Bad as the results must be, we are inexorably driven to some form of Contract finance directly we relinquish its anti-type, financial independence.  There is very little practical difference between the Gladstonian and later plans.  We may be drawn along the downward path either by considerations of revenue, or considerations of expenditure, or by both combined.  To retain Imperial control of Customs and Excise, while crediting the Irish proceeds to Ireland, is in itself equivalent to making three-quarters of Irish tax revenue take the form of an annual money grant fixed by Great Britain.  If Englishmen also want to retain control over Irish Police, and Irishmen are short-sighted enough to desire Imperial control, as a corollary of Imperial payment, of Old Age Pensions, National Insurance, or Land Purchase, there at once are four millions, or more than a third of present Irish expenditure, withheld from Irish authority.  To cover the remaining seven millions by a Contract allowance, instead of going through the pretence of allotting items of revenue and of deducting a contribution to Imperial services, is a step which is only too likely to commend itself to harassed statesmen.  But it would not be Home Rule.

This is not a matter of speculation, but of experience.  As long ago as 1818, in the case of Canada, we discarded as vicious the old doctrine that a dependency ought not to be allowed to provide for the whole cost of government out of its own taxes, for fear that its Legislature would control policy.  If we are going to remove features which make Ireland resemble a Crown Colony now, do not let us import others which recall the ancient fallacies of a century ago.

There remains to be considered the important question of loans, and to that I shall devote a separate chapter.

FOOTNOTES: 

[136] Hansard, July 21 and 25, 1893.

[137] Both Bills provided for part payment of the cost of Irish Police from Imperial funds.

[138] Return No. 220.

[139] See p. 234.

[140] See p. 234.

[141] I need scarcely point out that the newly-created Provinces of the Dominion of Canada are exceptions to this rule.  But there is no analogy with Ireland.  Such Provinces are carved out of newly settled public territory and given local government.

[142] See pp. 244-245, and 277-278.

[143] Until two years ago even the remaining one-fourth, added to other small items of Commonwealth revenue, was too large for the expenditure, and a part of it was returned annually to the States.

[144] The other principal source of revenue is from Posts, but that is almost exactly balanced by expenditure, so that it barely affects the amount of the repayment to the States.

[145] These figures are taken from the Official Year-Book of the Commonwealth of Australia, No. 3, 1901-1909.

[146] It must be understood that the law requiring three-quarters of the Commonwealth revenue from Customs and Excise to be returned to the States does not imply that each State should have three-quarters of its contribution returned, but that the total amount returned should be at least three-quarters.