fault of a compulsory pilot stands over for the time being. An alteration of British law will be necessary to bring it into accord on this point with the international rules. It was arranged (and the understanding was embodied in an additional article in the convention) that it should not be obligatory to give effect to this alteration until the convention dealing with the limitation of liability of shipowners had been agreed upon by the Powers. That is another convention which at present is only in draft, and cannot be proceeded with until another international conference has been held. It is noteworthy, however, that since the collision convention was signed providing for the postponement of this point, the report of the Departmental Committee on Pilotage has repeated the recommendation of previous committees to the effect that this alteration in our law should be made. Indeed, it was referred to as "a reform which has been all too long delayed." The principle that there must be a change has been accepted by our delegates to the international conferences, and, in fact, the alteration is now only a question of time.

The only remaining point to note regarding the Maritime Conven. tions Bill is that it does not extend to Canada, Australia, New Zealand, South Africa, or Newfoundland, though otherwise the uniform law will apply throughout the British dominions. The two conventions to which effect will be able to be given when this Bill becomes law were brought in a somewhat perfunctory way before the Colonial Shipping Conference in 1907, but they have been modified since then, and it is only right and proper that the colonies should have an opportunity of considering the proposed basis of international uniformity, though any further modification would be almost out of the question at this etage. It is noteworthy that at the recent Imperial Conference a desire was expressed that treaty matters affecting the colonies should be discussed with them by the home Government at an early rather than at a later stage, and it seems strange that at this conference there was no mention made either of the two conventions referred to in the Bill, or of the two other conventions still only in draft. The latter especially would have seemed worth discussing. It is understood that the International Diplomatic Conference which will further consider these draft conventions (on limitation of liability and mortgages and liens) will not be held until next year. Meanwhile, it may be hoped that the Bill dealing with the subject-matter of the two completed conventions will become law. 8. D. C.

LOCAL GOVERNMENT FINANCIAL ADJUSTMENTS. REPORT by the JOINT SELECT COMMITTEE of the HOUSE OF LORDS and the HOUSE OF COMMONS on the LOCAL GOVERNMENT ACTS 1888 and 1894 and LOCAL GOVERNMENT (SCOTLAND) ACTS 1889 and 1894.

ORDERED TO REPORT:

That the Committee have met and considered the matters referred to them :

1. The Committee were appointed to inquire into the application of the provisions contained in the Local Government Acts 1888 and 1894 and the Local Government (Scotland) Acts 1889 and 1894, relating to financial adjustments consequent on the alteration of the boundaries of a local government area or on an alteration in the constitution or status of the governing body of a local government area, and to report whether they are of opinion that any amendments in such provisions are desirable.

2. Evidence has been heard from official witnesses on behalf of the Local Government Board and of the Scottish Office. The following associations were represented by counsel:--The County Councils' Association,

The Urban District Councils' Association,
The Rural District Councils' 'Association,

The Association of Municipal Corporations,

The Convention of Royal and Parliamentary Burghs of Scotland, and

The Association of County Councils of Scotland. Evidence was also given by the Comptroller of the London County Council, clerks to the guardians of representative Poor Law unions, and Sir Hugh Owen, G.C.B., who, since 1898, has acted as arbitrator between county councils and county boroughs under the provisions of the Local Government Act 1888.

3. The Committee determined to deal with the English case in the first instance, as it differs in some important respects from that of Scotland.

In considering the English case as it presents itself to-day the Committee decided that the most convenient course would be to divide their report, as far as circumstances would allow, into the following groups :

(1) The alteration of county boundaries by the extension of an existing county borough or by the creation of a new county borough ;

(2) The alteration of rural district areas due to either the creation or extension of non-county boroughs and urban districts; (3) Poor law unions;

(4) London.

4. The reasons which led to the appointment of the Committee are briefly as follows:

As the Local Government Act 1888 was originally introduced in the House of Commons, provision was made for the creation of ten county boroughs specially named. During its passage through Par

liament sixty-one other boroughs were scheduled, and Commissioners were appointed under the Act.

Very full authority was given to them. It was to "extend to the settlement and the determination by them on such terms and in such manner as they in their absolute discretion think most just and fit of the matters referred to them, and also of all such matters and questions as are in their judgment incident thereto or consequent thereon, to the end that their award or awards may effect a final settlement, and until a final settlement is made the authority of the Commissioners shall extend to determine the proportions in which payments are to be made to the councils of counties and county boroughs out of the Local Taxation Account, and all payments so made shall be taken into account in the making of the adjustment." Further: "Every award, order, and other instrument made by or proceeding from the Commissioners" was to be "binding and conclusive to and for all intents and purposes, and have the like effect as if it had been made by a judge of the High Court of Justice in England." And no such award was to be removable by any court, nor were the proceedings or acts of the Commissioners liable to be interfered with in any way.

Their powers were, unless continued by Parliament, to cease on the last day of December 1890, but they were continued in office by the annual Expiring Laws Continuance Acts for some time after that date.

Sect. 32 was inserted to lay down the general principles under which they were to act as to boroughs and county boroughs. This section provides as follows :—

"(1) An equitable adjustment respecting the distribution of the proceeds of the local taxation licences and probate duty grant, and respecting all other financial relations, if any, between each county, and each county borough specified in the said schedule as being deemed for the purposes of this Act to be situate in that county, shall be made by agreement, within twelve months after the appointed day, between the councils of each county and each borough, and in default of any such agreement by the Commissioners appointed under this Act; and such adjustment shall provide, in the case of any expenses which may in future be incurred by the county wholly or partly on behalf of the borough, for the liability of such borough to contribute, and, save as provided by this Act, any existing liability to contribute or to incur expense shall after the appointed day cease, and an equitable provision for such cessation shall be made in the adjustment.

(2) Where a county borough is specified in the said schedule as being deemed for the purposes of this Act to be situate in more than one county, the necessary adjustment shall be made between the counties.

(3) In such adjustment regard shall be had to the existing property, debts, and liabilities (if any) connected with the financial relations of the county and borough, and to the consideration that the county is not to be placed in any worse financial position by reason of the boroughs therein being constituted county boroughs, and that a county borough is not to be placed in a worse financial position than it would have been in if it had remained part of the county and had shared in the division of the sums received by a county in respect of the licence duties and the probate duty grant, as provided by this Act, and to the amount of benefit and value of the services which the borough receives in return for existing contributions, if any, and to all the circumstances of each case which it appears equitable to consider, subject nevertheless to the following provisions :

"(a) Where separate commissions of assize, oyer and terminer, and gaol delivery are not directed to be executed in a county borough, the borough council shall contribute a proper share of the costs of and incidental to the assizes of the county: "(b) If the borough is not at the passing of this Act a quarter sessions borough, the borough council shall contribute a proper share of the costs of and incidental to the quarter sessions and petty sessions of the county, and of and incidental to the coroners of the county or any franchise therein, and if a grant of a court of quarter sessions is hereafter made to the borough, the borough shall redeem the liability to such contribution on such terms as may be agreed upon, or, in default of agreement, may be determined by arbitration under this Act:

"(c) Where any portion of the costs of building and furnishing any county lunatic asylum has been contributed by a county borough, then, until a new arrangement is made between the county and borough councils, the borough council shall contribute in respect of the lunatic asylums for the time being of the county the like amount as would if this Act had not passed have been contributed by the borough; and the county councils shall provide accommodation for and maintain pauper lunatics sent from the borough on the like terms as before the passing of this Act; and the borough council may, if they so desire, appoint to be members of the committee of visitors of any such asylums such number of members of the council as may be agreed upon, or in default of agreement be determined by the Commissioners under this Act, but such appointment shall be in substitution for any appointment made on the part of the borough under any existing law or arrangement. Any new arrangement may be made between the county council and all the borough councils concerned with respect to any such lunatic asylum, and if any such new arrangement is made, the borough and county councils may carry into effect any adjustment of

property, debts, and liabilities which is the subject of such arrangement. If any council desires to make a new arrangement, and any or all of the other councils refuse to agree to the same, the matter shall be referred to the Commissioners under this Act, or, after they have ceased to hold office, to arbitration under this Act.

(d) Each county borough shall be liable for the maintenance of pauper lunatics in like manner as any other county. "(4) In the adjustment of any financial relations other than the distribution of the proceeds of the licences and probate duty grant, no borough wholly or partially exempt from contributing to any object shall be rendered liable so to contribute, or to contribute in greater proportion than at present.

"(5) The provisions of Part III. of this Act with respect to the adjustment of property, income, debts, liabilities, and expenses, and to borrowing for the purpose, shall apply as if the Commissioners under this Act were the arbitrator in that Part mentioned.

"(6) Provided that at any time after the end of five years from the date of an agreement or award adjusting the financial relations of any county and borough, if the council of either the county or borough satisfy the Local Government Board that the adjustment has become inequitable and that the councils are unable to agree on a new adjustment, the Board shall appoint an arbitrator, and such arbitrator shall proceed to make a new equitable adjustment as if he were the Commissioners under this Act, and the provisions of this Act shall apply accordingly. Any new adjustment made by agreement or by the award of an arbitrator under this section may, after the expiration of five years from the date of such agreement or award, be altered either by agreement or by arbitration as above mentioned.

"(7) Until any adjustment in pursuance of this section has come into operation, the county or borough council shall pay out of the county or borough fund to the borough or county council, as the case may be, the average annual amount which during the three years next before the appointed day has been expended by the county for the benefit of the borough or contributed by the borough to the county, as the case may be, but any sum so paid shall be taken into account in the making of the adjustment, and the adjustment shall be made so as to take effect as from the appointed day.

"(8) Any contribution by a county borough to the county in pursuance of this section shall be required and made in accordance with sect. 153 of the Municipal Corporations Act 1882, and that section, except so far as relates to the appointment of an arbitrator, shall apply in like manner as if every such borough were a quarter sessions borough situate in the county.

(9) Expressions in this section relating to contributions by a borough to a county shall be construed to include any sum raised by the assessment of the parishes or hereditaments in the borough to the county rate."

Sect. 62 of the same Act applies to the alteration of local areas other than county boroughs, and is as follows:

"(1) Any councils and other authorities affected by this Act or by any scheme, order, or other thing made or done in pursuance of this Act may from time to time make agreements for the purpose of adjusting any property, income, debts, liabilities, and expenses, so far as effected by this Act or such scheme, order, or thing of the parties to the agreement, and the agreement and any other agreement authorised by this Act to be made for the purpose of the adjustment of any property, debts, liabilities, or financial relations, may provide for the transfer or retention of any property, debts, and liabilities, with or without any conditons, and for the joint use of any property, and for the transfer of any duties, and for payment by either party to the agreement in respect of property, debts, duties, and liabilities so transferred or retained, or of such joint user, and in respect of the salary, remuneration, or compensation payable to any officer or person, and that either by way of a capital sum or of a terminable annuity for a period not exceeding that allowed by the Commissioners under this Act or the Local Government Board.

(2) In default of an agreement as to any matter requiring adjustment for the purpose of this Act, or any matter which, in case of difference, is to be referred to arbitration, then, if no other mode of making such adjustment or determining such difference is provided by this Act, such adjustment or difference may be made or determined by an arbitrator appointed by the parties, or in case of difference as to the appointment, appointed by the Local Government Board.

(3) An arbitrator appointed under this Act shall be deemed to be an arbitrator within the meaning of the Lands Clauses Consolidation Act 1845 and the Acts amending the same, and the provisions of those Acts with respect to an arbitration shall apply accordingly; and, further, the arbitrator may state a special case, and, notwithstanding anything in the said Act, shall determine the amount of the costs, and shall, have power to disallow as costs in the arbitration the costs of any witness whom he considers to have been called unnecessarily, and any other costs which he considers to have been incurred unnecessarily.

"(4) Any award or order made by the Commissioners or any arbitrator under this Act may provide for any matter for which an agreement might have provided.

(5) Any sum required to be paid for the purpose of adjustment, or of any award or order made by the Commissioners or an arbitrator under this Act, may be paid out of the county or borough fund or out of such other special fund as the council, with the approval

of the Commissioners under this Act or of the Local Government Board, may direct.

"(6) The payment of any capital sum required to be paid for the purposes of the adjustment or of an agreement under this Act, or of any award or order made upon any arbitration under this Act, shall be a purpose for which a council may borrow under this Act, or in the case of a borough council under the Municipal Corporations Act 1882 or any local Act, and such sum may be borrowed on the security of all or any of the funds, rates, and revenues of the council, and either by the creation of stock or in any other manner in which they are for the time being authorised to borrow, and such sum may be borrowed without the consent of the Treasury or any other authority, so that it be repaid within such period as the Local Government Board may sanction, by such method as is mentioned in Part Four of this Act for paying off a loan, or, if the sum is raised by stock under a local Act, by such method as is directed by that Act.

“(7) Any capital sum paid to any council for the purpose of any adjustment or in pursuance of any order or award of an arbitrator under this Act shall be treated as capital, and applied, with the sanction of the Local Government Board, either in the repayment of debt or for any other purpose for which capital money may be applied."

There is no material difference for practical purposes between this section and sect. 68 of the Act of 1894 (known as the Parish Councils Act).

5. The Commission referred to in paragraph 4 is generally known as Lord Derby's Commission. The first meeting was held on the 14th May 1890, and the report is dated the 15th Aug. 1892.

The principles upon which the Commissioners acted are categorically stated in their report, which is reprinted as an appendix to the proceedings of this Committee.

On page vi. of the report the Commissioners state that :"The adjustment of financial relations between counties and county boroughs, other than the distribution of the proceeds of the Local Taxation Licences and Probate Duty Grant, and of the proceeds of the residue of the Local Taxation (Customs and Excise) Duties, was a matter fraught with special difficulty.

"By sub-sect. 1 of sect. 32 of the Local Government Act such adjustment was to provide in case of any expenses which might in future be incurred by the county wholly or partly on behalf of the borough for the liability of such borough to contribute, and, save as provided by the Act, any existing liability to contribute or to incur expense was after the appointed day to cease, and an equitable provision for such cessation was to be made in the adjustment.

"By sub-sect. 3 of the same section it was directed that in such adjustment regard should be had (1) to the property, debts, and liabilities connected with the financial relations of the county and borough, (2) to the consideration that the county was not to be placed in a worse financial position by reason of the boroughs therein being constituted county boroughs, and (3) to the amount of benefit and value of the services which the borough received in return for existing contributions.

In the majority of cases the amounts contributed by the boroughs appear to us to exceed the amount of benefit and value of the services rendered to the borough by the county, since the boroughs contributed for several purposes in respect of which they had themselves provided their own separate establishments. On the other hand, had they remained in the counties, they would have continued to be liable to contribute towards the same purposes and in the same manner as before the passing of the Act. Consequently we found it difficult to reconcile the direction that the county was not to be placed in a worse financial position by reason of the boroughs therein being constituted county boroughs, and at the same time to have regard to the amount of benefit and value of the services which the boroughs received in return for existing contributions." The conclusions at which they arrived were set out in a memorandum which they communicated to the councils concerned in Aug. 1891. This memorandum is not printed in the report of the Commissioners, but the substance of it is embodied in the report. The principles laid down were briefly as follows:

Salaries of County Officers.-The average annual amount con tributed by the area of the county borough in the three years ended the 31st March 1889 was taken as the basis of the payment, and the liability was to be commuted for a capital sum representing fifteen years' purchase of this amount.

"County Bridges.-The liability of the borough to contribute and of the county council to incur expense was to be valued, the valua tion being made on the basis of (a) contributions by the arca of the county borough towards the, average annual expenditure of the county on county bridges in the ten years prior to the appointed day, and (b) the average annual amount expended by the county on county bridges in the area of the county borough during the same period. The balance of the one liability over and above the other was taken as the net liability, for the cessation of which equitable provision was to be made and payment of a capital sum of thirty years' purchase of the amount so arrived at was to be made by the county council or council of the county borough, as the case might be.

"Main Roads.-The same principle was to be applied as in the ca 2, of county bridges, except that the average annual expenditure and contribution were to be based on a period of three years before the appointed day. In the case of county boroughs which were not quarter sessions boroughs, the county boroughs were to be deemed to have been liable to contribute rateably towards one-fourth part

of the total main road expenditure of the entire county (excluding quarter sessions boroughs), and the county was to be deemed liable to contribute to the borough one-fourth part of the cost of maintaining the main roads within the borough.

Miscellaneous Expenses, including Parliamentary Registration.— The equitable provision was to be fifteen years' purchase of the average annual contribution of the area of the county borough during the three years before the appointed day, after deducting expenses on purposes in respect of which the county borough would continue to be liable to contribute.

"Continuing Contributions.-With regard to any sums which a county borough remained liable to contribute under sect. 32 of the Local Government Act in respect of expenses which would in future be incurred by a county wholly or partly on behalf of the borough, if any agreement was made to commute such contribution for a capital sum, an award was to be made in the terms of such agreement. But, in default of any such agreement, no such commutation would be made.

“County Property. Several boroughs having claimed a share in property which, by the operation of the Local Government Act, had become vested in the county council, the Commissioners declared that such claim existed only in respect of any share of beneficial interest or occupation of which the boroughs had been deprived by the operation of that Act, and that no borough had been deprived of any such share in the case of the following and similar buildings, viz., county hall, courts of justice and offices, judges' house or lodgings, and court-houses.

With regard to militia storehouses and any other county property of which the rents were applied on account of the county rate, they determined that such property should be either retained by the county at a valuation or realised within six months of the date of the award, and that the council of any county borough which had contributed to the cost of such property should receive a proportion of the ascertained value thereof, or of the proceeds of sale, calculated upon the respective rateable values of the county and county borough agreed for the purposes of the adjustment, or in default of such agreed rateable value in proportion to the poor rate valuations in force at Lady Day 1889."

6. The preceding paragraph exhibits the practice which was set up by the Commissioners under the Act on the formation of boroughs, and which for some time regulated the decisions upon questions of adjustment (which was taken to include compensation), and this practice was generally, but not invariably, followed down to 1904 by the local authorities themselves, and, in the event of disagreement, by arbitrators appointed under the Act.

It was at this point that serious difficulties first arose, and the decisions of the House of Lords in the Caterham and Hartlepool cases made necessary an entirely different practice from that which had been followed by the Commissioners.

7. The town of Caterham was made an urban district out of the rural district of Godstone, and the questions requiring adjustment were referred to an arbitrator. The rural district of Godstone claimed compensation from Caterham for the loss of £1200 per annum, alleged to be the average yearly excess of contribution over expenditure in the separated area. The point was raised that this was compensation and not adjustment, and a special case was stated for the opinion of the court. The court of first instance and the Court of Appeal decided that the rural district was entitled to have this claim adjusted by arbitration, but the House of Lords in 1904 reversed these judgments on the ground that the word "adjustment" did not cover compensation for loss of rateable area. It should be borne in mind that the word " compensation" does not appear in sect. 62 of the Act of 1888. The expression in sect. 62 is that agreements may be made for the purpose of adjusting any property, income, debts, liabilities, and expenses," and it was held that this must apply to existing property, income, debts, liabilities, and expenses, and especially that the word " income meant income from existing property, and did not include the power of raising money by rates. The judgments of the two lower courts were

therefore reversed.

This case was followed in 1907 by the case of the West Hartlepool Borough Council against the Durham County Council. This differs from the Caterham case in the fact that it was the occasion of the. making West Hartlepool into a county borough, and the consequent alterations that had to be made in the financial arrangements were not governed by sect. 62 of the Act of 1888, but by sect. 32. It is to be noted that sect. 32 also does not make use of the word compensation," but of the word "adjustment," but there is this difference, that under sect. 32 regard was to be had to the "consideration that the county is not to be placed in any worse financial position by reason of the boroughs therein being constituted county boroughs, and that a county borough is not to be placed in a worse financial position than it would have been in if it had remained part of the county."

The House of Lords, however, held that these words referred only to the distribution of the Exchequer contribution, and therefore that the section did not cover any right to compensation for loss of rateable area, and that the decision given in the Caterham case must apply equally in this instance.

8. It is obvious that, if the decisions of the House of Lords are to hold good for the future, the recommendations of the Commissioners which have hitherto guided the parties in these transactions must be thrown on one side in view of the distinction drawn

t

'In any such adjustment provision shall be made for the payment by the corporation to the (county) council, or by the (county) council to the corporation, as occasion shall require, of such compensation as shall be fair and reasonable for (a) any loss sustained by the county council in respect of the excess of contributions over expenditure in the added area prior to the commencement of this Act, or (b) for any loss sustained by the corporation in respect of the excess of expenditure over contributions from and in the added area prior to the commencement of this Act."

The consequence of this was that the proposals for the extension of these above-named boroughs were withdrawn by the promoters. In 1909 Manchester, finding it necessary to proceed without delay with the proposed extension, promoted a new Bill, and agreed with the county council upon a certain sum to be paid to the latter in satisfaction of all claims.

In 1910 a Bill was introduced by the Corporation of Eastbourne' to extend the borough and at the same time to form it into a county borough. In this case, however, an agreement was come to between the parties on all matters of adjustment and compensation.

9. It is clear, therefore, that, in default of agreement between the parties, there will be considerable difficulty in carrying out extensions of boroughs in the future, unless some principles are laid down for the guidance of an arbitrator which are to determine what is the proper settlement to be made between the parties under sects. 32 and 62 of the Act of 1888. This has been recognised in the case of two Bills (introduced in 1910 to confirm Provisional Orders for the extension of Birmingham and Bath and carried over by special resolution to the present session) in both of which the following section has been inserted :-

Whereas a Joint Committee of the House of Lords and House of Commons has been appointed to inquire into the application of the provisions contained in the Local Government Acts 1888 and 1894 and the Local Government (Scotland) Acts 1889 and 1894 relating to financial adjustments consequent on the alteration of the boundaries of a local government area or on an alteration in the constitution or status of the governing body of a local government area, and to report if they are of opinion that any amendments in such provisions are desirable.

Be it therefore enacted as follows:

(1) Notwithstanding the provisions of the Local Government Acti 1888, the Local Government Act 1894, and of the Order set forth in the schedule to this Act relating to financial adjustments, no adjustments to be made between the councils of the county and county boroughs or between any authorities affected by the said Order or this Act shall be made excepti by agreement until after the thirty-first day of March 'one thousand nine hundred and thirteen, or until the confirmation of a Provisional Order made in pursuance of this section, whichever shall be the earlier :

(2) If the said Joint Committee report that they are of opinion that amendments are desirable in the provisions contained in the Local Government Acts 1888 and 1894 relating to financial adjustments consequent on the alteration of the boundaries of a local government area, the Local Government Board shall make such Provisional Order as shall be necessary for the purpose of applying the recommendations of the Joint Committee, so far as they are applicable to any adjustments to be made between the councils of the county and county boroughs and other authorities referred to in sub-sect. (1) of this section. Provided that no Provisional Order made in pursuance of this section shall affect any adjustment that may have been made by agreement: "(3) The provisions of the Local Government Act 1888 relating to Provisional Orders shall, so far as they are applicable and with any necessary modifications, extend and apply to any Provisional Order made in pursuance of this section."

10. The Committee are of opinion that while it would not be just to give to either party compensation for loss of rateable area as such, yet each party before the arbitrator should be entitled. to produce evidence to prove that in carrying out the administration, of their areas and maintaining their roads and bridges they would, on the figures as they stand at the appointed day, have legitimately imposed upon them an increased burden, or a burden which would, in the judgment of the arbitrator, be thrown upon them at some future time in reference to some particular head of administration in consequence of the taking away of part of the area, and that compensation should be paid to the party having to bear such increased burden in each case in which it was proved to exist.

The Committee consider that the same principles should apply with regard to county investments and the beneficial user of county property.

It was alleged in evidence that certain counties did not act equitably in declaring certain roads to be main roads, or in refraining from making certain roads main roads which ought equitably to have been so treated.

There appears to be some ground for this allegation, and it was urged before the Committee that this matter should be taken into consideration before the arbitrator.

The Committee are of opinion that some central authority should have the duty of deciding what roads ought to be considered main roads. And as in their opinion this would require legislation, they think that in the interval this question of main roads should be taken into consideration and decided by the arbitrator, and compensation paid where a loss is shown to have occurred. They are further of opinion that, having in view the powers of such a central authority which might involve material alteration in existing conditions, it is desirable that compensation in respect of roads should be paid as an annuity and not as a lump sum.

It will be seen hereafter that the Committee have come to the conclusion that one-half of the cost of the main roads should be a priority payment, ranking after those already so classed. In some Counties, however, the balance of the Exchequer contribution is not sufficient to meet half the cost of the maintenance of main roads. The Committee consider that for the ascertainment of compensation (the deduction on account of the Exchequer contribution having been made), the difference between the annual amount of the rest of the maintenance of the main roads in the area added to the borough and the rateable share of the said area in the rest of the maintenance of the main roads in the county should be the annual liability for the cessation of which equitable provision should be made. Both these calculations should be made on a five years' average.

11. The ascertainment of the compensation presents features of difficulty. But the Committee consider that on the whole the fairer plan would be to fix a maximum (which they suggest should be fifteen years' purchase) beyond which the arbitrator should in no case go, and to allow him to adapt to the circumstances of the particular case a multiple of a year's purchase of the yearly loss that may be proved on each head of claim.

In this connection it is interesting to note that in Scotland, where, however, the same difficulties connected with the roads do not apply, it has been found possible to arrive at an agreement between the parties based on the principle of giving to the loser twelve and a half years' purchase of the amount which he can prove to be his loss, this figure being made use of in dealing with each item of administration. This system differs from that set up by the Commissioners under the Act of 1888, in which a different number of years' purchase was given to meet the different items of loss.

It is probable that the twelve and a half years' purchase system adopted in Scotland represents approximately a fair adjustment, it having been made use of in many cases.

12. The Committee now turn to the subject of Exchequer contribu

tions.

These are dealt with by sect. 23 of the Act of 1888, under which it is provided that

"(1) All sums from time to time received by a county council in respect of

(a) the duties on the local taxation licences, whether collected by the Commissioners of Inland Revenue or by the county council; and

(b) the probate duty grant,

shall be paid to the county fund and carried to a separate account, in this Act referred to as the Exchequer Contribution Account.

(2) All sums for the time being standing to the Exchequer Contribution Account shall be applied

(i.) in paying the costs incurred in respect thereof, or otherwise chargeable thereon; and

(ii.) in payment of the sums required by this Act to be paid by the county council in substitution for local grants; and (iii.) in payment of the grant required by this Act to be made by the county council in respect of costs of union officers; and fiv.) in repaying to the general county account of the county fund the costs on account of general county purposes for which the whole of the area of the county is liable to be assessed to county contributions;

and shall be so applied in the order above mentioned.

“(3) If any surplus remains after paying the above costs and sums, such proportion of the surplus as the total rateable value of the area of each quarter sessions borough exempt from contributing to any special county purpose bears to the rateable value of the whole county shall be paid to the council of that borough, and the remainder shall be applied as follows:

"(4) It shall be first applied towards repaying to the proper special accounts of the county fund the costs on account of which the area of the county, exclusive of such quarter sessions boroughs, is liable to be assessed to county contributions;

"(5) Provided that where any of the said quarter sessions boroughs to which a payment of a proportion of the surplus is made as aforesaid is liable to be assessed to county contributions for any of such last-mentioned costs, there shall be deducted from the amount payable to the council of that borough in respect of the said surplus such sum as would have been raised within the area of the borough if the amount of such costs had been raised by county contributions. "(6) If there remains any sum after repaying the said costs to the said accounts of the county fund, such residue shall be divided as follows, that is to say, such proportion thereof as the total rateable value of the area of each borough maintaining a separate police force under the County and Borough Police Acts, and not being a quarter sessions borough above mentioned, bears to the rateable value of the whole county, after deduction of the rateable value of every quarter sessions borough above mentioned, shall be paid to the council of the borough, and the rest shall be applied towards repaying to the

proper special accounts of the county fund the costs of the police and other costs on account of which the area of the county, exclusive of all the said boroughs, is liable to be assessed to county contributions. Where a town, not being a borough, maintains its own police and receives any payment from the county council in pursuance of this Act towards the pay and clothing of such police, this enactment shall apply to such town as if it were a borough, and as if the sanitary authority therein were the council of the borough.

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(7) If any balance remains after all the above payments are made, and is in excess of what the county council consider necessary to carry forward to the next account, such excess shall be divided among the district councils other than the councils of quarter sessions or other boroughs to whom portions of the surplus have been paid under the foregoing provisions of this section, and shall be so divided in proportion to the rateable value of the area of each district. "(8) Where any part of a county is situate within the Metropolitan Police district, this section shall apply as if that part were the area of a borough maintaining a separate police force, save that the sum which would be payable to such borough shall be paid to the district councils of the county districts wholly or partly situate in such part, and shall be divided among such district councils in proportion to the rateable value of the area of each district, or of so much thereof as is within the Metropolitan Police district.

(9) All sums paid in pursuance of this section shall be carried, if paid to the council of a borough, to the borough fund, and if paid to a district council other than the council of a borough, to the district fund, and shall be applied to purposes for which the whole of the borough or district is liable to be rated.

"(10) The rateable value for the purpose of this section shall be determined according to the standard or basis for county contribu tions for the time being."

As to sub-sections (1), (2), and (3), all sums for the time being standing to this account are to be applied in the first instance, after paying the costs of the council in respect of the account or otherwise chargeable thereon, in payment of the sums required by the Act to be paid in substitution for local grants. These payments will consist of the following items :-(a) Payments certified by the Local Government Board for the remuneration of teachers in Poor Law schools and public vaccinators; (b) school fees paid by boards of guardians for pauper children; (c) one-half of the salaries of medical officers of health and inspectors of nuisances; (d) remuneration of registrars; (e), (f), (g) payments for pauper lunatics; (h) compensations to the clerk of the peace or other officers of the quarter sessions; and (i) and (j) one-half of the pay and clothing of the police of the county or county boroughs, or of the police of any borough in the county maintaining a separate police force.

All these grants are known as priority payments.

When these priority payments have been met, the balance is to be applied in repaying to the general accounts of the county fund the cost on account of general county purposes for which the whole area of the county is liable to be assessed to county contributions, and if any surplus remains after this has been done it is to be applied in manner directed by the Act, so that each part of the county shall share equally in the relief afforded by it to the local taxation.

It is clear from this that the cost of main roads was not one of the heads which it was contemplated by the Act should be included in what are known as priority payments.

The Commissioners under the Act, however, took the view that half the cost of main roads should be the next charge upon the surplus of the Exchequer Contribution Account after satisfying the priority payments. This is made clear from the report of the Commissioners under the paragraph headed County Borough Extensions. "In the adjustment respecting the cost of maintaining the main roads in areas added to county boroughs after the 1st April 1889, we took into account the liability of the county for the whole cost of such roads as provided by sect. 11 of the Local Government Act, and, having distributed to each authority out of the proceeds of the local taxation licences and probate duty grant a sum equivalent to onehalf of the yearly cost of the maintenance of main roads in the county area and borough area respectively, we determined that the difference between one-half the average annual cost of maintenance of the main roads in the area added to the borough and the rateable share of the said area in one-half of the annual cost of the main roads of the county should be the annual liability for the cessation of which equitable provision was to be made.'

This practice seems to have been followed in the adjustments that have been made subsequently, but apparently rests on no legal basis, and it is obvious that if the rules laid down in sect. 23 of the Act are to be followed, the cost of the main roads in a county would be entitled to be defrayed out of the surplus of the Exchequer Contribution Account after the priority payments had been satisfied out of it, in common with all other costs of administration which were a general charge upon the county fund.

13. The Committee are of opinion that in future half the cost of the main roads should be a first charge upon the surplus of the Exchequer Contribution Account after the priority charges set out in sect. 23 of the Act of 1888 have been satisfied, and that this first charge should be calculated upon the average sum over a period of five years expended by the county council and the separated area taken together, to be determined by the arbitrator, their respective shares being credited to the county council and the borough council that date was made up to the authority by a grant out of the Exchequer contribution be insufficient to meet the total of this average expenditure, the amounts to be received by the county

council and the separated area should be reduced in proportion to their respective shares calculated as aforesaid.

14. There remains, however, to be decided the question how the surplus of the Exchequer contribution is to be distributed after the satisfaction of the priority payments and half the cost of the maintenance of main roads.

It was argued that the passage of the Agricultural Rates Act 1896, by making an alteration in the assessment of agricultural land, made it necessary that the distribution of this surplus should be dealt with on the basis of assessable instead of on that of rateable value. On the other hand, it was contended that, so far as this distribution of the surplus was concerned, the Agricultural Rates Act did not make any difference at the date that the Act was passed, because the loss that the county and every other local authority sustained at that date was made up to the authority by a grant out of the Exchequer, and therefore that the basis of distribution should be on rateable value.

The Committee, after having given due consideration to these arguments, have come to the conclusion that the distribution of the surplus should be on the rateable and not on the assessable value.

With reference to the paragraphs 1 (a) appearing in each of the appendices "d" and "e," the Committee do not think that any difficulty is likely to arise in ascertaining the sums to be credited in respect of any priority payment, and therefore the point whether those sums are to be distributed according to rateable or assessable value need not be considered; but, should any such difficulty arise, such sums should, in their opinion, be distributed according to rateable value.

As to the Customs and Excise duties, which can be used solely for the purposes of higher education, the Committee understand that up to the present time these have been distributed among local authorities by the Local Government Board upon the basis of rateable value. The Committee see no reason to alter this practice.

15. With regard to questions raised by urban district councils and rural district councils, the Committee; are of opinion that the principles for the payment and ascertainment of compensation laid down in paragraphs 10 and 11 of their report should apply.

As to the district roads, something more must be said, in view of the fact that there is no grant out of Exchequer contributions towards the cost of these roads, but certain voluntary payments are made by the county councils.

The Committee consider that the difference between the average net annual cost of maintenance of the district roads, calculated on a five years' basis, after excluding any contribution by the county council in the area taken out of the rural district, and the rateable share of the said area in the net annual cost of the district roads, after excluding any contribution by the county council in the rural district, should be the annual liability. for the cessation of which equitable provision was to be made.

With regard to district debts, the principles to be followed should be to divide the debt according to the proportion of the rateable value of that part which was left of the old area after the severance, and that part which was taken from it and absorbed into some other unit, each part taking over its own share.

16. The case of the Poor Law unions was also brought before the notice of the Committee.

The practice in this connection is set out in the evidence of Mr. Willis, who states that the Poor Law Acts formerly contained provisions under which any necessary adjustment was made by the Local Government Board. But these were repealed, and sect. 62 of the Local Government Act 1888 made applicable in such cases by an Act passed in 1903. In the case of the alteration by local Act of areas other than county boroughs, it is the usual practice to make sect. 62 of the Act of 1888 or sect. 68 of the Act of 1894 apply for the purpose of any adjustment that may be necessary.

The Committee are of opinion that the conclusions at which they have arrived in paragraphs 10 and 11 of this report should apply equally in any alteration that takes place in the boundaries of Poor Law unions.

17. The formation of London into a county was carried out under the Act of 1888, and the adjustment provisions are contained in sect. 40, sub-sect. 7. Under this, and with the sanction of a special commission, certain agreements were arrived at between the newly formed county of London and the counties of Kent, Surrey, and Middlesex, and there appears to be no statutory provision under which in future the extension of the county of London could take place.

It appears that the Local Government Board has power to make rectifications of the boundaries of the metropolitan boroughs, and also power to rectify the boundaries of the county of London, but it would be something quite small. It follows that if a metropolitan borough on the border of the county of London wished to carry out an extension scheme, new legislation would be absolutely necessary, for such an extension would involve the extension of the county of London.

The Committee think that it is impossible to lay down any general principles which could apply to this situation, and that the matter must be left for Parliament to deal with when the occasion arises.

In the London adjustments that have been carried out compensation for loss of rateable area was not allowed, but each item of administration was apparently considered on its merits.

The schemes for adjustment in South Hornsey, Clerkenwell, and Penge, which were made under the authority of a special com

mission, were all confirmed by Act of Parliament subsequent to the decision of the House of Lords in the Caterham case.

18. The attention of the Committee has been called to the provisions for arbitration in case of disagreement. It is to be noticed that under sect. 62 of the Local Government Act 1888 if it is necessary to appoint an arbitrator and the parties cannot agree, the appointment is made by the Local Government Board, whilst under sect. 68 of the Local Government Act 1894 the Arbitration Act 1889 applies.

Objections were raised to the appointment of the arbitrator by the Local Government Board, but the Committee are not prepared to accept them. They are hopeful that, if effect be given to the recommendations of this report, agreements will be facilitated and the expense of arbitration in many cases avoided.

19. The case of Scotland presents fewer difficulties, for here the Exchequer contributions do not enter into the question. All moneys paid from the Local Taxation Account to the various counties and burghs are paid upon fixed principles, and when extensions occur the matter automatically adjusts itself. There are no priority payments. And in view of the fact that all roads in Scotland are highways and are maintained in the counties out of the county rate and in the burghs by the city or town council, the complications between main roads and district roads do not arise; at the same time, when a burgh in Scotland is extended, the question of roads often involves a large sum of money.

In the case of the two most important burghs, the cities of Edinburgh and Glasgow, contributions under statute are made towards the upkeep of the roads in the neighbourhood, and these cannot be interfered with without repealing former legislation. The Committee think that in any future burgh extensions in Scotland the question of compensation for loss on the maintenance of roads is one that ought to be taken into consideration by the arbitrator, and suggest that the principles laid down in paragraph 15, to the extent that they apply to the methods of calculation, are proper ones to apply to this question so far as it affects Scottish burghs.

In all other respects the principles laid down in paragraphs 10 and 11 of this report should apply equally in Scotland as in England, in view of the fact that sect. 50 of the Local Government (Scotland) Act 1889 and sect. 62 of the Local Government Act 1888 are practically analogous.

20. The Committee recommend that the Local Government Acts 1868 and 1894 and the Local Government (Scotland) Acts 1889 and 1894 be amended in accordance with these conclusions. They anticipate that the alterations in the law which they propose will effectively remove many of the difficulties which at present attend the alteration of the boundaries of a local government area.

The Committee have directed the minutes of their proceedings, together with appendices, to be laid before both Houses of ParliaAug. 8, 1911.

ment.

FORENSIC ELOQUENCE.

By Hon. A. W. WILKINSON, of the Texas Bar.
(From the Canadian Law Times.)

THE establishment of courts is a step in human progress which can be taken only when society has reached a development of considerable complexity. We understand by a court, if it is permitted one to make his own definition, that agency of civil government to which is committed the power and duty of applying to each particular controversy as it arises the rights secured and rules of conduct prescribed by the general law of the land, bringing the parties before it by due process, allowing them opportunity to be heard, determining the matters at issue by a formal judgment, and enforcing its decrees. This presupposes, of course, a state of society in which individual liberty has so far progressed that such questions are determined by fixed law and not by the mere specific will or caprice of the ruler. Law, then, becomes a science, and its administration is necessarily committed to the hands of experts, and this landmark in social evolution can hardly be said to have been established in the world till it first heard the mighty name of Rome."

With Rome came the science of law, and with that the lawyer; for the right to a hearing before a tribunal determining the claims of the citizen in accordance with fixed principles can only be effectively safeguarded by the presence of an advocate trained in those principles and skilled in sifting and ascertaining the facts to which they are sought to be applied. The poor, on the authority of the Man of Nazareth, we have with us always; and the lawyer, being generally poor, may be considered an heir to this promise. At all events, we are likely to have him so long as we have civil society, for he is its most efficient guardian. The stinging. reproaches of the Saviour upon lawyers cannot be accepted as an indication that the humble philanthropists now known by that name will or should be abolished much before the millennium. It is well known that the term, as used in the Gospels, referred to a class we would now call theologians. The preachers have translated the Scriptures and contrived to transfer the obloquy to another and an innocent profession.

We are forced to realise how great was the social advance which the lawyer's appearance in history marks when we compare the eloquence of the Athenian with that of the Roman orators. The one, though uttered in what was termed a trial and before what is called a court, was distinctly a popular or political appeal,