INCOME TAX BILL.

HC Deb 30 March 1854 vol 132 cc81-112

Order for Third Reading read.

SIR JOHN PAKINGTON

I rise, Sir, pursuant to notice— To call the attention of the House to the circumstances which have led to the proposed increase of the Income Tax, and to the intentions announced by Her Majesty's Government with respect to defraying the expenses of the war. I do not intend to offer any obstruction to the progress of the Bill, or to oppose time imposition of the tax in question, for a longer time than the few moments which I shall feel it necessary to occupy in the observations which I deem it my duty to address to the House on time subject. At this moment, and more especially after the notice given for to-morrow by the noble Lord opposite (Lord J. Russell), I feel that our first duty is to give our best support to the Crown. The right hon. Gentleman the Chancellor of the Exchequer, in making his financial statement, stated that the ordinary revenue of the country would be insufficient to defray the extraordinary expenses of the war, which had already become certain; and he, therefore, proposed that, in order to liquidate this expense, that the income tax should be doubled. I am aware that the right hon. Gentleman's proposal only extended to the current six months in time first instance, but, under all the circumstances, I think I am justified, on the ground of simplicity in the argument, in speaking of the income tax as being doubled. The right hon. Gentleman was, however, aware that in seeking to double this tax he was imposing on the country a tax which, on his own authority, and his own showing, was unequal; and which, moreover, was oppressive and inquisitorial in its nature. The House, nevertheless, offered no objection to it. The hon. Baronet the Member for Evesham (Sir H. Willoughby), on a former evening, certainly moved an Amendment, which, under any other circumstances, would have been a fair subject for proposal; but, under existing circumstances, it was deemed unadvisable to press that Amendment to a division, and the House, therefore, acceded to the proposal of the right hon. Gentleman, I may almost say, without discussion, but unquestionably with the earnest desire to avoid any, the least appearance, of hesitation, in complying with the demands of the Crown to carry on the evidently approaching. war. We are hardly free, therefore, under present circumstances, to consider the effect of the plan of the Chancellor of the Exchequer, because the attention of foreign nations is at this moment directed to all our proceedings, and I, for one, should be exceedingly sorry that any act of ours should offer the slightest appearance of opposition, or not prove that, whatever may be our party differences, they do not deter us from acting as one man, in granting the supplies to enable the Crown to carry on the war with that vigour and that spirit which are the characteristics of this country. But having fulfilled the duty which we owe the Crown on this occasion, we owe a duty also under the present circumstances to those whom we represent, and that duty must be discharged in the same manner. Looking, then, to the objectionable nature of this tax, and to the whole circumstances at- tending the financial arrangements of the right hon. Gentleman, we are called on to inquire and consider, not, perhaps, whether an increased income tax is required for the expenses of the war, but whether the management of the finances of the country by the right hon. Gentleman during the past year has not been such as to lead to the necessity of this increase at this particular time. Many persons will ask if the war is the sole cause of this obnoxious impost? I believe it can be traced further back, and that the real cause of the doubled income tax arises not from the impending war, but from the mismanagement of the finances of the country for the last twelve months by the Government, and that the reason—the real reason—why the country is called on for it, is because we are about to commence a war with an empty Exchequer. And why is the Exchequer empty? It is empty, in the first instance, because of the financial operation by the right hon. Gentleman at the commencement of last year; and, in the second, because of having brought down to the House in April last what I may fairly call a peace Budget, when the Government was in possession of information which—I will not say positively, but in all human probability—proved to them that a war with Russia was at least imminent. With the view of showing this, I request the attention of the House while I enter on a review of the financial circumstances of the last year, and I hope I shall be pardoned for referring to the past for the purpose of pointing out how it affects, and may further affect, the future of this country. The right hon. Gentleman has explained to the House how he proposed, at least for a time, to defray the expenses of the coming war. The right hon. Gentleman has told the House that he proposes to rely upon direct taxation for his chief resource, and only to recur to indirect taxation as a last resource. Looking at the present career of the right hon. Gentleman, and the nature of the tax which is dealt with, I think I ant justified in endeavouring to show the House that the state of public affairs was such when the right hon. Gentleman brought forward his Budget, that he ought at least to have taken a different view of the subject. There was nothing to justify him in anticipating a continuance of peace, and, therefore, he ought then to have guarded most carefully the existing resources of the country. In order to show the House the information in the possession of the right hon. Gentleman when he brought forward his financial scheme of last year, it will be necessary for me to refer to the papers which have been laid before the House on the Eastern question. But in so doing I have no intention whatever to raise any debate upon the Eastern question; on the contrary, it is my intention and my wish to avoid such a debate. I wish simply to state to the House the financial circumstances under which this increase of the income tax has been called for, and I shall carefully avoid entering into the general policy of the Government on that question, and avoid entering into the answers of Her Majesty's Government to the several despatches to which I shall have occasion to refer. The first of these despatches is that addressed to the noble Lord opposite (Lord J. Russell) by Sir Hamilton Seymour. It is dated January 7th of last year, and was received on the 19th of the same month. I beg the House to bear in mind the dates:— Orders have been despatched to the 5th corps d'armée to advance to the frontiers of the Danubian Provinces, without waiting for their reserves; and the 4th corps, under the command of General Count Dannenberg, and now stationed in Volhynia, will be ordered to hold itself in readiness to march, if necessary. Each of these corps consists of twenty-four regiments, and, as your Lordship is aware, each Russian regiment is composed of three battalions (each of about 1,000 men), of which one battalion forms the reserve. General Luders' corps d'armée, accordingly, being now 48,000 strong, will receive a reinforcement of 24,000 men soon after its arrival at its destination, and supposing the 4th corps to follow, the whole force will amount, at least according to official returns, to 144,000 men. Here is a clear intimation of an order for the despatch of 144,000 men to the frontiers of Turkey, besides a statement of further reinforcements. The next I shall refer to is one of those remarkable papers called the "Secret Papers." It is the first on the list, is dated the 22nd January, and it refers to a conversation which Sir Hamilton Seymour had held on the 14th of the same month with the Russian Emperor, just seven days after the date of the despatch I have just alluded to. The Emperor said:— For my part, I am equally disposed to take the engagement not to establish myself there (at Constantinople)—as proprietor that is to say, for as occupier I do not say. It might happen that circumstances—if no previous provision were made, if everything should be left to chance—might place me in the position of occupying Constantinople. Further on, in the same letter, Sir Hamilton Seymour says:— The Emperor assured me that no movement of his forces had yet taken place, and expressed his hope that no advance would be required. This statement of the Emperor of Russia, that no movement of his forces had yet taken place, might be consistent with the statement made a week previously by Sir Hamilton Seymour, for, though orders had been given for the advance of 144,000 men to the Danubian Provinces, it might be that the troops had not then moved. Nevertheless there was such a discrepancy between the two despatches as ought to have attracted the attention of the Government. The next despatch in question is that which adverts to the conversation of February 21. It was received in March, and it refers to a conversation which took place at a party at the Hereditary Grand Duchess's, and is as follows. The Emperor said:— I repeat to you that the sick man is dying; and one can never allow such an event to take us by surprise. We must come to some understanding; and this we should do, I am convinced, if I could but hold ten minutes' conversation with your Ministers—with Lord Aberdeen, for instance, who knows me so well, and who has full confidence in me, as I have in him. He repeated this in such a manner as led at once to the conclusion that if the sick man did not die of his own accord, it would only be because he was to be killed. Sir Hamilton Seymour in that despatch expresses his own opinion to that effect; and I beg the attention of the House to the warning given by him to Her Majesty's Government in putting the only construction upon this act of the Emperor of Russia which common sense will admit in the matter. Sir Hamilton Seymour, in the same letter, says:— It is hardly necessary that I should observe to your Lordship, that this short conversation, briefly but correctly reported, offers matter for most anxious reflection. It can hardly be otherwise but that the Sovereign who insists with such pertinacity upon the impending fall of a neighbouring State, must have settled in his own mind that the hour, if not of its dissolution, at all events, for its dissolution, must be at hand. Then, as now, I reflected that this assumption would hardly be ventured upon unless some, perhaps general, but at all events intimate, understanding existed between Russia and Austria. Supposing my suspicion to be well founded, the Emperor's object is to engage Her Majesty's Government, in conjunction with his own Cabinet and that of Vienna, in some scheme for the ultimate partition of Turkey, and for the exclusion of France from the arrangement. Here is a distinct warning, a clear construction, and an explicit statement fairly communicated to Her Majesty's Government. What followed? On the very same day the Government received this note they also received another despatch dated the day after—namely, the 22nd February, from Sir Hamilton Seymour; and in that despatch they are informed that his anticipations are actually fulfilled, for that in a conversation which he had held with the Emperor of Russia the next day, that Sovereign had thrown out those proposals for a partitioning of the estate of the dying man which he had suggested was in his intention, and that he offered Egypt and Candia as the spoil for England. The next despatch is one to be found in the old series of papers, those just published, and it explains the reasons of Colonel Rose for demanding that the British fleet should be sent from Malta to Vourla. He wrote thus:— Constantinople, March 7, 1853. The Grand Vizier said that the Russian Government evidently intended to win some important right from Turkey which would destroy her independence, and asked me to request the British Admiral to bring up his squadron to Vourla Bay from Malta. Feeling the intimate conviction that if the Sultan were not supported on this occasion, he would call to his councils a Ministry selected under Russian influence, I informed His Highness that I would tell your Lordship that I felt convinced that the safety of Turkey required the presence of the British squadron in those writers. M. Benedetti said the same as regards the French squadron. But these assurances did not tranquillise the Grand Vizier's mind; he thought that Turkey would be lost before an answer could arrive from England and France. The Russian Government had not kept faith with Her Majesty's Government; instead of withdrawing or allowing her troops to be stationary, she had advanced them up to the Turkish territory, ordering provisions for those troops in the Turkish provinces, without having ever declared or stated her cause of complaint against the Porte to the Porte—a thing unheard of amongst and contrary to the rights of civilised nations; she was taking other warlike measures, maritime as well as military, on a very great scale, unmistakeably with the view of overcoming Turkey's independence, or making war on her. This was received on the 29th of March by Her Majesty's Government. The next despatch was one from Consul Yeames, received by the Government on the 11th of April:— I beg leave to refer to my letter of the 4th instant, and I have now to inform you that the movements of the 5th corps have of late been hastened, so that the three divisions of infantry are to be assembled in the positions described before the end of the present month (O. S.). It is in particular to be observed that the 14th division, as well as the 13th, is prepared for an expedition by sea. The troops, including the officers, are to carry rations for four days, and knapsacks for the officers are now made for that purpose. I hear there is to be no baggage further than can be thus carried, and no horses will be embarked. …. Great exertions continue to be made by the Admiralty at Nicolayeff and Sebastopol to have everything that can swim ready for sea. I come now to two despatches received on the 15th of April, the one from Colonel Rose. The writer says:— Prince Menchikoff, as I learnt yesterday (March 30) from the Grand Vizier, has tried to extract a promise from Refaat Pasha before he made known to him the nature of his mission and of his demands, that the Porte shall snake a formal promise that she will not reveal them to the British or French representatives. The next and last despatch he would refer to was one from Vice Consul Cunningham, which was received on the same day:— Galatz, March 28, 1853. I have to inform your Lordship that fresh orders have been received in Bessarabia to prepare for the passage of troops, and to get waggons ready for the transport of baggage. It is said, and such appears to be the case from the amount of preparation ordered, that two corps d'armée, upwards of 120,000 men, will pass, and waggons are ordered to be ready for the 10th of May (O. S.). Whenever orders are given to make preparations, the greatest secrecy is enjoined. Hitherto no troops, in addition to the five battalions mentioned in my last, have entered Bessarabia, but it is understood they are marching forward from all directions. I shall trouble the House with no more extracts. Those I have given refer to the information in the hands of Her Majesty's Government when the right hon. Gentleman made his financial statement. They commence on the 7th of January and end on the 15th of April. They begin by informing the Government of the advance of 144,000 Russian troops to the Turkish frontier, they go on to the secret proposals of the Emperor, they show the alarm Prince Menchikoff's declaration had caused at Constantinople, they repeat the failure of proposals, and inform them that the whole time the Russian troops are advancing in all directions upon the Turkish provinces. The last extract is dated April 15—the right hon. Gentleman proposed his Budget on the 18th of the same month; and the Government was therefore in possession at that period of all the information which I have now read. The question I would ask is this, could the Government, knowing these facts, shut their eyes to the real state of things, or avoid seeing that in all human probability, if this country was not to become a party to the iniquitous partition of Turkey, which had been proposed, we should inevitably be involved in a war with Russia? I think I am justified in putting this alternative. Was that a moment, therefore, for a prudent and patriotic Minister, holding the high office of Chancellor of the Exchequer, to come down to this House with financial proposals, the real tendency of which was to weaken and impair those national resources that, under the circumstances in which the country was placed, it was his first and most imperative duty to guard with unparalleled jealousy? It was, however, at that moment that the right hon. Gentleman undertook a financial operation, which might, perhaps, have been well enough in a period of peace with an unclouded future, but which with war imminent and the future enshrouded in darkness could not fail to act as a serious drain upon the resources of the country. What has been the result of this operation? The balances in the Exchequer, which every prudent Minister retained against the occurrence of adverse contingencies, were altogether exhausted. In an annual paper put forth by the statistical department of the Board of Trade I find the balances of the Exchequer for the last twelve years. I pass over the years 1840, 1841, and 1842, because the country was only just then labouring under the effect of the alterations which had been made in her tariff, and struggling to emerge from the financial difficulties which they had created. What was the policy of Sir Robert Peel, the financial predecessor of the right hon. Gentleman? The balance of 1843 was the lowest in amount of these balances, because the country had only just begun to recover in its finances; but this and the other balances were as follows:—

1843	…	…	…	£4,716,000
1844	…	…	…	6,254,113
1845	…	…	…	8,452,090
1846	…	…	…	9,131,282
1847	…	…	…	8,457,691
1848	…	…	…	8,105,561
1849	…	…	…	9,748,539
1850	…	…	…	9,245,676
1851	…	…	…	8,381,637
1852	…	…	…	8,841,822

The latter was the amount when my right hon. Friend near me (Mr. Disraeli) resigned the office of Finance Minister of this country. At the commencement of this present year the right hon. Gentleman the Chancellor of the Exchequer had reduced the balance one-half—the amount in 1853 being 4,485,230l. I feel myself justified, therefore, in saying, as I have done on a former occasion, that this country is entering upon a war with an empty Exchequer, and that that is one of the main causes of the heavy tax which the right hon. Gentleman has imposed on the country. I will not, however, dwell longer on the subject of the financial operations to which I have adverted. This part of the subject was amply dealt with the other evening. It was severely, and, I am sorry to say, justly censured in a former discussion. I now propose to turn to the plan submitted by the right hon. Gentleman in the peace Budget, when he brought it forward under the circumstances to which I have alluded. I have a right to complain, and the country has a right to complain, that the war involves us in an obnoxious impost—that the income tax is to be doubled for the first part of the year—not that the people would object to any amount or kind of impost in the prosecution of a just war—but I am bound, in justice to the country, to maintain that this obnoxious impost ought not to have been reverted to if by any prudent course such a step could be obviated. The right hon. Gentleman had dealt with the finances of the country during the past year under circumstances which were not justifiable, and I am confident that if the House had known, and the country had known, what we know now, and Her Majesty's Government did know then—if we had known the state of the negotiations, and the almost certainty of coming war, we should not have passed the Budget of the right hon. Gentleman, or have allowed him to endanger the resources of the country to the extent he has done. I am always unwilling to embitter discussion by personal altercation, and no one is less disposed than I am to make personal imputations on a Gentleman for whom, whatever my political differences with him may be, I have always had private esteem. But I will appeal to the right hon. Gentleman himself to say whether the proposal made to us in the Budget of 1853 was perfectly fair and ingenuous under the circumstances in which it was made. The right hon. Gentleman came down to the House to ask us to renew the income tax fur seven years. When he made the proposal he frankly avowed that the income tax as he proposed it was an unequal tax. He told us frankly there was one particular class in the country which was called upon to pay 9d. in the pound on property, while all other classes would only pay 7d. in the pound, but he accompanied this announcement with this proposal—he said, if you will adopt the income tax for seven years, I will only ask you for 7d. for the first two years, 6d. for the next two years, and 5d. for the remaining three years, after which the income tax will cease. I admit that when the right hon. Gentleman was asked whether the income tax would really expire at the end of seven years, he took very good care not to involve himself in his reply to any great extent. But certainly the House did not then know he had in his possession information, in virtue of which information, and as a natural result of that information, the income tax before twelve months were expired would be doubled. It was now fourteen pence in the pound. And I think the right hon. Gentleman will hardly deny, if the House knew the state of our foreign negotiations—known then to Ministers—that they would not so readily have fallen in with the proposition of the right hon. Gentleman, and given him an income tax for seven years on the faith of a proposition that the income tax was gradually to lessen, and in seven years should altogether expire. It would have been more candid, more generous, and more becoming his high personal character, if the right hon. Gentleman had frankly told us the state of European affairs, rather than to hold out a hope that the income tax would expire at any given period; and that if the necessity should arise—though he told us there was a difference between the amount paid by the land and that paid by other classes of property, the difference being somewhere about 22 per cent—to increase the tax, that its inequality should be remedied. The right hon. Gentleman will, I am sure, do this side of the House the justice to recollect, that although he had himself admitted that incomes derived from land and houses paid a much higher tax than other descriptions of income—a difference amounting, as he had just stated, to 22 per cent—and, although the agricultural class had long suffered under the injustice of paying upon the gross rent, while others paid only upon the net rent, yet they made no objection to going on with the tax upon the condition of having only to pay the income tax for the period which he proposed. But I will say, if the right hon. Gentleman was looking forward to increase the income tax, as he ought to have done, because afford- ing the means to pay the expenses of the war, being aware that the income tax was always regarded as essentially a war tax, and if made a war tax the 7d. must be doubled, and as I think before many months have elapsed to be more than doubled, I say the country had a right to have the tax made an equal tax, and the right hon. Gentleman was bound to take one of two courses, either to make it a graduated tax or to say all classes paying the tax ought to be taxed alike, and no distinction to be drawn between the owner of real property and other property, but that the difference of 22 per cent shall be done away with, and all incomes contribute on the same footing. I will now advert to another part of the Budget of the right hon. Gentleman, in which I think he dealt not wisely, but improvidently, with the resources of the country, by repealing the duty on tea and remitting the duty on soap. The right hon. Gentleman has contended, and I have also heard it asserted out of doors, that although taxes to a large extent were taken off, yet the revenue did not suffer. But I do not think the right hon. Gentleman is in a position to urge that argument, although I have heard it urged, and cannot acknowledge the justice of it, because, with the prospect of war hanging over us, I think he was not justified in impairing and weakening the resources of the country. It appeared to me if it should become desirable to increase taxation, and adopt a succession tax, which Mr. Pitt always regarded as a war tax, the plan of the right hon. Gentleman ought to be to retain all the means of revenue in his possession, and which he was at perfect liberty to retain, and which a word to the House would have induced the House to support him in retaining. It appeared to me, if new imposts were required to support the burden of the war, that the country would rather have duties retained, however objectionable otherwise, than to have a further increase of the highly objectionable income tax. But what was the course of the right hon. Gentleman; it was rashly and unnecessarily to abandon the soap duties, which yielded a net revenue of 1,110,000l. This amount was completely thrown away, I think most improvidently and unnecessarily thrown away. I need not point out to the House how much more easy it is to retain productive branches of revenue, little complained of, than to revert to the income tax for increased supplies. With respect to the remission of the tea duties, the right hon. Gentleman, I find, has had another correspondence with his old friend the Birmingham clerk, who is at issue with the right hon. Gentleman, for he does not appear to agree in the right hon. Gentleman's statement of the comparative advantages of the remission of tea and soap duties set against the income tax, and who is still less satisfied now that he is called upon to pay an additional income tax. But this is not the light in which I am dealing with the question. The question is whether, with coming war, with an almost certainly coming war, it was wise for the right hon. Gentleman to tamper with the great and important items of revenue in this way? It only required firmness and candour on the part of the Chancellor of the Exchequer to have retained the soap duty and other imposts? It is true my right hon. Friend (Mr. Disraeli) dealt with the same items in his Budget; but at that time all was peace, and we were likely to remain at peace. And I say this with a feeling of pride. I say, that the overtures for the partition of Turkey were not made to the late Government—they were not made by the Emperor except to "his old friend of forty years' standing." I have some satisfaction in this fact, that we had no knowledge of the coming danger, and, therefore, the circumstances under which my right hon. Friend intended to deal with the tea duties were wholly different to those under which the right hon. Gentleman the Chancellor of the Exchequer proposed to deal with them. The tea duty was not a trifling item of revenue. The right hon. Gentleman says the amount of remission will be enormous; it would be, on a fair calculation of all circumstances, about 1,300,000l.—too much to expect the revenue would recover all at once. The right hon. Gentleman estimated the loss on the first year at 366,000l., but that sum turned out to be 375,000l. The next year the loss was put at 510,000l.; the next. 454,000l.; the next, 604,000l.; making altogether a sum of 1,934,000l. The right hon. Gentleman then made calculations as to the effect of increased consumption and the cessation of effects from that cause at the end of four years. But then for four years—with the knowledge of almost inevitable war—the right hon. Gentleman was tampering with large items of revenue. The tea and soap duties produced together about 3,000,000l., and it was this large amount the right hon. Gentleman was endangering. The calculation of loss on tea duties last year was not too sanguine, for instead of 366,000l. it amounted to 375,000l. Then comes the question whether, after parting with those large items of revenue at a moment of danger, when the country required all its resources to be at command, the right hon. Gentleman is in a position to say—"Although I lose these large items, I gained an equivalent, and did not hurt the revenue." I will now turn from the question of having parted with these large items of revenue at a moment of great public necessity, when it was almost certain that the country would require all her resources to be in the fullest possible vigour, to a question at which I have before glanced, namely, whether the right hon. Gentleman was in a position—admitting the argument, which I do not—to say that, although these large items were reduced, he had added others as an equivalent. I must again turn to the papers, and I beg to call the attention of the right hon. Gentleman the President of the Board of Trade to the part of the papers to which I am about to advert. It seems to me that there is an error in the figures. It seems to me, perhaps unintentionally, that the mode of stating these figures is hardly fair. At page 6 of the statistical extract there is given a tabular statement of the amount of taxes repealed or reduced, and the amount of taxes imposed in each year, from 1840 to 1853 inclusive. I ask the attention of the right hon. Gentleman the President of the Board of Trade to the entry for the year 1853. The entry for taxes repealed in that year amounts to 3,247,474l. That was the amount of taxes taken off by the Budget of last year; and on the other side were the taxes imposed, which were stated to amount to 3,356,3831.; showing by this paper that the taxes imposed exceeded the taxes reduced by about 100,000l. I wish also to state that I think the mode of making this entry is calculated to mislead the public. It is an annual paper, and therefore, as an annual paper, I contend it ought to convey to the public at once the figures as they bear upon the current year. The paper ought to convey to the public the effect of financial operations for specific periods. Now, is it right to enter the amount of the succession tax at 2,000,000l. in 1853, when the Chancellor of the Exchequer himself estimates that he shall be four years in receiving that amount? The right hon. Gentleman says he only expects 500,000l. in the current year. It is, therefore, misleading us to insert 2,000,000l. when 500,000l. only will be received. If it be desirable to show the effect of taxation, the amount ought to be entered in a different manner, and there ought to be something on the face of the paper to show that the 2,000,000l. stated to affect the revenue of 1854, was short of the amount by 1,500,000l. I now wish to call the attention of the right hon. Gentleman to the entry relating to the tea duties remitted, which is stated to be 915,877l. These figures appear to be erroneous. That certainly was not the loss of last year, for that was 375,000l. It certainly could not be the aggregate loss of last year and this year together, for that would be 885,000l. Certainly it was not the ultimate loss when the whole change was effected, for the Chancellor of the Exchequer put it down at nearly 2,000,000l. of money—he put it down at 1,934,000l. If I am in error, I shall be glad to be corrected. I am sorry to weary the House by going into these details; but, with the qualifications I have pointed out, I will ask the House to regard the actual financial result of the Chancellor of the Exchequer's remissions as applied to the present year, when we are about to embark in an unfortunate and too probably a protracted war. Instead of this paper showing that the succession tax had made up the deficiency, the actual result of the remissions is a sacrifice, in round numbers, of 1,300,000l. of the resources of the present year, and that at a time when it was most desirable to possess them. The right hon. Gentleman told us the other evening, when applied to on behalf of the communication with Dublin, that, just now, every farthing was precious. Why did he not think of this in 1853? Was it wise or constitutional to come forward with popular propositions?—why they were popular I will not stop to inquire. I expressed my opinion on them in the last Session, and since then my opinion has undergone neither change nor modification. Let me advert for an instant to the connection of my line of argument with what fell from the right hon. Gentleman on the subject of defraying the expenses of the coming war—namely, to make the revenue of the year meet the expenses of the year. I do not mean to say the right hon. Gentleman attempted to mislead the House with regard to the calls he might have to make upon us. He intimated his intention to double the income tax for six months, at the same time letting the House know the addition might be insufficient to cover the additional charges; of course, the amount of actual expense to the country must depend on the duration of the war. But what the right hon. Gentleman did not say—and while I subscribe to the justice of the principle to defray current expenses from current revenue, this being a sound principle so long as it can be adhered to without imposing intolerable burdens on the country—what he did not say was, that he foresaw a war. And this gives double force to what I have said with regard to his financial operations in 1853. I say most emphatically that Government must last year have foreseen the war. I do not believe you could collect a jury from any part of the kingdom who, after reading the papers I have referred to, could have hesitated to come to any conclusion but one—that war, humanly speaking, was a probability. Government, I say, must have foreseen war, knowing what they did, and with the information they had. Well, then, if the right hon. Gentleman wished—and he was right in wishing—to defray the expense of the war out of the revenue of the year, why did he waste the revenue—why did he part with the sum of 1,300,000l. from the revenue, which nobody asked him to give up? Why did he not reserve these impositions to swell the revenue, which even when thus swelled will, I fear, be found inadequate to defray the expenses of the war? Well, the right hon. Gentleman tells us, in addition to the principle mentioned, he intends to defray the expenses of the war out of direct taxation. The right hon. Gentleman feels that the career of last year is difficult to retrace; but if the expenses are to be met by direct taxation, let him remember the strain he is putting on the resources of the country—let him remember that by resorting to doubling the income tax, he is doubling a tax which is inquisitorial and oppressive, and which he even acknowledges is unjust. I say your prudent course would have been to have reserved the items you have so rashly parted with, and then you would have had a better chance of adding direct taxation to these items. You would have had a better chance of carrying out your principle—in which I say you are right—that of defraying charges from the revenue of the year. Sir, I thought it my duty to draw the attention of the House to the course taken by the Government, and to indicate the causes why the addition to an obnoxious tax has been laid on. I move no Amendment. I have no intention to resist the progress of the measure. In a few moments it will be imposed on the people, and I hope and believe, in the event of this unhappy war continuing, that the representatives of the people will continue to act with the same spirit they have evinced; and if so, they will, I am persuaded, represent the real feelings and desires of the people. If the present Government remain in their places to conduct the war, the country will support them without hesitation and with unanimity never exceeded, provided they conduct the war with energy and vigour; and God grant they may conduct it to victory; and the country will, I feel confident, not refuse to grant the sum that may be wanted, but rather, with unparalleled liberality, will give as large means as may be desired to effect this great object. But, then, I say to the Government, the people have a right to expect, in this solemn state of affairs, that you manage the finances prudently, and that you do not waste or impair the resources of the country for the sake of an ephemeral popularity, but that if you are obliged to call on the people to bear burdens they have hitherto willingly borne, at least those burdens be so imposed as to be equal and just.

MR. CARDWELL

Sir, I think it may be fairly asked what object my right hon. Friend who has just addressed us had in view in raising this discussion on the third reading of the Income Tax Bill. Certainly it was not to debate the subject of the income tax, or the propriety of raising the amount proposed by this Bill. The right hon. Gentleman entirely concurs in the opinion it expresses, and supports every one of the arguments that have been addressed to the House in support of it. What, then, was his object? It certainly was not to debate the Eastern question; for he told us, when he began to read extracts from the secret despatches, that there was nothing he so much desired to avoid as anything that could give rise to a debate on the Eastern question. And I pledge myself to the House that I will carry into effect the wishes of the right hon. Gentleman by avoiding to follow him into that subject; but I cannot help bringing one circumstance to the notice of the House, which I hope hereafter the right hon. Gentleman will bear in mind. The House and the country will learn from the assertion that has fallen from the right hon. Gentleman, that in the middle of April last, if it had been his duty to direct the financial policy of the country, and if at that period he had been in possession of those secret despatches of which Her Majesty's Government were then in possession, the right hon. Gentleman would have prepared his Budget, and have addressed the House, under the deep and settled conviction that there was then presented to the Crown of England a certain alternative. Again, towards the close of his speech, he adverted to it, and he said he could not too emphatically repeat his conviction that in the middle of April last, when my right hon. Friend the Chancellor of the Exchequer laid his Budget before the House, there was presented to the Crown of England an alternative, and that was—war on the one hand, or, on the other, being made a consenting party to the disgraceful partition of the dominions of an ally. When we do come to debate the Eastern question, and when the topic shall be urged, that this is an unnecessary war, which might have been averted by greater promptitude and greater vigour at an earlier period—namely, when the invasion of the Principalities took place—I hope toy right hon. Friend will again emphatically declare his conviction that there was then presented to the Government the certain alternative either of dishonouring the Crown of England or of engaging in an inevitable war. The right hon. Gentleman said he had for his object to enforce upon the Government the duty and the necessity of a prudent financial administration. He said it was their duty to maintain the balances in the Exchequer unimpaired, and not to waste the resources of the country by giving a continued remission of taxes in obedience to a desire to court popularity. The right hon. Gentleman went on to say what would have been the nature of the Budget he should have proposed, if, with that knowledge of the secret correspondence, he had prepared the Budget of last year. I think we are much indebted to the right hon. Gentleman for the light he has thrown upon the subject. The right hon. Gentleman talks of courting popularity, and of making remissions in order to court popularity; but I should like those who pay the taxes of this country—I should like those who are subject to what the right hon. Gentleman is pleased to call the unequal burden of the income tax—to listen now to the speech which the right hon. Gentleman has made. It is not long since we were told that the unequal burden of the income tax rendered it necessary to diminish the burden in Schedule D, and to reduce it from 7d. to 5¼d., in order to redress that inequality; but the right hon. Gentleman has learned such a lesson since, that he now speaks of the injustice the income tax imposed by calling nominally equal what he now says is, to the extent of 22 per cent, an unequal tax upon the holders of fixed property. That is an admission which we are indebted to the right hon. Gentleman for having made. Then the right hon. Gentleman said it was wrong to part with the duty upon tea, and that it was also wrong to part with the duty upon soap. I do not think the people of England will be of opinion that under the circumstances of last year it was wrong to part either with the duty upon tea or upon soap. I am quite sure that from the argument of the right hon. Gentleman they would draw a very strong confirmation of the propriety of that policy which by imposing the succession tax, has added a contribution of 2,000,000l. annually to the public Exchequer. The right hon. Gentleman has adverted to the circumstance of the total estimated amount of the secession tax, communibus annis, having been inserted in the statistical abstract, instead of the fractional amount for the first year. All I can say on the I subject is, that in future issues of the paper, the additional information shall, if necessary, be given in a note at the bottom of the page. But I want the House to take notice of this—that if the right hon. Gentleman had the management of the finances of this country, so far from reducing the burden of the income tax in Schedule D, he is of opinion that a certain class of the taxpayers of the country is injured by the income tax as it now stands to the extent of 22 per cent. I wish the House and the country to bear in mind that if it had depended upon the right hon. Gentleman, we should not have had the remission of the soap duty or the reduction of the duty on tea. But, said the right hon. Gentleman, "It only required firmness and candour on the part of the Chancellor of the Exchequer to have retained these taxes." Well, certainly, if my right hon. Friend, being anxious to retain the income tax, had come down to the House last year and alarmed them with greater apprehensions of war than he himself entertained, that might have been imputed as a want of candour. But by what stretch of imagination can it be supposed that a Chancellor of the Exchequer, who was desirous to retain a tax, would conceal from the House of Commons the magnitude of his apprehensions with respect to foreign affairs? But could my right hon. Friend so easily have retained any tax which he might have desired to keep? When he was pressed on the subject of the advertisement duty, the attorneys' certificate duty, and the duty on hops, did he always obtain that unanimous support in maintaining these imposts upon which the right bon. Gentleman opposite now tells us that he might have depended? How deep then must be the right hon. Gentleman's conviction of the certainty of war in April last, if it would have induced him—could he have then known the state of affairs—to refuse his vote on those occasions when he supported a remission of taxation; nay, it would even have induced him to withhold the boon which his own Government proposed to grant—the reduction of the duty on tea! But if he feels sure that his conviction of the certainty of war would have been so strong in April last—had he been in possession of the information in the hands of the Government—do not let him impute the war to anything that has passed since April last. [Sir JOHN PAKINGTON here made an observation which did not reach the gallery.] My impression is that the words were "certain alternative." ["No, no!"] Well, then, it is not so. But in that case what becomes of his argument against remitting these taxes? But, Sir, what can be the object of raising this discussion upon the third reading of the Income Tax Bill? If you say that the Exchequer should be replenished—and all your arguments are directed to show that the Exchequer is not now sufficiently full—why do you address these arguments to the House on a third reading of a Bill for imposing an additional income tax? The right hon. Gentleman referred to this return for the purpose of pointing out some minute alterations which he thinks should be made in one or two lines of that return. If he would appeal to the statistical history of the country contained in that return, he would find what a moral lesson that history gives—a lesson never so valuable as at a time like this, when all the nations of the world, and particularly the nation with which we are now drawn into collision, are examining the condition of this country. That history would have read the right hon. Gentleman an important lesson on the policy of making timely remissions of taxation, and upon the strength which they have imparted to this country. The right hon. Gentleman has said that, in deference to a desire for popularity, the revenue was improperly diminished last year. But the paper to which he has referred would have told him that, improvident as was the Budget of last year, although the succession tax did not produce 2,000,000l., but only a small portion of that sum, and although the soap duty was wholly and the tea duty partially remitted, that, nevertheless, the balance of income over expenditure during the past year was 3,250,000l. The right hon. Gentleman is very learned as to the amount of the balances in the Exchequer, but he has not told the House of the reduction of debt which has taken place. This paper would have shown him that the total remission of debt in the course of last year was 8,500,000l.; and that, therefore, if the balances in the Exchequer have been reduced 4,000,000l., there is a clear advantage of 4,000,000l. to the credit of the nation on that account. If he had looked to the Exchequer bills, he would have found that they are probably lower in amount than they have been during the present century. He would have found that, in spite of a harvest which compelled us to make almost unprecedented imports of grain, and in spite of the apprehensions of war, trade had been greatly on the increase. He would have found every evidence of growing prosperity and increasing strength, both for the purposes of peace and war. Then I think that it is certainly very instructive to the House to know, that if the right hon. Gentleman had been in power, with the knowledge which these despatches would have given him, he would not have pursued the policy which this House, in its wisdom—and that, too, with signal success—has thought proper to adopt. The right hon. Gentleman, in conclusion, adverted in terms of just commendation to the spirit in which the present exigency has been met on both sides of the House. I think it will be a circumstance of pride to this country, and of discouragement to its enemies, that we are in a position like that which is disclosed in this return, at the commencement of those hostilities which we all so much deplore. I think it will be a circumstance of satisfaction that we are enabled to meet, at all events, all the expenditure which the House has already thought it necessary to sanction, without the necessity of imposing fresh burdens, or of withholding from the great body of the people the remissions of taxation already given, or of adding to the pressure of the debt that has already been incurred. These are the circumstances under which, at the close of a long period of peace, happily improved for the prosperity and advantage of the country, we find ourselves plunged into war. As there is no Motion before the House, except the third reading of the Income Tax Bill, to which no Amendment has been moved, and as every succeeding argument of the right hon. Gentleman tended more strongly than its predecessor to show the necessity of replenishing the Exchequer, and therefore in agreeing to the Bill, I do not understand why the right hon. Gentleman should have thought it necessary, in giving his cordial concurrence to its principle and objects, to draw the House into a discussion upon the circumstances attending the Budget of a former year.

MR. MALINS

said, that every point in the speech of the right hon. Baronet the Member for Droitwich (Sir J. Pakington) had remained unanswered by the right hon. Gentleman the President of the Board of Trade, and he could not, therefore, congratulate him on his defence. The right hon. Gentleman asked why those on that side of the House had thought proper to raise a discussion on the third reading of the Income Tax Bill. Had he forgot that the proposition to double the income tax for the first half of the year was, in fact, the whole Budget of the Government for the present Session, and that, therefore, if no discussion were raised on this Bill, it would in effect be to adopt the Budget without debate? No Amendment had been proposed, because of the determination of hon. Members on the Opposition side of the House not to impair the vigour of the Government by opposing any proposition they might make for the purpose of carrying on the war with success; but, at the same time, they heartily condemned the policy of the Government in taking off indirect taxes which nobody felt, in order to put on direct taxes which everybody would feel. The right hon. Gentleman was a disciple of the late Sir Robert Peel, and adhered to one part of that right hon. Baronet's scheme. Sir Robert Peel always stated that in imposing direct taxation the amount might be saved to the taxpayer by the remission of indirect taxes. The right hon. Gentleman was now about to double the income tax, and in doing so proposed no new remissions, but reminded them of those which had been made in the tea and soap duties last year. The right hon. Gentleman was mistaken if he supposed that if he doubled the income tax it would be any consolation to the great majority of taxpayers that a remission of 4d. in the pound had been made in the duty on tea, more especially when the Chancellor of the Exchequer had told them that though the duty had been reduced on soap and tea, neither soap nor tea were cheaper. If the right hon. Gentleman would make inquiry of persons acquainted with household affairs he would find a unanimous opinion that the relief by the remission of indirect taxes was, as an equivalent for the income tax, altogether imaginary. Last year when the finances were under discussion it was often stated that it was important the House should be made acquainted with the state of the Eastern question, and the answer was that the public service would suffer if the Government divulged what was going on. He thought that whatever might have been the inconveniences of divulging the negotiations that had been going on last year with regard to the Eastern question, the country would come to the conclusion that much greater inconveniences had arisen from keeping them secret, as, if the secret correspondence which had been placed on the table had been made public last April, the House would not have parted so readily with the sources of the income of the country. All that correspondence was concealed from the country, and the House was allowed to separate in August, after a statement from the noble Lord the Member for Tiverton (Viscount Palmerston) that there was every prospect of the dispute with Russia being speedily settled. The general opinion in this country was, that the war actually commenced when the Russians crossed the Pruth, on the 8th of June. The right hon. Gentleman the President of the Board of Trade said, that it was true that the balances in the Exchequer had been diminished, but that the public debt had also been diminished. The ground of complaint was, that the Government had been paying off a debt without having the money with which to pay it. Because the 3 per cents were at par, the right hon. Gentleman had come down with a proposal to pay off between 9,000,000l. and 10,000,000l of stock. Those stocks he had to pay at par, though the three per cents were now as low as 86. The right hon. Gentleman had ridiculed the idea of borrowing when the funds were at 90; but his (Mr. Malins) hon. Friend the Member for North Warwickshire (Mr. Spooner) warned him that he might have to borrow when the funds were at a lower amount. This bore out the proposition of his right hon. Friend (Sir J. Pakington) that the Government had taken an extremely short-sighted course, and the House would in future hesitate before they adopted a proposition for paying off the three per cents because they happened to be at par. He knew a society which held stock to the amount of 40,000l., and last year they had to consider whether they would accept any of the proposals of the Chancellor of the Exchequer. They had prudently declined all his proposals, and said they would take their money, and the consequence was, that, on the 5th of April, they would receive 40,000l. cash, and at the end of a week become possessed of about 46,000l. stock, thus gaining 6,000l. by the right hon. Gentleman's proposition. It had been proved to the House that the result of those financial operations, if they had been carried into effect last week, would have cost the country 700,000l., and that now they would cost the country 800,000l. Such was the lamentable failure of the right hon. Gentleman's first effort in finance! The success of future efforts of the right hon. Gentleman might, indeed, ultimately prove that he would be cheap to the country even at that price. At present, however, that was the price which they had had to pay for him. In answer to the taunt of the right hon. Gentleman who had last addressed the House, "Why do you renew these discusssions if you are not going to divide?" he (Mr. Malins) answered, that he renewed them because he desired to raise his voice, as he should continue to raise it so long as he had a seat in that House, against the proposition that this war could be carried on by means of direct taxation. He could have understood the right hon. Gentleman proposing to double the income tax if he had still belonged to the great Peel party, but he was at a loss to understand it, associated as he now was with the noble Lord the Member for London, the noble Lord the Member for Tiverton, and others who had over and over again denounced it as the most detestable and obnoxious tax that had ever been imposed upon the people of this country. These associations of men who had no opinion in common led to acting upon no opinion at all; arid it was this constitution of the Government which had led to the war which they were now considering how we should pay for. He wished to ask the right hon. Gentleman, when he saw the three per cents still falling, railway shares reduced not less than 10 per cent, and every kind of property going down rapidly, whether he was still of opinion that the expense of the war could be defrayed by direct taxation raised from year to year? If he did, he ventured to warn the right hon. Gentleman that he had not deceived himself more when he had proposed to reduce the South Sea Annuities in 1853 than he was now deceiving himself in making this proposition. The right hon. Gentleman had admitted that the cost already incurred for the war amounted to 4,000,000l. If, in the first year, it should amount to 12,000,000l. or 14,000,000l., how would the right hon. Gentleman raise that sum by direct taxation? There were limits to direct taxation, and the right hon. Gentleman must not suppose that he could go on indefinitely increasing direct taxes. It became the duty of the right hon. Gentleman the Chancellor of the Exchequer, both for the sake of the country and for the sake of his own reputation, to come to a distinct conclusion with respect to the mode in which he should levy the very great amount of taxation which, in the event of a prolonged contest with Russia, must he rendered inevitable. The right hon. Gentleman would find that the requisite amount of money for that contest could not be raised solely by means of direct taxation, and that he must have recourse, in order to meet the exigencies of the State, either to indirect taxation, or that he must raise the necessary supplies in the shape of a loan. Now, if they were going to carry on a war at the cost of several millions, he did not believe that it would be found possible, by means either of direct or indirect taxation, to procure an amount of money sufficient for the purpose. In that case the right hon. Gentleman must come forward in order to propose a loan, and he (Mr. Malins) for one could not see how such a proposition could fairly be maintained to be based upon injustice to posterity. The present generation were but the occupants of the hour; and if, by a great struggle, the interests of this country were to be permanently benefited, he did not understand why it was that those who were to reap the fruits of that struggle should not bear their share of expense which, in its prosecution, must be necessarily incurred. Upon the same principle that the proprietor of a particular estate made improvements upon that estate, and paid part of the expenses consequent upon those improvements, leaving the remaining portion to be defrayed by his successors, a nation was justified in taking the course to which he had referred, and which it was but too probable the Chancellor of the Exchequer would find it necessary finally to adopt. He hoped, therefore, that the right hon. Gentleman would take the question seriously into his consideration, and that he would take such steps with respect to it so as to prepare for their sanction a system of finance by which might be raised supplies adequate to the successful prosecution of a great contest, without, at the same time, pressing too heavily, and with too great a degree of inequality, upon the present as compared with succeeding generations. The right hon. Gentleman, in proposing to levy the money to meet the existing exigencies of the State by means of direct taxation, was making too great a demand upon the energy and the forbearance of the people. It was highly desirable that the mode in which the burdens which the coming struggle made it necessary that they should bear should not be levied in a shape which was unpopular. Now direct taxation, when carried to a great extent, must necessarily assume that shape. The tax-gatherer was regarded by the people as a most unwelcome visitor, and he thought the right hon. Gentleman would be acting wisely in refraining from pursuing a system of finance which must make a contest extremely unpopular, which it was so desirable we should prosecute with all the zeal and all the energy which it was possible to bring to bear upon it. He therefore trusted that the right hon. Gentleman would take these matters into consideration, and that the Session would not terminate before the House, acting upon an enlarged view of the subject, would settle a system of finance by which the war might be carried on without proving unduly burdensome, grinding, and oppressive, upon the present generation. If this were not done, but direct taxation were increased, those energies of the nation which now supported the Government might be destroyed, and the war become so unpopular that we might eventually be compelled to submit to an ignominious peace.

MR. LAING

said, that two questions of a very different nature had been raised during the debate. The one referred to the financial system which ought to be adopted on the eve of a great war; the other was of a purely retrospective nature, as regarded the conduct of the Government at a former period. The retrospective question—which was one of no great importance at the present moment, except in a party point of view—had formed the great staple of the speeches delivered by hon. Members sitting on the Opposition side of the House. The speech of the right hon. Baronet (Sir J. Pakington) consisted of it almost entirely. For his own part, he attached much less importance to the second question than to the first, and it was to that solely that he intended to address himself. As regarded the past, he would simply say that, in his judgment, on the most dispassionate view he had been able to form on the correspondence that was before the House, he did not think the charge was justified against the Chancellor of the Exchequer, that he had acted with unjustifiable rashness, because, in April last, he did not foresee this war as an inevitable necessity, and because he then reduced the Budget for the year. The argument urged by the right hon. Baronet was, that there was then a clear alternative before the Government, and that their only choice lay between embarking in war or acceding to all the demands of the Emperor of Russia. But in his judgment there was a third supposition possible in the circumstances, namely, that the Emperor of Russia would do as he had done on previous occasions when similar overtures were made, and that he would, on finding this country opposed to his views, withdraw his pretensions and proceedings. However, that was purely a question of opinion, on which it seemed to him idle or impossible to enter, unless it were wished to renew those long discussions on the Eastern question, which had already occupied so much of the attention of the House. By far the more important question of the two was, that as to the means of raising money—the question of direct taxation or indirect. It was true that there had been no opposition to the Motion, but speeches had been repeatedly delivered on the other side of the House, the purport of which was to persuade the country that the in- come tax was so excessive and unpopular, that they ought not to submit to it, and that, in point of fact, the necessary funds for carrying on the war should be raised by some other means. He conceived it to be a question of vital importance to the country, whether, being embarked in the present war, it was to be followed by the additional calamity of retracing the commercial policy of the last ten years, and, step by step, undoing what had been done since 1842 in the remission of indirect taxation. In that view of the question, it did seem to him not unimportant that some of those representatives of commercial interests more peculiarly affected by the tax, who, like himself, had a very strong opinion that it was not so unpopular, should assert that opinion on the present occasion. The question of continuing the income tax was, at present, really very much in the same position as it was in 1842, when first brought forward. At that time the income tax was really submitted to as, and for the sake of, a reform in our financial position. It was not supposed by any one to be popular in itself, but it was thought infinitely less unpopular than that heavy indirect taxes should be imposed upon the necessaries of life, the great articles of consumption by the labouring classes, and the raw materials of commerce and manufactures. It was considered then, also, that a more considerable sum of money could be levied by a moderate amount of direct taxation than could be done if it were taken up by way of indirect taxation. Now, at the expiration of ten years from that period, they were precisely in the same position. They had now additional burdens to meet, and they must be met in one way or other, either by increasing the present income tax, or by retracing their steps, and imposing a great measure of indirect taxation. The question was, which of these courses was most advisable, and which would be most popular. He could say, without hesitation, that a return to the income tax would be much the more popular, and much the more advisable and beneficial. What did experience teach us with regard to the income tax during the last ten years? That it was a most excellent instrument for cheapening the necessaries of life for the labouring poor; and next, that it had enabled the Chancellor of the Exchequer to remit taxes which pressed heavily on the raw materials of those articles of manufacture which entered most largely into the consumption of this country. During the ten, from 1842 to 1852, in which the income tax had been in operation, the total remission of Customs duties on imports was 8,677,488l. The articles included under that head were cotton, timber, and a variety of articles of provision, which were of the greatest necessity to the comfort of the labouring classes. These taxes had proved to be serious impediments to the trade and commerce of this country. During the same period there had been a large remission of Excise duties, which affected the sanitary condition of the people or were restrictions on trade. That remission amounted to 3,762,000l. So that the result was this, that by levying during the last ten years an income tax of about 5,500,000l. taxes to the amount of 12,430,000l. had been remitted. And was the revenue a loser by the course that had been adopted? On the contrary, the revenue had gained enormously; for whilst the total average of the revenue during 1840, 1841, and 1842 was 47,539,188l., it was now, at the end of ten years, 54,430,344l., showing an increase of 6,891,156l. Previously to the introduction of the income tax, the expenditure of the country was greater than the revenue by 3,179,509l.; but the result was now very different, for we had a surplus revenue of 3,255,000l. And when hon. Gentlemen talked of the unpopularity of the income tax, they ought to be prepared to accept the alternative of retracing the steps taken during the last ten years, and reimposing the taxes which had been remitted, or of assenting to the course now proposed by the Chancellor of the Exchequer. He (Mr. Laing) felt perfectly certain of this, that nine of every ten of the intelligent men in this country would rather pay a large income tax than have the taxes which were taken off since the introduction of the income tax reimposed upon those articles which entered most largely into consumption in this country. He would venture to say that there was not one in ten of men of business and intelligence in this country who would not most cheerfully vote for an increased direct tax in preference to increased indirect taxation, so long as the honour of the country might require him to bear the burden. In 1842 this country, unhappily, was divided into many parties and factions. Chartism, especially, was then rife. There was a great deal of dissatisfaction with the aristocracy on the part of the middle and working classes. The two latter classes were disaffected towards the institutions of the country. But those differences had been happily removed. He believed that this country presented no more remarkable spectacle than that improved feeling which had grown up in this country during the last ten years among all classes. What could be more satisfactory than to see all classes in this country, from the highest to the lowest, on the eve of a great European war, cordially and loyally attached to the institutions of the country? And to what were we indebted for that great result? Mainly, he would maintain, to that great moral spectacle which the upper classes afforded to the middle and lower classes, of willingly submitting to direct taxation for the purpose of doing away with those unequal burdens which previously pressed upon the great mass of the labouring population. He believed that the people who paid the income tax were too wise to be led astray by that cry which some hon. Gentlemen on the Opposition benches wished to get up against it. The people who paid that tax were men who could weigh results well; and, unless the taxes that were proposed to be substituted for it were likely to be less objectionable, he was certain they would not assent to its removal. Hon. Gentlemen opposite, who alleged that there was an impatience on the part of the people of this country to bear taxation, were doing all they could to provoke the Russian Emperor to continue in his career of aggression and spoliation; for he would argue with himself, that a people who were impatient at taxation in ordinary times would not consent to be taxed to carry on a vigorous war against his injustice—he would conclude that we would not consent to bear the burden of bringing this war to an honourable conclusion. Now, for his (Mr. Laing's) part, he did not believe that there was such impatience in this country against taxation as some had represented. He believed that the people of this country had entered into this war deliberately—with no enthusiasm—with a calm consideration of the consequences. They had entered into it because they believed that it was absolutely necessary for the honour and interests of this country, and they believed that the best mode of prosecuting it with vigour and success was by submitting to an increased amount of direct taxation. He, therefore, believed that hon. Gentlemen on the Opposition benches, who thought of making political capital out of a clamour against the income tax, would find themselves grievously deceived.

MR. VANSITTART

said, he thought it was grossly unfair and unjust to endeavour to persuade the House to levy a war tax entirely by direct taxation, on the plea that it was to direct taxation, and direct taxation alone, they owed the increase of the revenue which had lately taken place, and which, though it might in some degree be owing to the lightening the burdens of commerce, was also owing, in a much greater degree, to the ability and energy of our manufacturing population—to the energy and skill with which Englishmen had carried their commerce to every part of the world, and had recently discovered sources of wealth which up to that time no one in that House had dreamt of. He thought also that the hon. Gentleman who had just sat down, and the right hon. Member for Oxford (Mr. Cardwell) had made some very erroneous observations with reference to the state of the Eastern question. With respect to the correspondence which bad been laid upon the table of the House, and to which reference had been made that evening, he should observe, that it must have placed clearly before the Government in April last the consideration that war was at least extremely probable. There was then undoubtedly a greater probability that war would take place than that peace could be preserved, and he could not help thinking that under those circumstances the Chancellor of the Exchequer had been incautiously and wantonly playing with the resources of the country in proposing the financial scheme which he had last Session submitted to the House. He maintained that if hon. Members who sat upon his (Mr. Vansittart's) side of the House were acquainted with one-tenth of the information which the papers to which he referred contained, there was not one of them who would not have repudiated the course which the right hon. Gentleman had asked them to sanction. He thought they would be doing quite right, and that though they did not mean to oppose the income tax, still there was ample ground for discussion, because if those who were now managing the financial affairs of the country had been guilty of a great lack of discretion when discretion was most required from them, it became the more incumbent upon that House now to impress upon them the necessity of caution, and, at the same time, the necessity of taking bold measures when boldness was required. He would add one more consideration. The sum which the right hon. Gentleman had, by his manœuvres of last year, lost to the nation, amounted at the present time to a sum considerably more than the increased sum which the right hon. Gentleman proposed to take from those who now received salaries between 100l. and 150l. a year. That was the class also which would feel the increase in the tax the most deeply, because the rise in the price of provisions had forced many of them to trench upon their income for the next quarter, and that evil would be felt by them still more, if there was a heavy pressure upon the money market. Under these circumstances, he considered that it required not only prudence but boldness in a Minister, and they all expected and hoped that, should the crisis in the money market come, the Minister would not hesitate or waver; that he would not wait to apply his remedy till the pressure had been converted into panic and thousands had been reduced to ruin, but that he would at once apply the remedy with a bold hand; and seeing that the right hon. Gentleman himself was mainly responsible for the present pressure by the manner in which he had thrown away so large a sum from the present uses of the country, he hoped he would now act with the more boldness and openness, and save the country from the consequence of his former rashness.

MR. GREAVES

said, that he wished to say a few words on the injudicious attempt which had been made by the Chancellor of the Exchequer to reduce the interest on Exchequer bills. The right hon. Gentleman perhaps thought, that because the premium was higher than the annual interest, it was an absurdity that the same rate of interest should be continued. This rule might apply to bills of exchange, but there was no analogy between bills of exchange and Exchequer bills, for the former were usually applied for temporary purposes, while the latter were often held to be ready upon any emergency which might arise. He must ask, was it expedient to reduce the interest on Exchequer bills at the time when the interest on bills of exchange was rising in the market? The experiment had failed, but they ought not to expect failures from the Chancellor of the Exchequer, who had the best possible means of information at his command. He (Mr. Greaves) believed that the right hon. Gentleman had expected that money would have been plentiful; and if the tide had continued to flow as the right hon. Gentleman had expected, he would have come into port on the crest of the wave, but he had now been left high and dry with his cargo of unconverted South Sea stock and unrenewed Exchequer bills.

Bill read 3°, and passed.