It is not, however, on the commercial side only that greater intimacy and more firmly established relations exist now than formerly. Irish industries are agricultural, dairying and manufacturing. In each of these branches the country is increasingly dependent on the markets of England and Scotland; while reciprocally the products of the factories and workshops of Great Britain find in Ireland one of their most important markets. We do not always sufficiently realise that on the other side of the St. George's Channel lies a country whose annual imports amount to sixty-five millions sterling. Even less do we realise that one-half (thirty-two millions sterling) is the value of the imports of manufactures, mainly British, into Ireland. This trade in manufactured goods is not only already enormous; it is rapidly growing. It has increased by more than four millions in four years. Any ill-considered legislative measure which interfered with or disturbed this great volume of trade would no doubt cause serious loss to Ireland; but it would bring bankruptcy and disaster to many British firms and their workmen.

It is, nevertheless, in respect of the political changes and the legislative measures passed in the last quarter of a century that the most serious obstacles will be found in the way of framing any satisfactory scheme for financing a measure of Home Rule. The Irish Local Government system, framed on the British model by the Act of 1898, the Congested Districts Board, and the Department of Agriculture, have hitherto depended financially, either wholly or in part, on Imperial grants in aid. Local taxation payments alone from the Imperial Exchequer amounted in 1910-11 to £1,478,000. The financial scheme under Home Rule must obviously contemplate and provide for the continuance of those grants. Land Purchase schemes have been enacted which have already had the effect of converting a quarter of a million tenants into owners under a contingent liability of 120 millions sterling guaranteed by the Imperial Exchequer. No financial scheme can ignore the fact that the earliest of the annuities created under the Wyndham Act will not expire before 1972, so that the Imperial liability for the payment of the bulk of the annuities already created will continue for at least seventy years more.

Finally, we are faced with the fact that in the last twenty-five years the relations of the State to its citizens have been completely reformed and extended. Social reform is now in the programme of all parties. Education costs several times as much as in 1885. The aged poor have been provided with pensions by the State, and the Insurance Act of last year will shortly call for additional subventions from the Imperial Treasury.

In addition to the new duties thus undertaken by the State, the cost of Defence and of the Civil Services has grown by leaps and bounds. We need not look too closely into the apportionment of these charges whilst we remain partners in a United Kingdom, but if the partnership is to be dissolved at the suit of Irish Nationalism, a new balance must be struck, and on any fair basis the contribution of Ireland under present-day conditions should far exceed the amount under either of the schemes for which Mr. Gladstone made himself responsible. Both schemes recognised the equity of some contribution for these services from Ireland, and it must be assumed that the same broad principles will be applied in any scheme which may be framed hereafter.

By way of introduction to any adequate discussion of the possible financial proposals of any Home Rule measure, it is desirable to set out in some detail the existing financial relations of Ireland and Great Britain. The Treasury calculations on this subject are embodied in two White Papers which have been prepared and published annually during the last eighteen years. It is true that doubts have from time to time been cast on the accuracy of these calculations and of the methods by which the materials on which they are based have been collected. As to this, it is only necessary to say that the information in the possession of the Treasury officials is infinitely more voluminous and likely to be more accurate than any in the possession of private individuals; and there is no reason to suppose the succession of eminent public servants, who have been in turn responsible for the preparation of these returns have been moved in one direction or the other by prepossessions or bias. Their one attempt has been throughout to present a statement, as accurate as it is possible to make it on the one hand of the cost of the existing administration in Ireland and the expenditure incurred there, and on the other of the revenue derived from persons or property living or situated in that country. As the Prime Minister said on November 27 of last year—

"The utmost pains have been taken to make the estimates of 'true' revenue approximately correct, and it is believed that the total revenue as given in the revised returns approximates closely to the facts."[50]

So long as Ireland is an integral part of the United Kingdom, such an investigation has mainly an academic interest. The State is a homogeneous entity; the taxes imposed on individuals similarly circumstanced are the same (with some trifling exceptions—all in favour of Ireland) in whatever quarter of the United Kingdom the individual resides. But the case is wholly different when a proposal is made to split up the State into its constituent parts. It then becomes necessary to inquire if there is any prospect that the constituent parts will have resources sufficient for the various services, commitments and liabilities—present and contingent—which do or will belong to them. And the beginning of any such inquiry is, as has been already said, the present Irish revenue and expenditure.

The essential figures for such an investigation are contained in the following statement. This shows separately the expenditure on the various items which have been the subject of discussion or special mention in the different financial schemes proposed in connection with Home Rule. On the revenue side the effect of the delayed collection of duties under the Budget of 1909-10 has been eliminated by taking the average revenue in the two years in certain items. The figures of expenditure relate to the year 1910-11. The corresponding figures for both collection and contribution are set out in this table in consequence of the suggestion made in some quarters that we should revert to the Gladstonian proposal of 1886 and credit Ireland with the full revenue as collected. Though any such proposal is patently absurd it is mentioned here for the sake of completeness.

STATEMENT SHOWING ESTIMATED REVENUE AND EXPENDITURE IN IRELAND (BASED ON WHITE PAPERS 220 AND 221 OF 1911).

Revenue
As collected.As contributed.
££
1. Customs[A]2,922,0002,866,000
2. Excise (ex. licences)[A]4,872,0002,952,000
3. Licence Duties[A]284,000284,000
4. Estate, etc.[A]914,000914,000
5. General Stamps[A]310,000333,000
6. Income Tax[A]1,106,0001,307,000
7. Postal Services1,155,0001,155,000
8. Miscellaneous139,000139,000
Total£11,702,000£9,950,000
[A] = Average of two years, 1909-10 and 1910-11.
Expenditure.
£
1. Civil list and miscellaneous charges
(ex. Lord-Lieutenant's salary)118,500
2. Lord-Lieutenant's salary20,000
3. Local Taxation Payments1,477,500
4. Public Works415,500
5. Civil Service Departments289,500
6. Department of Agriculture415,000
7. Police1,464,500
8. Judiciary, etc.924,000
9. Education, etc.1,805,000
10. Old Age Pensions2,408,000
11. Superannuation, etc.103,000
12. Ireland Development Grant191,500
13. Miscellaneous12,000
14. Revenue Departments298,000
15. Postal Services1,404,500
Total£11,346,500