WAYS AND MEANS—THE BUDGET.

HC Deb 29 May 1846 vol 86 cc1429-72

House in Committee of Ways and Means.

The CHANCELLOR OF THE EXCHEQUER

spoke as follows: Sir, I avail myself of this the last opportunity, previous to the separation of the House for the holidays, for the purpose of bringing before them that annual statement of the finances of the country which is expected from the individual who holds the situation which I have the honour to fill. I am afraid the statement I have to make will have but little attraction, except from the general bearing of the subject with which it has to deal on the welfare of the country. I am not able to embellish it with anything novel, since the House has already, in previous discussions, been made acquainted with the details of those parts of the subject which are of most interest to the community. The House has already been informed by my right hon. Friend the First Lord of the Treasury, of the reductions then intended to be made in the different duties of Customs. Those reductions have been embodied in an Act which has already passed this House, and which now only waits the sanction of the other branch of the Legislature in order to be carried into full operation. It is unnecesary for me also to enter into detail as to the expenditure of the country, because the House has before it, in the Estimates already on the Table, the full extent of the augmentations which the Government has thought it necessary to submit for adoption in the different establishments. Nothing, therefore, remains for me but to bring into one general view the details already before the House as to the revenue and expenditure; and to show, from the results, how successful have been those measures which the Government, in former Sessions, recommended for the adoption of Parliament, to which Parliament have given their sanction; and on the continued operation and progressive influence of which I believe the financial prosperity of this country will mainly be found to depend. I am not sorry to have this opportunity of dispelling some of those gloomy apprehensions which have been expressed by several hon. Friends of mine in this House, as to the effect which the recent commercial changes might produce on the revenue of the country. Statements equally alarming have been circulated out of this House by those who profess to lead public opinion; by some, from ignorance; by others, I am afraid, from a less pardonable motive; but from whatever cause proceeding, I think it not unimportant that they should be corrected, and that any false statements which may have been made should be contradicted. I shall proceed to lay before the House, in the usual order, first, what have been the actual receipt and expenditure during the past year; and I shall found upon that statement a calculation of what may be the probable receipt and expenditure of the year on which we are already entered. The first point to which I shall draw the attention of the House relates to the calculations made by my right hon. Friend (Sir R. Peel), when he opened this subject in the last Session of Parliament; and the results as compared with the estimates then formed. It will be recollected by those who are accustomed to pay attention to such subjects, that my right hon. Friend, after proposing great reductions in the Customs, stated his belief that the total revenue which would be received in the course of the year would amount to 49,762,000l. Of this revenue it was estimated that from Customs would be derived 19,582,000l.; from Excise, 12,580,000l.; from Stamps, 7,100,000l.; from Assessed Taxes, 4,200,000l.; from the Property Tax, 5,200,000l.; from the Post Office, 700,000l.; from Crown Lands, 150,000l.; and from Miscellaneous, 250,000l.; making a total, as I have already stated, of 49,762,000l. Those hon. Gentlemen who have looked at the balance-sheet laid a short time ago on the Table of the House will find that the Revenue for the year, independently of a sum received under the Treaty with China, instead of merely coming up to the estimate of 49,762,000l., amounted to not less than 51,250,000l. Comparing the estimated with the actual produce, (I give the round numbers,) the Customs' estimated at 19,582,000l., actually produced 19,768,000l.; the Excise, estimated at 12,580,000l., produced 13,296,000l.; the Stamps, estimated at 7,100,000l., produced 7,660,000l.—an increase, perhaps, indicating more than any other, the great extent of commercial transactions in the course of the year, and the multiplication of all those dealings throughout the country, which are the great contributors to that particular branch of the Revenue. The taxes attained as near as possible the amount at which they were estimated; namely, 4,200,000l. The Property Tax fell to some extent; the produce having been 5,084,741l. instead of 5,200,000l., at which it had been estimated; but this did not arise from any falling off of income, but mainly from the circumstance that repayments, which had been postponed, were then made to a larger amount than belonged to the particular year; persons entitled to a return of the tax, which in the first instance they were required to pay, having now acquired a knowledge of the forms, and coming immediately for payment after the receipt of the notices. The Crown lands and Miscellaneous attained nearly to the amount of the estimate made by my right hon. Friend. The Post Office, which was estimated at 700,000l., produced no less than 791,000l., indicating, equally with the Stamps, the great activity of trade during that particular period. The result, on the whole, has been that, taking, in addition to that receipt of ordinary revenue, the sum received under the Treaty with China, being 750,859l., the total receipt during the past year, which was estimated at 49,762,000l., has been 52,009,324l. I think the House will agree with me that the anticipations of my right hon. Friend in the last Session of Parliament have been fully realized. We next come to what has been the expenditure during the year. The estimate which was made as to the charge on account of the National Debt, and other charges on the Consolidated Fund, amounted to 30,795,858l.; the actual expenditure has been 30,607,661l. This diminution of charge has arisen from various causes, from some modifications in reference to the charge of the debt and certain small reductions of the permanent charges imposed upon the Consolidated Fund. The Expenditure on the services for the year, Army, Navy, Ordnance, and Miscellaneous, amounted within 60,000l. to the estimate of the right hon. Gentleman—the estimate being 18,736,591l., and the actual expenditure 18,792,506l. The result as regards the whole Receipt and Expenditure for the Year was, that while the actual Receipt amounted to 52,009,324l., the actual Expenditure amounted to 49,400,167l., leaving a surplus of 2,609,157l.; from which is to be deducted an item which appears in the public accounts sometimes on the side of Expenditure, and sometimes on the side of Receipt. This year it has fallen upon the side of Expenditure. The payment to which I allude is that for the Unclaimed Dividends, of which the amount paid has been more than the sum received by 228,557l. This sum of 228,557l. must, therefore, be deducted from the surplus, already stated, of 2,609,157l., leaving a clear surplus of 2,380,600l. It will be recollected that my right hon. Friend, when he made his statement last year, anxious not to create too sanguine an expectation as to the effects of the measures he then proposed, stated the expected surplus at a very moderate amount. It may also be in their recollection, that at that time apprehensions of a very serious nature were entertained as to whether the reductions of revenue then made were such as would tend, by encouraging increased consumption, to repair the loss. I do think, that to those who expressed such apprehensions, the statement I have now made must be a satisfactory answer. It must give them additional proof—if proof is wanted—of the elasticity of the resources of this country. It must give proof that if, in the proper direction, you remove any weight which presses down the public energies, you will sooner or later find a satisfactory result, not only in an augmentation of revenue, but in increased comfort and happiness among the great body of the people. The course taken with respect to the finances of the present year is in strict accordance with that which was adopted with respect to the preceding year; and I have now to state to the House my calculations with regard to future revenue and expenditure, with this additional advantage, that I am able more confidently to anticipate the future, from the observation and the knowledge of the past. Now, in making an estimate of the revenue of the year, the first point to which attention is necessarily directed is, the Customs' revenue of the country. The Customs produced in the last year, as I have already stated, a sum of 19,768,000l. By the measures which have been in this Session passed through the House, a reduction of duties has taken place to the amount of 1,041,000l. But no hon. Gentleman who either considers what is past, or is even aware of the ordinary principles of finance, would suppose that the revenue of the succeeding year is to be calculated by deducting from the revenue of the last year the amount of the duties which it is proposed to subtract; under any circumstances, a large reduction of that amount would have to be made, on account of increased consumption of those articles upon which the duty has been merely reduced, and increased consumption of other articles which remain subject to taxation in consequence of the total abolition of duty upon a great variety of articles. In calculating, therefore, the reduction that should be made from the last year's revenue on account of the abolition of duties during the present year, I must be guided in some degree by the experience of the past; and I find, upon reference to the reductions which have been previously made, that if I were to take the loss of revenue on the Customs at two-fifths of the amount of the duty which is repealed, I should exceed that which has been found to be the loss upon the periods during which we have for some time past been acting in the same direction upon the Customs' revenue. I should, therefore, not feel authorized in deducting from the revenue of the Customs a greater sum than 400,000l. on account of the reductions which have been effected. That would leave the Customs' revenue at about 19,300,000l. But I take it at a greater amount than that; and I will state to the House the ground of my doing so. I find, on reference to the most experienced observers of the course of trade, that there is every anticipation of the continuance, during the rest of the year that has begun, of the prosperity with which trade has been attended, with some slight interruption, up to the present period. I receive from every one of the outports the most satisfactory statements as to the prospects of the revenue for the ensuing year. I am called upon by all the different officers of those ports, confirmed by the authority of those who superintend the business in London, not to confine my augmentation of duty to the 200,000l. which I propose in addition to what I have already stated, but to carry it to a much greater extent; but I am always anxious to be on the safe side in these cases, and I limit my calculations to such a sum as shall raise the Customs' revenue to 19,500,000l. What is the report that I receive from those different ports? Is it that the revenue is falling off, or has already fallen off, in consequence of the operation of these reductions, during the period that has intervened since they were made? On the contrary, I find in some of the leading ports of this country, that during the last six weeks—weeks, be it observed, of considerable uncertainty, which is dwelt upon by those who make these reports as creating great hesitation among those engaged in commerce—so far from a diminution of revenue during those six weeks, that is, from the commencement of the financial year up to the present time, there has been in many of those ports an excess, in many an equality of revenue, and in those in which there has been a deficiency it is principally accounted for by the state in which the corn trade has been; and these accounts are coupled with a general expectation that the revenue is on the advance, and will continue to increase. I mention the last six weeks, particularly, as justifying me in my view of augmentation of revenue, because the House is aware that the duties have been repealed during those six weeks; they were suspended by an Order from the Treasury, upon the Resolution passing this House; and yet, notwithstanding this circumstance, I find that, at Liverpool, at Newcastle, at Leeds, at Port Glasgow, and at Dublin, places in all parts of the United Kingdom, and places of most considerable import, there has been no falling off in the revenue during those six weeks, as compared with the corresponding six weeks of the preceding year; and that there is an expectation, that when the present discussions in Parliament shall have terminated, the revenue will take a spring even beyond what it has taken since the commencement of the year. It is on these grounds that I consider myself justified, notwithstanding the large reductions of duties to which the House has already assented, in taking the Customs' revenue for the present year at 19,500,000l., instead of 19,300,000l., the sum at which it would have been taken if I had, under ordinary circumstances, made a reduction on account of the taxes remitted. The next important branch of revenue is that of the Excise. In that department, it must be remembered that there was, in the past year, a very large abolition of duties, amounting to about 1,000,000l.; and under the head of the duties so abolished, of course, all that the Government before received was lost. But, when those alterations were proposed, it was stated to the House that they were of a nature calculated to give new vigour to industry, to call into life new establishments, to create new employment, and to give to the persons so employed the means of augmenting the other branches of revenue derived from the Excise. It was in consequence of the operation of these causes that the Excise, during the last year, fell only 200,000l. below what it would have been if the glass and auction duties had been continued. With respect, therefore, to the future produce of the Excise, I entertain the most sanguine expectation, founded not only upon a calculation made from reference to the past, but because, in this particular department, we have in some degree the means of knowing beforehand what will be the actual receipts for some weeks to come, (since the duties are charged a considerable time before they are actually paid,) I feel that I may take the Excise for the ensuing year at 13,400,000l., being 100,000l. more than it produced in the year that has lately closed. With respect to the Stamps, from which 7,660,000l. was received last year, I content myself with taking them for the present year at 7,450,000l. Much of the augmentation of duty in that department arose, no doubt, from the multitude of railway companies, which have been so much the subject of discussion in this House; and, as I cannot anticipate that the same extent of railway speculation will prevail during the ensuing year, after the experience which we have had in the past, I think it prudent to deduct from the produce of the Stamps what may fairly be attributed directly to an eagerness for embarking in railways; I therefore deduct 260,000l. With respect to the taxes that remain, I estimate the Land and Assessed Taxes at the amount they have heretofore produced — 4,230,000l. With respect to the Property Tax, I have taken it very nearly at what it produced last year, 5,100,000l.—the assessments under the new Property Tax Act, passed last year, have not yet been received; and I therefore make the estimate without those particular data which would have enabled me to state the amount with nearly perfect accuracy; but I have no reason to apprehend, judging from the general prosperity of the country, that it will fall short of what it was last year. With respect to the Post Office, in which there has been during the last year a very large increase of revenue, it is to be remarked that its progress has not been confined to that year, but has been for some time proceeding gradually — the revenue was in 1842, 610,000l.; 1843,628,000l.; 1844, 699,000l.; 1845, 791,000l. I do not take the same amount of increase for the year on which we have now entered as has taken place in the year whose account has been closed; and for this reason — not because I anticipate otherwise than that this revenue, as additional facilities are given, will continue to present a large annual increase in this the mere account of the receipt; but there are certain improvements which I contemplate in the administration of the Post Office in London which may throw additional expense in the first year upon the public revenue, but which nevertheless will, in my opinion, contribute both to the efficiency and the general character of the department. I am anxious, therefore, to leave a margin for the conduct of these operations, rather than take exactly what, if no alteration or improvement was intended, I should have been inclined to estimate as the next annual augmentation of revenue in the Post Office. I therefore content myself with stating the total sum at 850,000l.; being 60,000l. over that which was received in the course of the last year. With respect to the Crown lands, the revenue to be derived from that quarter will be reduced in the present year, in consequence of certain buildings in course of erection for public purposes, principally the Geological Museum, upon which it is intended to expend a sum of money out of that revenue, which will reduce the receipt to about 120,000l. The Miscellaneous items I will take at nearly the amount of last year, 300,000l. The general result of these several sums, constituting the revenue which I anticipate as likely to be received in the year ending April 5, 1847, is 50,950,000l.; to which will be added in the present year (as there was in the antecedent year) a further sum as likely to accrue under the Treaty with China; and this I have taken at 700,000l., being rather under the amount produced last year; 500,000l. of it has been already received. The total result, therefore, including those extraordinary resources to which I have last alluded, gives the amount of the year's revenue at 51,650,000l. Now, if from this revenue I deducted the charges upon the country during the year that is past, which, as I have already stated, amounted to 49,400,000l., it is obvious that there would be disposable at the end of the year a surplus of no less than 2,250,000l.,—a surplus nearly equal to that which has accrued at the close of the past year, notwithstanding the large reductions of revenue which have taken place during the course of the year. But Her Majesty's Government, having this prospect of surplus before them, thought it their duty to provide for such additions to the several establishments of the country as the present circumstances of the country appeared to them to justify. We have felt called upon to make certain additions to the military force of the country, and to revise the militia system, which will entail some additional expense. We have been further desirous, in consequence of the application of a new power, that of steam, to naval warfare, to increase the expenditure of last year, in order to put the naval department in a state befitting the dignity of the country, and on a footing with the exertions made by other Powers. So with respect to the armament of the navy, and with respect to fortifications generally, we are called upon to conform to the practice of other nations, by having guns of larger calibre and heavier metal. The system adopted by other nations has entailed upon this country, I may almost say, an entirely new armament in different branches of the service; and we did not feel that we could turn to better profit a time of considerable commercial prosperity, or make a better use of the surplus revenue, than by improving our naval and military establishments to the extent shown by the Paper laid on the Table of the House. We have thus absorbed a very considerable proportion of the surplus which remains to be disposed of. The actual addition to the estimates of the year will be best shown when I come to state seriatim the different branches of expenditure which will have to be defrayed out of the amount of revenue I have stated. With respect to the charge for the interest of the debt, which was 28,200,000l. last year, it will be reduced to 28,100,000l. this year; the charges on the Consolidated Fund last year, 2,400,000l., will be increased this year, and amount to 2,550,000l., that increase arising from measures which Parliament has already sanctioned, for advancing from the Consolidated Fund certain sums for public works in Ireland, and for the relief of the inhabitants of districts suffering under scarcity. The total amount of these two charges, which may be called the permanent charge on the country, is 30,675,000l., amounting to nearly the same sum as last year. With respect to the Army, the charge for which in the last year was 6,715,000l. (that being the expenditure—the estimate was considerably less), I propose as the estimate for the present year 6,697,000l., being an increase of above 140,000l. upon the estimate of the preceding year; arising, as I have stated, from the augmentation which it has been necessary to make in the general force of the army, and the proposals which are about to be made to the House with respect to the militia. It is unnecessary for me now to enter into the details. My right hon. Friend the Secretary at War will fully develop them when the time comes for his statement to be made to the House, and I prefer leaving the task in the hands of one who is so much better able to execute it. With regard to the Navy, the estimate last year was 6,943,720l.; in the present year it is proposed to allot to that service 7,521,000l., an increase of nearly 600,000l. in that branch of the public service. That, as I have said, arises from the causes I have briefly stated to the House, the full development of which will rest in the hands of my right hon. Friend the Secretary to the Admiralty, and will, I am sure, be satisfactorily furnished by him. With respect to the Ordnance, the estimate last year was 2,142,000l.; for the present year it will be 2,543,000l.—an increase in this branch of the service to the extent of 400,000l. This arises first from an augmentation in the corps of Artillery, corresponding to that in the land forces, and secondly from an augmentation of that distinguished corps, the corps of Engineers, whose services, not less distinguished in peace than in war, are now called for in every quarter, for civil employment as well as military; and whose engagement in the public service, though occasioning an increase upon the Ordnance estimates, is, I am firmly convinced, a real economy. On the same principle, in the Ordnance estimates will be found an increase in the corps of Sappers and Miners—individuals working under the engineers, and reducing the expenditure of the public works on which they are engaged; this, like the former charge, though apparently an increase on the estimates, will be found, in fact, an economical arrangement. The other portion of the expenditure arises from the repair of certain works which have been for some time more or less neglected, and which at length it was judged advisable, the revenue admitting of it, to repair. The improvement of various fortifications, — the adding to the comfort of the troops, by furnishing them with better barracks, upon which points the details are upon the Table. With respect to the Miscellaneous Estimates, which stood at 3,116,000l. last year, the sum this year will be 3,435,000l.; it appears in the Paper on the Table 3,235,000l.; but I have thought it better to take an additional sum of 200,000l., conceiving that I shall hereafter have to submit to the House an account of sums which may have been expended in Ireland for the relief of the suffering population, and thinking a margin of that kind necessary to meet that particular expense; the amount of it, of course, is a mere matter of estimate at present; but I have thought it right to take what I believe will be sufficient for the object. The Miscellaneous Estimates are also aggravated by the additional charge announced in the speech of the right hon. Baronet at the commencement of the Session, the expense of auditors, medical attendance, schoolmasters of the Poor Law Unions, the maintenance of prisoners, and the charge of prosecutions in the country;—these, however, are all comprised in the statement I have made to the House. The Expenditure, therefore, for the service of the year amounts to 20,198,000l., which, added to the charge for the debt, 30,675,000l., makes the whole amount to 50,873,000l.; and this deducted from the total receipt, 51,650,000l., leaves a surplus for the end of the year of 776,000l.; but of that sum 700,000l. are derived from the money acquired by the Treaty with China. With a very limited surplus independent of the China money we entered upon the year that is past, as we enter upon the present; but I venture with even increased confidence this year to predict that the estimates will be more than borne out by the result, and that the House will, at a future period, have the satisfaction of more than realizing the prospects which are now before it. It is impossible, I think, unless it can be shown to me that there is some great error in the calculations I have made, not to derive satisfaction from the result which these statements establish—not to feel how much is owing to that course which Parliament has of late years thought proper to adopt in respect to the abolition of prohibitory and the relaxation of protective duties, as a means of giving to industry increased energy, and securing to the people at once the means of employment, and of acquiring the comforts and necessaries of life. But in speaking of the past year and of the prospect of the year to come, as a period of no inconsiderable prosperity, I may be told that one single year affords no just criterion with respect to the merits of a financial system; that there may arise fortuitous circumstances and accidental advantages in particular years which may produce a satisfactory result, without affording evidence that it is to the particular system adopted that those results are to be attributed. I admit the force of such an objection, and I admit that, if I argued on one year alone, I should not have a right to claim for the particular course adopted by the Government and by Parliament that degree of merit which, on a consideration of all the circumstances, I think attaches to it, or to ascribe to its operation the favourable picture which I am enabled to present to the House. It is just, therefore, to the House, in order that they may form a correct opinion on the subject; that I should not confine my observations merely to what occurred in the past year, but that I should take a review of antecedent years, in which the same system was in operation; and from the result of consecutive years form a more comprehensive and consequently a more accurate conclusion. It will be recollected by the House that the system on which I say that the present financial prosperity of the country is founded originated in the year 1842, soon after the present Government accepted office; and I beg the House to go along with me in considering what has been the continued progress and effect of the measures adopted by the Government and Parliament since that date, and how far they have conduced to that successful result on which I may now fairly congratulate the House and the country. Every one will recollect the difficulties of the country at the period when the present Government entered office. I am not now about to draw any contrast between one particular Administration and another, or to claim any merit for the party with which I am connected, contradistinguished from the party to which I am opposed. I am simply dealing with facts, and to them alone I propose to call the attention of the House, as necessary illustrations of the principles which I desire to establish. What then was the situation of the country when the present Government entered office? For some years there had been a deficiency in the revenue, and that deficiency had increased in the particular year when the present Government accepted office to a very large amount indeed. Attempts had been made by increased taxation to overcome that deficiency, but it was found that the augmentation of Customs and Excise duties was abortive for the purpose of any material increase of the revenue. The first duty of the present Government, then, was to get rid of the then existing deficiency as rapidly as possible, and it was indispensably necessary, for that object, to subject the country to a great additional burden of taxation, and thus at once relieve the country from that incubus of increasing debt which must, if continued, break down the financial prosperity of this country. Feeling then, as we feel now, that the great check to national prosperity was to be traced to those particular burdens which pressed more especially on the poorer classes of the community, which affected the industry of the people, checked employment, and prevented the extension of trade and manufactures—we combined, with a large imposition of direct taxation, a very large reduction of existing burdens; we removed from the Customs all prohibitory duties, we reduced all protective duties within more moderate limits; and we relied for the restoration of the revenue upon what actually occurred — that the stimulus thus given to the industry of the country would itself prove a source of wealth. In 1842, it was proposed to reduce the duty on 583 articles subject to Customs duty; and, with some few exceptions, to remove all export duties. In 1843, pursuing the same system of reduction, we further reduced the duties on seven articles. In 1844 we reduced the duties on four articles, and in 1845 on 21 articles; and on 444 articles the duties of Customs were altogether repealed. In 1846, the Customs' duties have been reduced on 112 articles, and entirely repealed on 54. Thus, during the period I have mentioned, there has been a reduction of duty on 727 articles, and a repeal of duty on 503; being, for the most part, articles which concern the food, the clothing, and the comfort of the people, or which, in consequence of their being required in the manufactures of this country, are necessary for the advancement of those manufactures, and for the employment of the people. Let us now consider the effect of these measures on the revenue. We have had four years of experience; we have acted on the same principle, gradually, cautiously, but progressively diminishing those particular duties which pressed materially on the industry or comfort of the people; and what has been the result? How shall we test the effect of this system on the national prosperity? What shall we take as an indication of the general prosperity of the country as produced by the operation of these measures for the relief of the people? Let us compare the state of the country on the 5th January, 1846, with what it was on the 5th January, 1842. Let us look, in the first place, at what were the available means which the country had at its disposal at the one period as compared with the other. Let us deal with the country as we would with an individual. We consider that individual well off who has a balance at his banker's sufficient to meet the ordinary demands upon him; and we regard that person as poor who has not, in like manner, the means of meeting those demands. Let us, then, as a first test of the effect of the measures proposed by the Government, and adopted by Parliament, see what was the balance in the Exchequer at one period, and compare it with the balance in the Exchequer at the corresponding period in the latter year. On the 5th of January, 1842, the balance in the Exchequer was 3,650,000l.; and on the 5th of January, 1846, the balance was 8,450,000l. If then you deduct from the latter balance of 1846 the balance of 1842, there is exhibited an increase of the available means which the Government has at its disposal in 1846 to the amount of 4,798,000l. So far, then, as regards this particular test of national prosperity the measures appear to have been successful. The next point to which I shall advert is the state of the debt of the country at the periods to which I have alluded. If we find the country accumulating annually an amount of debt, however small the addition may be, we shall hardly look upon that circumstance as an indication of national prosperity, although it might be countervailed by other advantages; but if, on the other hand, we find, concurrently with other advantages, that the debt of the country has been reduced, we may regard that as conclusive evidence in favour of that system of finance which has led to so satisfactory a conclusion. The debt of this country consists of two great parts, the funded and the unfunded; and they must necessarily be taken together; because, a decrease may sometimes be effected in the one by measures which may cause a corresponding increase in the other. On the 5th of January, 1842, the capital of the funded debt was 772,530,000l. The Exchequer Bills outstanding amounted to 19,678,000l. The total debt, funded and unfunded, amounted to 792,208,000l. What was the state of the debt in January, 1846? The amount of the funded debt was 766,672,000l., and of the unfunded 18,442,000l. making a total of 785,115,000l. in 1846, as contrasted with the total of 792,208,000l. in 1842; showing a reduction in 1846 of about 7,094,000l. But there is another species of debt which this country has to discharge, viz., the debt which we speak of generally under the name of Deficiency Bills. That is a debt incurred to a greater or less extent on the recurrence of every quarter. Deficiency Bills are., in fact, the securities given to the Bank of England for the sums advanced by them in order to make the amount then in the Exchequer adequate to the payment of the sums due on the quarter day; but it would not be fair to take the amount of deficiency bills in any particular quarter in 1842, and compare it with the amount in any particular quarter in 1846. That would afford altogether an erroneous representation of the case, for in consequence of the equalization of the quarterly payments on account of the national debt which was effected in 1844, it follows, of course, that under any circumstances great difference would exist in the amount required in the particular quarters of the two years. But I will take what is a fair comparison, the average of the deficiency bills issued in the four quarters of 1842, and compare it with the average of the four quarters in 1846. And how stands the account? The average in 1842 was 6,163,000l.; and in 1846, 2,029,000l.; showing a decrease on the average of the two periods of 4,133,000l.; being a decrease of that particular amount of debt, little inferior in value to the decrease of 7,000,000l., which I have shown to have taken place on the funded and unfunded debt of the country. I know, however, that there is a general opinion that, with a debt so large as this country is encumbered with, it is of very little importance whether the Minister can or cannot show that he has effected some slight reduction, as in the present instance of 15s. per cent on the total amount of the burden. I do not agree in that opinion. I think that it is the duty of those who manage the finances to labour as much as possible for the reduction of the capital of the debt. It is advantageous in itself—it is yet more important as affecting the national character—to show that we are not insensible to the burden pressing on us, and that we are willing to make sacrifices, in order to reduce it. There is, however, another mode independent of any reduction of capital by which the burden of the debt may be diminished. It was stated by Mr. Huskisson, that with the amount of debt to which we are subject, the most effective relief for the mass of the people was not so much by reducing the capital of the debt, as by reducing the annual charge; and in estimating the financial state of the country we shall do well to see how far, during the period I have stated, the charge of the debt has been diminished. I will, therefore, state the amount of the charge at the two periods to which I have adverted. On the 5th of January, 1842, the interest on the funded debt amounted to 24,444,000l.; the terminable annuities to 4,097,000l.; the management of the debt cost 160,000l., and the interest of Exchequer Bills amounted to 896,000l. The total annual charge of the debt annually required to be defrayed out of the taxes of the country amounted therefore in 1842 to 29,597,000l. Now, let us look at the annual charge in 1846. On the 5th of January in that year, the interest of the funded debt, instead of being 24,444,000l., was 23,642,000l., being an abatement of 800,000l. The terminable annuities amounted to much the same amount as in 1842; being 3,967,000l. in 1846, and 4,097,000l. in 1842; and I mention this in order that no one may suppose that the reduction of the funded debt has been occasioned by an increase of the terminable annuities. The management of the debt, which in 1842 cost 160,000l., was reduced to 93,000l. in 1846, and the interest of Exchequer Bills was reduced from 896,000l. in 1842, to 426,000l. in 1846. The total result, therefore, is, that the charge of the debt on the 5th of January, 1842, having been 29,597,000l., was on the 5th of January, 1846, reduced to 28,129,000l., leaving a balance of relief to the public with respect to the whole charge of the public debt of about 1,500,000l. Nor is this all. The House is aware that by the measures submitted to Parliament in the year before last, instead of immediately securing a relief from annual charge by increasing the capital of the debt, the Government, with the universal approbation of the House, postponed one-half of the reduction of interest until 1854, at which time there will accrue a relief to the public amounting to 625,000l. a year. Thus there is a present and immediate relief to the public arising out of the system of commercial and financial measures adopted by the Government, amounting to 1,500,000l., on the annual charge of the debt; and also a further relief of 625,000l. a year, at no very distant period; making a reduction of upwards of 2,000,000l. of the annual charge of the debt. What, then, is the result of the tests I have applied in order to ascertain the benefit of the course which has been pursued? I have an increased balance in the Exchequer of nearly 5,000,000l.; I have the capital of the debt reduced by about 7,000,000l.; I have the deficiency bills reduced by 4,000,000l.; and I also have an immediate reduction of the annual charge for the national debt, amounting to 1,500,000l., and ultimately a reduction on that account of 2,000,000l. I therefore ask any man to tell me, if he cannot show me that my statements are erroneous, by what means these advantages have been gained, unless it be by the system of commercial and financial policy adopted by the Government and the House? There is one observation with respect to the public debt which had escaped me, but which I think it necessary to make. It may be admitted that we have reduced the national debt; but it may be urged that we have had large remittances from China, amounting to about 3,500,000l., and have applied that sum to the reduction of the debt. I wish to guard the House against such an error. The amount received from China was 3,359,219l.; out of that sum there have been expended for the expenses connected with the China expeditions, 400,000l. in 1842; 800,000l. in 1843; 800,000l. in 1844; making a total of 2,050,000l. There has also been a further payment for opium compensation, amounting to 1,270,000l., making the total expenditure 3,320,000l.; so that the whole balance left was only 30,000l. I think that the House will be of opinion that the statement I have been enabled to make is satisfactory. And how has this result been produced? Has it been attained by starving the resources of the country — by endangering our peace at home or honour abroad? Quite the contrary. I have already stated—and some Gentlemen may perhaps complain—that we have been prodigal of naval and military expenditure; but we thought it right to keep the establishments of the country on a firm and solid footing, and to place this country on a par with other countries in the world with whom we may possibly come in competition. It has not, therefore, been by any abandonment of the duties of Government—it has not been by depriving this or that service of what is necessary to enable it to be carried on efficiently, that we have been able to save the money whereby to effect the advantages I have enumerated. Have these advantages been obtained by the imposition of heavy taxes?—for it is very possible, we know, to effect reduction of debt by means of new and productive taxes on the people. Now, let me state to the House what is the amount of taxation from which the country has been, not burdened, but relieved, during the period to which I have referred. It would be a fallacy to suppose that the country is by a remission of taxation only relieved to the amount of the loss experienced by the Exchequer. Nothing can be more erroneous: when you reduce a tax on any article, the effect is, an increased consumption of that article; and the minor duty on the larger quantity always diminishes, and sometimes prevents any loss to the Revenue. But the relief to the public goes to the full extent of the duty withdrawn. Take the late reduction of the sugar duty as an instance. The Revenue loss was calculated at 1,300,000l., because an additional consumption of 50,000 tons was anticipated and realized. But the public gained, upon every pound of sugar consumed, the difference between the price at which sugar sold before and after the reduction of the duty. I say, therefore, when you come to consider what is the relief from the pressure of taxation given by taxes reduced, you must not take merely the amount which the Revenue has lost, but the amount that would have been imposed on the people if that tax had continued in operation. In 1842, taxes were imposed upon this country to the amount of 5,600,000l., principally consisting of the Property Tax, but including also certain stamp duties. In the year 1845, two small additions were made to this amount in the Excise and Stamps; one of them being the increased duty on auctioneers' licenses, resulting from the removal of the auction duty—the other addition was in stamp duties incidental to that alteration. The total amount of taxes imposed between the 1st of June, 1842, and the present time, is 5,624,000l.; but when you come to look at the amount of the taxes that have been reduced, coupled with those which have been abolished, they will be as follow: in 1842, taxes amounting to 1,590,084l. were taken off, principally in Customs' duties; in 1843, there were taken off, 171,521l. in Customs' duties, and 240,000l. in the Excise; in all, 411,512l. In 1844, there were reduced 286,431l. in the Customs, 25,000l. in the Excise, and 102,788l. in Stamps, principally upon marine insurances; in all, 414,219l. In 1845, the total relief afforded to the people by the repeal of Customs' duties, was 3,614,394l.; Excise duties, 1,135,000l.; in all, 4,749,394l. We have this year sent up to the House of Lords a Bill reducing Customs' duties to the amount of 1,041,547l., making the total amount of duties repealed or abolished up to the present period, 8,206,765l. Now, if we set against this large reduction the amount of duties that have been imposed in the same interval, 5,624,079l., we shall have a diminution of the burdens of the people to the extent of 2,582,686l. And concurrent with this large reduction of taxation, has been effected that important reduction of the capital and annual charge of the debt of the country, and those other financial results which I have enumerated, and which have each a material bearing on the national prosperity. To what, then, shall we attribute this improved state of things? I know some hon. Gentlemen will tell me that we have had a series of good harvests—that this improvement has been the result of those good harvests, and to them alone can the result be attributed. God forbid I should attempt to depreciate the value of these great blessings of Providence, or betray by a single expression a want of the due sense of the value to be attached to them, and the thankfulness they ought to create in the breast of every man! I feel as deeply as any one the importance of that blessing to the happiness of the people and the prosperity of the country, and not a word shall fall from me to imply that I am not deeply sensible of it. But have we never had good harvests before? Has there been no former period in which, for consecutive years, we have had harvests equal in abundance to those of the period of which I am speaking? And can we show, in those successive years, the same results which we are able to produce to-night as the result of the four past years? It is notorious that the years 1833, 1834, 1835, and 1836, were periods of excessive abundance, the year 1834 especially. Nothing has been witnessed like it either before or since; yet if we look at the state of the country during that particular period, though the Revenue was materially increased, yet the result as to the relief of the people in no degree corresponded to that I have had the pleasure to detail to you. The years 1820, 1821, 1822, and 1823, were also years of unusual plenty; but can you show in any of these periods, under different Administrations, the same result as we present this evening? Then, I have a fair right to argue that it is not the harvests alone which have made the difference; it is that, in these latter years, we have adopted a system of commercial and financial policy which has, on the one hand, not counteracted the blessings of Providence, and has, on the other, materially aided the efforts of the country in relieving itself from its difficulties. We have, by a judicious abolition of restrictive duties—by a cautious, prudent, and yet progressive reduction of those which, acting as protective duties, enhanced the price of commodities — obtained advantages which, under other circumstances, in former years were not gained; the finances of the country were conducted by men of greater abilities than any that can be pretended to by the individual who addresses you; the seasons were favourable, the harvests abundant, and yet the same results did not follow; because neither the Government, the Parliament, nor the country, were prepared for the system which has been subsequently adopted. But are the results of this system to be traced only in financial prosperity? As a national object, that is most desirable in itself, but it derives additional value when accompanied by a progressive increase in the comforts of the people, an improvement of their social habits, a great extension of education, and a growing attention to their moral and religious welfare. Has not that happy consequence resulted? Are not the comforts of the people improved? How shall we test that improvement? Can I do better than refer to that which is well known as the test often applied, and with perfect justice, to ascertain this fact? The comfort of the people cannot be better tested than by seeing what are their earnings, what are the amounts from their limited incomes they have devoted to pecuniary accumulation. I will take the average difference between the amount invested in savings banks in the four years previous to 1842 and the four years after, and see if it is not a test of what I seek to prove, that there is greater ease and comfort among the working population. Taking the average of the difference between what was paid into and withdrawn from the savings banks in the four years previous to 1842, I find it was 357,000l.; in the four years subsequent to 1842, it has been no less than 793,000l., or more than double the amount. And this, be it observed, took place, when in the latter period there was an additional restriction imposed on the amount permitted to be deposited in savings banks, and a reduced rate of interest paid on deposits; and, therefore, when the inducements to lay by money were to a certain degree diminished. This increase, too, I am happy to say, arises not upon the larger amounts or the old deposits, but from the greater number of smaller contributions. Considering that there are not less than a million of contributors by whom this money is paid, and that the easy circumstances of these individuals diffuse comfort over the families with which they are connected, I think it affords a certain proof of the extent to which additional comfort has been enjoyed by the humble classes of the population. But I will take another test of that improved condition in the increased consumption of exciseable commodities. In this point, we this year stand in a peculiar situation. In other years we have had to congratulate ourselves, that the deficiency of consumption of certain exciseable articles has been made up by a large increase in the consumption of others: but in this year there is not one article subject to excise, in which the consumption has not increased; from the top of the list to the bottom there is no diminution. Taking together these two tests of the power of consumption and accumulation, are they not strong evidence of the increased comfort and case of the population? With respect to the moral habits of the people, take the test of the present state of crime. There has been a great reduction in the number of committals for crime in different parts of the country; there has been a decrease of 7 per cent on the amount of crime committed in this period compared with the four years antecedent. Take another test, and one that indicates no less surely the improvement in their moral habits; I refer to the state of education during these four years, and the four years preceding them. We have, unfortunately, no general statistics of education from which to form a comprehensive view of the extent to which this benefit has been disseminated; but we have partial statements of the applications that have been made for the establishment of schools in different districts, and the number of persons who are desirous of being provided with education. Generally speaking, the number of persons of this class for whom applications have been made to the Board of Education, has increased in this period in the proportion of 500 to 200. The greater desire on the part of the people to obtain education, I hold to be the surest evidence of their anxiety to advance their own moral welfare. Again, take the efforts making throughout the country to extend the benefits of religion to those so educated; and I say that you complete the picture of the moral improvement of the people. There were times in this country when the Legislature thought itself entitled to high approbation, because, in the course of a century, it had built fifty churches for the purpose of communicating to the lower orders the benefits of religious truth. But in our own day, in the present period, I am happy to say, we should not think it much to have built fifty churches in the course of a century; in a single year there have been fifty churches built and endowed with funds by the rich of the land, to furnish temples in which, conjointly with the poor, they can offer up a common prayer for the prosperity of their common country. The ardour with which this object is pursued, and the equal ardour with which congregations rush to them for instruction, is, I think, conclusive evidence of the present improvement in the moral and religious habits of the people. Nor can this be regarded as a mere transient improvement. The power of religious truth is not of a fleeting character; it is handed down to succeeding generations, and permanently raises the character of the people. If I had not already too long trespassed on the attention of the House, I could adduce many circumstances, trifling, perhaps, in themselves, but collectively important, as bearing on the same point, and indicating the great improvement that has taken place in the manners of the population. I could state, we are no longer offended with those violent outrages which, under the name of amusements, were witnessed in former days by the observer of public morals. We find the people following amusements calculated to afford instruction as well as pleasure. They attend public institutions in greater numbers; the number of visitors to the British Museum has increased from 300,000 in a year to 600,000. Other institutions show a corresponding increase. And this improvement of the people in civilization, in morals and in religion, has taken place concurrently with the improved prosperity of the country in commercial and financial affairs. I think that I may then, without presumption, congratulate the House and the country on these happy results. I feel satisfied that I am not wrong in ascribing them mainly, under the blessing of Providence, to the policy which has been pursued by the Government; which, not hastily nor rashly deranging existing interests, and thereby diminishing, by immediate suffering, the value of the ultimate benefit, has cautiously introduced and safely effected great and important changes essential to the permanent welfare of the people. For my own part, I confess that I shall ever review with humble satisfaction and thankfulness the share which it has been my lot to take in the several measures of which it has been my privilege to bring the results before the House. I shall derive a yet higher gratification, if the effect of the observation of the past shall be to impress upon Parliament for the future this important lesson—that if we, with cautious attention to existing interests, steadily and judiciously, but yet progressively, reduce those burdens which more immediately press upon the industry and comforts of the population, we shall adopt the course the most conducive to individual welfare; and shall, at the same time, place on a sure and solid foundation, not merely the financial interests, but the general prosperity and happiness of all classes within this mighty Empire. The right hon. Gentleman concluded by moving— That, towards making good the Supply granted to Her Majesty, there be issued and applied to the service of the year 1846, the sum of 253,738l. 8s. 11d., being the surplus of Ways and Means granted for the service of preceding years.

MR. F. T. BARING

stated that there could be no doubt that the mode of presenting the financial statement on that occasion was different from that which was pursued in former years, for it was customary to lay on the Table of the House the estimates of the amounts for the various services, and then obtain the sanction of the House to provide for those charges, and thus the amount required was known. After this was done, it was the custom for the Chancellor of the Exchequer to state the amount of the revenue, so that the House might deal with any surplus that remained. He could not help making this observation on the present occasion, as he protested against adopting the present course as a general rule, as he thought the old course was by much the better and safer. No doubt there were specific reasons on the present occasion which rendered it necessary to depart from the usual course; for after the state of things in December last it was impossible, from regard to the commercial interests, to pursue the usual course in making the financial statement. The result was, that at the present moment all that could be done had been already done, and they had now to consider what was the state of the finances of the country. The right hon. Gentleman had gone into many points of great intricacy, which made it difficult to follow him. He would, however, endeavour to do so. They had now to look at the balance for the year, and see whether the increase was sufficient to meet the general amount of the expenditure; and for this purpose he should, as far as he could, make a general examination of the figures of the right hon. Gentleman. It was difficult to follow figures at any time without the Papers; and he did not know whether he had taken the amounts stated by the right hon. Gentleman down accurately. He, therefore, should feel obliged to the right hon. Gentleman if he would correct him if he was wrong; and if he should be so it could be no fault of the right hon. Gentleman, who had made his statements as clear as possible. The House must have been surprised to find that nearly the whole of the speech of the right hon. Gentleman had reference to the proceedings of himself and Colleagues. The right hon. Gentleman had shown, as it seemed to him, very great pleasure in going from the finances of the year into any other subject which at the moment presented itself to him, and had followed it up by dilating on all the advantages which might be derived from an improved commercial code. He was surprised that the right hon. Gentleman had taken credit for the Government in that House for the new system of education. [The CHANCELLOR of the EXCHEQUER had only referred to the extension of education as a proof of the improved moral feeling of the people.] He would not be tempted to go into this question; but he must add that he was sure it must now be gratifying to the right hon. Gentleman that he had not succeeded in his opposition to the improved system of education. Looking at what their present state was, he thought there was some apprehension whether they were not living above their income, and he was anxious to inquire what was both their income and expenditure. The surplus was set down at 760,000l., and to that was added the balance, 77,000l. of the China money; but that entirely depended on whether or not the right hon. Gentleman had correctly stated their expenditure and fairly estimated their income. In going into the Estimates he did not think that the right hon. Gentleman had fairly stated the expenditure—he (Mr. Baring) did not mean according to the Votes, but in reference to the actual charge for the year. It was rather difficult to go into a statement of details on this subject so as to make them clear, but he would endeavour to do so by some common illustrations. Suppose that a person took a house, for which he was to pay 400l. a year rent, under the arrangement to pay it quarterly. It was true that the last payment for the year was not due until the 1st of January in the new year. The person who took the house might therefore say that the expense for his house was only 300l. and not 400l.; but if he wished to make a fair estimate of his expenditure, he must take into account the charge for the four quarters instead of the three. He put this as an illustration that Gentlemen might follow him; and every one must see that the three quarters for one year would not do for the next year. It might be very convenient to take such an expenditure for the year, but the charge must come in the following year, and if he wished to look at the rate he was living at, he must take the actual charge. He (Mr. F. Baring) would take the Estimates in this way, and he held the Army Estimates in his hand. He would take the charge of the half pay and reduced military allowances, and he found that the actual estimate for that service for the year was 434,000l.; but the right hon. Gentleman did not take the whole amount, but only three quarters. He only proposed to take 326,000l., while the charge virtually was 434,000l. Thus he only took three quarters, and left the fourth quarter to the next year, when he would have to take it. By this means of proceeding a considerable reduction was apparently maintained; but when they came to the balance at the end of two years, the whole amount would be made applicable, and the real expenditure stated. He found the same proceeding held in other things. The Navy Estimates in this respect were correct; but he found in those for the Ordnance service the same discrepancy. He would not go through the figures; but he found that under the vote for the non-effective service of the Ordnance, 41,000l. less was put down than the real amount of the charge for the year. In this rate only three quarters were paid. Looking to the Ordnance expenditure, he found a charge made for works, building, and repairs. Gentlemen were aware that the usual mode of stating Estimates was to give the whole amount required for the works and repairs. The sum was generally voted in accordance as the work proceeded. They agreed first as to the sum to be expended, and then appropriated it by a vote as was required. Let them suppose that the sum required was 50,000l.; that it was necessary to expend 10,000l. this year, that sum was then voted, and the remaining 46,000l. went into the account of future years. If they wanted the whole sum of 10,000l., it should be stated in the expenditure of the year, and no part of it reserved for the year following. It was very possible that contracts might be so made that a considerable portion of the expense should not be required nor paid within the year, though the actual expenditure was proposed for that year. Thus they saw a very large sum voted as required for the Ordnance service this year; but a considerable part of the expense was postponed till next year. In such a case, by only stating what was required this year, you had an advantage in the year's accounts; but you were also sure to increase the amount of expenditure in the accounts of next year. By so doing, though you relieved the accounts for the present year, you threw an additional weight into the year following. It might be perfectly right, this new mode of stating accounts; he did not find fault with it, although he did not know the grounds upon which it had been adopted; and, at all events, he thought that the thing called for explanation. It might be perfectly correct to do this; but if you had to give a statement of the expenditure for the year, by taking off one quarter the expenses would be apparently reduced; but only reduced for a time, as they must again appear in the public accounts. He did not wish to trouble the House with any particulars upon this point; but it seemed to him that the Army expenditure was thus understated by 208,000l., and the Ordnance estimates understated by 298,000l., making altogether an understatement of about half a million upon the expenditure. And, if they really wished to know what they were spending, they should take away this 500,000l. from the 700,000l. or 800,000l. surplus which the right hon. Gentleman had promised. The House would recollect that his hon. Friend the Member for the University of Oxford asked a question some time ago as to the probable amount of the sum which it was proposed to give to the agriculturists for compensation. His hon. Friend did not use the word "compensation;" and he (Mr. Baring) only used it now as a short way of bringing the fact before the House. The right hon. Gentleman estimated the amount of compensation to be given to the agriculturists at a sum amounting to about 535,000l. Now, in looking through these Papers, he could not find that 535,000l. appeared to be voted on the Estimates; he found a sum of 170,000l. for that purpose. He did not see how this was made up. The right hon. Gentleman might have only taken half a year; but this was all that was to be voted in the present year. It was not, perhaps, unfair to state that they must come in for a large balance at a future period. If the charge was to be half a million for the future, it was most important that they should have some statement as to the future. If they voted the sum proposed this year, they would have for the charge for the remainder of this year to vote next year's expenses of 300,000l.; and he believed that they would have to pay fully that amount. Was, therefore, the expenditure correctly stated? Their balance was 766,000l., and, with the China money, about 865,000l.; but if not taking the China money—and they hardly could do so—there was only a balance of 70,000l. He was, therefore, assured that the right hon. Gentleman was quite right in going into a general speculation, and in sliding from the actual subject before the House as easily as he could. So much for the expenditure: they now came to the income; and it was quite clear they had not the 700,000l. to meet the next year. He might be told that they might next year reduce the expenditure; the expenditure of this year may be larger than next year; and next year there may be a reduction which will meet this. Now, in these promises he had no faith. He had moved for returns which had been laid on the Table, with a view of showing to what state their expenditure had been brought. He could not find, with the exception of the particular reduction in duty alluded to—and for this reduction he gave the right hon. Gentleman every credit—that there had been any reduction in the expenditure at all. He did not mean, in saying this, to blame the Government; he could not see that the Government was to blame. It should be remembered that the more a Government was anxious to reduce the expenditure, the less expectation could they have of a continued reduction; they could not always go on reducing; and such a dependence upon reduction ill the expenditure was but a feeble reed wherewith to support a financial system. The hope was held out to them, that by taking off smaller duties they would materially lessen the expenses of collecting revenue; but he found, taking the Customs, that the whole charge of collection was very much about what it was in 1841, at the period before any of those changes were made. Some slight reductions must, no doubt, be made by such a system; but the whole charge had very much increased; and as no material diminution in the account appeared to have been made since 1841, they could not calculate upon any great reduction for the future. The result was, that the Estimates now submitted to the House were the largest proposed for those services since the year 1822. He believed those Estimates to be of the necessary and right amount, and he did not blame the right hon. Gentleman; but he must be allowed to add the remark, that if hon. Gentlemen supposed that by any change of Government they supposed they could reduce the expenses of the main services of the country, they would always find themselves mistaken. It might be unfair to charge the right hon. Gentleman opposite with results which might be supposed to proceed from measures adopted by Gentlemen on his (Mr. Baring's) side of the House; but the fact was, that even with Lord Aberdeen presiding over our foreign affairs, and after the present Government had had ample time to follow their own course, the Estimates had largely increased, not from any peculiar policy, but from the necessity of circumstances. They were increasing from year to year; and he freely owned, he saw no great prospects of any material reduction in them. The Miscellaneous Estimates had also increased. He had often remarked that whenever the Miscellaneous Estimates were discussed, the Chancellor of the Exchequer was almost left alone in the House, and that the House was sometimes exceedingly stingy about stationery, whilst at others it was exceedingly pressing for a considerable sum to be paid for Danish claims. He returned again to the estimates of income. He would accept the estimate of the right hon. Gentleman; but when the right hon. Gentleman calculated so much upon what had been done in the last three years, he listened to him with some misgivings. He perfectly concurred in the expediency, wisdom, and justice of relaxing their commercial system; but he could not go with the right hon. Gentleman when he told them that the prosperity of the last three years was certainly attributable to the Tariff; and he still further doubted the declaration that if they pursued the same course they would ensure an unending prosperity. He looked upon this as a mistake: he thought to lay such a foundation upon these principles was unfair; and he did not at all believe that the prosperity they had recently enjoyed was the consequence solely of their policy. Even if they had done nothing, the last three years would have been more prosperous than former years; he believed they had done what was right, and that they had added to the benefits which otherwise would have accrued to them — they had made hay while the sun shone; but the sun would not shine for ever. Whether under a system of free trade or not, they could not rely upon such an uninterrupted good fortune; he was unaware of any secret in politics which could secure them that blessing, and they must expect temporary reverses even under the most perfect political system. The income which had been derived from corn would in three years disappear. He did not lay any stress upon that, for he anticipated no real loss; and in regard to the timber duties, the measure would come into operation next year; and, whatever other effect this would have, it would erase a considerable amount of revenue, to meet which they should have a certain surplus. That made two items for their calculation; and then there was a third. When the income tax was introduced, a promise was made that it should cease, certainly at the end of six, and perhaps in three years; their revenue, therefore, of 5,000,000l. was not a permanent income unless that tax became permanent; and if this 5,000,000l. as well as the corn were gone, what did the right hon. Gentleman expect? He had been always hostile, and still was, to the income tax as a permanent part of the financial system of this country. Before he sat down he wished to put a question to the right hon. Gentleman the Chancellor of the Exchequer. It was stated by the right hon. Gentleman that he had increased the balances in the Exchequer; and, of course, nothing could be more satisfactory than to see those balances increased as much as possible. It was said that he (Mr. Baring) had left them low, and he should be glad now to see them really and substantially raised, provided that that could be done without detriment to the public service; but he did not feel quite satisfied that the increase upon the present occasion had been effected precisely in the manner that might be wished; and he hoped, therefore, that the right hon. Gentleman would afford the House some explanation with respect to those balances. The House was, of course, well aware that at the end of every quarter the surplus ought, in the regular course of business, to be handed over to the Commissioners for reducing the National Debt. Now it did not appear that the whole of that surplus had been handed over to those Commissioners; for the practical effect of what had been done was to increase the balances in the Exchequer by reducing the amount which ought to have been handed over to the Commissioners for reducing the National Debt. He freely admitted that the Chancellor of the Exchequer had a clear legal right to take that course of abstracting 30,000l. out of the 6,160,000l., for the purpose of increasing the balances in the Exchequer; but though the proceeding might have been legal, he did not quite subscribe to the expediency of it; and, therefore, he should be glad to hear from the right hon. Gentleman the grounds upon which he was prepared to defend such a proceeding. His noble Friend who before him had held the office of Chancellor of the Exchequer, found a surplus in one year; but he did by no means feel certain that he should have an equal surplus in the following year; and instead of transferring his surplus to increase the balance in the Exchequer, he spread his operations over two years, and the result proved the wisdom of that proceeding, for in the following year he had no surplus whatever. For these, as well as for other reasons which must be obvious to the House, he did wish that the right hon. Gentleman would afford the House some explanation upon this point. A good-humoured public believed that those sums were handed over as contributions towards a reduction of the national debt, whereas a considerable portion of that surplus was applied to a legal but yet totally different purpose. He had wished from the outset to confine himself to the exact business before the House, and upon that he had very little more to say. The Ministers had settled their policy; they had settled their Corn Bill, they had settled their Tariff; they had before them all the expenses of the country, and it would now be for the House to say whether they would sanction the application of a real surplus, or one that was not real, to the increase of the balances in the Exchequer. He had taken great pains to check the calculations made upon this point, and even to have them checked by others; but instead of there being a surplus, in the sense that the Chancellor of the Exchequer described it, there was a deficiency—a deficiency, as it appeared to him, of not less than 800,000l.; and he feared that if another railway mania should arise and produce an exhaustion of capital—he feared if that occurred that the too sanguine expectations of the right hon. Gentleman would not be realized, and that the revenue of the country would not in the next year be in that state which the Government anticipated.

The CHANCELLOR OF THE EXCHEQUER

said, that upon two points to which the right hon. Gentleman referred he should say a few words. There were certain Estimates, as well of the Navy and Army as of the Ordnance, in which it appeared that the expenses of three quarters were only charged; but that possibly at first view those expenses might be supposed to include the charges of the whole year. That statement of the right hon. Gentleman was correct as to some of the Estimates; but he must be aware of the reason why that took place. The hon. Gentleman knew that Commissioners had been appointed to investigate that branch of the public service, and to put it upon a proper footing with respect to several of its accounts, and that a balance-sheet of the Naval Estimates and expenditure was regularly made in conformity with the recommendation of those Commissioners. The arrangement made was that, in the case of the Navy, they should only charge three quarters, and not for the whole year; this was of course done without any additional vote of Parliament on the subject, and it was thought right, at the same time, to limit each department within itself, and cause those departments to pay over each its own surplus at the end of the year. Of course if, instead of there being a surplus, there happened to be a deficiency, then the department would be entitled to draw for the amount of such deficiency; and in the latter case it was the practice to apply to the House of Commons for a supplementary vote, to make good the deficiency. This had hitherto worked beneficially for the public; and he did think it was a good mode of maintaining order and regularity in the accounts of those departments. It was true, as the right hon. Gentleman said, that so far as it went, it produced all the appearance of a reduction in the expenses of the year; and, of course, no one could say beforehand what might or what might not be the amount of the revenue, or the amount of the expenditure; but every one must admit that the plan was good so far as it went. It had been practised for some years; and though he had taken an amount beyond what he expected would be necessary, yet he was sure upon reflection the House would see that the plan was upon the whole the best that could be adopted. With respect to the transfer of monies from the surplus for the purpose of increasing the balance in the Exchequer, the right hon. Gentleman admitted the legality of the proceeding; and its expediency could easily be shown by the advantage to the country which arose from the saving of interest effected by increasing the balances in the Exchequer; for, by keeping those balances up to a certain amount, the necessity of borrowing money from the Bank was avoided. The increase of those balances within certain limits rendered the Government not only independent of the Bank, but secured a very considerable saving in the way of interest. It was more prudent to save the country the necessity of borrowing six or seven millions than to hand over a larger surplus to the Commissioners for reducing the National Debt, than, under other circumstances, might be practicable.

MR. HUME

had no objection whatever to the statement made by the right hon. Gentleman the Chancellor of the Exchequer. It appeared to him to be fair and intelligible. As the subject of Deficiency Bills had been mentioned, he (Mr. Hume) would say, as he had stated before to the right hon. Gentleman, that it was of the utmost importance to free the public from the necessity of going to the Bank. The right hon. Gentleman had stated correctly that there had been an increase in taxation to the amount of 5,624,000l.; and that upon the other hand there had been a decrease of 8,206,000l., showing a decrease in amount of 2,582,000l. That appeared to him to be one of the greatest improvements which had taken place since the present Government had been in office: to remove taxes which pressed immediately upon industry, and which came into the consumption of every individual, and to transfer them to property, would operate vastly to the improvement of the condition of the millions. So far as indirect taxation pressing on the community at large was converted into direct taxation pressing on the wealthy, the change was of great importance. He should recommend to the Government the removal, to a great extent, of assexed taxes of the country, such, for example, as the tax upon coaches and horses. By removing those taxes, a great stimulus would be given to the industry of the country, and a great expense in collection would be saved. He would much rather pay an additional 1 or 2 per cent upon the income tax than see those taxes continued. After the speech of the right hon. Gentleman—a speech which he certainly never thought to hear from that right hon. Gentleman—he must say that he hoped to see a great improvement in the trade and industry of this country. That speech, as coming from the right hon. Gentleman was the more valuable, because it showed that former errors were forgotten, that new principles were adopted, and that the country was to have the benefit of the free policy which the Government had adopted. He thought, considering all the circumstances of the case, that the country had good reason to be satisfied with the statement of the income. There was, it was true, only an available surplus of 76,000l., excluding the China money; but he trusted that the occurrences of the last few years would lead to a long continued peace, and with peace they might expect increased commerce and prosperity. The Estimates for the Army and Navy were large; but as great establishments might be necessary for the preservation of peace, he had never objected to those votes. He looked upon the increase made in those votes as only temporary; and he thought that the Government were perfectly justified in keeping up those establishments at this time, The right hon. Gentleman had passed lightly over the policy of the Government with regard to sugar—a policy which he (Mr. Hume) regarded as most ill-advised. He trusted that the Government would be better disposed during the present year, and that by altering the duties and adopting a proper policy, they would make the surplus of next year at least one million and a half. It certainly was a great error to exclude slave-grown sugar—it was one of the most mistaken opinions that possibly could be, that by refusing slave sugar they could lessen the Slave Trade. It was only changing the course of foreign free sugar, and allowing the slave sugar to supply the markets, which were before supplied by the foreign free sugar. He had been informed by a competent authority, that if the Government had adopted the proper policy with regard to slave sugar, they might have looked for an addition of 1,500,000l. to their revenue. There were other articles on which it was of the utmost importance to reduce the duties, such, for example, as tobacco and tea. The duties on these articles were so high as to hold out a great premium for smuggling; on some kinds of tobacco it was as high as 2,600 per cent. The expense of collecting those duties was extremely heavy, and was increasing; it was heavier than it had been since 1831. The expense of the coast guard was increasing. Smuggling was increasing; and notwithstanding that 600 articles had been erased from the Tariff, no reduction had been made in the Custom-house establishment, as had been very properly made in the Excise; and in spite of all the complaints of Custom-house abuses, no improvements had been made. Subject to these observations, he looked upon the Estimates generally as fair. By adopting the liberal policy which the Government had shadowed out, by making our Colonies productive of wealth, by freeing them as we had freed our commerce, the country might look with certainty to a prospect of continued and increased prosperity.

LORD G. BENTINCK

Sir, I certainly cannot object to the increase of the naval or military establishments of the country. I think, when we recollect that it was chiefly to the observation of Mr. Calhoun to the Congress of the United States, to the effect that we had a fleet of 667 ships, while they had but 47, that our present pacific relations with the States was brought about, and on that account I do not wish to see a diminution of the navy; but I must say I do think the surplus of 773,000l., which I understand to be the surplus calculated upon by Her Majesty's Ministers is rather too narrow, under all circumstances, and in the face of all the great changes which have taken place, and which are expected to ensue; and when I heard the statement of the right hon. Gentleman opposite (Mr. Baring) acquiesced in by the Chancellor of the Exchequer, that he had not given the full expenditure of the year, while he had included the full income, I must say the surplus of 773,000l., which must vanish as soon as we lose the China money, is too narrow to face the great changes that we may naturally expect. If I understood the right hon. Gentleman, there is no very great security that the interest on the Exchequer bills may not have to be raised. Already, I believe, the premium on Exchequer bills has fallen to 15s.; and if the disturbances between the United States and Mexico should lead to further alteration in the money market, the Chancellor of the Exchequer may have to raise the interest on Exchequer bills. I think the right hon. Gentleman has made a great omission in forgetting to state to the House what his views were with regard to the receipts to be expected from the duty on corn. In the last four years there has been received something like three millions and a half sterling from that source; and I think we ought to have heard from the right hon. Gentleman the amount he expects to receive from the reduced duty on corn. Does he expect that the corn now in bond is to pay 4s. duty, or at what duty does he expect foreign corn to come in at? Sir, 1,500,000 quarters of corn at 4s. duty would produce but 300,000l. Does the right hon. Gentleman expect that this is to be the entire amount of foreign corn imported, or does he expect another million of quarters of corn to make the duty equal to 500,000l. The right hon. Gentleman has drawn a very splendid contrast between the success of the financial measures of the present Government, and the failure that had attended those of their predecessors. He has, to be sure, given some small credit to the abundant harvests of late years; but that credit was very far short of what they were entitled to. Upon reference to returns showing the quantity of corn sold under the notice of the corn inspectors, we find, that in the year 1845, as compared with 1842, there were 6,400,000 quarters of wheat sold, as compared with 4,000,000 quarters in 1843. This is a proof that the harvest of 1843 was, by one-third, greater than the harvest of 1842. Why, that in itself, taken upon the consumption of 16,000,000 quarters of wheat, would give an increase of rather more than 5,000,000 quarters; and thus, when Providence makes a gift of the value of 5,000,000 quarters of corn, it is equivalent to a gift of 10,000,000. Then must there not have been far more prosperous harvests during the administration of the present Government than under that of the late, when they were notoriously bad? When the right hon. Gentleman tells us all the success that has attended the Ministerial measures is to be ascribed to the flourishing state of the finances, I think he has taken credit to himself for a great part of that which belonged to Providence. But, Sir, when we are told in this House, as we constantly are, that the consumer has the benefit of all the reductions, I utterly deny the assertion. Sir, have not those who made that assertion been told, over and over, that even in the timber duties, one-third of the entire amount reduced has gone into the pockets of foreigners. Now, with regard to sugar duties, what has become of the reduction since last year? The duty was reduced 11s. per cwt.; but has not the price risen 9s. per cwt., exclusive of duty? The price of sugar has risen to 33s. per cwt.; and into whose pocket has the remission of duty found its way—into the consumers or the producers? I admit, that with respect to a large portion grown by the subjects of Great Britain in Eastern and Western India, the money does go into the pockets of British subjects, and I do not regret it. Then, when we are told that the reduction goes all to the advantage of the consumer, I utterly deny the truth of the statement. The hon. Gentleman opposite to me (Mr. Hume), says that he would prefer the income tax increased one or two per cent. and the assessed taxes reduced instead. I do not share in the desire to see the income tax increased—though I should very much like to see assessed taxes reduced; but, Sir, the way to relieve the burden of assessed taxes is, to maintain the duties on timber, on corn, and on all articles of foreign produce, by remitting the duties on which you benefit the foreigner as much as the consumer in this country. I know, Sir, it is too late now to attempt to alter the decision of the Government, backed as it is by a large majority in this House. The ordinary course of things is reversed. Heretofore we were accustomed to hear financial statements of Her Majesty's Ministers first, and afterwards decide whether we should adopt or reject the suggestions submitted for our consideration; but we have now reduced all the duties—all the work is done, and we are met to-night, not to ascertain what is going to be be done, hereafter, but in reality what has been already done. The object of this discussion is only to tell us what is likely to be the result of the measures which have been passed, while as yet we are left completely in the dark. Therefore, I feel it would be only wasting the time of the House in offering any observations to it; and whilst I enter my protest against being supposed to approve of this financial statement, and this budget, I shall not trespass on the time of the House a single moment longer.

MR. C. WOOD

considered it would have been the better course if the right hon. Gentleman (the Chancellor of the Exchequer) had apprised the House exactly of the state of the case, for now they had no correct information of the annual expenditure which was to be set against the annual income. He begged to remind his right hon. Friend, that when he said it was a usual course to vote three quarters instead of four, such was not the practice of the navy, for the custom was to vote the four quarters, although the money might not be actually paid before the 31st of March. The practice had ever been to vote the year's expenditure on the year's income. He did not find fault with the Estimates, but he found fault because the whole annual expenditure was not stated. The right hon. Gentleman had calculated the amount of customs duties repealed and reduced at two-fifths of the sum previously given. The whole sum being 1,041,000l., by deducting two-fifths, the sum left would be 19,300,000l., as the probable estimate for the ensuing year. The right hon. Gentleman's calculations were made, however, on six weeks' returns, which period was not sufficiently long to furnish correct data. Last year the duty on customs was 21,000,000l. Deducting two-fifths of that sum for customs duties repealed and reduced, the sum of 19,700,000l. would remain as the estimate for the year. The experience of last year should have been taken as a guide to what would occur this year. At the time of the introduction of the last Tariff, they were told that the reduction on ordinary expenditure would fully compensate for the burden of the income tax. He doubted whether any Gentleman ever found that to be the case. This year, the erroneousness of that position had been acknowledged, for the Government alleged that the happy effect of the Tariff of 1842 was to raise prices. He was of opinion that the relaxation introduced in 1842, had stimulated industry, and given the people a greater command over the necessaries of life than they had previously possessed. The reduction of the duty on sheep's wool had been especially productive of great advantages. The quantity imported previous to the reduction of the duty was 48,000,000 lbs., and now it had risen to 74,000,000 lbs. It had been also exceedingly gratifying to him, in going through the table, to find that there had been an enormous increase in the import and consumption of those articles, such as cattle, cheese, tea, tobacco, &c. on which the great body of the people lived. The increase in the revenue during the last year was mainly in the Excise, the Stamps and Post Office, and not in the Customs. There was an increase of 1,186,000l. in the Excise, while the increase in the Customs was under 200,000l. There had been a diminution in the import of white clayed sugar, the amount imported being only 31,300 tons. The differential duties had kept out about 85,000 tons of that sugar. He hoped some change would be made in those duties, unless the House was prepared to maintain the income tax. When the income tax was first introduced, he had opposed it, but he afterwards voted for its continuance, in order to cover the experiment then proposed. He trusted that when the differential duties on sugar would be again brought under the consideration of the House, they would be done away with altogether, otherwise the income tax must be maintained.

MR. CARDWELL

could not help feeling surprised that the right hon. Gentleman should take so gloomy a view of the future. He (Mr. Cardwell) should have thought that when the hon. Gentleman found that the removal of taxation pressing on the industry of the country had been productive of great prosperity to all classes of the community, and also of a corresponding increase in the revenue, he would have come to a conclusion respecting the future more analogous to the past than he had done. The Chancellor of the Exchequer had confined himself entirely to those items of expenditure which were anticipated to occur within the current year. The Estimates before the House were only for three-quarters of a year; and in confining themselves to that period they were following precedents which it was desirable they should observe. The money voted in the year was expended in that year. In the Estimates which had long been before the House, the fullest details had been given; and it was from those Estimates the hon. Gentleman had obtained all the information he possessed on the subject. The House should confine itself to the simple consideration of the present financial year, and what was the probable surplus which the balance-sheet of 1847 will exhibit. They should be introducing an element foreign to the subject if they took into consideration any other sums than those required to be voted for the service of the current year. The statement of the additional expenditure of the constabulary of Ireland had been omitted because that was a charge on the Consolidated Fund. The six weeks upon which the calculations had been made, corresponded exactly with the same period selected last year. The hon. Gentleman had declared, after taking a view of our financial state, that it would be necessary to look to some other source to keep up the revenue. When, however, he found that the net produce of the Customs and Excise, exclusive of the corn duties, produced in 1842 something about 32,000,000l., while they produced in 1845, 33,500,000l.—although the amount of taxes remitted, on the lowest calculation, was 5,000,000l.—when he considered these things, he did not think there should be any serious apprehension entertained on the subject of the revenue. It might, however, be right, not merely for the purpose of finance, but for other reasons, to limit themselves to the income stated in the balance-sheet of 1847; at the same time there was the hope that present measures would impart an elastic energy to all their commercial relations; and he had no doubt that future years would present not only the same increase as past years, but even considerably more. He had not, therefore, the slightest apprehension but that the anticipations entertained by his right hon. Friend the Chancellor of the Exchequer would be fully realized; and he confessed that he drew the same conclusion from a part of the speech of the hon. Gentleman who preceded him, and who appeared to have adopted the same premises.

MR. WILLIAMS

observed that he had been disappointed as to the extent of the proposed expenditure for the next year. He thought that it would be materially reduced. Taking an average of the years 1834, 1835, and 1836, he found that the expenditure over that period was annually not more than about forty-four millions of money, less, by six millions, than that proposed for the expenditure of the next financial year. The hon. Gentleman went on to contrast the expenditure upon the army and navy of this country with that of the United States, and to express a hope that the relations between the two countries might soon be put upon a more satisfactory footing than that on which they now stood. A Commission to inquire into the collection of the revenue had at one time been appointed; but he was sorry to find it was not now in existence. Government ought to look into this subject, with a view of reducing the expenditure, for it was enormous. By a return which had lately been obtained, he found that within the last three years and a half there had been in this department no fewer than 600 new places created, with salaries to the amount of between 70,000l. and 80,000l.; and this was totally unconnected with extensive additions which had been made in other departments of the public service. He found, for instance, that four places had been created with salaries of 6,000l. a year each, two at 5,000l. a year each, one at 3,000l. a year, one at 2,500l. a year, ten at 2,000l. a year each, fifteen at 1,800l. a year each, eight at 1,500l. a year each, two at 1,250l. a year each, thirteen at 1,200l. a year each, twelve at 1,000l. a year each, sixteen at 800l. a year each, and thirty-one at from 600l. to 750l. a year each; being 113 places at salaries amounting to 149,500l. and all created within the last three years and a half. Could it be wondered at, then, that there was a great increase in the expenditure? He also found a great increase in the expenditure connected with the Woods and Forests. He considered that when the expenses of living had been so much reduced as of late years, the salaries of public officers ought to receive a corresponding diminution. Until, however, the House devoted itself seriously to considering the expenditure of the country, it was of no use for him or others to complain. Ministers would always be ready to make estimates if they thought the House was ready to vote money. The taxes were in value now 10,000,000l. more than they were in 1814. He could not, however, but admit that the Chancellor of the Exchequer's statement had been most clear and comprehensive.

MR. HUDSON

, at that late hour was unwilling to occupy the House at any length; he would therefore confine himself to a few general observations. The House should feel much indebted to the right hon. Gentleman the Member for Portsmouth, in having called their attention to the very important omissions of the right hon. the Chancellor of the Exchequer; whose statements he (Mr. Hudson) did not think were in general very satisfactory. The two sides of the account were too nearly balanced to be the source of any cause of congratulation either to the House or to the country. He felt great disappointment when he discovered there was so little done to relieve the people from hose taxes which still so heavily pressed upon them. He did expect that a speculating Ministry—a Ministry which was so fond of indulging in Utopian speculations, would have done something in the way of effecting a reduction on tea and other articles of general use by the poorer classes of society, in order to carry out their own favourite principle, which was to rely for an increased revenue on an increased consumption. He greatly feared the general consequences which would result to the country from the present measures of Her Majesty's Government. In the first place, it would be impossible for them to make any calculation as to what would be the probable amount of the income for the present year; no one, in fact, could tell what might be the effect of those great changes which were about to take place. As to the Estimates, that must be purely a matter of speculation. As to the general expenditure of the country, that demanded a serious reduction. It was the duty of that House carefully to look after the state of the revenue, and minutely to inquire into every item of the public outlay; and which inquiries might very possibly lead to useful retrenchments. The Chancellor of the Exchequer made what was apparently a very fair speech: it might, perhaps, be looked upon as one of a series of "prosperity speeches." He might be permitted to call the speech just concluded the first prosperity speech of the Chancellor of the Exchequer of the day. That speech certainly treated largely of all that prosperity which flowed over this country for the last four years—a prosperity which might be attributed to various causes. Reference, to be sure, was made to the good harvests which had prevailed—well, that might have had some influence on the general prosperity; he, however, would refer to the years 1822, 1823, and 1824, when there were abundant harvests and when there was an abundance of capital in the country. How was that capital applied? Was it applied to the internal improvements of the country? It was not; on the contrary, it was exported in bullion to South America. He would come down to the years 1833, 1834, 1835, and 1836, when the money of the country was not expended in its internal improvements, as had been the case within the last four years, it being embarked in the construction of railroads and canals in the United States. Good harvests were a blessing, and their continuance might be the means of a nation's prosperity; still it was quite possible for a crisis to occur, to meet which the nation should not be unprepared, and which he feared might be the case from the measures lately propounded by the Government. The whole of the speech they had heard was very laudatory of past policy, and very complimentary to Ministers, who, it appeared, were rather oblivious of an old copy line often written by himself when a schoolboy—and which it would not be amiss to bear in mind—"Self-praise is no commendation." He did not much admire the former Government, but he neither admired the proceedings of, nor did he place any confidence in the present Ministry—who were continually boasting of the prosperity of the years of their office; but those causes which really led to that prosperity, he sincerely wished they had allowed to remain undisturbed.

MR. JAMES

The noble Member for Lynn had stated that the difference between the sugar duty of 25s. 3d. and 14s., had gone into the pockets of the West India planters. He could assure the noble Lord they had not had a farthing of it. In the present state of the labour market in those Colonies, the cost of production exceeded any return obtained for the article produced. If the noble Lord had not made a better speculation on the Derby than the West India planters, all he could say was, that he made a much worse book than usual.

Vote agreed to. House resumed.

House adjourned at a quarter past Twelve o'clock until Friday next.