HC Deb 12 August 1857 vol 147 cc1485-504

House in Committee, MR. FITZROY in the Chair.

THE CHANCELLOR OF THE EXCHEQUER

said: It will be in the recollection of the Committee that, early in the last Session, I laid before them a proposal for an alteration in the duties on tea and sugar, which were then fixed by the existing law. That proposal referred to a period of three years, commencing from the 1st of April last. I proposed a certain triennial scale of duties, which were higher than the duties that would have been leviable under the then existing law. In consequence of the dissolution of Parliament, the Government were called upon to alter their plan. I, accordingly, withdrew the proposition I had made for a triennial settlement of the duties on tea and sugar, and I afterwards introduced a Resolution, and, subsequently, a Bill to fix these duties for a year, commencing on the 1st of April last. The proposition underwent a very full discussion, and it is unnecessary for me, now, to repeat the arguments that were then used upon the subject, inasmuch as, the discussion being so recent, they are, no doubt, within the recollection of the Committee. The effect of that alteration of the law was, that the duties on tea and sugar, although fixed at a lower rate than that which existed for the year ending the 1st of April last, were fixed at a rate which was higher than that at which they would have stood if that Act had not passed. But the rate was fixed only for the year commencing the 1st of April last, and ending the 1st of April, 1858. The Resolution which I have now placed in your hands, Sir, is not intended to make any alteration in the duties upon tea and sugar which are leviable under the existing Act, until the 1st of April next, and although it does purport to substitute certain duties for those existing from the present time, nevertheless, it makes no change in those duties up to the 1st of April next. The object which I really have in view is, to continue, for two years from the 1st of April next, the duties which are now leviable by law up to that date. It is a measure substantially to carry into effect the proposition I made fit the beginning of the previous Session, with respect to the two years from the 1st of April next, and which was dropped in consequence of the dissolution. The Committee, therefore, will understand that I do not propose to make any alteration in the Ways and Means for the existing year, but I merely propose to continue the existing duties, as they stand at present, for two years, from April next. I should not have felt it my duty to make any proposition now, with regard to the tea and sugar duties, any more than with regard to the income tax, for which I also proposed a triennial settlement, were it not for the circumstance that, with respect to articles which are imported, as in the case of tea entirely, and sugar partially, from great distances, it is expedient to give as long a notice of the intended duties as is possible, because a short notice is extremely embarrassing and disadvantageous to merchants and traders, and, moreover, prevents the consumer from obtaining the full benefit which might be derived from the existing rate of duties. If I had delayed making any proposition upon the subject of a change in the duties payable after April next, until the month of February or March, I should have been told, and truly so, that that was too short a notice to give to the trade. I, therefore, thought it was incumbent on me to make my proposition at the end of the present Session, in order to give ample notice to all persons interested in the matter. I laid upon the table, at the beginning of July, a very full return, on the subject of the duties on tea and sugar; and if hon. Gentlemen have perused that document, I am sure they have found it to contain more complete and more authentic information upon the subject of the consumption of tea and sugar in this country than was ever before included within the same compass. Assuming, therefore, that the Committee have had an opportunity of consulting that document, it will be unnecessary for me to make any lengthened statement upon that subject. I would, however, venture to call the attention of the Committee to one or two facts bearing upon this question. The amount of revenue raised from the sources we are now considering may be taken, in round figures, to be about £10,500,000 a year. The sugar duties, in the year 1855, produced £5,058,500, and in 1856, £5,129,649. The tea duties, in 1855, produced £5,310,275, and, in 1856, £5,129,649. The average revenue for the last two years, from tea and sugar, has been £10,517,525; therefore, it will be seen that a very large revenue is at stake with reference to the duties of tea and sugar. There is also another fact to which I beg to call the attention of the Committee. I fully concur with all that can be said as to the benefit which all classes of the community, and especially the working classes, would derive from a reduction of the duties on tea and sugar. The returns on the table show how increased consumption has been the consequence of reduction in the price of those articles. They suggest most strongly the making—and I regret that it is not in our power, looking at the present and prospective expenditure of the country, to be able to make—further reductions in those duties. There is, however, this consolatory consideration, that the duties fixed by the present Act are lower, with respect to tea and sugar, than they have been at any previous time. With regard to sugar, the duty may have been lower at some time in the last few years; but, with regard to tea, the duty is lower than at any previous time. The war-duty on tea, last year, was 1s. 9d. per lb., and it is fixed, at present, at 1s. 5d. per 1b. The duties on sugar are more complicated, but they are lower, on the average, than they have ever been. The average duty on sugar, last year, was 14s. 6d., and it is now about 14s. per cwt., though, in the common sorts, there is a difference of about 2s. 6d. per cwt. If, therefore, the scale, under the present Act, is compared with that of former years, it will be found that, on the whole, there is a reduction of duty. In continuing the present duties there will, therefore, for the future, be a lower scale than in previous years. With regard to tea, there is a very material reduction, as compared with a year as late as 1852. In 1852, and up to that time for a series of years, the duty was 2s. 2¼d., whereas, it is now 1s. 5d. per lb. The Committee will find in the papers before the House an account which I have obtained since the end of last Session, with a view of showing the comparative consumption of tea and sugar by different classes of society. Such a return has never been obtained before, and I will, with the permission of the Committee, state shortly what appears to be the comparative consumption of different classes in different parts of the United Kingdom. With regard to tea, it appears, on the best information that can be obtained, that in England the upper and middle classes consume 56 per cent of the whole quantity, and the poorer and working classes consume 44 per cent. In Scotland the upper and middle classes consume 54 per cent, and the poorer and working classes 46 per cent. The proportion in England and Scotland is very nearly the same. But with regard to Ireland the ratio is reversed. The upper and middle classes consume 35½ per cent, and the poorer and working classes consume 64½ per cent. There is considerable difficulty in accounting for this difference, assuming the returns to be correct; and the only suggestion that I can make is that, owing to the smallness of the middle class in Ireland, compared with the rest of the community, and the great proportion of poor to the entire community, in comparison with England and Scotland, the consumption is greater by the poor of Ireland, though it is smaller by the poor of England and Scotland. With regard to sugar, it appears that, in England, the upper and middle classes consume 60 per cent., and the poorer and working-classes 40 per cent of the total quantity. In Scotland, the upper and middle classes consume 62 per cent, and the poorer and working classes 38 per cent. Again, the same ratio is reversed in Ireland. In Ireland, the upper and middle classes are stated to consume 34 per cent, and the poorer and working classes 66 per cent.

MR. STAFFORD

How do you divide the classes?

THE CHANCELLOR OF THE EXCHEQUER

They are not divided by me, but by the persons who made the return. Like many other divisions, it is a division of degree. There is no precise line to be drawn; but, in the same manner, there is no precise line to be drawn between moderete heat and excessive heat: nevertheless, there is an intelligible line which any person can draw.

SIR HENRY WILLOUGHBY

Upon what bases are those calculations founded?

THE CHANCELLOR OF THE EXCHEQUER

The returns are obtained in Ireland from the Poor Law Commissioners, and in England and Scotland partly from the Board of Inland Revenue, and partly from the Board of Customs. The returns have been obtained with great care, but may be liable to error. I give them to the Committee as the best information it is in my power to obtain. I think they will admit that the subject is worthy of consideration. With regard to the duty on sugar, I cannot, on the whole, consider it a very excessive duty as compared with the price. The average price of sugar in bond, for the six years from 1851 to 1856, was £1 5s. 1½d., per cwt. The average duty may now be taken to be 14s. Therefore, the Committee will see that it is a duty which, as compared with the price, is not excessive. With regard to tea, I regret to say the duty, as fixed at present, bears a greater proportion to the price, and undoubtedly, if our financial position admitted of any moderation of these duties, the duty on tea would seem to have a stronger claim on our consideration. The average price of tea in bond, for the same six years, was 1s. 2½d. per 1b. The duty, at present, is 1s. 5d. Therefore, the duty on tea, taking the average price, is more than 100 per cent, which is a high duty, and, looking at the consumption of the country, it would be very desirable, if our financial position permitted, to reduce it. But there is one circumstance to which I am desirous of calling the attention of the Committee with respect to the operation of these duties. What really affects the consumer and the extension of consumption is, of course, the price which he has to pay. The price is partly affected by the duty, but also by other causes independent of the duty. Therefore, in looking at the increase or diminution of consumption, it is necessary to bear in mind, not only the increase of duty but the variation of price, which may be greater than any alteration of duty. I will venture to call the attention of the Committee to an illustration of this remark. The smallest consumption of sugar per head, since 1816, was in 1840. Comparing the two years 1839 and 1840, the consumption stands as follows:—In 1839 3,830,393 cwts.; in 1840, 3,594,412 cwts. In 1839, the average duty was £1 4s.; in 1840 it was £1 5s. 2d.: increased duty in the latter year, 1s. 2d. per cwt. Taking the facts of a diminution of consumption in the latter year, and an increase of duty, a person would naturally say, there is the explanation of the diminution of consumption. But, when we look further, we find other causes much more operative. In 1839, the average price in bond was £1 19s. 2d. per cwt. In 1840, it was £2 9s. 1d., showing an increase of 9s. 11d. The average price, inclusive of duty, in 1839, was £3 3s. 2d. In 1840, it was £3 14s. 3d.:—showing an increase in the total price of 11s. 1d., of which only 1s. 2d. was due to the increase of duty. Therefore, it is manifest that the great diminution of consumption which occurred in the latter year, was mainly attributable to the natural increase of price, and not, to any great extent, to an increase of duty. In further illustration, I will take the last two years, 1855 and 1856. In 1855 the consumption was 7,547,157 cwts.; in 1856 it was 7,071,515 cwts. In 1855, the average duty was 13s. 5d.; in 1856 it was 14s. 6d., being an increase of 1s. 1d.Looking at the diminished consumption and the increased duty, a person might say that is the cause. But then it must be borne in mind that in 1855, the average price in bond was £ 6s. 9d., and in 1856, £1 9s. 7d., being an increase of the price in bond of 2s. 10d. The average price, inclusive of duty, was, in 1855, £2 0s. 2d.; and, in 1856, £2 4s. 1d., being an increase of 3s. 11d. of which only 1s. 1d. was due to the increased duty. That also shows that the principal cause of diminished consumption was the natural increase of price, owing to the diminished supply, and, not in any great extent, to the increase of the duty. Under those circumstances, I trust the Committee will agree to the Resolutions which I have placed in the hands of the Chairman, authorizing me to found a Bill upon them, to continue, for two years from the 1st of April next, the existing duties on tea and sugar.

I will now revert to the question put to me by the hon. Baronet opposite (Sir H. Willoughby) with respect to the probable demands on the Exchequer in aid of the finances of the East India Company. The proposal which I now make will not add anything to the Ways and Means of the current year. It makes no alteration whatever with respect to the year ending the 1st of April next. It only proposes to arrest the fall of duties which would otherwise occur at that period, and to continue the existing duties for a term of two years. It seems to be expected by the hon. Gentleman, and there seems to be in the minds of the public an impression, that it will be incumbent on Her Majesty's Government to make some proposal before Parliament separates, with the view of assisting the Indian Treasury. In the present state of public affairs in India, it has been my duty, and the duty of Her Majesty's Government, to communicate with the Chairman of the East India Company on this subject and the East India Company have been informed that the Government were ready to take into consideration any representations which they might make with respect to any change in the law which they might wish to propose us to their power of borrowing money, or with respect to any financial assistance which they might wish to receive from the Government with consent of Parliament. But the Directors, having investigated the question, did not find that they were in a position which made it necessary that they should apply to the Government, at present, for any such assistance. The present financial, means of the East India Company are ample. Their present difficulties, great and formidable as they undoubtedly are, are not of a financial kind. Of course, it is impossible to say how soon financial exigencies may occur, but in the existing state of the East India treasury, we are informed, and we entertain no doubt, that there are ample means of meeting any demand likely to be made on the Indian Exchequer. Under those circumstances, Her Majesty's Government, as at present advised—subject, of course, to information which may, at any moment, arrive—do not feel called upon to submit to Parliament any proposition with regard to assistance to be afforded to the East India Company. I can say, therefore, that the Ways and Means which the liberality of Parliament has placed at the disposal of the executive Government, appear, as far as I am able to judge, to be ample for meeting the probable wants of the present financial year. If the Government had any reason to doubt their sufficiency, they would not be slow in bringing the matter under the consideration of this House, in full confidence that any want which could be established with regard to finance, and that any demand for expenditure which could be proved by demonstrative evidence to be required for the interests, the defence, and the welfare of the country, would be furnished by the liberality and public spirit of this House. The Government are not restrained by any doubt of the willingness of this House to meet any reasonable demand on their part; but, as far as they are able to judge, there is no immediate reason for making such a demand. I will merely remind the House that, up to the present time, all the demands upon the Exchequer of this country have been satisfied from the Ways and Means of the current year. We have already discharged £2,000,000 of Exchequer bonds which fell due in the month of April last; and, within the last few days, a considerable sum, in respect of the redemption of the Sound Dues has been paid. Notwithstanding those large payments, one of which was in redemption of debt, and the other in a matter equivalent to the extinction of debt, yet the growing revenue of the year appears, at present, adequate for the demands of the country, and, notwithstanding the large shipments of troops to India, I do not anticipate, at present, any inadequacy of Ways and Means to cover the expenditure of the year. I will merely add, in reference to what fell from the hon. Baronet, that he is no doubt aware that, as soon as regiments are transferred to the service of the East India Company they become chargeable to the revenue of India, and cease to be chargeable to the revenue of this country. Therefore, so far as measures have at present gone, they have produced relief rather than burden to the Exchequer of this country. The dissolution of the Bengal army, however disastrous an event to the Indian empire, is, nevertheless, immediately attended with a diminution of expense, inasmuch as the pay of about forty regiments, with the exception of the British officers, at once ceases. The immediate effect of these evils is not to bring any great charge upon the Indian or English Exchequer, and the principal loss to the Indian Government arises from the plunder of their treasuries, and the cessation of the collection of taxes in the disturbed Provinces. But the places of the regiments sent to India will be filled by recruits. Recruiting is, of course, a gradual process, and the expense attending the supplying the regiments shipped for India comes on by degrees, and, when it is carried to the full extent, only creates a charge equal to that removed by the departure of those regiments. My noble Friend at the head of the Government has already explained, with regard to the embodied militia, that it is our intention to call out regiments only so far as may be necessary in consequence of the slow process of recruiting; but it is not anticipated that the Vote, to which the House agreed last night, of £200,000 will be insufficient, and, possibly, the whole of that Vote will not be required. Under these circumstances, as I stated before, I do not, at present, anticipate that I shall have to make any further propositions to the House in Committee of Ways and Means, or in Committee of Supply, beyond what are now on the table, and I trust, that, after these explanations, the Resolutions in the hands of the Chairman will receive the assent of the Committee. The right hon. Gentleman concluded by moving the following Resolutions:—

Resolved,— 1. That, towards raising the supply granted to her Majesty, in lieu of the duties of Customs now chargeable on the following articles imported into Great Britain and Ireland, and in lieu of the duties of excise now chargeable on sugar made in the United Kingdom, the following duties shall be charged until the 31st day of March, 1860, inclusive, (that is to say):—

Candy brown or white refined sugar, or sugar rendered, by any process, equal in quality thereto, per cwt. s. d.
18 4
White clayed sugar, or sugar rendered by any process equal in quality to white clayed, not being refined or equal in quality to refined, per cwt. 16 0
Yellow muscovado and brown clayed sugar, or sugar rendered by any process equal in quality to yellow muscovado or brown clayed, and not equal to white clayed, per cwt. 13 10
Brown muscovado or any other sugar, not being equal in quality to yellow muscovado or brown clayed sugar, per cwt. 12 8
Molasses, per cwt. 5 0
Cherries, dried, per lb. 0 2
Comfits, dry, per lb. 0 2
s. d.
Confectionary, per lb. 0 2
Ginger, preserved, per lb. 0 2
Marmalade, per lb. 0 2
Plums preserved in sugar, per lb. 0 2
Succades, including all furits and vegetables preserved in sugar, not otherwise enumerated, per lb. 0 2
Tea, per lb. 1 5
2.That the following drawbacks shall be allowed on the exportation to foreign parts, or on removal to the Isle of Man, for consumption there, of the several descriptions of refined sugar here in after mentioned, until the 31st day of March, 1860, inclusive, (that is to say)
Upon refined sugar, in loaf, complete or whole, or lumps duly refined, having been perfectly clarified and thoroughly dried in the stove, and being of an uniform whiteness throughout, or sugar candy, or sugar refined by the centrifugal machine, or by any other process, and not in any way inferior to the export standard, No.3., approved of by the Lords of the Treasury, per cwt. 17 2
Upon such refined sugar already described, if pounded, crushed, or broken, in aware house approved by the Commissioners of Customs, such sugar having been there first inspected by the Officers of Customs, in lumps or loaves, as if for immediate shipment, and then packed for exportation in the presence of such Officers, and at the expense of the exporters, per cwt. 17 2
Upon refined sugar, unstoved, pounded, crushed, or broken, and not in any way inferior to the export standard sample, No.1, approved by the Lords of the Treasury, and which shall not contain more than 5 per cent, moisture over and above what the same would contain if thoroughly dried in the stove, per cwt. 16 4
Upon bastard or refined sugar, unstoved, broken in pieces, or being ground, powdered, or crushed, not in any way inferior to the export standard sample, No.2, approved by the Lords of the Treasury, per cwt. 15 1
Upon bastard or refined sugar, being inferior in quality to the said export standard sample, No.2, per cwt. 12 8
3. That, towards making good the Supply granted to her Majesty, the sum of, £l6,277,482 15s. 9d. be granted out of the Consolidated Fund of the United Kingdom of Great Britain and Ireland. 4. That, towards making good the Supply granted to her Majesty, there be issued and applied to the service of the year 1857, the sum of £606,234 4s. 3d., being the surplus of Ways and Means granted for the service of preceding years.

Resolutions to be reported To-morrow, at Twelve o'clock; Committee to sit again on Friday.

First Resolution proposed.

MR. GLADSTONE

Sir, I do not rise for the purpose of opposing the Resolutions of the right hon. Gentleman, or of detaining the Committee for any length of time, but it does appear to me that we must regard this proposal as an omen of other proposals which are to follow it. And I cannot but think that the mention of sweetmeats is in strong contrast with the nature of the right hon. Gentleman's proposals. There is one statement of the right hon. Gentleman upon which I have the misfortune to differ from him, and I cannot allow it to pass without recording my protest against it. He speaks of having paid off £2,000,000 of Exchequer bonds and provided for the Sound Dues, as if in either of those operations he were extinguishing debt, or performing a process analogous to the extinction of debt, out of the legitimate Ways and Means of the year. I do not wish to revive arguments which we have had at great length; but, so far as the Sound Dues are concerned, the case is this:—In the years 1856 and 1857, by the exercise of borrowing powers to a considerably greater extent than the ultimate expenditure required, there were large balances of borrowed money in the Exchequer, and out of those balances the Government applied £1,000,000, and something more, to the extinction of the obligation contracted with respect to the Sound Dues. The Sound Dues were just as much discharged out of borrowed money as if a special loan had been raised for the purpose. As respects Exchequer bonds, so far from considering that we have liquidated £2,000,000 out of what may be regarded as legitimate Ways and Means, I contend not only that those £2,000,000 but that £2,000,000 or £3,000,000 more, which we are applying to Ways and Means ought to be applied to the liquidation of public debt in redemption of the pledge given by Parliament; and next Session it will be necessary to review that subject at greater length. As respects the general matter of the speech of the Chancellor of the Exchequer, I am glad to understand from him that the East India Company are in such a state as regards finances that he contemplates they will be able, from their own resources, to meet for the probable period of six months the heavy charges of operations which must be undertaken in that country. If that be the case, I entirely agree both with the authorities of the Company and with the right hon. Gentleman in the wisdom of not making any present application to this House. In what he said, he perhaps alluded to what fell from me when I respectfully tendered to the Government my advice, that if they foresaw the coming necessity of rendering pecuniary aid to the Indian Government they should render a portion of that aid at once. But I quite agree that if the resources of India are in such a state as the right hon. Gentleman represents them, it is much better to avoid any demand at the present. Grave as is the crisis, most weighty as may be many of the matters raised and discussed with great ability by the right hon. Gentleman the Member for Buckinghamshire, yet I confess I incline, in common with the hon. and gallant Member for Aberdeen (Colonel Sykes), who addressed the House very recently and very admirably, to the opinion that there is nothing absolutely unreasonable in the hope that, by the blessing of Providence, the head of this mutiny, gigantic as it is, may be crushed, and certainly, so far as positive evidence goes, I cannot see the evidence upon which the right hon. Gentleman the Member for Buckinghamshire interprets this mutiny into general disaffection of the people of India. The Resolution now before the Committee has no reference whatever to Indian affairs. We are not going to increase Ways and Means, nor to make provision, directly, or indirectly, in reference to the state of Indian affairs. If any such necessity should arise it will be dealt with hereafter—but we are going to make an addition to the Ways and Means of the next two years, in the form of indirect taxes, which my right hon. Friend will be the first to admit are of a highly exceptional character. I cannot find fault with him for making that proposal to the Committee. On the contrary, I think he has exercised a wise discretion in making the proposal now, and in that manner giving full notice to all persons commercially interested in the great trades, tea and sugar, rather than postponing it to a future Session of Parliament. It may, perhaps, be thought strange that I, who offered the best resistance in my power when it was proposed to increase the tea and sugar duties, should now follow a different course. But all the considerations then in existence which led me to offer that resistance prove how improper it would be to renew it. At the period of resistance Parliament was under no pledge with reference to the great questions before the country. Parliament had done nothing to affirm in any manner the policy of the Government with respect to the Persian war; and with regard to the expenditure for the Persian war, it was estimated at an amount altogether trifling. Respecting the war in China, so far from having approved, the House passed a vote in condemnation of that policy. The Estimates which were presented in the early part of the year were presented as peace Estimates, and it was a most important question for consideration on what scale our peace Estimates ought to be framed. The question of military force is intimately connected with the spirit of our foreign policy. The spirit of our foreign policy, along with the Estimates, has since then passed under the review of the country, and I am bound frankly to own that the opinion of the country with respect to that foreign policy, though it may be only temporary, differs widely from mine. It appears, therefore, plain that nothing can be more unfair than, when the country is disposed to recommend a policy involving great expenditure, to interfere with the right hon. Gentleman, who, as Minister of Finance, wishes to make timely provision, so far as is in his power, for that expenditure. There is another point most perplexing and embarrassing to my mind, and that is the important scale of movement in the Miscellaneous Estimates. We have not only to look back to the rapid increase in those Estimates, extending over several years, but we have to consider what are the prospects for the future; and I am sorry to say that in my humble and conscientious opinion those prospects are still more gloomy and perplexing. It is quite true that on particular occasions we cavil with or make legitimate objections to some proposal of the Government. We have induced them to postpone a Vote for a museum in Edinburgh, which I am bound to say is a perfectly reasonable requirement, on a moderate scale; and we have struck out a Vote for a chapel at Paris. These things are all very well in their way, but in the majority of cases they are not instances where we retrench, but rather instances where we adjourn the charge. As regards the general scale of the Miscellaneous Estimates, it is impossible that they should be effectually cut down in this House. It is the Government, and the Government only, wisely and firmly supported by this House, that can possibly cut them down. I may, perhaps, be of a censorious disposition, but I frankly own that that the views of the Government with regard to public economy are not my views; but, if they were, is the Government firmly and justly supported by this House? What has happened in the last fortnight? Have we not seen a Bill carried, which I believe unprecedented in our history, for the wholesale increase of the salaries of public servants, in the face of an announcement supported by detailed statements from the Government, to the effect that, if we vote for that Bill, we must be prepared to see a permanent addition to the public burdens of £200,000 a year. In twenty years of criticism of Miscellaneous Estimates this House will not, so far as mere money is concerned, undo as much as it did by passing that most objectionable measure. I hope I shall not be thought to be exceeding the province of an individual Member of this House making these comments on proceedings which have received the sanction of a, large majority; but having been during the whole Session a prophet of ill, regarding with alarm the financial embarrassments towards which we are drifting, and having, perhaps too freely, found fault with my right hon. Friend for proceedings in matters of finance, I think it but fair to keep in mind an operation so remarkable and so unprecedented, as this which proves to me that the temper of the public, reflected as it is by this House, is not favourable at the present moment to economy, and which makes it the duty of those who think they see a storm coming, and who wish to mitigate its force, to raise their voice in time in the hope that something may he done to avert it, or to render it, at all events, less formidable. I tender my thanks to my right hon. Friend for having made this proposal. There is nothing surreptitious in its character. It bears on its face exactly what it is. Above all, I rejoice in the proposal on this account, that when we come near to a state of financial embarrassment we always have to recollect that two alternatives may happen to us, either of them worse than an increase of taxation—one, an attempt to shuffle and shamble on from year to year with successive deficiencies; the other, to make loans to meet the ordinary expenditure of the country in time of peace. In my opinion either of these courses is most detrimental and most disgraceful to the country, and I frankly own that I feel the more grateful to my right hon. Friend on the present occasion, because I interpret the proposal as a clear sign that he is impressed with similiar opinions with regard to the weakness, the imbecility, and the disgrace of having recourse to either of those expedients, and as a pledge that if the necessity arises he will propose at once to meet that expenditure of the country by the only wise, honest, and manly course—an addition to its burdens.

MR. CLAY

denied that he had been a party to extravagant expenditure in voting for the second reading of the Superannuation Bill. The loss which had been sustained by the abolition of the deductions need not be a total loss. His only object had been to redress the grievances of which the civil servants complained, in being made to pay to the superannuation fund a great deal more than was represented by the superannuation allowances. There ought, in his opinion, to be a revision of the salaries of the public servants.

MR. GLADSTONE

What I said on that point proceeded on the joint effect of the Bill and the frank declaration of the Chancellor of the Exchequer, that he should accept and carry out the declaration of the House without any qualification. If the hon. Gentleman thinks there ought to be a revision of salaries, let him move an address to the Crown to that effect. I have no doubt he will receive very considerable support. I will support him for one; and I don't think that the Chancellor of the Exchequer will feel at all disobliged to him. I would make such a Motion myself; but, having opposed the Bill from the first, it would not have so much weight as one proceeding from the hon. Gentleman.

SIR HENRY WILLOUGHBY

said, it was not at all clearly proved that the deductions were too large for the allowances made. All the evidence went to show that that question was not yet satisfactorily decided. His opinion was that the Exchequer in the end would be a loser instead of a gainer, as was generally supposed. His reason for opposing the Bill of the noble Lord the Member for Cockermouth (Lord Naas) was, that he looked upon it as a very unstatesmanlike mode of settling the question. He had no intention of opposing the proposition of the Chancellor of the Exchequer now before the Committee, although he was of opinion that there were other articles which could better bear an increase of taxation than tea. He did not attach any great weight to the calculations which the Chancellor of the Exchequer had entered into as to the tea consumed by the different classes of the community. It was difficult to tell how consumption went. The lower classes consumed almost as much of the higher-priced teas as the upper classes.

THE CHANCELLOR OF THE EXCHEQUER

I did not say anything about the quality of the tea consumed by different classes; it was only the quantity of which I was talking.

SIR HENRY WILLOUGHBY

The calculations as to the quantity even could not be very trustworthy. He was glad to hear that the East India Company did not feel it necessary to apply to her Majesty's Government for any pecuniary aid at present. It was, however, but a postponed demand. Considering the financial difficulties which had taken place in India during the last five years, the falling off which there would be in the revenue, and the great expenses which would be necessary in certain departments, sooner or later the Indian Government must come to the Imperial Exchequer for assistance. He was of opinion that we were rapidly drifting to an enormous deficiency. It must be borne in mind that a large portion of the Ways and Means of this year consisted of money borrowed for the Russian war which had not been needed. It had never yet been clearly stated how much of the money borrowed for the Russian war had actually been spent for that purpose. Considering that none of this money would appear in the Ways and Means of next year, and that the Chancellor of the Exchequer would also lose a considerable portion of the income-tax, a deficiency was inevitable.

MR. THORNELY

understood the proposition now before the Committee to be to extend the present duties on tea and sugar, which otherwise would be reduced on the 1st of April next, to the year 1860. If that were so, he wished to know how much money the Chancellor of the Exchequer expected to gain by this Resolution.

MR. W. WILLIAMS

did not see the necessity of this measure. It was not to take effect before next April, and it would have been quite early enough had it been proposed the first thing next Session. Two months' notice were quite sufficient for the trade. He objected to trusting the Exchequer with a balance, for he remembered that it was because he had a balance in the Exchequer that the right hon. Gentleman had consented to the payment of £1,100,000 for the redemption of the Sound dues.

MR. HADFIELD

thought that all the blame of extravagant expenditure ought not to be cast on the Government. There were many cases for which the House was responsible, and he had on several occasions gone into the lobby with the Government against propositions to vote sums of money for particular puposes to which they were opposed.

MR. DISRAELI

I am glad that we are not called upon to enter into the complicated question of Indian finance. It is not probable that we shall be favoured this year with an Indian budget, but it is extremely expedient that the House, prior to some appeals which may be made upon it, should endeavour to obtain a more accurate knowledge of our Indian finances. At the time of the passing of the charter it was agreed that a guarantee fund of £2,000,000 should be established, to accumulate at compound interest, to form a security for the Indian stock, for which the British Government then virtually became responsible. It is of the utmost importance that we should know the state of that fund. We ought to be informed whether that investment was regularly made, and whether the interest was invested in a proper manner, and we ought also to have the amount of the whole sum fairly before us. I moved about a week ago for a return of that nature, but it has not yet been presented, though I should have thought it was as simple and straightforward as it is important. I agree with the Chancellor of the Exchequer in the calculation which he has made of the comparative consumption of tea and sugar among the different classes. The murmurs of scepticism which proceeded from the hon. Baronet behind must have arisen from a misconception of what the Chancellor of the Exchequer said. The estimate which the right hon. Gentleman gave us is not by any means a fanciful one. It is founded on calculations made by a gentleman who has given great pains to the subject, and whose results have generally been acknowledged to be authentic. This calculation proceeded by way of an analysis of the population of the country and the amount of tea and sugar consumed per head, and it was shown by it that the majority of the consumers of tea and sugar must be ranked among what are called the superior classes. For instance, domestic servants figure in the population to the amount of £1,500,000. They are great consumers of tea and sugar, and as they for the most part consume the tea and sugar provided by their masters and mistresses, they were therefore very justly, for the purposes of this calculation, ranged among consumers of the higher and middle classes, and in that way it turned out that the majority of the consumers of tea and sugar belonged to the superior classes. That analysis has removed an impression, which has long been prevalent in this country that the pressure of these indirect taxes is mainly borne by the working classes. I understood the hon. Baronet to object, also, to the system which he says at present prevails of furnishing Ways and Means from borrowed money. I think he must have misunderstood what fell from the right hon. Gentleman the Member for the University of Oxford on this point, for I cannot believe that the right hon. Gentleman expressed any opinion that the Ways and Means of the present year had been furnished in any way by borrowed money. No doubt there is a prospect of a considerable deficiency, for reasons which I had an opportunity of explaining at the commencement of last Session—namely, that you have this year received an amount of war income-tax of not less than £3,000,000, which you will not receive next year. As far as that is concerned you must be prepared for a vast deficiency; but borrowed money does not at all figure in our Ways and Means. When the hon. Baronet says that the Sound dues were paid out of borrowed money—[SIR H. WILLOUGHBY: I did not refer at all to the Sound dues.] Well, then, I should be glad if the hon. Baronet would point out what portion of the expenditure was defrayed by borrowed money, for the matter is one of considerable importance. There is no doubt whatever that the Sound dues were paid out of the balances in the Exchequer, and if there had been no balances the Chancellor of the Exchequer, as he told us, would have borrowed the money on terminable annuities. But the Sound dues do not appear in the Estimates; they are no part of the Committee of Supply, and no borrowed money, therefore, enters into our Ways and Means. As far as I can understand the state of our finances, we shall have a deficiency next year, for this simple reason—that we have been living this year upon a large amount of income-tax which we shall not have next year. The amount to be raised from tea and sugar is not an amount which will at all meet the danger at hand. Next year, when we meet, we shall have an opportunity of expressing our opinions upon this important subject, and for the present I shall content myself with saying that I offer no opposition to the Motion of the Chancellor of the Exchequer.

SIR HENRY WILLOUGHBY

said, that at the beginning of the financial year there was a considerable surplus in the Exchequer of money borrowed for the Russian war. That entered into the balances, and he presumed must have supplied some part of the expenditure of the year.

THE CHANCELLOR OF THE EXCHEQUER

I can quite confirm what was stated by the right hon. Gentleman opposite (Mr. Disraeli) with regard to the estimate of the comparative consumption of tea and sugar by the different classes of the community. That estimate was by no means drawn up upon imagination, nor upon any loose conjectures. It was derived from an accurate account taken all over the country. It is difficult to ascertain precisely the amount sold by private dealers to their customers, and therefore this calculation may not be precisely accurate; but I have every reason to believe that it makes so close an approximation to accuracy as to be sufficient for all general purposes of reasoning. With respect to the question of balances, it is undoubtedly true that last year, which was substantially a year of war expenditure, a portion of the revenue was raised by loans, and there was a balance at the end of the year beyond the expenditure of the year; but it was merely a general balance in the Exchequer, formed partly by taxation and partly by borrowed money. It is impossible to say how much was money borrowed on loan and how much was money raised by taxation. The duties upon tea and sugar now in force will, unless this Resolution be passed, fall in the course of next year. They were lowered in the course of last Session—the duty on tea from 1s. 9d. to 1s. 5d., the rate at which it at present stands, and which I may observe is a lower rate than the duty on tea has ever before been fixed at. It is always difficult to make a calculation of the probable produce of a tax in future years, but in answer to the hon. Member for Wolverhampton (Mr. Thornely) I may say that if these Resolutions be not passed we must contemplate a loss of £3,000,000 of revenue.

MR. THORNELY

Is the Committee to understand that these Resolutions will, if carried, have the effect of imposing £3,000,000 of additional taxation on the people?

THE CHANCELLOR OF THE EXCHEQUER

The proposed Resolutions make no addition to the taxation as it stands in the present year. They only arrest a reduction which would otherwise take place according to law.

SIR HENRY WILLOUGHBY

Can the right hon. Baronet state how much of the money was borrowed for the Russian war, and how much of that money was spent on the war?

THE CHANCELLOR OF THE EXCHEQUER

What the hon. Baronet asks is impossible. The loan was not contracted for a specific purpose, but for the general purposes of the year. There is a return of the total amount of the loans contracted during the Russian war and of the money spent on that war. Nearer than that I cannot go.

SIR HENRY WILLOUGHBY

How much of the last loan was spent?

THE CHANCELLOR OF THE EXCHEQUER

There was a sum of £4,000,000 of Exchequer bills for which borrowing powers were granted by Parliament, but they were never used. Those powers were limited to the 1st of April last, when they expired, without the Exchequer being any the richer for them.

Resolutions agreed to.House resumed.

Resolutions to be reported To-morrow at Twelve o'clock. Committee to sit again on Friday.