WAYS AND MEANS.

HC Deb 06 August 1878 vol 242 cc1303-78

WAYS AND MEANS—considered in Committee.

(In the Committee.)

THE CHANCELLOR OF THE EXCHEQUER

I propose, Sir, to detain the Committee for as short a time as possible in the Statement I have to make. I think it would not be convenient that the House should, in the first instance, enter into anything in the nature of questions of policy, or discuss the reasons for the expenditure which has taken place. The Motions which will be made in Committee by my right hon. Friends the First Lord of the Admiralty and the Secretary of State for War will, of course, require explanation, and when those Votes are moved will be the natural time, as far as the Government are concerned, for stating the object of the proposals they make. But although I do not, of course, intend to deny that it may be perfectly right for Members of the Committee to raise questions of general policy, and challenge the expenditure which we have incurred, in Committee of Ways and Means, I think that, as far as I am concerned, it would be right that I should abstain from opening a discussion, and that I should simply state what the present financial position is, and what the financial proposals of the Government are. Well, I may remind the Committee that when I introduced the Budget, on the 4th of April, I found I had to provide for an estimated Expenditure of £81,020,000, exclusive of £2,750,000 of Exchequer Bonds, which were issued last year to meet the charge of the Vote of Credit, and which fall due in the course of the present financial year, and also exclusive of an unascertained amount of Supplementary Estimates, which I then stated to the Committee I hoped would not exceed £1,000,000 or £1,500,000. But I also stated that I was necessarily somewhat in the dark as to what that might be. To meet that charge, I provided, by the additional taxation that was proposed, and which the Committee accepted, for a Revenue of £83,230,000. That would leave a surplus for the ordinary expenditure—on the Estimates of the year— of £2,210,030; and if my estimate of the Supplementary Estimates, which I hoped would not exceed £1,000,000 or £1,500,000, had not been exceeded, I should be able to pay off the whole of the Supplementary Estimates, and have something like £700,000 left to be applied towards the reduction of Exchequer Bonds. That was the position in which we stood on the 4th of April. But since that time there has been, from causes which I need not trouble the Committee to go into now, a larger expenditure than was then contemplated, and we have now on the Table Supplementary Estimates which amount, in the whole, to £2,618,000; and, besides that, we took, some weeks ago, a sum of £748,000 in respect of the charges for bringing the Indian troops to Malta. The Supplementary Estimates are made up of a charge of £1,845,000 for Army Services; £678,000 for Navy Services; £75,000 for Civil Services; and a balance of nearly £20,000 for winding up the old Abyssinian account. Taking these Estimates and the£748,000 that was voted for bringing the Indian troops to Malta, we have, as additional expenditure incurred since the passing of the Budget in the beginning of April, a total of £3,366,895. Of course, it is obvious that if we deduct that sum from the sum of £2,210,000, we should be left with a balance against us. We should not only be without any balance to apply to the redemption of the Exchequer Bonds, but there would be a deficit of £1,156,000. That deficit is occasioned mainly, but not entirely, by the additional expenditure which has been incurred in what may be called the Vote of Credit Services. I think that is a convenient term to use, and that it will be perfectly understood. The Vote of Credit was for Services connected with the movement of troops, the preparation of stores, and so forth, in connection with the condition of affairs in Europe. There is also a sum of about £400,000 due to other causes, and of these causes the principal one is the charge for the Kaffir War, which stands at about £344,000. It is right, as I am speaking now in reference to our position in the year, that I should tell the Committee that I shall probably have to ask, before the end of the financial year, for a further sum in connection with this expenditure on account of the Kaffir War. There is a sum which belongs to the previous year which has not been perfectly ex- plained; but I believe it will amount to something less than £400,000. I put it at £400,000 for convenience, but that is an outside figure. That will raise the Supplementary Estimates to £3,767,000. If we add to them the unredeemed Exchequer Bonds issued last year, and which stand to be redeemed this year—amounting to £2,700,000—the total charge to be met is £6,517,000, against which there is a surplus of revenue of £2,210,000. That leaves a deficit upon the current year of £4,307,000. The same result is arrived at if we make the calculation in a different form. The expenditure, if we do not include the Exchequer Bonds, will be £84,786,000, and the revenue being £83,230,000, the deficit would be £1,556,000. If we include the Exchequer Bonds, the expenditure would be £87,536,000, and the revenue being £83,230,000, the deficit would be £4,306,000. That is the position in which we stand. I have stated the figures in a plain and simple way; and I have stated the case in what is, perhaps, the least favourable form for myself. I should like to be allowed to present it now in another light. It will be remembered that, in the month of February, the Government applied to Parliament for a Vote of Credit for £6,000,000. Well, that sum was granted; but the Vote expired on the 31st of March, and by that time there had been spent of it £3,500,000. Since that time we have spent on services similar to those for which the Vote of Credit was taken—on Vote of Credit Services, so to speak—a sum of £1,545,000 for Army Services, or, to speak more correctly, we have incurred expenditure to that amount. We have also expended £634,000 on Navy Services, and £748,000 upon the bringing of troops from India to Malta. That makes a total expenditure of £6,427,000 for the Services in contemplation, and which have reached a sum greater than that for which we originally asked, or a Vote of Credit, the Vote having been for £6,000,000. I think, however, the Committee will see that the original Vote has been very close to the amount which has actually been found chargeable against it. Of course, although we originally expected that the sum might be required, and we thought it right to ask for it, we entertained, at the same time, a hope that it would not be expended. ["Hear, hear!"] Hon. Gentlemen opposite cheer. No doubt, it was in our contemplation that the course of public events might be very different from what they proved to be. But things did not turn out as well as the more sanguine among us may have hoped; yet the sum asked for, and originally contemplated, and the sum we have actually found ourselves called upon to meet, are not very widely apart. £6,000,000 was the sum asked for, and £6,400,000 is the amount of expenditure we have incurred. That is the amount we have expended in what I will not call War Services, but in Services that were intended to prevent war. I am confident that they have been mainly instrumental in averting war. I will not go into that discussion at present; but I mention it for the mere purpose of adding that it was never intended—and hon. Gentlemen will, perhaps, remember this—that it was never intended that that charge should all fall upon a single year. At the time the Vote of Credit was originally asked for, I stated that we proposed that the whole sum required should be spread over three years; and, in point of fact, we asked for, and obtained, a Vote to issue Exchequer Bonds for the purposes of the Vote of Credit, to be repayable at any time not exceeding three years. We did not, however, exercise the power given to us in that form. We thought it fairer to the House, and better that we should only issue Bonds for one year, and we did issue them in that form. They would all fall due by the 31st of March, 1879; but we had it in contemplation that the whole charge should be spread over three years. When we came to the Budget Statement in April I was more sanguine, and I thought the amount would probably not be so much, and that the expenditure might be under £5,000,000 altogether. In that case we should be able to pay it off in two years. But the matter has not turned out well, or, at any rate, as well as I thought. To go back to the sum of £6,427,000, which represents the expenditure incurred in connection with the Vote of Credit, let us see what has been already raised and paid. £750,000 was paid out of the surplus Revenue of last year— 1877–78—so that there remains due this year the balance of £5,677,000. Then, how much of this £5,677,000 will our present Ways and Means enable us to pay in the present year? Some of it, of course, we shall be able to pay. Let us, therefore, look at the estimated Expenditure for the current year—1878–79 —exclusive of what may be required for the Vote of Credit Service. The original Estimates, we know, were £81,020,000. Supplementary Estimates have been presented to the House, excluding all that relates to the Vote of Credit Services, which amount to about £439,000, and we have made an allowance for a further charge in connection with the Kaffir War of £400,000. That brings up the Expenditure, exclusive of the Vote of Credit payments, to £81,860,000. The Revenue was estimated at £83,230,000, and, therefore, there is a balance of £1,370,000 left in this year, which would be applicable to the payment or redemption of Exchequer Bonds, or the payment of the Supplementary Estimates. Deducting this sum from the balance of £5,677,000 which remains due, that would leave us with a deficiency. It would bring us to the same result which I have before shown in another way, and would leave £4,300,000 deficit unprovided for. Now, having arrived at that conclusion, I ask the Committee for one moment to let me invite their attention to what our position and prospects will be next year, supposing the Revenue and Expenditure to remain constant—I mean, allowing no spring for the Revenue and no alteration of Expenditure, either for the better or the worse, except, of course, the cessation of the extraordinary demand for what we have called Vote of Credit Services. We should have a surplus of £1,370,000 to begin with, even if we do not exclude the provision, which we have had to make this year, for so large a charge as £800,000 for the Kaffir War. I reckon that we should have that surplus, and, in addition, a sum of £700,000 for the remanet on the additional Income Tax. [Mr. CHILDERS: £600,000 is, I understand, the amount.] Supposing we take it at £700,000, that will give a total surplus of £2,070,000, which is not far from one-half of the £4,300,000 that has to be provided for. Of course, what may be the case this year may be expected to be the same in the following year. [Sir HENRY SELWIN-IBBETSON here made a remark to the right hon. Gentleman.] I am told that I am wrong, and that the remanet on the Income Tax should be £600,000 instead of £700,000. Therefore, the surplus would be £100,000 less, and would be £1,970,000, or nearly £2,000,000. It is sufficiently near to one-half of the total amount to be provided for, especially as we shall not have to provide next year, I hope, for any such expenditure as the Kaffir War. I think, therefore, we may fairly estimate that we shall be able, next year, to pay off about one-half of the £4,300,000 to be left over from this year; and in the year following that we shall be able to pay off the remainder. Now, as the Vote of Credit was asked for, originally, for three years, and as the amount which has been brought to charge in respect of it is very little more than the amount of the estimated Vote of Credit itself—being only about £400,000 more—and as, moreover, without any disturbance of our financial position, we may hope to be able to redeem the pledge we gave, that this money should only be voted for three years, I think the Committee will agree with me in considering that it is not desirable to alter our Revenue system, or to impose new taxes; but that we should allow the original arrangement to stand, and that we should make provision by the issue of a proper amount of Exchequer Bonds for the immediate service of the year, spreading the repayment over the next two years. That being so, the amount of Exchequer Bonds I propose to ask the authority of the Committee to issue is £2,000,000, or a sum not exceeding that amount. Of course, before the end of March, it will be necessary to make some provision for the £2,750,000 Exchequer Bonds which fall due at that time, and which it will be necessary to renew, unless we are able, by good fortune, to pay off any portion of them. That would be an operation that would come later; but the issue of the £2,000,000 Bonds, if the Committee accept my proposal, would be an immediate operation, with a view to our immediate necessities. This, I think, embraces all that I have to say to the Committee. I am aware that there are one or two other remarks that may be made. I may be told that I ought to make allowance for any possible failure in the Revenue. I do not think, looking carefully at the matter, that there is anything in the present appearance of the Revenue that should induce me to alter my Estimates. Undoubtedly, there are some branches of the Revenue in which the receipts are not coming in as fast as I should have wished. In. regard to one of them—in fact, the principal one —I daresay some hon. Gentlemen may take a different view. I mean the Re-venue from spirits, which is particularly falling off; but, in regard to the Revenue generally, my estimate of Revenue was made very carefully under the different heads; and as I do not at present see any sufficient reason to alter my calculations, I do not propose in my Statement to make any allowance for any possible falling off. I do not expect that there will be much falling off. Another point which may be raised is the question which many have asked— namely, whether we have come to the end of our Supplementary Estimates, or whether there will be any further charge which will fall on the present year? Of course, I have taken all the pains I can to ascertain how that matter stands; and I believe that I am perfectly justified in presenting the Estimates which are now presented with confidence to the Committee, and in the full belief that they comprise the whole of the charges for our Military and Naval Services. The Supplementary Estimates, unfortunately, are of an ordinary character. They are constantly recurrent, and it is very difficult to make sure that some small Supplementaries may not spring up, and I do not like to say with too much confidence that there will be none. But I hope, if there are any, they will be only of the ordinary moderate character; and I present these Estimates to the Committee with full confidence that we are making adequate provision in the proposal I now make. I do not think there is really anything more I need to present to the Committee. Of course, it will be my duty to give such answers and information to hon. Members as I can; but I should only be taking up the time of the Committee unnecessarily by going into questions which hon. Members may not think it necessary to raise, if I were to attempt to make any further observations. I place in your hands, Mr. Raikes, these Resolutions.

Motion made, and Question proposed, That, towards raising the Supply granted to Her Majesty, the Commissioners of Her Majesty's Treasury he authorized to raise any sum not exceeding Two Million Pounds by the creation of securities chargeable on the Consolidated Fund of the United Kingdom."—(Mr. Chancellor of the Exchequer.)

MR. CHILDERS

Mr. Raikes, I propose to deal with the question before the Committee purely as one of Ways and Means, and to keep within the lines of the Chancellor of the Exchequer's Statement. I am sorry that the Chancellor of the Exchequer did not carry out the promise he made to the Committee in commencing his remarks, because he has favoured us with several political allusions which were loudly cheered from one part of the House. I promise him, however, that I will not follow him in that respect; but that I will treat the matter purely as a financial question. The Chancellor of the Exchequer has to-day recapitulated briefly to the Committee his previous Financial Statements of this Session—that which he made in February when he placed before the House the Vote of Credit for £6,000,000, and the general Statement which he made in April in introducing the Budget. According to the Statement made on the occasion of the Budget, my right hon. Friend explained that out of the £6,000,000 Vote of Credit, £3,500,000 had been spent during the year 1877–8, to which it was limited, and had been met to the extent of £750,000 by the surplus on last year's account, leaving a balance of £2,750,000 to be carried forward as a debt to this year's account. In passing, I may say that the correct figure, according to the accounts laid on the Table, is £110,000 less, or £2,640,000. My right hon. Friend then estimated the ordinary Revenue of the present year at £79,460,000, and the ordinary Expenditure at £81,020,000, showing a deficit of £1,560,000 on the ordinary account, quite irrespective of any special charge in connection with the state of affairs in the East of Europe. But he said that there would be extraordinary charges to be provided by Supplementary Estimates; and that these might possibly amount to £1,500,000, but would probably not exceed £1,000,000. To meet these and the ordinary deficit, he proposed additional taxes producing £3,770,000; which would give us on the year's account a surplus of from £1,210,000 to £710,000, to go in reduction of last year's deficiency brought forward, leaving it at something between £1,540,000 and £2,040,000. He added that the following year's income would be further increased by £600,000 on account of the Income Tax; and as this would bring the ordinary surplus up to £2,800,000, the past deficiency would be more than made good. It is important that the Committee should be reminded of these figures, because the Chancellor of the Exchequer has to-day spoken as if the expenditure under the Vote of Credit had been agreed to be spread over three years. This is not the case. Some mention was made of three years in February, when the amount to be spent under the Vote of Credit was uncertain; but this was dropped before the Budget, when only between £2,000,000 and £3,000,000 was found to have been spent. The Bonds to make this good were issued for one year only, and not a word was said in the Budget Speech of any postponement except to the extent which I have named. Let us see, however, how the present figures tally with the Budget promises. The whole Supplementary Estimates were to be, probably, £1,000,000, possibly as much as £1,500,000. Now, in the month before the Budget was introduced—in March—it had been decided, in principle, to bring the Indian troops to Malta. The expenditure consequent upon taking that step must have been known by the Government to be large; and the amount must have been included in the Chancellor of the Exchequer's forecast of the Supplementary Estimates. I would remind the Committee also of what has been said in "another place;" that the occupation of Cyprus was discussed by the Cabinet in the month of March, and that the discussion was carried to such a point that the noble Earl who was Foreign Secretary at that time on this account resigned Office. That being so, either the Chancellor of the Exchequer should also have included some provision for the occupation of the Island in his Supplementary Estimate, or the Budget was utterly illusory, and its construction deserved severe condemnation. It now appears that as against £1,500,000, which was to be the outside Supplementary Expenditure, the Malta Expedition will cost £748,000; that the Supplementary Army Vote will be £1,845,000; and the Navy Vote, £678,000. Besides these, we now hear, for the first time, that there is a further charge of £400,000 on account of the Kaffir War, making the total charge for this year on account of that war £743,000. Sir, I think we have some cause of complaint with respect to these expenses at the Cape. A short time ago, when a Question was addressed to the Government on the subject by the hon. Member for Burnley (Mr. Rylands), we were told that an extremely small sum would be necessary for this war; and, relying upon that assurance, our vigilance was somewhat relaxed, and no further Questions were put. Now, we hear suddenly that the Government require close upon £750,000 on account of the expenditure for the Kaffir War. What, however, is the result of these figures? The Supplementary Estimates are more than the Budget figures, loosely as they were stated, by from£2,767,000 to £2,267,000. Instead of a surplus on the year's account of £1,210,000, or £710,000, there will be a deficit of £1,577,000. Last year's deficiency, instead of being reduced, will be increased, and will mount up to £4,307,000; and yet not a farthing is to be provided by additional taxation, but all is to be postponed to future years. Let me point out to the Committee in a few words the strange effect of this change. The extraordinary military Expenditure of last year amounted to £3,500,000; that of this year to £3,670,000,makingatotalof £7,170,000; or, deducting the cost of the Kaffir War, of £6,430,000. How does the Chancellor of the Exchequer propose to meet this? The extraordinary Revenue which we voted under the scheme of the Budget was £3,170,000. But, of that amount, £1,560,000 had to be provided, in any case, to meet the deficit in the ordinary Revenue, and £740,000 for the Kaffir War; so that, of the total amount of extraordinary Revenue, £2,300,000 was required for other purposes, leaving £1,440,000 only as the amount raised by additional taxation in 1877–8 and 1878–9 towards meeting the additional expenditure in connection with the Eastern Question. In other words, you are going to charge on special taxation in the two years little more than one-fifth of that extraordinary Expenditure. Sir, such a proceeding is quite unparalleled. The Chancellor of the Exchequer may claim to put the matter in what he called "another light; " but I prefer a plain statement of actual figures; and I think I have shown that the present proposal of my right hon. Friend must be wrong, if the principle on which he founded his Budget was right. Will the House now bear with me for a few moments while I point out what has been done in previous cases of this description by Chancellors of the Exchequer and Prime Ministers of both political Parties, in dealing with special charges analogous to this—even though, in several instances, they had to be met towards the end of the Session, and unexpectedly. I might refer to two notable cases of earlier dates; but I will simply take the precedents of our own generation since the Crimean War. In 1859, there was a very analogous case to the present. A sudden and special increase of military Expenditure was considered necessary by both Parties in the House during that year. At the beginning of the Session of 1859, Gentlemen on the other side were in power; at the latter part of the Session, Gentlemen on this side. The present Lord Beaconsfield was Chancellor of the Exchequer in the beginning of that year; and my right hon. Friend the Member for Greenwich (Mr. Gladstone) was Chancellor of the Exchequer in the latter part of the Session; and there was, practically, no dispute about the Expenditure. What was the proposal which was then brought forward almost at the end of the Session, and which received great care and attention? Owing to the sudden increase in the Army and Navy Expenditure, the estimated Revenue for the year was expected to fall short of the Votes by £4,867,000. What was done to meet the deficit? Was that Expenditure spread over the resources of three years, and popularity gained by avoiding the rightful increase of taxation? Not at all. On the 18th of July, when the Session of 1859 was as advanced as the present, my right hon. Friend (Mr. Gladstone) proposed that this deficit of nearly £5,000,000 should be met by the imposition of a 4d. Income Tax, and by shortening the malt credits. My right hon. Friend, on that occasion, said— The sum which is required is between £4,000,000 and £5,000,000. It is certainly a large sum to demand from the taxpayer at a short notice. But, on the other hand, it is a sum which has never driven a British Parlia- ment to the expedient of augmenting the National Debt."—[3 Hansard, cliv. 1395.] Mr. Disraeli supported the proposition, saying that "to raising this sum by taxes, not by loan, he gave his unqualified approbation." In the following year, a large charge was anticipated in connection with hostilities in China, the deficit being estimated at £2,336,000. On the 16th of July, 1860, the Chancellor of the Exchequer brought in a Supplementary Budget, not proposing to charge on the following year any part of his deficit, but to take part of it out of the large surplus of 1859–60, and to obtain the balance by adding to the spirit duty. Coming a little later to the case of the Abyssinian War, the Committee will remember that under the Supplementary Statement made by Mr. Hunt, in November 1867, and the Budget Statement of April, 1868, it was anticipated that there would be an extraordinary expenditure during the year 1867–8 of £2,000,000, and, during the following year, of £3,000,000. Those sums, as the Committee are aware, were very much exceeded, and the succeeding Government had to provide for £4,000,000 more. But with respect to the £5,000,000, what was done? The Government of Lord Derby and Mr. Disraeli carried, at the end of November, 1867, when only four months of the financial year were left, a special addition of 1d. to the Income Tax, and in the following year an addition of 2d., estimated to produce £4,350,000, the balance being met out of the surplus of the previous year. These proposals were made and carried with the consent of both sides of the House; and, in reference to this very expenditure and the plan for meeting it, on the 28th of November, 1867, my right hon. Friend the Member for Greenwich said, and perhaps the Committee will forgive me for quoting him again; but he is so high an authority on such subjects that I cannot refrain from doing so— Of all financial errors there is none so seductive, none so plausible, and, therefore, none so dangerous, as making a short postponement of the provision for your expenditure."— [3 Hansard, cxc. 346.] Thus, the large extraordinary expenditure for the Abyssinian War was met, not by loan, but by taxation. Another case, still later, was that which occurred in 1870 and 1871, when there was again a sudden increase in our military and naval Expenditure, caused by the ap- prehensions which were raised by the Franco-German War. In 1870, at the end of the Session, a Vote of Credit was asked and granted, to the amount of £2,000,000; and the Army and Navy Votes for 1871–2 exceeded by no less than £3,870,000 those of the previous year's Budget; or, in all, an extraordinary Expenditure of £5,870,000 had to be met; but not a farthing was postponed to the following year. The whole was met in the first year by using the available surplus, and in the second by an increase of 2d. to the Income Tax, which was taken off when the Estimates were reduced by £1,500,000 in the following year. In every one, therefore, of the four cases which I have mentioned, provision was made for meeting the entire extra expenditure out of the surplus Revenue of the year by increased taxation. There may be two answers to my argument, which I shall venture to notice. It has been hinted that we may fairly postpone some of this burden, because there is a reasonable chance of the Revenue rising, and because, after this year, there probably will be a decrease in the Expenditure. Now, I will put it to hon. Gentlemen —especially those who are acquainted with mercantile affairs, or who are employers of labour—whether there is any reasonable ground for anticipating an increase in the Revenue on the ground of improvement in trade, and especially in that part of the Revenue which is made up of the contributions of the consumers of spirits, beer, tea, tobacco, and other taxed commodities? This is certainly a matter on which it would not be wise to prophecy; but from such information as can be derived from the perusal of trade circulars, and from the accounts which come to hand from the manufacturing districts, I should doubt whether anyone be disposed to be very sanguine on the subject. As a matter of fact, is the Revenue rising? It is the Chancellor of the Exchequer's misfortune to have to bring in his Supplementary Budget after four months of the financial year have expired. We have, however, the advantage of verifying, for four months at least, the estimate of Revenue. He estimated that, in the Customs, Excise, Stamps, and the House and Land Tax, there would be an increase for the year over 1877–8 of £601,000; but, whereas the Revenue for the first four months of the financial year ought thus to be £200,000 more than for the first four months of last year, there is actually a decrease of £488,000; so that, under these heads, we are £688,000 worse than the Estimate for the first four months, which is equivalent to a falling off of £2,100,000 a-year. If the Customs and Excise alone be taken into account, the falling off is £463,000, or at the rate of £1,400,000 a-year. Of course, the comparisons which I have made do not amount to anything like actual proof that the Revenue will fall off; but they afford evidence in that direction, and I think they call for an answer from the Chancellor of the Exchequer. But then my right hon. Friend says that in the year 1879–80 there will be a considerable falling off in the Expenditure, and so if we keep up the taxes at their present rate, a surplus will be shown.

THE CHANCELLOR OF THE EXCHEQUER

I did not say there would be a considerable falling off in the Expenditure. I said the probability was that the extraordinary charges would not recur.

MR. CHILDERS

Well, but is it clear that this is so? Are we only pledging ourselves to expenditure in the present year? When the Chancellor of the Exchequer introduced his Budget for the present year, before the new taxes were imposed on the one hand, and before this extraordinary Expenditure was taken into account on the other, he contemplated a deficit on the ordinary Estimates of £1,560,000. I should like to know something from the Government as to what will be the probable cost of the occupation of Cyprus? How much do the Government expect to spend annually on that Island? Her Majesty's Government have had the matter in their minds since last March; and now that August has been reached, I think they ought to be in a position to give us some general idea—I do not ask for precise details—of what their contemplated expenditure on that Island is. What scale had they in their mind when they decided on the occupation? In the first place, we have heard that the number of men to be employed is to be 8,000. I do not know whether that is true; it may be that it is to be 10,000, but I will take the smaller number, and if it should turn out to be the larger, it will make my argument all the stronger. The military charge for 8,000 men on the scale of expenditure in Malta—and there you have everything to your hand — would be £500,000. Then what civil expenditure are you going to incur? First of all, what is Cyprus going to be? Is it to be a Colony? By which of the great Departments of State is it to be administered? Will it come under the War Office, the Colonial Office, the India Office, or, as I heard the other day, is it to be administered by the Foreign Office? Whichever it is to be, the Committee must be aware that, considering the condition of its harbours and internal communications, its sanitary deficiencies, and general state of ruin, it cannot be administered without very considerable expense. I take it at £500,000. That may be very much too little; but even taking it at that, that brings up the expenditure, for civil and military purposes on the Island of Cyprus, to £1,000,000. In regard to the expenditure at the Cape, the Chancellor of the Exchequer has expressed a hope that it will soon be over; but the news of the last few days is very deceptive if this should turn out to be the case. I might, with safety, have put down a larger sum; but I will assume, for the probable expenditure on that head, the sum of £300,000. Then there is the nominal increase in the Education Expenditure. That expenditure has been increasing at a rate of something like £300,000 a-year; but I take it at £250,000, a moderate estimate. If to these items for Cyprus, the Cape, and Education, you add the deficit on the ordinary Expenditure, and you only allow £1,000,000 for the fall off in Revenue, the sum to be met by the new taxes will be £4,060,000. But the whole of the new taxes will produce but £4,370,000, and thus only about £300,000 will be left to meet the postponed liability of between £4,000,000 and £5,000,000. Is it wise, then, to postpone this large charge in such a manner? I think what I have said affords fair material for an answer from the Chancellor of the Exchequer, or from someone on the Front Bench. I will now only, before I sit down, refer to one other argument, which I know will not be brought forward from the Front Bench, but which may come from another part of the House. It may be said that, after all, we are paying at the present time, through the new Sinking Fund and Terminable Annuities, so much towards the reduction of Debt, that the rule laid down by previous Chancellors of the Exchequer, in 1859 and since, need not be followed. I will show the Committee how entirely fallacious that argument is. I have already given the Committee several instances in which the House, both sides assenting, has refused to postpone special charges of this kind, and I will tell the Committee what the debt charge was on those occasions. In 1859, the old Terminable Annuities had not fallen in, and the net charge for principal and interest of Debt was £28,567,000; in 1867–8, when the new Annuities had been introduced, the net charge was £26,460,000; in 1871, it was£26,680,000; and though I have not, of course, the figures for this year, I have those for 1877, when the charge was£27,305,000, or £1,200,000 less than in 1859, when the House of Commons did not hesitate to provide by taxation in the year for all the special Expenditure. However, as I have said, this argument will not come from the Chancellor of the Exchequer. I have now discharged my duty in protesting against a proceeding in direct opposition to all the canons of sound finance, and to the policy of all Governments during the last quarter of a century, and which will form a most dangerous precedent in future years. That such a proposal should have come from the founder of the second Sinking Fund, is to me inconceivable. But here my responsibility ceases. We can do no more than record our protest against what appears to us a most dangerous precedent, which both sides of the House will some day regret to have established.

MR. GOLDNEY

said, while the right hon. Gentleman dealt with figures, he was entitled to great respect; but when he indulged in the spirit of prophecy, he thought the Committee was entitled to pause before accepting his conclusions. He remembered more than one occasion last year when the right hon. Gentleman's calculations were entirely wrong. He predicted, on the introduction of the Budget, that all the sources of Revenue were likely to diminish; and he thought the Committee would acknowledge how the circumstances had entirely falsified his forecasts. The right hon. Gentleman said there was no precedent for the course proposed by the Chancellor of the Exchequer, and he quoted instances from 1859. The right hon. Gentleman had evidently gone carefully into this matter, and he could, therefore, hardly think the omission was accidental; but if he had gone four years further hack, he would have found that in 1855—the last year of the Crimean War—Sir George Cornewall Lewis, who was Chancellor of the Exchequer under Lord Palmerston's Administration, came down to the House in April and said that, after careful and long consideration, he estimated the Expenditure for that year at £86,339,000, which he proposed should be met by £63,000,000, the taxes for the year supplemented by a loan of £16,000,000, now taxes amounting to £4,000,000, and a temporary loan by means of an issue of Exchequer Bills to the amount of £3,000,000. But, in the following August, Sir George Cornewall Lewis came again to the House, and said that, as the charges had been increased, he was compelled to increase his Estimate by £6,139,000. How did he propose to meet that additional sum? By increased taxation? No; but by a further increase of the power to issue Exchequer Bills to the amount of £6,000,000. When the right hon. Gentleman said that no precedent existed, he was bound to toll him that he considered the two cases almost exactly parallel. The Chancellor of the Exchequer still proposed to carry out his original proposition, and to place £2,000,000 of Exchequer Bonds upon the charges of this year; and he assumed that the fair average amount of reduced Expenditure for the ensuing two financial years might be taken, with convenience and safety, at the figure which he had placed. He thought the proposal justified by the precedent of 1855, a case which seemed to him to be entirely on all-fours with the present one; and he was quite sure that it was more likely to meet the views of the country than if at this moment it was sought to impose additional taxes to meet the Supplemental Charges.

MR. GLADSTONE

I confess, Mr. Raikes, it appeared to me, upon listening to the statement of my right hon. Friend (Mr. Childers), that it absolutely demanded an immediate reply from Her Majesty's Government. I do not think I can recollect a case in financial debate when figures and facts so formidable were allowed to come before the House, with various Gentlemen connected with the spending Departments sitting on the Treasury Bench, and not one word has been said. It appears as if they thought it necessary that some hours should elapse, in order to allow the effect of my right hon. Friend's statement to be lost, before they ventured to touch it. The hon. Gentleman who has just sat down appears to me most effectually to have proved the case which he set himself to argue against. The kind of assistance which he has brought to Her Majesty's Government has, I think, dealt them the heaviest left-handed blow which it is possible for them to receive. How does he justify the proceeding of the Chancellor of the Exchequer?—a proceeding taken at a time of profound peace, or at a time which the Chancellor of the Exchequer has described as one of profound peace. The Chancellor of the Exchequer has said, that by the wise expenditure of £6,000,000 peace has been secured. Well, if peace has been secured, the finance with which we have to deal is the finance of peace; and yet, with what finance does the hon. Gentleman compare it? He compares it with the finance of the most desperate crisis in the Crimean War. Sir George Cornewall Lewis proposed, in the month of August, in order to meet the necessities of that War, to take power to raise £6,000,000, which happens to be almost the same sum as that now required, by the issue of Exchequer Bills. [Mr. GOLDNEY: I said the War was then over.] But the War was not then over. Sebastopol was not taken till September. Nor was the War over when Sebastopol was taken. The taking of a fortress does not close a war; the expenditure of the War had not began sensibly to diminish till months after; and, therefore, this instance cannot he pleaded as a justification for the course of the Chancellor of the Exchequer. I know that it is not fair to lay the whole of the blame of an expenditure on so great a scale as this upon the Chancellor of the Exchequer. The Chancellor of the Exchequer can do a great deal by hard fights in the Cabinet—he can materially reduce the Expenditure, provided he sets about the matter with great resolution, and great resolution, I know from experience, it requires. But when we are dealing with the question in Parliament, we must treat the proposals as the proposals of the Cabinet. Instead of allowing the justification which has been made—if it be a justification—to pass for them, it appears to me that some Member of Her Majesty's Government ought to rise and give the reply to the attack—if it can be so called—of my right hon. Friend near me. But this justification which has been made is founded entirely on a misconception; because, by what they call a wise expenditure, they have secured what they call—and what we all must hope—is peace, and yet the comparison is made with one of the most momentous crises in the Crimean War. What was the state of taxation when Sir George Cornewall Lewis made that statement to which the hon. Gentleman has referred? The Income Tax, if I mistake not, had been raised to 1s. 4d. in the pound. I think I cannot be wrong in my recollection, for, in the previous year, I myself had raised it to 1s. 2d., and Sir George Cornewall Lewis had, in April, imposed an additional 2d.; and it was, therefore, an absolute necessity that the great bulk of this additional expenditure should be provided for by loans. And yet this is the state of things which the hon. Gentleman compares with the present time, and claims as a precedent for the action of the Government. If I was at all disposed, on the present occasion, to discuss the purposes for which this money has been spent, I have been a little provoked to do so by the declaration which the Chancellor of the Exchequer made, that the wise expenditure of this money had secured peace to the country. I will not go beyond the trespass—if it be a trespass—which the Chancellor of the Exchequer has himself made, in saying that, in my opinion, every shilling of this money—I do not include that which has been called for by the Kaffir War — but every other shilling of this money is money used in support of a policy which we believe to be needless and mischievous. Our conviction is that every valuable object which has been gained might have been obtained at less outlay, and with much less of human suffering—indeed, with much greater certainty—if we had never been led into the course of policy which has caused the spending of this money. At the same time, while I make that statement, I do not wish myself to discuss again the points which have already been so fully debated. I see behind the Chancellor of the Exchequer the Judge Advocate General and other Gentlemen, who have special cause to support the Chancellor of the Exchequer. I have no doubt that the whole of that magnificent majority which supports him on the present occasion will show the same unflinching support when the new taxes have to be imposed, and it becomes necessary to enforce the painful lesson that we must pay our way. I trust not one of them will be found to flinch from this task; but that they will consistently rejoice at being able to carry to the fullest extent the consequences of their policy. But while I do not intend to. touch at greater length upon the policy which has led to these proceedings, I am prepared to make a few remarks upon the financial aspect of the case. I hope the statement which has been made by my right hon. Friend will attract the attention of the people of this country, and that what he has said will sink deeply into its heart. Her Majesty's Government, it appears to me, are sapping by regular and constant progress the principles of financial responsibility and control in this country. In the first place, I cannot help seeing that there is a practice growing up of holding back from Parliament, until a very late date, the knowledge of expenditure that is coming on, and the tendency is indulged in of under-estimating that expenditure. I think, with the Estimates before us, we are justified in looking back to the Estimates given in the Budget. We were told that the Chancellor of the Exchequer could not exactly say what the extent of those Supplementary Estimates would be. He said they would amount to £1,000,000, or, to put it moderately, £1,500,000, instead of which they come to between £3,000,000 and £4,000,000. I wish to say that it is a very novel and doubtful practice to submit Estimates in that form. When it is said it may be £1,000,000 or £1,500,000, it is casting abroad, and preventing the House of Commons discharging its duty; for in order to discharge its duty to the Throne, it must have before it definite statements. I do not mean that it is the duty of the Chancellor of the Exchequer to say— "I may not be uncertain, but I cannot tell you what the sum will be; " but I hold it is for him, in conformity with precedent, usage, and principle, to state the outside amount; whether it is £1,000,000 or £1,500,000. I think the mode adopted most objectionable. The statement was not only erroneous, but also, as far as we have been able to judge, it is impossible to conceive what excesses can have occurred since the period of the Budget, which required the Estimate then to be kept down to £1,000,000 or £1,500,000, and which have now raised it to £3,000,000 or £4,000,000. I must likewise object to the phrase, and the practice indicated by the phrase, about spreading the charge over three years, or two years. And I am obliged to my right hon. Friend (Mr. Childers) for quoting a passage from a speech of mine which I had forgotten, in which I made a strong declaration to that effect. This delusive method of dealing with a question of charge—it is of all methods the worst. It is far better to say, as Sir George Cornewall Lewis said—"I have got here a deficiency, which I do not think it is convenient to supply just now." Call it what you like, you have made an addition to the Debt of the country; you have spent money, and you have not replaced it in the pockets of the people. Talk about spreading it over one or two years! These are empty phrases—empty bubbles. It cannot be spread over a term of years. It is money spent, and it is money not replaced. It is an addition to the Debt of the country, and so you ought to treat it. Now, with regard to precedents. I am afraid Her Majesty's Government are perfectly sick of all references to precedents. In other times it used to be considered material and important to refer to these precedents. It was the pride of the House of Commons—and it has been believed to be, in a very great degree, the safety of Parliament —that in all matters of public importance it was distinguished beyond every popular Assembly for the attention it paid to precedent, and for its wise and instinctive reluctance to be led beyond the bounds of precedent. You have heard a precedent from my right hon. Friend (Mr. Childers). In 1859, on the 18th July, having a deficit of £4,800,000, I proposed to raise Revenue to the extent of £5,100,000, in order to meet it. Do not suppose I take any merit for that; it was no merit of mine. I believe Lord Palmerston, Lord Russell, and my other Colleagues would have drummed me out of the Cabinet if I had proposed to deal with that deficit in the way that the present deficit is proposed to be dealt with. Such is the change of the times. I venture to make a further allusion, because it is necessary to do so in order to get a full view of the state of affairs in 1860. My right hon. Friend says truly that we took £1,300,000 out of the balances. The plan, in July, 1860, was to find £1,150,000 to meet the spirit duty, and we took £1,300,000 out of the balances. That was, of course, an addition to Debt, being so much diminution of the means of the country. But under what circumstances did we make that addition? What was the total amount of the charge for the China War in that year? In the beginning of the Session of 1860, we had to add to the Estimates of 1859 the sum of £850,000; we then placed upon the first Estimates of the year— 1860–1—the sum of £1,700,000, and we had to provide, in July 1861, for a further sum, which raised the entire charge for the China War, for the Session of 1860, to the sum of £5,850,000. We provided for that entirely from Revenue, excepting only the sum of £1,300,000, which, as I have said, was substantially an addition to Debt. Such was the entire cost of the China War. So that in 1859, having a deficit of £4,800,000, we provided for the whole, excepting the sum of £1,300,000. These are the old principles of British finance. They may not be very palatable to right hon. Gentlemen opposite. The right hon. Gentleman said he had no doubt his proposal would be very palatable. I think, if he had come down to-day and said he had reduced the Income Tax to 2d. in the pound, in order to compliment the people upon the excellent feeling they had shown, and that with regard to any deficit resulting from this reduction, he would spread it over four or five years, his proposal would probably have been very popular. But what said my right hon. Friend in 1860? That year was one of the greatest severity I ever passed through in my life—it was a year of extreme Parliamentary labour, with the greatest possible anxiety. We raised the Income Tax to 10d. in the pound; we laid a new tax on spirits; and with that immense taxation—an Income Tax of 10d. in the pound—we had likewise to cope with the favourite scheme of those days, which was known as the ''fortification scheme.'' By dint of great efforts, the original Estimate for that scheme was cut down to £5,000,000. But how was it to be provided? The Government determined that they could not carry on the taxation, and the £5,000,000 was made up by Annuities, extending over a limited number of years. I remember very well the admirable speech of the Chancellor of the Exchequer criticizing that method of procedure, and showing what a dangerous thing it was not to meet the expenses of the year within the year. Although we had an Income Tax of 10d. in the pound; although we had to meet three-fourths of the China expenditure out of the Income Tax; so rigid and Puritanical was the financial virtue of my right hon. Friend that he was not satisfied with the additional burden for fortifications—not, perhaps, a very wise scheme, but a scheme that 99 out of every 100 Englishmen desired to have— and made an excellent speech, setting forth his objections to our proposal. I recommend that speech to the consideration of everybody in this House, and to the Chancellor of the Exchequer himself. I think it would be a very good thing indeed if he recurs to that speech, and refreshes his mind on the subject of the dangers of tampering with the principle on which all sound finance and all true financial control rests—that is, the principle of keeping the expenses of the year to the plans and projects of the year, and not professing to throw them upon one or two years to come, about which you can know nothing. As has been shown by my right hon. Friend (Mr. Childers), in speaking of the proposal of the Chancellor of the Exchequer, it leads to the most disagreeable supposition with regard to the Revenue of the next year. I will not question the Estimates of my right hon. Friend the Chancellor of the Exchequer. He is in a different position in the present state of trade in the country; still, I heard with satisfaction the declaration which he made—and I am sure he would not hare made it except on serious con- sideration—which conveys to me some comfort as to our financial situation. It is a marvellous thing if we are to get through, as he supposes, 12 months all for nothing; because the assumption of my right hon. Friend is not reduction of general Expenditure in 1879–80, but the total sweeping away of the extra expenditure which has brought upon us the special necessities of the present year. I understand the whole of that is to be swept away bodily. My right hon. Friend has attempted to make an estimate of the expenditure on Cyprus. I have not the smallest idea what that expenditure will be; but it appears to me, if you are going to have Cyprus, and if it is to be a military centre—a centre from which you may rapidly send forth your Military and Naval Forces—it is difficult to understand how you can get over the necessity of a large outlay in the first instance. I will not speak of buildings and telegraphs; but what of harbours? It is admitted that you have not got a harbour in the place. You have got roadsteads, it will be said. Well, the Downs is an admirable roadstead; but what would be the condition of this country if, when we wanted to send out a Military Force, we were obliged to embark men and stores from Dover? These matters are not at all tempting; but certainly one's mind is possessed with a very disagreeable anticipation; and I feel some surprise at the boldness and courage with which my right hon. Friend assumes that the whole of this expenditure is to be swept away as regards 1879–80. I go back beyond the Crimean War; I look back over my very long Parliamentary experience, extending over a period of 39 or 40 years, for a proceeding which, in the slighest degree, resembles this. This proceeding is one in which we have before us an expenditure, incurred and to be provided for, reaching £6,000,000; we provide one-fourth of it, and the other three-fourths we send on, to be dealt with in future years, as those years will be able to meet it. That is to say, having a heavy deficit, we do not like to meet it; and that, laying claim to the acquisition of a great deal of glory, still our confidence in that glory, and our confidence in the affections of the people about to be consolidated by that glory, is so moderate that we think it better not to try their patience. This is the condition in which we stand; and as for precedent, the only precedent I can recollect—and it is one, I believe, not in the recollection of any other man now in Parliament— will be found by means of Hansard's Parliamentary Debates for the year 1839. In that year, there was a small deficiency upon the ordinary Expenditure; and the independent Liberal Party in this House were eagerly set upon obtaining the introduction of a very important change —a change which, perhaps, of all the changes that have been introduced in our times, has been the most extensive and the most beneficial in its effects relatively to the amount of inconvenience and loss which, in the first place, it occasioned. I suppose there were inconveniences in those days, just as there are in these. I am no more responsible for the Chancellor of the Exchequer in those days than I am for the present Chancellor of the Exchequer; but the Chancellor of the Exchequer then found, like my right hon. Friend, a great difficulty in saying what was the loss to the country by the introduction of the Penny Post. The rest of the world knew tolerably well that they would lose £ 1,000,000 to £1,500,000; but the Chancellor of the Exchequer did not like to assume responsibility of any kind. In the first place, I believe he put in a Resolution; but afterwards, in the financial Bill which he passed, he recognized the whole deficiency of the year, but said that he bound the House solemnly to provide for it next year. For the last 38 years, however, that precedent has been remembered only to be eschewed, avoided, and condemned; but it is now renewed in a much larger form. One thing I do not recollect. I do not think I ever saw Sir Robert Peel, who was a calm and self-sustained man, moved with such indignation as on that occasion. I remember how he then said— "The finance of this Government will be the ruin of this Government;" and so it was; and how he also said, speaking of that very declaration of the House of Commons, that, having a deficit, they would not provide for it, but hand it over to the coming year— His opinion was, that it was the worst thing that had been done by the Reformed Parliament. I wonder with what sort of mind he would now contemplate the heirs of his Conservative opinions and his Conservative practices—and among them there was none so strict as the rigour of his unbending obstinacy about his country's finance—adopting the proposal of a Conservative Government for dealing with the finances of the country. No doubt, it is disagreeable to the Government to hear this incessant series of complaints. I have no alternative but to join with others in complaining and protesting. We can, at the outside, but protest verbally; we have not the smallest chance of making any impression upon Gentlemen opposite; we care no more for the finance of Sir Robert Peel than for the finance of William Law and the Mississippi scheme. A time of war, and wholesale preparation for war, establishes a set of rules and necessities that have no reference at all to the pre-sent state of things. The blame I lay is upon the policy of Her Majesty's Government collectively, not upon the Chancellor of the Exchequer; and when I reflect upon that policy, and the triumphant success which it has met with upon every occasion on which it has been challenged, down to last Saturday morning, I cannot at all wonder that Her Majesty's Government, after the proofs that they received of the unswerving fidelity of their followers, should expect of them what I have no doubt will be the case—that they will receive an account, making provision for one-fourth of the deficiency of £6,000,000, and leaving the remaining three-fourths to the tender mercies and contingencies of the future.

MR. SAMPSON LLOYD

remarked, that the right hon. Gentleman (Mr. Gladstone) had not been successful in his reply to the statement of the hon. Member for Chippenham (Mr. Goldney). If, in 1855, when, as the right hon. Gentleman stated, we were in the midst of a great war, and could not possibly foresee the amount of our ultimate deficiency—the Liberal Government of that day nevertheless thought it consistent with sound finance to borrow a large sum, and spread its repayment over a term of years—how much more was the present Government justified in adopting a similar course now, at a time when they had every reason to believe that peace had been assured. The right hon. Gentleman had objected to the precedent quoted by the hon. Member for Chippenham (Mr. Gold- ney); but he would not, perhaps, think it unfair to be reminded himself, with respect to the Income Tax, that he promised to take it off altogether without telling the country how it was to be done; the one case might, therefore, be set against the other. In his opinion, the question of principle, and the amount of the excess in the Supplementary Estimates, were fair and just points to raise questions upon; but he had no doubt that right hon. Members on the front Bench would give some reasons why these Estimates were as they were. He thought that, considering the application which had been made of a large portion of the Expenditure, which none liked, but which he believed to be necessary, to supply material for the Naval and Military Services, of which they were greatly in need, and which had placed them in a state of unprecedented efficiency, the sum required by Her Majesty's Government was reasonable. He hoped, with the Chancellor of the Exchequer, that our Expenditure would not be so great as some hon. Members supposed, and, with regard to Cyprus, that it would rest upon a fair and sound basis. He should have agreed with the right hon. Gentleman (Mr. Gladstone) in his objection, on financial ground, to spreading expenditure of a normal kind over future years; but he ventured, to submit what he believed to be a common-sense view of the case— namely, that the present Expenditure would not recur, and that it might be recouped out of the ordinary taxation of the country by judicious economy. He did not wish to be understood to mean the application of a system of unwise parsimony. He thought the proposal of the Chancellor of the Exchequer for dealing with the money was a perfectly right one, and he gave him his full support.

MR. W. HOLMS

said, the Statement of the Chancellor of the Exchequer was a very unsatisfactory one; he had a deficit of £6,516,000, and even with the estimated surplus of £2,210,000, a charge of £4,307,000 would be thrown on the country. It was proposed to meet that charge by the surplus of the two succeeding years. There was a barometer, by which he could estimate how far the working classes could endure increased taxation; that barometer was the revenue obtained from Customs and Excise for each of the five years preceding 1876. The average increase from Customs and Excise was £1,800,000; whereas last year, if they estimated, not only the actual falling off, but deducted the extra amount paid into the Exchequer during the two closing days, because of anticipated advances upon certain articles of Excise and Customs, they would find that the actual deficiency was £570,000; or, in other words, instead of an annual increase of £1,800,000, they had a deficit of more than £500,000; and, as had been stated by the right hon. Gentleman the Member for Pontefract (Mr. Childers), it looked as if the deficiency this year would be even greater. What reason had they to suppose that next year the Expenditure would be the same as that of last year, or even of this year? They had every reason to anticipate that it would be greatly increased. It had been pointed out by the right hon. Gentleman the Member for Pontefract, that Cyprus alone must cause a considerable increase in our Expenditure, not to speak of the steady increase of the Education Estimates; so that he (Mr. Holms) ventured to say that the estimate formed by the right hon. Member for Pontefract was likely to prove very much under the mark. What was really the position? As yet they had had no Estimate furnished them of the probable expenditure in connection with the Eastern policy of the Government; at least, he did not recollect that any statement had been made by any Member of the Government on that subject. He had been surprised that during the four nights' debate so little had been said on the financial aspect of the whole of the Eastern Question. Let them look at Cyprus. The Government had taken 10,000 soldiers to that Island. He found that a British soldier, on an average, cost £106 per annum. This alone would give an expenditure of about £1,000,000 a-year, apart from any expenditure in connection with the Civil Service of Cyprus. That was not all. The Government had undertaken to defend Asia Minor—and, in fact, the whole of Turkey in Asia—against Russia; and in doing so they must, of course, incur a further expenditure. Cyprus was 600 miles from the Turkish frontier in Asia. Were the Government to wait with their 10,000 troops in Cyprus until Russia invaded Asia Minor? He should think that no prudent Government, which really meant to carry out its engagements, would do anything of the kind. He would remind the Committee that Turkey in Asia was not now the same as it was a year ago. Kars and Ardahan had been given up to Russia; and the consequence was that the Government had undertaken to defend Turkey in Asia without forts and with a feeble Ally. If they were really to undertake the defence of that country, he ventured to say that the Government would very likely have to do what had been done in India—namely, endeavour to raise a Native Militia, which should fight side by side with British troops. Well, all that would cost money—how much no man could tell. But that was not all. They would have the First Lord of the Admiralty coming down to the House and telling them that the Navy required to be strengthened, because of the engagements into which the Government had entered. Further, they had undertaken to insure that the Government of Turkey in Asia should be reformed. They were told the other night by the Secretary of State for the Home Department that Turkey herself would effect the reforms referred to in the 1st Article of the Anglo-Turkish Convention; but he did not say how it was possible for her to do so. The Marquess of Salisbury, however, took a different view; and, as he was at the head of the Foreign Office, they should rather be guided by his opinion, on this particular matter, than by that of the Secretary of State for the Home Department. The noble Marquess said that— Asiatic Turkey contained populations of many different races and creeds, possessing no capacity for self-government, and no aspiration for independence; and he went on, in a business-like way, in his despatch of the 30th of May, to state the particular course which he proposed to take for the purpose of effecting these reforms. But could anyone who had studied the history of India doubt that, in dealing with the Turkish Government, weak and in difficulties, the result would be that, in the end, the government of the whole country would fall into our hands? In the meantime, the system of carrying out reforms must cost this country a considerable amount of money. Therefore, they had to anticipate a charge, which they must look in the face, for the Army, probably for the Navy, and certainly for carrying out these reforms. He should like to know from the Government, whether they had formed any estimate whatever of the probable cost? If they estimated it even at £2,000,000 a-year, he ventured to ask how they could possibly have any surplus, under the most favourable circumstances, next year to meet the large deficit of £4,307,000? He thought that the only honest course was to raise the Revenue within the year which was necessary for defraying the Expenditure of the year. He confessed that if he was in the position of the Chancellor of the Exchequer, he should hesitate to raise the amount required by an additional 2d. or 3d. in the pound from the Income Tax; because such a course would make the Eastern policy of the Government unpopular. At the same time, he had no hesitation in saying that the proper and fair mode of dealing with this matter was to raise within the year the money required to be expended.

THE CHANCELLOR OF THE EXCHEQUER

Of course, I recognize entirely the spirit in which my right hon. Friend (Mr. Gladstone), spoke when he said just now that he did not charge upon the Chancellor of the Exchequer personally, but upon the Government as a whole, what he objected to in their financial policy. At the same time, I am the organ of the Government in this matter, and I must take upon myself the responsibility for all that is done in regard to it. With regard to the observations which have been made by the right hon. Gentleman the Member for Pontefract (Mr. Childers), there is no doubt whatever that he has made—as he always does upon these occasions—a very able financial speech; and I am quite ready to admit that he does good service in bringing these matters, from time to time, before the notice of the House, and of the public, and of the Government, in the clear way in which he makes his statements. Nevertheless, I cannot assent to all he has endeavoured to impress upon us this evening. I admit, of course, the accuracy of his figures, generally speaking; but I think he misunderstood—and, certainly, my right hon. Friend the Member for Greenwich misunderstood—one thing which I had said with respect to next year. In speaking of the prospects for next year, they seemed to think that I had excluded the possibility of any expenditure which could be set off against the £800,000, of which we have spoken as the Kaffir War expenditure in this year, and that I had relied on the Estimate for next year on the assumption that I was to get rid of that expenditure. I have no doubt I expressed myself badly; but what I said was that, taking the surplus of £ 1,370,000, which is what I get this year, even although I have this year to provide £800,000 for the Kaffir War, and adding to it £600,000 as the remanet of the additional Income Tax, I get very nearly £2,000,000 of surplus to reckon upon next year, without taking into account the chance of the non-recurrence of any such charge as that for the Kaffir War; and it was upon the assumption that I could reckon upon such a surplus that I thought it safe to spread the £4,000,000 over two years; because if we had to meet any more Kaffir War expenditure—which Heaven forbid!— or any other item of extraordinary expenditure, that sum of £800,000 would go some way towards meeting it. If, on the other hand, we are fortunate enough to escape any expenditure of that kind, my position, of course, will be so much the better. Then there was another point upon which the right hon. Gentleman dwelt—and I admit that he was within his right in making the observations which he did make—and that was the prospect of our not realizing the Revenue that we have estimated we should realize this year. Well, I spoke with some little hesitation in my opening address; because I felt myself obliged to admit that in some branches of Revenue—especially on spirits—I might almost say entirely on spirits—there is a falling off. The other branches of Revenue are keeping up; and we have a very good prospect of realizing the Estimates upon everything, as far as I can see at present, except, perhaps, spirits, and a portion of the Stamp Revenue. I do not wish to go into details; I think it would be inconvenient; but I wish to state generally that I have gone into this matter with my Revenue advisers, and I have come to the conclusion that these are the two points upon which there is danger. But we hope to do better on the Post Office; and we have also reason to think that the calculations with regard to certain items of Miscellaneous Expenditure are more careful than they might be. Upon the whole, therefore, I see no reason, without anticipating any great revival of trade, for being apprehensive that our Estimates will not be realized. Both of the right hon. Gentlemen opposite have made some rather severe remarks upon the insufficiency of the provision which I made at the time of the Budget Statement; and it has been said that I ought to have known, and must have known, that we were likely to incur a much greater amount of expenditure. [Mr. CHILDERS: Ought to have known; not must.] Well, that I ought to have known; but I think that if the Committee will really look broadly at what has been the course of affairs in connection with this expenditure, they will see how peculiarly difficult—I might say absolutely impossible —it was this year to forecast, from one month to another, what our expenditure would be. Just bear in mind what was the general policy of Her Majesty's Government with regard to additional expenditure. What was the reason for that expenditure? It was this. We were anxious to keep out of war; but, at the same time, we felt it was necessary to take certain steps to endeavour to arrest the progress of the war that was going on, and to prevent certain consequences which we were afraid might arise. We believed that, by showing that this nation was in earnest, and prepared firmly to make certain demands— and if they were not conceded, to take the necessary steps to enforce them— we should succeed in bringing about the result which we desired; and I am not going too far in saying that ultimately we did so succeed. But we did not succeed as quickly as we had hoped to do. It was our belief at first that the demonstration of our intention to act vigorously, and to use force if necessary, would have sufficed to check what was going on. Well, it did not. Matters went further and further, and we were obliged to take further steps; and as we did so we came to the point at which, from a combination of circumstances, we did arrive at the result that had been contemplated. That was, at all events, our policy; but then, as we were absolutely unable to say at what point we might succeed, we could not say how far our expenditure might go. When I spoke of £1,000,000 or £1,500,000, as being the amount I thought we ought to spend, I said that which, from the information we then had, and from the opinions we then formed, I believed to be the true state of the case. My right hon. Friend the Member for Greenwich actually went the length of saying that I ought not to use such slipshod language as even to talk of "£1,000,000 or £1,500,000," but that one ought to say £1,500,000 plump, and make provision for the highest possible expenditure. That raises rather a serious question. Are you, upon all occasions, to make provision to meet the highest possible expenditure? Because, if you do that, you will find that you are entering upon an extremely expensive course. If the largest possible expenditure should happily not be incurred, then you will have imposed taxes which are not required; and. that certainly would produce an effect which was produced by right hon. Gentlemen opposite with very great applause on more than one occasion— they asked for a great deal of means, and at the end of the year came forward with a magnificent surplus. That is a course of policy which I do not approve of; and I do not think that hon. Gentlemen generally on this side of the House approve of it either. I admit it is very heroic and looks very well; but, on the other hand, I think it is inconvenient to the taxpayers and to the trade of the country that you should increase taxes more than is necessary. I think myself it is wiser and better that you should do something moderate in the way of spreading over one or two or three years an ascertained expenditure which is within moderate limits, and which can be extinguished and disposed of without causing inconvenient fluctuations of taxes. My right hon. Friend the Member for Greenwich taunts me because he says that in 1860, when it was proposed by the Government of that day, of which he was a distinguished Member and Chancellor of the Exchequer, to raise a loan for fortifications and spread it over 25 years, I objected to the proposal, and urged that the thing would be done better and more properly by the addition of proper amounts to the Estimates within the year. I still think that, having regard to the long period of 25 years over which the expenditure was proposed to be spread, it was a reasonable contention on my part; but I was young at that time, and my right hon. Friend had had far greater experience, and, at any rate, the speech, which he is now good enough to call an excellent one, failed entirely to produce any effect upon him at the time. That, however, is a purely personal affair; but with regard to the observations of the right hon. Gentleman the Member for Pontefract, I am ready to admit that in all those cases to which he has referred all charges were met by taxation, and by taxation imposed within the year. I do not deny it at all; and I am not now prepared to enter into a discussion about the circumstances of each and every one of these cases. I think there were some circumstances that might make them stronger, and others that might make them weaker; but I base this proposal, not, I am bound to say, on the precedent of cases of that kind, but upon what I believe to be the right and proper course to be taken for the good of the country. I think you must look at it in this way. This has been an exceptional transaction. It is one, if our view is right— and the House has been good enough to support us in that view—in which we have expended a considerable—but not by any means an enormous—sum of money in averting what might have been a most serious burden upon the country for generations to come. If we had gone into a war, there is no saying what the limit to that burden might have been. I think it is not unreasonable that we should endeavour to spread that charge over the short period of three years; and looking to the state of the country, and the present depressed condition of many classes amongst us, I think it is desirable that we should not worry them by increasing taxation which, according to the hypothesis, was after a few months to be taken off again. Of course, if we were told that we should have to raise the level of our taxation, that would be a very different thing; and in one of the cases mentioned by the right hon. Gentleman the Member for Pontefract—the case of the year 1860— our military Expenditure was raised to a level, from which it did not fall for a good many years afterwards. I may instance one of the reasons which appears to me to justify our dividing this expenditure in the way we have done. What has been one of the largest items —perhaps, the very largest single item —that has been paid for out of this Vote? Why, the item for the purchase of ships. We have spent £1,500,000 in the purchase of ships, which it would have taken four years to build. There is surely nothing very unreasonable, under the circumstances, in spreading over three years expenditure from which I am sanguine enough to hope that this wise purchase affords us some prospect of relief. However, I will not say more upon that point, except that I do not wish it to be understood that, because I did not enter into any sanguine calculations as to the possibility of reductions in ordinary expenditure next year, I have, therefore, no hope that we may have such reductions. I feel sure it is the duty of the Government—and certainly it is the interest of the Chancellor of the Exchequer—to press most earnestly for such wise economy and reductions in the ordinary expenditure as may be attainable; and I can promise the Committee that that matter will not escape my attention. There is, I think, very little else of which I need take notice, except some observations that have been made with regard to the probable cost of Cyprus. I am not in a position at the present moment to enter into any detailed calculations on that subject, for it is an entire misconception to suppose that we have had this matter in our minds, or that there has been any plan of occupying or retaining Cyprus, for the length of time that has been supposed. It is only within a very recent period that our attention has been concentrated on that Island. As regards the military Expenditure, my right hon. Friend the Secretary of State for War will presently state what he believes to be the proper amount of forces; but it will be very far short, indeed, of anything that we have heard of in the course of this discussion. I should say that some 2,000 soldiers would be amply sufficient for the occupation of the Island; but I would rather not enter into a point of military detail. There will, of course, be some expenses of a moderate character for the administration of the Island in the first instance; but it must be remembered that we have to look to the revenues of the Island to support the charges; and though it may not be possible to make these revenues support all the charges in the first year, I have no doubt that we shall be able hereafter, by a proper administration, to make them bear their own charges. At all events, they ought to do so; and that is a matter to which our attention is directed. The distinguished gentleman who has gone out now as High Commissioner (Sir Garnet Wolseley) is charged with the duty of making a full Report on all these matters; and by the time the House re-assembles, I have no doubt we shall be in a position to give much fuller information than it is at present in my power to do. I do not know that there are any other points on which I need make any observations. I think, if I were to go into all the precedents of former years, I could show a good many cases in which Estimates have been made, and expenditure incurred, with reference not only to the finance of a single year, but with reference to the finance of the year following, and even of several years following. I think I could find cases in which my right hon. Friend the Member for Greenwich himself had incurred expenditure of that kind. I confess that my recollection, although I have not refreshed it very lately, leads me to think that the first idea of issuing Exchequer Bonds for a limited term of years originated with the proposals made in 1853, when these Bonds were to be issued and to run for seven years, in order to cover the process of the extinction of the Income Tax; and other cases I am certain could be found in which great financial operations were instituted to involve certain sacrifices of the Revenue for one year, and in which the Revenue of the next year was to be brought into account in order to provide for the whole charge. I remember that Sir Henry Willoughby used to be very critical at that time and denounced the practice, and that it was warmly defended by the right hon. Gentleman, who was then responsible for it. I do not say that these precedents can be regarded as entirely on all-fours. What I say is, that the doctrine which appears to be laid down—that every emergency is to be met by an addition to the Income Tax— is a very dangerous one, and that it is a bad principle to raise taxation to cover a maximum amount of estimated expenditure. I could not help being amused at a lively newspaper article, or extract from an article, which I saw the other day. The newspaper writer was denouncing the extravagance of the Tory Government, and comparing it with the economy of their Predecessors, and this expression was used which rather amused me. I am quoting from The Manchester Examiner and Times of a few days ago. The Revenue receipts, it was here said, were £2 8s. 2d. per head of the population in 1873–4, and fell to £2 7s. 8d. in the fourth year of Tory rule; while the proportion of the expenditure per head, which was reduced to £2 4s.. 5d. in my right hon. Friend's (Mr. Gladstone's) last year of Office, is now £2 9s. 3d. It struck me that this was a very roundabout way of saying that the Tory Government took less out of the people and spent more for their benefit than its Predecessors.

SIR JOHN LUBBOCK

said, the right hon. Gentleman the Chancellor of the Exchequer had more than once in his last remarks spoken of spreading expenditure over three years; but the right hon. Member for Greenwich (Mr. Gladstone) had clearly shown that this was a mis-description of the Government proposals. The expenditure was already incurred, and it was its repayment that was to be spread over three years. The right hon. Gentleman (the Chancellor of the Exchequer) seemed to be misleading himself by a false analogy. If the Government were going to erect buildings, to construct fortifications, or build ships, they might spread the expenditure over a period of years; but what was now proposed was obviously different. The country, he believed, would hear with considerable regret the large amount of Supplementary Estimates which they were called upon to meet, and the expenditure on the Kaffir War would be hoard of with surprise. No one had the least idea they were incurring so heavy a liability in South Africa. He had not supported the hon. Member for Liskeard (Mr. Courtney) in the strenuous opposition he offered last Session to the Government's South African policy; but he could not help feeling that the subsequent course of events had, to a certain extent, followed the course prophesied by the hon. Member. As our frontier in South Africa was pushed further North it became naturally more extended; and he would suggest to the Government that they should consider whether it would not be wise to take some steps to provide for future expenditure of this kind by arrangements with reference to the land by which we could repay ourselves. He felt that the expenditure which formed the bulk of the Supplementary Estimates had been, to a great extent, useless. In his opinion, it would have been more easy for Russia to have yielded to the wishes of this country if they had been expressed in a somewhat less warlike manner; and when he compared the Treaty of San Stefano with the Treaty of Berlin, and saw what the changes made in the arrangements of the former Treaty really were, he could not help thinking that the country had got very little for their money. In some respects he preferred the Treaty of San Stefano to that of Berlin; because he believed a strong Bulgaria was desirable in the interests of this country, and would have conduced to the happiness of the people in that region. As regarded Cyprus, no hon. Member who had yet spoken had expected that Her Majesty's Government would be able to give even an approximate estimate of what the cost of our occupation of that Island would be; but he thought they had a right to expect some idea of the policy of the Government in respect to that Island. Did the Government contemplate making large harbours there? Or did they intend to undertake any large public works? If the acquisition of Cyprus had been the result of such a sudden idea that the Government had not yet formed any deliberate intentions, it seemed to him that it was not wise on their part, to take the Island with so little consideration. A much larger number of men than 2,000 would have to be placed in the Island if our occupation of it was intended to put us in a position of preventing the progress of Russia in Asia Minor. The Chancellor of the Exchequer used a dangerous expression in the course of his speech when he spoke of "exceptional expenditure." There was always exceptional expenditure, and it was hardly to be expected that it could be avoided next year or the year after. The China War afforded no precedent for the present financial proposals, since an indemnity was received from China which covered much of the deficit there might otherwise have been. Much had been lately heard about the Imperial policy of this country. Would it not have been more consistent with Imperial policy, and more likely to produce an effective impression abroad, if this expenditure had been met at once out of income. If less popular at home, it would have been more prudent. The course of postponing payment did not appear calculated to give foreign Governments a high opinion of our financial strength.

MR. J. G. HUBBARD

said, the right hon. Members for Pontefract and Greenwich (Mr. Childers and Mr. Gladstone) had bestowed upon the propositions of the Chancellor of the Exchequer criticism most wide, searching, and retrospective, and certainly not flattering. He was utterly unprepared to follow them in their wide and discursive review, and would content himself with some remarks with reference to the present year. He was struck with the regard of the right hon. Gentlemen for precedents, and especially for precedents set by themselves. Precedent was not always to be implicitly followed. It must sometimes be regarded, not as an example, but as a warning; and this remark applied, in his opinion, to many of the precedents of the last 10 or 20 years. The right hon. Member for Pontefract said that the four months of the present financial year already indicated a deficiency of £400,000, and thence he argued that at the end of the financial year there would be a very large deficiency for which the Chancellor of the Exchequer had made no provision. Admitting the right hon. Gentleman's premises, he must demur to his conclusion. During the last few months, the industry and enterprize of the country had been paralyzed, partly by the apprehension of war, and partly by the action of the labouring classes, who chose to strike. What reason was there to apprehend that this state of things would last for the next eight months? He believed that, as after a storm came a lull, and after a lull a storm, so the period of inaction from which the country was now emerging would probably be one of great activity in trade, and a consequent increase in Exchequer receipts. It was, therefore, perfectly legitimate that the Chancellor of the Exchequer should anticipate that the financial year, 1878–9, would be, at least, as productive as its recent predecessors, He doubted the utility of making criticisms upon certain possible shortcomings in the Estimates of the Chancellor of the Exchequer, months before the events occurred, which alone could give reality and force to those criticisms. A Budget was necessarily a matter of opinion, and when the Chancellor of the Exchequer formed his conclusions upon grounds presented to him and advice given by those best able to help him, he had done his duty. No man could be responsible for circumstances which might afterwards entirely disturb his reckoning. The circumstances of the Congress could not have been foreseen by any Chancellor of the Exchequer, and he could not blame him for having now to make this second Statement. The question now to be considered was, not whether the Estimates ought to have been produced earlier, but how the charges now thrown upon the finances of the country were to be met? The right hon. Member for Pontefract based his criticisms mainly upon what had been done in 1859–60, when a deficiency of £5,000,000 was met by a proposal to increase the Income Tax by 4d. in the pound. Did his right hon. Friend propose that a similar course should be followed now? If not, he failed to see what he could censure in the present arrangement. He gathered that the right hon. Gentleman, and the right hon. Member for Greenwich, wished the Expenditure of the year to be provided for out of the Revenue of the year. What taxes were in that case to be resorted to in order to meet the additional outlay which had been incurred? To that outlay he confessed he entertained, in the first instance, the strongest possible objection. He did not believe that the demand for £6,000,000, to make a display before Powers, with whom we were negotiating, was a legitimate demand; and he had thought since, that other proceedings, of a more or loss sensational character, were not such as were necessary to a country in a position like ours. But men of far greater experience, and larger political knowledge, than himself, in whose opinion he had great confidence, had expressed to him a contrary view, and had assured him, from their knowledge of Oriental Governments, that the exhibition of material force made by the English Government was calculated to have, and did have, a very important influence in bringing about a successful settlement of the question at issue. The charges had now to be mot; and the question was, whether they were to be met by special taxation, or partly by taxation and partly by dividing the payment over a series of years? The Income Tax had already been raised from 3d. to 5d., and he thought the Chancellor of the Exchequer had done wisely in not increasing it. Looking, as he did, on the Income Tax, knowing its iniquity, its oppressive character, and the waste, both moral and material, accompanying its collection, he felt every increase of the tax as a sensible pain. He had not remarked that the right hon. Gentlemen opposite, in their contrast of the present and late Government, had adverted to the different measures taken by the Chancellor of the Exchequer for the reduction of Debt. Eighteen or 20 years ago, no distinct preparations were made for the redemption of Debt, except in a limited way by Terminable Annuities. The present Chancellor of the Exchequer had insured the paying off of £5,000,000 by a very simple operation. In two years he would have paid off £10,000,000 of the National Debt—a sum equal to, if not exceeding, the amounts he might temporarily require on loan. If, then, the National Debt, instead of being greviously enlarged, was to be reduced, he saw no reason to censure the proposals of the Chancellor of the Exchequer; for he was sure that, except under pressure of urgent necessity, any alteration in the fiscal policy of the country was a disadvantage. For a great national purpose, the difficulties and disturbances of such an alteration might be submitted to; but, for example, to vary repeatedly the Income Tax was in itself an evil, apart from the objections he entertained towards it on account of the iniquitous mode in which it was levied. In what he had said he spoke with one reservation—Cyprus. Of the expenditure there the Committee had been told nothing; and, therefore, he would say nothing, except this—that he devoutly trusted the Government would not attempt to govern that Island, and raise the Queen's flag there, while the Sultan retained a Sovereignty over it, but would acquire the fee-simple of the property, if we were to undertake its management and rule. This was especially necessary when, as he saw, this country was already making industrial engagements there. He had heard of projected commercial operations of every kind in connection with the Island. The Government themselves, he believed, were already undertaking national works of considerable magnitude. He sincerely protested against English people's money being invested in the Island of Cyprus until the Island of Cyprus became the English people's property.

MR. CHILDERS

Perhaps my right hon. Friend will allow me to remind him that I read the figures from the official Return, showing that we were paying, in 1859, on account of interest and reduction of Debt, £1,200,000 more than now. [Mr. J. G. HUBBARD: Of that kind of Debt?] Yes.

MR. RYLANDS

I think the Chancellor of the Exchequer has entirely failed to give any satisfactory reason whatever for having adopted a course so unprecedented in regard to the financial arrangements of this country. The right hon. Gentleman the Chancellor of the Exchequer, I daresay, trusts to the very large majority he has at his back who are prepared to support the Government. No arguments would justify the extraordinary course in view of deficiencies not to impose additional taxes, but to incur additional obligations as to the future, in a manner that no one can speak positively as to how they are to be met. He has taken that course, because it is perfectly well understood by hon. Gentlemen on the other side of the House that if the Government begin to lay on additional taxation at the present time, they would secure a large amount of public disapproval and disappointment. If the Government had exercised the thrift which was displayed by the Government of the right hon. Member for Greenwich (Mr. Gladstone), they would have no need to come to the House for additional taxation, for they would have had no difficulty in meeting the increased Expenditure. Let hon. Gentlemen cast an eye over the Returns of Expenditure during the years in which the late Government administered the affairs of this country. He will find that during the time the present Government have been in Office, the Expenditure in the Army, the Navy, and the Civil Services, have been steadily increasing, and they are now spending, in their ordinary Expenditure, some £10,000,000 or £12,000,000 more than the Government of the right hon. Gentleman the Member for Greenwich did. If the Conservative Government had exercised the same economy, they would have had no difficulty in meeting the increased charges, without coming down to the House with such proposals as had been laid on the Table. Is the country likely to be satisfied with an expenditure of £7,000,000 for objects which the Government cannot describe or justify? The right hon. Gentleman now acknowledges that the Government have not seriously considered what is to be done with Cyprus. I have listened with astonishment to the statement of the Chancellor of the Exchequer—that he can give us no information about Cyprus, and that it had been for so short a time under the notice of the Government, that the Cabinet have not yet determined what they are to do with this possession. Instead of there being 10,000 troops stationed at Cyprus, there will be only 2,000; therefore it is said that the expense will not be so great. So far as I can judge from the statement of the Chancellor of the Exchequer, so far from being useful for offensive purposes in Asia Minor, the possession of the Island is to be a sham and a pretence, yet it is hung out before the country as being a great stroke of policy. If we are to have docks suitable for the reception of large vessels of war, and if we are to have forts and barracks necessary for accommodating a large number of troops in Cyprus for offensive purposes in Asia Minor—although I do not believe that it would answer the end in view— that would be an intelligible policy. But what can 2,000 troops do in Cyprus when there is no harbour for vessels of war? It is altogether a sham. The Government say they have secured peace; and it is said that we have such an interest in peace that the expense incurred in maintaining it has been small as compared with that of war; and that we may, therefore, fairly leave the expenditure to be met by the taxpayers in the next two years. Well, I have no doubt whatever that the country is gratified that we have got peace; and that if we had entered into the wickedness and crime of war, we should have laid much heavier burdens on the country. But the danger to peace was the creation of the Government themselves. Peace was not menaced, except by the Government in disturbing the concert in Europe. The Chancellor of the Exchequer can give us no definite information as to the arrangements of the next two years, and he has only, in my judgment, taken the course he has always taken during the whole Session whenever the Government have come down to the House to make any demand upon the Public Exchequer. They have never given us sufficient information. I think I am justified in saying that the statements they have made have been misleading statements. When the Vote of £6,000,000 was asked for, we were told from the Government Bench that it was extremely probable that no portion of that Vote of Credit would be spent, or only a very small portion. The Chancellor of the Exchequer excuses the Government by saying that new circumstances have arisen which were not contemplated. How soon did they arise? As soon as the Government was granted the money they began to spend it, although the circumstances remained exactly the same. There is one reason that accounts very much for the fact that misleading statements are placed before us. This difficulty has arisen from the fact that the Government have only been in the same mind for a short time at once. For several months there was a kind of hysterical policy on the part of the Government. They seem to have been excited by one thing, and then by another, and they took steps which afterwards they were disposed to change, or in some manner to withdraw. We know now that great differences existed even in the Cabinet itself; so that it was almost impossible for Members of the Government in the House to give a clear statement as to the determination of the Government. There was an idea on the part of several Members of the Government that the £6,000,000 would not be wanted. I think there have been several occasions on which steps were taken on information which may have proved afterwards to be inaccurate, and which justified the Chancellor of the Exchequer in saying that he found it quite impossible to give the House full information. There was one notable case in which the Secretary of State for the Home Department had told us that the Cabinet were possessed of informa- tion of so serious a character that they could not disregard it, and it was afterwards found that that information was incorrect. I should like to ask the Government what that information was, and what were the steps taken by the Government in consequence of the information? The probability is that it had very much to do with the movement of the Indian troops. I fear it is utterly impossible to oppose the proposition of the Government. We believe that the statement of the Chancellor of the Exchequer, although made in good faith, is made on calculations which will not prove to be correct, and that next year the Expenditure will be far more than he contemplates at present. Of course, we cannot carry our opposition to these propositions further than a protest; but whatever course is taken by the Government to put off the evil day, this expenditure, which has been so lavishly incurred, will have to be met sooner or later.

SIR GEORGE CAMPBELL

said, there were one or two points of practical importance to which he would refer. Some of the remarks of the right hon. Member for Pontefract (Mr. Childers) the Chancellor of the Exchequer had not answered. He wanted very much to know if we had got to the end of the expenditure with regard to the Indian troops? It was thought they were to remain at Malta; but now they had been removed to Cyprus, which must raise the expense very considerably. From the beginning the expense of these troops was very large indeed. They had given pecuniary encouragement to the Sepoys in order to secure their loyalty. Those Indian troops—men and officers — were excessively highly paid, and were brigaded with European troops, who were less highly paid. Some weeks ago he made a Motion for a Committee to inquire into the matter. When he came down to the House he met the Secretary of State for War (Colonel Stanley), who said the Government were willing to accept that proposal in substance, and as soon as the troops were settled, that Committee would be granted. When they were settled in Malta he renewed his application from day to day for several weeks; but the matter was still delayed, though he was always told the Committee was to come off as soon as possible. He confessed that towards the end of July his patience got exhausted; but, at last, after many inquiries, he was pleased to learn that the right hon. and gallant Gentleman was prepared to appoint a Committee. The Committee being appointed, he was in hopes that he would obtain information, which would be valuable, with regard to the actual cost of these troops. When the Committee met a very great surprise was in store for him. He found that instead of communicating with himself previous to the sitting of this Committee, the right hon. and gallant Gentleman had placed himself in communication with the right hon. Member for Pontefract (Mr. Childers), who was away in the country. When he came up the noble Lord (Lord Eustace Cecil) communicated with that right hon. Gentleman without any knowledge on his (Sir George Campbell's) part. When the Committee met and the noble Lord was voted into the Chair, he proposed that the Committee should do nothing at all, but should postpone operations until next year. He was quite convinced that valuable information would be obtained if only one witness from the Indian Office was examined, and perhaps one from the War Office. He was taken very much by surprise, and he did not think that he had been quite well treated in the matter. So much did this feeling prevail in the Committee, that although the official and ex-official elements had combined, on a division the numbers were 6 and 6, and the motion for adjournment was carried by the casting vote of the noble Lord as Chairman. The noble Lord said the Government wished to leave the matter in the hands of the Committee. That could hardly be so when six independent Members were in favour of going on, and the adjournment was only carried by the casting vote of the noble Lord himself. Next morning there were telegrams from Cyprus that the Indian troops were to be sent back to India. The real fact probably was that the Indian troops were excessively expensive, and, being in a difficulty, the Government were very anxious to send them back to India. That being so, it was not exactly convenient to the Government that the exact pay and allowances should be examined. He was quite sure, if the noble Lord had told him there was any difficulty, he should have been the last man to have pressed on any exposure contrary to the interests of the Public Service. He (Sir George Campbell) was not without suspicion now that these non-proceedings of the Committee were connected with the determination of the Government to get rid of these troops. As regarded Cyprus, the Chancellor of the Exchequer had told them fairly that it was quite impossible for the Government to estimate what would be the cost of the administration of Cyprus. But the sum put down in the Estimates for the expenses at Cyprus was not only not sufficient, but was quite absurd. What was that sum—£25,000? It might be that the Government would reduce the number of troops to 2,000 men. He was quite prepared to admit that 2,000 men were amply sufficient to maintain order in Cyprus. If, however, the objects of taking Cyprus were those set forth by the Government to assist in the defence of Asia Minor, then 2,000 men would not be sufficient for any purpose of that kind. That would not be enough for offensive purposes, nor for defensive purposes. We should not dare to leave Malta with 2,000 men. Cyprus, it seemed to him, was much less defensible. His own view was that it would be much better that we should not attempt to maintain a defensive position in Cyprus. Therefore he should be glad to learn that that was not proposed by the Government, whatever they intended to do. He must say still that, in his opinion, this estimate of £25,000 for the whole military expenses of Cyprus, in a year of which so many months had yet to run, was quite inadequate, and, in fact, ridiculous. Parliamentary Papers, issued only that morning, had shown how great the expense was likely to be. It was pretty clear that the whole of the property, including public buildings, which was up to the date of the Convention the property of the Sultan, was to remain in his own hands. Unless he was misinformed, Sir Garnet Wolseley, instead of having possession handed over to him of the Turkish buildings for the purpose of his Government, had been compelled to go about begging the Greeks to rent him houses, and the demands of the Greeks were so exorbitant that he had been compelled to go outside the town, which was, practically, the seat of his Government. This was not, to say the least of it, a very dignified position to be occupied by the Representative of Her Majesty, who had undertaken the defence of Asiatic Turkey, and the occupation of Cyprus as part of the arrangement. The expenses that would have to be undertaken would turn out to be very great indeed. The cost of the Governor General and his staff would certainly be very considerable, and large cost would be entailed by the maintenance of a sufficient Force in the Island to enable us to carry out the undertaking upon which we had entered. It had now become quite clear that Cyprus was an unhealthy Island, at any rate, at this season of the year. In this connection he wished to give a word of very serious warning to Her Majesty's Government, and he was sure that the hon. and gallant Gentleman below him (Sir George Balfour) would confirm him, that in a region and climate productive of autumnal agues and fevers, Native Indian troops would suffer much more severely than Europeans in circumstances where they were ill-protected against malarious influences. Experience of what had happened in India led him to believe that in a climate like that of Cyprus they would have whole battalions of Native troops going on the sick list, unless very large sums of money were expended in building suitable barracks in salubrious parts of the Island. Unless this was done, the only chance of saving the Native troops was to send them back at once to India. He was one of those who were extremely anxious that the experiment of employing Native Indian troops in Europe should be fairly tried; and, therefore, he should be extremely sorry if any ground were given for supposing that in either a financial or a sanitary point of view the bringing of Native troops from India to Europe had proved a failure. It would certainly not be a very glorious ending to this experiment to be compelled to take the troops back to India before sufficient opportunity had been given for testing their capabilities for service in Europe. But if the Island was unhealthy, and the Government was not prepared to spend more money than that which was contemplated by the Estimate, the best thing to be done would be to send the Native troops back to India as soon as the commissariat arrangements admitted of their transport. Such a course would certainly have the effect of bringing the experiment to an end before it had been really tried; but it would be better to do this than to have the troops decimated by sickness. The Estimate for the civil administration of Cyprus was even more ridiculous than that for the expense of the military services of the Island. The amount proposed to be taken was £8,000. He had had a good deal of experience in the administration of new territories taken over from indigenous Administrations; and he felt sure that, no matter how fertile and prosperous the community annexed might be, a great expense must be incurred in the first instance. How much greater, therefore, must be the cost of taking over this wretchedly misgoverned and harried Island from the Turks? One important point in connection with this question had been overlooked. It had been said that, in all probability, the Revenue would pay the expenditure; but it seemed to be forgotten that we had undertaken to pay over to the Turks a sum equalling the Revenue which they had hitherto derived from the Island, and that there was a vast difference between the English and Turkish modes of administration, particularly as far as the levying and collection of taxes was concerned. Up to the present, the Turkish expenditure in Cyprus had been almost infinitesimal, and the Turkish officials had been allowed by their Government, in accordance with Oriental custom, to live upon the people of the Island. England could not harry the Island as Turkey had done; she could not, therefore, raise a Revenue as large as that which had been raised by the Turks, and her expenditure would, of necessity, be much greater than it had been under Turkish rule. England would require much larger Government establishments, and would have to pay for them, instead of allowing the officials to pay themselves at the expense of the people as the Turks had done. It was also clear that they would have to pay on a large scale, judging from the demands which had already been made by the Greeks upon Sir Garnet Wolseley, since his arrival in Cyprus. He, therefore, thought this Estimate of £8,000 was utterly ridiculous and misleading, and in no degree representing a fair estimate of what the actual expense would be.

He wished, also, to say a word as to the expense of the Kaffir War. He came down to the House prepared to hear that the sum of £300,000, put down upon the Estimates as the probable cost of the War, would not be sufficient to meet it; and he was anxious to ask the Government whether he was not right in his conjecture? But the right hon. Gentleman the Chancellor of the Exchequer had anticipated his objection by stating that another £400,000 would be necessary on account of this War. He agreed with the right hon. Gentleman the Member for Pontefract (Mr. Childers) in thinking that the Government had. not treated the House fairly in reference to this matter. He had himself hammered constantly at this question, because he had been anxious to know whether the money spent at the Cape was Colonial money, or whether it was drawn from the Imperial Exchequer; and he had been continually met with the statement that the expenditure would be but small. Now, however, the House was told that, in addition to the amount originally contemplated, over £400,000 would be necessary, making over £700,000 in all. He had always had a sort of uncomfortable suspicion in reference to this matter. He was, from the first, quite sure that there was no man in the Empire better fitted to deal with the administration of affairs at the Cape than Sir Bartle Frere, and subsequent events had shown that he was right in his opinion. But it struck him throughout that, eminent as were the qualities of Sir Bartle Frere, and great as were his merits, there was something almost superhuman in the task of reconciling the different parties at the Cape, and establishing a sort of happy family there with arrangements to carry on a war. It had occurred to him throughout that, added to his eminent qualities, Sir Bartle Frere had British money behind him; and it now appeared this was the case. The opposition at the Cape seemed to have disappeared; everything had the appearance of being perfectly amicable; but these circumstances were coupled with the fact that England was to pay £743,000 towards the expenses of the Kaffir War. He was afraid that the House of Commons had not been fairly dealt with; that, in fact, the opposing parties at the Cape had been, as it were, " squared " with British money, without the consent of Parliament, and that we had been paying them—and paying them very well indeed — for fighting their own battles. This could not be regarded as a satisfactory state of things. With regard to the future, it must be borne in mind that although the Kaffir War was practically at an end, or was speedily approaching it, owing to the very eminent qualities of Sir Bartle Frere, there was a threatened war in the Transvaal. He hoped the war would be averted; but as the whole civil administration of that part of Africa was on our hands, he feared that a moderate sum of money would be necessary for the purpose of conducting that administration in a peaceful manner, or a still larger demand in order to the carrying on of wars in that, at present, disturbed territory. On all these grounds, he thought the Chancellor of the Exchequer had, in the Statement he made in Committee of Ways and Means, underestimated the real character of the demands he would eventually find it necessary to make upon the Imperial Exchequer. The right hon. Gentleman ought, in his opinion, to have met the whole matter more boldly, and to have called upon the country to pay, by means of an increased taxation, for what was called "a spirited foreign policy."

MR. E. JENKINS

thought the somewhat surprising speech of the Chancellor of the Exchequer called for some further explanations. The right hon. Gentleman had opened his Budget, and, apparently, had provided for the expenditure that would be necessary for the rest of the present year; but when he came to compare the proposals of the right hon. Gentleman with the undertakings into which the Government had entered, he found a very wide difference between the two sets of circumstances. He could not help feeling, apart from the very keen criticisms which had proceeded from the front Opposition Bench, that the first pin had been stuck into the bladder of Imperial policy, which had been so successfully blown up with Imperial gas by hon. Members on the Ministerial side of the House. The point on which he wished to receive information from the front Ministerial Bench was this. The right hon. Gentleman had framed his Estimates, and, in so doing, had made what had been clearly shown to be a most imperfect provision for the sort of hybrid arrangement with regard to Cyprus which had been entered into. He wished the opposite Benches had been filled with hon. Members who supported this great Imperial policy, in order that he might have asked their assistance in obtaining information from the Government as to the Convention into which this country had or had not entered, and the responsibilities which Her Majesty's Government had or had not undertaken. The Government had made no proposals as so the contingencies likely to arise out of the existing state of things. The House knew how frequently the Chancellor of the Exchequer had come down to the House with undivulged secrets of Government policy locked up in his breast; and he, for one, should not be at all surprised if, in the course of a few days, the right hon. Gentleman came down and announced that a British Resident had been appointed to Constantinople with a salary of £6,000 a-year, and that Her Majesty had taken possession of the Island of Tenedos, or some other island in those seas. The right hon. and gallant Gentleman the Secretary of State for War smiled at this criticism; but it was based, unhappily, upon facts which were too certain and accurate to be controverted by the Ministry. He would ask the attention of the House to this— either that the Government were deluding the country, by an empirical policy, into a supposition that they were really going to undertake that the administration of Turkey in Asia should be put into a thoroughly efficient condition, or they were not. If the last presumption was accurate, the Turkish Convention was a piece of waste paper; and he could understand the Chancellor of the Exchequer coming down to the House and making no mention of possible contingencies with regard to the responsibilities which the country had undertaken. One of the first things that would strike anyone considering the subject carefully would be that, with a view to minimizing the difficulties and dangers that might arise, there should be an increase in the number of Consuls, who should report to the Home Government as to the condition of the countries, or parts of countries, in which they were engaged; but he had heard of no such proposal; and, as far as the occupation of Cyprus by Indian troops was concerned, they had been told that it was not determined to occupy Cyprus until long after the Native troops had been moved from India to Malta. As far, in fact, as he could judge, the only reason for sending these troops to Cyprus was that some use should be made of them before they were sent back to India. What appeared on the face of these whole proceedings was that the Government had not, and never had, a policy on this point; or if they had a policy, that they had deceived the House, and kept from it any knowledge of what they intended to do, or of the amount of money which would be necessary to carry their policy into effect. The House was left to conclude that this was a mere delusion put forward for the purpose of keeping up a show of Imperial policy with which to go to the country, or that the Government had undertaken responsibilities so serious that they did not dare to ask the House for means to meet them. In these days of startling disclosures, he should not be surprised to find that either one or other of these states of things was an accurate description of the facts. So far as the financial question was concerned, Parliament was bound to take note not only of the state of things at home, but as to the position of affairs abroad. On Saturday last, the noble Earl the Prime Minister, speaking at the Mansion House, drew a pleasing picture of universal peace in Europe; but he forgot to mention that Austria, in carrying out her part of the Agreement, had let herself into a little war; that the Italians were uneasy; and that affairs, generally, were in so menacing a condition that it would not be safe to calculate upon the peace of Europe being maintained for a single year; and that, therefore, it would not be safe to postpone, even for a year, the financial responsibilities which ought to be met at once by the taxpayers of the country. Under the circumstances, he thought the House and the country had a right to ask for further information as to the policy of the Government in reference to this particular question.

GENERAL SIR GEORGE BALFOUR

could not agree with the hon. Member for Kirkcaldy (Sir George Campbell) in thinking that the Native troops had been in any way bribed to come to Europe. As far as his knowledge enabled him to speak, the rate of pay and allowances given to them was the same as when others of the Indian Army had been called upon to go to Burmah, Abyssinia, the Persian Gulf, or any other of the places outside of British India, in which they had had to serve from time to time. He might also add that the payment in rupees, though large in appearance when converted into sterling, was, in reality, so economical to the Government, that it would be wise to apply the Indian system to the English military arrangements; because the money actually paid covered every item of charge which was now met by the Home Government for barracks, furniture, servants, rations, carriage of baggage, and tents, for all of which the Home Government contributed, and in a far higher ratio than that which was calculated to be with the Indian system. The officers received in rupees the full amount for every purpose. No perquisites, no back allowances, were permitted. Such additions would be a violation of agreements. He had also been pained to hear the language used by the hon. Member for Kirkcaldy as to the conduct of Sir Bartle Frere at the Cape. He had long known the honest heart and truthful mind of the Governor of the Cape, and he could not think for a moment that he would descend to the practice of bribery in any shape or form.

SIR GEORGE CAMPBELL

said, he had not intended in any way to accuse Sir Bartle Frere of unworthy conduct— very much the contrary.

GENERAL SIR GEORGE BALFOUR

at once accepted the disclaimer. With regard to the Native Indian troops in Cyprus, he was strongly of opinion that unless the Government was prepared for such an expenditure as would properly house them, the only safe course to take would be to send them back at once to India. Further, he thought it would not be possible, at the amount of money which was asked from Parliament to maintain the large Force at present on the Island, or to construct the works that would become necessary. Once let loose the Engineers upon the making of fortifications, allow the officers of Artillery to construct batteries at will, or empower the authorities to proceed with the building of barracks, and then it would not be £1,000,000, or perhaps £1,500,000, that would pay the bill. It would be impossible to house our soldiers in barracks under £250 a-head; and the making of harbours, breakwaters, jetties, and other improvements, would swallow up the rest of the money which, instead of being expended on a wretched little Island of 150,000 inhabitants, might, he thought, be much more profitably laid out at home. He admitted that £10,000,000 might turn the Island into a paradise; but where was that money to come from? Certainly not from the pockets of the people of England. He had intended to move that the £2,000,000 now proposed to be raised should be reduced by the sum of £1,080,000; but, on reflection, he had changed his mind. If he could not persuade the Government to do what was right, then on their heads would rest the responsibility of doing wrong—by withholding the Papers for which he had repeatedly applied, in order to show the state of the money claims between the Home and Indian Governments. He washed his hands of it. Now, with reference to the military charges made by the War Office against India, he had refrained, as the right hon. Gentleman the Chancellor of the Exchequer knew, from any hasty action. He had trusted in the Government to act fairly and justly towards India, and had refrained, from year to year, raising his voice against the exorbitant charges they threw upon the Indian Revenue, notwithstanding that he had had the means at his command to bring forward the question. But his request for Papers on the subject had never been acceded to. The Papers had been promised him again and again; but he had always been put off during the last three years. Now, of the £1,080,000 charged by the War Office against the Government of India, he believed that £300,000, or more, was in excess of the proper amount. A Petition was last night presented in "another place" from the people of India, complaining of the taxation imposed on them, and another Petition, as hon. Members were aware, had been presented in that House to the same effect by the hon. Member for Hackney (Mr. Fawcett). Well, the sum of money which, as it seemed to him, was unjustly levied by the War Office upon India, was more than sufficient, he believed, to cover the extraordinary salt tax recently imposed upon the people of Madras.

THE CHAIRMAN

reminded the hon. and gallant Member that he was wandering from the Question before the Committee, which was that a sum, not exceeding £2,000,000, be granted to Her Majesty.

GENERAL SIR GEORGE BALFOUR

said, his intention had been not to move the reduction of the Vote; but if his observations were narrowed in that way, he should feel obliged to do it. After what had been said, he trusted the right hon. and gallant Gentleman the Secretary of State for War would endeavour to give him the Papers he asked for—in other words, details of the charge of £1,080,000 which was thrown upon the Revenues of India. He felt keenly on this matter, believing that the people of India were suffering an injustice. The least the Government could do was to show them that their complaints had been attended to, and to furnish them with information which would enable them to judge whether or not they were being unjustly dealt with. He wished the Government to take note that once again he refrained from taking extreme measures against them by moving the reduction of the Vote; and he trusted his appeal for information would not this time be disregarded. Passing from this subject, he would only say that he agreed, to a certain extent, with what had fallen from the right hon. Gentleman the Member for Pontefract (Mr. Childers). He thought it much to be regretted that the Government should incur debt on account of their policy and not pay it off out of the year's income. They would have done much better, in his opinion, to have resorted to a bold financial stroke, which would have shown the world that if they pursued a spirited foreign policy, they were not afraid to meet the cost of it. He valued peace beyond price, for nothing more terrible could happen to a country than being plunged into war; and, although he did not approve the mode in which peace had been maintained, still, as it had been maintained, he thought the people of this country ought willingly to put their hands in their pockets and pay for it at once. Looking over the Expenditure of the last two years, it would be found that if the Government had not raised the Income Tax, they would, at the present moment, have been £8,000,000 in debt; and he thought it would have been wiser on their part, both financially and politically, to have wiped off their deficiency in one year, instead of deferring payment of it till next year, or the next again.

GENERAL SHUTE

expressed a hope that the right hon. and gallant Gentleman the Secretary of State for "War would not be induced by the remarks of the hon. and gallant Gentleman opposite (Sir George Balfour) to show his hand with regard to Cyprus, as it would not, in his opinion, be to the advantage of this country to make it known whether the garrison was to be 10,000 men, or a couple of battalions which, with one or two batteries of Artillery, and our Fleet commanders in the Mediterranean, would probably be enough to occupy it.

GENERAL SIR GEORGE BALFOUR

reminded the hon. and gallant Member that the Chancellor of the Exchequer had already stated the intentions of the Government in that respect.

GENERAL SHUTE

said, his own idea with regard to Cyprus was this—it was simply a strategical position, in which we might, if necessary, concentrate our military power from all our Colonies and Dependencies, including India. At Malta they had not sufficient space to do that, and it was undesirable, for other reasons, to attempt it there. There could be little doubt that within two years Cyprus might be made to pay more than its own expenses.

SIR HENRY HAVELOCK

confessed to having listened to the remarks of the hon. and gallant Gentleman opposite (General Shute) with considerable surprise. With all deference to the hon. and gallant Member's superior knowledge of the matter, he must be allowed to demur to his statement that Cyprus could be regarded as a strategical position. The great Imperial policy of the Government, of which they had heard so much, was now beginning to assume a definite bearing in the matter of pounds, shillings, and pence; and it seemed to him the more closely the people of England studied its details, the better they would see how complete and utter a failure it was, and how totally disproportionate to the result to be achieved was the gigantic expense involved. Now, as to the strategical position of Cyprus—[General SHUTE: I said it might be used for the concentration of troops.]—Quite so. The hon. and gallant Member proposed to use Cyprus for the concentration of troops from all our Colonies and Dependencies. Well, when they were concentrated there, what in the world did he propose to do with them? That was the question which, from a humble and narrow military point of view, he ventured to put to him, and also to the Government. They were told that this was a part of the great Imperial policy which was to write the awful words—"Thus far, and no farther"—on the crest of some mountains, which the Chancellor of the Exchequer, he believed, called the A B C mountains the other day, and to draw a magnificent line across the Continents of Asia and Europe, beyond which Russia was not to pass. For this, they had the certainty of having to pay £6,000,000 now, and every prospect of having to pay double or treble that sum in future. Now, he would ask right hon. Gentlemen opposite, who might be supposed to have formed some definite conception of the means by which they hoped to carry out their plans, how was the acquisition of Cyprus to aid them with their grand Imperial policy? The country was waiting for an answer to this question, and it was his firm conviction that in 20 years' time they would be waiting still. Everybody recognized that this country committed a great mistake in bolstering up Turkey in 1856. Yet, with 20 years, additional experience, the Government were proposing to do the same thing again, to the tune at present of £6,000,000, which they proposed to pay, not in the present year, but at some future date. [An hon. MEMBER: Three years.] Well, he gathered from the speech of his right hon. Friend the Member for Pontefract (Mr. Childers) that no definite time could really be fixed for the carrying out of the Chancellor of the Exchequer's projects. The Government proposed to garrison Cyprus with 2,000 troops, instead of the 8,000 British and Indian troops now there. Well, what became of his hon. and gallant Friend's grand strategical scheme? If Cyprus was to be of any importance whatever as an extension of our military and naval basis eastward in the Mediterranean—and he would not by any means object to such an extension, if carried out in a proper way —it could only be by the formation there of a military depot of the largest sort, by the creation of harbours where no harbours existed, and by the erection of barracks, arsenals, and forts on a large scale, to do which not £6,000,000 but £20,000,000 would be necessary. All this would be required to make Cyprus tenable under circumstances which could easily arise out of the foreign policy of this country—supposing, for instance, we found ourselves in military complications with other Powers beside Russia. Italy and France were Mediterranean Powers, and they, surely, had as great interests, and as great susceptibilities in the Mediterranean as ourselves? Well, had we improved our position with regard to them by this sudden, this underhand—he had almost said this surreptitious—acquisition of Cyprus, which, however, he confessed was better than the violent seizure of the Island originally contemplated? [The CHANCELLOR of the EXCHEQUER dissented.] Well, he should be glad to hear him deny that the violent seizure of Cyprus was originally contemplated. It had been stated that it was, on very high authority in "another place"— he . meant the authority of the Earl of Derby—and if the Earl of Derby's statement was inexact, he should be glad to know what the proposal actually was which had been cut short by that noble Earl's secession from the Cabinet? As it was, our acquisition of Cyprus was absurd; it had not been reasoned out, and could lead to no logical conclusion whatever. At the same time, as he had said, he was glad to say it was only a faint and inferior copy of a project for seizing the Island by means of an expedition which the Earl of Derby had termed piratical.

THE CHANCELLOR OF THE EXCHEQUER

The hon. and gallant Gentleman must excuse me, but he is entirely mistaken on that subject. No such plan was ever agreed upon by the Government.

SIR HENRY HAVELOCK

accepted the explanation, such as it was, though it only left matters in greater doubt and obscurity than before. It would have come with greater force if the right hon. Gentleman had stated what the proposition entertained by the Government at one time in regard to Cyprus actually was. To come back to Cyprus itself— and, if he was not mistaken, they would come back to Cyprus very often within the next few years—if it was to be used for the concentration of troops from all parts of our Dominions, where were those troops to be landed, and for what purpose? He maintained, and always would maintain, that if the object of the Government was to lengthen the chain of their Mediterranean positions, so as to strengthen themselves in the Levant, in view of certain military contingencies which might arise, a more generous and more liberal way of attaining it, and one more in accordance with the policy of this country during the past 20 years, would have been to have used their influence in the Congress at Berlin to obtain the transfer of the Island of Crete to Greece, to which it properly belonged, and to which it must eventually go—

THE CHAIRMAN

pointed out to the hon. and gallant Member that he was speaking somewhat wide of the Question, which was that a sum not exceeding £2,000,000 be granted to Her Majesty.

SIR HENRY HAVELOCK

Quite so. It was to that Question that he was addressing himself. If, he repeated, the object of the Government had been to obtain some equivalent for the expenditure now incurred—if their object had been to strengthen themselves in the Mediterranean, they might have secured, by negotiation or purchase, or other legitimate means, a position in the Peninsula of Suda, in the Northern part of the Island of Crete, and also possession of some point further east on the Syrian coast, or elsewhere. They would thus have established themselves east and west in the Mediterranean on a line of unassailable and self-supporting fortresses, without any of the responsibilities attaching to Cyprus. Now, he yielded to no man in that House or the country— and he thought he might say so without egotism, and without being called upon to produce proofs of it—in his desire to uphold, in its strongest and most developed form, the honour and integrity of our Empire, militarily and politically; but he maintained that the Government had not only committed a great blunder in the policy they had pursued, but that they had done what was calculated to frustrate their own views in every possible manner.

ADMIRAL SIR WILLIAM EDMONSTONE

rose to Order. He submitted that the hon. and gallant Member was travelling beyond the Question.

THE CHAIRMAN

said, he had more than once pointed out to the hon. and gallant Member that his observations were of a somewhat discursive character, and not immediately connected with the Question before the Committee, which was that of raising Supply.

SIR HENEY HAVELOCK

said, that was exactly the Question he proposed to discuss, and he was not to be deterred from dealing with it by observations from the hon. and gallant Member opposite, of which, he must say, he did not see the point. He was not surprised that the hon. and gallant Gentleman disagreed with him. He was not aware the hon. and gallant Gentleman had ever shown that he had given the subject much study or thought. The mode by which the Government proposed to obtain an equivalent for this money was not only the question now, but would be the question for years and years to come, and he maintained that that mode was a futile one, and of all modes the least calculated to secure the object they had in view. For what had they done? They had imposed, as they believed, a check upon the advance of Russia in Asia Minor. But the effect of that was merely to warn Russia off a line on which, by no possible combination of circumstances, could she do us the slightest harm, and to make her concentrate her attention on two other lines to India still open to her—lines from which we were entirely shut out. Hence his contention that the offensive challenge thrown out by the Government to Russia would only tend to frustrate the policy they wished to carry out. And this was to be the outcome of an expenditure which, great at present, would be immeasurable in the future. Very different would have been the results if they had taken the course indicated by himself and others, in the first instance, in respect to Turkey. They would have placed the British Empire relatively in a much stronger financial position than it now occupied, and they would have gained the support of a united country. That was what the Government might have done in the month of December, 1876, and again in the month of January of the following year; and when hon. Gentlemen opposite had had time to reflect upon the consequences, financial and otherwise, which they had entailed upon the country by having departed from their policy; when the sound of this nourish of trumpets had died away; and when they had to go, day by day, and week by week, and month by month, through the painful process of paying the bill, he trusted that it might teach them a little moderation, and that they would not be so ready to cast imputations upon those who happened to differ from themselves in political opinion, but that they would have the generosity to acknowledge that they also had been actuated by a spirit of equal political wisdom and patriotism with themselves.

Resolution agreed to.

Motion made, and Question proposed, That the said Commissioners may raise such sum by Exchequer Bonds, Exchequer Bills, or Treasury Bills, or by either, or by all of such modes.

Resolution agreed to.

Motion made, and Question proposed, That the principal of all Exchequer Bonds which may be so issued shall be paid off at par, at the expiration of any period not exceeding three years from the date of such Bonds.

MR. E. JENKINS

called attention to the fact that his hon. and gallant Friend the Member for Sunderland (Sir Henry Havelock) had risen to address the Committee, when he was stopped. He (Mr. Jenkins) wished to get some information from the Chancellor of the Exchequer, and as he was not in his place, he begged to move that Progress be reported.

Motion made, and Question proposed, "That the Chairman do report Progress, and ask leave to sit again."— (Mr. E. Jenkins.)

THE CHAIRMAN

desired to point out that no hon. Member rose to address the Committee, and he therefore put the Question.

SIR HENRY HAVELOCK

remarked, that though he was prepared to bow to the decision of the Chair, he certainly conceived that he was in possession of the House; and he could not but think that the proceeding by which he had been cut short was not entirely in accordance with usage.

THE CHAIRMAN

said, the hon. and gallant Baronet had entirely miscon- ceived the circumstances. He called upon another hon. Member to continue the debate; and that hon. Member subsequently not rising, and there being no one in possession of the House, it was his duty to put the Resolution, which he did.

SIR HENEY HAVELOCK

begged to point out that he had not concluded his observations, nor had he any intention of doing so.

SIR HENRY SELWIN-IBBETSON

rose to Order. This was an attack by the hon. and gallant Member on a decision of the Chair. The Chair had decided that the hon. and gallant Member had concluded his remarks, and the Chairman had stated that he called on another hon. Member to continue the discussion. In the circumstances, he must appeal to the Committee to support the Chairman against the direct attack which the hon. and gallant Member had made upon the Chair.

SIR HENEY HAVELOCK

thought it must be entirely a matter of opinion as to whether he had concluded his remarks or not. Surely, on that point, he was himself the best judge?

MR. GREGORY

said, he was sitting-next to the hon. and gallant Member for Hereford (Colonel Arbuthnot). The Chairman certainly called on that hon. and gallant Gentleman, and then left the Chair. The hon. and gallant Member for Hereford was in possession of the House, and clearly he could not have been called upon unless the hon. and gallant Member had sat down. He might add that he distinctly saw the hon. and gallant Member for Sunderland resume his seat.

MR. CHILDERS

said, he was listening with great attention to the remarks of the hon. and gallant Member (Sir Henry Havelock), and he must say that he was under the impression that he had finished his observations; but he wished to point out to his hon. and gallant Friend that he was by no means precluded from making any observation he thought fit at a subsequent stage, or indeed on the Resolution now before the Committee.

COLONEL ARBUTHNOT

said, he should not have attempted to rise had he not been under the conviction that the hon. and gallant Member had concluded his remarks. The remarks which he had himself intended to offer would have been of so short and comparatively so unimportant a character; that he did not think it worth while to trouble the Committee with them.

Motion, by leave, withdrawn.

SIR HENRY HAVELOCK

said, he had no intention of sitting down when the Chairman went out. He had only turned round to look for his notes. He would postpone his further remarks until another stage.

Resolution agreed to.

Motion made, and Question proposed, That the interest of all such Exchequer Bonds shall be paid half-yearly, and shall be charged upon and issued out of the Consolidated Fund of the United Kingdom, or the growing produce thereof.

MR. E. JENKINS

said, he did not think that these Resolutions ought to be allowed to pass until some answer had been given to the question which had been put on his side of the House, and which had been treated with perfect silence by Gentlemen on the front Bench opposite. That question was, whether the Anglo-Turkish Convention was a real Convention or a sham? Prom what had taken place that night, it would appear to be a sham. He thought it must be plain, from the manner in which the Chancellor of the Exchequer had brought forward the Supplementary Budget, that it was not the intention of Her Majesty's Government to do anything real in relation to that Convention. They were entitled to ask whether that was so or not? As the Budget stood, they had every reason to hope that they were not going to do anything. There was no proposal to increase the means of information respecting the Asiatic Provinces of Turkey; they were to have no more Consuls. If that was the case, surely hon. Gentlemen opposite would have their eyes opened to the true nature of the transaction which had been entered into secretly by the Government, and which had cost the country some £6,000,000 odd?

MR. GREGORY

thought it was very unreasonable on the part of the hon. Member for Dundee (Mr. E. Jenkins) to expect the Government to bring in a Supplementary Budget for the administration of Asiatic Turkey. What the Government had done was to enter into a Convention with Turkey, in which the latter guaranteed that she would introduce certain reforms into Asia Minor, and it was only fair to wait to see whether those reforms were executed. It was not necessary for this purpose that the Government should inaugurate a system of espionage throughout the Asiatic Provinces of Turkey. All they had to do was to lay down a certain scheme of reforms for the Turkish Government, and to see that it, or something like it, was put into execution within a reasonable period.

MR. J. COWEN

said, his hon. Friend the Member for Dundee was somewhat difficult to please. He complained of this Convention with Turkey, the ground of his argument being that it was an objectionable instrument, which would lead this country to a great expense.

MR. E. JENKINS

wished to explain that his hon. Friend had misunderstood him. What he pointed out was that the Convention was either a sham or it was not. If it were a sham, the Government would not do anything under it; and if it were not a sham, the Government ought to have brought forward some proposals for carrying it into effect.

MR. J. COWEN

said, that if the Convention did not incur any responsibility it ought to be a source of satisfaction to his hon. Friend. If it did incur expense, it would a source of dissatisfaction to him. As he (Mr. J. Cowen) understood it, the proposition of Her Majesty's Government was that certain reforms were to be instituted in Asia Minor. Those reforms could not be carried into effect in a month, nor even in a year. Information must be obtained, and upon that information action must be taken. The Convention had not been very long concluded, and it was unreasonable to expect that any Government should be in a position to come to the House at that time and put on the Table an elaborate scheme for the reform of the Turkish Provinces in Asia. A proposal had been submitted for defraying the expense of the proceedings which the Government had already undertaken, and when the scheme for the complete reformation of Turkey was before the House, he had no doubt that they would have from the Government an exposition that would meet the requirement of his hon. Friend. Meanwhile, it was unreasonable to find fault with any Administration, because it was not able at once to submit complete proposals.

THE CHANCELLOR OF THE EXCHEQUER

I am sorry to say I was not in the House at the time when the hon. Member for Dundee (Mr. E. Jenkins) was speaking; but I suppose I am rightly informed as to what he said by the observations of the hon. Member for Newcastle (Mr. J. Cowen). I understand him to say—"Either this is a real Convention or a sham; but if real, that it ought to be immediately followed up by some considerable proposals on the part of the Government." I venture to say, in the first place, that the Convention is a very real Convention, and that it was adopted with the substantial intention of Her Majesty's Government to give, in a serious and solemn manner, effect, as far as they can do so, to the proposals of that Convention. No doubt we have taken a very serious liability by undertaking that we shall defend Turkey against the invasion of Russia. In order to enable us to perform that, we require to be put in a position which may give us advantages in the event of our being called upon to act in a military manner. Although I cannot give any opinion of my own, we have been advised that the Island of Cyprus will afford very considerable advantages for concentrating and massing troops if necessary, and for retaining a position which will be of strategical value in the event of going to war. But we have other objects, and to me those objects are even of greater importance than the strategical value of Cyprus. We have agreed that the Sultan shall undertake to introduce into his Asiatic Provinces reforms which shall be agreed upon between him and ourselves, and we have, as we think, a considerable vantage ground in the possession, or rather in the occupation, of Cyprus, for seeing that such reforms as may be agreed upon shall be carried out. And I may also point out that this position gives us great advantages in illustrating the reforms that we ourselves shall wish to see effected. You may go into a country like Turkey, and say such and such reforms shall be made; but if you are able to point to territory in your own occupation where you are actually carrying out those same reforms, no doubt they would be more readily adopted in view of the improved condition of the country in which they had been introduced. The hon. Member said — "If these are your views, why don't you come forward with some large scheme to give effect to them?" We cannot evolve these schemes from our internal consciousness. The first thing we have to do is to satisfy ourselves with the actual requirements of Cyprus itself, and the expenses necessary to be incurred. All that will take time. And hon. Gentlemen will see at once that it is not a matter that one can settle by sitting down and considering it alone. You must have proper inquiry made. That is what we are making; and the small sum of £8,000 which we are asking on account for Cyprus will be applicable to charges of that sort. With regard to the Military Service, the Secretary of State for War has made what he considers to be a sufficient provision for the occupation of the Island. It is not thought necessary to retain anything like a large Force in the Island; and as soon as it is convenient and proper to do so, the bulk of the Indian troops will be sent back to India, and but a comparatively small Force will garrison the Island, except when there may be occasion to retain a larger Force for operations which are not now contemplated. We believe we have made an adequate provision for the remainder of the year, and, indeed, doubt very much whether it will be possible to spend as much as the £8,000 in the particular objects we have in view. As far as the future is concerned, we shall be in possession of further information before we ask for another grant, by which time, I have no doubt, we shall be able to come forward with some reasonable proposal. To put down on paper something evolved from our own internal consciousness would, at the present moment, only have the effect of deluding the House. We certainly possess a good deal of information concerning Cyprus; but we have not that information in a shape which enables us to put it into the form of an exact Estimate.

MR. WHITWELL

said, the right hon. Gentleman was beginning to vote money on account of this new acquisition of Cyprus. He (Mr. Whitwell) thought fresh and important questions were raised by the Vote. In the first place, it was decidedly a scandalous thing that we should enter into a Convention with Turkey, undertaking to defend her against attack. But Cyprus had been conceded to us, and we might look upon it as a quid pro quo for the services we had undertaken to perform. ["No, no!"] They had, at any rate, acquired Cyprus, and were going to spend money upon it; and it was perfectly clear that something had been given to us in exchange for something to be done, which constituted exactly a quid pro quo in his view. The right hon. Gentleman had told them most plainly that in obtaining that place they had obtained it without any knowledge of its character, inasmuch as they had now undertaken to inquire into its resources, character, conditions, and details. He trusted that the £8,000 about to be voted would be sufficient for that purpose. But he ventured to ask whether it was really the case that we had already appointed a Governor, with a salary of £5,000 a-year? Every morning they saw in the newspapers reports of gentlemen being appointed to become Superintendents in the Island, and have the control of certain Departments—one being appointed to the Customs, another to a different branch of the Service. He thought he was right in saying that the system of government about to be established in Cyprus was a joint system of government by three Departments of the State. If he was wrong, it was only through want of information; and if the Foreign Office, the War Office, and the Colonial Office had nothing to do with it, perhaps the right hon. Gentleman would be kind enough to inform the Committee under what Department the Island was to be placed? The right hon. Gentleman spoke of it as a strategical point of occupation. He (Mr. Whitwell) asked him, in that case, whether the establishment of military depots and fortifications were not absolutely necessary as a consequence of our adopting a strategical point of occupation? Surely, the Surveyor General of the Ordnance or War Department would have something to do in the mounting of guns in the Island? The garrison might be only 2,000 men; but the Island would be visited by ships of war that must be communicated with, and already £6,000 was put down for the establishment of telegraphic communication. It was, therefore, perfectly clear that £8,000 was a very small sum to be voted before the end of the financial year for the administration of Cyprus. If he, and hon. Members who were of the same opinion as himself, were wrong, it was entirely owing to the want of information. He was obliged to ask the Chancellor of the Exchequer whether, when they came to the voting of money, it should be for some impalpable object? The British taxpayer had a right to have a real statement of the grounds upon which he was called upon to pay money. He quite admitted the great importance of the second point referred to by the right hon. Gentleman —namely, the influence of this Empire upon the Turkish nation. But he very much regretted that we had been the first to exact territory from the Turks in their Asiatic Provinces. He thought that a most important question. The noble Lord the President of the Board of Trade (Viscount Sandon) had told them, in a manner which was poetical and charming, his prospects and hopes of the great benefits which would follow our interference in the Asiatic territories of the Porte. But he ventured to doubt that our advice would be influential, notwithstanding our position in the neighbourhood of Asia Minor. Did the right hon. Gentleman expect to change the state of things existing in Turkey in Asia by the mere circumstance of having a Settlement near the coast? He did not see how the categorical question of his hon. Friend below him (Mr. E. Jenkins) could be answered; but, before going back to their constituents, hon. Members should be provided with some further information, which he trusted would be supplied before the discussion terminated.

SIR GEORGE BOWYER

said, we had certainly assumed an onerous responsibility in undertaking to guarantee the Turkish Dominion in Asia against Russia, and for that purpose it was necessary that we should have some position in that portion of the Mediterranean nearest to Turkish territory. He had always regretted that we had given up the Ionian Islands, for in doing so he believed we had made a great mistake. As it was necessary to have some such position, they had fixed upon Cyprus as the best for the purpose of carrying out the Guarantee to Turkey. We had, therefore, occupied the Island, which would now become a good model for the Turks in the administration of their own affairs. We might, as he believed, in a short time, by good management, make Cyprus a rich and happy country, as well as a model country for that part of the world. We should have the right to say to the Turks—"See what we have done in Cyprus; do the same in your Dominions." It had been assumed that we had undertaken to govern the Eastern Possessions of Turkey; but we had undertaken nothing of the sort. Hon. Gentlemen opposite had complained that Her Majesty's Government had not laid before the House a full plan for the reforms to be made in the government of the Turkish Dominions in Asia. It was impossible for Her Majesty's Government or the Opposition either to do anything of the sort. We had not undertaken to prepare a plan; but we had told the Porte that it must govern those Provinces in such a manner as to insure their improvement. That was all they had undertaken. He had had a conversation a few days ago with Hobart Pasha, an old friend of his, who had told him that "the Turks were people who can be led, but could not be driven; and that if you tried to force them you could do nothing with them." He said, moreover, that "they were very reasonable people, and that the Sultan was not a sensualist, as was often supposed, nor a bigot; but a sensible man, who sees the necessities of the times." From all he could learn, he (Sir George Bowyer) believed the Sultan to be a very intelligent man.

THE CHAIRMAN

I think the hon. and learned Member for Wexford is travelling a little beyond the Question before the Committee.

SIR GEORGE BOWYER

stood corrected; although, at the same time, he thought that what he had said had a fair application to the remarks of the hon. Gentleman opposite, which he was not called upon to withdraw. He said we were undertaking to govern without producing a plan for the government of the Turkish Provinces.

MR. E. JENKINS

had said nothing of the kind.

SIR GEORGE BOWYER

had certainly understood the hon. Gentleman to speak in that sense, and in answer thereto, he had said that we had not undertaken to govern those Provinces; that they were to be governed by the Porte; but we had every reason to believe that the Porte would govern them in accordance with the undertaking which the British Government had given. He believed that we had only undertaken to prescribe what ought to be done in a general way, leaving to the Porte to carry out the system which might be found to be necessary; and that the experiment would prove to be thoroughly successful.

SIR HENRY HAVELOCK

said, that, for his part, he regarded the explanation which they had succeeded in obtaining from the Chancellor of the Exchequer as throwing considerable light upon the question. For instance, they had been told that great advantages were anticipated from the good example we should set the Turks, by our mode of governing the Island of Cyprus. He would like the Chancellor of the Exchequer to tell him what would be the difference between the example of good government which we had established for so many years in Malta, and that proposed to be set up in the Island of Cyprus? The position of Malta was totally different in every way from that of Cyprus; and, for that reason, he differed from the policy which Her Majesty's Government had adopted. Malta was a strategical point; Cyprus was not a strategical point. Malta was self-contained, and when it had been provisioned and garrisoned it could be left to itself for six months; but Cyprus was in no such position. It was an Island of about 140 miles in length, and 60 in breadth; and it was not at all improbable that in the event of competition between England and Russia, or any Mediterranean Power, which was quite possible, their whole military and naval efforts would have to be directed to the safety of Cyprus alone; for which reason it was totally valueless, and not to be compared with a point on the Asiatic coast, which might be made a complete fortress in itself. He had gathered a great deal of comfort from what the Chancellor of the Exchequer had been kind enough to express. What the English people desired to know was what was the nature of that great policy of reform in Asia? Did it mean anything or nothing? If we were to carry it on in opposition to the objections that might be raised to it, we should be unnecessarily straining our relations with the Porte, or else the policy was a mere sham, for no money had been taken for the purposes that were to be carried out. He believed the Chancellor of the Exchequer had himself told them that the three points on which it was intended that the reforms in Turkey should turn were the administration of police, the purification of justice, and the rectification of the revenue. If these matters were left to the Turks they would end in failure; if we attended to them ourselves they would entail great expense. Her Majesty's Government had told them that they were going to undertake the reform of Turkey, and he yielded to no man in the desire that Turkey should be thoroughly reformed. But he gathered from the explanation of the Chancellor of the Exchequer that they did not propose either then, next year, or at any future time, that the policy which had been adopted without, at all events, asking leave of the English people, should not become a charge upon them. He should be very glad to hold the Government to the promise that this great policy was not to be carried out at the expense of the ratepayers. That promise had been given definitely, and he was perfectly satisfied.

MR. NEWDEGATE

said, he quite understood the considerations which had induced Her Majesty's Government to enter into the Convention of Constantinople, whereby the occupation of Cyprus had been ceded to this country. He did not conceal from himself the weight of the liabilities that Convention might entail on this country; but two considerations had principally decided the vote he gave on Friday against the Resolutions proposed by the noble Lord the Member for the Radnor Boroughs. He considered the occupation of Cyprus desirable—first, because the Russian Armies had not yet been withdrawn from the vicinity of Constantinople; and, secondly, on account of the fact that the Port of Batoum had been acquired by Russia, not by conquest, but by cession on the part of the Turkish Government. The possession of the Port of Batoum by Russia might, and probably would, enable her to command, under certain circumstances, the Eastern outlet of the Straits—the mouth of the Bosphorus in the Black Sea. He therefore thought it of great importance to the interests and influence of this country to have some station nearer the Dardanelles than Malta, for he had always considered the wholesale abandonment of the Ionian Islands by this country a very questionable measure, so far as it affected her influence and interests in the East; and he felt this without the slightest jealousy of the Kingdom of Greece, at the establishment of which he rejoiced; but, so far as the interests of England were concerned, he was distinctly of opinion that the cession of Batoum to Russia, and the command Russia thereby obtained of the Eastern outlet from the Bosphorus, rendered it highly important that England should have some naval station within easy distance of the entrance to the Dardanelles, without incurring the inconveniences that had always attended our naval occupation of the Sea of Marmora.

MR. MUNTZ

agreed, in one respect, with his hon. Friend, and that was as to the expediency of giving up the Island of Corfu. He had come late into the House, and did not understand the object of that discussion. He thought they had had it all last week, and he had had enough of it, although he had no opportunity of expressing his views. The House had talked the matter out, and ought to be satisfied without going any further. He understood the discussion now touched on the Island of Cyprus, and the money to be expended upon it. He thought that had been disposed of by last week's discussion. The House had determined, by an immense majority, in favour of the Asiatic policy of the Government. The House had decided it, and he did not see any use in opening the question again. The Government had undertaken great responsibility, and it was for them to carry out that responsibility. It was for them to carry out their undertaking, both as to the Asiatic Convention and the acquisition of the Island of Cyprus. He could not agree with the hon. Member opposite (Mr. Newdegate), that the Island of Cyprus was a good position for the defence of the Straits. It might be of great service to point out to the inhabitants of Cyprus and the Asiatic Continent how a nation could benefit by being well governed. [Major O'GORMAN: By England?] No place had benefited more by the good government of England than the place the hon. and gallant Gentleman came from. [Major O'GORMAN: It is not true.] The Go- vernment had undertaken to regenerate, not only Asia Minor, but Syria. He had had great pleasure in listening to the romantic remarks of the noble Lord the Member for Liverpool (Viscount Sandon), when he spoke of the regeneration of Asia Minor. But these were dreams. It would be for the Government to press what influence they had upon Turkey, if it was possible to have any influence on a body of men who were accustomed to be governed in a particular way. It would be almost impossible to get good government, unless they took the French course of landing troops and hanging a tyrannical Pasha. That would be expensive; but it would be the only way to regenerate Turkey. It came to this—that you would have to resuscitate a corpse. You might galvanize it, and give it a living expression for a moment; but the instant the battery was taken away, your corpse would return to its original position. He did not think it was possible to reform Turkey without re-organizing it altogether, and that was a task so gigantic that he could not imagine any man should wish it to be carried out, or any Government dare to attempt it. As, however, the House had endorsed the Treaty of Constantinople, the responsibility rested with the Government, and it would be for them during the Recess to show their hands as to the practicability of the promised reforms.

MR. E. JENKINS

could only point out to the hon. Member, that if he had been in the House he would have understood what the question was. He must ask what the Government were going to give the people of this country for their money? The occupation of Cyprus was all they got for their £6,000,000. The right hon. Gentleman the Chancellor of the Exchequer had satisfied them thus far. The Government had come down and asked for a Supplementary Budget, and yet no provision whatever was made for any serious action in Asiatic Turkey. The right hon. Gentleman virtually said that the Government intended to do nothing in Asiatic Turkey except to exert a moral influence on the subjects of the Sultan. If he did not say that, he must mean that the Government were going to undertake something more. They must have an organization in view. If that was the case, they had not treated the House fairly, by not giving an idea of the organization. They had not informed the House of anything that would be necessary for carrying that organization out. He, therefore, accepted the right hon. Gentleman's assurance that all this was simply a Convention on the part of the Sultan which we did not mean to enforce, and that would have no result. [The CHANCELLOR of the EXCHEQUER: I entirely disclaim that interpretation.] Then this discussion was justified. Let them know what the Government was going to do. They had asked the House to postpone inquiry till next year. The Chancellor of the Exchequer had, however, shown that they meant to spend the money. Surely, the House ought to know for what purpose it was wanted, or they ought not to have voted the money.

SIR PATRICK O'BRIEN

said, he had taken part in the great debate, and be should not now pursue a discussion on a subject which he thought received sufficient consideration last week. In the quarter of an hour he then occupied be ventured to express not only his own dissatisfaction, but that of hon. Gentlemen opposite, who were mute as if they were at a funeral. The question they were now discussing was a question of money. When the noble Lord (the Marquess of Hartington) was addressing the House—

THE CHANCELLOR OF THE EXCHEQUER

I must rise to Order. I do not think it is in Order to refer to a previous debate.

SIR PATRICK O'BRIEN

said, he would accept the intervention of the Chancellor of the Exchequer, and would confine himself to the question. He would suggest to the Government that they should appeal to the country before the humbug of this Cyprus business became appreciated, and before the glamour of the last fortnight should be dissipated.

MR. HOPWOOD

would not only support the proposed inquiry, but would press for further inquiry as regarded the intentions of the Government in Cyprus. Of course, the Government had some idea of what was to be done in Cyprus besides sending troops. Looking at the terms of the Convention, he found it was contemplated that land might be purchased compulsorily at a fair price. Did the Government mean to purchase land? It appeared that Sir Garnet Wolseley had some difficulty in finding a house. Did the Government mean to purchase a considerable estate for the purpose of Government buildings for providing the Staff, and so on? Then, he understood the sanitary condition of the Island was very bad. Surely, the first course the Government would take would be in the direction of preserving the health of the troops? A great deal more than £30,000 or £40,000 would be required for these purposes. Did the Government mean to say that they were not going to apply themselves to this matter? Surely the Government could give reasonable information, and might tell the House whether they were in a position to tell the probable cost of these things, and the extent to which they wished to go?

SIR GEORGE CAMPBELL

said, that two or three hours ago he had said the same thing as the hon. Members had just said in a better manner. He was astonished to hear the Chancellor of the Exchequer say that they should not be able to spend the sum taken in the Estimates for Cyprus in the coming year. He trusted, when the matter was further considered, there would be fuller information given as to the course to be taken in regard to the administration of Cyprus.

Resolution agreed to.

Resolutions to be reported To-morrow;

Committee to sit again To-morrow.