unreformed and vicious land system.  In no great country in the new world or the old have the working people yet secured the double advantage of free trade and free land together, by which I mean a commercial system and a land system from which, so far as possible, all forms of monopoly have been rigorously excluded.  Sixty years ago our system of national taxation was effectively reformed, and immense and undisputed advantages accrued therefrom to all classes, the richest as well as the poorest.  The system of local taxation to-day is just as vicious and wasteful, just as great an impediment to enterprise and progress, just as harsh a burden upon the poor, as the thousand taxes and Corn Law sliding scales of the “hungry ’forties.”  We are met in an hour of tremendous opportunity.  “You who shall liberate the land,” said Mr. Cobden, “will do more for your country than we have done in the liberation of its commerce.”

You can follow the same general principle of distinguishing between earned and unearned increment through the Government’s treatment of the income-tax.  There is all the difference in the world between the income which a man makes from month to month or from year to year by his continued exertion, which may stop at any moment, and will certainly stop, if he is incapacitated, and the income which is derived from the profits of accumulated capital, which is a continuing income irrespective of the exertion of its owner.  Nobody wants to penalise or to stigmatise income derived from dividends, rent, or interest; for accumulated capital, apart from monopoly, represents the exercise of thrift and prudence, qualities which are only less valuable to the community than actual service and labour.  But the great difference between the two classes of income remains.  We are all sensible of it, and we think that that great difference should be recognised when the necessary burdens of the State have to be divided and shared between all classes.

The application of this principle of differentiation of income-tax has enabled the present Government sensibly to lighten the burden of the great majority of income-tax payers.  Under the late Conservative Government about 1,100,000 income-tax payers paid income-tax at the statutory rate of a shilling in the pound.  Mr. Asquith, the Prime Minister, when Chancellor of the Exchequer, reduced the income-tax in respect of earned incomes under L2,000 a year from a shilling to ninepence, and it is calculated that 750,000 income-tax payers—­that is to say, nearly three-quarters of the whole number of income-tax payers—­who formerly paid at the shilling rate have obtained an actual relief from taxation to the extent of nearly L1,200,000 a year in the aggregate.  The present Chancellor of the Exchequer in the present Budget has added to this abatement a further relief—­a very sensible relief, I venture to think you will consider it—­on account of each child of parents who possess under L500 a year, and that concession involved a further abatement and relief equal to L600,000 a year.  That statement is founded on high authority, for it figured in one of the Budget proposals of Mr. Pitt, and it is to-day recognised by the law of Prussia.