THE FINANCIAL STATEMENT.

HC Deb 07 April 1864 vol 174 cc536-619

WAYS and MEANS considered in Committee.

(In the Committee.)

THE CHANCELLOR OF THE EXCHEQUER

Mr. Massey—With a view, Sir, to gather fully the purport of the figures which I am about to submit to the House, it may be well that we should notice, in the first instance, though in a very few words, the particular circumstances which have recently affected the condition of the country. In the financial year 1862–3, we had but an indifferent harvest; Ireland was suffering under lamentable depression, and Lancashire had been afflicted beyond all example. In 1863–4, on the contrary, England at least was blessed with a harvest of unusual abundance; the distress of Ireland was in some degree mitigated, at any rate as regarded the consuming powers of the country, by the low price of grain; and, in respect to Lancashire, the distress which there prevailed had been very considerably reduced, although the district still continued in a condition far below, and sadly different from, that of its usual prosperity and vigour. On the whole, therefore, after considering, on the one hand, the advantages, and, on the other hand, the drawbacks of the year, we may, perhaps, arrive at the conclusion that its circumstances did not differ materially as a whole from those of an average financial year. With this brief preface, I proceed to lay before the Committee the particulars of the statement I have to submit.

And first, in regard to the financial year which has just expired. The expenditure of that year, as it was estimated on the 16th of April, 1863, was £67,749,000; but augmentations, chiefly in consequence of the New Zealand War, and partly in consequence of the payment for the Scheldt Tolls, have been made during the present Session, which raised the amount voted by Parliament to £68,283,000. The actual expenditure under the authority of Parliament was, however, only £67,056,000; or less by nearly a million and a quarter than the sum which the various Departments had been authorized to lay out. As respects the Army, its Estimates amounted to £15,469,000; but its actual expenditure was not more than £14,638,000; and this although a war has, unhappily, been raging in New Zealand, which cannot be deemed to have added less, and may, perhaps, be estimated to have added more, than half a million of money to the military expenditure of the country. As regards the Navy, the Votes for that service amounted to £10,736,000, and the expenditure to very nearly the same sum, or £10,821,000. The Miscellaneous Services were estimated at £7,805,000, and the expenditure was £7,702,000.

Here, Sir, perhaps, it may be well that I should pause for a moment to disabuse the minds of some portion of the House of an impression that has gone abroad with regard to a constant, rapid, and still continuing increase in the Miscellaneous Estimates of the country. The Miscellaneous Services for the year 1859–60 amounted to £7,721,000. In 1863–4 they were £7,702,000; and these Estimates in the present year as they now lie on the table amount to £7,628,000. On the whole, therefore, this portion of the public expenditure has been now for some time almost stationary; for the slight tendency to decrease shown to the extent of £93,000 is too small to be relied on, or to be stated as a fact of much significance. There is another important item of the civil expenditure, which at one period was viewed with peculiar and just jealousy by the House; I mean that called the Packet Estimate. In 1860–1 the House was called upon to vote on that account £1,069,000. I need not say that it is an Estimate upon which it is difficult to operate for the purpose of reduction, as the outlay takes place under contracts which endure for a considerable term of years; but the Estimate which we propose to submit in the present year does not amount to more than £883,000; showing a decrease of £186,000 during the last four years. I do not seek to attach an exaggerated value to these facts, nor do I say we should rest content with them; but I have stated them in order to correct a prevailing impression.

Now, Sir, it is I think desirable that the House should understand what has been the state of our expenditure during the last year in comparison with the expenditure of former and recent years. I will therefore take the expenditure as it appears in the Exchequer accounts, only placing to the debit of the proper years respectively the sums of money called "Excesses," which in those accounts appear under a later year than that to which they properly belong. Taking this view of our expenditure, I find it was in 1862–3, £69,302,000, and in 1863–4, £67,056,000; showing a decrease of £2,246,000. In 1861–2 the expenditure was £70,838,000, and the decrease, estimated in the same manner, would stand at £3,782,000. In 1860–1, when the charges on account of hostilities in China were very heavy, the expenditure was £72,504,000; and the expenditure of the year that has just expired, when compared with that sum, shows a decrease of £5,448,000. If, lastly, I go back to the year 1859–60, which may be called the first of our years of high expenditure, I find that in that year we spent £70,017,000; and the expenditure of 1863–4, as compared with 1859–60, shows a diminution of £2,961,000.

But in order to come more accurately at the state of this important portion of the case, it is necessary to take into view two circumstances. We must bear in mind, upon the one hand, that we have incurred of late years certain charges for fortifications; and, upon the other hand, that both our expenditure and our Revenue have included during the past year a considerable amount—not less than about £1,125,000 —which does not appear at all in the accounts of previous years. When I rectify the balance by the removal of those new charges appearing upon both sides of the account, and therefore forming no real part of the expenditure for the purposes of comparison, and likewise by the addition of the charge for fortifications, the account will stand as follows. In 1859–60 our expenditure was, as I have said, £70,017,000; and in 1863–4, fortifications included, it was £66,731,000; showing, therefore, a decrease, as compared with 1859–60, of £3,286,000.

I do not know whether I need trouble the Committee with a comparison drawn upon the same basis between the year 1863 and the intermediate years since 1859–60. Perhaps that would be laying before them figures that may be dispensed with, when I have quite enough of that commodity to present; and, therefore, I shall not enter into the particulars. But in order to exhibit the case with perfect clearness to the Committee I must not overlook this important element, that in the year 1860 we received, through the providence of our forefathers, the benefit of a very considerable relief from the annual charge of the National Debt. The permanent annual relief which we have been enjoying since 1860 is £2,146,000; but in the year 1859–60, owing to a peculiar arrangement, with which I need not now trouble the Committee, the charge on account of those Terminable Annuities, which ceased altogether in 1860, exceeded that amount. As I stated to the House in the Budget of 1859—and I need not now correct the statement — the charge in 1859–60 on account of Terminable Annuities was £2,540,000. Deducting that sum from the expenditure of 1859–60 for the purpose of comparison with 1863–4, and in order to ascertain how we should have stood relatively if it had not been for that important relief, we find that the expenditure of 1859–60, independent of the charge for these annuities, was £67,471,000, as against £66,731,000 expended last year. That I believe to be a fair comparison. In this point of view the expenditure of last year, as compared with that of 1859–60, shows an absolute diminution of £740,000, independently of the relief obtained by the cessation of the Long Annuities. This sum of £740,000, although it is not a large one, is yet a sum worth taking into notice; and it is the more material because this is the first year in which I have been enabled to state to the House that, after allowing for the relief we have obtained by the cessation of the Long Annuities, our actual expenditure, including fortifications, has been less than was the charge in 1859–60.

I now come to compare the expenditure of the year which has just expired with the Revenue of that year. Here, of course, I refer simply to the Exchequer account; but I will endeavour to supply every needful explanation at each stage, so that, whatever figures I submit, the precise effect of them may be understood by the Committee. The expenditure of the year 1863–4, as it appears on the Exchequer account, is £67,056,000. The Revenue of the same year, as represented in the same account, is £70,208,000, showing a surplus of Revenue over expenditure amounting to the sum of £3,152,000. But, again, in order to estimate that surplus aright, we must take into view the expenditure upon fortifications; because, although the House has deliberately, and as a matter of policy, made a completely separate arrangement for dealing with that expenditure, yet, in point of law, it must appear upon the balance-sheet; and, in point of practical effect, we cannot exclude it from the account. The expenditure upon fortifications for the year has been £800,000; and if we deduct that amount from the surplus ot £3,152,000, there still remains a surplus of Revenue over expenditure amounting to £2,352,000.

Perhaps the Committee will now desire to know in what degree the receipt of Revenue has corresponded with the anticipations which last year they were encouraged to entertain. Last year, with a view to greater precision, I rectified, at the period of the Appropriation Act, near the close of the Session, the estimates which I had made in submitting the financial statement. I then put the Revenue a £68,171,000; the actual receipt has been £70,208,000. The surplus, therefore, of receipt beyond the anticipated amount of income is £2,037,000. More or less that surplus appears in every branch of Revenue; that is to say, in all the heads of receipt which can properly be called heads of Revenue. The Customs, estimated at £22,737,000, yielded £23,232,000, or an excess of about half a million The Excise, estimated at £17,624,000, actually produced £18,207,000; showing an excess of £583,000. The Stamps, estimated at £9,000,000, yielded £9,317,000. The Income Tax, estimated at £8,600,000, gave us £9,084,000; and there are surpluses of smaller amount upon the remaining items of Revenue, with one slight exception, to which I shall presently advert, under the head of China. So much for the general result. But further, I am aware that the House naturally looks with a peculiar interest not only to the aggregate, but also to the detailed receipt of the Revenue from Customs. Because, undoubtedly, whatever may have been the case with the Excise in former years, upon the whole the Customs must be taken as the branch of Revenue which now gives us the greatest number of significant criteria for judging of the condition of the people. The total estimated decrease upon the revenue of Customs last year, as compared with the previous year, when the tea duty had been levied at 1s. 5d. per pound, was £1,297,000. The actual decrease was only £802,000; and this, notwithstanding that the important article of sugar, including molasses, was affected by a partial scarcity, which became sensibly operative during the latter portion of the year. This article, therefore, instead of increasing with the improved condition of the country, has shown a positive decrease of £253,000. Again, there is another branch of Revenue, the decrease of which I always refer to with satisfaction; the Revenue which is derived from the duty upon corn. This item was less in the year that has just expired than in the year which immediately preceded it, by the sum of £225,000; and I need hardly stop to observe that this reduction bears happy testimony to the abundance of our domestic produce, and to the moderation of the price at which the first necessary of life was supplied to all classes of the community.

The article of wine exhibits an increase of £104,000, which I conceive to be, with reference to the recent change in that branch of Revenue, a very satisfactory increase. Spirits show an increase of £285,000, and tobacco an increase of between £200,000 and £300,000. The article of tea, which had been estimated to leave at the end of the year a loss to the Revenue amounting to £1,300,000, shows a loss amounting to only £930,000.

The excess of revenue from the Excise, over the estimate has been large. It has been owing substantially to two causes. In consequence of the partial improvement in the condition of the country, the article of spirits—I mean spirits distilled at home. —exhibits an increase of £250,000; and the important item of Revenue which we derive from malt, in consequence of the almost unparalleled excellence of the barley harvest, shows a greater receipt than was ever known before, and an increase upon the immediately preceding year of £710,000. That, of course, is not an augmentation upon the continuance of which, to an equal degree, we can count in future years; and the Committee ought always to bear in mind that the Estimate of Revenue from the Excise does not appear in the same relation now to the actual Revenue as it did before the malt credits were shortened. In former times, when it was the practice to give from six to eight months' credit upon the Revenue derived from malt, the malting of any given year supplied the revenue for the year following. The effect was that the Chancellor of the Exchequer, when he made his financial statement, knew the amount that was coming due to him, and was in a condition to inform Parliament what his Revenue from malt would be for the coming year. At present, he only knows about one half of it; and to that extent an element of uncertainty has been introduced into the Estimates annually laid before the House on this important and variable article, for which some considerable allowance must necessarily be made.

The only other item of receipt to which I think it right to refer is the China indemnity. The China indemnity was estimated at £450,000; the actual receipt is £435,000. We might have made it larger if it had not been that we have not taken the receipt up to the latest moment to which we might, perhaps, have taken credit for it; and that we have likewise made, under the auspices and through the medium of the hon. Member for Lancaster (Mr. Gregson), an arrangement with the merchants interested in the indemnity for the final liquidation of their claims, which is, I think, equitable to them and highly advantageous to the country, but which, inasmuch as it has brought on a final settlement with them at an earlier period than we anticipated, tends to diminish the receipt available at the moment for the Exchequer.

Sir, if I now proceed to compare the Revenue of the year which has passed with the Revenue of former years, it is because I think—and I believe the Committee will concur in that opinion—that, in the growth of the Revenue of the country, after making due allowance for the effect of any casual circumstances, and of all legislative changes, we have, upon the whole, a pretty sure test of the growth of its strength and its resources. I proceed, then, to compare the Revenue of this country for 1863–4 with that of the previous year 1862–3 as it stands in the Exchequer account; and the result is this:—that, although taxes of between three and four millions sterling were remitted last year, the decrease of income would appear to be no greater than £394,000. But such a statement would be, in some degree, delusive. It is necessary to allow for a considerable increase on the two last heads of our receipts, which ought not to be regarded properly as heads of Revenue for the purpose which I have just described; I mean that which is called the Miscellaneous Revenue, which is the 8th head of receipt, and also the China Indemnity, which constitutes the 9th head. Well, the Revenue for 1862–3, after deducting those two heads, was £67,850,000; and the Revenue of 1863–4, after making a similar deduction, stands as £67,173,000. There is, therefore, a decrease in the actual Revenue of the country in 1863–4, as compared with that of the year 1862–3, which may justly be stated at £677,000. But, Sir, when it is considered that the remission of taxes in 1863 was £3,703,000, and that the loss which was anticipated from that remission was £3,343,000, the actual loss being £677,000, it will be seen that the recovery has been no less than £3,026,000.

But now let us look back somewhat further, for the purpose of ascertaining the growth of the Revenue of the country not merely in a twelvemonth, inasmuch as the circumstances of a particular year are liable to very considerable fluctuation in comparison with the year which may immediately precede or follow it, but during a longer period. We will then, if we go back to the year 1860–1; and I select that year because, since that period, we have laid on no new taxes; I do not speak of charges altogether insignificant, which may have been on the one side repealed and on the other side imposed; but I mean none that have a sensible influence on the account. We shall find, Sir, that the Revenue of 1860–1 showed a gross total of £70,283,000; and, after deducting the receipt of which I spoke — namely, the Miscellaneous, it was £68,830,000. But of this amount no less than £1,111,000 was due to Malt Credits taken up, which did not of right belong to the Revenue of the year. After we have deducted this sum, the Revenue of 1860–1 stands at £67,719,000. The Revenue of the year 1863–4, estimated in the same way, was £67,173,000, showing a decrease of Revenue since 1860–1 of only £446,000. But then, in that period, we have taken 3d. from the Income Tax, which withdraws from the Revenue £3,525,000; we have taken off the Paper duty, which may be taken to withdraw from the Revenue a gross sum of £1,340,000; we have reduced the Tea duty at a gross expense to the Revenue of £1,660,000; and we have repealed the charges on shipping at a cost of £143,000; thus showing a diminution of taxes to the extent of £6,668,000. I have omitted here to add to the list certain other and minor diminutions of taxes which I might have introduced, and which I place against some partial augmentations, also of a secondary character, that have been adopted by the House. The real diminution of taxes since 1860–1, but, of course, not including the legislation of that year— in fact, extending over a period of three years, from April, 1861, to April, 1864— has been £6,668,000. Against that sum we find that the Revenue has decreased by £446,000. The effect of these figures is to show that the increase of the Revenue from the same or from equivalent sources, in those three years, has been £6,226,000, or at the rate of about two millions sterling per annum. But then the year 1860–1, from which I have been measuring our progress, was a year of considerable depression. If I were to go back somewhat further and compare the Revenue of the year that has just closed with the Re- venue of the year 1858–9, which is as follows:—

The total Revenue of 1858–9 was	£65,477,000
Or, deducting Miscellaneous Receipt	2,126,000
The Revenue properly so called was	63,350,000
Revenue of 1863–4 as above	67,173,000
Increase	3,823,000
Add, balance of taxes repealed over taxes laid on since 1858–9	2,703,000
Together	£6,530,000
Or, per annum	£1,306,000

But I will not now trouble the Committee with the details—the annual increment of the Revenue during those five years would appear not to be so great. As well as I can calculate it, it appears to me that since 1858–9 the Revenue has grown at a rate somewhat exceeding £1,300,000 for each year, taking one year with another. If, again, we go still further back—namely, to 1853 — and I do not go beyond that date, because it would be difficult for me to calculate with the requisite precision the effect of all the changes that were adopted in the years preceding that period—it would appear that since 1853 the Revenue of the country, always reckoning it as from the same or equivalent fiscal sources, has grown on the average at the rate of a full million sterling per annum. Even in the worst years of which I have, as Finance Minister, had to encounter the results—namely, 1860–1 and 1861–2, the annual increment of the Revenue was about £900,000. In better years, such as that which has now elapsed, it has been, as I have shown, nearly or about £2,000,000. And upon the whole —not necessarily for each particular year, but reckoning upon the probable course of events over a series of years—it is certainly no unsafe calculation that our Revenue, independently of additional sources of taxation, increases from its own proper and inherent vigour; that is to say, from the growth of wealth and population, as well as from improvements in the law, at a rate exceeding a million per annum. I do not venture, however, to expect that the rate of increase would be the same, were Parliament to hold its hand from the work of improving legislation.

Sir, having stated these particulars with reference to the Revenue of the country, I will now state the condition of our cash account, and our operations within the year touching the National Debt. The balances in the Exchequer on the 31st of March, 1863, were £7,263,000. On the 31st March, 1864, they were £7,352,000. That is an ample but not excessive amount. With respect to the liquidation of debt within the year, it has been considerable. £1,000,000 of Exchequer bonds have been paid off; nearly £2,000,000—or, in precise figures, £1,994,000 —of Exchequer bills have been paid off; and, besides what I have stated, there have been redeemed, under the operation of the law relating to surplus Revenue, Exchequer Bills, and a very small portion of stock to the extent of £366,000. These sums taken together, make up a total of £3,360,000 out of the capital of the debt, liquidated within the year. Independently of this amount, it is only fair that the House should take into view the fact, that a very large sum has annually been paid in the shape of Terminable Annuities towards the liquidation of the debt. That portion of our annual payments for Terminable Annuities, which represents not interest but capital, is not less than £1,400,000 a year. And there are other payments of a minor description for the same purpose, which amount to £205,000. Therefore, our account for the Debt would, on the whole, stand as follows:—First, on the side of reduction. The total amount of the figures which I have given is £4,966,000. But then a debt for fortifications has been incurred, amounting to £820,000; so that the net approximate total sum which has been applied, from the proceeds of the taxes of the country, during the year, to the liquidation of the Debt, is £4,146,000.

Sir, the House was pleased last year, and as I think discreetly pleased, to give its sanction to a measure, or, indeed, to more than one measure, intended for the purpose of furthering and renewing that policy which aims at the reduction and extinction of the Debt by the conversion of Perpetual into Terminable Annuities. And I have to acquaint the House that in consequence of those measures we have during the last year converted Perpetual into Terminable Annuities to the extent of £433,000 per annum.

Next, Sir, as regards the huge total of the Debt itself, it is always interesting to the House to know what is the present state of the capital, and of the charge upon that capital, as compared with former years; because, although it may have been the opinion of some, or the caprice of others, that in consequence of our great wealth we might afford to look on the National Debt as a matter of trivial moment, I must say I never have been at all able to acquiesce in any such view of the matter, nor do I believe that it is generally approved by Parliament. The Debt of this country appears to me to be a very inflexible and formidable fact; grave and serious even in the midst of our wealth and prosperity; and likely to become still more grave and serious in its pressure if our prosperity should turn out to be less permanent and less stable than most of us are disposed to believe.

The actual capital of the National Debt at present stands thus. The stock (that is, the sum total of the Perpetual Annuities) amounts to £740,793,000. The book debts, by which I mean the capital sums repayable in money, not the mere redemption-value assigned to stock by Act of Parliament, are £37,645,000. Then there are Exchequer Bonds, £2,600,000, and Exchequer Bills £10,536,000. Thus, the total Debt is now £791,574,000. In the year 1853–4, which exhibited the lowest point that the Debt has reached since the close of the great Revolutionary War, it was £769,082,000. The Russian War, of course, produced an important change in these figures; and the Debt now stands at £22,492,000 more than it was in the year 1853–4. In 1856, immediately after the close of the Russian War, it stood at £808,108,000. It now stands, as I have stated, at £791,574,000; showing a decrease, since the last-named year, of about sixteen and a half millions sterling. In the year 1815, which gives the maximum point of the Debt, it was £861,039,000. At the present moment it shows a decrease of £69,465,000 from its amount in 1815.

Next as to the annual charge. In 1815 the annual charge was £32,646,000; in 1863–4 it was £26,211,000, showing a decrease in the amount payable from year to year of £6,435,000. And, therefore, we stand with a reduction of £69,465,000 in the capital, and of £6,435,000 in the charge of the National Debt, as the result of the efforts and experience of a great nation, of its Ministers, and of its Parliaments throughout half a century. But we also stand with a capital of £791,574,000 facing us in the future, and with an annual charge which still must remain for the present at between £26,000,000 and £26,500,000. Nor must we omit to bear in mind that the half century, during which the measure of our exertions has been as above, was a half century following upon the greatest war of modern times, and one during which England has had far less participation in European conflicts than at any time during the last two hundred years.

Now, Sir, having heard this account of the state of the country as far as depends on its expenditure, its Revenue, and its public engagements, the Committee may wish to know what is the state of that trade and industry upon which our future prosperity and strength must mainly depend. The general state of the trade of the country is certainly of a vigour and strength that is surprising when we consider that it has been subject to such peculiar and serious drawbacks. The figures are indeed so enormous that they are almost staggering to believe. I will give them in the largest and simplest form for the years 1861, 1862, and 1863, and I will include in my statement of the exports of British produce the exports of foreign and colonial produce, of which this country has become more and more the entrepôt. In 1861 our imports were estimated at £217,485,024; including, however, an enormous importation of corn; in 1862 they were £225,716,976; and in 1863, the year when we were almost wholly deprived of the largest and most valuable of all our imports, the cotton of America, our imports stood at £248,980,942. Our exports of British produce stood for the first of those three years at £125,102,814; in 1862 their amount was £123,992,264; and in 1863 they rose to £146,489,768. Our exports of foreign and colonial produce for the first year stood at £34,529,684; in the second year they stood at £42,175,870; and in 1863 at £49,485,005. The total exports of the country in 1861 were £159,632,498; in 1862 they were £166,168,134; and in 1863 they were £195,974,773. The total movement of the foreign trade of the country, our imports and exports being taken together, stood thus: —In 1861 our total imports land exports were £377,117,522; in 1862 they were £391,885,110; and in 1863 they were £444,955,715. That astonishing sum I will only illustrate by these two statements; in the first place, it may be taken to be about three times the trade of the country as it stood at a period which I may call comparatively recent—namely, in the year 1842, when Parliament first began deliberately and advisedly to set itself to the task of reforming our commercial legislation; and, in the second place, the sum may be taken to represent not far short, in round numbers, of £1,500,000 sterling for every working day in the year—a magnitude of industry and of operations connected with industry so vast that if it did not stand upon incontrovertible figures it hardly could receive belief. But, in my judgment, not only are these figures remarkable when we consider them as they exhibit the progress and energy of Englishmen, and as they prove the strength of that country, which is dear to all our hearts; they mean much more than this—though that, too, of itself, were much —they mean that England is becoming more and more deeply pledged from year to year to renounce every selfish view, and every scheme of violence or aggression; to be the champion of peace and justice throughout the world; and to take part, with no view to narrow or inferior interests, but only with a view to the great object of the welfare of humanity at large, in every question that may arise in whatever quarter of the globe.

Now, Sir, I referred but a minute ago to the year 1842, and stated that it was since 1842—since the commencement of the great work of Parliament with respect to commercial legislation — that these great results have taken place. I do not for a moment overlook the fact that other elements have been at work—elements of immense power and of immense utility; of such power and utility that there are some who think that the same effects would have been produced even if our commercial legislation had remained precisely as it was. ["Hear!"] I hear a solitary cheer from an hon. Member opposite, and I accept it as the proof of my somewhat paradoxical assertion. Well, Sir, it is a matter of great national and public interest—a matter of interest, let me add, to other countries as well as our own— that we should satisfy ourselves in some degree, and by approximate evidence, of the truth on this question. Now, I do not at all deny that other countries which have made changes comparatively slight in their commercial laws have likewise partaken largely in the benefits I have described, and have made great progress in trade and industry. I do not undervalue for one moment the great advantage of the vast powers of locomotion which have been set in action, and of many other causes which have co-operated to produce the astonishing development of modern commerce; but then I find—and here I take my stand on facts—take the evidence, at any rate, for what it is worth—I find that if I select several years in which Parliament has with firm and unsparing hand addressed itself to the business of liberating commerce, these operations have been immediately followed by striking augmentations in the trade and industry of the country. Whatever has been due to improvements in locomotion, to the electric telegraph, to cheap postage, to the progress of machinery, or to other like causes, the effect has, on the whole, been equally manifested from year to year. Allowance must, of course, be made for good and bad harvests; but still, if I find this feature meeting me on the examination of the case—that the legislation of Parliament in certain cases where it has been marked and comprehensive, has also been immediately followed by striking and great results—I think we may conclude that we have not been feeding ourselves by an empty dream when we have held, that in giving freedom to the energy, capital, and skill of Englishmen, we were adopting the true means of extending our commercial prosperity. I will only instance three years in which changes of that kind have taken place. In 1853 important changes of that description were made. The exports of British produce in 1852 had been £78,076,000. Now, recollect that 1852 was a year of great prosperity—a year of an excellent harvest, and of the cheapest capital ever known in this country. The year 1853 was a year of a bad harvest, but it was also a year of legislation in behalf of freedom of trade. Well, Sir, while the exports of 1852 were £78,076,000, the British exports of 1853 were no less than £98,933,000. In 1860 we had something of the same kind. The exports of were £155,692,000. Here I include exports of foreign and colonial produce; I could not include them in the figures 1853, because at that date there was no official standard of valuation for this department of our commerce. In 1859, as I have said, the British exports of all kinds were £155,692,000. The year 1859 was a prosperous year, and a year of a rich and abundant harvest; the year was a year of the worst harvest known for half a century; and yet our exports increased, even under these most unfavourable circumstances, from £155,692,000 to £164,521,000. In 1863, again, it was in the power of Parliament to grant considerable measures of relief, and the exports, which in 1862 were £166,168,000, rose in 1863 to £195,974,000. The general circumstances of the latter year were in this case more favourable than those of the former; but room is left for the operation of legislative causes too. Of course, I do not desire—I do not think it is possible—to lay down any such rule or dogma as to say that these figures, and no others, represent the precise influence of your legislation; but what they show is this, that there has been an essential and vital connection between the growth of the industry of the country and the legislative process pursued within the last quarter of a century.

Now it is, I think, due to the interests concerned, and likewise to the feelings and opinions of the Committee, that I should refer to some of those particular subjects that have been dealt with in the fiscal and commercial legislation of recent years; with a view to show that we are not, at any rate, indifferent to the interests and complaints—if complaints there be— of those who think they have been hardly treated in the sacrifice of their particular interests to the general good. The first subject I will refer to is the long-contested, though in a legislative sense now settled question, with reference to the Paper duty. It is impossible for me to give a complete and clear view of the present condition of the paper manufacture; because we have lost the special means of information which at other times the Government possessed, and I can only attempt to present to the House facts which in themselves are fragmentary and partial, though they are indisputable as far as they go, and they may also, as I think, be considered satisfactory. It is said—with satisfaction on the one side, and perhaps with dissatisfaction on another side, but the fact is undeniable— that there has been an immense increase in the importation of foreign paper. The importation of foreign paper in 1859, the last year before any practical question had been raised respecting the repeal of the duty, was 18,000 cwt. In 1864 it has arisen to the enormous amount of 197,000 cwt. But although we have no means of judging conclusively, yet the official figures before us would lead us to infer that there has not been, in consequence of that increased importation, any diminution in the production of British paper. At all events, we have before us the evidence which I shall now state. If we look to the rags and other materials for making paper which are imported into this country, and if we deduct from those figures the quantities re-exported in each year, the figures stand thus. In 1859 we imported materials for papermaking to the extent, according to a strictly drawn official statement, of 115,000 cwt., and in 1864 we imported, of the same materials, no less than 731,000 cwt. And here let me say that whatever pressure or distress may have existed at home, yet there has been a positive increase in the amount of British paper and paper goods exported. By paper goods I mean chiefly paper hangings. In 1859 the amount of paper and paper hangings exported amounted to 115,000 cwt., and in 1864 the amount had increased to 190,000 cwt. Of quality I cannot speak, but about the same quantity of paper of British manufacture was exported as the quantity of foreign paper imported into this country. Then comes the question of price. Now, the price has been very greatly reduced. The price of paper has been reduced by an amount even exceeding that indicated by the duty. In 1859, taking printing paper, which is, perhaps, the fairest test, the price of printing paper was 6½d. to 8½d. per lb.; in 1864 the price ranges from 4¼d;. to 6¾ d. per lb.:—so that, in fact, six farthings of duty having been taken off, the reduction in price has been from seven to nine farthings per lb.; and the fall in the price of writing paper, of which I need not trouble you with the particulars, has been almost equally great. There is another very curious result, although I do not say that the fact is sufficiently developed to enable us to come to a positive conclusion regarding it. I am very far from representing, as I will show by-and-by, that the state of the papermaking trade is at present one of the prosperity in which we should all desire to see it, because it is affected—and I think and hope affected for the time only, by very serious drawbacks; but the figures I have given up to the present moment, like those I am about to give, even if they be liable to any construction different from mine, yet they are, I believe, unquestionable as matters of fact. Now as to the number of paper manufacturers. There was a good deal of good humoured banter in this House, at the time when rather sanguine expectations were formed, that the manufacture of paper being, from the atmospheric conditions it requires, very suitable for rural districts, upon the repeal of the duty there would arise a large number of rural paper mills. All of us must remember how much was made of that topic; but it is one on which I have for three years abstained from opening my lips. Nor am I going now to present any very highly coloured picture of the state of things, But there is, at least, before us this rather remarkable circumstance—that the diminution in the number of papermakers, which was steadily and rapidly going on as long as the duty existed, may now be said to have ceased. The papermakers of this country in 1838—excluding a small number of cardboard manufacturers, who, although they paid the same license, were not exactly papermakers—numbered 505; in 1848 the number was 427; in 1858, 366; in 1859, 365; in 1861, 364; and in 1863, 360. Therefore it is the fact, as far as it goes, that the number of papermakers in this country, which before had been rapidly declining, has since the repeal of the duty, notwithstanding the presence of foreign competition, and notwithstanding other causes operating severely upon the trade, been very nearly a stationary number, There has been another Circumstance which I admit has been a peculiar disadvantage to the manufacturers. The paper trade was in no small degree dependent upon the cotton trade for its material; and the consumption of paper used for the purpose of packing in the export of cotton goods was enormous. And you must recollect that while the value of our cotton goods exported, being, from their almost doubled price, very high in amount, may tend to diminish the apparent loss of trade, yet the dear cotton goods require no more paper for wrapping than the cheap cotton goods; and therefore a large demand for paper has, since the repeal of the duty, and from causes quite unconnected with that repeal, been very greatly reduced. This is quite independent of the further fact, that the papermakers have suffered greatly in the withdrawal of an important element in the supply of materials—the refuse of cotton and cotton rags upon which they formerly depended to a very considerable degree. But what is really the case of the papermakers? Is it not the same case to which, one after an- other, almost every branch of British industry has been subjected? They grew up under the influence of protection. Protection, in a greater or a less degree, unnerved their energies. They adopted, or were content to depend upon, imperfect and wasteful methods of manufacture; and when the protection, which had thus beguiled them into security, was by Act of Parliament withdrawn, considerable suffering ensued. That suffering gradually threw them back upon the exercise of their invention and skill. The restorative process next commenced, and after a short interval every one of those branches of industry, I believe with scarcely more than a single exception, has become more healthy, more vigorous, and more profitable than before. May not the case be the very same with the makers of paper? I am now going to give the House one single case of what has happened in the paper trade, the facts of which are supplied to me by a gentleman who is himself engaged in the trade. He is a partner in a mill which has been erected and set to work since the repeal of the duty. He has not authorized me to make use of his name in the House, but he has authorized me to say that, if the facts are doubted, he is willing to communicate in confidence with any hon. Gentleman who may entertain such doubts. His statement is this. His mill is almost a new one. For the four months ending October 31, 1863, he found that he made his paper at a cost of £57 per ton, and that commodity, made at such a cost, did not pay him. He did not complain; he joined in no agitation for the re-imposition of the paper duty, or for other purposes, equally unattainable; but he and his partners set themselves to work to see what could be done by improvements in the processes of manufacture and by the more skilful and economical use of chymical agents, so essential in the manufacture of paper. The results, as they have been told me, were surprising indeed. In October, 1863, the firm had produced paper, as I have said, at a cost of £57 per ton. In December they produced at a cost of only £47, and at the present moment they are producing at a cost of £39 per ton; and this gentleman declares to me that the article now produced is better than what he produced last summer for £57 per ton. For my own part, I cannot say I believe that the condition of the paper trade essentially depends upon the laws of foreign countries, with regard to the export of rags. Those laws, no doubt, form an element, and no unimportant element, in the case of the papermakers: but I am convinced they would be ill-advised if they were taught to depend upon anything but their own energies. In the case of no other trade have we consented to look to the legislation of foreign countries as a guide for our own. Our system of freedom in trade is a system which is grossly unjust unless it is uniformly and universally applied. It would be monstrous to say to any branch of industry or class of British producers, "We will expose you to foreign competition," unless we likewise say to them, "All you want at home we will take care you shall have on terms of perfect equality as far as our own laws are concerned, and on the best terms that we can get for you as far as relates to the laws of foreign States." That is the principle of justice, and to that length the Government goes with the papermakers. We lament that Foreign Governments should maintain restrictions of any kind upon the export of raw material. No doubt, it is an element in the case of the papermakers, and to those who have been accustomed to depend upon it, for the moment at least, it is a very essential element. Therefore, it is with great satisfaction that I say we are expressly authorized to hope and believe that concessions will be made by the Government of France in this particular, by a favourable change in the export duty now levied on rags in that country.

I go next to a very important question —the question of the Spirit duties. The Committee will be aware how important that question is when I remind them that, not from strong liquors taken as a whole, but from the single article of what is called "ardent spirits," we are enabled to raise nearly one-fifth of the entire Revenue of the country. It will be in the recollection of the Committee that in the year 1860 the duty upon spirits was raised to the very high point of 10s. per gallon. Anticipations were then expressed that, although there must necessarily be a considerable diminution in the consumption, yet, from the augmentation of the duty, there would be a considerable increase in the Revenue. That increase has not been so great as was expected. The question at once arises—to what cause is the partial failure due? Whether it is due to smuggling? or to a change of taste? or to distress? or lastly, to the operation of the duty? But, whatever may be the cause, I wish to point out to the Committee that those persons are in error who imagine that the augmentation of the duty has been unaccompanied by an increase of receipt. In point of fact, a considerable increase in the Revenue has been obtained from spirits; and I think the policy upon which the House adopted that measure was this—that in respect to this particular article it is our business to derive from it the largest possible amount of Revenue, without the same regard which we pay in other cases to the encouragement of the manufacture, or to augmented consumption. The Revenue arising from British and foreign spirits for the financial year 1859–60 amounted to £12,301,000. That has been stated in a Return made at the instance of my hon. Friend the Member for Stamford (Sir Stafford Northcote). But I perceive that the Inland Revenue Department has very properly explained, in that Return, that the Revenue of 1859–60 includes a large sum which was due to what I may call the premature delivery of spirits from bond, in the month of February, 1860, when an expectation prevailed that the duties upon spirits were about to be increased. The effect of that was that about £340,000 was received, and went to the account of 1859–60, which really belonged, according to the best calculation that can be made, to 1860–1. The impression that has gone abroad, that no increased Revenue has yet been derived from British spirits, is due in some degree to this, that the circumstance to which I have referred has been overlooked. Now, when we allow for that anticipation, the real Revenue for the year 1859–60 must be estimated, for the purposes of comparison, as follows: — First of all, deduct from the duty received on British spirits in that year, the sum of £340,000; and secondly, deduct also from the receipt of that year on foreign spirits, a further sum of £225,000, in consequence of the great diminution which near the end of the year 1859–60 was enacted by Parliament in the duty on foreign spirits, and in particular in the duty upon French brandy. The corrected total of the Revenue on foreign, colonial, and British spirits for 1859–60 for the purpose of comparison with, the Revenue for the present year will then stand at £11,756,000; namely, on British spirits £9,458,000, and on foreign and colonial spirits £2,298,000; making together £11,756,000. In 1860–1 the Revenue, from the three sources together, was £12,168,000; in 1861–2it was£12,267,000; in 1862–3, when the Lancashire distress had reached its utmost intensity, it fell to £12,102,000; and in 1863–4, when the distress had partially abated, it rose to £12,638,000. So that the real state of the question, considered as a fiscal question, is no other than simply this: the Revenue of 1859–60, properly belonging to the year, may be taken at £11,756,000; and in 1863–4 it is £12,638,000, an increase in the receipt from spirit duties above the amount at the former period reaching the considerable sum of £882,000. Now, Sir, this being a question of great interest, I have sought for the means of throwing light upon it. Why is it that the Revenue from spirits has not risen more largely still? Is it owing to smuggling, to distress, or to change of taste? It is not owing to smuggling. The evidence on that subject, I think, is clear. It is quite true that in Ireland at this moment there is, in consequence of the very low price and condition of the oat crop, an increase of smuggling as compared with the three preceding years; but it is not true that there is an increase in smuggling, even in Ireland, as compared with what it was when the duty was 8s. a gallon. Is then the shortcoming to be ascribed to distress? We have tolerable means of judging whether distress has operated in this matter or not; because the circumstances of the three countries, as connected with the consuming power, have materially differed during the last four years. Ireland has, unhappily, been afflicted with a succession of bad harvests. The harvest of 1864 was better, not, perhaps, as regards the seller, but as regards the consumer of agricultural produce; but the three previous harvests had been lamentably deficient. England, at least, in one great focus of consumption of this kind—in Lancashire—has suffered in a peculiar degree. Scotland, having but a small cotton trade, and having had its industry in a generally flourishing condition, may be said hardly to have suffered at all. Now, it is curious that the spirit Revenue of the three countries has varied in the precise proportion of their distress, thus represented. In England the Revenue may be said to have been stationary since 1859–60. In that year it was £4,341,000. In 1863–4 it was £4,390,000, being an increase of £49,000, or about 1 per cent on the total amount. In Ireland, where the pressure of distress has been greatest, the Revenue in 1859–60 was £2,685,000; in 1863–4 it had sunk to £2,322,000: that is to say, there was a reduction of about 14 per cent on the whole, which may be mainly accounted for, not only by the gradual change of taste which operates in all the three countries, but by the special distress under which Ireland has been labouring. In Scotland, where the pressure of distress has been much less felt—I do not know whether hon. Members from Scotland may take it as a compliment or not, but certainly the Revenue from spirits has increased in a manner not at all unsatisfactory, considering the nature of the changes that have been made in it. In 1859–60, although unduly swollen by premature deliveries, it was £2,973,000, and in 1863–4 it was £3,332,000, showing an increase of upwards of £350,000. This may be considered a very satisfactory result—as a result pretty fully answering to the computations made when Parliament reduced the duty. But in truth another cause besides distress has been at work, and it is one the operation of which we must contemplate with satisfaction. The truth is that a great change of taste is going forward, which is not to be indicated by one circumstance or another, but by careful comparison of an aggregate of facts, and by a multitude of observations. There is a very steady process, and a very happy process in operation—a gradual translation of taste from stronger and more ardent liquors to milder and more wholesome liquors, and we cannot understand what is going on with reference to the spirit duty unless we keep that essential element in view. But I am glad to say that, as far as distillers of spirits are concerned, although they have had a considerable diminution of home demand, an export trade is rapidly creating itself. Some ten or twenty years ago the quantity exported was very trifling. In 1859, however, the export trade had risen to 1,941,000 gallons; and in 1863 it had risen to 4,071,000 gallons. If I am correctly informed, the Scotch distillers, in addition to a tolerably liberal supply for home consumption, put forth the energy and sagacity usual with their countrymen, and have vindicated to themselves a considerable portion of this export trade.

With respect to wine, the figures stand as follows:—In 1859 the quantity of wine imported from Portugal was 2,106,000 gallons; in 1864 it reached 2,669,000 gallons; showing an increase of somewhat over 25 per cent. The wine imported from Spain is, however, apparently more in favour than the Portuguese wine. In 1859 the quantity imported was 2,884,000 gallons; in 1864 it had risen to 4,799,000 gallons, or there was an increase of about 70 per cent. The wine imported from France in 1859—the last year before the change of duty—was 597,000 gallons; in 1864 it was 1,965,000 gallons, showing an increase of 230 per cent. As regards the import of wines from other countries, which are generally made up of light qualities, the quantity in 1859 was 577,000 gallons, and in 1864 it was 1,184,000 gallons; so that there was an increase of over 100 per cent. The import of colonial wines alone has largely decreased, distinctly proving that nothing but the bounty—a bounty perfectly artificial, extravagant in amount, and totally unreasonable in principle—a pure endowment in effect, taken out of the pockets of the people of England — was really the principal basis of the trade in the colonial wines of the Cape which formerly came to this country. If the wine trade can extend by natural means, and on the footing of equal advantage in the Colonies, by all means let it do so. But my opinion is, that even in those colonies the climate of which is best adapted to the growth of wine, the rate of labour is much too high to enable those communities to apply with profit any considerable portion of their strength to this peculiar manufacture. On the whole, the increase in the consumption of wines of all kinds in this country is most satisfactory. In 1858–9 it was 6,974,000 gallons, and in 1863–4 it was 10,729,000 gallons; showing an increase of about 55 per cent. I ought to add that the figures which I have given for the financial year 1863–4 are not precisely accurate as regards units or hundreds of gallons, but for every substantial purpose they are sufficiently to be relied on.

There is another subject which I wish to mention to the Committee, because it was the subject of legislation during last year, and is also a subject of fiscal and of much commercial importance. I mean the subject of the Tobacco duties. During the last year an Act was passed for the purpose of reconstructing our system with regard to the duties and drawbacks on manufactured tobacco; the joint objects being to diminish smuggling, to increase trade, and to augment the Revenue; and I think the Committee will be of opinion that where those objects can be satisfactorily combined, the result is one well worth having. As regards the effect upon those descriptions of tobacco which were formerly smuggled, the case, up to the present time, stands as follows. The descriptions of tobacco which were most largely smuggled into this country were cigars and Cavendish. Of cigars imported legally from abroad in the eleven months from April, 1862, to February, 1863, there were 2,316,000 lbs. The cigars imported in the corresponding eleven months of 1863–4 were 3,976,000 lbs.; thus showing a very large increase in the legal trade. With respect to Cavendish, the manufacture of which in this country had been previously prohibited, but which was allowed by the Act of last year to be manufactured in bond, six manufactories have been since established by way of a commencement of the trade. But the increased importation which I have described of the foreign manufactured article has not been attended with a diminution of the manufacture of tobacco at home; for, whereas it appears that in 1863 there were entered for home consumption, that is to say for home use, after manufacture in one form or another, 35,735,000 lb. of raw tobacco, in 1864, after the duty had been lowered, and after the British manufacturer, I may add, had been put through his usual paroxysm of apprehension and alarm — after the usual announcements had gone forth that several hundreds and thousands of work men, employed in the tobacco trade, were about to be dismissed, if they had not been actually driven out destitute into the streets, instead of 35,735,000 lb. in the year preceding the change, the British manufacturer entered for consumption in the year ending March 31, 1864, 36,590,000 lb. And he is even beginning to have some hope or glimmering of an export trade; for, whereas in six months of 1862–3 the exports amounted to only 50,000 lb., the quantity exported in the same period of 1863–4 was 123,000 lb. Lastly, I am happy to say that, as regards Revenue, the results of the Act are very satisfactory. This duty has long been a growing duty. About 1843 it was deemed that the smuggler had got the better of the Revenue Department. But; his triumph, if it was real, was only temporary. Smuggling has been kept, comparatively at least, within bounds from that time to this; while I trust now that it is in the way of being more than kept within bounds, and that it will be greatly reduced. The average annual growth of the Revenue from tobacco in this country for twenty-one years, beginning with 1842 and ending with 1862, has been £105,000. But last year, when the change of duty was adopted, I am glad to say that the increment of our receipt rose from an average of £105,000 up to £290,000.

Lastly, Sir, the working of the change in the Tea duties, which was made last year, has up to this time been entirely satisfactory. Our consumption of tea was, in the financial year 1857–8, 77,069,000 lbs. In 1862–3, it had only risen to 77,437,000 lbs. But in 1863–4, it has been 90,362,000 lbs. As regards Revenue, the receipt from tea was in 1862–3, £5,485,000. In 1863–4, it was£4,554,000. In other words, whereas I estimated that the loss from the reduction of duty would be £1,300,000, it was only £931,000. As respects price, it may be stated in general terms, that the consumer has had the full benefit of the change; and the price in bond is now lower than in February, 1863, by from 1d. to 3d. per lb.

Now, Sir, the House will be glad to be informed in a few words what is the position of our trade with France. In the year 1859, immediately before our Treaty of Commerce with France, our imports from that country amounted to £16,870,000. In 1863, they had risen to £24,024,000. Our exports to that country in 1859—I will not go into details about the proportion of foreign and colonial goods included in this Estimate— were £9,561,000. In 1863 the exports had risen to £22,963,000. I am very glad to say that the French manufacturers are beginning to discover the futility of their alarms, just as the traders of this country have so frequently found it by experience on their side. And at this moment the French spinners of flax, who were in such a state of apprehension when my hon. Friend the Member for Rochdale (Mr. Cobden) was negotiating the French Treaty, have become exporters of linen yarns to this country, and have sent cargoes of that commodity to the port of Dundee, amounting during a part, and a part only, of last year, to £500,000.

With all this, I may remind the Com- mittee that the pauperism of the country, excluding the pauperism of Lancashire, which is of an exceptional and temporary character, has not only not been stationary, but has actually decreased since the year 1848–9. In that year the total number of paupers, indoor and outdoor, was 981,330; in 1863–4 it was 828,320. In 1848–9 there were 61 paupers for every 1,000 of the population. In the year 1863–4 there were 46 in every 1,000. In other words, in the former year there were 939 of working population out of every 1,000 of the community, and in the latter year there were 954 persons of a working and self-supporting population out of every 1,000 of the community.

Such is the general state of things as regards the year 1863–4, through which we have just passed.

I now come to the Estimates for 1864–5. We find that the charge for the Funded and Unfunded Debt may be taken at £26,400,000. The increase which appears in this charge is owing to the operation of the measures, to which I have recently referred, for converting Perpetual into Terminable Annuities. The Consolidated Fund charges, other than those for the Public Debt, amount to £ 1,930,000. The Estimates for the Army are £14,844,000, and those for the Navy, £10,432,000. But the latter will probably be subject to a certain amount—not a very large amount—of increase on account of a plan now under consideration for improving the condition of some classes of officers and men in the Navy. The collection of the Revenue is estimated at £4,692,000, and the Packet Estimates are £883,000. The Miscellaneous Estimates may be taken for present purposes at £7,628,000. It is probable that will not ultimately be the precise figure; and I have made a reserve of £80,000 for any variation, in the way of increase, which may occur in the Navy and Miscellaneous Estimates taken together. The total estimated expenditure of the country for 1864–5 will, therefore, stand at £66,890,000; that is an amount lower than the estimated expenditure of 1863–4 by £1,393,000, and lower than the actual expenditure of that year by £166,000; but it is higher than the estimated expenditure of 1858–9—which is the last year before we come to the years of a very high expenditure—by £2,226,000; or, if we correct the comparison by debiting ourselves with the amount of the Long Annuities, which we have saved, and also the expenditure for fortifications, but deducting £1,125,000 which now appears on both sides of the account, but did not so appear in 1858–9, there is an aggregate increase of £4,047,000, I am anxious to draw the attention of the Committee to these figures, because they may be taken as a fair statement of the actual, present, and still remaining growth of our expenditure since the time when we returned from the Russian war to a peace establishment.

I now come, Sir, to the estimates of the Revenue for the year; first, I take the Customs at £23,150,000; secondly, the Excise, at £18,030,000; thirdly, the Stamps at £9,320,000; fourthly, the Taxes, £3,250,000; fifthly, the Income Tax, £8,600,000; sixthly, the Post Office, £3,950,000; seventhly, the Crown Lands, £310,000. That is the whole of the Revenue properly so-called. For the eighth head, that of "Miscellaneous Receipts," we estimate a sum of £2,250,000; and the last or ninth head is that of Indemnities: the estimate under this head is £600,000, of which £500,000 is from China, and the other £100,000 we have already received from Japan but have not yet brought to account. These sums make up a total estimated Revenue of £69,460,000, and an estimated expenditure of £66,890,000, leaving a probable surplus of income over expenditure of £2,570,000.

Sir, among the proposals which the Government are about to make, there are several which have no very great bearing on the Revenue, but to which I may call attention, first, to put them out of the way of the more material question as to the manner in which the substance of the surplus is to be dealt with. Perhaps the Committee may be surprised when I commence by saying, that we propose to submit to Parliament a plan for altering the present duty on corn. The duty upon corn is now levied by measure, while almost all transactions, I believe I may say all, connected with the foreign corn trade, are carried on by the rules of weight. In consequence of this discrepancy, and the inconvenience resulting from it, the merchants connected with the corn trade made representations to the Government, I think about twelve months ago, in order that the mode of levying the duty might be altered. Accordingly, we propose to change it from an uniform rate of 1s. a quarter, to an uniform rate of 3d. per cwt. This change will take effect imme- diately on the passing of the Act. It is not necessary that it should take effect before. We also propose that lentils and two or three other articles of small importance which now pay no duty, should be put upon the same footing as corn; as it is the opinion of the trade that there would be some convenience in such an arrangement. I ought further to mention it has been proposed by some persons connected with the trade to modify the duty on corn in a more important degree; by laying a duty of 3d. per cwt. on wheat only, and of 2d. per cwt. on other kinds of corn. It has been very justly stated that this would be a fairer arrangement, having regard to the value of the article on which the duty is imposed. But there are two reasons which have withheld the Government from adopting it. One is that it would cause a considerable loss to the Exchequer, which we do not think the Government, after taking other claims into view, are now in a condition to afford. But another reason is this—that it would appear as if we were deliberately setting about the construction of a regular system of corn duties; as if we regarded duty on corn as a permanent portion, of our finance. That in my opinion would be wrong. When the great change in the Corn Laws was proposed in 1846, this duty was imposed as a nominal duty; but it has produced a considerable Revenue which it has not been found convenient to part with heretofore, and I am not prepared to say it would be prudent to part with it at the present moment; but I confess, on the other hand, I should be reluctant to see Parliament committed to any plan which might appear to assume that a duty of this kind on corn—not a very heavy impost, but still something more than a nominal one in amount, and one which in principle it would be difficult to defend—should be regarded as a permanent imposition upon the greatest article of human subsistence among us.

Next, Sir, I purpose to make a change, which I hope will be agreeable to the House, in the charges paid for licences by dealers of tea in certain cases. It is well known that these licences operate with stringency in some cases; I mean especially in rural districts, where the trade of the shopkeepers is exceedingly small, and where they are obliged to combine a great number of branches in order to constitute a business that will yield a remunerative return. Now, no person in a village or hamlet can sell tea without paying a licence duty of 11s. 6d. It is supposed that this rate of duty amounts to 10 percent on a sale of from 30 lb. to 35 lb. of tea in the year; and it will be seen that such a change may tend to narrow the supply of the commodity to the rural populations, although it is not felt as an obstruction in the towns. I think it would be good policy even if we are to put it on no other ground than the furtherance of the great change adopted last year, to make a reduction upon that duty with regard to all the more thinly populated districts. We therefore propose in all houses under £10 a year rating, and not being in a municipal or Parliamentary borough, to reduce the duty from 11s. 6d. to 2s. 6d. We calculate that this reduction will cause a loss to the Revenue of about £10,000.

Two years ago we adopted some useful regulations with regard to hawkers. We legislated with respect to hawkers on foot and hawkers having one horse. We reduced the duty from £8 to £4 for one horse; but we overlooked the case of hawkers with two horses. The result is that a hawker with two horses pays £4 on one horse and £8 on the other. We propose to place both horses on the same footing.

We propose also to modify and reduce the stamp duty now payable on admission to ecclesiastical benefices of small value. At present there are two rates. There is a rate for rectories and vicarages on the one hand, and a rate for perpetual curacies on the other. There is no ground for that distinction. We propose, therefore, to abolish it. Perpetual curacies will henceforward be charged like rectories and vicarages. The scale of duties now in force imposes an uniform rate of £7 upon presentation and institution together to all benefices of less than £300 a year. In lieu of this uniform charge, we propose a scale of duties, which will diminish gradually from the £7 rate down to the value of £50, under which rate there will be no charge whatever for stamp duty.

Next, Sir, I have to announce with pleasure to the hon. Member for Devizes (Mr. Darby Griffith), that I cordially agree to a proposal which he has suggested, and which I think is founded on good sense and practical utility. It is this: that the duty on proxies to vote at the meetings of Joint Stock Companies, which heretofore, has been 6d., and which some years ago was as high as 30s., should be re- duced to 1d. Joint Stock Companies are assuming a character and function of vast importance in the commerce of this country. It may be, indeed, that they are at the present moment extending their character and function—I hope it may not be so—even beyond what properly belongs to them. But they are at all events coming to be essentially and permanently so important, that it is worth the while of Parliament to give every facility in its power to enable the members of these companies to exercise an effective control over their management.

Besides these changes, I propose also to make a certain reduction in the duties upon letters of attorney for the receipt of dividends; and to make a change in the stamp duties upon settlements, the effect of which will be the removal of a singular anomaly, to this effect—that, as the law now stands, a settlement including foreign coin, and shares and stocks in foreign, companies, is not liable to any stamp in respect to that foreign property. It appears to me that that exception is improper and absurd, and I propose to place all such property on the same footing with other property. We likewise propose to declare the law with respect to the liability of policies of Life Insurance to the stamp duty. I propose also to legalize the practice, universally established practice, although now an illegal one, of what is known as marine re-insurance. That, I believe, is a practice almost essential to the conduct of Insurance Offices; still it is not allowed by the law; and we propose to legalize it on the payment of a shilling stamp, as is now done in the case of Fire Insurance. Lastly, Sir, I propose to extend—of course under the control of the magistrates—to refreshment houses and sellers of beer the benefit of what are called occasional licences for the sale of the commodities in which they deal, just as it is now enjoyed by publicans.

Last year, Sir, as it will be remembered, the Government made a proposal with respect to the taxation of charities. As I shall be silent, or, at least, as our proposals will be silent, upon the subject this year, I do not wish the Committee to lie under the impression that there has been any change of views on the part of the Government. Certain directions have, however, been given by the Secretary for the Home Department for the collection of information, which will be laid before Parliament, but which is not yet fully in our possession. That information, we think, will tend to enlarge such means of judgment as Parliament already possesses, and will be useful at the time when its attention shall be again directed to the subject.

With the insignificant exception of the sum of £10,000 for tea duties, I reckon that these minor changes, which I have briefly and somewhat hurriedly gone over, will leave the surplus pretty nearly as it stood. Deducting this £10,000 from the surplus of £2,570,000, we still have a surplus of £2,560,000 upon which to operate.

And now, Sir, as regards the disposal of that surplus. The present year is one which has produced an unusual number of formidable claimants for the appropriation of the surplus. Relying on the kindness and patience of the Committee, I shall endeavour to deal fairly with the most important of these cases, or, at least, with such of them as I think it will not be possible to pass over. As regards the first, and likewise the largest, of the operations we propose, there is no reason why I should keep the Committee in suspense. I do not think that when the matter is seriously considered apart from prejudice, apart from interest, and apart from any promise or pledge, there can be any doubt as to the first claim upon the surplus. In my clear judgment, and in that of all my Colleagues, the first claim is that of the article of Sugar. I need scarcely remind the Committee of the enormous importance of that article to trade and to consumption. I believe that in its importance, in reference to the comforts of the people, it may be said to stand next to corn. I believe it may also be said with probable truth that, next to the subject of corn, the question of the sugar duty is, to the mass of the people, the question of the liveliest interest. That duty was raised for the purposes of war; it was readjusted after the peace, in the year 1857: but the principal part of what had been imposed with a view to the exigencies of war, has never been removed. We have had at various times claims either more urgent, with reference to the general wants of the people, or offering promise of greater public advantage to follow upon remission or reduction; but I know of no such claim at the present moment. We propose, therefore, to the Committee, to make a considerable change and reduction in the sugar duties. There is but one considerable objection to the measure, as far as I am aware; and that is, that at the present moment we are labouring under what may be called a quasi-scarcity in consequence of diminished production and increased price. At the present moment there is an increase which may be stated; at from 8s. to 10s. per cwt. over the prices of 1863. That is a considerable augmentation; and the increase is about 6s. per cwt. above the price of 1861–2. Perhaps, we may say that the last named sum represents the excess of price at this period above the fair average level of prices. I wish, however, to present this observation to the Committee; that in the case of sugar, we can hardly say that the existence of this partial and relative dearness is simply a reason for refraining from legislation. In a case like that of tea it might be so, because in the case of tea, in the first place, you are dependent upon one source of supply, and in the next place you are yourselves the great consumers of the world, exceeding all other consumers in so great a degree, that what you can hope to draw over from other quarters by giving peculiar inducements in your own market at a given moment would be a comparatively small supply. But that is not the case with regard to sugar. Our consumption, vast as it is, is comparatively small with reference to the total consumption of the world. Sugar is produced in a multitude of countries, it is sent to a multitude of markets; and the consequence is, that if at a particular time the supply be diminished, an alteration in our law, made at that particular crisis, is likely to have the effect of attracting to the markets of this country a large quantity of sugar which would otherwise find its way to other countries, and consequently of mitigating any inconvenience we might feel from scarcity. It may also be said that increased price has already in great measure done its work and very considerably restrained consumption; and that, consequently, the stock in bond, on which we have to draw, offers to us a prospect by no means unsatisfactory. On the last day of February, 1862, the stock of sugar in the country was 1,707,000 cwt.; in 1863 it had risen to 2,038,000 cwt., and in 1864 it was 2,272,000 cwt.; so that, as regards our supplies in hand, we are actually in excess over preceding years, and it is only what is known with respect to the late crops which makes us apprehend that, on the whole, we cannot look forward to an abundant provision.

I come now to the subject which is the most formidable part of my task this evening. I have said that we propose to deal with the sugar duties. But how are we to deal with them? There arises here a question which is grave in two senses—it is grave in the sense of being important, and it is grave, also, I am afraid, in the sense of being irremediably dull. The question, whether sugar is to be taxed by uniform or classified duties, is one of great fiscal moment, and also of great importance to an immense amount of trade and breadth of cultivation throughout the world. I am bound, therefore, to treat it as thoroughly and conclusively as I can. On the other hand, it is a subject which, as to details, abounds, I may say, in every element of repulsiveness. It is bad enough, to talk about "muscovado," "treacle," and "molasses;" it is a great deal worse to be immersed in "Dutch numbers," "glycose," "tehaur,': and "jaggery; "and such is the technical phraseology of the sugar trade. I will endeavour to avoid it as much as may be practicable and to state intelligibly the views of the Government on the subject.

At present, Sir, we have in form a system of classified duties upon sugar; approved by many, a scandal and offence to many others. Now, I am not able to deny that this system of classified duty appears to have been the gradual growth and product of experience. When the sugar market of this country was the monopoly of the colonial producer, we had a system of uniform duty. That system of uniform duty was gradually modified and departed from in proportion as improvements in this manufacture were introduced; as our market was opened to all the sugars of the world; and as we found that we had to deal with a multitude of varieties and classes of sugar, of which previously little or nothing had been known. Neither again am I able to say that this system of classified duty has been condemned by our experience of its practical working. Let us look at the consumption of sugar per head of the population. In 1841— which was, however, a period of relative scarcity — the consumption of sugar in this country amounted to no more than seventeen pounds per annum per head. In 1851, when there had been a change to a period of almost entire free trade, the consumption had risen to 26¾ lbs. per head. In 1861 we had been for ten years under the operation of this classified system, but Parliament had not had it in its power between 1851 and 1861 to give the consumer any such signal and decisive boon as it had conferred between 1841 and 1851; yet the growth of consumption had by no means stopped, but it had increased from 26¾lb. in 1851, to 35¼ lbs. in 1861, and in 1863—although that year was, as I have stated, a year of comparative scarcity—it had increased to 35¾ lbs. per head.

Neither can it with truth be said that the system of classification has been condemned by authority. I speak in the presence of my hon. Friend the Member for Rochdale (Mr. Cobden), who, among living men, on a question of free trade, has not only a right to be heard, but to be heard among the very first. He has been manfully challenged by his constituents—I am revealing no secret now, but only repeating what I have seen in the newspapers—and he has answered them like a man. A portion of them make an appeal to him to be the champion of uniform duty as a thing required by the principles of free trade. His answer is to the effect that, in his opinion, ad valorem duties, or an approximation to that method such as we have in the case of sugar, is not in point of principle to be condemned. I say in point of principle, because in the application of that principle to practice, there are several considerations which must govern our proceedings.

Again, Sir, on questions of this nature the authority of The Economist newspaper is one which carries great weight among the most intelligent and instructed commercial classes. That journal has taken the side of classification. But I shall not attempt to describe by reference what I may call the literature of the subject. It has been perfectly enormous. To keep abreast of that literature, I laboured and struggled as long as I was able; and I thought — I conscientiously believed — until within the last fortnight, with something like success. Up to that time, I believe, I had conscientiously fulfilled the duty of making myself acquainted with the whole product of the press of the country, so far as the sugar duties are concerned; but at last I was compelled to abandon the attempt. I have, however, had the advantage of seeing the very able publication of Professor Leone Levi, of King's College, who without being, as far as I am aware, actuated by any bias on the subject, distinctly gives judgment in favour of the principle of a classified duty on sugar. Speaking in this House, however, I may now allude to an authority on the question, to which it will perhaps be deemed more to the purpose that I should refer. Two years ago a Select Committee was appointed on the Motion of my hon. Friend the Member for the City of London (Mr. Crawford). That Committee was constituted with great care. It was presided over, on the part of the Government, by my right hon. Friend now the Secretary for the Colonies (Mr. Cardwell); and that Committee, after a patient and impartial investigation of the question under their consideration, pronounced distinctly in favour of the present system of classifying sugars for the purposes of duty. Nor is even this all; for last year we had what may be called an international discussion on the subject. Chosen officers from the Customs and commercial departments of the European countries most interested in the sugar trade—namely, England, France, Belgium, and Holland—met in Paris to discuss the matter, with especial reference to the systems of drawbacks in use in the several countries; and not only did the representatives of England find no reason to recede from our system, but the representatives of France, and also, I think, the representative of Holland, actually came to the conclusion that they would do well to abandon the system of an uniform duty, and come over to the system of classification. Therefore, Sir, so far as authority is concerned, there is, I think, a very considerable mass on the side of the system now embodied in our law.

I admit, however, Sir, that authority though it is a considerable element in the case is not the only nor even the main consideration which should guide us. Let us turn, then, to argument. And here we are told by those who recommend uniform duty, that classification is protection; while on the other hand the West Indian colonists says, "No, classification is not protection, but uniformity is protection." Well, according to the old proverb, "Give a dog a bad name, and hang him," it is, I confess, somewhat satisfactory to find that, at this time of day, we have nothing to do but to fasten on any doctrine the name of "protection," in order to demonstrate to any reasonable man that we have fastened upon it the worst and most conclusive condemnatory charge to which any plan can possibly be open; so much so, indeed, that no man will have the courage to defend a legislative proposal under such a stigma. But there is another argument against classification, which purports to be drawn from the analogy of our tariff, and the mode in which we deal with other articles. It is said, "You never dream of imposing different duties on different qualities of tea, and why should you do it in the case of sugar?" The fact, however, is that we did impose different duties on teas of different qualities, and that we abandoned that system, not because it was false in point of principle, but simply because, from the nature of the commodity itself, the principle was found inapplicable in practice. But is it true that uniformity of duty is the general characteristic of our tariff? That tariff, I am happy to say, now reaches only to such moderate dimensions, that it is not easy to produce very numerous instances of the soundness or unsoundness of the view taken upon the one side or the other with regard to this point. The instances, however, although few, are nevertheless almost all distinctly in favour of classification. The wine duty is a rude and partial and very far from being a consistent approximation-—but still in a degree it is an approximation—to a duty on value; for there can be no doubt that, upon the whole, the light wines consumed in this country are much cheaper wines than the stronger. Take, as a clearer example, the case of coffee; when it comes here in its raw state it pays a duty of 3d. per lb.; when roasted the duty is 4d. per lb.; and this instance is particularly applicable to the case of sugar, because the differences between different sugars is little, if anything, more than a difference in the degree of manufacture; yet we are told that if we impose a greater duty on sugar in its more manufactured state, we depart from the analogy of the tariff, besides being guilty of the high crime and misdemeanour of protection. Again, what do we do with respect to cocoa? When the pure raw material comes into our market we lay upon it a tax of a farthing per lb.; but when it has gone one stage further, and the husk is removed, the charge is raised to 1d.; when it has made a further advance, and reaches the condition of cocoa paste, we tax it at the rate of 2d. per lb. The duty on corn is a shilling a quarter, and we are now about to levy upon it 3d. a cwt.; but on flour, which is simply corn manufactured in part, and rid of a certain portion of refuse, we impose 4½ d. per cwt. There is also the case of wood; the raw material, the tree as it is cut, pays a shilling a load, but let it he sawn up into planks before it comes here and it pays 2s. a load. These things being so, it will, I think, be seen that the analogy drawn from the tariff is completely in favour of the system of classification.

Let us now look at the plans proposed, and endeavour to judge them by their respective merits. Sir, I know that the Committee has a peculiar aversion to deal with any question in respect to which there are three courses which it might be possible to follow. I am extremely glad, therefore, to be able to say that in the present instance there are not three but four courses, so that I am thus relieved from a great dilemma. The plans suggested are these:—One is to have two rates of duties, the first on refined sugar and the second on unrefined. Refined and unrefined, however, are not the only categories with which we have to deal, because both those descriptions come under the head of solid sugar. There is besides these a class of sugar which, in unscientific language, may be specified as liquid, and which comes hither under the title of either "melado" or "molasses." There are those who say, "Let us have one duty for refined, and a second for unrefined solid sugar; with a third duty for liquid sugar." But that does not accord with the doctrine of uniformity. Another plan is to have one rate of duty only on refined and unrefined sugar, but still to have a second rate for liquid sugar. Neither does this plan in any manner satisfy or give effect to the arguments for an uniform duty. A third plan is, to have one rate of duty only for both solid and liquid; and the fourth is to adopt a system aiming at an approximation to value, upon the principle of the existing system, but without adhering altogether to its details. Now, I beg to throw overboard, in the most ruthless manner, the two first of these plans. It appears to me that the advocates of an uniform rate have not—to use a homely phrase—" a leg to stand on" when they draw a distinction between refined and unrefined sugar. I am confident that the proposal to compound together all classes of unrefined sugar, but still to recognize a distinction between them at a particular moment when the article becomes, what we chose to call, refined, cannot be upheld in argument, or in practice. I reject in the same way the distinction sought to be drawn between solid sugars on the one side, and liquid sugars on the other. When it becomes the interest of a man to narrow and confuse the line between these two classes, the only difference being that the one contains more moisture than the other, you will not be able to mark the; distinction between them. All sugar contains some moisture. One principle governs the whole matter. Any distinction drawn must be purely arbitrary, and could not possibly bear the stress we should have to lay upon it, if we were to adopt this form of legislation. If we are to have a uniform duty, it must be upon the footing of a principle which will cover alike the cane juice as first expressed from the cane and the refined sugar consumed at the breakfast or dinner-tables of our families. The question, therefore, simply lies between a really and rigidly uniform duty on the one hand, and a classified duty on the other, founded on the principle of the present scale. How, then, do we deal with the point at issue? I deal with it in the first place by making an admission. I do not contend that the present scale is a perfect one. Nor do I adopt the principle on the authority of the Select Committee. Though authority is in favour of the principle of the present system, yet, if the weight of argument were the other way, the Government would not, I admit, be justified in sheltering themselves under that authority. But, moreover, it is to be borne in mind that it was pointed out by the Committee that the existing scale operated unjustly at two points. It constitutes, as they think, an almost prohibitive duty on the lower descriptions of sugars which may come here to be refined for consumption; and it operates severely, also, on the higher descriptions of unrefined sugar which come from the Mauritius, the East Indies, and elsewhere. Again it has been suggested that the difficulties of the case may be ultimately met by giving permission to refine in bond. I do not know how that is. But, for the purposes of the present discussion, I put aside altogether the question of refining in bond.

In endeavouring to grapple practically with the subject, I think we ought to come to the resolution that no class interests ought to govern the adjustment of the question; and I further admit that, although there would be certain difficulties connected with the system of drawbacks in the event of our adopting a uniform rate of duty, yet those difficulties may not be of sufficient weight to call upon us to reject that principle, if in other respects we should come to the conclusion that it was sound. The general proposition which I lay down, and which I invite the Committee to proceed on, is this—that the form of our duty should be such as will least interfere with the natural course of trade, and be the least open to the charge of offering to the producer or manufacturer a premium on doing something different from that which he would do if there were no duty at all. Now, let us try on that principle how we are to proceed. I am quite willing to accept in general terms the doctrine laid down by the Manchester Chamber of Commerce, and in which, I may add, that the Liverpool Chamber of Commerce have concurred. I received the other day an address from the Manchester Chamber of Commerce, to which was attached a name distinguished in the annals of free trade— that of Mr. Henry Ashworth—and which I think contains sound doctrine on this question. It says— Your memorialists are most desirous that the duties on sugar should be fixed at as low a rate as possible, and that in the interests of the consumer no impediments should be opposed to the importation of any class of sugar, from the very lowest quality to the finest loaf sugar; and in order that no one class of persons should be protected at the expense of another, it is, in the opinion of your memorialists, needful that the duties be assessed upon the article in proportion to the amount of crystallizable saccharine matter which it contains. I believe that that is a sound principle, inasmuch as it indicates the main basis of just legislation, which should, in our opinion, take the amount of crystallizable saccharine principally for its rule. Now, let me try the case by an example; and here I will, for once, introduce one of those barbarous and outlandish words to which I have referred, namely, "jaggery," which signifies the lowest description of sugar made in the East Indies. Let us suppose that there are in the market of the East Indies, at a given moment, 2 cwt. of jaggery, each of which contains 50 per cent, not of saccharine matter, because in saccharine matter they will perhaps not differ very much from other and far better sugar, but of what is called crystallizable saccharine matter; that is to say, saccharine matter of a description that can be profitably extracted by the refiner, or what I would call extractible sugar. These 2 cwts. will, when refined, yield, without including the minor products of the refinery, 1 cwt. of sugar. The question is, who is to manufacture the article, the refiner in India, or the refiner in England? The sugar is, by the supposition, just as it has come from the cane and undergone the first process; the point for our decision is, how are we to adjust our law in such a way that we shall, by means of the duty, give no inducement to any man to refine in England rather than in India, or in India rather than in England? That, I think, is a fair way of stating the case. Now, what will the Indian refiner do if we have an uniform duty, which we are told is the way to do justice and to avoid the scandal of protection? The Indian refiner buys these 2 cwts. of jaggery, refines them, and sends the refined sugar to this country; and if the duty in this country is 10s. a cwt., he pays 10s. for the introduction of his 100 lb. of refined sugar. What is the British refiner to do? He buys these 2 cwts. in India on the same terms as the Indian refiner. Very good. He sends them at a greater expense to England. With that greater expense we have nothing to do. We must not undertake to reimburse him for a single farthing of it. It is his affair, not ours. But when he has brought his 2 cwts. here, that he may refine them, he has to pay 10s. duty upon each. So that while the English refiner, to get his 100lb. of sugar into the market, has to pay 20s., the Indian refiner sends it in for 10s.; and yet we are told that that is the way to do justice and escape the stigma of protection.

Now, Sir, our sincere, impartial desire has been to consider the question entirely without prejudice; but there is no doubt what the operation of such a duty as that would be. It would be simply equivalent to a bounty approaching more or less nearly to 10s. a cwt. upon refining in India, as against refining in England. And it might be that, although from the dearness of skilled labour, the dearness of capital, and the dearness of machinery in India, refining in that country might cost some shillings, say 2s.—say, if you like, 5s. — a cwt. more than in England, it would still be worth a man's while to refine in India rather than send the sugar to be refined in this country, because of the heavy fine imposed upon him by our fiscal law. That is the view which Her Majesty's Government take of the matter. We are not willing to give any premium for the employment of labour and capital in England rather than in India; but certainly we are not willing to be parties to imposing a penalty upon the employment of labour and capital in England, as compared with India; and this it is which would in our view be the effect of an uniform duty. We have therefore sought to amend the duty in general conformity with the principle laid down in the memorial of the Manchester Chamber of Commerce.

The present duties upon sugar—I reject for a moment the liquid or semi-liquid classes, which it is not at this moment necessary to keep in view—the present duty upon sugar is distributed into four classes: refined sugar, which is charged 18s. 4d. per cwt.; white clayed, 16s.; brown clayed, 13s. 10d.; Muscovado, or below brown clayed, 12s. 8d. And here for a moment I must make a further reference to what are called "Dutch numbers," because, although that may be speaking in a foreign tongue before a general audience in England, yet the Dutch numbers are, in point of fact, the only universal language of the sugar trade of the world. If you tell a man of any nation what your duty is according to the Dutch numbers, that statement is construable into the trade terms of every tongue, and he knows exactly on what qualities of sugar your duty of any given amount will fall. Our "refined" corresponds with the best of the Dutch numbers, the highest of which is 20. It includes numbers 19 and 20. The "white clayed or equal to white clayed" corresponds with the numbers from 15 to 18 inclusive; the class which we describe as "brown clayed and equal to brown clayed" corresponds with the numbers 11 to 14; our class, No. 4, "not equal to brown clayed," corresponds with the Dutch numbers 7 to 10; and nothing under 7 can, I believe, ordinarily pay the duty which we now impose.

In proceeding to revise the scale thus established, we have, in the first place, had to consider whether it was desirable for us to alter essentially the present dividing points between these classes. There are four classes, and there are, therefore, three dividing points. Those dividing points have not been fixed with, reference to any abstract principle. They rest upon knowledge and experience, and they are now pretty well understood—at any rate, as well as they are capable of being understood—all over the world. We have, therefore, thought that it would be very undesirable to recast the duties in toto, and to establish a completely new set of distinctions. Consequently, we adhere to the dividing points between the classes which are now established; but we meet the grievance of the better unrefined sugars by diminishing the intervals of duty at the upper end of the scale; and we meet the grievance of the lower class of sugars by establishing a new class at the lower end of the scale, with a lower rate of duty than the rest, for the purpose of making those sugars practically admissible which are now excluded. The drawbacks, of course, will have to be altered in proportion to the duties. I should say also, with regard to a collateral point of some importance, that in order to make this change fair as it affects the refiners, we shall propose to postpone the reduction of the duty upon foreign refined sugar for four weeks from the present day; whereas I hope that, if the House is disposed to accede to our proposal, and should think it reasonable to proceed upon this day week with the Resolution relating to sugar, the new law will be generally in operation as early as on Saturday week.

I will now, Sir, proceed to give the new scale of duty: —Refined sugar, instead of 18s. 4d., will, if our proposal be adopted, stand at 12s. 10d. per cwt.; white clayed, or equal to white clayed, instead of 16s., at 11s. 8d.; brown clayed, or equal to brown clayed, instead of 13s. 10d., at 10s. 6d.; Muscovado, instead of 12s. 8d., at 9s. 4d.; and a new class will be constituted for inferior sugars, corresponding with the Dutch numbers under and up to No. 6, which will be liable to a duty of 8s. 2d. The duty on molasses will be 3s. 6d. per cwt., and that on melado 6s. 7d. The effect of these changes I will describe as well as I can. At present, the interval between "brown clayed" and "refined" is, I think, the chief subject of complaint. It is so great that it certainly does, in our judgment, somewhat disturb and divert the natural course of trade. It is now 4s. 6d. a cwt. We reduce it to 2s. 4d. The fifth class provides for the low sugars now excluded. The smallest reduction we make upon any description of sugar is 3s. 4d. a cwt., the largest 5s. 6d., the average is over 4s.; and although it is very difficult to compare classified duties which do not run upon precisely the same terms, I think I may say that the effect of this change will be to reduce the duty on sugar to 1s., or to more than 1s. per cwt. beneath any point at which it has stood before during the present century. Finally, Sir, I have to add that we propose to make the sugar duty the subject of a permanent Act, and to leave the tea duty leviable from year to year.

I will now state to the Committee what I think will be the financial result of this plan. The Revenue from sugars for 1864–65, as we estimate it, would, if left without alteration, amount to £6,555,000. The reductions of duty, as I have stated them, will cause a first loss of £1,719,000; but, allowing for the entry of sugars that are now practically excluded, and taking credit for an increase of consumption amounting to 6 per cent, which I think is a moderate estimate, £361,000 of that sum would be recovered, and the loss to the Revenue in twelve full months would be £1,358,000. Again, however, allowing a trifling sum for the fraction of a year which has passed, I take the net loss for 1864–5 at £1,330,000. That, as the Committee will see, has reduced my surplus from £2,560,000 to £1,230,000. So much for the question of sugar.

And now, Sir, I come to a subject which, considering the circumstances of the time, it is impossible for Her Majesty's Government, whatever their view of it may be, to pass by without notice. I allude to the demand which has been made for the reduction or repeal of the Malt duty. That is a subject of very great importance. It involves a Revenue of about £6,000,000, and its reduction by one-half would, in the first instance, involve a loss very considerably larger than the great reduction which I have just proposed upon sugar. Now, Sir, I do not disguise the fact, that this has become a question apparently of great political importance. A great victory has recently been won in Hertfordshire. A gentleman I believe highly competent not only to take a share in our proceedings, but even to adorn this House, has failed to obtain a seat in Parliament because he was not ready to accede to the demand for the repeal of the Malt duty. The successful candidate, if we may rely upon the declarations ascribed to him, saw no difficulty in the way; and on the list of his committee appeared a name most highly and justly respected in this House, the name of a person of great political influence, that of my right hon. Friend the Member for Hertfordshire, Secretary of State for the Colonies in the late Administration, (Sir Edward Bulwer-Lytton). A Motion from the opposite side of the House has also been hanging over our heads, and is now only for a short time suspended, which declares that the Malt duty has a paramount claim on the consideration of Her Majesty's Government, with a view to remission or reduction. Now, Sir, I do not suppose the Committee would allow us to keep that surplus of a million and a quarter, which I have named, in our own hands. Are they disposed to give it to the malt duty? [Several hon. MEMBERS: No!] I am very much obliged to my hon. Friends who said "No," for relieving me of that portion of my labours. But I wish, at the same time, seriously to say—because it is a serious matter when the country is agitated on a question of this kind, and when prospects involving such an amount of financial change are held out to persons and classes who believe themselves to be deeply interested—that it is desirable we should ascertain whether these are prospects of which it is reasonable to expect the fulfilment, or whether they are wholly of a visionary and delusive character. It is commonly said that if you reduce the malt duty one-half there will be little or no loss. But, Sir, it is, unfortunately, part of my duty to defend all taxes; and I find myself constantly confronted with a corresponding assertion. It is a most convenient assertion for a man who demands the reduction of a tax. He gives his opinion, and I give mine; I think mine is the best, and he adheres to his own; but there is no mode of settling the question between us. If, however, Parliament adopts the change, and it is followed by a great loss, no one is responsible, which is not satisfactory to the public, nor advantageous for the general welfare. In the case of malt, however, we have fortunately some means of determining whether a reduction of one-half in the amount of the duty will or will not entail a loss to the Revenue; because a reduction, not precisely of one-half the malt duty, but sufficiently near that proportion for my purpose, took place when the removal of the beer duty was sanctioned. The removal of the beer duty was adopted not only because it was a moiety practically of the whole tax, but I imagine also because, apart from the inequality of its imposition, it may have been thought to be the most burdensome moiety. A period of no less than thirty-five years has elapsed since the beer duty was removed; and although last year the malt duty exceeded by £700,000 the amount, levied the year before, to this hour the malt duty has not replaced to us the loss of the beer duty. In 1829, the last year of the beer duty, the joint produce of the two taxes was £7,286,000, The malt duty for the last year was £6,091,000, and the average of the malt duty might, perhaps, be stated at about £5,500,000. So that, having taken off practically about one-half of the malt duty, after the lapse of thirty-five years there is a gap of a million and three-quarters not yet filled up. I ask, after finding such a state of facts, can it be maintained that little loss will be felt, even at the first moment, if we again reduce the malt duty one-half? No, Sir, the case stands far otherwise. If you choose to take that step, you may tell your little children now growing up that the longest lived among them may witness a recovery of the duty to its present figure; but pray give up the idea of ever seeing it yourselves within the term of your natural lives.

After all, Sir, as I conceive, I am not here to defend the malt duty specially; whether as a tax, or as an excise tax, I have no peculiar love for it: but in looking at the claims of various interests to remission, we must look at their comparative grievances. What is the grievance of the grower of barley? Has free trade been a severe infliction upon him? It is not here, as in the case of the paper-maker, who is knocked down and put under sharp suffering before he gets on his feet again. The grower of the fine barleys in this country is possessed almost of a natural monopoly. He has had no pressure at all to undergo. He cannot move our compassion by pointing to decreased and still decreasing prices for his commodity. What was the price of barley before the abolition of the Corn Laws? From the time when the sliding scale began, and averages were taken under that law—that is to say, from the period from 1827 to 1846—the average price of barley was 32s. 6d.; and for the seventeen years since the repeal of the Corn Laws the average had been 33s. 11¼ d. Even that statement hardly represents the case, because the rise established has not I apprehend been in fact so much a rise on bad barleys, as on the good; and if I could separate the good from the bad I should probably be able to show you that the growers of good barley who are now so obstreperous for relief, are the very men whose produce has most increased in value. ["No, no!"] Well, then let it simply stand that the whole of them have increased in price; and my belief is that the position of the grower of good barley is the most favourable of all. Let me, however, carry the elucidation one point farther. The years which have elapsed since the repeal of the Corn Laws include a few years when the mind of the country was possessed by uncertainty and panic of such a character that the transactions of those years hardly form a secure test; but if I were to take the last eleven years, from 1853 to 1864, the average price of barley would be no less than 36s. 1d., or 3s. 7d. a quarter more than for the twenty years preceding the alteration in the law.

I have another point to mention; one of considerable interest, and the only point I shall call attention to in further vindication of the intentions, or non-intentions, of the Government as regards the malt duty. I always feel comparatively at my ease when I can legitimately refer to considerations which, besides appealing to such broad sentiments of nationality and patriotism as we all entertain on behalf of the country at large, induce English, Scotch, and Irish gentlemen to bear in mind, not the selfish interests, but the fair respective claims of each of the three countries. The question of the malt duty has never been laid before the House from that point of view, and, in my opinion, it is high time that it should be so presented. When the hon. Member for the North Biding (Mr. Morritt) or any one else, proposes to surrender five or six millions of Revenue, derived from the malt duty, let us reflect how that proposal will bear, if it should be adopted, on the interests of the three countries, and how the amount of relief will be divided between them.

If we take together the Revenues received into the Exchequer from spirits and from malt, we find that England pays £10,500,000, or about 10s. per head of its population; Scotland pays £3,620,000, or about 22s. per head; and Ireland, though unhappily not so wealthy as either of the other two countries, pays £2,653,000, or 10s. per head; Ireland, in fact, pays almost exactly the same proportion that is paid by England. What would be the effect of giving away these £5,000,000 or £6,000,000 of malt duty? It would be a distinct boon to England, and the gap created by it must be filled by means of general taxation on the three countries. Scotland and Ireland, while obtaining hardly any appreciable relief, would be of course liable to pay their fair share of any augmented Income Tax, or of any other tax you might choose to impose for the purpose of meeting the deficiency. The malt duty paid by England in the financial year that has just expired was £5,722,000; by Scotland, £263,000; and by Ireland, £300,000. Scotland and Ireland pay their strong liquor tax, and pay it largely; but they pay it in the shape of the duty upon spirits, which the hon. Member has not proposed, and which I hope the House would not consent, to reduce. But the fact stands that his proposal would, in its operation, be egregiously and grossly partial. And if the hon. Member for the North Biding will accept a friendly suggestion from me, I advise him before he makes the Motion of which he has given notice, and which I have no doubt he will submit to the House with great ability, and evidently with most powerful and influential support, well to digest the figures which I have now given with reference to the relative bearing of the malt duty upon the three countries. Her Majesty's Government, not insensible to the evils attending on the application of a system of Excise to any manufacture, have notwithstanding come to the conclusion that they would not fulfil, but, on the contrary, that they would be betraying their duty to the country under the circumstances in which we stand, if they were to apply any part of the limited surplus at our command to the reduction of the malt duty.

There is another question that it is my next duty to bring under the view of the House; it is the question of the Income Tax. For this is not only the largest subject in amount of Revenue upon which it is in the power of any Minister of Finance to address Parliament, but it is for other reasons by far the most impor- tant. It is the most important, because it is associated with the strength and security of the country in times of emergency, in a manner that belongs to no other tax, and because it involves social questions touching the relations of class to class and their relative susceptibility of taxation, and moral questions—especially in their relation to certain Schedules of the tax—which are of a moment far transcending the topics that hear on ordinary questions of taxation. It is, in fact, a subject so large that it might be made the foundation not only of a particular proposition, but even of a policy. Now, Sir, it is, I think, beyond all dispute that the country ought to be dealt with fairly and plainly on the subject of the Income Tax. The country ought to consider and Parliament ought to decide what course it will take. Will it maintain the Income Tax at its present level? will it abolish the tax altogether? or will it reduce it in amount? Will the Legislature consent to regard the Income Tax as an instrument of ordinary finance, for the satisfaction of ordinary purposes; or will it decline to employ it in times of peace, and in the absence of great national emergencies, except it be for the special purpose of effecting further reforms in its general financial policy? These questions have all, perhaps, been mooted from time to time: but they have never been definitely decided by Parliament. In 1842 the Tax was proposed with a view to commercial reforms. In 1845 it was renewed with a view to further commercial reforms. In 1848 it was renewed, on the proposition of my right hon. Friend the Secretary of State for India (Sir Charles Wood), in a time of considerable public apprehension, though not perhaps of absolute danger, but it was renewed only after he had consented to make a great abatement from the rate at which he originally proposed to revive it. In 1851 Parliament refused to renew it, except on the appointment of a Parliamentary Committee which was appointed to inquire into all its bracings and into the possibility of entirely reconstructing it. In 1853 it was renewed for the longest period that Parliament has ever granted the Tax, upon a statement of figures and upon calculations which at the time appeared to me, I confess, as they also appeared to others, to afford a reasonable promise of its extinction. In 1860 it was again renewed, and even raised, for the purpose of meet- ing the necessities of the country in connection with its establishments for defence, but likewise in the same spirit in which it had been originally conceived, and with a view of carrying boldly onwards the great work of commercial reform. Since 1860 Parliament has taken no definite Resolution on any question of policy connected with the Income Tax; but it was well content last year, on the proposition of the Government, to reduce the rate from 9d. in the pound to the same rate at which it was originally imposed—namely, to 7d. in the pound. These things being so, we find ourselves, in fact, at the point at which we stood in 1842 in reference to this matter. The questions, however, which I lately mentioned, are questions on which Parliament ought to have an opinion. It is not desirable that they should be disposed of in an indirect or equivocal manner, or that the Income Tax should creep unawares into perpetuity; that it should be continually dealt with simply by renewals from twelvemonths to twelvemonths, founded on and perhaps sufficiently justified by the exigencies of the moment, but having no reference to policy, and announcing to the country no clear, distinct, and decided views on the part of Parliament with respect to the proper mode of dealing with this great instrument of taxation.

There are many arguments, without doubt, which may be urged in favour of the permanent maintenance of the Income Tax as a source of ordinary revenue. Its efficacy is enormous; and I do not know any tax by which in the same degree as by the Income Tax you would be able to get at the vast reserved incomes of the country. You get at them, it is true, unequally and roughly, for you refer it, in a large majority of such cases, pretty nearly to the conscience of each taxpayer to decide what his standard of payment shall be; but still you get at them, and in a greater degree than by any other engine of taxation with which I am acquainted. On the other hand, the House is aware of the stringent mode in which the Income Tax operates on the lower class of incomes, though its effect in that way was very much mitigated by the measure adopted last year for the deduction of £60 from incomes below £200. And, no doubt, those who desire to see the permanent maintenance of the Income Tax have reason to congratulate themselves on the ope- ration of a plan which relieves the impost of much of the hardship with which it pressed on the lower classes of incomes. Nevertheless, it is indisputable that the tax still bears severely on small fixed incomes, on what may be called the non-elastic incomes of the country. It is also unquestionable, that it imposes a serious burden on the taxpayer in the shape of time, trouble, and annoyance; especially I am afraid in a year like this, when the new assessments are made. It has been my disagreeable duty in this House to perform the invidious task of deprecating the complaints of Members who complain of the injustice involved in the way in which this tax falls on many of their constituents; and I have done so, not because I do not sympathize with those who so complain, but because I know that much annoyance and trouble are inseparable from the ordinary operation of the tax at the period when the year arrives for the renewal of the assessments. The evil of inquisition into private affairs is a serious one; and the use of a war tax in time of peace, by which a portion of our last reserve is expended, are subjects well deserving the notice of the House. To the opinion of the inequality and injustice of the Income Tax which is maintained by some, and of which my hon. Friend the Member for Buckingham (Mr. Hubbard) is, perhaps, the most ardent champion in this House, I do not accede; but it cannot be denied that that opinion is widely spread among many large classes; and such a conviction or impression, prevailing so widely, is no doubt, a matter to be considered in reference to any means of taxation. As to fraud, it is needless to enter on that topic; it is a sad and perplexing subject, and I am afraid that the extent to which encouragement is given to fraud through the imposition of the Income Tax is an evil of the most formidable kind, and of an extent which it would be difficult to measure. But there is one operation of the Income Tax which I cannot help frankly stating to the House, and that is its operation with respect to public economy. That is a topic which I do not think has been fully, or perhaps ever, discussed in Parliament. An experience, which I may now call long, in the office which I have now the honour to hold, and the necessity of placing myself in conflict at all times, by day and by night, in all places and all circumstances, with every sort of demand for increased public expenditure, have brought me by steady degrees very nearly to a grave conclusion on this subject. My growing belief is, that if it is the desire of the House to see re-established in public administration those principles of reasonable thrift—I do not speak of wholesale changes or wholesale reductions, in which I have little faith—but those principles of reasonable thrift which directed the Government of this country from about the period of the Duke of Wellington's Administration until the time of the Russian war, it is most questionable whether that object can be accomplished compatibly with the affirmation of the principle that the Income Tax is to be made a permanent portion of the fiscal system of the country, with the view of satisfying, not the particular exigencies of the moment, or of working out particular reforms, but of satisfying the ordinary every day expenses of the nation.

But now, Sir, it may be said, "Why all this idle talk about economy? Have you not declared to us the wealth of the country? Have you not shown the enormous development of our trade?" Yes, I have; but I hold this opinion as a matter of principle—that public economy now remains just as much the bounden duty of this House as it was before we commenced our commercial legislation, or reaped the benefit of our vast railway system, or before the country achieved the vast material, and the considerable social and moral progress, of which we are now the rejoicing witnesses. For, in the first place, it may be said that in this country you have still and will always have an enormous mass of paupers. Just now I read, amid the cheers of the House, the statement that our paupers are reduced in number to somewhere about 840,000. That amount, however, does not include persons who are dependent upon charitable establishments; or who are relieved by private almsgiving; but only comprises those who are driven to the last necessity of resorting to the poor-house. And surely even the reduced number which I stated is a great, aye, an enormous number. But, besides all those whom it comprises, think of those who are on the borders of that region — think how many of the labouring classes are struggling manfully but with difficulty to maintain themselves in a position above the place of paupers. I saw but yesterday a clergyman whose sphere of duty is laid in the east end of London; and he told me that he had the charge of 13,000 people, of whom 12,000 were ever on the verge of actual want. I read but last week the letter of a philanthropist well-known in this country, in which he said—and, I believe, said with perfect truth—that there are whole districts in the east end of London in which you cannot find an omnibus or a cab, and in which there is no street music, nor even a street beggar. What shall I say with respect to Ireland? When we think of the population of Ireland, and when we hear the Members from that country rise in this House and complain of the bearing of unequal taxation, not because they object to bear their fair share of taxation, but because they say, and they see, that the taxes press too severely on the country of whose interests they are the special and chosen champions, there surely remains no room for doubt that it is our duty to practise public economy. Again, and yet more at large, what is human life, but, in the great majority of cases, a struggle for existence; and if the means of carrying on that struggle are somewhat better than they were, yet the standard of wants rises with the standard of means, and sometimes much more rapidly, and it does not follow that because you have made additions to the means of subsistence and comfort of the people of this country, that you can safely cease to care for the supply of other wants which demand your consideration. Happily, much already has been done. In many places wages have much increased, though in many other places they have not. Had we, however, achieved much more than all that has been done, ample room would still remain, and ample necessity for public thrift. If this be doubted, need I say that we have authority in our favour, independent of general argument. Two years ago the House of Commons wisely assented to the following Motion, proposed by the noble Lord at the head of the Government:— This House, deeply impressed with the necessity of economy in every department of the State, is at the same time mindful of its obligation to provide for the security of the country at home and the protection of its interests abroad, and observes with satisfaction the decrease which has already been effected in the national expenditure, and trusts that such further diminution may be made therein as the future state of things may warrant. I consider that we are bound to observe the spirit of that Resolution. And for my own part I must say that, quite independently of all proof of need among the people, and of all citation of authorities, it is the duty of the Legislature constantly to study the enforcement of thrift in the public expenditure.

After all I have said, I certainly am not the man who ought to oppose on principle any proposal that the Income Tax should run over a term of years; but I have been sufficiently warned of the danger of making such a proposition. We now ask the House to adopt no general conclusion on the subject. We do not propose a plan which is to adopt the Income Tax as an ordinary means of Revenue, neither do we propose as a principle its abolition; but we propose that we should aim at and pursue as a policy its reduction, as circumstances may allow, to that which was once, or which may hereafter be taken for, its legal minimum; and that we should now at once proceed to take the first of the steps for bringing us to that result. Our proposal is to take off 1d. from the Income Tax, which now stands 7d. in the pound. If it should happily be in the power of the Committee at any time to repeat that operation, and to reduce the tax to 5d., our position might then be described as follows. The proceeds of the tax at that rate would be about a trifle over £6,000,000; and then it would be perfectly possible for Parliament to proceed even to the extinction of the Income Tax. But it could only do so, firstly taking into view the elasticity and growth of the Revenue to which I have referred; secondly, if it were prepared steadily to exercise in the manner described in the Motion of my noble Friend two years ago the spirit of economy; and thirdly, if it thought fit to make what would, I apprehend, be alike just and necessary, namely, some addition to the direct taxation of the country in other forms. Or, it will be possible for the House, if it shall think fit, to adopt another mode of operation. It would be possible for Parliament to say, "We will recommence another round of change, treading that circle in which so much good has been achieved; and will take away portions of the burdens which are still imposed in the form of indirect taxation." Or, lastly, it might come to the conclusion that the Income Tax was fit to be retained, without any special justifying cause, as part of the ordinary financial machinery of the country. But that conclusion would, as I have observed, be one far from favourable, in my judgment, to the practical enforcement of economy. The principal point, however, to which I would call attention at present is this; that if we can reach the standard of 5d., then we shall establish ourselves in a position from which Parliament will have it in its power to consider deliberately and on principle what course it shall thereafter pursue, with a view either to the maintenance or the abolition of the tax.

We propose then, Sir, to make a reduction in the impost to 6d. The ultimate loss from the removal of that 1d. I estimate at £1,230,000, the immediate loss, or loss for the financial year, being £800,000. The case of Schedule B in Scotland and Ireland will be dealt with precisely as in the Act of 1853; £430,000 of the entire loss will be postponed.

The surplus, which began with £2,570,000, is now brought down to no more than £430,000. And here it would have been the wish of the Government to stop. There is, however, still another subject demanding our attention. In consequence of the formal intimation given by the vote of the House, we have deemed it our duty, limited as are our means, to consider whether we could submit a measure which, whatever else it might do, would do good as far as it went, and which would indicate at least our desire to meet with deference and respect the convictions entertained by the House of Commons, even although we did not entirely and absolutely share them, if it could be done without a vital sacrifice of the public interests. I refer to the duty on Fire Insurances. We do not think that we should have been justified in entertaining the idea of a large operation with regard to that duty, to the displacement or prejudice of either of the proposals we have made; nor are we prepared—as, indeed, I should hope the Committee will not ask us—to assent to any such proceeding if it should be proposed from any other quarter. Now, how does the duty on Fire Insurances stand? The amount of the Fire Insurance duty is £1,700,000, and it increases at the rate of about £50,000 a year. Here, again, we are met with a difficulty that we have before encountered. There is the greatest possible difference of opinion as to what I may call the self-recovering power of the Fire Insurance duty in the event of a reduction. For my own part, I am not very sanguine on that score, at least as regards the greater part of the duty. On examination it will be obvious to the Committee that the duty divides itself into two portions, the larger of which is a tax on property, and the other, and smaller portion, a tax on industry and trade. Two-thirds of it may be said to be levied on buildings and furniture; so much of it is a tax on property. The remaining third, as nearly as it is possible to make a conjectural estimate, is levied on stock-in-trade. My hon. Friend the Member for Bradford (Mr. W. E. Forster), in the presence of an important deputation from the Chambers of Commerce, a short time ago, expressed publicly to me a strong opinion that in respect of stock - in - trade, as far as his observation went in those branches of commerce with which he is connected, or acquainted, the reduction of the Fire Insurance duty would be followed by a rapid and even by a complete recovery. I go thus far with the hon. Member— that it may be taken for a general rule that taxes on trade, industry, and labour when reduced, rapidly recover; while taxes on property when reduced, recover slowly. We have seen this rule exemplified in the assessed taxes and in other instances; the reason being, as I apprehend, that taxes, which are substantially taxes on property, are, in the main, paid by the rich, who do not feel their burdens seriously, and whose proceedings are therefore not materially affected by their removal. We have felt that there is this doubt as to the self-recovering power of the Fire Insurance duty, and it will be very desirable to arrive at least at a partial solution of it by the trial of an experiment. The proposal we have to make is, therefore, to reduce the duty to half its present amount—that is, from 3s. to 1s. 6d., as far as stock-in-trade is concerned. We shall then see what the energy of commerce will effect in regard to that portion of the tax, and we may thus find ourselves in a more favourable position for forming a judgment as to the amount of loss likely to result from dealing with the residue. [Mr. WHITE: Will fixtures be stock-in-trade?] I do not see how fixtures can be included with out considerable difficulty; but utensils and machinery will be deemed stock-in- trade. I would, however, refer hon. Members to the language of the Resolution which I am about to lay upon the table

In making this proposal, we have been partly prompted by another consideration. There is, we are aware, something very invidious in the position of farm stock in relation to stock-in-trade. They are essentially the same and they ought to be treated in the same manner. But although we think the exemption unfair, we do not propose to abolish it. We can only mitigate the inequality by a reduction of the duty on stock-in-trade generally of one-half, but even this appears to be a change of considerable value.

We propose that the Act on this subject should take effect from the 1st of July next. There will be provisions with regard to returns of the duty on altered policies, which will, of course, be at the lower rate only; but I need not enter now into the details. The financial result will probably be as follows:—The produce of the Fire Insurance duty on stock-in-trade is estimated at £566,000. The first loss by the diminution would be £283,000 for the year; but as it will operate for only nine months it will be no more than £213,000. Allowing for an increase of insurances to the extent of 10 per cent, or £21,000, the net loss for 1864–5 may be stated at £192,000.

We have now, Sir, gone to the full extent of the discretion permitted us. To sum up, the effect of the changes will be this. The surplus before any reductions was £2,570,000. The relief afforded during the year by the proposed changes will be as follows. On Sugar it will be £1,719,000, on Income Tax £800,000, on Fire Insurance duty £213,000. on Tea Licences £15,000:—£2,747,000. In 1865–6, there will be a further loss of £28,000 on Sugar: so that the total will amount to £433,000 on Income Tax, and £70,000 on Fire Insurance duty, making £531,000. The financial loss on which we must reckon in the present year will be as follows:—On Sugar £1,330,000, on Income Tax £800,000, on Fire Insurance duty £192,000, on Tea Licences £10,000 —total £2,332,000. The actual relief from taxation in the current year will, however, be greatly augmented by the reductions of last year. The relief by the present proposals will be to the extent of £2,747,000, and by the re- missions in 1863, £898,000. The total relief for 1864–5 will, therefore, amount to £3,645,000, and the estimated loss by the proposals of the year will, as we estimate, amount to £2,332,000. The surplus after these deductions is £238,000, It has grown "fine by degrees and beautifully less;" but I need not say to the Committee that it is no longer a surplus on which we could possibly contemplate any further operations.

We have proposed these plans, which I have submitted to the Committee, in the discharge of our responsibility, and not at all as being of opinion that they ought to be or can be compared in point of magnitude with the remissions and changes of some former years; but yet they are, as we think, steps towards the accomplishment of the great purposes which Parliament has taken in hand. Looking at the proposals of a particular year, they may, perhaps, be likened to the stones cast singly by the passing traveller on a heap. Each separate contribution is small; but the general result is that in the course of time a pile arises which is found worthy to commemorate some renowned action or some glorious death. It is in this sense that we offer these proposals to Parliament. We believe them to be good. We trust that they will meet with your acceptance, and that you will receive them as pledges, on our part, of an earnest desire to co-operate with the Legislature in carrying yet further forward those purposes, the steady prosecution of which has already done so much for the strength and security of England, for the comfort and happiness of the people, for the honour of the age in which we live, and for the hopes we entertain on behalf of the times that are to come.

Sir, I now place in your hands the first, of the Resolutions which we shall submit to the House in order to give effect to the financial measures of the year.

1. Sugar Duties—

"That, towards raising the Supply granted to Her Majesty, on and after the undermentioned

[In order to present a complete view of The Chancellor of the Exchequer's Financial Plan, the Resolutions which he had given notice to move in Committee of Ways and Means are here added as they stood on the Notice Paper.] (See following pages.)

[1. The Sugar Duties—

dates, in lieu of the Duties of Customs now charged on the articles undermentioned, the following Duties of Customs shall be charged thereon, on importation into Great Britain or Ireland (that is to say):

On and after the fifth day of May, one thousand eight hundred and sixty-four —		£	s.	d.
Sugar — namely,
Candy, Brown or White, Refined Sugar, or Sugar, rendered by any process equal in quality thereto	the cwt.	0	12	10
On and after the sixteenth day of April, one thousand eight hundred and sixty four—
Sugar — namely,
White Clayed Sugar, or Sugar rendered by any process equal in quality to White Clayed, not being refined, or equal in quality to refined	the cwt.	0	11	8
Yellow Muscovado and Brown Clayed Sugar, or Sugar rendered by any process equal in quality to Yellow Muscovado, or Brown Clayed, and not equal to White Clayed	the cwt.	0	10	6
Brown Muscovado Sugar, or Sugar rendered by any process equal in quality thereto, and not equal to Yellow Muscovado, or Brown Clayed	the cwt.	0	9	4
Any other Sugar not equal in quality to Brown Muscovado.	the cwt.	0	8	2
Cane Juice	the cwt.	0	6	7
Molasses	the cwt.	0	3	6
Almonds, paste of	the lb.	0	0	1
Cherries, dried	the lb.	0	0	1
Comfits, dry	the lb.	0	0	1
Confectionery	the lb.	0	0	1
Ginger, preserved	the lb.	0	0	1
Marmalade	the lb.	0	0	1
Plums preserved in Sugar	the lb.	0	0	1
Succades, including all fruits and vegetables preserved in Sugar, not otherwise enumerated	the lb.	0	0	1"

CUSTOMS DUTIES
1. Sugar Duties—
That, towards raising the Supply granted to Her Majesty, on and after the undermentioned dates, in lieu of the Duties of Customs now charged on the articles undermentioned, the following Duties of Customs shall be charged thereon, on importation into Great Britain or Ireland (that is to say):
On and after the fifth day of May, one thousand eight hundred and sixty-four —
Sugar — namely,
Candy, Brown or White, Refined Sugar, or Sugar, rendered by any process equal in quality thereto,	the cwt.	0	12	10
On and after the sixteenth day of April, one thousand eight hundred and sixty-four —
Sugar — namely,
White Clayed Sugar, or Sugar rendered by any process equal in quality to White Clayed, not being refined, or equal in quality to refined	the cwt.	0	11	8
Yellow Muscovado and Brown Clayed Sugar, or Sugar rendered by any process equal in quality to Yellow Muscovado, or Brown Clayed, and not equal to White Clayed	the cwt	0	10	6
Brown Muscovado Sugar, or Sugar rendered by any process equal in quality thereto, and not equal to Yellow Muscovado, or Brown Clayed	the cwt.	0	9	4
Any other Sugar not equal in quality to Brown Muscovado.	the cwt.	0	8	2
Cane Juice	the cwt	0	6	7
Molasses	the cwt	0	3	6
Almonds, paste of.	the lb.	0	0	1
Cherries, dried	the lb.	0	0	1
Comfits, dry	the lb.	0	0	1
Confectionery	the lb.	0	0	1
Ginger, preserved	the lb.	0	0	1
Marmalade	the lb.	0	0	1
Plums preserved in Ginger	the lb.	0	0	1
Succades, including all fruits and vegetables preserved in Sugar, not otherwise enumerated	the lb.	0	0	1
2. Drawbacks on Sugar—
That, on and after the undermentioned dates, in lieu of the Drawbacks now allowed thereon, the following Drawbacks shall be paid and allowed on the undermentioned descriptions of Refined Sugar, on the exportation thereof to Foreign parts, or on removal to the Isle of Man for consumption there, or on deposit in any approved Warehouse, upon such terms and subject to such regulations as the Commissioners of Customs may direct, for delivery from such Warehouse as Ships' Stores only, or for the purpose of sweetening British Spirits in Bond (that is to say):

On and after the fifth day of May, one thousand eight hundred and sixty-four —
Upon Refined Sugar in loaf, complete and whole, or lamps duly refined, having been perfectly clarified, and thoroughly dried in the stove, and being of an uniform whiteness throughout; and upon such Sugar pounded, crushed, or broken in a warehouse approved by the Commissioners of Customs, such Sugar having been there first inspected by the Officers of Customs in lumps or loaves as if for immediate shipment, and then packed for exportation in the presence of such Officers, and at the expense of the exporter; and upon Candy.	for every cwt.	£0	12	4
Upon Refined Sugar unstoved, pounded, crushed, or broken, and not in any way inferior to the Export Standard Sample No. 1 approved by the Lords of the Treasury, and which shall not contain more than five per centum moisture over and above what the same would contain if thoroughly dried in the stove	for every cwt.	0	11	9
And on and after the twenty-first day of April, one thousand eight hundred and sixty-four —
Upon Sugar refined by the Centrifugal, or by any other process, and not in any way inferior to the Export Standard No. 3 approved by the Lords of the Treasury	for every cwt.	0	12	4
Upon Bastard, or Refined Sugar unstoved, broken in pieces, or being ground, powdered, or crushed, not in any way inferior to the Export Standard Sample No. 2 approved by the Lords of the Treasury	for every cwt.	0	10	10
Upon Bastard, or Refined Sugar being inferior in quality to the said Export Standard Sample No. 2	for every cwt.	0	8	2
3. Continuing the Duty on Tea—
That, towards the raising the Supply granted to Her Majesty, the Duties of Customs now charged on Tea shall continue to be levied and charged on and after the 1st day of August, 1864, until the 1st day of August, 1865, on importation into Great Britain or Ireland.
4. Altering the Duty on Corn—
That, in lieu of the Duties of Customs now charged on the undermentioned Articles, on their importation into Great Britain or Ireland, the following Duties of Customs shall be charged (that is to say):

Wheat	the cwt.	£0	0	3
Barley
Oats
Rye
Pease
Beans
Maize, or Indian Corn
Buck Wheat
Bear or Bigg

5. Imposing a Duty of Customs on Lentils, Millet Seed, and Dari—

That the following Duties of Customs shall be charged on the undermentioned Articles, on importation into Great Britain or Ireland (that is to say):

Lentils	the cwt.	£0	0	3
Millet Seed
Dari

And that the Duties be paid on first Importation; and such Goods shall not be warehoused either for Home Consumption or Exportation.

INLAND REVENUE

6. Income Tax—

That, towards raising the Supply granted to Her majesty, there shall be charged, collected, and paid for one year, commencing on the 6th day of April, 1864, for and in respect of all Property, Profits, and Gains mentioned or described as chargeable in the Act passed in the 16th and 17th years of Her Majesty's reign, chapter 34, for granting to Her Majesty Duties on Profits arising from Property, Professions, Trades and Offices, the following Rates and Duties (that is to say):

For every twenty shillings of the annual value or amount of all such Property, Profits, and Gains (except those chargeable under Schedule (B) of the said Act), the Rate or Duty of sixpence.

And for and in respect of the occupation of Lands, Tenements, Hereditaments, and Heritages chargeable under Schedule (B) of the said Act, for every twenty shillings of the annual value thereof,

In England, the Rate or Duty of three pence,

And in Scotland and Ireland respectively, the Rate or Duty of twopence farthing.

Subject to the provisions contained in section 3 of the Act 26 Vict. chapter 22, for the exemption of Persons whose whole Income from every source is under £100 a year, and relief of those whose Income is under,£200 a year.

7. Fire Insurance Duty—

That, in lieu of the yearly percentage Duty now chargeable for or in respect of any Insurance from loss or damage by Fire only, which shall be made or renewed on or after the 1st day of July, 1864, of or upon any Goods, Wares, or Merchandise, being stock in trade, or of or upon any Machinery, Implements, or Utensils used for the purpose of any manufacture, there shall be charged and paid yearly a Duty at and after the rate of one shilling and sixpence per annum for every £100 insured; and that no return or allowance of Duty, except at and after the last-mentioned rate, shall be made in respect of time un expired, or otherwise, on any such Insurance as aforesaid which shall have been made or renewed before the day or time aforesaid.

8. Excise Duty on Licences to sell Tea, &c.—

That, towards raising the Supply granted to Her Majesty, there shall be charged and paid on the Licences hereinafter mentioned, the follow ing Duty of Excise in lieu of the Duty now pay able thereon (that is to say):

For and upon any Licence to be taken out yearly by any person to trade in or sell Coffee, Tea, Cocoa Nuts, Chocolate, or Pepper, in any house rated to the relief of the Poor, at a sum less than ten pounds per annum, and not being within the limits of a Municipal or Parliamentary Borough, the Duty of two shillings and sixpence.

Stamp Duties on Letters of Attorney and Proxies—

That, towards raising the Supply granted to Her Majesty, there shall be charged and paid for and upon the several matters and things hereinafter mentioned, the following Stamp Duties, in lieu of the Stamp Duties now chargeable thereon respectively (that is to say):
For and upon any Letter or Power of Attorney, Commission, Factory, Mandate, or other Instrument in the nature thereof,
For the receipt of Dividends or Interests of any of the Government or Parliamentary Stocks or Funds, or of the Stocks, Funds, or Shares of or in any Joint Stock Company, or other Company or Society whose Stocks or Funds are divided into Shares, and transferable.
If the same shall be for the receipt of one payment only	£0	1	0
And if the same shall be for a continuous receipt, or for the receipt of more than one payment,	0	5	0
For the receipt of any sum of money, or any Cheque, Note, or Draft for any sum of money not exceeding £20 (except in the cases aforesaid), or any periodical payment (other than as aforesaid) not exceeding the annual sum of £10.	0	5	0
For the sole purpose of appointing or nominating a Proxy to vote at any one Meeting of the Proprietors or Shareholders of any Joint Stock or other Company, or of the Members of any Society or Institution, or of the Contributors to the Funds thereof.	0	0	1
10. Stamp Duties on Appointments to Ecclesiastical Benefices, &c—
That, towards raising the Supply granted to Her Majesty, there shall be charged and paid for and upon the several matters and things herein after mentioned, the following Stamp Duties, in lieu of the Stamp Duties now chargeable thereon respectively (that is to say):	Duty.
For and upon any Donation or Presentation, by whomsoever made, of or to any Ecclesiastical Benefice, Dignity, or Promotion.

Also, for and upon any Collation by any Archbishop or Bishop, or by any other Ordinary or competent authority, to any Ecclesiastical Benefice, Dignity, or Promotion.
Also, for and upon any Institution granted by any Archbishop, Bishop, Chancellor, or other Ordinary, or by any Ecclesiastical Court, to any Ecclesiastical Benefice, Dignity, or Promotion proceeding upon the Petition of the Patron to be himself admitted and instituted, and not upon a presentation.
Also, for and upon any nomination by Her Majesty, Her Heirs or Successors, or by any other Patron, to any Perpetual Curacy.
Also, for and upon any Licence to hold a Perpetual Curacy not proceeding upon a nomination.
Where the net yearly value of any such Benefice, Dignity, Promotion, or Perpetual Curacy shall not amount to £50	Nil.
Where the same shall amount to £50 and not amount to £100	£1	0	0
Where the same shall amount to £100 and not amount to £150	2	0	0
Where the same shall amount to £150 and not amount to £200	3	0	0
Where the same shall amount to £200 and not amount to £250	4	0	0
Where the same shall amount to £250 and not amount to £300	5	0	0
And where such value shall amount to £300 or upwards	7	0	0
And also, for every £100 thereof over and above the first £200, a further Duty of	5	0	0

11. Hawkers and Pedlars—

That, for and upon any Licence to be taken out by a Hawker or Pedlar to travel and trade with more than one horse or other beast bearing or drawing burthen, there shall be charged and paid for every such horse or beast over and above one, the sum of four pounds in addition to the Duty now chargeable on a Licence to a Hawker and Pedlar to travel and trade with one such horse only.

12. Ad Valorem Stamp Duties on Settlements—

That, towards raising the Supply granted to Her Majesty, the ad valorem Stamp Duties granted and made payable under the head of "Settlement" in the Schedule to the Act passed in the thirteenth and fourteenth years of Her Majesty's reign, chapter ninety-seven, shall be deemed to extend to and shall be chargeable upon or in respect of any definite and certain principal sum or sums of money of any denomination or currency, whether British, Foreign, or Colonial, and any definite and certain share or shares in the Stocks or Funds of any Foreign or Colonial Government, State, Corporation, or Company whatsoever, as well as upon or in respect of the Shares, Stocks, and Funds in the said Schedule mentioned.

And that where any principal sum of money secured or contracted for by, or which may be come due or payable upon, any Bond, Debenture, Policy of Insurance, Covenant or Contract, shall be settled or agreed to be settled, or such Bond, Debenture, Policy, Covenant or Contract shall be settled or assigned or transferred by way of settlement, or shall be agreed so to be, then and in any of such cases the same shall be deemed to be a Settlement of such principal sum of money, and shall be chargeable with the said ad valorem Stamp Duties on the amount thereof accordingly.

And that where the subject of any Settlement chargeable with the said Duties shall be any share or shares in any such Stocks or Funds as afore said, or any sum or sums of money secured by any Foreign or Colonial Bond, Debenture, or other security, bearing a marketable value in the English Market, then the value of such share or shares, and of such Bond, Debenture, or other security respectively shall be ascertained and determined by the average selling price thereof on the day or on either of the ten days preceding the day of the date of the Deed or Instrument of Settlement; or if no sale shall have taken place within such ten days, then according to the average selling price thereof on the day of the last preceding sale, and the said ad valorem. Duties shall be chargeable on such Settlement in respect of the value so ascertained and determined; and the value of any sum or sums of money expressed in coin of a Foreign or Colonial denomination or currency, shall be determined by the current rate of exchange on the day of the date of the Deed or Instrument of Settlement, and the said ad valorem Duties shall be charge able in respect of the value so determined as last aforesaid.

13. Excise Duties on Occasional Licences to Refreshment House Keepers, Wine Retailers, Beer Retailers, and Tobacco Dealers —
That, towards raising the Supply granted to Her Majesty, there shall be charged and paid the following Duties of Excise for and upon the Occasional Licences hereinafter mentioned (that is to say):
For and upon every Occasional Licence to the Keeper of a Refreshment House, for each and every day for which such Licence shall be granted	Nil.
For and upon every Occasional Licence to retail Foreign Wine to be consumed at the place where sold, for each and every day for which the same shall be granted	£0	1	0
For and upon every Occasional Licence to retail Beer to be consumed at the place where sold, for each and every day for which the same shall be granted	0	1	0
For and upon every Occasional Licence to deal in or sell Tobacco or Snuff, for each and every day for which the same shall be granted	0	0	4
14. Inland Revenue Laws Amendment —
That it is expedient to amend the Law relating to the Inland Revenue.

MR CRAWFORD

said, he should not presume to add anything in the shape of criticism upon the comprehensive speech they had just heard from the Chancellor of the Exchequer. He thought the statement of the right hon. Gentleman would be received throughout the country with great satisfaction, and he thought that, on the whole, the mode in which the Chancellor of the Exchequer had dealt with the surplus would be viewed with approval. With respect to the mode in which the right hon. Gentleman proposed to deal with the sugar duties, he thought he would find very many Members—at any rate on that side of the House—who would be disposed to think, with him, that the mode in which the duty was proposed to be dealt with was unsatisfactory. If no other hon. Member would take up the matter, he should be prepared to state on a future occasion his views for a settlement of the sugar question at variance from those of the right hon. Gentleman.

MR. CAVE

said, he should not have risen but for the observations of the hon. Member for the City of London. He thought his hon. Friend a hold man to wish to re-introduce the subject of uniform duties to the House after the speech of the Chancellor, and the luminous pamphlet of Professor Leone Levi, which had been distributed to Members; and he begged to assure the hon. Gentleman that when the subject again came on for discussion he (Mr. Cave) and those who thought with him upon it would be ready to meet him. With regard to the proposed alteration of the tea licences, he reminded the Chancellor of the Exchequer that the borough which he (Mr. Cave) represented, though it was called a parliamentary borough, was as large as the county of Rutland, and remote villages within its boundary were as much country places as any that were to be found in England. There were other boroughs of similar nature. He hoped, therefore, that the Chancellor of the Exchequer would take the matter again into his consideration, and introduce some other definition of those small traders who were to benefit by the reduction of the license duty.

MR. HUBBARD

said, he was sorry to have to make any remarks that might appear an exception to the general feeling of satisfaction with which the statement of the right hon. Gentleman had been received; but he could not help expressing his extreme regret that, after the expression of the opinion of the House on the question of the Fire Insurance duties, the right hon. Gentleman should have minimised his proposals by limiting his alteration to the duty on stock-in-trade only. He (Mr. Hubbard) thought that the distinction the right hon. Gentleman had made between stock-in-trade and other property was wholly untenable. Fire Insurance was the most uncertain and in-discriminating in its operation, and it was a tax not only on the property of the rich but on those who could not afford to run the risk of fire. He must express his extreme disappointment at the suggestion, and he felt certain the House would not be satisfied with it.

SIR JAMES FERGUSSON

begged to ask the right hon. Gentleman for further information upon one point respecting the Income Tax. The right hon. Gentleman had referred to the prospect of a new assessment under schedules A and B of the Income Tax in the present year, but he had not stated to the House what was the increase of revenue upon which he reckoned from that source. Judging from the experience of the past, a very large increase was to be expected from that operation; and if the increase on the present re-assessment equalled that realized on former occasions, and corresponded with the advancing prosperity to which the right hon. Gentleman had himself referred, it would probably tend to increase his surplus considerably beyond the sum he had stated of £238,000, and he would not be entitled to point afterwards to such an enhanced source of revenue unless he now should explain to the Committee the amount he calculated to gain from it.

MR WHITE

said, he shared but partially in the satisfaction with which the Committee generally had heard the able and lucid statement of the Chancellor of the Exchequer. The apparently paradoxical task which the right hon. Gentleman had set himself—namely, to take nothing from the rich, and yet to give a good deal to the poor, was one that had already to a great, extent been performed; and indeed no Government could solve a nobler problem. The policy of the last twenty years, while it had made the rich richer, had left the poor less poor, The right hon. Gentleman had referred to the marvellous results of that policy—a policy which had raised the combined imports and exports of the country from £172,000,000 to the prodigious sum of £440,000,000 a year. He trusted that these results would encourage him to persevere in the same course and courageously to insist upon applying the same free trade principles to land and to labour. When that was done the spectacle which this country would present was one that might well challenge the admiration and the envy of the world. He should have been glad if the right hon. Gentleman had stated how much of the public revenue was contributed by the working classes. It had been calculated from the actual receipts at co-operative stores, that an artisan with a wife and three children, who was earning £50 or £60 a year, contributed to the public burdens at the rate of 20 per cent upon his wages. At Chester the right hon. Gentleman had observed that each man's share of taxation might be fairly stated at an eighth of his income; and if that was the case the labouring classes were palpably aggrieved, seeing that they pay not an eighth but a fifth. He could not think that the country was in a satisfactory state when a million of its inhabitants—or one in thirty of its gross population — were paupers, one-fifth of those paupers being able-bodied persons, and three or four millions more being on the verge of pauperism. He would have much preferred a reduction in the duties on some articles which were more closely connected with the comfort, and indeed the healthful existence, of the working classes, to the alteration which the right hon. Gentleman proposed to make upon the Income Tax. He believed the amount of taxation imposed upon the poorer classes to be grossly inequitable. The right hon. Gentleman would pardon him for saying that the proposal to reduce the Income Tax was not out of place in the quarter from which it proceeded, as it was only appropriate that the burden should be lightened by the same hand which had been instrumental in augmenting it. When the right hon. Gentleman came into office, the taxation per head throughout the country was 39s. 6d., while it had now increased to 45s. Nor was that all. In 1853, what had been called the optional expenditure of the country was 15s. per head per annum. It now amounted to 26s. 8d., showing an increase of 80 per cent, or more than double the increment of the national wealth which had occurred during the same period. While he believed that with our present limited system of representation the Chancellor of the Exchequer could not do more than he had done, still he must record his opinion that it was not as much as the country was entitled to, nor as the right hon. Gentleman himself would gladly have attempted if he had found himself under more favourable circumstances.

MR. DUNLOP

rose, as the representative of a constituency largely engaged in the sugar trade, to say that he thought the right hon. Gentleman had adhered to the right principle in dealing with the sugar duties; and he applauded the right hon. Gentleman for having stripped off the pretended disguise of free trade which had covered a system of bounty and premium, whereby the Colonies had obtained advantages which they never would have had if there had been no duty at all. He thought that when the admirable speech which they had just heard had gone over the land, it would produce such an impression that the hon. Member for the City of London (Mr. Crawford) would find little encouragement to proceed with the Motion which he had just threatened. He hoped, however, that the right hon. Gentleman would defer bringing the proposed changes into operation than a longer period of four weeks.

MR. WHITESIDE

said, he was disappointed with that part of the financial statement which dealt with the Spirit duties—a question in which Ireland was deeply interested. In 1860 the Chancellor of the Exchequer commenced his unfortunate policy of raising the duties upon spirits. The right hon. Member for Buckinghamshire (Mr. Disraeli) had equalized them, leaving them where the most eminent persons connected with the trade in Ireland thought they ought to be left. But the Chancellor of the Exchequer wanted to pay the expenses of a war in China, and so he increased the spirit duties by 1s. 11d. a gallon, indulging in an anticipation which, like some others, had not been verified—namely, that after making all deductions he thought he might reckon upon an additional million. All the arguments used by the right hon. Gentleman on that occasion were, in his opinion, fallacious. One of these arguments was, that the duties had been several times raised advantageously; but if a duty were raised four or five times, that rather furnished an argument against any further increase. Then the right hon. Gentleman said he was quite sure that illicit distillation would not be likely to take place in Ireland, because the duty of protecting the revenue was to be transferred from the Excise to the constabulary. In the following year, however—1861— he was obliged to make this statement — The Committee will be anxious to hear what is to be said with regard to the spirit duties. We anticipated an increase in the Revenue from the duty imposed in July last on British spirits of £650,000, whereas there has been altogether a diminution in the actual yield of the spirit duty, as compared with the Estimate, of no less than £910,000, or £250,000 more than the whole increase at which we aimed." [3 Hansard, clxii. 560.] That certainly, as the right hon. Gentleman added at the time, was "an astounding diminution." But, in 1862, the right hon. Gentleman gave a better account of the matter—not that he had much to boast of, because the produce of the duty was still considerably less than his Estimate, In 1860–1 he got £2,269,000 from Ireland; in the following year he got only £2,461,000. The argument ordinarily used by the right hon. Gentleman was, that by diminishing a duty you increased the consumption; but in this case he increased the duty and diminished the consumption. Under those circumstances, he would have done wisely if he had given some relief. In 1863 his Estimate was £10,000,000 for the spirit duties; his receipts were only £9,394,000, being a deficiency compared with his Estimate of upwards of £600,000. He explained the deficiency by a reference to the condition of the lower classes, owing to the failure of the cotton supply, and drew a picture of Ireland admirable for its truthfulness. Yet, on the present occasion, when the circumstances of Ireland were as bad, if not worse, he had not said one word upon that important subject—or, at all events, very little to the point, and he had suggested no measure of relief. In the debate on emigration at the beginning of the Session, the facts were denied by the Chief Secretary for Ireland in his usual argumentative manner, and likewise by the Attorney General, who invented for the occasion a poetic Ireland. Had the right hon. Gentleman looked into the facts to see if the increase in the duty on spirits might not have had something to do with the present state of things? On proposing to raise the spirit duties, the Chancellor of the Exchequer, as already stated, felt quite satisfied that there would be no increase of illicit distillation. There never was a time when illicit distillation was more rife in Ireland than it was at the present moment, in consequence of the excessive duty put upon the article by the Chancellor of the Exchequer. In one town in Donegal there were recently no fewer than thirty-one persons in gaol for offences against the Revenue, and the Judge of assize adverted in his charge to the difficulty of repressing crime in that county, owing to the amount of illicit distillation which prevailed. The anticipation of the Chancellor of the Exchequer had not been realized, and upon his own reasoning, he ought to reduce the duty to what it was in 1858. It was quite true, as the right hon. Gentleman had said to-night, that very little of the good article which the Irish distillers manufactured was sold in a pure state by the retailers and small dealers. That was on account of the excessive duty. The dealers first watered the spirit, they then put treacle in it, they then strengthened it with vitriol, and an eminent distiller had informed him it was going to be called "Gladstone's Cordial." Such stuff must be very unpleasant to swallow, and it might be said that the only effect of the increase of duty had been to endanger the health of Her Majesty's subjects. But there was still a point in morals remaining. When the learned Judge to whom he had referred asked the grand jury whether they could assist in repressing crimes against the revenue, the answer he received was, that it was quite impossible while the high duty remained on spirits. Those who were acquainted with Ireland—unfortunately there were none such in the Government—knew that wherever there was an illicit still there was Ribandism. The persons engaged in that confederacy liked the neighbourhood of a private still. It united and stimulated them, and it brought them together to conspire against the very existence of society. There was thus a combination of reasons why the right hon. Gentleman should reduce the spirit duties. A large distiller in Cork, who had sent statistics to the right hon. Gentleman, stated that his legislation had caused a decrease of 18 per cent in the home consumption of Ireland. The quantity distilled in Ireland from 1859 to 1861 was reduced by nearly one-half. The colonial distiller had not gained much, but the foreigner had. Again, between 1863 and 1859 there was a falling off of 19 per cent in the quantity of spirits retained for home consumption; while there was, on the other hand, an increase of 47 per cent in the quantity of brandy imported from France. Supposing the right hon. Gentleman himself were a large distiller who had embarked some £80,000 or £100,000 in establishing a spirit manufactory with an expensive machinery and a large staff, from which he had been accustomed to derive an excellent income—what would he say to receiving, as had actually happened, from his cashier at the end of one twelvemonth the nominal sum of £50, instead of several thousands a year, and at the end of another twelvemonth, perhaps, an account showing a balance on the wrong side? The mischief and injustice done by first inducing men to invest their skill and capital in any branch of business under a particular state of law, and then by entirely changing the basis of that law, could scarcely be exaggerated. The distillers of Ireland and Scotland had in that way suffered grievous hardship. Hitherto the brewers had escaped, but perhaps the sword of Damocles would yet be suspended over their heads, and they might hereafter have to complain, as the distillers did now, that a great injustice had been done them. He would not ask for any exclusive advantage for Ireland, but he believed that what was stated in the leading journal that morning was strictly true—namely, that the people were flying from that country in masses, and its consuming power was consequently in that sense diminishing. If the spirit duty were reduced to what it was in 1858 it would be a great benefit to an important manufacturing industry in both Ireland and Scotland, and also a boon to the agricultural interest who used the grain for feeding their cattle in the winter, and whose supply had been reduced. As the right hon. Gentleman's experiment on this matter had failed, he ought, in candour, to admit his mistake, and endeavour to retrace his steps—a course which would give an impulse to trade without in the end impairing the public revenue.

MR. MORRITT

said, he had been asked by hon. Members whether, after the Chancellor of the Exchequer's statement, he meant to go on with his promised Motion relating to the Malt tax. It was certainly his full intention to persevere with that Motion. He did not think the right hon. Gentleman's assertion, that a reduction of the duty on malt would benefit England far more than Ireland or Scotland, was a sufficient argument against the adoption of such a measure. He did not see that that fact, if fact it were, should induce him to lessen his efforts towards England. He should be glad to take the advice which had been tendered, but he could not; and so it was his full intention to carry on his Motion, and he hoped to show that he was proposing that which was right, and that he was acting from no political feeling or party purpose, or from any private feeling; and, above all, it had nothing to do with elections or political capital in his own county. He had never, and should never, use matters of that kind for any such purpose. He simply should propose the Motion because he thought it a right and just thing to do.

MR. KINNAIRD

hoped that the Chancellor of the Exchequer would not yield to the appeal made to him by the right hon. Member for Dublin University (Mr. Whiteside), in favour of a reduction of the duty on spirits. High moral considerations were involved in that subject, and if there was any part of the Chancellor of the Exchequer's policy which had been especially beneficial to the country, it was his mode of deriving a large revenue from a branch of trade which, instead of being stimulated, ought rather to be subjected to some degree of restraint.

LORD CLAUD HAMILTON

confirmed the statement of his right hon. Friend (Mr. Whiteside). The learned Judge to whom his right hon. Friend referred, took a different view from the last speaker, for the whole effect of his charge was that the demoralization throughout the whole population was caused through temptation given to illicit distillation. In the recent bad harvests, the corn not being in a state to be brought to market, the rural population had been tempted to use it for the manufacture of a valuable article of commerce. The Judge stated that this should not be viewed as a fiscal question, and he invited magistrates and others to consider it as a moral question; for not only were the persons having an illicit still breaking the law, but they made the whole of their neighbours particeps criminis by bribing thorn to keep the secret and give warning on the approach of the police. He (Lord Claud Hamilton) maintained that a reduction of the present high duty on spirits was imperatively demanded in the interests of public morality, to which all fiscal considerations were matters of minor importance.

MR. NORRIS

wished to throw out a hint for the consideration of the right hon, Gentleman in relation to licenses. Under the 9 Geo. III. c. 61, magistrates gave their approval for licenses to certain houses to sell beer, and through the medium of the excise the beer license so obtained was, or at least had been, the key to the obtaining of a license for the sale of spirits and beer. Subsequently to the passing of that act, the 1 Will IV. c. 64, called the Beer Act, came into operation. That Act imposed a payment of 60s., and 5 per cent, for a beer license, while under the old Act of George III. the charge was £1 2s. 6d, The result was that in half the borough towns of England there were some persons who paid 63s. for their license, whilst there were others living in the very same street who paid only £1 2s. 6d. This was so unequal and unjust, that he thought it demanded the consideration of the right hon. Gentleman. The right hon. Gentleman had referred to the various joint stock companies which have been recently called into existence, and hon. Members were aware that Lords and Members of the Lower House were advertised as directors of many of those joint stock companies, Among these were hotel companies on a gigantic scale. If one of these companies erected a magnificent edifice for the purpose, or with the effect, of absorbing eight or ten of the ordinary taverns, he thought a larger amount of license might fairly be demanded of it than was paid by the ordinary road-side taverns. One of these great hotels would absorb the custom of twelve or thirteen respectable hotels, or drive them out of the field, and it would be only fair to see whether they might not be made more largely available than at present for fiscal purposes. If in the case of sugar it was right that the unmanufactured article should come into the country at a lower rate than the manufactured, would it not be well by means of some arrangement with foreign countries to enable our manufacturers of paper to obtain the raw material of their industry un-taxed? On one point the right hon. Gentleman had been misinformed. He stated that the import of rags during the past year was far larger than the import of rags had been during any previous year, and he appeared to think that all these rags were intended for the manufacture of paper, The right hon. Gentleman had quoted from the Board of Trade Returns the number of tons of rags imported last year; but probably he was not aware that within the last eighteen months, owing to the dearth of cotton material, the manufacturers of Lancashire and Yorkshire had been driven to import the refuse of the woollen clothing of France, Belgium, and Italy, in order to remanufacture it into articles of clothing, and not for papermaking purposes. These importations had appeared in the Board of Trade Returns as importations of rags, and the right hon. Gentleman had supposed that the papermakers had the benefit of them. He begged to congratulate the right hon. Gentleman on the excellent Budget which he had produced, and which would add to his popularity, and be acceptable both to the House and the country.

MR. M'MAHON

said, he joined the right hon. Gentleman the Member for the University of Dublin (Mr. Whiteside) and the noble Lord the Member for Tyrone (Lord Claud Hamilton) in their expression of regret that the spirit duties had not been reduced. He spoke not in the interest of the distillers, nor on moral grounds, but in the interest of tillage only. In the county which he represented, perhaps more barley and oats were grown than in any other county in Ireland. These kinds of grain were formerly largely used for the purposes of distillation; but the excessively high duties imposed on spirits by the Chancellor of the Exchequer had reduced the cultivation of both barley and oats, and thrown the land out of tillage and the people out of employment. The result was emigration, or a condition of destitution and discontent at home. The right hon. Gentleman was going to reduce the sugar duties, but he ought to take into consideration the case of agriculturists at home. Since 1843 the policy of our legislation had been to impose excise duties on home manufactures equivalent to the customs duties on imported sugars, the consequence of which was that the production of beetroot sugar in Ireland had been entirely annihilated. The foreign manufacturer, for instance, might make 1,000 cwt. of sugar, of which he might sell 900 cwt. untaxed anywhere he pleased, and he might bring only a tenth of the whole manufacture into the London market; but the Irish manufacturer would be exposed to the constant supervision of the Excise, and would have to pay on every pound that he manufactured. How, then, could the Irish compete with the Cuban manufacturer? The right hon. Gentleman had done much to promote freedom of trade; he (Mr. M'Mahon) thought that free tillage was of greater importance to society than freedom of exchange. During the last twenty years the efforts of Parliament had been directed to the removal of restrictions on the interchange of commodities, while not a burden had been removed from tillage. All that the farmer could do at present was to let grass grow on his farm. If he grew barley and oats, and attempted to convert the grain into spirits, he was met by the exciseman; if he grew beetroot, and attempted to convert it into sugar, he was also met by the exciseman. The growth of tobacco was altogether prohibited. In the county which he represented £60 or £70 per acre was formerly made by the growth of tobacco. If free trade was of such importance, why was it not extended to tillage? Why should not the farmer grow tobacco, make beetroot sugar, and distil spirits from grain? In other words, why should not the farmer be as free with the produce of his land as the potter with his clay?

MR. BENTINCK

said, that while, in common with every Member of the Committee, he had listened with pleasure to the eloquent statements of the Chancellor of the Exchequer, he need hardly remind the Committee that what contributed to their pleasure was the studied manner in which all that right hon. Gentleman's speeches were prepared. Every word which he addressed to the Committee was intended to convey its special meaning, and in some instances its special sting. He could not, therefore, forbear remarking on the tone with which the right hon. Gentleman had referred to protection. The right hon. Gentleman thought proper to speak of the subject of protection probably for the purpose of eliciting a cheer from hon. Members below the gangway on his own side of the House; he had thought proper—not to imply—but to assert that there was something amounting to a stigma in the very word, and that it was one of those questions now supposed to be scouted in every part of the world. He (Mr Bentinck) objected to the tone in which the right hon. Gentleman thought proper to deliver himself upon that subject. Now, while he was prepared to admit that disrepute ought to attach and did attach to those who, for personal and sordid motives, had raised the question in this country, and whose political conversion on the subject was so sudden that doubts were entertained as to their sincerity, he was not prepared to admit that those who under all circumstances adhered to their opinions were to be attacked in the manner in which the right hon. Gentleman thought proper to attack them. Now, what had free trade done? It had half ruined Ireland. ["No, no!"] Hon. Members might say no; but he would undertake to say, that if that country were polled, nine out of every ten would attribute the ruin of Ireland to free trade. With all his political legerdemain the right hon. Gentleman had never been able to prove, except on the old principle of post hoc ergo propter hoc, that protection had done any good to England, and when the right hon. Gentleman wished to raise the question he must do more than assert that such was the consequence of the figures he quoted. It did not surprise him that the right hon. Gentleman had not shown any inclination to take into account the agricultural interest. It was not his wont so to do, but he touched upon the question of the repeal of the malt duty. He (Mr. Bentinck) admitted that it was difficult to decide how far this duty affected various soils; but though the lands which grew the finest kinds of barley might not derive any benefit from its remission, the lands which grew an inferior kind would surely obtain an enormous advantage. The question was not to be so easily shelved as the right hon. Gentleman supposed. He (Mr. Bentinck) could not but be surprised with what the right hon. Gentleman called his strong arguments against dealing in any way with the malt duty. He said the repeal would only benefit England, while Scotland and Ireland would hardly receive any advantage from it; while those countries would have share in the taxes which would have to be substituted. What was this but an admission that England had been bearing a much larger share of taxation than she ought to bear, and he (Mr. Bentinck) hoped that this admission would enlist the sympathies of English Members when the question came on for discussion. With regard to the income tax he was glad to find the right hon. Gentleman returning to the views of some years ago, in favour of a great diminution, if not the entire abolition, of that tax. He only hoped this might be taken as a prelude to the right hon. Gentleman's return to his former opinions on other subjects, which those on that (the Opposition) side of the House would all hail with delight. The right hon. Gentleman had thought proper to introduce the question of the paper duty. With all his talents as a financier and his great skill in debate, he could not help thinking that the Chancellor of the Exchequer would have done much better if he had left that subject alone. In the minds of the great majority of the nation the repeal of the duty on paper was one of the most unfortunate measures to be found in the financial history of this country, and, if any proof were wanting respecting the impolicy of that remission, it would be found in the daily account of the state of the paper manufacturers. The duty was an increasing one, and the right hon. Gentleman should not forget that no one was interested in the repeal unless it was a few persons who had investments in penny papers, and who brought a strong pressure to bear on a weak Government. He (Mr. Bentinck) trusted that the first act of a strong patriotic Government would be to reimpose the duty on paper.

MR. CHILDERS

thought the hon. Gentleman (Mr. Bentinck), who complained of the tone of his right hon. Friend with regard to protection, was hardly justified in saying, almost in the same breath, that those who advocated free trade were actuated by sordid and personal motives. He did not rise, however, to answer the hon. Gentleman, but to express the feeling which actuated so many Members as to the satisfactory character of the Budget, taking it as a whole. He thought the reduction of the income tax from 7d. to 6d. in the pound would give satisfaction, and he trusted they might expect its reduction to 5d, next year. He however inclined to believe the Chancellor of the Exchequer had over-estimated the amount of loss on sugar. He also felt doubtful whether, if they were to abide by the classified system of sugar duty, the proposal now made was altogether in the right direction. It was more logical than the existing scale, and on the whole in accordance with the Resolutions of the Committee two years ago; but he could not but think that, before long, the graduated scale would have to be abandoned. He thought that the reduction of Fire Insurance was not exactly that which would be the most satisfactory. The restriction of the reduction to a part only of the duties—those payable on insurances of stock-in-trade—would be disappointing to the country, and he feared that this second exemption would tend to perpetuate the high rate on house and other property. It would have been better if the right hon. Gentleman had proposed to reduce the whole duty by 6d. this year, and a prospective 6d. in following years. The loss to the revenue would not, in that case, have been more than £50,000 in excess of the right hon. Gentleman's calculations. He would suggest that, as the Chancellor of the Exchequer proposed to continue the malt duty at its normal figure, he should take off the excrescence of an additional 5 per cent, which had been removed from almost every other excisable and customable article. That reduction of 5 per cent would be a decided relief, and would be recovered in two or three years. He could assure his hon. Friend the Member for Abingdon (Mr. Norris), that the Chancellor of the Exchequer had correctly stated the figures relative to the importation of rags, and that he had not included the woollen rags that were not used for paper. He was informed that persons who, two or three years ago, excited by statements of the cheapness of foreign paper, went through the foreign markets, were now so satisfied of their mistake that they had come hack to the English market, and were now buying nothing but English paper. The Return for which he had moved, relative to the export of paper to our Colonies, would show this conclusively. Reserving the details of the proposal with regard to sugar for further consideration, he thought that the Chancellor of the Exchequer's present Budget would add considerably to his character and reputation.

MR. HENLEY

said, he had no wish to remark upon the general character of the Budget, which would come before the House on a future occasion; but he wished to advert to the arguments of the Chancellor of the Exchequer in regard to the impossibility, according to his reasoning, of any increase in the consumption of malt if the duty were reduced. The right hon. Gentleman founded this argument on the fact, that thirty-five years ago the beer duty was taken off, and that during those thirty-five years the malt duty had not recovered what the malt and beer duty together then produced. He could not say that the right hon. Gentleman had misunderstood the question, but he had certainly misrepresented it. What was the real state of the case? The parties most anxious to have a reduction of the malt duty were not those who grew the highest qualities of barley, and unquestionably not the brewers, but those who did not wish to drive all the poor of this country to the beerhouses, as had been done by recent legislation. Those persons believed that a great deal of barley, which would not bear the high duty, would be malted, and that the cottager would thus be enabled to brew his own beer and share it with his family, instead of being driven to a beerhouse, where he certainly did not improve his morals. He could not see, therefore, how the reduction of the beer duty bore on this question. It had comparatively nothing to do with it, because the complaint was that the malt duty shut out those who would grow the lower qualities of barley, which would make a wholesome beverage at a moderate duty. The malt duty was mainly a consumer's question, but to those to whom it was both a consumer's and a producer's question, it was unsatisfactory to be told that it was mixed up with the old beer duty. When he heard the Chancellor of the Exchequer speculating upon a reduction of the duty on sugar being followed by an increase of consumption, he did not see why a reduction in the malt duty should not lead to a corresponding increase in the consumption of malt. There would certainly be an increased growth of the inferior qualities of barley with a moderate duty.

MR. MAGUIRE

regretted to find that Ireland was but little favoured by the plan of the Chancellor of the Exchequer. The right hon. Gentleman had represented that the alarm which existed last year among those who were engaged in the manufacture of tobacco in Ireland was an unreasonable alarm, and took credit to himself for the success of the changes he then introduced; but he forgot to mention that it was the very alarm which was excited and the pressure which it induced that led to the measure turning out a successful experiment, instead of a measure of ruin and confiscation, as it would otherwise have been. Coming to the subject of spirits, he must say for himself that he did not wish to encourage in any way the consumption of ardent spirits; but if people were to drink them at all they should be enabled to have pure ardent spirits, and not poison. He had been informed that to such an extent was adulteration practised in Ireland, that it was positively dangerous to drink, stuff that was sold in the public-houses of that country. If the right hon. Gentleman made inquiries he would find that lunacy was on the increase in Ireland, mainly attributable to the poisonous quality of the spirits which the high duty had compelled the poorer people to drink. The right hon. Gentleman had almost given a pledge that the advanced duty would not increase illicit distillation; but the hon. Members for Dublin University and Tyrone County had shown, what the Attorney General for Ireland could confirm, that illicit distillation was greatly on the increase—and no wonder when the duty was so enormous. There could be no greater cause of crime and demoralization than illicit distillation. The revenue had not been increased, the trade had been almost destroyed, and a poisonous beverage had been substituted for a less injurious article. It might be too late now to make any change this year, but it was to be hoped that early next Session the right hon. Gentleman would deal efficiently with this subject, or what was, unhappily, almost the only branch of industry remaining to Ireland would be annihilated. With respect to the paper trade, he did not agree with the hon. Member for West Norfolk (Mr. Bentinck), because he believed the repeal of the paper duty had been a wise and beneficial measure, which had resulted in a wider diffusion, not only of political information, but also of general literature. He therefore congratulated the Chancellor of the Exchequer upon the success of that measure; but what he blamed the right hon. Gentleman for was that he had sacrificed the paper trade of his own country to the paper trade of foreign countries. It was a wise step to remove the Excise duty on paper manufactured in this country, so far having free trade; but having it in his power to retain the Customs duty of 1d. until foreign Governments reduced their export duties upon rags, the right hon. Gentleman had rashly and madly sacrificed that screw, and thus enabled the foreign manufacturer to obtain an advantage of 15 or 16 per cent over the papermakers of England, Scotland, and Ireland. He knew nothing of the imaginary case which the right hon. Gentleman had introduced with so much delicacy, and abstaining to give the name, but stating that the gentleman would give the facts in confidence to any one who desired to know them. But he would like to know the gentleman's name, in order that the paper manufacturers of this country might be able to examine his facts. If that gentleman had succeeded in reducing the cost of production by 50 or 60 per cent, he was indeed a wonderful man. The right hon. Gentleman had told them that he expected the French Government would reduce the export duty upon rags, and he rejoiced to hear it; but would that example be followed by the Belgian and German Governments? He could not understand that it was free trade for Englishmen to give up all to the foreigner and to receive nothing from him. Whether it were free trade or not, it certainly was not wise or patriotic in a Minister of this country to play into the hands of the foreigner to the destruction of a native industry. The right hon. Gentleman ought to persevere in his efforts to induce foreign Governments to act reciprocally. He hoped, therefore, that next year the Chancellor of the Exchequer would give due consideration to the case of Irish spirits and to the claims of the papermakers to equal justice with the foreign manufacturer.

MR. BASS

, referring to the Chancellor of the Exchequer's statements respecting the malt tax, said, he thought the right hon. Gentleman had rather understated at £3,000,000 what would be the first loss at a reduction of the tax. The present revenue from malt being £6,200,000, one-half would be rather more than £3,000,000, to which must be added the return of duty paid upon stock in hand, which would be at least a million and a half more. The Chancellor of the Exchequer had, however, wholly ignored the elasticity of the tax, to use a term of his own. The right hon. Gentleman the Member for Oxfordshire (Mr. Henley) had clearly shown that the Chancellor of the Exchequer had overlooked some very important considerations in relation to the beer tax, which was removed in 1830. It was not probable that brewing by individuals would be carried to any great extent except in rural districts. With regard to the recuperative power of the malt tax, it had been shown during the Russian war that a high additional rate of duty did not by any means produce a corresponding increase in the amount of revenue, while a reduction of duty was not followed by anything like a corresponding loss of revenue. At that time—in 1854—an additional duty of 2s. a bushel, or nearly 75 per cent, was imposed on malt, and the increase of revenue was only 21 per cent. In 1856 the war duty was taken off, and the result was an increase of more than double that percentage. The right hon. Gentleman had laid great stress on the result of a reduction of the malt duty, as it would affect Ireland. Now, the fact was that the malt duty was so excessive that they could not in Ireland afford to drink beer. The natural energy of their character did not require that the Irish should drink whisky, and if the malt duty were reduced they would probably drink the more lethargic beverage, to which we were accustomed in this country. It appeared from the right hon. Gentleman's speech, that in the consumption of French wine there had been an increase amounting to 300 per cent. Could any body doubt that if the malt duty were adequately reduced, the consumption of good, sound beer would show as large an increase? Considering how largely the consumption of every article had increased on the reduction of the duty on it, he could not see how, with justice, the malt duty could be retained on its present scale. The brewers were quite content with things as they were. Their policy as brewers was quieta non movere. They made a living and were satisfied. Those who insisted that brewers would benefit from a reduction in the malt tax were, in his opinion, quite mistaken; for if the trade were asked whether they would prefer the reduction or an additional duty of 10s., he believed they would prefer the latter.

MR. MALINS

said, that whilst one part of the Budget had given him entire satisfaction, he must say that he was much disappointed with another part of it. The part with which he was thoroughly satisfied was the proposal for the reduction of the Income Tax, because, though the present proposal was the reduction of a penny only, it was an earnest of an intention gradually to annihilate a tax, which seemed to him on every principle objectionable. But as to the Fire Insurance duty, he thought that the proposal was as unsatisfactory a one as could possibly be made. The right hon. Gentleman, in the face of two Resolutions of the House that the duty on Fire Insurance generally should be reduced, had proposed that it should be partially and most unfairly reduced. In April, 1862, the House, by a majority of 11, gave the hon. Member for Dudley (Mr. Sheridan) leave to introduce a Bill for the reduction of Fire Insurance duty, and in July last a majority of 36 affirmed that the duty ought to be reduced. The meaning was, that it should be reduced generally. But the proposal of the right hon. Gentleman was, that the duty should be reduced, not on furniture, houses, and buildings, but only with respect to stock-in-trade. If the right hon. Gentleman could only part with £200,000 of revenue, he should still have applied it to a general, and not a partial reduction of the duty. Indeed, one part of the right hon. Gentleman's own speech condemned the course he proposed to take, for he said that he had always thought that the reduction of duty upon agricultural property was unfair because it was partial. In face of this he proposed to take off the duty in reference to stock-in-trade only. A great trader, who had £100,000 of stock-in-trade would have to pay a duty of 1s. 6d. only, whilst his next-door neighbour, who had no stock, would have to pay 3s. duty on the insurance of his furniture. He (Mr. Malins) himself would, for instance, have to pay the full amount of 3s. duty upon the insurance on his furniture and books. [Mr. WHITESIDE: Your law library would be stock-in-trade.] He did not know how that might be, but clearly his furniture in his private house would not come under that category. The right hon. Gentleman had taken off the paper duty, and the paper trade was well nigh ruined, because he said the House had decided twice against the duty; but the House had, in general terms, voted the same as to Fire Insurance duty, and yet the right hon. Gentleman proposed not a general, but a partial reduction in it. The class of persons the right hon. Gentleman proposed to benefit was the class least requiring relief. It was the non-trader, bound to insure his property under covenant, who ought to receive consideration. He was sorry that in a Budget, the general principles of which he considered satisfactory, and to the tone of the observations introducing which he assented, a proposal with respect to Fire Insurance should be inserted benefiting not the bulk but only a small portion of the community.

SIR FRANCIS GOLDSMID

said, that the Chancellor of the Exchequer had said that, by reducing the duty on Fire Insurance of stock-in-trade, he wished to try the recuperative force of a reduction in the duty on Fire Insurance. Now it appeared to him, that the experiment was about to be made in the direction from which there was the least chance of suc- cess. If a man was insuring his furniture, which generally he could do at the ordinary rate, it became a matter of importance to him whether he had to pay 1s. 6d. or 3s. duty; but to a man who had to pay a rate of perhaps 12s. or 13s. for insuring his stock-in-trade, it was almost a matter of indifference whether the duty was 1s. 6d. or 3s.

COLONEL SYKES

said, that having twice voted in favour of reducing the duty on Fire Insurances, he had certainly expected that any measure on the subject would have been general, and not partial. The present duty of 3s. was a barrier to insurance on the part of the occupiers of small houses; but if the duty were reduced to sixpence, the recuperative principle would have a chance of coming into operation.

MR. CAIRD

said, that that part of the Chancellor of the Exchequer's propositions, by which he stated that lentils and other articles of the same description would be placed in the same position as corn, would not be received with favour by agriculturists. Those articles did not come into competition with corn, but some of them were useful for the purposes of distillation in Ireland and Scotland, and hitherto the right hon. Gentleman had not done much in favour of that class of manufacturers. He trusted the right hon. Gentleman would reconsider the point.

THE CHANCELLOR OF THE EXCHEQUER

, said, that the proposal to which his hon. Friend (Mr. Caird) had just referred, was made at the suggestion of the trade; but it was a matter on which he thought it quite right that all parties should be heard. By passing the Resolution in Committee, the House would not be bound to the imposition of the duty, and there would be time for a further consideration of the subject before a Bill was brought in. The question was one with respect to which he was in no way prejudiced. He had to observe that the debate of that evening had been rather less of a conversational character, and rather wider in range than those which generally followed the Financial Statement of the Chancellor of the Exchequer; but he had no reason to complain of the tone of the discussion, which was very satisfactory to him. After having detained the Committee so long, while making his statement, he would only refer to one or two of the points which had been adverted to. He was sorry that the hon. Member for West Norfolk (Mr. Bentinck) should have supposed that anything which had fallen from him had been tittered in disrespect of those who had been the consistent champions of protection. It was the wish to relieve the dullness of a very dry subject which had induced him to refer to the-matter at all; but certainly he had not intended to cast any reflection, personally or otherwise, on the gentlemen who advocated the policy of protection. With regard to the duty on beer, while he was glad that the point referred to by the right hon. Gentleman the Member for Oxfordshire (Mr. Henley) had been brought under the consideration of the House, his own opinion was, that whether the malt duty was reduced or not, the capital and other advantages possessed by that class of manufacturers, of which his hon. Friend the Member for Derby (Mr. Bass) was commander-in-chief, must every day narrow the demand for private brewing. He did not, therefore, attach much weight to the argument; but he was glad that the right hon. Gentleman had brought it forward. His hon. Friend the Member for Derby said that the Irish did not drink beer, because of the heavy duty. He did not altogether understand the argument, and he did not think the Irish Members, to whose consideration he had submitted his argument, would derive much advantage from it. The hon. Member said, that if they would reduce the duty, the Irish would drink beer. He could not concur with his hon. Friend, seeing that the duty on beer was only 25 or 27 per cent, while the habitual drink of the Irishman was whisky, on which the duty was 400 per cent. He was bound also to say, with respect to the suggestion of the hon. Member for Pontefract (Mr. Childers), that if they could not effect a large reduction in the malt duty they should take off the 5 per cent which was imposed some time ago. The hon. Member said it was the only case in which that 5 per cent still remained. That, however, was not so. The 5 per cent additional duty was still levied upon tobacco and on some other articles. It was true that when they had dealt with the duty upon any article, they had endeavoured to get rid of that 5 per cent: but he objected altogether to taking off the 5 per cent upon malt. In his opinion, if they wanted to devise a plan, which would effect a minimum of good and a maximum of evil in taxation, it would be by taking off the 5 per cent on the duty on malt. He believed that the imposition of the 5 per cent was a hardship at the time, but that had long since righted itself. On the same ground he should object to the reduction of the duty on Fire Insurances by 6d. In his opinion, if the House of Commons could not go further than that it had much better leave the duty as it at present stood. The hon. and learned Member for Wallingford (Mr. Malins) said, that the Votes of the House on the subject of Fire Insurance, would not be satisfied by the proposal which he (the Chancellor of the Exchequer) had made. But he contended that those Votes would be far better satisfied by dealing effectively with one particular branch of the subject than by making a general reduction so small as to have no material operation in the way of extending insurance, and thus in no degree to replace the loss of revenue. Whether there was any force in the hon. and learned Gentleman's distinction between the tax upon property and the tax upon trade and industry, was a matter for the Committee to consider: but he trusted that they would not consent to any ineffective reduction such as had been suggested. An hon. Baronet opposite (Sir James Fergusson) complained that he had given a fallacious estimate of the Income Tax, and had not taken into account the re-assessment, which, in course of law, must take place in the present year. The hon. Baronet could scarcely have attended to the figures, which were very remarkable. Last year his estimate of the Income Tax for the year at 7d., with one quarter at 9d., was £8,600,000. This evening he had again submitted an estimate for the tax at 7d., but without the assistance of the quarter at 9d., and yet he had stated the probable result at the same amount—£8,600,000. The Committee would see, therefore, that he had allowed, and allowed liberally, for the re-assessment, which he agreed was likely to have a greater effect this year than on any previous occasion.

SIR JAMES FERGUSSON

I did not presume to say that the right hon. Gentleman had made a fallacious estimate. I asked him to state what he estimated would be the amount due to the re-assessment.

THE CHANCELLOR OF THE EXCHEQUER

said, it would be very difficult to distinguish between that portion of the tax which was likely to be due to the re assessment and that which would be the amount without the re-assessment. It was a matter of pure details. A rough estimate might, perhaps, be obtained by calculating the value of the penny tax as compared with that of last year. If, however, he could find any means of giving more detailed information which he thought worthy of being submitted to the House, it should be very much at the service of the hon. Baronet. As to illicit distillation, it was necessary to bear in mind that they had to deal not only with the three portions of the United Kingdom, but with foreign as well as with homemade spirits. There had been on the whole a considerable augmentation of the revenue from this source, though it was true that there had been no increase at all in Ireland. When the right hon. Gentleman opposite (Mr. Whiteside) recommended that we should reduce the duties on spirits in Ireland, with a hope of recovering revenue by increased consumption, he forgot that that was a principle on which Parliament had never acted with reference to spirits. Unless it could be shown that the revenue was failing through illicit distillation, the argument that decreased duty would lead to increased consumption had never been held to be applicable. He had stated that there had been an increase of illicit distillation in Ireland; but the right hon. Gentleman must be perfectly aware that in Ireland every year when there was a large quantity of grain at a low price and in bad condition there was invariably an increase of illicit distillation. But he was prepared to show that that increase of illicit distillation had not been produced by the increased duties. When, in speaking of the paper duties, he had referred to the abolition of the export duty on rags by the French Government, he was under the impression that that export duty had been removed by the Italian Government, but not being certain of the fact he had not alluded to it. Since then he had referred to the papers, and had found that such was the case, and he hoped that the example would be followed by other Governments. The suggestion of the hon. Member for Shoreham (Mr. Cave) as to the licenses on the sale of tea should have his best attention. The right hon. Gentleman concluded by moving that the Chairman report Progress.

House resumed.

Committee report Progress; to sit again To-morrow.