WAYS AND MEANS.

HC Deb 23 April 1855 vol 137 cc1629-58

THE CHANCELLOR OF THE EXCHEQUER

brought up the Report of the Resolutions agreed to in Committee of Ways and Means.

On the First Resolution being put,

MR. GOULBURN

said, he hoped as he had been unable to attend on the evening when the Budget was brought forward, that the House would excuse him for now offering some observations on the course taken by his right hon. Friend the Chancellor of the Exchequer with reference to the raising of a loan. It was not his intention to offer any opposition to the confirmation of the contract into which the right hon. Gentleman had entered. Abstractedly considered, the loan appeared to have been contracted on terms fair to the contractors, and not unfair to the country; but as he thought the House must be prepared to anticipate that in future years they might be called upon for a repetition of the process of raising money by loan, he was anxious to point out the objections to which the present arrangement was liable in order to prevent the inconvenience which would result from the continued adoption of the same system. If he could believe, with his right hon. Friend the Chancellor of the Exchequer, that the Parliament, on the arrival of peace, would be prepared to apply a surplus of 1,000,000l. annually to the redemption of the debt now to be incurred, and to apply the same principle to every future loan, then he should have no objection to make to the measure, but as he did not believe this, he could hardly persuade himself that when his right hon. Friend came to consider what experience had pointed out as the reasonable objections to the course proposed, he would still be disposed to persevere in it. He must say that he doubted the justice of the Resolution, against which applied with still greater force the objection usually brought against loans, that they threw the whole burden upon posterity, whilst the parties borrowing derived nothing but the advantage. But if they threw the entire burden, not merely of the increase of the debt caused by the loan, but of the redemption at the rate of 7 per cent upon posterity, they enhanced the objection heretofore raised to the system of loans. But let them consider whether it was in the least degree probable that on the arrival of peace Parliament would be prepared to fulfil the engagement into which they were called upon to enter, to raise above what was required to defray the annual expenditure, an additional revenue of 1,000,000l. annually for sixteen years for the purpose of repaying the capital borrowed. He would ask hon. Gentlemen whether it was probable, from the experience of past years, that such a plan would succeed. When he first sat in Parliament many hon. Members, thoroughly acquainted with financial matters, advocated the establishment of a sinking fund, and the House adopted a solemn Resolution by which they declared that 5,000,000l. a year should without fail be set apart for the redemption of the debt. Now, did Parliament adhere to that Resolution? Quite the contrary. Two years afterwards their confidence failed them, and the House declared that 3,000,000l. a year should be set apart for that purpose; but they observed that Resolution with just as much punctuality as they had done the first. In the end, the only mode adopted of reducing the funded debt was by comparing quarterly the amount of revenue with that of expenditure, and applying any surplus to its redemption. As the custom had been to apply this to the payment of deficiency bills, the surplus which was intended for the reduction of debt had been generally used to eke out the revenue of a deficient quarter. How, in the face of this, could the Chancellor of the Exchequer hope that on the restoration of peace Parliament would raise an additional revenue for the purpose of paying off debt at the rate of one million for every sixteen used for carrying on this war? He therefore hoped his right hon. Friend would abandon the Resolution by which he proposed to lay on this increased burden for the repayment of the debt for that Resolution as it stood could not deceive any persons who were conversant with the financial system of the country. As the loan was in Three per Cent Consols, he was bound to take it as an irredeemable annuity to the amount of somewhere about 500,000l. a year, and it was as an irredeemable annuity that he objected to it. They were about to impose on the country for ever the charge of 500,000l.; and if succeeding leans were contracted on the same principle, a burden would be imposed on the country from which there was no hope of relief. It was perfectly true that, technically speaking, the Three per Cent Consols were redeemable; but twelve months' notice was required before any alteration could take place; and he would ask any man conversant with financial affairs where he could find a Chancellor of the Exchequer bold enough, in the circumstances in which the country might find itself placed, to give twelve months' notice that at the end of that period he would be prepared to deal with that large amount which the Three per Cents offered to the operator. He contended, therefore, that the funds must be regarded as practically irredeemable annuities. It was the first duly of the Minister entrusted with the management of the finances to apply himself, as far as possible, to the reduction of the burden which the national debt imposed on the country. He could only do this in one of two modes—by applying a special revenue for the reduction of the capital of the debt, or by availing himself of those reductions of interest which might take place from time to time in the general market, and thus relieve the public of part of the charge of the debt. Exactly in proportion to the difficulty of the operation was the duty incumbent on us to take care that we did not throw away a favourable opportunity of reducing the interest of the debt, and it was in that respect, he thought, his right hon. Friend had erred. He knew he might be told that Mr. Pitt, who was acknowledged by all to be a great master of finance, raised his loan by offers of Three per Cent Consolidated Annuities, but the circumstances under which Mr. Pitt acted were totally different from those which existed at the present time. Mr. Pitt had no other fund open to him of sufficient amount to enable him to borrow on it with advantage. The whole amount of Consols at the commencement of the last war did not exceed 100,000,000. But the present Chancellor of the Exchequer had far larger funds open to him in other Stock, and he believed his right hon. Friend the Chancellor of the Exchequer would have acted a much wiser and safer part if he had made an offer of this new loan in the Three per Cent Annuities, which represented a capital of 250,000,000, and were capable of redemption in the year 1874, rather than in the Three per Cent Consols, which, as he had already shown, were in fact irredeemable. The consideration was one of vital importance to the future interest of the country. He maintained that we ought to purchase the power of redemption in twenty years by some sacrifice of immediate interest, rather than entail on ourselves and on posterity the burden of a perpetual charge. The theory of the plan of raising money by annuities, was that at the expiration of a certain period the whole sum they had borrowed would be discharged, and to secure that advantage the borrower consented to pay a considerable additional interest above the market rate. If, therefore, for the sake of the extinction of the debt at a distant period, they were willing to raise the terms to be given to the loan contractor, he maintained that it would be good policy to raise the terms to a limited amount, in order to the reduction of interest on the debt when the market rate fell. When he spoke of the reduction of interest, he might be told that he was indulging in a premature speculation; but with his knowledge of the industry and energy of the people of this country, with the great facilities of enterprise possessed by the inhabitants in time of peace, and the great accumulation of capital that was continually taking place, he could not conceal his conviction that if they should be blessed with a long return of peace, the interest of money would be at a far lower rate than it stood at the present moment. He trusted, therefore, that they would take care not to divest themselves of the possibility of effecting a reduction of interest, of which they had already experienced the benefit. In making these observations he did not forget the difficulties of the Chancellor of the Exchequer's position, and he had been induced to make them chiefly for the purpose of pointing out what he considered would be the most advantageous course to follow in any future loan that might be contracted.

MR. T. BARING

said, he had heard with very great astonishment the objection which had been taken by the right hon. Gentleman who had just resumed his seat, to one part of the scheme of the Chancellor of the Exchequer. If there was one Member in that House on whom he thought he could have relied more than on another for the maintenance of the principle of repaying what we had borrowed, that Member would have been the right hon. Gentleman who had just addressed the House. To his surprise, however, he found that the right hon. Gentleman opposed the clause for applying 1,000,000l. of the surplus revenue, after the peace, towards the extinction of this debt. He opposed the clause which said that, when we borrowed in a time of exigency, we should pay when we had the power to do so, which said we should borrow for the purposes of war, but that when peace came we should show our good faith by being careful to pay. He confessed he saw no good reason, because we had not hitherto adopted the system of repaying what we had borrowed, that the House should now refuse to pass a Resolution expressive of its honest intentions. It was no argument to him that, because they had before abolished surplus revenue applicable to their past debt, they should not now, in making another loan, assert the principle that in time of peace they should pay the debt incurred in war. It was nothing to him that because this House of Commons was honest, there might be another House of Commons that would not be equally so. The ground on which he supported this clause of the Chancellor of the Exchequer, which he hoped the right hon. Gentleman would not be induced to give up, was that he thought it important to lay down as a principle the rule that, while in times of emergency, of exigency, of war, and of trial, debt must necessarily be incurred, it became the first duty of Parliament and of the Government, when the means recurred of filling our coffers, to diminish that debt by the application of our surplus revenue. The right hon. Gentleman (Mr. Goulburn) asked the House to see how delusive past Resolutions had been on this subject. No doubt good intentions often were delusive. but he never knew it inculcated as a moral precept in consequence, that there never should be good intentions. The duty of the House was to say we should refrain from borrowing as long as we could, to lay no burden and impose no obligation on posterity if it were possible to avoid it; but that, when we must necessarily borrow, to do so with the honest intention of reducing the debt as soon as practicable. The right hon. Gentleman seemed to think there would be no possibility of carrying out this Resolution, that there would be such a pressure on the Government that any surplus which might exist would be extinguished; but, though precedent might be against him, he would still cling to the hope that we should find a Government strong enough and honest enough to resist the pressure that might be made for excessive reduction. It had always appeared to him that there was little wisdom in what had been termed an "ignorant impatience of taxation." It was necessary, if we wished to maintain public credit that we should maintain a surplus revenue; and it was equally necessary that, if we wished to be honest, to apply the surplus revenue obtainable in a time of peace and abundance to the extinction of debt incurred in periods of emergency. He would not enter upon the question whether we could have borrowed better in the Three per Cents Annuities, which are redeemable in 1874, but would only say, that the Minister of the day would in all probability have enough to do with the 250,000,000l. which would then stare him in the face, without encumbering him with greater difficulties. He believed the plan of the Chancellor of the Exchequer to be just and honest, and, considering the time and the circumstances in which the arrangement was made, not only creditable in its terms, but likewise advantageous for the Government. His right hon. Friend the Chancellor of the Exchequer bad gone on the principle that during thirty years the nation should pay 14s. 6d. for every 100l. of money borrowed. He must express his hope that the Chancellor of the Exchequer would persist in the clause for applying 1,000,000l. annually to the repayment of the loan, inasmuch as it would record the Resolution of the House to apply this amount out of the surplus revenue to that purpose after the restoration of peace. He did not know how far the constituencies were likely to be favourable to that addition to the taxation; but he hoped the scheme of his right hon. Friend might be carried out. He had been surprised to hear the hon. Member for Wick (Mr. Laing) the other night say that the right hon. Gentleman might with the greatest ease have obtained his money in terminable annuities. It was very well in theory or in the closet to say that it might have been so obtained easily. But in all contracts there were two sides, and you might no doubt find a seller with opinions that this would be the more just course, and the more advantageous for the country, but, on the other hand, you must find your buyer, and if you wanted the money you must offer a commodity that would be dealt in. He must confess his doubt that the right hon. Gentleman the Chancellor of the Exchequer would have been able to obtain it on those terms, except by making some great concessions and sacrifices, which would have been at once repudiated by the House and the country. The hon. Member for Wick also referred to the large sum of money borrowed for the French railways in annuities, for a term of ninety-nine years, but he forgot to say that it was not a question of fixed rental but of fluctuating profit in that case, and that the parties lending entered into a commercial speculation. It would be impossible that Government affairs of finance could be conducted in that way, and to parallel two ways of raising money for different objects, and with different terms and inducements, seemed to him a notion utterly preposterous. The hon. Member for Wick likewise recommended them to try the plan of subscription, as had been done in France; but in that country there was a large class of proprietors of small means, who, having before their eyes the dread of such revolutions and public calamities as they had witnessed in their own country, were anxious either to hoard their money or to lay it out only in what they thought a secure investment upon very favourable terms. The French, too, as a community, were a more saving people than the English. The people in the interior of France had, and still have, a great deal of money divided amongst the great mass of the people, either hoarded, or, at any rate, employed at a very low rate of interest. But the same thing did not exist in England. The owners of small sums of money were here not only more intelligent but also more enterprising; they generally invested their savings in something that would give them a good rate of interest. The French Three per Cent Loan was negotiated at 62; could the Chancellor of the Exchequer have offered the same inducement here? He could have, at the most, offered 3½ per cent, and did the House think that persons holding small sums would have diverted them from existing investments and subscribed them to a loan at 3½ per cent? He did not believe that the Chancellor of the Exchequer could have raised his loan either by terminable annuities or an open subscription; but by inserting the clause they were then discussing, he had done what he could do in order to comply with what he felt to be the true policy of this country—that we should continue a surplus income in time of prosperity in order that we might apply it to the diminution of our debt.

MR. GLADSTONE

said, he concurred in two important points to which the hon. Member for Huntingdon (Mr. T. Baring) had just adverted. He was firmly convinced that it would not be possible for the Chancellor of the Exchequer to contract for so large a sum of money as he required upon the terms of terminable annuities except at prices wholly extravagant and disproportionate. He thought, likewise, that he had done service to the cause of truth and to his right hon. Friend the Chancellor of the Exchequer in saying that which he hoped would tend to dissipate the delusive opinion which prevailed—namely, that it would be competent for the Chancellor of the Exchequer to adopt the mode of proceeding with respect to the loan which had been so wisely taken in France—an opinion which he thought could never be en- tertained by those who had made a careful estimate of the great difference which existed in the circumstances of the two countries. But he (Mr. Gladstone) considered that it was not just to his right hon. Friend the Member for the University of Cambridge (Mr. Goulburn) for the hon. Member for Huntingdon to comment as he had done upon the observations that had fallen from him. He was, however, glad to find that the hon. Member opposite and his right hon. Friend both concurred in holding the opinion, that it was the duty of Parliament in times of peace to maintain a surplus revenue for the reduction of the national debt. He knew the opinion of his right hon. Friend, not only from his words, but from his deeds when he held the office of Chancellor of the Exchequer, for while he held that office it was a main object with him to create a large surplus revenue applicable to the reduction of debt from year to year. That, however, was not the point of difference between the hon. Gentleman (Mr. T. Baring) and Ids right hon. Friend (Mr. Goulburn). He did not believe that there was a man in that House more disposed to exercise his influence for the creation of a surplus revenue than his right hon. Friend. The question, however, was this, not whether they were to have a surplus revenue in time of peace, but whether this clause would really assist the Chancellor of the Exchequer in the attainment of his object. The right hon. Gentleman said that this proposition was but the assertion of a principle. Now, he (Mr. Gladstone) ventured to say on Friday night, what he would now repeat, that he respected the motive and object with which the right hon. Gentleman introduced his proposal. He was convinced that the object of the right hon. Gentleman was most honourable to himself, and that his desire was a large application of the revenue from year to year to the principle of reducing the debt. But would the right hon. Gentleman attain that object by means of a clause of this description? That was the question for discussion upon that occasion. What did the right hon. Gentleman mean when he said that this was but the assertion of a principle? He apprehended, when Parliament wanted to assert a principle, in the sense of a solemn expression of their conviction, the proper place for doing so was not in a clause but in the preamble of a Bill. That was the usage of the Legislature upon all occasions. But what was the use of Parliament enacting a clause for a purpose to which it was not in its power to give effect? This clause purported to be a contract or pledge. Now, there were two things requisite in respect to a contract or pledge. First, it should be given to somebody; secondly, it should be given by somebody who had a right to give it. But a future Parliament might very reasonably question the right of that Parliament to pledge it. But the clause not only asserted the principle that a certain surplus was to be applied by a future Parliament, but it actually specified the particular amount of money to be applied and the form of investment. Now, a future Parliament might naturally say that they were better judges of this matter than the Parliament that had enacted such a clause. Upon what principle was the Parliament of 1855 to say that 1,000,000l. a year must be applied in a particular way by the Parliament of 1860 or 1870? They were there to find supplies and money to meet the national exigencies for our own times, and not for the time of our children. That was not their business. They would not ensure the attainment of their object by dictating in this way to a future Parliament as to the manner in which they were to exercise their discretion. He would point out another great disadvantage which attended this mode of proceeding. They provided that this 1,000,000l. sterling should be applied to the redemption of the debt at a future time, and also to the redemption of Consols. How could they tell now, whether in the year 1860 or 1870 it would be wise to apply this money as was proposed in the redemption of the stock? It might be preferable to redeem Exchequer bills or Exchequer bonds or other stocks. But here was an Act of Parliament of 1855—utterly ignorant of the circumstances under which the money was to be applied in successive years—actually dictating to a future Parliament the policy they ought to pursue, and appointing a mode of investment under circumstances of which they could have no knowledge whatever. The question was this—were they likely to promote the maintenance of the principle of a surplus revenue by an Act of this kind? However much he respected the motives of his right hon. Friend the Chancellor of the Exchequer, he confessed he inclined to the opinion that the Parliament would do much better to rest satisfied with the performance of its own duty, and not undertake to lay down a particular policy to a future Par- liament. He must not be told that enactments of this nature were harmless. Enactments of this kind had a tendency to throw dust in the eyes of the people, and to create an undue facility for unnecessary loans. These were extremely grave questions. For his part be thought the more straightforward and better course would be to be as explicit as possible in all their proceedings involving the disposal of the money of the people. They ought not to attempt to express what was called a principle, but what was really a mere paper promise of repayment, which they had no right to bind others to fulfil. Before sitting down he wished to draw attention to an inadvertence that occurred in the proceedings of the Committee on Friday night. Upon consulting the Votes on the following morning he found that the Resolution relating to the loan, the Customs, and the Excise duties, had, in conformity to previous practice, been voted by the Committee. It appeared, also, that the Resolution affirming the principle of the new income tax was also voted at the same time. He apprehended that the principle of discussing all proposals relating to taxation in Committee of that House, upon their introduction, was one of the most precious and important privileges of the House. The House, with good sense, sometimes waived the principle of discussion in cases where propositions relating to taxation were absolutely necessary and urgent. There was, however, no reason of this kind at all applicable to the Resolution proposing an increase in the income tax. There was no proceeding to be taken which depended in the slightest degree upon the passing of that Resolution on Friday night. The same observation applied equally well to the proposed stamp duty upon bankers' cheques. The usage was to give time to the House, after hearing the statement of the Chancellor of the Exchequer, to consider such proposals before they were called upon to proceed to any Vote. The right hon. Gentleman the Member for Buckinghamshire (Mr. Disraeli), when he made his financial statement in December, 1852, not only did not press the House for any Vote, but it was actually in the first stage, in the preliminary Committee, that his proposals were resisted and rejected by a majority. The present departure from the usual practice had, no doubt, happened inadvertently, but the point was of such grave importance that he had felt it his duty to enter his protest against it. He, however, must express a hope that this evident error would not hereafter be drawn into a precedent.

MR. JOHN MACGREGOR

said, that the Chancellor of the Exchequer ought to have thrown the loan open to public competition, and he considered that the right hon. gentleman might have raised 20,000,000l. on terminable annuities at less than 4 per cent., which, with 3,000,000l. of Exchequer Bills, would have given him all the funds that he required, without having recourse to the imposition of increased duties on tea and coffee. He quite agreed with his right hon. Friend the Member for the University of Oxford (Mr. Gladstone) that the House had no right to pledge a future Parliament to the repayment of 1,000,000l. per annum of the debt now incurred.

MR. LAING

said, he rose to correct the misapprehension into which the hon. Member for Huntingdon (Mr. T. Baring) had fallen in respect to the argument which he had used on Friday night. He did not on that occasion contend that this loan should have been raised by terminable annuities only. The great object which he had then urged against the Chancellor of the Exchequer's scheme was founded on the creation of so large an amount of debt in the ordinary 3 per cent. Consolidated Stock, and he had simply represented that it would have been possible for the right hon. Gentleman to have raised an equally large amount either by a system of terminable annuities, or by the creation of stock at the market rate of interest which the Government credit would have commanded at the time, viz., at 3½ per cent. Another very serious objection which he felt to the right hon. Gentleman's proposition was, that as the Three per cents were, to a great degree, the barometer which regulated the state of our national credit, owing to there being always a large amount of trust and other moneys of the same description ready to be invested in them, the result of adding so largely to this description of stock would be to make the other securities range at a lower rate than they otherwise would do. Had not the price of Consols been unnecessarily depressed by the sale of savings' bank stock, and had the loan been proposed in some other description of stock, Consols would, he had every reason to believe, have stood some 3 per cent. higher than they did at the present time. But a fall of one per cent. in the price of Consols was equivalent to a diminution of about 10,000,000l. in the value of the whole national securities, and a scheme which, for the sake of getting only 16,000,000l., caused even a temporary diminution in the aggregate value of the national property to the amount of some 25,000,000l., could not be a very good one. Except in case of great urgency any addition to the Three per Cents ought to be avoided. In his opinion, it would have been practicable for the Chancellor of the Exchequer to have resorted to the plan of terminable annuities, and it was for the purpose of showing that they were quite as marketable as any other description of security that he had on Friday quoted the case of the French railways, where there was somewhere about 100,000,000l. of property invested entirely in terminating stock. It was a mere question of price, and, though no doubt a considerable present sacrifice would be inevitable, yet now that we were in all probability at the commencement of a new series of loans, it was well worth trying whether they could not be advantageously effected in terminable stock. The Chancellor of the Exchequer might easily have ascertained from the great moneyed corporations at what price they would effect such a loan; and, if the sacrifice had appeared too great, he would then have had the other alternative open to him of effecting it in Three-and-a-half per Cents, by which means, though no actual reduction of debt was secured, yet there would have been a prospect of effecting at some future period a reduction in the interest. The hon. Member for Huntingdon had evidently misunderstood the argument of the right hon. Gentleman the Member for the University of Cambridge (Mr. Goulburn). The right hon. Gentleman did not object to the principle of attempting to reduce the debt, but to a mode of doing so which he considered would be entirely illusory. If the Government were in earnest, let them embody this principle in the very terms and essence of the loan, and then the performance of the obligation so imposed could not be shrunk from without their committing an act equivalent to national bankruptcy. They certainly ought not to burden posterity with a perpetual charge of this description; but he (Mr. Laing) could not be a party to the creation of a mere fictitious guarantee for the repayment of this loan, which, when it came to be tested, would not hold water.

MR. JAMES MACGREGOR

said, that the hon. Member for the Wick Burghs (Mr. Laing) had quoted as a parallel to this loan the raising of a large sum of money on the French railways, upon which 100,000,000l. were borrowed in what the hon. Member called terminable annuities. Now, the fact was, that the profits on the French railways were so large that they enabled a considerable sum to be regularly laid by for what was termed an amortissement of the capital, by which means the parties who subscribed the 100,000,000l. received back again, on the expiration of the lease, the whole amount of the capital they had previously invested. It would be well for the unfortunate holders of railway property in England if they could receive back their original capital. With regard to the contract which the Chancellor of the Exchequer had entered into for this loan, it was only fair to say that, in the difficulty in which lie had been placed in having to borrow 16,000,000l. concurrently with the imposition of additional taxes, the right hon. gentleman had conducted the operation in a highly satisfactory manner, and that its execution reflected upon him the greatest credit.

MR. THOMSON HANKEY

said, he had heard with much astonishment the objection stated by the right hon. Gentleman the Member for the University of Oxford (Mr. Gladstone) to that House, pledging itself to the redemption, at a future time, of the loan now to be raised. Why, that was precisely the same course which that right hon. Gentleman himself pursued last year when he raised a certain sum upon Exchequer Bonds, and asked the House to agree to a certain amount of taxation to afford him the means at a subsequent period of redeeming those bonds. Thus the House was involved in a pledge to maintain a certain amount of taxation to enable it to fulfil the engagement into which it had entered; and it was no more than what the present Chancellor of the Exchequer asked them to do in regard to the repayment of this loan. He quite agreed with the hon. Member for Huntingdon (Mr. T. Baring) in thinking that although no doubt a future house of Commons might reverse the decision to which they came on the present occasion, yet that it was not inconsistent with their duty to give the best pledge in their power for the honesty of their intention, when peace should happily be restored, to maintain such an amount of taxation as would admit of the gradual reduction of the national debt to the point at which it stood before the contraction of this loan.

MR. WILKINSON

said, he doubted the wisdom of the House now entering into a pledge to be fulfilled hereafter, when the circumstances of the country might be altered in a manner which it was Utterly impossible for anybody now to foresee. With regard to the creation of a 3½ per cent. stock, as suggested by the hon. Member for Wick (Mr. Laing), that course, in the present state of monetary affairs, would not, he considered, have been expedient.

MR. CARDWELL

said, that he had heard with some surprise the remarks of the hon. Member for Peterborough (Mr. T. Hankey), for if two things were perfectly distinct they were these: one for the House of Commons to do a thing at a particular time, and the other for them to enter into vague paper promises which they themselves had no power to perform. Besides, the case referred to by the hon. Member was otherwise different from the present loan. When the Exchequer Bonds were issued, the condition for repayment within a certain period was a stipulation entered into with the lenders—it was part of the contract, and was not therefore likely to be broken. The taxes, therefore, imposed to meet it were sure to be maintained. But what the right hon. Gentleman the Member for the University of Cambridge (Mr. Goulburn) contended was, that this clause would not constitute any obligation on the public; that it would merely act as an opiate, inducing them to believe that this was a mere temporary loan, and that provision had been made for its repayment in time of peace, although at the same time we knew that, except in the formal words of an Act of Parliament, no such provision had been made, because it was not in our power to make any. The hon. Member for the Wick Burghs (Mr. Laing) said that the borrowing of money on terminable annuities was a question of price. No doubt it was. And it Was the duty of the Chancellor of the Exchequer to pursue the requisite Calculations on Matters of price, and to take care that the loan was negotiated on as favourable terms for the public as possible. He believed that the Chancellor of the Exchequer had done so on the present occasion, and that the present loan was negotiated in a manner highly advantageous to the public. As to the expediency of borrowing upon loans terminable on shorter notice than a twelvemonth—in doing so they obtained a substantial return for any additional price they paid to the lender, because it was well known that the condition of giving twelve months' notice presented a serious practical obstacle to the operation of reducing the interest on the debt. It was no sufficient answer to this to say that those loans, the interest of which could be lowered on a shorter notice, were already large in amount; for it was obvious that the greater the proportion of debt over which they could spread a reduced rate of interest, the better would it be for the public.

THE CHANCELLOR OF THE EXCHEQUER

I have, Sir, listened with the utmost respect to the remarks made by my right hon. Friends the Members for the two Universities on the proposal contained in the resolution before the House with respect to the annual repayment of the loan after the expiration of the war. The opinions which they have expressed will command great weight, not only from their financial experience, but from their ability in all matters relating to this branch of the subject. Sir, I fully admit that the Resolution in question is not a matter of contract between the Government and the lenders of the 16,000,000l., and that it is perfectly open to this House to consider this question without placing any limit on the discussion, and to deal with the clause, when the Bill is before them, as they may think fit. But this proposition has been deliberately proposed to the House by the Government, as they believe it to be a proper and defensible proposition, and when the proper time conies they will feel it their duty to adhere to, and to take the sense of the House upon it. I cannot but think that there has been some misapprehension on the part of my two right hon. Friends as to the precise effect of the proposition in question. On Friday night, when I had the honour of explaining its nature, what I distinctly stated was, that this House could not make an irrevocable law; that an Act passed by this Parliament might be repealed by a Parliament fifteen years hence; and that we could not do anything which would effectually tie up the hands of our successors. Precisely the same objection that my right hon. Friend (Mr. Goulburn) Makes to this proposition might be made to every Act which passes this House which affects future generations. There is nothing peculiar in the proposition which we make. It cannot control the future discretion of Parliament; but the effect which it would have if it received the authority of law is this—it creates a permanent charge on the Consolidated Fund, and it becomes the duty of the existing Government to make provision for that sum out of the Ways and Means of the year. It will, therefore, be the duty of the Chancellor of the Exchequer, so long as this Act remains unrepealed, to estimate for 1,000,000l. in his annual Budget for the purpose of repaying the loan now contracted. I am perfectly aware that it may so happen that the nation may be engaged in war, or that there may be some pressing necessity which may render it inexpedient that the surplus revenue of a particular year should be applied to the reduction of this debt; if so, it will be in the power of Parliament to untie the hands of the Government, and to repeal, either permanently or temporarily, the enactment which makes it necessary that the Government should provide this 1,000,000l., and to make any provision which they may deem suited to the exigencies of the time; but until Parliament does so interfere, and does so untie the hands of the Government, it will have to make this provision for the extinction of the debt. This is all that it is possible for us to do, for we can in no way place a limit on the future discretion of Parliament. We are unwilling to create a permanent burden on posterity, and circumstances prevent us from borrowing so large a sum as the loan required in terminable annuities. It has been stated by the hon. Member for Huntingdon (Mr. T. Baring), who is entitled to speak with great authority on this subject — and I am satisfied that his statement will be confirmed by all persons who will carefully consider the question—that a loan of 16,000,000l. cannot be effected on terminable annuities without giving terms so extravagant that the Government would be justly condemned if it agreed to accept them. I question whether, without giving terms absolutely extravagant, so large a loan could be effected at all in terminable annuities of thirty years, for there is a great objection on the part of the public to receive hack every year a portion of their capital in driblets, subjecting them to the necessity of expending their capital as income, or of reinvesting it in a troublesome manner in small sums, very often under embarrassing circumstances. These would be difficulties so great that it is very questionable whether so large a loan could be effected at all in terminable annuities. As it was not, therefore, in the power of the Government to effect the loan in terminable annuities, they have gone as far as they believed they possibly could—they have raised a portion in perpetual stock, and they propose at the same time to make it obligatory on the existing Government to apply for 1,000,000l. annually to extinguish the debt so created. I am willing to admit that this is not a paramount authority, and that Parliament has the power to rescind it; but it is impossible for us, without making the repayment of the debt matter of specific contract between the Government and the lenders, to impose more stringent obligations. With regard to terminable annuities, there is this advantage —the repayment of the principal and interest is made a matter of specific contract between the Government and the lenders; but with regard to perpetual annuities this is not and cannot be the case. My right hon. Friend the Member for the University of Cambridge made some remarks as to the expediency of contracting for this loan in 3 per cent Reduced Annuities rather than in Consols, on the ground that the one was redeemable by a year's notice, which, with regard to the other stock, was not the case. He spoke of Consols as being irredeemable; but I cannot help thinking that he confounded two ideas which are wholly different—namely, the reduction of interest on stock and the extinction of that stock; for, if the House should at any time be induced, as I hope it will be, to make a real sinking fund, and not an imaginary and illusory one, founded on the principle of borrowing and the principle of compound interest, I see no reason why Consols or any perpetual annuity should not be redeemed by the Government going into the market and buying up their own annuities, thus extinguishing both debt and interest. I confess I am not very sanguine as to the possibility of reducing—within the lifetime of the present generation—the interest on Three per Cent Stock, but I see no reason why we may not extinguish any amount of stock by annually applying to the purchase of it surplus taxation. My right hon. Friend seemed to speak of perpetual annuities as though they were inextinguishable, and he seemed to contrast terminable annuities as something, the Government can extinguish with perpetual annuities, as something which the Government cannot extinguish; but no error, I must be permitted to say, can be more striking with regard to a mere financial question. Perpetual annuities are convenient both to those who lend and to those who borrow. They are convenient for the Government, because it cannot be called upon at any definite time to pay the principal—they are convenient for the lenders, because they cannot be required at any definite time to receive back their principal; but if the Government is in possession of revenue applicable to the extinction of such debt, it can go into the market and buy up perpetual annuities, and as effectually extinguish them as any other stock. The provisions that have been made at different times for the establishment of a sinking fund have gone on the assumption that they would place the Government in a position to extinguish the debt; but the sinking funds of 1823 and 1827 rendered it necessary that a surplus of 5,000,000l. in one case and 3,000,000l. in the other should be applied in redemption of the debt. I regret that these Acts have been repealed, but I trust that when the war ceases there may be a disposition in Parliament to return to that wholesome system. But let not the House suppose that the existence of perpetual annuities presents any difficulty which impedes the extinction of the debt, or that if they would consent to raise an annual surplus they could not redeem those annuities on the most advantageous terms. Something has been said upon the subject of opening a subscription loan. I entirely concur with the very instructive remarks made upon that subject by the hon. Member for Huntingdon (Mr. T. Baring), who illustrated it by a comparison of the different circumstances of England and France. It is also to be remembered that if we opened a subscription loan in this country we should create a demand upon the savings banks, which we could only meet by a sale of the stock belonging to the Government, and in that manner we should cause a drain upon our own funds. Another circumstance which hon. Members ought not to omit to mention is, that if a loan were raised by subscription, it would be necessary for the Government to fix the price at which they would receive subscriptions. The subscription would necessarily be kept open for a considerable time, and therefore, in order to insure the obtaining of the loan, it would be necessary to fix that amount within certain limits, and the Government would ne- cessarily lose the advantage of competition in the money-market. Even when it happens that only one tender is sent in, as was the case with the present loan, the persons who make that tender act under the influence of competition, and with the knowledge that if the terms they offer are not reasonable others are ready to come forward and offer more moderate terms. I heard with satisfaction the testimony rendered by so great an authority as the hon. Member for Huntingdon with respect to the terms upon which the loan has been contracted. I have every reason to believe from all I have heard since the acceptance of the tender that, while those terms were fair and advantageous to the contractors, they were also beneficial to the public, and that the very onerous responsibility which lies on the Executive Government in contracting a loan without its being possible for them to obtain the previous sanction of Parliament has been met in a manner which will receive the approbation of the House. Some remarks have been made as to its being desirable that the Government, before receiving tenders for a loan, should inform the House of the conditions upon which it is to be offered to the public. I can assure hon. Gentlemen that if the matter had depended merely on the wish of the Government to divest themselves of a somewhat painful responsibility, they would unquestionably have resorted to that course. On examination, however, of the precedents of previous loans and of the possibility of adopting such a course, they found they had no alternative but to adhere strictly to the practice of former times, and to take upon themselves the responsibility of making a provisional contract before they asked for its confirmation by the House. I must express my regret at having inadvertently done anything contrary to the practice of the House with reference to the income-tax resolution, which has been alluded to by my right hon. Friend the Member for the University of Oxford (Mr. Gladstone), I can only say it was entirely owing to my inexperience in such matters. No objection was made when the Resolution was put from the Chair, and nothing was said upon the subject of the income tax. If any objection had been communicated to me I should unquestionably have postponed the Resolution. I am not aware that there is any other point which at present requires explanation. I will only add that a great distinction exists between those conditions of the loan which are matter of contract between the Government and the lenders, to which the Government are in honour bound to adhere, and the provision for the annual repayment of 1,000,000l. That is a provision which is perfectly open to consideration and discussion by the House at any time.

SIR HENRY WILLOUGHBY

said, he thought the loan was on the whole a fair transaction, but he considered that the margin of 5,250,000l., which the right hon. Gentleman (the Chancellor of the Exchequer) took, was, in his opinion, carrying the doctrine of a margin too far. He had always thought the margin was taken in the shape of a Vote of Credit. His (Sir H. Willoughby's) remarks applied as well to the extent of the loan as to the levy of the new taxation. He also thought that the obligation of providing 1,000,000l. a year for the extinction of the loan was not, as the right hon. Gentleman seemed to think, a nugatory obligation. There was, however, a point which he (Sir H. Willoughby) wished to be explained. The right hon. Gentleman had taken credit for 1,000,000l. of Ways and Means as due to the Commissioners for the Reduction of the National Debt in consequence of sales of savings bank stock. The right hon. Baronet, therefore, while contracting a loan in 3 per cent stock, was selling the same stock constantly—that being the stock in which the great bulk of the savings banks funds was invested. This operation had excited a great deal of observation; and its power of deranging the monetary transactions of the country was enormous. He (Sir H. Willoughby) was, as he had said, satisfied with the loan in all respects but one, and that was that it was contracted in Three per Cent Consols on one day, and on the next the right hon. Gentleman had imposed an additional income tax on these annuities.

THE CHANCELLOR OF THE EXCHEQUER

said, that, with regard to the savings-bank money, the Act authorised the Government to direct the Commissioners for the Reduction of the National Debt to sell stock belonging to the savings banks, and to exchange them for any other Government securities. Exchequer bills, although they were temporary and renewable securities, were just as binding upon the Government as securities which had a longer duration; and when the Commissioners for the Reduction of the National Debt sold stock and took Exchequer bills in exchange from the Government, they did not diminish the strength of their securities, but merely varied the form; and it was a mistake to suppose that they thereby endangered the deposits of the savings banks. He had already stated that the loan of 16,000,000l. was as near as possible half the extraordinary expenditure of the year. With regard to terminable annuities, the lenders of money necessarily exposed themselves to the fluctuations that might take place in the amount of income tax. He hoped that ere long a diminution in that tax might take place, in which event these parties would share in the benefit of such reduction. These fluctuations, of course, entered into the calculations of these persons in the offers they had made.

MR. W. WILLIAMS

said, he wished to know whether the Estimate of 86,000,000l. included the cost of collecting the revenue?

THE CHANCELLOR OF THE EXCHEQUER

Yes; I apprehend it does. It includes the whole of the money voted in Supply.

Resolution agreed to; as were also Resolutions 2, 3, 4, and 5.

On Resolution 6, providing that a sum of 1,000,000l. per annum be applied after the conclusion of peace with Russia towards the redemption of 16,000,000l. Consols,

MR. GLADSTONE

said, he wished to submit two points to the consideration of his right hon. Friend. The object of his right hon. Friend (the Chancellor of the Exchequer) was to secure the application of a certain amount of money in time of peace towards the reduction of the national debt. But that object, he conceived, might be attained without adopting the objectionable and awkward course of binding the Commissioners for the Reduction of the National Debt to lay out money in redeeming a particular description of security which it might be most unwise at that particular time to purchase. He would suggest that the clause should give the Chancellor of the Exchequer power to issue his 1,000,000l. a year, and to force the Commissioners to lay out that money in the reduction of some public security until the amount of Government debt had been redeemed equal to the amount which Parliament was about to create—namely, 16,000,000l. That, he thought, would be a practical improvement, and it avoided what might prove to be an inconvenient provision, because it would enable the Government to buy up not only Three per Cent Consols, but any other public security, according to their discretion. The other suggestion was a very friendly one to come from a man who was not favourable to the substance of the clause. He doubted whether the clause was wide enough. The Chancellor of the Exchequer created 16,000,000l. Consols, and the object of the clause was to require the payment of as much money at the rate of 1,000,000l. per annum as would redeem 16,000,000l. of Consols. But Consols might be redeemed from other sources, and in five years after the conclusion of peace there might be 10,000,000l. of surplus in that form, so to be applied by the Commissioners for the Reduction of the National Debt. If so, the Chancellor of the Exchequer would not get 16,000,000l. paid under this clause, for the authority of this clause would cease as soon as 16,000,000l. worth of Consols were redeemed, whether it were redeemed by money under this clause, or by the general application of the law relative to an appropriation of a portion of the surplus revenue towards the reduction of the national debt. He doubted, therefore, whether the clause was strong enough for the object proposed.

MR. T. BARING

said, he thought that the adoption of the first suggestion of the right hon. Gentleman (Mr. Gladstone) would entirely frustrate the object of the Resolution. There was a great variety of Government securities, and the alteration suggested by the right hon. Gentleman would enable the Chancellor of the Exchequer to buy up the Exchequer bonds of the right hon. Gentleman (Mr. Gladstone) when they fell due, or to buy up Exchequer bills if it were convenient to the Government of the day to take 1,000,000l. of them off the market, or the deficiency bills of the savings banks might be taken off the market. The object of the Chancellor of the Exchequer was that, beyond any other claim upon the Exchequer, 1,000,000l. a year should be applied to the redemption of the Consols created by this Resolution. He could not, therefore, understand that there could be any other object in the suggestion made by the right hon. Gentleman than to frustrate that arrangement.

MR. GLADSTONE

said, he thought he was hardly open to the remark, that his object was to frustrate the intention of the Resolution, and he must ask the hon. Gentleman to explain his meaning.

MR. T. BARING

said, he could assure the right hon. Gentleman that he had only intended to say that the effect, and not the object, of the right hon. Gentleman's suggestion would be that which he had described.

THE CHANCELLOR OF THE EXCHEQUER

said, the alteration which his right hon. Friend (Mr. Gladstone) had suggested was not to exclude Exchequer bills or Exchequer bonds or any other description of security, not Three per Cent Consols, from being redeemed under this clause. Perhaps, the House would allow him to consider the suggestion, and, if it should be found desirable to make the change pointed out, it could be done when the Bill was before the House. He certainly did not see any objection to applying the 1,000,000l. a year to the redemption of any portion of the funded debt. With regard to the other point referred to by his right hon. Friend, it was difficult, at the moment, to see what would be the precise effect of the suggestion he had made. It was, of course, desirable to avoid giving the words of the Resolution a wider extension than they would be strictly intended to bear; he would, therefore, consider the point adverted to by his right hon. Friend, and state his opinion respecting it on a future occasion.

MR. W. WILLIAMS

said, that notwithstanding the reply of the right hon. Gentleman (the Chancellor of the Exchequer), it was his belief that the 86,000,000l. did not include the cost of collection of the revenue. That was an important question to be considered. The object of the former Commission was to bring the whole of the expenditure, including the cost of collection, under the notice and supervision of Parliament; and the late Chancellor of the Exchequer deserved the highest credit for the good he had done in that direction. There was no necessity for the suppression of the large amount of the cost of the collection, and if it were added to the revenue accounts it would be found that the sum wanted would not be 86,000,000l., but nearly 90,000,000l. He hoped the right hon. Gentleman would give the House some assurance that this subject should be attended to.

MR. WILSON

said, that all the accounts relating to the expenditure for the present year had been made up according to the old system, which excluded the cost of collection on one side of the account, as well as the gross amount of revenue on the other. For the future, the accounts would show both these items.

Resolution agreed to.

On Resolution 7, relating to the increase of duty on Spirits being read,

MR. WHITESIDE

said, he had to complain of the phraseology adopted in the Resolution, and which in fact involved a species of great injustice to a large body of persons connected with the spirit trade in Ireland. The words of the Resolution were that— Every gallon of spirits of the strength of hydrometer proof, which on or after the 20th day of April, 1855, shall be distilled in Scotland and Ireland respectively, or be in the stock, custody, or possession of any distiller, rectifier, or compounder of, or dealer in, spirits in Scotland or Ireland should be subject to an additional duty. Now, the question he had to ask the Chancellor of the Exchequer was, did he mean that after the passing of this Resolution the new duty should have a retrospective effect upon the stocks in the possession of the dealers who had already paid the existing duty? Because, if that was the meaning of the right hon. Gentleman, a more unjust thing he could not conceive. He did not find fault that the stocks which the coffee dealers and the tea dealers had in hand were to be surcharged.

THE CHANCELLOR OF THE EXCHEQUER

said, the explanation he had to give was, that this Resolution had been drawn up on the same plan as the Resolution for a similar object relating to the increase of the spirit duty was prepared by his right hon. Friend and predecessor last year, and which was then adopted by the House. It was on that occasion declared that the stock in hand should be subject to the increased duty on the same principle that the stock in hand had the benefit in the case of a reduction of duty.

MR. FAGAN

said, he must, though with great respect, beg to deny the statement made by the right hon. Gentleman, that the present Resolution was prepared in similar words to those used in the Resolution of last year. The Resolution of last year did not contain the words "rectifier or compounder of, or dealer in spirits." He was aware that the additional tax was made to apply to the stock in the hands of the distiller, but it was not just to the stock in the hands of the dealer. If, therefore, the hon. and learned Gentleman opposite (Mr. Whiteside) would support him, he would move that the words "rectifier, or compounder of, or dealer in spirits" be expunged from the Resolution.

THE CHANCELLOR, OF THE EXCHEQUER

said, that there existed no doubt as to what was the practice in these cases with respect to the stocks of the distillers, and that the only question that arose was with respect to the stocks in the hands of the rectifiers and of the dealers in spirits. He was not prepared to say whether the practice either way had been uniform. He would take the subject into consideration, and, if the hon. Gentleman would bring the question again before the House, he would be prepared to express his final opinion upon it.

MR. FAGAN

said, he was quite satisfied with the assurance the right hon. Gentleman had just given.

Resolution agreed to; as were also Resolutions 8 to 15 inclusive.

On Resolution 8 relative to the duty on sugar,

CAPTAIN LAFFAN

said, that recently very considerable additions had been made to the duties on sugar in the British possessions, and at the same time very considerable remissions were made to slavegrown sugar. The present addition to the sugar duties was regarded in the Colonies generally as an injustice. The Mauritius, the Colony with which he was best acquainted, was dependent for its prosperity, and, indeed for its very existence, upon having a full supply of free labour from India. It was at first extremely difficult to persuade single men to come from India with the view of realising a competence with which to return to their own country. The agents of the Government in India acting upon, or misinterpreting, instructions received from home, made and enforced a regulation that every Indian leaving India should be accompanied by a woman, which was equivalent to stopping the supply of labour and destroying the production of sugar at Mauritius. Representations were made on the subject to Her Majesty's Government, who proceeded to consider the question, but they were taking so long a time to arrive at a determination that while the matter was being Settled the Colony was being ruined. The Government wished, as every one did, to create an approximation between the two sexes, ut he had no idea that they wished to put a stop to the prosperity of the Colony. He hoped, therefore, that the next overland mail would communicate to the Government agents in India that they had misinterpreted the instructions sent them.

MR. J. BALL

said, it was true that the immigration into the Mauritius, as well as into other Colonies, of a large number of men, increasing enormously the male population, had engaged the attention of successive Colonial Ministers, and it was therefore deemed highly essential that effectual steps should be taken to procure an approximate proportion between the two sexes in those Colonies. In the month of June last, therefore, a letter on the subject had been addressed to the Governors of the more important Colonies, in which, however, there was not one word indicative of an intention to put an end abruptly to the introduction of coolies. No instructions were given by the Colonial Office to the emigration agents in India, but the Emigration Commissioners in this country, to whom the views of the Duke of Newcastle were made known, informed those gentlemen that it was essential that a considerable proportion of women should emigrate along with the men. From the tenor of these instructions he could not think that any officer had taken upon himself arbitrarily to put a stop to the emigration from India to the Mauritius, because there was nothing whatever in those instructions which distinguished the case of the Mauritius from other Colonies. He could assure his hon. and gallant Friend that it was the intention of the Government to forward precise instructions by the mail about to leave, and if any misconception had existed it would be removed. At the same time, the noble Lord now Secretary for the Colonies concurred entirely with those who had preceded him in thinking that immediate and effective steps should be taken to increase the female population of the sugar colonies.

MR. POLLARD-URQUHART

said, that, as a West India Proprietor who had suffered long in silence, he trusted that he might be allowed to protest in a few words against the injustice with which the West India Colonies had been treated. They had been told that in 1854 they would know the worst, and they had made their arrangements in the hope that no further prejudicial measures would be taken against them. In the very first year afterwards extra duties were imposed upon their produce—duties which, in his opinion, would make the whole difference between cultivating their estates with profit or abandoning them with loss. He had had the misfortune to succeed to a West India estate of from 2,000l. to 3,000l. a year; but for the last few years of his possession it had caused him to be 1,500l. a year out of pocket. He had become a free trader greatly to his own loss, and he wished to know why hon. Gentlemen opposite had forgotten on the present occasion those free trade principles which for the last ten years they had been inculcating in the Legislature. In a time of peace they had suffered severely from free trade, and he had to protest against inflicting on them in time of war a gross injustice, and a policy which would certainly ruin them.

MR. E. BALL

said, the hon. Gentleman who had just sat down was one of the strenuous advocates of free trade, and was so enamoured of that beautiful theory that he was willing to sacrifice his interest of from 2,000l. to 3,000l. a year, for which he now paid 1,500l. He (Mr. E. Ball). had opposed the alteration of those duties, not only on account of the loss which would be entailed on West Indian property by the alteration, but also and chiefly on account of the great impetus which would be given to the slave trade and slavery in Brazil. He wished to know whether the Government intended the increase of duty to apply to all sugars, or only to those of Cuba and Brazil. If only to Cuba and Brazil, the proposal would be an excellent one.

MR. J. G. PHILLIMORE

said, he did not rise to criticise the budget, but only to express his deep regret that there should be a necessity for proposing a duty on sugar, which he believed would have a pernicious effect on the happiness and comfort of the lower classes, He did not mean to deny the existence of the necessity, for he had the greatest confidence in the talents of the right bon. gentleman the Chancellor of the Exchequer; but he must express his regret at a necessity which, in a moral point of view, would have most unfavourable results.

MR. WILSON

said, with respect to the complaints of the hon. and gallant member for St. Ives (Captain Laffan) who appeared as the advocate of Mauritius, he had complained rather of the absence of labour than of the condition of the island. With respect to the sugar colonies in general, perhaps there was no British interest which exhibited a more marked example of rapid progress than the island of Mauritius. The very complaint of the want of labour was the best evidence of the prosperity which that island enjoyed. It would be satisfactory to the House to know that in 1844, when Mauritius was in the full enjoyment of a protection amounting almost to an exclusion of foreign sugar, its produce was 27,000 tons per annum. In 1848 it bad risen to 44,000 tons, and in 1854, after protective duties had been reduced, the exportation had risen from that amount to 82,000 tons. There was, therefore, a large increase under the influence of free trade and of a competition which increased year by year. With such a large increase he therefore did not wonder that they complained of the want of labour in that island. The Colonial Office would encourage emigration from India in every way consistent with other interests to supply that demand for labour. Now what he had said, with reference to the prosperity, the Mauritius might with truth be said of the whole of the sugar colonies, though perhaps not to the same extent. Taking the British colonies as a whole, he found that in 1844, when these colonies enjoyed protection, they exported 204,000 tons of sugar to this country. Last year this amount was increased to 290,000 tons. The effect of free trade had been greatly to reduce the price of sugar, and as to the proposed increase, it would only increase the price of sugar to the consumer ls. per cwt. as compared with the price last year. It was not the intention of the Government that the increased duty should apply solely to the sugars of Cuba and Brazil, but to sugars of all descriptions.

MR. BLACKBURN

said, he had the misfortune, like the hon. Gentleman below him (Mr. Pollard-Urquhart), to be a West Indian proprietor, and, notwithstanding all the efforts he had made to improve his property, he had found it gradually becoming less valuable since the alterations in the policy of the Government had been carried into effect. It was quite evident that the increase in the duties now proposed would chiefly fall upon the producer, and he could not believe that it would amount to less than ls. per cwt., or 1l. per ton. Upon 160,000 tons of sugar there would consequently be a loss of 160,000l. a year, and could it be said that the producers were in a position to sustain so serious a loss? He was strongly opposed to supplying the deficiency in our revenue by additional taxes on articles so much used by the poor as tea, coffee, and sugar. It would be better to cut down the Estimates 2,000,000l. than to raise that amount by means so objectionable. The hon. Member opposite (Mr. Wilson) was wrong if he thought that slave-grown sugar had not interfered with free-labour sugar. This country had imported from the West Indian colonies last year 1,600,000 cwt. of sugar, and from Cuba, Porto Rico, Brazil, and other slave-labour countries, 1,700,000 cwt. He believed the proposed increase of the duty would not only tax without any necessity the comforts of the poor, but would also stimulate the production of slave-grown sugar, and inflict a serious injury upon our colonial producers.

MR. HEYWORTH

said, he must complain of the policy of indirect taxation, because if the demand for manufactures was restricted abroad, the means of paying the taxes in this country would be diminished. He agreed that the addition of one per cent. to the income tax, which would produce the amount, would be preferable to this proposition, and he trusted that the House would not sanction the absurdity of resorting to a principle which had over and over again been condemned.

Resolution agreed to, as were also the remaining Resolutions.