THE QUESTION OF THE FINANCIAL RELATIONS BETWEEN GREAT BRITAIN AND IRELAND
The subject briefly considered--Financial position of Ireland before
1782, and under Grattan's Parliament--Her taxation and debt small
before 1798--Ireland financially a distinct country--At the Union,
Pitt wished to 'assimilate her in finance' with Great Britain, but
this impossible, and why--Ireland's contribution after the Union--This
was unjust, but it left her financially a distinct country--Ireland
made nearly bankrupt--The compromise of 1816--The Irish Exchequer
closed, and the Irish and British debts consolidated--The object of
the compromise was rather to relieve Ireland from her burdens than to
assimilate her in finance with Great Britain--She still remained for
many years financially distinct from Great Britain, and is so still to
some extent--The conduct of Peel a striking proof of this--Mr.
Gladstone imposes the income tax on Ireland, and her spirit duties are
largely raised--Injustice of this policy--The Committee of
1863-64--Ireland does not obtain financial justice--The Report of the
Childers Commission made upon a reference by Mr. Gladstone following
Mr. Goschen--The Commission declares that Ireland has been greatly
overtaxed for many years--Evidence on which it has founded this
conclusion--Examination of arguments to the contrary--Another
Commission promised, but the promise not fulfilled--Importance of
settling this question.
The financial relations between Great Britain and Ireland have been a
subject, at intervals of time, no doubt, of strong controversy during a
whole century. I shall not harp on the saying of Johnson to an Irish
friend, 'Avoid a Union with England, she will only rob you;' but, in the
opinion of well-informed Irishmen, the fiscal treatment of Ireland, since
1800-01, strikingly illustrates the significant remark of Burke, 'When any
community is subordinately connected with another, the great danger of the
connection is, the extreme pride and self-complacency of the superior,
which, in all matters of controversy, will probably decide in its own
favour.' There is no reason to impeach the good faith of Pitt and
Castlereagh; but the financial arrangements they made for Ireland, when
the Union became law, were denounced by the most distinguished Irishmen of
the day; these imposed on Ireland an overwhelming burden, and, in fact,
reduced her to the very edge of bankruptcy. A compromise was effected in
1816-17; this has been described as a generous boon to Ireland; but it was
at best a slight relief from injustice; and it weakened securities she had
against fiscal exaction, while it involved her in liabilities which, if
remote, were not the less possible. It is a most significant fact that
Peel, who, as Chief Secretary from 1812 to 1818, was familiar with the
economic state of Ireland, refused, though under the strongest
inducements, to apply to Ireland the fiscal charges extended to her by one
of his brilliant successors; the most sagacious financier of the
nineteenth century played, in this matter, a very different part from the
most impulsive and not the least unscrupulous. In 1853, and from thence in
other years, Mr. Gladstone, in order to carry out a policy distinctly
opposed to many Irish interests, subjected Ireland to a sudden and heavy
load of taxation, exactly at the time when, for the plainest reasons, she
ought to have been exempted from it; from that day to this, Irishmen, who
understand the question, are agreed that this was gross, nay, cruel,
injustice. The whole subject of British and Irish financial relations was
sent by Mr. Gladstone to a Commission in 1893, here following the example
of Mr. Goschen; a careful inquiry was held during many months; the Report
of the Commission was startling and important in the extreme. This
tribunal, mainly composed of eminent English experts, announced, and that
almost with one voice, that Ireland was being enormously overtaxed, and
had been for upwards of forty years; and it plainly intimated that a
remedy for this wrong should be found. No real answer has been made to
this remarkable judgment; the attempts at answers that have been made are
nearly all mere trifling; Lord Salisbury's Government evidently believes
that an answer is not possible; it promised to appoint another Commission
to investigate certain parts of the subject; years have passed, and it has
not performed its promise. Meanwhile, even amidst the hurly-burly of Irish
politics, Irishmen of all parties have united in a demand for redress; and
if the demand is not pressed with extreme vehemence, it is sustained by
all that is best in Irish opinion. It is obviously unwise, and it may
become dangerous, to continue to ignore such a claim; in any event the
financial relations of the Three Kingdoms are not the least important of
'Present Irish Questions;' I shall briefly examine it in this chapter.
It is unnecessary to dwell on the financial relations of Great Britain and
Ireland before 1782 and the Union. England held the position of an
absolutely dominant State before 1782, Ireland that of a conquered and
despised colony; Ireland was under the control of the British Parliament,
and was governed by English officials supreme at the Castle. Ireland was
excluded from the foreign and colonial trade of Great Britain; her
agriculture and manufactures were half destroyed by the selfish jealousy
and greed of her imperious neighbour. She contributed, on the other hand,
nothing to the treasury of the ruling power; she had little or no part in
British wars, or in building up the edifice of the Empire, except through
her soldiers in the British army; she was free from British debt and from
British taxation. In these circumstances, grievous as was the incubus of
Protestant ascendency upon the land, it is remarkable what material
progress she made; her Parliament, though little more than a local vestry,
unquestionably promoted her material welfare; she was very lightly taxed,
and was free from debt for many years. She was still so completely
distinct from Great Britain, that it was not until 1769 that her
Parliament agreed that 15,000 men, of whom 12,000 were to remain in
Ireland, should be enrolled for the defence of the State; before that
time, she was only obliged to maintain a small British force within her
borders. After a partial relaxation of the restraints on her commerce
caused by the stress of the American War, and by the famous volunteer
movement, Ireland obtained legislative independence in 1782; she ceased to
be subject to the British Parliament, and to fill the position of a
degraded colony; she became, in theory at least, an independent State in
many respects. Her Parliament was all but sovereign in name; Ireland was
now united to Great Britain only by the link of the Crown; by an executive
always despatched from Downing Street; and, it must be added, by the
corruption of her Houses of Lords and Commons. She was thus more than ever
a distinct country; in fact, most British statesmen had soon perceived
that the celebrated settlement of 1782 greatly weakened her old connection
with England. She advanced, however, markedly in prosperity for many
years, until the French Revolution arrested this; her debt was little more
than £2,000,000 for a long time, her taxation only about £1,000,000. But
by the close of the eighteenth century these figures had been disastrously
changed; her debt had risen to upwards of £28,000,000, her taxation to
about £2,500,000. This great increase had been partly caused by the costly
expenditure of her transformed Parliament, which had spent considerable
sums on public works, and on economic experiments of different kinds; but
five-sixths of it was probably caused by the enormous charge incurred by
the Rebellion of 1798--one of the most woeful tragedies of Irish
history--and by the suppression of that ill-starred movement.[151]
The Rebellion led at once to the Union; it precipitated what had perhaps
become a necessity of State. The great measure of Pitt was badly designed,
and was, moreover, tainted by a grave breach of faith; it was only what
was called a 'Protestant Union,' that is, it rested upon false and narrow
foundations; it deceived Catholic Ireland, and did her gross wrong; above
all, it did not effect its main object, and incorporate the lesser with
the more powerful country. It left Ireland, hitherto completely distinct,
still, to a very considerable extent, a distinct State; she retained a
separate Government and Administration, separate Courts of Justice, a
separate Exchequer for many years; this shadow of separation, as Foster,
one of her ablest worthies, foretold, would give a demand for separation
substance.[152] The financial arrangements between Great Britain and
Ireland were practically altogether the work of Pitt. A disciple of Adam
Smith, the minister's wish was to 'assimilate the two countries in
finance;' to place both under the same fiscal system, to make taxation in
both uniform. But in 1800, the National Debt of Great Britain was more
than £446,000,000, and her taxation was about £3 a head; the National
Debt of Ireland, we have seen, was some £28,000,000, and her taxation by
the head not more than 10_s._; this immense inequality made 'assimilation
in finance' impossible. Besides, Pitt, as a matter of course, knew that
Great Britain was a very rich country, and Ireland perhaps the poorest in
Europe; he was too great a financier to accept the false and shallow
theory that, as between two communities wholly unequal in wealth, equal
taxes were really equal burdens, and could be just; he had emphatically
remarked in 1785, when his celebrated 'Commercial Propositions' were
opposed by the selfish monopolies of British commerce, 'If one country
exceeded another in wealth, population, and established commerce in a
proportion of two to one, he was nearly convinced that that country would
be able to bear near ten times the burden that the other would be equal
to.'[153] It had become necessary, therefore, at the time of the Union, to
place the financial relations between Great Britain and Ireland on a basis
that had nothing in common with uniformity of taxation, and a common
fiscal system; 'assimilation in finance' was for the present to be
indefinitely postponed.
The financial settlement made at the Union distinctly embodied these
principles, and was carried by Castlereagh through the Irish Parliament,
by what methods history records with shame. Like Pitt, the Chief Secretary
looked forward to a time when Great Britain and Ireland might be under the
same fiscal system; but at this juncture, this consummation was, he
acknowledged, hopeless. Ireland was, financially, to remain a separate
country; she was to have a separate exchequer and separate taxes; her
National Debt was to be kept distinct from that of Great Britain. She was
to furnish only a contribution to the State; and Castlereagh declared,
over and over again, that this contribution was to be only in proportion
to her means, and that in no event was she to be unduly taxed. 'The great
point to be ascertained is the best criterion that can be found of the
relative means of the two countries, in order to fix the relative
proportions of their contributions.... As to the future, it is expected
that the two countries will move forward together, and unite with regard
to their expenses in the measure of their relative abilities.' By a
comparison made between British and Irish imports and exports, and between
the values of certain commodities, Castlereagh came to the conclusion that
the contributions which Great Britain and Ireland ought to be expected to
make for the general support and administration of the State, should be,
respectively, fifteen- and two-seventeenths, that is, Great Britain was to
pay about 88 per cent., and Ireland about 12 per cent. of the sum total.
This proportion was to be made liable to revision at the end of twenty
years; for this provision, Castlereagh remarked, gave 'Ireland the utmost
possible security that she cannot be taxed beyond the measure of her
comparative ability, and that the ratio of her contributions must ever
correspond with her relative wealth and prosperity;' and then followed
arrangements which undoubtedly had the 'assimilation of Great Britain and
Ireland in finance' remotely in view; but subject to limitations that
would preserve for Ireland her fiscal rights, and would secure her from
taxation beyond her means, and unjust. It was proposed that if, at some
future time, the debts of both countries should be discharged, or if their
debts and their contributions were in the same proportion, Great Britain
and Ireland might be 'assimilated in finance,' and placed under the same
fiscal system; but this was to be on two express conditions, that the
circumstances of the two countries should admit of this change, and that,
in any case, should the change be made, Ireland--as was the case of
Scotland when her Union took place-should have the benefit of such
'exemptions and abatements' of taxation as might be deemed proper, and
the circumstances of the situation might allow. The meaning of the
technical words, 'exemptions and abatements,' interpreted of late years in
a pettifogging sense, was fully recognised at the time, and for a long
subsequent period, indeed, has been recognised to this day by most of our
leading statesmen, namely, that Ireland was not to be taxed unfairly or
beyond her resources, as Castlereagh had repeatedly promised.[154]
The Opposition in the Irish Parliament had many able lawyers--the names of
Saurin, of Plunket, of Bushe are still known to fame; it is to be
regretted, perhaps, that these powerful minds did not examine with more
jealousy the conditions under which Great Britain and Ireland might be
'assimilated in finance,' distant as the contingency appeared to be; did
not criticise more sharply words that might be wrested from their accepted
sense; and trusted too much to Castlereagh's phrases. But the attention of
the Opposition was rather directed to the Union in its political than in
its financial aspect; it rather denounced the attempt to destroy the
settlement of 1782 than scrutinised the terms of the fiscal system to be
imposed on Ireland, at least, as these were concerned with the future. The
arrangements, nevertheless, by which Ireland was to make the contribution
of the two-seventeenths were fiercely assailed in both the Houses in
College Green; Foster described the calculations of Pitt and Castlereagh
as utterly false, and declared that the charge to be borne by Ireland was
much too large; Grattan echoed this opinion in characteristic language:
'Though I do not think the means of this country are unequal to any
necessary expense, yet I do think they are inadequate to that contributory
expense which the Union stipulates.... The attempt will exhaust the
country, at the same time that it enslaves her. Colour it as you please,
Ireland will pay more than she is able. Considering these the terms of the
Union so far as they relate to revenue, they amount to a continuation of
the double establishment, an increase of the separate establishment, and a
military government, with a prospect of soon succeeding to the full taxes
of England.'[155] The Opposition, too, in the Irish House of Commons
loudly protested: 'Your Majesty's faithful Commons are satisfied that this
calculation is extremely erroneous; and that on a just and fair inquiry
into the comparative means of each country, the Kingdom ought not, and is
not able to contribute anything like that proportion.'[156] And twenty
Irish peers placed this emphatic protest on record; I have space for a few
sentences only: 'Under such circumstances, it appears to us that if this
Kingdom should take upon herself irrevocably the payment of
two-seventeenths of these expenses, she will not have means to perform her
engagements unless by charging her landed property with 12_s._ or 13_s._
in the pound; it must end in the draining from her her last guinea, in
totally annihilating her trade for want of capital, in rendering the taxes
unproductive, and consequently in finally putting her in a state of
bankruptcy. We think ourselves called upon to protest against a measure so
ruinous to our country, and to place the responsibility of its
consequences upon such persons as have brought it forward and supported
it.'[157]
The Treaty of Union left Ireland, financially, still a separate country,
paying a fixed contribution for the uses of the State. The great war with
France soon broke out again; England was involved with Napoleon in a
life-and-death struggle; her fiscal resources were strained to the utmost;
her expenditure became prodigious for a series of years. In these
circumstances, the debt of Ireland rose from £28,000,000 to upwards of
£112,000,000; and her taxation from about £2,500,000 to about £4,500,000;
while the debt of Great Britain advanced from some £446,000,000 to some
£737,000,000, and her taxation from some £24,000,000 to £54,000,000; the
taxation of Ireland being by the head about £1 in 1816, that of Great
Britain being about £5, the figures sixteen years before being 10_s._ and
£3. The immense increase in the debt of Ireland, much greater in
proportion than that of Great Britain, was certainly due to a large extent
to the fact--and this was frankly admitted by Grattan--that the poorer
country could not keep pace with the richer in the gigantic charges of the
war; the case, it has justly been remarked, may be compared to a case of
this kind: 'If one man, A, who has been living at the rate of £100 per
annum, arranges to keep house with another man, B, who has for some time
been living at the rate of £700 per annum, and to spend £1 for every £7
which B spends, then so long as B continues to live at the same rate as
before, the expenses of A will not be increased. But if B begins to live
at the rate of £2100 a year, A will have to spend £300 a year, and if his
means are not sufficient for this, he must become bankrupt.'[158]
Allowing, nevertheless, for all this, it is not the less certain that the
calculations of Pitt and Castlereagh were utterly falsified by the event,
and that the warnings of Foster, Grattan, and other well-informed
Irishmen, besides the protests made in the Irish Parliament, were verified
to the fullest extent; as has been remarked by a distinguished English
expert, 'The calculations of Mr. Pitt and Lord Castlereagh, the ministers
who promoted the Union, and who declared that Ireland would be able to
pay, and ought to pay, two-seventeenths of the joint expenses of the
United Kingdom, turned out to be mistaken, and the opinions of Mr.
Grattan, Mr. Foster, and other Irish members, who denied that she would be
able to contribute so large a proportion, are proved by the event to have
been well founded.'[159]
This contrast, it is hardly necessary to say, to persons acquainted with
Irish history, is only one of the innumerable proofs of the ignorance of
Ireland too common to British statesmen, and of their too common disregard
of the best Irish opinion. In 1815-16, at the close of the war, Ireland
was financially in a bankrupt condition; she could not pay the interest on
her debt; she could not bear the weight of further taxation; she was
exhausted and sucked dry by fiscal injustice. Her social state, too, had
become very alarming; her population had rapidly increased, and, mainly
depending on the frail potato, was already becoming an incubus on the
land; the collapse of the high war prices had caused a sudden fall in
rents and the wages of labour; there was general distress in several
counties, and Whiteboy and agrarian disorder widely prevailed. The
financial position of Ireland was necessarily taken up by Parliament; a
Committee of the House of Commons was selected to report upon it. By this
time one of the contingencies had taken place for the possible
'assimilation in finance' with Great Britain of the much weaker country;
the contribution of Ireland, compared with her debt, was even in less
proportion than the contribution of Great Britain to her own; she had been
left far behind in the effort to pay her way. In this position of affairs
the Committee made its report, after a long and careful examination of the
case; the House of Commons passed these resolutions in May, 1816: 'That it
is the opinion of this Committee that the values of the respective debts
of Great Britain and Ireland, estimated according to the provisions of the
Acts of Union, have been, at a period subsequent to these Acts, in the
same proportion to each other (within one-hundredth part of the said
value), with the respective contributions of each country respectively,
towards the annual expenditure of the United Kingdom; and that the
respective circumstances of the two countries will henceforth admit of
their contributing indiscriminately by equal taxes imposed upon the same
articles upon each, to the future expenditure of the United Kingdom;
subject only to such particular exemptions and abatements in Ireland and
in Scotland as circumstances may appear from time to time to demand; and
that it is no longer necessary to regulate the contribution of the two
countries according to any specific proportion, or according to the rules
prescribed by the Acts of Union, with respect to such proportions. That it
is the opinion of this Committee, that it is expedient that all expenses
henceforth to be incurred, together with the interest and charges of all
debts hitherto contracted, shall be so defrayed indiscriminately by equal
taxes to be imposed on the same articles in each country; and that from
time to time, as circumstances may require, such taxes should be imposed
and applied accordingly, subject only to such exemptions and abatements in
Ireland and Scotland as circumstances may appear to demand. That it is
the opinion of this Committee that such legislative measures should be
adopted as may be necessary to carry into further effect the purposes of
the said Acts of Union, by consolidating the public revenues of Great
Britain and Ireland into one fund, and applying the same to the general
services of the United Kingdom.'[160]
These resolutions were partly embodied in an Act which received the Royal
assent in June, 1816. By this law the separate exchequer of Ireland was
shut up; there was to be but one exchequer for the Three Kingdoms; all the
revenues of Great Britain and Ireland were thrown into a general fund to
be applied to the requirements of the State; the separate debt of Ireland
was fused into that of Great Britain, the two making a common National
Debt. By these means Ireland was relieved from an intolerable load of
debt; but those who contend that an immense boon was thus conferred on
her, only illustrate the aphorism of Burke referred to before; the matter
was decided by the opinion of the dominant power. Ireland, no doubt, was
set free from an overwhelming burden; but the burden was one improperly
cast on her by the Union; the relief was only a small redress of
injustice.[161] On the other hand, the arrangements of 1816 abolished the
contribution of the two-seventeenths, and made Ireland less a separate
country, financially, than she had been before; the resolutions of the
House of Commons did not all become law, but they at least declared that
she might become 'assimilated in finance' to Great Britain at a convenient
time, and thus diminished her security against undue taxation; and the
amalgamation of her debt with that of Great Britain made her subject, at
least conceivably, to a gigantic charge, for which she was not in any way
liable. The compromise, however, effected at this time, rather
contemplated the relief of Ireland from existing debt than her ultimate
'assimilation in finance to Great Britain,' and the extension to both
countries of the same fiscal system. For many years after 1816 Ireland
remained, financially, completely distinct from Great Britain, and under a
scheme of taxation altogether different. Nor is the reason difficult to
seek; she was declared entitled, by the resolutions before mentioned, to
the 'exemptions and abatements' secured to her by the Treaty of Union; and
the Parliament of that day respected the treaty, interpreting these terms
in their true sense, that Ireland was not to be taxed beyond her means.
Her fiscal wrongs, besides, from 1800 to 1816, were still fresh in the
minds of statesmen; these did not wish to repeat injustice; above all, she
had many representatives of real weight at Westminster--Grattan was a
tower of strength in himself, and he had very able followers; these men
would certainly have fiercely resented attempts to impair the financial
rights of their country.
The fiscal systems of Great Britain and Ireland, still altogether
distinct, continued nearly on this footing for a series of years. Great
Britain was gradually relieved from taxation peculiar to herself,
amounting to very considerable sums; Ireland was not relieved in the same
proportion; but this was hardly a real grievance; the taxation of Great
Britain during the war had been enormously higher than that of Ireland. In
1819-20 the charge on Great Britain, which had been about £5 per head, had
been reduced to £3 13_s._; that on Ireland, which had been about £1 a
head, had been reduced to 15_s._ 5_d._ There seems to have been little to
complain of in these figures. Some steps, however, but tentative only,
were made by degrees in 'assimilating the two countries in finance,'
according to the resolutions of 1816; the duties on tea were made equal
for the Three Kingdoms, and the duties on tobacco, as early as 1819; but
it deserves special notice that this policy was angrily opposed by many
Irishmen in the House of Commons, the most conspicuous of these being Sir
John Newport, a real master of Irish finance, who had been Chancellor of
the Irish Exchequer in 1806-07. Still, notwithstanding innovations like
these, the fiscal systems of Great Britain and Ireland remained
substantially distinct for a long period; this was notably made manifest
as late as 1842. At this time the population of England was in an alarming
state; the Chartist agitation was in full swing; British commerce was half
strangled by heavy duties on foreign imports; the corn laws crippled and
burdened industry. Peel was at the head of his great Ministry; he began to
carry into effect the policy of free trade, inaugurated by Pitt, but
unhappily delayed; in order to accomplish this he had to diminish or get
rid of the charges on foreign imports, and generally to substitute direct
for indirect taxation. He was under a strong temptation to 'assimilate
Great Britain and Ireland in finance;' but he had been a friend and
colleague of Castlereagh; he understood the true import of the Treaty of
Union; above all, he knew Ireland well for an Englishman; he had
practically been her ruler for nearly six years. In these circumstances he
imposed the income tax on Great Britain as an equivalent for many indirect
taxes; but he pointedly abstained from extending the tax to Ireland; he
felt that this would be an act of financial wrong; and though he increased
for a short time the duty on Irish spirits, he took off the increase
within a few months. The only 'assimilation in finance' he effected was to
make the stamp duties in Great Britain and Ireland equal, and this was
rather a legal than an economic reform.
The life of the great minister was prematurely cut short; time brought
with it its changes on its wings. The statesman who had living traditions
of the Union and its finance had passed away; O'Connell had disappeared
from the scene; the representation of Ireland had fallen into a
deplorable state. Meanwhile the free trade policy of Peel had achieved
great results in England and Scotland; free trade had given an immense
impulse to our manufactures and our foreign commerce; the repeal of the
corn laws had wonderfully quickened industry, and had been a magnificent
boon to the mass of the people; the prosperity of Great Britain was
advancing by leaps and bounds. The development of free trade was the
object of nearly all our statesmen; to accomplish this it was essential
still further to lessen or to abolish the duties on foreign imports, and
to let in the raw materials of manufactures free; indirect taxation was
still further to give place to direct. In 1853, and during part of the
subsequent period, our finances were in the hands of a minister whose
impulsive nature was upheld by a most imperious will, and who, whatever
was his policy, seldom stuck at trifles. Apparently without mature
reflection, and, it is to be hoped, with little knowledge of the facts of
the case, Mr. Gladstone, setting the example of Peel at nought, suddenly
subjected Ireland to the income tax, and began to raise the duties on
Irish spirits; by 1860 these duties had been more than trebled; and the
taxation of Ireland had been increased by upwards of two millions
sterling. And what were the circumstances, during a large part of this
period, of the country on which this enormous burden had been laid?
Ireland, no doubt, had begun to revive from the effects of the catastrophe
of 1845-47; but, compared with Great Britain, she was miserably poor; and
the Great Famine had shaken her social structure to its base. Two millions
of her population had fled from their homes into exile; a large part of
the upper and of the middle classes had been involved in ruin; whole
tracts of her lands were derelict wastes; her local taxation was
exceedingly high. The imposition of this load of taxation on a country in
such a condition, unjustifiable in the abstract, and from every point of
view, was, in the existing position of affairs, an act of cruel wrong; no
wonder even one of Mr. Gladstone's colleagues has remarked, measured as is
his language, 'We think that if the House of Commons, in the period 1853
to 1860, when the great enhancement of taxation took place, had fully
considered the circumstances of Ireland, they would not have felt
themselves justified in increasing the taxation of that country by means
of the income tax and the equalisation of the spirit duties.'[162] At this
time, in a word, the future Solon of Home Rule proved himself to be the
merciless Draco of Irish finance.
This great increase of taxation, to a considerable extent, 'assimilated
Ireland to Great Britain in finance;' placed the two countries under
nearly the same fiscal system; made the taxes of each not far from equal.
This assimilation, however, was still by no means complete--indeed, is not
complete to the present day; Ireland has still fiscal privileges under the
Treaty of Union; and this should be carefully borne in mind. Mr.
Gladstone, moreover, when he made this increase, acknowledged that Ireland
remained a distinct country, entitled to immunities of her own; when he
made her liable to the income tax, he cancelled a debt of £4,000,000 which
he professed she owed; and if this was an illusory pretence, for her
liability for this reason was more than doubtful, and the income tax she
has since paid has exceeded £23,000,000, still he distinctly admitted the
principle--indeed, it has always been admitted by statesmen worthy of the
name. The enormous new burdens imposed on Ireland, from 1853 to 1860,
provoked widespread and profound discontent; a Parliamentary inquiry was
conceded; a Committee of the House of Commons went into the subject in
1863-64. But the representation of Ireland, I have said, was feeble; her
complaints were stifled by the arts of the treasury; the arguments of her
members were overborne by specious but utterly false sophistry; the
inquiry came to nothing as regards her interests. The question remained in
abeyance for years; the Irish reforms of Mr. Gladstone, from 1869 to 1873,
the troubles caused by the Land and the National Leagues, and the Home
Rule agitation that followed, turned public attention away from the
subject; but it was not forgotten by well-informed Irishmen; two real
economists, Butt and Judge Longfield, insisted that Ireland had here a
grievance; and this was the opinion of several independent gentlemen,
survivors of the illustrious school of Grattan. At last Mr. Goschen,
perhaps moved by remonstrances from Ireland being urged again, appointed a
Committee of the House of Commons to examine into, and to report upon,
'the equity of the financial relations in regard to the resources and the
population of the Three Kingdoms;' Mr. Gladstone, in 1893, recurred to the
subject, which, rather unaccountably, had been let drop. He directed a
Commission of great authority, composed for the most part of expert
Englishmen, and presided over by the late Mr. Childers, a Chancellor of
the Exchequer of Mr. Gladstone, to inquire thoroughly into the whole
question of the financial relations of Great Britain and Ireland, and
fully to set forth the conclusions they should form. The scope of the
investigation was to include the history of the subject since the Union; a
consideration of the financial resources of Great Britain and Ireland
regarded as distinct countries, and the principles to be kept in mind in
forming a correct judgment; and, finally, the charge of Ireland with
respect to the State, and the contribution which Ireland should make to
it.[163]
This inquiry, set on foot by a British statesman who had made himself
notorious for 'assimilating Great Britain and Ireland in finance,'
proceeded, nevertheless, upon an admission that, financially, the two
countries were still distinct, and that the resources of each--their
'taxable capacity,' in other words, a phrase turned into absurd
ridicule--afforded the true and the only test, as to the equity of Irish
compared to British taxation. The Commissioners were engaged in their
arduous task for months; they explained, with a fulness and clearness
never before so complete, the history of the financial relations between
Great Britain and Ireland. They brought distinctly out the fiscal position
of the two countries before the Union; they set forth at length the
financial arrangements made in 1800-01; they described the compromise
effected in 1816; they dwelt on the fiscal policy of Peel to Ireland, and
placed it in significant contrast with that of Mr. Gladstone; and they
conclusively proved that, from the Union to the present time, Great
Britain and Ireland had been treated financially as separate countries,
despite the 'assimilation' of 1853-60, and that the right of Ireland,
under the Treaty of Union, to the 'exemptions and abatements' secured to
her, these being interpreted as the case requires, still give her
immunities from taxation especially her own, which must be recognised if
she is to obtain justice. Turning, then, to the resources of Great Britain
and Ireland, regarded as apart, as being the true criterion of the
taxation which Ireland ought to bear, the Commissioners reviewed a great
mass of evidence, which, as far as was perhaps possible, made the truth
manifest, and arrived at conclusions which appear to be decisive.
Comparing the death duties of Ireland and of Great Britain, the proportion
is about 1 to 18; comparing the income tax, it is about 1 to 22; taking a
great variety of other tests, receipts of railways, savings banks
deposits, money and postal orders, and letters and telegrams, it varies
from 1 to 24 and 16; and an estimate of the income of the two countries,
an estimate certainly not fair to Ireland, gives a proportion of about 1
to 18. There are many reasons that these figures exaggerate the true
resources of Ireland, but, assuming them to be approximately correct, the
Commission has reported that Great Britain exceeds Ireland in resources by
20 to 1; in other words, that the 'taxable capacity of Ireland, as
contrasted with that of Great Britain, cannot now be more than as 1 to
20.'[164] Applying this inference to the taxation of the two countries,
the conclusions formed by this tribunal can hardly admit of question. The
revenue and taxation of Ireland compared with that of Great Britain from
1889 to 1894 has been £7,300,000 and £7,800,000 against from £85,000,000
to £89,000,000, that is, Ireland contributed from 8 to 9 per cent. of the
sum total. But if the resources of Ireland are only one-twentieth of those
of Great Britain, her taxation ought to be one-twentieth only, that is, it
ought not to be from £7,300,000 to £7,800,000; it ought to be less than
£5,000,000; not 8 or 9 per cent., but less than 5 per cent. It follows
from this that Ireland has been overtaxed at the rate of between two and
three millions a year, and that for a very considerable space of
time.[165]
Enormous against Ireland as is this excess of taxation, it may amount to a
very much larger sum, if the national account be taken on another,
perhaps a sounder, basis. There is the highest authority to show that
taxation ought only to fall, in the instance of any given country, on the
surplus remaining over and above the cost of the necessaries of life; and
as regards the populations of Great Britain and Ireland, this cost may be
assumed to be £12 a head. But if we take the income of Great Britain to be
1400 millions sterling, the cost of the necessaries of life at the above
rate would for Great Britain be a sum of 324 millions; and the surplus
available for taxation would be 1076 millions. On the other hand, if we
turn to Ireland, the poor country, and suppose her income to be 76
millions sterling, the cost of the necessaries of life for Ireland would
be a sum of 46 millions; and the surplus available for taxation would be
30 millions only. On this hypothesis, the resources of Ireland which might
be fairly taxed--her taxable capacity, in a word--would, compared with the
resources of Great Britain, be, not as 1 to 20, but as 1 to 36 only; and
her taxation ought to be less than £3,000,000, not, as before mentioned,
less than £5,000,000. The Childers Commission, no doubt, with the
exception of one of its members, did not give its sanction to this
conclusion; but it was that formed by Sir Robert Giffen, a master of the
subject on all its bearings, and it cannot, in common fairness, be left
out of sight. Sir Robert Giffen's view is expressed in these words; it
will be observed that his figures do not correspond with those just cited;
but the only point to consider is the principle on which he takes his
stand: 'If you deduct a minimum sum, so much per head from each of the
community, as a sort of minimum sum, though you would not wish to take
anything from a man who had no more than that, then the taxable income
would be the whole income in each country above that sum. That was the
sort of general idea. If you apply that to Ireland, and take a minimum sum
of, say, £12 a head, you would get upon the basis of an Irish income of
£76,000,000 a taxable surplus, I think, now of about £22,000,000, and in
Great Britain your taxable surplus would come to over £900,000,000.'[166]
Setting, however, these last considerations aside, the Childers Commission
has conclusively shown that Ireland is very largely overtaxed, and has
been so for a long series of years; and the figures that represent this
great overcharge by no means represent the real difference of the burdens
imposed on the two countries. It does not require the authority of Pitt to
tell us that even equal taxation, equally applied, is felt much more
acutely by a poor community than by one that is rich and prosperous; let
us assume, what is by no means the fact, that this equality exists as
between Great Britain and Ireland, still Ireland suffers much more than
Great Britain. As Mill remarked a long time ago, 'It is not the same thing
to take £2 from a man who has £40 a year, as to take £4 from a man who has
£80, or £40 from a man who has £800; the sacrifice imposed on the taxpayer
is greater upon the man from whom you take £2 out of £40 than it is on the
man from whom you take £40 out of £800, although the proportion is the
same.' A few examples, taken from the case of Great Britain and Ireland,
will make the truth of this proposition perfectly clear. The wages of an
agricultural labourer in Great Britain are, say, £40 a year; the wages of
an agricultural labourer in Ireland are, say, £26; the first pays £3 taxes
on his tea and tobacco; the second pays only £2; but the £2 are obviously
much the heavier charge. Or suppose that a British artisan has £100 a
year, and an Irish artisan no more than £80; is not the first more lightly
taxed than the second, if he contributes £5 to the revenue against £4? And
the same thing happens if we ascend the social scale; the £150 income tax
paid by a British landlord of £3000 a year is not felt by him to be such
a charge as the £50 paid by an Irish landlord of £1000 a year; the same
principle would extend to the profits of trade were there small sums in
Ireland and large sums in Great Britain. Make taxes, therefore, as equal
as possible, and make their incidence completely equal, still, in the case
of a poor compared to a wealthy country, the real burden on the taxpayer
will be very different; it was for this reason that the late Mr. Nassau
Senior, an economist of no ordinary parts, pointedly remarked, as regards
British and Irish taxation, 'England is the most lightly taxed and Ireland
the most heavily taxed country in Europe, although both are nominally
liable to equal taxation: I do not believe that Ireland is a poor country
because she is overtaxed, but I think she is overtaxed because she is
poor.'[167]
Ireland, therefore, on a full review of the argument, has been overtaxed
at least between two and three millions sterling a year for certainly more
than forty years; and this excess, as she is a very poor country, is, in
her case especially severe. The trend of taxation, if the phrase may be
employed, as we follow its course, during a long period, clearly indicates
that she has suffered from grave financial wrong. In 1819-20, we have
seen, the taxation of Great Britain was at the rate of £3 13_s._ a head,
that of Ireland being 15_s._ 5_d._; the proportion was £2 13_s._ 1_d._ and
£1 6_s._ 7_d._ in 1859-60; in 1893 it was £2 4_s._ and £1 8_s._; in other
words, the imposts of the wealthy country were progressively decreased,
while the imposts of the poor country were progressively raised. This
distinction, no doubt, has been partly due to the fact that the population
of Great Britain has been largely augmented, and the population of Ireland
has been enormously reduced in numbers; the charge in Great Britain has
been distributed among ever growing millions, the charge in Ireland has
been concentrated upon ever lessening thousands; but this will not nearly
account for the difference; 'the wealthier country' it has been
caustically said, 'was taxed less and less as it became more wealthy; the
poorer country was burdened more and more as its poverty increased.'[168]
And the overcharge on Ireland is all the more grievous because it owed its
origin to the policy of free trade; and this policy has been a
questionable boon to Ireland, while to Great Britain it has been an
immense benefit. No doubt the cheapening of the price of the necessaries
and of some of the conveniences of life, which has been one of the results
of free trade, has been a great advantage to the Irish labourer, artisan,
and mere cottar peasant; but free trade has been injurious to the real
Irish farmer and the Irish landlord, and to most of the classes connected
with the land; and the land is the main source of the scanty wealth of
Ireland. Free trade, on the other hand, has been a principal cause of the
extraordinary development of the material welfare of England which has
been witnessed during the last fifty years; it has doubled and trebled her
gigantic manufactures and trade, if her agriculture is by no means
flourishing. This striking contrast gives pain to right-minded Irishmen;
they feel, as Grattan predicted would be the case, that their country's
interests have been sacrificed to British commerce; and the following
observations are essentially true and just: 'The change' (from protection
to free trade) 'has not been so advantageous to Ireland, a country in
which there is but little trade or manufacturing industry, as it has been
to England; although, as consumers, the Irish population may have gained
in some cases by the abolition of the duties on foodstuffs, yet, on the
other hand, as producers, chiefly dependent on agriculture, they have lost
in a far greater degree by the cheap prices in the British markets,
produced, in part at least, by the free and untaxed supply of foreign
corn, live stock, dead meat, butter, cheese, eggs, and other articles of
food.... It may even perhaps be said that just as Ireland suffered in the
last century from the protective and exclusive commercial policy of Great
Britain, so she has been at a disadvantage in this century from the
adoption of an almost unqualified free trade policy for the United
Kingdom.'[169]
Many attempts, I have said, have been made to answer the conclusive Report
of the Childers Commission, to carp at its proceedings, to challenge its
statements, to deny that Ireland has been largely overtaxed; but, with
scarcely an exception, they have been grotesque failures. I need hardly
notice an audacious sally, which has been turned to account in the House
of Commons, and has split the ears of the groundlings in different parts
of England. England, the argument runs, has been too kind to Ireland;
Ireland pays no land tax and sundry other duties; in other respects she is
equally taxed with Great Britain; she has not even a semblance of a real
complaint; and--exactly in the manner of Swift's satire--'let her hold her
tongue, or it may be the worse for her.' Ireland, no doubt, 'assimilated
as she has been in finance,' is free from some charges imposed on England;
she has still 'exemptions and abatements' which, to some extent, preserve
her rights under the Treaty of Union, and show that she is still
financially a distinct country, as has been recognised by every leading
British statesman, from the day of Pitt to the day of Mr. Gladstone. But
the English land tax, properly speaking, is not a tax at all; it is a
rent-charge for centuries payable by the land; at all events, the Irish
Crown and quit rents may be set off against it; and, as to the other taxes
referred to, the cost of collection in Ireland would exceed the returns;
it would be a case of _in Thesauro nihil_, as in Plantagenet times.
Another argument, of which the late Mr. Lowe was the author, is more
plausible, and has done better service; but it is not the less shallow
and false sophistry, when brought to the test. Taxation, it is said, falls
on populations only; it is sheer nonsense to say that it falls on
countries; it is not levied from Great Britain and Ireland; it is levied
from the inhabitants within their borders. But the Englishman, the
Scotsman, and the Irishman are equally taxed; the Irishman, indeed, has a
small advantage; equality of taxation is the rule in this matter; and
obviously equality is the same thing as equity. An English landlord in
Kent, a Scotch landlord in Perthshire, an Irish landlord in Kildare, pay
the same income tax on the same rentals; so does a merchant in London, a
merchant in Edinburgh, a merchant in Belfast, on the same profits; and the
same principle extends to all other classes. A farmer in Surrey, a crofter
in Argyleshire, a shopkeeper in Galway, pay exactly the same tax on a
gallon of rum, a gallon of whiskey, a hogshead of beer; the charge is the
same for each commodity in the three households. This Irish grievance,
therefore, is a mere delusion; it is a sickly phantom that vanishes in the
light of the day.
That taxation falls on populations and not on areas of land is a truism
really never disputed; the use of the word 'countries,' in this sense, is
a mere popular phrase. This argument keeps out of sight the fact that
equal taxes, however equally imposed, are much heavier in the case of a
poor than of a rich community; but, waiving this objection, it is a sheer
fallacy. If two populations had exactly the same tastes, used the same
commodities in the same proportions, and were in the possession of the
same resources; equality of taxation, if equally applied, would probably
be essentially just. But if two populations have different tastes, if they
differ in the use of even the same commodities, and if their resources are
very different, and especially if equal taxation be not equally applied,
this apparent equality, far from being equity, may become plain, nay, very
grave iniquity. This may be made intelligible, at a glance, by the
consideration of a few instances easily conceived. Impose an equal tax on
coals in England and Ireland: would the charge fall equally on Englishmen
in a land of coal and on Irishmen in a land of peat mosses? Tax Londoners
and Parisians at the same rate on coffee: would the Londoner, who drinks
comparatively little coffee, be as heavily mulcted as the Parisian, who
drinks a great deal? Or suppose that light taxes were laid on articles
that suit Englishmen, and enter into the consumption of the millions of
England, and that heavy taxes were laid on articles that suit Irishmen,
and are consumed by the Irish millions: would not this system favour
Englishmen, and injure Irishmen, though the taxes on all these articles
were the same in both countries? Examples by the hundred might be brought
forward; these suffice to prove that equality of taxation, as between
communities, differing from each other in the conditions and circumstances
of life, and notably if the incidence of this taxation is not the same,
may be made to effect the grossest injustice. And this financial wrong has
been done, to a very great extent, if we compare the taxation of Great
Britain and Ireland. The consumption of tea and tobacco by the head is
nearly the same in both countries; the taxes on these commodities are the
same; admit that this is equitable in a certain sense, though the impost
is relatively more burdensome on the poor community. The consumption of
spirits by the head, also, is much the same for the Three Kingdoms; the
taxation is precisely the same; this, for the sake of argument, I will
call justice. But the consumption of beer by the head in Great Britain is
about double what it is in Ireland; probably ten Englishmen drink beer
compared to one Irishman; whiskey is the ordinary spirituous drink of
Irishmen. Now, the taxes on beer and on whiskey are the same in Great
Britain and Ireland; but the tax on beer, measured by the alcoholic
standard, is about six times lower than the tax on whiskey;[170] beer,
therefore, compared with whiskey is greatly undertaxed; whiskey compared
with beer is greatly overtaxed; the ordinary drink of Englishmen is
treated differently from the ordinary drink of Irishmen, one being
encouraged, the other discouraged; though the taxes on each commodity may
be everywhere the same, the equality of taxation manifestly results in
wrong. The difference amounts to a very large sum; it is one of the causes
that Ireland is overtaxed.[171]
Equality of taxation may, therefore, be not equity; it may, as I have
said, be sheer iniquity; and this is emphatically the case with respect to
Ireland. This system is productive of gross injustice as regards what may
be deemed the popular Irish drink; but arguments to support it have not
been wanting; they have been complacently gulped down at several public
meetings, it is unnecessary to add within the borders of England. The
'mere Irish,' it is said, have shocking bad tastes; let them take beer
instead of whiskey and they can have no grievance; besides, whiskey is a
nasty and unwholesome thing; it is in mercy to them that it is excessively
taxed. Is it possible that people who utter this stuff do not see that
sumptuary legislation of extreme harshness, nay, persecution of the worst
kind, may be justified on the same class of premises? Suppose that
Napoleon, in the plenitude of his power, had declared that the Parisians
did not know what was good for them, and had heavily taxed their coffee to
make them drink tea, even Austerlitz would not have saved the Empire.
Marie Antoinette actually made an attempt to banish from her Court the
velvets and silks of Lyons, and to make it adopt the cambrics and muslins
of Belgium; she would have been too glad to see the first taxed and the
second duty free, for she thought the French taste for heavy and gorgeous
apparel bad; she only aroused the indignation of Versailles. Or say that
the priests of the Jove of the Capitol had argued in this way: 'Really
these detestable Christians are fools for worshipping a crucified Jew;
they have only to bow down to Cæsar to escape the lions; otherwise they
have themselves alone to blame.' Nay, coming nearer home, might not a holy
prelate of the Irish Established Church in the eighteenth century have
reconciled the penal code to his conscience, by whispering to himself that
the deluded Papists had but to give up their vain superstitions, and to
conform to the pure well of faith that had its source in the Castle, and
that then they would be no longer outlaws; but let them take the
consequences if they were blind to their best interests on earth and in
heaven. In fact, any act of despotism on the part of the State might be
vindicated on these very laudable principles; but on this matter of the
taxation of Irish whiskey I shall confine myself to a single remark.
Reverse the cases of England and Ireland with respect to the imposts on
beer and on whiskey; tax beer very heavily and whiskey very lightly; and
what would Englishmen say of an argument that has been thought good enough
for Irishmen; how long would a Government exist that would try to carry
out such a policy? In truth, this reasoning, if it can be so called, is
the worst kind of sophistry: the frank brutality of the Roman proconsul,
who told the population of a subject province that they must endure their
burdens as they would endure the rain and the tempest, is less censurable,
to my mind at least, than this compound of absurd and offensive insolence.
Another argument, really of no greater value, has had many supporters in
the House of Commons. True it is, it is admitted, that, compared with
Great Britain, Ireland has been hardly treated in finance; but this is
because she is a poor country, and a poor country must suffer from
taxation, fair as it may be, more than a wealthy country. But the same
inequality is seen in England: Dorset and Wiltshire are more heavily
burdened than Yorkshire and Lancashire, yet Dorset and Wiltshire make no
complaints as Ireland does. This argument, however, ignores history, and
sets the Treaty of Union at nought; Dorset and Wiltshire are mere
fractions of England; Ireland has always been financially a distinct
country, entitled to separate financial rights; and this has been
recognised by the ablest British statesmen, notably, of late years, by Mr.
Goschen, and by Mr. Gladstone. This reasoning, in a word, assumes that
Ireland is merely an aggregate of British counties; but this has never
been her true financial position; it is easy to sneer at the phrase
'separate entity' by which she has been called, that is, a land,
financially, apart from Great Britain, but sneers cannot get the better of
facts. These statements of distinguished English experts are
unquestionable in view of the record of history. Lord Farrer has remarked:
'It is abundantly clear that of the two conflicting theories--viz. the one
which regards Great Britain and Ireland as one country for the purpose of
taxation and expenditure, and the other which regards Great Britain and
Ireland as separate partners--the second is the one upon which our
instructions are founded; the one which has the greatest support in
history, and the one upon which all parties in Parliament have recently
acted.'[172] And Mr. Childers completely concurs: 'If apart from the
reference, it is asked why a distinction should be taken between Great
Britain and Ireland any more than between Kent and Yorkshire, the answer
is that Ireland entered into a partnership with Great Britain under a
formal Treaty of Union, which did, to a certain extent, by the recognition
of the claim of Ireland to abatements and exemptions, if circumstances
should require, maintain the position of Ireland as entitled to separate
treatment as a whole, so far as relates to taxation. It must also be
recollected that, as a matter of fact, Ireland has, at all times since the
Union, in various degrees received such separate treatment. Ireland,
therefore, cannot be regarded as merely a group of counties of the United
Kingdom.'[173]
Two other arguments may be ascribed to the ingenuity, if this is the true
word, of the Treasury; but the first rests on a gross misrepresentation of
fact, the other upon a false theory; both, with a slight reservation, may
be dismissed as hopeless. Ireland, it is said, may possibly be
overtaxed--admit this for the sake of argument--but she has had more than
her fair share of loans from the State; a considerable part of these has
been freely remitted; this has not been the case in England and Scotland;
a large counterclaim, therefore, may be made against her. 'Out of a total
sum of about one hundred and nineteen millions and a half advanced in the
United Kingdom, a little over fifty-two millions, or 43.7 per cent., has
been advanced to Ireland, and of this, so large a proportion as one-fifth,
or over ten millions, had to be remitted, or treated as a free grant,
whilst only one fifty-eighth part of the advances made to Great Britain
were so treated.'[174] So far as these loans have been advances for the
real good of Ireland, for example, for the promotion of reproductive
works-these may fairly be taken into account; but millions have been
misapplied and wasted or spent in the unproductive relief of
distress;[175] these sums probably are greater than the excess made out by
the Treasury. As regards the remission of the £10,000,000, the assertion
relied on is simply deceptive. Not less than £4,000,000 of this sum
represent the fund the extinction of which was the consideration of
putting the income tax on Ireland by Mr. Gladstone; and, as the charge of
that tax has been since more than £23,000,000, it savours of impudence to
call this a remission; it was writing off a doubtful debt to justify a new
and portentous burden. The residue of the £10,000,000 is composed of
advances that have been misspent or spent on purposes really not Irish;
these were not remitted in the proper acceptation of the word. 'The
remaining portion of the ten millions of alleged remissions of loans
consists mainly of remissions of the repayment of expenditure by the Board
of Works, where it was shown that such expenditure had been wasteful, and
of advances to the clergy and laity of the Established Church of Ireland,
which advances Parliament, by legislation, deprived them of the ability of
repaying. Altogether it would appear, from Sir Edward Hamilton's evidence,
that in reality only about one million out of the ten corresponded in
their character to the advances made to Great Britain, and that
consequently the proportion of real remissions of loans to Ireland did not
differ very materially from that of the proportion of the remission in
Great Britain.'
The second argument appears to be more plausible; but it is mischievous,
in a high degree, and dangerous; except to a slight extent, it is
completely fallacious. Ireland, it is allowed, contributes from £7,300,000
to £7,800,000 to the exchequer; but of this sum £5,000,000 and upwards are
expended on her; she really hardly pays £2,000,000 to the State; the
£5,000,000 therefore, or nearly all this sum, create a just counterclaim
against her, even admitting she is excessively taxed. This expenditure on
Ireland, it is contended, is for Irish 'local' purposes; it is not
expenditure for 'Imperial' purposes; the account, as between Great Britain
and Ireland, is to be taken as if all this expenditure, or nearly so, were
purely local. But is not the expenditure for keeping up the
Lord-Lieutenant and his Court, is not the expenditure on the government
and administration of Ireland, essentially, and in the main, Imperial, and
not local in a legitimate sense, so long as the United Kingdom exists? Is
it not as Imperial, at least for the most part, as the expenditure on the
British army and navy and on the government and administration of England
and Scotland is Imperial, and not, properly speaking, local? This argument
could be retorted with decisive effect, if urged in the interest of
Ireland against Great Britain. If this kind of expenditure in Ireland is
held to be local, not Imperial, the same rule must apply to England and
Scotland; this expenditure in their case must be local and not Imperial.
Why, then, should Ireland contribute to such charges as public works in
Edinburgh and London, as the maintenance of the great English dockyards
and harbours, as the cost of the army and navy outside Ireland, and of the
government and administration of England and Scotland? Clearly on the
Treasury hypothesis she should not contribute; and if she does, she has an
immense counterclaim, so far as her contributions are applied to these
local objects. But, in truth, this whole argument, when examined, is a
mere sophism. The revenues of the Three Kingdoms are paid into a common
exchequer; they are distributed according to the uses of the State; this
expenditure, as a general rule, must be held to be Imperial, not local,
and cannot give a part of the Three Kingdoms a right to make a claim
against another. The State spends millions on London which it does not
spend on Surrey; it spends millions in Hants which it does not spend in
Berkshire: does this circumstance give Surrey or Berkshire a title to say
we can make a demand on London and Hants? Precisely in the same way, the
expenditure of the State on Ireland, as contra-distinguished from that on
Great Britain, cannot, at least as a general principle, give Great Britain
a right to make a counterclaim on Ireland.
It is unnecessary to point out how this theory has a tendency to create
local and even national ill-will; to set parts of one country against
other parts, and two countries against each other; it distinctly alienates
Ireland from Great Britain; as I have said, it is full of mischief and
peril. In truth, however, it is a mere device to excuse the overcharge of
Irish taxation; it has never entered the minds of statesmen. Nothing can
be more certain than that every great British financier, from the day of
Pitt to the day of Peel, and to the day of Mr. Gladstone, has regarded the
expenditure of the Three Kingdoms, as this is paid into a common
exchequer, as a general fund to be allocated as the State requires; and
has not regarded it as a fund, under local heads, to be laid out in
separate districts, so as to give any one district a counterclaim against
another. I quote from a report of one of the members of the Childers
Commissions: 'A division of the expenditure of the United Kingdom into
"charge for Irish purposes" and "Imperial expenditure," cannot be made
under the system of finance embodied in the constitution established by
the Legislative Union. All expenditure under that system is "expenditure
of the United Kingdom," or, to express it more briefly, "Imperial
expenditure;" and all Imperial expenditure is defrayed from the common
fund of the Imperial Exchequer. If a part of the Imperial expenditure be
described as a charge "for Irish purposes," this classification does not
affect the fact that it is Imperial expenditure, and charged as such upon
the whole Imperial revenue. To regard this expenditure as non-Imperial, to
deduct it from the particular revenue contributed by Ireland to Imperial
expenditure, to treat the fraction of Irish revenue left as if it were the
whole of the Irish contribution to Imperial expenditure, and to regard
Imperial expenditure itself as not including "the charge for Irish
purposes," would be to do what the Constitution does not sanction: it
would be to deal with the revenue and expenditure of the United Kingdom as
if the revenues of Great Britain and Ireland were raised and administered
by separate authorities, each of which, having first, out of its own
revenue, defrayed its separate charges, then applied the balance to
payment of common expenses, which, in that case, would be properly
classified as Imperial.'[176] And the evidence of Sir Robert Giffen is to
the same effect: 'The opinion which I have formed is that, on the whole,
it is not possible to make the distinction between the different objects
of Imperial expenditure which is made in some of these discussions; that,
in fact, all the expenditure by an Imperial Government is to be considered
expenditure for Imperial purposes, and although part of it may be spent
locally, you cannot in any way call it expenditure for the special benefit
of that locality. It is expenditure for the general objects of the
Imperial Government.'[177]
The theory of the Treasury is thus essentially false; but accidentally, it
contains, I think, a residuum of truth. When, as between two countries,
one pays a considerable sum, exclusively or mainly from local rates, and
the same charge in the other country is for the most part defrayed from
Imperial taxation by the State, it appears to me that a portion of the sum
so paid by the State may give one country a counterclaim against the other
to some extent. This is the case as between Great Britain and Ireland; the
cost of national education and of the police force is largely discharged
in Great Britain by local rates; in Ireland it amounts to about
£2,700,000, and is mainly defrayed from Imperial taxes; this may create a
counterclaim against Ireland within reasonable limits at least. No doubt
the charge of bringing up the young of the poorer classes and of
maintaining public order by a suitable force, ought largely to be an
Imperial charge; but when in one community it is chiefly borne by local
funds, and in another it is chiefly borne by the common Exchequer of both,
this seems to give the first community a partial claim against the second.
This counterclaim, such as it is, has been reckoned, in addition to a sum
for free grants, at about £500,000 a year by the Childers Commission; but
it did not thoroughly go into the subject; this estimate is believed to be
too low by well-informed persons; the counterclaim has been calculated to
be about £1,000,000 sterling. Lord Salisbury's Government, we have seen,
promised to appoint a second Commission to examine this question at
length, besides some other financial questions suggested by the Report of
the Childers Commission; for some unknown reason it has not redeemed its
pledge; it is very desirable that it should redeem it. Apart from the
mischief of a delay approaching a breach of public faith, the only
inference that can be drawn, if this promise is broken, is that the
Government accepts the view in this matter of the Childers Commission.
The Childers Commission has conclusively proved that Ireland is much too
highly taxed; whatever counterclaim may be made against this excess, the
overcharge can be little less than two millions a year. The arguments
urged against this conclusion are mere leather and prunella that may be
brushed aside; the Report of the Commission has had the sanction of nearly
all economists of a high order. By all means let another Commission strike
a balance after making every fair allowance; but if it shall be struck, as
it must be in Ireland's favour, the only real question for impartial men
will be how it shall be best discharged. Ireland has practically
acquiesced for years in fiscal injustice; in any view of the case she has
no right to call for a change in our whole system of finance for her
special benefit. Still less has she a right to demand that her customs and
excise duties should be placed at a lower level than those of Great
Britain; this would raise a mischievous barrier between the two countries;
this policy would be, perhaps, impossible; if possible, it would probably
injure Ireland greatly in the long run. The only remaining alternative is
to leave our existing fiscal system intact, but to make an annual grant
from the exchequer for Irish uses, as compensation for excessive taxation;
this has the support of the Childers Commission. 'The third method, and
that which most strongly recommends itself to our judgment, is to give
compensation to Ireland by making an annual allocation of revenue in their
favour, to be employed in promoting the material prosperity and social
welfare of the country.'[178] It is difficult to suppose, should a large
yearly sum be found to be due to Ireland, as affairs now stand, that
Parliament will refuse to pay honourably a just debt; it would be a
shameful act to repudiate an obligation of the kind. Years ago Pitt
declared in his characteristic style that 'Ireland might safely rely on
Great Britain for the discharge of any fair claim on her; the liberality,
the justice, the honour of the people of Great Britain have never been
found deficient.' The time has come to test the value of this pledge; it
has been announced by the highest authority, in which English opinion
largely prevails, that Ireland has been immensely overtaxed for years:
will the 'people of Great Britain' give effect to this judgment, and make
good a claim which hardly admits of a doubt? The demand of Ireland, no
doubt, is not sustained by violent agitation and the shouts of multitudes;
but it is backed by all that is best in Irish opinion; it rests upon the
simplest financial justice. It is dangerous to treat a demand such as this
with contempt, and still more so with weak sophistry; not that Ireland can
make an effective resistance to fiscal wrong, however clearly proved; and
I for one deprecate rhodomontade about 'the Boston tea-ships.' But a claim
may have great moral force, though it be not supported by physical power;
the disregard of this claim would provoke well-informed Irishmen, and
weaken the Union perhaps greatly; and, after all, is it a seemly sight, is
it becoming in the eyes of the world, that the richest country in Europe
should practically impose an iniquitous burden upon the poorest?