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The subject of this article would be of interest and importance at any time, but it borrows special importance from the circumstances of the time we live in.
The air is full of rumours of impending change in the framework of Irish government. I have before now expressed my belief in the necessity for this change ; as, indeed, have Lord Lansdowne and Mr. Balfour; and to-day, among impartial and reasonable men, the only debatable questions are, the direction the change should take and the extent to which it should be carried. With these questions I am not at present concerned, although, in passing, I may observe that no responsible advocate of change proposes to repeal the Act of Union between Great Britain and Ireland, or to touch the supremacy of the Imperial Parliament over all things Irish. What I am now concerned with is the important effects which change of the kind contemplated must have upon the finances of Irish Government. Hitherto insufficient attention has been paid by the public at large to this aspect of the Irish question. But, as
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it is of supreme importance to the future of both Ireland and Great Britain, I propose to present a brief view of the finance of Irish government past and present, and to make suggestions for the future, in the hope that the country may be thereby assisted in forming a clear conception of the adequacy and justice of whatever financial proposals may be made in the coming Government of Ireland Bill.
Over the origin and early development of Irish finance I will pass lightly, but some reference to it is necessary. Up to the beginning of the eighteenth century, the finance of Irish government was restricted to the execution of the King's orders touching the disposal of what were called the hereditary revenues. These were derived from many sources, the most important being Crown rents arising from the religious and political confiscations in Tudor and Stuart days; quit rents which arose from the confiscations of 1641 ; hearth money, imposed in Charles the Second's time; and many customs duties and excise licences. Over those revenues, the Irish Parliament, which very seldom sat before the Revolution of 1688, exercised no control; and so long as the King was content with those hereditary revenues, he disposed of them as he chose. As a rule, the bulk of the money was spent in supporting a military force in Ireland, in paying pensions, which were not always given for public services, and in defraying what we now call the Civil Charges.
With the dawn of the eighteenth century new necessities arose. The hereditary revenues proved insufficient to meet the heavy charges falling on Ireland for the support of the great wars waged in the reigns of Queen Anne and her successors. Consequently, the Irish Parliament was appealed to for supplies. At the outset, those appeals met with loyal responses; but, as the years passed on, and the appeals were frequently renewed, criticism and opposition were aroused. The condition of Ireland at the time was wretched, and was yearly becoming worse. Her trade was being ruined by the Navigation Laws; her industry was being destroyed by Great Britain's commercial legislation; her capacity to bear taxation was being undermined in every direction. In those circumstances, the growing demands for fresh supplies were met in Ireland with more insistent claims for relief from the commercial and industrial restrictions which were impoverishing the country. The powerful arguments of Molyneux and the scathing pen of Swift came in aid of this Parliamentary opposition. In face of the common danger, the strife of centuries between Protestant and Catholic gradually waned, and, before George the Third had been long on the throne, had been replaced by a patriotic spirit which made the good of Ireland the common ambition of Irishmen without distinction of creed. The out
come of the prolonged struggle was the birth of a truly national spirit, the rise of the Irish Volunteers, the concession to Ireland in 1779 of freedom of trade and industry, and the establishment of the independent Irish Parliament in 1782.
With the establishment of that Parliament, the finance of Irish government, in the true sense, may be said to begin. The Parliament inherited a net annual revenue from all sources of 1,350.0001. (round figures), an annual expenditure of 1,567,0001., and a debt (funded and unfunded), of 1,917,0001. The expenditure was pretty evenly divided between the military charges and the pensions on the one hand, and ordinary civil charges on the other.
Potentially, Grattan's Parliament had, from the outset, effective control over Irish finance, but in the beginning its activities were directed more to carrying out administrative reforms and improving the material condition of the country, than to effecting a radical alteration in financial practice, whereby powerful interests would be antagonised. But while devoting its attention to the improvement of the country's condition, the Parliament specially concerned itself with the reduction of debt and establishment of equilibrium between income and expenditure.
This policy was successful. The deficits between expenditure and income were gradually reduced, until, in 1787, they disappeared altogether, while the public debt, which had increased by some 300,0001. between 1782 and 1787 owing to the public works that had been prosecuted, remained stationary from the latter year until 1792. So good was the state of public credit in Ireland that in 1788 the rate of interest on the National Debt was reduced from 6 to 5 per cent.
Meanwhile, the internal condition of the country was improved almost beyond recognition; order was well maintained; great public works were planned and carried into execution; commerce and industry were stimulated and assisted. Prosperity was rapidly growing. On this subject Lecky makes the following comments in his History of Ireland in the Eighteenth Century :
Of the causes of this prosperity two at least of the most important are sufficiently obvious, while others may give rise to dispute. The abolition of the trade restrictions by which Irish prosperity had been so long cramped and stunted was at once followed by a great increase in nearly every branch of commerce, and especially in the Irish trade with the West Indies, while the abolition of the more oppressive portions of the Penal Code brought back much capital which had been invested on the Continent, and caused Irish wealth, industry and energy to flow freely in Irish channels. A few years of external and internal peace, light taxes, and good national credit fcllowed, and enabled the country to profit largely by these new advantages. In the opinion, however, of the best Irish writers and politicians of the eighteenth century, very much was also due to the great impulse which
was given to agriculture by the corn bounties of 1784, and to the large Parliamentary grants for carrying out public works and for instituting and encouraging different forms of manufacture.
Of the corn bounties and the extreme importance that was attached to them I have already spoken. Whatever may be thought of them, there is at least, I think, no question that the great corn trade which had arisen in the last sixteen years of the century was an important element of Irish wealth, and it was mentioned in Parliament that about three years after the bounties on exportation had been granted the exports of corn already attained the annual value of 400,0001.
Large grants were also made for fisheries, canals, harbours, and other public works, and a system of bounties for encouraging particular manufactures was extensively pursued. This system is exceedingly alien to modern English notions ; but in judging it, we must remember that it prevailed—though on a proportionately smaller scale in England and in most other countries ; that in Ireland it was originally a partial counterpoise or compensation for many unjust and artificial restrictions imposed on the different branches of native industry; and also that it was pursued in a country where the elements of spontaneous energy were incomparably weaker than in England. In my opinion, English economical writers have usually generalised much too exclusively from the conditions of English life, and have greatly underrated the part which Government must play in industrial enterprises in countries where industry is still in its infancy, where capital has not been accumulated, and where industrial habits have not been formed.
These results were secured without a decrease in the contributions to Great Britain for common purposes-indeed, the contributions were substantially increased. Still they were not obligatory, but discretional; and in so far, they were regarded by the British Cabinet as precarious. It was Pitt's desire to secure from Ireland a fixed contribution or a contribution regulated by fixed principles to the general expenses of the Empire, and it was with this object in view, as well as with the object of establishing commercial reciprocity between the two countries, that he proposed to the Irish Government his twelve Commercial Propositions.
The Irish Parliament, though generally willing to meet Pitt's wishes, desired to restrict the obligatory contribution to those years in which expenditure did not exceed income. This limitation or condition was not acceptable at Westminster : and the further negotiations were so far influenced by the commercial jealousy with which Great Britain still regarded Ireland that they resulted in counter-proposals which were destructive of much of the commercial independence which had been conferred upon Ireland in 1779.
Therefore, the negotiations failed, and, undoubtedly, the failure confirmed in the minds of English statesmen the idea of a legislative Union, as the only way of assuring, beyond reach of doubt, that help from Ireland in the hour of England's need, and that control by England over Ireland's commerce, on which so much store was placed.