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diff --git a/18419.txt b/18419.txt new file mode 100644 index 0000000..6364ebc --- /dev/null +++ b/18419.txt @@ -0,0 +1,8652 @@ +The Project Gutenberg EBook of Liberalism and the Social Problem, by +Winston Spencer Churchill + +This eBook is for the use of anyone anywhere at no cost and with +almost no restrictions whatsoever. You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: Liberalism and the Social Problem + +Author: Winston Spencer Churchill + +Release Date: May 18, 2006 [EBook #18419] +Last Updated: February 10, 2011 + +Language: English + +Character set encoding: ASCII + +*** START OF THIS PROJECT GUTENBERG EBOOK LIBERALISM AND THE SOCIAL PROBLEM *** + + + + +Produced by Jeannie Howse, Thierry Alberto and the Online +Distributed Proofreading Team at http://www.pgdp.net + + + + + + + + * * * * * + + +--------------------------------------------------------------+ + | Transcriber's Note: | + | | + | Please note that hyphenation is treated inconsistently | + | in the original document. | + | | + | A number of obvious typographical errors have been corrected | + | in this text. For a complete list, please see the bottom of | + | this document. | + | | + | The reader should note that the spelling 'Doomsday-book' | + | on page 333 duplicates the source image. | + | | + +--------------------------------------------------------------+ + + * * * * * + + + + +LIBERALISM AND THE +SOCIAL PROBLEM + +BY + +THE RIGHT HONOURABLE +WINSTON SPENCER CHURCHILL +M.P. + + +SECOND EDITION + + +HODDER AND STOUGHTON +LONDON MCMIX + + + + +PREFACE + + +These are the principal speeches I have made within the last four +years. They have been chosen and collected with the idea of presenting +a consistent and simultaneous view of the general field of British +politics in an hour of fateful decision. I have exercised full freedom +in compression and in verbal correction necessary to make them easier +to read. Facts and figures have been, where necessary, revised, +ephemeral matter eliminated, and epithets here and there reconsidered. +But opinions and arguments are unaltered; they are hereby confirmed, +and I press them earnestly and insistently upon the public. + +We approach what is not merely a party crisis but a national +climacteric. Never did a great people enter upon a period of trial +and choice with more sincere and disinterested desire to know the +truth and to do justice in their generation. I believe they will +succeed. + + WINSTON S. CHURCHILL. + + 33 ECCLESTON SQUARE. + _October 26, 1909._ + + + + +CONTENTS + + + PAGE + +PREFACE vii + +INTRODUCTION xiii + + +I + +THE RECORD OF THE GOVERNMENT + +THE CONCILIATION OF SOUTH AFRICA 3 + +THE TRANSVAAL CONSTITUTION 16 + +THE ORANGE FREE STATE CONSTITUTION 45 + +LIBERALISM AND SOCIALISM 67 + +IMPERIAL PREFERENCE--I. 85 + +IMPERIAL PREFERENCE--II. 106 + +THE HOUSE OF LORDS 124 + +THE DUNDEE ELECTION 147 + + +II + +SOCIAL ORGANISATION + + +THE MINES [EIGHT HOURS] BILL 173 + +UNEMPLOYMENT 189 + +THE SOCIAL FIELD 211 + +THE APPROACHING CONFLICT 225 + +THE ANTI-SWEATING BILL 239 + +LABOUR EXCHANGES AND UNEMPLOYMENT INSURANCE 253 + + +III + +THE BUDGET + + +THE BUDGET RESOLUTIONS 277 + +THE BUDGET AND NATIONAL INSURANCE 297 + +LAND AND INCOME TAXES IN THE BUDGET 318 + +THE BUDGET AND THE LORDS 344 + +THE SPIRIT OF THE BUDGET 357 + +THE BUDGET AND PROPERTY 384 + +THE CONSTITUTIONAL MENACE 405 + + + + +INTRODUCTION + + +The series of speeches included in this volume ranges, in point of +time, from the earlier months of Sir Henry Campbell-Bannerman's +Government to the latest phase in the fortunes of Mr. Asquith's +succeeding Ministry, and forms an argumentative defence of the basis +of policy common to both Administrations. The addresses it contains +deal with nearly all the great political topics of the last four +years--with Free Trade, Colonial Preferences, the South African +settlement, the latest and probably the final charter of trade +unionism, the Miners' Bill, the measures for establishing Trade Boards +and Labour Exchanges, the schemes of compulsory and voluntary +assurance, and the Budget. They possess the further characteristic of +describing and commending these proposals as "interdependent" parts of +a large and fruitful plan of Liberal statesmanship. Of this scheme the +Budget is at once the foundation and the most powerful and attractive +feature. If it prospers, the social policy for which it provides +prospers too. If it fails, the policy falls to the ground. + +The material of these speeches is therefore of great importance to the +future of democracy in this country. Let me say a word as to their +authorship. To a friendly critic they appear to present not only rare +and highly trained qualities of statement and persuasion, but a unity +and sincerity of thought which give them a place above mere party +dialectics. Mr. Churchill's distinguished service to Liberalism has +not been long in point of years, but it opened with the first speeches +he ever delivered in the House of Commons. No competent observers of +political activities, and of the characters and temperaments which +direct them, can have doubted from the first moment of Mr. Churchill's +appearance on the stage where his moral and intellectual sympathies +lay and whither they would lead him. It is a true and, indeed, an +obvious comment on his career to say that he began where his father +left off--as a Democrat and a Free Trader, and that on these inherited +instincts and tendencies he has built what both his friends and his +enemies expected him to build. Mr. Churchill came to Liberalism from +the same fold as Gladstone, and for the same reason--that it presented +the one field of work open to a political talent of a high stamp, and +to a wide and eager outlook on the future of our social order. +Liberalism and Mr. Churchill have both had good reason to congratulate +themselves on that choice, and the party which failed to draw him into +a disastrous and reactionary change of view has no reason to resent +it. Before he became a Liberal Mr. Churchill had taken the broad views +of the South African problem that his father's later opinions +commended to him, and he was properly chosen to expound to the House +of Commons the plan of self-government that embodied them. + +If, therefore, the political groundwork of these speeches is sound +Liberal principle, their meaning and purpose, taken in connection with +the Budget, and the industrial reforms for which it provides, signify +a notable advance into places where the thinkers, the pioneers, the +men in the advanced trenches, are accustomed to dwell. Let us +acknowledge, with a sense of pleasure and relief, that this is new +territory. New, that is to say, for this country; not new to the best +organisations of industrial society that we know of. New as a clearly +seen vision and a connected plan of British, statesmanship; not new as +actual experiment in legislation, and as theory held by progressive +thinkers of many schools, including some of the fathers of modern +Liberal doctrine, and most of our economists. What is there in these +pages repugnant to writers of the type of John Mill, Jevons, and +Marshall? How much of them would even be repelled by Cobden? In the +main they preach a gospel--that of national "efficiency"--common to +all reformers, and accepted by Bismarck, the modern archetype of +"Empire-makers," as necessary to the consolidation of the great German +nation. An average Australian or Canadian statesman would read them +through with almost complete approval of every passage, save only +their defence of Free Trade. Nay more; the apology for property which +they put forward--that it must be "associated in the minds of the mass +of the people with ideas of justice and reason"--is that on which the +friends of true conservatism build when they think of the evils of +modern civilisation and the great and continuous efforts necessary to +repair them. Who does not conclude, with Mr. Churchill, that "a more +scientific, a more elaborate, a more comprehensive social +organisation" is indispensable to our country if it is to continue its +march to greatness? Back or forward we must go. + +Mr. Churchill, indeed, has thought it wise to raise the specific point +at which, in the process of seeking a finer use and adaptation of the +human material which forms society, the progressive and reforming +statesman parts company with the dogmatic Socialist. There is no need +to labour a distinction which arises from the nature and the +activities of the two forces. British Liberalism is both a mental +habit and a method of politics. Through both these characteristics it +is bound to criticise a State so long as in any degree it rests on the +principles of "Penguin Island"--"respect for the rich and contempt for +the poor," and to modify or repeal the rights of property where they +clearly conflict with human rights. But its idealism and its practical +responsibilities forbid it to accept the elimination of private +enterprise and the assumption by the State of all the instruments of +production and distribution. Socialism has great power of emotional +and even religious appeal, of which it would be wise for Liberalism +to take account, and it is, on the whole, a beneficent force in +society. But as pure dogma it fits the spirit of man no more exactly +than the Shorter Catechism. As Mr. Churchill well says, both the +collectivist and the individualist principles have deep roots in human +life, and the statesman can ignore neither. + +In the main, therefore, these speeches, with all their fresh +brilliancy of colouring and treatment, hold up the good old banner of +social progress, which we erect against reactionist and revolutionist +alike. The "old Liberal" will find the case for Free Trade, for peace, +for representative government, stated as powerfully and convincingly +as he could wish. Their actual newness consists in the fact that not +only do they open up to Liberalism what it always wants--a wide domain +of congenial thought and energy, but they offer it two propositions +which it can reject only at its peril. The first is that there can and +must be a deep, sharp abridgment of the sphere of industrial life +which has been marked out as hopeless, or as an inevitable part of the +social system. + +Here the new Liberalism parts with _laissez-faire_, and those who +defend it. It assumes that the State must take in hand the problems +of industrial insecurity and unemployment, and must solve them. The +issue is vital. Protection has already made its bid. It will assure +the workman what is in his mind more than cheap food--namely, secure +wages; it affects to give him all his life, or nearly all his life, a +market for his labour so wide and so steady that the fear of forced +idleness will almost be banished from it. The promise is false. +Protection by itself has in no country annulled or seriously qualified +unemployment. But the need to which it appeals is absolutely real; for +the modern State it is a problem of the Sphinx, neither to be shirked +nor wrongly answered. And the alternative remedy offered in these +pages has already, as their author abundantly shows, succeeded even in +the very partial forms in which it has been applied. The labour market +can be steadied and equalised over a great industrial field. Part of +its surplus can be provided for. What Mr. Churchill calls "diseased +industries" can be cut off from the main body, or restored to some +measure of health. The State can set up a minimum standard of health +and wage, below which it will not allow its citizens to sink; it can +step in and dispense employment and restorative force under strictly +specified conditions, to a small body of more or less "sick" workers; +it can supply security for a far greater, less dependent, and more +efficient mass of labourers, in recurring crises of accident, +sickness, invalidity, and unemployment, and can do so with every hope +of enlisting in its service voluntary forces and individual virtues of +great value. + +This is not a problem of "relief," it is a method of humanity, and its +aim is not merely to increase the mechanical force of the State, but +to raise the average of character, of _morale_, in its citizens. Nor +do these speeches represent only a batch of platform promises. The +great scheme of social betterment preached in these pages is already +embodied in half a dozen Acts of Parliament, with corresponding +organisations in the Board of Trade and elsewhere; and if the Budget +passes, the crown can be put upon them next year or the year after by +measures of insurance against invalidity and unemployment. + +Mr. Churchill's second proposition is the correlative of the first. +How shall this imposing fabric of industrial security be reared and +made safe? The answer is, by modifying, without vitally changing, the +basis of taxation. The workman cannot be asked to pay for everything, +as under Protection he must pay. In any case, he must pay for +something. But if he is asked for too much, the sources of physical +efficiency are drained, and the main purpose of the new +Liberalism--the ideal of an educated, hopeful, and vigorous people--is +destroyed. Now Liberalism, in ceasing to rely on indirect taxation as +its main source of revenue, has opened up for contribution not merely +the superfluities of society, the "accumulations of profit," as Mr. +Churchill calls them, but those special forms of wealth which are +"social" in origin, which depend on some monopoly of material agents, +on means not of helping the community but of hindering it, not of +enriching its powers and resources, but of depleting them for private +advantage. In other words, the State in future will increasingly ask +the taxpayer not only "What have you got?" but "How did you get it?" +No one contends that such an analysis can be perfect; but, on the +other hand, can a community desirous of realising what Goethe calls +"practical Christianity," ignore it? And if in this process it enters +the sphere of morals, as Ruskin long ago urged it to do, as well as +the path of economic justice, is the step a wrong one? Has it not +already been taken not only in this Budget, but in its predecessor, in +which the Prime Minister made the memorable distinction between earned +and unearned income? Those who answer these questions in the Liberal +sense will find in these speeches a body of vigorous and persuasive +reasoning on their side. + +It is therefore the main purpose of these speeches to show that +Liberalism has a message of the utmost consequence to our times. They +link it afresh with the movement of life, which when it overtakes +parties condemns and destroys them. They give it an immediate mission +and an outlook on the wider moral domain, which belongs to no single +generation. This double character is vital to a Party which must not +desert the larger ways in which the spirit of man walks, while it +quits at its peril the work of practical, everyday service to existing +society. + +A word as to the literary quality of these addresses, widely varied as +they are in subject. The summit of a man's powers--his full capacity +of reason, comparison, expression--are not usually reached at so +early a point in his career as that which Mr. Churchill has attained. +But in directness and clearness of thought, in the power to build up a +political theory, and present it as an impressive and convincing +argument, in the force of rhetoric and the power of sympathy, readers +of these addresses will find few examples of modern English +speech-making to compare with them. They revive the almost forgotten +art of oratory, and they connect it with ideas born of our age, and +springing from its conscience and its practical needs, and, above all, +essential to its happiness. + + H.W. MASSINGHAM. + + + + +I + +THE RECORD OF THE GOVERNMENT + + + PAGE + +THE CONCILIATION OF SOUTH AFRICA (April 5, 1906) 3 + +THE TRANSVAAL CONSTITUTION (July 31, 1906) 16 + +THE ORANGE FREE STATE CONSTITUTION (December 17, 1906) 45 + +LIBERALISM AND SOCIALISM (October 11, 1906) 67 + +IMPERIAL PREFERENCE--I. (May 7, 1907) 85 + +IMPERIAL PREFERENCE--II. (July 16, 1907) 106 + +THE HOUSE OF LORDS (June 29, 1907) 124 + +THE DUNDEE ELECTION (May 14, 1908) 147 + + + + +THE CONCILIATION OF SOUTH AFRICA + +HOUSE OF COMMONS, _April 5, 1906_ + + +We have travelled a long way since this Parliament assembled, in the +discussion of the Transvaal and Orange River Colony Constitutions. +When the change of Government took place Mr. Lyttelton's Constitution +was before us. That instrument provided for representative and not +responsible government. Under that Constitution the election would +have been held in March of this year, and the Assembly would have met +in June, if the home Government had not changed. But just at the time +that the Government changed in December two questions arose--the +question of whether or not soldiers of the British Army in garrison +should be allowed to vote; and the question whether it would not be +better to have sixty constituencies instead of thirty; and, as both +questions involved necessary alterations in the Letters Patent, the +time was ripe, quite apart from any difference which the change of the +men at the helm might make, for a reconsideration and review of the +whole form of the government which was to be given to the two +Colonies. + +The objection that must most readily occur in considering Mr. +Lyttelton's Constitution is that it was unworkable. It proposed that +there should be from six to nine nominated Ministers in an Assembly of +thirty-five, afterwards to be increased to sixty elective members. The +position of a Minister is one of considerable difficulty. He often has +to defend rather an awkward case. When favourable facts are wanting he +has to depend upon the nimbleness of his wits, and, when these fail +him, he has to fall back upon the loyalty of his supporters. But no +Minister can move very far upon his road with satisfaction or success +if he has not behind him either a nominated majority or an organised +Party majority. Mr. Lyttelton's Ministers had neither. They would have +been alone, hopelessly outnumbered in an Assembly, the greater part of +which was avowedly in favour of responsible and not of representative +government. These Ministers, with one exception, had no previous +Parliamentary experience and no ascertained Parliamentary ability. +They would have been forced to carry their Bills and their Estimates +through an Assembly in the main opposed to them. All this time, while +we should have given to these Ministers this serious duty, we should +ourselves have had to bear the whole responsibility in this country +for everything that was done under their authority; and their +authority could only be exerted through an Assembly which, as things +stood, they could not control. + +The Committee can easily imagine the telegrams and the questions which +would have been addressed from Downing Street and the House of Commons +to these Ministers on native matters, on the question of the +administration of the Chinese Ordinance, on all the numerous intricate +questions with which we are at the present moment involved in South +Africa. And what would have been the position of these Ministers, +faced with these embarrassments in a hostile Assembly in which they +had few friends--what possibility would they have had of maintaining +themselves in such an Assembly? Is it not certain that they would have +broken down under the strain to which they would have been exposed, +that the Assembly would have been infuriated, that Parties differing +from each other on every conceivable question, divided from each other +by race and religion and language, would have united in common hatred +of the interference of the outside Power and the government of +bureaucrats. Then we should very speedily have got to the bottom of +the hill. There would have been a swift transition. The Legislative +Assembly would have converted itself into a constituent Assembly, and +it would have taken by force all that the Government now have it in +their power to concede with grace, distinction, and authority. On +these grounds his Majesty's Government came to the conclusion that it +would be right to omit the stage of representative government +altogether and to go directly to the stage of responsible government. + +It is the same in politics as it is in war. When one crest line has +been left, it is necessary to go to the next. To halt half-way in the +valley between is to court swift and certain destruction, and the +moment you have abandoned the safe position of a Crown Colony +government, or government with an adequate nominated majority, there +is no stopping-place whatever on which you may rest the sole of your +foot, until you come to a responsible Legislative Assembly with an +executive obeying that Assembly. These arguments convinced his +Majesty's Government that it would be necessary to annul the Letters +Patent issued on March 31, 1905, and make an end of the Lyttelton +Constitution. That Constitution now passes away into the never-never +land, into a sort of chilly limbo that is reserved for the disowned or +abortive political progeny of many distinguished men. + +The Government, and those who support them, may rejoice that we have +been able to take this first most important step in our South African +policy with such a very general measure of agreement, with, indeed, a +consensus of opinion which almost amounts to unanimity. Both races, +every Party, every class, every section in South Africa have agreed in +the course which his Majesty's Government have adopted in abandoning +representative government and going at once to responsible government. +That is already a very great thing, but it was not always so. Those +who sat in the last Parliament will remember that it was not always +so. We remember that Lord Milner was entirely opposed to granting +responsible government. We know that Mr. Lyttelton wrote pages and +pages in the Blue Book of last year proving how futile and dangerous +responsible government would be; and the right hon. Member for West +Birmingham, who took the Government decision as a matter of course on +the first day of the present session, made a speech last session in +which he indicated in terms of great gravity and force, that he +thought it was wholly premature to grant responsible government to the +Transvaal. But all that is abandoned now. I heard the right hon. +Member for West Birmingham, in the name of the Party opposite, accept +the policy of his Majesty's Government. I heard the hon. Member for +Blackpool this afternoon say that he hoped that responsible government +would be given to the Transvaal at the earliest possible moment. In +regard to the Orange River Colony, it is quite true that the official +Opposition, so far as I gather their view, think that it should be +delayed, and should not be given at the same time as to the Transvaal; +but that is not the view of the right hon. Member for West Birmingham. +Speaking in the House of Commons on July 27, 1905, the right hon. +gentleman said: + +"Objection has also been taken that the same government which is now +being given to the Transvaal has not been given to the Orange River +Colony. I think that the experiment might have been far better tried +in the Orange River Colony. It is quite true that in that Colony there +is an enormous majority of the Dutch or Boer population. But they have +shown by long experience that they are most capable and moderate +administrators--under the admirable rule of President Brand they set +an example to the whole of South Africa; and although I think there is +some danger in this experiment, it is in the Orange River Colony that +I myself would have been inclined, in the first instance, to take the +risk." + +It is true the right hon. gentleman was speaking of representative +government; but it cannot be disputed that if an advance were to be +made in associating the people of the conquered Colonies with the +government of those Colonies, the right hon. gentleman thought that it +had better be in the Orange River Colony first. But at any rate now it +is incontestable that there is no Party in this country or in the +Transvaal that opposes the grant of responsible government to the +Transvaal. That is a great advance, and shows that we have been able +to take our first step with the approbation of all concerned. + +But the Opposition, having abandoned their resistance to the grant of +responsible government, now contend that on no account must the basis +of the Lyttelton Constitution be departed from. I am not convinced by +that argument. The Government are to pursue a new purpose, but to +adhere to the old framework. We are to cut off the head of the +Lyttelton Constitution, but are to preserve the old trunk and graft a +new head on it. I do not believe that any Government, approaching this +question from a new point of view, uncompromised and unfettered, would +be bound by the framework and details of the Lyttelton Constitution. +It may be that that Constitution contains many excellent principles, +but the Government have a right to consider things from the beginning, +freshly and freely, to make their own plans in accordance with their +own ideas, and to present those plans for the acceptance of the House. + +The noble lord the Member for South Birmingham spoke of the principle +of "one vote, one value," which was embodied in the Lyttelton +Constitution. The principle of "one vote, one value" is in itself an +orthodox and unimpeachable principle of democracy. It is a logical, +numerical principle. If the attempt be made to discriminate between +man and man because one has more children and lives in the country, it +would be arguable that we should discriminate because another man has +more brains or more money, or lives in the town, or for any other of +the many reasons that differentiate one human being from another. The +only safe principle, I think, is that for electoral purposes all men +are equal, and that voting power, as far as possible, should be evenly +distributed among them. + +In the Transvaal the principle of "one vote, one value" can be made +operative only upon a basis of voters. In nearly every other country +in the world, population is the usual basis of distribution, for +population is the same as electorate and electorate the same as +population. On both bases the distribution of the constituencies would +be the same. There is, for instance, no part of this country which is +more married, or more celibate, or more prolific than any other part. +It is only in the Transvaal, this country of afflicting dualities and +of curious contradictions, where everything is twisted, disturbed, and +abnormal, that there is a great disparity between the distribution of +seats on the basis of voters and on the basis of population. The high +price of provisions in the towns restricts the growth of urban +population, and the dullness of the country districts appears to be +favourable to the growth of large families. It is a scientific and +unimpeachable fact that, if you desire to apply the principle of "one +vote, one value" to the Constitution of the Transvaal, that principle +can best be attained--I am not sure that it cannot only be +attained--on the basis of voters, and that is the basis Mr. Lyttelton +took in the Constitution he formed. + +But Mr. Lyttelton's plan did not stop there. Side by side with this +basis of voters, he had an artificial franchise of L100 annual value. +That is a very much lower qualification in South Africa, than it would +be in this country, and I do not think that the franchise which Mr. +Lyttelton proposed could be called an undemocratic franchise, albeit +that it was an artificial franchise, because it yielded 89,000 voters +out of a population of 300,000, and that is a much more fertile +franchise, even after making allowance for the abnormal conditions of +a new country, than we have in this country or than is the case in +some American and European States. So that I do not accuse Mr. +Lyttelton of having formulated an undemocratic franchise, but taking +these two points together--the unusual basis of distribution with the +apparently artificial franchise--acting and reacting, as they must +have done, one upon the other--there was sufficient ground to favour +the suspicion, at any rate, that something was intended in the nature +of a dodge, in the nature of a trick, artificially to depress the +balance in one direction and to tilt it in the other. + +In dealing with nationalities, nothing is more fatal than a dodge. +Wrongs will be forgiven, sufferings and losses will be forgiven or +forgotten, battles will be remembered only as they recall the martial +virtues of the combatants; but anything like chicane, anything like a +trick, will always rankle. The Government are concerned in South +Africa not only to do what is fair, but to do what South Africa will +accept as fair. They are concerned not merely to choose a balance +which will deal evenly between the races, but one which will secure +the acceptance of both races. + + * * * * * + +We meet unjust charges in good heart. The permanence and security of +British sovereignty in South Africa is not a matter of indifference to +his Majesty's Ministers. Surely no honourable Member believes that we +could wish to cheat the British race in the Transvaal of any numerical +preponderance which may properly belong to them. Equally with our +political opponents we desire to see the maintenance of British +supremacy in South Africa. But we seek to secure it by a different +method. There is a profound difference between the schools of thought +which exist upon South African politics in this House. We think that +British authority in South Africa has got to stand on two legs. You +have laboured for ten years to make it stand on one. We on this side +know that if British dominion is to endure in South Africa it must +endure with the assent of the Dutch, as well as of the British. We +think that the position of the Crown in South Africa, and let me add +the position of Agents and Ministers of the Crown in South Africa, +should be just as much above and remote from racial feuds, as the +position of the Crown in this country is above our Party politics. We +do not seek to pit one race against the other in the hope of profiting +from the quarrel. We hope to build upon the reconciliation and not +upon the rivalry of races. We hope that it may be our fortune so to +dispose of affairs that these two valiant, strong races may dwell +together side by side in peace and amity under the shelter of an equal +flag. + + + + +THE TRANSVAAL CONSTITUTION + +HOUSE OF COMMONS, _July 31, 1906_ + + +It is my duty this afternoon, on behalf of the Government, to lay +before the Committee the outline and character of the constitutional +settlement which we have in contemplation in regard to the lately +annexed Colonies in South Africa. This is, I suppose, upon the whole, +the most considerable business with which this new Parliament has had +to deal. But although no one will deny its importance, or undervalue +the keen emotions and anxieties which it excites on both sides of the +House, and the solemn memories which it revives, yet I am persuaded +that there is no reason why we should be hotly, sharply, or bitterly +divided on the subject; on the contrary, I think its very importance +makes it incumbent on all who participate in the discussion--and I +will certainly be bound by my own precept--to cultivate and observe a +studious avoidance of anything likely to excite the ordinary +recriminations and rejoinders of Party politics and partisanship. + +After all, there is no real difference of principle between the two +great historic Parties on this question. The late Government have +repeatedly declared that it was their intention at the earliest +possible moment--laying great stress upon that phrase--to extend +representative and responsible institutions to the new Colonies; and +before his Majesty's present advisers took office the only question in +dispute was, When? On the debate on the Address, the right hon. Member +for West Birmingham--whose absence to-day and its cause I am quite +sure are equally regretted in all parts of the House--spoke on this +question with his customary breadth of view and courage of thought. He +said: "The responsibility for this decision lies with the Government +now in power. They have more knowledge than we have; and if they +consider it safe to give this large grant, and if they turn out to be +right, no one will be better pleased than we. I do not think that, +although important, this change should be described as a change in +colonial policy, but as continuity of colonial policy." + +If, then, we are agreed upon the principle, I do not think that +serious or vital differences can arise upon the method. Because, after +all, no one can contend that it is right to extend responsible +government, but not right to extend it fairly. No one can contend that +it is right to grant the forms of free institutions, and yet to +preserve by some device the means of control. And so I should hope +that we may proceed in this debate without any acute divergences +becoming revealed. + +I am in a position to-day only to announce the decision to which the +Government have come with respect to the Transvaal. The case of the +Transvaal is urgent. It is the nerve-centre of South Africa. It is the +arena in which all questions of South African politics--social, moral, +racial, and economic--are fought out; and this new country, so lately +reclaimed from the wilderness, with a white population of less than +300,000 souls, already reproduces in perfect miniature all those dark, +tangled, and conflicting problems usually to be found in populous and +old-established European States. The case of the Transvaal differs +fundamentally from the case of the Orange River Colony. The latter +has been in the past, and will be again in the future, a tranquil +agricultural State, pursuing under a wise and tolerant Government a +happy destiny of its own. All I have to say about the Orange River +Colony this afternoon is this--that there will be no unnecessary delay +in the granting of a Constitution; and that in the granting of that +Constitution we shall be animated only by a desire to secure a fair +representation of all classes of inhabitants in the country, and to +give effective expression to the will of the majority. + +When we came into office, we found a Constitution already prepared for +the Transvaal by the right hon. Member for St. George's, Hanover +Square.[1] That Constitution is no more. I hope the right hon. +gentleman will not suspect me of any malevolence towards his +offspring. I would have nourished and fostered it with a tender care; +but life was already extinct. It had ceased to breathe even before it +was born; but I trust the right hon. gentleman will console himself by +remembering that there are many possibilities of constitutional +settlements lying before him in the future. After all, the Abbe +Sieyes, when the Constitution of 1791 was broken into pieces, was very +little younger than the right hon. gentleman, and he had time to make +and survive two new Constitutions. + +Frankly, what I may, for brevity's sake, call the Lyttelton +Constitution was utterly unworkable. It surrendered the machinery of +power; it preserved the whole burden of responsibility and +administration. Nine official gentlemen, nearly all without +Parliamentary experience, and I daresay without Parliamentary +aptitudes, without the support of that nominated majority which I am +quite convinced that the right hon. Member for West Birmingham had +always contemplated in any scheme of representative government, and +without the support of an organised party, were to be placed in a +Chamber of thirty-five elected members who possessed the power of the +purse. The Boers would either have abstained altogether from +participating in that Constitution, or they would have gone in only +for the purpose of wrecking it. The British party was split into two +sections, and one section, the Responsibles, made public declarations +of their intention to bring about a constitutional deadlock by +obstruction and refusing supplies, and all the other apparatus of +Parliamentary discontent. In fact, the Constitution of the right hon. +gentleman seemed bound inevitably to conjure up that nightmare of all +modern politicians, government resting on consent, and consent not +forthcoming. + +As I told the House in May, his Majesty's Government thought it their +duty to review the whole question. We thought it our duty and our +right to start fair, free, and untrammelled, and we have treated the +Lyttelton Constitution as if it had never been. One guiding principle +has animated his Majesty's Government in their policy--to make no +difference in this grant of responsible government between Boer and +Briton in South Africa. We propose to extend to both races the fullest +privileges and rights of British citizenship; and we intend to make no +discrimination in the grant of that great boon, between the men who +have fought most loyally for us and those who have resisted the +British arms with the most desperate courage. By the Treaty of +Vereeniging, in which the peace between the Dutch and British races +was declared for ever, by Article 1 of that treaty the flower of the +Boer nation and its most renowned leaders recognised the lawful +authority of his Majesty King Edward VII, and henceforth, from that +moment, British supremacy in South Africa stood on the sure +foundations of military honour and warlike achievement. + +This decision in favour of even-handed dealing arises from no +ingratitude on our part towards those who have nobly sustained the +British cause in years gone by. It involves no injustice to the +British population of the Transvaal. We have been careful at each +point of this constitutional settlement to secure for the British +every advantage that they may justly claim. But the future of South +Africa, and, I will add, its permanent inclusion in the British +Empire, demand that the King should be equally Sovereign of both +races, and that both races should learn to look upon this country as +their friend. + + * * * * * + +When I last spoke in this House on the question of the South African +Constitution, I took occasion to affirm the excellence of the general +principle, one vote one value. I pointed out that it was a logical and +unimpeachable principle to act upon; that the only safe rule for +doing justice electorally between man and man was to assume--a large +assumption in some cases--that all men are equal and that all +discriminations between them are unhealthy and undemocratic. Now the +principle of one vote one value can be applied and realised in this +country, either upon the basis of population, or upon the basis of +voters. It makes no difference which is selected; for there is no part +of this country which is more married, or more prolific than another, +and exactly the same distribution and exactly the same number of +members would result whether the voters or the population basis were +taken in a Redistribution Bill. But in South Africa the disparity of +conditions between the new population and the old makes a very great +difference between the urban and the rural populations, and it is +undoubtedly true that if it be desired to preserve the principle of +one vote one value, it is the voters' basis and not the population +basis that must be taken in the Transvaal--and that is the basis which +his Majesty's Government have determined to adopt. + +The right hon. gentleman the Member for St. George's, Hanover Square, +had proposed to establish a franchise qualification of L100 annual +value. That is not nearly such a high property-qualification as it would +be in this country. I do not quarrel with the right hon. gentleman's +Constitution on the ground that his franchise was not perfectly fair, or +not a perfectly _bona fide_ and generous measure of representation. But +it is undoubtedly true that a property-qualification of L100 annual +value told more severely against the Boers than against the British, +because living in the towns is so expensive that almost everybody who +lives in the towns, and who is not utterly destitute, has a +property-qualification of L100 annual value. But in the country +districts there are numbers of men, very poor but perfectly respectable +and worthy citizens--day labourers, farmers' sons, and others--who would +not have that qualification, and who consequently would have been +excluded by the property-qualification, low as it is having regard to +the conditions in South Africa. Quite apart from South African questions +and affairs, his Majesty's Government profess a strong preference for +the principle of manhood suffrage as against any property-qualification, +and we have therefore determined that manhood suffrage shall be the +basis on which votes are distributed. + +It is true that in the prolonged negotiations and discussions which +have taken place upon this question manhood suffrage has been demanded +by one party and the voters' basis by the other, and there has been a +tacit, though quite informal agreement that the one principle should +balance the other. But that is not the position of his Majesty's +Government in regard to either of these propositions. We defend both +on their merits. We defend "one vote, one value," and we defend +manhood suffrage, strictly on their merits as just and equitable +principles between man and man throughout the Transvaal. We have +therefore decided that all adult males of twenty-one years of age, who +have resided in the Transvaal for six months, who do not belong to the +British garrison--should be permitted to vote under the secrecy of the +ballot for the election of Members of Parliament. + +Now there is one subject to which I must refer incidentally. The +question of female suffrage has been brought to the notice of various +members of the Government on various occasions and in various ways. +We have very carefully considered that matter, and we have come to the +conclusion that it would not be right for us to subject a young +Colony, unable to speak for itself, to the hazards of an experiment +which we have not had the gallantry to undergo ourselves; and we shall +leave that question to the new Legislature to determine. + +I come now to the question of electoral divisions. There are two +alternatives before us on this branch of the subject--equal electoral +areas or the old magisterial districts. When I say "old," I mean old +in the sense that they are existing magisterial districts. There are +arguments for both of these courses. Equal electoral areas have the +advantage of being symmetrical and are capable of more strict and +mathematical distribution. But the Boers have expressed a very strong +desire to have the old magisterial districts preserved. I think it is +rather a sentimental view on their part, because upon the whole I +think the wastage of Boer votes will, owing to excessive plurality in +certain divisions, be slightly greater in the old magisterial +districts than in equal electoral areas. The Boers have, however, been +very anxious that the old areas of their former Constitution, of +their local life, should be interfered with as little as possible, and +that is a matter of serious concern to his Majesty's Government. +Further, there is a great saving of precious time and expense in +avoiding the extra work of new delimitation which would be necessary +if the country were to be cut up into equal mathematical electoral +areas. + +The decision to adopt the old magisterial areas, which divide the +Transvaal into sixteen electoral divisions, of which the Witwatersrand +is only one, involves another question. How are you to subdivide these +magisterial districts for the purpose of allocating members? Some will +have two, some three, some a number of members; and on what system +will you allocate the members to these divisions? We have considered +the question of proportional representation. It is the only perfect +way in which minorities of every shade and view and interest can +receive effective representation. And Lord Elgin was careful to +instruct the Committee as a special point to inquire into the +possibility of adopting the system of proportional representation. The +Committee examined many witnesses, and went most thoroughly into this +question. They, however, advise us that there is absolutely no support +for such a proposal in the Transvaal, and that its adoption--I will +not say its imposition--would be unpopular and incomprehensible +throughout the country. If a scientific or proportional representation +cannot be adopted, then I say unhesitatingly that the next best way of +protecting minorities is to go straight for single-member seats. Some +of us have experience of double-barrelled seats in this country; there +used to be several three-barrelled seats. But I am convinced that if +either of those two systems had been applied to the electoral +divisions of the Transvaal, it would only have led to the swamping of +one or two local minorities which with single-member divisions would +have returned just that very class of moderate, independent, Dutch or +British Members whom we particularly desire to see represented in the +new Assembly. Therefore, with the desire of not extinguishing these +local minorities, his Majesty's Government have decided that +single-member constituencies, or man against man, shall be the rule in +the Transvaal. But I should add that the subdivision of these +electoral districts into their respective constituencies will not +proceed upon hard mathematical lines, but that they will be grouped +together in accordance with the existing field cornetcies of which +they are composed, as that will involve as little change as possible +in the ideas of the rural population and in the existing boundaries. + +The Committee will realise that this is a question with an elusive +climax. It is like going up a mountain. Each successive peak appears +in turn the summit, and yet there is always another pinnacle beyond. +We have now settled that the Members are to be allotted to +single-member constituencies based on the old magisterial districts +according to the adult male residents there. But how are we to apply +that principle? How are we to find out how many adult males there are +in each of the districts of the country, and so to find the quota of +electors or proper number of Members for each division? The proverbial +three alternatives present themselves. We might take the Lyttelton +voters' list revised and supplemented. We might make a new voters' +list, or we might take the census of 1904. + + * * * * * + +Lord Selborne has pointed out to us that it might take just as long a +time to revise the Lyttelton voters' list as to make a new voters' +list, which would occupy seven months. So that, with the necessary +interval for the arrangements for election, ten months would elapse +before the Transvaal would be able to possess responsible +institutions. I think we shall have the assent of all South African +parties in our desire to avoid that delay. I am sorry that so much +delay has already taken place. It was necessary that the Cabinet +should secure complete information. But to keep a country seething on +the verge of an exciting general election is very prejudicial to +trade. It increases agitation and impedes the healthy process of +development. We are bound to terminate the uncertainty at the earliest +possible moment; and we have therefore determined to adopt the census +of 1904. + +Let me ask the Committee now to examine the sixteen magisterial +districts. I think it is necessary to do so before allocating the +Members amongst them. In all the discussions in South Africa these +have been divided into three areas--the Witwatersrand, Pretoria, and +the "Rest of the Transvaal." Pretoria is the metropolis of the +Transvaal. It has a very independent public opinion of its own; it is +strongly British, and it is rapidly increasing. It is believed that +Pretoria will return three, four, or five Members of the Responsible +Party, which is the moderate British Party, and is independent of and +detached from the Progressive Association. The "Rest of the Transvaal" +consists of the old constituencies who sent Boer Members to the old +Legislature. There will, however, be one or two seats which may be won +by Progressive or Responsible British candidates, but in general "The +rest of the country" will return a compact body of members of Het +Volk. + +Having said that, I now come to the Rand. We must consider the Rand +without any bias or prejudice whatever. The Rand is not a town or +city, but a mining district covering 1,600 square miles, whose +population of adult males practically balances the whole of the rest +of the country. The Rand population is not, as some people imagine, a +foreign population. The great majority of it is British, and a very +large portion of it consists of as good, honest, hard-working men as +are to be found in any constituency in this country. But there are +also on the Rand a considerable proportion of Dutch. Krugersdorp Rural +is Dutch, and has always been excluded from the Rand in the +discussions that have taken place in South Africa, and included in the +"Rest of the Transvaal." But in addition to that there are the towns +of Fordsburgh, which is half Dutch, and two other suburbs which also +have a Dutch population; and it is believed that these will afford +seats for members of the Responsible British Party with the support of +Het Volk. I must say further that the British community upon the Rand +is divided into four main political parties. There is the Transvaal +Progressive Association, a great and powerful association which arises +out of the mining interest. There is the Responsible Government +Association; there is the Transvaal Political Association--a moderate +body standing between the Responsibles and the Progressives--and there +are the labour associations, which are numerous. There are three main +labour associations, or really four--the Independent Labour Party, the +Transvaal Labour League, the Trade and Labour Council of the +Witwatersrand, and the Trade and Labour Council of Pretoria. Why do I +bring these facts before the Committee? I do so because I feel it +necessary to show how impossible it is to try to dismiss the problems +of this complicated community with a gesture or to solve their +difficulties with a phrase, and how unfair it would be to deprive such +a community, in which there are at work all the counter-checks and +rival forces that we see here in our own political life, of its proper +share of representation. + +Applying the adult male list in the census of 1904 to the three areas +I have spoken of, I should allot thirty-two Members to the Rand, six +to Pretoria, and thirty to the rest of the country; or, if you include +Krugersdorp Rural in the Rand, it would read thirty-three to the Rand, +six to Pretoria, and twenty-nine to the rest of the country. Arrived +at that point, the Committee in South Africa had good hopes, not +merely of arriving at a just settlement, but of arriving at an +agreement between all the parties. I am not going to afflict the House +with a chronicle of the negotiations which took place. They were +fruitless. It is enough to say that there were good hopes that if the +Progressive complaint, that the adoption of the census of 1904 did not +allow for the increase in the population which has taken place since +the census was taken, could be met, a general agreement could be +reached. The Boers, whose belief that we were going to treat them +fairly and justly has been a pleasant feature in the whole of these +negotiations, and will, believe me, be an inestimable factor of value +in the future history of South Africa--the Boers with reluctance and +under pressure, but guided by the Committee, with whom they were on +friendly terms, were willing to agree to a distribution which allotted +one more seat to meet this increase of the population in the +Witwatersrand area, and the proposal then became 33, 6, and 30, or, +including Krugersdorp Rural, 34, 6, 29. The Responsible Party agreed +to that. The Progressives hesitated. The great majority of them +certainly wished to come in and come to a general agreement on those +terms. Certain leaders, however, stood out for one or two or three +seats more, and, although Lord Selborne expressed the opinion that the +arrangement proposed, namely, 33, 6, 30, excluding Krugersdorp Rural, +was a perfectly fair one to the British vote in the Transvaal, those +leaders still remained unconvinced and obdurate, and all hopes of a +definite agreement fell through. + +The Committee returned to this country, bringing with them the +recommendation that the Government on their own responsibility should +fix the allocation of seats at that very point where the agreement of +one Party was still preserved and where the agreement of the other was +so very nearly won. And that is what we have decided to do. We have +decided to allocate thirty-four seats, including Krugersdorp Rural, to +the Rand, six to Pretoria, and twenty-nine to the rest of the country. +Lord Selborne wishes it to be known that he concurs in this +arrangement. Now I am quite ready to admit that every Constitution +ought to rest either upon symmetry or upon acceptance. Our Transvaal +Constitution does not rest upon either symmetry or acceptance, but it +is very near symmetry and very near acceptance, and in so far as it +has departed from symmetry it has moved towards acceptance, and is +furthermore sustained throughout by fair dealing, for I am honestly +convinced that the addition of an extra member to the Witwatersrand +areas which has been made is justified by the increase of the +population which has taken place since the census. + +On such a basis as this the Transvaal Assembly will be created. It +will consist of sixty-nine members, who will receive for their +services adequate payment. They will be elected for five years. The +Speaker will vacate his seat after being elected. The reason for that +provision is that the majority in this Parliament, as in the Cape +Parliament, with which the government is carried on, is likely to be +very small, and it would be a great hardship if the Party in power +were to deprive itself of one of the two or three votes which, when +Parties are evenly balanced, are necessary for carrying on the +government. It would be a great disaster if we had in the Transvaal a +succession of weak Ministries going out upon a single vote, one way or +the other. And it is found that when Parties have a very small +majority and are forced to part with one of their Members for the +purpose of filling the chair, they do not always select the Member who +is best suited to that high office, but the Member who can best be +spared. + +Now let me come to the question of language. Under the Constitution of +the right hon. gentleman the Member for St. George's, Hanover Square, +the Members of the Assembly would have been permitted to speak Dutch +if they asked permission and obtained permission from the Speaker. We +are not able to lend ourselves to that condition. We are of opinion +that such a discrimination would be invidious. The recognition of +their language is precious to a small people. I have never been able +to work myself into a passion because there are in parts of South +Africa Dutch people who wish to have Dutch teachers to teach Dutch +children Dutch. I have not so poor an opinion of the English language, +with its priceless literary treasures and its world-wide business +connections, as not to believe that it can safely be exposed to the +open competition of a dialect like the _taal_. We believe that the +only sure way to preserve in the years that are to come such a +language as the _taal_ would be to make it a proscribed language, +which would be spoken by the people with deliberation and with malice, +as a protest against what they regarded, and would rightly regard, as +an act of intolerance. Therefore we have decided to follow the Cape +practice and allow the members of the Transvaal Parliament to address +that Assembly indifferently in Dutch or English. + +I shall be asked what will be the result of the arrangement that we +have made. I decline to speculate or prophesy on that point. It would +be indecent and improper. I cannot even tell in this country at the +next election how large the Liberal majority will be. Still less would +I recommend hon. gentlemen here to forecast the results of contests in +which they will not be candidates. I cannot tell how the British in +the Transvaal will vote. There are a great many new questions, social +and economic, which are beginning to apply a salutary counter-irritant +to old racial sores. The division between the two races, thank God, is +not quite so clear-cut as it used to be. But this I know--that as +there are undoubtedly more British voters in the Transvaal than there +are Dutch, and as these British voters have not at any point in the +Constitutional Settlement been treated unfairly, it will be easily +within their power to obtain a British majority, if they all combine +to obtain it. I nourish the hope that the Government that will be +called into life by these elections will be a coalition Government +with some moderate leader acceptable to both parties, and a Government +which embraces in its Party members of both races. Such a solution +would be a godsend to South Africa. But whatever may be the outcome, +his Majesty's Government are confident that the Ministers who may be +summoned, from whatever Party they may be drawn, to whatever race they +may belong, will in no circumstances fail in their duty to the Crown. + +I should like to say also that this Parliament will be of a high +representative authority, and it will be the duty of whoever may be +called upon to represent Colonial business in this House to stand +between that Parliament and all unjustifiable interference from +whatever quarters of the House it may come. + +I now approach the question of the Second Chamber. That is not a very +attractive subject. We on this side of the House are not particularly +enamoured of Second Chambers, and I do not know that our love for +these institutions will grow sweeter as the years pass by. But we have +to be governed by colonial practice; and there is no colony in the +Empire that has not a Second Chamber. The greater number of these +Second Chambers are nominated; and I think that the quality of +nominated Second Chambers, and their use in practice, have not been +found to be inferior to those of the elective bodies. His Majesty's +Government desire to secure, if they can, some special protection for +native interests which is not likely to be afforded by any electoral +arrangement, I am sorry to say. We are unable however to countenance +the creation in a permanent form of a nominated Second Chamber. But in +view of the position of native affairs, in view of the disadvantage of +complicating the elections, to which all classes in the Transvaal have +been so long looking forward, and most particularly because of the +extra delays that would be involved in the creation of a new elective +body, the Cabinet have resolved for this Parliament only, and as a +purely provisional arrangement, to institute a nominated Legislative +Council of fifteen members. They will be nominated by the Crown, that +is to say at home, and vacancies, if any, by death or resignation, +will be filled by the High Commissioner, on the advice of the +responsible Ministers. During the course of the first Parliament in +the Transvaal arrangements will be completed for the establishment of +an elective Second Chamber, and if necessary further Letters Patent +will be issued to constitute it. + +Under the Treaty of Vereeniging we undertook that no franchise should +be extended to natives before the grant of self-government. I am not +going to plunge into the argument as to what word the "native" means, +in its legal or technical character, because in regard to such a +treaty, upon which we are relying for such grave issues, we must be +bound very largely by the interpretation which the other party places +upon it; and it is undoubted that the Boers would regard it as a +breach of that treaty, if the franchise were in the first instance +extended to any persons who are not white men. We may regret that +decision. We may regret that there is no willingness in the Transvaal +and Orange River Colony to make arrangements which have been found not +altogether harmful in Cape Colony. But we are bound by this treaty. +Meanwhile we make certain reservations. Any legislation which imposes +disabilities on natives which are not imposed on Europeans will be +reserved to the Secretary of State, and the Governor will not give his +assent before receiving the Secretary of State's decision. Legislation +that will effect the alienation of native lands will also be reserved. +It is customary to make some provision in money for native interests, +such as education, by reserving a certain sum for administration by +the High Commissioner or some other political or Imperial official. We +propose to reserve Swaziland to the direct administration of the High +Commissioner, with the limiting provision that no settlement he may +make is to be less advantageous to the natives than the existing +arrangement. + +On November 30, 1906, the arrangement for recruiting Chinese in China +will cease and determine. Our consuls will withdraw the powers they +have delegated to the mining agents, and I earnestly trust that no +British Government will ever renew them. A clause in the Constitution +will provide for the abrogation of the existing Chinese Labour +Ordinance after a reasonable interval. I am not yet in a position to +say what will be a reasonable interval, but time must be given to the +new Assembly to take stock of the position and to consider the labour +question as a whole. I said just now there would be a clause with +regard to differential legislation as between white persons and +others, and to this clause will be added the words: "No law will be +assented to which sanctions any condition of service or residence of a +servile character." We have been invited to use the word "slavery" or +the words "semblance of slavery," but such expressions would be +needlessly wounding, and the words we have chosen are much more +effective, because much more precise and much more restrained, and +they point an accurate forefinger at the very evil we desire to +prevent. + +I have now finished laying before the House the constitutional +settlement, and I should like to say that our proposals are +interdependent. They must be considered as a whole; they must be +accepted or rejected as a whole. I say this in no spirit of disrespect +to the Committee, because evidently it is a matter which the Executive +Government should decide on its own responsibility; and if the policy +which we declare were changed, new men would have to be found to carry +out another plan. We are prepared to make this settlement in the name +of the Liberal Party. That is sufficient authority for us; but there +is a higher authority which we should earnestly desire to obtain. I +make no appeal, but I address myself particularly to the right hon. +gentlemen who sit opposite, who are long versed in public affairs, and +who will not be able all their lives to escape from a heavy South +African responsibility. They are the accepted guides of a Party +which, though in a minority in this House, nevertheless embodies +nearly half the nation. I will ask them seriously whether they will +not pause before they commit themselves to violent or rash +denunciations of this great arrangement. I will ask them, further, +whether they cannot join with us to invest the grant of a free +Constitution to the Transvaal with something of a national sanction. +With all our majority we can only make it the gift of a Party; they +can make it the gift of England. And if that were so, I am quite sure +that all those inestimable blessings which we confidently hope will +flow from this decision, will be gained more surely and much more +speedily; and the first real step will have been taken to withdraw +South African affairs from the arena of British party politics, in +which they have inflicted injury on both political parties and in +which they have suffered grievous injury themselves. I ask that that +may be considered; but in any case we are prepared to go forward +alone, and Letters Patent will be issued in strict conformity with the +settlement I have explained this afternoon if we should continue to +enjoy the support of a Parliamentary majority. + +FOOTNOTES: + +[1] Mr. Lyttelton had meanwhile been elected for that Constituency. + + + + +THE ORANGE FREE STATE CONSTITUTION + +HOUSE OF COMMONS, _December 17, 1906_ + + +Letters Patent have been issued during the last week conferring a +Constitution upon the Transvaal Colony. These instruments have now +been for some days at the disposal of the House, and this afternoon +affords an occasion for their discussion. Other Letters Patent +conferring a Constitution upon the Orange River Colony are in an +advanced state of preparation, and I think it would be generally +convenient if I were to make a statement as to the character and scope +of that Constitution. With that view I have, by the direction of the +Prime Minister, placed upon the Paper a Resolution which I now move, +permitting a general discussion upon the constitutional arrangements +which we are making both in the Transvaal and in the Orange River +Colony. Now, Sir, by the Treaty of Vereeniging, Great Britain +promised full self-government to the peoples of the two Boer Republics +which had been conquered and annexed as the result of the war. This +intention of giving responsible government did not arise out of the +terms of peace, although it is, of course, solemnly expressed in them. +It has always been the settled and successful colonial policy of this +country during the last fifty years to allow great liberties of +self-government to distant communities under the Crown, and no +responsible statesman, and no British Cabinet, so far as I know, ever +contemplated any other solution of the South African problem but that +of full self-government. The idea which I have seen put forward in +some quarters, that, in order to get full satisfaction for the expense +and the exertions to which we were put in the war, we are bound to +continue governing those peoples according to our pleasure and against +their will, and that that is, as it were, an agreeable exercise which +is to be some compensation for our labours, is an idea which no doubt +finds expression in the columns of certain newspapers, but to which I +do not think any serious person ever gave any countenance. No, Sir, +the ultimate object, namely, the bestowal of full self-government, +was not lost sight of even in the height of the war; and as all +parties were agreed that some interval for reconstruction must +necessarily intervene, the only questions at issue between us have +been questions of manner and questions of time. + +How much difference is there between Parties in this House as to time? +It is now more than three years since Lord Milner, speaking in the +Inter-colonial Council, bore emphatic testimony to the faithfulness +with which the Boers--those who had been fighting against us--had +observed their side of the terms of peace. Lord Milner said: + +"It is perfectly true that the Boer population, the men who signed the +terms of peace at Vereeniging, have loyally observed those terms and +have carried them out faithfully. They profess to-day, and I +absolutely believe them, that no idea of an armed rising or unlawful +action is in their minds. I may say I am in constant, perhaps I should +say frequent communication with the men who in the war fought us so +manfully and then made manful terms. We differ on many points, no +doubt, and I do not expect them to rejoice with us in what has +happened, or to feel affection for a man who, like myself, has been +instrumental in bringing about the great change which has come over +the Constitution of the country. But I firmly believe their word when +they come forward and meet us, and, without professing to agree in all +respects with the policy of the Government, declare that they desire +to co-operate in all questions affecting the prosperity of the country +and the maintenance of public order. I accept the assurance they give +in that respect, and I think it is practically impossible to put your +hands on anything done by myself or any member of the Government which +can be regarded as a manifestation of distrust of the men who have +shown themselves, and do show themselves, men of honour. Let me say, +then, I am perfectly satisfied that so great is the influence of their +leaders over the minds of the main section of the Boer population that +so long as those leaders maintain that attitude a general rising is +out of the question." + +Those are the words which Lord Milner used three years ago, and I think +they are words which do justice to the subject and to the speaker. But +more than two years have passed since the representations were made to +the right hon. gentleman the Member for St. George's, Hanover Square, +which induced him to confer a measure of self-government on the +Transvaal. Those representations laid stress on the fact that the +desire for self-government was not put forward only by the Boers, but +that both sections of the community in the Transvaal desired to take +the control of affairs into their own hands. The right hon. gentleman +published a Constitution. That Constitution conferred very great and +wide powers. It conferred upon an overwhelming elected majority the +absolute power of the purse and control over legislation. But it has +always been my submission to the House that that Constitution had about +it no element of permanence, that it could not possibly have been +maintained as an enduring, or even a workable settlement; and I am +bound to say--I do not wish to be controversial this afternoon if I can +avoid it--that, when I read the statement that this representative +government stage would have been a convenient educative stage in the +transition to full self-government, the whole experience of British +colonial policy does not justify such an assumption. The system of +representative government without responsible Ministers, without +responsible powers, has led to endless friction and inconvenience +wherever and whenever it has been employed. It has failed in Canada, it +has failed in Natal and Cape Colony. It has been condemned by almost +every high colonial authority who has studied this question. I do not +think I need quote any more conclusive authority upon that subject than +that of Lord Durham. Lord Durham, in his celebrated Report, says of +this particular system: + +"It is difficult to understand how any English statesmen could have +imagined that representative and irresponsible government could be +successfully combined. There seems, indeed, to be an idea that the +character of representative institutions ought to be thus modified in +Colonies; that it is an incident of colonial dependence that the +officers of government should be nominated by the Crown without any +reference to the wishes of the community whose interests are entrusted +to their keeping. It has never been very clearly explained what are +the Imperial interests which require this complete nullification of +representative government. But if there is such a necessity it is +quite clear that a representative Government in a Colony must be a +mockery and a source of confusion, for those who support this system +have never yet been able to devise or exhibit in the practical working +of colonial government any means for making so complete an abrogation +of political influence palatable to the representative body." + +I contend that the right hon. gentleman's Constitution would have +broken down in its first session, and that we should have then been +forced to concede grudgingly and in a hurry the full measure of +responsible government which, with all due formality, and without any +precipitancy, the Letters Patent issued last week have now conferred. +But even the right hon. gentleman himself did not intend his +Constitution to be a permanent settlement. He intended it to be a +transition, and a brief transition; and in the correspondence which +passed on this subject two or three years is sometimes named as the +period for which such a Constitution might conveniently have +endured--two or three years, of which, let me point out to the House, +nearly two years have already gone. Seeing how little difference there +is between us upon that question, I dispense with further argument as +to the grant of a Transvaal Constitution, as I see the course we have +adopted does commend itself to the good sense of all Parties in this +country and is sustained at almost every point by almost every person +conversant with South African affairs. + +It is said, however, we have heard it often said, "It may be wise to +grant responsible government to the Transvaal, but it is not wise to +give it to the Orange River Colony. Why should you give it to the +Orange River Colony too?" I say, "Why not?" Let us make it quite clear +that the burden of proof always rests with those who deny or restrict +the issue of full Parliamentary liberties. They have to make their case +good from month to month, and from day to day. What are the reasons +which have been advanced against the issue of a Constitution to the +Orange River Colony? Various reasons have been put forward. We have +been told, first, that the Colony is not ripe for self-government. When +you have very small communities of white men in distant and immense +territories, and when those communities are emerging from a wild into a +more settled condition, then it is very necessary and very desirable +that the growth of self-governing institutions should be gradual. But +that is not the situation in the Orange River Colony. The Orange Free +State was the model small republic of the world. The honourable +traditions of the Free State are not challenged by any who take the +trouble to study its history, either in the distant past, or in the +years immediately preceding the South African war. The right hon. +gentleman the Member for West Birmingham himself, speaking in this +House on December 7, 1900, used language which, I think, should go far +to dissipate the idle fears which we hear expressed in various quarters +upon the grant of self-government to the Orange River Colony: + +"We do not propose," said the right hon. gentleman, "that the +Constitution of the Orange River Colony should necessarily be the same +as the Constitution of the Transvaal Colony, either at starting or in +the immediate future. It will be dealt with upon its own merits, dealt +with separately, and we think it possible"--I ask the House to mark +this--"from the circumstances with which every one is familiar, that +an earlier beginning to greater political liberty may be made in the +Orange River Colony than in the Transvaal. That is due to the fact +that the Government of the Orange River Colony previous to the war was +by common consent a very good Government, and consequently, speaking +generally, of course, and not of individuals, we shall find there +probably the means to creating a satisfactory administration more +quickly than we can do in the case of the Transvaal Colony." + +Then we have been told that responsible government presupposes Party +government, and that in the Orange River Colony there are not the +elements of political parties, that there is not that diversity of +interests which we see in the Transvaal, that there are not the same +sharp differences between town and country, or the same astonishing +contrasts between wealth and poverty which prevail in the Transvaal. +And we are told that, in order that responsible government should work +properly, and Party government should be a success, there must be the +essential elements of Party conflict. I suppose we are, as a majority +in this House, admirers of the Party system of government; but I do +not think that we should any of us carry our admiration of that system +so far as to say that the nation is unfit to enjoy the privilege of +managing its own affairs unless it can find some one to quarrel with +and plenty of things to quarrel about. + +Then we are told that--"The country is prospering as it is. Why change +now? The land is tranquil, people are regaining the prosperity which +was lost in the war. It is a pity to make a change now; now is not the +moment." I admit the premise, but I draw exactly the opposite +conclusion. It is just for that reason that we should now step forward +and, taking occasion by the hand, make an advance in the system of +government. How often in the history of nations has the golden +opportunity been allowed to slip away! How often have rulers and +Governments been forced to make in foul weather the very journey which +they have refused to make prosperously in fair weather! + +Then we are told that Imperial interests will be endangered by this +grant. I do not believe that that is so. The Boer mind moves by +definite steps from one political conception to another. I believe +they have definitely abandoned their old ambition of creating in South +Africa a United States independent of the British Crown, and have +accepted that other political ideal which is represented by the +Dominion of Canada and the Commonwealth of Australia. At any rate, no +people have a greater right to claim respect on the ground of their +loyal adherence to treaty engagements than the people of the Orange +River Colony; for every one knows that it was with a most faithful +adherence to their engagements, with almost Quixotic loyalty, that +they followed--many of them knowing where their fortune was going to +lead them, knowing full well what would be the result of their +action--their sister State into the disastrous struggle of the South +African war. + +It is quite true that there is in existence at the present time--and I +think Lord Milner has pointed it out--no bond of love between the men +who fought us in that war and this country. I was reading the other +day a speech by Mr. Steyn. Mr. Steyn is, of course, one of the most +clearly avowed opponents of the British power. But Mr. Steyn is quite +clear upon this point. He says there is no bond of love, and it would +be untruthful and dishonest on their part to say that such a bond +existed. But, he says, there is another bond; there is such a thing as +a man's word of honour. "We gave our word of honour at Vereeniging, +and it is our intention to abide strictly by that." I state my opinion +as to the safety of the step we propose to take, but I cannot expect +the Members opposite to set much store by that, although it is an +honest and sincere opinion. But I will quote them an authority which I +am sure they will not dismiss without respect. As soon as the right +hon. Member for West Birmingham returned from South Africa, while his +experiences in that country were fresh in his mind, while he had but +newly been conversing with men of all parties there on the spot, the +scene of the struggle, he made a speech in this House which really +ought not to be overlooked by persons dealing with this question. + +"Great importance," said the right hon. gentleman, "seems to be +attached to the view that in the interests of the two Colonies it is +desirable that a certain time, not a long time in the history of a +nation, but still a certain time should elapse before full +self-government is accorded. Whether a long time will elapse I really +cannot say. One thing is clear: if the population of the Transvaal and +Orange River Colony, both Boer and Briton, by a large majority, +desire this self-government, even although it might seem to us to be +premature, I should think it unwise to refuse it. I do not myself +believe there is any such danger connected with Imperial interests +that we should hesitate to accord it on that ground. The ground on +which I should desire that it might be delayed is really the interest +of the two Colonies themselves, and not any Imperial interest." + +The peace and order of the Orange River Colony establish this case on +its merits. It is a State bound to moderation by the circumstance of +its geographical position. In all its history in South Africa it has +been largely dependent on the goodwill of its neighbours--goodwill and +friendly relations maintained with Natal and the Transvaal, on the one +hand, and with the Cape Colony on the other. It is inconceivable that +a State so situated in regard to its railways and its economic +position generally should be a disturbing influence from the point of +view of the different States of South Africa. But there is another +fact which justifies this grant, and that is the extraordinary +crimelessness in a political sense of the whole of that country. Let +the House remember that there had been three years' war, of which two +years were fierce guerilla fighting, and that on all sides there were +to be found desperate men who had been for a long period holding their +lives in their hands and engaged on every wild and adventurous foray. +Peace is agreed on, and what happens? Absolute order exists and +prevails throughout the whole country from that moment. There has not +been a single case of violent crime except, I believe, one murder +committed by a lunatic--hardly a case of sedition--and not a single +case of prosecution for treason of any kind. I say without hesitation +that in order to find a similar instance of swift transition from +violent warfare to law-abiding peace you have got to look back to the +days when the army of the Parliament was reviewed and disbanded at the +Restoration. + +I submit to the House that a case for conferring responsible +government on the Orange River Colony is established on its merits. +But that is not the whole question before us this afternoon. We have +not merely to decide whether we will give a Constitution to the Orange +River Colony, but whether, having given a Constitution to the +Transvaal, we will deliberately withhold one from the Orange River +Colony; and that is an argument which multiplies the others which I +have used. On what ground could we refuse that equal treatment of the +Orange River Colony? There is only one ground which we could assign +for such a refusal, and that is that in the Orange River Colony there +is sure to be a Dutch majority. I cannot conceive any more fatal +assertion that could be made on the part of the Imperial Government +than that on this specific racial ground they were forced to refuse +liberties which otherwise they would concede. I say such a refusal +would be an insult to the hundreds and thousands of loyal Dutch +subjects the King has in all parts of South Africa, I say that this +invidious treatment of the Orange River Colony would be the greatest +blunder, a fitting pendant to all that long concatenation of fatal +mistakes which has marked our policy in South Africa for so many +years; and I say it would be a breach of the spirit of the terms of +peace, because we could not say, "We promised you self-government by +the terms of peace, but what we meant by that was that before you were +to have self-government, enough persons of British origin should have +arrived in the country to make quite sure you would be out-voted." + +If we were to adopt such a course we should be false to that +agreement, which is the great foundation of our policy in South +Africa. I hope the House will earnestly sustain the importance of that +Vereeniging agreement. For the first time in many years the two white +races dwelling together in South Africa have found a common foundation +on which they can both build, a foundation much better than +Boomplaats, or the Sand River Convention, or the Conventions of 1880 +and 1884, far better than Majuba Hill or the Jameson Raid. They have +found a foundation which they can both look to without any feeling of +shame--on the contrary, with feelings of equal honour, and I trust +also with feelings of mutual forgiveness. + +On those grounds, therefore, we have decided to give to the Orange +River Colony full responsible government. We eschew altogether the +idea of treating them differently from the Transvaal, or interposing +any state of limited self-government between them and the full +enjoyment of their right. There is to be a Legislature which will +consist of two Chambers, as in the Transvaal. The First Chamber will +be elected upon a voters' basis and by manhood suffrage. The +residential qualification will be the same as in the Transvaal, six +months. The distribution of seats has been settled by general consent. +The Committee which we sent to South Africa, and which was so very +successful in arriving at an adjustment between the parties in the +Transvaal, has made similar investigations in the Orange River Colony, +and I think we may accept with confidence their recommendation. They +recommend that the number of members should be thirty-eight. The old +Volksraad had sixty members, but it was found to be much too large for +the needs of the country, and on several occasions efforts were made +to reduce the representation. Those efforts were not successful, from +the fact, which we can all appreciate, that it is very difficult +indeed to get a representative body to pass a self-denying ordinance +of that character which involves the extinction of its own members. +There will be separate representation of towns in the Orange River +Colony. In the Volksraad there was such a representation: there were +forty-two rural members and eighteen urban members. Out of the +thirty-eight we propose that there shall be twenty-seven rural +members and eleven urban members; rather less than a third of the +representation will be that of the small towns. That is a proportion +which is justified by the precedent of the old Constitution, and also +by the latest census. + +There will be a Second Chamber, and, as in the Transvaal, it will be +nominated, for the first Parliament only, by the Governor, under +instructions from the Secretary of State. It is not an hereditary +Chamber; and it may be, therefore, assumed that the distribution of +Parties in that Chamber will be attended by some measure of +impartiality, and that there will be some general attempt to select +only those persons who are really fit to exercise the important +functions entrusted to them. But even so protected, the Government +feel that in the ultimate issue in a conflict between the two +Chambers, the first and representative Chamber must prevail. The other +body may review and may suspend, but for the case of measures sent up +in successive sessions from the representative Chamber on which no +agreement can be reached, we have introduced the machinery which +appears in the Constitution of the Australian Commonwealth, that both +Chambers shall sit together, debate together, vote together, and the +majority shall decide. The whole success of that operation depends +upon the numerical proportion observed between the two Chambers. In +the Australian Commonwealth the proportion of the First Chamber is +rather more than two to one; in the Transvaal the proportion will be +more than four to one, namely, sixty-five to fifteen; and in the +Orange River Colony it will be thirty-eight to eleven. + +The other provisions of the Constitution will mainly follow the lines +of the Transvaal Constitution. The Constitution of the Orange River +Colony will become effective as soon as possible; and I should think +that the new Parliament might assemble in Bloemfontein some time +during the autumn of next year. When that work has been completed, and +the new Parliament has assembled, the main direction of South African +affairs in these Colonies will have passed from our hands. + +Sir, it is the earnest desire of the Government to steer colonial +affairs out of English Party politics, not only in the interest of the +proper conduct of those affairs, but in order to clear the arena at +home for the introduction of measures which affect the masses of the +people. We have tried in South Africa to deal fairly between man and +man, to adjust conflicting interests and overlapping claims. We have +tried so far as possible to effect a broad-bottomed settlement of the +question which should command the assent of people even beyond the +great party groupings which support us. + +Other liberties besides their own will be enshrined in these new +Parliaments. The people of South Africa, and, in a special measure, +the Boers, will become the trustees of freedom all over the world. We +have tried to act with fairness and good feeling. If by any chance our +counsels of reconciliation should come to nothing, if our policy +should end in mocking disaster, then the resulting evil would not be +confined to South Africa. Our unfortunate experience would be +trumpeted forth all over the world wherever despotism wanted a good +argument for bayonets, whenever an arbitrary Government wished to deny +or curtail the liberties of imprisoned nationalities. But if, on the +other hand, as we hope and profoundly believe, better days are in +store for South Africa, if the words of President Brand, "All shall +come right," are at length to be fulfilled, and if the near future +should unfold to our eves a tranquil, prosperous, consolidated +Afrikander nation under the protecting aegis of the British Crown, +then, the good also will not be confined to South Africa; then the +cause of the poor and the weak all over the world will have been +sustained; and everywhere small peoples will get more room to breathe, +and everywhere great empires will be encouraged by our example to step +forward--and it only needs a step--into the sunshine of a more gentle +and a more generous age. + + + + +LIBERALISM AND SOCIALISM + +ST. ANDREW'S HALL, GLASGOW, _October 11, 1906_ + +(From _The Dundee Advertiser_, by permission.) + + +The first indispensable condition of democratic progress must be the +maintenance of European peace. War is fatal to Liberalism. Liberalism +is the world-wide antagonist of war. We have every reason to +congratulate ourselves upon the general aspect of the European +situation. The friendship which has grown up between Great Britain and +France is a source of profound satisfaction to every serious and +thinking man. The first duty of a nation is to make friends with its +nearest neighbour. Six years ago France was agitated in the throes of +the Dreyfus case, and Great Britain was plunged in the worst and most +painful period of the South African war; and both nations--conscious +as we are of one another's infirmities--were inclined to express their +opinion about the conduct of the other in unmeasured terms, and keen +antagonism resulted. What a contrast to-day! Ever since the King, +whose services in the cause of international peace are regarded with +affection in every quarter of his dominions, ever since by an act of +prescience and of courage his Majesty went to Paris, the relations +between Great Britain and France have steadily and progressively +improved, and to-day we witness the inspiring spectacle of these two +great peoples, the two most genuinely Liberal nations in the whole +world, locked together in a league of friendship under standards of +dispassionate justice and international goodwill. But it is absurd to +suppose that the friendship which we have established with France +should be in any degree a menace to any other European Power, or to +the great Power of Germany. + +If the prospects on the European continent are bright and tranquil, I +think we have reason to feel also contentment at the course of +Colonial affairs. We have had unusual difficulties in the Colonies; +but in spite of every effort to excite Colonial apprehension for Party +purposes against a Liberal Ministry through the instrumentality of a +powerful press, the great States of the Empire have felt, and with +more assurance every day, that a Liberal Administration in Downing +Street will respect their rights and cherish their interests. + +But I am drawn to South Africa by the memory that to-night, the 11th +of October, is the anniversary of the declaration of war; and I think +it is in South Africa that we have especial reason to be satisfied +with the course which events have taken, since we have been in any +degree responsible for their direction. One great advantage we have +had--a good foundation to build on. We have had the Treaty of +Vereeniging, by which peace was established between the Dutch and +British races in South Africa upon terms honourable to both. We have +had that treaty as our foundation--and what a mercy it is, looking +back on the past, to think that the nation followed Lord Rosebery's +advice at Chesterfield to terminate the war by a regular peace and a +regular settlement, and were not lured away, as Lord Milner would have +advised them, when he said that the war in a certain sense would never +be over, into a harsh policy of unconditional surrender and pitiless +subjugation. + +The work of giving these free Constitutions to the two Colonies in +South Africa, so lately independent Republics, is in harmony with the +most sagacious instincts, and the most honoured traditions of the +Liberal Party. But I notice that Lord Milner, who, as we remember, was +once a Liberal candidate,--and who now appears before us sometimes in +the guise of a silent and suffering public servant, sometimes in the +aspect of an active, and even an acrid, political partisan, haranguing +his supporters and attacking his Majesty's Ministers,--Lord Milner +describes all this improving outlook as "the dreary days of reaction." +Progress and reaction are no doubt relative terms. What one man calls +progress another will call reaction. If you have been rapidly +descending the road to ruin and you suddenly check yourself, stop, +turn back, and retrace your steps, that is reaction, and no doubt your +former guide will have every reason to reproach you with +inconsistency. And it seems to me not at all unnatural that to one who +regards three years' desolating civil war as a period of healthy and +inspiring progress, a good deal of what his Majesty's Government have +lately done in South Africa must appear very dreary and reactionary +indeed. + +But I would recommend you to leave this disconsolate proconsul alone. +I do not agree with him when he says that South Africa is passing +through a time of trial. South Africa is emerging from her time of +trial. The darkest period is behind her. Brighter prospects lie before +her. The improvement upon which we are counting is not the hectic +flush of a market boom, but the steady revival and accumulation of +agricultural and industrial productiveness. Soberly and solemnly men +of all parties and of both races in South Africa are joining together +to revive and to develop the prosperity of their own country. Grave +difficulties, many dangers, long exertions lie before them; but the +star of South Africa is already in the ascendant, and I look +confidently forward to the time when it will take its place, united, +federated, free, beside Canada and Australia, in the shining +constellation of the British Empire. + +When we have dealt with subjects which lie outside our own island, let +us concentrate our attention on what lies within it, because the +gravest problems lie at home. I shall venture to-night to make a few +general observations upon those larger trendings of events which +govern the incidents and the accidents of the hour. The fortunes and +the interests of Liberalism and Labour are inseparably interwoven; +they rise by the same forces, and in spite of similar obstacles, they +face the same enemies, they are affected by the same dangers, and the +history of the last thirty years shows quite clearly that their power +of influencing public affairs and of commanding national attention +fluctuate together. Together they are elevated, together they are +depressed, and any Tory reaction which swept the Liberal Party out of +power would assuredly work at least proportionate havoc in the ranks +of Labour. That may not be a very palatable truth, but it is a truth +none the less. + +Labour! It is a great word. It moves the world, it comprises the +millions, it combines many men in many lands in the sympathy of a +common burden. Who has the right to speak for Labour? A good many +people arrogate to themselves the right to speak for Labour. How many +political Flibbertigibbets are there not running up and down the land +calling themselves the people of Great Britain, and the social +democracy, and the masses of the nation! But I am inclined to think, +so far as any body of organised opinion can claim the right to speak +for this immense portion of the human race, it is the trade unions +that more than any other organisation must be considered the +responsible and deputed representatives of Labour. They are the most +highly organised part of Labour; they are the most responsible part; +they are from day to day in contact with reality. They are not mere +visionaries or dreamers weaving airy Utopias out of tobacco smoke. +They are not political adventurers who are eager to remodel the world +by rule-of-thumb, who are proposing to make the infinite complexities +of scientific civilisation and the multitudinous phenomena of great +cities conform to a few barbarous formulas which any moderately +intelligent parrot could repeat in a fortnight. + +The fortunes of the trade unions are interwoven with the industries +they serve. The more highly organised trade unions are, the more +clearly they recognise their responsibilities; the larger their +membership, the greater their knowledge, the wider their outlook. Of +course, trade unions will make mistakes, like everybody else, will do +foolish things, and wrong things, and want more than they are likely +to get, just like everybody else. But the fact remains that for thirty +years trade unions have had a charter from Parliament which up to +within a few years ago protected their funds, and gave them effective +power to conduct a strike; and no one can say that these thirty years +were bad years of British industry, that during these thirty years it +was impossible to develop great businesses and carry on large +manufacturing operations, because, as everybody knows perfectly well, +those were good and expanding years of British trade and national +enrichment. + +A few years ago a series of judicial decisions utterly changed the +whole character of the law regarding trade unions. It became difficult +and obscure. The most skilful lawyers were unable to define it. No +counsel knew what advice to tender to those who sought his guidance. +Meanwhile if, in the conduct of a strike, any act of an agent, however +unauthorised, transgressed the shadowy and uncertain border-line +between what was legal and what was not, an action for damages might +be instituted against the trade union, and if the action was +successful, trade union funds, accumulated penny by penny, year by +year, with which were inseparably intermingled friendly and benefit +moneys, might in a moment have been swept away. That was the state of +the law when his Majesty's present advisers were returned to power. +We have determined to give back that charter to the trade unions. The +Bill is even now passing through the House of Commons. + +We are often told that there can be no progress for democracy until +the Liberal Party has been destroyed. Let us examine that. Labour in +this country exercises a great influence upon the Government. That is +not so everywhere. It is not so, for instance, in Germany, and yet in +Germany there is no Liberal Party worth speaking of. Labour there is +very highly organised, and the Liberal Party there has been destroyed. +In Germany there exists exactly the condition of affairs, in a Party +sense, that Mr. Keir Hardie and his friends are so anxious to +introduce here. A great social democratic party on the one hand, are +bluntly and squarely face to face with a capitalist and military +confederation on the other. That is the issue, as it presents itself +in Germany; that is the issue, as I devoutly hope it may never present +itself here. And what is the result? In spite of the great numbers of +the Socialist Party in Germany, in spite of the high ability of its +leaders, it has hardly any influence whatever upon the course of +public affairs. It has to submit to food taxes and to conscription; +and I observe that Herr Bebel, the distinguished leader of that Party, +at Mannheim the other day was forced to admit, and admitted with great +candour, that there was no other country in Europe so effectively +organised as Germany to put down anything in the nature of a violent +Socialist movement. That is rather a disquieting result to working men +of having destroyed the Liberal Party. + +But we are told to wait a bit; the Socialist Party in Germany is only +three millions. How many will there be in ten years' time? That is a +fair argument. I should like to say this. A great many men can jump +four feet, but very few can jump six feet. After a certain distance +the difficulty increases progressively. It is so with the horse-power +required to drive great ships across the ocean; it is so with the +lifting power required to raise balloons in the air. A balloon goes up +quite easily for a certain distance, but after a certain distance it +refuses to go up any farther, because the air is too rarefied to float +it and sustain it. And, therefore, I would say let us examine the +concrete facts. + +In France, before the Revolution, property was divided among a very +few people. A few thousand nobles and priests and merchants had all +the wealth in the country; twenty-five million peasants had nothing. +But in modern States, such as we see around us in the world to-day, +property is very widely divided. I do not say it is evenly divided. I +do not say it is fairly divided, but it is very widely divided. +Especially is that true in Great Britain. Nowhere else in the world, +except, perhaps, in France and the United States, are there such vast +numbers of persons who are holders of interest-bearing, +profit-bearing, rent-earning property, and the whole tendency of +civilisation and of free institutions is to an ever-increasing volume +of production and an increasingly wide diffusion of profit. And +therein lies the essential stability of modern States. There are +millions of persons who would certainly lose by anything like a +general overturn, and they are everywhere the strongest and best +organised millions. And I have no hesitation in saying that any +violent movement would infallibly encounter an overwhelming +resistance, and that any movement which was inspired by mere class +prejudice, or by a desire to gain a selfish advantage, would encounter +from the selfish power of the "haves" an effective resistance which +would bring it to sterility and to destruction. + +And here is the conclusion to which I lead you. Something more is +needed if we are to get forward. There lies the function of the +Liberal Party. Liberalism supplies at once the higher impulse and the +practicable path; it appeals to persons by sentiments of generosity +and humanity; it proceeds by courses of moderation. By gradual steps, +by steady effort from day to day, from year to year, Liberalism +enlists hundreds of thousands upon the side of progress and popular +democratic reform whom militant Socialism would drive into violent +Tory reaction. That is why the Tory Party hate us. That is why they, +too, direct their attacks upon the great organisation of the Liberal +Party, because they know it is through the agency of Liberalism that +society will be able in the course of time to slide forward, almost +painlessly--for the world is changing very fast--on to a more even and +a more equal foundation. That is the mission that lies before +Liberalism. The cause of the Liberal Party is the cause of the +left-out millions; and because we believe that there is in all the +world no other instrument of equal potency and efficacy available at +the present time for the purposes of social amelioration, we are bound +in duty and in honour to guard it from all attacks, whether they arise +from violence or from reaction. + +There is no necessity to-night to plunge into a discussion of the +philosophical divergencies between Socialism and Liberalism. It is not +possible to draw a hard-and-fast line between individualism and +collectivism. You cannot draw it either in theory or in practice. That +is where the Socialist makes a mistake. Let us not imitate that +mistake. No man can be a collectivist alone or an individualist alone. +He must be both an individualist and a collectivist. The nature of man +is a dual nature. The character of the organisation of human society +is dual. Man is at once a unique being and a gregarious animal. For +some purposes he must be collectivist, for others he is, and he will +for all time remain, an individualist. Collectively we have an Army +and a Navy and a Civil Service; collectively we have a Post Office, +and a police, and a Government; collectively we light our streets and +supply ourselves with water; collectively we indulge increasingly in +all the necessities of communication. But we do not make love +collectively, and the ladies do not marry us collectively, and we do +not eat collectively, and we do not die collectively, and it is not +collectively that we face the sorrows and the hopes, the winnings and +the losings of this world of accident and storm. + +No view of society can possibly be complete which does not comprise +within its scope both collective organisation and individual +incentive. The whole tendency of civilisation is, however, towards the +multiplication of the collective functions of society. The +ever-growing complications of civilisation create for us new services +which have to be undertaken by the State, and create for us an +expansion of the existing services. There is a growing feeling, which +I entirely share, against allowing those services which are in the +nature of monopolies to pass into private hands. There is a pretty +steady determination, which I am convinced will become effective in +the present Parliament, to intercept all future unearned increment +which may arise from the increase in the speculative value of the +land. There will be an ever-widening area of municipal enterprise. I +go farther; I should like to see the State embark on various novel +and adventurous experiments, I am delighted to see that Mr. Burns is +now interesting himself in afforestation. I am of opinion that the +State should increasingly assume the position of the reserve employer +of labour. I am very sorry we have not got the railways of this +country in our hands. We may do something better with the canals, and +we are all agreed, every one in this hall who belongs to the +Progressive Party, that the State must increasingly and earnestly +concern itself with the care of the sick and the aged, and, above all, +of the children. + +I look forward to the universal establishment of minimum standards of +life and labour, and their progressive elevation as the increasing +energies of production may permit. I do not think that Liberalism in +any circumstances can cut itself off from this fertile field of social +effort, and I would recommend you not to be scared in discussing any +of these proposals, just because some old woman comes along and tells +you they are Socialistic. If you take my advice, you will judge each +case on its merits. Where you find that State enterprise is likely to +be ineffective, then utilise private enterprises, and do not grudge +them their profits. + +The existing organisation of society is driven by one +mainspring--competitive selection. It may be a very imperfect +organisation of society, but it is all we have got between us and +barbarism. It is all we have been able to create through unnumbered +centuries of effort and sacrifice. It is the whole treasure which past +generations have been able to secure, and which they have been able to +bequeath; and great and numerous as are the evils of the existing +condition of society in this country, the advantages and achievements +of the social system are greater still. Moreover, that system is one +which offers an almost indefinite capacity for improvement. We may +progressively eliminate the evils; we may progressively augment the +goods which it contains. I do not want to see impaired the vigour of +competition, but we can do much to mitigate the consequences of +failure. We want to draw a line below which we will not allow persons +to live and labour, yet above which they may compete with all the +strength of their manhood. We want to have free competition upwards; +we decline to allow free competition to run downwards. We do not want +to pull down the structures of science and civilisation: but to +spread a net over the abyss; and I am sure that if the vision of a +fair Utopia which cheers the hearts and lights the imagination of the +toiling multitudes, should ever break into reality, it will be by +developments through, and modifications in, and by improvements out +of, the existing competitive organisation of society; and I believe +that Liberalism mobilised, and active as it is to-day, will be a +principal and indispensable factor in that noble evolution. + +I have been for nearly six years, in rather a short life, trained as a +soldier, and I will use a military metaphor. There is no operation in +war more dangerous or more important than the conduct of a rear-guard +action and the extrication of a rear-guard from difficult and broken +ground. In the long war which humanity wages with the elements of +nature the main body of the army has won its victory. It has moved out +into the open plain, into a pleasant camping ground by the water +springs and in the sunshine, amid fair cities and fertile fields. But +the rear-guard is entangled in the defiles, the rear-guard is still +struggling in mountainous country, attacked and assailed on every side +by the onslaughts of a pitiless enemy. The rear-guard is encumbered +with wounded, obstructed by all the broken vehicles that have fallen +back from the main line of the march, with all the stragglers and +weaklings that have fallen by the way and can struggle forward no +farther. It is to the rear-guard of the army that attention should be +directed. There is the place for the bravest soldiers and the most +trusted generals. It is there that all the resources of military +science and its heaviest artillery should be employed to extricate the +rear-guard--not to bring the main army back from good positions which +it occupies, not to throw away the victory which it has won over the +brute forces of nature--but to bring the rear-guard in, to bring them +into the level plain, so that they too may dwell in a land of peace +and plenty. + +That is the aim of the Liberal Party, and if we work together we will +do something for its definite accomplishment. + + + + +IMPERIAL PREFERENCE + + +I + +IMPERIAL CONFERENCE,[2] DOWNING STREET, _May 7, 1907_ + + +The economic aspect of Imperial Preference, both from the point of +view of trade and of finance, has already been dealt with very fully +by the Chancellor of the Exchequer and the President of the Board of +Trade, and I desire in the few observations with which I shall venture +to trespass upon the indulgence of the Conference to refer very +little to the economic aspect, and rather to examine one or two points +about this question of a political, of a Parliamentary, and almost of +a diplomatic character. I want to consider for a moment what would be +the effect of a system of preferences upon the course of Parliamentary +business. The course of Colonial affairs in the House of Commons is +not always very smooth or very simple, and I am bound to say that, +having for eighteen months been responsible for the statements on +behalf of this Department which are made to the House of Commons, I +feel that enormous difficulties would be added to the discharge of +Colonial business in the House of Commons, if we were to involve +ourselves in a system of reciprocal preferences. Every one will agree, +from whatever part of the King's dominions he comes, or to whatever +Party he belongs, that Colonial affairs suffer very much when brought +into the arena of British Party politics. Sometimes it is one Party +and sometimes it is another which is constrained to interfere in the +course of purely Colonial affairs, and such interferences are nearly +always fraught with vexation and inconvenience to the Dominions +affected. + +Now, the system of Imperial preference inevitably brings Colonial +affairs into the Parliamentary and the Party arena; and, if I may say +so, it brings them into the most unpleasant part of Parliamentary and +political work--that part which is concerned with raising the taxation +for each year. It is very easy to talk about preference in the +abstract and in general terms, and very many pleasant things can be +said about mutual profits and the good feeling which accrues from +commercial intercourse. But in regard to preference, as in regard to +all other tariff questions, the discussion cannot possibly be +practical, unless the propositions are formulated in precise, exact, +and substantial detail. Many people will avow themselves in favour of +the principle of preference who would recoil when the schedule of +taxes was presented to their inspection. + +I, therefore, leave generalities about preference on one side. I leave +also proposals which have been discussed that we should give a +preference on existing duties. It is quite clear that no preference +given upon existing duties could possibly be complete or satisfactory. +It could at the very best only be a beginning, and Dr. Jameson and Dr. +Smartt, when they urged us with so much force to make a beginning by +giving a preference on South African tobacco, have clearly recognised +and frankly stated, that that preference would in itself be of small +value, but that it would be welcomed by them as conceding "the larger +principle." Therefore, we are entitled to say, that before us at this +Conference is not any question of making a small or tentative +beginning on this or that particular duty, but we have to make up our +minds upon the general principle of the application of a reciprocal +preference to the trade relations of the British Empire. + +If that be so, surely the representatives of the self-governing +Dominions who ask us to embark on such a system, ought to state +squarely and abruptly the duties which in their opinion would be +necessary to give effect to such a proposal. The question whether raw +material is to be taxed is absolutely vital to any consideration of +Imperial preference. Although it is no doubt a very good answer, when +the direct question is raised,--What are your notions? to say that the +Colonies would leave that to the Mother Country, those who urge upon +us a system of reciprocal preference are bound to face the conclusions +of their own policy, and are bound to recognise that that request, if +it is to be given effect to in any symmetrical, logical, complete, +satisfactory, or even fair and just manner, must involve new taxes to +us on seven or eight staple articles of consumption in this country. I +lay it down, without hesitation, that no fair system of Imperial +preference can be established which does not include taxes on bread, +on meat, on that group of food-stuffs classified under the head of +dairy produce, on wool and leather, and on other necessaries of +industry. + +If that be so, seven or eight new taxes would have to be imposed to +give effect to this principle you have brought before us. Those taxes +would have to figure every year in our annual Budget. They would have +to figure in the Budget resolutions of every successive year in the +House of Commons. There will be two opinions about each of these +taxes; there will be those who like them and favour the principle, and +who will applaud the policy, and there will be those who dislike them. +There will be the powerful interests which will be favoured and the +interests which will be hurt by their adoption. So you will have, as +each of those taxes comes up for the year, a steady volume of +Parliamentary criticism directed at it. + +Now that criticism will, I imagine, flow through every channel by +which those taxes may be assailed. It will seek to examine the value, +necessarily in a canvassing spirit, of the Colonial Preferences as a +return for which these taxes are imposed. It will seek to dwell upon +the hardship to the consumers in this country of the taxes themselves. +It will stray farther, I think, and it will examine the contributions +which the self-governing Dominions make to the general cost of +Imperial defence; and will contrast those contributions with a severe +and an almost harsh exactitude with the great charges borne by the +Mother Country. + +There has just been a debate upon that subject in the House of +Commons; but the manner in which that question when raised was +received by the whole House, ought, I think, to give great +satisfaction to the representatives of the self-governing Dominions. +We then refused to embark upon a policy of casting-up balances as +between the Colonies and the Mother Country, and, speaking on behalf +of the Colonial Office, I said that the British Empire existed on the +principles of a family and not on those of a syndicate. But the +introduction of those seven or eight taxes into the Budget of every +year will force a casting-up of balances every year from a severe +financial point of view. It has been said, and will be generally +admitted, that there is no such thing in this country as an +anti-Colonial party. It does not exist. Even parties, like the Irish +Party, not reconciled to the British Government, who take no part in +our public ceremonial, are glad to take opportunities of showing the +representatives of the self-governing Dominions that they welcome them +here, and desire to receive them with warmth and with cordiality. But +I cannot conceive any process better calculated to manufacture an +anti-Colonial party, than this process of subjecting to the scrutiny +of the House of Commons year by year, through the agency of taxation, +the profit and loss account, in its narrow, financial aspect, of the +relations of Great Britain and her Dominions and dependencies. + +Then this system of reciprocal preference, at its very outset, must +involve conflict with the principle of self-government, which is the +root of all our Colonial and Imperial policy. The whole procedure of +our Parliament arises primarily from the consideration of finance, +and finance is the peg on which nearly all our discussions are hung, +and from which many of them arise. That is the historic origin of a +great portion of the House of Commons procedure, and there is no more +deeply rooted maxim than the maxim of "grievances before supply." Now, +let me suppose a system of preference in operation. When the taxes +came up to be voted each year, members would use those occasions for +debating Colonial questions. I can imagine that they would say: We +refuse to vote the preference tax to this or that self-governing +Dominion, unless or until our views, say, on native policy or some +other question of internal importance to the Dominion affected have +been met and have been accepted. At present, it is open to the Colony +affected to reply: These matters are matters which concern us; they +are within the scope of responsible, self-governing functions, and you +are not called upon to interfere. It is open for the Dominion +concerned to say that. It is also open for the representative of the +Colonial Office in the House of Commons to say that, too, on their +behalf. + +But it will no longer be open, I think, for any such defence to be +offered when sums of money, or what would be regarded as equivalent +to sums of money, have actually to be voted in the House of Commons +through the agency of these taxes for the purpose of according +preference to the different Dominions of the Crown, and I think +members will say, "If you complain of our interference, why do you +force us to interfere? You have forced us to consider now whether we +will or will not grant a preference to this or that particular +Dominion for this year. We say we are not prepared to do so unless or +until our views upon this or that particular internal question in that +Dominion have been met and agreed to." I see a fertile, frequent, and +almost inexhaustible source of friction and vexation arising from such +causes alone. + +There is a more serious infringement, as it seems to me, upon the +principle of self-government. The preferences which have hitherto been +accorded to the Mother Country by the self-governing States of the +British Empire are free preferences. They are preferences which have +been conceded by those States, in their own interests and also in our +interests. They are freely given, and, if they gall them, can as +freely be withdrawn; but the moment reciprocity is established and an +agreement has been entered into to which both sides are parties, the +moment the preferences become reciprocal, and there is a British +preference against the Australian or Canadian preferences, they become +not free preferences, but what I venture to call locked preferences, +and they cannot be removed except by agreement, which is not likely to +be swiftly or easily attained. + +Now I must trench for one moment upon the economic aspect. What does +preference mean? It can only mean one thing. It can only mean better +prices. It can only mean better prices for Colonial goods. I assert, +without reserve, that preference can only operate through the agency +of price. All that we are told about improving and developing the +cultivation of tobacco in South Africa, and calling great new areas +for wheat cultivation into existence in Australia, depends upon the +stimulation of the production of those commodities, through securing +to the producers larger opportunities for profit. I say that unless +preference means better prices it will be ineffective in achieving the +objects for the sake of which it is urged. But the operation of +preference consists, so far as we are concerned, in putting a penal +tax upon foreign goods, and the object of putting that penal tax on +foreign goods is to enable the Colonial supply to rise to the level of +the foreign goods plus the tax, and by so conferring upon the Colonial +producer a greater reward, to stimulate him more abundantly to cater +for the supply of this particular market. I say, therefore, without +hesitation, that the only manner in which a trade preference can +operate is through the agency of price. If preference does not mean +better prices it seems to me a great fraud on those who are asked to +make sacrifices to obtain it; and by "better" prices I mean higher +prices--that is to say, higher prices than the goods are worth, if +sold freely in the markets of the world. + +I am quite ready to admit that the fact that you make a particular +branch of trade more profitable, induces more people to engage in that +branch of trade. That is what I call stimulating Colonial production +through the agency of price. I am quite prepared to admit that a very +small tax on staple articles would affect prices in a very small +manner. Reference has been made to the imposition of a shilling duty +on corn, and I think it was Mr. Moor[3] who said, yesterday, that +when the shilling duty was imposed prices fell, and when it was taken +off prices rose. That may be quite true. I do not know that it is +true, but it may be. The imposition of such a small duty as a shilling +on a commodity produced in such vast abundance as wheat, might quite +easily be swamped or concealed by the operation of other more powerful +factors. A week of unusual sunshine, or a night of late frost, or a +ring in the freights, or violent speculation, might easily swamp and +cover the operation of such a small duty; but it is the opinion of +those whose economic views I share--I cannot put it higher than +that--that whatever circumstances may apparently conceal the effect of +the duty on prices, the effect is there all the same, and that any +duty that is imposed upon a commodity becomes a factor in the price of +that commodity. I should have thought that was an almost incontestable +proposition. + +Here you have the two different sides of the bargain, the sellers and +the buyers, the sellers trying to get all they can, and the buyers +trying to give as little as they can. An elaborate process of what is +called "the higgling of the market" goes on all over the world between +exchanges linked up by telegraph, whose prices vary to a sixteenth +and a thirty-second. We are invited to believe that with all that +subtle process of calculation made from almost minute to minute +throughout the year, the imposition of a duty or demand for L1,000,000 +or L2,000,000 for this or that Government, placed suddenly upon the +commodity in question as a tax, makes no difference whatever to the +cost to the consumer; that it is borne either by the buyer or by the +seller, or provided in some magical manner. As a matter of fact, the +seller endeavours to transmit the burden to the purchaser, and the +purchaser places it upon the consumer as opportunity may occur in +relation to the general market situation all over the world. + +That is by way of digression, only to show that we believe that a tax +on a commodity is a factor in its price, which I thought was a +tolerably simple proposition. What a dangerous thing it will be, year +after year, to associate the idea of Empire, of our kith and kin +beyond the seas, of these great, young, self-governing Dominions in +which our people at present take so much pride, with an enhancement, +however small, in the price of the necessary commodities of the life +and the industry of Britain! It seems to me that, quite apart from +the Parliamentary difficulty to which I have referred, which I think +would tend to organise and create anti-Colonial sentiment, you would, +by the imposition of duties upon the necessaries of life and of +industry, breed steadily year by year, and accumulate at the end of a +decade a deep feeling of sullen hatred of the Colonies, and of +Colonial affairs among those poorer people in this country to whom Mr. +Lloyd George referred so eloquently yesterday, and whose case, when +stated, appeals to the sympathy of every one round this table. That +would be a great disaster. + +But there is another point which occurs to me, and which I would +submit respectfully to the Conference in this connection. Great +fluctuations occur in the price of all commodities which are subject +to climatic influences. We have seen enormous fluctuations in meat and +cereals and in food-stuffs generally from time to time in the world's +markets. Although we buy in the markets of the whole world we observe +how much the price of one year varies from that of another year. These +fluctuations are due to causes beyond our control. We cannot control +the causes which make the earth refuse her fruits at a certain +season, nor can we, unfortunately, at present, control the speculation +which always arises when an unusual stringency is discovered. Compared +to these forces, the taxes which you suggest should be imposed upon +food and raw materials might, I admit, be small, but they would be the +only factor in price which would be absolutely in our control. + +If, from circumstances which we may easily imagine, any of the great +staple articles which were the subject of preference should be driven +up in price to an unusual height, there would be a demand--and I think +an irresistible demand--in this country that the tax should be +removed. The tax would bear all the unpopularity. People would say: +"This, at any rate, we can take off, and relieve the burden which is +pressing so heavily upon us." But now see the difficulty in which we +should then be involved. At present all our taxes are under our own +control. An unpopular tax can be removed; if the Government will not +remove it they can be turned out and another Government to remove the +tax can be got from the people by election. It can be done at once. +The Chancellor of the Exchequer can come down to the House and the +tax can be repealed if there is a sufficiently fierce demand for it. + +But these food taxes by which you seek to bind the Empire +together--these curious links of Empire which you are asking us to +forge laboriously now--would be irremovable, and upon them would +descend the whole weight and burden of popular anger in time of +suffering. They would be irremovable, because fixed by treaty with +self-governing Dominions scattered about all over the world, and in +return for those duties we should have received concessions in +Colonial tariffs on the basis of which their industries would have +grown up tier upon tier through a long period of time. + +Although, no doubt, another Conference hastily assembled might be able +to break the shackle which would fasten us--to break that fiscal bond +which would join us together and release us from the obligation--that +might take a great deal of time. Many Parliaments and Governments +would have to be consulted, and all the difficulties of distance would +intervene to prevent a speedy relief from that deadlock. If the day +comes in this country when you have a stern demand--and an +overwhelming demand of a Parliament, backed by a vast population +suffering acutely from high food-prices--that the taxes should be +removed, and on the other hand the Minister in charge has to get up +and say that he will bring the matter before the next Colonial +Conference two years hence, or that he will address the +representatives of the Australian or Canadian Governments through the +agency of the Colonial Office, and that in the meanwhile nothing can +be done--when you have produced that situation, then, indeed, you will +have exposed the fabric of the British Empire to a wrench and a shock +which it has never before received, and which any one who cares about +it, cannot fail to hope that it may never sustain. + +Such a deadlock could not be relieved merely by goodwill on either +side. When you begin to deflect the course of trade, you deflect it in +all directions and for all time in both countries which are parties to +the bargain. Your industries in your respective Colonies would have +exposed themselves to a more severe competition from British goods in +their markets, and would have adjusted themselves on a different +basis, in consequence. Some Colonial producers would have made +sacrifices in that respect for the sake of certain advantages which +were to be gained by other producers in their country through a +favoured entry into our market. That one side of the bargain could be +suddenly removed, without inflicting injustice on the other party to +the bargain, appears to me an impossibility. + +I submit that preferences, even if economically desirable, would prove +an element of strain and discord in the structure and system of the +British Empire. Why, even in this Conference, what has been the one +subject on which we have differed sharply? It has been this question +of preference. It has been the one apple of discord which has been +thrown into the arena of our discussions. It is quite true we meet +here with a great fund of goodwill on everybody's part, on the part of +the Mother Country and on the part of the representatives of the +self-governing Dominions--a great fund of goodwill which has been +accumulated over a long period of time when each party to this great +confederation has been free to pursue its own line of development +unchecked and untrammelled by interference from the other. + +We have that to start upon, and consequently have been able to discuss +in a very frank and friendly manner all sorts of questions. We have +witnessed the spectacle of the British Minister in charge of the trade +of this country defending at length and in detail the fiscal +system--the purely domestic, internal fiscal system of this +country--from very severe, though perfectly friendly and courteous +criticism on the part of the other self-governing communities. If that +fund of goodwill to which I have referred had been lacking, if ever a +Conference had been called together when there was an actual +anti-colonial party in existence, when there was really a deep hatred +in the minds of a large portion of the people of this country against +the Colonies and against taxation which was imposed at the request or +desire of the Colonies, then I think it is quite possible that a +Conference such as this would not pass off in the smooth and friendly +manner in which this has passed off. + +You would hear recrimination and reproaches exchanged across the +table; you would hear assertions made that the representatives of the +different States who were parties to the Conference were not really +representatives of the true opinion of their respective populations, +that the trend of opinion in the country which they professed to +represent was opposed to their policy and would shortly effect a +change in the views which they put forward. You would find all these +undemocratic assertions that representatives duly elected do not +really speak in the name of their people, and you would, of course, +find appeals made over the heads of the respective Governments to the +party organisations which supported them or opposed them in the +respective countries from which they came. That appears to me to open +up possibilities of very grave and serious dangers in the structure +and fabric of the British Empire, from which I think we ought to +labour to shield it. + +My right honourable friend the Chancellor of the Exchequer has told +the Conference with perfect truth--in fact it may have been even an +under-estimate--that if he were to propose the principle of preference +in the present House of Commons, it would be rejected by a majority of +three to one. But even if the present Government could command a +majority for the system, they would have no intention whatever of +proposing it. It is not because we are not ready to run electoral +risks that we decline to be parties to a system of preference; still +less is it because the present Government is unwilling to make +sacrifices, in money or otherwise, in order to weave the Empire more +closely together. I think a very hopeful deflection has been given to +our discussion when it is suggested that we may find a more convenient +line of advance by improving communications, rather than by erecting +tariffs--by making roads, as it were, across the Empire, rather than +by building walls. It is because we believe the principle of +preference is positively injurious to the British Empire, and would +create, not union, but discord, that we have resisted the proposal. + +It has been a source of regret to all of us that on this subject we +cannot come to an agreement. A fundamental difference of opinion on +economics, no doubt, makes agreement impossible; but although we +regret that, I do not doubt that in the future, when Imperial +unification has been carried to a stage which it has not now reached, +and will not, perhaps, in our time attain, people in that more +fortunate age will look back to the Conference of 1907 as a date in +the history of the British Empire when one grand wrong turn was +successfully avoided. + +FOOTNOTES: + +[2] The following, among others, were present at the Conference: + +The Earl of Elgin, Secretary of State for the Colonies; Sir Wilfrid +Laurier, Prime Minister of Canada; Sir F.W. Borden, Minister of Militia +and Defence (Canada); Mr. L.P. Brodeur, Minister of Marine and +Fisheries (Canada); Mr. Deakin, Prime Minister of the Commonwealth of +Australia; Sir W. Lyne, Minister of Trade and Customs (Australia); Sir +Joseph Ward, Prime Minister of New Zealand; Dr. L.S. Jameson, Prime +Minister of Cape Colony; Dr. Smartt, Commissioner of Public Works (Cape +Colony); Sir Robert Bond, Prime Minister of Newfoundland; Mr. F.R. +Moor, Prime Minister of Natal; General Botha, Prime Minister of the +Transvaal; Sir J.L. Mackay, on behalf of the India Office. + +[3] The Prime Minister of Natal. + + + + +IMPERIAL PREFERENCE + +II + +HOUSE OF COMMONS, _July 15, 1907_ + + Mr. Lyttelton had moved the following vote of censure: + + "That this House regrets that his Majesty's Government + have declined the invitation unanimously preferred by the + Prime Ministers of the self-governing Colonies, to + consider favourably any form of Colonial Preference or + any measures for closer commercial union of the Empire on + a preferential basis." (Mr. Lyttelton.) + + This was met on behalf of the Government by the following + Amendment: + + "To leave out all after the word 'that' and add the words + 'In the opinion of this House, the permanent unity of the + British Empire will not be secured through a system of + preferential duties based upon the protective taxation of + food.'" (Mr. Soares) + + The vote of censure was rejected, and the Amendment carried + by 404 to 111. + + +A vote of censure is a very serious thing. When it is moved with great +formality on behalf of the official Opposition, it is intended always +to raise a plain and decisive issue. I must, however, observe that of +all the votes of censure which have been proposed in recent times in +this House, the one we are now discussing is surely the most curious. +The last Government was broken up three years ago on this very +question of Imperial preference. After the Government had been broken +up, a continuous debate proceeded in the country for two years and a +half, and it was terminated by the general election. This Parliament +is the result of that election, and there is not a single gentleman on +this Ministerial Bench who is not pledged, in the most specific terms, +not to grant a preferential tariff to the Colonies. Now, because we +have kept that promise, because we are opposed to preferential +tariffs, because we have declined to grant preferential tariffs, and +because we have done what all along we declared we were going to do, +and were returned to do, we are made the object of this vote of +censure. + +It may be said, "We do not blame you for keeping your promise, but for +making the pledge." But what did the Leader of the Opposition promise? +He promised most emphatically before the election that if he were in +power as Prime Minister when this Colonial Conference took place, he +would not grant preference to the Colonies. On many occasions the +right hon. gentleman said that not one, but two elections would be +necessary before he would be entitled to take that tremendous step. I +have the right hon. gentleman's words here. Speaking at Manchester in +January 1905, the right hon. gentleman said: "If that scheme were +carried out, I do not see that we could be called on to decide the +colonial aspect of this question until not only one, but two elections +have passed." Yet the right hon. gentleman is prepared, I presume, to +join in a vote of censure on his Majesty's Government for not granting +that preference which he himself was prohibited from granting by the +most precise and particular engagement. + +Is it a vote of censure on the Government at all? Is it not really a +vote of censure on the general election? Is it not a cry of petulant +vexation at the natural, ordinary, long-expected sequence of events? + +The right hon. gentleman[4] who moved the Resolution made a very mild +and conciliatory speech. But he confined himself to generalities. He +avoided anything like a statement of concrete proposals which he +thinks the Government ought to adopt. Those who take part in this +controversy nowadays avoid any statement of the concrete proposals +that would follow if their view were adopted. We are told what a +splendid thing preference is, what noble results it would achieve, +what inexpressible happiness and joy it would bring to all parts of +the Empire and to all parts of the earth, what wealth would be +created, how the Exchequer would gain, and how the food of the people +would cheapen in price. But, though the Government is blamed for not +acting on these suggestions, we are never told what is the schedule of +taxes which it is proposed to introduce to give effect to these +splendid and glittering aspirations. + +It is perfectly impossible to discuss colonial preference apart from +the schedule of duties on which it is to be based. It is idle to +attempt to discuss it without a definite proposal as to the subjects +of taxation and as to the degree to which those different subjects are +to be taxed. And the right hon. gentleman the Member for West +Birmingham, when he dealt with this question, felt that in common +fairness he must be precise and definite. We know what he proposed in +the way of taxation on corn, meat, fruit, and dairy produce. What we +want to know is this. Is that tariff before us now? Do the Opposition +stand by the right hon. Member for West Birmingham, or do they abandon +him? That is what the House and the Government want to know--and that +is what the Colonies want to know. It is indispensable to the +discussion of this question that there should be a clear statement +from the Leader of the Opposition whether or not we are to regard the +Glasgow preferential tariff of the right hon. Member for West +Birmingham as still current as a practical policy. + +Then the House has been told that the Government might have given a +preference on dutiable articles. Such a preference would introduce +into our fiscal system an entirely new, and, as the Government think, +the wholly vicious feature of discriminating between one class of +producers and another. The whole basis of our financial and fiscal +policy is, that it draws no distinction whatever between different +classes of producers, whether they reside here or abroad, whether they +live in foreign countries or in our Colonies. I am quite prepared to +state that proposition in its simplest form. That is the fundamental +principle of our fiscal system, and there is no discrimination. We +have but one measure to give to those who trade with us--the just +measure of equality, and there can be no better measure than that. + +We are charged with pedantry in dealing with the Colonial Conference, +through not making some concession upon existing dutiable articles. +The Colonial representatives, when they asked for a preference on wine +and tobacco, did not ask for it because it was of value to them by +itself. They knew well that the operation of such a preference must be +unfair and unequal. They knew well that Canada, which has the most +solid claims upon us for a preferential recognition, would receive no +benefit from such a preference. But the Colonial representatives of +South Africa asked for a preference on wine and tobacco in order that, +as they avowed with candour, we should "concede the principle." That +is a perfectly proper proceeding on their part; it is the natural way +of advancing the views which they hold, because it would lead up to +the larger principle and the larger policy. + +But the Government are opposed in this case to "the larger policy." +The Government sit now on these Benches because they are opposed to it +as a Government and as a Party. It is one of the fundamental +conditions of our existence that we are opposed to such a policy. How, +then, by any process of argument, can the Government be censured for +not making an exception which must inevitably have led to and would +avowedly have been used for the breaking of the great rule to which +they have committed themselves? + +It is a dangerous thing in this controversy, with the ugly rush of +vested interests always lying in the wake of the Protectionist +movement to be considered, to make even verbal concessions. Some time +ago I made a speech in which I said that there was no objection to the +extension of inter-colonial preference. By this I meant the reduction +of duties between Colonies which have already a discriminating tariff; +and it seemed to me in such a case that there is a net reduction of +duty to the good. I do not see any objection to that, because under +the most-favoured-nation principle we gain any advantage which is +gained by either party to the transaction. In any case, the sums +involved in inter-colonial preference at the present time are +extremely small, and, however that might be, the matter is one which +is wholly outside our control, because we have no authority over the +Colonies in this respect, and we may just as well look pleasant about +it and accord a sympathetic attitude to such a process. + +Yes; but let those who reproach us with pedantry and with not showing +a sympathetic desire to meet the Colonies listen to this: When such a +statement is made by a Minister, is it accepted as a desire on the +part of the Government to extend sympathetic treatment to the +Colonies? Not at all. It is taken as an admission, and used for the +purpose of trying to pretend that the Government have abandoned the +principle of their opposition to the larger question of Imperial +preference. If, although we think them unsatisfactory, we were, out of +complaisance, to accord the small preferences suggested upon dutiable +articles, we should be told in a minute that we had given up every +logical foothold against preference, and that nothing prevented us +imposing a tax on bread and meat except our inability to follow the +drift of our own arguments. + +I have referred to preference, but there is another proposal. The +right hon. gentleman the Member for St. George's, Hanover Square, put +forward a proposal earlier in the year, and it was renewed in a +slightly different form by Mr. Deakin[5] at the Conference. The +proposal was to impose a 1 per cent. _ad valorem_ surtax on all +foreign merchandise coming into the ports of the British Empire. That +is the proposal which has been put forward as the least objectionable +form of the preferential proposals, and it has been said of it that it +was the least objectionable because it gave no loophole for the +corruption which may spring up in the wake of the other proposals. + +Let me ask the House to examine this proposal for a moment. Has any +serious, civilised Government--I ask for information--ever been to the +pains and trouble of erecting round their coasts a tariff, with all +its complications, with the need of exacting certificates of origin on +every class of goods, with the need of demanding strict assessment of +all commodities brought to their shores--has any nation ever erected +the vast and complicated network which would be involved in such a +duty, simply for the paltry purpose of imposing a duty of 1 per cent.? +I say there is no argument and no reason for such a course, and the +only argument which could justify it is the argument used by Dr. +Smartt at the Colonial Conference when he said (page 514 of the Blue +Book), "The foreigner pays, and we do not." Mr. Deakin felt the force +of the objection which would be entertained in this country to +introducing such a tariff as the right hon. gentleman has proposed, +simply for fiscal purposes, and he proceeded to say that Great +Britain, if she was a party to such a bargain, should be permitted to +raise the money in her own way, and to contribute her proportion to +the common fund. That was a great concession to the self-government of +the Mother Country. + +There is no doubt a great difference between subventions and +preferences. A subvention may be raised by a perfectly orthodox fiscal +process. No more money is taken from the taxpayer than is required. +The whole yield of the tax by which the subvention may be raised +certainly goes to the Exchequer, and when the subvention is paid to +the foreign or Colonial Government, it does not go, as a preference +would go, to benefit particular interests in the Colony, but it goes +to the Government of the Colony for the general purposes of State, and +not for private advantage on either side. Therefore it seems to me +that the method of subvention is on all grounds to be preferred to the +method of preference. + +It is of course necessary, however, in examining a question of +subvention to look at it on its merits. This proposal of 1 per cent. +put forward by Mr. Deakin carried the support of the official +spokesman of the Opposition. Let us look at it on its merits. Look +first at the proportions on which this new fund was to be subscribed. +Canada was "to dedicate"--that was the expression used by Mr. +Deakin--L400,000, New Zealand L20,000, Newfoundland L6,000, Cape +Colony L40,000, Natal L26,000, Great Britain L4,500,000, and +Australia--the proposing body--what was she to "dedicate" to this +fund? No more than L100,000 a year, or one forty-fifth part of the +contribution which was to be made by this country. And for what object +was this fund to be accumulated? It is hard enough for the Chancellor +of the Exchequer to raise the money to carry on so great an +establishment as this country is forced necessarily to maintain. But +here is a proposal to raise no less than L4,500,000 of extra taxation. +For what objects? For objects not specified, for objects not yet +discovered, for objects which could not be stated by those who made +the proposal. The right hon. gentleman said that there was to be a +meeting of the representatives of the different Colonies in the +different great cities of the Empire--one different great city each +year for seven years, excluding London, where there was to be no +meeting, and they were to search for a method of spending this money. +Such plans have only to be stated to fall to pieces. + +The House will see that the real essential fallacy of the +protectionist proposal is the idea that taxation is a good thing in +itself, that it should be imposed for the fun of the thing, and then, +having done it for amusement, we should go round afterwards and look +for attractive methods of expenditure in order to give support to the +project. These are the actual proposals made to us at the Colonial +Conference. These are the sort of proposals in respect of which we +are, forsooth, to be censured because we have not found it possible in +the name of the Government of this country to give our assent to +them. + +I will submit a proposition to the House as a broad, general rule. I +daresay the Leader of the Opposition may rake up some ingenious, hard +case in conflict with it; but as a broad, general rule I believe it +will be found true to say that there is no power in a Government to +impose indirect taxation outside the limits of its territorial +sovereignty. Although I am quite ready to admit that, by sudden and +unexpected alterations of the tariff, temporary advantage might be +gained, and some share of the wealth of other people and other +countries might be netted for this or that set of traders within your +own border, in the long run the whole yield of any tax, export or +import, will come home to the people of that country by whom it is +imposed. It will come home plus the whole cost of collecting the tax, +and plus, further, the inconvenience and burden of the network of +taxation which is needed. It will come home to them, if they be +consumers, in the quantity, quality, or price of the articles they +consume, and, if exporters, in the profit, convenience, or reserve +power of the business which they conduct. + +There is no parity between the sacrifices demanded of the Mother +Country and the proposals of preference made by the various Colonies. +To them it is merely a fresh application of their existing fiscal +system. To us it is a fiscal revolution. To them it is a mere +rewriting of their schedules to give an increased measure of +protection to their home producers. To us it is a tax on food, and, as +I assert again and again, upon raw material, and thus upon all the +industries of these islands. If the Conference has established one +thing clearly it is this, that none of the great self-governing +Colonies of the British Empire are prepared to give us effective +access to their own markets in competition with their home producers. +That was established with absolute clearness; and even if they were +prepared to give us effective access to their home markets, I submit +to the House that, having regard to the great preponderance of our +foreign trade as against our Colonial trade, it would not be worth our +while to purchase the concession which they would then offer at the +cost of disturbing and dislocating the whole area of our trade. +Therefore, we propose to adhere, and are prepared if necessary to be +censured for adhering to our general financial system, which is +governed by the rule that there should be no taxation except for +revenue, and based on the commercial principle of the equal treatment +of all nations, and the most-favoured-nation treatment from those +nations in return. + +Important as are the economical arguments against a preferential +policy, they are in my opinion less grave than the political +disadvantages. On other occasions I have addressed the House on the +grave danger and detriment to the working of our Colonial system which +must follow the intermingling of the affairs of the British Empire in +the party politics and financial politics of this country. To +establish a preferential system with the Colonies involving +differential duties upon food is to make the bond of Imperial unity +dependent year after year upon the weather and the crops. + +And there is even a more unstable foundation for Imperial unity. Does +it never occur to right hon. gentlemen opposite that this solution +which they offer of the problem of Imperial unity places the Empire +not on a national, but on a purely party basis, and upon a basis +repudiated by at least half the nation? Some day it may be that they +will return triumphant from a general election. As party politicians +they may rejoice, yet I think a wise statesman would try to win for +the British Empire, our Colonial relations, the same sort of position, +high above the struggle of Parties, which is now so happily occupied +by the Crown and the Courts of Justice, which in less degree, though +in an increasing degree, is coming to be occupied by the fighting +Services. Whatever advantages from a Party point of view, or from the +point of view of gratifying Colonial opinion, may be gained by food +preferences, they would be very small compared with the enormous boon +of keeping the field of Colonial politics separate from the social and +economic issues on which Parties in this country are so fiercely +divided. + +It is possible to take a still wider view of this question. If I quote +the right hon. gentleman the Member for West Birmingham, let me assure +the House that I do not do so for the purpose of making any petty +charge of inconsistency, but because the words which I am going to +read are wise and true words, and stand the test of time. When the +right hon. gentleman spoke at Manchester in 1897, not in the distant +days before the great Home Rule split, but when he was already a +Minister in the Unionist Government, and had been Secretary of State +for the Colonies for nearly two years, he used these words, of the +highest wisdom: "Anything in the direction of an Imperial Commercial +League would weaken the Empire internally and excite the permanent +hostility of the whole world. It would check the free imports of the +food of the people. It is impracticable; but if it were practicable, +and done in the name of the Empire, it would make the Empire odious to +the working people, it would combine the whole world against us, and +it would be a cause of irritation and menace. Our free commerce makes +for the peace of the world." + +Let us then seek to impress year after year upon the British Empire an +inclusive and not an exclusive character. We who sit on this side of +the House, who look forward to larger brotherhoods and more exact +standards of social justice, value and cherish the British Empire +because it represents more than any other similar organisation has +ever represented, the peaceful co-operation of all sorts of men in all +sorts of countries, and because we think it is, in that respect at +least, a model of what we hope the whole world will some day become. +The House has to-night a considerable and important opportunity. If in +rejecting this vote of censure, which is so ill-conceived and so +little deserved, we choose to adopt the Amendment, we shall have +written upon the records of Parliament a profound political truth, +which will not, I think, soon be challenged, and which, I believe, +will never be overthrown. + +FOOTNOTES: + +[4] Mr Lyttelton. + +[5] Prime Minister of the Australian Commonwealth. + + + + +THE HOUSE OF LORDS + +HOUSE OF COMMONS, _June 29, 1907_ + + On June 24, Sir Henry Campbell-Bannerman had moved: + + "That, in order to give effect to the will of the people + as expressed by their elected representatives, it is + necessary that the power of the other House to alter or + reject Bills passed by this House should be so restricted + by law as to secure that within the limits of a single + Parliament the final decision of the Commons shall + prevail." + + This was carried after three days' debate by 315 to 100. + + +I will not venture at any length into an abstract constitutional +discussion upon this Motion, because, after all, we have an extremely +practical issue before us. It seems to me that this great question +must be looked at from three points of view. There is the issue +between the two Houses; there is the issue between the two political +Parties; and then there is the national issue. The quarrel which is +now open between the House of Lords and the House of Commons arises +from two events--the general election of 1906, and the rejection of +the measures of the new Liberal Government, culminating in the +destruction of the Education Bill by the House of Lords at the end of +that year. Either of these events is memorable in itself, but placed +in juxtaposition and considered together they have a multiplied +significance. The general election of 1906 was the most vehement +expression of public opinion which this generation has known; and that +expression of public will was countered in the December of the same +year by the most arbitrary and uncompromising assertion of +aristocratic privilege upon record. + +Let the House think of it. The process of the election of Members of +Parliament is extremely elaborate. The candidates go about the country +for two or three weeks saying all they have to say for themselves in +the different constituencies which they are contesting; at the end of +that exhaustive discussion there is an elaborate process of voting; +the returns are counted with the most scrupulous care; and as the +result 670 Members, representing 6,000,000 of voters and many more who +take a deep interest in public affairs but have no votes, are +returned to the House of Commons in the name of the people of Great +Britain and Ireland. The new Parliament assembles. Scarcely any +question at the election had been more a test question, so far as the +supporters of the Government are concerned, than the question of the +amendment of the education system of the country. A Bill dealing with +education is brought forward as the principal measure of the first +session of the new Parliament. Weeks are occupied in its discussion. +It represents the fulfilment of the election pledges of every Member +who supported it. The Bill is passed by perhaps the largest majority +that ever sent a Bill from this House to another place. + +Nor was it a revolutionary Bill, to turn the world upside down and +inside out; on the contrary, it was a Bill which, if vitiated in any +respect, was vitiated by the element of compromise. Immense +concessions were made in it, and rightly, I think, to conscientious +and agitated minorities. It was a Bill which so moderate and +consistent a statesman as the Duke of Devonshire, of whose ill-health +the House learns with grave concern, urged the House of Lords to pass +into law. + +Sir, the Leader of the Opposition told us the other day that it was +the habit of his Majesty's Government to introduce Bills which they did +not mean to pass. No one--not even the right hon. gentleman +himself--can say that the Government have not earnestly desired to pass +the Education Bill. Every concession that could be conceived was made, +but to what purpose? After the House of Commons had humbled itself +before the House of Lords, after we had gone to the extreme limit of +concession which self-respect, which a proper sense of the dignity of +this House, and a due observance of the pledges of the Liberal Party +permitted, the House of Lords curtly, bluntly, uncharitably, and +harshly flung the Bill out in our faces mutilated and destroyed. I do +not wish to import an element of heat into this discussion, but I +respectfully submit to the Conservative Party that that act on the part +of the House of Lords places them in a new position--a new position in +the sense that never before had their old position been taken up so +nakedly, so brazenly, and so uncompromisingly. + +It is true that we have an excuse put before us with much suavity of +language in these debates--we are told that the House of Lords seeks +to interpret the will of the people, and it is explained that by "the +will of the people," what is meant is the persistent, sub-conscious +will, as opposed to any articulate expression of it. The right hon. +gentleman who leads the Opposition told us that what he meant by the +persistent will was the will of the people expressed continuously over +a period of thirty years. That is what he called "democracy properly +understood." + +Having regard to that part of the question which concerns the issue +between the two Houses, we repudiate emphatically the claim of the +other House to what the French call _faire l'ange_--to "play the +angel," to know better than the people themselves what the people +want, to have a greater authority to speak in the name of the people +than their representatives sent to Parliament by the elaborate process +I have described. To dispute the authority of a newly elected +Parliament is something very like an incitement to violence on the +part of the other House. The noble Lord[6] laughs; but we are anxious +to convince him and his friends that we are in earnest. We go through +all the processes which the Constitution prescribes, we produce an +enormous majority, and we express the opinion of that majority, but +still the noble Lord and other noble Lords, less intelligent, but more +remote, tell us that they are not convinced. What steps do they +suggest that we should take in order to bring home to them the +earnestness of our plea? What steps do they suggest that the people +should take in order to assert their wishes? I hold entirely by what I +said that to dispute the authority of an elected body fresh from its +constituents is a deliberate incitement to the adoption of lawless and +unconstitutional methods. The assertion which the House of Lords made +at the end of last year is an intolerable assertion. I believe the +country is altogether unprepared for it; and I wonder it was thought +worth while to risk an institution which has lasted so many centuries, +in the very skirmish line of Party warfare. + +I am aware there is a special reason for the temerity of the House of +Lords. It is not a very complimentary reason to the Members or the +leaders of the late Government, but it is argued that the Conservative +Party cannot be worse than they are. No matter what they do, nor how +they are hated or reprobated by the country, the Conservative Party +cannot possibly occupy a more humiliating and unpleasant position than +they did after the last two years of the late Administration. +Consequently, having reached the low-water mark of political fortune, +they think they can afford to be a little reckless, and that at the +very worst they will be returned in their present numerical +proportions. + +That is a very natural explanation of their action; but if we for our +part were to accept the assertion lately made by the House of +Lords--an assertion which is the furthest point to which aristocratic +privilege has attained in modern times--that assertion itself would +become only the starting-point for a whole new series of precedents +and of constitutional retrogressions; and worse than that, if by any +chance, having raised this issue, we were to be defeated upon it--if +having placed this Resolution on the records of the House we were to +fail to give effect to it, or were to suffer an electoral reverse as +the conclusion of it--then good-bye to the power of the House of +Commons. All that long process of advance in democratic institutions +which has accompanied the growth of the power of the House of Commons, +and which has also been attended by an expansion of the circles of +comfort and culture among the people of this country--all that long +process which has gone steadily onward for 200 years, and which has +almost exclusively occupied the politics of the nineteenth +century--will have reached its culmination. It will have come in +contact with that barrier of which we have heard so much in this +debate. The tide will have turned, and in the recoil of the waters +they will gradually leave exposed again, altered no doubt by the +conditions of the age, all the old assertions of aristocratic and +plutocratic domination which we had fondly hoped had been engulfed for +ever. + +Hon. gentlemen opposite would be well advised to treat this Resolution +seriously. This Parliament is still young, but there are some things +at which they have laughed which have already become accomplished +facts, I could not have during the past eighteen months listened to +their taunts about the permanence of Chinese labour without reflecting +now with satisfaction that Chinese labour is going. Yes, and other +people may follow. We are only at the beginning of this struggle. We +are not necessarily committed to every detail of the proposal; we are +opening the first lines for a great siege, we have to sap up to the +advanced parallels, to establish our batteries, and at no distant date +open our bombardment. It may be many months before we shall be able to +discern where there is a practicable breach; but the assault will come +in due time. + +The right hon. gentleman opposite[7] said he welcomed this contest +with great confidence. I wonder if the Conservative Party realise, to +use an expressive vulgarism, what they are "letting themselves in for" +when this question comes to be fought out on every platform in every +constituency in the country? They will not have to defend an ideal +Second Chamber; they will not be able to confine themselves to airy +generalities about a bicameral system and its advantages; they will +have to defend _this_ Second Chamber as it is--one-sided, hereditary, +unpurged, unrepresentative, irresponsible, absentee. They will have to +defend it with all its anomalies, all its absurdities, and all its +personal bias--with all its achievements that have darkened the pages +of the history of England. And let me say that weighty constitutional +authorities have not considered that the policy on which we have +embarked in moving this Resolution is unreasonable. Mr. Bagehot says +of the House of Lords: + +"It may lose its veto as the Crown has lost its veto. If most of its +members neglect their duties, if all its members continue to be of one +class, and that not quite the best; if its doors are shut against +genius that cannot found a family, and ability which has not L5,000 a +year, its power will be less year by year, and at last be gone, as so +much kingly power is gone--no one knows how." + +What is the position of the Conservative Party when they attempt to +defend the House of Lords? They are always telling us to imitate the +Colonies; they are always telling us that we ought to adopt the fiscal +systems and other methods employed in the self-governing Colonies; but +what is their unprejudiced view of the relations which are held +between the two Chambers under the bicameral system in the Colonies +and as established by their own Australian Commonwealth Act in the +last Parliament? By that Act they have given power to the Lower +Chamber to over-ride the Upper Chamber in certain circumstances. The +Commonwealth Act says that when the Chambers differ they shall meet +together, and that the majority shall decide, measures being taken, +however, that the numbers of the Upper Chamber shall not be such as +to swamp the opinion of the Lower Chamber. Imitating them, and +following in their footsteps, we have adopted such a plan in the +Transvaal and Orange River Colony Constitutions. + +The Leader of the Opposition asked us yesterday whether the people are +not often wrong, and he proceeded characteristically to suggest that +he always considered them wrong when they voted against him. I am not +prepared to take such a rough-and-ready test of the opinion and of the +mental processes of the British democracy as that. I should hesitate +to say that when the people pronounce against a particular measure or +Party they have not pretty good reasons for doing so. I am not at all +convinced that in 1900 the electors were wrong in saying that the war +should be finished--by those who made it. Even in the last election I +could, I daresay, find some few reasons to justify the decision which +the people then took; and if we should be so unfortunate in the future +as to lose that measure of public confidence now abundantly given to +us, then I shall not be too sure that it will not be our own fault. +Certain am I that we could not take any step more likely to forfeit +the confidence of the people of England, than to continue in office +after we have lost the power to pass effective legislation. + +I will retort the question of the Leader of the Opposition by another +question. Has the House of Lords ever been right? Has it ever been +right in any of the great settled controversies which are now beyond +the reach of Party argument? Was it right in delaying Catholic +emancipation and the removal of Jewish disabilities? Was it right in +driving this country to the verge of revolution in its effort to +defeat the passage of reform? Was it right in resisting the Ballot +Bill? Was it right in the almost innumerable efforts it made to +prevent this House dealing with the purity of its own electoral +machinery? Was it right in endeavouring to prevent the abolition of +purchase in the Army? Was it right in 1880, when it rejected the +Compensation for Disturbance Bill? I defy the Party opposite to +produce a single instance of a settled controversy in which the House +of Lords was right. + +[An honourable Member: What about Home Rule?] + +I expected that interruption. That is not a settled controversy. It is +a matter which lies in the future. The cases I have mentioned are +cases where we have carried the law into effect and have seen the +results, and found that they have been good. + +Let me remind the House that, but for a lucky accident, but for the +fact that Letters Patent can be issued by the Crown and do not require +the statutory assent of Parliament, it would very likely have been +impossible for this Government to have made the constitutional +settlement in the Transvaal and in the Orange River Colony, because +the Constitutions would probably have been mutilated or cast out by +the House of Lords, and the Executive Government would have found +itself responsible for carrying out the government of Colonies on +lines of which it wholly disapproved, and after their own policy had +been rejected. + +I proceed to inquire on what principle the House of Lords deals with +Liberal measures. The right hon. Member for Dover[8] by an imaginative +effort assures us that they occupy the position of the umpire. Are +they even a sieve, a strainer, to stop legislation if it should reveal +an undue or undesirable degree of Radicalism or Socialism? Are they +the complementary critic--the critic who sees all the things which the +ordinary man does not see? No one can maintain it. The attitude which +the House of Lords adopts towards Liberal measures is purely tactical. +When they returned to their "gilded Chamber" after the general +election they found on the Woolsack and on the Treasury Bench a Lord +Chancellor and a Government with which they were not familiar. When +their eyes fell upon those objects, there was a light in them which +meant one thing--murder; murder tempered, no doubt, by those +prudential considerations which always restrain persons from acts +which are contrary to the general feeling of the society in which they +live. But their attitude towards the present Government has from the +beginning been to select the best and most convenient opportunity of +humiliating and discrediting them, and finally of banishing them from +power. + +Examine, in contrast with that of the Education Bill, their treatment +of the Trades Disputes Bill. Lord Halsbury described that Bill as +outrageous and tyrannous, and said it contained a section more +disgraceful than any that appeared in any English Statute. On what +ground then did they pass that Bill, if it was not the ground of +political opportunism and partisanship? What safeguard can such a +Second Chamber be to the commercial interests of this country? Is it +not clear that they are prepared to sacrifice, if necessary, what they +consider to be the true interests of the country in order to secure an +advantage for the political Party whose obedient henchmen they are? +The Trades Disputes Bill was a very inconvenient measure for the +Conservative Party to leave open, because so long as it was left open +a great mass of democratic opinion was directed against them. And so +it was passed. On the other hand, the Education Bill was very +inconvenient for the Liberal Party to leave open, because they are +supported by Catholics and Nonconformists, and to bring in an +Education Bill to satisfy those two extremes is not to solve a +problem, but to solve a double acrostic. So that Bill was not passed. +Upon a measure which it would be inconvenient to the Liberal Party to +leave open the House of Lords rejected all compromise. Upon a measure +which it would be inconvenient for the Conservative Party to leave +open, they submitted at once--their action being irrespective of +merits in either case. That, I suppose, is what the Leader of the +Opposition called "an averaging machinery." + +I press these points in order to justify me in making this statement, +that the House of Lords, as it at present exists and acts, is not a +national institution, but a Party dodge, an apparatus and instrument +at the disposal of one political faction; and it is used in the most +unscrupulous manner to injure and humiliate the opposite faction. When +Conservative Members go about the country defending a Second Chamber, +let them remember that this is the kind of Second Chamber they have to +defend, and when they defend the veto let them remember that it is a +veto used, not for national purposes, but for the grossest purposes of +unscrupulous political partisanship. + +I have dealt with the issues between Houses, and I come to that +between Parties. Great changes in a community are very often +unperceived; the focus of reality moves from one institution in the +State to another, and almost imperceptibly. Sometimes the forms of +institutions remain almost the same in all ceremonial aspects, and yet +there will be one institution which under pretentious forms is only +the husk of reality, and another which under a humble name is in fact +the operative pivot of the social system. Constitutional writers have +much to say about the estates of the realm, and a great deal to say +about their relation to each other, and to the Sovereign. All that is +found to be treated upon at length. But they say very little about the +Party system. And, after all, the Party system is the dominant fact in +our experience. Nothing is more striking in the last twenty-five years +than the growth and expansion of Party organisation, and the way in +which millions of people and their votes have been woven into its +scope. + +There are two great characteristics about the Party institutions of +this country: the equipoise between them, and their almost incredible +durability. We have only to look at the general elections of 1900 and +1906. I do not suppose any circumstances could be more depressing for +a political Party than the circumstances in which the Liberal Party +fought the election in 1900, except the circumstances in which the +Conservative Party fought the election of 1906. At those two +elections, what was the salient fact? The great mass of the voters of +each political Party stood firm by the standard of their Party, and +although there was an immense movement of public opinion, that +movement was actually effected by the actual transference of a +comparatively small number of votes. + +When Parties are thus evenly balanced, to place such a weapon as the +House of Lords in the hands of one of the Parties is to doom the other +to destruction. I do not speak only from the Party point of view, +although it explains the earnestness with which we approach this +question. It is a matter of life and death to Liberalism and +Radicalism. It is a question of our life or the abolition of the veto +of the House of Lords. But look at it from a national point of view. +Think of its injury to the smooth working of a Liberal Government. At +the present time a Liberal Government, however powerful, cannot look +far ahead, cannot impart design into its operations, because it knows +that if at any moment its vigour falls below a certain point another +body, over which it has no control, is ready to strike it a blow to +its most serious injury. + +It comes to this, that no matter how great the majority by which a +Liberal Government is supported, it is unable to pass any legislation +unless it can procure the agreement of its political opponents. +Observe the position in which the present Executive Government is +consequently placed. Take only the question of passive resistance. The +action of the House of Lords at the present time forces the Executive +Government to lock up in prison men with whose action they entirely +sympathise and whose grievance they have faithfully promised to +redress. Such a position is intolerable. Indeed, I am sure that if +right hon. gentlemen opposite would only utilise that valuable gift of +putting themselves in imagination in the position of others, they +would see that no self-respecting men could continue to occupy such a +position except with the object of putting an end to it for ever. + +Much might be said for and against the two-Party system. But no one +can doubt that it adds to the stability and cohesion of the State. The +alternation of Parties in power, like the rotation of crops, has +beneficial results. Each of the two Parties has services to render in +the development of the national life; and the succession of new and +different points of view is a real benefit to the country. A choice +between responsible Ministries is a great strength to the Crown. The +advantage of such a system cannot be denied. Would not the ending of +such a system involve a much greater disturbance than to amend the +functions of the House of Lords? Is there not a much greater cataclysm +involved in the breakdown of the constitutional organisation of +democracy--for that is the issue which is placed before us--than would +be involved in the mere curtailment of the legislative veto which has +been given to another place? + +I ask the House what does such a safeguard as the House of Lords mean? +Is it a safeguard at all? Enormous powers are already possessed by the +House of Commons. It has finance under its control, it has the +Executive Government; the control of foreign affairs and the great +patronage of the State are all in the power of the House of Commons at +the present time. And if you are to proceed on the basis that the +people of this country will elect a mad House of Commons, and that the +mad House of Commons will be represented by a mad Executive, the House +of Lords is no guarantee against any excesses which such a House of +Commons or such an Executive might have in contemplation. Whatever you +may wish or desire, you will be forced to trust the people in all +those vital and fundamental elements of government which in every +State have always been held to involve the practical stability of the +community. + +Is the House of Lords even a security for property? Why, the greatest +weapon which a democracy possesses against property is the power of +taxation, and the power of taxation is wholly under the control of +this House. If this House chooses, for instance, to suspend payment to +the Sinking Fund, and to utilise the money for any public purpose or +for any social purpose, the House of Lords could not interfere. If the +House of Commons chose to double taxation on the wealthy classes, the +House of Lords could not interfere in any respect. Understand I am not +advocating these measures; what I am endeavouring to show to the House +is that there is no real safeguard in the House of Lords even in +regard to a movement against property. + +But surely there are other securities upon which the stability of +society depends. In the ever-increasing complexities of social +problems, in the restrictions which are imposed from day to day with +increasing force on the action of individuals, above all, in the +dissemination of property among many classes of the population, lie +the real elements of stability on which our modern society depends. +There are to-day, unlike in former ages, actually millions of people +who possess not merely inert property, but who possess rent-earning, +profit-bearing property; and the danger with which we are confronted +now is not at all whether we shall go too fast. No, the danger is that +about three-fourths of the people of this country should move on in a +comfortable manner into an easy life, which, with all its ups and +downs, is not uncheered by fortune, while the remainder of the people +shall be left to rot and fester in the slums of our cities, or wither +in the deserted and abandoned hamlets of our rural districts. + +That is the danger with which we are confronted at the present moment, +and it invests with a deep and real significance the issue which is +drawn between the two Parties to-night. It is quite true that there +are rich Members of the Liberal Party, and there are poor men who are +supporters of the Conservative Party; but in the main the lines of +difference between the two Parties are social and economic--in the +main the lines of difference are increasingly becoming the lines of +cleavage between the rich and the poor. Let that reflection be with +us in the struggle which we are now undertaking, and in which we shall +without pause press forward, confident of this, that, if we persevere, +we shall wrest from the hands of privilege and wealth the evil, ugly, +and sinister weapon of the Peers' veto, which they have used so ill so +long. + +FOOTNOTES: + +[6] Lord Robert Cecil. + +[7] Mr. Balfour. + +[8] Mr. Wyndham. + + + + +THE DUNDEE ELECTION + +KINNAIRD HALL, DUNDEE, _May 14, 1908_ + + +A new Government has come into being under a Prime Minister who, like +his predecessor, is tied to Scotland by strong and intimate bonds. +Give him a fair chance. Give the Government which he has brought into +being the opportunity of handling the great machinery of State. Be +assured that, if you do, they will employ it for the greatest good of +the greatest number. I am well satisfied at what has taken place since +I have been in Dundee. I see a great concentration of forces +throughout the constituency. I see the opportunity of retrieving, and +more than retrieving, the injury which has been done to the cause of +progress and reform by elections in other parts of our island. + +Ah, but, a very sad thing has happened; an awful thing has +happened--the Liberal Party has gone in for Home Rule. _The Scotsman_ +is shocked, _The Times_ is speechless, and takes three columns to +express its speechlessness; _The Spectator_, that staid old weekly, +has wobbled back to where it never should have wobbled from; the +Ulster Unionists declare that the Government has forfeited all the +confidence that they never had in it, and thousands of people who +never under any circumstances voted Liberal before are saying that +under no circumstances will they ever vote Liberal again. And I am +supposed to be responsible for this revolution in our policy. + +Why, the statements I have made on the Irish question are the logical +and inevitable consequence of the Resolution which was passed by the +House of Commons, in which every member of the Government voted, which +was carried by an enormous majority--more than 200--a month ago[9]--a +Resolution which, after explaining the plain and lamentable evils +which can be traced to the existing system of government in Ireland, +affirmed that the remedy for those evils would be found in a +representative body with an Executive responsible to it, subject to +the supreme authority of the Imperial Parliament. + +The Irish question at the present time occupies a vastly different +position to what it did in the year 1886. Ever since 1880 the +attention of Parliament has been devoted constantly to Ireland, and +the attention of Parliament, when devoted constantly to one object, is +rarely fruitless. The twenty-five years that have passed have seen +great changes in Ireland. We have seen a great scheme of local +government, which Lord Salisbury said would be more disastrous than +Home Rule itself, actually put into force. We have seen the scheme of +land purchase, which in the year 1886 did more to injure the Home Rule +Bill than anything else, actually carried, not indeed to a complete +conclusion, but carried into practical effect by a Unionist +Administration. These are great events; and their consequences, I +think, ought to encourage us to move forward, and not to move back. +They have produced results in Ireland which are beneficent, and the +Irish question no longer presents itself in the tragic guise of the +early eighties. They have produced an effect on Great Britain too. All +over our country people have seen Bills which they were told +beforehand would be ruinous to the unity and integrity of the United +Kingdom--Land Bills and Local Government Bills--passed into law; and +so far from the dire consequences which were apprehended from these +measures, they have found--you here have found--that great good has +resulted from that legislation. Many people are encouraged by what has +taken place to make a step forward in the future; and I think if we +need to look for any further encouragement, we should find it in the +great and undisputed triumph which, under the mercy of Heaven, has +attended our policy in South Africa, and has resulted in bringing into +the circle of the British Empire a strong and martial race, which +might easily have been estranged for ever. + +The Irish polity finds its fellow nowhere in the world. It is a +Government responsible neither to King nor people. It is not a +democratic Government, nor an autocratic Government, nor even an +oligarchical Government. It is a Government hag-ridden by forty-one +administrative Boards, whose functions overlap one another and +sometimes conflict with one another. Some are fed with money from the +Consolidated Fund, some are supplied by vote of the House of Commons, +some are supplied from savings from the Irish Development grant. Some +of these Boards are under the Viceroy, some under the Chief Secretary, +some under Treasury control, and some are under no control at all. The +administration resulting from that system is costly, inefficient, +unhandy beyond all description: a mighty staff of officials and +police; a people desperately poor; taxation which rises automatically +with every increase in the expenditure of this vast and wealthy +island; and a population which dwindles tragically year by year. Add +to all this a loyalist caste, capable and well-organised, who are +taught generation after generation to look for support not to their +own countrymen, but to external force derived from across the sea. +There exists in effect in Ireland at the present time almost exactly +the same situation which would have grown up in South Africa, if we +had not had the wit and the nerve to prevent it. Take the whole of +this situation as I have described it, thrust it into the arena of +British politics to be the centre of contending factions, and the +panorama of Irish government is complete. + +With these facts before us, upon the authority of men like Lord +Dunraven, Sir Joseph West-Ridgeway, Sir Antony MacDonnell, Lord +Dudley, and others who have served the Crown in Ireland--is it +wonderful that we should refuse to turn our eyes away from the vision +of that other Ireland, free to control her own destiny in all that +properly concerns herself, free to devote the native genius of her +people to the purposes of her own self-culture--the vision of that +other Ireland which Mr. Gladstone had reserved as the culminating +achievement of his long and glorious career? Is it wonderful that we +should refuse to turn our eyes away from that? No; I say that the +desire and the aim of making a national settlement with Ireland on +lines which would enable the people of that country to manage their +own purely local affairs, is not an aim that can be separated from the +general march of the Liberal army. If I come forward on your platform +here at Dundee it is on the clear understanding that I do not preclude +myself from trying to reconcile Ireland to England on a basis of +freedom and justice. + +I said just now that this was an important election. Yes, the effect +upon his Majesty's Government and upon the Liberal Party for good or +ill from this election cannot fail to be far-reaching. There are +strong forces against us. Do not underrate the growing strength of the +Tory reaction now in progress in many of the constituencies in +England. I say it earnestly to those who are members of the Labour +Party here to-day--do not underrate the storm which is gathering over +your heads as well as ours. I am not afraid of the forces which are +against us. With your support we shall overwhelm them--with your +support we shall bear them down. Ah, but we must have that support. + +It is not the enemy in front that I fear, but the division which too +often makes itself manifest in progressive ranks--it is that division, +that dispersion of forces, that internecine struggle in the moments of +great emergency, in the moments when the issue hangs in the +balance--it is that which, I fear, may weaken our efforts and may +perhaps deprive us of success otherwise within our grasp. + +There are cross-currents in this election. You cannot be unconscious +of that. They flow this way and that way, and they disturb the clear +issue which we should like to establish between the general body of +those whose desire it is to move forward, and those who wish to revert +to the old and barbarous prejudices and contentions of the past--to +the fiscal systems and to the methods of government and +administration, and to the Jingo foreign policies across the seas, +from which we hoped we had shaken ourselves clear. + +I want to-night to speak about these cross-currents; and let me first +say a word about Socialism. There are a great many Socialists whose +characters and whose views I have much respect for--men some of whom I +know well, and whose friendship I enjoy. A good many of those +gentlemen who have delightful, rosy views of a noble and brilliant +future for the world, are so remote from hard facts of daily life and +of ordinary politics that I am not very sure that they will bring any +useful or effective influence to bear upon the immediate course of +events. To the revolutionary Socialist, whether dreamer or politician, +I do not appeal as the Liberal candidate for Dundee. I recognise that +they are perfectly right in voting against me and voting against the +Liberals, because Liberalism is not Socialism, and never will be. +There is a great gulf fixed. It is not only a gulf of method, it is a +gulf of principle. There are many steps we have to take which our +Socialist opponents or friends, whichever they like to call +themselves, will have to take with us; but there are immense +differences of principle and of political philosophy between our views +and their views. + +Liberalism has its own history and its own tradition. Socialism has +its own formulas and aims. Socialism seeks to pull down wealth; +Liberalism seeks to raise up poverty. Socialism would destroy private +interests; Liberalism would preserve private interests in the only way +in which they can be safely and justly preserved, namely, by +reconciling them with public right. Socialism would kill enterprise; +Liberalism would rescue enterprise from the trammels of privilege and +preference. Socialism assails the pre-eminence of the individual; +Liberalism seeks, and shall seek more in the future, to build up a +minimum standard for the mass. Socialism exalts the rule; Liberalism +exalts the man. Socialism attacks capital; Liberalism attacks +monopoly. + +These are the great distinctions which I draw, and which, I think, you +will agree I am right in drawing at this election between our +respective policies and moods. Don't think that Liberalism is a faith +that is played out; that it is a creed to which there is no expanding +future. As long as the world rolls round, Liberalism will have its +part to play--grand, beneficent, and ameliorating--in relation to men +and States. + +The truth lies in these matters, as it always lies in difficult +matters, midway between extreme formulas. It is in the nice adjustment +of the respective ideas of collectivism and individualism that the +problem of the world and the solution of that problem lie in the years +to come. But I have no hesitation in saying that I am on the side of +those who think that a greater collective element should be introduced +into the State and municipalities. I should like to see the State +undertaking new functions, stepping forward into new spheres of +activity, particularly in services which are in the nature of +monopolies. There I see a wide field for State enterprise. But when we +are told to exalt and admire a philosophy which destroys individualism +and seeks to replace it absolutely by collectivism, I say that is a +monstrous and imbecile conception, which can find no real acceptance +in the brains and hearts--and the hearts are as trustworthy as the +brains--in the hearts of sensible people. + +Now I pass over the revolutionary Socialists, who, I admit, if they +feel inclined, are justified in throwing away their votes on Saturday +next, and I come to the Labour and to the Trade Union element in our +midst. There I have one or two words to say of rather a straight +character, if you don't object, and which, I hope, will be taken in +good part, and will be studied and examined seriously. Labour in +Britain is not Socialism. It is quite true that the Socialistic +element has imposed a complexion on Labour, rather against its will, +and is now supported in its action by funds almost entirely supplied +by Trade Unions. But Trade Unions are not Socialistic. They are +undoubtedly individualist organisations, more in the character of the +old Guilds, and lean much more in the direction of the culture of the +individual than in that of the smooth and bloodless uniformity of the +mass. Now, the Trade Unions are the most respectable and the most +powerful element in the labour world. They are the social bulwarks of +our industrial system. They are the necessary guard-rails of a highly +competitive machine, and I have the right, as a member of his +Majesty's Government, to speak with good confidence to Trade +Unionists, because we have done more for Trade Unionists than any +other Government that has ever been. + +How stands the case of the Trade Unionists? Do they really believe, I +put this question to them fairly--do they really believe that there is +no difference whatever between a Tory and a Liberal Government? Do +Trade Unionists desire the downfall of the existing Liberal +Government? Would they really like to send a message of encouragement +to the House of Lords--for that is what it comes to--to reject and +mutilate Liberal and Radical legislation--and Labour legislation now +before Parliament? Would they send such a message of encouragement to +the House of Lords as this--"House of Lords, you were right in your +estimate of public opinion when you denied the extension of the +Provision of Meals to School Children Bill to Scotland, when you threw +out the Scottish Land Valuation Bill, when you threw out the Scottish +Small Holders Bill--when you did all this you were right." Do you wish +to send that message to the House of Lords? But that will be the +consequence of every vote subtracted from the Liberal majority. + +Why, gentlemen, let me return to the general current of events. What +is the Government doing at present, and what has it done in its brief +existence? Within the limits under which it works, and under the +present authority of the House of Lords, what has it done and what is +it doing for Trade Unionists? It has passed the Trades Disputes Act. +The Workmen's Compensation Act has extended the benefits of +compensation to six million persons not affected by previous +legislation. The qualification of Justices of the Peace--the citizens' +Privy Councillorship, as I call it--has been reduced so as to make it +more easy for persons not possessed of this world's goods to qualify +to take their place on the civic Bench. You know the land legislation +for England, which is designed to secure that the suitable man who +wants a small parcel of land to cultivate for his own profit and +advantage shall not be prevented from obtaining it by feudal +legislation, by old legal formalities or class prejudice. And is the +Licensing Bill not well worth a good blow struck, and struck now, +while the iron is hot? Then there is the Miners' Eight Hours Bill, a +measure that has been advocated by the miners for twenty years, and +justified by the highest medical testimony on humanitarian and +hygienic grounds. It is costing us votes and supporters. It is +costing us by-elections, yet it is being driven through. Have we not a +right to claim the support of the Trade Unionists who are associated +with the miners? Don't they feel that this measure is hanging in the +balance, not in the House of Commons, but in the balance in the House +of Lords, which attaches to by-elections an importance which, in their +arrogant assertion, entitles them to mutilate or reject legislation, +even although it comes to them by the majority of a Parliament newly +elected on a suffrage of six millions. Then there is the question of +old-age pensions, a question that has been much misused and mishandled +in the past. + +That was a pledge given by our opponents to win the election of 1895, +and after the lapse of thirteen years of toil and stress, the Liberal +Party is able to take it up, and will implement it in an effective +fashion. Now, is there one of all these subjects which does not +command the support of Trade Unionists and responsible Labour leaders? +The Government is fighting for these measures. The Government is +risking its life and power for these and similar objects. The Tory +Party is opposing it on every point. The Tory Party is gaining +popularity from the resistance of the interests which are affected by +the passing of such measures of social reform. The House of Lords is +the weapon of the Tory Party. With that weapon they can make a Liberal +Government ridiculous. Are the Labour leaders, are Trade Unionists, +confronted at this moment with the menace of reaction, deliberately +going to throw in their lot with the House of Lords? I don't think +they will. The record in Labour legislation under the existence of the +present Government is a record which deserves, and will, I believe, +command, the support of the great mass of the labouring classes of our +country. + +But I say, in all seriousness, that if the Liberal Government is on +the one hand confronted by the House of Lords, fortified by sporadic +by-elections, and on the other hand is attacked, abused, derided, by a +section of those for whom it is fighting, then that Government, +whatever its hopes, whatever its energies, whatever its strength, will +be weakened, will perhaps succumb, and will be replaced by another +Government. And by what other Government will it be replaced? There +can be no other result from such a division of progressive forces than +to instal a Tory and Protectionist Government in power. That will not +be fatal to us. Liberalism will not be killed. Liberalism is a +quickening spirit--it is immortal. It will live on through all the +days, be they good days or be they evil days. No! I believe it will +even burn stronger and brighter and more helpful in evil days than in +good--just like your harbour-lights, which shine out across the sea, +and which on a calm night gleam with soft refulgence, but through the +storm flash a message of life to those who toil on the rough waters. + +But it takes a great party to govern Great Britain--no clique, no +faction, no cabal, can govern the forty millions of people who live in +this island. It takes a vast concentration of forces to make a +governing instrument. You have now got a Radical and democratic +governing instrument, and if this Administration is broken, that +instrument will be shattered. It has been recreated painfully and +laboriously after twenty years by courage and fidelity. It has come +into being--it is here. It is now at work, and by legislation and by +the influence which it can exercise throughout the whole world, it is +making even our opponents talk our language, making all parties in the +State think of social reform, and concern themselves with social and +domestic affairs. Beware how you injure that great instrument, as Mr. +Gladstone called it--or weaken it at a moment when the masses of this +country have need of it. Why, what would happen, if this present +Government were to perish? On its tomb would be written: "Beware of +social reform. The labouring classes will not support a Government +engaged in social reform. Every social reform will cost you votes. +Beware of social reform. 'Learn to think Imperially.'" + +An inconclusive verdict from Dundee, the home of Scottish +Radicalism--an inconclusive, or, still more, a disastrous +verdict--would carry a message of despair to every one in all parts of +our island and in our sister island who is working for the essential +influences and truths of Liberalism and progress. Down, down, down +would fall the high hopes of the social reformer. The constructive +plans now forming in so many brains would melt into air. The old +regime would be reinstated, reinstalled. Like the Bourbons, they will +have learned nothing and will have forgotten nothing. We shall step +out of the period of adventurous hope in which we have lived for a +brief spell; we shall step back to the period of obstinate and +prejudiced negations. For Ireland--ten years of resolute government; +for England--dear food and cheaper gin; and for Scotland--the superior +wisdom of the House of Lords! Is that the work you want to do, men of +Dundee? Is that the work to which you will put your precious +franchises--your votes, which have been won for you by so much +struggle in the past? No; I am confident that this city, which has of +its own free will plunged into the very centre of national politics, +will grasp the opportunity now presented; that its command will not be +back, but forward; that its counsel will be not timidity, but courage, +and that it will aim not at dividing, but at rallying the progressive +forces, not at dissipating, but at combining the energies of reform. +That will be the message which you will send in tones which no man can +mistake--so that a keen, strong, northern air shall sweep across our +land to nerve and brace the hearts of men, to encourage the weak, to +fortify the strong, to uplift the generous, to correct the proud. + +In time of war, when an action has been joined for a long time, and +the lines are locked in fierce conflict, and stragglers are coming in +and the wounded drifting away, when the reserves begin to waver here +and there, it is on such an occasion that Scottish regiments have so +often won distinction; it is on these occasions that you have seen +some valiant brigade march straight forward into the battle smoke, +into the confusion of the field, right into the heart of the fight. +That is what you have to do at this moment. "Scotland for ever!" + +Now I turn my argument to the other side of the field, to the other +quarter, from which we are subject to attack; I turn in my appeal from +Trade Unionists, from the Labour men, who ought in all fairness to +recognise the work this Government is doing and back them in their +sore struggle; I turn to the rich and the powerful, to Unionist and +Conservative elements, who, nevertheless, upon Free Trade, upon +temperance, and upon other questions of moral enlightenment, feel a +considerable sympathy with the Liberal Party; I turn to those who say, +"We like Free Trade and we are Liberals at heart, but this Government +is too Radical: we don't like its Radical measures. Why can't they let +well alone? What do they mean by introducing all these measures, all +these Bills, which," so they say, "disturb credit and trade, and +interfere with the course of business, and cause so many +class-struggles in the country?" I turn to those who complain we are +too Radical in this and in that, and that we are moving too quickly, +and I say to them: "Look at this political situation, not as party +men, but as Britons; look at it in the light of history; look at it in +the light of philosophy; and look at it in the light of broad-minded, +Christian charity." + +Why is it that life and property are more secure in Britain than in +any other country in the world? Why is it that our credit is so high +and that our commerce stretches so far? Is it because of the +repressive laws which we impose? Why, gentlemen, there are laws far +more severe than any prevailing in this country, or that have +prevailed here for many years, now in force in great States in Europe, +and yet there is no complete security of life and property +notwithstanding all these repressive laws. Is it because of the House +of Lords, that life and property are secure? Why, orders of +aristocracy more powerful, much more homogeneous, of greater +privileges, acting with much greater energy than our aristocracy, have +been swept away in other countries until not a vestige, or scarce a +vestige, of their existence remains. Is it because of the British +Constitution that life and property are secure? Why, the British +Constitution is mainly British common sense. There never were forty +millions of people dwelling together who had less of an arbitrary and +rigid Constitution than we have here. The Constitution of France, the +Constitution of Germany, the Constitution of the United States are far +more rigid, far better fortified against popular movement, than the +Constitution under which we in these islands have moved steadily +forward abreast of the centuries on the whole to a better state than +any other country. + +I will tell those wealthy and powerful people what the secret of the +security of life and property in Britain is. The security arises from +the continuation of that very class-struggle which they lament and of +which they complain, which goes on ceaselessly in our country, which +goes on tirelessly, with perpetual friction, a struggle between class +and class which never sinks into lethargy, and never breaks into +violence, but which from year to year makes possible a steady and +constant advance. It is on the nature of that class-struggle in +Britain that the security of life and property is fundamentally +reposed. We are always changing; like nature, we change a great deal, +although we change very slowly. We are always reaching a higher level +after each change, but yet with the harmony of our life unbroken and +unimpaired. And I say also to those persons here, to whom I now make +my appeal: wealthy men, men of light and leading have never been all +on one side in our country. There have always been men of power and +position who have sacrificed and exerted themselves in the popular +cause; and that is why there is so little class-hatred here, in spite +of all the squalor and misery which we see around us. There, +gentlemen, lies the true evolution of democracy. That is how we have +preserved the golden thread of historical continuity, when so many +other nations have lost it for ever. That is the only way in which +your island life as you know it, and love it, can be preserved in all +its grace and in all its freedom--can be elevated, expanded, and +illumined for those who will occupy our places when our share in the +world's work is done. + +And I appeal to the leaders of industry and of learning in this city +to range themselves on the side of a policy which will vigilantly seek +the welfare of the masses, and which will strictly refuse to profit +through their detriment; and, in spite of the violence of extremists, +in spite of the harshness of controversy which hard conditions +produce, in spite of many forces which may seem to those gentlemen +ungrateful, I ask them to pursue and persevere in their crusade--for +it is a crusade--of social progress and advance. + +Cologne Cathedral took 600 years to build. Generations of architects +and builders lived and died while the work was in progress. Still the +work went on. Sometimes a generation built wrongly, and the next +generation had to unbuild, and the next generation had to build again. +Still the work went on through all the centuries, till at last there +stood forth to the world a mighty monument of beauty and of truth to +command the admiration and inspire the reverence of mankind. So let it +be with the British Commonwealth. Let us build wisely, let us build +surely, let us build faithfully, let us build, not for the moment, but +for future years, seeking to establish here below what we hope to +find above--a house of many mansions, where there shall be room for +all. + + The result of the election was declared as follows + + Churchill (Liberal) 7,079 + Baxter (Conservative) 4,370 + Stuart (Socialist) 4,014 + Scrymgeour (Prohibitionist) 655 + ----- + Liberal majority 2,709 + ----- + +FOOTNOTES: + +[9] March 30, 1908. + + + + +II + +SOCIAL ORGANISATION + + + PAGE + +MINES [EIGHT HOURS] BILL (July 6, 1908) 173 + +UNEMPLOYMENT (Oct. 10, 1908) 189 + +THE SOCIAL FIELD (Jan. 13, 1909) 211 + +THE APPROACHING CONFLICT (Jan. 30, 1909) 225 + +THE ANTI-SWEATING BILL (April 28, 1909) 239 + +LABOUR EXCHANGES AND UNEMPLOYMENT INSURANCE + (May 19, 1909) 253 + + + + +THE SECOND READING OF THE MINES [EIGHT HOURS] BILL + +HOUSE OF COMMONS, _July 6, 1908_ + + +Whatever arguments may be urged against this measure, no one can say +that the Government have acted with precipitation in bringing it +before the House and the country. It has been debated for twenty +years. Parliaments, Tory and Liberal, have affirmed the principle, and +I do not suppose there ever was a similar reform put forward in this +House upon a greater volume of scientific and accurate information, or +after more prolonged, careful, and sustained scrutiny. If the debate +on the Second Reading has thrown very little new light on this +question, it is because it has been fully and thoroughly explored on +former occasions; and not only has it been fully explored, but it is +now illuminated by the admirable Report which has been presented by +the Departmental Committee appointed last session. + +This Report, while exciting approval on all sides, gives no complete +satisfaction to any. It balances, and weighs, but it does not finally +pronounce. It aims less at deciding this controversy, than at defining +the limits within which its economic aspect may be said to lie. I +think any one who reads the Report with attention will feel, after +careful study, that the limits of the economic controversy are +moderately restricted. We have to consider on the one hand the gross +reduction of one-tenth in the hours of labour of underground workmen, +taking the average over all classes of men and all sorts of mines. And +on the other hand we have as a set-off against that gross reduction +certain very important mitigations which are enumerated in the Report, +to which I shall briefly refer. + +The first economic question which the House has to settle is, whether +these mitigations which are enumerated will have the effect of +overtaking the reduction which is to follow the curtailment of hours, +or, if not, how far they will fall short in overtaking that reduction. + +I do not suppose that any hon. gentleman is likely to change his +opinion on a question of such complexity at this late stage of the +debate, and therefore I shall only refer by name to these mitigations, +bearing in mind how important they are. There are those which depend +on the arrangements of employers, and those which depend on the +volition of the workers. With regard to the employers, there is +improved organisation by methods of haulage and winding, and other +means specified in the Report. There is the more extensive application +of coal-cutting machinery, and the sinking of new pits with modern +appliances, which is progressing in many parts of the country. + +There is the system of double and multiple shifts. The extension of +the system will not be so difficult as has sometimes been supposed. At +the present moment, taking the statistics of 1906, a quarter only of +the workers below ground are employed in mines in which there is only +one coal-getting shift, and in all the mines in which there are two or +more coal-getting shifts the first shift preponderates in number +greatly over the second, and, therefore, in applying this system of +double or multiple shifts, in so far as it is necessary to apply it, +we shall not have to face the difficulty of a complete transformation +in the methods of working a great many of the mines, but it will be a +mere extension of the system which at present exists over a great +portion of the coal-getting area. + +From the side of labour, the mitigations which may be expected as +off-sets to the original reduction are not less important. There is +the increased efficiency, of which we have instances actually on +record in this Report, which has followed from the reduction of hours. +There is the power of the worker, if he chooses, to increase his +earnings on a short day. There is "absenteeism," which has always been +affected by a reduction of hours, and which amounts to 6.6 per cent. +of the working time of the mines, and there is the margin of stoppages +through slack trade and other circumstances, which at present +aggregates 7 per cent. of the working time of the mines. Taking these +last two alone, they aggregate 13 per cent., or considerably more, as +a margin, than the reduction of working time which will be caused by +the operation of this Bill, even when the full operation is reached. + +First of all then, let the House consider carefully whether from these +sources it is possible to overtake the 10 per cent. reduction which, +in the first instance, the Bill imposes. It is a question nicely +balanced; it offers matter for fair argument this way and that, but, +taking all the means of mitigation together, not only singly but +collectively, it is surely very difficult to believe that masters and +men, organised as they are, and working together with good will, and +with ample time to accommodate themselves to new arrangements, will +not be able from all sources to overtake the comparatively small +reduction in hours the Bill will effect. + +I am inclined to an opinion that good use will be made of these +margins, but even if we assume, for the sake of the argument, that +there will be a net reduction in consequence of the passage of this +Bill in the output of coal, that reduction must be temporary and +transient in its character. For fifty years there have been continuous +changes in the conditions of coal-mining in this country. The hours +have been reduced, the conditions of boy labour have been restricted, +wages have been raised, compensation has been provided, and +precautions against accidents have been multiplied. All these changes, +the wisdom of which nobody disputes, may from a purely and crudely +economic standpoint be said to militate against production. We have +heard many prophecies, but what has been the history of the coal +trade? There has been a steady, unbroken expansion of output during +the last fifty years. In the period of ten years ending in 1874, +76,000,000 tons were produced; in the next ten years 112,000,000; in +the next ten years 145,000,000; in the next ten years 172,000,000; and +in the last period of ten years 214,000,000--a figure which has been +greatly exceeded since. + +If it be admitted that there may be a certain reduction in output as a +consequence of this Bill, that reduction must be considered, not by +itself, not in isolation, but in relation to the steady and persistent +movement of coal production for the last fifty years. To me it seems +certain that the small temporary restriction will be lost in the +general tendency to expansion, as the eddy is carried forward by the +stream and the recoiling wave is lost in the advancing tide. + +But these arguments would be wholly vitiated if it could be shown that +the restriction of hours was so violent in its character, so sudden in +its application, so rigid in its methods as, not merely to cause a +certain shrinkage in the volume of the output, but to upset the +economy of the coal-mining industry. In that case there would be not +merely a curtailment which might be mitigated, but we should have +injured and possibly disorganised the industry; and it is at this +point that it is proper for the House to consider the safeguards +introduced by the Government into the Bill. These safeguards are of +the greatest importance. + +There is the safeguard of overtime. Sixty hours a year are permitted. +In districts where men work ten days a fortnight, twelve weeks may be +one hour longer than the usual time allowed by the Bill; and where the +days laboured are only four in the week, fifteen weeks of extended +time will be possible through the provision of overtime. There are +provisions with regard to the labour of certain persons permitted to +remain below ground beyond the legal hours for special purposes, and +there is a power which relaxes the Bill altogether in an emergency +which is likely to delay or arrest the general work of the mine, and, +of course, in any case where there is accident or danger. Finally, if +there should be risk of a corner or an unexpected rise in price, the +Government have power by Order in Council to suspend the whole +operation of the law in order to prevent anything like a serious +crisis arising in the coal trade. + +I cannot bring myself to believe that with all these safeguards it +will not be possible for the coal industry, if given time, to +accommodate itself to the new conditions. It is only two years ago +that I was invited from the benches opposite to contemplate the +approaching ruin of the gold mines of the Rand through the change +introduced in the methods of working. That change has been enforced, +with the result that working expenses have been reduced, and the +standard of production has increased. In making that transition, if +time had not been allowed to tide over the period of change, then, +indeed, you might have had that disaster which hon. gentlemen opposite +have always been ready to apprehend. But there is here to be a gradual +process of adaptation, for which not less than five years is +permitted. + +We are told that positive reasons, and not negative reasons, ought to +be given in support of a measure which regulates the hours of adult +labour--that you ought to show, not that it will do no harm, but that +good will come from it. There are, of course, such reasons in support +of this Bill, but they are so obvious that they have not been dwelt +upon as much as they might have been. The reasons are social reasons. +We believe that the well-being of the mining population, numbering +some 900,000 persons, will be sensibly advanced in respect of health, +industrial efficiency, habits of temperance, education, culture, and +the general standard of life. We have seen that in the past the +shortening of hours has produced beneficial effects in these respects, +and we notice that in those parts of the country where the hours of +coal-mining are shortest, the University Extension lecturers find that +the miners take an intelligent interest in their lectures--and it is +among the miners of Fifeshire that a considerable development in +gardening and also of saving to enable them to own their own houses, +has followed on a longer period of leisure. + +But the general march of industrial democracy is not towards +inadequate hours of work, but towards sufficient hours of leisure. +That is the movement among the working people all over the country. +They are not content that their lives should remain mere alternations +between bed and the factory. They demand time to look about them, time +to see their homes by daylight, to see their children, time to think +and read and cultivate their gardens--time, in short, to live. That is +very strange, perhaps, but that is the request they have made and are +making with increasing force and reason as years pass by. + +No one is to be pitied for having to work hard, for nature has +contrived a special reward for the man who works hard. It gives him an +extra relish, which enables him to gather in a brief space from simple +pleasures a satisfaction in search of which the social idler wanders +vainly through the twenty-four hours. But this reward, so precious in +itself, is snatched away from the man who has won it, if the hours of +his labour are too long or the conditions of his labour too severe to +leave any time for him to enjoy what he has won. + +Professor Marshall, in his "Principles of Economics," says: + +"The influence which the standard of hours of work exerts on economic +activities is partially obscured by the fact that the earnings of a +human being are commonly counted gross; no special reckoning being +made for his wear-and-tear, of which he is himself rather careless. +Further, very little account is taken of the evil effects of the +overwork of men on the well-being of the next generation.... When the +hours and the general conditions of labour are such as to cause great +wear-and-tear of body or mind or both, and to lead to a low standard +of living; when there has been a want of that leisure, rest, and +repose which are among the necessaries for efficiency, then the labour +has been extravagant from the point of view of society at large.... +And, since material wealth exists for the sake of man, and not man for +the sake of material wealth, the replacement of inefficient and +stunted human lives by more efficient and fuller lives would be a gain +of a higher order than any temporary material loss that might have +been occasioned on the way." + +If it be said that these arguments are general, is it not true that +special circumstances differentiate the case of coal-miners from that +of many other industries in this country? Others have spoken of the +heat of the mine, the danger of fire-damp, of the cramped position, of +the muscular exertions of the miner, at work in moist galleries +perhaps a mile under the ground. I select the single fact of +deprivation of natural light. That alone is enough to justify +Parliament in directing upon the industry of coal-mining a specially +severe scrutiny and introducing regulations of a different character +from those elsewhere. + +The hon. Member for Windsor[10] who moved the rejection of this Bill +described it as a reckless and foolhardy experiment. I see the miner +emerging from the pit after eight hours' work with the assertion on +his lips that he, at any rate, has paid his daily debt to his fellow +men. Is the House of Commons now going to say to him, "You have no +right to be here. You have only worked eight hours. Your appearance on +the surface of the earth after eight hours' work is, to quote the hon. +Member, 'a reckless and foolhardy experiment'"? I do not wonder at the +miners' demand. I cannot find it in my heart to feel the slightest +surprise, or indignation, or mental disturbance at it. My capacity for +wonder is entirely absorbed, not by the miners' demand, but by the +gentleman in the silk hat and white waistcoat who has the composure +and the complacency to deny that demand and dispute it with him. + +The hon. Member for Dulwich[11]--himself a convinced protectionist, +with a tariff with 1,200 articles in its schedules in his coat-tail +pocket--has given us a delightful lecture on the importance of +cheapness of production. Think of the poor consumer! Think of the +importance to our industries of cheapness of production! We on this +side are great admirers of cheapness of production. We have reminded +the hon. gentleman of it often; but why should cheapness of production +always be achieved at the expense of the human factor? The hon. +gentleman spoke with anxiety of the possibility of a rise in miners' +wages as a consequence of this Bill. Has he considered the relation of +miners' wages to the selling prices of coal? At the pit's mouth the +underground-workers' wages are only 60 per cent. of the selling price +of coal. Free on board on the Tyne, the proportion is only 38 per +cent. As coal is sold here in the south of England the proportion of +wages is less than one-fifth of the whole price. Is it not clear that +there are other factors at least which require consideration before +you decide to deal with the human factor, which first attracts the +attention of the hon. gentleman? + +What about mining royalties? In all this talk about the importance of +cheap coal to our industries and to the poor consumer we have had no +mention of mining royalties. No. We never mention that. Yet, will the +House believe it, it is estimated that mining royalties impose a toll +of 6 per cent., calculated on the price of coal at the pit's mouth, or +considerably more than half the total diminished production which +could result from this humane Act of labour legislation. + +But we are asked: "Why stop here? Why don't your arguments apply +elsewhere?" and we are told of people whose conditions of life are +worse than some of those of coal-miners. Why stop here? Who ever said +we would stop here? I welcome and support this measure, not only for +its own sake, but much more because it is, I believe, simply the +precursor of the general movement which is in progress all over the +world, and in other industries besides this, towards reconciling the +conditions of labour with the well-ascertained laws of science and +health. If we are told that because we support this measure we shall +be inflicting an injury or injustice on other classes of the +population, I say there is a great solidarity among all classes of +manual labourers. I believe that when they consider this matter they +will see that all legitimate interests are in harmony, that no one +class can obtain permanent advantage by undue strain on another, and +that in the end their turn will come for shorter hours, and will come +the sooner because they have aided others to obtain that which they +desire themselves. + +When the House is asked to contemplate gloomy pictures of what will +follow on this Bill, let them recur to the example of Parliaments gone +by. When the Ten Hours Bill was introduced in 1847, a Bill which +affected the hours of adult males inferentially, the same lugubrious +prophecies were indulged in from both sides of the House. +Distinguished economists came forward to prove that the whole profit +of the textile industry was reaped after the eleventh hour. Famous +statesmen on both sides spoke strongly against the measure. The +Parliament, in 1847, was in the same sort of position as we are to-day +in this respect, but how differently circumstanced in other respects. +That Parliament did not enjoy the wide and accurate statistical +information in every branch of labour which enables us to-day to move +forward with discretion and prudence. They were not able to look to +the general evidences of commercial security and expansion on which +modern politicians can rely. They could not show, as we can show, +overwhelming examples of owlish prophets dazzlingly disproved; they +could not point, as we can point, to scores of cases where not only +increased efficiency, but a positive increase in output has followed +the reduction of the hours of labour. The principle was new, the +future was vague. But the Parliament of those days did not quail. They +trusted to broad, generous instincts of common sense; they drew a +good, bold line; and we to-day enjoy in a more gentle, more humane, +more skilful, more sober, and more civilised population the blessings +which have followed their acts. Now it is our turn. Let us vote for +the Second Reading of this Bill, and in so doing establish a claim +upon the respect of Parliaments to come, such as we ourselves owe to +Parliaments of the past.[12] + +FOOTNOTES: + +[10] Mr. J.F. Mason. + +[11] Mr. Bonar Law. + +[12] This concluded the debate, and the Second Reading was carried by +390 to 120. + + + + +UNEMPLOYMENT + +KINNAIRD HALL, DUNDEE, _October 10, 1908_ + +(From _The Times_, by permission.) + +What is the political situation which unfolds itself to our +reflections to-night? I present it to you without misgivings or +reserve. For nearly three years a Liberal Administration, more +democratic in its character, more widely selected in its _personnel_, +more Radical in the general complexion of its policy, than any that +has previously been known to British history, has occupied the place +of power. During the whole of that period no single serious +administrative mistake, either at home or abroad, has embarrassed or +discredited the conduct of public affairs. Three Parliamentary +Sessions, fruitful beyond precedent in important legislation, have +been surmounted with dignity and dispatch. The authority and influence +of Great Britain among foreign Powers have been prudently guarded, and +are now appreciably augmented, and that authority and influence have +been consistently employed, and will be in the future employed, in +soothing international rivalries and suspicion, in asserting a proper +respect for public law, in preserving a just and harmonious balance +amongst great Powers, and in forwarding as opportunities have served, +whether in the Near East or in the Congo, causes of a generous and +disinterested humanitarianism. + +The British Empire itself has enjoyed under Liberal rule a period of +prosperous tranquillity, favourable both to development and +consolidation; and it is no exaggeration to say that it was never more +strong or more peacefully united than at the present moment. The +confidence which the whole country, irrespective of party, feels in +Sir Edward Grey in the present European crisis, is the measure of our +success in foreign affairs. The gathering of the Convention of a +United South Africa is in itself a vindication of colonial policy. +Each year for which we have been responsible has been marked by some +great and beneficent event which has commanded the acquiescence--or at +least silenced the dissent--of many of our professed opponents. In +1906 the charter of trade unions; in 1907, the conciliation and +settlement of South Africa; in 1908, the establishment of old-age +pensions. These are large matters; they will take their place in the +history book; and on them alone, if necessary, I would confidently +base the claims of his Majesty's Government to respect, if not to +renown, in future times. + +But although we do not meet to-night in any atmosphere of crisis, nor +in any expectation of a general election, nevertheless I feel, and I +dare say you feel too, that we have reached a climacteric in the life +of this Parliament. The next six months will probably determine the +whole remaining fortunes of the Government, and decide whether a +gradual but progressive decline will slowly carry the Administration +in the natural course to the grave where so many others are peacefully +slumbering, or whether, deriving fresh vigour from its exertions, it +will march forward conquering and to conquer. + +I said a few minutes ago that this session had been marked by a +measure of great and cardinal importance. Surely no one will deny the +magnitude and significance of the step which has been taken in the +establishment of a system of old-age pensions. It marks the assertion +in our social system of an entirely new principle in regard to +poverty, and that principle, once asserted, cannot possibly be +confined within its existing limits. Old-age pensions will carry us +all a very long way. They have opened a door which will not soon or +easily be closed. The members of both Houses of Parliament have been +led to the verge of the cruel abyss of poverty, and have been in +solemn session assembled to contemplate its depths and its gloom. All +alike have come to gaze; none have remained unmoved. There are some +distinguished and eminent men, men whose power and experience I cannot +impugn, who have started back appalled by what they have seen, and +whose only idea is to slam the door on the grim and painful prospect +which has been revealed to their eyes. + +But that is not the only spirit which has been awakened in our +country; there are others, not less powerful, and a greater number, +who will never allow that door to be closed; they have got their feet +in it, they are resolved that it shall be kept open. Nay, more, they +are prepared to descend into the abyss, and grapple with its evils--as +sometimes you see after an explosion at a coal mine a rescue party +advancing undaunted into the smoke and steam. Now there is the issue +on which the future of this Parliament hangs--"Forward or back?" +Voices sound loud and conflicting in our ears; the issue, the sharpest +and simplest, the most tremendous that can be put to a generation of +men--"Forward or backward?"--is the issue which confronts us at the +present time, and on it the future of the Government is staked. There +are faint-hearted friends behind; there are loud-voiced foes in front. +The brewer's dray has been pulled across the road, and behind it are +embattled a formidable confederation of vested interests. A +mountainous obstacle of indifference and apathy bars our advance. What +is your counsel? Forward or Back? + +Let it be remembered that aged poverty is not the only evil with +which, so far as our means allow, we have to grapple. What is the +problem of the hour? It can be comprised in one word--Unemployment. +After two years of unexampled trade expansion, we have entered upon a +period of decline. We are not alone in this. A reaction from +overtrading is general all over the world. Both Germany and the United +States are suffering from a similar commercial contraction, and in +both countries, in spite of their high and elaborate protective +tariffs, a trade set-back has been accompanied by severe industrial +dislocation and unemployment. In the United States of America, +particularly, I am informed that unemployment has recently been more +general than in this country. Indeed the financial collapse in the +United States last autumn has been the most clearly marked of all the +causes to which the present trade depression may be assigned. + +It is not yet possible to say that the end of that period of +depression is in sight; but there are some significant indications +which I think justify the hope that it will be less severe and less +prolonged than has been known in other trade cycles, or than some +people were at first inclined to believe. But the problem of +unemployment is not confined to periods of trade depression, and will +not be solved by trade revival; and it is to that problem in its +larger and more permanent aspects that I desire to draw your attention +for a short time to-night. + +There is no evidence that the population of Great Britain has +increased beyond the means of subsistence. On the contrary, our wealth +is increasing faster than our numbers. Production is active; industry +grows, and grows with astonishing vigour and rapidity. Enterprise in +this country requires no artificial stimulant; if it errs at all, it +is from time to time upon the side of overtrading and overproduction. +There is no ground for believing that this country is not capable of +supporting an increasing population in a condition of expanding +prosperity. + +It must, however, be remembered that the British people are more than +any other people in the world a manufacturing people. It is certain +that our population could never have attained its present vast +numbers, nor our country have achieved its position in the world, +without an altogether unusual reliance upon manufacture as opposed to +simple agriculture. The ordinary changes and transitions inseparable +from the active life and growth of modern industry, therefore, operate +here with greater relative intensity than in other countries. An +industrial disturbance is more serious in Great Britain than in other +countries, for it affects a far larger proportion of the people, and +in their distresses the urban democracy are not sustained by the same +solid backing of country-folk and peasant cultivators that we see in +other lands. It has, therefore, become a paramount necessity for us to +make scientific provision against the fluctuations and set-backs +which are inevitable in world commerce and in national industry. + +We have lately seen how the backwash of an American monetary +disturbance or a crisis in the Near East or in the Far East, or some +other cause influencing world trade, and as independent of our control +as are the phases of the moon, may easily have the effect of letting +loose upon thousands of humble families and households all the horrors +of a state of siege or a warlike blockade. Then there are strikes and +trade disputes of all kinds which affect vast numbers of people +altogether unconcerned in the quarrel. Now, I am not going to-night to +proclaim the principle of the "right to work." There is not much use +in proclaiming a right apart from its enforcement; and when it is +enforced there is no need to proclaim it. But what I am here to +assert, and to assert most emphatically, is the responsibility of +Government towards honest and law-abiding citizens; and I am surprised +that that responsibility should ever be challenged or denied. + +When there is a famine in India, when owing to some unusual course of +nature the sky refuses its rains and the earth its fruits, relief +works are provided in the provinces affected, trains of provisions are +poured in from all parts of that great Empire, aid and assistance are +given to the population involved, not merely to enable them to survive +the period of famine, but to resume their occupations at its close. An +industrial disturbance in the manufacturing districts and the great +cities of this country presents itself to the ordinary artisan in +exactly the same way as the failure of crops in a large province in +India presents itself to the Hindu cultivator. The means by which he +lives are suddenly removed, and ruin in a form more or less swift and +terrible stares him instantly in the face. That is a contingency which +seems to fall within the most primary and fundamental obligations of +any organisation of Government. I do not know whether in all countries +or in all ages that responsibility could be maintained, but I do say +that here and now in this wealthy country and in this scientific age +it does in my opinion exist, is not discharged, ought to be +discharged, and will have to be discharged. + +The social machinery at the basis of our industrial life is deficient, +ill-organised, and incomplete. While large numbers of persons enjoy +great wealth, while the mass of the artisan classes are abreast of and +in advance of their fellows in other lands, there is a minority, +considerable in numbers, whose condition is a disgrace to a scientific +and professedly Christian civilisation, and constitutes a grave and +increasing peril to the State. Yes, in this famous land of ours, so +often envied by foreigners, where the grace and ease of life have been +carried to such perfection, where there is so little class hatred and +jealousy, where there is such a wide store of political experience and +knowledge, where there are such enormous moral forces available, so +much wisdom, so much virtue, so much power, we have not yet succeeded +in providing that necessary apparatus of insurance and security, +without which our industrial system is not merely incomplete, but +actually inhumane. + +I said that disturbances of our industrial system are often started +from outside this country by causes utterly beyond our control. When +there is an epidemic of cholera, or typhoid, or diphtheria, a healthy +person runs less risk than one whose constitution is prepared to +receive the microbes of disease, and even if himself struck down, he +stands a far greater chance of making a speedy recovery. The social +and industrial conditions in Great Britain at this present time cannot +be described as healthy. I discern in the present industrial system of +our country three vicious conditions which make us peculiarly +susceptible to any outside disturbance of international trade. First, +the lack of any central organisation of industry, or any general and +concerted control either of ordinary Government work, or of any +extraordinary relief works. It would be possible for the Board of +Trade to foretell with a certain amount of accuracy the degree of +unemployment likely to be reached in any winter. It ought to be +possible for some authority in some Government office--which I do not +care--to view the whole situation in advance, and within certain +limits to exert a powerful influence over the general distribution of +Government contracts. + +There is nothing economically unsound in increasing temporarily and +artificially the demand for labour during a period of temporary and +artificial contraction. There is a plain need of some averaging +machinery to regulate and even-up the general course of the labour +market, in the same way as the Bank of England, by its bank rate, +regulates and corrects the flow of business enterprise. When the +extent of the depression is foreseen, the extent of the relief should +also be determined. There ought to be in permanent existence certain +recognised industries of a useful, but uncompetitive character, like, +we will say, afforestation, managed by public departments, and capable +of being expanded or contracted according to the needs of the labour +market, just as easily as you can pull out the stops or work the +pedals of an organ. In this way, you would not eliminate unemployment, +you certainly would not prevent the creation of unemployables; but you +would considerably limit the scale of unemployment, you would reduce +the oscillation of the industrial system, you would increase its +stability, and by every step that you took in that direction you would +free thousands of your fellow-countrymen from undeserved agony and +ruin, and a far greater number from the haunting dread of ruin. That +is the first point--a gap, a hiatus in our social organisation--to +which I direct your attention to-night, and upon which the +intelligence of this country ought to be concentrated. + +The second vicious condition is positive and not negative. I mean the +gross, and, I sometimes fear, increasing evil of casual labour. We +talk a great deal about the unemployed, but the evil of the +_under-employed_ is the tap-root of unemployment. There is a tendency +in many trades, almost in all trades, to have a fringe of casual +labour on hand, available as a surplus whenever there is a boom, flung +back into the pool whenever there is a slump. Employers and foremen in +many trades are drawn consciously or unconsciously to distribute their +work among a larger number of men than they regularly require, because +this obviously increases their bargaining power with them, and +supplies a convenient reserve for periods of brisk business activity. + +And what I desire to impress upon you, and through you upon this +country, is that the casual unskilled labourer who is habitually +under-employed, who is lucky to get three, or at the outside four, +days' work in the week, who may often be out of a job for three or +four weeks at a time, who in bad times goes under altogether, and who +in good times has no hope of security and no incentive to thrift, +whose whole life and the lives of his wife and children are embarked +in a sort of blind, desperate, fatalistic gamble with circumstances +beyond his comprehension or control, that this poor man, this terrible +and pathetic figure, is not as a class the result of accident or +chance, is not casual because he wishes to be casual, is not casual as +the consequence of some temporary disturbance soon put right. No; the +casual labourer is here because he is wanted here. He is here in +answer to a perfectly well-defined demand. He is here as the result of +economic causes which have been too long unregulated. He is not the +natural product, he is an article manufactured, called into being, to +suit the requirements, in the Prime Minister's telling phrase, of all +industries at particular times and of particular industries at all +times. + +I suppose no Department has more means of learning about these things +than the Board of Trade, which is in friendly touch at every stage all +over the country both with capital and labour. I publish that fact +deliberately. I invite you to consider it, I want it to soak in. It +appears to me that measures to check the growth and diminish the +quantity of casual labour must be an essential part of any thorough or +scientific attempt to deal with unemployment, and I would not proclaim +this evil to you without having reason to believe that practicable +means exist by which it can be greatly diminished. + +If the first vicious condition which I have mentioned to you is lack +of industrial organisation, if the second is the evil of casual +labour, there is a third not less important. I mean the present +conditions of boy labour. The whole underside of the labour market is +deranged by the competition of boys or young persons who do men's work +for boys' wages, and are turned off so soon as they demand men's wages +for themselves. That is the evil so far as it affects the men; but how +does it affect the boys, the youth of our country, the heirs of all +our exertion, the inheritors of that long treasure of history and +romance, of science and knowledge--aye, of national glory, for which +so many valiant generations have fought and toiled--the youth of +Britain, how are we treating them in the twentieth century of the +Christian era? Are they not being exploited? Are they not being +demoralised? Are they not being thrown away? + +Whereas the youth of the wealthier class is all kept under strict +discipline until eighteen or nineteen, the mass of the nation runs +wild after fourteen years of age. No doubt at first employment is easy +to obtain. There is a wide and varied field; there are a hundred odd +jobs for a lad; but almost every form of employment now open to young +persons affords them no opening, is of no use to them whatever when +they are grown up, and in a great number of cases the life which they +lead is demoralising and harmful. And what is the consequence? The +consequence may be measured by this grim fact, that out of the +unemployed applying for help under the Unemployed Workmen Act, no less +than twenty-eight per cent. are between twenty and thirty years of +age, that is to say, men in the first flush of their strength and +manhood already hopelessly adrift on the dark and tumultuous ocean of +life. Upon this subject, I say to you deliberately that no boy or girl +ought to be treated merely as cheap labour, that up to eighteen years +of age every boy and girl in this country should, as in the old days +of apprenticeship, be learning a trade as well as earning a living. + +All attempts to deal with these and similar evils involve the +expenditure of money. It is no use abusing capitalists and rich +people. They are neither worse nor better than any one else. They +function quite naturally under the conditions in which they find +themselves. When the conditions are vicious, the consequence will be +evil; when the conditions are reformed, the evil will be abated. Nor +do I think the wealthy people of Great Britain would be ungenerous or +unwilling to respond to the plain need of this nation for a more +complete or elaborate social organisation. They would have a natural +objection to having public money wasted or spent on keeping in +artificial ease an ever-growing class of wastrels and ne'er-do-weels. +No doubt there would also be a selfish element who would sullenly +resist anything which touched their pocket. But I believe that if +large schemes, properly prepared and scientifically conceived for +dealing with the evils I have mentioned were presented, and if it +could be shown that our national life would be placed upon a far more +stable and secure foundation, I believe that there would be thousands +of rich people who would cheerfully make the necessary sacrifices. At +any rate, we shall see. + +The year that lies before us must be a year of important finance. No +doubt that finance will be a subject of fierce and protracted +discussion; but I shall certainly not exclude from my mind, in +weighing the chances of social reform, that strong element of +patriotism which is to be found among the more fortunate of our +fellow-countrymen, and which has honourably distinguished them from +the rich people of other countries I could name. + +I have been dealing with three, and only three, of the evil causes +which principally affect labour conditions in Great Britain at the +present time. Do not forget, however, as the Prime Minister has +reminded us, how intimate is the co-relation of all social reforms, +how vital it is to national health and security that we should +maintain an adequate and independent population upon the land, and how +unsatisfactory, in Scotland, at any rate, are the present conditions +for small holdings. Do not forget, either, how fatal to the social, +moral, and political progress of British democracy is the curse of +intemperance. There is not a man or woman who lifts a voice and exerts +an influence in support either of land or of temperance reform, who +will not be doing something not only to alleviate the sufferings of +the poor, but to stimulate the healthy advance of British prosperity. + +But see how vast is the range of this question of unemployment with +which we are confronted. See now how intricate are its details and +its perplexities; how foolish it would be to legislate in panic or +haste; how vain it would be to trust to formulas and prejudices; how +earnest must be the study; how patient and laborious the preparation; +how scientific the spirit, how valiant the action, if that great and +hideous evil of insecurity by which our industrial population are +harassed is to be effectually diminished in our national life. See +now, also, what sort of politicians those are, whichever extreme of +politics they may belong to, who tell you that they have an easy, +simple, and unfailing remedy for such an evil. What sort of +unscrupulous and reckless adventurers they are who tell you that +tariff reform, that a trumpery ten per cent. tariff on foreign +manufactures, and a tax on wheat would enable them to provide "work +for all." I was very glad to see that Mr. Balfour frankly and honestly +dissociated himself, the other night at Dumfries, from the impudent +political cheap-jacks who are touting the country on behalf of the +Tory Party, by boldly declaring that tariff reform, or "fiscal +reform," as he prefers to call it, would be no remedy for unemployment +or trade oscillations. + +Now that Mr. Balfour has made that admission, for which we thank him, +and for which we respect him, I will make one in my turn. If tariff +reform or protection, or fiscal reform, or whatever you choose to call +it, is no remedy for unemployment--and it is pretty clear from the +experience of other countries who have adopted it on a large scale +that it is not--neither is free trade by itself a remedy for +unemployment. The evil lies deeper, the causes are more complex than +any within the reach of import duties or of no import duties, and its +treatment requires special measures of a social, not less than of an +economic character which are going to carry us into altogether new and +untrodden fields in British politics. + +I agree most whole-heartedly with those who say that in attempting to +relieve distress or to regulate the general levels of employment, we +must be most careful not to facilitate the very disorganisation of +industry which causes distress. But I do not agree with those who say +that every man must look after himself, and that the intervention by +the State in such matters as I have referred to will be fatal to his +self-reliance, his foresight, and his thrift. We are told that our +non-contributory scheme of old-age pensions, for instance, will be +fatal to thrift, and we are warned that the great mass of the working +classes will be discouraged thereby from making any effective +provision for their old age. But what effective provision have they +made against old age in the past? If terror be an incentive to thrift, +surely the penalties of the system which we have abandoned ought to +have stimulated thrift as much as anything could have been stimulated +in this world. The mass of the labouring poor have known that unless +they made provision for their old age betimes they would perish +miserably in the workhouse. Yet they have made no provision; and when +I am told that the institution of old-age pensions will prevent the +working classes from making provision for their old age, I say that +cannot be, for they have never been able to make such provision. And I +believe our scheme, so far from preventing thrift, will encourage it +to an extent never before known. + +It is a great mistake to suppose that thrift is caused only by fear; +it springs from hope as well as from fear; where there is no hope, be +sure there will be no thrift. No one supposes that five shillings a +week is a satisfactory provision for old age. No one supposes that +seventy is the earliest period in a man's life when his infirmities +may overwhelm him. We have not pretended to carry the toiler on to dry +land; it is beyond our power. What we have done is to strap a lifebelt +around him, whose buoyancy, aiding his own strenuous exertions, ought +to enable him to reach the shore. + +And now I say to you Liberals of Scotland and Dundee two +words--"Diligence and Daring." Let that be your motto for the year +that is to come. "Few," it is written, "and evil are the days of man." +Soon, very soon, our brief lives will be lived. Soon, very soon, we +and our affairs will have passed away. Uncounted generations will +trample heedlessly upon our tombs. What is the use of living, if it be +not to strive for noble causes and to make this muddled world a better +place for those who will live in it after we are gone? How else can we +put ourselves in harmonious relation with the great verities and +consolations of the infinite and the eternal? And I avow my faith that +we are marching towards better days. Humanity will not be cast down. +We are going on--swinging bravely forward along the grand high +road--and already behind the distant mountains is the promise of the +sun. + + + + +THE SOCIAL FIELD + +BIRMINGHAM, _January 13, 1909_[13] + +(From _The Times_, by permission.) + + +I am very glad to come here to-night to wish good luck in the New Year +to the Liberals of Birmingham. Good luck is founded on good pluck, and +that is what I think you will not fail in. Birmingham Liberals have +for twenty years been over-weighted by the influence of remarkable men +and by the peculiar turn of events. This great city, which used to be +the home of militant Radicalism, which in former days supplied with +driving power the cause of natural representation against hereditary +privilege, has been captured by the foe. The banner of the House of +Lords has been flung out over the sons and grandsons of the men who +shook all England in the struggle for the great Reform Bill; and while +old injustice has but been replaced by new, while the miseries and the +privations of the poor continue in your streets, while the +differences between class and class have been even aggravated in the +passage of years, Birmingham is held by the enemy and bound to +retrogression in its crudest form. + +But this is no time for despondency. The Liberal Party must not allow +itself to be overawed by the hostile Press which is ranged against it. +Boldly and earnestly occupied, the platform will always beat the +Press. Still less should we allow ourselves to be perturbed by the +fortuitous and sporadic results of by-electoral warfare. I suppose I +have fought as many by-elections as most people, and I know that all +the advantages lie with the attacking force. The contests are +complicated by personal and local influences. The discussions turn +upon the incidents of current legislation. There are always grievances +to be urged against the Government of the day. After a great victory, +all parties, and particularly the Liberals, are prone to a slackening +of effort and organisation; after a great defeat all parties, and +especially the Tories, are spurred to supreme exertions. + +These factors are common to all by-elections, under all Governments; +but never, I venture to say, has it been more important to an +Opposition to gain by-electoral successes than during the present +Parliament. It is their only possible line of activity. In the House +of Commons they scarcely show their noses. In divisions they are +absent; in debate--well, I do not think we need say much about that; +and it is only by a combination of by-electoral incidents properly +advertised by the Party Press on the one hand, and the House of Lords' +manipulation upon the other, that the Conservative Party are able to +keep their heads above water. And when I speak of the importance to +the Opposition of by-elections, let me also remind you that never +before have by-electoral victories been so important, not only to a +great Party, but to a great trade. + +Therefore, while I am far from saying that we should be content with +recent manifestations of the opinion of the electorate, while I do not +at all deny that they involve a sensible reaction of feeling of an +unfavourable character, and while I urge the most strenuous exertions +upon all concerned in party organisation, I assert that there is no +reason, as the history of this country abundantly shows, why a general +election, at a well-chosen moment, and upon some clear, broad, simple +issue, should not retrieve and restore the whole situation. + +There could be no question of a Government, hitherto undisturbed by +internal disagreement and consistently supported in the House of +Commons by a large, united, and intact majority, being deflected one +hair's breadth from its course by the results of by-elections. We have +our work to do, and while we have the power to carry it forward, we +have no right, even if we had the inclination, to leave it +uncompleted. Certainly we shall not be so foolish, or play so false to +those who have supported us, as to fight on any ground but that of our +own choosing, or at any time but that most advantageous to the general +interest of the Progressive cause. + +The circumstances of the period are peculiar. The powers of the House +of Lords to impede, and by impeding to discredit, the House of Commons +are strangely bestowed, strangely limited, and still more strangely +exercised. There are little things which they can maul; there are big +things they cannot touch; there are Bills which they pass, although +they believe them to be wrong; there are Bills which they reject, +although they know them to be right. The House of Lords can prevent +the trams running over Westminster Bridge; but it cannot prevent a +declaration of war. It can reject a Bill prohibiting foreign workmen +being brought in to break a British strike; it cannot amend a Bill to +give old-age pensions to 600,000 people. It can thwart a Government in +the minute details of its legislation; it cannot touch the whole vast +business of finance. It can prevent the abolition of the plural voter; +but it could not prevent the abolition of the police. It can refuse a +Constitution to Ireland, but not, luckily, to Africa. + +Lord Lansdowne, in his leadership of the House of Lords during the +present Parliament, has put forward claims on its behalf far more +important and crude than ever were made by the late Lord Salisbury. No +Tory leader in modern times has ever taken so high a view of its +rights, and at the same time no one has shown a more modest conception +of its duties. In destroying the Education Bill of 1906 the House of +Lords asserted its right to resist the opinion of a majority of members +of the House of Commons, fresh from election, upon a subject which had +been one of the most prominent issues of the election. In rejecting +the Licensing Bill of 1908 they have paraded their utter unconcern for +the moral welfare of the mass of their fellow-countrymen. + +There is one feature in the guidance of the House of Lords by Lord +Lansdowne which should specially be noticed, and that is the air of +solemn humbug with which this ex-Whig is always at pains to invest its +proceedings. The Nonconformist child is forced into the Church school +in single-school areas in the name of parents' rights and religious +equality. The Licensing Bill is rejected in the highest interests of +temperance. Professing to be a bulwark of the commercial classes +against Radical and Socialistic legislation, the House of Lords passes +an Old-Age Pensions Bill, which it asserts will be fatal alike to +public finance and public thrift, a Mines Eight Hours Bill, which it +is convinced will cripple British industry, and a Trades Disputes +Bill, which it loudly declared tyrannous and immoral. Posing as a +Chamber of review remote from popular passion, far from the swaying +influences of the electorate, it nevertheless exhibits a taste for +cheap electioneering, a subserviency to caucus direction, and a party +spirit upon a level with many of the least reputable elective +Chambers in the world; and beneath the imposing mask of an assembly of +notables backed by the prescription and traditions of centuries we +discern the leer of the artful dodger, who has got the straight tip +from the party agent. + +It is not possible for reasonable men to defend such a system or such +an institution. Counter-checks upon a democratic Assembly there may +be, perhaps there should be. But those counter-checks should be in the +nature of delay, and not in the nature of arrest; they should operate +evenly and equally against both political parties, and not against +only one of them; and above all they should be counter-checks +conceived and employed in the national interest and not in a partisan +interest. These abuses and absurdities have now reached a point when +it is certain that reform, effective and far-reaching, must be the +necessary issue at a general election; and, whatever may be the result +of that election, be sure of this, that no Liberal Government will at +any future time assume office without securing guarantees that that +reform shall be carried out. + +There is, however, one reason which would justify a Government, +circumstanced and supported as we are, in abandoning prematurely the +trust confided to us by the country. When a Government is impotent, +when it is destitute of ideas and devoid of the power to give effect +to them, when it is brought to a complete arrest upon the vital and +essential lines of its policy, then I entirely agree that the sooner +it divests itself of responsibilities which it cannot discharge, the +better for the country it governs and the Party it represents. No one +who looks back over the three busy years of legislation which have +just been completed can find any grounds for such a view of our +position; and although we have sustained checks and vexations from +circumstances beyond our control which have prevented us settling, as +we otherwise would have done, the problems of licensing and of +education, no lover of progress who compares the Statute-book as it +stands to-day with its state in 1905, need feel that he has laboured +in vain. + +No one can say that we have been powerless in the past. The trade +unionist as he surveys the progress of his organisation, the miner as +the cage brings him to the surface of the ground, the aged pensioner +when he visits the post office with his cheque-book, the Irish +Catholic whose son sees the ranges of a University career thrown +open, the child who is protected in his home and in the street, the +peasant who desires to acquire a share of the soil he tills, the +youthful offender in the prison, the citizen as he takes his seat on +the county bench, the servant who is injured in domestic service, all +give the lie to that--all can bear witness to the workings of a +tireless social and humanitarian activity, which, directed by +knowledge and backed by power, tends steadily to make our country a +better place for the many, without at the same time making it a bad +place for the few. + +But, if we have been powerful in the past, shall we then be powerless +in the future? Let the year that has now opened make its answer to +that. We shall see before many months are passed whether his Majesty's +Government, and the House of Commons, by which it is supported, do not +still possess effective means to carry out their policy, not only upon +those important political issues in which we have been for the time +being thwarted, but also in that still wider and, in my opinion, more +important field of social organisation into which, under the +leadership of the Prime Minister, we shall now proceed to advance. + +I do not, of course, ignore the fact that the House of Lords has the +power, though not the constitutional right, to bring the government of +the country to a standstill by rejecting the provision which the +Commons make for the financial service of the year. That is a matter +which does not rest with us, it rests with them. If they want a speedy +dissolution, they know where to find one. If they really believe, as +they so loudly proclaim, that the country will hail them as its +saviours, they can put it to the proof. If they are ambitious to play +for stakes as high as any Second Chamber has ever risked, we shall not +be wanting. And, for my part, I should be quite content to see the +battle joined as speedily as possible upon the plain, simple issue of +aristocratic rule against representative government, between the +reversion to protection and the maintenance of free trade, between a +tax on bread and a tax on--well, never mind. And if they do not +choose, or do not dare to use the powers they most injuriously +possess, if fear, I say, or tactics, or prudence, or some lingering +sense of constitutional decency, restrains them, then for Heaven's +sake let us hear no more of these taunts, that we, the Liberal Party, +are afraid to go to the country, that we do not possess its +confidence, and that we are impotent to give effect to the essential +purposes of our policy. + +Subject to such a constitutional outrage as I have indicated, his +Majesty's Government will claim their right and use their power to +present the Liberal case as a whole to the judgment of the whole body +of electors. That case is already largely developed. How utterly have +all those predictions been falsified that a Liberal Government would +be incapable of the successful conduct of Imperial affairs! Whether +you look at our position in Europe, or at the difficult conduct of +Indian administration, or the relations which have been preserved, and +in some cases restored, with our self-governing Colonies, the policy +of the Government has been attended with so much success that it has +not only commanded the approval of impartial persons, but has silenced +political criticism itself. + +It was in South Africa that we were most of all opposed and most of +all distrusted, and by a singular inversion it is in South Africa that +the most brilliant and memorable results have been achieved. Indeed, I +think that the gift of the Transvaal and Orange River Constitutions +and the great settlement resulting therefrom will be by itself as a +single event sufficient to vindicate in the eyes of future generations +the administration of Sir Henry Campbell-Bannerman, and to dignify his +memory in Parliaments and periods which we shall not see. But our work +abroad is not yet completed, has not yet come to its full fruition. If +we should continue, as I expect we shall, to direct public affairs for +the full five years which are the normal and the healthy period of +British Administrations, we may look for a further advance and +improvement in all the great external spheres of Imperial policy. We +may look in India for a greater sense of confidence and solidarity +between the people and the Government. We shall salute the sunrise of +South Africa united under the British Crown. And in Europe I trust +that Sir Edward Grey will have crowned his work at the Foreign Office +by establishing a better and kindlier feeling between the British and +the German peoples. That will be the record of policy beyond the seas +on which we shall appeal for judgment and for justice. + +If it be said that, contrary to general expectation, our policy has +prospered better abroad than at home, you have not far to look for +the reason. Abroad we have enjoyed full responsibility, a free hand, +and fair-play; at home we have had a divided authority, a fettered +hand, and the reverse of fair-play. We have been hampered and we have +been harassed. We have done much; we could have done much more. + +Our policy at home is less complete and less matured than it is +abroad. But it so happens that many of the most important steps which +we should now take, are of such a character that the House of Lords +will either not be able or will not be anxious to obstruct them, and +could not do so except by courting altogether novel dangers. The +social field lies open. There is no great country where the +organisation of industrial conditions more urgently demands attention. +Wherever the reformer casts his eyes he is confronted with a mass of +largely preventable and even curable suffering. The fortunate people +in Britain are more happy than any other equally numerous class have +been in the whole history of the world. I believe the left-out +millions are more miserable. Our vanguard enjoys all the delights of +all the ages. Our rearguard straggles out into conditions which are +crueller than barbarism. The unemployed artisan, the casual labourer, +and the casual labourer's wife and children, the sweated worker, the +infirm worker, the worker's widow, the under-fed child, the untrained, +undisciplined, and exploited boy labourer--it is upon these subjects +that our minds should dwell in the early days of 1909. + +The Liberal Party has always known the joy which comes from serving +great causes. It must also cherish the joy which comes from making +good arrangements. We shall be all the stronger in the day of battle +if we can show that we have neglected no practicable measure by which +these evils can be diminished, and can prove by fact and not by words +that, while we strive for civil and religious equality, we also labour +to build up--so far as social machinery can avail--tolerable basic +conditions for our fellow-countrymen. There lies the march, and those +who valiantly pursue it need never fear to lose their hold upon the +heart of Britain. + +FOOTNOTES: + +[13] In the interval between this and the preceding speech the House of +Lords had rejected the Licensing Bill. + + + + +THE APPROACHING CONFLICT + +NOTTINGHAM, _January 30, 1909_ + +(From _The Manchester Guardian_, by permission of the Editor.) + + +We are met together at a time when great exertions and a high +constancy are required from all who cherish and sustain the Liberal +cause. Difficulties surround us and dangers threaten from this side +and from that. You know the position which has been created by the +action of the House of Lords. Two great political Parties divide all +England between them in their conflicts. Now it is discovered that one +of these Parties possesses an unfair weapon--that one of these +Parties, after it is beaten at an election, after it is deprived of +the support and confidence of the country, after it is destitute of a +majority in the representative Assembly, when it sits in the shades of +Opposition without responsibility, or representative authority, under +the frown, so to speak, of the Constitution, nevertheless possesses a +weapon, an instrument, a tool, a utensil--call it what you will--with +which it can harass, vex, impede, affront, humiliate, and finally +destroy the most serious labours of the other. When it is realised +that the Party which possesses this prodigious and unfair advantage is +in the main the Party of the rich against the poor, of the classes and +their dependants against the masses, of the lucky, the wealthy, the +happy, and the strong against the left-out and the shut-out millions +of the weak and poor, you will see how serious the constitutional +situation has become. + +A period of supreme effort lies before you. The election with which +this Parliament will close, and towards which we are moving, is one +which is different in notable features from any other which we have +known. Looking back over the politics of the last thirty years, we +hardly ever see a Conservative Opposition approaching an election +without a programme, on paper at any rate, of social and democratic +reform. There was Lord Beaconsfield with his policy of "health and the +laws of health." There was the Tory democracy of Lord Randolph +Churchill in 1885 and 1886, with large, far-reaching plans of Liberal +and democratic reform, of a generous policy to Ireland, of +retrenchment and reduction of expenditure upon naval and military +armaments--all promises to the people, and for the sake of which he +resigned rather than play them false. Then you have the elections of +1892 and 1895. In each the Conservative Party, whether in office or +opposition, was, under the powerful influence of Mr. Chamberlain, +committed to most extensive social programmes, of what we should call +Liberal and Radical reforms, like the Workmen's Compensation Act and +Old-Age Pensions, part of which were carried out by them and part by +others. + +But what social legislation, what plans of reform do the Conservative +Party offer now to the working people of England if they will return +them to power? I have studied very carefully the speeches of their +leaders--if you can call them leaders--and I have failed to discover a +single plan of social reform or reconstruction. Upon the grim and +sombre problems of the Poor Law they have no policy whatever. Upon +unemployment no policy whatever; for the evils of intemperance no +policy whatever, except to make sure of the public-house vote; upon +the question of the land, monopolised as it is in the hands of so +few, denied to so many, no policy whatever; for the distresses of +Ireland, for the relations between the Irish and British peoples, no +policy whatever unless it be coercion. In other directions where they +have a policy, it is worse than no policy. For Scotland the Lords' +veto, for Wales a Church repugnant to the conscience of the +overwhelming majority of the Welsh people, crammed down their throats +at their own expense. + +Yet we are told they are confident of victory, they are persuaded that +the country has already forgotten the follies and even the crimes of +the late Administration, and that the general contempt and disgust in +which they were dismissed from power has already passed away. They are +already busy making their Cabinet, who is to be put in and, what is +not less important, who is to be put out. Lists of selection and lists +of proscription are being framed. The two factions into which they are +divided, the Balfourites and the tariff reformers, are each acutely +conscious of one another's infirmities, and, through their respective +organs, they have succeeded in proving to their apparent satisfaction +what most of us have known, and some of us have said for a long time +past, that they are an uncommonly poor lot all round. + +It would be bad enough if a Party so destitute, according to its own +statement, of political merit were to return with the intention of +doing nothing but repeating and renewing our experiences under Mr. +Balfour's late Administration, of dragging through empty sessions, of +sneering at every philanthropic enthusiasm, of flinging a sop from +time to time to the brewers or the parsons or the landed classes. But +those would not be the consequences which would follow from the Tory +triumph. Consequences far more grave, immeasurably more disastrous, +would follow. We are not offered an alternative policy of progress, we +are not confronted even with a policy of standstill, we are confronted +with an organised policy of constructive reaction. We are to march +back into those shades from which we had hoped British civilisation +and British science had finally emerged. + +If the Conservative Party win the election they have made it perfectly +clear that it is their intention to impose a complete protective +tariff, and to raise the money for ambitious armaments and colonial +projects by taxing the poor. They have declared, with a frankness +which is, at any rate, remarkable, that they will immediately proceed +to put a tax on bread, a tax on meat, a tax on timber, and an +innumerable schedule of taxes on all manufactured articles imported +into the United Kingdom; that is to say, that they will take by all +these taxes a large sum of money from the pockets of the wage-earners, +by making them pay more for the food they eat, the houses they live +in, and the comforts and conveniences which they require in their +homes, and that a great part of this large sum of money will be +divided between the landlords and the manufacturers in the shape of +increased profits; and even that part of it which does reach the +Exchequer is to be given back to these same classes in the shape of +reductions in income-tax and in direct taxation. If you face the +policy with which we are now threatened by the Conservative Party +fairly and searchingly, you will see that it is nothing less than a +deliberate attempt on the part of important sections of the propertied +classes to transfer their existing burdens to the shoulders of the +masses of the people, and to gain greater profits for the investment +of their capital by charging higher prices. + +It is very natural that a Party nourishing such designs should be +apprehensive of criticism and of opposition; but I must say I have +never heard of a Party which was in such a jumpy, nervous state as our +opponents are at this present time. If one is led in the course of a +speech, as I sometimes am, to speak a little firmly and bluntly about +the Conservative tariff reformers, they become almost speechless with +indignation. They are always in a state of incipient political +apoplexy, while as for the so-called Liberal Unionists, whenever they +are criticised, they never leave off whining and say that it is +unchivalrous to attack them while Mr. Chamberlain is disabled. Sorry I +am that he is out of the battle, not only on personal, but on public +grounds. His fiercest opponents would welcome his re-entry into the +political arena, if only for the fact that we should then have a man +to deal with, and some one whose statement of the case for his side +would be clear and bold, whose speeches would be worth reading and +worth answering, instead of the melancholy marionettes whom the +wire-pullers of the Tariff Reform League are accustomed to exhibit on +provincial platforms. But I hope you will not let these pretexts or +complaints move you or prevent you from calling a spade a spade, a tax +a tax, a protective tariff a gigantic dodge to cheat the poor, or the +Liberal Unionist party the most illiberal thing on record. + +But if the tariff reformers are so touchy and intolerant that they +resent the slightest attack or criticism from their opponents as if it +were sacrilege, that is nothing to the fury which they exhibit when +any of their friends on the Conservative side begin to ask a few +questions. One would have thought at least that matters of such +gravity and such novelty should be considered fairly on their merits. +But what does Mr. Austen Chamberlain say? He tells us that no +hesitation will be tolerated from Unionist Members of Parliament in +regard to any tariff reform proposals which may in a future Parliament +be submitted--by whoever may be the Chancellor of the Exchequer. No +hesitation will be tolerated. Not opposition, not criticism, not +dissent, but no hesitation will be tolerated. The members of the +Unionist Party are to go to the next Parliament, not as honest +gentlemen, free to use their minds and intelligences. They are to go +as the pledged, tied-up delegates of a caucus, forced to swallow +without hesitation details of a tariff which they have not even seen; +denied the right which every self-respecting man should claim, to give +their vote on grand and cardinal issues according to their faith and +their conscience. And in order that those who would refuse to be bound +by these dishonouring conditions may be smelt out and excluded from +the House of Commons, a secret society of nameless but probably +interested busybodies is hard at work in all the dirtiest sewers of +political intrigue. + +But, after all, these methods are an inseparable part of the process +of carrying a protectionist tariff. The whole question resolves itself +into a matter of "business is business," and the predatory interests +which have banded themselves together to finance and organise the +tariff campaign cannot be expected to put up with the conscientious +scruples and reasonable hesitations of Members of Parliament. It will +be a cash transaction throughout, with large profits and quick +delivery. Every little would-be monopolist in the country is going to +have his own association to run his own particular trade. Every +constituency will be forced to join in the scramble, and to secure +special favours at the expense of the commonwealth for its special +branches of industry. All the elections of the future will turn on +tariffs. Why, you can see the thing beginning already. That egregious +Tariff Commission have been dividing all the loot among themselves +before the battle has been won--dividing the lion's skin while the +beast lives--and I was reading only the other day that the +Conservatives of Norwood have decided that they could not support +their Member any longer, because, forsooth, he would not pledge +himself to vote for a special tax on foreign imported chairs and +window panes. It is the same in every country. + +Such is the great conspiracy with which the British democracy is now +confronted--an attempt to place the main burden of taxation upon the +shoulders of wage-earners and not on income-drawers, a disastrous blow +at the prosperity, the freedom, the flexibility, and the expansive +power of British industry, and a deadly injury to the purity of +English public life. The Conservative Party tell us that if they win +the victory they will screw a protective tariff on our necks. What do +we say? What of the House of Lords? We say that if we win, we will +smash to pieces the veto of the House of Lords. If we should obtain a +majority at the next election--and I have good hopes that if we act +with wisdom and with union, and, above all, with courage, we shall +undoubtedly obtain an effective majority--the prize we shall claim +will be a final change in the relations of the two Houses of +Parliament, of such a character as to enable the House of Commons to +make its will supreme within the lifetime of a single Parliament; and +except upon that basis, or for the express purpose of effecting that +change, we will not accept any responsibility for the conduct of +affairs. + +But there is another issue which must not be overlooked. I mean the +social issue. We have taken a great step already. I must say that he +is rather a sour kind of man who can find nothing to notice in the +Old-Age Pensions Act except its little flaws and petty defects. I +think you will feel, on the contrary, that the establishment of the +pensions system is a marvellous and impressive example of the power +which British Governments possess. Without a hitch, perfectly +smoothly, punctual to the minute, regular as clockwork, nearly +600,000 aged persons are being paid their pensions every week. That is +a wonderful and beneficent achievement, a good job well worth some +risk and sweat to finish. Nearly eight millions of money are being +sent circulating through unusual channels, long frozen by poverty, +circulating in the homes of the poor, flowing through the little shops +which cater to their needs, cementing again family unions which harsh +fate was tearing asunder, uniting the wife to the husband, and the +parent to the children. No; in spite of Socialistic sneer and Tory +jeer and glorious beer, and all the rest of it, I say it is a noble +and inspiring event, for which this Parliament will be justly honoured +by generations unborn. I said just now that a Tory tariff victory +meant marching backwards, but there are some things they cannot undo. +We may be driven from power. We may desire to be released from +responsibility. Much of our work may be cut short, much may be +overturned. But there are some things which Tory reaction will not +dare to touch, and, like the settlement and reconciliation of South +Africa, so the Old-Age Pensions Act will live and grow and ripen as +the years roll by, far beyond the reach of Party warfare and far +above the changing moods of faction. + +There are many political injustices in this country and many absurd, +oppressive, or obsolete practices. But the main aspirations of the +British people are at this present time social rather than political. +They see around them on every side, and almost every day, spectacles +of confusion and misery which they cannot reconcile with any +conception of humanity or justice. They see that there are in the +modern state a score of misfortunes that can happen to a man without +his being in fault in any way, and without his being able to guard +against them in any way. They see, on the other hand, the mighty power +of science, backed by wealth and power, to introduce order, to provide +safeguards, to prevent accidents, or at least to mitigate their +consequences. They know that this country is the richest in the world; +and in my sincere judgment the British democracy will not give their +hearts to any Party that is not able and willing to set up that +larger, fuller, more elaborate, more thorough social organisation, +without which our country and its people will inevitably sink through +sorrow to disaster and our name and fame fade upon the pages of +history. + +We have done some of that work, and we are going to do more. In moving +forward to this great struggle which is approaching, we are going to +carry our social policy along with us. We are not going to fight alone +upon the political and constitutional issue, nor alone upon the +defence of free trade. We are going, fearless of the consequences, +confident of our faith, to place before the nation a wide, +comprehensive, interdependent scheme of social organisation--to place +it before the people not merely in the speeches or placards of a Party +programme, but by a massive series of legislative proposals and +administrative acts. If we are interrupted or impeded in our march, +the nation will know how to deal with those who stand in the path of +vital and necessary reforms. And I am confident that in the day of +battle the victory will be to the earnest and to the persevering; and +then again will be heard the doleful wail of Tory rout and ruin, and +the loud and resounding acclamations with which the triumphant armies +of democracy will march once again into the central place of power. + + + + +THE SECOND READING OF THE ANTI-SWEATING BILL[14] + +HOUSE OF COMMONS, _April 28, 1909_ + + + +It is a serious national evil that any class of his Majesty's subjects +should receive in return for their utmost exertions less than a living +wage. + +It was formerly supposed that the workings of the laws of supply and +demand would in the regular and natural course of events, and by a +steady progression, eliminate that evil, and achieve adequate minimum +standards. Modern opinion has found it necessary greatly to refine +upon these broad generalisations of the truth, and the first clear +division that we make to-day in questions of wages, is that between a +healthy and unhealthy condition of bargaining. + +Where, as in the great staple trades of this country, you have +powerful organisations on both sides, with responsible leaders able +to bind their constituents to their decisions, conjoined with +automatic scales, or arbitration or conciliation in case of a +deadlock, there you have a healthy condition of bargaining, which +increases the competitive power of the industry, which continually +weaves more closely together the fortunes of Capital and Labour, and +which enforces a constant progression in the standards of living and +of productive power. But where, as in what we call "Sweated trades," +you have no organisation at all on either side, no parity of +bargaining between employers and employed, where the good employer is +continually undercut by the bad, and the bad again by the worse; where +the worker whose whole livelihood depends on the trade is undercut by +the worker to whom it is only a second string; where the feebleness +and ignorance of the workers and their isolation from each other +render them an easy prey to the tyranny of bad masters, and middlemen +one step above them upon the lowest rungs of the ladder, and +themselves held in the grip of the same relentless forces--there you +have a condition not of progress but of progressive degeneration. And +just as in the former case the upward tendency will be constant if it +is not interrupted by external power, so in the latter case the +demoralisation will continue in a squalid welter for periods which are +quite indefinite so far as our brief lives are concerned. + +We have seen from the investigations of the last twenty years, when +the phenomena of sweating have been under close and scientific review, +that there is no power of self-cure within the area of the evil. We +have seen that while the general advance in the standards of work and +wages has on the whole been constant, these morbid and diseased +patches, which we call the Sweated Trades, have not shared in that +improvement, but have remained in a state of chronic depression and +degeneration. The same shocking facts, in some cases the same pitiful +witnesses, were brought before the Select Committee last year as +before Lord Dunraven's Committee in 1888. Indeed I am advised that in +some respects wages and conditions are worse than they were twenty +years ago. Nor are these melancholy facts confined to any one country. +Sweating is not a peculiarity of Great Britain. Practically the same +trades experience the same evils in all other industrial countries. +France, Germany, Austria, and America reproduce with great exactness +under similar economic conditions the same social evils, and in those +countries, as in ours, Sweated Industries--by which I mean trades +where there is no organisation, where wages are exceptionally low, and +conditions subversive of physical health and moral welfare--cast dark +shadows in what is, upon the whole, the growing and broadening light +of civilisation. + +There is a clear reason for this, which is in itself at once a +justification for the special treatment which we propose for these +trades, and a means of marking them off more or less definitely from +the ordinary trades. In the case of any great staple trade in this +country, if the rate of wages became unnaturally low compared to other +industries, and the workers could not raise it by any pressure on +their part, the new generation at any rate would exercise a preference +for better pay and more attractive forms of industry. The gradual +correction of depressed conditions over large periods of time is thus +possible. But in these sweated industries there is no new generation +to come to the rescue. They are recruited from a class rather than +from a section of the community. The widow, the women folk of the +poorest type of labourer, the broken, the weak, the struggling, the +diseased--those are the people who largely depend upon these trades, +and they have not the same mobility of choice, exerted, tardily though +it be, by a new generation, but which is undoubtedly operative upon +the great staple trades of the country. That is an explanation which +accounts for the same evils being reproduced under similar conditions +in different countries, separated widely from one another and marked +by great differences of general conditions. + +I ask the House to regard these industries as sick and diseased +industries. I ask Parliament to deal with them exactly in the same +mood and temper as we should deal with sick people. It would be cruel +to prescribe the same law for the sick as for the sound. It would be +absurd to apply to the healthy the restrictions required for the sick. +Further, these sweated trades are not inanimate abstractions. They are +living, almost sentient, things. Let the House think of these sweated +trades as patients in a hospital ward. Each case must be studied and +treated entirely by itself. No general rule can be applied. There is +no regulation dose which will cure them all. You cannot effect quicker +cures by giving larger doses. Different medicines, different diets, +different operations are required for each; and consideration, +encouragement, nursing, personal effort are necessary for all. Great +flexibility and variety of procedure, and a wide discretionary power, +entrusted to earnest and competent people, must characterise any +attempt to legislate on this subject. + +The central principle of this Bill is the establishment of Trade +Boards, which will be charged with the duty of fixing a minimum wage. +I am very anxious to give these Trade Boards the utmost possible +substance and recognition. They will be formed on the principle of +equality of representation for employers and employed, with a skilled +official chairman or nucleus. That is the principle I have adopted in +the new Arbitration Court recently established. That is the principle +which will govern the system of Labour Exchanges, shortly to be +introduced, and other measures which may come to be associated with +Labour Exchanges, and I think it is an excellent principle. + +At the same time, do not let us suppose that these Trade Boards will, +in the first instance, be very strong or representative bodies. They +are to be formed in trades mainly worked by women, where no +organisation has ever yet taken root, where there are as yet no means +of finding and focusing an effective trade opinion. Where possible, +they will be partly elective; in many cases they will, I expect, have +to begin by being almost entirely nominated. In some cases it will be +upon the official members alone that the main burden will fall. I +could not ask the House to confer upon bodies of this nebulous +character, not representative, not elective in any democratic sense, +responsible not to constituents, nor to a public department, nor to +Parliament itself in any way, the absolute and final power of +enforcing by the whole apparatus of the law any decision, whether wise +or foolish, upon wage questions to which they may come by the +narrowest majority. The work which we entrust to them wholly and +finally is sufficiently difficult and important. We direct them by +this Bill to prescribe minimum rates of wages. They are to find the +minimum rate. For that purpose they are as well qualified as any body +that we could devise. In this sphere their jurisdiction will be +complete. The Board of Trade will not retry the question of what is +the right minimum rate. Another and quite different question will be +decided by the Board of Trade. They will decide whether the minimum +rate which has been prescribed by the Trade Board commands sufficient +support in the trade to make its enforcement by inspection and +prosecution likely to be effective. + +That is the division between the responsibility which the Trade Boards +will have and the responsibility which we shall reserve to ourselves. +I shall be quite ready in Committee to express that intention, which +is in the Bill, in a simpler and stronger manner, and to make the +function of the Board of Trade a positive and not a negative one, so +that when the Trade Board has fixed the minimum rate of wages it +shall, after an interval of six months, acquire the force of law, and +shall be enforced by compulsory powers, unless in the meanwhile the +Board of Trade decides or rules otherwise. For my part, I gladly give +an assurance that it is our intention to put the compulsory provisions +of this Bill into full effect upon at least one of the trades in the +schedule, at as early a date as possible, in order to bring about the +fulfilment of a much-needed and long-overdue experiment. + +Now I come to the probationary period, and I know that there are a +great many who have stated that it is mere waste of time. I, on the +contrary, have been led to the opinion that it is vital to any +practical or effective policy against sweating. It is no use to +attempt, in trades as complex and obscure as these with which we are +dealing, to substitute outside authority for trade opinion. The only +hope lies in the judicious combination of the two, each acting and +reacting upon the other. A mere increase of the penal provisions and +inspection would be a poor compensation for the active support of a +powerful section within the trade itself. It is upon the probationary +period that we rely to enable us to rally to the Trade Board and to +its minimum wage the best employers in the trade. In most instances +the best employers in the trade are already paying wages equal or +superior to the probable minimum which the Trade Board will establish. +The inquiries which I have set on foot in the various trades scheduled +have brought to me most satisfactory assurances from nearly all the +employers to whom my investigators have addressed themselves. + +For the enforcement of this Act, and for the prevention of evasion and +collusion, I rely upon the factory inspectors, who will report +anything that has come to their notice on their rounds and who will +make themselves a channel for complaints. I rely still more upon the +special peripatetic inspectors and investigators who will be appointed +under the Act by the Board of Trade, who will have to conduct +prosecutions under the Act, and who will devote all their time to the +purposes of the Act. These officers will incidentally clothe the Trade +Boards with real authority, once the rate has been enforced, in that +they will be responsible to the Trade Board, and not to some powerful +Department of Government external to the Trade Board itself. I rely +further upon the support of the members of the Trade Boards +themselves, who will act as watch-dogs and propagandists. I rely upon +the driving power of publicity and of public opinion. But most of all +I put my faith in the practical effect of a powerful band of +employers, perhaps a majority, who, whether from high motives or +self-interest, or from a combination of the two--they are not +necessarily incompatible ideas--will form a vigilant and instructed +police, knowing every turn and twist of the trade, and who will labour +constantly to protect themselves from being undercut by the illegal +competition of unscrupulous rivals. + +An investigator in the East End of London writes: + +"The people who can check evasion are the large firms. Their +travellers form a magnificent body of inspectors, who ought to see +that the Act is enforced. The checking of evasion will have to be +carried out, not so much by visiting workshops and home-workers as by +hearing where cheap, low-class goods are coming into the market, and +tracing the goods back to the contractors who made them." + +There are solid reasons on which we on this side of the House who are +Free Traders rely with confidence, when we associate ourselves with +this class of legislation. First of all, we must not imagine that this +is the only European country which has taken steps to deal with +sweating. The first exhibition of sweated products was held in Berlin, +and it was from that exhibition that the idea was obtained of holding +that most valuable series of exhibitions throughout this country +which created the driving power which renders this Bill possible. I am +advised that German legislation on some of these questions has even +anticipated us. In other countries legislation is pending on +principles not dissimilar from those which we advocate. In Bavaria and +Baden the latest reports are to the effect that the official +Government Reports of Inquiries recommend almost the same and in some +cases stronger provisions than those to which we now ask the assent of +the House of Commons. This may be said in a different form of Austria. +All this movement which is going on throughout Europe, and which is so +pregnant with good, will be powerfully stimulated by our action in +this country, and that stimulus will not only facilitate our work by +removing the argument which causes hon. gentlemen opposite anxiety, +but it will also, I think, redound to the credit of this country that +it took a leading and prominent position in what is a noble and +benignant work. + +I was delighted to hear the Leader of the Opposition say, in a concise +and cogent sentence, that he could easily conceive many sweated trades +in which the wages of the workers could be substantially raised +without any other change except a diminution of price. Sir, the wages +of a sweated worker bear no accurate relation to the ultimate price. +Sometimes they vary in the same places for the same work done at the +same time. And sometimes the worst sweating forms a part of the +production of articles of luxury sold at the very highest price. We +believe further, however, that decent conditions make for industrial +efficiency and increase rather than diminish competitive power. +"General low wages," said Mill, "never caused any country to undersell +its rivals; nor did general high wages ever hinder it." The employers +who now pay the best wages in these sweated trades maintain themselves +not only against the comparatively small element of foreign +competition in these trades, but against what is a far more formidable +competition for this purpose--the competition of those employers who +habitually undercut them by the worst processes of sweating. I cannot +believe that the process of raising the degenerate and parasitical +portion of these trades up to the level of the most efficient branches +of the trade, if it is conducted by those conversant with the +conditions of the trade and interested in it, will necessarily result +in an increase of the price of the ultimate product. It may, even as +the right hon. gentleman has said, sensibly diminish it through better +methods. + +Sir, it is on these grounds, and within these limits, that I ask for a +Second Reading for this Bill. + +The principles and objects are scarcely disputed here. Let us go into +Committee and set to work upon the details, actuated by a +single-minded desire to produce a practical result. It is by the +evidences of successful experiment that, more than any other way, we +shall forward and extend the area of our operations; and in passing +this Bill the House will not only deal manfully with a grave and +piteous social evil, but it will also take another step along that +path of social organisation into which we have boldly entered, and +upon which the Parliaments of this generation, whatever their +complexion, will have to march. + +FOOTNOTES: + +[14] Otherwise called "The Trade Boards Bill." + + + + +LABOUR EXCHANGES AND UNEMPLOYMENT INSURANCE + +HOUSE OF COMMONS, _May 19, 1909_ + + +The functions of Government in relation to industrial life may be +divided into three categories--discipline, organisation, and relief. +The control and regulation of industrial conditions by penal and +disciplinary powers belong to the Home Office, the relieving and +curative processes are entrusted to the Local Government Board, and +the organisation of industry falls to the province of the Board of +Trade. The proposals which I now submit to the House are concerned +only with organisation; they can be judged only in relation to that +section of the subject; they do not pretend to stretch beyond it, or +to include other not less important aspects; and I ask that they shall +not be impugned, because, in dealing with the evils which properly +fall within that sphere, they do not extend to other evils that lie +without it. + +I ask permission to introduce a Bill for the establishment of a +national system of Labour Exchanges. There is high authority for this +proposal. The Majority and Minority representatives of the Poor Law +Commission, differing in so much else, are agreed unanimously in its +support. "In the forefront of our proposals," says the Majority +Report, "we place Labour Exchanges." "This National Labour Exchange," +says the Minority Report, "though in itself no adequate remedy, is the +foundation of all our proposals. It is, in our view, an indispensable +condition of any real reform." The National Conference of Trade Union +Delegates, convened by the Parliamentary Committee of the Trade Union +Congress, of March 19, 1909, resolved unanimously: "That this +Conference of Trade Union delegates, representing 1,400,000 members, +approves of the establishment of Labour Exchanges on a national basis, +under the control of the Board of Trade, provided that the managing +board contains at least an equal proportion of employers and +representatives of Trade Unions." The Central Unemployed Body for +London, by a Resolution in June 1908, declared in favour of a national +system of Labour Exchanges. Economists as divergent in opinion as +Professor Ashley, of Birmingham, and Professor Chapman, of Manchester, +have all approved and urged the project publicly in the strongest +terms. Several of the principal members of the late Government have, +either in evidence before the Poor Law Commission or in public +speeches, expressed themselves in favour of Labour Exchanges, and the +Report of the delegates of the Labour Party to Germany strongly +approves of the system which they found there, namely: "the +co-ordination and systematic management of Public Labour Exchanges." + +The British authorities which I have mentioned are reinforced by the +example of many foreign countries; and as early as 1904 the Board of +Trade, in its reports on agencies and methods of dealing with +unemployed in foreign countries, drew attention to the very +considerable extension of Labour Exchanges in the last three years in +Germany, Austria, Switzerland, France, and Belgium. Since then Norway +has been added to the list. Mr. W. Bliss, in the Bulletin of the +_Washington Bureau of Labour_ for May, 1908, in the course of a survey +of the whole field of unemployment and of possible remedies, says, +"The most important agencies for providing work for the unemployed +who are employable, but have no prospect of returning to their former +positions, are the public employment bureaux. These are largely +developed in a number of European countries, and especially in +Germany, where they have grown rapidly in the last twenty years, both +in numbers and in efficiency." So that the House will see that we have +behind us this afternoon not only a practical consensus of opinion +among authorities at home in favour of the policy, but the spectacle +of its successful practice on an extensive scale, and over a period of +years, in the greatest industrial community of the Continent, and its +extension in various degrees to many other countries. + +I do not, therefore, propose to occupy the time of the House with any +elaborate justification of the merits of the Bill. Those we may +discuss at our leisure later. I confine myself only to a few general +observations. Two main defects in modern industrial conditions which +were emphasised by the Royal Commission were the lack of mobility of +labour and lack of information. With both of these defects the +National System of Labour Exchanges is calculated to deal. Modern +industry has become national. Fresh means of transport knit the +country into one, as it was never knit before. Labour alone in its +search for markets has not profited; the antiquated, wasteful, and +demoralising method of personal application--that is to say, the +hawking of labour--persists. Labour Exchanges will give labour for the +first time a modernised market. Labour Exchanges, in the second place, +will increase and will organise the mobility of labour. But let me +point out that to increase the _mobility_ of labour is not necessarily +to increase the _movement_ of labour. Labour Exchanges will not +increase the movement of labour; they will only render that movement, +when it has become necessary, more easy, more smooth, more painless, +and less wasteful. + +Labour Exchanges do not pretend to any large extent to create new +employment. Their main function will be to organise the existing +employment, and by organising the existing employment to reduce the +friction and wastage, resulting from changes in employment and the +movement of workers, to a minimum. By so doing they will necessarily +raise the general economic standard of our industrial life. + +So far as the second defect, "lack of information," is concerned, a +system of Labour Exchanges promises to be of the highest value. In +proportion as they are used, they will give absolutely contemporary +information upon the tendencies of the demand for labour, both in +quality and in quantity, as between one trade and another, as between +one season and another, as between one cycle and another, and as +between one part of the country and another. They will tell the worker +where to go for employment. They will tell him, what is scarcely less +important, where it is useless to go in search of employment. Properly +co-ordinated and connected with the employment bureaux of the various +education authorities, which are now coming into existence in Scotland +and in England, they will afford an increasing means of guiding the +new generation into suitable, promising, and permanent employment, and +will divert them from overstocked or declining industries. They will +put an end to that portion of unemployment that is merely local or +accidental in character. They are the only means of grappling with the +evils of casual employment, with all its demoralising consequences. +They are capable of aiding the process of dovetailing one seasonal +trade into another. A system of Labour Exchanges, dispensing with the +need for wandering in search of work, will make it possible, for the +first time, to deal stringently with vagrancy. And, lastly, Labour +Exchanges are indispensable to any system of Unemployment Insurance, +as indeed to any other type of honourable assistance to the +unemployed, since they alone can provide an adequate test of the +desire for work and of the reality of unemployment. The authority of +both Reports of the Poor Law Commission may be cited upon these +points; and I shall present this Bill to the House as an important +piece of social and industrial machinery, the need for which has long +been apparent, and the want of which has been widely and painfully +felt. + +I said that in the creation of such a system we may profit by the +example of Germany; we may do more, we may improve upon the example of +Germany. The German Exchanges, though co-ordinated and encouraged to +some extent by State and Imperial Governments, are mainly municipal in +their scope. Starting here with practically a clear field and with +the advantage of the experiment and the experience of other lands to +guide us, we may begin upon a higher level and upon a larger scale. +There is reason to believe that the utility of a system like Labour +Exchanges, like utility of any other market, increases in proportion +to its range and scope. We therefore propose, as a first principle, +that our system shall be uniform and national in its character; and +here, again, we are supported both by the Minority and by the Majority +Reports of the Royal Commission. + +A Departmental Committee at the Board of Trade has, during the last +six months, been working out the scheme in close detail. The whole +country will be divided into ten or twelve principal divisions, each +with a Divisional Clearing House, and each under a Divisional Chief, +all co-ordinated with the National Clearing House in London. +Distributed among these 10 Divisions in towns of, let us say, 100,000 +or upwards will be between 30 and 40 First-class Labour Exchanges; in +towns of 50,000 to 100,000 between 40 and 50 Second-class Exchanges; +and about 150 minor offices, consisting of Third-class Exchanges, +Sub-Offices, and Waiting-rooms, which last will be specially used in +connection with Dock decasualisation. + +The control and direction of the whole system will be under the Board +of Trade. But in order to secure absolute impartiality as between the +interests of capital and labour, Joint Advisory Committees, to contain +in equal numbers representatives of employers and work-people, will be +established in the principal centres. Thus we shall apply to the local +management of Labour Exchanges the same principle of parity of +representation between workmen and employers under impartial guidance +and chairmanship, that we have adopted in the administration of the +Trade Boards Bill, and that, _mutatis mutandis_, is the governing +feature of the Courts of Arbitration which have recently been set up. +If this Bill should obtain the assent of Parliament without undue +delay, I should hope to bring the system into simultaneous operation +over the whole country, so far as practicable, in the early months of +next year. Temporary premises will be procured in all cases in the +first instance; but a programme of building has been prepared, which +in ten years will by a gradual process enable in all the principal +centres these temporary premises to be replaced by permanent +buildings. + +The expense of this system will no doubt be considerable. Its ordinary +working will not need a sum less than about L170,000 per year, and +during the period when the building is going on the expenditure will +rise to about L200,000 per year. + +We hope that the Labour Exchanges will become industrial centres in +each town. We hope they will become the labour market. They may, where +necessary, provide an office where the Trade Board, if there is one, +will hold its meetings. We desire to co-operate with trade unions on +cordial terms, while preserving strict impartiality between capital +and labour in disputed matters. It may, for instance, be possible for +trade unions to keep their vacant-book in some cases at the exchanges. +The structure of those Exchanges may in some cases be such as to +enable us to have rooms which can be let to trade unions at a rent, +for benefit and other meetings, so as to avoid the necessity under +which all but the strongest unions lie at the present time of +conducting their meetings in licensed premises. The Exchanges may, as +they develop, afford facilities for washing, clothes-mending, and for +non-alcoholic refreshments to persons who are attending them. Separate +provision will be made for men and for women, and for skilled and for +unskilled labour. Boy labour will be dealt with in conjunction with +the local Education Authorities; and travelling expenses may be +advanced on loan, if the management of the Exchange think fit, to +persons for whom situations have been found. + +So much for the policy of Labour Exchanges. That is a policy complete +in itself. It would be considerable if it stood alone; but it does not +stand alone. As my right hon. friend the Chancellor of the Exchequer +has announced in his Budget speech, the Government propose to +associate with the policy of Labour Exchanges a system of Unemployment +Insurance. + +The House knows that the Minority Report advocates a system of +compulsory labour exchanges, that no person shall engage any man for +less than a month except through a Labour Exchange. That is not the +proposal we are making. We are making a proposal of voluntary Labour +Exchanges. I am quite ready to admit that no system of voluntary +Labour Exchanges can deal adequately with the evils and difficulties +of casual labour; but there is one conclusive reason against +compulsory Labour Exchanges at the present time. To establish a +system of compulsory Labour Exchanges in order to eliminate casual +labour, and so to divide among a certain proportion of workers all +available employment, would be absolutely and totally to cast out at +the other end a surplus of unemployed: and to do this before +preparations have been made for dealing with that surplus, would be to +court an administrative breakdown which could not fail to be attended +with the gravest possible disaster. Until poor law reform has made +further progress, to establish a compulsory system of Labour Exchanges +would only increase and not diminish the miseries with which we are +seeking to cope. + +We have, therefore, decided that our system of labour exchanges shall +be voluntary in its character. For that very reason there is a great +danger, to which I have never shut my eyes, that the highest ranks of +labour, skilled workers, members of strong trade unions, would not +think it necessary to use the Exchanges, but would use the very +excellent apparatus which they have established themselves; that +therefore this expensive system of Exchanges which we are calling into +being would come to be used only by the poorest of the workers in the +labour market, and, consequently, would gradually relapse and fall +back into the purely distress machinery and non-economic machinery +from which we are labouring to extricate and separate it. It is for +that reason, quite apart from the merits of the scheme of unemployment +insurance, that the Government are very anxious to associate with +their system of Labour Exchanges a system of unemployed insurance. If +Labour Exchanges depend for their effective initiation and +establishment upon unemployment insurance being associated with them, +it is equally true to say that no scheme of unemployment insurance can +be worked except in conjunction with some apparatus for finding work +and testing willingness to work, like Labour Exchanges. The two +systems are complementary; they are man and wife; they mutually +support and sustain each other. + +So I come to Unemployment Insurance. It is not practicable at the +present time to establish a universal system of unemployment +insurance. We, therefore, have to choose at the very outset of this +subject between insuring some workmen in all trades or all workmen in +some. In the first case we should have a voluntary, and in the second +a compulsory system. The risk of unemployment varies so much between +one man and another owing to relative skill, character, demeanour, and +other qualities, that any system of State-aided voluntary insurance is +utilised mainly by those most liable to be unemployed, and, +consequently, a preponderance of bad risks is established against the +Insurance Office fatal to its financial stability. On the other hand, +a compulsory system of insurance, which did not add to the +contribution of the worker a substantial contribution from outside, +would almost certainly break down, because of the refusal of the +higher class of worker to assume, unsupported, a share of the burden +of the weaker members of the community. + +We have decided to adopt the second alternative, and our insurance +system will, in consequence, be based upon four main principles. It +will involve contributions from workmen and employers; it will receive +a substantial subvention from the State; it will be organised by +trades; it will be compulsory upon all--employers and employed, +skilled and unskilled, unionists and non-unionists alike--within +those trades. The hon. Member for Leicester[15] with great force +showed that to confine a scheme of unemployment insurance merely to +trade unionists would be trifling with the subject. It would only be +aiding those who have, thank God, been most able to aid themselves, +without at the same time assisting those who hitherto, under existing +conditions, have not been able to make any effective provision. + +To what trades ought we, as a beginning, to apply this system of +compulsory contributory unemployment insurance? There is a group of +trades specially marked out for the operation of such a policy. They +are trades in which unemployment is not only high, but chronic, for +even in the best of times it persists; in which it is not only high +and chronic, but marked by seasonal and cyclical fluctuations, and in +which, wherever and howsoever it occurs, it takes the form not of +short time or of any of those devices for spreading wages and +equalising or averaging risks, but of a total, absolute, periodical +discharge of a certain proportion of the workers. The group of trades +which we contemplate to be the subject of our scheme are these: +house-building, and works of construction, engineering, machine-and +tool-making, ship-building and boat-building, making of vehicles, and +mill-sawing. + +That is a very considerable group of industries. They comprise, +probably at the present time, 21/4 millions of adult males. Two and a +quarter millions of adult males are, roughly speaking, one-third of +the population of these three kingdoms engaged in purely industrial +work; that is to say, excluding commercial, professional, +agricultural, and domestic occupations. Of the remaining two-thirds of +the industrial population, nearly one-half are employed in the textile +trades, in mining, on the railways, in the merchant marine, and in +other trades, which either do not present the same features of +unemployment which we see in these precarious trades, or which, by the +adoption of short time or other arrangements, avoid the total +discharge of a proportion of workmen from time to time. So that this +group of trades to which we propose to apply the system of +unemployment insurance, roughly speaking, covers very nearly half of +the whole field of unemployment; and that half is, on the whole, +perhaps the worse half. + +The financial and actuarial basis of the scheme has been very +carefully studied by the light of all available information. The +report of the actuarial authorities whom I have consulted leaves me in +no doubt that, even after all allowance has been made for the fact +that unemployment may be more rife in the less organised and less +highly skilled trades than in the trade unions who pay unemployment +benefits--which is by no means certain--there is no doubt whatever +that a financially sound scheme can be evolved which, in return for +moderate contributions, will yield adequate benefits. I do not at this +stage propose to offer any figures of contributions or benefits to the +House. I confine myself to stating that we propose to aim at a scale +of benefits which would be somewhat lower both in amount and in +duration of payments, than that which the best-organised trade unions +provide for their own members, but which, at the same time, should +afford a substantial weekly payment extending over by far the greater +part of the average period of unemployment of all unemployed persons +in these trades. + +In order to enable such a scale of benefits to be paid, we should have +to raise a total sum of something between 5d. and 6d. per week per +head, and this sum will be met by contributions, not necessarily +equal, from the State, the workman, and the employer. For such +sacrifices, which are certainly not extortionate, and which, fairly +adjusted, will not hamper industry nor burden labour, nor cause an +undue strain on public finance, we believe it possible to relieve a +vast portion of our industrial population from a haunting and constant +peril which gnaws the very heart of their prosperity and contentment. + +The House will see the connection of this to the Labour Exchanges. The +machinery of the insurance scheme has been closely studied, and, as at +present advised, we should propose to follow the example of Germany in +respect of Insurance Cards or Books, to which stamps will be affixed +week by week. When a worker in an insured trade loses his employment, +all he will have to do is to take his card to the Labour Exchange, +which, working in conjunction with the Insurance Office, will find him +a job or pay him his benefit. + +The relation of the whole scheme of insurance to the present voluntary +efforts of trade unions requires, and will receive, the most anxious +consideration, and I am in hopes that we shall be able to make +proposals which would absolutely safeguard trade unions from the +unfair competition of a national insurance fund, and will indeed act +as a powerful encouragement to voluntary organisations which are +providing unemployed benefit. + +I have thought it right to submit these not inconsiderable proposals +in general outline to the House of Commons at this early stage, in +order that the proposals for Labour Exchanges which we are now putting +forward may be properly understood, and may not be underrated or +misjudged. We cannot bring the system of unemployment insurance before +Parliament in a legislative form this year for five reasons: We have +not now got the time; we have not yet got the money; the finance of +such a system has to be adjusted and co-ordinated with the finance of +the other insurance schemes upon which the Chancellor of the Exchequer +is engaged; the establishment of a system of Labour Exchanges is the +necessary forerunner and foundation of a system of insurance; and, +lastly, no such novel departure as unemployment insurance could +possibly be taken without much further consultation and negotiation +with the trade unions and employers specially concerned than the +conditions of secrecy under which we have been working have yet +allowed. This business of conference and consultation of the fullest +character will occupy the winter, when the Board of Trade will confer +with all parties affected, so that the greatest measure of agreement +may be secured for our proposals when they are next year presented in +their final form. + +It is only necessary for me to add that the pressure and prospect of +these heavy duties have required me to make a re-arrangement of the +Labour Department of the Board of Trade. I propose to divide it into +three sections. The first will be concerned with Wages questions and +Trade disputes, with Arbitration, Conciliation, and with the working +of the Trade Boards Bill, should it become law; the second, with +Statistics, the Census of Production, Special Inquiries, and _The +Labour Gazette_; and the third, with Labour Exchanges and Unemployment +Insurance. + +One of the functions of the last section will be to act as a kind of +intelligence bureau, watching the continual changes of the labour +market here and abroad, and suggesting any measure which may be +practicable, such as co-ordination and distribution of Government +contracts and municipal work, so as to act as a counterpoise to the +movement of the ordinary labour market, and it will also, we trust, be +able to conduct examinations of schemes of public utility, so that +such schemes can, if decided upon by the Government and the Treasury, +be set on foot at any time with knowledge and forethought, instead of +the haphazard, hand-to-mouth manner with which we try to deal with +these emergencies at the present time. + +Such are the proposals which we submit in regard to the organisation +section of this problem. I have carefully confined myself to that +section. I have not trespassed at all upon the other no less important +or scarcely less important branches, and I am quite certain this +Parliament will gladly devote whatever strength it possesses to +attempting to grapple with these hideous problems of social chaos, +which are marring the contentment and honour of our country, and +which, neglected, may fatally affect its life and its strength. + +FOOTNOTES: + +[15] Mr. Ramsay MacDonald. + + + + +III + +THE BUDGET + + +THE BUDGET RESOLUTIONS (May 4, 1909) 277 + +THE BUDGET AND NATIONAL INSURANCE (May 23, 1909) 297 + +THE LAND AND INCOME TAXES (July 17, 1909) 318 + +THE BUDGET AND THE LORDS (July 26, 1909) 344 + +THE SPIRIT OF THE BUDGET (Sept. 5, 1909) 357 + +THE BUDGET AND PROPERTY (Oct. 7, 1909) 384 + +THE CONSTITUTIONAL MENACE (Oct. 9, 1909) 405 + + + + +THE BUDGET RESOLUTIONS + +HOUSE OF COMMONS, _May 4, 1903_ + + +The Leader of the Opposition this afternoon told us that we were at +the beginning of what would be a very complex and a very protracted +discussion. If that discussion continues as it has begun, the +Government will have no reason to complain of it. We have made +extensive and even daring proposals. Those proposals have been +accepted and, on the whole, even acclaimed by the public at large, and +they have not been substantially challenged in this House. The Leader +of the Opposition, it is true, devoted his reasoned and temperate +speech to making a careful inquiry into the foundations and the +character of certain of the taxes by which my right hon. friend +proposes to raise the revenue for the year; and I gathered he +accepted, with such reservations as are proper to all engaged in a +large discussion, and as are particularly appropriate to a Party +leader, the general principle of differentiation of taxation in regard +to the amount of property, but that he demurred to and condemned +differentiation in regard to the character of property. The right hon. +gentleman singled out for special censure and animadversion the two +sets of taxes in relation to land and to the licensed trade. He used +an expression about some of the forms of taxation proposed by the +Chancellor of the Exchequer which was a striking one. He said that +they diverged from the principles which have hitherto dominated +civilised society. + +Even at the risk of that accusation we on this side of the House have +always taken and will always assert an entirely different position in +regard to the taxation of land and of liquor licences from that of the +taxation of other classes of property. The immemorial custom of nearly +every modern State, the mature conclusions of many of the greatest +thinkers, have placed the tenure, transfer, and obligations of land in +a wholly different category from other classes of property. The mere +obvious physical distinction between land, which is a vital necessity +of every human being and which at the same time is strictly limited +in extent, and other property is in itself sufficient to justify a +clear differentiation in its treatment, and in the view taken by the +State of the conditions which should govern the tenure of land from +that which should regulate traffic in other forms of property. When +the right hon. gentleman seeks by comparisons to show that the same +reasoning which has been applied to land ought also in logic and by +every argument of symmetry to be applied to the unearned increment +derived from other processes which are at work in our modern +civilisation, he only shows by each example he takes how different are +the conditions which attach to the possession of land and speculation +in the value of land from those which attach to other forms of +business speculation. + +"If," he inquires, "you tax the unearned increment on land, why don't +you tax the unearned increment from a large block of stocks? I buy a +piece of land; the value rises; I buy stocks; their value rises." But +the operations are entirely dissimilar. In the first speculation the +unearned increment derived from land arises from a wholly sterile +process, from the mere withholding of a commodity which is needed by +the community. In the second case, the investor in a block of shares +does not withhold from the community what the community needs. The one +operation is in restraint of trade and in conflict with the general +interest, and the other is part of a natural and healthy process, by +which the economic plant of the world is nourished and from year to +year successfully and notably increased. + +Then the right hon. gentleman instanced the case of a new railway and +a country district enriched by that railway. The railway, he +explained, is built to open up a new district; and the farmers and +landowners in that district are endowed with unearned increment in +consequence of the building of the railway. But if after a while their +business aptitude and industry creates a large carrying trade, then +the railway, he contends, gets its unearned increment in its turn. But +the right hon. gentleman cannot call the increment unearned which the +railway acquires through the regular service of carrying goods, +rendering a service on each occasion in proportion to the tonnage of +goods it carries, making a profit by an active extension of the scale +of its useful business--he cannot surely compare that process with +the process of getting rich merely by sitting still. It is clear that +the analogy is not true. + +We are further told that the Budget proposals proceed on the +assumption that there is a corner in land, and that communities are +denied the opportunity of getting the land required, whereas, it is +asserted, there is in fact nothing approaching a corner in land. I do +not think the Leader of the Opposition could have chosen a more +unfortunate example than Glasgow. He said that the demand of that +great community for land was for not more than forty acres a year. Is +that the only demand of the people of Glasgow for land? Does that +really represent the complete economic and natural demand for the +amount of land a population of that size requires to live on? I will +admit that at present prices it may be all that they can afford to +purchase in the course of a year. But there are one hundred and twenty +thousand persons in Glasgow who are living in one-room tenements; and +we are told that the utmost land those people can absorb economically +and naturally is forty acres a year. What is the explanation? Because +the population is congested in the city the price of land is high upon +the suburbs, and because the price of land is high upon the suburbs +the population must remain congested within the city. That is the +position which we are complacently assured is in accordance with the +principles which have hitherto dominated civilised society. + +But when we seek to rectify this system, to break down this unnatural +and vicious circle, to interrupt this sequence of unsatisfactory +reactions, what happens? We are not confronted with any great argument +on behalf of the owner. Something else is put forward, and it is +always put forward in these cases to shield the actual landowner or +the actual capitalist from the logic of the argument or from the force +of a Parliamentary movement. Sometimes it is the widow. But that +personality has been used to exhaustion. It would be sweating in the +cruellest sense of the word, overtime of the grossest description, to +bring the widow out again so soon. She must have a rest for a bit; so +instead of the widow we have the market-gardener--the market-gardener +liable to be disturbed on the outskirts of great cities, if the +population of those cities expands, if the area which they require for +their health and daily life should become larger than it is at +present. + +I should like to point out to the Committee that the right hon. +gentleman, in using this argument about the market-gardener, +recognises very clearly--and I think beyond the possibility of a +withdrawal--the possibility of these cities expanding and taking up a +larger area of ground in consequence of the kind of taxation which my +right hon. friend in his land taxes seeks to impose. But let that +pass. What is the position disclosed by the argument? On the one hand +we have one hundred and twenty thousand persons in Glasgow occupying +one-room tenements; on the other, the land of Scotland. Between the +two stands the market-gardener, and we are solemnly invited, for the +sake of the market-gardener, to keep that great population congested +within limits that are unnatural and restricted to an annual supply of +land which can bear no relation whatever to their physical, social, +and economic needs--and all for the sake of the market-gardener, who +can perfectly well move farther out as the city spreads, and who would +not really be in the least injured. + +We take the view that land cannot be regarded as an ordinary +commodity, nor are we prepared to place publicans' licences in the +same position as ordinary property. A licence is a gift from the +State, and the licensed trade is subject to special restrictions and +special taxation; this has been recognised by all parties and by all +Governments. The position in regard to licences, as we know perfectly +well, has been sensibly and, indeed, entirely altered in the course of +the last few years. We have seen the assertion on the part of the +licensed trade of their right to convert their annual tenancy of a +licence from what it has been understood to be, to a freehold, and in +that position they must face the logical consequences of the arguments +they have used and of their action. If there are any hardships to them +in the taxation proposed, let the hardships be exposed to Parliament +and they will be considered in no spirit of prejudice or malice. Do +not, however, let us have attempts to represent that the tax which +involves an increase in the cost of production extinguishes the +profits of the industry. It does not necessarily affect the profits of +the industry; it is not a deduction from resultant profits; it is an +incident in the turnover. If there are hard cases and special +instances, we are prepared to meet them with the closest attention and +with a desire to avoid severity or anything like the appearance of +harsh treatment of individuals. But we decline to regard licences or +land on the same footing as ordinary property. Licences are not to be +regarded as ordinary private property, but as public property which +ought never to have been alienated from the State. + +No one will deny that we are making very considerable proposals to +Parliament for the finance of the year; but the Conservative Party +have gravely compromised their power of resistance. Those who desire +to see armaments restricted to the minimum consistent with national +security, those who labour to combat the scares of war, and to show +how many alarms have no foundation,--those are not ill-situated, if +they choose to make criticisms on the scale and scope of the finance +required for the year's expenditure. But an Opposition that day after +day exposes the First Lord of the Admiralty and the Prime Minister to +a rain of questions and cross-questions, the only object of which, or +an important object of which, is to promote a feeling of insecurity, +involving demands for new expenditure of an almost indefinite +character, those who, like the right hon. Member for Dover,[16] hurry +to and fro in the land saying--or was it singing?--"We want eight, and +we won't wait"--they, at least, are not in the best position to tell +the taxpayer to call on some one else. Surely a reputation for +patriotism would be cheaply gained by clamouring for ships that are +not needed, to be paid for with money that is to come from other +people. + +There is another set of arguments to which I should like to refer. We +have been long told that this Budget would reveal the bankruptcy of +free-trade finance, and the Leader of the Opposition, seeking from +time to time for a sound economic foothold in the fiscal quicksands in +which he is being engulfed, has endeavoured to rest the sole of his +foot on tariff for revenue. The adoption of a policy of tariff reform, +we have been told, had become absolutely necessary if the revenue of +the country was to be obtained and if a natural expansion were to be +imparted to it. But now, if we may judge from the newspapers, one of +the complaints made against the free-trade system and the free-trade +Budget of my right hon. friend is not that the revenue will expand too +little, but that there is the possibility that it will expand too +much. It is not that we have reached the limits of practicable +free-trade taxation, but that the taxation we now ask Parliament to +assent to, will yield in the second year a much more abundant return +than in the first year, and that in subsequent years the yield will +increase still further. In the words of _The Times_ newspaper: "The +Chancellor of the Exchequer has laid broad and deep the basis of +further revenue for future years." + +Those who lately taunted us with being arrested by a dead wall of +Cobdenite principles are now bewailing that we have opened up broad +avenues of financial advance. They came to bewail the deficit of this +year: they remained to censure the surplus of next. We may, no doubt, +in the future hear arguments of how protection will revive industry +and increase employment, as we have heard them in the past; but there +is one argument which I should think it unlikely would be effectively +used against us in the future, and that is that a free-trade system +cannot produce revenue, because one of the criticisms which is +emphatically directed against this Budget is on account of that very +expansiveness of revenue which it was lately declared a free-trade +system never could produce. + +But that is not the only vindication of free-trade finance which is at +hand. How have foreign countries stood the late depression in trade? +The shortfall of the revenue from the estimates in this country was +last year less than two millions, in Germany it was eight millions, +and in the United States over nineteen millions. Let the House see +what fair-weather friends these protectionist duties are. In times of +depression they shrink. In times of war they may fail utterly. When +they are wanted, they dwindle, when they are wanted most urgently, +they fade and die away altogether. + +And what is true of the taxation of manufactured articles as a +foundation for any fiscal policy is true still more of the taxation of +food, and of no country is it so true as of this island. For if you +were ever engaged in a war which rendered the highways of the ocean +insecure the rise in prices would be such that all food taxes would +have to be swept away at once by any Government which desired to use +the whole vigour of its people in prosecuting the war. This year, with +its trade depression and its excellent maintenance of the revenue, +has seen the vindication of free trade as a revenue-producing +instrument; next year will see its triumph. + +I have no apprehensions about the Budget which is now before the +Committee. As Mr. Gladstone said, in introducing the Reform Bill of +1884, what is wanted to carry this measure is concentration and +concentration only, and what will lose this measure is division and +division only. And I venture to think that it will not only be a +demonstration of the soundness of the economic fiscal policy we have +long followed, but it will also be a demonstration of the fiscal and +financial strength of Great Britain which will not be without its use +and value upon the diplomatic and perhaps even upon the naval +situation in Europe. + +The right honourable Member for East Worcestershire[17] said this +Budget was the work of several sessions, if not indeed of several +Parliaments. The statement is exaggerated. The proposals outlined do +not in any degree transcend the limits of the practical. A social +policy may be very large, but at the same time it may be very simple. +All these projects of economic development, of labour exchanges, of +insurance for invalidity, and unemployment, which depend on money +grants, may require very careful and elaborate administrative +adjustment; but so far as Parliament is concerned they do not impose +difficulties or make demands upon the time of the House in any way +comparable to those which are excited by the passage of an Education +or a Licensing Bill, and I see no reason whatever why we should not +anticipate that in the course of this session and next session we +should be able to establish a wide and general system of national +insurance, which, more than any other device within the reach of this +generation of the workers of our country, will help to hold off from +them some of the most fatal and most cruel perils which smash their +households and ruin the lives of families and of workmen. + +On many grounds we may commend this Budget to the House. It makes +provision for the present. It makes greater provision for the future. +Indirect taxation reaches the minimum. Food taxation reaches the +minimum since the South African war. Certainly the working classes +have no reason to complain. Nothing in the Budget touches the +physical efficiency and energy of labour. Nothing in it touches the +economy of the cottage home. Middle-class people with between L300 and +L2,000 a year are not affected in any considerable degree, except by +the estate duties, and in that not to a large extent, while in some +cases they are distinctly benefited in the general way of taxation. +The very rich are not singled out for peculiar, special, or invidious +forms of imposition. + +The chief burden of the increase of taxation is placed upon the main +body of the wealthy classes in this country, a class which in number +and in wealth is much greater than in any other equal community, if +not, indeed, in any other modern State in the whole world; and that is +a class which, in opportunities of pleasure, in all the amenities of +life, and in freedom from penalties, obligations, and dangers, is more +fortunate than any other equally numerous class of citizens in any age +or in any country. That class has more to gain than any other class of +his Majesty's subjects from dwelling amid a healthy and contented +people, and in a safely guarded land. + +I do not agree with the Leader of the Opposition, that they will meet +the charges which are placed upon them for the needs of this year by +evasion and fraud, and by cutting down the charities which their good +feelings have prompted them to dispense. The man who proposes to meet +taxation by cutting down his charities, is not the sort of man who is +likely to find any very extensive source of economy in the charities +which he has hitherto given. As for evasion, I hope the right hon. +gentleman and his supporters underrate the public spirit which +animates a proportion at any rate of the class which would be most +notably affected by the present taxation. And there is for their +consolation one great assurance which is worth much more to them than +a few millions, more or less, of taxation. It is this--that we are +this year taking all that we are likely to need for the policy which +is now placed before the country, and which will absorb the energies +of this Parliament. And, so far as this Parliament is concerned, it is +extremely unlikely, in the absence of a national calamity, that any +further demand will be made upon them, or that the shifting and vague +shadows of another impending Budget will darken the prospects of +improving trade. + +When all that may be said on these grounds has been said, we do not +attempt to deny that the Budget raises some of the fundamental issues +which divide the historic Parties in British politics. We do not want +to embitter those issues, but neither do we wish to conceal them. We +know that hon. gentlemen opposite believe that the revenue of the +country could be better raised by a protective tariff. We are +confident that a free-trade system alone would stand the strain of +modern needs and yield the expansive power which is necessary at the +present time in the revenue. And our proof shall be the swift +accomplishment of the fact. The right hon. gentleman opposite and his +friends seek to arrest the tendency to decrease the proportion of +indirect to direct taxation which has marked, in unbroken continuity, +the course of the last sixty years. We, on the other hand, regard that +tendency as of deep-seated social significance, and we are resolved +that it shall not be arrested. So far as we are concerned, we are +resolved that it shall continue until in the end the entire charge +shall be defrayed from the profits of accumulated wealth and by the +taxation of those popular indulgences which cannot be said in any way +to affect the physical efficiency of labour. The policy of the +Conservative Party is to multiply and extend the volume and variety of +taxes upon food and necessaries. They will repose themselves, not +only, as we are still forced to do, on tea and sugar, but upon bread +and meat--not merely upon luxuries and comforts, but also on articles +of prime necessity. Our policy is not to increase, but whenever +possible to decrease, and ultimately to abolish altogether, taxes on +articles of food and the necessaries of life. + +If there is divergence between us in regard to the methods by which we +are to raise our revenue, there is also divergence in regard to the +objects on which we are to spend them. We are, on both sides, inclined +to agree that we are approaching, if we have not actually entered on, +one of the climacterics of our national life. We see new forces at +work in the world, and they are not all friendly forces. We see new +conditions abroad and around us, and they are not all favourable +conditions; and I think there is a great deal to be said for those who +on both sides of politics are urging that we should strive for a more +earnest, more strenuous, more consciously national life. But there we +part, because the Conservative Party are inclined too much to repose +their faith for the future security and pre-eminence of this country +upon naval and military preparations, and would sometimes have us +believe that you can make this country secure and respected by the +mere multiplication of ironclad ships. We shall not exclude that +provision, and now indeed ask the Committee to enable us to take the +steps to secure us that expansion of revenue which will place our +financial resources beyond the capacity of any Power that we need to +take into consideration. But we take a broader view. We are not going +to measure the strength of great countries only by their material +resources. We think that the supremacy and predominance of our country +depend upon the maintenance of the vigour and health of its +population, just as its true glory must always be found in the +happiness of its cottage homes. We believe that if Great Britain is to +remain great and famous in the world, we cannot allow the present +social and industrial disorders, with their profound physical and +moral reactions, to continue unchecked. We propose to you a financial +scheme, but we also advance a policy of social organisation. It will +demand sacrifices from all classes; it will give security to all +classes. By its means we shall be able definitely to control some of +the most wasteful processes in our social life, and without it our +country will remain exposed to vital dangers, against which fleets and +armies are of no avail. + +FOOTNOTES: + +[16] Mr. Wyndham. + +[17] Mr. Austen Chamberlain. + + + + +THE BUDGET AND NATIONAL INSURANCE + +THE FREE TRADE HALL, MANCHESTER, _May 23, 1909_ + +(From _The Manchester Guardian_, by permission.) + + +Considering that you have all been ruined by the Budget, I think it +very kind of you to receive me so well. When I remember all the +injuries you have suffered--how South Africa has been lost; how the +gold mines have been thrown away; how all the splendid army which Mr. +Brodrick got together has been reduced to a sham; and how, of course, +we have got no navy of any kind whatever, not even a fishing smack, +for the thirty-five millions a year we give the Admiralty; and when I +remember that in spite of all these evils the taxes are so oppressive +and so cruel that any self-respecting Conservative will tell you he +cannot afford either to live or die, I think it remarkable that you +should be willing to give me such a hearty welcome back to Manchester. +Yes, sir, when I think of the colonies we have lost, of the Empire we +have alienated, of the food we have left untaxed, and the foreigners +we have left unmolested, and the ladies we have left outside, I +confess I am astonished to find you so glad to see me here again. + +It is commonly said that our people are becoming hysterical, and that +Britain is losing her old deep-seated sagacity for judging men and +events. That is not my view. I have been taught that the dock always +grows near the nettle. I am inclined to think that in a free community +every evil carries with it its own corrective, and so I believe that +sensationalism of all kinds is playing itself out, and, overdoing, is +itself undone. And the more our scaremongers cry havoc, and panic, and +airships, and sea-serpents, and all the other things they see floating +around, the greater is the composure and the greater is the contempt +with which the mass of the nation receives these revelations, and the +more ready they are to devote their mind to the large and serious +problems of national and social organisation which press for solution +and for action at the present time, and upon which his Majesty's +Government have notable proposals to make. + +I come to you this afternoon to speak about the political situation +and the Budget, or rather I come to speak to you about the Budget, +because the Budget is the political situation; and I ask you, as if it +were at an election, whether you will support the policy of the Budget +or not. Let us look into it. + +What is the position in which we find ourselves? After reducing the +taxes on coal, on tea, on sugar, and on the smaller class of incomes +by nearly L7,000,000 a year, and after paying back L40,000,000 of debt +in three years, we find that new circumstances and new needs make it +necessary that we should obtain fresh revenue for the service of the +State. + +What are the reasons for this demand? There are three reasons--and +only three. Old-age pensions, the navy, and the decrease in the +revenue derived from alcoholic liquor. From those three causes we +require sixteen millions more money this year than we did last year. +Now who has a right--this is my first question--to reproach us for +that? Certainly the Conservative Party have no right. + +Take first the case of old-age pensions. I do not think their record +is a very good one on that. They promised old-age pensions to win the +general election of 1895. They were in power for ten years and they +made no effort to redeem their pledge. Again, Mr. Chamberlain, in +1903, promised old-age pensions as a part of his Tariff Reform +proposal, but the Conservative Party refused to agree to the inclusion +of old-age pensions in that programme and forced that great man in the +height of his power and his career to throw out old-age pensions from +the Tariff Reform programme and to write a letter to the newspapers to +say that he had done so. + +We, the Liberal Party, did not promise old-age pensions at the +election of 1906. The subject was scarcely mentioned by any of the +candidates who are now your Members. Certainly it did not occupy at +all a prominent position. We did not promise old-age pensions; we gave +old-age pensions. When the Old-Age Pensions Bill was before the House +of Commons, what was the attitude of the Conservative Party? Did they +do anything to try to reduce or control the expenditure of that great +departure? On the contrary. As my right honourable friend the +Chancellor of the Exchequer has told the House of Commons, amendments +to the Old-Age Pensions Bill were moved or received the official +support of the Whips of the Conservative Party which would have +raised the cost of that scheme to fourteen millions a year. And the +Liberal Government, which was making this great effort, which was +doing the work, which was keeping the Tory promise, was reproached and +was derided for not accepting the proposals which these irresponsible +philanthropists, these social reformers on the cheap, these +limited-liability politicians, were so ready to move. And Lord +Halsbury, the late Lord Chancellor, one of the leaders of the +Conservative Party, a man with a powerful influence in their councils, +said in a public speech that the old-age pensions as proposed by the +Government were so paltry as to be almost a mockery. + +I do not think any fair-minded or impartial man, or any average +British jury, surveying the record of the Conservative Party upon +old-age pensions, could come to any other conclusion than that they +had used this question for popularity alone; that they never meant to +give old-age pensions; that they only meant to get votes by promising +to give them; that they would have stopped them being given if they +could; that while the Bill was on its way they tried to embarrass the +Government, and to push things to unpractical extremes; and now, even +when the pensions have been given, they would not pay for them if they +could help it. Let me say that I think the conclusion, which I believe +any jury would come to, would perhaps be rather harsh upon the +Conservative Party. I believe they meant better than their record; I +am willing to admit that. But their record is before us, and it is a +bad one, and upon the facts I have no hesitation in saying that it is +not open to them to protest--they have not even an inch of foothold to +protest--against any expenditure which we may now have to incur in +order to defray the consequences of the policy of old-age pensions. So +much for the first cause of the increased expenditure. + +I pass to the navy. The Naval Estimates have risen by three millions +this year. I regret it; but I am prepared to justify it. There will be +a further increase next year. I regret it; but within proper limits +necessary to secure national safety I shall be prepared to justify it; +but I hope you will not expect me to advocate a braggart and +sensational policy of expenditure upon armaments. I have always been +against that, as my father was before me. + +In my judgment, a Liberal is a man who ought to stand as a restraining +force against an extravagant policy. He is a man who ought to keep +cool in the presence of Jingo clamour. He is a man who believes that +confidence between nations begets confidence, and that the spirit of +peace and goodwill makes the safety it seeks. And, above all, I think +a Liberal is a man who should keep a sour look for scaremongers of +every kind and of every size, however distinguished, however +ridiculous--and sometimes the most distinguished are the most +ridiculous--a cold, chilling, sour look for all of them, whether their +panic comes from the sea or from the air or from the earth or from the +waters under the earth. + +His Majesty's Government are resolved that the defensive measures of +this country shall be prescribed by the policy of Ministers +responsible to Parliament, and by the calculations, subject to that +policy, of the experts on whom those Ministers rely, and not by the +folly and the clamour of Party politicians or sensational journalists. +In that determination we as a Government are united, and we shall +remain united. Yet it is clear that the increase in the Naval +Estimates of this year must be followed by another increase in those +of next year. That is deplorable. It will impose upon our finances a +strain which some other nations would not find it very easy to bear, +but which, if the necessity be proved, this country will not be +unwilling, and will certainly not be unable to support. + +Well, but what have the Conservative Party got to say about it? Have +they any right to complain of the taxes which are necessary for the +maintenance of our naval power? Do we not see that they are ever +exerting themselves to urge still greater expenditure upon the nation? +He is a poor sort of fellow, a penny-plain-twopence-coloured kind of +patriot who goes about shouting for ships, and then grudges the money +necessary to build them. And when Mr. Balfour tells us that "gigantic +sacrifices" are required, and that those gigantic sacrifices "must +begin now," and then at the same time objects to the taxes by which +the Government proposes to raise the money, he puts himself in a very +queer position. + +I have dealt with two of the causes which have led to our demand for +further revenue--old-age pensions and the navy. Upon neither of them +have the Conservative Party any ground for attacking us. What is the +third? Ah, gentlemen, I agree that there is one cause of the +prospective deficit for which we are budgeting for which the +Conservative Party is in no way responsible. I mean the decline in the +consumption of alcoholic liquors. Nothing that they have said and +nothing that they have done has, in intention or in fact, contributed +to the drying up of that source of revenue. On the contrary, by their +legislation, by the views they have taken of the rights of the +licensed trade, by their resistance to every measure of temperance +reform, by their refusal even to discuss in the House of Lords the +great Licensing Bill of last year, by their association with the +brewers and with the liquor traffic generally, they have done all they +could--I do them the justice to admit it--to maintain the Customs and +Excise from alcoholic liquors at the highest level. If the habits of +the people, under the influences of a wider culture, of variety, of +comfort, of brighter lives, and of new conceptions, have steadily +undergone a beneficent elevation and amelioration, it has been in +spite of every obstacle that wealth and rank and vested interest could +interpose. + +The money has to be found. There is no Party in the State who can +censure us because of that. Our proposals for enlarging the public +revenue are just and fair to all classes. They will not, in spite of +all these outcries you hear nowadays, sensibly alter the comfort or +status, or even the elegance of any class in our great and varied +community. No man, rich or poor, will eat a worse dinner for our +taxes. + +Of course, from a narrow, electioneering point of view, there are a +great many people--I believe they are wrong--who think we should have +done much better if we had put another penny on the income tax instead +of increasing the tax upon tobacco. Well, I have come here this +afternoon to tell you that we think it right that the working classes +should be asked to pay a share towards the conduct of a democratic +State. And we think that taxes on luxuries, however widely consumed, +are a proper channel for such payment to be made. We believe that the +working classes are able to pay by that channel, and we believe, +further, that they are ready to pay. We do not think that in this old, +wise country they would have respected any Government which at a time +like this had feared to go to them for their share. + +I have a good confidence that this Budget is going to go through. If +there are hardships and anomalies in particular cases or particular +quarters, we are ready to consider them. They will emerge in the +discussions of the House of Commons, and we have every desire to +consider them and to mitigate them. But we believe in the situation in +which we find ourselves in this country, and in the general situation +of the world at the present time--that the taxes on incomes over +L3,000 a year, upon estates at death, on motor-cars before they cause +death, upon tobacco, upon spirits, upon liquor licences, which really +belong to the State, and ought never to have been filched away; and, +above all, taxes upon the unearned increment in land are necessary, +legitimate, and fair; and that without any evil consequences to the +refinement or the richness of our national life, still less any injury +to the sources of its economic productivity, they will yield revenue +sufficient in this year and in the years to come to meet the growing +needs of Imperial defence and of social reform. + +This Budget will go through. It will vindicate the power of the House +of Commons. It will show, what some people were inclined to forget, +that in our Constitution a Government, supported by a House of Commons +and the elected representatives of the people, has in fact a full +control of national affairs, and has the means of giving effect to its +intentions, to its policy, and to its pledges in every sphere of +public affairs. + +That is one thing which the passage of this Budget will show. Let not +that be overlooked. But that is not the only thing; the Budget will do +more than that. It will reveal the financial strength of Britain. At a +time when every European country is borrowing merely for the needs of +ordinary annual expenditure, when all these disturbing naval +programmes, which are injuring the peace of the world and the security +and progress of civilisation, are being supported by borrowed money; +and when the credit of Germany has fallen below that of Italy, this +country, which has necessarily to make the biggest expenditure for +naval defence of any country, will be found, under a Free Trade system +and by our proposals, able not only to pay its way, but to pay off the +debts of the past--to pay off the debts of our predecessors--even in +the worst of times at the rate of something like L7,000,000 a year. + +I have spoken to you of the causes which in the past have led up to +this Budget. I have spoken to you of its present justification. What +of the future? If I had to sum up the immediate future of democratic +politics in a single word I should say "Insurance." That is the +future--Insurance against dangers from abroad. Insurance against +dangers scarcely less grave and much more near and constant which +threaten us here at home in our own island. I had the honour and +opportunity a few days ago of explaining to the House of Commons our +proposals for unemployment insurance. That is a considerable matter. +It stands by itself. It is a much simpler question than invalidity +insurance; but it is a great matter by itself. Indeed, I thought while +I was explaining it to the House of Commons that I had not made such +an important speech since I had the honour of explaining the details +of the Transvaal Constitution. + +Well, what is the proposal? The proposal is that you should make a +beginning. We have stood still too long. We should begin forthwith, +taking some of the greatest trades of the country in which +unemployment is most serious, in which fluctuations are most severe, +in which there are no short-time arrangements to mitigate the +severity to the individual; and that a system of compulsory +contributory insurance, with a large subvention from the State, should +be introduced into those great industries. + +But our proposals go farther than that. The State assistance to +unemployment insurance will not be limited to those trades in which it +is compulsory. Side by side with the compulsory system we shall offer +facilities to voluntary insurance schemes in other trades, managed by +trade unions or by societies or groups of workmen. Moreover, we +contemplate that the State insurance office should undertake, if +desired, the insurance against unemployment of any individual workman +in any trade outside of those for which compulsory powers are +required, and should afford to these individuals an equivalent support +to that which is given in the trades which are subject to the +compulsory system. + +Of course you will understand that the terms, that can be offered +under a voluntary or partial system, are not so good as those which +can be obtained in the compulsory system of a great trade. Where all +stand together, it is much better for each. But still it is certain +that individuals who take advantage of the insurance policy which +will be introduced, and I trust carried through Parliament next year, +will be able to secure terms which will be much more favourable than +any which are open to them by their unaided contributions at the +present time, because their contributions will be reinforced by the +contributions of the State. Further, if our beginning proves a success +the attempt and the system will not stop there. It will be extended, +and in proportion as experience and experiment justify its extension, +in proportion as the people of this country desire its extension, it +must eventually cover, in course of years, the whole of our great +industrial community. + +Well now, it is said that in adopting the policy of contributory +insurance the Government have admitted that they were wrong in +establishing old-age pensions upon the non-contributory basis. Now I +do not think that is true. There is no inconsistency or contradiction +between a non-contributory system of old-age pensions and a +contributory system of insurance against unemployment, sickness, +invalidity, and widowhood. The circumstances and conditions are +entirely different. The prospect of attaining extreme old age, of +living beyond threescore years and ten, which is the allotted span of +human life, seems so doubtful and remote to the ordinary man, when in +the full strength of manhood, that it has been found in practice +almost impossible to secure from any very great number of people the +regular sacrifices which are necessary to guard against old age. + +But unemployment, accident, sickness, and the death of the +bread-winner are catastrophes which may reach any household at any +moment. Those vultures are always hovering around us, and I do not +believe there is any sensible, honest man who would not wish to guard +himself against them, if it were in his power to make the necessary +contribution, and if he were sure--this is a very important +point--that he would not by any accident or fraud or muddle be done +out of the security he had paid for. And if we choose to adopt one +system of State-aid for dealing with one class of need, and quite a +different system for dealing with quite a different class of need, it +does not lie with any one, least of all does it lie with those who +have impartially neglected every problem and every solution, to +reproach us with inconsistency. + +But I go farther. The Old-Age Pensions Act, so far from being in +conflict with a scheme of contributory insurance, is really its most +helpful and potent ally. The fact that at seventy the State pension is +assured to all those who need it, makes a tremendous difference to +every form of insurance confined to the years before seventy, whether +for old age or for invalidity. I asked an eminent actuary the other +day to make me some calculations. They are rough, general +calculations, and no doubt they might be more exact. But roughly, I +believe it to be no exaggeration to say that the rates to cover a man +till seventy are in many cases scarcely half what they would be, if +they had to cover him till death. Do you see what that means? It is a +prodigious fact. It is the sort of fact by the discovery of which +people make gigantic fortunes; and I suggest to you that we should +make this gigantic fortune for John Bull. It means that the whole +field of insurance has become much more fruitful than it ever was +before, that there is a new class of insurance business possible which +never was possible before. It means that the whole field of insurance +is far more open to the poorest class of people than it was before, +and that with a proper system the benefits of the Old-Age Pensions +Act would not be confined to the actual pensioners who are drawing +their money, but would extend forwards in anticipation to all other +classes and to all other people, and that so far as five shillings a +week is concerned--that is not much unless you have not got it--the +actuarial position of every man and woman in this country has been +enormously improved by the Old-Age Pensions Act. + +It is of that improvement that we mean to take advantage next year. +Next year, when Free Trade will have yielded the necessary funds to +the revenue, we mean to move forward into this great new field. But +let me say one thing which is of the utmost importance. We must +remember that the field of insurance is already largely covered by a +great mass of benevolent and friendly societies, just as the field of +unemployment insurance is already occupied to some extent by trade +unions, and the Government would not approve of any development or +extension of the policy of insurance which did not do full justice to +existing institutions, or which did not safeguard those institutions, +to whom we owe so inestimable and incommensurable a debt, or caused +any sudden disturbance or any curtailment of their general methods of +business. On the contrary, we believe that when our proposals are put +in their full detail before the country, they will be found to benefit +and encourage and not to injure those agencies which have so long been +voluntarily and prosperously at work. + +The decisive question is this--will the British working classes +embrace the opportunities which will shortly be offered to them? They +are a new departure; they involve an element of compulsion and of +regulation which is unusual in our happy-go-lucky English life. The +opportunity may never return. For my own part, I confess to you, my +friends in Manchester, that I would work for such a policy and would +try to carry it through even if it were a little unpopular at first, +and would be willing to pay the forfeit of a period of exclusion from +power, in order to have carried such a policy through; because I know +that there is no other way within the reach of this generation of men +and women by which the stream of preventable misery can be cut off. + +If I had my way I would write the word "Insure" over the door of every +cottage, and upon the blotting-book of every public man, because I am +convinced that by sacrifices which are inconceivably small, which are +all within the power of the very poorest man in regular work, families +can be secured against catastrophes which otherwise would smash them +up for ever. I think it is our duty to use the strength and the +resources of the State to arrest the ghastly waste not merely of human +happiness but of national health and strength which follows when a +working man's home which has taken him years to get together is broken +up and scattered through a long spell of unemployment, or when, +through the death, the sickness, or the invalidity of the +bread-winner, the frail boat in which the fortunes of the family are +embarked founders, and the women and children are left to struggle +helplessly on the dark waters of a friendless world. I believe it is +well within our power now, before this Parliament is over, to +establish vast and broad throughout the land a mighty system of +national insurance which will nourish in its bosom all worthy existing +agencies and will embrace in its scope all sorts and conditions of +men. + +I think it is not untrue to say that in these years we are passing +through a decisive period in the history of our country. The wonderful +century which followed the Battle of Waterloo and the downfall of the +Napoleonic domination, which secured to this small island so long and +so resplendent a reign, has come to an end. We have arrived at a new +time. Let us realise it. And with that new time strange methods, huge +forces, larger combinations--a Titanic world--have sprung up around +us. The foundations of our power are changing. To stand still would be +to fall; to fall would be to perish. We must go forward. We will go +forward. We will go forward into a way of life more earnestly viewed, +more scientifically organised, more consciously national than any we +have known. Thus alone shall we be able to sustain and to renew +through the generations which are to come, the fame and the power of +the British race. + + + + +LAND AND INCOME TAXES IN THE BUDGET + +EDINBURGH, _July 17, 1909_ + +(From _The Times_, by permission.) + + +We are often assured by sagacious persons that the civilisation of +modern States is largely based upon respect for the rights of private +property. If that be true, it is also true that such respect cannot be +secured, and ought not, indeed, to be expected, unless property is +associated in the minds of the great mass of the people with ideas of +justice and of reason. + +It is, therefore, of the first importance to the country--to any +country--that there should be vigilant and persistent efforts to +prevent abuses, to distribute the public burdens fairly among all +classes, and to establish good laws governing the methods by which +wealth may be acquired. The best way to make private property secure +and respected is to bring the processes by which it is gained into +harmony with the general interests of the public. When and where +property is associated with the idea of reward for services rendered, +with the idea of recompense for high gifts and special aptitudes +displayed or for faithful labour done, then property will be honoured. +When it is associated with processes which are beneficial, or which at +the worst are not actually injurious to the commonwealth, then +property will be unmolested; but when it is associated with ideas of +wrong and of unfairness, with processes of restriction and monopoly, +and other forms of injury to the community, then I think that you will +find that property will be assailed and will be endangered. + +A year ago I was fighting an election in Dundee. In the course of that +election I attempted to draw a fundamental distinction between the +principles of Liberalism and of Socialism, and I said "Socialism +attacks capital; Liberalism attacks monopoly." And it is from that +fundamental distinction that I come directly to the land proposals of +the present Budget. + +It is quite true that the land monopoly is not the only monopoly which +exists, but it is by far the greatest of monopolies; it is a perpetual +monopoly, and it is the mother of all other forms of monopoly. It is +quite true that unearned increments in land are not the only form of +unearned or undeserved profit which individuals are able to secure; +but it is the principal form of unearned increment, derived from +processes, which are not merely not beneficial, but which are +positively detrimental to the general public. Land, which is a +necessity of human existence, which is the original source of all +wealth, which is strictly limited in extent, which is fixed in +geographical position--land, I say, differs from all other forms of +property in these primary and fundamental conditions. + +Nothing is more amusing than to watch the efforts of our monopolist +opponents to prove that other forms of property and increment are +exactly the same and are similar in all respects to the unearned +increment in land. They talk to us of the increased profits of a +doctor or a lawyer from the growth of population in the towns in which +they live. They talk to us of the profits of a railway through a +greater degree of wealth and activity in the districts through which +it runs. They tell us of the profits which are derived from a rise in +stocks and shares, and even of those which are sometimes derived from +the sale of pictures and works of art, and they ask us--as if it were +their only complaint--"Ought not all these other forms to be taxed +too?" + +But see how misleading and false all these analogies are. The +windfalls which people with artistic gifts are able from time to time +to derive from the sale of a picture--from a Vandyke or a Holbein--may +here and there be very considerable. But pictures do not get in +anybody's way. They do not lay a toll on anybody's labour; they do not +touch enterprise and production at any point; they do not affect any +of those creative processes upon which the material well-being of +millions depends. And if a rise in stocks and shares confers profits +on the fortunate holders far beyond what they expected, or, indeed, +deserved, nevertheless, that profit has not been reaped by withholding +from the community the land which it needs, but, on the contrary, +apart from mere gambling, it has been reaped by supplying industry +with the capital without which it could not be carried on. + +If the railway makes greater profits, it is usually because it carries +more goods and more passengers. If a doctor or a lawyer enjoys a +better practice, it is because the doctor attends more patients and +more exacting patients, and because the lawyer pleads more suits in +the courts and more important suits. At every stage the doctor or the +lawyer is giving service in return for his fees; and if the service is +too poor or the fees are too high, other doctors and other lawyers can +come freely into competition. There is constant service, there is +constant competition; there is no monopoly, there is no injury to the +public interest, there is no impediment to the general progress. + +Fancy comparing these healthy processes with the enrichment which +comes to the landlord who happens to own a plot of land on the +outskirts or at the centre of one of our great cities, who watches the +busy population around him making the city larger, richer, more +convenient, more famous every day, and all the while sits still and +does nothing! Roads are made, streets are made, railway services are +improved, electric light turns night into day, electric trams glide +swiftly to and fro, water is brought from reservoirs a hundred miles +off in the mountains--and all the while the landlord sits still. Every +one of those improvements is effected by the labour and at the cost of +other people. Many of the most important are effected at the cost of +the municipality and of the ratepayers. To not one of those +improvements does the land monopolist, as a land monopolist, +contribute, and yet by every one of them the value of his land is +sensibly enhanced. + +He renders no service to the community, he contributes nothing to the +general welfare, he contributes nothing even to the process from which +his own enrichment is derived. If the land were occupied by shops or +by dwellings, the municipality at least would secure the rates upon +them in aid of the general fund; but the land may be unoccupied, +undeveloped, it may be what is called "ripening"--ripening at the +expense of the whole city, of the whole country--for the unearned +increment of its owner. Roads perhaps have to be diverted to avoid +this forbidden area. The merchant going to his office, the artisan +going to his work, have to make a detour or pay a tram fare to avoid +it. The citizens are losing their chance of developing the land, the +city is losing its rates, the State is losing its taxes which would +have accrued, if the natural development had taken place--and that +share has to be replaced at the expense of the other ratepayers and +taxpayers; and the nation as a whole is losing in the competition of +the world--the hard and growing competition in the world--both in time +and money. And all the while the land monopolist has only to sit still +and watch complacently his property multiplying in value, sometimes +manifold, without either effort or contribution on his part. And that +is justice! + +But let us follow the process a little farther. The population of the +city grows and grows still larger year by year, the congestion in the +poorer quarters becomes acute, rents and rates rise hand in hand, and +thousands of families are crowded into one-roomed tenements. There are +120,000 persons living in one-roomed tenements in Glasgow alone at the +present time. At last the land becomes ripe for sale--that means that +the price is too tempting to be resisted any longer--and then, and not +till then, it is sold by the yard or by the inch at ten times, or +twenty times, or even fifty times, its agricultural value, on which +alone hitherto it has been rated for the public service. + +The greater the population around the land, the greater the injury +which they have sustained by its protracted denial, the more +inconvenience which has been caused to everybody, the more serious the +loss in economic strength and activity, the larger will be the profit +of the landlord when the sale is finally accomplished. In fact you may +say that the unearned increment on the land is on all-fours with the +profit gathered by one of those American speculators who engineer a +corner in corn, or meat, or cotton, or some other vital commodity, and +that the unearned increment in land is reaped by the land monopolist +in exact proportion, not to the service, but to the disservice done. + +It is monopoly which is the keynote; and where monopoly prevails, the +greater the injury to society, the greater the reward of the +monopolist will be. See how this evil process strikes at every form of +industrial activity. The municipality, wishing for broader streets, +better houses, more healthy, decent, scientifically planned towns, is +made to pay, and is made to pay in exact proportion, or to a very +great extent in proportion, as it has exerted itself in the past to +make improvements. The more it has improved the town, the more it has +increased the land value, and the more it will have to pay for any +land it may wish to acquire. The manufacturer purposing to start a +new industry, proposing to erect a great factory offering employment +to thousands of hands, is made to pay such a price for his land that +the purchase-price hangs round the neck of his whole business, +hampering his competitive power in every market, clogging him far more +than any foreign tariff in his export competition; and the land values +strike down through the profits of the manufacturer on to the wages of +the workman. The railway company wishing to build a new line finds +that the price of land which yesterday was only rated at its +agricultural value has risen to a prohibitive figure the moment it was +known that the new line was projected; and either the railway is not +built, or, if it is, is built, only on terms which largely transfer to +the landowner the profits which are due to the shareholders and the +advantages which should have accrued to the travelling public. + +It does not matter where you look or what examples you select, you +will see that every form of enterprise, every step in material +progress, is only undertaken after the land monopolist has skimmed the +cream off for himself, and everywhere to-day the man, or the public +body, who wishes to put land to its highest use is forced to pay a +preliminary fine in land values to the man who is putting it to an +inferior use, and in some cases to no use at all. All comes back to +the land value, and its owner for the time being is able to levy his +toll upon all other forms of wealth and upon every form of industry. A +portion, in some cases the whole, of every benefit which is +laboriously acquired by the community is represented in the land +value, and finds its way automatically into the landlord's pocket. If +there is a rise in wages, rents are able to move forward, because the +workers can afford to pay a little more. If the opening of a new +railway or a new tramway, or the institution of an improved service of +workmen's trains, or a lowering of fares, or a new invention, or any +other public convenience affords a benefit to the workers in any +particular district, it becomes easier for them to live, and therefore +the landlord and the ground landlord, one on top of the other, are +able to charge them more for the privilege of living there. + +Some years ago in London there was a toll-bar on a bridge across the +Thames, and all the working people who lived on the south side of the +river, had to pay a daily toll of one penny for going and returning +from their work. The spectacle of these poor people thus mulcted of so +large a proportion of their earnings appealed to the public +conscience: an agitation was set on foot, municipal authorities were +roused, and at the cost of the ratepayers the bridge was freed and the +toll removed. All those people who used the bridge were saved 6d. a +week. Within a very short period from that time the rents on the south +side of the river were found to have advanced by about 6d. a week, or +the amount of the toll which had been remitted. And a friend of mine +was telling me the other day that in the parish of Southwark about +L350 a year, roughly speaking, was given away in doles of bread by +charitable people in connection with one of the churches, and as a +consequence of this the competition for small houses, but more +particularly for single-roomed tenements is, we are told, so great +that rents are considerably higher than in the neighbouring district. + +All goes back to the land, and the landowner, who in many cases, in +most cases, is a worthy person utterly unconscious of the character of +the methods by which he is enriched, is enabled with resistless +strength to absorb to himself a share of almost every public and +every private benefit, however important or however pitiful those +benefits may be. + +I hope you will understand that when I speak of the land monopolist, I +am dealing more with the process than with the individual landowner. I +have no wish to hold any class up to public disapprobation. I do not +think that the man who makes money by unearned increment in land, is +morally a worse man than any one else, who gathers his profit where he +finds it, in this hard world under the law and according to common +usage. It is not the individual I attack; it is the system. It is not +the man who is bad; it is the law which is bad. It is not the man who +is blameworthy for doing what the law allows and what other men do; it +is the State which would be blameworthy, were it not to endeavour to +reform the law and correct the practice. We do not want to punish the +landlord. We want to alter the law. Look at our actual proposal. + +We do not go back on the past. We accept as our basis the value as it +stands to-day. The tax on the increment of land begins by recognising +and franking all past increment. We look only to the future; and for +the future we say only this: that the community shall be the partner +in any further increment above the present value after all the owner's +improvements have been deducted. We say that the State and the +municipality should jointly levy a toll upon the future unearned +increment of the land. A toll of what? Of the whole? No. Of a half? +No. Of a quarter? No. Of a fifth--that is the proposal of the Budget. +And that is robbery, that is plunder, that is communism and +spoliation, that is the social revolution at last, that is the +overturn of civilised society, that is the end of the world foretold +in the Apocalypse! Such is the increment tax about which so much +chatter and outcry are raised at the present time, and upon which I +will say that no more fair, considerate, or salutary proposal for +taxation has ever been made in the House of Commons. + +But there is another proposal concerning land values which is not less +important. I mean the tax on the capital value of undeveloped urban or +suburban land. The income derived from land and its rateable value +under the present law depend upon the use to which the land is put. In +consequence, income and rateable value are not always true or +complete measures of the value of the land. Take the case to which I +have already referred, of the man who keeps a large plot in or near a +growing town idle for years, while it is "ripening"--that is to say, +while it is rising in price through the exertions of the surrounding +community and the need of that community for more room to live. Take +that case. I daresay you have formed your own opinion upon it. Mr. +Balfour, Lord Lansdowne, and the Conservative Party generally, think +that that is an admirable arrangement. They speak of the profits of +the land monopolist, as if they were the fruits of thrift and industry +and a pleasing example for the poorer classes to imitate. We do not +take that view of the process. We think it is a dog-in-the-manger +game. We see the evil, we see the imposture upon the public, and we +see the consequences in crowded slums, in hampered commerce, in +distorted or restricted development, and in congested centres of +population, and we say here and now to the land monopolist who is +holding up his land--and the pity is, it was not said before--you +shall judge for yourselves whether it is a fair offer or not--we say +to the land monopolist: "This property of yours might be put to +immediate use with general advantage. It is at this minute saleable in +the market at ten times the value at which it is rated. If you choose +to keep it idle in the expectation of still further unearned +increment, then at least you shall be taxed at the true selling value +in the meanwhile." And the Budget proposes a tax of a halfpenny in the +pound on the capital value of all such land; that is to say, a tax +which is a little less in equivalent, than the income-tax would be +upon the property, if the property were fully developed. + +That is the second main proposal of the Budget with regard to the +land; and its effects will be, first, to raise an expanding revenue +for the needs of the State; secondly that, half the proceeds of this +tax, as well as of the other land taxes, will go to the municipalities +and local authorities generally to relieve rates; thirdly, the effect +will be, as we believe, to bring land into the market, and thus +somewhat cheapen the price at which land is obtainable for every +object, public and private. By so doing we shall liberate new springs +of enterprise and industry, we shall stimulate building, relieve +overcrowding, and promote employment. + +These two taxes, both in themselves financially, economically, and +socially sound, carry with them a further notable advantage. We shall +obtain a complete valuation of the whole of the land in the United +Kingdom. We shall procure an up-to-date Doomsday-book showing the +capital value, apart from buildings and improvements, of every piece +of land. Now, there is nothing new in the principle of valuation for +taxation purposes. It was established fifteen years ago in Lord +Rosebery's Government by the Finance Act of 1894, and it has been +applied ever since without friction or inconvenience by Conservative +administrations. + +And if there is nothing new in the principle of valuation, still less +is there anything new or unexpected in the general principles +underlying the land proposals of the Budget. Why, Lord Rosebery +declared himself in favour of taxation of land values fifteen years +ago. Lord Balfour has said a great many shrewd and sensible things on +this subject which he is, no doubt, very anxious to have overlooked at +the present time. The House of Commons has repeatedly affirmed the +principle, not only under Liberal Governments, but--which is much more +remarkable--under a Conservative Government. Four times during the +last Parliament Mr. Trevelyan's Bill for the taxation of land values +was brought before the House of Commons and fully discussed, and twice +it was read a second time during the last Parliament, with its great +Conservative majority, the second time by a majority of no less than +ninety votes. The House of Lords, in adopting Lord Camperdown's +amendment to the Scottish Valuation Bill, has absolutely conceded the +principle of rating undeveloped land upon its selling value, although +it took very good care not to apply the principle; and all the +greatest municipal corporations in England and Scotland--many of them +overwhelmingly Conservative in complexion--have declared themselves in +favour of the taxation of land values; and now, after at least a +generation of study, examination, and debate, the time has come when +we should take the first step to put these principles into practical +effect. You have heard the saying "The hour and the man." The hour has +come, and with it the Chancellor of the Exchequer. + +I have come to Scotland to exhort you to engage in this battle and +devote your whole energy and influence to securing a memorable +victory. Every nation in the world has its own way of doing things, +its own successes and its own failures. All over Europe we see systems +of land tenure which economically, socially, and politically are far +superior to ours; but the benefits that those countries derive from +their improved land systems are largely swept away, or at any rate +neutralised, by grinding tariffs on the necessaries of life and the +materials of manufacture. In this country we have long enjoyed the +blessings of Free Trade and of untaxed bread and meat, but against +these inestimable benefits we have the evils of an unreformed and +vicious land system. In no great country in the new world or the old +have the working people yet secured the double advantage of free trade +and free land together, by which I mean a commercial system and a land +system from which, so far as possible, all forms of monopoly have been +rigorously excluded. Sixty years ago our system of national taxation +was effectively reformed, and immense and undisputed advantages +accrued therefrom to all classes, the richest as well as the poorest. +The system of local taxation to-day is just as vicious and wasteful, +just as great an impediment to enterprise and progress, just as harsh +a burden upon the poor, as the thousand taxes and Corn Law sliding +scales of the "hungry 'forties." We are met in an hour of tremendous +opportunity. "You who shall liberate the land," said Mr. Cobden, "will +do more for your country than we have done in the liberation of its +commerce." + +You can follow the same general principle of distinguishing between +earned and unearned increment through the Government's treatment of +the income-tax. There is all the difference in the world between the +income which a man makes from month to month or from year to year by +his continued exertion, which may stop at any moment, and will +certainly stop, if he is incapacitated, and the income which is +derived from the profits of accumulated capital, which is a continuing +income irrespective of the exertion of its owner. Nobody wants to +penalise or to stigmatise income derived from dividends, rent, or +interest; for accumulated capital, apart from monopoly, represents the +exercise of thrift and prudence, qualities which are only less +valuable to the community than actual service and labour. But the +great difference between the two classes of income remains. We are all +sensible of it, and we think that that great difference should be +recognised when the necessary burdens of the State have to be divided +and shared between all classes. + +The application of this principle of differentiation of income-tax has +enabled the present Government sensibly to lighten the burden of the +great majority of income-tax payers. Under the late Conservative +Government about 1,100,000 income-tax payers paid income-tax at the +statutory rate of a shilling in the pound. Mr. Asquith, the Prime +Minister, when Chancellor of the Exchequer, reduced the income-tax in +respect of earned incomes under L2,000 a year from a shilling to +ninepence, and it is calculated that 750,000 income-tax payers--that +is to say, nearly three-quarters of the whole number of income-tax +payers--who formerly paid at the shilling rate have obtained an actual +relief from taxation to the extent of nearly L1,200,000 a year in the +aggregate. The present Chancellor of the Exchequer in the present +Budget has added to this abatement a further relief--a very sensible +relief, I venture to think you will consider it--on account of each +child of parents who possess under L500 a year, and that concession +involved a further abatement and relief equal to L600,000 a year. +That statement is founded on high authority, for it figured in one of +the Budget proposals of Mr. Pitt, and it is to-day recognised by the +law of Prussia. + +Taking together the income-tax reforms of Mr. Asquith and Mr. +Lloyd-George, taking the two together--because they are all part of +the same policy, and they are all part of our treatment as a +Government of this great subject--it is true to say that very nearly +three out of every four persons who pay income-tax will be taxed after +this Budget, this penal Budget, this wicked, monstrous, despoliatory +Budget--three out of every four persons will be taxed for income-tax +at a lower rate than they were by the late Conservative Government. + +You will perhaps say to me that may be all very well, but are you sure +that the rich and the very rich are not being burdened too heavily? +Are you sure that you are not laying on the backs of people who are +struggling to support existence with incomes of upwards of L3,000 a +year, burdens which are too heavy to be borne? Will they not sink, +crushed by the load of material cares, into early graves, followed +there even by the unrelenting hand of the death duties collector? Will +they not take refuge in wholesale fraud and evasion, as some of their +leaders ingenuously suggest, or will there be a general flight of all +rich people from their native shores to the protection of the +hospitable foreigner? Let me reassure you on these points. + +The taxes which we now seek to impose to meet the need of the State +will not appreciably affect, have not appreciably affected, the +comfort, the status, or even the style of living of any class in the +United Kingdom. There has been no invidious singling out of a few rich +men for special taxation. The increased burden which is placed upon +wealth is evenly and broadly distributed over the whole of that +wealthy class who are more numerous in Great Britain than in any other +country in the world, and who, when this Budget is passed, will still +find Great Britain the best country to live in. When I reflect upon +the power and influence that class possesses, upon the general +goodwill with which they are still regarded by their poorer +neighbours, upon the infinite opportunities for pleasure and for +culture which are open to them in this free, prosperous, and orderly +commonwealth, I cannot doubt that they ought to contribute, and I +believe that great numbers of them are willing to contribute, in a +greater degree than heretofore, towards the needs of the navy, for +which they are always clamouring, and for those social reforms upon +which the health and contentment of the whole population depend. + +And after all, gentlemen, when we are upon the sorrows of the rich and +the heavy blows that have been struck by this wicked Budget, let us +not forget that this Budget, which is denounced by all the vested +interests in the country and in all the abodes of wealth and power, +after all, draws nearly as much from the taxation of tobacco and +spirits, which are the luxuries of the working classes, who pay their +share with silence and dignity, as it does from those wealthy classes +upon whose behalf such heartrending outcry is made. + +I do not think the issue before the country was ever more simple than +it is now. The money must be found; there is no dispute about that. +Both parties are responsible for the expenditure and the obligations +which render new revenue necessary; and, as we know, we have +difficulty in resisting demands which are made upon us by the +Conservative Party for expenditure upon armaments far beyond the +limits which are necessary to maintain adequately the defences of the +country, and which would only be the accompaniment of a sensational +and aggressive policy in foreign and in Colonial affairs. We declare +that the proposals we have put forward are conceived with a desire to +be fair to all and harsh to none. We assert they are conceived with a +desire to secure good laws regulating the conditions by which wealth +may be obtained and a just distribution of the burdens of the State. +We know that the proposals which we have made will yield all the money +that we need for national defence, and that they will yield an +expanding revenue in future years for those great schemes of social +organisation, of national insurance, of agricultural development, and +of the treatment of the problems of poverty and unemployment, which +are absolutely necessary if Great Britain is to hold her own in the +front rank of the nations. The issue which you have to decide is +whether these funds shall be raised by the taxation of a protective +tariff upon articles of common use and upon the necessaries of life, +including bread and meat, or whether it shall be raised, as we +propose, by the taxation of luxuries, of superfluities, and +monopolies. + +I have only one word more to say, and it is rendered necessary by the +observations which fell from Lord Lansdowne last night, when, +according to the Scottish papers, he informed a gathering at which he +was the principal speaker that the House of Lords was not obliged to +swallow the Budget whole or without mincing.[18] I ask you to mark +that word. It is a characteristic expression. The House of Lords means +to assert its right to mince. Now let us for our part be quite frank +and plain. We want this Budget Bill to be fairly and fully discussed; +we do not grudge the weeks that have been spent already; we are +prepared to make every sacrifice--I speak for my honourable friends +who are sitting on this platform--of personal convenience in order to +secure a thorough, patient, searching examination of proposals the +importance of which we do not seek to conceal. The Government has +shown itself ready and willing to meet reasonable argument, not merely +by reasonable answer, but when a case is shown, by concessions, and +generally in a spirit of goodwill. We have dealt with this subject +throughout with a desire to mitigate hardships in special cases, and +to gain as large a measure of agreement as possible for the proposals +we are placing before the country. We want the Budget not merely to be +the work of the Cabinet and of the Chancellor of the Exchequer; we +want it to be the shaped and moulded plan deliberately considered by +the House of Commons. That will be a long and painful process to those +who are forced from day to day to take part in it. We shall not shrink +from it. But when that process is over, when the Finance Bill leaves +the House of Commons, I think you will agree with me that it ought to +leave the House of Commons in its final form. No amendments, no +excision, no modifying or mutilating will be agreed to by us. We will +stand no mincing, and unless Lord Lansdowne and his landlordly friends +choose to eat their own mince, Parliament will be dissolved, and we +shall come to you in a moment of high consequence for every cause for +which Liberalism has ever fought. See that you do not fail us in that +hour. + +FOOTNOTES: + +[18] Lord Lansdowne has since been at pains to explain that he did not +use the word "mincing." That word ought to have been "wincing" or +"hesitation"--it is not clear which. + + + + +THE BUDGET AND THE LORDS + +NORWICH, _July 26, 1909_ + +(From _The Manchester Guardian_, by permission.) + + +The Budget is the great political issue of the day. It involves all +other questions; it has brought all other issues to a decisive test. +_The Daily Mail_ has stated that the Budget is hung up. So it is. It +is hung up in triumph over the High Peak; it is hung up as a banner of +victory over Dumfries, over Cleveland, and over Mid-Derby. The +miniature general election just concluded has shown that the policy +embodied in the Budget, and which inspires the Budget, has vivified +and invigorated the Liberal Party, has brought union where there was +falling away, has revived enthusiasm where apathy was creeping in. + +You cannot but have been impressed with the increasing sense of +reality which political affairs have acquired during the last few +months. What is it they are doing at Westminster? Across and beyond +the complicated details of finance, the thousand amendments and more +which cover the order paper, the absurd obstruction, the dry +discussions in Committee, the interminable repetition of divisions, +the angry scenes which flash up from time to time, the white-faced +members sitting the whole night through and walking home worn out in +the full light of morning--across and beyond all this, can you not +discern a people's cause in conflict? Can you not see a great effort +to make a big step forward towards that brighter and more equal world +for which, be sure, those who come after us will hold our names in +honour? That is the issue which is being decided from week to week in +Westminster now, and it is in support of that cause that we are asking +from you earnest and unswerving allegiance. + +I do not think that there is any great country in the world where +there are so many strong forces of virtue and vitality as there are in +our own country. But there is scarcely any country in the world where +there is so little organisation. Look at our neighbour and friendly +rival Germany. I see that great State organised for peace and +organised for war to a degree to which we cannot pretend. We are not +organised as a nation, so far as I can see, for anything except party +politics, and even for purposes of party politics we are not organised +so well as they are in the United States. A more scientific, a more +elaborate, a more comprehensive social organisation is indispensable +to our country if we are to surmount the trials and stresses which the +future years will bring. It is this organisation that the policy of +the Budget will create. It is this organisation that the loss of the +Budget will destroy. + +But, we are told, "it presses too heavily upon the land-owning +classes." I have heard it said that in the French Revolution, if the +French nobility, instead of going to the scaffold with such dignity +and fortitude, had struggled and cried and begged for mercy, even the +hard hearts of the Paris crowd would have been melted, and the Reign +of Terror would have come to an end. There is happily no chance of our +aristocracy having to meet such a fate in this loyal-hearted, +law-abiding, sober-minded country. They are, however, asked to +discharge a certain obligation. They are asked to contribute their +share to the expenses of the State. That is all they are asked to do. +Yet what an outcry, what tribulation, what tears, what wrath, what +weeping and wailing and gnashing of teeth, and all because they are +asked to pay their share. + +One would suppose, to listen to them, that the whole of the taxation +was being raised from, or was about to be raised from the owners of +agricultural estates. What are the facts? Nearly half the taxation of +the present Budget is raised by the taxation of the luxuries of the +working classes. Are they indignant? Are they crying out? Not in the +least. They are perfectly ready to pay their share, and to pay it in a +manly way, and two hundred thousand of them took the trouble to go to +Hyde Park the other day in order to say so. + +What are the facts about agricultural land? It is absolutely exempt +from the operations of the new land taxation so long as agricultural +land is worth no more for other purposes than it is for agricultural +purposes: that is to say, so long as agricultural land is agricultural +land and not urban or suburban land, it pays none of the new land +taxation. It is only when its value for building purposes makes its +continued agricultural use wasteful and uneconomic, it is only when it +becomes building land and not agricultural land, and when because of +that change it rises enormously in price and value--it is only then +that it contributes under the new land taxation its share to the +public of the increment value which the public has given to it. + +Then take the death duties. One would suppose from what one hears in +London and from the outcry that is raised, that the whole of the death +duties were collected from the peers and from the county families. +Again I say, look at the facts. The Inland Revenue report for last +year shows that L313,000,000 of property passing on death became +subject to death duties, and of that sum L228,000,000 was personalty +and not real estate, leaving only L85,000,000 real estate, and of that +L85,000,000 only L22,000,000 was agricultural land. These death duties +are represented as being levied entirely upon a small class of landed +gentry and nobility, but, as a matter of fact, there is collected from +that class in respect of agricultural land only seven per cent. of the +whole amount of money which the Exchequer derives from death +duties.[19] + +I decline, however, to judge the question of the House of Lords simply +and solely by any action they may resolve to take upon the Budget. We +must look back upon the past. We remember the ill-usage and the +humiliation which the great majority that was returned by the nation +to support Sir Henry Campbell-Bannerman in 1906 has sustained in the +last three years at the hands of the House of Lords. That Assembly +must be judged by their conduct as a whole. Lord Lansdowne has +explained, to the amusement of the nation, that he claimed no right on +behalf of the House of Lords to "mince" the Budget. All, he tells us, +he has asked for, so far as he is concerned, is the right to "wince" +when swallowing it. Well, that is a much more modest claim. It is for +the Conservative Party to judge whether it is a very heroic claim for +one of their leaders to make. If they are satisfied with the wincing +Marquis, we have no reason to protest. We should greatly regret to +cause Lord Lansdowne and his friends any pain. We have no wish +whatever to grudge them any relief which they may obtain by wincing or +even by squirming. We accord them the fullest liberty in that +respect. + +After all, the House of Lords has made others wince in its time. Even +in the present Parliament they have performed some notable exploits. +When the House of Lords rejected the Bill to prevent one man casting +his vote two or three times over in the same election, every one in +this country who desired to see a full and true representation of the +people in Parliament might well have winced. When the House of Lords +rejected or mutilated beyond repair the Land Valuation Bills for +England and for Scotland, every land reformer in the country might +have winced. When the House of Lords destroyed Mr. Birrell's Education +Bill of 1906, every man who cared for religious equality and +educational peace might have winced. When they contemptuously flung +out, without even discussing it or examining it, the Licensing Bill, +upon which so many hopes were centred and upon which so many months of +labour had been spent, they sent a message of despair to every +temperance reformer, to every social and philanthropic worker, to +every church, to every chapel, to every little Sunday school +throughout the land. If it should now prove to be their turn, if the +measure they have meted out to others should be meted out to them +again, however much we might regret their sorrows, we could not but +observe the workings of poetic justice. + +But I hope the House of Lords and those who back them will not be +under any illusions about the Budget and the position of the +Government. The Government is in earnest about the Budget. The Budget +carries with it their fortunes and the fortunes of the Liberal Party. +Careful argument, reasonable amendment, amicable concession, not +affecting the principles at stake--all these we offer while the Bill +is in the House of Commons. But when all that is said and done, as the +Bill leaves the House of Commons so it must stand. It would be a great +pity if Lord Curzon, the Indian pro-Consul, or the London +_Spectator_--it would be a great pity if those potentates were to make +the great mistake of supposing that the Government would acquiesce in +the excision of the land clauses of the Budget by the House of Lords. +Such a course is unthinkable. Any Liberal Government which adopted it +would be swiftly ruined. The land proposals of the Government have not +been made without long deliberation and full responsibility. We shall +not fail to carry them effectively through the House of Commons; still +less shall we accept any amendment at the hands of the House of Lords. + +Is it not an extraordinary thing that upon the Budget we should even +be discussing at all the action of the House of Lords? The House of +Lords is an institution absolutely foreign to the spirit of the age +and to the whole movement of society. It is not perhaps surprising in +a country so fond of tradition, so proud of continuity, as ourselves +that a feudal assembly of titled persons, with so long a history and +so many famous names, should have survived to exert an influence upon +public affairs at the present time. We see how often in England the +old forms are reverently preserved after the forces by which they are +sustained and the uses to which they were put and the dangers against +which they were designed have passed away. A state of gradual decline +was what the average Englishman had come to associate with the House +of Lords. Little by little, we might have expected, it would have +ceased to take a controversial part in practical politics. Year by +year it would have faded more completely into the past to which it +belongs until, like Jack-in-the-Green or Punch-and-Judy, only a +picturesque and fitfully lingering memory would have remained. + +And during the last ten years of Conservative government this was +actually the case. But now we see the House of Lords flushed with the +wealth of the modern age, armed with a party caucus, fortified, +revived, resuscitated, asserting its claims in the harshest and in the +crudest manner, claiming to veto or destroy even without discussion +any legislation, however important, sent to them by any majority, +however large, from any House of Commons, however newly elected. We +see these unconscionable claims exercised with a frank and undisguised +regard to party interest, to class interest, and to personal interest. +We see the House of Lords using the power which they should not hold +at all, which if they hold at all, they should hold in trust for all, +to play a shrewd, fierce, aggressive party game of electioneering and +casting their votes according to the interest of the particular +political party to which, body and soul, they belong. + +It is now suggested--publicly in some quarters, privately in many +quarters--that the House of Lords will not only use without scruple +their veto in legislation but they propose to extend their +prerogatives; they are going to lay their hands upon finance, and if +they choose they will reject or amend the Budget. I have always +thought it a great pity that Mr. Gladstone made a compromise with the +House of Lords over the Franchise Bill of 1884. I regret, and I think +many of my hon. friends in the House of Commons will regret, looking +back upon the past, that the present Government did not advise a +dissolution of Parliament upon the rejection of the Education Bill in +1906. A dissolution in those circumstances would not merely have +involved the measure under discussion, but if the Government of that +day had received the support of the electors at the poll their victory +must have carried with it that settlement and reform of the relations +between the two Houses of Parliament which is necessary to secure the +effective authority of the House of Commons. That is the question +which, behind and beyond all others, even the Budget, even Free Trade, +even the land--that is the question which, as the Prime Minister has +said, is the dominant issue of our time. + +Opportunity is fickle, opportunity seldom returns; but I think you +will agree with me that if the House of Lords, not content with its +recent exploits with the legislative veto, were to seize on the new +power which its backers claim for it over finance--if, not content +with the extreme assertions of its own privileges, it were to invade +the most ancient privileges of the House of Commons--if, as an act of +class warfare, for it would be nothing less, the House of Lords were +to destroy the Budget, and thus not only create a Constitutional +deadlock of novel and unmeasured gravity, but also plunge the whole +finance of the country into unparalleled confusion, then, in my +judgment, opportunity, clear, brilliant, and decisive, would return, +and we should have the best chance we have ever had of dealing with +them once for all. + +These circumstances may never occur. I don't believe they will occur. +If we only all stand firm together I believe the Budget will be +carried. I believe the Budget will vindicate the strength of the +Government supported by the House of Commons. I believe it will +vindicate the financial strength of this great country. I don't +believe, if we pursue our course without wavering or weakening, there +is any force in this country which can stand against us. The +Conservative Whip in the House of Lords, a friend of mine, Lord +Churchill, said the other day that the House of Lords when they +received the Budget would do their duty. I hope they will. But in any +case be sure of this--that the Government and the House of Commons +will do their duty. Then if there is anything more to be done, see +that you are ready to do your duty too. + +FOOTNOTES: + +[19] Since the date of this speech the new concessions, doubling the +allowance exempted from income tax for the expenses of agricultural +estates, have been made public. + + + + +THE SPIRIT OF THE BUDGET + +LEICESTER, _September 5, 1909_ + +(From _The Times_, by permission.) + +I have done my best to study the political history of the last forty +or fifty years, and I cannot find any Government which, at the end of +its fourth year, enjoyed the same measure of support, prestige, and +good fortune that we do. The only Administration which could compare +in the importance and the volume of its legislation with the present +Government is Mr. Gladstone's great Government of 1868. That was a +Government of measures and of men; but no measure of that Government +could equal in importance the Old-Age Pensions Act which we have +placed on the Statute-book. The settlement of the Irish Church +question by Disestablishment was not a more baffling and intricate +business, than the settlement of the Irish University question which +Mr. Birrell has achieved. The labour legislation of the Government of +1868, although very important, shows nothing which equals in +importance the Trades Disputes Act, which we have carried through, and +Mr. Cardwell's reforms in army organisation were not more successful, +and were certainly much less generally accepted, than those which have +been effected by Mr. Haldane. In the fourth year of its administration +the Government of 1868 was genuinely unpopular. It had quarrelled with +the Nonconformists without gaining the support of the Church; it had +offended the liquor interest without satisfying the Temperance forces +in the country; it had disturbed and offended many vested interests +without arousing popular enthusiasm. + +Indeed, if you look back, you will find that the fourth year in the +history of a Government is always a very critical and has often been a +very unfortunate year. It is quite true that Mr. Disraeli's +Government, which assumed office in 1874, did enjoy in its fourth year +a fleeting flush of success, which, however, proved illusory. With +that single exception, every other modern Government that has lasted +so long, has occupied an unsatisfactory position in its fourth year. +The Government of 1880 in the year 1884 was brought very low, and was +deeply involved in disastrous enterprises beyond the sea which +ultimately resulted in sorrow and misfortune. The Conservative +Government which took office in 1886 was by the year 1890, owing to +its strange proceedings against Mr. Parnell, brought to the depths of +humiliation. The Government of 1895 was in the year 1899 thoroughly +unpopular, and if they had not plunged into the tumult of war in South +Africa, they would very shortly have been dismissed from power. As for +the Government of 1900, in the fourth year of Mr. Balfour's late +Administration, I am sure I could not easily do justice to the +melancholy position which they occupied. + +Where do we stand to-day at the end of our fourth year of office? I +put it plainly to you to consider, whether one is not justified in +saying that we occupy a position of unexampled strength at the present +time. The Government is strong in its administrative record, which +reveals no single serious or striking mistake in all the complicated +conduct of affairs. There have been no regrettable incidents by land +or sea and none of those personal conflicts between the high officials +that used to occur so frequently under a late dispensation. We have +had no waste of public treasure and no bloodshed. We are strong in +the consciousness of a persistent effort to sweep away anomalies and +inequalities, to redress injustice, to open more widely to the masses +of the people the good chances in life, and to safeguard them against +its evil chances. We also claim that we are strong in the support and +enthusiasm of a majority of our fellow-countrymen. We are strong in +the triumph of our policy in South Africa; most of all we are strong +in the hopes and plans which we have formed for the future. + +It is about this future that I will speak to you this afternoon. And +let me tell you that when I think about it, I do not feel at all +inclined to plead exhaustion in consequence of the exertions we have +made, or to dwell upon the successes which we have had in the past, or +to survey with complacency the record of the Government or to ask you +to praise us for the work which we have done. No; when I think of the +work which lies before us, upon which we have already entered, of the +long avenues of social reconstruction and reorganisation which open +out in so many directions and ever more broadly before us, of the +hideous squalor and misery which darken and poison the life of +Britain, of the need of earnest action, of the prospects of effective +and immediate action--when I dwell upon this, it is not of feelings of +lassitude or exhaustion that I am conscious, but only of a vehement +impulse to press onwards. + +The social conditions of the British people in the early years of the +twentieth century cannot be contemplated without deep anxiety. The +anxiety is keen because it arises out of uncertainty. It is the +gnawing anxiety of suspense. What is the destiny of our country to be? +Nothing is settled either for or against us. We have no reason to +despair; still less have we any reason to be self-satisfied. All is +still in our hands for good or for ill. We have the power to-day to +choose our fortune, and I believe there is no nation in the world, +perhaps there never has been in history, any nation which at one and +the same moment was confronted with such opposite possibilities, was +threatened on the one hand by more melancholy disaster, and cheered on +the other by more bright, yet not unreasonable hopes. The two roads +are open. We are at the cross-ways. If we stand on in the old +happy-go-lucky way, the richer classes ever growing in wealth and in +number, and ever declining in responsibility, the very poor remaining +plunged or plunging even deeper into helpless, hopeless misery, then I +think there is nothing before us but savage strife between class and +class, with an increasing disorganisation, with an increasing +destruction of human strength and human virtue--nothing, in fact, but +that dual degeneration which comes from the simultaneous waste of +extreme wealth and of extreme want. + +Now we have had over here lately colonial editors from all the +Colonies of the British Empire, and what is the opinion which they +expressed as to the worst thing they saw in the old country? The +representatives of every Colony have expressed the opinion that the +worst they saw here, was the extreme of poverty side by side with the +extreme of luxury. Do not you think it is very impressive to find an +opinion like that, expressed in all friendship and sincerity, by men +of our own race who have come from lands which are so widely scattered +over the surface of the earth, and are the product of such varied +conditions? Is it not impressive to find that they are all agreed, +coming as they do from Australia, or Canada, or South Africa, or New +Zealand, that the greatest danger to the British Empire and to the +British people is not to be found among the enormous fleets and armies +of the European Continent, nor in the solemn problems of Hindustan; it +is not the Yellow peril nor the Black peril nor any danger in the wide +circuit of colonial and foreign affairs. No, it is here in our midst, +close at home, close at hand in the vast growing cities of England and +Scotland, and in the dwindling and cramped villages of our denuded +countryside. It is there you will find the seeds of Imperial ruin and +national decay--the unnatural gap between rich and poor, the divorce +of the people from the land, the want of proper discipline and +training in our youth, the exploitation of boy labour, the physical +degeneration which seems to follow so swiftly on civilised poverty, +the awful jumbles of an obsolete Poor Law, the horrid havoc of the +liquor traffic, the constant insecurity in the means of subsistence +and employment which breaks the heart of many a sober, hard-working +man, the absence of any established minimum standard of life and +comfort among the workers, and, at the other end, the swift increase +of vulgar, joyless luxury--here are the enemies of Britain. Beware +lest they shatter the foundations of her power. + +Then look at the other side, look at the forces for good, the moral +forces, the spiritual forces, the civic, the scientific, the patriotic +forces which make for order and harmony and health and life. Are they +not tremendous too? Do we not see them everywhere, in every town, in +every class, in every creed, strong forces worthy of Old England, +coming to her rescue, fighting for her soul? That is the situation in +our country as I see it this afternoon--two great armies evenly +matched, locked in fierce conflict with each other all along the line, +swaying backwards and forwards in strife--and for my part I am +confident that the right will win, that the generous influences will +triumph over the selfish influences, that the organising forces will +devour the forces of degeneration, and that the British people will +emerge triumphant from their struggles to clear the road and lead the +march amongst the foremost nations of the world. + +Well, now, I want to ask you a question. I daresay there are some of +you who do not like this or that particular point in the Budget, who +do not like some particular argument or phrase which some of us may +have used in advocating or defending it. But it is not of these +details that I speak; the question I want each of you to ask himself +is this: On which side of this great battle which I have described to +you, does the Budget count? Can any of you, looking at it broadly and +as a whole, looking on the policy which surrounds it, and which +depends upon it, looking at the arguments by which it is defended, as +well as the arguments by which it is opposed--can any one doubt that +the Budget in its essential character and meaning, in its spirit and +in its practical effect, would be a tremendous reinforcement, almost +like a new army coming up at the end of the day, upon the side of all +those forces and influences which are fighting for the life and health +and progress of our race? + +In the speeches which I have made about the country since the Budget +was introduced I have explained and defended in detail the special +financial proposals upon which we rely to provide the revenue for the +year. You are, no doubt, generally acquainted with them. There is the +increase in the income-tax of twopence, the further discrimination +between earned and unearned income, and the super-tax of sixpence on +incomes of over L5,000 a year. There are the increases in estate +duties and in the legacy duties, and there are the new duties on +stamps; there is the tax on motor-cars and petrol, the proceeds of +which are to go to the improvement of the roads and the abatement of +the dust nuisance; there are the taxes on working class +indulgences--namely, the increase in the tax on tobacco and on whisky, +which enable the working man to pay his share, as indeed he has shown +himself very ready to do; there are the taxes on liquor licences, +which are designed to secure for the State a certain special +proportion of the monopoly value created wholly by the State and with +which it should never have parted; and, lastly, there are the three +taxes upon the unearned increment in land, upon undeveloped land, upon +the unearned increment in the reversion of leases, and then there is +the tax upon mining royalties. + +Now these are the actual proposals of the Budget, and I do not think +that, if I had the time, I should find any great difficulty in showing +you that there are many good arguments, a great volume of sound +reason, which can be adduced in support of every one of these +proposals. Certainly there is no difficulty in showing that since the +Budget has been introduced there has been no shock to credit, there +has been no dislocation of business, there has been no setback in the +beginning of that trade revival about the approach of which I spoke to +you, when I was in Leicester at the beginning of the year and which +there are now good reasons for believing is actually in progress. The +taxes which have been proposed have not laid any burden upon the +necessaries of life like bread or meat, nor have they laid any +increased burden upon comforts like tea and sugar. There is nothing in +these taxes which makes it harder for a labouring man to keep up his +strength or for the small man of the middle class to maintain his +style of living. There is nothing in these taxes which makes it more +difficult for any hard-working person, whether he works with his hands +or his head, to keep a home together in decent comfort. No impediment +has been placed by these taxes upon enterprise; no hampering +restrictions interrupt the flow of commerce. On the contrary, if the +tax upon spirits should result in a diminution in the consumption of +strong drink, depend upon it, the State will gain, and all classes +will gain. The health of millions of people, the happiness of hundreds +of thousands of homes, will be sensibly improved, and money that would +have been spent upon whisky will flow into other channels, much less +likely to produce evil and much more likely to produce employment. And +if the tax on undeveloped land, on land, that is to say, which is kept +out of the market, which is held up idly in order that its owner may +reap unearned profit by the exertions and through the needs of the +surrounding community, if that tax should have the effect of breaking +this monopoly and of making land cheaper, a tremendous check on every +form of productive activity will have been removed. All sorts of +enterprises will become economically possible which are now impossible +owing to the artificially high price of land, and new forces will be +liberated to stimulate the wealth of the nation. + +But it is not on these points that I wish to dwell this afternoon. I +want to tell you about the meaning and the spirit of the Budget. Upon +the Budget and upon the policy of the Budget depends a far-reaching +plan of social organisation designed to give a greater measure of +security to all classes, but particularly to the labouring classes. +In the centre of that plan stands the policy of national insurance. +The Chancellor of the Exchequer has been for more than a year at work +upon this scheme, and it is proposed--I hope next year, if there is a +next year--it is proposed, working through the great friendly +societies, which have done so much invaluable work on these lines, to +make sure that, by the aid of a substantial subvention from the State, +even the poorest steady worker or the poorest family shall be enabled +to make provision against sickness, against invalidity, and for the +widows and orphans who may be left behind. + +Side by side with this is the scheme of insurance against unemployment +which I hope to have the honour of passing through Parliament next +year. The details of that scheme are practically complete, and it will +enable upwards of two and a quarter millions of workers in the most +uncertain trades of this country--trades like ship-building, +engineering, and building--to secure unemployment benefits, which in a +great majority of cases will be sufficient to tide them over the +season of unemployment. This scheme in its compulsory form is limited +to certain great trades like those I have specified, but it will be +open to other trades, to trade unions, to workers' associations of +various kinds, or even to individuals to insure with the State +Unemployment Insurance Office against unemployment on a voluntary +basis, and to secure, through the State subvention, much better terms +than it would be possible for them to obtain at the present time. + +It would be impossible to work a scheme of unemployment insurance +except in conjunction with some effective method of finding work and +of testing willingness to work, and that can only be afforded by a +national system of labour exchanges. That Bill has already passed +through Parliament, and in the early months of next year we shall hope +to bring it into operation by opening, all over the country, a network +of labour exchanges connected with each other and with the centre by +telephone. We believe this organisation may secure for labour--and, +after all, labour is the only thing the great majority of people have +to sell--it will secure for labour, for the first time, that free and +fair market which almost all other commodities of infinitely less +consequence already enjoy, and will replace the present wasteful, +heartbreaking wanderings aimlessly to and fro in search of work by a +scientific system; and we believe that the influence of this system in +the end must tend to standardising the conditions of wages and +employment throughout the country. + +Lastly, in connection with unemployment I must direct your attention +to the Development Bill, which is now before Parliament, the object of +which is to provide a fund for the economic development of our +country, for the encouragement of agriculture, for afforestation, for +the colonisation of England, and for the making of roads, harbours, +and other public works. And I should like to draw your attention to a +very important clause in that Bill, which says that the prosecution of +these works shall be regulated, as far as possible, by the conditions +of the labour market, so that in a very bad year of unemployment they +can be expanded, so as to increase the demand for labour at times of +exceptional slackness, and thus correct and counterbalance the cruel +fluctuations of the labour market. The large sums of money which will +be needed for these purposes are being provided by the Budget of Mr. +Lloyd-George, and will be provided in an expanding volume in the +years to come through the natural growth of the taxes we are imposing. + +I have hitherto been speaking of the industrial organisation of +insurance schemes, labour exchanges, and economic development. Now I +come to that great group of questions which are concerned with the +prevention and relief of distress. We have before us the reports of +the majority and minority of the Royal Commission on the Poor Law, and +we see there a great and urgent body of reforms which require the +attention of Parliament. The first and most costly step in the relief +of distress has already been taken by the Old-Age Pensions Act, +supplemented, as it will be if the Budget passes, by the removal of +the pauper disqualification. By that Act we have rescued the aged from +the Poor Law. We have yet to rescue the children; we have yet to +distinguish effectively between the _bona fide_ unemployed workman and +the mere loafer and vagrant; we have yet to transfer the sick, the +inebriate, the feeble-minded and the totally demoralised to +authorities specially concerned in their management and care. + +But what I want to show you, if I have made my argument clear, is that +all these schemes--which I can do little more than mention this +afternoon, each one of which is important--are connected one with the +other, fit into one another at many points, that they are part of a +concerted and interdependent system for giving a better, fairer social +organisation to the masses of our fellow-countrymen. Unemployment +insurance, which will help to tide a workman over a bad period, is +intimately and necessarily associated with the labour exchanges which +will help to find him work and which will test his willingness to +work. This, again, will be affected by the workings of the Development +Bill, which, as I told you, we trust may act as a counterpoise to the +rocking of the industrial boat and give a greater measure of stability +to the labour market. + +The fact that everybody in the country, man and woman alike, will be +entitled, with scarcely any exception, to an old-age pension from the +State at the age of seventy--that fact makes it ever so much cheaper +to insure against invalidity or infirmity up to the age of seventy. +And, with the various insurance schemes which are in preparation, we +ought to be able to set up a complete ladder, an unbroken bridge or +causeway, as it were, along which the whole body of the people may +move with a certain assured measure of security and safety against +hazards and misfortunes. Then, if provision can be arranged for widows +and orphans who are left behind, that will be a powerful remedy +against the sweating evil; for, as you know, these helpless people, +who in every country find employment in particular trades, are unable +to make any fair bargain for themselves, and their labour, and this +consequently leads to the great evils which have very often been +brought to the notice of Parliament. That, again, will fit in with the +Anti-Sweating Bill we are passing through Parliament this year. + +Now, I want you to see what a large, coherent plan we are trying to +work out, and I want you to believe that the object of the plan and +the results of it will be to make us a stronger as well as a happier +nation. I was reading the other day some of the speeches made by +Bismarck--a man who, perhaps more than any other, built up in his own +lifetime the strength of a great nation--speeches which he made during +the time when he was introducing into Germany those vast insurance +schemes, now deemed by all classes and parties in Germany to be of +the utmost consequence and value. "I should like to see the State" +(said Prince Bismarck in 1881), "which for the most part consists of +Christians, penetrated to some extent by the principles of the +religion which it professes, especially as concerns the help one gives +to his neighbour, and sympathy with the lot of old and suffering +people." Then, again, in the year 1884 he said: "The whole matter +centres in the question, 'Is it the duty of the State or is it not to +provide for its helpless citizens?' I maintain that it is its duty, +that it is the duty, not only of the 'Christian' State, as I ventured +once to call it when speaking of 'Practical Christianity,' but of +every State." + +There are a great many people who will tell you that such a policy, as +I have been endeavouring to outline to you this afternoon, will not +make our country stronger, because it will sap the self-reliance of +the working classes. It is very easy for rich people to preach the +virtues of self-reliance to the poor. It is also very foolish, +because, as a matter of fact, the wealthy, so far from being +self-reliant, are dependent on the constant attention of scores, and +sometimes even hundreds, of persons who are employed in waiting upon +them and ministering to their wants. I think you will agree with me, +on the other hand--knowing what you do of the life of this city and of +the working classes generally--that there are often trials and +misfortunes which come upon working-class families quite beyond any +provision which their utmost unaided industry and courage could secure +for them. Left to themselves, left absolutely to themselves, they must +be smashed to pieces, if any exceptional disaster or accident, like +recurring sickness, like the death or incapacity of the breadwinner, +or prolonged or protracted unemployment, fall upon them. + +There is no chance of making people self-reliant by confronting them +with problems and with trials beyond their capacity to surmount. You +do not make a man self-reliant by crushing him under a steam roller. +Nothing in our plans will relieve people from the need of making every +exertion to help themselves, but, on the contrary, we consider that we +shall greatly stimulate their efforts by giving them for the first +time a practical assurance that those efforts will be crowned with +success. + +I have now tried to show you that the Budget, and the policy of the +Budget, is the first conscious attempt on the part of the State to +build up a better and a more scientific organisation of society for +the workers of this country, and it will be for you to say--at no very +distant date--whether all this effort for a coherent scheme of social +reconstruction is to be swept away into the region of lost endeavour. + +That is the main aspect of the Budget to which I wish to draw your +attention. But there is another significance of the highest importance +which attaches to the Budget. I mean the new attitude of the State +towards wealth. Formerly the only question of the tax-gatherer was, +"How much have you got?" We ask that question still, and there is a +general feeling, recognised as just by all parties, that the rate of +taxation should be greater for large incomes than for small. As to how +much greater, parties are no doubt in dispute. But now a new question +has arisen. We do not only ask to-day, "How much have you got?" we +also ask, "How did you get it? Did you earn it by yourself, or has it +just been left you by others? Was it gained by processes which are in +themselves beneficial to the community in general, or was it gained by +processes which have done no good to any one, but only harm? Was it +gained by the enterprise and capacity necessary to found a business, +or merely by squeezing and bleeding the owner and founder of the +business? Was it gained by supplying the capital which industry needs, +or by denying, except at an extortionate price, the land which +industry requires? Was it derived from active reproductive processes, +or merely by squatting on some piece of necessary land till enterprise +and labour, and national interests and municipal interests, had to buy +you out at fifty times the agricultural value? Was it gained from +opening new minerals to the service of man, or by drawing a mining +royalty from the toil and adventure of others? Was it gained by the +curious process of using political influence to convert an annual +licence into a practical freehold and thereby pocketing a monopoly +value which properly belongs to the State--how did you get it?" That +is the new question which has been postulated and which is vibrating +in penetrating repetition through the land.[20] + +It is a tremendous question, never previously in this country asked so +plainly, a new idea, pregnant, formidable, full of life, that taxation +should not only have regard to the volume of wealth, but, so far as +possible, to the character of the processes of its origin. I do not +wonder it has raised a great stir. I do not wonder that there are +heart-searchings and angry words because that simple question, that +modest proposal, which we see embodied in the new income-tax +provisions, in the land taxes, in the licence duties, and in the tax +on mining royalties--that modest proposal means, and can only mean, +the refusal of the modern State to bow down unquestioningly before the +authority of wealth. This refusal to treat all forms of wealth with +equal deference, no matter what may have been the process by which it +was acquired, is a strenuous assertion in a practical form, that there +ought to be a constant relation between acquired wealth and useful +service previously rendered, and that where no service, but rather +disservice, is proved, then, whenever possible, the State should make +a sensible difference in the taxes it is bound to impose. + +It is well that you should keep these issues clearly before you +during the weeks in which we seem to be marching towards a grave +constitutional crisis. But I should like to tell you that a general +election, consequent upon the rejection of the Budget by the Lords, +would not, ought not to be, and could not be fought upon the Budget +alone. "Budgets come," as the late Lord Salisbury said in +1894--"Budgets come and Budgets go." Every Government frames its own +expenditure for each year; every Government has to make its own +provision to meet that expenditure. There is a Budget every year, and +memorable as the Budget of my right hon. friend may be, far-reaching +as is the policy depending upon it, the Finance Bill, after all, is in +its character only an annual affair. But the rejection of the Budget +by the House of Lords would not be an annual affair. It would be a +violent rupture of constitutional custom and usage extending over +three hundred years and recognised during all that time by the leaders +of every Party in the State. It would involve a sharp and sensible +breach with the traditions of the past; and what does the House of +Lords depend upon if not upon the traditions of the past? It would +amount to an attempt at revolution not by the poor, but by the rich; +not by the masses, but by the privileged few; not in the name of +progress, but in that of reaction; not for the purpose of broadening +the framework of the State, but of greatly narrowing it. Such an +attempt, whatever you may think of it, would be historic in its +character, and the result of the battle fought upon it, whoever wins, +must inevitably be not of an annual, but of a permanent and final +character. The result of such an election must mean an alteration of +the veto of the House of Lords; if they win they will have asserted +their right, not merely to reject legislation of the House of Commons, +but to control the finances of the country, and if they lose, we will +deal with their veto once and for all. + +We do not seek the struggle, we have our work to do; but if it is to +come, it could never come better than now. Never again perhaps, +certainly not for many years, will such an opportunity be presented to +the British democracy. Never will the ground be more favourable; never +will the issues be more clearly or more vividly defined. Those issues +will be whether the new taxation, which is admitted on all sides to be +necessary, shall be imposed upon luxuries, superfluities, and +monopolies, or upon the prime necessaries of life; whether you shall +put your tax upon the unearned increment on land or upon the daily +bread of labour; whether the policy of constructive social reform on +which we are embarked, and which expands and deepens as we advance, +shall be carried through and given a fair chance, or whether it shall +be brought to a dead stop and all the energies and attention of the +State devoted to Jingo armaments and senseless foreign adventure. And, +lastly, the issue will be whether the British people in the year of +grace 1909 are going to be ruled through a representative Assembly, +elected by six or seven millions of voters, about which almost every +one in the country, man or woman, has a chance of being consulted, or +whether they are going to allow themselves to be dictated to and +domineered over by a minute minority of titled persons, who represent +nobody, who are answerable to nobody, and who only scurry up to London +to vote in their party interests, in their class interests, and in +their own interests. + +These will be the issues, and I am content that the responsibility for +such a struggle, if it should come, should rest with the House of +Lords themselves. But if it is to come, we shall not complain, we +shall not draw back from it. We will engage in it with all our hearts +and with all our might, it being always clearly understood that the +fight will be a fight to the finish, and that the fullest forfeits, +which are in accordance with the national welfare, shall be exacted +from the defeated foe. + +FOOTNOTES: + +[20] We do not, of course, ask it of the individual taxpayer. That +would be an impossible inquisition. But the House of Commons asks +itself when it has to choose between taxes on various forms of wealth, +"By what process was it got?" + + + + +THE BUDGET AND PROPERTY. + +ABERNETHY, _October 7, 1909_ + +(From _The Daily Telegraph_, by permission of the Editor.) + + +This is a very fine gathering for a lonely glen, and it augurs well +for the spirit of Liberalism. Much will be expected of Scotland in the +near future. She will be invited to pronounce upon some of the largest +and most complicated questions of politics and finance that can +possibly engage the attention of thoughtful citizens, and her decision +will perhaps govern events. + +There is one contrast between Parties which springs to the eye at +once. One Party has a policy, detailed, definite, declared, actually +in being. The other Party has no policy. The Conservative Party has no +policy which it can put before the country at the present time on any +of the great controverted questions of the day. On most of the +previous occasions when we have approached a great trial of strength, +the Conservative Party have had a policy of their own which they +could state in clear terms. You would naturally expect some reticence +or reserve from the head of a Government responsible for the +day-to-day administration of affairs. But what do you see at the +present time? Mr. Asquith speaks out boldly and plainly on all the +great questions which are being debated, and it is the Leader of the +Opposition who has to take refuge in a tactical and evasive attitude. +Why, Mr. Balfour is unable to answer the simplest questions. At +Birmingham, the Prime Minister asked him in so many words: What +alternative did he propose to the Budget? What did he mean by Tariff +Reform? and what was his counsel to the House of Lords? + +It would not be difficult to frame an answer to all these questions. +Mr. Chamberlain, for instance, was quite ready with his answers to all +of them. At Glasgow in 1903 he stated what his Budget would have been, +and he explained precisely what he meant by Tariff Reform. At +Birmingham last month he was equally clear in urging the Lords to +reject the Budget. There is no doubt whatever where Mr. Chamberlain +and those who agree with him stand to-day. They would raise the extra +taxation which is required, by protective import duties on bread, on +meat, on butter, cheese, and eggs, and upon foreign imported +manufactured articles; and in order to substitute their plan for ours +they are prepared to urge the House of Lords to smash up the Budget +and to smash up as much of the British Constitution and the British +financial system as may be necessary for the purpose. + +That is their policy; but, after all, it is Mr. Balfour who is the +leader of the Conservative Party. He is the statesman who would have +to form and carry on any administration which might be formed from +that Party, and he will not state his policy upon any of the dominant +questions of the day. Why will he not answer these simple questions? +He is the leader, and it is because he wishes to remain the leader +that he observes this discreet silence. He tells us he is in favour of +Tariff Reform, he loves Tariff Reform, he worships Tariff Reform. He +feels that it is by Tariff Reform alone that the civilisation of Great +Britain can be secured, and the unity of the Empire achieved; but +nothing will induce him to say what he means by Tariff Reform. That is +a secret which remains locked in his own breast. He condemns our +Budget, he clamours for greater expenditure, and yet he puts forward +no alternative proposals by which the void in the public finances may +be made good. And as for his opinion about the House of Lords, he dare +not state his true opinion to-day upon that subject. I do not say that +there are not good reasons for Mr. Balfour's caution. It sometimes +happens that the politics of a Party become involved in such a queer +and awkward tangle that only a choice of evils is at the disposal of +its leader; and when the leader has to choose between sliding into a +bog on the one hand and jumping over a precipice on the other, some +measure of indulgence may be extended to him if he prefers to go on +marking time, and indicating the direction in which his followers are +to advance by a vague general gesture towards the distant horizon. + +Whatever you may think about politics, you must at least, in justice +to his Majesty's Government, recognise that their position is +perfectly plain and clear. Some of you may say to me, "Your course, +your policy may be clear enough, but you are burdening wealth too +heavily by your taxes and by your speeches." Those shocking speeches! +"You are driving capital out of the country." Let us look at these +points one at a time. The capital wealth of Britain is increasing +rapidly. Sir Robert Giffen estimated some years ago that the addition +to the capital wealth of the nation was at least between two hundred +and three hundred millions a year. I notice that the paid-up capital +of registered companies alone, which was 1,013 millions sterling in +1893, has grown naturally and healthily to 2,123 millions sterling in +1908. And, most remarkable of all, the figures I shall submit to you, +the gross amount of income which comes under the view of the Treasury +Commissioners who are charged with the collection of income-tax, was +in the year 1898-9 762 millions, and it had risen from that figure to +980 millions sterling in the year 1908-9: that is to say, that it had +risen by 218 millions in the course of ten years. + +From this, of course, a deduction has to be made for more efficient +methods of collection. This cannot be estimated exactly; but it +certainly accounts for much less than half the increase. Let us assume +that it is a half. The increase is therefore 109 millions. I only wish +that wages had increased in the same proportion. When I was studying +those figures I have mentioned to you I looked at the Board of Trade +returns of wages. Those returns deal with the affairs of upwards of +ten millions of persons, and in the last ten years the increase in the +annual wages of that great body of persons has only been about ten +million pounds: that is to say, that the increase of income assessable +to income-tax is at the very least more than ten times greater than +the increase which has taken place in the same period in the wages of +those trades which come within the Board of Trade returns. + +When we come to the question of how burdens are to be distributed, you +must bear these facts and figures in mind, because the choice is +severely limited. You can tax wealth or you can tax wages--that is the +whole choice which is at the disposal of the Chancellor of the +Exchequer. Of course I know there are some people who say you can tax +the foreigner--but I am quite sure that you will not expect me to +waste your time in dealing with that gospel of quacks and creed of +gulls. The choice is between wealth and wages, and we think that, in +view of that great increase in accumulated wealth which has marked +the last ten years, and is the feature of our modern life, it is not +excessive or unreasonable at the present stage in our national +finances to ask for a further contribution from the direct taxpayers +of something under eight millions a year. That is the total of all the +new taxes on wealth which our Budget imposes, and it is about equal to +the cost of four of those _Dreadnoughts_ for which these same classes +were clamouring a few months ago. And it is less than one-thirteenth +of the increased income assessable to income-tax in the last ten +years. + +It is because we have done this that we are the object of all this +abuse and indignation which is so loudly expressed in certain quarters +throughout the country at the present time. While the working-classes +have borne the extra taxation upon their tobacco and whisky in +silence, all this rage and fury is outpoured upon the Government by +the owners of this ever-increasing fund of wealth, and we are +denounced as Socialists, as Jacobins, as Anarchists, as Communists, +and all the rest of the half-understood vocabulary of irritated +ignorance, for having dared to go to the wealthy classes for a fair +share of the necessary burdens of the country. How easy it would be +for us to escape from all this abuse if we were to put the extra +taxation entirely upon the wages of the working classes by means of +taxes on bread and on meat. In a moment the scene would change, and we +should be hailed as patriotic, far-sighted Empire-builders, loyal and +noble-hearted citizens worthy of the Motherland, and sagacious +statesmen versed in the science of government. See, now, upon what +insecure and doubtful foundations human praise and human censure +stand. + +Well, then, it is said your taxes fall too heavily upon the +agricultural landowner and the country gentleman. Now, there is no +grosser misrepresentation of the Budget than that it hits the +agricultural landowner, and I think few greater disservices can be +done to the agricultural landowner, whose property has in the last +thirty years in many cases declined in value, than to confuse him with +the ground landlord in a great city, who has netted enormous sums +through the growth and the needs of the population of the city. None +of the new land taxes touch agricultural land, while it remains +agricultural land. No cost of the system of valuation which we are +going to carry into effect will fall at all upon the individual owner +of landed property. He will not be burdened in any way by these +proposals. On the contrary, now that an amendment has been accepted +permitting death duties to be paid in land in certain circumstances, +the owner of a landed estate, instead of encumbering his estate by +raising the money to pay off the death duties, can cut a portion from +his estate; and this in many cases will be a sensible relief. +Secondly, we have given to agricultural landowners a substantial +concession in regard to the deductions which they are permitted to +make from income-tax assessment on account of the money which they +spend as good landlords upon the upkeep of their properties, and we +have raised the limit of deduction from 121/2 per cent. to 25 per cent. +Thirdly, there is the Development Bill--that flagrant Socialistic +measure which passed a second reading in the House of Lords +unanimously--which will help all the countryside and all classes of +agriculturists, and which will help the landlord in the country among +the rest. So much for that charge. + +Then it is said, "At any rate you cannot deny that the Budget is +driving capital out of the country." I should like to point out to you +that before the Budget was introduced, we were told that it was Free +Trade that was driving capital out of the country. Let that pass. It +is said we cannot deny that the Budget is driving capital out of the +country. I deny it absolutely. To begin with, it is impossible to +drive the greater part of our capital out of this country, for what is +the capital of the country? The greatest part of that capital is the +land, the state of cultivation which exists, the roads, the railways, +the mines, the mills--this is the greatest part of the capital. The +owners of that capital might conceivably, if they thought fit, depart +from the country, but their possessions would remain behind. + +I shall be asked, What about all this foreign investment that is going +on? Is not British credit now being diverted abroad to foreign +countries, to the detriment of our own country? Is not British capital +fleeing from The Socialistic speeches of the Chancellor of the +Exchequer, and the President of the Board of Trade, and taking refuge +in Germany, where of course there are no Socialists, or in other +countries, where there is never any disturbance, like France, or +Spain, or Russia, or Turkey? Now let us look into that. There are only +two ways in which capital can leave this country for foreign +investments. It is no good sending bits of paper to the foreigner and +expecting him to pay a dividend in return. There are only two +ways--one is by exports made by British labour, and the other by +bullion. Now, if the exports were to increase, surely that should be a +cause of rejoicing, especially to our Tariff Reformers, who regard the +increase in exports as the index of national prosperity. As for the +second--the export of bullion--would you believe it, it is only a +coincidence, but it is an amusing coincidence, there are actually six +million pounds' worth more gold in the country now, than there were at +the beginning of the year before the Budget was introduced. The active +and profitable investment abroad which has marked the last two or +three years, which is bound to swell the exports of the next few +years, has not been attended by any starvation of home industry. On +the contrary, the amount of money forthcoming for the development of +new industries and now enterprises in this country during the last +two or three years has compared very favourably with the years which +immediately preceded them, when the Conservative Government was in +power. + +Property in Great Britain is secure. It would be a great mistake to +suppose that that security depends upon the House of Lords. If the +security of property in a powerful nation like our own were dependent +upon the action or inaction of 500 or 600 persons, that security would +long ago have been swept away. The security of property depends upon +its wide diffusion among great numbers and all classes of the +population, and it becomes more secure year by year because it is +gradually being more widely distributed. The vital processes of +civilisation require, and the combined interests of millions +guarantee, the security of property. A society in which property was +insecure would speedily degenerate into barbarism; a society in which +property was absolutely secure, irrespective of all conceptions of +justice in regard to the manner of its acquisition, would degenerate, +not to barbarism, but death. No one claims that a Government should +from time to time, according to its conceptions of justice, attempt +fundamentally to recast the bases on which property is erected. The +process must be a gradual one; must be a social and a moral process, +working steadily in the mind and in the body of the community; but we +contend, when new burdens have to be apportioned, when new revenues +have to be procured, when the necessary upkeep of the State requires +further taxes to be imposed--we contend that, in distributing the new +burdens, a Government should have regard first of all to ability to +pay and, secondly, that they should have regard to some extent, and so +far as is practicable, to the means and the process by which different +forms of wealth have been acquired; and that they should make a +sensible difference between wealth which is the fruit of productive +enterprise and industry or of individual skill, and wealth which +represents the capture by individuals of socially created values. We +say that ought to be taken into consideration. We are taking it into +consideration now by the difference we have made in the income-tax +between earned and unearned incomes, by the difference we make between +the taxation which is imposed upon a fortune which a man makes himself +and the fortune which he obtains from a relative or a stranger. We +are taking it into consideration in our tax on mining royalties, in +our licence duties and in our taxes on the unearned increment in land. +The State, we contend, has a special claim upon the monopoly value of +the liquor licence, which the State itself has created, and which the +State itself maintains from year to year by its sole authority. If +that claim has not previously been made good, that is only because the +liquor interest have had the power, by using one branch of the +Legislature, to keep the nation out of its rights. All the more reason +to make our claim good now. + +Again we say that the unearned increment in land is reaped in +proportion to the disservice done to the community, is a mere toll +levied upon the community, is an actual burden and imposition upon +them, and an appropriation by an individual, under existing law, no +doubt, of socially created wealth. For the principle of a special +charge being levied on this class of wealth we can cite economic +authority as high us Adam Smith, and political authority as +respectable as Lord Rosebery; and for its application we need not +merely cite authority, but we can point to the successful practice of +great civilised neighbouring States. + +Is it really the contention of the Conservative Party that the State +is bound to view all processes of wealth-getting with an equal eye, +provided they do not come under the criminal codes? Is that their +contention? Are we really to be bound to impose the same burden upon +the hardly won income of the professional man and the extraordinary +profits of the land monopolist? Are we really to recognise the liquor +licence which the State created, which the law says is for one year +only--as if it were as much the brewers' or the publicans' property +_for ever_ as the coat on his back? No; it is absurd. Of the waste and +sorrow and ruin which are caused by the liquor traffic, of the injury +to national health and national wealth which follows from it, which +attends its ill-omened footsteps, I say nothing more in my argument +this afternoon. The State is entitled to reclaim its own, and they +shall at least render unto Caesar the things which are Caesar's. + +The money must be found, and we hold that Parliament, in imposing the +inevitable taxes, is entitled not only to lay a heavier proportionate +burden upon the rich than on the poor, but also to lay a special +burden upon certain forms of wealth which are clearly social in their +origin, and have not at any point been derived from a useful or +productive process on the part of their possessors. But it may be +said, "Your plans include other expenditure besides the Navy and +Old-age Pensions. What about Insurance, Labour Exchanges, and economic +development?" Those objects, at least, it may be urged are not +inevitable or indispensable. It is quite true that the taxation which +we seek to impose this year, and which is sufficient, and only +sufficient for the needs of this year, will yield more abundant +revenues in future years, and if at the same time a reduction in the +expenditure on armaments becomes possible, we shall have substantial +revenues at our disposal. That is perfectly true, but is that a reason +for condemning the Budget? When we see on every hand great nations +which cannot pay their way, which have to borrow merely to carry on +from year to year, when we see how sterile and unproductive all the +dodges and devices of their protective tariffs have become, when we +remember how often we have ourselves been told that under Free Trade +no more revenue could be got, is it not a welcome change for our +country, and for our Free Trade policy, to find our opponents +complaining of the expansive nature of a Free Trade revenue? I don't +wonder that Tory Protectionists have passed a resolution at Birmingham +declaring that the Budget will indefinitely postpone--that was the +phrase--the scheme of Tariff Reform. + +And upon what objects and policies do we propose to spend the extra +revenue which this Budget will unquestionably yield in future years? +People talk vaguely of the stability of society, of the strength of +the Empire, of the permanence of a Christian civilisation. On what +foundation do they seek to build? There is only one foundation--a +healthy family life for all. If large classes of the population live +under conditions which make it difficult if not impossible for them to +keep a home together in decent comfort, if the children are habitually +underfed, if the housewife is habitually over-strained, if the +bread-winner is under-employed or under-paid, if all are unprotected +and uninsured against the common hazards of modern industrial life, if +sickness, accident, infirmity, or old age, or unchecked intemperance, +or any other curse or affliction, break up the home, as they break up +thousands of homes, and scatter the family, as they scatter thousands +of families in our land, it is not merely the waste of earning-power +or the dispersal of a few poor sticks of furniture, it is the stamina, +the virtue, safety, and honour of the British race that are being +squandered. + +Now the object of every single constructive proposal to which the +revenues raised by this Budget will be devoted, not less than the +object of the distribution of the taxes which make up the Budget, is +to buttress and fortify the homes of the people. That is our aim; to +that task we have bent our backs; and in that labour we shall not be +daunted by the machine-made abuse of partisans or by the nervous +clamour of selfish riches. Whatever power may be given to us shall be +used for this object. It is for you to say whether power will be given +us to prevail. + +But they say, "This uncertainty about the Budget is causing +unemployment; you are aggravating the evils you seek to remedy." The +Budget has not increased unemployment. Unemployment is severe in the +country this year, but it is less severe this year than it was last, +and it is less severe since the Budget was introduced than before it +was introduced. The proportion of trade unionists reported to be +unemployed in the Board of Trade returns at the end of September was +7.4 per cent., and that is lower than any month since May 1908, and it +compares very favourably with September of last year, when the +proportion was not 7.4, but 9.3 per cent. + +I can well believe that the uncertainty as to whether the House of +Lords will, in a desperate attempt to escape their fair share of +public burdens, plunge the country into revolution and its finances +into chaos--I can well believe that that uncertainty is bad for trade +and employment, and is hampering the revival which is beginning all +over the country. I do not doubt that all this talk of the rejection +of the Budget is injurious to business, to credit, and to enterprise; +but who is to blame for that? When did we ever hear of a Budget being +rejected by the Lords before? When did we ever hear of a leader of the +House of Lords proposing, like Lord Lansdowne, to decide whether he +would tear up the British Constitution after consultation with the +leaders of the drink trade? The uncertainty is not due to our action, +but to their threats. Our action has been regular, constitutional, +and necessary. Their threats are violent, unprecedented, and +outrageous. Let them cease their threats. Let one of their +leaders--let Mr. Balfour, for instance, say this year what he said +last year, in the month of October, at Dumfries. Let him say, "It is +the House of Commons and not the House of Lords which settles +uncontrolled our financial system." Let him repeat these words, and +all uncertainty about the Budget will be over. + +I am amazed and I am amused when I read in the newspapers the silly +and fantastic rumours which obtain credence, or at any rate currency, +from day to day. One day we are told that it is the intention of the +Government to seek a dissolution of Parliament before the Budget +reaches the House of Lords--in other words, to kill the child to save +its life. The next day we are told the Government have decided to have +a referendum--that is to say, they will ask everybody in the country +to send them a postcard to say whether they would like the Budget to +become law or not. Another day we are told that the Government are +contemplating a bargain with the House of Lords to alter the Budget to +please them, or that we should make a bargain with them that if they +pass the Budget we should seek a dissolution in January. Why should we +make a bargain with the House of Lords? Every one of those rumours is +more silly, more idiotic, than the other. I wish our Conservative +friends would face the facts of the situation. "Things are what they +are, and their consequences will be what they will be." The House of +Lords has no scrap of right to interfere in finance. If they do, they +violate the Constitution, they shatter the finances, and they create +an administrative breakdown the outcome of which no man can foresee. +If such a situation should occur a Liberal Government can look only to +the people. We count on you, and we shall come to you. If you sustain +us we shall take effectual steps to prevent such a deadlock ever +occurring again. That is the whole policy of his Majesty's +Government--blunt, sober, obvious, and unflinching. + + + + +THE CONSTITUTIONAL MENACE + +NATIONAL LIBERAL CLUB, _October 9, 1909_ + +(From _The Times_, by permission.) + + +I have never been able to rank myself among those who believe that the +Budget will be rejected by the House of Lords. It is not that I take +an exaggerated view of the respect which that body would bear to the +constitutional tradition upon which alone they depend. It is not that +I underrate at all the feelings of personal resentment and of +class-prejudice with which they regard, naturally, many of the +provisions of the Budget. But I have a difficulty in believing that +the responsible statesmen by whom they are led, and by whom we think +they are controlled, would not hesitate as patriotic men before they +plunged the finances of the country into what would be a largely +irremediable confusion. And still more I find it difficult to believe +that Party leaders, anxious no doubt for office on the most secure +terms and at the shortest notice, would voluntarily run unusual risks +in order to be able to fight a decisive battle upon exceptionally +unfavourable ground. In common with most of us who are here to-night, +I hold that the rejection of the Budget by the House of Lords would be +a constitutional outrage. I do not think we are entitled at this stage +to assume that such an outrage will be committed. We cannot credit +such intentions, even though we read them every day brutally and +blatantly affirmed by a powerful Party Press. We do not credit such +intentions. We are, however, bound to be fully prepared against all +contingencies. The necessary precautions must be taken. The fighting +machine must undergo all those preliminary processes necessary for a +rapid and efficient mobilisation. And the ground on which a great +battle might take place, the theatre of war, must be scanned +beforehand with military foresight. And that is being done. + +But those who lightly estimate the crisis which will follow the +rejection of the Budget by the House of Lords must be either strangely +unimaginative or else they must be strangely ignorant of British +history and of the British Constitution. The control of finance by +the representative Assembly is the keystone of all that constitutional +fabric upon which and within which all of us here have dwelt safely +and peacefully throughout our lives. It is by the application of the +power of the purse, and by the application of the power of the purse +almost alone, that we have moved forward, slowly and prosaically, no +doubt, during the last two hundred years, but without any violent +overturn such as has rent the life and history of almost every other +considerable country, from a kind of mediaeval oligarchy to a vast +modern democratic State based on the suffrages of six million or seven +million electors, loyal to the Crown, and clothed with all the stately +forms of the venerable English monarchy. Finance has been the +keystone. Take finance away from the House of Commons, take the +complete control of financial business away from the representative +Assembly, and our whole system of government, be it good, bad, or +indifferent, will crumble to pieces like a house of cards. + +The rejection of the Budget by the House of Lords would not merely be +a question of stopping a money Bill or of knocking out a few taxes +obnoxious to particular classes; the rejection of the Budget by the +House of Lords would mean the claim of the House of Lords--that is, +the claim of a non-elective and unrepresentative Chamber--to make and +to unmake Governments; and a recognition of that claim by the country +would unquestionably mean that the House of Lords would become the +main source and origin of all political power under the Crown. Now +that is a great quarrel; that is a quarrel on which we had hoped, on +which we had been taught, that the sword had been sheathed +victoriously for ever. And that is the issue that is before us now. We +do not intend to soften it in any way. The responsibility for the +consequences must rest with the aggressor who first violates the +constitutional tradition of our land. + +The Budget is through Committee. We have had not merely an exhaustive +but an exhausting discussion. I am told by ingenious calculators in +the newspapers that over six hundred hours, from some of which I +confess I have been absent, of debate have been accorded to the +Committee stage. No guillotine closure has been applied. Full, free, +unfettered debate has been accorded--has been accorded with a +patience and with a generosity unprecedented in Parliamentary annals, +and which in effect has left a minority not merely satisfied in all +the conditions of reasonable debate, but unable even on grounds of the +most meticulous partisanship to complain that the fullest opportunity +has not been accorded to them. In all this long process of six hundred +hours and upwards we have shown ourselves willing to make concessions. +They are boasting to-day that they, forsooth, are in part the authors +of the Budget. Every effort has been made to meet honest and outspoken +difference; every effort has been made to gather for this Budget--the +people's Budget, as they know full well it is--the greatest measure of +support not only among the labouring classes, but among all classes in +our vast and complicated community. + +It has been a terrible strain. Lord Rosebery the other day at Glasgow +paid his tribute to the gallant band who had fought in opposition to +the Budget. Had he no word for his old friends? Had he no word for +those who were once proud to follow him, and who now use in regard to +him only the language of regret? Had he no word for that other +gallant band, twice as numerous, often three times as numerous, as the +Tory Opposition, who have sat through all these months--fine speakers +silent through self-suppression for the cause, wealthy men sitting up +to unreasonable hours to pass taxes by which they are mulcted as much +as any Tory? Men who have gone on even at the cost of their lives--had +he no word for them? We to-night gathered together here in the +National Liberal Club have a word and a cheer for the private members +of the Liberal Party in the House of Commons who have fought this +battle through with unequalled loyalty and firmness, and who have +shown a development of Parliamentary power to carry a great measure +which I venture to say has no counterpart in the Parliamentary history +of this country. + +Well, that long process of debate, of argument, of concession, of +compromise, of conciliation will very soon come to an end. When the +Budget leaves the House of Commons the time of discussion, so far as +we are concerned, will have come to an end. It will leave the House of +Commons in a final form, and no amendment by the House of Lords will +be entertained by us. I have heard it often said, and I have read it +more often still, that there are some members of the Cabinet who want +to see the Budget rejected, and I have even been shocked to find +myself mentioned as one of these Machiavellian intriguers. To those +who say we want to see the Budget rejected I reply, That is not true. +As Party men we cannot be blind to the great tactical advantages which +such an event would confer upon us. We cannot pretend that our +feelings in such an event would be feelings of melancholy; but we have +our work to do. Politics is not a game. It is an earnest business. We +have our work to do. We have large, complex schemes of social +organisation and financial reform on which we have consumed our +efforts, and which we desire to see, at the shortest possible date, +brought to conception and maturity. We do not want to see the finances +of the country plunged into inextricable confusion, and hideous loss +inflicted on the mass of the people and the taxpayers. For my part, I +say without hesitation I do not at all wish to see British politics +enter upon a violent, storm-shaken, and revolutionary phase. I am +glad, at any rate, if they are to enter upon that phase, it shall be +on the responsibility of others. + +Our intentions are straightforward. We seek no conflict; we fear no +conflict. We shall make no overtures to the House of Lords; we shall +accept no compromise. We are not called upon to offer them any +dignified means of escape from a situation into which they have been +betrayed by the recklessness of some of their supporters. They have no +right whatever to interfere in financial business directly or +indirectly at any time. That is all we have to say, and for the rest +we have a powerful organisation, we have a united Party, we have a +resolute Prime Minister, we have a splendid cause. + +I do not think we need at this stage speculate upon the result of a +battle which has not yet been, and which may never be at this juncture +fought. I have seen enough of the ups and downs of real war to know +how foolish forecasts of that character often are. But when an army +has been brought into the field in the best condition, in the largest +possible numbers, in a spirit of the highest enthusiasm, at the most +favourable season, and on the best possible ground--then I think, when +our army has been brought into that situation, we can afford to await +the supreme arbitrament with a cool and serene composure; and this +mood of composure and of calmness may ripen into a kind of joyous and +warlike heartiness, if we can also feel that the cause for which we +are fighting is broadly and grandly a true and righteous cause. + +Error, of course, there is always in all human affairs--error of +conception, error of statement, error of manner, error of weakness, +error of partisanship. We do not deny that, but strip both the great +political Parties which to-day present themselves before the people of +Britain, strip them of their error, strip them of that admixture of +error which cloys and clogs all human action, divest them of the +trappings of combat in which they are apparelled, let them be nakedly +and faithfully revealed. If that were done, cannot we feel soberly and +assuredly convinced that, on the main contested issues of the day, +upon the need of social organisation, upon the relations between the +two Houses of Parliament, upon the regulation and control of the +liquor traffic, upon a national settlement with Ireland as we have +made with Africa, upon Free Trade, upon the land--upon all of them +separately, still more upon all of them together, if we ask ourselves +in our most silent and reflective mood alone--cannot we feel a sober +conviction that, on the whole, we hold the larger truth? + + + + +_Printed by Hazell, Watson & Viney, Ld., London and Aylesbury._ + + * * * * * + + +--------------------------------------------------------------+ + | Typographical errors corrected in text: | + | | + | Page 24: bona fide replaced with bona fide | + | Page 285: proverty replaced with property | + | Page 291: beween replaced with between | + | Page 374: 'more than any any' replaced with 'more than any' | + | | + +--------------------------------------------------------------+ + + * * * * * + + + + + + +End of the Project Gutenberg EBook of Liberalism and the Social Problem, by +Winston Spencer Churchill + +*** END OF THIS PROJECT GUTENBERG EBOOK LIBERALISM AND THE SOCIAL PROBLEM *** + +***** This file should be named 18419.txt or 18419.zip ***** +This and all associated files of various formats will be found in: + http://www.gutenberg.org/1/8/4/1/18419/ + +Produced by Jeannie Howse, Thierry Alberto and the Online +Distributed Proofreading Team at http://www.pgdp.net + + +Updated editions will replace the previous one--the old editions +will be renamed. + +Creating the works from public domain print editions means that no +one owns a United States copyright in these works, so the Foundation +(and you!) can copy and distribute it in the United States without +permission and without paying copyright royalties. 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