majority very largely to the discontent of the masses with the Unionist Ministry and to their consequent revolt, we may take it for granted that in the early sessions of this parliament something will be done by the Government towards conciliating and placating the workers, and that many opportunities will arise for the development of a true Labor policy and for furthering the economic interests of those who work.

Therefore, we here set out what, upon the several questions hereunder mentioned, should be the policy of Labor as contrasted with the policy of historic and traditional Liberalism.

Financial Policy.

For the last ten years the Liberal cry has been Retrenchment; to the Liberal expenditure is an evil thing; he views the growth of it with timid distaste. To the Liberal the best of all governments is that which spends the least money and imposes the fewest taxes. To the Socialist taxation is the chief means by which he may recover from the propertied classes some portion of the plunder which their economic strength and social position have enabled them to extract from the workers; to him national and municipal expenditure is the spending for common purposes of an ever-increasing proportion of the national income. The degree of civilization which a state has reached may almost be measured by the proportion of the national income which is spent collectively instead of individually. To the Socialist the best of governments is that which spends the most.

The only possible policy is deliberately to tax the rich; especially those who live on wealth which they do not earn; for thus and thus only can we reduce the burthen upon the poor.

A just Income Tax will be based upon two principles; it will be graduated according to ability to pay, and it will discriminate between incomes which cease with the death or illness of the earner and those

which remain, whether the owner live or die. The former is recognized already by our system of abatements and exemptions. Between the latter and a Liberal Chancellor of the Exchequer stand the traditions of Liberalism and Mr. Gladstone's ghost. It is our duty to insist that the professional man, the shopkeeper and the clerk shall be treated on a different footing from that of the landlord, the houseowner and the possessor of stock.

But in English politics successful ends must have moderate beginnings. Such a beginning might be an income tax of 2s. 6d. in the. The existing exemptions and abatements would be continued, and, in addition, a new abatement of one-third would be allowed on earned incomes and a further abatement of one-third on incomes not exceeding £5,000 a year. Thus, all who earned their incomes up to £5,000 a year would pay less income tax than at present-iod. instead of is Earned incomes above that would be taxed at Is. 8d.; unearned incomes above 5,000 a year would pay 2s. 6d. in the £; below £5,000 a year is. 8d.

It appears from the tables that persons earning over £5,000 a year and firms with over 10,000 a year represent one-fifth of the total of earned incomes, and we may assume that pretty much the same ratio holds good for incomes that are unearned. The estimate

is, at least, moderate, for it takes no account of incomes partly earned and partly unearned which would probably raise many above the £5,000 limit. A thorough examination of all income tax assessments is a needful preliminary to a satisfactory budget. Taking 1903-4, the last year for which there are complete figures, the adoption of our plan would have produced £47,600,000, a surplus of £16,850,000 over the produce of a shilling duty.

The Estate Duty might be handled upon similar principles. While we recognize that in a civilized state the millionaire is a harmful superfluity, we would touch gently savings intended for the support of the testator's wife and young family. At present the millionaire pays a poor eight per cent. ; but every "estate" is taxed except those which do not realize more than 100 net. We propose to relieve from Death Duties all estates up to £1,000; estates between £1,000 and £10,000 would pay, as they do now, three per cent., but a new abatement of £1,000 would be allowed. Estates between £10,000 and £25,000 would pay four per cent., as at present, but beyond that grade the rate would rise by increments of one per cent. instead of half per cent., and estates between £500,000 and £1,000,000 would be charged twelve and a half per cent. instead of seven and a half, and estates exceeding £1,000,000 fifteen per cent. instead of eight.

Taking the average of the last eight years, 56,506 estates instead of 14,786 would be relieved from the duty; on 15,651 the tax would be reduced; on 2,261 it would remain the same; and on 1,598 it would be increased. Where the old scale produced 12,700,000, or 4.8 per cent. on the capital taxed, the new scale would yield £15,800,000, or 6.7 per cent. on the capital taxed. The gain to the nation is thus £3,100,000.

These suggestions are doubtless confiscatory; and that is why they should recommend themselves to a Labor Party. But even so, the confiscation is of a timorous and a slow-footed sort. The average British millionaire dies worth about £2,770,000, on which the death duty would be £415,500, leaving the agreeable nest-egg of £2,254,500 to the heirs. Even if we assume that the inheritance passes to one person only, so as to be subject to the highest rate of duty, it would not be until five more lives had passed that it would be reduced to a pitiful million. The most patient Labor Party might not unreasonably demand something a trifle more revolutionary than this.

The Excise licences give us a fruitful source of further income. The sale of intoxicating liquor is exceedingly profitable. It is a State-created monopoly, and the monopolists make the most meagre returns for their privileges. A brewer pays only £1 per annum for his licence; a distiller 10 10s. ; a publican from £4 10s. to £60 according to his rental. Brewers and distillers might be charged on a graduated scale, and retailers might be dealt with on the high

licence system. If the brewers', distillers' and publicans' licences. worked out at an average of £100 each, and the licences of beer sellers and dealers in spirits, beer and wine increased in some proportional ratio, we could allow for a diminution of one quarter in the number of publicans, one half in the number of beer houses, and still gain more than £7,500,000 from the ten chief licences.

The relations between local and national finance need remodelling, and the first step is the withdrawal of all the existing grants in aid. It is imperative that something should be done towards equalizing local burthens out of national funds, since that is the most convenient method of obtaining contributions for local purposes from personal property, and a district is not rich or poor on account of its own merits or faults but by virtue of the place it takes in the national structure. Grants in aid should not be given merely to ease the burthen on particular classes, but should, like the education grant, be made to encourage efficiency. Poor relief, education, police, and main roads are the chief local services of a national character, and a substantial part of each should be paid for by the nation. Half the cost of poor relief, education, police, and one fourth of the expenses of the highway authorities would absorb some £20,000,000 against the £16,000,000 more or less contributed to-day.

This additional grant of £4,000,000 would be a substantial aid to the ratepayers of the poorer districts, but it would leave the problem of local taxation still unsolved. Those who finally gain most by local expenditure, the freeholders of the district, contribute nothing directly to the local expenses. To lay them under contribution by a direct rate must be our first aim.

But not only has a town a claim on the unearned increment created by its citizens and annexed by the landowners, the nation also has a claim of its own. A town owes to the nation a rent based on its advantages of position, its mineral resources, etc., an advantage. which can be roughly measured by the rate of increase of its site value. A further rate on site values graduated in the same way as the rate for local purposes, should be levied at the same time and paid over to the Exchequer.

To sum up. We propose to raise an additional £16,850,000 from the income tax, 3,100,000 from death duties, £7,500,000 from licences, a total of 27,450,000. The coal and sugar duties are presumably marked for destruction, thereby reducing taxation by £8,000,000. At present a worker's family of five pays in tea, sugar, beer and tobacco duties, even if we allow the man an inadequate two ounces of tobacco a week and a ridiculous half-pint of beer a day, a sum very nearly equivalent to 8d. in the on a wage of 30s. a week. To reduce the tea duty again to 4d. is to make no extravagant concession, and would absorb about £2,300,000. Additional grants to local authorities would take another £4,000,000. Thus we should be left with 13,150,000 besides what would be raised by the tax on ground landlords: so the obstacle in the path of old age pensions disappears.

The Liberals state vaguely that they propose to "do something for the unemployed." That will not do for the Socialists. Our method is prevention rather than cure. The only way to prevent an able-bodied person from becoming unemployed is to provide him with work. Everyone should have a legal right to an opportunity of earning his living in the society in which he has been born; but no one should or could have the right to ask that he shall be employed at the particular job which suits his peculiar taste and temperament. Each of us must be prepared to do the work which society wants doing, or take the consequences of refusal. There is here no question of "making work," or of "finding work," or of recalling to earth those ghosts of national workshops which so appal the soul of Mr. John Morley. There are slums to clear, houses to build, land to redeem, and waste places to afforest. To get this work done there is need of armies of workers, engaged not temporarily to tide over a depression, but permanently to complete an undertaking, the amount undertaken swelling or diminishing each year according to the state of trade. These armies must consist, not of society's failures paid less than a fair wage, but of men capable of earning a high one. Other workers would then naturally be drawn into municipal manufacturing departments to provide their fellows with all the needs of decent life, and thus not only should we provide employment for numbers to whom the ordinary relief works can bring no relief, but we should strike a deadly blow at the sweater. To guard, by these methods, against unemployment is the beginning of the national organization of labor and of the end of the capitalist system.

The first step towards the realization of this proposal is the provision of funds to enable the municipalities to carry them out, and by proper administrative provisions to ensure that the administrators neither muddle nor neglect their business.

The Decay of Rural England.

The disease is patent and admitted. It is on the question of the proper remedies that opinions diverge.

A survey of the conditions in Hungary, Germany, Denmark, and other countries where agriculture progresses rather than decays, convinces us that the real remedy for empty fields, decayed villages, French eggs and Danish butter is the organization of scientific and technical education and of co-operation in production and sale. The Danish, Hungarian and German farmers have seen for themselves the value of education and co-operation, and throughout their countries they have made a remarkable net-work of agricultural colleges and travelling lecturers and village classes for technical instruction. They have founded agricultural banks for the lending of capital and cooperative supply associations for the purchasing of machinery and manures. They have their own insurance companies. They make their butter and cheese at co-operative factories fitted with the most modern apparatus: they combine for the sale of eggs and market

garden produce. The English farmer does none of these things. He pays his rent (when he can) and goes under.

We propose that the salvation of rural England shall be the work of the nation, for it is national danger and national calamity that we have to face. We propose that every county council shall have a committee to organize agriculture, just as it now has a committee to organize education. There is already a statutory Small Holdings Committee of each county council. This committee should be developed until it becomes a body authorized to do all that the councillors and their co-opted experts deem needful for the furtherance of agricultural prosperity. The committee must be empowered to buy land to be leased to small holders with perfect security of tenure; and to advance stock_and implements on reasonable terms and on reasonable security. Further, it must lead the way by starting dairy factories for the production of butter and cheese and the handling of milk. In unison with the Education Committee it must organize lectures and classes on agricultural subjects throughout the area. Overseeing and stimulating the county councils must come the Board of Agriculture, giving grants in aid when necessary, issuing a man damus compelling a lethargic council to action.

The Drink Trade.

On few questions are the Liberal and Socialist policies so sharply divergent as they are on that of the supply of alcoholic liquors.

In the grey dawn of the early Victorian era a Benthamite Radical, with the prejudices current among his kind, against State control, and in favor of direct popular action, devised the scheme of local veto; the scheme by which the licences to sell liquor might be refused by a referendum vote of the electors. The shade of that Benthamite Radical still dominates the Liberal party.

Since early Victorian days political science has made some small advance, and it is now recognized that the inhabitants of a district especially debauched by drink are not the best judges as to whether facilities for drinking are or are not excessive. Wherever drunkenness is rampant local veto is a dead letter, and experiments without number have shown that, compared with the way in which publichouses are managed, the mere number of them is of small account. But the grandmothers of the temperance party stick to their ancient nostrum. The researches and warnings of Rowntree and Sherwell go for naught. The cry is still for local veto, not because its advocates can prove that it would make for sobriety, but because they are too old or too slow witted to be pervious to any more modern idea.

People get drunk at public-houses, they say... shut up the public-houses and people can't get drunk. Unfortunately, all experience shows that in populous places immediately the lawful sale of drink is stopped an unlawful sale begins.

Trust the people, they cry, and the cry has a pleasantly democratic sound. But when it is suggested that if the people may be trusted to forbid the sale of drink, they may be trusted also to manage it, the ardent democrats demur. They will not trust the people.