Commons Sitting of 20 April 1855

THE FRENCH INDEMNITY FUND.
MR. BOWYERbegged to ask the Secretary to the Treasury, whether the sum of 23,707 l. 10 s. 10 d., which, by certain Parliamentary returns was stated to have been paid to Monsieur Ladebat, a French subject, out of the "French Indemnity Fund;" had ever, and when, been returned to that fund, and if so, whether Her Majesty's Government had any objection to lay upon the table of the House a return showing the application thereof?
MR. WILSONsaid, that a sum of 23,707 l. out of the French Indemnity Fund had been paid to M. Ladebat, a French subject; that payment was made under clauses of the treaty of 1815; the money had not been repaid, nor did he see any reason why it should be repaid. He had no objection to the production of any papers connected with the subject.

THE COLONIAL CHURCH.
MR. DUFFYrose to ask a question with regard to the status of the Church of England in the Australian Colonies. He wished to ask the Under Secretary for the Colonies whether the Government had directed any departure to be made from the system of religious equality which had hitherto been established in the colonies of Australia; and whether the Royal assent had been withheld from a Bill which passed the Legislative Council of Victoria in November last, entitled "An Act to enable the Bishop, Clergy, and Laity of the United Church of England and Ireland, in Victoria, to provide for the regulation of the affairs of the said Church."
MR. J. BALLsaid that Her Majesty's Government had not given any directions on the subject to which the question of the hon. Gentleman related, and he had also to state that the Bill to which reference had been made had been referred to those gentlemen who usually examined those Bills which were sent to this country front the Colonies; but he himself had not seen the Bill, and could not, therefore, express any opinion as to its provisions. He might add that the measure to which the hon. Member had referred had not been sent to this country in consequence of any communication from the Home Government.

ADMIRAL THE EARL OF DUNDONALD'S PROPOSALS.
CAPTAIN SCOBELLasked the First Lord of the Treasury whether it was intended by Government to entertain the proposition of Admiral the Earl of Dundonald; and, if not, whether the Government would object to the "searching investigation" into the merits of the plan, and which the Earl of Dundonald continues to solicit?
VISCOUNT PALMERSTON: The Earl of Dundonald, everybody knows, is a most distinguished officer, and who not only combines naval and practical experience, but has also very great scientific attainments. The Earl of Dundonald from time to time has signified to the Government of the day that he has a plan which he conceives would afford great facilities for naval attacks on fortresses. That plan was last year submitted to the consideration of a Committee of naval officers and scientific men, and is still under the consideration of Her Majesty's Government. But under the circumstances I really cannot

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answer the question of my gallant Friend as to the intention of the Government on the subject. It is enough to say that those professional and scientific men, to whom I have referred, stated that they found grave difficulties to lie in the way of a practical execution of the project.

BOMBARDMENT OF SEBASTOPOL.
MR. MUNTZwished to know from the noble Lord whether the statement which he saw in The Times newspaper a few days ago was correct—namely, that orders had been given by Lord Raglan, in consequence of a communication from the Home Government, to spare the town of Sebastopol during the bombardment?
VISCOUNT PALMERSTON: No orders have been given, except to take the town of Sebastopol as soon as possible.

THE FINANCIAL STATEMENT.—THE BUDGET.
The House having resolved itself into a Committee of Ways and Means,
THE CHANCELLOR OF THE EXCHEQUER said: I feel, Sir, that some apology, or at least some explanation, is due to the House for the postponement of the financial statement which I have to make on the part of Her Majesty's Government to the present moment. It was the wish of the Government that this statement should be as complete and, as far as it was in their power to make it, as satisfactory to the House as possible; and they were apprehensive that if it had been made shortly after the formation of a new Administration, and immediately after the appointment of a new Chancellor of the Exchequer, such a statement would have been less satisfactory to the House than if a longer period were allowed to elapse. The Government also felt that there was an advantage in waiting until the financial year had expired, as they would thereby be enabled to lay the annual accounts before the country in a more perfect form. At the same time, the Conferences at Vienna having lately commenced, Her Majesty's Government thought that it would be more seemly if at the commencement of these Conferences, and before they were able to form any judgment of the views likely to be entertained by the other great Powers, they did not proceed at once to lay before the House a statement of our annual expenditure and estimates founded on supplies already voted, and
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which assumed a continuance of the war. Her Majesty's Government, under these circumstances, thought it would be better to postpone until after Easter the time for making this statement, but in taking that course they feel they have extended the delay as far as they could with propriety; and they feel also that with a due regard to the public interests and consistently with the respect they owe to this House the period for making the financial statement can no longer be postponed. In making the statement, which it is now my duty to submit to the House, I am aware how much I have need of their kind indulgence. I will try to simplify the statement I shall have to lay before them as much as I am able, and it will be my purpose to render it as complete in itself, and satisfactory as possible to the extent of my power. I will begin by referring to the estimates made, for the revenue and expenses of the year which has just elapsed, by my right hon. Friend my predecessor in office, the Member for the University of Oxford (Mr. Gladstone). The estimate he made for the revenue of the year which expired on the 31st of March last, was as follows:— The produce of existing taxes he took at 53,349,000 l.; and the produce of the new taxes which he proposed for the ensuing year he estimated at 10,157,600 l.; but the amount of the new taxes to be received within the year he calculated at only 6,147,000 l. So that his estimate of the taxation to be received within the year amounted to 59,496,000 l. Now, I must certainly congratulate my right hon. Friend on having exercised, in this instance, a species of financial second-sight, for whereas his estimated produce of the year was 59,496,000 l., the amount actually received was 59,496,154 l. Hon. Gentlemen will see that the difference between the sum estimated and the sum actually received is, upon that very large amount, not greater than 154 l. In the Ways and Means of last year, my right hon. Friend took a further power of issuing 1,750,000 l. Exchequer bills, which were actually realised; and he also made an estimate for 6,000,000 l. Exchequer bonds, which operation produced 5,375,513 l., making together an amount of unfunded debt equal to 7,125,513 l. Therefore the produce of the taxation of the year being 59,496,154 l., and the unfunded debt thus created being 7,125,513 l., the total revenue of the year was 66,621,667 l. The actual expenditure

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of last year having been 65,692,962 l., there was thus left an excess of receipts over expenditure of 928,705 l., which excess was, as I have already explained, produced by the issue of certain securities creating a further portion of unfunded debt. The revenue from taxation having been during the last year 59,496,154 l., and the expenditure 65,692,962 l., it follows that there was an actual deficit of revenue to the amount of 6,196,808 l. But the entire amount of the new taxes imposed by my right hon. Friend last year was not received within the year, and there remains uncollected of the taxes which were imposed last year, but which have not been collected in the year ending the 31st March last, according to the best estimate that can be formed, a sum of 5,020,000 l.—adding that sum to the revenue produced from the taxation of last year, the sum is 64,516,154 l. The whole revenue estimated for the year, with the new taxes, including the portion uncollected, was estimated to be 63,506,000 l., and assuming that the uncollected portion should produce what it is now estimated it will produce, there will be on the estimate of revenue made by my right hon. Friend a gain of more than 1,000,000 l. This result has taken place, though, in consequence of the alteration in the quarters of the year, the present year contains five days less than the estimate was made for; and, as the receipts would amount to about one million a week, the difference of the five days is not unimportant. I call the attention of the House to this result, inasmuch as it shows that, notwithstanding the burdens which unhappily it has been necessary to impose upon the people, and notwithstanding the disturbance of trade and industry and manufactures which a state of war must necessarily produce, the revenue that has been received, and that will, on a safe estimate, be received, including the new taxes imposed in the last year, exceeds the estimated amount by more than 1,000,000 l.
I shall now proceed to estimate the expenditure for the ensuing year. The expenditure for the financial year, ending on the 5th of April, 1854, that is to say, the last year of peace, which included only a small military expense for the Kafir war, amounted to 51,198,000 l.; but the expenditure for the year which has just expired has been 65,692,962 l. I shall now, with the permission of the Committee, state the estimate of the expenditure for the present
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year, judged by a mode that with tolerable closeness approaches to the truth, inasmuch as all our military estimates have been voted, and some progress has been made in voting the Miscellaneous Estimates. The first item is the charge for the funded and unfunded debt, amounting to 27,974,000 l., in which a saving will be produced this year in consequence of the reduction of the 3¼ per cent stock to 3 per cent, which, as was arranged by the Act of 1844, comes into effect in the course of the present year. The other charges on the Consolidated Fund, which have been now somewhat reduced in consequence of the numerous transfers made from that fund last Session, amount to 1,750,000 l. The charge for the army, which has been already voted, amounts to 16,211,477 l.; the charge for the navy, which has been also voted, amounts to 16,653,042 l.; and the charge for the Ordnance amounts to 7,808,000 l.; and I propose to take a vote of credit in aid of the military service for the year to the amount of 3,000,000 l. The charge for the Civil Service amounts to 6,500,000 l.; which makes a total for Supply services of 50,175,561 l. I further include an estimate for two instalments of the Sardinian loan, one of which is now in progress of payment, and another may become due before the end of the year. That produces a total of expenditure, which we are able to estimate with tolerable accuracy, of 80,899,561 l. I beg to state that the charge I have stated for the funded debt includes the additional expense of the interest of the loan which has been contracted this day, and which now awaits the confirmation of Parliament. The Committee will probably think that the sum of nearly 81,000,000 l., which I have just stated, may be excessive compared with the probable wants of the ensuing year. I fear, however, that any such anticipation will be over sanguine when we advert to the fact that during the last quarter—consisting of the months of January, February, and March of this year—the sum actually expended and disbursed from the Exchequer amounted to 19,474,000 l. This great expenditure, as the Committee will naturally conceive, has been owing almost exclusively to the additional expenses of the war. Perhaps it may be satisfactory to the Committee to be informed, and I shall therefore state, what have been the expenses of the present year as compared with the expenses of the last year of peace and of the previous year. The total

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amount voted for the Army, Navy, and Ordnance and the Vote of Credit, constituting the military expenditure for the year 1853–1854, was 16,487,000 l. The expenditure under the same heads for the last year amounted to 30,121,000 l., and the sum estimated for the corresponding expenditure of this year amounts to 43,675,000 l. I shall further state the progress of the expenditure within the six last quarters. In the quarter ending January 5, 1854, the expenses for the supply services, which include the expenses of the Civil Service, amounted to 4,650,000 l.; in the quarter ending April 5, 1854, they amounted to 5,640,000 l.; in the quarter ending July 5, 1854, they amounted to 7,445,000 l.; in the quarter ending the 10th of October last they amounted to 8,500,000 l.; in the quarter ending the 5th of January last they amounted to 8,600,000 l.; and in the quarter ending the 31st of March last they amounted to 11,664,000 l.
I shall now proceed to state to the Committee the estimated income of the ensuing year, upon which we may rely to meet the estimated expenditure which I have laid before the Committee. It is estimated that the Customs for the present year will produce 20,500,000 l., in which sum is included that portion of the tea duty which would have been abandoned but for the Act passed at the beginning of this year. The amount which it is estimated will be received from the Excise is 17,071,000 l.; stamps, 6,815,000 l., exclusive of 480,000 l. stamp duty upon newspapers; land and assessed taxes, 2,920,000 l.; property and income tax, 13,535,000 l.; Post Office, 1,150,000 l., to which I add 288,000 l. for postage on newspapers; Crown lands, 260,000 l.; miscellaneous, 800,000 l.—making a total revenue of 63,339,000 l. The estimated expenditure, as I have already stated, amounts to 80,899,561 l.; and I further include in the estimate for the expenditure for this year a suns of 1,000,000 l. for Ways and Means Bills issued in the last year, and redeemable this year, issued to the Commissioners of the National Debt in consequence of the sales of stock belonging to the savings banks, and which will be replaced out of the revenue of this quarter. I further propose to take, in order to guard against those contingencies which may not unreasonably be expected, a margin of 4,440,000 l. The Vote of Credit will be immediately applicable to
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the military services; but, in addition to the Vote of Credit so appropriated, I propose to leave an unappropriated margin of surplus revenue for the amount I have mentioned. This will make a total estimated expenditure for next year of 86,339,000 l. I have already stated that the estimated revenue arising from the existing taxes amounts to 63,339,000 l.; and we have therefore to provide in the service of the ensuing year for a deficit amounting to the ensuing year for a deficit amounting to the difference between 86,339,000 l. and 63,339,000 l.—namely, for a deficit of 23,000,000 l. The question now arises for the consideration of the Committee, how this deficiency is to be supplied; and it will be my duty to submit to your consideration the Ways and Means by which we propose that that deficiency shall be met.
It has been stated at different times that the entire expenditure for the war should be defrayed by taxes levied within the year. And it is said that it is not safe to intrust to a Government the power of effecting a loan—of borrowing money and mortgaging the revenues of posterity—for the purpose of defraying the extraordinary expenses of a war. I shall not enter into a long recapitulation of the opinions expressed on that subject, but I will take the liberty of reading a single passage from the celebrated essay of Mr. Hume on Public Credit, in which he states his opinion upon this question—
"It is very tempting to a Minister to employ such an expedient, as it enables him to make a great figure during his administration, without overburdening the people with taxes, or exciting any immediate clamours against himself. The practice, therefore, of contracting debt will almost infallibly be abused by every Government. It would scarcely be more imprudent to give a prodigal son a credit in every banker's shop in London, than to empower a statesman to draw bills in this manner upon posterity."
That is a plain statement of the doctrine that it is not expedient, under any circumstances, to attempt to defray the extraordinary expenses of a war by a loan, or by any other means than by taxes levied within the year. But the experience of this country and of other countries in all times has shown the impossibility of reducing to practice this attractive theory. It is impossible, with a large expenditure for military purposes immediately to be met, to raise by taxation the sum necessary for defraying the whole additional charge within the year. And even if it were found by experience to be practicable, the encroachment

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upon the savings of the industrious classes, which would be caused by excessive taxation, would be a greater evil than the abstraction of capital by means of a loan, and its expenditure upon the war. I apprehend that nothing can be more certain than the effect of excessive taxation in making inroads into the savings of the industrious classes. We can see this fact proved to a certain extent in the diminution of useful projects of various kinds that has already begun to take place in this country, and which exhibits itself in the diminution of the private business of this House. It is well known that a diminution has taken place in the number of Bills for new projects of different kinds which have been brought before the Private Bills Committee, and by the fact that many projects which had already received the sanction of the House, have been suspended during the past year, because the calls upon the shareholders have not been paid up. Taxes which cripple enterprise and derange industry, or interfere with the ordinary distribution of capital, are more detrimental to the community than loans effected by the Government. The practice which was resorted to by Mr. Pitt and his successors during the last war, as it had been previously resorted to by their predecessors, was every year to defray the increased charge upon the Exchequer, partly by loan, and partly by additional taxes; and there is not a single year, during the Seven Years' war, during the American war, or during the French war, in which a loan was not contracted. Our experience, which has been purchased at the expense of much hardship upon individuals, and much privation endured by the public, should warn us against the attempt to meet any large temporary deficiency exclusively by taxation. Her Majesty's Government therefore determined to take steps for negotiating a loan to cover a portion of the deficiency arising within the year; and in so doing they felt that they were fortified by uniform experience, and by the constant example of their predecessors.
Before, however, I proceed with the explanation of the details of the loan, for which Her Majesty's Government have made a provisional contract, I would take the liberty of asking the Committee to listen to a short statement of the progress of the national debt, with a view of making them perfectly aware of the nature of the proceeding in which the Government has
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now embarked. Sir, at the beginning of the last century, in the year 1702, the national debt consisted of only 10,000,000 l.; at the beginning of the reign of George II. it had risen to 53,000,000 l. It was then reduced during the succeeding years of peace to 46,000,000 l., which was its amount at the beginning of the Spanish war in 1739. During that war it rose to 72,000,000 l., at which amount it stood in 1748, at the conclusion of the Peace of Aix-la-Chapelle. At the beginning of the Seven Years' war in 1757 it amounted to 76,000,000 l., and at the end of the war, and at the Peace of Paris in 1763, it amounted to 135,000,000 l., at which sum it remained up to the commencement of the American war in 1776. In 1786, three years after the termination of the American war, it stood at 259,000,000 l.; and in 1793, at the commencement of the French war, it had risen to 269,000,000 l. In 1800 it amounted to 491,000,000 l., and in the month of February, 1816, it had reached 816,000,000 l. Since the peace it has undergone some reductions, and on the 5th of January last the funded debt of this country amounted to 751,000,000 l.—the decrease since the peace in 1816 having been 64,471,968 l. The details which I have read to the Committee show the continual tendency of a great national debt to increase. They show that we bequeath to our successors, w toether with the advantages of our free Government, our religion, our established institutions, our arts and sciences, a debt which is a mortgage upon our late posterity; and they show, also, that the additions which are made to that debt during a time of war are but imperfectly removed by the slight reductions effected during the subsequent periods of peace. If, therefore, upon the renewal of hostilities, and under the circumstances in which this country is now placed, it becomes necessary to resort to the practice of borrowing, it is certainly incumbent upon Parliament to take such means as are at its disposal to prevent us from imposing a perpetual burden upon our successors. It is said that the creation of a perpetual debt is merely the short-sighted expedient of improvident Ministers, and that by proper attention to finance, and to the modes of providing for the extinction of the debt, this perpetual charge may be avoided. But it will be found, on closer examination, that this system of borrowing is forced, to a great extent, upon the

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Government by the interests and preferences of the lenders. It suits the lender to purchase perpetual annuities, the capital of which he can at all times realise by going into the market; and, at the same time, he is protected by their perpetuity from the danger of redemption. It is the danger of redemption, in fact, which so greatly influences the value of public stocks—those stocks which are least exposed to the danger of being redeemed being those that command the highest prices in the market. I will take the liberty of mentioning that a gentleman who holds the situation of actuary of one of the leading insurance offices—Mr. Newmarch—has recently examined, in an able pamphlet, the question of the loans effected during the last war, and he successfully shows that those loans were obtained upon terms much less disadvantageous to the public than we have been accustomed, of late years, to suppose. Our predecessors, while thus creating this enormous burden of debt in successive years, were, notwithstanding, fully conscious of the evils they entailed upon posterity, and they took at different times measures, which they believed to be efficacious, for preventing the continuance of that evil. From an early period different schemes were proposed for the creation of a sinking fund for the extinction of the national debt; and a plan, which at the time was thought to be efficacious, was devised by Mr. Pitt, carried in 1786, and maintained in one form or another during the whole of the late war. There is no doubt that Mr. Pitt, and most of his contemporaries, believed in the efficacy of the sinking fund for the extinction of the debt, although the sinking fund was itself created by borrowing, and the delusion under which they laboured was, that by some contrivance of keeping up a nominal sinking fund, supported by loans, and by some imaginary operation of compound interest, it would be possible, at no distant time, to extinguish the whole of the national debt. This idea was fondly cherished by Mr. Pitt, who unquestionably died, as he had lived, in the conviction of its soundness, and that great statesman would not believe that he had been the means of entailing a burden upon future generations, the end of which it is scarcely possible for us even to conjecture. There is also another class of cases in which Parliament has recognised the inexpediency of a perpetual loan, namely, in all those cases in which money is borrowed by subordinate
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bodies; I may refer, for example, to cases in which meney is advanced to boards of guardians to the justices of the peace, and to other subordinate authorities, who are entitled to charge the rates of their districts with the payment of loans raised for some permanently useful purposes. I may state, for instance, to the Committee that the expenses for building or repairing county bridges, prisons, town-halls, asylums, and other similar works, must be paid off, according to Act of Parliament, within twenty or thirty years. In fact, there is a long series of Acts of Parliament, in which powers arc given to local bodies to raise loans upon the security of the taxes within their command, and in every case the creation of an annual sinking fund is made compulsory upon them, and it is required of them that they should extinguish the debt within a limited number of years. This practice sanctions the principle of not permitting the existence of a perpetual debt where the body contracting the loan is under the control of Parliament; and, indeed, I doubt whether there is a single example in which a loan of that kind is authorised to be raised by a public body without an express provision having been made for its liquidation within a definite period. With respect, again, to the case of railway companies, the Railway Clauses Consolidation Act has a clause which provides that unless the money borrowed by any company on mortgage be repaid by the specified period before agreed on, it shall be open for the parties interested to demand the repayment of the principal on giving six months' notice to that effect, thus distinctly preventing the possibility of the debt being perpetual. Another means of preventing the existence of a perpetual national debt has been adopted by the mode of raising loans upon terminable annuities. The raising of money for the Government in the last-named manner is a plan which has recommended itself to many persons, and unquestionably offers great advantages with respect to the extinction of the debt. The Committee are doubtless aware of the nature of terminable annuities. An annuity is granted by Government for a limited number of years, and it pays to the annuitant annually not only a sum calculated as interest, but also a certain portion calculated as principal, so that at the end of the given term, whatever it may be, the entire debt, both principal and interest, is discharged. The advantage of the system of

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terminable annuities, in securing the extinction of debt, so far as the Government is concerned, is obvious, inasmuch as the periodical repayment of a portion of the principal sum borrowed is made a distinct and component part of the contract entered into between the Government and the party lending; and, without breach of faith, the Government cannot omit to pay every year a portion of the principal. But although Government in this manner finds its hands, as it were, tied up, and is bound to extinguish a certain portion of the debt, unless it be guilty of a breach of faith; it is found in practice that terminable annuities are to so little extent a marketable commodity, the demand for them by the public is so limited, and the dislike to receiving annually a portion of the principal, which the individual must either spend as revenue, thereby diminishing his principal, or else reinvest in very small sums, as he receives them, is so great and general, that at no time in this country has it been possible for the Government to effect a loan on terminable annuities only. There is no example of an entire loan having been effected on that species of security; and the terminable annuities have in every instance been combined with a loan for a perpetual annuity; they now amount to a considerable sum, and are formed of the aggregate amount of the terminable annuities of the different loans that have been effected. They are formed of the aggregate of loans on terminable annuities similar to that which the Government has this day effected. Therefore, however much Her Majesty's Government may have desired to effect the whole loan that is necessary on terminable annuities, they had no option in the matter. It was impossible for them to obtain such a sum as is required for the service of the year on terminable annuities without giving a price which would be justly considered as exorbitant and unjustifiable. It seems to be supposed by many persons, with regard to terminable annuities, as it was at one time thought with regard to the sinking fund, that it acts by some mechanical and spontaneous operation towards the extinction of the debt. It was considered that the nation thus obtained value without equivalent or security, and effected a reduction of their debt without an expenditure of taxation; and that by some mysterious and occult process, which no one has been ever able to describe, the
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national debt might be reduced and ultimately extinguished, without any burdens being imposed upon the people. Unfortunately, nothing can be less well-founded than these suppositions, which are wholly chimerical and illusory. A terminable annuity consists of the repayment of principal as well as the payment of interest; and although at the end of the given time the debt will be extinguished, it will have been extinguished by the ordinary mode of repayment of principal with interest, the repayments having been provided for out of the annual produce of the taxation of the country. Under the circumstances I have stated, Her Majesty's Government found it was necessary that a part of the loan they were called upon to contract should be effected in perpetual stock; that is to say, the only means by which they could have avoided the creation of a perpetual stock would have been by borrowing the whole amount on stock of a terminable nature, and thus leaving the whole amount borrowed to be repaid at the end of a fixed time. For instance, if the Government had determined to effect a loan on stock terminable at the end of thirty years, when that period arrived it would be necessary for the Chancellor of the Exchequer of that year to provide a surplus of 16,000,000 l. for the extinction of the debt. Now we all know from experience that nothing is more improbable than that a provision would have been made by previous Parliaments for the payment of a sum of 16,000,000 l. for the extinction of that debt when the time should arrive. If such a mode of creating terminable stock had been resorted to, it would infallibly, at the conclusion of the period, end in disappointment. We should find that the nation would resort to some method of re-borrowing like that adopted by railway companies, who, having borrowed on debentures payable in three, five, or seven years, simply continue them when they expire, and scarcely ever extinguish the debt. Her Majesty's Government therefore thought that any plan that created terminable stock, the whole of which would become payable at the end of a certain term, would be an ineffectual mode of obtaining the object they had in view; and I, therefore, propose as a means—so far as lies in our power—of preventing the creation of a perpetual burden by the loan which we have found it necessary to effect, to insert in the Loan Act a clause which

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will render it incumbent upon the Government for the time being at the end of the year following the signature of a treaty of peace, to set aside one million sterling annually until the whole perpetual portion of the debt which they propose to contract shall be extinguished. In that manner a legal obligation will be imposed upon the Government of the day to provide one million sterling annually for the redemption of the debt now about to be incurred. I am aware that any Act of Parliament we may now pass may be repealed or modified by subsequent Acts. All similar Acts, I must be allowed to say, have been violated, and it is impossible to make any law which our successors can be prevented from altering; there is no irrevocable Act of Parliament. But we can pass an Act which will produce the only effect it is in our power to accomplish—namely, to render it incumbent on the Government for the time being to provide funds for the extinction of the debt, and to make it obligatory on the Chancellor of the Exchequer, for each successive year, to include that amount in his estimate of expenditure, and to provide the funds necessary for the extinction of the debt, unless Parliament should deem it otherwise expedient. Sir, it appears to me that the only sound sinking fund—the only effectual mode of discharging the debt—is that Parliament should agree, upon the return of peace, to create a special revenue by taxation, and to set aside annually a certain portion of revenue for the reduction of the debt. If Parliament would again return to the policy which it pursued after the peace, but which unfortunately was soon afterwards abrogated, of creating a sinking fund of 5,000,000 l. annually, and applying those 5,000,000 l. to the redemption of debt during times of peace, when no loans are necessary, then we should be making undoubtedly slow but steady progress towards the extinction of the debt. If, unhappily, another war should arise, or any other circumstance, to create an extraordinary demand on the Exchequer, it would then be in the power of Parliament to release the Government from the obligation of the extinction of debt, and to apply that margin of surplus revenue to defray the extraordinary expenditure of the year, thus rendering the imposition of new taxes unnecessary, and affording a reliable surplus to fall back upon. When those extraordinary demands shall have
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been met, the way would then be prepared to continue the extinction of debt by the only sure means by which it can be extinguished—namely, by the creation of a surplus of taxation, and not by any imaginary expedient of a sinking fund founded on borrowed capital.
Sir, in the Essay on Public Credit, from which I have already read an extract, Mr. Hume remarks that either the nation must destroy public credit, or public credit will destroy the nation. Now, Sir, I beg leave, with great submission to so high an authority on questions of this sort, to dispute both branches of this dictum. We see, by long experience, that the nation has not destroyed public credit; for during the exigencies of the most disastrous wars —during that period of great depression which followed the American war—during the Irish rebellion, during the mutiny at the Nore, and other occurrences tending to shake the stability of our institutions in the course of the French revolutionary war, the sacredness of our public credit was never for a moment violated. On the other hand, I may equally venture to question the other branch of the dictum, that public credit will destroy the nation. Notwithstanding the rapid increase and vast amount of the national debt, the magnitude of which I have already laid before the Committee, there has been a perpetual growth of the prosperity of the country since the conclusion of the last peace, and the proportion which the wealth of the country bears to its means of paying taxes and affording a revenue to the Government has been perpetually augmenting. Moreover, at the same time, annual means have been found, in consequence of this prosperity, of reducing the interest of the national debt, and thus making the debt a smaller annual charge on the country. In the year 1816, the charge of the national debt was 30,458,207 l.; in the year 1854 the charge was 26,521,190 l.; being a decrease of 3,937,017 l. in the actual charge of the debt. The income tax in the last year of the war, which then stood at 10 per cent, produced 14,880,000 l.; the income tax of 6 per cent in the last year produced nearly 14,000,000 l.; showing how great has been the increase in the income of the country since the peace, and how far, therefore, the ability of the country to bear taxation has been augmented. Sir, I can see nothing in the present state of our national debt, with all the burdens it

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entails on us, to cause any well-grounded feeling of despondency at our future prospects; but I see ample ground for confidence with forethought and good management of our national finances.
Having stated the grounds on which Her Majesty's Government have determined to effect a loan of 16,000,000 l. for the service of the present year, I will merely observe that they have negotiated such portion of it as they thought they could obtain in terminable annuities on that species of security, recognising the value of the principle that the nation should bind itself to discharge a portion of the loan by the annual repayment of principal as well as interest. With respect to the remaining portion of the loan, they have necessarily borrowed it, in a perpetual stock; but, at the same time, they propose to undertake an obligation to repay 1,000,000 l. in each year, after the conclusion of peace until the whole is paid off.
While on the one hand Her Majesty's Government have rejected the plan of attempting to defray the whole expenditure of the year out of the annual taxation, so, on the other hand, they have rejected the plan of defraying the whole of that expenditure out of borrowed money. They have judged it prudent to follow the example of former years, in which the extraordinary expenses of the war were defrayed by an addition to the taxes of the year as well as by an annual loan.
With the permission of the Committee I will briefly state the progress of taxation during the late war; from which they will see that with the system then adopted, although it was founded upon the defrayment of the expenses of each year in part by loan—the loan having been generally annual, though sometimes even two loans were contracted in one year—it was, notwithstanding, found necessary to make a considerable addition to the annual taxation. In 1793, the sum raised by taxation was 17,656,418C l.; in 1801, it was 35,229,968 l.; in 1808, it was 58,390,255 l.; in 1815, it was 69,684,192 l.; thereby showing the great addition which was made to the annual taxation of the country during the war, notwithstanding the large sums raised by borrowing. We propose, therefore, Sir, to make an addition to the public taxation of this year of a sum amounting, according to the estimate we have made, to 5,300,000 l. I will now, with the permission of the Committee, state to them the manner in which this addition is pro-
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posed to be effected. In the first place we propose an addition to the present duties on sugar, of 3s. per cwt., to be varied according to the quality. That additional duty, we estimate, will produce the sum of 1,200,000 l. In justification of that estimate I will, with the permission of the Committee, state briefly the recent stock and consumption of sugar. The stock of sugar in London on the 14th April, 1855, was 51,890 tons. At the same time last year, the stock was only 42,120 tons. In consequence of the last year's importation, the short price of sugar (by which is meant the price minus the duty) was lower from 3s. to 4s. a cwt. than it was a year ago. I will now state the comparative prices of sugar in two years since 1844, by which the Committee will see that, notwithstanding the addition now to be proposed to the duty, the price to the consumer is at present considerably lower than it was at that period. In 1844 the importation amounted to 4,129,000 cwts.; the price in bond was 33 s. 8d., and the duty 25 s. 2d., making the full price 58 s. 10 d. In 1846, after the alteration of the duty had taken place, the importation amounted to 5,220,000 cwts.; the price in bond was 34 s. 5d. and the duty 14 s., making the full price 48 s. 5d. In 1854 the consumption had risen to 8,096,000 cwts.; the price in bond was only 25 s., the duty was 12 s., making the full price to the consumer 37 s. Under the new duties at present the price in bond is only 23 s., the new duty is 15 s., and the price to the consumer will be only 38s s., that is to say ls. more than the price of last year, 10 s. less than the price of 1846, and 20 s. less than the price of 1844. We further propose an addition of ld. per lb. to the duty on coffee, which is at present 3d. per lb.—that is an extremely moderate duty; we propose to increase it to 4d.; and we estimate that this will yield an additional revenue of 150,000 l. I have already stated that the reduction in the duty on tea which would have taken place this year was stayed by the Act passed at the beginning of the year. I propose, also, to make some addition to the duty on tea. In 1853, the duty on tea stood at 2s. 2½d. per lb.; it was reduced in the first year to ls. 10 d., and next year to ls. 6d., at which rate it now stands. I propose to raise it to ls. 9d. per lb., which will be ld. less than the rate at which it stood in the first year of the reduction. That addition to the duty

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on tea I estimate to produce 750,000 l. This will make a total addition to the revenue derived from Customs duties of 2,100,000 l. With respect to the Stamp Duties, they have undergone recently so systematic a revision, that it is not my intention to propose any alteration in them, with one exception—that of the removal of the exemption which bankers' cheques now possess when drawn within fifteen miles of the place where they are payable. This exemption is the means of diminishing the duty from receipt stamps, inasmuch as unstamped cheques frequently perform the duty of stamped receipts. I propose to withdraw that exemption; and the effect of this withdrawal, it is estimated, will be to produce about 200,000 l. additional revenue. I come now, Sir, to the head of Excise. The only duty of Excise upon which I shall propose any augmentation to the Committee is the duty on spirits. My proposal is to assimilate the duties on Scottish spirits to those upon English. The duty on English spirits is now 7s. 10 d. a gallon; the duty on Scotch spirits is 6s. a gallon, and I propose to equalise them. The present duty on Irish spirits is 4s. a gallon. On account, Sir, of the circumstances of Ireland regarding illicit distillation, I do not propose to equalise the duty on Irish spirits to the English and Scotch rate, but I propose to raise it to 6s. a gallon. The additions which have recently been made to the spirit duty both in Scotland and Ireland have not produced any increase of illicit distillation, nor have they diminished consumption. I will state to the Committee the consumption of English, Scottish, and Irish spirits during the last ten years. The consumption in England during the financial year, ending January 5, 1854, was 10,350,000 gallons; in 1855, it was 10,839,000 gallons. In Scotland, the consumption of the financial year 1854 was 6,534,000 gallons; that of 1855, was 6,553,000 gallons; thus showing a slight increase of consumption, notwithstanding the addition to the duty. In Ireland, the consumption of 1854 was 8,136,000 gallons; in 1855, it had risen to 8,440,000 gallons. The effect, therefore, of this experiment in increasing the duties on spirits is to recommend a further advance in the same direction. It can hardly be disputed that if an increased duty, producing a considerable sum, can be obtained from spirits without increasing illicit distillation, smuggling, and all the evils which go in their train, it is as legiti-
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mate a means of providing an additional revenue during the heavy expenditure inevitable in a time of war as can well be found. I estimate, not on a sanguine conjecture, the produce of this increased duty on Scottish and Irish spirits at 1,000,000 l. sterling; and this, with the augmentations I have already stated to the Customs, Stamps, and Excise duties will bring an addition to the revenue of 3,300,000 l. In order, however, to raise a sum sufficient for the service of the year, it is still further necessary that we should propose some addition to the direct taxation of the country. Last year the additions made to the direct and indirect taxes were in this proportion. The additions to the indirect taxes were calculated to produce 2,600,000 l.; the addition to the direct taxes, 6,557,000 l.; therefore the great increase was on the direct taxes, being more than double that on the indirect. In the plan, however, which I have now the honour of submitting to the Committee, it has been thought desirable to throw the excess into the other side of the scale, and to levy the larger sum by indirect taxation, and a less sum by direct taxation. While, therefore, we propose to raise 3,300,000 l. from the indirect taxes in the manner I have stated, 2,000,000 l. are left to be raised by direct taxes. Now, the number of direct taxes to which a Chancellor of the Exchequer can resort with advantage for the purpose of raising additional revenue is very limited. It is well known that the land tax in this country is an impost which is fixed at rates varying in different localities, which has been made the subject of partial redemption; and it is in a state which renders all attempts to increase it impossible except in a very partial degree, and by means which it would be very difficult to carry into operation. The only direct taxes of any magnitude besides the income tax to which our attention can be directed are the house and assessed taxes. With respect to the house tax, its produce is not very considerable; it is between 700,000 l. and 800,000 l. a year; and even if the tax were doubled, and some extension given to its area, it still would hardly produce above 1,000,000 l. of additional revenue. The house tax is, after all, only a species of income tax, and the same may be said of the assessed taxes, which, moreover, fall upon a narrower class of persons than the income tax, and which are not only subject to the objection of their incidence while any increase

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in them would interfere with the employment of industry. Her Majesty's Government, therefore, after consideration, have come to the conclusion that the best form of direct taxation which now exists is the income tax. It reaches on the whole the largest number of persons, and its operation falls with fairness on different classes of incomes, whilst an additional sum can be collected through the existing machinery, thus obviating the necessity of creating any new tax, of creating a new inspection, or of extending the machinery of collection to meet an extraordinary expenditure which I hope will not be of long duration. On the whole, then, we propose that the additional sum of 2,000,000 l. required shall be raised by an augmentation of the income tax, by simply adding I per cent, or 2d. in the pound, to its present amount. With this enhanced rate of income tax, I calculate that an addition of 2,000,000 l. will be secured for the service of the next year, 1,000,000 l. of which will be received within the present financial year. This addition to the income tax therefore, conjoined with the additions to the other indirect taxes already specified, will produce a sum of 5,300,000 l., which, together with the loan, and the sum of 3,0007000 l. in Exchequer bills, for the issue of which we propose to take a power equivalent to that of a vote of credit as taken in former years, will complete the sum necessary for the service of the year.
With the permission of the Committee, I will now state precisely the Ways and Means by which we propose to meet the estimated expenditure of the ensuing year. That expenditure, I have already sated to the Committee at 86,339,000 l.; the estimated revenue from existing taxes I have given at 63,339,000 l.; the loan will furnish 16,000,000 l.; and the new taxes receivable in the year 1855–56 will be 4,000,000 l. I say 4,000,000 l., leaving out 1,000,000 l. of income tax which will not be receivable within the year, and, in order to avoid the appearance of over sanguine calculation, I have also omitted 300,000 l. of indirect taxes. I think this is a safe and moderate calculation in making allowance for the fluctuations which may occur in consumption. The issue of Exchequer bills, for which I propose to ask power to the extent of 3,000,000 l., will not, under any circumstances, take place until the last instalment of the loan, payable in December next, shall have been paid up. All these Ways and Means will
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produce a sum available for the service of the year of 86,339,000 l.
To enable the country to bear the increased charge, the items of which I have now submitted to the Committee, all that is necessary is, that its resources should remain unimpaired, and that the vast creation of wealth which has been going on without interruption for some years past should not suffer any diminution in consequence of the vicissitudes of the war. Now, Sir, there is one cause of favourable anticipation, to which I think hardly sufficient attention has been paid in this House, and to which, as it seems to me, scarcely sufficient credit has been given to the Government which preceded that of my noble Friend near me—I mean the measures they adopted with respect to trade with neutral nations. It is well known that during the late war a large portion of the disturbance of trade and interruption to manufactures was owing to the unwise retaliatory measures adopted by this country against the Berlin and Milan decrees. The Orders in Council then issued led to great disturbance of the trade with neutral nations, and created an amount of loss and disturbance of commerce and industry, which it would, perhaps, be no exaggeration to say was equal to the entire detriment and suffering created by the increased taxes. From that cause of national loss the country has been fortunately saved by the wise measures which the late Government have adopted. In consequence of the measures adopted in former years by the Legislature, as well as of the measures taken for the protection of our commerce since the war, hitherto with success, a sound state of commerce has been preserved, and it appears that a vast increase has taken place in the amount of our foreign trade. As a proof of the present power of the country to bear increased taxation, I will beg to draw the attention of the Committee to a comparison of our imports and exports in the year in which the French war broke out, in the year when peace was concluded, and the present year. In 1793 the imports into the United Kingdom were valued at 17,850,000 l.; in 1815 they were valued at 32,987,000 l..; in 1853 they had risen to 123,099,000 l.. Our exports in 1793 were 18,486,000 l..; in 1815 they were 58,629,000 l.; and in 1853 they were 242,072,000 l. These figures, Sir, present incontestable proofs of the enormous increase of the trade of this country

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since the beginning of the French war and since the last peace; and they prove that an enormous mass of wealth exists in the country, from which an additional amount of taxation can be raised to defray the extraordinary expenditure of the country.
I fear that it has been necessary for me to detain the Committee at very considerable length in laying these statements before them; but I preferred running the risk of being tedious, to that of subjecting myself to the charge of having withheld from the knowledge of the Committee information necessary for their guidance. The plan I have introduced to their notice is proposed in a spirit of fairness to all the various interests of the country, and I submit it to the Committee with the confidence that it will receive a fair and liberal consideration, and that an impartial judgment will be passed upon it. I will only entreat hon. Members that in examining the ways and means by which the Government propose to defray the expenditure of the year, and to meet the exigencies of the times, they will take the whole plan into consideration at once, that they will not single out particular details of it, that they will look at it as a whole, and will form a combined judgment on the scheme proposed by the Government, keeping constantly in mind that if they change any part of the plan now proposed, they must look to some practical alternative, to some other less objectionable means by which we may provide for the service of the country.
Perhaps, before I conclude, the Committee would wish for some particulars with respect to the loan which was contracted for this morning. The Government required that the party proposing for the loan should give 100 l. in money for every 100 l. stock created, in order to avoid that state of things which sometimes occurred during the late war, of a large debt in stock being created, for which the Government received an imperfect equivalent. By the mode which has been adopted the Government will receive 100 l. in money for every 100 l. of stock created. I will briefly point out what was done during the late war in this respect. In 1798 a loan of 17,000,000 l. was contracted for, to meet which 34,000,000 l. of stock was created; in 1801 there was a loan of 28,000,000 l. and stock created to the extent of 49,210,000 l.; in 1813, a loan of 27,000,000 l., with 45,900,000 l. stock; and in 1815, a loan of 36,000,000 l. with 62,240,000 l. stock.
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By adopting the course we have this day followed, we at least secure to the public 100 l. for every 100 l. of stock issued. That portion of the price of the loan necessary to make up the price of Consols for the day, is contracted in a terminable annuity of 14 s. 6d., which will necessarily expire by annual payments at the end of thirty years. We have every reason to believe that the terms of that loan are fair between the contractors and the public, and that the public has reason to be satisfied with the rate at which it has been taken. A provisional contract only is entered into between the Government and the lenders. The Government must lay the terms of the loan before Parliament in order to receive its sanction As it is my duty to submit them to the Committee, I now ask them to agree to Resolutions embodying the terms and conditions of the loan.
The following are the Resolutions referred to in the Financial Statement—

LOAN
Resolved—
1. "That, towards raising the Supply granted to Her Majesty, the sum of sixteen million pounds be raised by Annuities."
Resolved—
2. "That every contributor to the said sum of sixteen million pounds shall, for every 100 l. contributed and paid, be entitled to the principal sum of 100 l. in Annuities after the rate of 3l. per centum, to commence from the 5th day of January 1855, and to be added to and made one joint stock with the existing Consolidated 3l. per centum Annuities, and to be payable and transferable at the Bank of England at the same times and in the same manner and subject to the like redemption as the said Consolidated 3l. per Centum Annuities."
Resolved—
3. "That every such contributor shall also be entitled, for every 100 l. contributed and paid, to a further annuity of fourteen shillings and six pence for 30 years, to be payable and transferable at the Bank of England, and to be payable on the 5th day of April and the 10th day of October in each year by equal half-yearly payments, the first payment to be made on the 10th day of October, 1855, and the last payment on the 5th day of April, 1885."
Resolved—
4. "That the said several annuities so to be payable as aforesaid shall be charged upon and paid out of the Consolidated Fund of the United Kingdom of Great Britain and Ireland."
Resolved—
5. "That every contributor shall on the 24th day of April, 1855, make a deposit of 10 l. per centum on such sum as he or she shall choose to

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subscribe towards raising the said sum of sixteen million pounds with the chief Cashier or Cashiers of the Governor and Company of the Bank of England as a security for making the subsequent payments on or before the days or times hereinafter mentioned (that is to say):
"Payment of—
15 l. per cent on or before the 22nd of May, 1855.
10 l. per cent on or before the 19th of June, 1855.
15 l. per cent on or before the 17th of July, 1855.
10 l. per cent on or before the 21st of Aug. 1855.
10 l. per cent on or before the 18th of Sept. 1855.
10 l. per cent on or before the 16th of Oct. 1855.
10 l. per cent on or before the 20th of Nov. 1855.
10 l. per cent on or before the 18th of Dec. 1855.
That all the moneys so to be received by the said Cashier or Cashiers of the said Governor and Company of the Bank of England shall be paid into the account of the Receipt of Her Majesty's Exchequer at the Bank of England, to be applied from time to time to such services for Great Britain and Ireland as shall then have been voted by this House in this Session of Parliament, or to the redemption of the principal and interest of any Exchequer Bills issued or to be issued under the authority of the Act 57 Geo. 3, c. 48, or under the authority of any Act of the present Session of Parliament authorising the application of monies out of the Consolidated Fund for the service of the year ended on the 31st day of March, 1855, and of the year ending on the 31st day of March, 1856.
Resolved—
6. "That for the purpose of extinction from time to time of a sum of Consolidated 3l. per Centum Annuities equal to the amount to be added to the said joint stock as aforesaid, there shall be issued and paid out of the Consolidated Fund of the United Kingdom of Great Britain and Ireland, or out of the growing produce thereof, to the Commissioners for the Reduction of the National Debt, in the financial year commencing on the first day of April which shall first happen twelve months after the ratification of a definitive Treaty of Peace with Russia, and in every subsequent year until such sum of Consolidated 3l. per Centum Annuities is extinguished, the sum of one million pounds: Provided, that in case in the last year in which such sum would be payable the sum necessary for purchasing the remaining portion of the said sum of Consolidated 3l. per Centum Annuities be less than one million pounds, then so much only of such sum as may be necessary for that purpose shall be issued and paid as aforesaid, and the sums so to be issued and paid to the Commissioners for the Reduction of the National Debt shall be applied by thesis in the purchase of Consolidated 3l. per Centum Annuities, in the manner directed by the Acts for the Reduction of the National debt, until a sum of sixteen million pounds Consolidated 3l. per Centum Annuities has been extinguished and cancelled."

SPIRITS.
Resolved—
7. "That, towards raising the Supply granted to Her Majesty, there shall be charged, raised, levied, collected and paid upon the goods and commodities hereinafter mentioned and described, the several duties of Excise respectively specified and set forth (that is to say):" [In Scotland the
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additional duty of one shilling and tenpenee per gallon: in Ireland the additional duty of two shillings per gallon.]
Resolved—
8. "That, towards raising the Supply granted to Her Majesty, on and after the 20th day of April, 1855, in lieu of the countervailing duties now chargeable under any Act or Acts in force on spirits of the nature or quality of plain British spirits manufactured or distilled in the islands of Guernsey, Jersey, Alderney, and Sark respectively, and imported from any of the said islands into Scotland or Ireland, there shall be charged and paid the following countervailing duties (that is to say)—Imported into Scotland nine shillings per gallon; into Ireland seven shillings and twopence."
Resolved—
9. "That, towards raising the Supply granted to Her Majesty, in lieu of the respective Duties of Excise now payable under any Act or Acts in force upon the several mixtures, compounds, prepartitions, and commodities mentioned and described in the Schedule hereto annexed, on the removal of the same respectively as hereinafter mentioned, there shall be raised, levied, collected, and paid upon the said several mixtures, compounds, preparations, and commodities which on or after the 20th day of April, 1855, shall be removed from Ireland to England or Scotland the several sums of money and duties of Excise respectively inserted, described, and set forth in the said Schedule." [Here follows the Schedule.]

STAMP DUTIES.
Resolved—.
10. "That, towards raising the Supply granted to Her Majesty all drafts or orders for the payment of any sum of money to the bearer on demand, which being drawn upon any banker, or any persons or persons acting as a banker and residing or transacting the business of a banker within fifteen miles of the place where such drafts or orders are issued are now exempt from stamp duty, shall be chargeable with the stamp duty of one penny for every such draft or order."

INCOME TAX.
Resolved—
11. "That, towards raising the Supply granted to Her Majesty, there shall be charged and raised yearly from and after the 5th day of April, 1855, in addition to the rates and duties chargeable under the Act passed in the last Session of Parliament, chapter 24, for and in respect of all property, profits, and gains chargeable under the several Acts in force relating to the Income Tax, either by assessment or under any contract of composition or otherwise, the additional rate and duty of two pence for every twenty shillings of the annual value or amount of all such property, profits, and gains respectively."

MALT ALLOWANCES.
Resolved—
12. "That there shall be made, allowed, and paid, for or in respect of the several goods and commodities hereinafter described or mentioned, the several allowances and drawbacks of Excise respectively hereinafter specified and set forth (that is to say):" [And they are then set forth.]
Resolved—
13. [Countervailing drawback on made Wines.]

TEA.
Resolved—
14. "That, towards raising the Supply granted to Her Majesty, the following duty of Customs shall be charged on tea imported into the United Kingdom, in lieu of the Duty now payable thereon (that is to say):
"On and after the 21st day of April 1855, until the 5th day of April inclusive, which shall first happen after the end of twelve months from the date of a definitive Treaty of Peace, the pound ls. 9d.; from which last-mentioned day the Duty shall be regulated in accordance with the provisions of the Act, chapter nine, of the present Session of Parliament."

COFFEE AND CHICORY.
Resolved—
15. "That, towards raising the Supply granted to Her Majesty, the following Duties of Customs shall be charged on and after the 21st day of April 1855, on the under-mentioned articles ported into the United Kingdom, in lieu of the Duties now payable thereon (that is to say):
"Coffee, for every pound, 4d.
"—kiln dried, roasted or ground, for every pound, 5d.
"Chicory, or any other vegetable matter applicable to the use of Chicory or Coffee, roasted or ground, for every pound, 5d."

SUGAR.
Resolved,
16. "That, towards raising the Supply granted to Her Majesty, the following Duties of Customs shall be charged, on and after the 21st day of April 1855, on Sugar and Molasses imported into the United Kingdom, in lieu of the Duties now payable thereon (that is to say):
"Candy, brown or white, Refined Sugar, or Sugar rendered by any process equal in quality thereto, for every hundredweight, 1l.
"White Clayed Sugar, or Sugar rendered by any process equal in quality to White Clayed, not being refined or equal in quality to Refined, for every hundredweight, 17 s. 6d.
"Yellow, Muscovado, and Brown Clayed Sugar, or Sugar rendered by any process equal in quality to Yellow, Muscovado, or Brown Clayed, and not equal to White Clayed, for every hundredweight, 15 s.
"Brown, Muscovado, or any other Sugar, not being equal in quality to Yellow, Muscovado, or Brown Clayed Sugar, for every hundredweight, 13 s. 9d.
"Molasses, for every hundredweight, 5s. 4d."

CONFECTIONARY.
Resolved—
17. "That, towards raising the Supply granted to Her Majesty, the following Duties a Customs shall be charged, on and after the 21st day of April 1855, on the articles under-mentioned, in lieu of the Duties now payable thereon (that is to say):
"Confectionary, Comfits, Cherries dried, Marmalade, Plums preserved in Sugar, Succades, including all fruits and vegetables preserved in sugar, not otherwise enumerated, the pound, 2½d."

RUM.
Resolved—
18. "That, towards raising the Supply granted to Her Majesty, the following Duties of Customs shall be charged, on and after the 20th day of April 1855, on the articles under-mentioned, imported into Scotland or Ireland, in lieu of the Duties now payable thereon:
"Spirits, viz.:
"Not being sweetened or mixed with any article so that the degree of strength thereof cannot be ascertained by Sykes's Hydrometer; for every gallon of the strength of proof by such hydrometer, and so in proportion for any greater or less strength than the strength of proof, and for any greater or less quantity than a gallon:
—of and from a British Possession in America or the Island of Mauritius, and Rum of and from any British Possession within the limits of the East India Company's Charter, in regard to which the conditions of the Act 4 Vict. c. 8, have or shall have been fulfilled: If imported
"Into Scotland, the gallon, 8s. 2d.
"Into Ireland, the gallon, 6s. 4d.
"Rum, Shrub, Cordials, and Liqueurs of and from a British Possession in America or the Island of Mauritius, or a British Possession within the limits of the East India Company's Charter, qualified as aforesaid, if imported
"Into Scotland, the gallon, 8s. 2d.
"Into Ireland, the gallon, 6s. 4d."

BOUNTIES AND DRAWBACKS ON SUGAR.
Resolved—
19. "That, in lieu of the Bounties and Drawbacks now payable on the exportation of Refined Sugar, the following Drawbacks shall be allowed, on and after the 19th day of May 1855, on the exportation or on the removal to the Isle of Man for consumption there, of the several descriptions of Refined Sugar hereinafter mentioned (that is to say): "[Then follows the Schedule.]
The Resolutions relating to the Loan having been read by the Chairman,
MR. MARTIN SMITHwished to learn from the right hon. Gentleman whether or not he had given notice to the parties with whom he contracted the loan this morning, partly in terminable annuities, of his intention to levy an additional tax upon terminable annuities. He could hardly believe that the Chancellor of the Exchequer would contract a loan in terminable annuities in the morning, and put a tax on them in the evening, without notice.
THE CHANCELLOR OF THE EXCHEQUERsaid, it was impossible for the Government to make any statement when about to contract for a loan concerning additional taxes not then proposed to Parliament. Of course, those gentlemen who made offers for the loan did so with the knowledge that any additional taxation might possibly affect terminable annuities.
MR. LAINGsaid, that though the present was not the proper time to go into the details of the Budget, still the question raised by the present Resolutions involved principles of such great and vital importance that he thought it would be wrong for hon. Members to commit themselves to what might be deemed the sanction of those principles without any discussion whatever. He believed the Committee would disappoint the expectations of the public out of doors if they allowed these Resolutions to pass sub silentio, especially as he was aware that the principles which were involved in them had been the subject of great discussion in the city, and that strong opinions were entertained in the moneyed circles there, those opinions being not very favourable to them. It was evident we were now at the commencement of what, he feared, if this war continued, must be a series of loans of very great magnitude. It was surely, therefore, incumbent upon the Members of that House, as the guardians of the public purse, to see that they did not in the first instance, without due deliberation, lay down principles upon which a second national debt, equal, perhaps, in amount to that which at present existed, would be created, and to see that they did not rashly commit themselves to principles which might prove to be as mistaken as those upon which Mr. Pitt acted during the great French war. One obvious objection which presented itself to the mind of every one familiar with these subjects as to the mode by which the Chancellor of the Exchequer proposed to deal with this loan was, that it was neither one thing nor another. He could understand the right hon. Gentleman coming forward and stating that 3 per cent. perpetual annuities being the most marketable security, he was anxious to avail himself of that which gave the greatest facilities for raising large sums of money. If the Chancellor of the Exchequer found himself placed in difficult circumstances, and driven into a corner to obtain money, he could understand the right hon. Gentleman saying, "I must resort to 3 per cent. Consols, because that is the only mode in which I can get the money necessary for my purpose." But the object of the right hon. Gentleman seemed to be to get a sum of money in the mode which would involve the smallest possible burden upon the present generation—not looking to posterity at all, but having an eye solely to the interest of the present generation, and,
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therefore, resorting to the most marketable security. Now, this was completely contrary to the doctrine they had been accustomed to bear in that House from the right hon. Gentleman behind him (Mr. Gladstone), and he confessed he, for one, could not so easily accede to it. Twelve months had not yet elapsed since hon. Members listened to appeals made to them in that House, to show themselves worthy of their ancestors, not to shrink from sacrifices which those ancestors had made, and not to throw the whole burden of this war upon posterity, but to bear a fair proportion of it themselves. He thought, perhaps, that doctrine was pushed a little too far under the circumstances. He did not believe that, under the circumstances which now existed, they could hope to raise the whole amount of expenditure by taxation within the year, and was of opinion that they must resort to some description of loan; but he was not prepared—and he believed the country was not prepared—for such a total abandonment of the principles then laid down, as to say that they should now throw all consideration for posterity to the wind at the very commencement of the war, and that, in an easy state of the money market, and before they had exceeded the limits of our taxation, they should resort to an old-fashioned loan in 3 per cent. consols. The Chancellor of the Exchequer appeared to think that any other mode of raising money—such as by a resort to terminable annuities—was wholly impossible. He should like to know what the right hon. Gentleman said to the very large amount of capital which had been raised upon the French and other foreign railways. How was it, he would ask, that upon those railways a sum of something like 100,000,000 l. had been raised upon securities which were all terminable within periods of sixty to ninety years at the furthest? If this were possible to the Government of France, why should it be impossible for the Government of England, with the vast means of credit possessed by them, to raise a sum of 16,000,000 l. of money in some similar way at a time when money was extraordinarily abundant? He did say, then, that a great principle was at stake here. All the experience afforded by history must satisfy the Committee that sinking funds were absolutely illusory. Must not every hon. Member be convinced in his own mind that a sinking fund of 1,000,000 l. a year at the termination of the war was

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perfectly illusory? When peace came there would be a pressure upon the Government to take off some unpopular tax; and if they could escape from the liability of this annual payment without a positive act of bankruptcy, would not this sinking fund share the fate of other sinking funds? They ought to look the whole question boldly in the face, and be prepared either to create a perpetual national debt and borrow upon 3 per cent. Consols—the cheapest form in which they could obtain money—or else they should consider whether there was not some form of loan in which whatever addition was made to the national debt should be of a terminable character, so that in a given period of years it might be extinguished. He looked upon all this as a mere question of price in the market. If the Government of England went into the market and said, "Here is an annuity of 4l. or 5l. a year, terminable within a period of sixty or 100 years," this would have a clear, intelligible market value, and, like everything else, might be made negotiable. It would not bring for the moment quite so much proportionably as a perpetual annuity of 3 per cent, because the 3 per cent Consols formed the bulk of our stock, and commanded a better price on that account. But that was entirely a question as to the amount of stock you created. If the Government created so small an amount of stock as now proposed, that stock would be unavailable except to a very limited extent; but if they began by borrowing in the form of terminable annuities for a period of 100 or sixty years, and created similar stock whenever they were obliged to incur new debts, so as to throw into the market a large amount of stock expiring at the same period, and being, therefore, a uniform stock in the market, such a stock would be easily negotiable, and there would be no difficulty as to the rate at which that kind of security would go off. In creating it in Consols there was one important consideration; it would not be all gain which the Government made by effecting their loan in 3 per cent Consols. The circumstance which kept that stock at such an extraordinarily high price was, that it formed at present the only mode of investment for the greater number of trust funds. There was always, therefore, owing to this, a large demand, with a limited supply; and this stock was thus kept artificially high. If they compared the prices of the funds in England and France, the
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difference of price in the public securities was by no means justified by the intrinsic credit of the two countries, but it was due to the great wealth of England, seeking for investment in the one large and uniform description of stock open to it, which stock was therefore kept at an artificially high price. In consequence of that, 3 per cent consols bore a higher value than other securities, and consols were the barometer which regulated the value of the great mass of other property. If, therefore, by creating a large additional amount of that stock the Government increased the floating supply in the market, they would inevitably bring down the price of 3 per cent Consols, and in doing so would also bring down the prices of securities of every denomination, which fluctuated more or less with the price of Consols. Let the Committee consider for a moment whether the Chancellor of the Exchequer had obtained a loan on terms which gave an equivalent for having created perpetual instead of terminable annuities. A short time since consols remained steadily at from 92 to 93; money was comparatively scarce; the rate of interest at the Bank was 5 per cent; money suddenly became abundant and the market changed, from a condition of tightness to one of easiness; foreign exchanges were in our favour; bullion accumulated rapidly in the Bank; the Bank reduced the rate of interest to 4½ per cent, with the prospect of still further reduction; the circumstances were all in favour of retaining the price of Consols. But Consols were considerably depressed by a series of operations on the part of the Government, which, in his opinion, were short-sighted. The amount of sales by the Government broker on account of savings banks was so great that Consols, instead of rising from 92 or 93 to 94 or 95, had been depressed to 90 or 91. It was very bad policy, when a loan was contemplated, to depress the market by sales by the Government broker. The natural effect of a loan was to produce a heavy fall even with an abundance of money, and when every circumstance was otherwise favourable for great operations; and as soon as it was known a great portion of the loan would be created in 3 per cent Consols, as a natural consequence there was a heavy fall in the market. And thus, with favourable circumstances and abundance of money, instead of Consols rising, which he contended they would have done if there had been no sales by

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the Government broker, they had fallen, and instead of the loan being calculated on the basis of Consols at 94 or 95, or certainly, at the lowest calculation, at 92 or 93, Consols had been forced down to 90, and when the value of the annuity given with the 3 per cent Consols was estimated, he believed it would be found that the 16,000,000 l. of national debt was created at a figure equivalent to little more than consols at 85 or 87. There was another point connected with the loan in which he thought the Government was at fault. In borrowing money they had to choose between a system of open loan, in which the Government applied at once to the public, and a system of close loan, in which the Government applied to middlemen. He by no means participated in the prejudices against middlemen. He believed that in money, and in corn, and other trades, middlemen were useful, and that they might do better through a middleman than by direct communication with the customer; but in making use of middlemen or agents, they ought to bring the element of competition into action, and pit the middlemen against each other. If the Government resorted to agents for a loan they ought to take care there should be sufficient competition. They might either do that or abandon the use of agents, and resort to an open loan. Upon the information derived from private negotiation, they might fix the terms, and leave everybody who pleased to subscribe his 100 l. That system was adopted by the French Government, on a recent occasion, with great success; and he thought under that system the results obtained would have been more satisfactory than under the system which had in this instance been adopted by the right hon. Gentleman. If the Government had avoided the sale of savings-banks money, which depressed the market; if they had determined not to create more 3 per cent Consols, but to create a new 3½ per cent stock, or some description of terminable annuities; and if they had made up their minds to a clear and intelligible plan, by which the whole public would have been invited to subscribe, his belief was that they would have obtained the money on much more favourable terms than had been obtained on this occasion. The first hearing of a Budget was not an occasion upon which to enter into details, but he trusted the House would take the opportunity of considering the principle on which this loan bad been created, and,
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after mature deliberation, decide the principle on which future loans should be created. He would merely make one remark on the increase of taxes. There was a sum of 5,000,000 l. to make up; and he had heard with great regret that several additional taxes were to be proposed. He could not understand why the income tax was not raised higher, when during the last war it stood at 10 per cent. The present generation were as patriotic as the last, and as ready to pay with their eyes open the taxes which were necessary, end not 10 but 9 per cent would produce the whole money which was required. He could net understand why they were to retrace their steps—why they were to affect such important interests as the interests of our West India colonies by an alteration of the sugar duties—why they were to meddle with a tax of so much importance as the duty on coffee, for the sake of a miserable sum of 150,000 l.—or, why they were to incur all the evils of unsettling the system of taxation adopted in recent legislation for these comparatively small amounts, while the income tax remained to them. He trusted the Committee would bear in mind that the money derived by the Exchequer by no means represented the evils caused by these small additions to taxation. If by an alteration of the sugar duties the Government raised a million of money, that million of money would not adequately represent the mischief to the colonial interests by unsettling the sugar duties. During a great many years past the sugar duties had been in a state of perpetual alteration. No man interested in the West India colonies had known from month to month, scarcely from day to day, what those duties were. At last, when, having struggled through great difficulties, those colonies were beginning to raise their heads and improve their condition, the sugar duties were again to be unsettled. He hoped the House would say, "We have gone to war with our eyes open, and we will bear the burden with our eyes open; we will not fritter away the sources of our trade; we will not affect the condition of the working classes; we will not undo what we have done; and we will not consent to all these petty and peddling alterations in the financial policy established by Sir Robert Peel."
SIR HENRY WILLOUGHBYsaid, he should not enter into the question raised by the speech of the Chancellor of the Exchequer, but rather seek to obtain information

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for future discussions. Upon the Resolutions read by the Chairman he did not feel himself in a position to give an opinion; but, in reply to the hon. Gentleman who had just spoken, he would say that he did not believe the Chancellor of the Exchequer existed, ever did exist, or ever would exist, who was able to extract from the pockets of the people in one year 86,000,000 l. He said it was impossible either by direct or indirect taxation to raise that sum. If he were allowed to make a remark upon that large amount, it would be to point out the enormous danger of entering on an aggressive war upon the Russian Empire. They might have easily protected their allies the Turks from aggression, but when they entered on an aggressive war the immediate consequence was the raising of taxation to 86,250,000 1. He understood the Chancellor of the Exchequer to say that the expenditure of the year 1854–55, ending the 31st of March, amounted to 65,692,962 1. He wished to learn whether there were any outstanding expenses; because, unless they could get at that, they would know nothing, and might fall into a prodigious error in supposing those figures represented the whole expense of the war up to the end of March last. He wished to learn from the right hon. Gentleman to what extent this country had run in debt during the past year? Fresh taxes to the amount of upwards of 10,000,000 1. were voted last year, a large portion of which—he believed nearly onehalf—was still unpaid, though upwards of 7,000,000 1. of money raised by Exchequer bonds and Exchequer bills had been actually spent. He wished to know, therefore, where the right hon. Gentleman took credit for the 5,000,000 1. of taxes still due on the year 1854–55—because there are both the debt and the taxes to be accounted for. So far from the expenses of the war having been paid out of the taxes, he believed the Government had spent all the taxes that could be obtained, and 7,300,000 1. of borrowed money in Exchequer bills and Exchequer bonds. The right hon. Gentleman had stated very clearly what was a terminable annuity; but in the course which the right hon. Gentleman proposed to take of applying the income tax to these annuities there was the danger of taxing, the principal and not the interest, and to tax the principal would be to enter upon a career at variance with all principle whatever. Was it not the fact that at this moment an enormous
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tax was levied upon Long Annuities, and could it be imagined that taxes could be continued to be raised by a species of taxation which was nothing more than robbery and plunder of the grossest description? He agreed with the hon. Member for Wycombe (Mr. Martin Smith), that the right hon. Gentleman ought to give some clear intimation of the intention of the Government with regard to subjecting the new terminable annuities to the income tax.
THE CHANCELLOR OF THE EXCHEQUER: In answer to the first question of the hon. Baronet with respect to the expenses of the war, I may inform him that the chief part of the expenses of the army, navy, and ordnance department, is met by payments in ready money; and that with regard to the charges for transports, and for various contracts for food and clothing, the payments were made every quarter, and have been made within the last few days—at all events very recently. No doubt some of these payments may be in arrear, but I do not apprehend that the amount is very large. With respect to the Exchequer bills and bonds referred to, no portion of them is payable next year, and therefore no provision for them is necessary at present. With regard to the terminable annuities referred to by the hon. Baronet, I am perfectly aware that they are subject to the income tax. In my opinion, it is right in principle that an annuity terminable in a certain length of time should be considered as income, and be subject to the income tax. Those who take terminable annuities reckon upon the income tax as one of the elements of their calculation when they offer a certain price. So long as the income tax exists their calculation holds good, and if the income tax should be diminished or repealed they receive a benefit upon their speculation. The Committee will be aware that terminable annuities to a considerable extent were created in the late war at the time when the income tax was in operation, and no doubt the loans then entered into were entered into upon the calculation of the income tax. With regard to what the hon. Member for the Wick boroughs said in reference to terminable annuities, I apprehend that these annuities are terminable stock in the same sense as railway debentures in this country are terminable stocks. They are loans granted for a short term of years, which, when the term expires, are renewed

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by reborrowing; and I apprehend that that is the principle adopted by the foreign railway companies referred to by the hon. Member for Wick (Mr. Laing). The hon. Gentleman talked of effecting a loan in terminable annuities by appealing to the public at large. If such an appeal had been made, it would have been made in vain. The only customers for terminable annuities are such bodies as the Bank of England, insurance and other companies, who are in the habit of dealing in money, and who hope in a speculation of this nature to gain some advantage.
MR. LAINGobserved, that the foreign railways he had referred to had obtained money upon securities strictly terminable. A person bought what he supposed to be an annuity of 10 per cent, and it positively terminated in it certain number of years.
MR. FREWENthought some portion of the propositions of the right hon. Baronet would meet with considerable opposition. He wished to call the attention of the right hon. Gentleman to the desirability of giving every possible facility to a person charged with the income tax without being liable to it, or who had been overcharged, to appeal against the tax. He could assure the right hon. Gentleman that many persons whose incomes were considerably under 100 1. a-year, and who therefore ought not to be called on to pay the income tax, had had it deducted when they received their dividends, and they very seldom succeeded in recovering the amount, or, when they did so, it was with great difficulty. The difficulties of appealing against the tax were very great, and ought to be rendered much lighter.
MR. GLADSTONE: Sir, I am induced to rise at this period of the discussion, because I do not feel entirely certain that the Committe are aware of the precise nature and bearings of the Resolution which has already been read from the chair. In the excellent speech of my right hon. Friend the Chancellor of the Exchequer—a speech distinguished as well by the utmost candour and fairness as by its great clearness —in that excellent speech I only regretted a single omission—namely, that my right hon. Friend did not state to us precisely both the order of the Votes he intended to ask for to-night, and likewise the exact effect and character of those Votes. If, therefore, I now presume to state what is the nature and character of those Votes, I do so only with a view of offering my
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humble assistance to the Committee, and I shall do so subject to correction from my right hon. Friend if what I state is inaccurate. I apprehend my right hon. Friend will ask us to-night in the first place for a Vote which will empower him on the subject of the loan for which he has made a provisional contract; and I presume that, after having done so, he will go on to ask for a series of further Votes, which will enable him to levy the new taxes he has proposed in so far as they belong to the class and character of indirect taxation. If I am right, the Votes for which my right hon. Friend will thus ask us are entirely distinct in their substantial character. If he asks us for a Vote to levy an increased duty on tea, sugar, coffee, or spirit, to-morrow morning, I apprehend he is in a condition to say that, as far as the Vote of to-night is concerned, it does not in any way commit the final judgment of hon. Members, but that every Gentleman who concurs in the Vote to-night, if he thinks proper, in the very next stage of proceedings will be as free to take a different course, and to reverse the measure proposed by the Chancellor of the Exchequer, as if he had never concurred in the preliminary step. I am afraid that the Committee may think it an analogous proceeding with respect to the Vote on the loan; but, on the contrary—not from any fault of my right hon. Friend, for he has acted in strict conformity to practice and according to the dictates of prudence —I apprehend he is asking for a Vote on the subject of the loan which will be binding and conclusive between us and the contractors, and, though with reference to the taxes proposed you are only called upon to give an indirect and technical Vote, yet you are going to commit yourselves as to the loan of 16,000,000 l. I apprehend I am right in this statement. [The CHANCELLOR of the EXCHEQUER signified his assent.] I understand then that the Vote we are called upon to give will be a distinct "ay" or "no" as to the arrangements my right hon. Friend proposes to make between the State and certain contractors who are about to lend us 16,000,000 1.; and that, after having given this vote, though we may criticise the arrangement, yet it will not be competent to us to dispute or interfere with the conditions of this contract. If this is the state of the case, the Committee is aware of the issue before it, and must consider the Resolution which we have now heard

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for the first time; and in consenting to which the Committee will sanction the provisional contract which has been made. Up to this moment we possess entire liberty, which, by consenting to the Resolution, we are about to part with. I am not prepared to withhold my affirmative vote from the proposal of my right hon. Friend, if the House should confirm the contract which he has provisionally entered into; but, before I say anything on the merits of the contract, I wish to express my desire, for fear of any misunderstanding, that we should exclude from the Resolution that portion of it which relates to the peculiar arrangement proposed by my right hon. Friend for the repayment of the loan. My right hon. Friend has proposed an arrangement, with respect to which I give him credit, not only for the best, but for the highest intentions; for he has tried on his part to vindicate the principle that we should transmit as little as possible of the burden of this war to those who are to follow us, and that we should make provision as far as we can to discharge its expenses ourselves. At the same time, without giving any conclusive judgment, I feel great doubt and difficulty with regard to the peculiar provisions proposed for the repayment of the loan, and should wish to have time to consider these provisions; but I am afraid that it is just possible we may be told, if we agree to-night to the Resolution now before the Committee, which Resolution is understood to be binding and conclusive as to the substance of the arrangement, the Committee may find that it has parted with its liberty with regard to the peculiar arrangements made for the repayment of the loan, and that it will be held that the Resolution of this House sanctions the substantial contract between the State and the lenders of the money, and that they will have a right to bind and hold us to the peculiar provisions which my right hon. Friend proposes. What I would suggest to my right hon. Friend is, that the provisions with respect to the repayment of the loan should be separated from the rest of the Resolution, and I am not aware of any strong reason, if it is so separated and put into a distinct Resolution, why a Resolution should be taken on it to-night. I hope my right hon. Friend will consent to separate this Resolution, so that we may be left free not only to canvass his proposals as to the repayment of the loan, but even to modify his Resolution in that respect. I listened
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to the speech of the hon. Member for Wick (Mr. Laing) with great interest, and sympathised in the high English spirit which it appeared to evince; but I am not prepared to say with him that it was the duty of my right hon. Friend to propose to us on the present occasion to raise the income tax to 10 per cent. My opinion is that, if all persons who are payers of the income tax possessed the same incomes and were in the same circumstances as those who listened to the hon. Member's speech, then it would have been right and obligatory on my right hon. Friend to propose to raise the income tax to 10 per cent; it would have been the simplest, the most powerful, the safest, and fairest measure he could have taken. But it is only those who are actually conversant with financial affairs who are aware of how severe becomes the pressure of the income tax when you approach the classes that are touched by it when you come to its lowest limits. I am bound to say that it is a serious and doubtful question whether you can carry the augmentation of the income tax to the war limit of 10 per cent without undertaking the difficult political problem of a further extension of the income tax downwards beyond any limit that has yet been attempted. Let us consider the present position of the income tax. You levy it on persons possessing an income of 100 l. a year, and, in so doing, I may say that you take it from the whole of the educated part of the community; those of the educated class who receive less than 100 l. are so few that they may for the present be put out of the question, while, on the other hand, those labourers and mechanics who receive 100 l. are limited in number. Therefore, in the main, the dividing line of 100 l. is the line between the educated and the labouring part of the community. I hope the sense in which I use these terms is understood. What I feel strongly, and what I think the Committee must feel is that, measuring wealth and poverty not by figures merely, but by their relations—station, position, and social wants—the educated part of the community, with 100 l. a year, is clearly poorer than the less educated part of the community, who may have 60 l., 70 l., or 80 l. per annum. I say, therefore, that it is not a mere fiscal question to be settled at a stroke—that there are more than mere fiscal questions involved in the question, whether we should raise the income tax to 10 per cent or not. I look at the augment-

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ation of the income tax as a necessary incident of the war, and have not a doubt that if the war is materially protracted you must raise it to 10 per cent; but, if you do so, you must consider in connection with it the relation of the classes to which I have briefly adverted—that great political problem—and, also, the extensive machinery that will be required, and the difficulties of its administration. I think my right hon. Friend, not finding it absolutely necessary to undertake these gigantic difficulties, was justified in resorting to other means, and I am not prepared to join in a censure for his not having proposed to raise the income tax to 10 per cent. I am bound to say that, though not prepared to withhold my vote from the proposal of the Chancellor of the Exchequer to borrow a large sum of money, my impressions on the subject of public loans are not different from those which I entertained when I had the honour to propose a War Budget to this House. If there is one sentence in the speech of my right hon. Friend from which I emphatically differ—and that difference is a verbal, though a marked one—it is contained in the sentence in which he referred to the able and ingenious pamphlet, well worthy of the attention of every Member of this House and of the public generally, recently published by Mr. Newmarch, who has examined in detail the financial policy of Mr. Pitt during the revolutionary war. The words of my right hon. Friend were, I think, that Mr. Newmarch had shown that the loans of Mr. Pitt were contracted on far more advantageous terms for the public than was of late years commonly supposed to be the case. I frankly own that, in my opinion, that is not what Mr. Newmarch has proved. What he has shown is this—that infinitely greater difficulties than are commonly supposed would have beset the path of Mr. Pitt if he had attempted to proceed in another manner. No doubt Mr. Newmarch shows that you could not have realised the whole of those advantages which many persons supposed that you might have gained from a different method of proceeding. It has been a common idea that if you had borrowed at 5 per cent in place of at 3 per cent, instead of getting 100 l. at the latter rate you could easily have got 166 l. at the former. In my opinion Mr. Newmarch shows that there is no mode of borrowing which is advantageous to the public, but that all modes alike are attended with difficulty and disadvantage.
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I own that he strengthens my opinion of the damage and detriment which accrue to the public from becoming borrowers upon a large scale under pressing necessities; for he shows, not that Mr. Pitt's loans were less disadvantageous to the country, but that any loans whatever, contracted how you will, must be attended with immense economical disadvantages and with heavy pecuniary burdens. But with these impressions upon my mind, and being by no means disposed to extenuate my share in the proposals of last year—on the contrary, being well content to have been the instrument of any Government in inducing the House of Commons to make what I think was a manly, resolute, honourable, and successful effort—without in the slightest degree receding under that storm of invective which every man must expect who does not endeavour to square and suit himself to everybody's convenience, but remembers that there is such thing as the public interest, which, after all, is somewhat different from the convenience of classes—being prepared to stand up and contend for the principle which I then avowed; yet I apprehend that there is a limit to its application, and that we cannot possibly expect a free country—that we cannot possibly expect even this great and enlightened assembly, representing a free country—to push the very soundest economical doctrines, under all circumstances, to their extremes. You must remember that you have to deal with flesh and blood, and that you cannot ask from flesh and blood more than they can reasonably bear. I go a step further, and I admit that there is a point at which the sudden accumulation of taxation becomes so great an evil, and so great a cause of disturbance to all personal and social relations, that it is better to provide yourself with money up to a certain limit at a pecuniary disadvantage than to carry that disturbance through all ranks of the country. Therefore, for some considerable time past—ever since the growth of the expenditure for the war became so uncontrollable—I have fully admitted that it was necessary for the Government to make provision for a considerable portion of the expenses of the year by borrowing money, and I was prepared to say that the Chancellor of the Exchequer could not be blamed for resorting to a loan. I do not speak merely of raising money in anticipation of taxes—I myself last year made provision for a considerable portion of the expenses by borrowed money

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—but it was merely borrowed money in anticipation of taxes, which has been covered, within a million, by the taxes raised last year —but it was clear to me that some more extended measure must be resorted to if we were to make provision for another year of war expenditure. Holding that opinion, I am not disposed to enter upon any minute criticism as to the precise proportion of money to be borrowed in comparison with that to be raised by taxes, or even as to the question whether my right hon. Friend has selected the stock in which to borrow with a sound estimate of the public interests, or whether he might have carried to a greater extent the principle of borrowing by terminable annuities. I entirely agree with him that it would not have been practicable, except upon the most extravagant terms, to complete the whole, or anything like the whole, of his operation in that form. These are questions which, upon the fitting occasion, it may be proper to discuss, but it does not become me to discuss them now. The question for me is, whether I think, upon the whole, that the principle and outline of my right hon. Friend's plan, considered simply as a means of providing for the financial necessities of the country, are such that I should give to them my support, and I am quite prepared to say that none of those preferences which we may have for one mode of proceeding over another should induce us—as they do not refer to matters of primary importance—to withhold our vote from the plan of my right hon. Friend, the general principle of which we approve. I certainly should wish to have the power of considering more maturely the special provisions which he proposes to make for the repayment of the loan; but, as respects the form of the loan, I shall not even question the abstract merits of the proposition, because I am of opinion that it is of capital importance that the House should maintain the strength and credit of its financial organ in the face of the country; and even if it were in my power to show—which I do not assume— that in one point or another my right hon. Friend might have made this proposal in a manner more precisely coinciding with the public interest, yet I should have to balance the advantage so obtained against the great and heavy disadvantage—which I have good reason to know to be a great and heavy disadvantage—which a Chancellor of the Exchequer, who is the guardian of the public interests, is exposed to by criticisms which, though unavailing indeed, are ac-
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tively, zealously, and constantly indulged in upon the plan which he proposes. I, therefore, am very much disposed to withhold those criticisms upon the present occasion. But there is another question upon which I think it necessary to reserve my judgment. My right hon. Friend opened his speech by referring to the time at which he made his financial statement, and he appeared to think that he owed us some apology for not having come before us at an earlier period with this exposition of his views. There was one reason, undoubtedly, why it was desirable, if it could have been done, that the finances of the country should have been brought before the House of Commons at a very early period of the Session, and that was, that the extremely rapid growth of expenditure during the last quarter has outstripped all bounds and all possibility of calculation. That rapid growth of expenditure pressed so severely upon the immediate resources of the Exchequer that it was necessary, if the Minister did not ask for additional supplies, that he should use his own discretionary power, and, availing himself to a certain extent of the favourable state of the public funds, should raise money by the sale of stock belonging to the National Debt Commissioners. My hon. Friend below me (Mr. Laing) has censured that step. I am responsible, however, for a large part of that proceeding, and my right hon. Friend is responsible for having continued in the same track. I do not believe that it would have been satisfactory to the House that, before the conclusion of the financial year, it should be called upon to make another financial arrangement. The real truth of the case is, that in time of peace it is an easy thing to propose to the House of Commons a financial arrangement which shall last over twelve months; but in time of war it is extremely difficult to do so. On the other hand, it is most annoying and worrying to the House of Commons to be continually pressed with one application after another for an increase of taxation; and it is most desirable to adhere, if possible, to the principle of an annual statement in preference to a multiplication of your financial plans. It may be open to question whether last year, in our desire to act in a constitutional manner, and to place ourselves at the command of Parliament, it was for the public convenience that the House of Commons should have been twice called upon to alter its arrangements, and to make ad-

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ditional pecuniary provisions for the expenditure; at any rate, I think that my right hon. Friend did quite right to reserve his statement to the usual time, and that he did right to use his discretionary powers for obtaining money upon terms which I do not think at all disadvantageous, but rather the reverse, instead of coming down prematurely to Parliament with a budget which he would have to alter again before the end of the Session. I am about to express regret in quite a different direction. I am decidedly disposed to regret that my right hon. Friend, having postponed his financial statement till the 20th of April, did not postpone it and the loan consequent upon it for a week or a fortnight longer; and I am so upon account of a question of the greatest importance. You have at this moment negotiations going forward at Vienna. Upon the issue of those negotiations it must depend whether your expenditure will be, as my right hon. Friend says, 86,000,000 l., or under 70,000,000 l. If you were to conclude peace to-morrow your expenditure for next year would probably be greater than for the year which has just closed, yet it would not be near the mark which my right hon. Friend has estimated. Take, for example, the item of 4,000,000 l. for embodying the militia. Of that sum 3,000,000 l. at least, and perhaps more, would be saved in case of peace. Then, again, for the transport service there is a sum of from 5,000,000 l. to 6,000,000 l. which has been voted, more than one-half of which would in all probability be saved if the negotiations which are now going on should lead to an immediate peace. We have also the large estimate of 8,000,000 l. for the Ordnance Department, a large portion of which is voted as a provision to meet the weekly, daily— nay hourly consumption arising from the exigencies of the war, and the necessity for those supplies and the arrangements connected with them would terminate with the war itself. It appears, then, that a large portion of the money which has been voted is connected with the immediate expenditure for the war, and I should have been glad if we had not been called upon to take a step of so great importance as the one which has this evening been proposed, at a time when we may expect from day to day to learn the issue of the conferences now being held at Vienna. I do not mean to say—for I am aware of the argument that might be urged if I did, that a war may leave off at any time—that
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by the present proposal you are pledging yourself to carry on the war; but our present position, as it appears to me, is somewhat peculiar. We have negotiations on foot in which a certain progress has been made. We have arrived at the third out of four conditions, and we have something like a moral certainty that if the negotiations on that third condition should fail in being brought to a satisfactory termination —and if they do unhappily fail we shall know it in a few days—the war will continue. Under these circumstances, I should have thought that, financially speaking, the budget, having been delayed to the 20th April, might have been advantageously postponed to a somewhat later period. [Mr. WILSON intimated dissent.] I see that my hon. Friend the Secretary of the Treasury shakes his head, but I think I am sufficiently familiar with the ordinary practice of my hon. Friend to understand the meaning of that shake of the head. I think he meant to express his conviction that if the budget had been postponed things could not have gone on; and I can quite believe that my right hon. Friend the Chancellor of the Exchequer might have found it necessary to ask for some temporary means of obtaining money on certain conditions, but on conditions not involving an important financial arrangement like that now proposed. I must add one sentence to what I have already said, because I am anxious that my vote tonight should not be made to bear an aspect which in reality it does not bear. It is to my mind impossible to overstate the magnitude of the issues involved in the negotiations now going on at Vienna. I confess it pains me deeply to see signs of levity, come they whence they may—and I do not allude to what has taken place in this House, for here I am glad to say I have seen no such tone exhibited—with reference to matters of such tremendous interest. I apprehend that when these negotiations are concluded, whatever may be the result, whether they lead to peace —which God grant—or whether they terminate in a manner which will render necessary a prolongation of the war, the House of Commons and the country, in one form or other, will have to pass their judgment upon them. It will then be for this House to determine whether in its judgment the Government has conceded too much or too little—whether it has well discharged its duty and its awful responsibility either of acceptance or rejection of

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terms of peace; and it is hardly possible to find language strong enough to characterise the grave nature of the responsibility which now devolves upon them. One thing is clear, and that is, that you cannot come out of the conferences now going on at Vienna as you entered into them. It would indeed be a sufficiently important matter for reflection if the only question involved in the conferences was the continuance of the war, after the conclusion of the conferences, upon the same footing as that upon which we stood before their commencement and holding the same relations towards the other Powers of Europe which we then held; but there is a high probability—if not a certainty—that if these conferences terminate without any result, your relations with the other Powers of Europe will be essentially changed. Compared with the present position of this country, the fundamentally new conditions under which it may be called upon to pursue the war form a question of gigantic importance. I wish that there should be no misunderstanding as regards the vote which I shall this night give—I do not wish it to be regarded as my judgment upon that awful question. Do not let it be said, that by consenting to make pecuniary provision for the year I have committed myself to the issue of the Vienna Conferences. As to the mere financial advantage of taking a loan at the present moment, I am perfectly willing to pass by that question rather than to attempt to interfere with the Government or with my right hon. Friend, but I reserve to myself the most perfect and absolute freedom to pass my judgment with respect to the issue of the conferences at Vienna. I will no longer trespass on the time of the Committee, but I will only say that my object has been to endeavour to place in a clear point of view the vote we are now called upon to give, and I, for my own part, retaining all my objection to loans, and all the desire I have always expressed that the expenses of the war should be defrayed, as far as they reasonably can be, from the taxation of the year, and reserving to myself the perfect freedom to which I have alluded, shall say "aye" to the proposal of my right hon. Friend.
SIR FITZROY KELLYsaid, he felt that he could not consistently with his duty give a silent vote upon the Resolutions before the Committee; but he felt called upon to call attention to one or two considerations regarding the loan which
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had that night been announced by the right hon. Gentleman the Chancellor of the Exchequer. It was not his intention to trouble the Committee with any observations on the proposed increase of direct or indirect taxation, but, as regarded the loan, it might prove, as had been suggested, by the hon. Member for Wick (Mr. Laing) the first of a series of loans to which the House would be called upon to assent, and it certainly was the duty of the Committee to withhold its approbation from any loan which might be proposed if they were satisfied that the plan proposed was vicious in principle and detrimental to the public interest. He felt called upon to say that the scheme of the loan now proposed by the right hon. Gentleman was marked with every defect which could belong to a loan, while it possessed no single advantage which the present state of the public revenue enabled a Minister to command. The scheme embraced two conflicting and objectionable principles, inasmuch as an amount of stock equal to the capital borrowed was created, and at the same time the repayment of a portion of the loan was to be made upon terminable annuities. It appeared to him that, looking at the present rate of interest and the price of the funds, to borrow 16,000,000 l. by the creation of an equal amount of stock was to proceed upon a false principle, and one which involved a large sacrifice of the public money. From the beginning of the year to the present day it appeared to him impossible that a worse time could have been selected or a more unfortunate moment for proposing a loan. The present state of the negotiations at Vienna, and the condition of the war in the Crimea, acting upon the money-market, rendered it more disadvantageous to contract a loan at the present day than at any former period of the year, and more especially as the public were led to believe that a very few days would bring the negotiations to a point which would give the public information to enable them to consider the terms upon which the loan was to be adopted. The first observation he should make was, that by creating this loan of 16,000,000 l. when the funds were about 10 per cent. below par, they made it impossible at any future time, however favourable the circumstances might be, fur the country to get out of it with a loss of less than 1,600,000 l. The difference between the present period and the time of Mr. Pitt, to which the right hon. Gentleman

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referred for precedents, was this—that in Mr. Pitt's time not only was a long war anticipated, which depressed the money-market to an almost unexampled degree, but public credit was at that time at its lowest ebb, and the mercantile community was in a condition of deep and wide-spread distress. Could, then, the terms at which a loan was obtained under such circumstances justify the bargain made by the Government now, when public credit was high and money abundant, and when, if some different principle had been acted upon, much more advantageous terms might doubtless have been procured for the public, and a saving of some 40,000 l. or 50,000 l. a year in interest at least effected. He conceived there were still greater objections to the other part of the right hon. Gentleman's proposition—namely, that which involved the payment of an interest of 14 s. 6d. by means of a terminable annuity expiring at the end of 30 years. This he thought was paying an unnecessary and extravagant percentage. He was of opinion that nothing but a case of extreme national necessity could justify any addition to the national debt, and therefore he did not hesitate to say that he was favourable, as a matter of general principle, to the raising of money by terminable annuities. But he must qualify that observation by adding that for Government to raise money on terminable annuities, when the rate of interest was high, and the price of the public funds far below what it would be in a time of prosperity, was making a bargain obviously most disadvantageous to the country, and guaranteeing for the long period of thirty years a rate of interest which they all hoped might not continue for more than three or four years longer. If the present war were to terminate in three, four, or five years, there could be no doubt that the rate of interest would fall, and there would be the means of obtaining a loan to any amount either by the creation of stock or terminable annuities on much more favourable terms than at present:—yet in consequence of the bargain now being made the country would have guaranteed a rate of interest for thirty years founded on the state of the money-market at the present moment under all the effects of an existing war. This naturally accounted for the hard terms forced on the right hon. Gentleman; for in accepting this loan the Government had sacrificed about a million sterling in capital, and in interest
1602
some 40,000 l. or 50,000 l. a year. The present price of the funds being about 90, money was worth about 3l. 6s. 8d. per cent. and no doubt with the credit of the Government it would have been perfectly easy for the right hon. Gentleman to raise 16,000,000 l. at the current interest of the day, for as long or as short a time as the Government might think it necessary to retain the money, and thus he would have been enabled, when the rate of interest fell, to pay off the loan by a fresh loan at a reduced interest. But instead of that, the right hon. Gentleman proposed the double plan now before the Committee. He had required an advance of what might be called a sum of 1,600,000 l. upon a terminable annuity of thirty years, not at 3l. 6s. 8d., the present value of money, but at 3l. 14 s. 6d. which was paying 8s. per cent., or 62,000 l. a-year, for the difference between a perpetual annuity and an annuity for thirty years on the sum of 1,600,000 l. It had been stated that Pitt made his loans during the war upon the principle of the right hon. Gentleman; but it should be borne in mind that that statesman never borrowed upon the creation of stock until he had exhausted all the resources of his genius, until all his efforts had failed to procure money on other terms. He should abstain from dividing the Committee on the question, following the example of the right hon. Member for the University of Oxford; because he felt that it was the duty of every Member of the House, engaged as they were in a war requiring all the efforts and resources at their command, not to thwart her Majesty's Government in any measures they might bring forward for the carrying on of that war, unless they should feel that, besides being vicious in principle and detrimental to the public interest, it would actually be a breach of faith in the House to sanction them. The loan, although both vicious and detrimental, was yet necessary for the purposes of the war. He should not, therefore, oppose the passing of the Resolution, but he entered his protest against the principles on which the loan was to be raised. Should they feel themselves again under the necessity of once more resorting to the money market, he hoped it would be upon other and more advantageous terms.
MR. W. WILLIAMSsaid, that, so far as concerned the direct taxation the right hon. Gentleman proposed, he saw nothing particularly objectionable, but he decidedly

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objected to the way in which it was proposed to add to the national debt, the amount of which was already so enormous. The right hon. Gentleman had followed in the track of all former Chancellors of the Exchequer, who, whenever they were under any financial pressure, resorted to an addition to the national debt. In this manner we had added no less than 44,000,000 l. to it during the last twenty years; and, although it might be alleged that we had made some reductions, they did not compensate for the augmentations of the debt. When 8,000,000 l. had to be raised to relieve the distress in Ireland a few years ago, the then Chancellor of the Exchequer, making the best bargain he could in Consols, added to the debt more by 938,000 l. than he received in money. He therefore remarked with pleasure that now, for the first time, the Chancellor of the Exchequer proposed to get his pound sterling for his pound of Consols. If Mr. Pitt had adopted that principle, our national debt would now be 175,000,000 l. less than it was. We had in 1798 a Finance Minister who made a loan of 34,000,000 l. in Consols; and how much did he get for that? Just half the amount—only 17,000,000 l. The 3 per cent Consols now amounted to more than 500,000,000 l. sterling, and their interest could not be reduced without a twelve month's notice; and no Chancellor of the Exchequer would be bold enough to attempt it with such an amount; yet it was now proposed to add to that amount. Our national debt in 1818 amounted to 776,000,000 l., and in 1852 it was 765,000,000 l., so that 11,500,000 l. was the whole amount of the reduction we had effected in the last forty years; but if he included the Exchequer bonds and Exchequer bills, our whole debt was but little less than 800,000,000 l., and would some day swamp the country. The proposition to lay aside 1,000,000 l. yearly for sixteen years to pay off these 16,000,000 l. was quite fallacious. It was not likely the House of Commons would be disposed to carry it out; and if they did, what an enormous loss the public would sustain when each million of these Consols, which were issued now at 86½, were to be bought back again, perhaps, at the price of 101 or 102, at a future day! The right hon. Gentleman had omitted, in his (Mr. Williams's) opinion, a very important item of taxation. He alluded to the omission of imposing the probate and legacy duty, and all property belonging to corpora-
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tions, colleges, Universities, and properties of that kind which now escape, but which would not have escaped under the Chancellorship of the right hon. Gentleman the Member for the University of Oxford (Mr. Gladstone). He (Mr. Williams) brought the question before the House some little time ago, and the Chancellor of the Exchequer promised to consider it—indeed, he stated that the late Chancellor of the Exchequer had left him the outline of a Bill which would be satisfactory with regard to that important measure. Although successive Governments had not been very successful in regard to the reduction of the national debt, he held that they were not justified in making additions to the debt irrespective of its present enormous amount, for he believed that the time would come when, as had been described by Hume, (the historian), the debt would put down the country, or the country would put down the debt. To that end it was as certain to come as day followed night, unless the Government put a speedy stop to the system of increasing our national debt. He desired to object in the strongest terms possible to any increase of the 3 per cent Consols, and he was surprised that any Chancellor of the Exchequer should recommend such a course, why not create new stock reserving the right to pay it off at par after twenty years.
THE CHANCELLOR OF THE EXCHEQUERwished to say a few words in reply to the observations of the right hon. Gentleman the Member for the University of Oxford (Mr. Gladstone). In negotiating the loan now under the consideration of the House the Government had strictly followed the precedents set by former Governments; and, though they were conscious that the course necessarily limited to a certain extent the discretion of the House, and would gladly have adopted some other means of providing for existing exigencies, they had found it impossible to resort to any other course. It was not their wish to do so if they could have adopted any other course previously to obtaining the consent of the House; but it must be obvious to any hon. Member, on reflection, that it would be utterly impossible for any Government to come down to the House and discuss the manner in which a loan should be effected, to arrange the minimum terms, and settle the details of negotiations which, in order to be successful, must necessarily be settled in private. So far from obtaining more satisfactory terms by

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the adoption of such a course, he believed that a contrary result would have been shown, They therefore decided to adhere to the precedents of former Governments, and had in no respect departed from them. It necessarily followed that, a provisional contract having been made with reference to the loan, they must now ask the House to abide by the terms contained in that contract, for it was impossible for the Government to consent to any alteration. With regard to the proposition to which his right hon. Friend had referred for the repayment of 1,000,000 l. a year at the termination of the war, that was not one of the essential conditions of the contract, and was a matter entirely open for the consideration of the House. If the House should not approve that provision it would be quite competent to them to modify or reject it. He hoped, however, that the Resolution relating to that subject would be permitted to pass with the other Resolutions to-night, as its omission might occasion some inconvenience, and he would undertake to say that that provision should not be viewed by the Government on the same footing as those parts of the Resolutions which were matters of contract with the lenders. With regard to the question of terminable annuities, the hon. and learned Gentleman (Sir F. Kelly) seemed to be under the impression that the Government had resorted to some novel and unprecedented course; but so far was that from being the case that the whole of the existing terminable annuities, which now amounted to above 1,000,000 l. a year, had been created in the same manner, namely, as attendant annuities upon loans. From 1793 to 1816 there had been thirty-one loans contracted, ten of which were aided by long annuities; and the slave compensation loan, contracted more recently, had been aided in the same manner. In adopting this mode of borrowing money the Government had, therefore, followed a long series of precedents. The hon. and learned Gentleman complained that the Government obtained 100 l. in money for every 100 l. of stock they created; but he (the Chancellor of the Exchequer) was at a loss to understand how that could be said to be a losing bargain on their part. when the Government, in borrowing money, gave 100 l. of stock for some 70 l. or 80 l. or 90 l. in money, the bargain was perhaps a disadvantageous one for them, but he could not see on what ground a complaint could be made against the Government, that they
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received 100 l. in money for each 100 l. of stock.
MR. HEYWORTHsaid, he had a most serious objection to all indirect taxation, because it tended to raise the price of all articles of general consumption. If prices were raised, consumption diminished, and a diminished consumption materially affected the industry of the country, destroying the very sources from which the country derived all the wealth which paid all the taxes. That was the ground on which politically he objected to indirect taxation. Members of that House did not like to increase their income tax, or to impose any additional tax upon those who were rich; but they had no hesitation in putting it upon the poor in the shape of a tax upon articles which they consumed, and which they paid for out of their incomes. It would have been far more politic and just to raise the additional taxation by an increased income tax, even if it amounted to 20 per cent—that would have shown some hardihood and nobleness in their warlike profession—but he should oppose any measure which recognised the objectionable system of indirect taxation.
MR. H. BAILLlEsaid, the Chancellor of the Exchequer appeared to have misunderstood the observations of his hon. and learned Friend the Member for East Suffolk (Sir F. Kelly), in whose views he entirely concurred. He (Mr. Baillie) believed that if the Chancellor of the Exchequer had gone into the market, and had borrowed money at the present rate of interest, which was about 3½ per cent, instead of bargaining to pay what was equivalent to 3¾ per cent, the Three-and-a-half per Cents thus created might, on the conclusion of peace, have been reduced without difficulty to Three per cents, and the country would have been relieved from a burden of ¾ per cent upon the debt, which under the present plan they would be compelled to pay for thirty years.
MR. WILKINSONsaid, he thought that the plan of the Chancellor of the Exchequer for raising the loan had been contrived so as to meet objections from both sides; because it would not defray the increased expenditure entirely from the revenue of the year, neither would it do so wholly by loan; while on the other hand, the amount to be borrowed would not be raised exclusively by perpetual annuities nor by terminable annuities. The scheme was therefore based upon a combination of the different principles advocated in oppo-

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site quarters. As to raising money upon Consols, it too was clearly the duty of the Chancellor of the Exchequer to borrow as cheaply as he could; and if the entire sum wanted were to be raised in the shape of Three per Cent consolidated and perpetual stock, it was not improbable that that would be a more advantageous arrangement for the public. It was notorious that the Three per Cent Consols were more in demand and fetched a higher price than other stocks, in consequence of what had been termed their "delightful simplicity." As to the plan of the right hon. Gentleman (Mr. Gladstone) for creating a two-and-half per cent stock, it was no doubt a great and a remarkably good plan, only it had been tried and found to fail, and therefore was not at all feasible. He scarcely thought, too, that the country would prove to be so virtuous as to lay by 1,000,000 l. a year for the purpose of redeeming the stock now proposed to be borrowed.
MR. JOHN MACGREGORsaid, he would give the Chancellor of the Exchequer credit for sincerity in the conviction that his measures were of the best possible character; but he was compelled to differ from him. He did not think that the present state of affairs justified a loan in the manner now proposed; he objected not only to the form of it, but he thought the right hon. Gentleman had committed a grave error in not having thrown it open to public competition. If that course had been pursued, and the necessary amount had been borrowed in the form of terminable annuities, no doubt sufficient money could have been obtained at an average rate of 31 per cent, with this advantage, that the debt would have vanished for ever at a given period. When the late French loan was announced and thrown open to public competition, more than double the sum demanded was rapidly subscribed; and a similar result would, in all probability, attend the adoption of that principle in this country. The country had long pronounced its verdict against any addition being made to its permanent debt, and the House should therefore pause before it suffered itself to be hastily drawn into sanctioning a fallacious and dangerous principle. The Government had not treated the country with confidence in this matter. There was now less prospect of peace than there was six months ago—the war was now only at its commencement, and it was obvious that if there was a deficit of 23,000,000 l. at this early stage
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of the struggle, the present budget, should the House unwisely commit itself to its principle, would be only the first of a series of similar additions to our already enormous and overwhelming public debt. He therefore trusted the House would pause before they sanctioned the present proposal of the Chancellor of the Exchequer. Montesquieu had observed that the English constitution would fail when the House of Commons became more corrupt than the Government—in other words, when they fell into apathy—and he much regretted to see so small an attendance when measures were being discussed which would injure the real interests of the country. Posterity was not being treated fairly, and it would say that it was not responsible, for it was not represented, and that the tax was saddled upon it without its consent by those who engaged in measures to which it was not a party. If ever there were measures which exhibited little practical wisdom with respect to future events they were those of the Chancellor of the Exchequer. If the House agreed to them, the country would not, and he would do all he could to make the country take up his opinions. He believed that Government belonged to the fatal number whom the gods had in their anger determined to destroy, but whom in their mercy they had first deprived of their senses to prevent them feeling their sufferings. He protested against the Resolution, which he was afraid would be only the commencement of a series of loans; and he must also dissent from the other parts of the budget. He had consented to arrest the decline in the tea duties in the present state of affairs, but he was opposed to any increase in them. Our merchants had framed their calculations upon the hypothesis that the existing legislation with regard to import duties on articles of consumption would be maintained, little dreaming after all that had passed in Parliament of late years on this long-controverted subject, that the Legislature would bo asked to retrace its steps and increase those duties. Although he thought their minimum scale of sugar duties had been fixed too low, the attempt to increase those and the tea duties would bring down upon the Government the curses of every woman in the country. This was one of the worst budgets that had ever been proposed, and it would make the Government more unpopular than any other measure they could have introduced.
MR. MUNTZsaid, the hon. Gentleman

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who had just sat down had observed that posterity would have a right to complain of being taxed in the manner proposed. Posterity might complain of them as they complained of their ancestors; but what would posterity say if in avoiding to tax them, they were to allow the Russians to carry the war into Europe generally, and to take possession of different countries till they arrived at our own coast, and destroyed all our trade and prosperity? No man could have a greater objection to loans under ordinary circumstances than he had, believing as he did that when money was obtained easily, either in public or in private life, it was generally spent wastefully. But this was an exceptional case, for there never before was a war which belonged so completely to posterity as the present one. It was of no interest to the nation at large, as it existed, whether the war were carried on or not; and if the war were for posterity, surely posterity ought to pay something toward the expense. He did not object to a loan, but he objected to the principle which had been adopted. He was quite at a loss to understand why the Government had not adopted the principle of terminable annuities, and on that point he agreed with the hon. Member for the Wick Burghs (Mr. Laing), that the only question was what the country should pay. With terminable annuities only, the transaction would ultimately have closed itself, and the loan have come to an end. He thought the House of Commons was used in a rather extraordinary manner, inasmuch as the Government did not come there in the first instance to ask what the loan should be, whether as regarded the amount or the terms, but agreed with a great capitalist for a loan at a certain rate, and then came to them for sanction. That was making a laughing-stock of the House. How could the House check the Government when the whole affair had been settled before it was brought under their notice? With regard to the rest of the budget, he thought it would cause much unnecessary suffering to merchants by making alterations which they had no reason to anticipate. As regarded the income tax, he objected as strongly as any one to the manner in which that impost was now levied, but he would rather see it extended so as to meet the requirements of the country, than see any increase of the taxes on the necessaries of life.
MR. HILDYARDwished to know whether the Chancellor of the Exchequer pro-
1610
posed that the increase of twopence in the pound should apply to incomes under 150 l. a year?
THE CHANCELLOR OF THE EXCHEQUERsaid, his proposition was that the increase should apply to incomes generally.
MR. MASTERMANsaid, he thought the House ought to come to an early decision with regard to the loan. He did not think the Government had made an unfavourable bargain for the country. In his opinion the House should be satisfied with the bargain, and not hesitate to sanction it.
MR. THORNELYwas gratified to learn from the Chancellor of the Exchequer that they would not bind themselves by assenting to the Resolution in the chairman's hands, to appropriate a million a year after a treaty of peace had been signed, to the extinction of the three per cent consols. He totally objected to the making of such an engagement beforehand, and was satisfied with the present arrangement with regard to the sinking fund.
MR. MALINSsaid, having last year deprecated any attempt to raise the amount required annually during the war from taxes levied within the year, he felt extremely gratified that the present Chancellor of the Exchequer was not about to engage in such a task. On general principles he approved of the plan adopted by the Chancellor of the Exchequer for the purpose of meeting the deficiency; and he thought the Government had made a fair compromise between direct and indirect taxation, when they proposed to raise 3,300,000 l. by indirect, and 2,000,000 l. by direct taxation. The Government had, in his opinion exercised a wise discretion in coming forward so early for a loan, and in giving up all attempts to raise 86,000 l. within the present year; and if it should be necessary to carry on the war for a long period, he hoped the Government would endeavour to meet it by a mixture of direct and indirect taxation, combined with moderate loans on the best terms that could be obtained. He rose chiefly for the purpose of expressing his approval of the budget submitted to the House.
Resolution agreed to.
Resolution having reference to the spirit and malt duties having been read,
THE CHANCELLOR OF THE EXCHEQUERstated, in reply to a question from Mr. CRAUFURD, that the Government had no intention to make any alteration with regard to the drawback on malt
Resolution agreed to.
Other Resolutions agreed to.
MR. JOHN MACGREGORrose to warn the House against reporting the Resolutions in a hasty and ill-considered manner. The effect of reporting these Resolutions would be to enable the Government to levy from to-morrow all the new taxes indicated by them, without having to wait for the authorisation of distinct Acts of Parliament. He was quite aware that to oppose this new scheme of taxation would be quite in vain, unsupported as the attempt must be by any organised party opposition. Still he could not allow the moment to pass without entering his protest against the rash interference with the progress of industry and commerce contemplated by the proposal announced that evening.
Resolutions to be reported on Monday next.
The House resumed.

ARMY BEFORE SEBASTOPOL COMMITTEE.
MR. BENTINCKrose to move, that Mr. John Ball be discharged from further attendance on Army before Sebastopol Committee, and that Captain Scobell be appointed in his place. The hon. Gentleman said that he wished, in bringing forward this Motion, to state in the first place, that he did so without any wish to disparage the hon. Gentleman whose name was involved in it. Upon general grounds no one probably was more competent to be a Member of the Committee than the hon. Member for the county Carlow; but it appeared to him to be perfectly impossible that an hon. Gentleman who was a Member of the Government could look upon a Committee, or upon the report of a Committee, which was to try the conduct of that Government, with the same impartiality as if he were sitting below the gangway in the place he occupied in the early part of the Session. A great deal was said at the time the Committee was formed of the importance of having the most impartial names that could be selected for the purpose. With that view various names were selected and various names were rejected. Now, to have on that Committee the name of an hon. Gentleman himself a Member of the Government, was, he humbly submitted, a proceeding wholly inconsistent with previous acts. They might be told, however, that the present Government was not that whose conduct was being inquired into.
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But hon. Gentlemen opposite would be pleased to recollect that there were at least eight Members of the present Cabinet who were Members of the late Cabinet; so that there were no less than eight Members of the present Cabinet whose conduct was involved in the report which would issue from the Committee sitting up stairs. Now, although the House had seen of late a rather glaring instance of a Member of a Government deserting his colleagues, in the case of the hon. Gentleman opposite (Mr. B. Osborne), still it was scarcely to be expected that a Member of the Government would be the most impartial person to select as a Member of the Committee. It was quite certain, at all events, that the country would not be satisfied with a report of such a Committee. Now, in order to avoid the appearance of having acted from mere party motives—an insinuation often thrown out against those sitting on the opposition side of the House by the Gentleman opposite, as well as to supply an element greatly deficient in the composition of the present Committee, he proposed the name of the hon. Member for Bath (Captain Scobell) to fill the place of the hon. Member for Carlow, believing him to be a person that could greatly aid the labours of the Committee.
MR. F. HUMEseconded the Motion.
MR. ROEBUCKfully concurred with the hon. Gentleman (Mr. Bentinck) as to the propriety of discharging the hon. Member for Carlow from the Committee; but he thought the hon. Member was going somewhat beyond his province in nominating the Member who should supply his place. It would be remembered that there was a distinct understanding that the nomination of a portion of the Committee should be left to the Government, and amongst those whom they selected was the hon. Member for Carlow; but the hon. Member having been appointed Under Secretary for the Colonies, he had become incompetent to discharge his duties as a Member of the Committee. As he began the Committee, so he should continue to support it; and since, by arrangement, it was left to the Government to nominate a portion of the Committee, and one of the Members whom they selected was the hon. Member now proposed to be discharged, he thought, in all fairness, they ought to have the power of naming his successor. But it was said the naval element was wanting in the Committee;

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he did not think it was; but the Committee had, amongst other matters, to inquire into the clothing of the army, and therefore he thought a tailor might have been proposed just as well as a sailor—[Oh, oh!]. Hon. Members might cry "oh, oh!" but he wanted to know, if the argument was good in the one case, why should it not be equally good in the other? He wanted to know why it should be necessary to have a sailor on a Committee appointed to inquire into the state of the army before Sebastopol? However, he understood that the Government intended to propose that the hon. Member for the county of Limerick (Mr. De Vere) should supply the place of the hon. Member for Carlow; and, in accordance with the arrangement to which he had already referred, he thought the matter ought to be left in their hands.
MR. LIDDELLasked upon what ground the Government could claim the right of appointing a Member of this Committee? Who first called for the inquiry? Why, the people; and Parliament, responding to the appeal of the country, consented to the appointment of this Committee to investigate the conduct of those whose mismanagement had destroyed one of the noblest armies that had ever left our shores; and that House, as representing the people, ought to appoint the Members of the Committee and not the Government. And yet they were told that by arrangement the Government had the right to appoint a portion of the Committee. He protested against such an extraordinary doctrine as that laid down by the hon. and learned Member for Sheffield (Mr. Roebuck), and thought the House would best discharge its duty by disregarding the arrangement, if there was any, and filling up the vacancy themselves.
MR. ROEBUCKexplained that the existing Committee was appointed upon an understanding with himself, and the right hon. Gentleman the Member for Buckinghamshire, which understanding gave the Government the right to nominate a portion of the Committee, and all that he now said was, that that understanding should be adhered to, and that one of the Members appointed by the Government having been withdrawn, they should propose another in his place.
VISCOUNT PALMERSTONsaid, it was the uniform practice of the House, when a Committee was to be appointed to investigate matters of such deep and great
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importance as those which had been submitted to this Committee, that the Members to serve should be selected by the Mover of the Committee in communication with the Government of the day—not that the Government were always to appoint the persons to serve on the Committee; but it was only right and proper, when matters were to be investigated, in which the conduct of the Government was concerned, that only such persons should be appointed, who, by their impartiality, by their competence, by their ability, were the best qualified to perform the duties and execute the task confided to them. It was in that sense, and in that sense only, that according to the established practice of the House the Government and the hon. and learned Member for Sheffield agreed in communication with each ether upon the persons who should form the Committee. Those who had watched the proceedings and conduct of the Committee would agree with him that the choice was well made, and that only those Members had been selected who were the best fitted to be entrusted with the difficult and delicate investigation which had been confided to them. From the moment, however, that the hon. Member for Carlow accepted the office of Under Secretary for the Colonies, it was quite impossible that he could continue to be a Member of the Committee. His official occupations would have interfered with his attendance on the Committee; but it was not so much that as his belonging to the Government that disqualified him from continuing a Member of the Committee. Then came the question who should succeed him? Now, his hon. Friend the Member for Carlow was the only Irish Member on the Committee, while he thought it was understood when the Committee was appointed, that it was only right and proper that there should be at least one Irish Member on it. Therefore he should propose that the hon. Member for the county of Limerick should be appointed in the stead of Mr. Ball, and that being the choice of the Government—a choice which the hon. and learned Chairman of the Committee did not object to—he should have no alternative but to oppose the appointment of Mr. Scobell, with the view of nominating. Mr. De Vero on Monday.
MR. FRENCHsaid, the inquiry was one which had been demanded by the nation, and accorded by the House of Commons; and it was the duty of the House

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to see that the inquiry was an impartial one. Now that could not be if the Members were to be left to the selection of the Government, or if the House refused to place a Member of the naval profession on the Committee, which, he believed, had become absolutely necessary.
Mr. JOHN BALLdischarged from further attendance on the Committee.
MR.BENTINCKthen rose to propose that Captain Scobell should be placed upon the Committee in the room of Mr. Ball. He had no doubt that the arrangement declared to have been made between the Government, the right hon. Gentleman the Member for Buckinghamshire, and the hon. and learned Gentleman (Mr. Roebuck), was very satisfactory to the parties concerned; but he, for one, was not inclined to concur in that arrangement. The rule that the Government and the mover of the Committee should come to an understanding in a case like the present, and that the appointment should rest with them, might be a very good rule under ordinary circumstances, but could not be accepted now. It was a monstrous proposition to assert that the Government were to have the nomination of half a Committee, when that Committee was called upon to inquire into their conduct and character. He had no wish to say anything disrespectful of the hon. Member for Limerick (Mr. De Vere), but that Gentleman had only been a Member of that House for three or four months, and he would ask whether a gentleman who had had such short Parliamentary experience was fit to be placed on the Committee in the middle of its deliberations? The country was looking with intense interest for the Report of this Committee— the characters of many public men depended upon it; and nothing could be more absurd than that they should choose as one of the Committee an hon. Member who had not had the advantage of more than two or three months' Parliamentary experience.
MR. DRUMMONDsaid, it was at all times exceedingly difficult to select competent persons to serve on Committees. The House complained, and justly too, of the enormous lengths to which the Reports of Select Committees ran; but that arose in a great measure from the circumstance of appointing Members who were unable to give their full attendance upon the Committee, or who did not understand the question to be inquired into, and, there-
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fore, in order to make themselves masters of the subject, they asked all sorts of questions, until there was no end to the printed evidence. Now under these circumstances, he and his hon. and learned Friend (Mr. Roebuck) consulted with the various heads of as many parties as had heads, as to the persons who might be agreeable to them, or who were in their opinion the best qualified to serve on the Committee. In that way it was arranged that a certain number should be nominated by the right hon. Gentleman opposite (Mr. Disraeli), and the same thing was done with regard to the Government. Now the Gentleman who had just been superseded was one of those nominated by the Government, and the House was, in his opinion, bound by the original agreement to support the Government in their nomination of his successor.
ADMIRAL WALCOTT: Sir, I having on a previous occasion expressed how firmly I held the opinion that a naval officer ought to have been included among the Members of the Committee, that inquiry embracing the conduct and administration of the Transport Service, and the condition of Balaklava harbour, I had not been induced to have addressed you, Sir, at this time, were it not from the hon. and learned Gentleman (Mr. Roebuck) having expressed his opinion that a tailor would be of as much use as a sailor in the Committee. Now the fact is, did the House possess such a Member? A tailor would render good service in the Committee, seeing that so much turned upon the arrangement for clothing the troops, and the mismanagement in that department. For my part, I cannot but repeat how deeply I regret that no Member of the naval profession was placed upon that Committee, for none but a seaman is capable of eliciting such information and such answers as ought to satisfy the Members whether there was any foundation for the charges made against the naval authorities on the very difficult and complicated subject of the Transport Service and the management of Balaklava harbour; and the inevitable consequence of naming a Committee of hon. Members without a naval officer has, I know, produced much dissatisfaction in the country. I, in common with hon. Members, only desire a fair inquiry and no favour, such as may enable us to avoid fresh disasters and mismanagement of affairs. An able naval officer ought to have been at every port whence transports

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were laden and sailed, to regulate their departure and superintend the cargoes placed on board them, with correct invoices furnished to the several departments. As I trust the committee will soon bring their labours to a close, it might be too small advantage at the present time in Captain Scobell being placed upon it. I think, however, it was a disrespectful and most unbecoming observation of the hon. and learned Gentleman to say they might as well put a tailor as a sailor on the Committee. I mean no disrespect to tailors, but I do not consider it other than a coarse expression to compare a tailor with a naval officer. [Mr. ROEBUCK understood the gallant admiral to say, that if there were a tailor in the House, he ought to be put on the Committee.] I said no such thing—I said if the House possessed a tailor as an hon. Member, a tailor would be very useful, as the inquiry turned so much upon the clothing of the army; and I said this only in reference to the observation which fell from the hon. and learned Member.
MR. ROEBUCKsubmitted that he had correctly represented what the gallant admiral had said. The gallant admiral seemed to have confounded the province of a witness with the province of a judge. Any one of common sense could judge of the matters which the Committee were investigating, and no hon. Member had forborne to give his opinion because he was not a sailor. One official had arrived, and he was given to understand the gentleman who was in command at Balaklava was on his way to this country. The Committee had examined some witnesses as to the conduct of persons in Balaklava harbour, and they would examine those gentlemen also. He wanted to know why they were to be called upon to appoint a gentleman on the nomination of hon. Gentlemen opposite? He could only repeat that the Committee was formed upon an understanding. ["No! "and" Hear!"] Could there be any man in that House who did not know that propositions of that sort were always made upon an understanding? Without an understanding he could not have carried the Committee, or any Member of it. He went behind the Speaker's chair, and entered into correspondence with gentlemen on both sides of the House with the view to form a Committee which would give satisfaction to the country. It would be seen by and by whether they had performed their duties to the satisfaction of the House
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and of the country. It seemed to him that the understanding with which they had entered on the constitution of the Committee was that the Government should have the nomination of a certain part of the Committee. A Member having withdrawn whom the Government had nominated, he thought the Government had the right to nominate to the vacancy which had been created.
MR. JOHN MACGREGORdenied that it was right, though it might be the practice, to enter into a sort of cabal with the Minister as to the members to be nominated on a Committee. He also denied that any man of common sense would be a fit person to be nominated. A good ploughman might have common sense, but he was not therefore a good judge of the circumstances attending the loss of the Prince. Could they tell him that any man of common sense could sit on the woolsack where the Lord Chancellor sat? He must have received a legal education. Education was of all qualities the most essential in the selection of a judge. He thought it most invidious to object to his gallant Friend (Captain Scobell), in whom a large constituency put their trust, and he trusted the House would not be led away by the sophistry of the hon. and learned Member for Sheffield.
CAPTAIN SCOBELLhoped the House would give themselves no great trouble about his feelings or his desires, for he had no great feeling or desire to be upon the Sebastopol Committee. It should be remembered that no vacancy was declared by the Government until this Motion was made. The hon. Member for Norfolk (Mr. Bentinck) said to him, he thought the Under Secretary for the Colonies ought to vacate his seat; and would he allow his name to be proposed, as it would not do to propose any Member from the Opposition side, the Member withdrawing having sat on the Government side of the House? He concurred in thinking that the hon. Member for Carlow was disqualified from acting on the Committee by accepting office, and consented to the proposal of his name. He thought the joke about the tailor and the sailor unworthy of the quarter from which it came. He expected to have found more solidity in the learned Gentleman than was consistent with cracking jokes, because the two words, with the exception of a letter, were identical. But, since sailors were dispa-

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raged, he would observe that he had been a magistrate for thirty years, and as much in the habit of conducting examinations as the hon. and learned Gentleman himself. He believed he was as capable as most men of putting ordinary questions, and he supposed conjuring questions were not required. The hon. and learned Gentleman was a comparatively young man when he (Captain Scobell) first became a landsman; for such was the system, that when once a man got on shore he was never allowed to go to sea again while men of greater influence were to be found, and the worst of it was that if a man had once been to sea it seemed to be thought he was fit for nothing else. The First Lord of the Treasury said they wanted men of impartiality. The noble Lord dared not, and could not impeach his impartiality, though, perhaps, he was a little more independent than was agreeable to the Government. With respect to ability he was not a judge, and he must, therefore, leave the noble Lord to form his own opinion whether he was fit or unfit. The hon. Member for Surrey spoke of the thousands of questions that had been put—he did not know how many thousands he said — [Mr. DRUMMOND: 14,000]—but the hon. Gentleman implied that because he had been to sea he would ask more questions than any other person, since, as the hon. Member confessed he did not not know the person even of the other hon. Member whose name was proposed, he could not know that few questions would be put if he were appointed. He was just in the same position as the hon. Member for Surrey. He did not know even the person of the hon. Member whose name was proposed, but if the House thought his name preferable it would cause him no disappointment. He thought it his duty to reply to some personal observations which had been made, and from which he gathered that he was not estimated so highly as other Members on that side of the House. The reasons which had been given were all hollow, and might be summed up in this, that the Government and the Gentlemen whom the hon. and learned Member for Sheffield had consulted had made a kind of bargain, which would be broken if he were placed upon the Committee. The noble Lord said it was necessary to appoint a person of impartiality, as if he did not possess that quality. He had now been for some years a Member of that House, and while always endeavour-
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ing to act impartially, he had not shut his eyes to the faults of the Government.
VISCOUNT PALMERSTONsaid, he should be extremely sorry if the hon. and gallant Member were to leave the House under the impression that anything which he (Viscount Palmerston) had stated, was meant in the slightest degree to impugn his impartiality, ability, and least of all, that upon which the hon. Gentleman very properly prided himself—his independence. He could assure his hon. and gallant Friend that what he had stated had no reference to his hon. Friend personally, but referred entirely to the question of the manner in which understandings took place with regard to the appointment of Committees. What he had intended to say was, that an understanding between the mover of a Committee and other persons in the House was absolutely necessary, in order to secure the services of hon. Members competent, by their impartiality, ability, and other qualifications, to discharge the duties intrusted to them. That observation applied to the general question, and not in the least to his hon. and gallant Friend, who, in point, of impartiality and ability, was, undoubtedly, as fit to serve upon the Committee as any other Member of that House. The grounds upon which he had thought the hon. Member for Limerick (Mr. de Vere) a more fit person to be chosen upon the Committee than his hon. and gallant Friend were, that, inasmuch as the vacancy had arisen in consequence of the withdrawal of an Irish Member, and as there was no other Irish Member upon the Committee, there ought to be upon it at least one Irish Member, considering how deeply Irishmen and Irish matters were interested in the inquiry. It was solely upon that ground that he had objected to the proposal of the hon. Member opposite; and he hoped if his hon. and gallant Friend left the House, he would carry with him the conviction that nothing had been further from his (Viscount Palmerston's) intention than to state anything in the least disparaging of the independence and ability of his hon. and gallant Friend.
MR. MUNTZcomplained that the House of Commons was becoming every day more and more a cipher. He felt in great difficulty upon this subject. He had not the honour of knowing the hon. Gentleman whose name was proposed to be added to the Committee, even by sight, and in voting for a member of the Committee he

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should like to know whom he was voting for. He certainly could not make up his mind to stultify himself by voting for a member on the nomination of the Government, simply because the Government had lost a member of the Committee. He entertained great respect for many Members of Her Majesty's Government, but he could not place the highest confidence in them as a whole.
MR. MAGUIREsaid, the noble Lord at the head of the Government had appealed to the Irish Members to vote against the Motion of the hon. Member for Norfolk (Mr. Bentinck), but he thought the hon. Gentleman deserved the greatest credit for the manner in which he had brought his proposal forward. The noble Lord said, it was desirable to have one Irish Member on the Committee; but, if that were desirable, why had not more than one Irish Member been placed upon it? The conduct of many of the men who sat upon the Ministerial bench was involved in the inquiry, and it would be unfair to the country to allow the Government, by the connivance of any party in that House, to pack the Committee in their own favour. He acknowledged the abilities of the hon. Member for Limerick; but he must say at once, that he thought the hon. and gallant Member for Bath a more fit person to appoint upon the Committee. With regard to the remarks which had fallen from the hon. Member for West Surrey (Mr. Drummond), the hon. Gentleman had merely acted upon this occasion as he had upon many others, namely, made a speech upon one side of the question, and ended by voting on the other. It appeared from the observations of the hon. and learned Member for Sheffield that a most important witness—a gentleman who had charge of Balaklava harbour—was about to be examined, and it was, therefore, highly desirable to have a naval officer upon the Committee. The hon. and learned Member for Sheffield asked if the public were not satisfied with the Committee. He would give the hon. Gentleman an honest answer. He fully believed in the uprightness of the hon. Gentlemen, but he must say the tone and whole object of the Committee seemed to be to deal with the inquiry rather delicately. There was a vast amount of mealy mouthedness exhibited in that House, and a great deal of delicacy upstairs. In his opinion there was one man whose conduct ought particularly to
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be inquired into, and it was highly requisite that the Committee should ascertain the reason of the lethargy which had characterised the conduct of that man for months, while the noblest army ever sent into the field was withering away. The person he referred to was Lord Raglan; and he wished to ask where had been the inquiry into his conduct? The Committee had elicited a great amount of useful information, but only to confirm what The Times had already told the country, and what had been sneered at and denied front time to time by the Government. The country desired to know why Lord Raglan was sleeping while his army was rotting away; and the only way to obtain that information was by putting independent men upon the Committee, determined to probe the subject to the bottom.
MR. BENTINCK, in reply, expressed his surprise at the persistence of the hon. and learned Member for Sheffield in the extraordinary argument he had adopted. The hon. Gentleman told them that the Committee was formed upon an understanding between the Government and certain other persons; but he (Mr. Bentinck) contended that that was not the principle on which the Committee ought to be formed, and was a total misconception of the manner in which Committees were nominated in that House. The process of appointing a Committee was for the mover of a Committee, after having obtained the sanction of the House to his proposal, to submit to the House a certain number of names; but this was the first time he had ever heard the doctrine broached that the Government ought to be consulted as to the composition of a Committee. Such a doctrine would be highly objectionable, especially where the character of the Government was involved. As an independent Member his conduct was not called in question in the investigation, whereas the conduct of at least half of the Members of the Cabinet was impugned, and he, therefore, submitted that as an independent Member he was more entitled to suggest who should compose the Committee than the Government.
Motion made, and Question put, "That Captain SCOBELL be added to the Committee."
The House divided; Ayes 68, Noes 81: Majority 13.
The House adjourned at Eleven o'clock till Monday next.