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FEDERAL FINANCE. With the possible exception of the revenue derived from the Bank of England (178,000l.) the miscellaneous revenues should clearly be handed over to the national authorities. The revenue from Crown lands amounts to 465,000l., of which 408,000l. is derived from England, 24,000l. from Scotland, and 33,000l. from Ireland. On the whole it appears desirable to hand over the Crown lands to the national authority.

We are now in a position to discuss alternative proposals for adjusting the financial relations between the national and Imperial authorities. It is possible to proceed on one of two main principles. Under the first, the quota which each country is to contribute to Imperial expenditure would be fixed, the national authorities taking the whole balance of the revenue after their quota is paid into the Imperial exchequer. Under the second, each country would be given sufficient revenue to meet its estimated expenditure on civil government, together with such powers of taxation as would enable the national authority to meet any increase in such expenditure, the Imperial authority retaining in its own hands for Imperial purposes all revenues not handed over to the national authority, as well as the power to impose fresh taxation.

If the first principle were followed, the quota to be borne by each country would have to be fixed by Royal Commission.

If the second principle were adopted, the expenditure on civil government in the respective countries being ascertained, the national authorities would be given sufficient revenue to meet their expenditure. Excluding civil government expenditure charged on the consolidated fund (over three-fourths of which 107