344 



GREAT BRITAIN AND IRELAND. 



amounted to 1,980,000, while savings of 005,- 

 000 were effected, making the net expenditure for 

 the year 108,150,000, leaving a surplus of 180,- 

 000. Adding 9,521,000 paid to the local-taxa- 

 tion account, 1,843,000 borrowed for telephones, 

 barracks, the Uganda Railroad, and other pur- 

 poses, and 1,710,000 issued from the exchequer 

 balances for naval and military works, the gross 

 expenditure was 121,224,000. 



The budget estimate of expenditure for 1900 

 was 112,927,000, the increase in the army esti- 

 mates being 1.390,000, in the navy estimates 

 2,817,000, in the civil service 387,000. in the 

 postal services 781,000, in the consolidated fund 

 charges 742,000. The Chancellor of the Ex- 

 chequer reduced the estimate to 110,927,000 by 

 taking off 2,000,000 from the annual sum set 

 apart for the payment of the interest and prin- 

 cipal of the debt, which had already been re- 

 duced from 28,000,000 to 25,000,000. The 

 revenue for 1900 was estimated at 110,287,000 

 on the basis of existing taxation. A new stamp 

 tax of a fourth of 1 per cent, was imposed on 

 transactions in foreign and colonial stocks and 

 bonds, a stamp duty of one eighth of 1 per cent, 

 on the loan capital and debenture stock of com- 

 panies, an increase in the duty on the capital 

 stock of companies from one tenth to one fourth 

 of 1 per cent., and a sixpenny instead of a penny 

 stamp on allotments and transfers of stock, the 

 yield from the new duties being estimated at 

 450,000. An increase in the wine duties, from 

 Is. to Is. Orf. per gallon on whines under 31 degrees 

 of proof, from 2s. Qd. to 3s. on stronger wines, 

 and from 2s. to 2s. Qd. surtax on sparkling wines, 

 was expected to yield 420,000. The increases 

 in taxation raise the estimate of the total rev- 

 enue of the exchequer to 111,157,000, of which 

 2l;770,000 come from customs, 29,850,000 from 

 excise, 11,150,000 from death duties, 8,050,000 

 from stamps, 800,000 from land tax, 1,650,000 

 from house duty, 18,300,000 from income tax, 

 and 19,587,000 from nontax sources. 



The first reduction of 3,000,000 in the annual 

 fixed debt charge as established by Sir Stafford 

 Northcote in 1874 was made by Mr. Goschen in 

 1887. The new inroad of Sir Michael Hicks-Beach 

 into the sinking fund still left nearly 0,000,000 

 a year available for the reduction of debt. The 

 manner in which the debt is reduced is mainly 

 through the action of terminable annuities. The 

 national debt commissioners purchase consols in 

 the open market to be held as security for postal 

 savings-bank deposits, and from time to time a 

 block of these consols is canceled and replaced 

 by a terminable annuity of such an amount and 

 running for such a time as will suffice to pay 

 the interest on the consols canceled and at the 

 end of the period replace the capital, which may 

 then be used to set up a fresh terminable annuity, 

 or it may pass into the new sinking fund and be 

 applied to the redemption of debt by the direct 

 purchase of consols in the open market or to some 

 other purpose. Between 1902 and 1904 three 

 large terminable annuities come to an end, and 

 the interest on consols will be lowered one fourth 

 of 1 per cent., releasing 7,000,000 a year for 

 the new sinking fund, which would be further 

 increased to 9,200,000 a year by 1906. In order 

 to prevent the diversion of these windfalls to 

 some wholesale remission of taxation, Sir Michael 

 Hicks-Beach proposed to prolong the savings-bank 

 annuity of 2,200,000 from J902 till 1911, re- 

 ducing the annual charge to 591,000, and with 

 the savings to set up two terminable annuities 

 of 746.000 and 870,000 respectively for the 

 cancellation of the loan of 13,000,000 obtained 



from the savings banks in 1892 to carry out the 

 shipbuilding programme and of 15,000,000 of 

 consols held by the savings banks, both annui- 

 ties expiring in 1923, when consols will be re- 

 deemable at par. Since Sir Stafford Northcote in- 

 itiated the fixed debt charge in 1874 the amount 

 of the national debt has been reduced from 768,- 

 946,000 to 627,505,000. In 1884, when consols 

 were at par, the Government held 82,775,000 

 and 529,986,000 were in the hands of the public. 

 In 1899 the Government holdings were 162,000,- 

 000 and those of the public 358,000,000, the 

 premium had risen to 11 per cent., and it was 

 likely to rise indefinitely if the Government con- 

 tinued its purchases, although in twenty-four 

 years consols would be redeemable at par. Dur- 

 ing the time in which the taxpayers have borne 

 the debt charge as fixed by Mr. Goschen in con- 

 nection with the conversion of the 3-per-cent. 

 consols in 1888, while the annual amount appli- 

 cable to debt redemption has grown from 5,000,- 

 000 to 7,750,000, they have been subjected to 

 increased direct taxation in order to meet un- 

 precedently heavier expenditure. In the last 

 four years the naval expenditure has increased 

 7,000,000, army expenditure $2,500,000, civil- 

 service expenditure 2,750,000, and grants out of 

 the local taxation fund 3,000,000. For fifty 

 years previous to 1878 the imperial taxation and 

 expenditure were almost at a standstill, the in- 

 crease being less than the growth of population, 

 although other European nations increased their 

 taxation 75 per cent, during this period. In the 

 past twenty years imperial taxation has grown 50 

 per cent., chiefly as the result of the policy initi- 

 ated by Disraeli in the check given to Russia 

 after the Turkish war of 1878 and the purchase 

 of Suez Canal shares. The colonial expansion, by 

 which similar enterprises of France and Germany 

 were frustrated or forestalled, the military occu- 

 pation of Egypt, and the activity in eastern Asia 

 have added to imperial responsibilities, and been 

 attended with a growth of armaments in emula- 

 tion of the armaments of Continental powers. 

 While the expenditure on the debt was 3,400,- 

 000 less in 1898 than in 1878, and the cost of 

 collecting the revenue remained the same, the 

 expenditure on the army and navy increased be- 

 tween those years from 26,300,000 to 40,400,- 

 000, that of the postal and telegraph, due to the 

 growth of business, from 5,000,000 to 11,- 

 500,000, that of the civil service from 15,600,- 

 000 to 22,900,000. Adding the Government con- 

 tributions to local authorities and the contribu- 

 tion from India, which were formerly included 

 in the accounts, the total expenditure in 1898 

 was 112,500,000, compared with 78,000,000 in 

 1878. 



The debt on March 31, 1898, amounted to 638,- 

 266,482, offset to the extent of assets amounting 

 to 25,241,799, chief of which were the Suez 

 Canal shares purchased from the Khedive of 

 Egypt, valued at 25,241,799, and further offset 

 by exchequer balances of 10,918,422 in the . 

 Bank of England and the Bank of Ireland. The 

 national wealth is estimated at 10,000,000,000, 

 and the annual value of property and profits as- 

 sessed for the income tax are 700,000,000, ex- 

 ceeding the principal of the debt, which represents 

 a burden of 15 17s. Qd. per capita, the annual 

 charge being 12s. 5d. per capita. The principal 

 of the funded debt on March 31, 1898, was 

 585,787,624, the estimated value of terminable 

 annuities was 40,515,080, and the unfunded 

 debt was 8,133,000; total, 034,435,704. Other 

 capital liabilities, incurred through the imperial 

 defense act of 1888, the telegraph act of 1892, 



