But the significance of these figures cannot be discerned without an examination of their counterparts on the British side of the account. In the whole period Great Britain"s "true" revenue had risen from 51,445,764 to 89,286,978; her local expenditure from 4,439,333 to 30,618,586, and her net contribution to Imperial services from 47,006,431 to 58,668,392. Her population had increased from 13,765,000 in 1820 to 33,469,000 (estimated) in 1893, but her "true"
revenue had _fallen_ per head of the population from 3 13s. to 2 13s.
4d. (approximately), although her local expenditure had risen from 4s.
7d. to 1 2s. (approximately). In other words, a great increase of wealth had enabled the British taxpayer to pay far more while feeling the burden far less. The converse was true of Ireland.
The current state of the account in 1893-94 was as follows:
Great Britain Ireland 1893-94 (Population, (Population, Totals.
33,469,000). 4,638,000).
"True" Revenue 89,286,978 7,568,649 96,855,627 Local Expenditure 30,618,586 5,602,555 36,221,141 Net contribution to Imperial Services 58,668,392 1,966,094 60,634,486
Great Britain, though raising in "true" revenue between eleven and twelve times as much as Ireland, was costing only between five and six times as much to administer as Ireland, and was therefore contributing to Imperial services twenty-eight times as much as Ireland.
Now the Commissioners had stated that the taxable capacity of Ireland was not one-eleventh, but, at the utmost, one-twentieth --in other words, that she ought to contribute not more than one-twentieth of the United Kingdom revenue. On that basis she should as we have seen, have been showing a revenue in 1893-94 not of 7,568,649, but of 4,842,781.
But, if her local expenditure had also been proportionate to her true taxable capacity of one-twentieth, instead of standing at 5,602,555, it would have stood at 1,811,057, or two-thirds less, while if her net contribution to Imperial services had likewise been a twentieth, instead of paying 1,966,094, she would have had to pay 3,031,724, or a million more.
The conclusion, therefore, might be extracted from the figures that, although by hypothesis overtaxed, Ireland was drawing a balance of profit, because, by having more spent on her--or, to put it in another way, by costing more to govern, she paid a million less to the common purse than if she had been taxed according to her capacity.
This was precisely the conclusion drawn by one member of the Commission, Sir David Barbour, and implicitly acquiesced in by one other member, Sir Thomas Sutherland. All the other Commissioners agreed that there was something seriously amiss, and declined to regard the disproportionately high expenditure on Ireland as compensation for the over-high taxation.
The O"Conor Don, as successor in the chairmanship to Mr. Childers, and four others contented themselves with setting forth the facts, but made no recommendations, on the ground that the Commission had not been asked to make any. Mr. Childers, who died before the completion of the inquiry, left a Draft Report recommending that a special grant, amounting to two millions a year, should for the future be allocated to Ireland. The other six members, dividing into two groups of three, under Lord Farrer and Mr. s.e.xton respectively, and stating their views in two different Reports, all agreed that a form of Home Rule giving financial independence to Ireland was the only solution of the difficulty.
The questions at issue were not at all obscure. Any apparent obscurity was caused by the terms of reference to the Commission, which a.s.sumed the permanence of the Union, while it was absolutely impossible for the Commission, divided though its members were in politics, to start work at all without, as they said, considering Great Britain and Ireland as "separate ent.i.ties." The reader must be on his guard against exaggerating the "over-taxation of Ireland" in its purely cash aspect.
The really important points were: (1) The suitability of the Irish taxes and the responsibility for levying them; (2) the amount and suitability of the expenditure in Ireland and the responsibility for its distribution. In order to see conflicting principles stated in their clearest form the reader should compare the terse and vigorous reports of Sir David Barbour on the one hand, and of Lord Farrer, Lord Welby, and Mr. Currie on the other.
It was Sir David Barbour"s great merit that he was not afraid of his own conclusions. He frankly stated, like all the other Commissioners, that Ireland"s taxation, considered by itself, without regard to Irish expenditure, was unsuitable and unjust. He recognized that a system of taxation which was suitable for a rich, industrial, and expanding country like Great Britain was unsuitable for a poor, agricultural, and economically stagnant country like Ireland. He had before him the figures showing that two-thirds of the Irish population was rural, and that between three and four-fifths of the English population was urban.[107] He laid special stress on the fact that five-sevenths of Irish revenue, as compared with less than half the British revenue, was derived from taxes on commodities of general consumption, pressing heavily on the poor, and set forth the figures showing that the product of these taxes represented a charge of 1 2s. 0.95d. per head of the population in Ireland, and 1 1s. 0.05d. in Great Britain, although the wealth per head of Great Britain, as he admitted, "was much greater than the wealth of Ireland per head."[108] His conclusion was that this state of affairs, though regrettable, could not be helped, because, under the Union, whose permanence he took for granted, a change of general taxation to suit Ireland was simply impracticable. He did, it is true, point out incidentally that the same hardship might be said to affect poor localities in Great Britain and poor individuals in Great Britain, but he recoiled from the absurd fallacy involved in saying that on that account Ireland was not unjustly taxed. If he had gone to that length he could never have signed the unanimous Report.
I only mention this latter point because some outside critics have been bold enough to a.s.sert the fallacy in its completeness, proving, as they easily can, that the purchase of a pound of tea or a pint of beer is as great an expense to a man with 10s. a week in Whitechapel as to a man with 10s. a week in Connemara. Such reasoning nullifies the whole science of taxation. It would be as sensible to say that our whole fiscal system might wisely be transplanted in its entirety to any foreign country or to any self-governing Colony absolutely irrespective of their social and economic conditions and of their habits. Yet Ireland in these respects has always differed from Great Britain at least as much as any self-governing Colony and many European countries. The tea-tax produces scarcely anything in France; it produces an enormous amount relatively in Ireland, and is a greater burden there than in Great Britain. The wine-tax is not felt by Ireland; it is felt more by England; it would cause a revolution in France. Beer is taxed lightly in the United Kingdom, but the Irishman drinks only half as much beer as the Englishman. Meat is untaxed, but the Irish poor eat no meat. Spirits and tobacco are highly taxed, and they are consumed more largely in Ireland than in England. And so on. The whole Commission recognized that the circ.u.mstances of the two countries were different, and stated "that ident.i.ty of rates of taxation does not necessarily involve equality of burden."
Nor could Sir David Barbour have dissociated himself from these conclusions without destroying the rest of his argument. He pointed out with truth that merely to reduce Irish taxation to its correct level, and to leave Irish expenditure where it was, would be to wipe out Ireland"s contribution to Imperial purposes and leave her with a subsidy from Great Britain of three-quarters of a million. On the other hand, he held, as I have already indicated, that unduly heavy taxation in Ireland was already compensated for by an excess of local expenditure in Ireland as compared with Great Britain. But how, on its merits, and apart from the question of taxation, could such an excess be justified? The Act of Union had provided for indiscriminate expenditure in the event of a fiscal union. Most of the other Commissioners, indeed, had objected to the idea of distinguishing between "Imperial" expenditure and "local"
expenditure, and striking a balance called an "Imperial contribution,"
without, at the same time, distinguishing politically between Ireland and Great Britain. In other words, they took up the not very logical position that Ireland must be considered as a separate ent.i.ty for purposes of finance owing to the phrase about "abatements and exemptions," but not for purposes of expenditure. Whether this was a correct interpretation of the Act of Union has always been a matter of dispute, but the practical problem is little affected thereby. Sir David Barbour thought it an incorrect interpretation, and reached the more logical position that Ireland, both for revenue and expenditure, could be regarded as a separate ent.i.ty. This view enabled him to put forward an argument which, while ostensibly palliating the over-taxation of Ireland, in reality condemned the whole of the political system established by the Union. We can, he said, in effect, rightly distinguish between Imperial and local expenditure, and it is permissible to spend more on Ireland than on Great Britain. By so spending more we not only cancel our debt to Ireland, but make her a present of a million which would otherwise go to swell her contribution to Imperial purposes. Now, to get at the pith of this argument, the reader must bear in mind what Sir David Barbour thought it needless to remark upon, that Ireland had, and has, a separate quasi-colonial system of administration of her own, but outside her own control, a system of which he approved. In other words, besides having to be considered in finance as a "separate ent.i.ty," she was to a large extent in actual fact, politically, a "separate ent.i.ty," though not a self-governing ent.i.ty, to which through the channel of the Irish Government Departments a special large quota for local expenditure could be easily allocated.
As an economist, therefore, and as an upholder of the strangely paradoxical system set up by the so-called "Union," Sir David Barbour was absolutely consistent.
So were Lord Farrer, Lord Welby, and Mr. Currie in coming to diametrically opposite conclusions. The crux of the discussion, stripped of academical reasoning, was simple. Everything turned, obviously, on the nature, amount, and origin of Irish expenditure. Sir David Barbour had pa.s.sed lightly over these vital points, recommending only that any future _saving_ of expenditure in Ireland ought to be used for Irish purposes--a further admission of Ireland"s separate political existence--and shutting his eyes to future _increases_ of expenditure.
Lord Farrer and his colleagues, while agreeing that it was impossible to alter the taxation of Ireland so long as the Union lasted, agreed that additional local expenditure in Ireland could not be regarded as a set-off to undue taxation, not only because such a doctrine was inherently fallacious on economic grounds, and would hardly be listened to in the case of any other country than Ireland, but because Irish expenditure was subjected to no proper means of control. Both Irish revenue and Irish services, the former being only theoretically, the latter actually, distinct and separate, were outside the control of Irishmen, who had therefore no motive for economy. Nor was there any proper measure of determining what expenditure was good for Ireland and what was bad, though they held that there was reason to believe that much of Irish administration was both bad and costly. With regard to the extensive system of Imperial loans, whose charge swelled the Irish expenditure, they quoted the unchallenged evidence of Mr. Murrough O"Brien[109] to the effect that the system of Imperial loans for temporary emergencies and charity loans--"made to keep the people quiet or to keep them alive"--tends to increase the poverty of Ireland, "does not prevent the recurrence of famine, distress, and discontent," and that "a great deal of the money nominally meant to be spent on productive works has been misspent and wasted." They also dwelt, with emphasis, on official figures showing the extravagance of Civil Government in Ireland, the cost having risen from 1s. 10d. per head of the population in 1820 to 19s. 7d. per head in 1893, whereas the cost of Civil Government in Great Britain had only risen from 1s. 7d. to 11s.
5d. The charge for legal salaries and five princ.i.p.al Departments in Ireland was double the right figure according to population, and represented an excess cost of nearly 200,000. In wealthy and progressive Belgium, Civil Government cost 10s. per head, or little more than half as much per head as in Ireland.[110] The absurdity of representing such excess charges and the wasteful expenditure of a blundering philanthropy, as a recompense for over-taxation, was manifest.
Meanwhile, the rise in the cost of Irish Government, coupled with a stagnant revenue, had decreased the annual contribution of Ireland to Imperial services, which had fallen from five and a half millions in 1860 to two millions in 1894; unless, indeed, half the cost of Irish police, virtually a branch of the Imperial Army, and costing double the amount of Scottish and English police, were to be reckoned, not as an Irish expense, on the principle adopted by the Treasury, but as a part of Imperial expenditure. In any case both partners suffered from excessive and unwise expenditure in Ireland.
The gist of their conclusions was as follows:[111]
1. It is impossible, under the Union, to vary taxation for the benefit of Ireland.
2. Additional benevolent expenditure in Ireland is not a remedy for over-taxation.[112]
"We entertain a profound distrust of benevolences, doles, grants-in-aid, by whatever name they are called, ... or by whatever machinery it is proposed to distribute them, convinced, as we are, that in some form or other political influence or personal interest will creep in so as to defeat, in part at any rate, the attainment of the objects for which the expenditure is made."
3. "We believe that the expenditure of public funds cannot be wisely and economically controlled unless _those who have the disposal_ of public money are made _responsible_ for raising it as well as spending it."
Grants of money "tend to weaken the spirit of independence and self-reliance," the absence of which qualities "has been the main cause of the backward condition" of Ireland.
4. "One sure method of redressing the inequality which has been shown to exist between Great Britain and Ireland will be to put upon the Irish people the duty of levying their own taxes and of providing for their own expenditure."
5. "If it is objected that the course we suggest may lead to the imposition of new Customs duties in Ireland, we might reply that in this case, as in that of the Colonies, _freedom is a greater good than free trade._ We doubt, however, whether Irishmen, if entrusted with their own finance, would attempt to raise fiscal barriers between the two countries; for we are satisfied that Ireland, and not Great Britain, would be the loser by such a policy. The market of Great Britain is of infinitely greater importance to Ireland than that of Ireland to Great Britain." The only point on which the three Commissioners differed concerned Ireland"s contribution to Imperial services. Lord Farrer and Mr. Currie, taking Home Rule as the foundation of their argument, and prophesying, quite correctly, that under the Union, in a few years, Ireland"s contribution would disappear altogether, recommended that no such contribution should be exacted by law until Ireland"s taxable capacity approximately reached that of Great Britain. Lord Welby, regarding Home Rule as an essential but a distant ideal, was for an immediate reorganization of Anglo-Irish finances which should provide for a large reduction of Irish Civil expenditure, the saving to be devoted, on Sir David Barbour"s principle, to Irish purposes, and for a fixed contribution from Ireland to the Army, Navy, National Debt, etc.
How Lord Welby, consistently with his previous argument, could count upon any reduction of expenditure in Ireland under the existing political system it is difficult to see. At any rate, subsequent events proved both him and Sir David Barbour signally wrong on this important point.[113]
In every other point the wisdom of the three Commissioners has been abundantly proved by lapse of time. Do not the conclusions set forth above bear upon them the stamp of common sense? If it were not for the inveterate prejudice against Home Rule on other than financial grounds, no one would dream of disputing them; for they are based on principles universally accepted in every part of the British Empire but Ireland, and in most parts of the civilized world. They const.i.tute, in fact, financially, one of the strongest arguments possible for political Home Rule.
There, at any rate, lies a clear issue. Seventeen years have not altered the essential principles involved. On the contrary, it will be seen that every year of the seventeen has strengthened the argument of Lord Farrer and his colleagues, and weakened the argument of Sir David Barbour. But, before proceeding to this final demonstration, let me in general terms describe what befell the Royal Commission"s Report, which was published in 1896. For a moment all Ireland, irrespective of cla.s.s or creed, was alight with patriotic excitement. Few listened to Sir David Barbour"s view, namely, that so long as Irish expenditure came near Irish revenue there could be no Irish grievance. Home Rulers and Unionists met on friendly platforms to denounce the over-taxation of Ireland and to display figures showing the hundreds of millions of profit made by Great Britain out of an unconscionable fiscal bargain. This criticism missed the real point and the unanimity was short-lived. No change could be made in the system without Home Rule, and the dissension about Home Rule was strong enough to prevent Irishmen from uniting against a fiscal system which was not only unjust but demoralizing to Ireland. A Unionist Government was in power for nine more years after 1896, and a Liberal Government, pledged temporarily not to give Home Rule, for four further years. The natural result was that, in default of Home Rule, all parties in Ireland embraced Sir David Barbour"s insidiously attractive reservation, and have ever since fallen into the habit of regarding additional expenditure on Ireland, not only on its merits, but as a set-off to excessive taxation and as something having no relation whatever to the taxable resources of the country. n.o.body took seriously Sir David Barbour"s counsel of perfection about the reduction of the cost of Irish Civil Government and the allocation of the saving to Ireland, because such a process was, humanly speaking, impossible.
Expenditure is never reduced except by those who raise the money for it.
On the other hand, in the face of the findings of the Royal Commission, and in the face of Ireland"s economic condition, no Government which refused Home Rule could have refused large additional Irish expenditure.
Much of it, indeed, was merely an automatic reflection of the immense growth of national expenditure in the wealthy and expanding partner-country over the water, and took the form of "equivalent grants," whether for the corresponding British head of expense or for something totally different. No doubt some of the money was well spent, but all of it came in a wrong form, through wrong channels, and was regarded in Ireland in a false light. Lastly came Old Age Pensions applied on the British scale to a far poorer population.
Every word of Lord Welby"s and Lord Farrer"s condemnation was justified by events; every prophecy they made has been fulfilled. And the worst of it is that the delay has damaged the prospects of Home Rule. The habit of dissociating income from revenue becomes inveterate. The habit of nursing an old grievance and of expecting "rest.i.tution" for funds unwarrantably levied in the past is hard to shake off. Rest.i.tution has gone too far already. Perpetuated, it would ruin Ireland. Home Rulers worth their salt must leave this cry to those Unionists who descend to use it; but it is surely amazing that any Irishman, least of all those who claim to represent the wealth and intelligence of the country, should tolerate a political system which inexorably involves a fiscal system so humiliating to Ireland. Until three years ago it could easily have been put an end to without affecting the independent solvency of Ireland, even on the basis of an enormously swollen civil expenditure, and with the inclusion of services strictly Imperial in origin and character. Now it is a different matter, and we are faced with the opposition of British statesmen who, by sustaining the Union, drove Ireland to the verge of insolvency, and now use insolvency as an argument against Home Rule.
One respects the clean and honest side of Unionism, but there can be nothing but reprobation for the meanness of this latter-day argument.
For generations Ireland herself has asked to be free both from coercion and bribes, sanely conscious in her soul that both are equally demoralizing. The aim--though in the past not generally the conscious aim--of Unionism was to sap the moral fibre of Ireland now by one means, now by the other. At last the aim is avowed, so that men who applauded Mr. Chamberlain in 1893 for sneering at Irish patriotism as a "sickly plant which needed to be watered by British gold" merely because her contribution under the Home Rule Bill was to be small are now urging Ireland to maintain the Union--in Mr. Walter Long"s words--for its "eleemosynary benefits."[114] Ireland herself must and will rise to a higher moral level than that, when she is fully awake to the gravity of the situation. Those who love her most will not lose a minute in explaining that situation. Too much time already has been lost.
FOOTNOTES:
[97] The Treasury Returns of 1869, "Public Income and Expenditure," in two volumes, are the basis of all information up to that date.
[98] Mr. Secretary Pelham in this year estimated that Ireland, though contributing nothing in money to the Navy, had furnished no less than 38,000 men to the Navy since the beginning of the war.
[99] Pre-Union Debts were to be separate. Post-Union Debt _contracted for Imperial services_ was to be regarded as joint, and its charge was to be borne by the two countries in the proportions of their respective contributions (see below); but post-Union Debt contracted by Ireland for domestic services was to be kept separate.
[100] Eight lectures delivered in the National University, Dublin, in 1911.
[101] Inhabited house duty, railway pa.s.senger tax, carriages, armorial bearings, etc. The license for dogs is half the English scale.
[102] On Foster"s Corn Law of 1784, see p. 51.
[103] The text of the unanimous conclusions was as follows:
1. That Great Britain and Ireland must, for the purpose of this inquiry, be considered as separate ent.i.ties.
2. That the Act of Union imposed upon Ireland a burden which, as events showed, she was unable to bear.
3. That the increase of taxation laid upon Ireland between 1853 and 1860 was not justified by the then existing circ.u.mstances.
4. That ident.i.ty of rates of taxation does not necessarily involve equality of burden.
5. That, whilst the actual tax revenue of Ireland is about one-eleventh of that of Great Britain, the relative taxable capacity of Ireland is very much smaller, and is not estimated by any of us as exceeding one-twentieth.
[104] Detailed criticism of the current Treasury accounts under this head will be found on pp. 276-278.
[105] A referendum taken on April 13, 1910, defeated the new proposals.