FISCAL RELATIONS 
 
 OF THE 
 
 UNITED KINGDOM AND IRELAND, 
 
 WITH SPECIAL REFERENCE TO 
 
 ®jre State ||«rffjase of ITaiiA 
 
 BY 
 
 WILLIAM F. BAILEY, 
 
 barrister-at-$fafo, 
 
 HONORARY SECRETARY OF THE STATISTICAL AND SOCIAL INQUIRY SOCIETY OF 
 
 IRELAND. 
 
 DUBLIN: 
 
 HODGES, FIGGIS & CO., 104 GRAFTON-STREET. 
 
 18 8 6 
 
3 3 &> ^ R 
 
 15 f 
 
 FISCAL RELATIONS 
 
 OP 
 
 THE UNITED KINGDOM AND IRELAND. 
 
 -- 4 »- »- 
 
 Any scheme that could be devised which would settle the land 
 question in Ireland, without being unfair to the British taxpayer or 
 unjust to the Irish landowner, would he gladly welcomed by all 
 parties having a real desire to benefit Ireland, and restore peace and 
 prosperity to its people. Events march rapidly nowadays, and a 
 problem which was regarded as solved a few years ago, is again 
 m being pressed forward as if it had never engaged the attention of 
 1 } the leading legislators, economists, and jurists of the empire. A 
 • wholesale measure, dealing with the ownership of the land, includ¬ 
 ing the expropriation of the present owners and the transference of 
 their rights to the State, is by many considered the best, the most 
 effectual, and, in fact, the only permanent way of settling the 
 question. Although this has been the opinion long held by persons 
 ^occupying entirely different and even opposing positions, no real 
 /^attempt was made to propose any satisfactory solution on such lines. 
 '""The magnitude of the difficulty, the immense extent of the property 
 involved, and the disinclination to impose a heavy burden on the 
 already overweighted taxpayer, left the question “ in the air,’’ so to 
 speak. An attempt was made by the Land Acts of 1870 and 1881, 
 and the Land Purchase Act of 1885, to encourage the buying out 
 of the landowners, by giving the occupiers state loans on favourable 
 terms for the purpose. Various circumstances prevented the success 
 of these measures, although each was more favourable than its pre¬ 
 decessor, so far as the purchaser was concerned. When, accordingly, 
 a scheme was put forward some short time ago, which promised to 
 effect a radical and sweeping change in the ownership of the land, 
 without imposing any great hardship or additional burden on any 
 class in the State, everybody was interested, and hope of a satis¬ 
 factory settlement—a hope which has been grieviously languishing 
 —again filled men’s minds. 
 
 Mr. Giffen, the author of the scheme propounded, under the nom 
 
 1 
 
 S 
 
4 Fiscal Relations of the United Kingdom, and Ireland. 
 
 de plume “ Economist ” in the Statist early in the present year, 
 claimed for his proposal that it would enable the imperial govern¬ 
 ment to buy out every landlord in Ireland, giving him consols at 
 par, equal in nominal amount to twenty years’ purchase of the present 
 judicial rents; to give the land free to the present occupiers, subject 
 only to a rent-charge of one-half or two-thirds of the present judicial 
 rents, payable to the new local authorities in Ireland, and to relieve 
 the imperial exchequer of all payments now made out of it in con¬ 
 nection with the local government of Ireland.* By the last clause 
 of this scheme it was intended that the imperial exchequer should 
 continue to pay the present contributions in aid of local government 
 in Ireland, in the shape of interest on the debt contracted to expro¬ 
 priate the landowners. 
 
 The proposal met with the support of the most advanced politi¬ 
 cians in Ireland; but the chief difficulties in the way of its universal 
 acceptance were the doubts entertained of the correctness of the figures 
 on which it was based, and the objections put forth on the part of 
 English writers to the payment of an annual charge by Great Britain, 
 on the newly created debt, when their personal interest in the Irish 
 question would be to a great extent gone; for the scheme was 
 generally, though not necessarily, looked upon as an accompaniment 
 to, and a forerunner of, a measure of enlarged local self-government 
 or of Home Rule. Without in any way touching on the more purely 
 political aspect of the question, my object is to consider the facts 
 and figures on which Mr. Giffen’s proposal is based, and submit his 
 proposal to a more minute examination than has yet been given to 
 it. To do this satisfactorily it will be necessary to analyze carefully 
 the present burden of local and imperial taxation in Ireland, and 
 define the existing and forecast the future financial relations between 
 the exchequers of Great Britain and Ireland. 
 
 Before dealing with the proposed future financial relations be¬ 
 tween the two countries, it will be necessary to state carefully the 
 present position of affairs, so that we may thoroughly understand 
 the circumstances with which we have to deal, and the existing 
 interests which we must take into account. 
 
 Taxable Capacity of Ireland as compared with Great Britain. 
 
 Mr. Giffen, in his article in the Nineteenth Century (March, 1886) 
 on the “Economic Value of Ireland to Great Britain,” devotes himself 
 
 Statist , 9th January, 1886. 
 
Fiscal Relations of the United Kingdom and Ireland. 5 
 
 to proving that while Ireland is of little or no value as an integral 
 part of the British Empire, she is at the same time much over-taxed 
 as compared with Great Britain. Many of Mr. Giffen’s figures are 
 doubtful, and some are based on calculations that, with the informa¬ 
 tion at present attainable, are little better than guess work. We 
 may, however, accept the main figures on which his argument is 
 based as correct, or as nearly so as it is possible to make them. 
 
 It is almost universally acknowledged that in imposing taxation 
 on a people regard should be had to the relative ability of the 
 different classes required to contribute. Consequently, if it be 
 found that an undue share of the revenue of the State is drawn 
 from any particular section of the community, it may be taken for 
 granted that some alteration in the incidence of taxation is advis¬ 
 able. This being so, it is very necessary to consider the contribution 
 to the imperial revenue from Ireland, and how it stands as regards 
 the ability of this country to pay, as compared with the remainder 
 of the United Kingdom. Numerous tests of relative ability to 
 contribute may be applied, more or less satisfactory. The popula¬ 
 tion of the United Kingdom (including Ireland), according to the 
 census of 1881, was 35,026,639, and of Ireland alone 5,174,836. 
 Ireland, accordingly, contains one-seventh of the whole population 
 of the British Isles. The area of Ireland is 20,819,829 statute 
 acres, and of the United Kingdom, 77,828,829 statute acres—that 
 is, Ireland comprises over one-fourth part of the United Kingdom. 
 In contrasting the wealth of Great Britain with that of Ireland, we 
 can take as our bases of comparison the income tax assessment of 
 the respective countries, their estimated total capital, their total 
 income, their taxable income, or the amount of property in each on 
 which legacy and succession duties are annually paid. The net 
 amount of property and profits charged with income tax in the 
 United Kingdom for the year ending 5th April, 1883, was 
 ^ 5 i 9 j 435 j 375 j an d in Ireland alone £26,756,126, or one-twentieth 
 of the total sum.* Mr. Giffen estimates the total capital of Great 
 Britain (excluding Ireland) as £9,600,000,000, and of Ireland as 
 £400,000,000, or one twenty-fourth of the total, f He estimates the 
 total income of Great Britain at £1,200,000,000, and of Ireland at 
 £70,000,000, being a proportion of one-seventeenth of the total. 
 The taxable income of the United Kingdom—that is, the income 
 
 * Thom's Directory (1885), PP- 587, 674. 
 t Nineteenth Century , March, 1886, p. 332. 
 
6 Fiscal Relations of the United Kingdom and Ireland. 
 
 remaining after allowance for the minimum necessary to maintain 
 a population upon a given standard of living (which minimum he 
 fixes at £12 a head)—Mr. Giffen estimates at £800,000,000 
 (although he acknowledges that taxation could not even approach 
 
 that sum), and the taxable income of Ireland at £15,000,000_that 
 
 is, a proportion of about one to fifty. Taking the property on 
 which legacy and succession duties were paid for the three years 
 1881, 1882, and 1883—we find that in Great Britain it amounted 
 to £361,000,000, and in Ireland, for the same period, to £25,672,000, 
 being a proportion of one to thirteen. Mr. Gladstone, speaking in 
 the House or Commons on 23rd February last, said— 
 
 “ That, upon the whole, the property chargeable with these duties 
 affords the fairest test we can get. I will not say it is an accurate test. 
 I am sure it is a much better test than the income tax.”* 
 
 The income tax certainly is not a good economic test where there is 
 a minimum income untaxed, as there is in the United Kingdom. 
 Such a minimum is left untaxed for the purpose of protecting 
 persons having an income just sufficient to maintain them in a cer¬ 
 tain standard of comfort. It is evident that the entire population 
 may individually come very near that minimum (which is fixed at 
 £150 per annum in the United Kingdom), and accordingly be very 
 comfortably off as a community, while the property assessed to 
 the tax may be infinitesimal in amount. On the other hand, the 
 great majority of the people may be merely on the verge of subsist¬ 
 ence, while a limited section may have very large incomes, which 
 would give a very disproportionate test of the taxable capacity of 
 the community. From these figures we find that—with respect to 
 the United Kingdom, Ireland, in population is one-seventh; in area, 
 one-fourth; as regards income-tax assessment, one-twentieth ; with 
 respect to capital, one twenty-fourth \ to annual income, one- 
 seventeenth ; to taxable income, one-fiftieth ; and with respect to 
 property paying legacy and succession duties, one-fourteenth. 
 
 Present Irish Contribution to Imperial Revenue. 
 
 The total revenue from taxes in the United Kingdom for the 
 year 1884-5 was ^73)79^J 000 *t The gross total revenue was 
 £88,043,110, but of this over £14,000,000 was derived from the 
 Post Office, Telegraphs, etc., which, though a source of income to 
 
 * Times , 24th February, 1886. + See Eason’s Almanac , 1886, p. 124. 
 
Fiscal Relations of the United Kingdom and Ireland. 7 
 
 the State, cannot in any way be considered or enumerated among 
 the taxes of the country. Of this £74,000,000 (in round numbers) 
 derived from taxes, £7,370,000 was levied in Ireland, the average 
 for the previous five years being £7,500,000. This sum, however, 
 does not accurately express the sum contributed from the pockets 
 of the Irish tax-payers, as there is a considerable amount of duty 
 levied in Ireland on spirits and beer which are consumed in Eng¬ 
 land—the consumer, of course, paying the tax. On the other hand, 
 duties on tea, tobacco, and other commodities are levied in England, 
 though really paid by the Irish consumer. Accurate figures cannot 
 be obtained, which would enable us to state exactly how the relative 
 proportions stand. Mr. Fowler, the Financial Secretary to the 
 Treasury, speaking in the House of Commons on Sir Joseph 
 McKenna’s motion brought forward on February 23rd last, esti¬ 
 mated the Irish contributions at £6,522,000.* It is probable, 
 however, that this is considerably under the true figure, which may 
 be put down at an average of £7,000,000 per annum (Mr. Giffen 
 gives it as £6,700,000), or about one eleventh of the total. 
 
 The following table will illustrate these figures, and show the 
 proportion of taxation that Ireland should contribute to the imperial 
 exchequer according to the basis of contribution adopted. 
 
 Basis of Contribution. 
 
 Proportion of 
 Ireland to 
 Great Britain. 
 
 Sum due to Imperial 
 Exchequer from Ireland on 
 this basis of contribution. 
 
 Capital, 
 
 I -24th 
 
 £ 
 
 3,083,000 
 
 Income Tax, 
 
 I-20th 
 
 3,700,000 
 
 Annual Income, 
 Property paying Legacy 
 and Succession duty, 
 
 I-I7th 
 
 4,350,000 
 
 1-14th 
 
 5,300,000 
 
 Population, 
 
 1-7th 
 
 10 > 57 °) 000 
 
 Actual Contribution,... 
 
 1-nth 
 
 6,700,000 
 
 The total imperial revenue is, roughly speaking, expended on the 
 national debt, the army and navy, and the civil government. The 
 amount spent on the last of these classes of expenditure in the 
 financial years 1884-5, was £17,445,000, of which £3,794,000 or 
 two-ninths, was given to Ireland. Deducting this sum from what 
 Ireland contributes to the imperial exchequer, we get £3,000,000, 
 or £3,200,000 (to take round numbers where we cannot be exact), 
 
 Times , 24th February, 1886. 
 
8 Fiscal Relations of the United Kingdom and Ireland. 
 
 as the amount of Irish contributions to that part of the imperial 
 revenue which is spent on the army and navy and the national debt. 
 This <£3,200,000 in fact expresses the amount by which English 
 taxpayers are relieved in meeting the cost of the army and navy and 
 the national debt by the union with Ireland. It also measures the 
 amount which could be demanded from Ireland as a fair contribution 
 to British government expenses, if the exchequers of the two coun¬ 
 tries were again separated, and all costs of civil government in Ireland 
 borne by local taxation as opposed to imperial. 
 
 The Financial Aspect of State Purchase to Great Britain. 
 
 To turn now to the figures on which the proposal for state pur¬ 
 chase of the land of Ireland are based, we find that Mr. Giffen, tak¬ 
 ing the rent of Ireland as settled judicially at about £8,000,000, 
 estimates that £160,000,000 worth of consols at par, involving an 
 annual charge of £4,800,000, would be sufficient to buy out the land- 
 owners. These figures I shall consider more carefully further on; 
 but accepting them as they stand, we are now in a position to esti¬ 
 mate the effect on the taxation of both countries of such a scheme 
 of state purchase. 
 
 Great Britain would have to raise the money. Her credit would 
 be necessary • and considering her obligations to Ireland, it can hardly 
 be maintained that she has no such duty—more especially when we 
 remember the liberality with which she has guaranteed debts for 
 foreign nations, in no way having such claims on her as Ireland 
 undoubtedly has. And really in raising such a sum Great Britain 
 would be doing little more than guaranteeing the debt. It would 
 be easy to devise a scheme in the future for paying off the whole of 
 it out of the future increments of Irish land. In the meantime 
 the money would only be raised on British credit; but that does not 
 mean that Great Britain should pay the interest on it. Under the 
 altered circumstances arising out of this great measure of state pur¬ 
 chase, as I shall point out, England need not contribute anything 
 towards local administration in Ireland. She now contributes for this 
 purpose upwards of £3,800,000 per annum. How, let us suppose 
 that Ireland continues to pay the same contribution to Great Britain 
 as she does at present—a contribution wnich has been estimated at 
 £6,700,000, or £7,000,000 a year, and also taking for granted that 
 £3,000,000 or £3,200,000 (the sum fixed according to the calcula¬ 
 tions I have here given) measures the amount of Ireland’s proper con- 
 
Fiscal Relations of the United Kingdom and Ireland. 9 
 
 tribution to the imperial exchequer towards the expenses of the army 
 and navy and the national debt, we find that under the new system 
 Ireland would continue to contribute the sum of <£3,700,000 or 
 £4,000,000 a year to England, as interest on the loan required for 
 the buying out of the landowners. If the interest on the debt 
 came to £4,800,000, as Mr. Giffen estimates, and if it were necessary 
 to exactly balance the account, the Irish contrihution would of course 
 come to £800,000, or even £1,000,000 a year additional. That is, 
 Ireland by contributing a little more to the imperial exchequer than 
 she does at present, would pay to Great Britain her fair proportion 
 towards the imperial expenses of the army and navy and national 
 debt, and a sum of £4,800,000 in addition, as interest on the money 
 raised to settle the land question. 
 
 The Financial Aspect of State Purchase to Ireland. 
 
 This is a fair statement of how the matter stands so far as England 
 is concerned. Now let us turn to Ireland, and see how the change 
 would affect her. At present the imperial exchequer contributes 
 to the support of local administration and education in Ireland the 
 sum of £3,800,000 a year. Of this sum, about £2,400,000, or 64 
 per cent, of the whole, goes to justice and police, and about three- 
 quarters of a million to education.* 
 
 Under the proposed new system, Ireland would have to meet these 
 charges herself, and it may be urged that she would he so much the 
 worst off. It is of course evident that Ireland would have to give 
 up the help now given her for these services from the imperial 
 treasury. But would she be worse off 1 I would answer, No. In 
 fact she as well as Great Britain would, so far as taxation is concerned, 
 gain enormously. The largeness of the sum now required for justice 
 and police in Ireland is almost altogether due to the troubled relatious 
 between classes in the country; and with the disappearance of these 
 troubles that would inevitably follow a settlement of the land 
 question, there is no reason why a greater proportionate amount 
 would have to be expended on local administration in Ireland than 
 is now in Great Britain. The sum expended on justice and police 
 in Great Britain comes to about £4,650,000 per annum; and in 
 Ireland to over £2,400,000. Taking the respective populations of 
 the two countries—a fair basis of comparison in reckoning the cost 
 of this part of the government of the country—we find that they 
 
 Finance and Revenue Accounts, 1884-5 
 
10 Fiscal Relations of the United Kingdom and Ireland. 
 
 stand at the proportions of six to one. Therefore, if the cost of 
 justice and police were in proportion to the population of Ireland 
 what it is in Great Britain, the amount expended would be £750,000 
 instead of £2,400,000—that is, the country would gain £1,700,000 
 a year. Subtracting this sum from the £3,800,000, which the civil 
 service charges (including public works, education, and justice) now 
 amount to in Ireland, a little over £2,000,000 per annum would 
 meet the needs of Irish civil administration. To fairly appreciate 
 the result of the change in land ownership, on the lines here laid 
 down, it is necessary to consider the total income from taxation that 
 would in future he raised in Ireland, as well as the sources from 
 which it could he drawn. The purely local taxation, namely, that 
 required for poor relief and county purposes, would not vary in 
 amount from what it is at present, and would doubtless continue to 
 he drawn from the land. The total annual amount of local taxation 
 has been growing steadily for many years past. New duties of course 
 have been imposed, and new obligations incurred by the local 
 authorities, which account for this increase, irrespective of the dis¬ 
 tress prevailing in the country of late years. The total amount 
 raised from local taxes in the year 1866, was a little over £2,500,000. 
 In 1882 it had increased by just £1,000,000, and the following year 
 a rise of a quarter of a million took place—leaving, in 1884, the last 
 year for which we have returns, a total sum of £3,788,940 as con¬ 
 tributed by local taxation. Of this sum, £3,000,000, or 78 per cent, 
 was raised from rates on real property. The poor-rate came to 
 £1,160,416, and the grand jury cess to £1,211,139, being a total 
 of £2,371,555 raised from local taxes on land, excluding purely 
 town taxes. * 
 
 From these figures it will be seen that under the present system 
 the total annual sum raised from Irish taxation is about £10,500,000 
 (or £2 2s. per head). In arriving at this figure I estimate the Irish 
 contribution to the imperial exchequer at about £6,700,000 ; and 
 as regards local taxation, I take the figures for 1884, when the 
 amount raised was far above the average. Taking the local taxation 
 figures for 1882, and Mr. Fowler’s estimate of what is contributed 
 by Ireland to the imperial treasury, the total annual amount of Irish 
 taxation would be £10,000,000, or an average of £2 per head of the 
 population. The question now comes : What sum should be added 
 to Irish taxation if the state purchased the land ? This sum I have 
 
 * Local Taxation ( Ireland) Returns, 1885, p. 10. 
 
Fiscal Relations of the United Kingdom and Ireland. 11 
 
 estimated at £2,000,000, that being the amount now contributed 
 by the imperial exchequer for Irish administration, with the deduc¬ 
 tions I have indicated that might he made in the amount required 
 for the maintenance of justice and the police under the new system. 
 The total annual taxation of Ireland would therefore, in the future, 
 come to £12,000,000 or £12,500,000—an average of £2 10s. per 
 head of the population. This is about the amount contributed per 
 head by the population of the whole United Kingdom in 1881 for 
 imperial purposes alone. 
 
 Let us now consider the sources from which this additional burden 
 of £2,000,000 could be derived. If the state purchased the land of 
 Ireland, no serious politician could maintain that it should be handed 
 over as a present to the existing occupiers. Mr. Parnell and Mr. 
 Davitt have clearly stated that the land must be paid for. The 
 large non-agricultural population of Ireland would never consent to 
 endure an increase of taxation for the exclusive benefit of those who 
 happened to be tenant-farmers. Consequently the occupiers would 
 have to continue to pay a rent-charge for the land, which, however, 
 would be very different from the present rent, both in amount and 
 incidence. Mr. Giffen estimates that this rent-charge might be one 
 half or two-thirds of the present rent, and points out that provision 
 might be made for varying the annual amount according to the 
 average changes in the prices of agricultural produce—instituting, 
 in fact, a sliding scale.* The payment of the tithe in England is 
 now regulated in this way, being fixed each year by the average price 
 of corn for the preceding seven years. The rental on which Mr. 
 Giffen bases his proposal is an annual sum of £8,000,000. Accepting 
 this figure, a rent-charge of two-thirds would amount to nearly 
 £5,500,000.! Making full allowance for the cost of collecting this 
 rent charge and of managing the lands—a cost which should not 
 exceed 5 per cent, of the amount collected—there would remain a 
 sum of £5,200,000 for state purposes. Subtracting from this the 
 £2,000,000 required for civil government in Ireland, and which under 
 the new system should be contributed locally, and not from the 
 imperial exchequer as at present, and also the £800,000 required 
 to meet the interest to be paid annually to England on account of 
 the new debt—£4,000,000 of which I have already accounted for 
 
 * Statist, 9th January, 1886. 
 
 t Mr. Davitt estimates the amount of the future rent-charge at £5,000,000 
 a year.- Contemporary Review, April, 1886. 
 
12 Fiscal Relations of the United Kingdom and Ireland. 
 
 out of the taxes already imposed—we arrive at a sum of £2,400,000, 
 to be placed each year to the credit of the Irish government. This 
 large sum might he devoted partly to relieving general taxation, 
 partly to developing the resources of this country, and partly to 
 paying off the debt due to England. 
 
 Taking into account the interests of the other than agricultural 
 classes who have to hear part of the burden of taxation, and the fact 
 that there is no real ground for thinking that the present depression 
 in the prices of agricultural produce will be permanent, it would he 
 unfair to reduce the future rent-charge below two-thirds of the pre¬ 
 sent rent. This would bring into the Irish exchequer the sum of 
 £2,400,000, as a surplus over and above all charges for civil govern¬ 
 ment and payments to the imperial exchequer. This reasoning 
 would prove that the purchasing out of the landowners by the state 
 could be effected with fairness to all parties, and not alone without 
 injury to the empire, but of a certainty to its material advantage 
 and moral strengthening. By the apparent paradox of throwing the 
 burden of a heavy debt on the peoples of the two countries, a great 
 and long existent difficulty will be removed, and, moreover, removed 
 in a manner satisfactory to the people, and without any injustice to, 
 or confiscation of, the property of the present landowners. 
 
 Proper Future Contributions of Ireland to the Imperial Exchequer. 
 
 Although accepting my conclusions as correct deductions from the 
 facts and figures here relied on, it may be objected that I do not 
 fairly estimate the financial relations of the two countries, and that 
 I do not make adequate allowance for the proportion of the charges 
 caused by the National Debt, and the army and navy, which would 
 have to be contributed by Ireland on a severance of the exchequers. 
 
 I do not here intend to enter on a discussion of that much con¬ 
 troverted point—whether Ireland was fairly treated with respect to 
 the burden of debt imposed on her in the period between the Act of 
 Union and the amalgamation of the exchequers in 1817. The sub¬ 
 ject was fully gone into before a Select Committee of the House of 
 Commons in the years 1864 and 1865, and the evidence taken 
 published in two voluminous blue books. The committee, which 
 included among its members Sir Stafford Northcote, Sir Bobert Peel, 
 Mr. Lowe, the O’Conor Don, and Colonel Dunne, came to the con¬ 
 clusion that the provisions of the celebrated 7th Article of the 
 Treaty of Union (embodied in the Act of Union, 39 and 40 Geo. III. 
 
Fiscal Relations of the United Kingdom and Ireland. 13 
 
 c. 67) were substantially carried out in the amalgamation of the 
 exchequers, and the imposition of indiscriminate taxation on both 
 countries in the year 1817.* 
 
 The best and most satisfactory way of now deciding on the fair 
 contribution from Ireland to the interest on the National Debt is 
 to accept what has taken place, and calculate on the basis of relative 
 taxable ability what the proper proportions should be. 
 
 The estimated total expenditure on the National Debt for the finan¬ 
 cial year ending 31st March, 1886, was £28,036,917. Of this sum, 
 about £20,000,000 may be put down to interest on the funded debt, 
 and the remainder to terminable annuities and exchequer bills. Much 
 of this latter portion of the debt will expire within a comparatively 
 short period, and cannot be reckoned as a permanent charge. We 
 may now in a table, similar to one given before, show what would be 
 the proper proportion to be contributed by Ireland to the imperial 
 exchequer to meet the charge caused by the National Debt—distin¬ 
 guishing the amount calculated on the total debt (including termi¬ 
 nable annuities) from what it would be, taking into account the 
 funded debt only. 
 
 Table showing Ireland’s proper Contribution to the Annual Charge on 
 
 ACCOUNT OF THE NATIONAL DEBT, CALCULATED ACCORDING TO THE VARIOUS 
 BASES OF CONTRIBUTION. 
 
 Bases of Contribution. 
 
 Proportion 
 to Great 
 Britain. 
 
 Contribution to 
 interest on total debt 
 (= ^28,000,000.) 
 
 Contribution to 
 interest dn funded 
 debt only 
 (= ^20,000,000.) 
 
 Capital, 
 
 Income Tax, 
 
 Annual Income, ... 
 
 Legacy and Succession Duty, 
 Population, 
 
 Actual Contributions, 
 
 l-24th 
 
 1-20th 
 i-i7th 
 i-i4th 
 
 1-7th 
 i-nth 
 
 £ 
 
 1,166,000 
 
 1,400,000 
 
 1,647,000 
 
 2,000,000 
 
 4,000,000 
 
 2,545,000 
 
 £ 
 
 833,000 
 
 1,000,000 
 
 1,176,000 
 
 1,428,000 
 
 2,850,000 
 
 1,818,000 
 
 From these figures it will be seen that, whereas on the basis of 
 the present contribution of Ireland to the imperial exchequer, she 
 would pay £2,500,000 a year on the total debt; on the basis of 
 
 *The subject was also gone into by a special committee of the Municipal Council 
 of Dublin “On the state of the public accounts between Ireland and Great 
 Britain” in the year 1863 5 and in 1864 a paper criticising the report of this 
 committee was read before the Statistical and Social Inquiry Society of Ireland, 
 by Mr. Joseph J. Murphy. The discussion, however, seems a profitless one, 
 and has been to a great extent lost sight of for many years. 
 
14 Fiscal Relations of the United Kingdom and Ireland. 
 
 property paying legacy and succession duty, which Mr. Gladstone 
 considers such an admirable test, she would give only £2,000,000 ; 
 and on the basis of income tax assessment, about £1,500,000. 
 
 Mr. Giffen’s estimate is the same as this. He says:— 
 
 “ Its share of the imperial debt, proportioning that share to its re¬ 
 sources, would not cost more than £1,500,000 per annum.”* 
 
 Looking forward indeed to what the charge for the National Debt 
 will be after a few years (as foreshadowed in the fourth column of 
 the table), and of course in arranging the mutual liabilities of the 
 separate exchequers this should be done, we shall see that the proper 
 Irish contribution would be probably much under this sum. 
 
 Turning now to the charge for the army and navy, a proportion 
 of which would also have to be borne by Ireland, we shall find 
 that the figures are much the same as in the case of the National 
 Debt. For the year 1885 the total cost for the army and navy was 
 £30,632,402, although the estimate was only £26,992,370. The 
 average cost of the navy for many years past has been a little under 
 £11,000,000, and of the army for some years before 1879 between 
 £15,000,000 and £16,000,000 ; but since that year it has averaged 
 £19,000,000. We may accordingly take the cost of the army and 
 navy as between £28,000,000. and £30,000,000 a year, or a little 
 more than the charge on account of the National Debt. The third 
 column of the last table will accordingly give an approximate notion 
 of what the fair contributions from Ireland would be for this branch 
 of the imperial expenditure, according to the basis of contribution 
 adopted. Proportioned to resources it would be about £1,700,000 
 a year, which, added to £1,500,000 for the National Debt, would 
 give us a total of £3,200,000—the amount at which I have estimated 
 the liability of Ireland to the imperial exchequer for these two 
 classes of expenditure. This is the sum that at present is con¬ 
 tributed by Ireland to Great Britain, when we deduct the amount 
 paid back for the maintenance of civil government, and, as I have 
 said, measures the contribution that could be demanded on a sepa¬ 
 ration of the exchequers. 
 
 Amount required to buy out the Land. 
 
 To make an examination of this subject complete, it is necessary 
 to consider the amount that would actually be required to purchase 
 the land of Ireland from the present owners. In fact this is, from 
 
 Nineteenth Century , March, 1886. 
 
Fiscal Relations of the United Kingdom and Ireland. 15 
 
 the practical point of view, the most vitally important part of the 
 whole scheme. Mr. Giffen estimates the rental to be purchased at 
 £8,000,000. Archbishop Croke considers “that £6,000,000, or at 
 most £7,000,000 would come nearer to the mark.”* From the data 
 available it is a matter of extreme difficulty to arrive at any exact or 
 satisfactory estimate. We have no government returns giving the 
 rental of Ireland, or distinguishing how much of the agricultural land 
 is in the hands of the owners, or showing satisfactorily what pro¬ 
 portion of the land comprised in the poor-law valuation is town land, 
 as compared with agricultural—for it is not proposed as yet, as I take 
 it, that the total land of Ireland, including cities and towns, should 
 be bought up by the state. In seeking for light on this part of the 
 question, Mr. Giffen calculates that the rents fixed by the land courts 
 average about 10s. per acre, which on 15,000,000 acres of cultivated 
 land gives £7,500,000; and he allows the additional £500,000, re¬ 
 quired to bring his estimate up to £8,000,000, as rent on the remaining 
 5,000,000 acres of land in Ireland.t This method, however, is fal¬ 
 lacious, as no allowance is made for the very large portion of land un¬ 
 der lease, which cannot be brought into the land courts, and which, 
 as it comprises the richest soil in the country, would average much 
 more than 10s. an acre. 
 
 The only possible way of getting at the true rental of Ireland is 
 by examining the income tax returns, or by taking the total poor- 
 law valuation of the country, and estimating how much of the pro¬ 
 perty comprised in it is non-agricultural land, and consequently not 
 to be taken into account when dealing with the present problem. 
 Mr. Giffen takes the former test, but merely to discredit it, on the 
 ground that it has proved inaccurate all over the United Kingdom, 
 as “ nominal rents are maintained long after they have been practi¬ 
 cally reduced.” It is difficult to cenceive why this should be so on 
 anything of a large scale, as it is not in the nature of tax-payers to 
 develop their income more than they can avoid. The income tax 
 returns give the rental of Ireland at about £10,000,000. They do 
 not, however, enable us to distinguish how much of this comes from 
 land that would be comprised in a land purchase measure. 
 
 It remains for us to analyze the poor-law valuation returns, and 
 from them estimate the rental. The total valuation of Ireland, on 
 29th September, 1883, was £13,832,740. Subtracting from this the 
 
 * Letter to I he Statist, 6th February, 1886. 
 
 f Statist, 9th January, 1886. 
 
16 Fiscal Relations of the United Kingdom and Ireland. 
 
 valuation of the' towns and of the land in their immediate neigh¬ 
 bourhood, which could not be reckoned as agricultural, we get a 
 valuation of £ 10,000,000 (the exact figures are £10,188,000) for the 
 land of Ireland. This includes the land in the occupation of the 
 owners, the valuation of which may be roughly estimated at 
 £1,000,000. Mr. Giffen would also buy out owners in occupation ; 
 but at present these might be omitted, as their case does not touch 
 the demand for a new system of ownership now so urgent. This 
 would leave a valuation of £9,000,000, to be bought out. Further 
 deductions might be made for holdings at low rents for long terms, 
 and of which the tenants are to a certain extent part owners of the 
 freehold interest. This would probably bring the rental down to 
 the £8,000,000 arrived at by Mr. Giffen. If, however, all the agri¬ 
 cultural land were bought out by the state, as Mr. Giffen intended, 
 it would not be possible to bring the capitalized value of the rental 
 under £200,000,000, that is, taking the present judicial rents at 
 twenty years’ purchase.* 
 
 Even if this sum were adopted, the scheme could be carried out 
 by paying £2,000,000 of the surplus income from the Irish rent 
 charge—a surplus which I have estimated at £3,200,000, on a rental 
 of £8,000,000—as additional interest on the debt contracted for the 
 purpose. It must be carefully kept in view that the larger the 
 rental to be bought out by the state, the greater will be the rent 
 charge which will come into the Irish exchequer. Suppose that the 
 rental to be bought out comes to £10,000,000. The capitalized 
 value of this will be £200,000,000. Turning this sum into consols 
 at 3 per cent., the interest would come to £6,000,000 a year. This 
 amount, accordingly, Ireland would have to meet, instead of £4,800,000 
 which is Mr. Giffen’s estimate. But a rental of £10,000,000 will give 
 a rent charge (fixed at two thirds of the old rent) of £6,650,000 ; or, 
 deducting 5 per cent cost of collection, a total of £6,300,000. Taking 
 from this the £2,000,000 required for civil government under the new 
 system, and the additional £2,000,000 that would now be required 
 to meet the interest on the new debt, there would remain a sum of 
 
 * Comparing the judicial rents with the poor-law valuation, we find that up to 
 the close of 1885 a total old rental of £3,138,791 (of which the poor-law valua¬ 
 tion was £2,396,949) was judicially fixed at £2,568,494, or seven per cent, over 
 the valuation. This would give us for all the agricultural land of Ireland, a 
 judicial rental of £11,000,000—the capitalized value of which would be 
 
Fiscal Relations of the United Kingdom and Ireland. 17 
 
 £2,300,000 clear, to be used as the Irish government should think 
 proper. 
 
 It will he thus seen that a large rental to be purchased out, although 
 it may entail a larger obligation so far as the loan is concerned, will 
 at the same time yield a proportionally large income from which 
 the interest can be paid. 
 
 State Management of the Land. 
 
 With the land of Ireland the property of the state, it would have 
 to be farmed out under stringent regulations as to subletting and 
 subdivision. Most probably it would be found advisable to gradually 
 regulate and alter the size of the farms, so as to make their area 
 commensurate with their productiveness. At present thousands of 
 farms are, productively speaking, far too small, and are consequently 
 economically wasteful. 
 
 The new rent-charges should be fixed in accordance with a sliding 
 scale, which would to a great extent avoid troubles in collection 
 when bad seasons came, and which besides would secure to the 
 state its rightful share of the profits arising from high agricultural 
 prices. Part of the surplus that would come into the hands of the 
 Irish government could with advantage be devoted to the formation 
 of a fund for paying off the debt due to Great Britain ; and with 
 the advent of a new era of agricultural prosperity, there is no reason 
 why the reduction of that debt should not proceed rapidly, and 
 without the imposition of any additional burden on the taxpayers. 
 
 Risk to Great Britain of Repudiation of Interest. 
 
 From the considerations, calculations, and figures here given, it 
 is evident that if Ireland continued to pay to Great Britain practi¬ 
 cally the same amount as she contributes to the imperial exchequer 
 at present, England could lose nothing even if she raised a sum of 
 £160,000,000 or £200,000,000 to buy out the landowners. It is 
 sometimes objected that there is no guarantee but that the Irish ten¬ 
 ant-farmers may at some future time strike against the rent-charge 
 imposed on them, and leave England without the interest due on the 
 debt she had incurred. By the arrangement between the two coun¬ 
 tries that I have here indicated this danger could not arise. Great 
 Britain would not be dependent on the rent-charge out of Irish 
 land for the interest on her debt. That interest would be paid to 
 her out of the imperial taxes (customs, excise and stamp duties) ex- 
 
18 Fiscal Relations of the United Kingdom and Ireland. 
 
 actly in the same way as the Irish contribution to the army and navy, 
 and towards paying interest on the existing National Debt. The 
 rent-charge from the land would be the source out of which the purely < 
 
 Irish charges for home-government would come ; and when collected 
 as an Irish tax, and for the purposes of home expenditure, there 
 would be little risk of repudiation or non-payment. In fact as long 
 as excisable and customs-paying articles are consumed in the coun¬ 
 try, the imperial exchequer would be perfectly secure, and when these 
 sources fail it will be necessary to seek for a new way of paying old 
 debts, and of supplying an income to the state if possible for still 
 more vital purposes than the payment of interest on the new debt. 
 
 Benefits of State Purchase to Ireland. 
 
 I have also shown that under the new system resulting from state 
 purchase of the land, the Irish exchequer would not alone be perfectly 
 solvent, but would most probably have a surplus income of £2,500,000 
 a year, after paying the proper contribution to the imperial exchequer 
 for the maintenance of the army and navy, and towards interest on the 
 old and new debts, and after supporting justice, police, education, 
 and the other necessary charges of the Irish government. This sum 
 would be amply sufficient to cover any unforeseen expenses, and 
 leave a surplus over of a very large amount. All these results could 
 be brought about while fully and amply compensating the owners 
 of the land, and thus avoiding the creation of a feeling of injustice 
 and insecurity, that would, if engendered, without doubt, be enor¬ 
 mously injurious to the future of the country. 
 
 

 
 
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