hall, in Belfast and elsewhere; and even when criticism of the mismanagement of the war began legitimately to raise its head in the early months of 1915, he used his influence, in the national interest, to repress or moderate its expression in Parliament. The tenor of his speeches was always to encourage Ministers in vigorous action on such questions, for instance, as the mobili- zation of industry, the treatment of aliens and the provision of munitions. In spite, therefore, of the vigour, or even violence, of his opposition before the war, it was comparatively easy for Mr. Asquith to approach him in May 1915 with a view to the formation of a National Coalition Government, and for him to respond with immediate acceptance. He believed, he subse- quently told a Unionist audience, that the Opposition could have turned out the Government at this time owing to the indignation about the shortage of munitions; but that would have meant an election and renewal of party feeling, and so have prevented the concentration of effort on the war. He brought seven of his colleagues into the Cabinet with him Lord Lansdowne, Mr. Balfour, Mr. Austen Chamberlain, Mr. Long, Lord Curzon, Lord Selborne and Sir Edward Carson and he himself took the Secretaryship of State for the Colonies. This was an office which, however congenial to Mr. Law with his colonial birth and his belief in Colonial Preference, did not bring him much into the limelight; and, influential as he was in the councils of the Ministry, in public he was content to play a comparatively subordinate part. To his loyalty to his chief, during their 18 months' association, Mr. Asquith himself sub- sequently bore emphatic testimony. While the controversy on compulsory military service was raging in the late autumn of 1915, he stated his own view to be that it was a better system than the voluntary system, but could only be gained at too high a price namely, the price of national unity. But when circumstances had overcome Mr. Asquith's antipathy to com- pulsion, Mr. Law took charge of the first military service bill in the House of Commons in Jan. 1916, and got it through all its stages with little difficulty. Another policy which he threw his energies into carrying out was the utilization of the economic forces of the Allies in the prosecution of the war. He promoted the Economic Conference in Paris in June 1916, and represented his country on the occasion, with Mr. Hughes, the Australian Premier, and Lord Crewe as his colleagues. He cordially con- curred in the cooperative and protective resolutions then adopted (see ENGLISH HISTORY) and joined Mr. Asquith in recommend- ing them to the House of Commons. He was a member of the War Committee of the Cabinet, but, like Mr. Lloyd George, he was far from satisfied with its organization and powers. It was natural, therefore, that he should be one of the four persons (the others being Mr. Lloyd George himself, Sir Edward Carson, and a Labour member) to whom Mr. Lloyd George, forcing the issue on Dec. i, asked Mr. Asquith to confide the absolute con- duct of the war. The crisis started by this demand produced, in the course of a few days, first Mr. Lloyd George's and then Mr. Asquith's resignation; and the King, adopting the ordinary constitutional course, sent on Dec. 5 for Mr. Bonar Law, who had become, through by-elections before the war, the leader of the largest single party in the House of Commons, and invited him to form an administration. He took the view that for the due prosecution of the war a Coalition Government was neces- sary. He could count on the assistance of Mr. Lloyd George, but Mr. Asquith and his principal Liberal colleagues refused their cooperation. Moreover, he felt that Mr. Lloyd George was the Minister whom the country demanded. So he resigned his commission, and on Mr. Lloyd George's acceptance of the premiership he promised full cooperation from his party.
In this second Coalition Mr. Law's position was much more considerable than in the first. His followers supplied the main body of its supporters; and he himself was rather the partner of his chief than his second-in-command. He became not merely Chancellor of the Exchequer, but also leader of the House of Commons, the Prime Minister concentrating his energies on the work of the War Cabinet (see ENGLISH HISTORY), the supreme directing authority, of which Cabinet Mr. Law was also a
member, though he was not expected to give regular attendance. At first the House of Commons was disposed to resent the appar- ent neglect with which it was treated by being asked to accept a deputy as its leader in place of a Prime Minister who was himself an M.P.; and cries for "Lloyd George " were raised when Mr. Law rose to play the leader's part in the debate on the Address in 1917. But the respect and, after a while, even the affection of the House were won by his business habits, his courtesy, his readiness to yield on non-essentials coupled with firmness in essentials, his exceptional clearness of head and of expression, and his extraordinary capacity for impromptu reply, without taking a note, at the close of a long debate on an intri- cate subject involving perhaps complicated figures.
It was his duty to obtain votes of credit from time to time from Parliament to carry on the war; and in the two years for which this Government was responsible the total voted amounted to more than 5,500,000,000, as compared with some 3,200,- 000,000 during the preceding period of two years and four months. But of course it must be remembered that not merely were munitions provided in 1917 and 1918 on an unprecedented scale, but that prices had risen enormously until, towards the close of the war, they were about double those of four years before. As Chancellor of the Exchequer Mr. Law had to find the money to meet this gigantic cost. This he did principally by means of two great loans, and by immense increases of taxation. The first loan was launched in Jan. 1917, and its basis was the issue of a 5% Government stock at 95; but there was also a 4% tax-compounded loan issued at par, and there were various provisions for conversion of certain previous issues. It brought in the enormous sum of 1,000,312,950 from no fewer than 5,289,000 subscribers; and Mr. Law justly hailed it both as an expression of the will of the people to win the war and also as evidence of the financial ability of the country to see it to a successful conclusion. The second loan, which was launched in Oct. of the same year, was of a new and ingenious character. The title of the issue was National War Bonds, and it combined the advantages of short-term securities, such as Exchequer bonds, and three sorts of longer-dated securities for seven and ten years. The interest was, as before, 5%, or 4% " tax-compounded," and elaborate and comprehensive rights of conversion were given. The amount was unlimited; all the securities were for continuous sale till further notice. Mr. Law explained that his hope was that the new War Bonds would lead to a steady and persistent flow of money loaned to the State without the financial dislocation inseparable from a great loan. His hope was justified. Interest was stimulated in the National War Bonds by various devices from time to time, such as the use of " tanks " as collecting boxes, the institution of a " Business Men's " week and a " Feed the Guns " week, and the transformation of Trafalgar Square in Oct. 1918 into a shell- shattered French village. From the time they were first put on sale till Jan. n 1919, 1,446,625,613 of these bonds were sold, and nearly 50,000,000 small post-office bonds in addition.
Mr. Law's first budget, that of 1917, coming as it did after the great increases which Mr. McKenna had made in taxation, only raised the excess profits tax from 60 to 80%, and increased the taxes on entertainments, tobacco and dogs. He had pro- posed to double the tobacco duty, but on reconsideration came to the conclusion that with this burden it would be impossible to keep down the price of the cheaper kinds, and so reduced the additional duty to one of 50%. His great taxing budget was that of 1918, introduced during the early stages of the great German offensive. This imposed additional taxation calculated to bring in no less than 114,000,000. Income-tax was raised from 55. to 6s.; farmers' tax was doubled; super-tax was increased; the stamp on cheques was to be 2d. instead of id.; beer and spirit duties were doubled, and tobacco and match and sugar duties raised; letters were to be i^d. and postcards id. He budgeted for a revenue of no less than 842,050,000. He explained that it was his duty to levy as much as the nation could bear; but at the same time he must not cripple industry. Besides the taxes already mentioned, all of which were carried
