Commons Sitting of 19 May 1856

MINUTES.
PUBLIC BILLS.—2o Transfer of Works (Ireland); Court of Exchequer (Scotland); Procedure and Evidence; Judicial Procedure, &c. (Scotland); Registration of Voters (Scotland).
3o Juvenile Convict Prison (Ireland).

THE BANDS IN THE PARKS—QUESTION.
MR. OTWAYsaid, he wished to ask the right hon. Gentleman (Sir B. Hall), in the absence of the noble Lord at the head of the Government, whether it was the fact that the performance of the military bands in the parks on Sundays had been prohibited by the order of the Government; if so, at whose solicitation; and further, whether the prohibition was to extend to other places besides the metropolis?
SIR BENJAMIN HALLsaid, that he had received a letter from the noble Lord
326
at the head of the Government desiring him to discontinue the music. That was all he knew about the matter.
VISCOUNT PALMERSTONhaving entered the House, Mr. OTWAY repeated his question.
VISCOUNT PALMERSTON: Sir, I received last week a letter from the Archbishop of Canterbury, stating on his own part, and on behalf of his episcopal brethren, reasons why he conceived that in deference to the religious feelings of a large portion of the community it would be desirable that the bands should not continue to play on Sunday evenings in Kensington Gardens and the parks. I wrote in reply to the Archbishop that I concurred in the arrangement by which the bands were to play in Kensington Gardens and the parks on Sunday afternoons; that my opinion had been, and still was, and that I had heard nothing to alter my view of the matter, that the arrangements afforded innocent recreation, combined with fresh air and healthful exercise; but I stated that having regard to the feelings which had been expressed by himself as head of the Church, and having also heard representations that that feeling was partaken by various other persons, I was naturally led, under these circumstances, to ask myself this question—whether the advantage which would arise from a continuance of that arrangment would compensate for the evil that must arise from running counter to the religious feelings of a large part of the community? I said there could be but one answer to that question, and I should therefore take steps to discontinue the playing of the bands. Of course that applies to the metropolis only.
MR. OTWAYsaid, he should then give notice that on the first occasion on which it was moved to go into Committee of Supply, he should move that the correspondence which had taken place between the noble Lord and the Archbishop of Canterbury be laid on the table.

THE DEFENDERS OF KARS—QUESTION.
MR. OLIVEIRAsaid, he would beg to ask whether it was the intention of Her Majesty's Government to extend to his gallant comrades—Colonel Lake, Major Teesdale, Captain Thompson, and Doctor Sandwith, the liberality which prompted the award of a pension to General Sir William Williams?
VISCOUNT PALMERSTON: I am sure that the House will feel that such an

327
arrangement ought to be kept within very narrow limits, and in strict accordance with precedent. Now, there is no precedent whatever for the giving pensions to any others beyond the commanding officers on such occasions.

THE ASSAULT ON MISS ARCHER— QUESTION.
MR. PEACOCKEsaid, he wished to ask the right hon. Baronet the Secretary of State for the Home Department whether he had instituted an inquiry into the assault upon Miss Archer on the day of the proclamation of peace by a police constable of the D division?
SIR GEORGE GREYin reply said, he had instituted no inquiry into the facts of the case, because, as to the facts of the case, they had been disposed of by the decision of Mr. Jardine. He had, however, given directions that every endeavour should be made to ascertain the person by whom the assault had been committed; a searching inquiry had been made into the conduct of every officer on duty that day, and inquiries had also been made of the proprietors of shops in the neighbourhood where it was alleged the assault had taken place, but not one person had been discovered who had witnessed it. An advertisement had been inserted in the newspapers requesting the gentleman who was stated by Miss Archer to have afforded her assistance to come forward, but without any result, and, under those circumstances it had been impossible to take any further stop. He might add that every opportunity had been afforded to Miss Archer to identify the police constable who, she alleged, assaulted her.

HORSES OF OFFICERS IN THE CRIMEA —QUESTION.
MR. NOELsaid, that it was stated in General Orders, dated the 26th of April, "that passages would be provided for the horses of brevet officers and staff officers who might be required to rejoin their regiments either on embarkation or on the abolition of their appointments." It also stated, "that it was doubtful whether claims for compensation for lost or injured horses would be favourably considered," the commander of the forces recommending to all such officers to dispose of their horses by any means in their power. He wished, therefore, to ask the hon. Under Secretary for War
328
whether, as many officers in the Crimea had been ordered from their regiments and called upon to do duty on the staff, while others had acted as field-officers with their regiments during the absence of the colonels doing duty as brigadiers, and had consequently been obliged at considerable expense to purchase chargers for the duties entailed on them, the Government intended to make any compensation to such officers for the great loss they must sustain by the sudden sale of those horses in the Crimea; or, whether they would convey, free of expense to the officer, those chargers purchased for special duty to such stations as their respective regiments might be ordered to?
MR. FREDERICK PEELsaid, in reply, that the general order recommending the officers in the Crimea to dispose of their horses had not yet come officially under the notice of the War Department; but he found that it drew a distinction between the two classes of horses—the horses for riding and baggage animals. The baggage animals were purchased by the Government, and as regarded them, he did not think the Government were bound to provide for their transport home. With regard to riding horses, it seemed to him that the case was less clear against the officers. If an officer was placed on the staff, and required to purchase horses out of his own resources, he was entitled, upon the discontinuance of the staff appointment, to receive something, either in compensation for the horses, or for the purpose of transporting them home. He was not prepared to give a definitive answer on the subject, but it should receive due consideration.
SIR DE LACY EVANSsaid, he would recommend that a telegraphic message should be sent to the Crimea, relative to the inquiry that had just been made; otherwise he should take the liberty of drawing the attention of the House to the situation of the officers.
MR. FREDERICK PEELsaid, that a telegraphic message had already been sent on the subject.

THE SCOTCH MEMBERS AND THE GOVERNMENT—QUESTION.
MR. ROEBUCKsaid, he wished to ask the noble Lord at the head of the Government, a question with regard to certain reports which he was given to understand had caused pain to many Members in that House. The noble Lord's answer might

329
perhaps alleviate that pain. It had been said that the noble Lord's determination with respect to the bands in the parks was in a great measure the result of a deputation of the Scotch Members of that House, which had waited upon him. He wanted to know from the noble Lord, whether he had really seen any such deputation?
VISCOUNT PALMERSTON: Sir, I saw that such a report was in existence, but I can assure the hon. and learned Gentleman that no such deputation has waited upon me.

WESTMINSTER BRIDGE—QUESTION.
MR. HENLEYsaid, he wished to ask the right hon. Gentleman (Sir B. Hall) whether the works in rebuilding Westminster Bridge were suspended, how long they were suspended for, what was the reason for that suspension, when the works would be recommenced, whether any difficulty had been experienced in carrying out the plans, and whether any alteration was intended with regard to those plans?
SIR BENJAMIN HALLsaid, the right hon. Gentleman's question was a very large one, and he was sorry he could not give him all the information he required. The subject of rebuilding Westminster Bridge was brought before a Committee of that House in 1853; the work was let out by contract upon a plan which he believed was sanctioned by the House; but some time afterwards the contractors became bankrupt, and he therefore placed the whole matter, which he found to be one of very great difficulty, entirely in the hands of two eminent engineers, Mr. Rendel and Mr. Simpson. All that had been since done, had been done under the sanction of those gentlemen, and he was in great hopes that he should have been able that day to lay on the table their Report on the existing state of the works, and as to the course they would recommend for the future. He had been informed, however, that the Report of Mr. Simpson and Mr. Rendel would not be ready for ten days or a fortnight, but as soon as it was made it should be laid upon the table of the House.

THE BUDGET—FINANCIAL STATEMENT.
The House resolved itself into a Committee of Ways and Means, Mr. FITZROY in the Chair.
THE CHANCELLOR OF THE EXCHEQUER: Mr. FitzRoy, it will be in the recollection of the Committee that in a
330
previous statement which I made in a Committee of Ways and Means about the end of February last, I stated the difference which existed between the estimates of revenue and expenditure which I made last year and the amounts as realised in actual receipts and actual expenditure. It will not, I trust, be necessary for me to trouble the Committee with a repetition of the statement which I made on that occasion, and I shall content myself, therefore, with shortly stating to the Committee that the receipts were somewhat less than I had anticipated, that the expenditure was somewhat greater than the Votes in Committee of Supply of the previous Session, and that the result showed an estimated deficiency for the service of last year of a sum amounting to £3,560,000. In order to cover that deficiency I submitted to the House a Resolution for a loan in Consols to the extent of £5,000,000. Since the statement to which I now advert the instalments of that loan have been completely paid up. In the last financial year the amount received of that loan was £3,500,000, and in the present financial year the sum received has been £1,500,000, making altogether the amount of £5,000,000. That result accounts for the entire receipt of the loan of £5,000,000. In addition, however, to that operation I laid before the House a plan, which received the assent of Parliament, for funding a sum of £3,000,000 of Exchequer Bills. That operation subsequently took effect, and it has been successful for the object for which it was proposed. The amount of Bills subscribed was £2,230,200; the Bills purchased out of money paid in lieu of Bills amounted to £769,800, making a total sum of £3,000,000. The Exchequer Bills, which were at a discount of from 7s. to 3s. in the month of February before the announcement of that plan, rose to par, or to about par, and the March exchange was in consequence effected without difficulty. The amount of Bills sent in for exchange was £6,794,100; the amount sent in for money was £455,600, which was defrayed out of the Ways and Means of the year.

EXCHEQUER BILLS, May 19, 1856.

Amount outstanding this day (May 19, 1856)

£20,124,000

Of which the Commissioners for the Reduction of the National Debt hold

5,000,000

Amount in the hands of the public

£15,124,000

Market Price quoted on Saturday last:—
June Bills, 10 s. to 5s. discount, equal to about 5s. discount to par, deducting income tax.
March Bills, 6s. to 2s. discount.

EXCHEQUER BILLS, Feb. 14, 1856.

(When the funding was announced.)

Amount Outstanding (Feb. 14,1856)

£23,093,000

Of which the National Debt Commissioners held

5,000,000

Amount then in the hands of the public

£18,093,000

Market price quoted on Feb. 14, 7s. to 3s. discount.
March Exchange.—Bills sent in for exchange, £6,794,100; bills sent in for money, £455,600.
Since the time when my previous statement was made, the balance-sheet for the financial year 1855–6 has been laid before Parliament, and members have had an opportunity of seeing in print the exact result of the public receipt and expenditure of last year. I shall not think it my duty to trouble them with any recapitulation of the results of that balance-sheet beyond a short explanation, which, perhaps, may assist hon. Gentlemen in understanding the statements which have been placed in their hands. The expenditure for the year 1855–6 was £88,428,345, the revenue derived from taxation for the same year being £65,704,491, leaving an excess of expenditure over revenue of £22,723,854. This sum, the Committee will observe, is exclusive of the advance of £1,000,000 for the loan to Sardinia, and exclusive also of the redemption of hereditary pensions to the amount of £213,000. The loan to Sardinia does not fall into the ordinary expenditure of the year, and it therefore does not come into the upper part of the balance-sheet, inasmuch as it is a loan repayable by Sardinia. A similar remark applies to the amount for the redemption of hereditary pensions, inasmuch as it is in the nature of a payment for the extinction of debt; but as these were payments made out of the Ways and Means of the year, they must be added to the excess of expenditure of £22,723,854, to show the payments made within the year; and the total excess of expenditure above revenue is then £23,936,854. In order to meet this excess the following sums were raised by borrowing—

By loans on Consols

£19,501,000

Exchequer Bonds

977,750

Exchequer Bills

6,000,000

Total

£26,478,750

The Committee will observe, therefore, that the money borrowed exceeded the
332
excess of payments over expenditure by £2,541,896. Now, Sir, it is my duty to account for that excess of £2,541,896, and the explanation is very simple. Any hon. Gentleman who compares the accounts which have been presented will find that the result is shown in the difference of the balances in the Exchequer. On the 31st of March, 1856, the balances in the Exchequer amounted to £5,600,000, and on the 31st of March, 1855, they were £3,949,000, subject to a deduction of £1,000,000, of outstanding Ways and Means' Bills, which had been advanced upon an anticipation of the revenue of the succeeding year, and which were paid off in 1855–6. To make a fair comparison, then, we must deduct £1,000,000 from the balance as it stood in March 1855, which will make the real balance at that time £2,949,000. If we compare the balance in April 1855, with that in April 1856, we shall find that the increased balance in the latter year was £2,651,000. The sum I have to account for is £2,541,896, and the Committee will see that there is a difference in favour of the Exchequer of £100,000 beyond that amount, owing to money received on account of the funding.
The expenditure of the year which has just elapsed has been in a great measure, as I need scarcely remind the Committee, incurred for war purposes. The charge of the debt has been slightly increased; the civil expenses may have been somewhat augmented, but the extraordinary expenditure of the last year has been principally for purposes connected with the war. I have, therefore, been desirous of preparing a statement which should exhibit as fairly and distinctly as possible the exact amount of the war expenditure during last year and the preceding year. On a former occasion, during the present Session, I made a statement of the expenditure incurred for the purposes of war, founded merely upon the Army and Navy Estimates. It was objected by hon. Members that that statement did not exhaust the subject; that it did not exhibit the increase of establishments for various military purposes; that it did not show the increased charge of debt, and that, therefore, it did not afford a completely fair exhibition of the additional expenses caused by the war. I have, therefore, on this occasion adopted a different mode of calculation, which must, I think, include all additional expenditure that has been created by the war. The

333
total expenditure in two years of war, 1854–5 and 1855–6, for all public purposes whatever, including £1,000,000 advanced on loan to Sardinia, has amounted to £155,121,307. The expenditure in two years of peace, 1852–3 and 1853–4, was £102,032,596. Deducting, then, the expenditure of the two years of peace from the expenditure of the two years of war, we find that the excess of expenditure in the two years of war was £53,088,711. I think it is impossible, according to this calculation, that any expense which is fairly due to the war can have been omitted. The revenue from taxation during the two years of war amounted to £125,200,645, and in the two years of peace to £108,018,123; the increase of revenue from taxation in the two years of war having been £17,182,522. To this amount I will add the money raised by additions to the funded and unfunded debt, amounting to £33,604,263, and, therefore, the total receipt during the two years of war from increased revenue and from money borrowed has been £50,786,785. To this sum the surplus income above the expenditure during the last two years of peace—£5,985,527—should also be added, thus making the total sum applicable to war expenditure over and above the sums applied to peace expenditure £56,772,312. Now, if we compare the estimated expenditure for the present year with the expenditure of the years of peace immediately preceding the war, we shall find that there is an excess of £24,500,000, and adding to that amount the excess of expenditure in the two years of war—£53,088,711, we arrive at a total expenditure for the three years of £77,588,711.
Before I proceed with a detailed statement of the estimated expenditure of the year I would beg leave to call the attention of the Committee to the peculiar character of the contest in which we have been engaged. By the modern inventions of machinery, by that acceleration of the means of locomotion which modern science and skill have devised, we have been able to crowd into a small space of time operations which in former years might have spread over a period of far longer duration. The American war lasted six years, and added £124,000,000 to the national debt. The actual hostilities of the late war have lasted two years, and will add about £42,000,000 to the national debt, funded and unfunded. We have, Sir, by the measures that have been adopted during the
334
war, avoided those drains upon the industry and trade of the country which have been so severely felt under the policy pursued by belligerents in previous wars. We have avoided incidental disputes, arising from the exercise of the obnoxious right of searching neutral ships. We prudently waived our extreme rights as a belligerent Power in maritime warfare at the commencement of the contest; and I trust that the Convention lately concluded at Paris will set the seal to that concession which was so wisely made, and which has been attended with most wholesome results during the late hostilities. Sir, the slight cloud which has arisen between this country and America, caused by the efforts that were made to obtain additions to our army within the territories of the United States, will, I trust, be speedily dissipated under the genial influences of peace. There is another point also which ought not to be left out of consideration with respect to the great expenditure for military and naval purposes during the late war. At the beginning of the war we found ourselves to a certain extent, unprepared for the contest. During the last two years we have devoted large sums to extending and improving our naval and military establishments. Our military arsenals are now much fuller, our stores are greater, our guns more perfect, our troops armed with much more efficient weapons than was the case at the commencement of the war. Our navy is likewise more numerous, better appointed, and more efficient for all the purposes of war; and, although the objects of a belligerent Power are not those which we now seek, it is to be remembered that we are in possession of a much greater amount of articles for naval and military purposes than we had at the commencement of the war. It must not, therefore, be supposed that all our expenditure has merely been for the accomplishment of temporary purposes, for a considerable portion of it remains in a permanent form.
I will now, Sir, proceed to state to the Committee the estimated expenditure and revenue of the year 1856–57. Although peace has been happily concluded and ratified, and although we are not now in a state of war, nevertheless the present year, for all practical purposes, must be looked upon, to a great extent, as a year of war expenditure. The preparations which have been made for a campaign, both by land and by sea, during the winter and early part of this year, were such, that had the war continued, we were in a con-

335
dition to carry on this year's campaign most effectively, both with our land and sea forces. That expenditure, I rejoice to say, has proved unnecessary; we have not been called on to enter on a third campaign; but, nevertheless, the expenditure was incurred—it will become payable during the present year, and we shall not reap the entire benefits of a return to a state of peace until another year. There will also be the expense of transporting our troops home from the Crimea; there will likewise be the expense of paying off the troops, and all the other expenditure connected with disbanding the army and navy, the whole of which will have to be defrayed during the present year. To these must be added the expense of the retransport of the Sardinian troops from the Crimea, which, though not necessarily a part of our war expenditure, is yet connected with it, and is an expense which we ourselves undertook, and will be effected by our ships. Notwithstanding all these sources of expenditure, which will continue, as I have stated, during the present year, I rejoice to say that it is in the power of Her Majesty's Government to present to Parliament a considerably reduced Estimate, both for naval and military purposes. The original Estimate for the Army, presented before Easter, was £34,998,000; the revised Estimate, presented a short time ago, was £20,747,000; making a difference of £14,251,000. The original Estimate for the Navy was £19,876,000; the revised Estimate was £16,568,000; showing a difference of £3,308,000. The total Estimates for the Army and Navy, as originally presented, were £54,874,000; the revised Estimates were £37,315,000; showing a total reduction of £17,559,000. Besides, Sir, the expenses connected with our attitude as belligerents, to be defrayed during the present year, to which I have already adverted, there is another, arising out of our Convention with Sardinia, to which I will now beg to draw the attention of the Committee. The first article of the Convention with Sardinia, which was concluded on the 26th of January, 1855, runs thus—
"Article 1. Her Majesty the Queen of the United Kingdom of Great Britain and Ireland undertakes to recommend to Her Parliament to enable Her to advance by way of loan to His Majesty the King of Sardinia the sum of £1,000,000 sterling; of which sum £500,000 sterling shall be paid by Her Majesty as soon as possible after the assent of Her Parliament shall have been given, and the remaining £500,000 at the expiration of six months after
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payment of the first sum; and Her Britannic Majesty engages further to recommend to Her Parliament to enable Her—if the war should not have been brought to a close at the expiration of twelve months after payment of the first instalment of the above-mentioned loan—to advance to His Majesty the King of Sardinia, in the same proportions, a like sum of £1,000,000. sterling."
The measure by which this Convention was carried into effect received the Royal Assent on the 26th of April, 1855. Some delay took place accidentally—which was not in any way attributable to the Sardinian Government—in the exchange of the ratifications of the treaty, which prevented Her Majesty's Government from bringing in the Bill to give effect to it earlier. The first payment was made on the 3rd of May, 1855, a few days after the Bill received the Royal Assent, and the second payment was made on the 3rd of November. An application was made for a third payment, in the shape of bills drawn at Turin on the Treasury, on the 23rd of October, and received here on the 25th of October, Her Majesty's Government being then under the impression that the war would continue, there being then no anticipation of a treaty of peace being signed. I desire to draw the attention of the House particularly to the dates. The treaty of Paris was signed on March 30, and the ratifications were exchanged on April 27. This Bill received the Royal Assent on April 26, 1855. The engagement entered into with Sardinia was, that if the war were not concluded at the expiration of twelve months after the payment of the first instalment, Her Majesty would advise Her Parliament to consent to advance a second sum of £1,000,000. The ratifications of the treaty of peace were exchanged exactly one year and one day after the Royal Assent was given to this Bill, and the first payment was made two or three days after. The application for the money was, in fact, made to the Government on the day before the anniversary of the exchange of ratifications of the treaty of peace, and the first payment was made two or three days after Under these circumstances, according to the literal construction of the treaty, the Government do not feel themselves justified in making an advance of another sum of £1,000,000 without laying the matter before Parliament. They feel, however, that practically the second year of the war had commenced, that the spirit of the treaty required that the additional £1,000,000 should be paid to Sardinia, and that, inasmuch as it is a ques-

337
tion of one or two days only, it would not be just nor creditable to refuse to pay the second sum. They trust, therefore, that upon a consideration of the circumstances, the Honse will authorise them to carry into effect the spirit of the treaty, and to advance the second sum of £1,000,000 for the payment of the expenses of the Sardinian army, which expenses have been considerably exceeded by the payments made out of the Sardinian Exchequer, and which, it appears to us, this country is called upon to discharge, after the gallant manner in which the Sardinian troops have distinguished themselves in the Crimea. I will now state the estimated expenditure for the year 1856–57. It is as follows—

Expenditure.

Gross.

Net.

£

£

Funded Debt, including New Loan

27,635,000

27,635,000

Unfunded Debt

1,025,000

1,025,000

Permanent charges on Consolidated Fund

1,750,000

1,750,000

Army

£20,747,000

Navy

16,568,000

Civil

6,800,000

44,115,000

44,115,000

Charges of collecting the Revenue

4,588,000

—

Vote of Credit

2,000,000

2,000,000

Loan to Sardinia

1,000,000

1,000,000

Total expenditure

82,113,000

77,525,000

My hon. Friend the Member for Lambeth (Mr. W. Williams) will see that I have included the charge for the collection of the revenue, which has never been done before. The loan to Sardinia I have taken at £1,000,000. The Committee will see, also, that inasmuch, as it is difficult, not to say impossible, to make an accurate estimate of the expenses which may be incurred in transporting our army from the East, and in defraying the various expenses which may arise in the change from a state of war to a state of peace, I have included a Vote of Credit for £2,000,000, which I shall propose to the House at a later period of the Session, as a measure of precaution merely, and not because I have any reason to think that I shall be called on to encroach upon the margin which I shall thus provide. The total estimate of expenditure for the year may be taken, with allowance for the margin to which I have alluded, at £77,525,000 net, or £82,113,000 gross.
Sir, I will now beg to offer to the Committee a statement of the estimated
338
revenue for the current year. I will not trouble them with the details of all the different branches of taxation, but will confine myself simply to those matters in respect of which there was an increase in the rates during and by reason of the war. To begin with the income tax. It will be continued for this and for another year, according to the provisions of the existing law. Until the 1st of April next it will continue to be levied at the rate of 1s. 4d. in the pound, or £6 13 s. 4d. per cent. The Committee will doubtless desire to hear the precise words of the Act of Parliament by which the income tax is imposed and regulated, I will therefore read them. They provide, that "the Act shall continue during the present war, and until the 6th day of April which shall first happen after the expiration of one year from the ratification of a definitive treaty of peace." Proceeding on the basis of calculation laid down by that Act, I propose to estimate the income tax for the next year at the gross amount of £16,355,000, and in round numbers at the net income of £16,000,000. I would now direct the attention of the Committee to the following statement of the prospective alterations of duty (as provided for by the tariff) on tea, coffee, sugar, and molasses, showing the respective rates on each of these articles, and the periods at which they will come into operation. These taxes, I should observe, stand on a different footing from the income tax, and are continued from the 30th of March last until the 5th of April in the year following, that is to say, for a year and a week after the date of the treaty of peace.

Reduced Rates.

Existing Rates to continue until April 5, 1857.

From April5, 1857, to April5, 1858.

After April5, 1858.

£

s.

d.

s.

d.

s.

d.

Tea per lb.

0

1

9

1

3

1

0

Coffee (raw) per lb.

0

0

4

0

3

0

3

Sugar, refined and candy, per cwt.

1

0

0

16

8

13

4

Sugar, refined and candy, per cwt. White clayed per lb.

0

17

6

14

7

11

8

Sugar, refined and candy, per cwt. Yellow muscavado and brown clayed per lb.

0

15

0

12

9

10

6

Sugar, refined and candy, per cwt. Brown muscavado and inferior qualities per lb.

0

13

9

11

8

9

6

Molasses per lb.

0

5

4

4

6

3

9

In alluding to these duties, and to their proposed continuance at their present amount during the current year, it may not be inappropriate to call attention to a statement which appears to me very satisfactory, not only in a fiscal point of view, but also in a moral point of view, so far as regards the habits of the population of this country. I hold in my hand a Return from the Office of the Inspector General of Imports and Exports, from which the Committee will learn that, notwithstanding many circumstances of depression, there has been a great increase of late years in the consumption of tea, coffee, and sugar. The account is as follows:—

An Account of the Quantities of Tea, Coffee, Sugar, and Molasses retained for Home Consumption in the United Kingdom, in the Years 1835, 1845, 1852, 1853, 1854, and 1855 respectively:—

Years.

Tea.

Coffee.

Sugar, refined and unrefined, jointly.

Molases.

lb.

lb.

cwt.

cwt.

1835

36,574,004

23,295,046

4,022,850

622,479

1845

44,193,433

34,293,190

4,856,680

627,532

1852

54,713,034

34,978,432

7,172,858

799,287

1853

58,834,087

36,983,122

7,487,589

844,034

1854

61,953,041

37,350,924

8,332,407

927,266

1855

63,429,286

35,764,564

7,547,157

920,940

Thus the Committee will observe that, notwithstanding the increase of duty during the last year in consequence of the war, and the concurrence of various causes which might not unnaturally have had the effect of diminishing the demand—such, for instance, as the high price of provisions and the occasional low rate of wages—there has been since 1835 such an increase in the consumption of tea, coffee, and sugar, as has materially benefited the Exchequer, at the same time that it indicates a gratifying progress in sober and temperate habits. The statement I consider most satisfactory as indicating the improved habits of the population.
I come now, Sir, to the Return relative to spirits, an article on which there was an increase of duty during the war. The spirit duties in England and Scotland are now 8s. per gallon; in Ireland they are 6s. 2d. Those duties were never in a sounder state than at the present moment, not only as regards the fiscal relations between the three kingdoms on the subject of draw-backs, but also with respect to
340
the question of malt distillation—a matter which formerly gave rise to great embarrassment in regulating this particular branch of revenue. Regard being had to the circumstances of the case, I have little hesitation in expecting that the Committee will concur with me in the opinion that we are justified in extracting from spirits as large an amount of revenue as the article can afford, provided always that we do not incur the evil of increasing illicit distillation. On this subject I am happy to be enabled to fortify myself with the authority of a writer who has devoted much attention to this subject, and who belongs to a school of finance of which I confess I am not a disciple. This latter consideration makes me all the more willing to avail myself of his opinion when I can concur in his views. The gentleman to whom I allude is no other than the well-known historian Sir Archibald Alison, who, having filled a judicial office in Glasgow, had abundant opportunities of observing the operation of the spirit duties. His words are these:—
"To assert that the increased consumption of spirits by the working classes is favourable to their morality is so strange a doctrine and so contrary to universal experience that it appears almost inconceivable it could have been hazarded in any intelligent assembly. Since the duties on spirits have been reduced a half, the consumption of them has been increased above 200 per cent, and the proportion consumed per head advanced in the same proportion—facts which go far to explain the contemporaneous duplication of crime during the same period. As to the cessation of demoralisation by illicit distillation and smuggling it is a real benefit; but it is dearly purchased by the wholesale demoralisation of so large a part of the working classes by the facility of obtaining ardent spirits. There is more crime, domestic unhappiness, family feuds, and social demoralisation produced in Glasgow by cheap whisky in one month than ever was by smuggling over all Scotland in ten years. There is no person practically versant with the details of both, as the author has been for twenty years, who will maintain a contrary opinion. There is no such fit object of taxation, in an indirect form, as ardent spirits, because the addition which the increased duty makes to the price of the article, when taken in moderation, is so small as to be trifling even to the humblest consumer, while the addition to the public revenue is immense, from the vast numbers who partake of the comfort. It is on the drunkards alone it falls as a serious burden."
Such are the opinions of a man who, having paid much attention to the subject, deliberately gives his suffrage in favour of a moderately high duty on spirits. I will now refer to a similar comparison to that which I instituted in respect to tea, sugar, and coffee, and it will be seen that when applied to spirits and beer it produces a different result. That result is not so favour-

341
able in a financial point of view; but I am sure that it will be heard with unmixed satisfaction by all who have at heart the improvement of the moral habits of the population.

Amount of the Quantities of British Spirits, Beer, and Malt retained for Home Consumption
in the United Kingdom, in the Years 1835, 1845, 1852, 1853, 1854, and 1855.

Years.

British Spirits.

Beer, calculated on the quantities of malt and sugar used by licensed brewers, and deducating the beer
exported.

Malt.

Gallons.

Barrels.

Bushels.

1835

25,710,208

16,330,010

42,892,054

1845

23,122,588

14,925,113

36,545,990

1852

25,200,879

16,756,285

41,071,636

1853

25,021,317

17,184,033

41,992,178

1854

25,883,584

16,136,893

36,812,727

1855

21,957,275

15,184,559

33,879,381

Now, lest the Committee should think that the diminution in the consumption of spirits is owing exclusively to the duty and not to the improved habits of the people, I would beg to direct their attention to the similar comparison with respect to beer. The consumption of beer, it will be seen, has remained very nearly stationary since the year 1835. There is another cause of an accidental nature which produced some effect on the produce of the spirit duties in the year which has just passed, and which may continue to operate in the present year, which diminishes the duty; but which is, nevertheless, an advantage to the spirit trade, and which increases also the demand for articles from which British spirits are made. I allude to the failure of the wine crop abroad for several years, and to the consequent diminution in the quantity of brandy produced on the continent. That diminution has led to a large increase in the export of British spirits to the Continent; and that export, of course, raises the price of spirits in our market, although it produces no benefit to the revenue, inasmuch as spirits exported to the Continent are, of course, either exported out of bond without duty or are entitled to a drawback. In 1853 the total quantity of spirits exported from the United Kingdom to foreign parts was 931,210 gallons; in 1854 that quantity had fallen to 749,959 gallons; and last year the quantity had in creased to no less than 4,268,697 gallons. That large quantity exported must have
342
produced a considerable effect on the home trade in spirits.
I now come, Sir, to the article of malt. The war duty on malt differs both from the income-tax and from the duty on colonial produce. It was continued during the present war and until the 5th day of July next after the ratification of a definitive treaty of peace, and no longer. That duty, therefore, will cease nearly at the earliest period at which it was possible that it should terminate, inasmuch as the ratifications of the treaty of peace were exchanged in the present quarter, and the July first ensuing falls at the end of this quarter. The war duty on malt is 4s. a bushel, and it will fall on the 1st of July next under the present law to 2s. 8¼d. a bushel. This, however, does not measure the entire loss which the revenue will suffer in consequence of the reduction; for it will be necessary, in accordance not only with former precedents but also with equity, to allow a drawback on all stocks in hand; and that drawback is estimated by the most experienced officers as likely to amount to a sum not very far short of £1,000,000. That repayment will have to be made during the present year; and we shall, therefore, lose not only the increased war duty on malt from the 1st of July next, but we shall also lose probably not much less than £1,000,000 in the repayment of duty upon stock in hand. With regard to the malt duty, it must be admitted that the falling off in the consumption appears to indicate that the pressure of the duty has to a considerable extent affected the consumption of the article. Some effect, no doubt, is to be attributed to the price of barley during the last year; but I think that the figures which I am about to read to the Committee will show that, perhaps, the diminution of duty which will take place, will not be inopportune with reference to the progress of the consumption. In 1835, the quantity of malt brought into charge in this country was 42,892,054 bushels; in 1845 that quantity had fallen to 36,545,990 bushels; in 1852, it was 41,071,636 bushels; in 1853, it was 41,992,178 bushels; in 1854, it was 36,812,727 bushels; and in 1855, it was 33,879,381 bushels. Now, although it is true that the duty on malt has an effect upon the consumption, it is right that I should point out that on the whole—taking the malt duty under the present distillery law, as nothing more than a beer duty in another form—the article of beer is lightly taxed at this time when

343
compared with the burdens which it has borne at comparatively recent periods. From the peace of 1815 up to the year 1829, there was a beer duty, as well as a malt duty and a hop duty. The average produce of those three duties for the years 1827, 1828, and 1829, was £7,192,474. The beer duty alone produced in 1827 £3,200,902; in 1828, £3,294,697; and in 1829, £2,989,561. That duty was repealed in 1829, and it has not since been reimposed. In 1831, 1832, and 1833, the average produce of the malt and hop duties, which were the only two duties which then fell upon beer, was £5,011,911, as compared with £7,192,474 in the three preceding years ended in 1829. During the last three years the average produce of the two duties of malt and hops has been £6,530,886 a year. Therefore, if we take the produce of the war malt duty and compare it with the average tax on beer in the years 1827, 1828, and 1829, it will be seen that in those three years the average duty was £7,192,474, whereas in the last three years it has only been £6,530,886. Including the war duty therefore on malt, beer has been in the last two years a more lightly-taxed article than it was in 1827, 1828, and 1829. There is another point of view in which the duties on beer and on spirits may be compared, which certainly favours the assumption that the duty on malt ought not to be considered as excessive. Unquestionably, if the duty on spirits can be considered reasonable, the duty on beer, as it will stand after the 1st of July next, must be regarded as altogether insignificant. The price of a barrel of beer may be taken at about 33 s. The quantity of malt used in making that beer—2⅓ bushels at 2s. 7d. and 5 per cent—will pay a duty of about 6s. 4d., and the hops—2 lbs. at 2d. and 5 per cent—pay about 4d. The duty, therefore, upon a barrel of beer, when the war duty on malt has ceased, may be taken at 6s. 8d., the proportion of the duty to the price being about 25 per cent. Now, the price of a gallon of plain spirits is about 10 s. 8d. The duty thereon is 8s.; so that the proportion of duty to price in the case of spirits is not less than 300 per cent. This comparison certainly shows that, as contrasted with spirits, beer is subjected to an extremely moderate tax.
I will now read to the Committee certain figures to which I have before referred, showing the gross and net amounts which I estimate to receive from the different branches of revenue—
344

Gross Estimate.

Net Estimate.

£

£

Customs

23,850,000

22,524,000

Excise

17,170,000

16,348,000

Stamps

7,185,000

7,000,000

Land and Assessed taxes

3,110,000

2,950,000

Property and Income tax

16,355,000

16,000,000

Post Office

2,810,000

1,070,000

Crown Lands

260,000

260,000

Miscellaneous

1,000,000

1,000,000

Total

£71,740,000

£67,152,000

Then, deducting the total estimated revenue from the total estimated expenditure—including the margin of £2,000,000, which I stated that I should request the Committee to assent to in order to guard against contingencies—the deficiency will be £10,373,000. From that sum must be deducted £1,500,000 which has been received in the present year as the produce of the loan of £5,000,000, which was effected a short time before Easter; and that makes the estimated deficiency £8,873,000; or, omitting the margin of £2,000,000, it leaves the real estimated deficiency at £6,873,000; or, adding the £2,000,000, which we propose as a Vote of Credit, the estimated deficiency will be, as I have just said, £8,873,000. Now, Sir, in this state of the public revenue and expenditure, Her Majesty's Government do not think that, in the present circumstances of the country, looking to the probability of the public income at an early period becoming adequate to meet all the demands upon it, and also having regard to the expectations naturally excited by a return from war to peace, as well as to the difficulty of imposing any new taxes, they would be justified in proposing at this time any additional taxation to this House. On the other hand, with the estimated deficiency in the expenditure of the year to which I have adverted, we do not feel it consistent with our duty to recommend any diminution in any source of revenue which the existing law supplies. We have, therefore, determined to propose no change in the present taxation of the country. Sir, if the common phrase, "a state of transition," is ever applicable, it is especially so in regard to the present year, when we are passing from a state of war to one of peace, and when the country is placed in circumstances of so peculiar, temporary, and exceptional a nature as to render any proposals calculated to effect the future in any permanent manner wholly impolitic, rash, and undesirable. Her Majesty's Government have, therefore, arrived at the decision to maintain the public taxation on its

345
existing basis; and have resolved to resort to borrowing to make up the deficiency. We propose, in the first instance, to have recourse to a loan of £5,000,000. The proposals for that loan were made public a short time since, and the offers were received this morning at the Treasury. The price tendered in the first instance was £108 Consols for £100 in Money. The reserve price fixed by the Government was somewhat less—being £107 10 s. 7d., or equal to Consols at 93. The terms fixed by the Government were accepted by the contractor, Baron Lionel de Rothschild, and the provisional agreement was signed by both parties this morning. The arrangement will be submitted to the Committee in the form of a Resolution, which I shall move before I conclude. Perhaps, I may be permitted to state a fact, which will be satisfactory, as showing the great resources and ample available capital of this country at the close of the arduous contest in which we have for two years been engaged; and it is further gratifying as showing the extensive monetary operations conducted by single individuals in this country, in whose honour great confidence is deservedly placed by a large portion of the community. Baron Lionel de Rothschild informed me this morning, that the deposits in his hands, sent by persons desirous of obtaining a share in this loan, amounted to a sum of not less than £4,000,000, the whole of which was transmitted to him either in Bank of England notes or in gold. The amount thus subscribed in actual money, being deposits of 10 per cent on the loan, represented a gross capital of the large sum of £40,000,000. This fact I state on the authority, and with the permission, of Baron de Rothschild. I may add my belief that the Committee, on an examination of the prices of stocks, will be of opinion that the loan agreed to this morning was effected on terms perfectly fair as between the parties concerned; that while, on the one hand, the price is as high as Her Majesty's Government had a right to expect, a reasonable rate of remuneration on the other is secured to those who come forward at such a moment to advance their capital to the public: I therefore trust that the Committee will allow that Her Majesty's Government exercised a sound discretion in negotiating a loan on the terms and in the manner which I have described.
But, Sir, this loan will not cover the entire estimated deficiency of the year. Omitting for the present the margin of £2,000,000 for contingent expenses, the
346
estimated deficiency for the year is £6,873,000; thus leaving, beyond the loan of £5,000,000, an estimated deficit of £1,873,000. This sum I reckon in round numbers at £2,000,000, and I propose, at a later period of the Session, to ask the House to agree to confer on the Government a power of borrowing, when the necessity shall arise, an amount equal to that in Exchequer bonds, with an alternative power of issuing Exchequer bills, should the state of the money-market render such an operation advisable, to the extent of £2,000,000. That sum, as the Committee will have collected from my statement, will cover the whole of the estimated deficiency of the present year. If the Committee should agree to a Vote of Credit of £2,000,000, to meet any accidental excess, I propose to take a similar power to cover that Vote also, a power which I trust there will be no difficulty in granting. I have stated that I propose probably to borrow that sum in Exchequer bonds. The present state of the Exchequer bill market may render it inexpedient to increase that portion of the unfunded debt. Many circumstances have occurred of late years calculated to diminish the quantity of Exchequer bills which can be made to float upon terms advantageous to the holders. The great increase in the amount of railway debentures has produced a security of a similar nature which comes into competition with Exchequer bills. The circumstance of money now being kept at interest on call by bankers has also diminished the demand for Exchequer bills. There is not, therefore, an active call at present for so large an amount of these securities at a fair premium as was formerly the case. At the same time, I believe that temporary causes have produced the fall in their value which has occurred during the last week or fortnight, and it would be rash to draw any decided inference from so brief an experience. With the permission of the Committee, I will refer to the precise quantity of Exchequer bills now in the market. That quantity was diminished by the funding before Easter. The amount of Exchequer bills, as I stated in the early part of the evening, outstanding this day (19th of May) is £20,124,000; but of that sum the Commissioners for the reduction of the National Debt hold £5,000,000. This £5,000,000 may be regarded as virtually in the hands of the Government, and is never likely to be brought into the market. The amount

347
of these bills in the hands of the public is therefore not greater than £15,124,000. There are many circumstances which render it probable that the depreciation in Exchequer bills, during the last ten days or a fortnight, is of a merely accidental nature, and that they will shortly resume the position which they occupied before the funding was announced.
Sir, at the end of the late contest, in which considerable additions have been made to our national debt, it is natural that we should revert in retrospect to the progress and fate of that debt in previous wars. Unfortunately, among the most marked characteristics of the national debt of this country has been its immoveability, the very slow efforts made to reduce it, when once it has been increased, the increase being allowed to remain, while little has been done in subsequent years towards its diminution either by the operation of a sinking fund or by the reduction of interest. However, we cannot but observe with satisfaction that our present position, as compared with the state of our debt at the end of the last war, is not a disadvantageous one. I will trouble the Committee, as the subject is of great importance, with a comparison of the state of our funded and unfunded debt at the close of the war in 1816 and at the present time. On the 5th of January, 1816, the capital of the funded debt of England was stated at £816,311,939; on the 5th of January, 1856, it was £766,778,599; showing a decrease of £49,533,340. That decrease has taken place notwithstanding the addition made to the debt last year. I come now to the unfunded debt; where the comparison is even more favourable. On the 5th of January, 1816, the unfunded debt was stated at £43,939,708; on the 5th of January last it was £26,614,200, showing a decrease in the capital of the unfunded debt of £17,325,508. The total diminution in both the funded and the unfunded debt, since the end of the last war, is £66,858,848. Let us now see what change has taken place in the charge of the debt. On the 5th of January, 1816, the charge of the funded debt was £30,458,204; on the 5th of January, 1856, it was £27,275,768, showing a diminution of £3,182,436. With regard to the unfunded debt, the charge on the 5th of January, 1816, was £2,325,964; on the 5th of January, 1856, it was no more than £993,769; showing a diminution of £1,332,195. The total diminution
348
in the charge of the funded and unfunded debt since the close of the last war is £4,514,631. In connexion with the question of the debt, it is right I should state to the Committee what are those accruing liabilities in the nature of debt which are to be anticipated in the immediately following years, and which will have to be met out of the revenue of the country. Next year, 1857, there will fall due Exchequer bonds to the amount of £2,000,000. In 1858 there will fall due Exchequer bonds to the same amount, and a sinking fund for war loans to the amount of £1,500,000, making a total of £3,500,000. The accruing liabilities will be the same in 1859; but in the following year—1860—the Exchequer bonds falling due will be £1,000,000, and the sinking fund £1,500,000, making the total amount £2,500,000. From 1861 to 1873 there will be an annual payment of £1,500,000 for the war sinking fund, and from 1874 to 1877 the payment will be £500,000 per annum. The statement which I have now made goes up to April last, and does not include any bonds which may be issued in the present financial year.
While such are our accruing liabilities, there is one topic of consolation which I am happy to be able to put before the Committee. In 1860 annuities will cease to the amount of £2,150,000, and in 1867 there will be a cessation of the dead weight of naval and military pensions to the extent of £585,740. Sir, the statement which I have made seems to me to exhibit the only manner in which the national debt can ever really and fairly be extinguished. It is a sanguine delusion to expect that any mysterious self-acting sinking fund can be formed by which the debt of a country can ever be diminished. Public debt, like private debt, can be extinguished only by the application of money. In the case of a nation, that money can be raised only by taxation. There is only one resource to which an honest Legislature can resort in our position—namely, to raise a surplus revenue by taxation, and annually to apply it to the extinction of the debt. All other contrivances of financiers—all pretended sinking funds, however ingeniously formed or concealed under specious phrases, will be found in practice delusive, and must end in disappointment. When we intrust to subordinate bodies the power of raising money upon the security of taxes, we impose an obligation of creating an annual sinking fund which is devoted to the extinction of a portion of the principal of the

349
debt. In every case where a county or a borough, a board of guardians, or any of the various municipal bodies with which England is covered, receives from Parliament the power of effecting a loan, it is always accompanied with a condition which requires that an annual sinking fund shall be set apart for the extinction of that loan. I believe there is not a single instance in which the power of borrowing thus conferred by Parliament upon any public body is not accompanied by a condition of that sort. Parliament recognises the wisdom and policy of that principle as applied to all public bodies except itself. Why, then, should Parliament be an exception to such an obligation? Unfortunately, it has hitherto been remiss in applying that mode of extinguishing debt to the largest of all debts—namely, the debt which the nation has itself incurred. The loan which will presently be submitted to the Committee has been effected in Consols, without any resort to terminable annuities. Perpetual annuities have been found by experience to be that form of borrowing which is at once most advantageous to the borrower and to the lender. It is convenient to the borrower because he never can be called upon for the principal of the loan; his creditor is a mortgagee who never can foreclose; while it is also convenient to the lender, because it is an advantage to him not to be compelled to receive his money before he wants it. At the same time he can go into the market whenever he chooses, and by selling his perpetual annuities realise his capital. The position of the public creditor reminds me of the description applied to the keeper of a celebrated club at a time when gambling in clubs was more common than happily it is now—
"Who, nursed in clubs, disdains a vulgar trade,
Exults to trust, and blushes to be paid."
Such, Sir, are the feelings of the public creditor. He wishes not to be compelled to receive the capital which he has advanced to the Government; and it is an advantage to the Government, on the other hand, not to be forced, before it can effect the operation upon favourable terms, to repay the sum so advanced. But it is an entire mistake to suppose that because a loan is raised on perpetual annuities that the debt must be permanent. The Government has the same facility of paying off the creditor who has advanced his money in perpetual annuities as it has in the case of the creditor who has advanced it on ter-
350
minable annuities. It is true that in effecting a loan in terminable annuities the Government compels itself to repay annually a portion of the principal; but in subjecting itself to that necessity, it makes worse terms on behalf of the public than it would do if the loan were effected in perpetual annuities.
Sir, there seems to be an impression in some quarters that at this period of transition from war to peace we ought to enter upon a revision of our whole system of taxation. It is said that the present moment affords a favourable opportunity for a complete review of our whole fiscal system, and that we are imperatively called upon to undertake it. Before we adopt that view, let us consider what great exertions have of late years been made in the revision of our taxation. In 1842, the late Sir Robert Peel subjected the whole of our tariff to a most careful and systematic review. In 1846, a large part of it again came under the consideration of Parliament, and in 1853 the whole of our Customs' duties underwent revision. By these successive revisions all prohibitive, protective, and excessive duties have been swept away from our tariff, and the only duties, as far as I know, which can now be pointed out as being of the nature of protective duties are those on foreign spirits and on hops. The Customs' duty on foreign spirits is, no doubt, higher than the duty upon British and Colonial spirits. The duty on foreign spirits is 15 s. per gallon, while on colonial spirits the duty is 8s. 2d., and on British spirits 8s. However high apparently may be the duty on foreign spirits, it has never been considered liable to serious objection on the ground of being a prohibitive duty. With regard to hops, it is true the Customs' duty is more than double the Excise duty, and in ordinary years amounts nearly to a prohibition upon the introduction of foreign hops. The entire revenue derived from stamps received very close attention when my right hon. Friend at the head of the Admiralty (Sir C. Wood) held the office of Chancellor of the Exchequer, and that branch of revenue is now, I consider, in a very satisfactory state. The whole subject of bills and receipts was dealt with in 1853 by the right hon. Gentleman the Member for the University of Oxford (Mr. Gladstone), and the Newspaper Stamp duty was repealed last Session. The window tax was repealed in 1851, at a loss to the Revenue of £1,170,000. The assessed taxes were

351
revised in 1853—rates were reduced and exemptions abolished, which resulted in remission of £290,000 a year. With regard to the land tax, the rates are irrevocably fixed, and there is therefore no option allowed to the Government. As to the income tax, we lately had a debate in this House, in which a plan was proposed for commuting it into a property tax—a plan which I trust will never receive the sanction of this House. With regard to the Excise, the whole revenue from that source has been, of late years, constantly under the consideration of Parliament. The duty on bricks was repealed in 1850, being a remission of £456,000. The duty on soap was repealed in 1853, being a remission of £1,126,000. In the same year, the hackney carriage and post-horse duties were reduced, and in 1855 a reduction was made in the stage-carriage duties. The Post Office has lost the character of a branch of revenue, inasmuch as the whole net revenue of the Post Office, after the expenses of the inland Post Office are defrayed, is only a little more than sufficient to cover the expense of foreign mails.

GREAT BRITAIN.

Year.

Public Debt.

Military and Naval Expenditure.

Miscellaneous Expenditure.

Total.

Population.

Rate per Head.

Rate per Head Exclusive of Public Debt.

£

£

£

£

£

s.

d.

£

s.

d.

1852–3

27,918,027

16,198,416

11,102,887

55,219,330

28,048,000

1

19

4

0

19

5

1853–4

27,790,262

16,487,769

11,566,500

55,844,531

28,245,000

1

19

6

0

19

10

1854–5

27,864,533

30,121,706

12,214,408

70,200,647

28,460,000

2

9

4

1

9

9

1855–6

28,112,824

51,661,187

13,270,735

93,044,746

28,628,000

3

5

0

2

5

4

Now, if we compare this expenditure with that of France, we shall, I think, be inclined to the conclusion that the expenditure

FRANCE.

Year.

Public Debt.

Military and Naval Expenditure.

Miscellaneous Expenditure.

Total.

Population.

Rate per Head.

Rate per Head Exclusive of Public Debt.

£

£

£

£

£

s.

d.

£

s.

d.

1852

15,954,983

16,460,289

24,954,791

57,370,063

35,781,628

1

12

0

1

3

1

1853

14,975,380

16,721,704

25,783,723

57,480,807

1

12

1

1

3

10

1854

16,710,005

30,920,654

27,376,923

75,007,582

2

1

11

1

12

7

1855

16,734,818

17,620,000

24,991,354

67,346,172

1

17

7

1

8

3

8,000,000

It seems to me, therefore, Sir, that the great obstacle to the improvement of our system of taxation is owing not to any want of care on the part of Parliament, nor to any want of frequent revisions and suggestions elaborately carried out by successive Governments, but to the necessity under which we are unfortunately placed of raising a large revenue to meet the expenditure of the country. As long as that necessity exists, I fear it will be impossible for us to avoid imposing some taxes and maintaining others at certain rates, which we should be willing, if we had the option, to alter. At the present moment, after the large expenses of the last few years, it may be interesting to the Committee to hear how the public expenditure of this country stands in relation to that of other countries. With regard to the proportion which the debt bears to other branches of expenditure, and the similar expenditure in some foreign countries, I have prepared a table which, I think, places the matter in the clearest light:—
of England, if we exclude the debt, is not unreasonably large:—
I will only trouble the Committee with one other comparison—namely, that of Prussia. I take that to be an economical Government,

PRUSSIA.

Year.

Public Debt.

Military and Naval Expenditure.

Miscellaneous Expenditure.

Total.

Population.

Rate per Head.

Rate per Head Exclusive of Public Debt.

£

£

£

£

£

s.

d.

£

s.

d.

1855

1,792,965

4,333,634

10,569,637

16,696,236

17,286,434

0

19

3

0

17

3

Those comparisons will, I think, Sir, make the Committee incline to the conclusion that, if we leave out of our consideration the great annual charge occasioned by the public debt of this country, the portion of public expenditure within the control of Parliament is reduced within reasonable and moderate limits. There is no doubt that the large amount of revenue which it is necessary to raise in order to meet that great expenditure compels us not unfrequently to maintain duties at higher rates than it otherwise would be desirable to do. For example, the duty on tobacco is maintained at a rate which is exorbitant when compared with the price of the article. It is the constant cause of smuggling, and consequently necessitates the maintenance of a large coastguard to protect that branch of revenue. There is another article upon which it would be desirable, upon international grounds, if the exigencies of the revenue would permit, to make some diminution. I refer to the duties on foreign wines. For the purpose of increasing our commercial relations with France and other States of the Continent, it would be undoubtedly advantageous if, consistently with the demands of the revenue, it were in our power to reduce the duties on wine; but, looking to the great amount of our revenue which is derived from beer and spirits, and remembering that if the duty on wine, which is already a moderate duty, were still further reduced, it would interfere with the consumption of other fermented liquors, I think the revenue would suffer more than the demands of the public service would permit. There is another duty which is no doubt inconveniently high, but which, in the present state of the revenue, I do not see how to alter. I mean the duty on fire insurances. That duty produces a revenue of about
in which the expenditure is kept within the smallest limits:—
£1,300,000 or £1,400,000. It has been in existence since 1782. It has stood at its present rate since the peace, and although it is open to many objections—although it represses the prudential motives of insurers, and although it is a duty which, upon many accounts, it would be desirable to reduce, I do not see how, in the present state of the revenue, it would be possible for Her Majesty's Government to propose it as a subject for reduction.
Sir, I have now laid before the Committee a statement of the estimated revenue and expenditure for the ensuing year, and I have added such remarks as it appeared to be my duty to submit for the information of Parliament. It has been my object to give full information upon all matters which it is material Parliament should know in the present state of public affairs. All reserve and all concealment would be misplaced on occasions of this sort. The time has long gone by when the public are not to be trusted with a knowledge of their own affairs, and it is of the utmost importance that the financial state of this country, resting as it does on a perfectly secure basis—founded upon the increasing trade of the country and the untiring energy and industry of the people—should be known not only to the population of England, but throughout the whole world. I have made this statement, relying upon the fairness of the Committee in forming an opinion upon the plan which I have submitted to it—a plan which does not involve any departure from existing principles of our financial system, and which is intended merely to supply the deficiencies of the year by the resources which I have laid before the Committee. In preparing this plan Her Majesty's Government have been most anxious to arrange such a system as would be suited to

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the exigencies of affairs, and I rely with confidence on receiving the support of the House when it has examined in all its details the plan which I have now had the honour of submitting to it. The right hon. Gentleman concluded by moving the following Resolutions:—
1. Resolved—
"That, towards raising the Supply granted to Her Majesty, the sum of five million pounds be raised by Annuities."
2. Resolved—
"That every contributor to the said sum of five million pounds shall, for every £100 contributed and paid, be entitled to the principal sum of £107 10 s. 7d. in Annuities after the rate of £3 per centum, to commence from the 5th day of January, 1856, and to be added to and made one joint stock with the existing Consolidated £3 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 £3 per Centum Annuities."
3. Resolved—
"That the said 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."
4.Resolved—
"That every contributor shall, on the 22nd day of May, 1856, make a deposit of £10 per centum on such sum as he or she shall choose to subscribe towards raising the said sum of five 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 £20 per centum on or before the 12th day of June 1856.
Payment of £20 per centum on or before the 28th day of June 1856.
Payment of £20 per centum on or before the 24th day of July 1856.
Payment of £10 per centum on or before the 28th day of Aug. 1856.
Payment of £20 per centum on or before the 18th day of Sept. 1856."
5. Resloved—
"That all the monies 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 have been or shall be voted by this House, or to such services as are now charged on the Consolidated Fund of the United Kingdom of Great Britain and Ireland, or shall be charged thereon by any Act that may be passed hereafter."
MR. ALCOCKsaid, he regretted that the right hon. Gentleman should not have grappled with the impending difficulty with regard to fire insurances. It would have been far better to have made a virtue of necessity, and to have reduced the duty to
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1s. It was most unfortunate that the tax should be retained at this moment, when they were so anxious to increase their intercourse with their gallant Ally and near neighbour, France. But the tax, under any circumstances, would be an improper one, and was in direct contravention to the principles of free trade. It was a tax upon prudence, and it favoured the rich company and even the rich individual. He knew cases in which persons of no great capital—persons of £5,000 or £10,000 a year, or even less, insured their own property themselves. For instance, one of those capitalists would put by £20 as an insurance upon one of his farms; and so on with the rest of his property. But if he sold that farm, a poorer man would not be able to obtain the same security against risk without paying £60 a year to some company—£20 for the insurance and £40 as duty. The right hon. Gentleman the Chancellor of the Exchequer had stated that if he reduced the duty to 1s. the revenue would lose £500,000 or £600,000. Undoubtedly it would the first year. But they should remember that while seven-eights of the property in France was insured, only one-third of the property in England was thus secured. If, then, the present duty was diminished, there could be no doubt that the loss would soon be made up. With regard to the income tax, he was one of those who never wished to see it repealed. By the present tax of 1s. 4d. they obtained £16,000,000, or £1,000,000 for every 1d. He should like to see it increased to 10 per cent, so as to raise £24,000,000. In that Case they would be able to dispense with the malt tax, and so put an end to adulterated beer, that fertile cause of drunkenness and crime. He believed that the principle of the income tax was acceptable to the great body of the people, for their idea of taxation was that they who had the most should pay the most. That was his opinion too; but the present mode of raising the tax was in some respects most unfair and unjust. He knew a case in which a poor hard-working clerk had to pay the tax on his income of £100 a year, while in the next house there lived three maiden sisters who had between them £10,000, short only of a small sum which reduced the income of each a little below the £100. Those ladies did not pay a 1d. During the late war—from 1806 to 1816—all incomes down to £50 a year paid the tax; but then all property in land or in the funds

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paid. At present not less than £76,000,000, or one-tenth of the public debt, paid no income tax at all. That surely proved that the present mode of assessing the impost was both imperfect and unjust.
MR. HADFIELDsaid, that when the right hon. Gentleman the Chancellor of the Exchequer brought on his Bill in Committee for imposing a duty upon fire insurances effected in foreign offices, he (Mr. Hadfield) should move to reduce the duty generally from 3s. to 1s. per Cent and that he intended to take the sense of the committee on the question. He hoped the Chancellor of the Exchequer Would be induced to yield this point, considering the inequalities of the tax, and the admission the right hon. Gentleman had made, that it operated as a tax upon prudence. He believed the reduction he proposed would produce but very little loss to the revenue, even in the first instance, and in the end result in a positive gain.
MR. W. WILLIAMSsaid, as the financial statement they had just heard might be considered as the winding-up of the war, in reference to the expenditure for which the House had extended its confidence to the Government generally, and as they had no means of ascertaining what amount was necessary for such winding-up, they had not, as it appeared to him, any alternative but to continue the same confidence, and trust that the Government would bring the expenditure to a conclusion with all possible economy. He did not find fault with the Resolution the Chancellor of the Exchequer had placed in the hands of the Chairman in regard to the proposed loan, but he had expressed a decided opinion when the two previous loans and the propositions for funding Exchequer bills were under discussion, that it would have been more consistent with prudence and economy if those additions to the national debt had been made in the new stocks, introduced by the right hon. Gentleman the Member for the University of Oxford (Mr. Gladstone) when he was Chancellor of the Exchequer, than in the Three per Cent Consols. He admitted that £5,000,000 was too small a sum to deal with in that way, but if the whole £36,000,000 had been raised in the new stocks it would, he thought, have been an advantage. He wished to know when Estimates for the Army and the Navy, stating the items in which reductions were to be made, would be laid before the House, so that they might see what, if any, increase was pro-
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posed in the annual expenditure on account of the military establishments as compared with what it was previous to the war.
MR. E. BALLsaid, he hoped that the right hon. Gentleman the Chancellor of the Exchequer would consider the propriety of remitting the additional 5 per cent on the malt duty. A stronger proof of the folly of placing a higher duty on malt could scarcely be adduced than the statement the right hon. Gentleman had himself much that evening, that the enhanced duty had been attended with a falling off in the receipts. He believed if the duty were reduced to 16 s. a quarter the gross receipt from the malt duty would be quite equal to what it was now, while the Chancellor of the Exchequer would accomplish two great objects—namely, giving satisfaction to a large and important interest, and promoting the consumption of a beverage truly English in its character, and which cheered and invigorated without intoxicating.
MR. VANCEsaid, that on the part of the Irish distillers he must complain of the increase of the duty on Irish spirits, which had given an impetus to illicit distillation, to the prejudice of the fair trade. The amount of Irish spirits brought into account as paying duty had fallen since the increase of the duty from 8,440,000 gallons to 6,228,000 gallons. It was true the same amount of revenue had been paid by the smaller as the larger quantity, but it had operated very injuriously on the moral condition of those districts where the illicit distillation was carried on. If the high duty were persisted in, the right hon. Gentleman would find that the quantity of Irish spirits brought under charge next year would be still further reduced. He had a remonstrance upon the subject from the Irish distillers, of which the right hon. Gentleman the Chancellor of the Exchequer would probably hear more.
MR. MILNER GIBSONsaid, he felt with the hon. Member for Lambeth (Mr. Williams) that it was not the time, when they were in a transition state from war to peace, to discuss the peculiarities of each special tax; but he (Mr. M. Gibson) must confess that there was one part of the Chancellor of the Exchequer's speech which he did not altogether like; it was that in which he seemed to discredit the idea of revising our financial system, not exactly by a reference to the present state of affairs, but inferentially, by looking back

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at the past. The right hon. Gentleman said, "You have already gone through your Customs duties, you have revised your Excise laws, and you have re-arranged your stamp duties—all these things have you done:" and he left them to infer that they had now arrived at the most perfect mode of raising the public revenue, that everything worked well, and that the country must consequently submit to the existing system of taxation. Now, he (Mr. M. Gibson) must demur to that. When he asked for the repeal of any tax, it had never been with the idea that the money could be spared. He believed they were all unanimous in the opinion that the public credit must be supported; but, notwithstanding, he held there was ground for calling for the repeal of a tax when it could be shown that such tax was an improper mode of raising the money, and was more injurious to trade and industry than it was beneficial to the revenue. Then it became a matter of fiscal policy for the Government to consider whether they were not bound to abolish the tax in question, and make up the amount by some other means. He did not consider that we had arrived at perfection in our fiscal system, and therefore we must continue to be in a progressive state for years to come. With regard to the fire insurance duty, it ought not to be reduced merely, but altogether abolished. And he was glad to hear that the noble Lord the Member for King's Lynn (Lord Stanley) had, in a very able speech made to his constituents recently, stated that that was one of the duties he thought ought to be repealed. In expressing objections to particular taxes, they were protesting against their being considered as permanent items of revenue, and he thought his hon. Friend (Mr. Alcock) was perfectly right in keeping the fire insurance tax continually under the attention of the Government and the House. He should not do justice to his own opinions if he allowed the opportunity to pass without mentioning another objectionable duty, which he had repeatedly brought under the notice of the House—he alluded to the duty on paper. He believed that nearly every Member of that House who had been a Chancellor of the Exchequer, but who did not happen to be Chancellor of the Exchequer at the time, had supported him. The right hon. Gentleman opposite (Mr. Disraeli) had, he thought, voted with him on one occasion—and the right hon. Gentleman the Member for the
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University of Oxford (Mr. Gladstone) had gone to Manchester, being at the time Chancellor of the Exchequer, to make an attack on this paper duty, and, in point of fact, to make his (Mr. M. Gibson's) constituents more earnest with him to insist upon the repeal, than they would otherwise have been. If, after that, he were to go to Manchester and talk to his constituents about the days for revision of tariffs having come to an end, he should like to know how such doctrines would be received there? He regarded the paper duty as a disgrace to the financial system of this country, and, unless that tax was repealed, it was impossible to attain those results which they had in view when they repealed the newspaper stamp duty and the duty upon advertisements. He was for taking the exciseman's hand from the press altogether. He wished to see a free and un-taxed press, and that they could not have so long as the duty upon paper was maintained. It had been said the repeal of the newspaper stamp had proved a failure, but he would take leave to say that that was a great mistake. He knew of his own knowledge that there were at least a hundred penny and threehalfpenny papers in circulation in the kingdom, which were not in a dying state. They were frequently told that penny newspapers had departed this life, but the great difficulty with which the conductors of such publications had to contend with was the duty on paper. He knew, for instance, one small publication—a penny newspaper—which paid the Government £3,000 a year as a tax upon paper. What a tremendous obstacle that was in the way of cheap literature! This £3,000 a year deducted from the funds of a penny publication must deprive the managers of the opportunity of producing good as well as cheap literature. He contended that the maintenance of the duty on paper was utterly inconsistent with the desire which had been frequently expressed in Parliament for the diffusion of knowledge in a cheap form among all classes of the people. He therefore gave notice to the Government that, whether there was a deficiency or a surplus of revenue, he should feel it his duty, on a fitting occasion, again to ask that House to repeal the duty on paper. He would urge that proposition mainly upon moral and educational grounds, although he could also make out a very strong case upon commercial and industrial grounds. He wished, before sitting down, to make one

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further remark. A reduction of expenditure was an essential preliminary to an extensive revision of our financial system, and he hoped the expenditure for the defences of the country would he reduced to the amount at which it stood before the war commenced, if, indeed, it could not be reduced below that amount. Increased expenditure had been required on particular emergencies, but the practice had been to reduce such expenditure as soon as the necessity for it passed away, and he hoped that no larger expenditure would be incurred for the defences of the country than was required to maintain a proper and effective peace establishment. He could not lend any countenance to the doctrine that, before the commencement of the late war, the country was helpless and defenceless in consequence of the Government not having been supplied with sufficient funds; for that House had always supplied the Government with any funds they required for the defences of the realm. If the state of our armaments afforded any cause for just complaint, it must have been owing to the mismanagement and misapplication of the funds which Parliament had placed at the disposal of the Government. He consequently hoped, at no distant period, to have the opportunity of supporting large reductions in the public expenditure, and he trusted that the trade and industry of the country would be relieved from some of those oppressive excise duties which had so pernicious an effect upon the moral and material interests of the great body of the labouring classes.
MR. INGRAMsaid, in addressing the House for the first time, he desired to offer his thanks to the right hon. Gentleman the Member for Manchester for giving notice of his intention to submit a Motion upon the subject of the paper duty. He (Mr. Ingram) was then prepared, if necessary, to go into that question, but he thought it would be much better to defer the consideration of it to some more seasonable time. The right hon. Gentleman could not say too much as to the injurious effects of that duty. It was the most obnoxious tax which existed. He should not now enter into the question, but when the proper time arrived he would he fully prepared to prove his statements, and he doubted not but that he could satisfy the House that the tax on paper ought to be abolished.
MR. DISRAELI: Sir, the right hon. Gentleman the Chancellor of the Exchequer having stated that he has been in
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communication with an eminent capitalist in this country, I am sure it must be gratifying to this House and to the country to receive from the highest authority upon financial topics an assurance that the resources of the Empire are not diminished by the great struggle in which it has recently been engaged, and that, whatever emergency or exigency may arise, we may always appeal to them with full confidence that they will suffice to defend the interests and vindicate the honour of the country. Sir, I do not wish, at the present moment, to touch upon those points connected with particular taxes to which the Chancellor of the Exchequer has referred. Opportunities will, no doubt, be afforded on some other occasion for expressing our opinions, if it should appear necessary, upon such questions; but it does not seem to me that there is, at the present moment, any very immediate prospect of a Chancellor of the Exchequer introducing into this House a proposition for the reduction of any existing tax. I will therefore leave the Chancellor of the Exchequer to settle with his habitual supporters of Liberal opinions those doctrines of financial finality which he has promulgated with so much authority, and which will no doubt be regarded with great attention by the country. I will, however, take this opportunity of expressing my opinion upon one point which I deem of great importance. I hope, Sir, when the excitement of the war which has just terminated has passed away, the Government will give their best attention to measures of wise, but at the same time, rigid economy. That is expected by the country, and I am convinced that that is the only spirit in which we can confirm the principles of finance upon which our system is now generally established, and that will enable us to prepare those resources for the future which, whenever an emergency arises, will enable us to show the same power we have recently displayed. I will also take this opportunity of stating my belief that it would be most unwise on the part of the country to allow itself to be misled by what I cannot but regard as most superficial and ill-founded opinions, and to suppose that it can guard itself against the recurrence of many—I will admit, mortifying—incidents which occurred at the commencement of the war, by habitually supporting a much larger military establishment than is necessary for the ordinary interests of the

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country. I feel persuaded that if we suppose that we can protect ourselves from the repetition of events which we all regret, and which occurred at the commencement of the late war, by maintaining a larger army, and supporting in every department of our military system more extensive establishments, we shall probably have the mortification of finding, when a crisis arrives and a struggle is again to be entered upon, a repetition of the same mischances and disappointments which prevailed before, with the consciousness that in the interval we had expended those resources which, having been accumulated by the wise system of economy that has generally prevailed of late years, have enabled us to meet our difficulties with so much comparative ease, and have also enabled the Minister of Finance, this evening, to make a Report of our financial position, which cannot fail to be most satisfactory to the country. Sir, I not only hope, but expect, that we may profit by what has passed, and that we may learn, from recent circumstances, what are the weak points of our system, and take care to be better prepared in those particulars when a future danger shall arise than we were on the last occasion. I hope that we shall not only insist upon the Government following a course which shall secure such an end, but that we shall take this opportunity of impressing upon the country that there is a great difference between an effective and an expensive army; that we may have a military system which is perfect, and which, at the same time, is founded on a wise economy; that the military establishment which we sanction should be a model, rather than a force adequate to any great occasion which may hereafter arise. These, Sir, are the true principles, and if we can vindicate them we shall have profited by our late experience, and we shall be following a course which will maintain the strength and honour of this country without endangering those elements of real power which are derived from the labour and industry of the people. In looking over the proposed reductions of the original Estimates prepared by the Government, I saw, with some distrust, the large reduction proposed in the original Estimate for the militia. That, certainly, is a branch of our defences which I hope this House will never permit to fall again into a state of inefficiency. The constitution of that national force should be maintained
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largely and liberally. I limit myself to the constitution, because I cannot suppose that we should keep on foot a large force of embodied militia, as at present; but if the constitution of that force is largely and liberally maintained, we may appeal to it, when occasion requires, as a source of strength which will place this country in that position which it is entitled to occupy in any great European question which may arise. I consider that the Committee ought to impress upon the Government that it expects they will take advantage of the recess which is approaching to effect great reductions in the expenditure of the country, not with the intention of obtaining a temporary popularity, for I know well that reductions effected in that spirit are generally pernicious, but effected on a distinct principle—on a principle consistent with the maintenance of the power of this country, and of the position which it ought to occupy in the politics of the world. I should hardly have ventured to trouble the Committee on this occasion were it not for one point on which I think we have a right to expect some explanation from the Government. I allude to the Convention with Sardinia, to which the right hon. Gentleman (the Chancellor of the Exchequer) particularly referred. I collected from his observations that the impression of the Government—I may say their conviction—was, that, according to the letter of that treaty, we were not hound to furnish a second sum of £1,000,000 to Sardinia. Upon a question of such great importance, involving not only the interpretation of a treaty, but also considerations of high policy, I would not presume to give a hasty opinion, nor do I think that the Government would expect the Committee at once to give an opinion which may commit it upon the subject; but I am quite sure that I do not misrepresent the feelings of the House of Commons when I say, that to all treaties it is always prepared to give a large and liberal construction. But when we are asked to exercise towards Sardinia, under these circumstances, a liberality which, from what I can gather, the Government is not prepared to recommend that we should exercise towards our own troops; when, acting in the spirit and not in the letter of the treaty, we are asked to advance to Sardinia a considerable sum of money, we have a right to ask, in our turn, that the Government should put fairly, clearly, and frankly before us some view

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of the relations which subsist between this country and the King of Sardinia. I confess myself that nothing that I recollect ever appeared to me so perplexing and so perilous as the position which this country has assumed and the relations which it is now forming in regard to that very kingdom. If I look to the protocols of the Conferences of Paris which have been laid on the table, I find expressions of sympathy with suffering Italy which greatly exceed the usual caution of diplomatic language. I find that the Sovereign of Sardinia is encouraged apparently in every way by the English Government to fulfil the high mission to which his subjects believe him to be called, and, moreover which they expect him to accomplish. He is preparing, and he is encouraged to effect, what he deems to be the liberation of Italy. We have authoritative evidence of the feelings of the Sardinian Government, and of the policy of the Sardinian Ministers in the very important documents which have been promulgated, and certainly, if we were to judge from the protocols of Paris and from the documents of the Sardinian Ministers, we should come to the conclusion that there was a perfect understanding between the English Ministry and the Sardinian Government, and that, in fact, not only was the liberation of Italy an adopted policy, but that the means of effecting it had been agreed upon, and that England was to occupy a great position in the accomplishment of that object. But how are we to reconcile such language and such diplomatic documents with the publication of that tripartite treaty which, if not secret, was at least unexpected, which apparently not only fashions but consolidates a policy opposed and adverse to that which Sardinia has adopted, which she is encouraged to prosecute, and which, according to the documents of her eminent Minister, she is at this very moment actively prosecuting? The language of the Sardinian Minister is that the presence and the rule of Austria in Italy are felt to be insufferable—I give no opinion of my own upon these points on the present occasion; that the occupation of Italian provinces by Austria is the principal and the prime source of the degradation, the misgovernment, and the misery of Italy; that these are evils which it is the mission and policy of Sardinia to terminate; and that Sardinia looks, and has reason to look, for the co-operation and support of England in her efforts to
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this end. Well, Sir, if this be the case, how can we explain that subterranean policy which at the same time signs the protocols of the Congress of Paris, claps the King of Sardinia on the back, and signs a treaty which, we now understand, appeared unexpectedly, and which, if it has any point at all, has this point—that the government of Europe is to be carried on for the future by France, Austria, and England, and that the security and the tranquillity of the world depend upon this tripartite alliance? Sir, I am not going to say one word against that tripartite alliance—I am not going to say that the alliance of France, Austria, and England may not be a wise policy. I know that it has been sanctioned and adopted, on some of the greatest occasions of history, by men second to no living statesmen. I know well that Lord Castlereagh, Prince Metternich, and M. de Talleyrand devised and, I believe, accomplished such an alliance at a moment of great difficulty at the Congress of Vienna. I am not now saying anything against that policy, but at a future time it must form a subject of discussion in this House. The present state of affairs and the foreign policy which this country is now pursuing are not only legitimate subjects of discussion, in this House, but I think we should not be doing our duty to our constituents if we went back to them without having fully and completely discussed them. I do not wish to enter into these questions to-night, but when I am asked to sanction a treaty which demands from the people a large portion of their treasure to be contributed to a foreign Power, I have a right to ask for some explanation of the mysterious circumstances which apparently at this moment affect, and I think perplex, our relations with that Power. I give no opinion as to be foreign policy which it may be wise for this country to pursue. An alliance with France and Austria for that object may be wise and politic, but this I may say, that it is neither wise nor politic to enter into an alliance of that kind which, if it means anything, means a guarantee of the Austrian Empire, and of course of her Italian dominions—no mean portion of her empire—and, at the same time, to enter into relations with the King of Sardinia which stimulate him to a policy utterly opposed to the Austrian and Imperial policy, utterly opposed to the retention of those Italian provinces by Austria, and utterly inconsistent with the solemn policy which has produced

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the tripartite treaty. For the interest of the country and for the sake of our national reputation, it is in the highest degree desirable that there should be a satisfactory explanation by Her Majesty's Government of the strange inconsistency between the protocols of Paris and this tripartite treaty. I want to have some explanation how it is that England should at one and the same time engage to rescue Italy from the grasp of Austrian dominion, and conclude a treaty which in effect guarantees the integrity of the Austrian Empire, and declares that the destinies of Europe shall henceforward be governed by England, France, and Austria? Sir, I want to prevent a repetition on the part of the British Government of the scenes that were enacted in 1848. I have never met with any gentleman of any nation who, whatever his political opinions might be—whether he was a Conservative or a Liberal in England, or an aristocrat or democrat in some other country—whether he was a devoted advocate of monarchical despotism, or a frantic follower of Red Republicanism—did not concur in the opinion that our conduct in 1848 was not only most disgraceful to ourselves, but most injurious to Italy. If, for the sake of exciting the unreflecting applause of a mob, and in order to obtain for the existing Government the reputation of being devoted to those vague entities called "Liberal opinions," we are again to be in the position of stimulating Italian liberalism, while at the same time we rivet the fetters of Austrian despotism, I foresee for this nation consequences most fatal to her just and legitimate influence, and to that high character which, notwithstanding the mistakes we sometimes commit, and despite our party conflicts, it is our happiness to think that our country has hitherto maintained. There will, no doubt, be ample opportunity to discuss this question in all its bearings when the Chancellor of the Exchequer shall hereafter ask us for a Vote; but it appeared to me impossible that the observations of the right hon. Gentleman on the subject of the treaty with Sardinia should in the meantime be allowed to pass wholly without notice. I again say that I do sincerely hope that, profiting by the bitter experience of 1848, and by the recollection of Lord Minto's mission, and of those scenes of popular tumult which, excited by English influence, and deserted by English power—a desertion remembered to this
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day on the Continent with anguish and indignation—I say, Sir, that I do devoutly hope that, bearing all these things in mind, the House of Commons will refuse to be made the cat's-paw of any Government for the sanctioning of that pseudo-liberalism which, while it affects sympathy with oppressed lands, strengthens the hands of their oppressors, and aggravates the weight of that despotic power. Should the House unhappily neglect this lesson, they will pursue a policy better calculated than any that I can imagine to impair their own authority and to bring dishonour on the reputation of England. I trust, Sir, therefore, that we shall be most scrupulous in exacting from the Government a precise, frank, and definite account of the relations between this country and Sardinia, that we may understand whether we have played our cards so badly at the late game of diplomacy that we are at the same time pledged to support Austrian authority and Italian regeneration. This is a question which is recurring to many minds in this country. It has touched the heart of England, and be assured it is watched with anxious attention throughout the whole of Europe. I feel a deep interest in the future of Italy, and sure I am that there is no honest man in this empire who does not look forward with delight to the day when that immemorial land to which we all owe so much shall take her proper place among the nations, and be again one of the leading communities of the world. But I, for one, base my hope of that consummation on my faith in the genius of the people and the resources of the country. Time, the great reformer, will save Italy; but if there can be anything that will throw her back in her career—anything that will baffle her advancing destinies—it will be the intrigues of politicians who are not Italians, and who, for the sake of getting a support which otherwise they might not command, trifle with the fate of a great people, pander to the lusts of secret societies, pretend to sympathy they do not feel, and, for the love of popular applause and a momentary success, compromise the destiny of a gifted nation.
VISCOUNT PALMERSTON: We have heard, Sir, a great deal of that eloquence which the right hon. Gentleman the Member for Buckinghamshire is so capable of summoning at any moment to his command—eloquence expressing a world of virtuous

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indignation, which would be well deserving of the attention and consideration of the House, were it not that, unfortunately, it is wanting in one essential,—that of having the slightest foundation in fact. The right hon. Gentleman has talked of "mysteries" where none whatever exist, and attached to very simple treaties meanings which any man who takes the trouble of reading them only once in his whole life will perceive at a glance are utterly inapplicable to them. The right hon. Gentleman has chosen to go back to the year 1848, making assertions with respect to the conduct of the Government at that period which I hesitate not to say are not only totally unfounded, but wholly devoid of even the semblance of truth, and which imply charges which are totally untrue. As regards our relations with Sardinia, and those allusions to them in the protocols of Paris which the right hon. Gentleman desires to have explained, all I have to say is that there is no mystery in them. They are known to everybody, and are manifest on the face of the protocols, as well as on that of the treaty we have concluded with Sardinia. They are the relations of perfect confidence, of cordial friendship, and of intimate alliance; but, as to our having engaged with Sardinia in any secret project for revolutionizing Italy and overthrowing the Governments which exist in other parts of that country, there is not the slightest ground for such a supposition, nor the shadow of a pretext to justify such a charge, or draw such an implication. It is not to be denied that the Government of Sardinia has a mission to fulfil, a destiny to accomplish—the great mission, the high destiny of holding out to all the other States of Italy a bright example of liberal institutions and constitutional government; and most sincerely do I hope that she will succeed in that noble enterprise, and that the day is not distant when all the Italian nations will give proof of their capacity to govern themselves in a manner to insure the maintenance of order and liberty, and to command the approval of Europe. Such as I have described them, Sir, are our relations with Sardinia, and there is nothing in the protocols that implies anything different from what I have stated. Nothing has passed between Sardinia and England which is not known to the world, and which does not do honour to both countries. No doubt, when a territory like Sardinia nobly joins an alliance such as that subsisting between France and England, and gal-
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lantly launches into a war to which those Allies are committed, there are considerations of honour and friendship which make it understood that, if Sardinia should ever be menaced by an unfriendly Power, she will have a fair claim on England and France to protect her from insult and injury. But, Sir, it is far, I am sure, from the thoughts of the Sardinian Government, and it has certainly never entered into the contemplation of France and England, that that honourable alliance, founded on good faith and for noble objects, should be the means of enabling Sardinia to set forth upon a crusade of aggression against any other State. The right hon. Gentleman talks of the "tripartite treaty" as of an instrument that contemplates in its execution that the three contracting parties—England, France and Austria—shall govern Europe, and that it involves an engagement on the part of England and France to guarantee all the possessions of Austria. Sir, I am really surprised that the right hon. Gentleman should hazard assertions of that kind with regard to a document which any man who reads it must perceive to be susceptible of no such interpretation. The treaty does not imply that the three Powers in question shall take upon themselves any authority or interference whatever, in the general affairs of Europe, nor does it contain one single syllable about guaranteeing the territories of any of the contracting parties. That treaty has only one object, the same that Austria proposed at Vienna in the spring of last year, namely, that in the event of a peace there should be an undertaking between England, France, and Austria to provide for the due execution of a common treaty, having for its object the securing of the integrity of the Turkish Empire. I am utterly at a loss to understand where in that treaty the right hon. Gentleman finds anything to warrant the impression that it is a treaty erecting those three Powers into the arbiters of the destinies of Europe, or binding England and France to any guarantee of the territorial possessions of Austria. There is nothing, therefore, inconsistent in the provisions of that treaty with the protocols of Paris, or with any diplomatic engagements or intercourse which may have taken place between the British Government and the Government of Sardinia. The right hon. Gentleman has, I think, fully justified what passed in the Conferences of Paris in regard to the unfortunate condition in which many

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parts of the Italian States now are. He did not, perhaps, go to the extent of expressing censure; but, by the anticipations which he expressed of a better destiny for the future, he very significantly showed what he thought of the present state of that country. The right hon. Gentleman may or may not agree with Count Cavour as to the extent to which the military occupation of States by foreign troops may affect the happiness, welfare, prosperity, or good order of those States; but I have no hesitation in saying that I think those occupations are misfortunes, and that they should cease as speedily as possible. Those occupations began under very different circumstances, which might or might not have justified them at the time; but those circumstances have long ceased to exist, and I am ready to admit to the right hon. Gentleman that, in my opinion, the time has come when those occupations ought to be put an end to. But with regard to any engagement for that purpose, there is nothing but what is public to all the world on the face of those protocols. These matters were openly discussed at the Conferences of Paris, and in the presence of the Austrian Minister. There was no concealment, no mystery about them; the opinions which were entertained were expressed without the slightest reserve and with perfect good faith on the part of all who were concerned in the discussions. Now, with regard, Sir, to what passed in 1848—those transactions have often been the subject of debate in this House and elsewhere, and those who assert that the Government of this country were not actuated by perfect good faith in the course which they took must assert it in complete ignorance of what passed at that time. The part which we took was perfectly fair and open. Lord Minto went to Italy for the avowed purpose of tendering advice to those Governments which might be willing to receive it with respect to improvements in their administration. Well, Sir, at that time there was an insurrection in Sicily, and at the request of the King of Naples we endeavoured to mediate between him and the Sicilians. We had brought that mediation nearly to a point. The question was—not what institutions they should have, because the King of Naples was willing to give them institutions almost similar to those which they had before possessed—but the question was, whether the Crown of Sicily was to be united with that
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of Naples, and the King of Naples to remain Sovereign of the two countries. That would have been settled in a manner satisfactory to the Sicilians and consistent with the unity of the empire, when the French Revolution of 1848 occurred. The news of that revolution kindled a fresh flame among the Sicilians, and they refused to have the King of Naples as their Sovereign. Lord Minto, then, acting according to the instructions of the Government, and to the spirit of the mediation which we had proposed, said that he could no longer carry on communications with those who refused to remain subjects of the King of Naples, after offers had been made to them which ought to have satisfied them in regard to their institutions. There was no abandonment of any party that we had undertaken to support. We gave them our good offices up to the point of their continuing to be subjects of the King of Naples; but when excited and encouraged by events in France, they declared that they would no longer consent on any terms to have the Crown of Sicily united with the Crown of Naples, we said that good faith to that Sovereign with whom we were in alliance, and with whose consent our diplomatic agent had entered on mediation, prevented our carrying on that mediation any further. The Earl of Minto therefore retired, and the parties were left to deal with each other as they pleased. There was nothing then in that transaction with which this country need be dissatisfied. We gave every assistance we could to put an end to the quarrel which had broken out between the people of Sicily and the Neapolitan Government; and our failure was not owing to any want of effort or goodwill on our parts, but to events which took place in another part of Europe which proved fatal to an arrangement which was otherwise in a fair way of being satisfactorily settled.
SIR FRANCIS BARINGsaid, the course of the debate would almost induce him to ask himself whether he was not under some mistake as to the subject which was before the Committee. He fancied he must be labouring under some strange delusion, for he had thought that they were called upon to consider a financial Resolution, and that the subject they were to discuss was one eminently of a domestic character; but the right hon. Gentleman the Member for Buckinghamshire (Mr. Disraeli) had treated it as a question of foreign policy; he had connected it with the affairs of Italy and

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the tripartite alliance. Now he thought that it was not quite fair towards quiet and business-like Members, that the right hon. Gentleman, upon such an occasion, should swamp their deliberations with that sort of magnificent declamation which he was so well able upon every occasion to display; or that he should diverge so widely from what really was a question of whether the Committee approved of the terms of the loan which had been made that day. Now he (Sir F. Baring) quite concurred in the course which the right hon. Gentleman the Chancellor of the Exchequer had taken. The right hon. Gentleman had settled merely what was to be done in the present state of things, leaving his course for the future quite open, and not committing the country to his policy for the future, in any way whatever. On such occasions almost every Gentleman had some hobby in view, some tax to endeavour to get rid of at the expense of the revenue; and he himself had objects which he should be happy to explain in due time, but he hoped the Chancellor of the Exchequer would stand firm now, and would not consent to abandon the position he had taken. Something had been said of our attaining perfection in our taxation; but no perfect tax could ever be devised. Ever since the peace of 1816 we had been reducing or changing our taxation, and he should be sorry to have it ever said that any system of taxation was final and could not be improved. But he hoped his right hon. Friend the Chancellor of the Exchequer would not allow any inroad to be made upon the revenue in consequence of any immediate appeal that might be made to him; for his doing so would prevent the Chancellor of the Exchequer hereafter, when the proper time should come, from taking a full, comprehensive, and extensive view of our whole system of taxation. That was the more important because there were certain taxes laid on merely as war taxes, and pledged to be taken off in a certain time after the signature of the peace; and if the Chancellor of the Exchequer, at the first moment, now, in consideration of any particular tax, allowed his deficiency to be increased, it would be impossible hereafter for any Government to perform that of which a promise had been held out, namely, that if the country would pay certain taxes during the war, they should at the expiration of the war be taken off. He thought it of the greatest importance that faith should be kept in
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those matters; and he earnestly begged his right hon. Friend the Chancellor of the Exchequer not to be led by any one to permit a sudden inroad into the revenue, either for the repeal of the paper duty or anything else. There was another subject on which the right hon. Member for Buckinghamshire had spoken well. He earnestly hoped that between this time and the next financial statement the Government would seriously take into consideration the establishments of the country, with a view to reducing them to a peace establishment, still remaining effective. He quite concurred with the right hon. Gentleman in believing that economy and efficiency not only could, but generally did, go together; and that frequently our very faults arose from the too large expenditure which we had made; and he did not believe we should have been better prepared for the late contest if we had spent double the sum for our army and navy which had been spent. He hoped that next year the Chancellor of the Exchequer would be able to show the country that the Government had considered the establishments with a view to reducing them to what would be sufficient for the service; and if that were not done it would be the duty of that House loudly to call upon the Government to reduce the expenditure, and recur to those old practices of economy which, during the last few years, had not been so fashionable.
MR. GLADSTONE: Sir, although I may regret that we have been led to trespass to so considerable an extent upon questions of foreign policy on an evening devoted to financial concerns, yet it is not to be denied that the proposal made by the Chancellor of the Exchequer with respect to Sardinia—a proposal the grounds of which were not fully developed—has tended, to a certain degree, to carry us into that field. For my right hon. Friend has proposed to the Committee, with regard to Sardinia, that we should enter into an arrangement which is not comprehended within the treaty we have concluded with that country, and upon the grounds of which I consider we ought to be fully informed. Recollecting the favourable manner in which the right hon. Gentleman the Member for Buckinghamshire, notwithstanding his objections to the system of subsidies and guarantees in general, received, in common with those who sit beside him, the proposal of last year to make a loan to Sardinia, I am quite sure

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we are not to regard his speech to-night as indicating any change of feeling on his or their part with respect to the policy of that measure. I take the liberty of saying so much, because, even at the hazard of following the example, if such it be, of discussing what is beside the question before the Committee, I cannot say how much importance I attach to maintaining abroad the conviction that if there is a subject of foreign policy upon which the House of Commons, if not absolutely unanimous, yet approaches to unanimity, it is in the feeling of respect and regard which we entertain towards the Sardinian Government and people, and in our sense of the duty of lending them every support that the moral influence of England can give. Well, Sir, the right hon. Gentleman the Member for Buckinghamshire alluded to certain paragraphs which he finds in one of the protocols of the Conferences at Paris, and which he considers as indicative of an aggressive policy on the part of Sardinia. Now, Sir, I venture to say, that even if Sardinia did entertain such schemes of aggression—and although we might, upon being assured that such was the fact, regret that she harboured such feelings—yet, considering her position, we could, I think, scarcely wonder at it. We must consider the extreme difficulty which is experienced by a very small country that has one neighbour—and sometimes more than one—of whom she has cause to be afraid, and not only has her political position complicated by foreign policy in its ordinary sense, but is likewise troubled in the rectification of her ecclesiastical laws on account of her relations with Rome, finding at her own doors—one might almost venture to say in every parish—some portion of her subjects upon whom little reliance can be placed. At the same time I venture respectfully to express the opinion, that if Sardinia carries the same enlightened spirit into her foreign policy which has governed her domestic policy, she will renounce and forswear all those schemes of aggression. She has need of a lofty self-denial and self-command, but a disinterested part is that which in the end will best serve her interests. Her function is, as stated by the noble Lord at the head of the Government, in the course of this discussion, to exhibit a right example to Italy, and in the moral force of that example and the consequences flowing from it, she is certain to find the reward of all her efforts and endurance. I have
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now one remark to make with respect to this proposal in regard to Sardinia. I am sure it is the unanimous feeling of the people that we should discharge in an ungrudging spirit of liberality, and something more, not only our written obligations to Sardinia, but also those more general obligations which are to be found beyond the limits of the treaty we have concluded with her. I hope the Chancellor of the Exchequer will show—I have no doubt my right hon. Friend will, but I express the hope in a distinct form, because I did not understand that portion of his speech so clearly as the rest—that whatever advance he may propose to make to Sardinia is to be bonâ fide for the purpose of liquidating the pecuniary obligations which are due to her for her operations in the Crimea; and I am sure that, as far as the question of money is concerned, nothing will induce the House of Commons to stay its hand, provided my right hon. Friend conforms to the principle which I have thus ventured to indicate. And now, following the example of the right hon. Member for Portsmouth (Sir F. Baring), I feel it to be my duty to refer to those statements which I heard with sincere satisfaction proceeding from the right hon. Gentleman the Member for Buckinghamshire with respect to the principle upon which our military expenditure is to be conducted. To whatever it may be owing, we cannot be blind to the fact that there is a vague impression abroad that the parsimony of the House of Commons was the cause of the evils and disasters we have recently incurred. There is no man, I apprehend, who, after the light which time has thrown upon these matters, will deny that we have incurred evils which might have been avoided; but I hope that there are many men both in this House and out of it who will demur to the conclusion that a legitimate connection can be traced between those evils and an undue economy on the part of the House of Commons. Let us look to the examples that are immediately before us. If it is economy that has produced those evils, what are we to say to the case mentioned by the Chancellor of the Exchequer—the case of Prussia for instance? Whatever we may think of the policy of Prussia, or of the errors which she may recently have committed, we must regard her as a considerable military Power, with a well-organised, effective, and disciplined army; and yet the Chancellor of the Exchequer

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tells us that the whole of the military expenditure of Prussia, her naval force being comparatively insignificant, does not amount to more than £4,900,000 a year. I do not suppose that an English army can be maintained as economically as a Prussian army; there are many reasons why it should not be so; but when we hear language held with respect to the proceedings of various Administrations and of this House, as if the national purse had been closed and our establishments reduced to the lowest scale, it should be recollected that £13,000,000, £14,000,000, £15,000,000, and even £16,000,000 a year have been ungrudgingly voted by this House for military purposes. But if we want to dissipate the delusion that an effective army usually means an expensive army, let us take a much stronger case than Prussia—the case of Sardinia. No army ever took the field in a more effective state than did the Sardinian Contingent in the Crimea. The Sardinian army in every point—in equipment, in organisation, in numbers, in discipline, as well as in courage—has won the admiration of all acquainted with it; and yet Sardinia is a small country, her army is numerically much less than the British army has ever been, and it is maintained at a cost which might well make the lips of the most rigid economist in this House water, but which one would be almost afraid to mention for fear of frightening the English people into the notion that we were going to reduce our expenditure to the same level. One word upon a subject which has been frequently referred to in this debate. Gentlemen speaking from various parts of the House, upon the score of the fact that we have returned from a state of war to a state of peace, seem to be contemplating a reduction of taxation, and we have even had intimations that positive proposals of that kind are to be made in the course of the present Session. Yet I think it is undeniable that, as far as expenditure is concerned, the year now before us is not a year of peace at all. I do not use those words merely in a general sense, but in a sense very specific, because if you compare the expenditure of 1856–7, as it has to-night been estimated by the Chancellor of the Exchequer, with the expenditure of 1854–5, which was throughout a year of war, you will find that the former greatly exceeds the latter. The expenditure of 1854–5 was somewhere about £68,000,000, but the statement which the Chancellor of
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the Exchequer has made to-night, shows that the expenditure of 1855–6 is not £68,000,000, but, is to amount to £77,000,000. With respect to the provision he has made, the hon. Member for Sheffield (Mr. Hadfield) compliments him upon its lavish amount, and threatens to aim a blow at a great branch of revenue—the duty on fire insurances, which will cost at least £1,000,000, and he says the Chancellor of the Exchequer has provided for it three times over in his surplus of revenue over expediture. I confess the provision with reference to the expenditure as it stands on paper seems to me somewhat narrow. If it be sufficient, it is quite plain it will not be more than sufficient; for while the expenditure is £77,000,000, the revenue amounts to £67,000,000. Then there is £1,500,000, which may be taken from his balances, and still there is a deficiency of between £8,000,000 and £9,000,000. There may be £2,000,000 for a Vote of Credit, and that reduces it to between £6,000,000 and £7,000,000, but still nearer £7,000,000 than £6,000,000. The Chancellor of the Exchequer proposes to provide £5,000,000 by the loan for which he has just made arrangements, and he proposes to borrow £2,000,000, if necessary, upon Exchequer bonds or Exchequer bills. Supposing he gets his £2,000,000 on Exchequer bonds or Exchequer bills, I do not think the figures, when they come to be balanced, will show more than a surplus of £160,000, and such a surplus upon a sum of £77,000,000 is sailing very near the wind indeed. I, for one, shall be delighted, when the proper opportunity arises, to see the hon. Member for Sheffield succeed in taking away a million of money from the revenue of the country; but in the present state of our finances I hope the Chancellor of the Exchequer will hold very firm and decided language to prevent such incursions on the funds at his command; and I trust whatever may be our differences of opinion, we shall not set the pestilent example of abolishing taxes and meeting the expenditure of the country by borrowed money. I observed in the early part of this debate that, for the moment, hon. Gentlemen seemed to forget the inevitable relation between the expenditure and the taxation of the country. It is now the disposition of the House of Commons to force increased expenditure upon the Government. From every quarter we hear suggestions that this ought to be done and

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that ought to be done—that there should be no parsimony here and no niggardly proceedings there—until the House of Commons has become a power on the whole rather favourable to increased expenditure than to economy. I must confess that I should have been glad to see greater reductions than those which have been announced. If I look at the Army Estimates, I am sorry to find the Vote which the House of Commons passed, rather as a war measure than upon any distinct examination of its merits, for £870,000 for works, which is a peace Vote rather than a war Vote—I am sorry to find that Vote is not likely to undergo more effective scrutiny or be subject to any sensible reduction. I confess that I likewise view with some disappointment the amended Navy Estimates. A sum of £16,800,000 is very large; I will not say it is alarming, but it is a very disagreeable figure to see for naval expenditure in the first year of peace. I perceive that a very considerable part is for transport service—£6,000,000. But still a sum of nearly £11,000,000 remains for the naval establishments of the country for the first year of peace; and, considering that our naval establishments are not like those of the army—considering that the navy can be recalled and its excess got rid of with far greater facility than the army, the whole strength of which is in the Crimea, and to bring home, which will require many, many months, I should have been very glad if the right hon. Gentleman the Chancellor of the Exchequer had proposed to us a more moderate amount, and I am sorry the Committee has not seemed disposed to take him to task upon the subject of those Estimates. If the Committee were disposed to do that, whether right or wrong in particulars, it would be going the right way to work. But, instead of that, there seems to be a disposition to stimulate increased expenditure, while, by questions, motions, and divisions, every effort is directed to stinting the means of meeting that expenditure, although those means are already quite enough, if not perhaps too much, reduced. I trust the Chancellor of the Exchequer will hold firm and decided language upon this subject, and make it understood that it is the intention of the Government to maintain taxes until the time comes (no man longs for it more than I do) when the Government will be in a position to propose those remaining reforms which I quite agree are yet to be accom-
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plished in our system of taxation. I long for the arrival of that time, but until that time does come, I trust the Government will be firm in its language, and I am confident, if the Chancellor of the Exchequer will hold language which is intelligible, he will find that the House of Commons will never refuse to support him in maintaining the public revenue.
MR. MALINSsaid, he wished to say a few words with regard to the increased income tax, which the country had submitted to have raised to so large an amount during the war. The country certainly expected that that tax would be reduced from the standard of a war tax as soon as possible after the conclusion of hostilities. During the war the duty on tea was raised to 1s. 9d. in the pound; hut the increased duty was to cease, as stated by the Chancellor of the Exchequer, on the 15th of April, 1857. He admitted that as regarded the income tax the words of the Act were with the Government in declaring that the additional rate should remain on till the 5th of April, 1858; but he really thought that that circumstance was to be attributed to accident. The words in the Act imposing the additional duties upon tea and coffee were that those duties should exist for twelve months from the 5th of April following the date of the definitive treaty of peace. Now, he was perfectly aware that the date of the treaty of peace was the 3rd of March, 1856; and that, therefore, by the Act those additional duties would cease on the 5th of April, 1857. The words of the Act relating to the increase on the income tax were, "for one year after the 5th of April following the ratification of the definitive treaty of peace." He was quite aware, too, that the ratification of the treaty took place on the 27th of April last, and that, therefore, one year after the 5th of April next after the ratification would be the 5th of April, 1858; but was the intention of the Legislature that the additional income tax should exist after the additional duty on tea had ceased? He believed that the country would cheerfully submit to the payment of the income tax for one year more; but not for a longer period. The income tax was most burdensome to the people, and especially oppressive upon the middle classes of the country, and he was therefore the more disappointed that the right hon. Gentleman had held out no hopes that the country was to be relieved from that great burden before 1858. As he had before

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observed, he admitted that the words of the Act Were in the Chancellor of the Exchequer's favour; but he asked the right hon. Gentleman to act up to the spirit of the enactment, which was to provide means for carrying on the war, and to discontinue the increased taxation in a limited time after the war had ceased. He (Mr. Malins) did not in the least object to the additional advance proposed for the Sardinian Government. Quite the contrary. But he should remind the Chancellor of the Exchequer, that in that case he was not confining himself to the words of the Act; for the Act only bound Her Majesty to ask Parliament to enable her to make a second advance in case the war continued for twelve months after the payment of the first instalment of the original loan. Now, the war had not continued for that time. He (Mr. Malins) only referred to this circumstance to illustrate his proposition that in the case of the income tax the Chancellor of the Exchequer should not feel himself bound by the words of an Act. He had spoken to several Members of the House on the subject; and his opinion was that the intention of the Legislature in passing both measures was that the additional tea duty and the additional income tax should cease at the same time; and that the difference in the wording of the Acts had escaped the observation of the House. The opinion expressed by his right hon. Friend (Mr. Disraeli), and echoed by the right hon. Gentleman opposite (Mr. Gladstone), met his entire concurrence—namely, that, because after a long period of peace we were taken by surprise, and had to enter upon a war under great difficulties, it was not to be assumed that these difficulties were to be avoided in future simply by a large increase in the army; and that, in fact, it was not upon the number but the efficiency—not the quantity but the quality of our forces, that we must depend. He also concurred in the sentiment of the right hon. Member for the University of Oxford, with regard to the principle upon which the Chancellor of the Exchequer must act in respect to taxation. He, for one, had the strongest possible objection to the high rate of fire insurance duty. For many years he had been of opinion that that was an impolitic and oppressive tax, and one which he should rejoice to see reduced. But if he were now asked to give up two-thirds of a tax which had produced £1,340,000 during the past year,
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and thereby strike off at least £800,000 from a revenue which was at present barely sufficient to meet the demands of the country, he confessed that he should not hesitate to withhold his assent from any such proposal. He could have wished that it had formed a part of the treaty of Paris that there should be a general reduction of armaments among the great European powers—that the continental nations generally should reduce their forces, and that one nation should not be compelled to maintain a large army simply because another did so to keep a neighbour in check. Perhaps, however, that was a little too much to expect at present. He would, therefore, conclude his observations by saying, that, upon the whole, he was well satisfied and much gratified to find that great as was the expenditure which was going on, the right hon. Gentleman had a reasonable prospect of getting over the year with the moderate loan of £5,000,000.
SIR HENRY WILLOUGHBYsaid, it appeared that the cost of the war during the past year amounted to no less a sum than £92,500,000. In other words, £65,700,000 had been raised by taxation, whilst £25,500,000 had been borrowed. Those two sums would make together £91,200,000; and if to that they added the portion of the last loan, to which the Chancellor of the Exchequer had referred, he believed he was right in saying that the total expenditure had been £92,500,000, or thereabouts. [The CHANCELLOR of the EXCHEQUER dissented.] The right hon. Gentleman shook his head. He should be glad if the right hon. Gentleman would inform him where he was wrong. Believing, then, that he was very near the correct figure, what he wanted to know was, what were the data upon which the Committee was to come to the conclusion that £77,500,000 was necessary for the expenditure for the forthcoming year. The right hon. Gentleman had himself shown that there was a reduction upon some of the Estimates to the extent of £17,000,000. Surely, then, that would not leave an expenditure for the ensuing year of £77,500,000. The truth was he believed that the right hon. Gentleman had very little data to go upon, and that when he came to provide the ways and means for the £77,5000,000, he would not be able to show very clearly how he could take the revenue for the year at so large a sum as £67,000,000. That amount would indicate a considerable increase in the

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receipt of taxes for the present year, and as some of the taxes would cease in the course of the year, it did not appear to him (Sir H. Willoughby) that the right hon. Gentleman's data were sufficient to justify him in arriving at any such conclusion. Supposing, however, that the right hon. Gentleman was correct in his statement, still there would remain £10,000,000 to be provided for; and £5,000,000 of this, it appeared, was to be raised in the old style of borrowing, and that upon the issue of Exchequer bonds. Now, it appeared to him that this method of raising money was an extremely awkward one for all parties concerned; and he trusted that if the right hon. Gentleman were driven to borrowing at all he would do so by resorting to the issue of Exchequer bills, for nothing was more calculated to complicate our system of finance than a constant issue of bonds in small quantities. With regard to the Sardinian loan, he should be glad to know if the money granted to Sardinia was really a loan or not? [The CHANCELLOR of the EXCHEQUER: Yes, it is a loan.] Well, that was one important consideration; but when would it be repaid? For his part he believed it was a delusion to term it a loan, and that we should never see one farthing of it back again. There could be no more mischievous system adopted than that of granting money in this manner. Surely, it would be far better to treat Sardinia generously at once, and not to conceal from ourselves that what we called a loan was in point of fact a gift. The proposal of the right hon. Gentleman was certainly a very simple one; for it went to raise as much taxation as was possible under the existing system, and borrow the remainder. But he warned the Committee to be shy of increasing the capital of the national debt, for he must remind them that within the last two years they had increased it to the amount of all the diminution they had been able to effect in the course of the previous forty years, and that there could be nothing more injurious to the interests of the country than having a constant recourse to loans. In fact, loans were only to be justified in cases of extreme necessity; and he thought the right hon. Gentleman should have endeavoured to carry out his own maxim, and, having proposed to borrow money, been prepared to provide the means of paying the interest, by creating some species of sinking fund for clearing off the principal of the debt. With regard
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to the expenditure, he believed the time would come when that question would be looked into more closely than it had been during the last year or two, and he believed the right hon. Gentleman who was now calling upon the Committee to sanction an expenditure of £77,500,000 would not lose sight of the fact that he had taken upon himself a most responsible task. His belief was that the right hon. Gentleman was asking the Committee to sanction a most extravagant Estimate, and that it was the duty of the Committee to do all in its power to curtail the expenditure, for they might rely upon it that the feeling was pretty wide spread throughout the country that a great deal of the expenditure at home had been most lavish, and that much of it might have been saved had a wise and prudent economy been exercised in the various branches of the public service.
MR. J. G. PHILLIMOREsaid, he quite agreed with the hon. and learned Member for Wallingford (Mr. Malins) that there were few taxes so impolitic and mischievous as the tax on fire insurances. At the present time it was notorious that it was driving a considerable portion of the trade that might be carried on in England to France. Under the circumstances, however, he should not feel justified in consenting to cut off so large a portion of the revenue as would result from the carrying the Motion of his hon. Friend (Mr. Hadfield). He trusted, however, that the Government would take the earliest opportunity of reducing our military establishments to as low a condition as was compatible with the reputation and honour of the country; and that we should, now that the war was over, return to the system which was followed by our fathers, and not think it necessary to maintain large military establishments for the sake of making this country, what she was never designed to be, a great military power. He should be glad to see the camp at Aldershot at an end to-morrow; but with regard to the navy, that was our best defence and natural protector, and he desired to see it kept up on a large and liberal scale, for it was a description of force respecting which the country never need feel any apprehension.
MR. HENLEYsaid, the right hon. Gentleman the Chancellor of the Exchequer had stated that there were £5,000,000 of Exchequer bills in the hands of the Commissioners for the Reduction of the

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National Debt. He wished to know if that £5,000,000 were a portion of the money that belonged to the savings banks?
MR. VANSITTARTsaid, he did not think the right hon. Gentleman had adopted the wisest course for the future interests of the country, which he appeared to him to be sacrificing for a temporary purpose, He was of opinion that it would have been far wiser to have reduced at once the tax on fire insurances, and so to have encouraged the effecting of insurances to the whole extent of the property of this country. That would have been the boldest and also the wisest course to have pursued.
THE CHANCELLOR OF THE EXCHEQUERsaid, in reply to the question of the right hon. Member for Oxfordshire (Mr. Henley), that the £5,000,000 which he had stated were in the hands of the Commissioners for the Reduction of the National Debt was a portion of the money held upon securities belonging to the savings banks. The hon. and learned Gentleman opposite (Mr. Malins) said that the income tax ought to be put upon the same footing as the tax upon tea or coffee, and he had pointed out in detail the difference existing between the provision of the law as regarded the income tax and those taxes. Now, the statement of the hon. and learned Gentleman cut both ways. It might have been that the income tax should be taken off as soon as the taxes on tea or coffee, or persons might draw the opposite conclusion, and say that it was meant that the taxes upon tea and coffee should be prolonged until the expiration of the term appointed for the cessation of the income tax. He had not in the statement which he had had the honour of making to the House at all touched upon the equity of the existing provisions, but had only pointed out their effects; and he could only say that the spirit of the treaty related rather to the exchange of the ratifications than to the time of the treaty being signed. As to the question asked by the hon. Member for Cambridgeshire (Mr. E. Ball), he could only say that what it was proposed to do with regard to the malt tax was to take off the duty which had been imposed during the war, so that it would stand at the amount of duty as it was at before the commencement of the war. The hon. Member for Evesham (Sir H. Willoughby) seemed to think that the calculation that £77,500,000 would be necessary for the service of the year was excessive; but he
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wished he could find any reason for supposing that such was the case, for he was sorry to say that he had no doubt but that the whole of that sum would be required. As regarded the Sardinian loan, it was true that he did not state to the House the grounds upon which the Government were prepared to ask the House to consent to the payment of the second sum of £1,000,000; but as it would be his duty to bring in a Bill to give effect to that stipulation of the treaty, there would then be an opportunity for full explanation on that subject. He thought the nation was bound in honour to pay the second sum of £1,000,000 of the loan. The expenses actually incurred by Sardinia before the termination of the war exceeded the £2,000,000 of the loan, and an application had been made for additional assistance by the Government of Sardinia beyond the amount of the loan. Her Majesty's Government, however, did not feel justified, under the circumstances, in acceding to that proposal, but they assuredly felt bound to carry out the original convention to its full extent. As to the question of a final and definitive correction of our existing system of finance and taxation, nothing was further from his intention than to convey any belief on his own part that our system of taxation, although based upon sound principles, had reached the point of definite perfection. He thought that particular branches of our system of taxation might be considered, with a view to its adaptation to the circumstances of the country. But he had expressed an opinion to which he adhered—that he saw no reason, because we had returned to a state of peace, for subjecting our taxation to a complete and systematic revision.
MR. W. WILLIAMSsaid, the right hon. Baronet the Chancellor of the Exchequer had not answered his question as to when details of the reduction in the Naval Estimates would be laid on the table.
SIR CHARLES WOODsaid, that nine-tenths of the Votes in the Naval Estimates had been taken in full. There were only two Votes in which there was a reduction—in the number of men and the Vote for the transport service. He would make a statement on moving the balance of the Votes which would give every information on that particular subject.
MR. WALPOLEsaid, he wished to ask whether it was intended to separate the Votes for the Ordnance service from those more properly belonging to the army?
THE CHANCELLOR OF THE EXCHEQUERsaid, that there were certain Votes on which a small additional sum was proposed to be taken. Thus, the original Vote for the land forces was £10,950,000; the reduced Vote was £7,000,000; and the Committee had already voted £7,000,000 on account. A nominal sum of £10 would be added to this Vote in order to give hon. Members an opportunity of debating it. In cases where the Committee had voted on account a larger sum than would be required the original Resolution would be rescinded, and the reduced sum would be brought forward.
Resolutions agreed to; House resumed.

FIRE INSURANCES BILL.
Order for Committee read.
Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."
MR. BAXTERsaid, that his objections to this Bill were increased ten-fold since it had last been under consideration. The object of the Bill was to prevent insurance business from going abroad. Foreigners were not satisfied with inviting British subjects to insure abroad, but they had appointed agents in London; he, therefore, did not blame the Chancellor of the Exchequer for endeavouring to apply a remedy to this evil, but what they had to consider was the sort of remedy he proposed to apply. He thought the right hon. Gentleman had taken a wrong course, and that the Bill would be both impracticable and inoperative for the purpose of suppressing foreign insurances. In his opinion, it would be impossible to prevent people from sending their orders for insurance to France or Germany. His opinion was, that those orders would increase in such a ratio as would compel the Chancellor of the Exchequer to adopt a course more consonant with finance. The question simply was, in what manner could they prevent foreigners running away with a great part of the insurance business of this country? His answer was, that it could only be done in one way, and that was by reducing the duty on British insurances. The tax was wholly indefensible in principle. Mark how it worked. The amount of insurable property in this country was between £5,000,000,000 and £6,000,000,000, and yet not more than £850,000,000 were insured against fire, because of the excessive duty. In France £1,600,000,000 worth of property had been insured within the
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last thirty-six years. It was perfectly obvious if the duty were reduced a great benefit would be conferred upon the community, and the Chancellor of the Exchequer would in the end, no doubt, receive a large amount of revenue. The marine insurance was a precisely analogous case. The duty in former times was very high; what was the consequence? The owners of vessels and shippers of goods went to Rotterdam and Hamburg to insure. The Government reduced the duty, and the shipowners and merchants immediately resumed insuring in England. The same result would be the case with fire insurances. Clause 8 could only be enforced by opening every letter that passed through the Post Office. That nibbling sort of legislation was trifling with a great question. He hoped the right hon. Gentleman would take these objections into consideration, and provide a remedy more in accordance with sound principles of finance.
MR. WILKINSONsaid, he fully concurred in the opinion expressed by the hon. Gentleman as to the impracticability of the measure. The object of the Chancellor of the Exchequer was to secure the revenue on fire insurances, but this was not the way to do it. He believed that if the duty were reduced from 3s. to 1s. it would effect all the purposes desired. It was impossible to retain the present amount of duty, besides which he thought the Bill objectionable in principle.
MR. HADFIELDsaid, he thought that at a moment when free trade was making such rapid advances on the Continent, and when foreign countries were likely to make changes in their policy which would largely benefit us, the Bill before the House was one which would prejudice foreign nations against England. With regard to the duty levied by the Government, the fact was, that the large amount of allowances made to the insurance offices for expenses connected with the collection of the revenue acted as a bribe to those offices to hold their tongues. He cordially reiterated the hope that the Chancellor of the Exchequer would take the subject into his serious consideration.
SIR SAMUEL BIGNOLDsaid, the expenses incurred by the insurance companies in collecting the revenue which was handed over to the Government amounted, he believed, to more than the allowances received by them from the country. Then it must be remembered that in this metropolis the British insurance companies en-

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tirely maintained the Fire Brigade, the expenses of which during the last year amounted to £21,500, and the country fire brigades cost about the same sum. If, from being subjected to any unfair competition the resources of the companies were impaired, the public—non-insurers as well as the insured—would, of course, be deprived of this protection to property. On the part of the insurance offices, he could say that if the Chancellor of the Exchequer could see his way clear to give up two-thirds of the revenue arising from this source, they would be most happy to receive it as a boon. They did not press this now, but, meanwhile, he thought they had a right to ask for some defensive measure like the present.
MR. GLYNNsaid, he should support the Bill on the ground of the unfair competition to which the English offices would otherwise be subjected. With regard to the question of revenue, he thought the House ought not to part lightly with a duty bringing in about £1,300,000 a year—a sum collected probably with less difficulty than any other tax in this country. The proposition of the hon. Member for Sheffield (Mr. Hadfield) would reduce by one-half the revenue derived from fire insurances, and he, for one, was not, in the present position of the national finances, disposed to accept that proposition. When the alteration took place in the duty on agricultural insurance about twenty years ago, the effect of that was not to increase very materially the amount of property insured, although the reduction was very great. The amount of insurances upon agricultural policies between 1841 and 1851 increased only from £51,000,000 to £54,000,000, which did not, in point of fact, represent in any degree the difference in the value of property between those respective periods. Bringing the calculation down to the present day, he found that the amount of agricultural property insured was only about £62,000,000, which, taking into account the increase in the value of property, did not, in 1856, by any means represent the amount of insurance effected in 1841. He assumed, therefore, from these facts that a reduction of duty would not bring about the great increase of insurances which hon. Members seemed to calculate upon. It must be remembered, also, that the system of insurance was entirely different in this country from that which existed in France and Holland, where what was termed the
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"average clause" was adopted; and he would suggest to the right hon. Gentleman whether he could not leave the duty as it stood upon English policies in their present shape, but make a remission of the duty to 1s. or 1s. 6d. upon policies containing the "average clause." That would be a considerable inducement for persons to adopt the "average clause;" he considered that the competition of the French offices would be best met in that way; and by introducing the French practice into this country the Government would do more to increase insurances than by any other plan which could be devised. The great aggregate of the amount of losses arose from small fires, comparatively few of which were, strictly speaking, accidental; and if they did not occur through wilful design, many were the consequence of culpable negligence. He also thought the introduction of the "average clause" would have the effect of inducing greater care on the part of insurers. He conceived that the Bill was absolutely necessary for the protection of the English offices.
LORD STANLEYsaid, he entertained a very strong opinion that of all taxes now existing in the financial system of this country the tax upon insurances was not only the most inexpedient, but, if he might use a stronger word, he would say it was the most immoral, and that it combined every possible bad quality which any tax could have. At that particular moment, however, knowing the pressure there was upon the Government, and quite concurring in the general feeling of the House that this was not a fit time for undertaking a revision of the financial system of the country, he would not upon general grounds have opposed the Bill. But, on looking into the provisions of the measure, he found that it must apparently remain utterly inoperative unless larger powers were given than the Bill conferred, and than he believed Parliament would sanction. By clause 3, every person acting as an agent for any insurance office abroad was required under a penalty to take out a proper licence. The clause did not propose merely to interfere with any person opening an office, or advertising himself as an agent of a foreign insurance office, but with any person who in any single case acted as the agent of a foreign insurance office. Now, by what possible machinery did the Government intend to discover parties who were acting in the capacity of agents?

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The office was established abroad, and advertised in the English newspapers. Nay, it need not even do that, for it might circulate prospectuses by the post, and the business might be, and probably would be, transacted by correspondence. The agent might receive his powers by a private letter, and, acting upon these powers, he would communicate with his employers by private letters. In all those proceedings there was absolutely nothing that could come before the public, or of which it was in the power of the Government to take cognizance. He did not know what machinery the Government intended to employ, but he thought that in a great majority of cases such a course as he had described would be pursued. He had supposed that some explanation would have been afforded on the part of the Government of the means by which they intended to meet these cases, and, as no such explanation had been given, he felt that he had no alternative but to vote, as he did very reluctantly, against going into Committee on the Bill.
MR. TITEsaid, that the average clause in foreign policies, to which he referred on a former evening, was in effect this: that in case the property belonging to any person should be of less value than the amount insured, a proportion only of the amount would be paid, and by another clause in the foreign policy, he found that, if the parties would not agree as to the total value, they were remitted to the Courts of France for the matter to be inquired into. It should be well understood, that any person who took out a policy in these foreign offices was liable to be referred to the Courts in France before his claim would be settled. He thought at one time that interference by enactment with these new offices would be unnecessary, but he had since found that a larger amount of insurances was going abroad than he anticipated. The tax was objectionable as it at present stood, but he thought something ought to be done to protect the financies of the country as well as the insurance offices.
THE CHANCELLOR OF THE EXCHEQUERsaid, he thought the course the House seemed disposed to take with regard to this Bill was somewhat unusual. He had stated on a former occasion that the Bill was introduced in order to remedy a defect in the law respecting fire insurances. The present law did not prevent foreign offices from establishing agencies
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in this country, and dealing in fire insurances without being subject to the duty to which fire insurances effected in English offices were liable. The English insurance offices were thus exposed to unfair competition, inasmuch as the foreign offices were able to effect policies without the payment of the duty which was required from English offices; and the nation also lost the revenue which would have been derived if the insurances effected in foreign offices had been effected in English offices. It, therefore, seemed to him that it was a very obvious course to subject insurances effected by the agents of foreign offices to the same duties which were applicable to insurances in British offices. It had been stated by more than one hon. Member that the Bill would be inoperative and that it would not effect the object for which it was brought forward, but that objection proceeded from gentlemen who, as he understood, did not wish to render the measure more stringent and efficient, but to defeat the Bill altogether. He could only say that the Bill had been carefully drawn by the legal advisers of the department of revenue to which it related; that it had been submitted to the Law Officers of the Crown, and to persons interested in different insurance offices; and that he believed it would fully effect the object for which it was introduced. He was the person responsible for the introduction of the measure, which was to a great extent intended to protect the revenue of the Crown, and he did not wish to make himself responsible for proposing more severe or stringent provisions than the Bill now contained. If the measure should receive the sanction of the Legislature, and its operation should be ineffective, they might then consider whether more stringent provisions ought to be adopted. When, on a former occasion, he had said that the system of foreign insurances was a species of contraband traffic, he had meant that, although it was a practice which had grown up under the shelter of the law, it was an evasion of the purpose and spirit of the law, and, therefore, bore a resemblance to contraband trade. Those hon. Gentlemen who wished to obtain a reduction of the duty on fire insurances seemed disposed to say to the Government, "We have found out a mode by which the duty on fire insurances may be evaded; we will not allow you to amend the law, but we will make a bargain with you, and we will

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exact from you in return for an extension of your powers a diminution of the duty." That was a course scarcely worthy of that House. If hon. Members objected to the tax, and thought this a proper time for sacrificing so large an amount of taxation, why not bring forward a distinct Motion on the subject, and let the question be fairly debated on its own merits? It was a mistake to suppose that this tax was one of the desperate resources to which Chancellors of the Exchequer were reduced during the war before the last, for the fact was that the duty was raised to three shillings on the 28th of September, 1815, three months after the battle of Waterloo, so that it did not come into operation until after the conclusion of the war. Many duties had been remitted since that time, but it was not until this Session, at the conclusion of a great war, with a deficient revenue and a loan of £5,000,000 just contracted, with the prospect of a further loan in view, that the cry was raised against this tax, and a pressure put upon the Government to consent to its remission. He could not say that he was at all convinced by the arguments which had been advanced for the remission of the tax. He did not mean to say that there was anything in the tax which recommended itself to his eyes beyond the revenue which it produced, and he should have been very glad had it been consistent with his public duty to consent to its remission; but in the present state of the revenue no adviser of the Crown would be justified in proposing a reduction of taxation. All the arguments founded on the presumption that if the duties were lowered the revenue would increase were mere sanguine expectations, which would never be fulfilled. If two-thirds of the duty were remitted two-thirds of the revenue would most assuredly be lost. Such was the opinion expressed to him by some of the most experienced persons connected with insurance offices in the kingdom. The arguments drawn from the state of things in foreign countries were entirely delusive, on account of the prevalence of the system of averages in foreign insurance. Where an "average clause" was inserted in an insurance a person recovered the same proportion of his loss which his insurance bore to the total value of his house. For instance, if he insured one-third of the value of his house, he recovered the third part of his loss. He was afraid, however, that any attempt to force
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by legislation the universal introduction of the system of averages would be looked upon as an intolerable grievance. The suggestion of the hon. Member for Kendal (Mr. Glyn), to lower the duty on policies containing the "average clause," and to retain it at its present amount on the others, would be found, he was afraid, to produce much confusion. The habits of the country were too deeply rooted in the present system to think of any such change being successful. Under these circumstances he trusted no further objection would be made to the House going into Committee.
SIR FITZROY KELLYsaid, that for whatever purpose the Bill was brought forward it would, he believed, be totally ineffectual. If it was ever sought to make it in any degree effective, it could only be by means to which the people of this country would never submit for the purpose of putting a stop to foreign insurance. By one clause of the Bill it was enacted that every person who insured with a foreign office should be considered a Crown debtor for the amount of the duty. But how were you to find out who was such a debtor? It was said, that in order to do so, it would be necessary to open all the letters in the Post Office; and so it would be if the foreign offices chose, as they I would, to advertise in this country, and then to communicate by letter with intending insurers in this country. The clause in question was wholly without meaning, and he did not believe it would be possible to enforce it. If there were any means of intercepting the policies as they came to this country, as you did a cask of wine or a bale of goods, then the Bill might have had some chance of being operative, though he should certainly not have expected to see a new tax of this kind introduced by the present Government. Then the Bill went on to impose a penalty on all who acted as agents for a foreign insurance company without taking out a licence. According to that, every person who came over from abroad, and called upon private gentlemen at their own house, as the agents for the wine houses did, would be liable to a penalty if he did not take out a licence. How could such a clause as that be enforced? Then, by another clause, it was provided that all persons who, by any public notice or advertisement, were advertised "as persons from, or to, or by whom proposals shall be effected, shall pay £100 a day;" so that if an insurance agent in Paris advertised that Mr. A or Mr. B

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would receive policies in England, the person so indicated would be liable to £100 a day, without, perhaps, even knowing that he had been advertised. The present Bill was an attempt, by means of an ingeniously-framed clause, to meet every possible case which could arise—to impose a duty where, from the nature of things, it would be utterly impossible, with effect, to impose or enforce it. He trusted, that if the Government felt it necessary to keep up this duty a little longer, they would let foreigners carry on their business as they had hitherto done, and would leave those who chose to trust them, and would not seek to interfere in the matter, in a way which must be utterly fruitless.
MR. GREGSONsaid, that the present was not the occasion on which to discuss the policy of the duty upon fire insurance; but he contended that, while it continued in force, foreign offices ought to be subjected to the same duty of 3s. per cent as the English offices were obliged to pay.
MR. ALCOCKsaid, he would remind the House that if they voted for this Bill they voted for that which would inevitably foster improvident habits among the people. There was property insured in this country to the value of £900,000,000, but property to the value of £1,800,000,000, still remained uninsured, and it would continue so if the Government were enabled to pass this Bill.
MR. VANSITTARTsaid, that in order to give the House a distinct issue to divide upon, he would move, as an Amendment, that the Bill should go into Committee upon that day six months.
Question put, "That the words proposed to be left out stand part of the Question."
The House divided:—Ayes 172; Noes 31; Majority 141.
Main Question put, and agreed to.
House in Committee; Mr. FITZROY in the Chair.
Clause 1 agreed to.
Clause 2 (Persons insured chargeable with Duties where Insurances made by Unlicensed Foreign Companies).
MR. BAXTERsaid, he thought some explanation was due to the Committee, for the Bill aimed at establishing a system of espionage quite foreign to this country.
THE ATTORNEY GENERALsaid, that the object of this 2nd clause was to prevent that advantage which foreign countries would otherwise have over the
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insurance offices of this country. It was not proposed to make any charge upon the foreign companies which were beyond the jurisdiction of our law, now was it sought to fix agents who might be men of straw, but the persons who effected the insurances should be liable, for he saw no one else whom they could make liable. If this were not so, foreign companies would have the advantage over our own national companies which, of course, it was desirable to prevent.
SIR FITZROY KELLYsaid, he had great difficulty in seeing how the Government were to devise means of knowing what insurances were effected subject to this measure.
THE CHANCELLOR OF THE EXCHEQUERsaid, he thought the Committee would do well to allow this clause to stand, although he frankly admitted that he did not place any very great hope in its practical result.
MR. WILKINSONsaid, he thought that the whole Bill was inoperative, but of all its provisions, this particular one was the most useless.
THE CHANCELLOR OF THE EXCHEQUERsaid, he did not attach any particular value to the clause; but, as a declaration of the liability of persons insured, it might not be altogether without use.
THE SOLICITOR GENERALsaid, he thought the clause a most reasonable one, and necessary for the consistency of the Bill. The clause made it obligatory on the insurers, in the case to which it referred, to pay the duties as a debt to the Crown, and there would be no difficulty in compelling a discovery of the insurances effected by them.
LORD STANLEYsaid, that during the whole of the discussion, no explanation had been given of the means proposed to be used to ascertain who were the parties liable to the payment of these duties.
MR. HADFIELDsaid, that if it were proposed to find out the parties by a bill of discovery, that would be a most expensive process, and the discovery of a single insurer for £5, or even 5s., might cost £500. The remedy was most impracticable, and the clause ought to be thrown out.
MR. BAXTERsaid, he would take the sense of the Committee on the clause. It could only be enforced by opening letters at the post or by employing spies.
MR. HANKEYsaid, he wished to ask, whether, if he went to Paris, and effected

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there an insurance of his house in this country, he Would be liable to prosecution on bringing back his policy?
THE CHANCELLOR OF THE EXCHEQUERsaid, that if the Bill received the sanction of Parliament, the hon. Gentleman would be, under the circumstances, liable, at the suit of the Crown, to pay the duties on insurance and the costs of the suit. He would not be liable to any penalty. The hon. Member for Montrose (Mr. Baxter) intimated that the clause could only be carried into effect by a system of espionage, but nothing was further from the intention of the Government than to resort to such means; obviously a great variety of modes of effecting the object might be resorted to, quite justifiable and according to ordinary practice. It should be borne in mind, too, that the clause would have a deterring effect, for persons would be extremely cautious how they made themselves parties to any illegal transaction.
MR. W. EWARTsaid, he would remind the Chancellor of the Exchequer that in his first speech he had said this clause would be inoperative, and that in his second speech he had said he believed it would be of much service in checking foreign insurances. He (Mr. Ewart) objected to a system of legislation which would rest upon the chance of catching particular persons who might have infringed its provisions. He had a great dislike to a system of chance, by which a person would now and then be made a victim.
SIR FITZROY KELLYsaid, he wished to have this question answered. Supposing a hundred merchants of Liverpool, or any other place, wrote to a well-known insurance-office in Paris, desiring to effect policies of insurance on their properties, received the policies and transmitted the premiums, how was it proposed to obtain the knowledge that they had effected such insurances and become debtors to the Crown for a certain amount of duty? It was no evasion of the law to effect insurance abroad. The Bill did not prohibit it. On the contrary, the Bill legalised such insurances by making them liable to duty.
THE ATTORNEY GENERALsaid, in the first place, he did not believe in the possibility of the fact which the hon. and learned Gentleman assumed. He believed that if by law insurances effected abroad were made liable to duty, no respectable
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or honest man would effect an insurance abroad, and withhold the duty. He would ask the hon. and learned Gentleman whether he himself would do so? If, as he believed, the hon. and learned Gentleman would not violate the law, it confirmed his opinion that all honourable and honest men were, by this clause, brought within the rule of the law. As to there being no means of ascertaining who were liable to the duty, there were the same means in this as in all other cases, that, when they found an individual evading the law, they came down upon him with the strong arm of the law and made him pay. The English companies would keep a very sharp look out for such offenders, and while honest men would not be guilty of evasion, cautious men would not venture upon infringement, which entailed upon them litigation, and not only the duty but the costs of a suit.
SIR FITZROY KELLYsaid, that however honest a man might be, the present measure did not show him to whom the duty was to be paid, or how it was to be paid. Assuming that the provisions of the Bill were most just, it was the duty of the Government to devise means by which Returns should be made. There was not a single case in which a duty was imposed by the Legislature in which there was not some provision made by means of which an honest man could easily do his duty, and he called upon the Government to devise some machinery for pointing out how the duty was to be paid.
THE SOLICITOR GENERALsaid, he agreed with the hon. and learned Gentleman in the necessity of introducing a clause to point out the manner in which the duty should be paid.
MR. HENLEYsaid, he had understood the right hon. Gentleman the Chancellor of the Exchequer to say that this clause had received the most careful consideration, and had been sanctioned by the Law Officers of the Crown. He thought that the right hon. Gentleman must have been mistaken, because, in the first place, one of the Law Officers of the Crown had stated that he had never seen the clause; and, in the second place, the clause, taken in conjunction with the third clause, would compel persons to pay the duty twice over.
THE SOLICITOR GENERALsaid, he must admit that, as the clauses stood, such would be the case, but care would be taken to make such alterations as would guard against that result.
Question put, "That the Clause stand part of the Bill."
The Committee divided:—Ayes 143; Noes 54: Majority 89.
Clause agreed to.
The remaining clauses of the Bill were also agreed to.
MR. HADFIELD MR. HADFIELD moved the following clause:—
"That, in place of the duty imposed by the statute of 55 Geo. III., chapter 184, schedule, part one, for or in respect of every insurance from loss or damage by fire only, there shall be paid for or in respect of every insurance from loss or damage by fire only, which shall at any time after the passing of this Act be made or renewed or continued by any public company or other person or persons licensed, or who ought to be licensed, as in the said Act mentioned, or by the Royal Exchange or London Assurance Corporation, a duty at and after the rate of 1s. for every £100 insured for a year, and at and after that rate for any fractional part of a year, as well as for any number of years for which such insurance shall be made or renewed or continued, but no fraction of a penny shall be charged."
THE CHANCELLOR OF THE EXCHEQUERsaid, it was unnecessary to repeat the arguments which had already been used against the proposition of the hon. Gentleman. The present seemed scarcely the time when the reduction of such an amount of taxation could be brought under the consideration of Parliament. Whenever there should be a surplus revenue, an opportunity would be afforded to the House to take the principle of this duty into consideration. But whenever that time arrived there would, no doubt, be other gentlemen who would prefer similar claims and advance strong arguments against other parts of the taxation of the country. It would then be the duty of the House to consider which party had the strongest claim for a reduction, and which tax it would be most convenient to the Government to reduce. He hoped, after the opinions which had been expressed, the hon. Gentleman would not think it necessary to divide the House.
Clause put and negatived.
Bill reported, as amended.
House resumed.

GENERAL WILLIAMS.
Resolution reported.
"That the annual sum of One Thousand Pounds be granted to Her Majesty, out of the Consolidated Fund of the United Kingdom of Great Britain and Ireland, to be settled upon Major General Sir William Fenwick Williams, K.C.B., for the term of his natural life, to commence from the 8th day of May, 1856."
LORD JOHN MANNERSsaid, he wished to ask the noble Lord at the head of the Government a question which, perhaps, ought to have been put to him before. As far as the House and the country knew, one of the most gallant of General Williams's companions in arms, Tahir Pasha, upon returning to his native country after his captivity in Russia, was to be brought to trial at the request, he might also say at the command, of the English Government. He desired to know if the despatch in which the Turkish Government were requested to put this officer on his trial would be persisted in? He was satisfied General Williams would feel that the honours showered on him would lose considerably in value if one of the men whose conduct he praised so highly in his despatches was, on his return from captivity, subjected to this cruel and most unjust charge.
VISCOUNT PALMERSTONsaid, he must request the noble Lord to repeat his question to-morrow.
Resolution agreed to, Nemine Contradicente.
Bill ordered to be brought in by Mr. FITZROY, Viscount PALMERSTON, and the CHANCELLOR of the EXCHEQUER.

REGISTRATION OF VOTERS (SCOTLAND) BILL.
Order for Second Reading read.
MR. BLACKBURNsaid, he must complain that the Bill had been so short a time in Members' hands, and the last two days were in the holidays, when Members had not the opportunity of delivering their opinions.
THE LORD ADVOCATEsaid, the Bill was introduced at the express desire of Members of both sides of the House, who were anxious that it should come into force during the present year, which it could not do unless it passed at once. Its object was merely to assimilate the practice in Scotland to that in England.
MR. DUNLOPsaid, he hoped the Bill might pass its second reading. He would remind the House of the tacit understanding, when the Premier gave out last Friday that they were not to be too strict in opposing the passing of Bills after twelve o'clock.
Bill read 2o.
Notice taken, that Forty Members were not present; House counted; and Forty Members not being present,
The House was adjourned at a quarter before One o'clock.