THE REVENUE—THE BUDGET.

HC Deb 08 May 1843 vol 68 cc1391-460

House in a Committee of Ways and Means.

The Chancellor of the Exchequer

rose and said: As the resolution which I am about to place in your hands may be almost considered a matter of form (being a vote of the surplus ways and means of former years to make good the supplies to be granted in the present year), it will probably not give rise to any discussion or opposition; but I am happy to avail myself of this opportunity, in conformity with what may be considered the expressed wish of the House, to enter into the annual financial statement which is usually made at this period of the Session. The statement which I shall have to make to the House is one of a mixed character. The committee is aware that at the commencement of the Session, it was stated in her Majesty's Speech that there had been a diminished receipt in many of the sources of the revenue, and that that diminished receipt had arisen from that depressed state of the manufacturing interest, which all so sincerely deplore. At the same time, her Majesty expressed a confident hope—which 1 can, I think, con firm—that the revenue of the country would be ultimately found adequate to meet every exigency of the public service. In discharging the duty now imposed on me, I shall pursue the course usual on similar occasions, of dealing first with the expenditure and income of the year which has elapsed, and then call on the House to examine in detail the estimates we have made as to the income and expenditure of the present year. First, with respect to the income and expenditure of the year which has just passed. Before I enter into the details of that, I may be permitted to call the attention of the committee to the circumstances in which this House and the Government were placed at the commencement of the last. Session. We had then to deal with a state of things not of ordinary occurrence. It happened that for a succession of years, from various circumstances, the revenue raised was found insufficient to meet the annual expenditure, and there was a strongly marked feeling in the public mind that it was neither creditable to the character nor safe for this country to allow such a deficiency to continue, and that an exertion must necessarily be made to get rid of so great an evil. Concurrently with that feeling on the part of the public as to the necessity of equalising the revenue and the expenditure, the attention of the public had been for some time called to the various import duties imposed by the Customs laws of this country; and a general impression prevailed that our system of raising a revenue on articles imported required revision, and that great advantage would result to the public in general and to the manufacturing interest in particular, by judiciously dealing with a large portion of those articles which, under the existing tariff were subject to high duties. The task then devolved upon the Government of combining those two essential objects—of raising sufficient from the country to make its income adequate to its expenditure, and, at the same time, of dealing with a large mass of duties producing a considerable revenue, for the purpose of affording relief to the labouring interests of the country. Whatever opinion may have been entertained at the time, or whatever opinion may now be entertained, either as to the extent or the character of the measures introduced by my right hon. Friend for increasing the revenue of the country, or whatever opinion may be entertained respecting particular duties in the tariff which my right hon. Friend under took to reform, I think there is an unanimous feeling in the House—I am sure there is an almost unanimous feeling in the country—that the course then adopted by the Government was adopted upon a right principle, and was one of which the public were in the main, disposed to approve. Most important consequences followed from dealing with those two questions at the same time. It was obvious that, inasmuch as revenue depended on the duties which we attempted to regulate or to repeal, an immediate sacrifice must be incurred to the extent to which the repeal or reduction of duties was carried. It might be that the decrease would be made up at a future period by an augmented produce; but the immediate result was a defalcation of revenue, commencing from the very moment at which the repeal or alteration was effected; nay, more, commencing from the period at which the alteration was mentioned, because the very mention of an intention to reduce the duty upon certain imported commodities necessarily affected the trade in those particular commodities, and produced an immediate reduction of revenue. But it must be equally obvious to every one, that when the House imposed that new duty on property which was considered necessary in order to repair the deficiency in the revenue, that new duty though charged from the commencement of the financial year, could not be made available in the Exchequer until the collection took place; and every one conversant with taxes of that kind must know that, though charged on the year, they are not collected for six or eight months from the time at which the imposition commences. The country was, therefore, placed in this situation, that by the repeal of the duties on certain articles, an immediate defalcation of revenue ensued, whilst the imposition of a property-tax, immediate in its operation, yielded a supply to our finances only in six or nine months from its commencement. And during this period, also, it must be borne in mind that the expenses of the country were proceeding on the scale which Parliament thought it necessary to adopt, and, consequently, the diminished receipt on the one hand, and the non-collection of substituted duties on the other, necessarily caused an arrear. That arrear undoubtedly produced considerable inconvenience, but it was the inevitable consequence of the change which was effected by the measures of last Session. It would have been possible, indeed, to have guarded against the effect to which. I allude. You might either have postponed the remission of duties on your imports to that period at which you might have hoped to receive the duty collected from a tax on property; or you might have taken another course, and at once have raised, by way of loan, the sum which was necessary to supply the deficiency of income during the interval to which I have alluded. To the first of these steps there were manifold objections. If you were to announce the repeal of a duty, and postpone the operation for a considerable period, you would aggravate the evil which your measure was intended to remedy, and prolong that stagnation of trade to which your measure was intended to afford relief. I think it was, therefore, wise not to hare entertained a proposition which had for its object an immediate revenue at the expense of general inconvenience. The inconvenience would be doubly aggravated by the public having to deal in the meanwhile in a contracted market, because dealers would not import until the reduced duties should come into operation, and prices would thus be unduly raised. I think, therefore, my right hon. Friend wisely decided, and the House wisely adopted his decision, to make the repeal of duties as immediate as possible. But it may be said, we could have guarded against this inconvenience by borrowing a sum necessary to supply the deficiency. To that, also, there appeared to me to be strong objections. To augment the enormous burthen of debt, unless under circumstances of the greatest necessity, is a course which I for one would never recommend to Parliament. And I think that necessity did not exist, there being sufficient ground to expect that the measures then adopted, though they created a temporary deficiency during the interval between the abolition of one set of taxes and the collection of another, would secure, within a reasonable period, such a revenue as would cover the deficiency occasioned by the course which the House adopted. Having thus given this preliminary explanation, I shall now proceed to state to the House, the estimate of the revenue made by my right hon., Friend during the last year, and the actual amount of revenue which has been raised during that period. It will be remembered that that estimate of the revenue was made before the close of the last financial year, consequently, at a period when such an estimate could not be made with so much probability of correctness as at a subsequent period. To begin with the revenue derived from Customs. The amount of Customs previous to the reduction of duties of last year was 22,500,000l.; but, after making the reductions which were effected by the alteration in the tariff to the amount of 1,140,000l., and adding to the revenue what was expected to be raised by the duty on coals, namely, 140,000l., the ultimate produce of the Customs duties upon which my right hon. Friend had calculated for the year was 21,500,000l. It appears from papers laid on the Table of the House, that in that expectation my right hon. Friend has been disappointed—the actual produce of the Customs duties for the year, stated in round numbers, was only 20,500,000l. Now on looking to the detail of these duties, which has been laid on the Table, the House will have observed that the Customs revenue was only 20,750,000l., and that no less than 500,000l. of the deficiency arises upon the article of wine alone. The circumstances that have influenced that particular commodity must be familiar to the House. They have been stated on former occasions—they have been fully discussed, and every one must know, that, having arisen from the delay on the part of Portugal in expressing a definite opinion as to the negotiations which were on foot between the two countries, it is not attributable to any want of consumption on the part of this country, but to that uncertainty as to the duty ultimately to be imposed, which has prevented those who deal in that particular commodity from paying the duty upon the stock they have in hand. Another article in which there has been a considerable reduction is foreign imported spirits. The reduction on this article is 200,000l. This arises in some degree from a similar cause to that which I have attributed the decrease in the wine duties; but it must be attributed also, in a considerable degree, to the improved habits prevailing among the lower and middling classes of society. These improved habits have produced not merely a reduction in the consumption of foreign imported spirits, but have equally reduced the consumption of home-made spirits in every part of the country, and give a reason to hope that, this failure does not arise from any deficiency in the means of those who usually purchase, but from a growing distaste, to the consumption of ardent spirits. In many other branches of Customs revenue there has been a reduction in the produce of the duties. But before I advert to these, it will be right that I should inform the House what has been the effect of those alterations in the duties on various articles which were made during the course of the last Session. The articles on which my right hon. Friend reduced the import duties were timber, coffee, cocoa, and a variety of smaller articles. On timber he estimated that the loss would amount to 600,000l. Now, on reference to the paper before me, it will be seen that the amount of the duty received on the importation of timber during the present year is less than the amount received last year by 676,000l., thus slightly exceeding the loss estimated by my right hon. Friend. But in making this state- ment, it will be satisfactory to the House to know, that in the last quarter of the financial year, that is to say, between the months of January and April, when the effect of the first reduction had somewhat subsided, the loss, instead of bearing its proportion to the whole amount of 676,000l. of loss for the year, was only 87,000l., showing that the consumption has increased, and the timber trade revived considerably during the last three months. The same result is apparent in a still greater degree with regard to the article of coffee, an article, the consumption of which has always been found to increase with every reduction of duty. It was estimated that the loss upon coffee would amount to 170,000l.; and if I had had to make the statement on the 1st of January, I should have had to have stated that the loss of revenue upon this article had exceeded the estimate by 110,000l.; but 1 am happy to state, that between the 1st of January and the 1st of April, so great has been the increase in the importation of this article—so great has been the increase in its consumption—that the deficiency on coffee will not amount to 48,000l. With regard to the smaller articles on which reductions of duties were made, however, the loss estimated by my right hon. Friend has been rather exceeded. My right hon. Friend estimated that the total loss would amount to 270,000l., whereas it has actually amounted to 316,000l. I ought also to add, that the produce of the coal duties, estimated for the whole year at 140,000l., have produced, in the three quarters of which 1 have an account only, 79,600l., which would make the produce of the duty for the year about 100,000l. When I advert to the difference which has taken place between the amount estimated by my right hon. Friend and the loss which the revenue has sustained by minor articles, 1 ought to mention that, after the first statement of my right hon. Friend, when the calculation of loss was made, further reductions were made in the duties on many articles to a greater extent than was originally contemplated, and which, to a certain degree, would cover the difference between the actual and the estimated loss. But, taking the whole together, what has been under estimated on the one hand, and what has been over estimated on the other, reductions and alterations in the revenue approach as nearly as possible to the sum which my right hon. Friend mentioned. I was about to say, that besides the duties on wine and spirits, in which there has been a reduction of 700,000l., there are a variety of minor duties in which reductions hare taken place. But it is most satisfactory to observe, that with respect to all the great leading articles of consumption—articles which are most essential to the comfort and well-bring of the people—the duty for the year ending the 5th of April has more or less materially increased, and in the quarter from the 5th of January to the 5th of April, the increase is greater in proportion than that in the antecedent part of the year. This circumstance, I need not remind the House, is an indication of that improvement in the condition of certain parts of the country, which, I believe, in the course of what I have to stats to the House, I shall be enabled to establish to its entire satisfaction. It appears that in the Customs duties there has been a very large increase of the duty on tea. I believe the increase in the consumption of tea during the year has exceeded 1,000,000 of pounds. The consumption of ten has gone on increasing in about the same ratio for some years, and no reduction in the average rate of increase has taken place during the last year. There is an increase also in the quantity of coffee imported, though that increase does not make up the amount of revenue reduced. The falling-off in revenue caused by the reduction in the duty has not yet been wholly recovered. There is an increase in the revenue also from sugar, tobacco, pepper, and molasses, in all the principal articles which the House will consider important to the enjoyment of the people. I am sure the House will share in the satisfaction which I feel at finding this result. There are two other articles upon which a considerable increase of consumption has taken place, and the satisfaction which I feel on this account is derived, not from the direct enjoyment which the increase in the consumption of those commodities affords to the individuals who use them, but from the indication which it affords of the increased spirit which has infused itself into particular manufactures into which they eater. The article of olive oil, which is generally used in branches of many manufactures, has increased from 1,5001000 gallons to 8,800,000 gallons, indicating thereby that there is an increased demand for articles into the manufactures of which alive oil enters beyond that which prevailed in the previous year. Gum also is an article essential to many articles of manufacture, and the consumption of this commodity has increased from 24,000 cwt. to 37,000 cwt., and in each case the increase has been greater during the last quarter, namely, from January to April, than in any preceding quarter. I might in this way go through a number of similar returns, but I will confine myself to one which is of the greatest importance to the prosperity of the country—I mean the cotton manufacture. In the quantity of cotton taken for home consumption, there has been an increase in the year from 458,000,000 lbs. to 537,000,000 lbs. In the April quarter of the present year there has been taken into consumption about 1,625,000 lb. to be set against 1,100,0001b. during the same period of the antecedent year; and this month 896,0001b. have been taken out, which are to be set against 396,000 lb. for the same month last year. I adduce these statements to the House to show that, while there have been, with regard to the other articles I adverted to, grounds for believing that the comforts of the lower orders have increased, there has been also a degree of activity communicated to manufactures in those particular branches, with regard to which the articles I have mentioned are applicable, which must give satisfaction to every person who justly regards the cotton manufacture as essential to the prosperity of the country. I pass now from the Customs to the Excise. The Excise revenue was estimated by my right hon. Friend at a sum of 13,450,000l., to which must be added the estimate of 250,000l. on Irish spirits, making a total of 13,700,000l. At the close of the year, however, the revenue from the Excise had fallen far short of that at which my right hon. Friend had estimated it. The produce at the end of the year is 12,500,000l., leaving a deficiency in round numbers of 1,200,000l. upon exciseable articles. Of that deficiency, no less a sum than 880,000l. arises from the deficiency in the malt duty incident to the badness of the barley crop in the year preceding that, the proceeds of which is carried to the revenue of the year. For it must be remembered that, in dealing with the malt duties, we are dealing with the article grown six months before the payment of the duty into the revenue, and therefore it is not the harvest of last year of which we are now having an account, but the harvest of the antecedent year upon which all this payment had been made; and it is notorious that, during the year 1840, the harvest, particularly in regard to barley, was of a remarkably inferior description. Indeed there was very little of it fit for malting. I always, upon these occasions, find it to be my duty to state frankly and fairly the whole of the case as regards the revenue; and I cannot conceal that there has been a defalcation, more or less, in many of the material articles of Excise duty; there has been, indeed, with the exception of paper, of soap, and of three or four minor articles, in which there has been some increase, a decrease in the consumption of all exciseable commodities. The general complexion of the Excise has been such as to afford evidence of the distress among the manufacturing portion of the community to which I have already alluded, and which we all deplore. With respect to the article of Irish spirits, the House has before them documents to show that it has not produced the revenue which we had anticipated and that instead of having produced a revenue of 250,000l. in addition to that previously raised, there has not been an increase of more than 56000l. in the course of last year. I know that this has been attributed to the great increase of illicit distillation, which we have been told would follow from the increase of duty. Now, upon that point I may be allowed to express some doubts, and to state to the House the grounds of those doubts. I am ready to admit, what no man can deny—that any augmentation of the duty upon spirits must necessarily create an additional inducement to evade payment of the revenue. That proposition is undoubtedly undeniable, and I think it is equally undeniable also, whether it be high or low, persons will always be found who are willing to serve their pecuniary objects by evading the payment of duties. But the diminution in the quantity of Irish spirit distilled amounted to 1,200,000 gallons, and this was said to be only the natural result of the imposition of the 1s. duty in the past year. If the House, however, would look at the papers recently laid on the Table, they would find that a reduction of 1,200,000 gallons in the whole quantity of spirits produced in Ireland is not by any means a novel circumstance in connection with the fiscal history of that country in previous years, They would find, for instance, that the reduction in the antecedent years, when no increase of duty took place, was not only equal to, but greater than that which has taken place since the imposition of the duty in question; and they will, therefore, come to the conclusion that it is possible, that other causes independent of that duty may have influenced the reduction. In the year antecedent there was a reduction in the quantity of spirits of 2,400,000 gallons. But I shall be told that this reduction was owing to the duty of 4d. imposed by the right hon. Gentleman opposite. I will, however, go back to a year when neither the 4d. duty nor the 1s. duty were in operation. In the year 1840 there was a reduction in the quantity of spirits to the amount of 1,400,000 gallons. So that in the years where no new duty applied there was a diminution equal to, if not greater, than that which is now complained of, if, indeed, it can be considered a cause of complaint. And what is the statement which can be made with respect to the causes of this reduction? First, there is a growing spirit of temperance in Ireland which has led the people to abandon the consumption of ardent spirits, and any one conversant with the south and west of Ireland must be aware that that is a sufficient cause for a certain diminished consumption of spirits. Within the last year or two the temperance system had extended itself from the south and west of Ireland to the more northerly parts of the country, and I say that that circumstance alone, independently of any considerations arising out of the imposition of additional duties, is sufficient to account for the decreasing consumption of spirits. But what do we find in other parts of the United Kingdom, simultaneous with reduced consumption of spirits in Ireland? Do we find that, in those other parts, where there has been no increase of duties, there has been no diminution of the quantity of spirits consumed. Quite the reverse. I have already stated that the diminution in the quantity of foreign spirits consumed last year, caused a reduction in the duty of 200,000l., and I find that the consumption of British spirits has also decreased in the course of last year to the extent in England of 200,000 gallons, and in Scotland to above 400,000 gallons. This decrease in consumption observe, has been going on simultaneously with the decrease in the sister country, although in Great Britain the circumstance is quite independent of the imposition of an additional duty, to which some hon. Gentlemen attribute the same result in Ireland. At all events I find this satisfactory circumstance as regards Ireland, that whilst the revenue derived from spirits has decreased during the last year, in England, in Ireland, so far from decreasing it has exceeded the amount produced in the antecedent year by the sum which I have already stated. But some hon. Members perhaps say, "Look at the number of seizures and detections arising out of illicit distillation in Ireland, and say whether that is not the result of the imposition of the additional duty on spirits?" In reply I say that the papers upon the Table of the House show that it would be wrong to draw any such inference. They show that whenever corn happens to be cheap and turf abundant in Ireland—whatever may be the amount of duty on spirits—attempts are invariably made, under those circumstances of temptation, to defraud the revenue by working illicit stills. Now, in the course of last year, the two favourable circumstances to which I have adverted, namely, cheap corn and abundance of turf, have concurred to increase illicit distillation. There was a considerable reduction in the price of oats last year, and the season was particularly favourable to the collection of fuel. The price of oats fell from 8d. and l0d. to 6d. and 7d. a stone, thus presenting a great temptation to embark in illicit distillation. When hon. Gentlemen speak of the number of convictions for illicit distillation, they are apt to content themselves simply with contrasting the number in the present year with the number in the past year, overlooking the circumstance that in the one year corn was dear and in the other it was cheap. That circumstance alone would account for the small number of convictions in 1841 as compared with 1842. Let us carry the account a little further back, as is done by the papers on the Table of the House, and we shall find that cheapness of corn and abundance of fuel always exercise a powerful influence upon illicit distillation, and that the seasons which have produced them have also invariably been prolific of seizures and convictions for offences against the Excise laws. Referring to the returns before the House, I find that whereas in the last year there were only 8,266 bushels of malt seized; in 1837, there were 20,010; in 1838, 17,110, in 1839, 11,236; and that whilst no more than 285 illicit stills were seized last year, the number seized in 1836 was 956; in 1837 it was 590, and in 1838 it was 395. Various circumstances tend to show that the diminished revenue arises from the decreased consumption of spirits in Ireland, from the altered habits on the part of the people, rather than from the increase of illicit distillation. I have made careful inquiries as to the conduct of the people in Ireland at fairs, and other assemblages where large bodies of men are brought together; and the result of those inquiries has satisfied me that at no former period was there ever known to be such an absence of those evils which have invariably accompanied the increase of illicit distillation, namely, drunkenness, riots and disturbances. The reports which I have received up to the latest period, uniformly concur in stating that habits of sobriety are extending amongst the people of Ireland to an extraordinary degree. It is reported to me that on St. Patrick's Day not a single man was seen drunk in the streets in several large towns. That is tolerably strong evidence of the change which has taken place in the habits of the people of Ireland. Having these facts before me, I cannot admit, without further evidence that the imposition of the additional duty on Irish spirits has led to the existing increase of illicit distillation. I am aware that the new duty had to work under very unfavourable circumstances. It was prophesied from the first, that the diminished consumption would lead to the reduction of duty, and that prophecy was banded about in all the Irish papers, and prophecies of this nature have a tendency to fulfil themselves. After the new duty was imposed, its operation was suspended for some time, in consequence of a doubt which was raised in the other House of Parliament as to whether the measure was not an infraction of the terms of the treaty of union. The consequence of that suspension was, that the Scotch distillers poured into Ireland a greater quantity of spirits than they had at any antecedent period. I must mention another circumstance intimately connected with this branch of the subject. Two large distilleries in the north of Ireland were convicted of frauds on the revenue, and as whilst the Government was dealing with illicit distillation, it would not be just to allow those who practised frauds upon a large scale to escape the punishment which was visited upon minor offenders, the Excise considered it their duty to suspend altogether the working of those two distilleries, an act in which I cordially concurred. This necessarily tended to cause diminished production, and therefore diminished consumption of the article. To proceed now to the other items of my account. My right hon. Friend's estimate of the produce of the stamps was 7,190,000l., and the sum actually produced was as nearly as possible 7,000,000l. The taxes were estimated at 4,400,000l., and they produced 4,200,000l. Under the head of the post-office, there is an increase of 100,000l. beyond the estimate of my right hon. Friend. I wish I could say, that this is a real increase of revenue. A day has been fixed for a discussion on the subject of the post-office, and I think it will be advisable for me to defer explanation upon this point until that occasion. Avoiding controversial points, therefore, I shall for the present take this 100,000l. as increase of revenue, without slating what stands on the other side of the account. With respect to the Crown lands, in consequence of a measure passed last Session authorising an advance of money for certain purposes requisite to the comfort of the Sovereign the estimate falls short by 30,000l. On the whole, the ordinary revenue, which my right hon. Friend estimated at 47,640,000l., has actually produced in the course of the year 45,600,000l. odd, leaving a deficit of about 2,000,000l.; but at the same time there is a sum paid as ransom for the city of Canton, which has been brought to the consolidated fund, and amounts to 725,000l. This sum diminishes the actual deficit to 1,275,000l. I need not tell those who have paid any attention to the finances of the country, that a diminution in the great branches of the revenue to the extent of 2,000,000l. is not altogether unprecedented; that a favourable or unfavourable year will produce these fluctuations, and that they have frequently been higher than in the present year, having at one period amounted to 2,700,000l. On other occasions, the diminution of revenue has been considerably less, and it was with a view to meet these fluctuations in the revenue between these limits, that in former times Parliament fixed a sum of 3,000,000l. surplus, in order to cover any deficiency that might arise. But that system having been some time abandoned, we now find ourselves with a deficiency to the amount of 1,275,000l. To those who anticipated an improvement in the finances of the country, that statement, I fear, will be anything but satisfactory; but while, on the one hand, we should express re- gret at this state of things, on the other hand, Parliament ought to take credit to itself for having in the course of last Session made an effort to place the revenue of the country, by a property tax, upon a footing of greater equality with the expenditure, because by consenting, as Parliament did, and as the country has done, not only willingly but cheerfully, to the payment of that tax, we are relieved from the difficulty which, but for the imposition of that tax, we should have now to contend with—namely, a deficiency of revenue which would have amounted in point of fact, as compared with the expenditure, to nearly 5,000,000l. With respect to the Property-tax, it appears, by returns on the Table, that the amount, paid in up to the last return is 2,500,000l. It was Stated by my right hon. Friend, that the sum anticipated from it would be about 3,700,000l. The House, however, must not infer from this, that the produce falls short of the estimate made, or that the tax is not a resource which in the present circumstances of the country will be available for maintaining the public credit, and the national honour to an extent beyond that originally contemplated. The receipts from the Property-tax, with the exception of payments which arise from the funded property, have not exceeded one-half of the amount which, so far as calculations can be made, will be the ultimate produce of the tax. The House, perhaps, will be glad to hear a statement of the real amount which may be anticipated from the tax:—

	£
Under schedule A, comprising the charge on land and property of that description, the estimated produce of the tax is	2,233,000
Under schedule B, which is the charge on the tenantry of land, the estimated produce is	330,000
Under schedule C, Which includes the charge on funded properly, the estimated produce is	800,000
Under schedule D, containing the charge on profits of trade, the estimated produce is	1,496,000
Under schedule E, which comprises the charge on official incomes, the estimated produce is	248,000

This is the amount charged upon Great Britain alone. The total charge upon Scotland, as far as it can be at present made up, is 400,000l., making altogether an aggregate amount of 5,500,000l. chargeable as Property-tax, from which certain deductions are to be made for repayments and expenses of collection, which will leave an available sum of 5,100,000l. as applicable to the revenue of the year. But from the circumstance to which I adverted at the outset, the House must be aware, that one-half of such amount calculated as due on account of Property-tax, will only be in course of collection during the next three or four months; therefore the amount on account of Property-tax due, 2,450,000l., will be carried over to the next revenue accounts. In regard to the expenditure of the past year, it will not be thought necessary that I should go into corresponding details. My right hon. Friend estimated the expenditure at 51,138,000l., and upon that sum we have made a reduction of 222,000l., reducing therefore the deficiency at the end of the year to 2,422,000l, from which, however, must be deducted a further sum of 202,000l., which has been granted to pay off the holders of forged Ex-exchequer bills, and for which Parliament has since made provision. The deficiency, therefore, as it will actually appear in the accounts of the year, will exceed but by a little the sum of 2,100,000l., while the Property-tax due on the 5th of April last, and which will not be collected until the next half-year, will be 2,500,000l., part of this being the arrears of the former half-year. 2,000,000l., however, is the sum by which, up to the 5th of April, the payments of the country will have exceeded its revenue. I shall be now asked how I propose to deal with this 2,000,000l. deficiency of revenue? Whether I intend to raise the sum that may be necessary by way of loan to bring up this arrear, or whether I propose to leave it to be repaid out of the taxes that are coming in due course, until the amount of the expenditure and the income shall be equalised? Sir, my recommendation to the House is to pursue the latter course, and not to get rid of this deficiency, by immediately raising money to meet it. I would recommend them rather to leave it to be repaid by the surplus that may hereafter arise in the accruing revenues, until this arrear be reduced and the country relieved from it, without throwing any additional burthen on posterity. The House must be aware, that with regard to future expenditure, all we can do is to take especial care that the expenditure of the country shall be kept within its means, and that we have an effective surplus of revenue, in order that this sum, so in arrear at the commencement, may be gradually—possibly slowly —but certainly diminished, in proportion as we may be enabled to economise the expenditure. And this obligation imposes upon us the exercise of a proper economy in the administration of the finances in our hands and due care to the payments we have to make, and still more to be careful not to abandon the means of improvement to be derived from the various sources of revenue we have to deal with; and we must take care to maintain that superiority of revenue over expenditure which shall enable us to remove that deficiency which all must admit to be an incumbrance which those who have the administration of public affairs, and which Parliament, as controlling the Government of the country, will feel a strong obligation to remove while they endeavour to relieve, the pressure which now bears upon trade. I do not mean to say that the course I propose is without inconvenience. Every one must admit, that such an arrear to be paid out of the produce of the next or of succeeding years must be irksome to the Government, but the more irksome it is the greater obligation upon us to take care that the means are not wanting of repaying this charge from the balances as they come in; and the difficulty which it imposes upon the financial operations of the country, and especially upon the financial Minister, constitute a strong inducement on the part of those who are entrusted with the administration of affairs to maintain the income of the country over its expenditure, in order to meet that which, until discharged, is a heavy burthen. I have recommended this course when in opposition, and I recommend it to every financial minister as a question of prudence and policy, not to provide for such deficiencies by augmenting the permanent charge of the country, but trusting to those resources which, limited at first, will, I have no doubt, increase in the end, so as to enable the House to meet the deficiency. The next point to which I wish to advert is the estimate for the year upon which we are about to enter; but before I do that, I must draw the attention of the House to two heavy charges which will fall upon the Government in the course of the present year, which do not form part of the ordinary expenditure of the country. I allude to the charges which arose out of the proceedings which led to the war in China. The first is a payment on account of the opium seized in the year 1839—a payment to which the honour of the Government is pledged, and which amounts as nearly as I can calculate, but subject to correction hereafter, for I cannot speak positively, to the sum of 1,250,000l. There is a further payment to the amount of 800,000l., which is due to the East India Company for the expenses incurred by the operations in China up to the 30th of April in the present year. With respect to both these charges I propose altogether to exclude them from the calculation of the expenditure of the year, and for reasons which I think the House upon consideration will admit to be just. We have most successfully terminated the war with which these two payments are connected. We have terminated it by obtaining from the Chinese government a compensation for the expenses incurred in that war, and also compensation for the opium seized, on the seizure of which the war arose; and having these resources on which to count for these payments, I think it would not be just to those who are to bear the burthens now that I should call upon them, out of their annual income, to defray these two charges, when we are to receive by instalments the whole and more than the whole from the Chinese Government. It was my original intention to have made these sums payable in India out of the proceeds of the money derived from the Chinese government. But representations have been made to the Government, both by the East India Company and by the holders of opium, which have induced us to believe that it is essential to the welfare of the East Indies in the one case, and what was due to the opium claimants in the other, that the payments should be made in anticipation and in England. The course I propose then is, that we should raise the money here that will be necessary for the discharge of these claims, taking the money to be paid by China for the repayment of the advances now to be made. I will state the outline of the reasons which induce me to take that course. From the wars which have been carried on in India, and the difficulties to which these wars have subjected the finances of the East India Company, it became necessary for them last year to make new arrangements as to the remittances from this country to India, and to authorise the Indian authorities to draw on the treasury at home; and last year 800,000l. were in consequence paid to the East India Com- pany, and it is essential to the maintenance of those arrangements that the additional sum of 800,000l. should now be paid in this country. Therefore I have thought it better not to subject the finances of the Company to the inconveniences which a total change of arrangements would have produced, but to make provision for the payment here, to be replaced out of the funds which are due in India as they come in. Then with regard to the opium holders. They have only a claim in common with the public to any funds that might be derived from China. My opinion upon this point is as I have before expressed in this House. I have always maintained that the expense of the war was the first charge upon any moneys which might be obtained from the Chinese government, and that the opium claimants would be dealt with fairly and justly if they were paid out of the future instalments as they arrived; but, on a further examination of the question, finding that the parties interested in these claims are parties to whom the detention of what is due to them would be productive of very great inconvenience—finding also that those parties, in many instances, have intrusted their affairs to persons in this country, who are authorised to receive the money for them—feeling also that it would not be just to these to make them wait for the ultimate settlement for the payment of their claims, I have thought that it would be the best course, as far as they are concerned, as well as the cheapest for this country, to pay at once the sums which may be found to be due. These are the grounds on which I propose not to include a vote of 2,000,000l. on account of the opium claims and Indian expenses, but to raise the money here by a vote of credit to be replaced as resources are derived from China. The sum still to be derived from that country is 3,130,000l., or 15,000,000 of dollars, and the further claim on that fund, in addition to the 2,000,000l. now proposed, is 3,000,000 of dollars for the debts of the Hong merchants, which will be paid out of the next advances. The House, therefore, will see that, in making this advance, it has within its reach ample means of repayment, and it will be only lending its credit for the maintenance in one case of the financial credit of India, and in the other for a fair consideration of the claims of the holders of opium. Now, with respect to the regular expenditure of the country; and the estimates of the future income of the year, let me repeat what I have before stated as to the necessity I feel of not making too sanguine estimates. I have made them of a character which I think every one will admit to be free from exaggeration. I propose to take the Customs for the present year at 19,000,000l. They produced last year 20,750,000l. I take them at 19,000,000l. this year, because last year 1,378,000l. was derived from the duty on corn, and, anticipating as I do, that, with the blessing of Providence, we shall have a favourable season and an abundant harvest, I dare not in estimating the Customs take into account that amount of revenue as derived from the duty on corn, and I have. therefore, excluded the corn duty altogether from my estimate. It must be borne in mind, also, that for three months last year, there were certain reductions of duties which were not brought into full operation; and that in respect of the timber duties, the knowledge that they are to undergo a still further reduction in October next, has produced a considerable stagnation in that trade. There are also other articles of a minor character, which I will not stop to detail, that are in the same condition. I have thought it more prudent, therefore, to reduce the estimate of the Customs, as compared with that of last year, by 1,760,000l. and to take it at 19,000,000l. On a similar principle I have acted in making my estimate of the Excise, though the result in that case will be different. The estimate of the Excise revenue, as brought forward last year by my right hon. Friend (Sir R. Peel) was 12,500,000l. I take for the present year as the probable revenue from the Excise 13,000,000l. It has, on former occasions, been usual, when you have excluded the corn duties from the Customs, to bring in the amount of those duties to the Excise; and in ordinary cases, when the amount has not been so large as it was last year, it has been considered, generally speaking, as a general rule that any unusual increase in the excise upon malt is counterbalanced by a diminution in the revenue from the corn duties, and vice versâ. But the amount received last year is so large, that I am not willing to act upon that principle in an estimate in which I desire to keep quite within the mark; and having already estimated on malt 300,000l. more than was received upon that article last year, and estimating that either from the charge upon malt during the present year, or from the stimulus that will be given to the consumption of exciseable articles by the abundant harvest which, 1 trust, with the blessing of Providence, we may enjoy—I think, in adding 500,000l. to the estimate of the previous year as the probable produce of the Excise, 1 do not exceed those limits by which a reasonable man in making such a calculation would be bound. The article of stamps I reckon at 7,000,000l. the same amount as was derived from that source of revenue during the last year. From the assessed taxes I look for the sum of 4,200,000l. which I have estimated at 200,000l. less than the estimate of this source of income during the last year, not because I apprehend that there will be any reduction, but in order to allow for any diminution that may arise from the imposition of the Property-tax, and which diminution has not yet been felt in the collection of the assessed taxes. The Post-office I reckon at its present amount. [An hon. Member: How much is that?] 600,000l. The income arising from the crown lands, which last year was estimated at 117,500l. but being released during the present year from several charges to which this source of revenue was subjected, I have reckoned it during the ensuing year at 130,000l. To these sums must be added the amount arising from ordinary miscellanies, which during the last year was 250,000l., but which this year will be 1,120,000l., from a payment received under the Chinese treaty, and to all these accumulated amounts, there now only remains to be added the income and Property-tax, which I reckon at 5,100,000l. making in the whole a grand total of 50,150,000l. available for the purposes of the current year. Now, with respect to the other side of the account, I mean the expenditure of the country during the year now entered upon, that has been already pretty correctly laid before the House in the estimates, and I shall, therefore, merely go through the heads of those various estimates. The first estimate is for the army, amounting to the sum of 6,619,788l.The navy estimates, including contingencies, amount to 6,382.990l. The ordnance expenditure for the current year is estimated at 1,849,142l. and the miscellaneous estimates, which were originally calculated at 2,910,000l. will, in consequence of some unforeseen charges, be somewhat increased, I shall reckon them at 3,000,000l. there being included in that sum an amount of 26,000l. for Canada which has heretofore been made separately. The whole of the expenditure which I have enumerated above will be the gross sum of 17,851,920l., being a reduction on the charge of last year (a charge which amounted to the sum of 18,779,000l.) of 925,000l. This is the amount which has been estimated as required for the supply of the current year. With respect to the permanent charge, I may state that the interest of the funded debt amounts to 28,559,979l.; the interest upon unfunded exchequer bills to 618,755l.; and the charge on the Consolidated Fund during the ensuing year will amount to 2,357,000l, making in the whole 31,535,000l., showing a reduction in this branch of the expenditure as compared with that of last year of 257,275l., which, added to the saving effected in the estimates of supply, makes a grand total of 1,182,000l., the total sum saved to the country during the ensuing year. The result of these various statements of receipts and of expenditure now shortly and concisely laid before the House is, that the expenditure of the current year will be 49,387,645l., which as compared with the income calculated upon from the sources I have pointed out, of 50,150,000l., will leave a surplus of 763,000l. for the ensuing year, which as I have already intimated, will be applied to the liquidation of the arrears which exist at the commencement of the financial year. Under these circumstances however, I feel bound to admit, that this amount of surplus is not such as to be satisfactory to myself, neither can I hold it forth as such to the House of Commons or the country. It would have been far more agreeable to me if I had been able to frame the estimates of revenue on a more liberal scale, as well as to have offered to the House some assurances of my expectations that a larger income might fairly be looked for than that which I have felt it to be my duty to lay before the House as the probable receipt of the current year. But as that has not been in my power, I must confess I have been induced by the considerations to which I have already referred to postpone many improvements and to defer making many alterations in the duties from which the revenue is derived, which, had the times been more prosperous, and the revenue in a better state, I should not have delayed to carry into effect. The duties however to which I refer produce an amount of revenue too serious to permit me to relax them when the necessity for paying off the arrears accumulated is taken into consideration, and I am therefore compelled against my will to resist many applications to me for the remission or reduction of duties on various articles which otherwise I should have been glad to have listened to. I repeat, I have formed my estimates of the income for the current year in the conviction and belief that they will produce the sums I have calculated upon; and if there be any variation at the end of the year, it is my belief that the deviation from my estimates will be in the shape of an increase rather than diminution, for I perceive an indication of improvement in the industrial resources of this country, which, after the dark gloom of the last year's experience, allows me to hope for better things. Though this improvement may not be sudden in its effects—which indeed I rather incline to look upon as an advantage—still it does manifest itself in several of the staple manufactures of this country, and from those branches it will, I confidently expect, extend to others. I do not express these opinions because I have founded them on my own private views or upon the information which I have received from individuals, but I have gathered them from the general appearance of trade and from the increased consumption of various important articles connected with the commerce and manufactures of the country. I refer to the increased consumption within the last three months, and yet more within the last month—of different articles, which contribute in a great measure to the enjoyment and the comfort of the labouring classes of the people. I have shown to the House, that with respect to the great staple manufacture of cotton, an increase has taken place more rapidly than could have been anticipated, and I gather from this return alone an assurance that there has been an increased activity in every business connected with that branch of trade. I feel confident anticipation that the improvement is likely to continue. In making that statement I do not rely on my own individual opinion, far from it. I rely upon the general tone of documents in which I can safely confide, because they are documents not issued for the purpose of influencing opinion in favour of the Government or against it; neither are they the result of any attempts to influence or guide public opinion upon these points by speculative persons. But they ate documents issued by different brokers in this country, and circulated at home and abroad for the information of foreign and British correspondents. I find in those documents cheering and satisfactory assurances of an improvement in the commercial and manufacturing affairs of the country. If the House will allow me I shall read to them three of these papers, issued from three different parts of the country—from London, from Liverpool, and from Manchester—places in which the means must exist of forming correct estimates of the commercial situation of the country. I may add, that those parties have no interest in sending forth other than true accounts respecting the condition of trade. The first of the reports, extracts from which I shall read to the House, is dated London, May 1, and it was sent out with the Indian mail which left on that day, It is a circular addressed by the very respectable firm of Truman and Cooke to their mercantile friends and connections, and it thus portrays the state of the markets here:— The germs of improvement in the internal state of the country which were visible last month are in the course of very satisfactory development. Lancashire keeps the lead; its banking was never in a sounder state, and the prices of most goods yield a fair profit. In some descriptions, indeed, the returns are very advantageous. Another branch of manufacture which has been very much depressed has also been improved. Flax has fallen 25 per cent., it can be manufactured at a price which brings demand from Germany and other parts; and the Germans are now actually taking yarn from England instead of our importing it from them, so that notwithstanding the high tariffs of France and the United States, the linen trade is somewhat overcoming its depression. The accounts from the Scotch manufacturing districts, and from Nottingham and Derby, are also cheering, and Yorkshire shows some increased activity. In Leeds the woollen manufactures are now working full time, which they had not done for six months previously The next extract I shall read is from a circular issued by an eminent firm at Manchester. They state— The improved condition of the trade in this district, noticed in our last circular, has continued without interruption to the present time. Our goods market has assumed a tone and firmness indicating that confidence is established in the general improvement of the country, and in the more favourable position of most foreign markets; our mills are in full work, our manufacturers are obtaining remu- nerating prices, and although only a very partial advance has taken place in the wages of the operatives, still the very low price of food places them in a much better position than at any period since 1836. It is particularly gratifying to notice that the handloom weavers are now in full employ, at advanced wages, in some instances as much as 20 per cent. Indeed, activity pervades the whole manufacturing district of this country. The last extract with which I shall trouble the House is from a Liverpool cotton broker, who says— The extent of operations in our markets for goods and yarns during the past month, and the prices obtained, have been generally satisfactory and encouraging; so much so, indeed, as to have restored the districts of our cotton manufactures to our usual state of cheerful industry. Notwithstanding there is a considerable increase of production, still the reduced price of the raw material, and the cheapness of all kinds of food, have enabled us to overcome all foreign competition, and to find full employment for our operatives at remunerating wages, without having to pay any increased price for labour, except only in the case of our handloom weavers, who have received some small advance. Such being the case, coupled with the facts I have previously referred to of the increased consumption of raw material, and relying on what I have thus stated, I do not think that I take too sanguine a view of the present state of affairs, when I say that the cotton manufactures are improving, and that the woollen and linen manufactures are also in a state of improvement. At the same time it is necessary to state candidly to the House that there are other branches of trade which have been and still are labouring under great depression. But I know from experience, that when a great increase takes place in any one branch of manufacturing industry, it is not long before the industry increased in one quarter is found operating in another, and if that additional activity in the manufacturing districts, described in the extracts I have read to the House, shall continue, I think it impossible in the nature of things not to anticipate that a similar improvement will extend itself to other districts of the country. There are also other indications that the means of the people are increasing in the manufacturing districts of Lancashire. One of these indications, and an indication of no slight importance, is to be found in the returns made from the savings banks throughout that district, from which it appears that the payments into these banks of deposit within the present year, as compared with a corresponding period of last year, were as the sum of 500,000l. to 300,000l., and the amount drawn out within the same period had diminished in the same if not in a greater ratio. Another indication of a similar and of an equally cheerful nature may be adduced in order to show that the manufacturing classes are recovering from the depression under which they recently suffered. An inquiry into the pawnbrokers' establishments shows that the number of pledges which were in the hands of those several establishments, particularly of workmen's tools, have been reduced to a degree which shows that class of the community have been relieved to a great degree from their pressure under which they were labouring. From this corroboration of favourable circumstances, although I cannot hold out any brilliant expectation to the country—-although I should not be willing to raise exaggerated hopes, or to encourage the expectation that we are so rich that we may either incur additional expenditure, or hazard any large amount of the revenue—yet I say there is in the present state of the country a sufficient indication to warrant me in urging upon the House, that we are advancing to that period when, having undergone the severest trials of depression and diminished employment, we may look forward to the time when the means of the people being greater, and the revenue of the country consequently improved, it may be in the power of him who fills the situation which I have now the honour to hold to come forward boldly, fearlessly, and honestly, and without hazard make those improvements in the revenue system of the country which will contribute materially to advance its general interests, and to insure its permanent prosperity and welfare. The hon. Gentleman concluded by moving, That, towards making good the Supply granted to her Majesty, there be issued and applied to the service of the year 1843, the sum of 47,994l. 12s. 3d., being the surplus of Ways and Means granted for the service of preceding years.

Mr. F. T. Baring

wished to ask for some explanation relative to the repayment of the Chinese money. He saw that the right hon. Gentleman took credit for a sum of money received from China under the treaty of 1842, and while he proposed to repay 2,000,000l. out of the proceeds of the Chinese money, he does not apply any part of the 870,000l. now in course of payment to that purpose.

The Chancellor of the Exchequer

regretted that he had not been sufficiently explicit on that, and he was glad the right hon. Gentleman had called his attention to the omission. If he understood the right hon. Gentleman right, he wished for information as to the 870,000l., for which he (the Chancellor of the Exchequer) had taken credit. He proposed to advance upon the whole 1,250,000l. in payment of the claims of the East India Company, the advance by this country to be obtained afterwards from taxes. The hon. Gentleman asked why he did not apply the money to he received from China to the redemption of the demands made upon the country on behalf of China? He would tell the hon. Gentleman the reason which induced him to carry that amount to the public account. He (the Chancellor of the Exchequer) had stated on a former occasion last year, that he thought the first claim upon the China money was to pay the expense incurred in prosecuting the war, and bringing it to a successful close. And when he looked at the estimate of the sum already paid by this country in the prosecution of that war, he did say that it was not an unreasonable proposition that the money taken by this country from China should be carried to the public account, for the present, of that war, rather than it should be applied to pay the debts, which would be a claim upon the future proceeds of the China money. The expenses incurred in India amounted altogether to 2,180,000l., the expenses incurred by the Admiralty, over and above its ordinary expenditure, was 128,000l., and that of the Ordnance was 30,000l. above its ordinary expenditure. The sum paid on account of the China war was 4,280,000l., which would be diminished thus—money received from Canton, 700,000l.; money paid in England, 517,000l.; sums paid on account of the war in the course of the present year, 511,000/.; and the money received in the course of the present year pending the negotiations of the treaty, 870,000l., making a total of 2,598,000l., a sum which would considerably lessen the four millions paid to the expense of the war. He thought it no undue assumption to apply the first payment of 870,000l. to that purpose. The amount was divided into three million of dollars for the payment of the Hong Kong debts, twelve millions for the expenses of the war, and three millions for the payment of the opium debt.

Viscount Hawick

begged to ask the right hon. Gentleman, as he had said he could not afford to make a large reduction, if he meant to make no reduction at all in taxation.

The Chancellor of the Exchequer

said, no reduction whatever was in contemplation.

Mr. Labouchere

begged to ask, as he understood that there was to be no reduction of taxation, whether there was to be any alteration in the duties on sugar?

The Chancellor of the Exchequer

said that there was no such intention.

Mr. Hume

said, he had listened with great attention to the state men is made y the right hon. the Chancellor of the Exchequer, and although it seemed promising, he thought it would not be fund so favourable on examination. The House must bear in mind the statement made by the right hon. Baronet at the head of her Majesty's Government last year, and he thought the House would hardly consider it realised. In fact, it was a failure to the extent of 2,500,000l. He perfectly well recollected the view the right hon. Baronet took of the system of taxation pursued by the preceding Government. The right hon. Baronet censured the financial arrangements of that Government as injurious to the public welfare. The right hon. Baronet had blamed the late Government for allowing a deficiency to accumulate, and had estimated as the result of the property tax not only sufficient to prevent a deficiency, but an actual surplus. He thought it was but fair to say, that if the Chancellor of the Exchequer of 1841 had failed to make good his budget, the present Chancellor of the Exchequer had equally failed. He had ventured to tell the right hon. Baronet, as he had told the right hon. Gentleman the Member for Portsmouth, that the only mode of preventing a deficiency was to reduce the expenditure. There was not one of the items upon which the right hon. Baronet had formed an estimate in which his estimate had not entirely failed. The right hon. Baronet had anticipated a deficiency of 3,780,000l., but against that he placed 4,700,000l. to be derived from the Income-tax, the spirit duties, and the duties on coal. He was not sorry to find that in the article of coal the right hon. Baronet had been entirely mistaken, and though in Sunderland a vast mass of industry had been thrown out of employment, the amount received from the tax in that port was only 4,070l. The number of ships thrown out of employment was 1,608, while the right hon. Gentleman had got only a revenue from the whole tax of 74,000l. He could not but regret that the Chancellor of the Exchequer, seeing the evil which the tax had caused, and the little service it had rendered the revenue, had not taken measures to relieve the country from this duty on coals. Had that duty not been imposed, a much larger revenue would have been derived from the consumption of excisable articles, the consumption of which had by that very duty been prevented. He knew that he should be borne out in this statement by those who were connected with the trade. The right hon. Gentleman last year calculated there would be a surplus of 500,000l., but it appeared there was a deficiency of 2,420,000l. If to that he added the sum of 500,000l. received from China, and which was not calculated upon by the right hon. Gentleman, the real deficiency would be 3,000,000l. instead of 500,000l. surplus, which the right hon. Gentleman now expected. That state of things ought to cause the right hon. Baronet to reflect. He admitted that the low price of provisions had been a great relief to the hand-loom weavers and similar classes of men; but the same measures which were producing that relief, being in themselves partial, were producing great distress in the agricultural districts. This was a melancholy prospect enough, with such an amount of privation as now afflicted all classes in the country. But he thought the worst of the distress and suffering was yet to come; he did not see how employment was to be furnished for the industry of the country, unless the Government would use their power to establish a permanent system of free-trade. The right hon. Baronet, in order to carry out the principles on which he had announced to the House his intention to act, ought to double the Income-tax. If he did that he would do no more than what he promised the country to do—balance the income and the expenditure, and leave a surplus revenue in the Exchequer. He could not understand, therefore, why the Chancellor of the Exchequer should think himself entitled to address the House in a different tone from that which had been used last year. He could show that the deficiency was now greater than it had been in any past year, and instead of the finances being in a better state, alter two years of the right hon. Baronet's management, they were found to be in a worse condition than before. He was not, however, disposed to recommend any increase of the Income-tax; on the contrary, he regretted its existence extremely. He said that they ought to take off the Income-tax, and if those who supported the right hon. Baronet would join him in endeavouring to obtain a reduction of the extravagant and unnecessary expenditure on account of the army, navy, and other services, a saving of 4,000,000l. might be effected, which would enable them to do this. That would also give Government the power of reducing the duties on cotton, on wool, and other articles, which pressed heavily on our manufactures. The distress of the woollen manufacture was too well known, and every account from Yorkshire showed that it was spreading. The right hon. Baronet ought to relieve the commerce of the country from the duties levied on raw material, and free every branch of industry from the difficulties with which it was surrounded by an unwise and impolitic system, and which caused so much distress among the workmen. The manufacturers had been charged with insensibility to the sufferings of their labourers; but he believed that to be a libel on them, for he had heard of many who kept their factories at work without receiving any return whatever for their capital, in order to avoid turning off their workmen. The country was now placed in a very unsatisfactory situation. Although the Chancellor of the Exchequer had smoothed the matter as much as he could in his address to the House, and said the worst was now passed, he was sorry to say he was of a different opinion. The circulars to which the right hon. Gentleman had referred were not documents on which he could place reliance. Suppose a merchant had a large stock of an article, such as cotton, on hand, it was his interest to make the most favourable statements in order to get it off his hands. The right hon. Gentleman ought to look at the distress felt in every branch of industry. There was not one in which those who carried it on were not losing money. With the Income-tax, and with the sum which the right hon. Gentleman might obtain, by reducing the sugar duties, and making other judicious changes, he could not think the right hon. Gentleman was wise in the course he had adopted. Before another twelvemonth came round, country gentlemen's pockets would be empty if the present system continued, and they would be ready to press for measures of retrenchment. The country was now at peace with all the world, and why expend such enormous sums on naval and military armaments? The right hon. Gentleman had availed himself of the chance of a godsend in the China money coming in, in order to make up the deficiency. That was not a sound principle; the revenue ought to have been made equal to the expenditure, or the expenditure ought to have been cut down to the revenue. The result of the right hon. Gentleman's statement was, that we were to continue in the same state; there was to be no relief of taxation, and there was to be a continuance of the deficiency. The right hon. Gentleman had failed as much as the late Chancellor of the Exchequer (whom he expected to see rise, and claim some merit for having met the necessities of the country without an Income-tax), and there was no reason to congratulate him on the result of his experiments.

Mr. Baring

said, he did not mean to compare himself, as his hon. Friend seemed to expect, with the right hon. Gentleman opposite. So far as regarded all those calculations which the right hon. Gentleman, the First Lord of the Treasury, had made, he should be very far from being inclined to compare the actual result of them with that which had been anticipated, if it were a mere question of party mistakes in forming an estimate of the revenue of the country; but he did think, that it became a matter of some importance on the present occasion. It should be recollected, that last year we made some great alterations in our financial policy; a very heavy and onerous tax was imposed on the country, and the House was told by the right hon. Gentleman, that the advantages to be gained by the revision of taxation, which the imposition of the new tax enabled him to accomplish, would be of such a nature as to counterbalance any inconvenience resulting from the nature of the tax itself. This was the first time they had been enabled to see what those advantages would be; the day of proof was come, and it was now for them to see how their pudding eat. It would be necessary to go through some of the statements of the right hon. Gentleman, with the view of answering certain observations which bad fallen from him. First, of the Customs. The anticipation of the right hon. Gentleman, the First Lord of the Treasury, was, that he would receive 21,500,000l.; he bad received 20,754,000l., being a loss of 746,000l. He begged the House to recollect, that when the right hon. Gentleman stated his anticipation, he observed, at the same time, that he did not expect the great advantages of his change to occur in the first year; and therefore took a very moderate view of the immediate benefits to be derived. In comparing, therefore, the anticipation with the reality, they were comparing what was avowedly a sober view of the case with that which was now found to be fact. 746,000l. then, was the falling off; and that, as regarded revenue, was the real falling off; but if they looked to what regarded the consumption of other articles, he thought they would agree with him, that that was not the real falling off, because it would be recollected a large amount of the revenue bad been received from corn. Comparing the revenue derived from corn this year with that of last year there was a difference in favour of the revenue this year of between 700,000l. and 800,000l.; so that if you threw out corn, an article which every Chancellor of the Exchequer threw out of consideration, owing to the manner in which the duty was imposed, the difference was about 1,400,000l., and not 700,000l., as stated by the right hon. Gentleman. With respect to the deficiency of 400,000l., which the right hon. Gentleman stated to arise from the uncertainty which had prevailed respecting the negotiation with Portugal, that was an explanation undoubtedly; but he did not think a very satisfactory one, as regarded the conduct of the right hon. Gentleman opposite. For what was the fact? The right hon. Gentleman stated, that this falling-off of 400,000l. had not been the consequence of any diminished wish for consumption on the part of the purchasers—had not arisen from any distress of the day, or from any want of supply—not at all, for the consumers were anxious to consume, they were capable of paying, the supply was in the market —but from the uncertainty produced of the negotiations of the Government. During the whole year they had been kept in such a state, that every person was afraid to move a step, and the result was, that they had a deficiency of 400,000l. That loss had arisen from the way in which the negotiations had been conducted, and the right hon. Gentleman in stating that to the House had stated a fact which he (Mr. Baring) had heard from many merchants, who bad complained bitterly, that for the whole of last year the wine trade had laboured under great difficulty and depression, arising from the manner in which the negotiation had been prolonged. With respect to the Excise, the right hon. Gentleman had been very unfortunate in his calculations on this head. The loss on the Excise was about 1,200,000l., and the right hon. Gentleman stated, that a large part of that deficit was to be ascribed to the diminished duty on malt. That was quite true, as regarded a comparison of the produce of the Excise with that of last year; but compare it with the expectations held out by his right hon. Colleague, and he did not think the Chancellor of the Exchequer had a right to take that into his calculation, for the right hon. Baronet stated to the House that he expected a very bad malt year, and that, in consequence, he should take the Excise at a very low scale. Therefore, in addition to the very low scale at which the right hon. Baronet took the Excise, from the expectation of a very bad malt year, the result was, that the consumption had so fallen off that about 1,200,000l. had been lost to the Excise. On looking back, he found that the amount which the right hon. Baronet stated he expected from the Excise was lower than had been taken from the last four or five years, and this was done on the ground that he expected a very large deficiency to arise in the article of malt. In the Customs and Excise, therefore, the amount raised was 2,000,000l. below the expectations held out to them by the right hon. Gentleman. In stamps, also, there was a deficit; and also in the Crown lands; but that last the right hon. Gentleman had accounted for. The deficiencies in these cases were not so material, and he merely mentioned them in order to show that the deficiency of the revenue had not been confined to one or two branches, but had extended generally; in fact, it had affected all branches of the revenue except that derived from the Post-office. With regard to this last-mentioned revenue, however, the right hon. Gentleman seemed hardly to look on the surplus as bonâ fide. While looking at these deficiencies he could not help referring to an argument used against. him under similar circumstances on a former occaaion by the right hon. Baronet himself. In dealing with him and his calculations the right hon. Baronet called on the House to contrast his expectations with what had been ultimately realized, and had asked the House why these expectations had not been realized. The right hon. Gentleman then said, Look at what you expected, what you have received, and it will be seen that your expectations have not been realised; you have put 5 per cent, on consumption, and that has so diminished consumption, that the revenue has fallen off, and you have defeated your own object. [Sir R. Peel dissented.] He alluded to the right hon. Baronet's speech of last year, and he was quite sure that the right hon. Baronet had argued in this way. In the reports of the speech figures were introduced for the purpose of making out the argument. Now he (Mr. Baring) did not hold the argument, as an argument, in very high estimation, but such as it was it applied equally to the right hon. Baronet himself. He had imposed a direct tax on the country to a very heavy amount, on the strength of the advantage which reduced duties on articles of consumption would yield to the tax-payer. What had been the result? Why, that there was a deficit of 2,000,000l., the revenue being so much less than that very sober calculation of the right hon. Baronet as to the revenue to be expected—that although two millions and a half had been extracted from the people by the Income-tax, there had been a loss of nearly the same amount on the general branches of the revenue. On the whole, therefore, he was far from admitting that the alterations in the duties on articles of consumption had compensated for the direct taxation, nor did he admit that such an amount of direct taxation could be paid without great pressure on the lower classes, notwithstanding that they might be nominally exempt from it. The only branch of revenue, then, as he said, in which there had been no falling-off was that derived from the post-office. Into the question of the post-office revenue he was not now about to enter in detail, because the right hon. Gentleman had intimated that there would be a discussion upon it, but he would venture to suggest to the Government, that as they had got 100,000l. more than they expected from the post-office, they should allow the rural districts to have the full benefit of the new postage plan. That subject used always to be pressed upon them (the late Ministers) from the Opposition side, but since hon. Gentleman had changed their position in the House they had not been so urgent upon it. He hoped, however, now that they had got a little sum to spend out of the increased revenue of the post-office, that they would allow the rural districts to have some of the benefit of it. He left a minute when he quitted office, by which it was shown that the improvement could be effected for a small sum, and he did hope, that now a year and a half had elapsed, some step would be taken on the subject. Be the post-office plan bad or good, deal with it accordingly, but if the law was kept on the statute-book, let the poor have the full benefit of it. There was one point on which the right hon. Baronet had touched very gently, and with much delicacy, the subject of the amount of his balance. The Chancellor of the Exchequer had stated, that the deficit of the year arose from the whole amount of the year's taxes not having been paid up. But every body knew that certain taxes were not paid up within the year; and how came it that last year, in stating the expected surplus at 530,000l., no calculation whatever was made on account of this part of the taxes which could not be paid up. When the right hon. Baronet last year stated his balance at 530,000l., he surely must have known as well as now, that part of the Income-tax could not be paid up within the year. No explanation had been given of this mistake. Instead of a surplus of 500,000l. there was a deficiency on the face of the balance-sheet of 2,500,000l., and even this account included the large sum received on account of the Chinese expedition. That sum had come in to Ministers as a kind of Godsend, and had enabled them to make their balance-sheet up more favourably, but, deducting that sum from the gross receipts, how would the balance stand? The right hon. Baronet the Home Secretary would, doubtless, remember his former prophecy, that the China war was a war that would be carried on without credit, and that could not be retreated from with honour. It must be a source of peculiar satisfaction to the right hon. Baronet, that his prophecy as to the Chinese war had not failed more egregiously than the prpohecy of the First Lord of the Treasury as to the amount of his balance, and that the booty yielded by that China war had come in so opportunely to make up his (Sir J. Graham's) right hon. Friend's balance-sheet. [Sir J. Graham: Who conducted the war?] The right hon. Gentleman asked who conducted the war? That question, "Who conducted?" seemed to be of very great importance to hon. Gentlemen opposite; who conducted a policy, seemed to be with them a very significant feature with regard to the policy itself. Many things, for instance, had been proposed by the late Ministers, which when "conducted" by the right hon. Baronet were received in quite a different spirit. However, the balance-sheet of the right hon. Gentleman included the money received on account of the China war. But if the 755,000l. so received were deducted from the receipts, it would leave the deficiency on the year at something above 3,000,000l.; and if to that were added the right hon. Baronet's expected balance of 500,000l. that had not been realized, it would be found that the actual deficiency as compared with the amount calculated on by the right hon. Baronet in proposing his financial scheme fell little short of 4,000,000l. But the right hon. Gentleman laid great stress on the non-receipt of the Income-tax. Why, even if the whole of the produce of that tax for the year had been received, still the right hon. Gentleman's balance would not have been made out but for the amount received on account of the China war, an amount of no less than 750,000l.; that was not calculated at all; So much for the right hon. Gentleman's general calculations. There were one or two other points, however, on which the right hon. Gentleman had laid information on the Table on which he thought it was desirable the public attention should be directed. When making his financial statement last year, the right hon. Baronet expected to raise 140,000l. on coals and 250,000l. on spirits. What had been actually realised? It appeared from the papers on the table, that the whole year's revenue from the coal duties would be about 100,000l. The three quarters had yielded 75,000l., therefore he calculated that as the produce of the whole year. But the right hon. Gentleman had omitted to tell them that even this sum of 100,000l. was not all clear gain. No less than 12,000l. had been received on account of the old duty. With that reduction it came to 88,000l. He could not go further into the calculation, but the right hon. Gentleman had not told them what was the increased expenditure of raising the tax. However, he would put it at 88,000l. instead of the 140,000l., and that he thought was a very liberal calculation; but had the right hon. Gentleman done nothing else in laying on this tax? Had he not affected the trade in coal? Had he not checked a rising trade, and one of the standbyes of the shipping interest in times of difficulty? Within the last two years there had been a decrease of 257,000 tons in the amount of shipping in certain ports of this country. From 911,078 tons it had been reduced to 654,000 tons. That was a very heavy loss to an increasing and flourishing trade. But one of the advantages which they were told would arise from this tax was, that it would be paid by the foreigner, and not by the Englishman. He had always thought this was a dangerous argument for England to use—no doubt it would be agreeable, if they were obliged to lay on any tax at all, to lay it on the foreigner rather than the Englishman; but it was still a great misfortune, he thought, to tell the foreigner, that for the purpose of raising 140,000l. they would do all they could to check his manufactures, and at the same time to preach to him the doctrines of free trade. But what was the fact? The fact was, as they would hear from those hon. Gentlemen on the other side connected with the coal trade, that they had not succeeded in laying this tax upon the foreigner, but that they had divided it—he could not say in what proportions—between the shipping interest, in the freight, and the coal owners in the price they received for their coals. So that even the reason by which they made the tax popular at the time had slipped from under them: for the tax had fallen upon this country and upon the shipping interest, to which the policy and circumstances of the time made it desirable for them to have given every possible assistance. He saw hon. Gentlemen on the other side who took part in imposing the coal duty, and he should be glad to hear their opinions, for he held them fairly responsible for this tax. He did not believe that this tax would have ever passed the House if hon. Gentlemen on the other side connected with the coal districts had not given their support to the Government on the measure. But now let the House see what this arrangement, to which they were parties, had produced, and let the House understand what had been the fruits of the bar- gain they had made. He came next to a subject to which he adverted with considerable pain, and the results of which were of a very serious nature—he meant the Irish spirit duties. The right hon. Gentleman had admitted, that instead of getting 250,000l. he had realized only 56,000l.; therefore that duty, as a revenue consideration, was hardly worth anything. But he believed, that if it were really the case, and be was afraid it was, that by increasing that duty they had roused again the desire for smuggling in Ireland, no money revenue derived to the Exchequer could be an equivalent in advantage to the calamity it had caused to that country. He was not speaking in the spirit of party, because he said last year that he thought in the 4d. duty which be himself had laid on he had made a financial mistake; he certainly did not get any revenue, and he warned the right hon. Gentleman not to follow out his mistake to the extent the right hon. Gentleman proposed. But in the mistake which he made he only lost the revenue he expected; he did not produce fresh smuggling. He wished he could think the right hon. Gentleman's measure was merely a loss to the revenue. He found by the returns which the right hon. Gentleman had laid on the table, that the number of prisoners under the revenue laws in the gaols of Ireland on the 5th of January, 1842, was 52; whilst on the 5th of January, 1843, they had increased to 225, being an increase of 173 in one year. Again the detections for the quarter ending the 5th of January, 1843, amounted to 1,043, instead of 193, the number in the corresponding quarter of 1842, an enormous increase. But taking the two quarters ending in January and April of this year, he found that the number of prosecutions was 1,073, an amount much larger than the whole amount of prosecutions in 1841 and 1842, the number of prosecutions in two quarters being considerably above the number of all the prosecutions under the revenue laws in the two former years. He could not help calling the attention of the right hon. Gentleman to these facts, because he felt assured that the right hon. Gentleman could have no other wish on this subject than he had, and he could not think that the right hon. Gentleman could close his ears to the opinions of persons connected with Ireland when those facts were staring him in the face. The right hon. Gentleman might argue as long as he would, but with these facts before him it was hardly possible to persuade any reasonable person that the increase of duty had not been the cause of the increase of smuggling and increase of crimes to which he had alluded. But if the right hon. Gentleman or the Government were determined to continue this plan without reference to the revenue—though it was not worth consideration as regarded revenue—he thought it became the duty of those hon. Gentlemen who were connected with Ireland and that, House to show that they were not anxious, whilst they were doing all they could to benefit the poorer classes of England, to allow a law to continue which he believed was operating most injuriously to the poorer classes of the sister kingdom. The right hon. Gentleman had stated that the amount of the income-tax was much larger than what was calculated on —about 1,300,000l. more than the right hon. Baronet had estimated. He did not feel surprised at the right hon. Baronet's miscalculation. It was almost impossible to make any fair estimate of the Income-tax; and, therefore, if the right hon. Gentleman got a little more than he had expected, he could only express his satisfaction, as it rendered the deficiency less than it would otherwise have been. But if the right hon. Gentleman got a little more on the Income-tax, let him recollect the conditions upon which that tax was imposed. Part of that tax was laid on with the view of obtaining a relaxation in the commercial system. He had got a million and more increase on the Income-tax, and let the right hon. Gentleman not, then, think them unreasonable if they asked for a little more relaxation in their commercial system than he had given. The right hon. Gentleman had stated his expenditure and income in the present year; but the statements were rather contradictory. He was afraid that, looking to the question as a question of figures, the right hon, Gentleman had not the surplus which he stated. He had to pay for the opium seized in China, 1,220,000l., and for the expences of the Indian government 800,000l., making together 2,0203,000l.; but then, said, the right hon. Gentleman, he could pay it by postponing it, and repay it by the Chinese money to come in future years. That was not stating the amount of the income and expenditure fairly. The right hon. Gentleman said he must postpone the debt to be repaid by the Chinese money which was hereafter to come in; but 800,000l. of that Chinese money he would take for the expenditure of the present year. If, therefore, his (Mr. Baring's) figures were correct, the right hon. Gentleman had in fact, no surplus; but he would take the figures of the right hon. Gentleman. The right hon. Gentleman said he had a surplus of 760,000l.; with such a surplus, he was perfectly willing to admit to the right hon. Gentleman that he was not one who could advise a very large remission of taxation. But there were points in their system where the reduction of protective duties would by no means produce loss of revenue; on the contrary, would increase it. What said the right hon. Gentleman to sugar? They were now free to deal with that article. They were changed a little with reference to the feeling upon that subject. Upon the resolution which turned him and his colleagues out of the Government slavery was the chief question, and the price of sugar was only the parenthesis. But it appeared, that now the parenthesis was slavery and the question was, whether they could make a good commercial bargain with Brazil? Mr. Ellis had not troubled himself about slavery, he had not said anything about the negroes. As soon as be found be could not make terms, unexceptionable as commercial terms, Mr. Ellis packed up and advertised his goods for sale. Sugar, however, was a subject which would come again before them of necessity. But if they were enabled to make any great remission of taxation to the public, he did think it the duty of that House to adopt the means still in their power to give the advantage to the public by a new organization of duty for that purpose. The right hon. Gentleman's own speech had furnished arguments in favour of such a course; for when the right hon. Gentleman went through those articles upon which the duties had been reduced, he showed that those which had answered the helm were those of immediate consumption among the poorer classes—particularly coffee, that article which was not only in itself an article highly advantageous for their consumption, but the article which best met and combated the consumption of spirits, and had a tendency to foster and spread habits of temperance. The right hon. Gentleman had said he bad expected to lose 170,000l. upon coffee, but he found he had not lost anything. Let him try sugar, then, the articles went very naturally together, and he (Mr. Baring) thought that the right hon. Gentleman would not be a bit the worse off in his revenue, while be would give one of the greatest comforts to the poor, and indeed to all classes of the community, which be could possibly confer upon them. If the Government were determined to make no reduction whatever, but to leave our commercial system exactly as it now stood, it would then, he thought, become the duty of every hon. Member to give the House an opportunity of judging for itself, by bringing forward the question. He would not now trouble the House longer; he had done his best to oppose the imposition of the Income-tax, and he had not changed the opinions he then expressed. Holding those opinions, however, so strongly as he did, he at the same time did not feel it to be his duty, in the present state of the revenue, to press for a repeal of that tax. But as that tax had been more productive than had been expected, he should venture to impress upon the House the necessity of giving to the people the full advantages for which they had paid.

Sir R. Peel

said, Sir, the right hon. Gentleman has given notice that an opportunity will arise for entering into a detailed discussion with respect to several of the matters connected with the trade of the country; and I think it more consistent with the public interest and the usage which hat been generally observed upon similar occasions, to avoid entering into a discussion upon particular articles until that opportunity shall present itself. I must say, I think the temper and general tone of the right hon. Gentleman were worthy of the situation he formerly held, and his determination to uphold the revenue in its present state, and not to hazard it by an undue reduction of taxation, were such as might be expected from his public character. The right hon. Gentleman says, that last year I was particularly severe with respect to the failure of the produce of the 5 per cent, additional duty upon the Customs and Excise. I cannot say I think the right hon. Gentleman is borne out by the facts of the case. The estimates of persons making financial statements are liable to error—their expectations may be disappointed-—they profess, in short, only to give estimates, and are not to be severely blamed if the estimates are not perfectly true. The right hon. Gentleman expected a considerable sum from the addition of 5 per cent, to the Customs and Excise duties, and in that he was disappointed. But when I commented upon it, the circumstances out of which my comments; arose were these —I found a great deficiency in the public revenue. I was then considering how the deficiency might be made up. I said, shall I revive the tax upon leather? Shall I revert to the tax upon salt? Shall I re-impose the duty upon beer? or shall I follow the course taken by the right hon. Gentleman and propose a general addition to the duties of Customs and Excise? I was then discussing all the possible means of supplying the deficiency. I rejected them, and I said I thought it would be most unwise to tax articles which entered into the consumption of the great body of the people; that I doubted whether or no, if I did attempt to impose such a tax, the result would be to gain the required sum of money, and I came to the resolution, that upon the whole it was desirable to make a great effort to repair the deficiency in the revenue, by a tax upon property rather than upon articles of consumption; but what I said upon that subject was this:— I must here observe, that I am now merely exhausting the different means by which men might contemplate the supplying of the deficiency, and trying to show that increased taxation upon any articles of consumption will not afford relief. I wish to carry your judgment along with me. I said that the net produce of the Customs and Excise in the year ending the 5th of January, 1840, was 37,91 1,000l., and the estimated increase in the Customs and Excise by the additional 5 per cent, was 1,895,000l. Comparing, therefore, the income from Customs and Excise in 1840 with that in 1842—and I take 1842 in preference to 1841, because you can thus more fairly estimate the effect of the increased duty—I find, while the estimated produce of the Customs and Excise was 39,807,000l., the actual produce was only 38,118,000l., the actual increase being, instead of 1,895,000l., only 206,000l.; not 5 per cent, increase in the amount of revenue, but little more than one-half per cent, realised in the attempt to impose 5 per cent, additional duty. In the depression of trade there may, undoubtedly be circumstances sufficient to account for the expectations of the right hon. Gentleman not having been realised, but still, making every abatement for these causes of decrease, I think it impossible not to admit that 5 per cent, increase of duty on articles of consumption would not produce 5 per cent, in net amount to the revenue. That was the conclusion to which I came. The right hon. Gentleman was Wrong in his, as I fairly admit I have been, in my calculations: I made them upon the usual data, but nothing can be more doubtful than an estimate. However, when the right hon. Gentleman made the proposition of adding 5 per cent, to the Customs and Excise, he did not receive from me a very cordial support, and I said, I thought upon the whole, that instead of levying a new tax on consumption, he was wise in attempting to raise the required amount of revenue by the addition of a per centage on the Customs and Excise. The right hon. Gentleman was disappointed to the extent of 1,600,000l. However, I only referred to that to show that it was not politic to propose any great addition to the duties upon articles of consumption. Then, with respect to the great advantages to result from the imposition of the Income-tax, what I stated was this—that the imposition of an income-tax would enable me to make considerable reductions in the duties on articles of consumption; and I ventured to utter this prediction—I will quote the very words I then used—I said— I propose that the income of this country should bear a charge not exceeding 7d. in the pound, which will not amount to 3 per cent., but, speaking accurately, 2l. 18s. 4d. per cent., for the purpose of not only supplying the deficiency in the revenue, but of enabling me with confidence and satisfaction to propose great commercial reforms, which will afford a hope of reviving commerce, and such an improvement in the manufacturing interests as will re-act on every other interest in the country; and by diminishing the prices of the articles of consumption and the cost of living will in a pecuniary point of view compensate you for your present sacrifices. Now, although that prediction has been said to be falsified, I must say 1 think there has been from some cause or other that reduction in the price of the main articles of consumption that to a person exercising due economy will compensate the amount of 21. 18s. 4d. per cent, which he pays in the shape of Income-tax. I take the case of a person with 300l. a-year, having to pay on each 100l. 2l. 18.s. 4d.—I very much doubt whether in the case of that man the reduction in the price of the various great articles of consumption does not, in point of fact, fully compensate him for the charge of between 8l. and 9l. he pays as a tax on income. So 1 say of a man with 5,000l. a-year. He is called upon to pay 150l. as income-tax; if he is perfectly regardless of the fall in prices—if he do not take advantage of competition—if he will let retail dealers charge what they please, very well—he will have no compensation; bat if he makes inquiry—if he looks after his own concerns, and avails himself of the lowness of prices, the man with 5,000 per annum can, with the present price of articles of consumption, effect a saving in his annual expenditure of more than 150l. That was the prediction I made when I introduced the income-tax. You may say the result has arisen from other causes; you may attribute it to a good harvest, or to something else; but the fact, I think, cannot be denied, that for every 2l. 18s. 4d. per annum paid upon 100l. income, there is an opportunity of making a saving of much more than that amount. At least, I know I have had the satisfaction of receiving various communications from parties possessing small and large incomes, in which they admit that by the exercise of proper economy a greater saving than I then predicted may fairly be made. 1 have been told by one hon. Gentleman that in the article of timber alone he expects to realize a saving that will compensate him for the payment of the Income-tax. I made another prediction—that the reduction of the duties on several of those articles which entered largely into manufactures might afford the hope of reviving commerce. Certainly, without speaking sanguinely of the revival that has taken place, I expected it would have taken place at an earlier period. I did not contemplate the long continued depression that we have had to encounter. In fact, the continuance of that depression accompanied with great pressure on the working classes, necessarily entailing upon them great privations, and causing a reduced consumption of many articles, has mainly contributed to defeat the calculations I made, and to prevent the receipt of that amount of revenue which I anticipated. I am not speaking too sanguinely now. I shall not venture, after such frequent disappointments, to excite too great expectations; but I cannot help thinking that the facts to which my right hon. Friend has referred as having arisen within the last three or four months, do entitle us to entertain the expectation that the worst is past, and there is a hope of a progressive revival in the commerce of this country. The articles to which my right hon. Friend referred are articles in which a reduction of duty took place, and they are largely used in manufactures-olive oil for instance. Then there is the great increase in the consumption of cot- ton. Then I hope we have seen the commencement of the recovery from depression in the wool trade; and I think such a combination of circumstances warrants the hope that we are about to see a revival in the commercial and manufacturing interests of the country. I deeply regret to see the depression continue in some branches of industry—in the iron trade, in the coal trade; and I am afraid the hardware trade has not yet shown any symptom of material recovery. But, looking at what has taken place in the cotton districts, and what is beginning to take place, I trust, in the woollen districts —looking at the demand for articles which enter as elements of manufactures, I cannot help entertaining the conviction, although the expectations I held out have been deferred, still there is now a prospect they will be realized so far as they refer to a revival of the manufacturing industry and commercial prosperity of the country. I do hope the House will not press on the Government in the present state of the revenue hasty and precipitate reductions of taxation; and that they will not forget the advantages they derive from the maintenance of public credit. It is impossible to deny that if the state of the finances of this country were prosperous, there might be an opportunity of reconsidering with advantage several of our duties. I do not deny it; but I entreat the House to bear in mind that, comparing our revenue with our expenditure, there does remain still, at least there did remain in the last year, a deficiency—if the whole receipts of the Income-tax had been realized within the year, we cannot deny that there was a deficiency in the last year. The right hon. Gentleman says he does not now call for the abolition of the Income-tax. I think in the present state of the revenue there are few that would advise a repeal of the tax on property and income. I think there are few who will not admit that if the financial proposals of the late Government had been carried into effect, they would not have caused such an increase in the revenue of the country as to dispense with the necessity for an Income-tax. Where should we have been now if the Income-tax had not been imposed? There is a deficiency now. In discussions upon the Budget it has always been usual to avoid anything like asperity or party spirit. I shall studiously avoid it upon the present occa- sion. There is no doubt a deficiency on the last year of 2,400,000l., but there are the arrears of the Income-tax due, which, if you could now realize and pay them at once into the Exchequer, would considerably repair that deficiency; but there would still be a balance against you. The deficiency, therefore, of this year is not precisely of the same character as those of former years, because the arrears due if raised would redress the balance. When I proposed the Income-tax, what was the fact? The deficiency was not casual; there had been a growing deficiency for five or six years, and the full amount of the deficiency at the close of the year, when I proposed the Income-tax, was not less than 10,000,000l. There was an increase of the debt in a time of peace to the amount of at least 10,000,000l. for the year ending 1842. The late Government, it is true, proposed a modification in the existing corn and sugar duties, but it can be conclusively proved, and 1 think they themselves will admit, that if their proposals had received the sanction of Parliament, still the state of the revenue, as compared with the expenditure, on account of the Chinese and other wars in which we were engaged, would have rendered it imperatively necessary to resort to some other scheme for the purpose of raising additional income; and I now doubt whether any measure could have been devised for raising a sum approaching to 5,000,000l. half so free from objection as that which I proposed—namely, the Income-tax. What other measure can now be suggested? The hon. Member for Montrose says, reduce your estimates to the amount of 4,000,000l., during the present year. Her Majesty's Government have paid the utmost attention to this subject. They have considered the demands on our naval, military, and ordnance service from every part of the globe; they have looked at the duties demanded of those who form that service, and they have come to the firm conviction that it is impossible, without endangering the health of the men employed, without sacrificing the efficiency of the public service, and probably increasing the expenditure greatly hereafter, that any such reduction could be made; and I apprehend that upon that point there will be a concurrent, almost unanimous, opinion of the House. Very few hon. Members, looking at the state of the army, looking at the navy, looking at the demand for protection to commerce in every quarter of the world, believed that in the course of the present year we could have effected so great a reduction in our estimates. But we have in the present year, made such reductions as we thought consistent with the efficiency of the public service, and effected a saving of 800,000l.; and these reductions have met with general assent. I did propose certainly, that a vigorous effort should be made to replenish the public coffers by a tax on property. Although the estimates 1 made may have been incorrect, and although the period of revival of trade has been postponed beyond my anticipations, I see nothing in what has passed to discredit the policy of the great measure I then proposed—namely, the attempt to raise additional revenue by a tax on income. At the same time I admit, that the existence of a tax is no reason to continue it if it be proved to be injurious, and it is now open to any hon. Member to propose a substitute. But if it were proposed to repeal the tax, and substitute other taxation in its room, 1 feel perfectly convinced that a vast majority would support me in attempting to give effect to the experiment I made last year. The right hon. Gentleman (Mr. F. Baring), and others have said, that the imposition of the Income-tax had caused the defalcation in other branches of the revenue. I doubt that. The defalcation in other branches of the revenue have been caused by depression of trade, not from the imposition of the Income-tax. The receipt of a larger sum than I calculated upon only fortifies me in the opinion, that it was wiser in the present state of the country to obtain additional revenue from a tax on property rather than by increasing the taxes on articles of consumption. If there be any particular class of taxation that ought to be affected by the imposition of the Property-tax, it is that of the assessed taxes. I was distinctly told, that the effect of the Property-tax would be most apparent on the assessed-taxes. I still doubt whether it will be the case; I doubt whether reductions in the Excise and Customs can be attributed with justice to the Income-tax. If there were a great falling off in the assessed-taxes, then, you might with some justice argue that that defalcation was caused by the increased tax on property. But the actual Calling off in the receipt of the assessed taxes is only 200,000l. on a receipt of 4,400,000l., and, judging from any notices which have been given, I certainly have no reason to anticipate that the burthen on property on account of the Income-tax will to any very materal extent affect the receipts under the assessed taxes. We must hope too, that the revival of trade, and the demand for manufactures owing to the reductions of duty which have taken place, will more than counterbalance to the people the amount of the tax. As yet we have not seen the injurious effect of the Property-tax, either on the actual receipts of the assessed or any other taxes. With respect to the coal-duty, the sugar-duty, and the duty upon any other article, there appears to be a prospect of having them submitted to the House in detail upon some future occasion, and till then I think it will be infinitely better to reserve the discussion. I, at least, shall for one abstain from discussing them at present. It would have been infinitely more gratifying to me and my colleagues to be enabled on account of the state of the revenue to have proceeded in the course of the remission of duties on which we entered last Session. My conviction of the principles which ought to govern the remission of duties, I must own, has been confirmed rather than abated in force by the experience we have had of the past. 1 wish most sincerely we could have reconciled it with our duty to have proposed further reductions in some duties; but in the present state of the revenue, adverting to the still continued deficit as compared to the expenditure, looking to the great importance even in a commercial point of view of maintaining public credit, we have come unwillingly to the conclusion, that it is not consistent with our public duty to propose the remission of taxation on articles of consumption, which would have been most agreeable to our feelings could we have reconciled it to our duty.

Lord J. Russell

said, the right hon. Gentleman had, in defending his own financial administration, made some assertions with respect to the past on which he could not refrain from giving an opinion very different from that pronounced by the right hon. Gentleman. The right hon. Gentleman said, that if the propositions of the late Government in 1841 had been adopted by Parliament, it would still have been necessary to impose a tax in the nature of an Income and Property-tax. Now, it appeared to him if that course had been taken, such a tax would have been altogether unnecessary. When his right hon. Friend proposed his scheme, the deficiency was 2,500,000l., and his right hon. Friend calculated that the changes would produce 1,900,000l. to the revenue. His right hon. Friend had at the time, and again last year, produced sufficient vouchers for the estimates he made. Suppose they had been anything like the truth, the effect of carrying out that scheme would have been just the reverse of the Income-tax, because the scheme of his right hon. Friend was founded on the proposal of increasing the trade of the country, admitting, in the first case, sugar, which was prohibited—admitting corn more easily on a fixed duty, so that commerce would not have been interrupted, and regulating the duties on timber. These three measures would have afforded the means of increased consumption, and would consequently have increased the revenue. Any deficiency, therefore, in the revenue, even if it had amounted to 700,000l., or 800,000l., would have been fully made up by an increased trade. His belief, therefore, was, if they had adopted the propositions of his right hon. Friend, that at the end of the next financial year, although they might have found some deficiency, the increase of trade would have been sufficient to supply that deficiency, and, if so, he did not think that either the Government or Parliament would have thought it necessary to adopt an Income -tax. The course which the right hon. Baronet (Sir Robert Peel) had taken was very different. The House should observe, that the whole deficiency, amounting to 2,500,000l. had been supplied, in the first instance, by loan, or in other words, by the issuing of Exchequer Bills. last year, the right hon. Gentleman stated the whole amount of the deficiency, and what was likely to occur next year, if measures were not taken to supply it, and then the right hon. Gentleman proposed the very onerous tax which now existed under the name of an Income and Property-tax. In 1833, the right hon. Gentleman had stated, that the effect of an income-tax would be to diminish the employment of labour, and put an end to many occupations that depended on small capital; and, taking the defalcations in the. Customs' and Excise, amounting to nearly 2,000,000l. in conjunction with the amount received from the Income-tax, the right hon. Gentleman's own experience proved the truth of his observations. By the adoption of his own plans, the right hon. Gentleman had a deficiency, in the two years, to contend with of no less than 4,700,000l. The statement made by the right hon. Gentleman, the Chancellor of the Exchequer, was far from satisfactory. It was unsatisfactory as describing the state of the country, of our foreign trade, and of our internal consumption; it was also unsatisfactory with regard to the present state of our finances. If his right hon. Friend had to make such a statement, he would have made it appear, as he thought it would appear to the House, that for the next year, there would be a considerable deficiency. The right hon. Gentleman had 800,000l. to pay for expences in China, and 1,200,000l. for compensation for the seizure of opium; putting these sums together, he made a charge of 2,000,000l. But the right hon. Gentleman had received 800,000l. from China, in part payment of the sum stipulated to be paid by China to this country. It would seem to him that the course of financial statements was, that one sum should be set against another; and to say, that although the Government had such a sum to pay for military operations in China, yet, on the other hand, they had such a sum in the Exchequer received from China, and therefore there was no provision to be made for that sum. But the right hon. Gentleman took a vote for the 800,000l. for military operations in China, and then put the sum which he had received from the Emperor of China to the credit of the year. If the regular course had been adopted, and the sum of 1,200,000l. which was to be paid as compensation on account of opium had been acknowledged, there would have been a sum of 750,000l. more to be added to the deficiency of the financial year. Under the circumstances of the country, and with this deficiency in its finances, it appeared to him that it would not be wise for the House to adopt any proposition for any great reduction of taxation. And when the right hon. Baronet said, that those who objected to the Income-tax might now propose to repeal it, and substitute for it some other tax, he begged to say that the question for the present year was totally different to what it was last year. Nothing could be more impolitic or more burthensome to the country than to impose a tax one year and take it off for the next, for the purpose of im- posing some equivalent tax in some other shape. Therefore, however burthensome an Income-tax might be, still, as it had been imposed for three years, he should say, let it run out its due course, and when the time should be expired no doubt Parliament would very seriously consider whether it ought to continue it a moment longer. With respect to other measures, he did not think the right hon. Gentleman the (Chancellor of the Exchequer) had ever paid sufficient attention to the proposition made by his right hon. Friend (Mr. F. Baring) in 1841, with respect to the reduction of the very high prohibitory duties on many articles. The right hon. Gentleman stated last year that he could not reduce those high duties without reducing, at all events for the first year, the amount of revenue. But he must say that there were some duties it was very possible to reduce without running any considerable risk of affecting the revenue. With respect to the duty on sugar, for instance, what possible risk of loss to the revenue could be incurred by reducing the duty of 63s. per cwt. on foreign sugar? Was it not obvious that the reduction would cause an increase of consumption? Then, again, with respect to other articles; by the reduction of the duties on them fair trade would be promoted, which was now invaded by smuggling. Reducing the duty to make trade compatible with your laws and obviate smuggling, would be completely in accordance with the professions of the Government last year. As matters now stood, her Majesty's Government appeared to be halting in their course. With regard to some articles they stopped short, and they now appeared to be halting, without any good reason, in the course which they pursued last year. When the noble Lord, the Member for Sunderland (Lord Howick), brought forward his motion last year, it was said that the ministers ought to be allowed a certain time to consider and bring forward their own measures. The time had now arrived, and almost the latest time when such measures could be brought forward, and what was it that they heard? The right hon. Gentleman the Chancellor of the Exchequer, and the right hon. Baronet, had told the House that no measures were to be brought forward; therefore the statement of the right hon. Gentleman not only afforded no hope, but must create great disappointment. The Chancellor of the Exchequer might, in some respects, be rather too low in his estimate; a better return of revenue might be expected; still the right hon. Gentleman had given no hope of the reduction or of the abolition of any tax. With respect to any measure of improvement the House was told not to hope for any from the Government. Though there might be some reason in the present state of the finances of the country for her Majesty's Ministers to adopt that course of inaction, yet it by no means precluded independent Members of the House to consider whether they might not propose measures in conformity with the principles which the Government themselves laid down so absolutely last year, and which might tend to carry out and complete that policy which they themselves began.

Mr. S. Wortley

believed the diminution of the revenue was attributable to other causes than those stated by the noble Lord who had just sat down, and by other hon. Members who had spoken from the noble Lord's side of the House. With respect to the Income-tax, unwelcome as that impost had always been to the great bulk of the people, his belief was, that its unpopularity in the present day was surprisingly small, and that fact was partly to be attributed to the strong conviction in the mind of the people that the occasion on which it had been imposed was one which justified the tax, and which exhibited a necessity for its imposition On that occasion he should pursue the course recommended by previous speakers, and apply himself only to the general tenor of the financial statement without discussing any of the means of taxation or the sources of revenue which hereafter might be brought under the consideration of the House. But though he had no wish to occupy the time or attention of the House on this occasion, he could not help expressing his deep regret that his right hon. Friend the Chancellor of the Exchequer did not even now think it was in his power to concede the repeal of the import duties on a raw material for manufacture, which might be urged upon grounds well worthy of his consideration and that of the House when dealing with commercial legislation. The duty to which he alluded was that now imposed upon the importation of foreign wools. The parties engaged in the manufacture of that material and in that trade had, he must say, been very unfairly dealt with. After the declared intention of the Government to reduce all taxes upon raw materials for manufacture, in some cases to a nominal duty, and in none ex- ceeding 5 per cent., he must observe, that to leave a tax which amounted to no less than from 10 to 25 per cent, upon a raw material, in contradiction of all that had been promised by his right hon. Friend at the head of the Government, was a course of proceeding very much to be deplored. He felt all the difficulties in which his right hon. Friend the Chancellor of the Exchequer was placed, and which he had to contend in the present state of the finances of the country, and like the noble Lord opposite (Lord J. Russell) he should be unwilling to press for the concession of any source of revenue in any degree that would be calculated to embarrass the Government, but when he saw the small amount derived from this source, an amount not exceeding 100,000l. per annum—when he observed that even that amount was a falling-off of one quarter in the course of the previous year,—when it was found that the trade from which this amount of duty was derived was in the regular course of decline —when it was borne in mind that the amount of duty, though small, was just enough to turn the scale against the manufacturers—and when, above all, the striking fact was notorious, that at the time the Chinese trade was opened to the merchants of this country, and had given an impulse to the cotton manufactures, the exporters of woollens to that new market went to Belgium for that commodity, imported it into this country, and shipped it to China as English manufacture—it appeared to him there would be no risk to the revenue by giving the assistance desired to one of the most ancient and extensive trades of the country. He repeated that he was unwilling to press his right hon. Friend the Chancellor of the Exchequer upon this or any other point which might embarrass his operations in a financial point of view, but with respect to the case of raw wool it could not be forgotten that it was a commodity which had something like a moral claim upon the Government for relief; because the duty on the export of British wool had been entirely removed or reduced, and because it had been promised to the woollen manufacturers of this country that the import and export duties on the raw material should be placed upon the same footing; and yet from that time to the present they had been left in the same condition with import duties impeding their trade and traffic, and giving a direct advantage to the foreign manufacturers. Having said thus much, it would be useless for him to con- sume further the time of the House; but considering the position in which he stood, considering the vast number of his constituents who were deeply interested in the operation of these duties, he could not avoid thus expressing his regret that this small amount of revenue could not be dispensed with. He was sure, on the part of his right hon. Friend the Chancellor of the Exchequer, there was not a want of will to give this relief. He gave his right hon. Friend credit for the conscientious conviction that his duty to the country forbade him to abandon this source of revenue. On the whole, however, in spite of the number of observations which had been made upon the statement of his right hon. Friend, he was not disposed to find so great fault with it. Though it might not in all respects be satisfactory, still, it must be recollected, that neither the House nor the country expected anything very exhilarating in the financial statements for the present year, and with the knowledge he had of the improved condition of the manufactures in those districts with which he was connected, he could not, on the whole, think there was much ground for questioning the probability of his right hon. Friend's anticipations being fulfilled, and that in the course of the next financial year he would be found in the possession of a surplus revenue.

Viscount Howick

could not agree with the hon. Gentleman who had spoken as to the nature of the statement made by the Chancellor of the Exchequer this evening; on the contrary, he thought, that statement was one calculated to excite very great apprehension and anxiety in the minds of all those who took a serious and deliberate view of the present state of our finances. He confessed he had been rather prepared for such a statement, when he observed the change of performers which had taken place since. Last year, the First Lord of the Treasury, with a great flourish of trumpets, brought forward the financial statement before the House; but this year the task was assigned to the right hon. Gentleman, the Chancellor of the Exchequer, and not undertaken by the right hon. Baronet himself. This circumstance alone had prepared him to expect that there would be nothing very cheering—nothing which would be very satisfactory to tell in the statement to be made to Parliament, and now that they had heard it, this anticipation proved to have been too well founded, and the statement first made, giving ground for considerable alarm and anxiety. For what was the result of that statement? Why, they were told, that in spite of the great sacrifices they had made, in spite of their submitting to a tax most justly unpopular, and which had proved liable, in practice, to every objection urged against it when originally proposed —in spite of the Income-tax, they saw that, instead of the income and expenditure of the country being equalised, there was a deficiency of two millions and a half. They saw, also, in spite of that tax—and other taxes imposed, and, as he thought, contrary to every principle of sound financial policy—the prospect of another deficiency for the ensuing year. It seemed to him utterly impossible that a great financial scheme could have more entirely failed than had failed that scheme which was brought before the House of Commons last year, with so much preparation, and so much pompous pretension. How had the result corresponded with the promises then held out to them? They had been told, that great sacrifices were necessary to be made, but that great advantages were to be had in return; that the taxes which were to be imposed were to be distributed in such a manner as would make them of very little burthen to the country. The right hon. Baronet began with the Income-tax, and told them on the occasion of imposing it, as the right hon. Baronet had, much to his surprise, contended to night, that the burthen of the tax was made up to the people by the reduction of the price of provisions, which his other measures effected. He was curious to know, how that could be reconciled with the arguments they so frequently heard, that the tariff and the new Corn-law had nothing to do with the reduction of prices of agricultural produce, of which the farmers so much complained. The difference which existed upon this point between the hon. Gentlemen connected with agriculture, and the right hon. Baronet was one which he, considering the high authorities on both sides, could not presume to decide. He left the question to those who had spoken at Wallingford, at Aylesbury, and at other places with so much edification to their hearers. Then came the question with regard to the duty on Irish spirits. His right hon. Friend had shown, in a manner quite unanswerable, the utter failure, the worse than utter failure of the financial measures of the Government. He had shown the great and irreparable injury which the revenue on spirits had sustained; and although the right hon. Baronet had said he would postpone the discussion of details till another time, still he could not agree, that they ought to observe an entire silence upon them. It might serve the purpose of the right hon. Baronet to keep silence, but he confessed he did not think he should be wrong in taking the present opportunity for stating his opinion with respect to some of the topics embraced in the statement of the right hon. Gentleman. But then there was another tax, which he had opposed last year, and to which he now wished to call the attention of the House and the right hon. Baronet, in order that both might see, and both be convinced, bow much injury that tax bad inflicted, and how little benefit had been derived from it; he alluded to the duty imposed upon the export of coals. It was really necessary for them to look back a little, and see what was the state of things, when this tax was about to be imposed by her Majesty's Government. He found, that one argument made use of by Government in favour of this imposition was, that a tax had already been imposed upon the article, by foreign nations. It might be fair and proper in a foreign government, if it so pleased, to impose a duty on an article to be consumed by its own subjects; that might be proper. He did not now say one word as to the policy of the proceeding; bat in that case the tax fell on the subjects of the foreign government. They had never heard any one argue, that it was the Portuguese that paid the duty on port wines. It was the persons who drank the wine in this country, who paid the duty. The Government had taken a different view of such a tax, and seemed to consider that a duty could be imposed upon coals, and a revenue derived from it, which foreigners would have to pay, without crippling the trade. The Government proposed to raise from this source a revenue of 140,000l. a-year. He was then referring to the original proposition of the Government, and he alluded to it, to show how little reliance was to be placed upon such a calculation. And now his right hon. Friend had shown the House, that instead of their gaining 140,000l., they had gained only 80,000l., not a great deal more than one-half what had been calculated upon. He now asked the House whether it was for such an object as 80,000l. they would incur all the evils that had been experienced in this one branch of their trade? The former duty upon coals had been repealed in the year 1834. From the moment of that repeal the trade had made a spring forward; it was advancing constantly, rapidly, until the imposition of the duty. Before last year, when the notice of the imposition of the duty was given, persons conversant with the trade said that there could be no doubt entertained as to its progressive improvement. But what was the consequence when it was found that the duty was to be imposed. In the last half-year of 1842, during the time that the duty was imposed, the export of coals had fallen to 598,000 tons from 751,000 tons. It had fallen off not less than 153,000 tons, that was nearly the one-third of the whole amount exported to foreign countries. But he knew how this would be answered. It would be stated, that the conclusion of last year was not a test of the state of the trade, because in order to avoid the tax an effort was made to ship abroad as much coals as could be sent, and that, therefore, in the last half-year less would have been sent than in the natural course of trade would otherwise have been forwarded. To a certain extent he was prepared to admit that the argument was correct; but then, they had to consider that the operation of a duty of this kind would not be felt immediately to its full extent. Arrangements required to be made for the increased production that would be demanded from the foreign producers. These foreigners would have to make large investments to increase their hands, and until those were in operation our coal owners would not feel all the effects of foreign competition. Besides, large orders had been received before the imposition of the duty, and some of these could not be completed before the duty came into operation; and whether there were a loss or gain, the parties were bound to make the export, so that the one state of facts might be set against the other. The fairest test they could have would be the exports for the quarter ending in April in the last year, and the quarter ending in the April of this year. In April of last year the intention to im- pose a duty was not known. So far as it could affect the exports in that quarter, and, therefore, practically speaking, it was not known. The exports were then made independent of any financial measure and unaffected by it; and, in the same way, the trade might be considered on a permanent footing in the last quarter, except in so far as that the foreigners were not yet as well prepared for the competition as they would be with our producers. Taking, then, the quarter ending in April last year, and the quarter ending in April this year, they had, he conceived, the fairest test that could be supplied as to the actual state of trade. In the quarter ending in April 1842, the export of coals to foreign nations was 389,000 tons, and in the quarter ending in April 1843, the exports was 250,000 tons, showing a falling-off of 129,000 tons, or more than one-third of the whole of the previous export of coals. Thus they saw in the very first year of the operation of this lax that it had produced a decline in a branch of trade which gave employment to their shipping, and mining interests of not less than one-third. This, then, was the practical operation of the measure; and they were to remember that they were only beginning now to feel the effects of it. By this, foreigners were receiving the greatest encouragement to come into competition with us. And thus this duty, which it was supposed was to fall exclusively upon foreigners, fell exclusively upon our own shipping and coal-owners. This, then, was the effect of these measures. He asked the House, whether they would persevere in this course of policy? He asked them whether they were to go on thus imposing taxes, which, like the Income and the Coal tax, pressed severely upon production? Were they to go on imposing taxes which were equally injurious to other trades—such as for instance, his hon. Friend the Member for Yorkshire stated, as to the duty on foreign wool? Were they, he asked, to do this, and not endeavour to find out some other resource? Their present situation, he hoped, would attract the serious consideration of that House and the country. He agreed in the opinion expressed by the right hon. Member for Portsmouth and the noble Lord the Member for London, that however strong might be their objections to the Income-tax, still it ought not at once to be repealed, because he felt the great inconvenience that must follow from the frequent changes of taxation, and that an immediate repeal of that tax must be inexpedient. But not doing this, still he would tell the House what he thought they might, and what he conceived they ought to do. He thought that they ought to repeal some of those taxes which had been objected to, such as the duty on foreign wool on the export of coals, upon Irish spirits, and such taxes as those from which they only derived a comparatively trifling amount of revenue, and were found to be directly injurious to the best interests of the country. They ought to adopt such measures as would have the effect of increasing their revenues, of relieving industry, and increasing the consumption of articles which would be found productive to the revenue. If the House wished to get rid of these burthens, the time, he thought, had come when they must look to those taxes that produced little or nothing to the Exchequer. They saw all their attempts to increase the revenue by high duties had failed; whereas an opposite effect had followed when they attempted to diminish the differential duties. In that case, all their efforts had been attended with success. Even in coffee on which they levied a monopoly duty of 100 per cent in favour of their colonists, even there, where there was but a slight improvement on the former state of the law, still the right hon. Gentleman, who had calculated that there would have been a loss of 170,000l. to the revenue, now found that the loss was but 40,000l. When there was a step—a small one—in the right direction, the loss was not one-half as much as had been expected. If they had taken a bolder step, if they had adopted a more fair course, if they had reduced the duty on foreign coffee 6d., the consequences must have been a greater extension of British trade, and greater advantages to the British consumer. Let it be supposed that they went on in this way, there were several important articles on which they might so deal without the smallest apprehension of the slightest loss to the revenue. His right hon. Friend had alluded to that most important one, the article of sugar. They ought to do so for the sake of the revenue and the trade of the country, and for the purpose of relieving that distress which now pressed upon the population. He might remark, that the duty on fo- reign sugar wag 63.s, and on British sugar only24s. Now, he would venture to say that if they made a large reduction of the duty on foreign sugar, if they brought it down to 30s., so far from there being a loss, there would be a gain to the revenue quite sufficient to pay for the repeal of the tax on coals and on wool, and be at the same time a most invaluable accession to the British trade and British manufactures. This was the policy which he hoped the House would pursue, and that her Majesty's Government would adopt. He did not ask them to repeal the Income-tax, until the state of the revenue would enable them safely to dispense with it, and without a large taxation in lieu of it. This was not what was desired, but that they would apply themselves boldly to enforce those principles which her Majesty's Government m theory so ably advocated. Let them, he said, deal with the differential duties, and thus give a new impulse to the industry of the country. Let them do this, and then all branches of the revenue would recover their ancient productiveness. The customs, excise, taxes, all would be increased, and with that increase they would shortly be in possession of such a surplus as would admit of a repeal of the Income-tax. But if the House were bent on upholding a system, which it might call a system of protection, but what he called a system of monopoly, if the House were bent upon upholding that system—then they might lay their account that there would be no reduction of taxation in future years, but a still further demand upon the people. They would, in adhering to that system, be pursuing a most unwise course, and instead of aiding the productive industry of the country, they would be compelled to have recourse to further taxation, and this with the worst effects. The folly of such a proceeding could only be compared to the conduct of the boy in the well-known fable, who, in the hope of realising an immediate gain, killed his goose that laid the golden eggs. That was, in his opinion, the policy which her Majesty's Government was pursuing. He hoped that the House and the country would feel that the time had come when every interest which supposed that it gained by protecting itself, lost much more than it gained by the protection it was obliged to give to other interests. He trusted that the House would take an enlarged view of this subject; that reduc- ing all taxes not imposed for the purpose of the revenue alone, they would at length relieve the industry, and be able to supply more than was required for the exigencies of the public service.

Mr. Liddell

could not refrain from reminding the House and the noble Lord who had just spoken of the reason which had induced himself, and others connected with the coal-trade, to give their support to the Government in the imposition of the export tax on coal. The first proposition of the Government had been to impose a tax of double the amount to that eventually agreed upon, and the coal owners and those interested in the trade had been prepared to resist that proposal. But when the Government had stated its intention to concede one-half of the proposal, it had been determined to case opposition to the proposition, and after a conference with the Members of the Government to adopt the modified measure. With respect to the tax itself, his opinion remained the same as it was originally. He believed it to be an injudicious and impolitic tax; and that the effects of it fell on the shipping interest. As far as his information went, the receipts from the tax were not more than one-half the sum expected, and the detriment accruing from it was greater perhaps than was imagined. With regard to the post-office arrangements, he hoped that the benefit of them would be extended to the rural districts. In the county he represented, large bodies of people had been called into existence in remote spots by the sinking of mines, and he trusted that they would be enabled to receive the advantages accruing from improved post-office arrangements. With regard to the statement of the Chancellor of the Exchequer, he derived more hopes from it than hon. Gentlemen opposite. The defalcation in the Excise had been adverted to; but a large proportion of that arose from a deficiency in the malt-duty; and, he believed, from what had been stated, there was no likelihood of the recurrence of such a deficiency. Another cause of deficiency was the strike and suspension of labour in the manufacturing districts, but the improved prospects in the manufacturing districts afforded a well-founded hope of an increased revenue from the manufacturing population.

Mr. Hutt

was glad to find, that his opinion with regard to the impolicy of laying an export duty on coals was at last confirmed by the authority of the hon. Member opposite (Mr. Liddell). It had been productive of great evil, and the result of the duty was only to give 80,000l. to the revenue. It had been said, that the right hon. Baronet opposite would live well in history. He did not mean to contradict that statement, but of this he was sure also—that the right hon. Baronet would live well in the memory of the coal-owners on the continent of Europe, the value of whose property he had increased by forcing foreigners to make themselves independent of the supply of coal from this country. If the present tax continued, the right hon. Baronet would be remembered as the man who destroyed the export trade in coal. There was one point on which he desired to put a question to the Chancellor of the Exchequer. Many persons, looking at the high price of funds, were of opinion, that the time had come when the right hon. Gentleman should undertake to reduce the 3½ per cents., and now that the financial statement of the right hon. Gentleman was being considered in committee, be wished the right hon. Gentleman to state explicitly whether it were his intention to adopt any measure of that description in the course of the present year?

The Chancellor of the Exchequer

said, the hon. Gentleman had put to him a question which he could not have anticipated, and it was one which, of course, could not be answered satisfactorily at that moment. He should feel himself bound to reserve to himself his own opinion, and perfect freedom of action according to the circumstances of the country; but it was impossible for him to answer a question as to what might be contemplated, or, indeed, what might be possible on such a subject. The right hon. Gentleman (Mr. F. Baring) had put to him incidentally a question with respect to rural posts. He could assure the right hon. Gentleman that the subject was not one which had escaped the attention of Government, or with respect to which they were not disposed gradually to introduce considerable improvements. It was perfectly true, that when the right hon. Gentleman quitted office, he left behind him a minute stating in general the propriety of adopting rural posts. The first step, taken in consequence of this minute, and be believed before the right hon. Gentle- man quitted office, was the commencement of a map with all the different unions marked out on it, as well as the spots where it would be desirable to form rural posts, and the completion of this map necessarily occupied a considerable period. Then it was to be considered, that there were certain positions in which it was quite clear that such a division of the country would not altogether contribute to general convenience; and that the general measure would entail great expense, at a time when there was a deficient revenue. It was, however, determined to make a selection of those places in which rural posts might be established with the greatest benefit to the particular communities requiring them, and though the selection had been attended, from a variety of causes, with more delay than he could have wished, the subject was kept in view by the Government, and it was proposed gradually to introduce posts in places where they might be necessary.

Mr. Bell

could corroborate the statement made by the noble Lord (Viscount Howick) and his hon. Friend (Mr. Liddell) as to the injurious effects of the coal-tax, and was perfectly satisfied, if it were not repealed, the foreign coal trade would be destroyed. It would be impossible for the coal-owner to compete with the foreign producer in foreign markets, unless the tax were taken off; and the carrying trade, as far as that, article of commerce was concerned, would be irreparably ruined. The exports had fallen off to the extent of 202,108 tons, in the year 1842, as compared with 1841, a proof of the injurious effects produced by the imposition of the tax, and he was quite satisfied if it was persevered in, that the annual falling-off would be still greater every year. The tax, however, pressed not alone on the coal-owner; it also pressed heavily on the ship-owner. The reduction in freight between England and foreign ports was enormous, since the imposition of the duty, all of which fell directly on the ship-owner, and indirectly on every branch of trade with which the ship-owner was connected. He hoped, therefore, that the right hon. Baronet would not persevere HI the tax upon exported coal.

Mr. Labouchere

was glad that Gentlemen connected with the coal trade had taken up the subject of the tax on coals, and he fully concurred in the observations that had been made against it. He hoped that when it was found that a tax operated in such a manner as to limit the export of articles, that the Government would retrace its step, and remove that by the imposition of which so great an evil was effected to our commerce. It might be our policy to secure to ourselves a monopoly of certain articles, but experience might teach us that such policy was a dangerous one. Witness the result of the measures adopted by the Neapolitan government in reference to the export of sulphur. The government thought it had a monopoly of the sulphur trade in its own hands, and took advantage of that supposed circumstance to impose a heavy tax upon the commodity. This measure for a while was viewed with apprehension and alarm, and created the greatest consternation among the manufacturing interests of the country. But what took place? Necessity is the mother of invention. The manufacturers set to work and discovered a new process, whereby they can procure this necessary article of consumption from our own products. The consequence is, that about one-half of the amount of sulphur now consumed is procured, not as formerly from Sicily, but manufactured in various places from pyrites of iron. He hoped that the lesson taught by this would induce the Government to take the matter of monopoly into their serious consideration. But he had little hope that they would. For himself, he shared largely in the feelings of disappointment expressed by his Friends near him, that the Government did not seem prepared to carry forward measures of reform in commercial legislation. He fully agreed in one point with the Chancellor of the Exchequer, and was not disposed to take a gloomy view of the future fortunes of this country; for, with the resources which we have unquestionably at command, if we were true to our own interests, and gave practical effect to those principles, which reason and experience alike teach us to be the only safe foundation for our commercial system, this country would yet, despite of the unfavourable aspect which affairs wear at the present, maintain what she had always hitherto enjoyed—the first rank among commercial nations. But still she could not afford to throw away any advantages. He should deeply regret, as much as any one could, to see the Government embark on any course of legislation, tending, in the least de- gree, to jeopardize the credit or finances of the country. Although desirous to witness as speedy a reduction of duties as was compatible with the safety of our varied interests, he did not ask for any hasty alteration of taxation. He was opposed to the imposition of the Income-tax when that measure was first brought forward by the Government, but considering the present condition of the country, and considering that it was now in operation, he certainly would not advocate a repeal of that tax during the present Session of Parliament. But he would ask the Government to have recourse to those means which, if judiciously applied, would at once relieve the country, and which, if immediately adopted, as they might be with perfect safety and advantage, would act as a relief to the consumer as well as to the commercial classes. Sorry, then, was he to learn, from the distinct information which had been given by the Government, that it contemplated, for the present, no alteration in the duties on sugar. When he remembered the statement which had been made in the last Session of Parliament by a Member of the Government, that this was a measure which was likely if properly approached, to contribute more than any other, to afford substantial relief, in the depressed state of our trade and manufactures; he could not but exceedingly regret, that, if such were the case, instead of this substantial relief being immediately afforded to the country, it had been intimated that it should not be considered this year. The consequences of this delay have already been calamitous. Our attempted negotiations with Brazil have entirely failed. With this prospect before us, and the certainty that our failure there was occasioned by our own restrictive measures, he deeply regretted that the Government seemed still indisposed to modify the duties on sugar. He did not undervalue the commercial reforms of last year; on the contrary, he was happy to be able to bear testimony to the many benefits they had conferred. But the Government stopped short too suddenly in its career of reform. If it had dealt wisely with the two articles of corn and sugar, it would have done far more for consumers and for the country, than by all the other measures of reform and modifications it had introduced. The same might be said with regard to the timber duties. The duties on this article had been dealt with in a manner sufficient to satisfy the country, that the Government did not intend to extend relief to the consumer; but rather to keep up a discriminating duty in favour of the colonies, and so it was precisely with the sugar duties. He found that sacrifices were demanded from the nation by those whose interests were concerned in the maintenance of monopoly, and these sacrifices would be made to keep up the discriminating duty in favour of colonial sugar. If that was to be the manner in which we were to conduct our commercial reforms, we should succeed in rapidly drying up all the sources of our revenue flowing through the customs, and we should speedily be driven upon that system of direct taxation to which the tardy and illiberal measures of the Government were rapidly impelling the people of this country.

Sir Robert Ferguson

would detain the committee a very short time, while referring, as briefly as possible, to the question of the additional duty on Irish spirits, from which the Government had expected an increase to the revenue of 250,000l. a-year. The Chancellor of the Exchequer had that night spoken as if he had obtained an increase of 56,000l., and the Member for Portsmouth (Mr. Baring) as if the increase had been 40,000l.; but he must remind the committee that the Chancellor of the Exchequer had carefully left out of sight the quarter ending the 5th of April, and it would appear that the produce of the spirit duty in Ireland for the year ending April 1843, was absolutely less than that ending in April 1842, by nearly 8,000l.; or, to state it more fairly for the Government, if from 243,948l. the revenue derived from Irish spirits for the quarter ending April, 1842, there were deducted 19,226:l., for the 384,533 gallons on which the additional duty of 1.s., imposed on the 10th of March, 1842, had been paid, the revenue for that year, assuming that all the spirits consumed had paid 2s. 8d. duty, would have been 870,524l., while that for the year ending April, 1843, was 882,489l., being a miserable increase of 11,965l. in that most favourable point of view. But the right hon. Gentleman the Chancellor of the Exchequer had argued that a diminution in the consumption of spirits in Ireland was not an uncommon matter in Irish finance, and that the revenue was affected by the temperance movement; but the great effect of the efforts of Father Mathew was felt in the years 1839, 1840, and 1841, in which latter year he visited the counties of Leitrim, Donegal, &c. In the quarter ending October, 1841, the diminution was only 60,709 gallons: in that ending January, 1842, 44,251 gal-Ions; while in that of the 5th of April, 1842, there was an increase of 43,403 gallons over the corresponding quarter of the preceding year, which was pointedly alluded to in the financial statement of the right hon. Baronet (Sir R. Peel), last year; but what had been the returns of consumption during the year ending April 1843? In the July quarter there was a diminution of 412,998 gallons; in the October quarter, of 402,300; in the January quarter, of 422,998; and in the April quarter, of 477,605; making a total decrease of 1,715,901 gallons, against 301,652 in the preceding year. So much for the effects of the new duty on consumption. The right hon. Gentleman could not account for this by the spread of temperance, which had extended into no new district during this period; but that it must be attributed almost entirely to illicit distillation was proved by the returns, which gave 684 persons convicted of offences connected with illicit distillation during the last six months, and 368 persons in the gaols in Ireland on the 5th of April last, being a larger number than had been in them for those offences on the same day during any one of the last nine years, or since the repeal of the high duty in 1834; and all this misery and demoralization had been occasioned by a change, producing under the most favourable mode of stating the account, not 8,000l. a-year. At that late hour he would not enter on the question in respect to its effect on the morals of the country; but the subject must again be brought to the attention of the House before the conclusion of this Session.

Mr. Milner Gibson

said, it had been the habit of some right hon. Gentlemen to take advantage of the slightest indications of delusive prosperity in the manufacturing districts, to paint too highly the state of those districts, as a reason for making no further changes in the import duties of the country. He would allude to what had been made by the hon. Member for Yorkshire (Mr. S. Wortley), on the great importance of taking off the cumbrous duties, which now acted as a serious drawback upon the importation of the raw material. It had frequently been admitted in the House that a prudent policy dictated the immediate abolition of these imposts—but the matter had hitherto been met, when pressed upon the Government, with some ready excuse. There was no excuse, now, however, which the Government could assign as an impediment in the way of the reduction of the duties on raw material. It was now in its power to secure an efficient increase to the revenue by reducing the import duties on raw cotton. By this means new sources of revenue would be opened to the Exchequer. The noble Lord the Member for London had said, and said truly, that by a reduction of the duties on sugar, new and lucrative sources of revenue would be opened to the Government. It would be absolutely necessary that something should be done to lower the duties on cotton; for, considering the competition which now existed between various parts of the world in the manufacture of that article, it was impossible that, with safety to our commercial interests, these duties could any longer be continued. The American was fast becoming a manufacturer, and he possessed immense advantages over the manufacturers of this country in the price of cotton. These advantages would render it impossible for us to maintain ourselves in many of the markets of the world, and more particularly the American market, if we persevered in keeping up the price of our manufactured goods, by the continued maintenance of a high duty on the raw material. We must, to ensure his safety in the markets abroad, give our manufacturer the benefit of an immediate reduction. What would the manufacturing districts say when they learnt the financial scheme of her Majesty's Government. Already were their prospects full of gloom and fearful apprehension, and the postponement of all expected measure of relief would tend to deepen that gloom and render their apprehensions still greater and less remote than they were. The right hon. Baronet at the head of her Majesty's Government had raised expectations in the manufacturing districts which the Government seemed to evince no intention of realising. He had heard that right hon. Baronet himself assert that it was objectionable in any Minister to excite hopes which were to end in disap- pointment, and yet the country had been entertaining the most sanguine expectations in regard to a reduction in the duties on sugar—expectations which the language of the Government itself had mainly tended to create. Mr. Ellis was sent out to Brazil to negotiate a treaty with that important commercial power; and we were told, that whether Mr. Ellis succeeded or not, it was the intention of her Majesty's Ministers to pay a due regard to the suffering interests of the consumers and traders of this country. Was the Government, therefore, not chargeable with the very objectionable procedure of exciting hopes in the country, which it cruelly disappointed, by refusing to remove those duties during the present Session of Parliament? The manufacturer was as directly interested in this reduction as he was in the removal of the duties on raw cotton. The one prevented him from entering the foreign markets in as favourable a condition for successful competition as he would otherwise be enabled to do; while the other part of our system of import duties, on the productions of foreign countries, prevented the cotton manufacturer from getting returns for the goods he might export. He would appeal to the Government, on viewing the whole case, in order to induce it, if possible, to move forward in this matter, and was sure that the rural Members who at present supported it would not withdraw their support, if the Government, in consideration of the suffering and depressed state of the country, proceeded to the immediate accomplishment of measures of commercial reform.

Mr. Wawn

wished to ask whether Russian vessels loading coals in this country and carrying them to Russian ports, were chargeable with the same duty as our own vessels?

Mr. Gladstone

replied that that matter had been referred by the Government to the law officers of the Crown, under whose consideration it now was. The pending treaty with Russia was postponed until their decision was known.

Captain Jones

called the attention of the House to the fact, that they had gained 10,000l. on the spirit duties at the expense of placing 387 men in gaol for illicit distillation. It was a mistake to suppose that illicit distillation would be put down unless they returned to the 2s. 6d. duty.

Mr. Ewart

wished to know whether the same offer as was made to the Brazils to reduce the duties on sugar had been made to Cuba or Haiti? There was another subject to which he wished to call attention, he alluded to the proceedings of the commissioners on the Property-tax. People had been summoned from a distance, and kept waiting on them for many days. He had known many instances of persons losing a great deal of time, and suffering great inconvenience.

Sir Robert Peel

thought it was better to reserve all discussion on the sugar duties till the subject came regularly before the House, when the Government would state its views. It was impossible for him to state to the House what propositions had been made to different coun- tries, or whether any had been made. When the whole subject was brought forward, the Government would be able to state all the circumstances of the case with more advantage to the public service.

The Chancellor of the Exchequer

assured the hon. Gentleman that the commissioners of the Property-tax performed their duties very carefully, and, obtaining no remuneration for their labour, were generally anxious to despatch their business as quickly as possible.

Resolution agreed to.

House resumed.

The House adjourned at half-past eleven o'clock.