531 



though overwhelmed by war from 1899 to 1902-3, and moved from 109.4 millions in 

 1895-6 to 153.8 millions in 1905-6. The Corn Duty had been withdrawn, and the 

 Income Tax at is. 3d. in war time reduced to nd. but raised again to is. Only the re- 

 sources of a wealthy country could have borne the strain implied in these facts; and it 

 seems as though the rapidly expanding expenditure which marks the period had been 

 sealed and made permanent by the establishments set up during the War. It was ac- 

 knowledged at the same time that the Army was in pressing need of reorganisation. 

 1 Mr. Asquith succeeded Mr. A. Chamberlain in December 1905 as Chancellor of the 

 Exchequer, and held the office until he became Prime Minister on the resignation of Sir 

 Growth of Henry Campbell-Bannerman in April I9o8,:being succeeded in turn by Mr. 

 Expenditure Lloyd George. The leading feature of the period from 1905-6 to 1912-13 

 1905-1913. is that for the latter year the total expenditure for revenue was placed at 

 186.9 millions, to which 900,000 more had to be added for Naval purposes. To this 

 should also be added 2,985,000 on account of capital expenditure; but it is only fair to 

 add that during the whole period such " extra " expenditure was discouraged, and in the 

 case of military and naval outlay the year's expenditure was placed wholly on the esti- 

 mates. For such a purpose as the undertaking of the National Telephone Company, 

 which was taken over by the Post Office in January 1912, resort was had to borrowed 

 capital, 3 millions being taken in 1911-12, 1.7 millions more in 1912-13, while a much 

 larger sum was due for the undertaking, the total amount being still in dispute at the 

 end of 1912 and subject to decision by an. arbitration court. 



It will be convenient to deal separately with Mr. Asquith's and Mr. Lloyd George's 

 management of the national finances, though they seem to embody a continuous policy. 

 It will be necessary to draw attention to the way in which 38 millions more were added 

 to the annual expenditure of the United Kingdom between 1905 and 1913, and to empha- 

 size the fact that new state services have been undertaken. 



Mr. Asquith was responsible for three budgets, 1906-7, 1907-8 and 1908-9, represent- 

 ing a period of consolidation. Retrenchment had been advocated by him in opposition; 

 Mr. Asquith's anc ^ tne expenditure was watched and checked carefully, as was essential 

 three budgets after the costly war. The measures taken to this end may be judged by 

 1906-7-8. the following facts. From 150.4 in 1905-6 the budget expenditure rose to 

 152.3 millions in 1908-9, though it had been below the 1905-6 level meantime. In the 

 interval the Post Office charges rose from 15.9 to 18.1 millions, but were more than 

 covered throughout by revenue. The Army estimates were reduced, though Mr. 

 Haldane was reorganising the whole service, and the cost fell from 28.8 to 26.8 mil- 

 lions. The cost of the Navy, too, was reduced declining from 33.3 to 3-2.2 millions 

 in this period; and extras on capital expenditure were discouraged, nothing being added 

 to former commitments. There was a growth indeed in the cost of the Civil Services, 

 from 28.4 to 32.3 millions. The principal causes of this, apart from a normal tendency 

 upward in the expense of administration, were the Education estimates, which showed 

 a growth of about i million, and the initiation of the Old Age Pension system at the 

 opening of 1909, toward which 2.1 millions were found necessary ultimately to meet 

 the expense of the quarter from January to March. By this time the expenditure under 

 capital during the year had fallen to 2.6 millions: but the outstanding total under this 

 head was still 51.4 millions. 



The revenue fell from 153.8 in 1905-6 to 151.5 millions in 1908-9, but had been as 



high as 156.5 millions the year before; and, when the circumstances are considered, it 



was surprising to find that surpluses aggregating 15 millions had been 



changes. realised from 1904-5 to 1907-8. The result of 1908-9 proved eventually 



to have been a deficit of 714,000, as receipts were much lower than the 



estimate. This deficit may be accounted for in part by the changes made during this 



period in taxation, and on the other hand by the foundation of Old Age Pensions, for 



which only temporary provision had been made. Mr. Asquith's operations in taxation 



were important. In 1905-6 Mr. A. Chamberlain had reduced the Tea Duty from 8d, to 



6d. per lb., and also some warehousing charges, at a total cost of nearly 2 millions. In 



