it was thought, would be
of a purely financial nature, including, possibly, heavy taxation of rich
people and relief of the indirect taxation of the poor. As a matter of
fact, Lloyd George, walking over from Downing Street to the House of
Commons on that Thursday afternoon, had three secrets in the leather
despatch-case he carried in his hand. One was the amount of money he was
going to raise, the second the sources from which he was going to obtain
it, and third the way in which the money was to be spent. Those of us
who saw him walking briskly across Palace Yard that afternoon in company
with Mr. Winston Churchill little thought that the small brown
despatch-case held plans which within three years were to alter vitally
the constitution of the United Kingdom as it had existed for eight
hundred years.

The national financial position was known in the morning before Lloyd
George made his speech. The amount needed for the current year by the
country for the army, navy, civil services, and social relief was
164,152,000 pounds. The revenue to be expected on the existing basis of
taxation was 148,390,000 pounds. A deficit of nearly 16,000,000 pounds
had, therefore, to be provided for. In addition, in the framing of this
as of other Budgets, regard was necessary to the automatic increase of
certain expenditures in coming years, increases which must be met by the
expanding capacity of schemes of revenue. (Though the Budget is an
annual affair, a good many of its features are necessarily continuing.)
After all this has been taken into account there must be remembered that
Lloyd George was planning still further expenditure. He had therefore to
get piles of money from somewhere or other and to make sure of it in
increasing volume as years went on.

I was present in the House of Commons to describe the Budget scene. The
Chamber was packed and was quivering with excitement when at four minutes
to three, during the preliminary business, Lloyd George, with a red
despatch-box in his hand, came into view from behind the Speaker's chair,
and passed with alert and nervous steps to the place on the Treasury
bench reserved for him between the Prime Minister, Mr. Asquith, and Mr.
Churchill. I can see Lloyd George now as he sat bolt-upright with one
knee crossed over the other, waiting for the moment when the chairman
should call on him. His face was pale and his eyes were rather dull. He
looked a little overwrought. He was