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budget introduced on April 4, estimated the net revenue at 502,- 000,000 and the expenditure at 1,825,000,000; so that there was a deficit of 1,323,000,000, to be met by borrowing, which would mean a new charge, for interest at 5 % and sinking fund at i %, of 79,000,000. He tackled this unflinchingly; raised income tax to a maximum of 53. in the pound, thus gaining 43,500,000; increased the excess profits tax from 50 to 60%; imposed an amusement tax on tickets for all public shows and a railway ticket tax on all journeys costing more than pd. ; he also took toll of matches, table-waters, cider and perry. Then he increased very seriously the duties on motor-cars, motorcycles, sugar, cocoa, coffee and chicory. Colossal as the budget was, involving 300,000,000 of new taxation since the war began, it passed through Parliament substantially unchanged.

Mr. Asquith took advantage of Mr. Hughes's presence this spring to repeat an experiment which he had successfully

made in the previous year when Sir Robert Borden, Cabinet the Canadian Prime Minister, was in England; ""ominion namely to invite the visiting Dominion minister to Premiers, sit in Cabinet, and share in the imperial decisions on

the war. He also continued his efforts to draw the Allies into closer cooperation by attending a war conference in Paris on March 27, and then proceeding to Italy to consoli- date relations with the new Ally.

Shortly after his return, he had to deal with a sudden out- break of rebellion at Easter in Ireland, principally in Dublin.

The rebellion was put down by military force under

^ T J onn Maxwell; the ringleaders were tried by

court-martial and shot; Casement, who had landed from Germany, was put on his trial for treason and hanged; the Chief Secretary, Mr. Birrell, and the Lord Lieutenant re- signed; a commission was appointed to inquire into the causes of the insurrection (and, it may be added, reported that it was mainly attributable to weakness in administration); and in the middle of May Mr. Asquith went himself to Dublin with a view to arriving at some new arrangement for the future government of Ireland. On his return he told the House of Commons that he had been deeply impressed by the breakdown of the existing machinery, and by the universality of the Irish feeling that there was now a unique opportunity for a new departure. Accordingly he announced that ministers had unanimously commissioned their colleague, Mr. Lloyd George, to endeavour to effect a settlement. The announcement was favourably received, as

Mr. Lloyd George's good-will to Ireland was well Mr. Lloyd known, and his reputation for getting work done had ?rih le ' S enormously increased since the outbreak of war. It Negotia- was believed, moreover, that a Coalition would have a tioas. better chance than a party Government to arrange

agreed terms. At first the negotiations appeared to promise well. Mr. Redmond told a meeting of the Irish Parlia- mentary party in Dublin on June 10 that Mr. Lloyd George's proposals were: (i) to bring the Home Rule Act into immediate operation; (2) to introduce at once an Amending bill, to cover only the period of the war and a short interval after it, providing during this period for the retention of the Irish members at West- minster in full number, and of the six Ulster counties under the imperial Government. Sir Edward Carson persuaded the Union- ist Ulstermen to accept these terms, and Mr. Devlin obtained a vote in their support from the Nationalists of the six counties. But the growing body of Sinn Feiners regarded the negotiations with great disfavour; and, on the other hand, the Southern Unionists protested, and many Unionists in Parliament and the Cabinet objected, Lord Selborne resigning his office in con- sequence. Lord Lansdowne explained that the Government were not bound by Mr. Lloyd George's consultations, and certain modifications were introduced in order to meet Unionist objections. The main alteration was that the Government could not agree to retain the Irish members at Westminster in undiminished numbers after the next election. The Government also proposed during the transition to appoint an Irish minister responsible to Parliament, having a military officer associated with him with forces sufficient to maintain

order. These modifications were the reason, or the excuse, for Mr. Redmond to raise the cries of " coercion " and " breach of faith," and to withdraw from the negotiation; though Mr. Lloyd George, the Government negotiator, protested that in his opinion the terms were such as the Irish members might well accept. The negotiations having broken down, Mr. Duke, a Unionist, was appointed Chief Secretary, and a month later, Lord Wim- borne, a Liberal, was reappointed Lord Lieutenant.

The summer of 1916 was marked by the sudden death of the great soldier upon whose experience and power of organization the majority of Britons at the outset of war placed their special reliance. Lord Kitchener, on a mission Death of to Russia, left the north of Scotland on June 5 in Kitchener. H.M.S. " Hampshire," which that evening struck a mine to the east of the Orkneys and sank. There were only 12 survivors, and he was not among them. His services, in the early days of war, were of incalculable value. If, sub- sequently, he had failed in some degree to adapt himself to his environment, nevertheless his disappearance was felt all over the world as a heavy blow to the Allied cause. Its effect was minimized, so far as might be, by the appoint- ment to the Secretaryship of State in his place of the civilian minister who had shown the greatest energy and resource in the war, Mr. Lloyd George. Lord Derby, who had rendered exemplary services to recruiting, became Under- secretary for War. At the same time, Sir Edward Grey, the trusted Foreign Secretary, whose eyesight had been failing, went to the House of Lords as Visct. Grey ofr Fallodon. He retained the Foreign Secretaryship, and had an efficient representative in the House of Commons in Lord Robert Cecil, at once his Under-Secretary and Minister of Blockade.

Public opinion in England was disturbed this summer over many subsidiary matters relating to the war the ill-treatment of British civilian prisoners at Ruhleben, and of British military prisoners in German camps, and the slight attention which the German Government paid to the reports of American diplomatic visitors and to British diplomatic representations; the in- creasing shortness of food, the difficulties of agricul- turists whose labourers had been taken under the Military Service Acts and who had not been able as yet to obtain an ade- quate supply of capable women in their place, and the nearing prospect of rations; the judicial murder by the Germans of Capt. Fryatt, of the S.S. " Brussels," for endeavouring to ram a German submarine; and what loomed largest in Parliamentary debate the failure of British arms in two exclusively British theatres of action, the Dardanelles and Mesopotamia. The remaining troops had all been brought safely away from the Gallipoli peninsula in the winter of 1915-6, but the causes of the failure of a promising venture were still hotly disputed; in Mesopotamia, Gen. Towns- hend had been forced to retire before reaching Bagdad, had been besieged in Kut, and had finally, on April 29, been driven to surrender with all his force to the Turks. The Government re- sisted inquiry until public opinion proved too strong for them; but at the end of July two Royal Commissions were appointed; that for Mesopotamia under the chairmanship of Lord George Hamilton, a former Secretary of State for India; that for the Dardanelles under the chairmanship of Lord Cromer, the most venerated of British empire-builders.

Stirring events happened this spring and summer in the war nearer home. The German fleet ventured out into the North Sea, and, after being held and fought for several hours by Sir David Beatty and his battle-cruiser squadron, was brought to action by Sir John Jellicoe and the main fleet off the coast of Jutland, was severely handled, and only got back to harbour under cover of night. But British losses were serious, and many doubted whether the most had been made of a unique opportunity. Then the determined German attempt to take Verdun was resisted most heroically by the French in-a fight lasting many weeks; and on July i the British army, partly with the view of relieving the pressure on its Allies, began a furious assault on the Somme, which, though successful

Darda- nelles and Mesopota- mia Com- missions.