FOOTNOTES:

[73] See p. 140.

[74] The Bill set up a Council of eighty-two elected and twenty-four nominated members, with the Under-Secretary as an _ex-officio_ member.

So far it resembled the abortive Transvaal Const.i.tution of 1905 (see p.

130), but the Irish Council was only to be given control of certain specified Departments, and was financed by a fixed Imperial grant. It was to have no power of legislation or taxation, and was under the complete control of the Lord-Lieutenant.

[75] This arrangement, which is peculiar to the Canadian Federation, is regarded by some authorities as a somewhat serious infraction of the Federal principle, since it seems to imply executive control of the Province by the central Government. The Governors of the States in the Australian Federation are appointed by the Home Government.

[76] The Judicial Committee has ruled "that the relation between the Crown and the Provinces is the same as that between the Crown and Dominion in respect of such powers, executive and legislative, as are vested in them respectively." (Maritime Bank of Canada _v._ Receiver-General of New Brunswick, 1892).

[77] They are governed by Executive Committees, the members of which need not be members of the Councils.

[78] In writing upon this subject, I am indebted to an able paper by Mr.

Basil Williams, which is to be found in "Home Rule Problems."

[79] "Life of Parnell," R. Barry O'Brien, pp. 149 and 139-141.

[80] _E.g._, in 1893, on Clause I. of the Home Rule Bill (Hansard, p.

490): "The Irish minority were willing to be treated on the footing of a Colony, but they protested against a supremacy which would enable the honourable gentleman who formed the Irish Government to appeal to the Imperial Parliament for the a.s.sistance of the Army and Navy to compel the Irish minority to obey their behests."

[81] Cd. 5741, 1911. Some of the subjects discussed were Commercial Relations and Shipping, Navigation Law, Labour Exchanges, Uniformity in Copyright, etc., Emigration, Naturalization, Compensation for Accidents, etc.

[82] I am summarizing facts fully narrated in Chapters XI. and XII.

[83] In the Federal Const.i.tutions of Australia and Canada the central Federal Parliament is responsible for the colonial defences, but the Provinces or States are, of course, represented in the Federal Parliament.

[84] Commonwealth of Australia Const.i.tution Act, 1900, Sec. 58, and British North America Act, 1867, Sec. 15. Until quite recently it was the custom always to give the command of the Canadian Militia to a British officer lent to Canada. The present Commander, however, is a Canadian.

[85] See Appendix.

[86] A Colony may make local regulations to carry out an Imperial Law about extradition and neutrality, but may not touch the law.

[87] For the const.i.tutional position of self-governing Colonies, the author owes much to Mr. Moore's "Commonwealth of Australia."

[88] The Commonwealth of Australia Const.i.tution Act, 1900, and the British North America Act, 1867, in order to delimit the respective powers of the Federal and Provincial Legislatures, set out a list of subjects on which the Federal Parliament has exclusive or collateral power to legislate. There is implied, of course, a pre-existing right on the part of the Colony, as a whole, _qua_ Colony, to legislate on the matters referred to in the list. But the pre-existing right is subject to any pre-existing const.i.tutional or statutory limitations. _E.g.,_ "Naturalization and Aliens" is in the list of Commonwealth powers (Sec.

51, xix.), and of the Canadian powers (Sec. 91, xxv.), but the power of any Colony is limited by Acts of 1847 and 1879 to giving naturalization within its own borders. (At the Imperial Conference of 1911 a scheme was foreshadowed for standardizing naturalization throughout the Empire.)

"Copyright" is also in both lists, but the colonial power is limited by the International Copyright Act of 1886, which, by Sec. 8, implies that a "British possession" may only make laws "respecting the Copyright within the limits of such possession of works produced in that possession." This Copyright Act is an example of implied limitation and sanction together. The Coinage Act of 1853 is an example of implied sanction only, in empowering a Colony to legislate as if the Act had not been pa.s.sed. Another cla.s.s of Imperial Acts confers _direct_ powers to legislate on certain subjects--_e.g.,_ the Australian Colonies Custom Duties Act of 1873 (removing the restrictions imposed upon intercolonial duties in 1850). The Naturalization Acts are partly of this character, and other examples are the Colonial Naval Defence Act of 1865, and certain provisions of the Army Act of 1881, and the Colonial Courts of Admiralty Act of 1890.

[89] _E.g.,_ Colonial Attorneys Belief Act, 1857; Colonial Probates Act, 1892; parts of the Finance Act, 1894; and Wills Act, 1861.

[90] _E.g.,_ Colonial Laws made under sanction of the following Imperial Acts: Colonial Prisoners Removal, 1869; Merchant Shipping, 1894; Sections 478 and 736, Colonial Marriages, 1866.

[91] _E.g.,_ 18 Vict. Ch. 55, Sections 42 and 43.

[92] See Appendix, under the head of restrictions on "Irish Matters."

For convenience, land legislation is included in the list, though it clearly belongs to a different category, and I have so dealt with it above.

[93] In the Bill of 1886 (Clause 11, Subsec. 7) and in the Bill of 1893 (Clause 8, Subsec. 3) power was given to alter the qualifications of the franchise, etc., for the Lower House--in the former Bill after the first dissolution, in the latter after six years.

[94] In 1910, of the total Federal revenue of 675,511,715 dollars, 623,616,963 dollars were raised in this way, or twelve-thirteenths.

(Postal revenue, which balances Postal receipts, is excluded.)

[95] In 1909-10 Dominion revenue from Customs and Excise was 75,409,487 dollars. Total ordinary expenditure (excluding capital accounts), 79,411,747 dollars.

[96] Estimate for 1910-11. Total Federal revenue, 16,841,629; revenue from Customs and Excise, 111,700,000. Total Federal expenditure 11,122,297. 5,267,500 will be available for return to the State exchequers (see pp. 245-246).

CHAPTER XI

UNION FINANCE

I ask the reader to follow with particular care the following historical summary of Anglo-Irish finance. None of it is irrelevant, I venture to say. It is not possible to construct a financial scheme, or to criticize it when framed, without a fairly accurate knowledge of the historical facts.

I.

BEFORE THE UNION.[97]

Before the Union Ireland had a fiscal system distinct from that of Great Britain, a separate Exchequer, a separate Debt, a separate system of taxation, a separate Budget. Yet she can never truly be said to have had financial independence, because she was never a truly self-governing country. Until 1779, when the Protestant Volunteers protested with arms in their hands against the annihilation of Irish industries in the interest of British merchants and growers, her external trade and, consequently, her internal production, were absolutely at the mercy of Great Britain. As I showed in Chapter I., Ireland was treated considerably worse than the most oppressed Colony, with permanently ruinous results. On the other hand, her internal taxation, never above a million a year, and her Debt, never above two millions in amount, were not heavy. But from 1779, through Grattan's Parliament to the Union, a short period of twenty-one years, Ireland, though still governed on the ascendancy system by an unrepresentative and corrupt Parliament of exactly the same composition as before, nevertheless had financial independence in the sense that her Parliament had complete control of Irish taxation, revenue, and trade. It was, moreover, in these financial matters that the Parliament showed most genuine national patriotism, together with a greatly enhanced measure of the Imperial patriotism traditional with it. Internal taxation, except in time of war, was still comparatively light; depressed home industries were judiciously encouraged by bounties; no attempt was made at vindictive retaliation upon British imports, though Irish exports to Great Britain were still unmercifully penalized; and sums, growing to a relatively enormous size during the French War, which began in 1793, were annually voted for the Imperial forces. This voluntary contribution, which had averaged 585,000 in the eleven years of peace, from 1783 to 1793, rose to 3,401,760 in 1797,[98] and in 1799, when Ireland was paying the bill for British troops called in to suppress her own Rebellion, to 4,596,762, out of a total Irish expenditure for the year on all purposes, military and civil, of 6,854,804. Not more than half, on the average, of these war expenses were met out of the annual taxes. Debt was created to meet the balance; but neither the debt, heavy as it was, nor the taxes, were intolerably burdensome--that is, if we regard Ireland as financially responsible for Imperial wars and for the suppression of a Rebellion which was provoked by scandalous misgovernment. Tax revenue rose from 1,106,504 in 1783, when the free Parliament first prepared a Budget, to 3,017,758 in 1800, and averaged a million and a half. In the same period the total amount of the funded and unfunded Irish Debt rose from 1,917,784 to 28,541,157, almost the whole of this increase having taken place in the seven years of war immediately preceding the Union. In Great Britain both Debt and taxation had risen in a larger ratio, and were relatively far greater. For example, in the six years, 1793-1798 inclusive, 186,000,000 had been added to the British Debt, only 14,000,000 to the Irish Debt. In 1801 the British Debt stood at 489,127,057; the Irish Debt at 32,215,223.

II.

FROM THE UNION TO THE FINANCIAL RELATIONS COMMISSION OF 1894-1896.

The Union of 1800, therefore, could not be justified on the ground that a poor country would profit by fiscal amalgamation with a rich country, and Pitt and Castlereagh, when framing the Union Act, recognized that truth by leaving Ireland with a separate fiscal system, as before; though the administration of this system was, of course, now to be wholly in British hands. There were to be separate Exchequers, Debts,[99] taxes, and balance-sheets, with the following restrictions: That prohibitions against imports and bounties on exports (corn excepted), should cease reciprocally in both countries; that, with the exception of 10 per cent. ad valorem duties on a variety of articles named, there should be mutual free trade; and that no tax on any article of consumption should be higher in Ireland than in Great Britain.

But although Pitt and Castlereagh ostensibly carried out the principle of separate fiscal systems, they laid the foundations for a fiscal amalgamation which was disastrous to Ireland. Since his Commercial Propositions of 1785, Pitt had never abandoned the idea of obtaining from Ireland an obligatory annual contribution to Imperial services based on some fixed principle. By Clause 7 of the Act of Union he achieved his aim. It was settled that for twenty years Ireland should contribute in the proportion of 1 to 71/2 (or 2 to 15)--that is, that Great Britain should pay 15/17, or 88.24 per cent., of common Imperial expenses, including the charge for debt contracted for Imperial services, and Ireland 2/17, or 11.76 per cent. n.o.body now denies that this ratio was grossly unjust to Ireland. It took no account of the relative pre-Union Debts; it took no account of the tribute of nearly four millions paid in rents to absentee English proprietors; it was based on superficial deductions from inadequate and misleading data, and the Act was hardly pa.s.sed before its absurdity became manifest. Fifteen years of almost incessant war followed the Union. Ireland, even by raising taxation to the highest possible point, was unable to pay her contribution without contracting a Debt colossal in proportion to her resources. While Great Britain only doubled her Debt, and paid 71 per cent. of her expenses out of current taxation, the Irish Debt quadrupled, and in 1817 reached the portentous total of 112,634,773; while only 49 per cent. of Irish expenditure was paid for out of revenue. Here is a little table which shows the effect upon Ireland of Clause 7 of the Act of Union:

Five Years. Average Average Revenue. Expenditure.

{ 1785-1790 1,246,000 1,247,000 Before Union ---{ 1790-1795 1,340,000 1,646,000 { 1795-1800 2,100,000 4,601,000

{ 1801-1806 3,643,000 7,270,000 After Union ---{ 1806-1811 4,885,000 9,061,000 { 1811-1816 5,927,424 13,188,000

The scandal could no longer be overlooked. It was impossible to raise the Irish taxes. Their yield was already showing signs of diminishing.

But the Act of Union had provided for the situation which had arisen.

One of the sections of the famous Clause 7 enacted that if and when the separate Debts of the two countries should reach the proportion of their respective Imperial contributions, Parliament might, if it thought fit, declare that all future expenses of the United Kingdom should be defrayed indiscriminately by equal taxes imposed on the same articles in both countries, "_subject only to such exemptions and abatements in favour of Ireland as circ.u.mstances may appear from time to time to demand_." The framers of this section had antic.i.p.ated that the English Debt would sink to the level of the Irish Debt. Anglo-Irish finance teems with grim jokes of this sort; but the section was useful in either event. With its terms before them, a Committee sat to consider the state of Ireland, with the result that, by an Act which came into operation on January 5, 1817, the Exchequers, Debts, revenues, and expenditures, but not as yet the taxes, of the two countries were amalgamated. In Professor Oldham's words,[100] "the corpse of Ireland's insolvency was huddled into the grave, and no questions were to be asked." The whole expenditure, Imperial and local, of the United Kingdom, Ireland included, was to be defrayed out of a Consolidated Fund, and the arrangements, therefore, for a separate Irish contribution on a fixed basis to Imperial services were cancelled. Henceforth her Imperial contribution, for anyone who troubled to calculate it, was represented by the excess of revenue raised within Ireland over the expenditure in Ireland. A mutual free trade was also established, not instantaneously, but in the course of a few years. By 1824 all duties, as between Ireland and England, had ceased, and in 1826 the custom-houses ceased to record the transit of goods between England and Ireland, except in articles such as spirits, on which a different excise duty was charged. No statistics were compiled, therefore, of Anglo-Irish trade until ninety years later, when the Irish Department of Agriculture began to prepare returns. Such was the origin of our Customs Union against the world (for, needless to say, those were still the days of high Protection), and it is instructive to compare it with the voluntary pacts of the German States and South African Colonies, and with their political results.

In one important point unification was left incomplete. It was impossible in 1817 to equalize internal taxation in the two countries, though it was held desirable to do so, because Ireland could not have borne the higher British scale, and suffered enough under her own.

Regard, too, was had at first to those important words in the Act of Union which guaranteed to Ireland such "exemptions and abatements" as might appear fair. But they were soon forgotten. Without any inquiry into the taxable capacity of Ireland, the stamp, tea, and tobacco duties were equalized early in the period, the enhancement in Ireland of the last duty from 1s. to 3s. on raw tobacco, and from 1s. to 16s. on manufactured tobacco, laying an exceptionally heavy burden on the Irish poor. Meanwhile the abolition, after the close of the war, of taxes representing about sixteen millions a year, and purely affecting Great Britain, gave a relief to her which Ireland did not feel. But it was not until 1853, when Mr. Gladstone extended the income-tax to Ireland, and raised the Irish spirit duty, that the principle of "exemptions and abatements" was most seriously infringed. Mr. Disraeli followed in 1855 with a further elevation of the spirit duty, which was finally equalized with the British duty in 1858, at 8s. a gallon; while in 1860 both duties were raised to 10s. In the seven years 1853-1860 the taxation of Ireland was raised by no less than two and a half millions per annum. It will be recalled that the great famine had taken place in 1846-47, and that between the Census of 1841 and that of 1861 the population sank from eight to six millions, while the British population rose from eighteen and a half to twenty-three millions. The statistical result of the increased taxes, therefore, was to show a rise in taxation per head of the Irish people from 13s. 11d. in 1849 to 1 5s. 4d. in 1859, while in Great Britain it rose only from 2 7s. 8d. to 2 10s. during the same period. Equality of taxation has never been wholly established, for to this day a few quite unimportant taxes are not levied, or are levied on a lower scale in Ireland;[101] but from 1858 onward we may regard the taxation of the two countries as almost identically the same.

In the meantime a great revolution, also beginning at the time of the famine, had taken place in the fiscal system of the United Kingdom. Free Trade with the outside world had been established, and whatever we may conclude about its effect, it had been established, as we know, with a special view to British industrial interests, and without the smallest concern for Irish interests, which were predominantly agricultural. It was certainly followed by an immense industrial expansion and prosperity in Great Britain; it was certainly initiated at the lowest point of Ireland's moral and physical wretchedness. Opinions differ as to the precise economic effect upon Ireland. Miss Murray, in her thoughtful and exhaustive study of the commercial relations between England and Ireland, holds that, as agricultural producers, the Irish lost far more than they have gained as consumers of foodstuffs, while a number of small and struggling rural industries, whose powerful counterparts in Great Britain could easily withstand foreign compet.i.tion, did undeniably succ.u.mb in Ireland.