Things in this country are coming, or have already come, to a strange pass. An enormous deficit, due to measures and administrative action accepted by both Houses of Parliament, has of necessity to be met by a large increase of taxation. The Budget to provide the necessary means, after the most lengthy discussions, prolonged far beyond the normal Session and through the greater part of the Parliamentary holiday, has at length passed through Committee in the House of Commons, where it has been supported by immense majorities. The Report stage ought not to take very long, and the Bill will then await the sanction of the House of Lords, without which it cannot become law. In ordinary circumstances, in accordance with the modern practice of the Constitution, the supplies for the year would as a matter of course receive this sanction. That the grant of supplies, that is the imposition of taxes. is the function of the House of Commons alone, has long been an accepted principle of the Constitution. Ministers, therefore, have strong ground for insisting that the Third Reading of the Finance Bill in the House of Commons gives to that measure finality; and that though in order to become an Act of Parliament it requires the concurrence of the Peers and the assent of the King, the House of Lords would be stepping outside its proper functions

*1. "Speech of the Earl of Rosebery at Glasgow." September 10, 1909. From the "Times" Reports.

2. "Speech of the Right Hon. H. H. Asquith, M.P., at Birmingham." September 17, 1909. From the "Times" Reports.

3. "Speech of the Right Hon. A. J. Balfour, M.P., at Birmingham." September 22, 1900. From the "Times" Reports.

4. "The Reform of the House of Lords (with a Criticism of the Report of the Select Committee of December 2, 1908)" By William Sharp McKechnie, M.A, LL.B., D.Phil., Lecturer on Constitutional Law and History in Glasgow University. Glasgow: James MacLehose and Sons. 1909.

either by rejecting it in toto or by amending it.

Mr. Chamberlain was, we think, the first responsible statesman of the front rank to advise the Peers to reject the Finance Bill. A large part, however, of the party press, and many of the less important amongst Conservative politicians, have for months past urged upon their leaders this summary method of destroying the Finance Bill by one vote of that Chamber in which the Conservative party has a permanent majority. Leading Peers have very wisely almost invariably refused to formulate their line of action till the Bill had passed the House of Commons, and was actually before them. In passing through the Lower House it has received many amendments. The Ministerial majority there is so overwhelming that the Government might, as was pressed upon them by hot spirits on their own side, have refused to yield anything at all to their opponents and have passed their whole scheme in the shape in which it was proposed. They might, again, have had recourse to "the guillotine." They deserve some credit for refusing to listen to counsel of this sort. They have, in fact, in many cases gone a good way to meet the reasonable criticisms of the Opposition, and they have passed their measure, after almost unexampled labors, by the ordinary methods by which at the present day each party in turn presses violently opposed Bills through the House of Commons. The Bill as it reaches the Lords is a far more reasonable measure that it was when first presented to the Commons, though it contains some most objectionable principles, and involves something very like a new departure in our financial methods.

It can hardly be seriously contested

(1) that it is not competent to the House of Lords to amend a money bill; or (2) that the rejection by that House in toto of the Finance Bill of the year is not in accordance with modern constitutional practice. But the action of the Opposition is defended on the ground that this is no ordinary Finance Bill; that it includes within itself a new policy which requires Parliamentary sanction; that it amounts to a "revolution," and that the Peers are only performing the main duty incumbent on the Chamber to which they belong by insisting that the people themselves shall judge before this revolutionary policy is adopted.

So it appears that the question between Lords and Commons is to be referred to the electorate as the result of the House of Lords refusing the supplies voted by the House of Commons. But the question of the grant of supplies, in itself of immense importance, is by no means the whole of the issue between the two Houses which is to be referred to the people. The present Ministry, or rather that of Sir Henry Campbell-Bannerman, has made itself responsible for proposals to recast the Constitution by withdrawing from the House of Lords its legislative functions. It is hardly too much to say that their proposal is virtually to abolish the House of Lords as a legislative chamber, whilst leaving an ornamental status to the individual Peers. Therefore, whilst the one side wishes to establish for the House of Lords control over the supplies of the year, thereby increasing its authority to an extent which it is by no means easy to measure, the other wishes to establish a single-chamber Parliamentary system in which the House of Commons of the day, elected for a limited time, is to exercise complete control over legislation and over the executive government.

We will leave it to others to char

acterize the statesmanship which has most unnecessarily brought the country to such a choice. To vest the whole of national sovereignty in the House of Commons is to establish a national convention unchecked and uncheckable by anything short of physical force. This seems to be the ultimate policy of His Majesty's Ministers! To give power to the Conservative majority of the House of Lords over the finance of the year is to make Liberal Administration impossible. The right and power to reject the Budget means the right and power to dismiss the Ministers, since a Government cannot exist without "supplies." But for the House of Lords to cause the dismissal of the Ministers of the King whilst those Ministers enjoy the enthusiastic confidence of the House of Commons is to most Englishmen hardly thinkable. But this appears to be the policy of the Opposition!

Within the last few weeks the country has had the advantage of listening to the speeches of Lord Rosebery, Mr. Asquith, and Mr. Balfour. Mr. Asquith is, and the other two have been, Prime Minister. But curiously enough not one of the three has had the direct sanction and approval of the electorate for his administration. Lord Rosebery, on Mr. Gladstone's resignation, stepped into his place. On Lord Salisbury's resignation his nephew, the Leader of the House of Commons, succeeded him. But the General Elections of 1895 and 1906 destroyed the majorities that had placed Mr. Gladstone and Lord Salisbury in office, and swept away their successors. It is only two years since, on Sir Henry Campbell-Bannerman's death, the King sent for Mr. Asquith; and thus so far he also has been without the strength that comes from a direct popular vote of confidence in his leadership. Should Mr. Asquith, as seems not improbable, return from

the General Election with a majority behind him, even should that majority be considerably reduced, we should expect his personal authority in the Cabinet, in Parliament, and the country to be greatly strengthened, and his ministry to show, far more than it has yet done, that solidarity of aim and purpose to which strong leadership is essential.

The questions before the public are: first, the merits and demerits of the Budget; secondly, the expected action of the House of Lords in rejecting it; thirdly, the policy of Tariff Reform promised by the Conservative leader, as the alternative to the Budget.

On the first of these questions the speech of Lord Rosebery to the business men of Glasgow has been, in some respects, the most weighty criticism yet delivered. It was a speech made to an educated audience, intended to influence the opinion throughout the country of men of affairs. And doubtless in this Lord Rosebery has been successful. In our last number we pointed out what appeared to us to be the chief faults of the Finance Bill. Read by the light of the foolish speeches of Mr. Lloyd George and the Lord Advocate, it may well terrify, as Lord Rosebery pointed out, classes far more numerous than "dukes," or the wealthy proprietors of large landed estates. Even the more statesmanlike reasoning of Mr. Asquith and Sir Edward Grey has failed to convince moderate men that the Bill, even as it leaves the House of Commons, is fair and just as between different classes of property owners, or that the plan upon which these vast sums are to be raised is consistent with sound national economy. It would be quite impossible for any Chancellor of the Exchequer to increase taxation to the extent of sixteen millions a year without raising a storm of opposition from people and interests who honestly considered them

be granted. But it is largely due to the wildly extravagant speeches made by supporters of the Ministry, from whose language Ministers themselves have not publicly ventured to dissociate themselves, and to the vulgar claptrap (there is no other word for it) of the Chancellor of the Exchequer himself, that a feeling far stronger than mere grumbling at prospective burdens has grown up, and that it has become possible for the Opposition with some plausibility to declare that the Budget is Socialistic-meaning, we suppose thereby, that it is an attack upon the very institution of private property.

In the House of Commons some of the harshest features of the Finance Bill have been greatly modified: the owners of lands and houses have received from Mr. Lloyd George the benefit of a more just estimate of profits under Schedule A; the expenses of valuation are not to be thrown upon owners; the proposed taxation of "ungotten minerals" has been given up, but additional taxation has been put on the owner's profits from mines actually worked '; the imposition of the annual duty on undeveloped land it is not intended to apply to argricultural land, though the words of the Bill do not seem to give effect to that intention, if at least agricultural land means land used in agriculture. In various other respects the Bill has been amended in the House of Commons in the direction desired. It still remains the case that the owners of mines and the owners of lands, and the large numbers of persons indirectly interested with them, are to be burdened beyond others with taxation upon principles which the Chancellor of the Exchequer and his colleagues have entirely failed to explain to the comprehension of practical men of affairs. And if this is so as

1 Thus the result is to charge the owner of mines income tax twice over. Why?

regards land, there is also much reason for fearing, having again regard to the language of some Ministers, that the proposed taxation of the liquor interest indicates a spirit of political vindictiveness, which that powerful interest will not be slow to resent. More than all, the Budget remains open to Lord Rosebery's charge that Ministers are using the capital of the country to pay for its annual expenditure. Mr. Asquith has dismissed this far too airily; and Mr. Haldane, we think, in the House of Commons fell into the same error. It is unnecessary to deal again with questions discussed in our last number. The imposition of very heavy death duties does as a matter of fact force the withdrawal of capital out of productive employment in order to pour it into the Treasury. We do not agree that it comes to the same thing to the State or to the individual whether the annual income of the nation is derived from these heavy occasional payments out of private capital, or is drawn from the annual income of individual taxpayers. Still less can we agree that heavy taxation, whether of capital or income, does not tend to burden industry and to reduce employment because the State uses its revenues very largely in itself giving employment. If so, the larger our Army and Navy, the greater the number of State employés, the better for our national industrial position. This Ministerial argument is almost worthy of Tariff Reformers in its simple faith in the efficacy of taxation in making business spin!

The Finance Bill has been greatly improved in its passage through the House of Commons; but it remains a bad Bill still. It has been framed by a Minister with no previous knowledge of finance, based upon no thought-out principles or intelligent forecast of its operation. It has been largely supported by speeches-we will not say

arguments-more fit to find a place on a platform in Hyde Park or Trafalgar Square than in a discussion amongst statesmen. Assuredly it was not wise to entrust the overhauling in a single session of our whole financial system to the inexperienced hands of the present Chancellor of the Exchequer, however great the reliance of the Government on a majority willing to accept at their hands anything they might lay before it. It is of little use in the present situation of affairs to point out the errors of the past. It is all-important to realize the true position in which the country now stands. The funds must be provided to cover the national expenditure up to April next. The Ministers of the Crown have presented their scheme to the House of Commons, where it has been largely amended; and the Bill, be it good or bad, is now in ordinary course to be presented to the House of Lords.

Lord Rosebery rightly did not take upon himself to advise the Peers in advance. His language showed that he appreciated the general rule that national finance and the annual grant of supplies were the exclusive business of the House of Commons. He was not addressing the Peers upon their duty, but an assembly of business men on the business aspects of the Budget. A few years ago the late Duke of Devonshire, in a similar fashion, severely criticized and condemned Sir William Harcourt's proposed death duties; but it need hardly be said that it did not occur to him, as a Constitutional statesman, to advise the House of Lords to reject them. This advice Mr. Chamberlain has now given. Hot party men, without apparently considering where this advice will lead them, have applauded it to the echo. A wave of feeling in the Conservative party has been created before which many men whose own reflection must warn them of the danger will bend in silence.

Hence, owing to the violence of some and the weakness of others, the country is within measurable distance of a constitutional crisis more formidable than has occurred since 1832.

At a time when serious attack is threatened upon the constitutional status of the House of Lords, the true friends of that Chamber should be especially solicitous that it should itself confine its action within constitutional limits, and exercise even those functions that admittedly belong to it with prudence and discretion. When the quarrel is merely on a question of privilege between the two Houses, and is left to them, ancient precedents will be ransacked, authorities quoted, and learned arguments employed to solve the difficulty. But if the electorate is to be invited to decide the issue, much broader considerations of a more utilitarian character will prevail. Little importance will be attached to resolutions of the House of Commons in the seventeenth century, or to reiterated assertions on the other side of the privileges of the Peers. Men will think of the consequences of their decision at the present day upon the working of the Constitution; and for the most part they will be very impatient of fine-spun argument. They know that as a matter of fact the House of Lords never amends and hardly ever rejects a "money bill"; and it appears to the simple mind of the "man in the street" that the Finance Bill of the year is certainly a "money bill." But if the House of Lords is to take upon itself to reject money Bills, especially the money Bill of money Bills the Finance Bill, the Budget of the year-what is to happen next?

It is very difficult to believe even now that the House of Lords will take upon itself to refuse the supplies to the Ministers of the Crown. It is one thing to criticise the Budget, and point out that the revenue should be raised

in other ways. Quite another thing to make use of the permanent party majority of the House of Lords to take a step entirely beyond its usual and recognized functions, and reject in toto the Finance Bill of the year. Lord Rosebery's speech and Mr. Chamberlain's letter are conceived on different lines. In the meantime there are two governing considerations staring us in the face, which, nevertheless, are apparently very often lost sight of. One is that the vast expenditure of the nation, which the Opposition do not propose to diminish, can only be met by high taxation. The second is that the statesmen to whom the House of Commons gives its confidence are Ministers of the Crown, the advisers of the Soveign, the heads of the Executive, and that it is their first duty, in the famous words of the Duke of Wellington, to "carry on the King's government." During the last century, on two occasions the House of Lords acted in such a manner as to justify in the opinion of the advisers of the Sovereign recourse to exceptional methods. The House of Lords would have been acting entirely within its admitted constitutional rights in rejecting the Reform Bill of 1832. No one ventured to suggest in 1871 that that House had not authority to reject the Purchase portion of the Army Bill. But in each case the unwisdom, not the illegality, of its action, and the consequences that would probably result from it, compelled Ministers, in their own opinion, at least, to take very exceptional measures for guarding the national weal. They had recourse to the Royal Prerogative in order to carry on the King's government. History has approved the conduct of Lord Grey and of Mr. Gladstone, whilst deploring the action of the Opposition in the House of Lords which had made it necessary.

The present situation, it need scarcely be said, differs very widely