with, those levied in Great Britain. Ireland was exempt from many taxes levied here, and in some cases, such as spirits, she paid a lower rate of duty. A period of profound peace enabled the government to remit taxation; but those remissions were chiefly made in deference to British interests, and in making them Irish interests were little considered. The truth of this statement is ill.u.s.trated by the Revenue Returns. The estimated "_true_"(100) Revenue of Great Britain fell from 51,500,000 in 1820 to 46,250,000 in 1840, although population, and with it consumption, had increased. The "_true_" Revenue of Ireland in the same period rose from 5,250,000 to 5,500,000. But it must be added that many of the taxes remitted were taxes _not levied in Ireland_. In respect to them Great Britain had to a certain extent a claim to prior consideration.

The second period of financial history extended from 1842 to 1869, a period of rapid recovery and of great prosperity in Great Britain, but not so in Ireland. Famine fell upon her in 1846, and thinned her population, followed by emigration, which showed how poverty pressed upon the poor, while the Fenian movement of 1866 showed how widespread was the spirit of unrest. A highly cultivated Liberal statesman was Lord-Lieutenant during several years of the period. An interesting diary which he kept leaves the impression that the leading statesmen of the day were not reading the signs of the times, or gauging the gravity of a growing movement. This was hardly the period to choose for increasing the taxation of Ireland, nevertheless in 1853 Mr. Gladstone extended the Income-tax to Ireland, counterbalancing it in part by the remission of loans granted to Ireland during the famine-a very insufficient compensation. But the Income-tax did not touch the poor, and as I have pointed out there was no reason why the wealthy and comparatively well-to-do cla.s.ses in Ireland should not contribute to the public expenditure like their brethren in Great Britain.

This plea, however, does not extend to the spirit duties which during 1853 Mr. Gladstone and Mr. Disraeli raised to the level of the spirit duties in Great Britain. That tax undoubtedly was paid in great measure by the poorer cla.s.ses.

In one direction there was improvement. In 1842 Sir Robert Peel acceded to power, and inaugurated at once the policy of liberating trade which has conferred such benefits on Great Britain, and in a minor degree on Ireland. The era of prosperity which followed the adoption of the Free Trade policy increased greatly the consuming power of the people, and enabled Mr. Gladstone to largely reduce duties on the princ.i.p.al articles of food consumed by the poorer cla.s.ses. For example, he and his successors reduced the tea duties from 2s. 2d. to 6d. and abolished the sugar duties.

This was undoubtedly the true method of remedying the evil which underlies the plea that identical taxation wronged Ireland. I have shown that that evil was caused not by identical taxation, but by heavy taxes on food, which oppressed alike the poor of Ireland, and the more numerous poor of Great Britain. The policy adopted met the local grievance, by modifying if not removing the general grievance, and this remedy of the general grievance was only rendered possible by the growing prosperity of Great Britain. The poor of Ireland had therefore their full share of the benefit caused by the prosperity of Great Britain. The historian must give full weight to this consideration when he criticises the increase of the Irish spirit duty. There can be little doubt as to the verdict of history, if the choice lies between cheap whisky and dear food on the one side, and cheap food and dear whisky on the other. Between 1860 and 1900 the Customs and Excise duties which were reduced exceeded the like duties increased by some 22,000,000 a year, and Ireland had her share in the reduction.

In 1864 a Committee of the House of Commons inquired into the taxation of Ireland, but it led to no useful result. In other directions the monotony of neglect continued. The Government and Parliament paid little or no attention to Irish needs. Ireland was the Cinderella of the three kingdoms, and fared accordingly.

The third period ranged from 1869 to 1896. It might be termed the Home Rule period, for it includes the two Home Rule Bills of Mr. Gladstone, but it includes also other great measures relating to Ireland. Indeed, during the whole period of seventeen years Ireland engrossed, to a great degree, the attention of Parliament. The change was very remarkable. Up to 1869 England was indifferent to, or bored by, Ireland. She was stupid. She did not trouble herself to learn Irish wants, and she could not understand the spirit of Irish nationality. The Devon Commission, a Conservative Commission, appointed by a Conservative Minister, Sir Robert Peel, reported that 2,500,000 people in Ireland were on the verge of starvation, and gave warning of the evils, the perils, inherent in the Irish land system. England took no notice of either warning. The famine answered the first in cruel fashion. The second was pigeon-holed. Wise in her own Home administration, wise of late years in her Colonial administration, she knew no remedy for Ireland but force, and force is no remedy. She accepted, almost as matters of ordinary administration, Coercion Acts which marked with a black stigma most years of the century, unable to see that that fact alone was a disgrace to her statesmen, her Parliament, and her people.

Early in the Home Rule days I heard a great English statesman say: "The first duty of a Government is to bring the people into agreement with the law; till it does that it fails in its first duty, and England has. .h.i.therto failed to bring Ireland into agreement with the law"-a truth well and forcibly expressed.

In 1869 a man of great power and eloquence, wide views, and firm resolve became Prime Minister. He realised the habitual injustice of England to Ireland, and he saw the perils impending. By his strength of will he forced an unwilling country and an indifferent Parliament to devote its serious attention to Irish questions. He disestablished the Church. He was defeated on Irish education, but he laid the foundation of a land settlement by conferring on the tenants, in spite of strenuous opposition from the Tories, the rights of fair rents, fixity of tenure, and free sale, and his measures were marked by an earnest desire to deal liberally with Ireland to the utmost extent consistent with equity to the British tax-payer. Finally, when Ireland sent to Westminster more than four-fifths of her representatives pledged to Home Rule, he accepted this expression of the national will, and became a convert to the principle of Home Rule.

I deal later in detail with his two Home Rule Bills of 1886 and 1893, which were defeated, and I need only here deal with finance of the third period, apart from the provision of the Home Rule Bills.

Before Mr. Gladstone was converted to Home Rule, Home Rule finance attracted little attention. That eminent statistician, Sir Robert Giffen, made, indeed, in 1885, a singular suggestion to the _Statist_ newspaper, viz., that the Irish landlords should be bought out at the cost of the Imperial Exchequer, and that the rent charge, which would then be payable by the purchasing tenant, should be given to an Irish authority, in lieu of payments from the Exchequer, for the internal administration of Ireland.

Again, Sir Robert wrote an article in the _Nineteenth Century Review_, March, 1886, a few weeks before the introduction of the first Home Rule Bill, to show how unimportant, from a financial point of view, Ireland had become to us, and to suggest the expediency of devising some form of Government under which the special needs and circ.u.mstances of that country would receive more and better attention than they did under the existing arrangements. His figures might be, in some instances, doubtful, perhaps even incorrect, but it can hardly be denied that he made good his point.

Sir Robert was, we see, greatly in advance, not only of the ordinary Briton, but of financial experts generally, both as regards the land question and also that of the Government of Ireland.

Perhaps the most able thinker and writer on economic questions in the second half of the nineteenth century was the late Mr. Bagehot, and, in proof of the general indifference to Irish questions in England, it is notable that his collected works, ranging over a wide field in politics and literature, contain no paper on the government or condition of Ireland. Yet he had witnessed O'Connell, the famine, the depopulation of Ireland, the Committee on Irish Taxation, and the Fenian outbreak in 1866.

In 1890 Mr. Goschen, as Chancellor of the Exchequer, in the Conservative Government, moved for a Committee of the House of Commons to consider the financial relations of England, Scotland, and Ireland. The Committee was instructed to inquire into the equity of their financial relations in regard to the resources and population of the three kingdoms. It had hitherto been much discussed whether Ireland could be regarded as a separate financial ent.i.ty from the rest of the kingdom. The Irish Taxation Committee of 1864, of which Sir Stafford Northcote and Mr. Lowe were prominent members, had refused to admit the principle of such separate ent.i.ty, and that had been generally the Conservative contention. But, in the reference to the Committee of 1890, the Conservative Government accepted the principle. The Home Rule Bills of 1886 and 1893 were, of course, based upon it. Thus, 1890 marks an important advance in the discussion, and thenceforward, by consent of both parties, the separate "ent.i.ty" was established.

After the rejection of the second Home Rule Bill the Liberal Government appointed a Royal Commission to inquire into the financial relations of the two countries and their relative taxable capacity. The Report of this Commission deserves attention, because it was exhaustive in its inquiries, because the information it laid before the public has since that time been generally used in discussion, and because many of the recommendations made were far-reaching and suggestive. There was, as might be expected, great difference of opinion. The Conservative members and the Nationalist members made their several Reports. Attention, however, may be directed to one of the Reports, because it received the concurrence of the Nationalist members and of three English members-one of whom was a very high, if not the highest, financial authority in the City of London, the two others retired Civil Servants who had been at the head of two great Departments of the State. Their conclusions were as follows:

"(1) That Great Britain and Ireland must, for the purpose of this inquiry, be considered as separate ent.i.ties.

"(2) That the Act of Union imposed upon Ireland a burthen which, as events showed, she was unable to bear.

"(3) That the increase of taxation laid upon Ireland between 1853 and 1860 was not justified by the then existing circ.u.mstances.

"(4) That ident.i.ty of rates of taxation does not necessarily involve equality of burthen.

"(5) That whilst the actual tax revenue of Ireland is about one-eleventh of that of Great Britain, the relative taxable capacity of Ireland is very much smaller, and is not estimated by any of us as exceeding one-twentieth."

The three English members above mentioned presented a separate Report, recording at length their views on the questions referred to the Commission. I call attention to it, because reference is frequently made to it in the Report of Sir Henry Primrose's Committee, recently appointed to advise the Government upon the new Home Rule Bill.

They pointed out that the whole taxation of Ireland increased from 2,900,000 in 1820, to over 6,600,000 in 1893, and that by far the larger part of this increase was derived from taxes on articles of consumption which fell most heavily on the poor; that the increase resulted only temporarily in an increase in the contribution to common expenditure which rose from 3,691,000 in 1820 to 5,396,000 in 1860, to fall to 1,966,000 in 1893, for the greater part of the increase had been absorbed in increase of Irish civil expenditure. This local expenditure amounted in Ireland to 19s. 7d. per head, while in Great Britain it only amounted to 11s. 9d. If the cost of administering Ireland had been reduced to the like cost in Great Britain, a saving of nearly 2,000,000 would have been realised.

They thought that the expenditure in Ireland was conducted on a scale totally unsuitable to that country, that the industrial taxation, borne in Ireland mainly by the consumers of dutiable articles, was heavier than the ma.s.ses of the Irish people ought to bear, that Irish taxation ought not to exceed one twentieth part of taxation of the United Kingdom, but they doubted whether Great Britain would consent to alter her whole system of taxation to meet the evil to Ireland. They objected totally to seeking a remedy in increased grants and doles, and they suggested that Ireland should levy her own taxes and provide for her own expenditure.

Lastly, in answer to the objection that Ireland might impose new Customs duties, they held that to be unlikely, since Ireland rather than Great Britain would suffer by such a policy, because the market of Great Britain is of greater importance to Ireland than that of Ireland to Great Britain.