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 competition, did undeniably succumb in Ireland.
My own opinion is that the past influence upon Ireland of free trade, in the first instance with Great Britain, and later with the outside world, though a highly interesting and important topic in itself, is commonly exaggerated, to the neglect of the vastly more important question of the tenure of land. Free trade did not cause the famine. On the contrary, the presage of the famine was one of the minor causes which induced Peel to take up Cobden's policy for the free importation of foodstuffs. The effect of that policy upon Ireland sinks into insignificance beside an agrarian system which had reduced the mass of the Irish peasants to serfs, kept them near the borders of destitution, and in a state of sporadic crime for a century and a half before, and for forty years after the repeal of the Corn Laws, and, at the climax of a period of high protection for agricultural products, rendered it possible for a mere failure of the potato-crop to cause death to three-quarters of a million persons. These things do not happen in properly governed, in other words in self-governed, countries, whatever their fiscal system, and they have never happened to Irishmen in any other part of the world but in their own fertile island. Manufacturing industries stand on a different footing. Most of the staple industries of Ireland, notably the woollen industry, and the aptitudes which brought them into being, were deliberately destroyed long ago by fiscal measures imposed by England, and their destruction aggravated the misery and exhaustion produced by a bad land system. How far their partial revival under the fiscal Home Rule of Grattan's Parliament was genuine, and might, with a continuance of fiscal Home Rule, have been permanent, it is impossible to say. The retarding effect of the Rebellion, and the long start already obtained by Great Britain in the industrial race, are factors beyond accurate calculation. But one thing is certain, that the revival of industries was, at that stage, of trivial importance beside the rural regeneration of Ireland, and that Grattan's Parliament had not the remotest influence for good upon the land question, which it neglected as heartlessly as its predecessors for a century before and its successors for seventy years afterwards.[102]
Industries are valuable assets for any country; but countries almost wholly agricultural, like Denmark, can prosper remarkably, and without Protection, provided that they possess or evolve a sound system of agrarian tenure, in other words, a sound relation between tenant and landlord, or, in default of that, peasant ownership. In every country in the world that has been a sine qua non of prosperity. Suppose that English labourers had built out of their own money and by their own hands the factories, docks, and railways in which they worked, and that the resulting profits, wages deducted, went solely to ground landlords. That gives us some idea of the old Irish land system, whose overthrowal began only in 1870; a system under which the landlord put no capital into the land, though his rent represented the full profits of the tenant's capital and labour, less an amount equivalent to a bare subsistence wage, governed by competition.
The present influence upon Ireland of the Imperial fiscal system, now that peasant proprietorship has been half accomplished, is another matter upon which I shall have to say more presently, when we have completed our review of Anglo-Irish finance. Let us return to the point we had reached: that free trade with the outside world and the equalization of taxation between Great Britain and Ireland approximately coincided in point of time, and were also contemporaneous with rapid and continuous growth in the wealth and population of Great Britain, and a steady and continuous decline in the Irish population. We know now, moreover, though nobody knew it then, because the calculation was not yet made, that Ireland was paying a large contribution to Imperial services, over and above her local expenditure. In the half-century between 1810 and 1860 she had paid an average yearly sum of nearly four millions, and a total sum of nearly two hundred millions. In the year 1859-60, when the now equalized spirit duties were raised to 10s., she paid £5,396,000; a sum considerably more than double the expenditure on Irish services, and equivalent to no less than five-sevenths of the revenue raised in Ireland.
Parliament gave no serious attention to any of these phenomena from the time of the fiscal union in 1817 until after the introduction of Mr. Gladstone's second Home Rule Bill in 1893. No settled conclusions were arrived at as to the relative wealth of the two countries, as to the capacity of Ireland to bear the British scale of taxation, or even as to the amount of revenue derived from and expended in the countries respectively, with the consequent contributions made to common Imperial services. A Committee sat in 1864-65, which compiled some interesting information and heard some important witnesses, but ignored the main questions at issue and produced what Sir Edward Hamilton described later as an "impotent" Report. Sir Joseph MacKenna, an able Irish banker, again and again, between 1867 and 1876, pleaded for an inquiry into Anglo-Irish finance, alleging gross injustice in the incidence of Irish taxation, and obtained nothing more than a rough return showing that between 1841 and 1871 the gross tax revenue per head of the population had risen in Ireland from 9s. 6.7d. to £1 6s. 2.2d. and had fallen in Great Britain from £2 9s. 9.5d. to £2 4s. 1.6d. For the first time also it was shown that the national beverages of England and Ireland, beer and whisky, respectively, were taxed in a ratio unfair to Ireland. In 1886 Mr. Gladstone, in preparing his first Home Rule Bill, had to re-open the question of the relative resources of Ireland and Great Britain for the first time since the Union, because he proposed a fixed annual contribution, unchangeable for thirty years, from Ireland towards the Imperial services. He fixed the contribution at one-fifteenth or approximately half that of two-seventeenths fixed by Pitt in 1800, and the new figure was certainly not too low. In 1888 the question was again incidentally raised by Mr. Goschen, who apportioned certain equivalent grants towards local taxation in England, Scotland, and Ireland, in the proportion of 80, 11, 9, apparently on the principle that those were the proportions in which each country respectively contributed to Imperial expenditure. Mr. Gladstone, in preparing the Home Rule Bill of 1893, made investigations which threw additional light on the true amount of revenue derived from Ireland, with allowance made for revenue from dutiable goods taxed in Ireland but consumed in Great Britain, and vice versa, but his financial scheme, as revised in the course of the Session and passed by the House of Commons, evaded the crucial issue by making Ireland's contribution to Imperial services a quota, one-third, of her true annual revenue. This quota, moreover, was indirectly reduced by temporary subsidies in aid of Irish charges (e.g., for Police) and was estimated, with these deductions, not to exceed at the outset one-fortieth.
III.
THE FINANCIAL RELATIONS COMMISSION OF 1894-1896.
It was now apparent that, with or without Home Rule, the whole subject needed serious investigation, and in 1894, after the defeat of Mr. Gladstone's Bill, a Royal Commission under the Presidency of Mr. Hugh Childers was appointed to consider the "Financial Relations between Great Britain and Ireland." Their Report deserves careful study, because it contains within it all the essential materials for forming a judgment upon the financial problem of to-day. All that it lacks are the complementary figures of the subsequent seventeen years, and these figures, which I shall presently add, do not affect the conflict of principles, though they throw into more vivid relief than ever the outcome of conflicting principles.
In composition it was a very strong Commission; it consulted the highest financial authorities in the Kingdom; it made for two years an exhaustive examination, historical and practical, of the questions submitted to it, and although the members disagreed on some important points, the conclusions upon which they were unanimous cannot be impugned. The terms of reference were:
"1. Upon what principles of comparison, and by the application of what specific standards, the relative capacity of Great Britain and Ireland to bear taxation may be most equitably determined.