A MONGST the clauses of the coming Home Rule Bill, which will be most closely and jealously scanned in Ireland, will certainly be those dealing with the financial relations which, in the event of the Bill becoming law, are to subsist thenceforth between that country and the rest of the United Kingdom. It is of absolutely vital importance to Ireland that the financial part of the new arrangements should be equitable and, therefore, satisfactory. A financial breakdown might possibly involve a breakdown of the whole Home Rule settlement. Besides, Ireland has before it, in the revival of its ruined industries and commerce, and in the material improvements of which the country stands in need, and which only a national authority can ever execute, an unusually difficult task which might tax the pecuniary resources of a nation possessing many times the wealth of the Irish. It must somehow or other, and some time or another, accomplish this task, or be for ever discredited in its own estimation, as well as in that of other nations. To be able to accomplish it, the elementary conditions clearly are that it shall have capable financiers, that it shall practise economy at home, and especially that it shall not have to bear, in respect of its obligations to the Empire, an unjust and oppressive burden. To show what that burden ought to be is the object of the following pages. The necessity, from the Irish point of view, of discussing this subject is clear from the fact that the financial proposals of the Home Rule Bill of 1886 were such as, if they had been carried out, would undoubtedly have worked financial ruin to Ireland in a very brief space of time. The matter was not then discussed in or out of the House of Commons, because it was overshadowed by the principle on which the whole measure was based. But if the Bill had reached the Committee stage, no doubt can be entertained that the financial clauses would, every one of them, have been contested by the Irish representatives as unjust in themselves, and calculated sooner or later to bring about the national bankruptcy of Ireland, and thus to imperil the very existence of the new Irish Constitution. The proposals referred to may be briefly summarised. Mr. Gladstone fixed the proportion of Ireland's contribution to the Imperial expenditure at one-fifteenth, and, working on this proportion as a basis, he arrived at the following Irish budget: 1. Contribution to Imperial Exchequer on basis of th of Imperial (1) Debt Charge Exchequer, viz. : (2) Army and Navy (3) Civil Charges £1,446,000 £3,242,000 360,000 1,000,000 2,510,000 £170,000 60,000 604,000 £834,000 404,000 £8,350,000 The first remark which this balance-sheet suggests is that the surplus left in the hands of the first Irish Chancellor of the Exchequer was dangerously small, and that, unless some reduction could have been made in the charge for the police, and in respect of the other local civil charges, it would have been impossible for the Irish Government to sanction any considerable expenditure on any of the numerous objects which would have appealed to it for State aid. Whether any such reduction could have been immediately made is very doubtful. It is certain that, if any could have been made, it would have been infinitesimal. The result would have been wide-spread popular disappointment and discontent; and, of course, if the actual receipts did not at least equal the estimates, or if they fell below them, that disappointment and that discontent would have been indefinitely in tensified. Finally, such a balance to its credit as £404,000, in the beginning of its career, would never have enabled an Irish Government to borrow, which, of course, it might, and probably would, be necessary for it to do, as in the case of all other Governments. On the very face of it, therefore, Mr. Gladstone's Irish Budget of 1886 would have been a most perilous one for Ireland to accept, even if there were no other objection to it. But this is the least of the objections to the financial proposals in the Home Rule Bill of 1886. The chief objection is that the proposed contribution of Ireland to the Imperial expenditure was entirely too large. Granting for a moment-what the present writer, at least for his part, does not admit that Ireland is, at present, properly liable to pay a proportionately equal share of certain charges which are described as Imperial, let us see whether the proportion of one-fifteenth is fair. Mr. Gladstone took three tests of relative capacity to pay -the income tax, the property on which the death duties were assessed, and the valuation of property in Great Britain and Ireland respectively. Even according to two of those tests Mr. Gladstone over-estimated Ireland's capacity. The income-tax, as even he himself admitted, would give a proportion, not of one-fifteenth, but of one-twentieth, or, at the very highest, of one-eighteenth. The valuation of property gave a proportion of one-thirteenth, but, contrary to what. Mr. Gladstone alleged, the valuation of Ireland is higher than that of England or Scotland. In Ireland the valuation of land was made more than thirty years ago, and it cannot be changed, though the value of Irish land has notoriously fallen. It is otherwise in England and Scotland, where the assessment of land diminished by nearly twelve millions between 1880 and 1890 alone, and where, of course, it had been diminishing also for many years before 1880. Under-assessment, in fact, is the rule in England, especially as regards country mansions and building sites, while in Ireland amongst the buildings valued are many houses and offices which have absolutely no letting value at all, and some of which, if it be not considered a "bull" to say so, actually no longer exist. The valuation of landed property in Ireland, if made on the same principle as in Great Britain, would probably be found to be, not one-thirteenth, but one-twenty-sixth, that of the rest of the United Kingdom. The proportion of one-fourteenth for the property subject to the death duties is nearer to the mark, but even on that point Mr. Gladstone's figures cannot stand in face of the most recent returns. According to his own three tests, we repeat, Mr. Gladstone grievously overestimated Ireland's relative capacity to bear taxation. But many other tests exist, and let us now see what they teach. Before we come to the most recent figures, it will be interesting and useful to recall certain official evidence given in this matter as to the state of things thirty years ago. In 1864, General Dunne, member for the Queen's County, presided over a committee of investigation into the financial relations of England and Ireland, and, amongst the evidence which he obtained in that capacity, was a statement by Mr. Chisholm, Chief Clerk of the Exchequer, of the comparative wealth of Ireland and Great Britain as shown by no fewer than twelve tests, which include two of those selected by Mr. Gladstone. Mr. Chisholm stated that, on an average of three years ending in 1863, the exports and imports of Great Britain were to those of Ireland as 52 to 1; the tonnage of foreign trade as 28 to 1; the total tonnage to and from all parts as 4 to 1; the total coasting trade to and from all parts of the same country as 68 to 1; assessments to income tax as 13 to 1; deposits in banks as 19 to 1; total deposits in banks for 10 years 14 to 1; interest on Government stocks 19 to 1; payments in respect. of probate and legacy duty as 16 to 1. The mean of those twelve proportions is 25 to 1; and a priori one should say that it is not at all likely that the proportion for Ireland is more favourable now, or was more favourable in 1886. As a matter of fact, when we come to the latest figures available, we find that the proportion has grown more unfavourable for Ireland in the interval since 1863. Taking nine of the most important and fairest tests to hand, we find that the income tax assessments for Great Britain, even on the unfair basis already referred to, according to the Inland Revenue Report dated March 1891, are to those of Ireland as about 20 to 1; the income tax receipts as 25 to 1; the assessments to the death duties as 17 to 1; the amounts in Government and India stock, according to the Statistical Abstract for 1890, as 26 to 1; the amounts in the stocks of all registered companies as 44 to 1; the amounts for which money and postal orders were issued in 1891 as 20 to 1; the gross railway receipts for 1891 as 24 to 1; the deposits in Post Office and Trustees' Savings Banks as 18 to 1; the tonnage entered and cleared in 1891 at the three ports of London, Liverpool, and Glasgow to that entered and cleared in the same year at the three ports of Dublin, Belfast, and Cork as 125 to 1. Roughly speaking, the mean of those proportions is 35 to 1. As to the last test selected, lest any doubt may arise as to the representative character of the ports selected, the reader need only add up the figures given in the Statistical Abstract for the thirty-seven principal ports of the United Kingdom, and he will find that the result will not be substantially different. That this result, broadly speaking, does not err in the direction of undue depreciation of the relative wealth of Ireland is conclusively shown by the fact that so high an authority as Mr. Giffen, of the Board of Trade, writing in the Nineteenth Century for March 1891, estimated the whole taxable income of Ireland at £15,000,000, or one-fifty-third that of Great Britain, which is put down at £800,000,000. To avoid, however, any possible imputation of exaggeration, let us say that the wealth of Great Britain is to that of Ireland as 30 to 1, and we thus come at once to see that Mr. Gladstone in 1886 over-estimated the relative wealth of Ireland, and, therefore, its relative taxable capacity, by at least 100 per cent. The inevitable inference from all this is plain. Instead of fixing the contribution of Ireland to the expenditure of the Empire at £3,242,000, Mr. Gladstone ought to have fixed it at about half that sum. But even the sum that would thus be left as properly chargeable to Ireland on the score of her obligations to the Empire is liable to deduction on other grounds not yet mentioned. The item of £110,000 for civil charges includes payments in respect of the maintenance of royal palaces, all of which are in England or Scotland, public parks in London, and such purely English institutions as the British Museum, the London National Gallery, and the South Kensington Museum, from which Ireland at present derives very little advantage, and from which probably she would derive no advantage at all under Home Rule. It would be a monstrous injustice to ask Ireland to pay anything at all towards this class of expenditure. The next charge upon Ireland in Mr. Gladstone's Irish Budget of 1886 is a local one of £360,000 in respect of a Sinking Fund. The principle of a Sinking Fund is, no doubt, a sound one, and it is just that Ireland should provide for the gradual extinction by means of a Sinking Fund of its own proper share of the National Debt. But what is its proper share? Mr. Gladstone assumed it to be onefifteenth, but on what principle he arrived at that proportion it is difficult to see. It looks as if he thought that, because in his opinion Ireland's wealth was one-fifteenth that of Great Britain, we ought to assume responsibility for a corresponding portion of the debt of the two countries. But manifestly such an arrangement might be grossly unfair. Ireland's wealth might be only one-fifteenth that of Great Britain, and yet her credit might have been pledged during the last ninety-two years, out of all proportion to her wealth, despite her wishes and against her interests. That this is what has actually happened will be shown later; but, meanwhile, it may be affirmed, as on the very face of it a fair proposal, that Ireland's contributions, both to the interest on the National Debt and to the creation of a Sinking Fund, ought to be determined either by its relative taxable capacity, or by the results of a strict inquiry into the financial accounts of the two countries since the Union. Whether determined by the one method or the other, they would, it is submitted, be, at the highest, one-half the amount estimated by Mr. Gladstone. The next two local charges are £1,000,000 for the Constabulary |